Mr. Paul Savage:

The Senator asked about the position of the budget. I mentioned earlier that the proposal at the moment is for an overall 5% cut in the CAP budget. That affects both direct payments and rural development. We have said that is not acceptable, particularly given, as I mentioned earlier, that we are in the midst of CAP reform which calls for greater climate ambition to be achieved and for greater ambition on the parts of farmers and others to achieve those higher environmental targets. If we are asking people to do more, we should have a CAP budget commensurate with that.

The Department and Minister have been active in getting member state support for the maintenance of the CAP budget as it stands at the moment. We have had initiatives with other member states. For instance, last year we co-signed an initiative in Madrid with Spain and other member states to call again for the maintenance of the CAP budget at its current level. That had built to include the support of 20 member states. We have been actively lobbying on that issue and trying to ensure we try to restore the budget to its current level beyond the time period proposed.

We will have to wait and see what happens with negotiations over the next few months and how that fits with the overall CAP process. The Senator might have seen that, as part of the discussion in June leading up to the adoption of the Presidency's progress report, a number of member states were saying it was too early to go for the partial general approach, which the Presidency was hoping for and much of the argument on that was to do with the fact that we need more clarity on the multi-annual financial framework, MFF, and the budget before we can finalise what we will do on the CAP. Consequently, the timing of the negotiations over the next few months will be important because it will affect the timing of the development of the CAP reform proposals.

On the impact of a hard Brexit, the proposals as they stand simply do not take account of Brexit when it comes to funding. If the UK leaves and takes its net contribution with it, that will create an issue and a hole in the budget for the period beyond that. The question then will be how, and to what extent, we fill that hole. Will it be from member state contributions or cuts from expenditure in other areas? That question will be raised in the context of how the Commission and member states will deal with that. The impact of a hard Brexit would mean, essentially, that this hole would emerge much more quickly than would be the case if there was an orderly Brexit over a period of time. We must wait and see how that process unfolds.

I am not sure what the Senator means by the beef element of the CAP after Mercosur when he speaks about renegotiating it. I would be inclined to focus on the market support measures in the CAP under the Common Market organisation regulation. A suite of measures is available which, as the Senator knows, has recently been deployed in response to the uncertainty created by Brexit and the recent drop in beef prices. Part of the motivation for us to continue that suite of measures under the Common Market organisation, CMO, is to give us the wherewithal to respond to shocks to the system, no matter where they might come from. We can deploy aids to private storage, intervention or exceptional aid in circumstances where that is necessary, if there is a particular market disturbance. The package of market support measures within the CMO is something that we would be happy to have continued in order to have a mechanism to provide support where necessary.

More generally, the Mercosur agreement is not a good outcome for beef farmers here, as the Minister said. We will have to assess where we go from here. It is happening despite the efforts we have made over many years, which have been effective to some degree in trying to mitigate the impact of a potential Mercosur deal on the beef sector.

The Deputy mentioned the definitions of young farmer, genuine farmer and land eligibility. It is hard to say how far we are from finalising it. The definition of young farmers is still under discussion. The process still has some way to go over the next months. Different member states disagree on what they would like to have in the definition. Many member states would be happy with simply having the reference to education requirements that need to be satisfied by young farmers. We would be happy to see more flexibility in order that we potentially could add more criteria if we wish, to try to improve the quality and to get a better return on the kinds of qualified people who are coming into farming. There is still a little to be done on that definition. It is the same for the definition of a genuine farmer. We have made clear our unhappiness about the proposal as it currently stands. We have called for that to be voluntary for member states because we do not think that the current definition is workable. We would like it to be voluntary so that it would be up to us to come up with objective criteria to define a genuine farmer. There is a significant degree of disagreement about where that should go. We will have to see how the technical discussions evolve.

There is a broader issue relating to land eligibility, which is still outstanding in negotiations. Some technical discussion is still required. It is difficult to be certain about the timing of the resolution of the definitions of land eligibility, young farmers or genuine farmers. We will have to continue to input to the process and hope that we can get to a conclusion on those quickly.