Cap Reform Blog

September 25, 2014
by David Barnes
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Going for green

This week saw another important development on the new CAP, with the publication of a new set of details on the Pillar 1 greening rules.  For a few weeks now we’ve had a Frequently Asked Questions page on our website covering greening, and we have now been able to give it a significant update as some new decisions were announced.

These decisions included the details of the management rules which, as the Cabinet Secretary announced in June, will apply to Nitrogen-fixing crops, like peas and beans, if farmers want to use them as Environmental Focus Areas (EFA).  The thinking behind these rules is that because we have such a small budget for Pillar 1 of the CAP, Mr Lochhead decided last year to limit the transfer from Pillar 1 to Pillar 2 to 9.5%; but that in turn limits the budget we have available in Pillar 2, meaning we need to wring as much environmental benefit as we can out of the Pillar 1 payments.

We are also in the process of dealing with comments from the European Commission on the earlier decisions we notified by the deadline of 1 August – and eagerly awaiting their formal comments, which we hope to receive soon, on the new SRDP which we submitted in June. This is an important part of the process to get the new SRDP approved, which we need to do before we can open schemes for applications.

Clearly it’s vital that farmers, crofters and others are able to keep abreast of developments, and my colleagues in the Scottish Government’s Rural Payments and Inspections Division (RPID) are looking to make use of every possible channel of communication.

To that end, RPID recently launched a new Facebook page – ‘Rural Matters’.  You can sign up  for the latest RPID news – such as updates on deadlines for scheme applications and Ministerial events – as well as videos and interviews with farmers, crofters and RPID staff out and about on farms and visiting rural projects across Scotland.

The team are keen to hear from people involved in the rural industry with suggestions for content and ideas for rural stories that are happening in your area, and can be contacted via RPIDRovingReporter@scotland.gsi.gov.uk

July 18, 2014
by David Barnes
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CAP notifications

Now that the new SRDP has been formally submitted to Europe, our Pillar 2 team have a bit of a lull in the Brussels-facing element of their work.  The European Commission will study the draft programme and in due course will come back with comments and questions, which we will of course have to deal with before they’ll approve the programme.

But for the time being, the work on Pillar 2 is Scotland-focussed.  For example, the team are working on things like detailed eligibility criteria for schemes, and payment rate calculations – which under EU rules have to be independently checked by an outside body.

On Pillar 1, by contrast, both EU-facing and Scotland-facing aspects are busy at the moment.  As for Pillar 2, there’s Pillar 1 work taking place on the detailed rules for the direct payment schemes.  This has involved meetings with stakeholder representatives, for example on greening and on coupled support.  But in addition, there’s an EU element in that we have to notify our main decisions on Pillar 1 to the Commission by 1 August.

The Commission has issued twelve templates for these notifications, each covering a specific area, which the team are working on filling in.  Naturally one consequence of this is that we are prioritising work on the issues which are subject to the 1 August deadline over details which aren’t legally required until later.

Of course, all of the above is based on what the regulations require us to do.  Meanwhile in the real world we’re very aware that farmers and crofters need to know the rules as soon as possible so that they can plan next year’s operations.  The European timetable – including for example detailed rules not being adopted until very late – has been challenging in that respect.  But we know it’s important and will get as much detail as we can out as soon as we can.

June 17, 2014
by David Barnes
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CAP announcement

In a normal year, Royal Highland Show week is indisputably the busiest week in June for me and the team. But this year was different, with the big announcement on implementing the new CAP in Scotland being made on June 11th. You can access not only Mr Lochhead’s statement to Parliament, but also modelling results and factsheets that we published on the day.

The last few weeks of work have been among the most intense since the CAP reform process began. Since the end of our public consultations – the results of which we have also published – we’ve held a whole series of meetings with stakeholder organisations to help us hone the package and to enable the Cabinet Secretary to take the final decisions. Over the next few blogs I’ll try to explain various aspects of the final package – not just what was decided, but the thinking behind it.

