As members are aware, the future of the Common Agricultural Policy is currently being debated with several options on the table at present. One proposal is that a cap on the amount of direct support that any one recipient can receive should be introduced. Scottish Land & Estates believes that a cap should not be introduced and, along with most other stakeholders in the UK, will do all it can to resist it.
However, we feel it important that members are aware of the mechanisms that might be used to introduce a cap, if we are unsuccessful in resisting it.
A leaked document from the European Commission provides a little more detail. It is important to note that this document is not finalised and that these proposals could change before publication and that once published the regulation remains a draft and that the capping provisions might not make it into the finally agreed document given the bargaining process that has yet to take place. This information is provided on that basis.
The key points are:
1) It is currently suggested that any payments for greening activity should not be subject to a cap. At present, these are expected to account for 30% of direct support.
2) In order to take account of the role that large agricultural businesses play in terms of employment, it is suggested that the amount liable to a cap should be calculated by subtracting the salaries effectively paid and declared by the farmer the previous year, including taxes and social contributions related to employment, from the total amount of direct payments initially due to the farmer.
3) For the remainder, the proposal as it stands suggests that payments above €150 000 should be reduced by the following percentages:
By 20% for the amounts between 150K and 200K By 40% for the amounts between 200K and 250K By 70% for the amounts between 350K and 300K By 100% fro the amounts above 300K
4) The Commission is keen to ensure that no payments are made to those that artificially split either the agricultural holding or the legal person, or artificially transfer part of the holding to a related person. It therefore suggests that no payment should be made to any farmer for whom it can be established that they have artificially created the conditions to avoid the cap as from the date of publication of the Commission proposal for this regulation, which is expected to be 12th October 2011.
For more information, contact the Senior Policy Officer (Land Use)