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CAP reform proposals remain full of imponderable problems

By Western Morning News  |  Posted: February 06, 2013

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We gradually move closer to a CAP reform, although odds are already being offered as to whether an agreement will be reached for this to be in place even by 2015.

Over the last couple of weeks the European Parliament's Agricultural Committee has been voting on the Commission's original proposals. Patterns are beginning to appear, but as always when looking at this the watchword is that the devil is in the detail and usually the detail is not available until the end of the whole process.

The next step is for the EU Parliament to vote on these revised proposals while simultaneously Member States give their comments to the Council. There will then be a tripartite negotiation between the Presidency of the Council, the Parliament and Commission.

Then there is also, of course, the EU budget to be agreed, perhaps this month or March, with everything else to be agreed by June.

However this seems a most optimistic timetable bearing in mind the extra number of Member States, and the added involvement of the Parliament since the CAP was reformed last time. With numerous pages of text and thousands of suggested amendments voted on by the committee but not yet published (hopefully we shall see this in the next few weeks) current reports suggest the following:

The MEPs were in favour of capping support at euros 300,000, and reducing payments from euros 150,000 upwards. Also, and crucially for Wales, Scotland and Northern Ireland, MEPs backed a more gradual move to area-based payments from the current historical-based system.

In terms of greening, farms with less than 10 hectares of arable could be exempt from the new greening rules altogether while farms with arable area between 10 and 30 hectares will have to grow at least two different crops (neither covering more than 80% of the land) and arable farms larger than 30 hectares will be forced to grow at least three different crops (each covering no more than 70% of the arable area and with no two crops covering more than 95% of the arable area).

Another amendment to the greening proposals approved by MEPs is that only 3% of farmland will need to be set aside to establish Ecological Focus Areas rather than 7% as was originally proposed. This may increase to 5% and then 7% from 2016 and 2017 respectively.

Other elements that have been approved by MEPs include giving Member States the option to link 15% of support to production and to move up to 15% of direct aid from Pillar 1 to Pillar 2 (rural development measures).

Also while Member States will have the final say on what defines an "active farmer," the general principle seems to be that claimants will need to prove that farming forms a significant part of their business.

Also approved was a compulsory scheme for young farmers to which Member States will allocate 2% of the national envelope and also an income-stabilisation tool providing compensation to farmers who have suffered a severe drop in income. While milk quotas will come to an end a new "supply management tool" (milk quotas!) could be introduced to help counter any temporary imbalance in the milk market.

We are still awaiting confirmation as to whether the following proposed amendments have been accepted by MEPs:

A list of entities that will not be eligible for direct payments is likely to include transport companies, airports, real estate companies, companies managing sport fields, campsite operators and mining companies, unless they can prove they are active farmers.

The option for Member States to decide to "roll on" existing entitlements where flat-rate systems are already in place rather than re-allocating entitlements at the start of the new Basic Payment Scheme (BPS), which would leave Wales, Scotland and Northern Ireland re-allocating, with England most likely allowing existing entitlements to roll on.

Eligibility for BPS allowing a greater period within which farmers must have activated entitlements. This was previously just for 2011, but an amendment was proposed which would mean that activation in either 2009, 2010 or 2011 would be sufficient

A restriction that would mean the ability to transfer the right to receive entitlements (the "Golden Ticket") could only be transferred to "the farmers receiving the holding or part of it."

A proposal that the active farmer "must have been engaged in agricultural production activity in 2011". As it stands it appears someone could comply under the first part of the eligibility test by having claimed Single Payment in 2009 or 2010 but still not qualify as they were not an active farmer in 2011.

No doubt all will become clear in due course.

Hugh Townsend, FRICS, FAAV, FCIArb. is the land agent/surveyor expert for the WMN Farming section and he may be contacted on 01392 823935 or htownsend@townsendcharteredsurveyors.co.uk.

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