Billy Kelleher (Cork North Central, Fianna Fail)
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To ask the Minister for Agriculture, Food and the Marine if he is still pursuing his proposals on internal convergence in relation to common agricultural policy reform; the support he has for these proposals in the Council of Ministers, the EU Commission and the EU Parliament; and if he will make a statement on the matter. [6982/13]

Simon Coveney (Cork South Central, Fine Gael)
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I expect Deputy Kelleher and Deputy Ó Cuív, who is present to deal with the question, might have differing views on this issue, but perhaps that is not the case.

I can confirm that I am actively pursuing the question of internal convergence in the CAP reform negotiations. Indeed, it is probably my key concern in the overall CAP reform process. Under a national flat rate system, as proposed by the Commission, the impact on farmers would be significant in that approximately 76,000 farmers would gain an average of 86% on their current payments, while around 57,000 would lose an average of 33% on their payments. These are average percentages and some of the gains and losses would be far higher than this. In my view, this would have undesirable consequences at a time when Ireland is trying to encourage sustainable intensification in the agri-food sector as we strive to achieve the objectives of the Food Harvest 2020 strategy. Accordingly, I have been pressing for the maximum possible flexibility to be given to member states to design payment models that suit their own farming conditions. The approximation approach, under which all payments could gradually move towards, but not fully to, an average payment, is one alternative I believe should be considered in this regard. The Commission's pragmatic proposal for redistribution between member states is, in effect, an approximation model and provides a useful precedent. Modelling in my Department suggests that the application of this system to the distribution of funds among farmers in Ireland would lead to much smaller gains and losses to individual farmers than a flat rate system.

I have been very active in seeking allies for this position and I have been making significant progress, particularly with a group of member states with somewhat similar concerns to Ireland, including Spain, Portugal, Italy, Denmark, Luxembourg and, indeed, France and Belgium.

A number of other member states that are pressing for the adoption of a slightly different approach are also sympathetic. They include Austria, Slovenia and Hungary. In the past month the agriculture committee of the European Parliament has come on board by including an approximation model in its text. I am in regular contact with the Commission and other member states and confident that following our efforts, there is recognition of the difficulties the original Commission proposal poses for some member states such as Ireland. I hope to be in a position in the coming weeks to table a compromise solution that will be acceptable to all member states and that will try to strike a balance between the Commission proposal and the approximation proposal I have advocated. I know the Deputy has concerns in this area also and we have tried to take on board some of them.

Éamon Ó Cuív (Galway West, Fianna Fail)
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The Minister has stated about 70,000 farmers will gain 86% on their payment. On average, what will this amount to in cash terms? I could gain an increase of 100% if a payment of €1 was increased to €2. Will the Minister also tell me what the average loss of 33% will mean in cash terms? When one receives these figures, it will make it much clearer because percentages can be very deceptive.

The historic payment is based on activity levels in 2000-01 or 2002. Does the Minister accept that there are farmers who receive very high single payments and are only engaged to the minimum extent? They claim the payment but are not producing a great quantity. Does the Minister also accept that there are a large number of farmers who receive high single payments who are renting the land and not actively farming? Does he favour capping payments at a figure of €50,000? What is his attitude to front-loading?

Simon Coveney (Cork South Central, Fine Gael)
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What we have proposed as an alternative to the Commission proposal would essentially mean the higher one's payments, the more one would lose, while the lower one's payments, the more one would gain in the redistribution, which would be fair. Farmers with very high payments would lose one quarter of their payments, while those with very low payments would probably see their payments quadruple in some cases. I cannot give the Deputy exact figures, but they vary considerably, depending on the current level of payment.

I am the first to concede that there is a need for significant redistribution. There are plenty of farmers who have been given a raw deal in respect of the reference years and the building of entitlements over a period of time and they need and will receive a significant increase in their payments. The farmers with stacked payments who have built very large entitlements must pay for this. If we were to move on the lines the Commission has proposed which would involve pushing everybody into an average payment of about €270 per hectare over a relatively short period of time, some farmers would receive 30% of what they are currently receiving, while others would receive massive increases for doing very little.

