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  1. 1. EU agriculture policy reform:Implications for Irish agriculture Mairead McGuinness MEP Clonmel, Co. Tipperary. March 8, 2012
  2. 2. Content of presentation• EU Budget 2014-2020• Proposal for reform of Direct Payments• Rural Development• Market Measures• Key areas of concern for Ireland• Process/timing
  3. 3. Budget• Multiannual Financial Framework (MFF)• Difficult negotiations• Agriculture budget set at 2013 levels-proposal• Economic crisis backdrop• Agriculture 40% EU Budget, 0.5% EU GDP
  4. 4. Budget 2• Ireland: €1.8 billion from CAP budget• Direct Payments: €1.3 billion• Rural Development: €350 million
  5. 5. Budget 3• Additional funding for agriculture under research and innovation budget, food safety, food for deprived persons• European Globalisation Adjustment Fund• Crisis reserve in agriculture sector
  6. 6. Redistribution of Direct Payments • Fairness between Member States • Closing the gap: Commission proposal to bring Member States below 90% of the EU average payment one third of the way to 90% • By reducing funds to Member States above 100% of EU average
  7. 7. Redistribution of DP - Closing one third of the gap between current level and 90% of EU average by 2020 EUR/ha 800 700 600 500 400 300 200 100 0 om a Fi ic el s 7 ia ze Hu ria d um a R ary P kia in in S ark Ir g he lta om l lo d G ly er ia Sw n d ul n L u Fr y ria e ia D rus m ce R ga -2 nd Li ani ni e an ec an n ur l Ita on tv n d Spa ub et Ma xe an ed t la a ga gd EU va tu ua ve gi m ch ng us yp bo re La m rla nl el st Po ep or en lo th A C E B B S K G N te ni C U DP new distribution (EUR/ha)** DP status-quo (EUR/ha)* EU-27 average (EUR/ha) 90% of EU-27 average (EUR/ha)Source: European Commission
  8. 8. Redistribution within Member States• Move to flat rate payment/ha by 2019• Member States at different starting points• 8 Member States with historic based payments• Convergence
  9. 9. Distribution of SFP payment per hectare in Ireland Number of Farmers 30000 28504 25000 20000 15641 15253 14965 15000 13928 11924 9590 10000 6568 5000 3874 2961 783 1401 812 383 0 from from from from from from from from from from from from from € 1,000 €20 < €50 < €100 < €150 < €200 < €250 < €300 < €400 < €500 < €600 < €700 < €800 < €900 < + €50 €100 €150 €200 €250 €300 €400 €500 €600 €700 €800 €900 €1,000 Per Hectare PaymentSource: Department of Agriculture
  10. 10. DIRECT PAYMENTS BY COUNTY 2011 COUNTY FARMERS AMOUNT PAID AVERAGE PAYMENT PER COUNTY CARLOW 1,622 €25,107,834.28 €15,479.55 CAVAN 4,722 €35,907,064.33 €7,604.21 CLARE 6,015 €48,399,815.92 €8,046.52 CORK 12,725 €169,099,714.81 €13,288.78 DONEGAL 7,894 €48,357,574.53 €6,125.86 DUBLIN 618 €9,198,332.84 €14,884.04 GALWAY 11,771 €80,254,970.11 €6,818.02 KERRY 7,565 €59,156,334.39 €7,819.74 KILDARE 1,998 €31,968,253.40 €16,000.12 KILKENNY 3,409 €56,161,311.13 €16,474.42 LAOIS 2,891 €41,178,085.34 €14,243.54 LEITRIM 3,333 €17,564,384.92 €5,269.84 LIMERICK 5,077 €52,831,303.84 €10,406.00LONGFORD 2,338 €20,075,675.78 €8,586.69 LOUTH 1,477 €20,115,667.82 €13,619.27 MAYO 11,224 €60,331,376.10 €5,375.21 MEATH 3,672 €56,488,776.17 €15,383.65MONAGHAN 3,920 €31,081,026.47 €7,928.83 OFFALY 2,990 €36,928,270.87 €12,350.59ROSCOMMON 5,605 €40,918,155.00 €7,300.30 SLIGO 3,887 €23,056,679.91 €5,931.74TIPPERARY 6,815 €101,716,195.67 €14,925.34WATERFORD 2,380 €39,443,004.31 €16,572.69WESTMEATH 2,907 €34,187,326.09 €11,760.35 WEXFORD 3,974 €61,908,491.77 €15,578.38 WICKLOW 2,037 €28,088,781.40 €13,789.29 TOTAL 122,866 €1,229,524,407.20 €10,007.035
  11. 11. Direct Payments post-2013• Current entitlements abolished December 2013• New entitlements established in 2014 based on hectares farmed in 2014 - linked to 2011 application• Value established by complex formula
