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The dust has settled on a second year’s Single
Farm Payment Scheme with many agents having been
busy letting “naked acres” and cutting our teeth
trading entitlements. The industry is now
familiar with the workings of naked acres and
entitlement has established a trading value of
between two and three times the actual payment
value.
Indeed investors have seized on the opportunity
to acquire entitlement with good payments (£70
to £90/acre) to then claim on Highland hill land
which they can rent at relatively low levels (£6
to £10/acre). The gamble for most will be that
the Single Farm Payment Scheme continues for a
further four years and that a change to the
scheme is not implemented in 2008 at the next
round of the Common Agricultural Policy.
With the current poor grain prices I feel that
there is an opportunity to let areas of arable
land which are unlikely to be cropped in the
immediate future for set aside entitlement, thus
allowing farms without sufficient set aside land
to crop to their full potential. There is also
the option of purchasing the set aside
entitlement to cover this land, at or about 1 to
1.2 times actual payment value and I would be
delighted to discuss this further with anyone
who has maybe interested.
Thankfully almost all Scottish farmers have
received their 2005 payments, though subject to
the National Reserve (4.2%), EU and UK
modulation (6.5%). The National Reserve level
will remain constant for the duration of the
Single Farm Payment Scheme with the EU and UK
levels increasing annually (8% in 2006). I
believe that only those caught up in the
National Reserve and subject to consolidation
are yet to be paid in full, unlike south of the
border where I understand only a small number
have received payment.
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The 2006 Land Management Contract (LMC) was
virtually a repeat of the scheme from 2005 with
three tiers: Tier 1: SFP, Tier 2: LMC Menu
Scheme and Tier 3: under development for 2007.
The Tier 2 LMC Menu Scheme contained 17 options,
ranging from Animal Health, Woodland plans, wild
bird seed mixtures, summer cattle grazing to
improving access, allowing landowners and
occupiers to find options which were attractive
both financially and environmentally.
Many of our clients had opted for five year
schemes in 2005 and automatically receive the
same payment in 2006. From our experience it was
possible to obtain payments of approximately
£3,500 per annum per application, though
dependant on the area claimed in the Single
Application Form. The skill was to identify
areas of funding available covering works that
were either already undertaken or were planned.
Hopefully we will have an opportunity to see
what is within the Tier 3 scheme in the not too
distant future, though I anticipate a
re-branding of the Rural Stewardship Scheme.
Mark Mitchell MRICS
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