AGRICULTURE PART 1 Introduction Citation, commencement and extent 1 1 These Regulations may be cited as the Common Agricultural Policy Single Farm Payment and Support Schemes (Scotland) Regulations 2005 and shall come into force on 18th April 2005. 2 Subject to paragraph (3), these Regulations extend to Scotland only. 3 In so far as this paragraph, regulations 2, 16(3) and 27 of, and Schedule 5 to, these Regulations extend beyond Scotland, they do so only as a matter of Scots law. Interpretation 2 1 In these Regulations– “the Act of Accession ” means the Act concerning the conditions of accession of the Czech Republic, the Republic of Estonia, the Republic of Cyprus, the Republic of Latvia, the Republic of Lithuania, the Republic of Hungary, the Republic of Malta, the Republic of Poland, the Republic of Slovenia and the Slovak Republic and the adjustments to the Treaties on which the European Union is founded ; “the Cattle Tracing Regulations ” means– the Bovine Animals (Records, Identification and Movement) Order 1995 , the Cattle Identification Regulations 1998 , the Cattle Database Regulations 1998 , and the Cattle (Identification of Older Animals) (Scotland) Regulations 2001 ; “ Commission Regulation 795/2004 ” means Commission Regulation ( EC ) No. 795/2004 laying down detailed rules for the implementation of the single payment scheme provided for in Council Regulation (EC) No. 1782/2003 establishing common rules for direct support schemes under the common agricultural policy and establishing certain support schemes for farmers , as amended by Commission Regulation (EC) No 1974/2004 ; “ Commission Regulation 796/2004 ” means Commission Regulation (EC) No. 796/2004 laying down detailed rules for the implementation of cross-compliance, modulation and the integrated administration and control system provided for in Council Regulation 1782/2003 , as amended by Commission Regulation (EC) No. 239/2005 ; “ Commission Regulation 1973/2004 ” means Commission Regulation (EC) No. 1973/2004 laying down detailed rules for the application of Council Regulation (EC) No. 1782/2003 as regards the support schemes provided for in Titles IV and IVa of that Regulation and the use of land set aside for the production of raw materials ; “ Council Regulation 1257/1999 ” means Council Regulation (EC) No. 1257/1999 on support for rural development from the European Agricultural Guidance and Guarantee Fund , amended by Commission Regulation (EC) No. 1783/2003 , the Act of Accession , Council Regulation (EC) No. 567/2004 and Council Regulation (EC) No. 583/2004 ; “Council Regulation 1782/2003” means Council Regulation (EC) No. 1782/2003 establishing common rules for direct support under the common agricultural policy and establishing certain support schemes for farmers , as amended by Council Regulation (EC) No. 21/2004 , Council Regulation (EC) No. 583/2004 and Council Regulation (EC) No. 864/2004 ; “ Council Regulation 820/97 ” means Council Regulation (EC) No 820/97 establishing a system for the identification and registration of bovine animals and regarding the labelling of beef and beef products ; “ Council Regulation 1251/1999 ” means Council Regulation (EC) No. 1251/1999 establishing a support system for producers of certain arable crops, as amended ; “the Cross-Compliance Regulations ” means the Common Agricultural Policy Single Payment and Support Schemes (Cross-Compliance) (Scotland) Regulations 2004 ; “direct payment” has the meaning given to it in Article 2(d) of Council Regulation 1782/2003; “electronic communication” has the same meaning as in the Electronic Communications Act 2000 ; “farmer” has the meaning given to it in 2(a) of Council Regulation 1782/2003; “green cover” means a green cover established or, as the case may be, falling to be established in accordance with Schedule 1; “ IACS Regulations ” means the Common Agricultural Policy Single Payment and Support Schemes (Integrated Administration and Control System) Regulations 2005 ; “land set aside for non-food purposes” means land set aside pursuant to Article 55(b) of Council Regulation 1782/2003 under the conditions laid down in Chapter 16 of Commission Regulation 1973/2004 for the provision of materials for the manufacture within the European Community of products not primarily intended for human or animal consumption, and any reference to a farmer setting aside land for that purpose shall be construed accordingly; “land set aside from production” means land set aside pursuant to Article 54(3) of Council Regulation 1782/2003 (other than land set aside for non-food purposes), and any reference to a farmer setting aside land from production shall be construed accordingly; “organic waste” means waste material produced by or from animals or plants as a by product