Cross-compliance eased
As part of the process of ‘simplifying’ the cross-compliance
rules, the Commission has amended the Regulations so
that improvements in performance can be taken into account
when considering penalties with repeat offenders. It
has also said that assurance and certification schemes
can replace Member State controls in certain circumstances.
The Council of Ministers is set to approve further relaxation
of the rules, which are outside Commission competence,
at the January or February Council meetings with regard
to:
sending warning letters rather than fines for
small infringements
a de minimis rule to exempt from reductions
any penalty falling below €50
a single control rate, of 1% minimum, for spot
checks
in cases where checks have revealed a significant
degree of non-compliance, Member States should focus
only on the areas of risk and not on all standards,
as is currently the case
notice of checks up to 14 days in advance to be
given, except for controls on feed and food law,
animal health and animal welfare, and identification
and registration of animals, which will remain unannounced.
checks need only be made on half of the land parcels,
rather than the whole farm
farmers must receive the control report, at the
latest, three months after the checks.
Administrative costs for farmers The need for cross-compliance simplification has
been highlighted by an external report prepared for
the Commission which shows that administrative costs
for farmers, excluding public sector costs and administration,
take up between 3% and 9% of total CAP payments in five
EU countries sampled. Sadly, the UK was not sampled
since the costs arising from RPA incompetence would
have made interesting reading across Europe.
SPS administrative costs to farmers 2006
% Cost/SPS payment
€/ ha
€/farm
Denmark
3.4
12
507
France
6.7
13
954
Germany
9.3
28
1,298
Ireland
3.0
9
294
Italy
8.5
14
107
Source: European Commission
Most of the costs involve time spent on the SPS claims
and transfers, rather than on cross-compliance which
affects only relatively few farmers. But the costs to
those farmers affected are high. Clearly the larger
the farm, the lower the cost per hectare but Italy,
which had the smallest average farm size at 8 ha, also
had the lowest cost per farmer because of the relative
simplicity of their administrative and farming systems.
SPS external costs and time (hours) 2006
Consultant costs €/hr
Time /farm*
Denmark
100.0
392.8
France
96.4
1,699.1
Germany
94.0
1,673.7
Ireland
86.0
338.0
Italy
77.0
238.0
Source: European Commission *includes farmers’ own
time
The costs are skewed by the cost of consultants, where used.
In France and Italy, external paid advisors are not used and
so the cost of public agencies assisting farmers has not been
included and has lowered costs in those two countries. Farmers’
costs were factored in at between €27/hr to €54/hr.
Costs/time were high in France due to the delayed implementation
of the SPS and in Italy where the olive oil support was incorporated
into the SPS in 2006. These are expected to fall by 30 – 40%
next year.
English subsidy payments arrive
By the end of the year the RPA announced that £497 million
of subsidy payments (out of around £1.52 billion) had
been made to nearly 50,000 customers (out of about 100,000).
Clearly, many of the payments have been to the smaller
farmers. Limited experience suggests that more of the
payments are correct than in the past, although there
were errors in the first mailing where some statements
showed the 2006 regional payment rather than the 2007
rate. The payment this year includes the sugar beet
payment.
English regional rate of payment (gross of modulation)
2006
2007
€/ha
£/ha
€/ha
£/ha
Non SDA
45.92
31.11
95.13
66.28
SDA (excl. Moorland)
38.02
25.76
76.98
53.63
Moorland
6.48
4.39
13.40
9.33
Energy supplement*
45.00
30.50
31.65
22.05
Protein supplement
55.57
37.66
55.57
38.72
€/t
£/t
€/t
£/t
Sugar beet
9.71
6.58
9.50331
6.62
Source: RPA *gross of scale-back
While the regional payment increases from 15% to 30%,
in broad terms the inclusion of a number of small adjustments
such as the new decoupled payments for sugar beet (paid
completely and separately to growers in 2006) and the
phasing out of a National Reserve reduction means a
slightly greater increase than the percentage phasing
would suggest. The historic element falls from 85% of
the reference amount in 2006 to 70% in 2007. While this
would be expected to reduce the 2006 historic element
by 70/85 (i.e. to produce a historical reference factor
of 0.8233529) the gradual reduction in the National
Reserve and other adjustments results in a slightly
different adjustment. Factors to derive historic payment element
2006
2007
Basic change in historic element
90% to 85%
85% to 70%
Non SDA
0.9362357
0.8224050932
SDA (excl. Moorland)
0.9362357
0.8217647726
Moorland
0.9362357
0.8188342677
Reminders
2006
2007
Exchange rate £/€
£0.67770
£0.69680
English modulation
6%
12%
Welsh modulation
0.5%
0%
Scottish modulation
4.5%
5%
N Ireland modulation
4.5%
4.5%
Compulsory modulation
4%
5%
Financial Discipline
0%
0%
The scale-back on the modulation rebate has not been
determined but where the claim is €5,000 (about £3,500)
or over it is likely to be around £165 compared with
£128.55 in 2006.
A typical combinable cropping grower will receive a payment
of about £190–195/ha for the 2007 claim year (before energy
or protein payments). We urge everyone to check 2007 payments
carefully and, as importantly, 2005 and 2006 payments if not
already done. There are errors of over 20% that have still
not been rectified.
Fruit and vegetables
Land under orchards and nursery crops will be eligible under
the SPS from the 2009 scheme year. A consultation exercise
will take place early in the New Year on the criteria under
which any new Entitlements will be allocated in respect of
this land in 2009 or 2010.
To request a free sample or for more information on InsideTrack,
telephone 01954 252859 or e-mail
Contact details
InsideTrack, 11 Margett Street, Cottenham,
Cambridge, CB24 8QY, United Kingdom
