1. EU agriculture policy reform:
Implications for Irish agriculture
Mairead McGuinness MEP
Clonmel,
Co. Tipperary.
March 8, 2012

2. Content of presentation
• EU Budget 2014-2020
• Proposal for reform of Direct Payments
• Rural Development
• Market Measures
• Key areas of concern for Ireland
• Process/timing

3. Budget
• Multiannual Financial Framework (MFF)
• Difficult negotiations
• Agriculture budget set at 2013 levels-proposal
• Economic crisis backdrop
• Agriculture 40% EU Budget, 0.5% EU GDP

4. Budget 2
• Ireland: €1.8 billion from CAP budget
• Direct Payments: €1.3 billion
• Rural Development: €350 million

5. Budget 3
• Additional funding for agriculture under
research and innovation budget, food
safety, food for deprived persons
• European Globalisation Adjustment Fund
• Crisis reserve in agriculture sector

6. Redistribution of Direct Payments
• Fairness between Member States
• Closing the gap: Commission proposal to
bring Member States below 90% of the EU
average payment one third of the way to
90%
• By reducing funds to Member States
above 100% of EU average

7. Redistribution of DP - Closing one third of the
gap between current level and 90% of EU
average by 2020
EUR/ha
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DP new distribution (EUR/ha)** DP status-quo (EUR/ha)*
EU-27 average (EUR/ha) 90% of EU-27 average (EUR/ha)
Source: European Commission

8. Redistribution within Member
States
• Move to flat rate payment/ha by 2019
• Member States at different starting points
• 8 Member States with historic based
payments
• Convergence

9. Distribution of SFP payment per hectare in
Ireland
Number of Farmers
30000
28504
25000
20000
15641 15253
14965
15000 13928
11924
9590
10000
6568
5000 3874
2961
783 1401
812 383
0
from from from from from from from from from from from from from € 1,000
€20 < €50 < €100 < €150 < €200 < €250 < €300 < €400 < €500 < €600 < €700 < €800 < €900 < +
€50 €100 €150 €200 €250 €300 €400 €500 €600 €700 €800 €900 €1,000
Per Hectare Payment
Source: Department of Agriculture

10. DIRECT PAYMENTS BY COUNTY 2011
COUNTY FARMERS AMOUNT PAID AVERAGE PAYMENT PER COUNTY
CARLOW 1,622 €25,107,834.28 €15,479.55
CAVAN 4,722 €35,907,064.33 €7,604.21
CLARE 6,015 €48,399,815.92 €8,046.52
CORK 12,725 €169,099,714.81 €13,288.78
DONEGAL 7,894 €48,357,574.53 €6,125.86
DUBLIN 618 €9,198,332.84 €14,884.04
GALWAY 11,771 €80,254,970.11 €6,818.02
KERRY 7,565 €59,156,334.39 €7,819.74
KILDARE 1,998 €31,968,253.40 €16,000.12
KILKENNY 3,409 €56,161,311.13 €16,474.42
LAOIS 2,891 €41,178,085.34 €14,243.54
LEITRIM 3,333 €17,564,384.92 €5,269.84
LIMERICK 5,077 €52,831,303.84 €10,406.00
LONGFORD 2,338 €20,075,675.78 €8,586.69
LOUTH 1,477 €20,115,667.82 €13,619.27
MAYO 11,224 €60,331,376.10 €5,375.21
MEATH 3,672 €56,488,776.17 €15,383.65
MONAGHAN 3,920 €31,081,026.47 €7,928.83
OFFALY 2,990 €36,928,270.87 €12,350.59
ROSCOMMON 5,605 €40,918,155.00 €7,300.30
SLIGO 3,887 €23,056,679.91 €5,931.74
TIPPERARY 6,815 €101,716,195.67 €14,925.34
WATERFORD 2,380 €39,443,004.31 €16,572.69
WESTMEATH 2,907 €34,187,326.09 €11,760.35
WEXFORD 3,974 €61,908,491.77 €15,578.38
WICKLOW 2,037 €28,088,781.40 €13,789.29
TOTAL 122,866 €1,229,524,407.20 €10,007.035

