Financial Discipline cash heading back to farmers

Farmers will shortly receive a small payment from the Rural Payments Agency relating to their 2018 claims.

Each year the European Commission applies what is known as a Financial Discipline Mechanism (FDM) to the Basic Payment Scheme budget, to create a reserve which can be used to support the farming industry in times of crisis.

If the money goes unspent, it is returned to farmers in the following scheme year.

See also: Weak pound set to increase 2019 BPS payments 

The Rural Payments Agency has confirmed that FDM reimbursements for farmers with a 2018 BPS claim worth more than €2,000 (£1,775) will start in mid-September.

A farmer with a claim value of €30,000 (£26,600), with no reductions applied, should receive a payment in the region of £335.

Payment calculation

The amount is calculated by taking the full value of a farmer’s claim, removing the first €2,000 and any reductions if they apply (other than cross-compliance penalties), then multiplying this by 1.364%.

Farmers are paid the resulting amount, minus  5% for any cross-compliance penalties.

The payment will be noted as ‘FDM reimbursement’ on the remittance advice, which will be sent after a payment is made.

Payments relating to the 2019 BPS scheme year are scheduled to start on 2 December.