Ongoing reform of the CAP is a hotly debated topic amongst producers and industry stakeholders, with the agricultural community of Belfield as keen as any to give their assessment of developments in the talks. With the tea-room closed and lecture halls empty, Noel Bardon reports on some of views held by students and faculty on the future of CAP post-2022
The current reform discussions of the 2020-2022 CAP extension period have seen agri-environmental concerns come to the fore, with farming seen as a partial cause, unmistakable victim, and possible solution to the GHG driven challenges of climate change, from the viewpoint of many in Brussels. Other sustainability concerns surrounding agriculture in Europe have also come to prominence in discussions, with the key areas of water quality, biodiversity and reducing pressures on areas of ecological or archaeological sensitivity at the fore.
Policymakers have long been signalling that taxpayers are becoming unwilling to fund larger, commercial scale enterprises through the CAP, and that decreases in the annual CAP budget are inevitable. Many producers are hopeful that such cuts in funding will be geared towards these larger landowners, enacted through decreased payment ceilings, with family farms and small-scale producers insulated from the cutbacks. Agreement on these policy issues is far off however, with farmers likely to remain in the limbo for another while on the many details of future schemes. With the broad policy directions established by Brussels, preliminary indications reveal a CAP of reduced system inputs, consumer-orientated production, and an expansion of environmental measures. With these points in mind, two UCD students weighed in on the Irish perspective of proposed reforms, from their experience of different sections of Irish agriculture.
Fourth year UCD Food & Agribusiness Management student Tadhg Murtagh stressed the need for sufficiently funded agri-environmental schemes to keep dry stock farms operational, “It is the reality, with current beef prices, that agri-environmental schemes are necessary for the economic survival of family beef and sheep enterprises, particularly around the Midlands and West”. The Longford native noted the differences in enterprise dependence on income supports by sector with “The only enterprise profitable at a reasonable scale for the family farm would be dairying” also stressing that “Dairy is not suited to the land type or off-farm job situations of many around here. Agri-environmental schemes are a win-win for these farmers and the environment”.
Speaking on the relative ease with which further environmental measures in the new environmental schemes could be introduced at producer level, Tadhg believed the planting of hedges and the ecological enhancement of marginal, unproductive areas of land to be the measures most likely to be adopted in the BMW region. On the contrary, reductions in fertiliser and herbicide usage, as stipulated by the EU Farm to Fork Strategy, are likely to be the “most problematic options on a practical level for farmers” according to Murtagh’s experience of the family farm’s beef operation typical of those in the area. The outcome of such policies is, in the student’s view, a reduction in stocking rates right across the country. These reductions may not be forced through via changes to the Nitrates Directive or the maximum stocking rates of schemes per se, but rather an “inevitable consequence” of the input constraints.
Many producers who have overlooked previous agri-environmental schemes, such as AEOS or GLAS, may be persuaded to subscribe to the new REPS through financial necessity. Difficulties in repaying the borrowings that funded expansion will only become apparent once current milk price highs dampen
Murtagh also noted that a feeling is prevailing, as of late, within elements of the financial services sector, in which he worked over his third year PWE, that the debt burden of expanded dairy enterprises may become heavier than anticipated. Many producers who have overlooked previous agri-environmental schemes, such as AEOS or GLAS, may be convinced to subscribe to the new REPS through financial necessity, should a downturn in milk price interfere with their ability to repay borrowings.
Fourth-year Dairy Business student John Mahon gave his thoughts on the subject, as one with familiarity of agricultural production systems outside of the EU. John spent six months of 2019 on placement in New Zealand. Over his PWE, he worked on an 800 cow dairy unit on the South Island and alongside agricultural consultants in AgFirst NZ on the country’s North Island. Speaking on the broad topic of producer payments, Mahon remarked on a belief for the “potential for the elimination of payments to producers in the distant future” commented John referring to the removal of farm payments in NZ. Such moves would take time however and require “existing subsidies incentivise and promote sustainable farm practices, showing farmers that management decisions can drive profitability” he added.
Mahon voiced concerns that “As a dry stock farmer, heavily involved in the dairy industry, I think land entitlements have distorted land leasing prices and are potentially limiting the introduction of new young, skilled personnel to both sectors of the industry.” The extent of this capitalisation of farm supports into increased land prices is a highly contested point at policy level. Many, like Mahon, believe supports are hindering the ability of younger, potentially more efficient and environmentally conscious farmers to access the resources needed to begin farming themselves, primarily land. The introduction of an early retirement scheme in the new CAP may be an option at national level, but tightened payment eligibility criteria on “active farming” may ease land supply pressures somewhat, at EU level. “I do not believe increasing entitlement values for enterprises with lower returns than dairy will increase the long-term sustainability of these sectors. However, I do accept the entitlement system does require substantial change and such change could possibly benefit young farmers” he added.
Many believe supports are hindering the ability of younger, environmentally conscious, and potentially more efficient farmers to access resources, primarily land.
Speaking on industry driven change, Mahon commented “The potential for milk processors to reward involvement in environmentalism is also something I would not rule out, looking to the future”. The movement of industry ahead of policy could strengthen the resilience of the sector, as producers change practice pre-emptively, rather than in reaction to legislation.
Dr David Stead, head of Agribusiness in UCD, highlighted an often overlooked inclusion of many reform proposal documents, "A particular feature of this set of CAP reform proposals is the greater flexibility given to individual Member States. Thus, many of the decisions on the challenging policy issues will be made in Dublin, not Brussels.”
Some political commentators have voiced reluctance, however, to grant such liberties to member states pursuing policies seen as “un-European” or “illiberal”, with the latter a self-description of one of these divergent central-European leaders, Orbán. The autonomy would allow for region-specific solutions to Union-wide problems to be enacted in a manner that helps to avoid conflict at producer level. Safeguards must accompany this flexibility for the allocation of CAP funding by member states, to avoid the diversion of resources into faux schemes fronting for oligarchs in such regimes.