Consultation response on Implementation of CAP in England Announced

DEFRA has published a summary of the responses and its response to the consultation on the implementation of the CAP reform in England.  In total there were 4,928 responses to the consultation, with over 3,800 from campaigns from environmental groups.  When the consultation was launched on the last day of October DEFRA (and closed on 28^th November) had already made a number of key decisions (these are outlined in our November Bulletin), but views were still sought on other important areas. This was an exceedingly fast turn-round with only 3 weeks since the close of the consultation period. Some decisions (namely modulation) had to be made before the end of the year though.

Perhaps one of the most controversial areas is the shift of funds between pillars, this used to be called modulation but is now termed ‘inter-pillar transfer’.  DEFRA will be transferring 12% from Direct Payments (Pillar 1) to Rural Development (Pillar 2) from 2014 to 2019. For this reason, a greater proportion of the Pillar 2 will be spent on the environment at 87% compared with 83% currently.  DEFRA will hold a review in 2016 to look into the competiveness of English Agriculture and the demand for Agri-environment schemes with the ‘intention’ of increasing the transfer rate to 15% for 2018 and 2019.  DEFRA had been strongly leaning towards a shift of the maximum 15% but pressure had been building to reduce this; MPs had been calling for 9% and a recent report from the Environment, Food and Rural Affairs (EFRA) committee recommended a 9% reduction, especially as the new Environmental Land Management Scheme will not be available until 2016.

Other key decisions include:

• Setting the rate per hectare in the non-moorland SDA region the same as the lowland rate.  This will result in a ‘modest’ reduction in the lowland rate but a large rise in the SDA region.  There was slightly higher support for this option than no change to the current distribution.  DEFRA will now consider whether to merge these two regions.
• With regards to increasing the rate paid in the moorland region, DEFRA has said it will be consulting further with stakeholder organisations, a decision may not be made until the end of July 2014.  Concern has been raised over the scale of uplift.
• Degressivity at the lowest rate of 5% will be implemented and the salary mitigation option will not be introduced.  The redistributive payment would not be taken up (paying a higher rate for the first entitlements in any claim).
• No additions to the list of ‘negative activities’ which form part of the active farmer test.
• Not to introduce greening through a National Certification Scheme (NCS), but to use the Commission’s three elements; Crop Diversification, Ecological Focus Areas (EFAs) and Permanent Pasture.
• Although not part of the consultation, DEFRA has confirmed in its response that Permanent Pasture will continue to be measured at a national level.
• DEFRA plans to be making the full list of Ecological Focus Area options available for farmers. There was particularly strong support though for favouring the features that encourage pollinators so we might see this come through in detailed regulations or the NELMS scheme.
• Cross compliance is discussed but no decisions are made, allowing DEFRA more time toconsider the responses. They will consult again on GAECs in the spring and another solely on the Soil Protection Review.
• On the Rural Development Programme, DEFRA makes comments but few announcements, stating they will make a more detailed response in ‘early 2014’.

Further consultation will still be necessary on areas which cannot be developed further untilthe Implementing Regulations have been published.  These will be discussed with stakeholder organisations during the first half of 2014, including;

• How direct payments will be made for Common Land.
• The use of the National Reserve.
• Further details on ‘Active Farmer Test’ including guidance on ‘naturally kept’ land and how to demonstrate you are an active farmer if you fall into the negative list.