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A simplified CAP for Europe

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A simplified CAP for Europe

Outline of the Community (European Union) legislation about A simplified CAP for Europe

Topics

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

Agriculture > General framework

A simplified CAP for Europe

Document or Iniciative

Communication from the Commission to the European Parliament and the Council of 18 March 2009 – A simplified CAP for Europe – A success for all [COM(2009) 128 final – Not published in the Official Journal].

Summary

Since 2005 the Commission has taken on a number of activities which have simplified the Common Agricultural Policy (CAP) from a technical * and policy * perspective.

Technical simplification

The main technical simplifications concern:

  • the repeal of legal acts deemed to be obsolete;
  • the adoption of the Regulation establishing a common organisation of agricultural markets in 2007, better known as the ‘single CMO’. This new Regulation replaces 21 individual common organisations of the market and groups them together into one single regulation;
  • the modification and streamlining of the policy on State aid, including the adoption of the de minimis Regulation in the agricultural sector in 2007;
  • a study to measure administrative costs;
  • the creation of platforms for the sharing of best practices concerning CAP simplification.

Policy simplification

The policy-related actions concern:

  • the sugar CMO reform, which merged the various quota types into one single quota. This reform also included the budget for sugar-aid into the envelope of the Single Payment Scheme and replaced intervention by private storage;
  • the Single Payment Scheme, to make it more “farmer friendly” and to simplify its functioning;
  • reforms in the fruit and vegetables and wine sectors, which integrated these sectors into the Single Payment Scheme;
  • impact assessments and evaluations, which involve stakeholders at an early stage of the legislative process and render it more transparent. They also improve the quality of proposals and the quality of debates on proposals.

Processes followed for CAP simplification

  • stakeholder consultation, screening, Action Plan;
  • the conference organised in October 2006;
  • internal training on legislative drafting;
  • IT systems: the ISAMM system (Information System for Agricultural Market Management and Monitoring) to facilitate the electronic exchange of information between Commission services and Member States is in its final development phase.

CAP simplification Action Plan

Launched at the end of 2006, the Action Plan is based on suggestions from Member States, stakeholders, producers’ organisations and the Commission. The plan had evolved to around fifty technical simplification projects by January 2009, of which 43 have been implemented.

The projects taken up concern, in particular:

  • the abolition of licences for exports of beef without export refunds;
  • egg marketing standards;
  • the abolition of the requirement that farmers should have a parcel at their disposal for at least 10 months before being able to apply for direct payments;
  • the elimination of most of the obligations relating to import and export licences;
  • specific marketing standards concerning 26 types of fruit and vegetables;
  • an amendment of the rules on cross-compliance * (for example, advance notice for on-the-spot checks); etc.

Special focus

An important accomplishment within the context of legislative simplification of the CAP was the adoption of the Council Regulation establishing a common organisation of agricultural markets, commonly referred to as the “single CMO”. The new Regulation replaces all 21 individual common organisations of the market and groups them together into one single regulation, thereby reducing the number of articles from around 920 to around 230 and repealing a total of 78 Council acts. Finally, the single CMO facilitates further simplification and reduction of administrative burden at the level of Commission implementing provisions.

Within the context of the Action Programme for reducing Administrative Burdens, a study assessing the administrative burden on farms arising from CAP was published at the end of 2007. This study, carried out in Denmark, Germany, France, Ireland and Italy, provides an assessment of the administrative costs associated with the Single Payment Scheme in 2006 and presents an outlook on future developments. The results of the study indicate that administrative burden on farms will decrease substantially. One factor is the learning curve effect and the disappearance of the administrative costs associated with the start-up of the Single Payment Scheme. The changes decided in the Health Check are another important reason.

The Health Check of the CAP reform simplifies the provisions of the Single Payment Scheme and renders the 2003 CAP reform more efficient. In particular, it stresses the need for further decoupling of support and the abolition of several schemes such as payments for energy crops and durum wheat, etc. to reduce the administrative burden on farms. The Health Check has also simplified the rules on the modulation franchise * as well as the provisions concerning the functioning of the National Reserve and payment entitlements that originate from that reserve.

Outlook

The actions under consideration concern:

  • common starting dates for legal acts;
  • communication and conservation of information;
  • a training programme for officials which involves a farm stay;
  • harmonising cross-compliance rules;
  • improvements in quality policy;
  • more regular review of legislation;
  • continuation of the Action Plan with the addition of new projects;
  • training on writing skills, to make legislation easier to read;
  • continuation of sharing best practices.

Context

This Communication takes stock of the activities carried out since the 2005 Communication on CAP simplification. As a result of the progress made in simplifying the Common Agricultural Policy, the Commission expects to achieve its objective of reducing administrative burdens by 25% by 2012.

Key terms of the Act
  • Technical simplification: implies revision of the legal framework, administrative procedures and management mechanisms to achieve streamlining and greater cost-effectiveness and attain existing policy objectives more effectively, without changing the underlying policies.
  • Policy simplification: reduces complexity through improvements to the agricultural support and rural development policy instruments. It may be described as ‘policy development with simplification implications’.
  • Cross-compliance: the payment of certain European aid is subject to compliance with basic environmental and health requirements.
  • Modulation: an instrument introduced by the 2003 reform which allows resources intended for direct aid to farmers to be transferred to rural development measures during the period up to 2013.

The CAP towards 2020

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The CAP towards 2020

Outline of the Community (European Union) legislation about The CAP towards 2020

Topics

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

Agriculture > General framework

The CAP towards 2020

Document or Iniciative

Communication from the Commission of 18 November 2010 – The CAP towards 2020: Meeting the food, natural resources and territorial challenges of the future [COM(2010) 672 – Not published in the Official Journal].

Summary

This Communication identifies the challenges facing agriculture and the Common Agricultural Policy (CAP) in the coming years. These challenges have been identified based on past experience, the current economic situation and an extensive public debate organised in 2010.

Through this Communication, the Commission is launching themes for consideration, relating to the future of the CAP. It proposes to adapt the current CAP objectives to the new challenges which have been identified. In particular, the emphasis should be on strong, quality agricultural production, on protecting natural resources and on maintaining the agricultural sector in all EU territories.

Lastly, the Commission explains which instruments would enable the fixed objectives to be met. These instruments should enable the CAP to be greener, fairer, more efficient and more effective.

OBJECTIVES

Food security

Global demand will continue to increase in the coming decades. The EU must be in a position to respond. It is essential that the EU maintains and increases its production capacity.

European citizens want high quality and a wide choice of food products, reflecting high safety, quality and animal welfare standards. A strong agricultural sector is vital for the highly competitive food industry to remain an important part of the EU economy and trade (the EU is the leading world exporter of mostly processed and high value added agricultural products).

