Fianna Fáil C.A.P Policy Paper

A NEW VISION FOR THE COMMON AGRICULTURE POLICY & FARMING IN IRELAND

FIANNA Fﾃ！L POLICY PAPER www.fiannafail.ie

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JANUARY 2014

CAP POLICY PAPER

“Our aim is to protect and develop the family farm structure of agriculture in Ireland and to give a fair return to all farmers irrespective of size or type of land farmed”

2 CAP POLICY PAPER - A NEW VISION FOR THE COMMON AGRICULTURE POLICY AND FARMING IN IRELAND

Executive summary of Fianna Fáil Proposals Harvest 2020: Fianna Fáil supports the full implementation of Food Harvest 2020 which they introduced when in government.

Market Actions: In the long term farmers must get a fair return for their efforts in the market place and strong policies are needed to ensure this.

Fianna Fáil will press that government 

Implement an aggressive policy to ensure a fair price to primary producers for their product.



Curb the overweening power of multiples and meat factories.



Insist on the immediate enactment and implementation of a statutory code of conduct for the Grocery trade.



Implement in full the recommendations of the report of the Oireachtas Joint Committee on the regulation of the grocery trade in Ireland.



Take action to ensure the open and proper operation of the free market in both the live and meat trade to ensure a proper competitive market exists for farmers products



In particular barriers to free trade for livestock particularly with our nearest neighbour Britain must be overcome.

3 CAP POLICY PAPER - A NEW VISION FOR THE COMMON AGRICULTURE POLICY AND FARMING IN IRELAND



Support the growth and value of food and beverage exports and examine where import substitution is possible particularly by the production of quality products with a special emphasis on the development of horticulture and fruit production.

Common Agricultural Policy (CAP) 

For the first time ever the funding for the CAP has been reduced with a 3% funding cut in Pillar 1 and a 14% in EU funding for Pillar 2.



Government co-funding for Pillar 2 is at 42% (not 46% as stated) not the 50%/50% cofunding promised.



Fianna Fáil proposes 50/50 co-funding by Government and the transfer of €300m of Pillar 2 funding to Pillar1.

Pillar 1. Direct Payments BNS (Basic National Scheme): 

Distribute €300m of funds transferred from Pillar 2 to Pillar 1 5% to all farmers from 2015 on. This will mean that there will be no reduction in payment because of reduced Pillar 1 funding and allocation for young farmers, national reserve and crisis fund



Implement EU agreement in relation to farmers with less than average payment. This will increase the payments of all farmers with less than the average payment at present with the minimum Basic National Scheme being 60% of the average payment by 2019



To fund this (€70m) reduce all payments from the top down rather than as proposed by taking a percentage off all farmers with over average payments and impose in 2015 a ceiling of €150,000 on all Pillar 1. Payments payable to one farm enterprise 4 CAP POLICY PAPER - A NEW VISION FOR THE COMMON AGRICULTURE POLICY AND FARMING IN IRELAND



This will protect farmers with between the average payment and over €400/ha from any cutback in BNS and mean that many farmers with higher payments than that will only face cuts in their BNS in later years of this CAP (see details in document)



Between BNS and Greening the Minister has proposed a maximum payment of €700ha.

Fianna Fáil policy is to impose a ceiling by 2019 that will ensure that no farmer with between the average payment €264/ha and €400/ha will have a cut in their BNS and to raise the funding for farmers with below average payments per ha. this way. This would protect 86% of farmers from cuts to their BNS payment

Greening: 

Implement flat greening from 2015 rather than as the Minister proposes variable greening. Adhere to the principle of equal payment for equal work.

Pillar 2 Rural Development Programme 

50/50 funding as opposed to the 42% proposed by the Minister.



This will facilitate the transfer of €300m to Pillar 1 from 2015



ANC (DAS) funding of €234m per annum as opposed to the €195 proposed. Will facilitate a 20% increase in ANC (DAS) payments



Rate of payment under this scheme should relate to the level of constraint in each area.



