Simon Coveney (Cork South Central, Fine Gael)
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As the Deputy knows, a Council position was agreed in March. In Ireland’s role as chairman of the Council of Ministers, we are negotiating with the other institutions to achieve an agreed compromise. There are essentially two major political discussions remaining. One will be an informal meeting in Dublin and the other is the Council of Ministers meeting at the end of June in Luxembourg. Members of the European Parliament and Commissioners will be present at the June meeting, so the three institutions will be represented. We hope, over two or three days, to hammer out a compromise, in which case there will be political agreement on all of the key issues.

If we are successful in that, the second half of the year will be about the Commission turning those political decisions into regulations and law which will be voted on by both the Council of Ministers and the European Parliament in the autumn. The intention is that the process will be finalised by the end of the year. In the meantime, member states will decide on how they will implement the different flexibilities and menu options that are available. Some issues will be mandatory and others not. We will have to design a system that works for Ireland, given all the flexibilities and options available to us. It is about finding the best approach to CAP reform for the next seven years in terms of internal convergence, greening, young farmers, capping and all the other issues. There will be choices to be made and it is our intention to make them in the second half of the year. There will of course be discussions on all the issues.

After a compromise position is agreed, the intention is to leave a full 12 months for member states to prepare for the implementation of the new CAP. New payment models, mapping capacities and software models will be required. Whether the revised distribution system includes new rural development schemes or a revised direct payments model, we must put systems in place that will ensure it can happen efficiently, including putting an inspections regime and so on in place to enforce it. That takes time. Most countries outsource the process to the private sector which requires designing an entire implementation system and takes at least a year.

To summarise, the objective is to have a political decision by the end of June which the Commission will then formulate into regulations and law that will be approved in the autumn by both Parliament and Council, with a view to giving a full 12 months thereafter to member states to prepare for implementation from 1 January 2015. The complication in this is that the budget starts in 2014, which will require some type of carryover measure to extend existing policy, or close to it, through 2014 on the basis of a new and smaller budget. We would then have a full implementation of the new policy direction commencing in 2015. I hope I have set out the position reasonably clearly.

In terms of the menu of options, I expect that flat rates will be a possibility. However, we will have to wait and see what is finalised. Given that some countries already have flat-rate payments, they are certainly likely to hold onto them. They are an option for Ireland if we choose to take it. I do not consider that the best way to go from an Irish perspective, but everybody has their own view on it.

In terms of co-funding of rural development schemes, the latest multi-annual financial framework figures indicate that some €313 million per year will be coming to Ireland under Pillar 2. The Deputy is correct in pointing out that this is a reduction on the current amount and that a large portion of it requires a co-funding element if it is to be drawn down. It is of course our intention to ensure that all funds from Europe are drawn down. I have made that very clear to farming organisations and I do not understand where the confusion arises.