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EXTENSIFICATION PAYMENT SCHEME 2004
NOTES FOR GUIDANCE

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INTRODUCTION

• Please read these notes carefully and make sure that you understand the scheme requirements.

• For more information please contact your SEERAD area office. SEERAD staff can not give you specific business advice. If in doubt, you may wish to get help from a professional adviser.

CONTENTS

1. Application
2. Outline of the Scheme
3. Claiming Premium
4. Occupying a Holding for Less Than a Calendar Year
5. Livestock Units
6. Forage
7. Withdrawal from the Scheme
8. Movement Restrictions
9. Inspections
10. Penalties
11. Record Keeping
12. Payments
13. Citizen's Charter Targets
14. Data Protection Act 1998
15. Appeals and Complaints Procedure
16. Legal Base
Annex A List of Addresses and Telephone Numbers
Annex B Calculation of Livestock Units on Holding
Annex C List of crops not eligible as forage area under the Extensification Payment Scheme
Annex D List of forage land cover eligible under the Extensification Payment Scheme

1 Application

If you receive Beef Special Premium (BSP) and/or Suckler Cow Premium (SCP) for 2004, and you also wish to be paid under the Extensification Payment Scheme (EPS) 2004, you must complete the claim boxes on your IACS 2004 Area Aid Application (AAA).

If you do not state on your IACS AAA that you wish to claim under the EPS for 2004 you will not be admitted to the 2004 Scheme.

2 Outline of the Scheme

Under the EPS 2004:

• you can participate in either the simplified scheme or the standard scheme ( section 3);

• for both schemes there are two stocking density levels - below 1.4
  LU/hectare, and below or equal to 1.8 LU/hectare ( sections 3.1 and 3.2);

• payments will be based on animals paid under BSPS and SCPS 2004;

• the scheme will be based on a calendar year;

• the calculation of stocking density will take into account all cattle aged six months and over on your holding, plus sheep claimed under the 2004 Sheep Annual Premium Scheme (SAPS) for which you hold quota;

• you will need to keep detailed and accurate records ( section 11);

• the forage area used for calculating stocking density under the EPS differs from the forage area used to support BSPS and SCPS claims ( section 6);

• we may carry out inspections on your holding to verify your claim.

3. Claiming Premium

To participate in the EPS 2004, you must submit an IACS AAA for 2004 indicating your intention to claim extensification and giving details of all your forage area. If you acquire land after the IACS deadlines it cannot count towards your forage area under EPS. We will confirm your participation in EPS 2004 when we acknowledge your AAA.

Within the EPS, there are two sub-schemes, the simplified scheme and the standard scheme. You must choose one or other of these schemes, and cannot switch between them during the scheme year.

In the simplified scheme you must keep the stocking density on your holding either below 1.4 LU/hectare or below or equal to 1.8 LU/hectare, throughout the calendar year. You must choose one or other of these stocking density levels.

If you exceed your chosen stocking density level on any day during the year, you will not be entitled to extensification payment.

On your IACS AAA you will be asked to declare that the stocking density of your holding has not exceeded your chosen stocking density level since 1 January 2004 and to undertake to make sure it will not rise above this level on any day during the year.

You can change stocking density levels during the year provided that:

• you notify your SEERAD area office in writing;

• you have not already been advised of a forthcoming livestock or arable inspection; and

• your amended stocking density is not exceeded on any day during the year.

We must receive a request to change stocking density levels by 31 December 2004.

3.2 Standard Scheme

In the standard scheme you must keep your average stocking density for the year either below 1.4 LU/hectare, or below or equal to 1.8 LU/hectare . You will have to inform the Department of the total number of cattle (from 6 months old) on your holding, after all movements on to or off the holding have been completed, at six check dates in the year. We will use this information to calculate the number of livestock units (LUs) on your holding on each of the six dates. We will then average the six totals to calculate the overall stocking density of your holding for the year. We will choose each date at random, as follows:

We will ask you to complete four declarations covering the six check dates. We will send you the first of these after the announcement of the third check date. We will issue further declaration letters in September and November 2004 and finally in January 2005. You should return each of the first three declaration letters to your SEERAD Area Office within one month. You must return the fourth and final declaration letter by 28 February 2005. If you do not meet this deadline we will not pay you under the EPS. We will acknowledge receipt of the fourth and final declaration letter.

As an alternative to submitting paper declarations you can now complete and submit them electronically if you have access to the Internet. For further information and details of how to access the electronic system please see http://www.scotland.gov.uk/about/agriculture or contact your SEERAD Area Office.

