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Single Farm Payment Scheme
INFORMATION LEAFLET 6 - PART 2
NON-FOOD SET-ASIDE LAND

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Contents

1. Introduction
2. Growing crops for non-food use on set-aside land
3. Management rules for non-food set-aside
4. Permitted end uses for crops grown under contract
5. Perennial and biennial crops
6. Contract
7. Amending the contract
8. Reducing the area under contract
9. Being unable to provide the contract quantity
10. Harvest
11. Representative yield
12. After delivery
13. Payment
14. Eligible crops
15. Permitted end uses for crops which do not require a contract
16. Your responsibilities
Annex 1: Crops that may be sown on set-aside land
Annex 2: End products that are allowed
Annex 3: List of Addresses and Telephone Numbers

1. Introduction

This leaflet explains the rules under the Single Farm Payment Scheme (SFPS) for growing, under contract, any agricultural raw material on set-aside land for manufacturing products not primarily intended for human or animal consumption. The conditions are similar to those for non-food set-aside under the Arable Area Payments Scheme (AAPS). The main changes are:

• Any agricultural raw material can be grown under contract for an end use. See Annex 2.
• Applicants can:
• process all raw materials harvested into biogas;
• use cereals and oilseeds as fuel for heating their agricultural holdings or for producing power or biofuels on the holding. See paragraphs 2.4-2.9.

2. Growing crops for non-food use on set-aside land

2.1 You must have a signed contract with a collector or first processor. The contract must be lodged by the first processor with the Rural Payments Agency (RPA) by 15 May.

2.2 Your Single Farm Payment will be at risk if you fail to do so. You must keep a copy of the contract to send to the area office with your Area Aid Application (AAA). If you cannot show a signed and dated copy of your contract:

• the set-aside land concerned will not be treated as eligible;
• you may lose your set-aside payment and related single farm payments; and
• additional IACS penalties may apply.

2.3 You must contact the RPA if the land referred to is transferred to another IACS applicant.

2.4 You may undertake processing on your holding and can:

(a) use all the cereals or oilseeds falling within CN codes 1201 00 90, 1205 10 90,
1205 90 00, 1206 00 91 and 1206 00 99 harvested:

(i) as a fuel for heating your agricultural holding;

(ii) for the production on your holding of power or biofuels;

(b) process all raw materials harvested on your holding falling within the CN code
2711 29 00 into biogas.

2.5 You must agree in a declaration to use or process the raw material covered by the declaration.

2.6 We need an accurate assessment of the weight delivered. You must keep separate accounts for:

• the raw material used;
• the products and;
• by-products resulting from its processing.

Weighing can be replaced by volumetric measurement in the case of cereals, oilseeds and straw and where the entire plant is used.

2.7 We will check to ensure that the raw material is used directly on your holding or is processed into biogas falling within CN code 2711 29 00.

2.8 Cereals and oilseeds used as in paragraph 2.4(a) must be denatured by dyeing them with a brightly coloured dye. We may authorise the oil produced by processing oilseeds as in paragraph 2.4(a)(ii) to be denatured instead of the oilseeds themselves, providing the denaturing takes place immediately after the seeds are processed into oil and their use is checked.

2.9 If you process on your holding, your declaration must include details as explained in section 6.

3. Management Rules for Non-Food Set-aside

3.1 The normal set-aside management rules do not apply to land growing non-food crops. However, you must:

• follow the other EU rules on set-aside, including those on non-agricultural use of the land (see SFP leaflet 6, Part 1);
• not damage, destroy or remove any relevant features on the land;
• follow the Code of Good Practice 'Prevention of Environmental Pollution from Agricultural Activity' (PEPFAA Code);
• not use more organic wastes and fertilisers than is allowed in line with normal agricultural practice and recommended in the PEPFAA code; and
• follow the obligations under the Common Agricultural Policy Schemes (Cross Compliance) (Scotland) Regulations 2004.

