According to the Teagasc National Farm Survey in 2021, the average cattle-rearing farm or suckler farm had a direct payment of €464/ha, of which the Basic Payment Scheme made up €246/ha.

To put this in context, the average income was €334, meaning that direct payments make up 139% of income on suckler farms.

These farms are using €130/ha of direct payments to subsidise production and keep going. You can see that any shift in support payments to suckler farms will have a massive impact on direct income on these farms.

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These payments aren’t just a bonus on top of the income from production. They make up over 100% of the income on suckler farms.

The changes that will come into effect in 2023 have divided farmers on the ground with the beef sector being particularly divided on the issue of convergence and flattening of payments.

Many people perceived this to be an east-west divide. However, it wasn’t as clear-cut or simple as that.

Farmers on higher-value entitlements will stand to lose more in the current CAP regime, while farmers on low-value entitlements will stand to gain in 2023.

There are many small-scale suckler farmers in the west of Ireland who had built up high-value entitlements through farming a little more intensively or through loss of rented land and stacking. These farmers will be hit hard in the next round.

Hill farmers and extensive farmers will see their payments move upwards and for some on large areas, this will be a substantial increase in income.

Full-time suckler farmers in the east and south will be hardest hit. Where these farmers are renting or leasing land, the beef system will come under increasing pressure to pay for it.

Full-time farmers don’t have another income source to prop up the farming enterprise, so it will hit these farmers hardest and I would fear for the future of many of these farms.

The lure of dairying and going organic may be the only option available to these farmers to keep themselves in a job.

Case study 1: Seán Fieldman

Seán Fieldman farms 200 acres in Kildare. The farm is a traditional Kildare fattening operation with good, dry land capable of getting out cattle early in spring for a long grazing season.

The farm would be classified as an intensive beef finishing unit, finishing 300 cattle annually.

The farm purchases 150 bull weanlings in the west of Ireland in September and October each year and these are finished indoors as under 16-month bulls.

It also finishes 150 heifers off grass in the autumn-winter every year. The farm runs a small tillage enterprise for the production of homegrown feed and straw for bedding cattle sheds.

Because the farm was drawing high numbers of premiums during the reference years in the early 2000s, it has a high entitlement value.

The existing entitlement value is €537/ha, which is almost double the national average. Table 1 outlines the situation over the next number of years.

The new Basic Income Support for Sustainability (BISS) will be €299.85/ha in 2023. This value will, however, reduce every year over the next five years to finish up at €237.50 in 2026 and 2027.

The total BISS payment will be €23,988 in 2023, reducing to €19,000 in 2027. This farm will stand to lose €4,988 through convergence or flattening of payments.

The farm will be eligible for the eco-scheme payment and will draw down €6,160 as part of this. It will, however, contribute €4,580 to eco schemes through deductions. It will also receive a CRISS payment of €1,294.50 annually but, again, contributions amount to €3,001.50 over the next five years, so the net gain is €3,471 or €694/annually.

The farm will also contribute €1,288.80 to the young farmer scheme over the next five years.

Because of the high entitlement value, this farm is hit hard and will see a reduction in income supports of €72,548 (€14,509/annually) over the next five years.

The problem with this scenario is Sean was using his CAP support payments to subsidise the purchase of weanlings in the west and, without these supports, you would question whether he will be able to continue paying the €3/kg for weanlings in the years ahead, which he has been paying in the past.

Case study 2: Susan Farmer

Susan Farmer is farming 50 acres just outside Ballyconnell in west Co Cavan. Susan is a part-time farmer and also works in a local animal feed business in the accounts department. She is currently farming 50 acres of typical drumlin soil.

She has 20 suckler cows that calve in February and March every year and weanlings are sold in the local mart in Carrigallen every year in October and November.

It’s a typical small-scale suckler system heavily dependent on support payments. The farm isn’t stocked particularly intensively, but all of the farm has been reseeded over the last 10 years. She averaged €1,157/head for her weanlings in 2022.

As weanlings have been traditionally sold on this farm, the entitlement value is low at €250/ha, leaving an annual basic payment of €5,000 in 2022.

In 2023, Susan’s BISS entitlement value will drop to €149.26/ha, leaving her a total BISS payment of €2,985.20. She will qualify for an eco-scheme payment as she has over 10% of her farm currently designated as space for nature.

Her CRISS payment amounts to €863/ha on an annual basis. Under the new regime, this farm will stand to gain €388 a year over the next five years or €1,940 in total over the next five years.

The farm was a previous participant in GLAS getting a payment of €4,500 annually.

Susan has applied to join the new ACRES and if her application is successful she will get a payment upwards of €3,500 in this environmental scheme.

She will also see her suckler support payments increase by €900 annually if she joins the new Suckler Cow Efficiency Programme and the replacement for the BEEP scheme.