Natural resources

Agriculture can put pressure on the environment (water pollution, soil depletion, water shortages and loss of wildlife habitats), but it can also have positive effects (climate stability, biodiversity, landscapes and resilience to flooding).

The EU shall endeavour to limit the negative effects of agriculture and to encourage its positive contributions. The future CAP shall promote energy efficiency, carbon sequestration, biomass and renewable energy production and, more generally, innovation.

Balanced territorial development

Agriculture remains an essential driver of the rural economy in the majority of EU countries. It is necessary to maintain a competitive and dynamic agricultural sector which attracts young farmers in order to preserve the vitality and potential of rural Europe.

INSTRUMENTS

Direct payments

In order to achieve the objectives stated above, the Commission plans to adapt the direct payments system to ensure that payments are better distributed and targeted.

It is proposed that future direct payments should support farmers’ basic income through the granting of a basic decoupled direct payment, with an upper ceiling, targeting of ‘active farmers’, a simple support system for small farmers and the consideration of areas with specific natural constraints.

The Commission proposes to improve the grant criteria relating to the environment through a mandatory ‘greening’ component of direct payments targeted at agricultural practices which address climate change and environmental objectives (permanent pasture, green cover, crop rotation, ecological set-aside, etc.).

Market measures

The Commission specifies that the CAP should keep the overall market orientation of agriculture while also maintaining the management tools which have demonstrated the important role they play in times of crisis or disruption. In the coming years, certain agricultural markets must evolve, in particular the regime currently in place in the sugar sector which is due to expire in 2014/2015.

The Commission believes that more general measures must be taken in order to improve the functioning of the food supply chain, which should be more transparent and within which bargaining power should be more balanced.

Rural development policy

Lastly, the Commission highlights the importance of the rural development policy which the EU carries out through the CAP. It proposes to strengthen the environmental element and to improve coordination of this policy with other European policies.

The Commission proposes to focus on the competitiveness of agriculture by encouraging innovation, promoting good management of natural resources and supporting balanced territorial development balance by encouraging local initiatives.

As well as enhancing the promotion and quality optimisation tools, the Commission believes that a risk management toolkit should be included to deal more effectively with income uncertainties and market volatility.

Risk and crisis management in agriculture

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Risk and crisis management in agriculture

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

Topics

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.

Financing the common agricultural policy

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Financing the common agricultural policy

Outline of the Community (European Union) legislation about Financing the common agricultural policy

Topics

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

Agriculture > General framework

Financing the common agricultural policy

Document or Iniciative

Council Regulation (EC) No 1290/2005 of 21 June 2005 on the financing of the common agricultural policy [See amending acts].

Summary

This Regulation establishes a single legal framework for financing CAP spending, creating two new funds: the European Agricultural Guarantee Fund (EAGF) and the European Agricultural Fund for Rural Development (EAFRD). Although operating in a similar fashion, each has certain specific features. Since some of the measures financed by these funds are those managed jointly with Member States, the Regulation sets out conditions under which the Commission may exercise its responsibilities for implementing the general budget and clarifies the areas in which Member States are obliged to cooperate.

The Regulation lays down the conditions under which Member States can accredit and withdraw accreditation from paying agencies and coordinating bodies. The agencies are responsible for making payments, whilst the bodies monitor the accounting carried out by the paying agencies. It also provides for the creation of certification bodies, public or private legal bodies appointed by the Member States which are responsible for certifying the management, monitoring and control systems implemented by the accredited paying agencies and the agencies’ annual accounts. The Member States are asked to take all necessary steps to effectively protect the financial interests of the Community. In addition, only expenditure incurred by accredited paying agencies will be financed by the Community and payments will be made in full to the beneficiaries.

EAGF

As regards expenditure managed jointly by the Member States and the Commission, the EAGF finances:

  • refunds for exporting farm produce to non-EU countries;
  • intervention measures to regulate agricultural markets;
  • direct payments to farmers under the CAP;
  • certain informational and promotional measures for farm produce implemented by Member States both on the internal EU market and outside it;
  • expenditure on restructuring measures in the sugar industry under Council Regulation (EC) No 320/2006;
  • programmes promoting the consumption of fruit in schools.

As regards expenditure managed centrally by the Commission, EAGF financing covers:

  • the Community’s financial contribution for specific veterinary measures, veterinary inspection and inspections of foodstuffs and animal feed, animal disease eradication and control programmes and plant-health measures;
  • promotion of farm produce, either directly by the Commission or via international organisations;
  • measures required by Community legislation to conserve, characterise, collect and use genetic resources in farming;
  • setting up and running farm accounting information systems;
  • farm survey systems;
  • expenditure relating to fisheries markets.

The monies to cover expenditure financed by the EAGF are paid by the Commission to the Member States in the form of monthly reimbursements. These are made on the basis of a declaration of expenditure and other information provided by the Member States. If funds are committed without following the Community rules, the Commission may decide to reduce or suspend payments.

The Commission sets the net balance available for EAGF spending and will put in place a monthly early-warning and monitoring system for such spending. Every month, it will present the Parliament and Council with a report examining spending trends in relation to the profiles set at the beginning of the financial year and assessing how these are likely to develop in the current year.

Any amounts recovered as a result of irregularities or negligence are paid to the paying agencies, which must book them in the month they are actually received as revenue earmarked for EAGF spending only.

EAFRD

The EAFRD finances rural development programmes implemented in accordance with Council Regulation (EC) No 1698/2005 solely where expenditure is jointly managed.

The budget commitments for this purpose will be made annually in the form of prefinancing, interim payments and payment of the final balance. Interim payments will be made for each rural development programme subject to the budget funding available within the ceiling limits established by Community legislation and the increased amounts laid down by the Commission in applying provisions laid down for direct payments to farmers and for the wine market. These payments will be made subject to certain conditions: for example, the Commission must be sent a declaration of expenditure and a payment claim certified by the accredited paying agency. If this declaration does not comply with the Community standards, the Commission may reduce or suspend payments.

In the event of any irregularities, Community financing will be totally or partially cancelled or, if the monies in question have already been paid to the beneficiary, they will be recovered by the accredited paying agency. The cancelled or recovered amounts may be used by the Member State for a different operation planned under the same rural development programme.

As regards payment of the balance, this is not made until the Commission has received the final implementing report on the implementation of a rural development programme and the corresponding clearance decision. If the necessary documents are not sent to the Commission, the balance will be automatically decommitted.

Commission controls

The Commission will ensure that the financial management of the Community Funds is sound, mainly through a two-stage clearance procedure: clearance of accounts and conformity clearance. The Member States must keep for the Commission all the information needed for the smooth running of the Funds. To supplement checks made by the Member States under national legislation, the Commission may organise on-site audits of its own. Payments made to a Member State under the EAGF and EAFRD may be reduced or suspended where certain serious and persistent deficiencies are detected.

