WORLD TRADE  
ORGANIZATION  G/AG/N/EEC/65 
4 February 2010 
 (10-0603) 
Committee on Agriculture Original:   English 
  
 
NOTIFICATION  
 
  The following submission, dated 6 January 2010 , is being circulated at the request of the 
Delegation of the  European Union .  The notification concerns new or modified domestic support 
measures exempt from reduction ( Table DS:2 ). 
 G/AG/N/EEC/65 
Page 2  
 
  Table DS:2 
 
DOMESTIC SUPPORT:  European Union 
Notification under Article 18:3 of the Agreement:  
New or modified domestic support measures exempt from reduction  
 
(1) Full title of measure 
  Reform of the Common Market Organisation in the sugar Sector:  
 
• Progressive reduction of price support (36 per cent price cut over four years beginning in 
2006/07) together with the allocation of paym ent entitlements in the context of the Single 
Payment Scheme (SPS) amending Regulati on 1782/2003 establishing common rules for 
direct support schemes. 
 
• Separate Sugar Payment. 
 
• Establishing a temporary scheme for the restructuring of the sugar industry. 
 
(2)  Detailed description of measure with reference to criteria, i.e. those in 
  Annex 2 paragraph 6 
 
• A reform of the sugar sector was implemented as from 1 July 2006. A decoupled 
payment based on historical references w ithin the framework of the Single Payment 
Scheme was established.  A budgetary provision for the decoupled payment is 
integrated in the ceiling for the Single Payment Scheme . 
  Annex 2 paragraph 6 
 
• The New Member States applying the Single Area Payment Scheme (SAPS, see 
notification G/AG/N/EEC/58) may grant in r espect of the years 2006-2010 (Bulgaria and 
Romania 2007-2011) a decoupled " Separate Sugar Payment
". Eligibility for this 
payment is based on objective and non-discr iminatory criteria. No sugar or other 
production is required to receive the payments. The mention of "sugar" in the title of the 
program refers to past sugar production u sed for the determination of eligibility of 
payment entitlements. 
 
 Annex 2 paragraph 11  
• A voluntary restructuring scheme
 lasting 4 years for EU sugar factories and isoglucose 
and inulin syrup producers is created, cons isting of a payment to encourage factory 
closure and the renunciation of quota as well as to cope with the social and environmental impact of the restructuring pr ocess.  This payment will be €730 per tonne 
of quota renounced in years one and two, fa lling to €625 in year three, and €520 in the 
final year.  The payments are financed by a levy on holders of quota, lasting three years.  
  G/AG/N/EEC/65 
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  (3) Domestic legislation references  
 
• The increased decoupled SPS payment : Council Regulation 319/2006 amending 
regulation 1782/2003 establishing common rules for direct support schemes under the Common Agricultural Policy. 
 
• The Separate Sugar Payment
: Article 143ba of Council Regulation 1782/2003 
establishing common rules for direct s upport schemes under the Common Agricultural 
Policy. 
 
• Restructuring Scheme : Council Regulation 320/2006 establishing a temporary scheme 
for the restructuring of the sugar industry 
 (4) Cost of measure  
• New ceiling for decoupled SPS payments: €28 billion (payments 2007) 
 
• Separate sugar payment: €167 million (payments 2007) 
 
• Restructuring scheme: €552 million (Payments 2007) 
 (5) Date of entry into effect 
 
• Decoupled payments: 1 January 2006 
 
• Separate Sugar Payment: 1 April 2006 (B ulgaria and Romania 15 February 2007) 
 
• Restructuring scheme: 1 July 2006 
 (6) Period of application 
 
• Decoupled payments: indefinite 
 
• Separate Sugar Payment:  2006/2007 - 2009/2010 
 
• Restructuring scheme: 2006/07 – 2009/10 
 
(7) Products to principally benefit (if any individual product(s))  
• The decoupled support is by definitio n not intended for individual products.  
 
• The Separate Sugar Payment is decoupled  and not intended for individual products. 
 
