Éamon Ó Cuív (Galway West, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

I thank the Secretary General for a comprehensive overview. There are some issues on which I can agree with him. I asked the Minister about pillar 2 today. In view of the huge uncertainty with pillar 2 a farmer will add up his payments and compare them with what he used to get. We have seen how vulnerable pillar 2 is to national changes as well as European Union changes. It is vital that nothing is signed off on pillar 1 until pillar 2 is ready for signing off at the same time; in other words, the farmer needs to see the whole package and half packages will not suffice.

Many statements have been made on the approximation measure as opposed to Commissioner Ciolos's proposal. Statements have been made to the effect that those who receive large single payments are, by definition, more productive per hectare of land. I would appreciate if the Secretary General could provide direct evidence of the link between the size of the single payment and the productiveness per hectare of the farmer, taking into account the quality of the land. There is no point in comparing a farmer on poor land with a farmer on good land in terms of production. I hope the evidence can be provided because from my knowledge of farmers it is fair to say that most farm the land according to the potential of the land, provided they are in good health, young and able to do so. I learned one sharp lesson when I went to the west. I was managing a hill farm of 1,000 acres and had great ideas about reclaiming the land, getting rid of ferns, draining it and so on. I employed a Kerryman, a graduate in soil science, as manager of the farm. After about a year he told me I was wasting my time and that the more money I put in the more I would lose. He also said that the local farmers had figured out how to get the best return on their land. Over-intensifying would not solve the problem but would cost money and not make money. How right he was. The farmers knew they had to farm extensively rather than intensively on the type of land they had. It was their land, their livelihood, and the place where they were born. In examining the productivity of land one must take into account the land in question as well as the farmer.

Unless one is a Deputy, most people if they are paid €50,000 in a year before going to work would not have the incentive to work. They might be inclined to say they do not have to work and if they have €100,000 all the better. They would not push themselves because this payment will continue rolling in the door before they do anything and would just toddle along on a minimalist basis. It appears that a high single payment is a disincentive to production. That leads to the next big question. If production, without the single payment, is a loss-making exercise, the farmers with the greatest losses from the actual farming enterprise would be the most intensive farmers. If, on the other hand, farming without the single payment in a good farming situation is a profitable exercise, those who have a large single payment and a large productive farm benefit on the double. They receive the large single payment, the kick-in payment, irrespective of whether they farm and they derive a large profit from the farming exercise. If all farming, even on productive land, is losing money then there is a huge incentive not to farm. Farmers are generous and fine people but the logic of farming from a money point of view is that the more one farms the less money one will make does not make any sense to farmers who have kept detailed accounts. I am sure that is what they are doing because farmers are not fools. The catchcries of active and productive farmers do not stand up. I see no justification for paying anybody a single payment of more than €50,000 or more than €500 per hectare.

I have considerable sympathy for the small intensive farmer who receives a small single payment. Some 70% of farmers have a single payment of less than €10,000, 90% have less than €25,000. I am not saying that 90% are not farmers or are not productive. Somebody said recently that 40% of the cattle for fattening are produced in Connacht. An option that should be explored is a national ceiling in respect of the amount of single payment. The sum of €100,000 which is paid to 800 farmers is much too high. That is a joke. It will have to be reduced to a much lower level. According to the Secretary General's figures if it was reduced to a maximum of €50,000 there would be a saving of €50 million. The saving could be greater because 90% of farmers receive less than €25,000. An idea that could be examined to help the intensive small farmer would be to frontload the first 20 hectares, approximately 50 acres, by means of a higher payment and after that surely he would make a profit on the rest of the farm.

I do not know where the Department got the idea that it was speaking for the people. I know the IFA favoured this approach but there are many people who are not members of the IFA. Many IFA members have approached me, particularly from Senator Comiskey's and Senator O'Keeffe's counties, asking that I tell the leadership of the IFA that it does not represent them in respect of the proposal it put forward. I do not accept the proposal put forward. It is a continuation of the status quo. In a parliamentary question I have asked the Department for an approximate breakdown of the people who receive the large payments. I do not believe, for example, that it is pure dairy farmers who received the large payments but in many cases that it was the people who were buying the calves from the dairy farmers who are getting slaughter premiums. I believe it was beef farmers who got very large compensation, in other words, certain sectors.

The single payment farmers receive now does not relate to farming activity at the time but to the grants paid to certain sectors and not paid to other sectors. A pure dairy farmer who did not raise his own calves but sold them on did not do well out of the single payment. However, a beef farmer who bought calves, finished them, and got the slaughter premium in the reference years, did extremely well out of this arrangement. I do not believe there is a relationship between the historic payment in 2002 and activity; some farmers had much activity but received little payment. What the Secretary General is proposing is to continue history. That means that the farmer who was 40 years of age in 2002 will be heading for 60 in 2020, the farmer who was 50 years of age will be heading for 70, and the farmer who was 60 will be heading for 80 if he is still alive. That the position in 2002 somehow translates linearly to the future and that things do not change dramatically in 20 years is a crazy notion with which the Commissioner was right to try to break the link.

I have major problems with the Minister's approach. I know Mr. Moran's role is to do whatever the Minister has laid down for us - I am not trying to tie him to policy because he must adhere to the political decision - but we have a big problem in this regard. The DS payments are €88 per hectare, but we must examine two aspects, the first of which is that there should be a relationship between the DS payment and the disadvantaged areas payment. There is no such relationship. A hill farmer receives €99 for land that in some cases holds one mountain ewe to the acre - that is what the Department rules tells us we can keep - but for a low land farmer the figure is in excess of five ewes to the acre. One can see the relative productivity levels, yet the Department is paying them virtually the same disadvantaged areas payment. We cannot discuss Pillar 1 without discussing Pillar 2. For example, if there was to be a disadvantaged areas payment, with no acreage limits, of say, €400 a hectare in mountain areas, it would change the game.

The Minister and the big farming organisations throw up their hands in horror at the idea of a ceiling on the single payment. It is welcome that everybody can agree that the payments of most benefit to extensive farmers in the west from County Kerry to County Donegal all have acreage limits, including the DS and REPS payments. If it is sauce for the goose, it should be sauce for the gander. If one set of payments has acreage limits, I cannot understand the reason others do not. If the others are not to have acreage limits, none of them should because otherwise there would be no equity.