Oireachtas Joint and Select Committees
Wednesday, 9 June 2021
Joint Oireachtas Committee on Agriculture, Food and the Marine
Common Agricultural Policy Negotiations: Discussion
This morning, the committee had a two-hour briefing from Mr. Brendan Gleeson and some of his officials from the Department of Agriculture, Food and the Marine. We are now looking forward to a discussion with the farming organisations. I welcome the following representatives of farming organisations: from the Irish Farmers Association, IFA, Mr. Tim Cullinan, president, and Mr. Tadhg Buckley, director of policy; from the Irish Creamery Milk Suppliers Association, ICMSA, Mr. Pat McCormack, president, and Mr. John Enright, general secretary; from the Irish Cattle and Sheep Farmers Association, ICSA, Mr. Dermot Kelleher, president, and Mr. Eddie Punch, general secretary; from Irish Natura and Hill Farmers Association, INHFA, Mr. Colm O’Donnell, national president, and Mr. Brendan Joyce, national council member; and from Macra na Feirme, Mr. John Keane, president, and Mr. Denis Duggan, CEO. All witnesses are joining remotely and are welcome to the meeting. We have received the witnesses’ opening statements, which have already been circulated to members. All opening statements are published on the Oireachtas website, where they are publicly available. The committee has agreed that each group will be given five minutes in which to present its main points, before we go into questions and answers.
I will read the note on parliamentary privilege. Witnesses are protected by absolute privilege in respect to the evidence they are to give to the committee. However, if they are directed by the committee to cease giving evidence in relation to a particular matter and they continue to do so, they are entitled thereafter only to a qualified privilege in respect of their evidence. They are directed that only evidence connected with the subject matter of these proceedings is to be given. They are asked to respect the parliamentary practice to the effect that, where possible, they should not criticise or make charges against any person, persons or entity by name or in such a way as to make him, her or it identifiable. Participants in the meeting who are in a location outside of the parliamentary precincts are asked to note that the constitutional protections afforded to those participating from within the parliamentary precincts does not extend to them. No clear guidance can be given on whether or to the extent to which their participation is covered by the absolute privilege of statutory nature.
I invite Mr. Cullinan, president of the IFA, to make his opening remarks. He is asked to keep to five minutes.
Mr. Tim Cullinan:
I thank the Chair and committee members for the invitation to address them today at a critical juncture in the negotiations on the Common Agricultural Policy, CAP. I am joined by Mr. Tadhg Buckley, my colleague from the IFA. As we are all aware, negotiations around this CAP reform are at a difficult stage. The talks in Brussels failed to find a resolution in the negotiations two weeks ago.
I will first address eco-schemes and the impact they will have on farmers. This is another way of redistributing funding from farmers. It is a fundamental change. Funding under Pillar 1 will be between 55% and 60% of the original funding, which is a huge cut. Under the current proposal, the national average will be a cut across the board and the new amount available will also be paid based on current national averages. It will be difficult for many farmers to get back the 30% that is being taken out. Any farmer who is farming with high environmental ambitions needs to be funded for that. If the EU has to get more funding to achieve that, so be it because that is what needs to happen. This is another way of flattening the payment.
The IFA has taken a position on convergence. We had extensive convergence in the previous reform when a position was taken that convergence would increase to 75% by 2027. That has been our position on the issue and the Minister took that position at the previous round of negotiations in Brussels. I am referring here to internal convergence. What we are trying to achieve is to keep farmers viable. This is very important with regard to convergence.
Funding from the national Exchequer is going to be important. I am referring to national co-financing. At a minimum, the Government has to fund up to 57% of Pillar 2 funding. We in Ireland have been good at developing schemes. We already have nine schemes in Pillar 2 and 33% of the money is going to environmental measures. To refer back to eco-schemes, given that we have these nine schemes in place, there should be a lesser eco-scheme in Ireland. That is a point worth noting.
On the good agricultural environmental conditions, GAECs, we are especially concerned about GAEC 2 because it has the potential to impact 300,000 ha throughout the country, not just in one area. My understanding is that all the lands that qualified for the basic payment scheme, BPS, under the previous reform will qualify again. Obviously, there is a word of caution around that. However, that is the position at the moment and we sincerely hope that continues.
We also have a proposal on the definition of “genuine farmer”. This is important because we cannot have any leakage from the budget in the current CAP reform. It is essential that all the funding goes towards genuine farmers, those who get up in the morning to do the work, whether it is calving the cow, lambing the ewe or ploughing the fields. This is essential. A farmer should have to show some financial output from the farm, whether on sales or other outputs. That is important.
On long-term leasing, if we want generational renewal, we must look after younger farmers and it is important that lands become available for them. We are looking for a proper mechanism for trading the entitlements of farmers who continue to lease out their entitlements after a two-year period. It could be a trading system or the farmer leasing the entitlements could be given the option to buy them.
The programme for Government includes a clear commitment from all three Government parties that the €1.5 billion from the carbon tax will be ring-fenced for a proper environmental scheme. This is essential. We have to be certain that that money is separate from the funding provided under national co-financing. Having that money available to develop a proper environmental scheme would mean more funding would be available in Pillar 2. We need more targeted payments. We need to get the suckler cow payment up to €300 per cow and the sheep payment up to €30 per ewe.
Another sector that is vulnerable in this reform is tillage. An environmental scheme must be put in place for the tillage sector. I know we have the straw incorporation measure but that needs to evolve and be further developed and a proper scheme is also needed. That is the IFA position. I will be glad to take questions from members of the committee.
Mr. Pat McCormack:
Mr. Enright, our general secretary, and I are delighted to be here. The challenges facing Irish agriculture are unprecedented challenges. In tandem, CAP reform is putting more and more bureaucracy ahead of farmers and EU funding has been cut. We have had various discussions with Department officials - the Chair mentioned names - in autumn 2020 and throughout this year in which they said there was not a cut. However, there is a cut. The reality is that there will be a cut of approximately 2% to the single farm payment this year.
That, in effect, is a cut. Farmers have been asked to do significantly more for less. There is a huge aspiration, from an environmental point of view, to deliver more to the European taxpayer for less. I will go through that in more detail.
I agree with Mr. Cullinan that the definition of "genuine farmer" needs to be addressed. Funding needs to go to the people who work the land, depend on it and keep it in good faith. When we take everything into consideration commercial farmers could face a cut of anything between 40% and 50% to their single farm payment between one or other linear cut and convergence.
Convergence is a pet topic of mine. We represent the family farm structure and much of that structure is on small and medium-sized holdings. The aspiration to flatten the payments and make all people equal under convergence is great. The reality, however, is that will not happen without giving consideration to the overall envelope the farmer has.
We saw in the previous round under convergence that the target was at 75%. Small holdings and efficient holdings - they had to be efficient and have a decent output to exist - suffered substantial losses. I am not talking about people with huge single farm payments but people with single farm payments of between €8,000 and €16,000. They found themselves substantially penalised under convergence. They were infuriated, it is fair to say, when they found out that some of the beneficiaries had multiples of a single farm payment. We need the Minister to continue to hold tough on the 75% figure. We cannot allow it to go any further.
There is a lot of talk among politicians and bureaucrats, at home and in Brussels, that front-loading has the potential to address these issues for farmers. We need to get a strong and deep analysis of that going forward because it may not be the case. We need far more information and research done on front-loading and the beneficiaries.
As regards capping, the ICMSA strongly supports the €60,000 cap, with no frills or ribbons. It is very simple to implement. From a genuine farmer perspective, it is not that long ago that we sat at similar forums, and perhaps the same forum, albeit physically rather than remotely, when we were trying to define the "active farmer". Europe has failed on the active farmer. As a generation of farmers, farm leaders and politicians, we cannot afford to fail as regards the genuine farmer. It is imperative that the genuine farmer is defined and that he or she is the person who is working the land and who needs the support.
In our submission, the ICMSA proposes a minimum stock on density. We are not talking about an over-elaborate measure. In excess of 5,000 farmers are not keeping three cows on 50 acres. How genuine are those farmers? That is very questionable. We need to see some mechanisms put in place to preserve agricultural activity. Where that does not happen, questions need to be asked about the continuation of entitlements and the continuation of benefits under convergence.
Conditionality is a new concept. It is not long since we used to travel to Brussels to meet the then European Commissioner, who happened to be from the island of Ireland. The issue then was simplification. Now, it is about conditionality. We seem to see more and more conditions, by which I mean environmental and various other aspirations as we move forward. With less funding available, and at a time when farmers are becoming the scapegoats for many things in this country, we need to discuss conditionality with the Department in earnest, including its implementation and tolerance of it among the farm organisations. We need to see that around the CAP reform.
Mr. Cullinan alluded to the eco-scheme, which will be cut, potentially, by between 20% or 30%. The likelihood is it will be either 25% or 30%. We saw under greening in the previous round of CAP that if a farmer grew grass, he or she was green. In the same way, we need to have the minimum of implications at farm level for farmers to be involved in an eco-scheme as we move forward. The ICSMA believes that hedgerow management can play a significant part in eco-schemes going forward. The last thing we want is to undermine any environmental scheme that will come through in Pillar 2.
As regards Pillar 2 and interventions, we need to see an agri-environment scheme that is attractive to commercial farmers and all other farmers, with a significant increase in payment. A payment of approximately €10,000 would make it a meaningful scheme. It is absolutely imperative that generational renewal is part of Pillar 2. While we may need to look after our young farmers, the greatest tool to make land available to young farmers is to look after our older farmers. We have seen that in the past with various retirement schemes.
It was extremely disappointing to read the Department's targeted agricultural modernisation scheme, TAMS, proposals, where dairy investment schemes would not be eligible under TAMS moving forward. We talk about environmental aspirations and reducing the energy usage. It is absolutely imperative that these new modern technologies, whether it is electronic milk pumps or efficient cooling systems, are in place.
From a carbon footprint point of view, the dairy calf and beef scheme is the most efficient type of beef production on this island. We need to see the aspirations in the previous budget beefed up under Pillar 2.
