WRITTEN QUESTION E-2354/02

by Michiel van Hulten (PSE) to the Commission

(31 July 2002)

Subject: European farm subsidy for the Netherlands royal family

According to a report in the Volkskrant newspaper on 16 July 2002 under the headline Beatrix looks forward to Balkenende's arrival, Queen Beatrix told a group of Members of the Netherlands Second Chamber in February 1999 that the Netherlands royal house had received European subsidies for planting an olive grove at the Netherlands royal family's country estate at Porto Ercole in Italy.

1. Can the Commission confirm that the Netherlands royal house has received subsidies for planting an olive grove at Porto Ercole, Italy?

2. Does the Netherlands royal house receive other kinds of European subsidies, from the agricultural fund or from other funds (such as the European Social Fund)?

3. Is the subsidy to the Netherlands royal house granted under Article 33, paragraph 1(b) of the Treaty of Rome, which says that one of the objectives of the common agricultural policy is to ensure a fair standard of living for the agricultural community, in particular by increasing the individual earnings of persons engaged in agriculture? If not, on the basis of what objective was it paid?

4. Does the Commission agree that insofar as any financial aid is granted to the agriculture sector it should be restricted to small farms with low incomes, and that even the ceiling of EUR 300 000 proposed by Commissioner Fischler is too high in some cases?

5. Does the Commission share the view that a decision to grant a subsidy should at least be based on an income and means test? Is it prepared to revise its plans accordingly?

Supplementary joint answerto Written Questions E-2354/02 and E-2413/02given by Mr Fischler on behalf of the Commission

(21 October 2002)

1. Point 1 of Written Question E-2354/02 and points 1 to 4 of Written Question E-2413/02

Council Regulation (EC) No 1654/86 of 26 May 1986(1) introduced a common measure for replanting and converting olive groves in certain Community regions, in order to remedy the damage caused in 1985 by frosts of exceptional severity and length. Aid from the Guidance Section of the European Agricultural Guidance and Guarantee Fund (EAGGF) was granted in order to ensure the survival of farming and at the same time prevent soil erosion and disruption of the hydrologic cycle, protect the environment and preserve the countryside. In particular, collective replanting schemes covering a minimum area and minimum number of farmer members of an agricultural cooperative or producer group or other recognised association were eligible for support.

Each region covered by the measure drew up a programme: the one for Tuscany was approved by Commission Decision 87/132/EEC of 26 January 1987 approving the special programmes drawn up by a number of Italian regions for replanting and conversion of olive groves damaged by frost in 1985 under Council Regulation (EEC) No 1654/86(2), the aid being granted in part under that Regulation and in part under national Law No 590 of 15 October 1981, amended by Law No 198 of 13 May 1985. The relevant provisions of the latter were brought into play in Tuscany by the Regional Council's Decision No 7852 of 22 July 1985 approving a regional scale for setting expenditure ceilings for replanting olive groves.

The Tuscan programme was supplemented by a replanting scheme contained in the integrated Mediterranean programme for that region presented under Council Regulation (EEC) No 2088/85 of 23 July 1985 on integrated Mediterranean programmes(3). Covering the period 1 January 1987 to 31 December 1992, it was approved by the Commission by Decision 88/392/EEC of 13 June 1988(4).

For the 1994-99 programming period Community aid could be granted in the form of Structural Fund part-financing. The legal basis was Council Regulation (EEC) No 2052/88 of 24 June 1988(5), as amended by Council Regulation (EEC) No 2081/93 of 20 July 1993(6), on the tasks of the Structural Funds and their effectiveness and on coordination of their activities between themselves and with the operations of the European Investment Bank and the other existing financial instruments. Among its purposes were to promote rural development by speeding up adjustment of agricultural structures (Objective 5(a)) and facilitating the development and structural adjustment of rural areas (Objective 5(b)).

In the case of Objective 5(a), the Commission's Decision C(94)3655/8 of 21 December 1994 approved the application for aid presented by Italy under Council Regulation (EC) No 950/97 of 20 May 1997 on improving the efficiency of agricultural structures(7). Application of the Regulation within Tuscany was governed by a decision of the Regional Council approved by the Commission by Decision C(97)2492 of 18 September 1997. The various support measures included investment aid to farmers (practising farming as their main occupation and of adequate professional capacity) presenting a physical improvement plan in line with the Regulation. Planting and replanting of olive groves were eligible investments if consonant with the terms and restrictions of the common market organisation.

