Tag Archives: Decoupling

Single Farm Payment

Single Farm Payment

Outline of the Community (European Union) legislation about Single Farm Payment


These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Agriculture > General framework

Single Farm Payment

Document or Iniciative

Council Regulation (EC) No 73/2009 of 19 January 2009 establishing common rules for direct support schemes for farmers under the common agricultural policy and establishing certain support schemes for farmers, amending Regulations (EC) No 1290/2005, (EC) No 247/2006, (EC) No 378/2007 and repealing Regulation (EC) No 1782/2003 [See amending act(s)].


Since the reform of the Common Agricultural Policy (CAP) which took place in June 2003, production-related support has been gradually abolished and included in the Single Payment Scheme (SPS), the system of direct payments which European farmers benefit from. This Regulation continues this reform.

Direct payments are support granted to farmers directly under the framework of one of the support schemes listed in Annex I to the Regulation. Some of this support is still directly linked to production; however the majority of direct support is decoupled and granted under the auspices of an income support scheme called the “Single Payment Scheme” (SPS). Under the SPS, support granted to farmers is not linked to production.

The objective of this Regulation is to gradually integrate support coupled with production into the single payment scheme.



Direct support is subject to the principle of ‘cross-compliance’, according to which farmers must comply with a certain number of requirements in order to receive payments. These requirements relate to three areas:

  • public health, animal and plant health;
  • the environment;
  • animal welfare.

If the farmer does not comply with these requirements, they are penalised with a reduction in or cancellation of the direct payments.


Modulation is a system of compulsory progressive reduction of direct payments. Direct payments of over EUR 5 000 have therefore been reduced year on year in accordance with a particular percentage of up to 10 % by 2012.

The corresponding amounts are transferred to the European Agricultural Fund for Rural Development (EAFRD) to enhance rural development programmes, in particular for measures concerning climate change, renewable energies, water management and biodiversity. The modulation system does not apply to either the outermost regions, the Aegean Islands or to Member States subject to “phasing in”.

Farm advisory system

Farmers may take part in the farm advisory system set up by Member States to advise farmers with regard to compliance with regulatory requirements on management matters and good farming and environmental conditions.

Integrated administration and control system (IACS)

Each Member State must set up an integrated administration and control system which enables the efficiency and monitoring of the support granted to farmers by the EU to be improved. Through this electronic system, the Member State is able to deal with aid applications and be assured through administrative checks and on-site checks that payments are made properly, in order to prevent and, if necessary, manage irregularities and recover undue amounts.


Full payments are to be made to beneficiaries in one or two instalments per year between 1 December and 30 June of the following calendar year. The Commission may authorise advances. Farmers who have artificially created the conditions required for obtaining payments will not receive them.


The single payment scheme allocates aid to farmers irrespective of their production. The principal aim of this system of support is to ensure greater income stability for farmers. The latter henceforth receive the same amount of support regardless of their rate of production. This enables them to align their production with market demands. The aim of the Single Payment Scheme is also to improve the competitiveness and sustainability of agriculture.

National ceilings

Budget ceilings for the Single Payment Scheme for each Member State are published each year in a Commission Regulation.

National reserve

Member States set up a national reserve to grant rights to payments to new farmers and to those deemed to be in special circumstances, and to establish rights for farmers in areas subject to restructuring and/or development programmes.

Payment entitlements

In order to benefit from the Single Payment Scheme, farmers must first have payment entitlements, which they must declare together with the eligible hectares. The payment entitlements may be transferred from one farmer to another under certain conditions.

Historic implementation

In the “historic model”, entitlements are calculated based on the amount of direct payments each farmer has received during a reference period (generally the years 2000, 2001 and 2002. Other calculation options are possible in specific cases or when other integrations are concerned). Each direct payment is calculated by dividing the reference amount by the number of hectares which are entitled to the support received.

Regional implementation

Member States may opt to allocate payments at regional level. In that case, regional ceilings are to be established and divided among the farmers in the region. The value of their entitlements is obtained by dividing the financial envelope by the number of hectares declared in the first year of application of the scheme.