The names of the beneficiaries of the Agricultural Funds, and the amounts they have received, must be made public after payment has been made.

References

Act Entry into force Deadline for transposition in the Member States Official Journal
Regulation (EC) No 1290/2005

18.8.2005

–

 OJ L 209 of 11.8.2005
Amending act(s) Entry into force Deadline for transposition in the Member States Official Journal
Regulation (EC) No 320/2006

3.3.2006

–

OJ L 58 of 28.2.2006
Regulation (EC) No 378/2007

12.4.2007

–

OJ L 95 of 5.4.2007
Regulation (EC) No 1437/2007

15.12.2007

–

OJ L 322 of 7.12.2007
Regulaton (EC) No 479/2008

13.6.2008

–

OJ L 148 of 6.6.2008
Regulation (EC) No 13/2009

16.1.2009

–

OJ L 5 of 9.1.2009
Regulation (EC) No 73/2009

1.2.2009

–

OJ L 30 of 31.1.2009
Regulation (EC) No 473/2009

9.6.2009

–

OJ L 144 of 9.6.2009

Successive amendments and corrections to Regulation (EC) No 1290/2005 have been incorporated into the basic text. This consolidated versionis for reference only.

RELATED ACTS

Available amounts and excluded expenditure

Decision 2008/321/EC [Official Journal L 109 of 19.4.2008].

This Decision contains a list of expenditure items excluded from Community financing because they do not comply with the CAP financing rules. The exclusion of such expenditure items, incurred by the paying agencies of certain Member States between 2002 and 2007, is a consequence of verifications, bilateral discussions and conciliation procedures and entails the deduction of the amounts concerned.

Decision 2009/379/EC [Official Journal L 117 of 12.5.2009].

The Decision lays down the amounts made available to the EAFRD and EAGF for the period 2007-2013.

Detailed rules for application

Regulation (EC) No 883/2006 [Official Journal L 171 of 23.6.2006].

This Regulation lays down detailed rules for the application of Council Regulation (EC) No 1290/2005 as regards the keeping of accounts by the paying agencies, declarations of expenditure and revenue and the conditions for reimbursing expenditure under the EAGF and the EAFRD.
See consolidated version .

Regulation (EC) No 884/2006[Official Journal L 171 of 23.6.2006].

This Regulation lays down detailed rules for the application of Council Regulation (EC) No 1290/2005 as regards the financing by the European Agricultural Guarantee Fund (EAGF) of intervention measures in the form of public storage operations and the accounting of public storage operations by the paying agencies of the Member States.
See consolidated version .

Regulation (EC) No 885/2006 [Official Journal L 171 of 23.6.2006].

This Regulation lays down detailed rules for the application of Council Regulation (EC) No 1290/2005 as regards the accreditation of paying agencies and other bodies and the clearance of the accounts of the EAGF and of the EAFRD.
See consolidated version .

Regulation (EC) No 259/2008 [Official Journal L 76 of 19.3.2008].

This Regulation lays down detailed rules for the application of Regulation (EC) No 1290/2005 as regards the publication of information on the beneficiaries of funds deriving from the EAGF and the EAFRD. This information must be published on a single website by 30 April of each year and must include beneficiaries’ personal details and the amounts received.

Clearance of accounts

Regulation (EC) No 941/2008 [Official Journal L 258 of 9.10.2009].

This Regulation lays down the form and content of the accounting information to be submitted to the Commission for the purpose of the clearance of the accounts of the EAGF and EAFRD, as well as for monitoring and forecasting purposes.

Decision 2009/373/EC [Official Journal L 116 of 9.5.2009].

This Decision presents the clearance of the accounts of the paying agencies of Member States concerning expenditure financed by the EAFRD for the 2008 financial year.

Decision 2009/367/EC [Official Journal L111 of 5.5.2009].

This Decision presents the clearance of the accounts of the paying agencies of Member States concerning expenditure financed by the EAGF for the 2008 financial year.

Irregularities, fraud and recovery

Regulation (EC) No 1848/2006 [Official Journal L 355 of 15.12.2006].

This act sets out information and investigation measures to be taken by the Member States in cases of fraud in connection with the financing of the CAP and sets up an information system in this field.

Surveys

Regulation (EC) No 78/2008 [Official Journal L 25 of 30.1.2008].

This act relates to the measures to be undertaken by the Commission in 2008-2013 making use of the remote-sensing applications developed within the framework of the common agricultural policy.

Another Normative about Financing the common agricultural policy

Topics

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

Regional policy > Provisions and instruments of regional policy

Financing the common agricultural policy

Document or Iniciative

Council Regulation (EC) No 1290/2005 of 21 June 2005 on the financing of the common agricultural policy [See amending acts].

Summary

This Regulation establishes a single legal framework for financing CAP spending, creating two new funds: the European Agricultural Guarantee Fund (EAGF) and the European Agricultural Fund for Rural Development (EAFRD). Although operating in a similar fashion, each has certain specific features. Since some of the measures financed by these funds are those managed jointly with Member States, the Regulation sets out conditions under which the Commission may exercise its responsibilities for implementing the general budget and clarifies the areas in which Member States are obliged to cooperate.

The Regulation lays down the conditions under which Member States can accredit and withdraw accreditation from paying agencies and coordinating bodies. The agencies are responsible for making payments, whilst the bodies monitor the accounting carried out by the paying agencies. It also provides for the creation of certification bodies, public or private legal bodies appointed by the Member States which are responsible for certifying the management, monitoring and control systems implemented by the accredited paying agencies and the agencies’ annual accounts. The Member States are asked to take all necessary steps to effectively protect the financial interests of the Community. In addition, only expenditure incurred by accredited paying agencies will be financed by the Community and payments will be made in full to the beneficiaries.

EAGF

As regards expenditure managed jointly by the Member States and the Commission, the EAGF finances:

  • refunds for exporting farm produce to non-EU countries;
  • intervention measures to regulate agricultural markets;
  • direct payments to farmers under the CAP;
  • certain informational and promotional measures for farm produce implemented by Member States both on the internal EU market and outside it;
  • expenditure on restructuring measures in the sugar industry under Council Regulation (EC) No 320/2006;
  • programmes promoting the consumption of fruit in schools.

As regards expenditure managed centrally by the Commission, EAGF financing covers:

  • the Community’s financial contribution for specific veterinary measures, veterinary inspection and inspections of foodstuffs and animal feed, animal disease eradication and control programmes and plant-health measures;
  • promotion of farm produce, either directly by the Commission or via international organisations;
  • measures required by Community legislation to conserve, characterise, collect and use genetic resources in farming;
  • setting up and running farm accounting information systems;
  • farm survey systems;
  • expenditure relating to fisheries markets.

The monies to cover expenditure financed by the EAGF are paid by the Commission to the Member States in the form of monthly reimbursements. These are made on the basis of a declaration of expenditure and other information provided by the Member States. If funds are committed without following the Community rules, the Commission may decide to reduce or suspend payments.

