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Single Farm Payment Scheme
INFORMATION LEAFLET 9

UNDERSTANDING YOUR STATEMENT OF PROVISIONAL PAYMENT ENTITLEMENTS

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This leaflet explains how your Single Farm Payment Scheme (SFPS) entitlements have been calculated and gives definitions of the terms used. This leaflet should be read in conjunction with your statement which contains details about your eligibility under the SFPS.

The SFPS will use a business' track record of historic farming activity (reference amount) under existing subsidy schemes and the land ( reference area) used to support those payments during a reference period. (See Information Leaflet No1 (updated October 2004) for a summary of how the scheme will operate)

What the terms mean

Historic Farming activity means the numbers of eligible livestock under the sheep and beef subsidy schemes and eligible cropped areas under arable schemes.

Reference area is the number of eligible hectares that gave rise to the subsidy payments - forage hectares in the case of livestock claims and eligible crop or set-aside hectares in relation to arable claims.

Reference period is the calendar years 2000, 2001 and 2002.

Your SFP is the average historic farming activity in the reference period multiplied by rates specified in Regulation (EC) 1782/2003 to give the reference amount. It is NOT the average of amounts paid in each of those years.

Explaining the SFPS calculation

PARTREFERENCE AMOUNT

The reference amount is calculated by using the numbers of eligible livestock under the sheep and beef subsidy schemes and eligible cropped and set-aside areas under the arable scheme.

PartAll Arable Schemes

We have taken the eligible areas claimed in the reference period after deducting the relevant arable overshoot percentages as shown below:

• 2000 = 2.25%

• 2001 = 4.44%

• 2002 = 2.70%

These areas are then totalled and multiplied by the average yield (5.21Tonnes/ha LFA land and 5.67 Tonnes/ha Non-LFA land), which is then further multiplied by ¤63 per tonne and divided by 3 (divided by 2 for flax and hemp).

Any set-aside you had in excess of the 10% requirement for SFPS will be allocated to the total for the arable schemes and calculated as above. For further explanation on SFPS set-aside see Parts and

PartAll Livestock Schemes

This is the total eligible animals claimed during the period 2000 to 2002 multiplied by the 2002 scheme rates, divided by 3 to reach the average figure. Note: The Sheep National Envelope (SNE) was introduced in 2002 and this figure is used without further amendment.

If you claimed under any of the beef subsidy schemes, 10% has been deducted from these elements of the reference amount to fund the Scottish Beef Calf Scheme. The level of deduction is an estimate. We will review the level of deduction prior to payment.

PartTotal - All Schemes

This is the total of the Arable and Livestock schemes individual reference amounts.

PARTREFERENCE AREA

The reference area is calculated from the numbers of eligible hectares that gave rise to the subsidy payments; forage hectares in the case of livestock claims and eligible crop or set-aside hectares in relation to arable claims

PartCropped Areas - Arable Scheme

We have taken the eligible areas determined in the reference period after deducting the relevant arable overshoot percentages as shown below;

• 2000 = 2.25%

• 2001 = 4.44%

• 2002 = 2.70%

These areas are then totalled and divided by 3 (2 for flax and hemp).

Any set-aside area you had in excess of the 10% requirement for SFPS will be allocated to the arable cropped area on a year by year basis and divided by three. For further explanation on SFPS set-aside see Parts and .

These areas are then added together to give a reference area for arable schemes.

Part Forage - Livestock Schemes

This is the eligible forage area determined from your IACS form in each of the 3 reference years. These areas are then totalled and divided by 3. "Eligible" in this context means the area declared or found at inspection whichever is the less

Part Total - All Schemes

This is the total of the Arable and Forage Reference Areas.

SET-ASIDE ENTITLEMENTS

If you were a Main Scheme Arable Aid claimant you will have had set-aside during the reference period. Under the SFPS you have an obligation to keep land in set-aside and have been allocated a number of set-aside entitlements.

Part Total Reference Amount

We have calculated your required set-aside by taking 10% of the total arable area including
set-aside minus the overshoot on a year by year basis using the % shown below.

• 2000 = 2.25%

• 2001 = 4.44%

• 2002 = 2.70%

This gives a required area of SFPS set-aside for each year. Any remainder is allocated to the arable area of your SFP calculation. These areas are then added together to give a total, multiplied by ¤63 per tonne and divided by 3. This gives you a reference amount for SFPS set-aside.

If you had structural set-aside in the reference period zero payment has been allocated to it as it was paid under the relevant woodland scheme.

Part Total Reference Area

The set-aside reference area is very simply the area used year by year to calculate the reference amount divided by 3.

You should have received in October Information Leaflet 6 that details rules for set-aside land in 2005.

OTHER INFORMATION

Scottish Beef Calf Scheme

The only deduction that has been shown on your statement is for the Scottish Beef Calf Scheme. This is a deduction of 10% from all the bovine payments reference amount.

These schemes are:

• Suckler Cow Premium Scheme.

• Beef Special Premium Scheme.

• Extensification Payment Scheme and

• Slaughter Premium Scheme.

Please note that this deduction is an estimate. It will be reviewed and possibly changed once all the SFPS claims have been submitted.

National Reserve

There will be a provisional deduction of 3% to fund the National Reserve. This percentage will be reviewed in 2005 when the level of demand is known.

Modulation

Modulation will apply to the Single Farm Payment Scheme. This money is used to fund a range of measures designed to assist with rural development.

Under CAP Reform, there will be compulsory modulation at the same rate across the European Union (EU). These rates will be:

• 3% in 2005;

• 4% in 2006; and

• 5% for the period 2007 to 2012.

The first ¤5,000 of your SFP is exempt from compulsory EU modulation.

A decision on the rate of additional national modulation needed to fund the Land Management Contract Menu Scheme has not yet been made. This will be additional to the compulsory modulation.

Agri Environment Participants

The payments for all Agri-Environment schemes are currently under review. Some measures included in the payment an element of subsidy foregone and these payments are likely to be reviewed. What the levels will be are not yet known but we will announce them early in 2005.

Changing your reference amount

In our publicity about the Single Farm Payment Scheme, we explained the rules if you were affected by force majeure or exceptional circumstances during the historic reference period of 2000 to 2002. You can request that your reference amount be amended to reflect these events.

Please see Information Leaflet 2 for information on how to request a change. For Agri Environment participants you should refer to Leaflet 4.

The deadline for submitting this request has been extended to 20 December 2004.

Further information / Contact Addresses

See information on the Single Farm Payment Scheme at www.scotland.gov.uk/singlefarmpayment . Local area office contact details.

SFPS(1)2005