Cereals, oilseeds and fodder: getting funding
Payments under agricultural policies for farms growing combinable crops, grants for processed fodder and biofuels and the EU cereals intervention scheme.
The UK is one of the largest producers of cereal and oilseed crops in the EU.
Within UK agriculture, cereal crops account for about 15% of total UK agricultural land, but over 65% of total cropping. Cereals such as wheat and barley and oilseeds such as oilseed rape are grown on around 71,000 holdings across the country with the majority grown in the southern and eastern part of England.
This guide covers combinable crop production in the UK - ie all types of crops gathered by use of a combine harvester. It explains the roles of the Department for Environment, Food and Rural Affairs (Defra) and the Rural Payments Agency (RPA). It also includes information on the Single Payment Scheme (SPS), aid for dehydrated fodder, non-food crops and briefly mentions Cross Compliance. Finally, it covers the EU cereals intervention scheme, including how to offer cereals for intervention.
Combinable crops production in the UK
Wheat, barley and oilseed rape are the most important combinable crops grown in the UK and oat production is on the increase. All these cereals are well suited to the UK’s temperate climate. The majority of cereals are sown in the autumn, known as ‘winter cereals’ as the young plants have to survive the winter in the open fields. These cereals are usually higher yielding because of the longer growing period. The remaining cereals are sown in the spring.
Wheat is the most widely grown arable crop in the UK. On average, it covers around two million hectares of land and produces about 15 million tonnes each year. Wheat is a versatile crop and is used mainly for milling into flour for bread and starch - about 40% of annual production - and as an animal feed ingredient - around 50% - with most of the rest being exported. It is found in numerous food products, including bread, cakes, biscuits and breakfast cereals.
Barley is grown on around one million hectares and produces an output of around five million tonnes. About 1.7 million tonnes are used in the production of malt - a key ingredient in beer and whisky. The remaining barley is mostly used in animal feeds or exported.
The bright yellow flowers of oilseed rape cover around 0.6 million hectares each year and produce around two million tonnes of seed. The seed is crushed to extract oil, which is used in the food and animal feed industries, with the residue being used as a high protein animal feed ingredient. Oilseed rape is also used for the production of biodiesel.
Oats use around 3% of the total UK cereals area and are mostly sown in the autumn months. About half of the oat crop is milled and used for human consumption - eg breakfast cereals, cheese biscuits and haggis - with the rest being used for animal feed.
Aid for dehydrated fodder
The EU’s aid for dehydrated fodder scheme pays aid to processors who dry and market ‘green fodder’ within guaranteed national quantities and quality requirements. ‘Green fodder’ includes products intended for animal feed such as lucerne, sainfoin, clover, lupins, and vetches.
The aid rate is fixed at €33 per tonne. It is granted for processed fodder, provided that its maximum moisture content is between 11% and 14% and its crude protein content in dry matter is not less than 15% or 45%, depending on the product concerned. You may be entitled to advance payment of €19.80 per tonne or €26.40 per tonne if you have lodged a security of €6.60 per tonne.
For each marketing year - running from 1 April to the following 31 March - a maximum guaranteed quantity (MGQ) of dehydrated or sun-dried fodder applies. If the quantity of dried fodder produced in the European Community exceeds the MGQ for that marketing year, the amount of aid is reduced in those member states whose production has exceeded their guaranteed national quantity.
This scheme applies to all of the following products:
- meal, pellets and other forms of lucerne, sainfoin, clover, lupins and vetches
- other similar artificially heat-dried fodder products
- lucerne, sainfoin, clover and certain other sun-dried and ground pulses
- protein concentrates obtained from lucerne juice and grass juice
- dehydrated products derived from concentrates
If you supplied fodder to processors for drying during the historical reference period between 2000 and 2002, you may be eligible for entitlements under the SPS.
From 1 April 2012, the aid for dehydrated fodder scheme will be fully incorporated into the SPS.
