Evaluation of Article 68 measures : final report.
Date: 2016-01-18
Institutions: Directorate-General for Agriculture and Rural Development
Subjects: agrarian reform, agri-environmental plan, common agricultural policy, report, rural development, rural region, statistical method, sustainable agriculture

Evaluation of Article 68 
measures 

Final report 

Written by Agrosynergie EEIG 
November – 2015 

AGRICULTURE 
AND RURAL 
DEVELOPMENT 

Agrosynergie Groupement Européen d’Intérêt Economique EUROPEAN COMMISSION 

Directorate-General for Agriculture and Rural Development 
Directorate E — Economic analysis, perspectives and evaluation; communication 
Unit E.4. — Evaluation and studies 

E-mail:  agri-evaluation@ec.europa.eu 

European Commission 
B-1049 Brussels 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
EUROPEAN COMMISSION 

Evaluation of Article 68 
measures 

Final Report 

2015 

EN 

Directorate-General for Agriculture and Rural Development 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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Luxembourg: Publications Office of the European Union, 2015 

ISBN 978-92-79-44596-5 
doi: 10.2762/01565 

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This evaluation has been produced by the European Economic Interest Group: 

EEIG Agrosynergie includes the following two partners: 

ORÉADE-BRÈCHE Sarl  and 
64 chemin del prat - 31320 Auzeville FRANCE   
Tel.: + 33 5 61 73 62 62  
Fax: + 33 5 61 73 62 90 
e-mail: t.clement@oreade-breche.fr  
Represented by Thierry CLEMENT 

COGEA S.r.l. 
Via Po 102 - 00198 Roma ITALY 
Tel.: + 39 6 853 73 518 
Fax: + 39 6 855 78 65 
e-mail: fantilici@cogea.it 
Represented by Francesca ANTILICI 

This  evaluation  was  directed  by  Lise  Duval,  with  the  assistance  of  Laurence  Menet  (Oréade-
Brèche),  Alice  Devot  (Oréade-Brèche),  Marie  Lebourges  (Oréade-Brèche),  Francesca  Antilici 
(COGEA), Maria Queiroz (COGEA), Ezio Scotti (COGEA) and contributions of the national experts 
listed below: 

Morten Kvistgaard 
Leonidas Nikolaous 
Wieslaw Lopaciuk  
Péter Toth 
Jordi Rosell and Lourdes Viladomiu  
Pedro Serrano   

Denmark 
Greece 
Poland 
Hungary 
Spain 
Portugal 

Agrosynergie Groupement Européen d’Intérêt Economique  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Evaluation of Article 68 measures 

ABSTRACT 

This  evaluation  assesses  the  possibility  of  granting  optional  support  for  specific 
needs, under the Article 68 of the Health Check Regulation, within a limit of 10% of 
direct payments. It draws on standard statistical approaches as well as on the analysis 
of  the  measures’  notifications  to  the  EC  and  on  information  collected  during  ten 
National Studies. 

The  scheme  was  implemented  between  2009  and  2014  by  26  Member  States. 
However, few Member States implemented it in a significant way. Measures most 
frequently  implemented  aimed  at  supporting  competitiveness  or  enhancing  the 
environment. Extensive livestock sectors were the most supported. 

Economic analyses showed that Article 68 helped reduce disadvantages in terms of 
viability in sheep and goat, cotton, durum wheat and tobacco sectors but had a very 
limited  effect  on  competitiveness  and  sustainability  of  primary  production  and 
industries. It sometimes generated competition distortion. 

Concerning environment, varied measures were designed and results were uneven. 
The most significantly implemented type of measures was arable crops rotation and 
diversification, with some positive impacts. 

National control arrangements were effective but monitoring and evaluation systems 
were weak. Relevance issues arose from competitiveness measures. Optionality was 
relevant but Pillar II would have been more adapted for several measures. 

_____________________ 

RÉSUMÉ 

Cette  évaluation  concerne  la  possibilité  d’accorder  des  soutiens  optionnels  pour 
répondre  à  des  besoins  spécifiques,  octroyée  dans  le  cadre  de  l’Article  68  de  la 
réglementation du Bilan de Santé de la PAC, dans la limite de 10% des paiements 
directs.  Des  approches  statistiques  standard  sont  utilisées  ainsi  que  l’analyse  des 
notifications des mesures à la CE et les informations collectées lors de dix Etudes 
Nationales.  

Le dispositif fut mis en œuvre entre 2009 et 2014 par 26 Etats Membres. Cependant, 
peu d’entre l’ont utilisé significativement. Les mesures les plus fréquemment mises 
en œuvre consistaient à soutenir la compétitivité ou protéger l’environnement. Les 
systèmes d’élevage herbagers ont été les plus soutenus.  

Les analyses économiques montrent que l’Article 68 a permis de réduire les écarts 
en termes de viabilité des exploitations dans les secteurs ovin, coton, blé dur et tabac, 
mais  a  eu  un  effet  très  limité  sur  la  compétitivité  et  le  maintien  des  productions 
primaires et industrielles. Certains effets de distorsion de concurrence ont pu être 
identifiés. 

Concernant  l’environnement,  des  mesures  variées  ont  été  conçues  et  les  résultats 
inégaux.  Les  mesures  les  plus  significatives  ont  soutenu  la  diversification  et  la 
rotation de l’assolement et ont eu des impacts positifs. 

Les dispositions nationales de contrôle ont été efficaces mais les dispositifs de suivi-
évaluation inopérants. 

Des  problèmes  de  pertinence  se  posent  pour  les  soutiens  à  la  compétitivité. 
L’optionalité était pertinente mais le 2nd Pilier aurait été plus adapté pour plusieurs 
mesures. 

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Evaluation of Article 68 measures 

TABLE OF CONTENTS 

TABLE OF CONTENTS .................................................................................................................... II 

LIST OF ABBREVIATIONS .......................................................................................................... VII 

EXECUTIVE SUMMARY ................................................................................................................ IX 

1 

INTRODUCTION ......................................................................................................................... 1 

1.1  CONTEXT OF THE EVALUATION ....................................................................................... 1 

1.2  OBJECTIVE OF THE EVALUATION .................................................................................... 1 

1.3  GENERAL APPROACH TO THE EVALUATION ................................................................ 2 
1.3.1  Period examined and geographical coverage ......................................................................................... 2 
1.3.2  Overall approach ................................................................................................................................... 2 
 ................................................................................................................................................ 3 
1.3.3  Limits 

2  REGULATORY FRAMEWORK AND THEORETICAL ANALYSIS ................................... 4 

2.1  REGULATORY FRAMEWORK ............................................................................................. 4 
2.1.1  The 2003 reform and the introduction of the Single Payment Scheme ................................................. 4 
2.1.2  Specific Support under Article 68 ......................................................................................................... 6 
2.1.3  Articulation with the RDR and Agro-Environmental Measures ............................................................ 9 
2.1.4  Cross-compliance ................................................................................................................................ 10 

2.2  THEORETICAL ANALYSIS ................................................................................................. 11 
2.2.1  The rationale of Article 68................................................................................................................... 11 
2.2.2  Intervention logic ................................................................................................................................ 12 

3 

IMPLEMENTATION OF ARTICLE 68 ................................................................................... 16 

3.1  INVENTORY OF THE MEASURES SET UP BY MEMBER STATES .............................. 16 

3.2  BUDGETARY EXPENDITURE ............................................................................................ 19 
3.2.1  Distribution by Member State and by type of measure ....................................................................... 19 
3.2.2  Distribution by sector .......................................................................................................................... 20 

3.3  OVERVIEW OF IMPLEMENTATION IN TEN MEMBER STATES ................................. 22 
3.3.1  Implementation of Article 68 in France ............................................................................................... 22 
3.3.2  Implementation of Article 68 in Italy .................................................................................................. 23 
3.3.3  Implementation of Article 68 in Spain ................................................................................................ 24 
3.3.4  Implementation of Article 68 in Hungary............................................................................................ 26 
3.3.5  Implementation of Article 68 in Greece .............................................................................................. 26 
3.3.6  Implementation of Article 68 in Poland .............................................................................................. 27 
3.3.7  Implementation of Article 68 in Finland ............................................................................................. 28 
3.3.8  Implementation of Article 68 in Portugal ............................................................................................ 29 
3.3.9  Implementation of Article 68 in Denmark ........................................................................................... 30 
3.3.10 Implementation of Article 68 in the Netherlands ................................................................................ 31 

4  THEME  1  -  OBJECTIVE  SETTING:  EVIDENCE  OF  THE  TARGETING  OF 

SPECIFIC SUPPORT AND COHERENCE WITH OTHER POLICIES ............................. 33 

4.1  COMPREHENSION OF THE QUESTION ........................................................................... 33 

4.2  METHODOLOGY AND LIMITATIONS .............................................................................. 34 
4.2.1  Relevance and design of the measures ................................................................................................ 34 

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Evaluation of Article 68 measures 

4.2.2  Supplementary role and coherence with other support schemes ......................................................... 35 

4.3  ANSWER TO EQ1 ................................................................................................................. 35 
4.3.1  Relevance of the choice of the sectors supported ................................................................................ 35 
4.3.2  Relevance of measures in each Member State ..................................................................................... 36 
4.3.3  Relevance in the other Member States that implemented Article 68 ................................................... 44 
4.3.4  Supplementary role and coherence ...................................................................................................... 44 

4.4  EVALUATION JUDGEMENT ON EQ 1 .............................................................................. 47 

5  THEME  2  –  SUPPORT  FOR  SECTORS  AND  PRODUCTIONS  TO  CURB 

DISADVANTAGES: DEVELOPMENT OF THE SECTORS SUPPORTED ....................... 51 

5.1  COMPREHENSION OF THE QUESTION ........................................................................... 51 

5.2  METHODOLOGY AND LIMITATIONS .............................................................................. 52 

5.3  ANSWER TO EQ2 ................................................................................................................. 54 
5.3.1  Role played by the implementation of Article 68 measures under the objectives (1)(a)(ii) and 

(1)(b) on the viability of primary production ....................................................................................... 54 
5.3.2  Results of the analysis ......................................................................................................................... 56 
5.3.3  Role played by the implementation of the Article 68 measure under objective (1)(a)(ii) on the 

improvement of the technical quality of products ............................................................................... 61 

5.3.4  Role played by the implementation of Article 68 measure under the objective (1)(a)(ii) on the 

improvement of the quality of products linked to the territory and/or to production methods ............ 66 

5.3.5  Role played by the implementation of the Article 68 measure under objective (1)(a)(ii) quality 

on prices 68 

5.3.6  Role  played  by  the  implementation  of  Article  68  measure  under  objectives  (1)(b)  specific 

disadvantages and (1)(a)(ii) quality on the sustainability of primary production ................................ 72 

5.3.7  Role played by the implementation of Article 68 measures under objectives (1)(a)(ii) and (1)(b) 

on the sustainability of processing industries ...................................................................................... 79 

5.4  EVALUATION JUDGEMENT ON EQ2 ............................................................................... 83 

6  THEME  3  –  SUPPORT  FOR  SECTORS  AND  PRODUCTIONS  TO  CURB 
DISADVANTAGES:  IMPACTS  BEYOND  THE  SUPPORTED  SECTORS  AND 
REGIONS 87 

6.1  COMPREHENSION OF THE QUESTION ........................................................................... 87 

6.2  METHODOLOGY AND LIMITATIONS .............................................................................. 88 

6.3  ANSWER TO EQ3 ................................................................................................................. 89 
6.3.1  Analysis  of  the  existence  of  a  gap  in  competitiveness  between  sectors  receiving  Specific 
Support and those that did not: gauging the extent to which Specific Support helped to reduce 
this gap  89 

6.3.2  Role played by measures under objectives (1) (a) (ii) quality and (1) (b) specific disadvantages 

on the country-systems value production share ................................................................................... 94 

6.3.3  Role played by measures under objectives (1) (a) (ii) quality and (1) (b) specific disadvantages 

on the competitive positioning of the country-systems ....................................................................... 96 

6.4  EVALUATION JUDGEMENT ON EQ3 ............................................................................. 100 

7  THEME 4 – ENVIRONMENTAL AND OTHER IMPACTS ............................................... 104 

7.1  COMPREHENSION OF THE QUESTION ......................................................................... 104 

7.2  METHODOLOGY AND LIMITATIONS ............................................................................ 106 

7.3  ANSWER  ON  THE  ENVIRONMENTAL 

IMPACT  OF  THE  MEASURES 

IMPLEMENTED UNDER OBJECTIVES (1)(A)(I) – (1)(A)(V) ........................................ 108 
7.3.1  Distinction between measures implemented under the environmental objectives of Article 68 ........ 108 
7.3.2  Effects of the main type of measures on the environment ................................................................. 111 

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Evaluation of Article 68 measures 

7.4  ANSWER ON THE ENVIRONMENTAL IMPACTS OF THE OTHER OBJECTIVES ... 125 
7.4.1  Bovines: Support for Milk and Meat Production ............................................................................... 125 
7.4.2  Sheep and goats: Support for Milk and Meat Production .................................................................. 129 

7.5  ANSWER ON THE EFFECT ON ANIMAL WELFARE .................................................... 132 

7.6  ANSWER ON TERRITORIAL EFFECTS ........................................................................... 133 
7.6.1  Expected direct and indirect effects of the Specific Support on territorial development ................... 133 
7.6.2  Identification of supported sectors with potential territorial effects .................................................. 134 
7.6.3  Contribution to the local agricultural economy ................................................................................. 135 
7.6.4  Effects on employment in supported holdings................................................................................... 136 
7.6.5  Experts’ opinion on the potential territorial impact generated by Article 68 measures ..................... 137 

7.7  EVALUATION JUDGEMENT ............................................................................................ 138 
7.7.1  Evaluation judgement on environmental effects................................................................................ 138 
7.7.2  Evaluation judgement on animal welfare effects ............................................................................... 140 
7.7.3  Evaluation judgement on territorial effects ....................................................................................... 140 

8  THEME 5 – MANAGEMENT AND ADMINISTRATION .................................................. 142 

8.1  COMPREHENSION OF THE QUESTION ......................................................................... 142 

8.2  METHODOLOGY AND LIMITATIONS ............................................................................ 142 

8.3  ANSWER TO EQ5 ............................................................................................................... 143 
8.3.1  Efficiency of the national administrative arrangements .................................................................... 143 
8.3.2  Effectiveness and efficiency of the national control arrangements.................................................... 145 
8.3.3  Effectiveness and efficiency of the monitoring system ..................................................................... 148 
8.3.4  Exclusion of the risk of double financing .......................................................................................... 150 

8.4  EVALUATION JUDGMENT ON EQ5................................................................................ 150 

9  THEME 6 – RELEVANCE AND EFFICIENCY OF ARTICLE 68 AS AN OPTIONAL 

INSTRUMENT IN THE CAP .................................................................................................. 152 

9.1  COMPREHENSION OF THE QUESTION ......................................................................... 152 

9.2  METHOD, CRITERIA, INDICATORS AND DATA SOURCES ....................................... 152 

9.3  ANSWER TO EQ6 ............................................................................................................... 153 
9.3.1  Relevance of rebalancing direct support to curb specific needs ........................................................ 153 
9.3.2  Relevance of Article 68 as an optional instrument in the CAP.......................................................... 156 
9.3.3  Efficiency of Article 68 as an optional instrument in the CAP.......................................................... 157 

9.4  EVALUATION JUDGEMENT ON EQ 6 ............................................................................ 160 

10  CONCLUSIONS AND LESSONS LEARNED ....................................................................... 162 

10.1 

GENERAL CONCLUSIONS ....................................................................................... 162 
10.1.1 Effectiveness and impacts of Article 68 measures ............................................................................ 162 
10.1.2 Efficiency of Article 68 measures ..................................................................................................... 169 
10.1.3 Relevance and coherence of Article 68 ............................................................................................. 170 

10.2 

LESSONS LEARNED .................................................................................................. 174 

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Evaluation of Article 68 measures 

List of Tables 

Table 1: Abbreviations of EU 27 Member States....................................................................................................................................... viii 
Table 2: Overview of CAP Health Check changes considering direct payments ........................................................................................6 
Table 3: Overview of CAP Health Check changes considering Specific Support .......................................................................................7 
Table 4: Specific Support granted under Article 68, forms of support and requirements ...........................................................................8 
Table 5: Distribution of Article 68 expenditure by Member State for the period 2010-2012 (€) ............................................................ 19 
Table 6: Process for the choice of sectors supported in each visited Member State ................................................................................. 35 
Table 7: Relevance of Article 68 measures - France ................................................................................................................................... 36 
Table 8: Relevance of Article 68 measures – Italy ...................................................................................................................................... 38 
Table 9: Relevance of Article 68 measures – Spain .................................................................................................................................... 39 
Table 10: Relevance of Article 68 measures – Hungary ............................................................................................................................. 39 
Table 11: Relevance of Article 68 measures – Greece ............................................................................................................................... 40 
Table 12: Relevance of Article 68 measures – Poland ................................................................................................................................ 41 
Table 13: Relevance of Article 68 measures – Finland ............................................................................................................................... 42 
Table 14: Relevance of Article 68 measures – Portugal ............................................................................................................................. 42 
Table 15: Relevance of Article 68 measures - Denmark ............................................................................................................................ 43 
Table 16: Percentage of producers with ROI >0, recipients and non-recipients of Article 68: average values (2010-2011-2012) in the 
groupof Member States that have implemented the measures under the objectives (1)(a)(ii) and (1)(b)  in various sectors (%) and in 
the group of Members states that have not implemented the measures (%) .............................................................................................. 59 
Table 17: Quality elements of the raw tobacco in leaves ............................................................................................................................ 66 
Table 18: Beef meat - AAGR% of cattle prices by category, AAGR% of the ratio IT-PT - ES/Average EU ....................................... 69 
Table 19: Lambs - AAGR% of lambs prices, AAGR% of the ratio IT-PT-ES/Average EU .................................................................. 70 
Table 20: Milk-Italy: AAGR% of milk delivered to dairies  and AAGR of the ratio IT/EU ................................................................... 70 
Table 21: Tobacco: AAGR% of prices by group ........................................................................................................................................ 71 
Table 22: Durum wheat - AAGR% prices and AAGR% of the ratio IT-PT-FR-EL/Average EU ......................................................... 72 
Table 23: Olive Oil extra: AAGR% of prices and AAGR% of the ratio IT-PT-ES/Average EU ........................................................... 72 
Table 24: Beef meat - AAGR % in Member States implementing Article 68 by groups of Member States with different implementation 
choices in the previous periods ..................................................................................................................................................................... 74 
Table  25:  Sheep  meat  -  AAGR  %  in  Member  States  implementing  Article  68  by  groups  of  Member  States  with  different 
implementation choices in the previous periods .......................................................................................................................................... 75 
Table 26: AAGR % of cow milk production in Member States implementing Article 68 by groups of Member States with different 
implementation choices in the previous periods .......................................................................................................................................... 76 
Table 27: Tobacco: AAGR % in Member States implementing Article 68 and in others EU 25 Member States (production and UAA)
 ......................................................................................................................................................................................................................... 77 
Table 28: Durum wheat: AAGR % in Member States implementing Article 68, in Italy and in others EU-25 Member States (production 
and UAA) ....................................................................................................................................................................................................... 78 
Table 29: Sugar beets - AAGR % surfaces and production in Member States implementing Article 68 and in the other Member States
 ......................................................................................................................................................................................................................... 78 
Table 30: Olive oil -  Evolution of production and AAGR% before and after Article 68 implementation ............................................ 79 
Table 31: Cotton - AAGR % in Spain and in the others Member States ................................................................................................... 79 
Table 32: Cotton - Number of cotton factoriesin Greece and Spain .......................................................................................................... 80 
Table 33: Cotton - Rate of use of the processing capacity in Greece and Spain ....................................................................................... 81 
Table 34: Livestock sectors: Average Gross Margin/Livestock Units, in the simulated situation (without SS) and real situation (with 
SS), by sector (Euros); Ratio of GM/LU of recipients to GM/LU of non-recipients (*) .......................................................................... 90 
Table 35: Crop sectors: Average Gross Margin/Ha, in the simulated situation (without SS) and real situation (with SS), by sector 
(Euros); Ratio of GM/Ha of recipients to GM/Ha of non-recipients (*) ................................................................................................... 90 
Table 36: Gains in competitiveness of recipients compared with non-recipients in different sectors following the implementation of 
SS .................................................................................................................................................................................................................... 93 
Table 37: Total output by categories of Article 68 environmental measures in MS studied (2010-2013) (ha) .................................... 109 
Table 38: Main expected environmental benefits of the most supported practices under objectives (1)(a)(i) and (1)(a)(v) ............... 112 
Table 39: Supported surface for the support for extensive and organic farming in Denmark (ha) ........................................................ 118 
Table 40: Synthesis of the criteria for estmating the effects on the environement .................................................................................. 121 
Table 41: Synthesis of the analysis of the environmental impact of the measures set up under Objectives (1)(a)(i) and (1)(a)(v) of 
Article 68 ...................................................................................................................................................................................................... 123 
Table 42 : Overview of the measures implemented in the bovine sectors in the Member States .......................................................... 128 
Table 43: Dutch measures for animal welfare ........................................................................................................................................... 132 
Table 44: Share of supported sectors in the total agricultural production value in the regions observed .............................................. 135 

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Evaluation of Article 68 measures 

Table 45: Employment in supported holdings compared to the regional trend (2010-2012) ................................................................. 136 
Table 46: Main findings regarding the impact of the measures set up under objectives (1)(a)(i) and (1)(a)(v) ................................... 138 
Table 47: Degree of simplicity of administrative arrangements and improvements proposed .............................................................. 144 
Table 48: Burden noticed for on-the-spot checks of Article 68 measures in Member States studied ................................................... 147 
Table 49: Monitoring systems set up in Member States studied .............................................................................................................. 149 
Table 50: Financial provisions chosen by Member States under National Study ................................................................................... 154 
Table 51: Summary of the targeting relevance for the ten MS subject to National Study ..................................................................... 155 
Table 52 : Summary of the results of the Specific Support on farm viability ......................................................................................... 158 

List of Figures 

Figure 1: Overview of Article 68 implementation per objectives and per sector ...................................................................................... 18 
Figure 2: Distribution of expenditure by Article 68 objective in each Member State (2010-2012) ........................................................ 20 
Figure 3: Distribution of Article 68 expenditure by sector in the 10 national study Member States ....................................................... 21 
Figure 4: Distribution of Article 68 expenditure by sector and region in France (2010-2012) ................................................................ 23 
Figure 5: Distribution of Article 68 expenditure by sector and region in Italy (2010-2013)*.................................................................. 24 
Figure 6: Distribution of Article 68 expenditure by sector and region in Spain (2010-2013*) ................................................................ 25 
Figure 7: Distribution of Article 68 expenditure by sector and region in Hungary (2010-2013)............................................................. 26 
Figure 8: Distribution of Article 68 expenditure by sector and region in Greece (2010-2013) ............................................................... 27 
Figure 9: Distribution of Article 68 expenditure by sector and region in Poland (2010-2014)* ............................................................. 28 
Figure 10 Distribution of Article 68 expenditure by sector in Finland (annual averages, 2010-2013) ................................................... 29 
Figure 11: Distribution of Article 68 expenditure by sector and region in Portugal (2010-2013) ........................................................... 30 
Figure 12 Distribution of Article 68 expenditure by measure in Denmark (annual means, 2010-2013) ................................................ 31 
Figure 13 Distribution of Article 68 expenditure by measure in the Netherlands (annual average, 2010-2013) ................................... 32 
Figure 14: ROI values of Art. 68 recipients and non-recipients: Average values (2010-2011-2012) in the group of Member States that 
have implemented Measures under the objectives (1)(a)(ii) and (1)(b) in various sectors and in the group of Members states that have 
not implemented the measures (%) .............................................................................................................................................................. 57 
Figure 15: Percentage of producers with ROI >0 in Member States that have implemented the measures under objectives (1)(a)(ii) and 
(1)(b) in various sectors: non-recipients; recipients; recipients in the simulated situation. ...................................................................... 60 
Figure 16: Beef meat - carcass weight evolution by animal category (2000-2013, kg) ........................................................................... 62 
Figure 17: Sheep - carcass weight evolution by animal category (2000-2013, kg) .................................................................................. 63 
Figure 18: Cow milk: Protein content evalution (2000-2013, %) .............................................................................................................. 64 
Figure 19: Beef meat: price evolution 2000-2014 (eur/100 kg) in Spain, Italy and Portugal and Ratio Member state/EU (%) ........... 68 
Figure 20:  Tobacco - Evolution of production in the main producer Member States (Ton) ................................................................... 76 
Figure 21: Change in global competitiveness of sectors in farms benefiting from Article 68 measures compared with non-recipient 
farms of the same Member State and farms of Member States that have not applied the measures ....................................................... 91 
Figure 22: Recipients of Article 68 measures: global % SS/GM out of all Member States that have implemented the measures in the 
various sectors ................................................................................................................................................................................................ 94 
Figure 23: Competitive positioning of the country-systems in the cow meat and heifers meat sectors .................................................. 98 
Figure 24: Competitive positioning of the country-systems in the young bull meat and sheep meat sectors ......................................... 98 
Figure 25: Competitive positioning of the country-systems in the dairy and olive oil sectors ................................................................. 99 
Figure 26: Competitive positioning of the country-systems in the tobacco sector.................................................................................. 100 
Figure 27: Steps in the analysis of Article 68 environmental measure impacts ...................................................................................... 106 
Figure 28: Distribution of the expenditure in (average/y) in studied Member States ............................................................................. 109 
Figure 29: Surfaces of Finnish Protein, Oilseeds and Cereals crops, 2006-2014, and Article 68 supported areas (ha) ....................... 114 
Figure 30: Surfaces of Polish Protein (as main crops), 2003-2013, and Article 68 supported areas (ha) ............................................. 115 
Figure 31: In Italy (2000-2014),  a) Development of durum wheat areas (ha); b) Development of protein and oilseeds areas (ha) .. 115 
Figure 32: Surface of total certified organic production in France, 2003-2012 (ha) ............................................................................... 119 
Figure 33 : Distribution of expenditure per Article 68 objective (2010-2012) ........................................................................................ 158 

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Evaluation of Article 68 measures 

LIST OF ABBREVIATIONS 

AAGR  
AEM 
ARMA 
ARDA 
ASP 
AWU  
BDN  
BSE  
CAP 
CATS 
CCAA 
CMO 
CNDP 
CRR  
DAA 
DAOK 
DAFA 
DDT 
DRAP 
EAFRD 
EBIT  
EC 
ECA 
ELY 
EQ 
EU 
FADN 
FEGA 
FLV 
FNVA  
FWU  
GAEC 
GM  
GMO 
IACS  
IFAP 
KGVZ  
LFA 
MAVI 
MFAF  
MS 
NUTS 
NVA 
NVWA 
OPEKEPE 
OTSC  
PDO/PGI 
PO  
RDR 
RDP 
ROI  
ROR  
RVO 
SAPS 
SMR  
SPD  
SPS 
SS 
TA  
TF 
UAA 
VPS 
WP  
WTA 
WTO 

Average Annual Growth Rate 
Agri-Environment Measure 
Agency for Restructuring and Modernisation of Agriculture 
Agricultural and Rural Development Agency (Hungary) 
French Paying agency 
Average work unit 
National bovines identification register (Italy) 
Bovine Spongiform Encephalopathy 

   Common Agricultural Policy 
  Clearance of Accounts Audit Trail System 

Agrarian regional ministries of regional governments (Spain) 

  Common Market Organisation 
  Complementary National Direct Payment 

Capital Rotation Rate 
Directions of Agricultural Development (Greece) 
Directions of Agricultural Economy & Veterinary of Prefectural Authorities (Greece) 
Danish AgriFish Agency 
Territory Departmental Agency (France) 
Regional Directorates for Agriculture and Fisheries 
European Agricultural Fund for Rural Development 
Earnings before interests and taxes 
European Commission 
European Court of Auditors 
Centres for Economic Development, Transport and the Environment (Finland) 
Evaluation Question 
European Union 
Farm Accountancy Data Network 
Spanish Agricultural Guarantee Fund 
Family labour value 
Farm Net Value Added 
Farm Work Unit 

  Good Agricultural and Environmental Conditions 

Gross margin 
Genetically Modified Organism 
Integrated Administrative Control System 
Portuguese national paying agency 
Centres of Genetic Improvement of Animals (Greece) 
Less Favoured Areas 
Finnish agency for rural affairs 
Ministry of Food, Agriculture and Fishery (MFAF) 

  Member State 

Common classification of territorial units for statistics  

  Net Value Added 

Dutch control agency (Nederlandse Voedsel en waren autoriteit) 
National control agency (Greece) 
On the spot checks 
Protected designation of origin / protected geographical indication 
Producers ‘organisation 
Rural Development Regulation 
Rural Development Program 
Return on Investment 
Return on Receipts 
Dutch paying agency 
Single Area Payment Scheme 
Statutory Management Requirements 
Short partial decoupling 
Single Payment Scheme 
Specific Support 
Total Assets 
Type of Farming 

  Utilised Agricultural Area 
Production share in value 
Wages paid 
Water transport allowance 
  World Trade Organisation 

vii 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Evaluation of Article 68 measures 

Table 1: Abbreviations of EU 27 Member States 

AT 
BE 
BG 
CY 
CZ 
DK 
DE 
EE 
IE 
EL 
ES 
FI 
FR 
HR 
HU 
IT 
LV 
LT 
LU 
MT 
NL 
PL 
PT 
RO 
SI 
SK 
SE  
UK 

Austria 
Belgium 
Bulgaria 
Cyprus 
Czech republic 
Denmark 
Germany 
Estonia 
Ireland 
Greece 
Spain 
Finland 
France 
Croatia 
Hungary 
Italy 
Latvia 
Lithuania 
Luxembourg 
Malta 
The Netherlands 
Poland 
Portugal 
Romania 
Slovenia 
Slovakia 
Sweden 
United Kingdom 

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Evaluation of Article 68 measures 

EXECUTIVE SUMMARY 

1.  The Specific Support under Article 68 

In 2003, a substantial reform of the Common Agricultural Policy (CAP) introduced the full decoupling 
of direct aids from production. This could have strong transitional effects. Member States were thus 
allowed to grant optional coupled payments in specific cases. This optionality was maintained after the 
CAP Health Check in 2009 with the introduction of Article 68 of Council Regulation (EC) 73/2009. It 
broadened the range of such Specific Support, with the possibility of granting coupled or decoupled 
payments depending on the objectives assigned. The objectives of the support were the following:  

(a)(i)   for specific types of farming important for the protection or enhancement of the environment; 
(a)(ii)   for improving the quality of agricultural products; 
(a)(iii)  for improving the marketing of agricultural products; 
(a)(iv)  for practising enhanced animal welfare standards; 
(a)(v)   for specific agricultural activities entailing additional agri-environment benefits; 
(b)  

to address specific disadvantages affecting farmers in the dairy, beef and veal, sheepmeat and  
goatmeat and rice sectors in economically vulnerable or environmentally sensitive areas, or, in  
the same sectors, for economically vulnerable types of farming; 
in areas subject to restructuring and/or development programmes in order to ensure against land 
being abandoned and/or to address specific disadvantages for farmers in those areas; 
in the form of contributions to crop, animal and plant insurance premiums; 
by way of mutual funds for animal and plant diseases and environmental incidents. 

(c) 

(d)  
(e) 

The  budget  for  Specific  Support  was  limited  to  10%  of  national  ceilings  for  direct  payments,  and 
payments linked to production to a 3.5% sub-ceiling1 ((a)(i), (a)(ii), (a)(iii), (a)(iv), (b), (e)). 

2.  Objectives and methodology of the evaluation 

The  evaluation  considers  the  conception,  implementation,  control  system,  results  and  impacts, 
coherence  and  optional  character  of  the  Specific  Support.  It  covers  the  period  of  implementation  of 
Article 68 measures (2009-2014) and all concerned European Union (EU) Member States and focuses 
on  10  Member  States  where  National  Studies  were  carried  out:  Denmark,  Finland,  France,  Greece, 
Hungary, Italy, Poland, Portugal, Spain and The Netherlands. 

Quantitative  and  qualitative  empirical  assessments  were  compared  to  theoretical  hypotheses.  To 
distinguish clearly between the effects attributable to Article 68 measures and those driven by other 
factors, observed results were compared with a counterfactual situation without Article 68 measures.  

The  quantitative  empirical  analyses  were  based  on  the  EU  databases  (FADN,  Eurostat,  Agriview, 
CATS) complemented by data from national statistical offices. The qualitative empirical assessment 
was based on the notifications sent by the Member States to the European Commission as well as on the 
information collected during the National Studies. It was used for properly interpreting the quantitative 
results  and  identifying  effects  of  external  factors.  In  addition,  a  literature  review  was  performed 
especially for questions related to environmental effects. 

3. 

Implementation of Article 68 Specific Support 

Twenty-six Member States made use of Article 68 (all but Luxembourg and Malta). For the three first 
implementing  years  (2010-2012),  the  expenditure  of  the  Specific  Support  amounted  to  €3.8  billion. 
France and Italy had the highest expenditure (cumulating half of EU total expenditure for Article 68).  

The most frequently implemented Article 68 measures aimed at supporting the competitiveness of sectors 
((b)  specific  disadvantages,  (a)(ii)  quality)  and  enhancing  the  environment  ((a)(i)  types  of  farming 
important  for  the  environment,  (a)(v)  agri-environment  measures).  Measures  under  objective  (b) 
specific disadvantages were implemented by almost all the 26 Member States except Italy.  

1 This limit was extended to 6.5% of the national ceilings for the year 2014. 

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Evaluation of Article 68 measures 

In  terms  of  expenditure,  the  livestock  sectors  were  the  most  supported  (44%  of  the  2010-2012 
expenditure in ten Member States studied), the expenditure being almost equally distributed between 
the dairy, sheep and goats and beef sectors. Specific Support for crop sectors was significantly granted 
for  arable  crop  diversification  under  environmental  measures  (18%).  Other  specific  crops  (tobacco, 
olive, durum wheat, etc.) were mostly supported under the quality objective (14%). The budget was also 
largely dedicated to cross-sectoral measures (22%), mainly insurance and organic farming. 

4.  Effectiveness and impacts of Article 68 measures 
4.1  Economic viability, competitiveness and sustainability 
Two  types  of  measures  were expected to have  an  effect  on  farms  economic  results:  measures  under 
Article 68 objectives (a)(ii) quality and (b) specific disadvantages. 

Economic viability1: The analysis  concerning  the  global impact of the  policy,  showed that  Specific 
Support  helped  reduce  but  not  to  cancel  out  the  disadvantage  in  Return  on  Investments  (ROI)  of 
recipients relative to non-recipients (sheep and goats, cotton, durum wheat, tobacco). The analysis of 
the impact at the Member State level, showed that Specific Support was not sufficient to cancel negative 
ROI (ROI<0) in the cattle sector in France, Ireland, Poland, Finland, Slovenia, UK-Scotland and in the 
sheep  and  goats  sector  in  France,  Finland  and  Ireland.  Furthermore,  for  cattle,  dairy  and  olive  oil, 
Specific Support recipients were on average already in a situation of relative advantage without Specific 
Support compared to non-recipients. 

The analysis at recipient farms level showed that, in general, the percentage of farms with ROI>0 varied 
according to the sectors. Specific Support implementation allowed a part of producers to move from a 
non-viable situation to a viable situation. This was more significant in the tobacco and cotton sectors, 
while it was less significant in other sectors (sugar beet, dairy, and olive oil). 

Competitiveness: In general, the impact of Specific Support on quality improvement was limited2.  The 
analysis  of  relative  prices  confirms  this  conclusion3.  Only  in  the  tobacco  sector,  the  average  quality 
increased relatively to the period before Specific Support. Between the CMO reform and 2010, the tobacco 
average price increased sharply in line with the improvement of the average quality. This increasing price 
trend  was  interrupted  in  conjunction  with  the  implementation  of  Article  68,  despite  a  further 
improvement of tobacco average quality. This suggests that, knowing the existence of an aid linked to 
production, buyers bargained with producers a lower purchase price. Therefore, through this lower price, 
producers actually lost part of the support, which was transferred (captured) to buyers. 

Sustainability of primary production: The impact on production was rather uneven. Specific Support 
stimulated  a  production  increase  in  the  cotton  sector  (together  with  favourable  market  conditions  – 
increase in world prices) and contributed significantly to slow down the decreasing trend in the sheep 
meat sector. In the other sectors, the effects were limited (beef) or null (dairy, durum wheat4, sugar beet 
and olive oil).  

Sustainability of processing industries: The analysis concerned only the sectors for which the supply 
of  raw  materials  produced  locally  is  a  determinant  element  of  survival5.  Concerning  the  stability  of 
supply flows of raw materials, Article 68 was not sufficient to ensure the sustainability of the processing 
industries  (except  for  cotton;  tobacco  represented  a  special  case6).  Concerning  the  impact  on  the 
industrial structure, the structural dynamics (strong decrease of the number of factories) are related to 
the  2003  CAP  reform  or  other  drivers  and  were  not  affected  by  the  implementation  of  Article  68. 
However, the decrease of primary production in the sugar and tobacco sectors might have deteriorated 
the industry competitiveness (i.e. increase in fixed costs). Conversely, in the cotton industry in Spain, 

1 Ability of a sector (product) to ensure the family work remuneration to the level of opportunity cost, as well as a remuneration of the invested 
capital. In absolute terms, for a sector to be viable, the ROI must be greater than zero. 
2 The analysis was carried out for beef and sheep meat, cow milk, sugar beet, tobacco and olive oil sectors (with different parameters according 
to the product) only for Member States that have implemented the measure. 
3 The assumption was that there is a direct relationship between quality improvement and an increase of price. Durum wheat sector was also 
analysed. The lack of reliable data on sugar beet prices did not allow the analysis for this sector. 
4 However, in Italy the implementation of the ‘environmental’ measure stimulated a new interest of producers: the measure contributed to areas 
stabilisation and, indirectly, also to production stabilisation. 
5 i.e. slaughtering industry, dairy, industry of first processing of raw tobacco, cotton ginning industry, and sugar industry. 
6 In the case of tobacco the decrease of quantities seems to have met the first processing industries’ requests, as these are no longer obliged to 
handle (as before) a product of low quality not demanded by manufactures. 

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Evaluation of Article 68 measures 

the growth of supply flows occurred in a context of price increase on the world market and of deep 
restructuring of the sector, with growth in the utilisation rate of the factories capacity at levels higher 
than those observed before the implementation of the 2003 CAP. 

4.2  Competitiveness compared to sectors and Member States that were not supported  
Competitiveness of the agricultural component of the supply chain: The analysis was carried out by 
analysing the gross margin, which all other things being equal, is a proxy of the level of competitiveness 
achieved by farms, in terms of: i) increased efficiency (cost competitiveness) and ii) a better market 
performance (higher sales prices due to improved quality). 

Within each Member State, there were situations where Specific Support:  
a-  may have  generated or increased a distortion of competition among recipients and non-recipients 

(cattle, dairy, sugar beet); 

b-  others in which Specific Support was not sufficient to close the negative gap among recipients and 

non-recipients (olive oil); and,  

c-  finally, others where Article 68 managed to cover the existing negative gap and (in some cases) went 
even further generating a limited distortion of competition (sheep and goat, tobacco, durum wheat 
and cotton). 

The significance of Specific Support on the gross margin of recipient farms varied according to sectors: 
the highest in the sectors of tobacco (over 27% of gross margin) and cotton (12.5%), the lowest in the 
dairy sector (3.3%). At the Member State level, the evidence showed a more complex situation, with 
some  Member  States  where  the  incidence  of  Specific  Support  on  gross  margin  was  sharply  higher1 
relative to the aggregated average or lower2. 

Competitiveness of the processing industry: In general, there are no strong correlations between the 
changes (positive or negative) in the average production share in value (VPS) of each country-system3 
and the implementation of Article 68. Moreover, the changes in the competitive positioning were mainly 
caused  by  changes  in  relative  prices,  while  changes  in  production  shares  in  quantity  played  a  more 
limited  role.  It  should  be  noted  that  in  the  country-systems  having  lost  VPS,  the  implementation  of 
Article 68 proved to be insufficient to avoid this drop. Moreover, the measures did not artificially and 
significantly change the competitive positioning of the different country-systems existing in the previous 
period. 

4.3  Territorial development 
While the Member States had intended the measures to have territorial effects, the evaluative analysis 
did not show any significant effects on territorial development at the regional level. In ten regions of six 
EU Member States4, Article 68 could have a territorial impact (both the share of supported sectors and 
effects on farm viability were significant). In these regions, Specific Support enabled the maintenance 
of  the  production  value  of  sectors,  but  these  latter  had  a  very  low  level  of  contribution  to  regional 
agricultural value. Moreover, in supported farm holdings, the employment trend was most often similar 
to regional trends and seemed to be mainly sensitive to regional and sectoral contexts. However, the 
measures sometimes targeted very specific sectors, located in specialised areas, where they might have 
significant effects that could not be identified at the regional level (tobacco in Spain, Italy and Poland; 
sheep and goats in France; dairy in Hungary; durum wheat and suckler cows in Greece, etc.). 

4.4  Environment 
Article  68  had  two  explicit  environmental  objectives  ((a)(i)  types  of  farming  important  for  the 
environment and (a)(v)  agri-environment measures) but measures set up under other objectives may 
also have had side-effects on the environment. 

  Measures with environmental objectives 

(A)(v) agri-environment measures had to be set up respecting the approach of the CAP Pillar II Agro-
Environment Measures and to be approved by the European Commission. Member States had much 

1 Greece and Finland in cattle; Hungary, Bulgaria and Slovenia in dairy; Bulgaria and Finland in sheep and goat; tobacco in Spain. 
2 Belgium, Poland and Denmark in cattle; Austria, Poland and Italy in dairy; the Netherlands, Portugal and Italy in sheep and goat. 
3 i.e. the whole processing industry of a sector of each Member State. 
4 EL-Thessalia, ES-Extremadura, FR-Midi-Pyrénées, FR-Rhône-Alpes, FR-Provence Alpes Côte d’Azur, HU-Közép-Dunántúl, HU-Észak-
Alföld, IT-Piemonte, PL-Małopolskie, PL-Lubelskie 

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Evaluation of Article 68 measures 

fewer constraints for measures (a)(i) types of farming important for the environment; however they were 
subject  to  the  3.5%  sub-ceiling.  As  a  result,  (a)(v)  agri-environment  measures  had  the  potential  to 
generate better results (specific needs were targeted, the measures were better designed, their effects 
were sometimes concentrated on areas with environmental interests).  

A large and varied set of measures were designed by the Member States, but three major types can be 
identified  in  terms  of  budget,  number  of  hectares  and  farms  supported:  arable  crops  rotation  and 
diversification (at least 2 130 000 ha supported in 20131), extensive/organic farming (274 000 ha in 
20132), extensive pasturing (12 350 ha in 2013). Within each category, the level of potential impact is 
directly dependent on the level of uptake and the features of the measure. For each measure, results were 
uneven. Furthermore, the lack of monitoring data hindered the impact analysis. 

Arable crops rotation and diversification measures: some measures consisted in per hectare payment 
(for protein/oilseed crops) with no conditions related to crop rotation/diversification (e.g. French support 
for  protein  crops);  other  measures  (Italy  and  Spain)  were  targeted  on  specific  regions  and  included 
conditions on crop rotation. The measures contributed to the development of protein and oilseed crop 
areas  in  Spain  and  Poland,  and  to  their  maintenance in  Italy.  The  Spanish  and  Italian  measures  had 
potential positive impacts at the farm and regional levels, whereas this is true only at the farm level for 
the Polish and French (protein crops support) measures. On the other hand, the other French measure 
‘diversification of crop rotation’ and the Finnish and Danish measures had no noticeable effects on the 
environment.   

Extensive and organic farming: French measures (organic farming), one of the two Danish measures 
(extensive  farming)  and  the  Portuguese  measure  (protection  of  national  olive-growing  heritage)  had 
positive environmental effects at the farm level. They had potential effects on larger scales, but these 
depended on the geographical location of the beneficiaries.  

Extensive pasturing: the Portuguese and Danish measures have helped maintain extensive pasturing, 
which had a positive impact at least at the farm level. 

  Indirect impact of the measures set up under other objectives 

Based on the analysis of the main supported sectors (cattle and sheep and goats), it can be concluded 
that the measures set up under ‘non-environmental objectives’ either had no effect or maintained a type 
of production with very low positive impacts on the environment. 

4.5  Animal welfare 
The  Netherlands  is  the  only  Member  State  that  designed  measures  under  objective  (a)(iv)  animal 
welfare. Some positive changes, in relation with the measures, have been noted by the stakeholders; 
however, the absence of monitoring makes it difficult to judge the level of contribution of Article 68. 
Environmental measures also had an indirect positive impact on the maintenance of livestock-rearing 
conditions in the Netherlands, Portugal, Denmark and France (extensive pasturing and organic farming). 

