The Minister for Agriculture, Food and the Marine, Simon Coveney TD, today announced the allocation of more than €12.5 billion in Common Agricultural Policy and exchequer funding to the agriculture sector in the period to 2020.
Speaking at the CAP announcement the Taoiseach said "Getting all parts of Ireland working again remains the Government’s top priority. Economic recovery has to be felt by all regions across Ireland. For this reason I’m delighted to welcome the agreement of a new draft Rural Development Programme for Ireland as a part of the Common Agricultural Policy's €12.5 billion investment in Irish agriculture. The Rural Development Programme will see more on farm investment as we grow our indigenous food and drink industry to new heights. At a time of scarce resources this represents the Government’s strong commitment to job creation and investment in our rural communities."
Minister Coveney said: “Today marks a further landmark day in what is an unprecedentedly exciting period for the agriculture sector and the agri-food industry in Ireland. In addition to the €8.5 billion in EU funding that will be paid in direct payments to farmers in the period up to 2020, I am delighted to announce that €1.9 billion in national funding will be added to the €2.2 billion EU funding already secured for expenditure on rural development. It brings the total funding for the sector over the period to more than €12.5 billion. This represents a very significant, strategic financial investment in the agri-food sector, and comes on top of the large commercial investments that have been made by major players in the sector in recent times and the very positive news from Bord Bia on the continuing rise in the value of agri-food exports in 2013.”
Minister of State Tom Hayes emphasised the importance of ensuring that this level of funding is spent effectively: “It must be done in a forward-looking way that will help the sector to achieve its full potential by supporting innovation and improving competitiveness. Only in this manner can we ensure that we give ourselves the best possible chance to achieve the objectives agreed for the industry in the Food Harvest 2020 strategy.”
Minister Coveney developed this point further, recalling that, throughout the CAP reform process, his efforts have been informed by the need to ensure that the agriculture sector can grow in a competitive and sustainable manner: “The focus for me is consistently on the need to achieve smart, green growth, as envisaged in Food Harvest 2020. We need to be smart about what we do so that we can become more efficient and more competitive, and we need to do it in a way that is sustainable from an environmental and climate viewpoint. The package of measures I am announcing today provides practical, targeted support that will help the sector to achieve its ambitions while meeting its climate change responsibilities.”
Direct Payments
The Minister announced that, following extensive consultations with stakeholders on the structure of the new direct payments system, he has decided that Ireland should implement the so-called ‘partial convergence’ model. Under this approach, payments will move part of the way towards a national average rather than to the uniform payment also provided for under the CAP reform agreement. By opting for this approach, he is ensuring that the direct payments system is made fairer and more equitable while at the same time ensuring that the level of redistribution of payments between farmers is not of a scale that could jeopardise the achievement of the Food Harvest 2020 objectives.
The Minister said: “During the CAP reform negotiations I argued very strongly for Member States to be given the flexibility to tailor the reform outcome to their own farming circumstances. I am delighted now to be able to take what I believe to be full advantage of this flexibility. There will be significant transfers given that all entitlements must be valued at 60% of the national average entitlement value by 2019. However, I think I have struck the right balance between making the system fairer and supporting the sustainable development of the sector.”
Young Farmers
The Minister also took the opportunity to highlight the ongoing efforts to encourage the participation of young farmers in agriculture. Following consultation with stakeholders, he had decided to use the provisions of the CAP reform agreement as follows:
· the full 2% of the national ceiling will be allocated to young farmers, providing for a 25% ‘top-up’ on direct payments on up to 50 hectares for farmers under 40 years of age (worth more than €16,000 over the period where payment is made on the maximum area for the full five years of the scheme),
· additional, educational criteria will ensure payments are made to genuine young farmers,
· in addition, young farmers will be prioritised in the allocation of payment entitlements from the national reserve.
These direct payments measures will be complemented by further support under the Rural Development Programme, where a separate strand of the support for on-farm capital investment will be ring-fenced for young farmers at a higher rate of aid intensity of 60%.
