CAP ReformDirect Payments – 3 sectionsAn Introduction to the Basic Payment Scheme, Greening Payment and Young Farmers’ Payment

CAP Reform – Pillar 1

Eligibility of the LANDEligibility of the PERSONEligibility to establish and hold ENTITLEMENTS

Part 1. The Basic Payment Scheme

The Basic Payment Scheme

Goodbye Single Farm Payment Scheme

Hello to the Basic Payment Scheme, a Greening Payment and a Young Farmers’ Payment.

The LAND - Entire holding must be declared including land taken in conacre. Non-declaration of land can lead to penalties.

The PERSON - Active farmer only will have the right to establish entitlements and receive payments for it.

Basic Payment Scheme Eligibility Criteria

To be eligible for the Basic Payment Scheme, applicants will need to comply with all of the eligibility criteria. These include:

• Person - Active farmer;

• Land - at least 3 hectares of eligible land at their disposal on 15th May 2015 (land claimed must also be eligible throughout the calendar year);

• Entitlements - they must be eligible to establish at least 3 entitlements.

Land Eligibility Criteria - Overview

To be eligible for the Basic Payment Scheme, declared land needs to meet all of the eligibility criteria. Fields must :

• have an eligible area of at least 01.ha

• have eligible vegetation and be in agricultural use

• be kept in a state suitable for grazing or cultivation and

• have agricultural activity carried out over the entire area being claimed on a significant and consistent basis in the calendar year of the claim.

CLAIM CAREFULLY!

Cross Compliance

Cross compliance rules will still have to be adhered to.

• There will be some changes and renumbering of the current rules, but they will be broadly similar.

• Nitrates Action Plan measures have also been updated from 1 January. There are some changes so you should check what

these are.

• There will be new guidance for 2015.

 

Entitlements

An entitlement is a right to claim aid under the Basic Payment Scheme when associated with a hectare of eligible land

 

It is attached to the person/business not the piece of land

Establishing entitlements on an area of land does not mean that you will always be able to claim entitlements on it

In future claims the land used to claim the Basic Payment can be completely different to the land that was originally used to create the entitlements. It can be owned, leased or taken in conacre

Establishing entitlements in 2015

Existing entitlements were cancelled at the end of December 2014

Farmers can establish new entitlements in 2015 if they:

• were in receipt of SFP in the 2013 scheme year (prior to the application

of any penalties) enabling them to activate at least €100 of payment entitlements;

• are the Active farmer;

• have at least 3 hectares of eligible land at their disposal on 15th May 2015 (land claimed must also be eligible throughout the calendar year).

Land let under conacre arrangements

The person who is taking the land in conacre will be the one eligible to establish entitlements and claim payments on this land in 2015.

 

If there are exceptional circumstances which lead the landlord to believe that he or she can meet the active farmer requirement even though the land is let out, then it will be up to the landlord to demonstrate these circumstances.

Alternative ways to establish entitlements

Farmers not in receipt of SFP in the 2013 scheme year can also establish entitlements in the following scenarios:

• If they never held SFP entitlements but can provide verifiable evidence of agricultural production activity on 15th May 2013;

• By applying to the Regional Reserve;

• By using a Private Contract Clause.

Alternative ways to establish entitlements

• If they never held SFP entitlements but can provide verifiable evidence of agricultural production activity on 15th May 2013;

• Claimants will have to provide some information about the type of

farming they are undertaking, for example,

Beef

Dairy

Sheep

Other - In this case, additional evidence will have to be provided

Private Contract Clause

Private contracts allow farmers, in certain circumstances, to enter into a legal agreement to either:

• allocate the right to establish BPS entitlements to another farmer that they have leased or sold land to; or

• transfer the corresponding BPS entitlements where they have sold land to farmer

Further details are available on the Q and A on the DARD website: www.dardni.gov.uk/qa-for-farmers-landowners-on-changes-to-sfp-from-2015-revision-11.pdf

What will an Entitlement be worth?

The value of new entitlements allocated in 2015 will be derived from the value of SFP entitlements held on 15th May 2014 (i.e. those held for the 2014 scheme year), including any entitlements purchased prior to 2nd May 2014.

Various reductions will be applied and the resulting total value of entitlements will be divided by the eligible area declared in 2015 to give the initial unit value.

Entitlement Value

UP

The initial unit value of entitlements below the regional average will be increased by 71.4% of the difference between their initial unit value in 2015 and the regional average by 2019.

