Proposal for a Council Regulation adapting Regulation (EC) No 1698/2005 on support for rural development by the European Agricultural Fund for Rural Development (EAFRD), by reason of the accession of Bulgaria and Romania to the European Union
Date: 2006-04-05
Institutions: European Commission
Subjects: Bulgaria, EU financing, Romania, accession to the European Union, aid to agriculture, fund (EU), rural development

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 5.4.2006 
COM(2006) 149 final 

Proposal for a 

COUNCIL REGULATION 

adapting Regulation (EC) No 1698/2005 on support for rural development by the 
European Agricultural Fund for Rural Development (EAFRD), by reason of the 
accession of Bulgaria and Romania to the European Union 

(presented by the Commission) 

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EXPLANATORY MEMORANDUM 

On  20  September  2005  the  Council  adopted  Regulation  (EC)  No  1698/2005  on  support  for 
rural  development  by  the  European  Agricultural  Fund  for  Rural  Development  which  makes 
changes  to  the  acquis  on  which  the  accession  negotiations  with  Bulgaria  and  Romania  were 
based.  This  regulation  does  not  take  account  of  the  results  of  the  accession  negotiations  or 
indeed of enlargement itself. There is therefore a need to adapt both the Act of Accession and 
the text of the new  rural  development  regulation before accession to ensure that  the two  are 
compatible.  

Specifically, there is a need to: 

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adapt  the  rural  development-related  annexes  of  the  Act  of  Accession  so  that  the 
negotiation results are compatible with the new acquis (where references in the Act of 
Accession have become obsolete or where the negotiation results are not immediately 
compatible with the new rural development regulation); 

adapt articles 29 and 34 of the Act of Accession insofar as they refer to transitional 
and implementing rules for rural development; 

adapt the new rural development regulation so that it can be applied to Bulgaria and 
Romania and so that it incorporates as appropriate the accession negotiation results. 

The guiding principles followed in preparing these adaptations have been that the fundamental 
character and principles of the accession negotiation results should be maintained and that the 
adaptations should be limited to what is absolutely necessary. 

These proposals have no financial implications for the Community budget. 

The  proposals  made  in  the  legal  texts  (two  Council  Decisions  and  a  Council  Regulation 
respectively) are described below. 

LEADER – Minimum financial threshold for axis 4 

Regulation  (EC)  No  1698/2005  establishes  that  within  each  rural  development  programme 
there  must  be  a  compulsory  Leader  axis  to  support  locally  designed  and  implemented  rural 
development  strategies,  and  that  this  axis  must  account  for  a  minimum  percentage  of  the 
EAFRD  contribution  to  the  programme.  Given  the  lack  of  experience  of  Bulgaria  and 
Romania in implementing the Leader approach and in order to build sufficient local capacity 
to apply Leader, the average financial contribution of 2.5% for the Leader axis applicable to 
the  EU-10  should  be  applied  for  the  period 2010–2013  only  for  Bulgaria and Romania.  The 
legal text also clarifies how this percentage is to be calculated. 

LEADER + type measures 

Measures  agreed  with  Bulgaria  and  Romania  relating  to  support  for  acquisition  of  skills 
intended to prepare rural communities to conceive and implement local development strategies 
differ from the provisions of Regulation (EC) No 1698/2005. The results of the negotiations 
with Bulgaria and Romania should be maintained in this area.  

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Advisory Services 

The provisions of Regulation (EC) No 1698/2005 concerning support for the use of advisory 
services differ in both their scope  and  level of financial support for beneficiaries from those 
laid down for the  period 2007–09 in the Accession Treaty. So as to avoid  any possibility of 
double financing for the first three years of the programme, Bulgaria and Romania should be 
given the choice of implementing either the measure provided for in Annex VIII to the Act of 
Accession  or  the  measure  provided  for  in  Regulation  (EC)  No  1698/2005.  Furthermore,  in 
order to give effect to the joint statement by the Council and Commission regarding Bulgaria 
and  Romania,  entered  in  the  minutes  of  the  Council  meeting  of  19/20  September  at  which 
political agreement on Regulation (EC) No 1698/2005 was reached, it is proposed to extend 
the  Accession  Treaty  measure  on  the  provision  of  advisory  services  until  2013  for  farmers 
receiving semi-subsistence support. 

Agri-environment and animal welfare measures 

The accession negotiation results included a provision for Bulgaria and Romania to cofinance 
agri-environment  and  animal  welfare  measures  at  the  level  of  85%.  To  ensure  consistency 
with  the  new  financial  architecture  of  Regulation  (EC)  No  1698/2005,  under  which 
co-financing rates are no longer set at the level of the measure, but at axis level, it is proposed 
to apply a maximum co-financing rate of 82% to Bulgaria and Romania for axis 2 (instead of 
the  maximum  of  80%  provided  for  under  Regulation  (EC)  No  1698/2005)  over  the  entire 
programme and programming period. This figure of 82% is based on the expected weighting 
of  the  agri-environment  and  animal  welfare  measures  within  these  countries’  overall 
expenditure  under  axis  2  and  so  maintains  an  equivalent  benefit  to  that  accorded  in  the 
Accession Treaty. 

