1. Commission Proposals
The Community’s programme for the reform of agricultural structures is embodied in the following Directives:—
72/159 of 17th April, 1972 and 73/131 of 15th May, 1973: Farm Modernisation Scheme.
72/160 of 17th April, 1972: Farmers’ Retirement Scheme.
72/161 of 17th April, 1972: Training of socio-economic counsellors and vocational training for farmers.
75/268 of 28th April, 1975: Mountain and hill farming and farming in less-favoured areas.
In May last the Commission submitted a proposal for an amending Directive (R/1234/76) to increase the amounts provided for in the above mentioned Directives so as to take account of the average fall in purchasing power of money since the original amounts were fixed. The actual increases proposed are as follows:—
(i) Farm Modernisation Scheme.
An increase of 33⅓ per cent is proposed for
(a) The maximum level of investment which may attract financial aid (whether capital grant or interest subsidy) and which is 40,000 u.a. (=approx £25,500 after recent Green £ change) per man work unit at present.
(b) The upper and lower limits prescribed for investment in a pig enterprise which are at present 40,000 u.a. (=approx £25,500) and 10,000 u.a. (=approx £6,400) respectively.
(c) The amount which Member States must pay over a period of 4 years to farmers who keep farm accounts in the prescribed manner and which is 450 u.a. at present.
(d) The maximum and minimum sums payable to farmer groups.
(e) The maximum levels of recoupment from EAGGF for irrigation etc. works.
The following would be increased by 25 per cent:—
(f) The amounts per hectare and the maximum amounts per farm which Member States pay by way of special premiums to development farmers whose farm plans involve orientation towards beef/sheep production.
(ii) Farmers’ Retirement Scheme and Vocational Training.
The money amounts involved under both the relevant Directives are those which attract EAGGF recoupment. The effect of the Commission’s proposal, therefore, would be that recoupment would be based on new figures increased by one-third.
(iii) Disadvantaged Areas Scheme.
The livestock headage premiums which are payable under Directive 75/268 can be fixed by the Member States within the range 15 u.a. per livestock unit at the minimum and 50 u.a. at the maximum and there is a limit of 50 u.a. per hectare to the total payable on any one farm.
The Directive allows tourist or craft projects undertaken by development farmers on their farms to qualify for financial aid up to an investment level of 10,000 u.a.
Under Article 15 of the Directive, EAGGF recoupment is available for joint fodder production and other joint schemes carried out under the Directive.
All the amounts mentioned would be increased by 15 per cent under the Commission’s proposal.
2. Implications for Ireland
The Department of Agriculture and Fisheries considers that as far as raising the maximum level of investment under the Farm Modernisation Scheme is concerned, the increase would have little if any significance because the existing permitted limit of 40,000 u.a. per man work unit is generous and rarely exceeded. Nevertheless, the Irish Farmers’ Association has called for a considerable increase to take account of inflation since 1972.
The Department considers that the increases proposed in investment limits for pig production would have more significance. An increase in the minimum of 10,000 u.a. would make it more difficult for smaller producers to qualify for aid. An increase in the maximum, however, would allow Member States to extend financial assistance to bigger pig production units. The Irish Farmers’ Association believes that raising the upper limit should help to promote genuine co-operative pig production units.
Other amendments proposed to Directive 159/72 would oblige Member Countries to increase grants for farm account keeping and grants to farm groups. The general effect of the increases proposed in relation to this Directive would be to add to the costs borne by the national exchequer since EAGGF recoupment is limited.
In relation to Directive 73/131 (Beef/Sheep Guidance Premiums) farmers who had plans drawn up after any increase came into effect would, provided their plans showed the required degree of orientation towards beef and sheep production, qualify for the increased payments. The bulk of the added cost would fall on the exchequer.
The changes proposed under the Farmers’ Retirement and Vocational Training Directives would be an advantage to Ireland. For example, the farmer retirement annuities being paid here exceed the amounts laid down for EAGGF recoupment in Directive 72/160. Thus, if the latter amounts are increased, Ireland would get recoupment on the higher amounts as long as our annuities remain higher.
In the case of the Disadvantaged Areas Scheme, the changes proposed would have no real effect on the scheme as it operates in Ireland. The actual rates of livestock headage payments which apply here are well within the maximum and a raising of the maximum would not affect the position. The other changes are not seen as significant by the Department.
3. Consideration by the Council
The Joint Committee has been informed that when this matter was considered by the Council of Ministers, the majority opinion was that the proposal as a whole should more appropriately be examined as an integral part of the general review of the structural Directives, which has to be undertaken at this juncture. Nevertheless, some Member States wished particularly to have the eligible ceiling for pig production and the sums payable for farm accounts increased immediately and independently of the rest of the package. The Council agreed in principle to this at its meeting on 4/5 October. The minimum (10,000 u.a.) investment in pig production required to qualify for aid was left unchanged.
The Joint Committee is advised that it is unlikely that the remainder of the proposed changes will advance further at this juncture but will rather depend on the course of the review of the Directives themselves during coming months.
4. Views of the Irish Farmers’ Association
The Joint Committee has had an opportunity of studying the views of the Irish Farmers’ Association on the operation of the Structures Directives as they apply in Ireland with particular reference to the Farm Modernisation Scheme. The Association was good enough to supply the Joint Committee with a number of memoranda on the subject and subsequently members of the Committee had a full discussion with a delegation from the Association on all aspects of the matter. The Joint Committee is extremely grateful to the Association for its assistance.
The Association drew the attention of the Joint Committee to the fact that of 36,000 farmers classified under the Farm Modernisation Scheme, about 80 per cent have been classified as transitional. When one bears in mind that many farmers have not applied for modernisation grants at all the outcome must be regarded as disappointing. It must surely be the case that Irish agriculture could support at a reasonable standard of living many more on the land than the operation of the Directive would suggest.
Accordingly, the IFA has proposed that the Community scheme should be extended to include a pre-development scheme for transitional farmers designed to promote the development of farms and to assure farmers, now classified as transitional, that they have a future as farmers.
The IFA has also brought to the Joint Committee’s attention a number of suggestions for the improvement of the present Farm Modernisation Scheme. These relate to the EAGGF contribution, the assessment of comparable income, the levels of investment aid and the improvement of the administration of the scheme including the introduction of a minor works scheme and the simplification of farm plans.
The Joint Committee has also heard the views of the IFA on how the Farmers’ Retirement Scheme could be made more attractive. In particular, the Association is pressing for the extension of the benefits of the scheme to farmers who transfer holdings to sons who have presented a development plan or would participate in the pre-development scheme which it has proposed. It would also like elderly unmarried brothers or sisters to be eligible for benefits where two of them are in joint control of a farm.
5. Views of the Joint Committee
Generally speaking the Joint Committee believes that the various schemes initiated by the structures Directives have proved disappointing as far as Ireland is concerned and that substantial improvements in those schemes are called for if the desired aims are to be achieved. At this juncture when a review of the Directives is in the offing, it is desirable that the views of both Houses on them should be on record. Accordingly, the Joint Committee recommends that the Government should make time available in each House for a debate in which all aspects of the Directives, including the proposals made by the IFA, could be fully discussed. These debates should take place at an early date and certainly before any pertinent decisions are taken by the Council of Ministers.
(Signed) CHARLES J. HAUGHEY.
Chairman of the Joint Committee.
9th December, 1976.