The future of Areas of Natural Constraint (ANC) payments, worth £20m to farmers in the Severely Disadvantaged Area (SDA), remains uncertain, with no budget currently in place to fund the scheme beyond 2017.

At the agriculture committee at Stormont last week, DAERA officials again highlighted concerns that the ANC payment does not represent value-for-money and therefore will not receive business case approval from the Department of Finance.

As part of a local decision around wider CAP reform in 2014, it was agreed that ANC payments would continue for two years.

However, that decision came by way of a ministerial directive by former Agriculture Minister Michelle O’Neill, not after a business case was approved.

“The whole issue around business case approval is that it is a non-targeted scheme, it’s not targeted at household income. It makes out a payment per hectare whether there is a large household income, or a low household income,” said Mark McLean from DAERA.

When asked why the same issue does not apply to the Basic Payment Scheme, McLean pointed out that business case approval is only required for schemes funded by UK domestic budgets (such as the ANC scheme) and not EU money.

“Post-membership of the European Union, any future income support becomes domestic monies and the issue of business case approval will arise there as well,” McLean said.

Decision

A consultation on the future of the ANC scheme closed in April, with farming organisations arguing against taking money out of direct payments (Pillar I) to fund a future scheme, and instead putting the onus on Stormont to come up with the money. In June, Minister McIlveen also ruled out using Pillar I payments to fund ANC.

However, last week,DAERA officials confirmed that she has not given a timeline on a decision on the future of the ANC scheme and has not approached the Department of Finance about funding.

Also, speaking at last week’s meeting, Ian Buchanan from the Ulster Farmers’ Union said that uncertainty surrounding the continuation of the scheme was making it difficult for farmers to agree conacre arrangements in the SDA at this time of year.

“Scotland and the Republic of Ireland have already committed to continuing their ANC schemes.

‘‘Both have also developed other ideas targeted at encouraging livestock production. NI is in danger of being left behind,” he said.