3.2 You must establish a green cover and follow the other set-aside management rules if you destroy the crop before harvest (unless you have a specific written exemption from your local area office).

3.3 You can grow agricultural raw material on set-aside land. The main points are:

• the end use of the materials grown are kept to those listed in Annex 2;
• the non-food end products must have a value greater than all food by-products (including animal feed);
• you must deliver all the crop harvested from your set-aside land to the collector or first processor for non-food use, even if you harvested more than predicted in the contract;
• in the case of crops eligible for intervention the amount you deliver must not be less than the amount forecast in the contract, even if you have to make up any shortfall from other sources; and
• we will not pay you until you have delivered your crop to the collector or first processor and sent form IACS 9 to the area office declaring the details of the delivery.

4. Permitted end uses

4.1 The crop grown must be processed within the EU into a non-food product listed in Annex 2.

5. Perennial and biennial crops

5.1 You can grow perennial or biennial crops as a non-food set-aside crop as long as they are intended for a use listed in Annex 2. You must leave the crop in the ground and claim it as a non-food set-aside crop each year for the length of the contract. If you do not do this you will break the terms of the contract. You would have to re-sow the non-food crop and complete a new contract that must be lodged by the dates due for the year the crop is sown, i.e. if you sow a crop of Roman camomile in April 2005, your contract must be ready and lodged by 15 May 2005.

The contract must show the number of years the crop is to stay as non-food set-aside. Contracts for multi-annual harvesting can come into force each year as long as this is included in the contract. For further information contact the RPA.

6. The contract

6.1 You are responsible for providing a valid contract containing the following:

• Your main farm code number;
• The name and address of everyone who has signed the contract;
• How long the contract will last;
• The type of crop and the area sown;
• Any conditions that apply to delivery. For oilseeds include the forecast yield for each hectare and total forecast quantity to be harvested (in tonnes). The forecast yield must fall within the range made available by SEERAD;
• The principal use of the raw material. This must meet the conditions laid down in Articles 145(1) and 163(3) of Commission Regulation (EC) No 1973/2004 as explained in paragraph 4.1;
• An undertaking from you to deliver all the harvested crop to the collector or first processor. The collector or first processor must take delivery of all of the crop and use the same amount of material within the EU to make an end product listed in Annex 2;
• The forecast quantity of by-products which are not destined for people or animals to eat. This only applies to contracts relating to rapeseed, colza, sunflower seeds or soya beans falling under CN codes ex 1205 00 90, 1206 00 90 or 1201 00 90.

The quantities will be calculated by the following ratios:

(a) 100 kilograms of rapeseed and/or colza seed covered by CN codes 1205 10 90 or
1205 90 00 shall be deemed equivalent to 56 kilograms of by-products;

(b) 100 kilograms of sunflower seed covered by CN codes 1206 00 91 or 1206 00 99 shall be deemed equivalent to 56 kilograms of by-products;

(c) 100 kilograms of soya beans covered by CN code 1201 00 90 shall be deemed equivalent to 78 kilograms of by-products.

6.2 If the representative yield for your crop is set at a higher level than in your contract, you must still deliver at least the representative yield.

7. Amending the contract

7.1 Contracts may be amended or cancelled at any time as long as everyone who signed it agrees. The contract can be amended up to and including the final date for amending the AAA. Collectors and first processors must send a copy of the amended or cancelled contract to the RPA by that date. The security lodged with the RPA will be adjusted in line with any amendment.

7.2 If the contract is to be amended or cancelled after you have put forward your AAA but before the final date for amending it, you must tell the area office in writing. The collector or first processor must tell the RPA to ensure that the necessary checks can be made.

You should give at least 10 days notice before the amendment or cancellation.

7.3 A contract can be amended or cancelled after the deadline only if you cannot provide all or part of the crop covered. In this case you must follow the requirements set out in paragraphs 9.1-9.3.

