Estimation of sectoral CAP payment 'envelopes' 2019

This report uses data on the level of past funding provided to individual farm businesses and Standard Output (SO) values to estimate notional payment ‘envelopes’ to different sectors.

Introduction and Background

1. Pre-2005 the CAP had specific sectoral payment envelopes, which were the summation of the various payments made within each sector. The amounts and proportion of the Pillar 1 support dispersed by each support scheme in 2005 is illustrated in Figure 1. Of the £632 million budget the beef sector received 46%, the cereal sector 30%, the sheep sector 18% and the dairy sector 6%.

Figure 1 Scottish coupled support payments by scheme 2005 [1]
pie chart showing the distribution of Scottish coupled support payments by individual schemes in 2005.  The total budget was £632 million and the segments of the pie chart include: Basic Cereals, Oilseed and Protein area payments, £188.6m, 29.8% of total; Suckler cow premium, £96.2m, 15.2% of total; Sheep and goat premium, £86.6m, 13.7% of total; Special beef premium, £73.9m, 11.7% of total; Beef extensification premium, £58.1m, 9.2% of total; Beef slaughter premium, £46.0m, 7.3% of total; Sheep and goat supplementary Premium, £26.1m, 4.1% of total; Dairy premium 2005, £24.9m, 3.9% of total; Additional payments to beef producers, £18.6m, 2.9% of total; Additional payments to milk producers (M€ 107.09), £11.2m, 1.8% of total; Additional payments to sheep and goat producers, £1.8m2, 0.3% of total; remaining items are very minor figures

2. With significant decoupling of CAP support from production, firstly to the Single Farm Payment from 2005 and then the Basic Payment Scheme and Greening from 2015 there is now uncertainty over the extent of sectoral / enterprise support within the CAP. Future funding arrangements for farm support once the UK is no longer under the Common Agricultural Policy (CAP) remain uncertain, pending UK-government decisions. However, by estimating the share currently allocated to different agricultural sectors (sectoral payment 'envelopes'), it is possible to use current funding levels as a guide to the budgets potentially available to the sectoral farmer led groups in the period until new agricultural policy is introduced through statute (potentially 2025-26).

3. The analysis is a direct response to evidence requests from the Farmer Led Groups on Climate Change.[2] The main purpose of this research was therefore to provide an estimate of how the current (largely decoupled) funding might be allocated to sectors within Scottish agriculture – in essence an analytical exercise in recoupling support payments to enterprise types on farms and crofts. Whilst it should be noted that farmers are not obliged to use support payments (even coupled ones) for any particular purpose (i.e. funds are fungible), the exercise serves as an indicator of the level of funding that may be required for relative sectoral support continuity under future schemes, if that is a policy objective.



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