Dr. Frank O'Mara:

I thank the committee for the invitation to attend. The Teagasc advisory service offers a wide range of technical and farm business advice to approximately 43,000 farmer clients. These clients subscribe to Teagasc advisory support packages, which include access to a Teagasc adviser for scheme application submission and compliance support across the range of Common Agricultural Policy schemes administered by the Department of Agriculture, Food and the Marine. Advisory support for some of these schemes, such as the basic payment scheme, BPS, is provided within the standard Teagasc advisory contracts, while other schemes, such as ACRES – the agri-climate rural environment scheme - and TAMS - the targeted agricultural modernisation scheme - are supported as services that are additional to the standard client contracts.

With regard to our activity on schemes in 2021, the last calendar year, Teagasc adviser activity totalled the following across a range of schemes in operation during that year: 41,127 BPS applications for 94% of our clients; 751 TAMS applications, with a total of 1,650 dealt with between own advisors and outsourcing; 1,544 results-based environment agri-pilot programme, REAP, applications; 13,000 green, low-carbon, agri-environment scheme, GLAS, applications; 2,285 commonage applications; 11,000 beef data and genomics programme, BDGP, applications; 16,000 beef exceptional aid measure, BEAM, applications; 13,000 beef environmental efficiency programme - suckler, BEEP-S, applications; 62 pearl mussel scheme applications; and 381 hen harrier scheme applications. In addition, we had 754 knowledge transfer groups with 11,808 farmer participants across all regions and farm enterprises.

I will now deal with the importance of schemes to farm income. Teagasc, as part of the national farm survey, reports data on the contribution of direct payments to farm income on an annual basis. Key figures outlining the contribution of direct payments to farm incomes in 2021 include the following figures, which are based on the national farm survey sample data set. The average level of direct payments paid to farmers was €18,219 per farm, or €406 per hectare of utilised agricultural area. Approximately 67% of payments were derived from Pillar 1, which covers the basic payment scheme payments, averaging €12,252 per farm. Approximately 30% of payments on the average farm were derived from Pillar 2 schemes, averaging €5,591 per farm, of which approximately 65% is derived from the areas of natural constraint, ANC, and environmental schemes, with the remainder derived from schemes specific to beef, sheep, forestry and organics.

Participation and average payment rates per participating farm across a range of Pillar 2 schemes in 2021 were as follows: GLAS, 39% of farmers, with an average of €3,990 per farm; BEEP, 32% of farmers, with an average of €1,770 per farm; BDGP, 27% of farmers, with an average of €1,945 per farm; and sheep welfare, 18% of farmers, with average of €1,330 per farm. Overall, the proportion of family farm income, FFI, that came from direct payments was 52% on average across all farms. This equates to total income at farm level derived from subsidies of €1.73 billion. Those most dependent on direct payments as a proportion of the total FFI were sheep - 90% of FFI; beef - 92% of FFI; and suckler - 139% of FFI. In addition to the schemes and direct payments I have referenced, TAMS, operating as TAMS 2 since 2015, has provided in excess of €344 million of funding to farmers since 2015. Approximately 50,000 farmers have applied for funding during this period.

I now turn to schemes in the CAP strategic plan for 2023-27. The new cycle of CAP schemes, as laid out in Ireland’s CAP strategic plan, CSP, will give rise to a number of changes in the availability, structure and funding available under schemes from 2023 onwards. These include a redesign of the structure of Pillar 1 funding - formerly basic payment scheme and associated payments - within the basic income support for sustainability, BISS, complementary income support for young farmers, CISYF, complementary redistributive income support for sustainability, CRISS, and eco-scheme interventions. Supports for protein aid and sectoral interventions for the horticulture and apiculture sectors are also included under Pillar 1.

Among the Pillar 2 changes within the CSP is the continued movement or convergence towards equal payment rates per eligible hectare across all farms receiving Pillar 1 direct payments.

This will result in an adjustment in Pillar 1 payments on every farm. The changes will impact most positively on farms with historically low levels of entitlement values, and on farms of a smaller area. The largest negative impacts are on physically large farms with historically high entitlement values that are dependent on Pillar 1 payments for family farm income.

Large intensive beef farms will be most negatively affected because they tend to have entitlement values that are currently above average levels per hectare and are on average highly dependent on Pillar 1 payments for their family farm income. While large intensive dairy farms will also lose direct payment support under the CAP strategic plan, because these farms have lower dependence on direct payments as a proportion of overall family farm income, the proportionate impacts on incomes will be much smaller.

Tillage farms generally have entitlement values per hectare that are greater than the average. These farms will also generally see direct payments decline due to the continuation of the convergence process. A total of 16 interventions have been announced under Pillar 2 across a range of environmental, organics, on-farm efficiency and investment themes. The most significant scheme in terms of overall funding and advisory input will be ACRES, with a value of €1.5 billion, which has already opened for applications in autumn 2022. There is also expected to be high demand for the following schemes: organics at €256 million, sucklers at €260 million, sheep at €100 million, dairy beef at €25 million and straw incorporation at €50 million, as well as the on-farm capital investment scheme. Some €100 million will come from the CAP strategic plan for capital investment schemes but the total in that is €450 million. For the knowledge transfer groups, €71 million has been allocated.

Teagasc anticipates strong demand from clients to support accessing these schemes and is currently engaged in an intensive period of application, preparation and submissions for the first tranche of ACRES. Teagasc has, following sanction that was received from the Department, recruited an additional 73 short-term contract advisory staff to support work required within the current application window of ACRES. However, as the new CAP schemes, namely, the aforementioned BISS, CISYF, CRISS and the Pillar 1 eco-scheme, come on stream in parallel to the annual support work required for ACRES, the Teagasc advisory resources will continue to be stretched in the delivery of support to clients. Teagasc has also increased the support available to prospective organics applicants through the provision of six additional advisers and two additional specialists who are currently being put in place.