Here are explanations for some of the many terms used in agricultural policy (particularly EU), crop markets and economics:

European Union (EU)

Member state

EU country. However, the UK is treated as a single country with England, Scotland, Wales and Northern Ireland considered by the EU to be regions of the same country.

European Council

National heads of states. Following the 2007 Lisbon Treaty the Council has a non-voting President who remains in office for 30 months.

Council (of Ministers)

Representatives of the national governments. Thus for agricultural decisions the UK would be represented by Owen Paterson. They are the main decision-making body.

European Parliament

The EU Parliament consists of the Members of the European Parliament (MEPs) voted in by the electorate of the EU countries on the basis of proportional representation. Each country has an agreed number of MEPs. MEPs are organised within the Parliament by political interest rather than national allegiance. In the past, they only had the power to agree or disagree with the Council’s decision but increasingly have the power of co-decision with the Council. The next election will be June 2014.

European Commission

The EU civil service although they can be granted limited power to modify legislation. Commissioners are arguably political appointments and are put forward by member states and approved by Parliament for a five year period. The Commission has a role to seek views from Council and MEPs so that they can initiate policy proposals to put to Council and Parliament. The agricultural Commissioner is Dacian Ciolos.


The Agriculture and Rural Development Committee of the EU Parliament.


The sitting of the full European Parliament


The member of a European Parliament committee who reports their findings to the Plenary.


The transfer of decisions or choice of options back to the individual EU countries.

Export restitutions

Subsidies to allow the export of goods outside of the EU where the internal price is higher than the traded price.

Multi-annual Financial Framework (MFF)

The EU budget agreed for a five year period. The current budget runs to 2020.

EFSA: European Food Standards Authority

The EU scientific body that gives judgements on food safety for issues such as pesticides and genetic modification. Judgements are often politically difficult for their political masters.

Common Agricultural Policy (CAP)

Direct Payments

The Single Payment Scheme (currently) and Basic Payment and Greening Payment in the reformed CAP.

Pillar 1 (P1)

Direct subsidy and market support.

Pillar 2 (P2)

Rural development expenditure. In the UK it is mainly used to fund the environmental schemes.


The transfer of money from Pillar 1 to Pillar 2. In future simply referred to as ‘Pillar transfers’. Under the 2008-2014 CAP in the UK there has been an EU component of 0% to €5,000, 10% for the payment tranche between €5,000 and €300,000 and 14% over €300,000. UK specific modulation for the three tiers is 14%, 9% and 5%. It is similar in Scotland and less in Wales.

Match funding

Where money has been transferred from Pillar 1 to Pillar 2 the individual country concerned has on occasion been asked to supply an equal amount of funding directly.

Co funding

Where money is transferred between Pillar 1 and Pillar 2 it is occasionally necessary for the country concerned to make an additional contribution proportionate to the transfer.

Pillar transfers

See modulation


Progressive payment reduction with size of claim


An absolute limit on the size of direct payments.

Coupled payments

Payments only made where production takes place.

National Reserve

A sum of money reserved to ensure parties are not disadvantaged as a result of a change in circumstances such as purchase or sale of a farm or to encourage activity such as more Young Farmers.

New Entrant

A farmer who starts their agricultural activity in their own right and did not have control (directly or indirectly) of a farming business in the previous five years.

Young Farmer

A farmer setting up for the first time an agricultural holding as head of the holding and who is under 40. In the first application year the Young Farmer must be set up within the previous five years.

Basic Payment

The core payment under the current reform and in general will be received together with the Greening Payment.


The shorthand expression for practices beneficial for the climate and the environment. The core greening measures are the maintenance of permanent grassland, crop diversification and ecological focus area.

Greening Payment

The proportion of the payment that will be received for delivery of “greening”. It will be available to those who do not qualify for the Basic Payment element. It is intended to be mandatory but for the first two years, at least, the penalty appears no greater than the loss of the payment itself.

Greening equivalence

A scheme that may be imposed by a member state that delivers the elements of “greening” but bundled together into an assurance scheme.

Common Market Organisation (CMO)

Management of product support such as intervention, control of imports and exports and EU tariffs.

Horizontal Regulations

Regulations describing the management of the schemes, including the penalties for non-compliance.

Implementing Regulations

Secondary legislation that provides more detail on the implementation of the policy.

Health Check reform

The 2008 tweak to the CAP.

Mid-term review (or reform)

The 2005 reform. It was originally intended to be a minor CAP reform but ended up as one of the biggest policy changes we have seen, introducing the possibility of full decoupling and the Single Payment Scheme.

Agenda 2000

The 2000 CAP reform.

Rural Development policies

Rural Development Programme

A range of measures that are funded from Pillar 2 that are not directly linked to production but can involve training, research, diversification and adding value to primary products. In the UK it has largely been used for funding environmental stewardship. It is covered by a specific regulation.

ELS: Entry Level Stewardship

Basic environmental scheme in England where options have to be installed to receive a payment. The entire farm is considered to be in the scheme and not just those areas where specific environmental management takes place. In future it is likely that a single claimant will have to be responsible for the Environmental Scheme and subsidy application. The scheme is now closed to new entrants.

HLS: Higher Level Stewardship

A more demanding option-based environmental scheme. Generally closed although those leaving the classic schemes (CSSs, ESAs) may still be eligible.


New Environmental Land Management Scheme. The new replacement environmental scheme for the ELS and HLS.

Classic (environmental) Schemes

The older environmental schemes such as The Countryside Stewardship Scheme and Environmentally Sensitive Area schemes.