Starting from a relativistic formulation of the pion-nucleon-delta system, the most general structure of 1/M corrections for a heavy baryon chiral lagrangian including spin 3/2 resonances is given. The heavy components of relativistic nucleons and delta fields are integrated out and their contributions to the next-to-leaing order lagrangians are constructed explicitly. The effective theory obtained admits a systematic expansion in terms of soft momenta, the pion mass $m_\pi$ and the delta-nucleon mass difference $\Delta$. As an application, we consider neutral pion photoproduction at threshold to third order in this small scale expansion.