COMMISSION OF THE EUROPEAN COMMUNITIES 
C0MC93) 226 final 
Brussels, 18 May 1993 
POSSIBLE DEVELOPMENTS IN THE POLICY OF ARABLE LAND SET ASIDE 
REFLECTION PAPER OF THE COMMISSION 
POSSIBLE DEVELOPMENTS IN THE POLICY OF ARABLE LAND SET ASIDE 
REFLECTION PAPER OF THE COMMISSION 
I. INTRODUCTION 
1. The Commission has presented the Council with a proposal based on 
Article 7 of Regulation (EEC) N* 1765/92 on the addition rate of 
set aside to be applied in the case of non rotational set aside. 
This proposal was already foreseen in the regulation adopted last 
year and Is to be seen as part of last year's decisions. It does 
not involve any modification of the regulation or require a new 
consultation with Parliament. 
2. However, once a decision on non rotational set aside has been 
taken, a series of other questions on set aside will need to be 
addressed. Although some of the questions are matters of 
application, others are ones which could only be addressed by 
amending Regulation 1765/92 itself. This would, of course, involve 
a new consultation with Parliament. 
3. Although set aside was accepted by all the Member states and 
professional circles as a central element in the control of 
production, its practical application raises many questions. 
Numerous requests coming both from unions and national 
administrations have come out in favour of a simplification and a 
greater flexibility of the scheme. 
At the Agriculture Council of 26 and 27th April, the Commission 
declared that it would reflect on the means which, without 
affecting the effectiveness in terms of production control nor the 
cost of set aside, could offer farmers greater flexibility while 
improving the environmental contribution of set aside. 
4. The Commission wishes, before reaching its own conclusion on 
whether it is opportune to propose any amendments to Regulation 
1765/92 so soon after its adoption, to give interested parties who 
contributed to the debate which preceded the tabling of the 
detailed proposals on the reform of the CAP in October 1991, the 
opportunity to express their views. This reflection paper is 
intended to form the basis for this wide debate. 
- 2 -
It is based on the assumption that the Council will accept the 
Commission proposal that the rate of set aside in the case of non 
rotation will be 5 percentage points above the rate for rotational 
set aside. 
If it turns out that this 5 points higher rate is less effective in 
terms of production control than the rotating set aside, on a six 
year basis, then the arrangements will have to be reconsidered. 
I I. BACKGROUND 
5. The Community's first experiment with set aside was the five year 
set aside scheme introduced in 1988 as a structural stabiliser. It 
was hoped at the time of its introduction that this scheme would 
serve as a means of reducing cereals production hence reducTng the 
need for progressive price cuts under the market stabiliser. 
Although the scheme undoubtedly had some effect, it was less 
successful than had been hoped. This was partly because of the 
limited uptake of the scheme and partly because much of the land 
which was brought into it was of inferior quality. 
6. In the debates which preceded the reform proposals, a number of 
suggestions were made on the means by which set aside could make a 
better contribution to the control of production. The three main 
ones were that set aside should be made more efficient; that a 
distinction should be made in the application of other means of 
curbing production between those who participated in set aside and 
those who did not; and that the incentive to participate should be 
increased. 
7. The proposals which the Commission made in the context of the 
reform of the common agricultural policy responded to each of these 
three suggestions: -
(1) The reform set aside scheme was to be rotational, so that in 
the course of the rotation period all or virtually all of the 
land of the producers who participated in the scheme would be 
covered and the opportunity to use marginal land would thus be 
Iimited. 
- 3 -
(2) Producers who chose not to participate in set aside could 
obtain compensation for price cuts only on the equivalent of 
the first 92 tonnes of their cereals output. 
(3) Producers who wished to benefit from compensation on more than 
the equivalent of 92 tonnes of cereals or who wished to receive 
the specific payments available on maize, oilseeds and proteins 
could only do so if they joined the set aside scheme. 
The Council accepted these proposals but in the course of the 
negotiation two further points were added. First, as an alternative 
to the system of individual base areas under which each producers 
area eligible for arable payments or set aside is limited to the 
area he cultivated in the reference period, the facilrty was 
introduced to operate on the basis of a regional base area. If the 
regional base area is exceeded, all arable payments are reduced 
proportionately and a supplementary unpaid set aside is applied the 
following year. Second, provision was made for non rotational set 
aside, at an additional rate to be decided by the Council. 
In the sense of the reform of the CAP, set aside has to be 
considered as a conjunctural supply control measure which works on 
a voluntary basis. Its acceptance by farmers is a function of the 
compensatory aids which are conditional upon it. Other criteria 
must however be taken into consideration be it amongst farmers, the 
public, or national administrations. 
