Latest update on the CAP reform

DEFRA has recently published its latest update on the CAP reform rules which surround the introduction of the new Basic Payment Scheme (BPS) next year.

There are still areas of uncertainty but the long awaited rules concerning hedges and how they can be used to contribute to a farmer’s “Ecological Focus Area” (EFA) requirement have been clarified.

Any farmer who has more than 15 hectares of arable land will have to “set aside” 5% of their arable land as an EFA. There are some exemptions to this rule for farmers with a high proportion of grass but if these exemptions do not apply farmers will have to incorporate the appropriate EFAs in to their farming system.

There are five different types of EFA:

1.Fallow land
2.Hedges
3.Buffer Strips
4.Catch crops and cover crops
5.Nitrogen fixing crop

It is the rules concerning hedges which have been exercising farmers’ minds in this area because they are an obvious ecological resource which many would like to use towards their EFA requirements and now the rules have been clarified in what appears to be a reasonably sensible manner.

Basically every metre length of hedge is to be regarded as providing 10 sqm of EFA and so farmers will need to measure the length of qualifying hedges on their land to calculate the deemed EFA area. But importantly DEFRA have also clarified the definition of what will be considered to be a hedge and which hedges will qualify as an EFA.

As far as the definition of a hedge is concerned, there are no maximum or minimum width or height limits but the hedge must be more than 20m long and there must be less than 2m from the ground to the lowest leaves. Gaps of up to 20m, including gateways are allowed in hedges.

However, not all hedges will qualify as an EFA. It is only those hedges which are on or adjacent to arable land in the farmer’s control that will qualify although hedges which are separated from the arable land by an ineligible feature under the BPS rules, such as a ditch of more than 2m wide or a hard track will not qualify. If the hedge is separated from the arable land by a fence only the hedge will qualify.

If the farmer is responsible for farming both sides of the hedge, even if one side is in permanent pasture, then the full 10 sqm per m length of hedge can be claimed but if the other side of the hedge is farmed by another farmer then only 5 sqm can be claimed. If the other side of the hedge is a road, the farmer can make a full claim.

Finally DEFRA had originally stated that using hedges to contribute to a farmer’s EFA requirements may result in a delay in the farmer receiving payment of the BPS in 2015. However, DEFRA have now said there may not be delays as they are looking into an ‘approach’ to prevent this. What this will be we do not know but it seems DEFRA are backtracking a little on their previous warning.

Therefore, although there is still plenty of work to be done before the first BPS claims can be made next year, some of the crucial detail is beginning to become clear.  

James Stephen MRICS FAAV
Partner
Rural Practice Chartered Surveyor, Wells
T: 01749 683381
E: james.stephen@carterjonas.co.uk

"Green Measures" will be introduced

Last week saw DEFRA announce the long awaited rules on Ecological Focus Areas (EFAs) which are part of the so called “Greening Measures” which will be introduced as part of the new Basic Payment Scheme (BPS) which replaces the existing Single Payment Scheme.

The Greening Measures will be worth 30% of a farmer’s support payment and in addition to the EFAs farmers will be required to observe rules on crop diversification and the retention of permanent pasture(at a national level) but it is the EFA rules which are causing most concern. This is because within a month or so farmers will be staring this year’s harvest and will be hoping to replant next year’s crops almost immediately but without knowing the EFA rules, this will be difficult.

In simple terms the new rules will require arable farmers with over 15 hectares of crops to “set aside” 5% of their land in to EFAs. The big question has been what these EFAs will involve and last week it became clear there will be five options. These will include land lying fallow, buffer strips, ‘catch and cover crops’ used to manage soil fertility and quality and Nitrogen Fixing Crops such as legumes and hedgerows.

The first option to leave land fallow is obviously costly for farmers in terms of loss of income and the government are also concerned about the loss of production at a time when we have falling rates of self sufficiency of home grown food. However, this is a straightforward and relatively easily monitored prescription.

The ease of administering the new system and proving to Europe that we have systems in place to monitor claims and payments is a real concern to the Rural Payments Agency, being the body charged with delivering the BPS. They remember the disaster that engulfed them when the Single Payment Scheme was introduced in 2005 and they do not want to see anything like that happen again.

Therefore, the inclusion of hedgerows as an EFA will no doubt be of concern to the RPA because in order to monitor this they will effectively have to digitally map every hedgerow which will be an enormous task between now and 1st January 2015 which is the start of the new BPS.

As a result DEFRA have warned in there press release that, “ To ensure that the RPA can process all claims accurately, farmers taking the hedgerow option may be requested to submit claims earlier and may need to expect payments later. This is because hedgerows will need to be digitally recorded and verified by the RPA to meet EU requirements and avoid the risk of penalties for farmers or the taxpayer”.

So, although matters have been clarified I think it will take a little while before the implications of the new EFA options are fully understood although the clock is ticking and farmers will need to make a decision on which prescriptions they intend to employ to within the next few months if they are not to jeopardise 30% of their agricultural support payments next year.

James Stephen MRICS FAAV
Partner
Rural Practice Chartered Surveyor, Wells
T: 01749 683381
E: james.stephen@carterjonas.co.uk

The last year of the Single Payment Scheme

This year is the last year in which farmers will receive EU support via the Single Payment Scheme and the deadline for completing this year’s application is beginning to loom on the horizon. This process should be reasonably straightforward provided there have been no major changes in the area of land being farmed but the impact of the reforms to the support system which will come in to force next year, need to be considered now.

This is because the new scheme, which will be known as the Basic Payment Scheme (BPS), includes new rules relating to so called “greening measures” which will need to be complied with in order that the farmer receives the payments in full. To the uninitiated the rules may seem reasonably straightforward, but in practice they are complicated and small changes in cropping patterns can have a major effect on whether or not the greening measures come in to force.

In simple terms the greening measures involve two main elements. First there is a requirement to introduce various levels of crop diversification if you farm over 10 hectares of arable land and second one has to introduce “ecological focus areas” (EFAs) amounting to 5% of your arable land if one farms over 15 hectares of arable land.

However, it is not as simple as that in that there are also a raft of exemptions which relate to the area of temporary or permanent grassland and how this area relates to either the total area of the farm or the arable area of the farm. These exemptions significantly complicate the application of the new scheme, particularly on relatively small mixed farms, many of which exist here in the West Country.

As a result farmers need to prepare themselves this year so that they know what crops need to be planted and in what proportions this autumn so as to be able to comply with the new rules.

As an example, last week I analysed one client’s cropping pattern and discovered that if he retained one particular field in grass next year rather than planting it to a crop, he could avoid both the crop diversification and EFA rules. If on the other hand he was to plant a crop in the land, my client would have had to comply with both the crop diversification and EFA rules.

What this means is that farmers need to plan carefully now for next year so as to minimise the impact of the new rules on their farming system, otherwise a relatively small change in cropping pattern could have a significant impact on their ability to comply with the new scheme rules next year and hence receive their support payments.

James Stephen MRICS FAAV
Partner
Rural Practice Chartered Surveyor, Wells
T: 01749 683381
E: james.stephen@carterjonas.co.uk