While milk prices might be at 34 cent or 35 cent per litre now, we cannot afford to forget the rainy days we had in the past. We need to have emergency price supports in place as we move forward.
Mr. Dermot Kelleher:
I thank the Chairman and members for the opportunity to speak on CAP reform today. The breakdown of talks in Brussels is nothing unusual at this stage of a CAP reform; it is like a dance. They are supposed to be meeting until the last day. The sticking points are around convergence, the eco-scheme and the so-called CRISS, or front-loading. The trilogues are like the bonfire of the vanities, with grandiose ideas about the green deal, a fairer CAP, the farm to fork strategy and the biodiversity strategy. All of these could collapse on their first engagement with reality.
The reality is that the CAP budget is being steadily eroded by inflation. The cake is getting smaller. Farmers are being asked to do more for less. The CAP allows each member state the flexibility to design its own CAP programme but insists on boxing them into a model that does nothing to solve the big-ticket issues. We are still stuck with the contradiction of the 2013 reform, where convergence was meant to help farmers with the biggest income deficiencies but rose to the challenge by taking from the small suckler and sheep farmers with small payments per farm but above the average per hectare. As a result, negotiators at EU level are trying to reach a compromise that will leave nobody happy.
The reason for all this is that, more and more, CAP reform is a process whereby the views of everybody except the farmer are front and centre. EU negotiators are fighting over irrelevancies because they are totally detached from farmers on the ground. Covid has made the process even more detached from farmers and their representatives but this process has been in play for quite some time now. Looking at the eco-scheme battle, there is deadly combat over whether it is 20% or 30% of Pillar 1 when, in fact, nobody is asking how come we lost the old rural environmental protection scheme, REPS, which was a fantastic job for farmers that put real money into their pockets. Nobody who talks about a green deal has the faintest idea of the damage done by land eligibility penalties to farmers who were more biodiverse and environmentally friendly under the second last Minister.
If the EU wants a greener CAP, then reward the farmers who are less intensive and want to participate in a worthwhile agri-environment scheme. The ICSA has proposed that a scheme should have the potential to pay up to €15,000. We have outlined this in previous engagements with the committee, but has anyone been listening? This needs to be targeted at cattle, sheep and tillage farmers, most of whom are not viable or are barely viable. Otherwise, we are sending a signal that anybody who wants to farm must be a dairy farmer. In order for that to work, we need to make the eco-scheme in Pillar 1 relatively straightforward for less intensive farmers who do not require a nitrates derogation. The eco-scheme must not have too many conditions attached, or it will not be possible to pay for many of the actions we would like in a proper agri-environment scheme.
On convergence, the harsh reality is that the EU has shirked its responsibility to make the CAP fit for purpose. The Treaty of Rome aspirations have been thrown into the bin as the budget has been reduced over several reforms. The cake is not getting bigger; it is actually getting smaller. We cannot give more farmers the same worthwhile slice they were getting. It looks like the final outcome will be the lowest payment will have to reach 85% of the average by 2026. This is a noble aspiration, except for the fact that it takes from the already strapped suckler, sheep and beef farmers, especially those with low hectarage and above average payments.
The solution to this proposed by the Commissioner for Agriculture is the complementary redistributive support for sustainability, CRISS. The ICSA favours insulating smaller and medium sized farmers from convergence cuts. We would like to see a system that allocates more support for the first 40 ha. The CRISS is insufficient and it is not funded. Instead, it takes a linear cut from all farmers, which is robbing Peter to pay Paul, and does not do enough. Department modelling suggests that if payments to all farmers are cut by €54 million, an extra €20 per hectare for the first 30 ha can be given. This will not make any worthwhile difference.
In our view, the family sized cattle, sheep or tillage farmer is desperately dependent on CAP supports. This means we cannot ignore the elephant in the room. According to the 2019 Teagasc national farm survey, the average payment from Pillar 1 on a dairy farm was €280 per hectare. A suckler farmer got €240, a beef farmer €290, a sheep farmer €245 and a tillage farmer got €320 per hectare. How can it be fair that a very profitable dairy farm, which is less dependent on CAP subsidies, is getting more per hectare than suckler or sheep farmers on a per hectare basis? Beef and tillage farms are not getting much more; these systems of farming used to get the lion’s share of CAP supports. We have seen the areas of natural constraint, ANC, payments slashed, while more than 20 years ago the old headage payments were targeted at suckler, sheep and beef farms. They were all viable as a result.
It is a very interesting fact that in the year 2000, the average dairy farmer got €5,500 from CAP supports. In 2009, that had increased 400%, fourfold, while suckler, sheep and tillage farmers saw an increase of between 20% and 50%. However, the dismantling of price supports, such as intervention, had a devastating impact on ICSA members. I am asking now, is it fair that dairy farmers, who are investing six figure sums in massive expansion programmes, are getting more money per hectare than suckler, sheep, beef and tillage farmers who are badly in want of it? The national farm survey states direct payments are 120% to 160% of the income of the dry stock cohort compared with 31% dependence for dairy incomes.
The reality is that whatever happens in EU talks over the coming weeks, we have hard decisions to face up to in Ireland. The ICSA is very clear. Like my colleague, Pat McCormack, we think payments should be capped at €60,000, no ifs or buts. The cap should be €60,000. We believe that suckler, sheep, beef and tillage farmers should not be cut per hectare. They should be supported much more through payments linked to their enterprise and also through agri-environmental schemes that are targeted at them.
Mr. Dermot Kelleher:
I am nearly finished. We do not have to see dairy farmers take less if we can guarantee some small and medium farmers, and cattle and sheep farmers, get more. We also have to be realistic and say the CAP is totally inadequate to achieve this. It is vital that: the State fully fulfils its obligations to co-finance the rural development programme; the programme for Government commitment of €1.5 billion in carbon taxes is delivered in addition to co-financing; every possible euro through Covid and Brexit funds is delivered targeting beef and sheep farmers; and the CAP is no longer used as a means to deliver six-figure sums to big businesses and feedlot owners.
Mr. Colm O'Donnell:
I thank the committee and the Chair for inviting the Irish Natura and Hill Farmers Association to be part of this debate. I also welcome members of the joint Oireachtas committee to the hearing. The Common Agricultural Policy has served farmers well since it was set up many years ago, but this reform has got to be the reform that brings fairness to how farmers are supported in future. The three main objectives of the reform are fostering market resilience and a diversified agricultural sector, environmental care and climate action, but perhaps the one we really need to focus on is the basic objective of strengthening the socioeconomic fabric of rural areas. CAP payments are the vehicle to do this, not for a small cohort or for commercial farmers, the likes of Larry Goodman and Sheikh Mohammed bin Rashid Al Maktoum, but for every farmer.
The Minister for Agriculture, Food and the Marine has a duty of care to the approximately 125,000 farmers who are recipients and beneficiaries of payments. Payments were established based on what was going on from 2000 to 2002, which is 20 or so years ago now. The European Commission recommendations to Ireland, as a member state, indicated it is time to continue with the convergence model and move towards a full flattening of payments per hectare. That is 100% the position of the Irish Natura and Hill Farmers Association regarding convergence. I ask members at today's hearing not to forget that Ireland has enjoyed, because of external convergence, no cut to the overall budget. That is because 60% of farmers in this country are on payments less than the national average. In fact, half of them are on payments of less than €200 per hectare. It is a myth that the most productive and commercially-based farms are those with the highest historical payments.
Figures from the Department of Agriculture, Food and the Marine show the most productive farms are those in receipt of payments of between €200 and €300 per hectare, which is approximately the Irish average. There is a duty of care for members, as legislators, to ensure we get fairness in this CAP reform.
The eco-scheme has been mentioned by some of the previous contributors. Internal convergence and the way greening was administered did a rank injustice to farmers. At the start of the previous reform, greening for one farmer meant a payment of €30 per hectare and a payment of €300 per hectare for another farmer for carrying out the same measure, that is, the retention of permanent grassland. In 2019, one farmer could receive €48 per hectare and another farmer, possibly next door, could be on €210 per hectare for carrying out the same measure, namely, the retention of permanent grassland. Why pay one farmer €162 more than the other for carrying out the same measure? This is why the eco-scheme has to be fair. It has to be a level playing field. We must have suitable actions for all types of farms and enterprises and a legitimate expectation that all those farmers will get a uniform payment, per hectare, for carrying out similar environmental and climate objectives. It would be a travesty if this House adopted any other course of action.
The front-loading of payments was part of the reason the current CAP trilogue negotiations broke down. The Irish Natura and Hill Farmers Association is strongly advocating for front-loading to be included because, some would say, some farmers will lose due to having a high payment per hectare on a small number of hectares. This is the vehicle to ensure they get a front-loaded payment. It is a complementary redistribution income support for sustainability.
If we have a capping, as some of the other farm leaders have spoken about, of €60,000 to any one recipient with no account for labour units, €22 million would be available to target the complementary redistributive income support for sustainability, or CRISS, payment. This will incubate and cushion any farmer who may be exposed to internal convergence.
On the viability of commercial farms or those representing commercial farming, what about the other 66% of farms which are not viable? Let us not forget, viable farms are farms which can support a labour unit. Those enterprises are doing well and have traditionally done well given that they can pay a labour unit. The other 66% of the farms the length and breadth of rural Ireland are vulnerable, do not have enough farm income and cannot support a labour unit. Then we have sustainable farms which must have an off-farm income to help with their farm income if they are to remain viable family farms.
I thank the Chairman for the time he has given.
Mr. John Keane:
I thank the committee for inviting Macra na Feirme to today's meeting. It is refreshing to hear some of the comments from farmers and, from my point of view, the perspective of young farmers on issues, especially on CAP, in the context of the challenges which faced our sector in terms of CAP and the potential future impact of the climate action Bill, the farm-to-fork strategy and how they could impact on future pathways for young people and farmers into our sector. It is against that background and in that context that Macra na Feirme is firmly behind the following proposals and statements.
On CAP, over the past 25 or 30 years, we have had many promises on generation renewal and supports for young farmers. Now more than ever, we, as young farmers, need policies which deliver real and positive impact for our sector. With the number of farmers under the age of 35 now at less than 5%, fundamental change is needed to ensure the long-term survival of our sector and that the sector flourishes and embraces and practises the changes which are needed.