The Commission sets the net balance available for EAGF spending and will put in place a monthly early-warning and monitoring system for such spending. Every month, it will present the Parliament and Council with a report examining spending trends in relation to the profiles set at the beginning of the financial year and assessing how these are likely to develop in the current year.

Any amounts recovered as a result of irregularities or negligence are paid to the paying agencies, which must book them in the month they are actually received as revenue earmarked for EAGF spending only.

EAFRD

The EAFRD finances rural development programmes implemented in accordance with Council Regulation (EC) No 1698/2005 solely where expenditure is jointly managed.

The budget commitments for this purpose will be made annually in the form of prefinancing, interim payments and payment of the final balance. Interim payments will be made for each rural development programme subject to the budget funding available within the ceiling limits established by Community legislation and the increased amounts laid down by the Commission in applying provisions laid down for direct payments to farmers and for the wine market. These payments will be made subject to certain conditions: for example, the Commission must be sent a declaration of expenditure and a payment claim certified by the accredited paying agency. If this declaration does not comply with the Community standards, the Commission may reduce or suspend payments.

In the event of any irregularities, Community financing will be totally or partially cancelled or, if the monies in question have already been paid to the beneficiary, they will be recovered by the accredited paying agency. The cancelled or recovered amounts may be used by the Member State for a different operation planned under the same rural development programme.

As regards payment of the balance, this is not made until the Commission has received the final implementing report on the implementation of a rural development programme and the corresponding clearance decision. If the necessary documents are not sent to the Commission, the balance will be automatically decommitted.

Commission controls

The Commission will ensure that the financial management of the Community Funds is sound, mainly through a two-stage clearance procedure: clearance of accounts and conformity clearance. The Member States must keep for the Commission all the information needed for the smooth running of the Funds. To supplement checks made by the Member States under national legislation, the Commission may organise on-site audits of its own. Payments made to a Member State under the EAGF and EAFRD may be reduced or suspended where certain serious and persistent deficiencies are detected.

The names of the beneficiaries of the Agricultural Funds, and the amounts they have received, must be made public after payment has been made.

References

Act Entry into force Deadline for transposition in the Member States Official Journal
Regulation (EC) No 1290/2005

18.8.2005

–

 OJ L 209 of 11.8.2005

Amending act(s) 		Entry into force Deadline for transposition in the Member States Official Journal
Regulation (EC) No 320/2006

3.3.2006

–

OJ L 58 of 28.2.2006
Regulation (EC) No 378/2007

12.4.2007

–

OJ L 95 of 5.4.2007
Regulation (EC) No 1437/2007

15.12.2007

–

OJ L 322 of 7.12.2007
Regulaton (EC) No 479/2008

13.6.2008

–

OJ L 148 of 6.6.2008
Regulation (EC) No 13/2009

16.1.2009

–

OJ L 5 of 9.1.2009
Regulation (EC) No 73/2009

1.2.2009

–

OJ L 30 of 31.1.2009
Regulation (EC) No 473/2009

9.6.2009

–

OJ L 144 of 9.6.2009

Successive amendments and corrections to Regulation (EC) No 1290/2005 have been incorporated into the basic text. This consolidated versionis for reference only.

RELATED ACTS

Available amounts and excluded expenditure

Decision 2008/321/EC [Official Journal L 109 of 19.4.2008].

This Decision contains a list of expenditure items excluded from Community financing because they do not comply with the CAP financing rules. The exclusion of such expenditure items, incurred by the paying agencies of certain Member States between 2002 and 2007, is a consequence of verifications, bilateral discussions and conciliation procedures and entails the deduction of the amounts concerned.

Decision 2009/379/EC [Official Journal L 117 of 12.5.2009].

The Decision lays down the amounts made available to the EAFRD and EAGF for the period 2007-2013.

Detailed rules for application

Regulation (EC) No 883/2006 [Official Journal L 171 of 23.6.2006].

This Regulation lays down detailed rules for the application of Council Regulation (EC) No 1290/2005 as regards the keeping of accounts by the paying agencies, declarations of expenditure and revenue and the conditions for reimbursing expenditure under the EAGF and the EAFRD.
See consolidated version .

Regulation (EC) No 884/2006[Official Journal L 171 of 23.6.2006].

This Regulation lays down detailed rules for the application of Council Regulation (EC) No 1290/2005 as regards the financing by the European Agricultural Guarantee Fund (EAGF) of intervention measures in the form of public storage operations and the accounting of public storage operations by the paying agencies of the Member States.
See consolidated version .

Regulation (EC) No 885/2006 [Official Journal L 171 of 23.6.2006].

This Regulation lays down detailed rules for the application of Council Regulation (EC) No 1290/2005 as regards the accreditation of paying agencies and other bodies and the clearance of the accounts of the EAGF and of the EAFRD.
See consolidated version .

Regulation (EC) No 259/2008 [Official Journal L 76 of 19.3.2008].

This Regulation lays down detailed rules for the application of Regulation (EC) No 1290/2005 as regards the publication of information on the beneficiaries of funds deriving from the EAGF and the EAFRD. This information must be published on a single website by 30 April of each year and must include beneficiaries’ personal details and the amounts received.

Clearance of accounts

Regulation (EC) No 941/2008 [Official Journal L 258 of 9.10.2009].

This Regulation lays down the form and content of the accounting information to be submitted to the Commission for the purpose of the clearance of the accounts of the EAGF and EAFRD, as well as for monitoring and forecasting purposes.

Decision 2009/373/EC [Official Journal L 116 of 9.5.2009].

This Decision presents the clearance of the accounts of the paying agencies of Member States concerning expenditure financed by the EAFRD for the 2008 financial year.

Decision 2009/367/EC [Official Journal L111 of 5.5.2009].

This Decision presents the clearance of the accounts of the paying agencies of Member States concerning expenditure financed by the EAGF for the 2008 financial year.

Irregularities, fraud and recovery

Regulation (EC) No 1848/2006 [Official Journal L 355 of 15.12.2006].

This act sets out information and investigation measures to be taken by the Member States in cases of fraud in connection with the financing of the CAP and sets up an information system in this field.

Surveys

Regulation (EC) No 78/2008 [Official Journal L 25 of 30.1.2008].

This act relates to the measures to be undertaken by the Commission in 2008-2013 making use of the remote-sensing applications developed within the framework of the common agricultural policy.

Common organisation of the sugar market

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Common organisation of the sugar market

Outline of the Community (European Union) legislation about Common organisation of the sugar market

Topics

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

Agriculture > Markets for agricultural products

Common organisation of the sugar market

The common organisation of the market in sugar improves the competitiveness of the sector, thereby ensuring its long-term sustainability. It will remain in place until 30 September 2008.

