EN    EN  COMMISSION OF THE E UROPEAN COMMUNITIES 
Brussels, 19.10.2005 
COM(2005) 509 final 
  
COMMUNICATION FROM THE COMMISSION 
on Simplification and Better Regulation  
for the Common Agricultural Policy 
 
EN 2   EN A. INTRODUCTION 
This communication outlines the Commi ssion’s plans for simplifying the Common 
Agricultural Policy (CAP) whilst respecting econo mic, environmental and political realities. 
Reducing red tape in the farm sector by making  rules more transparent, easier to understand 
and less burdensome will reduce costs for businesses and ensure that European citizens receive value for money. 
Since its introduction the CAP has established a comprehensive political and legal framework 
for European agriculture; as a fully integrated  common policy it replaces a significant amount 
of national legislation. It has largely accomplished the obj ectives set out in the EC Treaty 
while cushioning the social impact of agricult ural restructuring. As a corollary farmers and 
administrations have to deal with a dense se t of rules and measures, which may increase the 
risk of failing to meet policy objectives, make it  more difficult to ensure sound expenditure of 
EU funds and diminish acceptance of CAP measures. 
The CAP simplification work undertaken by the Commission for over a decade is now 
entering a new phase. Building on the framew ork action to “Update and simplify the 
Community acquis ”
1, and following its communication “Working together for growth and 
jobs – a new start for the Lisbon Strategy”2, the Commission adopted in March 2005 a 
communication on “Better Regulation for growth and jobs”3, which underlined the 
contribution of better regulation to  achieving the Lisbon objectives.  
At the December 2004 Agriculture Council, th e Commissioner for Agriculture and Rural 
Development announced her intent ion to bring forward the pr esent communication. It forms 
part of the CAP’s contribution to realising the EU’s Lisbon strategy and the Commission’s 
overall governance concept. 
B. THE  PURPOSE  OF SIMPLIFICATION 
Simplification aims to identify and rem ove unnecessary burdens; two types may be 
distinguished: 
• technical simplification (i.e. within a constant policy framework) implies revision of 
the legal framework, admini strative procedures and management mechanisms to 
achieve streamlining and greater cost-effectiveness and attain existing policy objectives more effectively, without  changing the underlying policies; 
• ‘policy simplification’  reduces complexity through impr ovements to the agricultural 
support and rural development policy instruments. It may be described as ‘policy development with simplification implications’.  Impact assessment ha s a particular role 
to play here. 
To avoid policy debates arising in the context of  simplification, it is important to ensure that 
this distinction is not obscure d. Simplification must not become  an additional forum to reopen 
policy decisions.  
                                                
 
1 COM(2003) 71. 
2 COM(2005) 24. 
3 COM(2005) 97. 
 
EN 3   EN This communication focuses primarily on opport unities for technical simplification, although 
some actions such as rationalising or harm onising market management mechanisms may 
become political issues. 
C. LIMITATIONS 
Simplifying the CAP is an ambitious project whic h needs to be pursued with political resolve 
and a strong sense of realism. Agricultural and rural development policies are by nature 
complex, reflecting both internal and external policy objectives outlined in the EC Treaty. 
Simplification must be compatible with broad po licy objectives such as the environment, food 
safety, cohesion and protection of the Community’s financial interests.  
Sound policy management is necessary. The CAP is unique in the extent to which it is 
regulated and financed at EU level. Without a common approach to the single market, aids in 
agriculture and trade with third countries, it would be impossible to guarantee a level playing 
field in the internal market and pursue further liberalisation in world trade. An EU framework 
ensures that rural developmen t programs are carried out under common rules without creating 
unfair competitive advantages. Ba sic standards in the field of environment, animal welfare, 
organic farming and labelling need  to be settled on a common basis,  if they are to be seen as 
fair. This requires robust legi slation, and effective financing and control mechanisms to 
protect public interest an d ensure accountability.  
Policies must be applied in a diverse range of  agricultural conditions and administrative 
traditions across the enlarged EU. 
Political consensus on large and complex polic ies requires balance between administrative 
simplicity and the flexibility to reflect local n eeds, to take into account the principles of 
proportionality and subsidiarity, and account ability to other Community Institutions. 
Control burdens  are often cited as a profitable area fo r simplification. However, over the last 
15 years modern, effective and proportionate cont rol arrangements have been put in place; the 
Integrated Administration and Control System (IACS) has kept the administrative burden for 
farmers at a manageable level while ensuring a hi gh degree of financial security and protection 
of taxpayers’ money.  
Although simplification must not be used as an  argument to weaken these arrangements, the 
Commission is ready in appropriate cases to co nsider more streamlined procedures provided 
that they do not reduce the degr ee of financial assurance.  
D. STOCKTAKING 
CAP simplification is not a new activity; the Commission has carried out various actions since 
the mid-1990s. 
Successive CAP reforms have provided opportuniti es to simplify, most recently by combining 
a large number of direct income support paym ents into a comprehensive decoupled single 
payment scheme. 
 
