Income Support [EU]

Table of Contents

Single Farm Payment 2005

Since the 2003 reform, the Common Agricultural Policy (CAP) has had to adapt to the new challenges of European agriculture, such as climate change, water management and the protection of biodiversity. The aim of this Regulation is to simplify and modernise the CAP. To this end, it gradually abolishes coupled support (production-related aid) and includes it in the Single Payment Scheme (SPS). The changes planned also allow European farmers to better take into account market trends to guide their production and contribute to rural development.

Council Regulation (EC) No 73/2009 of 19 January 2009 establishing common rules for direct support schemes for farmers under the common agricultural policy and establishing certain support schemes for farmers, amending Regulations (EC) No 1290/2005, (EC) No 247/2006, (EC) No 378/2007 and repealing Regulation (EC) No 1782/2003.

Since the reform of the Common Agricultural Policy (CAP) which took place in June 2003, production-related support has been gradually abolished and included in the Single Payment Scheme (SPS).

Cross-compliance

The payment of support to farmers is reduced if they do not comply with standards on environmental protection, animal welfare and product quality. This principal, called “cross-compliance”, is adapted to the new requirements aimed at improving water management and maintaining the advantages of set aside within an environmental perspective.

If a farmer fails to comply with those rules, direct payments may be reduced.

Modulation and financial discipline

Direct payments of over EUR 5 000 have been reduced by 7 % in 2009. This rate will be increased to 10 % by 2012. The first EUR 5 000 of support is exempt. An additional reduction of 4 % applies to support of over EUR 300 000. The corresponding amounts are transferred to the European Agricultural Fund for Rural Development (EAFRD) to enhance rural development programmes, in particular for measures concerning climate change, renewable energies, water management and biodiversity. The modulation system does not apply to the outermost regions or to the Aegean Islands.

Farm advisory system

Farmers may take part in the advisory system set up by Member States. The system advises farmers with regard to compliance with regulatory requirements and good conditions.

Integrated administration and control system (IACS)

Each Member State is to set up an integrated administration and control system which enables farmers’ payment applications to be checked. Through this electronic system, the State is able to deal with aid applications and be assured that payments are made properly, through administrative checks and on-site checks of information provided by farmers, inter alia concerning agricultural parcels and payment entitlements.

Payment

Full payments are to be made to beneficiaries in one or two instalments per year between 1 December and 30 June of the following calendar year. The Commission may authorise advances. Farmers who have artificially created the conditions required for obtaining payments will not receive them.

The single payment comprises aid allocated to farmers irrespective of their production. This system of support has been introduced to support farmers’ income and to improve the competitiveness and sustainability of European agriculture.

National ceilings

For each Member State, the ceilings for single payments are as shown in the following tables (thousands of Euros):

Member State	2009	2010	2011	2012	2013	2014	2015	2016 and following years
Belgium	614 179	611 805	611 805	614 855	614 855	614 855	614 855	614 855
Denmark	1 030 478	1 030 478	1 030 478	1 049 002	1 049 002	1 049 002	1 049 002	1 049 002
Germany	5 770 254	5 771 997	5 771 997	5 852 908	5 852 908	5 852 908	5 852 908	5 852 908
Greece	2 380 713	2 211 683	2 214 683	2 232 533	2 216 533	2 216 533	2 216 533	2 216 533
Spain	4 858 043	5 091 044	5 108 650	5 282 193	5 139 444	5 139 444	5 139 444	5 139 444
France	8 407 555	8 420 822	8 420 822	8 521 236	8 521 236	8 521 236	8 521 236	8 521 236
Ireland	1 342 268	1 340 521	1 340 521	1 340 869	1 340 869	1 340 869	1 340 869	1 340 869
Italy	4 143 175	4 207 177	4 227 177	4 370 024	4 370 024	4 370 024	4 370 024	4 370 024
Luxembourg	37 518	37 536	37 646	37 671	37 084	37 084	37 084	37 084
Netherlands	853 090	853 090	853 090	897 751	897 751	897 751	897 751	897 751
Austria	745 561	745 235	745 235	751 606	751 606	751 606	751 606	751 606
Portugal	608 751	589 499	589 499	605 962	605 962	605 962	605 962	605 962
Finland	566 801	565 520	565 520	570 548	570 548	570 548	570 548	570 548
Sweden	763 082	763 082	763 082	770 906	770 906	770 906	770 906	770 906
United Kingdom	3 985 895	3 975 916	3 975 973	3 988 042	3 987 922	3 987 922	3 987 922	3 987 922

Member State	2009	2010	2011	2012	2013	2014	2015	2016 and following years
Bulgaria	287 399	336 041	416 372	499 327	580 087	660 848	741 606	814 295
Czech Republic	559 622	654 241	739 941	832 144	909 313	909 313	909 313	909 313
Estonia	60 500	71 603	81 703	92 042	101 165	101 165	101 165	101 165
Cyprus	31 670	38 928	43 749	49 146	53 499	53 499	53 499	53 499
Latvia	90 016	105 368	119 268	133 978	146 479	146 479	146 479	146 479
Lithuania	230 560	271 029	307 729	346 958	380 109	380 109	380 109	380 109
Hungary	807 366	947 114	1 073 824	1 205 037	1 318 975	1 318 975	1 318 975	1 318 975
Malta	3 752	4 231	4 726	5 137	5 102	5 102	5 102	5 102
Poland	1 877 107	2 192 294	2 477 294	2 788 247	3 044 518	3 044 518	3 044 518	3 044 518
Romania	623 399	729 863	907 473	1 086 608	1 264 472	1 442 335	1 620 201	1 780 406
Slovenia	87 942	103 389	117 406	131 537	144 236	144 236	144 236	144 236
Slovakia	240 014	280 364	316 964	355 242	388 176	388 176	388 176	388 176

(Ceilings updated in accordance with the latest amendments)

National reserve

Member States are to set up a national reserve, which is to be used to grant aid to new farmers and to those deemed to be in special circumstances, and for support measures which are specific to certain sectors or types of production.

