WORLD TRADE  
ORGANIZATION  G/AG/N/EEC/58 
24 February 2009 
 (09-0957) 
Committee on Agriculture Original:   English 
  
 
NOTIFICATION 
 The attached notification concerning new or  modified domestic support measures exempt  
from reduction ( Table DS:2 ) was received from the delegation of the  European Communities on 
16 February 2009. G/AG/N/EEC/58 
Page 2  
 
  Table DS:2 
 
DOMESTIC SUPPORT:  European Communities  
Notification under Article 18:3 of the Agreement:  
New or modified domestic support measures exempt from reduction  
(1) Full title of measure:   The creation of common rules for direct support schemes under the 
Common Agricultural Policy and establishi ng certain support schemes for farmers. 
This notification concerns the following measures: 
(a) A newly-created income support scheme fo r farmers (Single Payment Scheme or 
SPS); 
(b) A newly-created scheme of simplified support for farmers in the new member States 
(Single Area Payment Scheme or SAPS); 
(c) Modified Blue Box direct support schem es for farmers producing arable crops, 
protein crops, rice, milk, sheep meat and goat meat, beef and veal; 
(d) Newly-created Blue Box direct support for durum wheat, seeds, hops, cotton as well 
as for farmers maintaining olive groves; 
(e) Direct payment schemes are covered by the cross compliance system, i.e. payments 
under these schemes could be reduced or cancelled in case of non compliance with 
the concerned rules.1 
(2) Domestic legislation:  Regulation (EC) No. 1782/2003, Official Journal L 270 of 21 October 
2003, as amended and Regulation (EC) 795 of 21 April 2004, Regulation (EC) 796 of 
21 April 2004 (Official Journal L 141 of 30 April 2004) as well as Regulation 1973 of 
29 October 2004 (Official Journal L 345 of 20 November 2004). 
(3) Detailed description of measure with reference to criteria:    
 
(a) Single Payment Scheme  (SPS) - Agreement on Agriculture, Annex 2, para 6 
 
The introduction of the SPS decided in the CAP reform of 2003 removed links between 
production and support.  The main aims of SPS are to allow farmers freedom to produce to market 
demand, to promote environmentally and economi cally sustainable farming and to simplify CAP 
application for farmers and administrators.  All fa rmers may apply for direct payments.  The single 
payment is an annual income support payment to farm ers that is independent of what and whether a 
farmer produces (decoupling).  EC member States introduced the SPS between 2005 and 2007 at the 
latest, with the exception of those new member Stat es that are currently applying SAPS (see point (b) 
below) and which have to introduce SPS by 2011 at  the latest (2012 in the case of Bulgaria and 
Romania).   
Farmers were allotted payment entitlements gene rally based on reference amounts of direct 
payments that each farmer received in the period 2000–02.  Payment entitlements were only 
distributed to farmers exercising an agricultural ac tivity at the date each member State introduced the 
scheme.  The value of each entitlement depends on the model chosen by the member State. 
                                                      
1 Eight measures under the Rural Development Policy are also covered by cross compliance.  G/AG/N/EEC/58 
 Page 3 
 
 
  EC member States have two main options to cal culate the value of the payment entitlements.  
The main difference is whether they base the value on  the direct payments individual farmers received 
in the historical reference period (so called "histori cal approach"), thus produc ing different levels of 
SPS for each farmer, or whether all payments are aver aged out over a member State or region within a 
member State (so called "regional approach"). 
According to the historical approach, each  farmer is granted payment entitlements 
corresponding to the payments he or she received during the reference period (reference amounts) and 
the number of hectares he or she was farming durin g the reference period and which gave right to 
direct payments in the reference period. 
Following the "regional (flat rate) approach ", reference amounts are not calculated at 
individual farmer level but at regi onal level (sum of payments receiv ed by the farmers in the region 
concerned during the reference period).  The value of the payment entitlements in that regional model 
is established by dividing the regional reference amount s by the number of eligible hectares declared 
by the farmers of the region in the year of SPS introduction.  Finally, each farmer receives a number 
of (flat rate) entitlements equal to the number of eligible hectares declared in the year of SPS 
introduction.  This approach entails some redistribu tion of payments between farmers.  Member States 
may also calculate SPS payments using a partly-histo rical/partly-flat rate approach.  Such "hybrid" 
systems can further vary over the period between  the first application of the SPS and the full 
implementation, giving rise to dynamic  as well as to static  hybrid systems. 
Payments are granted where farmers have eligible  hectares at their disposal to activate the 
appropriate number of entitlements.  Any payment entitlement accompanied by an eligible hectare 
shall give right to the payment of the amount fixe d by the payment entitlement.  Transfer of payment 
entitlements, with and without land, are allowed.  Farmers (with the exception of organic or small-
scale farms) are also allocated separate set-aside entitlements that may be activated only with set-
aside land. 
EC member States may grant "additional payments"2 to support agricultural activities that 
encourage the protection or enhancement of th e environment or for improving the quality and 
marketing of agricultural products.  Additional pa yments may use up to 10 per cent of the funds 
available (under national ceilings) in the SPS, t hus reducing the funds available for basic SPS 
payments. 
See also Annex 1 to this notification which pr ovides details on the implementation of direct 
payments in member States as of early 2007. 
(b) Single Area Payment Scheme (SAPS) -  Agreement on Agriculture, Annex 2, para 5 
 
