The latest CAP budget commences on January 1st, 2023 and there will be a restructuring of payments for farmers which will influence their incomes for the next four years. Some of the key proposed changes are summarised below:

  • It is intended that environmental schemes will make up 25% of the budget (€66-€77/ha), depending on what objectives are chosen by the farmer.
  • Farmers will have the option to choose 2 of 10 objectives. The farmer will know what is more applicable to their business, land type and environmental conditions. There is a payment model change from being paid to carry out a practice, to being results driven. For example, up to now wild bird cover would be sown in 1ha. plots for birds to feed on in winter, with the aim of  establishing pockets of suitable habitats . Going forward, a mixture of large seeds (triticale or oats) and small (linseed or mustard) seed cereals to maximise the variety of species that can benefit from the mixture will be sown. It will be important that farmers try to be consistent in keeping the same area for the bird cover to ensure the small 1ha. ecosystem has the best chance of success.
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  • The results based scheme is expected to see farmers financially incenitvised resulting in increased effort to achieve favorable results.
    • ‘Convergence rollout’ will see an averaging out of entitlement value to €156/ha which means farmers with lower quality land will receive more money from the EU than previous. . This also means farmers of tillage / more valuable land will see their entitlement value reduce.  (expected some 25%).

    The knock-on effect of convergence is that landowners adjacent to (for example) Bord na Mona sites with poorer quality peaty soils may see  increased incomes from being ‘active farmers’ (have a sufficient stocking rate on their land )) and presenting another challenge in land acquisition for renewable projects as the gap between proposed renewable rents and normal agri practices reduce.

    • Today, less than 200 farmers in Ireland claim subsidy payments of over €100,000. These landowners will see their EU payments capped at €66,000 although this excludes certain scheme payments such as young farmers and environmental schemes.
    • CAP23 aims to ensure through incentives that 7% of farmland is untouched for nature. (an area per farm that would be mapped and unoccupied by livestock).
    • Farmers that have sown forestry since 2009 are entitled to claim BISS (environmental scheme) payments. (BISS is the new combination of the now redundant B.P.S. and greening payments).
    • There will be changes to rented land. A new scheme called CRISS has been announced. This scheme will only be allowed to be claimed once so when this is claimed the land is less valuable as a tenant as the area will not qualify for EU payments on these hectares. It will rely purely on its economic output to pay for itself.

    The movement to a results based system may see an increased level of interest in renewable energy prospects as a diversified use of farmland, but the key challenge for the department is communicating the changes such that farmers can prepare for the new initiatives.