CAP uncertainty still clouds decisions for farmers

Professional agricultural advisers are currently facing a major dilemma in that the next common agricultural policy (CAP) is due to come into effect in less than 18 months yet there is still a great deal of practical flesh to be put onto the political framework decided in June.

Speaking to a members of the Scottish Agricultural Arbiters & Valuers Association in Edinburgh this week, Jeremy Moody said the clock was now ticking relentlessly towards the January 2015 changeover.

Despite this timeline, he advised them not to be “too clever and just manage options”. He noted the “turbulence in England” in 2004 when they had introduced land-based payments, where some landowners had become so obsessed with the changeover they had inadvertently reduced the value of their properties.

As adviser to the Central Association of Agricultural Valuers & Arbiters, he said that some parts of the next CAP were clear. For example, he cautioned that any changeover of running a farm in the next 12 months should bear in mind that cropping and stocking activity in the current year provided the “golden ticket” to entitlements in the next CAP.

However, he predicted that Scotland would follow England to a point where area-based entitlements would not be as valuable. This would occur with the Scottish Government likely to open the door to new entrants on an annual basis in future, thus bringing more eligible land into the equation.

In fact one of the big imponderables at present, according to Moody, is the acreage of land which will come under the new area-based payment system.

He also warned that the single farm payment – the core of the direct payment system for most of the past decade – could be severely eroded under its new guise of basic payment in the next CAP.

It is already known that 30 per cent of the basic payment will be dependent on compulsory environmental measures, but of the remaining 70 per cent, 3 per cent would go into the National Reserve to fund new entrants, 2 per cent to top up support for young farmers, up to 8 per cent for coupled payments plus several other slicing optional extras.

This could mean future basic payments might only be around 50 per cent of that originally expected for those outside the special categories.

On the controversial issue of linking up or coupling payments, Moody warned: “You have to remember that all you are doing is taking money away from someone else. The pot does not get bigger through using coupled payments.”

He guessed that the Scottish Government would restrict the use of coupled support to what are currently classified as the less favoured areas of the country.

While all of that was relatively straightforward, the same could not be said of new requirements to make the next CAP more environmentally friendly. Definitions for compliance with the required environmental focus areas were scarce and he predicted a “whole string of problems” when these definitions were clarified.

For instance, he revealed there was no clarity on what was a hedge and might be eligible and what was just a clump of bushes and thus ineligible in the so called environmental focus areas.