IACS AND THE SINGLE PAYMENT SCHEME

1. IACS AND THE SINGLE PAYMENT SCHEME ROD PLINSTONRPA/Defra Policy Directorate11th February 2009

2. Direct Payments to farmers : general features • Single Payment Scheme triggered by holding entitlements and land • New IACS – Rural Land Register (LPIS), entitlements registers, single business identifier registers. • Inspection regime : land eligibility. • Cross Compliance – SPS and Rural Development Schemes. • Supplementary Aid schemes – decoupling 2010+ • Energy Crops,Protein Crops, Nuts. • Financial Discipline mechanism. • National Envelope Schemes. • Mandatory Modulation – cross-funding of Rural Development schemes. • Member States choices – Entitlements model, when to implement, when to decouple existing schemes.

3. SPS : English Option • Implemented in 2005 • Full Decoupling • All arable, beef and sheep • Dairy Premium • Seeds, Hops • No National Envelope • Compulsory Modulation / Voluntary Modulation • Progressive Flat Rate Option 2005 - 2012 • English Regional Model • Severely Disadvantaged Area of the Less Favoured Area • Moorland within SDA • Other English Land

4. IACS : Key Controls • New IACS • Cross-checks with internal databases (Customer, Land, Entitlements, applications). • Cross-checks with external databases (Devolved Administrations, English Rural Development Programme). • Cross-checks with other schemes (Dried Fodder, Fibre Flax Processing etc). • On-the-spot controls for land eligibility including remote sensing and physical inspection. • Cross-compliance Adequacy of physical inspection process and application of sanctions – meet ‘SMR’ and ‘GAEC’ conditions. • Accuracyof entitlement calculation and distribution in entitlements registers (database in SPS). • Achievement of deadlines – claim submission, corrections submission, annual payments window.

5. IACS Challenges : LPIS • Mapping of rural land in high volume by a deadline – RPA working with industry. 120,000 applicants with 8.7 M hectares • Mapping requests following farmer claims, farmer mapping requests, other schemes. • Resolving mapping problems. • Maintenance of the LPIS against independent reference data over time. • Amending the LPIS with photographic data / remote sensing.

6. IACS challenges : entitlements • Controls on farmers’ access to the aid regime. • 1 Entitlement = 1 Hectare to ‘establish’ in Year 1 and ‘activate’. • 1 Entitlement valued per farmer on historic or other data. • Historic data – assembly of reliable payments data under past IACS schemes. Notified existing farmers. • Historic + Flat rate and National Reserve allocations. • Hardship cases. • Transfers of entitlements. • New Businesses / changing Businesses. • Future : end of set-aside, re-labelling of entitlements. • Future : decoupling of protein, nuts, dried fodder, fibre flax – complexities of transfer of funds to existing SPS entitlements, targeting farmers, or creating new entitlements (historic or flat rate). • Future : Review of Regional Model in England ?

7. IACS challenges : customer registration • Single Business Identifier (SBI) numbering, rationalisation of several earlier identifiers. • New farmer types registered _ e.g. horses, orchards – link to entitlements allocation. • New, continuing, or separate businesses. • Health Check : ‘genuine farmer’ test.

8. Further changes to IACS / SPS 2009 onward: Operational changes for RPA: • LPIS (RLR) Data Refresh 2009. • Electronic Channel for customer claims and LPIS. • Customer registers linked to land. Main policy changes: • Funding of National Envelope schemes from SPS (all ‘Pillar 1’ funding)? • Net budget ceiling monitoring for Pillar 1 schemes and scale-back. • Cross Compliance – environmental set-aside, water management. • ‘Non-agricultural land’ and ‘genuine farmer’ checks.

9. Entitlements : English ‘Regional Model’ • English Ministers chose a “transitional Area based” model • All entitlements have a flat rate • Some have a top-up according to their reference amount • Over 8 years flat rate increases and historic decreases • England split into 3 regions • Aim was to stop funds going to lower producing, high land • Most funds to Non-Seriously Disadvantaged Area (‘n-SDA’) • Medium funds to ‘SDA’ area • Low funds to Moorland SDA area

10. Entitlements System :1 Base Data needed for Entitlements Calculation Ceilings Dairy Premium Increases Average Regional Entitlement Values Adjustment Facility Calculation Scale back Re-calculation Transition calcs Validations Cross-checks Allocations Hardship Claims Appeals Reversions Surrenders Transfers Mergers/Splits Inheritance Statements Reports Dairy Ref Amount Milk Quota System 31/03/05 Ref Data Annual Transition Rate Calculator 2000-2002Average Set-Aside Rate (% Arable Land) Normal and Set-Aside Entitlements Calculator Re-calculator National Reserve 2005 Severely Disadvantaged Parcels and Non SDA Land Parcels Interim Historic Receipts Data Extraction Reference Amounts (XANSA) Arable Entitlements Register Livestock Associated Schemes 2005 Hectares (inc Set-Aside, Arable, NFSA and Organic Land, Fruit and Veg Land) Controls RITA Data Capture Verification Validation Cross-checks Inspections Payments Accounting Matrix etc SPS Applications 2005 Hectare Data New Claimant 2005 Data Known Claimant 2005 Data

11. Entitlements System 2 : EnglishRegions example: SDA land SDA land is in pink Non-SDA land covers the remainder plus DA land DA land is in blue

12. Entitlements System 3 : Transition to Flat Rate with SDA and non-SDA land Non-SDA SDA

13. Entitlements System 4 : Entitlements register entries for ‘F. Giles’