of agricultural production, including animal bedding; “ Regulation 1760/2000 ” means Regulation (EC) No. 1760/2000 of the European Parliament and of the Council establishing a system for the identification and registration of bovine animals and requiring the labelling of beef and beef products and repealing Council Regulation (EC) No. 820/97 ; “relevant competent authority” has the meaning given to it in regulation 5 of the IACS Regulations; “set aside period” means the period from 15th January to 31st August (inclusive) in any given year; “single application” has the meaning given to it in Article 2(11) of Commission Regulation 796/2004; “single farm payment scheme” means the single payment support scheme established under Title III of Council Regulation 1782/2003; and “watercourse” includes a canal and field ditch. 2 Except in Part 6 of, and Schedule 4 to, these Regulations, in these Regulations “holding” has the meaning given to it in Article 2(b) of Council Regulation 1782/2003. 3 Except in regulation 27, in these Regulations “farmer” has the meaning given to it in Article 2(a) of Council Regulation 1782/2003, “collector” has the meaning given by Article 144(b) of Commission Regulation 1973/2004, and “processor” has the same meaning as in that Regulation. 4 Expressions used in these Regulations which are not defined in these Regulations shall be construed in accordance with Council Regulation 1782/2003, Commission Regulation 795/2004, Commission Regulation 796/2004 and Commission Regulation 1973/2004. 5 Any reference in these Regulations to a Community instrument is a reference to that instrument as amended on the date these Regulations are made. 6 Any reference in these Regulations to anything done in writing or produced in written form includes a reference to an electronic communication which has been recorded and is consequently capable of being reproduced. PART 2 Single Farm Payment Scheme Regional application 3 Scotland shall be a region for the purposes of Article 58 of Council Regulation 1782/2003. Applications 4 1 The Scottish Ministers shall be the competent authority for the purposes of Article 34(1) of Council Regulation 1782/2003 (which requires the competent authority to send application forms to farmers). 2 The deadline for the purposes of Article 40(3) of Council Regulation 1782/2003 (which requires the member State to fix a deadline for farmers notifying a case of force majeure or exceptional circumstances) shall be that notification is made to the relevant competent authority responsible for determining the particular single application in question before 16th May 2005. 3 An application for a reference amount pursuant to Article 42 of Council Regulation 1782/2003 (which provides for the establishment of a national reserve) shall be made to the relevant competent authority responsible for determining the particular single application in question before 16th May in respect of the IACS year (within the meaning of the IACS Regulations) commencing on that date. Minimum size of holding 5 For the purposes of Article 12(6) of Commission Regulation 795/2004, the minimum size of a holding for which the establishment of payment entitlements may be requested shall be 0.3 hectare. 10 month period 6 For the purposes of Article 24(2) of Commission Regulation 795/2004, the period in which the beginning of the 10 month period referred to in Article 44(3) of Council Regulation 1782/2003 shall be fixed, shall be the period beginning on 1st October of the calendar year of the year preceding the year of lodging an application under the single farm payment scheme and ending on 30th April of the year of application. Dairy premium and additional payments 7 In accordance with Article 62 of Council Regulation 1782/2003 the amounts resulting from dairy premium and additional payments, provided for in Articles 95 and 96 of that Regulation, shall be included, in full, in the single farm payment scheme starting from 2005. Horticulture 8 1 Subject to paragraph (2), in accordance with Article 51(b) second paragraph of Council Regulation 1782/2003, secondary crops may be cultivated on the eligible hectares during a period of not more than 3 months beginning each year on 15th August. 2 Paragraph (1) shall not apply to the year beginning on 1st January 2005. Transfers 9 For the purposes of Article 25(3) of Commission Regulation 795/2004, a transferor of a payment entitlement shall communicate the transfer to the relevant competent authority responsible for determining the particular single application in question and shall do so– a no later than 6 weeks before the transfer is to take place; and b no later than 6 weeks before the last day for submission of the single application. PART 3 Modulation Additional modulation 10 1 For the purposes of calculating the total amount of direct payments to be paid to a farmer for any year, under Article 1 of Commission Regulation (EC) No 1655/2004 the Scottish Ministers shall deduct a sum equal to the specified proportion of the relevant amount and shall apply the sum so deducted by way of funds for one or more of the relevant purposes. 