4. Occupying a Holding for Less Than a Calendar Year

The scheme requires that you must be in agricultural production on your holding for the entire calendar year. Your holding is all the production units (including seasonal lets) farmed by you whether or not entered on your IACS AAA. If you were not in agricultural production on 1 January 2004, you may not meet the scheme conditions but we will consider your eligibility if you tell us in writing that you are in this category and that you meet the following requirements.

standard scheme claimants: you will need to ask the previous occupier for details of all the cattle on the holding on any check dates that occurred before you took occupancy.

simplified scheme claimants: you will need to ask the previous occupier for details of all the cattle on the holding from 1 January 2004 to allow you to make the declaration on the IACS AAA 2004.

both: you may be asked for evidence to support the above, for example, a copy of the herd register giving details of all cattle on the holding from 1 January 2004 until the date you occupied the holding.

If you give up occupying all the land declared on your IACS AAA 2004 before 31 December 2004, and you are no longer in agricultural production, you will not be eligible for payment under the EPS 2004.

5 Livestock Units

Livestock Units (LUs) will be based on all cattle (of domestic species) aged six months and over on your holding, plus sheep claimed under SAPS 2004 for which you hold quota.

The LU value for your livestock is:

• Sheep - 0.15 LU

• Male cattle and heifers older than 24 months, all suckler and dairy cows - 1.0 LU

• Male cattle and heifers from six months to 24 months - 0.6 LU

A heifer will count as 1.0 LU from the date it calves.

The form at Annex B will help you calculate the LUs on your holding.

5.1 Animal Age Brackets

The livestock schemes operate on calendar months and years. Cattle are worth 0.6 LU when six months old, and 1.0 LU when 24 months and 1 day old. Please see the following table for some examples of how LU values are calculated for animals at different ages.

5.2 Whose Stocking Density Calculation?

If you move animals to land/buildings not declared on your IACS AAA we will consider this to form part of your holding (as defined at section 4) and the animals will count to your EPS stocking density calculation. If you do not consider the land/buildings to form part of your holding you will be asked to produce evidence to this effect.

If you have animals under retention for BSPS, SCPS or SPS, they must be held on your holding to meet the retention rules. You must include these animals in your EPS stocking density calculation. Stocking density calculations under the EPS will be truncated to two decimal places. For standard scheme claimants only the final average stocking density figure is truncated.

6 Forage

We will calculate your stocking density on your net available forage area. Annex D lists crops that are eligible as forage area under EPS.

The following are not eligible as forage area under EPS:

• The crops listed in ANNEX C;

• Land listed on your IACS 2004 Field Data Sheet as "other land on the holding;

• Cereal crops undersown with grass;

• Land which has never been registered as eligible for the Arable Area Payment Scheme but is sown with an arable crop as detailed at ANNEX C.

Under the EPS, 50% of your net EPS forage area must be pasture land intended for grazing cattle or sheep. Grassland cut for hay or silage but not grazed by cattle or sheep in the current year will count as pasture land, provided that it is grazed next year. If the total forage area supporting your EPS claim is not at least 50% pasture land, it will be reduced until this requirement is met. For example, if your EPS forage area is 100 hectares, but only 40hectares are pasture land, your stocking density will be calculated on 80 hectares.

Please familiarise yourself with the guidance on forage area in the IACS Explanatory Booklet (IACS1) for 2004.

7 Withdrawal from the Scheme

You must write to your SEERAD area office immediately if you wish to withdraw from either the simplified or standard schemes. If we have informed you of a livestock inspection, we will not permit withdrawal until we have completed the inspection satisfactorily. Once withdrawn, you may submit another claim up until the closing date for receipt of the IACS AAA, after which late claim penalties (as described in the Livestock Subsidy Schemes Penalties Booklet) will apply.

8 Movement Restrictions

If the State Veterinary Service (SVS) imposes a movement restriction on your holding due to an epizootic outbreak (a disease which involves a large number of animals, for example, Tuberculosis or Foot and Mouth Disease) and animals cannot leave the holding except for slaughter, the number of cattle (aged six months and over) on your holding will be multiplied by a coefficient of 0.8, provided you have taken all action necessary to prevent or limit the outbreak. This will not apply to sheep. The coefficient will apply to the period of movement restriction, and the 20 day period after the restriction is lifted and you will be advised of the effect it has had on your stocking density in February/March 2005.

This concession will not apply to individual cattle or whole herds which are subject to movement restrictions under the Cattle Identification Regulations 1998 (as amended).