Maximum payment under Glas Scheme (Agri-environmental) should be €10,000 not €5,000.

5 CAP POLICY PAPER - A NEW VISION FOR THE COMMON AGRICULTURE POLICY AND FARMING IN IRELAND



No farmer in receipt of direct payments over €50,000 should be eligible for ANC payments or Glas payments.



Young farmers should be assisted through the introduction of an installation aid scheme.

This is necessary to achieve the aims of Harvest 2020.



Farm modernisation funding should be increased from €155m to €290m with grant aid levels at higher levels than proposed in order to attract investment.



Leader: Funding for projects should be maintained at present levels and not cut by over 50% from €340m to €153m.



Red tape and compliance costs should be minimised not made worse as proposed.



A suitable range of extra measure should be put in place to encourage organic farming.

6 CAP POLICY PAPER - A NEW VISION FOR THE COMMON AGRICULTURE POLICY AND FARMING IN IRELAND

Fianna Fáil’s Vision for a New CAP Key Points • Minister Coveney has failed to produce a fully funded and fair CAP reform. He has protected powerful vested interests and has attacked the most vulnerable sectors of

Irish agriculture. His policies are based on historic grant payments rather than objective criteria protecting the top 15% of recipients at the expense of the majority.

• His failure to fully co-fund Pillar 2 is a testament to his lack of commitment to farmers in disadvantaged areas and to environmental schemes.

• Fianna Fáil is committed to a fair CAP based on objective criteria and where the BNS roughly relates to number of LU/ha rather than grants paid over 10 years ago. A new CAP should reflect current realities and not the situation 13 years ago.

• The principle of equal reward for equal work should apply to the Greening payment.

• Pillar 2 should be funded 50/50 and we are fully opposed to the swinging cuts as proposed by the Minister.

• Agri-environmental schemes must give a realistic return to farmers in financial reward.

No penalties should apply for non-compliance with scheme conditions due to the weather. Red tape must be reduced rather than as proposed increased.

• Penalties should be reviewed to be proportionate to the non-compliance this is not the case at present. A new Yellow card system should be introduced. Unless intentional deception is found no retrospective deductions or penalties should apply to map errors.

• ANC/DAS payments rates should be proportionate to the level of constraint in an area.

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Overall Financing

Multi Annual Financial Framework 

The Multi-Annual Financial Framework set out the EU Budget for 2014-2020 including CAP. The CAP budget was pushed down to €373 billion for 2014-2020, compared to €421 billion over the previous MFF, indicating an 11% decrease.



This is the first time ever there was a reduction in CAP funding.

CAP Funding in Ireland 

Pillar 1 – The Single Farm Payment to Ireland has been reduced by €42m per annum from €1.255 bn to €1.213 bn, a 3.3% cut.



With inflation at 7% this in fact is a 10% cut in real terms over the seven period.



Pillar 2 – €2.2bn in EU funding for Ireland €313m/year. This is a 14% decrease in EU funding.



With inflation at 7% this is a 21% cut in EU funding over the seven year period



Overall Ireland will see a real reduction in EU funding of 10% Pillar 1 and 21% in Pillar 2.



What is at stake now is the distribution of this money within the framework of the CAP agreement brokered by Minister Coveney in June 2013 under the Irish Presidency.

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CAP POLICY PAPER - A NEW VISION FOR THE COMMON AGRICULTURE POLICY AND FARMING IN IRELAND

Current Spending 

These figures outline the current CAP system in Ireland. They clearly indicate that Minister Coveney’s proposals protect a minority of farmers without any basis on objective criteria.

