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Basic Payment Scheme

Dáil Éireann Debate, Thursday - 26 April 2018

Thursday, 26 April 2018

Questions (2)

Martin Kenny

Question:

2. Deputy Martin Kenny asked the Minister for Agriculture, Food and the Marine his plans to introduce a flat-rate basic payments system based on a payment per hectare rather than the almost 20-year old system based on a historical reference year. [18344/18]

View answer

Oral answers (12 contributions)

As the Minister is aware, Commissioner Hogan this morning mentioned that the new CAP is going to be more made in Dublin than Brussels. Specifically, in the context of the basic payments under Pillar 1, the traditional method of referring to 2000 or 2001 to decide the amount of payment farmers will receive is almost 20 years old. Most farmers understand that it does not work anymore and a new system must be put in place. Is the Government prepared to consider the possibility of a flat-rate payment per hectare, some of which would be front-loaded to ensure that smallholders get the best payment possible in order to secure family farms?

The framework for the next CAP is set out in the European Commission's paper The Future of Food and Farming, which was published in November 2017. It is critically important that the CAP of the future serves all citizens of the European Union. It must support family farms and underpin the production of food to the highest standards of quality and safety. It will also be required to contribute to environmental sustainability and the development of rural areas.

In order to ensure that I have heard the views of Irish citizens on the future of CAP, in January of this year, I launched a public consultation process which included a series of public meetings as well as an opportunity to make written submissions.

I am aware of the various potential options for the future distribution of CAP payments, including consideration of a flat-rate payment system. In that regard, officials from my Department are currently assessing all possibilities around the effective targeting of direct payments in the context of CAP post 2020.

We are all interested stakeholders when it comes to our future food supply and the protection of our environment. With that in mind, my officials and I will continue to engage with the European Commission and other member states regarding the future CAP framework.

It is welcome that the Minister is considering the distribution of CAP payments and what options are available in that regard. We have had this discussion many times in the House and at committee. The current situation whereby entitlements are bought, sold, leased and used as commodities of a sort is inappropriate. We must have a flat-rate payment across the board in order that a farmer knows what payment he or she will receive for every hectare of his or her farm and those with smaller holdings would understand that this would be front-loaded such that the first 10 ha or 15 ha would attract a higher payment, with a lower payment thereafter. That would ensure that very large-scale farms would not get the benefit of a huge basic farm payment and smaller-scale farms would be able to ensure their sustainability. That is the issue. Many farmers on smallholdings cannot survive. It is very difficult for them.

An interesting issue raised this morning was that of hobby and genuine farmers and what constitutes a genuine farmer. A farmer who is utilising all his or her land is a genuine farmer. Such farmers may not be able to make a living from that and may require off-farm income but they are still genuine farmers.

This question goes to the heart of CAP. We will have greater discretion. There is an appealing simplicity to the argument advanced by Deputy Kenny but there are concerns that such a system could skew payments in favour of large landholders who may currently have lower payments, to the disadvantage of smallholders. We must be careful in this area. If a farmer has a couple of thousand hectares in the plains of Meath, Kildare or elsewhere, which, I acknowledge, is not the case being advanced by Deputy Martin Kenny-----

The opposite. The flat-rate payment would relatively benefit a smallholder in the west of Ireland. We must ensure greater equity. I have heard the argument advanced that the entitlement agreed almost 20 years ago should no longer be relevant but we must bear in mind that in all iterations of CAP since then, we have continued to move away from that. Under the current CAP, through convergence we will have moved more than €105 million in the period up to 2020 from those with high average payments to those with low average payments. The question is whether we should throw out that system entirely or accelerate the journey towards convergence and bringing the lower payments up and the higher payments down. A lot of modelling must be done on that to ensure that we make the right decision. I am committed to ensuring that we protect the farmers for whom Deputy Martin Kenny is articulating a case for but we must be conscious that model could have unintended consequences.

I am trying not only to protect the farmers whose case I am putting forward but also to enhance their position. Many farmers on smaller holdings have not gotten a fair crack of the whip. Going back to 2001 or 2002, farmers in the west of Ireland who had a few suckling cows discovered that their farms were not intensive enough to be able to receive the entitlements they deserved, whereas farmers with better land in other parts of the country who were farming more intensively received larger entitlements. That is the imbalance in all of this. At the centre of CAP is the question as to whether it exists to support production or the family farm. That is the decision we must make. I advocate that it should be both but that the family farm must be the primary concern because consumers want their produce to come from family farms, not industrial farms. Most people across Europe understand that. We do not have industrial farms in Ireland and we should not go in that direction because it would not put us in a good place in terms of marketing our produce. In that context, it is very important that Pillar 1 be used to support the basic income of the family farmer. The vast majority of family farmers in my area and parts of Donegal, Leitrim and Sligo probably receive between €4,000 and €5,000 on the basic farm payment. That must be increased by at least 50% in order to ensure those farms are sustainable into the future. There is an opportunity in these CAP negotiations to do that.

I accept the point and the Deputy's bona fides. I agree with many of the views he has expressed. The question proposes a flat-rate system in lieu of the current entitlements regime, which dates back almost 20 years. However, one must bear in mind that a flat-rate system may further disadvantage many such smallholders. There may be-----

If it were front-loaded-----

A flat rate implies a flat rate per hectare so one cannot front-load-----

There is a little bit of change-----

There is. I welcome this exchange because these are the dilemmas we need to address. I think everybody approaches these with good intentions. We need to protect the family farm. We also need to ensure that we protect active farmers. We need to protect the edifice that is the Irish agrifood industry. Production is important. Trying to find a balance between all those competing objectives is a challenge in the context of ensuring that we have an adequate budget. We need to scope out all of the issues in the context of the submissions we received and that is under way in my Department.

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