Today I’ll kick off with one of the biggest issues, namely how to design the Direct Payments (Pillar 1) regime for rough grazing, bearing in mind the huge variety in both activity levels and land quality across the country. And not forgetting that while the challenge for Scotland was how not to reward inactivity, the direction of travel in European policy was to weaken the links with activity, because of past problems of overproduction in other parts of the EU. Those problems feel like distant memories now. Many of my younger colleagues don’t remember the butter mountain and the wine lake. A fair few weren’t even born then! But nonetheless that’s the EU policy framework we have to work within.

The big breakthrough on rough grazing was the confirmation from the European Commission and the UK government that we could use coupled support in excess of the eight percent already earmarked for the beef sector. This represented a step change in our ability to match payments to activity. But there were still important issues to resolve, on the design of payment regions.

We had been working with the Rural Payments Agency in England to understand what went so wrong in their implementation of area-based payments, and it was clear that regional boundaries were a big issue. In an area-based system, if there’s uncertainty about which of two regions a field falls into, it potentially requires recalculation of the payment on every other field in both regions!

So we knew that if we were to split the rough grazing up, it would have to be done using as far as possible boundaries which were well established and beyond doubt. Dividing the rough grazing region using LFA status and LFASS categories met those criteria. We had considered this approach earlier in the process, but without coupled support for sheep it wouldn’t have provided a good policy outcome. But by combining it with targeted coupling for sheep on the poorest land, we’ve produced a regime which we believe ticks all the boxes: matching payments as closely to activity as we can on the land where that’s important, but keeping the system as uncomplicated for farmers as possible where inactivity is not a serious issue.

There are still important details to sort out, with stakeholders. For example, how precisely to set up the coupled support for sheep, to achieve the desired targeting whilst making the checks manageable for producers. But the overall architecture of the new CAP is now in place, and that’s a major step forward towards 2015.

April 28, 2014
by David Barnes
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Step by step

We recently held a workshop session on the new CAP to try and look at the overall package.  For analytical purposes it’s easiest to look at the potential decisions one at a time, holding everything else constant so that the impact of that one decision can be assessed accurately.  But what farmers experience will be the cumulative impact of the whole package of new policy measures.  Also, there are inter-relationships between the measures that we need to consider. 

What I mean by that is, for example, that what decision we eventually take on Pillar 1 greening should take into account what might be changing in the GAEC element of cross-compliance.  Another example might be that where we end up on Basic Payment regions might have an influence on the decisions affecting big individual payments – the so-called degressivity options. 

The next stage will be the programme of meetings with stakeholder organisations that the Cabinet Secretary announced a little while ago.  Those individual meetings will be in addition to the meeting of the full CAP stakeholder group scheduled for next week.

April 9, 2014
by David Barnes
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CAP on the big screen

I spend a lot of time working on and thinking about the Common Agricultural Policy, but even I like to take a break at times.  So imagine my surprise during a family trip to the cinema last weekend when, amongst the trailers and adverts before the film, I saw a full colour European Commission-funded advert promoting …… the CAP !

I suppose the Commission are trying to do the same as we are in Scottish Government, namely raise awareness of the CAP and get more people interested in its future.  That being the case, it’s really pleasing that we had record numbers of responses to both of the CAP consultation exercises that have recently closed.

For the Pillar 1 direct payments system, the final number of responses was 464, which is more than double the previous record.  94 percent of respondents used the online questionnaire, with only a small minority taking the alternative option of a paper copy.

For Pillar 2 rural development, the total was even higher at 947 – of which 597 were identical.  That’s because one organisation asked all its members to write to us saying the same thing, and many of them did.

A write-in campaign like this is by no means a new phenomenon.  In the old days before e-mail, organisations would pre-print letters or postcards and distribute them to their members to sign and send in to the government.  These days it’s even easier as all anyone has to do is cut, paste and press send.

