# CE2004078EN.01007801.xml

| 27.3.2004 | EN | Official Journal of the European Union | CE 78/78 |
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27.3.2004

EN

Official Journal of the European Union

CE 78/78

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(2004/C 78 E/0076)

WRITTEN QUESTION E-2101/03

by José Ribeiro e Castro (UEN) to the Commission

(25 June 2003)

Subject:   Common agricultural policy reform — ‘capping’

Subject:

A frequent topic for discussion in debates on the reform of the CAP is that of deciding whether or not a ceiling should be imposed on the amount of aid/subsidy which, under any heading, may be allocated to a given farm or to a farmer on an individual basis. This is customarily known as ‘capping’.

On this subject, impressive arguments of a social nature are normally put forward (and also, these days, ones of a financial nature, since ‘capping’ would enable significant amounts of CAP funding to be released for the benefit of the new CAP headings, thereby reducing pressure on other mechanisms such as modulation).

The Commission:

| — | Would it therefore say why it does not advocate strict capping of CAP subsidies? |
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Would it therefore say why it does not advocate strict capping of CAP subsidies?

| — | Does it not believe this to be an imperative of justice? |
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Does it not believe this to be an imperative of justice?

| — | For what reason does it not take advantage of the resulting major financial benefits in order to improve the redistribution of aid and incentives and to provide greater support for the reformed CAP's new budget headings? |
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For what reason does it not take advantage of the resulting major financial benefits in order to improve the redistribution of aid and incentives and to provide greater support for the reformed CAP's new budget headings?

Answer given by Mrs Fischler on behalf of the Commission

(24 July 2003)

(24 July 2003)

In its Communication on the Mid-term Review of the Common Agricultural Policy of 10 July 2002 (1), the Commission did advocate capping of direct payments. However, it turned out in the following discussions that no consensus was possible among Member States on the introduction of strict capping.

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Thus, the Commission proposed, in the context of modulation and degressivity, to cut direct payments while granting a franchise to those farmers who receive smaller amounts of direct payments. According to this proposal, the cuts in direct payments were to be fully reimbursed up to an amount of EUR 5000 in direct payments received and half for all amounts between EUR 5000 and EUR 50 000. The money was to be spent on rural development measures.

In the final Council decisions, modulation was adopted with a franchise of EUR 5 000. As regards degressivity, the Commission proposal was not taken up. Instead the introduction of a mechanism of Financial Discipline has been announced. In this respect, a Commission Declaration states that the proposal concerning Financial Discipline would include a franchise of EUR 5 000 and possibly other franchises.

Further options for redistributing money among different regions and agricultural sectors have been added to the provisions on the optional regional application of the single farm payment scheme.

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(1)  COM(2002) 394 final.

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