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ARABLE AREA PAYMENTS SCHEME 2003

APPENDIX 3 BASE AREA (PRODUCTION CEILING) AND PAYMENT RATES

1. There is a limit on the total area which can be claimed for AAPS aid. However there is no limit on the area of land on which individual farmers can claim AAPS aid, provided that the land is eligible, is growing eligible crops and meets the other Scheme rules.

Regional Base Area

2. For Scotland, there is a single base area comprising LFA and non-LFA land.

3. The base area is the average number of hectares used to grow cereals, oilseed rape and protein crops, as submitted by farmers in their Census returns, and that land entered into the 5-Year Set-Aside Scheme in 1989, 1990 and 1991 and the One-Year Set-Aside Scheme in 1991. The base area was amended in 1994 to allow for the inclusion of linseed in the AAPS.

4. The total area on which claims are paid in a base area cannot exceed the average area sown to eligible crops, and in set-aside, in 1989-91. If in any year, total AAPS claims and all land in eligible arable crops declared as forage in the AAA, exceed the base area, then the AAPS payment rates will be reduced proportionately.

Announcement of Penalties

5. By early November 2003, the Department will announce the financial penalty resulting from any Scottish base area overshoot in 2003. Please look for details in the farming press or check the position with your local Area Office.

PAYMENT RATES

6. The payment rates are based on the standard EU currency (euro) rates per tonne, which are then converted to rates per hectare using historic average cereal yields in each region. The euro rates will be converted into Sterling at the average exchange rate applying in June 2003. The rates quoted here, for illustrative purposes only, are those rates currently in force. The Council of Agriculture Ministers could decide to modify the payment rates in the future. The full payment rates for Scotland, excluding modulation, at the 1 July 2002 rate of exchange 1 euro = 0.643937 are set out below.

MODULATION

7. The UK has now implemented a Rural Development Programme (RDP) which will benefit farmers, the rural economy and the environment. To finance part of that Programme, the UK has introduced modulation in order to present the funding in a fair and transparent way.

8. Modulation is the recycling of a small proportion of direct payments made to farmers under CAP commodity regimes into rural development measures. It was introduced in 2001 at a flat rate of 2.5% and will rise gradually to 4.5% in 2005. In 2003, 3.5% of your AAPS payments, after the deduction of any base area overshoot or IACS penalty, will be recycled to help fund the RDP. Every Pound recycled in this way will be matched by a further Pound from the Government and returned to the rural economy through RDP.

Payment Dates

9. Payments for cereals, linseed, oilseeds, protein crops, flax, hemp and set-aside will normally be made between 16 November 2003 and 31 January 2004. This period is extended to 31 March 2004 for set-aside payments for land in non-food crops.

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