CAP Update

24th June, 2013

Recent months have seen very positive developments in the negotiations on reform of the CAP.  This is a hugely significant reform for Agriculture and farmers in this country and very substantial progress has been made throughout the Presidency.

We are now entering the final stages of the Irish Presidency. The Council of Agriculture Ministers meets next week (24-26th June) for a crucial meeting on CAP and while the timeframe has been very challenging, every effort is being made to bring negotiations to political agreement.

Minister Coveney was in Brussels yesterday, Thursday 20th, meeting with Commissioner Ciolos and Paolo de Castro, EP Chair of COMAgri to explore some of the outstanding issues in advance of next week’s Council. He will travel to Luxembourg tomorrow, Saturday
(22nd) to hold meetings with Member States before Council begins next week.

 

Steps along the way during the Presidency:

 

  • The agreement by the European Council on the Multiannual Financial Framework on 8 February provided the necessary clarity to enable the CAP discussions to move forward.
  • Both Pillar 1 (Direct Payments and Market Supports) and Pillar 2 (Rural Development funding) were agreed until 2020.
  • Pillar 1:  €1,214m for Ireland annually until 2020
  • Pillar 2: €313m for Ireland annually until 2020
    • This was followed by the adoption by the European Parliament of its overall position on the reform proposals at its plenary session on 12 March.
    • This was in turn followed by the agreement by the Council of Agriculture Ministers on 19 March on its so-called ‘General Approach’ to the reform package, following the tabling of compromise proposals by the Irish Presidency.

 

New Decision Process

The big question now is whether the Council of Ministers, Commission and the European Parliament can come to an agreement on these and other issues by the end of June.

This is the first time that the Parliament has had such a role in relation to a CAP reform package (co-decision). As President of the Council, Ireland is representing Member States in these negotiations.

Progress has been very good so far. Over 30 trilogues have been held in a very positive, constructive atmosphere. All of the institutions have responded to the Presidency’s call for a collaborative endeavour, and for a spirit of compromise to inform the process.

A parallel process aimed at making progress on the big political issues that are likely to form the basis of the final political agreement has also been ongoing.

 

Sensitive Issues

Decisions around a number of sensitive issues including the level of redistribution within Member States, sugar quotas, greening, small farmer’s scheme, young farmer’s scheme and coupling remain to be finalised.

The question of redistribution of the Single Farm Payment (internal convergence) is for Ireland, the most significant issue in the reform. It is important to remember the starting point in this process;

 

  • Commissioner has proposed moving to a flat rate payment per hectare model, which would see an overall redistribution of €280m between farmers in Ireland, average losses of 33% and average gains of 85%. Under the Commission’s original proposal, all farmers regardless of where they farm or what level of production they are engaged in would receive an average payment of €270 per hectare.
  • Ireland put forward an approximation model, which would see overall distribution of approximately €80m, moving
    gradually towards but not to, the average payment per hectare.
  • As with any negotiation, the final outcome will lie somewhere between the Commission proposal and solutions offered by other Member
    States including Ireland.  Whatever the level of distribution involved, it will happen gradually over the period to 2019 and Government is negotiating to try and secure a level of distribution that is much closer to the Irish position than that of the Commission.

A priority for Minister Coveney has been the inclusion of a proposal for a Young Farmer’s Scheme and this is very likely to be a mandatory
scheme for all Member States.

 

Minimum

There are many sensitive political issues outstanding in this reform, which will be decided during the final stages of negotiation.

The question of a mandatory minimum payment per hectare for all farmers has been raised by the Commissioner as a red line issue in the context of these changes and this proposal is supported by some Member States and also by some Members of the European Parliament.

Ireland’s priority is to ensure that if a minimum is adopted in the reform, the redistributive impact on Ireland is kept to a level that is fair and manageable. The overall level of redistribution involved is the key to this proposal and should be the focus.

 

In redistributing payments fairly, the goal is to make sure that changes avoid disproportionately affecting productive farmers, while at the same time, ensuring that farmers on low historical payments are more adequately supported.

Tool box of Other Options


Once the overall level of redistribution has been decided, there will be a number of likely options open to Member States. Many of them will be optional so they will be subject to debate at a national level and farm bodies will have the opportunity to provide their views on the best options for Ireland. (Factoring them into any percentage distribution at this point is misleading as we have not yet decided what options Ireland will adopt)

These options are likely to include;

  • coupling
  • Redistributive/ ‘First Hectares’ proposal (using top up of national ceiling for farmers up to a particular farm size)
  • Small Farmers Scheme
  • Crisis Reserve