8. Reducing the area under contract

8.1 If you amend your contract, you should do one of the following:

• If you amend your contract before 15 January 2005 and the contract has been lodged, you should inform the RPA;
• If you amend your contract on or after 15 January 2005 and the land is going to stay in set-aside, you must inform your local area office and the RPA in writing;
• If you amend your contract on or after 15 January 2005 but before you have lodged your IACS application, and if the land is not to stay in set-aside, you must inform the RPA;
• If you amend your contract on or after 15 January 2005 but after you have lodged your IACS application, whether or not the land is to stay in set-aside, you must inform the area office in writing.

9. Being unable to provide the contract quantity

9.1 If it becomes clear before harvest that you cannot provide all of the crop set out in the contract we advise you to:

• amend your contract after consulting your collector or first processor;
• inform your local area office and the RPA, in writing.

If the area office agrees to reduce the raw material to be produced, you and the collector or first processor named on the contract must send form NFC7 to the RPA along with your IACS 9. Please note any amendment to your contract must have the written approval of your local area office. Once received it should be sent to your collector/first processor who will ask you to complete an NFC7 to be sent with the approval to the RPA. The RPA will not consider your amendments without the written approval.

9.2 If you fail to deliver the representative yield applied to your crop the area office must be informed in writing. A shortfall of up to 10% may be allowed in exceptional circumstances. The area office can consider a further shortfall if there is a valid reason, but only if your contract has been amended to allow a smaller amount than in the original contract (see paragraph 9.1). If you have followed the rules of the scheme in all other respects you can make up the shortfall from raw material obtained from elsewhere.

9.3 Your set-aside will be reduced by an amount equivalent to the percentage shortfall of the crop if the raw material for the crops grown is not delivered. IACS penalties will also apply. You can avoid penalties if the shortfall is made up from raw material obtained from elsewhere. You must tell your collector or first processor immediately if you choose this option. They must inform the RPA that the contract is not yet complete.

10. Harvest

10.1 You must deliver the entire crop to the collector or first processor. Delivery may take place on the farm if the collector or first processor takes full legal responsibility for the crop at that stage. The crop must be kept separate from any other harvested material at all times. We need an accurate assessment of the weight delivered. This may be done by using volumetric assessment, although not for those crops that need to meet a representative yield requirement. The crop must be kept separate from other crops until an accurate weight is confirmed on a weighbridge approved by the local authority if using volumetric assessment.

11. Representative yield

11.1 Under EU rules, the UK must set up representative yields for crops. As well as delivering the entire crop harvested to collectors or first processors, you must ensure that this delivery equals at least the representative yield that is appropriate to the crop. We will set the representative yields and will base them on a standard quality. We will send details of these yields to each non-food set-aside grower.

12. After delivery

12.1 You must send a delivery declaration (IACS 9) form to your local area office declaring the total quantity harvested (by species) and confirming who has taken delivery of the crop. You must use a separate IACS 9 for each contract. Local area offices will send IACS 9s to all non-food set-aside growers. Please remember that it is your responsibility to get and fill in an IACS 9. If you do not receive your IACS 9, please contact your local area office. If you send your IACS 9 in late, a penalty may apply.

13. Payment

13.1 We will pay aid on non-food set-aside land at the normal set-aside entitlement rate. We cannot make the payments until your local area office has received the delivery declaration form (IACS 9) and the collector or first processor has met various commitments including confirming to the RPA that they have received the entire crop by using form NFC 2. Penalties may apply to you and the collector or first processor if the forms are late. It is important that you send in your delivery declaration form by
31 January 2006. If you fail to do this, it will result in delays in making any set-aside payment due. You must tell your collector or first processor when the final load of any contract has been delivered.

Crops with no food or animal-feed use listed in Annex 1

14. Eligible crops

14.1 You can grow crops on set-aside land which have no food or animal-feed use under less strict controls. They include short-rotation coppice (SRC) and miscanthus, and are listed in Annex 1. If you intend to grow SRC on your set-aside land, you should site your
set-aside land so the coppice fits into the landscape.

