Glossary

CAP

The Common Agricultural Policy of the European Union ( EU). This currently accounts for around 50% of the EU's budget and largely determines agricultural policy within all Member States. The CAP is decided by the European Council through negotiations between Member States.

• A framework of support for farming through direct payments to producers and indirectly through market support measures.
• Decisions on import restrictions into the EU
• Regulations on food labelling
• Animal health issues, eg use of antibiotics in animal feed
• Plant health issues, including genetically modified organisms (GMOs)
• Restrictions on state aids (assistance by Member States or regional governments) for agriculture and food processing.

Cross compliance

The main direct source of payment for EU farmers is through the The Single Payment Scheme which from 2005 has required recipients to comply  with a number of standards relating to environment, public health and animal health and welfare. There are 2 elements to Cross Compliance. They are

• Statutory Management Requirements (SMRs)
• The need to maintain land in Good Agricultural and Environmental Condition (GAEC).

Decoupling

In the CAP context this means that farmers l no longer have to keep a particular animal or grow a particular crop to secure a direct subsidy payment. See also Single Payment Scheme entry in this Glossary.

Direct payments

This refers to payments made to individual producers such as the Single Payment, Pillar 1 of the CAP.

Entitlement

The Single Payment Scheme is paid each year, according to  individually established entitlements. Most entitlements were established in 2005 and calculated on a stipulated reference period - usually based on production in a given year or years. Entitlement is expressed as x hectares or part hectares, at £ Y rate per hectare. Entitlement for dairy producers was based on quota held 31 March 2005.

Good agricultural and environmental condition (GAEC)

Receipt of the Single Payment is dependent on a farmer keeping the land in Good Agricultural and Environmental Condition.

Historic model of the Single Payment Scheme

This refers to the approach to the Single Payment Scheme based on participation in CAP direct payment schemes in the reference years 2000, 2001 and 2002. The total amount of payments made under the Sheep Annual Premium, Beef Special Premium, Suckler Cow Premium, Slaughter Premium, Extensification Premium or Arable Area Payment Schemes, was used to set the budget for the Single Payment Scheme. The budget was increased in 2005 to include a compensation for the dairy sector.

Wales adopted this model in 2005. In the rest of the UK, Scotland introduced the historic approach but retained funding for direct payments for the beef sector. England introduced a model comprising two elements, historic entitlement and a proportion based on the area farmed paid at a flat rate. The flat rate payment will represent 100% of the payment in England by 2013. Northern Ireland introduced a similar model to England's, but with the split between historic and base payments remaining at the same percentage.

Modulation

A set percentage reduction is taken from the total budget for the single payment Scheme with the  funds used to fund rural development measures. There are two types of modulation

• Compulsory, EU-wide modulation. At a set percentage - expected to be above 10% 2013 . Funds are used to fund rural development measures throughout the EU
• Voluntary modulation , this is raised by Member States or regions within them. It is used  to fund rural development measures in the area rendering the funds. 

National Reserve

3% of the total money available in Wales for SPS was siphoned into a fund  used to establish entitlements for applicants in specific eligible categories when the Scheme was introduced.

Pillar 1 and Pillar 2

The Common Agriculture Policy accounts for around 50% of the EU's budget and covers a wide range of expenditure. It is divided in two different categories , referred to as Pillar 1 and Pillar 2.

Pillar 1

Originally most agricultural support was provided to the industry indirectly, through market measures. Progressive reforms of the  CAP reintroduced and amended a system of direct support for individual recipients.  The Single Payment Scheme is now the main direct payment, the current direction of the CAP is to move support towards Pillar 2. 

Pillar 2

Expenditure under the Rural Development Regulation is referred to as Pillar 2. The second increasing side of CAP Pillar 2 measures are aimed at supporting rural communities to develop and diversify and environmental protection and conservation measures.  The range  includes

• Agri Environment (Tir Gofal), farm adaptation, forestry, processing and marketing of agricultural produce, training and development, and less favoured area support (Tir Mynydd).
• To secure European funding for these (and other Pillar 2 measures) Member States (or regions within them) are required to prepare a Rural Development Plan, which must be approved by the Commission. The Rural Development Plan for Wales, sets out the Welsh Assembly's strategy for rural development, Pillar 2 measures.

Reference period

This is a designated period on which entitlements are based. Activity - such as participation in CAP direct payment schemes in a given year, or years is used to calculate the level of payment to which a claimant may be entitled. The reference period for the Single Payment introduced in 2005 was an average of the 3 years 2000, 2001 and 2002.

Single Application Form ( SAF)

This is the claim form for the Single Payment (pdf 127kb). SAFs are dispatched from the Welsh Assembly Government to entitlement holders. Completed forms must be received by the local Welsh Assembly Government offices no later than 15th May in any year of the Scheme's operation. Payment then can be made at any time between 1 December to 30 June in the following year

Single Payment Scheme (SPS)

From January 2005, this  replaced most of the various CAP direct payment schemes. It is not linked to production and is  conditional: farmers must keep the land in "good agricultural and environmental condition" (GAEC) and meet cross compliance requirements. Entitlement for the majority of claimants was established in 2005 by application. Payment is made via the Single Application Form ( SAF) which must be received no later than 15th May in any year of the Scheme's operation. Payment then can be made at any time between 1 December to 30 June in the following year. Most payments are made at the earliest opportunity.

Statutory Management Requirements (SMRs)

These are obligations covering environmental, public health, plant health and animal health and welfare standards. They include

• 9 Statutory Management Requirements (SMRs) relating to the conservation of plants and animals, the protection of water quality and animal identification.
• 7 SMRs relating to  public, animal and plant health.
• 3 SMRs which apply to animal welfare