But it does mean that interpreting the results of consultation exercises has always been as much an art as a science.  It’s easy to say that on a particular proposal, a certain percentage of responses were in favour or against.  But a single response could represent a membership organisation with hundreds or thousands of members, or the individual point of view of one member of the public.  So we always take care to study not just the numbers but the detail of the responses, to give us the best possible picture of the range of views held.  That careful study is exactly what the Pillar 1 and Pillar 2 teams are working on now.

Since my last post, as you may have seen in the press, we’ve had some unwelcome news from the Commission on the future options for Voluntary Coupled Support under the new CAP.  Mr Lochhead has asked for an urgent meeting with Commissioner Ciolos: you can find more details here: http://news.scotland.gov.uk/News/CAP-decisions-challenged-b2a.aspx  .

March 27, 2014
by David Barnes
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Nailing down the options

Yesterday morning I was at the Scottish Parliament for the Cabinet Secretary’s session on CAP with the Rural Affairs Committee.  In about two and a half hours, the questions ranged over all the main policy and delivery aspects of Pillars 1 and 2.

The MSPs on the Committee were asking questions in light of the evidence they had already taken from various stakeholders in other sessions.  I was struck by how often the Members’ questions were along the lines: ‘one witness said the government should do one thing but another called for the opposite; what does the Cabinet Secretary think?’.  I suppose this reflected the fact that many of the witnesses were from representative organisations.  Their evidence will have been based not on the general interest, but on the specific interests of their members – that is their job, after all.

One point I would highlight is Mr Lochhead’s comment about the twin suggestions of splitting the rough grazing payment region into two, and of introducing a coupled support scheme for sheep.  Both of these could contribute to a policy outcome, but both come with a significant cost in terms of bureaucracy for farmers and for government.  What Mr Lochhead said was that he will consider both, but they are both targeting essentially the same policy question – and therefore, if he decided to take action, it seemed likely that this would mean adopting one or the other but not both.

This makes complete sense.  We often talk about the CAP giving us a toolbox of policy tools to choose from – well, you wouldn’t dream of paying for two hammers to knock in one nail.

March 24, 2014
by David Barnes
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A fine balance

We’re into the last week of the consultation exercise on Pillar 1 direct payments.  I’m really pleased with the response rate so far, but the more the merrier – especially after the Cabinet Secretary extended the deadline to make sure everyone with an interest has a good chance to respond.  The new deadline is this Friday.  As Mr Lochhead said in a letter that went out to all CAP recipients last week, please do use this this opportunity to give us your views.

Included with that letter was a pack of information about the new CAP, both Pillar 1 and Pillar 2.  We were aware that the farmers’ representatives with whom we’ve been discussing the new CAP for years are atypical in terms of how much they know about the new policy.  The vast majority of farmers, even those who have been following the story closely, will be much less familiar with the detail.  To give just one example, the fact that the old Single Farm Payment entitlements will be voided and replaced by a brand new set of entitlements is old hat to stakeholder representatives, but there’s no reason why grass roots farmers would know it unless they’re told.  So we tried to make the information pack useful for everybody, not just those who already have a certain level of knowledge.

The other big challenge in drafting it was how much detail to go into.  We knew that if we made it too long then people would find it impenetrable and it wouldn’t get read.  On the other hand, these are very complicated and extremely important issues, and if we simplified and shortened it too much then farmers wouldn’t be getting the whole story.  So we tried to strike a balance – covering all the bases and including all the essential information, but pointing people towards other documents for the additional detail rather than including it in this one.  We tested it out on a couple of real people too, before it was finalised.

I hope we got the balance about right, that you found it useful, and that if you haven’t already responded to the Pillar 1 consultation, you’ll do so this week.

March 10, 2014
by David Barnes
1 Comment

CAP journey continues

I was on my travels last week, to Glasgow and Inverness.  I’ve got a new Scottish Government laptop, and the rail journey home from Glasgow gave me the opportunity to test it out with on-train WiFi.   I’m hoping that I can stop carrying around great heaps of paper in future – although it remains to be seen whether I can discipline myself to ditch my faithful dog-eared CAP regulation texts, and rely solely on electronic versions!

