Simon Coveney (Cork South Central, Fine Gael)

I take it the Deputy is referring to the Commission's proposals for the Common Agricultural Policy for the period 2014 to 2020, which include a gradual move away from payments based on historical production towards a system of uniform national or regional payment rates by 2019, and whether they will adversely affect certain parts of the country relative to others. I have repeatedly made known to the Commission my view that its approach to the introduction of flat-rate, area-based payments on a regionalised model will not work for Ireland. We should not break up the country into different regions and apply different payments to those regions on a flat-rate basis unless we have no alternative. Such alternatives are available, as I outlined to the Commissioner when he visited Ireland.

Moving to a flat-rate, area-based payment ignores the fact that direct payments to farmers are calculated on the basis of historical productivity going back to 2002 or 2003. The notion that we should just ignore all of those historical data and simply apply a new regime would mean that more than 50,000 farmers would lose one third of their direct payments, while more than 70,000 others would gain between 70% and 80% on their payments. This would totally ignore the productivity of certain farmers and the lesser productivity of others. That is not how we should proceed. There is no doubt that a new system is required, but we must have a tailored approach, in agreement with the Commission, that will allow for some redistribution of funds within the State but will not result in a massive transfer of funds away from the productive sector to the less productive sector.

Additional information not given on the floor of the House.

The mechanism proposed by the Commission raises serious concerns for Ireland. It would result in very significant transfers from more productive farms to more marginal and less productive land. Analysis carried out by my Department indicates that, under a national flat-rate model, the most productive farmers would lose, on average, about one third of their current payments, while the least productive farmers would see their payments rise by an average of 86%. Alternative redistributions based on a two-region model, or even an eight-region model, would have similar outcomes. These proposals are not compatible with my commitment to sustainable intensification of production, the maintenance of a vibrant rural economy and the achievement of the objectives of the Food Harvest 2020 strategy.

I have been relaying these concerns very strongly at every opportunity in recent months, most recently in the course of discussions with the European Commissioner for Agriculture and Rural Development, Dacian Ciolos, during his visit to Dublin three weeks ago. I pressed for the maximum possible flexibility to be given to member states to design payment models that suit their own farming conditions and to include the possibility of lengthy transition periods. The so-called approximation approach, by which all payments would gradually move towards the average, and which the Commission itself has adopted in the distribution of funds between member states, is one alternative that is currently being examined. I will continue to work intensively with the Commissioner and with my counterparts at the Council of Ministers, to achieve the required flexibility and to arrive at an acceptable solution that does not have the dramatic redistributive effects inherent in the current proposals.

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