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Annex B

Agri-Environment Payment Rates which, on an individual basis, breach the Annual Ceiling for Co-Financed Payments for the land type specified in the Annex to Council Regulation 1698/2005

Rural Stewardship Scheme

Option: Creation & Management of Early And Late Cover for Corncrakes

Payment Rate: £738.00 EC Ceiling for Specialised Perennial Crops: £613.57 (€900)

Breakdown of Payment Rate

Additional costs: equivalent to loss of grazings @ 2.5 ewes/ha and 7 months (30.5 wks) use of rented grazings with carrying capacity 7.5 ewes/ha + wormer/haulage & supervision (at 1 hr/wk per hectare rented grazings @ £5.75/hr) and 75% of the annual charge to service capital and interest (6.5%) required to finance the creation of iris beds; assuming no cutting, fertiliser or sprays.

Calculation

Payment Rate: £738.00 per hectare

Rural Stewardship Scheme

Option: Management of Grass Margins or Beetlebanks

Payment Rate for pre- RSS 2003 entrants): £736.00 per hectare

EC Ceiling for Specialised Perennial Crops: £613.57 (€900)

Breakdown of Payment Rate

Loss of crop production from area + cost of grass seed sown on strip and £75/ha considered necessary to cover management activities in general accordance with Game Conservation Trust Guidelines. Income foregone equivalent to output from av. non- LFA Spring Barley, Winter Barley & Winter Wheat less 8% av. Tenants Capital for the 3 enterprises.

Gross Margins
WB £713, SB £565, WW £673
Income Foregone =
£650 - 8% av. Tenants Capital (£68.80)
= £581.20
Additional Costs:
Grass seed @ £80/ha
Management activities on strip @ £75/ha
Total: £736.20

Payment Rate: £736.00 per hectare

Rural Stewardship Scheme

Option: Management of Grass Margins or Beetlebanks

Payment Rate (for RSS 2003 entrants and later): £619.00

EC Ceiling for Specialised Perennial Crops: £613.57 (€900)

Breakdown of Payment Rate

Income foregone: equivalent to 100% output from average mid-yielding Spring Barley, Winter Barley & Winter Wheat less 6.68% interest on average Tenant's Capital*. * Tenant's Capital for 'General Cropping Farms' and 'Cereal Farms' - average of 2001/02 and 2002/03. Additional Costs: Cost of grass seed needed to establish grass strip and £75/ha considered necessary to cover management activities. 19.88% incentive applied.

Calculation

Payment Rate: £619.00 per hectare

Rural Stewardship Scheme

Option: Management of Extended Hedge

Payment Rate (for pre- RSS 2003 entrants): £500.00 per hectare

EC Ceiling for Other land Use: £306.78 (€450)

Breakdown of Payment Rate

Strip 3 m from centre line of hedge. Income foregone equivalent to output from av. Arable(non- LFA Spring Barley, Winter Barley)/lowground suckler unit less 8% av. Tenants Capital for the 3 enterprises

Gross Margins
WB £713, SB £565, Suckler herd (Spr) £493
100% Income Foregone =
£590 - 8% av. Tenants Capital (£97.00) = £493.00

Payment Rate: £500.00 per hectare

Rural Stewardship Scheme

Option: Management of Extended Hedge

Payment Rate (for RSS 2003 entrants and later): £0.41 per running metre

EC Ceiling for Other land Use: £306.78 (€450)

Breakdown of Payment Rate

For each one hectare of 3 metre-wide managed strip (3m from centreline of hedge), there will be 100% loss of output from average Arable (non- LFA mid-yielding Spring Barley, Winter Barley) & Upland/Lowground Suckler Cows - mainly silage diets, Dairy Cow - silage ad lib (yield 7,000 litres) and Crossbred Breeding Ewes - Finished/store lamb production (Mainly silage diets) over the productive 75% of 0.33 hectare and 100% loss over the fully productive 0.67 hectare. Additional costs are equivalent to increased contractor's charges spread over 5 years - given reduced work rate using circular saw rather than flail attachment on hedge cutter, and annual restoration costs - 15% hedgerow restored each year; 1.33 metres restored per hour at a labour cost of £6.00 per hour. Assumes that only new hedge planting/gapping up carried out in the 1 ^st scheme year can be claimed under the hedge planting/coppicing/laying capital option. *saved Tenant's Capital for 'General Cropping Farms' and 'Mixed Farms' average of 2001/03.

