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CAP Reform Must Work for Tenanted Sector

1 May 2012, at 7:10am

UK - The Tenant Farmers Association has published its formal response to the proposals tabled by the European Commission for reform of the Common Agricultural Policy (CAP) and has stressed the need to ensure that the impact on the tenanted sector of agriculture is fully appreciated.

A significant area of concern is the risk of land banking by landlords leading up to the introduction of the new CAP. The Commission has proposed that only those individuals who have made a valid claim on at least one ha of land in 2011 under the existing Single Payment Scheme will be eligible to make an application for new direct payment entitlements in 2014. However, the TFA is aware that there will be many landowners who will have made a claim in 2011 whilst also owning other land upon which tenants have been able to make claims in 2011 and other years. If landowners are able to bring those tenancies to an end before 2014 then they will be able to capitalise inappropriately on the new arrangements.

“To avoid this speculation the TFA has proposed that the allocation of new entitlements should be based on the number of entitlements held by individuals under the existing scheme in 2011. However, in order to deal with the period of time that will have elapsed between 2011 and 2014, parties should have the flexibility to affirm specific and unequivocal agreements, dated after the publication of the Commission’s proposals, stipulating clearly that the eligibility to claim entitlements in 2014 based on the 2011 application has been transferred in whole or in part between the parties for fair value,“ said Mr Dunn.

The TFA has commended the European Commission for its desire to ensure that only active farmers are eligible to claim future direct payments. The TFA has been concerned about individuals who are not actively managing land themselves but who access Pillar 1 and Pillar 2 schemes even where they are allowing other individuals to actively use the land upon which they are making their claims. The TFA has been a vocal advocate for the inclusion of a viable definition for active farmers in the next round of reform. However, the TFA does not believe that the European Commission has, as yet, produced a workable solution.

“Rather than attempting to exclude individuals for whom agriculture represents a small part of their economic activity as in the current proposals, the TFA believes that the Commission should instead be excluding those individuals who cannot demonstrate they are carrying out the agricultural activities on the land upon which they are basing their claims,“ said Mr Dunn.

The TFA has also said that it understands the European Commission's desire to limit the extent to which individuals are able to claim payments under the new direct payments scheme. However, it is opposed to the current complicated proposals tabled thus far.

“We think the proposals as tabled by the European Commission bite at too low a level and could lead to abuse. However, the TFA would not object to a ceiling on direct payments set at or around €300,000 per claimant,“ said Mr Dunn.