UK: Land And Farming - Summer 2015

Last Updated: 15 May 2015
Article by Smith & Williamson

STAKING A CLAIM - MAKING SENSE OF THE BASIC PAYMENT SCHEME

The Basic Payment Scheme (BPS) came into effect on 1 January 2015. In England pretty much all of the scheme rules are known and the Rural Payments Agency (RPA) has published the final guidance handbook for the 2015 BPS. This booklet incorporates, and in some cases updates, all the information which was sent out in the five leaflets during 2014. All previous claimants should have received a hard copy of the booklet.

The most significant update is to the management of fallow land, especially as we are already in the fallow period. The new rules state grass can only be sown during this period (1 January to 30 June) if it can be demonstrated that this is for reasons other than agricultural production, such as where it is sown under an agri-environment scheme. There has also been a change to the eligibility of trees. The new definition means land with trees on it is eligible so long as the trees:

  • are scattered within the parcel
  • allow agricultural activity to be carried out as if the trees weren't there.

In such cases it is not necessary to deduct the area taken up by the trunk or the canopy, but land is not eligible if the vegetation under the canopy is not able to grow.

Changes to the claims process

In England, far more concern has been over the mechanics of actually making a claim. But issues with the functionality of the new Rural Payments System (RPS) have been alleviated after the RPA announced a switch back to paper applications only for 2015. There will be no online application method available in 2015. Furthermore the BPS deadline has also been extended. It appears a number of member states are having problems implementing new systems and the European Commission has granted member states the option to extend the BPS deadline. Defra has confirmed that it will take up this option and BPS applications will now need to be submitted by 15 June 2015.

Claims will now be made using BP5 forms with any changes to the Rural Land Register (ineligible features, boundary changes, registering new land) or entitlement transfers being notified on the RLE1 form. The BP5 form is similar to the previous SP5 form, although there is some added complexity with greening. Around 39,000 claimants will be fast-tracked through the system, this includes those with few changes to land and who are exempt from greening. These applicants will be contacted via email with a summary of land and entitlement information and will be able to complete their claim by email.

Previously, six weeks' notice was required to transfer entitlements. This is not the case in 2015 (although the guidance still states this). In addition it is not necessary to send an RLE1 form in by 2 April. The RPA has announced 15 June as the submission deadline for RLE1 forms in England. For entitlement transfer, both the transferee and the transferor will need to be registered on the RPS, but only the person receiving the entitlements must be an 'active farmer'.

To apply for the BPS, claimants (except those who have been fast-tracked) will need to make sure all of their land is included on the BP5 form, even if they do not intend to claim BPS on all of it. This includes any land in a rural development programme. Blank BP5 forms and guidance are available online at www.gov.uk/government/publications/how-to-apply-for-the-basic-payment-scheme-in-2015. RLE1 forms are available at www.gov.uk/government/publications/tell-the-rural-payments-agency-about-land-changes-and-entitlement-transfers. Prepopulated forms are due to be sent out during April. To complete a BPS claim you need to:

  • check that all of your land is included on the form.
  • ensure total field size and maximum eligible areas are correct. The area of permanent ineligible and temporary ineligible features must be deducted.
  • enter land use – a full list of land use codes is available online and different codes are required for each crop to enable crop diversification calculations to be completed. Do not use the codes for 2014. Each different land use should be entered as a part field using the suffixes A, B, C etc.
  • enter details of Ecological Focus Areas (EFA). These will not need to be mapped – areas or lengths will need to be entered onto the form. Note that the area of buffer strips used for EFA should be entered as a part field on the field data sheet as either permanent grassland or an arable buffer strip.
  • declare active farmer status and indicate intentions to apply for the Young Farmers' Payment, entitlements through the National Reserve and relevant certification forms. Evidence will also need to be submitted.
  • organic farmers must indicate if they wish to use the organic exemption under greening. Evidence will need to be submitted to show that land parcels are organic.

