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Pillar 1 - Basic payment scheme
Basic Payment Scheme starts from 1 January 2015, so planting in autumn 2014 will fall under the BPS.
It is direct payments paid as income support to farmers and for some public goods, such as
environmental management, demanded by the European public.
Eligibility
Entitlements
Greening
grasslands must not be not ploughed as at present.
Payment R ates
Minimum claim size 5 hectares.
Single Payment Scheme (SPS) entitlements will be
converted one for one to BPS entitlements on 31
December 2014.
30% of the BPS payment is paid for meeting the three
mandatory greening requirements.
Requirement 3: Ecological Focus Areas (EFAs)
If you have more than 15 ha of arable land, at least 5% of your
arable land must qualify as EFA. There are five options.
10% compulsory EU modulation is now taken off
National Ceiling, not entitlement value as under SPS,
so more ‘hidden’ from farmers.
Must be an active farmer, which means anyone who is
not on the ‘negative list’, which includes airports, water
companies, railways, real estate services, sports grounds.
Need to keep land in a state suitable for grazing or
cultivation. It is not clear whether this will require a
minimum level of activity, which is very important for
conservation bodies. Key details are not yet agreed.
Cross-compliance will continue.
If you have more entitlements compared with land
area you will lose the surplus entitlements (including
leased ones).
Entitlement transfer window closes six weeks before the
15 May claim date.
National reserve for hardship cases, new entrants and
young farmers will be introduced.
The three current entitlement regions will continue –
lowland, Severely Disadvantaged Area (non-moorland)
and SDA (moorland), with payments doubled to support
hill farming.
If you do not comply 30% of BPS is lost in 2015 and 2016 with
a higher penalty from 2017.
Requirement 1: crop diversification
< 10 ha of arable land
No requirement
10 ha – 30 ha
2+ crops of which main crop can be
no more than 75% of the area
> 30 ha
3+ crops of which main crop no
more than 75% of area and 2 main
crops no more than 95% of area
Does not apply where:
> 75% arable land is used for temporary grass or left fallow
(as long as remaining cropped area is <30 ha)
> 75% holding is used for permanent or temporary grass
(as long as remaining cropped area is <30 ha)
New land and different crops (both must apply)
1. More than 50% of the arable land was not declared on the previous years claim
2. All arable land declared is being used to grow a different
crop from the previous year
Requirement 2: protection of permanent grassland
There will be no ‘on-farm’ area control provided permanent
grassland area (i.e., grass over 5 years old) does not decrease by
more than 5% across England. Environmentally sensitive
Land laying fallow
1 ha = 1 ha of EFA
12% voluntary England modulation from Pillar 1 to Pillar
2. This will be reviewed in 2016 with likely increase to 15%
from 2018 onwards to fund agri-environment schemes.
Areas with catch crops or
green cover
1 ha = 0.3 ha of EFA
No voluntary modulation from Pillar 2 to Pillar 1.
Areas with
nitrogen-fixing crops
1 ha = 0.7 ha of EFA
Buffer strips
1 linear metre = 9 m2 of EFA
Hedges
1 linear metre = 10 m2 of EFA
Does not apply where:
> 75% arable land is used for temporary grass, leguminous
crops or left fallow
(as long as remaining cropped area is < 30 ha)
> 75% holding is used for permanent or temporary grass
(as long as remaining cropped area is < 30 ha)
“Double funding” of EFA options not allowed so holders with
affected ELS/OELS agreements which started on or after 1
January 2012 will be contacted by Natural England and have
the choice of amending their ELS/OELS agreement or exiting the
scheme without penalty.
EFA expected to rise to 7% by 2017.
Young farmers scheme
25% top up of BPS payment for up to five years for
farmers less than 40 years old in 2015, who have a
controlling interest in a business that is less than five
years old. Capped at 90 hectares. There maybe skills
and training requirements. Worth maximum of £4,500
per year.
No other voluntary schemes implemented in England.
Payments over €150,000 reduced (capped) by mandatory
5% therefore farms over 1,500 acres are likely to be
affected. This is the minimum Defra could have applied.
Greening payments not capped. Capped payments go
to Pillar 2.
Eligibility region
£ per hectare in 2014/15
Lowland
£195
SDA (non-moorland)
£195
SDA (moorland)
Top-up
schemes
£56
Please visit smithsgore.co.uk/cap
to access our English greening calculator
EFAs do not need to be mapped until 2018.
Organic farmers are exempt from all three aspects of greening.
Pillar 2 - Rur al Development
This promotes competitiveness, management of the environment and development of rural areas.
The UK continues to get small share (2.7% of the pot despite having 10% of the area) as the
hoped for redistribution between Member States did not happen.
The key issue for the UK is how to use a smaller budget, much of which is already committed to
existing agri-environment scheme agreements.
