How much greener farming will the new CAP “Green Architecture” deliver?
At the end of December 2021, after a controversial, though extensive, consultation process, the Department of Agriculture sent its draft CAP Strategic Plan to the EU Commission for approval. The plan, once approved with whatever amendments the EU deems necessary, will, together with the Climate Action Plan, the Nitrates Action Plan, and other agri-food strategy and environmental policy, regulate the lives of all farmers in Ireland for the 2023-2027 period.
This time next year, farmers will experience major changes to the amounts and conditions of their CAP payments. There are three main new aspects to the 2023-27 CAP: a national plan, implemented by the national authorities (though it is subject to EU vetting); the redistribution of payments through various rules such as convergence, capping, and deductions from payments to fund a front-loaded CRISS (10%) and voluntary eco-schemes (25%). The third novelty is what this month’s newsletter focuses on: that is the new Green Architecture, as the EU Commission describes it. The graph below explains this relatively simply.
The concept is not new, as the current 2014-2020 CAP also has its own Green Architecture, with mandatory and voluntary elements. Cross compliance is required to qualify for the basic payment funded from Pillar I, with an additional requirement of crop diversification for tillage farmers to secure 30% of it, known as Greening. Livestock farmers can relatively easily qualify for the 30% Greening by maintaining their permanent grassland. All voluntary agri-environmental measures are funded through Pillar II schemes.
In the new CAP, it is intended that each level or block in the architecture builds upon the one below it and increases its ambition, despite a lower overall budget. Simply put, farmers are being asked to undertake more environmental action for less payment. At least part of what was until now considered necessary income support is to become conditional on the undertaking of certain actions, and in some cases on the achievement of certain results.
Cross-Compliance becomes Enhanced Conditionality
While Good Agricultural and Economic Conditions (GAECs) must be met by farmers to qualify for the Basic Payment, Statutory Management Requirements (SMRs) are legal requirements applicable to all farmers. Together, those make up Cross-Compliance. Seven GAECs deal with issues relating to water, soil and carbon stock, and landscape. 13 SMRs relate to pollution of water by nitrates, conservation of biodiversity, feed and food hygiene, animal health, welfare and identification, and phytosanitary products.
In the new CAP, Cross-Compliance becomes Enhanced Conditionality, and the basic obligations on farmers to receive their basic payment (now BISS) increased substantially. GAECs will become more stringent, and increase from seven to nine, while SMRs are rationalised into 11, covering the same ground.
In addition to the existing requirements, new GAECs will include elements previously in Greening. Those include maintenance of permanent grassland, crop rotation, retention of at least 4% of agricultural land for non-productive features and prohibition to plough permanent grassland in Natura 2000 zones. Another will require wetland and peatland to be adequately protected. Buffer strips and zones with specific minimum widths or distances to certain water features, will also come into force. More stringent measures affecting land management to avoid soil erosion in slopes will also be included.
Greening becomes Eco-Scheme – kind of – and voluntary
Currently, farmers receive 30% of their Pillar I-funded basic payment under the heading of Greening.
This will change from 2023. Farmers have already heard how 25% of the fund currently destined to their basic payment will be deducted to finance payments for farmers who opt to implement Eco-Scheme measures. The payment will be flat per hectare, and to obtain 100% payment, farmers will have to implement at least two of the menu of options. Farmers who participate in two measures may find the payment does not offset fully the 25% deduction made to fund the scheme. DAFM modelling suggested that if 85% of eligible farmers apply, the payment per hectare would amount to €74, while 100% participation would reduce the payment to around €63 per hectare.
After consultation, DAFM amended some of the options and increased the number to appeal to more farmers. The menu of measures is as follows:
- At least 7% of a farmers’ holding must be devoted to “Space for Nature” (biodiversity, habitat or landscape features). And 1a – if the farmer commits 10% of his/her land for this purpose, this will be considered as two actions, qualifying for a full payment.
- Extensive livestock production, promoting traditional grassland farming at low stocking rates (between 0.15 LU/ha and 1.5 LU/ha)
- Limited chemical N use compared to previous year. A farmer with a grassland stocking rate in 2022 of 210 kgs organic N/ha may be allowed spread a maximum of 214kgs/ha chemical N, with equivalent allowances for stocking rates below that.
- Planting of native trees, either three trees per hectare, or a one metre length of hedgerow per hectare. Also 4a – if the farmer doubles that commitment, he/she will be eligible for a full payment with that measure alone.
- Use a GPS controlled fertiliser spreader for fertiliser, GPS controlled sprayer for liquid fertiliser and/or plant protection product.
- Soil sampling and liming – once every three years.
- Enhanced crop diversification, with greater land areas committed to a break crop (beans, peas, oilseed rape or oats) depending on number of crops required in the rotation.
- Sowing a multi species sward on at least 6% of eligible hectares.
AECM measures in Pillar II – significant changes
AECM (Agri-Environmental Climate Measures) have been a feature of CAP for some time. As the top block in the “Green Architecture”, it builds further upon the baseline (GAEC and SMR) elements, by going beyond mandatory requirements.
