Proposal for a Council Directive on the list of less- favoured farming areas within the meaning of Regulation (EC) No 950/97 (Denmark)
Date: 1997-11-11
Institutions: European Commission
Subjects: Denmark, aid system, farm income, island region, less-favoured agricultural area

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels,  11.11.1997 
COM(97) 575  final 

97/0308 (CNS) 

Proposal for a 

COUNCIL DIRECTIVE 

on the Hst of less-favoured farming areas 

within the meaning of Regulation (EC) No 950/97 (Denmark) 

(presented by the Commission) 

EXPLANATORY  MEMORANDUM 

The  Danish  Government  has  sent  the  Commission,  in  accordance  with  Article 25  of 
Regulation  (EC)  No 95()A>7, a list of  islands suitable  lor  inclusion  in  the Community  list of 
less-favoured  farming  areas and  information  on the particular  features of these areas. 

The  permanent  natural  and  geographical  handicaps  existing  in  the  Danish  islands  result  in 
higher  production  and  transport  costs. The extra  costs,  estimated  by  the  Danish  authorities 
at  more  than  ECU 0.98  million,  prevent  farmers  in  these  areas  from  obtaining  from  their 
production  income  on  a  level  with  that  obtained  by  comparable  farmers  elsewhere  in  the 
Member State. 

The  areas  must  be  defined  in  accordance  with  Council  Regulation  (EC)  No 950/97  under 
less-favoured  areas  with  specific  natural  handicaps 
which 
(Article 25) where farming  needs to be continued  in order to preserve the countryside. 

islands  can  be  deemed 

Incomes from  farming  in these less-favoured  agricultural  areas are low. 

Thirty  Danish  islands  representing  around  23 350 ha  of  farm  land  satisfy  the  two-fold 
requirement  of  remoteness  and  a  farming  income  below  the  national  average  (87%  to 
90%). 

The application  of  these indices produces a cover of 0.84%  of  the utilised  agricultural  area 
of  Denmark.  The  areas  with  specific  natural  handicaps  do  not  exceed  4%  of  the  surface 
area of the country as provided  for  under Community  rules (1.1 %). 

The  Community  contribution  towards  expenditure  on  compensatory  allowances  (estimated 
at  ECU 0.25  million/year)  will  be  taken  into  consideration  as  part  of  the  overall  amount 
provided  for  in  respect  of  Objective 5(a)  of  the  Structural  Funds  and  the  forecasts  for  aid 
applications  drawn  up  in  accordance  with  Regulation  (EC)  No  1025/94  in  respect  of 
measures eligible under Regulation  (EEC) No 950/97. 

^ 

COUNCIL DIRECTIVE 

of 

on the Hst of less-favoured farming areas 

within the meaning of Regulation (EC) No 950/97 (Denmark) 

(Only the Danish version is authentic) 

THE COUNCIL OF THE EUROPEAN UNION, 

Having regard to the Treaty establishing the European Community, 

Having  regard  to  Council  Regulation  (EC)  No 950/97  of  20 May  1997  on  improving  the 
efficiency of agricultural structures1, and in particular Article 21(2) thereof, 

Having regard to the proposal from the Commission, 

Having regard to the opinion of the European Parliament2, 

Whereas the permanent natural and geographical handicaps existing in the Danish islands result 

in higher  production  and  transport  costs  that  prevent  farmers  in  these  areas from obtaining 

from  their production income on a level with that obtained by comparable farmers elsewhere in 

the Member State; 

Whereas the Danish Government has sent the Commission, in accordance with Article 21(1) of 

Regulation (EC) No 950/97, a list of islands suitable for inclusion in the Community list of less-

favoured farming areas and information on the particular features of these areas; 

Whereas, with a view to identifying the areas affected  by specific natural handicaps that can be 

deemed  less-favoured  areas  as  referred  to  in  Article 25  of  Regulation  (EC)  No 950/97,  all 
islands  of  less  than  600  km2  on  which  adverse  natural  conditions  contribute  to  a  farming 

income below the national average have been selected; 