2 In this regulation– “the relevant amount” means the amount which would have been granted to the farmer in respect of the year concerned before the application of Article 10(1) of Council Regulation 1782/2003; “the relevant purposes” means the purposes of any payment made pursuant to any measure which implements any provisions of Articles 10 to 12 inclusive (early retirement), 13 to 21 inclusive (less-favoured areas and areas with environmental restrictions), Articles 21a to 21d inclusive (meeting standards), 22 to 24 (agri-environment and animal welfare), 24a to 24d inclusive (food quality) and 31 (afforestation) of Council Regulation 1257/1999; and “the specified proportion” means– in respect of 2005, 3.5%; and in respect of 2006, 4.5%. PART 4 Set-aside Minimum area and dimensions of set aside parcels 11 1 For the purposes of the second sentence of Article 54(4) of Council Regulation 1782/2003, land may be set aside from production if– a it is eligible for set aside entitlement pursuant to Article 54(2) of Council Regulation 1782/2003; or counted as eligible for set aside entitlement as a result of an application granted under regulation 13; b it is at least 6 metres wide at all points; c it is at least 0.05 hectares in size; and d it borders– i a hedgerow; ii a drystane or flagstone dyke or wall; iii woodland; iv a permanent watercourse feature of the land; v an area of land that has been notified under section 28(1)(b) of the Wildlife and Countryside Act 1981 or section 3(6) of the Nature Conservation (Scotland) Act 2004 as a site of special scientific interest; or vi an area of land under an agri environment agreement in connection with support paid under Chapter VI of Title II of Council Regulation 1257/1999. 2 For the purposes of paragraph (1)(d)(iv), the land can border the watercourse if separated from the watercourse by a fence, any wall, vegetation that has grown up from inside the watercourse, a bank or a belt of single trees. Additional standards of good agricultural and environmental condition in relation to set aside land 12 1 Subject to paragraphs (3) to (6), the standards of good agricultural and environmental condition referred to in Article 32(2) of Commission Regulation 795/2004 that apply in relation to land set aside from production are set out in Schedule 1. 2 Subject to paragraphs (3) to (6), the standards of good agricultural and environmental condition referred to in Article 32(2) of Commission Regulation 795/2004 that apply in relation to land set aside for non-food purposes are set out in Schedule 2. 3 The standards of good agricultural and environmental condition referred to in paragraphs (1) and (2) shall apply to land set aside from production and land set aside for non-food purposes respectively in addition to the standards of good agricultural and environment condition that apply to the land by virtue of regulation 4 of the Cross Compliance Regulations. 4 The provisions of paragraphs (1) and (2) shall not apply to land– a set aside or afforested pursuant to Articles 22 to 24 or 31 of Council Regulation 1257/1999; and b counting as set aside for the purposes of Article 54 of Council Regulation 1782/2003, to the extent that the requirements of Schedule 1 and 2 are incompatible with the environmental or afforestation requirements laid down pursuant to those Articles. 5 A farmer shall be exempt from any given requirement of Schedule 1 or 2 in relation to particular set aside land if, on an application being made to the Scottish Ministers regarding that requirement, the Scottish Ministers are satisfied that the farmer should be exempted from it– a to facilitate research into the effect of employing particular methods of managing set-aside land; b in the interests of environmental protection; c where the farmer is an educational establishment, to facilitate the fulfilment of its educational purpose; d because during the set-aside period– i by virtue of any power or authorisation conferred by or under any enactment, a pipeline, cable or pylon is being or will be laid through, or constructed on or across, the land, the laying or construction of which was not a proposal of which the farmer had been notified more than 5 months before the date on which the land was set aside; ii maintenance of a pipeline, cable or pylon which the farmer cannot reasonably prevent is being or will be carried out under statutory authority on the particular set-aside land; or iii an archaeological excavation is to be carried out on the land; e for reasons of human or animal health or safety; f because such exemption is necessary, either to enable a serious cause of harm to plant health, serious weed infestation or serious pest infestation to be treated or to permit measures to be taken to prevent the development of such a problem or infestation; or g in order to benefit a charity (as defined in section 96(1) of the Charities Act 1993 ) or a recognised body within the meaning of the Law Reform (Miscellaneous Provisions) (Scotland) Act 1990 . 