Where is the CAP debate 10 days on?

So where is the CAP debate, 10 days after the minister’s announcement of the schemes?

It’s fair to say that the issues in play seem to have narrowed considerably at this point. The IFA has just released a document responding to the minister’s proposals. It has honed in on a couple of key issues. It’s worth looking at them.

In relation to direct payments, the only issue disputed in the document is the level of funding directed toward eco schemes. The IFA holds that the level of ambition relating to agri-environmental schemes in Pillar II opens the door for the Government to halve the 25% funding targeted for eco schemes.

The irony of this position is that even if the IFA wins, the farmers who might seem to benefit most from this measure would still probably lose. If eco schemes return the bones of €63/ha to qualifying farmers, It’s actually a net gain for any farmer currently with entitlements of less than €250/ha. Because they are putting less into the pot (25% of €250 = €62.50) than they are getting back.

There is also the possibility for many farmers of getting eco schemes payments on land over and above the entitlements they hold, as tens of thousands of hectares of scrub will receive this payment, even if there isn’t an entitlement to cover it.

So the losers will be people with higher entitlements, particularly north of €300 (including Greening) at present. These people are also mostly the losers over CRISS and most certainly will lose out over convergence.

The IFA is pointing out that the combination of measures is too sudden and drastic a cut in their payment. But if eco schemes are at a lower percentage, and if the BISS (the Basic Income Support for Sustainability, the new BPS) is thus less affected and higher, convergence at 85% will take the bulk of that money away. And unlike the eco schemes, there will be no way of re-accessing it, it will be redistributed to lower-entitlement holders. Forever.

This Catch-22 dilemma around eco-scheme funding level highlights the difficulty of negotiating to minimise the losses of those worst affected by the proposals. It’s like they used to say about the backline of one of the tougher club teams here in Wexford - if they didn’t get you on the way in, they’d get you on the way back out.

Accessibility

The second leg of the IFA’s counter-proposals is one that will be supported by farmers across the board. It relates to the need to add more qualifying measures for eco schemes those that have currently been proposed. The minister has openly accepted that the five he has posited may be limiting.

Pillar II

In relation to the schemes, the IFA is continuing its campaign for €300/suckler cow and €30/ewe coupled payments.

A suckler cow payment of €300 for 400,000 cows would require €120m per year, or €600m over the five years. That requires an extra €360m from somewhere. If it’s for every cow that a farmer wants to enter for it, it’s reasonable to assume that the higher payment would dramatically increase application levels.

Let’s say 700,000 of the 950,000 suckler cows we currently have are applied on in two years’ time. Now we are talking about €210m per annum paid to suckler cows. The funding for the five years would have to be swelled from €260m to over a billion euros, €1,050m to be exact

Then there’s the sheep payment. Instead of the €12/head for 1.7m ewes, the IFA wants €30/head for 2.6m ewes. That would require the €20m annual fund be increased almost fourfold to €78m. Over the five years of the plan that’s an extra €290m.

Taken together, these two proposals would cost an extra €1.07bn over the five years of the next CAP. It’s a big ask. There may be a parallel universe where this could be delivered by Government, but it won’t be this one, I fear.

Are these proposals designed as a negotiating tactic, to get the coupled payment up as high as possible? Is the IFA negotiating with the minister, or is it negotiating with itself as much as anything else?

North-south divide

I doubt if the gap between the Munster/South Leinster IFA and the Connacht /Ulster/North Leinster IFA has ever been bigger.

The fault lines extend to more than CAP. The implementation of the rules proposed off the back of the IFA’s own diversity report revealed the same north/south fissure. The IFA is calling for the organics funding to be mostly diverted to support the coupled sheep and suckler schemes.

Meanwhile, the Ulster/North Leinster regional chair Nigel Renaghan, who is an organic farmer (although primarily a poultry farmer), is openly opposed to that policy position. John Curran, the Meath chair who is seeking to succeed Renaghan in an election due to take place before Christmas, is also an organic farmer, and also openly critical of leadership for wanting to raid the funds committed to organic farming.

Could there be a middle ground? There seems to be some room for compromise from all sides.

The majority of farmers within reach of transitioning to organic are sheep and suckler farmers. The more extensively stocked drystock farmers might be attracted by an organics scheme that included a significant coupled payment for their animals at its heart. It wouldn’t fix everyone’s problem, but it would be a solution for some. It would also reduce the carbon output form farming, something that must now be core to practically every policy instrument.

Every per cent over the 21% minimum will require cutting into the flesh of farming. To reach the 30% target will cut into the marrow

The KPMG report commissioned by this paper shows that reaching past the 13-18% we can deliver with the widespread adaptation of current technologies will prove challenging, but necessary. The absolute minimum we will be expected to deliver is 21%, with the Government sectoral target expected to be in the 21-30% range by 2030.

What does this mean? It means that we need to stretch very hard to reach the 21%, but as the KPMG report has shown, and indeed the Climate Change Advisory Council’s own report, released on Monday, has shown, is that every per cent over the 21% minimum will require cutting into the flesh of farming. To reach the 30% target will cut into the marrow.

Next Government

It’s important to understand that it won’t be this Government’s job to pick a number between 21 and 30. The CCAC report makes clear that there will be two separate phases to the carbon reduction plan. Phase one is now starting, with each sector working towards delivery of the reduction required by the bands set out for it. For farming this will be 21-30%.

It will fall to a future government to refine that band to a narrower target. The degree of change, and the degree of cut to the national herd required, will be decided upon at that stage. For that reason, one has to wonder at the very obvious IFA strategy of accusing the Green Party of being the authors of the current CAP strategy, and the enemy of family farming.

At this point, it seems inevitable that Sinn Féin will lead the next government. Looking at the trend of opinion polls, it is entirely feasible that their coalition partners will come from the left. Labour, the Social Democrats, People before Profit/Solidarity, and the Green Party are all potential partners, with left-leaning independents like Catherine Connolly and Thomas Pringle also potential partners.

It’s much easier to make those numbers work than some combination of Fianna Fáil Rural Independents and Labour and/or the Greens.

For that reason, it might be the moment to find a way of declaring détente. Eamon Ryan has said on Friday that he doesn’t want to point fingers at farmers. Perhaps that’s a start.