EU Aims to Attract New Blood into Farming

20th October 2011

“For the first time the EU has really attempted to address the ageing agricultural population by providing an incentive for farmers under the age of 40 to start up new businesses, says Louis Fell, Partner at George F. White says who welcomes the recent draft proposals from the European Commission aimed at talking this issue.

Currently two thirds of the UK Agricultural work force is over the age of 55and in the past there has been little or no incentive for this statistic to be changed. In the current farming climate making a living off the land without subsidy is a non starter. Very few farmers successfully applied and were granted entitlement under the new entrant scheme of the current CAP system. In comparison under the new proposals, an incentive of an additional 25% of the Basic Payment Scheme will be offered for the first five years.

This young farmer incentive will be a compulsory measure offered under Pillar 1 of the Basic Payment Scheme by all member states. The amount payable is however limited to the average farm size for each member state, with the UK average farm size being approximately 140 acres. It is also only payable to new entrants who are under the age of 40 and therefore will not be applicable to existing farm businesses.

Interestingly the draft proposals indicate that any new business started by a qualifying young farmer within the previous five years of the 2014 reform (2009-2014) will qualify for the young farmer incentive for up to five years i.e. if started in 2012 they may qualify for the three years post 2014.

In addition to the “top up” of the Basic Payment Scheme it is proposed that there will be a business start up incentive targeted at young farmers, this will be provided by a micro business financing grant of up to €70,000 available to new rural businesses who can also access training and advisory support.

Louis Fell adds, “These two incentives represent a real opportunity for younger farmers to get involved and start up their own rural businesses. It is however likely that there will be significant competition for the grant funding and a limited number of landlords who will be willing to support young farmers and their new farm businesses. Whilst the full details will not be formulated and agreed until 2014, young farmers need to make sure that they have their plans in place to take advantage of any opportunities which may come around when the reform of the CAP payment is finalised.”

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