Analysis: The EU Commissioner for Agriculture and Fisheries,Dr Franz Fischler, revealed full details of his farm policy reforms yesterday. Seán MacConnell examines the package.
It is hard to escape the feeling that the Common Agricultural Policy reforms revealed yesterday have more to do with the forthcoming world trade negotiations and enlargement of the European Union than the operation of the policy itself.
What Dr Franz Fischler has proposed will strip away the myriad of schemes and payments made to farmers and replace them with a single payment which will be much easier to defend inside and outside the Union.
Launching the package at a press conference yesterday, Dr Fischler first told farmers that he has not and will not abandon them. Irish farmers may well disagree.
The main policy change, decoupling, was aimed at breaking the historic link between output and subsidy which has led to "subsidy farming" where those with the biggest farms and the largest output gained most. He proposed that farmers will in future receive one single payment a year based on the direct payments farmers received in the years 2000-2002 inclusive, irrespective of what they produce from 2004 onwards.
For most Irish farmers this payment will be a godsend, eliminating tedious form filling and it might also allow some farmers who have been working very hard and feel they are not receiving their just rewards, to cut back on their workloads.
Dr Fischler has closed the door, however, to any farmer who believes he can retire and do nothing by insisting that the farm must be kept in good condition.
For those who wish to continue production, the payments will be linked to keeping all farmland in good condition and proper animal welfare, occupational safety standards and environmental standards being maintained.
Dr Fischler warned that anyone breaching such standards would be fined and punished. He also made it clear that payments would cease if the land was used for any other purpose, such as forestry.
Independent reports here suggest the national beef herd will drop by 30 per cent when this decoupling is introduced but that will be offset by a price increase for farmers who continue to produce beef after 2005.
This proposed drop in production has raised a lot of concern at Government, farming and industry level but for many small beef producers and older farmers, it may present a method of leaving what is becoming a very difficult area.
The farm organisations estimate that this proposal could cost the Irish economy at least €300 million in lost exports and many jobs would be lost in the processing sector.
Perhaps the greatest shock yesterday was for the dairy farmers who found that Dr Fischler had brought forward proposals to cut market supports from next year by 25 per cent.
By bringing forward cuts in market supports which already existed in the last CAP Reform Plan, Dr Fischler has speeded the plough towards total reform of the sector.
The compensation Dr Fischler had on offer, a 1 per cent increase in national milk quota levels, looked unlikely to appease a sector which has been experiencing its worst year in a decade. While there will be little change in the cereals sector, Dr Fischler did propose plans to reduce market supports in the cereals area which will result in a more competitive environment for European and Irish farmers.
Dr Fischler announced he was also pressing forward with plans to cut direct payments to larger farmers from 2007 onwards, and farmers receiving over €5,000 in direct support will see an accumulated cut of 12 .5 per cent by 2012.
Farmers receiving over €50,000 a year in direct supports will face a cumulative cut of 19 per cent by 2014 but this will be unlikely to impact on many Irish farmers.
Animals, it could be argued, had a very good day yesterday with great emphasis put on increased animal welfare in the future being tied to continuing farm support payments.