While the Department of Agriculture has published significant modelling of the next CAP, it hasn’t shared any scenarios that include a coupled payment.
But there is a facility to create one and many would like to see a targeted coupled payment for suckler cows.
Are there any coupled payments at present?
The answer is there are almost none. The facility existed under the Ciolos reforms to have up to 13% of the direct payments pot directed toward coupled payments. In Ireland, we chose not to exercise that option.
A separate coupled protein payment fund is allowed, up to 2% of the Pillar I pot. We decided to exercise that option, but the current protein payment fund only accounts for €3m, about 0.25% of the fund.
Suckler payment
In order to create a 10% fund for a coupled suckler scheme, €118m would have to be deducted from the current Pillar I pot of €1,186m.
What has to be remembered is this would be happening on top of convergence, eco schemes and CRISS (front-loading).
The cumulative effect would be a 44% cut on everybody’s Basic Income Support for Sustainability (BISS) - the new basic payment - in 2023.
That would leave someone currently with entitlements worth €300/ha now holding entitlements worth €168/ha.
Overall effect
It’s actually not that difficult to examine exactly how a coupled payment will affect the bottom line for a person’s overall payment in 2023.
We can ignore CRISS and eco schemes, as they will be unaffected. We simply add the coupled payment and take away the 10% cut to the BISS and add in the coupled payment.
The indications are that there will be about 900,000 suckler cows in the country in 2023. Let’s assume that all of a 10% new coupled fund is allocated toward a suckler cow payment.
The scheme would probably be designed in a way to ensure all cows qualify. That means a coupled payment of €131/cow.
If a farmer has 35 sucklers, they would receive €4,585. That’s a gain of €2,660 in 2023.
A very highly stocked 35ha farm, with 50 sucklers, would gain €6,550 in a coupled payment, a net gain of €4,625.
A suckler herd of 20 cows on 25ha would gain €2,620. If they currently had payments of €300/ha, they would lose €750 to the coupled fund, a net gain of €1,870.
So we can see that a coupled payment would be real money for suckler farmers. But it wouldn’t be free money.
Who loses and how does this affect everyone else?
The worst affected will be high payment recipients without sucklers. They would experience a further loss of 10% of their current payment.
If we take a farmer with 50 entitlements worth €400 each at present, they will lose €2,000 of their payment directly to this coupling fund. Unless they have sucklers, they won’t see any of that money back.
A finisher with 35ha but with high payments worth €550 at present will lose almost as much, with €1,925 of their current payment lost.
This cut would be on top of those from CRISS, convergence, the Young Farmer Scheme fund and the National Reserve. Cattle finishers, dairy and tillage farmers would all lose out.
Will it happen?
The suckler sector is undoubtedly under pressure, with income statistics showing “cattle breeding” as very vulnerable economically.
Sheep farmers are no better off - would they not fight for a coupled payment? That would dilute the gains for suckler farmers.
And how would tillage and dairy farmers react? They could point to the BGDP, BEEP and proposed new suckler schemes as being enough support from CAP for the suckler herd.
Let's look at what would happen if a coupled payment was extended to the sheep sector.
Let's assume a €20/head payment, which added to the €10/ewe from the existing Sheep Welfare Scheme would come close to the €35/ewe called for in the Irish Cattle & Sheep Farmers Association's (ICSA) CAP submission.
With 2.65 million ewes in the country, this would require a fund of €53m/year. This could be done in one of two ways.
One option would be to cut the suckler payment, funding both from the existing €119m set aside for coupled payments. That would shrink the suckler payment to €73/cow or so.
The other option would be to increase the percentage of coupled funding up to the maximum 13%. That would put an extra €35.6m into the coupled coffers.
We now would have a total coupled fund of €154m, allowing coupled payments of €112/cow on 900,000 suckler cows and €20/ewe on 2.65m ewes.
The effect on the basic payment would be to cut the overall BISS fund to €650m.
When the national reserve is subtracted, we have €630m left for basic payments in 2023, before CRISS and eco schemes are added in. It would be a near halving of the basic payment pot.
Tillage's turn
While suckler and sheep coupled payments might satisfy the ICSA and people in the Irish Farmers Association (IFA) such as Derek Deane and Flor McCarthy who have advocated coupled payments, I can't imagine that tillage farmers would be too enamoured with such a proposal.
I would safely predict that Irish Grain Growers (IGG) chair Bobby Miller and IFA grain committee chair Mark Browne would be up in arms at what they might perceive as selective discrimination against their sector.