6 The Scottish Ministers may specify that any exemption granted pursuant to paragraph (5) shall be effective only until a date, or the occurrence of a particular event, specified in that exemption. 7 For the purposes of this regulation, a “serious weed infestation” means an infestation with one or more of the injurious weeds listed in section 1(2) of the Weeds Act 1959 , Rhododendron ponticum , Japanese knotweed ( Reynoutria japonica ), giant hogweed ( Heracleum mantegazzianum ) or Himalayan balsam ( Impatiens glandulifera ). Exchange of eligible and ineligible land 13 1 In a situation specified in sub-paragraph (a), (b) or (c) of the first paragraph of Article 33 of Commission Regulation 795/2004, a farmer may apply to the Scottish Ministers for land not otherwise eligible for set-aside entitlement to be counted as eligible for set aside entitlement. 2 Subject to paragraph (3), the application shall be in such form as the Scottish Ministers may reasonably require, and, where the farmer intends to exchange the land in respect of which the application is made for other land which is eligible for set-aside entitlement, that application shall include particulars of that land, as well as the land in respect of which the application is made. 3 Where a farmer holds any of the land in respect of which such an application is made, or any land that the farmer intends to exchange for that land, as a tenant the farmer shall obtain the written consent of the landlord to the exchange, and the application shall include a declaration by the applicant that such consent has been obtained. 4 The Scottish Ministers may approve the application made under paragraph (1) if they are satisfied– a that the relevant sub-paragraph of the first paragraph of Article 33 of Commission Regulation 795/2004 specified in the farmer’s application applies in relation to the land in respect of which the application has been made; b where the application has been made on the basis of sub-paragraph (c) of the first paragraph of Article 33 of Commission Regulation, with the reasons given by the farmer for wanting to exchange ineligible land for eligible land on the holding; and c that– i where the land in respect of which the application is made is to be exchanged for other eligible land, the area of land in respect of which the application is made does not exceed the area of the land which is to be exchanged by more than 5%; or ii where there is to be no exchange of land, the approval of the application will not result in a significant increase in the total area of land eligible for set aside entitlements. 5 Where approval is given under paragraph (4) but any declaration included in, or information given by the farmer in connection with, the application was false in any material particular, the Scottish Ministers may revoke such approval. 6 In this regulation, “eligible for set-aside entitlement”, in relation to land, has the meaning given by the first paragraph of Article 54(2) of Council Regulation 1782/2003. Provisions relating to raw materials produced for non-food purposes 14 1 The Scottish Ministers are designated as the competent authority for the purposes of Chapter 16 of Commission Regulation 1973/2004 (use of land set aside for the production of raw materials for non-food purposes). 2 Raw materials to which Article 146(2)(b) of Commission Regulation 1973/2004 applies shall be weighed by an operator of public weighing equipment holding a certificate issued under section 18 of the Weights and Measures Act 1985 . 