# EUR-Lex - 52011PC0627 - EN

*|*

# 52011PC0627

**Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on support for rural development by the European Agricultural Fund for Rural Development (EAFRD) /* COM/2011/0627 final - 2011/0282 (COD) */**

			*

			*

EXPLANATORY MEMORANDUM

1.           CONTEXT
OF THE PROPOSAL

The Commission proposal for the Multiannual
Financial Framework (MFF) for 2014-2020 (the MFF proposal)[1] sets the budgetary framework
and main orientations for the Common Agricultural Policy (CAP). On this basis,
the Commission presents a set of regulations laying down the legislative
framework for the CAP in the period 2014-2020, together with an impact
assessment of alternative scenarios for the evolution of the policy.

The current reform proposals are based on
the Communication on the CAP towards 2020[2]
that outlined broad policy options in order to respond to the future challenges
for agriculture and rural areas and to meet the objectives set for the CAP,
namely 1) viable food production; 2) sustainable management of natural
resources and climate action; and 3) balanced territorial development. The
reform orientations in the Communication have since been broadly supported both
in the inter-institutional debate[3]
and in the stakeholder consultation that took place in the framework of the
impact assessment.

A common theme that has emerged throughout
this process is the need to promote resource efficiency with a view to smart,
sustainable and inclusive growth for EU agriculture and rural areas in line
with the Europe 2020 strategy, keeping the structure of the CAP around two
pillars that use complementary instruments in pursuit of the same objectives.
Pillar I covers direct payments and market measures providing a basic annual
income support to EU farmers and support in case of specific market
disturbances, while Pillar II covers rural development where Member States draw
up and co-finance multiannual programmes under a common framework.[4]

Through successive reforms the CAP has
increased market orientation for agriculture while providing income support to
producers, improved the integration of environmental requirements and
reinforced support for rural development as an integrated policy for the
development of rural areas across the EU. However, the same reform process has
raised demands for a better distribution of support among and within Member
States, as well as calls for a better targeting of measures aiming at
addressing environmental challenges and better addressing increased market
volatility.

In the past, reforms mainly responded to
endogenous challenges, from huge surpluses to food safety crises; they have
served the EU well both on the domestic and the international front. However,
most of today's challenges are driven by factors that are external to agriculture
and would thus require a broader policy response.

The pressure on agricultural income is
expected to continue as farmers are facing more risks, a slowdown in
productivity and a margin squeeze due to rising input prices; there is
therefore a need to maintain income support and to reinforce instruments to
better manage risks and respond to crisis situations. A strong agriculture is
vital for the EU food industry and global food security.

At the same time, agriculture and rural
areas are being called upon to step up their efforts to meet the ambitious
climate and energy targets and biodiversity strategy that are part of the
Europe 2020 agenda. Farmers, who are together with foresters the main land
managers, will need to be supported in adopting and maintaining farming systems
and practices that are particularly favourable to environmental and climate
objectives because market prices do not reflect the provision of such public
goods. It will also be essential to best harness the diverse potential of rural
areas and thus contribute to inclusive growth and cohesion.

The future CAP will not, therefore, be a
policy that caters only for a small, albeit essential, part of the EU economy,
but also a policy of strategic importance for food security, the environment
and territorial balance. Therein lies the EU added value of a truly common
policy that makes the most efficient use of limited budgetary resources in
maintaining a sustainable agriculture throughout the EU, addressing important
cross-border issues such as climate change and reinforcing solidarity among
Member States, while also allowing flexibility in implementation to cater for
local needs.

The framework set out in the MFF proposal
foresees that the CAP should maintain its two-pillar structure with the budget
for each pillar maintained in nominal terms at its 2013 level and with a clear
focus on delivering results on the key EU priorities. Direct payments should
promote sustainable production by assigning 30 % of their budgetary
envelope to mandatory measures that are beneficial to climate and the
environment. Payment levels should progressively converge and payments to large
beneficiaries be subject to progressive capping. Rural development should be
included in a Common Strategic Framework with other EU shared management funds
with a reinforced outcome-orientated approach and subject to clearer, improved
ex-ante conditionalities. Finally, on market measures the financing of the CAP
should be reinforced with two instruments outside the MFF: 1) an emergency
reserve to react to crisis situations; and 2) the extension of the scope of the
European Globalization Adjustment Fund.

On this basis, the main elements of the
legislative framework for the CAP during the period 2014-2020 are set out in
the following regulations:

–
Proposal for a Regulation of the European
Parliament and of the Council establishing rules for
direct payments to farmers under support schemes within the framework of the
common agricultural policy ('the
direct payments regulation');

–
Proposal for a Regulation of the European
Parliament and of the Council establishing a common organisation of the markets
in agricultural products (Single CMO Regulation) ('the Single CMO regulation');

–
Proposal for a Regulation of the European
Parliament and of the Council on support for rural development by the European
Agricultural Fund for Rural Development (EAFRD) ('the rural development
regulation');

–
Proposal for a Regulation of the European
Parliament and of the Council on the financing, management and monitoring of
the common agricultural policy ('the horizontal regulation');

–
Proposal for a Council regulation determining
measures on fixing certain aids and refunds related to the common organisation
of the markets in agricultural products;

–
Proposal for a Regulation of the European
Parliament and of the Council amending Council Regulation (EC) No 73/2009 as
regards the application of direct payments to farmers in respect of the year
2013;

–
Proposal for a Regulation of the European
Parliament and of the Council amending Council Regulation (EC) No 1234/2007 as
regards the regime of the single payment scheme and support to vine-growers.

The rural development regulation builds on
the proposal presented by the Commission on 6 October 2011 that sets out common
rules for all funds operating under a Common Strategic Framework.[5] A regulation will follow on the
scheme for most deprived persons, for which funding is now placed under a
different heading of the MFF.

In addition, new rules on the publication
of information on beneficiaries taking account of the objections expressed by
the Court of Justice of the European Union are also under preparation with a
view to finding the most appropriate way to reconcile beneficiaries' right to
protection of personal data with the principle of transparency.

2.           RESULTS
OF CONSULTATIONS WITH THE INTERESTED PARTIES AND IMPACT ASSESSMENT

On the basis of the evaluation of the
current policy framework and an analysis of future challenges and needs, the
impact assessment assesses and compares the impact of three alternative
scenarios. This is the result of a long process started in April 2010 and
steered by an inter-service group that brought together extensive quantitative
and qualitative analysis, including setting a baseline in the form of
medium-term projections for agricultural markets and income up to 2020 and
modelling the impact of the different policy scenarios on the economics of the
sector.

The three scenarios elaborated in the
impact assessment are: 1) an adjustment scenario that continues with the
current policy framework while addressing its most important shortcomings, such
as the distribution of direct payments; 2) an integration scenario that entails
major policy changes in the form of enhanced targeting and greening of direct payments
and reinforced strategic targeting for rural development policy in better
coordination with other EU policies, as well as extending the legal base for a
broader scope of producer cooperation; and 3) a refocus scenario that reorients
the policy exclusively towards the environment with a progressive phasing out
of direct payments, assuming that productive capacity can be maintained without
support and that the socio-economic needs of rural areas can be served by other
policies.

Against the background of the economic
crisis and the pressure on public finances, to which the EU has responded with
the Europe 2020 strategy and the MFF proposal, all three scenarios attach
different weight to each of the three policy objectives of the future CAP which
aims at a more competitive and sustainable agriculture in vibrant rural areas.
With a view to a better alignment with the Europe 2020 strategy, notably in
terms of resource efficiency, it will be increasingly essential to improve
agricultural productivity through research, knowledge transfer and promoting
cooperation and innovation (including through the European Innovation
Partnership on agricultural productivity and sustainability). Whereas EU
agricultural policy does not any more operate within a trade distorting policy
environment, additional pressure on the sector is expected from further
liberalization, notably in the framework of the DDA or the FTA with Mercosur.

The three policy scenarios were drawn up
taking into account the preferences expressed in the consultation which was
conducted in the context of the impact assessment. Interested parties were
invited to submit contributions between 23.11.2010 and 25.1.2011 and an
advisory committee was organised on 12.1.2011. The main points are summarized
below:[6]

–
There is broad agreement among stakeholders on
the need for a strong CAP based on a two-pillar-structure in order to address
the challenges of food security, sustainable management of natural resources
and territorial development.

–
Most respondents find that the CAP should play a
role in stabilizing markets and prices.

–
Stakeholders have diverse opinions concerning
the targeting of support (especially redistribution of direct aid and capping
payments).

–
There is agreement that both pillars can play an
important role in stepping up climate action and increasing environmental
performance for the benefit of EU society. Whereas many farmers believe that
this already takes place today, the wider public argues that Pillar I payments
can be more efficiently used.

–
The respondents want all parts of the EU,
including less favoured areas, to be part of future growth and development.

–
The integration of the CAP with other policies,
such as environmental, health, trade, development, was emphasised by many
respondents.

–
Innovation, development of competitive
businesses and provision of public goods to EU citizens are seen as ways to
align the CAP with the Europe 2020 strategy.

The impact assessment thus compared the
three alternative policy scenarios:

The refocus scenario would accelerate
structural adjustment in the agricultural sector, shifting production to the
most cost efficient areas and profitable sectors. While significantly
increasing funding for the environment, it would also expose the sector to
greater risks due to limited scope for market intervention. Furthermore, it
would come at a significant social and environmental cost as the less
competitive areas would face a considerable income loss and environmental
degradation, since the policy would lose the leverage of direct payments
coupled with the cross compliance requirements.

At the other end of the spectrum, the
adjustment scenario would best allow for policy continuity with limited but
tangible improvements both in agricultural competitiveness and environmental
performance. There are however serious doubts as to whether this scenario could
adequately address the important climate and environmental challenges of the
future, which also underpin the long-term sustainability of agriculture.

The integration scenario breaks new ground
with enhanced targeting and greening of direct payments. The analysis shows
that greening is possible at a reasonable cost to farmers although some
administrative burden cannot be avoided. Similarly, a new impetus in rural
development is possible provided that the new possibilities are efficiently
used by Member States and regions and that the common strategic framework with
the other EU funds does not remove synergies with Pillar I or weaken rural
development's distinctive strengths. If the right balance is struck, this
scenario would best address the long term sustainability of agriculture and
rural areas.

On this basis the impact assessment
concludes that the integration scenario is the most balanced in progressively
aligning the CAP with the EU's strategic objectives and this balance is also
found in the implementation of the different elements in the legislative
proposals. It will also be essential to develop an evaluation framework to
measure the performance of the CAP with a common set of indicators linked to
policy objectives.

Simplification has been an important
consideration throughout the process and should be enhanced in a variety of
ways, for instance in the streamlining of cross compliance and market
instruments, or the design of the small farmers scheme. In addition, the
greening of direct payments should be designed in such a way as to minimize
administrative burden including the costs of controls.

3.           LEGAL
ELEMENTS OF THE PROPOSAL

It is proposed to maintain the current structure
of the CAP in two pillars with annual mandatory measures of general application
in Pillar I complemented by voluntary measures better tailored to national and
regional specificities under a multi-annual programming approach in Pillar II.
However, the new design of direct payments seeks to better exploit synergies
with Pillar II, which is in turn placed under a Common Strategic Framework to
better coordinate with other EU shared management funds.

On this basis, the current structure of
four basic legal instruments is also maintained, albeit with the scope of the
financing regulation enlarged to bring together common provisions into what is
now called the horizontal regulation.

The proposals comply with the principle of
subsidiarity. The CAP is a truly common policy: it is an area of shared
competence between the EU and the Member States that is being handled at EU
level with a view to maintaining a sustainable and diverse agriculture
throughout the EU, addressing important cross-border issues such as climate
change and reinforcing solidarity among Member States. In the light of the
importance of future challenges for food security, the environment and
territorial balance, the CAP remains a policy of strategic importance to ensure
the most effective response to the policy challenges and the most efficient use
of budgetary resources. In addition, it is proposed to maintain the current
structure of instruments in two pillars where Member States have more leeway to
tailor solutions to their local specificities and also co-finance Pillar II.
The new European Innovation Partnership and risk management toolkit are also
placed within Pillar II. At the same time the policy will be better aligned
with the Europe 2020 strategy (including a common framework with other EU
funds) and a number of improvements and simplification elements introduced.
Finally, the analysis carried out in the framework of the impact assessment
clearly shows the cost of no action in terms of negative economic,
environmental and social consequences.

The rural development regulation builds on
the strategic approach introduced in the current period, which has had a
positive impact with Member States developing strategies and programmes on the
basis of a SWOT analysis to best tailor intervention to national and regional
specificities. The new delivery mechanism aims at reinforcing the strategic
approach – among other things by setting clearly defined common priorities for
rural development at EU level (with associated common target indicators) as well
as by making the necessary adjustments in light of experience gained to date.

The regulation also includes the European
Innovation Partnership on Agricultural Productivity and Sustainability which is
aimed at promoting resource efficiency, building bridges between research and
practice and generally encouraging innovation. The partnership acts through
operational groups responsible for innovative projects and is supported by a
network.

On the basis of the proposal presented by
the Commission on 6 October 2011 that sets out common rules for all funds
operating under a Common Strategic Framework, Pillar II of the CAP should work
in a coordinated and complementary manner with Pillar I, as well as with other
EU funds (in particular the European Regional Development Fund (ERDF), the
European Social Fund (ESF), the Cohesion Fund and the European Maritime and
Fisheries Fund (EMFF). The funds are placed under a Common Strategic Framework
(CSF) at EU level which will be transposed into Partnership Contracts at national
level including common objectives and rules for their operation. Establishing
common rules for all funds operating under a Common Strategic Framework will
make projects easier to handle for both beneficiaries and national authorities
and will also facilitate the implementation of integrated projects.

In this context, rural development policy
retains the long-term strategic objectives of contributing to the
competitiveness of agriculture, the sustainable management of natural resources
and climate action and the balanced territorial development of rural areas. In
line with the Europe 2020 strategy, these broad objectives of rural development
support for 2014-2020 are given more detailed expression through the following
six EU-wide priorities:

–
fostering knowledge transfer and innovation in
agriculture, forestry and rural areas;

–
enhancing competitiveness of all types of
agriculture and enhancing farm viability;

–
promoting food chain organization and risk
management in agriculture;

–
restoring, preserving and enhancing ecosystems
dependent on agriculture and forestry;

–
promoting resource efficiency and supporting the
shift towards a low-carbon and climate-resilient economy in the agriculture,
food and forestry sectors;

–
promoting social inclusion, poverty reduction
and economic development in rural areas.

These priorities should be the basis of
programming, including the definition of target indicators in relation to each
of them. The regulation includes rules on the preparation, approval and
revision of programmes that largely follow current rules, and opens up the
possibility for sub-programmes (e.g. young farmers, small farmers, mountain
areas, short supply chains) that benefit from higher aid intensities.

The list of individual measures has been
streamlined and individual measures have been reviewed, with a number of
adjustments introduced to address issues of scope, implementation and uptake
raised in the current period. With most measures potentially serving more than
one objective or priority, it is no longer deemed appropriate to group them
into axes; programming on the basis of priorities should ensure balanced
programmes. A specific measure for organic farming is created, and a new
delimitation for areas facing specific natural constraints is introduced.
Provision for supporting joint environmental action is improved.

The current cooperation measure is
significantly reinforced and extended to support a wide range of types of
cooperation (economic, environmental and social) between a wide range of
potential beneficiaries. It now explicitly covers pilot projects as well as
cooperation crossing regional and national borders. Leader and networking
approaches will continue to play a key role, in particular for the development
of rural areas and the spreading of innovation. Support through Leader will be
consistent and coordinated with the support for local development from other EU
shared management funds. A prize for local innovative co-operation projects
will support transnational initiatives in favour of innovation.

A risk management toolkit including support
to mutual funds and a new income stabilization tool offers new possibilities to
deal with the strong volatility in agricultural markets that is expected to
continue in the medium term.

The abolishment of the current axis system
will also streamline programming by the Member States.

Finally, it is proposed to build on the
Common Monitoring and Evaluation Framework (CMEF) introduced in the current
period which will be simplified and improved based on experience gained to
date. A common list of indicators will be linked to the policy priorities for
the purpose of monitoring and evaluation.

4.           BUDGETARY
IMPLICATION

The MFF proposal provides that a
significant part of the EU budget should continue to be dedicated to
agriculture, which is a common policy of strategic importance. Thus, in current
prices, it is proposed that the CAP should focus on its core activities with
EUR 317.2 billion allocated to Pillar I and EUR 101.2 billion to Pillar II over
the 2014-2020 period.

The Pillar I and Pillar II funding is
complemented by additional funding of EUR 17.1 billion consisting of EUR 5.1
billion for research and innovation, EUR 2.5 billion for food safety and EUR
2.8 billion for food support for the most deprived persons in other headings of
the MFF, as well as of EUR 3.9 billion in a new reserve for crises in the
agricultural sector and up to EUR 2.8 billion in the European Globalization Adjustment
Fund outside the MFF, thus bringing the total budget to EUR 435.6 billion over
the 2014-2020 period.

As regards distribution of support among
Member States, it is proposed that all Member States with direct payments below
90% of the EU average will see one third of this gap closed. The national
ceilings in the direct payments regulation are calculated on this basis.

The distribution of rural development
support is based on objective criteria linked to the policy objectives taking
into account the current distribution. As is the case today, less developed
regions should continue to benefit from higher co-financing rates, which will
also apply to certain measures such as knowledge transfer, producer groups,
cooperation and Leader.

Some flexibility for transfers between
pillars is introduced (up to 5% of direct payments): from Pillar I to Pillar II
to allow Member States to reinforce their rural development policy, and from
Pillar II to Pillar I for those Member States where the level of direct
payments remains below 90% of the EU average.

Details on the financial impact of the CAP
reform proposals are set out in the financial statement accompanying the
proposals.

2011/0282 (COD)

Proposal for a

REGULATION OF THE EUROPEAN PARLIAMENT
AND OF THE COUNCIL

on support for rural development by the
European Agricultural Fund for Rural Development (EAFRD)

THE EUROPEAN PARLIAMENT AND THE
COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty on the
Functioning of the European Union, and in particular Article 42 and 43 thereof,

Having regard to the proposal from the
European Commission[7],

After transmission of the draft legislative
act to the national Parliaments,

Having regard to the opinion of the
European Economic and Social Committee[8],

Having regard to the opinion of the
Committee of the Regions[9],

Having consulted the European Data
Protection Supervisor [10]

Acting in accordance with the ordinary
legislative procedure,

Whereas:

(1)
The Communication from the Commission to the
European Parliament, the Council, the European Economic and Social Committee
and the Committee of the Regions on "The CAP towards 2020: Meeting the
food, natural resources and territorial challenges of the future"[11] (hereinafter "the CAP
towards 2020 Communication") set out potential challenges, objectives and
orientations for the common agricultural policy (hereinafter "the
CAP") after 2013. In the light of the debate on that Communication, the
CAP should be reformed with effect from 1 January 2014. That reform should
cover all the main instruments of the CAP, including Council Regulation (EC) No
1698/2005 of 20 September 2005 on support for rural development by the European
Agricultural Fund for Rural Development (EAFRD)[12]. In view of the scope of the reform, it is appropriate to repeal
Regulation (EC) No 1698/2005 and to replace it with a new text.

(2)
A rural development policy should accompany and
complement direct payments and market measures of the CAP and thus contribute
to that policy's objectives as laid down in the Treaty on the Functioning of
the European Union (hereinafter "the Treaty"). A rural development policy
should also integrate the major policy objectives spelled out in the
Communication from the Commission of 3 March 2010 "Europe 2020 A strategy
for smart, sustainable and inclusive growth"[13] (hereinafter "Europe 2020
Strategy") and be coherent with the general objectives for the economic
and social cohesion policy set out in the Treaty.

(3)
Since the objective of this Regulation, namely
rural development, cannot be achieved sufficiently by Member States, given the
links between it and the other instruments of the CAP, the extent of
disparities between the various rural areas and the limits on the financial
resources of the Member States in an enlarged Union, and can therefore be
better achieved at Union level through the multi-annual guarantee of Union finance
and by concentrating on its priorities, the Union may adopt measures, in
accordance with the principle of subsidiarity as set out in Article 5(3) of the
Treaty on European Union. In accordance with the principle of proportionality
as set out in Article 5(4) of that Treaty, this Regulation does not go beyond
what is necessary in order to achieve that objective.

(4)
In order to supplement or amend certain
non-essential elements of this Regulation, the power to adopt delegated acts in accordance with Article 290 of the Treaty should
be delegated to the Commission. It is of particular importance that the
Commission carry out appropriate consultations during its preparatory work,
including at expert level. The Commission, when preparing and drawing up
delegated acts, should ensure a simultaneous, timely and appropriate
transmission of relevant documents to the European Parliament and to the
Council.

(5)
To ensure the sustainable development of rural
areas, it is necessary to focus on a limited number of core priorities relating
to knowledge transfer and innovation in agriculture, forestry and rural areas,
the competitiveness of all types of agriculture and farm viability, food chain
organisation and risk management in agriculture, restoring, preserving and
enhancing ecosystems dependant on agriculture and forestry, resource efficiency
and the shift towards a low carbon economy in the agricultural, food and
forestry sectors, and promoting social inclusion, poverty reduction and the economic
development of rural areas. In doing so account must be taken of the diversity
of situations that affect rural areas with different characteristics or
different categories of potential beneficiaries and the cross-cutting
objectives of innovation, environment and climate change mitigation and
adaptation. Mitigation action should relate to both limiting emissions in
agriculture and forestry from key activities such as livestock production,
fertilizer use and to preserving the carbon sinks and enhancing carbon
sequestration with regard to land use, land use change and the forestry sector.
The Union priority for rural development relating to knowledge transfer and
innovation in agriculture, forestry and rural areas should apply horizontally
in relation to the other Union priorities for rural development.

(6)
The Union's priorities for rural development
should be pursued in the framework of sustainable development and the Union's
promotion of the aim of protecting and improving the environment as set out in
Articles 11 and 19 of the Treaty, taking into account the polluter pays
principle. The Member States should provide information on the support for
climate change objectives in line with the ambition to devote at least 20% of
the Union budget to this end, using a methodology adopted by the Commission.

(7)
The activities of the European Agricultural Fund
for Rural Development (hereinafter "the EAFRD") and the operations to
which it contributes should be consistent and compatible with support from
other instruments of the CAP. In order to ensure optimal allocation and
efficient utilisation of Union resources the power to adopt acts in accordance with Article 290 of the Treaty should be
delegated to the Commission in respect of defining exceptions to the rule that
no support under this Regulation should be granted to operations
supported under common market organisations.

(8)
In order to ensure the immediate start and
efficient implementation of rural development programmes, support from the
EAFRD should be based on the existence of sound administrative framework
conditions. Member States should therefore assess compliance with certain ex
ante conditionalities. Each Member State should prepare either a national rural
development programme for its entire territory or a set of regional programmes.
Each programme should identify a strategy for meeting targets in relation to
the Union priorities for rural development and a selection of measures.
Programming should comply with Union priorities for rural development, while
being adapted to national contexts and complement the other Union policies, in
particular the agricultural market policy, cohesion policy and the common
fisheries policy. Member States which opt for a set of regional programme
should be able to also prepare a national framework, without a separate budgetary
allocation, in order to facilitate co-ordination among the regions in
addressing nation-wide challenges.

(9)
Member States should be able to include in their
rural development programmes thematic sub-programmes to address specific needs
in areas of particular importance to them. Thematic sub-programmes should
concern among others young farmers, small farms, mountain areas and the
creation of short supply chains. Thematic sub-programmes should also be used to
provide for the possibility to address restructuring of agricultural sectors
which have a strong impact on the development of rural areas. As a means to
increase the efficient intervention of such thematic sub-programmes Member
States should be allowed to provide for higher support rates for certain
operations covered by them.

(10)
Rural development programmes should identify the
needs of the area covered and describe a coherent strategy to meet them in the
light of the Union priorities for rural development. This strategy should be
based on the setting of targets. The links between the needs identified, the
targets set and the choice of measures selected to meet them should be
established. Rural development programmes should also contain all the
information required to assess their conformity with the requirements of this
Regulation.

(11)
Targets are to be established in rural
development programmes against a common set of target indicators for all Member
States. In order to facilitate this exercise the areas covered by these
indicators should be defined, in line with the Union priorities for rural
development. Given the horizontal application of the Union priority for rural
development relating to knowledge transfer in agriculture and forestry,
interventions under this priority are to be considered as instrumental to the
target indicators defined for the remaining Union priorities.

(12)
It is necessary to establish certain rules for
programming and revising rural development programmes. A lighter procedure
should be provided for revisions not affecting the strategy of the programmes
or the respective Union financial contributions.

(13)
In order to ensure legal certainty and clarity
concerning the procedure to be followed in the case of programme amendments,
the power to adopt acts in accordance with Article
290 of the Treaty should be delegated to the Commission in respect of the
setting of the criteria on the basis of which proposed changes of the
quantified targets of the programmes shall be considered as major, thus
triggering the need to modify the programme by means of an implementing act
adopted in accordance with Article 91 of this Regulation.

(14)
The evolution and specialisation of agriculture
and forestry and the particular challenges faced by micro-, small and
medium-sized enterprises (hereinafter "SMEs") in rural areas require
an appropriate level of technical and economic training as well as an increased
capacity to access and exchange knowledge and information including in the form
of diffusion of best agricultural and forestry production practices. Knowledge
transfer and information actions should take not only the form of traditional
training courses but be adapted to the needs of rural actors. Workshops,
coaching, demonstration activities, information actions but also short-term
farm exchange or visit schemes should therefore also be supported. Knowledge
and information acquired should enable farmers, forest holders, persons engaged
in the food sector and rural SMEs to enhance in particular their
competitiveness and resource efficiency and improve their environmental
performance while at the same time contributing to the sustainability of the
rural economy. In order to ensure that knowledge transfer and information
actions are effective in delivering these results it should be required that
the providers of knowledge transfer services have all the appropriate
capabilities.

(15)
In order to ensure that bodies providing
knowledge transfer services are able to provide services of a quality and
nature that is in line with the purposes of the rural development policy, to ensure
a better targeting of funds and to ensure that farm exchange schemes and farm
visits are clearly demarcated in relation to similar actions under other Union
schemes, the power to adopt acts in accordance with
Article 290 of the Treaty should be delegated to the Commission in respect of
minimum qualifications of bodies providing knowledge transfer, eligible costs
and the duration and content of farm exchange schemes and farm visits.

(16)
Farm advisory services help farmers, forest
holders and SMEs in rural areas to improve the sustainable management and
overall performance of their holding or business. Therefore both the setting up
of such services and the use of advice by farmers, forest holders and SMEs
should be encouraged. In order to enhance the quality and effectiveness of the
advice offered, provision should be made for the minimum qualifications and
regular training of advisors. Farm advisory services, as provided for in
Regulation of the European Parliament and of the Council (EU) No HR/2012 of [...][14] should help farmers assess the
performance of their agricultural holding and identify the necessary
improvements as regards the statutory management requirements, good
agricultural and environmental conditions, agricultural practices beneficial to
the climate and the environment set out in Regulation of the European
Parliament and of the Council (EU) No DP/2012 of [...][15], requirements or actions
related to climate change mitigation and adaptation, biodiversity, protection
of water, animal disease notification and innovation at least as laid down in
Annex I to Regulation (EU) No HR/2012. Where relevant, advice should also cover
occupational safety standards. Advice may also cover issues linked to the
economic, agricultural and environmental performance of the holding or
enterprise. Farm management and farm relief services should help farmers
improve and facilitate management of their holding.

(17)
In order to ensure that bodies and authorities
offering advisory services are able to provide advice of a quality and nature
that is in line with the purposes of rural development policy, the power to
adopt acts in accordance with Article 290 of the
Treaty should be delegated to the Commission in respect of the further
specification of the minimum qualifications of the authorities and bodies
providing advice.

(18)
Union or national quality schemes for
agricultural products and food provide consumers with assurances on the quality
and characteristics of the product or the production process used as a result
of the participation of farmers in such schemes, achieve added value for the
products concerned and enhance their market opportunities. Farmers should
therefore be encouraged to participate in these schemes. Given that it is at
the moment of entering such schemes and in the early years of their
participation that additional costs and obligations imposed on farmers as a
result of their participation are not fully remunerated by the market, support
should be limited to new participation and cover a period of no more than five
years. Given the special characteristics of cotton as a farm product, quality
schemes for cotton should also be covered. In order to ensure the efficient and
effective use of EAFRD budgetary resources, the power to adopt acts in accordance with Article 290 of the Treaty should be
delegated to the Commission in respect of the Union quality schemes that may be
covered by this measure.