1 OJNoL142,  2.6.1997, p. 1. 
2OJNo 

all  islands of less than 600 km2 on which adverse natural  conditions contribute to a  farming 

income below the national average have been selected; 

Whereas the total  surface area of the relevant areas docs not exceed  4% of  the total  surface 

area of the Member State in question; 

Whereas the nature and  level  of  the above  indices  used  by  the Government  of  Denmark  to 

define  the  areas  notified  to  the  Commission  correspond  to  the characteristics  of  the  areas 

affected  by specific  handicaps referred  to in Article 25 or Regulation  (EC) No 950/97, 

HAS ADOPTED THIS DIRECTIVE: 

Article 

The  list of  less-favoured  farming  areas in  Denmark  shall  be that contained  in  the Annex  to 

this  Directive  and  shall  be  included  in  the  Community  list  of  less-favoured  farming  areas 

within  the meaning of Article 25 of Regulation  (EC)  No 950/97. 

Article 2 

This Directive is addressed  to the Kingdom of  Denmark. 

Done at Brussels, 

For the Council 

The President 

LJ 

PROPOSED  DANISH  ISLANDS 

LESS FAVOURED AREAS  REQUESTED 

Danske 0 er 
Island  name 

Landarealer 
Land area 
Krn^ 

Landbrugsarealer 
UAA 
ha de SAU 

1  SAMSO(l) 
2  LAESO 
3  FANO(3) 

Sub-total: 3 main ISLANDS 
4  AGERSO (4), incl. Egholm 
5  ANHOLT 
6  ASKO, incl. Lilleo 
7  AVERNAKO 
8  BARSO 
9  BIRKHOLM 
10 BJORNO 
11  BAAGO 
12  DREJO 
13  EGHOLM [NordjyIIandsamt.](*) 
14  ENDELAVE 
15 FEJO (5), incl. SKALO 
16FEMO(5) 
17  FUR (2) 
18 HJARNO 
19 HJORTO 
20  LYO 
21  MANDO(3) 
22  NEKSELO 
23  OMO 
24  ORO 
25  SEJERO 
26  SKARO 
27  STRYNO 
28  TUNO(l) 
29  VENO (2) 
30  AARO 

Sub-total OTHER ISLANDS 
TOTAL OF REQUEST 
TOTAL DK 
L.F.A. REQUEST in (%) 

4%  de 43 077 Km2  = /  723 Km2 

(*) Islands in the same archipelago. 

114,3 
113,8 
5^8 
283,9 
7,83 
22,37 
3,88 
5,85 
2,66 
0,92 
1,50 
6,23 
4,28 
6,00 
13,08 
16,00 
11,38 
22,29 
3,21 
0,90 
6,05 
7,63 
2,23 
4,52 
15,02 
12,37 
1,97 
4,88 
3,52 
6,46 
5,68 
199 
482,6 
43 076,7 

| 

1,1%  | 

7 831 
2466 
929 
11 226 
709 
4 
215 
289 
232 
84 
158 
566 
235 
448 
800 
1424 
1009 
1100 
287 
90 
371 
547 
214 
337 
1200 
557 
112 
340 
270 
372 
150 
12 120 
23 346 
2 770 000 
0,84% 

FINANCIAL  STATEMENT 

1. 

TITLE OF OPERATION 

Proposal  for  a  Council  Directive  on  the  list  of  less-favoured  farming  areas  within  the 
meaning of Regulation  (EC)  No 950/97 (Denmark). 

1. 

BUDCET HEADING INVOLVED  (1996  NOMENCLATURE) 

Article 

B2-100 

Items 

B2-1001 
B2-1002 

3. 

LECAL BASIS 

operations, 

Structural 
Community  Support  Frameworks. 
Objective 5(a) (outside  1  and 5(b) areas) 
Objective 5(a) (in 5(b) areas) 

EAGGF  Guidance 

Section, 

Article 42 of the EC Treaty. 
Council  Regulation  (EC) No 950/97. 

4. 

