I propose to take Questions Nos. 271 to 275, inclusive, together.
The draft legislative proposals for the CAP post-2020 were launched by Commissioner Hogan on 1 June 2018. 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 Council Regulations.
The proposals outline significant changes to the direct payments system including:-
- Replacing the current Basic Payment Scheme with the Basic Income Support for Sustainability (BISS) payment;
- The capping of direct payments – this involves a graduated reduction of payments over €60,000 per annum. A 100% reduction is to be applied to the amount of the payment exceeding €100,000, at least 75% to payments between €90,000 and €100,000, at least 50% to payments between €75,000 and €90,000, and at least 25% to payments between €60,000 and €75,000. Member States will be required to subtract the salaries of the farmer including taxes and social contributions, before applying capping. The cost of regular and unpaid labour should also be taken into account.
- The Complementary Redistribution of Income Support for Sustainability (CRISS) - the funding released from capping is to be used for the mandatory redistributive income support i.e. moving support from large to small/medium farms. This is a mandatory requirement for Member States. Redistribution is not limited to the funding released by capping and it will be up to the Member State to set out what funding it intends to use and to who the additional funds will be made available.
- A complementary income support for Young Farmers (CISYF) which can be funded through surplus funds from capping. The CISYF is a top-up scheme for young farmers and is optional for Member States. However, in overall terms, at least 2% of all funding must be spent on young farmers either by the top-up mechanism or through a lump sum of up to €100,000.
- The introduction of Eco-schemes for the environment under Pillar I. This is a new requirement under the CAP legislative proposals. Member States are obliged to offer at least one eco- scheme, which would be optional for farmers. The eco-scheme can be applied for on an annual basis. Member States must draft a list of practices that are beneficial for agriculture and the environment. Payments are only provided in cases where the beneficiary goes beyond certain conditions and requirements.
- Continued convergence, where beneficiaries of direct payments must receive 75% of the average planned unit amount by 2026.
- Optional lump sum for small farmers.
- Coupled support continues and is available for more sectors including non-food fuel replacement. The available funding proposed for coupled support is reduced to 10% or 12% if this includes protein crops.
My Department is a strong proponent of evidence-based policy making, and I can confirm that work is currently underway to analyse the impact of the various elements of direct payments in the draft regulations. Preliminary modelling exercises have been carried out and the results of these analyses are currently being reviewed and revised to take account of the most recently available data.
These direct payment measures (BISS, CRISS, CISYF and Eco-Schemes) are inextricably linked to each other. This means that each time one of the elements is changed, each of the other elements also must change. As a result, any analysis only remains current until one of the elements changes. This is likely to continue until the regulations are fully developed, at which time detailed analyses will be completed to fully address the impact on farmers in Ireland of CAP 2020. This methodology is congruent with the requirement for each Member State to prepare a Strategic Plan addressing all aspects of CAP expenditure and, consequently, all of these analyses remain at a drafting stage until the Regulations are resolved.