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Every farmer in Ireland is to have their direct payment cut by 2.05% this year due to a reduced Pillar I CAP budget, the Department of Agriculture has confirmed.
The cut has been anticipated since the EU agreed its new seven-year budget late last year.
While the new CAP will not begin until 2023, the budget takes effect from 2021 until 2027.
It will see Ireland’s Pillar I allocation (used to fund the Basic Payment Scheme, the Young Farmer Scheme and the National Reserve) reduced by €25m from €1.21bn to €1.19bn.
The Pillar I allocation accounts for 78% of the money farmers receive through the CAP each year.
Average cut
The 2.05% cut will result in a €200 reduction to the average Irish direct payment of €9,400.
The average payment for 2021 will be €9,200.
Of course, not all farmers receive the average.
The larger a farmer’s payment, the larger their cut will be.
For example, a farmer receiving €5,000 will only by cut by €100, while someone drawing down €50,000 will be cut by €1,000.
Pillar II
Ireland has actually managed to secure the same annual CAP budget as previous years of approximately €1.5bn.
The 2.05% cut to direct payments will be offset by an increase in EU funding for rural development schemes, rising from €304m to €321m, and money from the EU’s COVID-19 recovery fund.
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