9 Inspections

We will check to make sure you comply with the scheme rules. You must allow us to check your farm records, count your animals and inspect your forage area at any reasonable time. Inspection visits may occur without notice and more than once. If you refuse to allow an inspection, or if you obstruct an inspecting officer or fail to give reasonable assistance, you will not be paid subsidy and you may be prosecuted.

The law requires that you keep accurate and up-to-date herd records of all cattle on your holding and show your records to our Inspectors when they visit your holding. If your records do not support your current or previous claims, we may exclude you from the current scheme and you may have to re-pay aid already paid, plus interest.

10 Penalties

We must administer the scheme strictly by the EC regulations and we do not have discretion to vary these rules. Please make sure that you understand your obligations and seek professional advice if necessary.

If you do not comply with the rules of the scheme, and the undertakings you have given, you will not be paid. If you have already received payment, you will have to repay it in full, or in part, with interest. If we have to recover a payment, we will explain how we have calculated the interest due.

The amount we pay under EPS 2004 will be based on the number of animals paid under the 2004 BSPS and SCPS. If that number is reduced, for whatever reason, payment under the EPS will be reduced too.

If you over declare your EPS forage area, your eligibility for EPS will be assessed on the eligible forage area you declared. We will not apply penalties unless the over declared area would have supported an extensification payment to which you would not have been entitled. You can find details of the EPS penalties in the Livestock Subsidy Schemes Penalties Booklet.

Also, we will not pay EPS if:

• under the standard scheme, we assess your stocking density to be greater than 1.8 LU/hectare;

• under the simplified scheme, you exceed your declared stocking density limit at any time during the year and you have not written to tell us that you wish to switch between stocking density levels or withdraw from the scheme;

• we discover at a cross check of your claim against the Cattle Tracing System (CTS) that your stocking density is different from the band selected (simplified scheme) by you.

• your herd register is incomplete and does not contain accurate and up-to-date information as required by the Cattle Identification Regulations 1998 (as amended);

• we decide that you have created artificially low stocking rates to benefit under the EPS, in contravention of Commission Regulation 2342/99 Article 32.

11 Record Keeping

By law (the Cattle Identification Regulations 1998 (as amended)) you must keep a herd register detailing all the animals on your holding. You must keep accurate and up to date records. If you do not, we will not pay you subsidy under the livestock schemes. Also, the Trading Standards Department of your local authority has responsibility to enforce the law on herd records and cattle ear tags. Your records should cover:

• animal's official ear tag number;

• date of birth;

• sex;

• breed;

• animal's dam's ear tag number (if animal is born on your holding);

• date of movement on to your holding and where the animal has come from;

• date of movement off your holding (including death) and destination;

• for an animal born before 1 January 1998, if the ear tag number has changed, the replacement ear tag number and the date of replacement.

If an animal has come from or is going to a market it is enough to record the market's address as the place of origin or destination.

When you submit your claim (on your IACS 2004), you will give an undertaking to keep all records relating to the claim for 4 years, together with any other relevant documents, for example, sales receipts and purchase documents. To aid inspection of your claim, it would be helpful if you kept in your register a running total of the cattle on your farm, distinguishing between males and females. You may keep the register in a manual or computerised form. We will inspect your register and other records to verify your claim. If we cannot do so because, for example, your register and records are not up to date, you will lose premium. We strongly advise you to download the standard record format from our website at: http://www.scotland.gov.uk/about/agriculture.

If you participate in the EPS, you must be able to calculate the total number of bovine livestock units on your holding from your herd register, on each of the six check dates under the standard scheme, or on every day of the year under the simplified scheme.

12 Payments

We aim to begin making payments under the EPS 2004 as soon as possible after 1 April 2005 and be substantially complete by 30 June 2005. We will pay only on cattle which qualify for payment under BSPS and SCPS 2004. If the number of eligible animals is restricted to quota under SCPS, or the Regional Ceiling under BSPS, we will base the extensification payment on the restricted numbers. We cannot make extensification payments on sheep.

Your payment will be in sterling based on 80 euros per eligible animal for stocking density levels below 1.4 LU/hectare, and 40 euros per eligible animal for stocking density levels of 1.4 LU/hectare or more, and less than or equal to 1.8 LU/hectare, using the average rate of exchange in December 2003. At the rate of exchange on 1 November 2003 this would be worth 55.82 for under 1.4 LU/hectare, and 27.91 for less than or equal to 1.8 LU/hectare.

12.1 Modulation

Modulation is the recycling of a small proportion of payments made to farmers to help fund the Scottish Rural Development Programme (SRDP). Every pound modulated will be matched by a pound from the Government and the total returned, through the SRDP and other measures, to the rural economy.

