"La PAC dans tous ses Etats", conférence le 20 novembre 2014

1. « La PAC dans tous ses États »
Déclinaison de la PAC et impacts dans sept pays européens
Jeudi 20 novembre 2014
Ireland
Rowena Dwyer
Chief Economist
Irish Farmers’ Association

2. Irlande
Overview of Irish agriculture
Number of farms – 139,800 ( o/w 125,000 SFP recipients)
Average farm size – 33ha
Grass‐based production system predominant
Average income from farming in 2013 ‐ €25,437
Ranging from €9,541 (cattle rearing) ‐ €62,994 (dairy)
Average industrial wage ‐ €33,000

3. Irlande
 Livestock farming predominant
 78,000 specialist beef producer
► Suckler cow herd of 1.1 million
 16,000 specialist dairy
►Dairy cow herd of 1.1 million
 13,000 specialist sheep
Farm types
►2.2m lamb disposals in 2013 (down from 2.7m in 2004)
 5,000 specialist tillage
Land utilisation 2010 (Source: CSO)
 Many mixed enterprises– 17,000 mixed grazing/livestock/crops

4. Irlande
Irish agriculture ‐ Other features
Farm fragmentation
►3.8 land parcels per farm
►Relief from Capital Gains Tax for farm consolidation
Land mobility
►Short‐term rental predominant
►Taxation incentives to encourage long‐term leasing
Age‐profile
►51% >55, 6%<35
►Resurgence in interest in farming
Government policy for growth of agriculture and agri‐food sector
►Food Harvest 2020
►Agri‐taxation review 2014

5. Irlande
Irish agriculture – other features
Dairy sector
►Farmer cooperative ownership of processing sector
►>90% of farmers full‐time
Beef and sheep sectors
►Farmer cooperative ownership of mart (livestock trade) sector
►Private ownership of processing sector
►Almost 40% of beef farmers with off‐farm employment
►30% of sheep farmers with off‐farm employment

6. Irlande
Impact of new CAP – Irish
Pillar I
►Approximation model – applied at national level
►Minimum payment of 60% of national average by 2019
►Maximum payment of €700/ha by 2019
►30% greening
►3 % National Reserve
►2% Young Farmer
►0.2% (€3m) coupled payment for protein crops
Not implementing
►Coupled payment for other sectors, redistribution model, small farmers,
payments for natural constraint
implementation

7. Irlande
Impact of new CAP – Irish
Pillar II
►Payments for Areas of Natural Constraints
►Agri‐environment measures
• Green Low Carbon Agri‐Environment Scheme
• Locally‐Led Agri‐Environment Schemes
►Knowledge Transfer ‐ Discussion Groups
►On‐farm capital investment
• Dairy equipment, handling facilities, nutrient storage
• Enhanced grant aid for young farmers
►Targeted support for beef sector
• Beef Data and Genomics Programme
►LEADER
• Economic activity, social inclusion
implementation

8. Irlande
Pillar I ‐ Range of payments across Irish farms
Total payments (pre‐reform)
►€10,000 – average payment per farmer
►2,000 ‐ Number of farmers with payments >€50,000
Average payments per ha ‐ Sectors
►All Farms ‐ €280
►Dairy ‐ €306/ha
►Cattle
►€270/ha (rearing)
►€316/ha (finishing)
►Sheep ‐ €253/ha
►Tillage ‐ €375/ha
(Est. based on UAA and SFP, Teagasc
National Farm Survey 2012)
Distribution of payments per/ha – all farmers

9. Irlande
Potential impact – Overall
Linking income support to land area (entitlements) means that
those with more land get more income support
‘Winners’ and ‘Losers’ in all categories of farming; impact at
individual farm level of concern
Particular concern for farmers with higher payments from low
income sectors (cattle)
Indicated most clearly by dependence on SFP for income (2013)
►90‐104% of income – cattle sector
►26%– dairy sector

10. Irlande
Potential Impact ‐ Overall
Farms with a higher standard output on
average will redistribute payments to
those with lower
On average reform takes income
subsidy from farms with higher SO/ha
and gives additional subsidy to farms
with lower SO/ha ‐ Teagasc March
2014

11. Irlande
Potential impact – Beef sector
Income loss ‐ Will not be replaced by increased market returns
Negative impact on production remains a significant concern –
70% of cattle slaughtered produced by 15% of farmers
Decoupling of payments has to date not resulted in a large shift
from one type of production system to another (e.g. beef to dairy)
Likely move towards more extensive production – (IFA survey
2011, 30% income drop scenario)
Potential move towards supporting other production systems –e.g.
rearing of dairy herd replacements

12. Irlande
Critical mass concerns in event
of fall in production
►Impact on downstream industries, value of
sector
►Impact on employment outside large
urban areas
Measures to increase returns to
sector
►Discussion groups – peer learning
►Beef Data and Genomics Scheme
►Producer organisations – beef sector
prioritisation
Potential impact – Beef sector
Distribution of Livestock Related Enterprises
Source: Prof A. Renwick, UCD, 2013

13. Irlande
Potential impact – other sectors
Dairy sector
►Almost 2/3 of dairy farmers will experience a payment loss from convergence
►Impact on production arising from reform anticipated to be small as majority
experiencing a (static) income change of <10%
►This group produces 90% of total milk output
Sheep sector
►Gains concentrated in farms with lower output
►Over 30% of output is produced by those who will see an income loss of >10%,
compared with 10% of output for those with an income gain of >10%
►No anticipated significant change in output from sheep sector
(Information derived from Teagasc analysis 2013)

14. Irlande
Final comments – The future
CAP Mid‐term review ‐ must take into account:
►Production impacts of reform – at sectoral level
►Wider economic impacts of reform
►Policy direction must be open to change if production loss a serious
outcome of reform
Other policy issues
►Balanced approach to trade deals – addressing the serious potential
threat to beef sector of TTIP, Mercosur
►Marketing of product – attracting a premium for higher‐cost grass‐based
production
►Regulation of food supply chain – Transparency of pricing, Negotiating
power of primary producers

15. Irlande
Thank you for listening
Questions?