Ireland’s agricultural spending will more than double the EU average

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Ireland will have the EU’s highest public spending per capita on food, agriculture and rural development if the CAP strategic plan it submitted to Brussels is accepted.

The plan is over €2,000 per capita, compared to a European average of €688 per capita. The Netherlands offers the lowest funding intensity, followed by Malta.

The more than €2,000 per capita in Ireland is followed by €1,500 per capita in Lithuania and Hungary, according to analysis of strategic plans by the Thünen Institute for Rural Studies in Germany. The analysis reveals the priorities of the different Member States.

For example, the proposed funding for the environment (resource protection) in Ireland and the Netherlands is the highest in the EU, at around 33% in both countries. It is exceeded in both countries only by the funding of farm income measures, which is around 40% in the Netherlands and around 55% in Ireland.

Only the plans offered by Denmark, France and Poland exceed Ireland’s funding share for revenue. Malta at 31% and Hungary at 41% offer the lowest shares of funds to support farm income.

Measured by the share of public funds, most of the proposed CAP interventions are dedicated to the agricultural sector. About 93% of the funds would go directly or indirectly to the farms.

According to analysis by the Thünen Institute, Ireland, Luxembourg and Belgium provide CAP support almost exclusively to the agricultural sector (as opposed to forestry, rural business development, infrastructure, etc.).

LEADER scheme

While the LEADER scheme has played a central role in rural development policy at European level since the 1990s, its low priority in Ireland is revealed by the Thünen Institute, which suggests that Ireland, Slovakia, the Netherlands, Lithuania, Portugal and Luxembourg would not use any funding for this funding strategy if it were not for the obligation to propose LEADER, and to finance it with at least 5% of the EAFRD funds of the second pillar of the CAP.

On the other hand, Member States such as Germany, Spain and Estonia rely heavily on LEADER.

Overall, in the plans submitted for the 2023-27 CAP, LEADER obtains a slight increase in the importance of its share of the second pillar funds, compared to the funding period 2014-2020. LEADER funding ranges from just over 2% of planned second pillar public expenditure in Hungary to nearly 14% in Germany. It is around 4.5% in Ireland.

Small shares of spending are proposed in Ireland for cooperation, training and farmer advisory services (the Netherlands has the highest total share under these headings, at around 6%).

Ireland also has relatively low allocations for rural development (largest in Malta, Bulgaria, Finland, Denmark, Estonia); generational change (which ranges from 1% in Portugal to 6% in Greece); organic farming (most important in Austria, Lithuania and Luxembourg); and animal welfare (most important in Italy, Sweden and Slovakia).

Denmark, France, Malta and the Netherlands will not address animal welfare through EU interventions.

One of the main changes proposed in the CAP next year is that at least 4% of agricultural land must be devoted to non-productive areas or features, as a condition for receiving farm income support payments from the EU. Derogations are possible, for example, if the arable area is less than 10 hectares, or if the agricultural area is made up of more than 75% of permanent pasture, or if more than 75% of the arable land is intended for fodder, fallow or legumes. However, Ireland is unique in not allowing any exemption from the proposed 4%.

Competitiveness

Hungary plans to use 27% of public funds to strengthen the competitiveness and position of agriculture in the value chain. This is the highest value of all strategic plans. Denmark, Ireland, Germany and Finland use the least funds in this target area in relative terms, between 1% and 5%.

The percentage of funding aimed at strengthening the competitiveness and position of agriculture in the value chain is the lowest in Ireland of the 28 CAP plans. In relative terms, ‘rural development’ accounts for the largest share in Malta, at 29% of public funds, followed by Bulgaria at 13% and Finland at 8%.

This target area is least important in Denmark, at only 1%, and in Belgium, Greece, Ireland, Luxembourg and the Netherlands, at 2% each.

CRISIS

The Complementary Redistributive Income Support for Sustainability (CRISS), intended to redistribute CAP income support from large farms to small farms, is mandatory in the new CAP, at 10% or more of the ceiling for direct payments. It is on average 10.4%, in the plans of the Member States. At the 10% proposed by Ireland, this will represent 118 million euros per year. However, Estonia, Lithuania and Slovenia plan to use significantly less than 10%, taking advantage of the permission to use alternative instruments “provided they demonstrate in their CAP strategic plans that they meet sufficient to the need for income assistance redistribution.

France and Italy have chosen to significantly increase funding for risk management, such as crop insurance.

From 2023, all Member States must devote at least 25% of direct payment funds to eco-schemes, at least 35% of second pillar funds to specific environmental and climate-related objectives, at least 3% funds from direct payments to generational renewal. , and at least 5% of second pillar funds for LEADER.

The strategic plans reviewed by the Thünen Institute are still subject to modifications until final approval by the European Commission. The Thünen Institute concluded that the CAP is getting greener, while rural development remains a niche topic, but there are clear differences between Member States.

Despite common objectives and funding rules, the CAP therefore remains largely shaped by the Member States.

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