CAP reform - frequently asked questions
1. Is there any flexibility around the reference period?
If a farmer’s production was adversely affected during the reference period as a result of a force majeure or exceptional circumstances (e.g. FMD), then he can apply to have his historic payment entitlement calculated on the basis of those calendar years in the reference period which were not affected. If production was adversely affected for the whole reference period then a farmer can apply to have his entitlement calculated on the basis of 1997-1999 production.
Farmers whose payments were affected by the conditions of an agri-environmental scheme (e.g. ESA/CSS) will benefit from the same flexibility. In addition, if the scheme’s commitments covered both three year periods 1997-1999 & 2000-2002 then a farmer can apply to have an objectively calculated reference amount attributed to him.
2. What if I have bought or rented in some land since the reference period?
Entitlements relating to land let out or bought will remain with the outgoing farmer. If he does not continue to farm then they will revert to the national reserve.
There may be some exceptions to this rule but it is not clear at this time.
3. I sold land during the reference period. How will that affect my entitlements?
The value of the historic payment allocated to you will initially be based on the direct payments received during the reference period. There is the possibility of a claw back that could affect farmers who sold or let for more than 6 years all or part of their holdings during the reference period or before the date on which the Council regulation is adopted.
4. I bought/rented a farm in early 2002 and made a claim in only one of the reference years. How is my entitlement calculated?
As an existing farmer, you will probably be able to apply for additional entitlements from the national reserve.
As a new entrant your historic payment should be based on the average payments received during the years in which you were farming.
The above is still to be confirmed for both existing farmers and new entrants.
5. Change in business structure
If you were a sole trader and subsequently became a partnership during the reference period it is expected that the historic entitlement will be based on the payments received during the reference period whether they were claimed by you as a partner or by the partnership.
If you were a partnership and subsequently became a sole trader, it would appear that each new business would be entitled to a proportion of the historic element generated by the original business. How the historic element will be split has not yet been confirmed.
6. Cross-Compliance
This has been relatively ignored since the SFP Scheme was originally proposed and yet it will be the major determining factor as to whether you receive the SFP or not. What is cross-compliance? - Cross compliance will help increase the sustainability of agriculture and particularly the environmental performance of farmers by providing an incentive for them to meet a range of new and existing requirements. For the first time and as a condition of receiving the Single Payment, farmers will need to keep their land in good agricultural and environmental condition. This will set new standards for the protection and management of soils and will also help reduce damage to habitats and landscape features.
Overall cross compliance will deliver higher standards throughout Europe as compliance with EU rules is tightened up and a new standard for farmers and land managers to maintain land in Good Agricultural and Environmental Condition is developed.
7. How do I join the Scheme?
Firstly, it is not compulsory to join the new scheme.
In order to join it is essential to register your land in 2005 and fill out the SFP application form which will be broadly similar to IACS and is due by the 15th May 2005 deadline. If land is not registered in 2005 it will not be possible to join the Scheme. You either join from the start or you do not join at all.
You may register only part of your land but you will still need to comply with the requirements for land management on ALL of your land.
8. Final claims and payment dates:
- SAPS – Now complete – no further claims
- 2004 SCPS to 6.12.04 – retention being 6 months from the day following the date of application
- 2004 BSPS retention periods in 2005. Animals 5 & 18 months by 31.12.04 on 2004 claim form – retention starting at 7 & 20 months. Steers claimed on which are 5 months by 31.12.04 will not have a second claim in them as the BSPS scheme will have ceased by the time they reach 20 months
- 2004 AAPS claim will be on 2004 IACS form
- 2004 SPS – final claims by 31.12.04
9. Can I trade entitlements?
Yes, but they are ring-fenced within their region e.g. entitlements can not be traded between SDA & non-SDA land. There is also a minimum occupancy period of 10 months starting no earlier than 1st September of the year preceding the year of claim. This is to prevent more than one claimant using the same land for the purpose of the SFP.
NOTE THE ACTUAL COMMENCEMENT DATE OF THE 10 MONTH PERIOD HAS NOT YET BEEN DECIDED AND THIS ISSUE IS STILL AT THE CONSULTANCY STAGE.
As a result of the above, it is important to be careful of letting out land on short grazing agreements which might prejudice your claim to SFP.
Note that entitlements can be sold with or without land but must only be leased with accompanying land. Transfers can only occur without land once at least 80% of the entitlements have been activated, cumulatively, over a 3 year period.
