Co-ops react to EU provisional CAP reform agreement

The deal will see 25% of the direct payments budget set aside to fund new eco-schemes

Agricultural co-operatives have responded to the deal struck by EU member states and the European Parliament regarding the reform of the Common Agricultural Policy.

Under the agreement, €270bn of the EU’s budget will be spent on farms until 2027. The deal will also see 25% of the direct payments budget set aside to fund new eco-schemes.

Copa and Cogeca, the voice of European farmers and co-operatives, said: “There are still many concerns for the sector, particularly regarding the overall coherence of the agreement reached with other EU policies. This  morning, farmers from all over Europe reiterated the need for urgent  work to be done by the Commission, during a symbolic mobilisation,  notably to make sure that the compromise found will be coherent at a  national level but above all with regards to all other proposals of the European Green Deal which will weigh itself in a complex and contradictory way for farmers.

“We must not forget that alongside the CAP, we will have tomorrow the Farm-to-Fork strategy, the biodiversity strategy, the targets on climate neutrality and the taxonomy, which will have to be reflected in our future and existing trade agreements.”

Likewise, the Irish Co-operative Organisation (ICOS) said it welcomed the announcement that an agreement had been reached but was “disappointed to see that the agreement includes a minimum 85% internal convergence and a 10% redistributive payment requirement”.

Under the internal convergence mechanism payments are redistributed so that all farmers, regardless of size or historical entitlements, receive similar payment entitlements per hectare.

ICOS president Jerry Long argued that the significant reallocation of CAP funding put productive farms most of which have made extensive investments based on the current payment entitlements and which are already struggling with increasing costs of regulatory compliance, at a disadvantage.

He said: “It is commercial dairy, tillage and drystock farmers who are losing out from this agreement, which fails to take into account the cost intensive nature of their operations (incurred by specific demands concerning traceability, hygiene etc.). These are the farmers who are driving our export industry, and who are reinvesting in jobs and infrastructure in our rural communities. The CAP payments made to those farmers have a multiplier effect in their community and this decision on reallocation will have knock-on economic implications on our rural economies.

“We are waiting for clarity now as to whether in an Irish context the implementation of 85% internal convergence covers the 10% redistributive payment requirement or whether further measures will be required and therefore just what the full implications of this will be.

“Furthermore, while the 25% ring-fencing of eco-schemes which looks to be included within the agreement is unsurprising, the level of flexibility for unspent funds is. Despite the extent of the unknowns in the content or operation of these schemes a very minimum degree of flexibility will be possible to manage unspent funds, with a floor of 20% set for the first two years and just 2% flexibility possible from thereon, which will not ease fears that funding will be lost from the CAP as a result.

“It is therefore of absolute importance that these schemes are accessible and practical to all farmers, to avoid this situation of lost funds. What we do welcome within the agreement is the flexibility introduced within the text regarding GAEC 9, an environmental requirement regarding a minimum share of agricultural land to be devoted to non-productive features, and the recognition it provides for permanent grassland, which we expect and hope to be applicable in an Irish context.”