Why does the CAP System need reform?

CAP (the EU’s Common Agricultural Policy) works by giving Direct Payments to farmers based on the productive land area they own. It takes up almost 40% of the EU budget, which is nearly 60 billion euros per year, or 114 euros of taxpayer’s money per EU citizen per year. Currently most of the money is subsidising industrial farming and fuelling intensification: most of the payments are based on the size of the farm, and partly also on the number of animals farmers have. The more hectares and animals farmers have, the more subsidies they get.

The CAP system is problematic for many reasons including the following:

  • Animal farming is destructive to the environment (as described above).
  • Despite generous CAP subsidies many farmers still cannot make a decent living from animal farming (see below).
  • Because incomes from animal farming (even with CAP subsidies) are very low, many farmers are looking for alternatives. 
  • Direct Payments are linked to land area.  This is problematic because many features of the land which would otherwise be considered thriving natural ecosystems (such as hedgerows, woodlands, bogs, lakes and streams) cannot be factored in when claiming CAP payments. 

For example, the Terms and Conditions of the EU Basic Payment Scheme 2017 states the following:

“In the case of each hectare declared, the eligible area excludes any areas under roads, paths, buildings, farmyards, woods, scrub, rivers, streams, ponds, lakes, sand, areas of bare rock, boglands unfit for grazing, sand/gravel pits, areas used for quarrying, areas fenced off and not being accessed, areas ungrazed due to low stocking rates, areas of ungrazed mature heather, rushes or ferns, inaccessible areas, land that is not being maintained in a state suitable for grazing or cultivation by the farmer, areas used exclusively as sports fields, golf courses, pitch and putt courses, areas used for commercial turf production or any other areas of ungrazable groundcover.  Deductions are not required for headlands or for landscape features such as hedgerows and drains/ditches.” 

If any farmer wants to receive an income they are obliged to convert all available land to monoculture grazing land by draining, clearing and burning and spraying pesticides and herbicides on everything that would make their land ineligible and therefore reduce their payments.  So critical habitat is continually being whittled away.  And the result is that Ireland has one of the lowest levels of biodiversity intactness in the world.

Farmers’ Incomes:

Teagasc lists 3 categories of farmer – Viable, Sustainable and Vulnerable – in terms of the amount of income they generate.  Only 32% of Irish farms are considered economically ‘viable’:

Viable – According to Teagasc, a farm is defined as economically viable if it can remunerate family labour at the average agricultural wage, and provide a 5% return on non-land assets.

Sustainable – These farms are not economically ‘viable’ on the basis of their income from farming, but they are classified as sustainable due to off-farm employment of the farm holder and/or spouse.

Vulnerable – The income from farming is not sufficient to make these farms economically viable, and they have no off-farm employment.

Teagasc’s 2018 National Farm Survey found that 32% of Irish farms were classified as viable, with a further 34% classified as sustainable as they had an additional off-farm income, while the remaining 34% were deemed to be economically vulnerable.  This shows that 68% of farms can’t provide a full household income even with the current massive level of subsidies.

73% of the Large Farms in Ireland are cattle and sheep farms whose family farm income is only 22-38% of the industrial wage (39,000 euro).  In Ireland any adult earning less than €13,022 annually is considered to be living in poverty

29% of all farms had an income of less than €5,000 in 2018.

Even large farms are not economically viable, with 44% of large farms earning under €10,000 in 2018.