Common Agricultural Policy - new scheme announced

Political settlement was reached in June 2013 on the reform of the Common Agricultural Policy (CAP). With most of the detail now agreed, we have a good idea of what the new scheme will look like.

The amount spent on CAP in Europe is set to decrease by about 10% and a new scheme will replace the current ‘single payment scheme’ from January 2015.  The new scheme will be known as the ‘basic payment’ scheme.

To qualify for entitlements under the new scheme claimants must:

• be an active farmer and “have eligible land at their disposal”
• be able to match eligible land to the number of entitlements claimed
• have received a payment under the single payment scheme in 2013
• have a minimum holding size (this is likely to increase from the current 1 hectare to 5 hectares in 2015)

New entrants to farming, a small farmer scheme and a young farmer top-up grant are new editions to the proposed scheme.

Agricultural subsidy payments to large claimants will be reduced. Direct payments to farmers of over €150,000.00 (£125,610.00 at the rate prevailing on 30 September) will be compulsorily reduced by at least 5%.  However, salary costs can be taken into account before any deductions apply.

A major change will be the requirement for farmers to carry out “greening” measures in order to qualify for payments. These include:

• maintaining permanent grass land
• crop diversification
• creating ecological focus areas

While some farming organisations are unhappy about these changes, others view it as good news for the wider rural economy and the environment as a whole.

If you have a matter you wish to discuss, please contact a member of our agriculture & estates team.