Calculation

Ref: SAC Farm Management Handbook 2004/2005

Payment Rate: £0.41 per running metre

Rural Stewardship Scheme

Option: Management of Hedgerows

Payment Rate (for pre- RSS 2003 entrants): £5,000 per hectare

EC Ceiling for Other land Use: £306.78 (€450)

Breakdown of Payment Rate

Equivalent to the cost of carrying out a suite of additional management practices within a 2-metre wide strip - 1 metre on either side of the centre-line of the hedge, assuming additional cost is £1.00 per running metre of hedge.

Calculation :

Total Additional Costs:

Additional management practices £1 @ running metre

2.00 sq metre managed @ running metre
£1 @ 2.00 sq metre managed

Payment Rate: £5,000.00 per hectare

Rural Stewardship Scheme

Option: Management of Hedgerows

Payment Rate (for RSS 2003 entrants and later): £0.85 per running metre

EC Ceiling for Other land Use: £306.78 (€450)

Breakdown of Payment Rate

Income Foregone: lost production following the cessation of agricultural production from a strip of land alongside hedge. Equivalent to a 100% reduction in average Upland/Lowground Suckler Cows - mainly silage diets, Dairy Cow - silage ad lib (yield 7,000 litres) and Crossbred Breeding Ewes - Finished/store lamb production (Mainly silage diets) over the productive 75% of the strip. Additional costs: equivalent to increased contractor's charges spread over 5 years - given reduced work rate using circular saw rather than flail attachment on hedge cutter, and annual restoration costs - 15% hedgerow restored each year; 1.33 metres restored per hour at a labour cost of £6.00 per hour. Assumes that only new hedge planting/gapping up carried out in the 1st scheme year can be claimed under the hedge planting/coppicing/laying capital option. 15% incentive payment included.

Calculation

** only new planting/gapping up in year 1 can be claimed under the hedge planting/coppicing/laying capital option.

Equivalent to: 0.85 pence per running metre.

Ref: SAC Farm Management Handbook 2004/2005

Payment Rate: £0.85 per running metre

Rural Stewardship Scheme

Option: Management of Site of Archaeological or Historic Interest

Payment Rate: £80.00 per 0.25 hectare or part thereof up to 1.5 hectares and £80.00 per hectare thereafter.

EC Ceiling for Other land Use: £306.78 (€450)

Breakdown of Payment Rate

Additional costs: based upon average cost of wide range of possible management prescriptions attached to these sites.

The payment for these sites has to be arrived at by a rather arbitrary basis due to the wide range of management which can attach to these sites. The current rates have neither prevented this optional management being taken up nor led to excessive uptake. It is therefore concluded that the rates are pitched at the right level.

The annual management payment is intended to cover costs associated with such measures as: changing the grazing regime on the site, effecting erosion repairs and control, scrub and bracken control, maintaining an uncultivated buffer zone and re-routing tracks or hard-standings

Payment Rate: £80.00 per 0.25 hectare or part thereof up to 1.5 hectares and £80.00 per hectare thereafter.

Countryside Premium Scheme

Option: Creation of Extended hedge

Payment Rate: £125.00 per 0.25 hectare or part thereof

EC Ceiling for Other land Use: £306.78 (€450)

Breakdown of Payment Rate

The payment rate is based on the average gross margin loss from arable and improved grassland:-

Therefore 100% income foregone = £582 - £58 = £524

Additional costs: Nil

Payment Rate: £125 per hectare or part thereof.