(19)
In order to improve the economic and
environmental performance of agricultural holdings and rural enterprises,
improve the efficiency of the agricultural products marketing and processing
sector, provide infrastructure needed for the development of agriculture and
support non-remunerative investments necessary to achieve environmental aims,
support should be provided to physical investments contributing to these aims.
During the 2007-2013 programming period a variety of measures covered different
areas of intervention. In the interest of simplification but also of allowing
beneficiaries to design and realise integrated projects with increased added
value, a single measure should cover all types of physical investments. Member
States should define a threshold for agricultural holdings eligible for aid for
investments related to supporting farm viability based on the results of the strengths, weaknesses, opportunities and threats ("SWOT") analysis as means to better target the aid.

(20)
The agricultural sector is subject more than
other sectors to damage to its productive potential caused by natural
disasters. In order to help farm viability and competitiveness in the face of
such disasters support should be provided for helping farmers restore
agricultural potential damaged. Member States should also ensure that no
overcompensation of damages occurs as a result of the combination of Union (in particular
the risk management measure), national and private compensation schemes. In
order to ensure the efficient and effective use of EAFRD budgetary resources,
the power to adopt acts in accordance with Article
290 of the Treaty should be delegated to the Commission in respect of defining
the eligible costs under this measure.

(21)
The creation and development of new economic
activity in the form of new farms, new businesses or new investments in
non-agricultural activities is essential for the development and
competitiveness of rural areas. A farm and business development measure should
facilitate the initial establishment of young farmers and the structural
adjustment of their holdings after initial setting up, diversification of
farmers into non-agricultural activities and the setting up and development of
non-agricultural SMEs in rural areas. The development of small farms which are
potentially economically viable should also be encouraged. In order to ensure
the viability of new economic activities supported under this measure, support
should be made conditional on the submission of a business plan. Support for
business start up should cover only the initial period of the life of a
business and not become operating aid. Therefore, where Member States opt to
grant aid in instalments these should be for a period of no more than five
years. In addition in order to encourage the restructuring of the agricultural
sector, support in the form of annual payments should be provided for farmers
participating in the small farmers scheme established by Title V of Regulation
(EU) No DP/2012 who commit to transfer their entire holding and the
corresponding payment entitlements to another farmer who does not participate
in that scheme.

(22)
SMEs are the backbone of the Union rural
economy. Farm and non-agricultural business development should be aimed at
employment promotion and the setting up of quality jobs in rural areas,
maintenance of already existing jobs, reduction of seasonality fluctuations in
employment, development of non-agricultural sectors outside agriculture and
agricultural and food processing while fostering at the same time business
integration and local inter-sectoral links. Projects integrating at the same
time agriculture, rural tourism through promotion of sustainable and
responsible tourism in rural areas, natural and cultural heritage should be
encouraged as well as renewable energy investments.

(23)
In order to ensure the efficient and effective
use of EAFRD budgetary resources and to guarantee the protection of the rights
of beneficiaries and avoid discrimination among them, the power to adopt acts in accordance with Article 290 of the Treaty should be
delegated to the Commission in respect of laying down conditions under which
legal persons may be considered as young farmers, the setting of a grace period
for the acquisition of occupational skills, the minimum content of business
plans and the criteria to be used by Member States for the definition of small
farms and of upper and lower thresholds for determining the eligibility of an
operation under the support for young farmers or development of small farms
respectively.

(24)
The development of local infrastructure and
local basic services in rural areas, including leisure and culture, the renewal
of villages and activities aimed at the restoration and upgrading of the
cultural and natural heritage of villages and rural landscapes is an essential
element of any effort to realise the growth potential and promote the
sustainability of rural areas. Support should therefore be granted to
operations with this aim, including the access to Information and Communication
Technologies and the development of fast and ultra-fast broadband. In line with
these objectives, development of services and infrastructure leading to social
inclusion and reversing trends of social and economic decline and depopulation
of rural areas should be encouraged. In order to achieve the maximum
effectiveness for such support, covered operations should be implemented in
accordance with plans for the development of municipalities and their basic
services, where such plans exist, elaborated by one or more rural communes. In
order to ensure coherence with the Unions climate objectives the power to adopt
acts in accordance with Article 290 of the Treaty
should be delegated to the Commission in respect of defining the types
of renewable energy infrastructure that shall be eligible for support

(25)
Forestry is an integral part of rural
development and support for sustainable and climate friendly land use should
encompass forest area development and sustainable management of forests. During the 2007-2013 programming period a
variety of measures covered different types of support for forestry investments
and management. In the interest of simplification but also of allowing
beneficiaries to design and realise integrated projects with increased added
value, a single measure should cover all types of support for forestry
investments and management. This measure should cover
the extension and improvement of forest resources through afforestation of land
and creation of agro-forestry systems combining extensive agriculture with
forestry systems, restoration of forests damaged by fire or other natural
disasters and relevant prevention measures, investments in new forestry
technologies and in the processing and marketing of forest products aimed at
improving the economic and environmental performance of forest holders and non
remunerative investments which improve ecosystem and climate resilience and
environmental value of forest ecosystems. Support should avoid distorting
competition and be market neutral. As a result limitations should be imposed
relating to the size and legal status of beneficiaries. Preventive actions
against fires should be in areas classified by Member States as medium or high
fire risk. All preventive actions should be part of a forest protection plan.
The occurrence of a natural disaster in the case of action for the restoration
of damaged forest potential should be subject to the formal recognition by a
scientific public organisation. The forestry measure should be adopted in the
light of undertakings given by the Union and the Member States at international
level, and be based on Member States’ national or sub-national forest
plans or equivalent instruments which should take into
account the commitments made in the Ministerial Conferences on the Protection
of Forests in Europe. It should contribute to the
implementation of the Union Forestry Strategy[16].
In order to ensure that afforestation of agricultural land is in line with the
aims of environmental policy the power to adopt acts in accordance with Article 290 of the Treaty should be
delegated to the Commission in respect of the definition of certain minimum
environmental requirements.

(26)
In order to ensure the efficient and effective
use of EAFRD budgetary resources, the power to adopt acts in accordance with Article 290 of the Treaty should be
delegated to the Commission in respect of laying down conditions under which
Member States shall establish the occurrence of a natural disaster or a pest or
disease and the definition of types of preventive actions that shall be
eligible for EAFRD support.

(27)
Producer groups help farmers to face jointly the
challenges posed by increased competition and consolidation of downstream
markets in relation to the marketing of their products including in local
markets. The setting up of producer groups should therefore be encouraged. In
order to ensure the best use of limited financial resources only producer
groups that qualify as SMEs should benefit from support. In order to ensure
that the producer group becomes a viable entity, a business plan should be
submitted as a condition for the recognition of a producer group by Member
States. To avoid providing operating aid and maintain the incentive role of
support, its maximum duration should be limited to five years.

(28)
Agri-environment-climate payments should
continue to play a prominent role in supporting the sustainable development of
rural areas and in responding to society's increasing demands for environmental
services. They should further encourage farmers and other land managers to
serve society as a whole by introducing or continuing to apply agricultural
practices contributing to climate change mitigation and adaptation and
compatible with the protection and improvement of the environment, the
landscape and its features, natural resources, the soil and genetic diversity.
In this context the conservation of genetic resources in agriculture and the
additional needs of farming systems that are of high nature value should be
given specific attention. Payments should contribute to covering additional
costs and income foregone resulting from the commitments undertaken and should
only cover commitments going beyond relevant mandatory standards and
requirements, in accordance with the "polluter pays" principle. In
many situations the synergies resulting from commitments undertaken jointly by
a group of farmers multiply the environmental and climate benefit. However,
joint action brings additional transaction costs which should be compensated
adequately. In order to ensure that farmers and other land managers are in a
position to correctly implement the commitments they have undertaken, Member
States should endeavour to provide them with the required skills and knowledge.
Member States should maintain the level of efforts made during the 2007-2013
programming period and have to spend a minimum of 25% of the total contribution
from the EAFRD to each rural development programme for climate change
mitigation and adaptation and land management, through the
agri-environment-climate, organic farming and payments to areas facing natural
or other specific constraints measures.

(29)
In order to ensure that agri-environment-climate
commitments are defined in line with the Union's overall environmental
objectives, the power to adopt acts in accordance
with Article 290 of the Treaty should be delegated to the Commission in respect
of laying down the conditions applicable to the annual extension of commitments
after the initial period, commitments to extensify or manage differently
livestock farming, to limit fertilisers, plant protection products or other
inputs, to rear local breeds in danger of being lost to farming or to preserve plant genetic resources and the eligible
operations in relation to conservation of genetic resources in agriculture.

(30)
Payments for the conversion to or maintenance of
organic farming should encourage farmers to participate in such schemes thus
answering society's increasing demand for the use of environmentally friendly
farm practices and for high standards of animal welfare. In order to increase
synergy in biodiversity benefits delivered by the measure, collective contracts
or collaboration between farmers should be encouraged to cover larger adjacent
areas. In order to avoid large-scale reversion of farmers to conventional
farming, both conversion and maintenance measures should be supported. Payments
should contribute to covering additional costs incurred and income foregone as
a result of the commitment and should cover only commitments going beyond
relevant mandatory standards and requirements.

(31)
Support should continue to be granted to farmers
and forest holders to help address specific disadvantages in the areas
concerned resulting from the implementation of Directive 2009/147/EC of the
European Parliament and of the Council of 30 November 2009 on the conservation
of wild birds[17]
and Council Directive 92/43/EEC of 21 May 1992 on the conservation of natural
habitats and of wild fauna and flora[18]
in order to contribute to the effective management of Natura 2000 sites while
support should also be made available to farmers to help address disadvantages
in river basin areas resulting from the implementation of Directive 2000/60/EC
of the European Parliament and of the Council of 23 October 2000 establishing a
framework for the Community action in the field of the water policy[19]. Support should be linked to
specific requirements described in the rural development programme that go beyond
relevant mandatory standards and requirements. Furthermore, the specific needs
of Natura 2000 areas should be taken into account by Member States in the
overall design of their rural development programmes.

(32)
Payments to farmers in mountain areas or in other
areas facing natural or other specific constraints should contribute, by
encouraging continued use of agricultural land to maintaining the countryside
as well as to maintaining and promoting sustainable farming systems. In order
to ensure the efficiency of such support payments should compensate farmers for
income foregone and additional costs linked to the disadvantage of the area
concerned.

(33)
In order to ensure efficient use of Union funds
and equal treatment for farmers across the Union mountain areas and areas
facing natural or other specific constraints should be defined in accordance
with objective criteria. In the case of areas facing natural constraints these
should be bio-physical criteria underpinned by robust scientific evidence.
Transitional arrangements should be adopted in order to facilitate the phasing
out of payments in areas that will no longer be considered as areas facing
natural constraints as a result of the application of these criteria.

(34)
Farmers should continue to be encouraged to adopt
high standards of animal welfare by providing for support for farmers that
undertake to adopt standards of animal husbandry, which go beyond the relevant
mandatory standards. In order to ensure that animal welfare commitments are in
line with the overall Union policy in this field, the power to adopt acts in accordance with Article 290 of the Treaty should be
delegated to the Commission in respect of the definition of the areas in which
such commitments should provide upgraded standards of production methods.

(35)
Payments should continue to be granted to forest
holders who provide environmental or climate friendly forest conservation
services by undertaking commitments to enhance biodiversity, preserve
high-value forest ecosystems, improve their mitigation and adaptation
potential, and reinforce the protective value of forests with respect to soil
erosion, to maintenance of water resources and to natural hazards. In this
context the conservation and promotion of forest genetic resources should be
given specific attention. Payments shall be granted for forest environmental
commitments going beyond relevant mandatory standards established by national
legislation. In order to ensure the efficient and effective use of EAFRD
budgetary resources, the power to adopt acts in
accordance with Article 290 of the Treaty should be delegated to the Commission
in respect of the types of operations eligible for support under this measure.

(36)
During the 2007-2013 programming period only one
type of co-operation was explicitly supported under rural development policy:
co-operation for the development of new products, processes and technologies in
the agriculture and food sector and the forestry sector. Support for this type
of co-operation is still necessary but should be adapted in order better to
meet the requirements of the knowledge economy. In this context the possibility
should be provided for projects by a single operator to be financed under this
measure, on condition that the results obtained are disseminated, thus achieving
the purpose of diffusion of new practices, processes or products. In addition,
it has become clear that supporting a much broader range of types of
co-operation, with a wider range of beneficiaries, from small operators to larger ones, can
contribute to achieving the objectives of rural development policy by helping
operators in rural areas to overcome the economic, environmental and other
disadvantages of fragmentation. Therefore, the measure should be widened.
Support for small operators to organise joint work processes and share
facilities and resources should help them to be economically viable despite
their small scale. Support for horizontal and vertical co-operation among
actors in the supply chain, as well as for promotion activities in a local context,
should catalyse the economically rational development of short supply chains,
local markets and local food chains. Support for collective approaches to
environmental projects and practices should help to provide greater and more
consistent environmental and climate benefits than can be delivered by
individual operators acting without reference to others (for example, through
practices applied on larger unbroken areas of land). Support in these various
areas should be provided in various forms. Clusters and networks are
particularly relevant to the sharing of expertise as well as the development of
new and specialised expertise, services and products. Pilot projects are
important tools for testing the commercial applicability of technologies, techniques
and practices in different contexts, and adapting them where necessary.
Operational groups are a pivotal element of the European Innovation Partnership
(hereinafter "EIP") for agricultural productivity and sustainability.
Another important tool lies in local development strategies operating outside
the framework of LEADER local development – between public and private actors
from rural and urban areas. Unlike within the LEADER approach, such
partnerships and strategies could be limited to one sector and / or to
relatively specific development aims, including those mentioned above. Inter-branch
organisation should also be eligible for support under this measure. It should
be limited to seven years except for collective environmental and climate action
in duly justified cases.

(37)
Farmers are exposed today to increasing economic
and environmental risks as a consequence of climate change and increased price
volatility. In this context, effective management of risks has an increased
importance for farmers. For this reason a risk management measure should be set
up to assist farmers in addressing the most common risks faced by them. This
measure should therefore support farmers to cover the premiums they pay for
crop, animal and plant insurance as well as the setting up of mutual funds and
the compensation paid by such funds to farmers for losses suffered as a result
of the outbreak of animal or plant diseases or environmental incidents. It
should also cover an income stabilisation tool in the form of a mutual fund to
support farmers facing a severe drop in their income. In order to ensure that
there is equal treatment among farmers across the Union, that competition is
not distorted and that the international obligations of the Union are
respected, specific conditions should be provided for the granting of support
under these measures. In order to ensure the efficient use of EAFRD budgetary
resources the power to adopt acts in accordance with
Article 290 of the Treaty should be delegated to the Commission in respect of
defining the minimum and maximum duration of commercial loans to mutual funds.

(38)
The LEADER approach for local development has,
over a number of years, proven its utility in promoting the development of
rural areas by fully taking into account the multi-sectoral needs for
endogenous rural development through its bottom-up approach. LEADER should
therefore be continued in the future and its application should remain
compulsory for all rural development programmes.

(39)
In order to ensure that local development strategies
are applied at a territorial level that allows them to deliver results that
effectively contribute to the Union priorities for rural development and
innovation, the power to adopt acts in accordance
with Article 290 of the Treaty should be delegated to the Commission in respect
of setting population criteria for the area to be covered by each such strategy
and the detailed scope of preparatory and animation costs to be supported.

(40)
Support to LEADER local development from the
EAFRD should cover all aspects of the preparation and implementation of local
development strategies and operation of local action groups as well as
cooperation among territories and groups which carry out bottom-up and
community-led local development. In order to enable partners in rural areas not
yet applying LEADER to test and prepare for the design and operation of a local
development strategy a "LEADER start-up kit' should also be financed. In
order to ensure the efficient and effective use of EAFRD budgetary resources
the power to adopt acts in accordance with Article
290 of the Treaty should be delegated to the Commission in respect of the
detailed definition of eligible animation costs for local action groups.

(41)
Investments are common to many of the rural
development measures under this Regulation and may relate to operations of very
diverse nature. In order to ensure clarity in the implementation of these
operations certain common rules for all investments should be laid down. These
common rules should define the types of expenditure that may be considered as
investment expenditure and ensure that only such investments that create new
value in agriculture receive support. In order to take account of specificities
relating to particular types of investments such as the purchase of second hand
equipment and simple replacement investments while ensuring the efficient use
of EAFRD funds, the power to adopt acts in accordance
with Article 290 of the Treaty should be delegated to the Commission in respect
of setting the conditions under which certain types of investments may
be considered as eligible expenditure. In order to facilitate realisation of
investment projects it should be possible for Member States to pay advances. To
ensure the effectiveness, fairness and sustainable impact of EAFRD assistance,
rules should be laid down to ensure that investments related to operations are
durable and that EAFRD support is not used to distort competition.

(42)
Certain area related measures under this
Regulation involve the undertaking on the part of beneficiaries of commitments
extending over at least five years. During this period changes may occur to the
situation of either the holding or of the beneficiary. Rules should therefore
be laid down in order to determine the course to be followed in these cases. In
order to ensure the efficient implementation of area related measures and
secure the financial interests of the Union the power to adopt acts in accordance with Article 290 of the Treaty should be
delegated to the Commission in respect of setting the conditions applicable in
case of partial transfer of a holding, defining other situations in which
reimbursement of the aid shall not be required.

(43)
Certain measures under this Regulation provide
as a condition for granting support that beneficiaries undertake commitments
going beyond a relevant baseline defined in terms of mandatory standards or
requirements. In view of possible changes in legislation during the period of
the commitments that have as a result the modification of the baseline, provision
should be made for the revision of the contracts concerned in order to ensure
continued respect of this condition.

(44)
In order to ensure that financial resources for
rural development are used in the best possible way and to target measures
under rural development programmes in accordance with the Union priorities for
rural development but also to guarantee equal treatment of applicants, Member
States should establish selection criteria for the selection of projects.
Exception to this rule should be made only for those measures for which support
consists in payments for the provision of agri-environmental or animal welfare services.
In the application of selection criteria account should be taken of the
principle of proportionality in what concerns small grants.

(45)
The EAFRD should support through technical
assistance actions relating to the implementation of rural development
programmes, including costs related to the protection of symbols and
abbreviations relating to Union quality schemes for participation in which
support may be granted under this Regulation and costs of the Member States for
the delimitation of areas facing natural constraints. In order to ensure the
efficient use of EAFRD budgetary resources, the power to adopt acts in accordance with Article 290 of the Treaty should be
delegated to the Commission in respect of the control activities that may be
financed under technical assistance.

(46)
The networking of national networks,
organisations and administrations involved in the various stages of programme
implementation, organised in the context of the European network for rural development,
has proven that it can play a very important role in improving the quality of
rural development programmes by increasing the involvement of stakeholders in
the governance of rural development as well as in informing the broader public
of its benefits. It should therefore be financed as part of the technical
assistance at Union level.

(47)
In order to contribute to the achievement of the
aims of the EIP for agricultural productivity and sustainability a EIP network
should be set up in order to network operational groups, advisory services and
researchers involved in the implementation of actions targeting innovation in
agriculture. It should be financed as part of technical assistance at Union
level.

(48)
During the 2007 -2013 programming period an evaluation
expert network operated in the context of the European network for rural development.
To take account of the specific needs of evaluation, a European evaluation network
for rural development should be set up for the 2014-2020 programming period in
order to bring together all actors involved in evaluation activities to
facilitate the exchange of expertise in the field. It should be financed as
part of technical assistance.

(49)
Member States should reserve a portion of the
total amount of each rural development programme devoted to technical
assistance to finance the setting up and operation of a national rural network
bringing together organisations and administrations involved in rural
development, including the partnership, with the aim of increasing their
involvement in the implementation of the programme and improve the quality of
rural development programmes. National rural networks should prepare and
implement an action plan.

(50)
The EAFRD should signal the Union's recognition
of how local development approaches and a trans-national dimension can
reinforce each other, especially when an innovative spirit is applied. It
should do this by awarding prizes to a limited number of projects which
exemplify these characteristics. The prizes should complement other sources of
funding available through rural development policy by conferring recognition on
any leading suitable project, whether or not that project was also financed
through a rural development programme.

(51)
Rural development programmes should provide for
innovative actions promoting a resource-efficient, productive and low-emission
agricultural sector, with the support of the EIP foragricultural productivity
and sustainability. The EIP should aim to promote a faster and wider
transposition of innovative solutions into practice. The EIP should create
added value by enhancing the uptake and effectiveness of innovation-related
instruments and enhancing synergies between them. The EIP should fill gaps by
better linking research and practical farming.

(52)
Implementation of innovative projects in the
context of the EIP for agricultural productivity and sustainability should be
undertaken by operational groups bringing together farmers, researchers,
advisors, businesses and other actors concerned by innovation in the
agricultural sector. In order to ensure that results of such projects profit to
the sector as a whole, their results should be disseminated.

(53)
Provision should be made for the determination
of the total amount of Union support for rural development under this
Regulation for the period from 1 January 2014 to 31 December 2020, its annual
breakdown and the minimum amount to be concentrated in less developed regions
in accordance with the Multi-annual Financial Framework for the period 2014 to
2020 and the Interinstitutional Agreement on budgetary discipline and
improvement of the budgetary procedure[20]
for the same period. The appropriations available should be indexed on a
flat-rate basis for programming.

(54)
In order to facilitate the management of EAFRD
funds, a single contribution rate of the EAFRD to rural development programming
should be set in relation to public expenditure in the Member States. In order
to take account of the particular importance or nature of certain types of
operations, specific contribution rates should be set in relation to them. In
order to mitigate the specific constraints resulting from level of development,
remoteness and insularity an appropriate contribution rate of the EAFRD should
be set for less-developed regions, outermost regions referred to in the Treaty
and the smaller Aegean islands.

(55)
Funds released in Members States as a result of
the application of the upper ceiling to directs payments received by large
individual farms under the first pillar of the CAP should be reserved for
financing, in each Member State of projects related to innovation in order to
help farms, including large farms, to increase their competitiveness in
the framework of the objectives of the CAP. These projects should be initiated
by farmers, whatever the size of their farms, EIP operational groups or local
action groups, groups of partners involved in the agricultural sector.

(56)
Member States should take all the necessary
steps and put in place adequate provisions to ensure that their rural
development measures are verifiable and controllable. To this end the Managing
Authority and Paying Agency should provide an ex ante assessment and undertake
to assess measures throughout the implementation of the programme. Measures not
respecting this condition should be adjusted.

(57)
The Commission and Member States should take all
required steps to ensure sound management of rural development programmes. In
this context the Commission should undertake adequate controls and the Member
States should take measures to guarantee sound functioning of their management
system.

(58)
A single Managing Authority should be
responsible for the management and implementation of each rural development
programme. Its duties should be specified in this Regulation. The Managing
Authority should be able to delegate part of its duties while retaining the
responsibility for the efficiency and correctness of management. In case a
rural development programme contained thematic sub-programmes the Managing
Authority should be able to designate another body to carry out fully
management and implementation of that sub-programme in relation to the
financial allocations that have been identified for it in the programme while
ensuring sound financial management of these sub-programmes.

(59)
Each rural development programme should be
subject to monitoring in order to regularly follow the implementation of the
programme and progress towards the established targets of the programme. Demonstrating
and improving the effectiveness and impact of actions under the EAFRD also
depends on appropriate evaluation during the preparation and implementation of
a programme and its completion. A monitoring and evaluation system should
therefore be set up in common by the Commission and the Member States with the
purpose of demonstrating the progress and assessing the impact and efficiency
of rural development policy implementation.

(60)
In order to ensure that information can be
aggregated at Union level a set of common indicators should form part of the
system. Key information on the implementation of rural development programmes
should be recorded and maintained electronically as a means to facilitate data
aggregation. Beneficiaries should therefore be required to provide the minimum
necessary information that is needed for monitoring and evaluation.

(61)
Responsibility for monitoring of the programme
should be shared between the Managing Authority and a Monitoring Committee set
up for this purpose. The Monitoring Committee should have as its task to
monitor the effectiveness of implementation of the programme. To this end its
responsibilities should be specified.

(62)
Monitoring of the programme should involve the
drawing up of an annual implementation report, to be sent to the Commission.

(63)
Each rural development programme should be
subject to evaluation in order to improve its quality and demonstrate its
achievements.

(64)
Articles 107, 108 and 109 of the Treaty should apply
to the support for the rural development measures under this Regulation.
Nevertheless, it should be established that, given the specificity of the
agricultural sector, the rural development measures concerning operations
falling within the scope of Article 42 of the Treaty, that are carried out
under and in conformity with this Regulation, as well as payments made by the
Member States, intended to provide additional national financing for rural
development operations for which Union support is granted and which fall within
the scope of Article 42 of the Treaty should be excluded from the application
of Articles 107, 108 and 109 of the Treaty.

(65)
Moreover, in view of ensuring consistency with
the rural development measures eligible for Union support and in order to
simplify procedures, payments made by the Member States, intended to provide
additional national financing for rural development operations for which Union
support is granted and which fall within the scope of Article 42 of the Treaty,
should be authorised as a part of programming under a notification procedure in
accordance with the provisions of this Regulation. In order to ensure their
appropriate monitoring, when assessing these payments the Commission should
apply the criteria established for the application of Article 107 of the Treaty
by way of analogy. In order to ensure that additional national financing which
is not authorised by the Commission is not implemented, the Member State
concerned should not put its proposed additional financing for rural
development into effect until it has been approved. Payments made by Member
States intended to provide additional national financing for rural development
operations for which Union support is granted and which fall outside the scope
of Article 42 of the Treaty should be notified to the Commission pursuant to
Article 108(3) of the Treaty, unless they fall under a regulation, adopted
pursuant to Council Regulation 994/98[21],
and may not be put into effect until this procedure has resulted in a final approval
by the Commission.

(66)
An electronic information system should be
established to provide an efficient and secure exchange of data.

(67)
Union legislation concerning the protection of
individuals with regard to the processing of personal data and on the free
movement of such data, in particular Directive 95/46/EC of the European
Parliament and of the Council of 24 October 1995 on the protection of
individuals with regard to the processing of personal data and on the free
movement of such data and Regulation (EC) No 45/2001 of the European Parliament
and of the Council of 18 December 2000 on the protection of individuals with
regard to the processing of personal data by the Community institutions and
bodies and on the free movement of such data are applicable.

(68)
In order to ensure uniform conditions for the
implementation of this Regulation in relation to the presentation of rural
development programmes, the approval of programmes and of modifications
thereof, the procedures and timetables for approval of programmes, the
procedures and timetables for the approval programme modifications, including
their entry in to force and frequency of submission, specific conditions for
the implementation of rural development measures, the structure and operation
of networks set-up by this Regulation, the adoption of the monitoring and
evaluation system, the rules for the operation of the information system,
implementing powers should be conferred on the Commission. Those powers should
be exercised in
accordance with Regulation (EU) No 182/2011 of the European Parliament and the
Council of 16 February 2011 laying down the rules and general principles
concerning mechanisms for control by the Member States of the Commission's
exercise of implementing powers[22].

(69)
The new support scheme provided for by this
Regulation replaces the support scheme set up by Regulation (EC) No 1698/2005.
Therefore, Regulation (EC) No 1698/2005 should be repealed from 1 January 2014.

