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Науково-практична Інтернет-конференція 11.12.2013 - Секція №4
Since its creation, the Common agricultural policy has always been adapted to respond to the challenges of its time. Significant reforms have been made in recent years, notably in 2003 and during the CAP Health check in 2008, to modernise the sector and make it more market-oriented [1; 2; 3]. The Europe 2020 strategy offers a new perspective. In this context, through its response to the new economic, social, environmental, climate-related and technological challenges facing our society, the CAP can contribute more to developing intelligent, sustainable and inclusive growth. The CAP must also take greater account of the wealth and diversity of agriculture in the EU Member States. Common Agricultural Policy is one of the largest and most sensitive policies of the European Union [4, p. 121]. For more than 50 years is subject to numerous changes and transformations, which on the one hand, to help adjust to the new market requirements, on the other hand, affect the costs associated with its maintenance and operation [5, p. 31-54]. Recent changes were proposed in early October 2013, and based on Commission proposals from October 2011 [6; 7]. The agreement relates to four basic European Parliament and Council regulations for the Common Agriculture Policy – on Direct Payments, the Single Common Market Organization, Rural Development and a Horizontal Regulation for financing, managing and monitoring the CAP. The purpose of this article is to present the key assumptions relating to the prepared reform and attempt to assess their impact on the current shape of the CAP. 
The first element that has undergone reform are direct payments [8]. In order to move towards a fairer distribution of support, the CAP system for Direct Payments will move away from one where allocations per Member State - and per farmer within the Member State - are based on historical references. This will mean a clear and genuine convergence of payments not only between Member States, but also within Member States. Moreover, the introduction of a "Greening Payment" – where 30% of the available national envelope is linked to the provision of certain sustainable farming practices – means that a significant share of the subsidy will in future be linked to rewarding farmers for the provision of environmental public goods. All payments will still be subject to respecting certain environmental and other rules, such as cross compliance rule. [more about this rule see 9, p.35]. The national envelopes for direct payments for each Member State will be progressively adjusted such that there is not such a wide gap between Member States in the average payment per hectare. This will mean that those Member States where the average payment is currently below 90% of the EU average will see a gradual increase in their envelope. Also, there is the guarantee that every Member State will reach a minimum level by 2019. 
Those Member States that currently maintain allocations based on historical references must move towards more similar levels of the basic payment per hectare. They may choose from different options. First option is to take a national approach or a regional approach, with is based on administrative or agronomic criteria. Second one is to achieve a regional or national rate by 2019, or to ensure that those farms getting less than 90% of the regional or national average rate see a gradual increase with the additional guarantee that each payment entitlement reaches a minimum value of 60% of the national or regional average by 2019 year. In this option, Member States can decide to limit the decrease in the value of entitlements. 
Another change related to the direct payment applies to limitation of financial assistance for large-scale farms. The amount of support that an individual farm holding receives as basic payment will be reduced by at least 5% for the amounts above 150 000€. In order to take account of employment, salary costs may be deducted before the calculation is made. Member States also have the option of capping the amounts that any individual farmer can receive at 300 000€, also taking salary costs into account.
The next change introduced under the adopted reforms, is possibility, that any farmer claiming support may decide to participate in the Small Farmers Scheme and thereby receive an annual payment fixed by the Member State of normally between 500 € and 1 250 €, regardless of the farm size. Member States may choose from different methods to calculate the annual payment, including an option whereby farmers would simply receive the amount they would otherwise receive [10] Participants will not be subject to cross-compliance controls and sanctions, and be exempt from greening. The total cost of the Small Farmers Scheme may not be more than 10% of the national envelope, except when a Member State chooses to ensure that small farmers received what they would be due without the scheme. 
A lot of controversy raises the issue of ,,greening’’. In addition to the Basic Payment Scheme, each holding will receive a payment per hectare declared for the purpose of the basic payment for respecting certain agricultural practices beneficial for the climate and the environment. Member States will use 30% of their national envelope in order to pay for this. This is compulsory and failure to respect the Greening requirements will result in reductions and penalties which might in some cases go beyond the Greening payment. In years 1 & 2 the penalty for greening may not exceed 0%, 20% in the third year and as of the fourth the maximum penalty applied will be 25% [10]. Areas under organic production, which is a production system with recognised environmental benefits, shall be considered as fulfilling the conditions for receiving the greening payment, without any additional requirements.
