Estimation of sectoral CAP payment 'envelopes' 2019

Key points

• Future funding arrangements for farm support once the UK is no longer under the Common Agricultural Policy (CAP) remain uncertain. However, data on the level of past funding provided to individual farm businesses can (via various modelling assumptions and caveats) be used to estimate notional sectoral payment 'envelopes' to different sectors.
• In 2005, when the last sectoral envelopes were known, from the £632 million CAP direct support budget the beef sector received 46%, the cereal sector 30%, the sheep sector 18% and the dairy sector 6%.
• £506.9m was allocated to farmers through 'direct' support in 2019 – Basic Payment Scheme, Greening, Scottish Suckler Beef Support Scheme Mainland, Scottish Suckler Beef Support Scheme Island, Scottish Upland Sheep Support Scheme and including both the Beef Efficiency Scheme and Less Favoured Areas Support Scheme. Using the Standard Output (SO) model for 2019, beef activities were allocated 43.5% of direct support payments, whilst crop and horticulture activities received 24.7%, sheep activities 23.6%, dairy activities 5.3% with the remainder (2.9%) being allocated to grazing or fodder crops without any (June) stocking activity.
• For crop and dairy envelopes, the BPS accounted for 66% of the support with greening 34%. However, in the beef and sheep sectors the addition of LFASS and coupled support schemes meant that the BPS and Greening accounted for a lower proportion of the sectoral envelope (e.g., BPS was 51% of the sheep envelope and only 45% of the beef envelope).
• There was significant variation across farms in the amounts distributed through the payment envelopes, reflecting heterogeneity in the levels of activities and composition of payments that a business receives. For example, of the 6,876 crop envelope recipients the top 20% were allocated 66% of the entire envelope, with the top 10% receiving 46% and the top 5% allocated 31% of the envelope.
• LFA Cattle and Sheep businesses were allocated 47% of 'direct' payments in 2019 (with 58% of those payments being through the beef envelope and 37% through the sheep envelope). Mixed holdings were allocated 12.5% of payments (with 46% from the crop envelope and 42% from the beef envelope). Specialist cereal producers were allocated 7.5% of total support and most of their allocation was through the crop envelope. The specialist pig, horticulture and poultry sectors were only allocated 1.6% of support collectively in 2019.
• The North East of Scotland received 18.5% (£93.8m) of 'direct' payments in 2019 with 43% allocated from the beef envelope and 41% from the crop envelope. Dumfries and Galloway received 13.5% (£68.2m) of payments with 56% of allocated through the beef envelope, 21% the sheep envelope and 16% the dairy envelope. In contrast, Na h-Eileanan Siar recipients received 1.8% (£6.7m) of 'direct' support payments with 62% allocated through the sheep envelope and 33% the beef envelope.
• Across Scotland £0.24 of direct support was received per £1 of SO in 2019. Mean support levels vary widely between sectors with the specialist horticulture (£0.02), poultry (£0.03) and pigs (£0.07) and specialist dairy farms (£0.08) received comparatively low levels of direct support. In contrast LFA cattle and sheep businesses received £0.46 per unit of SO.
• Na h-Eileanan Siar received the highest relative direct support (£0.71 of direct support per £1 of SO), with Shetland receiving £0.65, Argyll and Bute £0.52 and Highland £0.47. In contrast businesses across Fife and Tayside only received £0.13 and £0.15 of direct support per £1 of SO respectively followed by Dumfries and Galloway and North East Scotland (£0.19 per unit of output)
• £48.5m was paid to 3,611 (including non-agricultural) businesses in 2019 through AECS, FGS and legacy schemes. There were 145 recipients of £2.3 million capital grant through AECS, with 2,318 receiving £23.5 million in recurrent payments. 145 businesses received £15.9 million FGS capital grants with £5.8 million in recurrent payments made to 625 businesses in 2019. 682 businesses were in receipt of legacy environmental and forestry payments.