3 Implementation of the Basic Payment Scheme
15.19 The secretary of state is constituted the competent authority in England of the purpose of sending application forms to farmers and for the determination of payment entitlements and appeals arising from them, and in Wales it is the devolved administration.51 The application of the principle of subsidiarity in the implementation of EU legislation52 means that the member states have been given some discretion as to how to apply a number of key aspects of the Basic Payment Scheme.
These include some aspects of the active farmer rule, the determination of the minimum size of the holding that can qualify for payments, discretion as to how to apply the degressivity policy and entitlement capping, the transfer of funds between Pillar I and Pillar I, a discretion to opt for regional implementation, the application of the greening component, and some of the cross compliance rules. The European Regulations are therefore supplemented by statutory instruments implementing the detailed rules in England Wales and Scotland, with some differentiation in the treatment of certain aspects between England and Wales.15.20 For the purpose of applying the scheme in England, a regional basis has been adopted for the calculation of payment entitlements. For these purposes England is divided into three regions: moorland, the severely disadvantaged area excluding moorland, and thirdly all other land (in practice this will be chiefly lowland).53 Within each region, entitlements were initially calculated as described above. In the case of England (but not Wales) the initial allocation was made on the basis of rolling forward the allocations made under the former Single Payment Scheme.54 Where entitlements have been transferred, the transferor must notify the secretary of state between 16 May and 15th May (inclusive) in the first year in which the transferee may include the entitlements in his/her claim for direct payments.55 Two payment rates apply for the basic payment: one for the moorland region, and a second rate for both the severely disadvantaged region and all other areas. Similar provision has been made for regional implementation in Wales, although the definition of the moorland region was expanded following a legal challenge so as to include land with the characteristics of moorland that falls below 400 metres in height.
15.21 The regression policy mandated by the 2013 Direct Payment Regulation is implemented by providing for the reduction of any basic payment to a farmer that exceeds 150,000 Euros; the excess over 150,000 Euros in any given calendar year will be reduced by 5%.56 The active farmer requirement must be complied with; however, the derogation to allow for small payments not exceeding 5000 Euros to be made has been adopted, and small payments of not more than this sum can be paid to claimants who are not active famers.57