# Regulation (EU) No 1307/2013 of the European Parliament and of the CouncilShow full title

Regulation (EU) No 1307/2013 of the European Parliament and of the Council of 17 December 2013 establishing rules for direct            payments to farmers under support schemes within the framework of the common agricultural policy and repealing Council Regulation            (EC) No 637/2008 and Council Regulation (EC) No 73/2009         

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# Regulation (EU) No 1307/2013 of the European Parliament and of the Council

# of 17 December 2013

# establishing rules for direct payments to farmers under support schemes within the framework of the common agricultural policy                        and repealing Council Regulation (EC) No 637/2008 and Council Regulation (EC) No 73/2009                     

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty on the Functioning of the European Union, and in particular Article 42 and Article 43(2) thereof,

Having regard to the 1979 Act of Accession, and in particular paragraph 6 of Protocol No 4 on cotton attached thereto,

Having regard to the proposal from the European Commission,

After transmission of the draft legislative act to the national parliaments,

Having regard to the opinion of the Court of Auditors(1),                        

Having regard to the opinions of the European Economic and Social Committee(2),                        

Having regard to the opinion of the Committee of the Regions(3),                        

Acting in accordance with the ordinary legislative procedure(4),                        

Whereas:

(1)The Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee                              and the Committee of the Regions entitled "The CAP towards 2020: Meeting the food, natural resources and territorial challenges                              of the future" set out potential challenges, objectives and orientations for the Common Agricultural Policy ("the CAP") after                              2013. In the light of the debate on that Communication, the CAP should be reformed with effect from 1 January 2014. That reform                              should cover all the main instruments of the CAP, including Council Regulation (EC) No 73/2009(5). In view of the scope of the reform, it is appropriate to repeal Regulation (EC) No 73/2009 and to replace it with a new                              text. The reform should also streamline and simplify the relevant provisions.

(2)One of the core objectives, and one of the key requirements, of the CAP reform is the reduction of the administrative burden.                              This should be taken firmly into account when shaping the relevant provisions for the direct support scheme.

(3)All the basic elements pertaining to the payment of Union support to farmers should be included in this Regulation, which                              should also fix the conditions of access to payments which are inextricably linked to those basic elements.

(4)It is necessary to clarify that Regulation (EU) No 1306/2013 of the European Parliament and of Council(6) and the provisions adopted pursuant to it are to apply in relation to the measures set out in this Regulation. For the sake                              of consistency with other legal instruments relating to the CAP, some rules currently provided for in Regulation (EC) No 73/2009                              are now laid down in Regulation (EU) No 1306/2013, in particular the rules to guarantee compliance with the obligations laid                              down by direct payment provisions, including checks and the application of administrative measures and administrative penalties                              in the case of non-compliance, the rules related to cross-compliance such as the statutory management requirements, the good                              agricultural and environmental condition, the monitoring and evaluation of relevant measures and the rules related to the                              payment of advances and the recovery of undue payments.

(5)In order to supplement or amend certain non-essential elements of this Regulation, the power to adopt acts in accordance with                              Article 290 of the Treaty on the Functioning of the European Union (TFEU) should be delegated to the Commission. It is of                              particular importance that the Commission carry out appropriate consultations during its preparatory work, including at expert                              level. The Commission, when preparing and drawing-up delegated acts, should ensure a simultaneous, timely and appropriate                              transmission of relevant documents to the European Parliament and to the Council.

(6)This Regulation should contain a list of the direct payment support schemes covered by it. In order to take into account new                              legislation on support schemes which may be adopted after the entry into force of this Regulation, the power to adopt certain                              acts should be delegated to the Commission in respect of the amendment of that list.

(7)In order to ensure legal certainty, the power to adopt certain acts should be delegated to the Commission in respect of establishing                              the framework within which Member States are to define the criteria to be met by farmers in order to fulfil the obligation                              to maintain the agricultural area in a state suitable for grazing or cultivation, and the minimum activities to be carried                              out on areas naturally kept in a state suitable for grazing or cultivation, as well as the criteria to determine the predominance                              of grasses and other herbaceous forage and to determine the established local practices as regards permanent grassland and                              permanent pasture ('permanent grassland').

(8)With a view to ensuring that the amounts for the financing of the CAP comply with the annual ceilings referred to in Article                              16(1) of Regulation (EU) No 1306/2013, an adjustment of the level of direct support in any calendar year should be made as                              provided for under Article 25 of that Regulation. In order to ensure that it contributes to achieving the objective of a more                              balanced distribution of payments between small and large beneficiaries, the adjustment of the direct payments should only                              be applied to payments to be granted to farmers in excess of EUR 2 000 in the corresponding calendar year. Taking into account                              the levels of direct payments to farmers in Bulgaria, Croatia and Romania in the framework of the application of the phasing-in                              mechanism to all direct payments granted in those Member States, this instrument of financial discipline should only apply                              in Bulgaria and Romania from 1 January 2016, and in Croatia from 1 January 2022. Specific rules should be laid down in respect                              of that instrument of financial discipline and of certain other provisions in the case of a legal person, or a group of natural                              or legal persons, where national law provides for individual members' rights and obligations comparable to those of individual                              farmers who have the status of a head of holding, in order to strengthen the agricultural structures and promote the establishment                              of the legal persons or groups concerned.

(9)In order to ensure the correct application of the adjustment of direct payments with respect to financial discipline, the                              power to adopt certain acts should be delegated to the Commission in respect of rules on the basis for calculation of reductions                              to be applied by Member States to farmers pursuant to the application of the financial discipline.

(10)Experience acquired in the application of the various support schemes for farmers has shown that support was in a number of                              cases granted to natural or legal persons whose business purpose was not, or was only marginally targeted at an agricultural                              activity. To ensure that support is better targeted, Member States should refrain from granting direct payments to certain                              natural and legal persons unless such persons can demonstrate that their agricultural activity is not marginal. Member States                              should also have the possibility of not granting direct payments to other natural or legal persons whose agricultural activity                              is marginal. However, Member States should be allowed to grant direct payments to smaller part-time farmers, since those farmers                              contribute directly to the vitality of rural areas. Member States should also refrain from granting direct payments to natural                              or legal persons whose agricultural areas are mainly areas naturally kept in a state suitable for grazing or cultivation and                              who do not carry out a certain minimum activity.

(11)In order to guarantee the protection of the rights of farmers, the power to adopt certain acts should be delegated to the                              Commission in respect of laying down criteria for determining the cases where a farmer's agricultural area is to be considered                              to be mainly an area naturally kept in a state suitable for grazing or cultivation, criteria to establish the distinction                              between receipts resulting from agricultural and from non-agricultural activities and the amount of direct payments relevant                              for applying the marginality test, and criteria to be met by farmers in order to prove that their agricultural activity is                              not marginal.

(12)To avoid the excessive administrative burden caused by managing payments of small amounts, Member States should in general                              refrain from granting direct payments where the amount would be lower than EUR 100, or where the eligible area of the holding                              for which support is claimed would be less than one hectare. However, as Member States' farming structures vary considerably                              and may differ significantly from the average farming structure in the Union, Member States should be allowed to apply minimum                              thresholds that reflect their particular situation. Due to the very specific farming structure in the outermost regions and                              the smaller Aegean Islands, Member States should be able to decide whether any minimum threshold should apply in those regions.                              Moreover, Member States should opt for the implementation of one of the two types of minimum threshold, taking account of                              the particularities of the structures of their farming sectors. Since payment could be granted to farmers with so-called 'landless'                              holdings, the application of the hectare-based threshold would be ineffective. The support-related minimum amount should therefore                              apply to such farmers. To ensure the equal treatment of farmers in Bulgaria, Croatia and Romania whose direct payments are                              subject to phasing-in, the minimum threshold should, in those Member States, be based on the final amounts to be granted at                              the end of the phasing-in process.

(13)The distribution of direct income support among farmers is characterised by the allocation of disproportionate amounts of                              payments to a rather small number of large beneficiaries. Larger beneficiaries, due to their ability to exploit economies                              of size, do not require the same level of unitary support in order for the objective of income support to be efficiently achieved.                              Moreover, the potential to adapt makes it easier for larger beneficiaries to operate with lower levels of unitary support.                              Member States should therefore reduce by at least 5 % the part of the basic payment to be granted to farmers which exceeds                              EUR 150 000. To avoid disproportionate effects on large farms with high employment numbers, Member States may decide to take                              into account salaried labour intensity when applying the mechanism. In order to make such reduction of the support level effective,                              no advantage should be granted to farmers who artificially create the conditions to avoid its effects. The proceeds of the                              reduction of payments to large beneficiaries should remain in the Member States where they were generated and should be made                              available as Union support for measures financed under the European Agricultural Fund for Rural Development (EAFRD).

(14)Net ceilings should be determined for each Member State in order to limit the payments to be made to farmers following the                              application of the reduction of payments. To take into account the specific characteristics of CAP support granted in accordance                              with Regulation (EU) No 228/2013 of the European Parliament and of the Council(7) and Regulation (EU) No 229/2013 of the European Parliament and of the Council(8), and the fact that these direct payments are not subject to reduction of payments, the net ceiling for the Member States                              concerned should not include those direct payments.

(15)In order to take account of the developments relating to the total maximum amounts of direct payments that may be granted,                              including those resulting from the decisions to be taken by the Member States regarding transfers between the first and second                              pillars and the application of the reduction and, where applicable, capping of payments, as well as those resulting from the                              notifications to be made by Croatia regarding the de-mined land that has returned to use for agricultural activities, the                              power to adopt certain acts should be delegated to the Commission in respect of adapting the national and net ceilings set                              out in this Regulation.

(16)It should be specified that those provisions of this Regulation which could give rise to behaviour of a Member State capable                              of constituting State aid are excluded from the application of the State aid rules, given that the provisions concerned include                              appropriate conditions for the granting of support, or envisage the adoption of such conditions by the Commission, in order                              to prevent any undue distortion of competition.

(17)With a view to strengthening their rural development policy, Member States should be given the possibility to transfer funds                              from their direct payments ceiling to their support assigned for rural development. Member States should also be given the                              possibility to transfer funds from their support assigned for rural development to their direct payments ceiling. To ensure                              the effectiveness of this tool, Member States should be given the possibility to review their initial decision once, with                              effect from claim year 2018, provided that any decision based on such review does not entail any decrease in the amounts assigned                              for rural development.

(18)In order to achieve the objectives of the CAP, the support schemes may need to be adapted to changing developments, if necessary                              within short time-limits. Therefore, it is necessary to provide for a possible review of the support schemes, in particular                              in the light of economic developments or the budgetary situation, with the result that beneficiaries cannot assume that support                              conditions remain unchanged.

(19)Farmers in Member States which acceded to the Union on or after 1 May 2004 received direct payments following a phasing-in                              mechanism provided for in the respective Acts of Accession. For Bulgaria and Romania, such mechanism will still be in force                              in 2015, and for Croatia, it will be in force until 2021. Furthermore, those Member States were allowed to grant complementary                              national direct payments. The possibility for granting such payments should be maintained for Croatia and, as a complement                              to the basic payment scheme for Bulgaria and Romania, until they are fully phased-in. As regards authorising Croatia to grant                              complementary national direct payments, the Commission should be empowered to adopt implementing acts without applying Regulation                              (EU) No 182/2011 of the European Parliament and of the Council(9).

(20)Regulation (EC) No 73/2009, as amended by the Act of Accession of 2011, provides for a special national de-mining reserve                              for Croatia in order to finance, for a period of ten years after its accession to the Union, the allocation of payment entitlements                              to land which is de-mined and returned to agricultural use every year. It is appropriate to set the rules for determining                              the amounts allotted to funding support for that land under the support schemes provided for in this Regulation and the rules                              for the management of that reserve. In order to take account of the amounts resulting from the notifications to be made by                              Croatia regarding the de-mined land that has returned to use for agricultural activities, the power to adopt certain acts                              should be delegated to the Commission in respect of reviewing certain financial provisions applying to Croatia.

(21)In order to ensure a better distribution of support across agricultural land in the Union, including in those Member States                              which applied the single area payment scheme established under Regulation (EC) No 73/2009, a new basic payment scheme should                              replace the single payment scheme established under Council Regulation (EC) No 1782/2003(10), and continued under Regulation (EC) No 73/2009, which combined previously existing support mechanisms in a single scheme                              of decoupled direct payments. Such a move should, in principle, result in the expiry of payment entitlements obtained under                              those Regulations and the allocation of new ones. That allocation of new payment entitlements should be based, as a general                              rule, on the number of eligible hectares at the disposal of farmers in the first year of implementation of the scheme. However,                              Member States which currently operate the single payment scheme on a regional or regional hybrid basis should have the possibility                              of keeping their existing payment entitlements. In order to avoid a situation in a given Member State in which an increase                              in the eligible area dilutes disproportionately the amount of direct payments per hectare and thus affects the internal convergence                              process, Member States should be allowed, when carrying out the first allocation of payment entitlements, to apply certain                              limitations for the purpose of establishing the number of payment entitlements.

(22)Due to the successive integration of various sectors into the single payment scheme and the subsequent period of adjustment                              granted to farmers, it has become increasingly difficult to justify the existence of significant individual differences in                              the level of support per hectare resulting from use of historical references. Therefore, direct income support should be more                              equitably distributed between Member States, by reducing the link to historical references and having regard to the overall                              context of the Union budget. To ensure a more equal distribution of direct support, while taking account of the differences                              that still exist in wage levels and input costs, the levels of direct support per hectare should be progressively adjusted.                              Member States that have direct payments below the level of 90 % of the Union average should close one third of the gap between                              their current level and this level, with all Member States arriving at a minimum level by financial year 2020. This convergence                              should be financed proportionally by all Member States that have direct payment levels above the Union average level.

(23)In addition, as a general rule, all payment entitlements activated in 2019 in a Member State or in a region should have a                              uniform unit value. However, in order to avoid disruptive financial consequences for farmers, Member States should be allowed                              to take historical factors into account when calculating the value of payment entitlements which farmers should have in 2019,                              provided that no payment entitlements in 2019 have a value lower than 60 % of the average. Member States should finance this                              convergence by reducing, on the basis of objective and non-discriminative criteria which they are to establish, the value                              of payment entitlements that exceeds the 2019 average. In this context and in order to avoid unacceptably disruptive losses                              for certain farmers, Member States may limit this reduction to 30 % of the initial value of the concerned entitlements, even                              if such a limitation does not allow for all payment entitlements to reach 60 % of the average value for 2019. Except for those                              Member States that opt for a uniform unit value from the first year of implementation of the scheme, the convergence should                              be made in equal steps. The convergence of the payment entitlements with a value above the average should also take account                              of the estimated resources available for payment entitlements. However, for those Member States which keep their existing                              payment entitlements and which have already opted for convergence steps in accordance with Article 63(3) of Regulation (EC)                              No 1782/2003, those convergence steps should be implemented, where applicable, and the value of all payment entitlements should                              be adjusted to take account of the estimated resources available for payment entitlements.

(24)The experience gained through applying the single payment scheme has shown that some of its main elements should be kept,                              including the determination of national ceilings to ensure that the total level of support does not exceed current budgetary                              constraints. Member States should also continue to operate a national reserve, or should be allowed to establish regional                              reserves. Such national or regional reserves should be used, as a matter of priority, to facilitate the participation of young                              farmers and farmers commencing their agricultural activity in the scheme and using them should be allowed in order to take                              account of certain other specific situations. Rules on the transfer and use of payment entitlements should be retained.

(25)The experience gained through applying Regulation (EC) No 73/2009 has shown that Member States did not use the entire amount                              of the funds available under the national ceilings laid down in that Regulation. While, compared to the system under that                              Regulation, this Regulation reduces the risk of unspent funds Member States should nonetheless have the possibility of distributing                              payment entitlements for a higher value than the amount available for their basic payment scheme, in order to facilitate a                              more efficient use of the funds. Member States should therefore be allowed, within certain common limits and in respect of                              the net ceilings for direct payments, to calculate the necessary amount by which their basic payment ceiling may be increased.

(26)As a general rule, any agricultural area of the holding, including areas that were not in good agricultural condition on 30                              June 2003 in Member States acceding to the Union on 1 May 2004 that opted to apply the single area payment scheme, that is                              used for an agricultural activity is eligible to benefit from the basic payment. Given the potential for non-agricultural                              activities to contribute to the income diversification of agricultural holdings and to the vitality of rural areas, an agricultural                              area of a holding that is used also for non-agricultural activities is to be considered eligible on condition that it is used                              predominantly for agricultural activities. For the purpose of assessing that predominance, common criteria should be set for                              all Member States. In this context and in order to ensure better targeting of direct payments, it should be possible for Member                              States to draw up, in the interests of legal certainty and clarity, a list of areas which are predominantly used for non-agricultural                              activities and are hence ineligible. Furthermore, in order to maintain the eligibility of land that was eligible for the purpose                              of activating set-aside entitlements prior to the abolition of the set-aside obligation, it should be provided that certain                              afforested areas, including those afforested under national schemes complying with the relevant rules in Council Regulation                              (EC) No 1698/2005(11) or Regulation (EU) No 1305/2013 of the European Parliament and of the Council(12), or areas subject to certain environmental commitments, are eligible to benefit from the basic payment.

(27)In order to avoid a situation in which, in a given Member State, an increase in the eligible area dilutes disproportionately                              the amount of direct payments per hectare and thus affects the internal convergence process, Member States should be allowed                              to use a reduction coefficient for determining the eligible area of permanent grassland where grasses and other herbaceous                              forage are traditionally not predominant in grazing areas, but form part of established local practices.

(28)As regards hemp, specific measures should be kept to ensure that illegal crops cannot be hidden among the crops eligible for                              the basic payment, thereby adversely affecting the market for hemp. Hence, payments should continue to be granted only for                              areas sown with varieties of hemp offering certain guarantees with regard to its psychotropic substance content.

(29)In order to ensure legal certainty, and in order to clarify the specific situations that may arise in the application of the                              basic payment scheme, the power to adopt certain acts should be delegated to the Commission in respect of rules on eligibility                              and access in respect of the basic payment scheme of farmers, in the case of inheritance and anticipated inheritance, inheritance                              under a lease, change of legal status or denomination, transfer of payment entitlements, and in the case of a merger or scission                              of the holding and in the case of a contract clause regarding the right to receive payment entitlements in the first year                              of allocation of payment entitlements. Moreover, that delegation of power should also cover rules on the calculation of the                              value and number or on the change in the value of payment entitlements in relation to the allocation of payment entitlements,                              including rules on the possibility of a provisional value and number or of a provisional increase of payment entitlements                              allocated on the basis of the application from the farmer, on the conditions for establishing the provisional and definitive                              value and number of the payment entitlements and on the cases where a sale or lease contract could affect the allocation of                              payment entitlements. Furthermore, that delegation of power should also cover rules on the establishment and calculation of                              the value and number of payment entitlements received from the national reserve or regional reserves; rules on the modification                              of the unit value of payment entitlements in the case of fractions of payment entitlements and the transfer of payment entitlements                              without land. In addition, that delegation of power should also cover criteria for the allocation of payment entitlements                              to farmers who did not receive direct payments in 2013 or pursuant to the use of the national or regional reserve; criteria                              for applying limitations on the number of payment entitlements to be allocated; and criteria for setting the reduction coefficient                              for conversion of certain permanent grassland to eligible hectares.

(30)In order to ensure the proper management of payment entitlements, the power to adopt certain acts should be delegated to the                              Commission in respect of rules on the content of the declaration and the requirements for the activation of payment entitlements.

(31)In order to preserve public health, the power to adopt certain acts should be delegated to the Commission in respect of laying                              down rules making the granting of payments conditional upon the use of certified seeds of certain hemp varieties and defining                              the procedure for the determination of hemp varieties and the verification of their tetrahydrocannabinol content.

(32)In view of the considerable administrative, technical and logistical difficulties the transition to the basic payment scheme                              represents for the Member States applying the single area payment scheme under Regulation (EC) No 73/2009, they should be                              allowed to apply the single area payment scheme for the purpose of granting the basic payment for a further transitional period                              until the end of 2020 at the latest. If a Member State decides to introduce the basic payment scheme by 2018, it may opt for                              differentiating the payments under the single area payment scheme according to the level of certain payments granted in 2014                              under the regimes for specific support and separate payments provided for in Regulation (EC) No 73/2009, or, in the case of                              Cyprus, under the sector-specific financial envelopes for transitional national aid.

(33)In order to guarantee the protection of the rights of beneficiaries and in order to clarify the specific situations that may                              arise in the application of the single area payment scheme, the power to adopt certain acts should be delegated to the Commission                              in respect of laying down rules on eligibility and access in respect of the single area payment scheme of farmers.

(34)In Member States applying the single area payment scheme which were allowed to grant transitional national aid, such aid has                              played an important role in supporting the income of farmers in specific sectors. For that reason, and in order to avoid a                              sudden and substantial decrease of support from 2015 in those sectors benefiting, until 2014, from transitional national aid,                              it is appropriate to provide, in those Member States, for the possibility to grant that aid as a complement to the single                              area payment scheme. In order to ensure the continuity of the support with the transitional national aid granted so far, it                              is appropriate to limit the conditions to those applicable in 2013 to that aid, or in the case of Bulgaria and Romania to                              complementary national direct payments, authorised by the Commission following the requests from Member States. It is also                              appropriate to limit the maximum amounts of aid by sector, compared to their levels in 2013, to ensure a steady decrease of                              the aid levels and to ensure their compatibility with the convergence mechanism.

(35)Specific rules should be provided for the first allocation and for the calculation of the value of payment entitlements when                              Member States having applied the single area payment scheme pursuant to this Regulation introduce the basic payment scheme.                              In order to ensure a smooth transition between those schemes, the power to adopt certain acts should be delegated to the Commission                              in respect of further rules on the introduction of the basic payment scheme in Member States having applied the single area                              payment scheme.

(36)Taking into account the need for the unitary support to farmers with smaller holdings to be sufficient in order to achieve                              the objective of income support effectively, Member States should be allowed to redistribute direct support between farmers                              by granting them an extra payment for the first hectares.

(37)One of the objectives of the new CAP is the enhancement of environmental performance through a mandatory "greening" component                              of direct payments which will support agricultural practices beneficial for the climate and the environment applicable throughout                              the Union. For that purpose, Member States should use part of their national ceilings for direct payments in order to grant,                              on top of the basic payment, an annual payment which may take account of internal convergence in the Member State or region,                              for compulsory practices to be followed by farmers addressing, as a priority, both climate and environment policy goals. Those                              practices should take the form of simple, generalised, non-contractual and annual actions that go beyond cross-compliance                              and that are linked to agriculture, such as crop diversification, the maintenance of permanent grassland, including traditional                              orchards where fruit trees are grown in low density on grassland, and the establishment of ecological focus areas. In order                              to better achieve the objectives of "greening" and to allow for its efficient administration and control, such practices should                              apply to the whole eligible area of the holding. The compulsory nature of those practices should also concern farmers whose                              holdings are fully or partly situated in "Natura 2000" areas covered by Council Directive 92/43/EEC(13) and by Directive 2009/147/EC of the European Parliament and of the Council(14), or in areas covered by Directive 2000/60/EC of the European Parliament and of the Council(15), as long as those practices are compatible with the objectives of those Directives.

(38)Given the recognised environmental benefits of the organic farming systems, farmers should, for those units of their holding                              on which they fulfil the conditions laid down in Council Regulation (EC) No 834/2007(16), benefit from the "greening" component without needing to fulfil any further obligation.

(39)Failure to respect the "greening" component should lead to penalties on the basis of Regulation (EU) No 1306/2013.