DESCRIPTION OF OPERATION 

Objectives 

The purpose  of  the  proposal  is to define  the areas of  Denmark  affected  by  specific  natural 
handicaps as referred  to in Article 25 of Regulation  (EC) No 950/97. 

These areas  need  to be defined  specifically  for  the grant  of  the compensatory  allowance in 
respect of  the natural  handicaps  provided  for  in  Articles  17,  18 and  19 of  Regulation  (EC) 
No 950/97  and  for  the grant  of  specific  aid  for  sheep  farming  and  goat  farming  in certain 
less-favoured  areas under Regulation  (EEC)  No  1743/91. 

Period covered 

In view  of  the permanent  nature of  the natural  handicaps affecting  the  less-favoured  areas, 
the duration of the proposed definition  is not limited. 

5. 

CLASSIFICATION OF EXPENDITURE 

Non-compulsory expenditure 

Differentiated  appropriations 

6. 

Type of expenditure involved 

Under  the  existing  rules  provision  is  made  for  part-financing  of  25%  of  eligible  public 
expenditure  subject  to  the  forecasts  made  for  the  period  1994-99  for  Objective  5(a) 
expenditure  in  general  and,  under  Regulation  (EC)  No 950/97  in  particular,  subject  to the 
forecasts  made pursuant  to Regulation  (EC) No  1025/94. 

7. 

FINANCIAL IMPACT 

The  proposal  is  for  the  classification  of  23 346 ha  of  utilised  agricultural  area  of  which 
8 294 ha  and  5 985 LU  would  be  eligible  for  the  compensatory  allowances  referred  to  in 
Articles  17,  18 and  19 of  Regulation  (EC)  No 950/97  on  the basis of  the estimates  of  the 
Danish  Ministry of Agriculture. 

The average aid envisaged  by Denmark  is ECU 75/ha and  ECU 60/LU. The eligible public 
expenditure  arising  from  the  application  of  the  compensatory  allowance  scheme  can  be 
estimated  at  some  ECU 0.981  million  per  year,  which  would  involve  a  cost  to  the 
Community  budget of  ECU 0.245  million,  broken down  into Objective 5(a) in 5(b) regions 
(ECU  0.245  million)  and  Objective  5(a)  in  5(a)  areas  only  (ECU 0.00  million).  The 
specific  aid  for  sheep farming  is detailed  in the Annex. 

These amounts are subject  to the general  provisions  lor the  financial  implementation  of  the 
Structural  Funds,  and  in  particular  to  Articles 29  to 38 of  Regulation  (EC)  No 950/97 and 
should  be  included  with  the  amounts  provided  for  under  Regulation  (EC)  No  1025/94  on 
the expenditure  forecasts  for  Objective 5(a)  for the period  1994-99. 

Indicative schedule of appropriations 

Year 

Total amount  granted  Item  B2-1001 

Item B2-1002 

(Ob. 5(a) in 5(a) areas) 

(Ob.  5(a) 
regions) 

in  5(b) 

1998 

1999 

ECU 0.98m 

ECU 0.98m 

pm 

pm 

ECU  0.25m 

ECU  0.25m 

NB The  specific  aid  lor  sheep  farming  will  be covered  by  the  EA(i(il;  Guarantee  Section 
from  1999. 

For  subsequent  years,  expenditure  eligible  for  Community  financing  should  be  the  same 
since no structural change is expected. 

8.  Fraud  prevention  measures 

The  compensatory  allowance  scheme  is  subject  to  Articles  23  (financial  control)  and  24 
(reduction,  suspension  and  cancellation  of assistance)  of  Regulation  (EEC)  No 4253/88 on 
the coordination of the Structural  Funds. 

Since  structural  assistance  is  involved,  Regulation  (EC)  No  1681/94  on  irregularities  and 
the recovery of amounts unduly paid also applies. 

In addition,  the compensatory  allowance scheme  under  Article  19(l)(a) of  Regulation  (EC) 
No 950/97  is  covered  by  the  integrated  administration  and  control  system  introduced  by 
Regulation  (EEC)  No 3508/92. 

