A potential financial boost for young farmers arises from the CAP reforms. This month DEFRA will start issuing information on how new and young farmers could qualify for new Basic Payment Scheme (BPS) entitlements. Young farmers might also be eligible for top-up payments worth up to 25% of the current average value of their entitlements.
DEFRA says that up to 3% of the total BPS budget has been earmarked to set up a ‘national reserve’ in 2015 that will create entitlements for new and young farmers in England (Scotland, Wales and Northern Ireland will each set up their own). The Rural Payments Agency will allocate the entitlements according to the amount of eligible land farmers declare on their 2015 Basic Payment Scheme application and their current entitlements.
Farmers will also have to meet other criteria too. They must be the person in control of the farm, who is exposed to the potential financial risk; they must be classed as an ‘active farmer'; they must have at least five hectares of eligible land ‘at their disposal'; be at least 18 years old; and be able to provide evidence to prove themselves as ‘young’ or ‘new’.
A further 2% of the BPS budget will be available to support young farmers who have taken control of their farm in the past five years. All those meeting these criteria will receive a payment but the amount depends on how many apply. It is expected to be worth up to an extra 25% on a maximum of 90 entitlements. Applications must be made by 15th May 2015 and farmers will need to apply each year as part of their BPS application.
In any business, the early years can be particularly challenging so the extra CAP support offered to new and young farmers at this crucial stage is welcome. It is vital to the future of UK agriculture to attract new generations of talented, entrepreneurial people who can see the opportunities farming offers as a long-term career, so this approach is definitely a step in the right direction.
Farmers must meet a number of requirements and digest some complex information in order to qualify, so I hope that this will not put them off applying for the scheme; it could prove extremely valuable to their business. Having access to the right advice can also make a significant difference to new and developing farm businesses, so working with professional advisers who are experienced in the agricultural sector is a sensible step to help maximise the value of CAP payments and the efficiency of farm finances.
• John Thame leads the agriculture and property team at Ellacotts LLP, chartered accountants and advisers and chairs the UK200Group’s agricultural special interest group.