Document or Iniciative

Council Regulation (EC) No 318/2006 of 20 February 2006 on the common organisation of the markets in the sugar sector [See amending acts].

Summary

From 1 October 2008, products falling within the scope of this Regulation will be covered by the common organisation of agricultural markets (CMO).

This Regulation introduces a substantial reform of the common organisation of the sugar market, which was previously governed by Regulation (EC) No 1260/2001.

This common organisation of the market provides for intervention on the internal market, including the fixing of reference prices and production quotas, and for certain support measures for European products when they are traded on international markets.

Scope

The common organisation of the sugar market applies to:

  • sugar beet;
  • sugar cane;
  • cane sugar, beet sugar and sugar from other origins;
  • syrup, including sugar syrup, maple syrup, inulin syrup and isoglucose syrup;
  • molasses.

INTERNAL MARKET

Prices

The reference prices for white sugar are as follows:

  • 631.90 per tonne for the 2006/07 and 2007/08 marketing years;
  • 541.50 per tonne for the 2008/09 marketing year;
  • 404.40 per tonne from the 2009/10 marketing year onwards.

The reference prices for raw sugar are as follows:

  • 496.80 per tonne for the 2006/07 and 2007/08 marketing years;
  • 448.80 per tonne for the 2008/09 marketing year;
  • 335.20 per tonne from the 2009/10 marketing year onwards.

Price levels for the sugar market will be publicised by means of an information system via which data provided by operators in the sector are collected and processed.

The minimum price for quota beet is set at:

  • 32.86 per tonne for the 2006/07 marketing year;
  • 29.78 per tonne for the 2007/08 marketing year;
  • 27.83 per tonne for the 2008/09 marketing year;
  • 26.29 per tonne from the 2009/10 marketing year onwards.

Interprofessional agreements

Community growers and Community sugar undertakings set the terms for buying sugar beet and sugar cane by concluding agreements within the trade. Delivery contracts have to draw a distinction between beets used to manufacture quota sugar and beets used to manufacture out-of-quota sugar. Each sugar undertaking must provide the Member State in which it produces sugar with information on quantities of beet and yield. If no agreements within the trade exist, the Member State concerned will take the necessary steps to protect the interests of the parties concerned.

Quota production

National and regional production quotas for sugar, isoglucose and inulin syrup are laid down for each marketing year (for the 2007/08 marketing year, see Regulation (EC) No 247/2007). A production quota is then allocated to each sugar-producing undertaking which may, by 30 September 2007 at the latest, request an additional quota from the Member State in which it is established. In this way, the Member State decides on the quantities acceptable to it and collects a single amount of 730 for each tonne of additional quota allocated.

In each of the marketing years 2007/08 and 2008/09, a further isoglucose quota of 100 000 tonnes will be added to the quota of the preceding marketing year (this increase does not involve either Romania or Bulgaria).

Following the implementation of Regulation (EC) No 320/2006 establishing a temporary scheme for the restructuring of the sugar industry in the European Community, the Commission has reduced the existing quotas for sugar, isoglucose and inulin syrup on two occasions (by Regulations (EC) Nos 2011/2006 and 247/2007). The Member States have adjusted the quotas allocated to their undertakings accordingly.

In some circumstances (the conditions to be satisfied are laid down in Annex V to this Regulation) a Member State may reduce the sugar or isoglucose quota allocated to undertakings established on its national territory and transfer quotas between undertakings.

Out-of-quota production

The sugar, isoglucose or inulin syrup produced during a marketing year in excess of the quota may be:

  • used in the manufacture of certain products such as bioethanol, alcohol, rum or specific pharmaceutical products;
  • carried forward to the next marketing year. In such cases, the undertakings must inform the Member State and also undertake to store at their own cost the quantities carried forward;
  • used for the specific supply arrangements for the outermost regions;
  • exported, within the established quantitative limits and in compliance with the commitments resulting from international agreements;
  • subjected to a surplus-amount levy by Member States.

Market management

From the 2007/08 marketing year onwards, Member States will levy a production charge on sugar-producing undertakings. This charge is set at 12 per tonne of sugar and inulin syrup. For isoglucose, the production charge is set at 50% of the charge applicable to sugar.

The Member States must grant an approval to producers or processors of sugar, isoglucose or inulin syrup, provided they meet certain conditions, such as proving their professional capacity. These undertakings are to provide the Member State with information about provisional and actual sales of their sugar products.

Private storage aid for white sugar may be granted to undertakings which are allocated a sugar quota if the market price falls below the reference price for a representative period and if it is likely to remain at that level. Up until the 2010 marketing year, the intervention agency will buy in up to 600 000 tonnes of sugar per marketing year provided that the sugar has been produced under quota and manufactured from beet or cane harvested in the Community. In addition, it must have formed the subject of a storage contract concluded between the seller and the intervention agency. Generally speaking, the intervention agency may only sell the sugar at a price higher than the reference price set for the marketing year in question. However, in some circumstances, it may be permissible to sell the sugar at a price lower than or equal to the reference price.

A percentage of sugar, isoglucose or inulin syrup under quota may be withdrawn from the market up to the start of the following marketing year in order to maintain the structural balance of the market at a price level that is close to the reference price. The quantities of sugar in question will be stored by undertakings that have been allocated a quota. If the sugar supply in the Community is inadequate, it may be decided that a certain quantity of these products may be sold on the Community market before the end of the withdrawal period. The sugar withdrawn from the market may be treated as the first sugar production of the following marketing year – in this case, beet growers will receive the minimum price set for the marketing year in question.

TRADE WITH NON-EU MEMBER COUNTRIES

Common provisions on imports and exports

As a general rule, in trade with Non-EU Member Countries, the levying of any charge having equivalent effect to a customs duty and the application of any quantitative restriction or measure having equivalent effect are prohibited.

Imports and exports of sugar products (except for the waste produced by sugar undertakings) are subject to presentation of an import or export licence. The licence is issued by the Member States and is valid throughout the European Community.

In certain circumstances, the use of inward processing arrangements for sugar products may be prohibited.

Safeguard measures may be applied in cases where trade with Non-EU Member Countries threatens to disrupt the balance on the Community market. The Commission, acting at the request of a Member State or on its own initiative, will decide on the necessary measures, which will remain in place until the threat has subsided.

Provisions applicable to imports

The rates of import duty in the Common Customs Tariff apply to sugar products. However, in order to ensure that the Community market is adequately supplied, the Commission may suspend in whole or in part for certain quantities the application of import duties on certain products.

Imports of products covered by this Regulation may be subject to an additional import duty to protect the Community market against possible adverse effects. This duty may be imposed during a year in which the Community market is likely to experience such effects or when imports are made at a price below the level notified by the Community to the WTO.

