Tag Archives: Common market organisation

Single Farm Payment

Single Farm Payment

Outline of the Community (European Union) legislation about Single Farm Payment

Topics

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

Agriculture > General framework

Single Farm Payment

Document or Iniciative

Council Regulation (EC) No 73/2009 of 19 January 2009 establishing common rules for direct support schemes for farmers under the common agricultural policy and establishing certain support schemes for farmers, amending Regulations (EC) No 1290/2005, (EC) No 247/2006, (EC) No 378/2007 and repealing Regulation (EC) No 1782/2003 [See amending act(s)].

Summary

Since the reform of the Common Agricultural Policy (CAP) which took place in June 2003, production-related support has been gradually abolished and included in the Single Payment Scheme (SPS), the system of direct payments which European farmers benefit from. This Regulation continues this reform.

Direct payments are support granted to farmers directly under the framework of one of the support schemes listed in Annex I to the Regulation. Some of this support is still directly linked to production; however the majority of direct support is decoupled and granted under the auspices of an income support scheme called the “Single Payment Scheme” (SPS). Under the SPS, support granted to farmers is not linked to production.

The objective of this Regulation is to gradually integrate support coupled with production into the single payment scheme.

DIRECT PAYMENTS

Cross-compliance

Direct support is subject to the principle of ‘cross-compliance’, according to which farmers must comply with a certain number of requirements in order to receive payments. These requirements relate to three areas:

  • public health, animal and plant health;
  • the environment;
  • animal welfare.

If the farmer does not comply with these requirements, they are penalised with a reduction in or cancellation of the direct payments.

Modulation

Modulation is a system of compulsory progressive reduction of direct payments. Direct payments of over EUR 5 000 have therefore been reduced year on year in accordance with a particular percentage of up to 10 % by 2012.

The corresponding amounts are transferred to the European Agricultural Fund for Rural Development (EAFRD) to enhance rural development programmes, in particular for measures concerning climate change, renewable energies, water management and biodiversity. The modulation system does not apply to either the outermost regions, the Aegean Islands or to Member States subject to “phasing in”.

Farm advisory system

Farmers may take part in the farm advisory system set up by Member States to advise farmers with regard to compliance with regulatory requirements on management matters and good farming and environmental conditions.

Integrated administration and control system (IACS)

Each Member State must set up an integrated administration and control system which enables the efficiency and monitoring of the support granted to farmers by the EU to be improved. Through this electronic system, the Member State is able to deal with aid applications and be assured through administrative checks and on-site checks that payments are made properly, in order to prevent and, if necessary, manage irregularities and recover undue amounts.

Payment

Full payments are to be made to beneficiaries in one or two instalments per year between 1 December and 30 June of the following calendar year. The Commission may authorise advances. Farmers who have artificially created the conditions required for obtaining payments will not receive them.

SINGLE PAYMENT SCHEME

The single payment scheme allocates aid to farmers irrespective of their production. The principal aim of this system of support is to ensure greater income stability for farmers. The latter henceforth receive the same amount of support regardless of their rate of production. This enables them to align their production with market demands. The aim of the Single Payment Scheme is also to improve the competitiveness and sustainability of agriculture.

National ceilings

Budget ceilings for the Single Payment Scheme for each Member State are published each year in a Commission Regulation.

National reserve

Member States set up a national reserve to grant rights to payments to new farmers and to those deemed to be in special circumstances, and to establish rights for farmers in areas subject to restructuring and/or development programmes.

Payment entitlements

In order to benefit from the Single Payment Scheme, farmers must first have payment entitlements, which they must declare together with the eligible hectares. The payment entitlements may be transferred from one farmer to another under certain conditions.

Historic implementation

In the “historic model”, entitlements are calculated based on the amount of direct payments each farmer has received during a reference period (generally the years 2000, 2001 and 2002. Other calculation options are possible in specific cases or when other integrations are concerned). Each direct payment is calculated by dividing the reference amount by the number of hectares which are entitled to the support received.

Regional implementation

Member States may opt to allocate payments at regional level. In that case, regional ceilings are to be established and divided among the farmers in the region. The value of their entitlements is obtained by dividing the financial envelope by the number of hectares declared in the first year of application of the scheme.

