Mr. Brendan Gleeson:

It is mandatory. We could see a landing ground where this might become voluntary for member states. Some member states have former collective farms. There are big farms supporting ten or 12 families. We can see how in those circumstances a different dynamic is at play. The idea that we would cap a payment at €60,000 but not make allowance for the fact that five, six or ten families are working on a farm might not work in those places. There is a legitimate basis for including this provision. I believe it was substantially to satisfy some of the concerns of the relevant member states. From an Irish perspective and even from a practical perspective, I do not believe it will work. That is the position on the question of capping.

Reference was made to the optional environmental scheme. This is a new measure under Pillar 1. The question was whether it would be onerous or suitable for farmers who are farming intensively. The answer is that there is no detail in the Council regulation on this. I imagine this is an area where member states have a significant element of discretion. They must have a scheme in Pillar 1 that is open to farmers. I imagine it would probably have to be open to all farmers. The way we configure the scheme might influence the type of farmers who apply for it.

There are two issues. The first is that right now we are examining a regulation. We are trying to ensure there is nothing in the regulation to stop us from doing things we might want to do in future. We also want to ensure there is nothing in the regulation to require us to do things that we do not want to do. The second question is how we configure our national policy when these regulations are ready to go. It is a matter of what we put into our national plan. In a way, these are related but separate questions. The question of what we put into the environmental scheme in Pillar 1 is probably a question for phase two of the exercise. The second question is what we put into our plan and what it will look like. Obviously, we want to ensure the proposals do not confine us in a way that prevents us from doing things. We can have another discussion at some point on how we configure the new policy, but the question now is around what we do with this regulation. That is the position on the optional environmental scheme. It is for member states to determine.

Deputy Cahill asked about simplification. As I said at the previous meeting, this was easier said than done. This policy pays out €54 billion or €55 billion to 8 million farmers throughout Europe. It is a big beast and it is not easy to make it simple. There is always a tension between ensuring there is proper accountability and the money is well spent, on the one hand, and simplification, on the other hand. We have to have appropriate systems of accountability in place. What the Commission has done is perfectly reasonable. It has pushed some of the discretion back on member states. That does not obviate the need for member states to ensure that farmers do what they are paid to do. There is a need to manage expectation about what this will look like when it is done. I suppose I agree in the sense that we are not especially good at simplification, but it not easy either.

A question was asked about the crisis reserve. The reserve is an honourable endeavour to ensure that when there is a crisis, for example, a weather crisis, a fund is available at EU level that will help out farmers. The fund amounts to €400 million per year and is deducted from the direct payments envelope at the start of every year. From Ireland's perspective, it costs approximately €13 million. The idea is that if there is a crisis, however defined, during the year, the fund will represent a collective endeavour by European Union member states to give back to affected farmers. It has not been effective for multiple reasons. One is that it is difficult for member states in practice to consider that money attributable to their farmers is given to issues that do not affect them. That is a consequence of having a crisis reserve.

There are also sectoral issues. There could be a crisis in the dairy sector. A fund such as this requires solidarity from farmers in the beef and other sectors to give funding when needed. In practice, the €400 million reserve has not been used. The Commission has been looking at solutions to this because it thinks it a good idea to have a crisis reserve, although that is an arguable point. It proposes that the crisis reserve roll over from year to year and increase rather than the money being given back to member states. Some €400 million would not be not very much in the event of a dairy price crisis, for example. Two tranches of €500 million were found in the EU budget to deal with the most recent dairy crisis. The crisis reserve was not used. This is an effort to modify the existing rules such that the crisis reserve would roll over from year to year and get larger and be more effective. However, it would mean that the €13 million paid by Irish farmers into the crisis reserve would not be paid back on an annual basis. Rather, the unspent balance would be rolled on. Irish farmers might be the beneficiaries of such reserve on some occasions but not on others. That is the difficulty with a crisis reserve.

I was asked about the political background to the budget and I think I have deal with it. A group of member states have stated they are in favour of maintaining the budget.