By Sam Fortescue
FARMERS IN England and Scotland planning to make a claim to the national reserve to boost their historic single farm payment entitlements should start finalising their applications now, say consultants.
The reserve is open to a number of categories of claimant, like new entrants and investors, whose allocation of historic SFP does not reflect business changes made during or after the reference period for the payment (2000-2002). The deadline for Welsh applicants has already passed but has just been extended to May 16 in Scotland.
The first thing to note, according Andersons partner Richard King, is that some unexpected changes in the guidance notes have widened the field of eligibility for those claiming under the investor category.
This is because investments such as short-term lets, leased livestock quota or buildings are now allowed. In general, under these circumstance investments that have increased area or livestock numbers by 10% should now qualify.
The application forms – part M of the English single farm payment SP5 claim form, due in by May 16, and a separate document in Scotland – are deceptively short. “There”s not all that much to do on the forms themselves,” said Mr King.
“It”s what you do alongside that that is the problem. If you tick a box saying you want to make a claim, you have to find all the documentary evidence you can.”
This need for supporting evidence could prove a stumbling block. Under the most common category for national reserve claims, that of investor, farmers may not have any formal business plan to prove that the expansion took place outside the reference period.
“It doesn”t matter,” said Mr King. “Get together what you do have. Even if it is a budget from the time showing projected increases in livestock numbers, for example.
“Certainly in Scotland the documents submitted do not have to be contemporaneous. Farmers can get evidence now to back up what was done then.”
Claimants can ask their consultant for a letter testifying to their expansion if they do not have plans from the time. This should be backed up by a letter from the bank confirming that a loan was taken out for the purposes of investing in the farm, Mr King added.
But for some people, like those thinking of selling up or retiring in the coming years, it might be better not claiming, according to Mr King. That is because entitlements boosted in value by more than 20% because of an award from the national reserve cannot be transferred for five years and must be claimed on every year or be forfeit.
Jeremy Moody, of the Central Association of Agricultural Valuers, said: “Be careful that your choices fit in with your wider business and personal plans. Entitlements are valuable but sometimes other issues will override them.”
Otherwise, according to Mr King, the only factor to consider is whether a claim is worth the time and effort. “A successful claim will only bolster the historical element of the SFP, which will dwindle to nothing by 2012.”
There is still a perception that the dairy converters category applied only to those who had gone out of milk completely by May 15, 2004.
However, any UK farmer who could prove they had started the conversion process by then could claim.