Partial implementation

Member States have had the option of partially implementing the single payment system. In this case, Member States keep part of the coupled aid and pay it to farmers in the form of a supplementary payment and according to production. These options will disappear in 2012, except for sheep/goats and suckler cows, two productions which may prove to be crucial in order to avoid agricultural land being abandoned in certain regions.


This Regulation forms part of the “health check” component of the Common Agricultural Policy after the 2003 reform. Since then the CAP has been resolutely aimed at simplification by making most payments directly to farmers under the Single Payment Scheme. Using the experience acquired since the introduction of the SPS, the Commission is extending the simplification of the CAP into the area of cross-compliance and that of existing coupled aid.


Act Entry into force Deadline for transposition in the Member States Official Journal

Regulation (EC) No 73/2009


OJ L 30, 31.1.2009

Amending act(s) Entry into force Deadline for transposition in the Member States Official Journal

Regulation (EC) No 1250/2009


OJ L 338, 19.12.2009



Outline of the Community (European Union) legislation about Cotton


These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Agriculture > Markets for agricultural products


Document or Iniciative

Council Regulation (EC) No 864/2004 of 29 April 2004 amending Regulation (EC) No 1782/2003 establishing common rules for direct support schemes under the common agricultural policy and establishing certain support schemes for farmers, and adapting it by reason of the accession of the Czech Republic, Estonia, Cyprus, Latvia, Lithuania, Hungary, Malta, Poland, Slovenia and Slovakia to the European Union.



Extensive changes have been made to the aid arrangements for cotton, with a partial move to a system of single farm payments. The move is only partial in that 35% of aid will continue to be provided in the form of an area payment (direct aid), with the remaining 65% being provided as a single farm payment.

There has been only a partial move to the new aid arrangements so as to protect certain areas in which production would cease if the new arrangements were fully applied.

Under the previous arrangements, growers did not benefit from direct aid for cotton but rather from indirect aid paid to ginners. The total aid available per hectare in each Member State is fixed at 35% of the national allocation that producers received indirectly.

Direct aid

As in the case of other direct aid to producers, farmers must fulfil certain obligations: cross-compliance, modulation and financial discipline.

National base area

Maximum area (total)
440 000 ha
Greece Spain Portugal
National base area 370 000 ha 70 000 ha 360 ha
Aid in euros per eligible hectare 300 000 ha > 594/ha
70 000 ha > 342.85/ha
1 039/ha 556/ha

Additional support: restructuring

Reforming this sector requires financial assistance of EUR 22 million for adjustments. This expenditure will be entered in the 2007 budget.

This assistance, for restructuring programmes in production regions, will be financed by the European Agricultural Guidance and Guarantee Fund (EAGGF), Guarantee Section as part of rural development policy.


The reform of agricultural aid for cotton, tobacco, hops and olive oil and table olives was negotiated together and included in the same Regulation in what was know as the “Mediterranean package”.

All these products were subsequently included (April 2004) in the comprehensive reform of the common agricultural policy (CAP) of June 2003, with the approval of the move from direct aid (aid paid by hectare, unit of output or livestock unit) to a system of single farm payments.

Cotton, tobacco, yeast, olive oil and table oils are grown in certain regions whose development is lagging behind. The reform aims to safeguard production in those regions by according priority to farmers’ incomes rather than to providing aid for production. Coupled aid is to be provided for tobacco and cotton to permit adjustment to the new arrangements. Coupled aid may be paid for hops to take account of particular market situations or structural situations within a region.

The current reform affecting “Mediterranean products” is based on the Commission communication to the Council and to the European Parliament “Accomplishing a sustainable agricultural model for Europe through the reformed CAP – the tobacco, olive oil, cotton and sugar sectors “.

The current forms of aid for cotton will be abolished from 1 January 2006.


Act Entry into force – Date of expiry Deadline for transposition in the Member States Official Journal
Regulation (EC) No 864/2004 1.5.2004 1.1.2006 (regarding cotton) OJ L 161 of 30.4.2004