(40)In order to accommodate the diversity of agricultural systems and the different environmental situations across the Union,                              it is justified to recognise, in addition to the three greening practices established in this Regulation, practices covered                              by agri-environment-climate measures or certification schemes that are similar to greening and that yield an equivalent or                              higher level of benefit for the climate and the environment. For reasons of legal clarity these practices should be laid down                              in an Annex to this Regulation. Member States should decide whether to offer to farmers the possibility of using equivalent                              practices and the greening practices established in this Regulation in order to require the farmer to observe the practices                              best suited to ensure the objectives of the measure and they should notify the Commission of their decisions. For reasons                              of legal certainty, the Commission should assess whether the practices covered by the notified equivalent measures are covered                              by the Annex. If the Commission considers this not to be the case, it should notify Member States accordingly by means of                              an implementing act adopted without applying Regulation (EU) No 182/2011. In order to allow a simpler implementation of equivalence                              and for reasons of controllability, rules should be laid down as regards the area coverage of equivalent measures, taking                              into account the specific characteristics of agri-environment-climate measures and certification schemes. In order to ensure                              that equivalent practices are properly applied and that double funding is avoided, the power to adopt certain acts should                              be delegated to the Commission for the purpose of adding practices to the list of equivalent practices, establishing requirements                              for the national or regional certification schemes and, where necessary, establishing detailed rules for the calculation of                              related amounts.

(41)The obligations relating to crop diversification should be applied in a way that takes into account the difficulty for smaller                              farms to diversify, while continuing to make progress towards enhanced environmental benefit, and in particular the improvement                              of soil quality. Exceptions should be provided for farms that already fulfil the objectives of crop diversification as a result                              of being covered to a significant extent by grassland or fallowland, for specialised farms rotating their parcels each year                              or for farms that because of their geographical localisation would have excessive difficulties in introducing a third crop.                              In order to ensure that the obligations referred to in the crop diversification measure are applied in a proportionate and                              non-discriminatory way and lead to an enhanced environmental protection, the power to adopt certain acts should be delegated                              to the Commission in respect of recognising further genera and species and laying down rules concerning the application of                              the precise calculation of shares of different crops.

(42)For the sake of the environmental benefits of permanent grassland and in particular carbon sequestration, provision should                              be made for the maintenance of permanent grassland. This protection should consist of a ban on ploughing and conversion on                              the environmentally most sensitive areas in "Natura 2000" areas covered by Directives 92/43/EEC and 2009/147/EC, and of a                              more general safeguard, based on a ratio of permanent grassland, against conversion to other uses. Member States should be                              empowered to delineate further environmentally sensitive areas not covered by those Directives. In addition, they should choose                              at which territorial level the ratio should apply. In order to assure an efficient protection of permanent grassland, the                              power to adopt certain acts should be delegated to the Commission for the purpose of defining the framework for the designation,                              by Member States, of permanent grasslands not covered by Directives 92/43/EEC or 2009/147/EC.

(43)In order to ensure that the ratio of permanent grassland to the total agricultural area is correctly determined and maintained,                              the power to adopt certain acts should be delegated to the Commission in respect of the establishment of detailed methods                              for the determination of that ratio, detailed rules on maintenance of permanent grassland and the relevant time frame for                              an obligation upon individual farmers to reconvert land.

(44)Ecological focus areas should be established, in particular, in order to safeguard and improve biodiversity on farms. The                              ecological focus area should therefore consist of areas directly affecting biodiversity such as land lying fallow, landscape                              features, terraces, buffer strips, afforested areas and agro-forestry areas, or indirectly affecting biodiversity through                              a reduced use of inputs on the farm, such as areas covered by catch crops and winter green cover. The obligations laid down                              in respect of the ecological focus area should be applied in a way that avoids putting a disproportionate burden on smaller                              farms in comparison to the additional enhanced environmental benefit. Exceptions should be provided for farms that already                              fulfil the objectives of ecological focus areas by being covered to a significant extent by grassland or fallowland. Exceptions                              should also be provided, in the case of predominantly forested Member States, for farmers that pursue an agricultural activity                              in areas facing natural constraints in certain predominantly forested areas where there is a significant risk of land abandonment.                              In addition, provision should be made for the possibility for Member States and farmers to implement at a regional or collective                              level the obligation in order to obtain adjacent ecological focus areas that are more beneficial for the environment. For                              the sake of simplification, Member States should have the option to standardise the measurement of the ecological focus areas.

(45)In order to ensure the that ecological focus areas are established in an efficient and coherent way, while taking into account                              Member States' specific characteristics, the power to adopt certain acts should be delegated to the Commission in respect                              of laying down further criteria for the qualification of areas as ecological focus areas; recognising other types of ecological                              focus areas; establishing conversion and weighting factors for certain types of ecological focus area; establishing rules                              for the implementation, by Member States, of a part of the ecological focus area at regional level; laying down rules for                              collective implementation of the obligation to keep ecological focus areas by holdings in close proximity; establishing the                              framework for the criteria, to be defined by Member States, for identifying such close proximity; and establishing the methods                              of determination of the ratio of forest to agricultural land. When adding other types of ecological focus area, the Commission                              should ensure that they aim to improve the general environmental performance of the holding, in particular as regards biodiversity,                              the improvement of soil and water quality, the preservation of landscape and meeting the climate change mitigation and adaptation                              objectives.

(46)In order to promote the sustainable development of agriculture in areas with specific natural constraints, Member States should                              be able to use part of their direct payments ceilings to grant an annual area-based payment, on top of the basic payment,                              to all farmers operating in those areas or in some of those areas, where decided by the Member State. That payment should                              not replace the support given under rural development programmes and should not be granted to farmers in areas which were                              designated in accordance with Regulation (EC) No 1698/2005 but have not been designated in accordance with Regulation (EU)                              No 1305/2013.

(47)The creation and development of new economic activity in the agricultural sector by young farmers is financially challenging                              and constitutes an element that should be considered in the allocation and targeting of direct payments. This development                              is essential for the competitiveness of the agricultural sector in the Union and, for that reason, an income support to young                              farmers commencing their agricultural activities should be established in order to facilitate the initial establishment of                              young farmers and the structural adjustment of their holdings after the initial setting up. For that purpose, Member States                              should use part of their national ceilings for direct payments to grant to young farmers an annual payment, on top of the                              basic payment. Member States should be able to decide on a calculation method for that payment and, if that method implies                              an obligation to set a limit on the payment per farmer, such a limit is to be set in respect of the general principles of                              Union law. Since it should only cover the initial period of the life of the business and should not become an operating aid,                              that payment should only be granted during a maximum period of five years. It should be available to young farmers commencing                              their agricultural activity who are no more than 40 years of age in the year of the first submission of the application under                              the basic payment scheme or under the single area payment scheme.

(48)In order to guarantee the protection of the rights of beneficiaries and to avoid discrimination between them, the power to                              adopt certain acts should be delegated to the Commission in respect of defining the conditions under which a legal person                              may be considered eligible for receiving the payment for young farmers.

(49)Member States should be allowed to use part of their national ceilings for direct payments for coupled support in certain                              sectors or regions in clearly defined cases. The resources that may be used for any coupled support should be limited to an                              appropriate level, while allowing such support to be granted in Member States in their specific sectors or regions facing                              particular situations where specific types of farming or specific agricultural sectors are particularly important for economic,                              environmental and/or social reasons. Member States should be allowed to use up to 8 % of their national ceilings for this                              support, or 13 % where their level of coupled support exceeds 5 % in at least one of the years of the period 2010-2014 or                              where they apply the single area payment scheme until 31 December 2014. Furthermore, in order to maintain the protein-based                              autonomy of the breeding sector, Member States which decide to use at least 2 % of their national ceilings to support the                              production of protein crops should be allowed to increase those percentages by up to two percentage points. In duly justified                              cases where certain sensitive needs in a sector or a region are demonstrated, and upon approval by the Commission, Member                              States should be allowed to use more than 13 % of their national ceiling. As an alternative to those percentages, Member States                              may choose to use up to EUR 3 million per year for financing the coupled support. Coupled support should only be granted to                              the extent necessary to create an incentive to maintain current levels of production in the sectors or regions concerned.                              That support should also be available to farmers holding, on31 December 2013, special payment entitlements allocated under                              Regulation (EC) No 1782/2003 and Regulation (EC) No 73/2009, and who do not have eligible hectares for the activation of payment                              entitlements. As regards the approval of voluntary coupled support exceeding 13 % of the annual national ceiling fixed per                              Member State, the Commission should be further empowered to adopt implementing acts without applying Regulation (EU) No 182/2011.

(50)In order to ensure efficient and targeted use of Union funds and to avoid double funding under other similar support instruments,                              the power to adopt certain acts should be delegated to the Commission in respect of establishing the conditions for granting                              voluntary coupled support, as well as rules on its consistency with other Union measures and on the cumulation of support.

(51)In order to ensure against any risk of disruption to production in the cotton producing regions, a part of support to the                              cotton sector under Regulation (EC) No 73/2009 continued to be linked to the cultivation of cotton through a crop-specific                              payment per eligible hectare, taking into account all relevant factors. This situation should be maintained in accordance                              with the objectives set out in Protocol No 4 on cotton attached to the 1979 Act of Accession.

(52)In order to ensure the efficient application and management of the crop-specific payment for cotton, the power to adopt certain                              acts should be delegated to the Commission in respect of establishing rules and conditions for the authorisation of land and                              varieties for the purposes of the crop-specific payment for cotton; rules on the conditions for the granting of that payment,                              on the eligibility requirements and the agronomic practices; criteria for the approval of interbranch organisations; obligations                              for producers; and rules governing the situation where the approved interbranch organisation does not satisfy those criteria.

(53)Chapter 2 of Council Regulation (EC) No 637/2008(17) required each cotton producing Member State to submit to the Commission either every four years and for the first time by                              1 January 2009 a draft four-year restructuring programme, or by 31 December 2009 a single draft modified eight-year restructuring                              programme. Experience has shown that the restructuring of the cotton sector would be better served through other measures,                              including those under rural development programming financed under Regulation (EU) No 1305/2013. Such measures would also                              allow for a greater co-ordination with measures in other sectors. The acquired rights and legitimate expectations of undertakings                              already involved in restructuring programmes should, however, be respected. Therefore, the ongoing programmes of four or eight                              years should be allowed to run their course, with no possiblity of extension. Funds available from the four-year programmes                              could then be integrated into the available Union funds for measures under rural development from 2014. Given the programming                              period, funds available after the end of the eight-year programmes would not be useful in rural development programmes in                              2018, and could therefore be more usefully transferred to support schemes under this Regulation, as already provided for in                              Regulation (EC) No 637/2008. Regulation (EC) No 637/2008 will therefore become obsolete from 1 January 2014 or 1 January 2018                              as regards Member States which have, respectively, four or eight-year programmes and should therefore be repealed.

(54)Member States should be allowed to establish a simple and specific scheme for small farmers in order to reduce the administrative                              costs linked to the management and control of direct support. For that purpose, Member States should be allowed to establish                              either a lump-sum payment that replaces all direct payments, or a payment based on the amount due to the farmers each year.                              Rules simplifying formalities should be introduced by reducing, inter alia, the obligations imposed on small farmers, such                              as those related to the application for support, to agricultural practices beneficial for the climate and the environment,                              to cross-compliance and to controls as laid down in Regulation (EU) No 1306/2013 without jeopardising the achievement of the                              overall objectives of the reform, it being understood that Union legislation as referred to in Annex II to Regulation (EU)                              No 1306/2013 applies to small farmers. The objective of that scheme should be to support the existing agricultural structure                              of small farms in the Union without countering the development towards more competitive structures. For that reason, access                              to the scheme should, in principle, be limited to existing holdings. Participation of farmers in the scheme should be optional.                              However, in order to further increase the impact of the scheme in terms of simplification, Member States should be allowed                              to include certain farmers in the scheme automatically, subject to the possibility for them to opt-out.

(55)In order to ensure legal certainty, the power to adopt certain acts should be delegated to the Commission in respect of establishing                              conditions for participation in the small farmers scheme if the situation of the participating farmer changes.

(56)In the interest of simplification and in order to take into account the specific situation of the outermost regions, direct                              payments in those regions should be managed within the support programmes established by Regulation (EU) No 228/2013. As a                              consequence, provisions in this Regulation relating to the basic payment and related payments, to coupled support and to the                              small farmers scheme should not apply to those regions.

(57)Notifications are needed from Member States for the purpose of applying this Regulation, and for the purpose of monitoring,                              analysing and managing direct payments. In order to ensure the correct application of the rules set out in this Regulation                              and to make such notifications fast, efficient, accurate, cost-effective and compatible with the protection of personal data,                              the power to adopt certain acts should be delegated to the Commission in respect of establishing the necessary measures regarding                              notifications to be made by Member States to the Commission or for the purpose of checking, controlling, monitoring, evaluating                              and auditing direct payments and for complying with requirements laid down in international agreements, including notification                              requirements under those agreements and in respect of further rules on the nature and type of the information to be notified,                              the categories of data to be processed and maximum period of retention, the access rights to the information or information                              systems and the conditions of publication of the information.

(58)Personal data collected for the purposes of the application of direct payments should be processed in a way that is compatible                              with those purposes. It should also be made anonymous, be aggregated when processed for monitoring or evaluation purposes,                              and be protected in accordance with Union law concerning the protection of individuals with regard to the processing of personal                              data and on the free movement of such data, in particular Directive 95/46/EC of the European Parliament and of the Council(18) and Regulation (EC) No 45/2001 of the European Parliament and of the Council(19). Data subjects should be informed of such processing and of their data protection rights.

(59)The European Data Protection Supervisor was consulted and delivered an opinion on 14 December 2011(20).

(60)In order to ensure a smooth transition from the arrangements provided for in Regulation (EC) No 73/2009 to those laid down                              in this Regulation, the power to adopt certain acts should be delegated to the Commission in respect of establishing the necessary                              measures to protect any acquired rights and legitimate expectations of farmers.

(61)In order to ensure uniform conditions for the implementation of this Regulation and to avoid unfair competition or discrimination                              between farmers, implementing powers should be conferred on the Commission in respect of: setting the amount to be included                              in the special national de-mining reserve for Croatia; fixing the annual national ceiling for the basic payment scheme; adopting                              rules on applications for allocation of payment entitlements; adopting measures regarding the reversion of non-activated payment                              entitlements to the national reserve; adopting modalities of the notification of transfer of payment entitlements to the national                              authorities and the deadlines within which such notifications are to take place; fixing the annual national ceiling for the                              single area payment scheme; adopting rules on applications for allocation of payment entitlements submitted in the year of                              allocation of payment entitlements where Member States change to the basic payment scheme; fixing annual ceilings for the                              redistributive payment. Those powers should be exercised in accordance with Regulation (EU) No 182/2011.

(62)In order to ensure uniform conditions for the implementation of this Regulation and to avoid unfair competition or discrimination                              between farmers, implementing powers should also be conferred on the Commission in respect of: adopting rules on the procedure,                              including on the timetables for their submission, for the Member States' notifications and the Commission assessment as regards                              equivalent practices; adopting certain limits within which the obligation to maintain permanent grassland is considered to                              be being complied with; setting out the annual ceiling for the payment for agricultural practices beneficial for the climate                              and the environment; setting out the annual ceiling for the payment for areas with natural constraints; setting out the annual                              ceiling for the payment for young farmers. Those powers should be exercised in accordance with Regulation (EU) No 182/2011.

(63)In order to ensure uniform conditions for the implementation of this Regulation and to avoid unfair competition or discrimination                              between farmers, implementing powers should also be conferred on the Commission in respect of: setting out the annual ceilings                              for the voluntary coupled support; adopting rules on the procedure for the assessment and approval of decisions in the framework                              of the voluntary coupled support; adopting rules on the authorisation procedure and on the notifications to the producers                              related to the authorisation of land and varieties for the purposes of the crop-specific payment for cotton; adopting rules                              on the calculation of the reduction of the amount of the crop-specific payment for cotton; adopting rules concerning general                              notification requirements and methods; and adopting necessary and justifiable measures to resolve specific problems in an                              emergency. Those powers should be exercised in accordance with Regulation (EU) No 182/2011.

(64)In order to solve urgent problems occurring in one or more Member States while ensuring the continuity of the direct payments                              system, the Commission should adopt immediately applicable implementing acts where, in duly justified cases, extraordinary                              circumstances affect the granting of support and jeopardise the effective implementation of the payments under the support                              schemes listed in this Regulation.

(65)Since the objectives of this Regulation cannot be sufficiently achieved by the Member States but can rather, by reason of                              the links between this Regulation and the other instruments of the CAP, the disparities between the various rural areas and                              the limited financial resources of the Member States in an enlarged Union, be better achieved at Union level through the multiannual                              guarantee of Union financing and by concentrating on clearly identified priorities, the Union may adopt measures, in accordance                              with the principle of subsidiarity as set out in Article 5 of the Treaty on European Union (TEU). In accordance with the principle                              of proportionality as set out in that Article, this Regulation does not go beyond what is necessary in order to achieve those                              objectives.

(66)Given that Regulation (EC) No 73/2009 is to continue to apply in 2014, this Regulation should apply in general from 1 January                              2015. However, the provisions of this Regulation on flexibility between pillars provide for the possibility for Member States                              to take decisions and notify them to the Commssion by 31 December 2013. In addition, some other provisions of this Regulation                              require action to be taken in 2014. Those provisions should, therefore, apply from the entry into force of this Regulation.

(67)Due to the urgency of preparing the smooth implementation of the measures envisaged, this Regulation should enter into force                              on the day of its publication in the *Official Journal of the European Union*,

HAVE ADOPTED THIS REGULATION:

## TITLE IU.K.**SCOPE AND DEFINITIONS**

### Article 1U.K.Scope

This Regulation establishes:

common rules on payments granted directly to farmers under the support schemes listed in Annex I ("direct payments");

specific rules concerning:

a basic payment for farmers ("the basic payment scheme" and a transitional simplified scheme, "the single area payment scheme");

a voluntary transitional national aid for farmers;

a voluntary redistributive payment;

a payment for farmers observing agricultural practices beneficial for the climate and the environment;

a voluntary payment for farmers in areas with natural constraints;

a payment for young farmers commencing their agricultural activity;

a voluntary coupled support scheme;

a crop-specific payment for cotton;

a voluntary simplified scheme for small farmers;

a framework within which Bulgaria, Croatia and Romania may complement direct payments.

### Article 2U.K.Amendment of Annex I

In order to ensure legal certainty, the Commission shall be empowered to adopt delegated acts in accordance with Article 70                     amending the list of support schemes set out in Annex I to the extent necessary to take account of any new legislative acts                     on support schemes which may be adopted after the adoption of this Regulation.                  

### Article 3U.K.Application to the outermost regions and the smaller Aegean islands

Article 11 shall not apply to the regions of the Union referred to in Article 349 TFEU ("the outermost regions") and to the                     direct payments granted in the smaller Aegean islands in accordance with Regulation (EU) No 229/2013.                  

Titles III, IV and V of this Regulation shall not apply to the outermost regions.

### Article 4U.K.Definitions and related provisions

1.For the purposes of this Regulation, the following definitions shall apply:                  

(a)"farmer" means a natural or legal person, or a group of natural or legal persons, regardless of the legal status granted to                        such group and its members by national law, whose holding is situated within the territorial scope of the Treaties, as defined                        in Article 52 TEU in conjunction with Articles 349 and 355 TFEU, and who exercises an agricultural activity;                  

(b)"holding" means all the units used for agricultural activities and managed by a farmer situated within the territory of the                        same Member State;                  

(c)"agricultural activity" means:                  

production, rearing or growing of agricultural products, including harvesting, milking, breeding animals, and keeping animals                              for farming purposes,                           

maintaining an agricultural area in a state which makes it suitable for grazing or cultivation without preparatory action                              going beyond usual agricultural methods and machineries, based on criteria established by Member States on the basis of a                              framework established by the Commission, or                           

carrying out a minimum activity, defined by Member States, on agricultural areas naturally kept in a state suitable for grazing                              or cultivation;                           

(d)"agricultural products" means the products, with the exception of fishery products, listed in Annex I to the Treaties as well                        as cotton;                  

(e)"agricultural area" means any area taken up by arable land, permanent grassland and permanent pasture, or permanent crops;                  

(f)"arable land" means land cultivated for crop production or areas available for crop production but lying fallow, including                        areas set aside in accordance with Articles 22, 23 and 24 of Regulation (EC) No 1257/1999, with Article 39 of Regulation (EC)                        No 1698/2005 and with Article 28 of Regulation (EU) No 1305/2013, irrespective of whether or not that land is under greenhouses                        or under fixed or mobile cover;                  

(g)"permanent crops" means non-rotational crops other than permanent grassland and permanent pasture that occupy the land for                        five years or more and yield repeated harvests, including nurseries and short rotation coppice;                  

(h)"permanent grassland and permanent pasture" (together referred to as "permanent grassland") means land used to grow grasses                        or other herbaceous forage naturally (self-seeded) or through cultivation (sown) and that has not been included in the crop                        rotation of the holding for five years or more; it may include other species such as shrubs and/or trees which can be grazed                        provided that the grasses and other herbaceous forage remain predominant as well as, where Member States so decide, land which                        can be grazed and which forms part of established local practices where grasses and other herbaceous forage are traditionally                        not predominant in grazing areas;                  

(i)"grasses or other herbaceous forage" means all herbaceous plants traditionally found in natural pastures or normally included                        in mixtures of seeds for pastures or meadows in the Member State, whether or not used for grazing animals;                  

(j)"nurseries" means the following areas of young ligneous (woody) plants grown in the open air for subsequent transplantation:                  
          -  (j)vine and root-stock nurseries, 
          -  fruit tree and berries nurseries, 
          -  ornamental nurseries, 
          -  commercial nurseries of forest trees excluding those for the holding's own requirements grown within woodland, 
          -  nurseries of trees and bushes for planting in gardens, parks, at the roadside and on embankments (e.g. hedgerow plants, rose                           trees and other ornamental bushes, ornamental conifers), including in all cases their stocks and young seedlings;                         

(k)"short rotation coppice" means areas planted with tree species of CN code 0602 90 41 to be defined by Member States that consist                        of woody, perennial crops, the rootstock or stools of which remain in the ground after harvesting, with new shoots emerging                        in the following season and with a maximum harvest cycle to be determined by the Member States;                  

(l)"sale" means the sale or any other definitive transfer of ownership of land or payment entitlements; it does not include the                        sale of land where land is transferred to public authorities or for use in the public interest and where the transfer is carried                        out for non-agricultural purposes;                  

(m)"lease" means a rental agreement or similar temporary transaction;                  

(n)"transfer" means the lease or sale or actual inheritance or anticipated inheritance of land or payment entitlements or any                        other definitive transfer thereof; it does not cover the reversion of entitlements upon expiry of a lease.                  

2.Member States shall:                  

(a)establish criteria to be met by farmers in order to fulfil the obligation to maintain an agricultural area in a state suitable                        for grazing or cultivation, as referred to in point (c)(ii) of paragraph 1;                  

(b)where applicable in a Member State, define the minimum activity to be carried out on agricultural areas naturally kept in                        a state suitable for grazing or cultivation, as referred to in point (c)(iii) of paragraph 1;                  

(c)define the tree species qualifying for short rotation coppice and determine the maximum harvest cycle in respect of those                        tree species, as referred to in point (k) of paragraph 1.                  

Member States may decide that land which can be grazed and which forms part of established local practices where grasses and                     other herbaceous forage are traditionally not predominant in grazing areas is to be considered to be permanent grassland,                     as referred to in point (h) of paragraph 1.                  

