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TITLE IIIU.K.SINGLE PAYMENT SCHEME

[F1CHAPTER 6 U.K. IMPLEMENTATION IN THE NEW MEMBER STATES

Article 71a U.K.

1. Save as otherwise provided for in this Chapter, the provisions of this Title shall apply to the new Member States.

Articles 33, 34, 37, 38, 39, 40(1), (2), (3) and (5), 41, 42, 43, 47 to 50, 53 and 58 to 63 shall not apply.

2. Any new Member State applying the single area payment scheme shall take the decisions referred to in Articles 64(1) and 71(1) by 1 August of the year preceding that in respect of which it will apply the single payment scheme for the first time.

[F23. Any new Member State having applied the single area payment scheme may provide that, in addition to the eligibility conditions established in Article 44(2), eligible hectare shall mean any agricultural area of the holding which has been maintained in good agricultural condition at 30 June 2003 , whether in production or not at that date.

Any new Member State having applied the single area payment scheme may also provide that the minimum size of eligible area per holding for which payment entitlements shall be established and for which payments shall be granted shall be the minimum size of eligible area of the holding fixed in accordance with the second subparagraph of Article 143b(5).]

Article 71b U.K. Application for support

1. Farmers shall apply for support under the single payment scheme by a date, to be fixed by the new Member States, but not later than 15 May.

2. Except in case of force majeure and exceptional circumstances within the meaning of Article 40(4), no entitlements shall be allocated to farmers if they do not apply for the single payment scheme by 15 May of the first year of application of the single payment scheme.

3. The amounts corresponding to entitlements not allocated shall revert to the national reserve referred to in Article 71d and shall be available for reallocation.

[F3Article 71c U.K. Ceiling

The national ceilings of the new Member States shall be those listed in Annex VIIIa. Except for the dried fodder, sugar and chicory components thereof, the ceilings shall be calculated taking account of the schedule of increments provided for in Article 143a, and therefore do not need to be reduced.

[F4In the case of Bulgaria and Romania, the schedule of increments provided for under Article 143a shall apply for sugar and chicory.]

Article 41(1a) shall apply mutatis mutandis.]

Article 71d U.K. National reserve

[F31. Each new Member State shall proceed to a linear percentage reduction of its national ceiling in order to constitute a national reserve. This reduction shall not be greater than 3 %, without prejudice to the application of Article 71b(3). However, it may exceed 3 % provided that a greater reduction is necessary for the application of paragraph 3 of this Article.]

2. The new Member States shall use the national reserve for the purpose of allocating, according to objective criteria and in such a way as to ensure equal treatment between farmers and to avoid market and competition distortions, payment entitlements to farmers finding themselves in a special situation, to be defined by the Commission in accordance with the procedure referred to in Article 144(2).

3. During the first year of application of the single payment scheme, the new Member States may use the national reserve for the purpose of allocating payment entitlements, according to objective criteria and in such a way as to ensure equal treatment between farmers and to avoid market and competition distortions, to farmers in specific sectors, finding themselves in a special situation as a result of the transition to the single payment scheme. Such payment entitlements shall be distributed according to rules to be defined by the Commission in accordance with the procedure referred to in Article 144(2).

4. In application of paragraphs 2 and 3, new Member States may increase the unit value of entitlements within the limit of EUR  5 000 , and/or the number of entitlements allocated to farmers.

5. The new Member States shall proceed to linear reductions of the entitlements where their national reserve is not sufficient to cover the cases referred to in paragraphs 2 and 3.

[F56. Except in the case of a transfer by actual or anticipated inheritance, of mergers and scissions and of the application of paragraph 3, and by way of derogation from Article 46, the entitlements established using the national reserve shall not be transferred for a period of five years starting from their allocation. In the case of a merger or scission, the farmer(s) managing the new holding(s) shall keep the entitlements which were originally allocated from the national reserve for the remaining part of the five-year period.]

By way of derogation from Article 45(1), any entitlement which has not been used during each year of the five-year period shall revert immediately to the national reserve.

