Welsh CAP Reform Implementation July 3, 2014 12:00 am The Welsh Government has announced further details on how the Basic Payment Scheme will operate from 2015 onwards. This has come in a written statement from Alun Davies, the Minister for Natural Resources and Food, released on the 1st July. Many of the latest decisions are somewhat technical in nature, as the overall shape of the new BPS had already been set out back in January. The announcement states that ‘the decisions I am making today complete the policy decisions I have to make for Pillar 1’. As far as the industry is concerned though, it is not the end of the story, as detailed guidance and rules are still required in many areas. No indication is given of when this may become available. Existing Decisions The decisions previously announced are covered in more detail in our January article. To recap and summarise the main points; there will be three regions – Moorland, Severely Disadvantaged Areas (SDA) and a combined Disadvantaged Areas (DA)/Lowland region. Moorland will be restricted to land above 400m altitude – land below this will fall into the SDA region payment rates will depend on the area claimed in 2015, however the WG believes that indicative payment rates will be €20 : €200 : €240 per hectare for the three regions respectively there will be phasing to 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 new BPS entitlements will be issued in Wales on the basis of land occupied in 2015, but only to those who made a claim under the SPS in 2013 there will be capping above the EU minimum level (5% after €150,000). In fact, there will be an absolute cap at €300,000 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 Greening will be through the three basic EU-wide measures, rather than any bespoke Welsh scheme there will be a minimum claim size of 5 hectares there will be a Pillar Transfer of 15% The new points to come out are outlined below. Agricultural Activity / Active Farmer The Active Farmer rules and those on Agricultural Activity (or eligible land) are inter-twined in the legislation. The minimum level of Agricultural Activity is defined as controlling non-native invasive weeds, keeping boundaries stock-proof, and providing a water-source for livestock. There will be minimum stocking rates on saltmarsh and coastal land dunes which fall into the category of ‘areas naturally kept in a state suitable for grazing or cultivation’. Interestingly, moorland does not seem to have been included in this latter category. it seems that heath and heather moorland will just be ‘Permanent Grassland’ – so only the requirements on weeds, fencing and water apply. The Active Farmer rule comes in two parts. The first applies if you have more than 50% of your land in ‘areas naturally kept in a state suitable for grazing or cultivation’. As this now only applies to coast land, it seems unlikely anyone will be affected. The second test is the ‘negative list’ which states that BPS will not be paid to operators of ‘airports, railways, waterworks, real estate services, or sports and recreation grounds’. The WG has decided not to add to this EU list. Theannouncement provides more detail on what the definitions under each of these categories are. But some of these are still a bit vague – for example sports grounds are ‘areas of land that have permanent fixtures for sport or recreational activities’. What about a horse cross-country course or the village cricket ground? Does this make the landowner a non-Active Farmer? We do not believe so, but it is not clear. Even if a claimant is ruled to be a non-Active Farmer they can still get the BPS if they can prove they have bona fide farming activity. There are three test that can be used to argue the case. The focus has been on the one that looks at whether the ‘agricultural activities are not insignificant‘. This is because the WG has had to define ‘not insignificant’, and it has decided that a third or more of total business receipts must come from farming. Whilst this looks testing, there are another two tests – and these look easier to pass. Therefore the Active Farmer rules do not seem much of a burden to most farms in Wales, even those that have diversified widely. Entitlements The WG will allocate new entitlements on the basis of land occupied in 2015. Although the allocation will be limited to those who claimed in 2013, there will be a derogation to allow those who were farming in 2013, but did not make a claim, to also get an allocation. Evidence of farming activity will have to be provided. No further detail is provided on the ‘mergers and scissions’ provisions, continuing businesses, or the transfer of ‘golden tickets’. Presumably this will come out in the detailed Scheme Guidance. The historical amount for each claimant will be based on the entitlements held in 2014, not those activated. This claims history will then be divided across all the entitlements established in 2015 to form the (declining) historical element of the new entitlement value. It has been decided that where someone has lost land since 2014 (through sale or a lease ending), there will be no clawback of the history through a ‘windfall profits’ clause. Therefore history can be concentrated down onto a small area for 2015. There will be no siphon on transfers of entitlements without land. There will be a ‘Technical Review Process’ for anyone who believes that land has incorrectly been put into the Moorland category. Rural Payments Wales (RPW) will be writing to all claimants providing them with provisional payment region allocations for their farms (no timescale has been indicated for this though). If farmers believe that Moorland has been improved (and thus falls into the SDA category), then they will have 30 days to make their case – providing photos and other evidence. This will be judged by RPW staff. If the amendment is not upheld, the claimant will be able to go to an independent appeals panel after producing a technical report. New Entrants / Young Farmers There will be a separate ‘National Reserve’ for each of the three payment regions. New Entrants and Young Farmers (40 years old and below) will be eligible for the National Reserve (as well as some other categories including force majeure). There will be no requirements on skills, qualifications or experience to get an allocation from the Reserves. Entitlements from the reserves will have the value of the estimated final regional average payment in 2019 – i.e. they will be fully regional from day one. The Young Farmers Scheme provides a top-up on the value of entitlements held. It has been decided to limit the top-up to the first 25 hectares worth of entitlements held. The top-up will be equivalent to 25% of the final (2019) payment rate. Therefore it will not necessarily be a top-up of 25% of the value of entitlements actually held. Greening The announcement states that, on greening, ‘....what mostly remains are decisions about Ecological Focus Areas (EFA)’. This is not quite the case in our view. For example, it has never been confirmed as far as we are aware, that the Retention of permanent Pasture rule is to be operated at a national level in Wales – although we are prettysure it is. Also, under Crop Diversification, the WG gives no guidance on how spring and winter crops are going to be differentiated – much like DEFRA at present. This detail may have to wait until we have the scheme Guidance. On EFA, it has been announced that the following land categories will be eligible in 2015; fallow land hedges and stone walls short rotation coppice (no inputs) afforested areas used to claim the SPS in 2008 nitrogen fixing crops The standard weighting factors and conversion rates set out in the EU legislation will be used (see June article on English EFAs for these). No details are provided on the management rules. This is particularly important for nitrogen-fixing crops – it is not clear whether there will be any restriction on input use on these. Fallow periods required, hedge definitions etc. are also still unclear at this point. Like most of these announcements, the extra information is welcome, but it just tends to prompt a further set of questions about the detailed application of the rules. We shall keep you informed of any additional information as it becomes available. The full written statement can be found via – http://wales.gov.uk/topics/environmentcountryside/farmingandcountryside/cap/pillar-1-direct-payments/?lang=en
