Proposal for a Council Regulation amending Regulation (EC) No 1782/2003 establishing common rules for direct support schemes under the common agricultural policy and establishing certain support schemes for farmers and Regulation (EC) No 1698/2005 on support for rural development by the European Agricultural Fund for Rural Development (EAFRD)
Date: 2007-08-29
Institutions: European Commission
Subjects: aid system, aid to agriculture, area of holding, common agricultural policy, development aid, financial aid, fund (EU)

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 29.8.2007 
COM(2007) 484 final 

2007/0177 (CNS) 

Proposal for a 

COUNCIL REGULATION 

amending Regulation (EC) No 1782/2003 establishing common rules for direct support 
schemes under the common agricultural policy and establishing certain support schemes 
for farmers and Regulation (EC) No 1698/2005 on support for rural development by the 
European Agricultural Fund for Rural Development (EAFRD) 

(presented by the Commission) 

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EXPLANATORY MEMORANDUM 

1. 

CONTEXT OF THE PROPOSAL 

•  Grounds for and objectives of the proposal 

In  2003  the  Council  reached  a  political  agreement  on  the  CAP  reform,  paving  the 
way for an in-depth reshuffling of the way the EU is granting income support to its 
farmers and introducing mandatory cross-compliance obligations. 

•  General context 

In  the  report  to  the  Council  on  the  implementation  of  cross-compliance,  the 
Commission  has  identified  some  possible  specific  improvements  in  terms  of 
efficiency and/or simplification. 

•  Existing provisions in the area of the proposal 

Council Regulation (EC) No 1782/2003. 

•  Consistency with the other policies and objectives of the Union 

Not applicable. 

2. 

CONSULTATION OF INTERESTED PARTIES AND IMPACT ASSESSMENT 

•  Consultation of interested parties 

Parties already consulted and urgency. 

•  Collection and use of expertise 

There was no need for external expertise. 

•  Impact assessment 

Not applicable. 

3. 

LEGAL ELEMENTS OF THE PROPOSAL 

•  Summary of the proposed action 

The  aim  of  this  proposal  is  to  apply  from  the  year  2008  the  following  specific 
improvements: 

– 

the conclusion of the Commission report to the Council regarding the phasing-
in of the statutory management requirements covered by the cross-compliance 
obligations  in  the  new  Member  States  that  have  opted  for  the  single  area 
payment scheme; 

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– 

– 

the  simplification  of  the  rules  for  eligibility  under  both  the  single  payment 
scheme and the single area payment scheme regarding the time period during 
which the farmers shall have the land at their disposal; the clarification of the 
farmer's  responsibility  vis-à-vis  cross  compliance  in  case  of  transfer  of  land 
during the calendar year; 

the introduction of a legal basis for the implementation under cross compliance 
of a de minimis rule for applying reductions and of exemptions from reductions 
for minor infringements. 

Additionally, it is proposed that for all the new Member States opting to differentiate 
the  per  unit  value  of  entitlements  allocated  to  hectares  of  grassland  or  permanent 
pasture  and  of  any  other  eligible  hectares  in  the  framework  of  the  single  payment 
scheme, the date referred to for identifying the parcels is established on 30 June 2006 
instead of 30 June 2003. 

This  proposal  includes  also  a  modification  to  the  special  provisions  governing  the 
complementary national direct payments in Cyprus, as a result of the extension of the 
period for the implementation of the single area payment scheme that was adopted by 
the Council on 19 December 2006. 

•  Legal basis 

Article 37(2) of the Treaty establishing the European Community. 

•  Proportionality principle 

The  proposal  complies  with  the  proportionality  principle  for  the  following  reason: 
the abolition of the 10-months rule, the minor non-compliance and the 'de minimis' 
rule in Regulation (EC) No 1782/2003 will simplify the administrative burden. 

•  Choice of instruments 

Proposed instrument: regulation. 
Other  means  would  not  be  adequate  for  the  following  reason:  a  regulation  must  be 
amended by a regulation. 

4. 

BUDGETARY IMPLICATION 

The  additional  cost  for  the  Community  budget  would  be  the  consequences  of  not 
applying reductions under cross compliance in case of application of the de minimis 
rule and the exemptions for minor infringements. 

5. 

ADDITIONAL INFORMATION 

•  Simplification 

The  proposal  provides  for  simplification  of  administrative  procedures  for  public 
authorities (EU or national). 

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Simplification of the eligibility rules under the single payment scheme and the single 
area payment scheme regarding the time period during which the farmers shall have 
the land at their disposal. 

The  proposal  is  included  in  the  Commission's  Work  and  Legislative  Programme 
under the reference 2007/AGRI/040. 

