There is an intense spotlight on talks this week, between the Government and unions representing the interests of public sector workers at the Workplace Relations Commission.
Farmers looking at these talks on Tuesday, and the reported pay deal offer of an increase in public sector pay of 10.5%, were doing so with envy, knowing that at the same time Tánaiste Simon Harris was in Brussels leading negotiations to finalise the EU’s Multiannual Financial Framework (or seven-year budget) that includes a 24% cut to the CAP budget.
It is well documented, but to recap, in an Irish context the 24% cut in the CAP budget equates to a cut of approximately €2.5bn over the lifetime of the next CAP, or in the region of €300m per year.
The degree of cuts on the table mean that in contrast to recent CAP reforms, where money moved on average from farms with higher entitlement values to farms with lower entitlement values, the majority of farmers are likely to end up in a poorer financial position under current proposals.
End of entitlements
The cuts coincide with the ending of Basic Income Support for Sustainability (BISS) entitlements which provides an opportunity to introduce a flat rate payment per hectare.
The vehicle by which this will be paid will be known as the Digressive Area-Based Income Support (DABIS). The typical payment is likely to fall between €130/ha and €240/ha and will be a decision for the Department of Agriculture when forming its new suite of schemes and measures.
It is likely, however, that in the process of flattening payments that farmers with above the national average entitlement value will face another cut to payments.
The effect of recent CAP reforms to CAP pillar I payments on Tullamore Farm are captured in Figure 1.
As can be clearly seen the annual payment received has reduced by over €16,500 since 2022. In previous CAP reforms this funding has moved to other farms but with budgets being cut this funding risks now being lost entirely from the sector. Taking a low payment of €130/ha in the next CAP would result in a further potential heavy cut of upwards of €16,000 more to what were BISS, CRISS payments and Eco Scheme payments.
It looks increasingly likely that the Eco Scheme could be in the firing line to compensate for the shortfall in EU funding.
Even if CRISS payments are retained in its current format, it would only reduce the scale of the cut by shy of €1,300.
Generational renewal
For all of the European Commission’s talk of prioritising generational renewal in the next CAP it loses its appeal for sons and daughters on farms which have experienced cuts similar to those outlined.
A farm with a similar farming system and high entitlement values similar to Tullamore Farm will potentially witness their pillar I support falling by anywhere up to €50,000 in the space of just 15 years.
Yes, there are some alternative schemes on the suckler and sheep side that have made up for some of the hit, but nothing that compensates fully for the drop in support. If we want to solve generational renewal then farms also have to be viable beyond the window for securing young farmer support packages.
