Royal Welsh Show 2013: Minister sets out CAP payments for Wales

Welsh farmers can expect to be paid between €49 and €237 a hectare by the end of 2019 under the Welsh Government’s plans to adopt an area-based payment system.

Details of the Welsh Government’s proposals on how CAP reforms should be implemented in Wales emerged in a consultation document unveiled at the Royal Welsh Show.

If the government decided to transfer the maximum permitted level of 15%of funds from Pillar 1 to support environmental measures under the rural development pot (Pillar 2), the industry would be left with a flat rate payment of €196/ha by the end of a five-year transition from the historic payment model to the area-based alternative.

But if the single farm payment was delivered through a two tier system – moors and others – farmers in moorland areas would be paid €49/ha and others €237/ha.

A three-tier system is also being proposed – moors, severely disadvantaged areas and others. Under this system, payments to moorland farmers would be €49/ha, €215/ha to those in severely disadvantaged areas and €255/ha to others.

These figures assume an annual budget of €261 million, although the total sum available won’t be known until September.

The consultation document also focuses on other key details including capping, a transition period to area-based payments and the transfer of direct payments to Pillar 2, also known as the Rural Development Plan for Wales.

Capping

A progressive system of deductions up to €300,000 would be introduced. Payments of between €150,000 and €200,000 would be capped at 10%, €200,000 to €250,000 by 25%, €250,000 and €300,000 by 50% and €300,000 and above by 100%.

This would impact on 59 claimants – 0.36% of the 16,762 claimants in Wales.  Payment data from 2012 shows that only five farmers received more than €300,000.

Wales’ farm minister Alun Davies said it would be “morally repugnant’’ to reward the biggest and most successful farming businesses in Wales.

“I do not believe it is right that businesses should receive such large sums of public money without limit or, in some cases, need, in a period of significant constraint and austerity,’’ he said.

Any money released would be transferred into Pillar 2 for what the minister says would represent a wider benefit to rural areas.

Transition period

Although the minister initially favoured a transition period of at least seven years, preferably 10, he is now proposing five years. This would be delivered in equal stages of 20% a year up to 2019.

Although Mr Davies said he understood farmers’ concern about the financial impact of the new area-based formula, he believed a long transition would have downsides that would outweigh any advantages. “It would delay change that would benefit people who stand to gain, and there are potentially many farmers who will,’’ he said.

“Slow change reduces the urgency to consider change that ultimately some farm businesses need to consider.’’
The minister believed the shortened transition would “sharpen’’ farmer focus on the longer term changes they will all have to make.

Transfer of funds from Pillar 1 to Pillar 2

The minister is prepared to consider transferring up to the maximum permitted level of 15%. This would allow him to address the environmental challenges Wales faces, he said. He will not make a final decision on this until he knows the extent of the total budget.

Coupled support

‘Coupled’ support has been described as a “backward step’’ by the farming minister and he therefore has no plans to implement this mechanism in Wales. Farmers had argued that coupled support would help them make the move from historic to area-based payments and ease cashflow difficulties.

Greening

There is no intention to make the all-Wales environmental land management scheme, Glastir, compulsory. The Welsh Government would instead implement the European Commission’s original greening proposals. “In my opinion, adopting the standard greening measures will provide the best means by which the majority of Welsh farmers can qualify for this part of the payments regime without significantly impacting upon their businesses,’’ said Mr Davies.

Active farmer

Europe’s mandatory list of landowners that would be excluded from claiming payments would be adopted in Wales. This list includes airports, railways services and permanent sports and recreational grounds. “I do not intend to add other organisations to it because I think it is adequate as it is,’’ said Mr Davies.

Minimum claim size

The minimum claim size in Wales would be three hectares and €100. This represents a rise from the five hectares and €200 limits that would be allowable in the UK and Wales.

Area of Natural Constraint

Although Mr Davies is not proposing to have an Area of Natural Constraint Scheme under Pillar 1 he is still considering whether to introduce one under Pillar 2.

Small farmer scheme

There is no intention to introduce a Small Farmer Scheme in Wales. This is seen as “counterproductive’’ because it exempts small farmers from ‘greening’ and cross compliance.

Young farmers

There would be support for young farmers under Pillar 1. Mr Davies said he remains committed to the Young Entrants Support Scheme (YESS) and is keen to develop this.

The consultation on the Welsh Government’s proposals will run until October 15th with the proposals expected to be finalised by the end of the year.

For more on this topic

Wales plans to cap single farm payments

See all news from the Royal Welsh Show