McConalogue: A sustainable future for Irish agriculture

Low prices, market volatility and a lack of competition in some sectors are crippling factors on farmers across Europe, believes Fianna Faíl’s agriculture spokesperson Charlie McConalogue TD.

Additional challenges will also present themselves over the coming months, chief among them being the growing commitment of the European Union (EU) to secure a free trade deal with the MERCOSUR trading bloc of South America.

By common consent the prospect of an additional 90,000 tonnes of beef coming into Europe from countries like Brazil will put severe pressure on EU red meat markets during the period ahead. This development is compounded by the fact that beef consumption across the EU is now on the wane.

On Brexit, McConalogue believes that the UK’s planned departure from the EU in 2019 represents an existential threat to Irish farmers’ livelihoods and the 270,000 dependent jobs in the industry. He says: “The underlying weakness and volatility of sterling led to a loss of €570 million in value of Irish food and drink exports in 2016 alone. In a scenario, where there is a 10 per cent reduction in the CAP budget post-2020 and decrease in UK food prices, Teagasc economists have estimated that Irish farm incomes could fall by 26 per cent.

“According to this analysis, the worst impacted farm sector is the low-income beef sector. Cuts of 37 per cent to cattle farm incomes would gravely undermine the viability of suckler beef production in Ireland, and substantially reduce the size of the one million suckler cow herd.

McConalogue adds: “A Brexit will have a direct impact on Irish farmers and the agri-food sector in this regard. A precedent was set in the 2014-16 period, where the EU provided aid to Baltic dairy and vegetable famers after the Russian Trade embargo as a policy response to severe market disturbance.

“Long established agri-trade links have been forged by Ireland with the UK and Northern Ireland. It is an imperative that cross-border agri-food trade remains unhindered on the island of Ireland in any final deal between the EU and the UK.

“It is also important that the continuation of EU geographical indicators, currently covering the entire island remain in place.

“Finally, it is vital that agreement is sought at EU level for the review of state aid rules for enterprises. Securing increases to the current de minimis thresholds is a vital policy action to protect agri-food enterprises and exporters hit by a hard Brexit as a transitional aid measure.”

McConalogue also points out that the development of a world class agri-food business in Ireland must produce a fair return to the primary producer and ensure that Irish and European farmers are price makers not price takers.

In other words, the Common Agricultural Policy, post-2020 must ensure farmer income levels are central to future policy prioritisation. It must also strengthen the position of the primary producer in the food supply chain and make sure farm businesses are sustainable through targeted investments, as well as support measures and tools.

The Fianna Fáil representative also believes that the European model of family farming must be maintained.

“It is an absolute necessity that the CAP post 2020 protects and develops agriculture for farming families as the main driver of the rural economy and custodian of the countryside.

“The next CAP must further integrate and safeguard the European family farm model of agriculture that places economic, environmental and socially sustainable farming at its heart. It is imperative that this blueprint is maintained to meet the global challenges ahead.

“The next CAP must further integrate and safeguard the European family farm model of agriculture that places economic, environmental and socially sustainable farming at its heart. It is imperative that this blueprint is maintained to meet the global challenges ahead.”

“With the world’s population estimated to reach 9.7 billion and the EU population 526 million by 2050, everything must be done to ensure our farm land is not abandoned and rural communities left depleted.”

Safeguarding the social cohesion of rural areas is another priority for Fianna Fáil. Failing to staunch the flow of people from the countryside into the cities will place major capacity pressures on services in urban centres, while causing stagnation in rural areas. This is in the context of current projections that by mid-century, two thirds of the global population will be living in urban locations.

“Again, the CAP has a key role to play to meeting these demographic challenges in ensuring the primary producer continues to farm the land and maintain their rural enterprises,” says McConalogue.

While the CAP makes up a significant portion of the annual EU budget (roughly €59 billion), it secures the livelihoods of 22 million farmers and agricultural workers across the continent. In addition, these support measures help to provide around 44 million high quality jobs in the food industry. This reality is at the core of Fianna Fáil thinking, where farming and food are concerned.

