Recently in Single Farm Payments Category

Got a query on filling in your SP5 form for the 2011 single farm payment claim? Try posting your question on our forum where RPA staff are on hand to provide the answers.

They’ll be regularly checking the thread and answering questions to help you complete your forms, either on paper or electronically, as quickly, easily and accurately as possible.

Woodland, common land, stock numbers, grazing licences, land use and non farmed land  all feature in the questions raised by users so far. 

The deadline to buy single farm payment entitlements for 2011 use is 3 April 2011. However, in order that payment can be cleared, the last safe trading date is around 28 March, says George Paton of Webb Paton.

Supply of entitlements for sale has been short this year, with English non SDA entitlements changing hands for £250/ha in the last two weeks. Chester based Rostons also reports brisk trade. 

Last year’s single farm payment was paid at an exchange rate of 1Euro:86p, the second most favourable rate since the current scheme began.

On Tuesday, the Euro was worth around 84p but the future for the single currency is far from rosy, according to Tom Barclay, head of agriculture at CLA Foreign Exchange Services, part of currency broker World First.

He predicts the Euro value at lower than 81p by September, when the 2011 payment rate for sfp will be set. This alone would represent a cut of almost 6% in sfp values.

Political and economic uncertainty for many of the Eurozone countries and the dramatic rise in the cost of their governments’ borrowing means that sfp claimants should think about protecting their income sooner rather than later, says Mr Barclay. An increasing number are choosing to do this in stages this year rather than hedging the whole payment at one rate.

Farmers looking to buy single farm payment entitlements might have to pay more this season, according to Cheshire consultant Rostons.

It says the trading window between entitlement statements being issued and the 3 April 2011 deadline for submission of any transfers on the RLE1 form will be shorter this year than in 2009, which could exaggerate demand and push prices up.

The Rural Payments Agency said last week that 2010 entitlement statements would be available in electronic form from 8 December and hard copies from later in the month, into early January, whereas most of last year’s statements were received by the end of November.

Rostons said entitlements were currently trading at just under face value; for example, the ‘flat rate’ lowland entitlement, worth £207.37/ha, was trading at around £200/ha.

The Rural Payments Agency has announced the new flat rate values that will be used for the 2010 English single farm payment.

Based on the exchange rate of €1 = £0.85995 set on 30 September, the payment for non- Severely Disadvantaged Areas is £207.37/ha; upland SDA, other than moorland, £167.50/ha; and upland SDA moorland, £29.36/ha. These values exclude modulation and any penalties that may be applied.

The flat rate makes up 75% of the 2010 payment, with the historical element accounting for the remaining 25%. Last year these proportions were 60% and 40% respectively.

The RPA said Entitlement Statements confirming the number and value of each farmer’s SPS 2010 would be made available on SPS Online by 8 December, while paper copies would be sent out in late December and the majority by mid-January 2011.

So the exchange rate that will be used to convert this year’s single payment from euros to sterling has been set.

The rate of €1 = £0.85995 wasn’t quite as good for UK farmers as last year’s bumper €1 = £0.91 and SFP cheques will be worth around 5% less as a result. But, timely weakening of the pound just before the rate was set means this year’s rate is still more favourable than those used in 2005 to 2008.

Indeed, the timing of sterling’s weakening was uncanny. After firming for much of the summer, the pound fell throughout last month on the back of dodgy economic forecasts, reaching its recent low-point almost exactly as the crucial 30 September deadline arrived.

It’s small consolation to farmers facing hefty increases in costs this winter, but every little helps. Now it’s just question of when the money arrives.

The European Commission has already said the UK won’t be one of the 10 member states that will get early delivery of single payments to help alleviate income pressures - ironically, partly due to the better income conditions afforded by the relative weakness of sterling.

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OK, we can’t do much about the weather, but a rainy day well spent might pay off [writes Suzie Horne].

For example, just one day after the single payment exchange rate was fixed, a further fall in the pound meant that claimants who choose to take their payment in euros could already secure next year’s cheque at a slightly better exchange rate than this year.

It’s interesting that in Scotland around 20% of claimants elect to be paid in euros, compared with just 2% in England. Any theories on why that might be? Almost all of those who take a euro payment in turn protect the value of that payment by fixing the rate at which it will be converted to sterling before the 30 September deadline.

Protecting margins elsewhere is becoming a higher priority. After another week of see-sawing wheat futures and the weather holding up drilling, many will have been watching prices and wondering if the dip we saw at the end of last week was the start of something bigger.

With a recovery of more than £5/t on Tuesday (5 October), it seems not. It will be interesting to see what happens to the £30/t-plus gap between new crop futures and prices for the final few months of the 2010 crop. Both November 2011 and 2012 London feed wheat futures were at more than £130/t delivered midweek, while May 2011 was £161/t.

My friends at currency brokers World First have been in touch with me again, which suggests that either the deadline for submitting SPS applications is fast approaching or sterling is on the move in the foreign exchanges - or both

Farmers have less than three weeks to get their SP5 forms back to the Rural Payments Agency, with Monday 17 May being the final day before penalties kick in. So time is short.

On that form they have to declare whether they want to receive their 2010 SFP in pounds or in euros. And that decision has probably become more urgent than ever, as sterling starts to strengthen against the euro.

At the beginning of April, it was worth about 90p/euro - pretty similar to where it was for much of last year. But since then it has strengthened almost daily and currently stands at less than 87p/euro...

Checking through the SPS application form must be one of the most dreaded tasks any farmer has to undertake during the course of the farming year.

And as an agricultural journalist, writing our annual "SPS special" in Farmers Weekly is also one of my least favourite jobs.

First there is the briefing with the RPA - stuck in a small room in Reading with four civil servants, plus two more by video-link from Newcastle, advising me as to this year's changes. (I did feel a bit outnumbered.)

Then there is the job of deciphering my notes and cross-checking this with the briefing notes handed to me at the RPA and the guidance booklet which arrived in the post a few days later.

And then it's time to write it all up - 2500 words of elegant prose on a subject I find, quite frankly, mind-numbingly dull....

The recent document from the EU Commission on the possible consequences of policy change over the next ten years makes for uncomfortable reading.

The report, which is an update of an earlier study in 2006, (the Scenar 2020 study), sets out three scenarios:

• A "reference" scenario, with a static CAP budget, a 30% cut in direct payments and a 105% increase in rural development funding
• A "conservative" scenario, with a static CAP budget, a 15% cut in direct payments and a 45% increase in rural development funding
• A "liberalisation" scenario, with a 55% cut in the CAP budget, the total removal of direct payments, market support and trade barriers, and a 100% increase in rural development funding...