The last few weeks has seen everything now “fall into place” for England, or perhaps fall out of place, and then fall back into a different place! We all expected the chaos at the RPA, as with the introduction of the Single Payment Scheme, although it is difficult to accept the inevitable knock-on effect of needless destruction of farm cash flows yet again, with the Basic Payment Scheme (BPS). There is some weary relief that finally we know what is involved this year, and can start to prepare claims, after the many years the BPS has been in gestation, with the politicians “drip-feeding” its development bit by bit. As always it is the final detail that counts, illustrated by what eventually happened to the Active Farmer Test, which in the end was a “non-event”. The new rule requiring a minimum claim of 5 ha brought an unexpected surge in people looking for extra land to claim on and small amounts of extra entitlements, to bring their claim over this level and retain their payments, rather than selling what they had. The first window of trading for 2015 up to October last year saw an average price for Non-SDA at £130 per ha, but now is at £100 per ha, with it maybe only just “sinking in” now that unused entitlements in 2015 will be lost to the National Reserve. In many ways the depressed entitlement price, whilst a tiny percentage of current land values, only helps to encourage its increase in value. In income/financial terms entitlement ownership is a “no brainer” and still makes all the difference to those actually farming the land.
We now face a return to another year of paper claim forms, probably welcomed by stock farmers with a single button application option if there are no changes from last year, but now allowing far more room for error with arable farmers having no longer the online calculator facilities that would have been available on the now failed RPA online system.
The CAP reform is therefore causing some unsettled times for farmers, added to with the new threat to the milk price with the end of milk quotas on the 31st March.
Fortunately the deadline for entitlement transfers has now been made the same as for the BP5 claim form submissions on the 15th June (the 15th May remains however the date at which land needs to be “at your disposal”), giving everyone the much needed “breathing space” to catch up with what the RPA is up to and are expecting. This also will relieve concerns with some farm sale timings and also allow time for those with more land than entitlements to consider leasing in entitlements and hosting these from those with too many, now the RPA have finally “given in” and allowed leasing without land. This will make the English uptake of subsidies that more efficient, and now avoid the risks of naked acre letting and claims of artificiality, which hampered farmers making the most of their SPS payments.
In the other UK regions, where entitlements have not “rolled over” and are being reallocated for this first year of the BPS, Wales is rethinking the Moorland line and the mapping of all regions, with a consultation deadline of the 23rd June. They are however sticking to the 15th May claim deadline, as is Northern Ireland where many landlords are becoming “Active Farmers”, taking land back in hand. Scotland has followed England in moving the deadline back to the 15th June with their “Slipper Farmers” who rented in naked acres still at threat from a potential Windfall Tax provision.
