Hogan determined to tackle his biggest test – filling farming’s €12bn ‘Brexit hole’

PHIL Hogan has two years of his Brussels term left to run, and a rather daunting challenge ahead. He only has to secure the EU’s €40bn farm support budget, which is about to lose about €12bn per year as the UK exits after March 2019.

If funding is not secured he will not be able to reshape the EU’s oldest policy, dating back to 1962, which some would argue that, for all its flaws, is still the mortar holding the bloc together. Nor will he be able to ensure that EU farming plays its part in protecting the environment, tackling global warming, while continuing to deliver a secure supply of quality food to 500 million people.

But funding cannot be secured unless EU farming and agribusiness meets it environmental obligations. Hogan argues the EU is strongly committed to action on the COP21 Paris Agreement and the United Nations’ Sustainable Development Goals. Agriculture must also make a fair contribution to the EU 2030 climate and energy targets.

Others may quibble, but he argues that since 1990, there has been a 24pc cut in agricultural non-CO2 greenhouse gas emissions. He adds that more recent data shows that greenhouse gas emissions from agriculture continue to fall by 1.13pc per year.

It might seem contraindicative, but Hogan further argues that easing the EU-driven regulatory burden on farmers can be done at the same time as upping the environmental improvements. “We will no longer have Brussels determining the width or length of hedges, or the number of trees that should be in a field. Instead, we will allow member states to define practices most appropriate to their regional context,” he says.

But it’s not about backsliding – farmers who pollute and do not follow recommended environmental practices will lose grants.

He warms to his theme when he moves to the subject of getting younger people into farming.

“I am acutely aware of the obstacles young farmers face trying to establish themselves in the industry. Only 6pc of farmers across the EU are younger than 35, while 55pc are 55 years or older. This is an unsustainable age profile,” he says.

A major reform of EU farm policy back in 2013 included the “Young Farmer payment” as a top-up to the direct payments for young farmers. In 2016, 280,000 farmers qualified for that payment, costing almost

€3bn. In all 177,000 young farmers are in line for rural development grant support.

But the effectiveness is at best mixed. So he wants the member state authorities to take a bigger hand here. National governments have control of taxation, inheritance law and land regulations to help inform eligibility. Brussels could provide an EU-wide funding system for young farmer installation grants.

All of 27 years ago, a man called Ray MacSharry set out on the first major reform of EU farm policy.

He railed at the unfair pyramid structure of farm payments where a minority get the bulk of the money.

Several reform plans later and the problem remains.

Hogan says it is described as the

“80:20 ratio”, by which 20pc of farmers get 80pc of payments.

“But this ratio reflects reality that direct payments are area-based and linked to the land, and paid to those who own the land,” he says.

Unless the economic history of Europe is upended in relation to land ownership, this will go on.

But there is some balance, Hogan argues, in the EU farm supports system.

About 72pc of direct aid is paid to farms of between five and 250 hectares. Many of these are family-type farms and about half the total aid recipients have farms of less than five hectares.

But the quest for fairness goes on, despite the continued scepticism.

Moves include capping direct payments around €100,000 per holding; so-called degressive payments reducing the support for larger farms; and better targeting of smaller holdings.

To drive all of this he will need agreement from 26 governments and the European Parliament, while also fighting for extra cash.

It will be a very busy two years.