Minister responds to ‘active farmer’ queries

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Agriculture Minister Michelle O’Neill has responded to queries frequently raised by farmers/landowners on the active farmer issue.

Minister O’Neill said: “I must stress that every application received in 2015 will be judged on its own merits after careful assessment, but I believe it would be helpful to state again some general principles which might give additional clarity.”

What is the active farmer requirement?

“To be allocated entitlements in 2015 under the new Basic Payment Scheme (BPS), a farmer must be able to demonstrate that he enjoys the decision making power, benefits and financial risks in relation to the agricultural activity on each parcel of land for which an allocation of entitlements is requested. This assessment is based on all agricultural activity carried out on the land parcel throughout 2015. All three elements – decision making power, benefits and financial risks – must be fulfilled by the applicant.”

How does this affect land let in conacre?

“In the normal course of events, the farmer (and not the landowner) carries out the agricultural activity on conacre land and enjoys the decision making power, benefits and financial risks in relation to this agricultural activity. Therefore, the farmer taking that land in conacre will be the one who can meet the eligibility conditions to establish entitlements and claim payments on this land in 2015.”

Will selling silage meet the eligibility conditions?

“The basic requirement is that the applicant must be able to demonstrate clearly that he enjoys the decision making power, benefits and financial risks in relation to the agricultural activity being carried out on the land over the course of the year. This will be much easier to demonstrate if the farmer who eventually purchases the silage has had no involvement in its production or storage, and the agricultural activities on the land throughout the year have been carried out by the landowner alone, or by an employee of the landowner or an independent contractor engaged by the landowner.”

“Example 1: The landowner himself purchases and applies all the inputs required to grow the grass crop. The landowner engages a contractor to harvest the grass as round bale silage when it is ready, which are then stored on the landowner’s property. After advertising the silage for sale, the landowner sells the round bales to a number of other farmers at the best available market price. No other farming activities have taken place on the land over the course of the year.

“In this scenario, the landowner would be able to make a strong case that he should be allocated BPS entitlements because he took all of the management decisions, obtained the benefits from the agricultural activity, carried the financial risks in relation to that activity and there was no other activity on that land over the course of the year.

“Example 2: The landowner agrees that a farmer who has taken the land in conacre in previous years should take the grass from the field this year. The farmer arranges for delivery of the inputs and applies the inputs required to grow the grass. The farmer subsequently harvests the grass and places it in his silo when ready. The landowner pays for the inputs and pays the farmer for harvesting costs. The farmer pays for the grass and the overall financial outcome is similar to conacre rent.

“This scenario would appear to have same practical and financial impact as conacre. The decision making powers, benefits and the financial risks of the agricultural activity appear to reside primarily with the farmer and not the landowner. Therefore, it would be very difficult for the landowner to demonstrate to the department that all three of these requirements have clearly been met by him is respect of this activity and, hence, very unlikely that the landowner would receive the entitlements.”

Is winter grazing of sheep acceptable?

“The answer to this depends on individual circumstances. For example, a dairy farmer who has the land at his disposal on 15 May, takes three cuts of silage from a field plus some aftermath grazing, and then allows another farmer to graze sheep on that field for a month or two over the winter, will be able to establish entitlements on that field. That is because the dairy farmer (who has the land at his disposal on 15 May) will be able to demonstrate that for the majority of the agricultural activity being carried out in 2015, he enjoys the decision making power, benefits and financial risks.

“However, where a landowner carries out very little or no agricultural activity on the land during 2015 and then lets the field to another farmer for winter grazing, it will be extremely difficult for the landowner to demonstrate that he meets the requirements to be allocated entitlements.”

Is letting land in conacre not regarded as farming?

“For the purpose of allocating entitlements, the nature of the land tenure arrangement is irrelevant. The key issue is the agricultural activity taking place on the land and what is happening in practice, and in particular, who enjoys the decision making powers, benefits and the financial risk of that agricultural activity.”

Would a landowner who places strict conditions on what a farmer can do on the conacre land not be regarded as making the decisions in relation to the agricultural activity being carried out?

“No matter how constrained the agricultural activity may be, the decision making power, as well as the risks and benefits relating to that permitted activity, still reside with the farmer. It would be very unusual for landlords to impose absolutely no restrictions on what a farmer may do with the land that they rent. As an extreme example, Government itself places restrictions on farming practices (such as restricting slurry spreading activities), but this does not mean that the Government is the farmer.”

Is it sufficient for a landowner to do no more than keep land in Good Agricultural and Environmental Condition (GAEC) in order be to able to establish entitlements?

“Yes, but there is still a requirement to carry out some activity on the land, such as mowing the vegetation, in order to maintain the land in a state suitable for grazing or cultivation. Keeping land in GAEC is counted as an agricultural activity. Land on which no agricultural activity is being carried out is not eligible for support. But if the landowner allows another farmer to carry out agricultural activity on this land (e.g. grazing sheep), then that becomes the primary agricultural activity and means that the landowner will not be able to meet the requirements of the scheme.”

Will purchasing fertiliser, cutting hedges and cleaning sheughs be sufficient to demonstrate that I am an active farmer?

“If someone else is using the land for grazing, silage or cropping activities and your activities are confined to purchasing fertiliser, cutting hedges and cleaning sheughs, then it is extremely unlikely that you will be able to demonstrate clearly that you have decision making powers, benefits and the financial risks of the agricultural activity on land.”

How will the department control this?

DARD will have sufficient information to identify claims where there is doubt as to whether the applicant is actually farming the land on the application form. The Department will also act in response to any information that may be supplied to it by members of the public. In all such cases, further evidence will be requested and the onus is on the applicant to prove that he/she clearly meets the eligibility requirements. If satisfactory evidence is not provided, no entitlements will be allocated.”

Further information on CAP reform is available on www.dardni.gov.uk