The Minister said: “It is vital that we do everything we can to encourage young people to take up a career in farming if the innovation and new ideas required to generate the smart, green growth envisaged under Food Harvest 2020 are to be realised. I have previously stated my strong commitment to action in this area, and am delighted to be able to introduce a range of measures across the direct payments regime and Rural Development Programme that I believe will attract and support young farmers.”
Rural Development Programme
The Minister emphasised that the priority in deciding how the Rural Development Programme would be structured was the need to ensure an effective contribution to the achievement of the Food Harvest 2020 objectives in a way that would complement the direct payments regime. He was pleased to be able to confirm the available funding of €1.9 billion at this point, which has allowed him to give an outline of the proposed new measures to be included in the Programme. These will be discussed in further detail with the stakeholders over the coming weeks before the Programme is finalised and submitted to the Commission for approval.
The Minister said: “We must ensure that all of the resources available to us are targeted effectively and that they add strategic value. In the case of rural development funding, this means making sure that the money spent enhances the overall competitiveness of the agri-food sector, ensures a more balanced development of rural areas, and meets environmental and sustainability challenges.”
The Minister referred in more detail to the main areas to be targeted (in addition to young farmers as mentioned previously):
· a substantial new agri-environment/climate scheme (GLAS), which will build on the progress made under REPS and AEOS. This will provide for a maximum payment of €5,000 for up to 50,000 farmers, and a further payment of up to €2,000 for a limited number of farmers who take on particularly challenging actions,
· continued strong support for disadvantaged areas (now Areas of Natural Constraint), to the tune of about €195 million per year,
·
· incentives for on-farm capital investment, including support for the expansion of the dairy sector following the abolition of milk quotas in 2015,
· knowledge transfer and innovation measures, aimed at underpinning farm viability, sustainability and growth through the adoption of best practice and innovative solutions, and
· a new beef data and genomics measure worth up to €52 million per year aimed at improving the genetic quality of the beef herd.
Sectoral Impacts
Summarising briefly the effects on individual sectors, the Minister first of all pointed out that “farmers in all sectors will benefit from the changes I am making to the direct payments regime, as well as from the measures under the Rural Development Programme.” He also noted that the allocation of capital investment funding will be phased over the 2014-2020 period in line with the requirements of measure design and budgetary requirements.
The following are the main points which demonstrate the more strategic thinking being adopted. Further details are outlined in the Notes for Editors.
Beef
While there will be a dividend for beef production arising from dairy expansion, the Minister said that “it is critically important to recognise the specialist beef breeding sector as the seed bed for Ireland’s high quality indigenous beef industry. Public support for this vital sector must focus on increasing the value of its contribution to the economy, but also on addressing the key vulnerability of relatively poor efficiency and profitability at farm level.” This will be achieved through a combination of building on existing supports and adopting a more strategic approach, as exemplified by the following:
· the new beef data and genomics scheme (payment of €80 per calf),
· knowledge transfer measures that will improve key skills needed at farm level,
· the GLAS environmental scheme, payments for farmers in Areas of Natural Constraint and measures to encourage collaborative farming, which will especially benefit suckler farmers,
· the targeted advisory measure on animal health and welfare, and
· beef quality schemes to assist
marketing of local products through EU programmes.
Dairy
The Minister said that “with milk quotas to be abolished in 2015, significant investment will be required at farm level to manage the additional milk volumes targeted in Food Harvest 2020.” The Rural Development Programme will therefore support the sector through the following measures:
· support for capital investment for dairy equipment, including targeted support for young farmers setting up for the first time, will be a priority in the initial phase,
· knowledge transfer measures will be prioritised for dairy expanders and new entrants,
· targeted advisory service on animal health and welfare,
· support to partly offset the start up costs of approved collaborative farming arrangements.