Article 143b of Council Regulation (EC) No. 178 2/2003 provides for the possibility for new 
member States to use, for a transition period ending no later than 2010 (but 2011 for Bulgaria and Romania), a specific regime for granting direct payments to farmers.  The Single Area Payment 
Scheme (SAPS) provides to the new member States a simplified direct payment regime.  This regime  
facilitates and reduces the cost of the preparatory work  to be made before and during the first years of 
accession with only payments per hectare of agricultural land. 
SAPS is a decoupled support scheme not requiri ng production based on two elements fixed at 
national level:  firstly, a national fi nancial envelope to be establishe d by the Commission which is the 
sum of all the direct payments that the member State concerned would rece ive under former direct 
payment regimes taking into account the applicable ph asing-in rate of the calendar year in question;  
                                                     
 
2 Additional payments may also be coupled Blue Box payments. G/AG/N/EEC/58 
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  secondly, a national agricultural area, to be established as that part of the agri cultural area that was in 
"good agricultural condition" in J une 2003 and to be adjusted accord ing to objective criteria to be 
approved by the Commission (e.g., reduction to account  for the fact that the concerned member State 
could decide not granting direct payments to farm s smaller than one hectare).  The SAPS amount per 
hectare results from dividing the national financial envelope by the national agricultural area of the 
concerned member State.  All new member States,  apart from Malta and Slovenia, have decided to 
use SAPS.  
The Act of Accession of the Czech Republic, Es tonia, Cyprus, Latvia, Lithuania, Hungary, 
Malta, Poland, Slovenia and Slovakia and that of Bulgaria and Romania provide for a transitional 
period for the progressive introduction of the CAP direct payments to farmers in the new member 
States, from 25 per cent in 2004 to 100 per cent in  2013 (from 25 per cent in 2007 to 100 per cent in 
2016 in Bulgaria and Romania).  It also establishe s the possibility for the new member States, during 
the transitional period and subject to the approva l by the Commission, to pay farmers additional 
support in the form of Complementary National Direct Payments (CNDPs, commonly known as "top-
ups"). 
 
(c) Modified Blue Box Support schemes
 - Agreement on Agriculture, Article 6, para 5 
 
Arable crops :  The payments are based on fixed area and yields.  As a result of the 2003 Reform 
decisions, EC member States were allowed to retain  25 per cent of the component of national ceilings 
corresponding to the arable crops payments except co mpulsory set-aside payment or, alternatively, up 
to 40 per cent of the supplementary durum wheat ai d in order to continue the existing coupled per 
hectare payments up to those percentage levels.  Two member States are using the first option;  no 
member State is using the second option.  Up to a ceiling of 2 million hectares arable crops used in 
energy products are granted a fixed aid of EUR 45/hectare.  North of the 62nd Parallel, farmers 
producing arable crops are granted a fixed ai d of EUR 24/tonne multiplied by a fixed yield 
determined for the region. 
Protein crops :  The payments are based on fixed area and yields.  For peas, field beans and sweet 
lupines, the amount of aid is EUR 55.57/hectare.  It is paid within the limits of an EU maximum 
guaranteed area of 1.6 million hectares.  If the ar ea is exceeded, the aid is reduced proportionally. 
Rice:  The payments are based on fixed area and yields.  In the framework of the rice reform (notably 
50 per cent cut of the intervention price) and in or der to stabilise producers' revenues and to maintain 
the role of rice production in traditional production areas, the pre-reform direct aid is increased from 
EUR 52/tonne to EUR 177/tonne (converted to a per hectare payment according to national yield 
coefficients).  Of this, EUR 102/tonne is integrat ed in the Single Payment Scheme on the basis of 
historical rights limited by the current maximum guaranteed area, and the remaining part constitutes 
the crop specific payment for rice, limited by national base areas. 
Beef and veal :  The payments are livestock payments made on a fixed number of head.  As compared 
to the situation before the 2003 reform, member States may retain up to 100 per cent of the "slaughtering premium for calves" and make a produc t-specific additional payment to farmers.  EC 
member States may also opt for keeping up to 100 per cent of the "suckler cow premium" and up to 
40 per cent of the "slaughter premium for adult bovi ne animals" coupled.  Alternatively, they may 
keep 100 per cent of the slaughter premium for adu lt bovine animals coupled or, instead, up to 75 per 
cent of the "special male premium".  These options  are achieved by member States retaining the 
relevant percentages of the components of the SPS na tional ceiling.  The percentage rates also apply 
to the rate of payment per animal that re mains coupled. Consequently, under the partial 
implementation of SPS, the premium rates for bovi ne animals (EUR 210 or EUR 150 per bulls or 
steers, respectively), for suckler cows (EUR 200 per animal), and for the slaughtering premium (EUR  G/AG/N/EEC/58 
 Page 5 
 