Market Intelligence Report
Agri-environment
Spending levels
Other issues
The New Environmental Land Management Scheme
(NELMS) will replace Environmental Stewardship (ELS and
HLS) and the England Woodland Grant Scheme from
1 January 2016.
Agri-environment will remain the biggest spend by
England.
The names of all people receiving CAP payments will be
published.
5 year agreements (longer when needed)
One agreement per holding
Payment rates will be based on the Euro Pound exchange rate
for the whole of September (not just 30 September).
30%
£3.1bn
Environment inc agri-environment
‘Mid tier’ targeted to special areas
No replacement for ELS
Small-scale capital grants are likely to be available
Farmers can combine for landscape-scale applications
More focus on water quality, soils and flooding
No separate upland or organic schemes
13%
5%
Economic growth
£177m
4-5% £140m
“The reform has been as benign as it could have been given Europe’s finances. Defra has not implemented many
of the original unworkable proposals but registering entitlements and greening still need careful planning.
Please contact me or my farm management team to get the latest information
and to assess how the reforms might affect your business.”
Cross compliance is largely the same although some
requirements have been removed. The closed period for hedge
cutting has been extended to include August.
Minimum
spending levels
More targeted / guided / advised
‘Upper tier’ like HLS for high importance areas
CAP Update
England - as at 10 June 2014
The EU wants to ban dual claims, where two parties, such
as landlord and tenant, claim different payments over the
same land, such as agri-environment scheme payments and
BPS. Defra supports dual claims and is discussing with the
European Commission.
Local Enterprise Partnerships
LEADER
Whilst every effort has been made to ensure the accuracy of this briefing, its information may not be comprehensive and may be superseded by subsequent EU or national announcements. Recipients should not act upon it without seeking full professional advice.
Simon Blandford
01962 857405
simon.blandford
@smithsgore.co.uk
smithsgore.co.uk
Pillar 1 - Basic payment scheme
Basic Payment Scheme starts from 1 January 2015, so planting in autumn 2014 will fall under
the BPS.
It is direct payments paid as income support to farmers and for some public goods, such
as environmental management, demanded by the European public.
Eligibility
Entitlements
Greening
Minimum claim size 3 hectares.
It is proposed that Basic Payment Scheme (BPS)
entitlements will be granted based on the smallest area
of land claimed in 2013 or 2015.
30% of the BPS payment is paid for meeting the three
mandatory greening requirements.
Must be an active farmer, which means anyone who is
not on the ‘negative list’, which includes airports, water
companies, railways, real estate services, sports grounds
and sporting estates that can’t prove they have a
genuine farming business.
Deer farmers are now considered eligible.
Need to keep land in a state suitable for grazing
or cultivation and have a minimum stocking rate or
alternative measures on all land, including rough grazing,
to penalise slipper farming. This is known as the Scottish
Clause.
New grant of entitlements to move from historic system
to regional system – known as ‘internal convergence’.
The Scottish Government is consulting on this and has
opted for convergence between 2015 - 2019.
Each year there will be a national reserve for hardship
cases, new entrants and young farmers. Entitlements will
be worth the regional average. There will be flexibility to
deal with transfers, business changes and fruit, vegetable
and potato growers.
There will be three entitlement regions - see payment
rate table on right.
There will be a siphon on sales of entitlements without
land and on windfall profits on entitlement value when
a lease ends or is sold.
An EU Commission proposal for a 7% EFA rate is expected
by 31 March 2017.
EFAs do not need to be mapped until 2018.
The Scottish Government is recommending that greening
payments are based on regional BPS payments, which seems
sensible. This is being consulted on.
Organic farmers are exempt from all three aspects of greening.
If you do not comply 30% of BPS is lost in 2015 and 2016 with a
higher penalty from 2017.
10% compulsory EU modulation is now taken off National
Ceiling, not entitlement value as under SPS, so more ‘hidden’
from farmers.
Requirement 1: crop diversification
The Government’s proposals on winter soil cover or catch crops
need to be approved by the EU.
Requirement 2: protection of permanent grassland
The Government will require fertiliser plans on the most
intensive farms, and soil analysis in later years.
Payment R ates
9.5% voluntary Scotland modulation from Pillar 1 to Pillar 2.
Payments over €150,000 will be reduced (capped) and a
maximum limit of €500,000 per year after labour costs
introduced. Greening payments not capped. Capped payments
go to Pillar 2.
Top-up schemes
Young farmers scheme
25% top up of regional average of BPS payment for up to
five years for farmers less than 40 years old in 2015, who
have a controlling interest in a business that is less than
five years old. Capped at 90 hectares.
Beef coupled support payments will provide flat rate
payments of €85 per head plus a double rate of €170 for
the first 10 calves. Islands will also receive a €65 per calf
top up. Requires 75% + beef genetics. This is part of the
coupled support. In addition, see Beef 2020 Package in
Pillar 2.
