WORLD TRADE  
ORGANIZATION  G/SCM/N/186/EEC 
23 December 2009 
 (09-6544) 
Committee on Subsidies and 
Countervailing Measures Original:   English 
 
 
 
SUBSIDIES 
 
New and Full Notification Pursuant to Article XVI:1  
of the GATT 1994 and Article 25 of the Agreement  
on Subsidies and Countervailing Measures  
 
EUROPEAN COMMUNITIES 
  
 The following notification, dated 5 October 2009, is being circulated at the request of the 
Delegation of the European Communities.
* 
 
_______________ 
 
                                                      
* On 1 December 2009, the Treaty of Lisbon amendi ng the Treaty on European Union and the Treaty 
establishing the European Comm unity (done at Lisbon, 13 Decembe r 2007) entered into force.  
On 29 November 2009, the WTO received a Verbal Note  (WT/L/779) from the Council  of the European Union 
and the Commission of the European Communities stating that, by virtue of the Treaty of Lisbon, as of 
1 December 2009, the European Union replaces and succeeds the European Community. G/SCM/N/186/EEC 
Page 2  
 
  EUROPEAN COMMUNITIES  
 
TABLE OF CONTENTS 
 
 
 Page 
 
I. INTRODUCTION ................................................................................................................... .4 
A. STRUCTURE OF NOTIFICATION ....................................................................................................4  
B. PERIOD COVERED .......................................................................................................................4  
C. PRESENTATION OF NOTIFICATION ..............................................................................................4  
D. STATUS OF SUBSIDIES .................................................................................................................4  
II. EUROPEAN COMMUNIT Y SUBSIDIES.............................................................................4  
III. THE EUROPEAN COMMUNITY'S STRUCTURAL ACTIONS ......................................5  
A. EUROPEAN REGIONAL DEVELOPMENT FUND .............................................................................6  
IV. COMMON AGRICULTURAL POLICY (CAP).................................................................11  
A. GENERAL OBSERVATIONS ........................................................................................................11  
1. Decoupling ..................................................................................................................... ..........11  
2. Single Common Market Organisation ..................................................................................11  
3. 2008 Health Check of the CAP ..............................................................................................11  
4. Cross comp liance ............................................................................................................... .....12  
5. Enlargement of the European Union ....................................................................................12  
6. Restructuring of the CAP financing......................................................................................13  
7. Information on the World Wide Web...................................................................................13  
B. EUROPEAN AGRICULTURAL GUARANTEE FUND(EAGF) .........................................................14  
C. MEASURES FINANCED THROUGH THE EAGF  ("FIRST PILLAR " OF THE CAP)..........................15  
1. Export refunds ................................................................................................................. .......15  
2. Interventions in agricultu ral markets per sector .................................................................16  
3. Direct Aids .................................................................................................................... ...........36  
D. EUROPEAN AGRICULTURAL FUND FOR RURAL DEVELOPMENT (EAFRD) ..............................48  
E. MEASURES FINANCED BY THE EUROPEAN AGRICULTURAL FUND FOR RURAL 
DEVELOPMENT ("SECOND PILLAR " OF THE CAP) ....................................................................49  
1. Policy framework............................................................................................................... .....49  
2. Rural development measures.................................................................................................50  
F. SAPARD/IPARD................................................................................................................... ...55 
 
 
  G/SCM/N/186/EEC 
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   Page 
 
G. MEASURES FINANCED BY SAPARD/IPARD............................................................................56  
1. The Sapard pre-accession instrument  — Completion of the programme  
(2000 to 2006) ................................................................................................................. .........56  
2. Instrument for Pre-accession Assistance for Rural Development (IPARD)......................56  
V. INDUSTRY....................................................................................................................... .......57  
A. AID TO THE COAL INDUSTRY ....................................................................................................57  
B. COMMUNITY FRAMEWORK PROGRAMMES IN THE FIELD OF RESEARCH ..................................59  
C. RESEARCH ON COAL AND STEEL ..............................................................................................64  
VI. OTHER PROGRAMMES .....................................................................................................65  
A. FIFG........................................................................................................................... ...............65  
B. EUROPEAN FISHERIES FUND (EFF)...........................................................................................66  
C. COMMON ORGANISATION OF MARKETS IN FISHERY AND AQUACULTURE PRODUCTS ............68  
 G/SCM/N/186/EEC 
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  I. INTRODUCTION 
A. S
TRUCTURE OF NOTIFICATION  
 Subsidies in the European Community are gran ted both at Community level i.e. out of the 
Community budget, and by Member States.  
 In view of this, the notification is divided into  two parts.  This first part of the notification 
deals with subsidies granted by the European Community and general information on aid granted 
within the Community's territory.  The second part of this notification, circulated as addenda to this 
notification, covers subsidies granted by individual Member States.  The Member States' notifications 
cover subsidies granted at both national and sub-national level. 
 
B. P
ERIOD COVERED  
As far as possible, this notification rela tes to subsidies granted during the period 2007 
and 2008 and to subsidy programmes which are currently in  force, and provides statistical information 
at least up to the end of 2008 .  In addition, the first part of the notification also covers the period 2005 
and 2006 as far as no figures were provide d in the 2007 subsidies notification.  
 C. P
RESENTATION OF NOTIFICATION  
The information provided in this notification includes, as far as possible, all the elements 
required by Article 25.3 of the Subsidies Agreem ent and in almost all cases follows the presentation 
required by the subsidies questionnaire.  In a few ca ses, the presentation is different to that specified 
in the questionnaire, but all the re quired elements are still included. 
 D. S
TATUS OF SUBSIDIES  
In preparing this notification, the Commun ity has attempted to achieve the maximum 
transparency with regard to aid and support measures granted within its territory.  The fact that such 
aid has been notified does not, in accordance with Article 25.7 of th e Subsidies Agreement, prejudge 
its legal status under GATT 1994 or this Agreem ent, nor does it prejudge its effects under the 
Agreement or the nature of the measure itself.  In view of the diverse nature of many of the programmes notified, it may be that only part of a programme's funding involves a subsidy element, 
which may or may not be specific.  Consequently, th e appearance of a programme in this notification 
does not in any way imply that the whole or part of its expenditure amounts to a specific subsidy. 
 
II. EUROPEAN COMMUNITY SUBSIDIES 
(a) Subsidies granted out of the European Community budget
 
 The two largest areas of expenditure were ag riculture and structural operations.  Another 
notable area of expenditure is research.  All these ar e described in more detail in this part of the 
notification. 
 
(b) State aid in the Member States  
 The European Commission is responsible fo r examining all state aid granted within the 
Community in order to determine its conformity w ith Article 92 of the EC Treaty, (and Article 95 of 
the ECSC Treaty, for coal and steel products), Member States are required to notify all aid schemes to 
the Commission, which may decide either not to  raise any objection or open an investigation 
procedure.  If the aid scheme is ultimately found not to conform to Article 92, the Commission issues  G/SCM/N/186/EEC 
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  a negative decision which prevents the aid being gr anted.  If the Member State has already granted 
such aid, the Commission can order the aid to be repaid.   Details of Member States' aid schemes can be  found in addenda to this notification. 
 III. THE EUROPEAN COMMUNITY'S STRUCTURAL ACTIONS 
 The Community's structural actions (comprising the Structural Funds and the Cohesion Fund) 
are intended to strengthen the economic and social  cohesion of the Community, in particular by 
reducing disparities between the leve ls of development of the vari ous regions and the backwardness 
of the least-favoured regions.  Regulations con cerning the Structural Funds were adopted on 
21 June 1999, and cover the period 2000-2006.  New le gislative provisions have been adopted for the 
period 2007-13.  The new legislative package is composed of the following elements:  
(1) A general regulation which defines comm on rules, applicable to the European 
Regional Development Fund (ERDF), European Social Fund (ESF) and the Cohesion 
Fund (CF).  Based on the principle of management shared between the Union, the 
Member States and the regions, this regulation offers a new programming process as well as new norms for financially managing, controlling and evaluating the projects.  The cohesion policy is reorganised around three new priority objectives:  convergence, regional competitiveness and employment, and European territorial 
cooperation. 
 
(2) A regulation for each of the sources of  financing (European Regional Development 
Fund, European Social Fund, Cohesion Fund and the Instrument for Pre-Accession Assistance (IPA). 
 
(3) A new regulation creating the possibility to create a cross-border authority to carry 
out the cooperation programmes. 
  The budgetary commitments in 2005/06 amounted to:  
  2005  2006
Fund Budget available Executi on Budget available Execution
ERDF 21,451,393,410.00 21,446,788,055.00 21,983,281,075.00 21,966,106,008.00
CF 5,128,517,313.00 5,128,517,313.00 6,024,142,110.00 6,024,135,469.60
ISPA (BG+RO) 521,950,000.00 521,950,000.00 580,500,000.00 580,349,999.90
 
 The budgetary commitments in 2007/08 amounted to:  
  2007  2008
Fund Budget available Executi on Budget available Execution
ERDF 27,595,413,798.00 27,220,621,664.00 28,398,368,681.00 28,382,423,326.00
CF 7,108,590,235.00 7,108,590,235.00 8,134,601,515.00 8,134,601,515.00
IPA 224,982,767.00 221,767,626.00 349,260,605.00 349,206,605.00
 
 The technical assistance for Commission activates (for both, CF and ERDF) is excluded from 
the calculations.  G/SCM/N/186/EEC 
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   These structural actions are required to conf orm strictly to the Community's rules on the 
provision of state aid (Articles 87-89 of the EU Treaty).   The structural actions are notified in the spir it of transparency.  The aid involved is largely 
devoted to the least-developed areas of the EU, and the great majority of it goes to finance 
infrastructure or to assist individuals directly, without necessarily benefiting commercial enterprises.  
Consequently, as stated at the beginning of this doc ument, the notification of a particular fund does 
not prejudge the status of the aid involved.  A. E
UROPEAN REGIONAL DEVELOPMENT FUND 
1. Title of the programme  
  European Regional Development Fund (ERDF).  2. Period covered by the notification
 
 
 2005, 2006, 2007, 2008.  3. Programming period
 
 
The period covered by the notification refe rs to two different programming periods:  
2000-2006 and 2007-2013. 
 
In the programming period 2007-2013, the Community intervention in the field of the 
Cohesion Policy is being realised through the Struct ural Funds (SF), which are the European Regional 
Development Fund (ERDF), the European Social Fund (ESF) and the Cohesion Fund (CF). 
 
In the programming period 2000-2006, there were  four main Structural Funds were the 
European Regional Development Fund (ERDF), the European Social Fund (ESF), the European Agricultural Guidance a nd Guarantee Fund, Guidance Sec tion (EAGGF, Guidance Section) 
and the Financial Instrument for Fisheries Guidance  (FIFG).  The other component of EU structural 
spending was the Cohesion Fund. 
 
4. Legal basis
 
  Articles 158 and 160 of the EU Treaty.  
 For the programming period 2007-2013, the legal basis is: 
 
- Council Regulation 1083/2006 (EC) No. 1083/2003 of 11 July 2006 laying down 
provisions on the European Regional Development Fund, the European Social Fund and the Cohesion Fund and repealing Regulation (EC) No. 1260/1999. 
- Council Regulation (EC) No. 1080/2006 Regulati on (EC) of the European Parliament and 
of the Council of 5 July 2006 on the Europ ean Regional Development Fund and repealing 
Regulation (EC) No. 1783/1999. 
- Commission Regulation (EC) No. 1828/2006 of 8 December 2006 setting out rules for 
the implementation of Council Regulation (EC) No. 1083/2006 laying down general 
provisions on the European Regional Development Fund, the European Social Fund and 
the Cohesion Fund and of Regulation (EC) No . 1080/2006 of the European Parliament 
and of the Council on the European Regional Development Fund.  G/SCM/N/186/EEC 
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   For the programming period 2000-2006, the legal basis was: 
 
- Council Regulation (EC) No. 1260/1999 of 21 June 1999 laying down general provisions 
on the Structural Funds. 
- Regulation (EC) No. 1783/1999 of the Eur opean Parliament and of the Council of 
12 July 1999 on the European Regional Development Fund. 
5. Form of assistance granted – Grants from Community budget for  
  ERDF resources are mainly used to co-finance:  
• productive investment leading to the creation or maintenance of jobs; 
• investment in infrastructure; 
• development of endogenous potential by measures which support regional and local 
development. 
 6. Objectives
 
  The previous Structural Funds for the period 2000-06 give way to a new architecture which 
simplifies the system in the period 2007-2013.  The objectives of the new period 2007-2013 are the 
following:  
(a) The Convergence objective, which shall be aimed at speeding up the convergence of 
the least-developed Member States and regions by improving conditions for growth 
and employment through the increasing and im provement of the quality of investment 
in physical and human capital, the development of innovation and of the knowledge society, adaptability to economic and social  changes, the protection and improvement 
of the environment, and administrative effici ency.  This objective is financed by the 
ERDF, the ESF and the Cohesion Fund. 
(b) The Regional competitiveness and employment objective, which shall, outside the 
least-developed regions, be aimed at strengthening regions' competitiveness and 
attractiveness as well as employment by antic ipating economic and social changes, 
including those linked to the opening of trade, through the increasing and 
improvement of the quality of investme nt in human capital, innovation and the 
promotion of the knowledge society, entrepreneurship, the protection and 
improvement of the environment, and the improvement of accessibility, adaptability 
of workers and businesses as well as the devel opment of inclusive job markets.  This 
objective is financed by the ERDF and the ESF. 
(c) The European territorial cooperation objectiv e, which shall be ai med at strengthening 
cross-border cooperation through joint local  and regional initiatives, strengthening 
transnational cooperation by means of acti ons conducive to integrated territorial 
development linked to the Community pr iorities, and strengthening interregional 
cooperation and exchange of experience at th e appropriate territorial level.  This 
objective is financed by the ERDF. G/SCM/N/186/EEC 
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  By contrast, the objectives of the period 2000-2006 were the following: 
 
Objective 1: Promoting the development and structural adjustment of regions whose 
development is lagging behi nd.  This objective is financed by the ERDF, 
ESF, EAGGF Guidance Section and FIFG. 
 
Objective 2: Supporting the economic and social  conversion of areas facing structural 
difficulties.  This objective is financed by the ERDF and ESF. 
 
Objective 3: Supporting the adaptation and modernisation of policies and systems of 
education, training and employment.  This objective shall provide financial 
assistance outside the regions covered by Objective 1 and provide a policy 
frame of reference for all measures to promote human resources in a national territory without prejudice to the specific features of each region.  This objective is financed by the ESF. 
 
7. Eligibility
 
 
The eligibility in the period 2007-2013 is as follows: 
 
(a) The convergence objective - The areas elig ible for the convergence objective 
combine the regions eligible on a regional criteria basis (GDP is less than 75 per cent 
of the Community average) and Member States who are eligible for the Cohesion 
Fund on a national criteria basis (GNI less th an 90 per cent of the European average).  
Transitional support is granted for regions  corresponding to level 2 of the common 
classification of territorial units for statistics (hereinafter NUTS level 2) within the 
meaning of Regulation (EC) No. 1059/2003,  which were covered by Objective 1 in 
the previous period but whose GDP exceed s 75 per cent of the EU-15 GDP average 
(called "phasing-in"). 
(b) Regional competitiveness and employment obj ective - The European Union regions 
which are not eligible for the convergence obj ective or for the transitional support of 
the regional competitiveness and employment "phasing in" objective are all eligible 
for the. 
(c) European territorial cooperation objective – The areas eligible are divided in three: 
- For cross-border cooperation:  NUTS leve l 3 regions are eligible, along all the 
land-based internal borders and some external borders, along maritime borders 
separated by a maximum distance of 150 km. 
 
- For transnational cooperation:  all the regions are eligible but, in consultation 
with the Member States, the Commission has identified 13 cooperation areas (Northern Periphery, Baltic Sea, North West Europe, North Sea, Atlantic Coast, South West Europe, Alpine Space, E ast-Central Europe, Mediterranean, 
South-East Europe, Acores-Madeira-Canarias, Indian Ocean Area, Caribbean 
Area). 
 
- For interregional cooperation:  all the European regions are eligible. 
  G/SCM/N/186/EEC 
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  The eligibility in the period 2000-2006 is the following: 
 
(a) The regions covered by Objective 1 sha ll be regions corresponding to level NUTS 
level 2 whose per capita GDP, measured  in purchasing power disparities and 
calculated on the basis of Community figures for the last three years available on 26 
March 1999, is less than 75 per cent of the Community average. 
(b) The regions covered by Objective 2 shall be those with structural problems and 
whose population or area is sufficiently substan tial.  They shall include in particular 
areas undergoing socio-economic change in the industrial and service sectors, declining rural areas, urban areas in di fficulty and depressed areas dependent on 
fisheries. 
(c) The areas eligible for financing under Obj ective 3 shall be those not covered by 
Objective 1. 
8. Principles of intervention
 
 
 The principles of intervention for the pe riod 2007-2013 are the same as for the period 
2000-06:  complementarity, coherence, coordination, conformity and additionality.  Furthermore, the 
following principles are introduced:  propor tionality, equality between men and women and 
non-discrimination, sustainable development and us ing the Funds to focus on the Lisbon strategy 
priorities.  
 The principle of complementarity :  Community actions financed by Structural Funds shall 
complement or contribute to corresponding national operations. 
  The principle of additionality :  for those regions covered by the convergence objective the 
Commission and the Member States verify the level of public expenditure.  The Structural Funds must 
not substitute a State's infrastructural spending .  For the new programming period, there moreover 
exists a financial corrective mechanism in the even t of this principle not being respected, which was 
not the case in 2000-06.   The Funds must now target the European Union priorities in terms of the promotion of 
competitiveness and employment creation.  The Commiss ion and the Member States see to it that at 
least 60 per cent of the spending of all the Memb er States on the convergence objective and at least 
75 per cent of the expenditure on the regional co mpetitiveness and employment objective are assigned 
to these priorities.   The principle of proportionality :  newly introduced, this consists of modulating some 
obligations attributed to the Member States depending on the total amount of expenditure on an 
operational programme.   The principle of partnership is widened, which is to say that any appropriate organisation 
representing civil society, environmental partners , non-governmental organisations and organisations 
responsible for promoting equality between me n and women can participate in negotiations 
concerning the use of Structural Funds.  It not only participates in management but is involved at 
every programming stage (setting up, follow-up and evaluation).  9.  Budget for the period 2007-2013
 
 
 The European Council agreed in Decemb er 2005 on the budget for the period 2007-2013 and 
allocated € 347 billion on Structural and Cohesion Funds of which 81.5 per cent are planned to be G/SCM/N/186/EEC 
Page 10  
 
  spent in the "Convergence" regions.  Based on simplified procedures, nearly all of the 
436 programmes covering all EU regi ons and Member States were adopt ed before the end of 2007. 
  In the period 2007-2013, cohesion policy will benefit from 35.7 per cent of the total 
EU budget or Є 347.41 billion (at current prices).  81.54 pe r cent of this budget will be for the 
Convergence objective, 15.95 per cent for the Regional Competitiveness and Employment and 
2.52 per cent for the European Territorial  Cooperation.  10. Financial allocations per year (euro, current prices)
 
 
Total 2007 - 45.486.558.504 
Total 2008 - 46.888.796.307 Total 2009 - 48.427.192.190 
  The allocation for Bulgaria (Member States wh ich acceded on 1 January 2007) (included in 
the global data) is as follows: 
 
Total 2007 - 514.438.665 Total 2008 - 737.395.668 Total 2009 - 991.807.428 
 
 The allocation for Romania (Member States wh ich acceded on 1 January 2007) (included in 
the global data) is as follows:   Total 2007 - 1.335.023.856 
Total 2008 - 1.915.639.995 
Total 2009 - 2.576.314.547 
 11. Cohesion policy and state aid
 
