Enviromental Neglect will hurt Farmers financially under new CAP rules
Date of Article
Oct 13 2011

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Farmers who ignore their environmental responsibilities could find that such a strategy will have a negative impact on their agricultural business with future greening measures.

Under proposed reforms to the Common Agricultural Policy that have just been outlined, greening measures could account for 30 per cent of funds under the Direct Payment National Envelope. Under “Direct Payments”, the Basic Payment Scheme is set to be the successor to the current Single Payment Scheme.

The announcement from the European Commission confirms the predictions made by rural land use expert Tim Jones, head of Rural Division at national property consultancy Carter Jonas in Q1 of 2011.

“Sensible land stewardship under the CAP reforms will be brought to the fore and farmers who choose to ignore the forthcoming reforms including greening measures are likely to find it an expensive mistake,” he warned.

In addition to the Basic Payment, each holding will receive a payment per hectare for respecting certain agricultural practices which are beneficial for the climate and the environment. Member States will use 30 per cent of the national envelope in order to pay for this and it is compulsory, and it is envisaged that it will not be subject to capping.

The three measures foreseen are:

  • retaining permanent pasture; and
  • crop rotation (a farmer must cultivate at least three arable crops, each comprising between 5-70 per cent of the arable area and
  • having “ecological focus areas” of at least 7 per cent of all farmland (excluding permanent grassland) – i.e. field margins, hedges, trees, fallow land, landscape features, biotopes, buffer strips, afforested area.

The good news for organic producers, who have already been under financial pressures as demand for their produce falls during the recession, is that there are no additional requirements, as their operations are shown to provide a clear ecological benefit.

“There are also major changes intended to make payments more uniform for producers, not only between regions within member states but also between member states as well,” adds Jones. “However, this does not mean parity of payments, so some will still get more than others, although the Commission is saying it wants to reach complete convergence between payments across the EU from 2020. Whether or not they achieve this vision is a long way off in the future.”

Young farmers, those aged up to 40, will also receive extra payments during their first five years of operation while small farmers will benefit from a simplified payment scheme.

In order to iron out a number of legal loopholes, the Commission is tightening the definition of active farmers and a test will be applied. This is aimed at excluding payments to applicants who have no real or tangible agricultural activity, and direct payments would not be made where these form less than 5 per cent of total receipts to the business from all non-agricultural activities.

With wine and milk quotas already set to expire, the EU is also intending to end the sugar quota scheme by the end of September, 2015. For the period after quotas, white sugar will become eligible for private storage aid, and standard provisions for agreements between sugar factories and growers should be established.