Memorandum by the Ulster Farmers' Union
Position paper from the National Farmers'
Union, England and Wales (NFU), the National Farmers' Union Scotland
(NFUS) and the Ulster Farmers' Union (UFU) on Simplification and
Better Regulation of the CAP
INTRODUCTION
1. The UK NFUs welcome this opportunity
to submit views on the simplification and better regulation of
the CAP. As Commissioner Fischer-Boel has pointed out, this is
an ongoing process and it is likely that further comments will
be submitted in due course, both directly and indirectly through
other forums.
2. We particularly welcome the fact that
this simplification round takes place within the framework of
the "Better Regulation for Growth and Jobs" initiative.
Better regulation is something we are pressing for with our own
administrations; in our view, its scope is wider than simply simplifying
the rule book. It is about ensuring consistency of approach and
legal certainty. It addresses the need for farmers to know exactly
what rules they must observe and when, to what extent they can
be penalised if they do not comply and, importantly, what the
rule is there to achieve.
3. Bearing that wider aspect in mind, we
would like to make comments covering the following issues:
— DG Agri's Simplification Action Plan.
SINGLE PAYMENT
SCHEME
Ten-month rule (Council Reg 1782/2003 Art 44(3))
4. Of all the candidates for "technical"
simplification, this rule must be on the short list. It is not
even clear what the current reasoning behind it is. As a measure
to ensure that it is easier to identify who is responsible for
cross-compliance, it does not do the job adequately and leads
to confusion; cross-compliance responsibilities apply across a
calendar year whereas the 10-month occupation period can potentially
extend from up to three months before the calendar year to two
months after it. As a rule to ensure that there is only one claimant
who matches a hectare of land against an entitlement, it is unnecessary.
We note that the 10-month rule does not appear to apply under
the Simplified Area Payment Scheme, currently operating in eight
of the new member states.
5. Once you have an area-based system, the
approach adopted under the old Arable Area Payments Scheme is
surely sufficient; whoever is in control of the parcel on the
latest date for including that parcel in an SPS application is
entitled to use that parcel to match against their entitlements.
That is no more nor less disruptive to the cross-compliance regime
if the basic principle is that SPS claimants can be held responsible
for breaches of cross-compliance where at the time of determination
they are in charge of the holding, the area, the production unit
or the animal concerned (as per Article 65.2 of Reg. 796/2004).
6. The need for a claimant to have land
at his disposal for a minimum of 10 months within a defined period
and the possibility of only two start dates per holding has created
heavy administrative burdens for our members, particularly in
sectors where land is taken for short periods from other farmers
for field vegetable and potato production. In order to ensure
the rule is respected and payment can be claimed, complex leasing,
licensing and contracting arrangements have had to be used which
make a mockery of the notion that the SPS is a simpler system.
7. Having said that, we acknowledge the
need for an anti-avoidance provision of some kind, to prevent
a farmer using land he is controlling on the latest date to apply
for payment and then transferring the parcel to a non SPS claimant
who is, in effect, free from the risk of cross-compliance deductions.
Penalties
8. The level of penalties imposed on farmers
for small, administrative mistakes are hugely disproportionate.
There is little distinction between penalties resulting from genuine,
unintentional errors and those involving intentional misinformation.
What we need is a flexible penalty system that recognises the
differences between these types of errors, why they occur and
only applies a penalty that is proportionate to the error that
is found.
Decoupling
9. We recognise that further decoupling
involves policy rather than technical simplification. Nonetheless,
as farmer organisations whose administrations have opted for full
decoupling, we can believe that the simplification heralded by
the 2003 reforms cannot be realised unless and until partial de-coupling
options are dispensed with.
10. We do not believe that a non-distorting
and level playing field in Europe is attainable as long as some
farmers are still encouraged to produce, not in response to market
forces but in order to maximise support payments.