EN 4   EN The Commission has drawn attentio n to its CAP simplification activities through reports to 
Parliament and Council, and stressed in them  its determination to strive for further 
simplification4. 
It has worked closely with national authorities to identify simplification possibilities. In a 
systematic analysis carried out in 1997–2000, around 200 suggestions  were received from the 
Paying Agencies; the Commission was able to ta ke positive action on about half of them. The 
remainder were not acted upon because they woul d have entailed excessive costs, undermined 
sound financial management, or were not judge d to offer real simplification potential. 
This exercise was repeated in 2001–2003. Member  States’ suggestions were analysed by a 
simplification group established by the Commission, composed of represen tatives of national 
administrations. This exercise became absorb ed into discussions on the 2003 Reform and did 
not give rise to publicati on of a separate report. 
I Horizontal actions 
(a) Cleaning up of agricultural rules 
The Commission attaches great importance to  public access to Community law and to 
improving its clarity and transparency. It has sou ght to reduce the number of agricultural acts 
in force and improve the presentation of legal texts, especially thos e modified on several 
occasions. 
It has for many years screened the ‘ acquis ’ to identify obsolete agricultural legislation, a task 
supported by the two-year pr ogramme on “Updating and simp lifying the Community acquis”5. 
In 2003 and 2004, as part of the ongo ing simplification activities, around 520 agricultural legal 
acts have been removed from the list of acts in force by formal repeal and recognition of 
obsolescence.  
Access to agricultural legislation has benef ited from improvements in IT tools. All 
Community legislation is now freel y available via the EUR-Lex website6. Consolidation and 
codification7 of legal texts both make the acquis more accessible and improve legal certainty. 
Most agricultural legal acts available online ar e in their consolidated version and a limited 
number have been formally adopted in codified form. 
(b) State aid rules 
Since 1999 state aid rules for agriculture have been simplified and made more transparent. 
A single legal basis for the application of  state aid rules to rural development8 was created. 
Most state aid rules were incorporated into th e “Community guidelines for state aid in the 
agriculture sector”9, allowing abolition of several texts10. For the first time, all rules for state 
                                                 
4 COM(1999) 156; COM(2001) 48. 
5 COM(2003) 71. 
6 http://europa.eu.int/eur-lex/lex/en/repert/index_03.htm. 
7 C onsolidation  produces updated but not legally binding texts; codification  creates new legally-binding 
texts. 
8 Article 51 of Regulation (EC) No 1257/1999 (OJ L 160, 26.6.1999, p. 80). 
9 OJ C 232, 12.8.2000, p. 19. 
10 See point 22 of the guidelines. 
 