(70)
In order to facilitate a smooth transition from
the system established by Regulation (EC) No 1698/2005 to the system
established by this Regulation, the power to adopt acts in accordance with
Article 290 of the Treaty should be delegated to the Commission in respect of
establishing transitional provisions,

HAVE ADOPTED THIS REGULATION:

TABLE OF CONTENTS

REGULATION OF THE EUROPEAN PARLIAMENT AND OF
THE COUNCIL on support for rural development by the European Agricultural Fund
for Rural Development (EAFRD)................................................ 10

TITLE I Objectives and Strategy................................................................................................... 4

Chapter I Scope and Definitions.................................................................................................... 4

Chapter II Mission, objectives, priorities
and consistency............................................................... 4

TITLE II Programming.................................................................................................................. 4

Chapter I  Programming content.................................................................................................... 4

Chapter II Preparation, approval and
modification of rural development programmes..................... 4

TITLE III Rural development support............................................................................................ 4

Chapter I Measures...................................................................................................................... 4

Section 1 Individual Measures....................................................................................................... 4

Section 2 Leader.......................................................................................................................... 4

Chapter II Common provisions for several
measures...................................................................... 4

Chapter III Technical assistance and
networking............................................................................ 4

Chapter IV Prize for innovative, local
cooperation in rural areas..................................................... 4

TITLE IV  EIP for agricultural productivity
and sustainability.......................................................... 4

TITLE V Financial provisions........................................................................................................ 4

TITLE VI Management, control and publicity................................................................................ 4

TITLE VII Monitoring and evaluation............................................................................................ 4

Chapter I General provisions......................................................................................................... 4

Section 1 Establishment and Objectives of a
monitoring and evaluation system................................ 4

Section 2 Technical provisions....................................................................................................... 4

Chapter II Monitoring................................................................................................................... 4

Chapter III Evaluation................................................................................................................... 4

TITLE VIII Competition provisions............................................................................................... 4

TITLE IX Commission powers, common provisions
and transitional and final provisions................. 4

Chapter I Commission powers...................................................................................................... 4

Chapter II Common provisions..................................................................................................... 4

Chapter III Transitional and final provisions................................................................................... 4

ANNEX I  Amounts and support rates.......................................................................................... 4

ANNEX II  Biophysical criteria for the
delimitation of areas facing natural constraints..................... 4

ANNEX III  Indicative list of measures and
operations of particular relevance to thematic sub-programmes referred to in
Article 8....................................................................................................................................... 4

ANNEX IV  Ex ante conditionalities for rural
development............................................................ 4

ANNEX V  Indicative list of measures with
relevance to one or more Union priorities for rural development       4

TITLE I
Objectives and Strategy

Chapter I
Scope and Definitions

Article 1

Scope

1.
This Regulation:

(a)
lays down the general rules governing Union
support for rural development, financed by the European Agricultural Fund for
Rural Development (hereinafter "the EAFRD"), established by
Regulation (EU) No HR/2012;

(b)
defines the objectives to which rural
development policy is to contribute and the relevant Union priorities for rural
development;

(c)
outlines the strategic context for rural
development policy;

(d)
defines the measures of rural development
policy;

(e)
lays down rules on programming, networking,
management, monitoring and evaluation on the basis of responsibilities shared
between the Member States and the Commission.

(f)
lays down the rules to ensure co-ordination of
the EAFRD with other Union instruments.

2.
This Regulation complements the provisions of
Part Two of Regulation (EU) No [CSF/2012].

Article 2

Definitions

1.
For the purposes of this Regulation, the
following definitions shall apply:

(a)
"programming": the process of
organisation, decision taking and allocating the financial resources in several
stages intended to implement, on a multi-annual basis, the joint action by the
Union and the Member States to achieve the Union priorities for rural
development;

(b)
"region": territorial unit
corresponding to level 1 or 2 of the Nomenclature of territorial units for
statistics (NUTS level 1 and 2) within the meaning of Regulation (EC) No
1059/2003 of the European Parliament and of the Council[23];

(c)
"measure": a set of operations
contributing to one or more of the Union priorities for rural development;

(d)
"operation": a project, group of
projects, contract, or arrangement or other action selected according to
criteria for the rural development programme concerned and implemented by one
or more beneficiaries allowing achievement of one or more of the Union
priorities for rural development;

(e)
"beneficiary": a natural or legal
person or other body, whether public or private, responsible for implementing
operations or receiving support;

(f)
"monitoring and evaluation system": a
general approach developed by the Commission and the Member States defining a
limited number of common indicators relating to the baseline situation and the
financial execution, outputs, results, and impacts of the programmes;

(g)
"local development strategy": a
coherent set of operations to meet local objectives and needs, which
contributes to meeting the Union priorities for rural development, implemented
in partnership at the appropriate level;

(h)
"support rate": the rate of the total
public contribution to an operation;

(i)
"public expenditure": any public
contribution to the financing of operations whose origin is the budget of the
State, of regional and local authorities, of the Union and any similar
expenditure. Any contribution to the financing of operations whose origin is
the budget of public law bodies or associations of one or more regional or
local authorities or public law bodies, within the meaning of Directive
2004/18/EC[24],
shall be regarded as public contribution;

(j)
"less developed regions": regions
whose gross domestic product (GDP) per capita is less than 75% of the average
GDP of the EU-27;

(k)
“micro-, small and medium-sized enterprises”
(hereinafter "SMEs") : micro-, small and medium-sized enterprises as
defined in Commission Recommendation 2003/361/EC[25];

(l)
“transaction cost”: a cost linked to a
commitment but not directly attributable to its implementation;

(m)
utilised agricultural area (hereinafter “UAA”):
utilised agricultural area within the meaning of Commission Decision
2000/115/EC of 24 November 1999[26];

(n)
“economic losses”: any additional cost incurred
by a farmer as a result of exceptional measures taken by the farmer with the
objective of reducing supply on the market concerned or any substantial loss of
production;

(o)
“adverse climatic event”: weather conditions,
such as frost, storms and hail, ice, heavy rain or severe drought, which can be
assimilated to a natural disaster;

(p)
“animal diseases”: diseases mentioned in the
list of animal diseases established by the World Organisation for Animal Health
or in the Annex to Council Decision 90/424/EEC[27];

(q)
“environmental incident”: a specific occurrence
of pollution, contamination or degradation in the quality of the environment
related to a specific event and of limited geographical scope. It does not
cover general environmental risks not connected with a specific event, such as
climate change or atmospheric pollution;

(r)
"natural disaster":
a naturally occurring event of biotic or abiotic nature
that leads to important disturbances of agricultural production systems and
forest structures, eventually causing important economic damage to the farming
and forest sectors;

(s)
"catastrophic event": an unforeseen
event of biotic or abiotic nature caused by human action that leads to
important disturbances of agricultural production systems and forest
structures, eventually causing important economic damage to the farming and
forest sectors;

(t)
"short supply chain": a supply chain involving a limited number of economic operators, committed to
co-operation, local economic development, and close geographical and social
relations between producers and consumers;

(u)
"young farmer": farmer who is less than 40 years of age at
the moment of submitting the application, possesses adequate occupational
skills and competence and is setting up for the first time in an agricultural
holding as head of the holding;

(v)
"completed operation" means an
operation that has been physically completed or fully implemented and in
respect of which all related payments have been made by beneficiaries and the
corresponding public contribution has been paid to the beneficiaries;

(w)
"thematic objectives": the thematic
objectives defined in Article 9 of Regulation (EU) No [CSF/2012] of the
European Parliament and the Council[28].

(x)
"Common Strategic Framework (hereinafter
"CSF")": the Common Strategic Framework referred to in Article 10
of Regulation (EU) No [CSF/2010].

2.
As regards the definition of young farmer laid
down in paragraph 1(u), the Commission shall be empowered to adopt delegated
acts in accordance with Article 90 concerning the conditions under which a
legal person may be considered a 'young farmer', including the setting of a
grace period for the acquisition of occupational skills.

Chapter II
Mission, objectives, priorities and consistency

Article 3

Mission

The EAFRD shall contribute to the Europe
2020 Strategy by promoting sustainable rural development throughout the Union
in a complementary manner to the other instruments of the common agricultural
policy (hereinafter “CAP”), to cohesion policy and to the common fisheries
policy. It shall contribute to a more territorially and environmentally
balanced, climate-friendly and resilient and innovative Union agricultural
sector.

Article 4

Objectives

Within the overall framework of the CAP,
support for rural development shall contribute to achieving the following
objectives:

(1)
the competitiveness of agriculture;

(2)
the sustainable management of natural resources,
and climate action;

(3)
a balanced territorial development of rural
areas.

Article 5

Union priorities for rural development

The achievement of the objectives of rural
development, which contribute to the Europe 2020 strategy for smart,
sustainable and inclusive growth, shall be pursued through the following six
Union priorities for rural development, which translate the relevant Thematic
Objectives of the CSF:

(1)
fostering knowledge transfer and innovation in
agriculture, forestry, and rural areas with a focus on the following areas:

(a)
fostering innovation and the knowledge base in
rural areas;

(b)
strengthening the links between agriculture and
forestry and research and innovation;

(c)
fostering lifelong learning and vocational
training in the agricultural and forestry sectors.

(2)
enhancing competitiveness of all types of
agriculture and enhancing farm viability, with a focus on the following areas:

(a)
facilitating restructuring of farms facing major
structural problems, notably farms with a low degree of market participation,
market-oriented farms in particular sectors and farms in need of agricultural
diversification;

(b)
facilitating generational renewal in the
agricultural sector.

(3)
promoting food chain organisation and risk
management in agriculture, with a focus on the following areas:

(a)
better integrating primary producers into the
food chain through quality schemes, promotion in local markets and short supply
circuits, producer groups and inter-branch organisations;

(b)
supporting farm risk management:

(4)
restoring, preserving and enhancing ecosystems
dependent on agriculture and forestry, with a focus on the following areas:

(a)
restoring and preserving biodiversity, including
in Natura 2000 areas and high nature value farming, and the state of European
landscapes;

(b)
improving water management;

(c)
improving soil management.

(5)
promoting resource efficiency and supporting the
shift towards a low carbon and climate resilient economy in agriculture, food
and forestry sectors, with a focus on the following areas:

(a)
increasing efficiency in water use by
agriculture;

(b)
increasing efficiency in energy use in
agriculture and food processing;

(c)
facilitating the supply and use of renewable
sources of energy, of by-products, wastes, residues and other non food raw
material for purposes of the bio-economy;

(d)
reducing nitrous oxide and methane emissions
from agriculture;

(e)
fostering carbon sequestration in agriculture
and forestry;

(6)
promoting social inclusion poverty reduction and
economic development in rural areas, with a focus on the following areas:

(a)
facilitating diversification, creation of new
small enterprises and job creation;

(b)
fostering local development in rural areas;

(c)
enhancing accessibility to, use and quality of
information and communication technologies (ICT) in rural areas.

All of the priorities shall contribute to
the cross-cutting objectives of innovation, environment and climate change
mitigation and adaptation.

Article 6

Consistency

1.
There shall be consistency between support from
the EAFRD and the measures financed by the European Agricultural Guarantee
Fund.

2.
No support under this Regulation shall be
granted to operations supported under common market organizations. The
Commission shall be empowered to adopt delegated acts, in accordance with Article
90 to define exceptions from this rule.

TITLE II
Programming

Chapter I
 Programming content

Article 7

Rural development programmes

1.
The EAFRD shall act in the Member States through
rural development programmes. These programmes shall implement a strategy to
meet the Union priorities for rural development through a set of measures
defined in Title III, for the achievement of which aid from the EAFRD will be
sought.

2.
A Member State may submit either a single
programme for its entire territory or a set of regional programmes.

3.
Member States with regional programmes may also
submit for approval a national framework containing common elements for these
programmes without a separate budgetary allocation.

Article 8

Thematic sub-programmes

1.
Member States may include within their rural
development programmes thematic sub-programmes, contributing to the Union
priorities for rural development, aimed to address specific needs identified,
in particular in relation to:

(a)
young farmers;

(b)
small farms as referred to in the third
subparagraph of Article 20(2);

(c)
mountain areas as referred to in Article 33(2);

(d)
short supply chains.

An indicative list of measures and types of
operations of particular relevance to each thematic sub-programme is set out in
Annex III.

2.
Thematic sub-programmes may also address
specific needs relating to the restructuring of agricultural sectors with a significant
impact on the development of a specific rural area.

3.
The support rates laid down in Annex I may be
increased by 10 percentage points for operations supported in the framework of
thematic sub-programmes concerning small farms and short supply chains. In the
case of young farmers and mountain areas, the maximum support rates may be
increased in accordance with Annex I. However, the maximum combined support
rate shall not exceed 90%.

Article 9

Content of rural development programmes

1.
In addition to the elements referred to in
Article 24 of Regulation (EU) No [CSF/2012], each rural development programme
shall include:

(a)
the ex ante evaluation referred to in
Article 48 of Regulation (EU) No [CSF/2012];

(b)
an analysis of the situation in terms of
strengths, weaknesses, opportunities and threats (hereinafter "SWOT")
and identification of the needs that have to be addressed in the geographical
area covered by the programme and, where relevant, by the thematic
sub-programmes referred to in Article 8.

The analysis shall be structured around the
Union priorities for rural development. Specific needs concerning the environment,
climate change mitigation and adaptation and innovation shall be assessed
across Union priorities for rural development, in view of identifying relevant
responses in these two areas at the level of each priority;

(c)
a description of the strategy which includes the
target setting for each of the focus areas of the Union priorities for rural
development included in the programme, on the basis of common indicators referred
to in Article 76, to be defined as part of the monitoring and evaluation system
referred to in Article 74, and a selection of measures, based on a sound
intervention logic of the programme, including an assessment of the expected
contribution of the measures chosen to achieve the targets.

The rural development programme shall
demonstrate that:

(i)      relevant combinations of measures are
included in relation to the Union priorities for rural development included in
the programme, logically following from the ex ante evaluation referred
to in point (a) and the analysis referred to in point (b);

(ii)      the allocation of financial
resources to the measures of the programme is balanced and adequate to achieve
the targets set;

(iii)     specific needs linked with specific
conditions at regional or sub-regional level are taken into account and
concretely addressed through adequately designed combinations of measures or
thematic sub-programmes;

(iv)     a pertinent approach towards innovation,
the environment, including the specific needs of Natura 2000 areas, and climate
change mitigation and adaptation is integrated into the programme;

(v)     appropriate action is envisaged to
simplify the implementation of the programme;

(vi)     measures have been taken to ensure
the availability of sufficient advisory capacity on the regulatory requirements
and all aspects linked to sustainable management in agriculture and forestry,
as well as climate action;

(vii)    initiatives are planned for raising
awareness and animating innovative actions and establishing operational groups
of the EIP for agricultural productivity and sustainability;

(viii)   an appropriate approach has been
defined laying down principles with regard to the setting of selection criteria
for projects and local development strategies, which takes into account
relevant targets. In this context Member States may provide for priority to be
given or for a higher support rate for operations undertaken collectively by
groups of farmers;

(d)
the assessment of the ex ante
conditionalities and, where required, the actions referred to in Article 17(4)
of Regulation (EU) No [CSF/2012] and the milestones established for the purpose
of Article 19 of Regulation (EU) No [CSF/2012];

(e)
a description of each of the measures selected;

(f)
in relation to local development, a specific
description of the coordination mechanisms between the local development
strategies, the measure co-operation referred to in Article 36, the measure
basic services and village renewal in rural areas referred to in Article 21 and
the support for non-agricultural activities in rural areas under the measure
farm and business development in rural areas referred to in Article 20;

(g)
a description of the approach towards innovation
in view of enhancing productivity and sustainable resource management and the
contribution to achieving the objectives of the EIP for agricultural
productivity and sustainability referred to in Article 61;

(h)
an analysis of needs relating to monitoring and
evaluation requirements and the evaluation plan referred to in Article 49 of
Regulation (EU) No [CSF/2012]. The Member States shall provide sufficient
resources and capacity building activities to address the identified needs;

(i)
a financing plan comprising:

(i)      a table setting out, in accordance
with Article 64(4), the total EAFRD contribution planned for each year. When
applicable this table shall indicate separately within the total EAFRD
contribution the appropriations provided for the less developed regions and the
funds transferred to the EAFRD in application of Article 7(2) of Regulation
(EU) No DP/2012. The planned annual EAFRD contribution shall be compatible with
the Multi-annual Financial Framework;

(ii)      a table setting out, for each
measure, the type of operation with a specific EAFRD contribution rate and
technical assistance, the total Union contribution planned and the applicable
EAFRD contribution rate. Where applicable, this table shall indicate separately
the EAFRD contribution rate for less developed regions and for other regions;

(j)
an indicator plan comprising for each of the Union
priorities for rural development included in the programme the indicators and
the selected measures with planned outputs and planned expenditure, broken down
between public and private;

(k)
where applicable, a table on additional national
financing per measure in accordance with Article 89;

(l)
the elements needed for the appraisal under
Article 89 and, where applicable, the list of aid schemes falling under Article
88(1) to be used for the implementation of the programmes;

(m)
information on the complementarity with measures
financed by the other common agricultural policy instruments, through cohesion
policy or by the EMFF;

(n)
programme implementing arrangements including:

(i)      the designation by the Member State
of all authorities referred to in Article 72(2) and, for information, a summary
description of the management and control structure;

(ii)      a description of the monitoring and
evaluation procedures, as well as the composition of the Monitoring Committee;

(iii)     the provisions to ensure that the
programme is publicised, including through the national rural network referred
to in Article 55;

(o)
the designation of the partners referred to in
Article 5 of Regulation (EU) No [CSF/2012] and the results of the consultation
of the partners;

(p)
where applicable, the main elements of the national
rural network action plan and structure referred to in Article 55(3), and
provisions for its management, which would constitute the basis for its annual
actions plans.

2.
Where thematic sub-programmes are included in a
rural development programme, each sub-programme shall include:

(a)
a specific analysis of the situation in terms of
SWOT and identification of the needs that have to be addressed by the
sub-programme;

(b)
specific targets at sub-programme level and a
selection of measures, based on a thorough definition of the intervention logic
of the sub-programme, including an assessment of the expected contribution of
the measures chosen to achieve the targets;

(c)
a separate specific indicator plan, with planned
outputs and planned expenditure, broken down between public and private.

3.
The Commission shall, by means of implementing
acts lay down rules for the presentation of the elements described in
paragraphs 1 and 2 in rural development programmes. Those implementing acts
shall be adopted in accordance with the examination procedure referred to in Article
91.

Chapter II
Preparation, approval and modification of rural development programmes

Article 10

Ex ante conditionalities

In addition to the ex ante conditionalities
referred to in Annex IV, the general ex ante conditionalities
established in Annex IV of Regulation (EU) No [CSF/2012] shall apply for the
EAFRD.

Article 11

Approval of rural development programmes

1.
Member States shall submit to the Commission a
proposal for each rural development programme, containing the information
mentioned in Article 9.

2.
Each rural development programme shall be
approved by the Commission by means of an implementing act adopted in
accordance with the examination procedure referred to in Article 91.

Article 12

Amendment of rural development
programmes

1.
Requests for programme amendments by Member
States shall be approved in accordance with the following procedures:

(a)     The Commission shall, by means of
implementing acts, decide on requests to amend programmes that concern:

(i)      a change in the programme strategy
through a major reset of quantified targets;

(ii)      a change in the EAFRD contribution
rate of one or more measures;

(iii)     a change of the entire Union
contribution or its annual distribution at programme level;

(iv)     a transfer of funds between measures
implemented under different EAFRD contribution rates.

Those implementing acts shall be adopted in accordance
with the examination procedure referred to in Article 91.

(b)     The Commission shall, by means of
implementing acts, decide on requests to amend the programme in all other
cases. These shall include in particular:

(i)      introduction or withdrawal of
measures or types of operations;

(ii)      changes in the description of
measures, including changes of eligibility conditions.

2.
The Commission shall be empowered to adopt
delegated acts in accordance with Article 90 concerning the criteria defining a
major reset of quantified targets referred to in paragraph 1(a)(i).

Article 13

Rules on procedures and timetables

The Commission shall, by means of
implementing acts, adopt rules on procedures and timetables for:

(a)
the approval of rural development programmes;

(b)
the submission and approval of proposals for
amendments to rural development programmes, including their entry into force
and frequency of submission during the programming
period.

Those implementing acts shall be adopted in
accordance with the examination procedure referred to in Article 91.

TITLE III
Rural development support

Chapter I
Measures

Article 14

Measures

Each rural development measure shall be
programmed to contribute specifically to the achievement of one or more Union
priorities for rural development. An indicative list of measures of particular
relevance to the Union priorities is set out in Annex V.

Section
1

Individual
Measures

Article 15

Knowledge transfer and information
actions

1.
Support under this measure shall cover
vocational training and skills acquisition actions, demonstration activities
and information actions. Vocational training and skills acquisition actions may
include training courses, workshops and coaching.

Support may also cover short-term farm
management exchange and farm visit.

2.
Support under this measure shall be for the
benefit of persons engaged in the agricultural, food and forestry sector, land
managers and other economic actors which are SMEs operating in rural areas.

The training or other knowledge transfer and
information action provider shall be the beneficiary of the support.

3.
Support under this measure shall not include
courses of instruction or training, which form part of normal education
programmes or systems at secondary or higher levels.

Bodies providing knowledge transfer and
information services shall have the appropriate capacities in the form of staff
qualifications and regular training to carry out this task.

4.
Eligible costs under this measure shall be the
costs of organising and delivering the knowledge transfer or information
action. In the case of demonstration projects, support may also cover relevant
investment costs. Costs for travel, accommodation and per diem expenses of
participants as well as the cost of replacement of farmers shall also be
eligible.

5.
The Commission shall be empowered to adopt
delegated acts in accordance with Article 90 concerning the further
specification of eligible costs, the minimum qualifications of bodies providing
knowledge transfer services and the duration and content of farm exchange
schemes and farm visits.

Article 16

Advisory services, farm management and
farm relief services

1.
Support under this measure shall be granted in
order to:

(a)
help farmers, forest holders and SMEs in rural
areas benefit from the use of advisory services for the improvement of the
economic and environmental performance as well as the climate friendliness and
resilience of their holding, enterprise and/or investment;

(b)
promote the setting up of farm management, farm
relief and farm advisory services, as well as forestry advisory services,
including the Farm Advisory System referred to in Articles 12 to 14 of
Regulation (EU) No HR/2012;

(c)
promote the training of advisors.

2.
The beneficiary of support provided in paragraph
1(a) and (c) shall be the provider of advice or training. Support under
paragraph 1(b) shall be granted to the authority or body selected to set up the
farm management, farm relief, farm advisory or forestry advisory service.

3.
The authorities or bodies selected to provide
advice shall have the appropriate resources in the form of regularly trained
and qualified staff and advisory experience and reliability with respect to the
fields they advise in. The beneficiaries shall be chosen through calls for
proposals. The selection procedure shall be objective and be open to public as
well as to private bodies.

When providing advice, advisory services shall
respect the non-disclosure obligations referred to in Article 13(2) of
Regulation (EU) No HR/2012

4.
Advice to farmers shall be linked to at least
one Union priority for rural development and shall cover as a minimum one of the
following elements:

(a)
one or more of the statutory management
requirements and/or standards for good agricultural and environmental
conditions provided for in Chapter I of Title VI of Regulation (EU) No HR/2012;

(b)
where applicable, the agricultural practices
beneficial for the climate and the environment as laid down in Chapter 2 of
Title III of Regulation (EU) No DP/2012 and the maintenance of the agricultural
area as referred to in Article 4(1)(c) of Regulation (EU) No DP/2012;

(c)
the requirements or actions related to climate
change mitigation and adaptation, biodiversity, the protection of water and
soil, animal and plant disease notification and innovation as laid down in
Annex I to Regulation (EU) No HR/2012;

(d)
the sustainable development of the economical
activity of the small farms as defined by the Member States and at least of the farms participating in the Small farmers scheme referred to
in Title V of Regulation (EU) No DP/2012; or

(e)
where relevant, occupational safety standards
based on Union legislation.

Advice may also cover other issues linked to
the economic, agricultural and environmental performance of the agricultural
holding.

5.
Advice to forest holders shall cover as a
minimum the relevant obligations under Directives 92/43/EEC, 2009/147/ECand 2000/60/EC.
It may also cover issues linked to the economic and environmental performance
of the forest holding.

6.
Advice to SMEs may cover issues linked to the
economic and environmental performance of the enterprise.

7.
Where justified and appropriate, advice may be
partly provided in group, while taking into account the situations of the
individual user of advisory services.

8.
Support under paragraphs 1(a) and (c) shall be
limited to the maximum amounts laid down in Annex I. Support under paragraph
1(b) shall be degressive over a maximum period of five years from setting up.

9.
The Commission shall be empowered to adopt
delegated acts in accordance with Article 90 concerning the further
specification of the minimum qualifications of the authorities or bodies
providing advice.

Article 17

Quality schemes for agricultural
products and foodstuffs

1.
Support under this measure shall cover new
participation by farmers in:

(a)
quality schemes for agricultural products,
cotton or foodstuffs established by Union legislation;

(b)
quality schemes for agricultural products,
cotton or foodstuffs recognised by the Member States as complying with the
following criteria:

(i)      the specificity of the final product
under such schemes is derived from clear obligations to guarantee:

- specific product characteristics, or

- specific farming or production methods, or

- a quality of the final product that goes
significantly beyond the commercial commodity standards as regards public,
animal or plant health, animal welfare or environmental protection;

(ii)      the scheme is open to all producers;

(iii)     the scheme involves binding product
specifications and compliance with those specifications is verified by public
authorities or by an independent inspection body;

(iv)     the scheme is transparent and assures
complete traceability of products;

or

(c)
voluntary agricultural product certification
schemes recognised by the Member States as meeting the Union best practice
guidelines[29]
for the operation of voluntary certification schemes relating to agricultural
products and foodstuffs.

2.
Support shall be granted as an annual incentive
payment, the level of which shall be determined according to the level of the
fixed costs arising from participation in supported schemes, for a maximum
duration of five years.

For the purposes of this paragraph, 'fixed
costs' means the costs incurred for entering a supported quality scheme and the
annual contribution for participating in that scheme, including, where
necessary, expenditure on checks required to verify compliance with the specifications
of the scheme.

3.
Support shall be limited to the maximum amount
laid down in Annex I.

4.
The Commission shall be empowered to adopt
delegated acts in accordance with Article 90 concerning the specific Union
quality schemes to be covered by paragraph 1(a).

Article 18

Investments in physical assets

1.
Support under this measure shall cover tangible
and/or intangible investments which:

(a)
improve the overall performance of the
agricultural holding;

(b)
concern the processing, marketing and/or
development of agricultural products covered by Annex I to the Treaty or
cotton. The output of the production process may be a product not covered by
that Annex;

(c)
concern infrastructure related to the
development and adaptation of agriculture, including access to farm and forest land,
land consolidation and improvement, energy supply and, water management; or

(d)
are non productive investments linked to the
achievement of agri- and forest- environment commitments, biodiversity
conservation status of species and habitat as well as enhancing the public
amenity value of a Natura 2000 area or other high nature value area to be
defined in the programme.

2.
Support under paragraph 1(a) shall be granted to
agricultural holdings. In the case of investments to support farm restructuring,
only farms not exceeding a certain size, to be defined by the Member States in
the programme based on the SWOT analysis carried out in relation to the Union priority
for rural development “enhancing competitiveness of all types of agriculture
and enhancing farm viability”, shall be eligible.

3.
Support under this measure shall be limited to
the maximum support rates laid down in Annex I. These maximum rates may be
increased for young farmers, collective investments and integrated projects
involving support under more than one measure, investments in areas facing significant
natural constraints as referred to in Article 33(3) and operations supported in
the framework of the EIP for agricultural productivity and sustainability in
accordance with the support rates laid down in Annex I. However, the maximum
combined support rate may not exceed 90%.

4.
Paragraph 3 shall not apply to non-productive
investments referred to in paragraph 1(d).

Article 19

Restoring agricultural production
potential damaged by natural disasters and catastrophic events and introduction
of appropriate prevention actions

1.
Support under this measure shall cover:

(a)
investments in preventive actions aimed at
reducing the consequences of probable natural disasters and catastrophic events;

(b)
investments for the restoration of agricultural
land and production potential damaged by natural disasters and catastrophic
events.

2.
Support shall be granted to farmers or groups of
farmers. Support may also be granted to public entities where a link between
the investment undertaken by such entities and agricultural production
potential is established.

3.
Support under paragraph 1(b) shall be subject to
the formal recognition by the competent public authorities of Member States
that a natural disaster has occurred and that this disaster or measures adopted in accordance with Directive 2000/29/EC to
eradicate or contain a plant disease or pest has caused
the destruction of at least 30% of the relevant agricultural potential.

4.
No support under this measure shall be granted
for loss of income resulting from the natural disaster or catastrophic event.

Member States shall ensure that
overcompensation as a result of the combination of this measure and other
national or Union support instruments or private insurance schemes is avoided.

5.
Support under paragraph 1(a) shall be limited to
the maximum support rate laid down in Annex I. This maximum rate shall not
apply to collective projects by more than one beneficiary.

6.
The Commission shall be empowered to adopt
delegated acts in accordance with Article 90 concerning the definition of
eligible costs under this measure.

Article 20

Farm and business development

1.
Support under this measure shall cover:

(a)
business start-up aid for:

(i)      young farmers;

(ii)      non-agricultural activities in rural
areas;

(iii)     the development of small farms;

(b)
investments in non-agricultural activities;

(c)
annual payments for farmers participating in the
small farmers scheme established by Title V of Regulation (EU) No DP/2012
(hereafter "the small farmers scheme") who permanently transfer their
holding to another farmer.

