Cap powerpoint presentation March 2013

The History of the CAP

The History of the CAP

• Sets out farming, environmental and rural development activities and controls EU agricultural markets

• Designed to boost European food production and increase food incomes

• Enlarged EU and changing agricultural objectives mean the CAP must evolve

• Moving away from traditional subsidies towards provision of public goods (i.e. environmental)

• Rural environment plays an increasing role

• Pillar 1 – Direct payments to farmers

• Pillar 2 – Rural development

- Improve competitiveness- Improve environment and countryside (agri-environment schemes)- Improve quality of life and economic diversification

2013 – 2020

The Future

The Future2013 – 2020

• New scheme, new entitlements and fresh applications

• Due to start in 2014, now delayed to 1 January 2015

• 2013 – 2014 – Single Farm Payments will bridge the gap

• Owen Paterson, DEFRA Secretary of State, wishes to see a ‘common environment policy’, rather than a common agricultural policy

• 27 member states need to ‘find consensus’

• ‘Greening’ and ‘Basic Payment’ – moving away from Pillar 1

• ‘Golden Ticket’ or carry forward old entitlements?

2015 – 2020‘The Golden Ticket’?

The Future2013 - 2020

• Only those who claimed in 2011

• Must be an ‘active farmer’ and have land at his disposal

• No subdivision on a transfer

• Complaints

- Should eligibility extend to other years (i.e. 2010 or 2012)

- Subdivision- Need to reapply

2015 – 2020Entitlements remain the ‘same’?

The Future2013 - 2020

• May be able to carry over existing entitlements to new scheme

• Only if already have a flat-rate payment scheme (England)

• Not an option for those who still make payments on a historical basis (Scotland and Wales) • Owen Paterson, DEFRA Secretary of State, says that he will take this option if it is on offer –

“We want to try and keep to the existing system as much as possible and keep things simple for claimants and the RPA”

The Future2013 – 2020

• DEFRA is “not proposing to end direct payments tomorrow” but that “during this 7 year period, from the beginning of 2014 to 2020, we should be moving in that direction. In an ideal world, yes, we would like to see them end soon after that.”

• “If you look at Pillar 1, when you look at how many agricultural producers are actually producing, and living, below the official poverty line, it just makes you realise just how important Pillar 1 is, particularly in the tenanted sector, where they have to pay a rent before they take any drawings. Take Pillar 1 away and I think you…snatch the rug from a huge proportion of the tenanted sector” – TFA

• The NFU argues that direct payments “provide a degree of income stability to farmers which enables them to maintain productive capacity despite volatile agricultural markets”

Issues to Consider & Problems with Uncertainty

Issues to Consider & Problems with Uncertainty

• Existing tenancies –

- Farm business tenancies- Agricultural Holdings Act tenancies

• New farm business tenancies

• Surrendering land

• Buying land

• Selling land

• Partnerships and restructuring

Issues to Consider & Problems with Uncertainty

• Proceed with caution

• Keep up to date • Take advice

• Consider longer term implications

• Can it wait?

• What if it cannot wait?

- Take a view- Make sure documents are clear – what is your intention?- Dispute resolution clauses

“Nothing is agreed until everything is agreed…”

(European Council)

“Nothing is agreed until everything is agreed…”

• Budget dependent

• Irish Presidency wants political agreement by end of June 2013…

• Nothing is certain until –

- It is within the European Regulation- It is implemented by DEFRA