CAP en­sures qual­ity food

Irish Examiner - Supplement - - 60 YEARS OF EUROPEAN UNITY - Joe Healy Pres­i­dent, Ir­ish Farm­ers As­so­ci­a­tion

Farm­ing and the agri-food sec­tor is Ire­land’s largest in­dige­nous pro­duc­tive sec­tor, ex­port­ing food and drink worth over €11bn in 2016 and pro­vid­ing employment to over 300,000 peo­ple di­rectly and in­di­rectly.

It has been a key driver in Ire­land’s eco­nomic re­cov­ery and is the back­bone of eco­nomic ac­tiv­ity across the ru­ral econ­omy.

The agri­cul­tural sec­tor is more in­te­grated into the EU than any other eco­nomic sec­tor. It is the only ma­jor sec­tor with a com­mon pol­icy, cen­trally funded from the EU bud­get, with a level of na­tional co-fi­nanc­ing from mem­ber states un­der the Ru­ral De­vel­op­ment Pro­gramme. At less than 0.35% of EU GDP, ex­pen­di­ture on the Com­mon Agri­cul­tural Pol­icy (CAP) rep­re­sents good value for money.

Since its in­cep­tion, the CAP has been of vi­tal im­por­tance for pro­duc­ers and pro­vides Euro­pean con­sumers with a plen­ti­ful sup­ply of high qual­ity, sus­tain­ably pro­duced food at af­ford­able prices.

For Ire­land, it has been the sin­gle great­est source of EU fund­ing since we joined in 1973. In the in­ter­ven­ing 45 years, the pol­icy has evolved with the aim of achiev­ing a bal­ance be­tween in­creas­ing mar­ket ori­en­ta­tion and adapting to the emerg­ing de­mands of so­ci­ety (en­vi­ron­ment, an­i­mal health and wel­fare).

The “Euro­pean model of agri­cul­ture” is a so­cial con­tract be­tween farm­ers and the rest of so­ci­ety; whereby farm­ers pro­duce high-qual­ity safe food, re­new­able en­ergy, and cer­tain non-mar­ket ser­vices, en­sur­ing high en­vi­ron­men­tal pro­tec­tion, land­scape man­age­ment and an­i­mal health and wel­fare stan­dards. In re­turn, the CAP has pro­vided sup­port for the con­tin­u­a­tion of the unique fam­ily-farm scale of pro­duc­tion in the EU.

Over the years, the CAP has un­der­gone sig­nif­i­cant re­forms, re­spond­ing to the de­mands of Euro­pean so­ci­ety and con­sumers. There is now recog­ni­tion for the mul­ti­ple roles of farm­ers, as food, fuel and en­ergy pro­duc­ers, in ad­di­tion to meet­ing en­vi­ron­men­tal re­quire­ments and other pub­lic goods.

The cur­rent two-pil­lar struc­ture of the CAP ad­dresses com­ple­men­tary, but dif­fer­ing needs. Pil­lar I pro­vides in­come sup­port to farm­ers through direct pay­ments. Pil­lar II pro­vides tar­geted ru­ral de­vel­op­ment mea­sures, which meet a broad range of chal­lenges in ru­ral ar­eas.

The CAP has changed fun­da­men­tally since the early 1990s, The bud­getary pres­sure, as well as

chang­ing re­quire­ments from farm­ers and from so­ci­ety stim­u­lated calls for a re­form from within the EU. The im­pact on world mar­ket prices and on agri­cul­tural pro­duc­tion in de­vel­op­ing coun­tries pro­voked crit­i­cism from the rest of the world.

The ac­ces­sions tak­ing place in the 1990s, and the huge en­large­ment in 2004 when 10 states joined the EU all at once, put fur­ther pres­sure on the ef­fi­ciency of the sys­tem. The CAP bud­get now had to be di­vided be­tween al­most twice as many farm­ers, as the num­ber of full-time farm­ers in­creased from 6m to 11.5m be­tween 2004 and 2007.

