August 2014

Welcome to this edition of the Regulation Technical Update
prepared by the Farm Consultancy Group.

Basic Payment Scheme

This issue is an update on what is currently known of the BPS and attempts to collate a lot of
the information that has been drip – fed from Defra:

Registration
1. All applications for the Basic Payment Scheme (BPS) will have to be on-line. This will
also apply from 01/01/2015 to all forms as well, ie CReg01 and RLE1.
2. The Government Gateway is changing and so all farmers will have to reapply for a new
registration (an Identity Assurance, IDA) on-line.
3. Current authorisation by a farmer for an agent to act on his behalf will become obsolete
and have to be renewed, by the farmer only, after first registering himself.

Eligibility
There will be closer scrutiny as to who is truly eligible (Active farmer and who has the
land at their disposal) to claim BPS: “The person with the management, benefit and
taking the financial risk is the eligible person”. What actually happens on the ground
will be a greater determinant than any written agreement.
Inspectors will look for any evidence of “Artificiality” of any agreements and business
changes.
There is a published “Negative List” of those who are ineligible for BPS (railway
services, airports, waterworks, real estate services and permanent sport and
recreational grounds). The category of “Real estate services” could impact on
diversified farm businesses but you could still be classed as an active farmer; details
are still awaited.

Entitlements
· Minimum number of 5ha (entitlements) is required to be eligible.
· Only 2 rates; Non-SDA and Moorland
· Trading of entitlements will continue until 19th October 2014. Will resume in late
January 2015.
· The RPA state that any leased entitlements that are due to be returned to their owner
after 19 October will still be returned. The RPA will also still be able to transfer any
entitlements that are part of an inheritance after the 19 October.

Capping
BPS payments above €150,000 will be capped by at least 5% (but not on the
greening element).

Young Farmers
· To get this payment you must be 40 years of age or younger in the first calendar
year
you apply for a BPS payment. You will also need to be an active farmer and in control
(or joint control) of your holding. You will have to apply for it each year.
· You will be eligible to receive a young farmer payment for up to 5 years after the
year
you started or took over control of your business. The 5 years could have started
before 2015.
· The value of the top-up will usually be worth 25% of the average value of all the
entitlements you hold. You can claim it on up to a maximum of 90 entitlements.
· Any entitlements held on 15th May 2015 that are surplus to your 2015 BPS application
will be clawed back by the RPA.

Greening

· Is a Compulsory element of BPS worth 30% of the total BPS payment.
· It is based upon Total BPS Eligible Arable Area not just that which is activated (if
less).
· Arable land is defined as: “land cultivated for crop production, fallow and temporary
grassland (the land occupied by outdoor pigs is classed as Temporary Grassland)”.
Permanent crops (including fruit, herbs and nuts) are not arable land.
There are 3 Parts:

1. Permanent Pasture (PP):
Remains on a national basis and must not fall by >5%. All grassland that has been
continuous grass for >5 years is PP. The RPA say that they will trawl all previous SPS
applications and will pre-populate the 2015 with the “correct grassland code”. This
will require close checking.

2. Crop Diversification:
· 10 – 30ha “Arable land” – At least 2 different crops on the arable land. Largest crop
must be no more than 75% of the arable area
· >30ha “Arable land” – At least 3 different crops on the arable land. Largest crop
must be no more than 75% of the arable area and the largest 2 crops must cover no
more than 95%.
Winter and Spring crops count as separate crops.
Undersown crops: if ensiled class as temporary grass, if combined then use the main cereal
crop (to be confirmed).
The following are each classed as 1crop:
· All Brassicas species (including Oilseed Rape, kales, turnips, cabbages)
· All Solanaceae species (including potato and tomato)
· All Cucurbitacae species (including courgettes, squashes, pumpkins)

3. Ecological Focus Areas (EFA)
>15ha of Arable land requires EFA’s equivalent to at least 5% of your Total Arable
Area.

 

· Buffer strips only allowed against a “Watercourse”. Can be 1 – 10m wide but all are
classed as 9m2per linear metre. Can include the Cross Compliance margin.
· Hedges up to 10m wide and only allowed if on or adjacent to “Arable Land”.
· Catch crops and green cover not yet fully defined but thought to include undersown
grass cover crop, must be established by 1st October and cannot be harvested.
· “Fallow” not yet fully defined but likely to be a minimum of 6 months including 15th
May. Crops grown but not harvested for consumption eg wild bird seed and field
corners taken out of arable production are likely to be classed as fallow.
· Widths of hedgerows and buffer strips still to be confirmed.
· Land used for EFA can count towards crop diversification if it qualifies eg fallow and
legumes.

Exemptions

 

Organic:
If arable crops are grown on Registered Organic land they are exempt from Greening.
Where a farm is part organic and part conventional then greening only applies to the nonorganic
arable land.