 
  80 per adult animals or EUR 50 per calves) should be  multiplied with the same percentage rates that 
the member State decides to maintain as a coupled payment. 
Sheep and goats :  The payments are livestock payments made on a fixed number of head.  As 
compared to the situation before the 2003 reform, member States ma y retain 50 per cent of the sheep 
and goat premiums (i.e., 50 per cent of the sheep/ goat component of the national ceiling) as coupled 
payments.  The level of the sheep premium has been  fixed for several years in advance at EUR 21 per 
ewe (EUR 16.8 for ewes kept for milk production, an d for female goats), plus  a EUR 7 supplementary 
premium payable in Less Favoured Areas (LFA) only.   These payment rates should be multiplied with 
the same percentage rat es that will remain as coupled payment. To qualify for the LFA supplement, a 
farmer must have at least 50 per cent of his ag ricultural area in the LFA.  The additional premium 
may also apply to farmers practising transhumance. 
(d) Newly created Blue Box support measures  - Agreement on Agriculture, Article 6, 
para 5 
 
Durum wheat :  The payments are based on a fixed are as and yields.  For durum wheat a quality 
premium of EUR 40 per hectare, depending on the use of varieties recognized as being of a high 
quality for the production of pasta or semolina, is  introduced.  The aid is limited to traditional 
production zones and to national base areas. 
Seeds :  The payments are based on a fixed areas and yields.  The amount of aid claimed cannot 
exceed a fixed national ceiling.  
Hops :  The payments are based on fixed areas and yiel ds.  The payments are made in production areas 
as laid down by legislation.  The areas must be pl anted with hops and must be actually harvested. 
Olive oil :  The payments are based on fixed areas and yi elds.  To ensure olive tree maintenance, and 
thus avoid the degradation of land cover and landscap e or negative social consequences, a part of the 
CAP support can be linked to the maintenance of o live groves of environmental or social value.  
Having decided on the proportion of aids to be pa id via the SPS (60 per cent or more) the remaining 
aid (up to a maximum of 40 per cent) is retained by  member States as "national envelopes" to make 
additional payments to olive groves of environmen tal or social value according to objective criteria 
(e.g., including aspects of local traditions and culture, in particular in marginal areas).  Within the 
limits of their national envelopes, member States ma y define up to five different categories of olive 
groves eligible for support, based on their environmen tal and socio-economic value, and fix an aid per 
hectare accordingly.  In the interest of simplifi cation, these olive grove payments will only be made 
for amounts of at least EUR 50 per aid claim. 
Cotton :  The payments are based on fixed area and yields and they are made on 85 per cent or less of 
the base level of production.  With regard to coupled  aid, or crop specific payment, an amount will be 
granted per hectare maintained at least until the boll opening under normal growing conditions.  If the 
eligible cotton area exceeds th e basic area, aid is reduced proportionally to the overshot: G/AG/N/EEC/58 
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Coupled aid EC member State Area (Ha) Aid (EUR/ha) 
Greece 370,000 - 594 for 300,000 ha 
- 342.85 for 70,000 ha 
Spain 70,000 1,039  
Portugal 360 556  
  
