More Questions than Answers. Where does the CAP in Wales go from here?

Darllenwch yr erthygl yma yn Gymraeg | View this post in Welsh

January 2015 marks the start of the newly reformed Common Agricultural Policy. This latest reform of the Policy is probably one of the most ambitious and requires more changes over this CAP period than any other reform. Payments issued to farmers for this year will need to be made on the basis of these new requirements. This means that all governments issuing payments to farmers across the EU will need to adopt new payment, control and application systems.

By the start of this year the Welsh Government would have been hoping to have had the design of its new systems relatively firmly in place. This would have meant that it could communicate changes to the farming industry in plenty of time and ensure that it was in the best possible position to issue payments to farmers at the start of the CAP payment window in December this year. However, a successful legal challenge brought against the planned mechanism to distribute payments in Wales in December last year has required the Welsh Government to go back to the drawing board and start again.

Mathew Hillier Licensed under Creative Commons

Mathew Hillier Licensed under Creative Commons

The main problem facing the Welsh Government is that time is now against it. The original payment mechanism thrown out in December, was first consulted upon in detail in January 2013 with a significant amount of work having gone on behind the scenes beforehand.

With the application for 2015 payments due to open this May and the Welsh Government needing to get the European Commission’s approval for any system before it can be introduced there is not a lot of time left to redesign and consult with stakeholders on any new proposals. Whilst the Welsh Government has stated that the change will not delay the application window, farmers could face delays in finding out how much money they are likely to receive and a delay in actually receiving the payment.

CAP payments are made to farmers within a payment window that runs from December to June each year. Given farm businesses reliance on these payment the earlier they can be paid the better. Traditionally the Welsh Government has a very successful track-record of paying over 90% of farmers in Wales on the first day possible in December. The Welsh Government had already stated that this might not be possible this year due to the complexity of the new CAP arrangements. It has now confirmed that there is likely to be further impacts on its ability to make payments in December 2015 as a result of the required changes.

Where does Wales go from here?

The Welsh Government has already began informal consultation with stakeholders about the possible design of a new system but it is likely to be at least February before it launches a formal consultation. It will then need to consider any responses it receives and then notify the European Commission. Based on the applications submitted by farmers in May it will then need to inform them of how their land will be classified under the new system and give them an opportunity to appeal against these classifications if necessary. Having considered the results of any appeals it will then be in a position to inform farmers of how much they are likely to receive in the next payment window.

What the new payment system will look like remains to be seen. The Welsh Government has stated that it is not likely to reintroduce the Moorland category that was the subject of the legal challenge but will stick to the two key principles it agreed with stakeholders previously. These are that it will seek to minimise disruption and recognise the character of the land through payment rates. Beyond this all options could be open.

Whilst the CAP regulations require Member States and Regions to move towards what is known as an area basis for distributing payments to farmers by 2019 it provided them with a large amount of flexibility as to how and over what timescale they choose to do so. For example the Welsh and Scottish Governments have stated that they intend to move fully to an area based system for distributing payments by 2019 but Northern Ireland will only move part way towards using this mechanism.

The Welsh Government will also need to consider the implications of any new distribution mechanism for all other elements of the CAP such as the Rural Development Programme (RDP).

Further information on the details of the legal challenge and the Deputy Minister’s decision to withdraw the original distribution mechanism can be found on the Welsh Government’s website here.

Article by Nia Seaton, National Assembly for Wales Research Service.