14.2 You cannot receive any other EU-financed aid on non-food set-aside crops. Under the Single Farm Payment Scheme, grants may be paid for energy crops (miscanthus and SRC). This depends on energy crops being included in the Rural Development Plan and on whether national funds are available. These payments will not affect the eligibility for the set-aside payment.

15. Permitted end uses

15.1 The permitted end uses are set out in Annex 2.

16. Your responsibilities

16.1 You do not need to have a contract before planting an eligible crop listed in Annex 1, you also do not need to use form IACS 9. When you submit your AAA, you need to give a written undertaking that the crop is intended for an appropriate non-food use and that you understand that penalties will apply if you breach that undertaking. There will be no penalties if you cannot find a market for the crop, as long as you do not use it for food or feed.

Annex 1: Crops that may be sown on set-aside land as long as they are intended for manufacturing the products listed in Annex 2 or for your direct use

In this table, an 'ex' in front of a CN code means that you are allowed to grow only the plant listed beside the code and not all the plants that fall under the code.

CN code Brief description

Ex 0602 90 41 Short-rotation forest trees with a harvest cycle of 20 years or less.

Ex 0602 90 49 Trees, shrubs and bushes producing plant material covered by CN code 1211 and by chapter 14 of the Combined Nomenclature, excluding all those that can be used for human or animal consumption.

Ex 0602 90 51 Outdoor multi-annual plants (for example, miscanthus sinensis), other than those that can be used for human or animal consumption, in particular those producing plant material covered by CN code 1211 (other than lavender, lavandin and sage) and by chapter 14 of the Combined Nomenclature.

Ex 0602 90 59 Euphorbia lathyris, Sylibum marianum and Isatis tinctoria.

1211 90 95 Digitalis lanata, Secale cornutum and Hypericum perforatum, excluding plant material that can be used for human or animal consumption.

Annex 2: End products that are allowed, other than for human or animal consumption, made from the raw materials grown on set-aside for non-food purposes and those in Annex 1

• All products falling within chapters 25 to 99 of the Combined Nomenclature.
• All products falling within chapter 15 of the Combined Nomenclature and intended for uses other than for human or animal consumption.
• Products covered by CN code 2207 20 00 and intended for direct use in motor fuel or for processing for use in motor fuel.
• Packaging material covered by CN codes ex 1904 10 and ex 1905 90 90, as long as we have proof that the products have been used for non-food purposes in line with Article 158(4) of Commission Regulation (EC) Number 1973/2004.
• Mushroom spawn covered by CN code 0602 91 10.
• Lac, natural gums, resins, gum resins and balsams covered by CN code 1301.
• Saps and extracts of opium covered by CN code 1302 11 00.
• Saps and extracts of pyrethrum or of the roots of plants containing rotenone covered by
  CN code 1302 14 00.
• Other mucilages and thickeners covered by CN code 1302 39 00.
• All agricultural products listed in Article 146(1) of Commission Regulation (EC) No 1973/2004 and products taken from them by an intermediary process and used as fuel for producing energy.
• All products listed in Article 146(1) of Commission Regulation (EC) No 1973/2004 and products taken from them and intended for energy purposes.
• Miscanthus sinensis falling within CN code 0602 90 51, shredded and intended for use as horse litter, mulch, or additives to improve compost and litter for drying and cleaning plants as well as this raw material or its fibber used as materials for construction.
• All products referred to in Commission Regulation (EEC) Number 1722/93, as last amended by Regulation (EC) Number 216/2004, as long as they are not obtained from cereals or potatoes grown on set-aside land and they do not contain products taken from cereals or potatoes grown on set-aside land.
• All products referred to in Council Regulation (EC) Number 1260/2001, as last amended by Commission Regulation (EC) Number 30/2004, as long as they are not obtained from sugar beet cultivated on land set aside, and that they do not contain products taken from sugar beet grown on land set aside.