Current Pillar One- Single Farm Payment Distribution •

70% of farmers get less than €10,000 single payment

•

80% of farmers get less than €15,000 single payment

•

90% of farmers get less than €25,000 single payment

•

98% of farmers get less than €50,000 single payment

•

The top 2% of farmers get 12% of the fund

Distribution of payments per HA. The vast majority of farmers nationally get less than €500/ha single farm payment • 40% get less than €200/ha • 66% get less than €300/ha • 86% get less than €400/ha • 94% get less than €500/ha • 6% get more than €500/ha

9 CAP POLICY PAPER - A NEW VISION FOR THE COMMON AGRICULTURE POLICY AND FARMING IN IRELAND

Distribution of payment per hectare broken down by County Payment

less than

€200-

€300-

€400-

over

Total

€200

€300

€400

€500

500

Kerry

3603

1955

1191

445

379

Cork

2690

2875

3477

2063

1721 12,826

Clare

2136

2126

1179

377

199

6,017

Tipperary

1141

1689

2023

1033

988

6,874

Limerick

1386

1520

1167

515

468

5,056

Waterford

437

543

723

359

326

2,388

Munster 7,573

________________________________________________________________________ Munster

11,393

10,708

9,760

4,792

4,081 40,734

Rosco’n

1763

2040

1172

395

247

5,617

Sligo

1717

1367

555

161

84

3,884

Leitrim

2004

963

273

74

36

3,350

Mayo

5266

3175

1910

653

273

11,277

Galway

4273

3401

2580

1004

535

11,793

Connacht

________________________________________________________________________ Connacht

15,023

10,946

6,490

2,287

1,175 35,921

10 CAP POLICY PAPER - A NEW VISION FOR THE COMMON AGRICULTURE POLICY AND FARMING IN IRELAND

Leinster Offaly

746

792

769

366

325

2,998

Laois

425

615

874

508

489

2,911

Kilkenny

407

748

1152

603

506

3,416

Wexford

600

826

1517

719

505

4,167

Carlow

191

354

584

293

207

1,629

W’meath

720

883

739

334

231

2,907

Louth

243

285

540

226

189

1,483

Dublin

131

123

270

56

43

623

Wicklow

700

598

530

210

124

2,162

Kildare

402

503

638

272

205

2,020

Longford

559

802

570

261

143

2,337

Meath

640

834

1181

545

510

3,710

Leinster

5,764

7,363

9,364

4,393

3,477 30,361

Donegal

4,945

1640

810

335

284

8,014

Monaghan

754

998

1125

593

481

3,951

Cavan

1387

1454

1129

467

280

4,717

Ulster (part)

7,086

4,092

3,064

1,395

1,045 16,682

Ulster

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Farm Sizes in Ireland • No. of farms of less than 32ha

68,464 (55%)

• No. of farms of less than 50ha

95,628 (78%)

• No. of farms over

50ha

27,446 (22%)

• No. of farms of over

100ha

5,406 (4%)

• Average Farm size

32ha

• Farm size generally increases as the rate per hectare increases

12 CAP POLICY PAPER - A NEW VISION FOR THE COMMON AGRICULTURE POLICY AND FARMING IN IRELAND

Historic Payments versus Current Productivity Payments 

These statistics show there is no basis for payment levels above €400 based on the objective criteria of Livestock units per/hectare as a measure of productivity. Current payments are based on the livestock grants paid in the years 2000, 2001 and 2002, the values of entitlements purchased and stacking.

