I thank the Chairman for the opportunity to address the committee in relation to the development of Ireland's CAP strategic plan for the period 2023 to 2027.
As the Chair mentioned, I am joined by my colleagues, Corina Roe, who is head of the Department's rural development division, David Buckley, who heads some elements of the Department's direct payments division in Portlaoise, including the new eco-schemes, and Francis Morrin, who is head of the Department's CAP entitlements and financial control division, which is also based in Portlaoise. The development of Ireland's CAP strategic plan for the period from 2023 to 2027 is now at an advanced stage.
There has been more than two years of work by colleagues here and many others throughout the Department. It has included the preparation of an extensive strengths, weaknesses, opportunities and threats, SWOT, analysis, drawing on empirical analysis from a range of sources, as well as on feedback from stakeholders. It has also included the completion of a needs assessment that identified and prioritised the high-level needs of the agriculture sector and rural areas based on evidence from the SWOT analysis, feedback from stakeholders and recommendations from the European Commission. It has also included the design of interventions, which are the individual measures or schemes that are proposed to address the needs identified in the needs assessment. All of this work essentially took us to early September this year, when a five-week period of public consultation on the draft interventions closed. The Department then commenced assessment of more than 1,000 submissions that had been received, as well as the feedback from three town hall-style webinars attended by about 1,000 people.
It is worth noting the scale of engagement with stakeholders and the wider public that the Department has undertaken in developing the CAP strategic plan. The first phase of consultations began as far back as 2018, even before the publication of the Commission's original legislative proposals. Feedback was received via six town hall meetings in Mayo, Leitrim, Westmeath, Meath, Carlow and Cork, a stakeholder workshop and more than 160 written submissions. These core elements have, to varying degrees, characterised all of the engagement since then. That has included a public consultation on the draft SWOT analysis in September and October 2019, which included town hall meetings in Mitchelstown, Sligo and Portlaoise, and a stakeholder workshop in Tullamore. It included a public consultation on the draft scoping report for the environmental assessment of the CAP strategic plan, which ran from February to April 2021. There was the public consultation on the proposed draft interventions that I just mentioned, which ran in August and early September 2021. There is also the current public consultation on the draft environmental assessment of the CAP strategic plan, which will conclude on 8 December 2021.
All of this public consultation has been augmented by the establishment, in May 2019, of a national stakeholder consultative committee, comprised of representatives from all of the main farming organisations, environmental groups, industry, academia and other relevant Government Departments and agencies. This committee has met on 25 occasions, an average of almost once per month over the entire period, and has been very effective in providing an overarching framework for engagement with stakeholders; facilitating robust but constructive exchanges of different views; enabling discussion based on expert input; allowing dialogue to take place in different formats, including workshops on topics such as the so-called green architecture of the CAP; and providing continuity throughout the entire process, including the negotiations on the new legislative framework at EU level, the decisions made at national level and the development of our CAP strategic plan.
There is regular ongoing bilateral engagement with stakeholders, at both ministerial and official levels, which has been significantly stepped up in recent months following the political agreement on the CAP reform package, which has allowed attention to focus more intensely on progressing the development of the strategic plan. In September and October alone, more than 30 meetings were held with farming and environmental organisations by the Minister, Deputy McConalogue, and the Ministers of State, Senator Hackett and Deputy Heydon, or senior officials. The Minister, Deputy McConalogue, has also undertaken an extensive engagement, in person, with farmers in every county in the country through the mart network. That process will conclude in Castlerea mart in County Roscommon tomorrow. Ministers and officials have made themselves available to this committee regularly to provide updates on the CAP reform process and we are happy to do so again this evening. The committee can be assured that the Department will continue to consult and make itself available as this process evolves over the coming months and beyond.
The public consultation in August and September of this year set out the individual interventions or measures proposed for the CAP strategic plan. In the case of Pillar I, or direct payments, respondents were asked for their views on interventions such as conditionality, capping and degressivity, convergence, payments for young farmers, redistribution through the complementary redistributive income support for sustainability, CRISS, and eco-schemes.
Proposed interventions under Pillar II included a new and ambitious agri-environment climate measure to replace and build on the achievements of the green low-carbon agri-environment scheme, GLAS. Another is a suckler carbon efficiency programme to build on the progress made in the beef data and genomics programme, BDGP. Dairy beef welfare and sheep improvement schemes and an organic farming scheme are proposed. Continuation of the areas of natural constraint, ANC, measure is proposed. Another proposal is early stage support for producer organisations in the beef and sheep sectors. There is also the on-farm capital investment scheme and the knowledge transfer and LEADER programmes. All of this will be supported by a training and research infrastructure, for example, through dedicated agri-environment and climate training for farmers, a continuous professional development programme for advisers and the provision of support for European innovation partnership operational groups.
As I mentioned, further engagement with stakeholders on these interventions continued through September and October. At the same time, discussions between the Department and the Department of Public Expenditure and Reform were taking place about national co-financing of the Pillar II elements of the plan. On 20 October, the Minister, Deputy McConalogue, announced that he had reached agreement on this issue with the Minister for Public Expenditure and Reform, Deputy Michael McGrath. A total of €2.3 billion in national co-financing will be made available over the five-year period of the CAP strategic plan. When combined with Ireland’s €1.56 billion in Pillar II funding arising from last year’s agreement on the EU budget, this will bring the allocation for rural development measures to a total of €3.86 billion. This represents a significant increase in Pillar II funding, from a number of perspectives. For example, using a five-year comparison, it is €600 million higher than the €3.26 billion initially allocated for the final five years, from 2016 to 2020, of the previous rural development programme, and more than €900 million higher than the actual spend over that period. The funding provided for this five-year programme is also very close to the €3.92 billion initially allocated for the entire seven-year period of the 2014 to 2020 programme.
