The Deputy will be aware that, in the context of the European Commission's proposals for the Common Agricultural Policy for the period 2014 to 2020, the proposal to gradually move away from payments based on historical production towards a system of uniform national or regional payment rates by 2019 raises serious concerns for Ireland.
Such a system would result in very significant transfers from more productive farms to more marginal and less productive land. Analysis carried out by my Department indicates that, under a national flat-rate model, the most productive farmers would lose, on average, about one-third of their current payments, while the least productive farmers would see their payments rise by an average of 86%. Alternative redistributions based on a two-region model, or even an eight-region model, would have similar outcomes. I do not believe that these outcomes are compatible with my commitment to sustainable intensification of production, the maintenance of a vibrant rural economy and the achievement of the objectives of the Food Harvest 2020 strategy.
I accept that we cannot continue to base our payments on production references that will be more than 10 years old by the time this round of reform comes into effect. I also accept that there is capacity for the less productive sector to become much more productive in the coming years. Nevertheless, I have major difficulties with the pace and extent of convergence in the Commission's proposal. I believe we can strike a better balance by managing the gains and losses arising from any redistribution, for example by putting a limit on the amount that any farmer could lose. This would be consistent with the Commission's desire to achieve a more level playing field, but would avoid a disruptive level or pace of change. The ‘approximation' approach, by which all payments could gradually move towards, but not fully to, the average, is one alternative that I believe should be considered in this regard.
I have accordingly been pressing for the maximum possible flexibility to be given to Member States to design payment models that suit their own farming conditions, and to adopt a more gradual, back-loaded transition process, rather than the very rapid, front-loaded approach proposed by the Commission.
I will continue to work intensively with the Commissioner and with my counterparts at the Council of Ministers to achieve the required flexibility, and to come up with an acceptable solution that acknowledges the need to move away from the historic model but does not have the dramatic redistributive effects inherent in the current proposals.