The three basic practices foreseen are maintaining permanent grassland, crop diversification and ensuring an “ecological focus area” of at least 5% of the arable area of the holding [10]. 
In order to iron out a number of legal loopholes which have enabled a limited number of companies to claim Direct Payments, even though their primary business activity is not agricultural, the reform tightens the rule on active farmers. A new negative list of professional business activities which should be excluded from receiving Direct Payments (covering airports, railway services, water works, real estate services and permanent sports & recreation grounds) will be mandatory for Member States, unless the individual businesses concerned can show that they have genuine farming activity. Member States will be able to extend the negative list to include further business activities.
The changes also affected the policy of. Rural Development. Member States will have the possibility of transferring up to 15% of their national envelope for Direct Payments (1st Pillar) to their Rural Development envelope. These amounts will not need to be co-funded. Member States will also have the option of transferring up to 15% of their national envelope for Rural Development to their Direct Payments envelope, or up to 25% for those Member States that get less than 90% of the EU average for direct payments [10].
Another area with is subjected to CAP reform is the market management mechanisms [11]. Most important changes in this area are changes in the support for milk producers. Milk quotas expiring in 2015, the reform foresees the end to the sugar quota regime on September 30, 2017, confirming the indication of the 2005 sugar reform to put an end date for the quota regime while allowing for additional time for the sector to adjust. This will ensure improved competitiveness for EU producers on the domestic and world market alike. Ample supply on EU domestic markets at reasonable prices will also benefit the intermediate and final users of sugar. In order to provide added security, standard provisions for agreements between sugar factories and growers will be maintained. For the period after quotas, white sugar will remain eligible for private storage aid. Most developing countries will continue to enjoy unlimited duty-free access to the EU market [10].
Other amendments to the Singe Common Market Organization (CMO) rules aim to improve the market orientation of EU agriculture in light of increased competition on world markets, while providing an effective safety net for farmers in the context of external uncertainties. The existing systems of public intervention and private storage aid are revised to be more responsive and more efficient, for example with technical adjustments for beef and dairy. Moreover, new safeguard clauses are introduced for all sectors to enable the Commission to take emergency measures to respond to general market disturbances. These measures will be funded from a Crisis Reserve financed by annually reducing direct payments. Funds not used for crisis measures will be returned to farmers in the following year. In case of severe imbalance in the market, the Commission may also authorise producer organisations or inter branch organisations, respecting specific safeguards, to take certain temporary measures collectively to stabilise the sector concerned. The School Fruit Scheme [12] and the School milk scheme [13] are to be extended, and the annual budget for the school fruit scheme is increased from EUR 90 to EUR 150 million per year.
In order to improve farmers' negotiating position in the food chain, the Commission is looking for a better organisation of the sectors with a few limited derogations to EU competition law [14]. Rules related to the recognition of Producer Organisations (POs) and inter-branch organisations are now covering all sectors – with further options for establishing such oganisations now transferred to Rural Development funding. Furthermore, the possibility for farmers to collectively negotiate contracts for the supply of olive oil, beef, cereals and certain other arable crops is foreseen under certain conditions and safeguards. The Commission will provide guidelines about potential issues relating to competition law. Producers of hams covered by a protected geographical indication or a denomination of origin may under certain conditions regulate the supply of the product to the market [15]. 