  Cohesion Policy provides an integrated, stra tegic, medium term planning and financial 
framework to address the reduction of regional dispar ities by promoting development.  It does this 
through geographic and financia l targeting (concentration), gove rnance processes and evaluation 
mechanisms.  Within the context of providing fi nancial assistance to economic operators, cohesion 
policy financing must respect the state aid rules where relevant.   In line with EU cohesion policy, the new St ate aid Guidelines re-focus regional aid on the 
most deprived regions of the enlarged Union, wh ile allowing for the need to improve competitiveness 
and to provide for a smooth transition.  The use of  the Structural Funds by national authorities is 
subject to EC state aid rules.  12. Trade effects
 
 
 Because the Fund is designed to alleviate disparities between regions within the Community, 
and because the aid is paid out on a horizontal basis, within eligible regions, it is considered that the 
trade effects are minimal.   G/SCM/N/186/EEC 
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  IV. COMMON AGRICULTURAL POLICY (CAP) 
A. GENERAL OBSERVATIONS  
1. Decoupling 
 During the period from 2003 up to and including 2008, the Common Agricultural Policy was 
profoundly reformed by the introduction and extens ion of a new system of Single Payment Scheme 
(income support) in which the link between support a nd production is cut (decoupling).  Most of the 
direct aid payments to farmers previously offered have been abolished.  During the period covered by 
this notification two major sectors were added to  the list of reforms since 2003:  the fruits and 
vegetables sector and the wine sector.  2. Single Common Market Organisation 
 A Council decision on a Single Common Market Organisation  for all agricultural products, 
replacing the up to then existing 21 CMOs, wa s published as Council Regulation 1234/2007 in the 
Official Journal L 299 of 16.11.2007, page 1.  The move was a major step in the ongoing process of 
streamlining and simplifying the Common Agricultu ral Policy for the benefit of farmers, 
administrations and companies handling agricultura l products.  The existing CMOs for the different 
agricultural sectors have been replaced, in the course of the year 2008, by the new single CMO 
Regulation.  This also means that the individu al sector specific manageme nt committees have been 
replaced by one single Management Committee for the Common Organisation of Agricultural 
Markets.  The single CMO in general and the singl e Management Committee in particular replaced 
the sector specific rules/management comm ittees according to the following timetable: 
 
Date of 
Application  Sector  
1 January 2008 Fruit and vegetables, Processed Fruit and vegetables, Bananas, Live plants, Ethyl 
alcohol, Apiculture, Quota management Sugar, Other products (not mentioned in this 
table) 
1 April 2008 Dried fodder, Silkworm, Milk quota provisions 
1 July 2008 Cereals, Hops, Raw tobacco, Beef an d veal, Pigmeat, Sheep meat and goat meat, Eggs, 
Poultry meat, Seeds, Olives, Flax and hemp, Milk and milk products (with the exception 
of quota provisions) 
1 August 2008 Wine 
1 September 2008 Rice 
1 October 2008 Sugar sector, except quota management which applies from 1-1-2008 
1 January 2009 Community scales for carcass classification, Monitoring and control of exports of 
products receiving export re funds (ex.  Reg. 386/90) 
 
3. 2008 Health Check of the CAP 
 The last step in the reform process, duri ng the period covered by this notification, was 
undertaken on 20 November 2008, when the EU agri culture ministers reached a political agreement 
on the Health Check of the Common Agricultural Policy .  The Health Check further modernised, 
simplified and streamlined the CAP and removed r estrictions on farmers, thus helping them to 
respond better to signals from the market and to fa ce new challenges.  Amon g a range of measures, 
the agreement abolishes completely arable crops di rect payments and the arable set-aside obligation 
and substantially reforms intervention arrangements.  It also ends most other coupled direct payments, G/SCM/N/186/EEC 
Page 12  
 
  increases milk quotas gradually leading up to their abolition in 2015, and conve rts market intervention 
into a genuine safety net.  Ministers also agreed to increase modulation, whereby direct payments to 
farmers are reduced and the money transferred to the Rural Development Fund.  This will allow a 
better response to the new challenges and opportu nities faced by European  agriculture, including 
climate change, the need for better water manage ment, the protection of biodiversity, and the 
production of green energy.  Member States will also be able to assist dairy farmers in sensitive 
regions adjust to the new market situation.  The d ecisions of the Health Check entered into force on 
1 January 2009 with Council Regulation (EC) 72/2009  (amendments to the Single Common Market 
Organisation Regulation), Council Regulation (EC)  73/2009  (repealing and replacing the previous 
Direct Aids regulation (EC) 1872/2003) and Council Regulation (EC)  74/2009  amending 
Regulation (EC) 1698/2005 (Rural Development).  These three regulations were published in OJ L30 
of 31 January 2009 .  This SCM notification covers support in  2007 and 2008 and therefore describes 
support systems as they applied just before
 the entry in force of these three regulations implementing 
the decisions of the Health Check.  4. Cross compliance 
 All farmers claiming direct payments, whether or not they actually produce from their land, 
must abide by the condition of Cross compliance,  i.e. the respect of standards to be established by the 
Member States for keeping land in good agricultural and environmental condition (GAEC) .  
Farmers must also respect statutory management requirements set-up in accordance with EU Directives and Regulations relating to the protection of environment, public animal and plant health, 
as well as animal welfare.  The Health Check added new requirements to contribute retaining the 
environmental benefits of set-asi de and improve water management .  Failure by farmers to 
respect these conditions can result in deductions from, or complete cancellation of, CAP payments 
including direct payments.  Cross compliance applies to all direct aid payments, even when they are 
not yet part of the SPS as well as to a set of Rural Development measures and, as from 2009, certain 
wine payments.  Member States applying the SAPS have to gradually include the statutory 
management requirements into the scope of cross compliance as from 2009.  The main objectives of 
the cross compliance system include improving sustainability of European agriculture and rural areas, 
making CAP compatible with the expectations a nd concerns of society as well as strengthening the 
CAP's legitimacy and public acceptance.  Amounts of  direct payments resulting from such penalties 
revert to the EU (though Member States may retain up to 25 per cent of amounts deducted). 
 
5. Enlargement of the European Union 
 The main provisions of the Act of Accession regarding the direct payments in the new 
Member States have been integrated in Council Regulation (EC) No. 1782/2003, the "CAP Reform" 
Council Regulation (see Council Decision of 22 Ma rch 2004 adapting the Act of Accession following 
the reform of the common agricultural policy, OJ L 93 of 30 March 2004 and OJ L 157 of 21.6.2005 
p.203).   In essence, the accession negotiations resulted in three specific sets of provisions regarding 
the implementation of direct payments in the new Member States:  
• The progressive introduction (phasing in) of direct payments, from 2004 to 2013 
(from 2007 to 2016 in Bulgaria and Romania), 
 
• The possibility to opt for an easier to ma nage transitional regime, the Single Area 
Payment Scheme (SAPS), 
  G/SCM/N/186/EEC 
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  • The possibility to grant some additional support to farmers, using Complementary 
National Direct Payments (CNDPs, or so called "top-ups"). 
  During the notification period 2007-2008 two Memb ers joined the European Union:  Bulgaria 
and Romania. 
 
6. Restructuring of the CAP financing 
 The expenditure for Agriculture included in this  notification relates to payments made by the 
two new Agricultural Funds, the European Ag ricultural Guarantee Fund (EAGF) and the 
European Agricultural Fund for Rural Developmen t (EAFRD) during the years 2007 and 2008.  These 
two funds replace the European Agricultural Guid ance and Guarantee Fund (EAGGF).  For the EAGF 
(first pillar of the CAP) the SCM questionnaire is an swered in Section B below together with detailed 
information on the individual support measures in s ection C (C.1 export subsidies, C.2 Interventions 
in agricultural markets and C.3 Direct aids).  Su pport covered by the EAFRD (second pillar of the 
CAP) is treated in the same manner in sections D a nd E of this notification.  Sections F and G cover 
support for Pre-accession measures, in the field of agriculture and Rural Development, insofar as 
payments occurred in Member States of EU27. 
 
General Summary of expenditure for Agriculture and 
Rural Development (*) million EUR 
 
 2006 
EU25 2007 
EU27 2008 
EU27 
European Agricultur al Guarantee Fund 
(EAGF) 42,170.0 42,466.9 43,010.8 
Export Subsidies 2,493.6 1,444.7 925.4 
Other Intervention in markets 5,625.1 3,976.4 4,516.8 
Direct aids 34,051.3 37,045.8 37,568.6 
Of which Non-trade distorting direct aids 16,263.3 30,803.1 31,948.2 
European Agricultural Fund for Rural 
Development (EAFRD)  11,258.6 10,448.4 10,521.3 
Rural development 2007-20013 - 6,080.6 8,538.8 
Rural Development completion of previous 
periods 11,258.6 4,367.8 1,982.5 
Pre-accession (Sapard and Ipard) 214.0 285.0 145.0 
 
(*) European Agricultural Guidance and Guarantee Fund, Guarantee section (EAGGF) for financial year 
2006.  European Agricultural Guarantee Fund (EAGF) for financial years 2007 and 2008. 
 
7. Information on the World Wide Web 
 General information on the Common Ag ricultural policy can be found at: 
 
 http://ec.europa.eu/agriculture/index_en.htm  (English) 
 http://ec.europa.eu/agriculture/index_fr.htm  (French) 
 http://ec.europa.eu/agriculture/index_es.htm  (Spanish) 
  The legislation referred to in this notification is publicly available at the following websites: 
 
 http://eur-lex.europa.eu/en/index.htm
 (English) 
 http://eur-lex.europa.eu/fr/index.htm  French) 
 http://eur-lex.europa.eu/es/index.htm  (Spanish) G/SCM/N/186/EEC 
Page 14  
 
   
 The EC budget can be consulted at:  http://eur-lex.europa.eu/budget/www/index-en.htm
 (English) 
 http://eur-lex.europa.eu/budget/www/index-fr.htm  (French) 
 http://eur-lex.europa.eu/budget/www/index-es.htm  (Spanish) 
 
B. EUROPEAN AGRICULTURAL GUARANTEE FUND(EAGF) 
1. Title of the programme  
 
Common Agricultural Policy – Direct aids and intervention in markets ("First Pillar"). 
 
2. Period covered by the notification  
 
1 January 2007 - 31 December 2008. 
 
3. Policy objective and/or purpose of the programme  
 
The policy objective aims at: 
 
• providing the farming community with a fair standard of living, 
• supplying consumers with food at reasonable prices and 
• promoting effective use of resources. 
 
4. Background and authority for the programme  
  Treaty establishing the European Community, and in particular Articles 36, 37 and 299(2) thereof.  5. Form of assistance granted – Grants from Community budget for
 
 
The aid is normally in the form of grants or loans. 
 6. To whom and how the assistance is provided
 
 
Payments are made to economic actors in the sect or, for the large part agricultural producers. 
 7. Total expenditure under the programme
 
 
European Agricultural Guarantee Fund (*) 
 - financial year 
 
 2006 
EU25 2007 
EU27 2008 
EU27 
Intervention in markets 5,625.1 3,976.4 4,516.8 
Export subsidies 2,493.6 1,444.7 925.4 
Direct aids 34,051.3 37,045.8 37,568.6 
Total EAGF 42,170.0 42,466.9 43,010.8 
Of which Non-trade distorting direct aids 16,263.3 30,803.1 31,948.2 
 
(*) European Agricultural Guidan ce and Guarantee Fund, Guarantee section (EAGGF) for financial 
year 2006.  European Agricultural Guarantee Fund (EAGF) for financial years 2007 and 2008.  G/SCM/N/186/EEC 
 Page 15 
 
 
  8. Duration of the programme  
  The Health Check 2008 is to be implemente d from 1.1.2009 onwards.  This notification 
describes the situation just before  entry into force of the Health  Check, as this SCM notification 
concerns support granted in 2007 and 2008. 
 
9. Trade effects
 
 
In 2008, 74 per cent of the support provided did have no or at most minimally trade distorting 
effects. 
 
C. MEASURES FINANCED THROUGH THE EAGF  ("FIRST PILLAR " OF THE CAP) 
 This SCM notification covers support in  2007 and 2008 and therefore describes support 
systems as they applied just before  the entry in force of the regulations implementing the decisions of 
the Health Check (see A.3). 
 
1. Export refunds 
 For certain of the sectors governed by a common market organisation, the Common 
Agricultural Policy provides for the possibility of  granting export refunds.  The purpose of export 
refunds is to cover the difference between Community  prices and international trade prices in order to 
enable exports to be effected at international trade prices.  The refund is the same for the whole of the 
Community;  a differential may be applied according to  destination or time (months of delivery).  The 
amount of the refund is fixed periodically by the Commission.  The periodicity of the fixing is different for each sector because of  the special characteristics of each sector.  In order to facilitate 
export operations, in the case of the majority of products a system has been introduced whereby 
refunds can be fixed in advance.  The refund is paid to the exporter.  The total amount of export 
refunds financed by the EAGGF in 2006, 2007 and 2008 are as follows: 
 
Export subsidies (EAGF payments) (*) Є million 
 
Products 2006 EU25 2007 EU27 2008 EU27 
Cereals 127.7 41.8 9.7 
Sugar 1,116.9 509.3 501.3 
Rice 1.0 0.1 - 
Olive Oil 0.0 0.2 - 
Fruits and vegetables 26.4 21.7 18.6 
Wine 19.2 14.0 14.5 
Dairy products 724.9 513.4 28.8 
Bovine meat 118.4 46.2 33.1 
Pigmeat 19.5 20.3 99.0 
Eggs and poultry 61.2 90.8 101.5 
Non Annex I Products 274.1 185.2 118.1 
Food aid 4.4 1.6 0.6 
Total expenditure 2,493.6 1,444.7 925.4 
 
(*) European Agricultural Guidan ce and Guarantee Fund, Guarantee section (EAGGF) for financial 
year 2006.  European Agricultural Guarantee Fund (EAGF) for financial years 2007 and 2008. 
 G/SCM/N/186/EEC 
Page 16  
 
  2. Interventions in agricultural markets per sector 
 In order to stabilise markets a nd assure the agricultural population of an equitable standard of 
living, the Common Agricultural Policy provides, in the market organisation regulations for the different products, intervention and aid measures that vary according to  the nature of the product and 
the special characteristics of the market.  This secti on C.2 deals with spending for the interventions in 
agricultural markets per sector in this context, section C.3 will address Direct Payments in a similar 
way.  Many of the support schemes represented in this  section C.2 of this notification have their legal 
basis in Council Regulation (EC) No. 1234/2007 of 22 October 2007 establishing a common 
organisation of agricultural markets and on specific  provisions for certain agricultural products  
(Single CMO Regulation, Official Journal L 299, 16/11/2007 P.1).  
 
Interventions in agricultural markets (EAGF budget – payments) (*) Є million 
 
Products 2006 EU25 2007 EU27 2008 EU27 
Cereals 435.1 -175.1 -61.0 
Rice -3.2 -0.8 0.0 
Food programs  224.4 247.6 344.4 
Sugar 403.8 -53.8 -25.8 
Sugar restructuring (**) - 551.7 1,284.1 
Olive Oil 29.5 64.4 45.1 
Textile plants 935.1 20.0 21.0 
Fruits and vegetables 1,345.2 1,228.2 1,134.4 
Wine 1,467.9 1,439.1 1,155.5 
Promotion 36.7 51.8 52.0 
Other plant products 311.0 363.5 375.4 
Dairy products 284.7 124.8 119.2 
Beef and veal 134.5 52.3 14.1 
Sheep and goat 0.0 0.0 0.0 
Pigmeat 0.0 42.2 37.0 
Eggs and poultry 0.0 0.0 0.0 
Other animal products 20.4 20.5 21.3 
Total expenditure 5,625.1 3,976.4 4,516.8 
 
(*) European Agricultural Guidan ce and Guarantee Fund, Guarantee section (EAGGF) for financial 
year 2006.  European Agricultural Guarantee Fund (EAGF) for financial years 2007 and 2008. 
(**) Sugar restructuring aids and other aids are not funded by the EAGF budget, but by the temporary 
restructuring amounts in the sugar sector, as set out in article 11 of Council Regulation 320/2006, which are paid by operators in each Member State who hold sugar, insulin syrup and isoglucose 
production quotas for the marketing years 2006/07 to 2008/09. 
  G/SCM/N/186/EEC 
 Page 17 
 
 
  2.1 Cereals 
 
 The legal basis for expenditure is Counc il Regulation 1784/2003 of 29 September 2003 
(OJ L270 of 21.10.2003, p78) repealed by  regulation 1234/2007 (Single CMO regulation). 
 
Public intervention cereals  
  As regards the cereals-sector the reference price for is Є 101,31/tonne, increased every month 
as follows:  
November:  by Є 0.46 / tonne, 
December:  by Є 0.92 / tonne, 
January:  by Є 1.38 / tonne, 
February:  by Є 1.84 / tonne, 
March:  by Є 2.30 / tonne, 
April:  by Є 2.76 / tonne, 
May:  by Є 3.22 / tonne, 
June:  by Є 3.22 / tonne. 
  The reference price valid for maize and grain sorghum in June shall remain valid in July, 
August and September of the same year.  Interven tion is applicable to common wheat, durum wheat, 
barley, maize and sorghum and it will be open as follows: 
 
• from 1 August to 30 April in the case of Greece, Spain, Italy and Portugal; 
• from 1 December to 30 June in the case of Sweden; 
• from 1 November to 31 May in the case of the other Member States. 
  However, buying into public intervention of maize can only be carried out within the following limits: 
 
• 700 000 tonnes for the marketing year 2008/2009; 
• 0 tonnes as from the marketing year 2009/2010. 
  The intervention price is equal to the reference price.  In the event of the intervention period 
in Sweden leading to the diversion of such cer eals from other Member States into intervention in 
Sweden, the Commission shall adopt measures to rectify the position. 
 
Production refund for starch
 
  A production refund may be granted for starch obtained from maize, wheat or potatoes and for certain derivatives used in the manufacture of cer tain products, a list of which is drawn up by the 
Commission. 
  In the absence of significant domestic producti on of other cereals for the production of starch, 
a production refund is also given for 50.000 tonnes of starch obtained from barley and oats in Finland 
and 10.000 tonnes in Sweden, at least insofar as this does not entail an increase in the level of starch 
production from those two cereals.  The refund is periodically fixed by the Commission. 
 
