CAP POLICY PAPER

JANUARY 2014

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

FIANNA FIL POLICY PAPER

www.annafail.ie
fwww.facebook.com/annafail t www.twitter.com/annafailparty

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 Fil Proposals

Harvest 2020:
Fianna Fil 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 Fil 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 Fil 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
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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 Fil 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.

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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.

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Fianna Fils 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 Fil 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 Coveneys 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

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Distribution of payment per hectare broken down by County

Payment less than 200 Munster Kerry Cork Clare Tipperary Limerick Waterford 3603 2690 2136 1141 1386 437 1955 2875 2126 1689 1520 543 1191 3477 1179 2023 1167 723 445 2063 377 1033 515 359 379 7,573 200300 300400 400500 over 500 Total

1721 12,826 199 988 468 326 6,017 6,874 5,056 2,388

________________________________________________________________________ Munster 11,393 10,708 9,760 4,792 4,081 40,734

Connacht Roscon Sligo Leitrim Mayo Galway 1763 1717 2004 5266 4273 2040 1367 963 3175 3401 1172 555 273 1910 2580 395 161 74 653 1004 247 84 36 273 535 5,617 3,884 3,350 11,277 11,793

________________________________________________________________________ Connacht 15,023 10,946 6,490 2,287 1,175 35,921

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Leinster Offaly Laois Kilkenny Wexford Carlow Wmeath Louth Dublin Wicklow Kildare Longford Meath Leinster 746 425 407 600 191 720 243 131 700 402 559 640 5,764 792 615 748 826 354 883 285 123 598 503 802 834 7,363 769 874 1152 1517 584 739 540 270 530 638 570 1181 9,364 366 508 603 719 293 334 226 56 210 272 261 545 4,393 325 489 506 505 207 231 189 43 124 205 143 510 2,998 2,911 3,416 4,167 1,629 2,907 1,483 623 2,162 2,020 2,337 3,710

3,477 30,361

Ulster Donegal Monaghan Cavan Ulster (part) 4,945 754 1387 7,086 1640 998 1454 4,092 810 1125 1129 3,064 335 593 467 1,395 284 481 280 8,014 3,951 4,717

1,045 16,682

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Farm Sizes in Ireland No. of farms of less than 32ha No. of farms of less than 50ha No. of farms over No. of farms of over Average Farm size 50ha 100ha 32ha 68,464 (55%) 95,628 (78%) 27,446 (22%) 5,406 (4%)

Farm size generally increases as the rate per hectare increases

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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

0 0-20 20-50

Payment/ha if based on Lu/h

100 76 67

50-100
100-150 150-200 200-264 264-300

98
153 214 277 318

300-400
400-500 500-600 600-700 700-800 800-900 900-1000 1000+
13

358
390 392 401 395 407 369 416

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 264/ha to 400/ha 400/ha to 500/ha 500/ha to 600/ha 600/ha to 700/ha 700/ha to 800/ha Over 800/ha Total 3,024 7474 3,109 1,324 601 260 285 16,077

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The single farm payment is to be broken into two schemes the Basic National Scheme and the Greening Payment
Fianna Fil 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 Fil 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 Ministers proposals for Pillar 1. Payments by 2019 and the Fianna Fil proposals are included at the end of this section

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

Fianna Fil 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 Fil 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 Fil 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 Ministers 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 Fil 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 Fil)

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 Ministers proposal Up to 150/ha 200/ ha 277/ha 359/ha 400/ha 450/ha 460/ha 470/ha 500/ha 600/ha 700/ha 800/ha 900/ha up 150/ha 204/ha 264/ha 328/ha 357/ha 391/ha 398/ha 405/ha 426/ha 496/ha 565/ha 634/ha 700/ha Fianna Fil Proposal 193/ha 233/ha 277/ha 334/ha 363/ha 398/ha 400/ha 400/ha 400/ha 400/ha 400/ha 400/ha 400/ha +/43 29 13 6 6 7 2 -5 -26 -96 -165 -234 -300

105,000 farmers are better off with the Fianna Fil 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 Coveneys 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 Fil 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 2007 2013 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 Fil proposes the introduction of a yellow card system for small infractions of the rules.

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Fianna Fil - Pillar 2 Proposals based on 50/50 funding

Measure RDP 2007-2013 2014-2020 Mins Proposal 2014-2020 FF Proposal IFA demands

Installation/Retire Farm Mod DAS

236m 155m 1,618m 290m 1,235m

60m 290 1,643m

60m 290m 1750m

Agri-Environ Leader Other Genomics Unallocated money Transfer to Pillar 1

2,453m 340m 23m

1,400m 153m 21m 364m 307m

1,400m 300m 23m 364m

1750m 217m 105m 468m

300m

Total

4,825m

3,770m

4380m

4621m

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

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