EN Official Journal of the European Union C 175/19

Opinion of the Committee of the Regions on aid to farmers in areas with natural handicaps

(2010/C 175/05)

I. POLICY RECOMMENDATIONS

THE COMMITTEE OF THE REGIONS

Agricultural and rural development comments

1. Notes that the Communication of the European Commission clearly focuses on intermediate less-favoured areas, strongly supports the proposal of the EC to clarify the delimitation of intermediate LFA, and stresses that mountain areas are not directly concerned by this Communication and that the purpose is not to focus on links between the different categories of areas with natural handicaps;

2. Welcomes the working method proposed by the Commission, which is in line with the Committee's recommendations in its draft White Paper on Multi-Level Governance (1);

3. Points out that agriculture is a very important economic sector of the EU, providing employment for nearly 30 million people. The presence of farmers is essential in order to maintain the social fabric in rural areas and also to preserve the environment and landscape. It is also important to maintain agricultural production facilities throughout the EU in order to retain Europe's capacity to produce high quality food, a role which is becoming increasingly important, since climate change is reducing capacity in other parts of the world. The aid system supporting less favoured areas is vital in order to compensate disadvantages due to natural handicaps in certain areas and thus help to maintain farming there;

4. Emphasises that local and regional authorities are directly concerned by this Communication, since areas with natural handicaps represented 31,2 % of Europe's utilised agricultural area (UAA) in 2005, where agriculture is an important part of the economy;

5. Notes that since the beginning of 1975 the need for LFA measures has changed considerably. Appropriate land management in order to overcome the disadvantages due to natural handicaps has become a key priority. Agriculture in less-favoured areas also helps to maintain the attractiveness of a region, biodiversity and the cultural landscape;

6. Stresses that compensation payments should remain an instrument to compensate for disadvantages due to natural handicaps or adverse production conditions and that they are not intended as agri-environmental measures;

7. Underlines that the simulations requested must be intended as an exercise and not as a legal binding basis. In any case the CoR will re-examine the Commission's imminent proposals on the basis of an exhaustive and profound analysis of their expected impact;

8. Takes into account the remarks raised in the Report of the Court of Auditors declaring that the Commission puts forward insufficient reasons for continuing to use the current LFA classification, which is detrimental to the efficient and effective implementation of the aid scheme (par. 76);

Concrete aspects of delimiting LFAs (criteria, fine tuning, etc.):

9. Finds the decision to define bio-physical criteria in order to improve the identification of areas affected by natural handicaps to be an appropriate way of creating a more objective, coherent and comparable system which ensures that aid for these areas is distributed more equitably and efficiently;

10. Calls for simple and manageable common criteria as well as clear eligibility criteria to guarantee the transparency and comparability of payments. In this way an efficient compensation system in favour of agricultural activity and production capacity in areas with natural handicaps should be ensured. It is absolutely essential to ensure that any system is comprehensible for farmers, enforceable in court and manageable for the administration;

11. Proposes that the delimitation of areas affected by a single natural handicap should also be based on geographic and land-planning criteria, rather than only on bio-physical criteria, so as to take into account factors such as enclosure, access to infrastructure and the fragility of particular ecosystems;

12. Notes that the Communication suggests that an area should be classified as an LFA if at least 66 % of its utilised agricultural land meets at least one of the eight criteria. Whereas the whole exercise of zonage aims to support areas where it is crucial for maintaining agriculture, the proposed limit should not be too high and lead to the potential exclusion of areas which suffer from considerable natural handicaps. Thus, the final definition of the percentage level for an area proposed as an LFA should be considered carefully and could be further discussed only after the simulations and maps are available;

13. Suggests thinking about cumulative criteria or index systems in heterogeneous areas suffering simultaneously from multiple handicaps. The use of a composite indicator would allow the combination of several criteria, thus defining an area as an LFA even if individual criteria did not trigger such a classification;

14. Also proposes to consider the use of additional criteria such as field capacity days (FCD) - a measure which indicates the ‘workability’ of the land and which measures the interaction between soil moisture and climate. The proportion of permanent grassland should also be included in the list of criteria, as areas that consist mainly of pasture have considerably fewer alternative uses than arable land;

15. Asks that consideration be given to whether the new delimitation of so-called intermediate zones could also be done on the basis of smaller territorial units than LAU 2 (e.g. cadastral subdivisions or individual plots), provided that the necessary data are available. In this way, compensation payments could be made more appropriate, more easily understandable for farmers and more easily enforceable;

16. Takes note of the suggestion of the European Commission that Member States should ‘fine tune’ the areas delimited under the bio-physical criteria by applying appropriate production-based indicators, i.e. systematically removing areas for which problems have been overcome by artificial intervention and where the relevant production-related indicators are comparable to the national average;

17. Recommends, however, that regionally adapted criteria with appropriate cut-offs replace the ‘fine tuning’ proposed by the Commission. Member States and regions are better placed to identify suitable criteria and appropriate thresholds for delimiting the extent of LFAs in each region. In any case the application of either ‘fine tuning’ or of a regionally-adapted solution must be an optional tool and must not become an obligation;

Providing for a phasing-out

18. Appreciates the objective of the Communication to introduce a more transparent, appropriate and comparable method for identifying agricultural areas affected by natural handicaps and therefore eligible for compensatory aid, and thus to address the remarks raised in the European Court of Auditors’ special report on this issue;

19. Is, however, concerned about a possible loss of many regions by removing the socio-economic criteria or the tried and tested indexing systems currently used in delimiting the areas; nevertheless, it would be helpful to consider how to bring geographic and land planning criteria into the scheme for reclassifying areas with natural handicaps;

20. Considers also the need to provide for a phasing-out for regions and/or municipalities no longer entitled to this classification. There should be an appropriate transitional period to allow farmers to adapt to the new support regime for LFAs. This process should also be considered when deciding on the policy line to be taken in the future CAP;

Subsidiarity

21. Agrees that the use of series of common bio-physical criteria might indeed produce a more transparent, simplified and comparable method of classification, which would lead to a more efficient management of funds. Given the existing risk of divergences, the Community level - in line with the subsidiarity principle - appears to be the most appropriate at which to take action;

Better lawmaking

22. Welcomes wholeheartedly the procedure followed in drawing up the Communication. The impact analysis takes into account various options and analyses them in detail. It is important to keep in mind the additional costs that the new model will involve, especially in the initial stages;

23. Stresses, nevertheless, that a reform of the current system and transition to a system based on bio-physical criteria will have socio-economic consequences, which will have to be taken into account when implementing the new method;

24. Strongly expects, lastly, that the definition of a set of common criteria for delimiting less-favoured areas should also simplify the implementation of the aid system for compensating natural handicaps at European level and thus guarantee greater transparency and efficiency.

Brussels, 10 February 2010. The President of the Committee of the Regions Mercedes BRESSO

(1) CdR 89/2009 fin.