Wednesday, 17 July 2013

Questions (238, 239)

Éamon Ó Cuív

Question:

238. Deputy Éamon Ó Cuív asked 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 €400 per hectare; and if he will make a statement on the matter. [35772/13]

View answer

Éamon Ó Cuív

Question:

239. Deputy Éamon Ó Cuív asked 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]

View answer

Written answers (Question to Agriculture)

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:

Budget/ Financial Year

2014

2015

2016

2017

2018

2019

2020

Direct payments €m

1,217

1,215

1,213

1,212

1,211

1,211

1,211

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 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

Payment per ha Category, 2010 SPS database €

No of farms

Total Area (ha)

2010 SPS Payment €m

Average payment per ha 2010 €

Average Stocking Density per ha

Average farm size (ha)

CAP Reform Pmt

Gain/Loss €m

% Gain/Loss

Avg payt per ha

0 payment, some area

76

3,120

0.0

0

-

41

0.5

+0.5

-

163

0 to 20

1,991

69,640

0.8

11

0.35

35

11.4

+10.6

+1342%

163

20 to 50

4,204

181,557

6.6

36

0.31

43

29.6

+23.1

+350%

163

50 to 100

10,462

399,947

30.1

75

0.45

38

65.3

+35.1

+117%

163

100 to 150

13,137

426,654

53.5

125

0.71

32

71.9

+18.4

+34%

168

150 to 200

15,400

495,753

87.1

176

0.99

32

98.5

+11.4

+13%

199

200 to 244.87

15,109

510,293

113.6

223

1.23

34

117.4

+3.8

+3%

230

<90% of nat avg

60,379

2,086,964

291.7

140

0.80

35

394.6

+102.9

+35%

189

244.87 to 272.07 (90% to 100% of nat avg)

9,230

329,342

85.1

259

1.39

36

85.1

-

-

259

272.02 to 300

9,176

337,772

96.6

286

1.48

37

94.9

-1.7

-2%

281

300 to 350

14,729

577,358

187.3

324

1.60

39

176.2

-11.1

-6%

305

350 to 400

10,992

448,659

167.7

374

1.72

41

150.9

-16.8

-10%

336

400 to 450

6,814

294,550

124.7

423

1.79

43

108.3

-16.4

-13%

368

450 to500

4,124

179,638

85.0

473

1.81

44

71.7

-13.3

-16%

399

500 to 550

2,692

119,842

62.6

523

1.81

45

51.6

-11.0

-18%

431

550 to 600

1,681

77,614

44.5

573

1.81

46

35.9

-8.6

-19%

463

600 to 650

1,070

48,626

30.3

623

1.82

45

24.0

-6.3

-21%

494

650 to 700

697

31,563

21.3

674

1.89

45

16.6

-4.7

-22%

526

700 to 750

416

16,752

12.1

723

1.75

40

9.3

-2.8

-23%

558

750 to 800

356

16,440

12.7

773

1.89

46

9.7

-3.0

-24%

589

800 to 850

208

9,863

8.1

823

1.90

47

6.1

-2.0

-25%

621

850 to 900

140

6,480

5.6

871

1.85

46

4.2

-1.4

-25%

651

900 to 950

77

2,986

2.8

925

1.74

39

2.0

-0.7

-26%

685

950 to 1,000

78

3,045

3.0

974

1.65

39

2.2

-0.8

-26%

716

1,000+

221

7,620

9.0

1180

1.92

34

6.5

-2.5

-28%

847

>100% of nat avg

53,471

2,178,807

873.4

401

1.68

41

770.3

-103.1

-12%

354

TOTAL

123,080

4,595,114

1,250.2

272

1.24

37

1250.0

-0.2

-0%

272

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

Max €400/ha

Payment per ha Category, 2010 SPS database €

No of farms

PROPORTIONAL REDUCTION €m

APPLY MAX PAYMENT OF €400/HA, €m

PROPORTIONAL REDUCTION PLUS MAX RATE PER HA, €m

% LOSS

AVG PAYT PER HA

500 to 550

2,692

-11.0

-3.7

-14.7

-23.5%

400

550 to 600

1,681

-8.6

-4.9

-13.5

-30.2%

400

600 to 650

1,070

-6.3

-4.6

-10.8

-35.8%

400

650 to 700

697

-4.7

-4.0

-8.6

-40.6%

400

700 to 750

416

-2.8

-2.6

-5.4

-44.7%

400

750 to 800

356

-3.0

-3.1

-6.1

-48.2%

400

800 to 850

208

-2.0

-2.2

-4.2

-51.4%

400

850 to 900

140

-1.4

-1.6

-3.1

-54.1%

400

900 to 950

77

-0.7

-0.9

-1.6

-56.7%

400

950 to 1,000

78

-0.8

-1.0

-1.7

-58.9%

400

1,000+

221

-2.5

-3.4

-5.9

-66.1%

400

TOTAL

7,636

-31.9

Max €450/ha

Payment per ha Category, 2010 SPS database €

No of farms

PROPORTIONAL REDUCTION €m

APPLY MAX PAYMENT OF €400/HA, €m

PROPORTIONAL REDUCTION PLUS MAX RATE PER HA, €m

% LOSS

AVG PAYT PER HA

550 to 600

1,681

-8.6

-1.0

-9.6

-21.5%

450

600 to 650

1,070

-6.3

-2.1

-8.4

-27.8%

450

650 to 700

697

-4.7

-2.4

-7.1

-33.2%

450

700 to 750

416

-2.8

-1.8

-4.6

-37.8%

450

750 to 800

356

-3.0

-2.3

-5.3

-41.8%

450

800 to 850

208

-2.0

-1.7

-3.7

-45.3%

450

850 to 900

140

-1.4

-1.3

-2.7

-48.3%

450

900 to 950

77

-0.7

-0.7

-1.4

-51.3%

450

950 to 1,000

78

-0.8

-0.8

-1.6

-53.8%

450

1,000+

221

-2.5

-3.0

-5.6

-61.9%

450

TOTAL

4,944

-17.1