Basic Payment Scheme (England & Wales)

BASIC PAYMENT SCHEME – ENGLAND

The government is aiming to introduce its own support scheme in England for the industry from 2021 onwards. The exact detail of these schemes and how they will operate is not currently known in detail.

From our experience with these types of schemes it is important that applicants plan ahead for any projects they require funding for, especially obtaining planning permission, and are ready to apply when they are introduced.

The Government’s intention, in England, is to provide support through various schemes such as:

A.           Farm Sustainability Grants for Productivity. The intention is to support investment in:

1.            Equipment

2.            Technology

3.            Infra structure 

The support should be available at the farm level and also cover food processing businesses.

B.           There is a plan for a UK prosperity fund to be managed by the Leader Groups

C.           Resilience fund for advice to help farmers prepare for the transition away from the                  CAP 

D.           Research & Development grants.

E.            Producer Organisations with a revamped UK focussed scheme.

As more information becomes available on each of these schemes the website will be updated. If anyone has a project which they are considering making for 2021 onwards please contact the local office.

The Basic Payment Scheme was introduced in 2015 and was the replacement for the Single Payment Scheme which ran from 2005 to 2014. The scheme is currently scheduled to be in place until 2020.

The scheme represents the main annual subsidy payment received by most farmers and landowners and can be claimed on almost all eligible agricultural land (but not on most woodland and land under forests).

The payment is based on the area of eligible land claimed each year and it is not necessary to produce crops or livestock on the land. However, the land must be kept in good agricultural and environmental condition and there are a range of cross compliance measures that need to be adhered to.

Claimants must pass an Active Farmer test.

There are different payment rates for different classifications of land. The 3 classifications are: -

Non-SDA (Severely Disadvantaged Area)

SDA

SDA Moorland

Entitlements

There are also 3 classifications of entitlements to match these land categories. 

The applicant must hold the correct number of each type of entitlements in order to be able to claim the payment on the land entered onto their application form. Most claimants were initially awarded entitlements at the start of the scheme, however entitlements can be transferred, purchased and sold.

Applications are submitted annually. There is normally a deadline in mid-May each year. This is also normally the date on which claimed land has to be at the disposal of the claimant.

 Payments

The payment is composed of 2 elements :-

Entitlement Value. The majority of the payment (approximately 69%).

Greening Payment. An additional payment paid if the claimant follows greening rules. 

The majority of claimants opt to receive their payment in £ sterling, however some opt to receive the payment in Euros. 

A deduction is made from payments greater than 2000 Euros – Financial Discipline Mechanism (FDM). This is used to help fund rural development and countryside stewardship schemes.

Top up payments are available in specific circumstances for young farmers not more than 40 years of age when they make or made their first successful Basic Payment application.

Penalties can be applied for over declaration of land, failure to follow greening rules, breaches of cross compliance rules. 

The payment rates per hectare in sterling for 2015 claims (payments above 2000 euros) were as follows :-                                                                                         

Non-SDA (Severely Disadvantaged Area)                            £178.85/ha

SDA                                                                                         £177.56/ha

SDA Moorland                                                                          £46.92/ha

In addition, claimants in 2015 received an FDM reimbursement.

2016 payments in £ sterling are expected to be substantially higher mainly due to a more favourable £/euro exchange rate than 2015.

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