The purpose of this briefing is to give a brief summary of the decisions that Welsh Government (WG) made on the 14th January 2014 with regards to the implementation of direct payments in Wales.

Most decisions will come into force from January 2015. From 2015 a five year transition will begin, introducing a new Basic Payment Scheme (BPS) in place of SPS with an additional payment for 'greening'.

Active Farmer

Payments will only be made to people who are 'active farmers'. The Welsh Government's decisions on exactly who is eligible to claim payments will be confirmed later in 2014.

Minimum Claim Size

The Welsh Government will be applying a 5 ha minimum claim limit.

Entitlements

Historical entitlements will be extinguished on 31 December 2014. In 2015 new entitlements will be allocated, one entitlement being awarded for each hectare of land. In order to be eligible for this first allocation of new entitlements a person must have received a SPS payment in 2013 or instead be able to provide evidence, such as receipts or accounts, to prove that they were farming in 2013.

National Reserve

A National Reserve will be established from 2015 as a source of entitlements for persons in particular circumstances. New entrants to farming and young farmers will have priority. The Welsh Government will decide in 2014 the details of eligibility criteria for applications.

Basic Payment Scheme (BPS)
A three land area based model will be used in Wales: Moorland; SDA; DA and lowland combined. Moorland will be restricted to areas at 400 metres or higher within the body of land mapped as having Moorland vegetation in 1992.

Payment rates

The Welsh Government will not know exactly until 2015 how many new entitlements are issued. As a result is not possible for them to make an exact decision on payment rates right now. Instead WG have set nominal payment rate values for the three land regions as indicators of the likely payment rates. Payments will be weighted in the ratio of 1:10:12 between Moorland: SDA; DA/lowland. This ratio might mean payment rates by 2019 in the region of:

  • Moorland around €20 a hectare;

  • SDA around €200 a hectare;

  • DA and Lowland (combined) around €240 a hectare

Transition to area based payments
There will be a 5 year transition period with claimants moving over to a wholly area based system in 2019 in 5 equal steps.

Capping
There is an EU mandatory capping level for all BPS claims over €150,000 of 5%. WG has decided to introduce a progressive level of additional capping in Wales between €150,000 and €300,000. There will be a 100% cap for payments over €300,000.The Welsh Government will not be deducting the cost of wage related costs prior to calculating the deduction. Funds recovered from capping will be redeployed to the Wales RDP budget.

Greening
30% of Pillar 1 payments will be payable for 'greening'. Wales will be implementing the EC's default greening proposals based on maintaining permanent grassland, crop diversification and ecological focus areas. Land farmed in accordance with the EC Regulation on Organic Farming is deemed to be automatically green. Further decisions will be made in Spring 2014 on the details of how greening will operate.

Pillar Transfers
The maximum of 15% will be transferred from Pillar 1 to Pillar 2. Pillar transfer will take effect for the 2014 single farm payment scheme.

Small Farmer Scheme

There will be no Small Farmer Scheme in Wales.

Young Farmers Scheme

Up to 2% of the national ceiling will be used to provide young farmers (under 40 years of age) with a top-up on their basic payment for up to five years. Further details about eligibility criteria will be published in spring 2014.

Areas of Natural Constraint (ANC)

Wales will not be operating a Pillar 1 ANC scheme.

Coupled schemes

There will be no coupled support scheme in Wales.

Next Steps

Rural Payments Wales will be contacting farmers in July 2014 with land regions based on current land declarations, any inquiries or subsequent appeals against the classification of land as Moorland will begin at that time. These regions will be applied to the new payment rates for the May 2015 application period.

Wales Rural Development Plan
WG will launch a consultation on the Wales RDP in February.

Further Information
The full detail on the decisions made by WG can be found on the Welsh Government CAP Reform Webpages.

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