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INCENTIVES: The 2015-2020 CAP programme prioratises schemes and programmes designed to impove access to land for progressive young farmers

INCENTIVES: The 2015-2020 CAP programme prioratises schemes and programmes designed to impove access to land for progressive young farmers

INCENTIVES: The 2015-2020 CAP programme prioratises schemes and programmes designed to impove access to land for progressive young farmers

MEASURES designed to keep young people on the land were one of the priorities during the negotiations for the new Common Agricultural Policy (CAP).

There are several strands in the 2015-2020 CAP - in both Pillar 1 (direct payments) and Pillar 2 (rural development) - which will assist young farmers and incentivise potential new entrants to the sector.

Most of the schemes are addressed at 'young trained farmers'. For the purposes of CAP, a young farmer is defined as someone aged no more than 40 when first submitting an application under the basic payment scheme (BPS).

Applicants must be less than 40 for the entirety of the year in which the initial application is made.

For example, there is no point applying in May for a young farmer scheme when you turn 40 the following July.

Applicants are deemed 'trained' if they have successfully completed an agriculture course at FETAC Level 6 or higher.

The EU defines a 'farmer' as someone who:

• Is participating in the BPS (formerly known as the single farm payment). This means they are submitting an application form in their own name in the basic payment scheme.

• Is setting up an agricultural holding for the first time or has set up an agricultural holding within five years preceding the first submission of the basic payment scheme application.

What this means it that if you otherwise meet the criteria of a young trained farmer and have established a farm in in your own right within the last five years you are still eligible for the scheme.

There are two main schemes available under Pillar 1 for those who satisfy the EU criteria for 'young', 'trained' and 'farmer'.

 

Young Farmer Scheme

The Young Farmer Scheme is the main scheme in Pillar 1. There has been 2pc of the national ceiling allocated to this scheme, so the amount of money available is of the order of €24m/pa.

The young farmer scheme allocates this additional payment, in addition to their BPS payment, to qualifying young farmers for a period of five years from when they first set up their holding.

If a young farmer established a holding in 2015, they will receive the extra payment from 2015 to 2019.

If a young farmer established a holding in 2013, they will only receive the extra payment in 2015, 2016 and 2017.

The extra payment will be available on the first 50 entitlements drawn down by that young farmer in a particular year.

If they draw down 60 entitlements, they will only receive extra payment on 50. If a young farmer owns 50 entitlements but in a particular year only draws down 40 of these entitlements, they will only receive the payment on the 40 entitlements.

The amount of money available per qualifying entitlement is not clear-cut, but defined as 25pc of the young farmers scheme national average payment per ha.

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This in turn is based on the national ceiling, so the amount per entitlement available will vary every year.

 

National Reserve

For those who have no entitlements built up over previous schemes, there is the option of obtaining entitlements from the National Reserve.

In 2015, the National Reserve is initially based on 3pc of the BPS (so is of the order to €24.7m in 2015), but in subsequent years the reserve will be based on unused entitlements in the system.

In effect, unused entitlements are recycled back to use through the National Reserve mechanism.

The changes in relation to the use of entitlements to a more strict 'use it or lose it' approach will probably result in more unused entitlements coming available than was the case in previous CAP programme.

National Reserve entitlements are prioritised towards two groups of entrants; new entrants who commence agricultural activity in a given year, and qualifying young farmers.

Qualifying young farmers are defined the same way as entrants to the Young Farmer Scheme.

What this means is that for qualifying young farmers with no entitlements, they can obtain an allocation of entitlements from the National Reserve and then obtain the higher payments on these entitlements under the young farmer scheme.

New entrants who are eligible for entitlements under the National Reserve but are not young farmers must:

• Have successfully completed a recognised agricultural Level 6 qualification as outlined above;

• Have commenced agricultural activity in 2013 or later;

• Have submitted an application under the BPS not later than two years after commencing activity;

• Not have any agricultural activity in their name in the five years preceding the new agricultural activity.

The value of the National Reserve entitlements is calculated on the average National Reserve allocation for the year in question. This will vary from year to year.

 

Pillar 2 payments to young farmers

Previous CAP programmes had the majority of payments to young farmers, such as Installation Aid, in the Pillar 2. Under the new CAP programme, Pillar 1 is the main 'vehicle' for payments to young farmers, but Pillar 2 payments are also available to them.

The full detail of the Rural Development Programme (RDP) are not all available as of yet, but the broad thrust of the programme has been made available mainly for consultation purposes.

Included in the list of programmes is the TAMS II (Targeted Agricultural Modernisation Scheme). TAMS II will provide funding for such developments as improving farm nutrient storage, animal housing, dairy equipment, purchase of low emission spreading equipment or upgrades relating to animal welfare and farm safety. Supports are also available for the pig and poultry sectors in energy, water meters and medicine dispensers.

Organic capital investment (organic farmers only) is also included under TAMS.

The Young Farmer Capital Investment Scheme is included in TAMS 11.

This provides funding for the areas listed above and also includes funding for dairy buildings. The main difference with this TAMS is that the rate of grant aid for young farmers is enhanced to 60pc, while the funding available for the other TAMS areas is held at 40pc.

 

Conclusion

There is no doubt that the new CAP programme has many schemes and programmes targeted at young farmers.

This will address the 'demand side' of the equation in that the schemes will encourage more young people towards a career in farming.

On the supply side however, there remains an issue.

Most young farmers would claim that their main problem in establishing a viable operation is accessing land at an affordable price for an appropriate tenure.

The Budget has dangled a few Chantenay carrots in the form of changes to the taxation system to encourage the hand-over of land and increase security of tenure.

However, it could be argued that the BPS scheme guarantees an income to existing landowners for the next five years once they adhere to a minimum level of farming activity.

And when payments for suckler cows, GLAS etc come on stream, there may well be less impetus for significant structural changes to occur at farm level.

Young farmers are not automatically productive, enthusiastic and efficient food producers; in the same way that elderly farmers are not all low output, scrub growing land blockers.

However, when there are more farmers aged 80 or more than there are under 35, there is a problem.

Unfortunately, until the supply side of the equation is addressed in some real way, this imbalance in the agricultural land structure will continue.

Dr Richard Hackett is an Agronomist based in north County Dublin and is a member of the ITCA and ACA.

Email: rhackett@independent.ie


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