GLAS scheme to be the "new REPS" for 50,000 Irish farmers
An Taoiseach Enda Kenny and Minister for Agriculture Simon Coveney have today announced details of the new rural development package.

Click here for full analysis of the Glas scheme by the Irish Farmers Journal.

A new agri environment scheme called GLAS and 60% grant aid to young farmers for farm buildings are two headline elements of the new rural development programme announced today by Minister for Agriculture Simon Coveney.

The new GLAS (green, low carbon agri-environment scheme) provides for a maximum payment of €5,000 for up to 50,000 farmers, and a further payment of up to €2,000 for a limited number of farmers "who take on particularly challenging actions". Farmers will also welcome the news that annual Disadvantaged Area Payments of €195m are also protected.

At a press briefing shared with An Taoiseach Enda Kenny, Minister for Agriculture, Food and the Marine, Simon Coveney announced the allocation of more than €12.5 billion in Common Agricultural Policy and exchequer funding to the agriculture sector in the period to 2020.

Minister Coveney said: “In addition to the €8.5 billion in EU funding that will be paid in direct payments to farmers in the period up to 2020, I am delighted to announce that €1.9 billion in national funding will be added to the €2.2 billion EU funding already secured for expenditure on rural development."

Direct Payments

The Minister announced that he has decided that Ireland should implement the so-called ‘partial convergence’ model. Under this approach, payments will move part of the way towards a national average rather than to the uniform payment also provided for under the CAP reform agreement. By opting for this approach, he is ensuring that the direct payments system is made fairer and more equitable while at the same time ensuring that the level of redistribution of payments between farmers is not of a scale that could jeopardise the achievement of the Food Harvest 2020 objectives.

The Minister said: “During the CAP reform negotiations I argued very strongly for Member States to be given the flexibility to tailor the reform outcome to their own farming circumstances. I am delighted now to be able to take what I believe to be full advantage of this flexibility. There will be significant transfers given that all entitlements must be valued at 60% of the national average entitlement value by 2019. However, I think I have struck the right balance between making the system fairer and supporting the sustainable development of the sector.”

Young farmers

The Minister also highlighted efforts to encourage the participation of young farmers in agriculture. He has decided to use the provisions of the CAP reform agreement as follows:

• the full 2% of the national ceiling will be allocated to young farmers, providing for a 25% ‘top-up’ on direct payments on up to 50 hectares for farmers under 40 years of age (worth more than €16,000 over the period where payment is made on the maximum area for the full five years of the scheme),

These direct payments measures will be complemented by further support under the Rural Development Programme, where a separate strand of the support for on-farm capital investment will be ring-fenced for young farmers at a higher rate of aid intensity of 60%.

The Minister emphasised that the priority in deciding how the Rural Development Programme would be structured was the need to ensure an effective contribution to the achievement of the Food Harvest 2020 objectives in a way that would complement the direct payments regime. He was pleased to be able to confirm the available funding of €1.9 billion at this point, which has allowed him to give an outline of the proposed new measures to be included in the Programme. These will be discussed in further detail with the stakeholders over the coming weeks before the Programme is submitted to the Commission for approval.

The Minister referred in more detail to the main areas to be targeted (in addition to young farmers as mentioned previously):

• a substantial new agri-environment/climate scheme (GLAS), which will build on the progress made under REPS and AEOS. This will provide for a maximum payment of €5,000 for up to 50,000 farmers, and a further payment of up to €2,000 for a limited number of farmers who take on particularly challenging actions,

• continued strong support for disadvantaged areas (now Areas of Natural Constraint), to the tune of about €195 million per year,

• incentives for on-farm capital investment, including support for the expansion of the dairy sector following the abolition of milk quotas in 2015,

• a new beef data and genomics measure worth up to €52 million per year aimed at improving the genetic quality of the beef herd.

SECTORAL IMPACTS

Beef

While there will be a dividend for beef production arising from dairy expansion, the Minister said that “it is critically important to recognise the specialist beef breeding sector as the seed bed for Ireland’s high quality indigenous beef industry. Public support for this vital sector must focus on increasing the value of its contribution to the economy, but also on addressing the key vulnerability of relatively poor efficiency and profitability at farm level.” This will be achieved through a combination of building on existing supports and adopting a more strategic approach, as exemplified by the following:

• the new beef data and genomics scheme (payment of €80 per calf),

• knowledge transfer measures that will improve key skills needed at farm level,

• the GLAS environmental scheme, payments for farmers in Areas of Natural Constraint and measures to encourage collaborative farming, which will especially benefit suckler farmers,

• the targeted advisory measure on animal health and welfare, and

• beef quality schemes to assist marketing of local products through EU programmes.

Dairy

The Minister said that “with milk quotas to be abolished in 2015, significant investment will be required at farm level to manage the additional milk volumes targeted in Food Harvest 2020.” The Rural Development Programme will therefore support the sector through the following measures:

• support for capital investment for dairy equipment, including targeted support for young farmers setting up for the first time, will be a priority in the initial phase,

• knowledge transfer measures will be prioritised for dairy expanders and new entrants,

• targeted advisory service on animal health and welfare,

• support to partly offset the start up costs of approved collaborative farming arrangements.