Payment /ha 2007-2013 based on historic grants

Payment/ha if based on Lu/h

€0

€100

€0-20

€76

€20-50

€67

€50-100

€98

€100-150

€153

€150-200

€214

€200-264

€277

€264-300

€318

€300-400

€358

€400-500

€390

€500-600

€392

€600-700

€401

€700-800

€395

€800-900

€407

€900-1000

€369

1000+

13

€416

CAP POLICY PAPER - A NEW VISION FOR THE COMMON AGRICULTURE POLICY AND FARMING IN IRELAND

Arable Farmers – Distribution of Single payment Less than €264/ha

3,024

€264/ha to €400/ha

7474

€400/ha to €500/ha

3,109

€500/ha to €600/ha

1,324

€600/ha to €700/ha

601

€700/ha to €800/ha

260

Over 800/ha

285

Total

16,077

14 CAP POLICY PAPER - A NEW VISION FOR THE COMMON AGRICULTURE POLICY AND FARMING IN IRELAND

The single farm payment is to be broken into two schemes the Basic National Scheme and the Greening Payment Fianna Fáil proposes that 50/50 funding of Pillar 2 would take place and that €300m of Pillar 2 funds would be transferred to Pillar 1 from 2015 to maintain general farm incomes. This equates to an extra 5% Pillar 1 funding This would largely offset the cuts in funding in Pillar 1 post 2013 and the provision of funding for the National Reserve, Young Farmers and the Crisis Fund

Basic National Scheme 

€70m has to be transferred to farmers with below average payments (€264 per Ha) under the CAP agreement. The minimum payment by 2019 must be 60% of the average payment at a minimum



The Minister is proposing to take that €70m from all farmers with above average payments. However this does not take into account objective criteria or productivity.



To progressively fund this change between 2015 and 2019 Fianna Fáil propose the immediate introduction of a ceiling on payments to any one farm enterprise of €150,000 and the exclusion of corporates such as Airport Companies and other non-core farming commercial enterprises from entitlement to the scheme and the gradual reduction over the next six years of the maximum amount per hectare payable



This will protect farmers with between the average payment and over €400/ha from any cutback in BNS and mean that many farmers with higher payments than that will only face cuts in their BNS in the latter years of this CAP

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

A table showing the comparison between the Minister’s proposals for Pillar 1. Payments by 2019 and the Fianna Fáil proposals are included at the end of this section



Fianna Fáil also propose measures to protect farmers with high payments/ha on relatively small hectares that would be at least as advantageous as the Minister’s proposal.



Fianna Fáil will therefore under the Basic National Scheme totally protect all farmers with less than €400/ha from any cut whatsoever



This proposal adheres much more closely with objective criteria and productivity enabling Irish agriculture to meet Food Harvest 2020 objectives.

Greening 

Greening will now constitute 30% of the Single Farm Payment. The Minister wants to link this 30% to the payment levels received in the original de-coupling stage of 2001. In other words the Minister is basing his policy for this new scheme on an event that took place 13 years ago.



Fianna Fáil believes that the greening payment should reflect the fact that the burden of meeting greening criteria is equal for all farmers (with the exception of cereal farmers).



Fianna Fáil therefore believes that the greening payment should be a flat payment to all farmers to reflect the equal work done to fulfil the criteria and not as the Minister proposes a payment linked to grant payments 13 years ago.

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Sheep Grassland Scheme •

The Minister’s proposal will have to be modified to ensure that farmers with low payments/ha who are under the minimum payment of €150 (€193) get the benefit of it being included in the single payment

Ceilings 

Fianna Fáil believes the maximum payment of €150,000 should immediately come into force. (The Minister should have negotiated an optional cap of €50,00 as proposed by Fianna Fáil)



By 2019 a maximum Direct Payment (BNS and Greening) of approximately €400 per ha would be in place (as opposed to the €700 proposed by the Minister) in order to fund the mandatory increase in lower payments

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Payments in 2019 compared to existing paymentsMinisters Proposal versus Fianna Fail proposal.

Combination of BNS and Greening payment Existing Payment Minister’s proposal

Fianna Fáil Proposal

+/-

Up to €150/ha

€150/ha

€193/ha

€43

€200/ ha

€204/ha

€233/ha

€29

€277/ha

€264/ha

€277/ha

€13

€359/ha

€328/ha

€334/ha

€6

€400/ha

€357/ha

€363/ha

€6

€450/ha

€391/ha

€398/ha

€7

€460/ha

€398/ha

€400/ha

€2

€470/ha

€405/ha

€400/ha

-€5

€500/ha

€426/ha

€400/ha

-€26

€600/ha

€496/ha

€400/ha

-€96

€700/ha

€565/ha

€400/ha

-€165

€800/ha

€634/ha

€400/ha

-€234

€900/ha up

€700/ha

€400/ha

-€300

105,000 farmers are better off with the Fianna Fáil proposal and 16,000 farmers are better off with the Ministers proposal. This is more than 85%

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Pillar 2 Rural Development Programme Minister Coveney’s Proposals 

Allocation is a decrease of 30% on the 2007-2013 allocation when inflation is taken into account



The Minister has failed to honour the commitment of the Taoiseach to 50/50 funding



Actual co-funding if 42% not 46% as claimed by Minister as he double counted €170m of payments for the 20070-2013 CAP that will be paid out this year and next.



