Active Farmer Status – Basic Payment Scheme
‘Active Farmer Status’ is a new criteria that we are all becoming more familiar with as updates are published and as we approach the 15th May deadline. This requirement will affect farmers who have claimed over 5,000 euros for SPS 2014 (£3,850 GB Sterling).
The rules for Active Farmer status have recently been confirmed and updated by DEFRA. Many will be aware from our previous posts and seminars, the EU have decided to create five “undeserving” categories to limit claimants. These five categories are as follows:-
· Water companies
· Real Estate Services
· Permanent Sport or Recreational facilities
Airports and railways are only likely to be caught if they are running scheduled services for the public. Water companies are only affected if they are one of the 27 designated companies. The last two are more likely categories which may find some farmers “undeserving”.
The definition of a ‘Permanent Sport or Recreational Ground’ was confirmed in the October update from DEFRA to include grounds that are dedicated and kept throughout the year for sporting or recreational use, or grounds that include one or more permanent structures used so people can take part in a sport or recreation (or spectators).
Real estate services refer to professional property developers, real estate agencies, natural or legal persons managing real estate on a fee or contract basis.
If you are found to be “operating” such an activity, you may be considered “undeserving” of Basic Payment. The definition of “operating” under the Active Farmer rule means to make decisions on how the non-agricultural activities of the business function, therefore a farmer may be considered the operator of an activity although it does not take place on his land. In practise an Active Farmer may work for a Company operating a non-agricultural activity such as a Real Estate Service, however, it will be the Company that is operating not the individual.
There remains opportunity for anyone carrying out one of the five non-agricultural activities to ensure they remain eligible to make a claim in 2015 and thereafter. The first of the readmission criteria is that annual payments for SPS or BPS (including the greening payment and any young farmer payment) are at least 5% of the total non-agricultural receipts in the most recent financial year. The second readmission test has recently been updated so that if total agricultural receipts are at least 40% of the total receipts in the most recent financial year (this is increased from 15% as previously stated) the claimant will be readmitted into the scheme. The third criteria, which will bring much relief to all farmers who have been at risk, states that if a claimant has at least 36 hectares of eligible land they will requalify for the Basic Payment Scheme.
The consequence of the latest changes seem to allow readmission of almost all of the previously “undeserving” applicants, to the extent that there seems little point having the ‘Active Farmer’ test at all. It is often difficult to fathom the basis of many EU regulations, the Basic Payment Scheme being no different.
Good Luck to all seeking to claim Basic Payment in this first year of the scheme. For any who need assistance, please do not hesitate to contact the Sheldon Bosley team or come along to our Workshop on January 21st.
Stratford upon Avon