Following the 2015 Common Agricultural Policy reform there have been a number of changes to the subsidy system in Scotland that all farmers have to be aware of. The main change is that the main support payment (the new Basic Payment Scheme) has moved from a partially coupled payment based on historic stocking rates to a full de-coupled payment based purely upon the area of eligible entitlements. This historic payment is to be “stepped” down by 20% each year in order to ensure that all land in Scotland receives a flat rate area payment and Greening payment by the 2019 BPS year. This means that, in effect, farms with high historic entitlement values for Region 1 land (arable land and improved grassland) will lose 20% of the difference between their values and the current target value of €165/ha.
The new system also breaks down all of the land in Scotland eligible for BPS payment into three Regions:
- Region 1 Land: Arable land and improved grassland. The current target payment for this land is €165/ha by 2019. The current Greening payment is €83/ha but could rise by 2019.
- Region 2 Land: Unimproved and marginal grassland. The current target payment for this land is €28.19/ha by 2019. The current Greening payment is €13.84/ha but could rise by 2019.
- Region 3 Land: The most marginal land, usually hill ground. The current target payment for this land is €8.88/ha by 2019. The current Greening payment is €4.47/ha but could rise by 2019.
The other main change from CAP reform is the introduction of “Greening” rules.. The main greening rules are shown below:
1) Ecological Focus Areas: This compels all BPS claimants with an arable area to put 5% of their land as EFA equivalents. EFA rules do notaffect:
(a) Grassland farms where 75% of the holding is grass and there is less than 30ha of arable land
(b) Farms where more than 75% of the arable land is temporary grass, fallow, leguminous crops as long as the remaining 25% is less than 30
2) Where EFA requirements must be met they can be met through methods such as leaving land fallow, cover crops, buffer strips and margins and leguminous crops, among others.
3) Crop Diversification (the “three crop rule”): This rule entails that arable farms with >10ha of land must diversify their cropping. The same exemption rules as EFAs apply to crop diversification.
(a) Arable Land between 10-30ha: 2 Crops must be grown of which one crop cannot be >75% of the total area
(b) Arable land over 30ha: 3 crops must be grown of which the split cannot be >75% for one crop and the two main crops cannot be more than 95% of the total area.
4) At a national level the level of permanent grassland must not fall >5% from the Permanent grass area in 2015. If this level is reached, restrictions will be put on ploughing grassland. Currently an Environmental Impact Assessment must be carried out if ploughing permanent grass. From 2016 there is also a requirement for allpermanent grass to have a nutrient plan in place.
In addition to the BPS and Greening payments, there are also support payments to Young Farmers (under the age of 41) and are a top up on the value of 90ha of their entitlements for five years.
Scotland also has a number of coupled payments that must be applied for separately. These are the Scottish Suckler Beef Support Scheme (a payment on each calf born). This scheme is split into two sections, mainland and island. The island payment is higher than the mainland scheme (€160 vs €100). The sheep equivalent of this is paid on farms with more than 80% of their land being Region 3 with less than 200ha of Region 1 land. The scheme is paid on the number of homebred ewe hoggs retained from October to March and amounts to €78/head.
Laurence Gould can assist you with submitting the necessary forms and keeping your business compliant with all of the legislation involved. Contact Laurence Gould (Dunfermline) on 01388 730538 for more information.
