Simon Coveney (Cork South Central, Fine Gael)
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Paper never refused ink. As a former Minister himself, the Deputy knows that I cannot make budgetary commitments three or four years in advance. All I can do is outline my intention and determination to ensure we draw down all available moneys from CAP funds.

Regarding the definition of small farmers, the Council position is that a small farmer is one who is in receipt of a payment of less than €1,000. This definition was designed for other parts of Europe and not so much for Ireland. Deputy Ó Cuív is shaking his head, which suggests to me that he does not know the reasoning behind it, which I am happy to explain. In many countries - Poland, for example - there are hundreds of thousands of farmers with very small holdings, with perhaps only two or three cows and who are in receipt of very small payments.

The idea that they would have to go through an inspections and cross-compliance regime, as a farmer with 200 or 300 hectares would have to, seems like a nonsense from a bureaucratic point of view. So we have said that small farmers who have small payments - the Parliament says €1,500 - would receive them as normal but would not have to go through all the inspections and paperwork that bigger farmers have to go through. The idea is to make it easier to draw down funds without giving them the other added form-filling that larger farmers who draw down larger sums of money are doing.

Once one goes above that, there is an obligation on land owners and farmers to ensure they meet all the requirements because that is what they are being paid for. This is not free money for farmers that is just handed out because we want to keep farm families on the land. Of course that is a reason, but the main function of direct payments is to support the sustainable, safe production of food across the EU, which is why, traditionally and historically, the farmers who produce the most food get the highest payments. That is how payments evolved.

Pillar 2 is about a very different thing. We do strategic things regarding supporting disadvantaged areas and environmental schemes, and we do more targeted things in terms of the money we spend. Pillar 1, or direct payments, is primarily about supporting safe, sustainable food production that looks after everything from cross-compliance to animal husbandry, disease control and all the other things that European consumers rightly demand.

I agree with Deputy Ferris on capping, and I have said that ever since he raised it in the Dáil, but I am not the only decision maker here and I have to represent the Councils' position, which is that after €150,000 you can end payments or phase them out. The Parliament and the Commission have different views. The Commission's proposal was for much higher than that. Some very influential countries in Europe - the UK and Germany in particular - are adamant that under no circumstances will they accept mandatory capping. So we are where we are and we have to try to find a compromise that works. I agree with the Deputy that people who are receiving more than €150,000 of a single farm payment deserve to have a large proportion of that income redistributed and that is what will happen under the Irish model of internal convergence but also under the proposed options that exist for countries to apply a cap.

The idea that this will change all of a sudden, and we will be able to apply a cap of €35,000 on farmers, will not happen under the rules proposed. That would create an unlevel playing pitch across the EU in terms of how food is produced, and that is why countries would not sign up to it. I understand the thinking that people may have who want to distribute this money much more widely by putting a cap of €35,000 on it. That may suit certain regions or counties, and not others, but it would not suit Irish farming as it is structured. It would encourage the fragmentation of land, make it more difficult for farm partnerships to work and there would be a series of other consequences. A much higher cap is easier to defend, but the political reality is that nobody at the table proposes a cap in the region of €35,000 to €50,000. We need to get real on that.

Deputy Ferris asked about convergence and what the final compromise will look like. I am not sure yet. It will be somewhere between what the Commission proposed, and still stands over, which is flat rate payments for everybody, and what Ireland proposed, which has strong support in the Council. The former would redistribute approximately €300 million and the latter would have redistributed approximately €80 million. It will obviously be somewhere higher than €80 million and a lot lower than €300 million. If we are to avoid breaking our country up into different regions, which would be a disaster and very difficult politically to do, we need some redistribution model that does not push everybody to an average payment and in some way manages that distribution. That is the thinking behind the Irish model, which has a lot of support.

We will have to compromise further. I have said that very clearly. We will not hold the position the Council currently has. That will not be the final position. We will have to compromise further because many countries feel that redistribution model does not go far enough and is unfair. We will have to find that compromise and I am very clear on the different thinking on this. Different people are trying to put me under as much pressure as they can, some to hold that model and some to radically change it and I am trying to make a decision that is not about vested interests but about ensuring Irish agriculture can continue to grow and expand and produce more food.