The new CAP proposals will be formally released in a fortnight. They have been widely leaked in the form of a draft document, but most farmers have been way too busy in recent months to consider their potential impact.

The key question for most farmers surrounds the value of their basic payments.

A number of assertions can be made at this point.

Ireland’s national envelope will probably hold or fall in line with the overall CAP budget. This is because our payments per hectare are bang on the EU average, so any inter-country adjustments will not particularly affect us.

The proposed 5% cut thus translates directly to a 5% cut in the envelope. But how will this affect direct payments?

The proposal is for a 4% cut to Pillar I, which funds the Basic Payment Scheme, and a 20% cut to the Rural Development Programme fund.

This mix would seriously affect GLAS, BGDP and TAMS unless the Government puts its hand into its own pocket and increases the level of co-funding.

This brings us back to the key issue for farmers – the basic payment. A 4% cut might be imposed across all farmers, meaning a farmer with 30ha getting €300/ha would see his payment go from €9,000 to €8,640.

The likelihood is that all the cuts will be imposed on farmers with higher payments – anyone under €200/ha will hardly be touched. So a deeper cut of over 5% is likely, even if no other form of redistribution takes place. Farmers with higher entitlements have had significant cuts since 2015. Cuts of 15% to 20% will be complete by next year.

Unless the budget cuts are reversed, a farmer with 50ha and entitlements of €350/ha in 2019 could see his payments cut from €17,500 to €16,625. If that farmer is in drystock, that’s a direct income cut, as this week’s National Farm Survey results have re-confirmed.

This figure is on top of a cut of almost €4,000 since 2015 and before any new redistribution measures.