Major changes loom for NI farm payment system

Major changes loom for NI farm payment system

Every hectare will attract the same support from the Basic Payment Scheme (BPS), instead of the current system – in contrast to farmers south of the border, subject only to convergence rather than full movement to flat rate, according to the Dept of Agriculture and Rural Development of Northern Ireland (DARDNI).

The government will increase in equal annual steps the unit value of BPS entitlements below the regional average by 71.4% of the difference between their initial unit value in 2015 and the Northern Ireland average, by 2021.

The greening payment is calculated as a percentage of the total value of BPS entitlements. Therefore, over time, the greening payment per hectare will also move towards a flat rate.

A top-up payment for young farmers will be based on 25% of the total direct payments regional average per hectare (about £84/ha).

It will be funded by 2% (the maximum possible) of the direct payments ceiling. The top-up payment per hectare for young farmers will be limited to 90ha.

A payment will be made in disadvantaged areas from Pillar II under the Rural Development Programme in 2016 and 2017 (for claims registered in the 2015 and 2016 scheme years respectively), and reviewed for following years (which would include the affordability of available options at that stage).

Eligibility conditions will remain as they are, but there will be no cattle bonus. Payments rates will be recalculated based on the new Rural Development Regulation.

It is hoped that a one-year transitional payment for farmers in the current disadvantaged area can be made (subject to State Aid rules) in 2015/2016. There are no plans for redesignation of LFAs before 2017.

How will the Single Farm Payment be affected?

The Single Farm Payment will be replaced by a new direct payment made up of a basic payment, a payment for greening (recognising the contribution of farms to the environment) and a top-up payment for young farmers.

What does ‘flat rate’ mean?

‘Flat rate’ means that all hectares of land in a region would attract the same level of support from the Basic Payment Scheme, instead of the current system where many different entitlement rates (per ha) exist within the Single Payment Scheme.

Member States can choose to move to a flat rate immediately in 2015 or in equal annual steps to move wholly or partly (converge) towards a flat rate by 2019, though each MS must achieve a minimum level of migration towards a flat rate payment by 2019.

Will farmers lose money through capping of payments?

Basic Payment Scheme payments to any given recipient will be capped at £150,000 per annum (100% reduction applied to amounts above this threshold). The greening payment, which will constitute 30% of the total payment ceiling, and payments under the Young Farmers’ Scheme, will not be subject to capping.

What is the new definition of an ‘Active Farmer’?

There is a provision in EU legislation adopted by the EU Commission on March 11, 2014, which states that “in line with the case law of the Court of Justice of the European Union, payment entitlements should be allocated to the person enjoying decision making power, benefits and financial risks in relation to the agricultural activity on the land for which such allocation is requested.”

This provision has particular relevance for land let under conacre arrangements.

In general terms, this means that in 2015, when all existing SFP entitlements are abolished and new entitlements established, then landowners renting out land in conacre will not be able to establish entitlements on that land. The principle being that where land is let, then the farmer actively farming the land will be the one claiming direct payments on that land.

In brief, it will generally be the case that if a landowner receives a rent for his/her land, the conacre tenant will obtain the benefit from the agricultural activity undertaken on that land. Therefore, the tenant should establish entitlements and claim payments in 2015. This means that it will only be in exceptional circumstances that someone who is renting land out in conacre will be able to establish entitlements in 2015.

Will farmers still have to adhere to cross compliance?

Yes. A range of statutory management requirements and standards on good agricultural and environmental condition of land will apply to claimants.

Will the UK/NI still get the same money?

The CAP budget agreed will see a fall in real terms over the period 2014-2020. This means that the UK has less CAP funding.

The UK will see an approximate 13% reduction in its Pillar I budget in real terms over the 2014-2020 period compared with 2007-2013. This equates to a reduction of around 2% in cash terms.

Northern Ireland will receive a Pillar I allocation of around 2,299 million over the period and a Pillar II allocation of £227 million. (Pillar II funding will be match funded by national funds).

The reduction at budget level does not translate automatically into the same reduction at individual farmer level. Due to the new schemes and content of the CAP agreement, which will see payments move towards a flat rate per hectare basis, most farmers will find that their financial support will change.

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