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2007/0177 (CNS) 

Proposal for a 

COUNCIL REGULATION 

amending Regulation (EC) No 1782/2003 establishing common rules for direct support 
schemes under the common agricultural policy and establishing certain support schemes 
for farmers and Regulation (EC) No 1698/2005 on support for rural development by the 
European Agricultural Fund for Rural Development (EAFRD) 

THE COUNCIL OF THE EUROPEAN UNION, 

Having  regard  to  the  Treaty  establishing  the  European  Community,  and  in  particular  the 
third subparagraph of Article 37(2) thereof, 

Having regard to the proposal from the Commission, 

Having regard to the opinion of the European Parliament1, 

Whereas: 

(1) 

(2) 

Experience has unveiled the need to introduce a measure of tolerance for minor cases 
of  non-compliance,  whose  severity,  extent  and  permanence  would  not  justify  an 
immediate reduction of the direct payments to be granted. Such measure of tolerance 
should include in particular a specific follow-up by the competent authority. Besides, 
applying  reductions  to  very  low  initial  amounts  may  prove  burdensome  for  the 
administration  whilst  offering  a  questionable  added-value  in  respect  of  its  deterrent 
aspect.  As  a  consequence,  a  suitable  threshold  should  be  defined,  below  which 
Member States may decide not to apply any reduction, provided a specific follow-up is 
foreseen. 

Article  44(3)  of  Council  Regulation  (EC)  No 1782/20032  provides  that  farmers  shall 
keep at their disposal for a period of at least 10 months the parcels corresponding to 
the eligible hectare. Experience shows that this condition risks putting high constraints 
on the functioning of the land market and creates significant administrative workload 
for the farmers and the administrative services. A reduction of the time period would 
not  jeopardise  the  management  of  the  cross-compliance  obligations.  On  the  other 
hand, it is also necessary to establish a date where the parcels should be at the farmer's 
disposal to avoid double claims for the same land. Therefore it would be appropriate to 
establish that farmers shall have the parcels at their disposal on the 15 June of the year 
of  submission  of  the  aid  application.  The  same  rule  should  also  be  applied  for  the 
Member States applying the single area payment scheme. It would be also appropriate 

1 
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OJ C …, …, p. …. 
OJ L 270, 21.10.2003, p. 1. Regulation as last amended by Regulation (EC) No 2013/2006 (OJ L 384, 
29.12.2006, p. 13). 

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(3) 

(4) 

(5) 

to  set  up  the  rules  as  regards  the  responsibilities  under  cross-compliance  in  case  of 
transfer of land. 

Article 71h of Regulation (EC) No 1782/2003 provides that, in the framework of the 
single payment scheme, the new Member States within the meaning of Article 2(g) of 
that  Regulation  may  differentiate  the  per  unit  value  of  entitlements  allocated  to 
hectares  of  grassland  or  permanent  pasture  and  of  any  other  eligible  hectares  as 
identified  on 30 June 2003 or on 30 June 2005 in  the  case  of  Bulgaria  and  Romania. 
The  new  Member  States  have  established  an  identification  system  for  agricultural 
parcels  in  compliance  with  Article 20  of  Regulation  (EC)  No 1782/2003.  When 
switching from the old to the new identification system, the features of certain parcels 
as existing in 2003 may not have been accurately reflected into the new identification 
system due to technical difficulties. In order to allow a smooth implementation of this 
optional  differentiation  in  all  the  new  Member  States,  the  date  referred  to  for 
identifying  the  parcels  should  be  established  on  30 June 2006.  Article 71h  of 
Regulation (EC) No 1782/2003 should be amended accordingly. 

Experience shows that the setting-up of the administrative network that is needed for 
the  management  of  the  statutory  management  requirements  covered  by  the  cross-
compliance  obligations  requests  an  important  administrative  work.  A  three  years 
phasing-in in the new Member States that are using the single area payment scheme, 
similar to the phasing-in applied in the Community as constituted on 30 April 2004 in 
accordance  with  the  time  schedule  described  in  Annex III  to  Regulation  (EC) 
No 1782/2003,  would  ease  the  process  of  introduction  of  the  statutory  management 
requirements  and  their  smooth  implementation.  This  phasing-in  should  be  possible 
even  if  the  new  Member  State  decides  to  fully  apply  the  direct  payments  before  the 
last  possible  date  for  applying  the  single  area  payment  scheme.  Article  143b(6)  of 
Regulation  (EC)  No 1782/2003  and  Article 51(3)  of  Council  Regulation  (EC) 
No 1698/20053 should be amended accordingly. 

