New Basic Payment Scheme (BPS) 2015

As of January 2015 The Basic Payment Scheme (BPS) will be replacing The Single Payment Scheme (SPS) which has been in place since 2005, and is the principal agricultural subsidy scheme in the EU.

BASIC PAYMENT SCHEME (BPS) 2015

CAP CountdownCAP Reform
The Common Agricultural Policy dictates what schemes are in place at EU level, and therefore what subsidies English farmers  receive. The CAP is currently undergoing reform, and we can make sure that when new rules and changes are brought in, you know what that means in real terms, and how it will affect you.

As of January 2015 The Basic Payment Scheme (BPS) will be replacing The Single Payment Scheme which has been in place since 2005, and is the principal EU agricultural subsidy scheme.

Those businesses that have made a claim under the Single Farm Payment Scheme in 2013 will automatically be eligible for an allocation under the new BPS, subject to criteria such as land eligibility, minimum activity levels and active farmer eligibility.

To qualify for payments (which are based on farm size rather than stocking or cropping) farmers must:

  • Be an ‘Active Farmer’ as defined by the EU
  • Have eligible land at their disposal on the prescribed date in May of the scheme year
  • Hold payment entitlements
  • Meet the minimum claim size which is now 5 ha
  • Complete and submit BPS forms by the set deadline (15thMay)
  • All claims must be made on the new on-line system CAPIS
  • Comply with the new BPS rules regarding Greening
  • Comply with Cross Compliance obligations

Active Farmer
Active Farmer is a person or business that carries out an agricultural activity:

  • Producing, rearing or growing agricultural products. This activity can include harvesting, milking, breeding animals and keeping animals for farming purposes; or
  • Maintaining an agricultural area so that it is kept clear of dense scrub.

They must not be on the list of business types listed in the EU regulation that are specifically excluded from eligibility which include airports, railway services and water works.

Eligible Land
Land eligible for the Basic Payment Scheme must fall into one of the following categories:

  • Arable Land – arable crops, temporary grassland or fallow land.
  • Permanent Grassland – land that has been used to grow grass or other herbaceous forage for more than five years
  • Permanent Crops – crops that provide repeated harvests and occupy the land for five years or more

Allocation of Entitlements
The system in England will allocate BPS entitlements based on the number of entitlements held by a farming business under the existing Single Payment Scheme on 31st December 2014.  where more entitlements than eligible hectares are held the surplus will be extinguished once the 2015 claim is made.  For example, if a farmer holds 100 entitlements but only declares 90 hectares of eligible land in 2015, 10 entitlements will be removed.

Entitlements Trading
If you wish to transfer entitlements in the new year (from about mid-January 2015), farmers will be able to transfer entitlements on the new on-line CAP Information Service system.  If you have extra entitlements to sell, or require entitlements for your land, then please contact us. We can help source entitlements buyers and sellers, and make sure you get the best deal possible.

Please contact and let us know your requirements, and we’ll discuss how we can help.

Greening
In this CAP reform, farmers have to do more for the environment in order to be eligible for their full subsidy payment.  The new ‘Greening’ rules are compulsory and Greening payments equate to 30% of the total BPS payment: If these greening requirements are not adhered to for the first 2 years of the new scheme then 30% of BPS payment will be docked, after this a larger fine shall be applied.

There are two main measures, which mostly affect arable farmers, but can affect livestock farmers.  First, any farmer with more than 10 hectares of arable area will have to adhere to the ‘two or three crop rule’ and grow at least two or three different arable crops each year.  Second, arable farmers will have to put 5% of their land into ‘Ecological Focus Areas’.

There will be three Greening requirements:

  1. Crop Diversification
  2. Ecological Focus Areas
  3. Maintaining the national level of permanent pasture

Click here to read our full Greening summary and guidance. 

National Reserve
Both Young Farmers and New Farmers will potentially be eligible for allocations of entitlements from the National Reserve.  If successful, they will be allocated enough entitlements to cover their eligible hectares or enough to cover any shortfall if they already have some existing entitlements.

The Young Farmers scheme will pay young farmers a 25% top up to their basic payment for a period of five years from the date they started farming (which could be before 2015). The payment is limited to a maximum of 90 hectares.  To qualify for payments farmers must be between 18 and 40 years old in the first year of application and be able to demonstrate that they took control of the farming business within the preceding 5 years.

New Farmers must be able to prove that they are active farmers, be 18 years old or over in the claim year and had started their farming business in 2013 or later.

Cross Compliance
Cross Compliance comprises a baseline set of rules farmers must adhere to in order to receive their direct payments. The rules are split into two types:

  • The Statutory Management Regulations (SMRs) which are legal requirements and;
  • The standards of Good Agricultural and Environmental Condition (GAEC).

The introduction of the new Basic Payment Scheme will mean some changes to the GAEC requirements, the most notable of which are:

  • The removal of the requirement of farmers to complete an annual “Soil Protection Review” which is replaced with a national minimum standard for soil management.
  • The addition of measures to protect earth and stone banks.
  • An extension of the ban on hedgerow cutting by one month to 31st August.

 

Samuel & Son are fully briefed on the latest CAP reform and the new Basic Payment Scheme.  This information is based on the current understanding of the reform and information from DEFRA and is subject to ongoing change and clarification.  If you require any help or would like to discuss any issues relating to the new BPS please do not hesitate to contact us.

Tel: 01435 864020