Thursday 24 July 2014

How to understand CAP Reform #1


As part of the Common Agricultural Policy reform (CAP) the existing single farm payment scheme will be replaced by a Basic Payment Scheme. 

In the first of our three part blog series, we asked our rural department to explain the basic payment scheme (BPS) and how it might affect you.

There are three main requirements you must meet to claim BPS.

  1. You must be an ‘active farmer’ 
  2. You must hold at least 5 BPS entitlements and
  3. You must occupy at least 5 hectares of eligible land.

What is an active farmer?
There are two requirements to being an active farmer. Firstly, you must undertake at least one agricultural activity. This can include producing, rearing or growing agricultural products; maintaining agricultural area; or carrying out a minimum activity on a ‘naturally kept’ agricultural area.

You cannot claim BPS if you are on the negative list. Currently, this list is defined as businesses which operate railway services; airports; waterworks; real estate services; and permanent sport and recreation grounds.

If you fall within the negative list, there is an appeal system. Provided you can demonstrate that your agricultural activities are significant, you may be able to claim BPS.

DEFRA are soon to provide further guidance on these topics at a later date.

Is my land eligible?
As it stands, there is no definition of ‘eligible land.’ However, it is likely to be similar to the former single payment scheme (SPS).

What we do know is that you must occupy at least 5 hectares of land to claim BPS. This land must remain eligible when you apply for BPS and throughout the calendar year.

Young Farmers scheme
This scheme provides, approximately, a 25% top up to the BPS scheme. This will be paid on a maximum of 90 hectares of land for up to 5 years.

To qualify, applicants must be:

  • 40 years old or less when making the BPS application; and
  • Have set up as ‘head of holding’ for the first time in the last 5 years.

In our next post, we’ll outline the ins and outs of entitlements and their usage for BPS claimants.

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