On 27 June 2007 Tods Murray and Bell Ingram hosted a joint briefing on “Protecting and Maximising your Forestry Income.” John Fulton of Tods Murray chaired the event with Mark Mitchell and Richard Till of Bell Ingram detailing the new system, which comes into force in October 2007, outlining what needs to be done and by when. At the time of going to print with this Focus Factsheet, Forestry Commission Scotland has, within the last week, announced the £3M Woodland Creation Scheme for the 2007/08 planting season and applications must be submitted by 31 August 2007.

This Focus summarises the content of the briefing given by Bell Ingram. If you require further advice please contact one of the speakers listed below.

John Fulton - john.fulton@todsmurray.com   
Mark Mitchell - mark.mitchell@bellingram.co.uk
Richard Till - richard.till@bellingram.co.uk   

Why is a new system being introduced?
There has for a number of years been increasing political unease over the payments being given to support agriculture and woodlands. The new system will advance the process of moving away from direct payments, towards support for the environment and for providing greater public benefit.


What is the new system?
The Scottish Rural Development Programme (SRDP) is an integrated umbrella scheme under which the grant schemes of the future are being developed. SRDP will cover all grant payments to land owners and occupiers, including woodland.

The SRDP has taken two years to draft and, having been submitted by SEERAD (The Scottish Executive Environment and Rural Affairs Department), the EU Ministers have six months in which to make amendments. Bell Ingram believe that the SRDP is a seven year programme worth £1.6bn.

Financial support is split into three separate tiers:

Tier 1 – Single Farm Payment based on the number of entitlements owned or leased and with a requirement to occupy agricultural land.

Tier 2 – Land Management Contracts menu-based scheme currently includes seventeen different options and is based on the number of hectares claimed on the Integrated Administration and Control System (IACS) form. A woodland option is to be introduced for native woodland creation, which Bell Ingram understand will be restricted to 2 hectares per annum.

Tier 3 – Rural Development Contract Scheme (RDC), formerly known as Land Management Contracts. The scheme will operate on a tender basis, so owners and occupiers will be required to apply for moorland management, stock reduction etc. Applications will be assessed on a points basis and there is an up front cost to the applicant, so it is advisable to
undertake a trial application to assess whether or not it is worthwhile. Specifically in relation to woodland, Tier 3 will encompass the new Forestry Commission Scotland (FCS) woodland support packages to be considered and approved by FCS.


Will the new Scottish Executive impact on the new system?
The scheme is effectively implementing EU Directives and has been submitted by the new Executive without change. What the Executive now needs to do is advise whether it will support the scheme by appropriately financing the public and private sectors, and so far, the indications are positive.


How will the new system work?
Future payments, subsidies and grants will all be administered through the SRDP by SEERAD. To tap into these payments you must register your land or woodland with SEERAD and, if you do not register, you will not qualify for any payments.


Why are woodlands being brought into the scheme?
The EU requires one payment agency to be appointed, thus providing a more holistic approach. The aim is to break down barriers between the different government agencies. This will mean looking at business in a different way. It is anticipated that it will assist in accountability within the Civil Service and to the EU and it should reduce the incidence of fraud. It may however, blur the edges between government departments and result in a loss of certain specific skills within departments.


What is the role of the Forestry Commission now?
The change to the Forestry Commission Scotland (FCS) is relatively modest. It will continue to operate in essentially the same way apart from issuing payments, which, from 15 October
2007, will be handled by SEERAD. FCS will continue to offer felling licences, administer applications, undertake inspections and make a decision on whether or not the application should go forward to SEERAD for payment.


What happens to my existing scheme?
Many existing schemes are coming to an end and if you are part of an existing scheme, it will run its course. All existing contract payments will be honoured until April 2009. Woodland owners need to register with SEERAD by 15 October 2007 to receive ongoing payments. In addition to registering with SEERAD, the submission of the annual return of your land on an IACS form must be made by 15 May 2008. The picture is not at all clear as to what happens to existing schemes that run beyond April 2009 and we still await clarification from FCS and SEERAD as to the procedure to be implemented.


New Woodland Schemes
FCS is currently drafting details of woodland grant aid payments for replacement woodland schemes that will be imbedded within the SRDP. FCS has recently announced the £3M Woodland Creation Scheme which will act as an interim payment system for the 2007/08 planting season, until the new, full scheme comes into place as part of the Rural Development Contracts. Applications must be submitted in outline by 31 August 2007. Bell Ingram anticipate that details of the full scheme will be released towards the end of the year, subject to ratification of the SRDP by the EU Minister.


Summary
The SRDP has been drafted during the past two years, so it shouldn’t be a surprise to anyone that it is now being implemented. If you receive payments of any kind whatsoever, then make sure you register with SEERAD by 15 October 2007.

If you have woodland but do not currently receive payments of any nature, then you do not have to register. However, in saying that, it would be wise to register anyway, as no doubt you will need to do so at some point in the future.

The deadlines are looming and Bell Ingram’s best advice is to register with SEERAD now and avoid the flood of applications that will arrive at the eleventh hour just before the deadline.