Scottish CAP Update November 19, 2014 12:00 am More detail has emerged on the implementation of CAP reform in Scotland over the last month or so. Firstly, a Guidance Booklet on Greening – ‘Basic Payment Scheme: Greening‘ was published on the 29th October. Then, the Scottish Government (SG) commenced a series of roadshows throughout the country to explain the new systems to the industry. These commenced in early November and will continue into December. This was supplemented by a further announcement by Scotland’s Rural Affairs Secretary Richard Lochead on the 12th November giving more details of implementation (see http://news.scotland.gov.uk/News/Farm-funding-update-124b.aspx). Finally, claimants under the SPS have received a letter from the SG outlining which of the new payment regions their field parcels have been allocated to. Whilst this flurry of activity by no means provides all the answers, it does help us gain a greater understanding of the Scottish Basic Payment Scheme (BPS). Greening The SG’s Guidance document on Greening can be found at – http://www.scotland.gov.uk/Resource/0046/00462014.pdf. We have summarised what we know about the rules and put them into a Scottish Greening Factsheet. This can be found under the ‘Bulletins’ tab at the top of the page. The remainder of this article looks at the other elements of the BPS. Payment Regions All farmers and crofters should, by now, have received a letter from the SG. This will include information about changes to their 2014 Single Farm Payment entitlement values and also which payment region (classification) each of their land parcels has been placed in for the BPS. Farmers and crofters are encouraged to check this information carefully; land classified in the wrong region could be costly as the payments under the different regions will vary greatly : Region 1 – Parcels used for arable cropping, temporary and permanent grass. These will receive the majority of funds (87%) of the BPS budget, estimated BPS and greening rate is €220 per Ha Region 2 – Better quality rough grazing (RGR) in LFA grazing category B, C or D. This land type will receive 9% of the BPS budget, estimated BPS and greening rate is €35 per Ha Region 3 -Poorer quality rough grazing (RGR) in LFA grazing category A. This land type will receive 4% of the BPS budget approximately €10 per Ha The land will be classified according to last year’s SAF; those wishing to challenge the region a parcel has been put into will need to respond within 60 days from the date of the letter providing evidence as to why they think the land has been wrongly classified. The local office will give advice on what evidence they may need, perhaps the land was coded incorrectly on the 2014 SAF and photographic evidence will be required. Active Farmer and Minimum Activity Rules The Scottish Government has been very determined to try and put an end to the so called ‘slipper’ farmers. Under EU legislation there are only two ways that a farmer can be classed as inactive, these are: If more than 50% of their land is mainly land that is ‘naturally kept in a statesuitable for grazing and cultivation’ and they do not comply with the minimum activity rules. In Scotland, rough grazing land that falls into payment regions 2 and 3 has been classed as land that is ‘naturally kept in a state suitable for grazing and cultivation’. Claimants with this type of land will need to either meet a minimum stocking density of 0.05 LU per Ha or undertake at least two options from the following list: Domestic grazing animals for > 183 days An up-to-date animal health plan Cutting within a multiannual regime where appropriate for environmental reasons Maintain livestock handling facilities Be a member of a farm assurance scheme. If they appear on a ‘negative list’ of entities. The mandatory ones are; operators of airports, waterworks, railway services, real-estate services and permanent sport and recreational grounds. Scotland has also included Sporting Estates, where an applicant undertakes shooting, stalking or fishing and most of the applicant’s income is not derived from farming. More details on how this will be calculated is still awaiting. But even if a claimant is ruled to be inactive they may still be able to claim under the BPS if they can prove they have a bona fide farming activity. National Reserve For those who are not eligible for an allocation of BPS entitlements they may be able to apply to the National Reserve. Scotland is also opening the National Reserve up to those new entrants who were unable to get an allocation of entitlements under the current Single Farm Payment Scheme. There is a proposal for three categories: Category 1 will be for New Entrants and Young Farmers (40 years old or less in the year of application) who started farming in 2013 or later Category 2 will be for those farmers who were not allocated entitlements to the Single Farm Payment or were only allocated SFP entitlements through the New Entrant or Investor categories of the previous National Reserve in 2005. There will be the option to have these topped up to the regional average value from day one Category 3 for farmers subject to Force Majeure Importantly this time round, the National Reserve will be available each year and therefore new entrants will not be ‘frozen’ out of obtaining entitlements as they were under the SFP. Detailed rules are however yet to be confirmed. Young Farmer Payment Detailed guidance on how the Young Farmer Payment will operate in Scotland is still awaited, but we do know in addition to applying to the National Reserve for an allocation of entitlements, young farmers will also be able to apply for a top-up payment on each activated BPS entitlement up to a maximum of 90. The Scottish Government has said it will be done in such a way as to ‘maximise top-up payments’. It will be paying out on the best land first and under legislation it can either be a 25% top-up to the applicant’s entitlements or 25% of the regional payment in 2019. To be eligible the applicant must be 40 years or younger when they first apply for BPS and must be setting up business for the first time or have set up business for the first time within 5 years of the first application to BPS. The top up is paid for a maximum of five years. Although if a business was set before the BPS, the pre-existing years would be deducted from the five year period (i.e one set up in 2012 only get 2 years). More details are required regarding; definition of ‘head of a business’, can there be joint applications, how will partnerships and limited companies be dealt with etc. Coupled Support for Beef and Sheep Producers Scotland is going to continue its coupled support for the beef sector with a calf payment. There will be two schemes, one for the Mainland and a separate one for the Islands. The initial proposal of doubling the rate on the 1st 10 calves (similar to the previous scheme) has been disallowed by the EU. Instead there will be a flat rate, estimated at €100 per calf on the mainland, rising to €160 per calf on the islands, with the 75% or more beef genetics rule remaining. In addition there will be an upland sheep scheme operating in Region 3. Once again all the details have not been confirmed, but it is expected to be available to holdings where more than 80% of their land falls in region 3 and they have less than 200 Ha of Region 1 land. The payment will be an estimated €100 per homebred ewe hogg. A stocking rate of one hogg per 4 Ha of rough grazing has been indicated. It seems there may be a separate claim for this top up in September, with a retention period running from October to March and payment in April. Once we have confirmed details we will let readers know. Coupled payments will be based on stock numbers on the farm in 2011. Other Points It appears there might be a slight change in the basis of allocating entitlements. Originally the Scottish Government had proposed that the number of entitlements would be based on the number of eligible hectares declared in 2013 or 2015, whichever is the smaller. The EU are not happy with this and it may simply be changed to the number of eligible hectares declared in 2015. In Scotland, again to try and deter ‘slipper’ farmers, they will operate the ‘windfall profit’ clause. This will prevent historic payments being concentrated on a small area of land. This will operate where the area declared in 2015 is more than 40% less than that declared in 2013. There will also be a siphon when entitlements are sold without land, this will also help top-up the National Reserve. Claimants are reminded that the usage rules have changed subtly. Under BPS at least once every two years, a claimant must activate all of his entitlements in a single year to prevent them from being lost. It will not be possible to ‘rotate’ excess entitlements anymore to prevent confiscation. The launch of the new claims system is scheduled for December. Detailed BPS Guidance is promised for January, alongside information on the new SRDP schemes.