Rural development policy will retain its current foundation concept. Member states or regions will continue to design their own multi-annual programmes on the basis of the menu of measures available at EU level – in response to the needs of their own rural areas. These programmes will be co-funded from the national envelopes – where the amounts and rates of co-funding will be dealt with within the context of the MFF. The new rules for the 2nd Pillar provide a more flexible approach than at present. Measures will no longer be classified at EU level into "axes" with associated minimum spending requirements per axis. The six priorities will cover areas of fostering knowledge transfer and innovation, enhancing competitiveness of all types of agriculture and the sustainable management of forests, promoting food chain organisation, including processing and marketing, restoring, preserving and enhancing ecosystems. This priorities included also promoting resource efficiency and the transition to a low-carbon economy, promoting social inclusion, poverty reduction and economic development in rural areas. Member States will have to spend at least 30 % of their rural development funding from the EU budget on certain measures related to land management and the fight against climate change, and at least 5 % on the LEADER approach. Rural Development policy will also operate in closer co-ordination with other policies through an European level Common Strategic Framework and through Partnership Agreements at national level covering all support from European Structural and Investment funds [10].
In the new period, Member States or regions will also have the possibility to design thematic subprogrammes to pay especially detailed attention to issues such as young farmers, small farms, mountain areas, women in rural areas, climate change mitigation or adaptation, biodiversity and short supply chains. Higher support rates will be available within subprogrammes in some cases. The streamlined menu of measures will build on the strong points of measures available in the current period. It will be cover issues of innovation with will be served by various rural development measures such as "knowledge transfer", "cooperation" and "investments in physical assets". It will promote resource efficiency, productivity and the low-emission and climate-friendly development of agriculture and forestry. This should be achieved, inter alia, through greater cooperation between agriculture and research in order to accelerate technological transfer to farmers. This also covered issues of ,,a knowledge-based agriculture” with means strengthened measures for Farm Advisory Services, and also linked to climate change mitigation and adaptation, to environmental challenges and to economic development and training). Another measures will be covered with farm restructuring and investment and a combination of measures can include business start-up grants, general investments in physical assets, training and advisory services [10]. 
Some changes are related to control requirements, It will be lowered in regions where previous checks have shown good results, the rules are being properly respected. However, checks will need to be increased in regions where there are problems. The list of issues on which Member States will have to offer advice to farmers has been enlarged to cover, beyond cross compliance, the green direct payments, the conditions for maintenance of land eligible for direct payments, the Water Framework and Sustainable Use of Pesticides Directives, as well as certain rural development measures. All direct payments, certain rural development payments and certain vine payments will continue to be linked to the respect of a number of statutory requirements relating to environment, climate change, good agricultural condition of land, human, animal & plant health standards and animal welfare. The list has been simplified to exclude rules where there are no clear and controllable obligations for farmers. The deal confirms that the Water Framework and the Sustainable Use of Pesticides Directives will be incorporated into the cross-compliance system once they have been shown to have been properly applied in all Member States, and obligations to farmers have been clearly identified [10]. 
Member States will have to provide full transparency of all beneficiaries, with the exception of those farms which are eligible for the Small Farmers Scheme in that Member State. For these farms, the data will be provided but without the name or address. This fully respects the Court ruling of October 2010 which stated that the existing rules did not respect data privacy rules for natural persons.
The Commission will present a report before the end of 2018 – and every 4 years thereafter – on the performance of the CAP with respect to its main objectives – viable food production, sustainable management of natural resources, and balanced territorial development. The aim is that all the new Regulations enter into force from January 1, 2014 – and the Commission can now start work on the implementing rules for these Council Regulations. However, given the preparation necessary, it is already clear that the Member State Paying Agencies do not have enough time to have the necessary administration and controls for the new system of direct payments in place by the start of next year. As a result, the Commission has made a separate proposal that there should be a transition year for Direct Payments in 2014. The new elements such as ,,greening’’ and the Young Farmers top-up will only apply from 2015 onwards. Similarly, Member States are encouraged to work on their multi-annual Rural Development programmes, which should be approved early next year. However, for certain annual elements, such as agri-environment payments, transition rules should apply so that there is no interruption in this type of scheme.
The Commission is now preparing all the relevant Delegated and Implementing Acts so that the new rules can enter into force next year, or from January 2015 for most of the new Direct Payment arrangements. Separate "transition rules" for 2014 are being discussed and should be approved by Council and the European Parliament before the end of the 2013 year.