Cross-Compliance
11. We have submitted a separate paper to
the Commission on cross-compliance. Here, we would like to make
just a few comments on how—in our view—principles
of simplification and better regulation can be applied to the
regime.
Breach at time of determination or at time of
commission?
12. This point ties in with what we have
said in paragraph 5 above. Article 6 of Council Regulation 1782/2003
states that where statutory management requirements or GAEC standards
are not complied with as a result of an action or omission of
the farmer, the total amount of payments to be granted in the
calendar year in which the non-compliance occurs shall be
reduced or cancelled. This contrasts with the provisions of Article
65.2 of the implementing regulation 796/2004; this refers to the
time of determination, rather than the time of occurrence.
The two are not, in our view, totally compatible. The breach may
occur in one scheme year, but be determined in the following year.
Which year's payment should be subject to deduction in this instance?
In the interest of certainty, the position needs to be clarified.
For whose breaches can a farmer be penalised?
13. The risk of deductions for non-compliance
threatens to impinge on public infrastructure works which previously
took place by agreement with the owner or occupier. Now, we are
in the ridiculous position where if a farmer co-operates willingly
to allow a statutory undertaker access to carry out necessary
works, he could be in breach of cross-compliance if the work involves
the statutory undertaker committing a non-compliance whereas if
he insists on statutory notices of entry being served, his position
is protected. To be on the safe side we are forced to advise our
members to opt for the more legalistic second option. There surely
must be scope for clarity here. Any acts by statutory undertakers
who have the right to enter land to carry out works should not
be considered acts or omissions of the farmer, whether they enter
by agreement or not. This needs to be set out clearly in the regulations.
Principle of legal certainty
14. What we are asking for is, in effect,
that it should be clear at any point in time who can be held liable
for what as far as cross-compliance breaches are concerned and
what deduction could potentially be applied to which year's payment.
That is a principle of good regulation. A farmer should know on
31 December of a scheme year that if there has been no determination
of a breach ahead of that date, he can be sure that no deduction
for non-compliance will be made to that year's SPS payment.
Payment window
15. Leaving aside the disastrous first year
delivery of payments in England, we believe it would make sense
to have 16 October as the start date from which payments may be
made. In the same way, we would wish to see the legal deadline
as 31 March. These dates have a certain familiarity, derived from
previous support schemes. Payments could then be made from the
start of the Commission's own budget year and the need for formal
requests to make advances following summer droughts etc. would
be reduced. Payments for the previous scheme year would in turn
be completed well ahead of farmers submitting their SPS application
forms for the next year, avoiding the overlap that is currently
a feature of the regime.
Simplified Area Payment Scheme—the future
model for flat-rate systems?
16. Once a member state or region has adopted
a flat-rate and fully decoupled approach, with virtually every
hectare of eligible agricultural land matched by a payment entitlement
and the same payment per hectare applied, the payment entitlements
themselves become redundant. They will be nothing more than an
additional layer of bureaucracy, adding cost and risk to the process
of administering direct payments (for the paying agency) and claiming
them (for the farmer).
17. Whatever future direction of direct
payment models is mapped out during the Health Check, we would
urge the Commission to consider whether entitlements themselves
can be justified where transitional phasing-in periods are complete
and the management of a hectare of land delivers the same rate
of payment. In effect, under the flat-rate approach, payment entitlements
will have served to "convert" headage/quota/contract
tonneage entitlement etc into an area payment; that done, they
serve no useful purpose.
Fruit, vegetable and potato (FVP) restrictions
18. The issue of whether restrictions on
FVP production should remain is principally a policy one and we
have already submitted our views in other papers and forums1.
Suffice to say here that in terms of simplification and better
regulation a regulatory framework that allows FVP production to
be supported in three completely different ways depending on the
direct payment model selected is nonsense. A three-speed CAP is
a CAP in reverse and this inconsistency must be rectified at the
earliest possible opportunity.
December 2006
| 