EN 5   EN aid in agriculture were published in the Offici al Journal. Transparency has been further 
improved by making documents available on the internet11. 
Rules for state aid for advertising of agri cultural products were streamlined in 200112, 
allowing for the abolition of two texts13. 
Rules for rescue and restructuring ai d were simplified and improved in 200414. 
The need for Commission authorisation before granting new state aid was reduced by a wide-
ranging exemption Regulation15. From 2004 about 30% of all ne w state aid could be paid 
within 10 days of informing the Commission, co mpared with previous delays of up to six 
months. 
A new format for yearly reports has si mplified reporting requ irements from 200416. 
A Regulation on de minimis  aid17 entered into force on 1 Ja nuary 2005, providing greater 
leeway for Member States to grant quick  support notably in the face of crisis. 
(c) Reporting 
An internal study of the justification for Member  States’ reporting obligations led to informal 
guidelines and a reduction of the number and fre quency of reports, improved use of IT tools 
including web technology that automatically ch ecks data integrity, stan dardisation of forms 
and some restructuring of legal acts. This ha s become an ongoing process, independently of 
the initial study.  
Certain acts on irregularities in the areas of CAP expend iture and structural funds18 are being 
or will be reviewed with the aim to reduce the administrative burden for Member States. 
II Policy-related actions 
The Commission has considered it appropriate to integrate simplification into its agricultural 
policy work rather than set up a separate po licy simplification programme. Integration of 
simplification into the normal ag enda will be more visible fro m 2005 - as part of an improved 
planning methodology, the simplification aspects a nd intended beneficiaries of all proposed 
measures are identified.  
(a) 2003 CAP Reform 
The 2003 reform has brought radical change to th e CAP, especially its income support policy. 
It established the single payment scheme where direct income support fo r farmers is largely 
decoupled from production and introduced mand atory cross-compliance obligations. It has 
also established comprehensive common rule s for direct support in most sectors. 
                                                 
11 http://europa.eu.int/agriculture/state aid . 
12 OJ C 252, 12.9.2001, p. 5. 
13 See para. 75 of the advertising guidelines. 
14 OJ C 244, 1.10.2004, p. 2. 
15 Commission Regulation (EC) No 1/2004 (OJ L1, 3.1.2004, p. 1). 
16 Annex III B of Commission Regulation (EC) No 794/2004 (OJ L 140, 30.4.2004, p. 1). 
17 Commission Regulation (EC) No 1860/2004 (OJ L 325, 28.10.2004, p. 4). 
18 Council Regulation (EEC) No 595/91 (OJ L 67, 14.3.1991, p. 11); Council Regulation (EC) No 1469/95 
(OJ L 145, 29.6.1995, p. 1); Commission Regulation (EC) No 1681/94 (OJ L 178, 12.7.1994 , p. 43).  
 
EN 6   EN This reform is an important step towards be tter quality of EU legislation – 9 Council 
regulations and numerous other prov isions were repealed; the basi c regulations of  the cereals, 
rice and dried fodder common ma rket organisations (CMOs) and the milk quota regulation 
were recast. Procedural simp lification has been achieved th rough the setting up of a single 
management committee for all direct payments.  
The Commission originally proposed a single decoupling model, two types of payment 
entitlements decoupled from production, no re-coupling and no transitional periods or 
derogations. During the legislative process numerous alternative options and special 
arrangements were requested by Member Stat es and accepted by the Council. Member States 
may now chose between 2 decoupling models w ith a number of sub-models, apply partial 
de-coupling or exclude certain support scheme s from decoupling, implement a separate 
support system and make use of various derogations. 
Nevertheless, the reform’s potential for simplif ication of the way agri cultural income support 
is granted, managed and controlled,  is still significant. In its fully decoupled version farmers 
need to introduce only one aid application and controls are applied using a whole-farm 
approach. 
Whether this potential simplification for farm ers is realised depe nds on Member States’ 
choices. There is already evidence to suggest th at the decoupled system will be much simpler 
to manage once the necessary IT syst ems have become fully operational. 
Many Member States have chosen to make us e of the full range of options provided by the 
flexibility introduced into this regime. This heterogeneous implementation of the reform has 
contributed to complication and increasi ng burdens on farmers and administrations. 
(b) Single Area Payment Scheme (SAPS)19 for new Member States 
On the initiative of the Commission it was agreed in the enlargement negotiations that for a 
maximum of 5 years from accession the new Member States may grant simplified direct income support. SAPS allows the granting of a flat rate per hectare of agricultural area, 
calculated by dividing the total available income support by the overall number of hectares 
used for agricultural production. Under IACS onl y area-related checks are required and 
complex controls on animal premiums become obsolete. This system reduced the cost of 
preparatory work before and during accession. It will allow the eight new Member States 
concerned to switch smoothly to  the single payment scheme.  
(c) Rural development 
The new Council Regulation on rural development support for 2007 to 2013 will simplify the 
content, scope and implementation of the policy. 
The strategic approach (Community Strategic Guidelines – national strategy plans – 
programmes) will allow the sett ing of clear priorities and stre amlining of programming, while 
defining the scope of the policy through buildi ng up programmes around four axes. Each axis 
in turn can be built up from a range of predefined measures. To ensure programme balance minimum spending rates will apply to each axis.  
Simplification will consist of moving from two funding sources, five programming systems 
and three management and c ontrol systems to a single funding, programming, financial 
                                                
