Brussels, 06/12/2006 (Agence Europe) - After numerous consultations with Member States, the European Commission adopted on Wednesday 6 December, the new guidelines on state aid payment conditions in the agriculture and forestry sector from 1 January 2007 to 31 December 2013. the Commission also adopted a new regulation on the application of Articles 87 and 88 in the treaty on state aid to small and medium-sized undertakings involved in agricultural production provided that aid to SMEs is compatible with the common market and does not therefore have to be notified by the Member State.
New guidelines apply to all state aid accorded as part of the activities linked to production, processing and marketing of agricultural products. They have been amended to take into account of new rules and measures contained in the rural development programme. The new categories of aid included in the new guidelines include aid for compliance with standards, "Natura 2000" aid and aid relating to the payments provided for water policy, aid relating to exemption from excise duties as provided for in 2003 Directive (taxation of energy products and electricity) and aid to the forestry sector.
To respond to demands from Member States that judged its initial draft too restrictive, the Commission agreed to Member States having the possibility of state aid for the purchase of aid but only up to 10% of eligible costs. It also maintains the following kinds of aid: aid for advertising campaigns (up to 100% of the costs will be declared compatible if the advertising campaign has a generic character and benefits the whole agricultural sector); aid for “re-parcelling” (up to 100% of administrative costs for agricultural re-parcelling). It also maintains the current levels for the different compensation thresholds in the event of animal illnesses (the list of epizooties is expanded).
The new “exemption” system allows Member States to grant certain aid to small and medium farms active in primary agricultural products. SME beneficiaries of this kind of aid have to employ less than 250 workers and have an annual turnover of at least €50 million (firms whose total annual balance sheet is less or equal to €43 million are also in this category). This incorporates practically all EU farms. The new regulation does not apply to aid tied to processing and marketing of agricultural procures, which are already covered by provisions on state aid in the industrial sector. The Commission explained that “There is no need to treat Danone or Parmalat as a farmer”. For these kinds do large company, the Commission will soon be proposing to bring the “de minimis” threshold up from €100,000 to €200,000. This ceiling is below that for national aid characterised by certain given conditions and automatically validated by the Commission. For bona fide agricultural production, this threshold remains that set out in the 2004 regulation: €3,000 per beneficiary over three years.
The guidelines and the new regulation the different categories of state aid more clearly than before (and comply with orientations on rural development): investment in agricultural businesses; conservation of landscapes and traditional buildings (up to €10,000 per year per farmer); transfer of agricultural buildings in the public interest (rate of aid can reach 100% of real spending incurred); youth projects; early retirement; producer groups (eligible spending includes location of premises, purchase of office equipment, including material and software and administrative expenditure); fight against animal, and plant diseases and infections by parasites (the threshold of a 30% loss in production does not apply and aid granted can rise to 100% of registered losses); losses due to bad weather (but compensation cannot go over 50% of losses); payment of insurance bonuses; re-parcelling; quality production; technical assistance and animal rearing sector. (lc)