Farm funding update

13 Nov 2014 02:53 PM

Further information on CAP implementation.

Further details of how the new Common Agricultural Policy (CAP) will be implemented in Scotland have been set out by Rural Affairs Secretary Richard Lochhead.

The new CAP is the most radical reform of rural funding in a generation and comes into effect from January 1, 2015.

In yesterday’s update, Mr Lochhead has revealed how the Scottish Government intends to:

• use flexibilities won in Europe on the National Reserve to benefit farmers frozen out under the old CAP, who will receive basic payments at the regional average from day one of the new system.
• provide the best possible support for Young Farmers (defined by Europe as being no more than 40 years of age in the year of application) by choosing to pay basic payment top-ups on the maximum number of hectares allowed by European regulations, and in such a way as to maximise these top-up payments
• take action to put an end to so-called ‘slipper farming’ through implementing the Scottish clause on minimum activity rules. These will require active management on all rough grazing land – the type of land used in the past for slipper farming – if it is to qualify for CAP payments. In the case of active management by grazing, there will be a choice of meeting a minimum stocking density or undertaking other annual activities
• further limit slipper farmers by opting for the windfall profit clause, which stops historic payments from being temporarily maintained on a new, smaller area of eligible land, and the siphon on the sale of entitlements without land, which should discourage the trading of entitlements for the purpose of subsidy-chasing by reducing their value.
• publish information on the likely payment rates for the new Scottish Rural Development Programme (SRDP) on the Scottish Government website. The SRDP is currently with EU for approval, and a further update is expected later this year.

It comes as letters are sent to every farmer and crofter in Scotland explaining how cuts to the Scottish Government’s CAP budget will affect 2014 Single Farm Payments (SFP).

Rural Affairs Secretary Richard Lochhead said:

“The new CAP to be implemented in 2015 is radically different to the existing policy. As well as big changes to the way farm funding is paid, we are also having to deal with cuts to Scotland’s CAP budget which take effect in this financial year.

“As a result of the dreadful deal negotiated by the UK Government, Single Farm Payments in Scotland will be reduced by an average of 12 per cent compared to last year. This reduction would have been halved if Scotland had received the €223 million convergence uplift that is rightly ours, substantially lessening the financial blow to our hard-working farmers and crofters.

“Our extremely challenging CAP budget is precisely why Scotland’s support package from 2015 is designed to target genuine farming activity and provide a fair deal for those disadvantaged under the current system.

“For example, I have chosen to regionalise payments in Scotland and my officials have recently written to farmers and crofters to let them know which of the three new CAP payment regions we think their land falls into. Anyone with any queries about their allocation should contact their local RPID area office as soon as possible.

“I have also put more of our budget into coupled support payments for beef and sheep producers and I am taking firm action against slipper farming through implementing the Scottish Clause and other measures available to me.

“We have already won flexibilities in Europe for a National Reserve that goes beyond the mandatory categories of Young Farmers and New Entrants. Thanks to our success in the negotiations last year, past new entrants all the way back to the reference period for the SFP – hardworking farmers who were wholly or partly frozen out under the old CAP - will receive basic payments at the regional average from day one of the new system.

“This approach will immediately address the unfair treatment faced by hundreds of farmers over the past few years, whilst respecting the strict conditions contained in the EU regulations. It will honour my commitment to give new entrant farmers fair treatment from day one of the new CAP.

“We are also providing best possible support for Young Farmers, who will be able to claim top-ups to their basic payment on the maximum number of hectares allowed. We will also pay out on the best land first.

“Of course, all farmers disadvantaged under the old CAP will be eligible to apply for the full allocation of other elements of support such as Greening and coupled support, which are the same for all farmers, as well as SRDP funding, our proposed rates for which will shortly be published on the Scottish Government website.

“Europe promised a simpler CAP but this has not materialised and there can be no doubt that what we have is extremely complex.

“The Scottish Government has a strong track record in making farm payments on time or ahead of deadline - with typically 90 per cent of farmers receiving their SFP by the end of December – and that is what we are aiming for this year.

