Policy officials in DAERA have clarified the criteria that will apply to a proposed new suckler cow headage payment coming in as part of a new support package likely to be implemented from 2024.

Responding to an article in the 22 January edition of the Irish Farmers Journal, DAERA deputy secretary Norman Fulton told an online event last Thursday night that our analysis should be “completely disregarded” as it was “misleading” and “deeply flawed”.

That analysis was based on our interpretation of the wording of the DAERA consultation document which seemed to suggest that to qualify for a payment, a suckler animal will have to meet two conditions around age at first calving and calving interval.

Heifer eligibility is based only on age at calving and not the calving interval

However, DAERA has confirmed that these two conditions will be assessed separately.

So a heifer at first calving might not meet the criteria in the first year (because she calved at over 30 months), but can still meet the requirements in future years if calving interval (CI) is within target.

“Heifer eligibility is based only on age at calving and not the calving interval,” said a DAERA spokesperson.

In the first year of the scheme, it is proposed that the maximum CI for each individual cow to receive the payment is 400 days, moving to 370 days by year four.

Heifers must calve at under 30 months in year one, and under 27 months by year four.

Eligibility

While the clarification from DAERA means that significantly more suckler animals on NI farms will be eligible than the 22% wrongly suggested in our article, it still remains the case that farmers will have to change, or a significant number of cows and heifers will miss out.

Potential payment rates in the scheme have been estimated to be in the range of £140 to £160 per head, although it is understood that DAERA has not yet assessed what the rates might be.

Time to make changes

A key point made by DAERA is that if the proposals for a new suckler cow headage measure are agreed, farmers will have time to put in place appropriate management to ensure both heifers and cows can meet the eligibility criteria before the scheme is launched.

“The measure is designed to facilitate this transition over a period of time, and will be accompanied by appropriate technology transfer and training support,” confirmed the spokesperson.

Average calving interval at 395 days

Background papers recently published by DAERA to support the ongoing consultation on future agricultural policy suggest that there has been a significant improvement in suckler fertility in recent years.

The documents quote an analysis of APHIS data for 2020, which shows an average calving interval (CI) “of approximately 395 days”.

Recent estimates from both CAFRE and AFBI have put the CI figure between 409 and 415 days, although those estimates are probably related to historic data when there were more suckler cows in NI. Suckler numbers fell by over 20,000 from 2017 to 2020, and with that has probably come greater focus on retaining more fertile and productive animals.

The DAERA analysis correctly points out that herds with an average calving interval (calving index) of 365 days, have lower costs, and will produce more calves each year than a herd with an average of 415 days. However, even if the average on a farm is 365 days, there will be a range across individual cows, with up to one-third above a proposed DAERA target of 370 days.

Where there is widespread agreement is that the average age at first calving of beef heifers in NI is currently around 31 months.

52% of prime cattle over 24 months at slaughter

The second headage payment proposed by DAERA is a “beef transformation measure” which aims to improve overall efficiency of production by slaughtering cattle at younger ages.

In the first year of a potential scheme, the maximum age of slaughter to qualify for a payment (rumoured to be around £40 per head) is 30 months, which falls to 24 months by year four.

Fifty-two per cent of prime beef cattle in NI are slaughtered at over 24 months of age.

Contained within the DAERA background papers is analysis of APHIS data from 2020 which shows that 52% of steers, heifers and young bulls were killed at over 24 months, with 15% of these prime animals over 30 months.

As well as a payment by age, the Department is considering a tiered approach where the younger the animal at slaughter, the higher the payment. There is also the option at a later stage, of so-called “negative subsidy” if the industry is not deemed to be making sufficient progress in getting slaughter ages down.

Speaking at a webinar last Thursday, DAERA director Dr Rosemary Agnew said that this could involve a deduction being made from a farmer’s overall ‘beef transformation measure’ payment if some animals are above the target age.

During her presentation she also said that DAERA was struggling to find a rationale for similar headage payments to be made in the sheep sector.

Progressive cap on area payments

Among the issues covered in the DAERA background papers are the implications for farm businesses of imposing reductions on payments where they are over £60,000.

The main consultation document suggests that the cap will only apply to the resilience measure, which is the new area-based scheme that will effectively replace the basic payment scheme (BPS), starting most likely in 2024.

There will be no cap applied on Farming for Nature measures (hedgerow management, pollinator strips, tree planting, etc), which are expected to form the central plank of DAERA policy in the long term.

As interest in these agri-environment-type schemes increases, more money will be gradually shifted out of the pot for the resilience payment.

It is also worth remembering that DAERA proposes to take 17% of the current support budget in year one, and use it to fund suckler and beef headage payments.

At present, there are 432 farm businesses that get over £60,000 in BPS money

So all farms will see their area-based payments immediately reduced, and automatically fewer farmers will be impacted by the proposed cap.

The analysis undertaken by DAERA on the potential impact of the £60,000 cap to payments seems to be based on what farmers currently receive, not what they might receive in the future.

At present, there are 432 farm businesses that get over £60,000 in BPS money. That is only 1.8% of all NI farms. However, these same farms keep over 10% of our total cattle population, and over 12% of the NI sheep flock.

Over half of the farms are in the severely disadvantaged area (SDA).

If they all had this £60,000 limit applied now, it would amount to a reduction in payments of £11.93m.

Example

The preferred option is a progressive reduction in payments.

An example is shown of a 20% cut between £60,000 and £80,000, a 40% reduction between £80,000 and £100,000, a 60% cut from £100,000 to £150,000 and an 80% cut between £150,000 and the current BPS limit of £190,000.

If this system was applied to a business at the current upper limit of £190,000 (there are only six in NI), the final payment would be £116,000.

The total amount of money taken off businesses with payments over £60,000 comes to £4.43m, or 1.5% of the current BPS total of £293m.

Read more

UFU keen to set direction of travel for payments

DAERA seeking to simplify future NI farm rules