Brendan Smith (Cavan-Monaghan, Fianna Fail)

My starting point is that I see no compelling reason to change from the current historical model for determining single payments. That model has a distinct advantage in linking the payment with level of farming activity, albeit activity in 2000 to 2002. I have made my views on the benefits of the historic model clear at meetings of the Council of Ministers and in bilateral discussions with other member states and the Commission.

However, it seems Ireland is in a very small minority of member states that hold this view, with many of our partners in Europe now questioning the credibility of this system for determining direct payments. We must, therefore, be open to looking at alternative models that might command the support of a larger number of member states and also be beneficial to Ireland. While I am prepared to look at the alternatives, particularly if other countries move from the "historic camp", there is a need to find a basis that is acceptable and fair to all member states and that meets Irish objectives of improved competitiveness and sustainability.

There are no concrete proposals as yet on this matter but it is clear that most member states, including Ireland, are carrying out analysis to determine which system best suits their needs. From our analysis so far, we have concluded that Ireland would lose out under a simple European Union-wide flat rate by nearly 20%, based on current EU single payment scheme, SPS, funding levels. We also know that movement to a regional or national flat rate, based on our current national envelope, would broadly have the effect of shifting funding from farmers in the east to the west and from cattle fattening and tillage farms to cattle rearing and sheep farms with little change on dairy farms. It is clear there is a long way to go in this debate. I will be seeking to have the option to maintain our current system and, failing that, to ensure there is a fair and equitable division of funds that supports family farm incomes in Ireland and allows farmers to get on with the business of farming.

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