1. CAP conference – policy background presentation 17 April 2013

2. Contents Why have payment regions? What constitutes a payment region? Our aim for today Some key points to note How to interpret the results What will happen next? Conclusions

3. Why have payment regions? Move to area-based payments Pack Inquiry recommended against single area rate for Scotland Having payment regions allows for different area-based rates per region Also affects entitlement transferability

4. What constitutes a payment region? Objective and justifiable criteria Could be: – Geographic (Eg Highlands and Islands) – Administrative (Eg local authority) – Land quality (Eg LFA)

5. Examples of payment regions Germany – Laender (federal administrative regions) England – SDA moorland, other SDA and non- SDA (geographic/land quality) Sweden – historic land use and productivity (proxy for land quality)

6. Our aim for today Detailed modelling carried out for Pack Inquiry Need to update in light of emerging detail of new CAP Vast range of possible scenarios We want your help to identify which ones to shortlist for more detailed modelling and subsequent consultation Opportunity to send in comments in next month or so

7. Some key points to note -1 This modelling is designed to hold everything unchanged except the payment regions Trade-off between realism vs ability to identify effects Today’s results do not predict what payments would actually be under the new CAP (that will come later) They do allow us to isolate the impact of the payment regions

8. Some key points to note - 2 These results represent the end-point: full convergence to a single rate per hectare for each payment region In other words these results show the end of any transitional period EU rules might provide for stopping short of full convergence – but that would mean retaining a historic-based element

9. Some key points to note - 3 Not just how to divide the country into payment regions – also how much of the budget to allocate to each payment region Budget scenarios: – ‘Status quo’ – Skewed towards better land or poorer land – ‘Olympic podium’ NB even ‘status quo’ averages payments over different quality land

10. How to interpret the one-page summaries

11. What will happen next? Presentations this morning Discussion sessions and feedback this afternoon Possible tentative conclusions at the end of today Opportunity to reflect, consult and email comments in next month Subsequent modelling adding in greening, voluntary coupled support etc, for consultation

12. Conclusions Task is to narrow down the options Results are designed to isolate the effect of payment regions, not predict actual payments Consider both the design of the payment regions and the budget allocations for each Thank you in advance for your comments, today and in the next month Mailbox address: CAPMovingforward@scotland.gsi.gov.uk CAPMovingforward@scotland.gsi.gov.uk