This note considers how much the UK contributes to the EU budget and how much it receives back. Potential payments to the EU on or after Brexit - such as the exit bill - are also discussed.
Documents to download
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Library Briefing: Basic Payment Scheme (169 KB, PDF)
- Farmers around the UK have recently received or are waiting to receive their direct subsidies as part of the EU Common Agricultural Policy (CAP) under the Basic Payment Scheme (BPS).
- The BPS has been introduced as part of the CAP reforms for 2014-2020. The BPS replaces the previous Single Farm Payment Scheme.
- A key new feature is that 30% of BPS payments are linked to mandatory greening requirements. These are agricultural practices intended to protect and enhance the environment.
- The BPS payment ‘window’ is now open and runs from 1 December 2015 to 30 June 2016.
- As a result of low milk prices and general difficulties for farmers, the EU Commission allowed Member States to start CAP payments from mid-October 2015 if they wanted to. This option was taken up in Ireland but not in the UK.
- CAP implementation is devolved and there are separate paying agencies across the UK. Farming unions across the UK are urging for all claims to be paid as soon as possible in light of the volatile conditions and low prices that many farmers have seen in 2015/16 which are causing cash flow problems.
- In England, the Rural Payments Agency (RPA) has paid over 70% of farmers, the Scottish Government’s payments directorate (SGRPID) has paid around 21%, Rural Payment Wales has paid 70% and the Department of Agriculture and Rural Development (DARD) has paid 95% of claims in Northern Ireland. However, Scotland and Wales are making split payments whilst full payments are being made in England and Northern Ireland.
- The RPA was also responsible for making the emergency payments to UK dairy farmers in November 2015 as part of the UK’s £26.2m direct aid package from the EU.
- Member States receive EU penalty fines for under or over payment of farmers and hence the payments agencies have to be careful that the payments are as accurate as possible.
- Although swift BPS payment is of current concern to farmers. There are a number of features of the BPS which are unpopular and are being addressed by an EU CAP simplification process which is being led as a priority by EU Agriculture Commissioner Phil Hogan. These include: the greening requirements relating to crop diversification (3 crop rule), inspections, penalties for non-compliance.
Documents to download
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Library Briefing: Basic Payment Scheme (169 KB, PDF)
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