In the final part of Grace Treston’s investigation, we look into the dire situation of the National Reserve. The Department of Agriculture has stated time and time again that there’s not enough funding in the reserve to cater to all farmers who deserve it.
There is a current system in place that may be to blame.
The reserve should provide funding to farmers who qualify as Young Farmers, New Entrants, and more. In case you're not clear on what the Reserve is exactly, the IFA has clearly described it as a fund that provides a top-up of entitlements or entitlement value for Young Farmers and New Entrant farmers.
"Farmers who met the criteria of Young and New farmers, and who had a gross off-farm income of less than €40,000 in either tax years 2013 or 2014 were eligible for an additional allocation of entitlements on eligible land for which they held no entitlements and/or a top-up to the value of existing entitlements held by them, where those entitlements were below the national average."
"The 2015 National Reserve fund was based on a 3% cut to the Basic Payment Scheme financial ceiling and provided top-ups to 6,000 applicants. A final decision on 2016 National Reserve has not yet been made," says the IFA's official website.
As we’ve explored already in Part 1 of our series, Minister Creed can apply for the National Reserve’s use in helping farmers at a ‘specific disadvantage’ (Old Young Farmers, Forgotten Farmers). There is still mystery surrounding when or how our government has applied for that kind of specific disadvantage funding.
As we’ve explored in yesterday’s investigation, what the government says is EU regulation is not always as it seems. The Green Cert, as we discovered, isn’t traceable back to EU legislation. Read more about the disturbing discovery here.
So, for our National Reserve, Minister Creed has cited a lack of funds as the reason for so much financial heartache among young farmers.
The National Reserve’s lack of funds has been criticised immensely. However, the Department of Agriculture, in several Oireachtas debates and statements, has cited the Reserve’s emptiness as an unfortunate fact of life. Too much money went to too many people too quickly, it seems.
The emptiness of our National Reserve is the excuse given by the government when the Old Young Farmers, Forgotten Farmers, and other groups cry out for help they deserve. In the letter sent by the Minister for Agriculture’s office to Mr. Neilus O’Connor, we see that ‘there was no National Reserve in 2016 as all available funding had been utilised under the 2015 scheme’.
The Minister’s letter adds that: “In order to provide for a National Reserve in 2017 funding is required to replenish the Reserve. EU Regulations governing the scheme provide that funding for the replenishment of the National Reserve may be obtained by means of surrender of entitlements that remain unused by farmers for two consecutive years and by claw-back derived following the sale of entitlements without land. It is envisaged that funding derived from these two sources in 2017 will be very limited.”
What’s the Problem and Solution?
The claw-back from which the department speaks is problematic.
Ciaran Staunton, Mayo-born politician based in New York, has identified the ludicrous nature of our government’s reliance on replenishing the National Reserve through claw-back derived following the sale of entitlements without land:
“DAFM keep referring back to lack of funds in National Reserve, while at the same time in denial that the sweetheart leasing deal, and not capping the payments at €100,000 are the reasons for an empty Reserve Fund.”
Staunton has revealed to us the calculations for all entitlements leased and sold without land in 2016 as follows:
Sales of Entitlements without land: 233, value €90,702
Leased Entitlements without land: 90,702, value €19,087,534.16
Amount of money clawed back into National Reserve on Sale without Land: €13,995.59
However, if there had been a 25% claw-back on the Lease or Sale of Entitlements there would be €4,778,881.33 now in the National Reserve.”
A possible €4.7 million in the Reserve if leases were treated the same way sales have been treated. The government’s documentation on selling asks farmers to ‘please note that entitlements sold without land are subject to 50% claw back’. Surely this is putting farmers off the idea of selling, and encouraging leasing instead.
The National Reserve has dwindled as a result of decision makers within Leinster House, instead of reaching a potential total of over €4.7 million.
We can see that the ‘sweetheart leasing deal’ described by Staunton is preventing people from selling entitlements without land. In figures received by That’s Farming, we learn that in Donegal, for example, there were no sales of entitlements without land in 2016.
Zero, in comparison to 2,649 leases without land. This would amount to €451,618; nearly half a million. A 25% claw-back on these kinds of leases would mean our National Reserve would not be running on empty.
Staunton believes this leasing deal serves only one group; big farmers. Young farmers or others with small holdings do not benefit from the National Reserve being left out of a leasing deal that could generate millions.
The Other Issue
Another problem with how the National Reserve has been dealt with by the government is the hectare limits.
