CAP reform update December 2013

CAP reform Q&A - Payments & entitlements

There are still a few unanswered questions but there are now strong steers on many of them and Defra are expecting to publish another detailed paper by the end of this month.

For other common Q&As regarding the CAP reform, please navigate through the tabs below.

 

1. When will we know what the payments are going to be?

It is unlikely that we will know exactly what the payment will be until just before the payment is made. The exchange rate used will remain variable but until the application process is complete the RPA do not know how many entitlements will be recovered from claimants under 5ha, ineligible businesses and how many entitlements will be lost through lack of activation in 2015. The deduction for the National Reserve is also not known.

2. If I find additional land in 2015 to activate my surplus entitlements, will I be able to rotate use in the future and retain them?

No. Entitlements will be lost if unactivated for two years and use cannot be rotated in future. However, in future entitlements can be leased with or without land.

3. Should I sell my entitlements now?

The entitlement market has always been thin but it looks likely that capital values will decline given that the National Reserve will remain open for new entrants for the period of the reform accelerating the rate at which entitlement numbers exceeds land area. Don’t forget that transfer will not be permitted from midnight 21 October (earlier Defra releases stated 19 October) until mid January while current entitlements are transferred onto the new system.

4. Is there any way that I can still claim if I have less than 5 ha?

It would be possible to lease or sell the entitlements. The threshold varies through the EU and is 3 ha in Wales.

 
 

Key contacts

Andrew Wraith

Andrew Wraith

Director
Food & Farming

Savills Lincoln

+44 (0) 1522 508 973

+44 (0) 1522 508 973