98/0108 (CNS) Proposal for a COUNCIL REGULATION (EC) No . . .

of . . .

establishing a support system for producers of certain arable crops (98/C 170/02)

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Community, and in particular Articles 42 and 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 the common agricultural policy aims to attain the objectives referred to in Article 39 of the Treaty, taking account of the market situation;

Whereas, in order to ensure better market balance, a new scheme of support was introduced by Council Regulation (EEC) No 1765/92 of 30 June 1992 establishing a support system for producers of certain arable crops (1);

Whereas, after the 1992 reform of the common agricultural policy, there has been a particular improvement of market balances;

Whereas set-aside under the support system for producers of certain arable crops, introduced in 1992 in addition to a lowering of the intervention price, has helped to keep production under control, while increased price competitiveness has allowed significant additional cereals quantities to be used on the domestic market, mainly for animal feed;

Whereas the support on the basis of the scheme introduced in 1992 should be continued, taking into account, however, market developments and experience acquired in applying the current scheme;

Whereas the reform of the support scheme has to take into account the international obligations of the Community;

Whereas the best way to achieve market balance is to approximate the Community prices of cereals to the prices on the world market and to provide for non-crop specific area payments;

Whereas area payments should be revised if the market conditions differ from those currently foreseen;

Whereas the area eligible should be restricted to the area down to arable crops or publicly funded set-aside in the past;

Whereas, when the sum of the areas for which payment is claimed under the scheme is in excess of the base area, a reduction of the eligible area per farm should be provided for in order to ensure market balance;

Whereas area payments should reflect the specific structural characteristics that influence yield; whereas the drawing up of a regionalisation plan based on objective criteria should be left to the Member States; whereas uniform average yields should be established by the regionalisation plans; whereas these plans should be consistent with the average yields of each region achieved in a given period, taking into account any structural differences between production regions; whereas a specific procedure should be provided in order to examine these plans at Community level;

Whereas differentiation of yields may be permitted for irrigated and non-irrigated areas provided that a separate base area for irrigated crops is established and there is no extension of the total base area;

Whereas, in order to calculate the area payment, a basic amount per tonne should be multiplied by the average cereals yield determined for the region concerned;

Whereas a single area payment should be fixed for arable crops; whereas the basic amounts per tonne should be increased taking into account the reduction in the cereals intervention price; whereas crop specific payments for oilseeds and linseed should be abolished; whereas a specific aid should be established for protein crops in order to preserve their competitiveness with cereals;

Whereas a special scheme for durum wheat should be established to ensure a durum wheat production level which is sufficient to supply user industries while keeping budgetary expenditure in check; whereas that objective should be achieved by introducing a supplement limited, for each Member State concerned, to a maximum area of durum wheat; whereas any overshoot of those areas should lead to an adjustment to the applications submitted;

Whereas, moreover, in some Member States, the production of durum wheat is well-established in regions outside traditional zones; whereas it is desirable to safeguard a certain level of production in those regions by the grant of special aid;

Whereas, in order to benefit from the area payments, producers should set aside a predetermined percentage of their arable area; whereas the land set aside should be cared for so as to meet certain minimum environmental standards; whereas the areas set aside should also be eligible for use for non-food purposes, provided effective control systems can be applied;

Whereas in the current market situation, the set-aside requirement should be fixed at 0 %; whereas this percentage should be re-examined to take account of production and market developments;

Whereas the set-aside obligation should be subject to due compensation; whereas the compensation should be equivalent to the area payments for arable crops other than protein crops;

Whereas no set-aside requirement should be imposed for small producers whose claim for area payments is below a certain level; whereas this level should be fixed;

Whereas for voluntary set-aside, basic conditions should be fixed at Community level;

Whereas area payments should be paid once a year for a given area; whereas areas not cultivated immediately before the entry into force of the scheme established by Regulation (EEC) No 1765/92 should not be eligible for payment; whereas to take account of certain specific situations where this provision is unduly restrictive certain derogations should be permitted, to be managed by the Member States;

Whereas it is necessary to determine certain conditions for applying for area payments and to specify when producers should be paid;

Whereas payment dates should be fixed in order to ensure an even distribution of arable crops sales during the marketing year;

Whereas sowing dates should be adapted to natural conditions in the different production areas;

Whereas expenditure incurred by the Member States as a result of the obligations arising out of the application of this Regulation should be financed by the Community in accordance with Articles 1 and 2 of Council Regulation (EC) No . . . on the financing of the common agricultural policy;

Whereas it is necessary to provide for transitional measures and to enable the Commission to adopt, if necessary, additional transitional measures;

Whereas the adaptations to the arable crops support system should be introduced as from the marketing year 2000/2001;

Whereas, in view of the present adaptations to the current support scheme and to previous modifications, it is appropriate, for reasons of clarity, to replace Regulation (EEC) No 1765/92 by a new Regulation,

HAS ADOPTED THIS REGULATION:

Article 1

1. This Regulation hereby establishes a system of area payments for producers of arable crops.

2. For the purposes of this Regulation:

- the marketing year shall run from 1 July to 30 June,

- 'arable crops` are taken to mean those listed in Annex I.