For Objective 5(b), the Commission's Decision C(1994)3789 of 23 December 1994 approved the single programming document for Community structural aid in Tuscany from 1994 to 1999. The measure on diversification and modernisation of production chains included aid to farmers and their associations for restructuring olive groves.

The above programmes, part-financed by the Structural Funds, involves a sharing of responsibilities between the Commission and Member States: the Commission approves them after checking their compliance with the Community provisions, management falls to the Member States at the most appropriate geographical level. It is up to the national/regional authorities running the programme to choose among the projects proposed by applicants who meet the eligibility requirements.

The Commission is informed of how Structural Fund resources are being used, through the partnership, execution reports for programmes and as appropriate the monitoring committees on which it sits but the information does not extend to the names of the individual recipients, on whom under the subsidiarity principle the Commission is not authorised to decide.

For each programme part-financed from the Structural Funds a list of individual projects, giving the total amount of aid granted to each recipient, is drawn up by the designated authorities for implementation purposes and is available to the Commission for its inspection work. The Commission asks the Honourable Member to apply to the Region of Tuscany for any information on individual aid recipients under the above programmes.

2. Point 2 of Written Question E-2354/02

The Honourable Member does not specify any sector in which aid might have been given and the Commission assumes that the context is still the common agricultural policy and Tuscany.

In addition to Structural Fund part-financing of investments olive growers may under the common market provisions receive olive oil production aid.

Any olive grower in the Union is free to accept this aid or to produce without it. The rules applicable are to be found in Regulation No 136/66/EEC of 22 September 1996 on establishment of a common organisation of the market in oils and fats(8) and Commission Regulation (EC) No 2366/98 of 30 October 1998 laying down detailed rules for application of the system of production aid for olive oil for the 1998/1999 to 2000/2001 marketing years(9). For 1998/1999 to 2003/2004 the aid is EUR 132,25/100 kg of oil actually produced. Under these Regulations a producer wishing to receive aid must each year submit a crop declaration and an aid application to the designated authorities in the Member State in which the oil is produced, and under the Community rules these documents are addressed to the national authorities. For Italy the designated body is the Agenzia per le erogazioni in agricoltura (AGEA), which is also responsible for paying the aid to recipients. The Commission asks the Honourable Member to apply to AGEA for any information on individual recipients of the olive oil production aid in Italy.

3. Point 3 of Written Question E-2354/02

The abovementioned Regulations, under which Community aid could be granted to any person meeting the terms of eligibility, are based on the following Articles of the EC Treaty: 33(ex-39), 36 (ex-42), 37 (ex-43) and 158 (ex-130a).

4. Point 4 of Written Question E-2354/02

In its communication to the Council and Parliament Mid-Term Review of the Common Agricultural Policy(10) the Commission proposes progressive reduction, in 3 % slices up to a maximum of up to 20 %, of direct grants to farms beyond EUR 5 000. The maximum payment would be EUR 300 000. It must be understood that at the moment this is a proposal that has not yet been approved, and also that the ceiling is proposed for certain direct payments under the common market provisions and not for all aid granted to the agriculture sector from the EAGGF.

5. Point 5 of Written Question E-2354/02

In the case of support for rural development from the EAGGF, Council Regulation (EC) No 1257/1999 of 17 May 1999(11), which establishes the framework for Community support for sustainable rural development from 1 January 2000, makes investment aid to agricultural holdings conditional inter alia on economic viability.

In the case of aid granted under the market provisions the criteria mentioned by the Honourable Member are not at present applicable.

(1) OJ L 145, 30.5.1986.

(2) OJ L 51, 20.2.1987.

(3) OJ L 197, 20.7.1985.

(4) OJ L 188, 19.7.1988.

(5) OJ L 185, 15.7.1988.

(6) OJ L 193, 31.7.1993.

(7) OJ L 142, 2.6.1997.

(8) OJ P 172, 30.9.1966.

(9) OJ L 293, 31.10.1998.

(10) COM(2002) 394 final.

(11) OJ L 160, 26.6.1999.