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Single Payment Scheme also known as Single Farm Payment (SFP)

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Flatter Rate: The Northern Ireland Experience Future CAP for Scotland 16 March 2011 Seamus McErlean DARD. Single Payment Scheme also known as Single Farm Payment (SFP). Introduced in 2005. Options: - Historical -or- Hybrid -or- Flat rate - If Hybrid then Static -or- Dynamic

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Flatter Rate:The Northern Ireland Experience Future CAP for Scotland16 March 2011Seamus McErleanDARD

single payment scheme also known as single farm payment sfp
Single Payment Schemealso known as Single Farm Payment (SFP)

Introduced in 2005.


- Historical -or- Hybrid -or- Flat rate

- If Hybrid then Static -or- Dynamic

In Northern Ireland we choose a Static Hybrid Model

sfp why static hybrid
SFP – Why Static Hybrid?

Preference for equitable system → historical system?

Other Considerations:

Agriculture in NI dominated by livestock sectors (beef, sheep and dairy).

Coupled support concentrated at end of the beef supply chain.

Beef production systems are typically not birth to slaughter.

Previous coupled support capitalised into cattle prices.

This meant that some support was being indirectly transmitted down the chain to cow herd owners through calf prices.

Decoupling would end this transmission process.

sfp why static hybrid1
SFP – Why Static Hybrid?

Objective – to replicate the previous distribution, direct and indirect, of coupled support.

Key Driver – perceived fairness across as broad a spectrum of stakeholders as possible. This was an equity debate, not an economic debate.

Key drawback – it was recognised that what was seen as fair in the short term would be seen as increasingly unfair in the longer term. But a commitment at that stage to move to flat rates (via a dynamic hybrid) was a step to far - back in 2004.

sfp why static hybrid2
SFP – Why Static Hybrid?

Approach used – 50% of the monies allocated to Beef Special Premium and Slaughter Premium with smaller contributions from other premia was used to create a flat rate payment available to all claimants.

Everyone who was awarded entitlements would get the flat rate amount per entitlement plus additional amount based on their historical claims (if any) less contributions removed (to create flat rate).

Final position a static-hybrid - retained large historical element but also attempted to deal with indirect recipients of coupled payments (using flat rate option) - this perceived to be more equitable than simple historical option.

what were the consequences of static hybrid model
What were the consequences of static hybrid model?

Flat rate element and the allocation of entitlements according to area declared in a future year (2005) allowed those who had not claimed coupled payments to apply for entitlements under new decoupled SFP.

Some redistribution (away from previous coupled payment claimants to new claimants)– overall this was low (4% of budget) and there was little opposition (it suited both landlords and tenants).

95% of agricultural area was claimed on.

conacre system of land rental
‘Conacre’ System of land rental

Conacre is a system of short term leasing – typically 9-11 months of the year with no rights conferred beyond this period – offers a lot of flexibility.

One third of all land farmed in NI is rented through the conacre system.

problems encountered with the static hybrid model in ni
Problems encountered with the static-hybrid model in NI

Admission of land-owners as claimants.

Double claiming of land.

New Mapping system was introduced in 2005 but problems with it have resulted in a constant need to revise and recalculate entitlements.

cap reform post 2013 future instruments
CAP Reform Post 2013 – future instruments

Pillar I – direct payments

Possible/likely move towards regional or sub-regional flat rates

Better definition and targeting of support to active farmers


average sfp payments in sda da ll 2009 post modulation
Average SFP payments in SDA/DA/LL(2009 post modulation)

Severely Disadvantaged Areas €253/ha

Disadvantaged Areas €367/ha

Lowland €376/ha

Overall average €317/ha

conclusions looking ahead
Conclusions – Looking ahead
  • A move to a regional flat rate (landowners continue to claim):
    • Redistribution away from lowland to Severely Disadvantaged Areas [possibly counter this with a sub-regional flat rate]
    • Landowners gain – C&S Lowland and Dairy lose
  • Removal of landowners using robust definition on ‘active’ farmers
    • Need to rebase entitlements or we will have a lot of unclaimed entitlements.
    • Some landowners start farming and stop renting land to real ‘active’ farmers
    • If we rebase with landowners excluded then conacre rents could increase dramatically – possible mayhem?
    • Still significant redistribution issues in any case.
  • Current distribution at a regional/sub-regional level reflects agricultural activity to some extent – so certain reluctance to moving away from this position.