Welsh CAP Decisions

January 15, 2014 12:00 am

Wales will have three regions under the new Basic Payments Scheme (BPS).  This is one of the major decisions announced by the Minister for Natural Resources and Food, Alun Davies, on how CAP reform is to be implemented in Wales.  The full document can be found at http://wales.gov.uk/docs/drah/publications/140114directpaymentstofarmers-decisionsen.pdf.

Regionalisation and Entitlements

The biggest decision for the Welsh Government was how to implement the move from the current historic SPS system to the new mandatory regional BPS.  A simple flat rate payment across all of Wales was never likely, as this would have redistributed too much support to extensive hill areas.  The Government had consulted on a number of options with either two or three regions and a mix of payment rates.  None of these found universal favour among stakeholders and the wider industry, so the administration seems to have gone for what it believes is the ‘least bad’ option.

In summary, this is;

  • three regions – Moorland, Severely Disadvantaged Areas (SDA) and a combined Disadvantaged Areas (DA)/Lowland region
  • Moorland will be restricted to land above 400m altitude.  This moves around 133,000 hectares of lowground moorland (assumed to be more productive) into the SDA region cutting the size of the Moorland region from 290,000 to 157,000
  • payment rates will depend on the area claimed in 2015, however the WG believes that payments should roughly be weighted 1:10:12 between Moorland : SDA : DA/Lowland
  • this results in indicative rates for 2019 of €20 : €200 : €240 per hectare for the three regions
  • there will be a phasing to a fully regional payments over 5 years to 2019.  This will be in equal steps of 20%.  Therefore the 2015 payment will be based 80% on historic (2014) SPS claims and 20% on a regional payment
  • Welsh farmers will be contacted by Rural Payments Wales in July 2014 and provided with a breakdown of what land they have in each region, based on past claims.  Appeals against the classification will be allowed at this point
  • new BPS entitlements will be issued in Wales on the basis of eligible land occupied in 2013.  They will only be allocated to those who received an SPS payment in 2013, or can otherwise prove they were farming in that year.  The consultation does not give any detail on how business changes may be dealt with under the rules (mergers, scissions etc.), or the transfer of ‘golden tickets’.  However, it does promise more decisions on entitlements will be forthcoming in the spring
  • there will be a National Reserve available in 2015, focused on Young Farmers and New Entrants.  Detailed eligibility requirements are still awaited
  • with the split of Wales into regions, it should be remembered that entitlements will not be tradeable between regions

Other Decisions

Decisions on various other optional elements within the reforms have also been made by the Minister.  These are;

  • capping/degressivity will be implemented as set out in the consultation document (see July Bulletin).   This results in the following bands;
    • below €150,000 – no reduction
    • €150,000 to €200,000 – 15% reduction (on the element above €150,000)
    • €200,000 to €250,000 – 30% reduction
    • €250,000 to €300,000 – 55%
    • above €300,000 – 100% reduction
  • the greening element will not be included in capping.  It was optional for the WG to offset salaried labour before applying greening, but they have chosen not to do this
  • funds raised from capping will go into the Rural Development fund
  • the Minister has decided to implement the three basic EU-wide greening measures rather than go for an alternative ‘certification’ scheme.  More details are promised in spring 2014 on the details of how greening will operate in Wales (the administration is waiting for the EU implementing regulations)
  • although no decision has been made, the Minister is ‘minded’ to operate the retention of permanent pasture rule at a national, rather than farm level
  • there will be no coupled payments, Small Farmers Scheme, or Area with Natural Constraints top-up in Wales.  The mandatory Young Farmers Scheme will operate and more details are, again, promised in spring
  • the Pillar Transfer of 15% which has already been announced (see article last month) is affirmed
  • there will be a minimum claim size of 5 hectares.  This is higher than the 3 Ha suggested in the consultation
  • the Welsh Government will be deciding on detailed Active Farmer rules later in the year once the Implementing Regulations are available

This announcement provides more clarity for Welsh farmers.  It is now possible to work out in general terms what the financial effect of the reforms are likely to be for individual businesses.  However, many of the detailed BPS rules remain to be set.  We shall keep you informed of developments.

A further consultation on the implementation of Pillar 2 in Wales (the Welsh Rural Development Programme for 2014-2020) will begin in February.

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