3 For the purposes of Article 146(4) of Commission Regulation 1973/2004, cereals and oilseeds to which that paragraph applies shall be denatured by dying them with a brightly coloured dye. 4 For the purposes of Article 157(1) of Commission Regulation 1973/2004, the last day on which a contract to which that paragraph applies may be deposited with the Scottish Ministers, which may be sent to such person as they may specify in writing, shall be by the last date for the submission of the single application in the year in which the relevant claim for the associated set-aside entitlement is made. 5 For the purposes of Article 157(3) of Commission Regulation 1973/2004, the last day on which a collector or first processor to whom that paragraph applies may provide the information to the Scottish Ministers, which may be sent to such person as they may specify in writing, specified in that paragraph shall be 31st January of the year following the year in which the relevant claim for the associated set-aside entitlement is made. 6 In this regulation– “the associated set-aside entitlement” means the set-aside entitlement which is being claimed on the land which has been set aside to produce the raw materials to which the contract referred to in paragraph (4), and the information referred to in paragraph (5), relates; and “first processor” has the meaning given by Article 144(c) of Commission Regulation 1973/2004. Keeping and retention of records by a collector and by a processor 15 1 This regulation applies where a farmer sets aside land for non-food purposes and in paragraphs (2) to (5) references to “raw materials” are to such materials produced on that land. 2 During any month when a collector purchases or sells any raw materials, that collector shall make a record of the quantity of all raw materials which that collector has purchased or sold during that month, and the names and addresses of the subsequent buyers or processors to whom those raw materials have been sold. 3 A collector shall retain the records referred to in paragraph (2) until the earlier of– a the end of the third calendar year following the year in which the collector delivers to a processor the raw materials to which those records relate; or b the seventh anniversary of the date of their creation. 4 On any day during which a processor purchases, processes, destroys, sells or otherwise disposes of any raw materials, or sells or otherwise disposes of any products obtained from the processing of such raw materials, the processor shall make a record showing– a the quantities of the different raw materials purchased for processing; b the quantity of the raw materials processed together with the quantity and type of end products, co-products and by-products obtained from the processing; c the wastage of the raw materials during the processing; d the quantity of the raw materials destroyed, if any, together with the reason for such destruction; e the quantity and type of products sold or otherwise disposed of and the price obtained; and f the names and addresses of any subsequent buyers or processors to whom such raw materials or products of processing are sold. 5 A processor shall retain the records referred to in paragraph (4) for 2 years from– a where the records relate to the purchasing, processing, wastage, destruction, sale or other disposal of the raw materials, the date on which the purchase, processing, wastage, destruction, sale or other disposal of the raw materials occurs, as the case may be; and b where the records relate to the sale or other disposal of products obtained from the processing of such raw materials, the date on which such products were sold or otherwise disposed of, as the case may be. PART 5 Support Schemes under Title IV of Council Regulation 1782/2003 Aid for energy crops 16 1 Regulations 17 and 18 apply where an applicant uses areas covered by the aid provided for in Article 88 of Council Regulation 1782/2003 for the growing of agricultural raw materials under Article 24 of Commission Regulation 1973/2004 and references to raw materials shall be construed accordingly. 2 Subject to paragraph (3), the Scottish Ministers are the competent authority for the purposes of Chapter 8 of Commission Regulation 1973/2004 (Aid for energy crops). 3 In the case of an applicant, the competent authority shall be the relevant competent authority responsible for determining the particular single application in question. 4 In this regulation, “applicant” has the meaning given to it in Article 23 of Commission Regulation 1973/2004. Provisions relating to raw material 17 1 In accordance with Article 43(2) of Commission Regulation 1973/2004, the minimum cultivated area for any raw material referred to in Article 24 of that Regulation shall be 0.1 hectare. 2 Where the Scottish Ministers exclude any agricultural raw material from aid for energy crops in accordance with Article 43(1) of Commission Regulation 1973/2004, they must notify the farmers concerned stating, with reasons, the details and duration of the exclusion. 3 Raw materials to which Article 25(2)(b) of Commission Regulation 1973/2004 applies shall be weighed by an operator of public weighing equipment holding a certificate issued under section 18 of the Weights and Measures Act 1985 . 