Martin Ferris (Kerry North-West Limerick, Sinn Fein)
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50. To ask the Minister for Agriculture, Food and the Marine his views on whether the statistics on stocking density do not support the claim that higher rates of single farm payment reflect much higher levels of productivity; if he will take this into account when deciding on which model to use to determine the new farm payments system; and if he will make a statement on the matter. [39616/13]

Simon Coveney (Cork South Central, Fine Gael)
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My Department has used stocking density as one measure of agricultural productivity. While stocking density does not represent all the elements of agricultural productivity, it is a tangible and precise measurement of activity for which data from my Department are readily available. I am aware that Deputies have received these data.

Previous analysis by my Department has found that, using average results per payment category, farmers on payment rates per hectare above the national average have roughly double the stocking density of those below the average. However, they also show that the stocking density of farms on the very highest payment rates - for example, more than €500 per hectare - is not significantly higher than the stocking density of farms just above the national average. This data suggests that while some level of convergence is justified, a complete flattening of direct payments, as originally proposed by the European Commission, is not justified.

Following the successful completion of the negotiations on reform of the Common Agricultural Policy, CAP, under the Irish Presidency, I launched a consultation process with all relevant stakeholders to ascertain their views on the most appropriate application of the direct payment regulation in light of Ireland’s unique agricultural profile and circumstances. As I indicated, the final date for submissions on the consultative paper was 20 September. The process of analysing all submissions will now begin in conjunction with the ongoing modelling of the various options that are available to Ireland.

There is an ongoing and divisive discussion on this issue. Farmers who are gaining from the new measures wish to maximise their gains, while farmers who are losing want to minimise their losses. I have been transparent in this matter and have travelled around the country selling the new model, under which payments will be redistributed gradually over time. Farmers in receipt of the highest payment will be asked to meet the cost of increases for those in receipt of the lowest payments. We added to this mechanism in the final agreement by guaranteeing a minimum payment of at least 60% of the average.

We have also included an option of introducing a maximum payment per hectare, an issue in which the Deputy has shown an interest, having asked questions on it previously. While I support this option in principle, I do not wish to give an absolute commitment until the consultation process has been completed. By the time the current Common Agricultural Policy has run its course, we will have seen a dramatic redistribution of supports among farmers. This will be done in a fair and gradual manner. While the most productive farmers will, in general, continue to have the highest payments, the gap between the highest and lowest payments will be much narrower.

Martin Ferris (Kerry North-West Limerick, Sinn Fein)
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The statistics on stocking density show significant differences in respect of those in receipt of higher payments and those on lower payments. For instance, farmers with an average single farm payment of €282 per hectare have an average stocking density of 1.47, whereas those in receipt of an average payment of €1,180 per hectare have an average stocking density of 1.92. Slightly more than 200 farmers receive a single farm payment in excess of €100,000 per annum and the amount paid to this group is €33 million per annum. A further 1,800 farmers receive a single farm payment of between €50,000 and €100,000. The small number of recipients on higher payments receive more in total than the 52,000 farmers who receive payments of less than €5,000 per annum.

Would the Minister not agree that it is unfair to have that kind of disparity between those over €100,000 and those less than €5,000?

Simon Coveney (Cork South Central, Fine Gael)
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The straight answer is "yes" that it is unfair and we will change it. However, I am not sure we will change it to the extent that the Deputy would like. We must work within the parameters of the rules that have been agreed under the CAP. At yesterday's meeting the Council of Ministers made a final decision on the capping of payments. Some very large member states have taken a very strong stand against any mandatory capping of payments. States such as Ireland have argued that there should be capping. So we will be able to introduce a voluntary cap for payments over €150,000 - not under that - if that is agreed with the Parliament today. We could also introduce a per-hectare cap on payment, which we may well decide to do. I am very much open to considering that as I have said previously. Should farmers receive payments of more than, for example, €700 when there are also farmers on a minimum payment of €145 to €150 per hectare? Those are the kinds of questions we can tease out in the consultation process, but I am looking at the issue.

Currently, at the start of this process, there are farmers on €40 per hectare and farmers on €1,400 per hectare. At the end of this process the likely scenario is that no one will be on less than €145 to €150 per hectare and very few, if any, will be on more than €700 per hectare. There is a significant squeezing towards the average while also recognising that the most productive farmers in the country need the supports to allow them to grow and expand.

Martin Ferris (Kerry North-West Limerick, Sinn Fein)
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I welcome what the Minister said about bringing the payments closer together and trying to look after weaker farmers to allow them to be viable and survive. Is capping the payment at €150,000 written stone or can it be negotiated? Do individual states have the flexibility to introduce their own cap on payments? It is not right for anyone to get more than €100,000. We should reduce that figure. It does not make any sense that 200 farmers get more than €100,000, totalling €33 million. We should have the flexibility to reduce the CAP payment ourselves. I welcome that the Minister is raising the minimum and reducing the overall payment.

Simon Coveney (Cork South Central, Fine Gael)
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It is important for people to know what is possible and what is not possible. We have previously discussed putting a ceiling on payments of €100,000. In principle I agreed with that and I am on the record as having said that. We now have an agreement with other Ministers. Some countries, in particular Germany and the UK, wanted no capping at all and have only agreed to a 5% degressive payment over €150,000, which represents very limited capping. We have also agreed that on a voluntary basis member states may have a degressive payment of up to 100% - in other words no payment above €150,000. However, there is no provision allowing us to introduce a cap under that. The reason is that we have a Common Market in which big farmers are competing with big farmers in other parts of Europe in the same marketplace. There was a view that we need to try to maintain a level playing field on direct payments available for farmers. I would not have had an issue if the agreement at ministerial level was for a cap at €100,000. However, that is not the position - the position is €150,000. We will decide whether we choose to reduce payments above that figure or to cap payments at that figure, as we will decide everything else at the end of the consultation process.