Charlie McConalogue (Donegal, Fianna Fail) | Oireachtas source

I thank everyone for their contributions. It has been a very constructive debate. I look forward to more of these discussions as the new CAP evolves and then, hopefully, if we get agreement at the end of this month, as we put together our national CAP plan from that point onwards. The CAP ensures that our farmers can continue to farm, that we produce the highest quality food and that we have a balanced regional economy. I refer to money coming into a farmyard staying in the locality.

In the early hours of this morning, I returned from discussions in Lisbon with my European colleagues. We discussed how we can best deliver a CAP that will work for all farmers in Ireland, one we can shape ourselves and that we will not have dictated to us.

Other Ministers share my concerns regarding the overly prescriptive approach prescribed by the European Parliament. This is a critical point to which I referred earlier. The European Council is approaching the talks to achieve a CAP deal with a desire that we feel the European Parliament, unfortunately, has not shown. The final negotiations under the Portuguese Presidency will take place at the end of June in Luxembourg. We must reach an agreement which allows us flexibility in many of the key areas. I want to be able to develop, as I have outlined in several responses to questions, a CAP national strategic plan that best suits Ireland and Irish farmers and their families.

The CAP is expected to achieve a lot, but it cannot do everything. Everyone has a role to play. We need all elements of the industry to play their parts and, fundamentally, the market must recognise and reward positive change. Farmers embracing new standards in animal welfare or environmental actions need support and not just from the CAP. Fundamentally, these changes must be led by the market and supported. Industry must make the choice to support farmers who strive for higher standards and consumers must decide to reward that effort by choosing to pay for it. The CAP budget will do a lot, but we need a market response to ensure success. Many Deputies are concerned that farmers are being asked to do more, but many environmentally-friendly practices can also support more cost-effective approaches by farmers. This has been demonstrated by programmes run by the farm organisations themselves.

My focus in introducing eco schemes will be to ensure that they are straightforward to understand and simple but effective to implement. Farmers must understand what they are being asked to do and why. I hope all farmers will see the value of participating in these schemes. The numbers of farmers applying for the new REAP scheme demonstrates farmers’ willingness to engage and their genuine interest in environmental matters. Farmers understand the importance of sustainability. They receive their farms from the previous generation and hold them in trust for the next. Farmers do not need a lecture, but they do want clarity and my aim is for them to have this and to be fully consulted throughout this process.

The original proposals for the CAP budget included significant funding cuts. In the teeth of strenuous opposition, Ireland succeeded in reversing those serious proposed cuts to the EU budget for the CAP. The result of those negotiations is that funding for Ireland from 2021-2027 will be €10.74 billion, in current prices. This is an increase, compared to the original allocation of €10.68 billion for the current period. However, we must acknowledge that increased environmental and climate ambition across all policy areas was a key factor in getting agreement on the overall EU budget. This has been a strong demand of citizens across Europe and it is central to the new European Green Deal.

While there will be a certain element of change, our farmers need not fear this as they are already pioneers in this regard. Nationally, we will also have to consider the issue of Exchequer funding to provide the co-financing required to draw down EU funding. I assure the House that I will not be found wanting in seeking the necessary funding to support these objectives. Regarding enhanced baseline conditionality, this is part of the enhanced standards for the environment in the next CAP. This is a process which is familiar to most farmers and we already have in place well-understood systems regarding inspections. Again, I emphasise that the Council position supports member states in having national flexibility with regard to the definition of the national standard. There are some new standards, such as the new good agricultural and environmental condition, GAEC 2, for the protection of wetland and peatland.

I have already spoken at length on this issue to the House and I have always been clear about my stance on GAEC 2. I want to bring in a national standard that provides for appropriate farming activities to continue on this land. It has always been the view of the Council that farming, in a suitably environmentally friendly way, can take place on these lands. I listened carefully to the fears expressed regarding the implications of GAEC 2 and I raised this issue directly when the Council last met in May to seek to ensure that the final language regarding GAEC 2 is very clear on this point. My colleagues agree with this and it is my view that the final language on GAEC 2 will now be very clear on this point. As the son of a farmer from GAEC 2 lands, I know how rich these soils are and how they can work for the benefit of farm families.

Regarding the social dimension, I want to be clear that I fully support the proper implementation of full employment legislation. As less than 10% of Irish farms employ labour, this is unlikely to be a significant issue for Ireland. However, I have concerns about how this issue, which is very different from traditional conditionality, can be incorporated, as it is currently being considered, within the CAP. I will continue to highlight these complexities as we aim to reach the conclusion of the CAP in the next couple of weeks. Our national CAP strategic plan will include full consideration of the issue of support for young farmers. The challenge of generational renewal exists across the entire European Union and the issue of what level of funding will be allocated is still being considered as part of the negotiation process.

Currently, a series of measures are in place to support young farmers. The national reserve and the young farmers scheme provide financial support to young farmers during the crucial early years when they are setting up. Under the targeted agricultural modernisation scheme, TAMS II, young farmer capital investment scheme, young farmers can avail of a 60% grant rate, in contrast to the standard rate of 40%. Support is also available for collaborative farming to cover legal costs incurred.

Ireland has invested significantly at national level through several significant taxation measures which are available to young farmers. These initiatives include agricultural relief from capital acquisitions tax, CAT; retirement relief from capital gains tax, CGT; stamp duty exemptions on transfers of land; a €25,000 tax credit under the succession farm partnership scheme; long-term leasing income tax relief; and 100% stock relief on income tax for certain young trained farmers.

In total, €228 million is provided annually across the various national tax reliefs. I certainly consider that this demonstrates strong support for young farmers.

Much has been said about redistribution and the need to support family farms. I agree that we need to support them. I have made my views on the capping of large payments very clear and have succeeded at the Council negotiations in obtaining greater national flexibility in this regard. Indeed, it is my stance and the stance of this Government which has led the way in terms of capping. We must recognise that our farm structure is much more balanced than many other member states. The 80-20 rule relating to farm payment distribution simply does not apply in Ireland. We only have a small number of very large farms. Even farms involving company structures are often owned by parents with one child farming full-time. Equally, just because someone works part-time or even full-time off the farm does not mean that they are not farmers. They still farm, contribute to their local communities and provide important public goods. The reality is that Irish family farms come in all shapes and sizes. The entitlements system, in place over many years, is complex. All redistribution proposals have the most impact on those farmers who have entitlement values above the average. There are farmers with high value entitlements who do not have overall farm payments above the average but, equally, there are farmers with low or average value entitlements who have overall payments that are much larger than the average.

Again, I thank all Deputies for their contributions . I look forward to further engagement as the process at national level evolves and, hopefully, as we get an agreement at European level that is satisfactory.

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