2.2 Rice 
 
 The legal basis for expenditure is Counc il Regulation 1785/2003 of 29 September 2003 
(OJ L270 of 21.10.2003, p96) repealed by  regulation 1234/2007 (Single CMO regulation). G/SCM/N/186/EEC 
Page 18  
 
   
 The intervention price for paddy rice has been set at Є 150/t since the beginning of 
the 2004/05 marketing year.  The intervention agencies are obliged to buy in any rice harvested in the 
Community and offered to them, provided offers are made during the open period (April - July) and 
comply with certain conditions, in particular in respect of quality and quantity.  The quantities that 
can be bought by the intervention agencies are limi ted to 75,000 tonnes per year.  The intervention 
buying-in price is fixed for a given standard qualit y.  If the quality offered differs from the standard 
quality, the price is adjusted by the application of pr ice increases or reductions.  It is applicable in all 
the Community intervention centres fixed at  the beginning of the marketing year. 
 2.3 Sugar 
 
 The legal basis for expenditure is Council Regulation 318/2006 of 20 February 2006 
(OJ L58 of 28.2.2006, p1) repealed by regulation 1234/2007 (Single CMO regulation).  
Public intervention
 
  A reform of the sector was implemented as from 1 July 2006.  There is a 36 per cent price cut 
over four years beginning in 2006/07.  
Reference price for white sugar (EUR/t) 
 
 2006/07 2007/08 2008/09 2009/10 
Reference price for white  sugar 631.9 631.9 541.5 404.4 
Reference price for raw sugar 496.8 496.8 448.8 335.2 
 
 Public intervention shall be open throughout the marketing years 2008/2009 and 2009/2010 within the limits of 600 000 tonnes, expressed in wh ite sugar, per marketing year.  The intervention 
price for sugar is 80 per cent of the reference price;   however the intervention price shall be increased 
or reduced according to quality.  At the end of 2 009/10 public intervention wi ll be abolished and the 
intervention price will be replaced by a reference price. 
 Private storage
 
 
There is a private storage system as a safety net in case the market price falls below the 
reference price.  For the reduced support price fa rmers will receive compensation at an average of 
64.2 per cent based on the final price cut of 36 pe r cent.  The compensation will be decoupled and 
included in the Single Payment Scheme.  Quota system
 
 
 The quotas for the production of sugar, isogluc ose and inulin syrup at national or regional 
level are from the 2008/09 marketing year onwards fixed as follows (1000 t):  
Member State or region  Sugar Isoglucose Inulin syrup 
Belgium 676,235.0 114,580.2 0 
Bulgaria 0 89,198.0  
Czech Republic 372,459.3   
Denmark 372,383.0   
Germany 2,898,255.7 56,638.2  
Ireland 0   
Greece 158,702.0 0  
Spain 630,586.2 123,423.4  
France (metropolitan)  2,956,786.7   0  G/SCM/N/186/EEC 
 Page 19 
 
 
  Member State or region  Sugar Isoglucose Inulin syrup 
French overseas departments 480,244.5   
Italy 508,379.0 32,492.5  
Latvia 0   
Lithuania 90,252.0   
Hungary 105,420.0 220,265.8  
Netherlands 804,888.0 0 0 
Austria 351,027.4   
Poland 1,405,608.1 42,861.4  
Portugal (mainland) 0 12,500.0  
Autonomous region Azores  9,953.0   
Romania 104,688.8 15,879.0  
Slovenia 0   
Slovakia 112,319.5 68,094.5  
Finland 80,999.0 0  
Sweden 293,186.0   
United Kingdom 1,056,474.0 43,591.6  
TOTAL 13,468,847.2 819,524.6  0 
 
Supplementary quotas for isoglucose 
 
Member State Additional quota (tonnes) 
Italy 60,000 
Lithuania 8,000 
Sweden 35,000 
 
 Member States allocate a quota to each undertak ing producing sugar, isoglucose or inulin 
syrup established in its territory and approved u nder certain conditions.  For each undertaking, the 
allocated quota shall be equal to the quota under Regulation (EC) No. 318/2006 which was allocated to the undertaking for the marketing year 2007/2008. 
 
 In the marketing year 2008/2009 an additiona l isoglucose quota of 100 000 tonnes is added to 
the quota of the preceding marketing year.  This incr ease does not concern Bulgaria and Romania.  In 
the marketing year 2008/2009 an additional isogluc ose quota of 11 045 tonnes for Bulgaria and of 
1 966 tonnes for Romania shall be added to the quota of the preceding marketing year.  Italy, 
Lithuania and Sweden may allocate, upon request by any undertaking established on their respective 
territories, a supplementary isoglucose quota in the marketing years 2008/2009 and 2009/2010.  
  The sugar, isoglucose or inulin syrup produced during a marketing year in excess of the quota may be:  
• used for the processing of certain products; 
• carried forward to the quota production of the next marketing year; 
• used for the specific supply regime for the outermost regions;  or 
• exported within the quantitative limit fixed by the Commission respecting the 
commitments resulting international agreements. 
 G/SCM/N/186/EEC 
Page 20  
 
   Other quantities are subject to a surplus levy: 
 
• surplus sugar, surplus isoglucose and su rplus inulin syrup produced during any 
marketing year, except for quantities carried forward to the quota production of the following marketing year and stored; 
• industrial sugar, industrial isoglucose and industrial inulin syrup for which no proof 
has been supplied, by a date to be determ ined by the Commission, that it has been 
processed into one certain products referred; 
• sugar and isoglucose withdrawn from the market and for which specific obligations 
are not met. 
  The surplus levy shall be fixed by the Comm ission at a sufficiently high level in order to 
avoid the accumulation of quantities.  The surplus levy  referred is charged by the Member State to the 
undertakings on its territory according to the quantities of production established for those 
undertakings for the marketing year concerned.  Restructuring scheme
 
 
 A voluntary restructuring scheme lasting 4 years for EU sugar factories and isoglucose and 
inulin syrup producers was created, consisting of a payment to encourage factory closure and the 
renunciation of quota as well as to cope with the soci al and environmental impact of the restructuring 
process.  This payment will be Є 730 per tonne in years one and two,  falling to 625 in year three, and 
520 in the final year.  There is also the possibilit y to use some of this fund to compensate beet 
producers affected by the closure of factories.  Both these payments will be financed by a levy on 
holders of quota, lasting three years.  
2.4 Olive Oil 
 
 The legal basis for expenditure is Council Regulation 865/2004 of 29 April 2004 (OJ L161 of 
30.4.2004, p97) repealed by regulation 1234/2007 (Single CMO regulation). 
  The European Commission pursues the implementation of a strategy for the quality of olive 
oil adopted in 2001.  The olive oil regulatory "regime" sets marketing standards for olive oil 
concerning the packaging, labelling, presentation a nd advertising required for marketing in the EU, 
thus providing safeguards for consumers and allowing  producers to maximise the benefits of selling a 
quality product.  Member States may use up to 10  per cent of their national envelope for quality 
measures under activity programmes carried out by operator organisations.  
2.5 Textile plants 
 Aid for processing the straw into fibre
 
  The legal basis for expenditure is Council Re gulation 1673/2000 of 27 July 2000 (OJ L193 of 
29.7.2000, p16) repealed by regulation 1234/2007 (Single CMO regulation).  
 An aid for processing the straw into fibre is gran ted in order to ensure the maintenance of the 
economical activity in this sector.  The aid is granted to authorised primary processors on the basis of the quantity of fibre actually obtained from straw.   Nevertheless, in cases where the farmer retains 
ownership of the straw, which he is having pro cessed under contract, and proves that he has placed 
the fibres obtained on the market, the aid is granted to the farmer.  A sale/purchase contract must be  G/SCM/N/186/EEC 
 Page 21 
 
 
  concluded between the farmer and the authorized pr ocessor.  In cases where they both are one and the 
same person, the contract is replaced by a processing commitment.   The amount of the aid distinguishes between high quality long flax fibre and low quality fibres.  For long flax fibre the aid is Є 160/t for the 2008/2009 marketing and Є 200/t for the 
marketing year 2009/2010 and onwards.  For short flax and hemp fibre the aid is Є 90/t for the 
2008/09 marketing year.  The aid is granted with in a maximum guaranteed quantity per marketing 
year of 80 878 tonnes for long fl ax fibre and 147.265 tonnes for short flax and hemp fibre.  These 
amounts are apportioned among the Member St ates as national guaranteed quantities. 
 
Cotton - National restructuring programmes for the cotton sector
 
  Community funds are attributed to Member Stat es to finance specific restructuring measures 
to assist the cotton sector.  The restructuring progr ammes must be compatible with Community law 
and consistent with the activities, policies and prio rities of the Community.  Producing Member States 
submit their restructuring programmes every four year s and for the first time by 1 January 2009.  The 
annual budget for the restructuring programme per Member State from the financial year 2010 
onwards shall be as follows Є 4.0 million for Greece and Є 6,134 million for Spain. 
  The restructuring programmes contain on e or more of the following measures: 
 
(a) full and permanent dismantling of ginning facilities; 
(b) investments in the ginning industry; 
(c) participation of farmers in cotton quality schemes; 
(d) information and promotion activities; 
(e) aid to machinery contractors, not exceeding losses incurred. 
 Aid is not granted for research projects a nd measures to support research projects or for 
measures which are eligible for Community sup port under Regulation (EC) No. 1698/2005 (Rural 
Development).  
2.6 Fruits and vegetables 
  A new regulation of the Fruit and Vegetables Sector is in place as from 1 January 2008 
(Council Regulation 1182/2007 of 26 September 200 7, OJ L273 of 17.10.2007, p1 as well as 
amendments to earlier legislation through the Single CMO Regulation 1234/2007).   The aim of the reforms is to improve the co mpetitiveness and market orientation of the fruit 
and vegetable sector, reduce income fluctuations  resulting from crises, promote consumption – so 
contributing to improved public h ealth – and enhance environmental safeguards.  The new measures 
cover:  
• Encouraging growers to join Producer Organisa tion.  POs have a set of tools for crisis 
management. 
 
• Integrating the fruit and vegetable sector  into the Single Payment Scheme; 
 G/SCM/N/186/EEC 
Page 22  
 
  • Requiring a minimum level of environmental spending; 
 
• Increasing EU funding for promotion and organic production; 
 
• Abolishing export subsidies for fruit and vegetables. 
 Producer Organisations (POs
) 
 
 POs gained greater flexibility and their rul es are simplified There is be additional support 
(60 per cent Community co-financing rather than of 50 per cent) in areas where production covered by POs is less than 20 per cent, and, in particul ar, in the new Member States, to encourage the 
creation of POs.  Member States and POs de velop Operational Programmes based on a national 
strategy. 
 
Crisis Management
 
  Crisis management is organised through Produ cer Organisations (50 per cent financed by the 
Community budget).  Tools include green harves ting/non-harvesting, promotion and communication 
tools in times of crisis, training, harvest insuran ce, help in securing bank loans and financing of the 
administrative costs of setting up mutual funds.  Withdrawals for free distribution to schools etc will 
be 100 per cent paid by the Community.  Community ai d to POs will remain limi ted to 4.1 per cent of 
the total value of marketed produce, but this may ri se to 4.6 per cent provided that the excess is used 
only for crisis prevention and management.  For three years, state aid may be granted to extend crisis 
management measures to non-members who enter in to a contract with a PO.  Compensation for 
non-members will be no more than 75 per cent of the Community support received by PO members. Inclusion of fruit and vegetables in the Single Payment Scheme (SPS)
 
  See Section 3.1 of this notification.  
Environmental measures
 
  The inclusion of fruit and vegetables in the SPS means that http://ec.europa.eu/agriculture/envir/index_en.htm - crosscom
 (i.e. mandatory environmental 
standards, see also the section on direct payments in  this notification) is compulsory for those farmers 
receiving direct payments.  In addition, POs de vote at least 10 per cent of expenditure in each 
Operational Programme to environmental measures.  There is a 60 per cent Community co-financing 
rate for organic production in each Operational Programme.  Encouraging greater consumption
 
 
Higher consumption of fruit and vegetables was one of the goals identified in the 
Commission's White Paper on Nutrition.  POs can include promotion of fruit and vegetable consumption in their operational programmes.  Th ere is an additional € 6 million under the general 
promotion regulation for the promotion of fruit an d vegetables targeted at children in educational 
establishments.  There is an € 8 million budget for fre e distribution of fruit and vegetables to schools, 
hospitals and charitable bodies, which will be 100 per cent financed by the Community up to a limit 
of 5 per cent of the quantity marketed by a PO.   G/SCM/N/186/EEC 
 Page 23 
 
 
  Transitional soft fruit payment  
  To allow producers of strawberries and r aspberries for processing to adapt to market 
circumstances, they receive a transitional direct  payment worth € 230 per hectare for maximum period 
of 5 years for a set number of hectares.  Member states may pay a national top-up so that the total 
shall not exceed € 400/hectare. 
 Separate fruit and vegetable paymen t for New Member States applying SAPS
 
  Countries applying the Single Area Payment Scheme (SAPS, see also the section on direct 
aids in this notification) can introduce a decoupl ed payment to producers who historically produced 
fruit and vegetables.  
2.7 Wine 
  Adopted by the Council of Ministers in April 2008, http://eur-
lex.europa.eu/LexUriServ/LexUriSer v.do?uri=OJ:L:2008:148:0001:0061:EN:PDF  (Official Journal 
L 148 of 06/06/2008, Page1)  thoroughly  reorganises the way the EU wine market is managed in order 
to ensure that EU wine production matches demand, to eliminate wasteful public intervention in EU 
wine markets and to make European wine more competitive.  Most of the new rules apply from 
1 August 2008 ( http://eur-lex.europa.eu/LexUriServ/LexU riServ.do?uri=CELEX:32008R0555:EN:NOT ).  
Some of the new rules (mainly wine-making prac tices and labelling) will apply from 1 August 2009.  
The following elements constitute the support in the reformed wine sector. 
 Phasing-out of distillation schemes
 
 
 There will be a gradual withdrawal of distillation subsidies.  This means that for the 
emergency distillation funding falls from maximum 20 per cent to maximum 5 per cent of the national 
funding budget over four years to 2012.  The funding  for distillation into alcohol for use in spirits is 
phased out over four years.  Payments in the transition period will be replaced by a single flat-rate payment per producer.  
National financial envelopes
 
  Redirecting the funds for distillation allows th e attribution of Community funds to Member 
States and the use of those funds by Member Stat es through national suppor t programmes to finance 
specific support measures to assist the wine sector .  Member States are responsible for the support 
programmes and ensure that they are internally consistent.  For the first time by 30 June 2008, 
Member States submitted to the Commission draft five-year support programmes containing measures in accordance with a Community menu of measures.  The support measures are drawn up at the geographical level which the Member States deem  most appropriate.  Support programmes shall 
contain one or more of the following measures:  
• Single Payment Scheme support
: 
 See Section 3.1 of this notification. 
 
• Promotion on third-country markets
: 
 
This support covers information or pr omotion measures concerning Community 
wines in third countries, thereby improving their competitiveness in those countries.  
The support relate to wines with a protected designation of origin or geographical G/SCM/N/186/EEC 
Page 24  
 
  indication or wines with an indication of the wine grape variety.  The Community 
contribution to promotion activities shall not exceed 50 per cent of the eligible expenditure.  The measur es may consist only of: 
 
o public relations, promotional or adve rtisement measures, in particular 
highlighting the advantages of the Community products, especially in terms of 
quality, food safety or e nvironmental friendliness; 
o participation at events, fairs or exhi bitions of international importance; 
o information campaigns, in particular on the Community systems covering 
designations of origin, geographical indications and organic production; 
o studies of new markets, necessary for the expansion of market outlets; 
o studies to evaluate the results of the promotional and information measures. 
 
• Restructuring and conversion of vineyards
: 
 
The objective of measures relating to the restructuring and conversion of vineyards is to increase the competitiveness of wine producers.  Restructuring and conversion of vineyards is supported if Member States submit the inventory of their production 
potential.  Support for restructuring and conversion of vineyards may only cover one 
or more of the following activities: 
 
o varietal conversion, including by means of grafting-on; 
o relocation of vineyards; 
o improvements to vineyard management techniques. 
 
The normal renewal of vineyards which have co me to the end of their natural life is 
not supported.  Support for restructuring and conversion of vineyards may only take the following forms: 
 
o Compensation of producers for the loss of revenue due to the implementation 
of the measure.  Compensation of producers for the loss of revenue may cover up to 
100 per cent of the relevant loss. 
o Contribution to the costs of restructuring and conversion.  The Community 
contribution to the actual costs of restructuring and conversion of vineyards does not exceed 50 per cent.  In regions classified as convergence regions in accordance with 
Regulation (EC) No. 1083/2006, the Community contribution to the costs of 
restructuring and conversion does not exceed 75 per cent. 
 
o Green harvesting
: 
Green harvesting means the total destructi on or removal of grape bunches while still 
in their immature stage, thereby reducing the yield of the relevant area to zero.  
Support for green harvesting contributes to restoring the balance of supply and 
demand in the market in wine in the Community  in order to prevent market crises.  It 
may be granted as compensation in the form of a flat rate payment per hectare to be determined by the Member State concerned.  The payment does not exceed 50 per cent of the sum of the direct costs of the destruction or removal of grape bunches and 
the loss of revenue related to the dest ruction or removal of grape bunches. 
  G/SCM/N/186/EEC 
 Page 25 
 
 
  o Mutual funds : 
Support for the setting-up of mutual funds provides assistance to producers seeking to 
insure themselves against market fluctuations .  This support is granted in the form of 
temporary and degressive aid to cover the administrative costs of the funds. 
 
o Harvest insurance : 
Support for harvest insurance contributes to safeguarding producers' incomes where 
these are affected by natural disasters, a dverse climatic events, diseases or pest 
infestations.  Support for harvest insurance ma y be granted in the form of a financial 
Community contribution which must not exceed: 
 
(a) 80 per cent of the cost of the insura nce premiums paid for by producers for 
insurance against losses as a result of a dverse climatic events which can be 
assimilated to natural disasters; 
 
(b) 50 per cent of the cost of the insura nce premiums paid for by producers for 
insurance against: 
 
(i) losses referred to in (a) and against other losses caused by adverse climatic 
events; 
(ii) losses caused by animals, plant diseases or pest infestations. 
 
Support for harvest insurance may only be  granted if the insurance payments 
concerned do not compensate producers for mo re than 100 per cent of the income loss 
suffered, taking into account any compensation the producers may have obtained from other support schemes related to the insu red risk.  Support for harvest insurance 
must not distort competition in the insurance market. 
 
o Investments
: 
Support may be granted for tangible or intangible investments in processing facilities, 
winery infrastructure and marketing of wine which improve the overall performance 
of the enterprise and concern one or more of the following: 
o production or marketing; 
o development of new products, processes and technologies 
 
Support under paragraph at its maximum ra te is limited to micro, small and 
medium-sized enterprises. 
 
o by-product distillation : 
 
Support may be granted for the voluntary or obligatory distillation of by-products of wine-making.  The amount of aid is fixed per per cent volume and per hectoliter of alcohol produced.  No aid is paid for the volume of alcohol contained in the 
by-products to be distilled which exceeds 10 per cent in relation to the volume of 
alcohol contained in the wine produced.  The maximum applicable aid level is based on collection and processing costs.  Th e alcohol resulting from the supported 
distillation is used exclusively for industri al or energy purposes so as to avoid 
distortion of competition. 
 G/SCM/N/186/EEC 
Page 26  
 
  • Potable alcohol distillation
: 
 
Support may be granted until 31 July 2012 to  producers, for wine which is distilled 
into potable alcohol in the form of a per-hectare aid.  The relevant contracts 
concerning the distillation of wine as well as the relevant proofs of delivery for 
distillation are submitted before support is granted. 
 
• Crisis distillation : 
 
Support may be granted until 31 July 2012 fo r voluntary or obligatory distillation of 
surplus wine decided upon by Member States in justified cases of crisis so as to reduce or eliminate the surplus and at the same time ensure supply continuity from 
one harvest to the next.  The alcohol r esulting from the supported distillation is used 
exclusively for industrial or energy purpo ses so as to avoid distortion of competition. 
 
The share of the available budget used for the crisis distillation measure does not exceed the following percentage shares as calculated against the globally available 
funds:  20 per cent in 2009, 15 per cent in 2010, 10 per cent in 2011 and 5 per cent in 
2012.  Member States may increase the available funds for the crisis distillation measure beyond the annual ceilings by way of contributing national funds in accordance with the following limits (expr essed in terms of percentage of the 
respective annual ceiling given in paragraph 4):  5 per cent in the wine year 2010, 10 per cent in the wine year 2011 and 15 per cent in the wine year 2012. 
 
From 1 August 2012 Member States may grant national aid to wine producers for the voluntary or mandatory distillation of wine in  justified cases of crisis.  The aid must 
be proportionate and allow this crisis to  be addressed.  The overall amount of aid 
available in a Member State in any given year for such aid shall not exceed 15 per 
cent of the globally available funds per Me mber State for that year.  The alcohol 
resulting from distillation must be used exclus ively for industrial or energy purposes 
so as to avoid distortion of competition. 
 
