27 October 1995

Penalties to quit set-aside

WITH set-aside now standing at 10%, a number of producers who entered more than this under the five-year "guaranteed" scheme are looking to return some of their land to production.

"There is no problem in principle, as long as the penalty is paid," says Francis Mordaunt of farm business consultants Andersons. "But they must leave set-aside cover in place until Jan 14 – the end of the set-aside year."

Failure to do so could run the risk of losing their entire set-aside payment and some of their area aid. At the very least, a "cover" penalty of £100/ha (£40/acre) could be imposed. If cover has already been destroyed, producers are advised to re-establish it at once.

Anyone wishing to withdraw some, or all, of their guaranteed set-aside should write to their regional service centre, requesting an IACS 20 form.

The penalties for getting out are calculated at 5% of the set-aside payment, times the number of years left to run.

Thus a producer who entered the scheme in 1994 could expect to pay £51/ha (£21/acre) in England and £49/ha (£20/acre) in Scotland. It has not yet been decided how and when the penalties will be paid.