Cap Reform And Stewardship – What Does Greening Mean To Arable Farmers Now?

6th March 2013

The CAP reforms have implications for all farmers, with those involved in arable farming most affected by the opportunity to claim greening payments. Following the latest vote in the European Parliament, now is a good opportunity to take stock and consider the questions most asked by arable farmers.

Whilst some farmers will be affected more than others when the changes are introduced in 2015, there has been particular attention paid by arable farmers to the ‘greening’ aspect of the proposals, the new layer of direct subsidy which will only be paid to claimants complying with certain environmental tests, over and above cross compliance. Whilst all farmers will have the opportunity to claim the greening payment, the impact this will have on farming operations will vary according to the nature of farming practiced, with arable farmers seeing probably the greatest changes.

So what do we know for certain?

Nothing. Everything that has been proposed could still be altered in Europe. However, all the key bodies who are negotiating the reforms have now had their chance to put forward their proposals and alter controversial aspects of the new system.

Greening has been on the cards from the beginning of the debates and whilst there will probably be some fine adjustments to implementation, it is unlikely that there will be any more fundamental changes now.

How much is at stake?

30% of the overall subsidy budget will only be available to farmers complying with greening. In reality, because of various other deductions to be made from the overall subsidy budget, the greening tranche is likely to represent more than 30% of farmers’ claim value. Currently it is likely that the same percentage of extra payment will be added onto the claims of all farmers, regardless of where they farm. This has been reinforced by the latest vote.

Is it compulsory? What if I don’t comply?

Greening is not compulsory; in any given year it seems that claimants could take a view as to the cost of not complying with the greening requirements and foregoing the payment. There was a fear that farmers who did not comply with greening would forfeit their entire subsidy, however the latest vote has clarified that greening will be an additional ‘top slice’ of payment.

What do I actually have to do?

There are several ways in which farmers may become eligible for this payment.

The Statutory Tests: Brussels is proposing three tests by which farmers can become eligible for greening money. These are crop diversification (the growing of three crop types), preservation of permanent grassland (pasture not ploughed for seven years) and maintenance of an ecological focus area covering a percentage of the arable area.

Organic Farming: Organic farmers will be entitled to receive the payments automatically, without needing to comply with the statutory tests.

Mixed Farmers: Farmers whose land is more than 75% permanent pasture and who do not have more than 50ha of rotational land will not have to comply with the ecological focus area and three crop types of the statutory tests.

Agri-environmental Schemes: A new and welcome addition from the recent vote is the possibility that qualification for the greening payment may be had via agri-environment schemes such as ELS. Schemes will enable farmers to claim the greening monies “provided that these schemes have an impact that is “at least equivalent to that of (the statutory tests)”. This last point will require agri-environment schemes to be validated by Brussels to ensure that they deliver equivalent benefit.

Do I go into Stewardship now?

This is a matter of opinion. Some farmers have delayed starting new ELS agreements now to avoid having to put in place yet more environmental measures in 2015. This is still the least risky option as it retains maximum flexibility.

However, now more than at any point before in the negotiations, it appears likely that farmers will be able to make their stewardship agreements count towards greening. It is almost certain that there will be changes made to the ELS/HLS regime by Natural England after 2015 in order to avoid claimants being paid for the same thing twice, possibly through reducing payments for the items farmers will be implementing to meet greening. It is possible therefore that the scheme as it stands represents an opportunity for farmers to get into stewardship on better terms than will be available in future, and it would not be surprising to see a rush of applicants looking to enter stewardship before the end of this year, when the current ELS/HLS programme finishes.

As ever, there is not an answer which fits every farm, each one is unique. However as the end of the current stewardship programme approaches it may well be worth looking at locking into a scheme which we might in future look back at and see as being more generous than those available post 2014.

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