Tag Archives: Aid scheme

Risk and crisis management in agriculture

Risk and crisis management in agriculture

Outline of the Community (European Union) legislation about Risk and crisis management in agriculture

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These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Agriculture > General framework

Risk and crisis management in agriculture

Document or Iniciative

Communication from the Commission to the Council of 9 March 2005 on risk and crisis management in agriculture [COM(2005) 74 final – Not published in the Official Journal].

Summary

In this communication, the Commission proposes the introduction of measures to help farmers to manage risk and improve their response to crises. It is proposing three categories of new measures.

New options for risk and crisis management tools

Risk * (resulting in a negative outcome) and crises * may have serious economic consequences for businesses, affecting their income. Most of the instruments devised to provide assistance to cope with unforeseeable events rely on ad hoc measures.

The Commission has examined a number of instruments to accompany or partially replace the existing ad hoc emergency measures. The three options proposed by the Commission are as follows:

  • insurance against natural disasters: this would involve the provision of a financial contribution towards the premiums paid by farmers for insurance against income loss as a result of natural disaster, bad weather or disease. This measure would encourage insurance in the sector, which up to now has been underdeveloped as a result of the systemic nature of the risks involved. Reinsurance schemes are also considered;
  • supporting mutual funds: mutual funds are a means of sharing risk among groups of producers, enabling farmers to be compensated in the event of loss. In the past, funds have usually been set up on the initiative of producer groups in the same sector. The Commission is proposing that the setting up of mutual funds in the agricultural sector be encouraged by granting temporary degressive aid for their administration;
  • providing basic coverage against income crises: new instruments could be created to provide basic coverage in the event of liquidity problems or serious loss of income. The reasoning is that, while rural development programmes will be available to support major investment in restructuring and provide aid for structural adjustments, they could prove insufficient.

Training measures could be introduced under the rural development programmes to help improve awareness of current risks and improve risk management strategies.

Safety net in the event of market crisis

The instruments used to influence the market and price situation and address possible crises vary between market organisations. Following the CAP reform, safety net provisions in the event of crisis remain available in several sectors covered by the reform. For other sectors, there is currently no justification for the introduction of an additional general safety net provision. The Commission therefore rules out the introduction of a safety net clause for each common market organisation.

Financing risk and crisis management measures

The Commission proposes that these additional risk and crisis management measures should be funded under the rural development programmes (under the competitiveness priority) out of one percentage point of modulation *. Using modulation would not require additional Community expenditure and would make it possible for the Member States to use a limited amount of rural development funds for these purposes. For the new Member States, in which modulation does not apply, a method enabling those so wishing to allocate funds to these measures will have to be examined.

The use of state aid or top-ups for this type of measure would be subject to the relevant Community competition rules.

Background

An initial analysis of risk management tools was presented by the Commission in January 2001. The conclusions of the Luxembourg Council (June 2003) on the reform of the CAP include a statement by the Commission on this matter, announcing that it would examine specific measures to address risks and crises by the end of 2004.

Key terms used in the act
  • Single payment scheme: the single payment is an annual income payment to farmers calculated on the basis of the aid received over the 2000-02 reference period. The main aim of this payment is to ensure greater income stability for farmers. Farmers are free to decide what they want to produce in response to demand without losing their entitlement to support.
  • Modulation: a mechanism to progressively reduce direct payments to farmers and transfer the funds thus released to the rural development sector.
  • Risk: implies a situation that could have a variety of outcomes, for each of which the probability can be estimated.
  • Crisis: an unforeseen situation that endangers the viability of agricultural holdings, either at local level or across a whole sector of production.

Mediterranean package

Mediterranean package

Outline of the Community (European Union) legislation about Mediterranean package

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These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Agriculture > General framework

Mediterranean package

Document or Iniciative

Council Regulation (EC) No 864/2004 of 29 April 2004 amending Regulation (EC) No 1782/2003 establishing common rules for direct support schemes under the Common Agricultural Policy and establishing certain support schemes for farmers, and adapting it by reason of the accession of the Czech Republic, Estonia, Cyprus, Latvia, Lithuania, Hungary, Malta, Poland, Slovenia and Slovakia to the European Union.