We have an opportunity in this CAP to go beyond the promises made in previous reforms to deliver targeted supports which will make a positive impact in terms of young farmers entering farming and our commitments on the environment and change. Young farmers have always been at the forefront of driving and embracing change, be it practices on farms or embracing technologies. The elevating of generation renewal to one of the nine key objectives under these CAP proposals is a clear signal from the Commission to member states that supports targeted at young farmers must be a key priority and merely maintaining the status quo will not be enough to deliver on what is required to improve and encourage generation renewal.
Under the schemes introduced in 2014, Macra na Feirme welcomes the introduction of both the young farmer top-up and the national reserve. Continuation of these is crucially important, but a continuation of a fully funded and committed national reserve for the period of this CAP must be at the forefront of the measures to encourage generation renewal.
Macra na Feirme, along with its partners in Europe, the European Council of Young Farmers, CEJA, fundamentally supports the position that 4% of direct payments from Pillar 1 must be ring-fenced for young farmers and young farmer access. We have seen 2% ring-fenced for this purpose under the current CAP, but it is felt 4% must be ring-fenced for young farmers to ensure they are supported and aided. The interventions which fit under that 4% must support the business of young farmers. We have heard mooted at European level tying supports for organic and other schemes into young farmer schemes is a possibility. Not all young farmers will be able to access or use these schemes. That intervention and similar interventions which will not directly impact young farmers cannot be supported out of the 4% aligned for young farmers under Pillar 1 payments.
We have also briefly spoken about the commitment that there be no backsliding on the contribution for young farmers, both on Pillar 1 and Pillar 2 payments. Of the supports under the current CAP, approximately 6% is ring-fenced for young farmers between Pillar 1 and Pillar 2 payments. It must be ensured that there is no backsliding by Ireland and other member states on that commitment at the upcoming negotiations.
The supports under TAMS were touched on briefly. The maximum investment upper limit of 80% is being talked about. That must also be secured. We have seen how young farmers have responded under TAMS, given that €186 million has been spent by young farmers and contributed under that scheme. That must be continued over the course of the next CAP.
Macra na Feirme sees and looks for flexibility in the five-year rule in the definition of young farmers. We have seen many young farmers who take over the farming enterprise at 20, 21 or 22 years of age no longer meet the criteria for young farmers when they are 26, 27 or 28 years old. I am not sure whether anyone could conclude that is a reasonable or appropriate place for us to be. Maximum flexibility must be outlined for young farmers and the five-year rule, both in terms of access to investments and to national reserve and top-up payments.
What ties into that is the commitment for the forgotten farmers from 2008 and 2009 who fell through the cracks in the previous negotiations.
We welcome the commitment of the Minister for Agriculture, Food and the Marine, Deputy McConalogue, not to forget those farmers in the current CAP negotiations. There is ample opportunity to make provision for them in this CAP reform.
On the current position regarding generational renewal and the elevating of the key priorities, the position on financing schemes such as a succession or land mobility scheme has not been ascertained under the national CAP strategic plan. This is hugely disappointing from our point of view given that land mobility was directly called out by the Commission in its proposals under the current CAP.
We need to ensure fairness for young farmers and the older demographic in the Pillar 1 payments. This also applies to Pillar 2 payments and succession schemes, which must deliver for young and older farmers. As previous speakers touched on, these much be financed and access to land for young farmers taking over should be encouraged.
The definition of a genuine and active farmer must be robust and must deliver on the promises that have been made. Supports must be delivered to the farmers who are farming actively on the ground, who are getting up in the morning and doing the work. It is no longer acceptable to simply direct payments to guys who are not farming on the ground. Supports must be targeted at ensuring farmers who do the work on the ground, day in and day out, have access to payments. The Minister also needs to hold strong on the 75% convergence and ensure smaller holdings are not unduly impacted.
To summarise, young farmers need real delivery under the current CAP proposals. Generation renewal needs to be provided for and we need to provide a future for the young farmers who are currently engaged in farming. Those thinking of entering farming in the coming years need to see a clear pathway as they move forward.
I thank Mr. Keane. Our five witnesses provided comprehensive statements on behalf of the members they represent. If members wish to direct questions to a specific witness, that is fine but if all witnesses respond to every question, it will be difficult for all members to contribute.
I welcome all of witnesses. The organisations they represent have come through a lot of issues with us over the years. I will keep my contribution brief because I am aware that other members wish to contribute. I mentioned to the Department a while ago that 40% of farmers receive less than 5% in direct payments, with 8% receiving less than €1,500. I will not name individual farmers but I have a list here showing that some are receiving single farm payments of €300,000, €250,000 and €220,000. The Department has indicated that reducing payments to these guys would not make a hell of a big change for the guy on €3,000, €4,000 or €5,000. At the same time, it sends a very negative message when some people get payments of €200,000 or €300,000, while other farmers with sizeable lands, perhaps hill land or land obtained at a bad time, are not even getting €5,000. That is the bottom line.
I will direct two questions to Mr. Dermot Kelleher of the ICSA. The early retirement scheme is very important, as are other issues, but is it fair that a farmer with a dairy herd of 300, 500 or up to 1,000 cows would get the same payment per hectare as a suckler or sheep farmer? The second question is for Mr. Kelleher or anyone else. What is the best use of rural development programme, RDP, funds in this context?
Mr. Dermot Kelleher:
I thank Deputy Collins for his questions. A per hectare payment is one thing but the issue is the number of hectares. Many suckler and sheep farmers have 40 ha or less. This is why they were all taken down in approximation. The guy with 300, 500 or 1,000 cows also had plenty of hectares and his cheque is huge. Per hectare does not really matter. Consider what happened the last time with the ordinary sheep or suckler farmer. Deputy Eamon Ó Cuív proved this years ago when he did the work. The average dry-stock farmer in a disadvantaged area has under 40 ha. The majority of small farms in the western half of the country, although not all of them, are around 40 ha. If the number of hectares is the qualification criterion, the farmer with 40 ha who is drawing between €10,000 and €12,000 per year would be taken down because of convergence. It would be lunacy. It would bring the farmer on a payment of €100,000 down by €5,000 or €6,000 but it would bring a lad on €11,000 down to €9,000. It would kill him altogether. I know farmers whose payments were reduced from €11,000 to the €9,000. They had 40 cows and were working hard. They were above the national average. That is scandalous when there are big farmers and industrial farmers making big money.
As for the second question, the most appropriate way to use the rural development budget would be to have a good scheme that would deliver payments of €15,000 under a REPS and higher payments under the suckler, sheep, beef data and genomics programme schemes and beef schemes. The view that no one but a few big lads are viable is not the truth. In truth, most lads are managing, getting bits of farm income and working hard. Over the years, payments to small farmers have been cut and we have been kicked to touch. I hope this answers the Deputy's question.
I thank the farmer representative bodies for coming in. I have a few points I want to make, and one single question that is not from me but from a group of farmers in the west. When I said I was meeting the boys here - and they are all boys, I did not mean that as a pun - I said I would put their question to the committee.
This morning, the committee had a very good engagement with officials from the Department of Agriculture, Food and the Marine. While we talked about the issues around the ecosystem, there was very little debate about the social dimension of this CAP. I want to raise this with the witnesses because it is very important. From communication and engagements with the European Parliament and the negotiating teams, it is clear there will not be a compromise on the social dimension in the CAP. When we refer to a social dimension we mean employment law and so on. It is very important that the farmer representative bodies are aware of this and keep their eye on the ball. The witnesses might share with us some of their views on that.
There is another issue I am particularly interested in, and I will direct this question to the Irish Natura and Hill Farmers Association. An article in the Irish Farmers Journallast weekend touched on the INHFA's campaign on the farm retirement scheme and Natura payments under CAP. I am aware that we are restricted for time but perhaps the witnesses could flesh that out a little bit because it is very important.
On the CAP negotiations generally, the challenge will be to align sustainable farming with EU climate ambitions. That is the nub of the issue and the difficulty. We know the CAP negotiators must cut a deal. Let us be honest. A deal will be cut and it is important that we advocate for equality and safeguards for our economic and environmental performance.
My question was suggested to me by a group of farmers from the west. Consider, for example, a farm with 20 cattle on approximately 40 acres or about 16 ha. A number of farmers in Ireland solely outwinter their cattle, are not overstocked and do not put out slurry or chemical fertiliser. I emphasise that point and that these places do exist. Will it be permissible for such farmers to outwinter their stock in ring feeders, for example, with hay or silage? We know that with cross-compliance checks this has not been permitted. There are farmers who are successfully operating very sustainable smallholdings and supplementing other income. We are going to see cross-compliance checks, including with regard to the social dimension. I ask this question on behalf of that group of farmers.
Will that be permitted under the new CAP arrangements? Will the prohibition be lifted? These farmers are not putting slurry on the ground and they have relatively good land. They have been successfully farming and outwintering cattle all year around. They have very few veterinary interventions. These are successful, sustainable and small-time farmers. How can they be assured that they can continue to operate? I would like Mr. O'Donnell to respond because that is an important issue.
I want to refocus. I take on board the message the witnesses have given us and the points they have made. I ask the representatives of the INHFA to address those two critical points.
Mr. Colm O'Donnell:
Generational renewal is massively important going forward. It has been clear for some time that land mobility and having access to land is a major problem in this country. I mention the way we farm these areas in parts of rural Ireland where there is a successor. The retiring family needs some source of income in order to hand over the land where there is an heir within the family model. I benefited when our family was being reared. My father and mother handed the place over to me at a time when they could benefit from the early farm retirement scheme that was in place then and that brought them up to the old age pension rate.
We have incentives in place, such as the young farmers scheme and possibly TAMS, for young farmers but we must also look at the other side and enabling the retiring farmer to retire with dignity. When my father handed the farm over to me, he could not help me. It was part of the terms and conditions of the scheme and if he was found standing in a gap, he would lose his payment. This was ridiculous and is something we should learn from. The amount of acquired knowledge that my father was in a position to hand over to me should be something that is nurtured and incentivised in any succession model. That is what we are looking for. The Government and Department should look, on a limited basis, at the instances where there is a successor to continue that tradition of farm family succession.
