Brussels, 03/03/2008 (Agence Europe) - The services of Mariann Fischer Boel, the Agriculture and Rural Development Commissioner, have already prepared a first draft of legislative proposals on the common agricultural policy (CAP) “health check” which are due to be adopted by the European Commission on 20 May. The proposals are likely to chance as a function of the consultation among the Commission services, the opinion of the European Parliament (Wednesday 12 March) and above all the conclusions of the Agriculture Council (17 March).
The proposals are not a fundamental reform, but rather a “contribution to the future developments in the CAP”, the DG Agriculture services explain in the text presenting the legislative proposals. The fact still remains that the Commission is envisaging significant changes to the current rules, such as full decoupling (breaking the link between support and the volume produced) of aid to arable crops (currently the Member States have the right to maintain up to 25% of direct aid per hectare in this sector), an annual increase of 2% in the rate of obligatory modulation (reduction in aid to fund rural development programmes) associated with a premium degressivity system (decrease in support allocated as a function of farm-size), an annual increase of 1% in milk quotas (before they are phased out in 2015) and an intervention mechanism reduced to the minimum (“safety net”).
Here is a summary of the main modifications wanted by the Commission to the following three regulations: - Council Regulation (EC) No 1782/2003 of 29 September 2003 establishing common rules for direct support schemes under the common agricultural policy and establishing certain support schemes for farmers; - Council Regulation (EC) No 1234/2007 of 22 October 2007 establishing a common organisation of agricultural markets and on specific provisions for certain agricultural products (Single CMO Regulation); - and Council Regulation (EC) No 1698/2005 of 20 September 2005 on support for rural development by the European Agricultural Fund for Rural Development (EAFRD).
Single payment scheme. As part of its pursuit of the decoupling of aid (single per-farm payments), the Commission proposes eliminating the supports which are still partially couple to production (cereals, arable crops, olive oil, meat production), with two exceptions: the suckler cow premium (the only aid which could remain fully coupled) and the aid to sheep and goat farmers (50% of premiums could be granted as coupled payments). The Commission also gives countries the choice of abandoning payments calculated based on historical receipts in favour of a more flat-rate system. Finally, it advocates extending the period in which the new Member States can use the single area payment scheme from 2010 to 2013.
Article 69. This article (from the 2003 regulation on direct support schemes) gives the Member States the possibility to reserve specific support up to 10% of the national direct aid envelope. The Commission proposes to add to these provisions to provide: - measures in favour of farmers in certain regions which specialise in milk, cow, sheep and goat production; - certain risk management measures (crop insurance schemes for natural disasters and mutual funds for animal diseases; - an extension of the option to use article 69 to the new Member States.
Modulation. Under the CAP reform of 2003, the obligatory modulation rate went from 3% in 2005 to 4% in 2006 and 5% in 2007 and subsequent years. These rates are only applicable to farms which receive more than €5000 in direct aid annually. According to the legislative proposals envisaged as part of the health check, the current modulation rate would be increased by 2% per year from 2009 up to 2012 (with a rate of 7% in 2009, 9% in 2010, 11% in 2011 and 13% in 2013). These significant transfers of funds to rural development programmes are designed to enable Member States to respond to the following new challenges: climate change, agricultural risk management, bioenergies, water management and biodiversity). The countries which joined the EU in 2004 would be affected by the modulation in 2012 (at a rate of just 3%, compared to 13% for the others).
Degressivity of aid. In addition to the 2% increase in the obligatory modulation rate, the Commission intends to propose a gradual payment reduction system. Direct aid will be reduced by: an additional 3% per year (from 2009 to 2012) for farms which receive between €100 000 and €200 000 annually in aid, 6 % per year for those which total between €200 000 and €300 000 annually and 9 % for farms which earn more than €300 000 annually.
Minimum level of support. In order to reduce administrative burdens, the Member States will have to set a minimum amount of payments (€250) and/or a minimum size of area eligible for aid of at least one hectare.
Market intervention mechanisms. In the cereal sector the Commission proposes to institute: - a tendering system for bread wheat; - the reduction to zero (as for maize) of the quantitative ceiling for feed grains; - the abolition of intervention for durum wheat. Furthermore, Ms Fischer Boel's services are appealing for an end to intervention in the rice and pig meat sectors. Finally, the tendering system will also be applied to butter and skimmed milk powder.
Elimination of set-aside. According to the Commission proposals, set-aside is no longer an instrument of supply control. Nonetheless, in order to maintain the environmental advantages of set-aside tools will be made available to the Member States as part of rural development measures and under conditionality (payment of aid on the condition of respecting certain criteria).
Expiry of milk quotas. The Commission has already proposed a 2% increase in the EU's milk quotas for 2008/2009 (the Agriculture Council could reach an agreement on this on 17 March). In its legislative proposals it advocates an increase of 1% for the quotas from 2010/2011 to 2013/2014. Under the provisions of article 69, aid will be provided to producers in certain areas (such as mountainous regions) who are at risk of being severely affected by the end of quotas in 2015. Moreover, the Commission proposes the abolition not only of the private storage aid for cheese, but also the aid for butter for pastry and ice cream and for direct consumption.
Other support schemes. The Commission proposes extending the single payment scheme to small sectors: immediately for hemp, dried fodder, protein crops and nuts and gradually for rice, starch potatoes and long fibre flax. The Commission also confirms its desire to abolish the support schemes for energy crops. (L.C.)