(e) Cross compliance
 
 
All farmers claiming payments, including direct  payments, whether or not they actually 
produce from their land, must abide by the condition of  cross compliance, i.e. the respect of standards 
called statutory management requirements set-u p in accordance with 19 EU Directives and 
Regulations relating to the protec tion of environment, public anim al and plant health and animal 
welfare as well as keeping land in good agricultural and environmental condition.  Failure by farmers 
to respect these conditions can result in deductions from, or complete cancellation of, payments.  The 
main objectives of the cross compliance system include improving sustainability of European 
agriculture and rural areas as well as making CAP compa tible with the expectations and concerns of 
society, therefore strengthening the CAP's legitimacy and public acceptance. 
(4) Cost of measure:  37,000 million EUR (EC27 budge t for direct payments 2007)  
(5) Date of entry into effect:   the seventh day following publi cation in the Official Journal of 
Regulation 1782/2003.  Full implementation from 2007 onward. 
(6) Period of application:  indefinite. 
(7) Products to principally benefi t (if any individual product(s)):  SPS and SAPS are 
decoupled payments.  The coupled Blue Box payments concern various products. 
 
_______________ 
 
 
  
   G/AG/N/EEC/58
 Page 7Annex 1:  Overview of the implementation of di rect payments under the CAP in EC member States 
 
