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The EU announced yesterday (12 October 2011) the draft regulations for the new Common Agricultural Policy.

This starts a long process of negotiation and the current intention appears to be that the new scheme will commence on 1 January 2014.

In Tony Rimmer of Rostons opinion, this timescale seems somewhat optimistic, particularly when one considers in the Lisbon Treaty the European Parliament now has a place at the negotiation table.

From 1st January 2014 a new multi-layered payment is to be introduced with a completely allocation of entitlements.

This will comprise the following;

  • Basic Payment – which will be the underlying income support
  • “Greening” – A mandatory additional payment of 30% of the annual national ceiling for farmers who deliver agricultural practices beneficial for the climate and the environment.
  • Young Farmers Scheme – An additional area based payment for a maximum period of 5 years and up to 2% of the annual national ceiling may be used to finance it.
  • Small Farmers Scheme – A simplified scheme which can take up to 10% of the annual national ceiling and a lump sum is proposed.
  • Areas of special National Constraints – a voluntary annual area based payment which can be up to 5% of the annual national ceiling.  This effectively will cover our less favoured areas.
  • Other Areas – that are likely to cause difficulty as the new scheme comes closer is the new definition of active farmer, the fact that farmers will need to apply for allocation of entitlements in the first year of the scheme, which is currently 2014.  However, entitlements will only be allocated to farmers who activated at least one payment entitlement in 2011 and can meet the active farmer definition.
  • Capping – This will apply rather like a tax between payments of €150,000 and €300,000.  The interesting thing on this is that the draft regulations propose that this will only be done after deducting salaries effectively paid and declared by the farmer in the previous year.

Much detail will follow but these are the initial take on the proposals from Tony Rimmer of Rostons who has considerable involvement in the North West on Single Farm Payment when it was introduced in 2005.

If you require further information, please contact Tony Rimmer of Rostons.