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Land Management Contracts
THE LMC MENU SCHEME 2005

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Sustainable Prosperous Agriculture

Background

CAP Reform provides the opportunity to introduce Land Management Contracts (LMCs) in Scotland. Their introduction will contribute to a sustainable, prosperous agriculture sector which plays a key role in rural development and to achieving high standards of land stewardship. LMCs are an important means of delivering the objectives of "A Forward Strategy for Scottish Agriculture".

The LMC concept has been developed with stakeholders and has widespread support across the range of interests. It is a whole farm system of support, which makes payments for the delivery of environmental, social and economic benefits. This focus on delivering public goods for public funding has increased in importance following CAP Reform. The LMC concept has three tiers.

Tier 1: Single Farm Payment and Cross Compliance

Securing a basic level of environmental protection, food safety and animal welfare.

Tier 2: LMC Menu Scheme

Delivering widespread benefits leading to economic, social and environmental improvement.

Tier 3: Under Development for 2007

Will deliver tailored benefits leading to economic, social and environmental enhancement.

The Menu Scheme

The Menu Scheme is being introduced for the first time in 2005, alongside the new Single Farm Payment Scheme. The menu has been designed to provide a range of measures suited to the diversity of agricultural activity and land types throughout Scotland.

There are many options to choose from. Farmers and crofters can choose which activities they wish to carry out from the menu, depending on what suits their individual circumstances, plans for future business development and the eligibility requirements of individual measures. Some are one-offs, such as training and farm visits, others have a 5-year commitment such as the agri-environment measures and the animal health and welfare programme.

Who can apply?

All land managers in Scotland can apply to the Menu Scheme on a non-competitive basis. This means that there is no prior approval process.

The only requirement is that you are registered on the SEERAD Integrated Administration and Control System (IACS). You do not have to be in an IACS scheme (e.g. the Single Farm Payment Scheme). You can still participate if you are already in an agri-environment scheme (e.g. the Rural Stewardship Scheme). If that is the case, you won't be able to apply for some of the menu options on land which is already entered into an existing agri-environment scheme. The Menu Scheme only applies to land in Scotland.

When, and how, do I apply?

You must complete both the new IACS Single Application Form (SAF) with details of all the land you farm and the new Menu Scheme Application Form and return both forms by the closing date of 16 May 2005. The information entered on the Single Application Form is required to calculate your allowance. The intention is to integrate the application process in future years.

The Menu Scheme Guidance Note gives guidance on completing the application form and sets out the detailed information you will need to help you decide which measures to undertake. The IACS Explanatory Booklet gives guidance on completing the Single Application Form. Copies will be available towards the end of March from SEERAD Area Offices or www.scotland.gov.uk/agriculture.

How much money will I get?

Each year, you will have a maximum allowance which you can receive in return for selecting, and carrying out, options from the menu. Your maximum allowance is based on the total area of land which you declare in the IACS Single Application Form each year.

For 2005, you will calculate your maximum allowance as shown below:

• first 10 hectares at £75 per hectare;

• next 90 at £30 per hectare;

• next 900 at £1 per hectare;

• any hectares over 1000 at £0.10 per hectare.

This will give you the total sum you can receive for carrying out menu options. Your maximum allowance is not the amount of money you will be paid; it is the amount of money available to you should you commit to carrying out specific options.

For the 5-year commitments the relevant amount will be deducted from your maximum allowance in the following 4 years.

When do I get paid?

Payments will be made once a year for all the measures carried out. You will be sent a claim form in January 2006. This will have to be completed and returned by the end of March, along with original receipted invoices and supporting evidence for most of the options. Compliance with the agri-environment measures will be verified through inspections.

Payments will be made from April provided the claim form has been returned with supporting documentation.

What options are available?

You can decide which options you will carry out, up to the value of your maximum annual allowance, as long as you meet the eligibility requirements for the chosen options. The options are listed below. A description of each, and their requirements, is set out in detail in the Menu Scheme Guidance Note.

Frequently Asked Questions

1. When does the Menu Scheme start?
The Menu Scheme will be introduced in 2005. Applications have to be submitted by 16 May 2005.
2. What will happen if I forget to submit my application?
You will not be able to apply for any options that year. There is no provision for late applications.
3. I have no single farm payment entitlement. Can I still apply for Menu Scheme options?
Yes, as long as you complete both the Single Application Form (SAF) with details of the land you farm and the Menu Scheme Application Form. You must submit both forms by 16 May 2005.
4. Can I claim electronically?
Not in 2005, but it will be possible in subsequent years.
5. What happens if I don't complete all the options I put on my Application Form?
You will not be paid for any options you select in the Application Form if you do not submit the receipted invoices and supporting documents with your claim form. Unless force majeure applies, failure to carry out agri-environment options will constitute a breach of Scheme conditions and you will not be paid for that option for the year(s) in question. Depending on the circumstances of the breach, a penalty may be applied.
6. What happens if I sell or buy land after 16 May? Does my allowance change?
No, your allowance is based on the amount of land you declared on the IACS Single Application Form submitted by 16 May 2005. For land under agri-environment measures, which is sold during the 5-year period, the purchaser will have to confirm that the 5-year commitment will be continued within 3 months of the transfer, or the vendor will have to repay any money received for the options.
7. Does my common grazing allocation count towards my maximum annual allowance?
Yes, but you cannot carry out agri-environment options on the common grazing. You are encouraged to apply for Rural Stewardship Scheme options on the common grazing.
8. What happens if the Menu Scheme rules are breached?
You may have to repay some or all of the payments we have made to you plus interest. We may also apply a financial penalty. The repayment may be waived if you can demonstrate force majeure within 10 days of being able to do so.
9. How do I appeal against a decision?
If you feel we have made a wrong decision on your claim, you may appeal using the Scottish Executive's EU Agricultural Schemes Appeals procedure.
10. What will be in Tier 3 and when will it be introduced?

We intend to introduce the full LMC model including Tier 3 in 2007. Tier 3 is likely to include existing agri-environment and forestry schemes and work is in hand to develop further Tier 3 measures which lead to a wider range of benefits. Access to Tier 3 will be subject to assessment and approval to deliver more targeted benefits.

This document is also available on the Scottish Executive website: www.scotland.gov.uk