After over two years of debate and division, this week, two of the European powerhouses – the European Council of Ministers and the European Parliament – finally settled on their respective positions for shaping the new CAP.

Both will take these positions into discussions in November and December and agree to make a final deal that includes the third EU powerhouse – the European Commission – before the conclusion of the German presidency of the EU at the end of the year.

What was decided this week is important but has not changed the direction of travel as laid out by the Farm to Fork strategy – agriculture’s contribution to the EU Green Deal, which is intended to make the EU carbon neutral by 2050.

The key point of difference between the three powerhouses is whether Ireland should allocate €237m or €355m annually towards new eco-schemes.

Either amount clearly puts a green gloss on the new CAP, which will start on 1 January 2023 and remain in place for at least four years to 2027.

Put the €110m from the Rural Development budget on top of that and you have a significant portion of the overall CAP budget going towards green or environmentally sustainable initiatives that farmers must adhere to or lose CAP money.

Losing funds was one of the issues Minister for Agriculture Charlie McConalogue highlighted this week and, as a result, we understand the presidency agreed to a two-year “learning” phase in which the allocation of funding to eco-schemes would be flexible. It is understood that unused funds can be moved into rural development spending in a similar area.

Negotiations on the final detail for the next two months are likely to be enthusiastic with a range of views from all sides.

Whatever happens over the next two months, it is clear that Irish farmers will have to participate in eco-schemes to draw down ongoing CAP support

One thing is clear from the commentary coming out of the European Parliament over the last number of days: many are not happy with allocating just 30% of Pillar 1 funds teco-schemes.

Given the surge in green MEPs elected to the European Parliament, this is probably not a surprise.

The other point worth noting is the Commission’s clear focus on organic production and animal welfare, which could take on increased emphasis.

So, what does all this mean? Whatever happens over the next two months, it is clear that Irish farmers will have to participate in eco-schemes to draw down ongoing CAP support. The exact detail or makeup of these eco-schemes will be developed by the Department of Agriculture. As a grassland-rich country, Irish farmers should not fear properly constructed eco-schemes that further improve the biodiversity and ecological status of farms.

What do we know of the eco-schemes? Essentially, these schemes will replace the part of CAP we now know as greening. Some element of carbon farming looks likely, where farmers get paid on changes they make to land use. Measures such as min-till, re-wetting land and planting trees, etc, might be part of it.

Nutrient management planning

Real-time or live nutrient management planning, planned crop rotation, extensive grazing, planting of nitrogen fixing crops or set-aside may come into play.

The IFA and the other farm organisations have rightly pointed out that any unnecessary bureaucracy that places further cost for little benefit to the environment and extra cost to the farmers will be very challenging. Either way, we need the best science available to our policymakers and to have them working with farmers to make the EU vision practical.

Of course, there are very different challenges among EU member states given the production differences between countries.

However, the fact that our Department has its hand on the steering wheel in terms of framing these new eco-schemes should make any developments applicable and beneficial in the long term to Irish farmers and the environment, which ultimately is what all parties want and need.

Remember the Farm to Fork strategy recognised the importance of economic sustainability on farms and that must remain a key principle.

Grain prices show benefits of local, farmer owned co-ops

The release of Glanbia’s grain prices during the week, following on from the smaller co-ops and Dairygold, is showing the benefits of having local, farmer-owned co-ops.

What seemed like a strong green barley price of €157/t from Dairygold last week has been topped by other co-operatives with Centenary paying €159/t, Glanbia paying €160/t and Barryroe €163/t.

These prices, which include bonus and co-op support, and loyalty payments, are €10-€15/t above those being paid by some private merchants. However, others are meeting local co-op price levels.

While these prices are being supported by the co-ops to help grain growers, many of whom had a very tough year, the growing strength of the market may still yield them a return on these prices.

Market sentiment has changed considerably and the safe haven of cheap imported maize has reversed, for the moment at least. Maize ex-port has drifted upwards from around €175/t back in May to €215/t this week – up €10 in the past week alone.

These trends make native grains very good value and they also reflect potential ration price pressure in the near future, with soya also up from €330/t in mid-July to €420/t ex-port this week.

Project Clover aims to meet demand for biomethane

This week we bring you exclusive details of Project Clover, a major new initiative launched by the food processing industry.

The project is a result of years of work by those involved to deliver a meaningful agriculture-led anaerobic digestion industry to remove carbon emissions from agricultural production and food processing.

If realised, the project will stimulate demand for renewable biomethane gas on a wider scale and produce a host of additional benefits for the sector. Ireland’s farmers are perfectly positioned to satisfy this demand. They have the raw materials, the skills and the desire to see this sector develop.

Ireland’s own Green Gas Certification Scheme is now operational and ensures the gas is produced sustainably and our national gas grid is now capable of receiving renewable gas directly from farms.

However, let’s be clear, this movement still needs Government backing. It needs a supportive policy environment across the whole of Government to encourage this industry-led decarbonisation proposal.

While Ireland’s renewable energy ambitions are directed toward electricity, this is not a realistic option for large uses of thermal energy.

However, an indigenous farm-based biomethane sector can deliver on this requirement for heat and also help to decarbonise agriculture as a whole.

Stamp duty relief on farm transfers

Reading ifac’s Declan McEvoy, it looks likely that there will be an age limit introduced for those who want to benefit from the stamp duty relief on land transfer between close relatives.

This could have an impact on a lot of young people starting off in farming. Thankfully, the Department of Agriculture has decided to extend the stamp duty relief on farm transfer for a further three years. However, the Department has indicated it is likely to introduce an age limit in 2021. The exact age, we don’t know yet, but in an old version of the scheme it was 67 years. Be warned as there is a significant difference between 1% and 7.5% stamp duty on land transfer.

Level 5 restrictions

As the country moves to once again reduce the level of COVID-19 infection, there is an onus on all farm families, contractors, service providers, etc, to adhere to the rules. Thankfully farmers can largely still go about their daily business. As a sector we owe it to those businesses forced to close down to do our level best to try to minimise the spread of infection. Click here for advice on what Level 5 means for farmers.

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