(This note is not part of the Regulations)

These Regulations, which apply throughout Great Britain, make provision for the implementation of Council Regulation 1765/92, which establishes a support system for producers of certain arable crops, and the Commission Regulations made under it, namely Commission Regulation 334/93, Commission Regulation 762/94 and Commission Regulation 658/96. Regulation 2(1) defines these various Regulations and by virtue of regulation 2(3) the definitions include amendments to them.

Under the support system established under Council Regulation 1765/92, producers of particular arable crops are entitled to receive a compensatory payment calculated according to the area which they have sown with such crops.

The level of compensatory payment per hectare in a particular locality is determined (in accordance with Articles 4 and 5 of Council Regulation 1765/92) by multiplying an amount per tonner by the average yield per hectare for the production region in which the land lies. Member States are required to define production regions for the purposes of this calculation in accordance with the criteria set out in Article 3 of Council Regulation 1765/92, which permits the yields so calculated to be adjusted in order to take account of structural differences between production regions. The production regions in the Great Britain are defined in regulation 3(1), while regulation 3(2) sets out the method by which the yield calculated for each such region should be adjusted. Regulation 4 provides for yield calculation in relation to oilseed rape.

Article 9 of Council Regulation 1765/92 and Article 2(5) of Commission Regulation 658/96 provide for an exchange of land ineligible for compensatory payment with land which is so eligible. Regulation 6 provides for a farmer to apply for approval for such an exchange, and sets out the conditions for such approval to be granted.

Article 7 of Council Regulation 1765/92 requires all producers claiming compensatory payments to set aside part of their arable land, unless they come witin the exception for small producers, as defined in Article 8(2) of Council Regulation 1765/92. Except in circumstances justified by objective criteria laid down by Member States, land qualifying to be set aside must have been previously farmed by the producer setting it aside for at least 2 years (Article 3(4) of Commission Regulation 762/94) and the minimum area of land which he sets aside in each production region must be in a specified ratio to the cropped land in that region for which he claims payment (Article 9(2) of the same Regulation). The circumstances in which producers are exempted from the first requirement are set out in regulation 7 and Schedule 1, and those in which producers are exempted from the second requirement are set out in regulation 8.

To ensure protection of the environment, Member States are required to take appropriate measures relating to set-aside land (Article 3(3) of Commission Regulation 762/94). Regulation 9 and Schedules 2 and 3 specifying the requirements to be met in relation to land set aside and set out how a green cover is to be established on land set aside.

Article 7(7) of Council Regulation 1765/92 permits a producer to transfer his set-aside requirement to another producer, in accordance wiht a plan presented in advance to the European Commission. Regulation 10 requires producers transferring their set-aside requirement in reliance on Article 7(7) to provide evidence to the Minister that that transfer is undertaken in accordance with the plan submitted by the UK to the European Commission.

Land sown with specified categories of oilseed only qualifies for compensatory payment when seed conforms to a quality policy established by the Member State in accordance with Article 4 of Commission Regulation 658/96. Regulation 11 implements the quality policy in relation to each of the types of seed listed in Article 4(3) of that Regulation and also makes provision for a minimum sowing distance separation in relation to rapeseed. That regulation also provides for a similar minimum sowing distance separation in relation to rapeseed grown as a non-food crop on set-aside land (in implementation of Article 4 of Commission Regulation 334/93).

The Regulations also–

(a)

prescribe the minimum size of an agricultural plot for which certain compensatory payments may be claimed (regulation 5);

(b)

set a deadline for the notification of delivery of non-food raw materials by a producer to a collector or first processor as provided for by Articles 7(3) and 8(4)(a) of Commission Regulation 334/93, and set out the penalty for a breach of the deadline by a farmer (regulation 12);

(c)

require producers, collectors and processors to keep, retain and produce records (regulations 13 and 14);

(d)

specify the reductions in compensatory payments applicable to breaches of requirements relating to land set aside (regulation 15);

(e)

prescribe the rate of interest payable where a compensatory payment is recovered by the appropriate authority in cases where recovery does not result from an error by that authority (regulation 16);

(f)

confer on authorised persons powers of entry for the purposes of the Regulations and require that such assistance be given to them for the exercise of their powers as they may reasonably reqauest (regulations 17 and 18); and

(g)

create offences and penalties (regulation 19).

The Regulations revoke and replace the Arable Area Payments Regulations 1995, the Arable Area Payments (Amendment) Regulations 1995 and the Arable Area Payments (Amendment) Regulations 1996. The main changes to the regime effected by the Regulations are that–

(a)

amendments are made in consequence of the abolition of the distinction between rotational and non-rotational set-aside effected by an amendment to Council Regulation 1765/92;

(b)

a restriction is introduced in regulation 11(8)(h) so that where a farmer has been authorised to act as an agent to take samples of farm-saved rapeseed for the mandatory analysis required by Article 4(3) of Commission Regulation 658/96, then that authorisation shall not be taken to be an authorisation to sample any such seed to be sown by that farmer;

(c)

the management rules for set-aside in Schedules 2 and 3 are clarified, notably in relation to the limiting of set-aside land and the maintenance of the green cover; and

(d)

the grounds on which a farmer may on application be exempted from one or more of the requirements of the set-aside management rules are widened to include the case where such an exemption is necessary to benefit a charity.

A compliance cost assessment has been prepared and has been deposited in the Librariers of both Houses of Parliament.