Sheep
The Minister pointed out that “with export values in 2013 exceeding €220 million, support for this vital sector is maintained in the overall CAP package.” He highlighted the following:
· the €13 million Grassland Sheep Scheme is subsumed into the baseline Single Farm Payments figure for sheep farmers,
· knowledge transfer measures will help to improve efficiency and profitability in sheep production,
· the targeted advisory measure on animal health and welfare, support for collaborative farming arrangements and lamb quality schemes,
· the new GLAS environmental scheme and payments for farmers in Areas of Natural Constraint, will be of substantial benefit to sheep farmers,
· sheep farmers in particular will benefit from the redistribution of direct payments.
Pigs and Poultry
· Capital investment support will continue to be made available under the new Programme, subject to the phasing decisions made following the forthcoming consultations with stakeholders.
Arable
· Investment support will be made available for slurry storage on cereals farms.
· A new incentivised support programme for the protein sector will be introduced.
Artisan/Food SMEs
· A new Artisan Food Cooperation Scheme, comprised of annual grant support to help artisan food producers to improve and validate production quality, and improve the awareness and marketability of local and niche category products.
·
Island Communities
· The Department is actively exploring mechanisms to support island farming. Additional support for island communities is important given their dependence on the agriculture sector, and given the particular constraints and difficulties associated with island farming.
Concluding, the Minister said: “In short, I believe the range of measures I have decided upon under the direct payments regime and the Rural Development Programme for the period to 2020 provide a sound basis for the sustainable development of the agriculture sector and give it the best possible chance of achieving all of the objectives set out in the Food Harvest 2020 strategy. I look forward to the sector exploiting its potential to the full over the next number of years, while at the same time continuing to make a significant contribution to Ireland’s economic recovery.”
NOTES FOR EDITORS
I – DETAILED PROVISIONS ON DIRECT PAYMENTS
Annual Ceilings for Ireland
Ireland’s allocation for direct payments to farmers will be just over €1.2 billion per annum in the period to 2020.
Introducing the New Regime
The Single Payment Scheme will be replaced by the Basic Payment Scheme.
The Basic Payment Scheme
Ireland will implement the ‘Internal Convergence Model’ of redistribution of funds between farmers largely based on the original presentation of that model by the Minister at farmers’ meetings in October 2012.
This model, while initially retaining the link with current payments under the Single Payment Scheme, gradually moves all farmers towards a national average value over the five years of the new scheme but does not arrive at a ‘flat-rate’ by 2019. The purpose of this model is to achieve a phased redistribution of payments between those who currently hold high value entitlements and those who hold low value entitlements. It introduces a fairer more equitable distribution of funds between farmers while avoiding the negative impact of a sudden move to a ‘flat-rate’.
Farmers who hold entitlements with a unit value below 90% of the national average value will be increased by one third of the difference between their starting value and the 90% level over the five years of the scheme.
Farmers who hold entitlements with a unit value over 100% of the national average value will see their value decrease over the period of the scheme. The reduction will be determined by the amount needed to fund the increase for those whose entitlement value is being increased.
By 2019 all entitlements will have a minimum value of 60% of the national average value.
No farmer will receive a payment under the Basic Payment Scheme of over €150,000 per annum.
By 2019 no farmer will receive a payment per hectare (Basic Payment plus Greening payment) greater than €700.00.
Payments received under the 2014 Grassland Sheep Scheme will be incorporated into the calculation of the entitlement value in each year of the new regime for those farmers who participated in that Scheme. This will have the effect of increasing their entitlement value and ensure that such farmers do not lose through the cessation of the Grassland Sheep Scheme at the end of 2014.
Farmers who never held entitlements, either owned or leased, under the current Single Payment Scheme but who actively farmed in 2013 will be eligible for an allocation of entitlements in 2015.
Farmers who produced ‘fruit and vegetables’ in 2013 but did not receive a direct payment in that year, and consequently do not have an automatic ‘allocation right’, will be eligible for an allocation of entitlements in 2015.
Young Farmers Scheme
Ireland will establish a Young Farmers Scheme the purpose of which is to encourage the participation of young farmers in agriculture. The scheme will assist young farmers in the initial stages of establishing a farming enterprise in their own name by providing a ‘top-up’ payment on the payment they receive under the Basic Payment Scheme.
