EN Official Journal of the European Union CE 33/177

(2004/C 33 E/180)

WRITTEN QUESTION P-1849/03

by Kyösti Virrankoski (ELDR) to the Commission

(26 May 2003)

Subject: Buying and selling of farms and agricultural reform

The Commission proposal to reform EU agricultural policy provides for, among other things, single farm support decoupled from production. The amount of support would be determined according to the CAP aids paid in the years from 2000 to 2002. The support would not be linked to the land area.

The proposal has led to great uncertainty among farmers who are buying or selling farmland because it is not clear from the text proper, any more than from other documents, what proportion of the single farm support, if any, is passed on when a farm changes hands. The same problem applies to land tenancy. There is also a question mark over farming partnerships. For example, a farm might have been run during the reference period on a partnership basis, and received the corresponding agricultural support, but later, following a transfer of ownership, the land might have been divided among the partners and the partnership might have ceased to exist.

The problem affects the whole of EU territory, irrespective of the Member State, and has been brought about entirely by the Commission. Hundreds of thousands of farmers are facing a dilemma. Farmers do not dare and do not know how to draw up deeds of sale, tenancy agreements, or partnership agreements. The situation is causing difficulties particularly for young farmers who are in the process of buying or extending their farms.

What steps will the Commission take to dispel the current confusion?

What kind of clause should be included in a deed of sale, partnership agreement, or tenancy agreement if the intention is to share out the CAP aid for the farm to be made over in proportion to the land areas?

Answer given by Mr Fischler on behalf of the Commission

(27 June 2003)

The Commission is of the opinion that, where the proposal of the single farm payment caused problems of confusion among farmers, these problems are not inherent in the proposal itself and would, therefore, have to be solved through information. The Commission will undertake further efforts in this respect.

The Commission proposal on the single farm payment foresees clear rules.

As regards the establishment and allocation of payment entitlements, it foresees the following:

— A farmer's reference amount will be calculated as the three years average of total amounts he received from a defined number of support schemes during the reference period of 2000-2002.

— Transferable payment entitlements are established by dividing the reference amount by the three years average number of all hectare that gave right to payments during the reference period.

— Entitlements can be transferred with or without land.

— Payments will be made only for those entitlements that are accompanied by a hectare of eligible land.

— Entitlements that remain unused for more than limited years would go to the national reserve.

Entitlements are generally allocated to those active farmers who claimed payments during the reference period. Only in defined number of hardship cases, farmers not meeting this general criterion, could get entitlements from the national reserve.

The above-mentioned principles are maintained in the case of heritage where the heir takes the place of the original beneficiary. Furthermore, the Greek presidency has proposed that in cases of new farm cooperations the new enterprise would get the entitlements and that in the case of scissions during the reference period the entitlements would be allocated on a pro rata basis.

No provision has been made attaching payment entitlements to land ownership. This implies that land transfers are generally independent from transfers of payment entitlements. It is up to the contract partners to decide whether or not they want to lump both together. In other words, land transfers leave an individual farmer's entitlements unaffected, unless he agrees with his contract partner to transfer the entitlement together with the land.

As regards the clauses by which such transactions would be put in place, the concrete formulation would be a matter of national law and private contract.