Summary

This Regulation, known as the “Mediterranean package”, supplements the major reform of the Common Agricultural Policy (CAP) of June 2003 with provisions relating to the integration of support for tobacco, hops, olive groves and cotton into the single payment scheme.

The Regulation establishes specific direct aid applicable to these sectors. This aid is granted on condition that farmers meet the cross-compliance requirements laid down by the 2003 reform.

Hops

Direct aid for hops has been decoupled from production since 1 January 2005 (except in countries which applied a transitional period until 31 December 2005). However, in order to deal with specific market situations or regional implications, Member States may retain a certain percentage of coupled aid (corresponding to a maximum of 25 % of their national ceiling *).

The reference amount for the calculation of the aid is EUR 480 per hectare for which aid was granted during the reference period 2000 to 2002.

The Regulation on the common organisation of the market in hops contains rules on marketing, producer groups and trade with third countries.

Cotton

Direct aid for cotton has been decoupled from production since 1 January 2006. However, in order to safeguard production in areas where cotton production would be liable to cease if decoupling were applied in full, Member States may retain a certain percentage of coupled aid (corresponding to a maximum of 35 % of the total amount of aid previously granted for cotton).

This aid is calculated according to the following table:

Maximum area (total)
440 000 hectares
Greece Spain Portugal
National base area

370 000 hectares

70 000 hectares

360 hectares

Aid in euros per eligible hectare

300 000 hectares at EUR 594 per hectare
70 000 hectares at EUR 342.85 per hectare

EUR 1 039 per hectare

EUR 556 per hectare

The “approved inter-branch organisations” in the cotton sector are encouraged to participate in the management of area aid for their members (fixing a scale).

Following the cancellation by the Court of Justice of the European Communities of the 2004 reform in September 2006, the current regulations governing the cotton sector will be replaced in the near future. In response to a very wide-ranging public consultation, stakeholders and the general public submitted contributions with a view to drawing up a new proposal for reform.

Olive oil

Support for the olive oil sector has been decoupled from production since 1 January 2006. However, for the upkeep of olive groves of environmental or social value, area aid (corresponding to a maximum of 40 % of the aid previously granted) is granted for olive groves recorded in the geographical information system *.

Only Spain decided to apply coupled aid for olive groves, amounting to EUR 103.14 million per annum.

Member States may assign no more than 10 % of their national envelope for olive oil to measures to improve quality.

The Regulation on the common organisation of the market in olive oil and table olives regulates the internal market and trade in these products with third countries.

Tobacco

Direct aid for tobacco will be fully decoupled from production from 2010. However, in order to protect local economies and to allow the market price to adjust to the new conditions, Member States may maintain a certain percentage of coupled aid (corresponding to a maximum of 60 % of the aid previously granted) for the four years up to 2010.

During this period, and depending on the choice made by the Member States concerned, the maximum amounts of this aid are as follows:

2006-2009
(EUR million)
Germany

21.287

Spain 70.599
France 48.217
Italy (apart from Puglia) 189.366
Portugal 8.468

A proportion of this production aid (set at 5 % in 2007) is transferred to the Community Tobacco Fund, which finances research and information programmes on the harmful effects of tobacco consumption.

From 2011, half the aid granted annually for tobacco between 2000 and 2002 (estimated at EUR 484 million) will be transferred for restructuring the tobacco-producing regions under rural development programmes financed under the European Agricultural Guidance and Guarantee Fund, EAGGF.

The Regulation on the common organisation of the market in tobacco regulates production orientation and trade with third countries.

Background

The “Mediterranean products” reform is based on the Commission communication to the Council and the European Parliament entitled “Accomplishing a sustainable agricultural model for Europe through the reformed CAP – the tobacco, olive oil, cotton and sugar sectors “. For hops, the reform is based on the report from the Commission to the Council on evolution of the hop sector .

