Direct
Payments contribute to sustain farming throughout the European Union’s whole
territory by supporting and stabilising farmers' income, thereby ensuring the
longer term economic viability of farms and making them less vulnerable to
fluctuations in prices and providing basic public goods through their link with
cross compliance.
Agreement
at EU-level on direct payment support, provided through the European
Agricultural Guarantee Fund (EAGF), was reached in 2013 and resulted in the
adoption of the Direct Payments Regulation (DPR), Regulation (EU) No 1307/2013.
Malta
has been allocated an annual budget of €5.2 million until end 2019, a budget
which will be used to support active farmers via the implementation of the new,
compulsory schemes (applicable for all Member States), as well as the voluntary
schemes. Malta will be implementing a
total of 5 schemes under the DPR, namely:
- Basic
Payment Scheme (BPS)
- Payment
for agricultural practices beneficial for the climate and the environment (Greening)
- Payments
for young farmers
- Voluntary
Coupled Support (VCS)
- Small
Farmers Scheme (SFS)
Basic
Payment Scheme (BPS)
The
Basic Payment Scheme (BPS) is very similar to the past Single Payment Scheme (SPS),
which was implemented throughout the 2007-2013 programming period. The scheme
will be based on payment entitlements which Malta will be allocating in 2015,
meaning that farmers will be receiving new entitlements in accordance with the
eligible agricultural area registered with the Agriculture and Rural Payments
Agency (ARPA). Under this new framework Malta will be allocating one type of
entitlement with one value.
Farmers
will be required to activate the entitlements each year, together with the
equivalent eligible area registered by the beneficiary. These entitlements
shall be traded like the previous entitlements; they can either be transferred
or leased. Entitlements which are not activated for two consecutive years shall
be transferred to the National Reserve, which serves as an envelope to be used
to allocate new entitlements to new farmers.
In
order to be eligible for support under the BPS, applicants must have possess a
minimum of 0.3 hectares (equivalent to 2.6 tumoli) of eligible agricultural
land (or land used for agricultural purposes). Parcels which are left fallow
shall be considered eligible as long as the farmer is carrying out what is
known as ‘a minimum activity’. This is a new obligation introduced under the
new framework aimed to support active farmers; parcels left fallow must be
tilled at least once a year between April and May in order to satisfy this
minimum activity obligation.
Payment
for agricultural practices beneficial for the climate and the environment
(Greening)
During
the 2014-2020 period, the Commission has placed considerable importance upon
the greening measures, and this is evident by the fact that 30% of the total Direct
Payments budget has been allocated to greening payments.
In
Malta, €1.57 million will be allocated annually for greening. Greening comprises
three schemes, and all farmers falling within the set thresholds of the schemes
are obliged to observe the applicable obligations. In case of non-compliance they will be
subject to penalties and/or reductions. The three greening schemes are the following:
Farmers
in possession of over 10 hectares (88 Tumoli) of arable land must observe the
crop diversification system:
- Farmers
who have over 10 hectares but less than 30 hectares must cultivate at least 2
crops on their arable land. The main crop must not exceed 75% of the total arable
land;
- Farmers
with an arable area of more than 30 hectares (266 tumoli) must cultivate at
least 3 crops with the main crop not exceeding 75%. The main crop together with
the secondary crop must not exceed 95% of the arable area.
Farmers
who either cultivate over 75% of their arable land with fodder crops, or leave
their land fallow, are exempt from the crop diversification obligation.
This
scheme is not applicable to Malta as there are no permanent grasslands.
Ecological
Focus Area (EFAs)
Farmers
who have an area of 15 hectares (133 tumoli) or more of arable land are obliged
to maintain at least 5% Ecological Focus Areas (EFAs). Malta has determined the following areas as
Ecological Focus Areas:
- Fallow
Land
- Nitrogen
fixing crops
Farmers
with less than 10 hectares are exempt from the greening obligation but are still
eligible for the greening payment.
Payment
for young farmers
This
scheme is aimed to support young people starting an agricultural activity.
Farmers who are 40 years or younger will be able to benefit from an additional
financial top-up to their basic payment.
The
top-up amounts to 25% of the payment entitlement value, and support is granted
for the first 5 years from when the farmers commence their agricultural
activity.
Small
Farmers Scheme (SFS)
The
European Commission has proposed a simplified scheme for farmers who receive payment
of less than €1,250. The Small Farmers Scheme shall help these small farmers to
submit a simple application form rather than applying for the Basic Payment
Scheme (BPS), greening and/or young farmers’ scheme.
The
farmers will receive the same amount of funds but through a simplified scheme
instead, and Malta will consider all farmers who will receive payment of less
than €1,250 as being part of the SFS. Farmers may decide to withdraw from the
SFS at any time simply by informing the Agriculture and Rural Payments Agency
(ARPA). Farmers participating in the Small Farmers Scheme (SFS) are exempt from
the greening obligations and the penalties and reductions related to cross compliance
obligations.
Voluntary
Coupled Support (VCS)
The
objective of the Voluntary Coupled Support (VCS) scheme is to support sectors that
are particularly important for economic, social or environmental reasons, and
which are undergoing certain difficulties. Malta obtained derogation from the
EU under the Voluntary Coupled Support (VCS) scheme allowing the possibility to
allocate up to €3 million for this measure.
Malta
will be using this scheme to support four sectors: dairy, beef, Sheep and tomato
(for processing). Farmers in these sectors are requested to submit an
expression of interest to receive support under this scheme.
Dairy
breeders may receive support if they fulfil the follow criteria:
- Have
a contract with a dairy processor
- Have
at least 10 dairy cows
Farmers
in the beef industry are eligible for support as long as they have:
-Slaughtered
at least three bulls or heifers in 2014. Under this scheme an eligible heifer
must be of a beef breed or cross-bred with a beef breed. Eligible bovines must
be slaughtered between the age of 8 and 20 months and must have been registered
under the breeder’s name for at least 6 months.
Farmers
in the sheep sector may be eligible for support if they have:
- At
least 20 ewes which are 1 year (or older) or more registered under their name.
Farmers
who cultivate tomatoes for processing must meet the following criteria to
receive support:
- Have
a contract with a Producer Organisation (PO) or Cooperative within the tomatoes
for processing sector
Budget
for all Schemes
As
stated above, the total budget for Direct Payments in Malta until 2019 will be
of €5.2 million annually. The following
table provides a breakdown for budgetary allocation for each scheme:
Scheme
|
Percentage of the National Budget
|
Annual Amount in €
|
Greening
|
30%
|
€1,572,300
|
Payment
for Young Farmers
|
0.4% (may be increased to 2%)
|
€20,956
|
Voluntary
Coupled Support
|
In the
case of Malta up to 3million
|
€3,000,000
|
Basic
Payment Scheme
|
12.36%
|
€647,736
|
Total
|
|
€5,240,992
|