Article  143b  (10)  and  (11)  of  Regulation  (EC)  No 1782/2003  lays  down  the  rules 
governing the passage of new Member States using the single area payment scheme to 
the  application  of  the  single  payment  system.  According  to  these  rules  the 
Commission  has  to  authorize  the  decision  of  a  new  Member  State  to  implement  the 
single  payment  scheme  after  assessing  the  preparedness  of  the  new  Member  State 
concerned.  This  prior  authorisation  by  the  Commission  does  not  appear  to  be 
necessary  in  a  present  context  where  almost  all  direct  payments  are  decoupled  and 
taking into account that both the single area payment scheme and the single payment 
scheme  are  decoupled  and  area-based  payments  sharing  most  of  the  elements  of  the 
integrated  system,  notably  the  land  parcel  identification  system.  Those  provisions 
should therefore be deleted. 

(6) 

Table 2 of Annex XII to Regulation (EC) No 1782/2003 sets out the total amounts of 
Complementary National Direct Payments to be paid in Cyprus in case of application 
of  the  Single  Area  Payment  Scheme  (SAPS)  up  to  2008.  Further  to  the  extension  of 
the application of SAPS by Council Regulation (EC) No 2012/2006, it is necessary to 
set out the total amounts in case of application of SAPS in 2009 and 2010. 

3 

OJ L 277, 21.10.2005, p. 1. Regulation as last amended by Regulation (EC) No 2012/2006 (OJ L 384, 
29.12.2006, p. 8). 

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(7) 

(8) 

New  Member States having decided to apply the single payment scheme have opted 
for introducing it from 2007. It is appropriate to apply the modification of Article 71h 
of Regulation (EC) No 1782/2003 from that date. 

Regulation  (EC)  No 1782/2003  and  Regulation  (EC)  No 1698/2005  should  therefore 
be amended accordingly, 

HAS ADOPTED THIS REGULATION: 

Article 1 

Regulation (EC) No 1782/2003 is amended as follows: 

(1) 

Article 6 is amended as follows: 

(a)  Paragraph (1) is replaced by the following: 

"1.  Where  the  statutory  management  requirements  or  good  agricultural  and 
environmental conditions are not complied with in a given calendar year 
(hereinafter  'the  calendar  year  concerned'),  the  total  amount  of  direct 
payments  to  be  granted,  after  application  of  Articles  10  and  11  to  the 
farmer  who  submitted  an  application  in  the  calendar  year  concerned, 
shall  be  reduced  or  cancelled  in  accordance  with  the  detailed  rules  laid 
down under Article 7. 

Subject to paragraph 2, the farmer who submitted an aid application shall 
be held liable unless he can show that the non-compliance in question is 
neither the result of an action or omission directly attributable: 

(a) 

to himself, or 

(b) 

in case where the agricultural land has been transferred during the 
calendar year concerned, 

– 

– 

to  the  transferee  where  the  transferral  has  taken  place 
between the date referred to in Article 44(3) and 1 January of 
the following calendar year; 

to  the  transferor,  where  the  transferral  has  taken  place 
between  1  January  of  the  calendar  year  concerned  and  the 
date referred to in Article 44(3)." 

(b)  The following paragraph is added: 

"3.  Notwithstanding paragraph 1 and pursuant to the conditions laid down in 
the detailed rules referred to in Article 7(1), Member States may decide 
not to apply a reduction amounting to EUR 50 or less per farmer and per 
calendar year. 

Any finding of non-compliance shall nevertheless be subject to a specific 
follow-up by the competent authority. Any such findings, the follow-up 

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measures  and  the  remedial  action  to  be  taken  shall  be  notified  to  the 
farmer." 

(2) 

"In Article 7(2), the following subparagraphs are added: 

"Pursuant to the conditions laid down in the detailed rules referred to in paragraph 1, 
Member  States  may  decide  that  no  reduction  is  applied  where  a  case  of  non-
compliance,  depending  on  its  specific  circumstances  and  given  its  severity,  extent 
and  permanence,  is  to  be  considered  as  minor.  Cases  of  non-compliance  which 
constitute a direct risk to public or animal health shall however not be considered as 
minor. 

Any  finding  of  minor  non-compliance  shall  nevertheless  be  subject  to  a  specific 
follow-up by the competent authority. Any such finding, the follow-up measures and 
the  remedial  action  to  be  taken  shall  be  notified  to  the  farmer.  This  subparagraph 
shall not apply where the farmer has taken immediate remedial action putting an end 
to the non-compliance found". 

(3) 

In Article 44(3), the second sentence is replaced by the following: 

"Except in case of force majeure or exceptional circumstances, these parcels shall be 
at  the  farmer's  disposal  on  the  15  June  of  the  year  of  submission  of  the  aid 
application."  