The Commission opens and manages tariff quotas for sugar products in a way that avoids any discrimination between the operators concerned. To achieve this, various methods are applied, such as processing applications in chronological order (“first come, first served”), or distributing quotas in proportion to the quantities requested in applications.

The refining sector’s traditional supply need for sugar, expressed in white sugar, is set for the Community as a whole at 2 324 735 tonnes per marketing year and is distributed among the Member States. During the 2006/07, 2007/08 and 2008/09 marketing years, this need is distributed as follows (tonnes):

  • Bulgaria: 198 748
  • France: 296 627
  • Portugal: 291 633
  • Romania: 329 636
  • Slovenia: 19 585
  • Finland: 59 925
  • United Kingdom: 1 128 581

Guaranteed prices set for sugar originating in the African, Caribbean and Pacific (ACP) countries and India apply to imports of standard quality raw sugar and white sugar originating in certain countries (listed in Annex VI to this Regulation and in Regulation (EC) No 980/2005). These countries must certify that the products covered by the guaranteed price comply with the rules laid down in the relevant international agreements.

Measures may be taken to ensure that imports of sugar into the Community from the ACP countries and India are carried out under the conditions laid down in the Protocol to the ACP-EC Partnership Agreement and in the Agreement on cane sugar between the European Community and the Republic of India.

Provisions applicable to exports

Export refunds may be granted to cover the difference between sugar prices on the world market and sugar prices in the Community. The quantities of sugar benefiting from these refunds are set using various methods which take into account the nature of the product, the situation on the market and administrative efficiency. Export refunds may be set at regular intervals or by invitation to tender.

Export restrictions may be applied when the quotations or prices of a product reach a level which threatens to disrupt supplies on the Community market, and where this situation is likely to deteriorate.

Other provisions

Further measures may be taken if there is a significant change in prices on the Community market and if all measures laid down by this Regulation have been exhausted and the situation is likely to continue to disrupt the market.

The Management Committee for Sugar assists the Commission in dealing with administrative aspects of the common organisation of the sugar market.

Background

The first common organisation of the sugar market was established by Council Regulation No 44/67/EEC in 1967. Since entering into force it has been reformed on several occasions, in 1974, 1981, 1999 and 2001. The reform introduced by the current Regulation in 2006 reduces the minimum guaranteed price and encourages unprofitable growers to cease farming. It also includes Council Regulations (EC) Nos 319/2006 and 320/2006, both adopted on the same day as the current Regulation, which establish the temporary restructuring fund.

References

Act Entry into force – Date of expiry Deadline for transposition in the Member States Official Journal
Regulation (EC) No 318/2006 3.3.2006 – OJ L 58, 28.2.2006
Amending act(s) Entry into force Deadline for transposition in the Member States Official Journal
Regulation (EC) No 1585/2006 28.10.2006 – OJ L 294, 25.10.2006
Regulation (EC) No 2011/2006 1.1.2007 – OJ L 384, 29.12.2006
Regulation (EC) No 247/2007 12.3.2007 – OJ L 69, 9.3.2007
Regulation (EC) No 1182/2007 6.11.2007 – OJ L 273, 17.10.2007
Regulation (EC) No 1260/2007 30.10.2007 – OJ L 283, 27.10.2007

Successive amendments and corrections to Regulation (EC) No 318/2006 have been incorporated into the basic text. This consolidated version (pdf ) is intended purely as a documentation tool.

Related Acts

Detailed implementing rules

Commission Regulation (EC) No 950/2006 of 28 June 2006 laying down detailed rules of application for the 2006/2007, 2007/2008 and 2008/2009 marketing years for the import and refining of sugar products under certain tariff quotas and preferential agreements [Official Journal L 178, 1.7.2006].
See consolidated version (pdf ).

Commission Regulation (EC) No 951/2006 of 30 June 2006 laying down detailed rules for the implementation of Council Regulation (EC) No 318/2006 as regards trade with Non-EU Member Countries in the sugar sector [Official Journal L 178, 1.7.2006].
See consolidated version (pdf ).

Commission Regulation (EC) No 952/2006 of 29 June 2006 laying down detailed rules for the application of Council Regulation (EC) No 318/2006 as regards the management of the Community market in sugar and the quota system [Official Journal L 178, 1.7.2006].
See consolidated version (pdf ).

Commission Regulation (EC) No 967/2006 of 29 June 2006 laying down detailed rules for the application of Council Regulation (EC) No 318/2006 as regards sugar production in excess of the quota [Official Journal L 176, 30.6.2006].
See consolidated version (pdf ).

Regulations complementing the 2006 reform of the common organisation of the sugar market

Regulation(EC) No 320/2006 [Official Journal L 58, 28.2.2006].

This Regulation establishes a temporary restructuring fund to finance restructuring and diversification measures in the sugar industry. It lays down the requirements which undertakings in this sector must satisfy in order to qualify for aid under this fund.
See consolidated version (pdf ).

Regulation(EC) No 319/2006 [Official Journal L 58, 28.2.2006].
This Regulation lays down rules for granting Community aid to sugar beet and cane growers in Member States eligible for restructuring aid under Regulation No 320/2006. It amends the rules laid down in Regulation No 1782/2003 in relation to support schemes in the sugar sector.
See consolidated version (FR ) (pdf).

International context

International Sugar Agreement 1992 [Official Journal L 379, 23.12.1992].
This Agreement lays down rules for the operation of the International Sugar Organisation, of which the European Community is one of the main members. In April 2007, the Council of the European Union agreed to vote in favour of extending this Agreement (Decision 2007/316/EC).

Hops

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Hops

Outline of the Community (European Union) legislation about Hops

Topics

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

Agriculture > Markets for agricultural products

Hops

This Regulation establishes a common organisation of the market (CMO) in hops. It includes rules on marketing, producer groups and trade with third countries. The aid scheme for this product is governed by the Mediterranean package which complements the major reform of the Common Agricultural Policy (CAP) in June 2003 by laying down provisions relating to the hops, cotton, olive groves and tobacco sectors. The CMO will remain in force until 30 June 2008.

Document or Iniciative

Council Regulation (EC) No 1952/2005 of 23 November 2005 concerning the common organisation of the market in hops and repealing Regulations (EEC) No 1696/71, (EEC) No 1037/72, (EEC) No 879/73 and (EEC) No 1981/82.

Summary

From 1 July 2008 products falling within the scope of this Regulation will be governed by the common organisation of agricultural markets.

This Regulation lays down rules on marketing, producer groups and trade with third countries in the hops sector. The ‘Mediterranean package’ provides for specific aid measures for this sector.

This Regulation covers the dried inflorescences – cones – of the (female) climbing hop plant, hop powder, hop powder with higher lupulin content, vegetable saps and extracts of hops.

