Agricultural Consultant and managing director at Brady Group: Agricultural Consultants & Land Agents. The Lodge, Lee Road, Cork. 1st published in the Farming Independent 26/10/2021
Farmers and their advisors/consultants are presently weighed down with the amount of new information emerging week after week in respect of EU CAP 2023-2027 and measures to address the Climate Crisis. It feels like a tsunami of new rules and regulations which will shape the future of our industry.
The latest announcement by Minister McConalogue is about the CAP Strategic Plan 2023-20207 Funding & Measures. In this column I will deal with Pillar 1 (Direct Payments and Sectoral Interventions) or in layman terms the annual Basic Payment Scheme.
What will happen your entitlements in 2023 – 2027?
First, it is important to state that next year 2022, is a continuation of the existing CAP regime, therefore your Basic Payment Scheme Entitlements will be safe and continue as present until 2023. The new scheme, called Basic Income Support for Sustainability Scheme (BISS) will cover the period 2023-2027. The EU are funding 100% of this measure with as sum of €5.9bn allocated out of a total funding allocation from the EU of €7.5bn.
Nowadays as farmers and advisors/consultants, we are often questioned by the non-farming community as to why the EU makes these payments to farmers in the first place. The following are the three stated general objectives for the payments:
(i) to foster a smart, competitive, resilient and diversified agricultural sector ensuring long term food security;
(ii) to support and strengthen environmental protection, including biodiversity, and climate action, and to contribute to achieving the environmental- and climate-related objectives of the Union, including its commitments under the Paris Agreement;
(iii) to strengthen the socio-economic fabric of rural areas.
All these announcements have significant implications for the future of farm businesses and farm families. Some farming programmes are impacted more than others, and some farmers care more than others about their EU payments.
Here are the main Pillar 1 areas of interest to Irish farmers, as outlined by our Department of Agriculture Food and Marine(DAFM), for approval by the EU Commission as Ireland’s CAP Strategic Plan 2023-20207.
A new Eco-Scheme that will be open to all active farmers and carry a financial allocation of 25% of the Direct Payments envelope (approximately €297million per annum).
In simple terms DAFM will hold back 25% of your entitlements, it will be paid-out when you carry out certain environmentally friendly measures on your holding.
Redistribution of 10% of the value of the Pillar 1 budget on the Complementary Redistributive Income Support for Sustainability (CRISS), a “front loading” intervention that benefits smaller farmers to a greater extent than larger farmers (approximately €118million per annum) based on the first 30ha ( 74acres);
This tilts the entitlement payments balance slightly in favour of smaller holdings.
Allocation of at least 3% of the value of the Pillar 1 budget on interventions for Young Farmers each year in the Pillar 1 scheme (approximately €35million per annum);
This measure is to address the ageing profile of farmers.
Continue internal convergence so that all entitlements reach a minimum level of 85% of the national entitlement value by 2026;
Cap on Payments
Implement capping of direct payments at €100,000 and reduce payments over €60,000 by 85%, resulting in an effective cap of €66,000.
Climate and Environment
Three main elements;
- A baseline level of climate ambition will be achieved in Conditionality for all farmers receiving direct payments under CAP;
- Non-productive features must account for 4% of the area
- New Eco-Scheme as outlined above.
The clear thrust of Ireland’s CAP Strategic Plan is addressing the evolving needs and demands of society, having a particularly strong emphasis on achievement of a higher level of climate and environment ambition.
It contains measures which plan to achieve significant improvements in the areas of biodiversity and water quality, as well as contributing to national and EU climate and environmental targets, including through increased sequestration and carbon removal. The Minister states that ‘Ireland’s CAP Strategic Plan will have a new “Green Architecture” to achieve this environmental ambition.
Will farmers buy into this CAP Strategic Plan (Pillar 1)?
The first calls to our office were along the lines of; ‘should we sell our entitlements altogether and avoid all this bullshit red tape and inspections’.
If this is a sample of general farmer reaction, then DAFM need take note.
The issue here for farmers is not carrying out the measures, nor the inspections but the ‘not for profit’ element of both Pillar 1 and Pillar 11 schemes.
Farmers will jump through hoops to get funding if there is financial profit in it for them, unfortunately the trend with all EU funding since the now infamous REPS Scheme is that ‘you have to spend the money to get the money’.
From my experience the characteristics of implementing a successful scheme are as follows:
- Society: It meets the evolving needs and demands of society.
- EU Commission: It meets the EU Commission’s stated objectives.
- DAFM: It is easy for our DAFM to implement and police.
- Advisors/Consultants: It engages farmers and their advisor/consultants.
- Farmers: There is a profit margin in it for farmers.
It seems to me that the CAP Strategic Plan 2023-2027 meets numbers 1 to 3 well, but is deficient when it comes numbers 4 & 5. Allocating all the money in the world is of no use, if farmers are not enthusiastic to apply and draw it down.