Stiff opposition to reforms
But all member states are likely to oppose Frans Fischler's controversial proposal that direct payments on land sold in 2003 are lost to a National Reserve, becoming unavailable to either the buyer or seller.
It is also proposed that if a farmer retires in 2003, the retiring farmer or the successor would not be entitled to direct payments, which would go to the National Reserve. In such a case, the successor would have to request entitlements from the National Reserve. This point is also likely to be opposed by a lot of member states.
These proposals figure prominently in the hundreds of meetings between member states and the European Commission at which the CAP plan will be qualified, clarified and changed, with different sections ultimately accepted or rejected by EU ministers.
At the centre of the proposal which could throw the land market into chaos is the decoupling of land from premiums, which is central to the CAP mid-term review.
The base for these decoupled direct payments which would be in place next year, if Commissioner Franz Fischler got his way is proposed to be the numbers of animals and hectares claimed on average in 2000, 2001 and 2002, multiplied by the rate of premium or arable aid in 2002. This would give a total direct payment entitlement for each farmer, which would be converted to an average entitlement per hectare by dividing by the average number of hectares included in the area aid application forms for the three base years.
These entitlements can be claimed by the farmer as long as the farmer remains in agricultural production and satisfies proposed cross compliance requirements.
To claim the full entitlement, the farmers must farm the same area of land used to establish the entitlement. If less land is farmed, proportionally less will be paid. The payment will equal area farmed in hectares multiplied by the average decoupled payment per hectare.
Milk direct payments can be added to the other direct payment entitlements, based on the milk rights established when they are introduced, except where the dairy farmer did not apply for area aid in the 2000/02 period.
It is proposed that the direct payments become transferable with or without the land, or can be leased with the land.
A national reserve equivalent to 1% of direct payments is proposed. Any direct payments not used would go into the Reserve. If a direct payment is not claimed for five years, it would be claimed by the National Reserve.
In general, new entrants would have to seek direct payment entitlements from the National Reserve. However, the Reserve is likely to have limited amounts of entitlements to distribute.
If a farmer buys payments rights worth Y euro per hectare, they cannot be added to the existing average entitlement the farmer has of X euro per hectare, to increase that average. What is proposed is that the farmer would have rights with two different values for different land areas.
Likewise, if a farmer leases entitlements with land, the rights remain separate from his own average direct payment per hectare, and the farmer/lessee would claim the leased payments only while leasing the land.
Hardship cases where farm production was affected in the 2000/02 period by force majeur or exceptional circumstances would be provided for by excluding the affected year or years. If all years from 2000 to 2002 were affected, an option exists to calculate rights based on the 1997 to 1999 period. Hardship circumstances include death or long-term professional incapacity of the farmer, severe natural disasters, accidental destruction of livestock buildings, disease.
Decoupled ewe premia in non-disadvantage areas and slaughter premia paid without area aid applications are proposed as special entitlements that are to be transferred through inheritance only.
The area eligible to draw decoupled payments is proposed as forage area plus potato, fruit and vegetable areas. It appears that eligible land will have had to have been part of an area aid application in the 2000 to 2002 period.
Some auctioneers, notably in the UK, have moved to protect land buyers by inserting CAP reform-proof clauses in sale agreements.