In the UK, the RPA is responsible for administering both the aid for dehydrated fodder scheme and the SPS. For information on how SPS works, see the guide on the Single Payment Scheme (SPS).
The Single Payment Scheme
You can claim payments for land used to grow combinable crops against SPS entitlements. You will need to adhere to Cross Compliance requirements in order to receive the direct payments in full. Most Cross Compliance standards are closely aligned with existing national law and best practice in the farming sector.
For more information about SPS and how it can help your farming business, see the related guide on the Single Payment Scheme (SPS).
EU intervention scheme for cereals
The EU cereals intervention scheme supports cereal prices by setting a guaranteed price for certain cereals - subject to them meeting minimum quality requirements and if their levels of contaminants do not exceed the maximum levels permitted under Community Regulations.
The intervention scheme applies across the EU for common wheat, durum wheat, barley, maize and sorghum.
However, in the UK, intervention schemes are only operated for common wheat and barley, with the latter more usually being taken up. The minimum quantity of either that can be offered for intervention in the UK is 100 tonnes but this amount can be formed by pooling up to four separate lots. Where the goods are to be intervened from in-situ storage - ie on-farm - rather than being delivered to a designated store - the minimum quantity is 5,000 tonnes.
The RPA is responsible for administering the intervention scheme in the UK. Under the scheme, you can offer your grain to RPA between 1 November and 31 May. Subject to the appropriate sampling and inspection being satisfactorily carried out, you will then have to deliver your grain to the nearest intervention centre, or possibly store the grain on your own premises.
If you are a farmer - or trader - with grain of a suitable quality that you wish to offer into intervention, you should contact RPA. The grain will be subject to sampling and inspection on - and possibly before - delivery which will determine whether it meets the regulatory quality rules. You will be responsible for delivering the grain to the nominated intervention store.
As of 1 July 2010, intervention for common wheat takes place at the intervention price of €101.31 per tonne, up to a maximum quantity offered of 3 million tonnes. Once this quantity has been reached, intervention takes place by way of buying-in by tender.
Note that although rice and durum wheat are not normally grown in the UK, quantities of these crops are set to zero - ie their intervention scheme is no longer in operation. The EU Commission does however retain the right to re-open this scheme at times of market disturbance.
How to offer cereals for intervention
Cereals intervention in the UK is limited, and it is generally only grain merchants - or their agents - who actually make use of the system. You must be aware of what you have to do in order to offer your grain.
You must register with the RPA before you can offer your cereals for intervention, by completing form CEPU1 and returning it to them. Download form CEPU1 to offer to sell cereals into intervention from the RPA website (PDF, 70KB).
You can only submit your offer during the buying-in period, which is currently 1 November to 31 May. Your offer will only be accepted by RPA if your cereals are of ‘sound, fair and marketable quality’. They must also meet minimum quality criteria as defined in RPA scheme leaflet IM(C)15. You can download RPA scheme leaflet IM(C)15 from the Agricultural Document Library (ADLib) website (PDF, 856KB).
The intervention price for cereals
When you offer your cereals under the cereals intervention scheme, the price is set at €101.31 per tonne. You will be paid the equivalent in pounds sterling at the current exchange rate.
Sampling and testing, transportation costs and payment calendar
You must allow samples of your cereals to be taken for testing before you will receive any payment. If your samples fail, you can appeal the decision within two days of receiving the results. You will have to pay a fee to appeal and you will be advised of the amount at the time. The cereals intervention section will then arrange for a reference sample to be tested.
Further testing will take place once your cereal has been delivered. The storekeeper will weigh the load and take a representative sample, which is then divided into three subsamples. One sample is tested by the storekeeper, another will be returned to you, your offerer or his representative, and the final subsample is retained at the store as a reference sample.
Tests will be carried out in accordance with the procedures set out in the RPA leaflet. These will confirm whether the cereals meet minimum European standards. Download the RPA’s guide on analytical methods for determination of physical qualities from the Agricultural Document Library (ADLib) website (.PDF, 58K).
