CAP implementation in Scotland – latest

Further details of how the new Common Agricultural Policy (CAP) will be implemented in Scotland have been set out by Rural Affairs Secretary Richard Lochhead.

The new CAP is the most radical reform of rural funding in a generation and comes into effect from January 1, 2015. In today’s update, Mr Lochhead has revealed how the Scottish Government intends to:

> use flexibilities won in Europe on the National Reserve to benefit farmers frozen out under the old CAP, who will receive basic payments at the regional average from day one of the new system.
– provide the best possible support for Young Farmers (defined by Europe as being no more than 40 years of age in the year of application) by choosing to pay basic payment top-ups on the maximum number of hectares allowed by European regulations, and in such a way as to maximise these top-up payments
– take action to put an end to so-called ‘slipper farming’ through implementing the Scottish clause on minimum activity rules. These will require active management on all rough grazing land – the type of land used in the past for slipper farming – if it is to qualify for CAP payments. In the case of active management by grazing, there will be a choice of meeting a minimum stocking density or undertaking other annual activities
– further limit slipper farmers by opting for the windfall profit clause, which stops historic payments from being temporarily maintained on a new, smaller area of eligible land, and the siphon on the sale of entitlements without land, which should discourage the trading of entitlements for the purpose of subsidy-chasing by reducing their value.
– publish information on the likely payment rates for the new Scottish Rural Development Programme (SRDP) on the Scottish Government website. The SRDP is currently with EU for approval, and a further update is expected later this year.

It comes as letters are sent to every farmer and crofter in Scotland explaining how cuts to the Scottish Government’s CAP budget will affect 2014 Single Farm Payments (SFP).

Rural Affairs Secretary Richard Lochhead said: “The new CAP to be implemented in 2015 is radically different to the existing policy. As well as big changes to the way farm funding is paid, we are also having to deal with cuts to Scotland’s CAP budget which take effect in this financial year. As a result of the dreadful deal negotiated by the UK Government, Single Farm Payments in Scotland will be reduced by an average of 12 per cent compared to last year. This reduction would have been halved if Scotland had received the €223 million convergence uplift that is rightly ours, substantially lessening the financial blow to our hard-working farmers and crofters.

“Our extremely challenging CAP budget is precisely why Scotland’s support package from 2015 is designed to target genuine farming activity and provide a fair deal for those disadvantaged under the current system.

“For example, I have chosen to regionalise payments in Scotland and my officials have recently written to farmers and crofters to let them know which of the three new CAP payment regions we think their land falls into. Anyone with any queries about their allocation should contact their local RPID area office as soon as possible. I have also put more of our budget into coupled support payments for beef and sheep producers and I am taking firm action against slipper farming through implementing the Scottish Clause and other measures available to me.

“We have already won flexibilities in Europe for a National Reserve that goes beyond the mandatory categories of Young Farmers and New Entrants. Thanks to our success in the negotiations last year, past new entrants all the way back to the reference period for the SFP – hardworking farmers who were wholly or partly frozen out under the old CAP – will receive basic payments at the regional average from day one of the new system.

“This approach will immediately address the unfair treatment faced by hundreds of farmers over the past few years, whilst respecting the strict conditions contained in the EU regulations. It will honour my commitment to give new entrant farmers fair treatment from day one of the new CAP.

“We are also providing best possible support for Young Farmers, who will be able to claim top-ups to their basic payment on the maximum number of hectares allowed. We will also pay out on the best land first.

“Of course, all farmers disadvantaged under the old CAP will be eligible to apply for the full allocation of other elements of support such as Greening and coupled support, which are the same for all farmers, as well as SRDP funding, our proposed rates for which will shortly be published on the Scottish Government website.

“Europe promised a simpler CAP but this has not materialised and there can be no doubt that what we have is extremely complex.

“The Scottish Government has a strong track record in making farm payments on time or ahead of deadline – with typically 90 per cent of farmers receiving their SFP by the end of December – and that is what we are aiming for this year.

“For 2015 onwards, the Futures Programme remains on track to give us a new online system for CAP in Scotland, called Rural Payments and Services, that will deliver nearly £4 billion of support to our farming, food and rural sectors in the next five years alone. Under the new, more complex CAP, we will aim to pay as early as we can in the payment window set by Europe and will keep the implementation timetable under constant review to ensure farmers receive their payments.

“We are continuing to provide farmers and crofters with as much information as we can about the new CAP, for example on the Scottish Government website and through the dozens of roadshows we are currently staging across the country.”

NFU Scotland Chief Executive, Scott Walker, commented: “The historic basis of the payment received by farmers has divided the industry and created injustice and anomalies. A condition of having a transition from the historic payment system to the new area payment system was a national reserve that catered for businesses disadvantaged and left behind by the historic payment system.”

“What has been announced today doesn’t address all the issues we have taken to the Scottish Government. However, there has been movement by Government in the last few weeks and what has been announced today is better than what was originally proposed. We welcome the fact that Government has listened to the concerns expressed by us and other stakeholders and made moves to broaden the national reserve to include some of the businesses who were still developing when historic entitlements were first allocated.”

“It is important now that the government sits down with the Union, the New Entrants Panel, and other stakeholders in order that we can all get a full analysis and understanding of what this will mean, particularly the move to include previous National Reserve developing businesses. Until the implications of the national reserve are fully understood the Government must keep the door open to further fine tuning of the developer category.”

He continued: “The budget deal hammered out by the Heads of State, the European Parliament and the Commission in 2013 saw a significant cut made to the amount of the budget available to be spent on direct support payments to farmers. The effect of this cut will be felt for the first time by farmers when payments start being received in December.

“The headline budget for Scotland has been reduced from €650 million last year to €580 million this year. This cut will not have been anticipated by many and could not have come at a worse time given that farm gate prices have been down this year across all sectors. Had the UK given us our rightful share of the internal convergence money farmers in Scotland would have been protected from the worst of this cut. The Union’s campaign for our fair share of internal convergence money goes on.”

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