2013-10-21   facebooktwitterrss
SPS Entitlements – You May Have More Than You Think

The Farming Press is full of information on the impending CAP reform, however, says Tim Sedgewick of H&H Land and Property, “It is important to note that the vast majority of detail published so far has not been legally agreed and could still be up for change.”

One key element of the CAP system is the Entitlements which form the basis for payments under the Single Payment Scheme. If you hold them you can apply for payment under the SPS.

There are two types of Entitlement:

  • Normal Entitlements, which are activated (claimed) against land
  • Entitlements with special conditions (special entitlements), which are activated (claimed) against livestock.

Farm Imagesphoto © farm-images.co.uk

“To activate”, means to use your Entitlements along with eligible land or livestock to apply for payment to the SPS. Your Entitlements Statement issued in November/December each year will show the number you hold. It has never been so important to check this year’s statement to see how many current Entitlements you hold against the eligible area you farm.

It would appear that DEFRA are favoring the option to roll-over current Entitlements into the new scheme to form the backbone of the next payment mechanism, known as the Basic Payment Scheme. This roll-over will require all of your current Entitlements to be allocated to an eligible hectare of land in the 2015 claim year to ensure you hold onto all the Entitlements you currently hold. If you have surplus Entitlements or have lost land during 2014 then you risk this surplus being taken off you to return to the National Reserve.

Tim states “Putting this into context, if a farm business, claimed SPS on an eligible area of 50 hectares but owned 55 Entitlements they would lose the 5 surplus Entitlements. If you value the Entitlements at £200/ha, this could mean losing £1000 in capital value and the future income from any claims made.”

However, the good news is that there are fellow farmers and landowners looking for extra Entitlements. So, this farm business could sell their excess and gain capital which could then be used to reinvest in their farm business and infrastructure.

HH Land

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