The CAP has evolved from boosting food production to providing public goods and environmental services. It has two pillars - direct payments to farmers under Pillar 1, and rural development programs under Pillar 2. The future of the CAP from 2013-2020 is uncertain as the 27 EU members negotiate changes. Direct payments are still important but may decrease over time, moving away from traditional subsidies. The new system is delayed until 2015 and many details around entitlements, eligibility, and implications for land transactions remain unclear due to ongoing negotiations.

1. The History of the CAP

2. The History of the CAP
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Sets out farming, environmental and rural development activities and
controls EU agricultural markets
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Designed to boost European food production and increase food incomes
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Enlarged EU and changing agricultural objectives mean the CAP must evolve
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Moving away from traditional subsidies towards provision of public goods
(i.e. environmental)
•
Rural environment plays an increasing role
•
Pillar 1 – Direct payments to farmers
•
Pillar 2 – Rural development
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Improve competitiveness
Improve environment and countryside (agri-environment schemes)
Improve quality of life and economic diversification

3. The Future
2013 – 2020

4. The Future
2013 – 2020
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New scheme, new entitlements and fresh applications
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Due to start in 2014, now delayed to 1 January 2015
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2013 – 2014 – Single Farm Payments will bridge the gap
•
Owen Paterson, DEFRA Secretary of State, wishes to see a
‘common environment policy’, rather than a common agricultural
policy
•
27 member states need to ‘find consensus’
•
‘Greening’ and ‘Basic Payment’ – moving away from Pillar 1
•
‘Golden Ticket’ or carry forward old entitlements?

5. The Future
2013 - 2020
2015 – 2020
‘The Golden Ticket’?
•
Only those who claimed in 2011
•
Must be an ‘active farmer’ and have land at his disposal
•
No subdivision on a transfer
•
Complaints
-
Should eligibility extend to other years (i.e. 2010 or
2012)
Subdivision
Need to reapply

6. The Future
2013 - 2020
2015 – 2020
Entitlements remain the ‘same’?
•
May be able to carry over existing entitlements to new
scheme
•
Only if already have a flat-rate payment scheme (England)
•
Not an option for those who still make payments on a
historical basis (Scotland and Wales)
•
Owen Paterson, DEFRA Secretary of State, says that he will
take this option if it is on offer –
“We want to try and keep to the existing system as much as
possible and keep things simple for claimants and the RPA”

7. The Future
2013 – 2020
•
DEFRA is “not proposing to end direct payments tomorrow”
but that “during this 7 year period, from the beginning of 2014
to 2020, we should be moving in that direction. In an ideal
world, yes, we would like to see them end soon after that.”
•
“If you look at Pillar 1, when you look at how many agricultural
producers are actually producing, and living, below the official
poverty line, it just makes you realise just
how important Pillar
1 is, particularly in the tenanted sector, where they have to pay a
rent before they take any drawings.
Take Pillar 1 away and I
think you…snatch the rug from a huge proportion of the
tenanted sector” – TFA
•
The NFU argues that direct payments “provide a degree of
income stability to farmers which enables them to maintain
productive capacity despite volatile agricultural markets”

8. Issues to Consider &
Problems with Uncertainty

9. Issues to Consider & Problems
with Uncertainty
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Existing tenancies –
-
Farm business tenancies
Agricultural Holdings Act tenancies
•
New farm business tenancies
•
Surrendering land
•
Buying land
•
Selling land
•
Partnerships and restructuring

10. Issues to Consider & Problems
with Uncertainty
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Proceed with caution
•
Keep up to date
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Take advice
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Consider longer term implications
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Can it wait?
•
What if it cannot wait?
-
Take a view
Make sure documents are clear – what is your intention?
Dispute resolution clauses

11. “Nothing is agreed until
everything is agreed…”
(European Council)

12. “Nothing is agreed until
everything is agreed…”
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Budget dependent
•
Irish Presidency wants political agreement by end of June
2013…
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Nothing is certain until –
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It is within the European Regulation
It is implemented by DEFRA