Mr. Colm Hayes:

I welcome the opportunity to update the joint committees on the CAP post-2020 negotiating process. As mentioned, we are before two committees today and I am joined by colleagues from the Department of Rural and Community Development who have overall responsibility for the implementation of LEADER under the rural development programme.

Our last engagement with the agriculture committee was in June of last year, when we updated it on the Common Agricultural Policy legislative proposals after 2020 which had only been published. At that time the negotiation process was still in the very early stages with just one discussion having taken place at the Council of Agriculture Ministers. Since then the negotiations process has advanced under the leadership of the Austrian Presidency of the EU. The main focus of the Austrian Presidency was on the issues concerning governance and the operation of the new model. While the key changes have been considered in these discussions so far, decisions on those have yet to be finalised. I will return to those aspects later.

My intention today is to provide both committees with an overview of the CAP post-2020 negotiation process, in particular highlighting the key issues that are important for Ireland. I will also set out the indicative timing of the proposals as well as where we are currently with the funding of the next CAP. There are two main factors which militate against providing more details today on the design of our national CAP strategic plan and the individual schemes, namely, that the relevant regulations are some way off being agreed at EU level and the budget to fund the next CAP is not yet finalised.

Before we discuss the negotiations on the new CAP, I take this opportunity to inform the committee on the implementation of the current rural development programme, RDP, including LEADER. The agriculture committee was last updated on RDP expenditure in June of last year by the Minister, Deputy Creed, when he presented the review of spending under the current rural development programme. This review demonstrated that the programme is on target to spend all funds and this remains the situation. We are currently updating the review to take account of final 2018 expenditure on individual schemes, but we do not expect significant change to the macro-expenditure figure.

Delivering on such a diverse programme is, of course, challenging. I am delighted to say Ireland is performing very well in this regard. Our drawdown of EU funds at 55% is well above the EU average for other member states, which is just over 36%. We are second only to Finland in drawing down funds. Our reputation in Europe over many years is to leave no euro behind and I am confident this will continue under the current RDP.

The LEADER programme is delivered by our colleagues in the Department of Rural and Community Development. Representatives from that Department are here today and are available to answer any questions the committee members may have on that programme. LEADER is an important part of the overall rural development programme and a total of €250 million has been committed under LEADER up to 2020.

Activity under the LEADER programme increased considerably over the course of 2018 and a further increase in activity is anticipated during this year. At the end of 2018, almost 1,600 projects, to a value of €54.6 million, had been approved under LEADER, and a further 349 projects, with a value of €21.7 million, were in an earlier stage of the approvals process.

By comparison, fewer than 600 projects had been approved at the end of 2017, so the increase in the level of project activity is evident. The LEADER programme will also form an important part of the next rural development programme, RDP, because the Commission's draft regulations propose that a minimum of 5% of the RDP will be allocated to LEADER interventions.

I will now move on to the negotiations of the current Common Agricultural Policy, CAP, legislative proposals. I am conscious that a lot of discussion has taken place on these long and detailed proposals during the past six months or so. It is in that context that what I present is very much a summary of the negotiation process to date. However, I am happy to have a more detailed discussion afterwards with committee members.

Since the legislative proposals were launched on 1 June last year, 25 EU working group meetings have been held under the Austrian Presidency of the EU. EU Agriculture Ministers also discussed the proposals at each of their Council meetings during the Austrian Presidency. Up to the end of December 2018 the CAP strategic plan regulation has been discussed on 12 separate occasions; the financial provisions regulation on nine occasions; and the common organisation of the market regulation on four separate occasions. A first read-through of the proposals was completed by each of the responsible Council working parties. However, all provisions with budgetary implications or of a horizontal nature have been set aside in square brackets pending progress on the multi-annual financial framework, MFF, post-2020 negotiations.

The Austrian Presidency presented several progress reports on each of the draft regulations, three on the CAP strategic plan regulation; one on the financial provisions regulation; and, one on the common organisation of the market regulation. A final progress report, outlining the work undertaken on the three draft proposals, was presented by the Austrian Presidency at the agri-fish Council in December.

In its final progress report, the Austrian Presidency observed that the Council position will only be established on the draft proposals, once its key political and financial elements have been agreed within the MFF post-2020 negotiations.

Work on the draft proposals will continue under the Romanian Presidency. The Romanians have outlined their ambition to achieve a partial general approach on the CAP post-2020 proposals at the June agri-fish Council. We are supportive of this timetable but it is very much dependent on several factors progressing in a timely manner. I will touch on the timing of the proposals later.