3.In order to ensure legal certainty, the Commission shall be empowered to adopt delegated acts in accordance with Article 70                        establishing:                  

(a)the framework within which Member States are to establish the criteria to be met by farmers in order to fulfil the obligation                        to maintain an agricultural area in a state suitable for grazing or cultivation, as referred to in point (c)(ii) of paragraph                        1;                  

(b)the framework within which Member States shall define the minimum activity to be carried out on agricultural areas naturally                        kept in a state suitable for grazing or cultivation, as referred to in point (c)(iii) of paragraph 1;                  

(c)the criteria to determine the predominance of grasses and other herbaceous forage and the criteria to determine the established                        local practices referred to in point (h) of paragraph 1.                  

## TITLE IIU.K.**GENERAL PROVISIONS ON DIRECT PAYMENTS**

### *CHAPTER 1*U.K.***Common rules on direct payments***

#### Article 5U.K.General common agricultural policy provisions

Regulation (EU) No 1306/2013 and the provisions adopted pursuant thereto shall apply to the schemes provided for in this Regulation.

#### Article 6U.K.National ceilings

1.For each Member State and for each year, the national ceiling comprising the total value of all allocated payment entitlements,                        of the national reserve or the regional reserves and of the ceilings fixed in accordance with Articles 42, 47, 49, 51 and                        53 shall be as set out in Annex II.                  

Where a Member State makes use of the option provided for in Article 22(2), the national ceiling set out in Annex II for that                     Member State for the respective year may be exceeded by the amount calculated in accordance with that paragraph.                  

2.By way of derogation from paragraph 1, for each Member State applying the single area payment scheme and for each year, the                        national ceiling, comprising the ceilings fixed in accordance with Articles 36, 42, 47, 49, 51 and 53, shall be as set out                        in Annex II.                  

3.In order to take account of the developments relating to the total maximum amounts of direct payments that may be granted,                        including those resulting from the decisions to be taken by Member States in accordance with Article 14 and those resulting                        from the application of Article 20(2), the Commission shall be empowered to adopt delegated acts in accordance with Article                        70 adapting the national ceilings set out in Annex II.                  

#### Article 7U.K.Net ceilings

1.Without prejudice to Article 8, the total amount of direct payments which may be granted in a Member State pursuant to Titles                        III, IV and V in respect of a calendar year, after application of Article 11, shall not be higher than the corresponding ceiling                        set out in Annex III.                  

Where the total amount of direct payments to be granted in a Member State would be higher than the ceiling set out in Annex                     III, that Member State shall make a linear reduction in the amounts of all direct payments with the exception of direct payments                     granted under Regulation (EU) No 228/2013 and Regulation (EU) No 229/2013.                  

2.For each Member State and for each calendar year, the estimated product of the reduction of payments referred to in Article                        11 (which is reflected by the difference between the national ceiling set out in Annex II, to which is added the amount available                        in accordance with Article 58, and the net ceiling set out in Annex III) shall be made available as Union support for measures                        under rural development programming financed under the European Agricultural Fund for Rural Development (EAFRD) as specified                        in Regulation (EU) No 1305/2013.                  

3.In order to take account of the developments relating to the total maximum amounts of direct payments that may be granted,                        including those resulting from the decisions taken by Member States pursuant to Article 14, the Commission shall be empowered                        to adopt delegated acts in accordance with Article 70 adapting the ceilings set out in Annex III.                  

#### Article 8U.K.Financial discipline

1.The adjustment rate determined in accordance with Article 26 of Regulation (EU) No 1306/2013 shall only apply to direct payments                        in excess of EUR 2 000 to be granted to farmers in the corresponding calendar year.                  

2.As a result of the gradual introduction of direct payments provided for in Article 16, paragraph 1 of this Article shall apply                        to Bulgaria and Romania from 1 January 2016.                  

As a result of the gradual introduction of direct payments provided for in Article 17, paragraph 1 of this Article shall apply                     to Croatia from 1 January 2022.                  

3.In order to ensure the correct application of the adjustments of direct payments with respect to financial discipline, the                        Commission shall be empowered to adopt delegated acts in accordance with Article 70 laying down rules on the basis for calculation                        of reductions to be applied by Member States to farmers pursuant to paragraph 1 of this Article.                  

4.In the case of a legal person, or a group of natural or legal persons, Member States may apply the adjustment rate referred                        to in paragraph 1 at the level of the members of those legal persons or groups where national law provides for the individual                        members to assume rights and obligations comparable to those of individual farmers who have the status of a head of holding,                        in particular as regards their economic, social and tax status, provided that they have contributed to strengthening the agricultural                        structures of the legal persons or groups concerned.                  

#### Article 9U.K.Active farmer

1.No direct payments shall be granted to natural or legal persons, or to groups of natural or legal persons, whose agricultural                        areas are mainly areas naturally kept in a state suitable for grazing or cultivation and who do not carry out on those areas                        the minimum activity defined by Member States in accordance with point (b) of Article 4(2).                  

2.No direct payments shall be granted to natural or legal persons, or to groups of natural or legal persons, who operate airports,                        railway services, waterworks, real estate services, permanent sport and recreational grounds.                  

Where appropriate, Member States may, on the basis of objective and non-discriminatory criteria, decide to add to the list                     in the first subparagraph any other similar non-agricultural businesses or activities, and may subsequently decide to withdraw                     any such additions.                  

A person or group of persons falling within the scope of the first or second subparagraph shall, however, be regarded as an                     active farmer if it provides verifiable evidence, in the form that is required by Member States, which demonstrates any of                     the following:                  

(a)that the annual amount of direct payments is at least 5 % of the total receipts that it obtained from non-agricultural activities                        in the most recent fiscal year for which such evidence is available;                  

(b)that its agricultural activities are not insignificant;                  

(c)that its principal business or company objects consist of exercising an agricultural activity.                  

3.In addition to paragraphs 1 and 2, Member States may decide, on the basis of objective and non-discriminatory criteria, that                        no direct payments are to be granted to natural or legal persons, or to groups of natural or legal persons:                  

(a)whose agricultural activities form only an insignificant part of their overall economic activities; and/or                  

(b)whose principal activity or company objects do not consist of exercising an agricultural activity.                  

4.Paragraphs 2 and 3 shall not apply to farmers who only received direct payments not exceeding a certain amount for the previous                        year. Such amount shall be decided by Member States on the basis of objective criteria such as their national or regional                        characteristics, and shall not be higher than EUR 5 000.                  

5.In order to guarantee the protection of the rights of farmers, the Commission shall be empowered to adopt delegated acts in                        accordance with Article 70 laying down:                  

(a)criteria for determining the cases where a farmer's agricultural area is to be considered to be mainly an area naturally kept                        in a state suitable for grazing or cultivation;                  

(b)criteria for establishing the distinction between receipts resulting from agricultural and non-agricultural activities;                  

(c)criteria for establishing the amounts of direct payments referred to in paragraphs 2 and 4, especially concerning direct payments                        in the first year of allocation of payment entitlements where the value of the payment entitlements is not yet definitively                        established, as well as concerning direct payments for new farmers;                  

(d)criteria that farmers are to meet in order to prove for the purposes of paragraphs 2 and 3 that their agricultural activities                        are not insignificant and that their principal business or company objects consist of exercising an agricultural activity.                  

6.Member States shall notify the Commission by 1 August 2014 of any decision referred to in paragraphs 2, 3 or 4 and, in the                        case of amendments thereto, within two weeks of the date on which any decision to amend was taken.                  

#### Article 10U.K.Minimum requirements for receiving direct payments

1.Member States shall decide in which one of the following cases not to grant direct payments to a farmer:                  

(a)where the total amount of direct payments claimed or due to be granted before the application of Article 63 of Regulation                        (EU) No 1306/2013 in a given calendar year is less than EUR 100;                  

(b)where the eligible area of the holding for which direct payments are claimed or due to be granted before the application of                        Article 63 of Regulation (EU) No 1306/2013 is less than one hectare.                  

2.In order to take account of the structure of their agricultural economies, Member States may adjust the thresholds set out                        in points (a) and (b) of paragraph 1 within the limits set out in Annex IV.                  

3.Where a Member State has decided to apply an area threshold pursuant to point (b) of paragraph 1, it shall nevertheless apply                        point (a) of that paragraph to those farmers receiving the animal-related coupled support referred to in Title IV who hold                        fewer hectares than the area threshold.                  

4.The Member States concerned may decide not to apply paragraph 1 to the outermost regions and to the smaller Aegean Islands.                  

5.In Bulgaria and Romania, for the year 2015, the amount claimed or due to be granted as referred to in point (a) of paragraph                        1 shall be calculated on the basis of the relevant amount set out in point A of Annex V.                  

In Croatia, for the years 2015-2021, the amount claimed or due to be granted as referred to in point (a) of paragraph 1 shall                     be calculated on the basis of the amount set out in point A of Annex VI.                  

#### Article 11U.K.Reduction of payments

1.Member States shall reduce the amount of direct payments to be granted to a farmer pursuant to Chapter 1 of Title III for                        a given calendar year by at least 5 % for the part of the amount exceeding EUR 150 000.                  

2.Before applying paragraph 1, Member States may subtract the salaries linked to an agricultural activity actually paid and                        declared by the farmer in the previous calendar year, including taxes and social contributions related to employment, from                        the amount of direct payments to be granted to a farmer pursuant to Chapter 1 of Title III in a given calendar year. Where                        no data is available on the salaries actually paid and declared by the farmer in the previous calendar year, the most recent                        data available shall be used.                  

3.Where a Member State decides to grant a redistributive payment to farmers pursuant to Chapter 2 of Title III and to use more                        than 5 % of the annual national ceiling set out in Annex II for that purpose, it may decide not to apply this Article.                  

Where a Member State decides to grant a redistributive payment to farmers pursuant to Chapter 2 of Title III and the application                     of the maximum limits set out in Article 41(4) prevents it from using more than 5 % of the annual national ceiling set out                     in Annex II for that purpose, that Member State may decide not to apply this Article.                  

4.No advantage by means of avoiding reductions of the payment shall be granted in favour of farmers in respect of whom it is                        established that they artificially created, after 18 October 2011, the conditions to avoid the effects of this Article.                  

5.In the case of a legal person, or a group of natural or legal persons, Member States may apply the reduction referred to in                        paragraph 1 at the level of the members of those legal persons or groups where national law provides for the individual members                        to assume rights and obligations comparable to those of individual farmers who have the status of a head of holding, in particular                        as regards their economic, social and tax status, provided that they have contributed to strengthening the agricultural structures                        of the legal persons or groups concerned.                  

6.Member States shall notify the Commission by 1 August 2014 of the decisions taken in accordance with this Article and of any                        estimated product of reductions for the years 2015 to 2019.                  

#### Article 12U.K.Multiple claims

The area corresponding to the number of eligible hectares in respect of which an application for a basic payment has been                     submitted by a farmer pursuant to Chapter 1 of Title III may be the subject of an application for any other direct payment,                     as well as for any other aid not covered by this Regulation, save as explicitly provided otherwise in this Regulation.                  

#### Article 13U.K.State aid

By way of derogation from Article 211(1) of Regulation (EU) No 1308/2013 of the European Parliament and of the Council(21), Articles 107, 108 and 109 TFEU shall not apply to payments made by Member States in conformity with this Regulation.                  

#### Article 14U.K.Flexibility between pillars

1.By 31 December 2013, Member States may decide to make available, as additional support for measures under rural development                        programming financed under the EAFRD as specified under Regulation (EU) No 1305/2013, up to 15 % of their annual national                        ceilings for calendar year 2014 set out in Annex VIII to Regulation (EC) No 73/2009 and of their annual national ceilings                        for calendar years 2015 to 2019 set out in Annex II to this Regulation. As a result, the corresponding amount shall no longer                        be available for granting direct payments.                  

The decision referred to in the first subparagraph shall be notified to the Commission by 31 December 2013. That decision                     shall set out the percentage referred to in that subparagraph, which may vary by calendar year.                  

Member States which do not take the decision referred to in the first subparagraph in respect of calendar year 2014 may, by                     1 August 2014, take that decision in respect of calendar years 2015 to 2019. They shall notify the Commission of any such                     decision by that date.                  

Member States may decide to review the decisions referred to in this paragraph with effect from calendar year 2018. Any decisions                     based on such review shall not result in a decrease of the percentage notified to the Commission in accordance with the first,                     second and third subparagraphs. Member States shall notify the Commission of any decision based on such review by 1 August                     2017.                  

2.By 31 December 2013, Member States which do not take the decision referred to in paragraph 1 may decide to make available                        as direct payments up to 15 % or, in the case of Bulgaria, Estonia, Spain, Latvia, Lithuania, Poland, Portugal, Romania, Slovakia,                        Finland, Sweden and the United Kingdom, up to 25 % of the amount allocated to support for measures under rural development                        programming financed under the EAFRD in the period 2015-2020, as specified in Regulation (EU) No 1305/2013. As a result, the                        corresponding amount shall no longer be available for support measures under rural development programming.                  

The decision referred to in the first subparagraph shall be notified to the Commission by 31 December 2013. That decision                     shall set out the percentage referred to in that subparagraph, which may vary by calendar year.                  

Member States which do not take the decision referred to in the first subparagraph in respect of financial year 2015 may,                     by 1 August 2014, take that decision in respect of financial years 2016 to 2020. They shall notify the Commission of any such                     decision by that date.                  

Member States may decide to review the decisions referred to in this paragraph with effect for financial years 2019 and 2020.                     Any decisions based on such review shall not result in an increase of the percentage notified to the Commission in accordance                     with the first, second and third subparagraphs. Member States shall notify the Commission of any decision based on such review                     by 1 August 2017.                  

#### Article 15U.K.Review

Support schemes listed in Annex I shall apply without prejudice to a possible review at any time in the light of economic                     developments and the budgetary situation. That review may lead to the adoption of legislative acts, delegated acts under Article                     290 TFEU or implementing acts under Article 291 TFEU.                  

### *CHAPTER 2*U.K.***Provisions applying to Bulgaria, Croatia and Romania***

#### Article 16U.K.Gradual introduction of direct payments in Bulgaria and Romania

For Bulgaria and Romania, the ceilings fixed in accordance with Articles 42, 47, 49, 51, 53 and 65 shall, for 2015, be established                     on the basis of the amount set out in point A of Annex V.                  

#### Article 17U.K.Gradual introduction of direct payments in Croatia

In Croatia, direct payments shall be introduced in accordance with the following schedule of increments expressed as a percentage                     of the corresponding level of the direct payments as applied from 2022:                  
          -  25 % in 2013, 
          -  30 % in 2014, 
          -  35 % in 2015, 
          -  40 % in 2016, 
          -  50 % in 2017, 
          -  60 % in 2018, 
          -  70 % in 2019, 
          -  80 % in 2020, 
          -  90 % in 2021, 
          -  100 % from 2022. 

#### Article 18U.K.Complementary national direct payments and direct payments in Bulgaria and Romania

1.In 2015, Bulgaria and Romania may use national direct payments in order to complement payments granted under the basic payment                        scheme referred to in Sections 1, 2 and 3 of Chapter 1 of Title III. The total amount of those payments shall not exceed the                        relevant amount set out in point B of Annex V.                  

2.In 2015, Bulgaria may use national direct payments in order to complement payments granted under the crop-specific payment                        for cotton referred to in Chapter 2 of Title IV. The total amount of those payments shall not exceed the amount set out in                        point C of Annex V.                  

3.Complementary national direct payments shall be granted in accordance with objective criteria and in such a way as to ensure                        the equal treatment of farmers and to avoid distortions of the market and of competition.                  

#### Article 19U.K.Complementary national direct payments for Croatia

1.Subject to authorisation by the Commission, Croatia may complement any of the support schemes listed in Annex I, where relevant.                  

2.The amount of complementary national direct payments which may be granted in a given year and for a given support scheme shall                        be limited by a specific financial envelope. This envelope shall be established as the difference between:                  

(a)the amount of direct support available per support scheme concerned after the full introduction of direct payments in accordance                        with Article 17 for the calendar year 2022, and                  

(b)the amount of direct support available per support scheme concerned after the application of the schedule of increments in                        accordance with Article 17 for the calendar year concerned.                  

3.The total amount of complementary national direct payments granted shall not be higher than the ceiling set out in point B                        of Annex VI for a corresponding calendar year.                  

4.Croatia may decide, on the basis of objective criteria and after authorisation by the Commission, on the amounts of complementary                        national direct payments to be granted.                  

5.The Commission shall adopt implementing acts authorising the payments under this Article, specifying the relevant support                        schemes and defining the level up to which the complementary national direct payments may be paid.                  

As regards complementary national direct payments intended to complement the voluntary coupled support referred to in Chapter                     1 of Title IV, the implementing acts shall also specify the specific types of farming or the specific agricultural sectors                     referred to in Article 52(3) to which the complementary national direct payments may relate.                  

Those implementing acts shall be adopted without applying the procedure referred to in Article 71(2) or (3).

6.The eligibility conditions for complementary national direct payments for Croatia shall be identical to those for support                        under corresponding support schemes as laid down in this Regulation.                  

7.Complementary national direct payments for Croatia shall be subject to any adjustments which may be rendered necessary by                        developments in the CAP. They shall be granted in accordance with objective criteria and in such a way as to ensure equal                        treatment between farmers and to avoid distortions of the market and of competition.                  

8.Croatia shall submit a report providing information on the measures for the implementation of the complementary national direct                        payments by 30 June of the year following their implementation. The report shall cover at least the following:                  

(a)any changes in the situation affecting the complementary national direct payments;                  

(b)for each complementary national direct payment, the numbers of beneficiaries and the total amount of complementary national                        direct payment granted, as well as the hectares and the number of animals or other units for which that complementary national                        direct payment has been granted;                  

(c)a report on control measures applied in relation to the complementary national direct payments granted.                  

#### Article 20U.K.Special national de-mining reserve for Croatia

1.From 2015 onwards, Croatia shall notify the Commission by 31 January of each year of the areas which have been identified                        in accordance with Article 57a(10) of Regulation (EC) No 73/2009 and which were returned to use for agricultural activities                        in the previous calendar year.                  

Croatia shall also notify the Commission of the number of payment entitlements available to farmers on 31 December of the                     previous calendar year, as well as the amount remained unspent in the special national de-mining reserve on that same date.                  

Where applicable, the notifications provided in the first and second subparagraphs shall be made per region as defined in                     accordance with Article 23(1) of this Regulation.                  

2.When adapting Annex II pursuant to Article 6(3), the Commission shall calculate on a yearly basis the amount to be added to                        the amounts set for Croatia in that Annex in order to finance the support to be granted under the schemes listed in Annex                        I for the areas referred to in paragraph 1 of this Article. This amount shall be calculated on the basis of the data notified                        by Croatia in accordance with paragraph 1 of this Article and the estimated average direct payments per hectare in Croatia                        for the year concerned.                  

The maximum amount to be added in accordance with the first subparagraph, on the basis of all the areas notified by Croatia                     in accordance with paragraph 1 of this Article until 2022, shall be EUR 9 600 000 and shall be subject to the schedule of                     introduction of direct payments in accordance with Article 17. The resulting maximum annual amounts are set out in Annex VII.                  

3.The Commission shall adopt implementing acts setting the share of the amount to be added in accordance with paragraph 2 which                        Croatia shall include in the special national de-mining reserve in order to allocate payment entitlements for the areas referred                        to in paragraph 1. That share shall be calculated on the basis of the ratio between the ceiling for the basic payment scheme                        and the national ceiling set out in Annex II before the national ceiling's increase in accordance with paragraph 2. Those                        implementing acts shall be adopted in accordance with the examination procedure referred to in Article 71(2).                  

4.For the years 2015 to 2022, Croatia shall use the special national de-mining reserve to allocate payment entitlements to farmers                        on the basis of de-mined land declared by the farmers in the year in question where:                  

(a)such land consists of eligible hectares within the meaning of Article 32(2) to (5);                  

(b)the land in question was returned to use for agricultural activities during the previous calendar year; and                  

(c)the land has been notified to the Commission in accordance with paragraph 1 of this Article.                  

5.The value of the payment entitlements established under this Article shall be the national or regional average value of payment                        entitlements in the year of allocation within the limits of the amount available in the special national de-mining reserve.                  

6.In order to take account of the consequences of the return of de-mined land to use for agricultural activities as notified                        by Croatia in accordance with this Article, the Commission shall be empowered to adopt delegated acts in accordance with Article                        70 adapting the amounts set out in Annex VI.                  

## TITLE IIIU.K.**BASIC PAYMENT SCHEME, SINGLE AREA PAYMENT SCHEME AND RELATED PAYMENTS**

### *CHAPTER 1*U.K.***Basic payment scheme and single area payment scheme***

#### *Section 1*U.K.***Setting up of the basic payment scheme***

##### Article 21U.K.Payment entitlements

1.Support under the basic payment scheme shall be available to farmers:                  

(a)who obtain payment entitlements under this Regulation through allocation pursuant to Article 20(4), through first allocation                        pursuant to Article 24 or Article 39, through allocation from the national reserve or regional reserves pursuant to Article                        30 or through transfer pursuant to Article 34; or                  

(b)who comply with Article 9 and hold owned or leased-in payment entitlements in a Member State which has decided, in accordance                        with paragraph 3, to keep its existing payment entitlements.                  

2.Payment entitlements obtained under the single payment scheme in accordance with Regulation (EC) No 1782/2003 and with Regulation                        (EC) No 73/2009 shall expire on 31 December 2014.                  

3.By way of derogation from paragraph 2, Member States which established the single payment scheme in accordance with Section                        I of Chapter 5 of Title III or Chapter 6 of Title III of Regulation (EC) No 1782/2003 or Chapter 3 of Title III of Regulation                        (EC) No 73/2009 may, by 1 August 2014, decide to keep the existing payment entitlements. They shall notify any such decision                        to the Commission by that date.                  

4.As regards Member States which take the decision referred to in paragraph 3, when the number of owned or leased-in payment                        entitlements established in accordance with Regulation (EC) No 1782/2003 and with Regulation (EC) No 73/2009 which a farmer                        holds on the final date for submission of applications to be set in accordance with point (b) of the first subparagraph of                        Article 78 of Regulation (EU) No 1306/2013 exceeds the number of eligible hectares which the farmer declares in his aid application                        in accordance with point (a) of the first subparagraph of Article 72(1) of Regulation (EU) No 1306/2013 for 2015, and which                        are at his disposal on a date fixed by the Member State, which shall be no later than the date fixed in that Member State                        for amending such an aid application, the number of payment entitlements exceeding the number of eligible hectares shall expire                        on the latter date.                  

##### Article 22U.K.Basic payment scheme ceiling

1.The Commission shall adopt implementing acts setting, for each Member State, the annual national ceiling for the basic payment                        scheme by deducting from the annual national ceiling set out in Annex II the ceilings fixed in accordance with Articles 42,                        47, 49, 51 and 53. Those implementing acts shall be adopted in accordance with the examination procedure referred to in Article                        71(2).                  

2.For each Member State, the amount calculated in accordance with the paragraph 1 of this Article may be increased by a maximum                        of 3 % of the relevant annual national ceiling set out in Annex II after deduction of the amount resulting from the application                        of Article 47(1) for the relevant year. When a Member State applies such an increase, that increase shall be taken into account                        by the Commission when setting the annual national ceiling for the basic payment scheme pursuant to paragraph 1 of this Article.                        For that purpose, Member States shall notify the Commission by 1 August 2014 of the annual percentages by which the amount                        calculated pursuant to paragraph 1 of this Article is to be increased.                  

3.Member States may review their decision referred to in paragraph 2 on an annual basis and shall notify the Commission of any                        decision based on such review by 1 August of the year preceding its application.                  

4.For each Member State and each year, the total value of all payment entitlements and the national reserve or the regional                        reserves shall equal the respective annual national ceiling set by the Commission pursuant to paragraph 1.                  

