Padraig Walsh says modulation is another direct hit on Irish Farmers Incomes

Speaking from Brussels, IFA President Padraig Walshe said the significantly increased modulation cuts on the Single Farm Payment agreed by the EU Farm Council overnight was another direct hit on the incomes of individual Irish farmers on top of the Government's own Budget cuts.

Mr Walshe said however, the outcome of the EU negotiations gives the Irish Government the scope to channel unspent Single Payment funds to sheep farmers, which IFA has campaigned strongly to achieve. "I'm calling on the Minister for Agriculture Brendan Smith to make an immediate announcement that a new Sheep Maintenance Payment scheme will be introduced and paid out in 2009."

He said the increased modulation would cut the vital Single Farm Payment for the majority of Irish farmers every year for the next four years, and amount to €42m per year in deductions when fully implemented.

Mr Walshe said Agriculture Minister Brendan Smith had himself conceded that he failed to stop the modulation cuts. "Against the background of an extremely difficult year, and incessant pressure on farm incomes because of rising costs and falling prices, this outcome is another blow to producers' livelihoods," he said.

He pointed out that since its introduction in 2005, the value of the Single Farm Payment has been eroded by 20%. Farmers have been subjected to a 3% cut to set up the National Reserve, the existing 5% modulation cut and inflation which has already reduced the real value by 12%. Each additional 1% cut costs Irish farmers €8.5m.

On milk quotas, the IFA President said there would be an increase of 1% per year for each of the next five years, together with a butterfat reference adjustment worth an extra 2% for Ireland from 2009. This is intended to smooth the transition to the expiry of quotas in 2015, which has already been decided.

Mr Walshe said the Health Check provides the Minister with the flexibility and scope to make a Sheep Maintenance Payment of at least €20 per ewe, out of unspent Single Payment funds. Padraig Walshe said there is major expectation among sheep farmers and he called for an immediate announcement from the Minister.