Ireland will allocate the full allowable amount of 2% of its national ceiling to the scheme in 2015. Percentages to be applied in subsequent years will be determined by demand.
The payment is available for a maximum of five years from the date of the establishment of the holding in the young farmer’s name.
A Young farmer is defined as being aged 40 or less in their first year of application to the Basic Payment Scheme and having established their holding within the previous five years. In addition, successful applicants will have completed a recognised course of education in agriculture giving rise to an award at FETAC level 6 or its equivalent.
The Young Farmers payment will be calculated as 25% of the national average payment per hectare (based on the national ceiling) multiplied by the number of entitlements activated by the young farmer subject to a maximum number of 50.
National Reserve
Ireland will establish a National Reserve using 3% of the ceiling allocated to the Basic Payment Scheme in 2015. This is a once-off allocation and in subsequent years the Reserve will be replenished from the return of unused entitlements.
Priority for the allocation of entitlements from the Reserve will be given to ‘young farmers’ and to those who ‘commence their agricultural activity’ i.e. new entrants to farming. In all cases, allocations of entitlements from the Reserve will only be given to persons who are ‘active farmers’.
The definition of ‘young farmer’ is the same as that under the Young Farmers Scheme. A ‘new entrant to farming’ is defined as persons who commenced their agricultural activity in the 2013 calendar year or any later year and did not have any agricultural activity in their own name and at their own risk in the five years preceding the start of the agricultural activity. As with the Young Farmers Scheme, successful applicants will have completed a recognised course of education in agriculture giving rise to an award at FETAC level 6 or its equivalent.
Greening
Farmers who participate in the Basic Payment Scheme must implement the three standard greening measures as follows;
Crop diversification
Permanent grassland
Ecological Focus Area (EFA)
The greening payment will take the form of an annual payment per hectare. The payment will be calculated as a percentage of the payment the farmer receives under the Basic Payment Scheme. The same percentage will be applied to all farmers and greening will represent some 30% of each farmer’s total payment.
There are a number of scenarios where a holding or part of it may be considered as ‘green by definition’ and there is no further obligation to implement the three greening standard measures. Two of the most significant are;
· Land that is subject to organic farming practices automatically fulfils all greening requirements. However such exemption only applies to that part of the holding which is farmed organically.
· Holdings where more than 75% of the eligible agricultural area is permanent grassland or is used for the production of grasses or other herbaceous forage have no further obligation to implement the three greening measures,
provided the remaining arable area does not exceed 30 hectares.
Support for Protein Crops
· A new incentivised support programme for the protein sector will be introduced.
II - PROPOSED MEASURES UNDER THE RURAL DEVELOPMENT PROGRAMME 2014-2020
The proposed measures outlined in this note are intended strictly as outline proposals, which have been formulated on the basis of the design work and stakeholder consultations undertaken to date. The proposals will be developed following further consultation with key stakeholders. At that stage a draft Programme of measures will be submitted to the Commission for discussion and subsequent approval.
A more detailed outline of the proposed measures is being made available to stakeholders to facilitate their input to the finalisation of the Programme.
A new Agri-Environment/Climate Scheme: GLAS
· The proposed new agri-environment/climate measure - to be called GLAS (green, low carbon agri-environment scheme) - will build on the progress made under REPS and AEOS. It is proposed that a maximum payment of €5,000 per farmer will apply, and it is expected that there will be up to 50,000 farmer participants at its peak. The Scheme will target specific environmental challenges facing the sector as well as focusing on biodiversity, water quality and climate change issues in certain key areas. It will be designed to deliver real environmental benfits and will require significant action by farmers on envinonmental challenges including those identified in the recent environmental assessment of Food Harvest 2020.
· It is also proposed that, within budget limits, a GLAS+ payment would be put in place for a limited number of farmers who take on particularly challenging actions which deliver an exceptional level of environmental benefit. It is proposed that this additional payment will be up to €2,000.
Continued support for disadvantaged areas - now known as Areas of Natural Constraint (ANCs).