On the balance between EU and national Exchequer funding, 40% of the €3.86 billion allocated for the 2023 to 2027 period will be EU funded, while national co-financing will come to 60%. This represents a significant increase on the national co-financing rate of 47% under the Rural Development Programme 2014-2020. Even when carbon tax funding is excluded, the national co-financing rate remains higher than in the previous programme, at just above 50%. Using a seven-year comparison, the total of €5.34 billion allocated for the period 2021 to 2027 is more than €1.2 billion higher than for the 2014 to 2020 period. Both EU and national funding levels are higher than in the 2014 to 2020 period. In addition, national co-financing over the 2021 to 2027 period will come to 54%, which is a significant increase on the 47% seen between 2014 and 2020. When Pillar I, which is direct payments and sectoral interventions, spending of €5.97 billion is included, total expenditure under the plan will come to €9.83 billion. This compares favourably with the Rural Development Programme 2014-2020, which, on a pro rata basis, saw five-year spending of approximately €8.9 billion.
On the distribution of that funding, indicative allocations show a significant increase in spending on the flagship agri-environment climate measure. A total allocation of €1.5 billion is envisaged here, which represents an increase of around €100 million per year on GLAS funding. This will support a new approach, which will include results-based payments and co-operation projects aimed at achieving landscape-scale environmental benefits. Spending on areas of natural constraint will remain at €250 million per annum. A total of €260 million is provided for the suckler carbon efficiency programme. Some €25 million is provided for the dairy beef welfare scheme and €100 million is provided for the sheep improvement scheme. The Minister is also honouring the commitment in the programme for Government to increase the land area for organic farming and has allocated €256 million for this purpose over the period of the plan. This represents a significant increase on current funding levels for organic farming.
In addition to these indicative Pillar II funding allocations, the Minister indicated that, following stakeholder feedback, he was considering the following approach in relation to Pillar I. Convergence of payment entitlement values is to reach a minimum of 85% of the average national value by 2026, in equal steps from 2023. This is the minimum required by the regulations. Capping of payments in accordance with the full scope provided for in the regulations would result in an effective cap of €66,000. The option to deduct salary costs would not be availed of. The CRISS is to be set at 10% of the direct payments ceiling and paid on the first 30 ha. This would yield a total of approximately €118 million and result in a per hectare payment of €43, benefiting 75% of farmers. Some 3% of the direct payments ceiling would be allocated to the young farmers scheme, augmented by national reserve allocations. That is a 50% increase on the amount available last time. Protein aid would be allocated €7 million per annum, increased from €3 million, and would include an increased rate of support. This increase of more than 130% in funding will provide critical support and import substitution opportunities for tillage farmers and have a positive climate impact. Some 25% of the direct payments ceiling, €297 million annually, will be allocated to eco-schemes, with farmers to choose from two out of five proposed farming practices and payments to be made to all active farmers and on all eligible hectares.
In the context of active farmers, a minimum level of agricultural activity would be required, equivalent to 0.15 licensed units per hectare, LU/ha, on grassland farms, with a range of options for other activities. There was broad consensus among stakeholders about the need for a definition, and this deals with that concern.
The eligible hectare will be any agricultural area used, or predominantly used, for an agricultural activity, with up to 30% of individual parcels allowed to contain landscape features or non-productive or nature- and habitat-rich areas. This is intended to address some of the tensions between the current definition of "eligible land" and the ecological and biodiversity objectives of the CAP.
The latest step in the process, which members will have seen in the announcement on Monday, is the launch of the public consultation on the draft environmental report on the proposed CAP strategic plan. This consultation will run for a thirty-day period and will close on 8 December. It provides stakeholders with a further opportunity to express their views on the draft plan and on the draft environmental report, which contains a strategic environmental assessment and an appropriate assessment.
In announcing the public consultation, the Minister also announced that he had reflected on stakeholder feedback and was making some changes to the draft plan. This includes: changing the approach to the suckler carbon efficiency programme by removing the proposed restriction preventing any increase in participants’ herd size; removing the proposed eligibility requirement for beneficiaries of the sheep improvement scheme to be participants in a Bord Bia sustainable lamb assurance scheme; expanding early stage support for producer organisations to cover other sectors, including cereals, potatoes and the amenity sector; improving gender balance and support for qualified female farmers through higher investment support rates under the on-farm capital investment measure and targeted knowledge transfer support; and adding two new interventions in the form of a straw incorporation measure to encourage tillage farmers to increase soil organic carbon content and a collaborative farming grant to provide parallel support for older farmers and encourage earlier succession planning. The Minister also indicated that he is continuing to reflect on calls made by stakeholders for a wider range of eco-scheme farming practices to be made available beyond the proposed five measures.
The timeline for the submission of Ireland’s draft CAP strategic plan to the European Commission is very tight. Any changes arising from the current public consultation will have to be made very quickly in December before Government approval is obtained and the plan submitted by the deadline of 1 January 2022. We will be working intensively over the coming number of weeks to ensure that this deadline is met and that we submit a plan that will underpin the economic, social and environmental sustainability of the agriculture sector in line with national and EU objectives.
I hope that this opening statement has given members of the committee a good sense of where we stand regarding the CAP strategic plan. I and my colleagues are happy to answer any questions that they may have.