This article has now been updated: read: Basic Payment Scheme – a guide for all four UK regions
Defra and the Scottish government have released the latest detail on CAP reform. The extra information has added to a developing picture of how CAP will affect farm businesses.
We have set out a round up of the measures that we know so far across England, Scotland, Northern Ireland and Wales.
As more detail is released we will add to the round up so keep checking back.
What is arable land?
For the purposes of the Basic Payment Scheme, arable land is:
- Combinable crops
- Crops grown for fibre
- Root crops
- Forage maize, forage rape and fodder root crops
- Field vegetables
- Cut flowers or bulbs
- Soft fruits (other than permanent crops)
- Fallow land (see below)
- Temporary grassland
- Outdoor pigs (these are classed as temporary grassland)
The amount of arable land you farm will decide whether you must comply with the three-crop rule (crop diversification) or establish ecological focus areas (EFAs).
Farmers with more than 10ha of arable land need to follow the three-crop rule and anyone with more than 15ha of arable land needs to meet the EFA requirements, unless they qualify for an exemption.
What is not arable land?
Permanent crops that occupy the land for five years or more and provide repeat harvests. This includes apples, currants, gooseberries, asparagus, short rotation coppice and nursery crops.
What counts as a crop?
The three-crop rule – also known as crop diversification – means that if you have more than 30ha of arable land you must grow at least three different crop types. Those with 10-30ha must grow two crop types.
What are the crop types?
Spring and winter crop varieties will count as separate crop types. But a winter variety sown in the spring will still count as a winter crop and vice versa.
Varieties can be checked against the National List or the PGRO Recommended List. If a variety is not listed, it will be classed as a spring crop. Where available, growers should retain evidence of crop varieties sown.
Barley, wheat, oats and linseed will count as separate crops. But industrial rape and normal OSR will only count as one crop type as they are all within the same species, Brassica napus.
Similarly, if you grow cabbages, cauliflower, kale broccoli and brussels sprouts it would only count as one crop type as they are the species Brassica oleracea.
Ecological focus areas
Ecological focus areas (EFAs) are very different to the old set-aside regime in that farmers will be able to choose from a range of options which are weighted according to their environmental value. However, anyone with more than 15ha of arable land will need to ensure at least 5% of that land is set aside as an EFA to comply with greening rules.
To meet the EFA requirement, farmers will be able to choose from a list of five options: land lying fallow, buffer strips, catch and cover crops, nitrogen-fixing crops and hedges (see table below for weightings).
Defra has urged farmers wishing to include hedges in their options to apply earlier or face a delay in receiving payments due to the complexities of digital mapping.
Ministers have said they will review EFA options to add to the list in future years.
Land can be left fallow to help meet crop diversification rules – so long as it is kept fallow throughout the inspection period of 1 May to 30 June.
Fallow land also being counted towards the EFA rules must meet the definition of fallow for the whole of the fallow period (1 January to 30 June). It must also be at least 2m wide, have a minimum area of 0.01ha and not have any crop planted or sown on it during the fallow period.
Temporary grass can be used a fallow, but grass can’t be sown on this land during the fallow period. The only crop that can be planted during the fallow period are wild bird seed mixes and nectar sources that are an unharvestable mix of at least two crops that support wildlife and pollinators.
Buffer strips must be next to watercourses or parallel with, and on a slope leading to, a watercourse. To qualify as an EFA, strips must measure at least 1m wide from the top of the bank where the strip is adjacent to the watercourse. The same buffer strips can be used to meet both greening and cross-compliance rules. No production must take place on a buffer strip, but grazing or cutting is allowed.
A list of the nitrogen fixing crops which count as EFAs has now been published. The list of eligible crops includes field beans, feed peas, vining peas, red clover and lucerne.
Catch or cover crops
More details are expected in October. In general, catch or cover crops must consist of a sown mix of at least two different cover types (one cereal and one non-cereal). This could include rye, vetch, phacelia, barley, mustard, oats and lucerne, It does not include crops that are usually grazed – except where grass is undersown in a previous crop.
Catch crops must be established by 31 August in the BPS year and retained until at least 1 October. Cover crops must be established by 1 October and retained until at least 15 January.
Full details of the rules on using hedges – including the measurement of gaps – as EFAs are still unavailable. Defra is blaming the European Commission for holding things up.
But we do know that hedges can be used as an EFA feature if the length of the hedge is located between two arable land parcels that are at your disposal and both sides of the hedge are next to the arable crops in those land parcels.
Farmers may need to wait until October before finding out how to deal with hedges next to arable land where only one side is at their disposal, including boundary hedges and those next to a road. Defra says it is in talks with Brussels about hedges next to ditches and non-arable land.
The number of requirements placed on farmers to keep land in good agricultural and environmental condition (GAEC) will reduce by one-third from 17 to 11.
For example, soil protection reviews have been removed. Among the existing GAECs to be retained and rationalised are water, boundaries, rights of way, trees, sites of special scientific interest and scheduled monuments.
The hedge-trimming ban will be extended by one month to the end of August and there will be extra protection introduced for earth and stone banks.
