98/0113 (CNS) Proposal for a COUNCIL REGULATION (EC) No . . .

of . . .

establishing common rules for direct support schemes under the common agricultural policy (98/C 170/08)

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Community, and in particular Article 43 thereof,

Having regard to the proposal from the Commission,

Having regard to the opinion of the European Parliament,

Having regard to the opinion of the Economic and Social Committee,

Whereas for direct payments under the various income support schemes in the common agricultural policy some common conditions should be established;

Whereas payments foreseen under Community support schemes should be made by the competent national authorities in full to beneficiaries without any prejudice of reductions explicitly foreseen in the present Regulation;

Whereas, with respect of better integrating the environment into the common market organisations, Member States should apply appropriate environmental measures in relation to agricultural land and agricultural production; whereas Member States should decide the consequences in case of not observing mandatory environmental requirements and that they should be enabled to reduce or even cancel benefits accruing from support schemes where such environmental requirements are not respected; whereas such measures should be taken by Member States notwithstanding the possibility of granting aids for facultative agri-environmental undertakings;

Whereas, in order to stabilise the employment situation in agriculture and thus contributing to a fair standard of living for the agricultural community, including all persons engaged in agriculture, Member States should be authorised to reduce direct payments to farmers in cases where the labour force used on their holding falls short of limits to be determined; whereas in order to maintain in particular agricultural productivity, such reductions such reductions should, however, not exceed 20 % of the total amount of payments;

Whereas modalities for reductions of payments for environmental reasons or for reasons of insufficient labour force should be determined by Member States on the basis of objective criteria; whereas Member States should be enabled to use amounts made available from payment reductions for additional agri-environmental measures in the framework of rural development support provided for under Regulation (EC) No . . .;

Whereas direct payments should be subject to an overall limit in order to take account for economics of scale and to avoid excessively high payments to single beneficiaries; whereas the application of such ceilings should not put into question the objective laid down in Article 39(1) of the Treaty to ensure a fair standard of living for the agricultural community and to stabilise markets; whereas overall ceilings for direct payments should be applied in a degressive way;

Whereas common support schemes have to be adapted to market developments, if necessary within short delays; whereas beneficiaries can, therefore, not rely on support conditions remaining unchanged and should be prepared to possible review of schemes in the light of market developments;

Whereas the support schemes under the common agricultural policy provide for direct income support in particular with a view to ensuring a fair standard of living for the agricultural community; whereas this objective is closely related to the maintainance of rural areas by enabling farmers to exercise genuine and serious agricultural activities; whereas, in order to avoid misallocations of Community funds, Member States should restrict, in an appropriate manner, the benefit of support payments to farmers who can demonstrate on the basis of the objective and verifiable elements that the main purpose of their support-related activities is of such a genuine and serious nature and thus is not primarily pursued to obtain support payments;

Whereas, in view of the significant budgetary implications of direct payment support and in order to better appraise their impact, Community schemes should be subject to a proper evaluation,

HAS ADOPTED THIS REGULATION:

Article 1 Scope

This Regulation shall apply to payments granted directly to farmers under support schemes in the framework of the common agricultural policy which are financed in full or in part by the 'Guarantee` section of the EAGGF, except those provided for under Regulation (EC) No . . . [Rural Development] (support schemes).

Article 2 Full payment

Payments under support schemes shall be made in full to the beneficiaries.

Article 3 Cross compliance

1. Member States shall take the environmental measures they consider to be appropriate in view of the specific situation of the agricultural land used and the production concerned. These measures may include support in return for agri-environmental undertakings, general mandatory environmental requirements and specific environmental requirements constituting a condition for direct payments.

2. Member States shall decide the sanctions which are appropriate and proportionate to the seriousness of the ecological consequences of not observing the mandatory environmental requirements. They may provide for a reduction or, where appropriate, cancellation of the benefits accruing from the support schemes concerned if such specific environmental requirements are not respected.

Article 4 Modulation

1. Member States may decide to reduce the amounts which would, but for this paragraph and before applying Article 6, be granted to farmers in respect of a given calendar year in cases where the labour force used on their holdings during that calendar year, expressed in annual work units, falls short of limits to be determined by the Member States.

'Annual work unit` shall mean the national or regional average annual working time of adult full-time farm workers employed throughout a calendar year.

2. The reduction of support to a farmer in respect of a given calendar year, resulting from the application of the measures referred to in paragraph 1, shall not exceed 20 % of the total amount of payments which would, but for paragraph 1, be granted to the farmer in respect of the calendar year concerned.

Article 5 Common provision

1. Member States shall apply the measures referred to in Articles 3 and 4 in such a way as to ensure equal treatment between farmers and to avoid market and competition distortions.

2. The difference between the amounts which would, but for Articles 3 and 4, be paid to farmers in a Member State in respect of a calendar year and the amounts calculated after application of those Articles, shall be available to the Member State concerned within time limits to be fixed under the procedure referred to in Article 11 as additional Community support for agri-environment in accordance with Articles 20 to 22 of Regulation (EC) No . . . [rural development].

Article 6 Ceiling

Where the total amount of payments which would, but for this Article, be granted to a farmer under the support schemes in respect of a given calendar year exceeds ECU 100 000, that amount shall be reduced by:

- 20 % of the part of that amount which exceeds ECU 100 000 but is not more than ECU 200 000, and

- 25 % of the part of that amount which exceeds ECU 200 000.

Article 7 Review

Support schemes shall be applied without prejudice to possible review at any moment in the light of market developments.

Article 8 Restriction of payments

Member States shall take the measures they consider to be necessary, taking account of the objectives of the support schemes to restrict the benefit of payments to farmers who, in the case of doubt, are able to demonstrate on the basis of the objective elements of all their income-related activities, with reference in particular to the legal, economic, social and agronomic aspects thereof, that they do not exercise support relevant activities predominantly for the purpose of obtaining the benefit of support payments.

Article 9 Evaluation

In order to gauge their effectiveness, payments under support schemes shall be subject to evaluation designed to appraise their impact with respect of their objectives and to analyse their effects on the relevant markets.

Article 10 Information of the Commission

Member States shall inform the Commission in detail on the measures taken to apply this Regulation.

Article 11 Definitions

For the purposes of this Regulation:

(a) 'farmer` shall mean an individual agricultural producer, whether a natural or legal person or a group of natural or legal persons, whatever legal status is granted the group and its members by national law, whose holding is within Community territory,

(b) 'holding` shall mean all the production units managed by a farmer situated within the same Member State's territory,

(c) payments to be granted in respect of a calendar year shall include payments to be granted in respect of other periods starting in that calendar year.

Article 12 Detailed rules

Detailed rules for the application of this Regulation including, in particular:

- the list of support schemes referred to in Article 1,

- the measures necessary to avoid Articles 3, 4 and 6 to be circumvented,

shall be adopted by the Commission according to the procedure referred to in Article . . . of Regulation (EC) No . . . [arable crops], the procedure laid down in Article 39 of Regulation (EC) No . . . [beef] or, as appropriate, the corresponding Articles in the other Regulations on the common organisation of agricultural markets.

Article 13 Entry into force

This Regulation shall enter into force on the day of its publication in the Official Journal of the European Communities.

It shall apply as from 1 January 2000.

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

Done at . . .

For the Council

. . .