The political agreement reached on 25 June by the European Parliament and Council on the new Common Agricultural Policy (CAP) 2023-2027 set certain limits that member states must follow.

This includes examples such as 85% convergence, a Complementary Redistributive Income Support for Sustainability (CRISS), which essentially is the redistribution of payments from larger to smaller farms, and the allocation of funds under Pillar I to eco schemes.

These measures have been highlighted at EU level as delivering a fairer, greener, more animal-friendly and flexible CAP.

While protocols have been set out for the mechanisms described above, member states have some flexibility in implementing them and this is likely to be the area which generates the closest scrutiny, debate and feedback during the consultation phase which opened on 27 June and will close on 27 August.

Six key questions

The following are the six areas identified in Ireland’s CAP strategic plan 2023-2027 and the questions posed by the Department of Agriculture.

1 Level of convergence

Background – The level of convergence of payments under the next CAP has increased from 60% to 85%. The value of each entitlement must reach a minimum of 85% of the national average payment entitlement value by 2026.

Member states can opt to increase beyond this level of convergence and Minister for Agriculture Charlie McConalogue has previously stated that he is keen to keep all options open for discussion during the consultation phase.

Key question – “should internal convergence stop at 85% of the national average payment entitlement value in 2026, or should it go to a higher percentage?”

2 Eco-scheme funding

Background – The EU has set out that at least 25% of the Pillar I budget must be allocated to eco schemes. It is possible for a limited reduction on this figure if member states spend large amounts on environment and climate-related measures in Pillar II and this is the case in Ireland’s situation. It is also possible for member states to allocate a higher portion of funds to eco schemes.

Key question – “Should Ireland go beyond the 25% of direct payments to be allocated to eco schemes? Or should Ireland use the flexibility in the regulation to reduce the percentage allocated to eco schemes?”

3 Capping and reduction of payments

Background – 122,000 farmers received direct payments worth €1.2bn in 2020. The fact that a small cohort of recipients draw down large payments is a point of grave contention that crops up annually when the Department of Agriculture publishes CAP payments. For example, in 2020 the top 20 payment recipients claimed just over €3.6m.

It is possible for member states to introduce a capping and reduction of payments. In the consultation document, the Department of Agriculture states that payments may be capped at €100,000 with the possibility to reduce payments exceeding €60,000 by up to 85% along with scope to define additional tranches and percentage reductions.

The Department highlights that the full application of an 85% reduction above €60,000 would result in an effective limit of €66,000.

Key question – “Should Ireland implement capping at an effective rate of €66,000 or €100,000, or at a rate in between?”

4 CRISS

Background – This new mechanism provides for the redistribution of at least 10% of a member state’s direct payments ceiling from what are considered larger farmers to smaller or medium-sized farmers.

Member states can, however, choose not to implement the measure if they can demonstrate that their redistribution needs are beings addressed through other Pillar I measures.

Key question – “Should Ireland go beyond the 10% of direct payments to redistribute from larger to smaller or medium-sized holdings or should Ireland seek to use the derogation to reduce the percentage? Should this funding be redistributed to farmers with holdings of less than 30 hectares?”

5 Fairness of proposed payment mechanism

Background – The diverse landscape of farms in Ireland means there will be farmers who will gain from the proposed mechanisms while there will be others who will be in a worse position. The Department is seeking feedback in this regard.

Key question – “What aspects of the current system do you consider unfair, and what is the best combination of all the above mechanisms in order to bring about a fairer distribution of direct payments?”

6 Gender equality

Background – In the region of 12% (16,100) of farms in Ireland are owned by women while 11% of farms are managed by women. The National Women’s Council of Ireland has highlighted that Ireland has the fifth lowest number of female farmers in Europe despite CSO figures showing one-quarter of those working on farms are women.

Key question – “Should there be a specific intervention to incentivise gender equality?”

Modelling of different scenarios

The consultation document highlights that the questions raised are complex with many inter-linked elements.

Therefore, the Department has carried out further extensive modelling of the potential effects that these mechanisms will have.

This, it says, will allow stakeholders to more fully assess the potential implications of the different policy choices available.

The Department says this modelling is being made available separately, and will inform discussions with farmers and others both over the immediate two-week period of the consultation and on an ongoing basis thereafter.

This is an essential component to allow informed debate and discussion.