Legal updates
Single Payment Scheme - European Union agrees to major change to rules to support claims for entitlement
ON January 21 2008, the European Union's Agricultural and Fisheries Council agreed to a major change in the rules of the Single Payment Scheme.
Previously, if a farmer claimed under the old rules, he/she had to have the land used to support their Single Payment Scheme claims at their disposal for ten months of the year with the start date of that ten month period selected by them usually chosen to reflect the timing of cropping. This has now been changed so that from 2008, the claimant has to have the land at their disposal only on May 15, ie for one day only. This is also the date by which all claims for that year must be received by Defra. However, responsibility for ensuring that the cross compliance requirements are met remains with the claimant for that calendar year even when the land has been sold.
The Single Payment Scheme was introduced in England in 2005 when there was a one-off opportunity for farmers to establish entitlements. It should be remembered that the entitlements are attached to the farmer and not the land but that land is necessary to support a claim. A farmer can thus sell the land which has been used to make the claim with or without the Single Payment Scheme entitlements. The farmer who retains the entitlements on selling the land can either transfer them to other land (providing that land is on the Rural Land Registry) or sell them to someone else. Generally, a farmer with land that has received subsidies historically will have the full value of the Single Payment Scheme per hectare. This would thus have a much greater open market value than someone who was a new entrant in 2005 and started with 10 per cent of the full value increasing yearly to 100 per cent in the final year.
It is suggested that the change in the rules will give farmers greater flexibility to transfer land throughout the year providing that the land was occupied on May 15 by the person claiming the payment in that scheme year rather than being subject to the previous restrictions. The Rural Payments Agency, an Executive Agency of Defra, expect to pay out around £1.5 billion annually under the scheme.
The Common Agricultural Policy (CAP) is about half way through the designated period and is currently undergoing a "health check". It is likely that other changes will be announced in due course.
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