• Use of concentrated grape must
: 
 
Support may be granted until 31 July 2012 to wine producers who use concentrated 
grape must including rectified concentrat ed grape must to increase the natural 
alcoholic strength of product.  The amount of the aid is fixed per per cent volume 
potential alcoholic strength and per hecto liter of the must used for enrichment. 
 Grubbing-up
: 
 
 A grubbing-up scheme applies until the end of the wine year 2010/2011.  The grubbing-up premium may be granted only if the area c oncerned complies with the following conditions: 
 
• it did not receive Community or national support for restructuring and 
conversion-type measures within the 10 wine years preceding the grubbing-up 
request; 
 
• it did not receive Community support under any other common market organisation 
within the five wine years preceding the grubbing-up request; 
 
• it is tended;  G/SCM/N/186/EEC 
 Page 27 
 
 
   
• it is not smaller than 0,1 hectare.  However,  that minimum size may be 0,3 hectare, if 
a Member State so decides, for certain administrative regions of that Member State in which the average of the area planted w ith vines of a wine holding exceeds one 
hectare; 
 
• it has not been planted in violation of any applicable Community or national 
provision; 
 
• it is planted with a wine certain grape varieties. 
  The specific amount of the grubbing-up premium shall be established by Member States within the certain scales on the basis of the histori cal yields per holding.  There is a maximum annual 
budget for the grubbing-up scheme.  A single percenta ge for acceptance of application of the amounts 
notified shall be set if the total amount notified to the Commission by Memb er States exceeds the 
available budget resources.  By 1 February each year, Member States accept the applications:  
• for the areas applied for in their entirety if  the Commission has not set a percentage of 
acceptance;  or 
 
• for the areas resulting from the application of the percentage of acceptance based on 
objective and non-discriminatory criteria and in accordance with the following 
priorities: 
 
o Member States give priority  to applicants whose application for the grubbing-up 
premium covers their entire vineyard; 
o Member States give second priority to applicants who are not less than 55 years 
old, or older where Member States so provide. 
  Farmers who participate in the grubbing- up scheme receive, in the year following the 
grubbing-up, payment entitlements equal to the numbe r of hectares for which they have received a 
grubbing-up premium.  The unit value of these paym ent entitlements must be equal to the regional 
average of the value of the entitlements of the corr esponding region.  However, the unit value shall in 
any case not exceed Є 350/ha. 
  Member States may grant complementary national aid not exceeding 75 per cent of the applicable grubbing-up premium in addition to the grubbing-up premium granted.  2.8 Promotion 
 
 Legal basis is Council Regulation (EC) No. 3/2008 of 17 December 2007 on information 
provision and promotion measures for agricultural products on the internal market and in third countries (Official Journal L 003, 05/01/2008 P.1). 
 
 The EU can assist in financing measures for th e promotion of agricultural products and food 
on the EU Internal market and in third countries.   These measures can consist of public relations, 
promotional or publicity actions, par ticipation at events and fairs, in particular, those that highlight the 
advantages of EU products, especially in terms of quality, hygiene, food safety, nutrition, labelling, 
animal welfare or environmental friendliness of their production.  Also covered are information 
campaigns on the EU system of protected designations of origin (P.D.O), protected geographical 
indications (P.G.I) and traditional speciality guara nteed (T.S.G.), information on EU quality and 
labelling systems and on "organic farming". G/SCM/N/186/EEC 
Page 28  
 
   
 The EU co-finances these measures with an annual budget of approximately € 50 million and by an amount not exceeding 50 per cent of the total cost of approved programme, the remainder being 
paid by the professional/inter-branch organisations th at proposed them and by the Member States 
concerned.  Interested professional organisati ons must send their proposals to the competent 
Authorities of the Member States following the publi cation of a call for proposals.  These then submit 
to the Commission the list of programmes they have selected for final decision.  
2.9 Other plant products  
 Dried fodder
 
  Legal basis:  Council Regulation (EC) No. 1234/2007 of 22 October 2007 establishing a 
common organisation of agricultural markets and on specific provisions for certain agricultural 
products (Single CMO Regulation, Offi cial Journal L 299, 16/11/2007 P.1).  
 
 An aid for processing in respect of the products of the dried fodder sector is granted to undertakings processing products of that sector falling into at least one of the following categories: 
 
• processors who have concluded contracts w ith producers of fodder for drying.  Where 
a contract is a special-order contract for processing of fodder delivered by a producer, it shall include a clause containing an ob ligation for the processing undertakings to 
pay the producer the aid received for the quantity processed under the contract; 
 
• undertakings which have processed their own crop or, in the case of a group, that of 
its members; 
 
• undertakings which have obtained their supp lies from natural or legal persons having 
concluded contracts with producers of fodder for drying. 
 
 The aid is paid in respect of dried fodder that has left the processing plant and meets the 
following requirements:  
• its maximum moisture content is from 11 per cent to 14 per cent which may vary 
depending on the presentation of the product; 
 
• its minimum total crude protein content in the dry matter is not less than a certain 
percentage; 
 
• it is of sound and fair  merchantable quality. 
  The aid is set at Є 33/tonne.  Where during a marketing year the volume of dried fodder for 
which aid is claimed exceeds the maximum guarant eed quantity 4.960.723 tonnes, the aid shall be 
reduced.  The reduction shall be set by the Commi ssion at a level ensuring that budget expenditure 
does not exceed that which would have been atta ined had the maximum guaranteed quantity not been 
exceeded.  POSEI – excluding direct aids
 
 
 Legal basis:  Council Regulation (EC) No. 24 7/2006 of 30 January 2006 laying down specific 
measures for agriculture in the outermost regions of  the Union (Official Journal L 042, 14/02/2006 
P.1).  G/SCM/N/186/EEC 
 Page 29 
 
 
   
 Specific measures on agriculture to remedy the difficulties caused by the remoteness, 
insularity, distant location, small surface area, terrain, difficult climate and dependence on a limited 
number of products of the regions of the Union re ferred to in Article 299(2) of the Treaty, the 
"outermost regions". 
 
Community Tobacco Fund  
  Legal basis:  Council Regulation (EC) No. 1234/2007 of 22 October 2007 establishing a 
common organisation of agricultural markets and on specific provisions for certain agricultural 
products (Single CMO Regulation, Offi cial Journal L 299, 16/11/2007 P.1).  
  Aims to improve public awareness of the harmful effects of all forms of tobacco consumption, in particular thr ough information and education, suppor t for the collection of data to 
establish tobacco consumption patterns and to con duct epidemiological studies on nicotinism in the 
Community, and a study on preventing nicotinism.  Th is combined with specific measures to help 
tobacco growers to switch to other crops or other economic activities that create employment and studies of the possibilities for tobacco growers to do so.  
2.10  Milk and dairy products 
  Legal basis:  Council Regulation 1255/99 repealed by Council Regulation (EC) 
No. 1234/2007 of 22 October 2007 establishing a common organisation of agricultural markets and on specific provisions for certain agricultural products (Single CMO Regulation, Official Journal L 299, 
16/11/2007 P.1).  
 
Public intervention and private storage
 
  Public intervention is available for butter produ ced directly and exclusively from pasteurised 
cream in an approved undertaking of the Community of a minimum butterfat content, by weight, of 
82 per cent and a maximum water content, by weight , of 16 per cent and for skimmed milk powder of 
top quality made from milk in an approved undertak ing in the Community by the spray process, with 
a minimum protein-content of 34,0 per cent by weight  of the fat free dry matter.  The reference prices 
are Є 246,39 per 100 kg for butter and Є 169,80 per 100 kg for skimmed milk powder. 
  For butter, public intervention is open during the period 1 March to 31 August.  Where the 
quantities offered for intervention during the period laid down in paragraph 1 exceed 30 000 tonnes, 
the Commission may suspend buying-in by public interv ention.  In that case buying-in may be carried 
out on the basis of a tendering procedure according to specifications to be determined by the 
Commission.   For skimmed milk powder public intervention shall be open during the period 1 March to 
31 August.  However, the Commission may susp end public intervention as soon as the quantities 
offered for intervention in that period exceed 109 00 0 tonnes.  In that case buying-in may be carried 
out on the basis of a tendering procedure according to specifications to be determined by the 
Commission.   Without prejudice to the fixing of the intervention price by means of tendering, the 
intervention price for butter is 90 per cent of the reference price and for skimmed milk powder it is 
equal to the  reference price. 
 G/SCM/N/186/EEC 
Page 30  
 
  Private storage
 
  Aid for private storage is granted for the following products:  
o Unsalted butter produced from cream or milk  in an approved undertaking of the 
Community of a minimum butterfat content, by  weight, of 82 per cent, a maximum milk 
solids-non-fat content, by weight, of 2 per cent and a maximum water content, by weight, of 
16 per cent, 
o Salted butter produced from cream or milk in an approved undertaking of the 
Community of a minimum butterfat content, by  weight, of 80 per cent, a maximum milk 
solids-non-fat content, by weight, of 2 per cen t, a maximum water content, by weight, of 
16 per cent and a maximum salt content, by weight, of 2 per cent, 
o Grana Padano cheese at least nine months old, 
o (ii) Parmigiano Reggiano cheese at least 15 months old, 
o (iii) Provolone cheese at least three months old. 
  The amount of aid for butter is fixed by the Co mmission in the light of storage costs and the 
likely trends in prices for fresh butter and butter from stocks.  Where, at the time of removal from 
storage, an adverse change unforeseeable at the time  of entry into storage has occurred on the market, 
the aid may be increased.  The conditions for, and amount of, aid to be paid for cheese are laid down 
by the Commission.  The amount of aid shall be fixed taking account of storage costs and the likely trend of the market price.  
Exceptional support
 
  The Commission may adopt exceptional support m easures for milk and milk products to take 
account of restrictions on intra-Community and third-country trade which may result from the application of measures for combating the spread of diseases in animals. 
 
Production limitation
 
  The national quotas for the production of milk a nd other milk products marketed during seven 
consecutive periods of twelve months commencing on 1 April 2008.  The quotas are divided between 
producers in such a manner that the producers' individual quota or quotas at 1 April 2008 shall be 
equal to their individual reference quantity or quant ities at 31 March 2008.  Producers may have either 
one or two individual quotas, one for deliveries and the other for direct sales distinguishing between 
deliveries and direct sales.  Any overrun of the national quotas is determined nationally in each Member State, making a distinction between deliveries and direct sales.  
 The national quotas set out in the table below are fixed without prejudice to possible review 
in the light of the general market situation and par ticular conditions existing in certain Member States.  
For Bulgaria and Romania a special restructuring reserve  is established.  This reserve shall be released 
as from 1 April 2009 to the extent that the on-farm c onsumption of milk and milk products in each of 
these countries has decreased since 2002. 
 
Member State Quota size in tonnes 
Belgium 3,427,288,740 
Bulgaria 998,580,000 
Czech Republic 2,792,689,620 
Denmark 4,612,619,520  G/SCM/N/186/EEC 
 Page 31 
 
 
  Member State Quota size in tonnes 
Germany 28,847,420,391 
Estonia 659,295,360 
Ireland 5,503,679,280 
Greece 836,923,260 
Spain 6,239,289,000 
France 25,091,321,700 
Italy 10,740,661,200 
Cyprus 148,104,000 
Latvia 743,220,960 
Lithuania 1,738,935,780 
Luxembourg 278,545,680 
Hungary 2,029,861,200 
Malta 49,671,960 
Netherlands 11,465,630,280 
Austria 2,847,478,469 
Poland 9,567,745,860 
Portugal 1,987,521,000 
Romania 3,118,140,000 
Slovenia 588,170,760 
Slovakia 1,061,603,760 
Finland 2,491,930,710 
Sweden 3,419,595,900 
United Kingdom 15,125,168,940 
 
Special restructuring reserve quantities:  Bulgaria 39 180 t and Romania 188 400 t. 
 
 A surplus levy shall be payable on milk and ot her milk products marketed in excess of the 
national quota.  The levy shall be set, per 100 kilograms of milk, at Є 27,83.  Member States shall be 
liable to the Community for the surplus levy resulti ng from overruns of the national quota, determined 
nationally and separately for deliveries and direct  sales, and between 16 October and 30 November 
following the twelve-month period c oncerned, shall pay 99 per cent of the amount due to the EAGF.  
If the surplus levy has not been pa id before the due date and afte r consultation of the Committee of 
the Agricultural Funds, the Commission shall deduct a sum equivalent to the unpaid surplus levy from 
the monthly payments.  The surplus levy shall be entirely allocated among the producers who have 
contributed to each of the overruns of the nationa l quotas.  Producers are be liable vis-à-vis the 
Member State for payment of their contribution to th e surplus levy due, for the mere fact of having 
overrun their available quotas.  Aid for skimmed milk and skimmed milk powder for use as feedingstuffs
 
 
 Aid is granted for skimmed milk and skimmed- milk powder intended for use as feedingstuffs, 
according to conditions and product standards to be determined by the Commission.  Buttermilk and 
buttermilk powder shall be regarded as skimmed milk  and skimmed-milk powder.  Aid amounts shall 
be fixed by the Commission taking into account the following factors:  
o the reference price for skimmed-milk powder; 
o development of the supply situation as re gards skimmed milk and skimmed-milk 
powder, and developments in the use thereof as feed; 
o trends in calf prices; G/SCM/N/186/EEC 
Page 32  
 
  o trends in the market prices for competi ng proteins as compared with those for 
skimmed-milk powder. 
 Aid for skimmed milk processed into casein and caseinates
 
 
 Aid is granted for Community-produced sk immed milk processed into casein and caseinates, 
according to conditions and product standards of su ch milk and the casein or caseinates produced 
from it to be determined by the Commission.  The aid is fixed by the Commission taking into account 
the following factors:  
o the reference price for skimmed-milk powde r, or the market price for first-quality 
spray-process skimmed-milk powder, if th at price exceeds the reference price; 
o the market prices for casein and caseinat es on the Community and world markets. 
  The aid may vary, according to whether th e skimmed milk is processed into casein or 
caseinates and according to the quality of those products.  
Aid for the purchase of cream, butter a nd concentrated butter at reduced prices
 
  Under conditions to be determined by the Co mmission, when surpluses of milk products build 
up or are likely to occur, the Commission may decide th at aid shall be granted to enable cream, butter 
and concentrated butter to be purchased at reduced prices:  
o by non-profit making instit utions and organisations; 
o by manufacturers of pastry products and ice-cream; 
o by manufacturers of other foodstuffs to be determined by the Commission; 
o for the direct consumption of concentrated butter. 
 
Aid for the supply of milk products to pupils
 
  Under conditions to be determined by the Co mmission, Community aid shall be granted for 
supplying to pupils in educational establishments ce rtain processed milk products to be determined by 
the Commission.  Member States may, in addition to Community aid, grant national aid for supplying the products referred to in paragr aph 1 to pupils in educational establishments.  Member States may 
finance their national aid by means of a levy on th e dairy sector or by any other contribution from the 
dairy sector.  The Community aid shall be Є 18.15/100 kg for all milk.  The amounts of aid for other 
eligible milk products shall be determined taki ng into account the milk components of the product 
concerned.  The aid shall be granted on a maximum quantity of 0.25 litre of milk equivalent per pupil 
and per day. 
 
2.11 Beef and veal 
 
 Legal basis:  Council Regulation 1254/99 repealed by Council Regulation (EC) No. 1234/2007 of 22 October 2007 establishing a common organisation of agricultural markets and on 
specific provisions for certain agricultural products (Single CMO Regulation, Official Journal L 299, 
16/11/2007 P.1).  
 Public intervention
 
  As regards the beef and veal sector, the reference price is fixed at Є 2 224/tonne for carcasses 
of male bovine animals of grade R3 as laid down in the Community scale for the classification of 
carcasses of adult bovine animals.  The Commission will open public intervention for beef and veal if,  G/SCM/N/186/EEC 
 Page 33 
 
 
  for a period of two consecutive weeks, the average ma rket price in a Member State or in a region of a 
Member State falls short of Є 1.560/tonne.  The Commission closes public intervention if, for a period 
of at least one week, this condition is no longer met.   The intervention prices for beef and veal and the 
quantities accepted for intervention are determined  by the Commission by means of tendering 
procedures.  In special circumstances, they may be fixed per Member State or per region of a Member 
State on the basis of recorded average market prices .  Only offers equal to or less than the average 
market price recorded in a Member State or a re gion of a Member State and increased by an amount 
to be determined by the Commission on the b asis of objective criteria may be accepted. 
 Private storage
 
 
 When the average Community market price re corded on the basis of the Community scale for 
the classification of carcasses of adult bovine animals is, and is likely to remain, at less than 103 per cent of the reference price, the Commission ma y decide to grant aid for private storage. 
 
Exceptional market support measures
 
  The Commission may adopt exceptional support meas ures for the affected market in order to 
take account of restrictions on intra-Community and third-country trade which may result from the 
application of measures for combating the spread of diseases in animals.  The measures are taken at the request of the Member State(s) concerned.  They may be taken only if the Member State(s) 
concerned has (have) taken health and veterinary  measures quickly to stamp out the disease, and only 
to the extent and for the duration strictly necessar y to support the market concerned.  The Community 
provides part-financing equivalent to 50 per cent of the expenditure borne by Member States.  
However the Community provides part-financing equiva lent to 60 per cent of such expenditure when 
combating foot-and-mouth disease.  Member States shall ensure that, where producers contribute to 
the expenditure borne by Member States, this doe s not result in distortion of competition between 
them.  
2.12 Sheepmeat and goatmeat 
 
 Legal basis:  Council Regulation 2529/200 1 repealed by Council Regulation (EC) 
No. 1234/2007 of 22 October 2007 establishing a common organisation of agricultural markets and on 
specific provisions for certain agricultural products (Single CMO Regulation, Official Journal L 299, 
16/11/2007 P.1).  
 Private storage
 
 
 The Commission may decide to grant aid for pr ivate storage when there is a particularly 
difficult market situation for sheepmeat and goatmeat in one or more of the following quotation areas: 
 
(a) Great Britain; (b) Northern Ireland; 
(c) any Member State other than the United Kingdom, taken separately. 
 Exceptional market support measures
 
  The Commission may adopt exceptional support meas ures for the affected market in order to 
take account of restrictions on intra-Community and third-country trade which may result from the 
application of measures for combating the spread of diseases in animals.  The measures are taken at the request of the Member State(s) concerned.  They may be taken only if the Member State(s) 
concerned has (have) taken health and veterinary  measures quickly to stamp out the disease, and only G/SCM/N/186/EEC 
Page 34  
 
  to the extent and for the duration strictly necessar y to support the market concerned.  The Community 
provides part-financing equivalent to 50 per cen t of the expenditure borne by Member States. 
 
2.13 Pigmeat 
  Legal basis:  Council Regulation 2759/197 5 repealed by Council Regulation (EC) 
No. 1234/2007 of 22 October 2007 establishing a common organisation of agricultural markets and on specific provisions for certain agricultural products (Single CMO Regulation, Official Journal L 299, 
16/11/2007 P.1).  
 
Public intervention
 
  The reference price as regards the pigmeat sector is Є 1,509.39/tonne for pig carcasses of 
standard quality defined in terms of weight and lean meat content in accordance with specific 
Community scales for the classification of pig carcasses. 
 
 The Commission may decide to open public in tervention in the pigmeat sector when the 
average Community market price for pig carcasses as established by reference to the prices recorded 
in each Member State on the representative markets of the Community and weighted by means of 
coefficients reflecting the relative size of the pig herd in each Member State, is, and is likely to 
remain, at less than 103 per cent of the reference price. 
 
 The intervention price in the pigmeat sector is fixed by the Commission for pig carcasses of standard quality.  The intervention price may not be more than 92 per cent or less than 78 per cent of 
the reference price.  For products of standard qualit y other than pig carcasses, the intervention price is 
derived from the intervention price for pig carcasses  on the basis of the ratio existing between the 
commercial value of these products to the commercial value of pig carcasses.  For products other than 
those of standard quality, the intervention price is de rived from those in force for the relevant standard 
qualities, by reference to differences in quality in rela tion to the standard quality.  This price applies to 
defined qualities.   As a result of the Health Check, public in tervention in this sector is abolished. 
 