DOWN

For entitlements above the regional average, a linear decrease will be applied to the difference between the initial unit value in 2015 and regional average by 2019. The size of the linear decrease is likely to be close to 71.4%.

The transition between 2015 and 2019 will take place in equal annual steps and is consistent with achieving a flat rate payment by 2021, i.e. a seven year transition period.

Active Farmer – Negative List

EU legislation stipulates that from 2015, no direct payments shall be granted to those who operate:

airports, railway services, waterworks, real estate services, permanent sport and recreational grounds.

This is also known as the negative list.

These types of businesses will be prohibited from receiving payments unless they can submit evidence to demonstrate their eligibility for payment on or before 15 May 2015.

This requirement does not apply to businesses which received direct payments (SFP) not exceeding €5,000 (prior to the application of penalties) in the 2014 scheme year.

Active Farmer

• their agricultural activities are not insignificant (agricultural activities are not insignificant if the eligible agricultural area of the farm business, as declared on the application form, is at least 26 ha)

• their principal business or company objects consist of exercising agricultural activity (agricultural activity will be considered as the principal business or company object if receipts from agricultural activities represent at least 40% of total receipts of the business in the most recent fiscal year for which evidence is available)

A minimum claim threshold of €5,000 has been set when applying the test (i.e. those businesses claiming below this threshold for the previous year would not be subject to the test).

Active Farmer - make sure • Decision making power, benefits and financial risks in relation

to the agricultural activity on the land being claimed for;

• DARD wrote to all SFP claimants in March 2014 to highlight this requirement for 2015;

• Extended the entitlement trading deadline – some 12000 trades;

• Issued a further letter to 7200 claimants whose DARD records indicate that they may not be able to meet the active farmer requirements for 2015;

• Compliance checks will be carried out in 2015 and all subsequent years

Basic Payment - Controls

The Department will continue to carry out inspection controls to ensure compliance with the rules. These include;

• On the Spot Checks• Control with Remote Sensing• A range of Administrative checks

Basic Payment – key points to remember

• New entitlements - Under the basic payment scheme a new set of payment entitlements will be allocated to farmers who apply to and meet the eligibility conditions of the scheme.

• Active farmer - one of the key conditions is that entitlements will allocated only to the person having decision making power, benefits and financial risks in relation to the agricultural activity on the land for which such allocation is requested.

• Land eligibility – generally similar to SFP and requires close checking of LPIS maps

Part 2. Young Farmers’ PaymentAn educational qualification provides both an incentive and a reward for young farmers and will assist in the development of a well skilled and professional industry.

Young Farmers’ Payment

The Young Farmers’ Payment provides a top-up payment to the Basic Payment for those qualify who as a young farmer.

The Regulations define young farmers as those who:

Are setting up for the first time an agricultural holding as head of the holding, or who have set up such a holding during the five years preceding the first submission of an application under the Basic Payment Scheme; and

Are no more than 40 years of age in the year of first submission of their application. i.e. A farmer who turns 41 at any time during 2015 will not be eligible.

Young Farmers’ Payment

The Young farmer must be Head of Holding, exercising effective and long-term control over the business in terms of decisions related to management, benefits and financial risks.

Young farmers must have established and activated payment entitlements under the Basic Payment Scheme.

Young farmer applicants must also have at least a Level II qualification in agriculture (or a related subject containing at least a farm business management module).

Young Farmers’ Payment

Single member businesses – Head of Holding is the member

Multi member businesses or 50:50 partnerships - between a young farmer and a person(s) who is/are not a young farmer will only be acceptable if it is clear that the young farmer can make decisions without veto from the other partner(s).

Where 50:50 partnerships currently do not meet this requirement, it is possible for the partners to agree to modify the partnership to either include a provision whereby the young farmer can take decisions without veto or increase the share of the young farmer above 50%.

Young Farmers’ Payment

The Young farmer will be regarded as head of holding for the purposes of the Young Farmers’ Payment from the date at which the partnership complies with the requirements.

Where there are several young farmers and other persons involved in the business, then it must be clear that young farmers can control the business – only 1 payment per business.

The top-up payment will be for a maximum period of 5 years but that period will be reduced by the number of years elapsed between the setting up as head of holding and the first year of application.

Young Farmer Payment – key points to remember

• Young farmer requirements –

• Age

• Educational qualification

• Head of Holding - it is essential that young farmers meet the head of holding criteria

• Basic Payment Scheme - must be eligible to establish and activate payment entitlements under the Basic Payment Scheme

Young Farmer Payment - Controls

DARD will;

• Put robust controls in place to prevent the creation of artificial

conditions to gain access to this support

• Have a penalty system in place which can be used where

fraudulent activity is identified.