The core el­e­ment of the re­form process of the CAP has been the shift from prod­uct sup­port to pro­ducer sup­port. Rather than en­sur­ing a fixed price for agri­cul­tural prod­ucts (and hence sup­port­ing farm­ers’ in­come in­di­rectly), the CAP to­day fo­cuses on sup­port­ing farm­ers’ in­come di­rectly.

In 2003, a ma­jor over­haul of the CAP was un­der­taken. The aim was to de­cou­ple the ma­jor­ity of all direct pay­ments from pro­duc­tion. That is, farm­ers were no longer to re­ceive pay­ments re­lated to a spe­cific type of pro­duc­tion.

Mean­while, the de­cou­pled

direct pay­ment en­sures a ba­sic in­come sup­port for pro­duc­ers. The rest of the pro­duc­ers’ in­come is de­ter­mined by the mar­ket. In or­der to max­imise prof­its pro­duc­ers must re­spond to mar­ket sig­nals, pro­duc­ing prod­ucts that are de­manded by con­sumers. Farm­ers are not re­quired to pro­duce on the land they re­ceive sup­port for. The pay­ments are linked to ad­her­ence to en­vi­ron­men­tal stan­dards, and stan­dards re­lated to an­i­mal and plant health. This sys­tem is re­ferred to as cross com­pli­ance.

Mea­sures re­lat­ing to struc­tural ad­just­ment of farm­ing and the pro­vi­sion of pub­lic goods (eg, en­vi­ron­men­tal ben­e­fits, bio­di­ver­sity) by farm­ing prac­tices have been sup­ported un­der the CAP for a long time. These mea­sures are now an im­por­tant el­e­ment of CAP, re­ferred to as ru­ral de­vel­op­ment pol­icy.

Ru­ral de­vel­op­ment pol­icy

The cur­rent ru­ral de­vel­op­ment pol­icy with its di­verse range of flex­i­ble in­stru­ments is crit­i­cally im­por­tant in sup­port­ing tar­geted pro­grammes that re­flect the dif­fer­ent needs and cir­cum­stances in mem­ber states.

Mea­sures un­der the ru­ral de­vel­op­ment pro­gramme seek to do the fol­low­ing:

■ Im­prove com­pet­i­tive­ness at farm level, sup­port in­no­va­tion and di­ver­si­fi­ca­tion, and ex­tend knowl­edge trans­fer;

■ En­cour­age re­struc­tur­ing of the agri­cul­ture sec­tor;

■ Funds farm­ing in Ar­eas of Nat­u­ral Con­straint;

■ Pro­tect the ru­ral en­vi­ron­ment and land­scape;

■ As­sist farm­ers in meet­ing new chal­lenges, in­clud­ing cli­mate change mit­i­ga­tion, re­new­able en­ergy, wa­ter man­age­ment and bio­di­ver­sity; and

■ En­cour­age en­ter­prise de­vel­op­ment and employment in the ru­ral econ­omy.

The Fu­ture

Low farm in­come in many sec­tors is pro­vid­ing a chal­lenge to the sus­tain­abil­ity of farm­ing and to at­tract­ing new en­trants. The am­bi­tion for CAP post 2020 has to be an over­all im­prove­ment in farm in­come lev­els, through direct sup­port, tar­geted mea­sures for in­vest­ment and ef­fi­ciency, a stronger po­si­tion for farm­ers in the food sup­ply chain.

A strong CAP bud­get post-2020 is crit­i­cal for farm in­comes, farm out­put and wider eco­nomic ac­tiv­ity. The Com­mis­sion has iden­ti­fied that since the last CAP re­form, agri­cul­tural prices have fallen sub­stan­tially and mar­ket un­cer­tainty has in­creased, due in part to macroe­co­nomic fac­tors and geopo­lit­i­cal de­ci­sions, such as Brexit.

Over­all, the new CAP must en­sure a strong, eco­nom­i­cally vi­able and com­pet­i­tive agri­cul­ture for the ben­e­fit of farm­ers and con­sumers alike.

IFA pres­i­dent, Joe Healy, meet­ing EU chief ne­go­tia­tor, Michel Barnier, to dis­cuss the is­sues for Ir­ish farm­ers aris­ing from Bri­tain’s de­ci­sion to leave the Euro­pean Union.

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