Key questions on dealing with CAP reform

Greening, entitlement allocation and values were some of the main issues for farmers at recent meetings run by land agent Berrys. Associate Sarah Reece addresses some of the key questions.

English claimants

What is meant by “arable land”?

Arable land is land that is cropped, fallow or in temporary grass (not continuous grass, which is out of the arable rotation for five years or more).

My farm is block cropped in a rotation with several other farms where each essentially grows one crop each year to reduce costs. How will I meet the crop diversification requirements?

Sarah ReeceSarah Reece,
Associate, Berrys

It depends on the size of your farm. If you have less than 10ha of arable land, there is no requirement for crop diversification. Between 10ha and 30ha you need to provide two crops and if you have more than 30ha the requirement is three.

See also: Ecological focus areas: How do they work?

In England we are waiting for DEFRA to publish a list of crops, but understand that winter and spring varieties will be classed as different crops. You will need to adjust your cropping according to the area farmed.

Where two crops are needed, the main crop must not to be more than 75% of the arable area and where three crops are required the two main crops must not be more than 95% of the arable area.

All farmers must sit down and work out their cropping plans well ahead and decide how they will meet these requirements.

Your 2015 application will be based on the crops planted in autumn 2014 and you will be ordering the seed for those crops now. Those who work in conjunction with others to block crop their land could face more of a challenge.

My farm consists of pasture and one large arable field, and I use a contractor for the arable field work. How can I meet the two-crop rule?

On just one arable field it is unlikely to be viable to split it into two and grow two separate crops, so we need to look at other ways to farm the land.

One option might be to let the arable land on a Farm Business Tenancy (FBT) and allow that tenant to claim the payment. The value of the Basic Payment System (BPS) claim will be reflected in the rent you charge but this may have tax implications and hence needs wider thought.

I am trying to plan where my Ecological Focus Area (EFA) will be and I already have an ELS agreement. Can I use my ELS options for the EFA?

DEFRA has now published a list of what the EFAs will consist of –agro-forestry, hedgerows, landscape features, protein crops, fallow land and other features can contribute points towards the 5% of arable land which must be declared for EFAs. However, you can’t receive double funding – so if you are paid under ELS, for example, for margins or hedgerows, you cannot use these for EFA. We urgently need more information however about the interaction of EFAs with ELS obligations.

With regard to EFAs, will I have to leave land fallow, like set-aside?

EFAs are not simply about taking land out of production. Protein crops are permitted under EFA, so you may be able to grow peas and beans as an alternative. DEFRA has yet to confirm whether you can fertilise or spray them.

I have a dairy farm with a large area of temporary grass and some maize. How will I meet the greening requirement?

If more than 75% of your total arable area is temporary grass or fallow land and your remaining arable area is no more than 30ha you will be exempt from crop diversification and EFA.

I am organic – will I have to meet
the crop diversification and 
EFA requirements?

No – organic farmers are given an exemption.

I am a self-sufficient beef farmer with a suckler herd, growing just a small amount of wheat for feed and straw for home consumption. Do I need to meet all these requirements?

You may not. If more than 75% of the agricultural area is permanent or temporary grass, and the remaining arable area is no more than 30ha, you will be exempt from crop diversification and EFA.

Will there be changes to the way that I claim my payment?

This year’s claim will be the last made on the current system as a new system is being put in place for the 2015 claim onwards.

The RPA has said it will launch the new system in the summer so that people can see in advance how it works. It is likely to be quite different from the current system and will be digital by default. The RPA says this is the fastest and most secure method and the system will be interactive so that the RPA can give guidance and support.

The majority of farmers already apply online either directly or through an agent but the RPA has said that it will continue to support people who are unable to apply online. The system will allow intermediaries to get involved and we are hopeful it will allow for online entitlement transfers and changes to the rural land register.

Welsh claimants

I want to restructure my business in 2014 and make it a limited company to bring in other members of family. Is this sensible?

No. In Wales, to be entitled to a new allocation of entitlements under the BPS the claimant needs to have made a valid Single Payment Scheme claim in 2013. So I advise not making any changes to the business unless there are wider implications, such as tax, which outweigh the risk on the BPS front. Seek advice from your accountant or tax adviser as well.

I farm in Wales on an intensive beef and sheep system, which means my single payment entitlements are high value – how will I come off?

Wales is transferring from historic- to regional-based payments and yours will be made at an average payment rate per hectare for the region you are in (Moorland, Severely Disadvantaged Area and Lowland/DA).

There will be a five-year transition period to reduce the inevitable financial pain for some farmers as high historic payments are brought down to the average payment rate. By 2019 all farmers in Wales will be paid on an area-based system.

I have just inherited the family farm in Wales, will I still be entitled to receive an allocation of basic payment entitlements?

As the single payment was in a different claimant’s name you won’t have an automatic right to receive the basic payment. Measures will need to be put in place to transfer the 2013 status to the new business owned by you. The new business may have to prove its right to receive the allocation of entitlement.

Cross-border issues

I farm with land in both England and Wales. How will my greening requirement be affected?

There are still many issues to be resolved for cross-border farmers. As yet it is not known whether you will have to green on the whole claim or on your English claim and Welsh claim separately.