Editorial: is a new approach to ag policy needed in 2022?

As 2021 draws to a close, we should reflect on the extent to which farmers have struggled to influence agriculture policy over the past 12-18 months. Nowhere was this more evident than in the shaping of the Common Agriculture Policy (CAP).

The move by the European Commission and Parliament to ringfence a significant proportion of Pillar 1 supports for environmental measures sees this reform effectively raid the budget for direct income supports paid to farmers.

While the design of eco-scheme measures and the percentage of supports linked to these measures has been negotiated, the net contribution of Pillar 1 payments to family farm income has been dramatically reduced. A dangerous precedent has now been set for future reforms. The end result has been to force farmers to wear two CAPs: the Common Agricultural Policy and the Climate Action Plan – but with all measures funded out of only one existing budget.

CAP failure

The outcome reflects more than just a failure in CAP negotiations. It is also reflects a failure to ensure that agriculture was properly represented when it came to ensuring adequate environmental funding under the EU’s €750bn stimulus fund – weighted towards helping member states introduce climate action measures.

Ireland received under 0.75% of the fund, reflecting that – for the first time ever – it was allocated on the basis of GDP per capita rather than per head of population. With our GDP per capita grossly distorted (over twice the EU average) by multinationals shifting capital assets to their Irish headquarters, the allocation mechanisms cost Ireland over €2bn in green-focused funding mechanisms.

Ireland’s diplomatic response at EU level to the move was completely muted. Farm organisations have yet to link the fact that the level of funding available to support farmers to meet the challenges associated with decarbonisation has been negatively affected due to the concentrated presence of multinationals in Dublin.

Brexit funding

2021 also saw the introduction of the EU’s €1bn Brexit Adjustment Reserve (BAR). On a recent webinar, Brendan Gleeson, secretary general of the Department of Agriculture, confirmed that farm organisations had yet to make any submissions in relation to how this fund should be used to support farmers. Meat and dairy processors were obviously more proactive, having recently secured almost €100m of funding under the BAR.

Ultimately, the direction of agricultural policy over the past 12 to 18 months suggests that the voice of farmers and the strength of the farm lobby in Europe and Ireland has been significantly diluted.

Lack of leadership

A lack of political leadership has been a major factor with an increasing level of populism evident in the design of policy. But environmental NGOs, who play an important role, and wider business such as investor groups or those representing food tech companies are becoming increasingly prominent in determining the future of agricultural policy.

Farmers and indeed the wider industry need to consider if the approach and skillsets that have served the sector up to now are fit for purpose in the new era of green transition and the changing political landscape, both nationally and across the EU.

Has the sector the adequate expertise across the key areas including environmental science, economic modelling, human nutrition, bio-energy and carbon trading to generate and communicate policy positions that balance those being put forward by a highly sophisticated and well-resourced anti-farming lobby?

Plenty to play for

While ground has been lost, there is still plenty to play for. But to get results the sector needs to be in a position to bring more balance to debate with coherent and strategic farmer-led policies. The CAP strategic plan may have gone to the EU for approval but there will undoubtedly be opportunities to secure policy adjustments that could make significant differences to farmers and sectors.

At the same time, there remains a huge opportunity to secure financial assistance under the BAR to fund a significant restructuring of beef farms in advance of major challenges in the British market – provided the temptation to raid the funding pot in the face of a potential winter finishing crisis is avoided.

The Climate Action Plan remains totally in play with the emission reduction target for agriculture yet to be finalised. Where this lands within the Government’s range of 22-30% will have major consequences for farm incomes and the rural economy. The Irish Farmers Journal-commissioned KPMG report indicates a job loss range of 10,000 to 40,000 and a reduction in farm incomes of 10-35%.

As we look ahead to 2022, the stakes are simply too high to continue as normal in what is a much more challenging political environment. We have exceptionally well-resourced farmer-owned co-ops, an IFA with a very strong balance sheet and a network of farmer-dependent businesses that are all exposed to the consequences of the current policy direction. There is no lack of financial firepower to put in place the necessary structures and skills to protect the farmers on which all of these organisations depend. The question is: does the leadership exist across the sector to make it happen?