Farmers have shown great misgivings about a measure which 
temporarily deprives the land of its primary purpose. Even though 
everybody might agree on the need to control surplus agricultural 
production, there is reason to think that each farmer taken 
individually will try to minimise the effect of set aside. This 
creates a conflict of interest between producers collectively, for 
whom the success of the scheme is vital to avoid the need for other 
restrictive measures, and producers individually for whom the 
maximum flexibility will be welcome. One must keep this conflict 
of interest in mind before introducing greater flexibility into set 
aside, to achieve the best possible application, in particular in 
order to enhance the rural environment. 
- 4 -
The pub I i c generally wi I I become aware of the impact of set aside 
on the countryside and, will wish to see some public good 
especially in terms of environment or amenity in return for the 
public investment in the scheme. 
Administrât ive authorities will be confronted with the need to 
control the application of set aside by a very large number of 
producers. They will wish the rules they have to control to be as 
simple as possible. 
10. In evaluating suggestions for change the impact on each of these 
sometimes conflicting interests will have to be assessed and a 
balance struck. In striking a balance, however, the one 
consideration which must not be sacrificed is the effectiveness of 
the system as a means of controlling production. The baseline 
against which proposed changes are to be measured is the current 
regulations under which: -
(a) The rate applied for rotating set aside has been set by the 
Council at 15%. This rate may be changed by the Council if 
market conditions so require. 
(b) On this basis, the rotation period has been set at 6 years by 
the Commission, so as to cover 90% of the eligible arable land 
of an individual farm. 
(c) The principle of a non-rotating set aside was accepted by the 
Council on condition of a higher percentage rate of set aside. 
This percentage must be fixed by the Council before the 31st of 
July 1993. 
(d) If the sum of the individual areas for which compensatory 
payments are claimed go over the regional base area, an 
extraordinary set aside is imposed at a rate proportional to 
the overshoot. 
- 5 -
III. THE ISSUES TO BE DISCUSSED 
A. ISSUES RELATED TO NON-ROTATIONAL SET ASIDE 
11. The definition of non-rotating set aside and its combination with 
rotational set aside. 
One understands by non-rotating set aside the withdrawal of a known 
and unchanging part of the arable area for a minimum period which 
is yet to be defined but which should not be less than five years. 
This type of set aside presents a certain number of advantages. 
12. The management of this system is simpler, both in terms of 
administration and control, because it is the same fields- which 
remain set aside throughout a known period. Also, on a non-
rotating set aside one can do things which are environmentally 
beneficial. Indeed, once the same field is to be left fallow for a 
certain length of time, one can very well imagine improvements such 
as : re-establishment of a natural flora, improvements for wildlife 
and game, maintenance of riverbanks, minor improvements to rural 
amenity, etc. 
13. Where a farmer opts for fixed (non-rotational) set aside, a change 
to the area withdrawn has to be permitted each year but only to 
cope with possible changes, either in the total area farmed, or in 
the annual rate of set aside decided by the Council. 
14. The question has often been raised as to the possibility of doing a 
combination of fixed and rotating set aside on the same farm. Such 
a combination is not ideal from the point of view of effectiveness, 
nor simplicity. On the other hand, the extra flexibility is an 
advantage to the farmer and the presence of fixed set aside 
provides environmental opportunities. If the combination appears 
to be acceptable on these counts, there remains the question of the 
rate to be applied. The lower effectiveness of the combination in 
terms of production control implies that this rate should be higher 
than the rotational rate. A weighted rate between the rotational 
and non-rotational rates would make the situation more complex and 
difficult to control. Therefore, if such a combination of 
rotational and fixed set aside on the same farm were to be allowed, 
only the fixed rate should apply. 
- 6 -
15. Could the choice between rotation and non rotation be made at 
national rather than producer level 7 
It is quite obvious that if producers have a choice between 
rotation and non rotation at a higher rate, then non rotation will 
be taken up by those producers who have the widest variation in 
land quality. Thus, if there is a choice, the difference in the 
slippage rate between rotational set aside and non rotational will 
be greater. Furthermore, non rotational set aside may in some 
circumstances be preferable to rotational set aside for 
environmental reasons, for example because rotational set aside may 
involve higher leaching of nutrients left over from a previous crop 
or because, where land is set aside for a predetermined period of 
years, a wider range of environmental conditions can be required. 
On the basis of these two arguments it has been suggested that 
member states should be permitted to require that their producers 
practice only non rotational set aside and that, in return for 
this, the additional rate should be lower than in member states 
which allow a free choice. 
16. It is clear, however, that this option for member states would 
represent a significant reduction in the flexibility available to 
individual producers who could feel themselves discriminated 
against if the option of rotational set aside was denied to them. 
Conversely, producers who for their own reasons wished to adopt non 
rotational set aside could feel themselves adversely affected by a 
decision of their member state to allow rotation, hence denying 
them the opportunity to benefit from the lower additional rate. 
