Agricultural Consultant and managing director at Brady Group: Agricultural Consultants & Land Agents. The Lodge, Lee Road, Cork.
The public consultation on the draft interventions proposed for Ireland’s 2023-2027 CAP Strategic Plan has been extended to the 3rd of September by Charlie McConalogue, Minister for Agriculture Food and Marine. The final plan must be submitted to the EU before January 2022. The new CAP regime covers the period 2023-2027.
The EU require a mandatory redistribution of payments to those who need them most or to those who are contributing to the CAP objectives. The EU CAP has nine stated objectives, summarised as follows:
- Environmental care.
- Climate change action.
- Protect food health and quality.
- Rebalance power in the food chain.
- Increase competitiveness.
- Ensure fair income.
- Preserve landscapes & biodiversity.
- Support generational renewal.
- Vibrant rural areas.
How do farmers who have leased out their land and Basic Payment Scheme (BPS) entitlements, so called ‘Armchair Farmers’ fit into the above objectives?
The cold facts of the matter are that Armchair Farmers do not meet one of the nine objectives of EU CAP, so how will the Department of Agriculture Food and Marine (DAFM) deal with this thorny and very political issue?
The Minister and DAFM have been evasive on the matter, suggesting the balance will be tilted in favour of ‘Active Farmers’ or those who are actually farming the land.
The CAP is in place since 1962 and it has evolved a lot over the years. This time each member state has more scope (termed greater subsidiarity) to tailor the strategic plan to meet the needs of the particular region or country. This provides an opportunity for DAFM to tackle the armchair farmer issue in this country for once and for all.
The following is a proposed solution to the issue:
- All Basic Payment Scheme (BPS) entitlements cease on the 31st of December 2022.
- The farmers who have BPS Entitlements leased out with land on long term leases are not allocated new Basic Income Support for Stainability Scheme (BISS) entitlements, regardless of whether they are still farming some land or not.
- The entitlements subject to lease can be sold to the leasee without clawback or to a third party with a 20% clawback before the 15th of May 20222.
- The sale of entitlements will not be subject to Capital Gains Tax (CGT).
- Farmers who are short land and have surplus BPS entitlements can also sell their entitlements, but are subject to 20% clawback and CGT.
- Active farmers who are allocated new BISS entitlements in 2023, but decide to lease out their land and entitlements in the 2023-2027 CAP period know they will not get an allocation of entitlements in subsequent CAP reforms.
- Farmers who have to lease out their land and entitlements for Force Marjorie reasons and are forced to sell their entitlements as a result should get preference for an allocation from the National Reserve in the subsequent CAP period.
The above plan will provide clarity to both Armchair Farmers and their tenants (Active Farmers ) for the remainder of the current CAP regime and more importantly for subsequent CAP regimes.
In the present scenario some farmers who wish or need to retire from farming are holding on and continuing to farm against their will, until they get a new allocation of BISS entitlements. Some of these farmers are continuing to farm against medical advice and damaging their heath and often running down their farms. One farmer recently commented to me that ‘he was sad and frustrated to see his farm growing up around him’, referring to weeds and overgrown hedgerows he was struggling to maintain. This situation has to be addressed.
However, the really frustrating scenario are the farmers who are pretending to farm. Many farmers will go to the ends of the earth to protect their ‘farm payments’. This can often result in ‘paper farming’ which is another less obvious type of Armchair Farmer. I refer in particular to those renting hills and mountains with minimal numbers of sheep, small tillage farmers who don’t even know what crops they are sowing and the sale of grass by farmers who haven’t even purchased the fertiliser.
This weak-link in the present system must be met head on by DAFM in the new CAP reform. The land in these farm holdings should be farmed in official partnerships or in share-farming arrangements to drawdown payments or else be leased out. The mentality of holding onto ‘farm payments’ at all costs is generated out of a fear of losing or of never gaining access to the payments again. This again, can be addressed by prioritising such farmers from the National Reserve.
Farm payments in whatever guise, should be paid to Active Farmers not Armchair Farmers. I have no issue with retiring farmers leasing out their farm payments in a long-term lease and getting 100pc paid back annually tax free but only for as long as those payments last i.e. the length of the CAP reform period. This allows such farmers to have a clear exit and retire with dignity.
To conclude, farmers have to learn to accept that when they retire they will lose their farm payments at the next reform. The time has come to tilt the balance in favour of Active Farmers.