A lot has been written about eco-schemes and the central role they will play in the new CAP from 2023 on.

By now, most farmers are aware that they will be funded from the Pillar I pot, currently solely used for the Basic Payment Scheme. It has this in common with the current greening payment, but will have a very different impact. The new schemes will effectively be a form of redistribution of payments.

Let’s take an example (see table).

Joe, Paddy and Tom each have 40ha. Currently, Joe has 40 entitlements worth €500 each. Paddy also has 40 entitlements, worth €300 each, with Tom’s 40 entitlements worth €200 each.

When 30% of each entitlement is diverted to greening, Joe loses €150, Paddy loses €90, and Tom loses €60.

All three farmers satisfy the greening requirements and get full restoration of their own 30%.

Under the next CAP, the council of ministers wants 20% of the new eco-scheme to get 20% of the Pillar I pot, while the European Parliament wants 30% pledged. In either scenario, the money will go into a central pot.

Assuming the Parliament’s 30% is adopted, each farmer will see the same level of payment taken from their entitlements. The big difference is that this time, the money goes into a central pot. Assuming all three farmers enter the eco-scheme and comply with its requirements, they will receive similar payments on a per-hectare basis.

As all three farms are the same size, we see that Joe loses €2,800, over 10% of his current payment, Paddy loses €400, while Tom gains €800.

This is effectively a form of flattening, separate to and on top of any flattening of farmers’ remaining basic payment entitlements.

The question is, will this be taken into account when deciding how much flattening, or convergence, of payments should take place? That promises to be a vigorous debate.