The second point was on the Natura payment. We were referring to the need to ensure there is an action for designated land in an environmental scheme in Pillar 2. Also, there is potentially a need for this as an incentive and an entry level requirement in the eco-scheme for farms with designated land that have additional costs, State-enforced costs and 38 notifiable actions with which they have to comply. Those farms are carrying the burden for this State on the 14% of land that is designated. That is a small number of farmers and we have the ability, in this CAP reform, to support them and ensure the lands with the highest biodiversity in Europe are looked after.
Mr. Pat McCormack:
Deputy Michael Collins asked about the dairyman with 300, 500, 700 or 800 cows. There are a number of such farmers but the reality is that the average dairy herd in the country is probably much closer to 80 than it is to 100. There are a lot of full-time - and I say this in earnest - commercial farmers with 50, 60 or 70 dairy cows who lost out substantially in the last round of convergence and who have the potential to lose yet again. Is that right when the beneficiary could be a landowner with an off-farm job earning in excess of €200,000? If one goes to Ornua or Bord Bia and sits around the table, they market our dairy and beef products on the family farm structure and model. If we are to be serious about that model, it has to be protected under all aspects of CAP reform, particularly under convergence. The claim to represent farmers was also mentioned by others but the reality is that there are a lot of efficient small to medium-sized dairy farmers out there who took a hell of a hit the last time around.
If Senator Boyhan was asking the question about ring-feeders, he should have asked it when Mr. Brendan Gleeson and other Department officials were before the committee this morning because it is his team that goes out, patrols farm and decides whether farmers are compliant and have to take a financial hit.
Mr. Tim Cullinan:
I will comment on how the funds are distributed. If we look within the EU, 80% of the money goes to 20% of the recipients. In Ireland, 56% of the money goes to 20% of the recipients so we have a far fairer way of distributing the funding here. We all know there are concerns and issues around that and the issue can be divisive.
This is a fundamental change we are all going through and there are two points to make on it. We have the green deal, biodiversity, the farm-to-fork strategy and all of that. Those measures are fine and we all want to support measures around climate change, as farmers have been doing for years, particularly in taking methane out of the atmosphere and into our hedgerows, grasslands and trees. That has been done and we need a proper measurement of that. That is one point.
We also need a fairer distribution of the money. We all understand that is what we need to do. However, the funding has changed from farmers being rewarded for producing good quality food to carry out environmental measures. What has happened is we have had a massive reduction in the budget from 50% of the multi-annual financial framework, MFF, a number of years ago to 30% of the MFF now. This is the fundamental problem we have. There is not enough money coming in and it is difficult for us as leaders and farmers. The Government needs to ensure we get the maximum co-financing. Other speakers mentioned the €1.5 billion. This funding has to be directed at farmers and the Government has a responsibility to do this.
Senator Boyhan mentioned employment law and that was not picked up. That is something that is in the social aspect of this reform as well. It is about conditions around people being employed on farms. We have the Workplace Relations Commission, WRC, which deals with that and we also have the Health and Safety Authority. It is not as big an issue in Ireland as it is across the EU and there is regulation around that already. We do not want double regulation coming off this reform.
I want to come back on a number of points. First, I asked a question that farmers from the west posed and I did not get an answer. This is not a politician's question; these are farmers' questions. A small farmer related a simple scenario involving a farm of 40 acres and I am going to tell him I could not get an answer, so that is of concern to me.
Second, on the social dimension, I share Mr. Cullinan's views and I articulated them this morning. I am not suggesting further layers be added. I totally agree with Mr. Cullinan. However, the issue is not discussed anywhere in the papers before us today, nor was it mentioned by any of the farm representative groups. I am deeply concerned by that. I raised the matter with the Department and it has agreed to provide a paper or two on it. The reality is that from the documentation we have seen, this is going to be an issue. It is an issue and, therefore, it is important that we prepare for it because this is the social dimension. We talk about the eco dimension but there is a social dimension also. I fully agree with Mr. Cullinan. We are not at loggerheads and I will continue to support him in all of that.
I want to go to back to this issue, although I know other members want to contribute.
I posed the scenario of 20 cattle on approximately 40 acres. The farmer is sustainable, is not using veterinary medicines and has been very successful. One farmer is 16 years at it and is making a living, so it can be done. It is not overgrazing, but feeding all year round. The land sustains that. There is no seepage, no silage and no fertiliser. It is, effectively, organic farming without organic certification. Who is supporting them? Will they be allowed to continue to operate the way they have successfully operated, as I think they should be, in a very old, organic and holistic way?
I thank all our guests for attending. I give a special welcome to Mr. Keane. This is his first meeting in his capacity as president of Macra na Feirme and I wish him the best.
I have two questions and if the witnesses have time to touch on them over the course of the meeting, it would be great. Otherwise, there can be written responses afterwards. First, we heard Mr. Keane speak about Macra na Feirme's proposals for supporting newer and younger entrants into the sector. Could the other organisations articulate if they have proposals to do that? The second question relates to the debate about the genuine farmer. Do the organisations have definitions of a "genuine" farmer? That might be helpful to the committee in its future deliberations. For example, is the definition in terms of stocking rates that is in place for the areas of natural constraint, ANC, scheme a sufficient barometer in that regard?
On the substance of what we are discussing here, which is essentially the distribution of CAP funds, my view, and I am interested to hear if the organisations share this view, is that the fundamental problem we have is the EU budget itself. I believe all the organisations and their members were sold out. The Government agreed to a fundamentally bad deal that saw the proportion allocated to CAP reduced from 37% to 30% of the overall budget. At the same time, we will contribute billions of euro more in net terms to that EU budget. Do the witnesses accept that therein lies the fundamental problem?
With regard to the issues in respect of redistribution measures, I am struck by a line in the opening statement from the ICMSA. It says: "Basing a policy on a payment per hectare is very crude ...". Do the witnesses accept that basing payments on production levels in 2001 is also crude and that another way had to be found? When discussing redistribution measures, we have heard their views on convergence. I have met with a number of the organisations and Irish Government officials over many years to discuss CAP funding and every time convergence was mentioned the case of farmers with small holdings but high entitlements was cited. I was therefore surprised that the witnesses were not jumping for joy when the front-loaded CRISS payment was proposed at EU level, because that would alleviate the concerns of those farmers in some way. Do they support such a measure for precisely those farmers who have been at the forefront of so many concerns over the past number of years? Then there is the issue of capping. I welcome that the ICMSA in its opening statement, and the INHFA has also alluded to this, supports a payment upper limit of €60,000 without any loopholes. I am interested to hear if the other organisations support such a proposition.
We are dealing with a scenario in which there is a fundamental inequality in the CAP payment system in Ireland. Do the witnesses accept that? Mr. Cullinan said that he accepts there is unfairness in the CAP system. Do the witnesses accept that there is a problem when there has never been a coherent proposal put forward by the Irish Government or any of the main established farm organisations on how to address the inequality and unfairness in the system? Let us be clear about it. At present, there are young farmers breaking their backs working full time on their land and they receive €180 per hectare in Pillar 1 CAP payments. At the same time, there are people sitting on their backsides, with their land leased out, receiving several multiples of that in payments that are based on the production they were involved in 20 years ago. For me, that is fundamentally unfair. Unless we are able to put forward proposals for dealing with it, we do not have credibility in simply opposing the three measures of convergence, front-loading and capping that have been set out to address it. I want the organisations to outline their positions for addressing the inequality and unfairness that have allowed, as has been said, the Larry Goodmans and sheikhs of this world and others to draw down hundreds of thousands of euro, and millions of euro over the term of a CAP, while most of the farmers the witnesses represent are struggling to make ends meet. We must have definitive proposals on how to address that, and I am interested in hearing them.
I note that the IFA is due to protest on Friday. I do not like to be critical of any farm organisation as I work with all farm organisations, but in the context of the talks on CAP the IFA is essentially protesting in support of the Government's position in the talks. To return to my opening point with regard to the EU budget, with the benefit of hindsight would it not have been more appropriate and would we not have been able to ensure that all the farm organisations would have come together if action had been taken and tractors brought onto the streets at the time the EU budget was being agreed? Rather than protesting in support of the Government, they would have come out against the sell-out by the Government and the EU Commissioner at the time, who facilitated the position we are in now. We are essentially fighting over the distribution of a smaller CAP cake.
I will leave it at that.
The Deputy asked enough questions to keep us going for three or four meetings. I will call Mr. Keane as he has not spoken since we opened the meeting to questions. Every president will wish to respond to what Deputy Carthy said.
Mr. John Keane:
I welcome the Deputy outlining his concerns about the position of the young farmers. I referred to that previously, but I will reinforce where young farmers are coming from and touch on the Deputy's point. We find it wholly unacceptable that a young farmer who has taken up farming in the last number of years, has made significant investment and has future ambitions to develop the farming enterprise might be across the ditch from or is leasing land from someone who is not actively and continually engaged in farming or who has ceased farming for a number of years but who continues to draw entitlements based on active work that is over 20 years old. If one looks at any business sector across the rest of the economy, I doubt that it could be justified at any stage.
The Deputy referred to the definition of the active farmer. As young farmers, we are used to being defined. I mentioned earlier the limitations that exist in terms of the definition of the five-year rule. As regards what our definition is of an active farmer, to be delivered under the next CAP, we have submitted this on numerous occasions to the Department. In terms of the payments granted for the delivery of public goods, the mandatory completion of health and safety programmes and the implementation of minimal agricultural activity, for example, stocking rates and cropping rates set by each member state, a point we have made many times over the last number of years to the Department of Agriculture, Food and the Marine is based on a report which we commissioned in 2017 and 2018 on delivering a continuous professional development programme for farmers to engage with. That framework needs to be established.
Through it, we can monitor the training and development of farmers.
