The recent changes to the Single Farm Payment (SFP) could reduce claims following entry to agricultural land. However, the new rules could also mean that utility companies will need to be more cautious in the way they use the land once they have gained access to it, and they may also see ad hoc payments for non-statutory access rise.

The first major change to SFP policy (by which farmers receive agricultural subsidies) relates to the 10 month rule. In the past, farmers applying for subsidies needed to have the land at their disposal for 10 months of the year. However, following the changes, farmers only need to have the land at their disposal on 15th May in the relevant year. Therefore, occupation of the land by utilities is only an issue for farmers if the statutory body or utility company is in occupation on that given date; the farmer will not be allowed to include the land on his claim form.    

This could reduce compensation claims as more farmers will be in possession of the land at the appropriate time to claim their SFP.  It may also make it easier to negotiate access rights as there is only one given date of the year that utilities must not be on the land, in order for the farmer to claim.

So far, it would appear that these changes benefit both the farmer and the utility companies as the latter will be less likely to pay out compensation. However, it is not that simple. If the land is not occupied by the statutory body on the 15th May and the claimant claims for entitlements, then the issue of cross-compliance may arise.

The current official line in the cross compliance handbook 2008, states that ‘Claimants will not be held responsible for acts carried out by statutory bodies which result in a breach where they did not have the power to stop them taking this action’. This is rather vague in deeming what a farmer would necessarily have the power to stop.

The official line given to the Central Association of Agricultural Valuers, (CAAV) confirms this position and goes on to suggest that claimants may be held responsible for cross compliance breaches if they have given permission to the undertaker to carry out actions not covered by their statutory powers which lead to a breach.

The test is whether the claimant can be held directly responsible for a potential breach i.e. if the breach occurred without possibility of foresight then the claimant will be liable. If however, the claimant could have been aware of the potential breach and failed to prevent it, then he may well be subject to a penalty. Ultimately the penalty levied on the claimant would then be included in the compensation claim. As the penalty will not be detailed until the following spring in the claimant’s annual statement and could it therefore give rise to additional reservations in any claim or delayed claim submission.

Ultimately, utility companies could find it nearly impossible to work on land without contravening cross compliance standards, therefore putting the claimant at risk of penalties. When the activity is not directly covered under statutory powers, such as compound areas and off easement access, then entry payments may rise in an attempt to cover this increased risk.

The second major, but currently temporary, change to farm subsidies relates to 2008 set aside rules, which have also brought mixed blessings. In the past, if set aside land was occupied claimants were forced to find additional set aside land or risk having set aside entitlements offset against other eligible land (thereby losing any historical top up on that land). With 0% set aside requirements for 2008 this head of claim will be irrelevant, however with 0% set aside requirements it is likely that an increase in cropped land will be seen, which could boost claims.
 
Statutory bodies need to be respectful of cross compliance requirements and ensure they do not breach them in any way – to avoid increased compensation claims form farmers.  In practice this may not be possible; however utility companies and authorities may need to consider promoting greater awareness of their statutory undertaking in order to face these new challenges.

Professional and expert advise should be sought at an early stage in order to mitigate potential problems.  For further information, please contact Charlie Overs on 01452 880000 or email This e-mail address is being protected from spam bots, you need JavaScript enabled to view it