4 For the purposes of Article 25(4) of Commission Regulation 1973/2004, cereals and oilseeds to which that paragraph applies shall be denatured by dying them with a brightly coloured dye. 5 For the purposes of Article 34(1) of Commission Regulation 1973/2004, the last day on which a contract to which that paragraph applies may be deposited with the Scottish Ministers, which may be sent to such person as they may specify in writing, shall be the last day for submission of the relevant single application. 6 For the purposes of Article 34(3) of Commission Regulation 1973/2004, the last day on which a first processor to whom that paragraph applies may provide the information specified in that paragraph to the Scottish Ministers, which may be sent to such person as they may specify in writing, shall be the 9th February of the year following the year in which the relevant single application is made. 7 In this regulation– “first processor” has the meaning given to it in Article 23 of Commission Regulation 1973/2004; and “relevant single application” means the single application in which aid for energy crops is being claimed on the areas used for the growing of agricultural raw materials to which the contract referred to in paragraph (5), or the information referred to in paragraph (6), relates (as the case may be). Keeping and retention of records 18 1 Pursuant to Article 39 of Commission Regulation 1973/2004 on any day during which a processor purchases, processes, destroys, sells or otherwise disposes of any raw materials the processor shall make a record showing– a the quantities of the different raw materials purchased for processing; b the quantities of raw materials processed together with the quantity and type of end products, co-products and by-products obtained from the processing; c the quantities of wastage of raw materials during the processing; d the quantities of raw materials destroyed, if any, together with the reason for such destruction; e the quantities and type of products sold or otherwise disposed of and the price obtained; and f the names and addresses of any subsequent buyers or processors to whom the processor sells such raw materials or products of processing. 2 A processor shall retain the records referred to in paragraph (1) for 4 years from– a where the records relate to the purchasing, processing, wastage, destruction, sale or other disposal of raw materials, the date on which the purchase, processing, waste, destruction, sale or other disposal of the raw materials occurs, as the case may be; and b where the records relate to the sale or other disposal of products obtained from the processing of such raw materials, the date on which such products were sold or otherwise disposed of, as the case may be. PART 6 The Scottish Beef Calf Scheme Interpretation of Part 6 19 In this Part of, and Schedule 4 to, these Regulations– “animal” means, in respect of a particular Scheme year, a bovine animal in respect of which an application for a Scheme payment has been or will be made; “applicant” means a farmer producing beef or veal at the time of lodging an application for a Scheme payment under regulation 20 whose IACS holding is wholly or partly in Scotland; “cattle passport” has the same meaning as in the Cattle Identification Regulations 1998 ; “eartag number” means the unique identification code for the purposes of Article 4(1) of Regulation 1760/2000 under Part II of the Cattle Identification Regulations 1998; “keeper’s holding” means a holding within the meaning of Regulation 1760/2000; “IACS holding” means a holding as defined in Article 2(b) of Council Regulation 1782/2003; “keeper” means any person responsible for an animal in respect of which an application for a Scheme payment is made or will be made, whether on a permanent or a temporary basis, including during transportation or at a market; “the Scheme” means the Scottish Beef Calf Scheme established by this Part of, and Schedule 4 to, these Regulations; “Scheme payment” means an additional payment under Article 69(2) of Council Regulation 1782/2003 in any Scheme year in accordance with the Scheme under this Part of, and Schedule 4 to, these Regulations; and “Scheme year” means the calendar year in which a particular application under regulation 20 for a Scheme payment is made. Applications for Scheme payments 20 1 An applicant is entitled to submit applications in respect of any number of animals claimed to be eligible under regulation 21 during a calendar year to the Scottish Ministers for a Scheme payment. 2 For the purpose of Article 69(2) of Council Regulation 1782/2003, the Scheme payment for a particular Scheme year shall be made in respect of the applications for Scheme payment received in that calendar year, and an application received after 31st December will count as an application for the following Scheme year. 3 An application must include the eartag number of any animal in respect of which the application is made in the form of– a a movement card from the animal’s cattle passport; b a signed and dated printout from farm software showing the eartag numbers in a barcode which is the same as that on the movement card from the animal’s cattle passport; or c a signed and dated written list of the eartag numbers of each animal. 