Thursday , January 28 2021

About 200 farms will be affected by the € 100,000 CAP limit



Only under 200 Irish farms will be affected by one of the main proposals to reform the European Union's Common Agricultural Policy which will set a limit of € 100,000 for payments to farmers.

Research by Oireachtas' Parliamentary Budget Office shows the proposed submission of 100,000 euros from 2020 has the potential to have a direct impact on only 199 of the more than 124,000 Irish farmers who receive payments with CAP.

However, they are at risk of losing more than 6.6 million euros in income each year under the proposed CAP reform, with an average annual reduction of € 33,211.

Half of this total is accounted for by farmers from five districts: Cork, Meath, Wexford, Tipperary and Kildare. They include 27 Cork-based farmers who are set to lose more than € 1.1 million in revenue – an average of € 40,994 each.

There are also plans to allow each EU country to reduce the level of subsidies for farmers who receive more than € 60,000 per year in direct payments from the European Union.

The main objective of the proposal that will see the overall budget of the CAP reduced by at least 5% is to cut the size of financial support to the largest EU farmers. That came after the figures showed that 20% of farmers received around 80% of direct payments under the previous CAP reforms introduced in 2013.

Only 1.4% of Irish farmers get payments of more than € 50,000 but they account for almost 10% of all payments.

Research shows that more than 40% of all payments go to less than 12% of farmers while almost 70% of all farmers receive less than € 10,000 per year from the European Union.

Ireland received € 1.54 billion under CAP last year (2.6% of all CAP budgets) of € 1.2 billion in direct payments to farmers.

It is estimated that the impact of Brexit with the loss of UK contributions will reduce the annual CAP budget, which was € 58.9bn last year, around € 3 billion.

The figures show 80% of CAP funds for Ireland go towards direct payments to farmers. Irish farmers rely heavily on EU subsidies with 56% of average family farm income derived from direct payments from CAP funds.

This figure ranges from 22% for dairy farmers to more than 100% for farmers who raise livestock and sheep.

"Dependence of more than 100% of revenue shows that the sector is economically vulnerable and is trading at a loss," the report said.

Some districts including Leitrim, Longford, Sligo, Donegal, Westmeath and Laois almost entirely depend on the direct support of CAP for income.

The latest figures show the average family farm income in Ireland is € 31,442 for which CAP contributes € 17,569. This is compared to the national average wage of € 37,646.

There are also regional variations in dependence on EU subsidies with farmers in Connacht and Ulster entirely dependent on CAP payments compared to 83% of farmers in Leinster and 65% of farmers in Munster.


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