Partial implementation

Member States have had the option of partially implementing the single payment system. In this case, Member States keep part of the coupled aid and pay it to farmers in the form of a supplementary payment and according to production. These options will disappear in 2012, except for sheep/goats and suckler cows, two productions which may prove to be crucial in order to avoid agricultural land being abandoned in certain regions.

CONTEXT

This Regulation forms part of the “health check” component of the Common Agricultural Policy after the 2003 reform. Since then the CAP has been resolutely aimed at simplification by making most payments directly to farmers under the Single Payment Scheme. Using the experience acquired since the introduction of the SPS, the Commission is extending the simplification of the CAP into the area of cross-compliance and that of existing coupled aid.

References

Act Entry into force Deadline for transposition in the Member States Official Journal

Regulation (EC) No 73/2009

1.2.2009

OJ L 30, 31.1.2009

Amending act(s) Entry into force Deadline for transposition in the Member States Official Journal

Regulation (EC) No 1250/2009

22.12.2009

OJ L 338, 19.12.2009

Towards a sustainable wine sector

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].

Wine

Wine

Outline of the Community (European Union) legislation about Wine

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

Wine

This Regulation significantly reforms the common market organisation (CMO) for wine. It aims to guarantee both the competitiveness and the sustainability of the wine sector. It entered into force on 1 August 2008.

Document or Iniciative

Council Regulation (EC) No 479/2008 of 29 April 2008 on the common organisation of the market in wine, amending Regulations (EC) No 1493/1999, (EC) No 1782/2003, (EC) No 1290/2005 and (EC) No 3/2008, and repealing Regulations (EEC) No 2392/86 and (EC) No 1493/1999 [See amending acts].

Summary

The common market organisation (CMO) established by this Regulation covers the wine sector, which will be incorporated into the single CMO for agricultural markets. The wine CMO Regulation aims in particular to establish clear and effective rules that make it possible to balance supply and demand and to steer the sector towards sustainable and competitive development. Its objective is also to preserve the best traditions of European wine-production, to strengthen the social fabric in many rural areas and to ensure that production is environmentally-friendly.

Support measures

Member States can receive Community funds for specific measures taken to assist the wine sector through national support programmes. The Member States had until 30 June 2008 to submit their draft five-year support programmes, including a detailed description of the proposed measures as well as criteria for monitoring and evaluation, to the Commission. The drafts may take regional peculiarities into account.

The measures eligible for these support programmes are:

  • ;
  • promoting European wines on third-country markets;
  • restructuring and conversion of vineyards. The contribution must not exceed 50% of the total cost, except in regions classified as “convergence regions” where it may represent up to 75% of the actual cost;
  • green harvesting in order to limit supply to the market;
  • mutual funds to protect against market fluctuations;
  • harvest insurance to safeguard producers’ incomes in the event of natural disasters, adverse climatic events, diseases or pest infestations;
  • tangible or intangible investments to improve competitiveness;
  • distillation of by-products of winemaking;
  • potable alcoholdistillation (until 31 July 2012);
  • crisis distillation to dispose of surplus wine (until 31 July 2012);
  • use of concentrated grape must to increase products’ natural alcoholic strength (until 31 July 2012).

The Member States may grant complementary national aid in addition to the Community support, in accordance with the Community rules on State aid and only for measures involving promotion in third-country markets, harvest insurance and investments.

Some funding will be transferred to rural development measures and will be strictly ring-fenced for wine-growing regions.

Regulatory measures

The Member States may decide which wine grape varieties are permitted on their territory for the purposes of wine production, provided that these varieties belong to the Vitis vinifera species or come from a cross between said species and other species of the genus Vitis.

The designations for the categories of grapevine products (wine *, sparkling wine *, wine vinegar *, etc.) are predefined and may not be used within the Community for products that do not meet the required conditions.

From 1 August 2009, the Commission, with the assistance of the Member States represented on a regulatory committee, shall be responsible for authorising the oenological practices* permitted within the European Union, based in particular on the practices recommended by the International Organisation of Vine and Wine (OIV). The Member States can impose more stringent restrictions for wines produced on their territory in order to preserve the essential characteristics of wines with a protected designation of origin or a protected geographical indication, and of sparkling wines and liqueur wines.

