The pion and nucleon mass differences generate a very pronounced cusp in the photoproduction reaction of a single neutral pion on the proton. A nonrelativistic effective field theory to describe this reaction is constructed. The approach is rigorous in the sense that it is an effective field theory with a consistent power counting scheme. Expressions for the S- and P-wave multipole amplitudes at one loop are given. The relation of the phase of the electric multipole E_0+ to the phase of the S-wave of pi^0 p --> pi^0 p scattering is discussed.