Countryside Premium Scheme

Option: Creation of Grass Margins or Beetlebanks

Payment Rate: £184.00 per 0.25 hectare or part thereof

EC Ceiling for Other land Use: £306.78 (€450)

Breakdown of Payment Rate

Payment is based on the loss of crop production from the area plus the cost of grass seed to establish the grass strip. Production loss is calculated by averaging the 3 commonist cereal gross margins i.e. mid-yielding non- LFA winter wheat, spring barley and winter barley and reducing the resultant average gross margin by 8% of the average tenants' capital for the 3 types of cereals.

Income Foregone

Income foregone: £738.00 - £17.00 = £721.00/ha
Additional Costs: Grass seed equal £79.00/ha
Total: £800.00/ha

Payment Rate: £184.00 per 0.25 hectare or part thereof

Central Borders Environmentally Sensitive area ( ESA) Scheme

Option: Management of Extended Hedgerows (Arable)

Payment Rate: £81.00 per 0.25 hectare or part thereof

EC Ceiling for Other land Use: £306.78 (€450)

Breakdown of Payment Rate

It is assumed there will be a 2 metre wide margin with total loss of production and AAPS. It is also assumed there will be a further 6 metre strip where production will be halved due to lack of fertiliser and sprays.

It is assumed the average crop will be winter barley with a mild yield and the appropriate SAC standard figures have been used. The gross margin for this crop is £755/ha including AAPS, grain output is £600, fertiliser and sprays £120 + 62.

For each hectare of the 8 metre wide margin therefore there will be a complete crop and AAPS loss on one-quarter hectare which equals £150 + £60 and there will be a 50% grain loss on the remaining three-quarters of a hectare which equates to £300 x 0.75 = £225.

The overall loss for the whole hectare is therefore £150 + £60 + £ 225 = £435.

In addition to this loss there will be management costs for vermin control, weed control and cutting the strip post-harvest. These costs are assumed to be £33/ha (10% increase over 4 years).

There will be costs saved of £120 for fertiliser and £62 for sprays on the whole area and £14 for seed in the non-cropped strip.

Total costs are therefore £435 + £33 = £468 less savings of £196.

This results in a total payment rate of £272/ha + 20% incentive = £81 per 0.25 hectare.

Payment Rate: £81.00 per 0.25 hectare or part thereof

Organic Aid Scheme: Maintenance Payments 2004

EC Ceiling for Other Land Use: £306.78 (€450)

EC Ceiling for Other Land Use: £306.78 (€450)

Land Management Contract Menu Scheme (Tier 2) (now re-named the Rural Development Contract Land Managers' Options): Management of Linear Features (Existing Measure)

Rural Development Contract Land Managers' Options: Proposed measures under new SRDP

Management of Linear Features

Hedgerow

EC Ceiling for Other Land Use: £306.78 (€450)

Proposed Rural Development Contract Rural Priorities under new SRDP

Management Of Extended Hedge (trimmed once in 3 years)

assuming a 1 hectare managed strip will be 3 metres wide and 3,333.33 metres long

Payment Rate: £0.54 per metre

EC Ceiling for Other Land Use: £306.78 (€450)

Management of Hedgerows (trimmed once in 2 years)

Payment Rate: £0.93 per metre

EC Ceiling for Other Land Use: £306.78 (€450)

Management of Mown Grassland for Corncrakes

Assuming this option will generally be adopted within the Corncrake Core Areas.
Average hay yield (extensive crop): 5 tonnes/hectare
Average hay price (Outer Hebrides 2006): £140 per tonne

Payment Rate: £691.00/ha EC Ceiling for Specialised Perennial Crops: £613.57 (€900)

Creation and Management of Early and Late Cover for Corncrakes

Payment Rate: £800.00/ha EC Ceiling for Specialised Perennial Crops: £613.57 (€900)

Organic Farming Conversion and Organic Farming Maintenance

A minimum of £400 per IACS business per management option (conversion or maintenance) applies.