The rules on designations of origin*, geographical indications*andtraditionalterms* will apply as from 1 August 2009 in order to protect the interests of consumers and producers and to promote the production of high-quality products.

The labelling rules will be simplified as from 1 August 2009. The labelling of wines without a geographical indication or a designation of origin may include the vine variety and the vintage year.

Producer organisations and inter-branch organisations may be given recognition by the Member States, subject to certain conditions. Their common goal is to better adjust supply to demand, which may include promoting environmentally-friendly cultivation practices and production techniques.

Trade with third countries

Trade with third countries can be made subject to the presentation of an import or export licence issued by the Member States to any interested applicant, irrespective of his place of establishment in the Community. The issue of these licences is subject to the lodging of a security guaranteeing that the products are imported or exported during the term of validity of the licence. These licences are valid throughout the Community.

In the absence of any contrary provisions (such as additional duties under safeguard measures), the rates of duty in the Common Customs Tariff shall apply to wine products; for grape juice * and must *, application of the Common Customs Tariff will depend on their entry price.

Production potential

Unlawful plantings planted after 31 August 1998 must be grubbed up at the producers’ expense. Areas planted with vines without a corresponding planting right before 1 September 1998 must be brought into compliance. Producers have until 31 December 2009 to achieve compliance against payment of a fee; after this date, the vineyards concerned must be grubbed up at the expense of the producers concerned. Grapes and other products from unlawful plantations may only be put into circulation for the purposes of distillation, at the exclusive expense of the producer. The distilled products will be used to make alcohol which has an actual alcoholic strength by volume of at least 80% vol.

In principle, the prohibition on planting vines of varieties classified as wine grape varieties will remain in force until 31 December 2015. However, the Member States may decide to maintain the prohibition on all or part of their territory until 31 December 2018 at the latest. The reserves of rights system has been maintained. This system involves replanting rights which have not been used within the prescribed time periods; these rights can be granted to young farmers and, in exchange for a financial payment, to other producers.

New planting rights may be granted to producers by the Member States as a result of land consolidation or compulsory purchase measures, or for experimental purposes, graft nurseries or domestic consumption.

Replanting rights may be granted by the Member States to producers who have, or who have agreed to, grub up an area planted with vines, within three wine years. In principle, these replanting rights should be exercised in the holding in respect of which they were granted. No replanting rights will be granted in respect of areas which have received grubbing-up premiums.

Grubbing-up premiums will be available until the end of the wine year 2010-2011 for a maximum area of 175,000 hectares. The specific amount of the premium is decided by the Member States within the limits of the scales set at Community level. The Member States can end the grubbing-up scheme if the area concerned reaches 8% of the total area planted with vines or 10% of the area of a given region. The Commission can also suspend the grubbing-up scheme if the area involved exceeds 15% of the total area planted with vines in a Member State or when, in any given year, the area grubbed-up represents over 6% of this total planted area. A State can exclude vines located in mountainous regions or on steep slopes from the grubbing-up scheme, as well as areas where there is a proven environmental risk. Complementary national aid may be granted, but must not exceed 75% of the value of the grubbing-up premium.

Control and monitoring

The products covered by this Regulation may only be put into circulation within the Community if they have an officially-checked accompanying document.

The Member States shall designate one or more bodies which are responsible for ensuring compliance with the Community law provisions on the wine sector.

Following the adoption of the single CMO for agricultural products, the Commission shall be assisted by the Management Committee for the Common Organisation of Agricultural Markets.

Context

This Regulation follows the evaluation and consultation process which aimed to better identify and target the needs of the wine sector. It also follows on from the Communication of 22 June 2006 entitled “Towards a sustainable European wine sector”, which should be in the archives) that sets out a number of possible options for the reform of the wine sector.