Marketing

Hops harvested or prepared within the Community are subject to a certification procedure. The certificate, indicating at least the place of production of the hops, the year of harvesting and the variety, may be issued only for products having the minimum quality characteristics appropriate to a specific stage of marketing. Products may be marketed and exported only by those in possession of a certificate.

Producer Groups

Producers may form a group to achieve one of the following objectives:

  • concentrating supply and helping to stabilise the market by marketing all the produce of the members or, if necessary, by purchasing hops at a higher price;
  • adapting such production jointly to the requirements of the market and improving the product;
  • promoting the rationalisation and mechanisation of cultivation and harvesting operations in order to render production more profitable and better protect the environment;
  • deciding what varieties of hops may be grown by its members and adopting common rules on production.

The Member State within whose territory the producer group has its registered office is responsible for recognising producer groups which request recognition and fulfil a number of conditions. To be recognised, a group must, for instance, have legal personality or sufficient legal capacity to be subject, under national legislation, to rights and obligations, provide proof of economically viable activity and not hold a dominant position in the Community.

Trade with third countries

The rates of import duty in the common customs tariff apply to the products covered by this Regulation. These may be imported only if their quality standards are at least equivalent to those adopted for like products harvested within the Community or made from such products. Only in this case do products receive an attestation issued by the authorities of the country of origin which has the same value as the Community certificate.

The general rules for the interpretation of the Combined Nomenclature and the detailed rules for its implementation apply to the tariff classification of products covered by this Regulation.

In trade with third countries, the levying of any charge having equivalent effect to a customs duty and the application of any quantitative restriction or measure having equivalent effect are prohibited.

Safeguard

If, by reason of imports or exports, the Community market in one or more of the products covered by this Regulation is affected by, or is threatened with, serious disturbance, appropriate measures may be applied in trade with non-member countries of the World Trade Organisation (WTO) until such disturbance or threat of it has ceased. In this case the Commission, at the request of a Member State or on its own initiative, decides upon the necessary measures. If a Member State refers these measures to the Council, it must meet immediately and may amend or repeal them.

In cases where there is a danger of creating surpluses or of a disturbance in the supply structure of the market, the Council, acting by a qualified majority on a proposal from the Commission, may take appropriate measures to prevent market imbalance. Such measures may take the form of action affecting the production potential, the volume of supply and the marketing conditions.

Supply contracts

Any contract to supply hops produced within the Community concluded between one or more producers and a buyer is to be registered by the bodies designated for that purpose by each producer Member State concerned. The data on which registration is based may be used only for the purposes of this Regulation.

The Commission is to be assisted by a Management Committee for Hops [FR].

References

Act
Entry into force
Deadline for transposition in the Member States
Official Journal
Regulation (EC) No 1952/2005 7.12.2005 – OJ L 314, 30.11.2005

Related Acts

Commission Regulation (EC) No 1299/2007 of 6 November 2007 on the recognition of producer groups for hops (Codified version) [Official Journal L 289 of 7.11.2007].

Commission Regulation (EC) No 1557/2006 of 18 October 2006 laying down detailed rules for implementing Council Regulation (EC) No 1952/2005 as regards registration of contracts and the communication of data concerning hops [Official Journal L 288 of 19.10.2006].

Commission Regulation (EC) No 1850/2006 of 14 December 2006 laying down detailed rules for the certification of hops and hop products [Official Journal L 355 of 15.12.2006].

Seeds

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Seeds

Outline of the Community (European Union) legislation about Seeds

Topics

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

Agriculture > Markets for agricultural products

Seeds

This Regulation establishes a common organisation of the market (CMO) in seeds. It includes rules on the marketing of seeds and on trade with third countries. The CMO will operate until 30 June 2008.

Document or Iniciative

Council Regulation (EC) No 1947/2005 of 23 November 2005 on the common organisation of the market in seeds and repealing Regulations (EEC) No 2358/71 and (EEC) No 1674/72.

Summary

From 1 July 2008 products falling within the scope of this Regulation will be governed by the common organisation of agricultural markets.

This Regulation defines the conditions for the marketing of, and trade with third countries in, sweetcorn hybrids, peas and chickpeas, beans, lentils, broad beans and other leguminous vegetables, spelt, hybrid maize, rice in the husk, sorghum, soya beans, groundnuts, linseed, rape or colza seeds, sunflower seeds, other oil seeds and oleaginous fruits, and seeds, fruit and spores, of a kind used for sowing.

TRADE WITH THIRD COUNTRIES

Imports of seeds may be subject to the presentation of an import licence. Import licences are to be issued by the Member States to any persons who so request, irrespective of their place of establishment in the Community. Licences will be valid for imports carried out anywhere in the Community and their issue will be subject to the lodging of a security guaranteeing that the products are imported during the validity period of the licence.

The rates of import duty in the Common Customs Tariff are to apply to the products covered by this Regulation.

The general rules for the interpretation of the Combined Nomenclature and the detailed rules for its implementation are to apply to the tariff classification of products covered by this Regulation.

In trade with third countries, the levying of any charge having equivalent effect to a customs duty and the application of any quantitative restriction or measure having equivalent effect are prohibited.

Safeguard

If, by reason of imports or exports, the Community market in one or more of the products listed in this Regulation is affected by, or is threatened with, serious disturbance, appropriate measures may be applied in trade with non-member countries of the World Trade Organisation (WTO) until such disturbance or threat of it has ceased. In such cases, the Commission, at the request of a Member State or on its own initiative, is to decide upon the necessary measures. Where a Member State refers such measures to the Council, it is to meet immediately and may amend or repeal the measures in question.

The Treaty’s provisions on state aid are to apply to seeds. However, Finland may, subject to authorisation by the Commission, grant aid respectively for certain quantities of seeds and for certain quantities of cereal seed.

The Commission is to be assisted by the Management Committee for Seeds [FR].

References

Act Entry into force Deadline for transposition in the Member States Official Journal
Regulation (EC) No 1947/2005 Applicable from 1 July 2006 – OJ L 312 of 29.11.2005

Related Act

Commission Regulation (EC) No 491/2007 of 3 May 2007 laying down detailed rules for implementing Council Regulation (EC) No 1947/2005 as regards the communication of data concerning seeds [Official Journal L 116, 4.5.2007].

Towards a sustainable wine sector

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Towards a sustainable wine sector

Outline of the Community (European Union) legislation about Towards a sustainable wine sector

Topics

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

Agriculture > Markets for agricultural products

Towards a sustainable wine sector

The detailed analysis of the common market organisation (CMO) in wine will prepare the ground for far-reaching reform in the sector. This communication takes stock of the current situation and sets out objectives for the upcoming reform.

Document or Iniciative

Communication from the Commission to the Council and the European Parliament of 22 June 2006: “Towards a sustainable European wine sector” [COM(2006) 319 final – Not published in the Official Journal].