2.
Support under paragraph 1(a)(i) shall be granted
to young farmers.

Support under paragraph 1(a)(ii) shall be
granted to farmers or members of the farm household diversifying into
non-agricultural activities and to non-agricultural micro- and small-
enterprises in rural areas.

Support under paragraph 1(a)(iii) shall be
granted to small farms as defined by Member States.

Support under paragraph 1(b) shall be granted
to non- agricultural micro- and small- enterprises in rural areas and to
farmers or members of the farm household.

Support under paragraph 1(c) shall be granted
to farmers participating in the small farmers scheme, at the time of submitting
their application for support, for at least one year and who commit to permanently
transfer their entire holding and the corresponding payment entitlements to
another farmer. Support shall be paid from the date of the transfer until 31
December 2020.

3.
Any natural or legal person or a group of
natural or legal persons, whatever legal status is granted to the group and its
members by national law, may be considered as a member of a farm household,
with the exception of farm workers. Where a legal person or a group of legal
persons is considered as a member of the farm household, that member must
exercise an agricultural activity on the farm at the time of the support
application.

4.
Support under paragraph 1(a) shall be
conditional on the submission of a business plan. Implementation of the
business plan has to start within six months from the date of the decision
granting the aid.

Member States shall define upper and lower
thresholds for allowing agricultural holdings access to support under
paragraphs 1(a)(i) and 1(a)(iii) respectively. The lower threshold for support
under paragraph 1(a)(i) shall be significantly higher than the upper threshold
for support under paragraph 1(a)(iii). Support shall, however, be limited to
holdings coming under the definition of micro- and small- enterprises.

5.
Support under paragraph 1(a) shall be in the
form of a flat rate payment, which may be paid in at least two instalments over
a period of maximum five years. Instalments may be degressive. The payment of
the last instalment, under paragraph 1(a)(i) and (ii) shall be conditional upon
the correct implementation of the business plan.

6.
The maximum amount of support for paragraph 1(a)
is laid down in Annex I. Member States shall define the amount of support under
paragraph 1(a)(i) and (ii) also taking into account the socio-economic
situation of the programme area.

7.
Support under paragraph 1(c) shall be equal to 120%
of the annual payment that the beneficiary received under the small farmers
scheme.

8.
The Commission shall be empowered to adopt
delegated acts in accordance with Article 90 concerning the minimum content of
business plans and the criteria to be used by Member States for setting the
thresholds referred to in paragraph 4.

Article 21

Basic services and village renewal in
rural areas

1.
Support under this measure shall cover in
particular:

(a)
the drawing up and updating of plans for the
development of municipalities in rural areas and their basic services and of
protection and management plans relating to NATURA 2000 sites and other areas of
high nature value;

(b)
investments in the creation, improvement or
expansion of all types of small scale infrastructure, including investments in
renewable energy;

(c)
broadband infrastructure, including its
creation, improvement and expansion, passive broadband infrastructure and
provision of access to broadband and public e-government solutions;

(d)
investments in the setting-up, improvement or
expansion of local basic services for the rural population, including leisure
and culture, and the related infrastructure;

(e)
investments by public bodies in recreational
infrastructure, tourist information and sign-posting of touristic sites;

(f)
studies and investments associated with the
maintenance, restoration and upgrading of the cultural and natural heritage of
villages and rural landscapes, including related socio-economic aspects;

(g)
investments targeting the relocation of
activities and conversion of buildings or other facilities located close to
rural settlements, with a view to improving the quality of life or increasing
the environmental performance of the settlement.

2.
Support under this measure shall only concern
small-scale infrastructure, as defined by each Member State in the programme.
However, rural development programmes may provide for specific derogations from
this rule for investments in broadband and renewable energy. In this case,
clear criteria ensuring complementarity with support under other Union
instruments shall be provided.

3.
Investments under paragraph 1 shall be eligible
for support where the relevant operations are implemented in accordance with
plans for the development of municipalities in rural areas and their basic
services, where such plans exist and shall be consistent with any local
development strategy where one exists.

4.
The Commission shall be empowered to adopt
delegated acts in accordance with Article 90 concerning the definition of the
types of renewable energy infrastructure that shall be eligible for support
under this measure.

Article 22

Investments in forest area development
and improvement of the viability of forests

1.
Support under this measure shall concern:

(a)
afforestation and creation of woodland;

(b)
establishment of agro-forestry systems;

(c)
prevention and restoration of damage to forests
from forest fires and natural disasters, including pest and disease outbreaks,
catastrophic events and climate related threats;

(d)
investments improving the resilience and
environmental value as well as the mitigation potential of forest ecosystems;

(e)
investments in new forestry technologies and in
processing and marketing of forest products.

2.
Limitations on ownership of forests provided for
in Articles 36 to 40 shall not apply for the tropical or subtropical forests
and for the wooded areas of the territories of the Azores, Madeira, the Canary
islands, the smaller Aegean islands within the meaning of Council Regulation
(EEC) No 2019/93[30]
and the French overseas departments.

For holdings above a certain size, to be
determined by the Member States in the programme, support shall be conditional
on the submission of a forest management plan or equivalent instrument in line
with sustainable forest management as defined by the Ministerial Conference on
the Protection of Forests in Europe of 1993[31]
(hereinafter "sustainable forest management").

3.
The Commission shall be empowered to adopt
delegated acts in accordance with Article 90 concerning the conditions for
establishing the occurrence of a natural disaster or of pests and diseases outbreaks,
and the definition of eligible types of preventive actions.

Article 23

Afforestation and creation of woodland

1.
Support under Article 22(1)(a) shall be granted
to private land-owners and tenants, municipalities and their associations and
shall cover the costs of establishment and an annual premium per hectare to
cover the costs of maintenance, including early and late cleanings, for a
maximum period of ten years.

2.
Both agricultural and non-agricultural land
shall be eligible. Species planted shall be adapted to the environmental and
climatic conditions of the area and answer to minimum environmental
requirements. No support shall be granted for the planting of short rotation
coppice, Christmas trees or fast growing trees for energy production. In areas
where afforestation is made difficult by severe pedo-climatic conditions
support may be provided for planting other perennial woody species such as
shrubs or bushes suitable to the local conditions.

3.
The Commission shall be empowered to adopt
delegated acts in accordance with              Article 90 concerning the
definition of the minimum environmental requirements referred to in paragraph
2.

Article 24

Establishment of agro-forestry systems

1.
Support under Article 22(1)(b) shall be granted
to private landowners, tenants, municipalities and their associations and shall
cover the costs of establishment and an annual premium per hectare to cover the
costs of maintenance for a maximum period of three years.

2.
"Agro-forestry systems" shall mean
land use systems in which trees are grown in combination with extensive
agriculture on the same land. The maximum number of trees to be planted per
hectare shall be determined by the Member States taking account of local
pedo-climatic conditions, forestry species and the need to ensure agricultural
use of the land.

3.
Support shall be limited to the maximum support
rate laid down in Annex I.

Article 25

Prevention and restoration of damage to
forests from forest fires and natural disasters and catastrophic events

1.
Support under Article 22(1)(c) shall be granted
to private, semi public and public forest owners, municipalities, state forests
and their associations and shall cover the costs for:

(a)
the establishment of protective infrastructure.
In the case of firebreaks support may also cover aid contributing to
maintenance costs. No support shall be granted for agricultural related
activities in areas covered by agri-environment commitments;

(b)
local, small scale prevention activities against
fire or other natural hazards;

(c)
establishing and improving forest fire, pest and
diseases monitoring facilities and communication equipment;

(d)
restoring forest potential damaged from fires
and other natural disasters including pests, diseases as well as catastrophic
events and climate change related events.

2.
In the case of preventive actions concerning
pests and diseases, the risk of a relevant disaster occurrence must be
supported by scientific evidence and acknowledged by scientific public
organisations. Where relevant, the list of species of organisms harmful to
plants which may cause a disaster must be provided in the programme.

Eligible operations shall be consistent with
the forest protection plan established by the Member States. For holdings above
a certain size, to be determined by the Member States in the programme, support
shall be conditional on the submission of a forest management plan detailing
the preventive objectives.

Forest areas classified as medium to high
forest fire risk according to the forest protection plan established by the
Member States shall be eligible for support relating to forest fire prevention.

3.
Support under paragraph 1(d) shall be subject to
the formal recognition by the competent public authorities of Member States
that a natural disaster has occurred and that this
disaster, or measures adopted in accordance with Directive 2000/29/EC to
eradicate or contain a plant disease or pest has caused
the destruction of at least 30% of the relevant forest potential. This
percentage shall be determined on the basis of either the average existing
forest potential in the three-year period immediately preceding the disaster or
on the average of the five-year period immediately preceding the disaster,
excluding the highest and the lowest entry.

4.
No support under this measure shall be granted
for loss of income resulting from the natural disaster.

Member States shall ensure that
overcompensation as a result of the combination of this measure and other
national or Union support instruments or private insurance schemes is avoided.

Article 26

Investments improving the resilience and
environmental value of forest ecosystems

1.
Support under Article 22(1)(d) shall be granted
to natural persons, private forest owners, private law and semi-public bodies,
municipalities and their associations. In the case of state forests support may
also be granted to bodies managing such forests, which are independent from the
state budget.

2.
Investments shall be aimed at the achievement of
commitments undertaken for environmental aims or providing ecosystem services
and/or which enhance the public amenity value of forest and wooded land in the
area concerned or improve the climate change mitigation potential of ecosystems,
without excluding economic benefits in the long term.

Article 27

Investments in new forestry technologies
and in processing and marketing of forest products

1.
Support under Article 22(1)(e) shall be granted
to private forest owners, municipalities and their associations and to SMEs for
investments enhancing forestry potential or relating to processing and
marketing adding value to forest products. In the territories of the Azores,
Madeira, the Canary islands, the smaller Aegean islands within the meaning of
Regulation (EEC) No 2019/93 and the French overseas departments support may
also be granted to enterprises that are not SMEs.

2.
Investments related to the improvement of the
economic value of forests shall be at the level of the forest holding and may
include investments for soil and resource friendly harvesting machinery and
practices.

3.
Investments related to the use of wood as a raw
material or energy source shall be limited to all working operations prior to
industrial processing.

4.
Support shall be limited to the maximum support
rates laid down in Annex I.

Article 28

Setting up of producer groups

1.
Support under this measure shall be granted in
order to facilitate the setting up of producer groups in the agriculture and
forestry sectors for the purpose of:

(a)
adapting the production and output of producers
who are members of such groups to market requirements;

(b)
jointly placing goods on the market, including
preparation for sale, centralisation of sales and supply to bulk buyers;

(c)
establishing common rules on production information,
with particular regard to harvesting and availability; and

(d)
other activities that may be carried out by
producer groups, such as development of business and marketing skills and
organisation and facilitation of innovation processes.

2.
Support shall be granted to producer groups
which are officially recognised by the Member States' competent authority on
the basis of a business plan. It shall be limited to producer groups coming
under the definition of SMEs.

Member States shall verify that the objectives
of the business plan have been reached within five years after recognition of
the producer group.

3.
The support shall be paid as a flat rate aid in
annual instalments for the first five years following the date on which the
producer group was recognised on the basis of its business plan. It shall be
calculated on the basis of the group's annual marketed production. Member
States shall pay the last instalment only after having verified the correct
implementation of the business plan.

In the first year Member States may pay support
to the producer group calculated on the basis of the average annual value of
the marketed production of its members over the three years before they entered
the group. In the case of producer groups in the
forestry sector, support shall be calculated on the basis of the average
marketed production of the members of the group over the last five years before
the recognition, excluding the highest and the lowest value.

4.
Support shall be limited to the maximum rates
and amounts laid down in Annex I.

Article 29

Agri-environment- climate

1.
Member States shall make support under this
measure available throughout their territories, in accordance with their
national, regional or local specific needs and priorities. Inclusion of this
measure in rural development programmes shall be compulsory.

2.
Agri-environment-climate payments shall be
granted to farmers, groups of farmers or groups of farmers and other
land-managers who undertake, on a voluntary basis, to carry out operations
consisting of one or more agri-environment-climate commitments on agricultural
land. Where duly justified to achieve environmental objectives,
agri-environment-climate payments may be granted to other land-managers or
groups of other land-managers.

3.
Agri-environment-climate payments cover only
those commitments going beyond the relevant mandatory standards established
pursuant to Chapter I of Title VI of Regulation (EU) No HR/2012 and other
relevant obligations established under Chapter 2 of Title III of Regulation
(EU) No DP/2012, relevant minimum requirements for fertiliser and plant
protection products use as well as other relevant mandatory requirements
established by national legislation. All such mandatory requirements shall be
identified in the programme.

4.
Member States shall endeavour to provide persons
undertaking to carry out operations under this measure with the knowledge and
information required to implement them, including by commitment-related expert
advice and/or by making support under this measure conditional to relevant
training.

5.
Commitments under this measure shall be
undertaken for a period of five to seven years. However, where necessary in
order to achieve or maintain the environmental benefits sought, Member States
may determine a longer period in their rural development programmes for
particular types of commitments, including by means of providing for their annual
extension after the termination of the initial period.

6.
Payments shall be granted annually and shall
compensate beneficiaries for all or part of the additional costs and income
foregone resulting from the commitments made. Where necessary they may also
cover transaction costs to a value of up to 20% of the premium paid for the
agri-environment-climate commitments. Where commitments are undertaken by
groups of farmers, the maximum level shall be 30%.

7.
Where required for ensuring the efficient
application of the measure, Member States may use the procedure referred to in
Article 49(3) for the selection of beneficiaries.

8.
Support shall be limited to the maximum amounts
laid down in Annex I.

No support under this measure may be granted
for commitments that are covered under the organic farming measure.

9.
Support may be provided for the conservation of
genetic resources in agriculture for operations not covered by the provisions
under paragraphs 1 to 8.

10.
The Commission shall be empowered to adopt
delegated acts in accordance with Article 90 concerning the annual extension of
the commitments after the initial period of the operation, conditions
applicable to commitments to extensify or manage differently livestock farming,
to limit fertilisers, plant protection products or other inputs, to rear local
breeds in danger of being lost to farming or to preserve plant genetic
resources as well as concerning definition of eligible operations under
paragraph 9.

Article 30

Organic farming

1.
Support under this measure shall be granted, per
hectare of UAA, to farmers or groups of farmers who undertake, on a voluntary
basis to convert to or maintain organic farming practices and methods as
defined in Council Regulation (EC) No 834/2007[32].

2.
Support shall only be granted for commitments
going beyond the relevant mandatory standards established pursuant to Chapter I
of Title VI of Regulation (EU) No HR/2012, relevant minimum requirements for
fertiliser and plant protection products use as well as other relevant
mandatory requirements established by national legislation. All such
requirements shall be identified in the programme.

3.
Commitments under this measure shall be
undertaken for a period of five to seven years. Where support is granted for
the maintenance of organic farming, Member States may provide in their rural
development programmes for annual extension after the termination of the initial
period.

4.
Payments shall be granted annually and shall
compensate beneficiaries for all or part of the additional costs and income
foregone resulting from the commitments made. Where necessary they may also
cover transaction costs to a value of up to 20% of the premium paid for the commitments.
Where commitments are undertaken by groups of farmers, the maximum level shall
be 30%.

5.
Support shall be limited to the maximum amounts
laid down in Annex I.

Article 31

Natura 2000 and Water framework
directive payments

1.
Support under this measure shall be granted
annually and per hectare of UAA or per hectare of forest in order to compensate
beneficiaries for costs incurred and income foregone resulting from
disadvantages in the areas concerned, related to the implementation of
Directives , 92/43/EEC, 2009/147/EC and 2000/60/EC.

2.
Support shall be granted to farmers and to
private forest owners and associations of forest owners respectively. In duly
justified cases it may also be granted to other land managers.

3.
Support to farmers, linked to Directives 92/43/EEC
and 2009/147/EC shall only be granted in relation to disadvantages resulting
from requirements that go beyond the good agricultural and environmental
condition provided for in Article 94 and Annex II of Council Regulation (EU) No
HR/2012.

4.
Support to farmers, linked to Directive
2000/60/EC shall only be granted in relation to specific requirements that:

(a)
were introduced by Directive 2000/60/EC, are in
accordance with the programmes of measures of the river basin management plans
for the purpose of achieving the environmental objectives of that Directive and
go beyond the measures required to implement other Union legislation for the
protection of water;

(b)
go beyond the statutory management requirements
and the good agricultural and environmental condition provided for in Chapter I
of Title VI of Regulation (EU) No HR/2012 and
the obligations established under Chapter 2 of Title III of Regulation (EU) No
DP/2012;

(c)
go beyond the level of protection of the Union
legislation existing at the time Directive 2000/60/EC was adopted as laid down
in Article 4(9) of Directive 2000/60/EC; and

(d)
impose major changes in type of land use, and/or
major restrictions in farming practice resulting in a significant loss of
income.

5.
The requirements referred to in paragraphs 3 and
4 shall be identified in the programme.

6.
The following areas shall be eligible for
payments:

(a)
Natura 2000 agricultural and forest areas
designated pursuant to Directives 92/43/EEC and 2009/147/EC ;

(b)
other delimited nature protection areas with
environmental restrictions applicable to farming or forests which contribute to
the implementation of Article 10 of Directive 92/43/EEC. These areas shall, per
rural development programme, not exceed 5% of the designated Natura 2000 areas
covered by its territorial scope;

(c)
agricultural areas included in river basin
management plans according to Directive 2000/60/EC.

7.
Support shall be limited to the maximum amounts
laid down in Annex I.

Article 32

Payments to areas facing natural or
other specific constraints

1.
Payments to farmers in mountain areas and other
areas facing natural or other specific constraints shall be granted annually
per hectare of UAA in order to compensate farmers for additional costs and
income foregone related to the constraints for agricultural production in the
area concerned.

Additional costs and income foregone shall be
calculated in comparison to areas which are not affected by natural or other
specific constraints, taking into account payments pursuant to Chapter 3 of
Title III of Regulation (EU) No DP/2012.

2.
Payments shall be granted to farmers who
undertake to pursue their farming activity in the areas designated pursuant to
Article 33.

3.
Payments shall be fixed between the minimum and
maximum amount laid down in Annex I.

4.
Member States shall provide for degressivity of
payments above a threshold level of area per holding, to be defined in the
programme.

5.
Member States may grant payments under this
measure between 2014 and 2017 to farmers in areas which were eligible under
Article 36(a)(ii) of Regulation (EC) No 1698/2005 during the 2007-2013
programming period but are no longer eligible following the new delimitation
referred to in Article 46(3). These payments shall be degressive starting in
2014 at 80% of the payment received in 2013 and ending in 2017 at 20%.

6.
In Member States which have not completed the
delimitation referred to in Article 33(3) before 1 January 2014, paragraph 5
shall apply to farmers receiving payments in areas which were eligible for such
payments during the 2007-2013 period. Following completion of the delimitation,
farmers in areas that remain eligible shall receive full payments under this
measure. Farmers in areas that are no longer eligible shall continue to receive
payments in accordance with paragraph 5.

Article 33

Designation of areas facing natural and
other specific constraints

1.
Member States shall, on the basis of paragraphs
2, 3 and 4, designate areas eligible for payments provided for in Article 32
under the following categories:

(a)
mountain areas;

(b)
areas, other than mountain areas, facing
significant natural constraints; and

(c)
other areas affected by specific constraints.

2.
In order to be eligible for payments under
Article 32, mountain areas shall be characterized by a considerable limitation
of the possibilities for using the land and by an appreciable increase in
production costs due to:

(a)
the existence, because of altitude, of very
difficult climatic conditions, the effect of which is substantially to shorten
the growing season;

(b)
at a lower altitude, the presence over the
greater part of the area in question of slopes too steep for the use of
machinery or requiring the use of very expensive special equipment, or a
combination of these two factors, where the constraints resulting from each
taken separately is less acute but the combination of the two gives rise to an
equivalent constraints.

Areas north of the 62nd parallel and
certain adjacent areas shall be regarded as mountain areas.

3.
In order to be eligible for payments under
Article 32, areas, other than mountain areas, shall be considered as facing
significant natural constraints if at least 66% of the UAA meets at least one of the
criteria listed in Annex II at the threshold value indicated. Respect of this
condition shall be ensured at the appropriate level of local administrative
units ("LAU 2" level).

When delimiting the areas concerned by this
paragraph, Member States shall undertake a fine-tuning exercise, based on
objective criteria, with the purpose of excluding areas in which significant
natural constraints in accordance with the first subparagraph have been
documented but have been overcome by investments or by economic activity.

4.
Areas other than those referred to in paragraphs
2 and 3 shall be eligible for payments under Article 32 if they are affected by
specific constraints and where land management should be continued in order to
conserve or improve the environment, maintain the countryside and preserve the
tourist potential of the area or in order to protect the coastline.

Areas affected by specific constraints shall
comprise farming areas which are homogeneous from the point of view of natural
protection conditions and their total extent shall not exceed 10% of the area
of the Member State concerned.

5.
Member States shall attach to their rural
development programmes:

(a)
the existing or amended delimitation pursuant to
paragraphs 2 and 4;

(b)
the new delimitation of the areas referred to in
paragraph 3.

Article 34

Animal welfare

1.
Animal welfare payments under this measure shall
be granted to farmers who undertake, on a voluntary basis, to carry out
operations consisting of one or more animal welfare commitments.

2.
Animal welfare payments cover only those
commitments going beyond the relevant mandatory standards established pursuant
to Chapter I of Title VI of Regulation (EU) No HR/2012 and other relevant
mandatory requirements established by national legislation. These relevant
requirements shall be identified in the programme.

Those commitments shall be undertaken for a
renewable period of one year.

3.
The area based or other unitary costs based
payments shall be granted annually and shall compensate farmers for all or part
of the additional costs and income foregone resulting from the commitment made.
Where necessary, they may also cover transaction costs to the value of up to
20% of the premium paid for the animal welfare commitments.

Support shall be limited to the maximum amount
laid down in Annex I.

4.
The Commission shall be empowered to adopt
delegated acts in accordance with Article 90 concerning the definition of the
areas in which animal welfare commitments shall provide upgraded standards of
production methods.

Article 35

Forest-environmental and climate
services and forest conservation

1.
Support under this measure shall be granted per
hectare of forest to forest holders, municipalities and their associations who undertake,
on a voluntary basis, to carry out operations consisting of one or more forest-environment
commitments. Bodies managing state owned forests may also benefit from support
provided they are independent from the state budget.

For forest holdings above a certain threshold
to be determined by Member States in their rural development programmes, support
under paragraph 1 shall be conditional on the submission of a forest management
plan or equivalent instrument in line with sustainable forest management.

2.
Payments shall cover only those commitments
going beyond the relevant mandatory requirements established by the national
forestry act or other relevant national legislation. All such requirements
shall be identified in the programme.

Commitments shall be undertaken for a period of
between five and seven years. However, where necessary and duly justified,
Member States may determine a longer period in their rural development
programmes for particular types of commitments.

3.
Payments shall compensate beneficiaries for all
or part of the additional costs and income foregone resulting from the
commitments made. Where necessary they may also cover transaction costs to a
value of up to 20% of the premium paid for the forest-environment commitments. Support
shall be limited to the maximum amount laid down in Annex I.

4.
Support may be provided to private entities,
municipalities and their associations for the conservation and promotion of
forest genetic resources for operations not covered under paragraphs 1, 2 and
3.

5.
The Commission shall be empowered to adopt
delegated acts in accordance with Article 90 concerning the types of operations
eligible for support under paragraph 4.

Article 36

Co-operation

1.
Support under this measure shall promote forms
of co-operation involving at least two entities and in particular:

(a)
co-operation approaches among different actors
in the Union agriculture and food chain, forestry sector and among other actors
that contribute to achieving the objectives and priorities of rural development
policy, including inter-branch organisations;

(b)
the creation of clusters and networks;

(c)
the establishment and operation of operational
groups of the EIP for agricultural productivity and sustainability as referred
to in Article 62.

2.
Co-operation under paragraph 1 shall relate in
particular to the following:

(a)
pilot projects;

(b)
the development of new products, practices,
processes and technologies in the agriculture, food and forestry sectors

(c)
co-operation among small operators in organising
joint work processes, sharing facilities and resources;

(d)
horizontal and vertical co-operation among
supply chain actors for the establishment of logistic platforms to promote
short supply chains and local markets;

(e)
promotion activities in a local context relating
to the development of short supply chains and local markets;

(f)
joint action undertaken with a view to
mitigating or adapting to climate change;

(g)
collective approaches to environmental projects
and ongoing environmental practices;

(h)
horizontal and vertical cooperation among supply
chain actors in the sustainable production of biomass for use in food, energy production
and industrial processes.

(i)
implementation, in particular by public-private partnerships other than those
defined in Article 28(1)(b) of Regulation (EU)
No [CSF/2012], of local development strategies addressing one or more of the
Union priorities for rural development;

(j)
drawing up of forest management plans or
equivalent instruments.

3.
Support under paragraph 1(b) shall be granted
only to newly formed clusters and networks and those commencing an activity
that is new to them.

Support for operations under paragraph 2(b) may
be granted also to individual actors where this possibility is provided for in
the rural development programme.

4.
The results of pilot projects and operations by
individual actors under paragraph 2(b) shall be disseminated.

5.
The following costs, linked to the forms of
co-operation referred to in paragraph 1 shall be eligible for support under
this measure:

(a)
studies of the area concerned, feasibility
studies, and costs for the drawing up of a business plan or a forest management
plan or equivalent, or local development strategy other than the one referred
to in Article 29 of Regulation EU (No) [CSF/2012];

(b)
animation of the area concerned in order to make
a collective territorial project feasible. In the case of clusters, animation
may also concern the organisation of training, networking between members and
the recruitment of new members;

(c)
running costs of the co-operation;

(d)
direct costs of specific projects linked to the
implementation of a business plan, a local development strategy other than the
one referred to in Article 29 of Regulation (EU) No [CSF/2012] or an action
targeted towards innovation;

(e)
costs of promotion activities.

6.
Where a business plan or a forest management
plan or equivalent or a development strategy is implemented, Member States may
grant the aid either as a global amount covering the costs of co-operation and
the costs of the projects implemented or cover only the costs of the
co-operation and use funds from other measures or other Union Funds for project
implementation.

7.
Co-operation among actors located in different
regions or Member States shall also be eligible for support.

8.
Support shall be limited to a maximum period of
seven years except for collective environmental action in duly justified cases.

9.
Co-operation under this measure may be combined
with projects supported by Union funds other than the EAFRD in the same
territory. Member States shall ensure that overcompensation as a result of the
combination of this measure with other national or Union support instruments is
avoided.

10.
The Commission shall be empowered to adopt
delegated acts in accordance with Article 90 concerning the further
specification of the characteristics of pilot projects, clusters, networks,
short supply chains and local markets that will be eligible for support, as
well as concerning the conditions for granting aid to the types of operation
listed in paragraph 2.

Article 37

Risk management

1.
Support under this measure shall cover:

(a)
financial contributions, paid directly to
farmers, to premiums for crop, animal and plant insurance against economic
losses caused by adverse climatic events and animal or plant diseases or pest
infestation;

(b)
financial contributions to mutual funds to pay
financial compensations to farmers, for economic losses caused by the outbreak
of an animal or plant disease or an environmental incident;

(c)
an income stabilisation tool, in the form of
financial contributions to mutual funds, providing compensation to farmers who
experience a severe drop in their income.

2.
For the purpose of paragraph 1 points (b) and
(c), ‘mutual fund’ shall mean a scheme accredited by the Member State in
accordance with its national law for affiliated farmers to insure themselves,
whereby compensation payments are made to affiliated farmers affected by
economic losses caused by the outbreak of an animal or plant disease or an
environmental incident or experiencing a severe drop in their income.

3.
Member States shall ensure that overcompensation
as a result of the combination of this measure with other national or Union
support instruments or private insurance schemes is avoided. Direct income support received under the European Globalisation Fund[33] (hereinafter "EGF")
shall also be taken into consideration when estimating the income levels of
farmers.

4.
The Commission shall be empowered to adopt
delegated acts in accordance with Article 90 concerning the minimum and maximum
duration of the commercial loans to mutual funds referred to in Articles 39(3)(b)
and 40(4).

Article 38

Crop, animal, and plant insurance

1.
Support under Article 37(1)(a) shall only be
granted for insurance contracts which cover for loss caused by an adverse
climatic event or by an animal or plant disease or a pest infestation or a measure adopted in accordance with Directive 2000/29/EC to eradicate
or contain a plant disease or pest which destroys more
than 30 % of the average annual production of the farmer in the preceding
three-year period or a three-year average based on the preceding five-year
period, excluding the highest and lowest entry.

