The EU published its proposals for CAP Reform after 2013 on 12 October. Many of the proposals had previously been leaked and, with this being a first draft before months of negotiation and changes, the proposals we have now will not be what we end up with. Below is a brief summary and it is important that all Single Payment claimants and landowners consider how the changes will affect them and seek professional advice.
It is proposed that the Single Payment Scheme will end in 2013 and from 2014 a new multi layered payment will be introduced with a completely new allocation of entitlements. The payment would be made up of the following elements:
Basic Payment – similar to the current SPS model in England (at a lower payment).
Greening – an additional payment of 30% on top of the Basic Payment for undertaking the following mandatory measures:
- Crop diversification – on farms over 3 hectares 3 different crops must be grown on arable land.
- Permanent grassland – maintaining permanent grassland to within 5% of 2014 levels.
- Ecological Focus Areas (EFA) – 7% of all land apart from permanent grassland must be left as EFA with examples including fallow land, landscape features and buffer strips. It would appear that these can not overlap with areas in the Entry Level Scheme.
Young Farmers Scheme – an additional top up payment for farmers under the age of 40 who are setting up or have set up in farming since 2009.
A new active farmer definition will be introduced with claimants being required to meet two tests. For claimants who have significant non-agricultural income this will need to be looked at closely in order to not lose the ability to claim.
As previously reported, capping is to be introduced with a rising percentage (from 20 -100%) on all claims over €150,000. For businesses with employees, salaries will be taken into account in calculating the level of capping.
New entitlements will be only allocated to those who claimed under the Single Payment Scheme in 2011 with the number allocated based on the 2014 application.
The proposed changes need to be considered when planning any land transaction whether it is a sale, purchase or letting and professional advice obtained. We will be keeping a close eye on the changes as they progress through the statutory and political process of reform.