Summary

With this Communication, the Commission kicked off discussions on the future common market organisation (CMO) in wine, a debate culminating in the legislative proposal on the wine CMO which the Commission presented in July 2007 (see “Related Act” below).

CURRENT POSITION

At present, the aim of the CMO in wine is to restrict production potential by:

  • limiting planting rights, the benefits of which are determined by granting additional rights and by increasing yield in certain Member States;
  • permanent grubbing-up, which has almost ceased since 1996;
  • restructuring and reconversion programmes focusing on adapting quality and quantity to consumer demand. These programmes encourage the production of quality wine, but may also trigger an increase in overall production.

There are also other brakes on competitiveness, in particular:

  • crisis distillation of wine surpluses, now used as a structural measure, also covering quality wines. This procedure does not guarantee wine growers an adequate income and at the same time fails to limit the production of unmarketable surpluses;
  • private storage aid, which has become a structural measure, the costs of which should be borne by the industry;
  • the rigidity of procedures for adopting and adapting wine-making practices;
  • consumer confusion caused by wine labels resulting from a complex legal system that differs from international classifications;
  • additional national and regional regulations which make the situation even more complex.

THE EU’S NEW WINE POLICY

The aim of new European guidelines in the wine sector is to make the most of the EU’s huge potential and to react to developments in Europe and worldwide.

Potential and weaknesses at European level

The European Union is the world’s leading producer and exporter of wine. It is also the biggest consumer and importer. Moreover, in terms of quality, the EU’s reputation is recognised worldwide. The wine sector therefore represents a vital economic activity in terms of employment and export revenue.

However, wine imports into the EU are now growing faster than exports, so much so that they may soon overtake exports. Due to the increase in production and sales of new world wine, European producers must boost their competitiveness.

Objectives

The EU aims to increase the competitiveness of European wine producers and the reputation of their wine to recover old markets and win new ones. To this end, wine policy must be underpinned by clear, effective rules that balance supply and demand. In addition, it should preserve the best traditions of European wine production, reinforce the social fabric of many rural areas and ensure that all production is environmentally-friendly.

Options for reforming the CMO in wine

The Commission has examined the following possible options for reforming the CMO in wine:

  • maintaining the status quo, with possibly some limited adjustments;
  • reforming the CMO in wine along the lines of the general reform of the CAP;
  • completely deregulating the wine sector.

It concluded that none of these options would provide adequate answers to the problems, needs and particularities of the wine sector.

THE ONLY POSSIBLE OPTION: MAJOR REFORM OF THE CMO IN WINE

The Commission considers this option as the most appropriate response given the particularities of the sector. The regulatory framework and the production structure will be adapted in order to give the EU a sustainable and competitive wine sector.

TWO VARIANTS

Two possible reform scenarios have been looked at:

  • Variant A (one-step). In this case, planting rights and the grubbing-up scheme would be abolished at the same time, either immediately or on 1 August 2010 at the latest. This would provide quick answers to the present difficulties but would require a rapid and demanding adjustment of the sector.
  • Variant B (two-step). This approach is based on a period of structural adjustment, including temporarily reactivating the grubbing-up scheme. The first stage would restore the market balance and the second stage would increase competitiveness, in particular by abolishing planting rights. The system of restrictions on planting rights would be extended until 2013. The least competitive producers would be encouraged to sell their planting rights swiftly, since the grubbing-up premium would be set at an attractive level for the first year and a decreasing scale would be set for following years. Competitive producers would be able to extend their production.

The agricultural area formerly used for wine production, once grubbed up, would qualify as an eligible area under the single payment scheme (SPS) and, under variant B, would be granted the average regional decoupled direct payment.

COMMON FEATURES OF VARIANTS A AND B

Abolishing market management measures

Market management measures such as crisis distillation, private storage aid and must aid would be abolished. The crisis distillation measure would be dropped or replaced by an alternative safety net mechanism using the national envelope, making way for the introduction of more forward-looking measures.

Budget envelope for wine-producing Member States

Member States would be able to use the funds granted to finance measures selected from a given menu, for example to implement certain crisis management measures such as insurance against natural disasters or to provide basic cover against income crises.

Rural development

Preferably structural initiatives should be encouraged in the wine sector. To this end, a transfer of funds to rural development would be earmarked for the wine producing regions. Early retirement and agri-environment support schemes are examples of the many measures which could be part of rural development plans adopted by the Member States and that could benefit the wine sector.

Quality policy/geographical indications

The following measures should be taken to make the quality policy clearer, simpler and more transparent:

  • substantially revising the current regulatory framework to align it with international rules, in particular the provisions of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). The Commission proposes to establish two categories of wines: wine without a geographical indication (GI) and wine with a GI; the latter would be further divided into two sub-categories: wine with a protected geographical indication (PGI) and wine with a protected designation of origin (PDO);
  • the concept of quality wine based on a geographical origin should be confirmed, adapted, promoted and enhanced worldwide;
  • the role of interbranch organisations must be expanded to enable them to control and manage the quality of the wine produced in their territories.

Wine-making practices

The Commission proposes, regarding wine-making practices:

  • to take on the responsibility, hitherto the task of the Council, for approving new or modifying existing wine-making practices;
  • to recognise International Organisation of Vine and Wine (OIV) wine-making practices and assess how they can be incorporated into a Commission regulation;
  • to authorise use in the EU of wine-making practices already agreed internationally for making wine to export to the destinations in question;
  • to abolish the minimum natural alcohol requirement of wine which becomes redundant due to the proposed limitation on enrichment;
  • to ensure a minimum level of environmental protection in the wine-making process.

Enrichment

A decision must be taken on must aid following the recent reform of the sugar sector, which accentuates the problem of using sugar instead of must to increase the alcohol content of wine. Completely abolishing the aid whilst banning the use of sucrose appears to be the best solution.

Labelling

The Commission proposes to simplify labelling rules by setting up a single legal framework for all the different categories of wine and the particularities relating to them. In particular, it would be possible, even for table wines without GIs, to indicate the name of the variety and the year of production on the label. This framework would be tailored to the expressed needs of consumers and be more consistent with the wine quality policy.

Promotion and information

The Commission is committed to a promotion and information policy for European wine in third country markets. Within the EU, information campaigns on responsible/moderate wine consumption could also be considered.

Environment

The Commission intends to include basic environmental requirements for the wine sector. Vine growing and wine-making practices can pose problems as regards soil erosion and contamination, the use of plant health products and waste management.

WTO

The new CMO in wine should be compatible with World Trade Organisation (WTO) rules. Thus, current trade-distorting (“Amber Box”) intervention measures will be eliminated and preference will be given to “Green Box” measures. The present ban on the vinification of imported must and on blending of Community wines with non-EU wines will be examined in the same spirit.

Related Act

Proposal for a Council Regulation on the common organisation of the market in wine and amending certain Regulations [COM(2007) 372 final – Not published in the Official Journal].