Éamon Ó Cuív (Galway West, Fianna Fail) | Oireachtas source

I thank the Minister for coming to the House in advance of next week's Council of Ministers. We are engaged in a slow process and the options will narrow until agreement is reached at European level. Even after we reach agreement, however, we will still have to make a number of national choices. We must retain our focus on what we want to achieve in the end game. It is vital that we give a higher priority than is given in popular discourse to price stability and guaranteeing primary producers will receive a fair share of the price paid by consumers. If farming is not profitable even on the best of land, there is no inducement to produce more. The Food Harvest 2020 programme which we prepared in government should underlie our actions. The programme aimed to expand Irish agriculture to produce the maximum possible product from the land.

I have heard statements in this debate which would be considered ridiculous in any other forum. It is suggested that somehow there is an incentive to produce if someone has a fixed payment, notwithstanding the fact that the more he or she produces, the less money he or she will make. In other words, having taken the fixed income, the enterprises loses money when it produces more. To expect anybody or any country to expand production dramatically in such a situation is Alice in Wonderland talk. We have to fight to get recognition from the European Union that if farming is not profitable now that it has been decoupled, there is no incentive to produce more. If we accept that principle, a second point becomes obvious. The better the land and the more efficient the farmer, the better his or her capacity to make profits from the market. If the average farmer can make a profit by increasing production, which will be necessary if we want to achieve our targets, it is fair to say the farmer with the best land has an even better opportunity because of economies of scale. We must, therefore, get it into our minds that the payments are decoupled.

From a farmer's point of view, pillar I is only part of the equation. When farmers received information on their farm payments from the Department at the end of the year, they always looked at the bottom line. For 100% of the farmers in the CAP covered industries, this meant the single payment; for 75% of farmers, it meant the single payment and the disadvantaged area payments, and for approximately 33%, depending on REPS and AEOS cycles, it meant the single payment, the disadvantaged area payment and an agri-environmental payment. We have to recognise that, for various reasons the Minister could not reverse, there have been significant decreases for the 75% of farmers receiving the disadvantaged area payment.

There have been very significant decreases for some farmers in the amount of money they get paid for agri-environmental schemes. I am talking about farmers who were in REPS 1, REPS 2, REPS 3 and REPS 4 who had come to depend on their payment, but it disappeared overnight. Therefore, when we are looking at winners and losers on Pillar 1, we must match those farmers to the winners and losers under Pillar 2 to see who are the net winners and net losers over this. I have also argued, though not everybody agrees with me on this, that unlike what happens to REPS farmers, it is important that this change is graduated over the coming years and does not all happen at once or is not all front-loaded in 2015. In other words, I accept that people need time to adjust.

I always believed the Minister's approach was fundamentally flawed and that single payments were not a measure of production. They were a measure of an enterprise a farmer was in and of the grants it attracted. In terms of milk, allocations were made. However, there are people now who had milk quotas and who got out of milk totally, but still get paid the single payment for that milk. Therefore, even from the beginning, there was a mismatch between the single payment and production. Take for example the case of a farmer who produced weanlings and sold them before the ten-month punch because that was his system of farming. The person who bought the weanling got the ten-month punch, the 22-month punch and the slaughter premium. The farmer who bought probably factored the ten-month punch and the 22-month punch into the payment he made, but only for one year. As long the farmer purchased in the years 2000, 2001 and 2002, he had for the following seven years - something the Minister wanted to extend to 14 years - the advantage of the grants paid in those three years. Therefore, the idea that there is a straight match between production and farm type is wrong and untrue. The longer we distance ourselves from the years 2000, 2001 and 2002 - the Minister's official said the scheme cannot be recalibrated - the more the payment becomes historic and not linked to the farm activity.

Even if we deal with the price issue, there is a bit of a contradiction with regard to paying those with the best land more and that is the flaw with the Minister's approach. On the other hand, there is a major flaw with the Commissioner's approach. It gives an equally distorted result, because in that case it has nothing to do with what a farmer produces in a certain year, but depends on the number of hectares he has. If a farmer has a lot of hectares, he gets a large payment, without limit. In either case, the limit talked about in the Irish context is unreasonable. When I looked at this, I said to myself that what we want is to ensure all our land is farmed. There are varying challenges in different places. We want profitable, progressive farming, but we also need to get the most challenging land farmed. Otherwise, we will have an ecological disaster. Ecological and environmental stewardship are of huge importance to the European Union.

