Proposed New CAP Regulations

Recent articles in the press have commented on leaked drafts of the new single farm payment regulations. The proposed regulations were published officially by the European Commission this week and unsurprisingly are not that different from the leaked documents.

It is up to individual countries to decide exactly how the regulations are to be implemented and so much of the practical detail will not be clear until domestic regulations are produced.

Flat rate payment system continues from 1 January 2014

New entitlements will be issued based on the number of eligible hectares being farmed to those claiming on at least one entitlement in 2011. However the payment will be at a flat rate and not related to the number of entitlements held previously.

There will be a national reserve for new claimants. In allocating entitlements from the reserve, individual countries must give priority to new entrant farmers under 40 and may choose to favour areas of the country where farmers are disadvantaged.

As a result, careful thought will need to be given to any restructuring of farming businesses which might change the identity of the entitlement claimant between 2011 and 2014, as it is by no means certain that claims made to the national reserve will be as successful as claims made by existing entitlement holders. The provisions may also disadvantage those who bought land this year with a contract stating that the outgoing seller can claim the 2011 payment, if the buyer has not claimed against entitlements on other land this year, as all 2011 claims have already been made.

It will be possible to transfer the right to claim the new entitlements in a contract of sale/agreement for lease to one farmer only. It is not clear how this would operate where land is being sold in lots. It would be sensible to seek to vary 2011 contracts so that as far as possible any benefit is transferred to an incoming buyer even though the 2011 claim has been made by the seller, where the buyer has not claimed against any entitlements in 2011.

Eligible hectares can include land also used for non-agricultural uses, as long as those uses 'can be exercised without being significantly hampered by the intensity, nature, duration and timing of the non-agricultural activities'.

Additional environmental payment

An additional payment will be made for environmentally friendly farming practices. As currently drafted, these are obligatory and there will be no opt-out for a farmer who wants to...