I would like to outline some of the key points of concern for Ireland that have arisen during the negotiations to date. The new delivery model and the requirement to prepare a CAP strategic plan, covering Pillar 1 and Pillar 2 expenditure, is perhaps the most significant change for member states to have to contend with in the new proposals. The CAP strategic plan will allow member states the flexibility to design measures that are best suited to their own strategic needs. We have said we are willing to work with the new delivery model and welcome the move to a more strategic performance-based approach. However, preparation of the CAP strategic plan will present a number of challenges and complexities for member states. The current proposals require them to submit their draft CAP strategic plan to the Commission for approval before the deadline of 1 January 2020. The process of developing the draft CAP strategic plan will be complex, involving a strength, weakness, opportunity and threat, SWOT, analysis, a needs assessment, scheme design, ex-ante evaluation including a strategic environmental assessment and an appropriate assessment. The Department is working towards the 1 January 2020 deadline, albeit amidst uncertainty surrounding agreement on the funding for the next CAP and the final decision on the draft regulations.

In recognition of the climate change challenges facing the EU sector, and the European Union's international commitments on climate action, the new CAP proposals outline a greater environmental ambition post-2020. It is expected that 40% of the CAP's overall budget is directed towards climate change action. It is a new departure for member states that they will be required to design a specific climate and environment scheme in Pillar 1. We have supported the increased environmental ambition for the CAP. It is consistent with the Department's Food Wise 2025 strategy in recognising the critical importance of environmental sustainability, giving it equal billing with its developmental objectives, and we have recommended a range of environmental actions. It also continues the work of the Department under the current RDP under schemes such as the green low-carbon agri-environment scheme, GLAS.

From a departmental point of view, we are working with stakeholders and State agencies on the whole area of environmental sustainability. A lot is already being achieved through the current CAP, for example, investment actions such as beef data and genomics programme, BDGP; the recently announced beef environmental efficiency pilot, BEEP, scheme; the targeted agricultural modernisation schemes, TAMS, investments in areas such as low emission slurry technology, and work by both Teagasc and Bord Bia, through research, advisory services and carbon audits. While a lot is already being done, we know there is no easy pass for the agriculture sector when it comes to tackling our climate and environment objectives, and more needs to be done in this space.

The new environmental conditionality provisions set out in the draft proposals will need to be implemented effectively. We believe consideration should be given to the applicability of the additional mandatory requirements under Pillar 1 to particular local conditions or farm types. For example, a farm sustainability tool which is applicable to more intensive farms may have less relevance for small scale, extensive farms. There is also an important balance to be struck between the mandatory baseline established in the eco-scheme under Pillar 1, and the environmental measures in Pillar II. Member states will need to be allowed sufficient flexibility to implement measures under Pillar I that do not set the bar impossibly high for the voluntary schemes under Pillar 2.

Some other areas of concerns for Ireland that will require further consideration and discussion are the capping of direct payments and the definition of the genuine farmer. While the Minister for Agriculture, Food and the Marine, Deputy Creed, has said we are open to the capping of direct payments, we do not agree with the mandatory requirement to deduct salaries and labour as part of this process as we outlined previously to this committee. We believe it will create an unnecessary and significant administrative burden on member states that goes against the spirit of modernising and simplifying the CAP. The mandatory requirement for member states to define the 'genuine farmer' in their CAP strategic plan is something we also have a difficulty with due to the nature of the proposed definition. The Department will be considering this in more detail in the coming months.

Moving to the budget for the new CAP, as the committees know the MFF post-2020 negotiations are continuing in parallel with the CAP post-2020 negotiations. We know there are diverging views among member states when it comes to how the funding under the next MFF is allocated. The proposed 5% cut to the CAP budget is unacceptable for Ireland and we are seeking a restoration of these cuts. However, negotiations for the next MFF are the responsibility of finance Ministers and Heads of State and Government, and ultimately, the allocations under the next MFF will be determined by them. Protecting the CAP budget in the next MFF is a priority for Ireland.

The Commission's objective is to have the CAP legislative proposals adopted by the co-legislators in the spring, prior to the European parliamentary elections in May. This is a challenging timescale but we are fully supportive and are fully engaged in the negotiation process in an effort to achieve this objective. The main steps required are a partial general approach agreed on the CAP legislative proposals at the agri-fish Council meeting in June and the European Parliament's consideration of the proposals, which is also ongoing. Latest reports indicate that the European Parliament's first reading position on the proposals will be voted through its last plenary of the term in April. Progress on the MFF post-2020 negotiation process will also have an influence on the outcome of the CAP negotiations. Agreement on the MFF post-2020 proposals is not expected to take place until the autumn.

We are still in the middle of the negotiation process and we still have a way to go before agreement on the proposals can be reached. Nonetheless, we are progressing on the basis of having to design and submit our national CAP strategic plan by 1 January next. This will require intensive input and continued engagement with all stakeholders, including these committees over the coming months and will be a top priority for our Department in 2019. I look forward to addressing any questions the members may have.