London, 8 November 2013, Lowland farmers could face losing some of their EU payments to south western and northern hill farmers if the Common Agricultural Policy shareout in England is altered in 2015.

DEFRA has launched a consultation that closes on November 28, with Secretary of State Owen Patterson seeking the views of the farming community about reforms that will see money diverted from direct payments, known as Pillar 1, to rural development funds (Pillar 2).

However, one option is for upland farmers to receive extra Pillar 1 money from a movement of funds approaching £40 million at the expense of lowland farmers. While arable farmers rely less on EU payments to produce their profit some livestock farmers could be harder hit.

But all are potential winners because applying the new Basic Payment Scheme, as it will be known, should be much more straightforward when it comes into force in 2015. Farmers will not have to apply for new entitlements, as they did when CAP was last reformed in 2005, causing a massive administrative headache that lasted for years.

A side effect of the new approach is that capital values of existing entitlements have risen by 50 per cent to £300 per hectare to reflect the fact that they will now be around until 2020.

When hill farmers hit hard times earlier this year, some lowland farmers sent them spare feedstuffs for free to support them. Whether or not this feeling of largesse will appeal to them on a compulsory, long term basis is yet to be seen. Some may think the £1,000 annual payment decrease on a 200 hectare farm is perfectly bearable in view of the significant benefit it will bring to disadvantaged areas, where a 200 hectare holding would gain about £7,000 on DEFRA’s current model.

DEFRA also looks to be insisting on its maximum proposed transfer of Pillar 1 money to Pillar 2, resulting in farmers having to do more for the environment to earn maximum payments, a proposal that is not popular in many quarters. All those with an interest in farming should make their voices heard, although the timeline is tight. Comments have to be with DEFRA by November 28 and the Government has to report back to the EU by December 31.

The DEFRA consultation document can be downloaded here.