The Common Agricultural Policy (CAP) is the EU’s first common policy and has been in place since 1962.

It has been frequently modified as it quickly achieved its objective of securing food supply for EU citizens and the version that has been in place since 2014 is currently being revised.

This is likely to be completed before the end of this year but changes won’t take effect until at least 2022 or maybe even 2023, depending on what is agreed in the final transition regulation.

No change before 2022

While farmers won’t see any change in their CAP payments this year or next year, there will be very significant changes when the new CAP comes into effect.

The Basic Payment Scheme (BPS) payment will be removed and replaced with a Basic Income Support for Sustainability (BISS).

Greening, which makes up one-third of BPS payments, will not be included in BISS and will become part of cross-compliance requirements. In other words, farmers will have to achieve the greening requirements just to be eligible to receive a reduced BISS payment though they will have the opportunity to secure the remainder by applying to undertake eco schemes.

Focus on environment

The EU has indicated that it expects 40% of future CAP payments will be for environmental and sustainability measures on farm. These are elaborated on in the Farm to Fork strategy published last May. This is how agriculture is intended to contribute to the Green Deal in which the EU has set the target of becoming carbon-neutral by 2050.

The strategy is generally hostile towards ruminant livestock because of their contribution to emissions and it has a target of having 25% of EU agricultural production organic by the end of this decade. CAP payments will be the core funding for delivery of this strategy.

We can expect a huge incentive for organic farming and anything that reduces emissions will be funded

Within this framework, national governments are invited to submit plans for delivery of the CAP in their country for approval by the EU. This will give the Irish Government considerable flexibility but it will be difficult to achieve farmer consensus on a delivery model. We can expect a huge incentive for organic farming and anything that reduces emissions will be funded, with reduction of livestock numbers the simplest way to deliver a reduction.

The bottom line is that the next CAP will mean farmers will have to do much more to get the same amount of money, but it will be at least 2022 before it comes into effect.