A number of the 18 statutory management requirements will also be removed but these are yet to be defined.
Defra has also announced that it will carry out a review of the cross-compliance penalty system to “make it more proportionate”.
|How features contribute to the 5% EFA|
|Feature||Conversion factor||Weighting factor||EFA|
|Land lying fallow||n/a||1||1sq m|
|Buffer strips (per 1m)||6||1.5||9sq m|
|Areas with catch crops or green cover||n/a||0.3||0.3sq m|
|Areas with nitrogen crops (per 1sq m)||n/a||0.7||0.7sq m|
|Defra has produced a list of N-fixing crops that can be sown. It includes peas, field beans and lupins.|
Basic Payment Scheme
On 1 January 2015 the Single Payment Scheme will be replaced by the Basic Payment Scheme. Existing SPS entitlements will be automatically converted on that date.
About 30% of the total payment each farmer receives will rely on meeting “greening rules”. Refusal to follow the rules – which require a mix of crops on your farm, the establishment and management of ecological focus areas and protection of permanent pasture – will mean farmers could lose some or all of the greening payment. Defra says farmers are also more likely to be inspected if they fail to meet greening rules.
Anyone with more than five entitlements and 5ha of land to activate them against will be eligible for the BPS. Applicants will also need to pass the “active farmer test”, which includes a list of activities that do not qualify, such as real estate, airports, railway services, permanent sport and recreational grounds.
Defra has clarified a query on whether ‘naturally kept land’ qualifies for payment. The department confirmed that there is no area designated ‘naturally kept land’ in England, which means farmers won’t fail the ‘active farmer test’ on that basis.
Parcels of permanent pasture containing up to 100 trees – the maximum allowed under the regulations – will be eligible for the BPS. Land certified as organic – including land in conversion – will automatically meet greening requirements.
Value of entitlements
Defra has decided to shift some of the money in the budget “up the hill” and increase payments for moorland farmers. The lowland and severely disadvantaged area (SDA) payment rates will be aligned. Payment rates will be €244/ha (£197/ha)) for lowland and SDA land and €70/ha (£56.37/ha) for moorland.
Transfer of Entitlements
Farmers who wish to transfer entitlements ahead of the Basic Payments Scheme (BPS), which replaces the Single Payment Scheme on 1 January 2015, must submit paperwork to the Rural Payments Agency by midnight on 21 October 2014 – a week longer than originally indicated by DEFRA.
Modulation and capping
A 12% modulation rate will apply in England until at least 2018, after which it might be raised to 15%. Large claimants will also have their payments scaled back. Anyone claiming more than €150,000 (£130,500) (excluding greening and any young farmer payment) will have the amount over €150,000 scaled back by 5%.
Rural development and agri-environment schemes
A new Rural Development Programme will kick in from 1 January 2015 but the replacement scheme for environmental stewardship will not start until 1 January 2016. Details of the New Environmental Land Management Scheme (Nelms) are not yet available, but Defra said the scheme will be more targeted than its predecessor, which will mean that many current ELS claimants will find it difficult to get in.
Young farmers will receive a 25% top-up on the direct payment (Pillar 1) for each of the first five years of the operation of the business. Young Farmer Scheme claimants will need to be an individual, aged under 40 at the time of application and set up as a “head of holding” within the previous five years. The upper limit for claims is 90ha.
The Welsh government has now set out how it wishes to implement common agricultural policy (CAP) reform in Wales.
Basic Payment Scheme
On 1 January 2015, a five-year transition will begin from the current historic payment model to a system based on the area of land farmed. By 2019, payments will be wholly based on area farmed. The new Basic Payment Scheme will replace the Single Payment Scheme (SPS) with an additional payment for “greening”. Three land categories will be used – moorland, severely disadvantaged area and a combined disadvantaged area and lowland. Moorland will be restricted to areas at 400m or higher.
Value of entitlements
The exact payment rates won’t be known until after farmers have submitted their claims in 2015 but they are likely to be €20/ha (£16/ha) for moorland, €200/ha (£161/ha) for severely disadvantaged areas and €240/ha (£194/ha) for disadvantaged areas and lowlands.
In the case of entitlements, the value of those held in 2014 will be used as a basis for calculating the entitlement unit rate for 2015. But this won’t necessarily be the same as the payments claimants received in 2014. People who can show they produced agricultural products in 2013 will be eligible for entitlements, irrespective of whether they made an SPS claim that year.
Modulation and capping
The maximum 15% modulation rate will apply in Wales. There will be a progressive level of capping for payments between €150,000 and €300,000 (£121,050 and £242,100). There will be a 100% cap for payments more than €300,000 (£242,100). The Welsh government will not consider wage-related costs prior to calculating the deduction. Funds recovered from capping will be redeployed to the Wales Rural Development Plan budget.
Thirty percent of Pillar 1 payments will be payable for “greening”. Wales will be implementing the EU’s default greening proposals based on maintaining permanent grassland, crop diversification and ecological focus areas.
