Farming: Single Payment Scheme: explanation of terms
Agricultural Property. Agricultural land or pasture and includes woodland and any building used in connection with intensive rearing of livestock or fish if the woodland or building is occupied with agricultural land or pasture and the occupation is ancillary to that of the agricultural land or pasture; and also includes such cottages, farm buildings and farmhouses, together with the land occupied with them, as are of a character appropriate to the property.
Cross Compliance Conditions. These set out standards and requirements that farmers have to meet as a condition of receiving their Single Farm Payment. They are divided into:
- Statutory Management Requirements (SMR), involving compliance with a range of some 18 European regulatory requirements covering the environment, food safety, animal and plant health and animal welfare, and
- Good Agricultural and Environmental Conditions (GAEC). These are a set of criteria developed by individual member states and vary slightly between England, Scotland, Wales and Northern Ireland.
Eligibility A claim can only be made by matching PE against an equivalent area of qualifying agricultural land that is:
- at the claimant’s disposal (on May 15t h in the year in question),
- in agricultural use for the calendar year.
Breaches of the eligibility rules can lead to significant penalties and even exclusion from the scheme.
Farmer. For SP purposes this is defined in Regulation (EC) No 1782/03 as someone who exercises an agricultural activity and this covers a wide range of farming activities (including growers of fruit and vegetables) but also keeping the land in good agricultural and environmental condition. The definition should also be taken to include growers of fruit and vegetables
Farming. For income tax purposes this is defined as the occupation of land wholly or mainly for the purposes of husbandry, but does not include market gardening which has a separate definition
Financial Discipline. The process by which EU Farm Ministers determine what percentage reductions are required to keep EU spending within budget.
Historic Basis. The method used to compute the value of PE based on the average of actual claims during the reference period of the person farming.
Modulation. The mechanism whereby a percentage of direct aid (subject to a lower threshold limit) is removed and recycled into Rural Development spending. UK regions will be subject to EU compulsory and member state voluntary modulation.
National Envelope. This is a sum of money taken from the reference amount and set aside to support a particular sector of farming. The only region to use the national envelope is Scotland and it is used there to support the beef industry.
Single Payment Scheme Entitlement. SPS Entitlements (formerly known as Payment Entitlements or PE for short) are a requirement to participate in the SPS. They do not grant any automatic right to payment. A farmer with PE applying to join the SPS is further obliged to satisfy certain conditions before payment can be made and indeed full payment is subject to cross compliance. Although there have historically been a variety of types of PE, such a Set aside, National Reserve or Authorised entitlements, most of these were abolished following a ‘Health Check’ in 2009. Now there are only normal entitlements and a very limited number of entitlements outside of the ordinary vanilla entitlement.
Reference Period. The base period used for assessing pre SPS subsidy claims as a starting point for calculating the value of PE - usually the three-year period consisting of calendar years 2000 to 2002.
Region. A geographical area within the EU within which the SPS is administered. There are six in the UK. Scotland, Wales and N. Ireland are one each and England has been divided into three. Land already categorised as severely disadvantaged (SDA) above the moor line, SDA below the moor line and the rest.
Regional Average or Flat Rate basis. The method used to compute the value of PE based on the average of claims made by all farmers within a member state in the reference period divided into the total area registered in 2005.
Single Payment (SP) A payment to farmers under the Single Payment Scheme
Single Payment Scheme (SPS). The Single Payment Scheme introduced by EU regulation 1782/2003.