Poor crop prospects

    Scotland and Wales

    Most of the issues in the general list apply to Wales and Scotland but there are also bigger issues to deal with.

    Conversion to an area based payment system

    • Area payments may be  applied nationally or regionally
    • Farmers are to receive at least 60% of the average for the payment area by 2019 with the option for the member state to limit any losses to 30%
    • The rate of phasing in of the area based system is determined by the member state within the targets above

    This is a considerable softening of the original proposals which required equal payments within the region by 2019. There are a number of issues for Scottish and Welsh Farmers:

    • Will the two administrations adopt the minimum convergence of payment or full convergence?
    • What will the regions be?  Both administrations have produced studies describing possible payment regions and in all likelihood there will be two or three regions in each country.
    • What will the regional payment rates be?  Since the national payment allocation is still not known the allocation of payments to each region cannot be estimated.  However, while the Scottish Executive is at pains to point out that the rates used in their modelling exercise are not the forecast rates, the rates used are similar to those used in England under the current regime i.e. about €28/ha for the poorest quality areas and €200/ha to €300/ha on the better quality land.  The highest rate is where the lowest payment area is largest.  Generally cereal and dairy farmers are expected (on average) to suffer the larger payment reduction.

    Entitlement award

    Information for this paragraph is based on the working documents and there may be modification of the detail.

    • Entitlements awarded may be limited to 135% or 145% of those declared in 2009
    • The need to have activated entitlements in 2013 still applied although there are exceptions for farmers producing potatoes, fruit and vegetables.
    • Where a business has been subdivided on sale or for letting it appears that the 2013 activation right can be transferred to each of the recipients.

    The most recent draft texts make it clear that young farmers and farmers who start their operation are eligible from the national reserve.  The objective of the legislation is to prevent landowners taking land back in hand by terminating tenancies in expectation of receiving the subsidy.

    Making your mind up
    Wales has already expressed a preference to adopt the option to cap payments at €300,000. Scotland has proposed a desire to couple payments for cattle producers in the LFA to maintain rural populations and stock.  Both countries have to decide what the minimum level of management needs to be for land that qualifies for payment without active management.

     
     

    Key contacts

    Andrew Wraith

    Andrew Wraith

    Director
    Food & Farming

    Savills Lincoln

    +44 (0) 1522 508 973

    +44 (0) 1522 508 973