Mr. Paul Savage:

I very much welcome the opportunity to come before the committee in order to provide an update on where things stand with the CAP post-2020 negotiation process. Our most recent engagement with the committee was in January, when it was updated on how the negotiation process had evolved up to that point, the key issues of importance for Ireland, indicative timings regarding the development of the proposals and where matters stood as regards the funding of the next CAP. Since then, negotiations have progressed under the Romanian Presidency. Only yesterday, the incoming Finnish Presidency set out its priorities for the next six months. My intention today is to update the committee on the negotiation process over the past six months, the developments at Council and European Parliament level, the indicative timing for agreement on the legislative proposals, the Department’s consideration of the proposals and the next steps, both at EU and national levels. Since the committee was last updated, the Department has refined some of its thinking in respect of the legislative proposals. In that context, I will also provide a brief update on the key issues from Ireland's perspective.

The CAP legislative proposals have been discussed at length during the Romanian Presidency, with a total of 22 separate working group meetings taking place, that is, 16 meetings of the working party on horizontal agricultural questions, which dealt with the CAP strategic plan regulation, and six working party on financial agricultural questions, AgriFin, meetings examining the financial management and monitoring elements of the new CAP. Specific elements of the CAP post-2020 proposals, guided by Presidency policy papers, were also discussed at 14 Special Committee of Agriculture meetings. EU Agriculture Ministers also discussed the proposals at each of their Council meetings during the Romanian Presidency.

The Romanian Presidency adopted a thematic approach to the negotiations, discussing a different theme each month. The themes focused on the new delivery model and the performance framework, indicators, rural development, greening and interventions. The Presidency’s ambition was to achieve a partial general approach on the proposals at its last Agriculture and Fisheries, Agri-Fish, Council, in June. As part of that ambition, it presented a ten-step roadmap at the Council meeting in May. This included holding technical bilateral meetings with member states in a bid to identify their key issues, as well as areas of mutual understanding. Ireland presented its key issues to the Romanian Presidency at its technical bilateral meeting, and I will come to these issues later. Despite the Presidency’s best efforts to achieve a partial general approach, it was not possible to do so. The complexity of the proposals and the number of outstanding issues that were still to be agreed upon ultimately led our colleagues to downgrade their expectations. Instead, they presented a progress report and state of play on each of the three regulations at the Agri-Fish Council on 18 June.

On the CAP strategic plan regulation, the Romanian Presidency presented several versions of revised drafting suggestions. The first two versions focused on some politically sensitive aspects, including definitions for permanent pasture, young farmer and genuine farmer, capping of direct payments, complementary redistributive income support for sustainability, natural or other area-specific constraints, establishment of the performance framework, and annual performance reports. The second revision of drafting suggestions involved a comprehensive redraft of the entire proposal.

In the case of the horizontal regulation, the Presidency presented a consolidated text and considered that the current redrafted text was mainly fit for purpose. The redrafted text tries to address member states’ concerns and also provides clarification on the integrated administration and control system, conditionality and the control and penalty system. However, concerns remain among member states regarding the new delivery model and the alignment of the horizontal regulation with the CAP strategic plan regulation.

The Romanian Presidency also presented revised drafting suggestions for the amending common market organisation, CMO, regulation in March. The majority of the amendments related to the wine sector, with additional amendments made for hemp imports, marketing rules for wine to the olive oil sector and prolonging national aids in Finland until 2027. All provisions with budgetary implications or of a horizontal nature were set aside pending further progress on the multi-annual financial framework, MFF, and currently appear in square brackets.

At the Presidency’s last Agri-Fish Council of Ministers meeting in June, member states considered its progress report. While member states acknowledged the work done and the progress made, all were agreed that there were a number of issues still to be resolved before agreement could be achieved. This also included the need to have further progress in the MFF negotiations.

The negotiation process will continue under the Finnish Presidency. The Finns have outlined their objectives for the CAP post-2020 negotiations, namely, to advance the negotiations as far as possible - taking into account the uncertainties linked to this process, including agreement on the MFF budgetary proposals, Brexit and the European Parliament’s consideration of the proposals - and to at least produce an updated set of draft legal texts by the end of their Presidency, and, if possible, to reach a Council general approach. This last objective is likely to be very much dependent on the outcome of the MFF negotiation process.

In parallel to the Council's deliberations, the European Parliament has also been considering the CAP legislative proposals. Both the EU Committee on Agriculture and Rural Development, COMAGRI, and the Committee on Environment, Public health and Food Safety, a committee of the European Parliament, have considered the proposals in detail. The ENVI committee adopted its position on the CAP strategic plan regulation on 14 February 2019. COMAGRI voted on the three legislative proposals in April - on the CMO regulation on 1 April, the CAP strategic plan regulation on 3 April, and the horizontal regulation on 8 April. All votes were passed. However, they are not legally binding at this time. As there was no plenary discussion before Parliament rose for the European elections in May, the Parliament could not formally adopt its position.

Department officials have also been considering the CAP legislative proposals in detail since their launch last year. This involves regular and ongoing consultation with relevant farm bodies and stakeholders. Following on from the CAP consultative conference in July of last year, the Minister, Deputy Creed, has recently established a national CAP consultative committee to facilitate ongoing consultation with key stakeholders regarding the reform of the CAP post-2020.