EC member  
State Start 
SPS Regions Model 
SPS / SAPS Decoupling 
of dairy 
payment What sectors remain coupled Implementation of the second wave of the CAP- reform (tobacco, 
cotton, olive oil and hops) and the reform of the sugar sector 
2005 North Zone: 
Flanders + 
Brussels SPS historical 2006 - Suckler cow premium 100% 
- Slaughter premium calves 100% 
- Seeds (some species) 100% - Tobacco coefficient for decoupling: 1 Belgium 
2005 South Zone: 
Wallonia SPS historical 2006 - Suckler cow premium 100% 
- Seeds (some species) 100% - Tobacco coefficient for decoupling: 1 
Bulgaria   SAPS   - 
Czech 
Republic   SAPS   - Separate sugar payments 
Denmark 2005 One region SPS static 
hybrid 2005 - Special male bovine premium 75% 
- Sheep and goat premium 50% - 
Germany 2005 Bundesländer 
(Berlin included 
in Brandenburg, Bremen in 
Lower Saxony 
and Hamburg in Schleswig-
Holstein) SPS dynamic 
hybrid moving 
to a flat rate model 2005  - Hops payments 25% coupled 
- Tobacco coefficient for decoupling: 0.4 
Estonia   SAPS   - 
Greece 2006 - SPS historical 2007  - Seeds  
- Article 69 application:      = 10% of the ceiling for arable crops,     = 10% of the ceiling for the beef sector, 
    = 5% of the ceiling for the sheep and  
 goat sector. - Article 69 application: 
    =  2% of the ceiling for tobacco,     =  4% of the ceiling for olive oil,     = 10% of the ceiling for sugar 
- 2% deduction in the olive oil sector for the funding of working 
programmes established by producer organisations (Art. 110 (i) 
of 1782/2003 and Art. 8 of Reg. 865/2003). 
Annex VII point H and I:  
- Tobacco and olive oil coefficient for decoupling: 1  
  G/AG/N/EEC/58 
Page 8 EC member  
State Start 
SPS Regions Model 
SPS / SAPS Decoupling 
of dairy 
payment What sectors remain coupled Implementation of the second wave of the CAP- reform (tobacco, 
cotton, olive oil and hops) and the reform of the sugar sector 
Spain 2006 - SPS historical 2006 - Seeds 100% 
- Arable crops 25% - Sheep and goat premiums 50% - Suckler cow premium 100% - Slaughter premium calves 100% - Slaughter premium bovine adults 40% - Article 69 application:   =   7% of the ceiling for the bovine sector,   = 10% of the ceiling for dairy payments - Outermost regions 100% - Tobacco coefficient for decoupling: 0.4 
- Olive oil coefficient for decoupling: 0.936 - Article 69 application:     =  5% of the ceiling for the tobacco sector,     = 10% of the ceiling for the cotton sector,     = 10% of the ceiling for sugar 
France 2006 - SPS historical 2 006 - Arable crops 25% 
- Sheep and goat premium 50% - Suckler cow premium 100% - Slaughter premium calves 100% - Slaughter premium bovine adults 40% - Seeds (some species) - Outermost regions 100% - 10% deduction in the olive oil sector for the funding of working 
programmes established by producer organisations (Art. 110 (i) 
of 1782/2003 and Art. 8 of Reg. 865/2003) 
- Hops payments 25% coupled 
Annex VII point H and I: - Olive oil coefficient for decoupling: 1 - Tobacco coefficient for decoupling: 0.4 
Ireland 2005 - SPS historical 2005 None - 
Italy 2005 - SPS historical 2006 - Seeds 100% 
- Article 69 for quality production     = 8% of the ceiling for the arable sector,      = 7% of the ceiling for the bovine sector, 
    = 5% of the ceiling for the sheep and   
 goat sector - Article 69 application:  
    = 8% of the ceiling for sugar  
- 5% deduction in the olive oil sector for the funding of working 
programmes established by producer organisations (Art. 110 (i) 
of 1782/2003 and Art. 8 of Reg. 865/2003) 
Annex VII point H and I: 
- Olive oil coefficient for decoupling is increased to 1 - Tobacco coefficient for decoupling: 0.4 
- For the region Puglia, the deco upling coefficient for tobacco is 
100% 
Cyprus   SAPS   - 
Latvia   SAPS   - Separate sugar payments 
Lithuania   SAPS   - Separate sugar payments 
Luxemburg 2005 One region SPS static 
hybrid 2005 None - 
Hungary   SAPS   - Separate sugar payments  
   G/AG/N/EEC/58
 Page 9EC member  
State Start 
SPS Regions Model 
SPS / SAPS Decoupling 
of dairy 
payment What sectors remain coupled Implementation of the second wave of the CAP- reform (tobacco, 
cotton, olive oil and hops) and the reform of the sugar sector 
Malta 2007 One region SPS regional 
model  None  - 
Netherlands 2006 - SPS historical 2007 - Slaughter premium calves 100% 
- Slaughter premium bovine adults 100% 
- Seeds for fibre flax 100% - 
Austria 2005 - SPS historical 2007 - Suckler cow premium 100% 
- Slaughter premium calves 100% 
- Slaughter premium bovine adults 40% - Tobacco 100% decoupled 
- Hops payment 25% coupled 
Poland   SAPS   - Separate sugar payments 
Portugal 2005 - SPS historical 2007 - Suckler cow premium 100% 
- Slaughter premium calves 100% 
- Slaughter premium bovine adults 40% 
- Sheep and goat premium 50% 
- Seeds 100% 
- Outermost regions 100% 
- Article 69 application:  
    = 1% (arable crops, rice, bovine and  
 ovine sectors) - Article 69 application: 
    = 10% of the ceiling for the olive oil sector,     = 10% of the ceiling for sugar - Tobacco coefficient for decoupling 0.5  - Olive oil coefficient for decoupling: 1 
Slovenia 2007 One region SPS regional 
model  - Special male bovine premium 75% 
- Sheep and goat premium 50% 
- Article 69 application:  
    = 10 % of the bovine sector - Hops payment 25% 
Slovakia    SAPS   - Separate sugar payments 
Finland 2006 Three regions 
(based on 
reference yield) SPS dynamic 
hybrid moving 
to a flat rate 
model 2006 - Sheep and goat premium 50% 
- Special male bovine premium 75% - Article 69 application:     =  2.1% of the ceiling for arable crops,     = 10% of the ceiling for the bovine sector - seeds (timothy seed)  - 
Romania   SAPS   - 
Sweden 2005 Five regions 
(based on 
reference yield) SPS static 
hybrid 2005 - Special male bovine premium 74.55% 
- Article 69 application:  
    = 0.45% of total ceiling -  
  G/AG/N/EEC/58 
Page 10 EC member  
State Start 
SPS Regions Model 
SPS / SAPS Decoupling 
of dairy 
payment What sectors remain coupled Implementation of the second wave of the CAP- reform (tobacco, 
cotton, olive oil and hops) and the reform of the sugar sector 
2005 England normal SPS dynamic 
hybrid moving 
to flat rate payment 2005 None - 
2005 England - 
moorland SPS dynamic 
hybrid moving 
to flat rate 
payment  None - 
2005 England - SDA 
minus moorland SPS dynamic 
hybrid moving 
to flat rate 
payment  None - 
2005 Scotland SPS historical  - Article 69 application: 
    = 10% of the ceiling for the bovine sector - 
2005 Wales SPS historical  None - United 
Kingdom 
2005 Northern 
Ireland SPS static 
hybrid  None - 
 
Abbreviations: SPS  Single Payment Scheme   SAPS Single Area Payment Scheme 
 
 
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