2.
The occurrence of an adverse climatic event or
the outbreak of an animal or plant disease or pest infestation has to be
formally recognised as such by the competent authority of the Member State
concerned.

Member States may, where appropriate, establish
in advance criteria on the basis of which such formal recognition shall be
deemed to be granted.

3.
Insurance payments shall compensate for not more
than the total of the cost of replacing the losses referred to in Article 37(1)(a)
and shall not require or specify the type or quantity of future production.

Member States may limit the amount of the
premium that is eligible for support by applying appropriate ceilings.

4.
Support shall be limited to the maximum rate
laid down in Annex I.

Article 39

Mutual funds for animal and plant
diseases and environmental

incidents

1.
In order to be eligible for support the mutual
fund concerned shall:

(a)
be accredited by the competent authority in
accordance with national law;

(b)
have a transparent policy towards payments into
and withdrawals from the fund;

(c)
have clear rules attributing responsibilities
for any debts incurred.

2.
Member States shall define the rules for the
constitution and management of the mutual funds, in particular for the granting
of compensation payments to farmers in the event of crisis and for the
administration and monitoring of compliance with these rules.

3.
The financial contributions referred to in
Article 37(1)(b) may only relate to:

(a)
the administrative costs of setting up the
mutual fund, spread over a maximum of three years in a degressive manner;

(b)
the amounts paid by the mutual fund as financial
compensation to farmers. In addition, the financial contribution may relate to
interest on commercial loans taken out by the mutual fund for the purpose of
paying the financial compensation to farmers in case of crisis.

No contribution by public funds shall be made
to initial capital stock.

4.
As regards animal diseases, financial
compensation under Article 37(1)(b) may only be granted in respect of diseases
mentioned in the list of animal diseases established by the World Organisation
for Animal Health and/or in the Annex to Decision 90/424/EEC.

5.
Support shall be limited to the maximum support
rate laid down in Annex I.

Member States may limit the costs that are
eligible for support by applying:

(a)
ceilings per fund;

(b)
appropriate per unit ceilings.

Article 40

Income stabilisation tool

1.
Support under Article 37(1)(c) may only be
granted where the drop of income exceeds 30% of the average annual income of
the individual farmer in the preceding three-year period or a three-year
average based on the preceding five-year period excluding the highest and
lowest entry. Income for the purposes of Article 37(1)(c) shall refer to the
sum of revenues the farmer receives from the market, including any form of
public support, deducting input costs. Payments by the mutual fund to farmers
shall compensate for not more than 70% of the income lost.

2.
In order to be eligible for support the mutual
fund concerned shall:

(a)
be accredited by the competent authority in
accordance with national law;

(b)
have a transparent policy towards payments into
and withdrawals from the fund;

(c)
have clear rules attributing responsibilities
for any debts incurred.

3.
Member States shall define the rules for the
constitution and management of the mutual funds, in particular for the granting
of compensation payments to farmers in the event of crisis and for the
administration and monitoring of compliance with these rules.

4.
The financial contributions referred to in
Article 37(1)(c) may only relate to the amounts paid by the mutual fund as
financial compensation to farmers. In addition, the financial contribution may
relate to interest on commercial loans taken out by the mutual fund for the
purpose of paying the financial compensation to farmers in case of crisis.

No contribution by public funds shall be made
to initial capital stock.

5.
Support shall be limited to the maximum rate
laid down in Annex I.

Article 41

Rules on the implementation of the
measures

The Commission shall, by means of implementing
acts, adopt rules on the implementation of the measures in this section
concerning:

(a)
procedures for selection of authorities or
bodies offering farm and forestry advisory services, farm management or farm
relief services and the degressivity of the aid under the advisory services
measure referred to in Article 16 ;

(b)
the assessment by the Member State of the
progress of the business plan, payment options as well as modalities for access
to other measures for young farmers under the farm and business development
measure referred to in Article 20;

(c)
demarcation with other measures, conversion to
units other than those used in Annex I, calculation of transaction costs and
conversion or adjustment of commitments under the agri-environment-climate
measure referred to in Article 29, the organic farming measure referred to in
Article 30 and the forest-environmental services and forest conservation
measure referred to in Article 35;

(d)
the possibility of using standard assumptions of
income foregone under the measures of Articles 29 to 32, 34 and 35 and criteria
for its calculation;

(e)
calculation of the amount of support where an
operation is eligible for support under more than one measures.

These implementing acts shall be adopted in
accordance with the examination procedure referred to in Article 91.

Section
2

Leader

Article 42

LEADER local action groups

1.
In addition to the tasks referred to in Article
30 of Regulation (EU) No [CSF/2012] local action groups may also perform
additional tasks delegated to them by the Managing Authority and/or the paying agency.

2.
Local action groups may request the payment of
an advance from the competent paying agency if such possibility is provided for
in the rural development programme. The amount of the advances shall not exceed
50% of the public support related to the running and animation costs.

Article 43

Preparatory support

1.
Support under Article 31(a) of Regulation (EU)
No [CSF/2012] shall cover:

(a)
a “LEADER start-up kit” consisting of capacity
building actions for groups who did not implement LEADER in the 2007-2013
programming period and support for small pilot projects;

(b)
capacity building, training and networking with
a view to preparing and implementing a local development strategy.

2.
The Commission shall be empowered to adopt
delegated acts in accordance with Article 90 concerning the definition of the
eligible costs of the actions under paragraph 1.

Article 44

LEADER co-operation activities

1.
The support referred to in Article 31(c) of
Regulation (EU) No [CSF/2012] shall be granted to:

(a)
inter-territorial or transnational co-operation
projects;

“Inter-territorial co-operation” means
co-operation within a Member State. “Transnational co-operation” means
co-operation between territories in several Member States and with territories
in third countries.

(b)
preparatory technical support for
inter-territorial and transnational co-operation projects, on condition that
local action groups can demonstrate that they are envisaging the implementation
of a concrete project.

2.
Apart from other local action groups, the
partners of a local action group under the EAFRD may be:

(a)
a local public-private partnership on a rural
territory that is implementing a local development strategy within or outside
the Union;

(b)
a local public-private partnership on a non
rural territory that is implementing a local development strategy.

3.
In cases where co-operation projects are not
selected by the local action groups, Member States shall establish a system of
ongoing application for co-operation projects.

They shall make public the national or regional
administrative procedures concerning the selection of transnational
co-operation projects and a list of eligible costs at the latest two years
after the date of approval of their rural development programmes.

Approval of co-operation projects shall take
place no later than four months after the date of submission of the project.

4.
Member States shall communicate to the Commission
the approved transnational co-operation projects.

Article 45

Running costs and animation

1.
Running costs referred to in Article 31(d) of
Regulation (EU) No [CSF/2012] are costs linked to the management of the
implementation of the local development strategy through the local action
group.

2.
Costs for the animation of the territory
referred to in Article 31(d) of Regulation (EU) No [CSF/2012] are costs to
cover actions to inform about the local development strategy as well as project
development tasks.

3.
The Commission shall be empowered to adopt
delegated acts in accordance with Article 90 concerning the definition of the
eligible costs of the actions under paragraph 2.

Chapter II
Common provisions for several measures

Article 46

Investments

1.
In order to be eligible for EAFRD support
investment operations shall be preceded by an assessment of the expected
environmental impact in accordance with legislation specific to that kind of
investment where the investment is likely to have negative effects on the environment.

2.
Eligible expenditure shall be limited to:

(a)
the construction, acquisition, including
leasing, or improvement of immovable property;

(b)
the purchase or lease purchase of new machinery
and equipment including computing software up to the market value of the asset;

(c)
general costs linked to expenditure referred to
in points (a) and (b), such as architect, engineer and consultation fees,
feasibility studies, the acquisition of patents or licenses.

3.
In the case of irrigation, only investments that
lead to a reduction of previous water use by at least 25% shall be considered
as eligible expenditure. By way of derogation, in the Member States that
adhered to the Union from 2004 onwards investments in new irrigation
installations can be considered eligible expenditure in cases where an
environmental analysis provides evidence that the investment concerned is
sustainable and has no negative environmental impact.

4.
In the case of agricultural investments, the
purchase of agricultural production rights, payment entitlements, animals,
annual plants and their planting shall not be eligible for investment support.
However, in case of restoration of agricultural production potential damaged by
natural disasters in accordance with Article 19(1)(b), expenditure for the
purchase of animals may be eligible expenditure.

5.
Beneficiaries of investment related support may
request the payment of an advance of up to 50% of the public aid related to the
investment from the competent paying agencies if that option is included in the
rural development programme.

6.
The Commission shall be empowered to adopt
delegated acts in accordance with Article 90 concerning the conditions under
which other costs connected with leasing contracts, second hand equipment and
simple replacement investments may be considered as eligible expenditure.

Article 47

Rules for area related payments

1.
The number of hectares to which a commitment
pursuant to Articles 29, 30 and 35 applies may vary from year to year where:

(a)
this possibility is provided for in the rural
development programme;

(b)
the commitment in question does not apply to
fixed parcels; and

(c)
the achievement of the commitment's objective is
not jeopardised.

2.
Where all or part of the land under commitment
or the entire holding is transferred to another person during the period for
which a commitment given as a condition for the grant of assistance runs, the
commitment may be taken over for the remainder of the period by that other
person or expire.

3.
Where a beneficiary is unable to continue to
comply with commitments given because the holding is re-parcelled or is the
subject of public land consolidation measures or land consolidation measures
approved by the competent public authorities, Member States shall take the
measures necessary to allow the commitments to be adapted to the new situation
of the holding. If such adaptation proves impossible, the commitment shall
expire.

4.
Reimbursement of the aid received shall not be
required in cases of force majeure.

5.
Paragraph 2 as regards cases of transfer of the
entire holding and paragraph 4 shall also apply to commitments under Article 34.

6.
The Commission shall be empowered to adopt
delegated acts in accordance with Article 90 concerning conditions applicable
in case of partial transfer of a holding, the definition of other situations in
which reimbursement of the aid shall not be required.

Article 48

Revision clause

A revision clause shall be provided for operations
undertaken pursuant to Articles 29, 30, 34 and 35 in order to ensure their
adjustment in the case of amendments of the relevant mandatory standards,
requirements or obligations referred to in those Articles beyond which the
commitments have to go. Operations undertaken pursuant to Articles 29, 30 and 35
which extend beyond the current programming period shall contain a revision
clause in order to allow for their adjustment to the legal framework of the
following programming period.

If such adjustment is not accepted by the
beneficiary, the commitment shall expire.

Article 49

Project selection

1.
The Managing Authority of the rural development
programme shall define selection criteria for operations under all measures
following consultation with the Monitoring Committee. Selection criteria shall
aim to ensure equal treatment of applicants, better use of financial resources
and targeting of measures in accordance with the Union priorities for rural
development. In defining selection criteria the principle of proportionality
shall be taken into account in relation to small grants.

2.
The Member State authority responsible for project
selection shall ensure that projects are selected in accordance with the
selection criteria referred to in paragraph 1 and according to a transparent
and well documented procedure. Application of selection criteria shall not be
compulsory in the case of the measures referred to in Articles 29 to 32, 34 and
35 except where available funds are not sufficient to cover all eligible
applicants.

3.
Where appropriate, the beneficiaries may be
selected on the basis of calls for proposals, applying criteria of economic and
environmental efficiency.

Article 50

Rural area definition

For the purposes of this Regulation the
Managing Authority shall define "rural area" at programme level.

Chapter III
Technical assistance and networking

Article 51

Funding technical assistance

1.
In accordance with Article 6 of Regulation (EU)
No HR/2012 the EAFRD may use up to 0,25% of its annual allocation to finance the
tasks referred to in Article 51 of Regulation (EU) No [CSF/2012], including the
costs for setting up and operating the European network for rural development
referred to in Article 52, the EIP network referred to in Article 53 and the
European evaluation network for rural development referred to in Article 54, at
the Commission's initiative and/or on its behalf.

The EAFRD may also finance the actions provided
for in Article 41(2) of Regulation (EU) No XXXX/XXXX [quality regulation], in
relation to Union quality scheme indications and symbols.

Those actions shall be carried out in
accordance with Article 53(2) of Regulation (EC, Euratom) No 1605/2002 and any
other provisions of that Regulation and of its implementing provisions
applicable to this form of execution of the budget.

2.
A sum of EUR 30 million shall be withdrawn from
the allocation referred to in paragraph 1 and used to finance the prize for
innovative, local cooperation referred to in Article 56.

3.
At the initiative of the Member States up to 4%
of the total amount of each rural development programme may be devoted to the
tasks referred to in Article 52 of Regulation (EC) No [CSF/2012], as well as
costs related to preparatory work for the delimitation of areas facing natural
constraints referred to in Article 33(3).

Costs relating to the certification body
referred to in Article 9 of Regulation (EU) No HR/2012 shall not be eligible
under this paragraph.

Within the 4% limit an amount shall be reserved
for establishing and operating the national rural network referred to in
Article 55.

4.
The Commission shall be empowered to adopt
delegated acts in accordance with Article 90 concerning the further definition
of control actions that shall be eligible for support under paragraph 3.

Article 52

European network for rural development

1.
A European network for rural development for the
networking of national networks, organisations, and administrations active in
the field of rural development at Union level shall be put in place in
accordance with Article 51(1).

2.
Networking through the European network for rural
development shall aim to:

(a)
increase the involvement of stakeholders in the
implementation of rural development`

(b)
improve the quality of rural development
programmes`

(c)
play a role in informing the broader public on
the benefits of rural development policy.

3.
The tasks of the network shall be to:

(a)
collect, analyse and disseminate information on
action in the field of rural development;

(b)
collect, consolidate and disseminate at Union
level good rural development practices;

(c)
set up and run thematic groups and/or workshops
with a view to facilitating the exchange of expertise and to supporting
implementation and monitoring and further development of rural development
policy;

(d)
provide information on developments in the rural
areas of the Union and in third countries;

(e)
organise meetings and seminars at Union level
for those actively involved in rural development;

(f)
support the national networks and transnational
co-operation initiatives;

(g)
specifically for local action groups:

(i)      create synergies with the activities
carried out on national and/or regional level by the respective networks with
regard to capacity building actions and exchange of experience; and

(ii)      cooperate with the networking and
technical support bodies for local development set up by the ERDF, the ESF and
the EMFF as regards their local development activities and transnational co-operation.

4.
The Commission shall, by means of implementing
acts, set out the organisational structure and operation of the European network
for rural development network. Those implementing acts shall be adopted in
accordance with the examination procedure referred to in Article 91.

Article 53

EIP network

1.
A EIP network shall be put in place to support
the EIP for agricultural productivity and sustainability referred to in Article
61, in accordance with Article 51(1). It shall enable the networking of operational
groups, advisory services and researchers

2.
The tasks of the EIP network shall be to:

(a)
provide a help desk function and provide
information to key actors concerning the EIP;

(b)
animate discussions at the level of the
programme in view of encouraging the setting up of operational groups;

(c)
screen and report on research results and
knowledge relevant to the EIP;

(d)
collect, consolidate and disseminate good
practice relevant to innovation;

(e)
organise conferences and workshops and
disseminate information in the field of the EIP.

3.
The Commission shall, by means of implementing
acts, set out the organisational structure and operation of the EIP network.
Those implementing acts shall be adopted in accordance with the examination
procedure referred to in Article 91.

Article 54

European evaluation network for rural development

1.
A European evaluation network for rural development
shall be put in place to support the evaluation of rural development programmes
in accordance with Article 51(1). It shall enable the networking of those
involved in the evaluation of rural development programmes.

2.
The aim of the European evaluation network for rural
development shall be to facilitate the exchange of expertise and good practices
on evaluation methodologies, to develop evaluation methods and tools, to
provide support on evaluation processes, and on data collection and
management.

3.
The Commission shall, by means of implementing
acts, set out the organisational structure and operation of the European evaluation
network for rural development. Those implementing acts shall be adopted in
accordance with the examination procedure referred to in Article 91.

Article 55

National rural network

1.
Each Member State shall establish a national
rural network, which groups the organisations and administrations involved in
rural development. The partnership referred to in Article 5 of Regulation (EU)
No [CSF/2012] shall also be part of the national rural network.

Member States with regional programmes may
submit for approval a specific programme for the establishment and the
operation of their national rural network.

2.
Networking by the national rural network shall
aim to:

(a)
increase the involvement of stakeholders in the
implementation of rural development;

(b)
improve the quality of rural development
programmes;

(c)
inform the broader public and potential
beneficiaries on rural development policy;

(d)
foster innovation in agriculture

3.
EAFRD support under Article 51(3) shall be used:

(a)
for the structures needed to run the network;

(b)
for the preparation and implementation of an
action plan containing at least the following:

(i)      network management;

(ii)      involvement of stakeholders in
support of programme design;

(iii)     support for monitoring, in
particular through collection and sharing of relevant feed-back,
recommendations and analysis notably from the Monitoring Committees referred to
in Article 41 of Regulation (EU) No [CSF/2012]. Local action groups shall also
be supported by the national rural network for the monitoring and evaluation of
the local development strategies;

(iv)     provision of training activities for
programme implementing bodies and local action groups in the process of
formation;

(v)     collection of examples of projects
covering all priorities of the rural development programmes;

(vi)     ongoing studies and analysis;

(vii)    networking activities for local action
groups and in particular technical assistance for inter-territorial and
transnational co-operation, facilitation of co-operation among local action
groups and the search of partners for the measure referred to in Article 36;

(viii)   facilitation of exchanges of practice
and experience among advisers and/or advisory services;

(ix)     networking activities for innovation;

(x)     a communication plan including
publicity and information concerning the rural development programme in
agreement with the Managing Authorities and information and communication
activities aimed at a broader public.

(xi)     provision to participate in and
contribute to the activities of the European rural development network;

(c)
the setting up of a pre-selection board of
independent experts and the process of pre-selection of applications for the
prize for innovative local co-operation referred to in Article 58(2).

4.
The Commission shall, by means of implementing
acts, adopt rules for the establishment and operation of national rural
networks. Those implementing acts shall be adopted in accordance with the
examination procedure referred to in Article 91.

Chapter IV
Prize for innovative, local cooperation in rural areas

Article 56

Prize for innovative, local cooperation in
rural areas

The funds referred to in Article 51(2)
shall be used for financing the award of a prize to cooperation projects
involving at least two entities located in different Member States that realise
an innovative, local concept.

Article 57

Call for proposals

1.
Starting at the latest in 2015 and every year
thereafter the Commission shall launch a call for proposals in view of awarding
the prize referred to in Article 56. The last call for proposals shall be
launched no later than in 2019.

2.
The call for proposals shall indicate a theme
for the proposals which shall be related to one of the Union priorities for
rural development. The theme shall also be appropriate for implementation
through cooperation at transnational level.

3.
The call for proposals shall be open to both local
action groups and individual entities cooperating for the purpose of the
specific project.

Article 58

Selection procedure

1.
Applications for the prize shall be submitted by
applicants in all Member States to the respective national rural network, which
will be responsible for pre-selecting applications.

2.
National rural networks shall set up, from
within their members, a pre-selection board of independent experts in order to
pre-select applications. Pre-selection of applications shall be done on the
basis of the exclusion, selection and award criteria defined in the call for
proposals. Each National Rural Network shall pre-select no more than 10
applications and shall transmit them to the Commission.

3.
The Commission shall be responsible for the
selection of fifty winning projects among the applications pre-selected in all
the Member States. The Commission shall set up an ad hoc steering group
composed of independent experts. This steering group shall prepare the
selection of the winning applications on the basis of the exclusion, selection
and award criteria defined in the call for proposals.

4.
The Commission shall, by means of an
implementing act, decide on the list of projects to which the prize is awarded.

Article 59

Financial Prize – conditions and payment

1.
In order for projects to be eligible for the
prize, the time required for their completion shall not exceed two years from
the date of adoption of the implementing act awarding the prize. The time frame
of realisation of the project shall be defined in the application.

2.
The prize shall be granted in the form of a lump
sum payment. The amount of the payment shall be determined by the Commission,
by means of implementing acts, in line with criteria defined in the call for
proposals and taking into account the estimated cost of realisation of the
project indicated in the application. The maximum prize per project shall not
exceed 100 000 euro.

3.
Member States shall pay the award to winning
applicants after verifying that the project has been completed. The relevant
expenditure shall be reimbursed by the Union to Member States in accordance
with the provisions of Section 4 of Chapter II of Title IV of Regulation (EU)
No HR/2012. Member States may decide to pay fully or partly the sum of the
prize to the winning applicants before having verified the completion of the
project but they shall, in this case, bear the responsibility for the
expenditure until the completion of the project is verified.

Article 60

Rules on the procedure, timetables and
setting up of the steering-group

The Commission shall by means of
implementing acts lay down detailed provisions on the procedure and timetables
for the selection of projects and rules on the setting up of the steering group
of independent experts referred to in Article 58(3). Those implementing acts
shall be adopted in accordance with the examination procedure referred to in Article
91.

TITLE IV
EIP for agricultural productivity and sustainability

Article 61

Aims

1.
The EIP for agricultural productivity and
sustainability shall:

(a)
promote a resource efficient, productive, low
emission, climate friendly and resilient agricultural sector, working in
harmony with the essential natural resources on which farming depends;

(b)
help deliver a steady supply of food, feed and
biomaterials, both existing and new ones;

(c)
improve processes to preserve the environment,
adapt to climate change and mitigate it;

(d)
build bridges between cutting-edge research
knowledge and technology and farmers, businesses and advisory services.

2.
The EIP for agricultural productivity and
sustainability shall seek to achieve its aims by:

(a)
creating added value by better linking research
and farming practice and encouraging the wider use of available innovation
measures;

(b)
promoting the faster and wider transposition of
innovative solutions into practice; and

(c)
informing the scientific community about the
research needs of farming practice.

3.
The EAFRD shall contribute to the aims of the
EIP for agricultural productivity and sustainability through support, in accordance
with Article 36, of the EIP operational groups referred to in Article 62 and
the EIP Network referred to in Article 53.

Article 62

Operational groups

1.
EIP operational groups shall form part of the
EIP for agricultural productivity and sustainability. They shall be set up by
interested actors such as farmers, researchers, advisors and businesses
involved in the agriculture and food sector.

2.
EIP operational groups shall establish internal
procedures that ensure transparency in their operation and avoid situations of
conflict of interest.

Article 63

Tasks of operational groups

1.
EIP operational groups shall draw up a plan that
contains the following:

(a)
a description of the innovative project to be
developed, tested, adapted or implemented;

(b)
a description of the expected results and the
contribution to the EIP objective of enhancing productivity and sustainable
resource management.

2.
In implementing their innovative projects
operational groups shall:

(a)
make decisions on the elaboration and
implementation of innovative actions; and

(b)
implement innovative actions through measures
financed through the rural development programmes.

3.
Operational groups shall disseminate the results
of their project, in particular through the EIP network.

TITLE V
Financial provisions

Article 64

Resources and their distribution

1.
The total amount of Union support for rural
development under this Regulation for the period from 1 January 2014 to 31
December 2020, its annual breakdown and the minimum amount to be concentrated
in less developed regions shall be fixed by the European Parliament and the
Council, on a proposal from the Commission in accordance with the multiannual
financial framework for the years 2014 to 2020 and the Interinstitutional
Agreement on cooperation in budgetary matters and on sound financial management[34] for the same period.

2.
0,25% of the resources referred to in paragraph
1 shall be devoted to technical assistance for the Commission as referred to in
Article 51(1).

3.
For the purpose of their programming and
subsequent inclusion in the general budget of the Union, the amounts referred
to in paragraph 1 shall be indexed at 2% per year.

4.
The Commission shall, by means of an
implementing act, make an annual breakdown by Member State of the amounts
referred to in paragraph 1, after deduction of the amount referred to in
paragraph 2 and taking into account the transfer of funds referred to in
Article 14(2) of Regulation (EU) No DP/2012. In making the annual breakdown the
Commission shall take into account:

(a)
objective criteria linked to the objectives
referred to in Article 4; and

(b)
past performance.

5.
In addition to the amounts referred to in
paragraph 4, the implementing act referred to in the same paragraph shall also include
the funds transferred to the EAFRD in application of Articles 7(2) and 14(1) of
Regulation (EU) No DP/2012.

6.
For the purposes of the allocation of the
performance reserve referred to in Article 20(2) of Regulation (EU) No [CSF/2012],
available assigned revenue collected in accordance with Article 45 of
Regulation (EU) No HR/2012 for the EAFRD shall be added to the amounts referred
to in Article 18 of Regulation (EU) No [CSF/2012]. It shall be allocated to
Member States proportionally to their share of the total amount of support from
the EAFRD.

Article 65

Fund contribution

1.
The decision approving a rural development
programme shall set the maximum contribution from the EAFRD to the programme.
The decision shall clearly identify, where necessary, the appropriations
allocated to the less developed regions.

2.
The EAFRD contribution shall be calculated on
the basis of the amount of eligible public expenditure.

3.
The rural development programmes shall establish
a single EAFRD contribution rate applicable to all measures. Where applicable,
a separate EAFRD contribution rate shall be established for less developed
regions, and for outermost regions and the smaller Aegean islands within the
meaning of Regulation (EEC) No 2019/93. The maximum EAFRD contribution rate
shall be:

(a)
85% of the eligible public expenditure in the less
developed regions, the outermost regions and the smaller Aegean islands within
the meaning of Regulation (EEC) No 2019/93 ;

(b)
50% of the eligible public expenditure in the
other regions.

The minimum EAFRD contribution rate shall be
20%.

4.
By way of derogation from paragraph 3, the
maximum EAFRD contribution shall be:

(a)
80% for the measures referred to in Articles 15,
28 and 36, for the LEADER local development referred to in Article 28 of
Regulation (EU) No [CSF/2012] and for operations under Article 20(1)(a)(i). It
may be increased to 90% for the programmes of less developed, the outermost
regions and the smaller Aegean islands within the meaning of Regulation (EEC)
No 2019/93;

(b)
100% for operations receiving funding under
Article 66.

5.
At least 5% of the total EAFRD contribution to
the rural development programme shall be reserved for Leader.

6.
An expenditure co-financed by the EAFRD shall
not be co-financed by way of a contribution from the Structural Funds, the
Cohesion Fund or any other Union financial instrument.

7.
Public expenditure on aid to enterprises shall
comply with the aid limits laid down in respect of State aid, unless this
Regulation provides otherwise.

Article 66

Funding for operations with a
significant contribution to innovation

The funds
transferred to the EAFRD in application of Article 7(2) of Regulation (EU) No
DP/2012 shall be reserved for operations which provide a significant
contribution to innovation relevant to agricultural productivity and
sustainability, including climate mitigation or adaptation.

Article 67

Eligibility of expenditure

1.
By way of derogation from Article 55(7) of
Regulation (EC) No [CSF/2012], in cases of emergency measures due to natural
disasters, the rural development programmes may
provide that eligibility of expenditure relating to programme
changes may start from the date when the natural disaster occurred.

2.
Expenditure shall be eligible for an EAFRD
contribution only where incurred for operations decided upon by the Managing
Authority of the programme in question or under its responsibility, in
accordance with selection criteria referred to in Article 49.

With the exception of general costs as defined
in Article 46(2)(c), in respect of investment operations under measures
falling within the scope of Article 42 of the Treaty, only expenditure which
has been incurred after an application has been submitted to the competent
authority shall be considered eligible.

Member States may provide in their programmes
that only expenditure which has been incurred after the application for support
has been approved by the competent authority shall be eligible.

3.
Paragraphs 1 and 2 shall not apply to Article 51(1)
and (2).

4.
Payments by beneficiaries shall be supported by
invoices and documents proving payment. Where this cannot be done, payments
shall be supported by documents of equivalent probative value, except for forms
of support under Article 57(1)(b), (c) and (d) of Regulation (EU) [CSF/2012].

Article 68

Eligible expenditure

1.
Where running costs are covered by support under
this Regulation the following types of costs shall be eligible:

(a)
operating costs;

(b)
personnel costs;

(c)
training costs;

(d)
costs linked to public relations;

(e)
financial costs;

(f)
networking costs.

2.
Studies shall only be eligible expenditure where
they are linked to a specific operation under the programme or the specific
objectives and targets of the programme.

3.
Contributions in kind in the form of provision
of works, goods, services, land and real estate for which no cash payment
supported by invoices or documents of equivalent probative value has been made,
may be eligible for support provided that the conditions of Article 59 of
Regulation (EU) No [CSF/2012] are fulfilled.