5.  Efficiency of Article 68 measures 

Specific administrative procedures had to be set up in addition to the Single Payment Scheme and this 
generated  a  specific  additional  workload  for  all  parties  involved.  This  especially  concerned 
environmental and quality measures because they tended to include more stringent requirements than 
the other types of measures. However, managing authorities made efforts to simplify eligibility criteria 
and conditions, so that procedures would not be too complex. Moreover, given that the majority of the 
measures existed in the past, the parties were already familiar with these procedures. 

The national control arrangements were effective in controlling the Specific Support and ensuring the 
verification of the eligibility criteria. As regards the efficiency of on-the-spot checks, the verification of 
eligibility criteria was reported as burdensome in four Member States out of the nine studied. 

As stated by the European Court of Auditors in its report on Specific Support, the evaluation confirms 
that indicators used to monitor the effects of Article 68 measures were weak or inadequate. Indeed, the 

1 The number of hectares supported does not take into account data of France and the Netherlands, unavailable for 2013. 
2 The real figure is probably much higher given that the area supported in France is not included (data not available). 

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Evaluation of Article 68 measures 

major  elements  available  consisted  of  the  number  of  beneficiaries  /  hectares  /  animals  supported, 
whereas no information was collected to assess the extent to which the objective was achieved.  

Member  States  were  responsible  for  identifying  measures  potentially  overlapping  with  other  CAP 
instruments  and  setting  up  the  corresponding  procedures (specific  rules  or  mutual  exclusion). These 
were reported to have been properly set up and effective. 

6.  Relevance and coherence of Article 68 
6.1  Relevance of the measures 
Environmental measures were generally relevant to the needs of the Member States, particularly (a)(v) 
agri-environment measures since they were based on the model of similar measures of CAP Pillar II. 
Risk management measures were also judged relevant to the growing volatility of agricultural markets. 
However,  they  received  a  small  share  of  the  budget.  Conversely,  the  measures  (b)  specific 
disadvantages, (a)(ii) quality and (a)(i) types of farming important for the environment were more often 
the source of relevance issues: 

-  Measures  were  often  poorly  targeted  towards  specific  needs,  especially  measures  (b)  that  were 

precisely supposed to address specific disadvantages. 

-  Measures often lacked criteria aimed at changing or improving previous practices, thereby generating 
deadweight  effects.  This  was  often  the  case  for  measures  aimed  at  improving  the  quality  of 
agricultural products (Italy, France, Greece and Poland among studied Member States). 

-  Support under objective (b) specific disadvantages was channelled to sectors in order to maintain 
them,  but  most  often  without  any  requirement  concerning  the  structural  or  strategic  adjustments 
needed to favour the long-term viability of these sectors. One could question the sectors’ capacity to 
survive  without  the  support.  In  the  beef  and  veal  sector  in  particular,  many  Article  68  measures 
maintained the same support that was already existing in the past.  

-  Finally, the budget allocation rarely resulted from a detailed analysis of the level of support required 

to meet the needs, but more from a political choice. 

From a budgetary perspective, measures with the most significant expenditure implemented by the main 
users of the Article 68 budget, Italy and France, were judged as relevant1. 

6.2  Supplementary role and coherence of the measures 
In theory and given its optional character, Specific Support measures should have been implemented 
when Member States could not use other existing schemes in the CAP. Except for mutual funds, all 
measures were a continuation of previous or existing supports (with some adaptations) financed from 
Pillar I, Pillar II or national budgets. Consequently, mutual funds were the only new measure.  

In the case of Agro-Environment Measures shifted from Pillar II, Article 68 provided Member States 
room for manoeuvre, by allowing them to implement other actions using the budget of Pillar II. These 
measures were often the most relevant; however, provisions of Article 68 were poorly adapted since 
budgets could not be managed over several years as in Pillar II. Furthermore, effectiveness problems 
may arise from the standardisation of the level of payment among the concerned regions and from the 
lack of a commitment period of farmers over several years. 

Article 68 measures were generally coherent with measures of Pillar II and, in several cases, their actions 
were  complementary  ((b)  specific  disadvantages  measures  and  modernisation  support  or  Article  68 
(a)(v)  agri-environment measures  and these of Pillar II). However, a coherence issue arose between 
Less Favoured Areas support of Pillar II, as they often targeted the same farmers, and the Member States 
had the same specific objectives for applying those measures as was the case of Less Favoured Areas 
payments.  

1 Support to sheep and goats (10% of EU Article 68 expenditure for 2010-2012), crop harvest insurance (5%) and organic farming (4%) for 
France; contributions to insurance premiums (11%) and support to crop rotation in Italy (7%). 

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Evaluation of Article 68 measures 

6.3  Optional character of the scheme 
One way of financing Article 68 was to reallocate a given percentage of direct payments to specific 
sectors or farmers. However, the impact on the value of Single Payment Scheme payments was generally 
low, because Specific Support was partly financed from unused funds1.  

The  relevance  of  the  optional  character  depends  on  the  type  of  measures.  It  was  relevant  for  risk 
management measures; however, management of budgets over several years, offered by Pillar II, would 
fit the needs of the measures better. For environmental measures, optionality was relevant in the case of 
local environment issues, even though Pillar II would also have been more appropriate; on the other 
hand, by definition, it was less relevant in the case of general issues that need to be tackled by measures 
at  the  EU  level  and  should  apply  to  all  Member  States.  Finally,  some  measures  implemented  under 
competitiveness objectives would have been more relevant in the framework of Pillar II, since they were 
supposed to produce environmental and social amenities. 

In the case of competitiveness measures, if the objective was to support the transition of a sector in order 
to be able to maintain on the market, then optionality was relevant provided that the measures were well 
tailored to the needs. In that case, support may not generate any distortion of competition. However 
several measures were implemented with significant budgets (most measures in the dairy sector, Greek 
and  Spanish  measures  in  cattle  and  sheep  and  goats  sectors),  even  though  viability  indicators  of 
supported farms were relatively better than those of farms of the same sectors in Member States that did 
not implement the measure, thereby generating distortion of competition within the EU single market. 
Furthermore,  several  measures  were  not  intended  to  target  specific  disadvantages  affecting  farmers 
inside one Member State (especially in the cattle and the sheep and goats sectors).  

The efficiency of the optional character is limited because measures had a limited effectiveness  and 
generated additional administrative burden, particularly competitiveness measures that received 63% of 
expenditure. 

7. 

Lessons learned 

  Some measures would have been more effective if implemented under CAP Pillar II 

Several  measures  implemented under  Article  68 pursued  objectives  of  CAP  Pillar  II:  measures  with 
explicit  environmental  objectives  as  well  as  measures  with  implicit  environmental  and  territorial 
objectives. It would be more effective, efficient and coherent to implement these measures under Pillar 
II,  in  order  to  benefit  from  its  programing  approach  and  multi-annual  budgetary  framework.  The 
rationale  of  (b)  specific  disadvantages  measures  targeting  Less  Favoured  Areas  and  other  specific 
disadvantaged areas, whose objectives were mainly territorial and environmental, should be to reward 
the social cohesion objectives or amenities generated, rather than to maintain production as such. From 
this  point  of  view,  CAP  Pillar  II  would  be  more  suitable  as  a  framework  for  designing  the  proper 
supports. The implementation of such measures in CAP Pillar II would have required its budget to be 
increased to cover the extra-costs entailed. 

  Some coupled measures should have included restructuring requirements 

Many (b) specific disadvantages measures were channelled to sectors that had been supported for a long 
time. This support could have been more effective if it had been based not only on short-term analysis 
but also on long-term analysis of sectors’ weaknesses and needs. The scheme may thus include not only 
coupled support but restructuring measures in line with long-term strategies for the sectors.  

  The optional character was not justified for some measures 

When environmental issues at stake can be considered as general, it would be relevant to extend the 
obligation to tackle them to all Member States, instead of leaving the decision to the Member States. 

  The optional character of the Specific Support would have required setting clearer objectives 

Results  could  have  been  improved  by  introducing  approval  by  the  European  Commission  of  all 
measures,  but this  would  have  considerably  increased  the  administrative  burden.  Therefore, the  best 

1 i.e. unspent funds arising from the Single Payment Scheme execution or retention on the national reserve. This possibility was not available 
to New Member States applying the Single Area Payment Scheme. 

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Evaluation of Article 68 measures 

solution would have been to define much more precise objectives for the Specific Support as well as 
stricter implementing rules (for setting up, presenting and justifying to the European Commission and 
monitoring  the  measures).  This  would  have  reduced  the  margin  for  interpreting  the  regulation  and 
improved the relevance of the measures at Member State level. Especially, provisions should have been 
set for stricter targeting rules in the measure design.

ii 

Evaluation of Article 68 measures 

1  INTRODUCTION 

1.1  CONTEXT OF THE EVALUATION 

In 2003, the Single Payment Scheme regulation (Council Regulation (EC) No 1782/2003) brought the 
Common  Agricultural  Policy  (CAP)  further  in  line  with  WTO  requirements.  This  substantial  CAP 
reform introduced full decoupling of direct aids to farmers from production, in order to simplify the 
CAP and promote a more market-oriented and competitive agriculture.  

However,  the  progressive  ending  of  coupled  payments  could  have  strong  transitional  effects  on 
agricultural  production  levels  and  regions.  It  also  raised  risks  of  reducing  incentives  for  farmers  to 
maintain specific crops considered as less profitable or located in areas with specific constraints and this 
could  have  had  impacts  on  the  quality  of  agricultural  products,  on  specific  processing  chains,  on 
maintenance of environmentally friendly practices, etc. 

From  2004  to  2009,  Article  69  of  2003  CAP  regulation  (Council  Regulation  (EC)  No  1782/2003), 
together with other schemes, such as partial decoupling, introduced a certain amount of flexibility in the 
way decoupling was implemented and could mitigate some of the aforementioned risks. In 2009, the 
CAP  Health  Check  resulted  in  replacing  the  previous  Article  69  scheme  by  Article  68  of  Council 
Regulation (EC) No 73/2009, providing additional possibilities for Member States to trigger Specific 
Support with considerable room for manoeuvre.  

1.2  OBJECTIVE OF THE EVALUATION 

The EC has to evaluate the results of any EU activities financed on an annual basis. To respond to this 
obligation,  the  EC  has  to  evaluate  the  Specific  Support  granted  according  to  Article  68  of  Council 
Regulation (EC) No 73/2009 (Direct Payment Regulation), it also takes into account Article 69 of the 
Council Regulation (EC) 1782/2003 (Single Payment Scheme Regulation). 

The evaluation considers: 

 

 

 
 

 

 

 

the conception of the measures, especially their defined purpose, their relevance to meet the needs, 
their rationale, as well as all the elements in the measures defined to guarantee their effectiveness 
(establishment of eligibility criteria, amount of aid, ceiling, etc.), 
their implementation (output indicators such as number of beneficiaries, number of hectares or of 
head of cattle supported, etc.), and input indicators such as the resources involved at Member State 
level, 
their control system (administrative control, on-the-spot checks, etc.), 
the results of the Specific Support measures regarding the objectives laid down in the regulation 
and those identified by Member States and justifying the implementation of Specific Support, 
their impacts (including unexpected ones) on the agricultural sector at the regional, national and 
EU  level,  and  other  related  sectors,  taking  into  consideration  regions  or  operators  not  having 
benefited from Specific Support, which were affected by the ceiling or budget reduction, 
their  coherence  with  the  principles  (subsidiarity,  additionality  and  proportionality)  and  other 
relevant measures of the CAP, 
the optional character of the Specific Support. 

For  this  purpose,  the  evaluation  examines  the  common  evaluation  criteria,  namely  relevance, 
effectiveness, efficiency, sustainability, coherence and community value added of the measures applied 
by Member States. 

1 

 
Evaluation of Article 68 measures 

1.3  GENERAL APPROACH TO THE EVALUATION 

1.3.1  PERIOD EXAMINED AND GEOGRAPHICAL COVERAGE 

The evaluation covers three distinct periods: 

 

 
 

since 1st August 2009, the first deadline for Member States to communicate their decisions on 
their choices for implementing Article 68,  
between 2004 and July 2009, after the various Member States began implementing Article 69, 
between 2004 and July 2009, before the implementation of Article 69 by the Member States. 

Indeed, the period between 2004 and July 2009 before the implementation of Article 69 in the Member 
States is considered to be a reference for the analysis of Article 68 measures. 

The conception, implementation and impacts of Article 68 measures are examined in all concerned EU 
Member States. Detailed information was collected in eight Member States, as required by the Tender 
Specifications, through the carrying out of National Studies in France, Italy, Spain, Greece, Finland, 
Poland, Hungary and Denmark.  

Two additional simplified National Studies were conducted in Portugal and the Netherlands, in order to 
cover the different objectives of Article 68 as well as to properly analyse deadweight effects. They focus 
on specific national issues: 

  The Netherlands was the only Member State having implemented Article 68(1)(a)(iv) for practising 
enhanced  animal  welfare  standards.  The  Netherlands  also  counts  among  the  only  three  Member 
States that have implemented an insurance measure under Article 68(1)(d), 

  Portugal implemented a large range of measures with limited budget. This case brings additional 
information on the issues of relevance and targeting of  Article 68 measures. As a matter of fact, 
risks of deadweight effects might not be sufficiently assessed if national studies focus only on the 
large users of the Specific Support scheme.  

1.3.2  OVERALL APPROACH 

The overall approach included two steps: a first step was the theoretical analysis of the functioning of 
the instruments that helped identifying expected effects of the measures. In a second step, quantitative 
and qualitative empirical assessments of the effects were compared to theoretical hypotheses in order to 
answer to evaluation questions. 

  A sound theoretical analysis:  

A  major  difficulty  of  a  retrospective  analysis  is  to  distinguish  clearly  between  observed  results 
attributable to the CAP measures and those driven by other factors (market trends, technical progress, 
other  national/regional  measures,  environmental  regulations  etc.).  The  approach  applied  in  the 
evaluation  is  to  compare  observed  results  with  a  theoretical  counterfactual  situation  without  CAP 
measures.  This  counterfactual  situation  is  constructed  on  the  theoretical  framework  presented  in  the 
chapter 2.  

  Empirical assessment 

The quantitative empirical assessment uses standard statistical approaches. 

-  The Farm Accounting Data Network (FADN) is a key source of data to draw results on the 
impact  of  measures  in  terms  of  economic  viability,  competitiveness  and  sustainability  of 
production along the supply-chain.  

-  The Eurostat and Agriview databases provided data on the production characteristics (volumes, 
prices, regional agricultural value, AWU) in the different sectors / Member States, used for the 
analysis of the competitiveness and the sustainability of the supported sectors, as well as the 

2 

Evaluation of Article 68 measures 

environmental  and  territorial  impact  of  Article  68  measures.  Where  necessary,  these  main 
statistical databases have been complemented by data from national statistical offices. 

-  The Clearance of Accounts Audit Trail System (CATS-database) encompasses the details of all 
individual payments made to the beneficiaries of the CAP 1st and 2nd Pillars. It gives an overview 
of the implementation of Article 68 across the entire EU, but does not differentiate the various 
measures  under  one  objective.  Furthermore,  it  is  only  available  for  the  three  first  years  of 
implementation of Article 68 (2010-2012). For this reason, it was complemented by the national 
implementation  (input/output)  data  gathered  during  the  national  studies,  which  provide 
comprehensive data differentiating all the measures, as well as output indicators (number of 
supported hectares, heads, tonnes…), but was only collected for the ten Member States (FR, IT, 
ES, GR, HU, DK, FI, PL, NL, PT) where national studies were conducted.  

The qualitative empirical assessment is based on the measures’ notification letters sent by the Member 
States  to  the  EC  as  well  as  on  the  analysis  of  information  collected  from  managing  authorities  and 
production sectors during the ten National Studies. This approach is needed for properly interpreting the 
quantitative results and identifying external factors.  

A  thorough  analysis  of  the  grey  and  scientific  literature  was  also  used  to  appraise  the  potential 
environmental impacts of the measures. 

1.3.3  LIMITS 

The main limitations encountered by the evaluators were the following. 

-  The large number and variety of measures implemented at the EU-level: Article 68 was 
implemented  in twenty-six  Member  States  over the  2010-2014  period. Various sectors  were 
targeted,  with  different  rationales  and  objectives.  The  diversity  of  measures  prevented  the 
evaluators to assess all the measures and this was mainly done for ten Member States, which 
are among the main users of Article 68. The results of the measures set under the various Article 
68 are mixed, which makes it difficult to provide an overall judgement on Article 68. 

-  The limits of the reports sent by the Member States to the EC: the content of the measures 
notifications and of the reports on the implementation of the Article 68 sent to the EC vary in 
quality. Particularly, they did not always provide sufficient justification for the implementation 
of Specific Support. As a result, the information had to be collected from the National Studies 
conducted  in  ten  Member  States,  to  gather  the  quantitative  and  qualitative  data  needed  to 
document and answer the evaluation questions.  

-  Limited monitoring systems at Member States level: the deficiency in the monitoring systems 
implemented  by  Member  States  to  assess  the  performance  of  the  measures  prevented  the 
evaluators to access comprehensive data for evaluating the outcomes/impacts of the measures. 
In  the  ten  Member  States  studied,  only  implementation  data  was  provided  (budgetary 
expenditures,  number  of  beneficiaries,  etc.),  although  not  always  in  a  comprehensive  and 
homogeneous way. 

3 

Evaluation of Article 68 measures 

2  REGULATORY  FRAMEWORK  AND  THEORETICAL 

ANALYSIS 

2.1  REGULATORY FRAMEWORK 

In 2003, a substantial reform of the Common Agricultural Policy (CAP) was adopted, with the aim of 
promoting  a  more  market-oriented  and  competitive  agriculture,  through  the  introduction  of  a  Single 
Payment Scheme (Council Regulation (EC) No 1782/20031). This Regulation experienced a number of 
important changes and was ultimately repealed and replaced by Council Regulation (EC) No 73/2009 
of 19 January 20092, formalising agreements on the midterm review of the reform process, the so-called 
Health Check. 

According to the 2003 reform, farm support should not interfere with the production choices of farmers 
and  the  market  equilibrium.  The  market  should  determine  the  production  levels  and  quality  of 
agricultural production. This approach has led to changes in income support instruments: the tools used 
previously have gradually disappeared in favour of a single, lump-sum payment depending on the level 
of previous aid. This aid is decoupled, i.e. is not linked to production levels or to the type of production.  

Specific  measures  were  established  for  aspects  that  the  market  is  unable  to  deal  with  in  an  optimal 
manner  taking  into  account  public  goods  generated  or  affected  by  agricultural  activities  in  order  to 
protect the environment, public health, animal welfare, etc. Member States were thus allowed to grant 
additional coupled payments for specific types of farming and quality production pursuant to Article 69 
of Council Regulation (EC) No 1782/2003. This option was maintained after the CAP Health Check 
with the introduction of Article 68 that broadened the range of Specific Support to be granted in order 
to address given objectives.   

Cross-compliance  with  statutory  requirements  in  the  spheres  of  the  environment,  animal  and  plant 
health,  animal  welfare  and  Good  Agricultural  and  Environmental  Conditions  (GAEC)  was  also 
introduced in 2003. 

Finally,  the  Rural  Development  Regulation  (Council  Regulation  (EC)  1290/2005  of  21  June  2005, 
“RDR”)  has  been  established  as  the  2nd  pillar  of  the  CAP  to  make  the  implementation  of  rural 
development measures more coherent and transparent.  

2.1.1  THE  2003  REFORM  AND  THE  INTRODUCTION  OF  THE 

SINGLE PAYMENT SCHEME 

2.1.1.1  Introduction of the Single Payment Scheme (SPS) 

The principle for calculating payments is to multiply the number of eligible hectares by a single payment 
entitlement. Member States could choose between three basic models to calculate the reference amount: 

1.  The  historical  model,  in  which  payments  are  purely  based  on  historical  payments  received  by 

individual farms during the reference period from 2000 to 2002. 

2.  A regional model, in which payments are made as flat rate payments per hectare, and with the level 

of support being the same for all farms within a region (3). 

3.  A so-called hybrid model, in which a part of the payment is based on historical reference data (2000–

2002), and another part on uniform acreage. 

1 Council Regulation (EC) No 1782/2003 of 29 September 2003 establishing common rules for direct support schemes under the Common 
Agricultural Policy and establishing certain support schemes for farmers 
2 OJ L 30, 31.01.2009, p. 16 
3 It is possible to introduce a differentiation between grassland and crops areas. 

4 

                                                      
Evaluation of Article 68 measures 

The implementation of the single payment scheme was not uniform across Member States. The Member 
States had room for manoeuvre in the application of decoupling, in terms of the date of activation of the 
instrument (2005, 2006 or 2007), the extent of decoupling (partial or total), the implementation of Article 
69  and the redistribution  of  the  single  payment  among  categories  of  farmers  (“regionalisation”).  An 
overview of the implementation of the 2003 reform and subsequent changes decided on by the Member 
States is provided in annex. 

2.1.1.2  Implementation of support schemes in the new Member States 

New Member States must apply a single payment scheme on a regional scale (Article 71f of Regulation 
(EC)  No  1782/2003).  However,  they  may  also,  during  a  transitional  period1,  apply  a  Single  Area 
Payment Scheme (SAPS) (Article 143a), which is a decoupled support system (with no obligation to 
produce) based on two elements fixed at the  national level: a national financial grant (the sum of all 
direct payments that the Member State will receive within the framework of “normal” direct payment 
systems) and a national agricultural land area, equivalent to the agricultural area used that was in “good 
agricultural condition” in June 2003. Payments granted within the SAPS are also subject to the cross-
compliance  mechanism.  New  Member  States  may  grant  complementary  national  direct  payments 
(CNDP), which may be decoupled or coupled, pending the authorisation of the Commission and within 
given limits.  

2.1.1.3  Article 69 and production-linked support measures 

Member  States  may  grant  additional  payments  to  support  agricultural  activities  that  encourage  the 
protection or enhancement of the environment or for improving the quality and marketing of agricultural 
products. Additional payments are made through the reduction (10% max.) of the funds available under 
national ceilings for each sector. 

Additional payments granted under Article 69 are considered as coupled, with the provision that they 
are not granted to all producers of a sector, but are based on certain eligibility criteria decided on by the 
Member States. As regards field crops, and the beef, sheep and goat sectors, the application of Article 
69 is taken into account for the calculation of the maximum percentage of partial coupled payments (cf. 
Articles 66, 67 and 68). 

2.1.1.4  The 2009 CAP Health Check2 

In 2007, the Health Check of the CAP reform led to a reaffirmation of the orientation chosen in 2003. 
Without  modifying  the  specific  objectives  of  the  2003  reform,  several  changes  were  adopted  and 
established in three regulations:  

-  Council Regulation 72/2009 modifying the single CMO,  
-  Council Regulation 73/2009 repealing Regulation 1782/2003,  
-  Council Regulation 74/2009 modifying the Rural Development Regulation.  

Aside from green considerations such as climate change, water management and bio-energy (obtained 
through a greater modulation among others), one of the aims of the CAP Heath Check was to ensure 
more competitiveness in the farming sector. It required  the decoupling of a greater share of farmers’ 
income support payments (except for suckler cow and sheep and goat premiums), as well as the lifting 
of  constraints  for  farmers  to  freely  respond  to  market  demand  (abolition  of  “set  aside”  obligation, 
progressive removal of milk quotas by 1% every year until their expiry by April 2015 and scaling down 
of price regulating mechanisms). 

1 The Health Check extended the transitional period to 2013. 
2 Source: DG Agri - http://ec.europa.eu/agriculture/healthcheck/index_en.htm 

5 

 
                                                      
Evaluation of Article 68 measures 

Table 2: Overview of CAP Health Check changes considering direct payments1 
PARTIAL DECOUPLING 

P
A
C
e
h
t

e
r
o
f
e
B

k
c
e
h
C
h
t
l
a
e
H
P
A
C

h
t
l
a
e
H
P
A
C
e
h
t

e
r
o
f
e
B

  Crops sector: For Arable Crop Payments (up to 25%), Durum Wheat Quality Supplement (up to 40%) and 

  MS could retain a share of the coupled payments for specific sectors: 
k
c
e
h
C
h
t
l
a
e
H

Hops (up to 25%) 

  Olive oil sector: For olive groves (up to 40% coupled) 
  Animal sector: For the Suckler Cow Premium (up to 100%), the Special beef premium (up to 75%), the 

Slaughter Premium (up to 40% for adults and 100% for calves) and Sheep and Goats (up to 50%). 

  Seeds: 100% exclusion of some or all species. 

s
e
m
o
c
t
u
O

k
c
e
h
C

Full decoupling*: 
  Arable crops, olive and hops decoupled from 1 January 2010 
  Seeds decoupled by 1 January 2012 at the latest. 
  Beef and veal payments, except suckler cow premium, decoupled by 1 January 2012 at the latest 
  Soft fruit: transitional support until 31 December 2011, and converted into decoupled payment as of 2012 under 

Annex VIII. 

*Sheepmeat and goatmeat payments could remain partially coupled (up to 50%). 

Reviewing of the decoupling decision: 
  MS  allowed  to  review  the  decision  taken on  the  decoupling of  fruit  and  vegetables  in  2007 provided that  it 

results in lower coupled payments. 

OTHER SUPPORT SCHEMES 

Other coupled aid could be granted for: 
 Energy crops: a premium of €45/ha for energy crops for the production of biofuels and electrical and thermal 

energy produced from biomass. 

 Durum wheat: Aid of €40/ha, granted subject to the use of certain quantities of certified seeds of varieties of 

high quality for the production of semolina or pasta. 

 Protein crops: Aid of €55.57/ha of protein crops (peas, field beans, lupins). 
 Rice:  Specific  payment  per  hectare,  the  value  set  according  to  the  historical  yields  in  the  Member  States 

concerned multiplied by €75/t. 

 Nuts: Aid per hectare granted to farmers producing nuts, with a possibility of granting additional national aid. 

P
A
C

h
t
l
a
e
H

k
c
e
h
C

o
   Decoupling of protein crops, rice and nuts sector by 1 January 2012 at the latest  
c
t
  Abolition of energy crops premium: the €90 M resulting to be used by new Member States in Pillar I. 
u
O

s
e
m

Source: DG Agri 

The CAP Health Check also brought flexibility to Article 69 provisions for direct payments for the use 
of environmental measures or improving the quality and marketing of products, under the Article 68 
Specific Support. 

2.1.2  SPECIFIC SUPPORT UNDER ARTICLE 68 

The objectives of Article 68 Specific Support are defined in recital 35 of the Direct Payments Regulation 
(Reg (CE) 73/2009): 

-  To address environmental and animal welfare issues,  
-  To improve the quality and marketing of agricultural products, 
-  To buffer the consequences of the phasing-out of milk quotas and the decoupling effects 

of support in particularly sensitive sectors, 

-  To  contribute  to  effective  management  of  risks  with  financial  contributions  to  the 
premiums farmers pay for crop, animal and plant insurance and financial compensations 
for economic losses in case of plant or animal diseases and environmental incidents. 

Compared to the Article 69 support, the main changes are that the money will not always have to be 
used in the sector in which it was retained and that Member States operating SAPS became eligible. The 
other changes introduced by the Health Check are summarised in the table below as well as general rules 

1 Source: DG Agri - http://ec.europa.eu/agriculture/healthcheck/before_after_en.pdf 

6 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                      
Evaluation of Article 68 measures 

for  the  implementation  of  Article  68  that  are  defined  in  Commission  Regulations  (EC)  1120/2009 
(Articles 37 to 49) and 1122/2009 (Articles 29 and 46). 

Table 3: Overview of CAP Health Check changes considering Specific Support1 
ARTICLE 68 

e
h
t

e
r
o
f
e
B

P
A
C

h
t
l
a
e
H

  Under Article 69, Member State could retain up to 10% of national ceilings per sector. 
  Payments are made to farmers in the sector(s) concerned by the retention and can be spent in specific types of 
k
c
farming important for protection or enhancement of the environment or improving the quality and marketing 
e
h
of agricultural products.  
C
  Payments can be coupled to a product or factor of production 

s
e
m
o
c
t
u
O
k
c
e
h
C
h
t
l
a
e
H
P
A
C

Ceilings: 
  MS can decide to use up to 10% of their national ceilings for Article 68 implementation by 1 August 2009, 1 

August 2010, or 1 August 2011.  

  Option provided for Member State to reduce direct payments on a sectoral basis by 3.5% of national ceilings in 

Annex VIII (derogation for Finland, Slovenia and Malta – €2 M for dairy is provided). 

  Measures  with  additional  agri-environmental  benefits,  which  go  beyond  the  baseline  (as  required  for  agri-
environmental measures in Pillar II) can be financed without having to respect the 3.5%, but within the 10% and 
subject to Commission approval.  
Extended provisions in the measures: 
  Measures to address disadvantages for farmers in certain regions specialized in the dairy, beef, sheep, goat meat 

and rice sectors are extended to economically vulnerable types of farming in the same sectors. 

  Animal welfare is added to Article 68 (1)(a) (measures focused on enhancing and protecting the environment 

and on improving the quality of agricultural products) 

  Risk Management measures are broadened to include crop, animal and plant insurance, as well as mutual funds 

for animal and plant diseases, and environmental incidents.  

  Maximum intensity of public support for insurance and mutual funds is limited to 65% (with EU cofinancing 

75%). 

  Transition period from existing Article 69 measures: 2010, 2011 and 2012. (Article 69 measures are no longer 

financed as of the 2014 budget). 

Article 68 financing: 
For Member States applying the Single Payment Scheme (SPS): 

  MS may decide by 1  August 2009 to use “unused amounts” under Annex VIII as of 2010 within a safety 

margin of 0.5% and an overall ceiling of 4% of their adjusted Annex VIII amount. 

For New Member States (EU-10 and EU-2): 

  EU-12 may calculate their amounts to finance measures under Article 68 on the basis of amounts in Annex 

VIII for 2013/2016 (budget years 2014/2017), i.e., when full phasing-in is completed. 

  These amounts for the New Member States in Annex VIII are increased by a total amount of €90 million per 

year distributed amongst the New Member States in proportion to their fully phased-in amounts. 

  MS also have the option of financing Article 68 by linear cuts in coupled payments. 
  MS are allowed to finance Article 68 measures from 2009 if they are only financed by the national reserve. 

Source: DG Agri 

2.1.2.1  Provisions for the implementation of the measures 

The Health Check Regulation (EC) 73/2009 defines different types of measures for the Specific Support 
and Regulation (EC) 1120/2009 sets specific rules concerning their implementation. 

1 Source: DG Agri - http://ec.europa.eu/agriculture/healthcheck/before_after_en.pdf 

7 

 
 
 
 
 
 
 
 
 
 
                                                      
Evaluation of Article 68 measures 

Table 4: Specific Support granted under Article 68, forms of support and requirements 

Regulatory references 
Reg. (EC) no 73/2009 

Form of support granted  
Reg. (EC) no 73/2009 

Specific rules 
Reg. (EC) no 1120/2009 

Article 
68(1)(a)(i) 

Article 
68(1)(a)(ii) 

Article 
68(1)(a)(iii) 

Article 
68(1)(a)(iv) 

Article 
68(1)(a)(v) 

Article 
68(1)(b) 

Article 
68(1)(c) 

Article 
68(1)(d) 

Article 
68(1)(e) 

Specific types of 
farming, which 
are important for 
the protection or 
enhancement of 
the environment 
Improving the 
quality of 
agricultural 
products 

Improving the 
marketing of 
agricultural 
products 

Practising 
enhanced animal 
welfare 
standards 

Specific 
agricultural 
activities 
entailing 
additional agri-
environmental 
benefits 

Specific 
disadvantages 
affecting 
farmers in the 
dairy, beef and 
veal, sheep meat 
and goat meat, 
and rice sectors 
Restructuring 
and/or 
development 
programmes to 
prevent land 
abandonment 

Contributions to 
crop, animal and 
plant insurance 
premiums 

Financial 
contributions to 
mutual funds for 
animal and plant 
diseases and 
environmental 
incidents 

Limited to 
3.5% of 
national 
ceilings 

Limited to 
3.5% of 
national 
ceilings 

Limited to 
3.5% of 
national 
ceilings 

Limited to 
3.5% of 
national 
ceilings 

Limited to 
10% of 
national 
ceilings 

Limited to 
3.5% of 
national 
ceilings 

Limited to 
10% of 
national 
ceilings 

Limited to 
10% of 
national 
ceilings 

Annual 
additional 
payments 

Annual 
additional 
payments 
such as 
headage 
payments or 
grassland 
premiums 
An increase in 
the unit value 
and/or the 
number of the 
farmer’s 
payment 
entitlements 
Annual 
additional 
payments 

Compensation 
payments 

Limited to 
3.5% of 
national 
ceilings 

Specific types of farming shall provide non-negligible and 
measurable environmental benefits. 

Annual additional payment may enable farmers to meet the 
conditions to join Community food quality schemes or 
private or national food quality certification schemes. 

Annual additional payment shall encourage farmers to 
provide better information and/or promote the quality or 
characteristics of the products or their production methods. 

MS shall establish eligibility conditions regarding the type of 
farming, the size of farms (density or number of animals and 
manpower) and/or the farm management system applicable. 

MS shall establish eligibility conditions regarding the 
environmental objectives in the region and any support 
already granted by other support instruments.  
Specific Support for farmers exercising specific agricultural 
activities entailing additional agri-environment benefits shall 
follow provisions laid down for agri-environmental and/or 
animal welfare support in the EAFRD Reg. no 1974/2005. 
The Commission shall assess and approve Specific Support 
measures proposed by the MS. 
MS shall define the economically vulnerable and/or 
environmentally sensitive areas and/or the economically 
vulnerable types of farming eligible for the support, taking 
into account the relevant production structures and 
conditions. 

Eligibility conditions shall set out how individual reference 
amounts for eligible farmers are to be fixed and set out the 
restructuring and/or development programmes and/or the 
conditions for their approval.  
A farmer may receive a number of payment entitlements, but 
not higher than the number of hectares he holds. 

MS shall lay down conditions for contracts to be eligible, 
considering (a) the particular risks insured against, (b) the 
particular economic losses covered and (c) the premium paid 
set out by the contract. 
MS shall adopt rules for establishing the calculation of the 
destruction of the average annual production of a farmer. 
The farmer shall inform every year the Member State of the 
number of his insurance policy, and provide a copy of the 
contract and proof of payment of the premium. 
MS shall define rules for mutual funds eligible for financial 
contributions as laid down in art. 48 of Reg. 1120/2009. 
MS shall ensure that their farming communities are made 
aware of (a) all mutual funds accredited, (b) the conditions 
for affiliation to a particular mutual fund and (c) the 
financing arrangements of the mutual funds. 

Source: EU Regulations 

8 

 
 
 
 
  
 
 
 
 
Evaluation of Article 68 measures 

2.1.2.2  Financial provisions 

Financial provisions for the implementation of the Specific Support are set in Article 69 of Regulation 
(EC) 73/2009. 

2.1.2.2.1  Ceilings 

Member States could decide to retain up to 10% of their national ceiling for direct payments (determined 
in Annex VIII of Regulation (EC) 73/2009) to fund Specific Support. In accordance with Article 69(4) 
of  the  same  regulation,  Specific  Support  under  measures  (a)(i)  to  (iv),  (b)  and  (e)  of  Article  68  – 
considered as coupled support – was limited to 3.5% of the national ceiling (6.5% for the transitory year 
2014)1. 

The retention to finance Specific Support could also be done on a sectorial basis, by reducing of 10% 
the component of the ceiling corresponding to sectors mentioned in Annex VI of the Regulation (EC) 
1782/2003. In that case, the funds retained had to be granted only to sectors concerned by the retention. 

2.1.2.2.2  Funding 

Different options were made available to fund Article 68 measures: 

1.  Using unspent funds arising from the SPS execution; 
2.  Reducing SPS entitlements and/or the national reserve and/or the coupled payments still in force 

(sheep meat and goat meat payments, suckler cow premium) ; 

3.  For mutual funds only, by making a linear reduction in one or more of the payments to be made 

to the beneficiaries of the relevant payments. 

2.1.2.2.3  Transitional provisions (Article 72 of Reg. (EC) 73/2009) 

Member States could use the amount retained under Article 69 of Regulation (EC) 1782/2003 as funding 
for  Specific  Support, instead  of  integrating  it into  the  SPS.  Especially,  in  the  event  a Member  State 
applied Article 69 of Regulation (EC) 1782/2003 for measures not compatible with Article 68, it could 
also have decided to continue to implement them under Article 69 of Regulation (EC) 1782/2003 during 
the years 2010, 2011 and 2012. 

2.1.3  ARTICULATION  WITH 

THE  RDR  AND  AGRO-

ENVIRONMENTAL MEASURES 

In the 2007-2013 programme, RDR measures were oriented around three thematic axes complemented 
by a “methodological” axis dedicated to the LEADER approach:  

- improving the competitiveness of agriculture and forestry, 
- supporting land management and improving the environment,  
- improving the quality of life and encouraging diversification of economic activities. 

As  building  blocks  for  each  thematic  axis,  a  range  of  pre-defined  rural  development  measures  is 
available, from which the Member States can choose those they believe will create the highest added 
value taking EU objectives into account. When setting-up Specific Support under Article 68, Member 
States have to pay attention to the risk of double financing the same objective. The RDR measures that 
could more precisely overlap with Article 68 Specific Support are listed in the table below. 

1 Finland had a derogation due to its climate and was allowed to use up to 10% of the national ceiling for coupled support. 

9 

 
 
 
                                                      
Evaluation of Article 68 measures 

Table 1: Risk of double financing 

Article 68 of Regulation (EC) 73/2009 

Article  68(1)(a)(i)  –  specific  types  of  farming  which  are 
important  for  the  protection  or  enhancement  of  the 
environment 

Article 68(1)(a)(ii)  –  improving the quality of agricultural 
products 

Article  68  (1)(a)(iii)  –  improving  the  marketing  of 
agricultural products 

Article  68(1)(a)(iv)  –  practising  enhanced  animal  welfare 
standards 
Article 68(1)(a)(v) – specific agricultural activities entailing 
additional agri-environment benefits. 

Article  68(1)(b)  –  to  address  specific  disadvantages 
affecting farmers in the dairy, beef and veal, sheep meat and 
goat  meat  and  rice  sectors  in  economically  vulnerable  or 
environmentally sensitive areas, or, in the same sectors, for 
economically vulnerable types of farming 

Article  68(1)(c)  –  in  areas  subject  to  restructuring  and/or 
development  programmes  in  order  to  ensure  against  land 
being abandoned and/or to address specific advantages for 
farmers in those areas 

RDR Council Regulation 1698/2005 of 20 September 

2005 
Article  44  –  first  planting  of  agroforestry  systems  on 
agricultural land 
Article 41 – non-productive investments 
Article 39 – agri-environment payments 
Article 32 – participation of farmers in food quality schemes 
Article 39 – agri-environment payments (endangered breeds) 
Article 28 – adding value to agricultural products 
Article  33  –  information  and  promotion  activities  for 
agricultural  products  that  comply  with  European  or  national 
food quality schemes 

Article 40 – animal welfare payments 

Article 39 – agri-environment payments 

Article 26 - modernisation of the agricultural holdings  
Article 34 – semi-subsidence farming 
Article 37 – natural handicap payments 
Article  38  –  Natura  2000  payments  and  payments  linked  to 
Directive 2000/60/EC 
Article 39 – agri-environment payments (endangered breeds) 

Article 37 – natural handicap payments in mountain areas and 
payments in other areas with handicaps 
Article 26 - modernisation of the agricultural holdings 

Source: Regulations 

The main risk of overlap concerns agri-environment measures (AEM). When setting-up AEMs, Member 
States  have  to  make  available  a  list  of  commitments  in  accordance  with  their  specific  needs  at  the 
national or regional level, which is examined by the  EC. Agri-environment payments are granted to 
farmers who engage in commitments on this list on a voluntary basis. Those commitments have to be 
undertaken  for  a  period  between  five  and  seven  years.  The  payments  are  granted  annually  to  cover 
additional costs and income foregone. 

2.1.4  CROSS-COMPLIANCE 

Since the 2003 CAP reform, the support granted to farmers under direct payments (1st pillar) and certain 
rural development measures (2nd pillar) is subject to cross compliance with statutory requirements for 
farmers  receiving  direct  payments.  This  mechanism  established  a  reduction  or  elimination  of  direct 
payments if Statutory Management Requirements (SMR) are not met in the spheres of the environment, 
animal and plant health, and animal welfare, and if minimum  Good Agricultural and Environmental 
Conditions  (GAEC)  needs  are  not  met.  These  rules  are  set  up  by  each  Member  State  at  the 
national/regional level, taking into account the specific characteristics of the areas concerned. Farmers 
who do not comply with these standards are subject to reductions of direct payments, depending on the 
severity of their infringement. 

According to Article 39 of Commission Regulation (EC) No 2009/1120, the Article 68 support “shall 
not compensate for the respect of mandatory obligations and, in particular, of the statutory management 
requirements and standards for good agricultural and environmental condition”. Therefore, the Member 
State shall ensure that the measures implemented under Article 68 objectives: 

- 
- 
- 

 (1)(a)(i) for the protection or enhancement of the environment,  
(1)(a)(v) for specific agricultural activities entailing additional agri-environment benefits and  
(1)(a)(iv) for practicing enhanced animal welfare standards 

support farmers implementing practices that go beyond the regulatory requirements. 

10 

 
Evaluation of Article 68 measures 

2.2  THEORETICAL ANALYSIS 

2.2.1  THE RATIONALE OF ARTICLE 68 

The Article 68 is a component of the SPS. Analysing the rationale of Article 68 requires to analyse the 
rationale of the SPS, the larger regulatory framework it fits in. 

It first analyses the effect of coupled and decoupled supports on farmers’ behaviour. We assume that 
farmers seek to maximize their profit under a set of constraints (land, capital, labour force). They try to 
reach the optimum allocation of their factors of production that would maximize their profit (defined as 
the difference between the output and the costs). This allocation choice results in a given land surface 
per type of crops.  

If the market is perfectly competitive, with no risk then it can be demonstrated that:  

-  Price support has a high distortive effect on the market equilibrium. It modifies the price level 
and  in  turn  discourages  consumption.  The  farmer  maximises  the  price  support  when  he 
maximises  his  yield  per  hectare.  Hence,  price  support  favours  overproduction  while 
consumption tends to decrease. This leads to accumulation of stocks or an increase in exports 
(than would need to be subsidised given the high internal level of price).  
When price support was applied, in order not to discourage consumption, the price effect was 
corrected by several mechanisms (export refunds, premium granted to manufacturers etc. The 
overproduction effect was usually corrected with a quota system. . 

-  Per tonne payment does not directly modify the price level and the consumption. However, it 
generates incentives for maximising yield per hectare. This may have an effect on the crop 
intensification of inputs. It also favours overproduction.  

-  Per hectare payment does not have direct effects on consumption and yield; therefore, the 
effects on the market equilibrium are less significant. However, it modifies and stabilizes the 
relative profitability of the crops over time. By doing so it affects farmers’ choice and favours 
over-development of the crop areas (if they are not limited to a maximum area).  

-  Decoupled payment, on the contrary, directly supports the income of farmers but does not 
modify  the  relative  crop  profitability.  It  is  fully  decoupled  from  any  type  of  production, 
volumes or surfaces. In sustaining farmers’ income, it has an indirect effect on their investment 
and  borrowing  capacity,  but  farmers  can  use  this  capacity  in  any  sector.  It  is  the  least 
“distortive” support of the CAP.  

Therefore, if all the support is decoupled, the market equilibrium should be close to the one that would 
have  occurred  without  CAP  payments  and  that  should  be  the  most  efficient  allocation  of  factors  of 
production if the market is “perfect” (the latter being a strong assumption).  

It  must be underlined that the decoupling principle is respected in each SPS model (that defines the 
number and the value of single payment entitlements) applied in the Member States (historical, regional, 
hybrid  models).  Therefore,  our  reasoning  is  valid  for  each  of  the  SPS  models.  However,  these  SPS 
models result in a different allotment of the entitlements between farmers, and they have thus different 
distributive effects. 

The market is in reality imperfect; the assumptions made above are far from the real functioning of the 
market. For instance:  

o  Farmers never know exactly in advance what will be the profitability of the crops: high production 
risk is one of the specificities of the agricultural sector, moreover in a global economy, the market 
risks are also increased; 

o  The factors of production may have a low mobility (buildings and material cannot be so easily 
sold off in order to reinvest in other activities, human resources may not have the required know-
how  to  switch  easily  from  one  activity  to  another  especially  from  one  type  of  agricultural 
production to another, etc.); 

11 

Evaluation of Article 68 measures 

o  Farmers do not pay for all the costs such as the public environmental costs of the pollution their 
activities  may  generate.  They  are  not  paid  for  all  the  services  they  provide  to  the  public  (for 
instance, for protecting landscapes and agricultural heritage, etc.); 

o  The information might be imperfect; this might limit the capacity of the farmers to be properly 
paid by consumers for certain qualities or certain environmentally friendly techniques they apply. 

