Scottish CAP Reform.

Following the publication of the Scottish Government’s consultation on CAP reform (see December article) a feisty debate has ensued.  In fact, the initial reaction pre-Christmas was rather restrained, but complaints have grown over the last couple of months (perhaps farmers fully digested the proposals with their turkey).

A number of issues have been highlighted as problems, with NFU Scotland leading calls for a re-think.  The most complex area is the linked topics of the Rough Grazing area regional payment rate and the desire to prevent ‘slipper farmers’ claiming.  

The proposed payment rate of €20-€25 per Ha in the Rough Grazing region is thought to be highly redistributive.  It provides too much support on very extensive hill areas and not enough on better-quality rough grazing.  It has been mooted that there should be some ‘banding’ within the Rough Grazing region to reflect these differences.  One option is the split the Rough Grazing region into two (or more?) regions.  This adds complexity to thesystem and it is not clear whether there is an acceptable existing land designation that could be used to make such a split.  If there is not something ‘off the shelf’ then a complete mapping process might be needed and it seems unlikely there is time for this.  

An alternative is to pay an area-based top-up where rough grazing is stocked above a certain minimum level.  (The basic Rough Grazing regional payment would be reduced from the amount currently proposed.)  The funds for the top-up would come out of the ‘coupled payment’ budget.  However, with the desire to continue with the Scottish Beef Calf Scheme, it does not appear that there is enough money in the 8% of the BPS budget to fund a rough grazing top-up too.  The Scottish Government is in consultation with DEFRA and the EU to see if it could use some of the UK’s coupled payment threshold.

A simple answer to paying support across large tracts of lightly stocked or un-stocked hill land would be through the minimum activity requirement.  In the original CAP agreement it seemed likely that a minimum stocking rate could be imposed on land ‘mainly naturally kept in a state suitable for grazing and cultivation‘.  If the land was not farmed to a suitable level it would be ineligible for the BPS and so would not ‘dilute’ the payment rates on better quality land.  However, the EU has now ruled that requiring production in this way would be contrary to WTO rules.   The Scottish Government has apparently come up with an alternative (cunning?) plan.  This would require farmers to ‘keep livestock at an appropriate level linked to the carrying capacity of the land, or demonstrate significant active efforts every year to maintain agricultural land‘.  The proposals are being checked for compliance with the EU.  

A further area of contention is the proposed transition to fully regional payments.  The Scottish Government’s consultation suggested a number of options.  These ranged from fully regional from day one, through phasing by 2017 or 2019, to the ‘Irish tunnel’ option.  The latter would keep an element of history within entitlements even after 2019.  The Government has not been enthusiastic about the tunnel option, but some industry opinion is strongly in favour.

A reminder that the closing date for responses is the 17^th March.  It seems to us that the Scottish Government is rather like a rabbit in the headlights over CAP reform.  With the referendum in the autumn, the administration does not want to upset anyone.  But the introduction of the BPS is bound to create winners and losers.  The danger is that it will end up with a highly complex system in trying to please everyone, and that it will take too long to make any decisions.