Modulation is set at 3.5% for the 2004 scheme year. The payment advice letter we send you will show how much your payment has been modulated.

13 Citizen's Charter Targets

We will start to process your EPS claim when we receive your correctly completed IACS AAA form. Our targets are then to:

• acknowledge your participation in the scheme within 10 working days; and

• make extensification payments by 30 June the following year.

14 Data Protection Act 1998

The EPS is subject to the Data Protection Act 1998. The Data Controller is SEERAD.

As Data Controller, we collect data to administer the EPS and other community aid schemes. We will only disclose the information you give us to our authorised agents, and others as the law permits and in accordance with the declaration at Section A of the IACS 2004 AAA.

15 Appeals and Complaints Procedure

15.1 Appeals against decisions

If you are not sure why you have been penalised or do not fully understand our decision, you should contact your SEERAD Area Office for a fuller explanation.

If you are not satisfied with this explanation, you can have the decision reviewed under the EU Agricultural Subsidy Schemes Appeals procedure. You have 60 calendar days from the date of our decision letter in which to send your appeal. The appeal procedure consists of 3 stages: an in-house review, an external panel review and an appeal to the Scottish Land Court.

Full information on the appeals system procedures, including the timescale allowed for making an appeal, is given in the Department's information leaflet AP (EL) June 2001 which we sent to all farmers. Further copies are available from area offices or from the Appeals Secretariat, SEERAD, 47 Robb's Loan, Edinburgh, EH14 1TY. Please note that the appeals procedure does not handle complaints about standard of service.

15.2 Complaints about standard of service

If you have a complaint about the standard of service we offer, you should:

• Contact the person at your area office who is dealing with your case. You may complain by letter, by telephone, or in person. If you want your complaint considered by a more senior officer, please write to the Principal Agricultural Officer at your area office. They will deal with the complaint if their staff are involved or forward it to the appropriate person. It will help us to investigate your complaint if you set out the facts as fully as possible, quoting your main farm code number. We will acknowledge your complaint by return, investigate it properly and aim to reply within two weeks.

• If you are not satisfied with the response, please write to the Chief Agricultural Officer, SEERAD, Pentland House, 47 Robb's Loan, Edinburgh EH14 1TY.

• You may also ask your Member of the Scottish Parliament or your Member of the UK Parliament to take up your complaint with the Minister for Environment and Rural Development, SEERAD, Pentland House, 47 Robb's Loan, Edinburgh EH14 1TY.

You or a representative you authorise, may also ask the Scottish Public Services Ombudsman to investigate your complaint. Your representative may be an MSP, local councillor or any person you consider suitable to represent your interests. Your complaint must be submitted to the Scottish Public Services Ombudsman, 23 Walker Street, Edinburgh, EH3 7XH within 12 months after the day on which you first had notice of the matter. Further information about the Scottish Public Services Ombudsman is available at http://www.scottishombudsman.org.uk

16 Legal Base

The scheme rules are in European Council Regulations 1254/1999 and 1259/1999 and European Commission Regulations 2342/1999 and 2419/2001.

If you would like further specific information not covered by these Guidance Notes please write to your SEERAD Area Office.

ANNEX A LIST OF ADDRESSES AND TELEPHONE NUMBERS

HEADQUARTERS
SEERAD
EPS SECTION
Room 209
Pentland House
47 Robb's Loan
Edinburgh EH14 1TY
Tel No: (0131) 244-6406
Fax No:(0131) 244-6277

Rural Payments Agency (RPA)
Eden Bridge House
Lowther Street
CARLISLE CA3 8TX
Tel No.: (01228) 523400
Fax No: (01228) 640241

ANNEX B CALCULATION OF LIVESTOCK UNITS (LUs) ON HOLDING

NOTE FOR STANDARD SCHEME CLAIMANTS

The number of LUs used to determine the stocking density on your holding is the arithmetic average of the number of LUs counted on each of the six check dates. Only this figure is truncated to two decimal places.

ANNEX C
CROPS NOT ELIGIBLE AS FORAGE AREA UNDER EPS

ANNEX D LIST OF ELIGIBLE FORAGE LAND COVER UNDER EPS

Non-arable forage land cover eligible as forage under the Extensification Payment Scheme

• PGRS Grass over 5 years

• TGRS Grass under 5 years

• WDG Open woodland (grazed)

• RAST Rape for stock feed

• RGR Rough grazing

• TSWS Turnips/ swedes for stock feed

• OCS Other crops for stock feed