The current CAP program period runs from 2014 to 2020, This is scheduled to be the last in which the United Kingdom participates.The aggregate value of the schemes for England are £15 billion. Most of the payment is through the Basic Payment Scheme including the Greening payment and Young Farmer payment which together replace the Single Payment Scheme
There are approximately 100,000 farmers across England who receive payments under the single payment scheme .The Basic Payment Scheme commenced in 2015 . It is broadly similar to the single payment scheme . The total payment is made up of a .Basic Payment Scheme payment and a Greening payment with a top up payment for young farmers
In order to qualify for theBasic Payment Scheme, the farmer must be an active farmer have at least 5 ha of eligible land and have at least five BPS entitlements. A person may not be classified as an active farmer if his business includes certain businesses such as real estate services permanent sports and recreational grounds.
If more than half of the farmer’s land is naturally kept in a state suitable for cultivation and grazing,there are rules about agricultural activity that must be followed in order to be classified as an active farmer
As under the single payment scheme, it is necessary that the land for which a BPS payment is eligible throughout the year.Common land is eligible for BPS subject to conditions
The definition of a farmer for BPS is a person or group or business that does at least one of the following on his or her or its holding
- produces rears or grows agricultural products; this includes harvesting milking breeding animals and keeping animals for farming purposes
- keeps some land in a state suitable for grazing cultivation by keeping it clear of any scrub that can be grazed;
Farmers may make claims in respect of land at their disposal on the relevant date in each year (usually in May). They may be owner occupiers or tenants with a farm business tenancy under the Agricultural Tenancies Act 1995 or an Agriculture Holdings Act 1986 tenancy
The land is not available to
- somebody who is a contractor carrying out operations under the overall direction of the farmer
- persons farming under a licence
The following types of land can be eligible for BPS
- permanent grassland
- arable land
- permanent crops
The land must be used primarily for an agricultural activity. A certain degree of non-agricultural activity may be permitted such as walking bird watching fishing hunting. In other cases, the activities it is permitted for a certain number of days per year only.
It is necessary for a farmer to claim BPS entitlements The BPS payment is based on activating them against eligible land. At least five entitlements are necessary.
There are different types of entitlement depending on the type of land associated with them. In common with the earlier scheme, they broadly correspond with the severely disadvantaged area, moorland and SDA payments under the earlier scheme.
A person who was entitled to SPS entitlements became entitled to BPS entitlements on 1 January 2015. An active farmer may acquire BPS entitlements by transfer from another person. In some circumstances he may be awarded entitlements from the National Reserve
It was necessary to activate all entitlements in 2015 by declaring sufficient hectares of eligible land. It was not necessary to activate all entitlements in 2015 but if the farmer has more entitlements than eligible land, he might lose the excess entitlements. At least once in every two years he must activate all entitlements in a single year.
Entitlements can be transferred by sale, gift, lease inheritance or as part of a merger. The transfer is registered with the Rural Payments Agency.It is possible to sell or lease BPS entitlements to another person who is an active farmer. It is possible to lease entitlements separate to the land
If the BPS payment excluding the greening and young farmer payment is over €150,000 in a year, the payment above that level is reduced.By how much will depend on the proportion of the value of entitlements used in each part of the UK and the reduction rate that applies in that region. The rate in England is 5%.
Young Farmer and Greening Top Ups
Young farmer payments are available to persons under 40 years of age. In the first calendar year they apply for BPS they must be an active farmer and in control or joint control of their holding. They are eligible to receive a young farmer payment for up to 5 years after the initial year.
The value of the top up is up to 25% of the average value of entitlements which they hold . It can be claimed on up to a maximum of 90 entitlements.
There are new Greening payments as of 2015 . the farmer must comply with greening rules which require
- crop diversification which applies to farmers with more than 10 ha of arable land
- permanent grassland relative to agricultural area must not fall below 5%
- ecological focus areas.
Farmers with more than 15 ha of arable land must have ecological focus areas which must be equivalent to 5% of their total arable land. Areas and features may already be the subject of agri-environment schemes such as the environmental stewardship scheme.
The cross compliance requirements continue to apply. See the separate article in relation to cross compliance.
Elements of BPS
A farmers total BPS payments are made up of
- a main payment
- greening payment
- young farmer payment (in some cases)
Each part is calculated separately. They are then added together to yield the total payment.
BPS payments are based on the value of entitlements held including entitlements which new young farmers have received. The value of entitlements depends on the region namely
- severely disadvantaged area €171.83
- non-severely disadvantaged area €170.6
- severely disadvantaged moorland €45.07
The rate for conversion of pounds Sterling from euro is set annually
To calculate the value of an entitlement in each area region, the Rural Payments Agency divides the total BPS budget by the number of entitlements that exist for that region. It then calculates the farmer’s average entitlement value. It multiplies the number of entitlements the farmer has correctly used to claim payment for the region by the entitlement value for that region. It divides the figure by the total number of entitlements that farmer has correctly used to claim the payment.
The value of the Greening payment depends on the region in which the land is
- Non-SDA €76.19
- SDA €75.64
- SDA moorland €19.99
The RPA calculates the farmers’ average greening payment rate in a similar manner to the above.
To calculate the farmers main BPS payment, The RPA multiplies the number of entitlements used to claim payment by the average entitlement value
There are special rules for claiming BPS in respect of common land. This is based on the total area of each common, the number of livestock units declared and hectares allocated for livestock unit.
Other Elements / Adjustments
To calculate the value of the greening payment, the RPA multiplies the number of hectares of eligible area by the average greening payment rate
To calculate the young farmer payment, the RPA multiplies the farmer’s average entitlement value by 0.25. This young farmer rate is then multiplied by the number of entitlements to a maximum of 90. Effectively there is a top-up of up to a quarter.
There is a financial discipline mechanism. It does not apply to the first £2,000 of a farmers claim. The RPA applies the reduction to the total BPS payment first, not including the first £2000. The reduction is applied on a proportionate basis to the main payment greening payment and young farmer payment
If the farmer does not follow the greening rules the greening rate is reduced in accordance with the formula. The greening payment may also be reduced on another basis including ploughing environmentally sensitive permanent grassland without individual authorisation
Greening and Cross Compliance
The greening elements are dealt with in the article on Additional Payments.
Cross compliance applies to
- the basic payment scheme
- higher level stewardship
- countryside stewardship
- entry-level stewardship
- woodland management grant and
- farm woodland land premium elements of English woodland grant scheme.
There is a separate article of cross compliance.
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