Private storage
 
  When the average Community ma rket price for pig carcasses as established by reference to 
the prices recorded in each Member State on th e representative markets of the Community and 
weighted by means of coefficients reflecting the relative size of the pig herd in each Member State is, 
and is likely to remain, at less than 103 per cent of  the reference price, the Commission may decide to 
grant aid for private storage.  Exceptional market support measures
 
 
 The Commission may adopt exceptional support meas ures for the affected market in order to 
take account of restrictions on intra-Community and third-country trade which may result from the 
application of measures for combating the spread of diseases in animals.  The measures are taken at the request of the Member State(s) concerned.  They may be taken only if the Member State(s) 
concerned has (have) taken health and veterinary  measures quickly to stamp out the disease, and only 
to the extent and for the duration strictly necessar y to support the market concerned.  The Community 
provides part-financing equivalent to 50 per cent of  the expenditure borne by Member States.  This 
percentage is increased to 60 per cent in case of foot and mouth disease.   G/SCM/N/186/EEC 
 Page 35 
 
 
  2.14 Eggs and poultrymeat 
 
 Legal basis:  Council Regulations 2771/1975(eg gs) and 2777/1975(poultry) both repealed by 
Council Regulation (EC) No. 1234/2007 of 22 Oc tober 2007 establishing a common organisation of 
agricultural markets and on specific provisions for certain agricultural products (Single CMO 
Regulation, Official Journal L 299, 16/11/2007 P.1).  
 Exceptional market support measures
 
  The Commission may adopt exceptional support meas ures for the affected market in order to 
take account of restrictions on intra-Community and third-country trade which may result from the 
application of measures for combating the spread of diseases in animals.  The measures are taken at the request of the Member State(s) concerned.  They may be taken only if the Member State(s) 
concerned has (have) taken health and veterinary  measures quickly to stamp out the disease, and only 
to the extent and for the duration strictly necessar y to support the market concerned.  The Community 
provides part-financing equivalent to 50 per cen t of the expenditure borne by Member States. 
  With regard to the poultrymeat and eggs sectors, the Commission may adopt exceptional 
market support measures in order to take account of serious market disturbances directly attributed to 
a loss in consumer confidence due to public health, or animal health risks.  Those measures shall be 
taken at the request of the Member State(s) concerned. 
 
2.15 Bee-keeping 
 
Special provisions for the apiculture sector
 
 
 With a view to improving general conditions for the production and marketing of apiculture 
products, Member States may draw up a national progr amme for a period of three years ("apiculture 
programme") aiming at specific national aids for the protection of apiaries disadvantaged by structural 
or natural conditions or under economic development programmes, except for those allocated for 
production or trade.  The measures which may be included in the apiculture programme are the 
following: 
 
• technical assistance to beekeepers and groupings of beekeepers; 
 
• control of varroasis; 
 
• rationalisation of transhumance; 
 
• measures to support laboratories carrying out analyses of the physico-chemical 
properties of honey; 
 
• measures to support the restocking of hives in the Community; 
 
• cooperation with specialised bodies for th e implementation of applied research 
programmes in the field of beekeeping and apiculture products. 
  Measures financed from th e EAFRD in accordance with Council Regulation (EC) 
No. 1698/2005 shall be excluded from the apicu lture programme.  The Community shall provide 
part-financing for the apiculture programmes equiva lent to 50 per cent of the expenditure borne by 
Member States.  G/SCM/N/186/EEC 
Page 36  
 
  3. Direct Aids 
 The support schemes represented in this section C.3 of this notification find their legal basis 
in Council regulation (EC) no 1782/2003 of 29 September 2003 establishing common rules for direct 
support schemes under the common agricultural po licy and establishing certain support schemes for 
farmers](OJ L 270, 21.10.2003, p. 1) . 
 
 The level of direct aids for the period covered by this notification is as follows:  
Direct Aids  (EAGF financial year - payment appropriations) (*) Є million 
 
 2006 2007 2008 
 Coupled Decoupled Coupled Decoupled Coupled Decoupled 
Single Payment Scheme (1) -  14,542.0  28,720.1  28,973.8 
Single Area Payment 
Scheme - 1,721.3  2,083.0  2,974.4 
Arable crops 8,173.5 - 1,922.7 - 1,854.6 - 
Sugar 0.0 - 41.9 - 51.8 - 
Rice 261.4 - 173.2 - 168.2 - 
Olive Oil 2,312.0 - 145.0 - 126.3 - 
Flax and hemp 0.0 - 0.0 - 0.0 - 
Cotton 0.0 - 267.0 - 260.6 - 
Silkworms 0.5 - 0.6 - 0.5 - 
Fruits and vegetables 284.8 - 413.0 - 301.9 - 
Wine 0.0 - 0.0 - 0.0 - 
Tobacco 811.0 - 344.9 - 310.4 - 
Seeds 45.5 - 22.0 - 20.0 - 
Hops 3.1 - 2.7 - 2.5 - 
Dairy products 1,453.8 - 655.7 - 18.8 - 
Bovine meat 3,297.8 - 1,836.6 - 1,766.5 - 
Sheepmeat and goatmeat  950.4 - 350.5 - 333.6 - 
POSEI 81.3 - 81.8 - 410.2 - 
Other products/measures 
(2) 112.0 - -14.1 - -5.8 - 
Total expenditure 17,788.0 16,263.3 6,242.7 30,803.1 5,620.4 31,948.2 
 
(1) For 2007 and 2008, Additional amounts of aid and separate sugar payment are included. 
(2) Dried fodder, grain legume s, recoveries and other. 
 (*) European Agricultural Guid ance and Guarantee Fund, Guaran tee section (EAGGF) for financial year 2006.  European 
Agricultural Guarantee Fund (EAGF) for financial years 2007 and 2008. 
 
3.1 Single Payment Scheme (SPS) 
 
 The introduction of the SPS decided in the CAP reform of 2003 removed links between 
production and support.  The main aims of SPS are to allow farmers freedom to produce to market 
demand, to promote environmentally and economi cally sustainable farming and to simplify CAP 
application for farmers and administrators.  All fa rmers may apply for direct payments.  The single 
payment is an annual income support payment to farm ers that is independent of what and whether a 
farmer produces (decoupled income support).  Member  States introduced the Single Payment Scheme 
between 2005 and 2007 at the latest.  The correspondi ng financial effects can be seen in the above 
table covering the budget years 2006 to 2008.  Those new Member States, that are currently applying SAPS ( SAPS – see point 3.2 below ) have to introduce SPS by 2013 at the latest.  Farmers were 
allocated payment entitlements  based on reference amounts in the period 2000-02.  Payment 
entitlements were only distributed to farmers exer cising an agricultural activity at the date each 
Member State introduced the scheme.  The value of  each entitlement depends on the model chosen by 
the Member State.  G/SCM/N/186/EEC 
 Page 37 
 
 
   
 Member States have two main options of how to calculate the value of the payment 
entitlements.  The main difference is whether they  base the value on the direct payments individual 
farmers received in the historic reference period - so called "his toric approach", thus producing 
different levels of SPS for each farmer, or whet her all payments are averaged out over a Member 
State or region within a Member State – so called "regional approach".  According to the  historic 
approach  each farmer is granted payment entitlement s corresponding to the payments he or she 
received during the reference period (reference amounts) and the number of hectares he or she was farming during the reference period a nd which gave right to direct paym ents in the reference period.  
Following the regional (flat rate) approach  reference amounts are not calculated at individual farmer 
level but at regional level - the sum of the payments received by the farmers in the region concerned 
during the reference period.  The value of the payment entitlements in that regional model is 
established by dividing the regional reference amounts by the number of eligible hectares declared by 
the farmers of the region in the year of SPS introd uction.  Finally, each farmer receives a number of 
(flat rate) entitlements equal to the number of e ligible hectares declared  in the year of SPS 
introduction.  This approach entails some redistribu tion of payments between farmers.  Member States 
may also calculate SPS payments using a part -historic/part-flat rate approach.  Such "hybrid"  systems 
can further vary over the period between first app lication of the SPS and full implementation, giving 
rise to dynamic as well as to static hybrid systems. 
  Payments are granted where farmers have eligib le hectares at their disposal to activate the 
appropriate number of entitlements.  Any payment entitlement accompanied by an eligible hectare 
shall give right to the payment of the amount fixe d by the payment entitlement.  Transfers of payment 
entitlements, with and with out land, are allowed. 
  Member States may grant specific support to  agricultural activities that encourage the 
protection or enhancement of the environment or for improving the quality and marketing of 
agricultural products.  These specific payments ma y use up to 10 per cent of the funds available 
(under national ceilings) in the SPS.  Inclusion of fruit and vegetables in the Single Payment Scheme (SPS)
 
 
 Land covered by fruit and vegetables became eligible for payment entitlements under the SPS 
which applies in the other farm sectors.  C oupled support for processed fruit and vegetables is 
abolished, at the latest by 2012.  The total amount transferred to the SPS is around € 800 million.  For 
tomatoes, Member States are allowed to apply trans itional payments for a four-year transitional period 
(2008-2011), provided that the coupled proportion of the payment does not exceed 50 per cent of the 
national ceiling.  For non-annual crops, they are allowe d to apply transitional payments for five years, 
provided that after 31 December 2010, the coupled proportion does not exceed 75 per cent of the national ceiling.  Inclusion of vine-sector in the Single Payment Scheme (SPS)
 
 
 Member States may provide decoupled suppor t to historical vine-growers by allocating 
payment entitlements within the meaning of Chapte r 3 of Title III of Regulation (EC) No. 1782/2003 
in accordance with point O of Annex VII to that Regulation.  Once effective this support remains in 
the Single Payment Scheme.  
 Where Member States choose to provide suppor t under the Single Payment Scheme, they 
must establish the reference amount of each farmer as well as the applicable hectares on the basis of 
objective and non-discriminatory criteria and in respect of a representative reference period of one or more wine years starting from the wine year 2005/ 2006.  However, the reference criteria used to 
establish the reference amount and applicable hect ares can not be based on a reference period G/SCM/N/186/EEC 
Page 38  
 
  including wine years after the wine year 2007/2008 where the transfer in support programmes 
concerns compensation to farmers who have hither to received support for potable alcohol distillation 
or have been the economic beneficiaries of the s upport for the use of concentrated grape must to 
enrich wine.  
 National ceilings ( Є 1000;  It should be noted that tho se figures correspond to Annex VIII of 
Regulation 1782/2003.  The amounts include , but are not limited to SPS envelopes). 
 
Member 
State 2005 2006 2007 2008 2009 2010 and 
subsequent 
Belgium  411,053 580,376 593,395 606,935 614,179 611,805 
Denmark  943,369 1,015,479 1, 021,296 1,027,278 1,030,478 1,030,478 
Germany  5,148,003 5,647,175 5, 695,607 5,744,240 5,770,254 5,774,254 
Greece  838,289 2,143,603 2,171, 217 2,365,298 2,367,713 2,178,382 
Spain  3,266,092 4,635,365 4, 649,913 4,830,954 4,838,536 4,840,413 
France  7,199,000 8,236,045 8, 282,938 8,382,272 8,407,555 8,415,555 
Ireland  1,260,142 1,335,311 1, 337,919 1,340,752 1,342,268 1,340,521 
Italy 2,539,000 3,791,893 3,813, 520 4,151,330 4,163,175 4,184,720 
Luxembourg  33,414 36, 602 37,051 37,051 37,051 37,051 
Netherlands  386,586 428, 329 833,858 846,389 853,090 853,090 
Austria  613,000 633,577 737,093 742,610 745,561 744,955 
Portugal  452,000 504,287 570,997 608,221 608,751 608,447 
Finland  467,000 561,956 563,613 565,690 566,801 565,520 
Sweden  637,388 670,917 755,045 760,281 763,082 763,082 
United Kingdom  3,697,528 3,944,745 3,960,986 3,977,175 3,985,834 3,975,849 
(*) The amounts for Italy corresponding to years 2008, 2009 and 2010 shall be reduced by Є 20 millions (see footnote to 
Annex II to Regulation (EC) No. 479) .  
 
3.2 Single Area Payment Scheme (SAPS) 
  The new Member States may use, for a transition period ending no later than 2013, a simple 
regime for granting direct payments to farmers, the Single Area Payment Scheme (SAPS).  This regime  facilitates and reduces the cost of the preparat ory work to be made before and during the 
first years of accession with only payments per ha of agricultural land.  The SAPS is a direct support scheme which replaces all direct payments – with some exceptions – with a single area payment. 
 
 SAPS is a decoupled support scheme  not requiring production based on two elements fixed 
at national level.  Firstly a national financial enve lope, to be established by the Commission which is 
the sum of all the direct payments the Member State concerned would receive under former direct payment regimes taking into account the applicable ph asing-in rate of the calendar year in question.  
Secondly a national agricultural area, to be established as that part of the agricultural area that was in 
"good agricultural condition" in June 2003 for the NM S acceded the EU in 2004 and to be adjusted 
according to objective criteria to be approved by th e Commission (e.g. reduction to take into account 
that the concerned Member State could decide not granting direct payments to farms smaller than 
one ha).  The SAPS amount per ha results from dividing the national fina ncial envelope by the 
national agricultural area of the concerned Member State.  All new Member States apart from Malta and Slovenia have decided to use SAPS. 
 
 The Act of Accession of the Czech Republic, Es tonia, Cyprus, Latvia, Lithuania, Hungary, 
Malta, Poland, Slovenia and Slovakia and that of Bulgaria and Romania provide for a transitional 
period for the progressive introduction of the CAP di rect payments to farmers in the new Member 
States, from 25 per cent in 2004 to 100 per cent in 2013 (respectively from 25 per cent in 2007 to 
100 per cent 2016 in Bulgaria and Romania).  It  also establishes the possibility for the new 
Member States, during the transitional period and su bject to the approval by the Commission, to pay  G/SCM/N/186/EEC 
 Page 39 
 
 
  farmers additional support in the form of Complementary National Direct Payments  (CNDPs, 
commonly known as "top-ups").   National ceilings new Member States ( Є 1000;  It should be noted that those figures 
correspond to Annex VIIIa of Regulation 1782/2003.  The amounts include, but are not limited to 
SAPS envelopes). 
 
Calendar year 2005 2006 2007 2008 2009 2010 
Bulgaria   200,384 246,766 287,399 327,621 
Czech Republic 228,800 294,551 377,919 470,463 559,622 645,222 
Estonia 23,400 27,300 40,400 50,500 60,500 70,600 
Cyprus 8,900 12,500 17,660 27,167 31,670 36,173 
Latvia 33,900 43,819 60,764 75,610 90,016 103,916 
Lithuania 92,000 113,847 154,912 193,076 230,560 267,260 
Hungary 350,800 446,305 540,286 677,521 807,366 933,966 
Malta 670 830 1,668 3,017 3,434 3,851 
Romania   441,930 532,444 623,399 712,204 
Poland 724,600 980,835 1,263,706 1,579,292 1,877,107 2,162,207 
Slovenia* 35,800 44,184 59,026 73,618 87,942 101,959 
Slovakia 97,700 127,213 161,362 201,937 240,014 276,514 
* Slovenia applies SPS. 
 
3.3 Crops area payments 
  As a result of the 2003 Reform decisions Member  States were allowed to retain 25 per cent of 
the component of national ceilings corresponding to the arable crops payments except compulsory 
set-aside payment or, alternatively, up to 40 per cen t of the supplementary durum wheat aid in order 
to continue the existing coupled per hectare paymen ts up to those percentage levels.  Two Member 
States (France and Spain) are using the first opti on;  no Member State is using the second option. 
 
The area payment is fixed on a per hectare basi s and regionally differentiated.  The payment 
is granted for the area which is down to arable crops  or subject to set-aside and which does not exceed 
the total number of hectares of the regional base area or areas as fixed in Annex VI of Commission Regulation (EC) No. 2316/1999.  When the sum of the areas for which payment is claimed under the 
arable crops' scheme, including set-aside is in ex cess of the base area, the eligible area per farmer 
shall be reduced proportionately. 
  The area payment is calculated by multiplyin g the basic amount per tonne by the average 
cereal yield determined in a regionalisation plan fo r the region concerned and by the recoupling rate 
(25 per cent).  The calculation is made using the average cereals yield.  However, where maize is 
treated separately, the "maize" yield shall be used fo r maize and the "cereals other than maize" yield is 
used for cereals, oilseeds, linseed and flax and hemp  grown for fibre.  The basic amount for arable 
crops and for set-aside is fixed at Є 63,00/t from the 2005/2006 marketing year onwards. 
  Up to a ceiling of 2 million hectares energy crops  used for energy products are granted a fixed 
aid of Є 45/ha. 
 
 North of the 62
nd Parallel farmers producing arable crops are granted a fixed aid of Є 24/t 
multiplied by a fixed yield determined for the region.   As a result of the Health Check, these re gimes are abolished from 1 January 2010. 
 G/SCM/N/186/EEC 
Page 40  
 
  3.4 Supplementary aid for durum wheat 
 
 A supplement to the area payment of Є 291/ha for the marketing year 2005/2006 and 
Є 285/ha multiplied by the recoupling rate (25 pe r cent) for the marketing year 2006/2007 and 
onwards is paid for the area down to durum wheat  in traditional production zones subject to the 
following limits: 
 
Spain 594,000 ha 
France 208,000 ha 
 
 Should the total of the areas for which a supplem ent to the area payment is claimed be greater 
than the limit, the area per farmer for which th e supplement may be paid shall be reduced 
proportionately.  
  In regions where the production of durum wheat is well established, special aid amounting to Є 46/ha for the marketing year 2005/06 shall be granted up to a limit of the following number of 
hectares: 
 
Spain 4,000 ha 
France 50,000 ha 
 
 As a result of the Health Check, this regime is abolished from 1 January 2010.  
 3.5 Production aid for seeds 
 
 Member States may grant, on a yearly basis, ai ds for the production of basic seed or certified 
seeds.  The amount of aid claimed shall not exceed a ceiling, fixed by the Commission, corresponding to the component of seed aids for the species c oncerned in the national ceiling.  When the total 
amount of aid claimed exceeds the fixed ceiling, the ai d per farmer is reduced proportionately in that 
year.   As a result of the Health Check, this regime is abolished from 1 January 2012 at the latest.  
 3.6 Suckler cow premium 
 
 Member States may opt for keeping up to 100 per cent of the " suckler cow premium"  
coupled.  The payments are livestock payments ma de on a fixed number of head A farmer keeping 
suckler cows on his holding may qualify, on applicati on, for a premium for maintaining suckler cows.  
It is granted in the form of an annual premium pe r calendar year and per farmer within the limits of 
individual ceilings. 
  The suckler cow premium shall be granted to any farmer:  
• not supplying milk or milk products from his farm for 12 months from the day on 
which the application is lodged.  The suppl y of milk or milk products directly from 
the holding to the consumer shall not, however, prevent grant of the premium, 
 
• supplying milk or milk products whose to tal individual reference quantity as referred 
to in Article 4 of Regulation (EEC) No. 3950/92 does not exceed 120000 kilograms.  However, Member States may decide on the basis of objective criteria, which they determine, to change or waive this quantita tive limit, provided that the farmer keeps, 
for at least six consecutive months from the day on which the application is lodged a  G/SCM/N/186/EEC 
 Page 41 
 
 
  number of suckler cows at least equal to 60 per cent and of heifers at most equal to 
40 per cent of the number for which the premium was requested. 
  The farmers' entitlement to the premium is lim ited by the application of an individual ceiling.  
Per eligible animal, the amount of the premium is set at Є 200. 
 
3.7 Additional suckler cow premium 
 
 Member States may grant an additional nationa l suckler cow premium, up to a maximum of 
Є 50 per animal, provided that no di scrimination is caused between stockfarmers in the Member State 
concerned.  
 
