Royal Welsh: Wales plans to cap single farm payments

Single farm payments in Wales will be capped at €300,000 under proposals due to be outlined at the Royal Welsh Show.

Welsh farmers will be given three months to decide how the single payment system will be delivered in Wales after January 2015.

Farming minister Alun Davies will officially launch a consultation on how CAP reforms should be implemented in Wales at 1pm on Tuesday (23 July),

The minister has already hinted at his own preferences but he wants farmers to decide what shape the payment system should take.

“What I need now is for farmers and agricultural communities to give me their views on the proposals that I am setting out,” he said ahead of the launch of the consultation document.

Key proposals include a transition period from the current historic payment system and the capping of large payments. The main points in the consultation are as follows:

  • Transition period – A five-year transition to an area-based payment system founded on land categories that recognise the different characteristics and productivity of different land types. In his 2012 statement on CAP reform, the minister had suggested a transition period of “at least seven years but preferably 10 years”.
  • Greening – A practical approach to greening, using the permanent pasture, arable crop and ecological focus areas proposed by Europe; this would be instead of a Wales-only scheme.
  • Capping – The consultation favours a robust approach to capping large payments that go beyond Europe’s mandatory requirements. A 100% cap would be placed on payments over €300,000.
  • Active farmers – Wales would adopt Europe’s proposed approach to defining “active farmers”.
  • Transfer of funds from Pillar 1 to Pillar 2 – Budget may be transferred from direct payments to farmers to the Rural Development Plan in exchange for a minimal approach to greening. This is intended to provide targeted support for actions that farmers take that have a direct benefit to the natural environment and climate change. It would also fund targeted actions with the aim of making farming businesses sustainable.
  • Small farmers scheme – There is no proposal to introduce a so-called “small farmers scheme” because of concern that this would exempt some farmers from cross compliance and greening.
  • Coupled support – Wales would have no coupled support.

Mr Davies believes the CAP deal reached in Europe will be good for Wales but is anxious that direct payments are used “to best effect”.

“I cannot stress enough that this coming period of guaranteed support, which no other sort of business enjoys, is one that must be used to prepare for the likelihood of a further reduction in direct payments after 2020.”

The minister is also keen to help young entrants and new entrants to the industry, groups that will have priority for entitlement allocation from the National Reserve.

The consultation runs until 15 October. The proposals are expected to be finalised by the end of the year.

More on this topic

Read more from the Royal Welsh Show

Keep up to date with the latest on CAP reform

Futures markets and commodity risk management online course:

  • Risk management strategies for a more predictable financial performance
  • Educated conversations when collaborating with your advisors
  • Negotiate better prices with your grain merchants

View course