CHAPTER I Area payment

Article 2

1. Community producers of arable crops may apply for an area payment under the conditions set out in this Chapter.

2. The area payment shall be fixed on a per hectare basis and regionally differentiated.

The area payment shall be granted for the area which is down to arable crops or subject to set-aside in accordance with Article 6 and which does not exceed a regional base area. This is established as the average number of hectares within a region down to arable crops or where appropriate fallowed in conformity with a publicly funded scheme during 1989, 1990 and 1991. A region in this sense shall be understood to mean a Member State or a region within the Member State, at the option of the Member State concerned.

3. Producers applying for the area payment shall be subject to an obligation to set aside part of the land of their holding from production and shall receive compensation for this obligation.

4. When the sum of the areas for which payment is claimed under the arable producers' scheme, including the set-aside provided for under that scheme, is in excess of the base area, the eligible area per farmer shall be reduced proportionately for all the payments granted under this Chapter in the region in question during the same marketing year.

Areas which are not the subject of an application for payment under this Regulation but are used to support an application for aid under Regulation (EC) No [. . .] shall also be taken into account for the calculation of areas for which payment is claimed.

Article 3

1. For the purpose of setting average yields to be used for calculation of the area payment, each Member State shall establish a regionalisation plan setting out the relevant objective criteria for determination of the separate production regions in order to arrive at distinct homogeneous areas.

With this in mind, Member States shall take due account of specific situations in drawing up their regionalisation plans. They may in particular adjust average yields in line with any structural differences between production regions.

Member States may in their regionalisation plans set different yields for irrigated and non-irrigated land. In that case, Member States shall establish a separate base area for areas bearing irrigated crops.

The irrigated base area shall be equal to the average area irrigated from 1989 to 1991 with a view to harvesting arable crops including the increases made pursuant to Article 3(1) fourth subparagraph last sentence of Regulation (EEC) No 1765/92. The establishment of the irrigated base area must not lead to any increase in the total base area of the Member State concerned. Should this base area be exceeded, Article 2(4) shall apply.

The regionalisation plan shall in all cases ensure that the average yield of the Member State concerned established for the period and in accordance with the criteria referred to in paragraph 2 is respected.

2. For each production region, the Member State shall give details of the areas and yields of arable crops produced in that region during the five year period 1986/87 to 1990/91. Average cereals yields shall be separately calculated for each region by excluding the year with the highest and the year with the lowest yield during that period.

However, this obligation may be fulfilled in the case of Portuguese cereals by providing data having been supplied pursuant to Council Regulation (EEC) No 3653/90 of 11 December 1990 introducing transitional measures governing the common organisation of the market in cereals and rice in Portugal (2) and in the case of the five new German Länder by providing the average crop yield applicable in the other German Länder.

If a Member State decides to treat irrigated land separately from non-irrigated land, the corresponding average yield, which shall not be altered, shall be broken down between the two types.

3. Member States shall submit their regionalisation plan to the Commission by 1 August 1999 together with all necessary supporting information. In order to fulfil this obligation, they may refer to their regionalisation plan submitted to the Commission in accordance with Regulation (EEC) No 1765/92.

4. The Commission shall examine the regionalisation plans submitted by the Member States and shall ensure that each plan is based on appropriate, objective criteria and is consistent with available historical information. The Commission may object to plans which are not compatible with the aforementioned relevant criteria in particular with the average yield of the Member State. In this case, the plans shall be subject to adjustment by the Member State concerned after consultation with the Commission.

5. The regionalisation plan may be revised by the Member State concerned at the request of the Commission or at the initiative of that Member State in accordance with the same procedure as outlined in paragraphs 1 to 4.