Part of the Article 68 support is supposed to correct some of these market imperfections (insurance and 
mutual funds, environmental and animal welfare measures, quality measures), along with other incentive 
measures  (especially  rural  development  measures)  and  constraining  measures  of  the  CAP  (cross-
compliance for instance).  

Another part of the Article 68 support is supposed to smooth transitional effects (support considered as 
coupled,  land  abandonment  prevention),  along  with  partial  decoupling  measures1  and  some  support 
defined in Common market organisations (CMO). The coupled payments applied since the 1960s have 
severely  affected  the  EU  agricultural  market  equilibriums,  favouring  the  development  of  certain 
agricultural products and agricultural practices against others. In the sectors where these types of support 
were  applied  over  a  long  period  and  had  a  high  impact  on  relative  profitability,  the  transition  to 
decoupled payment would inevitably result in new market equilibriums. Coupled support allowed in the 
Specific  Support  was  justified  to  smooth  the  transitional  effects,  especially  in  sectors  with  agro-
processing or specific positive impact on the environment and also in regions with handicaps. However 
the maintenance of this support for smoothing transitional effects, if not justified by positive externalities 
(such as positive impact on the environment), generates or rather maintains markets imperfections given 
that  it  may  favour  some  sectors  or  production  areas  compared  to  others.  These  potential  effects  are 
especially studied in the EQ3. 

Measures set up under Article 68 include a large variety of payments considered as coupled for specific 
sectors or farm types (payment per hectare, payment per tons of product) and decoupled payments (agri-
environmental measures, insurance premium and support for investments). Given the diversity of the 
measures (described in the inventory in annex), it is quite difficult to describe a rationale of this package 
of  measures.  Therefore,  based  on  the  above  mentioned  theoretical  framework,  in  each  evaluation 
question, the rationale of the range of measures under review and their expected impacts is analysed. 

2.2.2  INTERVENTION LOGIC 

The following diagram presents the intervention logic of the CAP measures after the CAP Health Check, 
including Article 68. It was elaborated according to the neo-classical model, under the assumptions that 
individual agents make rational choice to maximize their benefits. Following the reform, major effects 
of the  Pillar  I  support  should  have  been, through  the  decoupling  of  subsidies, to  create an incentive 
structure that depends on scarcity of resources, state of technology and market demand, to  promote a 
more market-oriented and competitive agriculture.  

In this context, Article 68 has different objectives defined in the recital 35 of the Direct Payment- 
Regulation: 

-  Address environmental and animal welfare issues  
- 
-  Buffer the consequences of the phasing-out of milk quotas and the decoupling effects of 

Improve the quality and marketing of agricultural products 

support in particularly sensitive sectors 

-  Contribute to effective management of risks with financial contributions to the premiums 
farmers  pay  for  crop,  animal  and  plant  insurance  and  financial  compensations  to 
economic losses in case of plant or animal diseases and environmental incidents. 

1 Full decoupling was not applied to all the sectors at the same time, some sectors were given more times to adapt to full decoupling than others 
and partial decoupling was applied for some sectors. 

12 

                                                      
Evaluation of Article 68 measures 

These objectives mitigate some of the impacts of the 2003 reform, and contribute in coherence with the 
second pillar of the CAP to address issues that market driven process cannot achieve. 

13 

2.2.2.1  Objectives tree 

Evaluation of Article 68 measures 

14 

 
 
2.2.2.2  Intervention logic 

Evaluation of Article 68 measures 

15 

 
 
 
Evaluation of Article 68 measures 

3  IMPLEMENTATION OF ARTICLE 68 

A few facts can be highlighted that are further developed in the following parts: 

In terms of expenditure, few Member States implemented Article 68 in a significant way; 

- 
-  The implementation was concentrated on a few objectives among the nine objectives defined by 

the regulation for the Specific Support, others being very little used; 

-  Some sectors received most of the expenditures (extensive livestock sectors mainly); 
-  Generally, Article 68 was used to continue schemes existing previously. 

3.1  INVENTORY OF THE MEASURES SET UP BY MEMBER 

STATES 

The inventory of Article 68 is made on the basis of the documents sent by the Member States to the EC 
in order to notify implementation of Article 68. The application of Article 68 entered into force in 2010. 
Member States could take the decision to implement Specific Support either by 1 August 20091, 2010 
or 2011; for these implementing years, the notification of the measures had to be sent to the EC before 
the 1 August 2009. Then, they had a chance to review the measures by notifying them before the 1 
August 2011, for the implementing years 2012 and 2013. Finally, a last range of measures has been 
notified for the year 2014 (as a transition year before the set-up of a new scheme of ‘voluntary coupled 
payments’ in the framework of the CAP 2014-2020). 

A full description of all measures is presented in Annex (description of the measure, implementation 
period, eligibility criteria, etc.). The inventory prepared on the basis of the notifications sent to the EC 
has  been  completed  and  counterchecked  during  the  national  studies  for  the  ten  Member  States 
concerned.  

It appears that most of the measures were a continuation of previous schemes, renewing either support for 
sectors that could not keep a coupled support anymore or support transferred from the second pillar in order 
to take advantage of this financial opportunity. As a matter of fact, no national cofinancing was needed in the 
frame of Article 682. 

Twenty-five Member States chose to allow the totality of their Article 68 budget under measures considered 
as coupled, meaning that they only used the ceiling of 3.5% of direct payments allowed for coupled payments. 
On the other hand, only Denmark planned to fully use of the possibility of allowing 10% of the direct 
payments  to  specific  objectives3.  Other  Member  States  that  implemented  high  shares  of  decoupled 
payments were Italy and Hungary. 

Only three Member States defined measures at the regional level (BE, IR, UK).  

1 Article 68 could be implemented in 2009 only if financed through unused funds. 
2 Except for the insurance measure 
3 Finland had a derogation due to its climate and was allowed to use up to 10% of the national ceiling for coupled support. 

16 

                                                      
Evaluation of Article 68 measures 

The  following  chart  (Figure  2)  presents  a  synthetic  mapping  of  the  measures  implemented  by 
Member States in terms of sectors and regulatory objectives. 

Two types of Article 68 measures aim to support the competitiveness of sectors: 

-  The objective of addressing specific disadvantages of economically vulnerable types of farming 
(Article 68(1)(b)) was mainly used to support livestock; only two Member States made use of 
the possibility of supporting the rice sector (Hungary and Romania); 

-  The  objective  (68(a)(ii))  of  improving  the  quality  of  agricultural  products  also  supported 

livestock sectors but mainly crop productions. 

Environmental measures, under objective (68(1)(a)(i)) for specific types of farming which are important 
for the protection or enhancement of the environment and objective 68(1)(a)(v) of encouraging specific 
agricultural activities entailing additional agro-environment benefits, were also used to support mainly 
crop  production  (oilseed  and  protein  crops,  energy  crops,  crops  diversification).  Few  of  them  were 
dedicated at maintaining extensive pastures. 

The other types of measures were applied by a very limited number of Member States:  

  Objective  (68(1)(a)(iii))  was  implemented  only  in  Sweden.  The  objective  is  to  encourage 
farmers to improve the marketing of their products by compensating for actual costs linked 
to product development, market research, studies, participation in fairs, etc. 

  Only  two  Member  States  used  objective  (68  (1)(a)(iv))  concerning  animal  welfare:  the 

Netherlands and Estonia. 

  Objective  (68(1)(c))  to  support  restructuring  and/or  development  programmes  in  order  to 

ensure against land being abandoned was used by only three Member States (EL, HU, SI).  
  Objective (68(1)(d)) in the form of contribution to crop, animal and plant insurance premiums 

was only implemented by four Member States (FR, HU, IT, NL).  

  Objective (68(1)(e)) consisting of granting support by way of mutual funds was implemented 
only in France and Romania. These measures aimed to reduce the effects of economic losses 
caused by diseases or harmful organisms, environmental incidents or other climate incidents.  

17 

 
Evaluation of Article 68 measures 

Figure 1: Overview of Article 68 implementation per objectives and per sector 

18 

Prevention of land abandonment(68(1)(c))ROSEGRITDK2 NLLVESBEDK2 FRFRFRHUNLITESCerealsCZEFRGRPTEnergy crop2 DKProtein cropFIFRRicePTHUROOliveGRITPTSugar beetITESTobaccoFRITPLESHUStarch potatoCZEFIFRLVCYPDKPLBGHRITITESHUESPTIEPTNLBENLNL2 NLDKPTBESIHRITESATBGCZEEEFIFRDEHUIEIELVLTPLPT2 ROSKSIESCZIEITESBGDKFI3 FRHUPT4 GRLVPLROSI2 ESHRFIITESBGCYPCZEFRHUPT3 GRLTNLNLPLRO2 ESPigsEEBESKPoultryBEFRNLSectorSheep and goatBovine meatDairyLivestockInsurance(68(1)(d))Fruits and vegetablesAnimal welfare(68(1)(a)(iv))CropTypes of farming important for the environment (68(1)(a)(i))Quality of products(68(1)(a)(ii))Cross sectoral measureAdditional agri-environmental benefits(68(1)(a)(v))Disaventaged types of farming(68(1)(b))Aid per tonAid per haAid per headCost repaymentDecoupled aidOtherN.CNot implemented in 2014 
Evaluation of Article 68 measures 

3.2  BUDGETARY EXPENDITURE 

According  to  Title  V  of  Regulation  1120/2009  on  notifications,  Member  States  must  report  to  the 
Commission: 
 

the  total  amount  of  support  claimed  for  the  current  year  for  each  of  the  measures  and,  where 
applicable, sectors concerned, by 1 September of the year concerned at the latest (Article 51(1)(b)); 
for the preceding year, the total number of beneficiaries, the amount of the payments which have 
been granted per measure and where applicable for each of the sectors concerned by 15 September 
of the following year at the latest (Article 51(3)(c)). 

 

However EC data are available per Article 68 objectives but not per measure nor sector. Thus, we present 
below analyses from two different sets of data: 

-  CATS1 data, provided by the EC, which gives an overview of the implementation of Article 68 
across the entire EU, but does not differentiate the various measures under one objective, i.e., 
does not allow any sectoral analysis. Furthermore, it is only available for the three first years 
of implementation of Article 68 (2010-2012); 

-  National  data  gathered  during  the  national  studies,  which  provide  comprehensive  data 
differentiating all the measures, as well as output indicators (number of supported hectares, 
heads, tonnes…), but was only collected for the ten Member States (FR, IT, ES, GR, HU, DK, 
FI, PL, NL, PT) where national studies were conducted. Depending on the Member State, the 
period for which data is available varies. Data are also missing for a few measures2. 

3.2.1  DISTRIBUTION  BY  MEMBER  STATE  AND  BY  TYPE  OF 

MEASURE 

Twenty-six  Member  States  made  use  of  Article  68  over  2010-2014  (all  but  LU  and  MT;  Croatia 
implemented measures in 2013 and 2014 and Cyprus only in 2014). For the three first implementing 
year (2010-2012), the total support granted under Article 68 measures amounted to €3.8 billion. 

 Table 5: Distribution of Article 68 expenditure by Member State for the period 2010-2012 (€) 

Member State 

Total implemented 

EU share  Member State 

France 
Italy 
Spain 
Hungary 
Greece 
Poland 
Finland 
Czech Republic 
Romania 
Portugal 
Ireland 
Bulgaria 
Total EU 

1 048 244 389    
 851 383 351    
443 809 318    
281 466 017    
210 344 696    
184 151 407    
126 667 603    
94 444 867    
 88 530 482    
81 855 657    
68 007 828    
53 748 009    
          3 801 410 754    

27.6%  Denmark 
22.4%  The Netherlands 
11.7%  Austria 

7.4%  Slovakia 
5.5%  United Kingdom 
4.8%  Lithuania 
3.3%  Slovenia 
2.5%  Belgium 
2.3%  Latvia 
2.2%  Germany 
1.8%  Estonia 
1.4%  Sweden 

Source: CATS data 

Total implemented  EU share 
1.2% 
 44 986 060    
1.2% 
44 795 949    
0.9% 
35 373 779    
0.8% 
30 219 543    
0.7% 
25 524 015    
0.6% 
 22 451 559    
0.5% 
20 640 851    
0.5% 
19 090 270    
0.4% 
15 256 757    
0.1% 
3 723 098    
0.1% 
3 697 784    
0.1% 
2 997 464    

France and Italy have implemented the highest financial amounts: they used the equivalent of half EU 
total expenditures for Article 68. Spain is also an important user of the scheme (€443 million, 12%). On 
the contrary, a significant number of Member States used very low levels of funds in comparison (in ten 
Member States Article 68 expenditures represent less than 1% of EU total expenditures).  

1 Clearance of Accounts Audit Trail System 
2 Expenditure datasets were transmitted by national agriculture ministries and paying agencies. French data was available only from 2010 to 
2012, whereas for other Member States studied, it was available until 2013 (and even 2014). 

19 

                                                      
Evaluation of Article 68 measures 

Figure 2: Distribution of expenditure by Article 68 objective in each Member State (2010-2012) 

Source: Oréade-Brèche based on CATS data 

As shown in the map, in nineteen Member States, the measures under the objective (1)(b) of addressing 
‘specific disadvantages affecting farmers in the dairy, beef and veal, sheep meat and goat meat and rice 
sectors’ represent more than half of the expenditures and eight of them implemented only this type of 
measure (IE, UK, DE, EE, AT, SI, LT, SK). Globally, Member States allocated 45% of the Article 68 
funds to this objective. Measures under objective (1)(b) have been implemented by almost all Member 
States except Italy.  

The  two  other  objectives  benefiting  from  significant  shares  of  Article  68  expenditures  are  “agri-
environment (1)(a)(v)” and “quality (1)(a)(ii)” measures (18% of the funds each). Eleven Member States 
implemented  “quality”  measures  and  it  amounted  to  a  significant  share  of  the  expenditures  in  Italy, 
Greece  and  Sweden.  “Agri-environment”  measures  were  implemented  in  a  significant  way  in  Italy, 
France, Spain, Portugal and Denmark.  

Finally, the insurance measure represents about 10% of the total expenditures but was implemented by 
much less Member States (IT, FR, NL and HU from 2012). 

3.2.2  DISTRIBUTION BY SECTOR 

The  following  figure  is  based  on  the  expenditure  data  of  the  ten  Member  States  where  the  national 
studies were carried out1. They reflect the distribution for the entire EU, since these ten Member States 
together represent more than 85% of total EU expenditures for Article 68.  

1 Implementation data per sector presented hereafter include Article 69 expenditure that have been prolonged until 2012. 

20 

  (1) (a) (i) TF important for the environment (1) (a) (v) Agri-environment (1) (a) (ii) Quality (1) (b) Disadvantaged TF (1) (a) (iii) Marketing (1) (a) (iv) Animal welfare (1) (c) Land abandonment (1) (d) Insurance  
 
                                                      
Evaluation of Article 68 measures 

Figure 3: Distribution of Article 68 expenditure by sector in the 10 national study Member States 

Total expenditures in all 10 MS (2010-2012) 

Olive 2%

Tobacco 5%

Sugar 2%

Durum wheat2%

Animal 
welfare 1%

Sheep and goat
15%

Other plant productions
3%

Crop diversification
18%

Cross sectoral measures 
22%

Beef
12%

Dairy
17%

Average yearly expenditures in all 10 MS (2010-2013*) 

Grassland and extensive 
livestock  1%

100%

90%

80%

70%

60%

50%

40%

30%

20%

10%

0%

Other plant productions

Sugar

Durum wheat

Olive

Tobacco

Crop diversification

Cross sectoral measures

Grassland and extensive livestock

Dairy

Beef

Sheep and goat

Animal welfare

*Except for France where data was available only for 2010-2012. Data was also lacking for specific measures in: 
- Poland: the insurance measure implemented from 2012 has been approximated by the budget notified to the EC; 
- Spain: the 2013 data for sugar, tobacco and crop diversification measures has been approximated by the 2012 expenditure. 
Source: Paying agencies (GR, HU, IT, PL, SP, PT, NL) or agriculture ministries (DK, FI, FR) 

Member States used about 48% of the expenditures for the livestock sector, almost equally distributed 
between the dairy sector, sheep and goats and beef, as well as 2% for animal welfare and grassland 
system.  Then  around  21%  of  the  budget  concerned  cross-sectoral  measures,  mainly  insurance  and 
measures supporting organic farming. Consequently, Specific Support for crop sectors only represented 
about  30%  of expenditures,  of  which  about  17%  went  to  crop  diversification  measures  which is the 
agricultural  practice  the  most  supported  under  environment  measures.    The  rest  of  the  expenditures 
concerned specific crops (tobacco, olive, durum wheat…) mainly under the quality objective (Article 
68 (1)(a)(ii)).  

21 

 
 
 
 
Evaluation of Article 68 measures 

3.3  OVERVIEW  OF  IMPLEMENTATION  IN  TEN  MEMBER 

STATES 

3.3.1  IMPLEMENTATION OF ARTICLE 68 IN FRANCE 

In France, Article 68 has to be analysed within the global framework of the CAP Health Check. In 2009, 
the French authorities wanted to rebalance the payment entitlements in favour of grassland livestock 
systems and sensitive areas. This is because they considered that the “historical model” applied was 
granting  a  very  high  level  of  support  to  cereal  growers  and  wanted  the  SPS  to  be  redistributed  to 
livestock  sectors  with  more  environmental  and  social  values.  For  this  purpose,  they  decided  to 
implement Article 63 (1) to enable the increase of the payment entitlements of the grassland livestock 
systems. To counterbalance the amount retained from the cereal growers, a retention of 25% was also 
applied to the coupled premium for maintaining suckler cows, in order to fund Article 68 according to 
the Article 53 of the regulation. 

In this general context, the Article 68 was implemented with the following objectives: 

-  To prevent the disappearance of sectors that had undergone the decoupling of their support 
(sheep and goat, cattle, durum wheat, tobacco, dehydrated fodder (from 2012), potato starch 
(2014 only)), with a priority towards the sheep sector that was severely damaged, 

-  To encourage the development of organic farming (transfer of the conversion and maintenance 

support from Pillar II to Article 68), 

-  To  encourage  the  management  of  risks  (implementation  of  support  for  crop  insurance  and 

environmental and sanitary mutual fund). 

As presented in the map hereunder, North of France has mainly mobilised the support for legume crops 
and crop diversification measure, whereas livestock support represented a significant share of Southern 
and  mountainous  regions.  Cross-sectoral  support  (insurance  and  organic  farming),  that  represent  a 
significant share of the budget, were spread all over the country. In terms of amounts, if data for the 
whole period were available, they would probably show that livestock areas received the major share of 
the budget since the crop diversification measure was opened only in 2010. 

1 Out of the €1.2 million still to be decoupled from the cereals sector, around €600 000 were re-allocated to revalorize the payments entitlements 
of the grassland livestock system according to a minimum stocking density.  

22 

 
                                                      
Evaluation of Article 68 measures 

Figure 4: Distribution of Article 68 expenditure by sector and region in France (2010-2012) 

Durum wheat

Tobacco

100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%

Dairy

Beef

Crop diversification

Cross sectoral measures

Sheep and goat

Source: Paying agency 

3.3.2  IMPLEMENTATION OF ARTICLE 68 IN ITALY 

Italy implemented three measures under Article 68: 

  Article 68 (1)(a)(ii): Improving the quality of agricultural products. 
  Article 68 (1)(a)(v): Specific agricultural activities entailing additional agri-environment benefits. 
  Article 68 (1)(d): Contributions to crop, animal and plant insurance premiums. 

The budget breakdown of the quality improvement measure, was the result of a negotiation between 
Regions, each region focused on its own most important sectors from an economic point of view: beef 
in Piemonte, Lombardia and Veneto; sheep and goats in Sardegna and Sicilia; sugarbeet in Veneto and 
Emilia-Romagna;  milk  in Lombardia, Veneto and  Emilia  Romagna;  tobacco in  Veneto,  Umbria  and 
Campania; olive oil in Puglia, Calabria and Toscana; and finally, floriculture in Liguria.  

Concerning the environmental measure (crop rotation), the aim was to maintain durum wheat production 
in traditional production areas (Centre-South), where production had been on a decreasing trend since 
the reform of 2003, in a sustainable way (preventing monoculture). 

Finally,  about the insurance  measure,  given the difficulties  in  the  last  national  budgets  to  cover  this 
policy implemented in Italy since the ‘80s, it was decided to use the opportunity offered by Article 68 
to partially cover the financial needs. 

23 

 
 
 
 
 
 
 
 
 
 
Evaluation of Article 68 measures 

Figure 5: Distribution of Article 68 expenditure by sector and region in Italy (2010-2013)* (1) 

100%

Other plant productions
90%
Sugar
80%
Durum wheat
70%
Olive
60%
Tobacco
50%

40%
Crop diversification
30%
Cross sectoral measures
20%
Grassland and extensive livestock
10%
Dairy
0%
Beef

Sheep and goat

Animal welfare

Source: Paying agencies 

Sectors  supported  under  the  quality  measure  were:  beef  meat,  sheep  and  goat  meat,  olive  oil,  milk, 
tobacco, sugar and floriculture. This measure accounts for 47% of the total Article 68 budget. Within 
the quality measure, 33.8% of the budget of the measure concerned the beef meat sector and 26.4% the 
milk sector. In total, around 66% of the quality measure budget concerned livestock’s sectors (beef, milk 
and sheep and goat). 

Concerning the regional distribution, financial resources allocated to the beef, milk and sugar sectors 
were concentrated in the Northern regions (Veneto, Lombardia, Piemonte and Emilia Romagna). Vice 
versa,  resources  allocated  to  sheep  and  goat  meat,  olive  oil  and  to  the  environmental  measure  were 
concentrated  in  the  Centre-Southern  regions:  sheep  and  goats  in  Sardegna  and  Calabria,  Puglia  and 
Toscana for olive oil. 

In the tobacco sector, financial resources were concentrated in four regions (Veneto, Umbria, Toscana 
and Campania).  

3.3.3  IMPLEMENTATION OF ARTICLE 68 IN SPAIN 

Since the 2003 reform, the Spanish authorities have been concerned about a possible risk of land and 
livestock  production  abandonment  in  large  areas.  In  2009,  the  objectives  of  Article  68  were  still 
established so as to reflect this concern:  

1  In  Italy  there  is  a  national  Paying  Agency,  AGEA  and  several  Regional  Paying  Agencies  (AGREA,  AVEPA,  OP  Lombardia,  ARTEA, 
ARPEA, APPAG, OPPAB, ARCEA). Central AGEA has a double role: a coordination role and a role of Paying Agency for the regions  for 
which  there  is  no  regional  paying  agency.  AGEA  Paying  Agency  and  Regional  Paying  Agencies,  each  one  for  the  region/s  of  their  own 
territorial jurisdiction, are responsible for payments. Paying agency data for the insurance measure is available only at the national level. 

24 

 
                                                      
 
Evaluation of Article 68 measures 

- 

- 

- 

to reinforce productive activity in areas with natural handicaps or environmental problems. Land 
abandonment, and its negative impacts on erosion, landscape degradation, biodiversity loss, soil 
degradation and fire risk, are of great concern in Spain; 
to  maintain  productive  activity  in  intensive  sectors  with  special  territorial  impacts  (cotton, 
tobacco and sugar): these activities are only feasible with strong policy support; 
to complete the adjustment of sectors in crisis or structural problems, by setting out appropriate 
agricultural policy instruments (nuts, legumes, dairy, cattle, sheep and goats). 

Thus, from the time of decoupling, authorities kept on implementing a model in which the aid was kept 
coupled as much as possible. The selection of sectors and measures for Article 68 was based on: 

-  Sectors  supported  and  measures  implemented  under  old  Article  69.  In  fact,  Article  68  is 
considered the continuation of Article 69 and maintains most of the support given in the 2006-
2009 period to some sectors 

-  Sectors adversely affected by decoupling (2003 CAP reform) and other policies (abandonment 

of milk quotas). 

Figure 6: Distribution of Article 68 expenditure by sector and region in Spain (2010-2013*) 

Other plant productions

Tobacco

Sugar

100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
Beef

Dairy

Crop diversification

Sheep and goat

* Missing data for sugar, tobacco and crop diversification measures in 2013 has been approximated by the 2012 expenditure. 

Source: Paying agencies 

There has been no predetermined distribution of resources by region. The amount of aid received by 
each region depends on the number of hectares or livestock eligible for aid and reflects the sectoral 
specificity  of  each  region.  The  distribution  also  reflects  the  concern  about  land  abandonment  since 
regions most at risk received the most significant amounts of Article 68 expenditures. 

25 

 
 
 
 
 
 
 
 
 
 
 
 
 
Evaluation of Article 68 measures 

3.3.4  IMPLEMENTATION OF ARTICLE 68 IN HUNGARY  

Within the framework of SAPS applied uniformly over the country for all types of agricultural systems, 
the strategy consisted in using Specific Support under Article 68 to introduce more “targeted measures”. 
The selection of the supported sectors was made according to: 

- 

- 

their  impact  as  labour  intensive  sectors,  providing  employment  and  thus  contributing  to  the 
sustainability of rural areas; 
the phasing-out of national coupled top-ups (CNDP) that would threaten the maintenance of 
these sectors. 

The  supported  sectors  (dairy,  rice,  tobacco,  bovine  and  ovine,  fruit  and  vegetables)  are  all  labour 
intensive sectors providing employment in rural areas, as opposed to crops produced via mechanized 
farming spread nationwide. Among these sectors, dairy, rice and tobacco were subject to the phasing 
out of national coupled top-ups by 2012. 

Figure 7: Distribution of Article 68 expenditure by sector and region in Hungary (2010-2013) 

100%
90%
Other plant productions
80%
70%
Tobacco
60%
50%
40%
Dairy
30%
20%
10%
Beef
0%

Sheep and goat

Source: Paying agency 

Apart from dairy (the most supported sector), the financial resources were allocated according to the 
size of sectors. The tobacco sector, localised in northeast Hungary and characterized by strong social 
issues, was heavily supported through the setting-up of a Restructuring Programme and an increase in 
the  entitlements  value  (Article  68(1)(c)).  The  remaining  amount  was  devoted  to  bovines,  fruit  and 
vegetables, depending on the number of animals or hectares eligible. 

3.3.5  IMPLEMENTATION OF ARTICLE 68 IN GREECE 

Article 68 implementation in Greece was based on the following principles: 

-  Continuation of the previous Article 69 support: most of the sectors formerly supported under 

Article 69 were now eligible for Article 68; 

26 

 
 
 
 
 
 
 
 
 
 
 
 
Evaluation of Article 68 measures 

-  Concentration  of  the  resources  towards  the  LFA  and  mountainous  areas  to  ensure  the 
maintenance of farm holdings and the enhancement of pasture lands, through support granted 
to livestock farming in these areas (beef and veal, sheep and goats). 

Cross-sectoral concerns for the selection of the sectors/measures were also: 

- 

- 

economical  /  marketing  with  a  view  toward  granting  support  to  sectors  with  high  potential 
export value and downstream qualitative parameters issues (PDO/PGI olive oil, durum wheat) 
or contributing to relocate the reproduction of bovines of pure meat breeds (beef and veal, sheep 
and goat). 
environmental  with  the  eligibility  of  producers  implementing  integrated  management 
system/organic standards (olive, durum wheat) and the conservation of indigenous breeds (some 
of which with particular characteristics, producing high-quality meat from poor mountainous or 
LFA pastures). 

Figure 8: Distribution of Article 68 expenditure by sector and region in Greece (2010-2013) 

Durum wheat

Olive

Cross sectoral
measures

Beef

100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%

Sheep and goat

*The cross-sectoral measure “Allocation of new entitlements to farmers of mountainous and less favoured areas” is not 
represented because implementation data was not available at the regional level. 

Source: Paying agency 

The  distribution  is  characterized  by  high  share  of  Specific  Support  granted  to  livestock  in 
LFA/mountainous areas that prevail in Greece. 

The allocation of the resources were estimated according to the forecast of the eligible beneficiaries and 
surfaces/animals. Furthermore, the previous experience under Article 69 was also taken into account to 
assess the level of the support.  

3.3.6  IMPLEMENTATION OF ARTICLE 68 IN POLAND 

In 2009, the Polish authorities were reluctant to implement Article 68 because they were expecting 
coupled support to be phased out. As a consequence, the implementation of Article 68 was essentially 
driven by the fear of distortive effects due to sectors supported in other MS. The objectives were: 

- 

to avoid trade distortive effects by supporting the same sectors as those benefiting from Article 

27 

 
 
Evaluation of Article 68 measures 

- 

- 

68 measures in other MS; 
to support declining production in mountainous south-east regions facing high structural costs 
(dairy, sheep); 
to focus  on  sectors  with  high  social and  environmental  value (tobacco,  dairy,  sheep, protein 
crops). 

The  main  idea  was  that  given  the  budget  constraints  (coupled  support  capped  at  3.5%  of  national 
ceiling), it was important to target a few sectors and set restrictive eligibility criteria in order to enable 
the  measures  to  be  effective.  The  sectors/regions  supported  were  all  selected  because  they  were 
undergoing  a sharp  decline  in  production:  small-scale  dairy  farmers  and sheep  producers  in  specific 
regions, the tobacco sector severely impacted by the 2004 reform, protein crops. 

Figure 9: Distribution of Article 68 expenditure by sector and region in Poland (2010-2014)* 

100%

Tobacco
80%

60%
Crop
diversification
40%

20%
Dairy

0%
Sheep and goat

* Data for the insurance measure implemented from 2012 was not available. Missing data for tobacco in 2014 has been 
approximated by the 2013 expenditure. 

Source: Paying agency 

The Article 68 support specifically targeted the south-east regions of Poland, made up of mountainous 
areas with traditional agricultural sectors. Article 68 was implemented in those regions through support 
to dairy and sheep sectors, which play a social role and are key sectors for sustainable land management, 
as well as to the tobacco sector which is highly labour-intensive and contributes significantly to the local 
economy. 

3.3.7  IMPLEMENTATION OF ARTICLE 68 IN FINLAND 

Sectors that are considered the most threatened in Finland are ruminants, starch and oilseeds and protein 
crops. Therefore Finland chose to implement 3 types of measure under Article 68: two measures on the 
maintenance  of  environmental  practices  in  crops  (1(a)(i));  two  measures  for  the  maintenance  of 
vulnerable bovine sectors (1(b)) and one measure on the quality of lamb meat (1(a)(ii)). The targeted 
needs were the following:  

 

68(1)(a)(i) - Protein and oilseed premium, Starch potato premium: The objective was mainly 

28 

   
 
Evaluation of Article 68 measures 

to  balance  the  production of  oilseeds  and  protein  crops  and  starch  potatoes as  regards the 
cereals ones. Both measures were threatened by the cereal monoculture and the loss of the 
coupled payment.  

The use of Article 68 1(a)(i) was justified because these specific crops are known to be beneficial 
to  the  environment  (when  produced  properly)  and  because  it  participated  in  limiting  of  the 
development of cereal monoculture. 

 

 

68(1)(a)(ii) - Quality Premium For Slaughtered Lambs: The Finnish lamb sector is a small 
sector  (production  of  around  1million  kg/y).  It  used  to  be  a  much  bigger  sector  before 
Finland’s accession to Europe and the ensuing increase in competition. With this measure, it 
was  expected  to  increase  the  domestic  production  of  lamb  and  to  lower  the  commercial 
deficit.  
68(1)(b) - Bovine premium, dairy cow support: The needs were to maintain the bovine sector 
that suffers from high production costs, especially in the southern part of Finland. The higher 
level of national support in the northern regions due to the Nordic scheme and the higher 
competition of cereals makes the situation harder for livestock in the South. 

  Dairy sector: Need to anticipate the end of quotas and the decreasing number of milk farms.  
  Beef sector: Need to stabilise the production because of low prices of meat (the two biggest 
slaughterhouses are effective cooperatives but work only in the domestic market and face the 
competition of foreign meat). 

Because of exceptional local conditions, Finland was given the opportunity to use 10% of the maximum 
national direct support provided by the EU as coupled support. Finland allocated a budget of 196 million 
euros to three types of measure under Article 68 (3% of the EU total budget) during the 2010-2013 
period. 85% was spent on measures addressing the specific disadvantages of the beef, veal and dairy 
cow sectors. 

Figure 10 Distribution of Article 68 expenditure by sector in Finland (annual averages, 2010-2013) 

3%

1%

9%

18%

Support for beef and veal
production, 68 1 b

Support for milk production, 68
1 b

Support for quality for
slaughtered lambs, 68 1 a (ii)

Support for protein and oilseed
crop production, 68 1 a (i)

69%

Source: Paying agency 

3.3.8  IMPLEMENTATION OF ARTICLE 68 IN PORTUGAL 

The following principles guided the implementation of Article 68 in Portugal: 

  To maximise the use of the available funds without reducing other direct payments and without 

using the national SPS reserve; 

  To encompass a large diversity of sectors and to focus the support on fragile sectors; 
  To ensure coherence with the Rural Development Programme, avoiding overlapping objectives 

and commitments; 

  To optimise the allocation of resources according to the regulatory constraints. 

In addition, the selection of the measures was mostly based on three justifications: 
1.  Ensure the continuity, sometimes with a few changes, of the measures existing under the previous 
Article 69 of Reg (EC) n.º 1782/2003 (quality measures for cereals and rice, olive oil and table 
olives and meat and “Cattle and sheep and goats autochthonous breeds”, under Art. 68.1.(a)(1)); 
2.  Reintroduce AEMs that had been discontinued in the transition from RURIS (2000-2006 RDP) to 
PRODER (2007-2013 RDP) and that were found relevant in order to preserve extensive farming 
systems (“Protection of the national olive oil heritage” and “Extensive animal production systems”) 

29 

 
Evaluation of Article 68 measures 

3.  Take into account specific needs of two given sectors: tomatoes for processing and milk. 

Sectoral measures were focused on contributing to increase producer organisation, which was very low 
in most sectors, and to improve product quality. Besides these stated needs and objectives, the measures 
had also the goal of supporting producer income in these sectors and to respond to specific demands of 
sectors that fell more vulnerable or less supported by the existing measures. As such, the number of 
measures  and  sectors  supported  was  fairly  high  (cereals,  rice,  olive  oil,  meat,  tomato,  milk)  when 
compared to the available national budget. 

Figure 11: Distribution of Article 68 expenditure by sector and region in Portugal (2010-2013) 

100%Other plant productions
90%
80%
Durum wheat
70%
60%
Olive
50%
40%
Grassland and extensive
30%
livestock
20%
Dairy
10%
0%
Beef

Sheep and goat

Source: Paying agency 

3.3.9  IMPLEMENTATION OF ARTICLE 68 IN DENMARK 

Denmark chose to implement the Specific Support mostly through the environmental measures (1(a)(i) 
and 1(a)(v)). In 2012 the measure 1(b) was introduced for the beef sector. 

As regards the environmental measures, Denmark faced an increase of demand for support from the 
farmers, in particular for the agri-environment measures (AEM) under the RDP. Since the resources did 
not suffice, it was decided to use the opportunity of Article 68 to supplement AEM under the RDP. In 
this way it became possible to move demand for support from the RDP to Article 68. Therefore, the 
Danish environmental measures are rather trans-sectorial. As such the global objectives targeted for the 
environmental measures were the followings:  

 

 

 

1(a)(i) Establishment and production of perennial energy crops: to develop the production of 
renewable energy with annual support to establishment 10,000 ha each year.  
1(a)(i) Establishment of organic fruit and berry plantations: to support the development of 
organic agri- and horticulture.  
 1(a)(i) Crop rotation; 1(a)(v) Extensive farming; 1(a)(v) Extensive maintenance of pasture 
areas: to increase  biodiversity  and  a reduce  pressure on  the  environment  and  nature  from 
agriculture.  

As for the Beef meat production measure (1b), it was introduced in 2012 as a follow up on the former 
Male Bovine Premium Measure in order to maintain meat and avoid transportation of male calves when 

30 

 
 
Evaluation of Article 68 measures 

exported (as assessed from an animal welfare perspective). The measure was designed so that the support 
granted  would  be  sufficient  to  make  the  production  viable  for  producers  slaughtering  more  than  5 
animals per year.  

Even  though  the  environmental  measures  represented  the  majority  of  measures  implemented  in 
Denmark (6 out of 7), the beef meat production measure accounted for about 30% of the global Article 
68 budget between 2010 and 2013. The measures 1(a)(i) were not much called for compared to the agri-
environmental measures.  

Figure 12 Distribution of Article 68 expenditure by measure in Denmark (annual means, 2010-2013) 

3% 0% 1%

1%

30%

10%

55%

Support for the establishment of perennial energy crops,
68 1 a (i)
Support for the establishment of organic fruit plantations,
68 1 a (i)
Support for production of perennial energy crops, 68 1 a
(i)
Support for crop rotation, 68 1 a (i)

Support for extensive farming, 68 1 a (v)

Support for extensive maintenance of pasture areas, 68 1
a (v)
Support for production of beef, 68 1 b

Source: Paying agency 

3.3.10  IMPLEMENTATION OF ARTICLE 68 IN THE NETHERLANDS 

The Netherlands distinguish itself from the other Member States in two ways: (1) it is the only Member 
State who used the animal welfare measure (since 2010) and (2) it mostly used the Article 68 funds for 
investments measures. 

Between 2010 and 2014, the Netherlands chose to implement 11 measures under Article 68, 4 of them 
focused on the enhancement of animal welfare (1(a)(iv)) and 4 on environment matters (1(a)(i)). The 
remaining measures were used to support the vulnerable sheep and goat sector (1(b)) and for weather 
insurance (1(d)). For each measure, the needs targeted were the followings:  

 

 

1(a)(iv) - Animal welfare is considered to be an important issue in the Netherlands. The objective 
is to incite the livestock sector to enhance their practices and holdings to go above and beyond 
the regulatory requirements. The RDP budget being limited, Article 68 enabled them to create an 
extra budget for animal welfare. 
1(a)(i) - The motives for the environmental measures are less homogeneous, but we can identify 
3 different situations : 

- 

Investment for precision farming and sustainable storage / maintenance of the fibre plant 
sector: these measures were implemented in 2012 and 2013 because of the demands of 
the vegetal sectors that felt let down in comparison to the animal sector. As regards the 
fibre plants measure, the main driver was the decoupling of the aid in 2012 that threatened 
the sector. 

-  Water  transport  allowance  (WTA):  this  measure  took  over  the  former  water  transport 

premium for North Holland provinces that ceased in 2009.  

-  Manure processing measure: this measure was implemented in 2014 and aimed at easing 
the implementation of the 2014 Dutch regulation on mandatory manure processing. 

 

 

1(b) - The Dutch sheep and goat sector is very small and considered vulnerable notably because 
it faced significant sanitary issues. The authorities asked for an individual I&R of the animals 
which enable better monitoring of the herd but increase the cost for the farmer. 
1(d)  -  The  authorities  were  facing  many  demands  from  the  vegetal  sectors  regarding  the 
compensation of damages caused by weather on their production. Before Article 68, the system 

31 

 
Evaluation of Article 68 measures 

in place was complicated since they had to treat each demand one by one. 

The  investment  measures  benefited  from  most  of  the  overall  expenditure  (64.4%  of  71,805,465€) 
between  2010  and  2013.  For  instance,  45%  of  the  amount  was  allocated  to  the  sustainable  animal 
housing measure (which accounted for 94% of the amount granted to the Animal Welfare measures). 
However,  it  only  concerned  2%  of  Article  68  beneficiaries,  who  were  selected  to  realise  highly 
innovative and expensive investments (an average support of 101,000 €/farmer per year).  

Figure 13 Distribution of Article 68 expenditure by measure in the Netherlands (annual average, 2010-
2013) 

4,00%

7,27%

68 1b I&R sheep and goat measures I: Contribution towards renumbering costs

68 1b  I&R sheep and goat measures II: Contribution towards costs of
investments over and above the statutory minimum
68 1aiv - Animal Welfare I: Investment scheme for fully sustainable and animal
friendly livestock housing
68 1aiv - Animal Welfare II: Promotion of animal-friendly products

68 1aiv - Animal Welfare III: Management activities

17,84%

18,81%

3,18%
1,01%

0,65%

1,09%

1,19%

44,96%

68 1aiv - Animal Welfare IV: Investment scheme for alternative floors in calf
husbandry
68 1ai - Upkeep of fibre plants

68 1ai - Water transport allowance or ferrying allowance

68 1ai - Investments scheme I for precision agricultural equipment and
sustainable storage
68 1d - Insurance I: Comprehensive weather insurance

Source: Dutch Paying Agency (RVO) data, 2015 

32 

 
 
 
Evaluation of Article 68 measures 

4  THEME  1  -  OBJECTIVE  SETTING:  EVIDENCE  OF 
THE  TARGETING  OF  SPECIFIC  SUPPORT  AND 
COHERENCE WITH OTHER POLICIES 

EQ 1 explores to what extent the options chosen by Member States reflected the needs identified and 
objectives set by Member States, and which could not (or not to a sufficient extent) be met by other 
instruments of the CAP. 

4.1  COMPREHENSION OF THE QUESTION 

Out  of  the  nine  objectives  pursued  by  Article  68  Specific  Support,  only  one  was  subject  to  an 
analysis of the compliance with the legislation by the EC ((1)(a)(v) specific agricultural activities 
entailing  additional  agri-environment  benefits).  For  the  others,  the  EC  could  only  make  comments 
following the notification of the measures. Thus Member States benefited from considerable room 
for manoeuvre in implementing Article 68. 

In 2013, a report of the European Court of Auditors1 concluded that the Specific Support scheme was 
implemented by certain Member States with insufficient justification and identification of the needs to 
be  met.  Moreover,  it  highlighted  that  decisions  concerning  budget  allocation  between  measures  and 
sectors (including non-supported ones) were insufficiently justified. Finally, the report concluded that 
eligibility criteria were not always well defined in order to meet the needs and objectives identified. The 
ECA underlined that most of the support in place was not sufficiently discriminated or targeted. For the 
objectives that aim at supporting specific types of farming, criteria had to be defined in order to target 
the  aid  (objectives  (1)(a)(i),  (1)(a)(v),  (1)(b),  (1)(c)).  On  the  other  hand,  other  objectives  aim  at 
supporting improvements to practices for the whole population of farmers ((1)(a)(ii), (1)(a)(iii), (1)(iv)) 
but should minimise deadweight effects for farmers who already implement these practices.  

The first evaluation question deals with these various issues. It first asks to what extent the Member 
States’ decision to implement Article 68 was relevant to meet the needs identified. It requires an 
examination of the extent to which the objectives of the measures implemented are adapted to meet 
needs identified by the Member States, but also if measures are well targeted in order to achieve this 
objective  (beyond  the  strict  definition  of  relevance).  Indeed,  a  lack  of  proper  targeting  can  lead  to 
“dilution” of available funds and reduce their results. 

Secondly,  EQ1  asks  about  the  supplementary  role of  the  measures from  the point  of  view  of their 
design  (their  effective  supplementary  role  being  analysed  in  EQ6).  It  thus  studies  whether  other 
measures of the CAP could have met the needs with greater effectiveness and whether implementation 
of Article 68 was justified. 

Finally, the question asks for an assessment of the coherence of the measures. According to Article 38 
of Reg. (CE) 1120/2009, Member States shall ensure that Specific Support measures are coherent with 
(a)  measures  implemented  under  other  Community  support  instruments,  (b)  other  Specific  Support 
measures  and  (c)  measures  funded  by  State  aids.  In  particular,  Member  States  must  ensure  that  the 
Specific Support scheme does not interfere with the proper functioning of the measures cited above. 

1 Common Agricultural Policy: Is the specific support provided under Article 68 of Council regulation (EC) No 73/2009 well designed and 
implemented?, ECA Special Report N°10, 2013 

33 

 
                                                      
Evaluation of Article 68 measures 

4.2  METHODOLOGY AND LIMITATIONS 

4.2.1  RELEVANCE AND DESIGN OF THE MEASURES 

We first analyse whether the objectives of the measures are relevant to the needs. However, the 
needs (1) to be addressed by the measures were not required as such in the notifications submitted to the 
EC  (1).  Hence,  in  order  to  judge  the  relevance  of  the  objectives,  interviews  were  conducted  during 
National Studies to identify the needs to which Article 68 measures were supposed to respond. This EQ 
analyses whether the objectives  of Article 68 were designed to address the needs identified and thus 
whether the Specific Support was the right instrument to use. For environmental measures, the mapping 
of environmental issues required for the 2014-2020 RDP was used as a basic environmental assessment 
in order to judge whether there was a need for Article 68 measures (1)(a)(i) and (1)(a)(v).  