11. Direct Payments post-2013
• Current entitlements abolished December
2013
• New entitlements established in 2014
based on hectares farmed in 2014 - linked
to 2011 application
• Value established by complex formula

12. New entitlements
• National envelope
- Greening 30%
- Young farmers 2%
- Recoupling 5%
- Areas of natural constraints 5%
- National reserve 3%
- Small farmer scheme
- Basic payment

13. Convergence
• Flat-rate payment per hectare by 2019
• Greening payment
• Further 40% flattening
• Massive redistribution between farmers
• Impact on production

14. Greening of CAP
• 30% of budget
• 3 greening criteria:
- Crop diversification – 3 crops, min. 5%,
max. 70%
- Maintenance of permanent grassland
- Ecological focus areas = 7% eligible area
i.e. field margins, hedges, trees, fallow
land, buffer strips, landscape features
• Extra bureaucracy

15. Active Farmer Definition
• Defined at EU level: Court of Auditors
• Does not apply where Direct Payments are less
than €5,000
• No payment where:
• Direct Payment makes up 5% of total
receipts in most recent fiscal year
• Do not carry out minimum activity

16. Capping of Direct
Payments
• Maximum Single Farm Payment - €300,000
• Amounts reduced as follows:
– 20 % between €150,000 and up to €200,000
– 40 % between €200,000 and up to €250,000
– 70 % between €250,000 and up to €300,000
– 100 % for amounts in excess of €300,000
– salaries paid are subtracted when establishing
the threshold payment
• Excludes greening payment

17. Rural Development
• Six EU-wide priorities:
– knowledge transfer and innovation
– enhancing competitiveness
– food chain organisation and risk
management
– focus on ecosystems
– resource efficiency and climate friendly
agriculture
– promoting social inclusion and economic
development in rural areas

18. Rural Development projects
• European Innovation Partnership (EIP)
• Farm Advisory Services
• Young farmers:
– Start-up grants
– Training and advisory services
• Business start-up for small farmers
• Risk management: animal disease mutual
fund, weather and crop insurance.

19. Funding
• Co-financing:
– Training & advisory services
– 50% in regions for most payments (85% - outermost
regions)
• Higher co-financing rate - up to 80% for:
– Training, advisory services, knowledge transfer and
information actions
– Start-up for young farmer and producer groups
– LEADER
• Up to 100% co-financing for innovative actions - financed
with funds from capping in Pillar I
• Minimum of 5% to be spent on LEADER
• Minimum of 25% for climate change mitigation and adaption
and land management measures

20. Market Measures
• Measures as a safety net
• New safeguard clause for all sectors - enables
Commission to take emergency measures
• Crisis reserve fund (existing outside the CAP)
• Sugar regime expires September 2015
• Milk quota abolition
• Recognition of Producer Organisations and inter-
branch organisations extended to all sectors

21. Irish position
• Maintain share of CAP Budget
• Timeframe for convergence
• Flexibility
• Greening
• Active farmers
• Market measures

22. Approximation
• Based on Commission approach to
redistribution between Member States
• Irish model: maximum gain of 25%, maximum
loss of 15%
– highest gains for those on lowest
payments
– highest losses for those on highest
payments

23. Negotiating Process
• Co-decision
• Timeframe – Council
and Parliament digesting
proposals
• Response by summer
• Agriculture Committee of EP vote on position
in autumn
• Negotiations with Council early 2013 – Irish
Presidency

24. “Long term prospects for agriculture will not
improve if farmers cannot reverse the
steadily decreasing trend in their share of the
value added generated by the food supply
chain. Indeed, the share of agriculture in the
food supply chain has decreased from 29%
in 2000 to 24% in 2005, while over the same
period the share of the food industry,
wholesale and the distribution sector have all
increased”
Source: European Commission Communication on the CAP

25. Thank You.