4 The application must be in writing in such a form and containing such particulars as may be specified by the Scottish Ministers. 5 An application for a Scheme payment can be withdrawn in writing in respect of any animal included in that application unless the applicant or keeper has been notified by the Scottish Ministers of an inspection under the Cross Compliance Regulations, the Cattle Tracing Regulations or this Part of, or Schedule 4 to, these Regulations or of any errors in the application. 6 For the purposes of Article 11(1) of Commission Regulation 796/2004, applicants must have submitted a single application in accordance with the IACS Regulations in the year of the application for the Scheme payment. Eligible animals 21 1 Any application to the Scheme must be in respect of an animal which is eligible in terms of the requirements of paragraphs (2) to (7). 2 An eligible animal must be genetically at least 75% of a breed of cattle other than a breed listed in Schedule 3 to these Regulations. 3 An eligible animal must have been born on or after 2nd December 2004 on an applicant’s IACS holding. 4 An eligible animal must have been kept on that IACS holding of birth for a continuous period of 30 days. 5 An eligible animal must have been registered in accordance with Article 13 of the Cattle Identification Regulations 1998. 6 An eligible animal must be accurately recorded in the register of cattle on the keeper’s holding under regulation 29 of the Cattle Identification Regulations 1998. 7 The appropriate Minister within the meaning of the Cattle Database Regulations 1998 must have been informed about any movements of an eligible animal which the keeper is required to intimate to them under Articles 4 and 7 of those Regulations. Payments 22 1 Subject to regulation 23, the Scheme payment to be made in respect of each eligible animal shall be determined by the Scottish Ministers to be funded from any retention pursuant to Article 69(1) of Council Regulation 1782/2003 and Article 48(5) of Commission Regulation 795/2004 for that Scheme year on the basis of the number of eligible animals in respect of which a Scheme payment has been claimed in applications received for that Scheme year. 2 A higher payment may be determined by the Scottish Ministers to be made in respect of the first 10 eligible animals claimed by each applicant than for the remainder of the eligible animals claimed by that applicant. Scheme penalties 23 1 Subject to regulation 24, where, in respect of an application for a Scheme payment, a difference is found between the number of animals claimed as eligible by the applicant and the number of animals which are eligible in accordance with regulation 21 in any Scheme year, the total amount of the Scheme payment to which the applicant is entitled shall be reduced in accordance with this regulation. 2 Where paragraph (1) applies, a percentage shall be calculated from the number of animals claimed during the Scheme year concerned and found to be ineligible divided by the number animals determined to be eligible for the Scheme year concerned. 3 Where 3 or fewer claimed animals are found to be ineligible, the total amount of the Scheme payment to which the applicant is entitled for the Scheme year concerned shall be reduced by that percentage. 4 Where more than 3 animals are found to be ineligible, the total amount of the Scheme payment to which the applicant is entitled for the Scheme year concerned shall be– a reduced by the percentage established under paragraph (2), if it is not more than 10%; or b reduced by twice the percentage established under paragraph (2), if it is more than 10% but not more than 20% or c refused entirely, if the percentage established under paragraph (2) is more than 20%. 