5.If the ceiling for a Member State set by the Commission pursuant to paragraph 1 is different from that of the previous year                        as a result of any decision taken by that Member State in accordance with paragraph 3 of this Article, the third and fourth                        subparagraphs of Article 14(1), the third and fourth subparagraphs of Article 14(2), Article 42(1), the second subparagraph                        of Article 49(1), the second subparagraph of Article 51(1), or Article 53, that Member State shall linearly reduce or increase                        the value of all payment entitlements in order to ensure compliance with paragraph 4 of this Article.                  

##### Article 23U.K.Regional allocation of the national ceilings

1.Member States may decide, by 1 August 2014, to apply the basic payment scheme at regional level. In such cases, they shall                        define the regions in accordance with objective and non-discriminatory criteria such as their agronomic and socio-economic                        characteristics, their regional agricultural potential, or their institutional or administrative structure.                  

Member States applying Article 36 may take the decision referred to in the first subparagraph by 1 August of the year preceding                     the first year of implementation of the basic payment scheme.                  

2.Member States shall divide the annual national ceiling for the basic payment scheme referred to in Article 22(1) between the                        regions in accordance with objective and non-discriminatory criteria.                  

Member States not applying Article 30(2) shall make that division after applying the linear reduction provided for in Article                     30(1).                  

3.Member States may decide that the regional ceilings shall be subject to annual progressive modifications in accordance with                        pre-established annual steps and objective and non-discriminatory criteria such as agricultural potential or environmental                        criteria.                  

4.To the extent necessary to respect the applicable regional ceilings determined in accordance with paragraph 2 or 3, Member                        States shall make a linear reduction or increase in the value of the payment entitlements in each of the relevant regions.                  

5.Member States applying paragraph 1 may decide to cease the application of the basic payment scheme at regional level from                        a date to be set by them.                  

6.Member States applying the first subparagraph of paragraph 1 shall notify the Commission of the decision referred to in that                        subparagraph and of the measures taken for the application of paragraphs 2 and 3 by 1 August 2014.                  

Member States applying the second subparagraph of paragraph 1 shall notify the Commission of any decision referred to in that                     subparagraph and of the measures taken for the application of paragraphs 2 and 3 by 1 August of the relevant year.                  

Member States applying paragraph 1 shall notify the Commission of any decision referred to in paragraph 5 by 1 August of the                     year preceding the first year of implementation of that decision.                  

##### Article 24U.K.First allocation of payment entitlements

1.Payment entitlements shall be allocated to farmers who are entitled to be granted direct payments in accordance with Article                        9 of this Regulation provided that:                  

(a)they apply for allocation of payment entitlements under the basic payment scheme by the final date for submission of applications                        in 2015 to be set in accordance with point (b) of the first subparagraph of Article 78 of Regulation (EU) No 1306/2013, except                        in case of force majeure or exceptional circumstances; and                  

(b)they were entitled to receive payments, before any reduction or exclusion provided for in Chapter 4 of Title II of Regulation                        (EC) No 73/2009, in respect of an aid application for direct payments, for transitional national aid or for complementary                        national direct payments in accordance with Regulation (EC) No 73/2009 for 2013.                  

The first subparagraph shall not apply in Member States applying Article 21(3) of this Regulation.

Member States may allocate payment entitlements to farmers who are entitled to be granted direct payments in accordance with                     Article 9 of this Regulation, who fulfil the condition provided for in point (a) of the first subparagraph and who:                  

(a)did not receive payments for 2013 in respect of an aid application as referred to in the first subparagraph of this paragraph                        and who, on the date fixed by the Member State concerned in accordance with Article 11(2) of Commission Regulation (EC) No 1122/2009(22) for the claim year 2013:                  

in Member States applying the single payment scheme:
                -  were producing fruits, vegetables, ware potatoes, seed potatoes or ornamental plants, and did so on a minimum area expressed                                    in hectares if the Member State concerned decides to adopt such a requirement, or                                  
                -  were cultivating vineyards; or 

in Member States applying the single area payment scheme, had only agricultural land that was not in good agricultural condition                              on 30 June 2003 as provided for in Article 124(1) of Regulation (EC) No 73/2009;                           

(b)in 2014, are allocated payment entitlements from the national reserve under the single payment scheme pursuant to Article                        41 or 57 of Regulation (EC) No 73/2009; or                  

(c)never held owned or leased-in payment entitlements established under Regulation (EC) No 73/2009 or Regulation (EC) No 1782/2003                        and who submit verifiable evidence that, on the date fixed by the Member State in accordance with Article 11(2) of Regulation                        (EC) No 1122/2009 for the claim year 2013, they produced, reared or grew agricultural products, including through harvesting,                        milking, breeding animals and keeping animals for farming purposes. Member States may establish their own additional objective                        and non-discriminatory eligibility criteria for this category of farmers as regards appropriate skills, experience or education.                  

2.Except in the case of force majeure or exceptional circumstances, the number of payment entitlements allocated per farmer                        in 2015 shall be equal to the number of eligible hectares, which the farmer declares in his aid application in accordance                        with point (a) of the first subparagraph of Article 72(1) of Regulation (EU) No 1306/2013 for 2015 and which are at his disposal                        on a date fixed by the Member State. That date shall be no later than the date fixed in that Member State for amending such                        an aid application.                  

3.Member States may apply one or more of the limitations, as set out in paragraphs 4 to 7, on the number of payment entitlements                        to be allocated under paragraph 2.                  

4.Member States may decide that the number of payment entitlements to be allocated shall be equal to either the number of eligible                        hectares which the farmer declared in accordance with Article 34(2) of Regulation (EC) No 73/2009 in 2013, or the number of                        eligible hectares referred to in paragraph 2 of this Article, whichever is the lowest. For Croatia, the use of this option                        shall be without prejudice to the allocation of payment entitlements for de–mined hectares in accordance with Article 20(4)                        of this Regulation.                  

5.Where the total number of eligible hectares referred to in paragraph 2 of this Article declared in a Member State would result                        in an increase of more than 35 % of the total number of eligible hectares declared in accordance with Article 35 of Regulation                        (EC) No 73/2009 in 2009, or in the case of Croatia in 2013, Member States may limit the number of payment entitlements to                        be allocated in 2015 to a minimum of either 135 % or 145 % of the total number of eligible hectares declared in 2009, or,                        in the case of Croatia, of the total number of eligible hectares declared in 2013, in accordance with Article 35 of Regulation                        (EC) No 73/2009.                  

When using this option, Member States shall allocate a reduced number of payment entitlements to farmers. That number shall                     be calculated by applying a proportional reduction to the additional number of eligible hectares declared by each farmer in                     2015 compared to the number of eligible hectares within the meaning of Article 34(2) of Regulation (EC) No 73/2009 that that                     farmer declared in his aid application in 2011 or, in the case of Croatia, in 2013, without prejudice to the de-mined hectares                     for which payment entitlements are to be allocated in accordance with Article 20(4) of this Regulation.                  

6.Member States may decide to apply, for the purposes of establishing the number of payment entitlements to be allocated to                        a farmer, a reduction coefficient to those eligible hectares referred to in paragraph 2 which consist of permanent grassland                        located in areas with difficult climate conditions, especially due to their altitude and other natural constraints such as                        poor soil quality, steepness and water supply.                  

7.Member States may decide that the number of payment entitlements to be allocated to a farmer shall be equal to the number                        of eligible hectares referred to in paragraph 2 of this Article which were not hectares of vineyards on the date fixed by                        the Member State in accordance with Article 11(2) of Regulation (EC) No 1122/2009 for the claim year 2013 or hectares of arable                        land under permanent greenhouses.                  

8.In the case of the sale or lease of their holding or part of it, natural or legal persons complying with paragraph 1 of this                        Article may, by contract signed before the final date for submitting applications in 2015 to be set in accordance with point                        (b) of the first subparagraph of Article 78 of Regulation (EU) No 1306/2013, transfer the right to receive payment entitlements                        in accordance with paragraph 1 of this Article to one or more farmers provided that the latter comply with the conditions                        laid down in Article 9 of this Regulation.                  

9.A Member State may decide to fix a minimum size per holding, expressed in eligible hectares, in respect of which the farmer                        may apply for an allocation of payment entitlements. That minimum size shall not exceed the threshold set out in point (b)                        of Article 10(1) in conjunction with paragraph 2 of that Article.                  

10.Member States shall, where relevant, notify the Commission of the decisions referred to in this Article by 1 August 2014.                  

11.The Commission shall adopt implementing acts laying down rules on applications for the allocation of payment entitlements                        submitted in the year of allocation of payment entitlements where those payment entitlements may not yet be definitively established                        and where that allocation is affected by specific circumstances. Those implementing acts shall be adopted in accordance with                        the examination procedure referred to in Article 71(2).                  

##### Article 25U.K.Value of payment entitlements and convergence

1.In 2015, Member States shall calculate the unit value of payment entitlements by dividing a fixed percentage of the national                        ceiling set out in Annex II for each relevant year by the number of payment entitlements in 2015 at national or regional level,                        excluding those allocated from the national reserve or regional reserves in 2015.                  

The fixed percentage referred to in the first subparagraph shall be calculated by dividing the national or regional ceiling                     for the basic payment scheme to be set in accordance with, respectively, Article 22(1) or Article 23(2) of this Regulation                     for 2015, after applying the linear reduction provided for in paragraph 1 or, where applicable, paragraph 2 of Article 30,                     by the national ceiling for 2015 set out in Annex II. The payment entitlements shall be expressed in a number that corresponds                     to a number of hectares.                  

2.By way of derogation from the calculation method referred to in paragraph 1, Member States may decide to differentiate the                        value of payment entitlements in 2015, excluding those allocated from the national reserve or regional reserves in 2015, for                        each relevant year on the basis of their initial unit value as calculated in accordance with Article 26.                  

3.From claim year 2019 at the latest, all payment entitlements in a Member State or, where Article 23 is applied, in a region                        shall have a uniform unit value.                  

4.By way of derogation from paragraph 3, a Member State may decide that payment entitlements with an initial unit value as calculated                        in accordance with Article 26 that is lower than 90 % of the national or regional unit value in 2019 shall, for claim year                        2019 at the latest, have their unit value increased by at least one third of the difference between their initial unit value                        and 90 % of the national or regional unit value in 2019.                  

Member States may decide to set the percentage referred to in the first subparagraph at a level higher than 90 % but not above                     100 %.                  

In addition, Member States shall provide that, at the latest for claim year 2019, no payment entitlement shall have a unit                     value lower than 60 % of the national or regional unit value in 2019, unless this would, in Member States applying the threshold                     referred to in paragraph 7, result in a maximum decrease exceeding that threshold. In such cases, the minimum unit value shall                     be set at a level necessary to respect that threshold.                  

5.The national or regional unit value in 2019 referred to in the paragraph 4 shall be calculated by dividing a fixed percentage                        of the national ceiling set out in Annex II, or of the regional ceiling, for calendar year 2019 by the number of payment entitlements                        in 2015 in the Member State or region concerned, excluding those allocated from the national reserve or regional reserves                        in 2015. That fixed percentage shall be calculated by dividing the national or regional ceiling for the basic payment scheme                        to be set in accordance with, respectively, Article 22(1) or Article 23(2) for the year 2015, after applying the linear reduction                        provided for in paragraph 1 or, where applicable, paragraph 2 of Article 30, by the national ceiling set out in Annex II,                        or the regional ceiling, for 2015.                  

6.The regional ceilings referred to in the paragraph 5 shall be calculated by applying a fixed percentage to the national ceiling                        set out in Annex II for the year 2019. That fixed percentage shall be calculated by dividing the respective regional ceilings                        established in accordance with Article 23(2) for the year 2015 by the national ceiling to be set in accordance with Article                        22(1) for the year 2015, after applying the linear reduction provided for in Article 30(1) where the second subparagraph of                        Article 23(2) applies.                  

7.In order to finance the increases in the value of payment entitlements referred to in paragraph 4, where payment entitlements                        have an initial unit value higher than the national or regional unit value in 2019, the difference between their initial unit                        value and the national or regional unit value in 2019 shall be decreased on the basis of objective and non-discriminative                        criteria to be determined by Member States. Such criteria may include the fixing of a maximum decrease of the initial unit                        value of 30 %.                  

8.When applying paragraph 2 of this Article, the transition from the initial unit value of payment entitlements as calculated                        in accordance with Article 26 to their final unit value in 2019 as established in accordance with paragraph 3 or paragraphs                        4 to 7 of this Article shall be made in equal steps starting from 2015.                  

In order to ensure compliance with the fixed percentage referred to in paragraph 1 of this Article for each year, the value                     of the payment entitlements with an initial unit value that is higher than the national or regional unit value in 2019 shall                     be adjusted.                  

9.By way of derogation from paragraph 8 of this Article, where Member States which, in accordance with Article 21(3), decide                        to keep their existing entitlements apply paragraph 2 of this Article, the transition from the initial unit value of payment                        entitlements as established in accordance with Article 26(5) to their final unit value in 2019 as established in accordance                        with paragraph 3 or paragraphs 4 to 7 of this Article shall, where applicable, be made by applying the steps decided nationally                        in accordance with Article 63(3) of Regulation (EC) No 1782/2003.                  

In order to ensure compliance with the fixed percentage referred to in paragraph 1 of this Article for each year, the value                     of all payment entitlements shall be linearly adjusted.                  

10.In 2015, Member States shall inform farmers of the value of their payment entitlements as calculated in accordance with this                        Article and Articles 26 and 27 for each year of the period covered by this Regulation.                  

##### Article 26U.K.Calculation of the initial unit value

1.The initial unit value of payment entitlements referred to in Article 25(2) in Member States which apply the single payment                        scheme in calendar year 2014 and which have not decided to keep their existing payment entitlements in accordance with Article                        21(3) shall be set in accordance with either of the methods set out in paragraphs 2 or 3.                  

2.A fixed percentage of the payments the farmer received for 2014 under the single payment scheme, in accordance with Regulation                        (EC) No 73/2009, before reductions and exclusions provided for in Chapter 4 of Title II of that Regulation, shall be divided                        by the number of payment entitlements he is allocated in 2015, excluding those allocated from the national reserve or regional                        reserves in 2015.                  

That fixed percentage shall be calculated by dividing the national or regional ceiling for the basic payment scheme to be                     set in accordance with, respectively, Article 22(1) or Article 23(2) of this Regulation for the year 2015, after applying                     the linear reduction provided for in paragraph 1 or, where applicable, paragraph 2 of Article 30 of this Regulation, by the                     amount of the payments for 2014 under the single payment scheme in the Member State or region concerned, before reductions                     and exclusions provided for in Chapter 4 of Title II of Regulation (EC) No 73/2009.                  

3.A fixed percentage of the value of the entitlements, including special entitlements, which the farmer held on the date of                        submission of his application for 2014 under the single payment scheme, in accordance with Regulation (EC) No 73/2009, shall                        be divided by the number of payment entitlements he is allocated in 2015, excluding those allocated from the national reserve                        or regional reserves in 2015.                  

That fixed percentage shall be calculated by dividing the national or regional ceiling for the basic payment scheme to be                     set in accordance with, respectively, Article 22(1) or Article 23(2) of this Regulation for the year 2015, after applying                     the linear reduction provided for in paragraph 1 or, where applicable, paragraph 2 of Article 30 of this Regulation, by the                     total value of all entitlements, including special entitlements, in the Member State or region concerned for 2014, under the                     single payment scheme.                  

For the purpose of this paragraph, a farmer shall be considered to hold payment entitlements on the date of submission of                     his application for 2014 where payment entitlements were allocated or definitively transferred to him by that date.                  

4.Member States which apply the single area payment scheme in calendar year 2014 shall calculate the initial unit value of payment                        entitlements referred to in Article 25(2) of this Regulation by dividing a fixed percentage of the total value of aid the                        farmer received for 2014 under the single area payment scheme in accordance with Regulation (EC) No 73/2009 and under Articles                        132 and 133a of that Regulation, before reductions and exclusions provided for in Chapter 4 of Title II of that Regulation,                        by the number of payment entitlements he is allocated in 2015, excluding those allocated from the national reserve or regional                        reserves in 2015.                  

That fixed percentage shall be calculated by dividing the national or regional ceiling for the basic payment scheme to be                     set in accordance with, respectively, Article 22(1) or Article 23(2) of this Regulation for the year 2015, after applying                     the linear reduction provided for in paragraph 1 or, where applicable, paragraph 2 of Article 30 of this Regulation, by the                     total value of aid granted under the single area payment scheme in accordance with Regulation (EC) No 73/2009 and under Articles                     132 and 133a of that Regulation for 2014 in the Member State or region concerned, before reductions and exclusions provided                     for in Chapter 4 of Title II of that Regulation.                  

5.Member States which apply the single payment scheme in calendar year 2014 and which, in accordance with Article 21(3) of this                        Regulation, decide to keep their existing payment entitlements shall calculate the initial unit value of payment entitlements                        referred to in Article 25(2) of this Regulation by multiplying the unit value of the entitlements by a fixed percentage. That                        fixed percentage shall be calculated by dividing the national or regional ceiling for the basic payment scheme to be set in                        accordance with, respectively, Article 22(1) or Article 23(2) of this Regulation for the year 2015, after applying the linear                        reduction provided for in paragraph 1 or, where applicable, paragraph 2 of Article 30 of this Regulation, by the amount of                        the payments for 2014 under the single payment scheme in the Member State or region concerned, before reductions and exclusions                        provided for in Chapter 4 of Title II of Regulation (EC) No 73/2009.                  

6.For the purposes of calculation methods provided for in this Article, provided that the relevant sectors do not receive any                        voluntary coupled support pursuant to Title IV of this Regulation, Member States may also take into account the support granted                        for calendar year 2014 under one or more of the schemes pursuant to Article 52, Article 53(1) and points (a) and (b) of Article                        68(1) of Regulation (EC) No 73/2009 and, as regards Member States which applied the single area payment scheme in accordance                        with Regulation (EC) No 73/2009, pursuant to point (c) of Article 68(1) and Articles 126, 127 and 129 of that Regulation.                  

Member States which decide to apply the voluntary coupled support pursuant to Title IV of this Regulation may take into account                     the differences between the level of support granted in calendar year 2014 and the level of support to be granted in accordance                     with Title IV of this Regulation when applying a calculation method provided for in this Article, provided that:                  

(a)the voluntary coupled support pursuant to Title IV of this Regulation is granted to a sector which was granted support in                        calendar year 2014 pursuant to Article 52, Article 53(1) and points (a) and (b) of Article 68(1) and, for Member States which                        applied the single area payment scheme, pursuant to point (c) of Article 68(1) and Articles 126, 127 and 129 of Regulation                        (EC) No 73/2009; and                  

(b)the amount per unit of the voluntary coupled support is lower than the amount per unit of the support in 2014.                  

##### Article 27U.K.Inclusion of the special national de-mining reserve

For Croatia, any reference in Articles 25 and 26 to the national reserve shall be read as including the special national de-mining                     reserve referred to in Article 20.                  

In addition, the amount arising from the special national de-mining reserve shall be deducted from the ceilings of the basic                     payment scheme referred to in the second subparagraph of Article 25(1), in paragraphs 5 and 6 of that Article and in Article                     26.                  

##### Article 28U.K.Windfall profit

For the purposes of Article 25(4) to (7) and Article 26, a Member State may, on the basis of objective criteria, provide that,                     in cases of sale or grant or expiry of all or part of a lease of agricultural areas after the date fixed pursuant to Article                     35 or Article 124(2) of Regulation (EC) No 73/2009 and before the date fixed pursuant to Article 33(1) of this Regulation,                     the increase, or part of the increase, in the value of payment entitlements that would be allocated to the farmer concerned                     is to revert to the national reserve or regional reserves where the increase would lead to a windfall profit for the farmer                     concerned.                  

Those objective criteria shall be established in such a way as to ensure the equal treatment of farmers and to avoid distortions                     of the market and of competition and shall include, at least, the following:                  

a minimum duration for the lease; and

the proportion of the payment received which shall revert to the national reserve or regional reserves.

##### Article 29U.K.Notifications concerning the value of payment entitlements and convergence

Member States shall notify the Commission of any decision referred to in Articles 25, 26 and 28 by 1 August 2014.

#### *Section 2*U.K.***National reserve and regional reserves***

##### Article 30U.K.Establishment and use of the national reserve or regional reserves

1.Each Member State shall establish a national reserve. In order to do so, Member States shall proceed, in the first year of                        implementation of the basic payment scheme, to a linear percentage reduction of the basic payment scheme ceiling at national                        level.                  

2.By way of derogation from paragraph 1, Member States exercising the option in Article 23(1) may establish regional reserves.                        In order to do so, Member States shall proceed, in the first year of implementation of the basic payment scheme, to a linear                        percentage reduction of the relevant basic payment scheme ceiling at regional level referred to in the first subparagraph                        of Article 23(2).                  

3.The reduction referred to in paragraphs 1 and 2 shall not be higher than 3 %, unless a higher percentage is required to cover                        any allocation needs pursuant to paragraph 6 or to points (a) and (b) of paragraph 7 for the year 2015 or, for Member States                        applying Article 36, for the first year of implementation of the basic payment scheme.                  

4.Member States shall allocate payment entitlements from their national or regional reserves in accordance with objective criteria                        and in such a way as to ensure the equal treatment of farmers and to avoid distortions of the market and of competition.                  

5.Payment entitlements referred to in paragraph 4 shall only be allocated to farmers entitled to be granted direct payments                        in accordance with Article 9.                  

6.Member States shall use their national or regional reserves to allocate payment entitlements, as a matter of priority, to                        young farmers and to farmers commencing their agricultural activity.                  

7.Member States may use their national or regional reserves to:                  

(a)allocate payment entitlements to farmers in order to prevent land from being abandoned, including in areas subject to restructuring                        or development programmes relating to a form of public intervention;                  

(b)allocate payment entitlements to farmers in order to compensate them for specific disadvantages;                  

(c)allocate payment entitlements to farmers who were prevented from being allocated payment entitlements under this Chapter as                        a result of force majeure or exceptional circumstances;                  

(d)allocate, in cases where they apply Article 21(3) of this Regulation, payment entitlements to farmers whose number of eligible                        hectares that they declared in 2015 in accordance with point (a) of the first subparagraph of Article 72(1) of Regulation                        (EU) No 1306/2013 and that are at their disposal on a date fixed by the Member State, which shall be no later than the date                        fixed in that Member State for amending such an aid application, is higher than the number of owned or leased-in payment entitlements                        established in accordance with Regulation (EC) No 1782/2003 and with Regulation (EC) No 73/2009 that they hold on the final                        date for submission of applications to be set in accordance with point (b) of the first subparagraph of Article 78 of Regulation                        (EU) No 1306/2013;                  

(e)linearly increase, on a permanent basis, the value of all payment entitlements under the basic payment scheme at national                        or regional level if the relevant national or regional reserve exceeds 0,5 % of the annual national or regional ceiling for                        the basic payment scheme, provided that sufficient amounts remain available for allocations under paragraph 6, under points                        (a) and (b) of this paragraph and under paragraph 9 of this Article;                  

(f)cover the yearly needs for payments to be granted in accordance with Article 51(2) and Article 65(1), (2) and (3) of this                        Regulation.                  

For the purpose of this paragraph, Member States shall decide on the priorities between the different uses referred to herein.

8.When applying paragraph 6 and points (a), (b) and (d) of paragraph 7, Member States shall fix the value of payment entitlements                        allocated to farmers at the national or regional average value of payment entitlements in the year of allocation.                  

The national or regional average value shall be calculated by dividing the national or regional ceiling for the basic payment                     scheme set in accordance with, respectively, Article 22(1) or Article 23(2) for the year of allocation, excluding the amount                     of the national reserve or regional reserves and, in the case of Croatia, the special de-mining reserve, by the number of                     allocated payment entitlements.                  