“For 2015 onwards, the Futures Programme remains on track to give us a new online system for CAP in Scotland, called Rural Payments and Services, that will deliver nearly £4 billion of support to our farming, food and rural sectors in the next five years alone. Under the new, more complex CAP, we will aim to pay as early as we can in the payment window set by Europe and will keep the implementation timetable under constant review to ensure farmers receive their payments.

“We are continuing to provide farmers and crofters with as much information as we can about the new CAP, for example on the Scottish Government website and through the dozens of roadshows we are currently staging across the country.”

Notes To Editors

The Scottish Government is writing to farmers and crofters to let them know about changes to 2014 SFP entitlement values and on the initial classification of parcels to the new Basic Payment regions.

Any farmers or crofters concerned about the way their land has been classified into the new payment regions have been asked to request a review of their allocation within 60 days from date of the letter. They must provide evidence on why they believe the land has been wrongly classified.

The Scottish clause/minimum activity rules are likely to be:

• Farmers with agricultural land that is maintained in a state suitable for grazing or cultivation will need to take steps to control weeds and vegetation on this kind of land.
• Farmers with agricultural land that is naturally in a state that is suitable for grazing or cultivation will need to be sure that they either meet a minimum stocking density of 0.05LU/ha on this kind of land or that they undertake an agricultural activity plan including at least two activity options from a list of possible activities:
  • Presence of domestic grazing animals for more than 183 days ;
  • Having an up to date animal health plan;
  • Cutting within a multiannual regime where appropriate for environmental reasons;
  • Maintaining livestock handling facilities;
  • Membership of a farm assurance scheme.

The Scottish Government’s negotiations led to the rules governing the National Reserve being significantly more flexible than they might otherwise have been – but the Scottish Government’s decision on this matter will ultimately be bound by European CAP regulations. Those Regulations require the rules to be objective and non-discriminatory and therefore prevent Member States from choosing arbitrary dates as eligibility criteria for the National Reserve.

Under our proposals, there will be three categories under the National Reserve.

• Category 1 will be for new entrants and young farmers who start farming in 2013 or later who will be able to apply to the National Reserve for entitlements to Basic Payments.
• Category 2 will be for farmers who were not allocated entitlements to the Single Farm Payment or who were only allocated SFP entitlements through the New Entrant or Investor categories of the previous National Reserve in 2005. These farmers will be eligible to apply directly for entitlements to the new Basic Payments, however since these entitlements may initially be of low value the National Reserve option to top up the value of these entitlements to the regional average value will be used from day one.
• Category 3 of the new National Reserve will cover farmers who have been subject to Force Majeure.
• Unlike under the old CAP, the National Reserve exercise can be repeated in future years to ensure that the new entrants of the future do not suffer from being frozen out.

The Scottish Rural Development Programme (SRDP) 2014 - 2020 delivers Pillar 2 of the EU Common Agricultural Policy (CAP). It will provide over £1.3 billion of funding for economic, environmental and social measures for the benefit of rural Scotland. The SRDP is co-funded by the European Commission and the Scottish Government.

The proposed SRDP 2014 - 2020 was submitted to the European Commission in June 2014 for approval. We are aiming to open the new SRDP from January 2015.

The Scottish Government has worked closely with industry, keeping them updated through our CAP stakeholder group on the latest developments – such as swiftly communicating EU feedback on our implementation proposals - and listening closely to their views. The Scottish Government has held 22 CAP stakeholder meetings, many of which have discussions on options for future direct payments.

The new online system for CAP in Scotland (Rural Payments and Services) is planned to open for customer registration in December 2014. Customers will be able to create an account and check their personal, Business and land information. Every Business will need to nominate a Responsible Person and every Advisory Firm will need to nominate an Accountable Person.

The payment window for direct farm funding goes from 1 December to 30 June the following year.

We have recently published a more information about Greening on our website – ‘Basic Payments Scheme: Greening’. We are also giving printed copies of the Greening booklet to everyone at the CAP Roadshow events we are holding across the country. More information and guidance will be published over the coming weeks and months – go to www.scotland.gov.uk/CAP2015 to see the latest information.

More information on the CAP roadshows can be found here: http://news.scotland.gov.uk/News/Common-Agricultural-Policy-roadshow-115b.aspx