This is an important point. We are trying to introduce a fair model to redistribute a significant amount of money and, at the same time, not to put many active farmers who have been relying on medium to high payments out of business. It is important to say we will not achieve the proposal I have sold around the country at public meetings.

It will not be possible to achieve that. We will achieve a compromise between that and the Commission's proposals. That is how compromise works. It was important for me to take a strong position to limit the amount of money being redistributed so that we could agree a compromise position acceptable to everyone. That is what we are working to achieve. On the question of capping, I will not commit myself to any particular figure. It was agreed by the Heads of State last week in the multi-annual financial framework, MFF, discussions that countries would be allowed to introduce a voluntary cap. We do not yet know whether we will be able to set that cap at whatever rate we wish it to be set. We will not know the answer until the end of June.

Éamon Ó Cuív (Galway West, Fianna Fail)
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Does the Minister favour having the ability to set the cap in Ireland and that every other country could do the same in order to suit each country's own particular circumstances? The Minister talks blithely about inactive farmers doing very little. In my view, the truth is that farmers who have low payments often have low payments because they happen to have been born in an area of poor land. It is not because they are inactive or are not productive. They are producing according to the ability of the land. Has the Minister matched the activity of farmers today - which he knows from the nitrates certificates given annually to every farmer - with single payments?

Simon Coveney (Cork South Central, Fine Gael)
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Yes. I will answer that question in a moment.

Éamon Ó Cuív (Galway West, Fianna Fail)
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Will the Minister provide that information to me? It would be very useful to have this information, that the Minister can prove that the farmers in receipt of high payments are highly active as of 2012. Irrespective of what new reference year is put in place for the new CAP, under the Minister's approximation method will the payment be relative to the entitlements they achieved in the years 2000, 2001 and 2002, the entitlements they achieved for this round of CAP?

Michael Kitt (Galway East, Fianna Fail)
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I will allow Deputy Ferris to ask a brief question as we are nearly out of time.

Martin Ferris (Kerry North-West Limerick, Sinn Fein)
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I have a question about the Minister's position regarding the Commissioner's proposals. He has referred to compromise being necessary. Will that compromise include a link to productivity?

Simon Coveney (Cork South Central, Fine Gael)
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The problem is that under the World Trade Organisation rules, payments cannot be linked directly to productivity. I would like to be able to do so. Coupling is one way of doing it. The single farm payment cannot be linked directly to productivity which is the reason we have been relying on an historical link to productivity. Teagasc figures in 2010 demonstrate a correlation between farmers with the highest stocking rate and those in receipt of the highest payments. That does not necessarily mean that outliers do not exist who are in receipt of high payments. I will try to get those figures for the Deputy.

We are in the middle of a process to review the Common Agricultural Policy which has been in train for four years. We are now at the end game in efforts to hone in and focus on compromises. I would welcome input from the Opposition to the process. If the Deputy is proposing something entirely new which has not been debated and which is not part of the European Parliament or Council discussions, it is unlikely that a radically different arrangement could be achieved at this stage. I have had a brief discussion with the Commission. I do not believe that countries will be told they can set a cap at whatever level they wish. In my view the Sinn Féin proposal to cap payments at €100,000 was a pretty good proposal. However, whether we will be able see that through and have the flexibility to do so in the final agreement, remains to be seen. That is why I am slow to commit myself to any cap figure at the moment because I may not be able to deliver on it subsequently. I am the chairman but there are 27 countries and also the European Parliament which has very strong views.

The Commission wants to try to retain the Common Market approach. I am not sure how the idea that Ireland would be able to set a cap of €50,000, that Germany would have no cap at all and that this would not have an impact on competitiveness in the two countries in the context of how they produce food would fly. We are involved in a process and it would be helpful to consider where the proposals stand and from where the compromises on the part of the Parliament are coming. If these can be improved upon from an Irish perspective, then I would certainly like to obtain the Deputy's views on the matter.