Member States shall fix the steps for annual progressive modifications of the value of payment entitlements allocated from                     the national reserve or regional reserves, taking account of the modifications of the national or regional ceiling for the                     basic payment scheme set in accordance with, respectively, Article 22(1) and Article 23(2) that result from the variations                     in the level of the national ceilings set out in Annex II.                  

9.Where a farmer is entitled to receive payment entitlements or to increase the value of the existing ones by virtue of a definitive                        court ruling or by virtue of a definitive administrative act of the competent authority of a Member State, the farmer shall                        receive the number and value of payment entitlements established in that ruling or act at a date to be fixed by the Member                        State. However, that date shall not be later than the latest date for lodging an application under the basic payment scheme                        following the date of the court ruling or the administrative act, taking into account the application of Articles 32 and 33.                  

10.When applying paragraph 6, points (a) and (b) of paragraph 7 and paragraph 9, Member States may either allocate new entitlements                        or increase the unit value of all of the existing entitlements of a farmer up to the national or regional average value.                  

11.For the purposes of this Article, the following definitions shall apply:                  

(a)'young farmers' means farmers fulfilling the conditions laid down in Article 50(2) and, where relevant, the conditions referred                        to in Article 50(3) and (11);                  

(b)'farmers commencing their agricultural activity' means natural or legal persons who, in the five years preceding the start                        of the agricultural activity, did not have any agricultural activity in their own name and at their own risk or did not have                        the control of a legal person exercising an agricultural activity. In the case of a legal person, the natural person or persons                        in control of the legal person must not have had any agricultural activity in their own name and at their own risk or must                        not have had the control of a legal person exercising an agricultural activity in the five years preceding the start of the                        agricultural activity by the legal person; Member States may establish their own additional objective and non-discriminative                        eligibility criteria for this category of farmers as regards appropriate skills, experience or education.                  

##### Article 31U.K.Replenishment of the national reserve or regional reserves

1.The national reserve or regional reserves shall be replenished by amounts resulting from:                  

(a)payment entitlements not giving right to payments during two consecutive years due to the application of:                  

Article 9,

Article 10(1), or

Article 11(4) of this Regulation;

(b)a number of payment entitlements equivalent to the total number of payment entitlements which have not been activated by farmers                        in accordance with Article 32 of this Regulation for a period of two consecutive years, except where their activation has                        been prevented by force majeure or exceptional circumstances; when establishing the owned or leased-in payment entitlements                        held by a farmer that shall revert to the national reserve or regional reserves, priority shall be given to those entitlements                        which have the lowest value;                  

(c)payment entitlements voluntarily returned by farmers;                  

(d)the application of Article 28 of this Regulation;                  

(e)unduly allocated payment entitlements in accordance with Article 63 of Regulation (EU) No 1306/2013;                  

(f)a linear reduction of the value of payment entitlements under the basic payment scheme at national or regional level where                        the national reserve or regional reserves are not sufficient to cover the cases referred to in Article 30(9) of this Regulation;                  

(g)where Member States consider it necessary, a linear reduction of the value of payment entitlements under the basic payment                        scheme at national or regional level to cover cases referred to in Article 30(6) of this Regulation;                  

(h)the application of Article 34(4) of this Regulation.                  

2.The Commission shall adopt implementing acts laying down necessary measures regarding the reversion of non-activated payment                        entitlements to the national reserve or regional reserves. Those implementing acts shall be adopted in accordance with the                        examination procedure referred to in Article 71(2).                  

#### *Section 3*U.K.***Implementation of the basic payment scheme***

##### Article 32U.K.Activation of payment entitlements

1.Support under the basic payment scheme shall be granted to farmers, by means of declaration in accordance with Article 33(1),                        upon activation of a payment entitlement per eligible hectare in the Member State where it has been allocated. Activated payment                        entitlements shall give a right to the annual payment of the amounts fixed therein, without prejudice to the application of                        financial discipline, of reduction of payments in accordance with Article 11 and of linear reductions in accordance with Article                        7, Article 51(2) and point (c) of Article 65(2) of this Regulation, and to the application of Article 63 of Regulation (EU)                        No 1306/2013.                  

2.For the purposes of this Title, 'eligible hectare' means:                  

(a)any agricultural area of the holding, including areas that were not in good agricultural condition on 30 June 2003 in Member                        States acceding to the Union on 1 May 2004 that opted upon accession to apply the single area payment scheme, that is used                        for an agricultural activity or, where the area is also used for non-agricultural activities, is predominantly used for agricultural                        activities; or                  

(b)any area which gave a right to payments in 2008 under the single payment scheme or the single area payment scheme laid down,                        respectively, in Titles III and IVA of Regulation (EC) No 1782/2003, and which:                  

no longer complies with the definition of 'eligible hectare' under point (a) as a result of the implementation of Directive                              92/43/EEC, Directive 2000/60/EC and Directive 2009/147/EC;                           

for the duration of the relevant commitment by the individual farmer, is afforested pursuant to Article 31 of Regulation (EC)                              No 1257/1999 or to Article 43 of Regulation (EC) No 1698/2005 or to Article 22 of Regulation (EU) No 1305/2013 or under a                              national scheme the conditions of which comply with Article 43(1), (2) and (3) of Regulation (EC) No 1698/2005 or Article                              22 of Regulation (EU) No 1305/2013; or                           

for the duration of the relevant commitment of the individual farmer, is set aside pursuant to Articles 22, 23 and 24 of Regulation                              (EC) No 1257/1999, to Article 39 of Regulation (EC) No 1698/2005 or to Article 28 of Regulation (EU) No 1305/2013.                           

3.For the purposes of point (a) of paragraph 2:                  

(a)where an agricultural area of a holding is also used for non-agricultural activities, that area shall be considered to be                        used predominantly for agricultural activities provided that those agricultural activities can be exercised without being                        significantly hampered by the intensity, nature, duration and timing of the non-agricultural activities;                  

(b)Member States may draw up a list of areas which are predominantly used for non-agricultural activities.                  

Member States shall establish criteria for the implementation of this paragraph on their territory.

4.Areas shall be considered to be eligible hectares only if they comply with the definition of eligible hectare throughout the                        calendar year, except in the case of force majeure or exceptional circumstances.                  

5.For the purposes of determining 'eligible hectare', Member States having taken the decision referred to in the second subparagraph                        of Article 4(2) may apply a reduction coefficient to convert the hectares concerned into 'eligible hectares'.                  

6.Areas used for the production of hemp shall only be eligible hectares if the varieties used have a tetrahydrocannabinol content                        not exceeding 0,2 %.                  

##### Article 33U.K.Declaration of eligible hectares

1.For the purposes of the activation of payment entitlements provided for in Article 32(1), the farmer shall declare the parcels                        corresponding to the eligible hectares accompanying any payment entitlement. Except in the case of force majeure or exceptional                        circumstances, the parcels declared shall be at the farmer's disposal on a date fixed by the Member State, which shall be                        no later than the date fixed in that Member State for amending the aid application as referred to in Article 72(1) of Regulation                        (EU) No 1306/2013.                  

2.Member States may, in duly justified circumstances, authorise the farmer to modify his declaration provided that he maintains                        at least the number of hectares corresponding to his payment entitlements and respects the conditions for granting the payment                        under the basic payment scheme for the area concerned.                  

##### Article 34U.K.Transfer of payment entitlements

1.Payment entitlements may be transferred only to a farmer entitled to be granted direct payments in accordance with Article                        9 established in the same Member State, except in the case of transfer by actual or anticipated inheritance.                  

Payment entitlements, including in the case of actual or anticipated inheritance, may be activated only in the Member State                     where they were allocated.                  

2.Where Member States exercise the option in Article 23(1), payment entitlements may be transferred or activated only within                        the same region, except in the case of actual or anticipated inheritance.                  

Payment entitlements, including in the case of actual or anticipated inheritance, may be activated only in the region where                     they were allocated.                  

3.Member States not exercising the option in Article 23(1) may decide that payment entitlements may be transferred or activated                        only within the same region, except in the case of actual or anticipated inheritance.                  

Such regions shall be defined at the appropriate territorial level in accordance with objective criteria and in a way that                     ensures the equal treatment of farmers and avoids distortions of the market and of competition.                  

4.Where payment entitlements are transferred without land, Member States may, acting in compliance with the general principles                        of Union law, decide that a part of the payment entitlements transferred are to revert to the national reserve or regional                        reserves or that their unit value is to be reduced in favour of the national reserve or regional reserves. Such reduction                        may be applied to one or more types of transfer.                  

5.The Commission shall adopt implementing acts laying down detailed rules governing the notification by farmers of transfer                        of payment entitlements to the national authorities and the deadlines within which such notification is to take place. Those                        implementing acts shall be adopted in accordance with the examination procedure referred to in Article 71(2).                  

##### Article 35U.K.Delegated powers

1.In order to ensure legal certainty and to clarify the specific situations that may arise in the application of the basic payment                        scheme, the Commission shall be empowered to adopt delegated acts in accordance with Article 70 concerning:                  

(a)rules on eligibility and access in respect of the basic payment scheme of farmers in the case of inheritance and anticipated                        inheritance, inheritance under a lease, change of legal status or denomination, transfer of payment entitlements, merger or                        scission of the holding, and the application of the contract clause referred to in Article 24(8);                  

(b)rules on the calculation of the value and number or on the increase or reduction in the value of payment entitlements in relation                        to the allocation of payment entitlements under any provision of this Title, including rules:                  

on the possibility of a provisional value and number or of a provisional increase of payment entitlements allocated on the                              basis of the application from the farmer,                           

on the conditions for establishing the provisional and definitive value and number of the payment entitlements,

on the cases where a sale or lease contract may affect the allocation of payment entitlements;

(c)rules on the establishment and calculation of the value and number of payment entitlements received from the national reserve                        or regional reserves;                  

(d)rules on the modification of the unit value of payment entitlements in the case of fractions of payment entitlements and in                        the case of transfer of payment entitlements referred to in Article 34(4);                  

(e)criteria for applying options under points (a), (b) and (c) of the third subparagraph of Article 24(1);                  

(f)criteria for applying limitations on the number of payment entitlements to be allocated in accordance with Article 24(4) to                        (7);                  

(g)criteria for the allocation of payment entitlements pursuant to Article 30(6) and (7);                  

(h)criteria for setting the reduction coefficient referred to in Article 32(5).                  

2.In order to ensure the proper management of payment entitlements, the Commission shall be empowered to adopt delegated acts                        in accordance with Article 70 laying down rules on the content of the declaration and the requirements for the activation                        of payment entitlements.                  

3.In order to preserve public health, the Commission shall be empowered to adopt delegated acts in accordance with Article 70                        laying down rules making the granting of payments conditional upon the use of certified seeds of certain hemp varieties and                        the procedure for the determination of hemp varieties and the verification of their tetrahydrocannabinol content referred                        to in Article 32(6).                  

#### *Section 4*U.K.***Single area payment scheme***

##### Article 36U.K.Single area payment scheme

1.Member States applying in 2014 the single area payment scheme laid down in Chapter 2 of Title V of Regulation (EC) No 73/2009                        may, under the conditions set out in this Regulation, decide to continue to apply that scheme until 31 December 2020 at the                        latest. They shall notify the Commission of their decision and of the end date of the application of that scheme by 1 August                        2014.                  

During the period of application of the single area payment scheme, Sections 1, 2 and 3 of this Chapter shall not apply to                     those Member States, with the exception of the second subparagraph of Article 23(1), Article 23(6) as well as Article 32(2)                     to (6).                  

2.The single area payment shall be granted on an annual basis for each eligible hectare declared by the farmer in accordance                        with point (a) of the first subparagraph of Article 72(1) of Regulation (EU) No 1306/2013. It shall be calculated each year                        by dividing the annual financial envelope established in accordance with paragraph 4 of this Article by the total number of                        eligible hectares declared in the Member State concerned in accordance with point (a) of the first subparagraph of Article                        72(1) of Regulation (EU) No 1306/2013.                  

3.By way of derogation from paragraph 2 of this Article, Member States that decide to apply Article 38 of this Regulation from                        1 January 2018 at the latest may use, for the period during which they apply this Article, up to 20 % of the annual financial                        envelope referred to in paragraph 2 of this Article to differentiate the single area payment per hectare.                  

When doing so, they shall take into account the support granted for calendar year 2014 under one or more of the schemes pursuant                     to points (a), (b) and (c) of Article 68(1) and Articles 126, 127 and 129 of Regulation (EC) No 73/2009.                  

Cyprus may differentiate the aid taking into account the sector-specific financial envelopes set out in Annex XVIIa of Regulation                     (EC) No 73/2009, reduced by any aid granted to the same sector pursuant to Article 37 of this Regulation.                  

4.The Commission shall adopt implementing acts setting, for each Member State, the annual national ceiling for the single area                        payment scheme by deducting from the annual national ceiling set out in Annex II the ceilings fixed in accordance with Articles                        42, 47, 49, 51 and 53. Those implementing acts shall be adopted in accordance with the examination procedure referred to in                        Article 71(2).                  

5.Except in the case of force majeure or exceptional circumstances, the hectares referred to in paragraph 2 shall be at the                        farmer's disposal on a date fixed by the Member State, which shall be no later than the date fixed in that Member State for                        amendment of the aid application referred to in Article 72(1) of Regulation (EU) No 1306/2013.                  

6.The Commission shall be empowered to adopt delegated acts in accordance with Article 70 concerning rules on eligibility and                        the access of farmers to the single area payment scheme.                  

##### Article 37U.K.Transitional national aid

1.Member States applying the single area payment scheme in accordance with Article 36 may decide to grant transitional national                        aid in the period 2015-2020.                  

2.Transitional national aid may be granted to farmers in sectors in respect of which this aid or, in the case of Bulgaria and                        Romania, complementary national direct payments were granted in 2013.                  

3.The conditions for granting transitional national aid shall be identical to those authorised for the granting of payments                        pursuant to Article 132(7) or Article 133a of Regulation (EC) No 73/2009 in respect of 2013, with the exception of the reduction                        of the payments resulting from the application of Article 132(2) in conjunction with Articles 7 and 10 of that Regulation.                  

4.The total amount of transitional national aid that may be granted to farmers in any of the sectors referred to in paragraph                        2 shall be limited to the following percentage of the sector-specific financial envelopes authorised by the Commission in                        accordance with Article 132(7) or Article 133a(5) of Regulation (EC) No 73/2009 in 2013:                  
          -  75 % in 2015, 
          -  70 % in 2016, 
          -  65 % in 2017, 
          -  60 % in 2018, 
          -  55 % in 2019, 
          -  50 % in 2020. 

For Cyprus, the percentage shall be calculated on the basis of the sector-specific financial envelopes set out in Annex XVIIa                     to Regulation (EC) No 73/2009.                  

5.Paragraphs 2 and 3 shall not apply to Cyprus.                  

6.Member States shall notify any decision referred to in paragraph 1 to the Commission by 31 March of each year. The notification                        shall include the following information:                  

(a)the sector-specific financial envelope;                  

(b)the maximum rate of transitional national aid, where appropriate.                  

7.Member States may decide, on the basis of objective criteria and within the limits set out in paragraph 4, on the amounts                        of transitional national aid to be granted.                  

#### *Section 5*U.K.***Implementation of the basic payment scheme in the member states having applied the single area payment scheme***

##### Article 38U.K.Introduction of the basic payment scheme in the Member States having applied the single area payment scheme

Save as otherwise provided for in this Section, this Title shall apply to the Member States having applied the single area                     payment scheme provided for in Section 4 of this Chapter.                  

Articles 24 to 29 shall not apply to those Member States.

##### Article 39U.K.First allocation of payment entitlements

1.Payment entitlements shall be allocated to farmers who are entitled to be granted direct payments in accordance with Article                        9 of this Regulation provided that:                  

(a)they apply for allocation of payment entitlements under the basic payment scheme by a final date for submission of applications                        to be set in accordance with point (b) of the first subparagraph of Article 78 of Regulation (EU) No 1306/2013 in the first                        year of implementation of the basic payment scheme, except in case of force majeure or exceptional circumstances; and                  

(b)they were entitled to receive payments, before any reduction or exclusion provided for in Chapter 4 of Title II of Regulation                        (EC) No 73/2009, in respect of an aid application for direct payments, for transitional national aid or for complementary                        national direct payments in accordance with Regulation (EC) No 73/2009 for 2013.                  

Member States may allocate payment entitlements to farmers who are entitled to be granted direct payments in accordance with                     Article 9 of this Regulation, who fulfil the condition provided for in point (a) of the first subparagraph, who did not receive                     payments for 2013 in respect of an aid application referred to in point (b) of the first subparagraph of this paragraph and                     who, on the date fixed by the Member State concerned in accordance with Article 11(2) of Regulation (EC) No 1122/2009 for                     the claim year 2013, had only agricultural land that was not in good agricultural condition on the 30 June 2003, as provided                     for in Article 124(1) of Regulation (EC) No 73/2009.                  

2.Except in the case of force majeure or exceptional circumstances, the number of payment entitlements allocated per farmer                        in the first year of implementation of the basic payment scheme shall be equal to the number of eligible hectares which the                        farmer declares in his aid application in accordance with point (a) of the first subparagraph of Article 72(1) of Regulation                        (EU) No 1306/2013 for the first year of implementation of the basic payment scheme and which are at his disposal on a date                        fixed by the Member State. That date shall be no later than the date fixed in that Member State for amending such aid application.                  

3.The Commission shall be empowered to adopt delegated acts in accordance with Article 70 laying down further rules on the introduction                        of the basic payment scheme in Member States having applied the single area payment scheme.                  

4.The Commission shall adopt implementing acts laying down rules on applications for the allocation of payment entitlements                        submitted in the year of allocation of payment entitlements where those payment entitlements may not yet be definitively established                        and where that allocation is affected by specific circumstances.                  

Those implementing acts shall be adopted in accordance with the examination procedure referred to in Article 71(2).

##### Article 40U.K.Value of payment entitlements

1.In the first year of implementation of the basic payment scheme, Member States shall calculate the unit value of payment entitlements                        by dividing a fixed percentage of the national ceiling set out in Annex II for each relevant year by the number of payment                        entitlements in the first year of implementation of the basic payment scheme, excluding those allocated from the national                        reserve or regional reserves.                  

The fixed percentage referred to in the first subparagraph shall be calculated by dividing the national or regional ceiling                     for the basic payment scheme to be set in accordance with, respectively, Article 22(1) or Article 23(2) of this Regulation                     for the first year of implementation of the basic payment scheme, after applying the linear reduction provided for in paragraph                     1 or, where applicable, paragraph 2 of Article 30 by the national ceiling set out in Annex II for the first year of implementation                     of the basic payment scheme. The payment entitlements shall be expressed in a number that corresponds to a number of hectares.                  

2.By way of derogation from the calculation method referred to in paragraph 1, Member States may decide to differentiate the                        value of payment entitlements in the first year of implementation of the basic payment scheme, excluding those allocated from                        the national reserve or regional reserves for each relevant year, on the basis of their initial unit value.                  

3.The initial unit value of payment entitlements referred to in paragraph 2 shall be set by dividing a fixed percentage of the                        total value of aid, excluding aid pursuant to Articles 41, 43, 48 and 50 and Title IV of this Regulation, received by a farmer                        in accordance with this Regulation for the calendar year preceding the implementation of the basic payment scheme, before                        the application of Article 63 of Regulation (EU) No 1306/2013, by the number of payment entitlements allocated to that farmer                        in the first year of implementation of the basic payment scheme, excluding those allocated from the national reserve or regional                        reserves.                  

That fixed percentage shall be calculated by dividing the national or regional ceiling for the basic payment scheme to be                     set in accordance with, respectively, Article 22(1) or Article 23(2) of this Regulation for the first year of implementation                     of the basic payment scheme, after applying the linear reduction provided for in paragraph 1 or, where applicable, paragraph                     2 of Article 30, by the total value of aid, excluding aid pursuant to Articles 41, 43, 48 and 50 and Title IV of this Regulation,                     granted for the calendar year preceding the implementation of the basic payment scheme within the Member State or region concerned,                     before the application of Article 63 of Regulation (EU) No 1306/2013.                  

4.When applying paragraph 2, Member States, acting in compliance with the general principles of Union law, shall move towards                        approximating the value of the payment entitlements at national or regional level. To this end, Member States shall fix the                        steps to be taken and the method of calculation to be used and shall notify them to the Commission by 1 August of the year                        preceding the implementation of the basic payment scheme. Those steps shall include annual progressive modifications of the                        initial value of payment entitlements referred to in paragraph 3 in accordance with objective and non-discriminatory criteria,                        starting from the first year of implementation of the basic payment scheme.                  

In the first year of implementation of the basic payment scheme, Member States shall inform the farmers of the value of their                     entitlements, calculated in accordance with this Article, for each year of the period covered by this Regulation.                  

5.For the purposes of paragraph 3, a Member State may, on the basis of objective criteria, provide that, in cases of sale or                        grant or expiry of all or part of a lease of agricultural areas after the date fixed pursuant to Article 36(5) and before                        the date fixed pursuant to Article 33(1), the increase, or a part thereof, in the value of payment entitlements that would                        be allocated to the farmer concerned is to revert to the national reserve or regional reserves where the increase would lead                        to a windfall profit for the farmer concerned.                  

Those objective criteria shall be established in such a way as to ensure the equal treatment of farmers and to avoid distortions                     of the market and of competition and shall include, at least, the following:                  

(a)a minimum duration for the lease;                  

(b)the proportion of the payment received which is to revert to the national reserve or regional reserves.                  

### *CHAPTER 2*U.K.***Redistributive payment***

#### Article 41U.K.General rules

1.Member States may decide by 1 August of any given year to grant, from the following year, an annual payment to farmers who                        are entitled to a payment under the basic payment scheme referred to in Sections 1, 2, 3 and 5 of Chapter 1 or under the single                        area payment scheme referred to in Section 4 of Chapter 1 ("the redistributive payment").                  

Member States shall notify the Commission of any such decision by the date referred to in the first subparagraph.

2.Member States which have decided to apply the basic payment scheme at regional level in accordance with Article 23 may apply                        the redistributive payment at regional level.                  

3.Without prejudice to the application of financial discipline, of reduction of payments in accordance with Article 11, of linear                        reductions as referred in Article 7 of this Regulation, and to the application of Article 63 of Regulation (EU) No 1306/2013,                        the redistributive payment shall be granted annually upon activation of payment entitlements by the farmer, or, in Member                        States applying Article 36 of this Regulation, upon declaration of eligible hectares by the farmer.                  

4.The redistributive payment shall be calculated each year by Member States by multiplying a figure to be set by the Member                        State, which shall not be higher than 65 % of the national or regional average payment per hectare, by the number of payment                        entitlements activated by the farmer in accordance with Article 33(1) or by the number of eligible hectares declared by the                        farmer in accordance with Article 36(2). The number of such payment entitlements or hectares shall not exceed a maximum to                        be set by Member States which shall not be higher than 30 hectares or the average size of agricultural holdings set out in                        Annex VIII if that average size exceeds 30 hectares in the Member State concerned.                  

5.Provided that the maximum limits set out in paragraph 4 are respected, Member States may, at national level, establish a graduation                        in the number of hectares set in accordance with that paragraph, which shall apply identically to all farmers.                  

6.The national average payment per hectare referred to in paragraph 4 of this Article shall be established by the Member States                        on the basis of the national ceiling set out in Annex II for calendar year 2019 and the number of eligible hectares declared                        in accordance with Article 33(1) or Article 36(2) in 2015.                  

