Land grab feared
If 2014 is the reference year
Major disruptions in land rental and agricultural production will be inevitable if the proposal to set 2014 as a new reference period for the basic flat rate payment is brought in under CAP reform.
Setting 2014 as the new reference period for a farmer's entitlements was one of the major shocks revealed by the Irish Farmers Journal when the CAP reform document was leaked in August.
In the initial leaked document there was an option for member states to pick an earlier reference year than 2014. This would have left the option for Ireland to select 2011. With farmers already submitting the hectares farmed for 2011, the move would have caused minimum disruption to productive agriculture. However, in the most recent leaked version, this option has been removed, setting up for an inevitable land grab in the run-up to 2014.
There were no major changes in how member starts were to set up the new basic payment system.
As the Irish Farmers Journal revealed, this would slash the payment to farmers with high value entitlements and introduce a basic flat rate payment of as low as €70 per hectare.
Under the new greening requirements, the EU is still pushing for a mandatory 30% of the national envelope. There were no major changes to the three requirements of crop diversification, ecological practices and maintaining permanent pasture.
Under crop diversification, farmers with over 3ha must have a minimum of three crops, with no crop being less than 5% or more than 70% of the land. The area that must be set aside for ecological purposes was increased from 5% to 7% in the latest leak.
It was also revealed that each farmer's reference area for permanent pasture will be set in 2014 and, after that, farmers are not allowed to let the area farmed as permanent pasture fall by more than 5%.
The proposed new scheme for Least Favoured Areas has been changed to voluntary in the latest leaked document, making it unlikely to be introduced in many countries.
The rules for coupled payments, which allow member states use up to 10% of their national ceiling for targeted schemes, remains the same.
Capping rates revealed in the leaked document last month also remain the same and the EU reinforced the idea that any funds from capping will be used for supports for rural development under Pillar 2.
The latest leaked proposals revealed that Ireland's national ceiling, without the capping deductions, would be €1.24bn in 2014. This falls to €1.235bn by 2019, a drop of just 0.39%.
In an attempt to define an 'active farmer', the EU has stipulated that direct payments will only be paid if at least 5% of their annual receipts (excluding direct payments) come from agricultural activity. This is obviously to ensure that the likes of airports, sports grounds and real estate companies don't get a windfall under the new flat rate system. Any one getting less than €5,000 would be exempt from this rule.
There was good news for young farmers. It is proposed that they will get a top-up of up to 25% on their entitlement value for the first five years. The top-up will be paid per hectare, up to the average size holding, which in Ireland is 32 hectares. A young farmer is defined as someone who is setting up for the first time in an agricultural holding as head of the holding. They must be less than 40 years of age and have adequate skills.
The installation payment to young farmers will be funded by taking up to 2% of member states' ceiling and the money will go back into that fund after the five-year period. Young farmers who have set up since 2010 could also benefit as they would have set up within five years on the new scheme.
Small farmers are set to get a lump sum of €500 to €1,000 instead of direct payments, if they sign up for a new small farmer scheme under the proposals. The scheme will be set up to minimise paperwork and regulations for farmers. Member states will have to set aside 10% of their national ceiling to fund this scheme. The publication of the official proposals is expected on 12 October.