Farmers producing beef and sheep will be hardest hit by the reforms of the CAP announced in Brussels last week. Seán MacConnell, Agriculture Correspondent, spoke to one such farmer about the proposals
Kilkenny beef farmer John Bryan accepts that he is "harvesting premia" and that is why the CAP reform proposals made last week bring a chill to his soul.
"Any profit I make during the year comes in the form of premium payments on the cattle I run and any interference with those payments mean a loss for me," he said. "I cannot survive a cut of 20 per cent in payments no matter how many years the cuts are spread over," he said on his farm at Cappagh, Inistioge, this week.
He is what he would describe as a medium-sized beef-producing operation which depends completely on continuing payments from the EU. "When I started farming in 1980, I was getting £1 per lb for my beef and making enough profit to get by.
"I built up the operation and I now run about 200 cattle on the 250 acres I farm, some of which is leased. Twenty-two years on I am now getting 85p per lb for the same animals and I am producing them at a loss," he adds.
"Without the EU premia which were paid to farmers for the expected fall in prices in the first reform of the CAP, none of us in this business could continue."
John, who is married with two children, explains how his operation works and how dependent it is on the EU supports. "I buy weanlings [young cattle] normally over in the west for say £500. I will feed and keep that animal for perhaps two winters and will sell it for £630. Out of that profit, I will have to take my costs and I estimate I have to sell that animal at a loss of £170.
"The premium on that animal will run to £400 and my profits, minus my outgoings, come out of the £230 which I have in premia over and above the sale price. Sometimes I wonder what I'm doing, especially when I hear what is being proposed in Europe."
John finds it difficult to accept how there could be a sustainable beef industry here if the premiums on animals are cut further. "I think a lot of people, especially those who farm part time and who are not in the business extensively, will probably quit. I know that a lot of the people I buy weanlings from in the west will probably get out of the business if they continue to get a payment for not producing."
Directing savings from premiums into rural development schemes such as more environmental farming, standards of animal welfare and other suggestions are bound to increase costs to the farmer, he believes. "It will most definitely mean a loss of income for rural areas generally; silage contractors, vets and fertiliser suppliers."
In his own case, these costs came to £25,000 last year and if premiums are cut by 20 per cent, these costs would have to be reduced accordingly. "If farmers like myself are to go on producing beef at a loss, then the level of supports must remain the same or improved to take account of inflation and rising costs."