3.8 Beef special premium 
 
 Member States may keep 100 pe r cent of the slaughter premium for adult bovine animals 
coupled or, instead, up to 75 per cent of the " special male premium" .  A farmer holding male bovine 
animals on his holding may qualify, on application, for a special premium.  It is granted in the form of 
an annual premium per calendar year and per holdi ng within the limits of regional ceilings for not 
more than 90 animals for certain age brackets.  The special premium shall be granted no more than 
once in the life of each bull from the age of nine m onths and no more than twice in the life of each 
steer.  To qualify for the special premium any animal  covered by an application shall be held by the 
farmer for fattening for a determined period and each  animal shall be covered until slaughter or until 
export by an animal passport or, if not available, an equivalent administrative document.  When in a 
given region the total number of bulls from the age of  nine months and of steers from nine months to 
20 months of age, for which an application has been made and which satisfy the conditions for 
granting the special premium exceeds the regional ce iling, the number of all eligible animals per 
farmer for the year in question is reduced proportionately.  The amount of the special premium is 
Є 210 per eligible bull and Є 150 per eligible steer and age bracket. 
  As a result of the Health Check, this regime is abolished from 1 January 2012 at the latest.  
 
3.9 Beef slaughter premium (calves and adults) 
 
 As compared to the situation before the 2003 reform and Member States may retain up to 
100 per cent of the "slaughtering premium for calves" and up to 40 per cent of the "slaughter premium 
for adult bovine animals" coupled.  
 A farmer keeping bovine animals on his holding  may qualify, on application, for a slaughter 
premium.  It is granted, within national ceilings, on slaughter of eligible animals or on their export to 
a third country.  Bulls, steers, cows and heifers from the age of eight months and calves of more than 
one and less than eight months old and of carcass weight up to 185 kg are eligible for the slaughter 
premium.2.  The amount of the premium is Є 80 per eligible adult and Є 50 for calves. 
 
 The national ceilings referred to in paragra ph 1 have been established per Member State and 
separately for both groups of animals.  Each ceiling is equal to the number of animals in each of these 
two groups which were slaughtered in the Member State concerned in 1995 to which are added those 
animals exported to third countries.  
 As a result of the Health Check, this regime is abolished from 1 January 2012 at the latest.  
 G/SCM/N/186/EEC 
Page 42  
 
  3.10 Sheep and goat premiums 
 
 As compared to the situation before the 200 3 reform, Member States may retain 50 per cent 
of the sheep and goat premiums (i.e. 50 per cent of  the sheep/goat component of the national ceiling) 
as coupled payments.  The level of the sheep premiu m has been fixed for sever al years in advance at 
Є 21 per ewe ( Є 16.8 for ewes kept for milk production, and for female goats), plus a Є 7 
supplementary premium payable in Less Favoured Areas (LFA) only.  These payment rates should be multiplied with the same percentage  rates that will remain as coupled payment.  To qualify for the 
Less Favoured Area supplement a farmer must have at least 50 per cent of his agricultural area in 
the LFA.  The additional premium may also apply to farmers practising transhumance. 
 
3.11 Dairy premium 
 
 From 2004 to 2007, milk producers qualified for a dairy premium.  It was granted per 
calendar year, per holding and per tonne of indivi dual reference quantity e ligible for premium and 
available on the holding.  The individual refere nce quantity for milk available per holding on 
31 March of the calendar year concerned, expressed in tonnes, was multiplied by Є 8.15/t for the 
calendar year 2004, Є 16.31/t for the calendar year 2005 and Є 24.49/t for the calendar years 2006 
and 2007.   From 2004 to 2007, Member States  made, on a yearly basis, additional payments to producers 
in their territory per year.  Such payments were made according to objective criteria as to ensure equal 
treatment between producers and to avoid market and competition distortions and could not exceed 
predetermined ceilings.  Moreover, such payments could not be linked to fluctuations of market 
prices.  3.12 Payments to starch potato producers 
 
 Aid is paid for farmers producing potatoes inte nded for the manufacture of potato starch.  The 
amount of the payment applies to the quantity of potatoes needed for making one tonne of starch.  It is Є 66.32 from the marketing year 2005/2006 onwards.  It  is adjusted according to the starch content of 
the potatoes.  The aid is paid only in respect of the quantity of potatoes covered by a cultivation 
contract between the potato producer and the star ch manufacturer within the limit of the quota 
allocated to such undertaking.   As a result of the Health Check, this  regime is abolished from 1 July 2012.  
 3.13 Area aid for rice 
 
 In the framework of the rice reform (notably 50 per cent cut of the intervention price) and in 
order to stabilise producers' revenues and to main tain the role of rice production in traditional 
production areas, the pre-reform direct aid is increased from Є 52/tonne to Є 177/tonne (converted to 
a per hectare payment according to nati onal yield coefficients).  Of this, Є 102/tonne is integrated in 
the Single Payment Scheme on the basis of historical rights limited by the current maximum 
guaranteed area, and the remaining part constitut es the crop specific payment for rice, limited by 
national base areas.   As a result of the Health Check, this regime is abolished from 1 January 2012 at the latest.  
 
3.14 Aid for olive groves 
 
 To ensure olive tree maintenance, and thus avoid the degradation of land cover and landscape 
or negative social consequences, a part of the CA P support can be linked to the maintenance of olive  G/SCM/N/186/EEC 
 Page 43 
 
 
  groves of environmental or social value.  Having d ecided on the proportion of aids to be paid via the 
SPS (60 per cent or more) the remaining aid (up to a maximum of 40 per cent) is retained by Member 
States as " national envelopes " to make additional payments to oliv e groves of environmental or social 
value according to objective criteria (e.g. including asp ects of local traditions and culture, in particular 
in marginal areas).  Within the limits of their national envelopes, Member States may define up to 
five different categories of olive groves eligib le for support, based on their environmental and 
socio-economic value, and fix an aid per hectare accord ingly.  In the interest of simplification, these 
olive grove payments will only be made for amounts of at least Є 50 per aid claim.  Only one Member 
State decided to implement this option, for a limited amount.  
 As a result of the Health Check, this regime is abolished from 1 January 2010. 
 
3.15 Tobacco premium 
 
 For the harvest years 2006, 2007, 2008 and 2009 aid may be granted to farmers producing 
raw tobacco.  The aid is granted to farmers who received a tobacco premium payment in accordance 
with Regulation (EEC) No. 2075/92 in the calendar years 2000, 2001 and 2002, and to farmers who 
acquired tobacco  production quotas during the period 1 January 2002 to 31 December 2005.  The 
payment is  subject to the following conditions: 
 
• the tobacco must come from a predefined production area,  
• certain quality requirements must be fulfilled,  
• leaf tobacco must be delivered by the farm er to the premises of the first processor 
under a cultivation  contract, and  
• the payment is made in such a way as to ensure equal treatment between farmers 
and/or according to objective  criteria such as location of tobacco producers in an 
Objective 1 region or the production of varieties of a  certain quality.  
  The maximum amount of the total of the aid, including the amounts to be transferred to he Community Tobacco Fund referred is: 
 
2006 – 2009> (in Є million)  
Germany 21,287 
Spain 70,599 
France 48,217 
Italy (except Apulia) 189,366 
Portugal 8,468 
 
 The transfer to the Community Tobacco Fund of an amount equal to 4 per cent for the 
calendar year 2006 and 5 per cent for the calendar years 2007, 2008 and 2009 of the aid granted in 
accordance with this Chapter finances actions of information under the Community Tobacco Fund 
provided for in Article 13 of Re gulation (EEC) No. 2075/92.<1 14] 
 
3.16 Hops area aid 
  In the case of hops payments, Member States ma y retain up to 25 per cent of the component 
of national ceilings coupled.  It is granted to farmers producing hops in hop production areas as 
published by the Commission pursuant to Article 6(2) of Council Regulation (EEC) No. 1784/77.  
The areas must be planted with hops and the must actually be harvested.   As a result of the Health Check, this regime is abolished from 1 January 2009.  G/SCM/N/186/EEC 
Page 44  
 
   
3.17 Durum wheat quality premium 
 
 For durum wheat a quality premium of Є 40 per hectare, depending on the use of varieties 
recognized as being of a high quality for the production of pasta or semolina, is introduced.  The aid is 
limited to traditional production z ones and to national base areas. 
  As a result of the Health Check, this regime is abolished from 1 January 2010. 
 
3.18 Protein crop payment 
 
 For peas, field beans and sweet lupines, the amount of aid is Є 55.57/hectare.  It is paid within 
the limits of an EU maximum guaranteed area of 1. 648 million hectares.  If the area is exceeded, the 
aid is reduced proportionally.  No coefficient of reduction has been applied in that sector so far. 
 
 As a result of the Health Check, this regime is abolished from 1 January 2012 at the latest.  
 
3.19 Area payment for nuts 
 
 A Community aid is granted to farmers produc ing nuts.  Nuts include almonds, hazelnuts or 
filberts, walnuts, pistachios and locust beans.  Memb er States may differentiate the aid in function of 
the products or by increasing or decreasing the natio nal guaranteed areas.  However, in each Member 
State, the total amount of aid granted in a given y ear shall not be higher than a ceiling calculated by 
multiplying the number of hectares of its Nati onal Guaranteed by an average amount of Є 120.75.  A 
maximum guaranteed area of 829.229 ha has been est ablished.  Member States may make the granting 
of Community aid conditional on farmers being members of a producer organisation recognised under 
Articles 11 or 14 of Regulation (EC) No. 2200/96.  Me mber States may decide that the payment of the 
aid is made to a producer organisation on the behalf  of its members.  The amount of aid received by 
the producer organisation is then paid to its me mbers.  However, Member States may authorise a 
producer organisation, as compensation for the services provided to its members, to operate a deduction on the amount of Community aid up to a maximum of 2 per cent.  Member States may grant national aid, in addition to the Community aid, up to a maximum of Є 120.75 per hectare per 
year.  The national aid may be paid only for areas receiving Community aid.  Member States may 
make the granting of national aid conditional on fa rmers being members of a producer organisation 
recognised under Articles 11 or 14 of Regulation (EC) No. 2200/96.   As a result of the Health Check, this regime is abolished from 1 January 2012 at the latest.  
 
3.20 Aid for energy crops 
 
 An aid of Є 45 per hectare per year shall be grante d for areas sown under energy crops.  
Energy crops shall mean crops supplied essen tially for the production of the following energy 
products: 
 
• products considered biofuels listed in Artic le 2, point 2 of Directive 2003/30/EC of 
the European Parliament and of the Council of 8 May 2003 on the promotion of the use of biofuels or other renewable fuels for transport, 
 
• electric and thermal energy produced from biomass. 
 
 A maximum guaranteed area of 2,000,000 ha for which the aid may be granted was  
established.   Where the area for which aid is claimed exceed s the maximum guaranteed area, the area  G/SCM/N/186/EEC 
 Page 45 
 
 
  per farmer for  which aid is claimed shall be reduced proporti onately in that year.  The aid shall be 
granted only in respect of areas whose production is covered by a contract between the farmer  and the 
processing industry or by a contract between the fa rmer and the collector, except in case of processing  
undertaken by the farmer himself/herself on the holdi ng.  Member States shall be authorised to pay 
national aid up to 50 per cent of the costs associat ed with establishing permanent crops for the areas 
which have been subject to an application for the aid for energy crops.  The new Member States 
grants this aid separately from SAPS since 2007.   As the maximum guaranteed area of 2 million ha for the EU had been overshot in 2007, a 
reduction coefficient of 0,70337 was applied. 
 
 As a result of the Health Check, this regime is abolished from 1 January 2010.  
 
3.21 Aid for silkworms 
  An aid is granted for silkworms and for silk worm eggs within the Community.  The is be 
granted to silkworm rearers for each box of silkwo rm eggs used, on condition that the boxes contain a 
minimum quantity of eggs and that the worms have  been successfully reared.  The aid per box of 
silkworm eggs used is Є 133.26. 
 
3.22 Area aid for dried grapes 
 
This appropriation is intended to  cover expenditure on area aid for dried grapes, in accordance 
with Article 7 of Regulation (EC) No. 2201/96.  Th e aid is granted for the cultivation of grapes 
intended for the production of dried grapes of the su ltana and Moscatel varieties and currants.  The 
amount of the is fixed per hectare of specialized ar ea harvested on the basis of the average yield per 
hectare of the area concerned.  In addition, the amount  of the aid shall be fixed to take account of the 
need to ensure that the areas traditionally used to grow the said crops are maintained and the outlets 
available for these dried grapes.  The amount of aid may be differentiated according to grape variety 
and other factors which may affect yield.  A maximum guaranteed Community area equal to the 
average of the areas used in the marketing years 1987/1988, 1988/1989 and 1989/1990.  Before the 
beginning of each marketing year, the Commission fixes the amount of the aid. 
 
 This aid has been abolished from 2008.  
3.23 Payments for specific types of  farming and quality production 
  This support covers payments in accordan ce with Article 69 of Regulation 1782/2003.  
Member States may retain up to 10 per cent of th e component of national ceilings.  The additional 
payment is granted for specific types of farming which are important for the protection or enhancement of the environment or for improving the quality and marketing of agricultural products. 
 
3.24 Additional amount for sugar beet and cane producers 
 
 This support concerns payments in accordance with Chapter 10f of Title IV of Regulation 
1782/2003 in Member States which have granted the restructuring aid provided for in Article 3 of Regulation (EC) No. 320/2006 for at least 50 per cent of  the sugar quota.  The aid shall is granted for 
a maximum of five consecutive years as from the mark eting year in which the threshold of 50 per cent 
has been reached but no later than for the marketi ng year 2013/2014.  The aid is granted in respect of 
the quantity of quota sugar obtained from sugar beet  or cane delivered under contracts concluded in 
accordance with Article 6 of Regulation (EC) No. 318 /2006.  The aid is expressed per tonne of white 
sugar of standard quality.  The amount of the aid shall be equal to half of the amount obtained by 
dividing the amount of the ceiling referred to in point  2 of point K of Annex VII for the Member State G/SCM/N/186/EEC 
Page 46  
 
  concerned for the corresponding year by the total of the sugar and inulin syrup quota fixed on 
20 February 2006 in Annex III to Regulation (EC) No. 318/2006. 
 
3.25 Cotton 
  The last reform in this sector was deci ded in June 2008 (Counc il Regulation 637/2008 of 
23 June 2008, OJ L 178 of 5/07/2008, p1).  From 2009 onward a coupled aid is granted per hectare of 
eligible area of cotton.  In order to be eligible, th e area shall be located on agricultural land authorised 
by the Member State for cotton production, sown under authorised varieties and actually harvested 
under normal growing conditions.  The aid is paid fo r cotton of sound and fair merchantable quality.  
The obligation to maintain coupled support in the co tton sector results from Protocol 4 annexed to the 
Act of accession of Greece.  
Cotton coupled support - Base areas, fixed yields and reference amounts 
 
 Base area Fixed yield Aid per ha (€/t)* 
Greece 250,000 ha 3.2 tonne/ha Є 251.75 
Spain 48,000 ha 3.5 tonne/ha Є 400.00 
Portugal 360 ha 2.2 tonne/ha Є 252.73 
 
* Farmers who are members of an approved inter-branch organisation are granted an aid per eligible hectare 
increasing the amount of aid per hectare mentioned above by an amount of Є 2. 
 
3.26 Transitional fruit and vegetables payments (tomatoes) 
 
 As a consequence of the 2007 reform of the sector, Member States may retain, from 1 November 2007 until 31 December 2011, a couple d payment up to 50 per cent of the processing 
aids for tomatoes that were eligible under the ai d scheme set out in Regulation (EC) No. 2201/96.  
New Member States had the possibility to exclude this payment from SAPS. 
  The component of national ceilings co rresponding to tomatoes is as follows: 
 
Member State Amount (Є million 
per calendar year) 
Bulgaria 5,394 
Czech Republic 0,414 
Greece 35,733 
Spain 56,233 
France 8,033 
Italy 183,967 
Cyprus 0,274 
Malta 0,932 
Hungary 4,512 
Romania 1,738 
Poland 6,715 
Portugal 33,333 
Slovakia 1,018 
 
3.27 Transitional fruit and vegetables p ayments (other products than tomatoes) 
 
 As a result of the 2007 reform of the sector, Member States may retain, from 1 November 2007 until 31 December 2010, up to 10 0 per cent of the component of national ceilings 
corresponding to certain fruit and vegetable crops  other than annual crops which are supplied for 
processing and were eligible under the aid schemes set  out in Regulations (EC) No. 2201/96 and (EC)  G/SCM/N/186/EEC 
 Page 47 
 
 
  No. 2202/96;  and from 1 January 2011 to 31 Decem ber 2012 they may retain up to 75 per cent.  
Within the limit of a ceiling, the Member States ca n make, on a yearly basis, additional payments for 
fresh figs, fresh citrus fruits, table grapes, pears, peaches and nectarines and certain types of plums derived from "d'Ente" plums.  
 The component of national ceilings correspondi ng to fruit and vegetable crops other than 
annual crops is as follows:  
Member State Amount (Є million per calendar year) 
Bulgaria 0,851 
Czech Republic 0,063 
Greece 153,833 
Spain 110,633 
France 44,033 
Italy 131,700 
Cyprus in 2008 4,793 
In 2009 4,856 
In 2010 4,919 
In 2011 4,982 
In 2012 5,045 
Hungary 0,244 
Romania 0,025 
Portugal 2,900 
Slovakia 0,007 
 
3.28 Separate fruit and vegetable paym ent for New Member States applying SAPS 
 
 Countries applying the Single Area Payment Scheme (SAPS, see also the section on direct 
aids in this notification) can introduce a decoupl ed payment to producers who historically produced 
fruit and vegetables.   Where is the Separate sugar payment?  
3.29 Transitional soft fruit payment 
 
 To allow producers of strawberries and r aspberries for processing to adapt to market 
circumstances, they receive a transitional direct  payment worth € 230 per hectare for maximum period 
of 5 years for a set number of hectares.  Member states may pay a national top-up so that the total shall not exceed € 400/hectare. 
 
3.30 POSEI 
 
 The legal basis  for this expenditure is Re gulation 247/2006.  Objective factors arising as a 
result of insularity and remoteness of certain  regions of the Community impose constraints on 
economic operators and producers in these outermost regions that severely handicap their activities.  
Therefore appropriate specific supply measures to guarantee supply and to compensate for the 
additional costs arising from their remoteness, insularity and distant location are applied. 
 
3.31 Additional amounts of aid 
  An additional amount of aid ii provided to producers in accordance with art 12 of 
Regulation 1782/2003.  The total amount gr anted can not exceed a specific ceiling. 
  G/SCM/N/186/EEC 
Page 48  
 
  D. E
UROPEAN AGRICULTURAL FUND FOR RURAL DEVELOPMENT (EAFRD) 
1. Title of the programme  
 
Common agricultural policy:  Rural Development ("Second Pillar"). 
 
2. Period covered by the notification  
 
1 January 2007 - 31 December 2008. 
 3. Policy objective and/or purpose of the programme
 
 
Contribute to the achievement of the Common Agricultural Policy's objectives as laid down 
in the Treaty establishing the European Community, and in particular Articles 36, 37 and 299(2) thereof.  Rural development policy should also take into account the general objectives 
for economic and social cohesion policy set out in the Treaty and contribute to their 
achievement, while integrating other major polic y priorities as spelled out in the conclusions 
of the Lisbon and Göteborg European C ouncils for competitiveness and sustainable 
development. 
 4. Background and authority for the programme
 
 
Council Regulations (EEC) Nos. 1290/2005, 1698/2005, and 378/2007. 
 5. Form of assistance granted – Grants from Community budget for
 
 
Rural development programmes co-financed by Member States and the Commission. 
 
6. To whom and how the assistance is provided  
 
The aid is co-financed with the Member States and implemented through multi-annual 
programmes based on the aims of the EAFRD section as indicated above.  The Member States are responsible for the implementati on of the programme and the selection of 
individual projects. 
 
