Member States have the choice to maintain a limited link between subsidy and production to avoid abandonment of particular production.
Current payments to farmers continue to reflect historic patterns of production for different crops in countries where the scheme has yet to be introduced, or as a proportion of the total payment where the scheme is being introduced over a period of years.
The new scheme was intended to change the way the EU supported its farm sector by removing the link between subsidies and production of specific crops.
This reform focused on consumers and taxpayers, while giving farmers the freedom to produce what the market wanted.
The intention is that choice of crop is based purely on market driven forces and not on production based grants.
Decoupling of payments has allowed them to be categorised under the so-called blue box for the purpose of WTO negotiations, ensuring the legality and compliance of international obligations.
Transitional rules also apply for new member states which joined the EU in 2004 and more recently.
States have a choice of whether to introduce the new scheme at once, or to phase it in over a period from 2005–2013.All payments then have a further amounts taken off (EU modulation and national modulation) which are set at the European and national levels respectively.For EU modulation, the rates are 3% in 2005, 4% in 2006 and 5% from 2007 onwards.Farmers can submit a claim for each year based on their land and their entitlements. In order to gain these rights, farmers had to make a successful claim during the first year of SPS or purchase them from another farmer.In order for farmers to qualify for payments under the scheme, they have to follow certain conditions and rules; • their holdings must be at least 0.3 hectare (changed to minimum holding size 1.0 hectare and minimum land parcel size 0.1 hectare for claim year 2010 onward) and used for an agricultural activity; • they must meet Cross Compliance standards.The UK Government decided to be one of the first countries in Europe to introduce the Single Payment Scheme and decided to start to phase it in from 2005.