The Single Payment Scheme

What is the Single Payment Scheme?

The Single Payment Scheme (SPS) is an agricultural subsidy scheme for farmers in the European Union. It forms part of the Common Agricultural Policy (CAP) and was introduced by EC Council Regulation 1782/2003.

The Single Payment Scheme is the main agricultural subsidy scheme in the European Union.

Under the Single Payment Scheme farmers are free to farm to the demands of the market. Payments are not linked to production.

Who administers the Single Payment Scheme?

In England the Single Payment Scheme 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 Single Payment Scheme?

Farmers who hold Single Payment Scheme “entitlements” are entitled to claim under the Single Payment Scheme. Such entitlements were gained by farmers who made a successful claim during the first year of the Single Payment Scheme (2005). These entitlements can then be activated annually. Entitlements can also be purchased from other farmers.

The Single Payment Scheme applies both to farmers who manage land owned by another as well as to farmers who own their own land.

Who qualifies for payment under the Single Payment Scheme?

In order for a farmer who is entitled to claim under the Single Payment Scheme to qualify for payment under it, he is required to follow certain rules and meet certain conditions. These are as follows:

  • their holdings must be at least 0.3 hectares and used for an “agricultural activity” (at a minimum farmers must keep their land in good agricultural and environment condition to fall within the definition of agricultural activity. Agricultural production is not a requirement of the scheme);
  • the land to which the claim relates must be at the farmer’s disposal for at least 10 months of the year;
  • they must meet “cross-compliance” standards;
  • farmers may also be required to “set-aside” a proportion of their land.

A farmer must have at least one hectare of eligible land for each entitlement he chooses to claim payment on.

What is cross-compliance?

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 are a set out requirements relating to the environment, animal health and welfare and public and plant health.

What is set-aside?

Land which is set-aside is land which is left uncropped. Unless agri-environmental scheme obligations require a farmer to do so, they do not have to set-aside any of their land.

Land that is set-aside is subject to the cross-compliance requirements.