 
19 See Article 143b of Regulation (EC) No 1782/2003. 
 
EN 7   EN management and control framework. There will  be a single fund (EARDF) with financial 
management and control rules adapted to  multi-annual programming. Operational and 
financial programme management will be simplif ied by setting the co-financing rate at axis 
level, leaving Member States free to  shift between measures within an axis. For individual 
measures the number of eligibil ity conditions has been reduced. 
The organisational structure has been kept simple: each programme will have one managing 
authority (operational implementation) and payi ng agency (financial implementation), with 
clearly defined functions and accountability.  
A simple reporting system based on a common fr amework for monitoring and evaluation will 
allow progress in implementation of stra tegies and programmes to be measured. 
(d) CAP financing 
The adoption of a new Council Regulation (EC) No 1290/200520 brings the financing rules for 
both pillars of the CAP into a single legal text. It creates tw o funds (EAGF and the EAFRD) 
that, as far as possible, will apply the same rules on, for example, the role of the paying 
agencies and the clearance of accounts procedure;  it will also facilita te the treatment of 
irregularity cases. The new rules will simplify financial management of rural development 
policy in the next programming period.  
The Commission implementing regulation currently in preparation aims to regroup more than 
twelve separate regulations containing all meas ures relating to paying agencies, financial and 
budgetary discipline, and the transmission and arch iving of documents. This regulation may, if 
appropriate, also contain control and Memb er States’ mutual assistance measures. 
E. IMPACT  ASSESSMENT 
The Commission has long experience in  the use of impact assessments  in agricultural and rural 
development policy making. For several years all important agricultural  proposals have been 
accompanied by an impact assessment. Buildi ng on this approach, in 2002, the Commission 
replaced single sector impact assessment met hods with an integrated and cross-sectoral 
approach21 with five key steps22: 
• analysis of the problems, 
• establishment of the objectives, 
• identification of options, 
• analysis of their impact, 
• comparison of their advantages and disadvantages. 
The principle of ‘propo rtionate analysis’ is central to the Commission’s impact assessment 
work, meaning that the IA is proportionate  to the potential impacts of the action. 
These processes represent an ideal opportunity to consult stakeholde rs in line with the 
Commission’s minimum standards for consultation23. Their contribution is essential in 
                                                 