Promise to farmers in disadvantaged areas in relation to Pillar 2 have been reneged upon



The proposed Glas scheme (Agri-environmental Scheme) will be very unattractive to many farmers because of the proposed red tape and conditions of the scheme. An example of this is the fact that 80% of the farmers in commonage will have to participate together for any farmer in that commonage to take part in the scheme.



The maximum funding per farmer for Glas is less than half that for REPs 4.



The DAS allocation is cut by 24% compared to the 2007-2013 actual spend.



Leader funding is cut by 55%.



While worthwhile in itself it could result in over €100m of money provided for environmental purposes and income support for farmers on poorer land being spent on professional fees for this scheme as the rate of charge for each test is €30.

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Fianna Fáil proposals 

50/50 funding should be provided as promised by the Taoiseach.



This would give and extra €610m over 7 years or €87m per annum.



Areas of Natural Constraint:

-

The allocation for the Disadvantaged Area Scheme (DAS) now known as Areas of Natural Constraint (ANC) should be increased from €1,235m or €195m per annum to €234m per annum. This would bring it in line with the expenditure under the 20072013 scheme. This would on average increase ANC (DAS) payments by 20%.

-

The rate of payment under the ANC under this scheme should relate to the natural constraint in each area.



Agri-environmental Scheme:

-

The prosed terms of the Glas and Glas* schemes should be reviewed to make them more accessible to the vast majority of farmers and to make them attractive to farmers involved in high nature farming and farming in high value ecological areas.



The maximum payment under this scheme should be increased to €10,000.

Young Farmers: Installation Aid and National Reserve

-

A provision of €60m or nearly €9m per annum is proposed for An Installation Scheme for young farmers. This is a major omission in the Ministers proposal as Installation Aid is important to provide working capital to young farmers.

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-

All young farmers irrespective of how long they are farming should get preferential access to entitlements from the National Reserve



Leader:

-

The funding for Leader should be increased to €300m compared to the €155m allocated. The benefit of this investment to the rural economy in job creation and services is vital at this time and a 55% cut a proposed will have devastating effect.



General:

-

All schemes must be reviewed to ensure a minimum of red-tape and a minimum amount of compliance and planning cost so as to ensure the farmer gets the maximum return form the Rural Development Programme

-

All penalties must be reviewed to ensure they are proportionate and Fianna Fáil proposes the introduction of a yellow card system for small infractions of the rules.

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Fianna Fáil - Pillar 2 Proposals based on 50/50 funding Measure

RDP 2007-2013

2014-2020

2014-2020

IFA

Min’s Proposal

FF Proposal

demands

€60m

€60m

Installation/Retire

€236m

Farm Mod

€155m

€290m

€290

€290m

DAS

€1,618m

€1,235m

€1,643m

€1750m

Agri-Environ

€2,453m

€1,400m

€1,400m

€1750m

Leader

€340m

€153m

€300m

€217m

Other

€23m

€21m

€23m

€105m

Genomics

€364m

€364m

€468m

Unallocated money

€307m

Transfer to Pillar 1

Total



€300m

€4,825m

€3,770m

€4380m

€4621m

The Fianna Fáil proposal recognises the sharp cuts Pillar Two has suffered under the MFF and fully commits to 50/50 co-financing.

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23 CAP POLICY PAPER - A NEW VISION FOR THE COMMON AGRICULTURE POLICY AND FARMING IN IRELAND