The issue of succession planning has been mentioned. We are strong advocates for the development of a succession scheme that delivers for older and younger farmers and links with what we have been promoting in recent years through our Land Mobility Service, which is a collaborative partnership approach. The penalising nature of previous schemes was mentioned, in that the older farmer could not appear outside the farm gate or else his or her payments would be threatened. That is not a way forward and does not proactively encourage younger and older farmers.
The issue of capping payments was touched on briefly. Macra na Feirme supports the €60,000 cap with the proviso that it takes into account the labour units incurred on the farm. For young farmers who are taking over and developing farms, particularly at this time, it is important to know how the growth and development of the business will be supported through payments. Applying a simple cap of €60,000 without taking cognisance of the impact it might have on the financial viability of the enterprise is a proposal that needs to be addressed.
The Deputy's final comments were on ensuring the future and how the budget was not enough. We agree that the overall CAP budget has not been enough, but that is the hand we have been dealt. We must ensure that there is a future for young farmers and that supports are ring-fenced.
Mr. Tim Cullinan:
Deputy Carthy asked a number of questions, the first of which was on new entrants. We need to combine them with the definition of "genuine farmer" and the issue of leasing entitlements. We have been clear on this. We always advocate generational renewal. It is important in any sector that young blood come into it. Where funding is concerned in that regard, we must consider giving people who are leasing entitlements out, particularly over the long term, the option of selling them. The Government needs to implement a capital gains allowance to provide the incentive of a tax-free lump sum. A retirement scheme was mentioned. It would go a long way for someone who wanted to give up farming and continue leasing out his or her lands if the rental income was tax free. We should take that route.
The Deputy spoke about the genuine farmer. In our view, there should be activity on the farm and the financial output in the accounts should be based on sales. A farm needs to have a minimum level of sales and activity. That is critical.
The Deputy spoke about convergence. We need to stand back and consider where we are now. We have convergence and eco-schemes. The negotiations reconvened last week. At that point, the CRISS was a voluntary measure for member states. It needs to remain voluntary. It is up to each member state to make a decision on same. When payment capping and all of the other measures are included, this is a major change that redistributes funding across the board. We are clear on capping, in that we do not want to see funding going to Larry Goodman or the sheikhs. It needs to go to the genuine farmer who is doing the work. In light of what is coming down the tracks, though, particularly with convergence and how the eco-schemes will be developed, our farmers need to get rewarded. The money in the eco-schemes is being taken from supports for farmers for producing cheap food and turned into an environmental measure. At a minimum, the farmer has to get back the amount of money that is being taken out and should be rewarded if he or she is doing more.
The Deputy spoke about the IFA's position on the budget. As far back as last July, we were clear that there was not enough money in the budget. With the greening measures, the green deal and the impact of same, there needed to be an increase in the budget. As to whether it is a sell-out, the budget is what it is. We were not satisfied with it at the time. The Deputy asked why the IFA was only taking action now. We have not done so to date because we were in the midst of Covid last July. There was a slight break in the pandemic at the time, but there was no way I was going to put my members at risk by having them go out on the streets even though we were very frustrated. We must look at the budget. It was not last July that the problem with the budget arose. It has been decreasing since 2001 from 50% to 32%. That is where the budget stands. It has been eroded over time, which is a major concern for us.
Mr. Pat McCormack:
I spoke about new entrants and an exit mechanism for the older farmer. New entrants always cite the issue of land availability as prohibiting them from starting out, be it through a long-term lease or the inheritance of a farm. The retirement schemes of the late 1990s were very efficient and successful in transferring land from one generation to the next via long-term leasing or on a permanent basis.
Regarding the redistribution model, the Deputy spoke about the payment per hectare being a crude method. While it has merits, the national envelope ideally needs to be taken into account. I say that unashamedly. If we are to protect family farm structures, some of which are hanging on by a thread, including in the dairy sector, we need to take into account the overall payment. There is no point in a family farm with a single farm payment of €8,000 to €16,000, €10,000 to €20,000 or whatever the case may be losing substantial sums of money to beneficiaries whose lands may be let. In other times, we often sat across the table from politicians in Brussels talking about the active farmer, but none of us succeeded in clinching the deal on defining what an active farmer was. In fact, we probably made more ground on defining what it was not than on what it was. If we can get the definition of "genuine farmer" right, though, many people will be happy. I will give an extreme example. Under the convergence model, a farmer renting from a landowner who is a retired farmer could see his or her payments cut while the payments to the landowner, who is letting the land entitlements tax free, could increase if the area is below the national average. That has to be wrong. The Deputy referred to it being an historical payment and asked whether it was right to base it on activity almost 20 years ago. Is it right that there could be a beneficiary who has not farmed in the past eight, ten or 12 years and has let his or her land? It is not. That would be farcical.
Regarding the CRISS, I will hand over to my colleague, Mr. Enright, who is anxious to contribute.
Mr. John Enright:
Mr. O'Donnell mentioned a figure of €22 million in terms of capping. We support the capping of payments. The €22 million is equivalent to €176 per farmer. If there is to be an effective CRISS payment, there must be a linear cut across every farmer's payment. There must be a clear analysis of what that means for every farmer. There could be unintended consequences. People in receipt of large payments were referenced in the presentations. A farmer in receipt of €100,000 or €200,000 will qualify under CRISS just as a farmer in receipt of €1,000 will.
We said that convergence is crude, which it is. As our president said, in many cases, a person who is not farming and has all his or her entitlements leased will gain under convergence. Peat farmers who are getting €10,000 will see their payment cut to increase a payment to somebody who receives €35,000, €40,000 or €50,000. If that is not crude, I am not sure what is.
We set out clearly in our submission details of what we believe defines a genuine farmer. We said that the ANC minimum stocking density should be applied. A farmer should also have a certain level of output from his or her farm. We have, therefore, set out exactly what should be done in that regard.
We also set out the need for generational renewal programmes under Pillar 2, both for the young farmer coming in and the old farmer retiring. These are not in place at present and are needed if we are serious about this issue. I will leave it at that. Those are the important points.
I welcome all the representatives from the various farming bodies. Many of the issues have been covered. To use a badly used phrase, we are where we are and nothing is agreed until everything is agreed. Any CAP negotiations or agreements I recall have all started out with the promise that it will be a simpler CAP. That has never happened in any CAP. If we are to go on that premise, God knows what is coming down the line.
In that regard, on this occasion, we have long been promised a simpler CAP, which we know it will not be. We were promised much more subsidiarity and flexibility nationally. I put that question to the witnesses. We are aware that, once the CAP has been agreed, the Department will have to go to Brussels with a national strategic plan. What input, if any, have the farming organisations had in the process of preparing the national strategic plan? What consultation, if any, has the Department had with the farming bodies, as stakeholders? If there has been consultation, what progress has been made? What further progress needs to be made? What input would the witnesses like to have in the formation of that plan? If it has as big a role as has been promised, this is where we will probably have the most input in how we will affect CAP for our family farmers going forward. I would like to hear the witnesses' comments on that.
Mr. Colm O'Donnell:
I thank the Chairman and Senator Daly. The Senator, in his overview, may be right about a simpler CAP. He mentioned the word "subsidiarity", which is one of the key planks of this reform. On the other hand, we heard some stakeholders here calling for income tests and outputs per hectare. This will put an excessive administration burden on the Department. This is unacceptable. We cannot allow a situation to develop where farmers who own or are renting land or aspire, as citizens of the EU, to carry out an agricultural activity on the agricultural areas they are holding are not supported. That is a right they should be able to exercise. Imagine people would not be supported from CAP because they must show they are a genuine farmer. I guarantee the committee that I am a genuine farmer. My payments at the start of the current reform were €50 per hectare because my quota was frozen during the reference years due to the commonage framework plans. That is a long history lesson, which I will not go into now. I consider myself to be a genuine farmer.
To respond to Deputy Carthy on the issue of defining a genuine farmer, we cannot exclude part-time farmers in the regulations. Part-time farmers have a God-given right, the same as anybody else, to be thought of and referred to as a genuine farmer. We put forward a definition of what that should be to the Department and I hope the definition adopted will be inclusive.
By the way, we are not supportive of the long-term leasing of entitlements. Carrying out an agricultural activity on the agricultural areas of the holding at the disposal of the farmer within a two-year period is our position on the definition of a genuine farmer. The leasing of entitlements is not an agricultural activity. That is our position.
I will hand over to my colleague, Mr. Joyce, who has a few comments to make in this regard.
Mr. Brendan Joyce:
I will come back on three points raised by Deputy Carthy, namely, convergence, capping and front-loading. Our position is very clear. We are in favour of capping at €60,000 with no loopholes, frills or spills. The INHFA position in that regard is that the absolute limit must be €60,000.
We are in favour of 100% convergence. That will deliver for 72,000 farmers in this country. The majority of farmers will benefit from full convergence. That is the position of INHFA. We recognise that it may create some complications for some farmers with smaller hectares and higher per hectare entitlements in that they would be unfairly hit. That is why CRISS was brought in. A comment was made that CRISS would be available to every farmer but we could target it. In our case, we suggest targeting it at the first 15 ha. If we combine 10% funding of CRISS with a cap of €60,000, that would deliver, according to our figures, €80 per hectare on the first 15 ha. That would mean every single farmer would receive more than €300 per hectare on the first 15 ha. We ask that the Department verify those figures because up to this point, we have not seen any modelling done by the Department around CRISS. We are calling for that to take place because as other speakers mentioned, that insulates the vulnerable farmers. The convergence model delivers for the majority of farmers.
The Deputy asked a question on protests on Friday. In our view, any farmer who takes to the streets in support of a lower convergence and is not in favour of CRISS is not delivering for 72,000 farmers in this State. In actual fact, such farmers are not delivering a fair result in this CAP negotiation. I will make that clear and I want that message to go out to all legislators here. We are advocating for a fairer CAP. We are using an historical payment system that dates back 20 years at this stage. Younger farmers who have taken over farms are, in many cases, depending on something their fathers have done before them. This is a time for change. There are hardships within certain areas; I do not disagree with that. There are ways of overcoming those. People and farmers need to hear the real facts. CRISS will deliver and convergence delivers for the majority of farmers. We need that point to come clearly across.
