The future of farm payments has entered uncharted territory as the European Commission plans for a radical overhaul of CAP’s direct payments from 2028 onwards.

Draft proposals seen by the Irish Farmers Journal point towards a huge, but still largely uncertain, changes to how much Irish farmers will be able to get in CAP payments.

The Commission’s focus for direct payments into the future is on what it has termed ‘degressive area-based income support’.

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This would reduce the value of payments to some “groups of farmers or geographical areas” in Ireland, to increase the levels of funding received by others.

Brussels has said that this targeting will divert payments to the farmers “most in need”. The Commission has named those “in need” as including small farmers, family farms, female farmers, young farmers, new entrants to farming, mixed farms and those farming in areas of natural constraint.

The language of the document points to the Commission seeking a complete redrawing of per hectare payment values for farmers at the very least, and does not even commit to maintaining the entitlement-based system operating currently in Ireland.

It instead references a “payment per eligible hectare [that] shall be differentiated by groups of farmers or geographical areas, on the basis of objective and non-discriminatory criteria” as its newly proposed means of differentiating payment rates.

The Commission wants these payment rates “based on farmers’ income from agricultural activity in a representative reference period” and leaves room for farm income supports taking the form of annual lump sums, in part or in full.

It does not detail where it wants this reference period to fall or how long of a window it proposes that the reference time covers. Current CAP payments were largely based on farm output in 2000 - 2002.

New form of payment convergence

The Commission is considering putting forward a new method of converging the total value of farmers’ income support payments, in addition to revamping payments on a per-area basis.

The move could converge total income supports, rather than keeping with the current approach of just converging the values of historically-linked entitlement values per hectare.

Area-based income supports valued between €20,000 and €50,000 before undergoing this proposed ‘degressivity’ procedure are to have the value of their income support payments above €20,000 slashed by one-quarter under the plans the Commission is considering.

In addition, farmers due to receive between €50,000 and €75,000 before degressivity are to have 50% of their value within this window clawed back for redistribution, while amounts between €75,000 and €100,000 are to be reduced by 75%.

The total value of area-based income support received per farmer per year should not exceed €100,000, the proposals say.