Carter Jonas
Carter Jonas

Who is an ‘active farmer’?

 

This is a question that has been vexing a number of “farmers” for some time because under the new Basic Payment Scheme (BPS) only “active farmers” will be eligible to receive EU support payments from 2015 onwards.

Until now, the definition of an active farmer has not been entirely clear and as a result there has been concern that, for example, those farmers who have successfully diversified may no longer qualify as an active farmer even if they are clearly still farming in a reasonably significant manner.

However, what we have known for some time is that there is a “negative list” of non-agricultural activities that will not qualify:

  • airports
  • railways
  • waterworks
  • permanent sport and recreational grounds
  • real estate services

The first four categories seem reasonably straightforward but the fifth category has always caused concern, not least because no one understood what “real estate services” really meant. But now things have become clearer following DEFRA’s latest publication on the subject.

We now know that “operating a real estate service” applies to professional property developers, real estate agencies, and people managing real estate on a fee or contract basis.

However, what is perhaps of more importance to farmers is that renting out accommodation facilities on a farm - apartments or homes that are in a farmer’s private property for housing purposes, parts of buildings or surfaces on the holding, and agricultural land to third parties - will not count as real estate services. This should cover many potential diversification activities.

But farmers who operate any of the five non-agricultural activities may still qualify as active farmers if they meet one of three “re-admission criteria”:

  • the farmer’s annual payments for the Single Payment Scheme or BPS (including the greening payment and any young farmer payments) are at least 5% of their total non-agricultural receipts in the most recent financial year
  • the farmer’s total agricultural receipts are at least 40% of their total receipts in the most recent financial year

  • the farmer has at least 36 hectares of eligible land

So it seems that after all this uncertainty and confusion, the simplest way to ensure you will always qualify as an active farmer is to farm at least 36 hectares or 89 acres. Why 36 hectares is deemed to be the magic number is another example of those bizarre interpretations of EU legislation but at least it will mean “active farmers” now know where they stand.

James Stephen

James Stephen

Partner

James is a partner who heads up Carter Jonas’ South West rural operation, managing the teams in the four offices of Marlborough, Bath, Taunton and Truro.  He primarily works out of the Taun...

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