Éamon Ó Cuív (Galway West, Fianna Fail)
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238. To ask the Minister for Agriculture, Food and the Marine the amount of money that would be available for re-distribution under the single farm payment scheme common agricultural policy reform if the maximum payment for the single farm payment was set at €400 per hectare; and if he will make a statement on the matter. [35772/13]

Éamon Ó Cuív (Galway West, Fianna Fail)
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239. To ask the Minister for Agriculture, Food and the Marine the amount of money that would be available for redistribution under the single farm payment scheme common agricultural policy reform if the maximum payment for the single farm payment was set at €450 per hectare; and if he will make a statement on the matter. [35773/13]

Simon Coveney (Cork South Central, Fine Gael)
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I propose to take Questions Nos. 238 and 239 together.

The CAP reform agreement on 26 June provided two options for Member States in relation to the internal convergence of direct payments: either a flat rate per hectare payment (the Commission’s proposal) or partial convergence (Irish model). Under partial convergence, farmers with payments below 90% of the national average payment per hectare will have their payments raised by at least one third of the difference between their current payment and 90% of the national average by 2019, with a minimum payment of 60% of the national average per hectare by 2019. This is financed by reductions to payments above the national average payment per hectare. Member States have flexibility as to how payment reductions are applied to those above the average, provided this is done on the basis of objective and non-discriminative criteria to be determined by Member States. Member States may also apply an optional maximum 30% loss on convergence in 2019 when compared with the unit value established in 2015

Table 1 below shows the effects of partial convergence with a minimum payment of 60% of national average, resulting in a transfer of €103m from convergence. However, the following caveats should be noted in relation to this table:

a) This analysis is based on 2010 SPS payments, and looks at the effect of convergence alone, rather than taking account of other adjustments to payments. It represents the position when the reform is fully implemented in 2019, without taking these other adjustments into account. This approach has been adopted to isolate the impact of various convergence options so that they can be assessed without being conflated with other necessary adjustments which are explained below.

b) Total 2010 payments of €1,250m, on which the table is based, have already been reduced to €1,230m in 2012 (due to an increase in the rate of modulation). Payments made in October 2013 will be further adjusted to respect the ceiling for 2014 agreed as part of the MFF negotiations (€1,217m). The ceiling for the following years is set as follows:

The ceiling cuts arising from the MFF will therefore be in place by the end of this year, in advance of the other changes arising from CAP reform.

c)The following adjustments will also need to be made to the total ceiling before convergence is calculated:

- Young farmer scheme – up to 2% of national ceiling

- National reserve – up to 3% of basic payment ceiling

- Crisis reserve – 1% of national ceiling (repaid if unused).

Note that funds for young farmers and the national reserve will directly benefit Irish farmers, specifically young farmers and new entrants. The crisis reserve will apply to the EU as a whole, with Irish farmers as likely to benefit as those in other Member States.

d) If a Member State opts to implement additional schemes such as the Redistributive Payment or Voluntary Coupled support, these amounts would also be deducted from the national ceiling before the convergence calculation is applied, i.e. convergence is calculated on the basic payment scheme with consequential impact on the greening payment.

e) The convergence calculation will in practice be calculated using the revised ceilings, and taking account of the adjustments listed above. Therefore the national average per hectare and the minimum payment of 60% of national average for the convergence calculation will be adjusted accordingly and will be different from those in Table 1.

f) Table 1 is prepared on the assumption that convergence reductions are applied proportionately; in fact, as stated above, the June agreement gives Member States flexibility in how the convergence reduction is applied to farmers above the national average.

Table 2 blow summarises the estimated effect of adding a maximum payment per hectare of €400 or €450 to the calculations in Table 1:

A maximum rate per hectare of €400 in 2019 would have roughly the following effects:

- Around 7,600 farmers (those currently above €500/ha) would be affected.

- It would raise additional savings of €32 million in addition to the proportional reductions already applied to these farmers; presumably these savings could be used to adjust the proportional reduction applied to the remaining farmers above the national average.

- The percentage reductions applied to farmers in the highest payment categories would be increased considerably by adding a maximum payment per hectare.

A maximum rate per hectare of €450 in 2019 would have roughly the following effects:

- Almost 5,000 farmers (those currently above €550/ha) would be affected.

- It would raise additional savings of €17 million in addition to the proportional reductions already applied to these farmers.

Table 1: Partial convergence with a minimum payment of 60% of national average, based on 2010 payments database

Table 2: Estimated additional effect of imposing a maximum rate per hectare of €400 or €450

Max €400/ha

Max €450/ha