They could point to the Department's own modelling, which states that two out of three tillage farmers would benefit from CRISS.
This implies that a majority of tillage farmers currently have less than 40ha, with entitlements valued at less than €330/ha.
If they had more land or more valuable entitlements, they would be net losers under CRISS.
So by the Department's own reckoning, tillage farmers as a cohort are not as big in acreage or in basic payments as might be sometimes perceived.
Armed with this information, it can be expected that grain farmers would demand their own coupled payment.
And, again, there is the potential to dilute the coupled payments already modelled, but also to raid the BISS fund once again.
A provision exists to allocate up to 2% (€24m) for protein payments. Would that satisfy tillage farmers?
If we take the Teagasc figure of around 7,000 tillage farmers, that leaves an average payment of €3,400 per tillage farmer.
That is the equivalent of 170 coupled ewe payments at €20/ewe or 30 suckler cow payments at €112/cow.
Total BISS
Now, let's have a final look at the CAP pot in a maximum coupling scenario.
We have a total fund of €1,186bn in 2023.We have eco schemes taking €297m - 25% of the fund.We have CRISS taking €59m - 5% of the fund.We have the Young Farmers Scheme taking €24m - 2% of the fund.We have coupled payments taking €178m - 15% of the fund.That leaves €626m in the BISS pot. We have the National Reserve taking €19m - 3% of that fund.Leaving us with a fund of €607m for BISS.Coupling payments effectively dilutes the basic payment to half its former value.
CRISS will add back in a maximum of €660 and eco schemes will deliver payments to most farmers, if not all, but this would represent the most sweeping CAP reform since the MacSharry reforms 30 years ago.
The logic behind introducing coupled schemes is that it delivers money back into the hands of productive farmers, be they big or small, on the plains of Kildare or the hills of Donegal.
The basic payment has been sliced and diced by a round of convergence with another to follow.
CRISS and eco schemes have further eroded its value, significance and relevance. So why not slash it still further, go the whole hog and create a significant fund for coupled payments.
And we've looked after everybody.
Except dairy farmers.
OK, we may have to start all over.
Nobody said this was going to be easy.
While the Department of Agriculture has published significant modelling of the next CAP, it hasn’t shared any scenarios that include a coupled payment.
But there is a facility to create one and many would like to see a targeted coupled payment for suckler cows.
Are there any coupled payments at present?
The answer is there are almost none. The facility existed under the Ciolos reforms to have up to 13% of the direct payments pot directed toward coupled payments. In Ireland, we chose not to exercise that option.
A separate coupled protein payment fund is allowed, up to 2% of the Pillar I pot. We decided to exercise that option, but the current protein payment fund only accounts for €3m, about 0.25% of the fund.
Suckler payment
In order to create a 10% fund for a coupled suckler scheme, €118m would have to be deducted from the current Pillar I pot of €1,186m.
What has to be remembered is this would be happening on top of convergence, eco schemes and CRISS (front-loading).
The cumulative effect would be a 44% cut on everybody’s Basic Income Support for Sustainability (BISS) - the new basic payment - in 2023.
That would leave someone currently with entitlements worth €300/ha now holding entitlements worth €168/ha.
Overall effect
It’s actually not that difficult to examine exactly how a coupled payment will affect the bottom line for a person’s overall payment in 2023.
We can ignore CRISS and eco schemes, as they will be unaffected. We simply add the coupled payment and take away the 10% cut to the BISS and add in the coupled payment.
The indications are that there will be about 900,000 suckler cows in the country in 2023. Let’s assume that all of a 10% new coupled fund is allocated toward a suckler cow payment.
The scheme would probably be designed in a way to ensure all cows qualify. That means a coupled payment of €131/cow.
If a farmer has 35 sucklers, they would receive €4,585. That’s a gain of €2,660 in 2023.
A very highly stocked 35ha farm, with 50 sucklers, would gain €6,550 in a coupled payment, a net gain of €4,625.
A suckler herd of 20 cows on 25ha would gain €2,620. If they currently had payments of €300/ha, they would lose €750 to the coupled fund, a net gain of €1,870.
So we can see that a coupled payment would be real money for suckler farmers. But it wouldn’t be free money.
Who loses and how does this affect everyone else?
The worst affected will be high payment recipients without sucklers. They would experience a further loss of 10% of their current payment.
