Estimated Reduction In The Face Value Of SFP Entitlements

The Department of Agriculture and Rural Development today announced a reduction in the face value of SFP entitlements that will be applied in 2014. EU Regulations adopted in December 2013 set out changes that have to be implemented in 2014 prior to the introduction of CAP Reform from 2015. Part of these relate to the fact that from this year, CAP support will be funded from the new 2014-2020 EU budget and so the value of existing SFP entitlements have to be adjusted to align with the available funding. Under the EU budget settlement, the Pillar 1 support budget for 2014-2020 has been reduced to reflect the fact that compulsory modulation, which was previously subtracted from SFP entitlements before payments were made, has been transferred permanently to the EU rural development budget. There has also been a small change to the overall value of the CAP budget. Given these changes, the face value of existing SFP entitlements will now have to be reduced and will now more closely reflect what they are actually worth in terms of payments to farmers. Therefore, the unit face value of all current SFP entitlements held in 2014 will be reduced by approximately 9.25%. However, in practical terms, the actual amount of SFP paid out from 2014 claims will fall by only around 1%. This will also depend on whether financial discipline reductions are required in 2014 to respect the EU CAP budget ceiling. A more precise calculation of the actual reduction will be confirmed later in the year and applied prior to 2014 SFP payments being issued. When this is completed, farmers will be given further information on the new value of the SFP entitlements that they hold. There will be no compulsory or voluntary modulation applied to SFP in 2014.