I’d been in Glasgow to speak on CAP reform at the Rural Law Conference.  We spend a lot of time thinking about and talking to farmers, but there’s a whole other community of folk who need to know all about the CAP – the professionals who advise and work with farm businesses.

In Inverness the following day I was with the Minister for the Environment and Climate Change (and crofting), Paul Wheelhouse, for meetings with NFU Scotland’s Highlands and Islands Committee, and the Crofting Commission.  Naturally there was particular interest in the proposals for crofter and small farmer grants in the new SRDP.

But the biggest news of the week was the decision to extend the deadline for responses to the consultation exercise on Pillar 1 Direct Payments.  So those of you who haven’t responded now have until the 28th to do so.

 

February 24, 2014
by David Barnes
2 Comments

New Entrants: looking forward, not back

To make a bit of a change, every so often, I am going to invite a guest blog.  This time it is the turn of David Steel who farms in Perthshire and sits on the Scottish Government’s New Entrants panel.  The view expressed are his own and don’t represent mine or the Scottish Government. This comes ahead of the Scottish Government New Entrants Gathering to be held in Murrayfield, Edinburgh later this week, on the 26th February.

It has been a real eye opener representing new entrants during CAP reform negotiations and now as a member of the New Entrants Panel. It was a real step forward for Richard Lochhead to ensure we had proper representation within the stakeholder group, and by setting up the New Entrant Panel which discusses and advises on a whole range of matters that affect New Entrants. Nobody can know the requirements better for getting new blood into the industry than newcomers that have been through the mill themselves.

There is nothing like CAP reform discussions to get the various stakeholders retreating into their entrenched positions. As a new entrant, I have taken a view that fairness to all farmers is what CAP reform should deliver. We New Entrants don’t want special treatment, just fair treatment compared with our contemporary established farmers. An example of where this doesn’t look likely, is adopting a gradual change to the new CAP system. This doesn’t deliver fairness, as we new entrants have to stand at a ringside bidding on livestock or tendering for land against farmers who will have much higher single farm payments due to their historical element. So any new entrants reading this needs to complete the CAP consultation and make your views on CAP reform known.

The one thing we find within the New Entrants Panel is that we are all practical, pragmatic people who put the dogma of the various organisations we represent in a backseat, to arrive at common sense, pragmatic positions and solutions.

The single most important issue we presently have to deal with is making sure that the National Reserve for the new CAP picks up all those disadvantaged by the old scheme. This will include many businesses that had small scale activity during the last reference period and have expanded significantly since then. It will also need to pick up those who have started business since then and have bought low levels of entitlements and need to have this made up to the basic area payments levels at least. You can be assured that we know the problems and hopefully we will arrive with a National Reserve Scheme that is inclusive and doesn’t repeat the errors of the past and exclude New Entrants from the subsidy system.

David Steel

New Entrants Panel member

February 17, 2014
by David Barnes
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Consulting on the issues

There’s now only a couple of weeks left to get your responses to us on the SRDP consultation. If you want to influence the shape of the new programme, now’s the time to do it.

For the consultation on direct payments, the deadline is a little later – there’s about a month to go on that one.

I”m writing this in Brussels, as I listen to the new Greek Presidency going through the formalities at the start of the Council of Ministers meeting. At today’s meeting one of the most significant agenda items is a mere Any Other Business point. Virtually all the member states have signed up to an AOB item asking the European Commission to be more communicative about its draft for the detailed implementing rules for the new CAP – the so-called Delegated Acts.

But more important for Scotland than anything on the Council agenda is Cabinet Secretary Lochhead’s meeting later today with Commissioner Ciolos, about slipper farming and coupled support. Lack of clarity isn’t helpful for anyone, and I hope we come out of the meeting with a clearer understanding than when we went in.

It sounds like the Greek minister is getting to the end of the formalities – yes they really do go on that long (!) – so I’ll sign off ready for the start of the Council meeting proper.