Allocation of the single payment

In order to receive a single payment, farmers must have previously received certain direct aid payments. The single payment is calculated on the basis of the aid received by farmers during a reference period (as a general rule 2000, 2001 and 2002, but in certain circumstances 1997, 1998 and 1999 can be regarded as the reference period). The Regulation lists the payments which are taken into account when allocating the single payment and in particular area-based payments and other payments allocated as support (e.g. slaughter premium, special premiums for male cattle and suckler cows).

Payment entitlements

Each farmer received, in the first year of application of the Single Payment Scheme, “payment entitlements” the total value of which is equal to aid received during the reference period and the number of which is equal to the number of hectares giving rise to aid during the reference period. Then, each year, every payment entitlement related to one hectare of agricultural land qualifies the farmer for a payment entitlement of the same amount. Payment entitlements can be transferred from one farmer to another.

Regional implementation

Member States may opt to allocate payments at regional level. In that case, regional ceilings are to be established and divided among the farmers in the region. All payment entitlements in the same region have the same unit value.

Partial implementation

Member States have had the option of partially implementing the single payment system. In this case, Member States keep part of the coupled aid and pay it to farmers in the form of a supplementary payment and according to production. These options will disappear in 2012, except for sheep/goats and suckler cows, two productions which may prove to be crucial in order to avoid agricultural land being abandoned.

Other Aid Schemes

Most support schemes will be decoupled and included in the SPS.

Integrationof coupled aid in the SPS	2010	2011	2012	2013
Arable crops area payment	X
Hops area aid	X
Durum wheat quality premium	X
Olive groves aid	X
Seed aid	OPT	OPT	X
Protein crops premium	OPT	OPT	X
Rice specific payment	OPT	OPT	X
Nuts area payment	OPT	OPT	X
Potato starch production aid	OPT	OPT	X
Potato starch premium			X
Dried fodder–for processing			X
Flax and hemp –for processing			X
Transitional soft fruit payment (strawberries, raspberries)			X
Transitional FV payment for tomatoes	OPT		X
Transitional FV payment other than annual crops	OPT			X
Beef special premium	OPT	OPT	X
Slaughter premium (bovine animals)	OPT	OPT	X
Sheep and goat premiums	OPT
Sucklercow premium	OPT

X = obligatory integration into SPS

OPT = optional integration

Reformed CAP

It sets out the rules for direct payments made to support farmers under the EU’s common agricultural policy (CAP). These payments are made on the condition that farmers meet strict rules on the health and welfare of people and animals, plant health and the environment — known as cross-compliance.

In December 2017, the EU adopted Regulation (EU) 2017/2393 which amends Regulation (EU) No 1307/2013, as well as other legislation relating to the CAP (Regulations (EU) No 1305/2013 setting up the European Agricultural Fund for Rural Development, (EU) No 1306/2013 laying down financing, managing and monitoring rules for the EU agricultural policy, (EU) No 1308/2013 on the common organisation of agricultural markets in the EU and (EU) No 652/2014 on the management of expenditure relating to the food chain, animal health and animal welfare.

Elements

Direct payments to farmers are paid through support schemes in each EU country.

EU countries must dedicate a certain proportion of their CAP funding allocation to compulsory support schemes:

standard per-hectare payments — to distribute support more fairly, all EU countries had to move towards a uniform payment per hectare from 2015 (a ‘basic payment scheme’);
green payments per hectare — to be granted to farmers for observing practices beneficial for the climate and environment (30% of national funding allocation);
young farmer per-hectare payment — for farmers no more than 40 years old, setting up for the first time as head of their farm, up to 5 years before claiming support; this payment is available for up to 5 years.

There are also some optional support schemes. EU countries can choose to:

support smaller farms by paying a higher amount on the first hectares (‘redistributive payment’);
grant additional payments for areas with natural constraints;
grant limited amounts of production-related support (‘coupled support’ — payments linked to specific crops or types of livestock) to help agricultural sectors in their own country which are in difficulty;
offer a simplified scheme for small farmers — an annual payment of up to €1,250.

2018

From 1 January 2018, the new rules contained in Regulation (EU) 2017/2393 came into force and include the following:

only active farmers (meaning those whose agricultural activity is not insignificant) could be granted direct support. However, in some EU countries, the administration became too burdensome. In particular, claimants operating airports, railway services, waterworks, real estate services, and permanent sport and recreational grounds were considered inactive except if they proved otherwise. Its application has now become voluntary for EU countries;
some aspects of the rules applying to green payments have been simplified, especially for crop diversification requirements;
an extension of the permanent grassland definition
- EU countries may decide to include certain shrubs or trees that produce animal feed in permanent grassland where grasses and other herbaceous forage predominate, in the whole or part of their territory;
- they may consider land not ploughed up or used for crop rotation for 5 years or more as a criterion for the classification of permanent grassland;
young farmers are now able to more easily access all 5 years of payments;
EU countries’ responsibilities in regard to the production-limiting nature of coupled support are clarified;
the types of areas of ecological interest (Ecological Focus Areas) are extended to cover areas on which plant varieties such as Miscanthus and Silphium perfoliatum are grown, as well as to land lying fallow for plants that are beneficial for pollinators.