Wednesday, 6 February 2019

Questions (9)

Éamon Ó Cuív


9. Deputy Éamon Ó Cuív asked the Minister for Agriculture, Food and the Marine his policy on capping basic payment scheme, BPS, and greening payments to applicants under the forthcoming CAP programme 2021 to 2027; and if he will make a statement on the matter. [5447/19]

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Oral answers (9 contributions) (Question to Agriculture)

Big decisions will be made on CAP soon and as the Minister knows, there is a debate going on about the capping of the BPS and greening payments. Under the current CAP, the BPS payments were limited somewhat but the greening payments were not limited. What is the Minister's policy on capping and will it include greening payments this time, as well as BPS payments?

The new legislative proposals for the CAP for the period 2021 to 2027 were launched on Friday, 1 June 2018 by the Commissioner for Agriculture and Rural Development, Mr. Phil Hogan. The proposals as drafted involve significant changes, including in relation to governance, the distribution of direct payments among farmers and the increasing environmental conditionality attaching to such payments. There will be some additional discretion for member states in configuring the measures available within parameters laid down in the draft proposals.

The proposals are complex and we are now in the middle of intensive and challenging negotiations for the next CAP to run from 2021 to 2027. I am working with the European Commission and other member states to shape these proposals into an effective new CAP. The new proposals allow for subsidiarity for member states but with an overall commitment by the European Commission to protect the common policy and avoid distorting the Single Market.

I have already indicated that I am open to considering some level of capping. Ireland has already applied the maximum level of degressivity allowable under the current regulations for payments over €150,000. The new proposals include a number of measures designed to move further in this direction including an overall mandatory cap of €100,000, degressivity for payments above €60,000, a complementary redistributive income support and the convergence of payments towards a minimum of 75% of the average payment per hectare nationally. These are currently draft proposals only and my Department is examining them carefully to assess their potential impact on applicants and to ensure that any such mechanisms can be implemented without undue complexity.

The new CAP proposals point to a more significant environmental ambition than the current CAP schemes, including in Pillar 1. It is a new departure for member states to be required to design a specific climate and environment scheme in Pillar 1 but this is something I support. It is consistent with my Department's long-term strategy for the agriculture sector, which recognises the critical importance of environmental sustainability. Protecting the environment and the sustainable development of agriculture are two sides of the same coin. There are also proposals for new conditionality requirements with an increased number of good agricultural and environmental conditions and statutory management requirements included in the draft proposals. It is essential that the new environmental conditionality is implemented effectively with common standards that are relevant and effective.

Farmers play a vital role in the provision of public goods and need to be adequately recognised and recompensed for this role. It is important that the overall level of the budget acknowledges the public goods being delivered by farmers. This places a particular focus on environmental aspects of CAP.

Additional information not given on the floor of the House

Negotiations on the CAP proposals are continuing under the Romanian Presidency. The Presidency has outlined its ambition to achieve a partial general approach at the Agriculture and Fisheries Council of Ministers meeting in June. I will continue to work closely with my European colleagues on these issues with a view to achieving the best possible outcome for Ireland's farmers and agriculture sector.

A lot was said but nothing was said by the Minister. Let us go back to basics here. Originally there was no cap under the single farm payment scheme. Then the single farm payment was broken down into two payments, with 70% under the BPS and the remaining 30% under greening. As the Minister said, in the very complicated language of the reply, there was a limit placed on that of €150,000 that applied only to the 70% but not to the 30%. I have a simple question for the Minister to which I seek a simple and straightforward answer. Is the Minister in favour of capping both the basic farm payment and the greening payment? If so, what cap does he propose for the combined single farm payment and greening payment? If not, is the Minister in favour of continuing with the situation as it stands, where all of these payments are based on something that happened in 2001 that might have no relevance to the current situation of the farmer?

I appreciate that Deputy Ó Cuív may have had other business to attend to earlier but I already had a discussion with Deputy Martin Kenny on the reference years issue. It is not fair to say that the reference years are an anachronism because the system has moved so much in terms of convergence. In fact, in the period of the current CAP, more than €100 million will have moved from farmers with a higher than average per hectare payment to farmers with a lower than average per hectare payment. There is a requirement in the current draft proposals to get to a situation where every farmer has at least 75% of the average per hectare payment in the lifetime of the next CAP. We are on a journey that is going to see greater convergence and equalisation and I do not have any difficulty with that in principle. The Deputy asked a very simple question as to whether I am in favour of capping, which I am. I do not have a difficulty with the new proposals on that. However, I am engaged in a process of consultation and in that context, it would be unfair to be overly prescriptive about my own views on this. We are doing a SWOT analysis now and we will be doing a needs assessment of what would be best for us in the future. We will have an ex ante evaluation of both of those processes before we complete our CAP strategic plan.

As a general principle, I do not have a problem with convergence and capping. That said, we need to be careful about unintended consequences. There was an issue during the term of the last CAP in the context of convergence, whereby some people had a high per hectare payment but a low gross payment. Some farmers found that their payment of €12,000 or €13,000 went down while payments to others with a big gross payment of €20,000, €30,000 or €40,000 went up because they had a low per hectare payment. We need to avoid unintended consequences in our quest to have a fairer CAP.

Excluding the 4% of tillage farmers and looking at the whole spectrum of farmers, what was clear relative to stocking levels on livestock farms was that those on low payments were actually being underpaid while those on very high payments had no stocking justification for the payments they were receiving. On average, nobody should have been getting more than €400 per hectare. That is what the Minister's own nitrates information, which he gets every year, tells him.

Can we go back to the question I want the Minister to answer? In the context of capping, is he talking about the BPS only or the BPS and the greening payment because the greening payment was excluded from the capping on the last occasion?

There is no greening in the current proposal.

Is the Minister telling me that it will all revert back into BPS? Can he confirm that there will be no greening payment and that it will all revert back into a single BPS? If we are talking about capping, will it include the total payment?

My understanding of the regulations as currently drafted, and the Deputy will appreciate that there is political engagement around all of this detail so it is impossible to be definitive about what the final outcome will look like from this juncture, is that in terms of the CAP generally, there will be far greater environmental ambition. Part of the CAP strategic plan will have to outline our proposals in respect of Pillar 1. A specific cohort of the payment under Pillar 1 will depend on environmental obligations but it is not the same as the greening provision as currently contained. I have said that I have no difficulty in terms of convergence and capping. What I am anxious to avoid are unintended consequences where there are casualties and there were casualties the last time around. What I am anxious to do is minimise those casualties in the context of the journey with capping and convergence continuing.

With the agreement of Members, I will revert to Question No. 8 in the name of Deputy Heydon.