[F27. New Member States may use the national reserve for the purpose of establishing, according to objective criteria and in such a way as to ensure equal treatment between farmers and to avoid market and competition distortions, reference amounts for farmers in areas subject to restructuring and/or development programmes relating to one or the other form of public intervention in order to avoid abandoning of land and/or in order to compensate specific disadvantages for farmers in those areas.]

Article 71e U.K. Regional allocation of the ceiling referred to in Article 71c

1. The new Member States shall apply the single payment scheme at regional level.

2. The new Member States shall define the regions according to objective criteria.

New Member States with less than three million eligible hectares may be considered as one single region.

[F2However, new Member States having applied the single area payment scheme may be considered as one single region.]

3. Each new Member State shall subdivide its national ceiling referred to in Article 71c after any reduction according to Article 71d between the regions according to objective criteria.

Article 71f U.K. Regionalisation of the single payment scheme

1. All farmers whose holdings are located in a given region shall receive entitlements, whose unit value is calculated by dividing the regional ceiling established pursuant to Article 71e by the number of eligible hectares within the meaning of Article 44(2), established at regional level.

2. The number of entitlements per farmer shall be equal to the number of hectares he/she declares in accordance with Article 44(2) for the first year of application of the single payment scheme, except in case of force majeure or exceptional circumstances within the meaning of Article 40(4).

3. The payment entitlements per hectare shall not be modified save as otherwise provided.

Article 71g U.K. Use of the land

[F51. Farmers may, by way of derogation from Article 51(b) and (c) and in accordance with this Article, also use the parcels declared in accordance with Article 44(3) for the production of products referred to in Article 1(2) of Regulation (EC) No 2200/96 or in Article 1(2) of Regulation (EC) No 2201/96 and of potatoes other than those intended for the manufacture of potato starch for which aid is granted under Article 93 of this Regulation, except crops referred to in Article 51(a).]

2. The new Member States shall establish the number of hectares that may be used according to paragraph 1 by subdividing, according to objective criteria, the average of the number of hectares that were used for the production of the products referred to in paragraph 1 at national level during the three-year period 2000 to 2002 amongst the regions defined pursuant to Article 71e(2). The average number of hectares at national level and the number of hectares at regional level shall be fixed by the Commission in accordance with the procedure referred to in Article 144(2) on the basis of the data communicated by the new Member State.

3. Within the limit established according to paragraph 2 for the region concerned, a farmer shall be allowed to make use of the option referred to in paragraph 1:

(a) within the limit of the number of hectares that he/she used for the production of the products referred to in paragraph 1 in 2003;

(b) by way of derogation from Article 71a(1), second subparagraph, in case of application, mutatis mutandis , of Articles 40 and 42(4), within the limit of a number of hectares to be established according to objective criteria and in such a way as to ensure equal treatment between farmers and to avoid market and competition distortions.

4. Within the limit of the number of hectares that remain available after application of paragraph 3, farmers shall be allowed to produce the products referred to in paragraph 1 on a number of hectares other than the number of hectares falling under paragraph 3 within the limit of a number of hectares used for the production of the products referred to in paragraph 1 in 2004 and/or 2005, whereby priority shall be given to the farmers who produced the products already in 2004 within the limit of the number of hectares used in 2004.

In case of application of Article 71 or Article 143b, 2004 and 2005 shall be replaced by, respectively, the year previous to the year of application of the single payment scheme and the year of application itself.

5. In order to establish the individual limits referred to in paragraphs 3 and 4, new Members States shall use the farmer's individual data, where available, or any other evidence provided by the farmer to their satisfaction.

6. The number of hectares for which the authorisation has been established according to paragraphs 3 and 4 shall in no case exceed the number of eligible hectares as defined in Article 44(2) declared in the first year of application of the single payment scheme.

7. The authorisation shall be used, within the region concerned, with the corresponding payment entitlement.

8. The report referred to in Article 60 shall also concern implementation by the new Member States.

[F69. For Bulgaria and Romania:

(a) the three-year reference period referred to in paragraph 2 shall be 2002 to 2004;

(b) the year referred to in paragraph 3(a) shall be 2004;

(c) in the first subparagraph of paragraph 4, the reference to 2004 and/or 2005 shall be 2005 and/or 2006, and the references to 2004 shall be to 2005.]

