The 2017 Omnibus Regulations have now taken effect, resulting in significant changes to the ‘Active Farmer’ regulations, and the way Great British and Northern Irish farmers qualify for the Basic Payment Scheme.
The Active Farmer requirement of the Basic Payment Scheme is one of the features of the CAP that has caused the most confusion among UK farmers since the start of the current scheme in 2015 and, in the case of Northern Ireland in particular, has often added to the headaches that can be caused during the application season.
The requirement for a claimant to prove their status as an Active Farmer is prescribed by Regulation (EU) No. 1307/2013, which provides the criteria a farmer must meet in order to be eligible to receive direct payments under the CAP. The other criteria that must continue to be met is carrying out the ‘minimal requirements’, i.e. carrying out sufficient agricultural activity on the land being claimed on, and having the right to claim upon the land.
Part of the difficulty with the Active Farmer requirements is that each paying authority (RPA, RPW, DAERA, SGRPID) is given considerable freedom over how active farmer status is proven. This means that requirements in each of the four regions are different, although there is a general framework laid out in Regulation (EU) No. 1307/2013 that must be met. One of the key parts of this EU legislation is the ‘Negative List’.
The Negative List states those businesses which would normally exclude a claimant from the BPS, unless they can show that they meet the readmission criteria. Businesses on the Negative List include:
- Real estate services
- Permanent sports grounds
- Railway services
Following the Omnibus Regulations, from 2018 the English, Scottish and Northern Irish payment agencies have all decided to relax the Active Farmer criteria, with the RPA removing the Active Farmer regulations entirely. Below is a brief summary of the latest Active Farmer regulations in each of the four regions:
- The RPA have stated that the Active Farmer requirement has been completely removed from BPS 2018.
- Those who were previously unable to claim under the BPS due to the Negative List may now submit a claim.
- However, the Active Farmer check box still remains on the online application form, and must still be ticked – this is because the RPA are unable to update their computer system in time for the 2018 claim year.
- Claimants should also be aware that although the Active Farmer test has been removed, they must still be actively farming the land they wish to claim on, and must still comply with all Greening and Cross compliance regulations to successfully claim the full BPS payment.
- The Negative List has been removed from BPS 2018, however farmers must still qualify as an Active Farmer.
- This means that they must meet the legal definition of a ‘farmer’ and they must be carrying out the required minimum level of agricultural activity on the land they intend to claim upon, i.e:
- Region 1: Growing and harvesting crops, rearing and breeding livestock or, where land is not being used for production, actively maintaining it in a state suitable for grazing or cultivation (i.e. clearing scrub, maintaining stock-proof fencing etc.)
- Regions 2 & 3: Meeting the minimum stocking requirements (usually 0.05 livestock units per hectares on all hectares for at least 183 days each year), carrying out an annual Environmental Assessment across the holding, or a combination of the two.
Wales is the only one of the four regions that has not altered the Active Farmer regulations for 2018.
- All farmers with a claim value of over €5,000 per year must pass the ‘Active Farmer’ test.
- Claimants must meet also the definition of a farmer by carrying out a minimum level of agricultural activity on their land.
- Those who operate businesses on the Negative List must meet at least one of the readmission criteria to pass the test:
- The amount of Direct Payments received equals at least 5% of the receipts obtained from non-agricultural activities;
- The claimant’s holding is more than 21 hectares;
- The total receipts from agriculture represent at least 40% of the total business receipts in the most recent financial year for which evidence is available.
Proving Active Farmer status in Northern Ireland is possibly the most arduous of all the regions, however changes made this year should help to make this easier.
- DAERA has removed the Negative List from the Active Farmer requirement for the 2018 scheme year; however claimants must still qualify as an Active Farmer.
- A claimant’s status as an Active Farmer is proved by providing sufficient evidence to DAERA to demonstrate all of the following:
- The claimant holds the decision making power in the farming business;
- The claimant enjoys the financial benefits of the business;
- The claimant bears the financial risks of the agricultural activity.
- Evidence required by DAERA includes invoices and receipts for the sale of produce and purchase of agricultural inputs, copies of farm accounts prepared by an independent qualified accountant, and bank statements relating to the previously mentioned receipts and invoices.
UK YOUNG FARMER TOP-UP PAYMENT
The Young Farmer top-up payment is different in all the UK regions. This year England has changed the criteria for applying for the Young Farmer payment, details of this change and whether this change has been applied in the regions is given below:
In England the ‘Young Farmer’ payment is a top-up of 25% of the average value of all entitlements that are held by an applicant and is applied to the first 90 entitlements that they use.
- To be eligible to claim the Young Farmer payment applicants must be at least 18 years old but not more than 40 in the year they first apply for the Young Farmer payment.
- They must be in control of the farming business in that they have over a 50% sharing vote (two young farmers can combine their votes to prove control of a business if their votes combined equal over 50%) or be a sole trader.
- The applicant must have made their first BPS application within five years of taking control of the business.
There has been a change to the Young Farmer Payment rule for 2018 in England in that the payment can now be claimed for a maximum of five years from the first year a successful Basic Payment application is made, unlike in previous years in which the payment could only be received for five years from the year that the applicant took control of the farming business.
Effectively this extends for some this extra payment, but this change does not allow any applications for backdated payments prior to 2018.
Examples from the 2018 RPA BPS handbook
A farmer’s date of birth is 6 April 1975. He makes his first BPS application in 2015. At the time of that application he is 40 years old. Providing he meets the other criteria, he will be classed as a ‘Young Farmer’ up to and including 2020.
A young farmer set up or took control of their business in 2011 and made their first BPS and Young Farmer payment applications in 2015. They were previously only able to claim the Young Farmer payment in 2015 and 2016 and were not eligible to claim in 2017 as this was more than 5 years from the year they took control of their business. Under the new rules that apply from 2018, this farmer is now eligible to claim the Young Farmer payment again in 2018 and 2019 i.e. 5 years from their first Young Farmer payment application in 2015. They would still not receive the payment for 2017. See https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/688531/BPS_2018_scheme_rules_v1.0.pdf for more detailed information.
In Wales the Young Farmer applicant can claim the 25% top up on the first 25 hectares on the holding for 5 years from their first Young Farmer claim rather than the year they became head of the holding.
A Young Farmer in Scotland can still only receive a Young Farmer top-up payment for 5 years from the date the business was first established. See https://www.ruralpayments.org/publicsite/futures/topics/all-schemes/basic-payment-scheme/basic-payment-scheme-full-guidance/main-features—bps/#44122 for more information.
In Northern Ireland also, a Young Farmer application can only be made for 5 years from the date a business was set up or the Young Farmer became head of the holding. See https://www.daera-ni.gov.uk/sites/default/files/publications/daera/17.18.247b%20Guide%20to%20the%20YFP-RR%20Final%20V2.PDF for more information.