The uneven distribution of payments has long been one of the major criticisms of CAP. In Ireland, the top 40% of payments go to just 10% of farmers. At the other end of the scale, 69% of farmers receive less than €10,000 annually and account for just 27% of all payments.
Capping
Capping has long been considered a way of bringing fairness to CAP. The European Commission has proposed reducing payments greater than €60,000 and introducing an absolute maximum of €100,000. While the proposal will be welcomed in many corners, it is unlikely to provide any major funding windfall for Ireland. Out of the 120,000 farmers who receive a direct payment, 716 have one greater than €60,000 and 113 have one greater than €100,000. A maximum of €16m could be freed up, a third of which would come from tillage farmers. However, the amount could be much lower as there is a provision to subtract labour costs before a cap is applied.
European Commissioner for Agriculture Janusz Wojciechowski.
Convergence
The most controversial element of recent CAP reforms has been the movement of payments from those with higher-value entitlements to lower value ones.
Convergence or flattening has seen €100m move between Irish farmers and that process is set to continue.
The target set for 2026 is 75% of the national average, with the 60% mark reached in 2019. The 75% proposal could see up to €50m transfer between farmers, with 55,000 farmers being cut and 60,000 gaining.
However, the prospect of full flattening is on the cards. The European Parliament’s agriculture committee has proposed the amendment. Some €135m would move from farmer to farmer under full convergence.
Genuine farmer
Perhaps the most important decision – and one for which where there is no clear direction – is the definition of a genuine farmer.
Everyone has been clear in stating that payments should not go to ‘armchair farmers’, but how will a genuine farmer be defined?
The Commission says: “Genuine farmers shall be defined in a way to ensure that no support is granted to those whose agricultural activity forms only an insignificant part of their overall economic activities or whose principal business activity is not agricultural, while not precluding from support pluri-active farmers.”
It’s clear in stating part-time farmers will not be excluded, however, how to determine what’s “insignificant” is anyone’s guess.
Measures of labour inputs and income tests have been suggested but such is the diversity of farm structures now, both run the risk of excluding a “genuine farmer”.
Solar panels on a dairy farm in Co Kilkenny. \ Thomas Hubert
The next CAP will place climate and the environment centre stage. The Commission has proposed that 40% of all CAP spending be dedicated to this area. For rural development programmes, almost one in every three euro spent will be on environmental schemes.
For farmers there will be a number of fundamental changes. The current structure requires farmers to comply with cross-compliance rules at a minimum. A further 30% of their direct payment is then linked to complying with greening. Then they can choose to opt in to the agri-environmental scheme, GLAS, which required a commitment over a number of years.
Next time around, farmers will have to comply with greater cross-compliances measures coined “strengthen conditionality”.
For Ireland, key changes are proposed in three areas:
Protecting peatlands and wetlands: The EU has called for the “appropriate protection” of these areas as they are key stores of carbon.Nutrient management: All farmers will be required to complete nutrient management plans, currently a requirement for those in derogation.Grassland in Natura 2000 sites: There will be a ban on converting or ploughing grassland in these areas.Greening compliance will no longer attract a 30% payment; instead it will be incorporated into the base requirements. Maintenance of permanent pasture, crop diversification, and ecological focus areas will all be included in this.
To secure the 30% payment farmers will have the option to opt into eco-schemes on an annual basis. These will reward farmers who go beyond the basic requirements.
In contrast to the existing system, where GLAS rewarded those doing more, the next agri-environment scheme will sit alongside eco-schemes. This is part of the new “strategic plans” which aim to ensure a more joined-up approach in CAP.
The key battleground in 2020 will be the budget. As it stands, proposals on the table will cut payments to Irish farmers by about €100m/year. The cuts will reduce both the budget for direct payments and rural development by €50m.
The Commission has said the cuts are necessary to fund other EU priorities. MEPs in the European Parliament have called for the budget to be maintained at current levels. The fund available to finance the next CAP will be determined by the EU’s seven-year budget called the Multiannual Financial Framework (MFF). With the UK, a net contributor to the EU, leaving, the MFF faces a cut. Some countries, such as Germany and Sweden, want to reduce the budget further while France and Ireland and others have proposed increasing contributions to maintain the budget.
As expectations of farmers increase, the CAP will require a budget to match those ambitions.