20 OJ L209, 11.8.2005, p. 1. 
21 COM(2002) 276. 
22 SEC(2005) 791. 
23 COM(2002) 704. 
 
EN 8   EN ensuring the quality of the assessment and the appropriateness of any final proposals. 
Consultation methods have recently become  more diversified, including various ad hoc  fora 
and hearings.  
In line with the Commission’s appr oach to impact assessment, it is essential that the scope of 
impact assessments is broad and that it includes environmental, economic, consumer protection, competition, and social policy concer ns. This interdisciplinary approach better 
reflects the diversity of the real world.  
F. THE
 WAY  FORWARD 
I Technical simplification 
(a) Cleaning up agricultural rules 
Identification and elimination of obsolete Counc il and Commission lega l acts will continue.  
The Commission will explore new ways to improve the structure and presentation of 
agricultural law. It will examine the possibility of  carrying out a “legal audit” with a view to 
eliminating unnecessary provisions, replacing multiple sectoral rules by horizontal ones and examining the use of sunset clauses where appropriate. 
This will provide new opportunities to simplify management mechanisms relating to certain 
specific import and export procedures, private storage, public storage, tendering procedures, 
financial instruments and processes, reporting obligations etc. Some work relating to the 
traditional CMOs is already under way. The proposed single CMO (see b) below) will further advance this work in the context of an ove rall re-evaluation of market mechanisms. 
(b) A Single CMO regulation 
The 2003 reform simplified the CAP’s legisla tive environment by establishing a horizontal 
legal framework for all direct payments and am algamating an array of support systems into a 
single payment scheme. 
It is envisaged to extend the horizontal appr oach to the 21 CMOs, each of which is governed 
by a separate Council basic regulation, often accompanied by a collateral set of further 
Council rules. 
Most basic regulations follow the same struct ure and have numerous provisions in common. 
Often they contain different solutions to identical or similar problems. The extent to which harmonisation is possible and sectoral approaches can be replaced by horizontal ones should be examined.  
This will provide a single set of harmonised rules in the classic areas of market policy such as 
intervention, private storage, import tariff quotas, export refunds, safeguard measures, 
promotion of agricultural pr oducts, state aid rules, communi cations and reporting of data. 
Existing instruments and mechanisms will not be changed in substance except where this is 
justified by the advantages of harmonisati on and does not substantially alter their 
effectiveness.  
Questioning the “raison d’être” of provisions that  in some cases have existed for decades is 
inherent to the Commi ssion’s task of establishing a be tter legislative environment.  
 
EN 9   EN The outcome should be a simpler and more stream lined legislative struct ure of the first pillar 
of the CAP. 
A step by step approach will be used: 
• initially, a first Commission proposal woul d include those provi sions that most 
basic regulations have in common and the ru les of CMOs that will not be subject to 
substantive policy reviews in the foreseeable future; 
• later, the single CMO regulation could be  completed by regulations not included in 
the first phase of the exercise (e.g. fruit and vegetables, wine).  
This would be in line with the approach pursued for Council Regulation (EC) No 1782/2003 
on direct payments. 
The Commission will examine the possibility of making a first single CMO proposal in 2006. 
(c) Administrative costs 
The Commission is prepared in the context of the current initiative to test  the feasibility of an 
‘EU net administrative cost method’  to discuss options for assist ing national administrations to 
quantify and reduce administrative costs imposed on farmers by CAP mechanisms.  
(d) State aids 
An extension of exemption Regulation (EC) No 1/2004 will accelerate the payment of state 
aid to farmers. 
State aid rules will be simplifie d by reducing the seven texts st ill in force to three: the 
exemption regulation, one set of guidelines, and the de minimis  regulation. 
On 30 May 2005, Member States were invited to  submit state aid simplification proposals. 
(e) Sharing best practices 
The establishment of a network of EU agricultural experts to  share best practice in the 
implementation of CAP legislati on will be examined. Existing stru ctures such as the bi-annual 
conference of Paying Agencies, “ Panta Rhei ” and the Management and Advisory Committees 
should be used. 
II Policy related actions 
(a) Sugar CMO reform 
The Commission proposal for reform of the sugar sector24 offers a significant number of 
simplifications:  
• introduction of a single quota system; 
• variable production levies li nked to quotas replaced by fixe d charges not dependent on 
complicated calculations ba sed on excess consumption; 
• intervention replaced by private storage; 
                                                 