The regional average payment per hectare referred to in paragraph 4 of this Article shall be established by the Member States                     by using a share of the national ceiling set out in Annex II for calendar year 2019 and the number of eligible hectares declared                     in the region concerned in accordance with Article 33(1) in 2015. For each region, this share shall be calculated by dividing                     the respective regional ceiling set in accordance with Article 23(2) by the national ceiling set in accordance with Article                     22(1), after applying the linear reduction provided for in paragraph 1 of Article 30 where paragraph 2 of that Article is                     not applied.                  

7.Member States shall ensure that no advantage provided for under this Chapter is granted to farmers in respect of whom it is                        established that, after 18 October 2011, they divided their holding with the sole purpose of benefiting from the redistributive                        payment. This shall also apply to farmers whose holdings result from that division.                  

8.In the case of a legal person, or a group of natural or legal persons, Member States may apply the maximum number of payment                        entitlements or hectares referred to in paragraph 4 at the level of the members of those legal persons or groups where national                        law provides for the individual members to assume rights and obligations comparable to those of individual farmers who have                        the status of a head of holding, in particular as regards their economic, social and tax status, provided that they have contributed                        to strengthening the agricultural structures of the legal persons or groups concerned.                  

#### Article 42U.K.Financial provisions

1.In order to finance the redistributive payment, Member States may decide, by the date referred to in Article 41(1), to use                        up to 30 % of the annual national ceiling set out in Annex II. They shall notify the Commission of any such decision by that                        date.                  

2.On the basis of the percentage of the national ceiling to be used by Member States pursuant to paragraph 1 of this Article,                        the Commission shall adopt implementing acts fixing the corresponding ceilings for the redistributive payment on a yearly                        basis. Those implementing acts shall be adopted in accordance with the examination procedure referred to in Article 71(2).                  

### *CHAPTER 3*U.K.***Payment for agricultural practices beneficial for the climate and the environment***

#### Article 43U.K.General rules

1.Farmers entitled to a payment under the basic payment scheme or the single area payment scheme shall observe, on all their                        eligible hectares within the meaning of Article 32(2) to (5), the agricultural practices beneficial for the climate and the                        environment referred to in paragraph 2 of this Article or the equivalent practices referred to in paragraph 3 of this Article.                  

2.The agricultural practices beneficial for the climate and the environment shall be the following:                  

(a)crop diversification;                  

(b)maintaining existing permanent grassland; and                  

(c)having ecological focus area on the agricultural area.                  

3.The equivalent practices shall be those which include similar practices that yield an equivalent or higher level of benefit                        for the climate and the environment compared to one or several of the practices referred to in paragraph 2. Those equivalent                        practices and the practice or practices referred to in paragraph 2 to which they are equivalent are listed in Annex IX and                        shall be covered by any of the following:                  

(a)commitments undertaken in accordance with either Article 39(2) of Regulation (EC) No 1698/2005 or Article 28(2) of Regulation                        (EU) No 1305/2013;                  

(b)national or regional environmental certification schemes, including those for the certification of compliance with national                        environmental legislation, going beyond the relevant mandatory standards established pursuant to Chapter I of Title VI of                        Regulation (EU) No 1306/2013, which aim to meet objectives relating to soil and water quality, biodiversity, landscape preservation,                        and climate change mitigation and adaptation. Those certification schemes may include the practices listed in Annex IX to                        this Regulation, the practices referred to in paragraph 2 of this Article, or a combination of those practices.                  

4.The equivalent practices referred to in paragraph 3 shall not be the subject of double funding.                  

5.Member States may decide, including, where appropriate, at regional level, to restrict the choice of the farmers to use the                        options referred to in points (a) and (b) of paragraph 3.                  

6.Member States may decide, including, where appropriate, at regional level, that farmers shall carry out all of their relevant                        obligations under paragraph 1 in accordance with national or regional environmental certification schemes referred to in point                        (b) of paragraph 3.                  

7.Subject to the decisions of Member States referred to in paragraphs 5 and 6, a farmer may observe one or more of the practices                        referred to in point (a) of paragraph 3 only if these fully replace the related practice or practices referred to in paragraph                        2. A farmer may use certification schemes referred to in point (b) of paragraph 3 only if these cover the entire obligation                        referred to in paragraph 1.                  

8.Member States shall notify the Commission of their decisions referred to in paragraphs 5 and 6 and of the specific commitments                        or certification schemes which they intend to apply as equivalent practices within the meaning of paragraph 3.                  

The Commission shall assess whether the practices included in the specific commitments or certification schemes are covered                     by the list in Annex IX, and if it considers this not to be the case, notify Member States accordingly by means of implementing                     acts adopted without applying the procedure referred to in Article 71(2) or (3). Where the Commission notifies a Member State                     that those practices are not covered by the list in Annex IX, that Member State shall not recognise as equivalent practices                     within the meaning of paragraph 3 of this Article the specific commitments or certification schemes covered by the Commission                     notification.                  

9.Without prejudice to paragraphs 10 and 11 of this Article, to the application of financial discipline and of linear reductions                        in accordance with Article 7 of this Regulation and to the application of Article 63 of Regulation (EU) No 1306/2013, Member                        States shall grant the payment referred to in this Chapter to farmers who observe the practices referred to in paragraph 1                        of this Article that are relevant for them, and to the extent that those farmers comply with Articles 44, 45 and 46 of this                        Regulation.                  

This payment shall take the form of an annual payment per eligible hectare declared in accordance with Article 33(1) or Article                     36(2), the amount of which shall be calculated annually by dividing the amount resulting from the application of Article 47                     by the total number of eligible hectares declared in accordance with Article 33(1) or Article 36(2) in the Member State or                     the region concerned.                  

By way of derogation from the second subparagraph, Member States deciding to apply Article 25(2) may decide to grant the payment                     referred to in this paragraph as a percentage of the total value of the payment entitlements that the farmer has activated                     in accordance with Article 33(1) for each relevant year.                  

For each year and each Member State or region, that percentage shall be calculated by dividing the amount resulting from the                     application of Article 47 by the total value of all payment entitlements activated in accordance with Article 33(1) in that                     Member State or region.                  

10.Farmers whose holdings are fully or partly situated in areas covered by Directives 92/43/EEC, 2000/60/EC, or 2009/147/EC shall                        be entitled to the payment referred to in this Chapter provided that they observe the practices referred to in this Chapter                        to the extent that those practices are compatible in the holding concerned with the objectives of those Directives.                  

11.Farmers complying with the requirements laid down in Article 29(1) of Regulation (EC) No 834/2007 as regards organic farming                        shall be entitled ipso facto to the payment referred to in this Chapter.                  

The first subparagraph shall apply only to the units of a holding that are used for organic production in accordance with                     Article 11 of Regulation (EC) No 834/2007.                  

12.The Commission shall be empowered to adopt delegated acts in accordance with Article 70:                  

(a)adding equivalent practices to the list set out in Annex IX;                  

(b)establishing appropriate requirements applicable to the national or regional certification schemes referred to in point (b)                        of paragraph 3 of this Article, including the level of assurance to be provided by those schemes;                  

(c)establishing detailed rules for the calculation of the amount referred to in Article 28(6) of Regulation (EU) No 1305/2013                        for the practices referred to in points 3 and 4 of Section I and point 7 of Section III of Annex IX to this Regulation, and                        any further equivalent practices added to that Annex pursuant to point (a) of this paragraph for which a specific calculation                        is needed in order to avoid double funding.                  

13.The Commission shall adopt implementing acts establishing rules on the procedure for the notifications, including on timetables                        for their submission, and the Commission assessment referred to in paragraph 8. Those implementing acts shall be adopted in                        accordance with the examination procedure referred to in Article 71(2).                  

#### Article 44U.K.Crop diversification

1.Where the arable land of the farmer covers between 10 and 30 hectares and is not entirely cultivated with crops under water                        for a significant part of the year or for a significant part of the crop cycle, there shall be at least two different crops                        on that arable land. The main crop shall not cover more than 75 % of that arable land.                  

Where the arable land of the farmer covers more than 30 hectares and is not entirely cultivated with crops under water for                     a significant part of the year or for a significant part of the crop cycle, there shall be at least three different crops                     on that arable land. The main crop shall not cover more than 75 % of that arable land and the two main crops together shall                     not cover more than 95 % of that arable land.                  

2.Without prejudice to the number of crops required pursuant to paragraph 1, the maximum thresholds set out therein shall not                        apply to holdings where grasses or other herbaceous forage or land lying fallow cover more than 75 % of the arable land. In                        such cases, the main crop on the remaining arable area shall not cover more than 75 % of that remaining arable land, except                        where this remaining area is covered by grasses or other herbaceous forage or land lying fallow.                  

3.Paragraphs 1 and 2 shall not apply to holdings:                  

(a)where more than 75 % of the arable land is used for the production of grasses or other herbaceous forage, is land lying fallow,                        or is subject to a combination of these uses, provided that the arable area not covered by these uses does not exceed 30 hectares;                  

(b)where more than 75 % of the eligible agricultural area is permanent grassland, is used for the production of grasses or other                        herbaceous forage or for the cultivation of crops under water for a significant part of the year or for a significant part                        of the crop cycle, or is subject to a combination of these uses, provided that the arable area not covered by these uses does                        not exceed 30 hectares;                  

(c)where more than 50 % of the areas of arable land declared were not declared by the farmer in his aid application of the previous                        year and, where based on a comparison of the geo-spatial aid applications, all arable land is being cultivated with a different                        crop compared to that of the previous calendar year;                  

(d)that are situated in areas north of 62nd parallel or certain adjacent areas. Where the arable land of such holdings covers                        more than 10 hectares, there shall be at least two crops on the arable land, and none of these crops shall cover more than                        75 % of the arable land, unless the main crop is grasses or other herbaceous forage, or land lying fallow.                  

4.For the purposes of this Article, a "crop" means any of the following:                  

(a)a culture of any of the different genera defined in the botanical classification of crops;                  

(b)a culture of any of the species in the case of *Brassicaceae, Solanaceae,* and *Cucurbitaceae*;                  

(c)land lying fallow;                  

(d)grasses or other herbaceous forage.                  

Winter crop and spring crop shall be considered to be distinct crops even if they belong to the same genus.

5.The Commission shall be empowered to adopt delegated acts in accordance with Article 70:                  

(a)recognising other types of genera and species than those referred to in paragraph 4 of this Article; and                  

(b)laying down the rules concerning the application of the precise calculation of shares of different crops.                  

#### Article 45U.K.Permanent grassland

1.Member States shall designate permanent grasslands which are environmentally sensitive in areas covered by Directives 92/43/EEC                        or 2009/147/EC, including in peat and wetlands situated in these areas, and which need strict protection in order to meet                        the objectives of those Directives.                  

Member States may, in order to ensure the protection of environmentally valuable permanent grasslands, decide to designate                     further sensitive areas situated outside areas covered by Directives 92/43/EEC or 2009/147/EC, including permanent grasslands                     on carbon-rich soils.                  

Farmers shall not convert or plough permanent grassland situated in areas designated by Member States under the first subparagraph                     and, where applicable, the second subparagraph.                  

2.Member States shall ensure that the ratio of areas of permanent grassland to the total agricultural area declared by the farmers                        in accordance with point (a) of the first subparagraph of Article 72(1) of Regulation (EU) No 1306/2013 does not decrease                        by more than 5 % compared to a reference ratio to be established by Member States in 2015 by dividing areas of permanent grassland                        referred to in point (a) of the second subparagraph of this paragraph by the total agricultural area referred to in point                        (b) of that subparagraph.                  

For the purposes of establishing the reference ratio referred to in the first subparagraph:

(a)"areas of permanent grassland" means the land under permanent pasture declared in 2012, or 2013 in the case of Croatia, in                        accordance with Regulation (EC) No 73/2009 by the farmers subject to the obligations under this Chapter, as well as the areas                        of permanent grassland declared in 2015 in accordance with point (a) of the first subparagraph of Article 72(1) of Regulation                        (EU) No 1306/2013 by the farmers subject to the obligations under this Chapter that have not been declared as land under permanent                        pasture in 2012 or, in the case of Croatia, 2013;                  

(b)"total agricultural area" means the agricultural area declared in 2015 in accordance with point (a) of the first subparagraph                        of Article 72(1) of Regulation (EU) No 1306/2013 by farmers subject to the obligations under this Chapter.                  

The reference ratio of permanent grassland shall be recalculated in cases where farmers subject to the obligations under this                     Chapter have an obligation to reconvert an area into permanent grassland in 2015 or in 2016 in accordance with Article 93                     of Regulation (EU) No 1306/2013. In such cases, these areas shall be added to the areas of permanent grassland referred to                     in point (a) of the second subparagraph of this paragraph.                  

The ratio of permanent grassland shall be established each year on the basis of the areas declared by the farmers subject                     to the obligations under this Chapter for that year in accordance with point (a) of the first subparagraph of Article 72(1)                     of Regulation (EU) No 1306/2013.                  

The obligation under this paragraph shall apply at national, regional or the appropriate sub-regional level. Member States                     may decide to apply an obligation to maintain permanent grassland at holding level in order to ensure that the ratio of permanent                     grassland does not decrease by more than 5 %. Member States shall notify the Commission of any such decision by 1 August 2014.                  

Member States shall notify the reference ratio and the ratio referred to in this paragraph to the Commission.

3.Where it is established that the ratio referred to in paragraph 2 has decreased by more than 5 % at regional or sub-regional                        level or, where applicable, at national level, the Member State concerned shall impose obligations at holding level to reconvert                        land into permanent grassland for those farmers who have land at their disposal which was converted from land under permanent                        pasture or from permanent grassland into land for other uses during a period in the past.                  

However, where the amount of areas of permanent grassland in absolute terms established in accordance with point (a) of the                     second subparagraph of paragraph 2 is maintained within certain limits, the obligation set out in the first subparagraph of                     paragraph 2 shall be considered to have been complied with.                  

4.Paragraph 3 shall not apply where the decrease below the threshold is the result of afforestation that is compatible with                        the environment and does not include plantations of short rotation coppice, Christmas trees or fast growing trees for energy                        production.                  

5.In order to ensure that the ratio of permanent grassland is maintained, the Commission shall be empowered to adopt delegated                        acts in accordance with Article 70 laying down detailed rules on maintenance of permanent grassland, including rules on reconversion                        in the case of non-respect of the obligation in paragraph 1 of this Article, rules applying to Member States for setting up                        obligations at holding level for maintaining permanent grassland as referred to in paragraphs 2 and 3 and any adjustment of                        the reference ratio referred to in paragraph 2 that may become necessary.                  

6.The Commission shall be empowered to adopt delegated acts in accordance with Article 70:                  

(a)laying down the framework for the designation of further sensitive areas referred to in the second subparagraph of paragraph                        1 of this Article;                  

(b)establishing detailed methods for the determination of the ratio of permanent grassland and of the total agricultural area                        that has to be maintained pursuant to paragraph 2 of this Article;                  

(c)defining the period in the past referred to in the first subparagraph of paragraph 3 of this Article.                  

7.The Commission shall adopt implementing acts fixing the limits referred to in the second subparagraph of paragraph 3 of this                        Article. Those implementing acts shall be adopted in accordance with the examination procedure referred to in Article 71(2).                  

#### Article 46U.K.Ecological focus area

1.Where the arable land of a holding covers more than 15 hectares, the farmer shall ensure that, from 1 January 2015, an area                        corresponding to at least 5 % of the arable land of the holding that the farmer declared in accordance with point (a) of the                        first subparagraph of Article 72(1) of Regulation (EU) No 1306/2013 and, if they are considered to be ecological focus area                        by the Member State in accordance with paragraph 2 of this Article, including the areas mentioned in points (c), (d), (g)                        and (h) of that paragraph is ecological focus area.                  

The percentage referred to in the first subparagraph of this paragraph shall be increased from 5 % to 7 % subject to a legislative                     act of the European Parliament and of the Council in accordance with Article 43(2) TFEU.                  

By 31 March 2017, the Commission shall present an evaluation report on the implementation of the first subparagraph of this                     paragraph accompanied, where appropriate, by a proposal for a legislative act as referred to in the second subparagraph.                  

2.By 1 August 2014, Member States shall decide that one or more of the following are to be considered to be ecological focus                        area:                  

(a)land lying fallow;                  

(b)terraces;                  

(c)landscape features, including such features adjacent to the arable land of the holding which, by way of derogation from Article                        43(1) of this Regulation, may include landscape features that are not included in the eligible area in accordance with point                        (c) of Article 76(2) of Regulation (EU) No 1306/2013;                  

(d)buffer strips, including buffer strips covered by permanent grassland, provided that these are distinct from adjacent eligible                        agricultural area;                  

(e)hectares of agro-forestry that receive, or have received, support under Article 44 of Regulation (EC) No 1698/2005 and/or                        Article 23 of Regulation (EU) No 1305/2013;                  

(f)strips of eligible hectares along forest edges;                  

(g)areas with short rotation coppice with no use of mineral fertiliser and/or plant protection products;                  

(h)afforested areas referred to in point (b)(ii) of Article 32(2) of this Regulation;                  

(i)areas with catch crops, or green cover established by the planting and germination of seeds, subject to the application of                        weighting factors referred to in paragraph 3 of this Article;                  

(j)areas with nitrogen-fixing crops.                  

With the exception of the areas of the holding referred to in points (g) and (h) of the first subparagraph of this paragraph,                     the ecological focus area shall be located on the arable land of the holding. In the case of areas mentioned in points (c)                     and (d) of the first subparagraph of this paragraph, the ecological focus area may also be adjacent to the arable land of                     the holding the farmer declared in accordance with point (a) of the first subparagraph of Article 72(1) of Regulation (EU)                     No 1306/2013.                  

3.In order to simplify administration and to take account of the characteristics of the types of ecological focus area listed                        in the first subparagraph of paragraph 2, as well as to facilitate their measurement, Member States may, when calculating                        the total hectares represented by the ecological focus area of the holding, make use of the conversion and/or weighting factors                        set out in Annex X. If a Member State decides to consider to be ecological focus area the area under point (i) of the first                        subparagraph of paragraph 2 or any other area that is subject to a weighting of less than 1, the use of the weighting factors                        set out in Annex X shall be mandatory.                  

4.Paragraph 1 shall not apply to holdings:                  

(a)where more than 75 % of the arable land is used for the production of grasses or other herbaceous forage, is land lying fallow,                        is used for cultivation of leguminous crops, or is subject to a combination of those uses, provided that the arable area not                        covered by those uses does not exceed 30 hectares;                  

(b)where more than 75 % of the eligible agricultural area is permanent grassland, is used for the production of grasses or other                        herbaceous forage or for the cultivation of crops under water either for a significant part of the year or for a significant                        part of the crop cycle, or is subject to a combination of those uses, provided that the arable area not covered by these uses                        does not exceed 30 hectares.                  

5.Member States may decide to implement up to half of the percentage points of the ecological focus area referred to in paragraph                        1 at regional level in order to obtain adjacent ecological focus areas. Member States shall designate the areas and the obligations                        of participating farmers or groups of farmers. The aim of the designation of areas and obligations shall be to underpin the                        implementation of Union policies on the environment, climate and biodiversity.                  

6.Member States may decide to allow farmers whose holdings are in close proximity to fulfil the obligation referred to in paragraph                        1 collectively ("collective implementation"), provided that the ecological focus areas concerned are contiguous. In order                        to underpin the implementation of Union policies on the environment, climate and biodiversity, Member States may designate                        the areas on which collective implementation is possible and may impose further obligations upon farmers or groups of farmers                        participating in such collective implementation.                  

Each farmer participating in collective implementation shall ensure that at least 50 % of the area subject to the obligation                     in paragraph 1 is located on the land of his holding and is in accordance with the second subparagraph of paragraph 2. The                     number of farmers participating in such collective implementation shall not exceed ten.                  

7.Member States with more than 50 % of their total land surface area covered by forest may decide that paragraph 1 of this Article                        shall not apply to holdings situated in areas designated by those Member States as areas facing natural constraints in accordance                        with point (a) or (b) of Article 32(1) of Regulation (EU) No 1305/2013, provided that more than 50 % of the land surface area                        of the unit referred to in the second subparagraph of this paragraph is covered by forest and the ratio of forest land to                        agricultural land is higher than 3:1.                  

The area covered by forest and the ratio of forest land to agricultural land shall be assessed on an area level equivalent                     to the LAU2 level or on the level of another clearly delineated unit which covers a single clear contiguous geographical area                     having similar agricultural conditions.                  

8.Member States shall notify the Commission of the decisions referred to in paragraph 2 by 1 August 2014, and of any decisions                        referred to in paragraphs 3, 5, 6 or 7 by 1 August of the year preceding their application.                  

9.The Commission shall be empowered to adopt delegated acts in accordance with Article 70:                  

(a)laying down further criteria for the types of areas referred to in paragraph 2 of this Article to qualify as ecological focus                        area;                  

(b)adding other types of areas than those referred to in paragraph 2 that can be taken into account for the purpose of respecting                        the percentage referred to in paragraph 1;                  

(c)adapting Annex X in order to establish the conversion and weighting factors referred to in paragraph 3 and in order to take                        into account the criteria and/or types of areas to be defined by the Commission under points (a) and (b) of this paragraph;                  

(d)setting rules for the implementation referred to in paragraphs 5 and 6, including the minimum requirements on such implementation;                  

(e)establishing the framework within which Member States are to define the criteria to be met by holdings in order to be considered                        to be in close proximity for the purposes of paragraph 6;                  

(f)establishing the methods for determination of the percentage of total land surface area covered by forest and the ratio of                        forest land to agricultural land referred to in paragraph 7.                  

#### Article 47U.K.Financial provisions

1.In order to finance the payment referred to in this Chapter, Member States shall use 30 % of the annual national ceiling set                        out in Annex II.                  

2.Member States shall apply the payment referred to in this Chapter at national level.                  

Member States applying Article 23 may decide to apply the payment at regional level. In such cases, they shall use in each                     region a share of the ceiling set pursuant to paragraph 3 of this Article. For each region, this share shall be calculated                     by dividing the respective regional ceiling set in accordance with Article 23(2) by the national ceiling set in accordance                     with Article 22(1), after applying the linear reduction provided for in paragraph 1 of Article 30 where paragraph 2 of that                     Article is not applied.                  

3.The Commission shall adopt implementing acts fixing the corresponding ceilings for the payment referred to in this Chapter                        on a yearly basis. Those implementing acts shall be adopted in accordance with the examination procedure referred to in Article                        71(2).                  

### *CHAPTER 4*U.K.***Payment for areas with natural constraints***

#### Article 48U.K.General rules

1.Member States may grant a payment to farmers who are entitled to a payment under the basic payment scheme or the single area                        payment scheme referred to in Chapter 1 and whose holdings are fully or partly situated in areas with natural constraints                        designated by Member States in accordance with Article 32(1) of Regulation (EU) No 1305/2013 ("payment for areas with natural                        constraints").                  

2.Member States may decide to grant the payment for areas with natural constraints to all areas falling within the scope of                        paragraph 1, or to restrict the payment to some of those areas on the basis of objective and non-discriminatory criteria.                  

3.Without prejudice to paragraph 2 of this Article, to the application of financial discipline, of reduction of payments in                        accordance with Article 11 and of linear reduction in accordance with Article 7 of this Regulation, and to the application                        of Article 63 of Regulation (EU) No 1306/2013, the payment for areas with natural constraints shall be granted annually per                        eligible hectare situated in the areas for which a Member State has decided to grant a payment in accordance with paragraph                        2 of this Article. It shall be paid upon activation of payment entitlements in respect of those hectares held by the farmer                        concerned or, in Member States applying Article 36 of this Regulation, upon declaration of those eligible hectares by the                        farmer concerned.                  

4.The payment for areas with natural constraints, per hectare, shall be calculated by dividing the amount resulting from the                        application of Article 49 by the number of eligible hectares declared in accordance with Article 33(1) or Article 36(2) which                        are situated in the areas for which a Member State has decided to grant a payment in accordance with paragraph 2 of this Article.                  