Key terms used in the act
  • National ceiling: maximum amount which each State may allocate to direct aid payments.
  • Geographical information system: a computerised tool organising geographical data and providing a realistic representation of the spatial environment.

References

Act Entry into force Deadline for transposition in the Member States Official Journal
Regulation (EC) No 864/2004 1.5.2004 OJ L 161 of 30.4.2004

Resources

See Also

Specific measures in favour of the smaller Aegean islands

Specific measures in favour of the smaller Aegean islands

Outline of the Community (European Union) legislation about Specific measures in favour of the smaller Aegean islands

Topics

These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Agriculture > General framework

Specific measures in favour of the smaller Aegean islands

Document or Iniciative

Council Regulation (EC) No 1405/2006 of 18 September 2006 laying down specific measures for agriculture in favour of the smaller Aegean islands and amending Regulation (EC) No 1782/2003 [See amending acts].

Summary

The smaller Aegean islands benefit from specific supply arrangements for certain agricultural products and adapted support measures for local agricultural production. These measures, exemplified by this Regulation, aim at promoting the development of these regions which is hindered by a number of geographical and economic factors.

Specific supply arrangements

Supply of agricultural products (a list of which can be found in Annex I of the treaty) that are essential for human consumption or for the manufacture of other products is based on a specific support policy. In this respect, the authorities designated by Greece establish a forecast supplybalance which quantifies annual needs for the products concerned. This forecast is then approved by the Commission.

The products benefit from supply aid which is fixed according to the additional marketing costs. Implementing the specific supply arrangements takes into account certain factors such as the particular needs of the smaller islands, traditional trade flows, the economic aspect of the aid envisaged and the development of local production.

Products covered by this scheme may only be re-exported under the conditions established by the Committee which assists the Commission. These conditions include the reimbursement of aid received. Moreover, products which are processed in the smaller islands using materials which have benefited from the specific supply arrangements may only be exported to third countries or sent to the Community within the maximum quantities defined by the Commission.

Measures in favour of local agricultural production

Greece presents a support programme which is submitted to the Commission for approval. This programme includes measures to foster agricultural production in the smaller islands. The measures must be coherent and compatible with Community legislation and policies, in particular the Common Agricultural Policy.

The support programme may include:

  • a quantified description of the situation as regards agricultural production;
  • the proposed strategy and expected impact in economic, environmental and social terms;
  • an implementation schedule for the measures and a general summary table describing the resources to be mobilised;
  • a justification of the compatibility and coherence of the various measures in the programme and a definition of the criteria and quantitative indicators used for monitoring and assessment;
  • action taken to ensure that the programme is implemented effectively and appropriately;
  • the competent authority designated to implement the programme and associated organisations.

Support measures

The Commission may authorise additional aid in the form of operating aid in the sectors of production, processing and marketing of the said products to implement the support programme.

Financial provisions

The specific supply arrangements and the measures fostering local agricultural production amount to a maximum of EUR 23.93 million per year. With regard to the specific supply arrangements, the maximum annual amount is EUR 5.47 million.

General provisions

The Commission is assisted by the Management Committee for Direct Payments.

Greece presents to the Commission:

  • by 15 February of each year, funding for the implementation of the programme in the following year;
  • by 30 June of each year, a report on the measures laid down in this Regulation.

The Commission presents a general report on the impact of action carried out pursuant to this Regulation to the European Parliament and the Council by 31 December 2011.

Context

The first unique support framework for agriculture in the Aegean islands was presented in Regulation No 2019/93, which laid down specific supply arrangements and specific aid measures for certain sectors such as potatoes, vines and olive growing. In view of the success of this system, this Regulation aims at maintaining this aid whilst reinforcing partnerships with local authorities and giving them more freedom to manage funding.

References

Act Entry into force Deadline for transposition in the Member States Official Journal
Regulation (EC) No 1405/2006

3.10.2006

OJ L 265 of 26.9.2006

Amending act(s) Entry into force Deadline for transposition in the Member States Official Journal
Regulation (EC) No 615/2008

29.6.2008

OJ L 168 of 28.6.08

Regulation (EC) No 72/2009

7.2.2009

OJ L 30 of 31.1.09

The subsequent amendments and corrections to Regulation (EEC) No 1405/2006 have been incorporated into the basic text. This consolidated versionis only of documentary value.

