Find out everything you need to know about how the new CAP will work in England with our Q&A.
The Basic Payment Scheme (BPS) replaces the Single Payment Scheme (SPS) on January 1, 2015.
The BPS application window will open in ‘early 2015’, probably in February.
The BPS application deadline is May 15, 2015.
Late BPS applications can be received up to midnight on June 9 but the payments will be reduced by 1 per cent for each working day the application is late after May 15.
The payment window will open in December 2015 and close in June 2016.
The new Rural Development Programme for England comes into force in January 2015.
Funding for some schemes will be available in 2015 but the New Environmental Land Management Scheme (Countryside Stewadship) will start in 2016, with applications opening in 2015.
The broad outline of the policy in England is in place but some key details still have to be resolved.
Defra is updating its information on the new CAP here and will publish final guidance early in 2015.
We will keep this Q&A up-to-date as new announcements are made.
To qualify for the BPS, farmers will for the first time have to pass an active farmer test. Farmers must declare they are an active farmer for the calendar year when they apply for BPS.
All farmers will qualify as an active farmer if they received a payment of €5,000 *£3,922) or less in the previous year (before any penalties were applied or cross compliance reductions were made).
Otherwise, this will have two parts. The first part is a negative list of business activities that do not qualify.
Businesses operating the following may not qualify:
The key word is ‘operator’. The farmer does not have to be the owner of the land or property the non-agricultural activity is operated on and the non-agricultural activity does not have to take place on agricultural land.
Farmers and landowners who fall into one of these categories still have the opportunity to qualify if they can meet certain criteria, which were changed in December, bringing relief to thousands of farmers.
The criteria, outlined in Defra’s latest CAP update, are now:
Farmers will need to send a ‘certification form’ to the RPA to show how they meet the last two criteria. This must be based on financial information from the business’s latest completed accounting year, beginning no earlier than three years before the year of the claim.
Defra has clarified what occupations qualify as ‘operating a real estate service’:
Renting out the following will not count as operating a real estate service:
Active farmers can claim for BPS on three types of land - arable, permanent grassland and permanent crops. This land must be ‘at their disposal.
Permanent grassland is land that has been used to grow grasses or other herbaceous forage (that has not been included in the crop rotation of the holding) for five years or more.
If the land has been re-sown with grass or other herbaceous forage during the past 5 years, it is still permanent grassland.
If land has been entered as grass or herbaceous forage on six consecutive SPS/BPS applications, it must be recorded as permanent grassland on the sixth application.
In its December CAP leaflet, Defra explains how various activities affect land eligibility.
Activities that do not affect eligibility include:
Walking, bird watching, nature/farm visits, horse or bicycle riding along bridleways, tracks, margins etc, fishing, hedge-laying competitions, local ploughing competitions or other demonstrations that do not affect the land being in good agricultural and environmental condition (GAEC), shooting game, deer stalking, drag hunting and para gliding and hang gliding.
Activities that won’t make the land ineligible for BPS, as long as they don’t last more than 28 days in the calendar year include:
Clay shooting, car boot sales, country fairs and shows, farm auctions and shows, horse riding activities using apparatus or fixtures, like show-jumping or an in-field cross-country course, ballooning, festivals and events, scout or guide camps, using land for television and film locations, caravan sites, motor sports, grass airstrips.
Activities that will not qualify for BPS include:
Sports facilities like golf courses, zoos and communal recreational land.
Features that will not qualify for BPS include: Solar panels (this has changed from SPS), farm buildings, animal shelters on hard standing, farmyards, gallops, pylons, residential gardens, polytunnels on hard standing and turf production for fuel.
The December Defra guidance provides more details.
SPS entitlements you hold on December 31, 2014, will become BPS entitlements on January 1, 2015 (but their values will change). You don’t need to have claimed SPS in 2013 to qualify.
If you are an active farmer, but you don’t have any SPS entitlements, you could get BPS entitlements by transferring them from someone else.
