What greening means for next year

With the Independence debate rightly hogging the headlines the day to day business of running our farming businesses has perhaps been overlooked. Cab Sec Richard Lochhead in June gave us the outline of how the Scottish Government (SG) intend to apply the Common Agricultural Policy from 1st January 2015 when we will witness the death of the Single Farm Payment Scheme (SFP) and the birth of the Basic Payment Scheme (BS).

SG has made much of its desire to restrict payments to actual farmers and to stop payments to those dubbed slipper farmers. Under the Scottish Clause, land with no farming activity on it will get no Pillar 1 payments. The BS will apply strict activity requirements which farmers will have to meet to be eligible for payment. SG estimated that 600,000 hectares of land with no agricultural activity will be removed as a result of this from the payment regime.

SG plan to introduce a cap during the course of the scheme on the BS at around £400,000 per year, after labour costs and the trigger year for payment entitlements for the area claimed has been set as 2013, having been rumored to be any year from 2011 to 2014. Sectors that have been frozen out in the past, such as deer farmers, will be eligible for the first time and the two or three region conundrum has been answered, with three payment regions being opted for.

Region 1 will comprise land classified as arable, temporary and permanent grass, Region 2 that designated as rough grazing in the non-LFA, and in LFASS grazing categories B, C and D, and Region 3 that designated as the poorest rough grazing, in LFASS category A.

The payment rates have been set at around €220 (£176) per hectare for Region 1, €35 (£28) per hectare for Region 2 and Region 3 €10 (£8) per hectare including greening.

The Beef sector will continue to receive support, but in a revised guise with beef farmers receiving a payment of roughly twice the current payment per calf for the first ten calves and a flat rate for any others. Compared with the current scheme, we are told that a 100 cow beef herd will receive over 50% more coupled support post January 2015.

SG are also making £45 million of new money available over three years for the new Beef 2020 package. This package will aim to provide financial support to producers on issues such as genetics, performance and reducing their carbon footprint. ‘

What is also new is that within Region 3 SG propose to introduce a coupled support payment for sheep at the equivalent of around €25/ewe. Quite how this is to be implemented requires to be clarified and is indeed subject to agreement from the rest of the UK.

Payment levels from the existing SFP to BP will be phased over a five year transition between 2015 and 2019 and that new entrants, previously excluded from the SFP, will receive the regional average from 1st January 2015.

New entrants and those without SFP entitlements will be disappointed that BPS has not been implemented in full from 1st January 2015, while those with large SFP entitlements will be please, if not delighted, at the chance to adjust their businesses over the next five years.

What is incredibly annoying is that while our southern cousins have clarity on the Greening requirements SG has taken their eye off the ball and missed the 1st August 2014 deadline to complete the necessary negotiations and therefore for 2015 we must comply with Europe’s standard greening measures and wait until 2016 at the earliest until an equivalence scheme can be established.

So for 2015 greening for us means that:-

  • we must maintain existing permanent pasture, which really means that at a national level we must maintained the area of permanent pasture at the area recorded in 2012.
  • apply crop diversification on arable land, or what is commonly known as the three crop rule, which means that farms with more than 30 hectares of arable land must grow three different crops. The main crop must not exceed 75% and the two main crops can’t account for more than 95% of the arable area.
  • establish Ecological Focus Areas (EFA). Sounds a bit like set aside to me, but needs to be at least 5% of the arable areas and can include such items as fallow fields, water margins, field margins, catch crops and nitrogen fixing crops.

The under 40 new entrants will be delighted to have receive confirmation that they can apply to the Young Farmer Scheme (YFS) for a top up payment. I understand that these payments will be based on 25% of the regional entitlement average and for a maximum of 90 hectares.

So the good news is at last SG are rolling out the information to us, but it has taken far too long to happen and the information is being distributed far too late in the year and in marked contrast to 2005 when the roll out of the SFP was completed in plenty of time to allow farmers to plan ahead and were not receiving the information after autumn cropping plans had been made and in some case crops themselves had been established.

By Mark Mitchell, Director of Bell Ingram Ltd

Published on 29th August 2014