· It is proposed that support to farmers in these areas will continue at its current level, with payments to the tune of about €195 million per year. A full review of the scheme will be necessary, before 2018 at the latest, when the areas classified as ANCs will be redesignated using new bio-physical criteria.
·
Incentives for on-farm capital investment
The investment areas covered under this measure will support a number of key policy priorities, including
Targeting support at key sectors to enable growth and expansion, including dairy farming in the context of the abolition of milk quotas in 2015,
Support for capital investment on beef farms to contribute to environmental and climate change objectives, support infrastructural development on farms, improve animal health and welfare, and farm safety,
Contributing to environmental and climate change objectives,
Supporting increased efficiency of holdings, e.g. through support for farm infrastructural investments,
Improved animal health and welfare.
Support for Young Farmers
· A separate strand of the support for on-farm capital investment will be ring-fenced for young farmers setting up for the first time as the head of an agricultural holding. This will provide a dedicated support for young farmers by offering a higher rate of aid intensity of 60% for young farmers investing in key physical assets.
Knowledge Transfer and Innovation Measures
Knowledge transfer and innovation will be a key theme running through the entire Programme. Support here will help to underpin viability, sustainability and growth by ensuring that best practice and innovative solutions are embedded across the agri-food sector. A number of integrated delivery mechanisms are being proposed in this area, including:
· Support for Knowledge Transfer Groups in key sectors to be facilitated by appropriately qualified professionals. Knowledge Transfer groups will be designed to improve farmers skills and change behaviour to address specific competitiveness and sustainability challenges. Areas to be addressed include skills related to financial management, animal health, grassland management, carbon efficiency and breeding,
· A targeted advisory service on animal health and welfare will assist in the provision of farm-specific advice in relation to matters such as BVD and Johnes Disease, as well as the control or mitigation of chronic or recurring elevated somatic cell counts. This measure can help address issues which add significantly to the costs of individual farmers, impair efficiency and adversely affect the quality of production,
· The development of the European Innovation Partnership (EIP) model to link research and innovation to farm practice. It is proposed that support for the EIP model could be targeted at strategically important issues such as environmental and climate change challenges, and increased on farm efficiency via the utilisation of the most recent scientific methods,
· A range of specifically targeted on farm training measures and support for continued professional development of advisors.
Collaborative and Quality-Focused Measures
· Support to partly offset the start up costs of approved collaborative farming arrangements. In the context of the dairy sector this has the potential to assist new entrants to the sector, to encourage young farmers into the farm enterprise, to encourage intergenerational transfer and to improve efficiency at farm level,
·
· Support for quality schemes, which will assist groups of farmers in developing proposals for the marketing of distinctive local products through the EU’s Protected Designation of Origin (PDO), Protected Geographical Indication (PGI) and Traditional Speciality Guaranteed (TSG) programmes.
A New Beef Data and Genomics Measure
· Up to €52 million per year will be spent on a new, highly innovative beef data and genomics measure which will support farmers who participate in a programme to significantly improve the genetic quality of the beef herd.
· Using genomics to increase genetic improvement in cattle, Ireland can further exploit its advantage of a green grass-based production system by producing beef animals which maximise productivity per unit of input and which can also accrue substantial benefits in terms of traceability and quality.
· This will drive improved genetic performance and production efficiency in suckler herds, as well as delivering improvements in animal health and welfare, and environmental sustainability.
· It can also provide the basis for a genetic traceability system in the future.
· Estimated costs of the programme are based on €80 per calved cow for approximately 650,000 participant calved cows.
·
Organic Farming
· Organic Farming Scheme to be continued.
· Core requirements for organic farmers would be the same as for those in GLAS, with Organics incorporated into GLAS as a priority action (Commission approval needed).
· Organic farmers meeting existing requirements under the rural development regulation would top-up payments by complying with other GLAS criteria.
Support for Island Farming
· The Department is examining mechanisms to support island farming, given the dependence of island communities on the agriculture sector and the particular constraints and difficulties associated with island farming.