Then we check whether the objectives (2) of the measure are described in the notifications. This “back 
office”  analysis  also  includes  the  analysis  of  the  letters  containing  comments  sent  by  the  EC  to  the 
Member States to reply to their measures notification. In judging the relevance of the objectives, we also 
try to judge whether these are SMART objectives (2). 

A second step is to provide a judgement on whether the design of the measures can be expected to 
meet the needs. To this end, the targeting (3) of the measures is considered in order to judge if specific 
types of farming are supported and/or if deadweight effects are minimised. To do so, we consider the 
features of the measures including the selection criteria and other conditions, as well as the share of the 
sector that benefited from the support.  

The level of support is also assessed in order to judge its coherence with the significance of the needs to 
be met. The way the aid rate (4) was defined is taken into account as well as the total budget allocated 
to the measure. 

Finally, we judge the rationale (5) of the various types of measures set up by Member States. The extent 
to which the targeted results are expected to be viable after the end of the measure is taken into account 
for this analysis. The assessment of this criterion builds on the assessment of the other criteria and thus 
can be used as final advice on the measure. 

Generally, the indicators (needs, objectives, aid features, rationale) are assessed through a 3-level grid 
depending  on  the  degree  of  relevance.  For  most  of  the  indicators,  the  assessment  depends  on  the 
following judgements: 
             The indicator is judged poorly relevant; 
             The indicator is judged relevant to some extent; 
             The indicator is judged relevant. 
When some elements are not stated in official notifications to the EC, the knowledge of the Member 
State context, deepened by local experts during the National Studies, is mobilised in order to provide a 
sound judgement about the indicator’s relevance. 

Given the high number of measures, we present the results of the analysis only for the Member States 
where National Studies were conducted (3) and for the main measures (which represent together 80% of 
the budget). The cases of the various Member States appear in descending order with respect to their 
implemented  budget.  For  each  Member  State  under  National  Study,  a  general  judgement  on  the 
relevance is provided based on its global strategy for the implementation of Article 68 and the budget 
allocation between measures. A judgement on the other measures implemented is also provided. 

In the other Member States where no National Study was planned, we present a simplified analysis of 
15 measures selected depending on their budget. Since the research of the needs could not be carried 

1 See in Annex IV of Reg. (EC) 1120/2009 the various elements that had to be notified for each measure by Member States to the EC. 
2 Specific, Measurable, Achievable, Relevant and Timed 
3 The case of The Netherlands is treated in the EQ4 concerning Animal Welfare measures. 

34 

 
                                                      
Evaluation of Article 68 measures 

out, we could only judge the design of the measures and the budgetary allocation between them based 
on the notifications to the EC and the corresponding answers. 

4.2.2  SUPPLEMENTARY  ROLE  AND  COHERENCE  WITH  OTHER 

SUPPORT SCHEMES 

Other support schemes existing at EU level that share the same objectives as Article 68 and are likely 
to meet the needs identified are analysed. For each type of support (support under CMOs, RDR for 2007-
2013,  CNDPs  and  other  CAP  measures),  the  supplementary  role  and  coherence  of  Article  68  are 
assessed. Particular attention is paid to Rural Development measures that might share similar objectives. 
The coherence between the agri-environment measures defined in the Rural Development Programmes 
and measure 68 (1)(v) for specific agricultural activities entailing additional agri-environment benefits 
is also addressed. 

This exercise was conducted at the level of the Member States. National Studies sought to assess why 
Member States decided to implement Article 68 rather than other existing support schemes and what the 
strengths of Article 68 are compared to other measures to achieve the stated objectives. The National 
Studies  were  also  used  to  list  all  the  other  measures  implemented  in  the  concerned  sectors  since 
coherence was discussed during the interviews. Then all information in the notifications is used in order 
to  understand  how  these  instruments  fit  together  and  what  synergies/  contradictions/  overlap  exist 
between them.  

As for the relevance issue, the analysis of the supplementary role and coherence is also carried out for 
Member  States  where  no  National  Study  was  conducted  and  for  the  same  measures.  In  these  cases, 
information  from  the  notification  files  is  analysed.  The  quality  of  the  provided  information  is  thus 
heterogeneous among the MS. 

The main sources of information used are:  

- 

the back office analyses on the basis of  

  notifications  submitted  by  Member  States  to  the  EC  and  EC  replies,  processed  in  a 

database, which content is presented in detail in the Tools section, 
reports of the Member States on the implementation of the measures; 
interviews and National Studies (results of interviews, data and information collected). 

 

- 

4.3  ANSWER TO EQ1 

4.3.1  RELEVANCE OF THE CHOICE OF THE SECTORS SUPPORTED 

Table 6: Process for the choice of sectors supported in each visited Member State 
FR  The  choice  of  the  sectors  supported  was  done  at  the  Ministry  level,  based  on  FADN  simulations  that  were  followed  by 
consultation  sessions  with  all  the  sectors.  Generally,  the  objective  was  to  rebalance  the  payments  in  favour  of  grassland 
livestock  systems  and  sensitive  areas.  The  SPS  retention  that  mainly  affected  cereal  producers  was  counterbalanced  by 
support under Article 68 during the first year of implementation and a retention on the still coupled suckler cow premium. 

IT  The strategy for the Specific Support implementation was determined by mediation, according to the needs expressed by the 
Regions. The budget breakdown of the quality improvement measure was the result of negotiation between Regions; each 
Region focused on its own most important sectors from an economic point of view. 

ES  As was the case for Article 69, the Ministry of Agriculture agreed with the regional governments on the sectors that would 
be supported in the framework of the sectoral Conference on Agriculture and Rural Development. The supported sectors 
were almost the same as under Article 69 and there were no sectors that asked for support and did not get it. 
Nationwide  agricultural  and  interprofessional  organisations  were  consulted  on  the  design  of  the  measures  even  though, 
according to them, their participation was smaller than what it had been in other agricultural measures. 
In Hungary, the Article 68 measures were designed by the Ministry of Rural Development, in close co-operation with the 
stakeholders’ representatives (i.e. Dairy Board, FruitVeb Fruit and Vegetable Board, Association of Tobacco Growers).  

HU 

35 

 
 
Evaluation of Article 68 measures 

In 2009, there was a consensus between stakeholders to grant the share of coupled support (3.5% of the national ceiling) to 
the dairy sector, which was facing an important crisis at the EU level, characterized by a serious drop in milk prices1. 
EL  The  decisions  on  the  selected  sectors  and  measures  were  taken  at  the  Ministry  level,  except  for  durum  wheat  where 

stakeholders were consulted. Other cereal sectors had asked for support (soft wheat, barley…). 

PL  The Ministry of Agriculture and Rural Areas operated on the basis of analyses provided by various institutions and on the 
basis of consultations with other ministries as well as branch organisations. It formulated proposals which were then subject 
to public consultations. However since the issue was well recognised, the Ministry did not make any special arrangements in 
this respect. The discussion had already been ongoing for some time. The proposals were quite well received by concerned 
parties (including farmers). There were also consultations with AMA and ARMA on issues of management and control. 
FI  The choice of the measures and their design were made as a consensus between the government, the farmers’ representatives 

and the paying agency. 

PT  The  measures  were  defined  by  the  Ministry  for  Agriculture  with  the  support  of  IFAP  and  the  participation  of  other 
administrative  bodies  (such  as  the  management  authority  for  the  RDP).  As  for  the  sector  stakeholders,  the  main  five 
agricultural confederations, as well the national agri-food industries’ federation, were consulted.  
Given the significant subsidiarity in the definition of measures, the stakeholders proposed the inclusion of a large number of 
measures and sectors. A few of them were considered but finally not supported. 

DK  Even though the different stakeholders’ demands were taken into account, the final decision remained political and followed 
the main environmental national directions. However, the Farmers Association (L&F) took a strong position on the request 
that the funding of the meat production measure be financed with money from the previous 2005 cattle sector envelope. 

NL  The decision for implementing each measure was taken by the government, even though driven by the demands of farmers. 

Source: Interviews 

In most cases, the sectors were consulted on the implementation of Article 68 and there are only a few 
cases of sectors that demanded support and did not get it. In this last case (FR, EL, DK), the governments 
consulted  the  sectors  but  took  their  final  decisions  depending  on  strategies  at  the  national  level. 
However, in Denmark, the beef sector was strong enough to negotiate for significant support. Some 
Member States reported that they decided on the basis of economic studies (FR, PL). In a few Member 
States, there was a consensus among farmers about the sectors to be supported by Article 68 (HU, FI).  

In  federal  Member  States  (IT,  ES),  the  choice  of  the  measure  had  to  be  agreed  with  the  regional 
governments. In Spain, this resulted in a choice of sectors quite similar to those in 2004 for Article 69. 
In Italy, the choice of the supported sectors resulted from a negotiation among the regions and led to a 
fragmentation of the resources among a large number of sectors. The negotiation with sectors in Portugal 
also resulted in such fragmentation. 

4.3.2  RELEVANCE OF MEASURES IN EACH MEMBER STATE 

4.3.2.1  Relevance of measures in France 

The general strategy of the French government at the time of the Health Check was to rebalance direct 
payments from the cereals sectors, which were generally doing well and had been strongly supported in 
the past, resulting in high levels of SPS entitlements, towards grassland livestock systems and sensitive 
areas as well as more transversal objectives (development of organic farming and risk management). 
This strategy was reflected by the implementation of the Specific Support. 

Measure 

1(b)  Sheep 
and goat 
support 
1(b) 
Milk in 
mountain 
areas 

Table 7: Relevance of Article 68 measures - France 

(1) 
Justification 
of the needs  

(2) 
Objectives 

(3) Targeting 

(4) Aid level 

(5) Rationale 

The rationale for a coupled measure aiming at structuring the sector (through professionalization, 
higher productivity rates and contracts) was highly relevant. 

The rationale for a coupled support is to prevent producers from switching towards bovine meat 
production. It is relevant to the needs in terms of territorial development. However, the lack of 
requirements aiming at improving competitiveness and structuring the upstream supply-chain may 
hamper the long-term success of the measure. 

(6) 
Budget 
share 

34% 

12% 

1 From 1st January 2012, the coupled support was extended to the (small) rice sector with the following distribution: 3.4% was allocated to 
dairy and 0.099% to rice. 

36 

 
 
 
 
 
 
 
 
 
 
                                                      
Evaluation of Article 68 measures 

Measure 

1(d) 
Harvest 
insurance 

1(a)(v) 
Organic 
farming 

(1) 
Justification 
of the needs  

(2) 
Objectives 

(3) Targeting 

(4) Aid level 

(5) Rationale 

The rationale for developing a crop insurance market and enabling producers to adopt a risk 
management approach is highly relevant even though the budget needs and changes from one year to 
another were difficult to anticipate. 

(6) 
Budget 
share 

19% 

The rationale for the significant financial transfer of the support from the 2nd to the 1st pillar was 
relevant to the need of developing organic farming in France as well as the loosening of the eligibility 
requirements. However, stabilisers had to be used in the last implementing years. 

15% 

* For France, the budget share of the measures refers to the three first years of implementation only (2010-2012). 

Source: Interviews, documents analysis and implementation data 

On  the  basis  of  the  general  strategy  of  reorienting  support  from  cereals  to  livestock  farmers,  the 
allocation of the Article 68 budget between sectors is the result of a needs analysis based on FADN 
simulations  and  of  broad  sectoral  consultations.  For  sectors  which  were  united  and  agreed  on  their 
internal priorities, relevant measures were set up, with adequate budgets and leverage effect (sheep and 
goat -34% of 2010-2012 expenditure-, mountain milk to a less significant extent -12%-). Conversely, in 
the  beef  sector,  for  which  the  needs  are  important  and  relevant  to  the  French  strategy,  the  lack  of 
consensus  between  stakeholders  resulted  in  support  segmented  exactly  it  was  when  still  partially 
coupled, with insufficient budgets (fattening measure) and without structuring requirements (fattening, 
quality calves and additional suckler cow support). Furthermore, although it is not the purpose of the 
Specific Support, it has been used as transitory support to face the rise in the feed price by targeting 
farmers  that  recently  undertook  investments  (fattening  support,  suckler  cow  premium,  dairy  sector, 
poultry for other reasons). These budgets could probably have been used in a more relevant way if less 
divided between sectors and supporting well-targeted, specific needs. 

Other small specific sectors received support under the quality objective (durum wheat, tobacco1, starch 
potato from 2014). These also corresponded to support that remained partially coupled before 2009. 
Even though this support could have been relevant to some specific needs (land abandonment for durum 
wheat, environmental matters for starch potato), the support schemes were not designed so as to structure 
the sectors or change the practices. In fact, quality requirements corresponded to the usual requirements 
of the industry (also true for the calf support). 

The environmental measures implemented in France were coherent with the general orientation of the 
Health Check in France by supporting feed production (in the objective of replacing imported feed by 
locally  produced  fodder)  and  organic  production.  They  were  relevant  to  environmental  needs  (crop 
diversification and lesser use of inputs). However, the protein crop and fodder legume support (10% of 
2010-2012 expenditure) was poorly targeted in terms of localisation or change in practices. Furthermore, 
after 2012 and the full decoupling of dried fodder, the support was reserved to fodder legumes to be 
dehydrated, leaving unsupported the other fodder productions. Concerning the rotation measure (7%), 
its requirements were close to baseline practices and it was stopped after one year for political matters, 
which is not relevant if changes in practice are to be expected. 

Significant budgets were allocated to organic farming (15%) and transversal measures (insurance and 
mutual fund) that are judged relevant to the needs even though the budget needs and changes from one 
year to another were difficult to anticipate. In that sense, the transfer of these measures to the 2nd Pillar 
for the new programming period can be expected to be more adapted since budgets can be managed 
over the whole period. With respect to the mutual fund (1(e) measure), it aimed at encouraging sectors 
to manage health and environmental hazards by compensating for economic losses. It is considered as 
highly relevant since there is no private insurance for this type of risk. However, given the innovative 
aspect of the measure, it has taken a long time to set it up in accordance with EC rules. 

1 Respectively 2% and 0.7% of the budget for 2010-2012. 

37 

 
 
 
 
 
 
 
 
 
 
                                                      
Evaluation of Article 68 measures 

4.3.2.2  Relevance of measures in Italy 

In Italy, the choice of the sectors supported by Article 68 Specific Support stemmed from a negotiation 
between regions, which resulted in a large number of supported sectors. 

Measure 

1(d) 
Insurance 
premiums 

1(a)(v) 
Crop 
rotation 

1(a)(ii) 
Beef 
quality 

1(a)(ii) 
Milk 
quality 

Table 8: Relevance of Article 68 measures – Italy 

(1) 
Justification 
of the needs  

(2) 
Objectives 

(3) Targeting 

(4) Aid level 

(5) Rationale 

The rationale for the measure was relevant since it allowed farmers to widely subscribe to private 
insurance mechanisms instead of relying on ex post compensation funds. 

Even though environmental objectives were a “second best” (after maintaining durum wheat 
production), the measure was structuring and very relevant as widely used monoculture was leading to 
a gradual deterioration of soil fertility in production areas.  

The reasoning behind this measure would have been relevant if it had more ambitious objectives in 
terms of quality (and of means to achieve them). Furthermore the market should be able to pay a 
quality premium after a while, which was not previously the case although the support had existed 
since 2003. 

The rationale for such a measure does not appear relevant since needs and design did not correspond to 
a quality measure: quality criteria corresponded with technique parameters already widely used. 

Source: Interviews, documents analysis and implementation data 

(6) 
Budget 
share 

37% 

25% 

14% 

10% 

The  insurance  measure  was  judged  relevant  since  it  made  it  possible  to  increase  risk  management 
practices among farmers in order to transfer some expenses that were previously covered by the public 
budget to the market (37% of the expenditure). The crop rotation measure was generally judged relevant 
(25%). On the other hand, the design of the beef measure was poorly relevant to the needs, even though 
there  were  real  needs  for  the  sector  (14%).  The  milk  quality  measure  was  generally  judged  poorly 
relevant and was similar to a widely distributed support coupled to production (10%). 

For quality measures, Article 68’s limited financial resources would have suggested focusing Specific 
Support in a very limited number of key-sectors with actual quality problems. Quite the opposite is true: 
the  financial  breakdown  based  on  the  territorial  balance  logic  (negotiation  among  Regions)  led  to  a 
fragmentation of the resources in a large number of sectors (most of which were previously benefiting 
from  support),  consequently  reducing  the  potential  impact  of  the  support.  Therefore,  the  budget 
breakdown  did  not  necessarily  reflect  the  quality  improvement  needs  of  the  concerned  sectors  and 
generated  some  very  specific  support  (Danae  Racimosa  strongly  requested  by  Liguria  for  instance). 
Furthermore, the quality measures were mainly used to meet objectives other than quality: support the 
production and income of producers (in order to enable maintenance of the activity/sector). 

Furthermore, in some cases, this objective has been pursued in a poorly selective way. The setting of a 
"maximum" unitary aid, together with broad eligibility criteria, generated a high number of requests for 
Specific Support and covered a high proportion of the total national production or surface (for instance, 
98% of produced tobacco and 98% of sugar beet areas). In fact, required quality parameters were often 
similar to those included in the interbranch agreements.  

However,  interviewees  generally  think  that  the  instrument  is  good  but  not  utilised  to  target  specific 
needs, because of the Italian institutional process that tied its implementation to an agreement in the 
State-Regions conference. 

4.3.2.3  Relevance of measures in Spain 

Since the 2003 CAP reform, the Spanish authorities have been concerned about a possible risk of land 
and  livestock  production  abandonment  in  large  areas.  For  2006-2009,  Article  69  targeted  some  key 
sectors for that purpose and Article 68 mainly continued supporting the same. In addition, other sectors 
adversely  affected  by  decoupling  or  other  policies  (such  as  the  ending  of  milk  quotas)  were  also 

38 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Evaluation of Article 68 measures 

supported by Article 68. Spanish authorities had the objective of keeping the aid coupled as much as 
possible. 

Measure 

1 (b) 
Aid to dairy 
cows  

1(b) Aid to 
suckler cow 
holdings 

1(b) Sheep 
and goat  

1(a)(v) Crop 
rotation in 
low yield and 
dry areas 

Table 9: Relevance of Article 68 measures – Spain 

(1) 
Justification 
of the needs  

(2) 
Objectives 

(3) Targeting 

(4) Aid level 

(5) Rationale 

The rationale was to continue to grant a coupled aid per head in order to encourage the maintenance of 
the production, with an additional support for LFA farmers, but did not include any requirement aimed 
at preparing for the future.  

The reasoning behind this measure was to maintain the coupled support as it was previously. The lack 
of geographical targeting and requirements aiming at improving the competitiveness and structuring 
the sector make the measure poorly relevant to meet territorial and environmental needs. 

Even if the rationale for a measure aiming at structuring the sector appears relevant, the requirement of 
being engaged in common actions run by producers associations was not very binding. 

The rationale for such a measure appears relevant. However, for several years the measure’s budget 
was not enough to finance them. 

Source: Interviews, documents analysis and implementation data 

(6) 
Budget 
share 

24% 

21% 

14% 

21% 

Spanish authorities implemented Article 68 in a large number of sectors. They were mainly the sectors 
which had benefited from Article 69 during the previous period. 

The 1(b) measures benefited from the biggest budget in Spain, with about 60% of the whole expenditure. 
The global rationale for these livestock measures was to continue granting coupled support in order to 
maintain the sectors. However, the requirements rarely encouraged improving the competitiveness of 
the farms or the structure of the sector, except in the case of the sheep support for which farmers needed 
to be engaged in common actions run by producers associations. This requirement can be expected to 
structure the sector in the longer term.  

The 1(a)(v) environmental measure was designed in a relevant way to respond to the need to limit the 
tendency  towards  cereal  mono-cropping  even  though money  was  lacking  to finance  more  ambitious 
actions. 

Quality measures were implemented in labour-intensive sectors (tobacco, cotton, sugar) and livestock 
productions under food quality schemes. Even though Spanish authorities considered that improving the 
quality was the most appropriate way to increase their profitability and competitiveness with regard to 
tobacco, sugar beet and cotton, the support was not designed so as to structure the sectors or change the 
practices  but  to  maintain the  levels  of these  specific productions.  Furthermore, the  quality  measures 
benefited from only about 18% of the Article 68 Spanish budget although they concerned seven sectors. 

4.3.2.4  Relevance of measures in Hungary 

Hungary chose to support labour-intensive sectors in rural areas as opposed to mechanised cereals farms 
spread nationwide, in the context of the phasing-out of several sectoral CNDPs.  

Table 10: Relevance of Article 68 measures – Hungary 

(1) 
Justification 
of the needs  

(2) 
Objectives 

(3) Targeting 

(4) Aid level 

(5) Rationale 

The rationale for implementing a coupled measure is poorly relevant to the needs since 90% of the 
territory was considered as vulnerable and there was not a structuring strategy for the sector. 

The measure is built in such a way that only tobacco can be produced; it is thus a hidden coupled 
support. The restructuring programmes do not provide any strategy for the development of the areas, 
except supporting tobacco. 

Measure 

1(b) Support 
to dairy 
farmers  
1(c) Aid for 
tobacco 
growing 
areas  

(6) 
Budget 
share 

45% 

23% 

39 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Evaluation of Article 68 measures 

Measure 

1(c) Support 
for bovine 
and ovine 
sectors 

(1) 
Justification 
of the needs  

(2) 
Objectives 

(3) Targeting 

(4) Aid level 

(5) Rationale 

The measure is innovative and sought to stimulate greater innovation and entrepreneurship among 
farmers, who had to engage in restructuring and development programmes in order to stay in the local 
business networks. 

Source: Interviews, documents analysis and implementation data 

(6) 
Budget 
share 

23% 

Hungary tried to maximise the budget that it could use under Article 68 in order to redistribute money 
from SAPS towards areas that would be the most affected by the end of CNDPs. This was done through 
the use of 1(c) support calculated on the basis of the previous level of production in the tobacco (23% 
of the total budget), bovine and ovine (23% of the total budget but implemented only after 2012), and 
fruit and vegetables sectors (9%). This appears generally relevant to the needs of the Member State in 
terms of land abandonment. However, in the case of tobacco the requirements of the measure are built 
in  such  a  way  that  only  tobacco  can  be  cropped  and  thus  does  not  favour  the  restructuring  of  the 
agriculture in these areas. 

In addition, two other sectors affected by the end of CNDPs were supported under the objective 1(b) for 
disadvantaged  farmers.  There  was  a  consensus  to  allocate  most  of  the  budget  (99%  of  the  budget 
considered  as  coupled)  to  dairy  farmers  since  the  sector  was  encountering  economic  difficulties. 
However, the support was widely distributed and did not aim at strengthening the sector in the longer 
run. The same conclusions can be drawn for rice support, even though it represented a much smaller 
amount (1% of the total budget).  

Finally,  a  contribution  to  insurance  premiums  was  set  up  (7%  of  the  budget).  The  objective  was  to 
increase the number of insured producers in the context of significant and frequent losses experienced 
due to climatic events, which appears to be relevant. 

4.3.2.5  Relevance of measures in Greece 

All the sectors chosen for Article 68 were previously being supported by Article 69. However, for the 
sheep and goat and beef and veal sectors, the quality improvement requirements that prevailed have 
been abandoned in Article 68. Furthermore, the Ministry considered that it had sufficient knowledge of 
the sectors and that their consultation was not necessary to identify specific needs (except in the case of 
durum wheat).  

Table 11: Relevance of Article 68 measures – Greece 

(1) 
Justification 
of the needs  

(2) 
Objectives 

(3) Targeting 

(4) Aid level 

(5) Rationale 

The rationale for such a measure is that producers should be able to valorise quality improvement on 
the market after a while, which was not previously the case although the support had existed since 
2003. The real objective was to support a main export product widely cropped by Greek farmers. 
Furthermore, the minimum density of certified seeds required was set much too low. 

Beyond the wide targeting, the rationale for a measure with such a low aid level was very poorly 
relevant. 

Measure 

1(a)(ii) 
Durum 
wheat 

1(b) Sheep 
and goat 
measures 

1(b) Beef and 
veal sector 

The rationale for maintaining coupled support does not seem relevant since nothing was planned for 
the measure to structure the sector in the longer term. The genealogy top-up is not relevant since it was 
used as an incentive for implementing EC regulation. 

Source: Interviews, documents analysis and implementation data 

(6) 
Budget 
share 

30% 

32% 

18% 

In Greece, the main measures are generally judged as poorly relevant due to their limited targeting of 
beneficiaries, to the weak justification of the needs (durum wheat and sheep and goat) and to the poor 
rationale for coupled support if nothing is done in favour of structuring the sector in order to be viable 
without support. The level of the support for sheep and goat was clearly too low. In the sector of olive 

40 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Evaluation of Article 68 measures 

oil, even if there was a need for a better valorisation of the quality, the design of the measure was not 
relevant to the needs of the final market (for instance, the AGRO label was not valorised on the final 
market and the quantities marketed through the PDO/PGI regime remained a small fraction of the overall 
production  in  the  PDO/PGI  areas  since  the  vast  majority  of  the  olive  oil  production  was  still 
commercialised in bulk). Finally, a last measure under objective 1(c), aimed at granting new entitlements 
in LFA and mountainous areas with development programmes, appears relevant according to the way it 
was planned. 

In a wider perspective, all chosen sectors had as common characteristics the high number of producers 
as well as the broad geographic coverage and were concerned with important domestic products and/or 
with  exporting  capacities.  Three  out  of  the  five  measures  implemented  were  targeted  at  LFA  and 
mountainous areas, however these cover 80% of the country and their boundaries were contested by the 
EC. Thus, measures were only partially in line with the aim of Article 68 to target specific needs and it 
appears that the decisions taken by the government are to be understood in the context of the financial 
crisis. It seems that the government aimed at widely distributing funds (most of which were available in 
the SPS reserve) and at supporting sectors that could help limit the trade deficit. 

4.3.2.6  Relevance of measures in Poland 

Measure 

1(b) Farmers 
keeping cows 
in south-
eastern Poland 
1(a)(i) Pulses 
and herbage 
legumes 
1(a)(ii) 
Tobacco 
quality 

Table 12: Relevance of Article 68 measures – Poland 

(1) 
Justification 
of the needs  

(2) 
Objectives 

(3) Targeting 

(4) Aid level 

(5) Rationale 

Relevant with respect to specific social and land management objectives. However, the measure has 
no incentive so as to strengthen milk production or to foster a switch to meat production. 

The measure rationale is relevant to the needs and well targeted towards areas where pulses and 
herbage legumes are cultivated as main crops. 

Not relevant to support social objectives through an instrument targeting quality, nor that Member 
States have to support sectors to avoid distortive effects with competitors. 

Source: Interviews, documents analysis and implementation data 

(6) 
Budget 
share 

47% 

31% 

20% 

In  Poland,  Article  68  has been used  as  a  follow-up  to  CNDPs. The  Polish  strategy  in  implementing 
Article  68  was  to  target  its  Specific  Support  towards  a  few  key  sectors  in  terms  of  local  economy, 
employment  and sustainable  land  management. Three  out  of  the four  measures are  targeted  towards 
mountainous areas  with traditional  agricultural  sectors.  This also  applies to the  sheep  measure  (1(b) 
objective)  even  though  it  only  represents  3%  of  the  total  expenditures.  Thus  measures  appear 
generally relevant to the needs.  

However, the sustainability of their expected effects in the longer term is doubtful (cattle measure). In 
the case of tobacco, Poland had initially accepted to remove any coupled support but was finally led to 
reintroduce  it  in  2012  to  maintain  competitiveness  with  Member  States  that  continued  to  support 
tobacco. 

4.3.2.7  Relevance of measures in Finland 

Finland benefited from a dispensation due to its climate and was allowed to use up to 10% of the national 
ceiling  for  support  considered  as  coupled.  This  explains  why  the  Article  68  budget  in  Finland  is 
relatively significant compared to other Member States. 

41 

 
 
 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
Evaluation of Article 68 measures 

Measure 

1(b) Support 
for beef and 
veal  

1(b) Support 
for milk  

Table 13: Relevance of Article 68 measures – Finland 

(1) 
Justification 
of the needs  

(2) 
Objectives 

(3) Targeting 

(4) Aid level 

(5) Rationale 

Even though the measure is relevant to the needs, the absence of any constraining and structuring 
requirement makes the rationale for this coupled support poorly relevant in the long term. 

The rationale for the support seems poorly relevant partly because the industry appears to be able to 
take charge of the support. 

Source: Interviews, documents analysis and implementation data 

(6) 
Budget 
share 

68% 

18% 

Finland has focused its support on two main sectors (bovine meat and dairy), which is coherent with the 
global  objective  of  maintaining  agricultural  activity  and  limiting  cereal  monoculture  by  supporting 
environmentally-friendly  sectors.  However,  the  economic  sustainability  of  the  support  to  livestock 
sectors could be questioned since no condition aiming at changing  the practices in order to improve 
competitiveness or structuring the sector is attached to the support. Furthermore, although its budget is 
very low (1% of the total), the sheepmeat measure did not have strong requirements in terms of quality.  

The other support schemes financed were environmental measures ((1)(a)(i)): 

-  Although relevant to the needs, the protein and oilseed crop support (9% of the total budget) 
was not designed in a sufficiently relevant way since its level was too low to be an incentive 
and  the  requirements  reduced  the  positive  potential  effects  of  the  measure  (low  minimum 
surface required, lack of additional technical support); 

-  As concerns the starch potato support (3%), it was implemented as the follow-up of the previous 
coupled support and the requirements mainly aimed at product quality even though they can 
have positive environmental fallout. 

4.3.2.8  Relevance of measures in Portugal 

Portugal chose to use Specific Support for a large range of sectors and to ensure continuity with Article 
69, implemented during the previous period. 

Measure 

1(a)(ii) 
Quality 
improvement 
1(b)  
Milk sector 
(sheep, goat 
and bovine) 

1(a)(v) AEM 
national olive 
growing 
heritage 
1(a)(v) AEM 
extensive 
grazing 

Table 14: Relevance of Article 68 measures – Portugal 

(1) 
Justification 
of the needs  

(2) 
Objectives 

(3) Targeting 

(4) Aid level 

(5) Rationale 

All the quality measures in the seven concerned sectors were in continuity with previous support and 
criteria concerning production organisation or quality were only poorly binding. 

The rationale for this coupled measure was to support the whole sector without any structuring 
requirement.   

The rationale was to reintroduce a previous agri-environment measure that had not been continued in 
the 2007-2013 RDP.  

The rationale was to reintroduce three agri-environment measures that had not been continued in the 
2007-2013 RDP. 

Source: Interviews, documents analysis and implementation data 

(6) 
Budget 
share 

26% 

26% 

24% 

18% 

Portugal financed a wide range of measures under Article 68 with a relatively small budget (less than 
100 million € for the three first implementing years, i.e. 2.2% of the total EU expenditure for Article 
68). One can thus wonder how each measure can be relevant to the needs. 

Agri-environment  measures  under  Article  68  were  established  as  follow-up  to  measures  that  had 
previously existed under the 2000-2006 RDP but could not be included under the 2007-2013 one.  

42 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Evaluation of Article 68 measures 

Sectorial measures were implemented mostly as continuation of previous Article 69 measures even if 
they could be expected to increase the number of producers’ organisations, which was very low in most 
sectors. For the milk sector, the measures appeared poorly relevant and had the goal of responding to 
specific demands of sectors that felt more vulnerable or less supported. 

As such, the number of measures and sectors supported was fairly high (cereals, rice, olive oil, meat, 
tomato, milk) when compared to the available national budget. Specifically, for cereals and rice, the 
measures might not have had any impact given the small share of the support in producer income. For 
the rice sector, quality criteria were fairly standard, i.e., not more demanding than the average production 
quality. In the olive oil sector, the quality measure was of little relevance due to its focus on PDO/PGI 
production. Consumers may not sufficiently value PDO/PGI as to make it interesting for producers to 
increase production, which therefore is only a small amount of the overall national production. The level 
of support was not able to change this market feature. The support to the meat sector was a complement 
to other support schemes and thus could be expected to have little impact by itself. For tomatoes for 
processing, tomato producers were already highly organised and complied with the processors’ quality 
requirements  which  were  set  for  the  aid,  making  the  measure  poorly  relevant  apart  from  partially 
compensating farmers for the uncoupling of the previous coupled payment. 

4.3.2.9  Relevance of measures in Denmark 

Denmark  has  mainly  used  unspent  funds  to  finance  Article  68,  in  order  to  support  environmental 
objectives that could not be reached through RDR due to budgetary constraints. These objectives are in 
line with several framework documents (government programme for Green Growth, RDP, Action Plan 
for Organic Agriculture in Denmark). Since 2012, a significant part of the budget has been allocated to 
a beef coupled support. However, Denmark implemented the lowest share of coupled payments in the 
total Article 68 budget compared to other Member States.  

Measure 

1(a)(v) 
Extensive 
farming 
1(b) Support 
for production 
of beef 

Table 15: Relevance of Article 68 measures - Denmark 

(1) 
Justification 
of the needs  

(2) 
Objectives 

(3) Targeting 

(4) Aid level 

(5) Rationale 

The measure was set under the same rationale as a previous AEM even though the possible 
deadweight effect is estimated at 30% of beneficiaries. 

The rationale for maintaining a coupled support did not seem relevant since it was poorly targeted 
and nothing was planned for the measure to structure the sector.  

Source: Interviews, documents analysis and implementation data 

(6) 
Budget 
share 

55% 

30% 

The two main (1)(a)(v) measures are judged relevant to the needs, even though the objectives could 
have been set more precisely relative to the environmental achievement pursued. Furthermore, there was 
a debate between ministries about the ability of one-year measures to change practices in the long run. 
Stakeholders and  Ministry  of  Agriculture  stressed  that  1-year  agreements  make  it  possible to  attract 
farmers and more often than not, re-commitments are signed for the next years. 

Other sectoral environmental measures (organic fruit and berry plantations, but also energy crops and 
crop  rotation  measures  ((1)(a)(i))  encountered  low  success  compared  to  the  (1)(a)(v)  measures  (the 
demands never accounted for more than 50% of the budgeted amounts except for one line of the energy 
crop support), probably due to too-low aid intensity. However, higher aid rates would have made the 
measures rather inefficient compared to the environmental objectives to be achieved. 

In the case of the  beef measure, even though objectives are relevant to the needs, the design of the 
measure is judged poorly relevant since there is no targeting of specific producers and no structuring 
incentive in order to build a more competitive production in the long run. 

43 

 
 
 
 
 
 
 
 
 
 
Evaluation of Article 68 measures 

4.3.3  RELEVANCE  IN  THE  OTHER  MEMBER  STATES  THAT 

IMPLEMENTED ARTICLE 68 

Among the 15 measures analysed, only two concern fruit and vegetables and sheep, whereas 14 concern 
cattle (6 dairy measures and 7 for breeding). The majority of the measures were implemented under 
objective  (1)(b)  of  Article  68  (12  measures),  the  other  three  being  implemented  under  the  quality 
objective ((1)(a)(ii)).  

The  regulation  specifies  that  measures  under  objective  (1)(b)  shall  address  specific  disadvantages 
affecting farmers “in economically vulnerable or environmentally sensitive areas, or in the same sectors 
for economically vulnerable types of farming”. Even if the regulation is rather vague, as demonstrated 
in the ECA Report1, the support to a whole sector cannot be considered to support a “type of farming” 
unless it is precisely defined in the notification of the measure. Judging from the eligibility criteria, five 
measures (CZ, AT, UK, LT, LV) out of 12 were poorly or not targeted, as for instance the dairy measure 
in Austria which supported all the holdings with milk quotas. The 7 others seem to be correctly targeted; 
for instance, in Romania, the beef meat measure supported only small herds located in Less Favoured 
Areas. However, in that matter, opposite strategies can be observed: Romania chose to support the first 
15 cows whereas Bulgaria supported herds of at least 10 cows (in both cases, herds had to be situated in 
LFA), the rationale for the Romanian measure being to fight against land abandonment whereas for 
Bulgaria, it was to support herds that reach a minimum level of competitiveness.  

Two  Member  States  compensated  farms  for  compliance  with  the  Nitrate  Directive  whereas  it  is  a 
mandatory obligation which should not be financed (BG, SK).  

Concerning the (1)(a)(ii) quality objective, it is hardly possible to judge the relevance of the measures 
and of their design on the basis of so few elements. 

Given their limited total expenditure, most of these Member States concentrated the funds on one major 
measure and implemented only a few measures. 

4.3.4  SUPPLEMENTARY ROLE AND COHERENCE  

4.3.4.1  Supplementary role and coherence for competitiveness objectives 

(measures (1)(a)(ii) and 1(b)) 

  Dairy sector 

During the implementation period of Article 68, the dairy sector was still indirectly supported by the 
dairy CMO. However, many Member States chose to support their dairy sector using Specific Support 
(17% of the total expenditure between 2010 and 2012) for two reasons: 

- 

- 

in  2009,  the  European  dairy  sector  encountered  a  major  price  crisis.  Consequently,  several 
Member States invoked the increasing market volatility to justify their support under Article 68; 
the  progressive  ending  of  quotas  was  programmed  and  Member  States  often  justified  their 
support as a means of preparing for the new situation (which was among the purposes of the 
Specific Support). 

In some cases (FR, HU, PT), the Specific Support took over from previous support schemes.  

Often,  Specific  Support  in  the  dairy  sector  has  been  implemented  along  with  several  RDR  support 
schemes,  mainly  LFA  payments  and  modernisation  support.  Support  for  modernisation  (investment 
support) can be considered to be in synergy with the Article 68 objective of anticipating the ending of 
quotas. In the case of France, for instance, there was an effort to target support since the Specific Support 
was restricted to mountain producers. However, there was a risk of overlap with the RDR support to 

1 “The regulations on specific support do not provide sufficient framework to ensure that this support would only be provided ‘in clearly defined 
cases’”, ECA Special Report No 10, 2013, Common Agricultural Policy: Is the specific support under Article 68 of Council Regulation No 
73/2009 well designed and implemented?  

44 

                                                      
Evaluation of Article 68 measures 

mountain areas since it was supposed to compensate for additional costs supported by farmers of these 
areas. In France, this issue has been settled by the exclusion of the dairy activity from calculation  of 
LFA payments. However, the LFA and mountain delimitations were also used as a targeting criterion 
for the Specific Support in the case of several other measures (see below for other livestock sectors). 
Although it appears to be relevant in order to deal with specific needs, the issue of the supplementary 
role of the Specific Support is at stake.  

Finally,  in  the  case  of  Poland,  the  possible  overlap  with  any  AEM  has  been  eliminated  by  mutual 
exclusion of applications. However a flaw of the system is that organic milk producers gave up organic 
production  and  the  corresponding  AEM  to  benefit  from  the  Specific  Support  which  generated  more 
money. 

  Cattle sector 

In  Member  States  that  significantly  supported  their  beef  and  veal  sectors,  these  were  all  previously 
supported, either by partially coupled payments, Article 69 (sometimes by both) or CNDP in the case of 
Poland. 

Concerning simultaneous support, the coherence with several types of RDR support must be analysed. 

-  Several Member States implemented support linked to specific breeds (IT, EL, PL). A coherence 
issue was thus raised with AEMs aiming at conserving endangered breeds. In most of the cases, 
the solution was to exclude Specific Support beneficiaries from the AEM. However, in Italy, 
every region implements its own rules to avoid overlapping with other aid schemes. A large 
work of demarcation was undertaken and only in a few cases, the measures overlapped. 
In  Italy, where the Specific Support was covering labelled cattle, the Italian Calabria region 
managed the risk of overlapping through excluding the certification costs from the computation 
of the aid.  

- 

-  Finally, Greece uses the LFA zoning as a targeting criterion for allocating support in order to 
prevent  land  abandonment  in  these  regions  and  to  maintain  farm  viability.  Again,  these 
objectives are very close to those of LFA payments. 

  Sheep and goat sector 

As for bovine meat, in the three Member States that implemented major measures towards sheep and 
goats, the sector was significantly supported in the previous period, either by the still partially coupled 
sheep and goat premium or by Article 69 (both in the case of Spain). 

Concerning simultaneous support, the coherence with several RDR support schemes has to be analysed. 

-  The  Specific  Support  is  in  synergy  with  modernisation  support  of  the  RDR  since  both  can 

improve farms competitiveness. 

-  As for the bovine sector, in Greece, the coherence between the support top-up and an AEM 
aiming at conserving indigenous breeds has been managed through mutual exclusion. At the 
same time, the top-up was acting in synergy with another AEM aiming at the conservation of 
livestock genetic resources. 

-  Finally, a large number of the Specific Support beneficiaries also received LFA and mountain 
support from the RDR. Yet, they were a specific target only in the case of Greece. In fact, sheep 
and  goat  farms  are  very  often  based  in  these  areas,  where  they  are  usually  among  the  only 
agricultural activities that can be implemented there.  

  Crop sectors 

As  in  the  case  of  livestock  sectors,  the  main  Specific  Support  attributed  to  crop  sectors  succeeded 
previous, ending support (coupled support, Article 69 or CNDPs). When risks of financing actions that 
were  already  supported  by  the  RDR  occurred,  they  were  managed  through  mutual  exclusion  of  the 
schemes. It was the case in Greece, with the RDR support to the participation in food quality schemes 

45 

Evaluation of Article 68 measures 

and to organic farming. There, farmers preferred Article 68 support for administrative matters (easier 
application and on-time payments). 

  Competitiveness measures implemented by other Member States 

As  for  the  measures  studied  in  detail  through  the  National  Studies,  in  several  cases,  some  possible 
overlapping  with  RDR  could  be  observed.  The  principal  measures  concerned  are:  measures  121 
(Modernisation  of  agricultural  holdings);  123  (Increase  of  added  value  for  agricultural  and  forestry 
products);  132  (Food  Quality  Schemes),  141  (Semi-subsistence  farming),  211  and  212  (LFA  and 
mountains support) and 214 (Agri-environment measures). As for the previous measures, beneficiaries 
were  sometimes  not  allowed  to  receive  both  forms  of  support  (SK).  However,  more  often,  Member 
States (BG, RO, IE, LT, SI) estimated either that the objectives of the Specific Support and of the RDR 
differed (maintaining production levels versus supporting vulnerable farming systems for instance) or 
that  the  rationales  were  different (costs  compensation  versus income  support)  and  consequently  that 
both forms of support could be allowed simultaneously. 

Generally, there was no other coupled support available in addition to Article 68, with a few exceptions 
as in Lithuania for the sheep sector and Bulgaria in the dairy sector.  

4.3.4.2  Supplementary role and coherence for environmental measures 

As  in  the  case  of  measures  affecting  the  competitiveness  of  the  sectors,  several  environmental 
measures were implemented  due to  the end  of a  previous financing  scheme  (CNDPs  in  Poland, 
Article  69  in  Italy,  some  2000-2006  RDP  AEMs  in  Portugal).  However  in  the  case  of  Italy,  this 
opportunistic reason led to a somewhat original measure since, in order not to overlap with other rotation 
measures, a more ambitious two-year rotation measure was implemented to support the maintenance of 
durum wheat.  

Another reason for implementing Specific Support to pursue environmental objectives was that it gave 
extra-financing compared to the AEMs of the RDR, since 50% of RDP measures must be financed 
by  the  national  budget.  This  was  in  particular  the  case  of  the  AEMs  supporting  conversion  and 
maintenance of organic farming in France, of the AEM supporting extensive farming in Denmark, and 
of the investment measures with environmental objectives in the Netherlands. The transfer of the support 
from  the  second  to  the  first  CAP  Pillar  generally  increased  the  available  budget  for  the  other  RDR 
measures. In the case of France, which is the most significant in budgetary terms, the transfer has not 
led to a decrease in the PDR budget, the average yearly expenditure between 2009 and 2014 being even 
slightly higher than during the two first years of the PDR.  

In  these  cases,  Article  68  measures  have  also  sometimes  been  implemented  in  a  way  so  as  to 
complement  the  RDR.  For  instance,  the  rotation  measures  implemented  in  Italy  and  Spain  were 
complementary to regional AEMs. In Spain, it acted in synergy with a RDR measure financing advisory 
services that allowed farmers to implement rotation in a more effective way. In Denmark, the Specific 
Support enabled extending the action of a measure supporting extensive grazing in regions other than 
those targeted by the RDR.  

The transfer of AEMs from the second to the first pillar led to standardising the level of support at 
the Member State level, whereas AEMs implemented varied from one region to another.  From the 
point of view of the equity between farmers, this might be seen as positive, but from the point of view 
of the effectiveness, this approach fails to take into account the variability of the additional costs and 
income losses and thus may limit the uptake of the measure. 