Member States may, on the basis of objective and non-discriminatory criteria, also set a maximum number of hectares per holding                     for which support under this Chapter can be granted.                  

5.Member States may apply the payment for areas with natural constraints at regional level under the conditions laid down in                        this paragraph provided that they identified the regions concerned in accordance with objective and non-discriminatory criteria                        and, in particular, their natural constraint characteristics, including the severity of the constraints, and their agronomic                        conditions.                  

Member States shall divide the national ceiling referred to in Article 49(1) between the regions in accordance with objective                     and non-discriminatory criteria.                  

The payment for areas with natural constraints at regional level shall be calculated by dividing the regional ceiling calculated                     in accordance with the second subparagraph of this paragraph by the number of eligible hectares declared in the respective                     region in accordance with Article 33(1) or Article 36(2) which are situated in the areas for which a Member State has decided                     to grant a payment in accordance with paragraph 2 of this Article.                  

#### Article 49U.K.Financial provisions

1.In order to finance the payment for areas with natural constraints, Member States may decide, by 1 August 2014, to use up                        to 5 % of their annual national ceiling set out in Annex II. They shall notify the Commission of any such decision by that                        date.                  

Member States may, by 1 August 2016, review their decision and amend it with effect from 1 January 2017. They shall notify                     the Commission of any such decision by 1 August 2016.                  

2.On the basis of the percentage of the national ceiling to be used by Member States pursuant to paragraph 1, the Commission                        shall adopt implementing acts fixing the corresponding ceilings for the payment for areas with natural constraints on a yearly                        basis. Those implementing acts shall be adopted in accordance with the examination procedure referred to in Article 71(2).                  

### *CHAPTER 5*U.K.***Payment for young farmers***

#### Article 50U.K.General rules

1.Member States shall grant an annual payment to young farmers who are entitled to a payment under the basic payment scheme                        or the single area payment scheme referred to in Chapter 1 ("payment for young farmers").                  

2.For the purposes of this Chapter, 'young farmers', means natural persons:                  

(a)who are setting up for the first time an agricultural holding as head of the holding, or who have already set up such a holding                        during the five years preceding the first submission of an application under the basic payment scheme or the single area payment                        scheme referred to in Article 72(1) of Regulation (EU) No 1306/2013; and                  

(b)who are no more than 40 years of age in the year of submission of the application referred to in point (a).                  

3.Member States may define further objective and non-discriminatory eligibility criteria for young farmers applying for the                        payment for young farmers as regards appropriate skills and/or training requirements.                  

4.Without prejudice to the application of financial discipline, of reduction of payments in accordance with Article 11 and of                        linear reductions in accordance with Article 7 of this Regulation, and to the application of Article 63 of Regulation (EU)                        No 1306/2013, the payment for young farmers shall be granted annually upon activation of payment entitlements by the farmer                        or, in Member States applying Article 36 of this Regulation, upon declaration of eligible hectares by the farmer.                  

5.The payment for young farmers shall be granted per farmer for a maximum period of five years. That period shall be reduced                        by the number of years elapsed between the setting up referred to in point (a) of paragraph 2 and the first submission of                        the application for the payment for young farmers.                  

6.Each year, Member States not applying Article 36 shall calculate the amount of the payment for young farmers by multiplying                        the number of entitlements the farmer has activated in accordance with Article 32(1) by a figure corresponding to:                  

(a)25 % of the average value of the owned or leased-in payment entitlements held by the farmer; or                  

(b)25 % of an amount calculated by dividing a fixed percentage of the national ceiling for the calendar year 2019 set out in                        Annex II by the number of all eligible hectares declared in 2015 in accordance with Article 33(1). That fixed percentage shall                        be equal to the share of the national ceiling remaining for the basic payment scheme in accordance with Article 22(1) for                        2015.                  

7.Member States applying Article 36 shall each year calculate the amount of the payment for young farmers by multiplying a figure                        corresponding to 25 % of the single area payment calculated in accordance with Article 36 by the number of eligible hectares                        that the farmer has declared in accordance with Article 36(2).                  

8.By way of derogation from the paragraphs 6 and 7, Member States may calculate each year the amount of the payment for young                        farmers by multiplying a figure corresponding to 25 % of the national average payment per hectare by the number of entitlements                        that the farmer has activated in accordance with Article 32(1), or by the number of eligible hectares that the farmer has                        declared in accordance with Article 36(2).                  

The national average payment per hectare shall be calculated by dividing the national ceiling for the calendar year 2019 set                     out in Annex II by the number of eligible hectares declared in 2015 in accordance with Article 33(1) or Article 36(2).                  

9.Member States shall set a single maximum limit applicable to the number of payment entitlements activated by the farmer or                        to the number of eligible hectares declared by the farmer. That limit shall not be below 25 or above 90. Member States shall                        respect that limit when applying paragraphs 6, 7 and 8.                  

10.Instead of applying paragraphs 6 to 9, Member States may allocate an annual lump sum amount per farmer calculated by multiplying                        a fixed number of hectares by a figure corresponding to 25 % of the national average payment per hectare, as established in                        accordance with paragraph 8.                  

The fixed number of hectares referred to in the first subparagraph of this paragraph shall be calculated by dividing the total                     number of eligible hectares declared pursuant to Article 33(1) or Article 36(2) by the young farmers applying for the payment                     for young farmers in 2015 by the total number of young farmers applying for that payment in 2015.                  

A Member State may recalculate the fixed number of hectares in any year after 2015 in the case of significant changes in the                     number of young farmers applying for the payment or in the size of the holdings of young farmers, or both.                  

The annual lump sum amount that a farmer may be granted shall not exceed the total amount of his basic payment before application                     of Article 63 of Regulation (EU) No 1306/2013 in the given year.                  

11.In order to guarantee the protection of the rights of beneficiaries and to avoid discrimination among them, the Commission                        shall be empowered to adopt delegated acts in accordance with Article 70 concerning the conditions under which a legal person                        may be considered to be eligible to receive the payment for young farmers.                  

#### Article 51U.K.Financial provisions

1.In order to finance the payment for young farmers, Member States shall use a percentage, which shall not be higher than 2 %,                        of the annual national ceiling set out in Annex II. The Member States shall notify the Commission, by 1 August 2014, of the                        estimated percentage necessary to finance that payment.                  

Member States may, by 1 August of each year, revise their estimated percentage with effect from the subsequent year. They                     shall notify the Commission of the revised percentage by 1 August of the year preceding its application.                  

2.Without prejudice to the maximum of 2 % laid down in paragraph 1 of this Article, where the total amount of the payment for                        young farmers applied for in a Member State in a particular year exceeds the ceiling set pursuant to paragraph 4 of this Article,                        and where that ceiling is lower than that maximum, that Member State shall finance the difference by applying point (f) of                        the first subparagraph of Article 30(7) in the relevant year, by applying a linear reduction to all payments to be granted                        to all farmers in accordance with Article 32 or Article 36(2), or by both means.                  

3.Where the total amount of the payment for young farmers applied for in a Member State in a particular year exceeds the ceiling                        set pursuant to paragraph 4 of this Article, and where that ceiling amount to 2 % of the annual national ceiling set out in                        Annex II, Member States shall apply a linear reduction to the amounts to be paid pursuant to Article 50 in order to comply                        with that ceiling.                  

4.On the basis of the percentage notified by Member States pursuant to paragraph 1 of this Article, the Commission shall adopt                        implementing acts fixing the corresponding ceilings for the payment for young farmers on a yearly basis.                  

Those implementing acts shall be adopted in accordance with the examination procedure referred to in Article 71(2).

## TITLE IVU.K.**COUPLED SUPPORT**

### *CHAPTER 1*U.K.***Voluntary coupled support***

#### Article 52U.K.General rules

1.Member States may grant coupled support to farmers under the conditions laid down in this Chapter (in this Chapter referred                        to as "coupled support").                  

2.Coupled support may be granted to the following sectors and productions: cereals, oilseeds, protein crops, grain legumes,                        flax, hemp, rice, nuts, starch potato, milk and milk products, seeds, sheepmeat and goatmeat, beef and veal, olive oil, silkworms,                        dried fodder, hops, sugar beet, cane and chicory, fruit and vegetables and short rotation coppice.                  

3.Coupled support may only be granted to those sectors or to those regions of a Member State where specific types of farming                        or specific agricultural sectors that are particularly important for economic, social or environmental reasons undergo certain                        difficulties.                  

4.By way of derogation from paragraph 3, coupled support may also be granted to farmers who:                  

(a)on 31 December 2014, have payment entitlements granted in accordance with Section 2 of Chapter 3 of Title III and Article                        71m of Regulation (EC) No 1782/2003 and in accordance with Article 60 and the fourth paragraph of Article 65 of Regulation                        (EC) No 73/2009; and                  

(b)have at their disposal no eligible hectares for the activation of payment entitlements under the basic payment scheme as referred                        to in Chapter 1 of Title III of this Regulation.                  

5.Coupled support may only be granted to the extent necessary to create an incentive to maintain current levels of production                        in the sectors or regions concerned.                  

6.Coupled support shall take the form of an annual payment and shall be granted within defined quantitative limits and be based                        on fixed areas and yields or on a fixed number of animals.                  

7.In the case of a legal person, or a group of natural or legal persons, Member States may apply the limits referred to in paragraph                        6 at the level of the members of those legal persons or groups where national law provides for the individual members to assume                        rights and obligations comparable to those of individual farmers who have the status of a head of holding, in particular as                        regards their economic, social and tax status, provided that they have contributed to strengthening the agricultural structures                        of the legal persons or groups concerned.                  

8.Any coupled support granted under this Article shall be consistent with other Union measures and policies.                  

9.In order to ensure efficient and targeted use of Union funds and to avoid double funding under other similar support instruments,                        the Commission shall be empowered to adopt delegated acts in accordance with Article 70 laying down:                  

(a)the conditions for granting coupled support;                  

(b)rules on consistency with other Union measures and on the cumulation of support.                  

#### Article 53U.K.Financial provisions

1.In order to finance the coupled support, Member States may, by 1 August of the year preceding the first year of implementation                        of such support, decide to use up to 8 % of their annual national ceiling set out in Annex II.                  

2.By way of derogation from paragraph 1, Member States may decide to use up to 13 % of the annual national ceiling set out in                        Annex II, provided that:                  

(a)until 31 December 2014:                  

they apply the single area payment scheme laid down in Title V of Regulation (EC) No 73/2009,

they finance measures under Article 111 of that Regulation, or

they are covered by the derogation provided for in Article 69(5) or, in the case of Malta, in Article 69(1) of that Regulation;                              and/or                           

(b)they allocate, in total, during at least one year in the period 2010-2014, more than 5 % of their amount available for granting                        the direct payments provided for in Title III, Title IV, with the exception of Section 6 of Chapter 1 thereof, and Title V                        of Regulation (EC) No 73/2009 for financing:                  

the measures laid down in Section 2 of Chapter 2 of Title III of Regulation (EC) No 73/2009,

the support provided for in subpoints (i) to (iv) of point (a) and in points (b) and (e) of Article 68(1) of that Regulation,                              or                           

the measures under Chapter 1, with the exception of Section 6 of Title IV of that Regulation.

3.The percentages of the annual national ceiling referred to in paragraphs 1 and 2 may be increased by up to two percentage                        points for those Member States which decide to use at least 2 % of their annual national ceiling set out in Annex II to support                        the production of protein crops under this Chapter.                  

4.By way of derogation from paragraphs 1 and 2, Member States allocating, in total, during at least one year in the period 2010-2014,                        more than 10 % of their amount available for granting the direct payments provided for in Title III, Title IV, with the exception                        of Section 6 of Chapter 1 thereof, and Title V of Regulation (EC) No 73/2009 for financing:                  

(a)the measures laid down in Section 2 of Chapter 2 of Title III of Regulation (EC) No 73/2009;                  

(b)the support provided for in subpoints (i) to (iv) of point (a) and in points (b) and (e) of Article 68(1) of that Regulation;                        or                  

(c)the measures under Chapter 1, with the exception of Section 6, of Title IV of that Regulation                  

may decide to use more than 13 % of the annual national ceiling set out in Annex II to this Regulation, upon approval by the                     Commission in accordance with Article 55 of this Regulation.                  

5.By way of derogation from the percentages set out in paragraphs 1 to 4, Member States may choose to use up to EUR 3 million                        per year for financing coupled support.                  

6.Member States may, by 1 August 2016, review their decision pursuant to paragraphs 1 to 4 and decide, with effect from 2017:                  

(a)to leave unchanged, increase or decrease the percentage fixed pursuant to paragraphs 1, 2 and 3, within the limits laid down                        therein where applicable, or to leave unchanged or decrease the percentage fixed pursuant to paragraph 4;                  

(b)to modify the conditions for granting the support;                  

(c)to cease granting the support under this Chapter.                  

7.On the basis of the decision taken by each Member State pursuant to paragraphs 1 to 6 of this Article, the Commission shall                        adopt implementing acts fixing the corresponding ceilings for coupled support on a yearly basis. Those implementing acts shall                        be adopted in accordance with the examination procedure referred to in Article 71(2).                  

#### Article 54U.K.Notification

1.Member States shall notify the Commission of the decisions referred to in Article 53 by the dates referred to in that Article.                        Except for the decision referred to in point (c) of Article 53(6), the notification shall include information on the regions                        targeted, the selected types of farming or sectors, and the level of support to be granted.                  

2.The decisions referred to in Article 53(2) and (4), or, where appropriate, in point (a) of Article 53(6), shall include a                        detailed description of the particular situation in the region targeted and of the particular characteristics of the types                        of farming or specific agricultural sectors, which make the percentage referred to in Article 53(1) insufficient to address                        the difficulties referred to in Article 52(3) and which justify an increased level of support.                  

#### Article 55U.K.Approval by the Commission

1.The Commission shall adopt implementing acts, without applying the procedure referred to in Article 71(2) or (3), approving                        the decision referred to in Article 53(4), or, where appropriate, in point (a) of Article 53(6), where one of the following                        needs in the sector or region concerned is demonstrated:                  

(a)the need to sustain a certain level of specific production due to the lack of alternatives, and to reduce the risk of production                        abandonment with the resulting social and/or environmental problems;                  

(b)the need to provide stable supply to the local processing industry, thereby avoiding the negative social and economic consequence                        of any ensuing restructuring;                  

(c)the need to compensate disadvantages affecting farmers in a particular sector which are the consequence of continuing disturbances                        on the related market;                  

(d)the need to intervene where the existence of any other support available under this Regulation, Regulation (EU) No 1305/2013                        or any approved State aid scheme is deemed to be insufficient to meet the needs referred to in points (a), (b) and (c) of                        this paragraph.                  

2.The Commission shall adopt implementing acts laying down rules on the procedure for the assessment and approval of the decisions                        referred to in paragraph 1 of this Article. Those implementing acts shall be adopted in accordance with the examination procedure                        referred to in Article 71(2).                  

### *CHAPTER 2*U.K.***Crop-specific payment for cotton***

#### Article 56U.K.Scope

Aid shall be granted to farmers producing cotton falling within CN code 5201 00 under the conditions laid down in this Chapter                     ("crop-specific payment for cotton").                  

#### Article 57U.K.Eligibility

1.The crop-specific payment for cotton shall be granted per hectare of eligible area of cotton. The area shall be eligible only                        if it is located on agricultural land authorised by the Member State for cotton production, sown with varieties authorised                        by the Member State and actually harvested under normal growing conditions.                  

The crop-specific payment for cotton shall be paid for cotton of sound, fair and marketable quality.

2.Member States shall authorise the land and the varieties referred to in paragraph 1 in accordance with the rules and conditions                        to be adopted pursuant to paragraph 3.                  

3.In order to ensure an efficient management of the crop-specific payment for cotton, the Commission shall be empowered to adopt                        delegated acts in accordance with Article 70 concerning rules and conditions for the authorisation of land and varieties for                        the purposes of the crop-specific payment for cotton.                  

4.The Commission shall adopt implementing acts laying down rules on the procedure for the authorisation of land and varieties                        for the purposes of the crop-specific payment for cotton and on the notifications to the producers related to this authorisation.                        Those implementing acts shall be adopted in accordance with the examination procedure referred to in Article 71(2).                  

#### Article 58U.K.Base areas, fixed yields and reference amounts

1.The following national base areas are established:                  
          -  Bulgaria: 3 342 ha, 
          -  Greece: 250 000 ha, 
          -  Spain: 48 000 ha, 
          -  Portugal: 360 ha. 

2.The following fixed yields in the reference period are established:                  
          -  Bulgaria: 1,2 tonne/ha, 
          -  Greece: 3,2 tonne/ha, 
          -  Spain: 3,5 tonne/ha, 
          -  Portugal: 2,2 tonne/ha. 

3.The amount of the crop-specific payment per hectare of eligible area shall be calculated by multiplying the yields established                        in paragraph 2 with the following reference amounts:                  
          -  Bulgaria: EUR 584,88 in 2015; and EUR 649,45 for 2016 and onwards, 
          -  Greece: EUR 234,18, 
          -  Spain: EUR 362,15, 
          -  Portugal: EUR 228,00. 

4.If the eligible area of cotton in a given Member State and in a given year exceeds the base area established in paragraph                        1, the amount referred to in paragraph 3 for that Member State shall be reduced proportionately to the overrun of the base                        area.                  

5.In order to make it possible to apply the crop-specific payment for cotton, the Commission shall be empowered to adopt delegated                        acts in accordance with Article 70 concerning rules on the conditions for the granting of that payment, on the eligibility                        requirements and on agronomic practices.                  

6.The Commission may adopt implementing acts laying down rules on the calculation of the reduction provided for in paragraph                        4. Those implementing acts shall be adopted in accordance with the examination procedure referred to in Article 71(2).                  

#### Article 59U.K.Approved interbranch organisations

1.For the purpose of this Chapter, an 'approved interbranch organisation' means a legal entity made up of farmers producing                        cotton and at least one ginner, carrying out activities such as:                  

(a)helping to better coordinate the way cotton is placed on the market, particularly through research studies and market surveys;                  

(b)drawing up standard forms of contract compatible with Union rules;                  

(c)orienting production towards products that are better adapted to market needs and consumer demand, particularly in terms of                        quality and consumer protection;                  

(d)updating methods and means to improve product quality;                  

(e)developing marketing strategies to promote cotton via quality certification schemes.                  

2.The Member State where the ginners are established shall approve interbranch organisations that satisfy the criteria to be                        laid down pursuant to paragraph 3.                  

3.In order to ensure the efficient application of the crop-specific payment for cotton, the Commission shall be empowered to                        adopt delegated acts in accordance with Article 70 laying down:                  

(a)criteria for the approval of interbranch organisations;                  

(b)obligations for producers;                  

(c)rules governing the situation where the approved interbranch organisation does not satisfy the criteria referred to in point                        (a).                  

#### Article 60U.K.Granting of the payment

1.Farmers shall be granted the crop-specific payment for cotton per eligible hectare as established in Article 58.                  

2.In the case of farmers who are members of an approved interbranch organisation, the crop-specific payment for cotton per eligible                        hectare within the base area laid down in Article 58(1) shall be increased by an amount of EUR 2.                  

## TITLE VU.K.**SMALL FARMERS SCHEME**

### Article 61U.K.General rules

1.Member States may establish a scheme for small farmers in accordance with the conditions laid down in this Title ("small farmers                        scheme").                  

Farmers who, in 2015, hold owned or leased-in payment entitlements or, in Member States applying Article 36, claim for the                     single area payment scheme, and fulfil the minimum requirements provided for in Article 10(1) may opt to participate in the                     small farmers scheme.                  

2.Payments under the small farmers scheme shall replace the payments to be granted pursuant to Titles III and IV.                  

The first subparagraph shall not apply where a Member State opts for the payment method laid down in point (a) of the first                     subparagraph of Article 63(2). In that case, the payment shall be subject to the respective conditions laid down in Titles                     III and IV, without prejudice to paragraph 3 of this Article.                  

3.Farmers participating in the small farmers scheme shall be exempted from the agricultural practices provided for in Chapter                        3 of Title III.                  

4.No advantage provided for under this Title shall be granted in favour of farmers in respect of whom it is established that                        they artificially created, after 18 October 2011, the conditions to benefit from the small farmers scheme.                  

### Article 62U.K.Participation

1.Farmers wishing to participate in the small farmers scheme shall submit an application by a date to be fixed by Member States                        which shall not be later than 15 October 2015. The date fixed by Member States cannot, however, be earlier than the last day                        for submitting an application under the basic payment scheme or the single area payment scheme.                  

Farmers who have not applied to participate in the small farmers scheme on the date fixed by the Member State, who decide                     to withdraw from it after that date or who have been selected for support under point (c) of Article 19(1) of Regulation (EU)                     No 1305/2013 shall no longer be entitled to participate in that scheme.                  

2.By way of derogation from paragraph 1, Member States may provide that farmers whose amount of direct payments under Titles                        III and IV is lower than the maximum amount fixed by the Member State in accordance with Article 63 are to be included in                        the small farmers scheme automatically, unless they expressly withdraw from it by the date fixed by the Member State in accordance                        with paragraph 1 or in any subsequent year. Member States making use of this possibility shall inform the relevant farmers                        in due time about their right to withdraw from the scheme.                  

3.Each Member State shall ensure that an estimate of the amount of the payment referred to in Article 63 is made known to farmers                        in due time before the date for submitting applications or for withdrawal fixed by that Member State.                  

### Article 63U.K.Amount of the payment

1.Member States shall set the amount of the annual payment for each farmer participating in the small farmers scheme at one                        of the following levels:                  

(a)an amount not exceeding 25 % of the national average payment per beneficiary, which shall be established by the Member States                        on the basis of the national ceiling set out in Annex II for calendar year 2019 and the number of farmers who have declared                        eligible hectares, pursuant to Article 33(1) or Article 36(2), in 2015;                  

(b)an amount corresponding to the national average payment per hectare multiplied by a figure corresponding to a number of hectares                        not exceeding five, to be set by the Member States. The national average payment per hectare shall be established by the Member                        States on the basis of the national ceiling set out in Annex II for calendar year 2019 and the number of eligible hectares                        declared in accordance with Article 33(1) or Article 36(2) in 2015.                  

The amount referred to in points (a) or (b) of the first subparagraph shall not be lower than EUR 500 and shall not be higher                     than EUR 1 250.                  

Where the application of points (a) and (b) of the first subparagraph results in an amount lower than EUR 500 or higher than                     EUR 1 250, the amount shall be rounded up or down, respectively, to that minimum or maximum amount.                  

2.By way of derogation from paragraph 1, a Member State may decide to grant participating farmers:                  

(a)an amount equal to the total value of the payments to be allocated to the farmer each year under Titles III and IV; or                  

(b)an amount equal to the total value of the payments to be allocated to the farmer in 2015 under Titles III and IV, that the                        Member State may adjust in subsequent years to proportionately take into account the changes in the national ceiling set out                        in Annex II.                  

The amount referred to in point (a) or (b) of the first subparagraph shall not be higher than an amount fixed by that Member                     State which shall be between EUR 500 and EUR 1 250.                  

Where the application of point (a) or (b) of the first subparagraph results in an amount lower than EUR 500, the Member State                     concerned may decide to round up this amount to EUR 500.                  

3.By way of derogation from paragraphs 1 and 2, in Cyprus, Croatia, Malta and Slovenia, the amount referred to in those paragraphs                        may be set at a value lower than EUR 500, but not less than EUR 200 or, in the case of Malta, not less than EUR 50.                  

