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CAP glossary

CAP Glossary                                                                      Last updated 5 February 2014

Areas facing natural constraints (ANC)

The new designation, based on bio-physical criteria, as required by the European Commission for land that is constrained, or less favoured. This needs to be in place by 2018 at the latest and will replace the existing Less Favoured Area designation

Co-decision

Co-decision simply means that both the European Parliament and the appropriate Council of Ministers have to agree on a proposal before it can become EU law.  For CAP, proposals are drawn up by the Commission, but need the agreement of the Agriculture Council and European Parliament in order to become law.

Convergence

The European Commission’s proposed convergence mechanism will apply to Member States with Pillar 1 payments below 90 per cent of the European Union average. At around €130 per hectare, Scotland’s average payment rate falls significantly below the EU average of €270 per hectare.

Coupled payments

Coupled payments are those linked to the production of a particular crop or keeping a particular type of livestock – for example the Scottish Beef Scheme. There has been a general move away from coupled payments since decoupling was introduced by the 2003 CAP reform. Removing the link between payments and production – which gave rise to sugar mountains, for instance – was designed to give farmers greater freedom to meet market demands.

However, in Scotland, coupled payments are an important way to meet the needs of Scotland’s livestock sector. There are provisions in the new CAP regulations to use up to eight per cent of national ceilings for coupled support from 2015.

Cross compliance

Cross-compliance is a set of mandatory requirements which farmers must comply with in order to receive their CAP payments. The requirements are grouped into two main areas; Good Agricultural and Environmental Condition (GAEC) and Statutory Management Requirements (SMRs). GAEC is based on a framework provided by the Commission covering soil, water and land related issued.  The SMRs are based on existing legislative standards covering the environment, public health, plant health and animal health and welfare penalties (payment reductions) are applied if any of the requirements are breached. Penalties can range from 0-5% for “negligent” breaches and 15-100% for “intentional” breaches.

Degressivity

EU rules state that Pillar 1 Basic Payments over €150,000 will be reduced by at least five per cent. Member states and devolved administrations can also decide to make bigger reductions to Basic Payments or even to cap very large payments.

DG SANCO

DG SANCO is the European Commission’s Directorate-General for Health and Consumers which looks after food and product safety and public health.

DG AGRI

DG AGRI is the European Commission’s Directorate-General for Agriculture and Rural Development – responsible for the CAP.

Ecological focus areas (EFA)

Ecological focus areas are among the proposed measures for Greening the CAP. The EFA proposals would require farmers to identify five per cent of their land as an ecological focus area. There is the possibility that this percentage will be increased to seven per cent following a review by the Commission in 2017.

Flexibility

Another name for the Pillar to Pillar transfer.

Greening

Greening is the term used to cover the introduction of measures that enhance the overall environmental performance of Pillar 1 of the CAP.

Modulation

Modulation refers to the transfer of funds from Pillar 1 to Pillar 2 which became compulsory across the EU in 2005.  Modulation was applied to Pillar 1 direct payments, such as Single Farm Payment and the Scottish Beef Scheme, at a variable rate according to the size of the payment.  The payment the farmer received was the net figure after deduction of modulation.

Since January 2014 modulation has been replaced by “flexibility” which allows member states and devolved administrations to transfer up to 15% from Pillar 1 to Pillar 2.  Instead of being applied to individual farmers’ payments, flexibility is applied to the Pillar 1 National Ceiling.  The rate applied in Scotland in 2014 is 9.5%.

Multiannual Financial Framework (MFF)

The Multiannual Financial Framework sets out the overall European Union budget including the CAP budget.

National Reserve

The National Reserve is a reserve of funds which has been top-sliced by each member state and region from their direct payments budget. This reserve can be used for a number of purposes, such as allocating payment entitlements to new entrants and young farmers or compensating farmers for specific disadvantages.

Pillar 1

This refers to payments made directly to farmers as income support (currently Single Farm Payment, but new Basic Payments etc from 2015), in return for keeping land in good condition and meeting cross-compliance conditions.  Direct payments account for around three-quarters of the CAP budget.

Pillar 2

This refers to payments through the Scotland Rural Development Programme which support a range of initiatives in rural areas, including capital investments, agri-environment-climate schemes, support for Less Favoured Areas, advice, skills and training, woodland creation, diversification, and community projects.

Rapporteur

Rapporteurs are the MEPs who write and present committee reports at one of the European Parliament’s plenary sessions.