Regional Reserve

The Regional Reserve will be used to allocate entitlements to the following groups:

• young farmers, • new entrants, and

• those that were prevented from being allocated entitlements as

a result of force majeure or exceptional circumstances.

Young Farmers/New Entrants must also apply to the BPS if applying to the Reserve

Regional Reserve

• Young Farmers/New Entrants must – have a Level II Qualification

• Young Farmers must –

• be under 40 years of age• be setting up or have set up in the last 5 years as head of

holding

• New Entrants must –

• have commenced activity in 2013 or later• have applied to BPS/Reserve within 2 years of commencing • not have had any activity in own name/risk in previous 5 years

Regional Reserve

Evidence required to support applications from Young Farmers/New Entrants is likely to be similar to that required for the Young Farmers’ Payment except New Entrants will not have to provide evidence of age.

Young Farmers/New Entrants can apply for allocation of entitlements or to have the value of existing entitlements increased to the regional average value.

Young Farmers/New Entrants can only apply once to the Reserve

Further information to be available at the end of this month

Part 3. Greening

Greening forms an integral part of CAP reform focusing on introducing farming practices that are beneficial for the climate and the environment.

Greening

From 2015, it will be mandatory for applicants to the Basic Payment Scheme to comply with greening requirements.

If farmers do not establish any Basic Payment Scheme entitlements, they will not receive the Greening Payment.

In Northern Ireland, the vast majority of applicants will meet their greening requirements either :

• through having less than 10 hectares of arable land (be aware of how conacre land was classified in the past); or,

• having at least 75% of their eligible agricultural area in permanent grassland or temporary grassland.

Greening Payment

Greening payment calculated as a percentage of the totalvalue of entitlements activated by claimants each year. For the first two scheme years (2015 and 2016), sanctions for noncompliance with greening requirements will result in a reduction in thegreening payment which may be substantial.  From 2017, additionalpenalties will be applied.

CHECK YOUR GREENING REQUIREMENT AND UNDERSTAND WHAT YOU NEED TO DO TO COMPLY 

Proposed Areas of Natural Constraint (ANC) Scheme to replace LFACA Scheme • Similar eligibility conditions as the current LFACA Scheme but no cattle bonus – subject to EU Commission approval

• Proposed that only SDA will be eligible for payment from 2015

• If agreed, will initially last for two years • Payments must be degressive (i.e. the rate paid per hectare falls as the area of eligible agricultural land claimed increases)

• Intention to have phase out payment to DA in the first year

Environmental Farming Scheme (EFS)

Three levels are planned:

• A targeted level – primarily for land in environmentally designated sites;

• A wider level – to deliver benefits across the countryside, outside of environmentally designated areas; and

• A group level – to support co-operative action by farmers in specific areas such as a river catchment or commonages.

Proposed Farm Business Improvement Scheme (FBIS)

• The scheme will provide education, knowledge and skills and capital investment to improve the competitiveness of the agri-food industry.

• Early focus will be on making advice and support available to farmers to help them identify their needs clearly and make the right decisions about developing their business.

• Targeted capital support to farmers to invest in their farm businesses to improve profitability.

•

Further information

Further information on CAP reform is available on the DARD website on www.dardni.gov.uk

If you have a specific query you can call the DARD Grants and Funding Helpline number: 0300 200 7848

If you have queries regarding Greening you can contact DARD by using the following email address: greeninghelpline@dardni.gov.uk

Basic Payment – Apply online.

Although you can still apply on paper from 2015, we would much prefer to receive your application online

You can help us by using our Single Application online service

Why use online?

Its easy to use, safe, fast, provides access to the most up to date information we hold, no queuing or posting, instant receipt of application.

You will also have access to our improved map service so you can view, print and report any map changes to us.

DARD Public Consultation on primary communication channel.

DARD are carrying out a Public Consultation on the proposal to move to the use of online as the primary channel for communicating and transacting with its customers.

• We want to know what you think about our proposals, how they affect you and the best way we can do this.

• Adverts will appear in your local press and in your local DARD Direct Offices in February and March and we would welcome your views and feedback on this proposal and how it affects you.

CAP Reform – Pillar 1

Thank you and remember...

Eligibility of the LAND

Eligibility of the PERSON

Eligibility to establish and hold ENTITLEMENTS