ANNEX 3: LIST OF ADDRESSES AND TELEPHONE NUMBERS

AYR
SEERAD
Russell House
King Street
AYR
KA8 OBE
Tel No: (01292) 610188
Fax No: (01292) 611483
email: seerad.ayr@scotland.gsi.gov.uk

BENBECULA
SEERAD
Balivanich
Isle of Benbecula
HS7 5LA
Tel No: (01870) 602346
Fax No: (01870) 602077
email: seerad.benbecula@scotland.gsi.gov.uk

DUMFRIES
SEERAD
Government Buildings
161 Brooms Road
DUMFRIES
DG1 3ES
Tel No: (01387) 214400
Fax No: (01387) 267116
email: seerad.dumfries@scotland.gsi.gov.uk

ELGIN
SEERAD
32 Reidhaven Street
ELGIN
IV30 1QH
Tel No: (01343) 547514
Fax No: (01343) 552312
email: seerad.elgin@scotland.gsi.gov.uk

GALASHIELS
SEERAD
Cotgreen Road
Tweedbank
GALASHIELS
TD1 3SG
Tel No: (01896) 758333
Fax No: (01896) 892424
email: seerad.galashiels@scotland.gsi.gov.uk

HAMILTON
SEERAD
Cadzow Court
3 WelIhall Road
HAMILTON
ML3 9BG
Tel No: (01698) 281166
Fax No: (01698)285277
email: seerad.hamilton@scotland.gsi.gov.uk

INVERNESS
SEERAD
Longman House
28 Longman Road
INVERNESS
IV1 1SF
Tel No: (01463) 234141
Fax No: (01463) 714697
email: seerad.inverness@scotland.gsi.gov.uk

INVERURIE (Thainstone)
SEERAD
Thainstone Court
INVERURIE
AB51 5YA
Tel No: (01467) 626222
Fax No: (01467) 626217
email: seerad.inverurie@scotland.gsi.gov.uk

KIRKWALL
SEERAD
Government Buildings
Tankerness Lane
KIRKWALL
KW15 lAG
Tel No: (01856) 875444
Fax No: (01856) 873309
email: seerad.kirkwall@scotland.gsi.gov.uk

LAIRG
SEERAD
Ord Croft
LAIRG
IV27 4AZ
Tel No: (01549)402167
Fax No: (01549) 402117
email: seerad.lairg@scotland.gsi.gov.uk

LERWICK
SEERAD
Charlotte House
Commercial Road
LERWICK
ZEl 0HF
Tel No: (01595) 695054
Fax No: (01595) 694254
email: seerad.lerwick@scotland.gsi.gov.uk

OBAN
SEERAD
Cameron House
Albany Street
OBAN
PA34 4AE
Tel No: (01631) 563071
Fax No: (01631)566756
email: seerad.oban@scotland.gsi.gov.uk

PERTH
SEERAD
Strathearn House
Broxden Business Park
Lamberkine Drive
PERTH
PH1 1RX
Tel No: (01738) 602000
Fax No: (01738) 602001
email: seerad.perth@scotland.gsi.gov.uk

PORTREE
SEERAD
Estates Office
PORTREE
IV51 9DH
Tel No: (01478)612516
Fax No:(01478)613128
email: seerad.portree@scotland.gsi.gov.uk

STORNOWAY
SEERAD
10 Keith Street
STORNOWAY
HS1 2QG
Tel No: (01851) 702392
Fax No: (01851)705793
email: seerad.stornoway@scotland.gsi.gov.uk

THURSO
SEERAD
Strathbeg House
Clarence Street
THURSO
KW14 7JS
Tel No: (01847)893104
Fax No: (01847)895983
email: seerad.thurso@scotland.gsi.gov.uk

HEADQUARTERS
SEERAD
CAP REFORM SECTION
J1 SPUR
SAUGHTON HOUSE
BROOMHOUSE DRIVE
EDINBURGH EH11 3XD
Tel No: (0131) 244-4488