Simon Coveney (Cork South Central, Fine Gael) | Oireachtas source

I know the Deputy is aware of it, but I am saying this for everybody's benefit. These are 2010 figures. We are talking about a payment that farmers would have got in 2010 and the payment they will get after the redistribution effect of what we are proposing. Figures have changed slightly since 2010 for some farmers. The average payment will also be less because redistribution will happen after the 3.3% budget cut is applied, after the 2% for young farmers is applied, after the 3% national reserve figure is applied, and after the 1% crisis reserve is applied. The figure that everybody gets before redistribution kicks in will be less. We may not use a full 2% for young farmers. In my view we are unlikely to use the full 3% for the national reserve, but these are maximum figures that could be cut. The reality is that some money will be taken from farmers' payments before the redistribution kicks in. Money will be given back to farmers on the basis of young farmers and the national reserve, and money will be given back from the crisis fund if it is not spent. I have heard farm organisations stating that farmers are going to lose 9% before they even start. In my view, that is the maximum possible that could be lost before we start, but it is very unlikely to be 9% because most of these funds will not reach their full amount, and in most years the 1% crisis fund will be reimbursed to farmers the following year as we do not have a crisis every year. People need to understand that.

Some of the figures we read about are accurate, but some of them also factor in maximum losses without factoring in gains. When farmers say that they will lose 2% to give to young farmers, their sons might be gaining from that, or they might be gaining from it if they are under 40. Some of them might be losing 2% and gaining 25%. Let us not just focus on losses, because that is what makes the dramatic headlines. Let us try to look at what is lost and what is gained, because all of those initial losses are for very strategic reasons that all of the farming organisations support.

Farming organisations tell me they are in favour of supporting young farmers, yet they are concerned about the fact that everybody is losing 2% to facilitate that support. They say they support a national reserve, yet they are uncomfortable about the fact that farmers have to lose 3% to facilitate it. They cannot have it every which way. That is why I hope this consultation process can be non-partisan. Let us try to put together a package of measures that work. We will disagree on some things but it is important that we all operate on the basis of accurate figures.

I accept that the REPS payments have resulted in a fairly dramatic loss of income for many. When REPS payments were at their height we had a lot of extra national money that was being added to European money, beyond matching funding to put more money into agriculture, and rightly so, because the country could afford it at the time. We are now just about matching European money to make sure that we have full draw-down, but adding nothing on top because we cannot afford it. One of the casualties of that has been the switch from a very generous and popular REPS to the less generous and less popular but much more focused AEOS. It is still popular. It is oversubscribed. There were 9,000 applicants for the last AEOS that we launched last year but we can take only 6,000. Anyone who says it is a Mickey Mouse scheme should look at the applications. I accept that there is less money to spend on rural development and that is why we need to be more accurate about how we spend it. My comments on avoiding shocks to the system are about the redistribution effect in the new CAP for people’s single farm payments. I said that very clearly.

In response to Deputy Ferris's comments on coupling, this requires a real discussion and I would appreciate an input from this committee. There are pros and cons to coupling. We will send out a very good paper on this, if we have not done so already. People need to realise that we have the capacity to couple up to 10% of Pillar 1 money - that is, 8% plus an option of 2% for protein crops if we want. Ten percent of €1.2 billion is €120 million, which is a lot of money that we could choose to couple if we wanted to max that out. That means that every farmer loses 10% of his or her payment to facilitate that fund. The arable or dairy sector may be paying for re-coupling in the suckler beef sector. If we want to do that let us go into it with our eyes open. Sometimes farmers call for coupled payments as if it were new money coming from Brussels that does not affect single farm payments for everybody else. That is not the situation. This is a €1.2 billion pool of money. That is it. If we decide to take some of it to re-couple payments we need to consider that option carefully and we may well pursue it to support vulnerable sectors. Let us be clear, however, if we do that we are taking the money from other sectors that must sponsor it.