• The restructuring scheme benefits the Sugar sector in the sense of paragraph 11 (e) of 
Annex 2 of the Agreement on Agriculture. 
 G/AG/N/EEC/65 
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  Table DS:2 
 
DOMESTIC SUPPORT:  European Union 
Notification under Article 18:3 of the Agreement:  
New or modified domestic support measures exempt from reduction  
 
(1) Full title of measure 
  Measures financed by the European Agricu ltural Fund for Rural Development (EAFRD, 
"second pillar" of the CAP) 
 
(2)  Detailed description of measure with reference to criteria, i.e. those in 
 
 Policy framework
 
 
 The European Union has an active rura l development policy aiming at achieving 
modernisation, agri-environmental and wider goa ls linked to the EU countryside and for the 
people who live and work there.  As such, the rural development policy plays a key role in the 
CAP reform process.  The EU's rural areas are a vital part of its physical make-up and its 
identity. More than 91 per cent of the territory of  the EU is "rural", and this area is home to 
more than 56 per cent of the EU's populati on.  Many of these rural areas face significant 
challenges. Average income per h ead is lower in rural regions than in our towns and cities, 
while the skills base is narrower and the service s ector is less developed.  Also, caring for the 
rural environment often carries a financial co st.  The EU's Lisbon Strategy for jobs and 
growth , and its Göteborg Strategy for sustainable development, are just as relevant to the 
countryside as to the towns and cities.  The EU's rural development policy is all about 
meeting the challenges faced by rura l areas, and unlocking their potential. 
   Theoretically, individual EU member States c ould decide and operate completely independent 
rural development policies.  Howe ver, this approach would work poorly in practice.  Not all 
countries in the EU would be able to afford the policy which they needed.  Moreover, many 
of the issues addressed through rural developmen t policy do not divide up neatly at national 
or regional boundaries, but affect people furthe r afield (for example, pollution crosses borders 
all too easily; and more generally, environmenta l sustainability has become a European and 
international concern).  Also, rural developmen t policy has links to a number of other policies 
set at EU level.  Therefore, the EU has a common rural development policy, which 
nonetheless places considerable control in the hands of individual member States and regions.  
The policy is funded partly from the central EU budget and partly from individual member States' national or regional budgets. 
   The essential rules governing rural development policy for the period 2007 to 2013, as well as 
the policy measures available to member States and regions, are set out in Council Regulation 
(EC) No. 1698/2005 . Under this Regulation, rural deve lopment policy for 2007 to 2013 is 
focused on three themes (known as "thematic axes"). These are: 
 
• improving the competitiveness of the agricultural and forestry sector; 
• improving the environment and the countryside; 
• improving the quality of life in rural areas a nd encouraging diversification of the rural 
economy.   G/AG/N/EEC/65 
 Page 5 
 
 
   To help ensure a balanced approach to po licy, member States and regions are obliged to 
spread their rural development funding between all three of these thematic axes.  The three 
thematic axes are complemented by a "methodologi cal" axis dedicated to the Leader ("Links 
between Actions for the Development of th e Rural Economy") approach.  The "Leader 
approach" to rural development involves highl y individual projects designed and executed by 
local partnerships to address specific local probl ems.  As before 2007, every member State (or 
region, in cases where powers are delegated to regional level) must set out a rural development programme, which specifies what funding will be spent on which measures in 
the period 2007 to 2013.  A new feature for 2007 to 2013 is a greater emphasis on coherent 
strategy for rural development across the EU as a whole.  This is being achieved through the 
use of National Strategy Plans which mu st be based on EU Strategic Guidelines
.  This 
approach should help to: 
 
• identify the areas where the use of EU suppor t for rural development adds the most 
value at EU level; 
• make the link with the main EU prioriti es (for example, those set out under the 
Lisbon and Göteborg agendas); 
• ensure consistency with other EU policies,  in particular those for economic cohesion 
and the environment; 
• assist the implementation of the new market-oriented CAP and the necessary 
restructuring it will entail in the old and new Member States.  
 
 Individual Rural Development measures  
 
 Axis 1: Improving competiti veness for farming and forestry  
  
 Paragraph 2(d) 
 
 Vocational training and information actions , including diffusion of scientific knowledge and 
innovative practices, for persons  engaged in the agricultural, food and forestry sectors.  
Support does not include courses of instruction or training which form part of normal 
programmes or systems of agricultural and forestry education at secondary or higher levels. 
 
