CAP changes: The coming year will see the beginning of a new chapter in agriculture when the sector will start to cope with the introduction of the biggest reform of the Common Agricultural Policy since it was established.Tomorrow will mark one ofthe most important developments in the history of Irish agriculture, writes Seán MacConnell
The fundamental reform of the farm policy which kicks in tomorrow will completely change the way the EU supports its farm sector. From now on, farm production will no longer be linked to farm supports, those famous cheques-in-the-post which are paid to Europe's farmers, and market supports for dairy produce will be reduced.
At such an important time in the history of Europe's agriculture, it is worth recalling that the people who established the European Union, which flowed from an agreement on steel and coal production, had known real hunger during the second World War.
Determined never to be hungry again and noticing that rural people were abandoning their farms and the countryside for steady money from urban jobs as Europe rebuilt, the French and Germans, in particular, favoured supporting their farmers to deliver food security.
When Ireland joined the then EEC over 30 years ago, our farmers were among the poorest in the then nine member countries and they benefited greatly from the payments.
It was estimated by Mr Tom Arnold, the former Department of Agriculture economist and now head of the aid agency, Concern, that the agricultural sector, which includes the processing industry, received over €30 billion from Europe in direct and indirect supports in those years.
Now, those supports will no longer be linked to production but instead will be based on the levels of support which were paid to the farmers in 2000, 2001 and 2002.
This so-called "decoupling" of farm support from farm production will, in the words of the former EU commissioner for agriculture and rural development, Dr Franz Fischler, deliver a new and effective farm policy.
"The bulk of our direct payments will no longer be linked to production. To our farmers, it offers a policy which will stabilise their incomes and enable them to produce what the consumers want," he said
"Our consumers and taxpayers will get more transparency and better value for money. This reform also sends a strong message to the world. Our new policy is trade friendly. We are saying goodbye to the old subsidy system which significantly distorts international trade and harms developing countries," he said when the deal was agreed in 2003.
The key elements of the new, reformed CAP were, in a nutshell:
A single farm payment for EU farmers, independent from production; limited coupled elements may be maintained to avoid abandonment of production.
This payment will be linked to respect for the environment, food safety, animal and plant health and animal welfare standards, as well as the requirement to keep all farmland in good agricultural and environmental condition ("cross-compliance").
A strengthened rural development policy with more EU money, new measures to promote the environment, food quality and animal welfare and to help farmers to meet EU production standards.
Reduction in direct payments ("modulation") for bigger farms to finance the new rural development policy, a mechanism for financial discipline to ensure that the farm budget fixed until 2013 is not overshot.
Revisions to the market policy of the CAP support for the dairy sector, involving asymmetric price cuts in the milk sector.
The intervention price for butter will be reduced by 25 per cent over four years, which is an additional price cut of 10 per cent compared to Agenda 2000. For skimmed milk powder, a 15 per cent reduction over three years, as agreed in Agenda 2000, was retained.
Reduction of the monthly increments in the cereals sector by half. The current intervention price will be maintained.
Reforms in the rice, durum wheat, nuts, starch potatoes and dried fodder sectors.
Initially, the farm organisations, with the exception of the smallest in the State, the Irish Cattle and Sheepfarmers' Association, rejected the reforms out of hand but now are fully in support.
The normally vocal IFA and ICMSA have gone silent since the the Department of Agriculture and Food decided that Ireland should opt for a total break between production and supports despite the fact that we could have opted for a partial system as many other member- states have done.
The Department had read the signals from the farming community better than the farm organisations and while it offered a consultation process, it was clear from an early stage that farmers wanted an end to bureaucratic form-filling and would welcome one single payment.
Earlier this year, the farmers were told just exactly what they would get in their Single Farm Payment, under which €1.6 billion will be paid out to them next year.
The average payment will be just under €10,000 but as is often the case in farming, the different sectoral areas will get varying amounts.
Tillage farmers will be getting just over €19,000, followed by dairy farmers who also have beef cattle, who will receive nearly €13,000. The beef farmers will get close to €11,000 and sheep farmers €9,500. Dairy farmers, who traditionally received their supports in the marketing of their product rather than headage or other livestock payments, will get least, just over €6,000.