The Single Payment Scheme, introduced by EC Council Regulation 1782/2003, replaced most existing crop and livestock payments from 1 January 2005.

The new scheme will break the link between production and support. Instead, farmers will be asked to demonstrate that they are keeping their land in good agricultural and environmental condition and complying with a number of specified legal requirements relating to the environment, public and plant health and animal health and welfare. Meeting these requirements is described in the regulations as ‘cross-compliance’. Full details of what farmers will be asked to do for cross-compliance will be published later this year.

Access to the payment will depend on the number of ‘entitlements’ that a farmer holds. In 2005, farmers who are carrying out an agricultural activity can apply to the scheme to be allocated entitlements for their eligible agricultural area. Carrying out an agricultural activity means, as a minimum, keeping land in good agricultural and environmental condition.

These entitlements can be activated in 2005, and then every year for as long as the scheme continues, to generate a support payment per hectare. For each entitlement that he/she wishes to activate, a farmer must have at his/her disposal an equivalent area of eligible agricultural land, and satisfy cross-compliance conditions as mentioned above.

Most farmers will be allocated a proportion of their entitlements as set-aside entitlements. These must be activated before other entitlements and be used in conjunction with land managed as set-aside. Farmers will be notified of the 2005 set-aside rate, and given details of the new set-aside calculation, by 1 August 2004. Under the Single Payment Scheme, the set-aside obligation will extend to include all grassland except permanent pasture, and will also apply to land growing previously unsupported crops (including multi-annual crops). Land used for other permanent crops will not be eligible for the Single Payment Scheme, and will not have a set-aside obligation.

The Dairy Premium and associated Additional Payment will be included in the Single Payment Scheme from 2005, breaking the link between the premium and the requirement to produce milk.