The European Commission this week outlined long-anticipated proposals to radically overhaul the system of financial supports for the agricultural sector across the European Union.
The top-line changes to the Common Agricultural Policy (CAP) would see ringfenced funding for farming cut by more than a fifth, with supports for agriculture merged with those for rural areas into a single fund.
In brass tacks, this would mean a fall in guaranteed CAP funding from €387 billion down to €300 billion over the course of the EU budget cycle from 2028.
Around 120,000 Irish farmers receive roughly €2bn annually in CAP payments, and much of this money essentially makes a huge cohort of Irish farms viable.
Given this, it was no surprise to see farming organisations here quickly coming out of the blocks to condemn the proposals.
The Irish Farmers’ Association (IFA) warned the move would put food security at risk, while the group representing dairy farmers, the ICMSA, said there would be immediate upward pressure on food prices.
A number of Irish MEPs also came out against the plans, which the Commission argues would allow for “stronger synergies between policies”, and create a more flexible, crisis-responsive budget.
Now the horse-trading really gets going as member states, through the Council of Ministers, start the long process of agreeing on an approach to the proposals, before painstaking talks with the parliament in Brussels and the Commission begin.
Read more:
Ringfenced EU funding for farming cut by 22% under proposals
What do proposed CAP changes mean for Irish farmers?
Ultimately, it could take over two years before any agreement is in place for the start of the next EU budgetary cycle in 2028.
Ireland will likely play a key role in this process, as we will hold the rolling six-month EU presidency for the second half of next year.
This means that what the EU Commission is proposing and what eventually ends up happening might well be very different.
Based on what I’ve written so far, it might seem the changes suggested are largely negative, but are there any positives in there for farmers across the bloc?
Well, from what the Commission has outlined, it wants to make a strong play to encourage more young farmers into the profession.
And this is in response to one of the major issues threatening the future of family farms both here in Ireland and across the EU.
The average age of a farmer in Ireland is pushing 60, and with high income volatility and increased regulation farming isn’t seen as an attractive career path in the way it would have to previous generations.
A recent Teagasc report showed farm incomes were up across the board last year, but it also highlighted severe differences in farmer earnings from one year to the next.
Paired with that, the level of environmental regulations farmers have to adhere to, and biodiversity and other targets that need to be met is only rising.
These are welcome moves to protect our environment but they come at a price, and add layers of complexity to the job.
In an attempt to address the challenge of generational renewal, the Commission has recommended that CAP funding “should be focused on active farmers”, meaning supports would be “targeted towards farmers who exercise agriculture as a principal activity”.
This would mean that farmers who are of pension age would no longer receive supports under CAP.
In addition, the proposals would hugely increase supports for young farmers starting out, with funding for the costs of establishing a new farm potentially rising from €100,000 to €300,000.
The changes would also give individual member states more autonomy when it comes to doling out funds to farmers and rural areas, and can steer money in one direction or the other based on what is deemed more necessary.
This could bring a shift in the well-worn path of supports going directly to farmers in less-well-off regions, as opposed to the areas themselves getting the money.
So farmers could still benefit from rural EU funding, just not directly.
However, the Commission’s proposals are just proposals at this stage and will need approval at various stages of the EU decision-making process if they are to become part of the EU budget.
The Irish Government hasn’t wasted any time in putting domestic structures in place to decide on the country’s stance on all this.
On Thursday, the day after the EU proposals, Minister for Agriculture Martin Heydon held the first meeting of what he calls the “CAP Consultation Committee”.
He called the Commission’s CAP recommendations a “starting point”, adding “we have been through considerable reforms before and we’ve managed to negotiate through them in the past and we’ll do the same again”.
The minister’s positive take might give some of the stakeholders at that CAP committee some reassurance.
Ireland’s response to this will be pretty much an all-inclusive one.
The stakeholders gathered together by the minister include five Government departments, a host of State agencies, farmer organisations, business groups, as well as academics.
IFA President Francie Gorman was giving his reaction to the Commission’s CAP proposals on Wednesday’s RTÉ Six-One News, in which he summed up the complexities associated with finding the right funding model for farmers.
He welcomed the EU’s renewed focus on bringing along more young farmers but pointed out: “If you want the next generation of farmers coming home, along with all the measures that we bring in to support young farmers, we still have to have viable farms for them to come into.”
Essentially, however well-intentioned it is, the idea of giving newer farmers more financial support at the expense of older ones could prove to be a misguided one if it kills off the very farms its trying to protect.
Like most budget-related considerations, it will come down to finding a balance.
And with the next EU budget not kicking in until 2028, at least there is sufficient time to try and get this balance right.
But there’s no doubt that between now and 2028, many battles will be fought as competing interests vie for pieces of a potentially smaller pie of EU funding.
