That was always my belief but as a grazier receiving not a penny we have had 4 RPA inspections in 10 years,no non compliances either time,I did ask once what could they do if I told them to go jump?I doubt they could inspect anyway. If you are not in receipt of SFP/BPS, the RPA would have no authorisation to inspect your compliance with the law. Compliance with the law would be covered by the relevant statutory authority, most likely the Environment Agency or the Local Authority, depending on the rule in question. The only power over you the RPA has is that you signed a legal document to comply with rules A,B and C in order to get £X. Don't sign that document, the RPA have no hold over you.
The whole system is predicated on the concept that because farmers take the subsidy money, they can be controlled by threatening to remove or fine them that money, with no real right of a fair trial or recourse to the rule of law. Remove that threat of withholding money, and its a whole new ball game. Suddenly the authorities would have to get warrants to enter premises, collect and preserve evidence to legal standards, make the case stand up in court. A bit harder than sending some bod round with a clipboard and then declaring they are unilaterally fining you 5% of your SFP.
The answer was make life difficult with Trading Standards etc?