ICMSA president Pat McCormack
Irish farmers are losing approximately €85m in direct support payments due to higher land rental costs with non-farming landlords, according to a study published in the Journal of Agricultural Economics.
Commenting on the publication of the study, The Impact of the 2013 CAP Reform on the Decoupled Payments’ Capitalisation into Land Values, ICMSA president Pat McCormack said the study highlighted the problems that saw what he said was “very substantial” amounts of direct payments to farmers effectively being diverted to non-farming landowners through inflated land rents.
“CAP and direct payments were specifically designed to support active farmers farming the land and the conclusion that €85m of that support is being lost to non-farming landowners confirms a major flaw in the direct payment system,” he said.
Mr McCormack said that ICMSA would actually estimate that the €85m figure was an underestimate.
“We also think that the CAP post-2020 regime should be unapologetically designed to suit the active farmer and to ensure that that sector can receives as much of his / her direct payment as possible and that it is not simply passed on to non-farmers through higher land rental costs”, said Mr McCormack.
The Tipperary-based farmer stressed that this was not just an Irish problem, with the study identifying losses in the region of €10bn per annum across the EU.
But he reiterated that the technical regulations following the final CAP post-2020 conclusions must address this and ensure that the direct payment budget was put in the hands of active producers and not merely diverted to non-farming landowners as is happening under the current regime.
“With that in mind, the structure of entitlements, the system of trading entitlements and the introduction of a regime to assist farmers who lose rented /leased land and thus possibly direct payment support must be considered,” he said.
Mr McCormack said that there had long been talk about targeting direct payments to active farmers but, to-date, the system had not delivered in this regard.
“We have to be crystal-clear on this. Irish farmers cannot afford to be leaking €85m in direct payments out of agriculture and over to non-farming landowners,” he said.
A clear problem had been identified by this report and it was up to the EU Commission and the Department of Agriculture, Food and Marine to analyse this matter and make the necessary changes to eliminate it, he said.