Read more
Minister Creed hints at GLAS extension
High nature value farmland and forestry to be mapped
The uneven distribution of payments has long been one of the major criticisms of CAP. In Ireland, the top 40% of payments go to just 10% of farmers. At the other end of the scale, 69% of farmers receive less than €10,000 annually and account for just 27% of all payments.
Capping
Capping has long been considered a way of bringing fairness to CAP. The European Commission has proposed reducing payments greater than €60,000 and introducing an absolute maximum of €100,000. While the proposal will be welcomed in many corners, it is unlikely to provide any major funding windfall for Ireland. Out of the 120,000 farmers who receive a direct payment, 716 have one greater than €60,000 and 113 have one greater than €100,000. A maximum of €16m could be freed up, a third of which would come from tillage farmers. However, the amount could be much lower as there is a provision to subtract labour costs before a cap is applied.
European Commissioner for Agriculture Janusz Wojciechowski.
Convergence
The most controversial element of recent CAP reforms has been the movement of payments from those with higher-value entitlements to lower value ones.
Convergence or flattening has seen €100m move between Irish farmers and that process is set to continue.
The target set for 2026 is 75% of the national average, with the 60% mark reached in 2019. The 75% proposal could see up to €50m transfer between farmers, with 55,000 farmers being cut and 60,000 gaining.
However, the prospect of full flattening is on the cards. The European Parliament’s agriculture committee has proposed the amendment. Some €135m would move from farmer to farmer under full convergence.
Genuine farmer
Perhaps the most important decision – and one for which where there is no clear direction – is the definition of a genuine farmer.
Everyone has been clear in stating that payments should not go to ‘armchair farmers’, but how will a genuine farmer be defined?
The Commission says: “Genuine farmers shall be defined in a way to ensure that no support is granted to those whose agricultural activity forms only an insignificant part of their overall economic activities or whose principal business activity is not agricultural, while not precluding from support pluri-active farmers.”
It’s clear in stating part-time farmers will not be excluded, however, how to determine what’s “insignificant” is anyone’s guess.
Measures of labour inputs and income tests have been suggested but such is the diversity of farm structures now, both run the risk of excluding a “genuine farmer”.
Solar panels on a dairy farm in Co Kilkenny. \ Thomas Hubert
The next CAP will place climate and the environment centre stage. The Commission has proposed that 40% of all CAP spending be dedicated to this area. For rural development programmes, almost one in every three euro spent will be on environmental schemes.
For farmers there will be a number of fundamental changes. The current structure requires farmers to comply with cross-compliance rules at a minimum. A further 30% of their direct payment is then linked to complying with greening. Then they can choose to opt in to the agri-environmental scheme, GLAS, which required a commitment over a number of years.
Next time around, farmers will have to comply with greater cross-compliances measures coined “strengthen conditionality”.
For Ireland, key changes are proposed in three areas:
Protecting peatlands and wetlands: The EU has called for the “appropriate protection” of these areas as they are key stores of carbon.Nutrient management: All farmers will be required to complete nutrient management plans, currently a requirement for those in derogation.Grassland in Natura 2000 sites: There will be a ban on converting or ploughing grassland in these areas.Greening compliance will no longer attract a 30% payment; instead it will be incorporated into the base requirements. Maintenance of permanent pasture, crop diversification, and ecological focus areas will all be included in this.
To secure the 30% payment farmers will have the option to opt into eco-schemes on an annual basis. These will reward farmers who go beyond the basic requirements.
In contrast to the existing system, where GLAS rewarded those doing more, the next agri-environment scheme will sit alongside eco-schemes. This is part of the new “strategic plans” which aim to ensure a more joined-up approach in CAP.
The key battleground in 2020 will be the budget. As it stands, proposals on the table will cut payments to Irish farmers by about €100m/year. The cuts will reduce both the budget for direct payments and rural development by €50m.
The Commission has said the cuts are necessary to fund other EU priorities. MEPs in the European Parliament have called for the budget to be maintained at current levels. The fund available to finance the next CAP will be determined by the EU’s seven-year budget called the Multiannual Financial Framework (MFF). With the UK, a net contributor to the EU, leaving, the MFF faces a cut. Some countries, such as Germany and Sweden, want to reduce the budget further while France and Ireland and others have proposed increasing contributions to maintain the budget.
As expectations of farmers increase, the CAP will require a budget to match those ambitions.
Read more
Minister Creed hints at GLAS extension
High nature value farmland and forestry to be mapped
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