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Single Payment Scheme Payments

Dáil Éireann Debate, Thursday - 8 May 2014

Thursday, 8 May 2014

Questions (184)

Bernard Durkan

Question:

184. Deputy Bernard J. Durkan asked the Minister for Agriculture, Food and the Marine the extent to which direct payments to the agricultural sector continue to focus on production with particular reference to those with a high dependency on the farm enterprise; and if he will make a statement on the matter. [20599/14]

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Written answers

Direct payments received under the Single Payment Scheme in 2014 continue to be based on the reference period of 2000 to 2002 and reflect production at that time. However when making the transition to the new Basic Payment Scheme in 2015, it is no longer possible to justify the significant differences in the level of support per hectare granted to farmers based on the use of such historical references.

The original Commission proposal which involved a move to a ‘flat-rate’ payment by 2019 would have had a sudden and significant negative impact on agricultural production in particular for those with a high dependency on their farm related income. As an alternative my Department proposed the ‘Irish Convergence Model’ which while initially retaining the link with current payments under the Single Payment Scheme, gradually moves all farmers towards, but does not arrive at, a national average value by 2019. The purpose of this model is to achieve a phased redistribution of payments between those who currently hold high value entitlements and those who hold low value entitlements and consequently the link with the historical production reference will be gradually reduced over the five years of the new scheme.

The new scheme introduces a fair and equitable re-distribution of funds between farmers while avoiding the negative impact of a sudden and significant change in income support for individual farmers. An additional safety net is added for those with low value entitlements whereby by 2019 they are guaranteed that they will reach at least 60% of the national average entitlement value.

My Department has used stocking density as one measure of agricultural productivity. While stocking density does not represent all the elements of agricultural productivity, it is a tangible and precise measurement of activity where data from my Department is readily available. Previous analysis by my Department has found that, using average results per payment category, farmers on payment rates per hectare above the national average have roughly double the stocking density of those below the average. My Department is satisfied therefore that for most farmers there is a fundamental correlation between stocking density and the value of payment entitlements held under the current Single Payment Scheme.

However, our analysis also shows that the stocking density of farms on the very highest payment rates (e.g. over €500 per hectare) is not significantly higher than the stocking density of farms just above the national average. As there is no direct link between high value entitlements and high production, My Department has decided to apply a cap on the payment per hectare under the new scheme whereby by 2019 no farmer will receive a payment per hectare, consisting of his Basic Payment and Greening payment, of over €700.

The outcome is a reasonable and balanced compromise between the need for a fair redistribution of funds while ensuring that such distribution continues to reflect the realities of agricultural production in Ireland. The decision to apply the greening payment as a percentage of each individual farmer’s payment is based on the same principles.

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