Another  issue  is  that  of  the  commitment  period:  although  a  five-year  minimum  engagement  is 
required in the RDR, this was not mandatory for Article 68. In France, an enrolment for five years was 
required to benefit from the support to organic farming. In Denmark, even though this was regretted by 
the Ministry of Environment, other interviewees argued that farmers were less reluctant to undertake the 
changes in their farming system when they enrolled only for one year. Once tested, the farmers easily 
re-enrolled for the next year. Thus one year measures may be more effective in order to trigger a massive 

46 

Evaluation of Article 68 measures 

uptake.  However,  to  generate  a  massive  change  in  practices  in  the  long  run,  the  measure  has  to  be 
maintained over a long period and requirements (in terms of changing practices) need to be demanding. 

As for other types of measures, the  risk of overlap was prevented either by mutually excluding the 
beneficiaries of each measure (PL), or by implementing specific rules (IT, DK). However, in some cases, 
the  prevention  of  possible  overlaps  was  not  clearly  justified  (for  instance,  case  of  the  demarcation 
between the support to protein and oilseed crops and various AEMs in Finland). 

4.3.4.3  Supplementary  role  and  coherence  for  risk  management 

measures 

Italy, France, Hungary and the Netherlands have seized the opportunity offered by Article 68 (1)(d) to 
use EU funds to finance support to insurance premiums. Before 2010, all of them already had partial 
insurance schemes, financed by national funds. The Member States adjusted them in order to make them 
compatible with Article 68 requirements.  
In France, the European co-financing made it possible to double the support and to develop the range of 
actions. However, the lack of visibility in the adhesion of farmers prevented precise planning of the 
annual  expenses  and  resulted  in  unspent  funds  during  the  first  years  of  implementation.  There  the 
insurance  premium  support  was  supposed  to  replace  the  compensation  for  losses  scheme,  whereas 
Hungarian authorities maintained both, considering them complementary.  
In addition, French authorities used Article 68 (1)(e) to develop an innovative scheme based on a mutual 
fund. Contrary to the support to insurance premium, this scheme was totally new. Thus, it took time to 
build it in line with EU regulation. Although the implementation of the measure was delayed, the support 
finally became operational and appeared fully coherent with the French agricultural risk management 
policy. Following the French experience, Romania financed this measure under Article 68 in 2014 (1).  

4.4  EVALUATION JUDGEMENT ON EQ 1 

EQ1 aimed at judging the relevance and coherence of the measures set up by the Member States that 
chose to implement Article 68.  

  Judgement on relevance 

Concerning relevance, a difficulty lies in the fact that Member States' notifications provided insufficient 
evidence of the needs for which the measures were set up. Therefore, understanding the local context of 
the supported sector was a necessary step in judging the relevance of the measures. Given the large 
number of measures, it was possible to provide sound judgement only for the Member States where 
National Studies have been carried out (2). For other Member States, the analysis was restricted to the 
main measures implemented on the basis of back office analyses of the notifications. 

The  majority  of  the  Member  States  studied  consulted  agricultural  sector  representatives.  However, 
several Member States finally followed a strategy defined at the national level (FR, EL, DK) and based 
on economic studies (FR, PL), even though some strong sectors succeeded in getting support apart from 
the national strategy (DK, EL). In two cases (IT, PT), the negotiation with Regions or sectors led to 
a significant fragmentation of financial resources. 

Generally, it appears that none of the measures has been considered as fully relevant. This is due to the 
fact that relevance has been analysed in detail (including design parameters of the measures), whereas 
the strict definition of relevance is the comparison of objectives to the needs. However, results must be 
interpreted carefully, since they are based on judgements by central and local experts. 

1 The two Member States as well as Spain included similar measures in some of their RDPs for the current programming period (2014-2020). 
2 The Netherlands implemented mainly Animal Welfare measures, and its case was therefore treated exclusively in EQ4. 

47 

                                                      
Evaluation of Article 68 measures 

In order to provide an overall judgement on the relevance of Article 68 measures, it is necessary to 
weigh the results regarding the budget of the measures. In Italy and France, which implemented 
the main share of the EU Article 68 budget, measures with the most significant expenditure were 
relevant overall. Together these measures account for 38% of the total EU expenditure for 2010-
2012 (1). In the other Member States, the degree of relevance varies from one measure to another.  

- 

- 

- 

- 

In  France  and  Italy,  although  most  significant  measures  in terms  of  budget  were  considered 
relevant,  the  other  measures  had  less  relevance  since  they  were  often  implemented  with  the 
objective of distributing funds to sectors or regions that were previously benefitting from other 
support.  These  measures,  most  often  considered  as  coupled,  did  not  have  very  ambitious 
objectives or were not intended to reach specific results regarding the set objectives. They were 
generally designed in order to fit within the framework and the objectives of Article 68.  
In Spain and Finland, a high share of the budget was allocated to livestock sectors. The overall 
rationale  was  to  continue  granting  coupled  support  in  order  to  maintain  sectors,  which  was 
generally  relevant.  However,  in  terms  of  design,  the  measures  were  not  accompanied  by 
requirements to improve competitiveness or structure of the sectors. Both Member States also 
implemented relevant environmental measures in order to limit cereal mono-cropping, but with 
insufficient financing to reach the objectives. 
In Poland and Hungary, significant share of the budget was dedicated to milk and tobacco, two 
sectors  with  strong  social  impacts  in  generally  poor regions.  However, these  measures  were 
poorly targeted and/or included no restructuring requirements. 
In the specific case of Greece, in the context of the financial crisis, Article 68 was used for the 
purpose of distributing funds through a few measures with a high number of beneficiaries and 
of supporting sectors that could help limit the trade deficit. 

-  Portugal implemented support for a great number of sectors and with a relatively small budget, 

- 

- 

which puts into question the capacity of each measure to reach its objectives. 
In  Denmark,  the  strategy  was  mainly  aimed  at  implementing  measures  with  environmental 
objectives that appeared relevant overall. 
In  all  other  Member  States  which  were  not  subject  to  National  Studies  and  which  mostly 
implemented  lower  levels  of  support,  the  judgement  is  difficult  since  the  only  available 
information was contained in their notifications. They generally implemented fewer measures 
and targeted the Specific Support mainly on bovine sectors. 

It is thus difficult to draw a clear judgement on the relevance of the Specific Support on the basis of 
expenditure. However, more clear-cut conclusions can be drawn if we judge the measures depending on 
their objectives.  

For  example,  environmental measures (especially  (1)(a)(v)  agri-environmental  benefits) and  risk 
management measures are generally judged as relevant, even though issues arise relating to their 
coherence with RDR. However, they received a far smaller share of the budget.  

On the contrary, the measures (1)(b) specific disadvantages and (1)(a)(ii) quality are more often 
the source of relevance issues. 

-  Measures  were  often  poorly  targeted  on  specific  needs,  especially  concerning  measures 
under objective (1)(b) that had to address specific disadvantages affecting farmers in the dairy, 
beef and veal, sheep meat and goat meat and rice sectors and for which Member States were 
supposed  to  define  ‘economically  vulnerable  or  environmentally  sensitive  areas,  or 
economically vulnerable types of farming’. However, the support often poorly targeted specific 
areas or types of farming (the measures supporting dairy and beef and veal sectors in HU, FI, 
DK, CZ, AT, UK, LT, LV).  
In the case of the dairy sector, many Member States mentioned the 2009 dairy price crisis and 
the growing price volatility to justify the Specific Support. The dairy crisis may have triggered 
the implementation of significant dairy support under Article 68. However, even if the Specific 

1 Support to sheep and goats (10% of EU Article 68 expenditure for 2010-2012), crop harvest insurance (5%) and organic farming (4%) for 
France; contributions to insurance premiums (11%) and support to crop rotation in Italy (7%). 

48 

                                                      
Evaluation of Article 68 measures 

Support was justified as a transitional mechanism to alleviate the consequences of the phasing 
out of milk quotas and the new market situation, its purpose was not to provide occasional crisis 
support. 

-  Measures often lacked criteria aimed at changing or improving previous practices, thereby 
generating deadweight effects. This was often the case for measures under objective (1)(a)(ii), 
aimed  at  improving  the  quality  of  agricultural  products  (IT,  FR,  EL,  PL).  They  were  often 
implemented in order to widely distribute funds to the sectors, and the quality standards were 
the ones usually required by the industry. While such measures were sometimes needed, they 
could have been designed with stricter criteria in terms of quality improvement. In other cases, 
quality was not necessarily an issue. For instance, quality measures for durum wheat and starch 
potatoes were implemented in France, whereas in other Member States (IT, FI) the same sectors 
were supported with environmental objectives that were more relevant for those sectors. 

-  Finally, the budget allocation rarely resulted from a detailed analysis of the level of support 
required  to  meet  the  needs,  but  more  from  a  political  choice.  This  often  led  to  the  use  of 
significant budgetary stabilisers that made the aid level too low to reach the objectives of the 
measures. 

In a longer-term perspective, an important issue is that (1)(b) support was channelled to sectors in 
order to maintain  them, but  most often without  any  requirement  concerning  the structural or 
strategic adjustments needed to favour the long-term viability of these sectors. Therefore, one could 
question  their  capacity  to  survive  without  the  support,  especially  when  support  is  significant.  It  is 
particularly the case in the beef and veal sector in which many Article 68 measures maintained the same 
support that was already existing in the past.  

Member States (FR, ES, HU, EL, PL, FI) often argue that these sectors need to be maintained because 
of  territorial  development  issues  (employment,  social  issues)  or  environmental  issues  (landscape 
protection, fire preventions etc.) It must be underlined that several  (1)(b) measures were targeted  by 
Member States on LFA (ES, EL, FR, RO, BG, SK) and sometimes on small holdings (PL, RO), with 
objectives similar to the RDR objectives. In these cases, public support to farming systems related to 
these  sectors  might  be  justified.  However,  the  rationale  for  such  public  support  is  to  reward  social 
cohesion objectives or public amenities generated by the sector and not to maintain production. The 
support  should  thus  be  designed  in  order  to  produce  these  amenities  (environmental  services  for 
instance).   

  Judgement on supplementary role and coherence 

Most of the measures implemented were existing measures, including either the continuation of previous 
support under Pillar I, previous CNDPs, measures switched from the RDR to Article 68 or the more 
widespread application of limited or temporary national insurance mechanisms. Consequently, the only 
new measure was the French mutual fund (1) (2).  

When  measures  renewed  support  under  Pillar  I  that  had  been  stopped  (for  instance,  partially 
coupled payments in the cattle or sheep and goats sectors), it can be considered that Article 68 had a 
supplementary role. However, this raises an issue about the long-term viability of the support, given 
that these types of coupled support were supposed to end after the 2003 reform. Furthermore, as stated 
before, several of these measures had rationales that were close to those of RDR measures (territorial 
development or environmental objectives) whereas they were implemented with the aim of maintaining 
production.  

In  the  case  of  measures  shifted  from  RDPs,  Article  68  provided  Member  States  room  for 
manoeuvre,  by  allowing  them  to  implement other  actions  using the  RDP  budget:  Portugal financed 
AEMs  of  the  RDP  for  2000-2006  that  had  been  abandoned;  Italy  and  Spain  spread  and  generalised 
specific regional measures; and France transferred budget from its AEM for organic production to its 

1 A mutual fund was also set up in Romania in 2014 and continued in the 2014-2020 RDP. 
2 The milk quality measure in Italy is new but designed so as to take over the dairy CMO support. 

49 

                                                      
Evaluation of Article 68 measures 

‘premium for grassland farming’ AEM. For all these examples, the tools thus already existed but the 
available  RDP  budget  was  not  sufficient.  As  stated  above,  these  measures  were  often  the  most 
relevant,  since  they  were  based  on  the  model  of  similar  RDP  measures.  However,  budgetary 
provisions  of  (1)(a)(v)  measures  rewarding  agri-environmental  benefits  were  poorly  adapted  (under 
Pillar II famers enrol for 5 years and more in the AEMs, under the Article 68 they enrol usually only for 
one year, given that the Pillar I budget is annual). Furthermore, effectiveness problems may arise from 
the  standardisation  of  the  level  of  payment  among  the  concerned  regions  and  from  the  lack  of  an 
engagement period of farmers over several years. 

Article 68 measures were generally coherent with measures of Pillar II, and in several cases their actions 
were complementary (RDR modernisation support and (1)(b) specific disadvantages measures or RDR 
AEMs  and  (1)(a)(v)  agri-environment  measures).  However,  as  seen  above,  a  coherence  issue  arose 
between LFA support of the RDR and (1)(b) specific disadvantages measures, as they often targeted the 
same farmers and the Member States had the same specific objectives for applying those measures as 
was the case of LFA payments. Not all Member States set up specific rules for the demarcation between 
these two types of support because some did not consider it as a potential overlap of the measures.   

The other main risks of overlapping arose with AEMs and food quality schemes measures of the RDR. 
In the majority of the measures, double-financing was prevented by specific rules or mutual exclusion 
but, in several specific cases, demarcation between the measures was unclear. However, they do not 
represent a high share of Article 68 budget. Finally, demarcation between Article 68 and RDR measures 
sometimes  led  to  the  removal  of  incentives  to  produce  organically,  either  because  the  level  of  the 
Specific  Support  was  higher than  for the  AEM (1(b)  milk  measure  in  Poland), or for  administrative 
matters (easier application and faster payments in the case of the durum wheat measure in Greece). 

50 

Evaluation of Article 68 measures 

5  THEME  2  –  SUPPORT  FOR  SECTORS  AND 
PRODUCTIONS  TO  CURB  DISADVANTAGES: 
DEVELOPMENT OF THE SECTORS SUPPORTED 

The  EQ2  explored  to  what  extent  the  Specific  Support  has  contributed  to  the  economic  viability, 
competitiveness and sustainability of the primary production and – where relevant- of the processing 
industry in the sectors supported. 

5.1  COMPREHENSION OF THE QUESTION 

This EQ asked to analyse Article 68 measures that, as expected, should have had a direct impact (active) 
on three aspects of production: competitiveness, sustainability and viability. The interpretation of these 
three aspects is provided below. 

Viability:  A sector can be considered economically viable if the level of earnings before interests and 
taxes (EBIT) guarantees the profitability of capital. One of the most commonly used indicators for this 
purpose is the Return on Investment (ROI). The ROI measures the economic return as a percentage of 
total employed capital. In absolute terms, for a farm to be viable, the ROI must be greater than zero. 

Competitiveness: a sector may be considered competitive if it responds, depending on the case, at least 
to one of the following two aspects: 

•  The production is made at a lower cost relative to the competition: in this case competitiveness is 
centred on the efficiency of the farm, within a market where the selling price of the products is the 
same for all competitors; 

•  The  production  is  the  result  of  implementing  a  strategy  to  improve  quality:  in  this  case 
competitiveness is achieved through targeting specific market niches, where consumers (intermediate 
or final) are willing to pay a higher price relative to the "standard" product. 

On the basis of the objectives of Article 68 measures, in this evaluation question it is asked to analyse 
the second aspect concerning competitiveness, i.e. competitiveness based on quality.  

The interpretation of the notion of quality proves to be complicated, since quality is a multifactorial 
concept. To define and assess quality, it is necessary to specify what it means. For example: sanitary 
quality (food safety), technical quality (level of product performance), sensorial quality (organoleptic 
and  perceptual  characteristics),  quality  linked  to  the  territory  and  to  production  methods  (products 
benefiting from EU quality labels – PDO/PGI – or produced through organic production methods of), 
etc. 

Moreover,  quality  refers  to  products  within  different  stages  of  the  supply  chain  (and  thus  to  the 
expectations of different types of consumers). In particular: 

• 
• 

the quality of agricultural raw materials, aiming to meet processing industry expectations; 
the  quality  of  agri-food  products  for  final  consumption,  aimed  to  meet  the  expectations  of  final 
consumers. 

Sustainability: a sector can be considered sustainable if the production trend is stable over time (i.e.  
the trend shows no structural breaks), and fluctuations around the trend are limited. The stability of the 
production is an expression of the economic interest of farmers to produce over time, as well as a proxy 
of the stability of the relative competitiveness of production. The sustainability of primary production 
has (in different cases) a more or less important impact on the regular production of processing industries 
for which local supply of raw materials is a critical factor. 

With regard to these three aspects, the following the measures applied under the following objectives 
were analysed: 

51 

Evaluation of Article 68 measures 

 Article 68(1)(a)(ii): improving the quality of agricultural products 

 
  Article 68 (1)(b): to address specific disadvantages affecting farmers in the dairy, beef and veal, 
sheepmeat  and  goatmeat  and  rice  sectors  in  economically  vulnerable  or  environmentally 
sensitive areas, or, in the same sectors, for economically vulnerable types of farming 

Finally, the evaluation question required an analysis at primary production level and (when applicable) 
at the processing industry level. The relevance is due to the close link (for technical reasons) between 
industry and the proximity of its supply area of raw materials (1). The industrial sectors concerned by 
the relevant Article 68 measures are: the slaughtering industry (cattle, sheep and goats), the raw tobacco 
industry, the dairy industry, the sugar industry, and the cotton industry. 

5.2  METHODOLOGY AND LIMITATIONS 

The analysis has been carried out considering three periods: a) period prior to the implementation of the 
2003 CAP (2000-2005), b) implementation period of Article 69 (2005-2009), c) implementation period 
of Article 68 (after 2009 and until the last date for which data are available). 

The national choices of implementation of the 2003 CAP (implemented since 2005) were taken into 
account as well as the timing of the sectors reforms that did not start in all sectors of production at the 
same time. For some of them (olive, tobacco, hops, cotton, sugar, fruit and vegetables) the reform was 
decided in 2006 and 2007. 

Considering this complex frame of combinations the role played by Specific Support on the viability, 
competitiveness and sustainability of production analysis (and therefore the analysis of the net effects) 
was conducted, on Member States grouped homogeneously according to the different combinations of 
the implementation modes of the 2003 CAP. The field of analysis identified is the following: 

1   “Evaluation of market effects of partial decoupling”, Agrosynergie 2010. 

52 

DURUMWHEATSUGAROLIVE OILCOTTONRICEESESESESGROUP 1Bdecoupling + 68IE, NLBGDEFR, FI, SK, BG, ROITITROGROUP 1Cdecoupling + 69ELELPTGROUP 1DdecouplingDE, BG, ROAT, BE, DE, DK, FI, FR, IE, PT, CY, EE, BGES, FR, CY, SI, MTBGESPTESESPTESGROUP 2Blong partial decoupling + 68FR, BEBEDKFIGROUP 2Clong partial decouplingHU, LV, LT, PL, CZ, SK, ROPT, EL, BGEL, ES, FR, ITGROUP 3Ashort partial decoupling + 69 + 68FIESEL, PTGROUP 3Bshort partial decoupling + 68CZESES, FR, LT, PLCZFR, PLITFRHUGROUP 3Cshort partial decoupling + 69ITGROUP 3Dshort partial decouplingES, AT, SI, CY, HU, SKNB: short partial decoupling: until 2009 - long partial decoupling: also after 2009LT, PLAT, PT, SI, EE, LV, HU, PL, CZNL, CY, EE, HU, LV, SKCY, EE, HU, LV, SK, ROSE, EL, NL, LT, CYDE, PT, CY, HU, SK, ROPTESSE, ATSI, DKGROUP 2Along partial decoupling + 69 + 68PTSIELES, ITDE, IE, LU, MT, BG, RODE, AT, BE, LU, UK, SE, MTDK, LU, IE, UK, BEAT, BE, BGITBEEFSHEEP&GOATSDAIRYTOBACCOGROUP 1Adecoupling + 69 + 68ELITUKELart. 68 (1) (b) - specific disadvantages    Introduced in 2010    Introduced in 2012 (LT in 2011) art. 68 (1) (a) (ii) - quality   Introduced in 2010    Introduced in 2012           art. 72 - ex art. 69           art. 68 (1) (b) - specific disadvantages    Introduced in 2010    Introduced in 2012 (LT in 2011) art. 68 (1) (a) (ii) - quality   Introduced in 2010    Introduced in 2012           art. 72 - ex art. 69           art. 68 (1) (b) - specific disadvantages    Introduced in 2010    Introduced in 2012 (LT in 2011) art. 68 (1) (a) (ii) - quality   Introduced in 2010    Introduced in 2012           art. 72 - ex art. 69            
                                                      
Evaluation of Article 68 measures 

The analysis of the inventory of Article 68 measures implemented by Member States under the objective 
(1)(a)(ii) quality improvement, led to the identification of two different groups according to the scope 
and to the typology of consumers: 
•  In the first group, the actions with the purpose of improving raw materials performance to better meet 
the expectations of the processing industry (for example, improving the fat content or protein content 
of milk). This refers, therefore, to the improvement of technical quality. 

•  In  the  second  group,  the  actions  with  the  purpose  of  increasing  or  consolidating  participation  in 
quality schemes (voluntary labelling, PDO/PGI quality systems, organic products) in order to meet 
the expectations of specific consumers targets. This thus refers to quality linked to the territory and/or 
to production methods 

Measure (1)(a)(ii) 
for the improvement of 
quality linked to the 
territory and production 
methods 

Measure (1)(a)(ii) 
for the improvement of 
raw material technical 
quality 

IT, ES, PT, 
IT, ES, PT 
- 
ES 
- 
- 
EL, IT, PT 
- 
- 

IT, PT 
IT, PT, FI 
IT, ES, FR, PL 
IT 
IT, ES 
EL, PT, FR 
- 
ES 
PT 

Beef meat 
Sheep and goat meat 
Tobacco 
Dairy 
Sugar 
Durum wheat 
Olive oil 
Cotton 
Rice 

The analysis of the viability of sectors was based on the computation of the ROI. The ROI measures as 
a percentage the economic return of globally employed capital. In absolute terms: 

•  The higher is the level of the ROI, the more the sector is economically viable. 
•  If the ROI is near zero, the sector is still viable, but presents a risk. 

• 

If the ROI is less than zero, the sector is not viable because it fails to remunerate production 
factors.  In  this  case  the  continuation  of  the  activity  is  possible  only  through  the  under 
remuneration of family work and it is not possible to remunerate the invested capital. 

The approach was based on two analyses:  

A. 
B. 

the analysis of the magnitude of the average ROI of each sector; 
the analysis of the number of recipient farms with an ROI >0 (in order to determine the number of 
farms  whose  productive  activity  shifted  from  an  economically  not  viable  situation  to  an 
economically viable situation thanks to the support). 

These two analyses were carried out at two levels: 

•  At the aggregated level, the group of Member States having implemented the measures and the group 
of Member States that have not implemented it. In this case, the analysis aimed to express a judgment 
on the overall policy. 

•  At the level of Member States by sector that have implemented the measures: the analysis aimed to 
examine the differences among Member States and to express a judgment on the impact of Specific 
Support according to Member States’ choices. 

The analysis was carried out on the basis of FADN data. Methodological details on the size and grouping 
of samples as well as on the computation of the indicators are specified in the following paragraphs. 

It  is  important  to  bear  in  mind  that  FADN  data  concern  farms  (usually  multi-business)  and  not  the 
individual sectors. To overcome (in part) this limit, the analysis was carried out on samples of FADN 
farms specialized in the productions supported by Article 68 (in the FADN database, specialisations are 
grouped by types of farming – TF). In these terms, the results expressing farms economic viability 
also represent a proxy of the viability of the production sectors in which farms are specialized. In 
addition, a limit of FADN data is that the variables do not allow to make the distinction by Article 68 

53 

 
 
Evaluation of Article 68 measures 

measure / purposes. Therefore, we made the hypothesis that in specialized farms of a sector, Article 68 
support is (mostly) due to the support to the product. 

The  analysis  on  the  competitiveness  and  sustainability  was  carried  out  using  the  main  statistical 
databases, notably Eurostat and Agriview. Where necessary, these were complemented by data from 
national statistical offices and other specific sources. 

For analysing the role of Specific Support on raw material technical quality improvement, different 
parameters  according  to  the  product  were  used.  The  analysis  of  the role  of  Specific  Support  on  the 
improvement of quality linked to the territory and production methods was possible only in the 
case of olive oil in Italy. For all the other supported sectors (beef meat, sheep meat, dairy) available data 
were not sufficient to undertake the analysis 

The analysis on competitiveness examined also the changes of the prices of products under Specific 
Support. Indeed price changes can be an indicator of changes in quality levels (in theory an improvement 
of quality of a product should be accompanied by a price increase relative to standard products). The 
changes  on  prices  were  analysed  in absolute  terms,  with  the  ratio  between the  prices  of  products  in 
Member  States  having  implemented  the  measures  and  the  EU  average  price  and  by  calculating  the 
average annual growth rate (AAGR) of absolute prices and of the ratio in three different periods: before 
the  2003  CAP  implementation;  between  the  2003  CAP  and  2009;  the  period  of  Article  68 
implementation. 

With regard to sustainability of primary production, in addition to production volumes, particular 
attention was given to the evolution of production areas to livestock evolution. The analysis was carried 
out in absolute terms, with the ratio and the AAGR were computed. In this latter case, Member States 
were grouped also on the basis of the different combinations of implementation of the 2003 CAP. 

In addition to the quantitative analysis, the analysis was completed with a qualitative analysis carried 
out through interviews with key stakeholders.  

5.3  ANSWER TO EQ2 

5.3.1  ROLE PLAYED BY THE IMPLEMENTATION OF ARTICLE 68 
MEASURES UNDER THE OBJECTIVES (1)(A)(II) AND (1)(B) 
ON THE VIABILITY OF PRIMARY PRODUCTION   

5.3.1.1  Methodological approach 

The analysis of the role played by the measures under the objectives (1)(a)(ii) "improving of the quality" 
and (1)(b)  "specific disadvantages" regarding the viability of sectors was carried out on the basis of 
FADN data.  

Size and construction of farm samples and sub-samples: The adoption of some specific methods and 
aggregation criteria were required. Namely: 

a-  Size and grouping of samples. For some Member States, in each of the years 2010, 2011 and 2012 
the  size  of  samples  of  specialist  farms  in  some  sectors  was  below  the  minimum  allowed  for 
publication (15 units). The size of samples of farms benefiting from the measures under the objectives 
(1)(a)(ii) “improving the quality” and (1)(b) “specific disadvantages” was even smaller in a number 
of sectors and in Member States that have implemented these measures. For some sectors (e.g. sugar 
beet, durum wheat, olive oil) the size of annual samples is insufficient even after grouping Member 
States (all Member States that have/have not implemented these measures).  
Accordingly,  in  order  to  minimise  the  number  of  undersized  samples,  the  samples  used  for  the 
analyses  are  those  resulting  from  the  sum  of  samples  of  each  of  the  three  years  under  review 
(2010+2011+2012). This solution is possible due to the fact that the analysis is based on indicators 
(ratios of a number of variables) and not on absolute values. This solution also has the advantage of 

54 

Evaluation of Article 68 measures 

presenting  results  based  on  averages  for  the  three-year  period  (thus  eliminating  short-term 
influences).  

b-  Grouping  of  farms  by  specialisation.  In  most  cases,  specialised  farms  in  one  main  sector  are 
defined and grouped into different TFs of the FADN. Exceptions are specialised farms in durum 
wheat and sugar beet, for which there is no specific TF. The samples of specialised farms in these 
two TFs were therefore obtained by extrapolating: 
  from the entire sample of farms of the TF 1510 (specialist COP) those farms that produce durum 
wheat (K121), for which the ratio between the production value of durum wheat and Total Output 
is at least 60% (K121TP/SE131≥60%) 

  from the entire sample of farms of the TF 1610 (COP and root crops combined) those farms that 
produce sugar beet (K131), for which the ratio between the production value of sugar beet and 
Total Output is at least 60% (K131TP/SE131≥60%) 

c-  Creation of subsamples. Since the purpose of the analysis is to assess the role played by Article 68 
measures “improving the quality” and “specific disadvantages”, in Member States where these two 
measures (either one or both) have been implemented in various sectors, farms in the FADN sample 
were divided into two groups:  
  farms benefiting from Article 68 Specific Support. In this case it is conceivable that most aid 

received derives from the two measures considered  
  farms not benefiting from Article 68 Specific Support  
  For Member States where these two measures have not been implemented, all farms in the FADN 
sample have been considered as “non-recipient”, even if in one or two cases the presence of aid 
pertaining to Article 68 has been detected, but obviously for other measures not relevant to the 
analysis (environment, etc.) that have no influence on competitiveness. 

d-  Problems concerning samples and subsamples: 

  Germany did not specify aid concerning Article 68 in the specific SE650 item, but presumably in 
the item JC800 (subs. environment). Accordingly, in the only sector (dairy) in which Germany 
implemented measures having an influence on competitiveness, the amounts relating to support 
are absent. 

  For Denmark, the FADN sample for 2010 is empty.  Accordingly, the values obtained for this 

country are the average for the years 2011 and 2012. 

Regional-level analyses have not been conducted (due in part to the small size of FADN samples in 
most regions). The only exception is the UK, solely for the cattle sector. In this case Scotland (region 
code 431) was separated from the rest of the UK (Scotland is the only UK region having implemented 
the Article 68 (1)(b) “specific disadvantages”). 

In the case of durum wheat, we also considered the case of Italy in the analysis. In Italy durum wheat 
(as well as other oilseed crops) was object of the environmental Measure under the objective (1)(a)(v). 
A necessary condition for the eligibility of the Specific Support was the use of certified seeds.  

Methods for calculating indicators: For each Member State/sector combinations and their aggregations, 
the average Return On Investments (ROI) for each FADN sample and subsample was calculated.  

ROI was calculated as a percentage ratio between Earnings Before Interest and Taxes (EBIT) and Total 
Assets (SE436).  

ROI = % (EBIT/TA)  

In turn, EBIT is calculated by subtracting from Farm Net Value Added (SE415) the Wages paid (SE370), 
Rent paid (SE 375) and family labour value (FLV).  

EBIT = FNVA – (WP+ RP + FLV). 

The FLV should correspond to at least the opportunity cost of paid employment.  The benchmark used 
is the average wage of farm employees, obtained from the spending item Wages Paid (WP) of the sample 
of FADN farms, calculated (for each year 2010, 2011 and 2012) at Member State level for all sectors.   

In practice, for each Member State:  

FLVci= (WPc/paid AWUc)* Σ FWUci (i =1..n farms of the FADN sample in Member State) 

55 

Evaluation of Article 68 measures 

The unit average wage in the Member State was calculated as follows:  

WPc/paid AWUc = Σ WPci/ Σ paid AWUci 

The unit average wage of the Member State was calculated as a Member State average for the set of 
sectors,  and  is  thus  the  same  for  all  sectors.  This  assumes  that,  on  average,  the  labour  cost  of  farm 
employees (contractual wage) is the same within the same Member State, regardless of the sector to 
which the farms in which hired workers operate belong (1). 

In  order  to  make  uniform  calculations  in  the  different  Member  States,  paid  AWU  and  FWU  were 
computed  by  dividing  Paid  labour  Input-hours  (SE021)  and  Unpaid  labour  Input-hours  (SE016)  by 
1,800 hours/year. The results of the estimated value of family labour depend on the calculated values of 
average wages of each Member State. These values are very lacking in uniformity, and this should be 
borne in mind when looking at the results of the analyses.   

To calculate  the  ROI  of  recipient  farms  in  the  absence  of  Specific  Support of  Article  68 (simulated 
situation), the variable SE650 (Article 68 aid) was deducted from actual FNVA values. The calculation 
was carried out only for recipient farms of Member States that have implemented the measures under 
the objectives “improving the quality” and “specific disadvantages” in the various sectors. In other cases 
(countries not implementing the measures in question) the possible presence of Article 68 aid was not 
deducted  from  FADN,  being  different  measures  not  having  an  influence  on  the  viability  of  primary 
production. 

5.3.2  RESULTS OF THE ANALYSIS 

5.3.2.1  Analysis of ROI magnitude at aggregated level 

The analysis of the average ROI of each sector involved in the implementation of Measures (1)(a)(ii) 
and (1)(b) for which there are sizeable farm samples, distinguished between: 

  Recipients of Specific Support for the set of Member States that have  implemented the measures 

under the objectives (1)(a)(ii) quality and (1)(b) specific disadvantages ; 

  Non-recipients  of  Specific  Support  of  for  the  set  of  Member  States  that  have  implemented  the 

measures under the objectives (1)(a)(ii) quality and (1)(b) specific disadvantages ; 

  Farms of the set of Member States that have not implemented  the measures under the objectives 
(1)(a)(ii) quality and (1)(b) specific disadvantages (thus naturally farms not benefiting from Specific 
Support for these measures). 

Moreover, in the case of recipients of Specific Support, the ROI has been computed in the real situation 
(with Specific Support) and in a simulated situation (without Specific Support). 

1 This methodological choice represents clearly a simplification of reality, but makes it possible to limit the variability of the unit value of 
wages calculated for different samples (variable samples) of FADN farms, in particular in the sector/Member State combinations that have a 
limited farm sample. In actual facts, wages are likely to differ depending on the degree of specialisation of hired workers. It should be stressed 
however that it is not possible to distinguish possible differences even when analysing single sectors. 

56 

 
 
 
                                                      
Evaluation of Article 68 measures 

Figure 14: ROI values of Art. 68 recipients and non-recipients: Average values (2010-2011-2012) in the 
group of Member States that have implemented Measures under the objectives (1)(a)(ii) quality and (1)(b) 
specific disadvantages in various sectors and in the group of Members states that have not implemented 
the measures (%) 

Art. 68 recipients versus non recipients others MS 

Art. 68 recipients versus non recipients same MS 

Source: based on FADN data 

Considering the current capital profit levels (bonds, etc.), the ROI in all sectors and for all groups of 
farms  considered  was  not  low:  the  global  average  being  3.15%  (with  Specific  Support)  and  2.78% 
(without Specific Support). In the case of tobacco it reached quite high values (about 7% on average).  

Furthermore,  although  the  value  of  unpaid  (family)  labour  was  considered  as  a  cost  (estimated  at 
opportunity cost), the average ROI was always >0, with the sole exception of the “cattle” sector, but 
only for the set of Member States that have not implemented the measures under the objectives (1)(a)(ii) 
quality and (1)(b) specific disadvantages. This happened in both the real situation and the simulated 
situation.  On  average,  therefore,  the  sectors  of  recipient  farms  would  have  been  viable  even  in  the 
absence of Specific Support. In other words, on average, the absence of Specific Support would have 
allowed in any case the remuneration of family labour at opportunity cost level, as well as an adequate 
return on capital (naturally at a lower level than the real situation with support). 

In absolute terms tobacco was the sector in which the implementation of Specific Support had the biggest 
impact (4.07 extra points of ROI). Conversely, in relative terms the sector that benefited the most is 
durum wheat, for which the average ROI (despite remaining at very low levels) grown by over three 
times, followed by sheep and goat, whose average ROI grown by 2.9 times. On the other hand, there 
was a very limited impact in the “sugar beet” and “olive oil” sectors, for which the Specific Support 
caused an increase in ROI of about 20%. 

In  general,  farms  benefiting  from  Article  68  measures  generated  an  ROI  which,  in  the  absence  of 
Specific Support (simulated situation), was lesser than that of non-recipient farms of the same Member 
State. This happened in all sectors with the exception of cattle and olive Oil. In the case of Tobacco and 
dairy,  the  difference  is  particularly  large  (the  ROI  of  recipients  is  more  or  less  half  that  of  non-
recipients).  

The payment of Specific Support changed the situations:  

-  support  in  the  dairy,  sheep  and  goat,  cotton  and  sugar  beet  sectors  made  it  possible  to 

- 

- 

approach the ROI values of non-recipient farms of the same Member State;  
for the durum wheat and Tobacco sectors Specific Support made it possible to attain  an 
ROI value above that realised by non-recipients of the same Member State; 
for the cattle and olive oil sectors, Specific Support raised further the advantage already 
existing of recipients compared with non-recipients of the same Member State; 
In the cattle, dairy and olive oil sectors, recipients of Article 68 measures had a higher ROI than that 
generated by the set of Member States that have not implemented the  measures under the objectives 
(1)(a)(ii) quality and (1)(b) specific disadvantages even in the absence of support. On average therefore, 
these sectors were already in a state of relative advantage prior to the implementation of Article 68.  On 

57 

CattleDairySheep and goatCottonDurum wheatSugar beetOlive oilTobacco-2.000.002.004.006.008.0010.00-2.000.002.004.006.008.0010.00Recip Art. 68.Others MSC1: with 68C2: without 68CattleDairySheep and goatCottonDurum wheatSugar beetOlive oilTobacco0.001.002.003.004.005.006.007.008.000.001.002.003.004.005.006.007.008.00Receip Art. 68Not recep MS impl 68C1: with 68C2: without 68 
 
 
 
 
 
Evaluation of Article 68 measures 

the  other  hand,  in  all  other  sectors  the  simulated  situation  shows  a  relative  disadvantage,  which  the 
application of Specific Support reduced (sheep and goat, cotton, durum wheat, tobacco) or cancelled out 
(sugar beet). 

5.3.2.2  Analysis of ROI by Member State 

The results of ROI analysis at single Member State (1) level that have implemented the measures under 
the objectives (1)(a)(ii) quality and (1)(b) specific disadvantages hid more complex situations relative 
to the analysis at aggregated level. In some sectors the variability of the average ROI between Member 
States was quite high . This is evident in the sectors in which measures have been implemented by a 
large number of Member States (cattle, dairy, sheep and goat and, to a lesser extent, tobacco) (2). 

In the cattle sector, there was a significant number of Member States that have implemented Article 68 
in which average ROI is <0 (France, Ireland, Poland, Finland, Slovenia, UK Scotland). In these Member 
States, the implementation of Specific Support generally helped to reduce negativity, but not to invert 
the sign or to annul it. Accordingly, in these countries (particularly in Slovenia, Poland and Ireland), the 
viability of the sector was and continued to be (albeit to a lesser extent) problematic. It may therefore 
be concluded that the survival of farms in the sector was possible only by deciding to remunerate family 
labour below the opportunity cost. 

On the other hand, in other Member States that have implemented Article 68, the average ROI was >0 
(very  high  in  Greece,  Italy  and  Czech  Republic)  in  all  analysed  groups  of  farms  (non-recipients, 
recipients and recipients in the simulated situation without Article 68). In the case of the Czech Republic, 
Greece, Spain, Italy and (to a lesser extent) Belgium, moreover, the ROI of recipient farms was higher 
than that of non- recipient farms even in the absence of Specific Support. 

In the sheep and goat sector, as for cattle, the average ROI was <0 (more in Finland, less in France and 
Ireland) or very close to zero (Italy) in all groups of farms in quite a number of Member States. There 
are also some Member States in which ROI was >0 or <0 depending on the situation (Non-recipient/ 
Recipient): i.e. Bulgaria and Netherlands. Finally, in the other Member States, ROI was always >0 (very 
high in Greece). In such a complex situation, the role played by Specific Support on the viability of the 
sector was varied: in France it enabled an overturning of the situation of recipients, from <0 to (slightly) 
>0, compared with  ROI<0 for non- recipients. In Italy it took the ROI of recipients from a value close 
to zero to a value greater than zero, but without reaching the ROI of non-recipients (higher). In Portugal 
and Spain support further reinforced the ROI of recipients, already higher than that of non-recipients. 
On the other hand, two extreme cases were noted: Greece, where support further strengthened an ROI 
already extremely high, and Finland, where support managed to relieve a very difficult situation, but in 
both cases remaining below the ROI levels of non-recipients. 

In the dairy sector, unlike the other two livestock sectors, average ROI values <0 were not observed, 
with the exception of Slovakia and (but only for non-recipients) Latvia. Finland had an ROI close to 
zero in all groups of farms. Apart from these exceptions, the implementation of support came in a context 
in  which  sectors  were  already  viable.  In  most  cases  however  (with  the  exception  of  Italy,  Latvia, 
Slovakia and Finland), the ROI of recipients in the simulated situation without Article 68 was lower 
than that of non-recipients, but remained below even with support. Accordingly, in all these Member 
States the implementation of measures helped to reinforce viability, but without reaching the capital 
return levels of non-recipient dairy farms. 

1  Only for MSs presenting a sizeable sample of farms, ≥ 15 units.  For cotton and sugar only one MS has implemented measures, or that has a 
sizeable sample. Accordingly, the analysis is in line with the global analysis. 

2 Apart from all the factors that can have an influence on ROI values, a role is played by the average unit wage of each Member state, which 
also represents the reference value for estimating the value of family labour (opportunity cost). Generally speaking, lower average ROI was 
realised in Member states where the unit wage is higher (Sweden, Finland, France, United Kingdom), the opposite was true in Member states 
where wages are lower (Greece, Spain, Italy, Portugal and EU-12 Member states). This confirms the role of the different wages levels of the 
Member states on the EBIT level. 

58 

                                                      
Evaluation of Article 68 measures 

In the durum wheat sector, only Greece, France and Italy had sizeable samples. In Greece and Italy 
the average ROI of recipients in the simulated situation without Article 68 was >0, but very close to 
zero. Support thus helped to reinforce the viability of production. However, in none of the three Member 
States (Spain in particular) did support make it possible to attain the average ROI level of other Member 
States that have not implemented the measures.  

In the olive oil sector, only Greece and Italy had sizeable samples. In both cases the average ROI was 
>0 in all groups of farms, but the initial level (without support) was much higher for recipients in Greece 
(where  the  ROI  of  recipients  was  even  higher  than  that  of  non-recipients).  Support  did  not  make  a 
substantial difference on the sector viability in either of the two Member States. In Italy however support 
made it possible to approach (but not reach) the ROI level of non-recipients and of producers of the 
group of Member States that have not implemented the measure (Spain in particular).   

In the tobacco sector, the average ROI was >0 in all groups, with the exception of Spanish recipients 
in the simulated situation. In this case, Specific Support played an extremely important role in all the 
Member States (albeit to a lesser extent in Italy), taking ROI up to particularly high average values. 
Moreover, in all Member States Article 68 enabled recipients to take the ROI value well beyond that of 
non-recipients, and (in the case of Spain and Poland) well beyond the average level of the group of 
Member States that have not implemented the measures. 

5.3.2.3  Frequency  of  producers  realising  ROI>0  and  role  played  by 

Specific Support  

Based on the individual situations of farms composing the samples, we calculated the percentage of 
producers that realised ROI>0 (average for the years 2010-11-12) out of all producers of the respective 
samples: i) the recipients of the measures; ii) recipients of measures in the simulated situation (without 
support); iii) non-recipients of Member States that have implemented the measures; iv) producers of 
Member States that have not implemented the measures. 

Table 16: Percentage of producers with ROI >0, recipients and non-recipients of Article 68: average 
values (2010-2012) in the group of Member States that have implemented the measures under (a)(ii) 
quality and (b) disadvantaged sectors objectives in various sectors (%) and in the group of Members states 
that have not implemented the measures (%) 

Source: based on FADN data 

The first point noted was that the percentage of farms that realised ROI>0 varies according to the sector:  
the  cotton  sector  (only  in  the  case  of  non-recipients  in  Member  States  that  have  implemented  the 
measures) is the one with the highest percentage (85%). In some other cases the percentage of producers 
having a viable sector was below 50%: this was so for cattle (all analysed farms), durum  wheat (all 
analysed farms except for non-recipients in Member States that have implemented the measures) and 
olive oil (in the farms of Member States that have not implemented the measures). Therefore, a more 
or  less  large  percentage  of  farms  managed  to  keep  its  business  viable  only  by  reducing  the 
remuneration of family labour below its opportunity cost, and without being able to offer a return 
on invested capital.  

The second  observation is that  in  all sectors, with the  exceptions  of sugar  beet  and  olive  oil, the 
percentage of recipients with ROI>0 in the simulated situation (without support) was lower than 
that of non-recipients in Member States that have implemented the measures. The gap between the 

59 

A : MS not implem. Art. 68B: MS implem. Art. 68C1: with Art. 68C2: without Art. 68B-AC1 - BC2 - BC1 -  C2Cattle38.041.540.937.43.4-0.6-4.13.5Dairy60.559.659.055.8-0.9-0.5-3.73.2Sheep and goat59.354.658.950.9-4.74.2-3.78.0Cotton68.485.281.368.816.9-4.0-16.512.5Durum wheat45.766.448.042.120.7-18.4-24.35.9Sugar beet68.962.073.373.3-6.911.311.30.0Olive oil49.152.466.162.83.413.710.43.3Tobacco61.152.065.950.9-9.113.9-1.215.0Recipiens mesures Art. 68Not recipiens mesures Art. 68Difference (% points) 
Evaluation of Article 68 measures 

two percentages was considerably higher for durum wheat and cotton (-24.3 and -16.5 percentage points 
respectively).  On the other hand, in these two sectors the simulated percentage was largely in line with 
that of the set of Member States that have not implemented the measures. 

