How would you like your share of Ireland’s €14m in aid?
The European Commission confirmed this week that Ireland’s support package of dairy and pig farmers from the EU Commissions latest proposals will be €13.73m.
However, despite it being higher than the €11m received in 2009, the figure remains significantly lower than the €20m mooted by many when the Commission outlined its €500m aid package last week.
The Commission has said that EU Member States will be allowed maximum flexibility to target aid for appropriate measures to address the negative market impact on farmers, according to Commissioner Hogan.
How will the money be spent?
To date only two options have been mooted as serious options to be considered.
The first option is that the money could be simply paid on a lump sum basis to farmers using past quota holding as a criteria for its distribution. Rough calculations suggest the payment would be worth in the region of €700 per farmer.
The advantages of this idea would be that it would be the simplest to implement and could be actioned quickly. However, critics of the idea say that it would have little impact on farmers incomes, serves no benefit to the sectors structurally and will leave the farmers with the highest bills behind.
Another option being suggested includes is the creation of a liquidity fund or loan mechanism for farmers.
Similar to an initiative undertaken in New Zealand the idea would see the €14m used to fund low or zero interest loans to help farmers that need it the most at the current time.
This option would more likely be of more benefit to the farmers under the most pressure at the moment. However, such a structure may take more time to implement and would require a certain level of bureaucracy.
Another option would see the money used purely for the promotion of Irish dairy and pigment internationally. While this option would serve the least benefit to farmers’ short term cash flow issues over the longer term it may benefit both sectors in a more meaningful way.