CAP review: Critical issues at stake

By Matt Dempsey

This week senior officers of the Department of Agriculture, in a detailed briefing, for which we are grateful, took us through the progress on the Mid Term Review of the CAP. A great deal of technical progress has been made.

But a key number of very serious issues remain.

The first is that it is hard to imagine a series of proposals that are so anti rural development. All countries are worried about the effect these proposals if implemented, will have on all economic activity in their disadvantaged areas.

A very significant fall in suckler and sheep numbers in these areas is inevitable if these proposals come into effect along their present proposed lines. Ireland with 90% of its premium payments tied to livestock is uniquely vulnerable.

The figure in France is only 30%, in other words 70% of French direct payments are to the arable sector.

The second point of note is that Ireland, ie the Republic, is resolutely opposed and will not operate a flat regional or national payment. If the system comes into effect it will be based on historical payments per farmer. Northern Ireland seems to be coming down in favour of a flat payment type system - if it is let do so by Whitehall and so is Denmark.

The third key concern is the minimum stocking rate that may be insisted on to keep the land in good agricultural condition.

For individual cattle and sheep farmers the new proposals have definite short term attractions. How long term such payment would be is an entirely different question.

They have no merit whatsoever for dairy farmers as they combine the rigidities of the existing quota system with a significant drop in price.

Will they actually come into effect? Probably yes in some shape or form. When?

It is unlikely that they will be finalised before the WTO talks are concluded, as this could tie Europe's negotiating hand in the WTO discussions, but it's likely that the agreement will be concluded before May of 2004, which is the scheduled date for the new Central and East European countries to join.

At this stage the main dilemmas facing farmers and Irish policy makers are:

What will the new price levels be or will indiscriminate imports be let undercut the EU market - especially in beef. This will be set in the WTO framework.

With the EU agricultural budget set, have we any suggestions how it might be better used to protect farmer incomes and real activity in rural areas?

Within the dairy sector the proposed mix of reduced price and quota is not logical. How much discretion will be given to member states to give top payments?

And lastly there are going to be some individuals badly affected because of family or other circumstances. With the national reserve so low it looks as if they will be left very much on their own.

They should be told immediately rather than be made struggle through the courts as in the early dairy quota battles.

We are facing into fundamental changes. As farmers each of us can only prepare on the basis of what information is available and avoid making long term potentially damaging commitments while these pivotal discussions are taking place.