Related Acts

Application procedure

Commission Regulation (EC) No 1914/2006 of 20 December 2006 laying down detailed rules for applying Council Regulation (EC) No 1405/2006 laying down specific measures for agriculture in favour of the smaller Aegean islands [Official Journal L 365 of 21.12.2006].

This Regulation contains the application procedure for measures in favour of the smaller Aegean islands. Concerning specific supply arrangements, it describes the function of administrative components such as the aid certificate and the register of operators, gives details of export conditions and explains the procedure for inspection and exports. With regard to measures in favour of local production, the Regulation describes how the amount of aid is determined, how applications are to be submitted and how aid is paid, as well as the principles governing inspections relating to the proper use of aid and sanctions.
See consolidated version

Transmission of information

Commission Regulation (EC) No 792/2009 of 31 August 2009 laying down detailed rules for the Member States’ notification to the Commission of information and documents in implementation of the common organisation of the markets, the direct payments’ regime, the promotion of agricultural products and the regimes applicable to the outermost regions and the smaller Aegean islands [Official Journal L 228 of 1.9.2009].

State aid for employment

State aid for employment

Outline of the Community (European Union) legislation about State aid for employment

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These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Employment and social policy > Job creation measures

State aid for employment

State aid for job creation and aid to promote the recruitment of disadvantaged and disabled workers are exempt from any obligation to notify.

Document or Iniciative

Commission Regulation (EC) No 2204/2002 of 12 December 2002 on the application of Articles 87 and 88 of the EC Treaty to State aid for employment. [See amending acts].

Summary

The Regulation applies to two categories of employment aid: aid for job creation and aid to promote the recruitment of disadvantaged and disabled workers. Other types of employment aid are not prohibited, but they must be notified to the Commission in advance.

In accordance with Article 87(1) of the EC Treaty, aid exempted by the Regulation must have as its object and effect the promotion of employment, while leaving trade unaffected. Export aid is not covered by the Regulation.

Aid granted to an individual enterprise and aid which does not lead to an overall increase in the number of employees (e.g. aid to help convert temporary contracts into permanent ones) remains subject to the prior notification requirement. Enterprises which qualify for rescue and restructuring aid remain subject to the relevant EU guidelines.

The Regulation applies to all industries apart from coalmining (Council Regulation 1407/2002), shipbuilding (Council Regulation 1540/98) and transport, which remain subject to sector-specific rules.

Job creation

With regard to employment aid intended for job creation, the Regulation lays down the following ceilings:

  • In areas and sectors which do not qualify for regional aid, the gross aid intensity must not exceed the ceilings of 15 % in the case of small enterprises and 7.5 % in the case of medium-sized enterprises.
  • In areas and sectors which qualify for regional aid, the ceilings correspond to those mentioned on the regional aid maps and in the multisectoral framework for regional aid for large investment projects. In the case of SMEs, the ceiling is increased by 10 or 15 percentage points according to whether the areas are covered by point (c) or point (a) of Article 87(3). In less-favoured areas, it is these ceilings or, where appropriate, the higher ceilings provided for in Regulation 1257/1999 that apply.

Aid may be granted for a maximum period of two years, provided that the employment created:

  • represents a net increase in the number of employees;
  • is maintained for a minimum period of three years, or two years in the case of SMEs;
  • benefits workers who have never had a job or are unemployed.

To receive this type of aid, the beneficiary must submit an application to the Member States.

Recruitment of disadvantaged or disabled workers

The Regulation contains definitions of “disadvantaged worker” and “disabled worker” that are broad enough to include, in the case of the former, any person who is a member of an ethnic minority, a migrant or unemployed and, in the case of the latter, any person who has a physical, mental or psychological impairment.

