4 Unlocking the Basic Payment – Qualifying Rules

(a)Eligible Land

15.22 A payment entitlement can only be activated, and income support aid given, where the entitlement is matched with ‘eligible hectares’ in the member state where they have been allocated.⁵⁸ Eligible hectares mean any agricultural area of the holding that is used for an agricultural activity, or where the area is also used for a non-agricultural activity, where its predominant use is agricultural.⁵⁹ The EU Regulation further defines an ‘agricultural area’ to mean any area of land ‘taken up by arable land, permanent grassland and permanent pasture, or permanent crops’.⁶⁰ The definition is very wide, and includes not only land used for producing crops or rearing livestock, but also land used for multiannual crops, nursery crops, short rotation coppice, and also land that is maintained in good agricultural condition where it is not being actively farmed at the time.

15.23 The minimum size of holding for which direct payments can be granted to a farmer is one with an eligible area of 5 hectares.⁶¹ The parcels of land declared by the farmer for the purpose of unlocking the single payment in each year must be ‘at the farmers disposal’ on 15 May or, if that is not a working day, then on the next working day.⁶² It should be noted that this is a less onerous test than that under the former Single Payment Scheme, which required the land to be at the farmers disposal for a 10-month period.⁶³

15.24 Land will be treated as ‘at the disposal’ of a claimant is s/he is: an owner occupier who either farms the land him/herself or is paying someone else to farm it under contract; a tenant with a farm business tenancy under the Agricultural Tenancies Act 1995 or a tenancy of an agricultural holding under the Agricultural Holdings Act 1986; and a Licensor where the licensee only has permission to graze or mow the land.⁶⁴ It follows that a landlord of land subject to a full farm tenancy under either the 1995 or 1986 Act, a contract famer, and a licensee with only a mowing and/or grazing agreement will not be able to claim the basic scheme payment.

(b)Land Must be Predominantly Used for Agriculture

15.25 Land may, under the EU Regulation, be considered to be used predominantly for agricultural activities (and eligible for the Basic Payment) ‘provided that those agricultural activities can be exercised without being significantly hampered by the intensity, nature, duration and timing of the non-agricultural activities’.⁶⁵ The member states are given some discretion as to how non-agricultural activities that qualify for disregard are to be defined.

15.26 In Wales, specified non-agricultural activities can be carried out on a holding for a maximum of 28 days in a calendar year.⁶⁶ These include clay pigeon shooting, car boot sales, country shows/fairs, equestrian activities, scout and/or guide camps, temporary caravan and camping sites, TV and film locations, and motocross and motor sports events. Certain land uses will always be regarded as non-agricultural and will result in land not being eligible for the Basic Payment – these include gallops, airports, solar parks, and golf course and permanent sports facilities.⁶⁷

15.27 In England a slightly different approach has been taken. Non-agricultural activities are divided into three groups. Some are allowed without time limit or restriction eg school visits, bird watching, game shooting and fishing, deer stalking and drag hunting, and nature visits by schools or other educational institutions. Some are allowed within an overall 28-day limit in each calendar year, such as clay pigeon shooting, car boot sales, country fairs, car parking and motor sports. And a third category are treated as non-agricultural in all circumstances and will preclude a claim for the Basic Payment eg use of land for horse training (‘gallops’) or as a golf course.⁶⁸

(c)The Active Farmer Test

15.28 It will be recalled that, in order to claim basic payments a claimant must be an ‘active farmer’.⁶⁹ The claimant must produce, rear or grow agricultural products – including harvesting, milking, breeding animals or keeping animals for agricultural purposes.

