Basic payments explained
The basic payment is an income support scheme for farmers engaging in agricultural activities. There are two different types of scheme:
- the basic payment scheme (BPS)
- the single area payment scheme (SAPS), a simplified transitional scheme.
The basic payment scheme
The basis of the BPS system is payment entitlements allocated to farmers. In the first year that the BPS was implemented, eligible farmers were allocated payment entitlements. In general, each eligible hectare gave the right to one entitlement (although some European Union countries applied limitations on the number of entitlements that could be allocated). Support under the BPS is then granted annually to farmers who have payment entitlements upon "activation" of these entitlements. This activation is done annually by declaring eligible hectares with an accompanying number of payment entitlements.
All entitlements allocated to a farmer have the same value, but if an EU country opted for such an approach, then there can be differences in the value of entitlements between farmers. In that case, the past level of payments to individual farmers was taken into account (or the value of the entitlements they possessed under the previous direct payments regime). This was done in order to avoid too abrupt a disruption in their level of support.
However, since one of the objectives of the new system is to move away from these historical references, the EU countries that take this approach have agreed to progressively reduce the differences in the values of entitlements and bring these values to (or closer to) the average by 2019. This process is often referred to as ‘internal convergence’.
The actual payment is made to active farmers based on the activation of the payment entitlements they hold and calculated in relation to the eligible land they declare.
Single area payment scheme
In Bulgaria, Czechia, Estonia, Cyprus, Latvia, Lithuania, Hungary, Poland, Romania and Slovakia, the SAPS is used instead of the basic payment scheme. The SAPS is a transitional measure stemming from the accession treaties of the specific country.
In the SAPS, there are no payment entitlements, instead, the support paid is solely based on the eligible hectares declared by farmers and the level is the same for all hectares in the country.
Other income support payments
The basic payment is topped up by other income support payments targeting specific issues or specific types of beneficiaries. These include the young farmers’ payments, greening payments and additional optional schemes that EU countries can choose to implement.
Withdrawal of the UK from the EU
In accordance with article 137 (1) second subparagraph of the withdrawal agreement between the EU and the UK, as from claim year 2020 the EU direct payment legislation does not apply to the UK. During the transition period set by that agreement (i.e. claim year 2020) articles 107 to 109 of the Treaty on the functioning of the EU (on aids granted by Member States) do not apply in respect to the direct payment scheme the UK would apply, provided that such scheme is equivalent to the EU direct payment scheme set in EU regulation 1307/2013. The withdrawal agreement set as well the overall financial limit which applies to such UK direct payment scheme during the transition period.