17. For these reasons the Commission's view is that there are not 
sufficient positive advantages in allowing this option to member 
states to outweigh the general principle that producers should be 
treated equally which implies that they should all have the same 
option to chose between rotation and non rotation. 
18. If the non rotational set aside is regarded as making it possible 
to obtain a public good in terms of environmental benefit, a more 
appropriate means of achieving this would be to offer a higher set 
aside compensation in cases where defined environmental conditions 
were fulfilled. The Commission would be prepared to propose such an 
- 7 -
additional payment when the financial situation of the Community 
makes this possible. 
B. OTHER ISSUES 
19. Should producers be paid the compensatory aid on land which is set 
aside in excess of the minimum required to confer eligibility to 
compensatory aids 7 
Normally producers will not want to set aside more than the 
minimum. The aid paid on set aside land itself provides only part 
of the incentive to set land aside and most producers should find 
that set aside land provides a lower return than planted land. 
Nevertheless, some producers may have land which satisfies the 
criteria for inclusion in the arable scheme yet which, for one 
reason or another, is not worth cultivating to obtain a crop which 
will be sold at the prices foreseen at the end of transition. It is 
entirely within the spirit of a decoupled compensatory aid that it 
should not be subject to the obligation to produce. 
On the other hand, considering the isk. of abandonment of farms or 
even of desertification that ma exist in some regions, the 
Commission thinks that Member states should have the possibility of 
setting a maximum authorised rate of set aside. 
20. The period during which land included in rotationai set aside is to 
be taken out of cultivation 
In the detailed rules on rotational set aside, the period during 
which the land must be set aside has been set at seven months, with 
some flexibility given to member states to determine the precise 
dates. In practice member states have opted for a period which ends 
in mid July. The seven months period and the end date was decided 
in order to allow producers to start cultivation for the following 
years crops. There is evidence, however, that some producers are 
planning to take advantage of this relatively early end date to 
produce a catch crop, for example of vegetables, before preparing 
for a subsequent arable crop. 
- 8 -
Although this is not in conflict with the existing rules, it is not 
in line with their intentions and the Commission has received 
representations from existing vegetable producers who, not 
unreasonably, regard the invasion of their markets by producers 
whose costs are partly covered by set aside payments as a 
distortion of competition. 
21. This problem would not recur under the non-rotational set aside 
option. Otherwise, two other possible solutions could be found and 
applied next year : Either the set aside period could be prolonged. 
Or the taking of all or some crops from set aside land during the 
same calendar year could be forbidden. One or the other will have 
to be chosen although it is clear in advance, that the first 
solution would be unwelcome to arable farmers, as it would- limit 
their options with regard to the next arable crop they could plant 
and that the second would pose additional control problems for 
nat ional administrât ions. 
22. Producers who wish to opt for a set aside rotation of less than six 
years 
There are a variety of reasons why producers may wish to opt for a 
shorter rotation than six years. Their crop rotation may be for a 
different period than six years and they may wish to incorporate 
set aside into that rotation so as to use it in place of their 
least productive crop. Or they may wish to avoid ever entering 
their best land into set aside. Or they may simply find a six year 
pIann i ng hor izon too Iong. 
23. There is no doubt that a rotation period of less than six years 
would mean a loss of effectiveness in the scheme, to the extent 
that the most productive parts of the farm will entirely escape 
from being set aside. Consequently, if one were to go for allowing 
set aside with a shorter rotation period, the non-rotational rate 
of set aside would have to be applied so as to preserve the effect 
on production control. If, however, it turns out that the 
effectiveness in terms of production control of a shorter rotation 
period is less under these arrangements, one would have to 
reconsider them. 
- 9 -
24. Could producers be allowed to transfer set aside to others and 
still remain eligible for the arable compensatory payments ? 
Transfer of the set aside obligation is forseen under the very 
restrictive conditions of article 7.6 of Regulation 1765/92 in the 
case of national environmental rules having the implication for a 
farmer who sets aside part of his arable land to be forced to 
reduce his animal production. 
25. At the same time, the Commission has adopted strict rules to limit 
the risk that producers in productive regions may buy up or lease 
poor land elsewhere in their member states to fulfil their set 
aside obligations, devices whose economic impact could be similar 
to that of transferred set aside. """ 
26. There are two major reasons for hesitation over the introduction of 
a facility for transferred set aside. First, there is a risk that 
slippage will be greater than on an individual holding both because 
of differences in land quality and because it is likely in general 
that the farmers who wish to transfer their set aside will be more 
dynamic producers than those who are prepared to receive it. 
Furthermore providing this facility would undermine the 
Justification for the strict rules which apply to newly purchased 
or leased land and to holdings which have land in several yield 
regions, which would involve a further risk of slippage. Second, 
the development of farms or even areas devoted largely to carrying 
out the set aside obligations of others could amount to a form of 
desertification which, is inconsistent with the rural development 
objective of the reform. 