Concerning the role played by Specific Support on the percentages of recipients with ROI>0: 

  The most important role was played (on average) in the tobacco and cotton sectors, where the 
percentage  of  producers  having  ROI>0  grew  by  15.0  and  12.5  points  respectively  (+29.5%  and 
+18.2% of producers that become viable). In the case of tobacco this percentage exceeded by far the 
percentage  of  non-recipients.  In  the  case  of  cotton  support  has  significantly  narrowed  the  gap 
between recipients and non-recipients. Specific Support played, also, a quite important role on the 
sheep and goat sector (+8 points); 

  The least important role was played (on average) in the sugar beet (no % variation), Dairy 
(+3.2 percentage points) and olive oil sectors (+3.3 points). In these sectors, therefore, Specific 
Support enabled only a small percentage of recipients to pass from a non-viability to a viability 
situation (none for sugar beet; for olive oil only 5.3% of producers that were not viable became so; 
5.8% for the dairy sector; 9.3% for the cattle sector). This means, therefore, that a large percentage 
of recipients were and remained non-viable even after Article 68 implementation (for instance, about 
59% of recipients in the cattle sector, 52% of recipients in the durum wheat sector, 41% of recipients 
in the dairy and sheep and goat sectors, etc.). 

In  all  of  these  cases,  therefore,  Specific  Support  proved  to  be  a  necessary  condition,  yet  not 
sufficient to ensure viability for a large percentage of recipient farms. 

5.3.2.3.1  Frequency of producers realising ROI>0 and role played by Specific Support at 

Member State level 

The analysis at Member State level of the percentage of producers with ROI >0 in various sectors and 
in  the  different  groups  of  farms  (non-recipients;  recipients  in  the  real  situation,  recipients  in  the 
simulated situation – without support), showed a complex situation at the level of single Member State. 

The graphs below show the real and simulated situations: the x-axis represents the percentages of non-
recipient producers with ROI >0. The y-axis represents the percentages of Specific Support recipients 
with ROI >0, in the real situation (with Article 68 support) and in the simulated situation (without Article 
68). The map bisector shows the existing distance (percentage points) between Recipients in the two 
situations (real and simulated) and non-recipients: below the bisector are positioned the sectors in which 
the  percentage  of  recipients  with  ROI  >0  was  lower  than  that  of  non-  recipients,  and  vice  versa. 
Therefore, all points below the bisector correspond to more critical situations  

The distance of the position of recipients in the real and simulated situation represents the impact of 
Article 68 measures in terms of percentage points of recipients whose activity became viable thanks to 
Specific Support. 

Figure 15: Percentage of producers with ROI >0 in Member States that have implemented the measures 
under objectives (1)(a)(ii) quality and (1)(b) specific disadvantages in various sectors: non-recipients; 
recipients; recipients in the simulated situation.  

Cattle 

Dairy 

60 

BELCZEDANELLESPFRAIREITAPOLPORSUOSVNScotBELCZEDANELLESPFRAIREITAPOLPORSUOSVNScot10.020.030.040.050.060.070.080.010.020.030.040.050.060.070.080.0Recipiens Art. 68Not Recipiens Art. 68With SSWithout SSBGRCZEESPESTFRAHUNITALVAOSTPOLPORROUSUOSVKSVNBGRCZEESPESTFRAHUNITALVAOSTPOLPORROUSUOSVKSVN10.020.030.040.050.060.070.080.090.010.020.030.040.050.060.070.080.090.0Recipiens Art. 68Not Recipiens Art. 68With SSWithout SS 
 
 
 
Evaluation of Article 68 measures 

Sheep and goats 

Durum wheat 

Olive oil 

Tobacco 

Source: based on FADN data 

The analysis highlighted different situations within each sector at Member State level, for which the 
Specific  Support  had  different  impacts.  In  particular,  in  all  three  groups  considered  (non-recipient, 
recipients in the real and simulated situation), farmers economically viable were less than 50%: 

• 

• 

• 

in 10 out of 13 Member States in the cattle sector: the strongest impact of Specific Support in this 
sector was observed in Finland, Denmark and France;  
in 9 out of 10 Member States in the sheep and goat sector : the strongest impact of Article 68 was 
observed in France and Bulgaria.  
a serious problem was also observed in durum wheat and olive oil in Italy, tobacco in Spain and 
Poland: Spain is the Member State where Specific Support had the largest impact in the latter sector. 
In the dairy sector the viability of producers appeared to be better: only in Finland and Slovakia the 
percentage  of  producers  (in  all  groups  of  farms)  with  ROI>0  was  lower  than  50%.  In  some  cases, 
furthermore, the percentage was below 50% just for some groups of farms (non-recipients in Bulgaria 
and Latvia; recipients in Poland and Slovenia).  

Finally, in some combinations Member State/sectors, the % of producers with ROI>0 was higher relative 
to non-recipients before the implementation of Article 68 (e.g. Finland, Italy and Spain in the cattle 
sector; Bulgaria, Romania in dairy sector; Ireland, Portugal and Spain in sheep and goat sector, etc). In 
these cases, Article 68 support increased the distance between recipients and non-recipients.  

5.3.3  ROLE PLAYED BY THE IMPLEMENTATION OF THE ARTICLE 
68  MEASURE  UNDER  OBJECTIVE  (1)(A)(II)  ON  THE 
IMPROVEMENT OF THE TECHNICAL QUALITY OF PRODUCTS  

The role played by the measure under the objective (1)(a)(ii) on the improvement of the technical quality 
of products was analysed, with different indicators according to the product, in the following sectors: 
beef meat, sheep meat, cow milk, sugar beet and tobacco 

61 

BGRELLESPFRAIREITANEDPORSUOBGRELLESPFRAIREITANEDPORSUO10.020.030.040.050.060.070.080.090.010.020.030.040.050.060.070.080.090.0Recipiens Art. 68Not Recipiens Art. 68With SSWithout SSELLITAFRAELLITAFRA30.040.050.060.070.080.090.0100.030.040.050.060.070.080.090.0100.0Recipiens Art. 68Not Recipiens Art. 68With SSWithout SSELLITAELLITA30.040.050.060.070.080.030.040.050.060.070.080.0Recipiens Art. 68Not Recipiens Art. 68With SSWithout SSESPITAPOLESPITAPOL20.030.040.050.060.070.080.020.030.040.050.060.070.080.0Recipiens Art. 68Not Recipiens Art. 68With SSWithout SS 
 
 
 
 
 
 
 
Evaluation of Article 68 measures 

  Beef meat 

In  the  beef  meat  sector,  the  measure  under  the  objective  (1)(a)(ii)  focused  on  technical  quality 
improvement only in Italy and Portugal.  

The technical parameter used to verify the role played by the measure was the carcass weight evolution 
of four animal categories: bulls, cows, heifers, veal.  

The hypothesis is that a heavier carcass is generally paid at a higher price, as it produces higher meat 
yields.  In  fact,  carcasses  are  composed  by  (at  least)  a  part  of  meat  (which  is  actually  paid  by  the 
consumer) and a bone part (by-product with no value). In general, an increase of the carcass weight 
implies an increase of the ratio meat / bone, and therefore of the part actually sold at retail. The evolution 
of the carcass weight was therefore used as a proxy of quality improvement. 

In addition, in order to determine the relative competitiveness, we analysed the evolution of the ratio 
between carcass weight in the Member States having implemented the measure and the average carcass 
weight of all the other EU Member States: EU-(PT + IT).  

Figure 16: Beef meat - carcass weight evolution by animal category (2000-2013, kg) 

Bulls 

Cows 

Heifers  

Veals 

Source: Eurostat 

The results are quite dissimilar, both at Member State and animal category level. In general, carcass 
weight evolution was positive in Italy (especially for bulls and heifers) and fairly negative in Portugal 
(with the exception of veal). The different implementation systems of the 2003 CAP (1) seem to have 
played a role on the trends. Moreover, the implementation of Article 68 seems to have contributed in 
some cases to change these trends: a growth acceleration for bulls and a decrease for heifers and calves 
in the case of Italy. A slowing down of the decline for heifers, and growth for calves in the case of 
Portugal. 

1 Partial decoupling + Article 69 in Portugal and Decoupling + Article 69 in Italy. 

62 

0.60.650.70.750.80.850.90.9511.051.125027029031033035037039020002001200220032004200520062007200820092010201120122013RatioKgPTITPT/EU OthersIT/EU Others0.70.720.740.760.780.80.820.840.860.880.925025526026527027528020002001200220032004200520062007200820092010201120122013RatioKgPTITPT/EU OthersIT/EU Others00.20.40.60.811.218020022024026028030020002001200220032004200520062007200820092010201120122013RatioKgPTITPT/EU OthersIT/EU Others0.60.70.80.911.11.21.3130135140145150155160165170200020012002200320042005200620072008200920102011201220132014RatioKgPTITIT/EU OthersPT/EU Others 
 
 
 
 
 
                                                      
Evaluation of Article 68 measures 

The analysis of the ratio evolution, that highlights the changes in the relative competiveness, confirmed 
these trends: 

  with regard to Italy, there was an opposite phenomenon between bulls and veal. In the first case 
Article 68 implementation seems to have helped to reverse the downward trend, while in the 
second case the negative trend continued without interruption: the average values observed in 
the  three  subperiods  (before  the  2003  CAP,  between  2005  and  2009  and  in  the  period  of 
implementation  of  Article  68  were  decreasing  (1.09-1.04-0.91  respectively).  For  cows  and 
heifers, there were no significant changes. 
as regards Portugal, Article 68 did not influence the trends, since the average values of the ratio 
for  all  animal  categories  in  the  three  subperiods  were  progressively  decreasing.  The  only 
exception concerns cows that presented a reversal of the trend in the last two years. 

 

Therefore,  the  implementation  of  Specific  Support  does  not  seem  to  have  produced  important 
effects: in the case of Portugal, the support did not allow to stop the negative trend (1), and in the 
case of Italy slight positive effects were observed only for bulls. 

In Italy, however, results showed an increase of beef cattle registered in studbooks relative to the long 
term trend (the average 2010-2012 number of registered cows is 160,752; number of registered cows 
without Specific Support is 154,700; the increase due the measure implementation was +3.9%). This 
leads to think that there was a quality improvement of cattle of beef meat breeds but more deferred in 
time. 

  Sheep meat 

In  the  sheep  meat  sector,  the  measure  under  the  objective  (1)(a)(ii)  focused  on  technical  quality 
improvement only in Finland, Italy and Portugal. The carcass weight evolution was analysed for two 
animal  categories:  lambs  and  muttons.  The  relative  competitiveness  was  analysed  through  the  ratio 
between carcass weight in the Member States having implemented the measure and the average carcass 
weight of all the other EU Member States: EU-(PT+IT+ FI). 

Figure 17: Sheep - carcass weight evolution by animal category (2000-2013, kg) 

Lambs 

Muttons 

Source: Eurostat 

In general, after the implementation of Article 68 the evolution of lamb carcass weight was positive in 
Portugal and Finland, and presented a more uncertain evolution in Italy.  

Nonetheless,  the  ratio  development  had  not  a  clear  trend:  the  average  ratio  in  the  three  subperiods 
remained  nearly  constant  in  all  three  Member  States:  0.5  in  Italy,  0.7  in  Portugal  and  about  1.2  in 
Finland.  This  means,  of  course,  that  carcass  weight  evolution  in  the  three  Member  States  was  not 
significantly different from the trend of the other Member States average. 

1 According to interviews, slaughtered bovines show a steady decrease in overall production since 2006 and a decrease in the proportion of 
better quality carcasses (classes S, E, U and R). 

63 

0.000.200.400.600.801.001.201.401.604.06.08.010.012.014.016.018.020.020002001200220032004200520062007200820092010201120122013RatioKgPTFIITIT/EU OthersPT/EU OthersFI/ EU Others0.000.200.400.600.801.001.2010.012.014.016.018.020.022.024.026.028.020002001200220032004200520062007200820092010201120122013RatioKgPTFIITIT/EU OthersPT/EU OthersFI/ EU Others 
 
                                                      
Evaluation of Article 68 measures 

Regarding muttons, there was a continuous decrease of carcass weight in Portugal, which is opposed 
to a marked increase in Italy after Article 18 implementation (. Finland presented a fluctuating trend (1). 

The evolution of the ratio confirms broadly the average weight evolution, with a significant growth in 
Italy and a decrease in Portugal. 

Therefore, this leads to conclude that the implementation of the measure under objective (1)(a)(ii) 
concerning technical quality of sheep meat did not have noticeable effects in the case of lambs, 
and produced some positive effects only in the case of muttons in Italy. 

  Cow milk  

In the milk sector, the measure under objective (1)(a)(ii) focused on technical quality improvement only 
in Italy. To examine the role played by the measure, the technical parameter used was the protein content 
evolution (as foreseen by the Italian implementation rules (2)). The protein content contributes, in fact, 
to define the commercial value of milk, and also its aptitude to be processed into different dairy products. 

Moreover, to examine the relative competitiveness, we analysed the evolution of the ratio between the 
average of the parameter in Italy and the average parameter of the EU-15 (3). 

Figure 18: Cow milk: Protein content evalution (2000-2013, %) 

Source: Eurostat 

Data showed a stabilization of the protein content in the period of implementation of Article 68. The 
evolution of the ratio confirmed this result: the ratio "protein" remained almost constant (on average) 
after 2010. 

Therefore,  in  Italy  the  technical  quality  of  milk  does  not  seem  to  have  benefited  from  the 
implementation of Article 68 (4). 

  Sugar beet 

In the sugar sector, the measure under objective (1)(a)(ii) focused on technical quality improvement 
only in Italy and Spain. 

To evaluate the effect of the implementation of the measure on technical quality we used two indicators: 
the sugar content of beets (%) and the yields per hectare in sugar (t/ha) (partly dependent on the first).  

It should be considered that both indicators are influenced by at least two external factors: the first is the 
suitability of the production area for the culture; the second is the weather conditions. Concerning the 
first one, the CMO reform of the sector influenced greatly the abandonment of the crop in areas in less 

1  According  to  interviewees,  lamb  slaughter  weight  is  the  main  quality  parameter  in  the  case  of  lamb  meat:  the  average  weight  of  lamb 
slaughtered was slightly more than 17 kilos in Finland before the introduction of Specific Support. According to agricultural representatives 
Art.68 eligibility criteria of 18 kg was relatively high because the majority of lambs belong to the Finnish race also producing wool, whereas 
foreign breeds is used for meat only (English/Irish). However, according to national authorities the choice of this criteria aimed at enhancing 
quality of the lamb while being realistic regarding the effort asked to the (small often non-professional) farmers. National authorities stated 
that the average weight of carcasses have increased over 18 kg along with the number of carcasses. 
2 The other eligibility criteria concern the somatic cell and germs content. However, there is no data available on this two parameters. 
3  The  available  data  did  not  allow  the  computation  of  the  average  parameters  of  the  whole  EU,  excluding  MS  interested  in  the  measure. 
Therefore EU-15 data also include the results obtained in the two MS concerned. 
4 According to interviewees, in Italy, the aid actually paid was about 5 cents per litre and thus the measure had any effect: quality is already 
paid by the market on the basis of delivery contracts between farmers and industry. 

64 

0.9550.9600.9650.9700.9750.9800.9850.9900.9951.0003.153.203.253.303.353.4020002001200220032004200520062007200820092010201120122013Ratio%ITIT/EU-15 
                                                      
Evaluation of Article 68 measures 

suitable areas, and therefore the crop concentration in a limited number of areas. Therefore, the trend of 
the parameters average values is in part due to this process. Concerning the second, weather conditions 
cause a high variability around the trend (independently from policies). 

Figure 9: Sugar content in the beet 

Figure 10: White sugar yield (t/ha) 

Source: CEFS 

In both Member States having implemented the measure under objective (1)(a)(ii), there was a regular 
improvement of both parameters, and in particular of the sugar yields per hectare (which implied also a 
net improvement, besides the sugar content of beets, of the productivity of the crop - yields in beets per 
hectare). 

In Spain the sugar content increased from an average of 17.6% in the period before the 2003 CAP to an 
average  of  17.86%  in  the  period  of  implementation  of  Article  68.  However,  the  parameter  values 
stabilize, after the strong growth in the first year of implementation. In the case of Italy, sugar content 
was stable around an average of 15.8%.  

Regarding  white  sugar,  yields  improved  in  Spain  from  9.57  ton/ha  to  10.13  t/ha,  with  a  regular 
progression  between  the  analysed  periods,  and  in  Italy  from  5.88  to  10.70  t/ha  with  an  acceleration 
between the period of Article 68 implementation and the previous ones. 

The evolution of the ratio gives further evidence on the "absolute" improvement (and therefore of the 
relative competitiveness) of the crop in the two Member States, in particular in the case of white sugar 
yields. 

In addition, for explaining the significant improvement achieved in Italy the high rate of coverage of 
support should be considered, i.e. Article 68 support covered more than 95% of sugar beet producers 
remained active after the 2006 reform (1).  

Given that the effects of the sugar CMO reform on the improvement of the "average" values of 
the parameters resulted in the stabilization of the production areas, the implementation of Article 
68 appears to have contributed to the further improvement of the parameters, in particular in the 
case of the white sugar yields. 

  Tobacco 

In the tobacco sector, the measure the objective (1)(a)(ii) focused on technical quality improvement in 
France, Italy, Spain and Poland. 

Specific Support was granted to tobacco fulfilling technical parameters of quality already used before the 
implementation of Article 68, and in any case established by national implementation rules. In general, these 
parameters are the following (2): 

1 According to interviews Article 68 support contributed to maintain producer’s interest in the use of certified and pelleted seeds, declined after 
the reform even if it was a consolidated practice in the sector. In fact, it proved to be necessary to increase the unitary aid for the last year of 
the Specific Support implementation in order to stimulate grower’s interest to continue production and thus allow the survival of the processing 
industry. 
2 Source : National Studies  

65 

0.750.800.850.900.951.001.0510.0011.0012.0013.0014.0015.0016.0017.0018.0019.002000/012001/022002/032003/042004/052005/062006/072007/082008/092009/102010/112011/122012/132013/14Ratio %ItalySpainRatio IT/Oth EURatio ES/ Oth EU0.400.500.600.700.800.901.001.101.201.301.400.002.004.006.008.0010.0012.0014.0016.002000/012001/022002/032003/042004/052005/062006/072007/082008/092009/102010/112011/122012/132013/14RatioTon/haItalySpainRatio IT/Oth EURatio ES/ Oth EU 
 
 
 
                                                      
Evaluation of Article 68 measures 

Table 17: Quality elements of the raw tobacco in leaves 

Chemical properties 

Physical characteristics and 
appearance 

Organoleptic and functional 
characteristics 

Nicotine content  
Condensed content  
Nitrosamines content  
Sugar content 
Etc. 
Colour 
Tissue  
Grain 
Maturation 
Elasticity 
Absence of diseases 
Leaf size  
Leaf integrity 
Taste 
Aroma 
Combustibility 
Absence of pesticides 
Absence of foreign bodies (plastic wires, etc) 

Source: Interviews 

At national level, quality is defined through the use of evaluation grids, resulting from inter-trade agreements 
between producers and processors.  

These grids allow to give a score to tobacco on the basis of parameters related to quality elements. Depending 
on the score, tobacco is classified in quality classes corresponding to a price comprised between a minimum 
and a maximum and established in the cultivation contracts. 

The choice to grant Specific Support only to the first classes of quality (i.e. classes with higher scores) led to 
the  exclusion  from  Article  68  support  of  the  less  efficient  tobacco  producers,  thus  accelerating  the  exit,  
started with the CMO reform, of producers from the sector. This acceleration strengthened the decrease in 
surfaces and production volumes already underway in the period before Article 68 implementation.  

Therefore, the average quality of tobacco further increased relative to the period before the Specific 
Support implementation, with positive effects on the demand / supply balance (no accumulation of 
unsold stock since 2010) (1). 

5.3.4  ROLE PLAYED BY THE IMPLEMENTATION OF ARTICLE 68 
MEASURE  UNDER  THE  OBJECTIVE  (1)(A)(II)  ON  THE 
IMPROVEMENT  OF  THE  QUALITY  OF  PRODUCTS  LINKED  TO 
THE TERRITORY AND/OR TO PRODUCTION METHODS 

The analysis of the role played by the implementation of the measure under objective (1)(a)(ii) on the 
improvement of quality of products linked to the territory and/or to production methods was possible 
only  for  the  olive  oil sector  and  (partially) for  Italy.  For  the  other  Member  States  implementing  the 
measure in the olive oil sector (Greece and Portugal) and the other supported products (beef meat, sheep 
meat) available data were not sufficient.   

In Italy, Specific Support was granted to organic olive oil and to PDO/PGI olive oil. Overall, the measure 
concerned  a  negligible  part  of  the  total  production,  ranging,  in  the  different  implementation  years, 
between 4.5% and 7% of the total volume. 

Concerning organic oil, available data relate to olive groves areas (and not to oil volumes). Data) showed 
a positive evolution in time and an acceleration after the implementation of Article 68. However, since 
areas were converted already into organic cropping, it is likely that this acceleration was the result of 
decisions made before 2010 (land under conversion). 

1 This conclusion was confirmed by interviews with Italian and Spanish stakeholders. In France, according to interviewees, Article 68 had a 
minor effect because the quality level was already high, in particular for the barley variety. 

66 

 
                                                      
Evaluation of Article 68 measures 

As regards olive oil under EU quality schemes, data showed a stabilization of the volumes that, however, 
account for a minor percentage (approximately 2%) of the total Italian production of olive oil. 

Consequently,  at  least in  the  case  of  Italy,  the  choice  of  grating  Article  68  Specific  Support  only  to 
"quality" olive oil volumes already consolidated in time and of small dimension in relation to national 
production, restricted the impact of the measure. 

In general, interviewees of the Member States concerned stated that Article 68 support had not an effect 
on volumes of PDO/PGI olive oil, in particular: 

- 

- 

- 

In Portugal, according to interviewees PDO/PGI schemes (having a very small market share) bring 
little added-value to the olive oil sector. This derives from high certification costs, which are not 
compensated by higher sale prices and from the lack of market interest in quality certification. 
In Italy, the ceiling of the olive oil measure was low, and the aid received by each recipient was 
almost irrelevant. The decision to give support to olive oil that was already under quality systems 
(and not to producers willing to enter in a quality system) had no effect on volumes growth. Maybe 
it allowed the maintenance of the previously achieved levels of production (i.e. it slowed down the 
exit of producers from the existing quality systems).  
In Greece, Specific Support concerned the certification of the areas (PDO/PGI areas) and not the 
product. 

  Experts opinions concerning other sectors  

As already mentioned, for the other supported products (beef meat, sheep meat) available data were not 
sufficient and therefore, we have taken into account stakeholders opinions. 

Beef meat: According to sector operators, in Italy, the voluntary labelling system implemented for beef 
meat strengthened the traceability of meat, i.e. marketing quality perceived by the consumer, and thus 
its fidelity. The main quality parameter in the case of beef meat is the use of cereal feeding that gives a 
taste to the meat particularly requested by the Italian consumer. 

Regarding  meat  under  PGI  quality  systems,  the  measure  contributed  to  livestock  and  production 
increase,  which however  represented a  minimal  share  of  the  total  national  production (about  18,000 
animals). 

In Spain, only very few food quality labels have a remarkable impact. Article 68 aid together with RDP 
support  and  national  aid  to  quality  helped  to  consolidate  the  production  of  quality  beef  in  the  crisis 
context that particularly affected consumption of higher priced meats. 

In  the  same  way  Article  68  aids  together  with  RDP  supported  the  organic  livestock  and  helped  to 
consolidate the production of organic beef meat. 

In  Portugal,  the  introduction  of  the  eligibility  of  PDO/PGI  production  under  the Article 68  measure 
occurred only in 2012. The measure had no influence on beef marketing quality, which, in fact, was not 
its main target. 

Sheep meat: In Spain, Article 68 support scope was to consolidate and reinforce producers associations 
and to stimulate the participation to food quality systems. Similarly, aid from RDP for organic livestock 
together with Article 68 quality support, contributed to the increase of sheep meat produced under EU 
quality schemes and organic certification. According to interviews the number of sheep national labels 
increased: from 25 (2000) to 44 (2014), suggesting that the quantities of certified meat have increased. 

In Portugal, according to interviewees, Article 68 support had little impact on PDO/PGI sheep and goat 
meat  production:  the  overall  quantity  of  PDO/PGI  sheep  meat  produced  in  Portugal  decreased 
significantly  in  the  latest  years  (from  286  tonnes  in  2002-2005  to  41  tonnes  in  2010-2013)  and  the 
quantities  of  PDO/PGI  goat  meat  increased  as  a  result  of  the  certification  of  a  new  product  that 
previously was not certified due to high certification costs. 

Cow milk: In Spain, the measure concerned the commercialisation of cow milk under “Letra Q” national 
food quality system (traceability system). According to milk stakeholders most of the industries require 
farmers to be part of one certification scheme and some large  multinationals industries require (in a 

67 

 
Evaluation of Article 68 measures 

compulsory way) a private certification that was not included in the list of those authorized by Article 
68. According to interviews the impact of Article 68 in milk quality evolution was very low but all 
interviewees agree that Article 68 helped farmers to participate in certification quality schemes.       

5.3.5  ROLE PLAYED BY THE IMPLEMENTATION OF THE ARTICLE 
68  MEASURE  UNDER  OBJECTIVE  (1)(A)(II)  QUALITY  ON 
PRICES 

In theory, an improvement of the quality of a product should be accompanied by an increase of its price, 
as the intrinsic value of the product increases. Therefore, net of all other variables that may influence 
prices, price changes may be an indicator of changes in quality level. In particular changes in relative 
prices, represented by the ratio between the prices of products in Member States in which the measure 
under objective (1)(a)(ii) quality was implemented and the EU average prices of the same products, are 
more useful. 

Therefore, when appropriate and for each sector, the analysis of the impact of the measure on prices was 
made: 

•  on  the  evolution  of  the  average  absolute  prices  in  Member  States  where  the  measure  was 

implemented; 

•  on the evolution of the ratio between the prices of the previous point and the EU average prices (or 

other, if appropriate) 

•  on  the  average  annual  growth  rate  (AAGR)  of  absolute  prices  and  of  the  ratio  of  prices  in  three 
periods: a) the period before the implementation of the 2003 CAP; b) the period between the 2003 
CAP and 2009; c) the period of implementation of Article 18. 

The source used was Agriview, unless otherwise indicated. 

  Beef meat 

With regard to cattle sector, all Member States implementing the measure under objective (a)(ii) quality, 
both for the improvement of technical quality and for the improvement of the quality of products linked 
to the territory or to methods of production, were considered (Italy, Portugal and Spain). 

The  analysis  of  price  evolution  was  carried  out  for  three  animal  categories:  young  bulls,  cows  and 
heifers. 

Figure 19: Beef meat: price evolution 2000-2014 (eur/100 kg) in Spain, Italy and Portugal and Ratio 
Member state/EU (%) 

Young bull 

Cows 

68 

0.6000.7000.8000.9001.0001.1001.2001.3001.400200.0250.0300.0350.0400.0450.0200020012002200320042005200620072008200920102011201220132014RatioEur/100 kgESITPTIT/EUPT/EUES/EU0.6000.6500.7000.7500.8000.8500.9000.9501.0001.050100.0150.0200.0250.0300.0350.0200020012002200320042005200620072008200920102011201220132014RatioEur/100 kgESITPTIT/EUPT/EUES/EU 
 
 
 
 
 
 
 
Evaluation of Article 68 measures 

Heifers 

Source: Agriview 

The results of the analysis showed that, in conjunction with a general increasing trend of prices in the 
three Member states implementing the measure, the ratio evolution was quite worrying: 

• 

in general, in the entire period there was a downward trend in all cases, with the exception of cow 
meat in Italy (slightly increasing trend). The trend of relative price was more negative in the case of 
young bull meat in Portugal, in the case of cow meat in Portugal and Spain and in the case of heifers 
in Italy.  

•  young bull and heifer meat, that in general remained well above the EU average prices, in the last 
years of the period gradually reached the EU average or even fell below (young bull in Portugal). On 
the other hand cow meat prices, already well below the EU average, worsen further (even in Italy) in 
the last years of the period. 
therefore, in all cases with the exception of heifers in Spain, the relative prices of meat in the Member 
States that have implemented the measure under objective (1)(a)(ii) quality worsened. 

• 

Table 18: Beef meat - AAGR% of cattle prices by category, AAGR% of the ratio IT-PT - ES/Average EU 

Source: Agriview 

According to interviewees, in Italy and Spain, also as a result of the economic crisis, consumers are 
price  oriented.  Therefore,  all  differentiation  effort  of  products  does  not  translate  into  better  prices. 
Indeed stakeholders stated that “a good quality meat facilitates those who sell meat to sell it but it makes 
no difference on the price”.  

In the case of calves for fattening (live animals), Italian operators complain that suppliers of calves for 
fattening (e.g. French breeders), knowing the existence of an aid linked to the obligation of maintaining 
calves in the farm for at least 7 months, bargain with Italian fatteners to obtain a higher price. Therefore, 
through this higher purchase price, Italian fatteners actually lose part of the support, which is transferred 
to (captured by) the French sellers. 

In conclusion, results led to conclude that the implementation of the measure did not achieve the 
desired results because: 
•  It failed to curb the prices negative trends already existing in the previous periods. 
•  Or, it was not sufficient to follow the quality improvement process carried out by all Member 

States even without the implementation of this measure. 

69 

0.6000.7000.8000.9001.0001.1001.2001.3001.400200.0250.0300.0350.0400.0450.0200020012002200320042005200620072008200920102011201220132014RatioEur/100 kgESITIT/EUES/EUITPTESIT/EUPT/EUES/EUAAGR% 2000/050.34-0.420.49-0.25-1.00-0.10AAGR% 2005/093.113.032.620.760.690.29AAGR% 2009/141.281.772.77-1.52-1.05-0.08AAGR% 2000/051.180.02-1.360.31-0.84-2.21AAGR% 2005/091.053.882.640.293.101.88AAGR% 2009/143.481.684.63-2.04-3.74-0.95AAGR% 2000/051.190.151.00-0.05AAGR% 2005/092.51-1.170.92-2.70AAGR% 2009/140.766.13-3.771.35PricesRatioYang Bulls CowsHeifers 
 
Evaluation of Article 68 measures 

•  Or, independently from quality variations, in Member States implementing the measure there was a 
a transfer of the aid from recipients to suppliers  through an increase of the calves’ purchase price. . 
  Sheep meat 

As regards sheep meat, the available data allowed only to analyse lamb meat in three Member States 
where  the  measure  under  objective  (a)(ii)  was  implemented,  both  for  the  improvement  of  technical 
quality  and  for  the  improvement  of  the  quality  of  products  linked  to  the  territory  or  to  methods  of 
production, (Italy, Portugal and Spain). 

In addition, for lambs an EU average price was not available. Therefore, relative prices were computed 
as the ratio between the prices of each of three Member States mentioned above and the Greek prices of 
lamb meat (Greece have not implemented the measure). Hence, in this case, the results of the analysis 
have a weaker validity. 

The results showed, in conjunction with a slight positive trend (Spain and Italy) or slightly negative 
(Portugal) of the price ratio in the whole period, large fluctuations around the trend especially in Spain 
and Italy. However, compared to Greece, the relative prices of the three Member States showed a growth 
that, in the case of Portugal and of Italy (less) appears quite strong. 

Table 19: Lambs - AAGR% of lambs prices, AAGR% of the ratio IT-PT-ES/Average EU 

Source: Agriview 

Taking into account data availability limitations, the evidence appear to suggest that the implementation 
of the measure under objective (1)(a)(ii) quality contributed to improve meat quality compared to Greek 
lamb meat. However, a deeper analysis showed, in the last period, a significant fall in the lamb meat 
absolute prices in this Member State (and thus, probably, a decrease of quality). Therefore, the ratio 
improvement in the Member States that have implemented the measure was not due to a price (and thus 
probably of quality) improvement of their meat, but to a deterioration of the Greek meat price (and thus 
probably  of  quality).  Nevertheless,  we  can  conclude  that  the  implementation  of  Article  68  at  least 
allowed the maintenance of price levels and hence the quality of the previous periods (unlike Greece). 

  Cow milk 

Concerning cow milk, price analysis was carried out for Italy. Similarly to the other products, absolute 
prices of delivered milk to dairies were analysed together with relative prices compared with EU average 
prices. 

The results of the analysis showed that the price of Italian milk was always higher than the EU average 
price, even if, in the whole period, a slightly downward trend was observed. 

Table 20: Milk-Italy: AAGR% of milk delivered to dairies  and AAGR of the ratio IT/EU  

Source: Regulation (EC) No 479/2010 Article 2 

In any case, in the last period the relative price worsened in a greater extent than in the previous period. 
This confirms that the technical quality of the Italian milk does not seems to have benefited from the 
implementation of the measure Article 68. 

  Tobacco 

With  regard  to  tobacco,  Member  States  having  implemented  the  measure  under  objective  (1)(a)(ii) 
quality were Spain, Italy, France and Poland. The analysis of price was carried out for the first four 
groups of varieties, since the oriental varieties are not produced in these Member States. Considering 

70 

ESITPTES/ELIT/ELPT/ELAAGR% 2000/05-2.036.02-4.62-3.144.82-5.70AAGR% 2005/092.26-0.840.453.12-0.011.29AAGR% 2009/14-0.710.391.641.002.113.38PricesRatioPricesRatioAAGR% 2000/05-0.220.98AAGR% 2005/09-2.45-0.27AAGR% 2009/145.34-1.52 
 
Evaluation of Article 68 measures 

that over 80% of these varieties is produced in these Member States, the ratio with the EU average was 
not computed. 

The analysis showed , more than in other sectors, the different price developments in the three periods 
considered. In particular: 

 
 

 

almost no change in the period before the 2003 CAP (slightly up or slightly down) 
an exponential growth in the period between 2006 and 2010 (including the first year of application 
of Article 68 in Italy and Spain) 
a reversal of the trend for some combinations of varietal groups/Member States (Spain and Poland 
for  group  I  and  III;  group  II  for  Poland;)  or  drastic  slowdown  of  the  growth  in  other  varietal 
groups/Member States combinations. 

Table 21: Tobacco: AAGR% of prices by group 

Sources: DG Agri Member States Communications 

The development of the average price appears to be strongly influenced by the evolution of the average 
quality, which largely improved after the 2003 CAP (exit from the sector of less-performing tobacco 
holdings, conducted by older farmers, etc. producing low-quality tobacco), and it continued at least until 
the first year of implementation of Article 68 (additional exit of holdings from the sector). 

In conclusion, the balance of the sector (in structural terms, and therefore technological and behavioural 
terms) should have favoured prices stabilisation in the following years. This would  testify, then, the 
stabilisation  of  the  quality  of  raw  tobacco  at  the  level  reached  already  during  the  first  year  of 
implementation of the measure Article 68. However, there was a sudden rupture of the price trend in 
conjunction with the payment of Specific Support. This suggests that, knowing the existence of an aid 
linked to production, buyers bargain with producers to obtain a lower purchase price. Therefore, through 
this lower price, producers actually lose part of the support, which is transferred to (captured by) buyers. 

  Durum wheat 

Concerning durum wheat, the measure under objective (1)(a)(ii) quality was implemented in Portugal, 
France  and  Greece.  In  Italy,  durum  wheat  was  object  of  an  (1)(a)(v)  agro-environment  measure. 
However, as one eligibility criteria of the Specific Support was the use of certified seeds we believe that 
an impact may also have been generated at quality level. For this reason, the analysis also includes the 
durum wheat produced in Italy.  

As known, durum wheat market, likewise all commodities, is strongly influenced by world prices, which 
in recent years were, for various reasons, highly raging (in terms of growth and volatility). However, in 
the  different  producer  Member  States,  the  average  level  of  prices  showed  important  differences 
compared  to  the  evolution  of  EU  average  price,  depending  on  the  technical  quality  of  the  product 
(differentiated according to the product use). In fact, the average price level of durum wheat in Italy and 
France ranked above the EU average, because used for pasta production that requires a higher quality. 

71 

FRESITPLAAGR% 2000/06-2.11-0.206.60AAGR% 2006/1030.1441.4226.0028.05AAGR% 2010/134.75-2.243.39-4.55AAGR% 2000/06-0.1015.19AAGR% 2006/1025.9127.5635.43AAGR% 2010/137.212.08-4.23AAGR% 2000/06-7.5011.19AAGR% 2006/1061.2545.9868.88AAGR% 2010/13-3.260.91-6.10AAGR% 2000/063.09AAGR% 2006/1016.7058.53AAGR% 2010/138.89-2.27Group IGroup IIGroup IIIGroup IV 
Evaluation of Article 68 measures 

Conversely, the prices of Greece and Portugal were placed below the EU average because the product 
is normally used to producer other products that require a lower quality (couscous, baking, etc). 

Table 22: Durum wheat - AAGR% prices and AAGR% of the ratio IT-PT-FR-EL/Average EU 

Source: Agriview 

Besides the level of prices of each Member State (and therefore the ratio with EU average prices), the 
analysis of the evolution highlighted the presence of a strong volatility, which however does not appear 
to be related to the different subperiods analysed (before the 2003 CAP, during the 2003 CAP, during 
the implementation of Article 68). 

Therefore, Article 68 implementation does not seem to have generated significant impact on the price 
of durum wheat (this was confirmed by interviews). 

  Olive oil 

In the olive oil sector the measure under objective (1)(a)(ii) quality was implemented by Greece, Italy 
and Portugal. In this case too, absolute prices of olive oil (extra virgin) were analysed together with the 
relative prices compared with EU average price (this was possible because the three considered Member 
States produce about 40% of the EU total). 

During the period 2000-2014, the price of extra virgin olive oil in the analysed Member States (but also 
the EU average) had the same cyclical evolution reaching a maximum point in 2006. The Italian price 
of extra virgin olive oil was always above the EU average price showing, so, a higher level of quality 
(on average). Conversely, the price of the other two Member States was in some subperiods above and 
in other subperiods below the EU average price, but nevertheless almost always below the Italian price. 

Table 23: Olive Oil extra: AAGR% of prices and AAGR% of the ratio IT-PT-ES/Average EU 

Source: Agriview 

In the last years the Italian price grew significantly, especially between 2013 and 2014, but this appears 
to be linked to the decrease in production due to the spread of a plant disease (Xylella fastidiosa), and 
not  the  result  of  the  product  quality  improvement.  Moreover,  as  seen  above,  Article  68  support 
concerned only a very small share of the production, with negligible impact on prices. This minor (and/or 
none) impact on prices was confirmed by interviewees also in Greece and Portugal.  

5.3.6  ROLE PLAYED BY THE IMPLEMENTATION OF ARTICLE 68 
SPECIFIC 
OBJECTIVES 
MEASURE 
DISADVANTAGES  AND  (1)(A)(II)  QUALITY  ON  THE 
SUSTAINABILITY OF PRIMARY PRODUCTION 

(1)(B) 

UNDER 

The objective of sustainability of primary production is specific to the measure under objective (1)(b) 
specific disadvantages that foresaw also the compliance with the constraint of not exceeding production 
levels existing before the reform. It could, therefore, be expected, that the implementation of the measure 
implied a stabilisation/increase of production or of structural farming elements (areas / livestock). 

Concerning the measure  under objective (1)(a)(ii) quality it could be expected a possible production 
decrease against a quality improvement. However, considering that the aid was linked to production, 

72 

ITPTFRELIT/EUPT/EUFR/EUEL/EUAAGR% 2000/05-1.362.881.94-2.14-1.642.591.65-2.42AAGR% 2005/0910.1512.976.8110.962.014.62-1.082.76AAGR% 2009/146.920.089.235.51-0.33-6.701.82-1.65PricesRatioELITPTEL/EUIT/EUPT/EUAAGR% 2000/059.187.175.21-0.32-2.16-3.95AAGR% 2005/09-7.71-7.92-5.961.521.283.44AAGR% 2009/145.1910.404.17-2.152.70-3.10PricesRatio 
 
Evaluation of Article 68 measures 

Specific Support could have implied, in this case, an increase of the economic interest of producers to 
increase production. 

Therefore, we analysed the sectors benefiting from both measures. 

The effects of the implementation of the measures under objectives (1)(b) specific disadvantages and 
(1)(a)(ii) quality on the sustainability of primary production were evaluated, with different indicators, 
for  livestock  sectors  (beef,  sheep,  dairy  cattle)  and  crop  sectors  (sugar  beet,  tobacco,  durum  wheat, 
cotton, olive oil). 

For both groups of sectors, we analysed two aspects: the evolution of production and the evolution of 
structural elements (livestock in the first case, UAA in the second case). 

Therefore, when appropriated and for each sector, the analysis of the impact of the measures on the 
sustainability of primary production was made on the basis of: 

 

 

 

the  evolution  of  the  average  absolute  values  in  the  Member  States  where  measures  were 
implemented.  In  the  livestock  sectors  for  which  the  number  of  Member  States  that  have 
implemented  the  measures  is  high  (beef,  sheep,  cow  milk),  the  analysis  was  conducted  for  all 
Member States having implemented the measures. 
the evolution of the ratio between the average absolute values of production and structural variables 
in  Member  States  where  measures  were  implemented  and  the  average  values  of  all  the  other 
Member States that have not implemented the measures. 
the average annual growth rate (AAGR) of the production values and of the structural variables in 
three periods: a) the period before the implementation of the 2003 CAP; b) the period between the 
2003  CAP  and  2009;  the  period  of  implementation  of  Article  68.  In  addition,  for  the  livestock 
sectors  the  analysis  of  the  AAGR  was  also  carried  out  for  groups  of  Member  States  that  have 
adopted different combinations of implementation of the 2003 CAP. 
  Beef meat 

The  group  of  14  Member  States  that  have  implemented  the  measures  under  analysis  showed  an 
aggregated average production (over the period) of about 5.7 million tons, with a peak (in 2007) of 5.94 
million tons. After 2007, the production was always lower relative to the 2007 value (i.e., Article 68 did 
not  stimulate  a  production  surplus).  Furthermore,  production  presented  a  growth  only  in  the  first 
subperiod followed by a decrease that was more sensitive in the period of implementation of Article 68 
(-1.71% per year). 

The group of the other Member States showed an average production of about 2.2 million tons, with a 
maximum production of 2.4 million tons in 2004. For these Member States, data showed a gradual but 
sharp decrease of production until 2009 that pursued more slowly in last subperiod (-1.44% per year). 

The different dynamics between the two groups of Member States generated a ratio tending to grow, 
which, however, was interrupted in the last two years of the period, where a reversal of the trend was 
observed. 

This  trend  is  similar  to  the  livestock  evolution,  expressed  by  the  number  of  calves  in  the  farms  in 
December  of  each  year  .  This  indicator  (more  than  the  total  livestock)  highlights  the  productive 
behaviour  of  breeders,  as  it  corresponds  to  births  during  the  year  (and  thus  the  prosecution  of  the 
breeding activity). 

In this case, also, in the last two years of the period, the decrease was stronger for all Member States 
that have implemented the analysed measures. 

In  this  general  context, the  most  critical situations  concerned  the  group  of  Member  States that  have 
chosen full decoupling + Article 69 + Article 68 (-2.77% per year in the last period, due mainly to Italy) 
and the group of Member States having applied a short partial decoupling (1) Article 68 + (-3.40% per 
year in the last period, mainly due to Poland). 

1 Short partial decoupling: until 2009; Long partial decoupling: after 2009. 

73 

 
                                                      
Evaluation of Article 68 measures 

Table 24: Beef meat - AAGR % in Member States implementing Article 68 by groups of Member States 
with different implementation choices in the previous periods 

AAGR % beef meat production 

AAGR % Nb of  male calves < 1 year 

Key: D= Total Decoupling; LPD = Long partial decoupling; SPD=Short partial decoupling 
69 = Article 69 Reg. (EC) n° 1782/2003; 68 = Article 68 Reg. (EC) No 73/2009 
Source: Eurostat 
Concerning stakeholder’s opinions, these were divided in two groups: in the first group, interviewees 
declared that Article 68 contributed to limit the production decrease (Finland) or to stabilise the flow 
of live cattle to be slaughtered (Denmark), or to maintain production (Greece and Italy (1)). In the 
other group, interviewees consider that the role of Specific Support was limited because the unitary aid 
was too low to generate an effect (in France, Spain (2) and Portugal).  

In conclusion, in the entire group of Member States that have implemented Article 68 measures, 
the positive effects appear limited to the first two years of implementation, after which the growth 
seems to stop. Therefore, it is likely that the level of the aid (overall) was a necessary condition, 
but not sufficient, to maintain a sustainable production of beef and the farms structure. 