You might also be able to apply for new BPS entitlements from a national reserve, which might also allow you to top up entitlements if you already have some. The details on the national reserve are still to be confirmed.
The rules on activating entitlements will change under BPS.
You will keep your entitlements in 2015 as long as you declare enough hectares of eligible land on your BPS 2015 application to support them.
You need to match 1ha of eligible land to claim payment against an entitlement within a BPS region.
You don’t have to activate all your entitlements in 2015 but if you have more entitlements than eligible land, you will lose the excess entitlements. At least once in every two years, you must activate all your entitlements in a single year.
This means you won’t be able to ‘rotate’ your entitlements by swapping the ones you activate from year to year.
Defra has set a minimum claim size of five hectares, which means you need 5ha and five entitlements to qualify.
With the current threshold at 1ha, the change will exclude an estimated 16,000 small claimants from the BPS.
From mid-January 2015, you will be able to sell or lease your BPS entitlements to someone else, as long as they are an active farmer. You will also be able to lease, as well as sell, entitlements on their own, without land.
Defra and RPA will issue more details on this in early 2015.
If you are an active farmer but do not currently have entitlements, you can purchase them from another farmer (see above) or apply for new BPS entitlements from the National Reserve, which will account for approximately 3 per cent of England’s SPS budget.
To apply for entitlements from the National Reserve young (over 18 and 40 or under at time of application) and new (started agricultural activity in 2013 or later) farmers will have to prove they are ‘in control’ of the agricultural business.
They must show they are directly exposed to personal financial benefit or harm resulting from the success or failure of the business. A majority of shares and votes will give ‘control’ over the business. More than one person can ‘control’ the business in some circumstances.
To prove their status, they will need to take certain documents to an independent solicitor/accountant who is not an employee of the
business, which show:
For more details see Defra’s December CAP leaflet.
The largest payments will be reduced. Where any BPS payments exceeds €150,000 (excluding greening and any young farmer payment), the amount above the €150,000 threshold will be reduced by 5%.
Defra refrained from the options available of deeper cuts to large payments, including a complete cap for payments above €300,000.
Defra has reallocated the distribution of funding between England’s three payment areas, reflecting a long-standing commitment to ‘move money uphill’.
The Severely Disadvantaged Area (SDA) and lowland rates have been merged, €244/ha, with the moorland rate virtually doubled to €70/ha.
The value of the payment in sterling won’t be finalised until September 2015.
The current exchange rate (May 2014) of €1 = £0.79 gives and indicative lowland value of around £192/ha and a moorland rate of around £55/ha.
The table below shows the impact of the decision to move money uphill on payment rates in the three regions.
|SDA moorland £/ha||SDA £/ha||Lowland £/ha|
|2013 average payment, 9% modulation||37||211||263|
|2015 12% modulation no money uphill||35||201||251|
|2015 12% modulation money uphill||70||244||244|
* The value of the payment in sterling won’t be finalised until September 2015.
* The current exchange rate (May 2014) of €1 = £0.81 gives indicative lowland and SDA values of around £200/ha and a moorland rate of around £57/ha.
The moorland and Severely Disadvantaged Area (SDA) rates have both been increased by €33/ha, compared with the 2013 SPS rates. The lowland rate has been reduced by €19/ha, compared with 2013.
The middle row shows how payments would have fallen if the current allocation between the regions was carried through to the BPS (given other reductions to the direct payment budget, including the 12 per cent modulation deduction).
It shows a more accurate cost to lowland claimants of €7/ha from the decision to bolster SDA and moorland payments by €33/ha and €35/ha respectively.
Ministers have long have stated a desire to use CAP reform to protect some of the country’s most vulnerable farmers and the wider benefits associated with hill farming.
The move is also a recognition that, with the end of Upland ELS, farmers will no longer have universal access to environmental payments under the New Environmental Land Management Scheme.