Key terms used in the act
  • Wine means the product obtained exclusively from total or partial alcoholic fermentation of fresh grapes, crushed or otherwise, or of grape must.
  • Sparkling wine means the product obtained by the first or second alcoholic fermentation (of fresh grapes, grape must or wine) and which is characterised by the release of carbon dioxide, produced exclusively during fermentation, when uncorked by the recipient.
  • Wine vinegar means the vinegar obtained exclusively by acetous fermentation of wine, with a total acidity expressed in acetic acid of not less than 60 grams per litre.
  • Oenological practices – only the oenological practices authorised by Community law, as set out in Annex V (enrichment, acidification and de-acidification) or approved in accordance with Articles 28 and 29 shall be used in the production and conservation of the products covered by this Regulation within the Community.
  • Designation of origin means the name of a region, a specific place or, in exceptional cases, a country, used to identify a product whose quality and characteristics are essentially or exclusively due to a particular geographical environment and its inherent natural and human factors. The product is made exclusively from grapes from the geographical area under consideration and is obtained exclusively from vine varieties belonging to the Vitis vinifera species.
  • Geographical indication means an indication referring to a region, a specific place or, in exceptional cases, a country, used to identify a product that has a specific quality, reputation or other characteristics attributable to that geographical origin. The product is made from grapes at least 85% of which come exclusively from the geographical area in question and is obtained from vine varieties belonging to the Vitis vinifera species or from a cross between the said species and other species of the genus Vitis.
  • Traditional term means a term traditionally used in a Member State to indicate that the product has a protected designation of origin or geographical indication under Community law or Member State law; or to identify the production or ageing method, or the quality, colour, type of place, or a particular event linked to the history, of the product with a protected designation of origin or geographical indication.
  • Grape juice means the unfermented but fermentable liquid product which is obtained by appropriate treatment rendering it fit for consumption as it is from fresh grapes, grape must or by reconstitution. In the latter case, the product is reconstituted from concentrated grape must or concentrated grape juice. An actual alcoholic strength of the grape juice of not more than 1% vol. is permissible.
  • Grape must means the liquid product obtained naturally or by physical processes from fresh grapes. An actual alcoholic strength of the grape must of not more than 1% vol. is permissible.

References

Act Entry into force Transposition deadline for Member States Official Journal
Regulation (EC)

No 479/2008

1.8.2008

OJ L 148 of 6.6.2008

Entry into force Transposition deadline for Member States Official Journal
Regulation (EC) No 1246/2008

16.12.2008

OJ L 335 of 13.12.2008

Regulation (EC) No 72/2008

7.2.2009

OJ L 30 of 31.1.2009

The successive amendments and corrections to Regulation (EEC) No 479/2008 have been incorporated into the basic text. This consolidated version (pdf ) is only of documentary value.

AMENDMENT OF THE ANNEXES

Annex II – Budget for support programmes
Regulation (EC) No 1246/2008 [Official Journal L 335 of 13.12.2008].

Annex III – Budget allocation for rural development

Regulation (EC) No 1246/2008 [Official Journal L 335 of 13.12.2008].

Related Acts

Procedural rules

Commission Regulation (EC) No 607/2009 of 14 July 2009 laying down certain detailed rules for the implementation of Council Regulation (EC) No 479/2008 as regards protected designations of origin and geographical indications, traditional terms, labelling and presentation of certain wine sector products [Official Journal L 193 of 24.7.2009].

Commission Regulation (EC) No 606/2009 of 10 July 2009 laying down certain detailed rules for implementing Council Regulation (EC) No 479/2008 as regards the categories of grapevine products, oenological practices and the applicable restrictions [Official Journal L 193 of 24.7.2009].

Commission Regulation (EC) No 436/2009 of 26 May 2009 laying down detailed rules for the application of Council Regulation (EC) No 479/2008 as regards the vineyard register, compulsory declarations and the gathering of information to monitor the wine market, the documents accompanying consignments of wine products and the wine sector registers to be kept [Official Journal L 128 of 27.5.2009].

Commission Regulation (EC) No 555/2008 of 27 June 2008 laying down detailed rules for implementing Council Regulation (EC) No 479/2008 on the common organisation of the market in wine, as regards support programmes, trade with third countries, production potential and on controls in the wine sector [Official Journal L 170 of 30.6.2008].
See consolidated version (pdf )

Grubbing-up premium

Commission Regulation (EC) No 1123/2008 of 12 November 2008 fixing a single percentage for acceptance of the amounts notified by the Member States to the Commission concerning the applications for the grubbing-up premium [Official Journal L 303 of 14.11.2008].