Thousands of farmers facing severe cuts

The amount of money available for re-distribution under the single farm payment (SFP) scheme Common Agricultural Policy (CAP) Reform was discussed in an Oireachtas recently.

This latest information on the SFP from the Department of Agriculture will anger thousands of farmers facing severe cuts, the Irish Farmers Association (IFA)  yesterday said.

SFP latest information

In a parlimentary question, Fianna Fail’s Eamon O Cuiv asked the Agriculture Minister Simon Coveney what amount of money would be available for re-distribution under the SFP scheme  if the maximum payment for the single farm payment was set at 400/ha and 450/ha.

In reply, the minister said: “The CAP reform agreement on 26 June provided two options for member states in relation to the internal convergence of direct payments: either a flat rate per hectare payment (the Commissions proposal) or partial convergence (Irish model).  Under partial convergence, farmers with payments below 90 per cent of the national average payment per hectare will have their payments raised by at least one third of the difference between their current payment and 90 per cent of the national average by 2019, with a minimum payment of 60 per cent of the national average per hectare by 2019.”

This is financed by reductions to payments above the national average payment per hectare, Deputy Coveney said. Member states have flexibility as to how payment reductions are applied to those above the average, provided this is done on the basis of objective and non-discriminative criteria to be determined by member states, he added.

“Member states may also apply an optional maximum 30 per cent loss on convergence. In 2019 when compared with the unit value established in 2015.”

He referred to calculations by his Department that show the partial convergence with a minimum payment of 60 per cent of national average, resulting in a transfer of 103m from convergence.

He outlined the following that should be taken into consideration regarding the SFP structure above.

Firstly that the analysis is based on 2010 SPS payments and looks at the effect of convergence alone, rather than taking account of other adjustments to payments.

Secondly, that the total 2010 payments of 1,250 million, on which the table is based, have already been reduced to 1,230 million in 2012.

Thirdly some changes will also need to be made to the total ceiling before convergence is calculated, for example, young farmer scheme  up to 2 per cent of national ceiling, national reserve  up to 3 per cent of basic payment ceiling, crisis reserve 1 per cent of national ceiling.

And finally, if Ireland opts to implement additional schemes such as the Redistributive Payment or Voluntary Coupled support, these amounts would also be deducted from the national ceiling.

Estimations

Information was also released that summarised the estimate estimated effect of adding a maximum payment per hectare of 400 or 450 to the calculations.

A maximum rate per hectare of 400 in 2019 would have roughly the following effects, the minister stated in a reply to the parliamentary question by Deputy O Cuiv.

“Around 7,600 farmers (those currently above 500/ha) would be affected. It would raise additional savings of 32 million in addition to the proportional reductions already applied to these farmers; presumably these savings could be used to adjust the proportional reduction applied to the remaining farmers above the national average. The percentage reductions applied to farmers in the highest payment categories would be increased considerably by adding a maximum payment per hectare.

He continued: “A maximum rate per hectare of 450 in 2019 would have roughly the following effects: Almost 5,000 farmers (those currently above 550/ha) would be affected. It would raise additional savings of 17 million in addition to the proportional reductions already applied to these farmers.”

Productive farmers

In a statement yesterday, IFA President John Bryan reiterated its demand that objective criteria must be taken into account in the redistribution of the SFP.

He said SFP cuts must be minimised and funds available for redistribution must be targeted at productive farmers with low payments.

“Throughout the CAP campaign, IFA made it clear at all times that SFP funds for redistribution must go to active, productive farmers and should not be redistributed solely and indiscriminately based on land area.  The latest department figures, which should have been made available months ago, show the flaw in Commissioner Ciolos flat-rate and minimum payment system regardless of production.”

Bryan said  the IFA has consistently said objective criteria such as stocking rate, labour units or other production criteria should be utilised to target payments to active producers.

He said the IFA policy stood up to scrutiny throughout the CAP debate and was strongly supported by farmers all over the country.

“Minister Coveney must take on board this principle in deciding the implementation criteria for the Single Farm Payment from 2015.”

Latest information from the Department of Agriculture regarding single farm payments is available here SFP details.