Defra announced last year that the lowland rate would be merged with the Severely Disadvantaged Area (SDA) rate.
A proposal to virtually double the moorland rate to €70/hectare deferred, after the NFU argued more details were needed about the wider reform before the figures could be finalised.
The decision was confirmed in April.
Approximately 30% of the BPS will depend on meeting new ‘greening’ rules. This means farmers will have to comply with three basic measures.
Greening primarily affects arable farmers.
Land certified as organic will qualify for the greening payment automatically. Various other exemptions apply (see below).
The most thorough summary of greening rules can be found in Defra’s August 2014 CAP leaflet.
Farmers with between 10ha and 30ha of eligible arable land in 2015 will need to grow at least two crops. The largest crop must not cover more than 75% of your arable land.
Farmers with over 30ha of eligible arable land will need to grow at least three crops. The largest crop must not cover more than 75% of your arable land and the two largest not more than 95%.
Arable land is classed as land cultivated for crop production. It includes normal arable/combinable crops/vegetable land/temporary grass/fallow land. Permanent crops are not arable land.
There are exemptions from this rule, including:
Where more than 75% of eligible arable land is temporary grassland or fallow and the remaining arable land is more than 30ha, the grassland or fallow can be counted as the main crop, the NFU says.
Here, the pecentage of land covered by this crop does not need to be reduced below 75 per cent. Two other crops must be grown with one not counting for more than 75%.
A crop is generally defined at the genus level, for example, wheat and barley, except for brassicas where the definition is at species level.
Defra has published a list of what qualifies as a ‘crop’. The list can be viewed here, starting on page 23 of Defra’s August CAP update, which includes details of ‘how greening works in practice’.
Crops such as wheat, barley, beet (including sugar beet, fodder beet and beetroot), oats, linseed and peas will count as single crops.
Others will be grouped together with onions, garlic and leeks counting as one crop, as will cabbages, cauliflower, broccoli, sprouts and kale.
Fallow land and temporary grass will count as crops.
Winter and spring varieties of a crop will count as different crops. Spring and winter crops will be designated on the basis of how they are listed on the National List and the PGRO Recommended List.
Where a main crop is undersown with a second crop, only the main crop will count. If two different seed mixtures are sown these can, subject to certain criteria, be counted as separate crops.
The inspection period for crop diversification will be from May 1 to June 30. Where crops are harvested before June 30 RPA will accept stubble as evidence. The NFU said it was awaiting Defra guidance on exceptions for late sown crops, crops with short growing periods and those with a continuous harvest operation.
Farmers with more than 15ha of eligible arable land must create an Ecological Focus Area (EFA), which must be equivalent to 5 per cent of their total eligible arable land. EFAs might increase to 7 per cent in 2017, following a review.
There are various exemptions, including:
To establish an EFA equivalent to 5 per cent of the arable area, farmers have a choice of any combination from the following list of five options. Options are weighted to reflect their supposed environmental value.
Catch/cover crops must consist of at least two cover types (one cereal, one non-cereal) that establishes quickly, achieves ground cover and utilises nutrients. Catch crops need to be established by August 31 and retained until October 1. Cover crops need to be established by October 1 and retained until January 15 the following year. Grazing should be avoided.
Nitrogen fixing crops have to be in the ground for the same period as under crop diversification. There will be no additional restrictions, such as on pesticide use, for nitrogen fixing crops. These crops will also count towards the crop diversification measure. Lists of Nitrogen fixing crops are in the Defra guidance.
Fallow land must be maintained in a state suitable for grazing or cultivation and must be in place for the whole of the fallow period (Jan 1 to June 30). It must be at least 2m wide and have no crops planted on it during the fallow period, although ‘unharvestable’ wild bird mixes or nectar sources are allowed.
Buffer strips must be at least 1m wide and next to a watercourse. Grazing and cutting is allowed as are wild bird mixes and nectar sources but there must be no production. The same buffer strips can be used for greening and cross compliance.
