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single payment advice

The effect of Entitlements and the Single Payment Scheme goes to the heart of every farming operation and requires a wide range of skills and the experience in different areas in order to understand the interaction of different aspects of the scheme, and the dynamics of the entitlement market.

Due to our unique position, having been involved in milk, sheep and beef quota systems, together with IACS, our understanding of the Single Payment Scheme is unusually advanced and up to date.

SINGLE PAYMENT SCHEME – SPS UPDATE
The Rural Payments Agency has published a document “Single Payment Scheme – Information for farmers and growers – January 2009 update” on Tuesday 10^th February. This document confirms the proposals that were discussed in the EU Common Agricultural Policy (CAP) health check in November 2008. We summarise the key changes as follows:

· Permanent crops become eligible – including permanent fruit, vegetables, nursery crops and vines.

In the South West this will affect commercial apple and pear orchards, fruit growers with apricots, peaches, cherries, plums, sloes and quinces, and there are also opportunities for nursery crops including those under poly tunnels and some herbs, nut and citrus fruit crops. This is also an opportunity for vineyard owners.

This land is now eligible to claim against normal entitlements for 2009, even if you are registering to establish new entitlements in 2010. This has provided an opportunity to gain an income from this land through either buying in normal entitlements or letting out “Naked Acres”.

· The end of Set Aside entitlements has meant that the set aside entitlements will be converted to normal entitlements and can be transferred out and claimed on. These have a market value of flat rate, if you have excess set aside entitlements these can now be traded on the open market.

· National Reserve entitlements can be transferred out in 2009 to be transformed to normal entitlements; this will mean that they will not have to be used every year, and the usage rule will apply as per normal entitlements.

· The usage rule will be changing in 2010 from three years to two years, although entitlements that were last claimed in 2007 will still be eligible for the 2010 claim.

· Modulation has been set at 19% from 2009 – 2012 this will also take into account the differences in modulation that the EU has set.

· From 2009 there will be modulation refunds applied to the initial payment, rather than paid at a later date.

· The minimum claim size for 2009 is 0.3 ha; however this is set to change in 2010 from either one to five hectares, or to a minimum claim of €200.

· From 2008 all SPS payments will be made directly to bank accounts by BACS transfer, however there are still a small number of people who have not registered their bank details with the RPA.

· From 2009 there is a maximum limit of the fund available for SPS and other direct payments for the UK, this could lead to scale backs by the RPA. The scale backs would be taken off the total claim above the standard modulation rates.

The Scheme has also made changes to cross compliance. It is important to be aware of the cross compliance obligations of claimants as the penalty for the first breach in cross compliance will be 3% on the whole claim, which is EFFECTIVE IMMEDIATELY, and there will be no warning letters or second chances, there will be an automatic penalty.

The new amendments for the Single Payment Scheme have broadened the opportunities for farmers and growers to increase income on their holdings through a number of measures. We can offer advice on the sale and transfer of entitlements, along with letting naked acres and the positives and negatives of doing this. We can also offer agricultural services including registering land, mapping land and submitting SP5 applications. We advise on ELS, HLS, OELS and existing Countryside Stewardship Schemes and Woodland Grant Schemes. We can also advise on Catchment Sensitive Grants, and improving farm facilities.

For further information contact Hugh Townsend at Townsend Chartered Surveyors on 01392 823935.

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