A high percentage of farmers in Wales will automatically qualify for the greening element of Pillar One because their farms are mainly under permanent grassland.
The Welsh government says the new Pillar 1 Basic Payment Scheme will give Welsh farmers a wide choice of options to include in their ecological focus areas (EFA). Hedges, stone walling, short rotation coppice, afforested land, fallow land and nitrogen-fixing crops such as peas and beans will all count towards the 5% EFA requirement. There will also be joint EFAs.
Land farmed in accordance with the EC Regulation on Organic Farming is deemed to be automatically green.
Payments will only be made to people who are “active farmers”. The Welsh government’s decisions on exactly who is eligible to claim will be confirmed later this year. The Welsh government will be applying a 5ha minimum claim limit.
Under the new deal, the basic payment and the greening payment will move to a flat-rate payment a hectare over a seven-year transition period. The flat-rate payment will eventually be set at ￡100/acre for all farmers.
Value of entitlements
Dard cannot give an indication of entitlement values until after claims are submitted in May 2015. It says it is likely to be late 2015 before farmers are advised of their new entitlement values.
Modulation and capping
The modulation rate was set at 0% after proposals for a 7% cut in direct support was successfully challenged in the High Court.
Dard will cap basic payments at Euro 150,000, meaning a 100% reduction will be applied to amounts above this. Greening payments and payments under the young farmers’ scheme will not be capped.
Thirty percent of Pillar 1 payments will be devoted to greening. Northern Ireland will implement the Commission’s default greening proposals, with permanent grassland monitored at a regional level and grassland entitlements ploughing banned only within designated habitat areas. Land certified as organic automatically qualifies for the greening payment.
Payments will only be made to people who are active farmers. DARD will clarify who is eligible to apply later in the year. The minimum claim size farmers can make will be 3ha.
Rural Development Programme funding
Between 2014-20 up to ￡623m, including ￡250m of additional government funds to support the Farm Business Improvement Scheme
Severely Disadvantaged Area support
Less favoured area payments to farmers in severely disadvantaged areas (SDAs) will come from the rural development pot
From 2017, farmers in SDAs will not receive additional payments. However, a one-year transitional payment for farmers in disadvantaged areas is expected to begin from 2016, about half the current amount farmers receive
No voluntary coupled support – although it will be kept under review
The ratio of permanent grassland compared to Scotland’s total agricultural area must not decrease by more than 5%.
The Scottish government is using the national level, which means individual farmers don’t currently need to take any action provided Scotland as a whole does not see a decrease of more than 5%.
Where a business has between 10ha and 30ha of arable land, farmers must grow two crops with no one crop accounting for more than 75% of the arable land.
If a business has more than 30ha of arable land, producers must grow at least three crops, with the main crop not exceeding 57% and the two main crops not exceeding 95%.
Temporary grass will count as a crop type, while winter and spring crop varieties will count as separate crops.
Land in organic schemes, or businesses that have less than 10ha or arable land will be exempt.
Businesses with more than 75% of land used for grass or forage, provided the arable area covered by these does not exceed 30ha, are also exempt.
What counts as arable area?
Arable areas cover all the arable crops, including temporary grass, claimed by the business.
How does grass in a long rotation fit in?
Grass more than five years old is considered permanent grass and therefore does not count as an arable area. If grass more than five years old is reseeded directly back into grass, it is expected it will continue to be considered as permanent grass.
What counts as a different crop?
Crops will be counted as different if they come from a different botanical genus or from different species within a genus.
All the major crops – wheat, barley, oats, oilseed rape, turnips, potatoes – count as separate crops, as do different species of field vegetables.
Winter crop and spring crop are considered to be separate crops. Land lying fallow and grass or other herbaceous forage also each count as a crop.
What will class as an EFA?
An area corresponding to at least 5% of the arable land must be managed as EFA.
Land classed as EFAs include fallow – on which there will be no production or grazing, buffer strips and catch crops, which should be established on arable land in the autumn.
Nitrogen-fixing crops and field margins with a width between 1m and 20m also count as EFAs. Hedges and ditches on field boundaries can count as part of the margins.
Organic land, businesses with less than 15ha of arable land are exempt, as are businesses with more than 75% of permanent pasture, provided the arable land not covered is less than 30ha.
Business with more than 75% of arable land used to grow temporary grass or fallow are also exempt provided the arable land not covered is less than 30ha.
What nitrogen-fixing crops are eligible?
Alfalfa, beans, birdsfoot trefoil, chickpea, clover, faba bean, lentil, lupin, pea and vetch are eligible as nitrogen-fixing crops. Grass with clover in it is not eligible.
Management conditions will be published soon.
What catch/cover crops are eligible and any conditions that apply?
Final clarification has yet to come from Europe.
When does the EFA feature have to be in place – by May 2015, or at some point during 2015?
It will depend on the EFA feature, but will certainly have to be in place by 15 May 2105. Europe will publish detail on this shortly.
How wide will buffer strips or field margins have to be?
Field margins must be between 1m and 20m wide. Buffer strips adjacent to water courses must be a minimum of 2m wide.