Hedges must be at least 20m (or less where it meets another hedge at both ends) and can include gaps. The definition is the same as for cross compliance. The length of the hedge must be located next to arable land. Hedges can be counted if separated from arable land by a feature which is eligible for BPS. The rules are complex. Ideally the hedge will have arable land on both sides but a farmer is responsible for both sides of a hedge and only one side is next to arable land, they can count the whole hedge. If they are only responsible for the arable side, they can only count half the hedge towards EFA.
Defra and RPA initially warned that farmers taking the hedges option might have to apply earlier and could be paid later, although these fears have been partly allayed in more recent communications.
Farmers will have to measure their own hedges. Maps including hedges for Entry Level Stewardship (ELS) or Higher Level Stewardship (HLS) will be good enough to meet EFA rules.
The Rural Payments Agency will also need to digitally map England’s hedges to validate farmers’ claims.
Other possible features – such as ditches, ponds, copses and stone walls – might be added as EFA options in future years, however, subject to discussions with Brussels.
Under EU double-funding rules, farmers cannot be paid twice for the same hedgerows or field margins, for example, under greening and agri-environment schemes.
However, Defra said 90 per cent of ELS and all Higher Level Stewardship (HLS) agreements would not have to have their payments adjusted for greening, partly because ELS agreements that started before 2012 will not be affected.
But around 4,000 ELS agreements (including Upland and Organic ELS) which started on 1 January 2012 or later are affected and could have their payments reduced.
For post-January 1, 2013 agreements, in some cases there will be enough ‘surplus’ to cover both ELS and greening.
Where there was not sufficient surplus, ELS agreement holders had three options:
Farmers had until November 15 2014 to tell Natural England of their choice.
Permanent grassland is land that has been used to grow grasses or other herbaceous forage for five years or more. It can be self-seeded or sown.
Under Defra’s greening rules, the percentage of permanent grassland – compared to the agricultural area – in England must not fall by more than 5 per cent.
If this happens, farmers who have ploughed permanent grassland may have to reinstate it and there will be restrictions on any further ploughing of permanent grassland.
Importantly, this is being measured at national level, rather than individual farm level, which would have put farmers under more pressure.
If you enter land as grass or herbaceous forage on six consecutive SPS/BPS applications it must be classed as permanent grassland on the sixth (unless it has been used to grow a catch crop between applications). The new CAP IT system is likely to automatically change this.
Greening is mandatory and penalties for EFAs and crop diversification will be calculated separately and based on the extent of the failure to comply.
Penalties for non-compliance will be in the form of a reduction in the greening payment.
The maximum penalty for non-compliance with both EFAs and crop diversification is the full 30 per cent greening payment on arable land.
From 2017, an extra 20 per cent of the greening payment could be removed for ‘administrative penalties’.
This Defra document gives more guidance about qualifying for and complying with the greening requirements.
This will provide a top up young farmers’ BPS. The top-up will generally be worth 25 per cent of the average value of all the entitlements you hold - up to a maximum of 90 entitlements.
Young farmers will have to apply for it each year.
The young farmer payment can be claimed for up to five years after the year you started or took over control of your business. The five years could have started before 2015.
If more young farmers apply in one year than the budget can support, the percentage each person gets could be less than 25%
You can apply for the scheme on behalf of a company or partnership if the relevant criteria are met.
The RPA published new cross compliance guidance in December, you can view it in full here.
For many the biggest change will be a one-month extension of the ‘no trimming’ season for hedges and trees. It will now run from 1 March until 31 August inclusive. A derogation may be available to those wishing to sow oil seed rape or temporary grassland during August.
Other key changes include:
Common land will be eligible for BPS, but details of the rules have not yet been announced. The rules are likely to be similar to SPS, where commoners activated their entitlements against a ‘notional area’ of a common in proportion to the number of rights they hold to graze animals on the common.
