Michael Colreavy (Sligo-North Leitrim, Sinn Fein)
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To ask the Minister for Agriculture, Food and the Marine his views on whether a flat rate payment under the reformed common agricultural policy would benefit most Irish farmers. [48738/12]

Simon Coveney (Cork South Central, Fine Gael)
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The modelling carried out by my Department has shown that a flat rate system, whereby a flat rate would be applied throughout the country without breaking the country up into different regions, would result in 74,000 farmers gaining under the single farm payment while 56,000 farmers would lose. That is if we were to adopt the Commission's proposal and to designate Ireland as one big region in which one gives every farmer the same payment, which is the average payment of €270 per hectare. I believe that is very unlikely to happen. Even under the Commission's proposal, the Commissioner would be expecting countries such as Ireland to break their country up into different regions and to apply flat rate payments per region.

People are having a go at me because of the position I have taken on behalf of Ireland in disagreeing with the Commission's proposal. There is an idea that if we adopted the Commission's proposal, every farmer in the country would get €270 per hectare. That is not an accurate reflection of reality.

Single farm payment should not be treated purely as an income support measure or some type of welfare support measure. It was never intended to be that. Single farm payment is about supporting sustainable food production on farmland across Europe. It is a recognition payment for farmers who must abide by all manner of rules, regulations, directives, animal husbandry constraints and so forth which other parts of the world do not apply with the same rigour as they are applied in the EU. The roles of pillar 1 and pillar 2 are very different. The decision I have made in terms of how I have positioned Ireland in the negotiations is not about the number of gainers or losers, but about the best interests of agriculture as a whole over the next seven years to ensure we remain productive and competitive and keep people in the business.

Michael Colreavy (Sligo-North Leitrim, Sinn Fein)
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I am not making an attack on the Minister with regard to this. Our questions are designed to probe whether we are seeking the best outcome for this country. There are a number of other things we must protect. We must protect the number of small family farms in this country. There is a great deal of spin about this at present. There is substantial support in the west and north west for greater movement and a fairer distribution of payments within that. Most small farmers would favour a more rapid move towards a fairer system than is contained in the Minister's proposals. In 2011, 2,047 farmers on payments of €50,000 and more received more in total than the 52,000 farmers who received a single farm payment of €5,000. There is a patent imbalance there.

Michael Kitt (Galway East, Fianna Fail)
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Does the Deputy have a question?

Michael Colreavy (Sligo-North Leitrim, Sinn Fein)
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We argue that there should be a limit on the amount of money a person can receive. The Commission is talking about a limit of €300,000, which would not affect this country, but that should be a great deal lower. Many of the recipients of payments of €100,000 and more are not farmers at all but businesses.

There is a contradiction in the claims that somehow capping payments for a small number of large recipients would encourage them to cut down on production while increasing the payment for those at the lower end would apparently have the same effect.

Michael Kitt (Galway East, Fianna Fail)
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I must call the Minister.

Simon Coveney (Cork South Central, Fine Gael)
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I agree with a number of the Deputy's comments. On the distribution, the approach I have been advocating proposes the redistribution of approximately €80 million over the next round of CAP from people who have done well out of the pillar 1 distribution and farmers who have not done so well.

The higher the payment, the more one loses. At the high end we are losing more than 20%. Farmers with lower payments may gain hundreds of percentage points. The position Ireland has advocated is unlikely to be the final compromise. The debate will carry on for six to eight months before we get it right.

I agree with the Deputy in respect of capping and the Sinn Féin proposal for a cap of €100,000, which I heard Deputy Martin Ferris raise, is a good one. The current Commission proposal is for capping to begin at payments over €150,000 and to cease after €300,000. The idea that farmers are getting payments of over €150,000 in the single farm payment, regardless of the size of the farm, is not defensible. I do not disagree with the point of view expressed by Deputy Colreavy. Ireland is strongly supporting the Commission proposal in respect of capping. Powerful countries strongly oppose the idea and it is worth noting that only six farmers in Ireland will be affected by the capping proposals. That is why in discussions we have focused on areas that affect tens of thousands of farmers.

Michael Colreavy (Sligo-North Leitrim, Sinn Fein)
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What steps will the Minister take in his negotiations? There is a major fear that pillar 2 payments will be the first to be reduced or eliminated in the event of the CAP budget being reduced. What steps will the Minister and his officials take to ensure we are not disadvantaged by the overall allocation between pillar 1 and pillar 2, particularly the latter?

Simon Coveney (Cork South Central, Fine Gael)
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I am very concerned about the overall allocation for pillar 2 payments. We have a clear outline of what the Commission is proposing in respect of redistribution of pillar 1 payments between countries. Ireland was a significant contributor to designing the model, which is called approximation. With regard to pillar 2, it is very unclear and people are talking about using objective criteria and historical application of pillar 2 moneys. I made the case very strongly that the idea that Ireland would lose on both pillars is something we cannot support. Unfortunately, when Heads of State meet towards the end of the month to agree the multi-annual financial framework, the seven-year budget for the EU, and the amount of money allocated for CAP for pillar 1 and pillar 2, many of the key decisions on the amount of money countries can access will be taken by Heads of State. That is why I will be going to Brussels with the Taoiseach for the negotiations. Even though most of the talk has been about pillar 1 because we have more detail about the proposals, for much of the country pillar 2 is just as important, if not more important, than pillar 1. When we calculate how farmers have done per hectare in different counties, many of the calculations take into account solely pillar 1 moneys, single farm payments. When we add pillar 2 moneys to the calculation, the figures are very different.