5 Where an applicant knowingly or recklessly makes a statement or furnishes any information in respect of an application which is false or misleading in a material particular– a the Scheme payment to which the applicant would have been entitled shall be refused for the Scheme year concerned; and b the applicant shall be excluded from receiving Scheme payments in respect of an additional amount of the same amount as the amount refused under sub paragraph (a), which amount shall be off-set (or the Scheme payment withheld if the amount cannot be fully off-set) in any Scheme year against Scheme payments to which the farmer would otherwise be entitled as a result of applications made in any Scheme year following the Scheme year concerned, until that amount is off-set. Exceptions from scheme penalties 24 1 Except in respect of ineligibility under regulation 21(7), the penalties applied under regulation 23 shall not apply– a where the applicant submitted factually correct information or can show otherwise that the applicant is not at fault; and b subject to paragraph (2), to the parts of an application for a Scheme payment in relation to which– i the applicant informs the Scottish Ministers in writing that the application for Scheme payment is incorrect or has become incorrect since it was submitted; or ii the keeper notifies the appropriate Minister within the meaning of the Cattle Database Regulations 1998 under regulation 4 or 7 of those Regulations, or either the applicant or keeper supply information to the Scottish Ministers or that appropriate Minister in writing about the animals or the IACS holding or keeper’s holding which are the subjects of that application which would have the effect described in paragraph (i). 2 An applicant cannot take advantage of paragraph (1)(b) if the Scottish Ministers or that appropriate Minister has already informed that applicant of– a that authority’s intention to inspect the applicant’s animals or IACS holding or keeper’s holding; or b the fact that an animal or the application is ineligible. 3 Where an applicant has informed the Scottish Minister or that appropriate Minister or supplied them with information under paragraph (1)(b), that applicant’s application shall be deemed to be adjusted so as to incorporate that information. Administration and enforcement of the Scottish Beef Calf Scheme 25 Schedule 4 to these Regulations, which provides for the administration and enforcement of the Scheme, shall have effect. PART 7 Amendments, Revocations and Savings Amendment of the Cross-Compliance Regulations 26 1 The Cross-Compliance Regulations are amended in accordance with paragraphs (2) to (4). 2 At the end of the definition of “authorised person” in regulation 2(1), add “, or under Article 32(2) of Commission Regulation (EC) No. 795/2004 as amended (which requires additional standards of good agricultural and environmental condition to be established as conditions for set-aside)”. 3 After regulation 4, insert– Permanent pasture 4A 1 If it is established that the ratio in Article 3(1) of the Commission Regulation is decreasing, the Scottish Ministers must prohibit a farmer from converting land under permanent pasture, in accordance with Article 4(1) of the Commission Regulation. 2 If it is established that the obligation in Article 3(2) of the Commission Regulation cannot be met, the Scottish Ministers must oblige a farmer to re-convert land to permanent pasture in accordance with Article 4(2) of the Commission Regulation. 3 In this regulation, “permanent pasture” has the meaning given to it in Article 2(2) of the Commission Regulation. . 4 In paragraph 1(2)(b) of the Schedule, for “indicate” substitute “allow”. Revocations and savings 27 1 Subject to the savings referred to in the remaining provisions of this regulation, the Regulations specified in column 1 of Schedule 5 to these Regulations are revoked to the extent specified in column 3 of that Schedule. 2 The Regulations revoked by paragraph (1) and Schedule 5 to these Regulations (other than those specified in paragraph (3)) shall continue to apply in respect of applications for direct payments in respect of calendar years preceding 2005. 3 The CAP Support Schemes (Modulation) (Scotland) Regulations 2000 , regulation 13(3) of the Abolition of the Intervention Board for Agricultural Produce (Consequential Provisions) (Scotland) Regulations 2001 and the CAP Support Schemes (Modulation) (Scotland) Amendment Regulations 2004 shall continue to apply to direct payments in respect of scheme years which began before 2005. 4 Regulation 12 of the Arable Area Payments Regulations 1996 (delivery notifications for non-food raw materials) shall continue to apply in respect of farmers, collectors and first processors who make the declaration or provide the information mentioned in that regulation (as the case may be) after the coming into force of these Regulations. 5 Paragraphs (1), (4) and (5) of regulation 14 of the Arable Area Payments Regulations 1996 (keeping and retention of records by a collector and a processor) shall continue to apply in respect of processors who purchased, after the coming into force of these Regulations, Annex I raw materials. 6 In this regulation “Annex I raw materials”, “farmer” and “processor” have the meanings given to them in the Arable Area Payments Regulations 1996. ROSS FINNIE A member of the Scottish Executive St Andrew’s House, Edinburgh 9th March 2005