The Rural Payments Agency have announced that the '10 Month Rule' for claiming the Single Farm Payment is to be replaced by a single date.

Previously farmers had to have a given parcel of land at their disposal for a period of 10 consecutive months in order to claim Single Farm Payment on that land. For the 2008 scheme year and onwards, the 10 month period has been replaced by a single date; May 15th. Broadly speaking, whoever is deemed to be in occupation on May 15th may claim the Single Farm Payment in respect of that land. The existing rules regarding as to what constitutes being in occupation' and at your disposal' continue to apply.

Justin Lascelles from Savills Exeter office says that the new rule will make co-ordinating transfers of land much simpler, particularly for those who take in land on short term agreements from several different parties. Previously care had to be taken to ensure that each party had the necessary 10 months in occupation and that suitable start dates were chosen to reflect timing of cropping, particularly as each claimant was allowed only two start dates. The new rule will allow transfers to take place at any time, provided that the land is occupied on May 15th by the person claiming payment in that scheme year.

However, the new system is not without a sting in the tail according to Justin Lascelles; whoever claims the payment in each scheme year is responsible for cross-complying during the calendar year in which the claim is made, i.e. 1st January to 31st December. In 2008 this will apply from 1st April rather than 1st January. For example: a farmer taking in land between 1st April and 15th May 2008 will be held responsible for breaches of cross compliance between 1st April and 31st December 2008, regardless of when his actually occupation commenced. Similarly anyone transferring land out on which they have already made a claim will be responsible for cross compliance on that land until the end of the calendar year.

Any contract for a permanent transfer of land will need drafting such that the interests of the current SFP claimant for that land are protected; either to ensure that the new owner is not penalised for breaches occurring before transfer, or the old owner for those occurring after transfer, depending on the situation.

The same applies to tenancy agreements, regardless of their length; new agreements will need to protect the interest of both tenant and landlord. This will be especially important where there is the possibility that the land will be immediately re-let to a different tenant rather than reverting back to the landlord, as the incoming and outgoing tenants will have no contractual relationship governing the liability for any loss should a breach be discovered.

The implementation of these changes should not affect those in long term occupation; any problems can be addressed closer to the end of the tenancy or when sale is considered. However contracts for the transfer of land which are currently being drafted may need revision. Professional advice on each individual case should be sought; indemnity clauses may need to be amended in light of the changes, with suitable insurance policies potentially being the way forward in some cases. Early entry or holdover agreements will also require careful drafting in order to have the desired effect.