Coupling EU farm payments to commitments in the fields environmental protection, human, animal and plant health and animal welfare is defined as "cross-compliance".
The European Union (EU) sets high standards by global comparison in the mentioned fields. Because of these standards which are high compared to competitors in other countries, direct payments from the EU agricultural budget are intended to compensate for higher production costs incurred by agricultural enterprises in the member states.
To also emphasize the legal aspect of linking EU agricultural payments to the protection standards, governments of the EU member states decided under the 2003 agricultural reform upon the proposal of the EU Commission to introduce cross-compliance and to make the granting of EU farm payments also contingent on compliance with certain obligations.
All enterprises in the EU receiving direct payments under the first pillar, payments for land and animal-related measures under the 2nd pillar (compensatory allowance for mountain areas and other less-favoured areas, support for agri-environmental and forest-environmental measures as well as reforestation, nature conservation and animal welfare measures) or restructuring aid in the wine sector are subject to these cross-compliance obligations. Enterprises under the small farmers' scheme for agricultural direct support are, however, exempted from this obligation.
Together with other EU rules and the implementing rules of the individual member states, Regulation (EU) No. 1306/2013 regulates which individual rules are relevant in detail. In Germany, the national implementing rules are laid down in the Agricultural Support Scheme Obligations Law as well as the Direct Support Scheme Obligations Ordinance.
In all EU member states the cross-compliance regime includes:
- The so-called "Statutory Management Requirements" (SMRs): Those are the most important rules for farmers from a total of 13 European legal instruments that are relevant for farmers (directives and regulations) covering environmental protection, food and feed safety, labelling and animal registration, control of animal diseases, pesticide use and animal welfare. Those legal acts were already effective (in the case of directives in the way they were implemented by member states) as specialised law regardless of cross-compliance, but are now also specifically linked to the payments in the form of cross-compliance.
- The so-called standards for the preservation of agricultural land in "good agricultural and environmental condition" (GLÖZ): They include seven standards which aim at reducing soil erosion, preventing the removal of landscape features, greening set-aside land and protecting water bodies.
- Cross-compliance also includes provisions on preserving permanent grassland which are primarily aimed at governments of the member states. These observe how the percentage of permanent grassland (in particular meadows and pastures) is developing as part of the total agricultural land and they take measures when the share of permanent grassland goes down. Under cross-compliance, those rules shall still be effective until the end of 2016. The protection of permanent grassland has already been regulated since 2015 in a modified version under the so-called "greening" scheme.
Compliance with the requirements is monitored by the competent authorities (e.g. veterinary offices, nature conservation authorities) or paying agencies on the ground with a sample of generally one percent of beneficiaries. In addition, there are controls based on specific events in individual enterprises, if necessary. Infringements identified are assessed according to seriousness, extent and duration and the payments are reduced accordingly, generally by three percent, with possible reductions (e.g. in case of minor infringements) and increases (in the case of serious, repeated or intentional infringements - in rare extreme cases even including the withdrawal of payments for one or even several years).
- As of: