The new SPS 2014 RPA Handbook has provided more flesh on the bones for the CAP Reform. As we know the 1st January 2015 will see the Single Payment Scheme come to an end and the Basic Payment Scheme (BPS) begin. There are two main points of this transition that will have an impact on business planning and cropping now in 2014 and farmers and land managers need to watch out this year to ensure that they do not fall foul of the requirements for crop diversification in 2015. The second point relates to entitlement transfers. Our predictions have now been confirmed by the RPA, with some minor alterations limiting entitlement transfers in the second half of 2014 for the 2015 Scheme Year.
1. Entitlement transfer for the 2014 Scheme Year will continue up until the deadline, as usual, on the 2nd April 2014. Entitlements will then be able to be transferred (for the 2015 Scheme Year) up until midnight on the 19th October 2014. However as these transfers would be actioned under the SPS legislation, the new ‘active farmer’ test will not apply to these transferees, as it will to those transferring under the BPS in 2015. From the 19th the RPA will process RLE1 forms and then begin converting SPS entitlements into BPS entitlements.
2. Entitlement transfers will recommence in mid-January 2015 but the ‘active farmer’ test, whatever this might be, will then be applied to those transferring in entitlements. It is also expected, and very much welcomed, that transfers from 2015 will be using an online system, rather than traditional RLE1 forms. This could leave some time in 2015 to arrange transfers, however it is uncertain at this stage whether there will be an entitlement transfer deadline under the BPS, as there may not need to be a six week processing time if transfers are planned to be online. DEFRA comment that they do not plan to alter the May claim date drastically if they can help it, however this is yet to be confirmed under the BPS, therefore prudent farmers would be advised to arrange transfers of entitlements needed for the 2015 claim prior to the 19th October. This suggests that there may be an early market for entitlements after transfers for the 2014 Scheme Year have concluded in April. Some may also wish to try and benefit from being able to transfer in entitlements without undergoing the ‘active farmer’ test, the significance of which we will hopefully know more about before October.
3. Leased entitlements due to be returned during the closed period for transfers will revert to the lessor as planned.
4. Entitlements held on the 31st December 2014 will become BPS entitlements on the 1st January 2015. There are no requirements to have claimed in 2013 or 2014, as was looked at during the initial CAP proposal stage and may be required in other parts of the UK.
5. Any entitlements not activated in 2015 will be lost, thereafter the two year usage rule will recommence.