The Single Payment Scheme

1
The Single Payment Scheme

• Robin Hobson
• Laurence Gould Partnership Limited

2
How Single Payments Will Change From 2005

• Historic subsidy claims (2000-2002) - Historic
  Element
• Area registered in 2005 Regional Element
• 90 historic, 10 regional in 2005
• 100 regional, 0 historic in 2012

3
How Single Payments Will Change From 2005

• National Reserve
• Consultation will there be a National Reserve
  for New Entrants in 2007?
• Modulation
• Financial Discipline
• Exchange rate
• Policy Changes next review 2008/09

4
Payments 2004 -2012
5
Total Payments

• 400 Ha Arable Farmer
• 2004 94,715
• 2012 59,195 reduced by 38
• 140 Ha Intensive Beef Farmer
• 2004 54,080
• 2012 21,045 reduced by 61
• No historic Claims on 100 Ha
• 2004 0 2012 15,175

6
Requirements for Claiming Single Payment Scheme

• 10-month occupation of land
• Cross Compliance
• SMRs Ear tagging, safe disposal of chemicals
• GAEC
• Good Agricultural and Environmental Condition
• Hedges
• Footpaths
• Trees Wildlife

7
Single Payment Scheme Likely Impacts

• Arable
• Marginal land left fallow
• Reduced break crops on some farms
• Some will seek to continue farming in name only
  land available to third parties
• More land to grass i.e. arable reversion

8
Single Payment Scheme Likely Impacts

• Beef
• SPS will have possibly the biggest impact on this
  sector
• Without direct subsidy, most producers making
  nothing
• Some will continue to manage the land (esp where
  ESA/CSS etc)

9
Single Payment Scheme Likely Impacts

• Sheep
• Potentially the least impact by SPS
• If more grass/less beef, more sheep? Or more
  hay?!
• Ideal for managing ESA/CSS e.t.c.
• Many extensive producers will receive higher
  subsidy under SPS

10
Single Payment Scheme Likely Impacts

• Dairy
• Dairy Premium increases Single Payment
• Cuts in intervention prices for butter and SMP
  Lower Price?
• Many have to set-aside land for first time

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Possible Responses

• Maximise environmental payments
• Organic Conversion
• Change in farming structure
• Ceasing an enterprise
• Diversification/non-food income
• Niche Markets/Added Value
• Fixed Cost reductions

12
Possible Responses

• Establishing a New Enterprise
• Expansion
• Down Sizing
• Improved Performance
• Reducing input costs
• Change in Enterprise balance
• Staying the same!

13
Opportunities for Fresh Start Members

• Payment decoupled from production i.e. farmers
  will receive the payment regardless of production
  provided they meet Cross Compliance

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Opportunities for Fresh Start Members

• Arable Farmer
• Takes marginal land out of production
• Opportunity for you to farm land?
• Farms in name only
• Contract farming/ share farming opportunities
• Puts land to grass
• Agri-environmental schemes
• Arable reversion needs management (grazing)

15
Opportunities for Fresh Start Members

• Beef Farmer
• Share farming to reduce risk
• Contract farming/ contract labour
• Grazing licence to meet GAEC
• Agri-environmental schemes
• Low input pasture/ conservation grazing

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Opportunities for Fresh Start Members

• Sheep Farmer
• Contract services dipping, shearing etc.
• Contract labour
• Older/ retiring farmers provide land

17
Opportunities for Fresh Start Members

• Dairy Farmer
• Dairy partnerships provide labour and machines
• Contract farming provide
• Contract heifer rearing
• Over winter grass keep

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Opportunities for Fresh Start Members

• No Historic Claims
• Pony paddocks need maintaining
• Lifestyle farmers need to meet Cross
  Compliance
• Grazing licences
• Cropping licences
• Topping/ Hay making/ Silage making

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Summary

• Single Payment Scheme will provide opportunities
• Environmental stewardship/ organics
  conservation grazing
• Down size or cessation of farming land
  available
• Maximise value of produce - branding