Defra said it was talking to the other UK administrations to agree what cross-border farmers need to do to meet the rules of the new schemes.
No. Defra has rejected outright the option of using coupled subsidies in England.
The key application dates are:
All new CAP schemes, including BPS and rural development schemes, will be applied for under the new £154 million online rural payments service developed by Defra and the RPA.
Before farmers can access the scheme they will have to go through a verification process, common across a number of online Government schemes. This can be done via on the online Gov.UK Verify system or by contacting RPA over the phone on 03000 200 301.
As of mid-January, some farmers and agents have tried to register and access the system, with mixed results. The NFU expressed concerns that the RPA was increasingly asking people to register over the phone because of problems with online registration - many farmers were unable to get through this because they lacked the credit history details required.
The NFU also expressed concern over the accuracy of the individual user data that was being transferred onto the new system from the old one for those that have accessed the system. It queried the potential resource implications for RPA of dealing with these issues.
The RPA said it would be be inviting more farmers to get online in January to register, check their business details and give people permission to be able to handle their 2015 BPS claim.
When farmers access, their key personal and farm details should have been transferred over from the old system.
The online system is designed to cope with the complexities of the new mapping requirements thrown up by the greening rules.
It allows those filling in the forms to draw round features that make up greening EFAs and then automatically calculates and records the area. It is also designed to record the necessary details farmers need to comply with the crop diversification rule.
Other features include the ability to give permission to others, for example agents or family, to complete the application on your behalf.
Defra and RPA insist the lessons have been learned from the disastrous implementation of the Single Payment Scheme in 2005. The system has been regularly being tested with farmers and then tweaked accordingly.
No. Defra and RPA want this to be an online-only system. They point out that, with the extra mapping requirements associated with the new policy, particularly regarding greening, it would to be difficult to submit accurate applications via paper.
This year, despite the well documented problems with SPS Online, 68 per cent of claims were made online.
The RPA expects to increase that number next year but its research suggests about 20 per cent will be unable to access its online service due, for example, to lack of computer knowledge, disability or poor broadband access.
The agency will offer an ‘assisted digital service’ for these people, looking on an individual basis at how they can get online.
It has contacted about 13,000 of those it has identified as having never communicated with the Government online to ask if they require assistance with what will be an online-only process.
Its Assisted Digital package includes:
“Those who genuinely need help will be given help,” a Defra spokesman said.
Guidance will continue to be made available – online and in paper form – for all users of BPS in the first year.
England’s new Rural Development Programme will begin in January 2015 but its central feature, the Countryside Stewardship Scheme (CSS) will not start until 2016.
There will be 3 main areas of support:
Defra is allocating £3.1 billion to the new Countryside Stewardship Scheme.
CSS will effectively bring together Environmental Stewardship and the England Woodland Grant Scheme.
It will be a single agreement with no separate strands for organic or upland farmers. Unlike ELS, it will not be a whole-farm scheme but will fund particular areas of the holding.
It will generally offer five-year agreements, with the option of annual extensions for a further two years. In some cases, 10-year agreements will be offered.
There will be a single start date of January 1 each year, with the first agreements starting on January 1, 2016.
It will incorporate two main strands.
One of the big differences between CSS and Entry Level Stewardship is that many farmers outside the selected areas will have no access to the new scheme beyond the universal grants.
Around £140 million will be allocated to supporting farming and forestry businesses. Applicants will need to bid for a share of this funding to:
Around £177m will be allocated to rural businesses through Local Enterprise Partnership and LEADER Local Action Groups.
The partnerships will decide how much money they allocate in their area to various schemes:
Local Action Groups will have a further £138m to spend in rural areas on the rural economy and creating jobs.
Funding will be available to farmers, foresters, other local businesses and rural communities.
They include the December CAP update, which includes an important update on the Active farmer rule.
There is also a Defra CAP reform blog
Defra has also published a CAP reform timeline
Visit the RDPE network website to find out more about the new Rural Development programme