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Commission confirms farm accounts required for capping and active farmer tests
December 7, 2011 5:47 PM
At a meeting between rapporteurs and shadow rapporteurs of the European Agriculture Committee and senior Commission officials it was revealed that farmers' accounts will be scrutinised each year by the authorities to prove they met the active farmer test on agricultural turnover.
The Commission also confirmed that if farmers were above the proposed capping threshold they would also need to provide their farm accounts to prove what their staff costs were each year so that could be taken into account when deciding whether the cap was to be applied.
The capping proposals from the Commission state that labour costs would be taken into consideration in calculating the cap on farmers SFP. The active farmer proposals set out criteria that mean you do not qualify if your SFP is less than 5% of the non-farm turnover in a farmers business.
Commenting, Liberal Democrat MEP for Scotland George Lyon said:
"I am sure most farmers would support measures that ensure so called 'slipper farmers' are outlawed and that aid be targeted at genuine farmers.
"However the proposal by the Commission to exclude farm businesses that have an SFP that is less than 5% of their off-farm income will be a bureaucratic nightmare for Member States to implement.
"In Scotland, it is estimated that around 50% of farmers have off-farm income and therefore under this new rule they would have to submit their farm accounts each year to prove they still qualified for SFP.
"How on earth can this be made to work? Many farm accounts will not be closed until two years after the claim year and therefore they will be unable to prove they are a genuine active farmer.
"What will be defined as non-farm income? Will it cover a farmer's wife who is out working or will a farm shop be considered as non-farm income?
"The same bureaucratic problems will arise in the capping proposals as farmers will be required to demonstrate the cost of salaries and taxes paid each year.
"This will raise all sorts of serious concerns about whether contractors and family labour can be counted as labour costs when it comes to determining whether a cap is applied to the individual farmer.
"It also runs the risk that farmers will employ extra labour just to qualify for the subsidy making their business less competitive and less efficient which is the wrong road to go down
"These two measures open up a Pandora's Box of uncertainty and I will be urging the Commission to think again."
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