6. Should a Member State, pursuant to paragraph 1, choose to establish production regions the demarcation of which does not correspond to that of regional base areas, it shall send the Commission a summary statement of payment applications and the yields pertaining to these. If it emerges from this information that, in a Member State, the average yield resulting from the regionalisation plan applied in 1993 or, in the case of the new Member States, the average yield resulting from the plan applied in 1995, is exceeded, all payments to be made in that Member State for the following marketing year shall be reduced in proportion to the overrun which has been recorded. However, this provision shall not apply where the quantity for which applications were made, expressed in tonnes of cereals, does not exceed that resulting from the product of the total base areas of the Member State by the aforementioned average yield.

Member States may decide to ascertain whether there has been any exceeding of the average yield for each base area. In such cases, the provisions of this paragraph shall be applied to the payments to be paid in each base area concerned.

Article 4

1. The area payment is calculated by multiplying the basic amount per tonne by the average yield determined in the regionalisation plan for the region concerned.

2. The basic amount per tonne is fixed at:

- ECU 72,5 for protein crops and

- ECU 66 for other arable crops.

Article 5

A supplement to the area payment of ECU 344,5 per hectare shall be paid for the area down to durum wheat in the traditional production zones listed in Annex II, subject to the limits fixed in Annex III.

Should the total of the areas for which a supplement to the area payment is claimed be greater than the limit referred to above during the course of a marketing year, the area per producer for which the supplement may be paid shall be reduced proportionately.

However, subject to the limits per Member State laid down in Annex III, Member States may distribute the areas indicated in that Annex among the production zones as defined in Annex II, or, if necessary, the production regions referred to in Article 3, according to the extent of the production of durum wheat during the period 1993 to 1997. Where this is done, should the total of the areas within a region for which a supplement to the area payment is requested be greater than the corresponding regional limit during the course of a marketing year, the area per producer in that production region for which the supplement may be paid shall be reduced proportionately. The reduction shall be made when, within a Member State, the areas in regions which have not reached their regional limits have been distributed to regions in which those limits have been exceeded.

In regions where the production of durum wheat is well established, other than those referred to in Annex II, special aid amounting to ECU 138,9 per hectare shall be granted up to a limit of the number of hectares laid down in Annex IV.

Article 6

1. The set-aside obligation for each producer applying for area payments shall be fixed as a proportion of his area down to arable crops and for which a claim is made, and left in set-aside pursuant to this Regulation.

The set-aside obligation shall at present be 0 %.

2. Member States shall apply appropriate environmental measures which correspond to the specific situation of the land set aside.

3. The land set aside may be used for the provision of materials for the manufacture within the Community of products not primarily intended for human or animal consumption, provided that effective control systems are applied.

Member States are authorised to grant national aid to producers to help them to cover the costs of planting multiannual crops for biomass production. The aid may not, however, be more than the equivalent of the interest to be paid on a loan, repayable in five equal annual instalments, taken out for an amount not exceeding five years of area payments for the land in question.

4. The payment for set-aside obligation shall be calculated as the area payment according to Article 4 (1) and (2), second indent. Where different yields are set for irrigated and non-irrigated land, those for non-irrigated land apply. In the case of Portugal, payment shall take account of the aid granted under Regulation (EEC) No 3653/90.

5. Producers may be granted the set-aside payment on land set aside in excess of their obligation. In such cases, the area set aside may not exceed an area to be defined by Member States at rates taking into account specific situations and ensuring sufficient occupation of farmland. The area set aside should at least be 10 % of the area down to arable crops and for which a payment application is made, and left in set-aside pursuant to this Regulation. The set-aside payment may be granted on a multiannual basis for a period up to five years.

6. Producers who make a payment application for an area no bigger than the area which would be needed to produce 92 tonnes of cereals, on the basis of the yield determined for their region, are not bound by the set-aside obligation.

Article 7

Applications for payments may not be made in respect of land that on 31 December 1991 was under permanent pasture, permanent crops or trees or was used for non-agricultural purposes.

Member States may, on terms to be determined, depart from these provisions under certain specific circumstances, in particular for areas subject to restructuring programmes or for areas subject to standard rotations of multi-annual arable crops with those crops listed in Annex I. In such cases, they shall take action to prevent any significant increase in the total eligible agricultural area. This may in particular involve deeming previously eligible areas ineligible as an offsetting measure.

Member States may also depart from the provisions of the first subparagraph under certain specific circumstances relating to one or other form of public intervention where such intervention results in a farmer growing crops on land previously regarded as ineligible in order to continue his normal agricultural activity and if the intervention in question means that land originally eligible ceases to be so with the result that the total amount of eligible land is not increased significantly.

Moreover, Member States may, in certain cases not covered by the previous two subparagraphs, depart from the first subparagraph if they provide proof in a plan submitted to the Commission that the total amount of eligible land remains unchanged.

