That was quite the week.
The national strategy for the next CAP landed on Friday 30 July, with the modelling of scenarios for various farmers following on Friday 6 August.
And that’s on top of last Tuesday’s release of Food Vision 2030.
It’s like the Olympics for policy nerds.
It’s also like the Olympics in that this is the one few weeks every few years where everybody engages with the normally niche.
Just as we become experts on synchronised swimming, the pommel horse, and the modern pentathalon for a fortnight, farmers will be talking CRISS, BISS, convergence and capping, having quickly turned the page or moved the radio dial.
Next Tuesday 10 August, the Department of Agriculture will host the first of three town hall meetings where CAP reform and these concepts will be discussed.
With the figures now on the table, farmers will be briefed, get the chance to pose questions and have them answered in public. Wouldn’t that be fair?
One thing we can expect on Tuesday is a succession of farmers speaking of fairness and unfairness.
Farmers with low payments will say how it’s unfair that two farmers can be on the same acreage but have widely divergent payments based on past performance.
Indeed, the Department’s modelling, released on Friday, shows two case studies for 40ha where current payment levels are very different.
The two 40ha farmers had entitlements worth €160/ha (the minimum) and €473/ha (well above average, but short of the current maximum of €600/ha). Their current respective payments are €6,400 and €18,920. Both these farmers are working 100 acres, but one receives three times as much as the other.
We all know the arguments, that the first farmer probably has invested more in his farm, and probably is working longer hours and is probably more dependent on farming for his livelihood.
And that may all be true, but it’s still hard to justify that disparity in the cold light of day.
Payments flatter than we might have thought
MEP Luke Ming Flanagan is one of those who has cited the statistic that the top 20% get 80% of the money.
If they did, it would be another example of the 80:20 rule that often appears in economics, a disparity some economists regard as inevitable and recurring under any free-market system.
However, Friday’s CAP modelling document revealed Ireland actually bucks the 80:20 rule by some way.
In fact, we rank fifth best in terms of the balance of distribution of payments. The EU average is indeed that 80% of direct payments go to the top 20%.
In Ireland 54%, slightly over half, of payments go to that top 20% of recipients. Both in Ireland and across the EU, there is a close correlation between the percentage of land owned by the top 20% and the percentage of direct payments received.
In Ireland, it’s 49% of the land and 54% of the payments.
The EU average is 81% of the land and 80% of payments.
In Slovenia, 94% of both land and payments reside in the top 20%.
It is interesting that there is such a close correlation between land ownership and proportion of direct payments recieved.
It suggests that we have less distance to travel than might at first appear in order to create per hectare flat payments by farm size.
CRISS will flatten your payment
Of course, payment per hectare is only one metric for assessing the fairness of the CAP.
Smaller farmers in general receive less money, that is an observable fact. Area-based payments guarantee that.
This is why front-loading, CRISS, is part of the CAP package. It will serve to cut the gap between large and small farmers
However, as the Department’s own modelling shows, CRISS alone also cuts the gap between people with the same hectarage but currently with different entitlment values.
CRISS is a flattening mechanism just as much as convergence is. This is because it takes 10% of every farmer’s payment, thus taking more from high entitlement holders, irrespective of their size.
It then pays out on a flat-rate basis on the first 10ha, 20ha, or 30ha, depending on the option the Government chooses.
So what happens the two farms we mentioned earlier where CRISS is introduced at 10%? We are also in this scenario imposing eco schemes at 25%, as will happen, and paying them out at a flat rate of 64/ha, which almost certainly won’t happen, but is the Department’s current assumption for modelling purposes.
The high entitlement holder will see his payment drop from €18,920 to €14,520. The minimum value entitlement hlder will see their payment increase from €6,400 to €8,560.
The gap will shrink from €12,520 to €5,960.
And that’s just from CRISS and eco schemes. We haven’t begun to consider the impact of convergence, which must happen at a minimum of 85%, and could go to a maximum of 100%, fully flat payments.
None of this is a complete shock. Back on the June bank holiday weekend, I did a few back of the hand calculations in this column that came to the same conclusion.
That said, farmers are really only fully grasping the scale of changes in payment rates, and how they will perosnally be affected. Expect fireworks.
Selective capping for cows
I fully expect the issue of capping of suckler cow numbers to be a flashpoint in the town hall meetings.
Many drystock farmers are already aggrieved that they will be hit hardest by CAP convergence measures.
It is an undeniable fact that drystock farmers are more dependent on direct payments for their income than other sectors, and payment cuts are income cuts.
Thus, a coupled scheme is welcome. But the string attached, that cow numbers cannot increase, is a bugbear.
We all know we’re in a climate crisis. We all know that farming is going to be asked to dig deep to play its part in minimising the extent of global warming. It’s in our own long-term interests to do so.
Maybe long-term is no longer the correct term. The climate is changing fast in many parts of the world, but we seem OK, you might say.
The biggest but issue right now is if the Gulf Stream weakens. Ireland could have winters like Canada, and summers like the Faroe Islands. The worst of both worlds, particularly for farming. And there are clear warning signs.
I don’t apologise for mentioning these issues on an almost weekly basis. It is now as central to farm policy as sheep, milk or grain prices.
So we can understand why a scheme for the suckler sector might contain a commitment to keep cow numbers static.
But what suckler farmers will want to know is why the dairy cow next door is not subject to similar curtailments. Methane is methane, after all.
Of course, the simple answer, one the minister might not want to say out loud, is that there is no parallel scheme with no parallel cap attached for dairy cows because dairy farmers don’t need or even want a coupled scheme.
Dairy farmers just want to be allowed milk as many cows as they can cope with. And for the moment they are being allowed do just that, despite gentle warnings that the national herd, suckler and dairy cow combined, has a ceiling.
Is any of this fair? That, dear reader, probably depends on whether you are a dairy farmer, a suckler farmer, or a senior Department of Agriculture official preparing for three highly significant public engagements.