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CAP Details Released

Wednesday saw the long anticipated details of how the Scottish Government intend to implement the CAP from 2015 onwards. Richard Lochhead outlined a package of measures that he hopes will provide the best outcome for Scottish farming. 

Eligibility & area of land: Farmers will be able to apply for entitlements to the new Basic Payments if they are able to demonstrate agricultural activity, for example, by having activated a Single Farm Payment (SFP) entitlement in 2013, or by having other verifiable evidence of farming activity. In 2015, eligible, active farmers will be allocated the number of payment entitlements equivalent to whichever is the smallest of the number of eligible hectares declared in 2013 or 2015. 
Minimum activity requirement – Scottish clause: Farmers will be required to demonstrate they are undertaking some type of minimum activity on land that is naturally kept in a state suitable for grazing or cultivation. In Scotland this area is typically rough grazing land. Minimum activity requirements will include a minimum stocking density (with derogations) as well as other alternative measures.
Negative List: Sporting estates will be added to the list of business types to be excluded from future direct payments. 
Transition to area-based payments: The initial 2015 value of payment entitlements will take account of a farmer’s historic Single Farm Payment (SFP) value and between 2015 and 2020 payment entitlement values within each Payment Region will converge so that by 2019, all payment entitlements have a common value of the regional area rate.
Payment regions: There will be three payment regions which will determine the final area rates of the Basic Payment. 
  • Payment Region 1 (around 1.8m hectares) will include parcels of better quality agricultural land that has been typically used for arable cropping, temporary grass and permanent grass.

Rough grazing will be split between two further payment Regions. 

  • Payment Region 2 (around 1.0m hectares) will include parcels of better quality rough grazing which have been designated as LFA grazing categories B, C and D. 
  • Payment Region 3 (around 2.0m hectares) will include parcels of the poorest quality rough grazing which have been designated as LFA grazing category A.
Depending on the area of eligible land declared for the new scheme, the 2019 combined area rates for Basic Payments + Greening Payments would be in the order of €220/ha for eligible land in Payment Region 1, €35/ha for eligible land in Payment Region 2 and €10/ha for eligible land in Payment Region 3.
Voluntary Coupled Support (VCS):  Scotland intends to use 8% of its revised national ceiling for coupled support payments to the beef industry with a further amount up to 0.5% being used for further top up payments for the beef producers on the islands. Payments will be made for calves with 75%+ beef genetics which are born on Scottish holdings. Beef coupled support payments will be front loaded, with double the rate paid on the first 10 calves. Beef calf producers on Scottish islands will receive higher rates than mainland producers. 
In addition, Scotland intends to target coupled support payments for sheep to help Scottish farming businesses which are reliant on rough grazing. 
New entrants: There will be a package of measures under both Pillars of the CAP specifically targeted at new entrants. Existing new entrants will be eligible for Basic Payment entitlements if they are able to produce verifiable evidence of farming activity in 2013. They will also be able to apply to the National Reserve to top up the value of their payment entitlements to the regional average value from Day 1. Future new entrants will also be allocated entitlements from the National Reserve and funding will be generated by further top slices to the Basic Payment ceiling. 
Capping: In addition to the mandatory 5% degressivity deduction there will be a cap on Basic Payments at €400,000 after taking labour costs into account. Greening, Young Farmer Scheme (YFS) payments and Voluntary Coupled Support (VCS) payments are not subject to either degressivity or capping.
Siphon and windfall profit: There will be a siphon on sales of entitlements without land and the windfall profit measure will be applied where there is an increase in entitlement value due to the ending or sale of lease. 
Young Farmer scheme: Top up payments to farmers under 40y at the time of applying will be available. The payments which will be made on up to 90 hectares of a farmer’s claim, will be top ups of 25% of the regional average entitlement value. 
Greening: There will be a package of greening measures including some standard and some equivalent measures that are tailored to Scottish needs. 
  • Crop Diversification: farmers will be allowed to choose between Europe’s standard greening requirement and an equivalent ‘winter soil cover’ requirement, or an equivalent ‘catch crops’ requirement. 
  • Permanent Grassland: farmers on permanent grasslands will be required to produce a nutrient management plan.
  • Ecological Focus Areas: Standard measures will be implemented under the Ecological Focus Area requirement and features such as fallow, buffer strips along watercourses and field margins, catch crops and nitrogen-fixing crops (with management prescriptions) will count towards the requirement. The option to implement the EFA requirement at a regional or collective level will not be implemented in Scotland.
Standard greening measures will be implemented as of 1 Jan 2015 however if the equivalent measures have not been approved by the Commission in time, equivalence will be implemented from 1 Jan 2016.
Standard greening measures will be implemented as of 1 Jan 2015 however if the equivalent measures have not been approved by the Commission in time, equivalence will be implemented from 1 Jan 2016.
Mr Lochhead announced a new £45 million three year beef improvement scheme. This will aim to deliver economic and environmental improvements. This will include £32.5m for support towards genetic resilience, plus targeted support for the beef sector through other budget lines including Knowledge Transfer and Innovation Fund and the Advisory Service. 
Mr Lochhead’s speech to Parliament can be found here:
Scottish Government supporting documents can be found here: 
Scottish Land & Estates initial response can be found here...

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