 Paragraph 11 
  Setting up of young farmers
.  Support is granted to persons w ho are less than 40 years of age 
and are setting up for the first time on an agricultural holding as head of the holding.  They must possess adequate occupational skills and competence and submit a business plan for the 
development of their farming activities.  Th e support shall be granted up to the maximum 
amount of €55,000. 
 
 Paragraph 9  
 Early retirement of farmers
 and farm workers.  Support is gr anted to farmers who decide to 
stop their agricultural activity for the purpose of transferring the holdings to other farmers and 
to farm workers and who decide to stop all fa rm work definitively upon the transfer of the 
holding.  The transferor shall not be less than  55 years old but not yet of normal retirement 
age at the time of transfer or not more than 10 years younger than the normal retirement age. 
He or she must stop all commercial farming ac tivity definitively and have practiced farming 
for the 10 years preceding transfer.  The total duration of early retirement support shall not exceed 15 years for the transferor and for the fa rm worker.  It shall not go beyond the 70th G/AG/N/EEC/65 
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  birthday of the transferor and the normal retirem ent age of the farm worker.  The support shall 
be granted up to the maximum amount of €180,000 per transferor. 
 
 Paragraph 2 (d) 
  Use of advisory services by farmers and forest holders
.  Support is granted to help farmers 
and forest holders to meet costs arising from the use of advisory services for the improvement of the overall performance of their holding.  As a minimum the advisory service to farmers 
shall cover the statutory management requirements and the good agricultural and 
environmental conditions provided for in Article s 4 and 5 of and in Annexes III and IV to 
Regulation (EC) No 1782/2003 and the occupati onal safety standards based on Community 
legislation. 
 
 Paragraph 2 (d) 
  Setting up of farm management, farm  relief and farm advisory services
, as well as of forestry 
advisory services.  Support for the use of advisory services shall be limited to 80 per cent of the cost or a maximum of €1,500.  Support fo r setting up of management, relief and advisory 
services is granted in order to cover costs arising from the setting up of farm management, 
farm relief and farm advisory services as well as forestry advisory services and shall be digressive over a maximum period of five years from setting up. 
  Paragraph 11 
 
 Modernisation of agricultural holdings
.  Support for modernisation of agricultural holdings is 
granted for tangible and/or intangible invest ments which improve the overall performance of 
the agricultural holding and respect the Commun ity standards applicable to the investment 
concerned.  Where investments are made in order to comply with Community standards, 
support may be granted only to those which ar e made in order to comply with newly 
introduced Community standards.  In that case, a period of grace, not exceeding 36 months from the date on which the standard becomes ma ndatory for the agricultural holding, may be 
provided to meet that standard.  In the case of young farmers receiving setting up support, the 
modernization support may be granted for inv estments to comply with existing Community 
standards, when identified in a business plan.  The period of grace within which the standard 
needs to be met, may not exceed 36 months from the date of setting up.  Support is limited to 
40-75 per cent depending on the area where the farm is located and on whether the beneficiary is a young farmer. 
 
 Paragraph 11 
 
 Adding value to agricultural and forestry products
. Support is granted for tangible and/or 
intangible investments which improve the ove rall performance of the enterprise and which 
concern the processing and/or marketing of pr oducts covered by Annex I to the Treaty 
establishing the European Community, except fi shery products, and of forestry products 
and/or the development of new products, processes and technologies linked to products 
covered by Annex I to the Treaty establis hing the European Community, except fishery 
products, and to forestry products and which  r espect the Community standards applicable to 
the investment concerned.  Support is limited to the maximum rate of 40-75 per cent 
depending on the area where the farm is located. 
  G/AG/N/EEC/65 
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   Paragraph 2 (f) 
 
 Cooperation for development of ne w products, processes and technologies  in the agriculture 
and food sector and in the forestry sector.  Support is granted to promote the cooperation 
between primary producers in agriculture and forestry, the processing industry and/or third 
parties. It shall contribute to cover costs incurred for the cooperation. 
 
 Paragraph 2 (g) 
 
 Improving and developing infrastructure rela ted to the development and adaptation of 
agriculture and forestry .  Support may cover notably operati ons related to access to farm and 
forest land, land consolidation and improveme nt, energy supply and water management. 
 