24 COM(2005) 263. 
 
EN 10   EN • the rules on trade with third countries si mplified by abolishing the export of non-quota 
sugar and simplifying import management; 
• inclusion of direct income support in the sugar sector in the Single Payment Scheme. 
(b) Single Payment Scheme 
Simplification of the recent CAP reform a rrangements and their implementation will be 
examined as foreseen in the review cl auses in Council Regulation (EC) No 1782/2003. 
(c) Other sectors 
Simplification will play an important role in th e various scheduled policy reviews, including 
the CMO for wine, organic farming and quality policy. Simplification of the fresh and processed fruit and vegetables sect ors, in the context of the reform currently in progress, will 
include an examination of technical standards an d their relationship with existing international 
standards. 
The regulations
25 relating to egg marketing standard s should be replaced by simplified and 
streamlined provisions, and the technical elements transferred to the Commission 
implementing regulation.  
(d) Impact assessment and evaluation 
As set out in the new Guidelines26, ‘proportionate analysis’ is central to the Commission’s 
approach to impact assessment. In agricultu re, where numerous minor measures are proposed, 
this is of particular importance. 
Simplification will be integrated into the well  established practice of evaluation of CAP 
measures, in particular the ex-ante  evaluation which is carried out for all proposals.  
III Processes 
CAP simplification needs to be embedded in a process of awareness raising, dialogue and 
planning. 
(a) Stakeholder consultation, screening, Action Plan 
Simplification suggestions made by Member St ates and stakeholders during the present 
consultation process, which are appropriate an d accompanied by adequate justifications, will 
be taken into consideration in  the development of a CAP act ion plan to be drawn up at 
Commission services level during 2006.  
Although stakeholder consultati on takes place primarily with in the impact assessment 
processes, the Commission reaffirms its willi ngness to consider all valid simplification 
suggestions submitted by agriculture sector stakeholders.  
In addition to examining sectors highlighted by Member States and stakeholders, the options 
for screening for further simplification potenti al will be examined. The recently modified 
structure of the Commission’s Directorate Gene ral for Agriculture and Rural Development and 
                                                 
25 Council Regulation (EEC) No 1907/90; Commission Regulation (EC) No 2295/2003. 
26 SEC(2005) 791. 
 
EN 11   EN the planned establishment of an inventory of management mechanisms will facilitate this 
work. 
This action plan will also take into considerat ion the outcome of disc ussions on the present 
communication. It will indicate the concrete measures envisaged, and be discussed within the 
Commission’s CAP simplif ication experts group. 
(b) Conference 
A simplification conference is planned fo r 2006, focussing on the views and needs of 
stakeholders, in particular Member States a nd representatives of fa rming organisations. The 
conference should also increase the sense of ownership and responsibility for simplification 
amongst all actors involved, including Member States. The new Member States should be 
invited to contribute from thei r experience with the introduc tion and implementation of the 
CAP upon accession. 
(c) Training 
Internal training and awareness raising form an important part of  the ongoing work, in 
conjunction with the screening process. It wi ll include staff training in legal drafting, and 
seminars on the purposes and objectives of simplification. 
(d) IT systems 
The use of IT tools is essential in the deve lopment of mechanisms ensuring reliable, timely 
and transparent data collection and reporting for the benefit of Me mber States and the 
Commission (e.g. the CIRCA system for documen t distribution and AMIS-Quota which is a 
new system in development for tariff quota mana gement). IT tools also help to provide 
appropriate electronic means for enhancin g information communication with national 
authorities. 
G. CONCLUSION 
This communication is one step in an ongoing process to ensu re that Better Regulation, in 
particular simplification, remains central  to agricultural policy and law making.  
The active co-operation of all EU Institutions in volved is essential. A ll actors should be aware 
that it is crucial to strike a balance between defending specific interest s and avoiding excessive 
complexity, in particular where difficult pol itical compromises need to be negotiated. 
The Commission will continue to play an active part in this process, but cannot achieve the 
objectives of simplification alone. It invites Me mber States and the ot her EU Institutions to 
accept responsibility for reducing burdens for farmers and avoiding their creation.