Chapter SVM115125
| Published date | 13 March 2016 |
| Record Number | SVM115125 |
| Court | HM Revenue & Customs |
The Single Payment Scheme (SPS) is the principal subsidy scheme within the EU and was brought in to replace most existing farm subsidies from 1 January 2005 and is based on the amount of land held. To claim SPS one must be a farmer undertaking enough agricultural activity to meet the cross compliance rules, hold SPS entitlements and have eligible agricultural land.
In England a hybrid payment system has been chosen, where the historic element of the payment dominated at first, but this is reduced and replaced by a flat rate area payment over an eight-year period. By 2012 the English payment will be on a 100% area basis.
The devolved administrations in Scotland, Wales and Northern Ireland chose a different payment basis, being based upon the farmer’s historic subsidy claims in the period 2000-2002.
The EU Common Agricultural Policy including the SPS is due to be reformed post 2013. It is considered likely that the SPS will continue, but with reduced payment levels. It is also expected the purely historic payment basis adopted in Scotland, Wales and Northern Ireland will be difficult to sustain, and an area based approach will instead be proposed in these countries.
Initially, farmers were allocated one unit of entitlement per hectare of land occupied.
Under the SPS, England is divided into three regions:
- Non-Severely Disadvantaged Area (SDA) - England outside the upland SDA
- SDA - English upland SDA other than moorland
- SDA Moorland - English moorland within the upland SDA
Land in a specific region can only be used to support entitlements and thus payment claims in that same region. Similarly only entitlements from the devolved countries can be used to make claims within those countries.
From January 2009 the former set-aside entitlements and special entitlements became normal entitlements.
In 2015 the Basic Payment Scheme (BPS) replaced the Single Payment Scheme.
Transfer of EntitlementsThe Single Farm Payment entitlement is freely transferable, with and without land, in other words it can be sold. By contrast, leasing must be accompanied by an equivalent land transfer.
Entitlements can only be transferred to farmers (not pension funds and so on), and only within the same EU member state.
Entitlement values in England initially varied widely as the historic element is based on farmer’s past subsidy claims. Sale...
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