Sheep

The Minister highlighted the following:

• the €13 million Grassland Sheep Scheme is subsumed into the baseline Single Farm Payments figure for sheep farmers,

• knowledge transfer measures will help to improve efficiency and profitability in sheep production,

• the targeted advisory measure on animal health and welfare, support for collaborative farming arrangements and lamb quality schemes,

• the new GLAS environmental scheme and payments for farmers in Areas of Natural Constraint, will be of substantial benefit to sheep farmers,

• sheep farmers in particular will benefit from the redistribution of direct payments.

Pigs and Poultry

• Capital investment support will continue to be made available under the new Programme, subject to the phasing decisions made following the forthcoming consultations with stakeholders.

Arable

• Investment support will be made available for slurry storage on cereals farms.

• A new incentivised support programme for the protein sector will be introduced.

Artisan/Food SMEs

• A new Artisan Food Cooperation Scheme, comprised of annual grant support to help artisan food producers to improve and validate production quality, and improve the awareness and marketability of local and niche category products.

Reaction

IFA President Eddie Downey said the seven-year investment, along with the CAP Pillar I Single Farm Payment, will allow agriculture to deliver jobs and export growth as part of the economic recovery and will help to meet the targets in Food Harvest 2020. On an annual basis, EU funding for the Single Farm Payment amounts to €1.2bn, and €313m for the Rural Development Programme. In addition, national funding will amount to about €270m per annum, which allows for a full drawdown of maximum funding.

Full details and analysis of the package of measures will be in this week's edition of the Irish Farmers Journal.

Listen: gap between large and small food exporters in Brexit readiness
Bord Bia's Brexit Barometer shows that agri-food companies have made progress in planning for the UK's exit from the EU, but work remains to be done especially for smaller ones.

As the prospect of a hard Brexit grows, results from a survey of 117 agri-food exporting companies by Bord Bia show that 54% have made some progress and developed plans in the past year, while 20% describe themselves as having made more advanced progress and taken actions and 26% say they have made no progress.

While Bord Bia's chief executive Tara McCarthy told the Irish Farmers Journal it was "great to hear" that three quarters of companies had made at least some progress, the detail of risks addressed by exporters shows larger ones are more advanced.

"For smaller companies, this is a bigger challenge. Larger companies are probably more organised, those over the €100m mark. The smaller companies, specifically those under the €1m mark, don't actually have the resources in many instances to put these scenario plans in place," she said.

Listen to Tara McCarthy in our podcast below:

This was apparent in a replies to a number of survey questions on crucial business areas to be affected by Brexit. Asked whether they had modelled the cost of future customs requirements, 40% of companies with a turnover of €100m or more said yes, but this fell sharply to under 20% for those under €1m.

Some 85% of exporters have looked at expanding into new markets outside the UK.

"We're looking at a fairly positive story here," said McCarthy. But again, this applies to 100% of larger companies, with lower rates of market diversification among smaller ones.

McCarthy said it was reassuring to see more companies now addressing the financial aspects of Brexit, such as the need to increase cashflow availability to deal with export VAT when exporting to the UK after it leaves the EU. Exporters have also gotten better at raising Brexit issues in relations with their British customers.

However, "more needs to be done in the area of customs and tariffs, and the nitty gritty of supply chains," she said. In response, Bord Bia aims to boost its training offer on issues such as currency and supply chain management in the coming months.

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New ICOS president announced
Michael Spellman has been elected president of the Irish Co-operative Organisation Society (ICOS), following a meeting of the board today.

Spellman is currently chair of the ICOS National Marts Committee and is a former president of the European Association of Livestock Markets (EALM) and a former chair of Roscommon Leader Partnership. From Kilteevan, Co Roscommon, he is a board member of ICOS and of Roscommon Co-operative Livestock Mart.

'Vibrant agri-food sector'

The newly elected president said: “We have an extraordinarily vibrant agri-food sector and farmer-owned and controlled co-operatives play a huge role in underpinning, supporting and driving it."

"Notwithstanding the enormous potential which our industry has, and the ambition we have to grow our exports in line with Food Wise 2025, we face enormous challenges around CAP funding, volatility and compliance with our environmental commitments,” continued Spellman.

Spellman thanked the board for their confidence in him and for their support. He intends to work closely with the executive team and the expert committees, representing dairies, marts and all other co-ops and with ICOS members.

At the same meeting,James O'Donnell was elected vice president. James represents the National Co-operative Farm Relief Services and is a dairy farmer in Golden, Co Tipperary, supplying Dairygold Co-op.

ICOS represents over 130 co-operatives in Ireland, including the Irish dairy processing co-operatives and livestock marts. It's associated businesses have a combined turnover in the region of €14bn, with some 150,000 individual members, employing 12,000 people in Ireland, and a further 24,000 people overseas.

Spellman will take office immediately. He succeeds Martin Keane who was president of ICOS from 2014 until earlier this month when he stepped down following his appointment as chair of Glanbia Co-operative and Glanbia plc.

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