Michael Moynihan (Cork North West, Fianna Fail)
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Question 139: To ask the Minister for Agriculture, Food and the Marine if he will provide an update on Common Agricultural Policy post 2013 reform; the anticipated impact on the single farm payment; the status of Common Agricultural Policy budget negotiations; and if he will make a statement on the matter. [23455/12]

Simon Coveney (Cork South Central, Fine Gael)
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Since their publication last October, the Commission's proposals have undergone two rounds of detailed technical examination at Council Working Group level. The Danish Presidency has begun to produce revised texts in some areas, which reflect where it feels Member States are broadly in agreement on some issues, but which do not yet necessarily equate to final compromise texts. In the meantime, key policy issues within the reform such as direct payments, greening and simplification have also been discussed by the Council of Ministers and by the Special Committee on Agriculture. Negotiations will continue at technical and political level over the next year or more, and it is very likely that the current texts will change considerably before final agreement is reached.

In a parallel process, negotiations on the new Multiannual Financial Framework (MFF) for the EU budget for the period 2014 to 2020 have begun to gather pace, and will be progressed primarily through the General Affairs Council before being decided ultimately by the European Council

These issues are also being discussed in the European Parliament, and will be the subject of reports from rapporteurs on each of the four draft CAP regulations. The CAP reform is subject to co-decision, and therefore the Parliament will be a full partner in any final agreement that is reached. As a Member State taking over the reins of the EU Presidency in January 2013, Ireland is committed to playing an active and constructive role in securing agreement on the reform of the CAP.

The Deputy rightly points to the CAP budget and the impact of the Commission's proposals on the system of direct payments as two of Ireland's key priorities.

On the budget, it is my view that a strong Common Agricultural Policy will make an important contribution to European economic recovery in the years ahead. In order to guarantee a strong CAP, commensurate resources need to be devoted to it. I believe that the funding proposals in the MFF, which maintain CAP spending at current levels in nominal terms post-2013, represent a good starting point. However, it is the case that the agriculture heading is the one showing the greatest restraint, and in my view the amount proposed by the Commission is the minimum required. It is also the case that there are continuing, and intense, pressures in the MFF negotiations for reductions in the proposed overall EU budget, with obvious implications for proposed CAP allocations. These pressures must continue to be resisted.

On the potential impact of the Commission's proposals for distribution of direct payments within Member States, the Commission proposal is to gradually move away from payments based on historical production references towards a system of uniform per hectare payments, or flat rates, by 2019, in each Member State or region of a Member State. Many Member States already have such flat rates or are evolving towards them. I recognise that we cannot continue to base our payments on outdated historic production references. Nevertheless, I have major difficulties with the pace and extent of convergence in the Commission's proposal.

Under a national flat rate, around 76,000 Irish farmers would gain an average of 86% on their current payments, while around 57,000 would lose an average of 33%. These are average percentages, and some of the gains and losses would be far larger than this. In general it is clear that the losses would be incurred by more productive farmers. This would have undesirable consequences at a time when Ireland is trying to encourage sustainable intensification in the agri-food sector, as we strive to achieve the objectives in the Food Harvest 2020 strategy.

I have accordingly been pressing for the maximum possible flexibility to be given to Member States to design payment models that suit their own farming conditions, and to adopt a more gradual, back-loaded transition process, rather than the very rapid, front-loaded approach proposed by the Commission.

I would like to have the possibility of putting a limit on the amount any farmer could lose in any redistribution. This would be consistent with the Commission's desire to achieve a more level playing field, but would avoid a disruptive level or pace of change. The 'approximation' approach, by which all payments could gradually move towards, but not fully to, the average, is one alternative that I believe should be considered in this regard. The Commission's "pragmatic" proposal for redistribution between Member States is, in effect, an approximation approach and provides a useful precedent.

I have been very active in seeking allies for this position, and I have been making significant progress, particularly with a group of Member States with somewhat similar concerns. However, it should also be understood that a majority of Member States have no difficulty with the idea of flat rate payments, although they have concerns about other aspects of the proposals.

The negotiation process on CAP is a complex and difficult one, but all of my efforts are focused on achieving the best possible outcome for Ireland. These efforts will be continued over the coming months as the process evolves, and will further intensify during our Presidency, during which Ireland will work with other Member States, and with the European Parliament and the Commission, to secure an agreement that will provide an appropriate policy structure for the agri-food sector over the coming years.