Dual use and naked acres

    Subsidies: Dual Use and Naked Acres

    Practical Subsidy Issues

    Dual Use
    Dual use is when different parties claim different support on the same area.  The most obvious example is where a tenant claims the Single Payment Scheme (SPS) subsidy and the landlord claims the Entry Level Stewardship (ELS) scheme payment.

    The EU are known to be uncomfortable with the arrangement since the implication is that both parties have management control over the same land area (not forgetting that the crop or stocked area is included within the ELS and not just the option).  Nearer to home, the situation has never been allowed in Scotland and while it was allowed in Wales, it is no longer permitted.  Underlying it all is the moral view expressed by farmers and politicians that the payment should go to the party actively managing the area.

    However, a lot of the problem comes from the political spin on the ELS which means that the whole farm and, not just the area under the environmental options, is included as under environmental management making the environmental statistics look better.  If the scheme was based just on the options introduced, uptake would probably be higher and there would be no problems on transfer since the options could be transferred with the rest of the field or separated as felt to be appropriate.  Focus on the options and not just achievement of a threshold as is currently the case, would probably improve environmental delivery and allow adjustment of payments, if uptake was below target.

    In many cases the RPA has requested additional clarification of the dual use arrangement from the farmers concerned.  In the example above, the Stewardship scheme holder has to produce evidence that the tenant has been given clear instructions by the landlord on how the land should be managed on his behalf.  The provision of additional information by the farmers contacted has been extremely slow and this is now holding up a large number of payments.

    Defra has collected information from farmers on dual use to protect their position if queried by EU inspectors, butnot to submit to the EU for guidance.  Thus, a definitive statement on whether dual use will continue to be accepted is unlikely.  Sources close to the decision making process suggest  there is a good chance that resolution will not occur until the new CAP is agreed.  Enforcement would certainly cause chaos.  It is interesting to see that both Comagri (MEPs) and Council (member state representatives) have suggested that the proposed percentage for the greening area in the CAP reform, might be reduced where farmers worked together.  This perhaps suggests that the linkage allowed through dual use (such as where an estate has a single ELS scheme covering land occupied by several tenants) might be encouraged.

    Naked Acres
    Every reform of the CAP to date has contained a clause to prevent the manipulation of the system entirely with the objective of gaining subsidy.  The key clause is in article 30 “Without prejudice to any specific provisions in individual support schemes, no payment shall be made to beneficiaries for whom it is established that they artificially created the conditions required for obtaining such payments with a view to obtaining an advantage contrary to the objectives of that support scheme.”

    The RPA has announced  they will be investigating “naked acre” deals this year.  These deals are where farmers with surplus entitlements activate them on another farmer’s land.  In many cases, this involves complex, convoluted, occupancy arrangements.

    It is obviously not easy for the RPA to identify these situations and there might be court cases to determine whether the occupancy is in fact contrary to the article.

    An interesting aside would be whether the so called ’slipper farmers’ in Scotland who purchase entitlements and activate them on moorland might also be caught in this trap.  There are also a number of arrangements between landlords and tenant in Scotland that are already contrary to the EU scheme rules.

     
     

    Key contacts

    Andrew Wraith

    Andrew Wraith

    Director
    Food & Farming

    Savills Lincoln

    +44 (0) 1522 508 973

    +44 (0) 1522 508 973

     

    Steve Hollis

    Steve Hollis

    Director
    Food & Farming

    Savills Salisbury

    +44 (0) 1722 426 853

    +44 (0) 1722 426 853

     

    Keith Preston

    Keith Preston

    Director
    Food & Farming

    Savills Oxford

    +44 (0) 1865 269 170

    +44 (0) 1865 269 170

     

    Ashley Lilley

    Ashley Lilley

    Director
    Food & Farming

    Savills Cheltenham

    +44 (0) 1242 548 012

    +44 (0) 1242 548 012

     

    Giles Hanglin

    Giles Hanglin

    Director
    Rural Research

    Savills Margaret Street

    +44 (0) 207 016 3786

    +44 (0) 207 016 3786