Irish farmers will see red over EU plan to pay them to produce less food

The new CAP will attempt to balance the climate crisis and agriculture's needs

Ciaran Moran Twitter Email

October 21 2021 02:30 AM

For decades, the EU's Common Agricultural Policy (CAP) had a simple goal: encouraging production of plentiful food supplies at low prices for EU citizens.

To do this, it in essence guaranteed prices for farmers.

This policy was in some ways too successful, and in the Eighties and Nineties, technological advancements in agriculture saw food become literally too plentiful, with ‘butter mountains’ and ‘wine lakes’. So the EU decided to pull price supports and support farmer incomes instead.

Now, to address the climate crisis and to mitigate agriculture's impact on the environment, the CAP will, in many ways, pay farmers to produce less food. The irony of all this is not lost on farmers – rather it's their patience that's in danger of being lost.

The Government yesterday announced some key details of how the latest iteration of the CAP will be implemented here, including details on how it would be funded.

The State will invest €2.3bn of national funding in Ireland's five-year CAP plan, starting in 2023. The whole package, including EU funding, comes to a not insignificant €9.8bn.

In the past, Irish politicians would be hailed for going to Brussels and securing such funding. These days, with Ireland now a net contributor to the EU budget, the huge sums might be looked on a little differently by the taxpayer.

It's clear the Government wants value for its money. With steep climate action targets now law, the Government needs agriculture to cut its emissions fast – or the numbers won't add up.

That's why much of the funding announced yesterday will either support climate action on farms or will require it.

A good example of this change in focus is the changes made to farmers’ direct payments under the so-called Pillar 1 of the CAP.

From 2023, 25pc of these payments will be allocated to eco schemes which farmers have to take part in to draw down the money. The schemes will include actions such as planting trees, devoting some of the farm to unproductive activity, or using less fertiliser.

In effect, for many farmers this means that what was a payment to support their incomes has become a payment to compensate for lost income. Farm groups see this as a pay cut.

Another example of the Government's shifting focus is the resources being pumped into a new flagship agri-environmental scheme and into organic farming.

Yesterday's announcements also represented the first major policy decisions of Minister for Agriculture Charlie McConalogue, despite him being over 12 months in the job.

After months of haggling in Brussels over the CAP, and then months haggling with stakeholders and the Department of Finance, the Donegal man finally nailed his colours to the mast regarding some of the most controversial issues.

Among the most sensitive of these was how Ireland would implement an EU-mandated redistribution of farm payments. Essentially, the EU wants more money to go to smaller farmers.

The issue is extremely divisive at farm level, as it effectively takes money from one farmer and gives it to another.

In the end, the Minister decided to implement the minimum level of payment convergence, but he did introduce a new payment front-loading measure that will boost the incomes of small farmers.

Despite the Government's huge funding allocations, farm organisations voiced disappointment yesterday, saying the funding is insufficient to compensate for possible income losses resulting from many of the policy changes.

Equally, environmental groups will likely be unhappy with the proposals, having highlighted that the CAP does not go far enough in terms of environmental action.

Herein lies the challenge for our embattled Minister for Agriculture. Under pressure to push farmers as far as possible on climate action, he's in danger of pushing them too far.