 
References:
1. Council Regulation (EC) No 72/2009 of 19 January 2009 on modifications to the Common Agricultural Policy by amending Regulations (EC) No 247/2006, (EC) No 320/2006, (EC) No 1405/2006, (EC) No 1234/2007, (EC) No 3/2008 and (EC) No 479/2008 and repealing Regulations (EEC) No 1883/78, (EEC) No 1254/89, (EEC) No 2247/89, (EEC) No 2055/93, (EC) No 1868/94, (EC) No 2596/97, (EC) No 1182/2005 and (EC) No 315/2007 (Official Journal of the European Union L 30, 31 January 2009).
2. Council Regulation (EC) No 73/2009 of 19 January 2009 establishing common rules for direct support schemes for farmers under the common agricultural policy and establishing certain support schemes for farmers, amending Regulations (EC) No 1290/2005, (EC) No 247/2006, (EC) No 378/2007 and repealing Regulation (EC) No 1782/2003 (Official Journal of the European Union L30, 31 January 2009).
3. Council Regulation (EC) No 74/2009 of 19 January 2009 amending Regulation (EC) No1698/2005 on support for rural development by the European Agricultural Fund for Rural Development (EAFRD) (Official Journal of the European Union L 30, 31 January 2009).
4. Miąsik D. [w:] Prawo europejskie. Zarys wykładu, red. R. Skubisz, E. Skrzydło-Tefelska, Lublin 2003.
5. Jurcewicz A. Prawo i polityka rolna Unii Europejskiej, Warszawa 2010.
6. Political agreement on new direction for common agricultural policy European Commission - IP/13/613 of 26 June 2013. Available on the website http://europa.eu/rapid/press-release_IP-13-613_en.htm [access on day 11.12.2013].
7. The common agricultural policy (CAP) and agriculture in Europe – Frequently asked questions European Commission - MEMO/13/631 of 28 June 2013. Available on the website http://europa.eu/rapid/press-release_IP-13-613_en.htm [access on day 11.12.2013].
8. Council Regulation (EC) No 73/2009 of 19 January 2009 establishing common rules for direct support schemes for farmers under the common agricultural policy and establishing certain support schemes for farmers, amending Regulations (EC) No 1290/2005, (EC) No 247/2006, (EC) No 378/2007 and repealing Regulation (EC) No 1782/2003 (Official Journal of the European Union L30, 31.01.2009).
9. Jeżyńska B. Znaczenie i funkcje zasady cross-compliance w systemie rolniczych dopłat bezpośrednich, Studia Iuridica Lublinensia 2010, No 13, s. 35-50. 
10. European Commission MEMO/13/937 of 25 October 2013. Available on the website http://europa.eu/rapid/press-release_MEMO-13-937_en.htm [access on day 11.12.2013].
11. Council Regulation (EC) No 1234/2007 of 22 October 2007 establishing a common organization of agricultural markets and on specific provisions for certain agricultural (EU Official Journal, Nr L 299, 16.11.2007).
12. Council Regulation (EC) No 13/2009 of 18 December 2008 amending Regulations (EC) No1290/2005 on the financing of the common agricultural policy and (EC) No 1234/2007 establishing a common organisation of agricultural markets and on specific provisions for certain agricultural products (Single CMO Regulation) in order to set up a School Fruit Scheme (EU Official Journal, No L 5, 9.1.2009).
13. Commission Regulation (EC) No 657/2008 of 10 July 2008 laying down detailed rules for applying Council Regulation (EC) No 1234/2007 as regards Community aid for supplying milk and certain milk products to pupils in educational establishments (EU Official Journal No 183, 11.7.2008). 
14. Council Regulation (EC) No 1698/2005 of 20 September 2005 on support for rural development by the European Agricultural Fund for Rural Development (EAFRD) (EU Official Journal No 277/1, 21.10.2005).
15. Regulation (EU) No 1151/2012) of The European Parliament and The Council of 21 November 2012 on quality schemes for agricultural products and foodstuffs (EU Official Journal No L343/1, 14.12.2012). {jcomments on}
 
 

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