CAP Focus On Young Farmers Needed

11 April 2012
Alyn Smith MEP, Scottish full member of the European Parliament's Agriculture and Rural Development Committee, has called for the final shape of the Common Agricultural Policy (CAP) to prioritise the allocation of special support to younger farmers in Scotland.
Generational change is proving one of the major challenges facing European farming, with the percentage of European farmers under the age of 35 decreasing from 8.5% in 2003 to 6.1% in 2007 - there are roughly 5 farmers aged 65 and over for every farmer under 35.  The UK has one of the oldest farming cohorts in the EU, with just 2.6% of farmers under 35 in 2007.  

The Scottish Government, under the young farmers option in Pillar II, already provides interest rate relief in respect of a commercial business development loan, worth up to 40,000 EUR for farmers setting up a business and under the age of 40, as well as establishment grants up to 30,000 EUR.  In addition, young farmers are provided with business and development advice and support services, and the Tenant Farming Forum assists on a wide variety of issues such as tenancy legislation.  

The European Commission has now proposed a new five year top up payment, additional to the Single Farm Payment, for farmers under the age of 40 in Pillar I of the CAP.  The payment will be valued at around a quarter of the value of the entitlements the young farmer already receives, but taking into account no more payment entitlements than the average size of a holding in the Member States (54 hectares in the UK).  So a young farmer holding 10 hectares of entitlements at 200 EUR per hectare would be entitled to 500 EUR.  Each Member State can spend up to 2% of their Pillar I funds on this scheme.

Alyn said:

"Encouraging younger people, with their skills, enthusiasm and innovative mentality, into farming is vital for the future of our food production and the vitality of the rural economy.  Aside from the simple fact that we will need new people to eventually take over the existing farm acreage, younger farmers are also more likely to take risks and diversify into new fields of enterprise, such as renewable energy and tourism, all of which broadens the revenue base of the farm and makes it more financially secure and protected against the volatility of markets.

"I applaud the Scottish Government for their proactive approach in this field, particularly in making use of the Rural Development support available to help new entrants get a financial boost to their start in farming, and as shadow rapporteur for our group on rural development, will be pushing to ensure that we can continue and expand this support.

"However, the real disadvantage for young farmers lies in the inequitable and unfair system of distribution of direct payments.  It is simply unjust that payments should be based on a historical reference from a decade ago, long before most young farmers started, making for an unlevel financial playing field.  It is also unfair that, in lieu of an adequate active farmer definition, these payments can then be traded to land investors, keeping them out of the hands of new entrants and further widening that financial gulf.  I am concerned that the Commission proposals, as they stand, may not rectify this imbalance - they are based on an assumption that all those to receive entitlements in 2014 are already receiving it in 2011, which is certainly not the case.  A level playing field for new entrants from day one, with a real-time distribution of entitlements to those actually farming the land, with no historic reference, is a non-negotiable demand, and I will be fighting hard for this.

"The Commission's proposal for a young farmer top up in Pillar I is a nifty wheeze, and worth examining, but may not be of use to many young farmers as it is dependent on those farmers already receiving entitlement, which may not be the case.  We shall also have to see whether it provides adequate financial support in return for the administrative costs it will bring.  A voluntary approach for Member States and regions may be the best bet, allowing Scotland to implement the scheme in the way best suited for us.

"We have it all to play for now, so I'll be pushing hard to make the eventual CAP suit Scotland and our specificities as well as it possibly can."