While some farmers will benefit from convergence and see their entitlements increase in value, many farmers are set to take a big hit on their entitlement value.
As part of the Pillar I interventions in the CAP reform, it is proposed that the value of payment entitlements will continue to be subject to convergence with the aim of reaching a minimum of 85% of the average by 2026.
In 2019, the average entitlement value in Ireland was approximately €184 and any farmer with an entitlement value above this suffered a reduction in their payments.
In line with the current proposed convergence, a new average payment entitlement value of €165 is envisaged by 2026 – a drop in the national average entitlement value of €19 on 2019 levels.
Essentially, what this means is the goalposts have now moved. So, a farmer who had in 2019 accepted the fact they would be moving towards that €184 national average figure, is now set to be heading for €165 by 2026 under the continued convergence.
On a more positive note for low-value entitlement holders (who are not young farmers) , the minimum payment entitlement value will reach almost €145 by 2026 under this scheme.
Young farmers who are applying for entitlements from the National Reserve on eligible land for which they held no entitlements and/or are seeking a top-up to the value of existing entitlements held by them, where those entitlements are below the national average, will now see their payments allocated at a lower level than was the case in 2019.
This will impact young farmers applying for entitlements on ‘naked ground’ or farming land with entitlement values lower than the envisaged national average.
While this may not suit some young farmers, there are a suite of measures available in Pillar II for young farmers which may be more beneficial to them and the Complimentary Income Support for Young Farmers (CIS-YF) has been allocated €35 million per year under Pillar I.
This will be rolled out to qualifying young farmers on a per hectare basis under the new CAP as opposed to being linked to payment entitlements.
Stay tuned to Agriland for further updates on the CAP Strategic Plan (CSP).