03/04/06 - Calculating your 2005 Single Payment Scheme entitlements
This is a step-by-step guide that will allow you to check the calculation of the Single Payment Scheme (SPS) entitlements that you have been allocated by the RPA in 2005. A detailed explanation of the five steps is given below. For ease of reference the calculation is also set out in abbreviated form in Appendix 2.
STEP 1: Information
To calculate your entitlements you will need:
• A copy of the RPA’s reference amount calculator, available on the RPA’s web site in either electronic or paper format.
• Your most recent Information Statement (SP1 or SP1a);
• Your seeds letter (if applicable);
• Details of any net milk quota held at the end of the 2004/05 quota year (if applicable);
• Your Slaughter Premium (OTM) 2000 letter (if applicable);
• Details of any hardship adjustment that we have agreed with you and any relevant private contact agreements that you notified on your 2005 SPS application and which have been confirmed by the RPA;
• Details of any national reserve award that you have received; and
• The entitlements statement that you have received from the RPA, either definitive or un-validated.
STEP 2: Calculating the historical element of your entitlement value:
• Use the RPA reference amount calculator to work out the value of your reference amount in euros, adjusting the reference periods for any schemes that the RPA has agreed should benefit from the SPS hardship provisions and taking account of any successful private contract transfers that you have entered into using the information listed above.
• Multiply your reference amount by 0.8578711 to allow for deductions that have been made to finance the flat rate payment, the national reserve and hardship adjustments. (The size of the total English budget for the SPS, around £1.6 billion, makes it necessary for us to calculate this factor to so many decimal places.) If you wish to understand how the figure of 0.8578711 has been arrived at, this is explained in the Appendix 1 attached to this document.
STEP 3: Allowing for any national reserve award
• Take any national reserve top-up that you have been awarded and multiply this figure by 0.988 to arrive at the net contribution of the national reserve to the value of your entitlements. (Again, the reason for deduction of this factor is explained in Appendix 1.)
STEP 4: Calculating the historical contribution to the unit value of your
Entitlements.
• Take the combined totals from steps 2 and 3 above and divide this figure by the number of normal or national reserve entitlements that you have been allocated. (Do not include the number of set-aside entitlements that you have received; these receive only the flat rate payment.) This will give you the amount of the historical compensation that has been incorporated into the value of each entitlement that you been allocated.
STEP 5: Including the flat rate
• Take the figure from Step 4 and add to it the 2005 flat rate payment per ha for the relevant English Area:
o 28.2 euros per ha for non-SDA)
o 23.59 euros per ha for SDA non-moorland
o 3.36 euros per ha for SDA moorland
This should give you the unit value of your normal or national reserve entitlements, as shown in the fifth column of your entitlements statement.
Note – Deductions for EU and National Modulation will be applied and these will be shown on your payment statement.
Appendix 1
Calculating the scale-back factors to be applied to reference amounts and national reserve awards
The deductions that we are required to apply to each farmer’s historic reference amount are as follows:
o Scale-back to bring the total of allocated reference amounts back within the English financial ceiling after the application of hardship criteria: 0.17093269%
o Deduction to fund the flat rate payment in England: 10%
o Initial deduction to fund the national reserve: 3%
These deductions are all applied together and the total deduction of 13.17093269% is equivalent to a scale-back factor of 0.8682906731
However, because the English contribution to the total value of national reserve awards exceeded the initial 3% deduction and was finally set at 4.2%, an additional 1.2% deduction has had to be made from the value of English entitlements as initially calculated. This was applied by taking the initial scale-back factor of 0.8682906731 and multiplying it by 0.988 to give a final scale-back factor, after rounding, of 0.8578711.
Because the second national reserve deduction was made from entitlements after the value of national awards had already been incorporated into them, the second scale-back factor of 0.988 has also to be applied to national reserve awards as notified to individual applicants. (It is also applied to the flat rate element, but the figures quoted above already take account of this.)
Appendix 2
Outline calculation of entitlements
1. Work out your reference amount, taking account of hardship adjustments and private contract transfers.
2. Multiply your reference amount by 0.8578711 (or by 0.86 to get an approximate result).
3. Multiply any national reserve award by 0.988.
4. Add the totals from steps (2) and (3) above and divide the result by the number of normal or national reserve entitlements that you have been allocated.
5. Take the answer from (4 ) above and add the flat rate payment for the English Area in which your entitlements have been allocated. This will give you the unit value of your entitlements.
Page published: 5 January 2007