PURPOSE: to reform the Common Agricultural Policy (CAP) after 2013 (direct payments).
PROPOSED ACT: Regulation of the European Parliament and of the Council.
BACKGROUND: the Commission presents a set of regulations laying down the legislative framework for the CAP in the period 2014-2020. The current reform proposals are based on the Communication on the CAP towards 2020 that outlined broad policy options in order to respond to the future challenges for agriculture and rural areas and to meet the objectives set for the CAP, namely (1) viable food production; (2) sustainable management of natural resources and climate action; and (3) balanced territorial development.
A common theme that has emerged throughout this process is the need to promote resource efficiency with a view to smart, sustainable and inclusive growth for EU agriculture and rural areas in line with the Europe 2020 strategy, keeping the structure of the CAP around two pillars that use complementary instruments in pursuit of the same objectives.
The framework set out in the Commission proposal for the multiannual financial framework for the years 2014-2020 (MFF) proposal foresees that the CAP should maintain its two-pillar structure with the budget for each pillar maintained in nominal terms at its 2013 level and with a clear focus on delivering results on the key EU priorities.
On this basis, the main elements of the legislative framework for the CAP during the period 2014-2020 are set out in the following regulations:
The rural development regulation builds on the proposal presented by the Commission on 6 October 2011 that sets out common rules for all funds operating under a Common Strategic Framework. A regulation will follow on the scheme for most deprived persons, for which funding is now placed under a different heading of the MFF.
In addition, new rules on the publication of information on beneficiaries taking account of the objections expressed by the Court of Justice of the European Union are also under preparation with a view to finding the most appropriate way to reconcile beneficiaries' right to protection of personal data with the principle of transparency.
IMPACT ASSESSMENT: the three scenarios elaborated in the impact assessment are:
The impact assessment concludes that the integration scenario is the most balanced in progressively aligning the CAP with the EU's strategic objectives. It will also be essential to develop an evaluation framework to measure the performance of the CAP with a common set of indicators linked to policy objectives.
LEGAL BASIS: Article 43(2) of the Treaty on the Functioning of the European Union (TFEU).
CONTENT: the proposed Regulation lays down common rules for the basic payment scheme and related payments. It seeks to better target support to certain actions, areas or beneficiaries as well as to pave the way for convergence of the level of support within and across Member States. The regulation also includes a section on coupled support.
(1) A single scheme across the EU, the basic payment scheme, replaces the Single Payment Scheme and the Single Area Payment Scheme as from 2014. The scheme will operate on the basis of payment entitlements allocated at national or regional level to all farmers according to their eligible hectares in the first year of application.
(2) The definition of active farmer further enhances targeting on farmers genuinely engaged in agricultural activities, and thus legitimizes support. In addition, the progressive reduction and capping of support for large beneficiaries is foreseen while taking due account of employment.
(3) The following payments are also provided:
· a payment (30% of annual national ceiling) for farmers following agricultural practices beneficial for the climate and the environment: crop diversification, maintenance of permanent pastures and ecological focus areas. Organic farming automatically benefits from this payment, while farmers in Natura 2000 areas will have to comply with the relevant requirements to the extent that they are consistent with the Natura 2000 legislation;
· a voluntary payment (up to 5% of annual national ceiling) for farmers in areas facing specific natural constraints (areas delimited in the same manner as for rural development purposes); this payment recognizes the need for income support to maintain presence in areas facing specific natural constraints and complements existing support under rural development;
· a payment (up to 2% of annual national ceiling) for young farmers in their installation, which may be complemented by setting up aid under rural development.
At the same time, the Regulation:
In terms of simplification, the new direct payments system will be based on a single type of payment entitlements and streamline transfer rules, thereby simplifying its management.
BUDGETARY IMPLICATION: in current prices, it is proposed that the CAP should focus on its core activities with EUR 317.2 billion allocated to Pillar I and EUR 101.2 billion to Pillar II over the 2014-2020 period.
The Pillar I and Pillar II funding is complemented by additional funding of EUR 17.1 billion consisting of:
The total budget to EUR 435.6 billion over the 2014-2020 period.
Distribution of support among Member States: it is proposed that all Member States with direct payments below 90% of the EU average will see one third of this gap closed. The national ceilings in the direct payments regulation are calculated on this basis.
Rural development aid: this is based on objective criteria linked to the policy objectives taking into account the current distribution. As is the case today, less developed regions should continue to benefit from higher co-financing rates, which will also apply to certain measures such as knowledge transfer, producer groups, cooperation and Leader.
Lastly, some flexibility for transfers between pillars is introduced (up to 5% of direct payments): from Pillar I to Pillar II to allow Member States to reinforce their rural development policy, and from Pillar II to Pillar I for those Member States where the level of direct payments remains below 90% of the EU average.
DELEGATED ACTS: the proposal contains provisions empowering the Commission to adopt delegated acts in accordance with Article 290 of the Treaty on the Functioning of the European Union.