4.
Indirect costs shall be eligible for support
under the measures referred to in Articles 15, 16, 19, 21, 25 and 36.

Article 69

Verifiability and controllability of
measures

1.
Member States shall ensure that all the rural
development measures they intend to implement are verifiable and controllable.
To this end the Managing Authority and the paying agency of each rural
development programme shall provide an ex ante assessment of the verifiability
and controllability of the measures to be included in the rural development
programme. The Managing Authority and paying agency shall also undertake the
assessment of verifiability and controllability of measures during the
implementation of the rural development programme. Ex ante assessment
and assessment during the implementation period shall take into account the
results of controls in the previous and current programming period. Where the
assessment reveals that the requirements of verifiability and controllability
are not met, the measures concerned shall be adjusted accordingly.

2.
Where aid is granted on the basis of standard
costs or additional costs and income foregone, Member States shall ensure that
the relevant calculations are adequate and accurate and established in advance
on the basis of a fair, equitable and verifiable calculation. To this end, a
body that is independent from the authorities responsible for the calculations and
possesses the appropriate expertise shall provide a certificate confirming the
adequacy and accuracy of the calculations. That certificate shall be included
in the rural development programme.

Article 70

Advances

1.
Payment of advances shall be subject to the
establishment of a bank guarantee or an equivalent guarantee corresponding to
100% of the amount of the advance. As regards public beneficiaries, advances
shall be paid to municipalities, regional authorities and associations thereof,
as well as to public law bodies.

A facility provided as a guarantee by a public
authority shall be considered equivalent to the guarantee referred to in the
first subparagraph, provided that the authority undertakes to pay the amount
covered by that guarantee should entitlement to the advance paid not be
established.

2.
The guarantee may be released when the competent
paying agency establishes that the amount of actual expenditure corresponding
to the public contribution related to the operation exceeds the amount of the
advance.

TITLE VI
Management, control and publicity

Article 71

Responsibilities of the Commission

To ensure, in the context of shared
management, sound financial management in accordance with Article 317 of the
Treaty, the Commission shall carry out the measures and controls laid down in
Regulation (EU) No HR/2012.

Article 72

Responsibilities of the Member States

1.
Member States shall adopt all the legislative,
statutory and administrative provisions in accordance with Article 60(1) of
Regulation (EU) No HR/2012 in order to ensure that the Union’s financial
interests are effectively protected.

2.
Member States shall designate, for each rural
development programme, the following authorities:

(a)
the Managing Authority, which may be either a
public or private body acting at national or regional level, or the Member
State itself when it carries out that task, to be in charge of the management
of the programme concerned;

(b)
the accredited paying agency within the meaning
of Article 7 of Regulation (EU) No HR/2012;

(c)
the certification body within the meaning of
Article 9 of Regulation (EU) No HR/2012.

3.
Member States shall ensure for each rural
development programme that the relevant management and control system has been
set up ensuring a clear allocation and separation of functions between the
Managing Authority and other bodies. Member States shall be responsible for
ensuring that the systems function effectively throughout the programme period.

4.
Member States shall clearly define the tasks of
the managing authority, the Paying Agency and, the local action groups under
LEADER as regards to the application of eligibility and
selection criteria and the project selection procedure.

Article 73

Managing Authority

1.
The Managing Authority shall be responsible for
managing and implementing the programme in an
efficient, effective and correct way and in particular for:

(a)
ensuring that there is an appropriate secure
electronic system to record, maintain, manage and report statistical
information on the programme and its implementation required for the purposes
of monitoring and evaluation and, in particular, information required to
monitor progress towards the defined objectives and priorities;

(b)
providing the Commission, on a quarterly basis,
with relevant indicator data on operations selected for funding, including key
characteristics of the beneficiary as well as the project;

(c)
ensuring that beneficiaries and other bodies
involved in the implementation of operations:

(i)      are informed of their obligations
resulting from the aid granted, and maintain either a separate accounting
system or an adequate accounting code for all transactions relating to the
operation;

(ii)      are aware of the requirements
concerning the provision of data to the Managing Authority and the recording of
outputs and results;

(d)
ensuring that the ex ante evaluation
referred to in Article 48 of Regulation (EU) No [CSF/2012] conforms to the evaluation and monitoring system and accepting and
submitting it to the Commission;

(e)
ensuring that the evaluation plan referred to in
Article 49 of Regulation (EU) No [CSF/2012] is in place, that the ex post programme evaluation referred
to in Article 50 of Regulation (EU) No [CSF/2012] is conducted within the time limits laid down in that Regulation, ensuring
that such evaluations conform to the monitoring and evaluation system and
submitting them to the Monitoring Committee and the Commission;

(f)
providing the Monitoring Committee with the
information and documents needed to monitor implementation of the programme in
the light of its specific objectives and priorities;

(g)
drawing up the annual progress report, including
aggregate monitoring tables, and, after approval by the Monitoring Committee,
submitting it to the Commission;

(h)
ensuring that the paying agency receives all
necessary information, in particular on the procedures operated and any
controls carried out in relation to operations selected for funding, before
payments are authorised;

(i)
ensuring publicity for the programme, including
through the National Rural Network, by informing potential beneficiaries,
professional organisations, the economic and social partners, bodies involved
in promoting equality between men and women, and the non-governmental
organisations concerned, including environmental organisations, of the
possibilities offered by the programme and the rules for gaining access to
programme funding as well as by informing beneficiaries of the Union
contribution and the general public on the role played by the Union in the
programme.

2.
The Member State or the Managing Authority may
designate one or more intermediate bodies including local authorities, regional
development bodies or non-governmental organisations, to carry out the
management and implementation of rural development operations.

When a part of its tasks is delegated to
another body, the Managing Authority shall retain full responsibility for the
efficiency and correctness of management and implementation of those tasks. The
Managing Authority shall ensure that appropriate provisions are in place to
allow the other body to obtain all necessary data and information for execution
of these tasks.

3.
Where a thematic sub-programme, as referred to
in Article 8, is included in the rural development programme, the Managing
Authority may designate one or more intermediate bodies, including local authorities,
local action groups or non-governmental organisations, to carry out the management and implementation of that strategy. Paragraph 2
shall apply in this case.

The managing authority shall ensure that
operations and outputs of this thematic sub-programme are identified separately
for the purposes of the monitoring and evaluation system referred to in Article
74.

TITLE VII
Monitoring and evaluation

Chapter I
General provisions

Section
1
Establishment and Objectives of a monitoring and evaluation system

Article 74

Monitoring and evaluation system

In accordance with this Title, a common
monitoring and evaluation system shall be drawn up in co-operation between the
Commission and the Member States and shall be adopted by the Commission by
means of implementing acts adopted in accordance with the examination procedure
referred to in Article 91.

Article 75

Objectives

The monitoring and evaluation system shall
aim:

(a)
to demonstrate the progress and achievements of
rural development policy and assess the impact, effectiveness, efficiency and
relevance of rural development policy interventions;

(b)
to contribute to better targeted support for
rural development;

(c)
to support a common learning process related to
monitoring and evaluation.

Section 2
Technical provisions

Article 76

Common indicators

1.
A list of common indicators relating to the
initial situation as well as to the financial execution, outputs, results and
impact of the programme and applicable to each programme shall be specified in
the monitoring and evaluation system provided for in Article 74 to allow for
aggregation of data at Union level.

2.
The common indicators shall be linked to the
structure and objectives of the rural development policy framework and shall
allow assessment of the progress, efficiency and effectiveness of policy
implementation against objectives and targets at Union, national and programme
level.

Article 77

Electronic Information System

1.
Key information on the implementation of the
programme, on each operation selected for funding, as well as on completed
operations, needed for monitoring and evaluation, including the key
characteristics of the beneficiary and the project, shall be recorded and
maintained electronically.

2.
The Commission shall ensure that there is an
appropriate secure electronic system to record, maintain and manage key
information and report on monitoring and evaluation.

Article 78

Provision of information

Beneficiaries of support under rural
development measures and local action groups shall undertake to provide to the Managing
Authority and/or to appointed evaluators or other bodies delegated to perform
functions on its behalf, all the information necessary to permit monitoring and
evaluation of the programme, in particular in relation to meeting specified
objectives and priorities.

Chapter II
Monitoring

Article 79

Monitoring procedures

1.
The Managing Authority and the Monitoring
Committee referred to in Article 41 of Regulation (EU) No [CSF/2012] shall
monitor the quality of programme implementation.

2.
The Managing Authority and the Monitoring
Committee shall carry out monitoring of each rural development programme by
means of financial, output and target indicators.

Article 80

Monitoring Committee

Member States with regional programmes may
establish a national Monitoring Committee to coordinate the implementation of
these programmes in relation to the National Framework and the uptake of
financial resources.

Article 81

Responsibilities of the Monitoring
Committee

1.
The Monitoring Committee shall satisfy itself as
to the performance of the rural development programme and the effectiveness of its
implementation. To that end, in addition to the functions referred to in
Article 43 of Regulation (EU) No [CSF] the Monitoring Committee:

(a)
shall be consulted and issue an opinion, within four
months of the decision approving the programme, on the selection criteria for
financed operations. The selection criteria shall be revised according to
programming needs;

(b)
shall examine the activities and outputs related
to the evaluation plan of the programme;

(c)
shall examine actions in the programme relating
to the fulfilment of ex ante conditionalities;

(d)
shall participate in the National Rural Network
to exchange information on programme implementation;

(e)
shall consider and approve the annual implementation
reports before they are sent to the Commission.

Article 82

Annual implementation report

1.
By 31 May 2016 and by 31 May each subsequent
year until and including 2023, the Member State shall submit to the Commission
an annual implementation report on implementation of the rural development programme
in the previous calendar year. The report submitted in 2016 shall cover the calendar
years 2014 and 2015.

2.
In addition to what is provided in Article 44 of
Regulation (EU) No [CSF/2012] annual implementation reports shall include
information inter alia on financial commitments and expenditure by
measure, and a summary of the activities undertaken in relation to the
evaluation plan.

3.
In addition to what is provided in Article 44 of
Regulation (EU) No [CSF/2012], the annual implementation report submitted in
2017 shall also cover a description of the implementation of any sub-programmes
included within the programme, an assessment of progress made in ensuring an
integrated approach to use of the EAFRD and other EU financial instruments to
support the territorial development of rural areas, including through local
development strategies, and the findings relating to the meeting of the targets
for each priority included in the RD programme.

4.
In addition to what is provided in Article 44 of
Regulation (EU) No [CSF/2012], the annual implementation report submitted in
2019 shall also cover, a description of the implementation of any
sub-programmes included within the programme and an assessment of progress made
in ensuring an integrated approach to use of the EAFRD and other EU financial
instruments to support the territorial development of rural areas, including
through local development strategies.

5.
The Commission shall, by means of implementing
acts, adopt rules concerning the presentation of the annual implementation reports. Those implementing acts shall be adopted in accordance with the
examination procedure referred to in Article 91.

Chapter III
Evaluation

Article 83

General provisions

1.
The Commission shall, by means of implementing
acts, provide for the elements to be contained in the ex ante and ex post
evaluations referred to in Articles 48 and 50 of Regulation (EU) No [CSF/2012]
and establish the minimum requirements for the evaluation plan referred to in
Article 49 of Regulation (EU) No [CSF/2012]. Those implementing acts shall be
adopted in accordance with the examination procedure referred to in Article 91.

2.
Member States shall ensure that the evaluations
conform to the common evaluation approach agreed in accordance with Article 74,
shall organise the production and gathering of the requisite data, and shall
supply the various pieces of information provided by the monitoring system to
the evaluators.

3.
The evaluation reports shall be made available
by the Member States on the internet and by the Commission on the Union
website.

Article 84

Ex ante evaluation

Member States shall ensure that the ex ante
evaluator is engaged from an early stage in the process of development of the
rural development programme, including the development of the analysis referred
to in Article 9(1)(b), the design of the programme’s intervention logic and the
establishment of the programme’s targets.

Article 85

Ex post evaluation

In 2023, an ex post evaluation
report shall be prepared by the Member States for each of their rural
development programmes. This report shall be submitted to the Commission by 31
December 2023 at the latest.

Article 86

Syntheses of evaluations

Syntheses at Union level of the ex ante
and ex post evaluation reports shall be undertaken under the
responsibility of the Commission.

The syntheses of the evaluation reports
shall be completed at the latest by 31 December of the year following the
submission of the relevant evaluations.

TITLE VIII
Competition provisions

Article 87

Rules applying to undertakings

Where support under this Regulation is
granted to forms of co-operation between undertakings, it may be granted only
to such forms of co-operation between undertakings which comply with the
competition rules as they apply by virtue of Articles 143 to 145 of the
Regulation of the European Parliament and the Council (EU) No sCMO/2012.

Article 88

State aid

1.
Save as otherwise provided for in this Title,
Articles 107, 108 and 109 of the Treaty shall apply to support for rural
development by Member States.

2.
Articles 107, 108 and 109 of the Treaty shall
not apply to payments made by Member States pursuant to, and in conformity
with, this Regulation, or to additional national financing referred to in
Article 89, within the scope of Article 42 of the Treaty.

Article 89

Additional national financing

Payments made by the Member States in
relation to operations falling within the scope of Article 42 of the Treaty and
intended to provide additional financing for rural development for which Union
support is granted, shall be notified by Member States and approved by the
Commission in accordance with this Regulation as part of the programming
referred to in Article 7. When assessing these payments, the Commission shall
apply, by way of analogy, the criteria established for the application of
Article 107 of the Treaty. The Member State concerned shall not put its
proposed additional financing for rural development into effect until it has
been approved.

TITLE IX
Commission powers, common provisions and transitional and final provisions

Chapter I
Commission powers

Article 90

Exercise of the delegation

1.
The power to adopt delegated acts is conferred
on the Commission subject to the conditions laid down in this Article.

2.
The power to adopt delegated acts referred to in
this Regulation shall be conferred on the Commission for an indeterminate
period of time from the date of entry into force of this Regulation.

3.
The delegation of power referred to in this
Regulation may be revoked at any time by the European Parliament or by the
Council. A decision to revoke shall put an end to the delegation of the powers
specified in that decision. It shall take effect the day following the
publication of the decision in the Official Journal of the European Union or at
a later date specified therein. It shall not affect the validity of any
delegated acts already in force.

4.
As soon as it adopts a delegated act, the
Commission shall notify it simultaneously to the European Parliament and to the
Council.

5.
A delegated act adopted pursuant to this Regulation
shall enter into force only if no objection has been expressed either by the
European Parliament or the Council within a period of two months of
notification of that act to the European Parliament and the Council or if,
before the expiry of that period, the European Parliament and the Council have
both informed the Commission that they will not object. That period shall be
extended by two months at the initiative of the European Parliament or of the
Council.

Article 91

Committee procedure

1.
The Commission shall be assisted by a committee
called "Rural Development Committee". That Committee shall be a
committee within the meaning of Regulation (EU) No 182/2011.

2.
Where reference is made to this paragraph,
Article 5 of Regulation (EU) No 182/2011 shall apply.

Chapter
II

Common
provisions

Article 92

Exchange of information and documents

The Commission, in collaboration with the
Member States, shall establish an information system to permit the secure
exchange of data of common interest between the Commission and each Member
State. The Commission shall, by means of implementing
acts, adopt rules for the operation of that system. Those implementing acts
shall be adopted in accordance with the examination procedure referred to in Article 91.

Article 93

General CAP provisions

Regulation (EU) No HR/2012 and the
provisions adopted pursuant to it shall apply in relation to the measures set
out in this Regulation.

Chapter III

Transitional and final provisions

Article 94

Repeal

Regulation (EC) No 1698/2005 is repealed.

Regulation (EC) No 1698/2005 shall continue
to apply to operations implemented pursuant to programmes approved by the
Commission under that Regulation before 1 January 2014.

Article 95

Transitional provisions

In order to facilitate the transition from
the system established by Regulation (EC) No 1698/2005 to the system
established by this Regulation, the Commission shall be empowered to adopt
delegated acts in accordance with Article 90 concerning the conditions under
which support approved by the Commission under Regulation (EC) No 1698/2005 may
be integrated into support provided for under this Regulation, including for
technical assistance and for the ex-post evaluations.

Article 96

Entry into force and application

This Regulation shall enter into force on
the twentieth day following that of its publication in the Official Journal
of the European Union.

It shall apply from 1 January 2014.

This Regulation shall be binding
in its entirety and directly applicable in all Member States.

Done at ,

For the European Parliament                       For
the Council

The
President                                                 The President

ANNEX I
Amounts and support rates

Article || Subject || Maximum amount in EUR or rate ||

16(8) || Advisory services, farm management and farm relief services || 1.500 200.000 || Per advice Per three years for the training of advisors

17(3) || Quality schemes or agricultural products and foodstuffs || 3.000 || Per holding per year

|| || ||

18(3) || Investment in physical assets || 50% 75% 65% 40% 50% 75% 65% 40% || Agricultural sector Of the amount of eligible investment in less developed regions Of the amount of eligible investment in outermost regions Of the amount of eligible investment in the smaller Aegean islands Of the amount of eligible investment in other regions The above rates may be increased by 20%, provided that maximum combined support does not exceed 90%, for: - Young farmers setting up - Collective investments and integrated projects - Areas facing natural constraints as referred to in Article 33. - Operations supported in the framework of the EIP Processing and marketing of Annex I products Of the amount of eligible investment in less developed regions Of the amount of eligible investment in outermost regions Of the amount of eligible investment in the smaller Aegean islands Of the amount of eligible investment in other regions The above rates may be increased by 20%, provided that maximum combined support does not exceed 90%, for operations supported in the framework of the EIP

19(5) || Restoring agricultural production potential damaged by natural disasters and introduction of appropriate prevention actions || 80% || Of the amount of eligible investment costs for prevention operations carried out by individual farmers.

20(6) || Farm and business development || 70.000 70.000 15.000 || Per young farmer under 33(1)(a)(i) Per enterprise under 33(1)(a)(ii) Per small farm under 33(1)(a)(iii)

24(3) || Establishment of agro-forestry systems || 80% || Of the amount of eligible investment for the establishment of agro-forestry systems

27(5) || Investments in new forestry technologies and in processing and marketing of forestry products || 50% 75% 65% 40% || Of the amount of eligible investment in less developed regions Of the amount of eligible investment in outermost regions Of the amount of eligible investment in the smaller Aegean islands Of the amount of eligible investment in other regions

28(4) || Setting up of producer groups || 10%, 10%, 8%, 6%, 4% 5% 5% 4% 3% 2% 100.000 || For marketed production up to EUR 1 000 000 As a percentage of marketed production during the first five years following recognition, for the 1st, 2nd, 3rd, 4th and 5th year respectively. For marketed production exceeding EUR 1 000 000As a percentage of marketed production during the first five years following recognition, for the 1st, 2nd, 3rd, 4th and 5th year respectively. Maximum amount per year in all cases.

29(8) || Agri-environment || 600(*) 900(*) 450(*) 200(*) || Per ha per year for annual crops Per ha per year for specialised perennial crops Per ha per year for other land uses Per Livestock Unit (“LU”) per year for local breeds in danger of being lost to farmers

30(5) || Organic farming || 600(*) 900(*) 450(*) || Per ha per year for annual crops Per ha per year for specialised perennial crops Per ha per year for other land uses

31(7) || Natura 2000 and Water framework directive payments || 500(*) 200(*) 50 || Per ha per year maximum in the initial period not exceeding five years Per ha per year maximum Per ha per year minimum for Water framework directive payments

32(3) || Payments to areas facing natural or other specific constraints || 25 250(*) 300(*) || Minimum per ha per year Maximum per ha per year Maximum per ha per year in mountain areas as defined in Article 46(2)

34(3) || Animal welfare || 500 || Per LU

35(3) || Forest-Environmental services and forest conservation || 200(*) || Per ha per year

38(5) || Crop, animal and plant insurance || 65% || Of the insurance premium due

39(5) || Mutual fund for animal and plant diseases and environmental incidents || 65% || Of the eligible costs.

40(5) || Income stabilisation tool || 65% || Of the eligible costs

|| || ||

|| || ||

|| || ||

- These amounts may be increased in
exceptional cases taking into account specific circumstances to be justified in
the rural development programmes.

ANNEX II
Biophysical criteria for the delimitation of areas facing natural constraints

CRITERION || DEFINITION || THRESHOLD

CLIMATE || ||

Low Temperature || Length of Growing Period (number of days) defined by number of days with daily average temperature > 5°C (LGPt5) OR || ≤ 180 days

Thermal-time sum (degree-days) for Growing Period defined by accumulated daily average temperature > 5°C. || ≤ 1500 degree-days

Dryness || Ratio of the annual precipitation (P) to the annual potential evapotranspiration (PET) || P/PET £ 0.5

CLIMATE AND SOIL

Excess Soil Moisture || Number of days at or above Field capacity || 3 230 days

SOIL

Limited Soil Drainage || Areas which are water logged for significant duration of the year || Wet within 80cm from the surface for over 6 months, or wet within 40cm for over 11 months OR Poorly or very poorly drained soil OR Gleyic colour pattern within 40cm from the surface

Unfavourable Texture and Stoniness || Relative abundance of clay, silt, sand, organic matter (weight %) and coarse material (volumetric %) fractions || 3 15% of topsoil volume is coarse material, including rock outcrop, boulder OR

Topsoil texture class of sand, loamy sand defined as: silt% + (2 x clay%) £ 30% OR

Topsoil texture class is heavy clay (3 60% clay) OR

Organic soil (organic matter 330%) of at least 40cm OR

Topsoil texture class of clay, silty clay, sandy clay and vertic properties within 100cm of the soil surface

Shallow Rooting Depth || Depth (cm) from soil surface to coherent hard rock or hard pan. || £ 30cm

Poor Chemical Properties || Presence in topsoil of salts, exchangeable sodium, excessive acidity || Salinity: 3 4 deci-Siemens per meter (dS/m) OR

Sodicity: 3 6 Exchangeable Sodium Percentage (ESP) OR

Soil Acidity: pH £ 5 (in water)

TERRAIN

Steep Slope || Change of elevation with respect to planimetric distance (%). || 3 15%

ANNEX III
Indicative list of measures and operations of particular relevance to thematic
sub-programmes referred to in Article 8

Young farmers:

Business start-up aid for young farmers setting up for the first time
in an agricultural holding

Investments in physical assets

Knowledge transfer and information actions

Advisory services, farm management and farm relief services

Co-operation

Investments in non-agricultural activities

Small farms:

Business start-up aid for the development of small farms

Investments in physical assets

Quality schemes for agricultural products and foodstuffs

Knowledge transfer and information actions

Advisory services, farm management and farm relief services

Co-operation

Investments in non-agricultural activities

Setting up of producer groups

Leader

Mountain areas:

- Payments
to areas facing natural or other specific constraints

- Agri-environment operations

- Co-operation

- Investments in physical assets

- Farm and business development in rural
areas

- Quality schemes for agricultural products
and foodstuffs

- Establishment of agro-forestry systems

Basic services and village renewal in rural areas

Knowledge transfer and information actions

Advisory services, farm management and farm relief services

Setting up of producer groups

Leader

Short supply chains:

Co-operation

Setting up of producer groups

Leader

Quality schemes for agricultural products and foodstuffs

Basic services and village renewal in rural areas

Investments in physical assets

Knowledge transfer and information actions

Advisory services, farm management and farm relief services

ANNEX IV
Ex ante conditionalities for rural development

1.
Priorities-linked conditionalities

EU priority for RD / CSF Thematic Objective (TO) || Ex ante conditionality || Criteria for fulfilment

RD priority 1: fostering knowledge transfer and innovation in agriculture, forestry, and rural areas TO 1: strengthening research, technological development and innovation || 1.1. Research and innovation: The existence of a national and/or regional innovation strategy for smart specialisation in line with the National Reform Program, to leverage private R&I expenditure, which complies with the features of well-performing national or regional research and innovation systems[35]. 1.2. Advisory capacity: sufficient advisory capacity to ensure advice on the regulatory requirements and all aspects linked with sustainable management and climate action in agriculture and forestry || – A national and/or regional innovation strategy for smart specialisation is in place that: – is based on a SWOT analysis to concentrate resources on a limited set of R&I priorities; – outlines measures to stimulate private RTD investment; – contains a monitoring and review system. – A Member State has adopted a framework outlining available budgetary resources for R&D; – A Member State has adopted a multi-annual plan for budgeting and prioritization of investments linked to EU priorities (ESFRI). – A description of the structure of extension/advisory systems at the relevant geographical scale (national/regional) - including their intended role under the scope of RD priority – which demonstrates the fulfilment of ex-ante conditionality 1.2 is included in the programme,

RD priority 2: enhancing competitiveness of all types of agriculture and enhancing farm viability TO 3: enhancing the competitiveness of small and medium-sized enterprises || 2-3.1. Business set-up: Specific actions have been carried out for the effective implementation of the Small Business Act (SBA) and its Review of 23 February 2011[36] including the "Think Small First" principle || – The specific actions include: – measures to reduce the time to set-up business to 3 working days and the cost to €100; – measures to reduce the time needed to get licenses and permits to take up and perform the specific activity of an enterprise to 3 months; – a mechanism for systematic assessment of the impact of legislation on SMEs using an "SME test" while taking into account differences in the size of enterprises, where relevant

RD priority 3: promoting food chain organisation and risk management in agriculture TO 3: enhancing the competitiveness of small and medium-sized enterprises

RD priority 4: restoring, preserving and enhancing ecosystems dependant on agriculture and forestry TO 5: promoting climate change adaptation, risk prevention and management TO 6: protecting the environment and promoting the resource efficiency || 4.1 Good Agricultural and Environmental Conditions (GAEC): standards for good agricultural and environmental condition of land referred to in Chapter I of Title VI of Regulation (EU) HR/xxxx are established at national level 4.2 Minimum requirements for fertilisers and plant protection products: minimum requirements for fertilisers and plant protection products referred to in article 29 Chapter I of Title III of this Regulation are defined at national level 4.3 other relevant national standards: relevant mandatory national standards are defined for the purpose of article 29 Chapter I of Title III of this Regulation 4.4. Risk prevention: the existence of national risk assessments for disaster management. taking into account climate change adaptation[37] || –  GAEC standards are defined in national law and specified in the programmes; – minimum requirements for fertilisers and plant protection products referred to in Chapter I of Title III of this Regulation are specified in the programmes; – relevant mandatory national standards are specified in the programmes; – A national risk assessment shall be in place that includes: – A description of the process, methodology, methods and non-sensitive data used for national risk assessment; – Adoption of qualitative and quantitative methods for risk assessment; – Taking into account, where appropriate, national climate change adaptation strategies,

RD priority 5: promoting resource efficiency and supporting the shift towards a low carbon and climate resilient economy in the agriculture and food sectors and the forestry sector TO 4: supporting the shift towards a low-carbon economy in all sectors TO 5: promoting climate change adaptation, risk prevention and management || 5.1 GHG emissions: compliance with Article 6(1) of Decision No 406/2009/EC of the European Parliament and of the Council of 23 April 2009 on the effort of Member States to reduce their greenhouse gas emissions to meet the Community’s greenhouse gas emission reduction commitments up to 2020 5.2 Energy efficiency: transposition into national law of Directive 2006/32/EC of the European Parliament and of the Council of 5 April 2006 on energy end-use efficiency and energy services[38] 5.3 Water pricing: the existence of a water pricing policy which ensures an adequate contribution of the different water uses to the recovery of the costs of water services, in accordance with Article 9 of Directive 2000/60/EC of the European Parliament and of the Council of 23 October 2000 establishing a framework for Community action in the field of water policy[39] . 5.4. Waste management plans: transposition into national law of Directive 2008/98/EC of the European Parliament and of the Council of 19 November 2008 on waste and repealing certain Directives[40], in particular the development of waste management plans in accordance with the Directive. 5.5 Renewable energy: Transposition into national law of Directive 2009/28/EC of the European Parliament and of the Council of 23 April 2009 on the promotion of the use of energy from renewable sources and amending and subsequently repealing Directives 2001/77/EC and 2003/30/EC[41] || – A Member State has submitted to the Commission a report on adopted national policies and measures to pursuant to Article 3 of Decision No 406/2009/EC in 2013-2020; – A Member State has submitted to the Commission a Energy Efficiency Action Plan which translate energy saving objectives into concrete and coherent measures in accordance with article 14 of Directive 2006/32/EC; – A Member State has taken account of the principle of recovery of the costs of water services, including environmental and resource costs in accordance with Article 9(1) of Directive 2000/60/EC; – A Member State has carried out an economic analysis in accordance with Article 5 and Annex III to Directive 2000/60/ECregarding volume, price and cost of water services, and estimates of relevant investments; – A Member State has ensured contribution of the different water uses by sector in accordance with Article 9(3) of Directive 2000/60/EC – A Member State has ensured that its competent authorities establish, in accordance with Articles 1, 4, 13 and 16 of Directive 2008/98/EC, one or more waste management plans as required by Article 28 of the Directive; – A Member State has adopted a national renewable energy action plan in accordance with Article 4 of Directive 2009/28/EC

RD priority 6: promoting social inclusion poverty reduction and economic development in rural areas TO 8: promoting employment and supporting labour mobility TO 9: promoting social inclusion and combating poverty || 6.1 Access to EAFRD: The provision of support for relevant stakeholders in accessing the EAFRD 6.2 Self-employment, entrepreneurship and business creation: the existence of a comprehensive and inclusive strategy for inclusive start-up support in accordance with the Small Business Act[42] and in coherence with employment guideline 7, regarding the enabling conditions for job creation 6.3 NGA Infrastructure (Next Generation Access Networks): The existence of national NGA Plans which take account of regional actions in order to reach the EU high-speed Internet access targets[43], focusing on areas where the market fails to provide an open infrastructure at an affordable cost and to an adequate quality || – Relevant stakeholders are provided support for submitting project applications and for implementing and managing the selected projects – Member States have a comprehensive and inclusive strategy in place which will include: – measures to significantly reduce the time and cost to set-up business in accordance with the Small Business Act; – measures to reduce the time needed to get licenses and permits to take up and perform the specific activity of an enterprise business in accordance with the Small Business Act; – actions linking suitable business development services and financial services (access to capital), including the outreach to disadvantaged groups and areas – A national NGA Plan is in place that contains: – a plan of infrastructure investments through demand aggregation and a mapping of infrastructure and services, regularly updated; – sustainable investment models that enhance competition and provide access to open, affordable, quality and future proof infrastructure and services; – measures to stimulate private investment.