If we take a farmer with 50 entitlements worth €400 each at present, they will lose €2,000 of their payment directly to this coupling fund. Unless they have sucklers, they won’t see any of that money back.
A finisher with 35ha but with high payments worth €550 at present will lose almost as much, with €1,925 of their current payment lost.
This cut would be on top of those from CRISS, convergence, the Young Farmer Scheme fund and the National Reserve. Cattle finishers, dairy and tillage farmers would all lose out.
Will it happen?
The suckler sector is undoubtedly under pressure, with income statistics showing “cattle breeding” as very vulnerable economically.
Sheep farmers are no better off - would they not fight for a coupled payment? That would dilute the gains for suckler farmers.
And how would tillage and dairy farmers react? They could point to the BGDP, BEEP and proposed new suckler schemes as being enough support from CAP for the suckler herd.
Let's look at what would happen if a coupled payment was extended to the sheep sector.
Let's assume a €20/head payment, which added to the €10/ewe from the existing Sheep Welfare Scheme would come close to the €35/ewe called for in the Irish Cattle & Sheep Farmers Association's (ICSA) CAP submission.
With 2.65 million ewes in the country, this would require a fund of €53m/year. This could be done in one of two ways.
One option would be to cut the suckler payment, funding both from the existing €119m set aside for coupled payments. That would shrink the suckler payment to €73/cow or so.
The other option would be to increase the percentage of coupled funding up to the maximum 13%. That would put an extra €35.6m into the coupled coffers.
We now would have a total coupled fund of €154m, allowing coupled payments of €112/cow on 900,000 suckler cows and €20/ewe on 2.65m ewes.
The effect on the basic payment would be to cut the overall BISS fund to €650m.
When the national reserve is subtracted, we have €630m left for basic payments in 2023, before CRISS and eco schemes are added in. It would be a near halving of the basic payment pot.
Tillage's turn
While suckler and sheep coupled payments might satisfy the ICSA and people in the Irish Farmers Association (IFA) such as Derek Deane and Flor McCarthy who have advocated coupled payments, I can't imagine that tillage farmers would be too enamoured with such a proposal.
I would safely predict that Irish Grain Growers (IGG) chair Bobby Miller and IFA grain committee chair Mark Browne would be up in arms at what they might perceive as selective discrimination against their sector.
They could point to the Department's own modelling, which states that two out of three tillage farmers would benefit from CRISS.
This implies that a majority of tillage farmers currently have less than 40ha, with entitlements valued at less than €330/ha.
If they had more land or more valuable entitlements, they would be net losers under CRISS.
So by the Department's own reckoning, tillage farmers as a cohort are not as big in acreage or in basic payments as might be sometimes perceived.
Armed with this information, it can be expected that grain farmers would demand their own coupled payment.
And, again, there is the potential to dilute the coupled payments already modelled, but also to raid the BISS fund once again.
A provision exists to allocate up to 2% (€24m) for protein payments. Would that satisfy tillage farmers?
If we take the Teagasc figure of around 7,000 tillage farmers, that leaves an average payment of €3,400 per tillage farmer.
That is the equivalent of 170 coupled ewe payments at €20/ewe or 30 suckler cow payments at €112/cow.
Total BISS
Now, let's have a final look at the CAP pot in a maximum coupling scenario.
We have a total fund of €1,186bn in 2023.We have eco schemes taking €297m - 25% of the fund.We have CRISS taking €59m - 5% of the fund.We have the Young Farmers Scheme taking €24m - 2% of the fund.We have coupled payments taking €178m - 15% of the fund.That leaves €626m in the BISS pot. We have the National Reserve taking €19m - 3% of that fund.Leaving us with a fund of €607m for BISS.
Coupling payments effectively dilutes the basic payment to half its former value.
CRISS will add back in a maximum of €660 and eco schemes will deliver payments to most farmers, if not all, but this would represent the most sweeping CAP reform since the MacSharry reforms 30 years ago.
The logic behind introducing coupled schemes is that it delivers money back into the hands of productive farmers, be they big or small, on the plains of Kildare or the hills of Donegal.
The basic payment has been sliced and diced by a round of convergence with another to follow.
CRISS and eco schemes have further eroded its value, significance and relevance. So why not slash it still further, go the whole hog and create a significant fund for coupled payments.
And we've looked after everybody.
Except dairy farmers.
OK, we may have to start all over.
Nobody said this was going to be easy.
This is a subscriber-only article
SHARING OPTIONS: