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6. Options for the second interim scheme
6.1 This section sets out options for a second interim scheme, assuming that more radical changes are not required as a result of EC legislation. These options are not necessarily mutually exclusive.
6.2 It would be possible to continue the 2007-2009 interim scheme with no significant changes . This would be straightforward, and provide continuity for current recipients. It would not, however, address the concerns set out in paragraphs 3.7 and 3.8.
Q4 Would you be in favour of continuing the current interim scheme with no significant changes?
6.3 It would be possible to address some (but not all) of the concerns set out in paragraphs 3.7 and 3.8 by making adjustments to the payments table in paragraph 3.3 and by changing the minimum payment. To remain within the budget set out in the SRDP, this would need to be done in a cost neutral way, so there would be losers as well as winners.
Q5 Would you be in favour of continuing the current interim scheme, but with some redistribution of payments? Do you have alternative suggestions?
6.4 It would be possible to create a closer link with livestock-related activity , but in a way that does not create the direct link with current levels of production. Ensuring a closer link with livestock-related activity can also help deliver environmental benefits from LFASS. In addition, this link should help to address other concerns set out in paragraphs 3.7 and 3.8, including the problems facing new entrants and others taking on land that did not attract LFASS in 2006 and the loss of the cattle-"top-up" link . However, it would increase complexity and administrative costs.
6.5 To achieve this, applicants would continue to be paid for actively farming eligible land for the majority of the year, in the same year as the SAF is submitted, and the established system of grazing categories would continue, unchanged. However, land and livestock data from the 2008 Single Application Form ( SAF08) would be used to calculate and replace LFASS06 "frozen" values for continuing applicants and to establish values for new applicants. This could change the stocking densities used to establish whether someone is farming within the minimum and maximum stocking density limits, and the cattle percentages used to determine entitlement to the cattle "top-up". All stock numbers from the SAF08, excluding pigs, poultry and horses, would be used to calculate stocking densities; suckler, heifer, ewe and gimmer numbers from the SAF08 will be used to calculate the cattle/sheep ratio. Since SAF08 includes stock numbers present on the holding as at 1 March 2008, 2010 applicants would be asked to confirm which, if any, of the stock declared, they themselves either owned, or had management/economic responsibility for. Those who failed to enter livestock numbers in the SAF08 would be offered the chance to prove and declare them retrospectively, and those with both LFA and non- LFA land would be asked to identify which of those stock declared in their SAF08 were grazed on their LFA land.
6.6 The advantages and disadvantages of such a change include the following:
Advantages
- allows new entrants from 2005 to 2008 entry to the scheme from 2010;
- provides a more recent snapshot which takes account of post CAP reform stock adjustments - but continues an "historic" approach to avoid criticism that payments are coupled to production.
Disadvantages
- LFASS06 historic animal data had the benefit of being record checked and counted during inspections in 2004 and, in the case of cattle, cross-checked against Cattle Tracing Scheme ( CTS) data. This meant there was no need to repeat the animal checking process for the 2007 - 2009 interim scheme. To satisfy EC legislation these checks would need to be applied (possibly at individual ear tag level) to the SAF 2008 numbers, so the cost of scheme operation from 2010 will increase, entailing about 1,000 inspections (at an approximate cost of £250,000 per year to the Scottish Government and costs to the industry);
- possible disputes over "anomalies" in SAF08 numbers;
- EC animal over-declaration penalties may be applicable, as well as land penalties;
- historic SAF 2008 data will become outdated and future new entrants who take on land for which there was no SAF08 may feel disadvantaged.
6.7 There is an intrinsic link between livestock farming and the upland environment. Linking payments to livestock-related activity so as to benefit the environment could also be achieved by introducing some basic conditions, of which applicants would need to meet a minimal number. These conditions would not require additional management, but would be designed to encourage livestock-related activity. They could, for example, include minimum and maximum stocking densities; requirements for a minimum area of grass for hay; a minimum area of fodder crop; or a minimum percentage of grassland in permanent pasture.
Q6 What are your views on the principle of creating a closer link with livestock-related activity?
Q7 What are your views on the approach set out in paragraphs 6.4 - 6.6 on (i) creating a closer link with livestock-related activity, (ii) helping new entrants and others taking on land that did not attract LFASS in 2006, (iii) re-establishing the cattle-top up link?
Q8 How could delivery of environmental benefits be improved?
6.8 The SRDP 2007-13 includes provision of £61 million per year for LFASS. This accounts for nearly 30% of total SRDP expenditure. Subject to EC agreement, it would, however, be possible to modify the Programme in order to reallocate a proportion of LFASS funding to other measures within the Programme, for example to promote improved business viability (Axis 1), agri-environment measures (Axis 2) and/or thriving rural communities (Axis 3). However, the procedure required to reallocate money within Axis 2 is simpler than the procedure required to reallocate it to Axis 1 or Axis 3.
Q9 What are your views on reallocating a proportion of LFASS money to other measures within the SRDP?
Q10 Do you have any other suggestions for the second interim scheme?
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