Fianna Fáil agriculture spokesman Eamon Ó Cuív has told the Irish Farmers Association that Farm Minister Simon Coveney will have enough money in the next Rural Development Programmes budget to fund a generous headage payment for breeding ewes in lieu of the loss incurred through the ending of the current Sheep Grassland Scheme.

Speaking at today’s meeting of the Oireachtas Agriculture Committee, he added:

“This is a more feasible way of putting additional and much needed extra money into the hill sheep sector.”

Addressing the Joint Oireachtas Committee on Agriculture in the Dáil today (Tues), IFA National Sheep Committee Chairman John Lynskey called on the Minister of Agriculture Simon Coveney to restore the value of the Sheep Grassland Scheme to €18m as part of the Single Farm Payment for sheep farmers in the new CAP, and to protect the benefits of the scheme for Irish sheep farmers.

John Lynskey said as part of a recent announcement by Minister Coveney on CAP Reform, it was proposed that the Sheep Grassland Payment would be abolished from 2015, and that the payments involved would be subsumed into the Single Farm Payment. “There are real problems with this proposal as most of the benefits of the Sheep Grassland Scheme will be lost to individual sheep farmers over time and the national sheep sector.”

The IFA National Sheep Chairman explained to the Dáil Committee that for farmers above the average Single Farm Payment, the sheep grassland portion of their payment will be eroded over time up to 2019 as payments are converged downwards. For farmers with lower Single Farm Payments, the value of the sheep grassland payment will also be eroded as their payments move up towards the average.

John Lynskey said IFA has met with Minister Coveney and explained the problems in detail and specifically highlighted the problem with convergence. He added the Minister accepted that there are problems for sheep farmers with the current proposal and stated he would re-examine it.

Against this background, John Lynskey said the IFA has proposed that the total funding under the Sheep Grassland Scheme should be restored to the original €18m as part of the new single farm payment of flock owners, from 2015. The additional funding will go towards compensating farmers against the losses as a result of convergence.  For farmers on the minimum payment by 2019, it is essential that their grassland payment is fully protected over and above the minimum payment level, as they would have been entitled to this basic level of payment without the sheep grassland scheme add on.

As part of the CAP Reform, IFA had proposed a coupled payment for the sheep sector.  Minister Coveney decided not to go down this route. In addition, the Minister has indicated he does not want to move funds from Pillar I to Pillar II.

John Lynskey told the Dáil Committee that incomes on sheep farms are low. The most recent figures from the 2012 Teagasc National Farm Survey show incomes at just over €18,000 per annum, or about 55% of the average industrial wage.

The IFA Sheep Chairman said the sector has come through some very tough times. In the last two major reforms of the CAP, the sheep sector was badly short changed. In the first Fischler CAP reform, sheep lost out with a low ewe premium. In addition, sheep was also overlooked for extensification premium payments. In 2005 under decoupling, this problem was ingrained in the system with sheep farmers ending up with generally low direct payments.

IFA worked hard to get some support for the sheep sector during this period, culminating in the introduction of the Sheep Grassland Scheme valued at €18m per annum in 2010. The scheme proved to be effective and was simple to administer. The figures show that this halted the decline in ewe numbers and helped to restore some confidence at farm level. However, the latest CSO data for December 2013 show a reduction in sheep numbers, back 3.1% on December 2012 levels.  The breeding flock is back 1.2% or 30,000 ewes.

Unfortunately, the Sheep Grassland Scheme was cut in the 2012 budget from €18m down to €14m for 2013 with some €3m transferred to the STAP (Sheep Technology Programme) scheme. Payments at farm level reduced from about €8.50 per ewe back to €6.35 per ewe. Under Food Harvest 2020, the Government has set down a modest growth target for the sheep sector of 20% in output value by 2020. John Lynskey said if ewe numbers start to decline again at farm level, which is feared as a result of the loss of the sheep grassland scheme, this target is unlikely to be reached.