Mr. Tadhg Buckley:
I will make one point on redistribution, which was raised earlier by Deputy Carthy. We might look at farmers with average-sized land. Many farmers with small landholdings are being significantly impacted by redistribution. Take, for instance, the example of a farmer with 35 ha who had a single farm payment of €12,500 in 2014, which is not a big payment. That farmer's single farm payment dropped to €10,500 in 2019. It will drop to €7,000 in 2026, with eco-schemes at 25%. If the farmer manages to qualify for eco-schemes, that would bring the payment up to €9,260. There may be a cost incurred in complying with eco-schemes, however. That farmer, who is farming 86 acres, therefore, will take a significant hit in terms of the single farm payment.
These are not farmers with huge landholdings. They are farmers with average-sized land who are farming with entitlements that are slightly above average.
The core issue, and I think Deputy Carthy touched upon this earlier, goes back to the size of EU budget. The size of the EU budget, set as what it was, has created real challenges when it comes to redistribution. When we are looking at convergence, which is now increasing to a minimum of 75%, and we also have eco-schemes, we need to understand the economic impact of those two forms first before we can make an informed decision on what the CRISS is going to look like. As a previous contributor said, we do not have any figures from the Department on what CRISS is going to look like. In modelling that was prepared in 2019, CRISS was not even modelled. Our figures show that if 30 ha were topped up, it would come up at around €45. If you take farmers with 35 ha and a €12,500 single payment going down to €7,000, they will gain nothing under CRISS. It will be more or less the same.
We are saying we first need to understand the impact on payments for convergence and eco-schemes before we make decisions. That is why we think from the perspective of CRISS that it should remain optional for member states. Let us get the economic analysis from our Department first to see the impact is going to have. Then we can make an informed decision about whether we should introduce it or at what sort of levels it should be introduced. Trying to do something when we are completely in the dark, in our view, from an economic perspective, is not a sensible thing to do at the moment.
I thank all the organisations. I have a couple of quick-fire questions. On capping payments, I heard the INHFA say €60,000, and I think Macra na Feirme said €60,000, as did the ICSA. What do the IFA and ICMSA think the top-line figure should be under CAP?
Can I ask a question on that? If I run a business that is getting bigger, I either take on a person or I do not, the way I would have a farm labourer, or if I do contracting and if I need someone wrapping and I have to take them on, because I have to work for them, why would you be including the farm labourer?
I do not actually agree with that part. However, we will agree to differ. On Macra na Feirme, Mr. Keane said he agreed with the €60,000 cap. The only problem at the moment, as he will be aware, is that young farmers, many of whom are happy enough, can go only to 90 ha and get €22,500, plus the top-up. That brings them to about €27,500 or €28,000. Where does the €60,000 come in on Mr. Keane’s side?
Mr. John Keane:
I thank the Deputy. The €60,000 relates to a young farmer who has taken over an established enterprise. That limit is impacting there. The point in terms of the capping from our point of view is that currently there are many enterprises which are a number of family farm members farming, be they brothers or sisters together with parents and, oftentimes, grandparents. We feel that putting a cap on that right now as a blunt instrument without allowing or having provisions for that intergenerational piece, where potentially you could have three generations working on a farm, could have a very negative impact on the potential for more than one family member - both young and older - to continue farming, thus placing the farm both at a viability risk but also placing it at risk in terms of the breakdown of the farm structure, the viability of the farm, and whether some individuals within the farming enterprise have to separate out to alternative practices.
We were talking to the Department this morning, and on the issue of the so-called forgotten farmer, which I know the witnesses have followed up, including Macra na Feirme, the Department said there is a commitment in the programme for Government and that it intends to sort out the forgotten farmer. I say that just as a note of interest.
I have one question for all of the witnesses. Have they tried posting out a simple piece of paper to every one of their members asking them to fill it in and to state which they would prefer? In that way they would get a good feel for what is going on.
Mr. Eddie Punch:
I thank the Chair. I will deal with a few of the points. First, we set a €60,000 cap. It is not that we like caps, but it is that the average payment is €9,000 per farmer. In a world where we cannot even pay a living wage to the average farmer, it is illogical in our view that if you give one farmer €60,000, you would also give that farmer extra money to hire in labour. The marketplace and the taxation system have to cover the cost of hired-in labour.
In terms of young farmers, we have always supported the national reserve and the 25% top-up. We would say there needs to be consideration given to young farmers who do not want to get into dairying. Dairying is a logical and good choice for some young farmers, but for a lot of our members, who are young folk who are getting into farming, because of fragmented holdings, land quality, or the sheer risk investing hundreds of thousands in new milking facilities, they should be given options to farm in sucklers, sheep, or tillage, as an alternative to the high capital investment in dairying. That is where we want to see, for example, an agri-environment scheme is attractive to young people starting out and can pay up to €15,000, for example.
In terms of the definition of "genuine farmer", we have said clearly there must be an upper limit on the number of years a farmer can lease out entitlements. We accept that people will lease out entitlement in the short term, because of illness, or some issues like that, and there are people who need to lease in entitlements, but prolonged, by which we mean for seven years or more, leasing out of entitlements has got to stop. If nothing else happens, we need to form an agreed position on this around this and other tables. Also on the genuine farmer, we have said the areas of natural constraint, ANC, minimum stocking rates should apply and the donkeys should be ruled out.
In terms of getting our members' views, we have asked them through various formats. We are using, for example, WhatsApp and messaging for people to give their feedback on various issues. Obviously, that is more of a thing with Covid-19, but we hope also to go back to real engagement with people around the table. In general, the CRISS, the convergence, and all of these issues are substantially linked to the EU looking for farmers to do more and more for less and less. However, there is a €750 billion Next Generation EU, NGEU, piece, which was agreed as part of the EU budget negotiations. The farming and natural resources sectors across all of Europe got a mere €17.5 billion from that, €10 billion of which was for just transition and €7.5 billion to top up rural development funding. We think that is inadequate. We think Ireland's share of it is smaller still.
If we come back to these contentious issues, we have to get more money into the budget. The carbon €1.5 billion that was a programme for Government agreement needs to be extra money over and above the co-financing obligation that will be part of Pillar 2.
We need to ensure also we are fighting as part of this negotiation. Whether the eco-scheme is set at 25% or 30% is akin to moving the deckchairs as it is playing around with figures. We need to get more money into the schemes and if we want CRISS, we need more money to top that up. If we want to have a fairer CAP, we need more money for the farmers who are most vulnerable to the current convergence model, and in our view those are cattle, suckler, sheep and tillage farmers. They are the people who need more money out of this and we have to find a way of doing that quickly.
We must devise a system whereby what I call the armchair farmer cannot be condoned going forward because a person has to be farming to be able to get payments. I said it earlier to the officials from the Department but I remember asking a question in the Dáil when Brexit was in full swing and the Tánaiste stated the Government would bring it up if there was a deficit. We must focus on that, in the line of getting more money, as Mr. Punch has talked about, into the pot. It was mentioned earlier but in fairness to any Minister, under CAP, as one of the organisations said, a minimum stock is needed. Under CAP, we cannot bring it in because of some world trade agreement or rules. It is true they have it in under the ANC but they cannot do that under CAP. Where there is land being leased and payments going with it and there is someone sitting down looking at the farmer busting himself or herself outside the door, that type of stuff must come to an end. I do not care whether the farmer is farming full time or part time, he or she must be looked after because if we do not do that, we will not continue to have farmers. As regards young farmers as well, we must help them and encourage them as much as possible going forward.
I will be very clear that my honest opinion is we must go down the road of convergence. We have to try to divide the money up as best as possible. Some people will be affected but we must bring in systems that will help them. The cap will be over €50,000, or €1,000 a week. We should do that and get the income of every farmer, especially on family farms, up to a viable level. Earlier on, a size of 35 ha was talked about. My understanding is that the average size is 32 ha and there are farmers who have missed out on moneys. People will not get paid for what they did 20 years ago. As a contractor, whatever baling farmers do, they will not get it this year unless they go out and fight for it. We must ensure we look after all farmers as best as is possible.
Those at the very top were mentioned. I know there are not many but looking at what has come out in the media about payments of €245,000 and €145,000 and all of that, it is inflating the whole situation. I know that is just ten pictures taken of ten different people. It is not going to make anyone at the bottom any richer but all that must be cut out because it is not portraying the system in a good manner.
Mr. Tim Cullinan:
One of the questions the Deputy asked was whether we sent a piece of paper out to our members. All I can say is we have had numerous consultations with our members during Covid, although it has been difficult. We have had two rounds of regional meetings. We came out with six key objectives for this CAP reform. They were based on listening to our members on the ground. One of the areas Deputy Fitzmaurice brought up was the armchair farmer. If he can believe it, that was one of the key issues coming up when we were doing the meetings up and down the country. I explained earlier on that we have, in our objectives, an objective of dealing with armchair farming and long-term leasing. That needs to go back in and there needs to be a trading system around that.
I absolutely agree that we cannot afford any leakage out of this reform. What the Deputy says is right. The budget has been decreasing and this is the ultimate problem here. What we must do with the scarce resources available is to ensure they are going in the right direction. I am talking about targeted payments. We have been working on this for quite a while. We already have a targeted payment for the suckler cow and the ewe and we must continue with that. We have more funding coming into this. Members should remember that national governments must, at a minimum, co-fund up to 57%. We must ensure that happens and that co-funding is not mixed with the €1.5 billion from the carbon tax. That is absolutely essential because two things need to happen. First, we must have a proper environmental scheme and the money is now ring-fenced for that. Second, we can use more of the targeted payments in the Pillar 2 for a proper payment for suckler cattle and sheep. That is the direction we need to go in now. We must keep the money with the people who are doing the work. I could not agree more with that.
I thank the Chairman and all the participants. I have two quick questions. The first is for Macra na Feirme. Either the IFA or the ICMSA can answer the second. I do not agree with all of the contributions made by the representatives of the farming organisations, although I agree with some of them. Mr. Keane spoke about new schemes and additional interventions for the new generation of farmers and young farmers. I fully agree with Macra na Feirme on that because if we have no young farmers coming through, we do not have great hope for the industry going forward. Will Mr. Keane flesh out what Macra na Feirme would like to see done in that regard in the next round of CAP?
