CLA CAP Talk Nov 13 - Land Partners

3rd December 2013

CAP Reform update
Impact on farming business 2013-2015

Simon Dixon Smith MRICS FAAV

Land Partners : CAP Reform update: December 2013

www.land-partners.co.uk

DEFRA statements of intent
• “We will seek to adopt the simplest approach which is most likely to
minimise the burden on you and the RPA…”

• “We will seek to implement a direct payment system which is simple
and accessible to you, by eliminating unnecessary complexities and
by avoiding gold plating”
• “Simplicity, affordability and effectiveness will underpin our approach
to implementing the new CAP in England and the policy choices we
take. I am resolutely determined to avoid the mistakes of 2005.”



Overall UK budget changes
2007 – 2013
• Pillar 1 £20.5bn
£24.2bn
2015 – 2020

£19.64bn
•



DEFRA consultation
•
•
•

Accelerated Period
31st October to 28th November
Some decisions made



Who will be affected?
•
•
•
•
•

Largest farms
Smallest farms
Occupancy changes
Young farmers
Everyone else…



Largest Farms
If more than €150,000 after greening (c1750 acres cropped)
Preference – Degressivity
-

5% deductions

-

Unlikely to be any allowance for salaries

Or – Re-distributive payments
-

Up to the first 54ha

-

Max 65% top-up

>30ha arable – 3 crops to be grown


Smallest Farms
• Less than 5ha – no claim allowed
• Less than 10ha of arable land – no crop diversification

• Less than 15ha arable land – no Ecological Focus Area
• Less than 30ha arable land- 2 crop to be grown unless


75% of holding grassland or

 75% of arable area temporary grass
Consider letting out some land to bring the holding under the
thresholds



Occupancy Changes
Entitlements will roll over
31st December 2014
2015 claim area
National Reserve

Crop diversification if you rent out more than 50% of your land



Young Farmers
Someone under 40 the „head of the holding‟
Budget ceiling
Minimum skills & training requirement?
BPS top-up for 5 years

Each claim before 40th Birthday

Defer appointments?



Everyone Else
Direct Payments (Pillar 1):
• Movement of area payments „uphill‟
2015, before
deductions
(per hectare)

SDA

Moorland

Current

€242

€195

€34

Proposed

•
•
•
•

Lowland

€236 (-2.5%)

€236 (+20%)

€62 (+82%)

Loss of entitlements in excess of eligible area
Block cropping
Potential Alternative Certification Scheme
Ecological Focus Areas



Everyone Else
Direct Payments (Pillar 1):
•
•
•
•
•
•
•

Contracting agreements
Permanent grassland restrictions
Potential for group EFA‟s
More crop codes
Designation of Permanent Grassland
Tenancy agreement review
Computer literacy



Everyone Else
Obligations to be reduced:
•

13 Statutory Management Requirements (SMRs) – from 18

•

7 Good Agricultural & Environmental Conditions (GAEC) – from
16



Ecological Focus Areas
Options include:
•
•
•
•
•
•
•

Land lying fallow
Landscape features (active management requirements?)
Buffer strips
Afforested areas (established under RDS)
Short rotation coppice
Areas with catch crops or green cover
Areas with nitrogen-fixing crops



Rural Development (Pillar 2)
“Our aim will be to implement regulations in a way that is as simple,
effective and affordable as possible, while seeking to achieve good
value for taxpayers and customers”

“I believe that transferring the maximum 15% from Pillar 1 to Pillar 2
would be the right thing to do….” Rt Hon Owen Paterson MP

Level of P1 to P2 transfer to be confirmed by 31 December 2013



Max budget for England £3.874bn incl. 15% transfer P1 to P2

•
•
•
•
•

CLA/NFU advocating 9% transfer P1 to P2
Existing commitments carried forward c£2.1bn
Headroom for NELMS - £600m to £1,500m
No new ELS agreements until January 2016
National co-funding c£558m over plan period



