State will need to spend €1 billion on CAP top-up

A GOVERNMENT commitment to fully fund Pillar II schemes for the next CAP programme could secure an additional €1 billion for the farm sector.

However, an increase of close to €1bn in co-funding by the Irish Government will be required to draw down the full amount of Pillar II monies from Brussels.

Changes to the financing arrangements for CAP Pillar II schemes for 2021-2027 mean that the Government will have to fund 54pc of total expenditure.

In contrast, the national exchequer funded just 43pc of the total spend under Pillar II in the 2014-2020 CAP programme.

The IFA has calculated that a potential fund of €5.24bn is available for Pillar II measures in the 2021-2027 period, up from €4.1bn in the last CAP round.

However, while the Irish exchequer provided around €1.75bn in Pillar II funding for the 2014-2020 programme, this figure will have to increase to over €2.8bn under the new co-financing arrangements if the maximum available financial supports from Brussels are to be accessed for 2021-2027.

“The debate will now move quickly to the level of national co-financing the Irish Government is prepared to provide, which will be critical in terms of financing future farm schemes and farm incomes,” an internal IFA assessment of last week’s EU budget has stated.

“IFA has set a target that direct payments (both Pillar I and Pillar II), should increase from the current annual level of €1.8bn to €2bn in the next CAP post 2020,” it added.

Meanwhile, there is still some confusion around whether Ireland’s CAP allocation has been maintained or decreased following last week’s agreement in Brussels.

The Minister for Agriculture, Dara

Calleary, claimed last week that Ireland’s €10.73bn share of the overall CAP budget was an increase of €50m on the previous seven-year programme.

‘Spinning’

However, Sinn Féin leader, Mary Lou McDonald, accused the Government of spinning figures in the Dáil last week and claimed that the agreement represented a 9pc cut to overall CAP supports.

Trinity College economist, Alan Matthews, agreed that the proposed CAP budget of €344bn represented a 10pc reduction on the previous programme, but he maintained that this evaluation was based on the budget being viewed on a ‘constant prices’ basis.

“What farmers will receive in payments is determined in current prices,” he explained.

“When the CAP budget is shown in current prices, there is no cut in payments and even a small increase at the EU level.”

ICMSA leader, Pat McCormack, has called for greater clarity on the CAP budget.

“Firstly, we need a country-by-country allocation. Secondly, we need to know by how much Ireland’s overall allocations – under Pillar I and Pillar II – are down. And thirdly, and most importantly now, we will need to know how our Government intends to make up that reduction,” said Mr McCormack.