Mr. Aidan O'Driscoll:

Yes. The key is the determination of what constitutes such an area, and that is where the negotiating is concentrated.

I will make a point regarding our proposals and those of others on internal convergence. Any suggestion that the Irish proposal involved retaining the historic model is simply untrue; it involves a very decisive and significant large move away from historic rates of payment. It is nevertheless not as big or radical as the move proposed by the Commission, which is proposing a flat rate for everybody, regardless of land type, what is being done on the land or environmental benefits. It would be a crude flat rate for everybody. It is true that we do not believe this makes sense and that we have tabled an alternative proposal that involves limiting, to some extent, the level and pace of convergence of payments. It will involve a very significant convergence in payments, with very large increases for those on low payments and significant cuts for those on very high payments, with more moderate raises and cuts for those in the intermediate groups. It is important to understand that. Our proposal, as tabled, provides that this is the minimum to be done. In other words, it creates the space for a member state to use the same methodology but to do more should it wish to do so. We have also tabled a proposal providing for the possibility of a minimum and a maximum payment per hectare as part of that measure. As has been correctly mentioned, the Minister has spoken on the possibility of a minimum being introduced publicly.

With regard to Pillar 2, there were a number of questions from Deputies and Senators on the 15% transfer rate. I do not want to cause undue alarm. This is an optional aspect that has come from the European Council, with the possibility of transferring 15% in either direction. There are some countries that find it very difficult to spend rural development funds, with some completely failing to do so, leaving significant savings. Some of those countries - mainly new member states - want to transfer the money to Pillar 1. In addition, there are older member states that believe Pillar 2 is much more effective than Pillar 1 and want to transfer funds from Pillar 1 to Pillar 2. Both of these have been accommodated within the proposal, which is completely voluntary and for national decision.

Deputies Ferris, Heydon and others raised the question of greening. I am not really in a position to outline our compromise proposals at this stage but they will be tabled in early March. In the initial stages of the greening debate, there was a good deal of talk about what was called a menu approach, giving much flexibility to member states in structuring greening. In the latter stages of the debate, that has been less evident, although there is more talk of introducing some greater flexibility within the Commission's proposal. The three criteria would be retained but applied in a way that is more flexible at a member state level, particularly with regard to equivalence. If there is an agri-environment scheme under the Pillar 2 allocation that delivers the same kind of benefits as greening, the farmer may qualify automatically. That is one way to do it.

Another option is a national certification scheme. This scheme, which would not come under Pillar 1 nor Pillar 2, would deliver at least the same benefits as greening, with the farmer conceivably qualifying under that. This mirrors an aspect of the Commission proposal that has not got much attention, although it creates an interesting precedent. The Commission indicated that organic farmers are automatically green, and member states are expanding that somewhat.

I will not go into the three criteria for greening in detail, as members know them. There is a good deal of work ongoing in making those a bit more flexible. For example, Deputy Barry mentioned the issue of moving land from tillage to permanent pasture, which is an important point from an Irish perspective. The key issue is that the Commission proposed that a permanent pasture requirement should apply at an individual farm level. Ireland and other countries have taken the view that it should apply at a national level, allowing much discretion at individual farm level. I cannot say exactly what will be in our proposals on greening before we table them but members would not be significantly surprised with what may be tabled in the area.

I spoke about flexibility. The issue of beef exports to the US was mentioned. The key factor blocking Irish beef exports to the US is the BSE provision. The US blocks Irish beef from entering the country because of concerns about BSE, although the United States and Ireland have exactly the same status with regard to BSE. The blockage has no merit in our view, and we have been very active in pressing the United States to lift the barrier. Some progress has been made and there is an expectation that what is called the BSE rule might be published this year. We are continuing to exert much pressure to get that done. Members asked about the timeline for the US trade deal, which will take longer. These trade deals sometimes take two years, for example, to negotiate. Nevertheless, we will be pressing the BSE rule issue in advance of that, as it is a key matter.

There was mention of the sentence about ecological focus areas in the European Council conclusions. There is a good deal of discussion about what exactly that means. Deputy Barry mentioned the growing of protein crops. How does one get a farmer to set up an ecological focus area but not reduce production? One idea is to get the farmer to grow crops that fix nitrogen in the soil, if that can be regarded as ecological focus. It has been the Irish position for some time that this should be regarded as ecological focus. There is a question of what can be contained in the greening proposal. The Commission has major concerns that this could be seen as coupling, but we will have to work through that issue.

