Title, commencement and interpretation

1.-(1) This Order may be cited as the Agricultural Holdings (Units of Production) Order 1998 and shall come into force on 12th September 1998.

(2) Any reference in this Order to "the Schedule" is a reference to the Schedule to this Order.

(3) Any reference in this Order to a Community instrument is a reference to that instrument and any amendment of such instrument in force on the date this Order is made.

(4) In this Order:

"Council Regulation 805/68" means Council Regulation (EEC) No. 805/68 on the common organisation of the market in beef and veal(2);

"Council Regulation 3013/89" means Council Regulation (EEC) No. 3013/89 on the common organisation of the market in sheepmeat and goatmeat(3);

"Council Regulation 1765/92" means Council Regulation (EEC) No. 1765/92 establishing a support system for producers of certain arable crops(4).

Assessment of productive capacity of land

2.-(1) Paragraphs (2) and (3) of this article have effect for the purpose of the assessment of the productive capacity of a unit of agricultural land, in order to determine whether that unit is a commercial unit of agricultural land within the meaning of subparagraph (1) of paragraph 3 of Schedule 6 to the Agricultural Holdings Act 1986.

(2) Where the land in question is capable, when farmed under competent management, of being used to produce any livestock, crop, fruit, etc., as is mentioned in any of the entries 1 to 7 in column 1 of the Schedule, then-

(a)the unit of production prescribed in relation to that use of the land shall be the unit specified in column 2 of the Schedule opposite to that entry, and

(b)the amount determined, for the period of 12 months beginning with 12th September 1998, as the net annual income from that unit of production in that period shall be the amount specified in column 3 of the Schedule opposite that unit of production.

(3) Where land capable, when farmed under competent management, of producing a net annual income is designated as set aside land, as is mentioned in entry 8 in column 1 of the Schedule, then-

(a)the unit of production prescribed in relation to that use of the land shall be the unit specified in column 2 of the Schedule opposite to that entry, and

(b)the amount determined, for the period of 12 months beginning with 12th September 1998, as the net annual income from that unit of production in that period shall be the amount specified in column 3 of the Schedule opposite that unit of production.

(4) The Schedule has effect subject to the Notes to the Schedule.

Revocation

3. The Agricultural Holdings (Units of Production) Order 1997(5) is revoked.

Articles 1(2) and 2

SCHEDULEPRESCRIBED UNITS OF PRODUCTION AND DETERMINATION OF NET ANNUAL INCOME

Article 2(4)

NOTES TO THE SCHEDULE

Note to column 1

(1) This refers to land which is set-aside under Article 2(5) of Council Regulation 1765/92, except where such land is used (in accordance with Article 7(4) of Council Regulation 1765/92) for the provision of materials for the manufacture within the Community of products not primarily intended for human or animal consumption.

Notes to column 3

(1) Deduct £112 from this figure in the case of animals for which the net annual income does not include a sum in respect of the premium for maintaining suckler cows (suckler cow premium) provided for in Article 4d of Council Regulation 805/68.

• Add £28 to the figure in column 3 in the case of animals for which the net annual income includes a sum in respect of the lower rate of extensification premium provided for in Article 4h of Council Regulation 805/68.

• Add £40 to the figure in column 3 in the case of animals for which the net annual income includes a sum in respect of the higher rate of extensification premium provided for in Article 4h of Council Regulation 805/68.

(2) This is the figure for animals which are kept for 12 months.

Deduct £90 in the case of animals which are kept for 12 months and for which the net annual income does not include a sum in respect of the special premium for holding male bovine animals (beef special premium) provided for in Article 4b of Council Regulation 805/68.

• Add £28 to the figure in column 3 in the case of animals which are kept for 12 months and for which the net annual income includes a sum in respect of the lower rate of extensification premium.

• Add £40 to the figure in column 3 in the case of animals which would be kept for that period and for which the net annual income includes a sum in respect of the higher rate of extensification premium.

• In the case of animals which are kept for less than 12 months and for which the net annual income does not include a sum in respect of beef special premium, the net annual income is to be calculated by deducting £90 from the figure in column 3 and then making a pro rata adjustment of the resulting figure.

• In the case of animals which are kept for less than 12 months and for which the net annual income includes a sum in respect of beef special premium, the net annual income is to be calculated by first deducting £90 from the figure in column 3, then making a pro rata adjustment of the resulting figure, then adding to that figure the sum of £90 and (where the net annual income includes a sum in respect of extensification premium) the sum of £28 (where the extensification premium is paid at the lower rate) or £40 (where the extensification premium is paid at the higher rate).

(3) This indicates the figure for animals (irrespective of age) which are kept for 12 months. In the case of animals which are kept for less than 12 months a pro rata adjustment of this figure is to be made.

(4) Deduct £24 from this figure in the case of animals for which the net annual income does not include a sum in respect of the premium for offsetting income loss sustained by sheep meat producers (sheep annual premium) provided for in Article 5 of Council Regulation 3013/89.

(5) Deduct £19 from this figure in the case of animals for which the net annual income does not include a sum in respect of sheep annual premium.

(6) Deduct £241 from this figure in the case of land for which the net annual income does not include a sum in respect of the compensatory payment for which producers of arable crops may apply (area payment) provided for in Article 2 of Council Regulation 1765/92.

(7) Deduct £349 from this figure in the case of land for which the net annual income does not include a sum in respect of area payment.

(8) Deduct £467 from this figure in the case of land for which the net annual income does not include a sum in respect of area payment.

(9) Deduct £240 from this figure in the case of land for which the net annual income does not include a sum in respect of area payment.

(10) Deduct £331 from this figure in the case of land for which the net annual income does not include a sum in respect of area payment.

(11) Deduct £349 from this figure in the case of land for which the net annual income does not include a sum in respect of area payment.

(12) Deduct £241 from this figure in the case of land for which the net annual income does not include a sum in respect of area payment.

Explanatory Note

(This note is not part of the Order)

This Order prescribes units of production for the assessment of the productive capacity of agricultural land and sets out the amount which is to be regarded as the net annual income from each such unit for the year 12th September 1998 to 11th September 1999 inclusive. This Order supersedes the Agricultural Holdings (Units of Production) Order 1997 (S.I. 1997/1962).

An assessment of the productive capacity of agricultural land is required in determining whether or not the land in question is a "commercial unit of agricultural land" for the purposes of the succession provisions in the Agricultural Holdings Act 1986 ("the 1986 Act"): see in particular sections 36(3) and 50(2). A "commercial unit of agricultural land" is land which, when farmed under competent management, is capable of producing a net annual income which is not less than the aggregate of the average annual earnings of two full-time male agricultural workers aged 20 years or over (paragraph 3 of Schedule 6 to the 1986 Act). In determining this annual income figure, neither the system of farming carried out on a particular holding nor historical data from that holding will necessarily be used. Instead, whenever a particular farming use mentioned in column 1 of the Schedule to this Order is relevant to this determination, the units of production and the net annual income specified in columns 2 and 3 respectively will form the basis of the assessment of the productive capacity of the land in question.

The net annual income figures in column 3 of the Schedule specify the net annual income from one unit of production. In some cases the net annual income is derived from a unit which will be on the land for the full twelve-month period. In other cases the net annual income is derived from a unit which will be on the land for only part of the year, and there may be more than one production cycle in the twelve-month period. The assessment of the productive capacity of the land will take account of the total production in the course of a year.