UK: Common Agricultural Policy Reform & The "Golden Ticket"

Last Updated: 30 April 2012
Article by Tristram van Lawick

It has been widely reported over the last few months that the first draft of the Common Agricultural Policy ("CAP") reform was published in Autumn 2011. The reforms are due to come into effect in 2014, but it seems increasingly likely that their implementation will be pushed back to 2015 at the earliest.

The reforms will introduce a new Basic Payment Scheme to replace the existing Single Payment Scheme and will impose new requirements on the claimant in order to be able to qualify for receiving the payment. These changes have been covered in depth elsewhere, but to summarise, the key points are:

  1. The "Golden Ticket" whereby to claim the new payment the claimant must have been a successful claimant in the 2011 Single Payment Scheme year.
  2. The introduction of the "active farmer" test under which a claimant's Basic Payment Scheme claim must exceed 5% of their "non-agricultural receipts".
  3. "Greening", which imposed obligations on:

    3.3. use of arable areas;

    3.4. permanent pastures; and

    3.5. imposing "ecological areas".

As well as practical challenges for the claimant, the proposed changes raise a number of legal issues to consider. In this issue we will consider the "Golden Ticket".

The need to have a "Golden Ticket" will have a significant impact on two types of person:

A first time farmer purchasing or renting land after 2 April 2011 who wishes to buy entitlements as part of their purchase or lease ("Type A"); and

A landowner who does not claim entitlements himself and lets his land to a tenant and may wish to either claim the Basic Payment Scheme in the future himself or be able to lease the land to a new tenant together with the right to claim the Basic Payment Scheme ("Type B").

Under the CAP reforms at present the "Golden Ticket" can be transferred by one farmer to one other farmer i.e. a claimant who successfully claims entitlements in 2011 can transfer that right he acquired to a third party, but only to one third party, and in doing so he will himself lose his "Golden Ticket".

The transfer of the "Golden Ticket" can, it appears, only be implemented on a sale or lease of land. This poses a number of additional problems.

The Type A person will need to ensure that the drafting of the Sale Contract contains carefully drafted provisions to ensure that he can make a claim under the Basic Payment Scheme. Or, as is quite likely, if the Seller does not wish to sell his "Golden Ticket" the Buyer will need to seek advice on alternatives to allow him to claim the Basic Payment Scheme payments.

Similarly, a seller to a Type A person who has no intention of giving up his "Golden Ticket" will need to ensure that the sale contract does not unwittingly oblige him to give up this valuable right.

As drafted, it appears that the CAP reforms do not allow the "Golden Ticket" to revert to the Landlord on the termination or surrender of his tenancy. If the tenancy is due to expire before the implementation of the CAP reforms and the landlord wishes to let the land to a new tenant together with a right to claim for the new Basic Payment Scheme he will not be able to simply rely upon the clause in the tenancy agreement that the tenant will transfer the entitlements to the landlord or whomever he so directs. The Landlord will need to take advice on ways to plan around this apparent stumbling block. This provision will also have an impact on the landowner who bought a farm with an intention to take on the farming himself in the future but in the interim has let the land out to a tenant.

While measures to ensure that the landowner has a "Golden Ticket" may be quite complicated, especially as significant concessions or monetary stimulation may need to be given to the "Golden Ticket" holder, landowners will need to take into account the possibility of the financial implications on their farming businesses if they are unable to claim the Basic Payment Scheme.

Therefore planning and drafting are key for those wishing to claim the new Basic Payment Scheme and who are not already "Golden Ticket" holders. As it is possible that the 2011 reference year may be changed to 2012 it is also something that farmers must bear in mind when entering into new arrangements this year as even the simplest of arrangements may have a lasting impact on their entitlements claims.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Tristram van Lawick
 
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert
Email Address
Company Name
Password
Confirm Password
Mondaq Topics -- Select your Interests
Accounting and Audit
Anti-trust/Competition Law
Consumer Protection
Corporate/Commercial Law
Criminal Law
Employment and HR
Energy and Natural Resources
Environment
Family and Matrimonial
Finance and Banking
Food, Drugs, Healthcare, Life Sciences
Government, Public Sector
Immigration
Insolvency/Bankruptcy, Re-structuring
Insurance
Intellectual Property
International Law
Law Practice Management
Litigation, Mediation & Arbitration
Media, Telecoms, IT, Entertainment
Privacy
Real Estate and Construction
Strategy
Tax
Transport
Wealth Management
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

Disclaimer

Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

Registration

Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

Cookies

A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

Links

This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

Mail-A-Friend

If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

Security

This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.