CAP 2020 Consultation Process Public Meeting Dr Kevin Hanrahan Rural Economy Development Programme Teagasc

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2 CAP 2020 Consultation Process Public Meeting Dr Kevin Hanrahan Rural Economy Development Programme Teagasc

3 Overview Objectives and Principles of the Common Agricultural Policy (CAP) Importance of the CAP to Agricultural Income and the Irish Economy Farmers Agri-food sector Wider rural economy 3

4 The Common Agricultural Policy Objectives and Principles Objectives of the CAP 1. To increase agricultural productivity 2. To ensure a fair standard of living for the agricultural community 3. To stabilise markets 4. To ensure availability of supplies 5. To ensure that supplies reach consumers at reasonable prices Principles of the CAP 1. Market unity 2. Community Preference 3. Financial Solidarity

5 What does the CAP do for the Agriculture and Food Sector? Pillar I & Pillar II policies support of agricultural incomes, rural development and agri-environment Provides market price support via membership of the EU Single Market and Community Preference 5

6 Family Farm Income & the CAP euro per farm 60,000 50,000 40,000 30,000 20,000 10,000 0 Dairy Cattle Rearing Cattle Other Sheep FFI Direct Payments Farm size (ha) Tillage ha per farm Source: Teagasc National Farm Survey

7 Agriculture Sector Income & the CAP 3,500 3,000 2,500 million euro 2,000 1,500 1, , Income excl. DP Direct Payments Source: CSO Agricultural Output, Input and Income 7

8 Farm income and CAP Importance of direct payments evident in their share of farm and sector income Remember the importance of CAP when output prices are very low A year like 2009 will probably reoccur Preferential access to most valuable market in the world (the EU) supports the level of Irish farm gate prices and the value of Irish food exports 8

9 Irish Agri-food Exports: EU28 & Rest of World 9,000 8,000 7,000 million euro 6,000 5,000 4,000 3,000 EU28 ROW 2,000 1, Source: CSO External Trade Statistics 9

10 Agriculture and Food Manufacturing: Shares of total Economy GDP & Employment 12% 10% 8% 6% Note: the decline in the share of agri-food in GVA was due to the very large increase in Irish GDP in % 2% GVA Employment 0% Source: Eurostat National and Regional Accounts 10

11 Agri-Food importance to Regional Economies Importance of Agri-food industry to National Output, Income and Employment is magnified in many of the regions Role of CAP supports to agriculture is also varies across the regions 11

12 Share of CAP Direct Payments in 2016 Regional Agricultural Sector Income 100% 80% 60% 40% 20% 0% State Border Midland West Dublin plus Mid East Mid-West South-East South-West Source: CSO Regional Accounts for Agriculture 12

13 Regional Agricultural Output, Income and Subsidies ,600 1,400 1,200 million euro 1, Border Midland West Dublin plus Mid East Mid-West Output Income Direct Payments South-East South-West Source: CSO Regional Accounts for Agriculture 13

14 Regional importance of Agriculture, and Food Manufacturing Employment 10% 8% 6% 4% 2% 0% Border Midlands West Dublin Mid-East Mid-West South-East South-West Source: CSO Census of Population

15 CAP and the wider economy Agricultural activity supports wider rural economic activity Farmer input purchases & output sales Agricultural activity provides the basis for employment in food processing industries and in Ag. input industries CAP support of farm incomes supports other rural and urban businesses via farm household consumption expenditure 15

16 CAP and the wider rural economy Ireland as a global tourist destination The CAP supports the maintenance of agricultural landscapes and communities that are the basis of this attractiveness Maintenance and economic development of rural communities CAP support this through Pillar II spending on LEADER Company activities 16

17 Conclusions The future is at least partly in our own hands Can we re-imagine/redesign the CAP and its implementation in Ireland to help us better address the challenges faced? Sustainability Challenges faced Economic Social Environmental Ireland (and the EU) can change its policies CAP reform represents an opportunity Have you say! 17