There may be a siphon on transfers with amounts reverting to the national reserve.
10. Will there be help for small farmers?
All farmers are expected to benefit from the simplification of the CAP, from the new market opportunities it presents and the freedom to optimise production.
Small farmers will also get the benefit of the exemption of the first 5000 euros of subsidy from modulation.
11. Will I have to carry on producing after the start of the scheme?
No. As yet no minimum stocking requirements have been announced. Keeping the land in good agricultural and environmental condition is classed as an agricultural activity under the new scheme.
12. What about new entrants?
Farmers can sell or lease entitlement to others who will then receive subsidy if they farm a similar amount of land in compliance with the eligibility criteria. The opportunities for increased incomes, the reduction in bureaucracy and the freedom for market orientated farming which this CAP reform presents, all contribute to making farming a much more attractive prospect for those considering entering the industry. Member States may also use the national reserve to assist, amongst other certain cases, those new to farming.
13. What if we were affected by FMD during the reference period?
Farmers affected by FMD will be covered by the hardship provisions.
14. How will special (hardship) cases be dealt with?
In certain circumstances, and depending on the basis for allocation, special arrangements apply:
Those who started an agricultural activity during the reference period will have their entitlements calculated on the average number of the years (i.e. one or two) they were able to make a claim for that activity.
Those whose claims were affected by exceptional circumstance or force majeure (e.g. Foot and Mouth Disease), including those who entered an agri-environment agreement during the reference period, can apply to ignore the relevant years or, if necessary, have their entitlement calculated against an earlier reference period.
15. What about those farmers who participate in Countryside Stewardship or other agri-environment schemes?
Those farmers, who entered an agri-environment agreement during the reference period, can apply to ignore the relevant years or, if necessary, have an earlier reference period (1997 - 1999) used in calculating their entitlement. Those involved in agri-environment schemes pre-1997 will be handled on a case-by-case basis.
16. How will the National Reserve work?
A great deal of detail remains to be worked out in the implementing
rules. But, based on the Council Regulation, we can say the following:
It will provide an additional means of obtaining an historical element
to the entitlements a farmer is allocated in 2005 or entitlements in
subsequent years. Those eligible to apply will be defined after the Commission
implementing rules, have been agreed and any subsequent consultation
has been completed. We anticipate they may include:
i. new entrants
ii. those who bought land not later than 29 September 2003, which was
leased during the reference period, with the intention to commence
agricultural activity within one year of expiry of the lease;
iii. those who leased, between the end of the reference period and not
later than 29 September, for six years or more a holding whose lease
conditions could not be adjusted (e.g. negotiate a lower rent);
iv. "developers" who bought land or otherwise made investments
to increase production not later than 29 September 2003.
17. How will the National Reserve be funded?
The national reserve will be fed by:
i. a reduction in payments made to all farmers under the new scheme,
up to a maximum of 3%;
ii. the difference, if any, between the regional ceiling and the sum
of the entitlements allocated to all farmers;
iii. the value of an entitlement which is not claimed in its entirety
in 2005;
iv. the surrender of any entitlement that has not been claimed after
three years;
v. the surrender of any entitlement allocated from the national reserve
that is not claimed on in every year for five years
and may be fed by:-
vi. a siphon from those farmers who sold or leased for six or more years
a holding or part of it, or livestock quota units, during the reference
period or not later than 29 September 2003;
vii. a siphon on all sales of entitlements.
18. How is the SDA defined?
Severely Disadvantaged Areas are mostly those which were already receiving special support measures prior to the 1975 LFA Directive. They are defined on statutory maps that were last published in 1992. These can be accessed at http://www.defra.gov.uk/farm/capreform/implementation/impl01.htm
19. How will land prices be affected?
To be eligible for the Single Farm Payment, applicants will have to
be able to demonstrate that they are engaged in farming, or at least
keeping in good agricultural condition, an equivalent number of hectares
to that which established the entitlement.
This means that there are likely to be many farmers, including tenants,
with an entitlement who would need to find land to attach it to in order
to trigger payments. Therefore, a marked change in the value of land
is not anticipated.
20. Can I sell my entitlements and land separately?
Currently, this is permitted. It is not possible to determine what sort of market there will be for entitlements without land and it is not possible to say how the value of land will be affected by taking away its entitlement.
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