Since the maximum area to apply for entitlements is 90 hectares, Kenneth O’Brien of the Forgotten Farmers group points out that it should of course be much closer to the national average of approximately 30 hectares instead of three times it.
Farmers who own huge plots of land with 100 hectares can claim National Reserve funding for a staggering 90% of this land. Money has been vacuumed up by bigger farms until there’s nothing left for the small farmers who get nothing.
No one is blaming farmers for owning a lot of land; it’s the unfairness of how money is being divided to those who deserve it that’s the problem.
Michael Fitzmaurice, who attended a Brussels meeting on the issue of National Reserve funding in June 2016 with O’Brien, says that those with whom he spoke know of no regulations that would place the entitlement limit at 90 hectares; in fact, other EU Member States with different hectare limits were even cited.
If the threshold were lower, there would be more funding available within the National Reserve that could have been spread more evenly among small young farmers.
The Conclusion: A Saga of Misdirection
There appears to have been some ‘misdirection by Minister Creed’, according to Staunton in relation to the EU Green Cert requirements.
There are unjust regulations that govern our National Reserve, leaving it unable to replenish itself.
There has been inactivity in ‘facilitating the 3,000 plus Old Young Farmers’ thus far.
There has also been the enforcement of a non-EU Green Cert requirement for another 3,000 or more young farmers and new entrant farmers.
Staunton says that the ‘DAFM seems to be working in direct contradiction to the EU narrative and directive to prioritise young and new entrant farmers’.
This was touched on by MEP Marian Harkin on May 24th 2016, yet the actions of our government have not been called out properly as of yet:
“For far too long this cohort of young farmers were excluded from the National Reserve on arbitrary grounds. I believe that it is essential that all our young farmers are given the same opportunities and supports, especially those who are on low levels of entitlements.
“Currently, only 7% of Irish farmers are under the age of 35 compared to 45% over the age of 55. If we want to continue to develop our agriculture sector then we need to attract young committed people into it. In order to achieve this growth, there must be adequate supports such as the National Reserve in place.”
Young Farmers are the ultimate priority in the EU; Why aren’t they in Ireland?
The directives and narrative of the EU touched on by Ciaran Staunton are certainly, upon inspection, in conflict with the actions of our Department of Agriculture. Here is what the EU laid out for all Member State governments to base their regulations around for the new CAP:
Young farmers — a priority in the new CAP
The agricultural sector in the EU-28 is characterised by an ageing farming population.
For instance, in 2010 only 7.5 % of the farmers in these countries were younger than 35 years old, while 53 % were older than 55 years and 30 % were above 65.
However, young farmers often face a series of obstacles in establishing and developing their farms. These include, for instance, complex legal frameworks. A further complication is the financial cost of installation due to an initial lack of resources. In this regard, the first 5 years are very important for the long-term viability of an agricultural enterprise. Young farmers have long faced challenges of this nature and the CAP has always provided measures to assist them.
But the latest reform includes measures which are both specific to young farmers and compulsory for Member States, thus considerably strengthening the support now available to young farmers. In particular:
- a strong support framework for young farmers is now a major element of the new CAP;
- for the first time in the 50-year history of the CAP, the first pillar has a specific instrument to support young farmers
- a wide range of support measures is now available for young farmers under the new rural development programmes, with the emphasis on measures to support those who are setting up in business for the first time. It is up to the Member States to make the best use of this favourable new framework for the benefit of the next generation of European farmers.
A worrying case of ‘We Know Best’ seems to be emerging:
In the case of the Green Cert regulations that sprung from Irish decision makers;
In the case of the National Reserve’s inability to replenish because of claw-back issues;
In the case of Minister Creed’s claim that he was met with negativity while applying for Specific Disadvantage funding for Old Young Farmers;
Even in the case of the recent RDP under-spend of €50 million. Eamon Ó Cuív told That’s Farming that he warned Minister Simon Coveney years ago that the RDP would have a gross under-spend and he was subsequently ignored. This is a matter we have covered before, but it ties into this saga as the government continues to ignore the opinions of others who may even know better.
In the case of all these things, the government has undertaken an unhealthy attitude of ignoring outside influences and suggestions, even when they’re from the EU, and they’re sticking to it. It is not working for Irish farmers. We ask our government; how do you explain this?
Read Wednesdays’ Part 1 of our investigation about Forgotten and Old Young Farmers here.
Read Thursday’s Part 2 of our investigation about the Green Cert’s true source here.