Brendan Smith (Cavan-Monaghan, Fianna Fail)

I would prefer to avoid direct comment on a leaked document. It is at most a draft and may change as it goes through the inter-services consultation process within the Commission. That said, in so far as the draft communication reflects the main issues that have been under discussion in the CAP debate over recent months, I can outline the following.

My overarching view is that we need a strong and adequately resourced CAP after 2013 to ensure security of food supply, to maintain family farming in Europe and, above all, to promote competitiveness and innovation. I support continuation of the current two-pillar structure. I also remain committed to full decoupling. It has been a success for Ireland and is the best way of underpinning the incomes of small family farms, while allowing them respond to market opportunities.

With regard to funding, I note the Commissioner's intention to achieve a more equitable distribution of funds between member states, as expressed during his recent visit to Ireland. I am prepared to look at the various options but all member states must be realistic on this. I am opposed to an EU-wide flat-rate payment because of the wide variations in the type and cost of farming across the EU. Instead we need to start with the current distribution mechanism and work from there. In so doing it is vital that we use the most accurate basis for comparing funding levels, that is to say eligible area.

Ultimately I want a distribution mechanism that is fair, that underpins competitiveness and sustainability and supports the viability of Irish farming and that takes into account the wide diversity and differing costs of farming across the EU. This argument applies equally to distribution of the direct payment funds in pillar 1 of the CAP and the rural development funds in pillar 2.

With regard to any proposals for redesign of direct payment models, I favour allowing member states considerable flexibility in this area, as is currently the case. The agri-ecological and social conditions of farming vary hugely within the Union and Ireland needs to have the flexibility to apply the payment model that best suits our conditions. In that regard, while there may be positives for Ireland in the increased emphasis on delivery of public goods from farming, we must bear in mind that, under cross-compliance, EU farmers are obliged to comply with the statutory management requirements of 18 EU regulations to qualify for payment. These requirements cover the broad spectrum of animal health and welfare, respect for the environment and the sustainable management of our natural resources and contribute substantially to the production of public goods from farming.

There are suggestions that payments in respect of less favoured areas should move from pillar 2 to pillar 1. The key issue is whether the funding moves with the measure. I have a strong preference for retaining LFA payments in pillar 2 where they can be targeted at those most in need. Not all member states utilise the option to pay LFA payments and it is difficult to understand in those circumstances the move from discretionary payments in pillar 2 to obligatory payments in pillar 1.

As to the market support measures for the future, I favour the continuation of market support measures at safety-net level, together with some flexibility to adapt or enhance them as needs arise. We will also need to examine additional measures to address the much increased volatility of markets.

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