The aid is normally in the form of grants or loans. 
 7. Total expenditure under the programme
 
 
The table below shows the amounts involved (pay ment appropriations in billion € for each 
financial instrument).  It is to be noted that the new EAFRD has from 2007 on replaced the 
old EAGGF – Guidance and Guarantee Fund as far as Rural Development spending is 
concerned. 
  G/SCM/N/186/EEC 
 Page 49 
 
 
  Expenditure (payments) for Rural Development (million€) 
 
Financial instrument 2006 2007 2008 
EAFRD 2007-2013 0.0 6,080.6 8,538.8 
EAGGF Guarantee Section 
completion of programs 2000-2006 5,580.8 -30.0 -14.1 
EAGGF Guidance Section completion 
of earlier programs 3,562.1 3,099.1 1,982.5 
Transitional instrument for New 
Member States Completion of 
2004-2006 programs 2,115.7 1,298.7 14.1 
Other 0.0 0.0 0.0 
Total 11,258.6 10,448.4 10,521.3 
 
8. Duration of the programme  
 
 2007-2013  9. Trade effects
 
 
 No, or at most minimal, trade distorting effects 
  E. M
EASURES FINANCED BY THE EUROPEAN AGRICULTURAL FUND FOR RURAL DEVELOPMENT 
("SECOND PILLAR " OF THE CAP) 
1. Policy framework 
 The European Union has an active rural devel opment policy because this helps us to achieve 
valuable goals for our countryside and for the peopl e who live and work there.  The EU's rural areas 
are a vital part of its physical make-up and its iden tity.  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 population.  Many of these 
rural areas face significant challenges.   Average income per head is lower in rural regions than in our 
towns and cities, while the skills base is narrower and the service sector is less developed.  Also, 
caring for the rural environment often carries a financial cost.  The EU's http://ec.europa.eu/agriculture/lisbon/index_en.htm
, and its Göteborg Strategy for sustainable 
development, are just as relevant to the countrysi de as to the towns and cities.  The EU's rural 
development policy is all about meeting the cha llenges faced by rural areas, and unlocking their 
potential. 
 
 Theoretically, individual EU Member States could decide and operate completely independent rural development policie s.  However, this approach would work poorly in practice.  Not 
all countries in the EU would be able to afford th e policy which they needed.  Moreover, many of the 
issues addressed through rural development policy do not divide up neatly at national or regional 
boundaries, but affect people further afield (for exam ple, pollution crosses borders all too easily;  and 
more generally, environmental sustainability has b ecome a European and international concern).  
Also, rural development policy has links to a number of  other policies set at EU level.  Therefore, the 
EU has a common rural development policy, whic h 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 http://eur-
lex.europa.eu/LexUriServ/LexUr iServ.do?uri=CELEX:32005R1698:EN:NOT .  Under this G/SCM/N/186/EEC 
Page 50  
 
  Regulation, rural development 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. 
  To help ensure a balanced approach to polic y, Member States and regions are obliged to 
spread their rural development funding between all three of these thematic axes.  A further 
requirement is that some of the funding must support projects based on experience with the 
http://ec.europa.eu/agriculture /rur/leaderplus/index_en.htm
.  The "Leader approach" to rural 
development involves highly individual projects designed and executed by local partnerships to 
address specific local problems.  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 must be based on http://eur-
lex.europa.eu/LexUriServ/LexUr iServ.do?uri=CELEX:32006D0144:EN:NOT .  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. 
 
2. Rural development measures 
 Council Regulations (EEC) 1698/2005 (JO L.277 of 21.10.2005, p1) constitutes the legal 
basis for the Rural Development measures summa rized in section E.2 of this notification. 
 
2.1 Axis 1:  Improving compet itiveness for farming and forestry 
 
• Vocational training and information actions
, including diffusion of scientific 
knowledge and innovative practi ces, 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. 
 
• Setting up of young farmers .  Support is granted to persons who 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 occ upational skills and competence and submit  G/SCM/N/186/EEC 
 Page 51 
 
 
  a business plan for the development of their farming activities.  The support shall be 
granted up to the maximum amount laid down in the Annex. 
 
• Early retirement of farmers  and farm workers.  Support is granted to farmers who 
decide to stop their agricultural activity fo r the purpose of transferring the holdings to 
other farmers and to farm workers who decide to stop all farm 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 sh e must stop all commercial farming activity 
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 farm worker.  It shall not go beyond the 70th birthday of the transferor and the 
normal retirement age of the farm worker.  The support shall be granted up to the maximum amount. 
 
• 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 th e statutory management requirements and 
the good agricultural and environmental cond itions provided for in Articles 4 and 5 of 
and in Annexes III and IV to Regulati on (EC) No. 1782/2003 and the occupational 
safety standards based on Community legislation. 
 
• Setting up of farm management, farm  relief and farm advisory services , as well as of 
forestry advisory services.  Support for the u se of advisory services shall be limited to 
80 per cent of the cost or a maximum of Є 1500.  Support for 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. 
 
• Modernisation of agricultural holdings
.  Support for modernisation of agricultural 
holdings is granted for tangible and/or intangible investments which improve the 
overall performance of the agricultural hold ing and respect the Community 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 are 
made in order to comply with newly introdu ced Community standards.  In that case, a 
period of grace, not exceeding 36 months from the date on which the standard 
becomes mandatory for the agricultural hol ding, may be provided to meet that 
standard.  In the case of young farmers receiving setting up support, the modernization support may be granted for investments to comply with existing 
Community standards, when identified in a business plan.  The period of grace within 
which the standard needs to be met, ma y 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. 
 
• Adding value to agricultural and forestry products
.  Support is granted for tangible 
and/or intangible investments which improve the overall performance of the enterprise and which concern the processing and/or marketing of products covered by 
Annex I to the Treaty, except fishery 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, except fishery pr oducts, and to forestry products and which G/SCM/N/186/EEC 
Page 52  
 
  respect 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. 
 
• Cooperation for development of ne w products, processes and technologies
 in the 
agriculture and food sector and in the forest ry 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. 
 
• Improving and developing infrastructure relate d to the development and adaptation of 
agriculture and forestry  .  Support may cover notably operations related to access to 
farm and forest land, land consolidatio n and improvement, energy supply and water 
management. 
 
• 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 protection, public 
health, animal and plant health, animal welfare and occupational safety.  These 
standards must be newly introduced in na tional legislation implementing Community 
law and impose new obligations or restric tions to farming practice which have a 
significant impact on typical farm operating costs and concern a significant number of farmers.  The support is granted as a flat-rate, temporary and digressive aid on an 
annual basis, for a maximum duration of five years from the date the standard 
becomes mandatory in accordan ce with Community legislation.  Support shall be 
limited to a maximum of Є 10.000 per holding. 
 
• 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, shall not be eligible for s upport.  The support is granted as an annual 
incentive payment whose level shall be determ ined according to the level of the fixed 
costs arising from participation in suppor ted schemes, for a maximum duration of five 
years.  The support is limited to a maximum amount Є 3.000 per holding. 
 
• Supporting producer groups for info rmation and promotion activities  for products 
under food quality schemes.  Support concerns  products covered by the support of the 
quality schemes mentioned above.  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: 
 
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 proportion of their output 
(semi-subsistence agricultural holdings) sh all be granted to farmers who submit 
a business plan.  The support is paid up to a maximum of Є 1500 per holding 
per year for a maximum of five years. 
  G/SCM/N/186/EEC 
 Page 53 
 
 
  o supporting setting up of producer groups .  Support is granted in order to 
facilitate the setting up and administrati ve operation of producer groups for the 
purposes of firstly adapting the produc tion and output of producers who are 
members of such groups to market require ments.  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, w ith particular regard to harvesting 
and availability.  The support can be granted as a flat-rate aid in annual instalments for the first five years fo llowing the date on which the producer 
group was recognised.  It shall be calcu lated on the basis of the group's annual 
marketed production, up to the ceilings of Є 100,000 in the first year.  The 
support shall be granted to producer gro ups which are officially recognised by 
the Member State's competent authority by 31 December 2013. 
 
2.2 Axis 2:  environment and countryside 
 
• Natural handicap payments to farmers in mountain areas and other than mountain 
areas .  Payments compensate for farmers' a dditional costs and income forgone related 
to the handicap for agricultural production in the area concerned.  Payments are 
granted to farmers who undertake to pursu e their farming activity in areas designated 
for at least five years from the first payment.  Payments are fixed between minimum Є 25 and maximum Є 250 per hectare. 
 
• Natura 2000 payments and payments linked to Directive 2000/60/EC
.  Support is 
granted annually and per hectare of UAA to farmers in order to compensate for costs incurred and income foregone resulting fro m disadvantages in the areas concerned 
related to the implementation of Direct ives 79/409/EEC, 92/43/EEC and 2000/60/EC.  
Support is limited to the maximum amount of Є 500 per hectare. 
 
• Agri-environment payments
.  Member States must make the support available 
throughout their territories, in accord ance with their specific needs.  
Agri-environment payments are granted to farmers who make on a voluntary basis agri-environmental commitments.  Where duly justified to achieve environmental 
objectives, agri-environment payments may be granted to othe r land managers.  
Agri-environment payments cover only those commitments going beyond the 
relevant mandatory standards 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 pr otection product use and other relevant 
mandatory requirements established by natio nal legislation and identified 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 costs 
and income foregone resulting from the comm itments made.  Wher e 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 between 
Є 200 per Livestock Unit and Є 450-900 per hectare.  Support may be provided for 
the conservation of genetic resources in ag riculture for operations not covered by the 
provisions under paragraphs 1 to 4. 
 
• First afforestation of agricultural land
.  Support covers only one or more of 
(a) establishment costs;  (b) an annual premiu m per hectare afforested to contribute to 
covering maintenance costs for a maximum of  five years and (c) an annual premium G/SCM/N/186/EEC 
Page 54  
 
  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 
afforestation of agricultural land owned by public authorities covers only the cost of 
establishment.  Support to farmers or othe r natural persons and private law bodies is 
limited a maximum of Є 700 per hectare 
 
• Animal welfare payments
 granted to farmers who make on a voluntary basis animal 
welfare commitments.  They cover only those commitments going beyond the relevant mandatory standards established pur suant to Article 4 of and Annex III to 
Regulation (EC) No. 1782/2003 and ot her relevant mandatory requirements 
established by national legislation and identified in the programme.  The 
commitments are undertaken as a general ru le for a period between five and seven 
years.  Where necessary and justified, a l onger period shall be determined according 
to the procedure referred to in Article 90(2)  for particular types of commitments.  The 
payments cover additional costs and inco me foregone resulting from the commitment 
made.  Where necessary, they may cover also transaction cost. 
 
• Support for non-productive investments
.  Support provided is granted for 
(a) investments linked to the achievement of commitments undertaken 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 other high nature value areas to be defined in the programme. 
 
2.3 Axis 3:  Improving quality of life in rural areas and diversification  of the rural economy 
 
• Support for the creation and development of micro-enterprises 
with a view to 
promoting entrepreneurship and developing the economic fabric. 
 
• Basic services for the economy and rural population .  The support covers the setting 
up of basic services, including cultural and leisure activities, concerning a village or group of villages, and related small-scale infrastructure. 
 
• Conservation and upgrading of the rural heritage
.  The support covers the drawing-up 
of protection and management plans relati ng 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 heritage and with the 
development of high natural value sites.   It also covers support for studies and 
investments associated with maintenance, restoration and upgrading of the cultural 
heritage such as the cultural features of villages and the rural landscape. 
 
• Training and information  measure for economic actors ope rating in the fields covered 
by axis 3.  Support does not include courses of  instruction or training which form part 
of normal education programmes or systems at secondary or higher levels. 
 
2.4 Leader axis 
 
• The support granted under the Leader axis shall be for: 
 
• Implementing local development strategies with a view to achieving the 
objectives of one or more of the three other axes. 
  G/SCM/N/186/EEC 
 Page 55 
 
 
  • Implementing cooperation projects. 
 
• The support is granted to inter-territorial  or transnational cooperation projects.  
"Inter-territorial cooperation" means cooperation within a Member State.  
"Transnational cooperation" means coope ration between territories in several 
Member States and with terr itories in third countries.  Only expenditure relating 
to the territories within the Community shall be eligible for support. 
 
• Running local action groups, acquiring sk ills and animating through studies, 
training and promotional events. 
 F. SAPARD/IPARD 
1. Title of the programme
 
 
SAPARD, the Special Accession Programme fo r Agriculture and Rural Development. 
 2. Period covered by the notification
 
 
1 January 2007 - 31 December 2008. 
 3. Policy objective and/or purpose of the programme
 
 
Establish a framework for Community support fo r sustainable agriculture and sustainable 
rural development for the pre-accession period  for the eight new Member States, Czech 
Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Slovakia, Slovenia, which joined the 
European Union on 1st Lay 2004, for Bulgaria and Romania, which joined on 1st January 2007 
and for Candidate Country Croatia. 
 4. Background and authority for the programme
 
 
Council Regulation (EC) No. 1268/1999 of 21 June 1999 on Community support for pre-accession measures for agriculture and rura l development in the applicant countries of 
Central and Eastern Europe in the pre-accession period. 
 
5. Form of assistance granted – Grants from Community budget for
 
  SAPARD operational programmes co-financed by the European Commission and the 
SAPARD beneficiary countries. 
 6. To whom and how the assistance is provided
 
 
The aid is co-financed by the European Commi ssion together with the SAPARD beneficiary 
countries and implemented through multi-annua l operational programmes approved by the 
Commission based on the aims of the SAPARD instrument.  By means of decentralised management the implementation of the programmes in terms of selection, approval, controls 
and financial execution of the individual project s, is delegated to the SAPARD beneficiary 
countries.  Aid to final beneficiaries is normally paid in the form of grants. 
 G/SCM/N/186/EEC 
Page 56  
 
  7. Total expenditure under the programme
 
 
Expenditure for pre-accession in EU25/27 countries (million€) 
 
Financial instrument 2006 2007 2008 
Sapard 214 285 145 
Ipard 0 0 0 
Other - - - 
Total 214 285 145 
 8. Duration of the programme
 
 
 SAPARD covers the period 2000 to 2006.  For the programmes of the eight new Member 
States annual commitments were made for the years 2000 to 2003.  Annual commitments for 
the programmes of Bulgaria and Romania were made for the years 2000 to 2006.  Croatia had 
a single commitment for the year 2006.  No new commitments were made after 2006. 
 
 The programmes of the eight new Member States were closed by means of payment of the 
final balance of the aid made in the years 2006 to 2008.  The final payment applications for the programmes of Bulgaria, Romania and Croatia are expected to be received before the end of the 2009. 
 9. Trade effects
 
 
 No, or at most minimal, trade distorting effects  G. M
EASURES FINANCED BY SAPARD/IPARD 
1. The Sapard pre-accession instrument — Comp letion of the programme (2000 to 2006) 
 In general the measures under SAPARD are, in terms of content and objectives, comparable 
to those of the European Agricultural Fund for Ru ral Development (EAFRD), with the aim to create 
structures capable of applying the aquis communautaire  upon accession. 
  The implementation of the measures and the realisation of projects under the SAPARD programmes of the beneficiary countries contribute to  the achievement of the objectives, in particular, 
to the attainment of EU standards and the sustai nable economic development and the creation of job 
opportunities in rural areas.   The main measures of the programmes are 'Invest ments in agricultural holdings", Investments 
improving processing and marketing of agricultural a nd fishery products", "Rural infrastructure" and 
"Diversification of economic activities". 
 
2. Instrument for Pre-accession Assist ance for Rural Development (IPARD) 
 Legal basis:  Council Regulation (EC) No. 1085/2006 of 17 July 2006 establishing an 
Instrument for Pre-Accession Assistance  (IPA), (OJ L 210, 31.7.2006, p. 82) 
 
 IPA is intended to cover the Community assi stance by means of operational programmes to 
the candidate and potential candidate countries in  progressive alignment with the standards and 
policies of the European Union, including where appropriate the acquis communautaire , with a view 
to membership.   G/SCM/N/186/EEC 
 Page 57 
 
 
   The rural development component IPARD shall su pport countries in their preparation for the 
implementation and management of the common agricu ltural policy.  In particular it shall contribute 
to the sustainability of the agricultural sector and rural development and to the preparation of the 
candidate countries for the implementation of EU structures and post-accession EU-funded rural 
development programmes. 
 
V. INDUSTRY 
A. AID TO THE COAL INDUSTRY  
 Having regard to the EC Treaty, in particul ar Article 87(3)(e) thereof, Council Regulation 
(EC) No. 1407/2002 of 23 July 2002 was established as the new legal framework for state aid to the 
Community coal industry.  This Regulation a pplies until 31 December 2010.  In addition, the 
provisions of Article 88 EC Treaty and Counc il Regulation (EC) No. 659/1999 also apply. 
  According to Council Regulation 1407/2002, di fferent categories of aid can be considered 
compatible with the common market: 
 
Aid Conditions 
Aid for the reduction of activity 
(Article 4): - closure plan, with a deadline of 
31 December 2007; 
 - aid may not exceed the difference between 
production costs and revenue; 
Aid for accessing coal reserves (Article 5):  
 Two categories are foreseen:  
 - Aid for initial investment: - operating plan to ensure economic viability; 
 - not more than 30% of the total costs; 
  - Current production aid:  
 - part of a plan for accessing coal reserves; 
- aid granted to production units which afford the 
best economic prospects. 
Aid to cover exceptional costs (Article 7) - cost s arising from rationalisation and restructuring. 
In addition, the following rules apply for all the categories of aid foreseen: 
- The overall amount of aid to the coal industry granted shall follow a downward trend so as to 
result in a significant reduction. 
- Aid may not cause lower prices than those for coal from third countries. 
- Aid may not cause distortion of competition. - Member States had, on duly justified grounds, until June 2004 to notify the Commission of the 
individual identities of production units forming part of a closure plan.  For the countries which joined the European Union on 1 May 2004,  this deadline was set at August 2004. 
- Member States shall notify the Commission of  the amount and full information about the 
calculation of the aid actually paid during a coal year not later than six month after the end of 
that year. 
- The Commission takes a decision in accordance with the rules of procedure laid down in 
Regulation (EC) No. 659/1999 and in the light of the plans submitted.  
 G/SCM/N/186/EEC 
Page 58  
 
  State aid authorized 2005 – 2008 (in millions €)
 
 
 2005 2006 2007 2008 
Germany 
- operating aid 
- aid for the reduction of activity - other  
1,516.2 
597.7 602.4 1,712.0
0
806.0 
1,877.0 
0 
677.0 1,773.0 
n/a 
717.0 
Spain 
- operating aid 
- aid for the reduction of activity 
- other 273.7 
239.3 581.6 393.0
119.7585.2n/a 
n/a n/a n/a 
n/a n/a
United Kingdom 
- operating aid - aid for the reduction of activity 
- other  
0 
0 
36.7 0
0
0 
0 
0 
0  
0 
0 
0
Poland 
- operating aid 
- aid for the reduction of activity - other  
0 0 
369.1 0
0
294.1 
0 0 
67.8  
0 0 
61.7 
Czech Republic 
- operating aid 
- aid for the reduction of activity - other  
0 0 
14.72 0
0
14.72 
0 0 
14.72  
0 0 0
Hungary 
- operating aid 
- aid for the reduction of activity 
- other  
39.1 
0 
0 36.5
0
0 
34.6 
0 
0  
30.8 
0 
0
Slovak Republic - operating aid - aid for the reduction of activity 
- other  
0 
0 
4.8 0
0
6.6 
0 
0 
5.8  
0 
0 
5.7 
Slovenia 
- operating aid 
- aid for the reduction of activity - other   
0 
0 
15.3 0
0
17.5 
0 
0 
18.5  
0 
0 
17.8 
Bulgaria 
- operating aid 
- aid for the reduction of activity - other   
n/a n/a n/a 1.1
n/a
3.8 
n/a n/a n/a  
n/a n/a n/a
Romania 
- operating aid 
- aid for the reduction of activity 
- other   
n/a n/a 
n/a n/a
n/a
n/a 
n/a n/a 
n/a  
n/a n/a 
n/a
EU TOTAL - operating aid - aid for the reduction of activity 
- other  
1,829.0 
837.0 
1,624.6 2,142.6
119.7
1,727.9 
1,911.6 
0 
783.8  
1,803.8 
0 
802.2 
  G/SCM/N/186/EEC 
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  B. COMMUNITY FRAMEWORK PROGRAMMES IN THE FIELD OF RESEARCH  
 
1.  Title of the subsidy programme  
 Sixth Framework programme  
 - the sixth framework programme of the European Community for research, 
technological development and demons tration activities (2002-2006), and 
  - the sixth framework programme of the European Atomic Energy Community 
(EURATOM) for research and training activities (2002-2006). 
 