I raise the second issue with the IFA and the ICMSA because they mentioned it. Mr. Cullinan spoke about targeted schemes. One scheme I would like to see reintroduced is the early retirement scheme. When we met the senior officials from the Department this morning I and many other members raised the early retirement scheme. It is to be paid for with the same pot of money so it will compete with other targeted schemes. Consequently, if we introduce an early retirement scheme, it will be to the detriment of other schemes or areas. The previous early retirement scheme was very successful. My own parents availed of it, as did many other families across the country. I know it was left somewhat open-ended and we would need to apply tighter restrictions if it were to be reintroduced.
Mr. John Keane:
There are a few elements to the matter Deputy Kehoe raised, which probably ties into Senator Daly's earlier questions on the CSP. We outlined a number of things we are looking for from this round. As mentioned, these include the ring-fencing of 4% under Pillar 1 payments, inclusion of the young farmer top-up under that, a fully-funded national reserve so we can ensure it is fully funded for the entirety of the period of the CAP and, finally, that this is fully ring-fenced for young farmers. As I noted, we have heard at European level that the inclusion of other interventions under this scheme cannot be included in the pot of funds set aside for young farmers. It can all be aligned to the ambition of organics and the other schemes that are available but cannot come from the pot of funds allocated to young farmers.
On the Pillar 2 payments, the previous early retirement scheme has cropped up a number of times. We have submitted a detailed succession scheme to the Department setting out what we see as a collaborative and partnership model that will deliver succession to both the older and younger generations and would be funded under Pillar 2.
Key elements include that it is delivered within the time period of this CAP, that it is funded from Pillar 2 payments, that the entirely of the land is transferred before the end of the CAP period and that it is a collaborative model. Under the previous early retirement scheme, we saw older farmers penalised. They could not go outside the front door for fear of their payments being removed.
In addition, in terms of delivering for young farmers, the development of the start-up grant scheme has been mentioned at Commissioner level in terms of installation aid which is being used by all bar six member states, including Ireland, under the CAP. It has been shown to be quite a successful measure in other member states. We see it as having a number of parts, including grant aid for the start-up of business. Businesses in other sectors on the island of Ireland have this and we do not see why it should not be applied to young farmers. As part of this, and it links back to one of our earlier proposals, there should be a continuing professional development framework and credit lines for young farmers to access training and development.
Access to land and credit have been mentioned as major barriers to young farmers entering farming and establishing their enterprises. What we see as key issues include the roll-out of financial instruments under Pillar 2 payments to encourage access to land and credit, and making finance available at competitive and favourable rates for young farmers to allow them to compete. If I might be allowed, we have mentioned our Land Mobility Service. It has been called out by the Commission. I might ask our CEO, Mr. Duggan, to briefly discuss it.
Mr. Denis Duggan:
We have submitted proposals to the Department of Agriculture, Food and the Marine, and at Commission level, to support a land mobility service. For members of the committee who are not familiar with it, it is, in essence, a matchmaking service that deals predominantly with putting together older farmers and young farmers outside of a family relationship to instigate shared farming partnerships, leases or other types of collaborative arrangements to support generational renewal. Since the foundation of the service in 2012 and 2013, it has put together more than 700 such partnerships with, on average, 140 arrangements per year.
In 2012, before the service started, Dr. Pat Bogue, who is familiar to some committee members from various research he has undertaken in agriculture, did a survey in which he found that 48% of full-time farmers did not have an identified successor. The Irish Farm Accounts Co-operative, IFAC, which is the farm accountancy firm, did a farm survey report in 2021 which found 77% of farmers over the age of 55 had no definite succession plan. It is not necessarily that the farmers in either report had no heir, that they were bachelor farmers or any such scenario. Many had sons and daughters but they were in professional careers, scattered to the four corners of the world or not yet ready to take on the family farm enterprise. It is something they might want to do in ten or 15 years time but there may be a desire for mum or dad to step back from farming before the next generation is ready. This is where the Land Mobility Service has stepped in. We have been seeking to have the service scaled up and supported under the next CAP. We have made detailed submissions to the Department on that basis.
Mr. Tim Cullinan:
It is not a question of whether an early retirement scheme is a good idea. We all accept people need to be able to retire when they come to a certain age. Over the years, we have lost a lot of older people in farm fatalities, which is a tragedy in itself. The problem we have comes back to funding and resources. We have to channel the resources in the best way possible. We are looking at the vulnerable sectors. We started off speaking about viable farmers, particularly farmers relying on funding from Pillar 2. Obviously if we have a retirement scheme, the money will come out of that and we will leave other sectors short of finances. It comes back to the original problem of there not being enough money in the budget. We have to target the money at the vulnerable sectors. Looking at it, if people retire from farming now and sell their entitlement to get out of farming, the money going back to them should be tax free. We have a system whereby the rental income from leasing the land is tax free.
Mr. Pat McCormack:
Earlier, I alluded to the issue that one of the greatest barriers to young people getting into farming is the availability of land. Perhaps the word "early" needs to be taken out of this. Perhaps this is where there was a significant issue in the past. People aged 55 were going into what was an early retirement scheme and perhaps it was not sustainable. We certainly need to look at the model to see whether we can have a retirement scheme that will be beneficial, in particular where there is a family transfer and there would not be the availability of money from a lease.
If the average age of farmers now is 57 or 58 years, when we roll on three years the average age of farmers will be over 60. The committee members are the people who are elected to do the business and govern the country. One of the main reasons young people are not going into the industry is that if they were to do so today, they would get the same price as their grandparents got 30 or 35 years ago. We have not seen a move forward in food inflation, and that has to go hand in hand with this round of CAP reform. The current position is not sustainable.
The conversation was about eco-schemes, greening and various measures. We have the farm-to-fork strategy and climate action. We have all these regulations to comply with as farmers and to suffer the consequences of them, whether it is challenging output or the costs associated with compliance, and all for the same price our forefathers in the generations that went ahead of us received. There needs to be a clear message from our public representatives that food inflation has to go hand-in-hand with CAP reform.
In the Department's opening statement this morning, the officials spoke about the potential for serious loss of eco-scheme funds in the event of a lower than expected take-up. They stated the loss of funds issued must be addressed through flexibilities, including the Council's general approach. They stated they are focused on this proposed learning period over the first two years of the operation of the eco-schemes. What does each organisation before the committee think of this proposed learning period? Are they comfortable with it?
Mr. Tim Cullinan:
To go back to Senator Daly's question, the strategic plan will be critical and essential. We have been engaging with the Department on an ongoing basis. The Department cannot make a decision on the strategic plans until negotiations are concluded in Brussels. This will frame the direction of travel. What is absolutely essential in all of this is that we need a financial impact assessment on all of this. A fundamental change is taking place. There will be a massive cost to farmers. We also have to be very careful with the schemes we are devising with regard to costs incurred and income forgone. Planners will be coming in to devise the eco-schemes.
I will also answer Deputy Browne's question on the loss of funds.
We must ensure that those funds are ring-fenced and stay in the system in Pillar 1. If we are advising on environmental schemes, it is essential that there is not a loss or another cost involved for farmers because of more leakage. We do not need the two-year learning here. Farmers have learned quite a lot over the years. Basically, funding from Pillar 1 us being shoved into Pillar 2, which not a good idea, full stop, from my perspective. The learning is that we are going in the wrong direction of travel with this.
Mr. Pat McCormack:
The critical point is that while a learning period can be beneficial, we need to have a scheme that is compatible with all sorts of farming and agricultural activity in the country.
On the strategic plan, we have been deeply involved with the CAP consultative committee, where a lot of work has been done on trying to shape what could potentially be compatible with Irish agriculture. Equally, we need to see the ink dry at European Union level. We also need to see a commitment at national level and co-funding decided in order to take the creases out of the national strategic plan going forward. We need to have the maximum level of national discretion as we move forward. It is imperative that we have the maximum amount of co-funding.
Mr. Dermot Kelleher:
I agree. Not much work can be done on the national strategic plan until the job has been completed at EU level. We must ensure all the co-funding and other promised funding is provided, including the €1.5 billion from the carbon tax. There must be no three-card trick whereby one fund is used to cover the other. We have had a lot of discussions at the CAP committee as well. There will have to be a plan and we will have to look after the farmers who are in need of help. Some need more help others and some sectors are in dire straits. We need to look after them.
Without going around in circles, my grandmother used to say to me long ago, "Remember boy, enough always wants more." We have people out there living on a fixed income of €8,000 or €10,000 a year, yet we are afraid that fellows on €70,000 or €80,000 will be upset if we take a few pounds off them. We must be fair in our dealings with everyone. Using hectares might be a crude measure. The whole system must be looked at, including what each person is drawing down.
Mr. Colm O'Donnell:
On the Deputy's first point, as a stakeholder in the CAP consultation committee from the start of the process, the input of the Irish Natura and Hill Farmers Association has included making numerous submissions throughout the strengths, weaknesses, opportunities and threats, SWOT, analysis and in the development of Natura impact statement, NIS, interventions. In our latest presentations and engagement with the Department, the early indicators would be potentially positive regarding the eco-scheme. That might address Deputy Browne's question.
It is crucial that there is equal opportunity for extensive and intensive farm systems, and that they all have equal access. We will get more with a spoonful of honey than with a jar of vinegar. We need to incentivise participation by all beneficiaries. The 125,000 beneficiaries should have an equal opportunity and have measures that are tailored to the needs of the various farming systems. That is very important and would address the incubation period referred to by the Deputy.
The Deputy asked about the potential loss of funds. It appears the Department is on a good foundation and trajectory to ensure there will be no money left behind. While it is mandatory for the member states, it is voluntary for the farmer. My point to Deputy Browne is that it would need to be such that all farmers can access it equally.