9.  Eléments of cost-effectiveness  analysis 

Objectives  of the  operation 

Some  Danish  islands  are  affected  by  permanent  natural  and  geographical  handicaps 
resulting  in  higher  production  and  transport  costs  that  prevent  farmers  in  these  areas  from 
obtaining  from  their production  income on a level with that obtained  by comparable  farmers 
elsewhere. 

The  final  beneficiaries  of  compensatory  allowances  in  Denmark  are  farmers  in  less-
favoured  areas.  The  number  of  eligible  holdings  is estimated  by  Denmark  to be 996,  each 
beneficiary  receiving  average  compensatory  aid  of  around  ECU  1  090/year  of  which 
ECU 250 is borne by the Community  budget. 

Grounds  for  the  operation 

Regulation  (EC)  No 950/97  acknowledges  that  mountain  and  other  less-favoured  farming 
areas affected  by permanent  natural  handicaps should  be defined. 

The  Danish  Government  has sent  the Commission  a  list  of  islands  suitable  for  inclusion  in 
the Community  list and  information  on their particular  features. 

The  nature  and  level  of  the  indices  used  to  define  the  areas  notified  to  the  Commission 
correspond  to  the  characteristics  of  the  areas  referred  to  in  Article 25  of  Regulation  (EC) 
No 950/97. 

Incomes  from  farming  in  these  small  Danish  islands  are  low.  On  account  of  their 
remoteness  the  islands  will  be  deemed  less-favoured  areas  affected  by  specific  handicaps 
where farming  must be continued  in order to conserve the countryside (Article 25). 

8 

Result 

The application  of  these  indices produces a cover of 0.84%  of  the  utilised  agricultural  area 
of  Denmark,  i.e. around 23 346 ha.  The areas with s|Xicific handicaps do not exceed 4% of 
the surface area of the country (1.1%). 

Procedure 

The Commission  is required,  under Article 21 of  Regulation  (EC)  No 950/97, to forward  a 
proposal  to  the  Council.  Strictly  speaking,  the  operation  is  not  a  new  one  and,  in 
accordance  with  the  rules  in  force,  there  is  no  alternative  to  this  form  of  assistance  or 
Community  financing. 

Monitoring and  evaluation  of the  operation 

Since  structural  assistance  is  involved,  Articles  25  (monitoring)  and  26  (assessment)  of 
Regulation  (EEC) No 4253/88 on the coordination  of the Structural  Funds apply. 

Coherence  with  financial  programming 

Funding  will  be provided  from  the budget  allocation  of  ECU  127 million  (1994 prices)  for 
the  agricultural  part  of  Objective  5(a)  for  the  period  1994-99  in  Denmark  established  in 
Commission  Decision 94/279/EC. 

O 

ANNEX 

Specific  aid for sheep farming and goat farming  in certain less-favoured  areas 

Specific aid for sheep farming  and goat  farming  of  ECU (A) 6.641  per head is provided  for 

under  Regulation  (EEC)  No  1323/90, as amended  by  Regulation  (EEC)  No 363/93. Given 

a  total  of  399 sheep,  the  cost  to  the  EAGGF Guarantee  Section  is  ECU  (A) 2  650  or 

ECU  (B) 0.003  million.  This calculation  assumes  payment  of  the  premium  from  the  1998 

marketing  year.  On  the  basis  of  the  traditional  pattern  of  payments  in  Denmark,  the 

premium  will  be paid  after  the end  of  the  1998 marketing  year and  the expenditure  will  be 

charged  to the  1999 budget. 

Cost -  1998 and subsequent  marketing years  Budget  (ECU  million) 

( 12 months) 

ECU 0.007  m 

1998 

- 

1999 

0.003 

2000 etc. 

0.003 

ISSN 0254-1475 

COM(97) 575  final 

DOCUMENTS 

EN 

03  13 

Catalogue number  :  CB-CO-97-591-EN-C 

ISBN  92-78-26890-9 

Office  for Official  Publications of the European  Communities 

L-2985 Luxembourg 

•i-i