If we want our marginal land farmed on a continuous basis, if we want to make that proposition attractive and if we want to protect the environmental and ecological values in the CAP, we will have to pay for that. However, I do not want us to move to a situation where we have a new set of people getting very large payments. Therefore, I have said from the beginning that nobody should get more than €50,000 of a payment through the CAP. One would think I had two heads on me when I suggested this very high cap on these payments, although we have accepted for years a cap on the disadvantaged area payment where, no matter how much land a farmer owns, he can only claim on a modest amount of acres. We have also accepted a cap on the all-farm REPS payment. In other words, if a farmer had 1,000 acres or 400 hectares of land, he had to keep all of it in good environmental order, but only got paid on the first 100 acres or first 40 hectares. The idea of a cap is nothing new. What a cap did was ensure we could pay new young farmers etc. By capping the payment, we could pay more farmers rather than take money from every farmer's payment.

It is important to put the figures on the record of the House. Some 80% of farmers get less than €15,000 of a single payment and there are strong numbers of those farmers in every county in the country. The question is whether the policy on single payment is for the 80% or includes them or whether we are we really saying the policy is for the top 10% or 20%. As the Minister knows, the top 2% of farmers get more than the bottom 52,000 farmers. Is that fair and equitable? Are the people with the best and the most land the ones who need the subsidy? If that is so, there is something fundamentally flawed with our agricultural system. If they cannot make a commercial profit with some single payment from their farms, how can we expect the people on the less favoured land to survive at all? Does the Minister believe that the payment of €3,000 somehow hugely compensates these farmers for the poor quality of their land?

Another flaw in both the Minister's and the Commissioner's policies relates to payment per hectare. With regard to this payment, some 66% of farmers get less than €300 per hectare. The mean figure is €261, without deductions. This is a much lower figure than the 80% who get less than €15,000. Therefore, what we have in this country are farmers with little land and very low payments per hectare. The Commissioner is dealing with that. He says that if they have little land and low payments, the solution is to increase their payment because of having disadvantaged land. However, he if he moves to flat rate payments, he will not deal with the fact that we have a lot of farmers - like those on the east coast where land is better, from Louth down to Wexford - whose farm size is quite small. When we look at counties such as Kilkenny, Waterford, Wexford and Carlow, the counties with the highest number of single farm payments, we find a huge number of farmers who receive high payments per hectare, but a low number of hectares. In the tug of war going on between the Minister and the Commissioner, I am afraid that what will happen is that the Commissioner will win out with regard to the flat rate payments and that both of them will leave these farmers behind. I believe significant flattening will take place, more than outlined by the Minister.

If this happens - we are aware the average farm size in Ireland is 32 hectares - we must ensure there is an extra top-up payment on the first 32 hectares so that small intensive farmers, farmers with 30 or 40 cows or a small suckler herd, are protected. The only way to protect them is to ensure the possibility of a redistributive or front-loaded payment. This should be more significant and much higher than the 30% proposed in the Presidency document.

There has been significant mention of two words, "productive" and "active". I am willing to define those words and have defined them at meetings. I see "production" as producing as much as is possible, given the land circumstances in which a farmer finds himself. Most people farm the land in the area in which they were born. I see the word "active" as meaning the farmer farms his land actively. I believe the small number of people who have land but are not using it in a meaningful way should be cut out of the scheme. I believe there should be a minimum stocking level and that this level should relate to the quality of the land.

I am suggesting four categories of land quality: non-designated land, less favoured areas, severely disadvantaged areas and mountain land. Much more accurate data will be available for these purposes after the areas of natural constraints survey has been completed. I am proposing that livestock farmers not be able to drawn down payments without meeting the minimum stocking requirement that would apply in each of these four categories. This approach does not link the payment to production - it links it with a minimum requirement already in place under the disadvantaged areas scheme. The mistake made under that scheme was that the lowest common denominator was used. I am suggesting that only in the event of an ecological order from the State would farmers be exempt from having to achieve these basic minimum standards.

I would speak about many other aspects of this matter if more time was available to me. I have not even referred to Pillar 2. We need to discuss this process as it continues. I might disagree fundamentally with the Minister on philosophical issues, but I accept that he is amenable to debate. I hope we can have detailed ongoing dialogue on this issue at the Joint Committee on Agriculture, Food and the Marine. We should thrash it out as each step is taken. That is necessary if Oireachtas Éireann is to have a real input into the development of the Common Agricultural Policy.

See this speech in context