In the 2023-27 CAP, AECMs will be split between general options, applicable on individual farms, and co-operation projects involving farmers in defined high priority geographical areas (which the DAFM have yet to define).
Some of the payments will be for the undertaking of an action – those will be fixed payments. Where payments are linked to results, they will be variable. This is a feature of EIPs, and of some of the new “pilot” schemes like the REAP scheme but will be new to many farmers.
Participation in the general scheme will be by tranches, with a priority system. Top priority will be given to farmers with land in private Natura, commonage, geese and swan area or EPA designated PAA and organic farmers. Second level or priority will be given to larger/more intensive farms undertaking priority environmental actions (min till, catch crops, winter bird food) or if they adopt a tree planting action. The third tier concerns other general environmental actions chosen by farmers in addition t0 the first two tiers’ actions, or on their own.
Actions under the co-operation option will include standard as well as bespoke measures at farm. landscape and river catchment levels. These are set to build upon the experience of the European Innovation Partnerships Agri Schemes (EIP-AGRI) like the BRIDE, Hen Harrier or Pearl Mussel projects, and the Burren Project. It is expected to involve more farmers than these projects, though only in certain geographical zones. Local Co-operation Project Teams will be established and funded through the scheme to support farmers participating in the co-operation option AECMs. These will be made up of multi-disciplinary experts and the involvement of state agencies like the EPA, LAWPRO and ASSAP, but also environmental NGOs.
Both general and co-operation option participants will benefit from funded training, as will advisors. A large menu of environmental actions going over and above basic legal requirements will be available for farmers to select. Payments to farmers will include an element relative to the action, and an element relative to the investment required (e.g. for the purchase of barn owl boxes or trees).
The draft CAP plan submitted to the EU Commission suggests an average payment of €5000 for the general scheme, and €7000 for the co-operation option. These are based on assumptions of 30000 farmers participating in the first, and 20000 in the second. The estimated payments, if they pan out, may compare favourably to recent schemes. However, this will be determined by the number of participating farmers, and the assumptions appear modest if AECM is to contribute in a major way to an environmental dividend.
CAP cannot do all the environmental heavy lifting
We know from Teagasc’s annual National Farm Survey (see graph) that a high percentage of Irish farmers achieve income levels, including CAP payments, that are economically vulnerable or just about sustainable. Only dairying and tillage in 2020 had a majority of economically viable farmers.
We also know from the same source that most farmers’ incomes are heavily dependent on CAP payments, especially those in the economically vulnerable sectors. In 2020, 70% of farmers’ incomes on average (2020) came from CAP payments, with variations from 28% for dairy farmers to 157% for suckler farmers.
A case study presented by IFA to public representatives in December shows a drystock farmer with 40 hectares, 30 suckler cows and 150 ewes, with a Basic Payment entitlement in 2014 of €400/ha or €16,000. By 2021, the farmer has already seen a per hectare payment reduction to €330/ha. The new CAP stands to reduce this further, to €281/ha by 2026. Factoring in all the redistribution (convergence and other deductions and top ups) over the period to 2026, this economically vulnerable farmer will have lost €4,750 or 30% in basic payment. Nearly €2,000 of this will be lost as a result of redistributions in the new CAP between 2022 and 2026.
In this context, it is fair to ask whether the new CAP, with a reduced budget and greater levels of payment redistribution, is being asked to do more heavy lifting than is realistic when it comes to supporting farmers in undertaking costly environmental action.
With the urgency of climate action, there is more our sector needs to do to allow farmers to optimise the sustainability of the sector and capitalise on its value to the market.
The Board Bia Origin Green programme, and the grass-fed standard and PGI are important initiatives which must be leveraged to increase the sustainability and value of Irish food and ensure a fair share is being returned to primary producers.
Pressure should also be applied through the appointment and work of promised Groceries Regulator to ensure fairness in retail practices and promotions and secure the fair remuneration of primary producers.
Last but not least, there has been a lot of talk about carbon farming and renewable energy micro-generation at global, European and national levels. As yet, there are no schemes available allowing farmers to monetise the carbon they sequester or to be able to resell their surplus energy to the national grid. Carbon farming is especially complex and challenging, but if the EU and Irish agricultural policy relies on it to help farmers generate additional income streams, it must be addressed urgently. Carbon farming and on-farm energy generation have real potential to help with national climate targets, while further reducing our national reliance on fossil fuel based energy.
Running to Support Rural Mental Health!
The New Year has begun, and we all hope that it will be kinder to us all than its two predecessors.
This January again, I have joined Team Ireland for the Run 1000 initiative in support of rural mental health.
Five national teams of runners (Ireland, New Zealand, Scotland, Wales and England) accumulate the kilometres during January to raise fund for rural mental health charities.
It is a worthy cause, and one which begins at home: running is very good for mental as well as physical health, and it is not too late for anyone interested to join up!
The charity chosen this year by Team Ireland is Embrace Farms which supports families bereaved or otherwise affected by farm accidents.
You can follow my efforts, and support Embrace Farm by donating at my fundraising page: https://rsabi.enthuse.com/pf/catherine-lascurettes
Thank you in advance, and may the New Year be brighter and kinder to you!
© Catherine Lascurettes, Cúl Dara Consultancy