Mr. John Keane:
I am conscious of time. I touched on the CAP strategic plan earlier, but overall there is disappointment in the lack of ambition and support for young farmers under the draft plan we have seen. I mentioned this and Mr. Duggan mentioned it in the context of land mobility and other services not being included. It is hugely disappointing, having been engaged in the process over many years.
To directly answer the question on eco-schemes, Macra na Feirme believes that maximum flexibility is certainly required. Any scheme must be inclusive and accessible to all. If we are looking at our contribution and requirements under climate change and the delivery of targets that will be outlined in other forums, it is crucial to ensure the scheme is accessible and inclusive of all 120,000 plus farmers. The penalties of excluding people from it would be financial but would also have bigger ramifications on our commitments in other forums. The schemes must be progressive and they must be complementary. In times past, we have seen legislation and schemes that have not necessarily complemented what is being done by individual farmers on the ground. Those are the key objectives we have for the delivery of effective and equal schemes, and to deliver the best results for farmers and for the ambition of the CAP.
What are the organisations' views on the fact that the situation has become so severe that there is talk of holding demonstrations this Friday across the country, including in Cahir and Nenagh in Country Tipperary? The impact assessment of the Mercosur trade deal has been delayed. I was speaking to IFA members from south Tipperary recently. They feel they are being made to jump through every hoop imaginable and the Mercosur deal has the potential to make an already difficult situation even harder for them. They raised the issues of inflation and the cost of living, which they say is never factored into the needs of the sector. That question is for the IFA.
My next question is for the ICMSA. Its members are being asked to do more and provide affordable produce at the same time. The CAP has shifted its focus from enabling farmers to produce food at affordable prices to the green transition. Have any of the organisations here ever been asked to discuss with the Minister or EU officials the prices they expect to see in supermarkets right across the bloc if all this happens?
My next question is for the representatives from Macra na Feirme. While elevating generational renewal as a key objective under the current CAP is welcome, the organisation said that it wanted a minimum allocation of 4% of direct payments ring-fenced for young farmers. That seems to be sliding back to 3%. What kind of an impact would a reduction by 1% have on young farmers?
Mr. Tim Cullinan:
I thank Deputy Browne for his question on Mercosur. I have been very close to this in my position as vice president of the Committee of Professional Agricultural Organisations, COPA. The position is that the Mercosur process has been slowed down because it has to go through the political system. The view politically is that it is not going ahead at the moment. If it was to go ahead, it would be very concerning, especially if we couple that with what is happening in the UK, which will, more than likely, do a trade deal with Australia. If that were to happen, it would be even more critical that we do not have an EU-Mercosur deal. I return to CAP, the green deal and the farm-to-fork strategy.
There is no way that we can allow the EU to import beef from a country that will not have the same environmental standards that we will have in Europe going forward. From that point of view, that trade deal cannot happen. We speak about inflation. We all know the prices that farmers receive today are similar to those they received 30 years ago. A lot of this has been the pressure coming from discounters. Deputy Martin Browne may have seen recently that we took up this issue with one of the international retailers. It tried to silence us by seeking a court injunction against us. We were able to prove that we want to fight on for farmers. We proved last Friday that it was not able to obtain that injunction against us. That is very important in the battle of the price of food going forward.
To sum up, I am delighted that we had an excellent discussion today and a debate with all the farm organisations. One message is coming out here and Deputy Carthy alluded to it, which is the problem is there is not enough money in the pot. We are scrambling for an increasingly lower budget and there is no point in saying anything else; it is very divisive. We must ensure the funding is distributed in the fairest way possible, which is not easy. We must look at alternative ways of getting funding and the Government has a duty to ensure we get the maximum funding from the pillar and from national co-financing and that the €1.5 billion is ring-fenced. Tomorrow, we are going out to highlight all of that. We want to do two things. The impact all of this can have on rural towns and villages of Ireland is highly concerning. Approximately 300,000 people are employed in our sector in rural Ireland. That is a massive number of people. If one takes in the rural economy, that is approximately 11% of employment overall. Local towns and villages are only reopening after Covid-19. The last thing we want to see is a long-term impact on agriculture that will affect the viability both of us as farmers and of all the businesses in rural towns up and down the country from Donegal right down to west Cork. The reason we will be getting out there on Friday is to explain this to people on the ground, as well as for our members to send a clear message to the Government and to the Minister that he needs to conclude the talks in Brussels and get a proper redistribution of this funding in a fair and equitable way for all farmers, as well as ensuring that the viability of farmers can be sustained. While people here have stated that only a cohort of farmers is viable, what we are trying to do - it is difficult - is to get from 30% and to have a lot more farmers viable into the future. That is what we are about.
Mr. Pat McCormack:
To answer Deputy Martin Browne’s remarks, we are indeed asked to do more. Unfortunately, we are asked to do more for less. It comes to Mr. Cullinan’s and Deputy Carthy’s earlier point, the overall budget is the issue. If the budget was substantially increased, maybe we would be in a position to deliver in an economically sustainable way. We need ask ourselves the questions in respect of prices and price recovery and, from being involved with the European Milk Board, EMB, on the cost recovery pricing model, the French have done significantly more in that regard and we need to look at that French model as we move forward. I always say it is nothing short of hypothetical to talk about doing trade deals with non-environmentally conscious countries and nations. The Mercosur trade deal and any potential from a European point of view to execute that trade deal is nothing other than talking from the two sides of the mouth. We all have an obligation and a duty as the CAP talks continue. There will be national discretion to put in place a model and a funding mechanism to support the family farm model as we know it today. Ultimately, it will support and drive rural economies across rural villages and towns. What happens arising from this CAP reform will dictate where agriculture will be when we hit the next decade starting in 2030.
Mr. Dermot Kelleher:
I thank Deputy Browne for his question. The Mercosur deal, as it was, will be a total disaster for this country. At present, environmentalists are calling for our beef herd to be cut. Our suckler herd is probably the most efficient, grass-fed, environmentally friendly way of producing beef. If we outsource that to places like Brazil, where they cut down rainforests, we would be using air miles and ship miles and all this carry-on. Therefore, it does not make a whole pile of sense. Our suckler herd is very good. In all fairness, the suckler herd and the sheep flock are keeping the lights on in many rural parishes, especially in the western half of this country. That is why we need more funding and need it to be shared fairly. There is a duty of care on our Department and country to look after all farmers, even small drystock farmers. There has to be a duty of care to all farming families. We cannot be kicking them into touch because some other fellow says they are unviable. If you go into any mart in Ireland, you will see very few fellows. We will see the other fellows going home who are ageing. There is unviable and there is viable. If we take some of the Teagasc research farms, we would be all in the truck because their results were shocking. Any farmer with half a brain would not be as bad as them.
Mr. Colm O'Donnell:
I will to sum up by thanking the Chair for offering an invitation to the INFHA. I would like to recap on a couple of the issues that came up today. It is worth bearing in mind that under conditionality, all farmers are now required to comply with a basic set of conditions. All farmers have to do this. We are all farming to a set of conditions. It is only fair to think that we would work and continue on the trajectory of going for flattening of payments, to finally bring some fairness, after 20 years, and some equality in respect of how farmers are supported. I mentioned at the start that main general objective is to strengthen the socioeconomic fabric of rural areas. This is vitally important. The Houses of the Oireachtas have a duty of care to ensure that this happens. That is the best way of keeping those small areas vibrant, as well as that social dimension spoken about earlier by a contributor. This is the way to do it. I would say that a front-loaded payment will protect those small farms and high value entitlements with the top-up on the first 15 ha. There is a deliver up to €80 per hectare. Put an end to this gravy train once and for all and cap payments at €60,000, with no labour units allowed. That point was well made by Deputy Fitzmaurice. On the eco-scheme, we need to ensure that we have equal opportunity, equal access and a uniform payment per hectare. This will ensure, if it is done with an incentivisation for entry-level schemes, that there would be no money left behind. The pot is a taxpayers’ pot of money. This proposed 20%, whether it is 20%, 25%, or 30%, is no longer something that is God-given or that belongs to any individual beneficiary. It is taxpayers’ money. We can see now why the budget has not increased. It is because of how greening was seen as a failure and a bad way of distributing funding for the benefit that was expected from environmental ambition. Finally, I would tell the Minister that the 70,000 farmers who would benefit are the majority of farmers in this country, were we to go for full convergence and were we to use the other tools at his disposal. Many of these farmers are farming on a land type that leaves them very productive. They are delivering excellent farm products. However, what about the public goods and the ecosystem services that have never been acknowledged in any previous iteration of CAP?
We need to ensure that "agricultural activity" extends to acknowledge public goods and the delivery of ecosystem services, which are of considerable benefit to this country annually.
Mr. John Keane:
Before I make my final remarks, I will touch on Deputy Browne's question on the impact of 3% versus 4% on young farmers. It amounts to €14 million over the course of the CAP period. That sounds like an insignificant number, but when one considers the ambitions that we have set out in terms of the inclusion of a fully funded national reserve, including the additional supports that we are seeking under Pillar 2 payments, and an additional stream of young people coming into farming as a result who will need to be supported under Pillar 1 payments, the consequences of not supporting or fully funding those ambitions will be felt far beyond the impact of the payments.
As has been stated numerous times, the ambition to support young farmers, drive generational renewal and elevate it to one of the nine key objectives must be at the forefront of the Minister's mind and the minds of those involved in the CAP negotiations. For the past 20 or 30 years, we have spoken about generational renewal and encouraging young farmers. We have spoken about generational renewal since my father was involved in Macra na Feirme, which was not in the past ten years. The issue of young farmers has always been talked about. We stand at a point when we need constructive, supported and fully funded measures to drive generational renewal. As has been stated, the average age is shoving 60 years. Were that the case in medicine, teaching or any other sector in our economy, it would not be facilitated or tolerated. We need fully funded supports for young farmers so as to drive generational renewal. They have shown a commitment to engaging in new practices and changes that are environmentally friendly and sustain the agricultural sector.
I thank the Chairman for the opportunity to address the committee.
On behalf of the committee, I thank the farming representatives for attending and sharing their views. We have had a robust discussion, which we appreciate.
Our next meeting with be on 15 June on the topic of organic farming.