 Paragraph 11 
  Helping farmers to adapt to demanding standards
 based on Community legislation.  Support 
contributes partly to costs incurred and income foregone caused to farmers who have to apply 
standards in the fields of the environmental pr otection, public health, animal and plant health, 
animal welfare and occupational safety.  Th ese standards must be newly introduced in 
national legislation implementing Community law and impose new obligations or restrictions 
to farming practice which have a significant impact on typical farm operating costs and 
concern a significant number of farmers.  The s upport is granted as a flat-rate, temporary and 
digressive aid on an annual basis, for a maxi mum duration of five years from the date the 
standard becomes mandatory in accordance with  Community legislation. Support shall be 
limited to a maximum of €10,000 per holding. 
  Paragraph 5 
 
 Supporting farmers who participate in food quality schemes
.  Support covers agricultural 
products only intended for human consumption and is only for Community food quality schemes, or for those recognized by the member  States which comply with precise criteria.  
Schemes, whose sole purpose is to provide a higher level of control of respect of obligatory 
standards under Community or national law, sha ll not be eligible for support.  The support is 
granted as an annual incentive payment whose le vel shall be determined according to the 
level of the fixed costs arising from partic ipation in supported schemes, for a maximum 
duration of five years.  The support is lim ited to a maximum amount €3,000 per holding. 
  Paragraph 2 (f) 
 
 Supporting producer groups for info rmation and promotion activities
 for products under food 
quality schemes.  Support concerns products covere d by the support of the quality schemes.  
It shall be limited to a maximum of 70 per cent of the cost. 
 
• Transitional measures for the Czech Republic , Estonia, Cyprus, Latvia, Lithuania, 
Hungary, Malta, Poland, Sloveni a and Slovakia concerning:  
 
  Paragraph 11 
 
o supporting semi-subsistence agricultura l holdings undergoing restructuring . Support 
is provided to agricultural holdings which produce primarily for their own 
consumption and also market a proportio n of their output (semi-subsistence 
agricultural holdings) shall be granted to farmers who submit a business plan. The G/AG/N/EEC/65 
Page 8  
 
  support is paid up to a maximum of €1,500 per holding per year for a maximum of 
five years. 
 
  Paragraph 2 (f) 
 
o supporting setting up of producer groups
. Support is granted in order to facilitate the 
setting up and administrative operation of pr oducer groups for the purposes of firstly 
adapting the production and output of producers who are members of such groups to market requirements. Secondly it is granted for the purpose of jointly placing goods on the market, including preparation for sale,  centralisation of sales and supply to 
bulk buyers and thirdly for establishing common rules on production information, 
with particular regard to harvesting and availability.  The support can be granted as a 
flat-rate aid in annual instalments for the fi rst five years following the date on which 
the producer group was recognised.  It shall be calculated on the basis of the group's annual marketed production, up to the ceili ngs of €100,000 in the first year. The 
support shall be granted to producer groups which are officially recognised by the 
Member State's competent authority by 31 December 2013. 
 
 Axis 2: Improving the environment and the countryside
 
  Paragraph 13 
  Natural handicap payments to farmers in mountain areas and other than mountain areas
.  
Payments compensate for farmers' additional costs and income forgone related to the 
handicap for agricultural production in the area c oncerned.  Payments ar e granted to farmers 
who undertake to pursue their farming activity in areas designated for at least five years from 
the first payment.  Payments are fixe d between minimum €25 and maximum €250 per 
hectare.  
 
 Paragraph 12 
 
 Natura 2000 payments and payments linked to Directive 2000/60/EC .  Support is granted 
annually and per hectare of Utilized Agricultural Area (UAA) to farmers in order to 
compensate for costs incurred and income fo regone resulting from disadvantages in the areas 
concerned related to the implementati on of Directives 79/409/EEC, 92/43/EEC and 
2000/60/EC.  Support is limited to the maximum amount of €500 per hectare. 
  Paragraph 12 
 