In the case of aid to promote the recruitment of disadvantaged or disabled workers, Member States may grant enterprises aid of up to 50 % (for disadvantaged workers) and 60 % (for disabled workers) of wage costs and compulsory social security contributions over a period of one year. Aid may also be granted to compensate for the reduced productivity of such workers and to adapt premises and provide special assistance.

Cumulation

The ceilings laid down in the Regulation apply irrespective of whether the resources are national resources or EU resources. On the other hand, only aid to disadvantaged and disabled workers may be combined with other State aid or with other EU support measures, provided that this does not result in a gross aid intensity exceeding 100 % of wage costs.

Transparency and monitoring

In order to ensure effective monitoring and a sufficient degree of transparency, the Commission requires Member States:

  • to notify it, within 20 working days using a standard form (Annex I), of the implementation of any aid scheme exempted by the Regulation;
  • to maintain detailed records of aid schemes exempted by the Regulation;
  • to compile an annual report on the application of the Regulation (Annex II).

At the end of the period of validity of the Regulation, aid schemes exempted under the Regulation will remain exempted during an adjustment period of six months.

Regulation (EC) No 2204/2002, initially scheduled to expire on 31 December 2006, was extended a first time until 31 December 2007 by Regulation (EC) No 1040/2006, then a second time until 30 June 2008 by Regulation (EC) No 1976/2006.

Background

Within the framework of Regulation 994/98, which allows the Commission to exempt certain categories of State aid, the Regulation is designed to exempt aid for job creation and aid to promote the recruitment of disadvantaged and disabled workers in order to simplify administrative procedures.

In the light of experience gained in applying employment aid provisions, the Regulation exempts employment aid where it is intended for areas that qualify for regional aid, or for small and medium-sized enterprises (SMEs) rather than large enterprises.

The Regulation takes account, however, of the guidelines on national regional aid and of Regulation 70/2001 on State aid to small and medium-sized enterprises.

References

Act Entry into force – Date of expiry Deadline for transposition in the Member States Official Journal
Regulation (EC) No 2204/2002 02.01.2003-30.06.2008 OJ L 337 of 13.12.2002
Amending act(s) Entry into force Deadline for transposition in the Member States Official Journal
Regulation (EC) No 1040/2006 28.07.2006 OJ L 187 of 08.07.2006
Regulation (EC) No 1976/2006 24.12.2006 OJ L 368 of 23.12.2006

Common framework for joint multiannual programming

Common framework for joint multiannual programming

Outline of the Community (European Union) legislation about Common framework for joint multiannual programming

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These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

External relations > Relations with third countries > Asia

Common framework for joint multiannual programming

Document or Iniciative

Communication from the Commission to the Council and the European Parliament of 2 March 2006: Increasing the impact of EU aid: A common framework for drafting country strategy papers and joint multiannual programming [COM(2006) 88 final – Official Journal C 130 of 3 June 2006].

Summary

The programming framework for the country strategy papers (CSPs) is a multiannual programming instrument that was adopted in 2000 as part of the reform of the management of the Commission’s external aid. Between 2000 and 2006 it was applied in the programming of the CSPs and the regional strategy papers (RSPs) for all the developing countries benefiting from the European Development Fund (EDF) and from the ALA, Meda, Tacis and Cards programmes. The use of CSPs/RSPs was a way of improving the quality of the Commission’s programming. The quality and effectiveness of the CSPs was further improved by the 2004 and 2005 mid-term reviews; the regional strategies were revised in 2005.

The communication proposes an updating of the 2000 CSP framework with a view to introducing joint multiannual programming aimed at:

  • facilitating the gradual alignment of lenders on the multiannual programming cycles of the partner country;
  • increasing the possibility of synchronising the programming processes of the Member States and the Commission.

Joint multiannual programming is one of the components of the European Union (EU) action plan for effective aid and one of the principles set out in the European Consensus on Development.