2.  Period covered
 
 Calendar years of 2005 and 2006  3. Policy objective and/or purpose of the programme
 
 
 Financial participation in Community r esearch and technological development (RTD) 
activities during the period 2005-2006 is provided through the two above-mentioned framework programmes.   The legal bases of these programmes are, resp ectively, Article 166 of the EU Treaty and 
Article 7 of the Treaty establishing the European Atomic Energy Community. 
  The sixth framework programme of the Europ ean Community is aimed at strengthening the 
scientific and technological bases of Community industry, encouraging the development of its competitiveness and contributing to the implementa tion of the other Community policies under the 
Treaty.  These objectives and the activities to be undertaken are stated in the Treaty and further 
implemented through the Decision adopting this  framework programme (Decision N° 1513/2002/EC 
of 27 June 2002
1). 
 4. Background and authority for the subsidy
 
 
 The framework programme of th e European Atomic Energy Comm unity has two main parts:  
nuclear fission and controlled thermonuclear fusi on.  The objectives and activities to be undertaken 
are set out in the Decision adopting this framewo rk programme (2002/668/Euratom of 3 June 20022). 
  The activities under the two framework programmes relate to fundamental  research, industrial 
research or pre-competitive development.  Fi nancing of product development is excluded. 
  The arrangements for implementing the two framework programmes are essentially the same and are therefore described together in the following paragraph.  5. Form of subsidy
 
 
 The framework programmes are implemented through specific programmes, which are the 
subject of Council decisions.3 
 
                                                      
1 OJ L 232, 29/8/2002, p. 1. 
2 OJ L 232, 29/8/2002, p. 34. 
3 All these are published in the OJ L 294 of 29/10/2002. G/SCM/N/186/EEC 
Page 60  
 
   Community support to RTD activities is provided in the form of financing ("grants" within 
the meaning of Article 25.3 of the WTO Agreem ent on Subsidies and Countervailing Measures) 
granted to projects following, as a general rule , an invitation for proposals and an evaluation 
procedure with independent experts and selection procedure.  
6. To whom and how the subsidy is provided
 
  Research projects are carried out primarily by participants established within the Community.  
Legal entities established in a country that has signed an association agreement (associated state) with 
the Community may participate in a project and receive Community funding from the sixth 
framework programme on the same grounds as those established in Member States.  Legal entities 
established in countries targeted by the intern ational cooperation activities of the framework 
programme may participate and receive funding un der certain sixth framework programme research 
projects.  Legal entities established in countries that have signed a scientific and technical cooperation 
agreement with the Community may participate in sixth framework programme research projects.  
Legal entities established in any ot her third country may participate in sixth framework programme 
research projects.  Funding for legal entities in the latter two categories may be provided if provision 
is made for this or if it is essential for carrying out the project.   Research projects must include the participa tion of at least three independent legal entities 
established in three different Member States or associ ated states of which two must be Member States 
or associated candidate countries.  Partnerships us ually include universities, research organisations 
and industry.   The European Commission is responsible fo r the implementation of the programmes.  
Contracts concluded with the Commission govern the rights and obligations of each partner (see 
http://europa.eu.int/comm/research/ fp6/model-contract/index_en.html
). 
 7. Amount and duration of subsidy
 
 
2005-2006 Total amounts 
(in millions of Euros) 
Sixth framework programme of the European Community for research, 
technological development a nd demonstration activities 9,238 
Sixth framework programme of the European Atomic Energy Community 
(EURATOM) 107 
Total 9,345 
 
8. Duration of the subsidy  
 The programme lasts from 2002 until 2006  9. Effects on trade
 
  The sixth RTD framework programmes have no di rect impact on trade.  As a general rule, 
further work is always necessary for the results of a RTD project to lead to a commercially exploitable 
process or product.   Furthermore, access to the results can be shared among partners and information may be made more widely available under certain conditions, whic h serves the public interest.  One of the main 
benefits lies in establishing links among research co mmunity partners, within Europe but also with 
non-EU countries.   G/SCM/N/186/EEC 
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   The economic impact of industrially oriented programmes can be assessed only several years 
after the completion of the projects because further i nvestment is required after the end of the research 
projects to develop any competitive applications.  1. Title of the subsidy programme
 
 
 Seventh Framework Programmes   - the Seventh Framework Programme of the European Community for research, 
technological development and demons tration activities (2007-2013), and 
 
 - the Seventh Framework Programme of the European Atomic Energy Community 
(EURATOM) for research and training activities (2007-2011). 
  The arrangements for implementing the two fr amework programmes are essentially the same 
and are therefore described together in the following paragraphs. 
 2. Period covered
 
 Calendar years of 2007 and 2008.  3. Policy objective
 
 
 Financial participation in Community r esearch and technological development (RTD) 
activities during the period 2007 and 2008 is provi ded through the two above-mentioned framework 
programmes.  
 The seventh framework programme of the Eur opean Community is aimed at strengthening the 
scientific and technological bases of Community industry, encouraging the development of its competitiveness and contributing to the implementa tion of the other Community policies under the 
Treaty.  These objectives and the activities to be undertaken are stated in the Treaty and further 
implemented through the Decision adopting this framework programme (Decision No. 1982/2006/EC 
of 18 December 2006
4). 
 
 The framework programme of th e European Atomic Energy Comm unity has two main parts:  
nuclear fission and controlled thermonuclear fusi on.  The objectives and activities to be undertaken 
are set out in the decision adopting this framework programme (2006/970/Euratom of 
18 December 20025). 
 
 The activities under the two framework programmes relate to fundamental  research, industrial 
research or pre-competitive development.  Fi nancing of product development is excluded. 
 4. Background and authority for the subsidy
 
 
 The legal bases of these programmes are, respectively, Article 166 of the EC Treaty and 
Article 7 of the Treaty establishing the European Atomic Energy Community. 
  The legal framework of the framework progr ammes consists of a number of legal and 
implementing acts: 
 
 A decision by the Council on the "Framework Programme": 
                                                     
 
4 OJ L 412, 30.12.2006, p. 1. 
5 OJ L 400, 30.12.2006, p.1. G/SCM/N/186/EEC 
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 - EC:  Decision No. 1982/2006/EC of the European Parliament and of the Council of 
18 December 2006, OJ L 412, 30.12.2006, p. 1 
  - Euratom:  Council Decision 2006/970/Euratom of 18 December 2006, OJ L 400, 
30.12.2006, p. 60 
 Each framework programme is furt her implemented by decisions by  the Council adopting "Specific 
Programmes":  
 - EC:  Specific Programmes "Cooperation", "I deas", "People", "Capacities" and "Direct 
Actions by the Joint Research Centre" – Council Decisions 2006/971-975/EC of 
19 December 2007, OJ L 400, 30.12.2006, p. 86, 243, 272, 299 and 368 respectively 
  - Euratom:  Specific Programmes "Euratom" and "Direct Actions by the Joint Research 
Centre" – Council Decisions 2006/976 and 977/Euratom of 19 December 2006, OJ 
L 400, 30.12.2006, p. 404 and 434 
 Rules governing the implementation of the activities ar e contained in the "Rules for Participation", a 
regulation adopted by the European Parliament and the Council (EC) and by the Council alone 
(Euratom): 
 
 - EC:  Regulation (EC) No. 1906/2006 of the European Parliament and of the Council of 
18 December 2006, OJ L 391, 30.12.2006, p. 1 
  - Euratom:  Council Regulation (Eur atom) No. 1908/2006 of 19 December 2006, 
OJ L 400, 30.12.2006, p. 1 
 Each year, an annual Work Programme is adopted by the Commission specifying the research topics 
and other conditions for the award of grants.  Grant agreements are concluded with the particip ants in the projects.  The various model grant 
agreements, as well as the other documents are available at: http://cordis.europa.eu/
. 
 5. Form of the subsidy
 
  Community support to RTD activities is provided in the form of grants within the meaning of 
Article 25.3 of the WTO Agreement on Subsidies and Countervailing Measures. 
 6. To whom and how the subsidy is provided
 
  Research projects are carried out primarily by participants established within the Community.  
Legal entities established in a country that has signed an association agreement (associated state) with 
the Community may participate in a project and receive Community funding from the Seventh 
Framework Programme on the same terms as those established in Member States.  Legal entities 
established in countries targeted by the internati onal cooperation activities of  the Seventh Framework 
Programme may participate and receive funding u nder certain research projects.  Legal entities 
established in countries that have signed a scienc e and technology cooperati on agreement with the 
Community may participate in Seventh Framewor k Programme research projects.  Legal entities 
established in any other third country may partic ipate in Seventh Framework Programme research 
projects.  Funding for legal entities in the latter two categories may be provided if provision is made 
for this in the agreement or if it is essential for carrying out the project. 
  G/SCM/N/186/EEC 
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   Research projects must include the participa tion of at least three independent legal entities 
established in three different Member States or associated states.   The grant is awarded to projects submitted by consortia of universities, research organisations 
and undertakings following, as a general rule, an i nvitation for proposals and an evaluation procedure 
with independent experts and selecti on procedure.  The undertakings apply in function of their interest 
in carrying out a research project on a specific res earch topic in collaboration with other partners. 
  The amount of the grant is typically calculated as a percentage (typically 50 per cent or 75 per cent) of eligible costs of the project.  Eligible costs are defined in the Rules for Participation. 
 
7. Amount of subsidy
 
 
2007-2008 Total amounts granted 
(in millions of EUR) 
Seventh framework programme of the European Community for 
research, technological developmen t and demonstration activities 6,387 
Seventh framework programme of the European Atomic Energy 
Community (EURATOM) 77 
Total 6,464 
 
8. Duration of the subsidy and/or any other time limits attached to it, including date of 
inception/commencement.  
 A project typically lasts for 3-4 years and the Community funding is awarded for this period.  Subject to delivery of required doc uments at pre-determined deadlines, pa yments are released in instalments. 
 
9. Trade effects of the subsidy
 
 
(a) for the three most recent years fo r which statistics are available; 
(b) for a previous representative year, which, where possible and meaningful, should be 
the latest year preceding the introduction of the subsidy or preceding the last major change in the subsidy. 
 The Seventh Framework Programmes have no dire ct impact on trade.  As a general rule, 
further work is always necessary for the results of an RTD project to lead to a commercially 
exploitable process or product.   Furthermore, access to the r esults can be shared among part ners and information may be 
made more widely available under certain conditions, which serves th e public interest.  One of the 
main benefits lies in establishing links among resear ch community partners, within Europe but also 
with non-EU countries.   The economic impact of industrially oriented  programmes can be assess ed only several years 
after the completion of the projects because further i nvestment is required after the end of the research 
projects to develop any competitive applications. 
  G/SCM/N/186/EEC 
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  C. R
ESEARCH ON COAL AND STEEL  
 The Treaty establishing the European Coal and Steel Community (ECSC) expired on 
23 July 2002.  The remaining assets at the expiry of the ECSC were transferred to the European 
Community and a common Research Fund for Coal and Steel (RFCS) was created, dedicated to research in the coal and steel sectors.  The activ ities carried out under this Fund are exclusively 
financed by the yearly returns generated by these assets. 
  The Research Programme of the Research F und for Coal and Steel was established by the 
Council Decisions 2003/76/EC, 2003/77/EC and 2003/ 78/EC of 1 February 2003, published in the 
Official Journal of 5 February 2003 (see OJ L 29/22, OJ L 29/25, OJ L 29/28). 
 
 The programme is closely co-ordinated with ot her activities, carried out either in the Member 
States or existing Community research programm es, such as the Framework Programme of the 
European Community for research, technological deve lopment and demonstration activities.  In order 
to increase the impact of this programme, th e European Commission will encourage and promote 
co-ordination, complementarities and synergy betw een the different research programmes and support 
the exchange of information between projects fi nanced under this programme and those financed 
under the Research Framework Programme.   The programme related documents and the info rmation package are available on CORDIS at:  
http://www.cordis.lu/coal-steel-rtd/home.html
. 
 
 For coal and steel, the Community contributes financially in the following ways:  through research, pilot and demonstration (RTD) pr ojects, accompanying measures and support and 
preparatory actions.  
(1) Research, Pilot and Demonstration: 
  Research projects are intended to cover investig ative or experimental work with the aim of 
acquiring further knowledge.  The financial contributi on of the Community is up to 60 per cent of the 
allowable costs.  
 Pilot projects address the construction, operati on and development of an installation or a 
significant part of an installation on an appropriate scale.  These installations should have a sufficient scale for use.  They should allow the investigati on of potential for putting th eoretical or laboratory 
results either into practice or to increase the relia bility of the technical and economic data needed to 
progress to the demonstration stage, and in certain c ases to the industrial and/or commercial stage.  
The financial contribution of the Community is  up to 40 per cent of the allowable costs. 
  Demonstration project:  aim at constructing and/or operating an  industrial-scale installation or 
a significant part of an industrial-scale installation.  Such projects aim to bring together all the technical and economic data in order to proceed with  the industrial and/or commercial exploitation of 
the technology at minimum risk.  The financial cont ribution of the Community is up to 40 per cent of 
the allowable costs. 
 
(2) Accompanying measures are designed to complement and/or co-ordinate research 
activities related to this programme. 
 
(3) Support measures:  this includes the diss emination of research results, the promotion 
of the use of knowledge gained and th e support of training and mobility of 
researchers. 
  G/SCM/N/186/EEC 
 Page 65 
 
 
   It is worth noting that the results of all RFCS funded research projects are made public and 
can be acquired against a small fee by any organi sation or individual, as provided for under Article 4 
of annex III of the model contract.  This allows  for a wide and non-discriminatory dissemination of 
the research results.  
 Total EC support provided to coal and st eel projects in the period 2005 until 2008 are: 
 
Year 2005 2006 2007 2008 
Support in Million of € 56 55 54 53 
 
VI. OTHER PROGRAMMES 
A. FIFG 
1. Title of the programme  
 
 Financial Instrument of Fisheries Guidance (FIF G) – structural measures in the fisheries and 
aquaculture sector.  2. Period covered by the notification
 
 
 2005 - 2006. 
 3. Policy and/or programme objectives
 
  Community structural measures in the fisher ies and aquaculture sector and the processing and 
marketing of its products. 
  The objectives of the instruments are the following:   - To contribute to achieving a sustainable balance between fishery resources and their 
exploitation. 
  - To strengthen the competitiveness of structures and the development of economically 
viable enterprises in the sector. 
  - To improve market supply and the value added to fisheries and aquaculture products. 
 
 - To contribute to the revitalization of areas that depend on fisheries.  4. Legal authority
 
 
 Articles 32, 33, 158, 159 and 161 of the EC  Treaty, Regulation (EC).1260/99, Regulation 
(EC) 2792/99, Regulation (EC) 2369/2002.  5. Type of aid
 
  Aid for the restructuring of fishing fleets, aquaculture, processing and marketing circuits, port 
facilities and socio-economic measures. 
 G/SCM/N/186/EEC 
Page 66  
 
  6. To whom and how the subsidy is provided
 
  Co-financing principle and principle of regionally diversified action.   Ship-owners, enterprises, producer organi zations, public and private bodies, professional 
organizations, cooperatives, fishermen. 
 7. Total budget of the programme
 
  Objective 1 Regions:  2000-2006:  Є 2.6 billion ( Є 0.403 billion budgeted in 2000). 
 Other Regions:  2000-2006:  Є 1.1 billion. 
  2005 (all regions):  660 MEUR, 2006 (all regions):  702 MEUR.  8. Duration of the programme
 
 
 2000 - 2006.  9. Trade effects
 
  The Community has a shortfall in fishery and aquaculture products and is a major importer of 
these products from non-Community countries.  The structural aid has only a very small influence on 
this situation.  B. E
UROPEAN FISHERIES FUND (EFF) 
1. Title of the measure  
 
European Fisheries Fund 
 2. Period covered by the notification
 
 
2007-2008 
 
3. Policy objectives and/or programme objectives  
  The EFF, the successor of the FIFG, exists to gr ant financial support to the European fisheries 
sector during the period 2007-2013 to help it adapt to  changes required in the sector.  The objectives 
of the EFF are to: 
  - support the Common Fisheries Policy with a view to guaranteeing the sustainable 
exploitation of aquatic resources and th e economic, environmental and social 
sustainability of the fisheries sector; 
 
 - promote the sustainable development of inland fishing; 
  - promote a sustainable balance between resources and the fishing capacity of the 
Community fishing fleet; 
 
 - strengthen the competitiveness of the ope rating structures and the development of 
economically viable enterprises in the fisheries sector; 
  G/SCM/N/186/EEC 
 Page 67 
 
 
   - foster the protection and enhancement of the environment and natural resources 
where related to the fisheries sector; 
  - encourage sustainable development and im provement of the quality of life in areas 
with an active fishing industry; 
 
 - promote equality between men and women in  the development of the fisheries sector 
and fisheries areas. 
 4. Legal authority
 
 
 Articles 36, 37, 158, 159 and 161 of the EC  Treaty, Council Regulation (EC) No. 1198/2006 
of 27 July 2006 on the European Fisheries Fund, Commission Regulation (EC) No. 498/2007 of 26 March 2007 laying down detailed rules for th e implementation of Council Regulation (EC) 
No. 1198/2006 on the European Fisheries Fund; 
 
5. Type of aid
 
  Aid for the restructuring of fishing fleets, aquaculture, processing and marketing circuits, port 
facilities, selective fishing methods, financing of local strategies in support of the sustainable 
development of fisheries areas, and socio-economic measures. 
 
6. To whom and how the subsidy is provided
 
  Co-financing principle and principle of regionally diversified action.  
 Ship-owners, enterprises, producer organi zations, public and private bodies, professional 
organizations, cooperatives, fishermen.  7. Total budget of the programme
 
  Total budget for 2007 – 2013:  Є 4.3 billion 
 
 2007:  428 MEUR, 2008:  611 MEUR.  8. Duration of the programme
 
 
 2007 - 2013 
 9. Trade effects
 
  The Community has a shortfall in fishery and aquaculture products and is a major importer of 
these products from non-Community countries.  The structural aid has only a very small influence on 
this situation. 
 G/SCM/N/186/EEC 
Page 68  
 
  C. C
OMMON ORGANISATION OF MARKETS IN FISHERY AND AQUACULTURE PRODUCTS  
1. Title of the measure  
  Common Organisation of the Market in Fishery and Aquaculture Products.  
2. Period covered by the notification
 
  2005 - 2008  3. Policy objectives and/or programme objectives
 
 
 The objectives of this instrument are the following:   - To stabilize to promote sustainable fishing and optimum use of fish products.  - To stabilize the market. 
 - To ensure a regular supply of high-quality products. 
 - To guarantee reasonable consumer prices.  - To support fishermen's incomes.  4. Legal authority
 
 
 Articles 32, 33 and 34 of the EC Treaty, Regulation (EC) No. 104/2000. 
 5. Intervention mechanisms
 
  Financial compensation, carry-over aid, auto nomous withdrawal and carry-over, private 
storage aid, compensatory paymen t for tuna supplied to industry. 
 6. To whom and how the subsidy is provided
 
  Mechanisms implemented by producers' organizations.  
 Beneficiaries:  fishermen belonging to such organizations. 
 7. Total budget of the programme
 
  2005:  28.5 MEUR  2006:  26 MEUR 2007:  25.1 MEUR 2008:  32.5 MEUR 
 
8. Duration of the programme
 
  Fishing years.  9. Effects on trade
 
 
 None in so far as the Common Organization of Markets aims at regularizing prices and not at artificially raising their level.  The amounts paid  under the programme represent less than 0,002 per 
cent of the value of landed fish in the EC.  
 
 
__________