Active Farmer Test
The latest CAP update confirms that all farmers in England with at least 36 hectares of eligible land will qualify as an active farmer.
We were already aware that farmers who received more than €5,000 (£3,886.50) in 2014 and who operate a ‘negative list’ activity which includes airports, railway services, waterworks, real estate services or permanent sport and recreational grounds will still qualify as an active farmer provided they meet one of three ‘re-admission criteria.’ It is these criteria that have changed in the latest Defra publication.
The first remains the same, which is that the farmer’s annual payments for SPS or BPS are at least 5% of their total non-agricultural income. The second is that the farmer’s total agricultural receipts are at least 40% of their total receipts in the most recent financial year. This percentage has risen by 25% since the last update. The third was previously that their principal business or company ‘objects’ include an agricultural activity. This has now been simplified to “the farmer has at least 36 hectares of eligible land.”
This revelation may come as a relief to those with more than 36 hectares of eligible land who may not otherwise have qualified. Those with less than 19.68 hectares of eligible land are likely to have received less than £3,886.50 in 2014 and should therefore qualify automatically. This will leave a window of those with 19.68 to 36 hectares who could fail the test if they operate a ‘negative list’ activity.
It will be interesting to see the impact this has on the entitlement markets, particularly for those larger institutional organisations who have previously sold entitlements on the basis that they would fall foul of the ‘negative list’ from 2015. The impact of these changes could be that additional demand from those looking to buy back entitlements that they had previously sold. There may even be an economic benefit in doing so depending on the timing of previous sails, as the current entitlement price is low at circa £130 per unit for Non-SDA.
Farmers using the first two ‘re-admission criteria’ must prove their eligibility by sending a ‘certification form’, signed by an independent solicitor/accountant, to the RPA based on financial information from the business’s latest completed accounting year, beginning no earlier than three years before the date of the claim.
There has been confirmation that renting out any of the following will not count as operating a ‘real estate service’:
1. accommodation facilities on a farm. i.e. bed and breakfast
2. apartments or homes that are in a farmer’s private property for housing purposes
3. part of buildings or surfaces on the holding
4. agricultural land to third parties
New & Young Farmers
Further details have been released in respect to proving one’s ‘young’ or ‘new’ farmer status. Young farmers (those less than 40 years old that took control of the holding within the 5 years before their first BPS application) and new farmers (those that have started farming in 2013 or later) can apply to the national reserve for new entitlements. Applicants must apply online by 15th May and must submit a ‘certification form’ to the RPA which must be filled in and signed by an independent solicitor/accountant as proof that they have seen documents showing the applicant is in ‘control’ (directly exposed to personal financial benefit or harm resulting from the success or failure of the business) of the agricultural business, the date that they took control of the business and their date of birth.
A table has been published which, although not exhaustive, gives details of what land features are eligible for BPS. This is broadly similar to the guidance in the last couple of years of the Single Payments Scheme with two exceptions. There does not appear to be a maximum width for a hedge. Previously hedges wider than 4 meters were not eligible however now the hedge will be eligible provided it is protected under Cross Compliance (i.e. it has a continuous length of at least 20 metres). The other exception, which has been widely publicised, is that land parcels containing solar panels are not eligible.
There is also confirmation that if a hedge is separated from arable land by an ineligible feature such as a stone track, the hedge can’t count as an EFA feature unless the other side of the hedge is on arable land.
More details are due to be published early in the New Year and fuller details for 2015 Cross Compliance are available here.
The rules regarding permanent crops have also been further clarified, in that the crop does not need to have been in the ground for five years before being eligible. This definition relates to the type of crop that would usually be in the ground for more than five years, as set out in the table in the RPA’s August update.
The latest guidance now confirms that EFA buffer strips must be visually distinguishable from neighbouring EFA fallow land. This will be important for those now planning for 2015, who should ensure that an inspector on the ground, or someone viewing an aerial photograph, would be able to tell the difference. This could be through different vegetation, heights, or land management practices.
2015 CAP Assistance
We are offering free CAP clinics to both clients and non-clients in order to help them register online for the new CAP Information Service (CAPIS). Our team are on hand to guide you through the process and having now registered ourselves, we are well placed to guide you through the process.
The RPA are now offering a telephone registration as well as the online Verify procedure. It seems at this stage that the telephone version is simpler and requires less personal financial information, which will be preferable to many. We understand that some claimants will be able to begin this process already, despite having not been invited by the RPA at this stage. In order to establish if you can register now one should contact the RPA on 03000 200 301 to get started.
If you would like further information about your specific situation or about the CAP including the registration process, or if you would like to arrange an appointment for one of our one to one CAP clinics please contact Ashley Taylor or Chris Allen.