Examples of over-declaration penalties for land-based options
Example 1: Under-declared area but no breach
20ha in your contract/agreement and area claimed is 20ha but 22ha found at inspection . Payment will be based on 20ha
Example 2: Over-declared up to and including 3%
20ha in your contract/agreement and area claimed is 20ha but 19.5 ha found at inspection.
((20-19.5)/19.5) x 100 = 2.56% Payment will be based on 19.5ha found (with no other penalty)
Example 3: Over-declared more than 3% up to 20%
20ha in your contract/agreement and area claimed is 20ha but 19 ha found at inspection.
((20-19)/19) x 100 = 5.26% the area will be reduced to the area found and a further penalty of twice the difference between claimed and found will be applied.
19 - ((20-19) x 2) = 17
Payment will be based on 17ha
Example 4: Over-declared more than 20% up to 50%
20ha in your contract/agreement and area claimed is 20ha but 15 ha found at inspection.
((20-15)/15) x 100 = 33% there will be no payment for the crop group i.e. any SRPD options paid at the same rate as option which has been breached.
There will be no payment for the crop group.
Example 5: Over-declared more than 50%
20ha in your contract/agreement and area claimed is 20ha but 11ha found at inspection.
((20-11)/11) x 100 = 81.82% there will be no payment for the crop group and an amount equal to the difference between area claimed and found deducted from any payments due in the following 2 years
There will be no payment for the crop grouping the current year and payment for 9ha will be deducted from any payments due in the following 2 years.