“The current CAP budget must be increased beyond 2020,” he explains. “Brussels must also reverse the cuts made in the 2014-2020 CAP package. While, a UK exit from the EU will leave a €3 billion hole in the CAP budget, the remaining EU 27 need to show solidarity with their primary producers and secure the livelihoods of 22 million farmers across the continent by making additional contributions.”

McConalogue says that direct payments under CAP sustain rural communities and the family model of farming throughout Europe. “Direct payments comprise 70 per cent of the overall CAP budget but crucially represent more than 25 per cent of the gross value added in agriculture at EU level.

“In Ireland, direct payments make up nearly two-thirds of total farm income while, significantly, they represent 55 per cent of the gross value added in agriculture. Irish suckler beef and sheep farmers continue to depend exclusively on direct payments for their livelihoods with average incomes just below €13,000.

“Funding for the Basic Payment Scheme, including greening, should be strengthened to reward farmers actively involved in agriculture. In this way, member states and European decision makers need to ensure that cuts to the last CAP budget are reversed to achieve this objective.”

According to McConalogue, future CAP reforms should permit individual member states to decide on the capping of direct payments at national level. In Ireland, this would mean that the current payment ceiling would be reduced from €150,000, under the Basic Payment Scheme, to €60,000. This development would also ensure that future CAP funds safeguard farmers on small acreages with entitlements following the 10 per cent cut in direct payments negotiated under the 2014-2020 CAP deal. Based on 2016 data, over 99 per cent of all Irish farmers received a basic payment of under €60,000.

He adds: “Such an approach would save in the region of just under €85 million, which could be used to supplement existing payments.”

Turning to the environmental pressures now confronting Irish agriculture, McConalogue explains that he Areas of Natural Constraints (ANC) scheme ensures the continued use of agricultural lands, the preservation of the countryside, the protection of the environment and the promotion of sustainable farming systems. “Additional financial resources are necessary to ensure that farmers on the most disadvantaged lands are maintained and lands do not fall into disuse and disrepair.”

With the increase in the number and complexity of CAP schemes, more and more penalties are being applied to farmers. According to McConalogue, the present penalty regime is disproportionate and it needs to be re-balanced in favour of the farmer, except in cases of intentional fraud.

“As a rule, all inspections, except where fraud is suspected, should be pre-announced. Where genuine errors occur or where there are simple non-compliance issues that can be easily addressed, farmers should be given a warning and an opportunity without penalty to address the deficiencies.

“The ‘yellow card’ approach is a welcome simplification proposal that farming organisations previously suggested and the Commission subsequently implemented. No penalties should be placed on farmers retrospectively unless intentional fraud is suspected.

“Funding for the Basic Payment Scheme, including greening, should be strengthened to reward farmers actively involved in agriculture. In this way, member states and European decision makers need to ensure that cuts to the last CAP budget are reversed to achieve this objective.”

“Having only one on-the-spot inspection for checks encompassing both the basic payment and greening should be examined in verifying all eligibility criteria.”

He concludes: “In Ireland, figures show that an average farm income is €24,060, lagging substantially behind the average industrial wage. Meanwhile, almost 40 per cent of Irish farms have an income of less than €10,000 per annum.

“As a result of the CAP European farmers are at the epicentre of our food chain, ensuring we produce the highest quality food worldwide at premier standards for an internal market of 500 million people as well as global export markets.

“However, this must be complemented by ensuring that the key employment enabler in rural communities, the primary producer, can generate sufficient income levels. This needs to be a constant consideration in ensuring more efficient and sustainable production.

“If the primary producer is to adhere to these principles, they most also see that their profitability and income levels maintain an upward trajectory. The development of world class agri-food must produce a fair return to the primary producer and ensure that Irish farmers are price makers not price takers.

“It is also an absolute necessity that the CAP post-2020 protects and develops agriculture for farming families as the main driver of the rural economy and custodian of the countryside.”