Article 71h U.K. Grassland

The new Member States may also, according to objective criteria, fix, within the regional ceiling or part of it, different per unit values of entitlements to be allocated to farmers referred to in Article 71f(1), for hectares of grassland as identified on 30 June 2003 and for any other eligible hectare or alternatively for hectares of permanent pasture as identified on 30 June 2003 and for any other eligible hectare. [F6However, for Bulgaria and Romania the reference to 30 June 2003 shall be to 30 June 2005 .]

Article 71i U.K. Dairy premium and additional payments

Starting from 2007, the amounts resulting from dairy premium and additional payments provided for in Articles 95 and 96 and to be granted in 2007 shall be included in the single payment scheme.

However, new Member States may decide that the amounts resulting from dairy premiums and additional payments, provided for in Articles 95 and 96, shall be included, in part or in full, in the single payment scheme starting from 2005. Entitlements established according to this paragraph shall be modified accordingly.

The amount used for the establishment of entitlements in respect of those payments shall be equal to the amounts to be granted according to Articles 95 and 96, calculated on the basis of the individual reference quantity for milk available on the holding on 31 March of the year of inclusion, in part or in full, of those payments in the single payment scheme.

By way of derogation from Article 71a(1), Articles 48, 49 and 50 shall apply mutatis mutandis .

Article 71j U.K. Set-aside entitlements

1. Farmers shall receive part of their payment entitlements in the form of set-aside entitlements.

2. The number of set-aside entitlements shall be established by multiplying the farmer's eligible land within the meaning of Article 54(2) declared in the first year of application of the single payment scheme with the applicable set-aside rate.

The set-aside rate shall be calculated by multiplying the basic rate of compulsory set-aside of 10 % by the proportion, in the region concerned, between the regional base area or areas referred to in the third paragraph of Article 101 and the eligible land within the meaning of Article 54(2).

3. The value of the set-aside entitlements shall be the regional value for payment entitlements as established according to Article 71f(1).

4. Paragraphs 1 to 3 shall not apply to farmers who declare less than a number of hectares within the meaning of Article 54(2) which would be needed to produce a number of tonnes equal to 92 tonnes of cereals as defined in Annex IX on the basis of the reference yield referred to in Annex XIb applicable to the new Member State where the holding is located, divided by the proportion referred to in the second subparagraph of paragraph 2.

Article 71k U.K. Conditions for the entitlements

1. By way of derogation from Article 46(1), entitlements established in accordance with this chapter may only be transferred within the same region or between regions where the entitlements per hectare are the same.

2. New Member States may also decide, by 1 August of the year preceding the first year of application of the single payment scheme at the latest, and acting in compliance with the general principle of Community law, that entitlements established in accordance with this chapter shall be subject to progressive modifications according to pre-established steps and objective criteria.

Article 71l U.K. Optional implementation

1. Sections 2, 3 and 4 of Chapter 5 shall apply to the new Member States under the conditions laid down in this Article. However, Section 4 shall not apply to new Member States applying the single area payment scheme referred to in Article 143b.

2. Any reference in Sections 2 and 3 of Chapter 5 to Article 41, in particular with regard to the national ceiling(s), shall be construed as a reference to Article 71c.

3. The report referred to in Article 64(3) shall include the options laid down in this chapter.

[F2Article 71m U.K. Farmers with no eligible hectares

By way of derogation from Articles 36 and 44(2), a farmer who was granted payments referred to in Article 47 or who was acting in a sector referred to in Article 47 and receives payment entitlements in accordance with Article 71d for which he does not have eligible hectares within the meaning of Article 44(2) in the first year of implementation of the single payment scheme, shall be authorised by the Member State to derogate from the obligation to provide a number of eligible hectares equivalent to the number of entitlements on the condition that he maintains at least 50 % of the agricultural activity exercised before the transition to the single payment scheme expressed in livestock units (LU).

In the case of a transfer of payment entitlements, the transferee may benefit from this derogation only if all the payment entitlements subject to the derogation are transferred.

[F7However, for Malta, the second subparagraph shall not apply and the derogation provided for in the first subparagraph shall apply without the condition that the farmer maintain at least 50 % of the agricultural activity exercised before the transition to the single payment scheme expressed in livestock units.] ] ]