  Sheep meat 

In  the  sheep  meat  sector,  all  the  10 Member  States that  have  implemented  the measures  showed  an 
aggregated average production (over the period) of 522,000 tons, and a maximum production of 641,000 
tons at the beginning of the period (2000). Therefore, throughout the period considered, the production 
continued to decline and reached a minimum of 376,000 tons in 2013. All three periods under analysis 
were thus characterised by a negative sign, particularly strong in the subperiods of implementation of 
the 2003 CAP (-93.3 % annual average). 

The group of the other Member States showed an average production of about 401,000 tons, with a peak 
of  478,000 tons  also  at the  beginning  of  the  period.  In  this  case,  however, the  production  showed a 
recovery until 2008, after the decrease of 2004 caused by the disasters occurred in the UK, and then 
collapses (and then stabilises) in 2009. 

The different dynamics between the two groups generated a strongly decreasing ratio, which however 
stopped from 2009 and stabilised onwards. 

As for the beef meat sector, the production trend was similar to the evolution of the livestock. However, 
the decreasing trend of the ratio pursued even in the last period. 

Therefore,  evidence  suggests  that  the  implementation  of  Article  68  measures  induced  a  different 
behaviour of farmers of Member States having implemented Article 68 relative to farmers of Member 
States that have not implemented it, which resulted in an increase of the average weight of carcasses. 

1 It is important to note that the meat from fattening farms (using forages and cereals) mainly deal with imported calves from other Member 
States. Therefore, purchases flows of live cattle fattened in Italy to the slaughtering industry depends on the price of imported meat (if the price 
of the imported meat increases, there is a greater demand for live cattle). 
2 In Spain the changing on consumption patterns to lower prices meat (pork and poultry) were not mitigated by Specific Support. Article 68 
did not limit agricultural production volatility. 

74 

AAGR 2000/05AAGR 2005/09AAGR 2009/13MS Art. 681.48-0.81-1.71MS others-0.85-2.05-1.44D+69+680.130.32-2.77D+68-1.10-1.470.15LPD+69+682.27-3.98-1.20LPD+680.01-1.43-0.89SPD+6832.403.55-3.40AAGR 2000/05AAGR 2005/09AAGR 2009/13MS Art. 680.04-0.97-1.75MS others-1.25-2.21-1.63D+69+680.55-1.88-1.99D+681.11-3.361.63LPD+69+682.201.66-5.53LPD+680.01-1.33-0.95SPD+68-4.133.92-4.74 
 
 
 
 
 
                                                      
Evaluation of Article 68 measures 

In this general context, the most critical situations were observed in Member States belonging to the 
group having implemented the Short partial decoupling + Article 68 (even if the production volumes are 
limited): in the period of application of Article 68, meat production decreased at a rate that is double 
compared to the previous period (-44 % per year) even if it was accompanied by a much smaller decline 
of livestock. Therefore, in this group of Member States the adopted strategy was opposite to the general 
one. 

More  worrying,  given  the  volumes  involved,  was  the  situation  of  the  group  having  applied  Total 
Decoupling  +  Article  69  +  Article  68,  where  the  production  decreasing  trend  showed  only  a  slight 
slowdown in the period of implementation period Article 68 relative to the previous period. 

Finally it should be noted, again considering the large volumes, the evolution of the group Long partial 
decoupling + Article 68, which, probably thanks to the implementation of Article 68 measures, showed 
a significant disruption of the negative trend compared to the two previous periods, both for production 
and livestock. 

Table 25: Sheep meat - AAGR % in Member States implementing Article 68 by groups of Member States 
with different implementation choices in the previous periods 

AAGR % sheep meat production 

AAGR %: Nb of sheep 

Key: D= Total Decoupling; LPD = Long partial decoupling; SPD=Short partial decoupling 
69 = Article 69 Reg. (EC) n° 1782/2003; 68 = Article 68 Reg. (EC) No 73/2009 
Source: Eurostat 

According  to  interviewees,  Article  68  support  contributed  to  slow  down  but  not  to  interrupt  the 
decreasing trend on going also following decoupling (France, Italy (1)  and Spain). In Finland, according 
to interviewees, there was a recovery after the decrease in the years after decoupling.   

In conclusion, evidence suggests that Article 68 played a role, especially in slowing down the decreasing 
trend in production of all Member States that have implemented the measures. However, the effects 
were  quite  different  among  the  different  groups  of  Member  States:  more  effective  in  the  group  of 
Member States that in 2003 chosen partial decoupling, but showing a drop in their production. Less (or 
none) effective in the other groups of Member States, especially those having chosen full decoupling 
with the application of Article 69. 

  Cow milk 

In  the  cow  milk  sector,  all  the  16  Member  States  that  have  implemented  the  measures  showed  an 
aggregated average production (over the period) of 105.6 million tons. It should be noted that the average 
production  of  the  period  2000-2009  was  lower  than  the  production  achieved  in  the  period  after  the 
application of Article 68, showing also a positive growth rate. 

However,  the  production  of  the  others  Member  States  showed  more  or  less  the  same  trend,  with  a 
significant recovery (albeit lower) in the period after 2010. 

Moreover,  the  ratio  between  the  production  of  the  two  groups  showed  only  economic  fluctuations 
around a flat trend and the production growth from 2010 onwards was common to all groups of Member 
States, albeit with different intensities (less for the group SPD + 68). 

1The low unitary aid did not produce significant results: the downward trend of the sheep and goat livestock has continued, 
mainly due to the decrease of the milk price (core business of sheep and goat farms in Italy). 

75 

AAGR 2000/05AAGR 2005/09AAGR 2009/13MS Art. 68-1.35-9.30-1.89MS others-0.78-7.05-0.63D+69+68-1.41-4.86-3.64D+68-3.02-5.510.15LPD+69+68-1.87-3.781.24LPD+68-1.14-11.92-1.12SPD+684.53-22.62-44.65AAGR 2000/05AAGR 2005/09AAGR 2009/13MS Art. 68-0.85-2.87-2.36MS others-1.92-0.800.58D+69+680.760.26-0.50D+68-1.05-8.060.29LPD+69+68-2.02-4.97-3.26LPD+68-1.49-3.45-3.82SPD+68-1.27-4.09-4.17 
 
                                                      
Evaluation of Article 68 measures 

Table 26: AAGR % of cow milk production in Member States implementing Article 68 by groups of 
Member States with different implementation choices in the previous periods 

Key: D= Total Decoupling; LPD = Long partial decoupling; SPD=Short partial decoupling 
69 = Article 69 Reg. (EC) n° 1782/2003; 68 = Article 68 Reg. (EC) No 73/2009 
Source: Eurostat 

Therefore, the increase in cow's milk production in the last period does not seem to be attributable to 
Article  68  but  to  other  factors  independent  from  it.  This  was  confirmed  by  interviewees  (Italy  (1), 
Hungary and Portugal). In Finland, interviewees stated that Article 68 played a role in maintaining the 
interest for the activity (2). In France, operators consider that Specific Support played a role in areas 
where it was applied (3). 

  Tobacco 

Tobacco surfaces and production development of the 5 Member States that have implemented Article 
68 measures show two points of clear discontinuity, coincident with the tobacco CMO reform and with 
Article  68  implementation.  Concerning  the  first,  the  production  fall  (in  the  Others  EU-25  Member 
States) was due to the choice of full decoupling made by Greece, which led to the disappearance of most 
tobacco varieties with the exception of the oriental varieties. 

The second discontinuity point coincided with the implementation of Article 68 Specific Support (only 
quality  measure,  with  payments  only  to  tobacco  with  defined  quality  standards)  for  the  group  of  5 
Member States that have implemented the measure. As mentioned, this caused the exit from the sector 
of the less performing farms remained active after the 2003 CAP. This exit (resulting in reduction of 
areas and production) concerned mainly Italy. 

Figure 20:  Tobacco - Evolution of production in the main producer Member States (Ton) 

Sources: DG AGRI Member States Communications 

1In addition the production of national pasteurized whole milk (of which High Quality milk is a subset) show a steady decline 
since 2004. 
2 In the western region, farmers would have switch to grass or grain, in the north to barley for pig factories, in the south to pig 
or milling. 
3 Producers from the Massif Central, where the production was the most vulnerable, agreed to use a part of the aid amount to 
organise the sector. The association in collaboration with cooperatives created the brand “MontLait” in order to prevent the 
support from being uptaked by industries and to have a differentiated access the market.  

76 

AAGR 2000/05AAGR 2005/09AAGR 2009/13MS Art. 680.00-0.240.75MS others-0.37-0.161.37D+69+680.85-1.201.21D+68-0.05-0.340.85LPD+69+68LPD+68SPD+68-0.060.270.36020,00040,00060,00080,000100,000120,000140,00020002001200220032004200520062007200820092010201120122013ELESFRITPLBG 
 
 
                                                      
Evaluation of Article 68 measures 

Table 27: Tobacco: AAGR % in Member States implementing Article 68 and in others EU 25 Member 
States (production and UAA) 

Sources: DG AGRI Member States Communications 

Therefore, Specific Support, focusing on quality improvement, led to a reduction of the total production. 
However, this reduction concerned lower quality production that previously used to cause utilisation 
difficulties to the processing industry, with a consequent generation of stocks of unsold product. This 
was confirmed by Italian interviewees. According to French, Polish and Spanish interviewees, Specific 
Support was crucial to give stability to production levels. 

  Durum wheat 

Concerning durum wheat, the measure under objective (1)(a)(ii) was implemented in Portugal, France 
and Greece.  

As mentioned before, in Italy durum wheat was object of the environmental measure under objective 
(1)(a)(v) concerning crop rotation. Considering that crop rotation could have an impact on production 
choices and therefore on primary production sustainability, we extended the analysis to this Member 
State. 

Therefore, the following ratios were computed: 

a) between Member States that have implemented the measure under objective (1)(a)(ii) quality and the 
others Member States, with the exception of Italy 

b)  between  all  Member  States  that  have  implemented  measures  concerning  durum  wheat  (Member 
States  that  have  implemented  the  measure  under  objective  (1)(a)(ii)  quality  +  Italy)  and  the  others 
Member States. 

The  durum  wheat  production  is  strongly  influenced  by  climatic  events  (the  production  is  mainly 
practiced on non-irrigated land). Therefore, it is more interesting to look at the surfaces evolution as it 
shows farmers interest on production. 

As  regards  the  group  of  Member  States  having  implemented  the  measure  under  objective  (1)(a)(ii) 
quality, the period of analysis was marked by three subperiods: a moderate growth in the subperiod 
before  the  2003  CAP;  a  significant  decrease  after  implementation  of  the  2003  CAP  (surface  and 
production near to zero in Portugal, decreased by a third in Spain (1)); and a further and even more 
significant decrease of areas (and production) in the period of implementation of Article 68. 

The developments observed in all the other Member States followed, very closely, the development of 
Member States that have implemented the measure under objective (1)(a)(ii) quality, therefore the ratio 
is almost flat. 

The  Italian  situation,  very  similar  to  that  of  the  other  groups  of  Member  States  until  2009,  differed 
significantly following the implementation of Article 68 because the negative trend of the years  after 
the 2003 CAP stopped and even reversed, with a slight increase in areas (0.4% per year) and even more 
in production (2.3% annually). 

1 The decrease, well below the reduction in areas, shows that the crop abandonment after the 2003 CAP concerned mainly less fertile areas, 
where interest to produce was justified by the existence of coupled support. 

77 

AAGR 2000/05AAGR 2005/09AAGR 2009/14AAGR 2000/05AAGR 2005/09AAGR 2009/14MS Art. 681.7-2.6-6.92.7-2.4-6.4Others EU 25-1.0-25.73.5-0.8-20.02.4Production UAA 
 
                                                      
Evaluation of Article 68 measures 

Table 28: Durum wheat: AAGR % in Member States implementing Article 68, in Italy and in others EU-
25 Member States (production and UAA) 

Source: Eurostat 

Hence, the evidence appears to suggest that the measure under the "quality" objective did not play any 
role in the sector sustainability (either positive or negative since there were no significant deviations 
from the trend of all the others Member States). 

Conversely, the implementation of the measure under objective (1)(a)(v), with compulsory crop rotation, 
seems  to  have  favoured  a  new  interest  of  farmers  towards  durum  wheat,  thus  stabilising  areas  and, 
indirectly, also production. 

  Sugar beet 

In the sugar sector, only Spain and Italy implemented the Article 68 (measure "quality").  

As known, in these two Member States the Sugar CMO reform had a significant effect with a strong 
sugar beet areas decrease (-22% annually) and sugar production decrease (-26% per year) as a result of 
the closure of 72% of the factories.  

This explains the drop in the ratio, for both surfaces and production, compared to all the other EU-25 
Member States. 

Despite this sharp reduction, Article 68 implementation does not seem to have stabilised surfaces (1), or 
even production, that showed a further decrease into average annual rates higher than those of all the 
other Member States.  

Table 29: Sugar beets - AAGR % surfaces and production in Member States implementing Article 68 and 
in the other Member States 

Therefore,  the  analysis  suggests  that  Article  68  implementation  was  not  sufficient  to  ensure  the 
sustainability of the sector. 

Source: CEFS 

  Olive oil 

In the olive oil sector, the measure under objective (1)(a)(ii) quality under analysis was implemented in 
three Member States (Italy, Greece and Portugal). As mentioned before, Specific Support concerned 
only a minimal part of production (organic oil and oil under EU quality schemes). 

1 However, Italian interviewees stated that the aid for sugar beet was very important to maintain the remaining beet production. 
Beet production continued to decrease and in fact industries suffer from supply difficulties. Without Specific Support it would 
have declined even more. 

78 

AAGR 2000/05AAGR 2005/09AAGR 2009/14AAGR 2000/05AAGR 2005/09AAGR 2009/14Total MS Art. 681.3-0.7-5.70.4-5.1-7.3Italie0.6-4.72.3-1.8-4.50.4Others MS-10.810.6-8.70.9-11.0-9.0ProductionUAAAAGR 2000/05AAGR 2005/09AAGR 2009/14AAGR 2000/05AAGR 2005/09AAGR 2009/14ES + IT  1.7-22.2-2.5-1.3-25.6-8.7Others EU-252.2-1.9-1.62.4-5.9-0.8Ratio-0.5-20.7-1.0-3.6-20.9-7.9Sugar productionUAA sugar beet 
 
                                                      
Evaluation of Article 68 measures 

Table 30: Olive oil -  Evolution of production and AAGR% before and after Article 68 implementation 

Source: Member States declarations in the framework of balances and REG (EC) 826/2008 

Hence, there was no impact on the sustainability of the sector (besides characterised by a physiological 
phenomenon of production "alternation" and in the last years by a number of diseases in Italy). 

  Cotton 

As known, in Europe cotton is produced only in few Greek and Spanish regions. Bulgaria also used to 
produce it but from 2013 cotton disappeared. 

For this crop, Article 68 support was implemented only by Spain that showed a drop in surfaces and 
production after the 2003 CAP (from 115,000 tons in 2005 to 18,000 tons in 2008). 

Greece showed almost the same development but with a lesser drop in production than in Spain during 
the period 2005-2009. In fact, an important part of the Spanish production was not harvested, and less 
intensive production methods was adopted (yields reduction). This explains the difference between the 
evolution of the ratio of the surface compared to that of production. 

From 2009-2010 Spanish and Greek surfaces and production increased, both due to a significant increase 
in world prices that made the crop economically more attractive to producers. However the Spanish 
growth  of  production  was  quicker  than  that  of  Greece  and  this  difference  could  be  ascribed  to  the 
implementation, in Spain, of Article 68. 

Table 31: Cotton - AAGR % in Spain and in the others Member States 

Sources : Eurostat, USDA (Greek production 2012-2014 and estimation Spanish production 2014), Agrosynergie 
(computation with ratio 33% Spain 2010-2014) 

In conclusion, then, Article 68 support (linked to production) seems to have favoured (together with 
market conditions) the recovery of production in Spain even if it remained well below the levels existing 
before the 2003 CAP. 

5.3.7  ROLE PLAYED BY THE IMPLEMENTATION OF ARTICLE 68 
MEASURES UNDER OBJECTIVES (1)(A)(II) AND (1)(B) ON 
THE SUSTAINABILITY OF PROCESSING INDUSTRIES 

5.3.7.1  Sustainability of raw materials supply flows 

As  already  mentioned,  the  sustainability  of  the  processing  industry  is  linked  to  the  existence  of 
continuous supply flows of raw materials, in the required quantity and quality. This condition is critical 
only  for  processing  sectors  for  which  raw  materials  supplies  must  originate  (predominately)  from 
production areas located at a limited distance around the factories. Indeed, the sectors that can supply 
easily on the international market, the availability of local raw materials is not a decisive factor for the 
sustainability of the industry. 

79 

2004/52005/62006/72007/82008/92009/102010/112011/122012/132013/14AAGR 2004/5-2009-10AAGR 2010/11-2013/14IT879656490510540430440399416461-13.321.57EL435424370327305320301295358132-5.96-24.03PT412948365363637659928.6913.51Total MS Art. 681,3551,109908874898813804770833685-9.73-5.20Others MS1,0028401,1231,2451,0411,4121,4051,6256271,7987.108.56Total EU2,3571,9492,0312,1191,9392,2252,2092,3951,4592,483-1.153.97AAGR 2001/5AAGR 2005/09AAGR 2009/14AAGR 2001/5AAGR 2005/09AAGR 2009/14Spain2.2-30.518.4-1.5-9.85.1Others MS-3.7-11.68.9-2.0-10.55.1UAAProduction  
 
 
Evaluation of Article 68 measures 

The analysis in the previous chapter is therefore an answer to this question, in particular as regards the 
slaughtering industry (cattle and sheep), dairy industry, first processing of raw tobacco, cotton industry, 
and sugar industry. 

The analyses carried out showed that the implementation of Article 68 did not prevent the production 
decrease in the analysed sectors, and therefore the reduction of supply flows of industries. This, with the 
sole exception of supply flows of the cotton industry in Spain. 

However, in some cases (slaughtering of cattle and sheep (1)) Article 68 Specific Support should have 
helped to slow down the negative trends in production, and thus to limit the negative effects on the 
continuity of supply flows of the processing industries. 

Concerning  tobacco,  the  improvement  of  quality  because  of  Specific  Support  implementation  was 
(intentionally) followed by a reduction of the quantities. However, in this case, this decreasing seems to 
have met the first processing industries requests as these latter are no longer obliged to handle (as before) 
a product of low quality not demanded by manufactures (2). 

5.3.7.2  Effects on industry structure  

The analysis of the effects on the processing industry structure focused on two aspects: 

• 

• 

the effects on the number of factories. It was possible to develop this analysis for the cotton, 
tobacco and sugar sectors 
the effects on the rate of use of the processing capacity. It was possible to develop this analysis 
for the cotton sector. 

  Cotton Industry 

In the cotton sector, Spanish authorities implemented an important restructuring national plan in order 
to cope with the drop of producer’s interest regarding the crop that caused a significantly decrease of 
the rate of use of the processing capacity. 

Between 2005/6 and 2012/13, 22 factories out of the existing 27 were closed, and a new factory entered 
in the sector. Therefore, today, there are 6 factories. 

Table 32: Cotton - Number of cotton factoriesin Greece and Spain 

Sources: Spain: National restructuring program of the cotton sector. Greece: ICAP, OPEKEPE, MDAA, Estimations 
Agrosynergie for 2012/13 

With the closure of the factories the total processing capacity was reduced, but it should be noted that 
even before the 2003 CAP (2005) the average utilization rate of the factories was quite low, indicating 
that the installed total capacity was already in excess relative to the actual needs. Over the period of 
implementation  of  the  2003  CAP  reform,  the  average  rate  of  use  collapsed,  and  only  through  the 
implementation  of  the  restructuring  plan  adequate  levels  were  reached  again  (higher  than  those  of 
Greece). In this new situation the increase in production, occurred also (but not only) as a result of the 
Specific Support implementation, keeps the rate of use of the processing capacity at higher levels, which 
will bring benefits to the industry's profitability. 

1 In France, according to interviewees it is difficult to establish contracts between the calves fattening sector and the industry: given that the 
time for fattening bovines is long (i.e. 2 to 3 years) slaughterhouse cannot get committed on the price to be paid 2 to 3 years ahead. On the 
contrary,  concerning  the  sheep  meat,  Specific  Support  facilitated  the  establishment  of  contracts  with downstream  industries:  contracts  are 
considered very important by slaughterhouses in order to secure their supply. 
In Greece, according to interviewees both Article 69 and Article 68 measures contributed significantly to the maintenance of the sheep meat 
production and favoured the existence of a critical mass of livestock for the production of the PDO products (e.g. Kriti producers have presented 
proposals for new denominations of sheep meat from Kriti). 
2 Art. 68 strengthened the sector allowing the processing industry to have a volume of production interesting to buyers of raw tobacco: since 
four years, Philip Morris (21,000,000 Kg purchased on the Italian market, representing approximately 50% of Italian production) established 
supply contracts directly with farmers, bypassing the first processing industry. 

80 

2001/22002/32003/42004/52005/62007/82012/13Spain27216Greece82817779737366 
                                                      
Evaluation of Article 68 measures 

Table 33: Cotton - Rate of use of the processing capacity in Greece and Spain 

Source: Elaborations on Eurostat and USDA data. Magrama, Restructuring national program 

  Tobacco first processors 

The process of restructuration in the first processing industry of tobacco was very active. In 2001, in the 
EU-15 269 first processing industries were operating, and in 2012, in the EU-27, there were only 79. In 
Italy, the number of factories fallen from 140 in 2001 to 16 in 2012. 

The effects of the CMO reform were, therefore, extreme in terms of volumes of tobacco production, and 
even more drastic on the structure of the industrial sector, which presented obvious competitiveness 
problems. According to interviewees in Italy the structure of the raw tobacco first processing industry 
changed strongly (decrease of the number of industries) over the last decade. Industrial dynamics were 
determined by factors prior to Article 68 implementation and due to political and strategic choices as a 
result of the Fishler reform. Currently 5 first processing industries with 6 factories work more than 80% 
of  the  traded  tobacco  volumes.  In  France,  the  first  processing  plant  processes  8.000-10.000  tons  of 
tobacco  each  year  corresponding  to  53%-67%  of  its  capacity.  In  Poland,  Specific  Support  triggered 
modernisation of tobacco production (new dryers, more inputs) and hence more raw material allowed 
smaller processors to enter into business. 

However, although the quality of tobacco improved (and therefore it meets best marketing needs of the 
industry), the  decrease  in production  had  negative  impacts  on  the  rate  of  use of  processing  industry 
capacity of the factories remained active. This result in an increase of industrial fixed costs and therefore 
it is necessary to establish whether or not these higher costs are offset by the increase in average prices 
due to the quality improvement. 

  Sugar industry 

In the case of the sugar industry, also, the 2003 CAP reform played an important role on the structure 
of the processing industry. Between 2004/5 and 2013/14 the number of factories (EU-25) decreased 
from 189 to 102 units. In all Member States having adopted the Article 68 (Italy and Spain), the number 
of factories decreased from 28 to 9 units and this number remained constant since 2009 / 10. Therefore, 
the structure seems to be stabilised. Moreover, the structure seems to be stabilised also in all the other 
Member States (93 factories). 

However,  the  decrease  in  production  should  have  played  a  role  in  the  rate  of  use  of  the  processing 
capacity of the industry, and thus an increase of fixed costs. This also happened in all the other Member 
States, but to a lesser extent. Therefore, the competitiveness of Member States that have implemented 
Specific  Support  in  the  sugar  industry  could  be  (slightly)  reduced  compared  to  that  of  all  the  other 
Member States. 

In conclusion, the dynamics of the structure of the analysed industrial sectors are related to the 
2003 CAP reform and/or other drivers and were not affected by the implementation of Article 68.  

  Experts opinion concerning other sectors  

Concerning  the  meat  sector  (beef,  sheep  and  goat),  according  to  interviewees,  the  industrial  sector 
undergone a process of restructuring / reorganisation. According to respondents in Italy, many small 
slaughter houses were closed (from about 2,700 in 2007 to about 2,300 in 2014). However, this trend 
was not related to Article 68 but rather to the abolition of the private storage of meat. In fact, many 
slaughterhouses were born in the years before only because of the private storage. Moreover, there is an 
ongoing  process  of  displacement  of  the  activity  of  slaughter  houses  into  neighbouring  countries  (in 
France for Piemonte and in Slovenia for Veneto).  

In France, interviewees estimate that the existing number of slaughterhouses in excess is about 10%. 

81 

2005200620072008200920102011201220132014Spain (on 3 months)432118811698510067Greece (on 81 days)70564643423646515965 
 
Evaluation of Article 68 measures 

In Denmark interviewees consider that Specific Support allowed to keep the level of production and 
therefore contributed to maintain production capacity and employment, which otherwise would have 
been lost. 

Concerning dairy sector, according to French interviewees, Article 68 allowed industries to maintain 
their rate of use and their number (i.e. Auvergne). 

In Finland, one single cooperative provides 85% of the national milk production. It has 14 plants based 
all  over  Finland  (cheese  factories  in  the  central  region,  fresh  milk  products  in  the  south  since 
consumption  is  mainly  based  in  the  south)  and  employs  around  3,500  persons.  Without  Article  68 
support  the  cooperative  would  have  closed  a  small  factory  (200-300  persons).  Without  the  Specific 
Support, farmers would have quit, especially in dairy farms. 

In Hungary, Article 68 support prevented the closure of some dairy companies, especially the smallest 
ones. 

82 

 
 
Evaluation of Article 68 measures 

5.4  EVALUATION JUDGEMENT ON EQ2 

The EQ 2 asked to investigate the capacity of Article 68 measures to influence three aspects 
concerning agricultural products: the economic viability, competitiveness and sustainability. 

  Economic viability 

The  economic  viability  was  defined  as  the  ability  of  a  sector  (product)  to  ensure  the  family  work 
remuneration to the level of opportunity cost, as well as a remuneration of the invested capital. To this 
end, based on the FADN data, we carried out the analysis of the Return on Investments (ROI) (i.e. the 
ratio  of  the  Earnings  Before  Interest  and  Taxes  and  Total  Assets)  of  farms  specialised  in  sectors 
concerned  by  the  Specific  Support  measures  under  objectives  (1)(a)(ii)  "improving  the  quality  of 
agricultural products" and (1)(b) "specific disadvantages". A sector is viable when the ROI is greater 
than zero (the higher the level of the ROI, the more the sector is economically viable); if the ROI is near 
zero, the sector is still viable, but it presents a risk; and a sector is not viable when the ROI is less than 
zero, because it fails to remunerate production factors. 

The approach followed two paths of analysis:  

A. the analysis of the magnitude of the average ROI of each sector; 
B. the analysis of the number of recipient farms with an ROI >0 (in order to determine the number of 
farms whose productive activity shifted from an economically not viable situation to an economically 
viable situation thanks to the support). 

These two analyses were carried out at two levels: 

•  At the aggregated level, the group of Member States having implemented the measures and the group 
of Member States that have not implemented it, by sector. In this case, the analysis sought to express 
a judgment on the overall policy. 

•  At the level of Member States by sector that have implemented the measures: the analysis aimed to 
examine the differences among Member States and to express a judgment on the impact of Specific 
Support according to Member States' choices. 

For each level, the analysis distinguished between: 
•  recipients of Specific Support in the set of Member States that have implemented the measures under 

objectives (1)(a)(ii) and (1)(b); 

•  non-recipients of Specific Support in the set of Member States that have implemented the measures 

under objectives (1)(a)(ii) and (1)(b); 

•  farms in the set of Member States that have not implemented the measures under objectives (1)(a)(ii) 

and (1)(b) (thus naturally farms not benefiting from Specific Support for these measures). 

Moreover, in the case of recipients of Specific Support, the ROI has been computed for the real situation 
(with Specific Support) and for a simulated situation (without Specific Support). 

A.  The first analysis focusing on the magnitude of the average ROI of each sector showed that: 

•  At  the  aggregated  level,  the  average  ROI  was  greater  than  zero  in  almost  all  sectors  (with  the 
exception of cattle in Member States not implementing Article 68), both in the real situation and 
for the simulated situation. Therefore, at the aggregated level, underlining the impact of the 
policy as a whole, the supported products appear to be viable even without Article 68 support, 
and Specific Support made it possible to strengthen further product viability. 

However,  Specific  Support  had  a  different  impact  on  the  ROI  levels  according  to  the  various 
sectors: a larger impact in the case of tobacco and sheep and goats, and a lower impact in the 
case of sugar beet and olive oil. In addition, in the cattle, dairy and olive oil sectors, Article 68 
recipients showed (on average) a higher ROI, even in the absence of Specific Support, relative to 

83 

 
Evaluation of Article 68 measures 

non-recipients.  Therefore,  on  average,  these  sectors  were  in  a  condition  of  relative  advantage 
already  before  the  implementation  of  Article  68.  Conversely,  in  all  the  other  analysed  sectors, 
simulations carried out showed that recipients had a lower ROI relative to non-recipients. In this 
case, Article 68 implementation made it possible to reduce but not to annul the disadvantage (sheep 
and goats, cotton, durum wheat, tobacco). 

•  At  the  Member  State  level  the  scenario  was  varied  concerning  the  average  ROI,  and  this  is 
particularly evident in sectors where the measures were implemented by a large number of Member 
States (cattle, dairy, sheep and goats). In this case, the analysis showed average ROI >0 but also 
ROI<0 within the same sector depending on the Member States. In general, there was an inverse 
relationship between the ROI values and the level of the average wages on which the opportunity 
cost of family labour was computed. 

Results showed that in most cases for which the simulated ROI (without Article 68) was <0, 
Specific  Support  reduced  the  negativity,  but  without,  however,  cancelling  it  (for  example, 
cattle  in  France,  Ireland,  Poland,  Finland,  Slovenia,  UK  Scotland;  sheep  and  goats  in  France, 
Finland, Ireland). In these cases, the implementation of Specific Support at Member State level 
was not sufficient to guarantee economic viability of the sector. 

B.  The second analysis examined the percentage of farms, in the different sectors, with ROI>0 and 

those with ROI<0.  

•  In general, at the aggregated level, the percentage of farms that realised ROI>0 varies according to 
the sector. Therefore, depending on the sector, a more or less large percentage of farms with ROI<0 
(and thus not  viable)  managed  to  maintain  their  business  only  by  reducing  the  remuneration of 
family labour below its opportunity cost, and without being able to offer a return on invested capital.  

Furthermore, in almost all sectors (with the exception of sugar beet and olive oil), the percentage 
of Article 68 recipients with ROI> 0 in the simulated situation (without Specific Support) was lower 
than that of non-recipients of Member States that have implemented the measures. Hence, Specific 
Support played a role helping to move producers (in some cases even high percentages) from 
a non-viable situation to a viable situation. This was particularly true in the case of some sectors 
(tobacco and cotton), while it was less significant in other sectors (sugar beet, dairy and olive oil). 

•  The analysis at the Member State level reflected the analysis at the aggregated level and highlighted 
different situations within each sector: i.e. in each sector there was a more or less large percentage 
of farms with ROI<0 (not viable). The implementation of Specific Support has, also in this case, 
allowed producers to move (more or less high percentages) from a non-viable situation to a viable 
situation:  the  largest  impact  was  observed in  Finland,  Denmark  and  France in the  cattle  sector, 
France and Bulgaria in the sheep and goat sector, Spain and Poland in the tobacco sector. 

  Competitiveness  

Considering the objectives of Article 68 support, we analysed the competitiveness based on quality. The 
analysis was carried out for beef and sheep meat, cow milk, sugar beet, tobacco and olive oil sectors, 
only for Member States that have implemented the measure.  

The results showed that in general the impact of Specific Support on quality was limited, with the 
exception of tobacco.  In this latter sector, the average quality further increased relative to the period before 
the Specific Support implementation.  The  Specific  Support  eligibility  criteria  led  to  the  exit  from  the 
sector of less  performing  farmers  producing  tobacco of lower  quality  (which  started already with the 
CMO reform), with positive effects on the demand / supply balance (no accumulation of unsold stock after 
2010). 

84 

 
 
Evaluation of Article 68 measures 

Moreover,  the  role  of  Specific  Support  on  quality  improvement  was  also  analysed  through  the 
improvement in the relative prices, based on the assumption that there is a direct relationship between 
quality improvement and an increase of price. In addition to the sectors previously mentioned, the durum 
wheat sector was also analysed. The lack of reliable data on sugar beet prices did not allow analysis of 
this sector.  

In general, the analysis of the relative prices confirms the limited impact of Specific Support on quality. 
Concerning tobacco, the increasing price trend which started with the CMO reform was interrupted in 
conjunction with the implementation of Article 68. This suggests that, knowing the existence of an aid 
linked  to  production,  buyers  bargained  with  producers  to  obtain  a  lower  purchase  price.  Therefore, 
through this lower price, producers actually lost part of the support, which was transferred to (captured 
by) buyers. 

  Sustainability of primary production 

To analyse the sustainability of the production, we have examined the capacity of Specific Support to 
increase the stability of production flows, that was a specific objective of the measures under objective 
(1)(b) specific disadvantages. Moreover, the analysis was also carried out on sectors that have benefited 
from the measures under objective (1)(a)(ii) quality because, as it was an aid linked to production, it 
could have had influenced producers interest to produce. 

Concerning sectors benefiting from measures under objective (1)(b) specific disadvantages, the effects 
on production stability were limited (beef meat) or zero (cow's milk). Conversely, in the sheep meat 
sector,  Specific  Support  contributed  significantly  to  slow  down  the  decreasing  trend  in  production, 
particularly  in  Member  States  that  during  the  2003  CAP  period  had  chosen  partial  decoupling. 
Therefore,  the  measure  did  not  stimulate  an  over  production  relative  to  years  before  the  2003  CAP 
implementation. 

Concerning the sectors benefiting from the measures under objective (1)(a)(ii) improving the quality of 
agricultural products, the impact of the measure was rather uneven. In particular, in tobacco and cotton 
sectors,  Specific  Support  generated  opposite  impacts.  In  the  tobacco  sector,  it  induced  a  production 
decline, due to the abandonment of low quality tobacco production. In the cotton sector, it stimulated 
(together with other favourable factors) a production increase (although at levels far lower than those 
observed before the implementation of the 2003 CAP). In the other sectors (durum wheat (1), sugar beet 
and olive oil), there was no impact on production. 

  Sustainability of processing industries 

The analysis of the sustainability of the processing industry concerned only the sectors for which the 
supply of raw materials produced locally is a determinant element of survival (i.e. slaughtering industry, 
dairy,  industry  of  first  processing  of  raw  tobacco,  cotton  industry,  and  sugar  industry).  For  these 
industries we analysed two aspects: a) the stability of supply flows of raw materials; b) the possible 
impact on the industrial structure. 

Concerning the stability of supply flows of raw materials, the results derived directly from the analysis 
of the sustainability of primary production: with the exception of cotton, the measures did not prevent 
the  production  decrease  but  only  a  slowdown  of the decreasing  trend.  Therefore  Article  68  was  not 
sufficient to ensure the sustainability of the processing industries. In this context, the case of tobacco, 
showing  an  improvement  of  the  average  quality  of  supplies  but  a  decrease  of  quantities  produced, 
represented  a  special  case:  indeed  the  decrease  of  quantities  seems  to  have  met  the  first  processing 
industries’ requests, as these are no longer obliged to handle (as before) a product of low quality not 
demanded by manufactures 

1 However, in Italy the implementation of the “environmental” measure stimulated a new interest of producers: the measure contributed to 
areas stabilisation and, indirectly, also to production stabilisation. 

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Concerning the impact on the industrial structure, the analysis (carried out for the cotton industry, 
first  tobacco  processing  industry  and  sugar  industry)  showed  that  the  dynamics  of  the  structure 
(number of factories) of the analysed industrial sectors are related to the 2003 CAP reform and 
were not affected by the implementation of Article 68.  

However in the case of tobacco and sugar, the decrease of primary production might have had a negative 
impact on the utilization rate of the factories. The resulting increase in fixed costs per unit of product 
may  have  deteriorated  the industry  competitiveness, if  it  had not  been accompanied  by  a  more  than 
proportional growth in sales prices as a result of quality improvement. Conversely, in the case of the 
cotton industry in Spain, the growth of supply flows happened in a context of price increase on the world 
market and of deep restructuring of the cotton sector, with a growth of the utilization rate of the factories 
capacity at levels higher than those observed before the implementation of the 2003 CAP. 

86 

Evaluation of Article 68 measures 

6  THEME  3  –  SUPPORT  FOR  SECTORS  AND 
PRODUCTIONS  TO  CURB  DISADVANTAGES: 
IMPACTS  BEYOND  THE  SUPPORTED  SECTORS 
AND REGIONS 

The EQ 3 explored to what extent Specific Support contributed to the competitiveness of the supported 
sectors compared to non-supported sectors, regions and Member States.  

6.1  COMPREHENSION OF THE QUESTION 

This evaluation question required further analysis on the competitiveness made in EQ2 and invited to 
make a comparison between competitiveness of supported sectors and non-supported sectors/Member 
States. 

Therefore, also in this case, the measures taken into account in the analysis were those under objective 
(1)(a)(ii) “quality improvement” and Article 68 (1)(b) “specific disadvantages”. 

In particular, the question invited to assess the impact of such measures on two levels: the first one 
concerned the competitiveness of the agricultural component of the supply chain; the second concerned 
the competitiveness of the industrial component (processing industry). 

a-  Regarding the agricultural component, as already mentioned in EQ2, competitiveness can be related 
to  cost  competitiveness  (the  lowest  unitary  costs  of  production)  or  positioning  (through  higher 
quality  of  the  product,  which  should  result  in  a  greater  sale  price  compared  to  the  "standard" 
product). In both cases the expected impact of the implementation of Specific Support measures 
(both  in  terms  of  cost  compensation  and  quality  improvement)  is  a  higher  gross  margin  of  the 
products. 
However, the theory states that coupled payments (including Article 68 coupled measures) can have 
generated a distortion of competition between farmers having received Article 68 coupled support 
compared to farmers that have not received it but produce the same product in different Member 
States or even within the same Member State (in other words, an artificial competitive advantage 
to farmers having received Article 68 coupled support could be generated). 
Moreover, concerning non-supported sectors, the impact of the reduction of SPS entitlements used 
to finance Article 68 was considered. The analysis carried out in EQ 6 highlighted that many of the 
most  significant  Article  68  measures  in  budgetary  terms  were  fully  financed  by  unused  funds. 
Therefore, no appreciable change in non-supported farms should have occurred. However, if there 
was any effect, it would not have been in terms of product competitiveness but in terms of income 
of the farmers concerned by the SPS entitlements reduction (as defined by the theory (1)). 

b-  Similarly, with regard to the industrial component, market competition is the condition in which 
companies play their competitiveness in a market, producing the same goods or services (supply) 
to satisfy a variety of buyers (demand). In competitive systems, industries face competition in order 
to consolidate or increase their production share (in value). 
In principle, when in a given market the basic conditions (the rules of the competitive game) are 
not  homogeneous,  competitiveness is affected  by  distortions,  since  certain industries/companies 
can  benefit  from  artificial  competitive  advantages,  which  translate  into  an  increase  in  their 
production share to the detriment of the others. 
In  theory,  the  optional  implementation  of  Article  68  measures  in  the  Union  territory  may  have 
generated this situation among industries of the various Member States, particularly in the areas 

1 Decoupled payments do not have an influence on farmer’s behaviour nor on product competitiveness (see § 2.1.1 – Theoretical analysis). 

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Evaluation of Article 68 measures 

where the activity of processing industries is linked to the availability of local raw material. For the 
sectors of industrial processing already considered in EQ2, EQ3 invited to verify whether and to 
what extent the industrial systems of the Member States that have implemented such measures have 
benefited from artificial competitive advantages in relation to industrial systems of the Member 
States that have not implemented it. 

6.2  METHODOLOGY AND LIMITATIONS 

The role  played  by  the  Article    68  measures  under  objectives (1)(a)(ii) “improving  the  quality”  and 
(1)(b) “specific disadvantages” on the competitiveness of recipient farms operating in supported sectors 
vis-à-vis non-recipient farms operating in the same sectors, has been analysed on the basis of FADN 
data. The aggregation methods and criteria adopted for the FADN data are the same as those described 
in  EQ2  (see  5.2).  Methodological  details  on  the  computation  of  the  indicators  are  specified  in  the 
following paragraphs. 

As already recalled in EQ2, in order to overcome the limitations associated with the farm data of FADN 
database,  the  analysis  was  carried  out  on  samples  of  farms  specialised  in  the  productions  object  of 
Specific Support. In these terms, the results that express the gross margin of the farms also represent a 
proxy  of  the  gross  margin  of  the  productive  sectors  (or  the  specific  product)  in  which  farms  are 
specialized. Moreover, the use of samples of specialized farms can (partially) overcome the limit of the 
lack of distinction between Article 68 measures. 

With  regard  to  the  industrial  component,  the  methodological  approach  regarded  the  effects  of  the 
implementation of the Specific Support measures on the competitiveness of the whole industry in each 
Member State. Therefore, in the EU Single Market, the analysis of the competitiveness of industry is 
equivalent  to  the  analysis  of  the  competitiveness  of  their  country-system  (therefore,  all  processing 
industries of a sector of each producer Member State). 

The analysis studied the changes in competitiveness and the relationships between these changes and 
the implementation of the Specific Support in terms of variation in the production shares (in value).  

To express a judgment on the role of Specific Support, we compared the average production share  in 
value of the period before and after Specific support implementation of the country-systems that have 
implemented  the  measures  with  the  average  production  shares  of  the  country-systems  that  have  not 
implemented such measures,. 

In addition, for each sector, Member States were divided into five groups, according to the system of 
implementation of the 2003 CAP: A = Partial decoupling + Article 69 ; B = Partial decoupling; C = 
Decoupling; D = Decoupling + Article  69; E = SAPS + CNDP linked to production. 

Finally we analysed the competitive positioning on the EU market of the different country-systems of 
the Member States that have implemented the measures under objectives (1) (a) (ii) quality and (1) (b) 
specific  disadvantages  (as  well  as  of  the  group  of  Member  States  that  have  not  implemented  such 
measures):  comparison of the  changes  in  production shares  (calculated  on the average  of  the  period 
before and after the implementation of Article  68) with the difference of the variations of prices with 
the average weighted EU prices (averaged over the period before and after application of Article  68). 

88 

 
 
Evaluation of Article 68 measures 

6.3  ANSWER TO EQ3 

6.3.1  ANALYSIS  OF  THE  EXISTENCE  OF  A  GAP 

IN 
COMPETITIVENESS BETWEEN SECTORS RECEIVING SPECIFIC 
SUPPORT AND THOSE THAT DID NOT: GAUGING THE EXTENT 
TO WHICH SPECIFIC SUPPORT HELPED TO REDUCE THIS GAP 

6.3.1.1  Methodological approach 

For each of the Member State/sector combinations and their aggregations, the Gross Margins of each 
FADN sample and subsample were calculated (recipients and non-recipients of Article 68 measures).  

Gross Margins were calculated by deducting Specific Costs from Receipts (SE281): 
Gross Margin with art. 68 = SE131+SE610+SE615- SE281 

In  turn,  Receipts  were  calculated  as  the  sum  of  Total  Output  (SE131)  plus  aid  received  linked  to 
production i.e. the variables SE610 (subsidies on crops) and SE 615 (subsidies on livestock). It is noted 
that the aid linked to production relating to Article 68 is already included in the latter two variables:  
Receipts with art. 68 = SE131+SE610+SE615 

To calculate the GM and REC of recipient farms in the absence of Article 68 Specific Support (simulated 
situation), the variable SE650 (Article 68 aid) was deducted from actual GM and REC values: 
Receipts without art. 68 = = SE131+SE610+SE615-SE650 
Gross Margin without art. 68 = SE131+SE610+SE615-SE650-SE281 

To allow a comparison between recipients and non-recipients of the measures, Gross Margins have been 
placed in the context of two items: 

  Livestock Unit in the case of livestock sectors (cattle, dairy, sheep and goat).  
  UAA in the case of crop sectors (durum wheat, olive oil, cotton, sugar beet, tobacco). 
It is stressed that for livestock sectors it is not appropriate to calculate GM/UAA, since in the FADN 
database, and for some Member States, many farms are landless (in such cases the average unit value 
GM/UAA would be overvalued). The indicator GM/LU is thus more pertinent.  

Finally, to complete the analysis of competitiveness, for each of the Member State/sector combinations 
and their aggregations the incidence (in % terms) of Specific Support in relation to Gross Margin (% 
SS/GM) was calculated only, of course, for samples of recipient farms. 

The analysis was carried out at two levels: 

•  At the aggregated level, the group of Member States having implemented the measures and the group 
of Member States that have not implemented  them.  In this case, the analysis  sought to express a 
judgment on the overall policy. 

•  At the level of Member States by sector that have implemented the measures: the analysis sought to 
examine the differences among Member States and to express a judgment on the impact of Specific 
Support according to Member States choices. 

