By using this website, you consent to our use of cookies. For more information on cookies see our privacy policy page.

Text Size: a a
Home A-Z Index Subscribe/RSS Contact Us Twitter logo small white bird

Minister Smith Delivers €170 Million to Irish Farmers in CAP Negotiations

The CAP Health Check will deliver some €170 million to Irish farmers over the next five years according to Minister for Agriculture, Fisheries and Food, Brendan Smith. "At a conservative estimate this deal will deliver €100m worth of additional milk production" said Minister Smith "and over the three years 2010-2012 it will also mean additional payments to farmers amounting to €70m".

"This is enormously positive for the sector and, while there are also elements in the package that I do not like, such as increased modulation, I have ensured that this will not lead to any loss to Irish farmers".

The Minister was speaking after an all-night negotiating session in Brussels at which Ministers from the 27 EU Member States agreed a package of reforms of the CAP (known as the "Health Check").

Minister Smith said the Health Check was "a very good deal for Irish farmers negotiated in very challenging circumstances".

Milk Quota increase for Ireland:

It was agreed that Milk quotas would be increased by 1% per year for each of the next five years. A review of the market situation before December 2010 and December 2012 will further consider the conditions for smoothly phasing out the milk quota system in 2015.

"The negotiations on milk were particularly tough," said Minister Smith "as some powerful Member States were opposed to the quota increases. By pressing strongly for higher quota increases, Ireland ensured that the Commission proposal was not watered down and we also got agreement for an adjustment in the butterfat reference which will deliver the equivalent of another 2% in milk quota in 2009 for Ireland".

Minister Smith said that due to our additional production potential, Ireland would benefit greatly from these changes. Including the 2% quota increase already in place for 2008, this means that an additional 500 million litres of milk will be produced in Ireland when these changes come into effect. This was an outstanding achievement given the alignment of forces on the Council of Ministers, he said. " I am particularly pleased that our farmers and processors now have policy clarity and can plan their investments with a greater degree of certainty about the future."

Milk Market Supports

"I was very pleased too that we managed to maintain the butter and skimmed milk powder intervention schemes intact. There was a very determined effort made to introduce tendering for every tonne of butter and SMP intervened". This would have been particularly difficult for Ireland given our seasonal pattern of production so it was very important to secure the continuation of intervention buying-in for the first 30,000 tonnes of butter and 109,000 tonnes of SMP at the fixed price.

This was equally true for butter Private Storage Aid where current arrangements were maintained, despite efforts to introduce tendering. "In essence, the key market management mechanisms that are most important to Ireland have been left completely unchanged", according to the Minister.

Additional Funding for farm payments

Member States will be allowed to take measures and use EU funds to support sectors and regions under particular pressure. "I had pressed strongly for this national discretion," said Minister Smith. "I also succeeded in obtaining a change in the provisions that will allow me to target specific sectors in need of assistance."

"I was one of the first to press for the use of unspent funds from national Single Farm Payment ceilings to fund these measures. The deal agreed today means that a minimum of around €23m per year in funds will flow to Irish farmers, and the final figure could be significantly higher". Minister Smith said this was additional money which would not otherwise have been available to farmers due to the complex rules attaching to the SFP. We can start using these funds from 2009 from the national reserve and will be able to supplement them from 2010 onwards with the unspent SPS funds. "We need to consider carefully how these funds can best be used for the development of Irish farming, within the options available under the new Regulation" said Minister Smith "and I will be consulting widely within the sector on this issue in the coming months."

Modulation (transfers from direct payments to rural development)

Minister Smith said he would have preferred if no additional modulation were agreed. "However I succeeded, in cooperation with colleagues from other Member States, in getting the rate of additional modulation considerably reduced" he said "and ensured that all the funds raised can be passed straight back to Irish farmers".

The agreed rates of additional modulation (+5% for payments up to €300k with a higher rate above this level) will generate €120million in total over four years in transfers from the SPS to rural development."I can confirm that all of this money will be used for payments to farmers under the rural development programme," said Minister Smith. While there were limitations in how this money could be spent the Minister said it could, for example, be used for additional payments to REPS farmers. "Again I will consult with interested bodies to see how we can best use these funds, but I insist that all of it must go back to Irish farmers".

The Minister noted that Ireland already provides an exceptionally high level of national funding for its Rural Development Programme. He confirmed that the new modulation funds would not be used to substitute for this national funding.

Land afforested

The Commission's proposals also allow land afforested in 2009 and later years under EU rural development programmes to be eligible from 2010 to draw down single payment "I have managed to ensure that land afforested under our nationally funded, State aided afforestation programme will also be eligible" the Minister said.

Simplification of EU schemes

The Minister said that some limited simplification of EU schemes had also been achieved but much more remained to be done. "I successfully pressed for an unambiguous commitment by the Council and Commission to continue the simplification process. We all know that there is much more that can be done to reduce the bureaucracy attached to EU payments which are worth over €1.7 billion per year to Irish agriculture."

Among the simplification measures agreed were the following:

  • It will no longer be necessary to apply modulation to farmers' full payment and subsequently refund that element relating to the first €5,000 of each payment. In future, the first €5,000 will simply be exempt from modulation and the farmer will get his full payment up front. In practical terms, it will mean that farmers will no longer have to wait for up to nine months for these refunds which would have amounted to €49m per year by 2012.
  • Compulsory set aside of tillage land has been abolished and this will do away with the complex management rules attached to it.
  • The €100 threshold below which cross compliance penalties may not be imposed will be applicable separately to payments under SPS and rural development. With effect from 2010 SPS Payments of less than €100 can no longer be made.
  • The rules in relation to the transfer of entitlements have been simplified and the restriction on the transfer of National Reserve entitlements is being removed.
  • The requirement that 80% of the entitlements be used in one calendar year before a transfer without land has also been abolished.
  • The 'use it or lose it' rule for the SPS has also been standardised at two years for both ordinary and national reserve entitlements.

Date Released: 20 November 2007