Lump sum payments and significantly higher organic payment rates

The Government’s ambitious plans to increase the utilisable agricultural area farmed organically to 7.5% by 2027 is being underpinned by greatly enhanced payments and a five-fold increase in the budget to €256m. Payment rates are being increased by anywhere from €20/ha to €500/ha, with the Department particularly keen to attract horticulture and dairy producers in to the scheme.

The proposed payment rates submitted in Ireland’s CAP Strategic Plan for approval by the EU Commission are detailed in Table 1, while the payment rates under the existing scheme are outlined in Table 2.

As can be readily seen, the largest increase is for horticulture producers. In-conversion payment rates will increase under the new scheme by €500/ha to €800/ha. The area of land eligible to draw down this level of payment has also increased from 6ha in the existing scheme to 70ha from 1 January 2023.

The payment rate for horticulture producers once in full organic status will treble from the existing level of €200/ha to €600/ha with the increased 70ha area also eligible.

Dairy farmers

Dairy farmers will witness the next greatest lift and are being categorised separate to other livestock enterprises in the new scheme. There is a proposed in-conversion phase payment of €350/ha up to 70ha and €60/ha thereafter. This is €130/ha higher on the first 70ha, with the payment rate above this area unchanged at €60/ha.

The payment rates for years three to five are also €130/ha higher, with the rate for each additional hectare in excess of 70ha unchanged at €30/ha.

Drystock farmers

Suckler, beef and sheep farmers will be offered a payment of €300/ha on the first 70ha during the conversion phase, with this representing an increase of €80/ha. The payment above this area is also unchanged at €60/ha.

Once in full organic status, the proposed payment rate is €50/ha lower at €250/ha on the first 70ha. This equates to an increase of €80/ha on the existing scheme payment rates.

Tillage farmers

The proposals include the lowest payment increase for tillage farmers on the face of it, with payments increasing by €20/ha in the conversion phase. However, the area bands have been significantly increased from the current scheme, where payment bands were based on areas of up to 20ha, from 20ha to 70ha and above 70ha.

The payment rate proposed for the conversion phase stands at €320/ha. This is an increase of €20 on the first payment band of up to 20ha and an increase of €100/ha on each hectare up to 70ha. Rates above 70ha are €60/ha.

A similar payment mechanism is in place once in full organic status, with the payment rate on the first 20ha increasing by €70ha while the level of payment from 20ha to 70ha is €100/ha higher.

Existing producers

It is important to note that the payment rates outlined above for farmers in full organic status will also apply to existing organic scheme producers once the new CAP Strategic Plan comes into play on 1 January 2023.

Announcing the new payment proposals on Wednesday, Minister of State at the Department of Agriculture, Food and the Marine, Senator Pippa Hackett said: “The budget proposed for this scheme under the next CAP is a five-fold increase on what was previously available.

“This is my commitment to growing and investing in the Irish organic sector. Feedback from the CAP consultative committee, the reconvened Organic Strategy forum and interested stakeholders has made it clear that enhanced payment rates are needed to support farmers converting to and maintaining organic farming.”

Lump sum payments

In addition to higher payment rates, a new lump sum payment termed an ‘annual participation’ payment is being introduced. This will be €2,000 in the first year of conversion and €1,400/year thereafter.

Minister Hackett said: “Organic farmers incur additional expenses on an annual basis, such as attending training and constantly upskilling themselves in soil health and animal management.

“In recognition of these costs, I am proposing an annual participation payment which will be €2,000 in the first year of conversion and €1,400/year thereafter. This will support farmers as we achieve the targets set out in the Programme for Government of farming 330,000ha organically.”

Additional sweeteners

The Department of Agriculture is also proposing that organic farmers would also receive priority access to the new Agri-Climate Rural Environment Scheme (ACRES), which will also commence on 1 January 2023. With many industry sources expecting the scheme to be oversubscribed, it could be a further enticement for farmers to convert to organic farming.

Those in organic farming will also be eligible under CAP proposals to draw down 10% higher grant aid funding of 50% under the proposed On-Farm Capital Investment Scheme, which will replace the Targeted Agricultural Modernisation Scheme.

More organic advisers

Both Teagasc and the Agricultural Consultants Association are expecting the enhanced payment rates to generate significantly higher interest in organics. Teagasc director Frank O’Mara outlined at the launch that Teagasc is increasing its organic team to four specialists and three organic advisers, while Julie Roche, Agricultural Consultants Association, outlined that advisers are currently undergoing training and that two specialists will be appointed to deal with organic farming.

The Department has developed a payments calculator for farmers and advisers to assess the value to the farm from converting to organic farming and this will be available at https://cap-calculators.apps.rhos.agriculture.gov.ie/