  12. 12. New entitlements• National envelope - Greening 30% - Young farmers 2% - Recoupling 5% - Areas of natural constraints 5% - National reserve 3% - Small farmer scheme - Basic payment
  13. 13. Convergence• Flat-rate payment per hectare by 2019• Greening payment• Further 40% flattening• Massive redistribution between farmers• Impact on production
  14. 14. Greening of CAP• 30% of budget• 3 greening criteria: - Crop diversification – 3 crops, min. 5%, max. 70% - Maintenance of permanent grassland - Ecological focus areas = 7% eligible area i.e. field margins, hedges, trees, fallow land, buffer strips, landscape features• Extra bureaucracy
  15. 15. Active Farmer Definition• Defined at EU level: Court of Auditors• Does not apply where Direct Payments are less than €5,000• No payment where: • Direct Payment makes up 5% of total receipts in most recent fiscal year • Do not carry out minimum activity
  16. 16. Capping of Direct Payments• Maximum Single Farm Payment - €300,000• Amounts reduced as follows: – 20 % between €150,000 and up to €200,000 – 40 % between €200,000 and up to €250,000 – 70 % between €250,000 and up to €300,000 – 100 % for amounts in excess of €300,000 – salaries paid are subtracted when establishing the threshold payment• Excludes greening payment
  17. 17. Rural Development• Six EU-wide priorities: – knowledge transfer and innovation – enhancing competitiveness – food chain organisation and risk management – focus on ecosystems – resource efficiency and climate friendly agriculture – promoting social inclusion and economic development in rural areas
  18. 18. Rural Development projects• European Innovation Partnership (EIP)• Farm Advisory Services• Young farmers: – Start-up grants – Training and advisory services• Business start-up for small farmers• Risk management: animal disease mutual fund, weather and crop insurance.
  19. 19. Funding• Co-financing: – Training & advisory services – 50% in regions for most payments (85% - outermost regions)• Higher co-financing rate - up to 80% for: – Training, advisory services, knowledge transfer and information actions – Start-up for young farmer and producer groups – LEADER• Up to 100% co-financing for innovative actions - financed with funds from capping in Pillar I• Minimum of 5% to be spent on LEADER• Minimum of 25% for climate change mitigation and adaption and land management measures
  20. 20. Market Measures• Measures as a safety net• New safeguard clause for all sectors - enables Commission to take emergency measures• Crisis reserve fund (existing outside the CAP)• Sugar regime expires September 2015• Milk quota abolition• Recognition of Producer Organisations and inter- branch organisations extended to all sectors
  21. 21. Irish position• Maintain share of CAP Budget• Timeframe for convergence• Flexibility• Greening• Active farmers• Market measures
  22. 22. Approximation• Based on Commission approach to redistribution between Member States• Irish model: maximum gain of 25%, maximum loss of 15% – highest gains for those on lowest payments – highest losses for those on highest payments
  23. 23. Negotiating Process• Co-decision• Timeframe – Council and Parliament digesting proposals• Response by summer• Agriculture Committee of EP vote on position in autumn• Negotiations with Council early 2013 – Irish Presidency
  24. 24. “Long term prospects for agriculture will notimprove if farmers cannot reverse thesteadily decreasing trend in their share of thevalue added generated by the food supplychain. Indeed, the share of agriculture in thefood supply chain has decreased from 29%in 2000 to 24% in 2005, while over the sameperiod the share of the food industry,wholesale and the distribution sector have allincreased”Source: European Commission Communication on the CAP
  25. 25. Thank You.

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