Farming Accountants


CAP direct payment changes delayed until 2015

iStock_000016030848XSmallFew will need reminding that the date for announcements regarding the detail of the reform of the Common Agricultural Policy (CAP) was set for the end of 2013, with implementation at 1 January 2014.

The aims of the CAP are to:

• preserve rural heritage;

• ensure a reasonable standard of living for farmers; and

• give assurance of quality food at a fair price for consumers.

In these respects the CAP plays an important role in the overall achievement and development of global food security. In place for over half a century, announcements were made not so very long ago that the whole CAP procedure would be reviewed, both in administrative and in payment terms towards the end of 2013 and the conclusions reached as a result of that review would be implemented pretty much immediately afterwards, on 1st January 2014.

Farmers were understandably disgruntled with these timescales, fearing that there would be insufficient time between the identification of the reforms and their implementation to ensure clear understanding and efficient implementation. With these people particularly mindful of the chaos caused when the Rural Payments Agency changed their payment system back in 2005, the fear was that history would repeat itself with the CAP.

Recent developments, following pressure from the National Farmers’ Union (NFU), have resulted in the European Commission agreeing to delay the implementation date for the new direct payments regime until January 2015. Part of the reason for this shift is the length of time being taken over discussions surrounding the reform. With reforms not likely to be announced until close to the end of 2013, the farming community considered the schedule too tight to insist on implementation on 1st January 2014. So, the NFU put pressure on the European Commission, insisting that there needs to be time after final decisions before enforcing the resulting changes on the people at the coalface.

The result is that the European Commission has pushed back the date for implementation of changes to the direct payment system to 1st January 2015.

That said, whilst this delay has been welcomed for the implementation of changes to the direct payments system, the threat to implement new rural development programmes within the original timescale still hang in the balance for farmers.

Gwilym Jones, who is a member of Dacian Ciolos’ (the Agricultural Commissioner) cabinet, spoke at a conference in London recently and announced that in his view, the agreement and implementation of new rural development programmes by 1st January 2014 was perfectly feasible. This met with dissatisfaction at NFU level and resulted in communication with Commissioner Ciolos, seeking reassurance that there will be no policy gap for rural development claimants while awaiting the next rural development programme. The final outcome of this latest communication remains to be seen, but it is fair to say that the implementation of the CAP reforms will be upon us before we realise it, so the time to be preparing for the possible impact is right here, and right now.

If you’d like to discuss the impact of the CAP reforms on your business, or any other aspect of business planning for your farming business, we would be delighted to hear from you.


Posted in: Business planning, Common Agricultural Policy, Farmers

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