Dáil Éireann Debate, Thursday - 8 May 2014
1. Deputy Éamon Ó Cuív asked the Minister for Agriculture, Food and the Marine his plans to introduce a coupled payment for sheep farmers under the Common Agricultural Policy 2014-20; and if he will make a statement on the matter. [20373/14]
Amharc ar fhreagraI wish the Minister, Deputy Simon Coveney, the best of luck today. God knows what it might bring. This question relates to what he intends to do for sheep farmers. He has made a proposal to include the grassland sheep scheme in the single farm payment scheme. For most farmers, this would mean that the grassland scheme would disappear into the single farm payment scheme by 2019. Many sheep farmers receive far less than €150 per hectare as a single farm payment.
The grassland sheep scheme is based on Article 68 of the current EU regulation that governs direct payments in the form of the single farm payment. From 1 January 2015, that regulation will be superseded by EU Regulation 1307/2013. Consequently, there will no longer be a legal basis for the continuation of the grassland sheep scheme in its present form. In developing the shape of the new system of direct payments in Ireland I have been very conscious of the needs of sheep farmers, particularly those who farm on hill and commonage land. In general, sheep farmers hold low value entitlements under the current single farm payment scheme and will benefit significantly from the model of convergence to be applied in Ireland. Those with a low initial unit value will see the value of their entitlements increase over the period of the scheme, which is seven years.
Essentially, we have looked to apply the same approach we applied to the beef sector. In the future we will not have a lump sum of unspent money that we can simply assign to a sheep grassland scheme as we did in the past. For this reason, we are proposing to decouple that payment and add it to a sheep farmer's single farm payment. As a result, in 2015 sheep farmers will get the full value, which is €15 million this year. I have increased that value from €13 million last year to try to maximise the amount of money I can put back directly into the sheep sector. That €15 million is as far as I can go in terms of the availability of unspent moneys. We wanted to maximise that amount of money, decouple the payment and add it to a farmer's single farm payment, as opposed to allowing the €15 million to go back into the general pot. The money will be staying within the sheep sector.
I am aware that some sheep farmers have said they would prefer a direct coupled payment. That would involve a great deal of additional bureaucracy in terms of inspections and form-filling, etc. The cleanest approach - it is the easiest approach to understand and implement - simply involves taking a decoupled payment, adding it to a farmer's single farm payment and ensuring the €15 million fund remains in place for sheep farmers. We have not yet finalised this, but we will do so in the coming weeks. I have set out the approach we are tending towards.
Additional information not given on the floor of the House
When determining the initial unit value of a farmer's entitlements under the basic payment scheme in 2015, Regulation 1307/2013 gives member states the option to take into account any payment the farmer received in 2014 under Article 68 schemes such as the grassland sheep scheme. Deputies should note that this option is only available where the member state is not applying voluntary coupled support to the sector concerned under the new Common Agricultural Policy. I have decided to apply this provision in Ireland as a means of safeguarding the value of the payments received under the grassland sheep scheme for those farmers concerned. The grassland sheep scheme is the only Article 68 scheme being incorporated into the calculation of entitlements under the new basic payment scheme. If such incorporation did not take place, the value of such payments would simply remain in the national fund and be redistributed generally among all farmers who establish entitlements.
The incorporation of the grassland sheep scheme payment into the calculation of a farmer’s initial unit value in 2015 will result in a higher entitlement value for the farmers concerned from the start of the scheme, rather than relying solely on the gradual process of convergence to increase the unit value over the five year period up to 2019. Our analysis confirms that as a result of this provision, the group of farmers who receive the grassland sheep scheme payment will have an immediate financial benefit in 2015 as part of their payment under the basic payment scheme. In the past two years sheep numbers have stabilised. While the breeding flock declined slightly in 2013, a return to growth is expected in 2014. I was pleased to note that Irish sheep throughput had grown for the third consecutive year, reaching 2.61 million head, which represents an increase of 7%. These developments led to sheepmeat production rising by around 3% to stand at just over 55,000 tonnes. The total value of Irish sheepmeat exports is estimated to have increased by over 4% in 2013 to reach €220 million.
Will the Minister agree that if the €15 million fund is used in the way he has proposed, the vast majority of farmers will see their share of the fund reduced by one fifth every year between now and 2019? Under his proposed arrangement, by 2019 they will be getting no benefit whatsoever from the grassland scheme. I suggest he put the €15 million fund back into the single farm payment scheme and then put €15 million into a coupled payment scheme. He is providing for a coupled payment in the beef sector.
No, we are-----
Yes, the genomic scheme involves a coupled payment. If my suggestion were adopted, it would ensure the €15 million fund would continue to be available to sheep farmers in the next five years, rather than being reduced by one fifth every year. Does the Minister agree that this is the factual position?
No, because different sheep farmers are in different situations. Each sheep farmer will be affected differently by the redistribution model, depending on what his or her single farm payment is. Obviously, the lower the payment, the higher the gain from redistribution between now and 2019. The relatively small number of sheep farmers on high payments will lose something as a result of redistribution. The issue is how we maintain supports for sheep farmers next year and the year after. The decoupled payment approach we are proposing will mean that the value to them of the sheep grassland scheme will be maintained in full immediately. We will look at a fair redistribution model after this, in the same way that we decoupled beef payments in the past, as opposed to treating the two separately. It is not true to say we have a coupled payment for beef. We decided not to go for a coupled beef payment under Pillar 1 because everybody else would have had to pay for it. Instead, we found €53 million under Pillar 2 for a beef genomic scheme that would involve farmers having to perform a certain number of tasks in order to get €80 per calved cow. If we were to do something similar in the case of sheep, we would probably be looking at a very small amount of money per ewe. I do not think many farmers would want the hassle of this.
We are trying to keep this as simple as we can for everybody.
It must go down as a classic phrase, "We are trying to look after them next year and the year after." That is exactly what the Minister is doing. As one goes to the next year and the year after that, for the vast majority of sheep farmers and virtually every hill sheep farmer who do not have any choice of enterprise, the payments will totally dissipate into the maw of single farm payments.
That is not true for all sheep farmers.
It is a fact for virtually all hill sheep farmers because they have very low single farm payments. They will be coming up to the €150 which is there anyway. Therefore, what the Minister is saying is that he will look after them next year and the following year once we get over the election. After that their payment will disappear. On what grounds is the Minister not willing to ensure that the €15 million is retained, not for one year or two but into the forseeable future for the length of the Common Agricultural Policy, CAP, for sheep farmers throughout the country and particularly for the very vulnerable hill sheep farmers who have no alternative choice of enterprise?
First, this has nothing to do with an election. That might be Deputy Ó Cuív's mindset but it is not mine. This is about putting in place a new CAP process around a redistribution of single farm payment and incorporating a sheep grassland scheme in the same way as when we decoupled headage payments for beef that became part of a farmer's single farm payment. Farmers got the benefit from that. We are now looking at a redistribution post-decoupling and so it makes sense to apply the same rationale to the sheep sector as we applied to the beef sector in the past, and to maximise the amount of money available to decouple for sheep farmers before we do that, which is what we have done.
