Coodes Solicitors, Kevin George looks at the CAP reform in England

Wed 26th Feb 2014

The Agricultural Council and European Parliament reached a political agreement about the reform of the Common Agricultural Policy in June 2013. There are still large areas of uncertainty and decisions have to be made by Members States concerning how to implement CAP.

The key points are set out below:

  • There will be a new direct payment system for farmers which will replace the Single Farm Payment Scheme (SPS) in 2015.
  • The Scheme will be similar to the old Scheme. For example you will still need to apply in the Spring of each year, you will need to have entitlements and you must have eligible hectares at your disposal.
  • The payment will be calculated as a flat rate as per entitlement.
  • Cross compliance will still apply. In addition 30% of your direct payment will depend on meeting certain greening requirements.

The greening requirements consist of three parts, namely:

(i) Crop diversification;

(ii) Protection of permanent pasture;

(iii) Ecological Focus Areas

  • There will be a new active farmer test.
  • As far as qualification for entitlements are concerned the Government may choose to roll forward the entitlements from 2014. Be warned that if the number of entitlements you are holding in 2015 is greater than the number of eligible hectares you have in 2015 the excess will have to be cancelled.

The other alternative is that you will be eligible to apply for the entitlements in 2015 provided you are an active farmer and receive the SPS for the 2013 SPS year.

  • The Government must address the position regarding large claimants. This will be dealt with either by reducing the direct payment to be paid over a threshold of €150,000. The rate of the reduction is expected to be 5%.

The other alternative is the redistribution of payments by paying a supplemental payment for the first tranche of hectares up to the national ceiling. The Government can set aside 30% of the amount available for the direct payments in each region for this purpose.

  • There will also be various top-ups. The only top up which is mandatory is the Young Farmers Scheme. The Government must set aside 2% of the amount available for the direct payment for this Scheme. You are eligible as a Young Farmer under this Scheme if you:

(i) Are an individual and not an incorporated body;

(ii) Are not more than 40 years old in the year when you make your

direct payment application;

(iii) You set up as a farmer in the previous five years and

(iv) You meet additional criteria based upon skills and training.

The supplemental payment could amount to 25% per eligible hectare which the Young Farmers claim under the direct payment scheme.

  • The current minimum claim size for the SPS is one hectare but the Government are likely to increase this to five hectares under the direct payment scheme. This would then exclude 16,000 claimants or about 0.6 of the land on which claims are made. The majority of the smallholdings below 5 hectares are not being farmed primarily for business purposes.
  • There will be a new Rural Development Programme which is under consultation.

Therefore there is still a lot of work to be done as far as CAP Reform is concerned and the devil will be in the detail. However it would be sensible to keep a watching brief over the developments as further regulations and decisions are issued and made.

Wed 26th Feb 2014

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