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EU agriculture policy reform:Implications for Irish agriculture
Mairead McGuinness MEPClonmel,
Co. Tipperary.
March 8, 2012
Content of presentation
• EU Budget 2014-2020
• Proposal for reform of Direct Payments
• Rural Development
• Market Measures
• Key areas of concern for Ireland
• Process/timing
Budget
•Multiannual Financial Framework (MFF)
•Difficult negotiations
•Agriculture budget set at 2013 levels-proposal
•Economic crisis backdrop
•Agriculture 40% EU Budget, 0.5% EU GDP
Budget 2
• Ireland: €1.8 billion from CAP budget
• Direct Payments: €1.3 billion
• Rural Development: €350 million
Budget 3
• Additional funding for agriculture under research and innovation budget, food safety, food for deprived persons
• European Globalisation Adjustment Fund
• Crisis reserve in agriculture sector
Redistribution of Direct Payments
• Fairness between Member States
• Closing the gap: Commission proposal to bring Member States below 90% of the EU average payment one third of the way to 90%
• By reducing funds to Member States above 100% of EU average
Redistribution of DP - Closing one third of the gap between current level and 90% of EU
average by 2020
0
100
200
300
400
500
600
700
800
EUR/ha
DP new distribution (EUR/ha)** DP status-quo (EUR/ha)*EU-27 average (EUR/ha) 90% of EU-27 average (EUR/ha)
Source: European Commission
Redistribution within Member States
• Move to flat rate payment/ha by 2019
• Member States at different starting points
• 8 Member States with historic based payments
• Convergence
812 383 783 1401
2961
6568
14965
28504
15641 15253
13928
11924
9590
3874
0
5000
10000
15000
20000
25000
30000
from€20 <€50
from€50 <€100
from€100 <€150
from€150 <€200
from€200 <€250
from€250 <€300
from€300 <€400
from€400 <€500
from€500 <€600
from€600 <€700
from€700 <€800
from€800 <€900
from€900 <€1,000
€ 1,000+
Distribution of SFP payment per hectare in IrelandNumber of Farmers
Source: Department of Agriculture
Per Hectare Payment
COUNTY FARMERS AMOUNT PAID AVERAGE PAYMENT PER COUNTY
CARLOW 1,622 €25,107,834.28 €15,479.55
CAVAN 4,722 €35,907,064.33 €7,604.21
CLARE 6,015 €48,399,815.92 €8,046.52
CORK 12,725 €169,099,714.81 €13,288.78
DONEGAL 7,894 €48,357,574.53 €6,125.86
DUBLIN 618 €9,198,332.84 €14,884.04
GALWAY 11,771 €80,254,970.11 €6,818.02
KERRY 7,565 €59,156,334.39 €7,819.74
KILDARE 1,998 €31,968,253.40 €16,000.12
KILKENNY 3,409 €56,161,311.13 €16,474.42
LAOIS 2,891 €41,178,085.34 €14,243.54
LEITRIM 3,333 €17,564,384.92 €5,269.84
LIMERICK 5,077 €52,831,303.84 €10,406.00
LONGFORD 2,338 €20,075,675.78 €8,586.69
LOUTH 1,477 €20,115,667.82 €13,619.27
MAYO 11,224 €60,331,376.10 €5,375.21
MEATH 3,672 €56,488,776.17 €15,383.65
MONAGHAN 3,920 €31,081,026.47 €7,928.83
OFFALY 2,990 €36,928,270.87 €12,350.59
ROSCOMMON 5,605 €40,918,155.00 €7,300.30
SLIGO 3,887 €23,056,679.91 €5,931.74
TIPPERARY 6,815 €101,716,195.67 €14,925.34
WATERFORD 2,380 €39,443,004.31 €16,572.69
WESTMEATH 2,907 €34,187,326.09 €11,760.35
WEXFORD 3,974 €61,908,491.77 €15,578.38
WICKLOW 2,037 €28,088,781.40 €13,789.29
TOTAL 122,866 €1,229,524,407.20 €10,007.035
DIRECT PAYMENTS BY COUNTY 2011
Direct Payments post-2013
• Current entitlements abolished December 2013
• New entitlements established in 2014 based on hectares farmed in 2014 - linked to 2011 application
• Value established by complex formula
New entitlements
• National envelope- Greening 30%- Young farmers 2%- Recoupling 5%- Areas of natural constraints 5% - National reserve 3%- Small farmer scheme- Basic payment
Convergence
• Flat-rate payment per hectare by 2019
• Greening payment
• Further 40% flattening
• Massive redistribution between farmers
• Impact on production
Greening of CAP• 30% of budget
• 3 greening criteria:- Crop diversification – 3 crops, min. 5%,
max. 70%- Maintenance of permanent grassland - Ecological focus areas = 7% eligible area
i.e. field margins, hedges, trees, fallow land, buffer strips, landscape features
• Extra bureaucracy
Active Farmer Definition
• Defined at EU level: Court of Auditors
• Does not apply where Direct Payments are less than €5,000
• No payment where: • Direct Payment makes up 5% of total
receipts in most recent fiscal year• Do not carry out minimum activity
Capping of Direct Payments
• Maximum Single Farm Payment - €300,000
• Amounts reduced as follows:– 20 % between €150,000 and up to €200,000– 40 % between €200,000 and up to €250,000– 70 % between €250,000 and up to €300,000– 100 % for amounts in excess of €300,000– salaries paid are subtracted when establishing
the threshold payment
• Excludes greening payment
Rural Development
• Six EU-wide priorities:– knowledge transfer and innovation– enhancing competitiveness– food chain organisation and risk
management – focus on ecosystems– resource efficiency and climate friendly
agriculture– promoting social inclusion and economic
development in rural areas
Rural Development projects
• European Innovation Partnership (EIP)
• Farm Advisory Services
• Young farmers: – Start-up grants– Training and advisory services
• Business start-up for small farmers
• Risk management: animal disease mutual fund, weather and crop insurance.
Funding• Co-financing:
– Training & advisory services– 50% in regions for most payments (85% - outermost
regions)
• Higher co-financing rate - up to 80% for: – Training, advisory services, knowledge transfer and
information actions– Start-up for young farmer and producer groups– LEADER
• Up to 100% co-financing for innovative actions - financed with funds from capping in Pillar I
• Minimum of 5% to be spent on LEADER
• Minimum of 25% for climate change mitigation and adaption and land management measures
Market Measures• Measures as a safety net
• New safeguard clause for all sectors - enables Commission to take emergency measures
• Crisis reserve fund (existing outside the CAP)
• Sugar regime expires September 2015
• Milk quota abolition
• Recognition of Producer Organisations and inter-branch organisations extended to all sectors
Irish position
• Maintain share of CAP Budget
• Timeframe for convergence
• Flexibility
• Greening
• Active farmers
• Market measures
Approximation
• Based on Commission approach to redistribution between Member States
• Irish model: maximum gain of 25%, maximum loss of 15%
– highest gains for those on lowest payments
– highest losses for those on highest payments
Negotiating Process• Co-decision
• Timeframe – Council and Parliament digesting proposals
• Response by summer
• Agriculture Committee of EP vote on position in autumn
• Negotiations with Council early 2013 – Irish Presidency
“Long term prospects for agriculture will not improve if farmers cannot reverse the steadily decreasing trend in their share of the value added generated by the food supply chain. Indeed, the share of agriculture in the food supply chain has decreased from 29% in 2000 to 24% in 2005, while over the same period the share of the food industry, wholesale and the distribution sector have all increased”
Source: European Commission Communication on the CAP
Thank You.