Crop diversification
1. Where more than 75% of your “Arable area” will be Fallow, Temporary Grassland
or a combination of both AND the rest of your arable area is 30ha or less
2. Where more than 75% of your “Total Eligible Area” is Permanent grassland,
Temporary grassland, used for crops grown in water or a combination of each of
them AND the rest of the arable area is 30ha or less
3. New land and different crops (But NOT exempt from EFA’s)
a) >50% of the arable land declared on 2015 BPS application was not
declared on your 2014 SPS application
b) all the arable parcels you declare in 2015 must be in different crops from
the 2014 application

EFA’s
1. Where more than 75% of your “Arable area” will be Fallow, Temporary Grassland,
Legumes or a combination of each AND the rest of your arable area is 30ha or less
2. Where more than 75% of your “Total Eligible Area” is Permanent grassland,
Temporary grassland, used for crops grown in water or a combination of each of them
AND the rest of the arable area is 30ha or less

Double funding:

Unaffected; HLS including HLS underpinned by ELS/OELS
ELS/OELS with start dates prior to 1st January 2012
Affected; ELS/OELS agreements with start dates on or after 1st January 2012
(irrespective of whether or not you qualify for having to comply with the Greening
elements)

The following ELS option codes (and their OELS equivalent) are deemed to be double
funded; EC4, EC24, ED2, EE1, EE2 , EE3, EE8, EE9, EF1, EF2, EF4, EF7, EF8, EF11, EF13,
EF22, EJ5, EJ9, EJ13.
They will automatically be deducted from any post 01/01/12 agreement at the rate of
£1/point. Any surplus points from the original agreement will be used to reduce the
reduction.
3 Options:

1. Continue with your existing agreement but with a reduced payment

2. Amend your agreement to add in further options or increase the coverage of
existing options

3. Close the agreement early without penalty.
Those affected will receive a letter from Natural England (NE) from “mid-summer
onwards”. It will contain a reply slip for how you wish to proceed. This MUST be
returned by 15th November 2014 or NE will assume you are happy with their
amendments.

Wales BPS

The Welsh Government (WG) has announced further details on how their Basic Payment
Scheme will operate from 2015 onwards.
To summarise the main points;
· Regions: there will be three regions – Moorland, Severely Disadvantaged Areas
(SDA) and a combined Disadvantaged Areas (DA)/Lowland region. Moorland will
be restricted to land above 400m altitude – land below this will fall into the SDA
region
There will be a ‘Technical Review Process’ for anyone who believes that land has
incorrectly been put into the Moorland category. Rural Payments Wales (RPW) will
be writing to all claimants providing them with provisional payment region
allocations for their farms (no timescale has been indicated for this though). If
farmers believe that Moorland has been improved (and thus falls into the SDA
category), then they will have 30 days to make their case – providing photos and
other evidence.

· Payment rates: where someone has lost payment rates will depend on the area
claimed in 2015, however the WG believes that indicative payment rates will be
€20 : €200 : €240 per hectare for the three regions respectively.

· Regional payments: there will be phasing to fully regional payments over 5
years to 2019. This will be in equal steps of 20%. Therefore the 2015 payment
will be based 80% on historic (2014) SPS claims and 20% on a regional payment.
The historical amount for each claimant will be based on the entitlements held in
2014, not those activated. This claims history will then be divided across all the
entitlements established in 2015 to form the (declining) historical element of thenew entitlement value. It has been decided that where someone has lost land since
2014 (through sale or a lease ending), there will be no clawback of the history
through a ‘windfall profits’ clause. Therefore history can be concentrated down onto a
small area for 2015.

· Welsh Entitlements:The WG will allocate new BPS entitlements on the basis of land
occupied in 2015. Although the allocation will be limited to those who claimed in
2013, there will be a derogation to allow those who were farming in 2013, but did not
make a claim, to also get an allocation. Evidence of farming activity will have to be
provided.

· Capping: there will be capping above the EU minimum level (5% after €150,000). In
fact, there will be an absolute cap at €300,000
· National Reserve: there will be a separate ‘National Reserve’ for each of the three
payment regions.

· there will be no Coupled Payments, Small Farmers Scheme, or Area with Natural
Constraints top-up in Wales.

· Young Farmers/New Entrants: the mandatory Young Farmers Scheme will
operate; New Entrants and Young Farmers (40 years old and below) will be eligible for
the National Reserve (as well as some other categories including force majeure).
There will be no requirements on skills, qualifications or experience to get an
allocation from the Reserves.
Entitlements from the reserves will have the value of the estimated final regional
average payment in 2019 – i.e. they will be fully regional from day one.
The Young Farmers Scheme provides a top-up on the value of entitlements held. It
has been decided to limit the top-up to the first 25 hectares worth of entitlements
held. The top-up will be equivalent to 25% of the final (2019) payment rate.
Therefore it will not necessarily be a top-up of 25% of the value of entitlements
actually held.

· Greening: will be through the three basic EU-wide measures, rather than any
bespoke Welsh scheme, see English Greening above, but with the following difference:
On EFA, it has been announced that the following land categories will be eligible in
Wales for 2015;
• fallow land (see English above)
• hedges and stone walls (see English above)
• short rotation coppice (no inputs) (weighting of 1.0 – EFA area 1m2)
• afforested areas used to claim the SPS in2008 (weighting of 1 – EFA area 1m2)
• nitrogen fixing crops (see English above)
· Minimum Claim: there will be a minimum claim size of 5 hectares
· Pillar 2: there will be a Pillar Transfer of 15%
For both countries there is still a need for further clarification of the detail and definitions.