Common Agricultural Policy Reform - The 'Active Farmer' Test

In the first instalment of our trilogy of 'Briefing Notes on the current draft Common Agricultural Policy Reform' we have looked at the possible legal implications of the introduction of the "Golden Ticket" for claimants of the successor to the Single Payment Scheme, the Basic Payment. In this issue, our focus is on the inclusion of an "Active Farmer" test and the implied legal tasks that will be thrown up by its introduction.

While the Active Farmer test has been well publicised and written about, as a reminder the proposed draft of the Common Agricultural Policy reform that was released last autumn requires a claimant of the Basic Payment to be actively farming; in contrast to the current requirement that a Single Payment Scheme claimant "exercises an agricultural activity". The draft reform sets out a two part test to determine whether a claimant is actively farming which will apply to claimants who claim more than 5,000 Euros a year.

The requirements of the Active Farmer test are:

That a claimant's claim for direct payments must be equal to or greater than 5% of their total receipts from non-agricultural activity in the most recent fiscal year; and That claimants must carry out a minimum level of activity on their farmland (the definition of "a minimum level of activity" to be determined by each member state). The first head of this test is of some concern and the key element is that it looks at the total "receipts" (and not simply profits or income) from any non-agricultural activity i.e. any Single Payment Scheme claimant who intends to claim the new payment and receives payments from activity other than farming would have to examine their accounts and business structure very carefully to ensure that they would be able to claim the Basic Payment if introduced in this way.

At this stage there are ongoing discussions over the definition of the 'Active Farmer', as linking the Active Farmer test to the claimant's receipts is widely held to be unworkable. Therefore it would be premature for claimants to put any measures in place now to...