Arable CAP example: Grange Farm, Norfolk

All the land is farmed in-house on owned land or formal tenancy agreements.

Cropping consists of winter wheat, sugar beet, spring barley and winter oilseed rape.

The farm holds an Entry Level Stewardship (ELS) scheme agreement which is due to expire in 2016.Grange Farm’s Single Payment is forecast to be £559,725 in 2011, equivalent to £224 per hectare (£90/acre).

The Basic Payment

The Basic Payment in 2014 will be £490,238, after considering the anticipated adjustments to the EU and UK CAP budgets.

Just over a third of the payment will be dependent on meeting the ‘greening’ elements of the scheme.

Capping

This Basic Payment will then be subject to deductions through the capping mechanism.

• The 30 per cent greening element, worth £175,100, is exempt.
• Allowances are also made for paid labour (salaries), in this case £120,000 for a manager (£55,000) and two employees (totalling £65,000).
• The amount liable for capping is therefore £195,138 (£490,238 basic payment minus £175,100 greening minus £120,000 salaries).
• Under the Commission proposals (see capping box), this means a capping deduction of £18,555.
• This takes the overall 2014 Pillar One payment to £471,683, that is £88,043, or 16 per cent, down on its 2011 Single Payment, representing £189/ha (£76/acre).

Greening

Grange farm will be unaffected by two of the three greening requirements.

With 1,000ha (2,470 acres) of winter wheat and 500ha (1,235 acres) each of sugar beet, oilseed rape and spring barley, it is likely to meet the three-crop requirement.

It also has no permanent pasture. The requirement for an ecological focus area is a different matter.

Norfolk Farm has hedgerow boundaries uncropped areas and field corners equivalent to 2.5 per cent of the cropped area.

Woodland, spinneys and ELS scheme buffer strips will be ineligible.

Grange Farm will therefore have to create an additional 4.5 per cent or 112ha (276 acres) of ecological focus areas in the form of fallowing land, as blocks or field margins, reducing cropping.

These fallowed areas must be in addition to options included within the ELS agreement, raising questions about future participation in the scheme.

Bureaucracy

Grange Farm will face increased bureaucracy.

Accurate calculations will have to be completed annually relating to paid labour, ecological focus areas and ‘active farmer’ eligibility criteria.

Mapping and area measurements will be required to justify the non-cropped areas of the ecological focus areas.

There may be some relief, however, as a result of the streamlining of the cross-compliance rules - the SMR rules will be reduced to 13 key areas and the GAEC rules will reduce to eight.

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