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Irish farmers fear for livelihoods as EU overhauls agricultural subsidies

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The scene may be idyllic but Harold Kingston is worried. The fourth-generation dairy farmer in County Cork has just finished a long Zoom call with Ireland’s agriculture minister about Brussels’ plan to cut EU emissions and reform the bloc’s €50bn-a-year agricultural subsidy system.

“It’s hard to be green when you’re in the red,” he said. “If I don’t make money from this then I’m not going to be here to look after the particular environment this place has,” he added while walking through his 100 acres of lush pasture overlooking the sea.

Few issues are more fraught than reform of the EU’s almost 60-year-old Common Agricultural Policy — especially in Ireland, which will be among one of the most affected countries. Indeed, some of its more intensive and productive farmers, such as Kingston, fear the industry will be devastated.

CAP grants worth billions of euros a year have kept thousands of Irish farmers afloat for decades. They are almost as emblematic of Ireland’s membership of the bloc as the “paid for by the EU” signs that dot the country’s motorways.

But now the EU is seeking to reform the system, as part of its broader aim to cut net greenhouse gas emissions across the bloc by 55 per cent from 1990 levels by 2030. Agriculture accounts for about 12 per cent of EU emissions, and the situation is particularly acute in Ireland.

A man leaning against a digger bearing a Stand Up For Farming sign
A farmer turns out for an Irish Farmers’ Association demonstration against CAP reforms in Nenagh, Tipperary © www.forphoto.ie

People walking through the streets holding banners
Farmers protested that the EU’s plans for the 60-year-old subsidy system will devastate local economies © www.forphoto.ie

It has the third-highest greenhouse gases per capita in Europe — in part because of the methane-producing livestock and dairy farms that dominate its pastures versus the more environmentally friendly fruit trees, vines and olive groves of southern Europe.

“Ireland is an outlier in EU agriculture in the small size of its non-animal agriculture sector,” said Kevin Hanrahan, a senior executive at Ireland’s agriculture research centre Teagasc.

Under the new scheme, Brussels will slightly increase Ireland’s current €10.5bn CAP allocation over seven years. However, more of that money will be diverted to less environmentally damaging farms as well as eco schemes that allow farmers to recoup the cost of environmental investments.

The EU hopes this approach will have more success than previous CAP reforms, which the European Court of Auditors estimates have failed to trigger any material reduction in the bloc’s emissions despite more than €100bn spent since 2014.

Bar chart of emissions per capita  (tonnes of CO2 equivalent) showing Ireland is a relatively large emitter of greenhouse gases

The Irish Farmers’ Association, of which Kingston is a regional chair, has protested that this reform and other EU climate change policies could devastate local economies. A group representing dairy farmers, the ICMSA, had also claimed the Irish family farming model would be “critically undermined”, and food prices could rise.

Still, Alan Matthews, an economist at Trinity College Dublin, said it was clear Ireland’s more intensive farms exceed environmental limits. “We have to send a signal to farmers that they need to be more mindful.”

One complication is that Ireland has some of Europe’s most uneven CAP payments. Some farmers get as little as €160 per hectare, others more than €360, because payments are often linked to historic output.

The EU wants lower-paid farmers to get at least 85 per cent of the average rate to reward less intensive operations that got lower rates. But the combined impact of this and the EU’s revamped eco schemes means that up to half of the country’s almost 126,000 farmers will get lower payments overall, Ireland’s agriculture department estimates.

Bar chart of Total area taken up by agriculture (%)  showing Ireland has very little agricultural land

Grain growers will be particularly affected. Typically, they have high payments per hectare but new requirements to leave a higher portion of land uncultivated means they could face a collapse in incomes.

“Climate change is global, there’s no denying that . . . [but this is] putting too much pressure on us,” said Clive Carter, who represents Irish Grain Growers and tills a 50-acre farm that will lose a “nice little bit” under the reforms.

Charlie McConalogue, Ireland’s agriculture minister, wants to avoid a reduction in Ireland’s tillage area and is consulting Brussels on how to help the sector within the new ecological push.

“There’s no doubt about it [the new rules are] challenging economy-wise, it will be challenging for agriculture as well,” he told the Financial Times. “But I’m confident that we’ll be able to do that in a way that maintains food production and improves [Irish farming’s] sustainability and . . . carbon footprint.”

In some areas, the new CAP could boost production. Trevor Kelly, a butcher and part-time farmer, said he would love to farm full-time and might “have a chance” if his payments rose to the national average.

Conor Mulvihill, who represents Ireland’s dairy producers, also thinks fears of collapse are overdone. “You can’t dilute the importance of tradition in Ireland,” he said, pointing out that beef farming has endured despite the collapse in profitability that followed a recent drop in beef prices that was not accompanied by higher CAP payments.

Arguably, the ideal outcome of the reforms would be if the same amount was produced in a more sustainable way, all the while helping keep local businesses and farms afloat. Whether that triple objective is possible in Ireland is an open question.

In Courtmacsherry, Kingston insists the risks to production and the economy are real. Dairy is one of the most profitable sectors of Irish farming, but there is “absolutely no guarantee that will continue”, he said.

“If it turns out that it makes more sense to me to cut down the number of cows, and . . . have the same income, then that’s what I’m going to do.”

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