A sheep coupled support payment will also be introduced.
Requirement 3: Ecological Focus Areas (EFAs)
Land laying fallow
Eligibility region
£ per hectare in 2019
including Greening payment
Areas with catch crops or
cover crops
Region 1 - Better land
£160 - £180
Region 2 - Rough grazing
in non-LFA and LFA
categories B, C, D
£28
Region 3 - Rough grazing
in LFA category A
£8 + £20 per head ewe headage
payment on farms where the
majority of farms is in Category
A and < 200 hectares Region 1
land
Areas with
nitrogen-fixing crops
Weightings and coefficients
to be decided
Buffer strips
Field margins (including
hedges and ditches)
Pillar 2 - Rur al development
The Scotland Rural Development Programme 2014 - 2020 promotes competitiveness, management of the
environment and development of rural areas, and is worth £1.3 billion.
The UK continues to get small share (2.7% of pot despite having 10% of area) as the hoped for redistribution
between Member States did not happen.
Market Intelligence Report
CAP Update
Scotland - as at 13 June 2014
“The reform has been as benign as it could have been given Europe’s finances. The Scottish Government is still
consulting on many of the important details, so much of this remains a proposal, and it is very important to keep
track of the latest announcements, especially as they may affect your farming decisions from this autumn.
Please contact me or my farm management team to get the latest information
and to assess how the reforms might affect your business.”
Less Favoured Area Support Scheme,
Agri-environment and forestry
Less Favoured Area Support Scheme (£459m). There will be
continued support for less favoured areas, with a replacement
scheme and designation in place by 2018.
Agri-Environment - Climate Scheme (£350m). There will be
targeted support for land managers to undertake management
and capital work for environmental purposes. Includes £10m for
slurry stores and £6m for footpaths.
Forestry Grant Scheme (£252m). This will be a range of grants
for woodland creation, agroforestry, tree health, woodland
improvement, processing and marketing and sustainable
management of forests.
Other schemes and issues
New Entrants Scheme (£20m). Start-up grants up to €70,000 +
capital grants for new entrant young farmers of up to 40 years
old and one-to-one advice.
Crofting and Small Farm Support Scheme (£20m). Support
available under the previous SRDP will be expanded and this
scheme will be open to all small farms with a suggested range
of 3 – 50 hectares. Will include capital grants.
Support for Co-operative Action (£10m). A new scheme to
provide support for the development of co-operative ecosystem
and landscape-scale projects.
Rural Regional Delivery Partnership. For land based
investments – up to £75,000 and over £75,000.
Small Rural Business Support (£20m). Start up grants for new,
small non-agricultural businesses, including farm diversification.
Food and Drink Scheme (£70m). Support for SMEs in the food
and drink sector for start-up grants for new enterprises, and
business development grants.
Beef 2020 Package (£45m). Support for improving genetics,
performance and reducing carbon footprint.
Douglas Ogilvie
01738 479181
douglas.ogilvie
@smithsgore.co.uk
smithsgore.co.uk
LEADER (£66m). LEADER will continue to fund projects
agreed by Local Action Groups (LAGs), and will build
on the experience from previous programmes. 21 rural
and coastal areas have been invited to submit a single
Local Development Strategy. There will be greater local
coherence (e.g. with Community Planning Partnerships).
Knowledge Transfer and Innovation Fund
(KTIF) (£10m). KTIF will assist in the sharing and
implementation of innovative ways of improving
working practices.
Advisory Service (£20m). The existing Advisory Service
will be expanded and brought into the SRDP. It will
provide advice and assistance to farmers, crofters,
forest holders and other land managers via a dedicated
advice helpline, web guidance, publications, seminars/
workshops and demonstration projects.
Other issues
The names of all people receiving CAP payments will
be published.
Payment rates will be based on the Euro Pound
exchange rate for the whole of September (not just
30 September).
Cross compliance is largely the same, but rules on
buffer ships will be strengthened.
The EU wants to ban dual claims, where two parties,
such as landlord and tenant, claim different payments
over the same land, such as agri-environment scheme
payments and BPS.
The Government will push the EU to have a full health
check of the CAP in 2017 - 2018.
Technical assistance and Scottish Rural Network
(SRN) (£15m). The SRN, required by Europe, will help
people share ideas and good practice and potentially
develop innovative ideas for project development. It
will build on the experience under the last SRDP. It will
have a broader focus and engage with the full range of
stakeholders in rural Scotland including land managers,
community groups, individuals and businesses in
different sectors.
Broadband (£9m).
Whilst every effort has been made to ensure the accuracy of this briefing, its information may not be comprehensive and may be superseded by subsequent EU or national announcements. Recipients should not act upon it without seeking full professional advice.

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