As a condition of EU approval, REPS payment rates must be justified in accordance with strict regulatory criteria. The EU regulations governing REPS provide that support is to be calculated on the basis of income forgone and additional costs resulting from the commitment given together with the need to provide an incentive. Good farming practice is the reference level for calculating income forgone and additional costs resulting from the commitments given, and the incentive element of the payment cannot exceed 20% of the costings. When proposals for the current scheme were submitted to the EU Commission in 1999 as part of the CAP Rural Development Plan 2000-2006, it was necessary to put forward detailed justification to support retention of the existing rates.
In negotiating the current scheme, my Department however secured an increased payment of €165 per hectare on holdings under 20 hectares, and the generous rate of €242 per hectare for land under Measure A, first negotiated in 1998, was retained. Under the new REPS, the average annual payment is €4,900 as compared to an average payment of €4,400 in the previous scheme.
I have recently announced a consultative process on REPS involving a wide range of stakeholders, leading into the mid-term review of the rural development plan in 2003. Full consultation and detailed preparation are necessary to ensure that any proposals on REPS that may be put to the EU Commission in 2003 are robust and fully justifiable within the terms of the relevant EU regulations. This process will cover all aspects of the scheme including payment rates.