Article 8

1. Payments shall be made between 1 January to 31 March following the harvest.

2. In order to qualify for the area payment, a producer shall by 31 May preceding the relevant harvest have sown the seed and by 15 May have lodged an application.

3. Member States shall take the necessary measures to remind applicants of the need to respect environmental legislation.

Article 9

Detailed rules for the application of this Chapter shall be adopted in accordance with the procedure laid down in Article 23 of Council Regulation (EEC) No 1766/92 (3) and in particular:

- those relating to the establishment and management of base areas,

- those relating to the establishment of production regionalisation plans,

- those relating to the granting of the area payment,

- those relating to the minimum area eligible for payment; such rules shall take particular account of the monitoring requirements and of the desired effectiveness of the scheme in question,

- those determining, for durum wheat, the eligibility for the supplement to the area payment referred to in Article 5 and the eligibility requirements for the special aid referred to in that Article, and in particular determination of the regions to be taken into consideration,

- those relating to set-aside, in particular those relating to Article 6(3); these conditions may include the growing of products without compensation,

- those relating to the conditions for applying Article 7; these conditions shall specify under what circumstances the provisions of Article 7 may be waived and Member States' obligation to refer envisaged action to the Commission for approval.

According to the same procedure, the Commission may:

- either make the granting of payments subject to the use of specific seeds, certified seeds in the case of durum wheat, certain varieties in the cases of oilseeds, durum wheat and linseeds or provide for the possibility for Member States to make the granting of payments subject to such conditions;

- allow the dates in Article 8(2) to be varied in certain zones where exceptional climatic conditions render the normal dates inapplicable;

- allow, subject to the budgetary situation, to authorise, in derogation from Article 8(1), payments prior to 1 January in certain regions, of up to 50 % of the area payments and of the payment for set-aside in years in which exceptional climatic conditions have so reduced yields that producers face severe financial difficulties.

Article 10

The measures defined in this Chapter shall be deemed to be intervention intended to stabilise agricultural markets within the meaning of Article [. . .] of Regulation (EC) No [. . .].

CHAPTER II General and transitional provisions

Article 11

The amounts of the area payments and the payment for set-aside as well as the percentage area to be set aside fixed in this Regulation may be changed in the light of developments in production, productivity and the markets, according to the procedure laid down in Article 43(2) of the Treaty.

Article 12

Should specific measures be necessary to facilitate the transition from the system in force to that established by this Regulation, such measures shall be adopted in accordance with the procedure laid down in Article 23 of Regulation (EEC) No 1766/92.

Article 13

Regulation (EEC) No 1765/92 is hereby repealed.

Article 14

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

2. This Regulation shall apply from the 2000/2001 marketing year onwards.

3. Regulation (EEC) No 1765/92 shall continue to be applied in relation to the 1999/2000 marketing year.

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

Done at . . .

For the Council

. . .

(1) OJ L 181, 1.7.1992, p. 12. Regulation as last amended by Regulation (EC) No 2309/97, OJ L 321, 22.11.1997, p. 3.

(2) OJ L 362, 27.12.1990, p. 28.

(3) OJ L 181, 1.7.1992, p. 21. Regulation as last amended by Regulation (EC) No 923/96 of 24.5.1996, p. 37.

ANNEX I

Definition of products

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ANNEX II

Traditional production zones for durum wheat

GREECE

Nomoi (prefectures) of the following regions:

Central Greece

Peloponnese

Ionian Islands

Thessaly

Macedonia

Aegean Islands

Thrace

AUSTRIA

Pannonia

SPAIN

Provinces

Almería

Badajoz

Burgos

Cádiz

Córdoba

Granada

Huelva

Jaén

Málaga

Navarra

Salamanca

Sevilla

Toledo

Zamora

Zaragoza

FRANCE

Regions

Midi-Pyrénées

Provence-Alpes-Côte d'Azur

Languedoc-Roussillon

Departments (1)

Ardèche

Drôme

ITALY

Regions

Abruzzo

Basilicata

Calabria

Campania

Latium

Marches

Molise

Umbria

Apulia

Sardinia

Sicily

Tuscany

PORTUGAL

Districts

Santarém

Lisbon

Setúbal

Portalegre

Évora

Beja

Faro

(1) Each of these departments may be linked to one of the abovementioned regions.

ANNEX III

Maximum guaranteed areas in receipt of the supplement to the area payment for durum wheat

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ANNEX IV

Maximum guaranteed areas in receipt of the special aid for durum wheat

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