CAP 2023-2027: €5.9 billion for Pillar I – full breakdown

Yesterday (Wednesday, October 20), the government announced the allocation of funding for the measures in the Common Agricultural Policy (CAP) 2023-2027.

Over €9.8 billion has been announced to cover all the measures across Pillar I and Pillar II. This figure includes an EU allocation of €7.5 billion over the five years, plus national co-financing of €2.3 billion in Pillar II.

While the nitty-gritty details that will interest farmers the most – such as the requirements to receive payments – remain to be decided on, the indicative allocations announced yesterday give us some insight into the the shape of the next CAP.

In this article we look at the funding allocation for the measures in Pillar I, which is outlined in the table below (Pillar I is entirely EU-funded).

As can be seen, the BISS – which is essentially the replacement for the current Basic Payment Scheme (BPS) – accounts for the majority of the funding, with over €3.642 billion (€728 million/year).

Payments under this scheme will be subject to convergence of 85%, which will see a new average payment entitlement of €165. The minimum payment entitlement value will reach almost €145 by 2026.

However, in this new CAP, significant monies from the overall Pillar I budget are set aside for other purposes, much more so than in the most recent CAP.

3%, or €177.9 million (€35.6 million/year) of the overall Pillar I budget will be set aside to top-up payments made to qualifying young farmers under the CIS-YF. These payments will be made on a per-hectare basis.

A further 10% of the direct payment budget (€593.1 million or €118.6 million/year) will be used to fund a front-loaded payment on the first 30ha of a holding, at a rate of €43/ha.

But the ‘big winner’ in the Pillar I budget (after BISS) is the much discussed eco-scheme. The scheme (which is optional for farmers to join) accounts for 25% of the overall Pillar I budget, or over €1.482 billion (€297 million/year).

The rate of payment will depend on the number of farmers that apply. The eco-scheme is not to be confused with the Agri-Environment Climate Measure, which is a Pillar II scheme to replace the Green, Low-Carbon Agri-Environment Scheme).

During the summer, when the funding level for eco-schemes was determined at a European level, it was also agreed that there would be a ‘learning period’, whereby eco-scheme funding not used could be returned to the BISS payment.

This would only apply in cases where 20% of Pillar I was used to fund the eco-scheme.

This ‘learning period’ – which would apply for years one and two of the eco-scheme (2023 and 2024) – was included to guard against farmer payments being lost in case of low-uptake of the schemes.

Some farmer representatives had questioned whether the learning period had been ultimately included at all in yesterday’s announcement, as the figure of 25% – rather than a lower figure – was allocated. However, Agriland understands that the learning period still applies if this 25% is not used in full.

Its worth noting that, over the course of the CAP, the overall average funding for the eco-scheme must reach 25%. Therefore, if there is a shortfall in funding used in the initial couple of years, this would likely have to be made up with funding from other areas of CAP in the later years of the programme.

Moving on to the final Pillar I points, there will be €35 million (€7 million/year, up from €3 million/year in the last CAP) for coupled income support for protein aid.

There will also be €39 million for sectoral interventions in the fruit and vegetable sector (through the fruit and veg producer organisation scheme) and €600,000 in interventions for the apiculture (beekeeping) sector, through the National Apiculture Programme.