I would now like to address some of the key points of concern for Ireland that have arisen during the negotiations to date. Ireland has outlined its concerns on a regular basis during the negotiation process, and reiterated them at the technical meeting with the Romanian Presidency in May. It will come as no surprise to hear that the majority of our concerns relate to the CAP strategic plan regulation, and I will come to these shortly. I would first like to address our concerns with the amending CMO regulation and the horizontal regulation. First, the majority of changes to the amending CMO regulation relate specifically to the wine sector, and we do not have a difficulty with these. More generally, however, we consider that it is essential to maintain the existing market support measures within the CMO regulation in order to ensure continued market stability and to protect producers. We continue to see the traditional market support mechanisms such as intervention and aids to private storage as an important safety net, in addition to the ability, as at present, to respond to exceptional market disturbances. In the case of the horizontal regulation, there are strong linkages between this regulation and the CAP strategic plan regulation, in particular with regard to the performance framework. We think that joint consideration of both regulations is therefore required in order to provide clarity on a number of areas, including the level required for performance reporting, the level of detail required explaining variations on annual performance reporting, and the role of the certifying body at a practical level.

On the integrated administration and control system, we consider there is a need to have a transitional period for the area monitoring system in order to facilitate the development and implementation of the system. We also consider there should be a uniform approach across member states in identifying non-compliances at farm level and implementing associated penalties so as to ensure a level playing field.

For the CAP strategic plan, we continue to have serious concerns regarding the implementation of the new delivery model and consider that significant further work is required on this at a technical level. The changes to the direct payments system are also of concern to Ireland. The Minister has already said that we can support the mandatory capping of direct payments and mandatory eco-schemes. However, we consider that capping should not apply to eco-schemes or the direct payments top-up to young farmers above the capping limit. With regard to the mandatory requirement for member states to deduct labour costs before capping, we consider this to be an unnecessary administrative burden and that it should be voluntary. As regards coupled support, Ireland has no difficulty with the Commission’s proposal to reduce this from an envelope of 13% plus 2%, to 10% plus 2%.

With regard to the planned crisis reserve, which proposes that the financial discipline in 2020 be the primary source of funding for the reserve, we consider that the use of all other funds, including assigned revenue, should be drawn on first for setting up the reserve in 2021. In the case of risk management tools, Ireland’s preference is for this to be a voluntary option for member states.

On environmental conditionality, we have already said that we are supportive of the increased environmental ambition in the next CAP. We consider there should be a common set of standards for member states to which to adhere. However, implementation of environmental measures may require different practical actions to be undertaken in each member state, and these should be established on foot of an evidence-based assessment of the conditions in each member state. The requirement of 15% expenditure for environmental actions to be undertaken by producer organisations in the fruit and vegetable sector is challenging for Ireland as it presents technical difficulties for us. We would like to maintain the current 10% level in the next CAP.

We have highlighted our concerns to the Romanian Presidency in the area of definitions, in particular for the young farmer, genuine farmer and eligible area. The genuine farmer has again proved problematic to reach agreement on and we consider the Commission’s definition to be unworkable for us.

Ireland has supported the Presidency’s proposal that this be voluntary for member states.

For the young farmer, we have supported the increased level of ambition by the Commission to attract young farmers into farming and to encourage generational renewal. We see education as an essential requirement for young farmers, but would like to see additional flexibility being provided to member states to set down further criteria as required. With regard to the 2% financial target to support young farmers, we are strongly of the view that we should be allowed to count our top-up investment grant support to young farmers as part of this 2%.

In a broader context, and following my earlier references to the multi-annual financial framework, MFF, negotiations, the committee will be aware of the proposed 5% cut to the CAP budget after 2020. The proposed cut is unacceptable for Ireland. The Minister for Agriculture, Food and the Marine, Deputy Creed, has been working hard with his EU ministerial colleagues in garnering support for maintaining the CAP budget at current levels for the EU 27 in the next period. Agreement on the MFF post-2020 proposals is a necessary component towards achieving agreement on the CAP post-2020 proposals. The MFF post-2020 negotiation process was recently discussed at the European Council, where the Romanian Presidency presented a progress report on the work carried out to date. Negotiations will continue under the Finnish Presidency and the Finns hope to present a first set of figures for member states to consider in October.

Ultimately, agreement on the MFF proposals is a matter for EU finance ministers and Heads of State and Government. We are aware that there are diverging views among member states at this level as to the level of funding that should be attributed to the CAP in the next programming period. This is a challenge for Ireland that is compounded further by Brexit issues. The Commission’s objective was to have the proposals adopted by the co-legislators in spring 2019, prior to European Parliament elections in May. However, this was not possible to achieve. Trilogue discussions between the Council, Parliament and the Commission will not commence until the Council position and Parliament position have been agreed.

The European Parliament’s COMAGRI, Committee on Agriculture and Rural Development, has voted on the three CAP legislative proposals. However, as there was no plenary before the European Parliament rose for the May elections, the Parliament could not formally adopt its position. The Romanian Presidency had been hoping to achieve a partial general approach on the CAP proposals by the end of its EU Presidency. However it downgraded its expectations ahead of the June Council. Instead, it presented a progress report on the work done over the past six months at the Agriculture and Fisheries Council on 18 June in Luxembourg. Discussions will continue under the Finnish Presidency.

Until the position of the newly elected Parliament is known, it is difficult to have a clear timetable for the CAP reform process. Agreement of the MFF post-2020 proposals, which sets out the EU budgetary allocations for the period from 2021 to 2027, is not expected to be achieved until autumn 2019. The Finnish Presidency indicated its ambition to achieve that in the outline of its working programme yesterday. This adds another layer of complexity to reaching agreement on the CAP post-2020 proposals.

We still have some way to go before agreement on the proposals can be achieved. We need to have some idea as to what the final shape of the proposals will be before we can commit ourselves to undertaking the SWOT - strengths, weaknesses, opportunities, threats - analysis and needs assessment required before developing our strategic plan. The Department is continuing to engage, however, with stakeholders through the CAP consultative committee, as well as through regular meetings with key stakeholders. This is a key priority for the Department and will continue to be so until agreement has been reached on the proposals.

I look forward to addressing any questions the members of the committee may have.