15.29 The member states were given a discretion to add to this negative list of exclusions. In England, this has not been done, but detailed guidance has been given as to the extent of each of the exclusions. The exclusion applies to those ‘operating’ an excluded business – this means someone who is entitled to take decisions about the business’ non-agricultural activities, even if they take place on land that is not owned or leased by the business. Thus a farmer who allows someone else to carry out activities on his/her land under a formal agreement is not the ‘operator’ of that business. Detailed guidance is given on the content and extent of each of the excluded categories of business. So, for example: operating an airport does not include unlicensed landing strips or aerodromes; providing railway services does not include miniature railways; providing real estate services includes professional property developers and real estate agents, but does not include letting out accommodation on a farm or renting land to third parties; and providing ‘permanent sports or recreational grounds’ does not include buildings used to store recreational equipment (for example bicycles), fields or moorland over which game shooting takes place, linear trails for walking, mountain biking, horse riding or motorsports.⁷³ On the other hand, some recreational uses will exclude claims for the basic payment, if they involve land use throughout the year and the provision of fixed and permanent structures eg campsites and caravan parks, village greens used for village fetes, cricket football or rugby pitches, golf courses, nature reserves or shooting ranges.

15.30 If a business operates an excluded activity, it will only be able to claim the basic payment if it can meet the ‘readmission criteria’. The broad criteria in the EU Regulation are intended to permit claims by persons whose agricultural activities are not insignificant.⁷⁴ These have been applied in England by providing that readmission will be allowed, and a claim can be made, if one of three criteria applies:⁷⁵

(i)If the active famer has 36 hectares of more of eligible land,

(ii)Their total agricultural receipts were at least 40% of their total receipts in the most recent financial year, or

(iii)In their most recent financial year the value of their Single Payment Scheme receipts (before any penalties or cross compliance reductions) was at least 5% of their total non-agricultural receipts. The year in question must be not more than 3 years before the application is made (the same rule applies to criteria (ii) above).

(d)The Greening Component

(i)Crop Diversification

15.31

It will be recalled that a farmer will have to cultivate at least two crops when his arable land exceeds 10 hectares and 3 crops when it exceeds 30 hectares (the ‘2 crop’ and ‘3 crops’ rules). The main crop so grown may cover no more than 75% of the holding’s arable land area, with (if three crops are required) the two main crops covering not more than 95% of the arable area on each farm.⁷⁶ Guidance on the application of this rule in England provides a detailed list of crops that can be used to meet the requirements. It also provides that spring and winter sown crops will count as separate crops for the crop diversification rules. The rural payments agency will, for example, count spring and winter sown brassica crops (such as rapeseed) as different crops – guidance indicates that a farmer can count a maximum of one spring brassica and one winter brassica when following the crop diversification rules.⁷⁷

(ii)Ecological Focus Areas (‘EFAs’)

15.32 A farmer with more than 15 hectares of arable land must have Ecological Focus Areas (‘EFAs’) on their land, and these must total at least 5% of the arable land of the holding (whether or not they are claiming the basic payment on that land).

•Land lying fallow,

•Buffer strips,

•Areas with catch crops or green cover,

•Areas with nitrogen-fixing crops), and

•Landscape features are in most circumstances also considered to be ecological focus areas.

15.33 Detailed guidance is given on each of the EFA components.⁸⁰ Land lying fallow must be kept fallow from 1 January to 30 June 2015.⁸¹ The composition of catch crops and cover crops (that is, crops sown to protect the soil between harvest and sowing and use nutrients) is specified in some detail – this can include cereals (rye, barley and oats), and also some non-cereal crops (vetch, lucerne, mustard and phacelia). There is detailed guidance on the position and width of buffer strips. Hedges can only be used as EFA if they are growing next to arable land and a continuous length of at least 20 metres (or if less than 20 metres it must meet another hedge at an intersection or junction). The hedge can be of any width or height, and can have gaps as long as these are no longer than 20 metres in width. The nitrogen fixing crops that can count as EFA are specified in the English Regulations as the following: beans, chickpeas, cowpeas, fenugreek, green beans, lentils, lupins, peas and soya.⁸²

15.34 The choice of land that can be used as EFA in Wales has been different.⁸³ It can include land lying fallow, landscape features (hedges and traditional stone walls adjacent to arable fields), areas of short rotation coppice, afforested areas and areas with nitrogen fixing crops. Detailed guidance is provided on all of these options.⁸⁴