Éamon Ó Cuív (Galway West, Fianna Fail)
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49. To ask the Minister for Agriculture, Food and the Marine the position regarding Common Agricultural Policy reform; and if he will make a statement on the matter. [39744/13]

Simon Coveney (Cork South Central, Fine Gael)
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Political agreement between the three European institutions on reform of the Common Agricultural Policy was reached under the Irish Presidency in June, with final details expected to be agreed with the European Parliament, hopefully this afternoon. There is a final trialogue between the Parliament, the Commission and the Council which finalised its position yesterday in terms of those negotiations.

The reform addresses three broad themes. First, there is a greater emphasis on sustainability and on further strengthening the environmental credentials of the CAP, through the greening of direct payments and the requirement to support agri-environmental measures in rural development programmes. Second, generational renewal is given a much greater focus, with new and enhanced support for young farmers under both pillars of the CAP and third, there is a continuing move towards greater market orientation, through the phasing out of production quotas for key products and the use of market support measures as a safety net in the event of severe market disturbance. In addition, considerable flexibility is granted to member states under the reform to pursue targeted policies under both Pillar 1 and Pillar 2 that are suited to their individual circumstances and agricultural production systems. Most importantly from an Irish perspective, this extends to the way in which direct payments are to be redistributed between farmers, which will allow us to achieve the twin objectives of making the direct payments system fairer for those currently on low payments, while not undermining the efforts of those on higher payments to develop their farming enterprises.

It is up to member states now to get on with the implementation of the reform. I launched a consultation process with all the relevant stakeholders and other interested parties in July and by the closing date of last Friday, 20 September, 37 responses had been received. I and my Department will consider these submissions over the coming weeks and I intend to formulate and publicise the final shape of the new direct payments system. In my answer here it states "towards the end of 2013" but I hope to do it considerably earlier than that.

In regard to Pillar 2, preparatory work for the next Rural Development Programme 2014-2020 is already well under way. An initial stakeholder consultation process was launched in 2012 and written submissions were received from over 80 stakeholders. A second consultation was held in July where stakeholders attended a full-day workshop. Based on the outcome of these processes, the drafting of a new programme will be advanced in my Department before the end of the year.

Éamon Ó Cuív (Galway West, Fianna Fail)
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Like the Minister, I also wish those involved in today's discussions well. In the interests of farmers I hope they come to a conclusion.

Can the Minister confirm that there will be full co-funding of Pillar 2 payments from the Exchequer? Does he propose providing a national top-up as sought by some of the farming organisations> Will he confirm that it is not proposed to fund the forestry expansion scheme and premia from the rural development programme and that it will continue to be fully funded from the Exchequer?

Simon Coveney (Cork South Central, Fine Gael)
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The Deputy's questions are all very relevant. I, too, hope we can conclude the discussions and finalisation of the agreement with the European Parliament today. What is currently being finalised relates to multi-annual financial framework decisions by Heads of States in terms of issues such as transfer between pillars and a number of other issues around capping, in which I know Deputy Martin Ferris also has an interest. I hope we can reach final agreement with the Parliament on those issues which remain outstanding.

On the co-financing issue, about which I have been asked repeatedly, there are a number of different co-financing rates available to Ireland because the Commission is trying to encourage member states to ensure they spend money on particular issues. For example, a 75% co-funding rate will be applied to environmental schemes and a co-funding rate of 53% will be applied to other schemes. It is no surprise that I would expect the Department of Public Expenditure and Reform to ensure that, first, all of the money is drawn down and, second, that we maximise the highest level of co-funding available for Ireland. We need to take this into account, of course, but my first priority is to ensure we are spending as much money as we can in rural Ireland on the schemes that can give us the biggest bang for our buck. It is too early for me to say we will have a 50:50 co-funding of all expenditure. However, I can assure the Deputy we will be ensuring all of the EU money available under Pillar 2 will be fully drawn down and we will co-fund to the extent necessary to ensure that happens and, one hopes, in the years ahead, go well beyond that, as previous Governments did when they added significant top-ups from the Exchequer to rural development programmes.

On the forestry issue, it is unlikely we will include forestry expenditure in the rural development programmes. However, I do not wish to rule anything out until such time as our approach has been finalised following the public consultation.

Éamon Ó Cuív (Galway West, Fianna Fail)
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I welcome the firm commitment that all EU funds will be drawn down. Obviously, we want to get as much money as possible, but we also need to look at what schemes will provide the best bang for farmers' buck. That is a matter we can debate in more detail some other day in another forum. It should be recognised that the Minister has stated clearly that there will be full drawdown of EU funds.

Simon Coveney (Cork South Central, Fine Gael)
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Yes.

Éamon Ó Cuív (Galway West, Fianna Fail)
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In regard to Pillar 1, can the Minister confirm that he does not propose to go down the route of regionalisation or the reduction coefficient? Will he outline the objective basis on which he favours a variable greening as opposed to paying everybody the same amount for the same work in terms of ecology?

Simon Coveney (Cork South Central, Fine Gael)
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I do not propose to make any absolutes today in terms of commitments because I believe that would make a farce of the consultation process. Deputies will be aware of my views on most of these issues, which may or may not change following conclusion of the consultation process. I would be very slow to introduce a reduction coefficient to parts of the country. The reason Ireland fought hard for acceptance of the redistribution model is because we want to try to keep the entire country under the same payment model rather than take money from people because they farm in mountainous areas and so on. I am not inclined to that unless there are very persuasive arguments to do so. The same reasoning would apply to breaking Ireland up into different regions and giving different payments per hectare within different regions. I believe that would cause a great deal of division within Irish agriculture and I do not want to do that unless I have to. I think that is unlikely to happen but one cannot rule anything out.

On variable greening, we have made the case that if one is to incentivise farmers to adopt the new greening measures, those who receive the highest payments - generally, the most productive farmers - need to be offered an incentive to abide by the greening measures. This should be done by linking the payment to their single farm payment. To do otherwise could result in farmers on high single farm payments receiving a very small greening payment. This would have little, if any, incentive attached to it if the amount were small. On the other hand, a farmer on a low single farm payment who had a much higher greening payment in percentage terms would have a much stronger incentive to comply with the greening criteria. It makes more sense to link the greening and single farm payments. Setting the level of the former at 30% of the latter creates an incentive for every farmer to comply.