(4) 

Article 71h is replaced by the following: 

"Article 71h 
Grassland 

The  new  Member  States  may  also,  according  to  objective  criteria,  fix,  within  the 
regional ceiling or part of it, different per unit values of entitlements to be allocated 
to  farmers  referred  to  in  Article 71f  (1),  for  hectares  of  grassland  as  identified  on 
30 June 2006  and  for  any  other  eligible  hectare  or  alternatively  for  hectares  of 
permanent pasture as identified on 30 June 2006 and for any other eligible hectare." 

(5) 

Article 143b is amended as follows: 

(a) 

In the first subparagraph of paragraph 5, the following sentence is added:  

"Except  in  case  of  force  majeure  or  exceptional  circumstances,  these  parcels 
shall be at the farmer's disposal on the 15 June of the year of submission of the 
aid application." 

(b) 

In paragraph 6, the third subparagraph is replaced by the following: 

“As  from  1  January  2005  and  until  31  December  2008  the  application  of 
Articles 3, 4, 6, 7 and 9 shall be optional for the new Member States insofar as 
those  provisions  relate  to  statutory  management  requirements.  As  from 
1 January 2009  a  farmer  receiving  payments  under  the  single  area  payment 
scheme  shall  respect  the  statutory  management  requirements  referred  to  in 
Annex III according to the following timetable: 

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(a) 

requirements referred to in point A shall apply from 1 January 2009; 

(b) 

requirements referred to in point B shall apply from 1 January 2010; 

(c) 

requirements referred to in point C shall apply from 1 January 2011. 

However, for Bulgaria and Romania, the application of Articles 3, 4, 6, 7 and 9 
shall be optional until 31 December 2011 insofar as those provisions relate to 
statutory  management  requirements.  As  from  1 January 2012  a  farmer 
receiving  payments  under  the  single  area  payment  scheme  shall  respect  the 
statutory  management  requirements  referred  to  in  Annex III  according  to  the 
following timetable: 

(a) 

requirements referred to in point A shall apply from 1 January 2012; 

(b) 

requirements referred to in point B shall apply from 1 January 2013; 

(c) 

requirements referred to in point C shall apply from 1 January 2014. 

New Member States may apply this option also in the case where they decide 
to terminate the application of the single area payment scheme before the end 
of the period of application provided for in paragraph 9.” 

(c) 

In paragraph 9, the first sentence is replaced by the following: 

"For any new Member State the single area payment scheme shall be available 
for a period of application until the end of 2010." 

(d)  Paragraphs 10 and 11 are deleted. 

(6) 

Annex XII is amended in accordance with the Annex to this Regulation. 

Article 2 

In  Article  51(3)  of  Regulation  (EC)  No 1698/2005,  the  second  subparagraph  is  replaced  by 
the following: 

“The  derogation  provided  for  in  the  first  subparagraph  shall  apply  until  31 December 2008. 
As from 1 January 2009 a farmer receiving payments under the single area payment scheme 
shall  respect  the  statutory  management  requirements  referred  to  in  Annex III  of  Regulation 
(EC) No 1782/2003 according to the following timetable: 

(a) 

(b) 

(c) 

requirements referred to in point A shall apply from1 January 2009; 

requirements referred to in point B shall apply from 1 January 2010; 

requirements referred to in point C shall apply from 1 January 2011. 

However, for Bulgaria and Romania, the application of Articles 3, 4, 6, 7 and 9 of Regulation 
(EC)  No 1782/2003  shall  be  optional  until  31 December 2011  insofar  as  those  provisions 
relate  to  statutory  management  requirements.  As  from  1 January 2012  a  farmer  receiving 
payments  under  the  single  area  payment  scheme  shall  respect  the  statutory  management 

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requirements  referred  to  in  Annex III  of  Regulation  (EC)  No 1782/2003  according  to  the 
following timetable: 

(a) 

(b) 

(c) 

requirements referred to in point A shall apply from 1 January 2012; 

requirements referred to in point B shall apply from 1 January 2013; 

requirements referred to in point C shall apply from 1 January 2014.” 

Article 3 

This Regulation shall enter into force on the seventh day following that of its publication in 
the Official Journal of the European Union. 

It  shall  apply  as  from  1  January  2008.  However,  Article 1(4)  shall  apply  as  from 
1 January 2007. 

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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In  table  2  of  Annex  XII  to  Regulation  (EC)  No 1782/2003  the  two  following  columns  are 
added: 

ANNEX 

" 

2009 

0 

1 795 543 

0 

3 456 448 

4 608 945 

10 724 282 

5 547 000 

156 332 

4 323 820 

1 038 575 

31 650 945 

2010 

0 

1 572 955 

0 

3 438 488 

4 608 945 

10 670 282 

5 115 000 

149 600 

4 312 300 

1 035 875 

30 903 405 

" 

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