### Article 64U.K.Special conditions

1.During the participation in the small farmers scheme, farmers shall:                  

(a)keep at least a number of eligible hectares corresponding to the number of owned or leased-in payment entitlements held, or                        to the number of eligible hectares declared in 2015 in accordance with Article 36(2);                  

(b)fulfil the minimum requirement provided for in point (b) of Article 10(1).                  

2.Payment entitlements activated in 2015 pursuant to Articles 32 and 33 by a farmer participating in the small farmers scheme                        shall be considered to be activated entitlements for the duration of the farmer's participation in that scheme.                  

The owned or leased-in payment entitlements held by the farmer during the participation in that scheme shall not be considered                     to be unused payment entitlements which are to revert to the national reserve or regional reserves in accordance with point                     (b) of Article 31(1).                  

In Member States applying Article 36, the eligible hectares declared in 2015 in accordance with Article 36(2) by a farmer                     participating in the small farmers scheme shall be considered to be declared for the duration of the participation of the                     farmer in that scheme.                  

3.By way of derogation from Article 34, payment entitlements held by farmers participating in the small farmers scheme shall                        not be transferable, except in the case of inheritance or anticipated inheritance.                  

Farmers who, by way of inheritance or anticipated inheritance, receive payment entitlements from a farmer participating in                     the small farmers scheme shall be eligible to participate in that scheme provided that they meet the requirements to benefit                     from the basic payment scheme and that they inherit all the payment entitlements held by the farmer from whom they receive                     the payment entitlements.                  

4.Where a Member State opts for the payment method laid down in point (a) of the first subparagraph of Article 63(2) without                        applying the third subparagraph of Article 63(2), paragraphs 1 and 2 as well as the first subparagraph of paragraph 3 of this                        Article shall not apply.                  

5.In order to ensure legal certainty, the Commission shall be empowered to adopt delegated acts in accordance with Article 70                        setting out the conditions for participation in the scheme where the situation of the participating farmer has changed.                  

### Article 65U.K.Financial provisions

1.In order to finance the payment referred to in this Title, Member States shall deduct from the total amounts available for                        the respective payments the amounts to which the small farmers would be entitled:                  

(a)under the basic payment scheme or the single area payment scheme referred to in Chapter 1 of Title III;                  

(b)as a redistributive payment referred to in Chapter 2 of Title III;                  

(c)as a payment for agricultural practices beneficial for the climate and the environment referred to in Chapter 3 of Title III;                  

(d)as a payment for areas with natural constraints referred to in Chapter 4 of Title III;                  

(e)as a payment for young farmers referred to in Chapter 5 of Title III; and                  

(f)as coupled support referred to in Title IV.                  

In the case of Member States having opted to calculate the amount of the payment pursuant to point (a) of the first subparagraph                     of Article 63(2), where the sum of those amounts for an individual farmer exceeds the maximum amount that they have fixed,                     each amount shall be proportionately reduced.                  

2.The difference between the sum of all payments due under the small farmers scheme and the total amount financed in accordance                        with paragraph 1 shall be financed in one or more of the following ways:                  

(a)by applying Article 30(7) in the relevant year;                  

(b)by using the funds for financing the payment for young farmers laid down in Chapter 5 of Title III which are left unused in                        the relevant year;                  

(c)by applying a linear reduction to all payments to be granted in accordance with Articles 32 or 36.                  

3.Except where a Member State has opted to set the amount of the annual payment pursuant to point (a) of the first subparagraph                        of Article 63(2), the elements on the basis of which the amounts referred to in paragraph 1 of this Article are established                        shall remain the same for the entire duration of the participation of the farmer in the small farmers scheme.                  

4.If the total amount of payments due under the small farmers scheme exceeds 10 % of the annual national ceiling set out in                        Annex II, Member States shall apply a linear reduction to the amounts to be paid in accordance with this Title in order to                        respect that percentage, unless they have set the amount of the payment in accordance with point (a) of the first subparagraph                        of Article 63(2) without applying the third subparagraph of Article 63(2).                  

The same exception applies for Member States which have set the amount of the payment in accordance with point (b) of the                     first subparagraph of Article 63(2) without applying the third subparagraph of Article 63(2), whose national ceiling set out                     in Annex II for year 2019 is higher than for year 2015 and which apply the calculation method set out in Article 25(1) or                     in Article 36(2).                  

## TITLE VIU.K.**NATIONAL RESTRUCTURING PROGRAMMES FOR THE COTTON SECTOR**

### Article 66U.K.Use of the annual budget for the restructuring programmes

1.For Member States which have applied the first subparagraph of Article 4(1) of Regulation (EC) No 637/2008, the relevant annual                        budget available pursuant to Article 5(1) of that Regulation shall be transferred with effect from 1 January 2014 and shall                        constitute additional Union funds for measures under rural development programming financed under Regulation (EU) No 1305/2013.                  

2.For Member States which have applied the second subparagraph of Article 4(1) of Regulation (EC) No 637/2008, the relevant                        annual budget available pursuant to Article 5(1) of that Regulation shall be included with effect from 1 January 2017 in their                        national ceilings as set out in Annex II to this Regulation.                  

## TITLE VIIU.K.**FINAL PROVISIONS**

### *CHAPTER 1*U.K.***Notifications and emergency***

#### Article 67U.K.Notification requirements

1.In order to ensure the correct application of the rules set out in this Regulation, the Commission shall be empowered to adopt                        delegated acts in accordance with Article 70 on the necessary measures regarding notifications to be made by Member States                        to the Commission for the purposes of this Regulation, for the purpose of checking, controlling, monitoring, evaluating and                        auditing direct payments or for the purpose of complying with requirements laid down in international agreements which have                        been concluded by a Council decision, including notification requirements under those agreements. In so doing, the Commission                        shall take into account the data needs and synergies between potential data sources.                  

Where appropriate, the information obtained may be transmitted or be made available to international organisations and the                     competent authorities of third countries and may be made public, subject to the protection of personal data and the legitimate                     interest of undertakings in the protection of their business secrets.                  

2.In order to make notifications referred to in paragraph 1 fast, efficient, accurate and cost-effective, the Commission shall                        be empowered to adopt delegated acts in accordance with Article 70 laying down further rules on:                  

(a)the nature and type of the information to be notified;                  

(b)the categories of data to be processed and maximum retention periods;                  

(c)access rights to the information or information systems made available;                  

(d)the conditions of publication of the information.                  

3.The Commission shall adopt implementing acts laying down:                  

(a)the methods of notification;                  

(b)rules on providing the information necessary for the application of this Article;                  

(c)arrangements for the management of the information to be notified, as well as rules on content, form, timing, frequency and                        deadlines of the notifications;                  

(d)arrangements for transmitting, or making information and documents available, to the Member States, international organisations,                        the competent authorities in third countries, or the public, subject to the protection of personal data and the legitimate                        interest of farmers and undertakings in the protection of their business secrets.                  

Those implementing acts shall be adopted in accordance with the examination procedure referred to in Article 71(2).

#### Article 68U.K.Processing and protection of personal data

1.Member States and the Commission shall collect personal data for the purposes set out in Article 67(1). They shall not process                        this data in a way that is incompatible with those purposes.                  

2.Where personal data are processed for monitoring and evaluation purposes as referred to in Article 67(1), they shall be made                        anonymous and processed in aggregated form only.                  

3.Personal data shall be processed in accordance with Directive 95/46/EC and Regulation (EC) No 45/2001. In particular, such                        data shall not be stored in a form which permits identification of data subjects for longer than is necessary for the purposes                        for which they were collected or for which they are further processed, taking into account the minimum retention periods laid                        down in the applicable national and Union law.                  

4.Member States shall inform the data subjects that their personal data may be processed by national and Union bodies in accordance                        with paragraph 1, and that in this respect they enjoy the rights set out in Directive 95/46/EC and Regulation (EC) No 45/2001,                        respectively.                  

5.This Article shall be subject to Articles 111 to 114 of Regulation (EU) No 1306/2013.                  

#### Article 69U.K.Measures to resolve specific problems

1.In order to resolve specific problems, the Commission shall adopt implementing acts which are both necessary and justifiable                        in an emergency. Such implementing acts may derogate from provisions of this Regulation, to the extent and for such a period                        as is strictly necessary. Those implementing acts shall be adopted in accordance with the examination procedure referred to                        in Article 71(2).                  

2.Where duly justified imperative grounds of urgency so require, and in order to resolve such specific problems while ensuring                        the continuity of the direct payments system in the case of extraordinary circumstances, the Commission shall adopt immediately                        applicable implementing acts in accordance with the procedure referred to in Article 71(3).                  

3.Measures adopted under paragraph 1 or 2 shall remain in force for a period not exceeding twelve months. If after this period                        the specific problems referred to in those paragraphs persist, the Commission may, in order to establish a permanent solution,                        submit an appropriate legislative proposal.                  

4.The Commission shall inform the European Parliament and the Council of any measure adopted under paragraph 1 or 2 within two                        working days of its adoption.                  

### *CHAPTER 2*U.K.***Delegations of powers and implementing provisions***

#### Article 70U.K.Exercise of the delegation

1.The power to adopt the delegated acts is conferred on the Commission subject to the conditions laid down in this Article.                  

2.The power to adopt delegated acts referred to in Article 2, Article 4(3), Article 6(3), Article 7(3), Article 8(3), Article                        9(5), Article 20(6), Article 35, Article 36(6), Article 39(3), Article 43(12), Article 44(5), Article 45(5) and (6), Article                        46(9), Article 50(11), Article 52(9), Article 57(3), Article 58(5), Article 59(3), Article 64(5), Article 67(1) and (2) and                        Article 73 shall be conferred on the Commission for a period of seven years from 1 January 2014. The Commission shall draw                        up a report in respect of the delegation of power not later than nine months before the end of the seven-year period. The                        delegation of power shall be tacitly extended for periods of an identical duration, unless the European Parliament or the                        Council opposes such extension not later than three months before the end of each period.                  

3.The delegation of power referred to in Article 2, Article 4(3), Article 6(3), Article 7(3), Article 8(3), Article 9(5), Article                        20(6), Article 35, Article 36(6), Article 39(3), Article 43(12), Article 44(5), Article 45(5) and (6), Article 46(9), Article                        50(11), Article 52(9), Article 57(3), Article 58(5), Article 59(3), Article 64(5), Article 67(1) and (2) and Article 73 may                        be revoked at any time by the European Parliament or by the Council. A decision to revoke shall put an end to the delegation                        of the power specified in that decision. It shall take effect the day following the publication of the decision in the *Official Journal of the European Union* or at a later date specified therein. It shall not affect the validity of any delegated acts already in force.                  

4.As soon as it adopts a delegated act, the Commission shall notify it simultaneously to the European Parliament and to the                        Council.                  

5.A delegated act adopted pursuant to Article 2, Article 4(3), Article 6(3), Article 7(3), Article 8(3), Article 9(5), Article                        20(6), Article 35, Article 36(6), Article 39(3), Article 43(12), Article 44(5), Article 45(5) and (6), Article 46(9), Article                        50(11), Article 52(9), Article 57(3), Article 58(5), Article 59(3), Article 64(5), Article 67(1) and (2) and Article 73 shall                        enter into force only if no objection has been expressed either by the European Parliament or the Council within a period                        of two months of notification of that act to the European Parliament and the Council or if, before the expiry of that period,                        the European Parliament and the Council have both informed the Commission that they will not object. That period shall be                        extended by two months at the initiative of the European Parliament or of the Council.                  

#### Article 71U.K.Committee procedure

1.The Commission shall be assisted by a Committee called the "Committee for Direct Payments". That Committee shall be a committee                        within the meaning of Regulation (EU) No 182/2011.                  

2.Where reference is made to this paragraph, Article 5 of Regulation (EU) No 182/2011 shall apply.                  

In the case of acts referred to in Article 24(11), Article 31(2) and Article 67(3), where the committee delivers no opinion,                     the Commission shall not adopt the draft implementing act and the third subparagraph of Article 5(4) of Regulation (EU) No 182/2011                     shall apply.                  

3.Where reference is made to this paragraph, Article 8 of Regulation (EU) No 182/2011, in conjunction with Article 5 thereof,                        shall apply.                  

### *CHAPTER 3*U.K.***Transitional and final provisions***

#### Article 72U.K.Repeals

1.Regulation (EC) No 637/2008 is repealed with effect from 1 January 2014.                  

However, it shall continue to apply until 31 December 2017 in respect of Member States which have exercised the option laid                     down in the second subparagraph of Article 4(1) of that Regulation.                  

2.Regulation (EC) No 73/2009 is repealed.                  

Without prejudice to paragraph 3, references to the repealed Regulation shall be construed as references to this Regulation                     or Regulation (EU) No 1306/2013 and shall be read in accordance with the correlation table set out in Annex XI to this Regulation.                  

3.The references made in this Regulation to Regulations (EC) No 73/2009 and (EC) No 1782/2003 shall be understood as being made                        to those Regulations such as they were in force before their repeal.                  

#### Article 73U.K.Transitional rules

In order to ensure a smooth transition from the arrangements provided for in Regulation (EC) No 73/2009 to those laid down                     in this Regulation, the Commission shall be empowered to adopt delegated acts in accordance with Article 70 concerning the                     necessary measures to protect any acquired rights and legitimate expectations of farmers.                  

#### Article 74U.K.Entry into force and application

This Regulation shall enter into force on the day of its publication in the *Official Journal of the European Union.*                   

It shall apply from 1 January 2015.

However, Article 8, Article 9(6), Article 11(6), Article 14, Article 16, Article 21(2) and (3), Article 22(2), the first subparagraph                     of Article 23(1), Article 23(6), Article 24(10), Article 29, the first subparagraph of Article 36(1), Article 41(1), Article                     42(1), Article 43(8) and (13), the fifth subparagraph of Article 45(2), Article 46(2) and (8), Article 49(1), Article 51(1),                     Article 53, Article 54, Article 66(1), Articles 67 and 70 and Article 72(1) shall apply from the date of entry into force                     of this Regulation.                  

This Regulation shall be binding in its entirety and directly applicable in all Member States.

Done at Brussels, 17 December 2013.

*For the European Parliament*                            

*The President*                            

M. Schulz                            

*For the Council*                            

*The President*                            

V. Jukna                            

## ANNEX IU.K.

### **List of support schemes**

## ANNEX IIU.K.

### **National ceilings referred to in Article 6**

## ANNEX IIIU.K.

### **Net ceilings referred to in Article 7**

## ANNEX IVU.K.

### **Limits for the adjustment for the thresholds, referred to in Article 10(2)**

## ANNEX VU.K.**Financial provisions applying to Bulgaria and Romania referred to in Articles 10, 16 and 18**

### A.Amounts for applying point (a) of Article 10(1) and for calculating the national ceilings for payments referred to in Article                        16 in 2015:U.K.

:

EUR 790 909 000

:

EUR 1 783 426 000

### B.Total amount of complementary national direct payments to the basic payment scheme referred to in Article 18(1) in 2015:U.K.

:

EUR 69 657 000

:

EUR 153 536 000

### C.Total amount of complementary national direct payments to the crop-specific payment for cotton referred to in Article 18(2)                        in 2015:U.K.

:

EUR 258 952

## ANNEX VIU.K.**Financial provisions applying to Croatia referred to in Articles 10 and 19**

### A.Amount for applying point (a) of Article 10(1):U.K.

EUR 373 000 000

### B.Total amounts of complementary national direct payments referred to in Article 19(3):U.K.

## ANNEX VIIU.K.

### **Maximum amounts to be added to the amounts set out in Annex II in accordance with Article 20(2)**

## ANNEX VIIIU.K.

### **Average size of agricultural holding referred to in Article 41(4)**

## ANNEX IXU.K.**List of equivalent practices referred to in Article 43(3)**

Practices equivalent to crop diversification:

Crop diversification

Requirement: at least three crops, the main crop covering a maximum of 75 %, and any one or more of the following applying:
                      -  there are at least four crops, 
                      -  lower maximum thresholds apply, 
                      -  there is a more appropriate selection of crops, such as, for example, leguminous, protein crops, crops not requiring irrigation                                             or pesticide treatments, as appropriate,                                           
                      -  regional varieties of old, traditional or endangered crop types are included on at least 5 % of the rotated area. 

Crop rotation

Requirement: at least three crops, the main crop covering a maximum of 75 %, and any one or both of the following applying:
                      -  a more environmentally beneficial multiannual sequence of crops and/or fallow is followed, 
                      -  there are at least four crops. 

Winter soil cover(23)                                     

Catch crops(23)                                     

Practices equivalent to maintenance of permanent grassland:

Management of meadows or pastures

Requirement: maintenance of permanent grassland and any one or more of the following:
                      -  Cutting regime or appropriate mowing (dates, methods, limits) 
                      -  Maintenance of landscape features on permanent grassland and control of scrub 
                      -  Specified grass varieties and/or seeding regime for renewal depending on the grassland type, with no destruction of high nature                                             value                                           
                      -  Evacuation of forage or hay 
                      -  Appropriate management for steep slopes 
                      -  Fertiliser regime 
                      -  Pesticide restrictions 

Extensive grazing systems

Requirement: maintenance of permanent grassland and any one or more of the following:
                      -  Extensive grazing (timing, maximum stocking density) 
                      -  Shepherding or mountain pastoralism 
                      -  Using local or traditional breeds for grazing the permanent grassland 

Practices equivalent with ecological focus area:

Requirement: application of any of the following practices on at least the percentage of the arable land set pursuant to Article                              46(1):                           

Ecological set-aside

Creation of "buffer zones" for high nature value areas, Natura 2000 or other biodiversity protection sites, including along                                       hedgerows and water courses                                    

Management of uncultivated buffer strips and field margins (cutting regime, local or specified grass varieties and/or seeding                                       regime, re-seeding with regional varieties, no use of pesticides, no disposal of manure and/or mineral fertilisers, no irrigation,                                       no soil sealing)                                    

Borders, in-field strips and patches managed for wildlife or specific fauna (herbaceous border, protection of nests, wildflower                                       strips, local seed mix, unharvested crops)                                    

Management (pruning, trimming, dates, methods, restoration) of landscape features (trees, hedgerows, riparian woody vegetation,                                       stone walls (terraces), ditches, ponds)                                    

Keeping arable peaty or wet soils under grass (with no use of fertilisers and no use of plant protection products)

Production on arable land with no use of fertiliser (mineral fertiliser and manure) and/or plant protection products, and                                       not irrigated, not sown with the same crop two years in a row and on a fixed place(23)                                     

Conversion of arable land into permanent grassland extensively used

## ANNEX XU.K.

### **Conversion and weighting factors referred to in Article 46(3)**

## ANNEX XIU.K.

### **Correlation table**

referred to in Article 72(2)

1

Opinion of 8 March 2012 (not yet published in the Official Journal).

2

OJ C 191, 29.6.2012, p. 116 and OJ C 44, 15.2.2013, p. 159.                           

3

OJ C 225, 27.7.2012, p. 174.                           

4

Position of the European Parliament of 20 November 2013 (not yet published in the Official Journal).

5

Council Regulation (EC) No 73/2009 of 19 January 2009 establishing common rules for direct support schemes for farmers under                              the common agricultural policy and establishing certain support schemes for farmers, amending Regulations (EC) No 1290/2005,                              (EC) No 247/2006, (EC) No 378/2007 and repealing Regulation (EC) No 1782/2003 (OJ L 30, 31.1.2009, p. 16).                           

6

Regulation (EU) No 1306/2013 of the European Parliament and of Council of 17 december 2013 on the financing, management and                              monitoring of the common agricultural policy and repealing Council Regulations (EEC) No 352/78, (EC) No 165/94, (EC) No 2799/98,                              (EC) No 814/2000, (EC) No 1290/2005 and (EC) No 485/2008 (See page 549 of this Official Journal).                           

7

Regulation (EU) No 228/2013 of the European Parliament and of the Council of 13 March 2013 laying down specific measures for                              agriculture in the outermost regions of the Union and repealing Council Regulation (EC) No 247/2006 (OJ L 78, 20.3.2013, p. 23).                           

8

Regulation (EU) No 229/2013 of the European Parliament and of the Council of 13 March 2013 laying down specific measures for                              agriculture in favour of the smaller Aegean islands and repealing Council Regulation (EC) No 1405/2006 (OJ L 78, 20.3.2013, p. 41).                           

9

Regulation (EU) No 182/2011 of the European Parliament and of the Council of 16 February 2011 laying down the rules and general                              principles concerning mechanisms for control by Member States of the Commission's exercise of implementing powers (OJ L 55, 28.2.2011, p. 13).                           

10

Council Regulation (EC) No 1782/2003 of 29 September 2003 establishing common rules for direct support schemes under the common                              agricultural policy and establishing certain support schemes for farmers and amending Regulations (EEC) No 2019/93, (EC) No 1452/2001,                              (EC) No 1453/2001, (EC) No 1454/2001, (EC) 1868/94, (EC) No 1251/1999, (EC) No 1254/1999, (EC) No 1673/2000, (EEC) No 2358/71                              and (EC) No 2529/2001 (OJ L 270, 21.10.2003, p. 1).                           

11

Council Regulation (EC) No 1698/2005 of 20 September 2005 on support for rural development by the European Agricultural Fund                              for Rural Development (EAFRD) (OJ L 277, 21.10.2005, p. 1).                           

12

Regulation (EU) No 1305/2013 of the European Parliament and of the Council of 17 december 2013 on support for rural development                              by the European Agricultural Fund for Rural Development (EAFRD) and repealing Council Regulation (EC) No 1698/2005 (See page                              487 of this Official Journal).                           

13

Council Directive 92/43/EEC of 21 May 1992 on the conservation of natural habitats and of wild fauna and flora (OJ L 206, 22.7.1992, p. 7).                           

14

Directive 2009/147/EC of the European Parliament and of the Council of 30 November 2009 on the conservation of wild birds                              (OJ L 20, 26.1.2010, p. 7).                           

15

Directive 2000/60/EC of the European Parliament and of the Council of 23 October 2000 establishing a framework for Community                              action in the field of water policy (OJ L 327, 22.12.2000, p. 1).                           

16

Council Regulation (EC) No 834/2007 of 28 June 2007 on organic production and labelling of organic products and repealing                              Regulation (EEC) No 2092/91 (OJ L 189, 20.7.2007, p. 1).                           

17

Council Regulation (EC) No 637/2008 of 23 June 2008 amending Regulation (EC) No 1782/2003 and establishing national restructuring                              programmes for the cotton sector (OJ L 178, 5.7.2008, p. 1).                           

18

Directive 95/46/EC of the European Parliament and of the Council of 24 October 1995 on the protection of individuals with                              regard to the processing of personal data and on the free movement of such data (OJ L 281, 23.11.1995, p. 31).                           

19

Regulation (EC) No 45/2001 of the European Parliament and of the Council of 18 December 2000 on the protection of individuals                              with regard to the processing of personal data by the Community institutions and bodies and on the free movement of such data                              (OJ L 8, 12.1.2001, p. 1).                           

20

OJ C 35, 9.2.2012, p. 1.                           

21

Regulation (EU) No 1308/2013 of the European Parliament and of the Council of 17 december 2013 establishing a common organisation                              of the markets in agricultural products and repealing Council Regulations (EEC) No 922/72, (EEC) No 234/79, (EC) No 1601/96,                              (EC) No 1037/2001 and (EC) No 1234/2007 (See page 671 of this Official Journal).                           

22

Commission Regulation (EC) No 1122/2009 of 30 November 2009 laying down detailed rules for the implementation of Council Regulation                              (EC) No 73/2009 as regards cross-compliance, modulation and the integrated administration and control system, under the direct                              support schemes for farmers provided for that Regulation, as well as for the implementation of Council Regulation (EC) No 1234/2007                              as regards cross-compliance under the support scheme provided for the wine sector (OJ L 316, 2.12.2009, p. 65).                           

23

Practices subject to the calculation referred to in point (c) of Article 43(12)