Article 14 of EU Regulation No 1307/2013 (Direct Payments Regulation) and Article 58 of EU Regulation No 1305/2013 (Rural Development Regulation) allow Member States to transfer up to 15% of Pillar 1 funds to Pillar 2 and vice versa on an annual basis. Member States with direct payments per hectare less than 90% of the EU average may transfer up to 25% from Pillar 2 to Pillar 1 on an annual basis. If any transfers were to be made between Pillar 1 and Pillar 2, the deadlines to notify the Commission were 1 August 2014 for calendar years 2015-2019 and 1 August 2017 for any revised transfers from calendar year 2018. Ireland did not avail of this provision as there were no funds available under the Rural Development Programme to transfer to Pillar 1. There will be no underspend under the RDP and the €4 billion of EU/Exchequer funds provided for will be spent over the lifetime of the programme.
EU Regulation 1307/2013 sets out the basis for the establishment and replenishment of the National Reserve. In 2015, in the first year of implementation of the Basic Payment Scheme, Ireland applied the maximum 3% of the Basic Payment Scheme financial ceiling to establish a National Reserve fund of over €24 million. Since 2015 the three methods for replenishing the National Reserve are:
- Surrender of entitlements that remain unused by farmers for two consecutive years;
- Clawback derived following the transfer of entitlements without land. In Ireland the rate of clawback is currently set at 20% on the sale of entitlements without land;
- A linear cut to the value of all farmers’ entitlements.
EU Regulation 1307/2013 also sets out the basis for financing the Young Farmers Scheme. Ireland has applied the maximum 2% of the national ceiling to establish a Young Farmers Scheme of some €24 million in each year from 2015 to 2019.
There is no Regulatory provision to allow for the use of Exchequer funding to supplement either the National Reserve or the Young Farmers Scheme.