The Basic Payment Scheme

What is the Basic Payment Scheme?

The Basic Payment Scheme (BPS) is the biggest of the European Union’s rural grants and payments to help the farming industry under the Common Agricultural Policy (CAP). It replaced the Single Payment Scheme in 2015.

Farmers apply once a year – usually in May – and payments begin in December.

In England, the BPS is administered by the Rural Payments Agency (RPA), which is an executive agency of the Department for Environment, Food and Rural Affairs (Defra).

Who is eligible to claim under the BPS?

Farmers with at least five hectares of agricultural land and five ‘entitlements’ can apply for BPS.

Active farmer

They must be ‘active farmers’ which means:

  • they must not carry out any of the non-agricultural business activities on the negative list (airports, railway services, waterworks, real estate services and permanent sport and recreational grounds – these are not considered to be agricultural activities);
  • if they do carry out such an activity, they can still apply if they fulfil one of the re-admission criteria (this includes having at least 36 hectares of eligible land or that their total agricultural receipts are at least 40% of their total receipts);
  • they received €5,000 or less in direct payments for the previous year.

Entitlements

In England, entitlements were allocated by the government to farmers who made a successful claim during the first year of the SPS (2005) on the basis of the area of land farmed. These SPS entitlements were then rolled over into BPS entitlements. These entitlements can be activated annually. Entitlements can bought, sold, leased, left under a will or given as a gift to/from other farmers. Farmers in the more productive regions receive a higher payment rate per hectare for each of their entitlements. New entrants (young farmer or new farmers) can apply for entitlements from the national reserve.

Agricultural land and agricultural activity

To qualify for BPS payments, a farmer must have at least five hectares of agricultural land that is used for an agricultural activity all year round. If they have land which is used predominantly for agricultural purposes, they can still claim but the payments will be reduced.

Arable land includes arable land, permanent grassland and permanent crops.

An agricultural activity includes producing, rearing or growing agricultural products (including harvesting, milking, breeding animals and keeping animals for farming purposes); or maintaining an agricultural area in a state suitable for grazing or cultivation.

A BPS claim can be made based on grazing rights on common land or rights to shared grazing. These rights are transformed into a notional share of the relevant area.

Cross-compliance

To be able to make a valid BPS claim, farmers must also meet ‘cross-compliance’ requirements.

Cross-compliance requires farmers to demonstrate that they are keeping their land in ‘good agricultural and environmental condition’ and that they are complying with a number of specific legal requirements, known as ‘statutory management requirements’.

The standards of good agricultural and environmental condition relate to issues of soil erosion, soil structure, soil organic matter and set minimum levels of maintenance so as to avoid the deterioration of habitats and protection and management of water. Member states are required to ensure that the ratio of permanent pasture to total agricultural area is maintained and where the ratio decreases farmers require authorisation before they can convert permanent pasture. Where the ratio falls too low farmers may be required to re-covert land back to permanent pasture.

The statutory management requirements set out requirements relating to the environment, animal health and welfare and public and plant health.

Cross compliance applies to all of a claimant’s land, not just to the land outlined in the BPS claim. The conditions must be met all year round and it’s up to the claimant to ensure that anyone acting for them (eg, contractors, employees and family members) abide by the cross compliance conditions too. Failure to meet the required standards may see scheme payments reduced.

Greening

Greening relates to agricultural practices which benefit the climate and the environment. Greening payments are made in addition to BPS payment for compliant farmers.

Greening practices include: crop diversification; maintenance of permanent grassland; and ecological focus areas.