WRITTEN QUESTION E-1407/01

by Lord Inglewood (PPE-DE) to the Commission

(11 May 2001)

Subject: Effects of foot-and-mouth disease on the use of EU funding

Will the European Commission allow European money which is allocated for diversification to be used for the re-establishment of businesses which have been severely affected by the consequences of foot-and-mouth disease?

Answer given by Mr Fischler on behalf of the Commission

(19 July 2001)

The financial resources available for diversification purposes under the terms of Council Regulation (EC) No 1257/1999 of 17 May 1999 on support for rural development from the European Agricultural Guidance and Guarantee Fund (EAGGF) and amending and repealing certain Regulations(1), fall under two measures:

- Investment in agricultural holdings (Article 4), and

- diversification of agricultural activities and activities close to agriculture to provide multiple activities or alternative incomes (Article 33).

The financial allocation to these two measures has been a matter for Member States in the preparation of their Rural Development Programmes and, where applicable in their structural fund programmes under Objective 1 and Objective 2. Furthermore, subject to the requirements set out in Regulation (EC) No 1257/1999, the details and types of support provided are different for each programme as these are based on the respective national or regional circumstances and priorities. Member States have a substantial degree of flexibility to modify these programmes taking account of recent events and any strategic needs for the longer-term. Though for some modifications the regulations require Member States to submit proposals to the Commission for approval.

However, the degree of flexibility must be within the scope of Council Regulation (EC) No 1257/1999. Therefore, under these measures, it would be possible to support the re-establishment of businesses through diversification or other investments to either reduce production costs or to improve and redeploy production. But, it is not possible, for example, to use this support to re-stock farms that have suffered the destruction of their livestock.

The abovementioned Regulation includes provision for other structural measures which may be able to provide support for businesses facing difficulties as a result of foot-and-mouth disease. These include support for processing and marketing of agricultural products, training, infrastructure for agriculture, basic services for the rural economy and population, renovation and development of villages and tourism and craft activities. It will be a matter for the Member States

to decide how best these can be utilised (including the level of allocated financial resources) as part of the solution for either the immediate crisis or in the longer term recovery. The Commission is aware of decisions, already taken or, being considered by, Programme Monitoring Committees of current Structural Fund programmes to fast-track projects related to tourism, promotion or marketing schemes, business support and other relevant schemes, to assist the worst hit regions to overcome the difficulties they face.

(1) OJ L 160, 26.6.1999.