EC Ceiling for Other Land Use: £306.78 (€450)

Rural Development Contract Rural Priorities: Capital Items

Basis of Calculation

0.06 ha clearance output in one man day. Labour costs of £110 (including Mechanical saw of chainsaw/clearing saw type) per man day = £1800

Labour costs of burning material of £90 per day at 0.1ha output per day = £900

Total Cost of initial operation = £2700

Maintenance of treating regrowth and maintaining free infestation over 5 years = 30%

Overall Total Cost = £2700/ha + £800/ha = £3500/ha

EC Ceiling for Specialised Perennial Crops: £613.57 (€900)

Basis of Calculation

Machine plus driver = £600/man day for 1ha completed output

Labour costs of burning material & assisting of £100 per day at 2ha output per day = £50

Total Cost of initial operation = £650

Maintenance of treating regrowth and maintaining free infestation over 5 years = 30%

Overall Total Cost = £650/ha + £200/ha = £850/ha

EC Ceiling for Specialised Perennial Crops: £613.57 (€900)

EC Ceiling for Specialised Perennial Crops: £613.57 (€900)

Basis of the calculations

A: Initial treatment

Standard costs proposed

These are derived from the calculations which follow.

Definitions of categories:

Light scrub

This rate will be appropriate where the scrub is young and so would be appropriate for fairly recent scrub encroachment, or regrowth which had not been tackled from previous control efforts. It is likely that you would be easily be able to walk through it. Scrub would be cut by a scrubcutter/clearing saw. Scrub stems would therefore be typically no more than 7.5cm/3" thick. No stump treatment assumed. Chemical treatment could be appropriate for scrub up to 1.2m/ 4' high, generally older than 1-2 years old.

Intermediate scrub

This category is for those areas of scrub which do not easily sit in either of the light or heavy categories. It is likely that you would just be able to walk though it. Scrub would have to be cut by chainsaw.

Heavy scrub

This rate will be appropriate where the scrub is old, very difficult to walk through, and would require significant effort to clear. Scrub would have to be cut by chainsaw. If removal of the felled material is required, it would require cutting the felled material into sections for ease of removal. This rate would also be appropriate for dense gorse and hawthorn, to reflect the associated difficulties of handling this type of scrub.

B: Follow up treatments

It is assumed that:

• All scrub will need a follow up treatment over the whole area at least once within a 5 year agreement.
• 50% of the scrub may require one further treatment.
• Follow up treatment cost element could therefore amount to £200 plus 50% of £200 per ha = £300 per ha.

C: Total payments in year 1

SNH Scrub Removal Calculations

Further details of East Scotland Grassland Scheme scrub control rates

EC Ceiling for Specialised Perennial Crops: £613.57 (€900)

Basis of the calculations

The operations required are:

¹ 20kg/ha is considered appropriate for most circumstances. A lower rate may be approriate for ideal establishment conditions (low fertility and few weeds), and a higher rate will only only necessary for difficult situations.

² This is the cost of Scotia Seeds' Species-rich grassland mix 2006, for agri-environment schemes, currently the cheapest source of Scottish origin wildflower seed. The mixture does not include Scottish origin grass seed - such a mixture would be considerably more expensive at £51/kg.

³ Source: SAC Farm Management Handbook, 2005/06. Costs are taken from the Machinery Contractors' Charges.

⁴ Source: The Agricultural Budgeting and Costing Book, May 2006. This is the median cost of General Herbicides for Cereals.

⁵ Source: SAC Farm Management Handbook, 2005/06. Costs are taken from the Machinery Contractors' Charges.

⁶ Source: SAC Farm Management Handbook, 2005/06. Costs are taken from the Machinery Contractors' Charges. This is the cost of sowing grass seed.

⁷ Source: SAC Farm Management Handbook, 2005/06. Costs are taken from the Machinery Contractors' Charges.

⁸ Source: SAC Farm Managent Handbook, 2005/06. Costs are taken from the Machinery Contractors' Charges. This is the cost for a forage harvester. Two cuts per annum are recommended for the first two years in order to control annual arable weeds. Where grazing is absent, two cuts per aunnum are recommended in subsequent years to maintain a short open sward in which small plants can survive and new seedlings can germinate and become established.

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