We hope the plenary session of the European Parliament will give the European Parliament Committee on Agriculture and Rural Development, COMAGRI, a mandate to negotiate in mid-March. That would mean in the trialogue process the Parliament will be represented by the chairman of the agriculture committee, Mr. Paolo De Castro, and individual MEP rapporteurs on the different regulations, Mr. Capoulas Santos, Mr. La Via and Mr. Dantin.

A question was asked about capping and front-loading. If Senator Comiskey means by front-loading what we now call the redistribution of payment or payment on first hectares, which has been sought by a number of member states, it is part of our proposal. I have already dealt with capping, which will be there in some shape or form, although it is not yet clear what exact shape it will be. He also asked if Pillar 2 will have scope for payment on disadvantaged areas, with issues such as animal or suckler cow welfare. The answer is "Yes," and it is again up to a member state to make a national decision on this. Pillar 2 gives much national discretion.

The crisis reserve or emergency funding was also raised. There may be some misunderstanding with regard to the figures, as the crisis reserve will amount to approximately €400 million per year over the entire EU, and the Irish share of that will be approximately €12 million. The members are correct in that it is a rolling allocation and it will be extracted from direct payments and repaid at the end of the year if it is not used. It is not on the scale that was feared.

The reference year issue was mentioned a number of times by Deputy Deering and others. It has been an issue in Ireland but, as I said before, this has not been raised in any other member state. We continue to tell people not to make decisions on the basis of proposals, and I will not go into the proposals again. There is a reference to having had a payment in 2011, and in the Council proposal it has been expanded to having had a payment in either 2010 or 2011. In any case, the issue remains as it was with the change in the Council position. All of this will go to a trialogue negotiation between the Parliament, the Council and the Commission. We again warn people not to assume that what is there is a final outcome. That is the best that can be said.

The young farmer incentive is in the proposals and it is voluntary for member states. The Minister has made it very clear that he intends the incentive to operate in this country. The question was asked as to whether greening brings about extra bureaucracy, and if I am completely honest, the answer must be "Yes". We made a counter-proposal in the very early stages that it would be better to roll greening into cross-compliance and apply this to the whole payment. That would have made things more simple. Ireland and Austria were the only parties to propose that at the time and I can say without a word of a lie that I have been approached by people from a number of countries who have said we were right. The idea did not fly at the time. We are still trying to minimise the amount of extra bureaucracy, and that is very much in our minds in making the proposal. I would be giving an untruth if I said there was no extra bureaucracy. If the extra €100 million had not been allocated, our total allocation for rural development over the seven years in real terms would have been €100 million less. Taking the amount spread over seven years and adjusted for inflation, one gets the additional sum. It was a significant addition in the final lap.

There were a number of references to internal convergence, with Senator Ó Domhnaill touching on the issue. There may be an impression abroad that our proposal favours larger rather than smaller farmers. Considering our proposal and all of the payment categories, including those with low, middle and high payments, farm size is roughly the same in all. It does not favour larger farmers. There are both small and large farmers who would be significantly affected by a major cut in rates. Where a distinction between farmers arises is in stocking rates, as those from whom payments will fall have significantly higher stocking rates; on average, they are double the stocking rates of those on lower payment rates. That is coming from 2010 data.

It is true that the payments are based on historic data but as we all know, things change more slowly in farming. Our data shows very clearly that those on higher payments have significantly higher stocking rates, roughly double the rates of those on low payments. That holds for small and big farmers. The Chairman made a related point and we are trying to ensure there is not an unreasonable cut in the payments for the most active and productive farmers. We are not trying to hit farmers, and that is a misrepresentation of what we are at.

The Chairman referred to other possibilities within the regulation regarding active farmers. The active farmer proposal is limited and within the definition in article 4 of the direct payments regulation is the possibility for a member state, on certain types of land, to impose minimum activity and stocking levels. There was mention of a farmer with no stock who is on very high payments, and that would be an interesting case. I have covered most points but I apologise if I have missed any.