Complements to national direct payments 

Council  Regulation  (EC)  No  1290/2005  on  the  financing  of  the  common  agricultural  policy 
has established a single Fund for Community support for rural development, replacing the two 
previous sources of funding (EAGGF-Guidance and Guarantee). As a result, it is necessary to 
clarify  the  basis  for  calculation  of  the  20%  ceiling  specified  in  the  complement  to  direct 
payments measure provided for in Annex VIII of the Act of Accession on amounts of 2nd pillar 
funds which can be transferred to be used as complements to direct payments to farmers under 
the  1st  pillar  of  the  CAP.  Taking  into  account  the  need  for  consistency  with  the  provisions 
applied to the EU-10, the rural development needs of the two countries, and the importance of 
guarding  against  potentially  excessive  transfers  of  2nd  pillar  funds  to  the  1st pillar,  it  is 
proposed that the 20% ceiling should apply to the EAGGF-Guarantee component only. 

Transitional and implementing rules 

References  to  transitional  and  implementing  rules  in  the  Act  of  Accession  of  Bulgaria  and 
Romania  should  be  adapted  to  comply  with  the  procedures  set  out  in  Regulation  (EC) 
No 1698/2005.  

Technical adjustments 

Bulgaria and Romania should be added to the list of new Member States to which transitional 
measures apply under Regulation (EC) No 1698/2005. It is necessary to delete the following 
provisions of Annex VIII of the Act of Accession, which are either (1) now covered directly 
by  Regulation  (EC)  No  1698/2005:  support  for  semi-subsistence  farms  undergoing 

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restructuring,  producer  groups,  technical assistance,  or  (2) no longer applicable: requirement 
that investment support be limited to agricultural holdings for which economic viability at the 
end of the realisation of the investment can be demonstrated. 

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Proposal for a 

COUNCIL REGULATION 

adapting Regulation (EC) No 1698/2005 on support for rural development by the 
European Agricultural Fund for Rural Development (EAFRD), by reason of the 
accession of Bulgaria and Romania to the European Union 

THE COUNCIL OF THE EUROPEAN UNION, 

Having regard to the Treaty establishing the European Community, 

Having  regard  to  the  Treaty  of  Accession  of  Bulgaria  and  Romania,  and  in  particular 
Article 4(3) thereof,  

Having regard to the Act of Accession of Bulgaria and Romania, and in particular Article 56 
thereof, 

Having regard to the proposal from the Commission, 

Whereas: 

(1) 

(2) 

(3) 

Council  Regulation  (EC)  No  1698/20051 
introduced  general  rules  governing 
Community support for rural development policy for the programming period 2007 to 
2013 and established priorities and measures for rural development. 

Those general rules and measures should be adapted to allow their implementation in 
Bulgaria and Romania as from the date of accession of those countries to the European 
Union. 

Regulation (EC) No 1698/2005 establishes a compulsory Leader axis within the rural 
development  programme,  which  must  account  for  a  minimum  percentage  of  EAFRD 
contribution to the programme. Given the lack of experience of Bulgaria and Romania 
in implementing the Leader approach and in order to build sufficient local capacity to 
apply Leader, the average financial contribution of 2,5% for the Leader axis should be 
applied for the period 2010–2013 for those countries. 

(4)  With  a  view  to  allowing  Bulgaria  and  Romania  to  benefit  until  2013  from  the 
transitional measures concerning the support to semi-subsistence agricultural holdings 
and the setting-up of producer  groups, Bulgaria  and Romania should be added to the 
list of countries benefiting from these measures. 

(5) 

Regulation (EC) No 1698/2005 should therefore be amended accordingly, 

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OJ L 277, 21.10.2005, p. 1. 

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HAS ADOPTED THIS REGULATION: 

Article 1 

Regulation (EC) No 1698/2005 is amended as follows: 

(1) 

In Article 17(2), the following subparagraph is added: 

“For  Bulgaria  and  Romania,  the  average  of  at  least  2,5%  of  the  EAFRD  total 
contribution  for  axis  4  shall  be  respected  during  the  period  2010–2013.  Any 
contribution  from  the  EAFRD  for  that  axis  during  the  period  2007–2009  shall  be 
taken into account for the calculation of that percentage.” 

(2) 

In Article 20(d), the introductory words are replaced by the following: 

“transitional  measures  for  Bulgaria,  the  Czech  Republic,  Estonia,  Cyprus,  Latvia, 
Lithuania, Hungary, Malta, Poland, Romania, Slovenia and Slovakia concerning:” 

This Regulation shall enter into force on 1 January 2007 subject to the entry into force of the 
Treaty of Accession of Bulgaria and Romania.  

Article 2 

This Regulation shall be binding in its entirety and directly applicable in all Member States. 

Done at Brussels,  

For the Council 
The President 

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