 Agri-environment payments
.  Member States must make the support available throughout 
their territories, in accordance with their sp ecific needs.  Agri-environment payments are 
granted to farmers who make on a voluntary basis agri-environmental commitments.  Where 
duly justified to achieve environmental obj ectives, agri-environment payments may be 
granted to other land managers.  Agri-envir onment payments cover only those commitments 
going beyond the relevant mandatory standard s established pursuant to Articles 4 and 5 of 
and Annexes III and IV to Regulation (EC)  No 1782/2003 as well as minimum requirements 
for fertiliser and plant protection product u se and other relevant mandatory requirements 
established by national legislation and identifie d in the programme.  The commitments are 
undertaken as a general rule for a period between  five and seven years.  The payments are 
granted annually and cover additional co sts and income foregone resulting from the 
commitments made.  Where necessary, they may cover also transaction cost.  Where appropriate, the beneficiaries may be selected on the basis of calls for tender, applying criteria 
of economic and environmental efficiency.  Support is limited to the maximum amounts  G/AG/N/EEC/65 
 Page 9 
 
 
  between €200 per livestock unit and €450-900 per h ectare.  Support may also be provided for 
the conservation of genetic resources in ag riculture for operations not covered by the 
provisions of other agri-environment measures mentioned above. 
  
 Paragraph 10 
 
 First afforestation of agricultural land .  Support covers only one or more of (a) establishment 
costs; (b) an annual premium per hectare affor ested to contribute to covering maintenance 
costs for a maximum of five years and (c) an  annual premium per hectare to contribute to 
covering loss of income resulting from afforestation for a maximum of 15 years for farmers or 
associations thereof who worked the land before  its afforestation or for any other natural 
person or private law body.  Support for the affo restation of agricultural land owned by public 
authorities covers only the cost of establishment.  Support to farmers or other natural persons and private law bodies is limited a maximum of €700 per hectare. 
  Paragraph 12 
 
 Support for non-productive investments
.  Support provided is granted for (a) investments 
linked to the achievement of commitments unde rtaken pursuant to the measure provided for 
agri-environmental payments or objectives and (b) on-farm investments which enhance the 
public amenity value of a Natura 2000 area or ot her high nature value areas to be defined in 
the programme. 
 
 Axis 3: Improving quality of life in rura l areas and diversification of the rural economy  
 
 Paragraph 11 
 
 Support for the creation and development of micro-enterprises  with a view to promoting 
entrepreneurship and devel oping the economic fabric. 
 
 Paragraph 2 (g) 
  Basic services for the economy and rural population
.  The support covers the setting up of 
basic services, including cultural and leisure ac tivities, concerning a village or group of 
villages, and related small-scale infrastructure. 
 
 Paragraph 2 (g) 
 
 Conservation and upgrading of the rural heritage .  The support covers the drawing-up of 
protection and management plans relating to  Natura 2000 sites and other places of high 
natural value, environmental awareness actions and investments associated with maintenance, 
restoration and upgrading of the natural herita ge and with the development of high natural 
value sites.  It also covers support for studi es and investments associated with maintenance, 
restoration and upgrading of the cultural heritage  such as the cultural features of villages and 
the rural landscape. 
 
 Paragraph 2 (c) 
  Training and information
 measure for economic actors opera ting in the fields covered by 
axis 3, i.e. improving the quality of life in rura l areas and diversification of the rural economy.  
Support does not include courses of instruction or training which form part of normal education programmes or systems at secondary or higher levels. 
 G/AG/N/EEC/65 
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   Leader axis
 
 
 Paragraph 2 (d) 
 
 Implementing local development strategies with  a view to achieving the objectives of one or 
more of the three other axes. 
 
 Paragraph 2 (d) 
 
 Implementing cooperation projects. 
 
 Paragraph 2 (d) 
 
 The support is granted to inter-territorial or transnational cooperation projects. "Inter-
territorial cooperation" means cooperation within a member State. "Transnational 
cooperation" means cooperation between terr itories in several member States and with 
territories in third countries.  Only expend iture relating to the territories within the 
Community shall be eligible for support. 
 
 Paragraph 2 (d) 
  Running local action groups, acquiring skills and animating through studies, training and 
promotional events. 
 
(3) Domestic legislation references  
  Council Regulation (EEC) 1698/2005 (Official J ournal L 277 of 21.10.2005, p.1) constitutes 
the legal basis for the Rural Development measures summarized in section 2 of this 
notification. 
 
(4) Cost of measure 
  €11 billion (payments 2007) 
 
(5) Date of entry into effect 
 
 1 January 2007  (6) Period of application 
 
 Rural Development programming period 2007-2013 
 
(7) Products to principally benefit (if any individual product(s)) 
 
 The support is not intended for individual products.   
__________