This Order prescribes units of production for the assessment of the productive capacity of agricultural land situated in Wales and sets out the amount which is to be regarded as the net annual income from each such unit for the year 12 September 2023 to 11 September 2024 for certain purposes of the Agricultural Holdings Act 1986 (“the 1986 Act”).

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 of the 1986 Act; in particular sections 36(3) and 50(2). “A commercial unit of agricultural land” is a unit of agricultural 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 (as defined in paragraph 3 of Schedule 6 to the 1986 Act).

Article 2 of this Order provides that, in determining this annual income figure, whenever a particular farming use mentioned in column 1 of the Schedule is relevant to the assessment of the productive capacity of the land in question, the units of production and the net annual income specified in columns 2 and 3 respectively will form the basis of the assessment.

This Order includes net annual income figures for land which was, in 2022, an eligible hectare within the meaning of Article 32(2) of Regulation (EU) No 1307/2013 of the European Parliament and of the Council of 17 December 2013 establishing rules for direct payments to farmers under support schemes within the framework of the common agricultural policy. There are separate figures in the Schedule for disadvantaged land and severely disadvantaged land, land in a less favoured area and other land.

The Welsh Ministers’ Code of Practice on the carrying out of Regulatory Impact Assessments was considered in relation to this Order. As a result, it was not considered necessary to carry out a regulatory impact assessment as to the likely costs and benefits of complying with this Order.