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Farmers warned over CAP changes

Specialist agricultural accountants Moore Thompson are warning farmers about potential changes to the Common Agricultural Policy.

The European Commission is planning to replace the Single Payment Scheme with one that potentially combines lower payments with an increased focus on environmentally-friendly farming practices.

When the Basic Payment Scheme comes into effect from 1st January 2014, it is likely the payments will probably be comprised of different elements - a basic support payment and a green payment. These are likely to form at least 60 and 30 percent respectively of the overall payment.

There will also be an upper limit on the size of the payments made, which will reduce by the following percentages within set bands:

• 20 percent for payments between €150,000 and €200,000
• 40 percent for payments between €200,000 and €250,000
• 70 percent for payments between €250,000 and €300,000
• 100 percent for payments over €300,000

This progressive cap will not apply to the green payments, and farmers can also deduct the value of the wages they paid the previous year.

Andrew Heskin, a partner in Moore Thompson’s Farming Sector team, said farmers must take measures in order to receive the green payment.

He said: “To receive the additional green payment, farmers will need to ensure that they diversify their crops, maintain permanent pasture and include an ecological focus area on five percent of their agricultural land.

“The legislative proposals for these changes to the Common Agricultural Policy are likely to be published on 12th October. The negotiations will then take around 18 months.

“They will probably include measures to prohibit farmers who have rearranged their affairs to avoid the effects of capping from receiving payments. Therefore, we recommend that you seek independent professional advice before taking any action, so please contact us for more information.”

Moore Thompson, which has offices in Spalding, Wisbech and Market Deeping, has a dedicated and highly trained farming sector team, whose experience and specialisation enables them to offer a personal service covering all aspects of taxation, accountancy and business advice to farmers and growers.

For more information, please contact Moore Thompson in Spalding on 01775 711333, in Wisbech on 01945 465767 or in Market Deeping on 01778 380850, or visit www.moorethompson.co.uk.

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