The principles of effective programming

The Commission recommends that the structure of the CSPs and its main components be guided by the following principles:

  • compliance with cooperation and partnership agreements and consistency with regional strategies;
  • compatibility with the objectives of the European Consensus (eradication of poverty, sustainable development, promotion of democracy, etc.);
  • consistency between the objectives of development policy and those of other policies defining relations with the partner country;
  • allowance for the diverse nature of partners, as regards both general policy and cooperation programmes, and for cross-cutting issues such as gender equality, human rights and a sustainable environment;
  • sharing of information between all concerned and complementarity between the activities of the Commission and the Member States and those of other international donors;
  • use of budget support, whether general or sectoral, for implementation;
  • focus on a limited number of areas for inclusion;
  • preparations for the strategy and programming on the basis of the partner country’s agenda;
  • a results-based approach to programming, implementation and evaluation in order to measure the impact of aid;
  • involvement of civil society, the private sector, local authorities and parliaments in drawing up and implementing the cooperation strategy;
  • regular evaluation of the performance of CSPs with a view to adjusting strategies in the light of the findings.

The essential components for CSPs

The Commission proposes that the CSPs include the following components, which, in its view, are essential:

  • the framework for relations between the donor and the partner country (including association and partnership agreements);
  • country analysis:

– the political, economic, commercial, social and environmental situation in the partner country;
– the partner country’s agenda, including the development strategy;
– the viability of the country’s current policies and medium-term strategies;

  • an overview of past and present cooperation with the donor;
  • a description of the state of the partnership with the country;
  • the donor’s cooperation strategy and specific objectives, the consistency of the strategy with other external aid instruments and policies, and complementarity with other donors;
  • a national indicative programme (NIP), i.e. a work programme covering several years and defining measurable objectives, the target groups, the programmes for achieving those objectives, the contribution to be made by the donor, the nature and scope of the support mechanisms, the results expected and an implementation timetable;
  • annexes, including a summary table for the country, a short environmental profile, a prospective donor matrix, a migration profile, an account of consultations with non-state actors and a harmonisation roadmap where there is one.

Using these components, the Commission will draw up its CSPs on the basis of a gradual approach starting immediately with the African, Caribbean and Pacific countries (ACP) and followed at a later date by Asia, Latin America, the countries covered by the European Neighbourhood Policy and Russia.

The procedure for drawing up a CSP

Joint programming must be a process that is:

  • flexible and thus able to take on different forms depending on the situation in the partner countries and on the donors and their readiness for harmonisation;
  • gradual in that it must make provision for gradual stages of integration as the situation develops;
  • open in that it should not be restricted to Member States and can merge into any existing processes aimed at introducing joint programming;
  • conducive to the partner country playing a leading role in preparing the ground and coordinating joint programming. If the country does not have that capacity, it must be given the support it needs to acquire it;
  • a forum for the Commission delegations and other development partners on the ground so as to ensure frequent exchanges between headquarters and local offices.

The stages of joint programming

The first stage of joint programming is joint analysis of the elements essential for drawing up a cooperation strategy, namely:

  • evaluation of the global political situation;
  • appraisal of the country’s macroeconomic, social and environmental background;
  • formulation of the partner country’s priorities;
  • analysis of lessons from cooperation in the past and analysis of consistency with the partner country’s other policies.

The second stage is the formulation of a joint strategic response involving:

  • joint setting of cooperation objectives with the partner country;
  • selection of focal areas, including a division of labour between the partners (donor matrix);
  • an outline of financial allocations and risk analysis, and commitments by the partner countries on the basis of a joint agreement.

Related Acts

Council conclusions on “Financing for Development and Aid Effectiveness: delivering more, better and faster”. General Affairs and External Relations Council – 11 April 2006 [Not published in the Official Journal].

The Council approves the Commission proposal concerning joint multiannual programming and adopts the benchmark model for a common framework for drawing up country strategy papers and the principles concerning joint multiannual programming.

Communication from the Commission to the Council and the European Parliament of 2 March 2006: ” Financing for Development and Aid Effectiveness – The challenges of scaling up EU aid 2006-2010″ [COM(2006) 85 final- Official Journal C 130 of 3 June 2006].

Communication from the Commission of 2 March 2006: ” EU Aid : Delivering more, better and faster” [COM(2006) 87 final – Not published in the Official Journal].