With the Department of Agriculture, Food and the Marine’s draft Common Agriculture Policy Strategic Plan (CSP) still generating talk, the department has moved to engage with farmers to explain the changes to direct payments.
As part of this, the department has set up a series of ‘Town Hall‘ virtual meetings which farmers can view.
It has also released updated modelling on how future direct payments will look in year one of the new policy (2023).
These models use hypothetical ‘case studies’ as broad examples of how farmers in different circumstances can expect to the affected.
There are three case studies, dealing with ‘Farmer A’, who has a low number of payment entitlements; ‘Farmer B’, who has a moderate number of payment entitlements; and ‘Farmer C’, who has a high number of payment entitlements.
Two models are produced each for Farmer A and Farmer C – one in a low entitlement value scenario and one in a high entitlement value scenario. The model for Farmer B concerns only average or static entitlement value.
All models include two versions: a maximum and a minimum. In the latter, convergence is assumed to be 85%, while the proportion of the national ceiling of Pillar I that is used for the Complimentary Redistributive Income Support for Sustainability (CRISS) is 5%.
In the maximum model, convergence is set at 100% and the CRISS ringfencing from Pillar I is set at 10%.
CRISS payment is €22/ha in the minimum model and €44/ha in the maximum. Furthermore, the models assume a farmer can be paid on up to 30ha under CRISS.
In all cases, the payment for eco-schemes is €64/ha.
The ringfencing of funds for eco-schemes and CRISS necessarily reduces the payment value of each entitlement under the Basic Income Support for Sustainability (BISS), which is the replacement for the Basic Payment Scheme (BPS).
The current entitlement unit value (UV) used in the case studies ranges from €160 to €681, based on model averages.
Case Study One
Case Study One presents Farmer A, who has a relatively low number of entitlements – five.
In the first model, the farmer’s entitlements have a relatively low UV in 2021 of €160 (for a total 2021 payment of €800).
According to assumptions laid out above, Farmer A’s payments will change as follows in year one of the new CAP:
Model UV BISS Eco-scheme CRISS Total Difference Minimum €120 €600 €320 €110 €1,030 +€230 Maximum €117 €585 €320 €220 €1,125 +€325
Farmer A makes an additional €230 on the current €800 in the minimum model (an increase of 29%) and an additional €325 in the maximum model (an increase of 41%).
However, if we assume that Farmer A has a high UV of €681, which equates to a 2021 payment of €3,405, the modelling throws up the opposite results for year one of the new CAP:
Model UV BISS Eco-scheme CRISS Total Difference Minimum €429 €2,145 €320 €110 €2,575 -€830 Maximum €364 €1,820 €320 €220 €2,360 -€1,045
Here, Farmer A’s payment decreases by €830 in the minimum model (a 24% decline) and by €1,045 in the maximum (a 31% decline).
Case Study Two
Case Study Two introduces Farmer B, who has a mid-range number of payment entitlements – 20 – and an average or static UV in 2021 of €261, resulting in a payment this year of €5,220.
The department modelling exercise results in these changes:
Model UV BISS Eco-scheme CRISS Total Difference Minimum €178 €3,560 €1,280 €440 €5,280 +€60 Maximum €165 €3,300 €1,280 €880 €5,460 +€240
Farmer B sees a slight increase in the minimum model of €60 (about 1%) and a slightly larger increase in the maximum model of €240 (5%).
The department’s modelling documents note that farmers in this situation who have approximately average payments and entitlements will be the least affected by the redistribution of funds under the new CAP.
Case Study Three
Case Study Three concerns Farmer C, who has a high number of entitlements – 40.
In the first model, the farmer has a 2021 UV of €160, giving a payment of €6,400. When the new payment landscape is applied, it results in the following changes:
Model UV BISS Eco-scheme CRISS Total Difference Minimum €120 €4,800 €2,560 €660 €8,020 +€1,620 Maximum €117 €4,680 €2,560 €1,320 €8,560 +€2,160
This model shows an increase in payment of €1,620 (25%) in the minimum scenario and of €2,160 (34%) in the maximum scenario.
In the next model, Farmer C has a higher UV in 2021 of €473, resulting in a current payment of €18,920.
In this state of affairs, the department modelling produces the following result:
Model UV BISS Eco-scheme CRISS Total Difference Minimum €305 €12,200 €2,560 €660 €15,420 -€3,500 Maximum €266 €10,640 €2,560 €1,320 €14,520 -€4,400
Here, Farmer C sees a decrease in payment of €3,500 (18%) under the minimum model and €4,400 (23%) in the maximum model.
As noted above, the modelling does not allow for farmers to be paid on more than 30ha under CRISS. Thus, Farmer C does not receive a CRISS payment on 10ha.
As can be seen in these models, farmers with lower value entitlements are set to see increases in payments, while those with higher entitlements are set to see a decrease.