In Wales and Scotland, the effect on payments of the introduction of the BPS will be far greater than for England because of the move from the historic payment system to the regional basis, which took place between 2005 and 2012 in England. Claimants could see the amount they receive alter dramatically. To prevent too many 'big winners and losers' it is necessary to define regions and make a new grant of entitlements. In Wales there has been a problem with the moorland region and at the time of writing this still has not been resolved and no regions have been defined.

With regards to the claiming process, Scotland has introduced a new online 'rural payments' system to accept claims this year, but paper application forms are still available. Although in turmoil over defining its regions, at least the claiming process should be a little easier in Wales. It has not introduced a new computer system and rural payments Wales online remains, and therefore the transition should be a little easier. Paper applications are also still available. However in Wales, payments in 2015 are expected to be delayed. The Welsh Assembly Government has planned to make 80% of the payment in December with the remainder by May 2016.

RURAL DEVELOPMENT PROGRAMME FOR ENGLAND IN PRACTICE

The Rural Development Programme for England (RDPE) has been approved by the EU. The set of schemes, worth a little over €4bn in the period 2014 to 2020, was signed off by the European Commission on the 13 February. This has allowed Defra and other organisations to start the roll-out of the various schemes under the 'second pillar' of the CAP.

To recap, the RDPE is organised under a number of headings.

  • Environment – agri-environment schemes will take up the biggest slice of RDPE funding (87%). The new Countryside Stewardship Scheme (CSS) will be the flagship programme, although much of the money will actually go to funding existing Entry Level Stewardship (ELS) and Higher Level Stewardship (HLS) agreements, rather than being on offer for new contracts. Around £2bn will honour existing commitments leaving around £900m for the CSS. The CSS will comprise:

    • Higher Tier – Similar to HLS but will include forestry. It will effectively be by invitation only. Natural England and the Forestry Commission will compile a 'pool'. Expected to be open for applications July to September 2015.
    • Mid Tier – This will not be automatic entry like the ELS. It will be competitive and scored against local priorities and those representing the best value for money within the budget will be selected. Expected to be open for applications July to September 2015.
    • Hedge and Boundaries Capital Grant – funds up to a maximum of £5,000 will be available for capital items such as hedge laying, coppicing, gapping up, hedgerow trees, stone wall restoration, earth bank restorations etc. Expected to be available from February 2016.
    • Facilitation funds – to assist groups applying. The deadline for applications is 13 May 2015.
  • Competitiveness – this will comprise 4% of total funds. It will include the Countryside Productivity Scheme, the successor to the Farming and Forestry Improvement Scheme (FFIS). This will fund projects to improve animal productivity, health and welfare; arable and horticultural productivity; forestry productivity and resource management. Detailed scheme rules are now available and the scheme is open – the deadline for applications is 30 June. Also under this heading is training. It is claimed the RDPE will create up to 120,000 training places.
  • Growth – the 5% of RDPE funds channelled into this area will go into Local Enterprise Partnerships (LEPs). These quangos will set their own funding priorities, and it will be up to the farming sector to know (and influence) what their local LEP is doing. More details can be found at www.lepnetwork.net/. LEPs are likely to want to offer relatively large grants (up to £0.5m) for significant projects.
  • LEADER – these 'community groups' will have 4% of RDPE funds. Local Action Groups (LAGs) in each LEADER area will set priorities. Like LEPs, it will be important to know what is happening locally. Most LEADER groups are likely to offer 30-50% grants for small scale projects up to £100,000 in scope. For more details see – www.gov.uk/government/publications/leader-approach-in-the-rdpe-national-delivery-framework/leader-approach-in-the-rdpe-national-delivery-framework

To read this Newsletter in full, please click here.

We are grateful to Andersons, the farm business consultants, for their contribution to this bulletin. We have taken great care to ensure the accuracy of this newsletter. However, the newsletter is written in general terms and you are strongly recommended to seek specific advice before taking any action based on the information it contains. No responsibility can be taken for any loss arising from action taken or refrained from on the basis of this publication. © Smith & Williamson Holdings Limited 2015 code: 15/406 expiry date: 01/11/15

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