2.
Horizontal conditionalities applying to several Priorities

|| HC.1 Member States administrative efficiency: the existence of a strategy for reinforcing the country's administrative efficiency including public administration reform[44] HC.2 Human resources allocation: sufficient capacity in human resources allocation, training management and IT systems is available within the bodies responsible for the management and implementation of rural development programmes HC. 3 Selection criteria: an appropriate approach laying down principles with regard to the setting of selection criteria for projects and local development is defined || – A strategy for reinforcing a Member States' administrative efficiency is in place and in the process of being implemented[45]; the strategy includes: – an analysis and strategic planning of legal, organisational and/or procedural reform actions; – the development of quality management systems; – integrated actions for simplification and rationalisation of administrative procedures; – the development of skills at all levels; – the development of procedures and tools for monitoring and evaluation; – A description of human resources allocation, training management and IT systems within the Managing Authorities of the programme, which demonstrates the fulfilment of ex –ante conditionality HC.2 is included in the programme – A description of the chosen approach to the setting of selection criteria for projects and local development, which demonstrates the fulfilment of ex–ante conditionality HC.3 is included in the programme

ANNEX V
Indicative list of measures with relevance to one or more Union priorities for
rural development

Measures of particular relevance to several
Union priorities

Article 16   Advisory services, farm management and farm
relief services

Article 18   Investments in physical assets

Article 20   Farm and business development

Article 36   Co-operation

Article 42 – 45 LEADER

Measures of particular relevance to fostering
knowledge transfer and innovation in agriculture, forestry, and rural areas

Article 15   Knowledge transfer and information actions

Article 27   Investments in new forestry technologies and
in processing and marketing of forestry products

Measures of particular relevance for enhancing
competitiveness of all types of agriculture and enhancing farm viability

Article 17   Quality schemes for agricultural products and
foodstuffs

Article 32 -33   Payments to areas facing natural or other
specific constraints

Measures of particular relevance to promoting
food chain organisation and risk management in agriculture

Article 19   Restoring agricultural production potential
damaged by natural disasters and catastrophic events and introduction of
appropriate prevention actions

Article 25   Prevention and restoration of damage to
forests from forest fires and natural disasters and catastrophic events

Article 28   Setting up of producer groups

Article 34   Animal welfare

Article 37   Risk management

Article 38   Crop, animal, and plant insurance

Article 39   Mutual funds for animal and plant diseases and
environmental incidents

Article 40   Income
stabilisation tool

Measure of particular relevance to restoring,
preserving and enhancing ecosystems dependent on agriculture and forestry

and

Promoting resource efficiency and supporting the
shift towards a low carbon and climate resilient economy in agriculture, food
and forestry sectors

Article 22   Investments in forest area development and
improvement of the viability of forests

Article 23   Afforestation and creation of woodland

Article 24   Establishment of agro-forestry systems

Article 26   Investments improving the resilience and
environmental value of forest ecosystems

Article 29   Agri-environment- climate

Article 30   Organic farming

Article 31   Natura 2000 and Water framework directive
payments

Article 35   Forest-environmental and climate services and
forest conservation

Measure of particular relevance to promoting
social inclusion, poverty reduction and economic development in rural areas

Article 21   Basic services and village renewal in rural
areas

Article 42 – 45 LEADER

LEGISLATIVE
FINANCIAL STATEMENT

1.
FRAMEWORK OF THE PROPOSAL/INITIATIVE
1.1.
Title of the proposal/initiative

-        Proposal for a Regulation of the European Parliament and of
the Council establishing rules for direct payments to farmers under support
schemes within the framework of the common agricultural policy;

-        Proposal for a Regulation of the European Parliament and of
the Council establishing a common organisation of the markets in agricultural
products (Single CMO Regulation);

-        Proposal for a Regulation of the European Parliament and of
the Council on support for rural development by the European Agricultural Fund
for Rural Development (EAFRD);

-        Proposal for a Regulation of the European Parliament and of
the Council on the financing, management and monitoring of the common
agricultural policy;

-        Proposal for a Regulation of the European Parliament and of
the Council amending Council Regulation (EC) No 73/2009 as regards the
application of direct payments to farmers in respect of the year 2013;

-        Proposal for a Council Regulation determining measures on
fixing certain aids and refunds related to the common organisation of the
markets in agricultural products;

-        Proposal for a Regulation of the European Parliament and of
the Council amending Council Regulation (EC) No 1234/2007 as regards the regime
of the single payment scheme and support to vine-growers.

1.2.
Policy area(s) concerned in the ABM/ABB
structure[46]

Policy Area Title 05 of Heading 2

1.3.
Nature of the proposal/initiative (Legislative
framework for the CAP post 2013)

x The proposal/initiative relates to a new action

 ̈ The
proposal/initiative relates to a new action following a pilot
project/preparatory action[47]

x The proposal/initiative relates to the extension of
an existing action

x The proposal/initiative relates to an action
redirected towards a new action

1.4.
Objectives
1.4.1.
The Commission's multiannual strategic
objective(s) targeted by the proposal/initiative

In order to promote resource efficiency with a view to smart,
sustainable and inclusive growth for EU agriculture and rural development in
line with the Europe 2020 Strategy, the objectives of the CAP are:

- Viable food production;

- Sustainable management of natural resources and climate action;

- Balanced territorial development.

1.4.2.
Specific objective(s) and ABM/ABB activity(ies)
concerned

Specific objectives for Policy area 05:

Specific objective No 1:

To provide environmental public goods

Specific objective No 2:

To compensate for production difficulties in areas with specific
natural constraints

Specific objective No 3:

To pursue climate change mitigation and adaptation actions

Specific objective No 4:

To manage the EU budget (CAP) in accordance with high standards of
financial management

Specific objective for ABB 05 02 - Interventions in agricultural
markets:

Specific objective No 5:

To improve the competitiveness of the agricultural sector and
enhance its value share in the food chain

Specific objective for ABB 05 03 - Direct aids:

Specific objective No 6:

To contribute to farm incomes and limit farm income variability

Specific objectives for ABB 05 04 – Rural development:

Specific objective No 7

To foster green growth through innovation

Specific objective No 8:

To support rural employment and maintain the social fabric of rural
areas

Specific objective No 9

To improve the rural economy and promote diversification

Specific objective No 10

To allow for structural diversity in farming systems

1.4.3.
Expected result(s) and impact

It is not possible to set quantitative targets for impact indicators
at this stage. Although the policy can steer in a certain direction, the broad
economic, environmental and social outcomes measured by such indicators would
ultimately also depend on the impact from a range of external factors, which
recent experience indicates have become significant and unpredictable. Further
analysis is on-going, to be ready for the period post-2013.

As regards the direct payments, Member States will have the
possibility to decide, to a limited degree, on the implementation of certain
components of the direct payment schemes.

For rural development, the expected results and impact will depend
on the rural development programmes that Member States will submit to the
Commission. Member States will be asked to set targets in their programmes.

1.4.4.
Indicators of results and impact

The proposals provide for the establishment of a common monitoring
and evaluation framework with a view to measuring the performance of the Common
Agricultural Policy. That framework shall include all instruments related to
the monitoring and evaluation of CAP measures and in particular of the direct
payments, market measures, rural development measures and of the application of
cross compliance.

The impact of these CAP measures shall be measured in relation to
the following objectives:

(a)      viable food production, with a focus on
agricultural income, agricultural productivity and price stability;

(b)     sustainable management of natural
resources and climate action, with a focus on greenhouse gas emissions,
biodiversity, soil and water;

(c)      balanced territorial development, with a
focus on rural employment, growth and poverty in rural areas.

By means of implementing acts, the Commission shall define the set of
indicators specific to these objectives and areas.

Moreover, as regards rural development, a reinforced common
monitoring and evaluation system is proposed. That system aims (a) to
demonstrate the progress and achievements of rural development policy and
assess the impact, effectiveness, efficiency and relevance of rural development
policy interventions, (b)     to contribute to better targeted support for
rural development, and (c) to support a common learning process related to
monitoring and evaluation. The Commission will establish, by means of
implementing act, a list of common indicators linked to the policy priorities.

1.5.
Grounds for the proposal/initiative
1.5.1.
Requirement(s) to be met in the short or long
term

In order to meet the multi-annual strategic objectives of the CAP
which are a direct translation of the Europe 2020 strategy for European rural
areas and to fulfil the relevant requirements of the Treaty, the proposals aim
to lay down the legislative framework for the Common Agricultural Policy for the
period after 2013.

1.5.2.
Added value of EU involvement

The future CAP will not only be a policy that caters for a small,
albeit essential, part of the EU economy, but also a policy of strategic
importance for food security, the environment and territorial balance. Thus,
the CAP, as a truly common policy, makes the most efficient use of limited
budgetary resources in maintaining a sustainable agriculture throughout the EU,
addressing important cross-border issues such as climate change and reinforcing
solidarity among Member States.

As mentioned in the Commission communication "A Budget for
Europe 2020"[48],
the CAP is a genuinely European policy. Instead of operating 27 separate
agricultural policies and budgets, Member States pool resources to operate a
single European policy with a single European budget. This naturally means that
the CAP accounts for a significant proportion of the EU budget. However, this
approach is both more efficient and economical than an uncoordinated national
approach.

1.5.3.
Lessons learned from similar experiences in the
past

On the basis of the evaluation of the current policy framework, an
extensive consultation with stakeholders as well as an analysis of future
challenges and needs, a comprehensive impact assessment has been carried out.
More details can be found in the impact assessment and the explanatory
memorandum that are accompanying the legal proposals.

1.5.4.
Coherence and possible synergy with other
relevant instruments

The legislative proposals concerned by this financial statement
should be seen in the broader context of the proposal for a single framework
regulation with common rules for the common strategic framework funds (EAFRD,
ERDF, ESF, Cohesion Fund and EMFF). That framework regulation will make an
important contribution to reducing administrative burden, to spending EU funds
in an effective way, and to put simplification into practice. This also
underpins the new concepts of the common strategic framework for all these
funds and the upcoming Partnership Contracts which will also cover these funds.

The common strategic framework, which will be established, will
translate the objectives and priorities of the Europe 2020 Strategy into
priorities for the EAFRD together with the ERDF, ESF, Cohesion Fund and EMFF,
which will ensure an integrated use of the funds to deliver common objectives.

The common strategic framework will also set out coordination
mechanisms with other relevant Union policies and instruments.

Moreover, as regards the CAP, significant synergies and
simplification effects will be obtained by harmonising and aligning the
management and control rules for the first (EAGF) and second (EAFRD) pillar of
the CAP. The strong link between the EAGF and the EAFRD should be maintained
and the structures already in place in the Member States be sustained.

1.6.
Duration and financial impact

x Proposal/initiative of limited
duration (for the draft regulations on direct payment schemes, rural
development and transitional regulations)

–
x   Proposal/initiative in effect from
01/01/2014 to 31/12/2020

–
x   Financial impact for the period of the next
multi-annual financial framework. For rural development, impact on payments to
2023.

x Proposal/initiative of unlimited
duration (for the draft regulation on the single CMO and the horizontal
regulation)

– Implementation from 2014.

1.7.
Management mode(s) envisaged[49]

x Centralised direct management
by the Commission

 ̈ Centralised indirect management with the delegation of implementation tasks to:

–  ̈  executive
agencies

–  ̈  bodies set
up by the Communities[50]

–  ̈  national
public-sector bodies/bodies with public-service mission

–
 ̈  persons entrusted with the implementation of specific actions
pursuant to Title V of the Treaty on European Union and identified in the
relevant basic act within the meaning of Article 49 of the Financial Regulation

x Shared management with the
Member States

 ̈ Decentralised management with third countries

 ̈ Joint management with international organisations (to be specified)

Comments

No
substantive change compared to the present situation, i.e. the bulk of
expenditure concerned by the legislative proposals on the CAP reform will be
managed by shared management with the Member States. However, a very minor part
will continue to fall under centralised direct management by the Commission.

2.
MANAGEMENT MEASURES
2.1.
Monitoring and reporting rules

In terms of monitoring and evaluation of the CAP, the Commission
will present a report to the European Parliament and the Council every 4 years,
with the first report to be presented not later than end 2017.

This is complemented by specific provisions in all areas of the CAP,
with various comprehensive reporting and notifications requirements to be
specified in the implementing rules.

As regards rural development, rules are also provided for monitoring
at programme level, which will be aligned with the other funds, and which will
be coupled with ex ante, on-going and ex post evaluations.

2.2.
Management and control system
2.2.1.
Risk(s) identified

There are more than seven million beneficiaries of the CAP,
receiving support under a large variety of different aid schemes, each of which
having detailed and sometimes complex eligibility criteria.

The reduction in the error rate in the domain of the common
agricultural policy can already be considered as a trend. Thus, most recently
an error rate close to 2% confirms the overall positive assessment of previous
years. It is the intention to continue the efforts in order to achieve an error
rate below 2%.

2.2.2.
Control method(s) envisaged

The legislative package, in particular the proposal for the
regulation on the financing, management and monitoring of the common
agricultural policy, envisages maintaining and reinforcing the current system
established by Regulation (EC) No 1290/2005. It provides for a compulsory
administrative structure at Member State level, centred around accredited
paying agencies, which are responsible for carrying out controls at final
beneficiary level in accordance with the principles set out under point 2.3.
Every year, the head of each paying agency is required to provide a statement
of assurance which covers the completeness, accuracy and veracity of the
accounts, the proper functioning of the internal control systems and the
legality and regularity of the underlying transactions. An independent audit
body is required to provide an opinion on all these three elements.

The Commission will continue to audit agricultural expenditure,
using a risk-based approach in order to ensure that its audits are targeted to
the areas of highest risk. Where these audits reveal that expenditure has been
incurred in breach of Union rules, it will exclude the amounts concerned from
Union financing under the conformity clearance system.

As regards the cost of controls, a detailed analysis is provided in
annex 8 to the impact assessment accompanying the legislative proposals.

2.3.
Measures to prevent fraud and irregularities

The legislative package, in particular the proposal for the
regulation on the financing, management and monitoring of the common
agricultural policy, envisages maintaining and reinforcing the current detailed
systems for controls and penalties to be applied by the paying agencies, with
common basis features and special rules tailored to the specificities of each
aid regime. The systems generally provide for exhaustive administrative
controls of 100% of the aid applications, cross-checks with other databases
where this is considered appropriate as well as pre-payment on-the-spot checks
of a minimum number of transactions, depending on the risk associated with the
regime in question. If these on-the-spot checks reveal a high number of
irregularities, additional checks must be carried out. In this context, the by
far most important system is the Integrated Administration and Control System
(IACS), which in financial year 2010 covered around 80% of total expenditure
under the EAGF and the EAFRD. For Member States with properly functioning
control systems and low error rates, the Commission will be empowered to allow
for a reduction of the number of on-the-spot checks.

The package further envisages that Member States shall prevent,
detect and correct irregularities and fraud, impose effective, dissuasive and
proportionate penalties as laid down in Union legislation or national law, and
recover any irregular payments plus interests. It includes an automatic
clearance mechanism for irregularity cases, which provides that if recovery has
not taken place within four years of the date of the recovery request, or
within eight years in the case of legal proceedings, the amounts not recovered
shall be borne by the Member State concerned. This mechanism will be a strong
incentive for Member States to recover irregular payments as quickly as
possible.

3.
ESTIMATED FINANCIAL IMPACT OF THE PROPOSAL/INITIATIVE

The amounts indicated in this financial
statement are expressed in current prices and in commitments.

In addition to the changes resulting from the
legislative proposals as listed in the accompanying tables below, the
legislative proposals imply further changes which have no financial impact.

For any of the years in the period 2014-2020,
the application of financial discipline cannot be excluded at this stage.
However, this will not depend on the reform proposals as such, but on other
factors, such as the execution of direct aids or future developments in the
agricultural markets.

As concerns direct aids, the extended net
ceilings for 2014 (calendar year 2013) included in the proposal regarding
transition are higher than the amounts allocated to direct aids indicated in
the accompanying tables. The purpose of this extension is to ensure a
continuation of the existing legislation in a scenario in which all the other
elements would remain unchanged, without prejudice to the possible need for
applying the financial discipline mechanism.

The reform proposals contain provisions giving
Member States a set degree of flexibility in relation to their allocation of
direct aids respectively rural development. In case Member States decide to use
that flexibility, this will have financial consequences within the given
financial amounts, which cannot be quantified at this stage.

This financial statement does not take into
account the possible use of the crises reserve. It should be underlined that
the amounts taken into account for market-related expenditure are based on no
public intervention buying-in and other measures related to a crisis situation
in any sectors.

3.1.
Heading(s) of the multiannual financial
framework and expenditure budget line(s) affected

Table 1: Amounts for the CAP
including complementary amounts foreseen in the MFF proposals and the CAP
reform proposals

In million EUR (current prices)

Budget year || 2013 || 2013 adjusted (1) || 2014 || 2015 || 2016 || 2017 || 2018 || 2019 || 2020 || TOTAL 2014-2020

|| || || || || || || || || ||

Inside MFF || || || || || || || || || ||

Heading 2 || || || || || || || || || ||

Direct aids and market-related expenditure (2) (3) (4) || 44 939 || 45 304 || 44 830 || 45 054 || 45 299 || 45 519 || 45 508 || 45 497 || 45 485 || 317 193

Estimated assigned revenue || 672 || 672 || 672 || 672 || 672 || 672 || 672 || 672 || 672 || 4 704

P1 Direct aids and market-related expenditure (with assigned revenue) || 45 611 || 45 976 || 45 502 || 45 726 || 45 971 || 46 191 || 46 180 || 46 169 || 46 157 || 321 897

P2 Rural development (4) || 14 817 || 14 451 || 14 451 || 14 451 || 14 451 || 14 451 || 14 451 || 14 451 || 14 451 || 101 157

Total || 60 428 || 60 428 || 59 953 || 60 177 || 60 423 || 60 642 || 60 631 || 60 620 || 60 608 || 423 054

Heading 1 || || || || || || || || || ||

CSF Agricultural research and innovation || N.A. || N.A. || 682 || 696 || 710 || 724 || 738 || 753 || 768 || 5 072

Most deprived persons || N.A. || N.A. || 379 || 387 || 394 || 402 || 410 || 418 || 427 || 2 818

Total || N.A. || N.A. || 1 061 || 1 082 || 1 104 || 1 126 || 1 149 || 1 172 || 1 195 || 7 889

Heading 3 || || || || || || || || || ||

Food safety || N.A. || N.A. || 350 || 350 || 350 || 350 || 350 || 350 || 350 || 2 450

|| || || || || || || || || ||

Outside MFF || || || || || || || || || ||

Reserve for agricultural crises || N.A. || N.A. || 531 || 541 || 552 || 563 || 574 || 586 || 598 || 3 945

European Globalisation Fund (EGF) || || || || || || || || || ||

Of which maximum available for agriculture: (5) || N.A. || N.A. || 379 || 387 || 394 || 402 || 410 || 418 || 427 || 2 818

|| || || || || || || || || ||

TOTAL || || || || || || || || || ||

TOTAL Commission proposals (MFF + outside MFF) + assigned revenue || 60 428 || 60 428 || 62 274 || 62 537 || 62  823 || 63 084 || 63 114 || 63 146 || 63 177 || 440 156

TOTAL MFF proposals (i.e. excluding Reserve and EGF) + assigned revenue || 60 428 || 60 428 || 61 364 || 61 609 || 61 877 || 62 119 || 62 130 || 62 141 || 62 153 || 433 393

Notes:

(1)           Taking into account legislative changes
already agreed, i.e. voluntary modulation for the UK and Article 136
"unspent amounts" will cease to apply by the end of 2013.

(2)           The amounts
relate to the proposed annual ceiling for the first pillar. However, it should
also be noted that it is proposed to move negative expenditure from accounting
clearance (currently under budget item 05 07 01 06) to assigned revenue (under
item 67 03). For details, see estimated revenue table on the page below.

(3)           The 2013 figures include the amounts for
veterinary and phytosanitary measures as well as market measures for the
fisheries sector.

(4)           The amounts in
the table above are in line with those in the Commission communication "A
Budget for Europe 2020" (COM(2011)500 final of 29 June 2011). However, it
remains to be decided if the MFF will reflect the transfer that is proposed for
the envelope of one Member State of the cotton national restructuring programme
to rural development as from 2014, implying an adjustment (4 million EUR per
year) of the amounts for respectively the EAGF sub-ceiling and for pillar 2. In
the tables in the sections below, the amounts have been transferred,
irrespective of them being reflected in the MFF.

(5)           In accordance
with the Commission communication "A Budget for Europe 2020"
(COM(2011)500 final), a total amount of up to 2.5 billion EUR in 2011 prices
will be available under the European Globalisation Fund for providing
additional support to farmers suffering from effects of globalisation. In the
table above, the breakdown by year in current prices is only indicative.
The proposal for the inter-institutional agreement between the European
Parliament, the Council and the Commission on cooperation in budgetary matters
and on sound financial management (COM(2011)403 final of 29 June 2011) sets
out, for the EGF, an overall maximum annual amount of 429 million EUR in 2011
prices.

3.2.
Estimated impact on expenditure
3.2.1.
Summary of estimated impact on expenditure

Table 2: Estimated revenue as well as
expenditure for Policy Area 05 within Heading 2

In million EUR (current prices)

Budget year || 2013 || 2013 adjusted || 2014 || 2015 || 2016 || 2017 || 2018 || 2019 || 2020 || TOTAL 2014-2020

REVENUE || || || || || || || || || ||

123 – Sugar production charge (own resources) || 123 || 123 || 123 || 123 || || || || || || 246

|| || || || || || || || || ||

67 03 - Assigned revenue || 672 || 672 || 741 || 741 || 741 || 741 || 741 || 741 || 741 || 5 187

of which: ex 05 07 01 06 - Accounting clearance || 0 || 0 || 69 || 69 || 69 || 69 || 69 || 69 || 69 || 483

Total || 795 || 795 || 864 || 864 || 741 || 741 || 741 || 741 || 741 || 5 433

EXPENDITURE || || || || || || || || || ||

05 02 - Markets (1) || 3 311 || 3 311 || 2 622 || 2 641 || 2 670 || 2 699 || 2 722 || 2 710 || 2 699 || 18 764

05 03 - Direct aids (before capping) (2) || 42 170 || 42 535 || 42 876 || 43 081 || 43 297 || 43 488 || 43 454 || 43 454 || 43 454 || 303 105

05 03 – Direct aids (after capping) || 42 170 || 42 535 || 42 876 || 42 917 || 43 125 || 43 303 || 43 269 || 43 269 || 43 269 || 302 027

|| || || || || || || || || ||

05 04 - Rural development (before capping) || 14 817 || 14 451 || 14 455 || 14 455 || 14 455 || 14 455 || 14 455 || 14 455 || 14 455 || 101 185

05 04 - Rural development (after capping) || 14 817 || 14 451 || 14 455 || 14 619 || 14 627 || 14 640 || 14 641 || 14 641 || 14 641 || 102 263

|| || || || || || || || || ||

05 07 01 06 - Accounting clearance || -69 || -69 || 0 || 0 || 0 || 0 || 0 || 0 || 0 || 0

Total || 60 229 || 60 229 || 59 953 || 60 177 || 60 423 || 60 642 || 60 631 || 60 620 || 60 608 || 423 054

NET BUDGET after assigned revenue || || || 59 212 || 59 436 || 59 682 || 59 901 || 59 890 || 59 879 || 59 867 || 417 867

Notes:

(1)           For 2013, preliminary
estimate based on Draft Budget 2012 taking into account legal adjustments
already agreed for 2013 (e.g. wine ceiling, abolition of potato starch premium,
dried fodder) as well as some foreseen developments. For all years, the
estimates assume that there will be no additional financing need for support
measures due to market disturbances or crises.

(2)           The
2013 amount includes an estimate of wine grubbing-up 2012.

Table 3: Calculation of the financial
impact by budget chapter of the CAP reform proposals as regards revenue and CAP
expenditure

In million EUR (current prices)

Budget year || 2013 || 2013 adjusted || || TOTAL 2014-2020

|| || 2014 || 2015 || 2016 || 2017 || 2018 || 2019 || 2020 ||

REVENUE || || || || || || || || || ||

123 – Sugar production charge (own resources) || 123 || 123 || 0 || 0 || 0 || 0 || 0 || 0 || 0 || 0

|| || || || || || || || || ||

67 03 - Assigned revenue || 672 || 672 || 69 || 69 || 69 || 69 || 69 || 69 || 69 || 483

of which: ex 05 07 01 06 - Accounting clearance || 0 || 0 || 69 || 69 || 69 || 69 || 69 || 69 || 69 || 483

Total || 795 || 795 || 69 || 69 || 69 || 69 || 69 || 69 || 69 || 483

EXPENDITURE || || || || || || || || || ||

05 02 - Markets (1) || 3 311 || 3 311 || -689 || -670 || -641 || -612 || -589 || -601 || -612 || -4 413

05 03 - Direct aids (before capping) (2) || 42 170 || 42 535 || -460 || -492 || -534 || -577 || -617 || -617 || -617 || -3 913

05 03 - Direct aids – Estimated product of capping to be transferred to rural development || || || 0 || -164 || -172 || -185 || -186 || -186 || -186 || -1 078

05 04 - Rural development (before capping) || 14 817 || 14 451 || 4 || 4 || 4 || 4 || 4 || 4 || 4 || 28

05 04 - Rural development – Estimated product of capping to be transferred from direct aids || || || 0 || 164 || 172 || 185 || 186 || 186 || 186 || 1 078

05 07 01 06 - Accounting clearance || -69 || -69 || 69 || 69 || 69 || 69 || 69 || 69 || 69 || 483

Total || 60 229 || 60 229 || -1 076 || -1 089 || -1 102 || -1 115 || -1 133 || -1 144 || -1 156 || -7 815

NET BUDGET after assigned revenue || || || -1 145 || -1 158 || -1 171 || -1 184 || -1 202 || -1 213 || -1 225 || -8 298

Notes:

(1)           For 2013, preliminary
estimate based on Draft Budget 2012 taking into account legal adjustments
already agreed for 2013 (e.g. wine ceiling, abolition of potato starch premium,
dried fodder) as well as some foreseen developments. For all years, the
estimates assume that there will be no additional financing need for support
measures due to market disturbances or crises.

(2)           The
2013 amount includes an estimate of wine grubbing-up 2012.