New Environmental Land Management Schemes from 2015
(NELMS)
-

Site specific agreements (c.f. HLS)
Area based agreements (targetted)
Small scale capital grant scheme

„Upper Tier‟
„Mid Tier‟
„Lower Tier‟

Expecting area of land under agreements to fall from
70% to 35-40%



In 2014 expiring „classic‟ agreements (other than ELS) will be
renewable as ELS or HLS
Risk of additional modulation? (10% + 9% in 2013)
ELS features & EFA interaction
Historically 83% of Pillar 2 has gone to agri-environment schemes
Dual Use to be scrapped?



Budget Constraints
Re-allocation:
•
•
•
•
•

Movement „uphill‟
Young Farmers
National Reserve
Degressivity
Movement between regions ?

2.5%
2%
3%
0.08%

Possible cuts:
• EU Budget cuts
• Financial discipline


1.5%
2.45%


Budget considerations
• 1,000 acre north Essex/south Suffolk cereal farm



Current
Cropping – Winter Wheat, 2ND Wheat, OSR
ELS – including 25ha of 6m Buffer strips
ha

Gross Margin

Total

WW1

127

1024

130,048 (10T at £150/T DC £476/ha)

WW2

127

857

108,839 (8.5T at £165/T DC £546/ha)

OSR

126

695

87,570

ELS

25

(3.5T at £320/T DC £505/ha)

12,150
338,607

Other Income

SPS
Overheads
Contracting
Others

85,000
110,000 (£110/ac)
54,000 (£54/ac)

Net Profit (before Prior charge and Divisible) 259,607 (£260/ac)


Case Study 1
Maintain ELS, Cropping WW1, WW2, OSR/25ha Winter Beans
(3rd crop and EFA met by beans)
ha

Gross Margin

Total

WW1

127

1024

130,048

WW2

127

857

108,839

OSR

101

695

70,195

Winter Beans

25

615

15,375 (3.75T at £220/T DC £210/ha)

ELS

25

12,150
336,607

Other Income
BPS + Greening
Overheads
Contracting
Others

80,000
110,000 (£110/ac)
54,000 (£54/ac)



Case Study 2
Give up ELS, use buffer strips for EFA and 3rd Crop
ha

Gross Margin Total

WW1

127

1024

130,048

WW2

127

857

108,839

OSR

126

695

87,570

Buffer
Strips

25

0

326,457
(Could maintain ELS as well – make up points from other out of field options +
£12,150, funds permitting)
Other Income
BPS + Greening
Overheads
Contracting
Others

80,000
110,000 (£110/ac)
54,000 (£54/ac)



Case Study 3
Maintain ELS, have 25ha fallow, use this for EFA and 3rd crop.
Rotate the fallow around the farm to control Blackgrass!!!! (fallow
might have to have a winter cover crop)
ha

Gross Margin

Total

WW1

127

1024

130,048

WW2

127

857

108,839

OSR

101

695

70,195

Fallow

25

ELS

25

12,150
321,232

Other Income
BPS + Greening
Overheads
Contracting
Others

80,000
110,000 (£110/ac)
54,000 (£54/ac)



Conclusions
• Actions now may impact on 2015
• Definition of EFA features will be critical
• Bottom line may not be too bad

Nothing is decided until
everything is decided



Land Partners LLP
The Old Stables, Lyons Hall Business Park, Lyons Hall
Road, Braintree, Essex, CM7 9SH

info@land-partners.co.uk
01376 328297


CLA CAP Talk Nov 13 - Land Partners

Recommandé

Recommandé

Contenu connexe

Tendances

Tendances (20)

En vedette

En vedette (20)

Similaire à CLA CAP Talk Nov 13 - Land Partners

Similaire à CLA CAP Talk Nov 13 - Land Partners (20)

Plus de CLA - East

Plus de CLA - East (20)

Dernier

Dernier (20)

CLA CAP Talk Nov 13 - Land Partners