Common Agricultural Policy (CAP) - MID TERM REVIEW

H&H Bowe director Tim Parsons looks at the implications for the UK. After the announcement on the 12th February 2004 by DEFRA, where are we now?

Q1 What is an Entitlement?
A1 It is the right to claim and be paid the new Single Farm Payment (SFP) each year from 2005. This replaces all rights to claim support payments under all arable, sheep and cattle schemes from 2005. The payment will also include the dairy premium, which is to be decoupled in 2005.

Q2 How will the entitlement be made up?
A2 There will be two elements to the SFP. These will be firstly a flat rate area payment and secondly a payment based on an individuals historic claims history in the base period 2000-2002. The resultant SFP will be allocated against the land claimed in 2005

Q3 How do the payments work?
A3 The make up of the SFP will shift over a period of eight years up to 2012, from a mainly historic payment to a purely area based payment. The individual elements of the SFP over the period will alter as shown in the table below.

Year	Area Payment	Historic Payment
2005	10%	90%
2006	15%	85%
2007	30%	70%
2008	45%	55%
2009	60%	40%
2010	75%	25%
2011	90%	10%
2012	100%	0 %

Q4 Are there differing payments for different land types?
A4 Only two types of land will be recognized, Severely Disadvantaged land and all other land.

Q5 How much will the area payment be?
A5 This is to be officially announced but it is being suggested that the area payment would start at say £8 per acre (non SDA) and £3 per acre (SDA). These would rise to around £80 and £30 per acre respectively (before any deductions for national reserve, modulation, financial discipline and other deductions).

Q6 Who can claim entitlements?
A6 Only farmers, who are undertaking agricultural activity. The full definition of which will be published in due course.

Q7 What land will qualify?
A7 All agricultural land not covered by permanent crops. (Forest or land in non-agricultural use).

Q8 When will claims have to be made by?
A8 15th May in every year commencing with 15th May 2005.

Q9 Can a farmer lose entitlement?
A9 Yes, he will lose entitlement to the national reserve, which is not claimed on in a three-year period.

Q10 Can the entitlements be traded/sold?
A10 Yes, after the first claim. They are however effectively ring fenced, e.g. SDA entitlement must remain on an SDA area.

Q11 What about Hardship cases?
A11 It is proposed that those who can show hardship can elect to drop the 'affected' year from their historic calculations or even, in such cases as FMD, drop two years. If all years are affected the 1997-1999 period may be used instead.

Q12 What is the timetable from now?
A12 The EU is drafting the implementing regulations now and a series of these will appear in the next weeks and months. DEFRA is consulting further on the detail, such as national reserves and cross compliance, but other issues arising from the recent announcement are likely to need further consideration. RPA is working towards issuing, during this spring, a statement of facts on which the historical element of the entitlement would be based. The RPA is also working to resolve the dairy farmers IACS issues in advance of the allocation of dairy premium.

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Defra H & H Bowe

H & H Bowe has a professional team of surveyors who are keeping up to date with all the changes to the MTR proposals, and are capable of helping and advising on all aspects of the proposals. Initially the team is able to assist with determining the fact behind historic claims, advising on hardship and national reserve claims and in due course trading entitlements where appropriate.