Is the new CAP deal good or bad? In the drystock sector, there isn’t a simple answer to that question.
If you’re an extensive hill farmer with 200 acres of commonage and entitlements worth €120/ha, it’s a very good deal and will reward you in a more equitable way than the current system.
If you are a beef finisher on 100 acres of good land with entitlements worth €450/ha, it’s a bad deal.
The real problem with the reform is that most farmers are being asked to do a lot more for less money.
Taking a look at the 2019 Teagasc National Farm Survey figures, the average BPS payment on dairy farms was €280/ha, with average total income of €1,118/ha so the BPS made up 25% of their income.
On suckler farms the average BPS payment was €243/ha on a total farm income of €285/ha meaning the BPS on suckler farms makes up 85% of farm income on suckler farms.
The drystock sector has a huge reliance on supports
On drystock farms the average gross output figure was €36,619, with €7,716 (21%) of that made up by the BPS. The cuts being applied are not fair and equitable across all sectors based on different sectors’ reliance on supports.
The drystock sector has a huge reliance on supports and given the profitability and market challenges that exist, it’s hard to see how reducing these supports will help farmers. It is of vital importance that Pillar II funding is co-financed to the maximum level and these payments directed to the most vulnerable sectors. Without this Pillar II funding, we can kiss goodbye to our suckler cow and resign ourselves to building our beef industry on finishing animals from the dairy herd.
In relation to coupled payments, many were irked at the thought of a portion of their BPS going to a coupled payment but it’s now being sliced off in many different ways and you would wonder now, given the size of the cut for eco schemes, would a coupled payment for farmers have been the correct thing to push for?
– Adam Woods
Dairy farmers will view the new CAP deal with a sense of trepidation.
For one thing, BPS payments on dairy farms are slightly higher than average at €280/ha, meaning many dairy farmers have a lot to lose through convergence.
Secondly, while the reliance on direct payments at 25% of family farm income is much less than it is in other sectors, it still represents a substantial chunk of dairy farm income.
However, convergence and reliance on payments aside, the big fear from a dairy perspective is the eco schemes. At 25% of Pillar I funding for eco schemes, it represents a significant chunk of the BPS payment and one which, up to now, every dairy farmer retained under Greening.
The Department of Agriculture will need to carefully balance the environmental requirements of eco schemes with productive, profitable dairy farming
It remains to be seen what shape the new eco schemes will take and how restrictive they will be for Irish dairy farmers.
Across Europe, dairy farmers are effectively arable farmers growing crops of maize and grass silage to feed their cows housed in barns. One would assume that the pasture-based systems employed in Ireland would be green by nature, in comparison to our EU colleagues.
The Department of Agriculture will need to carefully balance the environmental requirements of eco schemes with productive, profitable dairy farming.
The opportunity cost of taking dairy land out of production to facilitate eco-schemes is much higher than it is for other sectors. If this CAP is to be successful, this opportunity cost needs to be fully reflected in the payments.
– Aidan Brennan
The available details for the new CAP indicate that it is very worrying for tillage farmers.
The consequences of the combined measures seem likely to further erode returns and area, despite a national objective to hold or increase the area in tillage.
Production support will be hit on three fronts – convergence or payment flattening, the new CRIS or front-loading measure, and the proposed redistribution of eco-scheme funding.
While these are not just confined to tillage, the sector will suffer heavily because of larger farms and stacked entitlements.
Enforced rotation on every parcel every year is a new requirement that can only be described as draconian.
It would have been much more sensible to incentivise growers to have more diverse rotations
It can only have been dreamed up by people with no basic knowledge of farming.
While rotation is fundamentally good, enforced annual change offers nothing only further income reduction.
It would have been much more sensible to incentivise growers to have more diverse rotations.
This could challenge our ability to supply the increasing demand for crops like malting barley for distilling.
There is also a requirement to have a 3m minimum buffer strip along by watercourses to be kept free of pesticides and fertilisers.
Tillage farmers have seen this before but it needs clarity on what a watercourse will be.
It seems that many of the new obligations can be offset if a farm has 75% grassland, even if it is 1,000ha of tillage with 3,000ha of grass
There is also a requirement to have at least 4% of arable land at farm level devoted to non-productive areas and features – will our previous ecological focus areas count, and the buffer strips?
Given the range of new obligations, it seems likely that leguminous crops will be much more important on tillage farms in future.
Does the EU not want specialist tillage farms?
It seems that many of the new obligations can be offset if a farm has 75% grassland, even if it is 1,000ha of tillage with 3,000ha of grass.
It seems like Irish producers must suffer yet again because of the proliferation of tillage in other EU countries. Reducing tillage production merely results in more feed imports.
The challenge facing the Department now is to minimise the consequences of these regulations and to introduce measures to address lost income support.
– Andy Doyle
A significant cohort of farmers will benefit from the mandatory introduction of at least 85% convergence, while mixed farms with higher-value entitlements or those not capable of satisfying eco-scheme objectives could see a reduced payment.
The reaction from sheep farmers to the CAP reform agreement at EU level has been mixed. Some farmers are only starting to understand what it means for them, while others say they will wait until they see how Ireland accommodates these rules in a national plan before making final judgement.
Sheep farming as a sector fared out relatively poorly when entitlements were originally established
It appears that there will be a significant cohort of sheep farmers who may benefit from payment distribution.
The five counties with the lowest average value entitlements include Leitrim, Donegal, Kerry, Mayo and Sligo, all of which have a large sheep population and a considerable area of hill and mountain land which typically possesses lower value entitlements and stands to gain from the redistribution.
Sheep farming as a sector fared out relatively poorly when entitlements were originally established and as such there is another significant cohort of farmers with entitlement values in the region of the national average that will be influenced more by eco schemes.
All groups will also be watching closely to see how eco schemes are formulated
The last grouping is mixed farm enterprises with a sizeable beef enterprise who have higher entitlement values and will face hefty cuts to the farm’s overall payments.
All groups will also be watching closely to see how eco schemes are formulated and particularly looking at what needs to be completed to receive payments.
If eco schemes are based in any way on payments being used to compensate for costs incurred or income foregone, farmers will be in a worse position. These schemes must be devised in a manner than benefits animal performance and the environment without leaving farmers worse off financially.
– Darren Carty