Brussels, 16/12/2013 (Agence Europe) - On Monday 16 December, the Council of Ministers of the EU adopted without debate the regulations reforming the common agriculture policy (CAP). This is the end of a lengthy process, which has taken three years. The regulation on direct payments was adopted unanimously, as was the cross-cutting regulation on the financing, management and monitoring of the CAP. Germany voted against the regulation on the single common market organisation (CMO) and the United Kingdom abstained. As regards the rural development regulation, only the Czech Republic abstained, but Italy adopted a declaration protesting against the rate of co-funding decided upon for certain forms of insurance.
Most of the new proposals will apply from 1 January 2015. A regulation providing for interim measures for 2014 has also been enshrined, to ensure a seamless transition between the current CAP and the new rules. The new elements, such as the greening of aid and additional aid for young farmers, will not apply until 2015. Additionally, the member states are encouraged to work on their multi-annual rural development programmes, to be approved early next year. However, for a number of annual elements, such as agri-environmental payments, the interim rules will be applied in order to ensure that regimes of this kind are not interrupted.
The compromise on the reform (see EUROPE 10932 for details) provides, amongst other things, for a new system of direct payments: convergence of aid not just between member states but also within them, greening of 30% of the aid, option to use a redistribution payment for the first hectares, reduction of the payment for large holdings (above 150,000) and the option for the countries to place an upper limit of €300,000 on the amounts granted to each farmer (obligatory additional aid for young farmers (up to 2% of the national envelope), optional regime for small farmers (annual payment of between €500 and €1,250), optional coupled support (maximum of 8% of the national envelope or a maximum of 13% if the current level of coupled support is above 5% in an individual member state), (optional) additional payment for areas subject to natural constraints (up to 5% of the national envelope).
In addition, the member states will have the option to transfer a maximum of 15% of their national envelope earmarked for direct payments (first pillar) into their “rural development” envelope (second pillar). Member states will also be able to transfer up to 15% of their national rural development envelope into their envelope for direct payments (or up to 25% for member states which received less than 90% of the Union average for direct payments).
On rural development, the co-funding rates of the Union will be 85% in the least-favoured regions, extremely remote regions and the minor islands of the Aegean Sea; 75% in the transition regions; 63% in other transition regions and 53% in the other regions for most payments.
Financial discipline. Notwithstanding the separate decision on the 2014 budget year, it was agreed that a threshold of €2,000 can be applied to any subsequent reduction of annual direct payments on the grounds of financial discipline (in other words, in the event of over-estimations of the payments compared to the budget available for the first pillar). In other words, the reduction would not apply to the first €2,000 of the direct payments for each farmer. This money will also be used to feed into the market crisis reserve, if applicable.
“Active farmers”. In order to close certain legal loopholes which have allowed a small number of businesses to apply for direct payments even if their main activity is not of an agricultural nature, the reform restricts the rule to active farmers. A new negative list of professional activities to be excluded from eligibility for direct payments (including airports, railway services, water distribution companies, real estate services and land used on a permanent basis for sports and leisure activities) will be obligatory in the member states, unless the companies in question are able to demonstrate that they do indeed carry out farming activities. The member states may include other activities on this negative list.
Eligible hectares. Under the rules, 2015 will be the new reference year for area conferring entitlement to the allocation of payments. However, in order to avoid any speculation, a link will be established with beneficiaries of the direct payments system in 2013. Any member states observing a sharp increase in declared eligible area will be allowed to limit the number of payment entitlements to be allocated in 2015.
Market management mechanisms. Milk quotas will expire in 2015. The reform provides that the regime of quotas applicable to sugar will end on 30 September 2017. In order to offer more security, the framework provisions governing the agreements between sugar companies and producers will be kept in place. As regards the period following the expiry of the quotas, white sugar will continue to be eligible for private storage aid. Most of the developing countries will continue to enjoy unlimited access to the Union market without duty.
On wine, the current system of vine planting rights will expire at the end of 2015. From 2016, it will be replaced with an authorisation system for new plantings (together with a production limit of 1% a year).
The existing public intervention and private storage aid systems have been reviewed to ensure that they are better adapted to requirements and more effective, particularly by making technical adjustments in the beef meat and dairy production sectors.
Additionally, new safeguard clauses have been brought in for all sectors, in order to allow the Commission to take emergency measures to respond to general market disturbances, such as the measures taken during the E.coli crisis between May and July 2011.
These measures will be funded out of a crisis reserve which will be fed into by the annual reductions in direct payments. Funds not used for these crisis measures will be repaid to farmers the following year. The crisis reserve will be a maximum of €400 million (in 2011 prices).
In the event of a serious imbalance on the market, the Commission will also be able to authorise producer organisations or inter-professional organisations, in full respect of specific guarantees, collectively to take certain temporary measures (withdrawal from the market or storage by private operators, for example) in order to stabilise the sector in question.
In order to strengthen the negotiating position of farmers within the food chain, the Commission would like a better organisation of the sectors and has authorised a number of limited derogations to the competition rules of the Union. Rules on the recognition of producer organisations (PO) and inter-professional organisations will now cover all sectors and increase the possibilities for establishing these organisations, the funding for which now comes under rural development. In addition, farmers will have the opportunity collectively to negotiate contracts for the supply of olive oil, beef meat, cereals and various other arable crops, subject to certain conditions and guarantees. Producers of ham with a protected geographical indication or appellation of origin may regulate the supply of the product on the market, subject to certain conditions.
Transparency: the member states will be obliged to guarantee total transparency to all beneficiaries, with the exception of agricultural holdings eligible for the small farmers regime in the member state in question. For these holdings, the data communicated will make no reference to the name or address. This practice complies with the ruling of the Court of October 2010, which establishes that the rules in force did not respect the rules on the privacy of natural persons. (LC/transl.fl)