Table 4: Calculation of the financial
impact of the CAP reform proposals as regards CAP market-related expenditure

In million EUR (current prices)

BUDGET YEAR || || Legal base || Estimated needs || Changes to 2013 ||

|| || || 2013 (1) || 2014 || 2015 || 2016 || 2017 || 2018 || 2019 || 2020 || TOTAL 2014-2020

Exceptional measures: streamlined and extended scope of legal base || || Art. 154, 155, 156 || pm || pm || pm || pm || pm || pm || pm || pm || pm

Removal of intervention for durum wheat and sorghum || || ex Art.10 || pm || - || - || - || - || - || - || - || -

Food programmes for most deprived || (2) || Ex-Art. 27 of Reg 1234/2007 || 500.0 || -500.0 || -500.0 || -500.0 || -500.0 || -500.0 || -500.0 || -500.0 || -3 500.0

Private storage (Flax fibre) || || Art. 16 || N.A. || pm || pm || pm || pm || pm || pm || pm || Pm

Aid for cotton - Restructuring || (3) || ex Art. 5 of Reg. 637/2008 || 10.0 || -4.0 || -4.0 || -4.0 || -4.0 || -4.0 || -4.0 || -4.0 || -28.0

Setting-up aid for F&V producer groups || || ex Art. 117 || 30.0 || 0.0 || 0.0 || 0.0 || -15.0 || -15.0 || -30.0 || -30.0 || -90.0

School fruit scheme || || Art. 21 || 90.0 || 60.0 || 60.0 || 60.0 || 60.0 || 60.0 || 60.0 || 60.0 || 420.0

Abolition hops PO || || ex Art. 111 || 2.3 || -2.3 || -2.3 || -2.3 || -2.3 || -2.3 || -2.3 || -2.3 || -15.9

Optional private storage for skimmed-milk powder || || Art. 16 || N.A. || pm || pm || pm || pm || pm || pm || pm || pm

Abolition aid for use of skimmed milk/SMP as feedingstuff/casein and use of casein || || ex Art. 101, 102 || pm || - || - || - || - || - || - || - || -

Optional private storage for butter || (4) || Art. 16 || 14.0 || [-1.0] || [-14.0] || [-14.0] || [-14.0] || [-14.0] || [-14.0] || [-14.0] || [-85.0]

Abolition milk promotional levy || || ex Art. 309 || pm || - || - || - || - || - || - || - || -

TOTAL 05 02 || || || || || || || || || || ||

Net effect of reform proposals (5) || || || || -446.3 || -446.3 || -446.3 || -461.3 || -461.3 || -476.3 || -476.3 || -3 213.9

Notes:

(1)           The 2013 needs are estimated
based on the Commission's Draft Budget 2012, except for (a) the fruit &
vegetables sectors where the needs are based on the financial statement of the
respective reforms and (b) any legal changes already agreed.

(2)           The
2013 amount corresponds to Commission proposal COM(2010)486. As from 2014, the
measure will be financed within Heading 1.

(3)           The envelope for the cotton
restructuring programme for Greece (4 million EUR/year) will be transferred to
rural development as from 2014. The envelope for Spain (6.1 million EUR/year)
will go to the Single Payment Scheme as from 2018 (already decided).

(4)           Estimated
effect in case of non-application of the measure.

(5)           In addition to expenditure
within chapters 05 02 and 05 03, it is anticipated that direct expenditure
within chapters 05 01, 05 07 and 05 08 will be financed by revenue that will be
assigned to the EAGF.

Table 5: Calculation of the financial
impact of the CAP reform proposals as regards direct aids

In million EUR (current prices)

BUDGET YEAR || || Legal base || Estimated needs || Changes to 2013 ||

|| || 2013 (1) || 2013 adjusted (2) || 2014 || 2015 || 2016 || 2017 || 2018 || 2019 || 2020 || TOTAL 2014-2020

|| || || || || || || || || || || ||

Direct aids || || || 42 169.9 || 42 535.4 || 341.0 || 381.1 || 589.6 || 768.0 || 733.2 || 733.2 || 733.2 || 4 279.3

- Changes already decided: || || || || || || || || || || || ||

Phasing-in EU 12 || || || || || 875.0 || 1 133.9 || 1 392.8 || 1 651.6 || 1 651.6 || 1 651.6 || 1 651.6 || 10 008.1

Cotton restructuring || || || || || 0.0 || 0.0 || 0.0 || 0.0 || 6.1 || 6.1 || 6.1 || 18.4

Health Check || || || || || -64.3 || -64.3 || -64.3 || -90.0 || -90.0 || -90.0 || -90.0 || -552.8

Previous reforms || || || || || -9.9 || -32.4 || -32.4 || -32.4 || -32.4 || -32.4 || -32.4 || -204.2

|| || || || || || || || || || || ||

- Changes due to new CAP reform proposals || || || -459.8 || -656.1 || -706.5 || -761.3 || -802.2 || -802.2 || -802.2 || -4 990.3

Of which: capping || || || || || 0.0 || -164.1 || -172.1 || -184.7 || -185.6 || -185.6 || -185.6 || -1 077.7

|| || || || || || || || || || || ||

TOTAL 05 03 || || || || || || || || || || || ||

Net effect of reform proposals || || || || || -459.8 || -656.1 || -706.5 || -761.3 || -802.2 || -802.2 || -802.2 || -4 990.3

TOTAL EXPENDITURE || || || 42 169.9 || 42 535.4 || 42 876.4 || 42 916.5 || 43 125.0 || 43 303.4 || 43 268.7 || 43 268.7 || 43 268.7 || 302 027.3

Notes:

(1)           The
2013 amount includes an estimate of wine grubbing-up 2012.

(2)           Taking
into account legislative changes already agreed, i.e. voluntary modulation for
the UK and Article 136 "unspent amounts" will cease to apply by the
end of 2013.

Table 6: Components of direct aids

In million EUR (current prices)

BUDGET YEAR || || || || || 2015 || 2016 || 2017 || 2018 || 2019 || 2020 || TOTAL 2014-2020

Annex II || || || || || 42 407.2 || 42 623.4 || 42 814.2 || 42 780.3 || 42 780.3 || 42 780.3 || 256 185.7

Payment for agricultural practices beneficial for the climate and environment (30%) || || || || || 12 866.5 || 12 855.3 || 12 844.3 || 12 834.1 || 12 834.1 || 12 834.1 || 77 068.4

Maximum that can be allocated to the Payment for young farmers (2%) || || || || || 857.8 || 857.0 || 856.3 || 855.6 || 855.6 || 855.6 || 5 137.9

Basic Payment Scheme, Payment for areas with Natural Constraints, Voluntary Coupled Support || || || || || 28 682.9 || 28 911.1 || 29 113.6 || 29 090.6 || 29 090.6 || 29 090.6 || 173 979.4

Maximum that can be taken from the above lines to finance the Small Farmer Scheme (10%) || || || || || 4 288.8 || 4 285.1 || 4 281.4 || 4 278.0 || 4 278.0 || 4 278.0 || 25 689.3

Wine transfers included in Annex II[51] || || || || || 159.9 || 159.9 || 159.9 || 159.9 || 159.9 || 159.9 || 959.1

Capping || || || || || -164.1 || -172.1 || -184.7 || -185.6 || -185.6 || -185.6 || -1 077.7

Cotton || || || || || 256.0 || 256.3 || 256.5 || 256.6 || 256.6 || 256.6 || 1 538.6

POSEI/Small Aegean Islands || || || || || 417.4 || 417.4 || 417.4 || 417.4 || 417.4 || 417.4 || 2 504.4

Table 7: Calculation of the financial
impact of the CAP reform proposals as regards transitional measures for
granting direct aids in 2014

In million EUR (current prices)

BUDGET YEAR || || Legal base || Estimated needs || Changes to 2013

|| || || 2013 (1) || 2013 adjusted || 2014 (2)

Annex IV to Council Regulation (EC) No 73/2009 || || || 40 165.0 || 40 530.5 || 541.9

Phasing-in EU 10 || || || || || 616.1

Health Check || || || || || -64.3

Previous reforms || || || || || -9.9

TOTAL 05 03 || || || || ||

TOTAL EXPENDITURE || || || 40 165.0 || 40 530.5 || 41 072.4

Notes:

(1)           The
2013 amount includes an estimate of wine grubbing-up 2012.

(2)           The
extended net ceilings include an
estimate of the wine transfers to SPS based on the decisions taken by the Member
States for 2013.

Table 8: Calculation of the financial
impact of the CAP reform proposals as regards rural development

In million EUR (current prices)

BUDGET YEAR || || Legal base || Rural development allocation || Changes to 2013 ||

|| || || 2013 || 2013 adjusted (1) || 2014 || 2015 || 2016 || 2017 || 2018 || 2019 || 2020 || TOTAL 2014-2020

Rural development programmes || || || 14 788.9 || 14 423.4 || || || || || || || ||

Aid for cotton - Restructuring || (2) || || || || 4.0 || 4.0 || 4.0 || 4.0 || 4.0 || 4.0 || 4.0 || 28.0

Product of capping of direct aids || || || || || || 164.1 || 172.1 || 184.7 || 185.6 || 185.6 || 185.6 || 1 077.7

RD envelope excluding technical assistance || (3) || || || || -8.5 || -8.5 || -8.5 || -8.5 || -8.5 || -8.5 || -8.5 || -59.4

Technical assistance || (3) || || 27.6 || 27.6 || 8.5 || 3.5 || 3.5 || 3.5 || 3.5 || 3.5 || 3.5 || 29.4

Prize for local innovative co-operation projects || (4) || || N.A. || N.A. || 0.0 || 5.0 || 5.0 || 5.0 || 5.0 || 5.0 || 5.0 || 30.0

TOTAL 05 04 || || || || || || || || || || || ||

Net effect of reform proposals || || || || || 4.0 || 168.1 || 176.1 || 188.7 || 189.6 || 189.6 || 189.6 || 1 105.7

TOTAL EXPENDITURE (before capping) || || || 14 816.6 || 14 451.1 || 14 455.1 || 14 455.1 || 14 455.1 || 14 455.1 || 14 455.1 || 14 455.1 || 14 455.1 || 101 185.5

TOTAL EXPENDITURE (after capping) || || || 14 816.6 || 14 451.1 || 14 455.1 || 14 619.2 || 14 627.2 || 14 639.8 || 14 640.7 || 14 640.7 || 14 640.7 || 102 263.2

Notes:

(1)           Adjustments
in line with the existing legislation only applicable until the end of
financial year 2013.

(2)           The amounts in table 1
(section 3.1) are in line with those in the Commission communication "A
Budget for Europe 2020" (COM(2011)500 final). However, it remains to be
decided if the MFF will reflect the transfer that is proposed for the envelope
of one Member State of the cotton national restructuring programme to rural
development as from 2014, implying an adjustment (4 million EUR per year) of
the amounts for respectively the EAGF sub-ceiling and for pillar 2. In table 8
above, the amounts have been transferred, irrespective of them being reflected
in the MFF.

(3)           The
2013 amount for technical assistance was fixed based on the initial rural
development envelope (transfers from pillar 1 not included).

Technical assistance for 2014-2020 is fixed at 0.25%
of the total rural development envelope.

(4)           Covered
by the amount available for technical assistance.

Heading of multiannual financial framework: || 5 || " Administrative expenditure "

EUR million (to 3 decimal places)

Note:     It is estimated that the
legislative proposals will have no impact on appropriations of an
administrative nature, i.e. it is the intention that the legislative framework
can be implemented with the present level of human resources and administrative
expenditure.

|| || || Year 2014 || Year 2015 || Year 2016 || Year 2017 || Year 2018 || Year 2019 || Year 2020 || TOTAL

DG: AGRI ||

 Human resources || 136.998 || 136.998 || 136.998 || 136.998 || 136.998 || 136.998 || 136.998 || 958.986

 Other administrative expenditure || 9.704 || 9.704 || 9.704 || 9.704 || 9.704 || 9.704 || 9.704 || 67.928

TOTAL DG AGRI || Appropriations || 146.702 || 146.702 || 146.702 || 146.702 || 146.702 || 146.702 || 146.702 || 1 026.914

TOTAL appropriations under HEADING 5 of the multiannual financial framework || (Total commitments = Total payments) || 146.702 || 146.702 || 146.702 || 146.702 || 146.702 || 146.702 || 146.702 || 1 026.914

EUR million (to 3 decimal places)

|| || || Year N[52] || Year N+1 || Year N+2 || Year N+3 || ... enter as many years as necessary to show the duration of the impact (see point 1.6) || TOTAL

TOTAL appropriations under HEADINGS 1 to 5 of the multiannual financial framework || Commitments || || || || || || || ||

Payments || || || || || || || ||

3.2.2.
Estimated impact on operational appropriations

–  ̈  The
proposal/initiative does not require the use of operational appropriations

– x   The proposal/initiative requires the use of operational
appropriations, as explained below:

Commitment appropriations in EUR million (to 3 decimal
places)

Indicate objectives and outputs ò || || || Year 2014 || Year 2015 || Year 2016 || Year 2017 || Year 2018 || Year 2019 || Year 2020 || TOTAL

OUTPUTS

Type of output || Average cost of the output || Number of outputs || Cost || Number of outputs || Cost || Number of outputs || Cost || Number of outputs || Cost || Number of outputs || Cost || Number of outputs || Cost || Number of outputs || Cost || Total number of outputs || Total cost

SPECIFIC OBJECTIVE No 5: To improve the competitiveness of the agricultural sector and enhance its value share in the food chain || || || || || || || || || || || || || || || ||

- Fruit & vegetables: Marketing through producer organisations (POs)[53] || Propor-tion of the value of produc-tion marke-ted through POs in value of the total produc-tion || || || 830.0 || || 830.0 || || 830.0 || || 830.0 || || 830.0 || || 830.0 || || 830.0 || || 5 810.0

- Wine: National envelope – Restructuring53 || Number of hectares || || 54 326 || 475.1 || 54 326 || 475.1 || 54 326 || 475.1 || 54 326 || 475.1 || 54 326 || 475.1 || 54 326 || 475.1 || 54 326 || 475.1 || || 3 326.0

- Wine: National envelope – Investments53 || || || 1 147 || 178.9 || 1 147 || 178.9 || 1 147 || 178.9 || 1 147 || 178.9 || 1 147 || 178.9 || 1 147 || 178.9 || 1 147 || 178.9 || || 1 252.6

- Wine: National envelope – By-product distillation53 || Hecto-litres || || 700 000 || 98.1 || 700 000 || 98.1 || 700 000 || 98.1 || 700 000 || 98.1 || 700 000 || 98.1 || 700 000 || 98.1 || 700 000 || 98.1 || || 686.4

- Wine: National envelope – Potable alcohol53 || Number of hectares || || 32 754 || 14.2 || 32 754 || 14.2 || 32 754 || 14.2 || 32 754 || 14.2 || 32 754 || 14.2 || 32 754 || 14.2 || 32 754 || 14.2 || || 14.2

- Wine: National envelope – Use of concentrated must53 || Hecto-litres || || 9 || 37.4 || 9 || 37.4 || 9 || 37.4 || 9 || 37.4 || 9 || 37.4 || 9 || 37.4 || 9 || 37.4 || || 261.8

- Wine: National envelope – promotion53 || || || || 267.9 || || 267.9 || || 267.9 || || 267.9 || || 267.9 || || 267.9 || || 267.9 || || 1 875.3

- Other || || || || 720.2 || || 739.6 || || 768.7 || || 797.7 || || 820.3 || || 808.8 || || 797.1 || || 5 452.3

Sub-total for specific objective N°5 || || 2 621.8 || || 2 641.2 || || 2 670.3 || || 2 699.3 || || 2 721.9 || || 2 710.4 || || 2 698.7 || || 18 763.5

SPECIFIC OBJECTIVE No 6: To contribute to farm incomes and limit farm income variability || || || || || || || || || || || || || || || ||

- Direct income support[54] || Number of hectares paid (in million) || || 161.014 || 42 876.4 || 161.014 || 43 080.6 || 161.014 || 43 297.1 || 161.014 || 43 488.1 || 161.014 || 43 454.3 || 161.014 || 43 454.3 || 161.014 || 43 454.3 || 161.014 || 303 105.0

Sub-total for specific objective N°6 || || 42 876.4 || || 43 080.6 || || 43 297.1 || || 43 488.1 || || 43 454.3 || || 43 454.3 || || 43 454.3 || || 303 105.0

TOTAL COST || || || || || || || || || || || || || || || ||

Note: For specific objectives 1 to 4 and 7
to 10, the outputs are still to be determined (see section 1.4.2 above).

3.2.3.
Estimated impact on appropriations of an
administrative nature
3.2.3.1. Summary

–  ̈  The
proposal/initiative does not require the use of administrative appropriations

– x   The proposal/initiative requires the use of administrative
appropriations, as explained below:

EUR million (to 3 decimal places)

|| Year 2014 || Year 2015 || Year 2016 || Year 2017 || Year 2018 || Year 2019 || Year 2020 || TOTAL

HEADING 5 of the multiannual financial framework || || || || || || || ||

Human resources [55] || 136.998 || 136.998 || 136.998 || 136.998 || 136.998 || 136.998 || 136.998 || 958.986

Other administrative expenditure || 9.704 || 9.704 || 9.704 || 9.704 || 9.704 || 9.704 || 9.704 || 67.928

Subtotal HEADING 5 of the multiannual financial framework || || || || || || || ||

Outside HEADING 5 of the multiannual financial framework || || || || || || || ||

Human resources || || || || || || || ||

Other expenditure of an administrative nature || || || || || || || ||

Subtotal outside HEADING 5 of the multiannual financial framework || || || || || || || ||

TOTAL || 146.702 || 146.702 || 146.702 || 146.702 || 146.702 || 146.702 || 146.702 || 1 026.914

3.2.3.2.
 Estimated requirements of human resources

–  ̈  The
proposal/initiative does not require the use of human resources

– x   The proposal/initiative requires the use of human resources, as
explained below:

Note: It is estimated that the legislative
proposals will have no impact on appropriations of an administrative nature,
i.e. it is the intention that the legislative framework can be implemented with
the present level of human resources and administrative expenditure. The
figures for the period 2014-2020 are based on the situation for 2011.

Estimate to be expressed in full amounts
(or at most to one decimal place)

|| Year 2014 || Year 2015 || Year 2016 || Year 2017 || Year 2018 || Year 2019 || Year 2020

 Establishment plan posts (officials and temporary agents) ||

XX 01 01 01 (Headquarters and Commission’s Representation Offices) || 1 034 || 1 034 || 1 034 || 1 034 || 1 034 || 1 034 || 1 034

XX 01 01 02 (Delegations) || 3 || 3 || 3 || 3 || 3 || 3 || 3

XX 01 05 01 (Indirect research) || || || || || || ||

10 01 05 01 (Direct research) || || || || || || ||

 External personnel (in Full Time Equivalent unit: FTE)[56] ||

XX 01 02 01 (CA, INT, SNE from the "global envelope") || 78 || 78 || 78 || 78 || 78 || 78 || 78

XX 01 02 02 (CA, INT, JED, LA and SNE in the delegations) || || || || || || ||

XX 01 04 yy || - at Headquarters || || || || || || ||

- in delegations || || || || || || ||

XX 01 05 02 (CA, INT, SNE - Indirect research) || || || || || || ||

10 01 05 02 (CA, INT, SNE - Direct research) || || || || || || ||

Other budget lines (specify) || || || || || || ||

TOTAL[57] || 1 115 || 1 115 || 1 115 || 1 115 || 1 115 || 1 115 || 1 115

XX is the
policy area or budget title concerned.

The human resources required
will be met by staff from the DG who are already assigned to management of the action
and/or have been redeployed within the DG, together if necessary with any
additional allocation which may be granted to the managing DG under the annual
allocation procedure and in the light of budgetary constraints.

Description of
tasks to be carried out:

Officials and temporary agents ||

External personnel ||

3.2.4.
Compatibility with the current multiannual
financial framework

– x   Proposal/initiative is compatible with the PROPOSALS FOR THE
2014-2020 multiannual financial framework.

–  ̈  Proposal/initiative
will entail reprogramming of the relevant heading in the multiannual financial
framework.

–  ̈  Proposal/initiative
requires application of the flexibility instrument or revision of the multiannual
financial framework.

3.2.5.
Third-party contributions

– The proposal/initiative does not provide for co-financing by third
parties

– X  The proposal regarding rural development (EAFRD) provides for the
co-financing estimated below:

Appropriations in EUR million (to 3 decimal places)

|| Year 2014 || Year 2015 || Year 2016 || Year 2017 || Year 2018 || Year 2019 || Year 2020 || Total

Specify the co-financing body || MS || MS || MS || MS || MS || MS || MS || MS

TOTAL appropriations cofinanced [58] || To be determined || To be determined || To be determined || To be determined || To be determined || To be determined || To be determined || To be determined

3.3.
Estimated impact on revenue

– x   Proposal/initiative has no financial impact on revenue.

–  ̈  Proposal/initiative
has the following financial impact:

–
x   on own resources

–
x   on miscellaneous revenue

EUR million (to 3 decimal places)

Budget revenue line: || Appropriations available for the ongoing budget year || Impact of the proposal/initiative[59]

Year N || Year N+1 || Year N+2 || Year N+3 || ... insert as many columns as necessary in order to reflect the duration of the impact (see point 1.6)

|| || || || || || || ||

For miscellaneous
assigned revenue, specify the budget expenditure line(s) affected.

See tables 2 and 3 in section 3.2.1.

[1]               Communication from the Commission to the European
Parliament, the Council, the European Economic and Social Committee and the
Committee of the Regions A budget for Europe 2020, COM(2011)500 final,
29.6.2011.

[2]               Communication from the Commission to the European
Parliament, the Council, the European Economic and Social Committee and the
Committee of the Regions The CAP towards 2020: meeting the food, natural
resources and territorial challenges of the future, COM(2010)672 final,
18.11.2010.

[3]               See in particular the European Parliament resolution
of 23 June 2011, 2011/2015(INI), and the Presidency conclusions of 18.3.2011.

[4]               The current legislative framework comprises Council
Regulation (EC) No 73/2009 (direct payments), Council Regulation (EC) No
1234/2007 (market instruments), Council Regulation (EC) No 1698/2005 (rural
development) and Council Regulation (EC) No 1290/2005 (financing).

[5]               Proposal for a Regulation of
the European Parliament and of the Council laying down common provisions on the
European Regional Development Fund, the European Social Fund, the Cohesion
Fund, the European Agricultural Fund for Rural Development and the European
Maritime and Fisheries Fund covered by the Common Strategic Framework and
laying down general provisions on the European Regional Development Fund, the
European Social Fund and the Cohesion Fund and repealing Regulation (EC) No
1083/2006, COM(2011)615 of 6.10.2011.

[6]               See Annex 9 of the impact assessment for an overview
of the 517 contributions received.

[7]               OJ C [...], [...], p. [...].

[8]               OJ C [...], [...], p. [...].

[9]               OJ C [...], [...], p. [...].

[10]             OJ C [...], [...], p. [...].

[11]             COM(2010) 672 final, 18.11.2010.

[12]             OJ L 277, 21.10.2005, p. 1.

[13]             COM(2010) 2020 final, 3.3.2010.

[14]             OJ L [...], [...], p. [...].

[15]             OJ L [...], [...], p. [...].

[16]             Council
Resolution of 15 December 1998 on a forestry strategy for the European Union, OJ C 56, 26/2/1999, p. 1. [To be replaced by new
strategyto be adopted by the end of 2013]

[17]             OJ L 20, 26.1.2010, p.
7.

[18]             OJ L 206, 22.7.1992, p. 7.

[19]             OJ L 327, 22.12.2000,
p. 1.

[20]             OJ L [...], [...], p. [...].

[21]             Council Regulation (EC) No 994/98 of 7 May 1998 on the
application of Articles 92 and 93 (now 107 and 108 respectively) of the Treaty
establishing the European Community to certain categories of horizontal State
aid, OJ L 142, 14.05.1998, p.1.

[22]             OJ L 55, 28.2.2011, p. 13.

[23]             OJ L 154, 21.6.2003, p. 1.

[24]             OJ L 134, 30.4.2004, p. 114.

[25]             OJ L 124, 20.5.2003, p. 36.

[26]             OJ L 38, 12.2.2000, p. 1.

[27]             OJ L 224, 18.8.1990, p. 19.

[28]             OJ L [...], [...], p. [...].

[29]             Commission Communication – EU best practice guidelines
for voluntary certification schemes for agricultural products and foodstuffs,
OJ C 341, 16.12.2010, p. 5.

[30]             OJ L 184, 27.7.1993, p. 1.

[31]             Second Ministerial Conference on the Protection of
Forests in Europe, 16-17 June 1993, Helsinki/Finland, "Resolution H1 - General
Guidelines for the Sustainable Management of Forests in Europe".

[32]             OJ L 189, 20.7.2007, p. 1.

[33]             Regulation (EU) No [...] of [...] of the European
Parliament and the Council on the European Globalisation Adjustment Fund
(2014-2020), OJ L [...], [...], p. [...].

[34]

[35]             Communication from the Commission to the European
Parliament, the Council, the European Economic and Social Committee and the
Committee of the Regions: Europe 2020 Flagship Initiative Innovation Union
(COM(2010) 546 final of 6.10.2010). Conclusions of the Competitiveness Council:
Conclusions on Innovation Union for Europe (doc.
17165/10 of 26.11.2010).

[36]             Communication from the Commission to the European Parliament, the Council, the European
Economic and Social Committee and the Committee of the Regions: Think Small First - A Small Business Act for Europe (COM(2008) 394
of 23.6.2008); Conclusions of the Competitiveness Council: Think Small First –
A Small Business Act for Europe (doc. 16788/08, 1.12.2008); Communication from the Commission to the European Parliament, the Council, the
Economic and Social Committee and the Committee of the Regions: Review of the
"Small Business Act" for Europe (COM(2008) 78
final, 23.2.2011); Conclusions of the Competitiveness
Council: Conclusions on the Review of the "Small Business Act" for
Europe (doc. 10975/11 of 30.5.2011).

[37]             Conclusions of the Justice and
Home Affairs Council; Conclusion on further developing risk assessments for
disaster management in the European Union. 11-12 April 2011.

[38]             OJ L 48, 23.2.2011, p. 1

[39]             OJ L 327, 22.12.2000, p. 1.

[40]             OJ L 312, 22.11.2008, p. 3.

[41]             OJ L 140, 5.6.2009, p. 16.

[42]             Reference to be included

[43]             Communication from the Commission to the European
Parliament, the Council, the European Economic and Social Committee and the
Committee of the Regions: A Digital Agenda for Europe (COM(2010) 245 final/2 of
26.8.2010); Commission Staff Working Paper: Digital
Agenda Scoreboard (SEC(2011) 708 of 31.5.2011). Scoreboard: http://ec.europa.eu/information_society/digital-agenda/scoreboard/index_en.htm

[44]             If a Country Specific Council Recommendation is in
place, directly linked to this conditionality provision, then the assessment of
its fulfilment will take account of the assessment of progress made on the
fulfilment of the Country Specific Council Recommendation.

[45]             Deadlines for delivery on all elements here contained
where it concerns the implementation of the strategy may be set during the
programme implementation period.

[46]             ABM: Activity-Based Management – ABB: Activity-Based Budgeting.

[47]             As referred to in Article 49(6)(a) or (b) of the
Financial Regulation.

[48]             COM(2011)500 final of 29 June 2011.

[49]             Details of management modes and references to the
Financial Regulation may be found on the BudgWeb site: http://www.cc.cec/budg/man/budgmanag/budgmanag_en.html

[50]             As referred to in Article 185 of the Financial
Regulation.

[51]             Direct aids for the period
2014-2020 include an estimate of the wine transfers to SPS based on the
decisions taken by the Member States for 2013.

[52]             Year N is the year in which implementation of the
proposal/initiative starts.

[53]             Based on past execution and estimates in the 2012 Draft
Budget. For the producer organisations in the fruit & vegetables sector,
the amounts are in line with the reform of that sector and, as already
indicated in the activity statements of the 2012 Draft Budget, outputs will
only be known in late 2011.

[54]             Based on potentially eligible areas for 2009.

[55]             Based on an average cost of 127 000 EUR for
establishment plan post of officials and temporary agents.

[56]             CA= Contract Agent; INT= agency staff ("Intérimaire");
JED= "Jeune Expert en Délégation" (Young Experts in
Delegations); LA= Local Agent; SNE= Seconded National Expert;

[57]             This does not include the sub-ceiling on budget line
05.010404.

[58]             This will be set out in the rural development
programmes to be submitted by the Member States.

[59]             As regards traditional own resources (customs duties,
sugar levies), the amounts indicated must be net amounts, i.e. gross amounts
after deduction of 25% for collection costs.