RPA will send you delivery instructions for each load, which will include:
- the contract number
- the delivery number
- the location - and communication details - of the intended store for delivery
You or your offerer must arrange and pay for delivery to the store. You must do this in accordance with RPA delivery instructions and the timetable agreed with the storekeeper. RPA will then pay the intake costs if the cereals are purchased.
The offerer is responsible for the cost of transporting the cereals to the storage place at the lowest cost where the distance is equal to or less than 100km. Once this distance has been exceeded, the transport costs over 100 km shall be paid for by RPA.
RPA will pay for additional transport costs except for the first 20km if they change the storage place. However, the transport costs over 100km shall still be paid for by RPA.
You must complete the claim form CEPU11 when the final delivery has been made and you have confirmation of the delivered tonnage on the weighbridge tickets returned from the store. The form should then be posted to the cereals intervention section at RPA. Claims should be sent immediately following receipt of the final weighbridge ticket, so that a takeover certificate may be issued and the total value of the contract calculated. Faxed submissions will not be processed until the hard copy is received.
When RPA is satisfied that the contracted tonnage of cereals has been delivered and a claim has been received, a takeover certificate and a pricing document will be sent to the offerer.
RPA will make arrangements for payment to be made no later than the 65th day after the date of issue of the takeover certificate. As payment is made on the basis of the amount shown in the pricing document, offerers invoices are not required.
For further information on transportation costs and payments, you can download the RPA’s guide on the support buying of cereals from the ADLib website (PDF, 856KB).
Further schemes and funding for farmers who grow combinable crops
Some crops, including oilseeds, beet and wheat are grown for non-food production, eg bio-fuel for transport. Find information on the use of non-food crops on the National Non-Food Crops Centre website.
In addition, vegetable protein-based crops are grown to supply products such as animal feed.
The Protein Crop Premium
The Protein Crop Premium (PCP) scheme helps support farmers growing key protein crops defined as:
- field beans within CN code 0713.50
- peas within CN code 0713.10
- sweet lupins within CN code ex 1209 29 50
The premium is paid at €55.57 per hectare. If the EU Maximum Guaranteed Area of 1.648 million hectares is exceeded, payments may be reduced. You can find information on the PCP scheme on the Rural Payments Agency website.
The PCP scheme operates separately to the SPS. You can claim both schemes together on your SP5 application form, or either scheme individually. For more information, see the guide on the Single Payment Scheme (SPS).
Funding from the Rural Development Programme for England
The Rural Development Programme for England (RDPE) helps farmers and growers run sustainable rural businesses and improve the competitiveness of the agricultural and forestry sectors in England.
Find information in the guide on the Rural Development Programme for England (RDPE).
The RDPE is jointly funded by the EU - through the European Agricultural Fund for Rural Development (EAFRD) - and the UK government. Funds from Common Agricultural Policy schemes can also be transferred into the RDPE as part of a process called ‘voluntary modulation’.
The RDPE is structured around four EU objectives for rural development, called ‘Axes’:
- Axis 1 - improving the competitiveness of the farming and forestry sectors
- Axis 2 - improving the environment and the countryside
- Axis 3 - improving rural quality of life and diversification of the rural economy
- Axis 4 - the Leader approach
Individual measures in each axis set out which farming activities are eligible for funding.
Who to contact
The following organisations offer grants in England under the RDPE:
- Defra for economic and social funding in rural areas under Axis 1 and 3
- Natural England - through Environmental Stewardship schemes under Axis 2
- the Forestry Commission - for forestry funding under Axes 1 and 2
- Local Action Groups (LAGs) through the Leader Approach under Axis 4
From April 2012 RDPE delivery will consist of a single offer, available across the whole of England on consistent lines and with a consistent set of business processes.
For more details, see the guide on Rural Development Programme for England (RDPE).
RPA Dehydrated Fodder and Energy Crops Helpline
01392 266 466
0845 603 7777
RPA Cereals Intervention Helpline
0191 226 5882
Cross Compliance Helpline
0845 345 1302
08459 33 55 77