FUW KICKS OFF DEBATE ON THE FUTURE OF WELSH SINGLE PAYMENTS

The Farmers' Union of Wales has kicked off the debate on the future of Welsh Single Payments by releasing a detailed study of the current regime and possible future payment models.

The report, entitled "An Analysis of the Welsh Single Payment Regime and the Impact of Possible Flat-Rate Single Payment Models" is being launched at the Royal Welsh Show.

It provides detailed analyses of the way in which Pillar I Single Payments are distributed amongst Welsh farms and land types, and examines the possible impact of four possible single payment models.

Speaking following the launch, FUW President Gareth Vaughan said: "In the run up to last year's CAP Health Check agreement, we won a major victory for the Welsh industry by securing the retention of historical Single Payments for a number of years.

"However, the movement to flat-rate payments is inevitable, and we need to start looking at all the options in order to find the best solution for the Welsh industry."

The process of analysing possible Single Payment options has already been started by the Welsh Assembly Government (WAG), and a stakeholder group has been established to look at possible options for Wales.

"We have therefore built upon the work already done by WAG in order to alert the industry to what might be expected in future, by providing a detailed analysis of the status quo, and the possible implications of moves to different payment regimes."

The report reveals that the average payment per hectare for farm businesses currently receiving Single Payments above £16,000 is higher than for those receiving less than that figure.

"Current payments per hectare for those receiving below £16,000 are, on average, 18% below the Welsh average, and 25% lower than those received by claimants of more than £16,000, suggesting an inevitable movement of monies to smaller enterprises, irrespective of the final flat-rate model chosen," said Mr Vaughan.

The study also confirms that higher fertility land attracts larger payments, with average payments per hectare for non-Less Favoured Areas (LFA), Disadvantaged Areas (DA), Severely Disadvantaged Areas (SDA), and common land currently £224, £204, £145, and £117 respectively.

"This suggests that a single flat-rate payment for the whole of Wales would result in a fall in non-LFA payments of £25 million, which would have a catastrophic impact for lowland farmers."

Recipients of lower Single Payments are found, on average, to be more reliant on DA land, and less reliant on SDA and common land.

The four models studied are: a fixed flat rate payment per hectare, irrespective of land category; a model retaining the balance between all monies paid within and outside the LFA; a model retaining the balance between all monies paid within and outside the SDA, and a model retaining the balance between all monies paid on SDA, DA, non-LFA, and common land.

The report suggests that disruption for the industry as a whole is minimised by ring-fencing money currently claimed for each land category, and proposes a method of quantifying the disruption caused within each payment band.

"However, these are initial results, and further analysis is needed before any final conclusions are drawn," said Mr Vaughan.

"In particular, we need to assess the impact of different models on particular sectors and regions, before any decision is made regarding the model that should be adopted in Wales.

"While the Single Payment is the single most important source of income for Welsh farmers, we also need to take into account the implications of changes such as the forthcoming CAP and EU budgetary reviews, changes to the eligibility criteria for LFAs, and the impact of the new Glastir scheme."