On CAP Reform, entitlements and simplification

Britain's membership of the EU has been the hot topic over the last few days. It is no coincidence that the Defra Secretary of State, Owen Paterson, took to his keyboard today to answer questions on CAP Reform during a web chat hosted by the Farmers Guardian.

Mr Paterson has strong views on income support payments for farmers and has made no secret of his long term wish to see the CAP become more of a common environment policy than a common agricultural policy, with so-called 'Pillar 1' direct payments phased out in favour of payments for public goods. (We wonder how this fits with the EU environment policy that already exists under the treaties, but that is a debate for another time.)

Encouraging steer

More to the point today was the encouraging steer from the Secretary of State regarding his plans to ensure that there is as little change as possible as far as the nuts and bolts of the new scheme go.

One of the things that has concerned us at Roythornes is the uncertainty created by a long transitional period between the current scheme and the new basic payment scheme. We recently published our Winter update on CAP Reform that covered this in more detail.

We have been particularly worried about the uncertainty created for new farm businesses or restructured businesses which were not SPS claimants in 2011. Under the initial reform proposals published by the European Commission back in October 2011, any farm business that did not make an SPS claim in 2011 would not be entitled to an automatic allocation of the new entitlements that were set to be allocated in the first year of the new scheme. Instead, they would have to rely on the national reserve/private contract clause/inheritance and similar safety-net mechanisms that are far from guaranteed.

However, there is now a proposal on the table to allow countries like England, which have a flat-rate payment scheme in place covering almost all eligible hectares of land, to carry through existing entitlements to the new scheme. That is good news as far as it goes.

The big question is whether Defra will take up this option. 

We asked the Secretary of State the question during today's web chat. To be precise we asked: 

"Is the Secretary of State planning to take up the option to maintain existing entitlements in England? Doing so will reduce bureaucracy and simplify the introduction of the new scheme significantly, but an early steer on this issue is vital to enable expanding or new farm businesses to plan with certainty."

The Secretary of State replied:

".. .emphatically yes. We want to try to keep to the existing system as much as possible and keep things simple for claimants and the RPA."

If Mr Paterson's 'emphatically yes' means yes in practice, that can only be good news for the majority of farmers in England. We cannot yet be certain that the option to keep current entitlements will make it into the final package - which is still some way off being agreed. But it is certainly encouraging that the Secretary of State genuinely seems to be aiming for simplicity as far as he can (and as far as simplicity is ever possible when it comes to agricultural support regimes). 

If you have any questions at all about how the current reform of the CAP might affect your business, please give Julie Robinson a call in the first instance. She is on 01775 842618.