27. There might however be circumstances in which transferring 
obligations would allow a more rational land use policy to be 
pursued and concentrating set aside into a number of clearly 
defined zones could ease the task of inspection and control. 
28. In the Commission's view, given the very real risk of a 
significantly higher rate of slippage, any scheme to allow the 
transfer of set aside obligations must be very prudently 
constructed. It should require the presentation of plans to the 
- 10 -
Commission giving full assurance that the general objectives of set 
aside would not be undermined. These plans should mainly involve 
the limitation of transfers to the immediate neighbourhood of the 
transferring farm and an additional rate of set aside beyond the 
normal addition for non rotational set aside. The only derogation 
from the general principal of limitation to the neighbourhood could 
be cases where a member state had good reasons to prescribe a 
particular area for the respect of set aside in order to achieve 
some specific environmental objectives and could give precise data 
on the productivity of the area concerned so that any additional 
slippage could be evaluated in advance and offset. 
29. Should land which is Included in the 20 year set aside schemes 
foreseen in the accompanying measures be allowed to count as-arable 
set aside provided that the land concerned meets the definition of 
arable land i.e. meets the conditions of Article 9 of Regulation 
(EEC) no 1765/92 7 
This issue was debated during the reform negotiations. The 
Commission position, which was upheld in the Council's decisions, 
was that it should not. The Commission position rests on three main 
arguments: -
(a) The primary objectives of the two schemes are different. The 20 
year set aside is primarily an environmental measure which only 
has production restraint as a subordinate objective. 
Conversely, although it is intended that there should be 
environmental benefit from it, the set aside scheme is 
primarily a conjunctural measure to adjust production to 
prevailing market circumstances. Two schemes with separate 
primary objectives should not be confused. 
(b) The financial incentive to participate in each of the schemes 
is related to its own primary objective. 
(c) The intention is that land in the arable set aside scheme 
should, so far as possible, be of average arable quality. But 
it is unlikely that producers will commit themselves to taking 
land of average arable quality out of production for 20 years. 
- 11 -
This final argument has to be seen in the context of the 
Council decision, at the final stage of the negotiation, to 
accept non rotation in the arable scheme and its recognition at 
the same time that land in non rotational set aside is likely, 
on average, to be of lower productive potential than land in 
rotational set aside. Even so, however, there is a difference 
between a commitment to take land into set aside for five years 
and one to take it into set aside for a generation. 
30. The case against the Commission's position which has been advanced 
is that if the land in the 20 year schemes is not allowed to count 
as arable set aside, the 20 year scheme will not be attractive 
despite the generous level of aid which it can provide, as farmers 
will not be prepared to set aside under two schemes at t&e same 
time. Thus it is argued that the arable scheme will undermine the 
potential success of the 20 year scheme. 
31. It is true that if a member state opts for the individual base area 
system there could be a direct clash between the two schemes. With 
the individual base area system, a producer has the obligation, if 
he wishes to receive the arable compensatory payments, to set aside 
a proportion of his base area and he may be unable to do this if 
part of his base area is occupied by 20 year set aside. This 
problem (which is theoretical at present as no member state is 
applying an individual base area system) could be readily resolved 
by allowing a producer to reduce his base area by all or part of 
the area devoted to 20 year set aside. With the regional base area 
system, however, the potential conflict between the two systems is 
not so evident. A producer will, in any event, not put into the 20 
year scheme land which he sees as part of his arable production 
planning. And arable set aside is designed precisely to be an 
integral part of arable planning. 
32. If, however, the argument is that member states wish to encourage 
or require long term environmental commitments from producers who 
opt for non rotational set aside, then a more appropriate response 
would be to guarantee to those producers the continuance of the 
arable set aside payment for the period for which the producer 
himself undertakes to keep his land in the scheme. 
- 12 -
IV. CONCLUSION 
33. The object of this paper has not been to formulate precise 
proposals but to stimulate debate. Nevertheless it has attempted to 
suggest a means of approaching the various questions which have 
been raised. It recommends that in the larger debate which should 
now take place the first criterion for judging each possible 
solution should be the effectiveness of arable set aside. Provided 
that this can be assured, then the key considerations to be taken 
into account, apart from the obvious necessity of budgetary 
constraints, are administrative simplicity, acceptability to 
producers and the public interest In environment and amenity. 
Although the various considerations may appear to be in conflict, 
neither producers nor public administrations nor the ^public 
generally will regard set aside as a success if, despite all the 
effort and finance invested, it fails in its primary objective of 
resolving the problem of surplus production. 

ISSN 0254-1475 
COM(93) 226 final 
DOCUMENTS 
EN 03 
Catalogiieiiiiimbtr : CB-CO-93-267-Ei ~C 
ISBN 92-77-56170-X 
Office for Official Publications of the European Communities 
L-2985 Luxembourg ]