Farmers are finding it hard to make sense of the current CAP proposals.

The sheer complexity of the reform, with instruments old and new like BISS, CRISS, eco-schemes and convergence makes it difficult to grasp where payments are going.

So we are taking a deep dive into the case of a typical suckler farmer.

The farmer

Paddy Murphy is a suckler farmer. When we meet him in 2002, he is calving 50 cows and raising all the cattle.

He is claiming nine- and 22-month premium, each worth €150 on all the male cattle.

Paddy is an efficient farmer, operating at a high stocking rate, carrying all his herd on 52ha

To ensure he gets the extensification payment at the high level (€82) on the male cattle he is selling the heifers, bar the replacements, as forward stores. He is also receiving the slaughter premium on all the bullocks and his cull cows.

Paddy is an efficient farmer, operating at a high stocking rate, carrying all his herd on 52ha (almost 130ac).

Decoupling

Following the Fischler reforms, Paddy gets high entitlements, worth €558/ha. His total Single Farm Payment in the first year of the scheme, 2005, was €29,018.

Little changed over the next decade, although there were some incremental cuts. These meant that by the time the Ciolos reforms were being finalised in 2014, his entitlement had receded to €544/ha, and his total payment was €28,320.

The Ciolos reforms brought substantial cuts. His payment dropped by almost €3,000 in 2015, mostly due to convergence.

By 2019, this payment had dropped to €20,977, including greening, which he qualified for each year. This means his original payment had been cut by over 25% in a 14-year spell. He is getting a quarter less in direct support payments in 2019 than he was receiving in 2002.

Further convergence will erode his payment to €16,402 by 2026

As Paddy surveys the future of his direct payment, he will first see that his entitlements have this year been cut yet again, due to the slight pruning of the budget. He has lost another €463 from his basic payment.

But that is a minor irritant compared to the impact of the current CAP post-2020 reforms. Paddy’s payment in 2023 will be made up of three elements. In 2023, his payment falls to €17,248. Further convergence will erode his payment to €16,402 by 2026.

Paddy has lost 44% of his payment since 2000. We know direct payments form 90% of a suckler farmer’s income, so this is an effective near-halving of his income when living costs have risen by about 50%.

Other parts of the payment jigsaw

BGDP and BEEP have been introduced as coupled support schemes.

Paddy is getting €4,150 this year from BGDP.

He also joined BEEP last year, and is getting a further €4,100 from it. But this money is not directly comparable to the previous coupled payment schemes in terms of its impact on farmer income, as a significant amount of this money must be spent in complying with the terms of the scheme.

GLAS

Paddy was pulling around €10,000 from REPS 2 when we first met him. He currently gets half that sum from GLAS.

The new Pillar II environmental scheme, currently being piloted, may fill some of that gap.

We will post Paddy’s full payment story in detail online this weekend. We will also model the parallel journey of a similar farmer through the 20-year journey, with one substantial difference. Instead of keeping the calves and fattening them, the second farmer, Johnny O’Leary, sold his stock as yearlings, claiming none of the premia. As a result, his payments have been very different, and the impact of the current reforms will be very different.