For each level, using the method described in 5.2, the possible existence of a gap in competitiveness 
was verified by comparing the unit values of GM (GM/ UAA or GM/LU) of the set of farms benefiting 
from measures under objectives (1) (a) (ii) quality and (1) (b) specific disadvantages with those of the 
set of non-recipient farms. For the latter group two cases were considered:  

 

 

farms of Member States that have implemented measures in the analysed sectors (farms not 
applying for and/or excluded from Specific Support as they do not meet eligibility criteria) 
farms of Member States that have not implemented the measures. 

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Evaluation of Article 68 measures 

Moreover, in the case of recipients of Specific Support, the Gross Margin has been computed in the 
real situation (with Specific Support) and in a simulated situation (without Specific Support). 

6.3.1.2  Results at aggregate level 

The tables below show the results of the analysis, individually for the livestock and crop sectors. With 
regard to the tables: 

 

 

 

the first set of columns gives the GM/LU and GM/ha in value (Euro) for the livestock sectors 
(Euro/LU) and crop sectors (Euro/ha), by recipient and non-recipient.   
the second set of columns shows the ratios GM/LU and GM/Ha. Values <1 (for the ratios) mean 
that for recipient farms the sector is less competitive than that of non-recipient farms, and vice 
versa.  
the third set of columns shows the differences between the ratios of real situations (with SS) and 
simulated situations (without SS). The gain in competitiveness of recipient farm sectors is 
calculated as a percentage variation between the ratios of real situations and those of simulated 
situations (1). 

Table 34: Livestock sectors: Average Gross Margin/Livestock Units, in the simulated situation (without 
SS) and real situation (with SS), by sector (Euros); Ratio of GM/LU of recipients to GM/LU of non-
recipients (*) 

(*) Values of ratios >1 in red - Source: based on FADN data 

Table 35: Crop sectors: Average Gross Margin/Ha, in the simulated situation (without SS) and real 
situation (with SS), by sector (Euros); Ratio of GM/Ha of recipients to GM/Ha of non-recipients (*) 

(*) Values of ratios >1 in red - Source: based on FADN data 

The results of the analysis provided a global picture of the role played by Specific Support regarding the 
competitiveness of sectors in recipient farm compared with non-recipient farms. 

The map below shows, for each sector, the overall change in competitive positioning for the recipients 
of Article 68 measures compared with non-recipients, within the same Member State, and compared 
with the farms (non-recipient) of Member States that have not implemented the measures. 

Competitive positioning, as described previously, derives from the ratio of GM: 

1  The  %  variations  are  obviously  the  same  for  both  comparisons  between  recipients  and  non-recipients  of  the  same  MSs  and  MSs  non 
implementing the measures.   

90 

A : MS not implem. Art. 68B: MS implem. Art. 68C1: with Art. 68C2: without Art.  68C1/AC2/ AC1 /BC2/BC1A-C2AC1B-C2BCattle6225356215831.000.941.161.090.060.076.58Sheep and Goat4337618317601.921.761.091.000.160.099.30Dairy1,3401,1241,2391,1980.920.891.101.070.030.043.42 Recipients mesures Art. 68  Not Recipients mesures Art. 68 DifferencesGain in competit. (Var %)RatiosA : MS not implem. Art. 68B: MS implem. Art. 68C1: with Art. 68C2: without Art.  68C1/AC2/ AC1 /BC2/BC1A-C2AC1B-C2BCotton1,1911,6091,8051,5791.521.331.120.980.190.1414.31Durum wheat3075485645031.841.641.030.920.200.1112.15Sugar beet1,0331,2791,7931,6901.741.641.401.320.100.086.14Olive oil8072,3242,2392,1302.772.640.960.920.130.055.11Tobacco1,8913,1063,6862,6841.951.421.190.860.530.3237.31 Not Recipients mesures Art. 68  Recipients mesures Art. 68 DifferencesGain in competit. (Var %)Ratios 
 
 
                                                      
Evaluation of Article 68 measures 

  of the sectors of recipient farms vis-à-vis the same sectors of non-recipient farms in the same 

Member State, in the simulated situation (without SS, indicated as C2/B) and in the real situation 
(with SS, indicated as C1/B) : Values are given in the y-axis  

  of the sectors of recipient farms vis-à-vis the same sectors of farms in the Member State that have 
not implemented the measures, in the simulated situation (without SS, indicated as C2/A) and the 
real situation (with SS, indicated as C1/A): Values are given in the x-axis 

For  each  sector  receiving  Specific  Support,  the  change  in  global  competitiveness  is  seen  by  the 
movement on the map. The direction and intensity of change is indicated by the arrows. 

Figure 21: Change in global competitiveness of sectors in farms benefiting from Article 68 measures 
compared with non-recipient farms of the same Member State and farms of Member States that have not 
applied the measures 

Source: elaborations on FADN data 

Since Specific Support (linked to production) generates by definition a growth in competitiveness of the 
sectors in which recipient farms are operating compared with non-recipients (in the map all sectors move 
upwards and to the right), the results of the global analysis point to the following conclusions: 

With  regard  to  livestock  sectors,  there  was  a  significant  difference  between  the  competitiveness  of 
sectors in recipient farms and in non-recipient farms of the same Member State and the competitiveness 
of sectors in recipient farms compared with the farms of Member States that have not implemented the 
measures.  

  the comparison of recipient farms with non-recipient farms of the same Member State showed that: 
recipient farms operating in the cattle and dairy sectors enjoyed an higher degree of competitiveness 
even in the absence of Article 68 support compared with non-recipient farms, while in the sheep and 
goat sector the degree of competitiveness was almost the same. In these sectors therefore there was 
(on  average)  no  gap  in  competitiveness,  which  on  the  other  hand  was  introduced  with  the 
implementation of Specific Support to recipient producers only (generating a positive gap).  

  the  comparison  of  recipient  farms  with  farms  of  Member  States  that  have  not  implemented  the 
measures showed that:  the simulated competitiveness (without Article 68) of recipients was lower, 
compared with farms in Member States that have not implemented Article 68, in the cattle and dairy 
sectors, and remained lower in the actual situation (with Article 68). In these two sectors, therefore, 
there was a gap in competitiveness that Specific Support managed to reduce but not to bridge. Finally, 
in the sheep and goat sector, simulated competitiveness was already very high for recipient farms (so 
there is no gap), and grew further when Specific Support was implemented. In view of this situation, 

91 

0.800.901.001.101.201.301.401.500.500.751.001.251.501.752.002.252.502.753.00Recipients / Not Recipients inMS implem Art. 68 : C1/B and C2/BRecipients /Producers in MS not implem. Art .68 : C1/A and C2/AWITHART. 68WITHOUTART. 68Olive OilDairyDurum wheatCottonTobaccoCattleS & GSugar beet 
Evaluation of Article 68 measures 

it is quite paradoxical that in the sheep and goat sector, Specific Support played an important role 
(9.3%), while in the dairy sector the global rise in competitiveness was rather modest (+3.4%). 
With regard to the crop sectors, a dichotomy was observed between the competitiveness of recipients 
and non-recipients of the same Member State on the one hand, and the competitiveness of recipients and 
farms of Member States that have not implemented the measures on the other: 

  the  comparison  of  recipients  with  non-recipients  of  the  same  Member  State  showed  that:  the 
recipients of all sectors, with the sole exception of sugar beet, recorded a gap in competitiveness in 
the simulated situation (bigger for tobacco; very small for cotton). In all sectors, the implementation 
of Specific Support made it possible to bridge this negative gap, and even to turn it into a positive 
gap,  significantly  so  for  the  tobacco  sector.  On  the  other  hand,  for  sugar  beet  the  simulated 
competitiveness of recipients was much better than that of non-recipients, and grew further when 
Specific Support was implemented. 

  the comparison of recipients with farms of Member States that have not implemented the measures 
showed that: the recipients of all sectors were significantly more competitive than non-recipients, 
already in the simulated situation. Generally speaking, therefore, the introduction of Specific Support 
has further widened the (positive) gap already enjoyed by recipients.  

  Article  68,  however,  appears  to  have  played  a  quite  varied  role  in  the  various  sectors,  with  the 

extremes of tobacco (37.3%) and olive oil (5.1%). 

6.3.1.3  Results  at  the 

level  of  single  Member  States  that  have 
implemented  Article  68  measures  under  objectives  (1)  (a)  (ii) 
quality and (1) (b) specific disadvantages 

In  the  cattle  sector,  in  all  Member  States,  in  the  simulated  situation,  there  was  a  (negative)  gap  in 
competitiveness  between  recipients  and  non-recipients,  with  the  exception  of  Belgium,  Poland  and 
Scotland, where competitiveness was already higher. The implementation of Specific Support made it 
possible  to  bridge  this  gap  (and  overturn  the  situation)  in  France,  Spain  and  Slovenia.  In  all  other 
Member  States,  the  implementation  of  Specific  Support  has  improved  the  competitive  situation  of 
recipients, but has not closed the negative gap completely. 

Concerning the dairy sector, in most Member States (10 out of 15) there was a (negative) gap in the 
simulated  (without  support)  competitiveness  between  recipients  and  non-recipients.  In  Italy,  Latvia, 
Poland, Slovakia and Slovenia the simulated competitive position of recipients was already better than 
that of non-recipients. The implementation of Specific Support allowed only Hungary and Bulgaria to 
bridge this gap (and overturn the situation), while in all other cases the size of Specific Support did not 
allow the gap to be cancelled. 

In the sheep and goat sector, in all Member States, with the sole exception of Portugal, the simulated 
competitiveness  of  recipients  was  lesser  than  that  of  non-recipients.  In  some  cases  this  gap  was 
particularly important (Netherlands 0.71, Greece 0.76, France 0.79). The implementation of Specific 
Support made it possible to bridge this gap in Bulgaria, Italy, Ireland and Finland, and to reduce it in 
other  Member  States  (where  the  gap  was  greater).  In  Netherlands  the  implementation  of  Specific 
Support reduced the gap to a negligible degree. 

With regard to other sectors the situation of Greece is interesting: for both durum wheat and olive oil 
the competitiveness of recipients was higher in the simulated situation. The same was observed for Italy 
in the tobacco sector: in this sector the implementation of Specific Support enabled recipients in Spain 
and  Poland  not  only  to  bridge  the  gap,  but  even  to  create  a  competitive  advantage  vis-à-vis  non-
recipients.  

Apart from the role played in reducing possible gaps in competitiveness, the implementation of Specific 
Support in the various sectors and Member States has had a varying role in terms of competitive gains.   

The  table  below  highlights  gains  in  competitiveness  in  Member  States  that  have  implemented  the 
measures in the various sectors, calculated as a percentage variation of the ratios (GM/LU and GM/Ha) 

92 

Evaluation of Article 68 measures 

in  the  case  of  recipients  and  non-recipients  within  the  same  Member  State.  in  the  real  and  in  the 
simulated situation, . 

Table 36: Gains in competitiveness of recipients compared with non-recipients in different sectors 
following the implementation of SS 

(*) Values >10% in red; values < 3% in green 

Source: based on FADN data 

We can observe that Specific Support has played the most important role in the tobacco sector, in all 
Member States. In Spain, in particular, the competitiveness of recipients has almost doubled compared 
with non-recipients (+93%).  

An important role has also been played in Greece in the cattle sector (+30%), in Bulgaria in the sheep 
and goat sector (+22%) and in Finland in cattle sector (+20%). 

On the other hand, it appears to have played an irrelevant role in Netherlands in the sheep and goat 
sector (+0.8%), but also in the dairy sector in most Member States (in particular Austria and Italy), and 
in the cattle sector in Belgium. 

6.3.1.4  Importance of Specific Support for the Gross Margin of recipient 

farms, in the various sectors  

To further analyse  the  role  played  by  Specific  Support regarding  the  competitiveness  of  sectors, we 
calculated its percentage incidence on Gross Margin (for recipients only). In other words, the indicator 
measures the extent to which Specific Support has contributed to gross margin formation of recipient 
farms in the various sectors.  

The analysis  was conducted  in  two  stages:  A)  at a  global level,  and  B)  at  Member  State  level  have 
implemented the measures. 

  Analysis at global level 

At a global level, Specific Support given to the tobacco sector has had the most important role in absolute 
terms, having pushed up average GM levels by over 27%. In the Crop sectors, Specific Support played 
a crucial role in the cotton sector (12.5%), but had a modest impact in olive Oil (below 5%). 

In the livestock sectors, a significant role was played in the sheep and goat sector (8.5%), while it was 
confirmed  that  Specific  Support  had  the  lowest  effect  on  the  dairy  sector  (only  3.3%  towards  the 
formation of GM).  

93 

CattleS&GDairyingDurum WheatOlive OilTobaccoBGR 22.115.8   BEL1.1     CZE7.9 3.8   ELL30.37.8 16.93.3 ESP4.64.66.2  93.0EST  4.9   FRA5.911.13.14.2  HUN  10.5   IRE7.415.6    ITA6.05.81.811.35.828.3NED 0.8    LVA  3.9   OST  1.3   POL3.3 2.8  44.7POR6.05.54.3   ROU  5.8   SUO20.117.02.4   SVK  4.2   SVN7.1 5.8   Scot8.5      
 
Evaluation of Article 68 measures 

Figure 22: Recipients of Article 68 measures: global % SS/GM out of all Member States that have 
implemented the measures in the various sectors 

Source: based on FADN data 

  Results by Member State that have implemented measures under objectives (1) (a) (ii) quality 

and (1) (b) specific disadvantages 

The  analysis  was  carried  out  comparing  the  SS/GM  percentage  of  each  Member  State  that  have 
implemented the measures under objectives (1) (a) (ii) quality and (1) (b) specific disadvantages in the 
various sectors with the average percentage of the group of Member States that have implemented the 
measures (1).  

The results highlighted a great variety of situations, in particular in the livestock sectors, where there 
were:  

  Member States in which the relevance of Specific Support on GM was almost marginal (less than 
2%, for instance in the sheep and goat sector in Netherlands, cattle in Belgium and dairy in Austria, 
Italy and Poland)  

and 

  Member States in which the role of Specific Support was vital, i.e. above 10%, in particular in Greece 
and Finland in cattle; in Hungary (and in Bulgaria, to a lesser extent) in the dairy sector; in Bulgaria, 
Finland and France in S&G. 

In the crop sectors the role of Specific Support was fundamental above all in the tobacco sector, where 
in all Member States its contribution has exceeded 25% (44% in Spain). Specific Support was also very 
important (> 10%) in the durum wheat sector in all Member States.  

6.3.2  ROLE PLAYED BY MEASURES UNDER OBJECTIVES (1) (A) 
(II)  QUALITY  AND  (1)  (B)  SPECIFIC  DISADVANTAGES  ON 
THE COUNTRY-SYSTEMS VALUE PRODUCTION SHARE 

In this chapter we intended to evaluate whether and to what extent the implementation of the measures 
under objectives (1) (a)(ii) "improving of the quality" and (1)(b) "specific disadvantages" allowed the 
country-systems that have implemented the measures to improve production shares (in value), compared 
to country-systems that have not implemented such measures. 

The analysis was carried out for the sectors for which local supply of raw materials industries is vital. 

Production shares in value (VPS) were computed by dividing the value of the production (VP of each 
Member State) by the value of the EU total production: 

VPSi = VPi/ ∑(VPi) *100       i= Member State 1….Member State 27 

VPi were calculated as the product of the production by average prices: VPi = Qi * p 

1 In the cotton and sugar beet sectors the size of the samples made it possible to analyse only one Member state (Spain). 

94 

 - 5.00 10.00 15.00 20.00 25.00 30.00CattleSheep & GoatDairyingCottonDurum wheatSugar beetOlive oilTobacco 
                                                      
Evaluation of Article 68 measures 

To  express  a  judgment  on  the  role  of  Specific  Support,  we  compared  the  average  VPS  after  the 
implementation of Article 68 (2010-2013) with the average VPS of the period immediately preceding 
(2005-2009). 

In addition, for each sector, Member States were divided into five groups, according to the system of 
implementation of the 2003 CAP:  A = Partial decoupling + Article 69; B = Partial decoupling; C = 
Decoupling; D = Decoupling + Article 69; E = SAPS + CNDP linked to production. 

  Beef meat 

In the beef meat sector, we analysed the activity of production of cow, heifer and young bull meat. 

The results of the analysis showed that for all Member States that have implemented the measures, the 
VPS, on average, increased after Article 68 implementation for cow meat and young bull meat. While 
it decreased in the case of heifer meat. 

However this result was determined by the statistically anomalous data of Spain that showed an increase 
of more than 17 points (from 6.4% to 23.8%) concerning young bull meat and a drop of more than 8 
points  (from  15.7%  to  7.7%)  in  the  case  of  heifer  meat.  Hence  it  is  likely  that  there  was  some 
classification issue in this Member State that, unfortunately, also alters all the other results.  

However,  the  following  evidence,  regarding  Member  States  that  have  implemented  the  measures, 
emerged from the analysis: 

•  among  the  largest  producers,  France  was  the  country-systems  that  lost  VPS  in  all  three  animal 
categories, and in particular in the young bull category. In this category, Italy also lost significantly 
production shares, while a net gain was obtained by Denmark; 

•  conversely, Ireland and United Kingdom were the only country-systems increasing their VPS in all 
three categories. However, in the case of UK it is necessary to consider the effect of the end of the 
embargo caused by the BSE diffusion (Bovine Spongiform Encephalopathy, also called mad cow). 
In all the other country-systems gains and/or losses of VPS were quite limited and did not follow a 
clear rule allowing to link Article 68 implementation to VPS variations. 

• 

  Sheep meat 

In the sheep meat sector, we analysed lamb meat production activity in country-systems for which price 
and quantity data were available. 

Considering  the  development  of  the  value  of  production  (decreased  in  all  major  producing  Member 
States except UK), the VPS of all Member States that have implemented the measures decreased sharply 
after Article 68 implementation (- 7 points, from 65.8% to 58.8%). 

Spain  and  Italy  are  the  country-systems  where  the  decrease  of  VPS  was  more  significant.  The  loss 
observed in these two Member States was only partially offset by a limited increase of Netherlands and 
Ireland. Therefore, especially in Spain, the implementation of the measures was not enough to stop the 
drop started and pursued, without interruption since the beginning of the period, despite the decision to 
implement partial decoupling within the 2003 CAP. 

This, to a lesser extent, also concerned France where, however, the drop of VPS (following the end of 
partial decoupling) stopped and stabilised after 2010. 

  Dairy 

In this sector VPS variations were minimal nearly in all country-systems. On the other hand, the quota 
system  induces  an  intrinsic  stabilisation  of  production,  therefore  changes  appear  to  be  linked  to  the 
economic situation. 

France and Germany showed a different situation relative to the general one (both country-systems have 
applied the measures), but with opposite results: a more significant VPS drop in France, and a more 
significant  VPS  increase  in  Germany.  Also  in  this  case,  therefore,  it  was  not  possible  to  identify  a 
correlation between Specific Support implementation and VPS variations. 

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Evaluation of Article 68 measures 

  Tobacco 

In the tobacco sector we analysed the production activity of tobacco of varietal groups I (Flue cured) 
and II (Light air cured). The results showed important differences between these two groups, both in 
general and at country-systems level. 

In general terms, there was a loss of VPS in group I  (Flue cured) in all the Member States that have 
adopted the measure "quality improvement", and an increase in group II (Light air cured) . 

In the case of group I (Flue cured), the negative result was mainly due to the sharp fall of the Italian 
production share (-12.4 points, from 46.7% to 34.3%), which nevertheless remained the leader-system 
of this group. 

In the case of group II (Light air cured), the overall result was positive mainly due to Spain that showed 
an increase of its production share of 4.2 points (3.2 to 7.4%). Also in this case Italy decreased its VPS 
but remained (largely) the leading country-system of group II (Light air cured). 

Concerning  the  other  country-systems  that  have  implemented  the  measure,  we  observed  the  VPS 
stability  of  France  and  the  important  improvement  of  Poland  in  group  II  (Light  air  cured),  which 
corresponded to a slight decrease in group I (Flue cured). 

In any case, and in contrast to the other sectors, the results in the tobacco sector appear also related to 
the implementation of the measure. However, the effects on the VPS highlight important differences, 
which are further analysed in paragraph 6.3.3. 

  Olive Oil 

In the olive oil sector results must be taken with caution, because the value of production is estimated 
on the basis of the average prices of extra virgin olive oil. Therefore, actually, this value is overestimated. 

Bearing in mind this limitation, results showed a significant loss of the production shares in the group 
of Member States that have implemented Article 68 measure. Within this group, Portugal was the only 
Member States showing an increase  

However, as already described in EQ2, the production of olive oil followed an evolution independent 
from the implementation of Article 68 which covered only a limited share of the total production, and 
annual fluctuations can be ascribed to other events. 

Therefore, also in this case it is not possible to identify a relation between the implementation of the 
measure and VPS variations. 

  Cotton 

For  cotton,  the  lack  of  official  statistical  data  concerning  prices  did  not  allow  the  calculation  of 
production shares in value. Therefore, the analysis was limited to the level and changes in production 
shares in quantity of cotton fibres. As already mentioned, the only country-systems having implemented 
the “improvement quality measure” is Spain.  

The increase of production in Spain starting from 2009/2010, after the period of sharp drop following 
the implementation of the 2003 CAP, allowed the regaining of the production share of this country-
system. As already stated in EQ2, the implementation of the measure Article 68 played a role (together 
with other factors) in this recovery. 

6.3.3  ROLE PLAYED BY MEASURES UNDER OBJECTIVES (1) (A) 
(II)  QUALITY  AND  (1)  (B)  SPECIFIC  DISADVANTAGES  ON 
THE COMPETITIVE POSITIONING OF THE COUNTRY-SYSTEMS 

The  purpose  of  this  paragraph,  was  to  analyse  the  positioning  on  the  EU  market  of  the  different 
competitive systems of the Member States that have implemented measures under objectives (1) (a) (ii) 
quality  and  (1)  (b)  specific  disadvantages  (as  well  as  of  the  group  of  Member  States  that  have 
implemented and the group of Member States that have not implemented such measures). 

96 

Evaluation of Article 68 measures 

To this  end  we  compared the  changes  in  production shares  (calculated  on the average  of  the  period 
before  and  after  the  implementation  of  Article  68)  with  the  difference  of  prices  variations  with  the 
average weighted EU prices (averaged over the period before and after application of Article 68). 

The EU average weighted prices were calculated as: PEU = ∑(Vi*Pi)/ ∑Vi   (i = 1…n Member State) 

As in the previous chapter, before corresponds to the period 2005-200909, and after to the period after 
2010 (up to 2013 or 2014 according to data availability). 

The results of the analysis are shown in the following graphs representing the competitive positioning, 
where: 

the intersection of the axes corresponds to the EU average, set to zero. 

a- 
b-  the combination of positive and negative variations, respectively differences of price and of 

production shares defines four quadrants: 

i. 

ii. 

iii. 

quadrant A (positive variations of price differences and of production share differences) 
includes country-systems that have improved their competitive position. 
quadrant C (negative variation  of price differences and of production share differences) 
country-systems that have lost competitiveness. 
quadrants B (negative variations of prices differences and positive variations in 
production shares), and D (positive variations of prices differences and decreases in 
production shares) country-systems where the situation is not clearly defined . However 
in these cases, country-systems should have maintained (more or less) their position, even 
if through the change of one or both components (but of opposite sign). 

On the graphs, in addition, to the group of Member States that have implemented the measures and to 
the group of the other Member States, it has also been highlighted the competitive position of each of 
the major Member States (in terms of production volume) that have implemented the measures, and for 
which data on volumes and prices were available. 

In the case of cow meat, the analysis confirms that, in general, increases and decreases of competitive 
position were very limited, with variations of a few percentages cents. Among Member States, UK was 
an exception as it significantly improved its position (but, as already mentioned, this was due to the end 
of the embargo). In quadrant B, the group of Member States that have implemented Article 68 improved 
its  positioning,  as  well  as  (only  slightly)  Italy  and  Denmark.  On  the  contrary,  France  worsened  its 
position  (as  the  %  price  loss  was  significantly  higher  relative  to  the  production  share  increase).  In 
quadrant D the group of all the other Member States worsened its position and (slightly) Poland (the 
price increase was lower than the loss of production share). France seems to be the Member State losing 
the most its competitive position compared with all the others. For this Member State, therefore, the 
implementation of the measures was not enough to stop this deterioration. 

Heifers meat, compared to cow meat, showed higher improvements and/or drops, in some cases of more 
than ± 2%. UK and Ireland improved their positioning, while the group of the other Member States 
improved it slightly. In quadrant B, Italy showed a slight increase (prices decrease was more than offset 
by the growth in the share of production) as well as Finland, while France showed a limited loss (the 
slight increase in the production share did not compensate the prices decrease). In quadrant D, Poland 
improved (slightly) its positioning and Belgium lost it (also slightly). Spain was positioned in quadrant 
C as a result of the decrease of the production share and of prices. However, this decline could be only 
apparent as a consequence of the statistical classification (see paragraph 6.3.2) 

97 

 
 
Evaluation of Article 68 measures 

Figure 23: Competitive positioning of the country-systems in the cow meat and heifers meat sectors 

Cow meat 

Heifers meat 

Source: Eurostat, Agriview 

The  analysis  concerning  young  bull  meat  confirmed  that  in  this  sector  the  gains  and  losses  in  the 
competitive position of some Member States were rather important. However there were no Member 
States in quadrant A, with the only, very small exception of UK. In quadrant B we note the improvement 
of the competitive position of Spain, as a result of a significant increase in the production share which 
allowed to more than compensate the important loss of price (however, as already noted, this appears to 
be due to problems of statistical classification between young bulls and heifers). The group of Member 
States  implementing  Article  68  improved  its  position  (but  almost  exclusively  due  to  the  Spanish 
increase) and to a lesser extent Denmark. In quadrant D, France and Italy lost significantly their position, 
despite the application of Article 68, due to a significant decrease in relative prices. Overall, France and 
Italy are the Member States losing more despite Specific Support due to the decrease in both production 
share and prices. A deterioration is also observed for all the others Member States. Finally it should be 
noted that the slight deterioration in most of the other Member States that have implemented Article 68 
(Belgium, Finland, Poland, Greece, etc.) was due to prices decrease relative to the EU average prices. 

Among meat sectors, the sheep meat sector is the one for which the most important changes in the 
competitive positioning were observed, with significant improvement and significant deterioration in 
some cases. The group of the others Member States improved sharply its position (but thanks to the 
improvement of the UK position and the stability of the other Member States of the group), due mainly 
to the growth in relative prices. On the contrary, the group of Member States that have implemented the 
measures worsened significantly its position, mainly because of a deterioration in relative prices. With 
regard  to  the  single  Member  States  that  have  implemented  the  measures,  Italy  and  Spain  lost  an 
important share: the first due to an important drop in relative prices; the second due to an important drop 
in production shares. France also worsened significantly its position, especially due to the sharp decrease 
in the production share but a limited decrease in relative prices. In quadrant D, Ireland slightly improved 
its competitive position, since the increase in relative prices offset the decrease in the production share. 

Figure 24: Competitive positioning of the country-systems in the young bull meat and sheep meat sectors 

Young bull  meat 

Sheep meat 

In the dairy sector changes in the competitive positions were not significant. Germany was still the only 
one improving its position (especially due to the improvement in relative price), together with the group 

Source: Eurostat, Agriview 

98 

ESFIPTBEDKFRIEITSIUKLVPLCZMS 68Oth MS-15.0-10.0-5.00.05.010.0-6.0-4.0-2.00.02.04.06.0Variation of relative pricesVariation of production shareDABCESFIBEDKFRIEGRITSIUKLVPLCZMS 68Oth MS-20.0-15.0-10.0-5.00.05.010.0-8.0-6.0-4.0-2.00.02.04.0Variation of relative pricesVariation of production shareDABCESFIPTBEDKFRIEGRITSIUKLVPLCZMS 68Oth MS-25.0-20.0-15.0-10.0-5.00.05.010.0-15.0-10.0-5.00.05.010.015.020.0Variation of relative pricesVariation of production shareDABCPTESFRIENLGRITPLMS 68Oth MS-40.0-30.0-20.0-10.00.010.020.0-70.0-60.0-50.0-40.0-30.0-20.0-10.00.010.0Variation of relative pricesVariation of production shareDABC 
 
 
 
 
Evaluation of Article 68 measures 

of the others Member States. A net loss was observed in France, Spain (-0.7 points) and in the group of 
Member  States  implementing  Article  68.  In  these  cases,  the  determining  factor  was  the  decrease  in 
prices, compared to marginal variations of the production shares. In quadrant D, are positioned Finland, 
Slovakia and Hungary, with an almost irrelevant decrease of their competitive position, as well as Latvia 
with an equally almost insignificant improvement. 

In the olive oil sector (characterized by a small number of producing countries) quite significant gains 
and losses in competitiveness were observed. The Greek competitive system lost competitiveness due 
to the deterioration of both parameters (but mainly to the decrease in relative prices). In quadrant B, are 
placed Portugal and the group of others Member States, both improving their competitiveness following 
an improvement of the production share: In quadrant D, Italy worsened slightly its competitiveness due 
to the decrease of its share production, not offset by an increase in relative prices. 

Figure 25: Competitive positioning of the country-systems in the dairy and olive oil sectors 

Dairy 

Olive oil 

Source: Eurostat, Regulation (EC) No 479/2010 

Article 2 

Source: Member States declarations in the framework 
of balances and REG (EC) 826/2008, Agriview 

Also the raw tobacco sector was characterized by the low number of producing Member States. The 
analysis  concerned  separately  group  I  and  group  II,  because  different  Member  States  contribute  in 
different ways to the production of each group. 

In  both  groups  two  opposite  developments  were  observed:  on the  one  hand,  the  deterioration  of  the 
position of the Italian tobacco (especially in group I), due to the decrease in both production shares and 
relative prices. On the other hand, the improvement of the Spanish tobacco (especially in group I), thanks 
mainly to the sharp increase of the relative prices. 

Concerning the other Member States that have implemented the measures, Poland improved its position 
in group II, due to the growth of its share of production, while France improved slightly its position in 
the group I as a result of prices increase. 

The different trends of the Member States that have implemented the measures had an impact on the 
result as a whole: the position of the group of Member States having implemented Article 68 worsened 
in group I (as a result of a loss of production share that was not complemented by a sufficient increase 
in terms of prices), and improved in group II (as the effect of the improvement of production shares and 
relative prices). 

On the contrary, the group of the other Member States improved its competitive position in group I 
(especially due to the increase of the production share that compensated the decrease in relative prices), 
and worsened its position in group II mainly due to the sharp decline in prices and to a slight loss of the 
production share. 

99 

ATCZEEFIFRDEHUITLTPLPTSKSIESMS 68Oth MS-20.0-15.0-10.0-5.00.05.010.015.0-0.20.00.20.40.60.8Variation of relative pricesVariation of production shareDABCITGRPTMS art. 68Others MS-15.0-10.0-5.00.05.010.0-8.0-6.0-4.0-2.00.02.04.06.08.0Variation of relative pricesVariation of production shareDABC 
 
Evaluation of Article 68 measures 

Figure 26: Competitive positioning of the country-systems in the tobacco sector 

Tobacco G I 

Tobacco G II 

DG AGRI Member States Communications 

6.4  EVALUATION JUDGEMENT ON EQ3 

The EQ3 deepened EQ2 and invited to make a comparison between the competitiveness of supported 
and not supported sectors / Member States. In particular, the question invited to assess the impact of the 
measures underthe objectives (1)(a)(ii) "improving of the quality" and (1)(b)  "specific disadvantages" 
on two levels: i) competitiveness of the agricultural component of the supply chain; ii) competitiveness 
of the industrial component (processing industry). 

  Competitiveness of the agricultural component of the supply chain 

In this case, the analysis has been carried out by examining the gross margin of farms. All other things 
being equal, the gross margin is a proxy of the level of competitiveness achieved by farms, in terms of: 
i) increased efficiency (cost competitiveness); ii) a better market performance (higher sales prices due 
to improved quality). 

The approach followed two paths of analysis:  

A. the  analysis  of  the  existence  (or  not)  of  a  gap  in  competitiveness  between  sectors  that  received 
Specific Support and those that did not, and the extent to which Specific Support helped to reduce 
this gap; 

B. the analysis of the importance of Specific Support on the gross margin of recipient farms. 
The first analysis was carried out at two levels. 

•  at the aggregated level, the group of Member States having implemented the measures and the group 
of Member States that have not implemented it, by sector. In this case, the analysis aimed to express 
a judgment on the overall policy. 

•  at the level of Member States by sector that have implemented the measures: the analysis aimed to 
examine the differences among Member States and to express a judgment on the impact of Specific 
Support according to Member States choices. 

For each level, the analysis distinguished between: 

•  recipients of Specific Support in the set of Member States that have implemented the measures under 

objectives (1) (a) (ii) quality and (1) (b) specific disadvantages; 

•  non-recipients of Specific Support in the set of Member States that have implemented the measures 

under objectives (1) (a) (ii) quality and (1) (b) specific disadvantages (1); 

1 Concerning the impact of the reduction of SPS entitlements on non-supported sectors, the analysis carried out in EQ6 highlights that many 
of  the  significant  Article  68  measures  in  budgetary  terms  were  fully  financed by  unused  funds.  Therefore,  no  appreciable  change  in non-
supported farms should have occurred. However, if there was any effect, it would not have been in terms of product competitiveness but on 
the income of farmers concerned by the SPS entitlements reduction.  

100 

ESFRITPLMS 68Oth MS-15.0-10.0-5.00.05.010.015.020.025.030.035.0-10.0-8.0-6.0-4.0-2.00.02.04.06.0Variation of relative pricesVariation of production shareDABCESFRITPLMS 68Oth MS-30.0-20.0-10.00.010.020.030.040.0-2.0-1.5-1.0-0.50.00.51.01.52.02.5Variation of relative pricesVariation of production shareDABC 
 
                                                      
Evaluation of Article 68 measures 

•  farms of the set of Member States that have not implemented the measures under objectives (1) (a) 
(ii)  quality  and  (1)  (b)  specific  disadvantages  (thus  naturally  farms  not  benefiting  from  Specific 
Support for these measures). 

Moreover, in the case of recipients of Specific Support, the gross margin has been computed in the real 
situation (with Specific Support) and in a simulated situation (without Specific Support). 

To allow a comparison between recipients and non-recipients of the measures, gross margins (calculated 
on the basis of individual FADN data) were placed in the context of two items: 

  Livestock Unit in the case of livestock sectors (cattle, dairy, sheep and goat), 
  UAA in the case of crop sectors (durum wheat, olive oil, cotton, sugar beet, tobacco). 

A. Existence (or not) of a gap in competitiveness between sectors that received Specific Support 
and those that did not, and the extent to which Specific Support helped to reduce this gap. 

  The results at aggregated level (concerning all Member States having implemented the measures), 
underlining the impact of the policy as a whole, showed the differences between the competitiveness 
of the group of recipient farms and: 

- 

- 

- 

the group of non-recipient farms of the same group of Member States that have implemented 
the measures. In some sectors, recipient farms were already (slightly) more competitive than the 
non-recipient  ones  before  Specific  Support  implementation  (cattle,  dairy,  sugar  beet). 
Therefore,  Article  68  increased  a  gap  already  positive  and  may  have  created  a  distortion  of 
competition within the same Member State between recipients and non-recipients.  

In other sectors, there was a negative gap of competitiveness that Specific Support allowed to 
close (sheep and goat, tobacco, durum wheat, cotton) or reduce (olive oil).  

the group of farms in the group of Member States that have not implemented the measures. In 
this case, in all sectors (with the sole exception of cattle and dairy), the group of recipient farms 
was already more competitive. Therefore, with that exception, Specific Support increased a gap 
already positive and may have created a distortion of competition. On the contrary, in the cattle 
and dairy sectors, Article 68 support allowed to reduce, but not to close the existing negative 
gap. 

  The  results  at  the  level  of  single  Member  States  having  implemented  the  measures  showed  a 
diversified scenario, with, in some cases significant differences between Member States compared 
to the results at aggregate level. Indeed, within each sector, results showed Member States in which 
recipient  farms  were  more  competitive  than  non-recipient  farms  before  receiving  the  Specific 
Support (1) and others in which there was a negative gap that Specific Support allowed (2) or not to 
reduce/close. 

Therefore, also within each Member State, there are situations where Specific Support:  

-  may have generated a distortion of competition among recipients and non-recipients,  
- 

others in which Specific Support was necessary, but not sufficient, to close the negative gap 
among recipients and non-recipients, and,  
finally, others where Article 68 worked well, managing to cover the existing negative gap and 
(in some cases) going even further (generating a limited distortion of competition). 

- 

B. Importance of Specific Support on the gross margin of recipient farms (i.e. the extent to which 

Specific Support contributes to the gross margin formation) 

  The results at aggregated level confirm the importance of Specific Support in the tobacco sector (over 
27% of gross margin), and cotton (12.5%). A less important role was observed in the case of durum 

1 Belgium, Poland and Scotland in the cattle sector; Italy, Latvia, Poland, Slovakia and Slovenia in the dairy sector. Portugal in sheep and goat. 
Greece in durum wheat and olive oil. Italy in tobacco. 
2 France, Spain and Slovenia in the cattle sector. Hungary and Bulgaria in the dairy sector. Bulgaria, Italy, Ireland and Finland in sheep and 
goat. Spain and Poland in tobacco. 

101 

 
                                                      
Evaluation of Article 68 measures 

wheat, sheep and goat, cattle, sugar beet and olive oil. The dairy sector was the one where Article 68 
had the lowest importance on gross margin formation (3.3%). 

  At the single Member State level, the evidence showed a more complex situation: in some Member 
States,  the  incidence  of  Specific  Support  on  gross  margin  was  sharply  higher  relative  to  the 
aggregated average (Greece and Finland in cattle, Hungary, Bulgaria and Slovenia in dairy; Bulgaria 
and Finland in the sheep and goat, tobacco in Spain), in other Member States the incidence was lower 
(Belgium, Poland and Denmark in cattle, Austria, Poland and Italy in the dairy, the Netherlands, 
Portugal and Italy in sheep and goat). 

  Competitiveness of the processing industry 

The  competitiveness  of  the  processing  industry  was  associated  with the competitiveness  of  country-
systems (i.e. the whole processing industry of a sector of each Member State). In this case, the growth 
or decline in competitiveness was measured by the difference (Δi) between the average production share 
in value (VPS) of each country-system in the period of implementation of Specific Support (2010-2014) 
and the average VPS of the period immediately preceding its implementation (2005-2009)1. The analysis 
was limited to the processing sectors for which the supply of raw material within a limited distance 
range around the factory is a key factor of competitiveness (2). 

Bearing in mind the limits and / or possible statistical errors, the results were rather mixed. In fact, as a 
whole, the group of country-systems that have implemented the measures showed a VPS increase in the 
cow/young bull meat industry, in the tobacco and in the cotton sectors and a loss in VPS in the heifer 
meat, sheep meat, dairy and olive oil sectors. 

However,  at  each  country-system  level  the  VPS  variations  were  quite  limited.  The  only  noteworthy 
changes concerned the significant increase of Spain in the beef industry (but probably influenced by 
statistical errors) while France and Italy lost production shares; in the sheep meat industry, Italy and 
Spain showed a decrease in their VPS. On the contrary, the VPS increase in the raw tobacco industry 
was mainly the result of a significant loss in Italy and a strong gain in Spain. 

Therefore, in general, there are no strong correlations between the changes (positive or negative) 
in VPS and the implementation of Article 68. However it should be noted that in the country-
systems that have lost VPS, the implementation of Article 68 proved not to be sufficient to avoid 
this drop. 

An in-depth analysis on the competitiveness of the processing industries was finally carried out through 
the  analysis  of  the  competitive  positioning  of  the  various  country-systems:  each  of  them  was 
"positioned" on the basis of two parameters: i) the changes of production shares in volume (QPS); ii) 
the change in price differences compared to the EU weighted average prices (the two components of the 
VPS), both calculated on the average of the period before and during the  implementation of Article 68. 

In general, the analysis showed that the changes in the competitive positioning: 

  were mainly caused by changes in relative prices, while changes in QPS played a more limited role. 
 
for most Member States that have implemented measures, changes in competitive position were 
limited. 

In this general framework, two cases were identified: 

a-  the  country-systems  of  some  Member  States  improved  their  global  position  thanks  to  the 
simultaneous growth of both parameters (QPS and relative prices): i.e.  UK and  Ireland country-
systems in beef and veal sector; Germany in the dairy sector; tobacco in Spain together with Poland 
in varietal group II (light air cured) and France in varietal group I (flue cured). However, in some 

1 Production shares in value (VPS) were computed by dividing the value of the production (VP of each Member State) by the value of the EU 
total production: VPSi = VPi/ ∑(VPi) *100       i= Member State 1….Member State 27. VPi were calculated as the product of the production 
by average prices: VPi = Qi * p. Thus, Δi=VPSi (2010-2014) – VPSi (2005-2009). 
2 Beef and sheep meat, olive oil, tobacco, cotton. Moreover, dairy industry was also analysed, even if part of the raw material supplies can 
originate from other areas not necessarily close to the factory. Indeed, another part of supplies for PDO/PGI cheese production is linked (more 
or less) to the production area. 

102 

                                                      
Evaluation of Article 68 measures 

cases, the overall improvements of both parameters were linked to events other than the Article 68 
implementation (for example, the end of the embargo of UK meat). 
Therefore,  the  implementation  of  Article  68  measures  did  not  artificially  and  significantly 
changed the competitive positioning, existing in the previous period, of the different country-
systems. 

b-  vice versa, other country-systems worsened their position due to the decrease of both parameters. 
This is the case of Spain in the cow and heifer beef meat sector (1); Spain, Italy, but also France in 
sheep meat; Spain, France and Portugal in the dairy sector; Greece in olive oil; Italy in the tobacco 
first processing industry. Obviously, the implementation Article 68 did not artificially changed 
the competitive positioning of the country-systems, existing in the previous period. In this case, 
at most, Article 68 contributed to slowing down competitiveness losses due to other factors. 

1 But for the latter, there could be statistical errors. 

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7  THEME  4  –  ENVIRONMENTAL  AND  OTHER 

IMPACTS 

Theme 4 addresses the impact of Article 68 on the environment and all intended and unintended impacts 
not studied so far, especially impacts on animal welfare and rural development. Theme 4 includes one 
question:  To  what  extent  have  the  measures  under  Article  68  contributed  to  the  achievement  of 
environmental and other objectives? This evaluation question covers four subjects:  

 

 
 

 

the effectiveness and impact of the measures set with the objective of supporting types of farming 
which are important for the protection/enhancement of the environment (Article 68 (1)(a)(i)) and 
agricultural activities entailing additional agri-environmental benefits (Article 68 (1)(a)(v)); 
the unintended impact on the environment of the measures set under other Article 68 objectives; 
the effectiveness and impact of measures set under objective (1)(a)(iv) concerning animal welfare, 
and the unintended impact on animal welfare of the measures set under other objectives;  
the impact of Article 68 on territorial development. 

7.1  COMPREHENSION OF THE QUESTION 

  Effects on the environment 

  Measures set up under objectives (1)(a)(i) and (1)(a)(v) 

The core issue of this sub-question is to study the results of these measures on the agricultural practices 
and  farming  systems  and  their  impacts  on  the  environment  (water,  air,  biodiversity,  soil,  landscape, 
climate). The analysis of these results and impacts takes into consideration the potential interactions of 
the  measures  with  other  schemes  and  instruments,  especially  with  the  agri-environment  payments 
under  Rural  Development  Programmes1  and  the  Good  Agricultural  and  Environmental 
Conditions (GAEC) under the first CAP pillar. Special assessment must be made of whether or not the 
measures set up under Article 68 go beyond the GAEC as defined in the regulation.  

This  sub-question  also  seeks  to  analyse  the  differences  in  terms  of  design  and  results  between  the 
measures set up under both objectives (Article 68 (1)(a)(i) types of farming important for the protection 
or  enhancement  of  the  environment  and  (1)(a)(v)  activities  entailing  additional  agri-environment 
benefits),  given  that  the  2013  ECA  report  concluded  that  there  was  no  clear  distinction  between 
measures.  

  Measures set up under the other Article 68 objectives  

Measures set up under other objectives than (1)(a)(i) and (1)(a)(v), may have had side-effects on the 
environment. Given their rationale and their share of budget expenditures, three types of measures are 
particularly  concerned:  (1)(a)(ii)  improving  the  quality  of  agricultural  products,  (1)(b)  addressing 
specific disadvantages affecting farmers, (1)(c) avoiding land abandonment.  

The analysis is focused on the support for the bovine (meat and milk) and sheep and goat sectors, because 
these two sectors represent 60% of the measures implemented under objectives (1)(a)(ii), (b) and (c), 
and because the bovine sector has controversial effects on the environment. The expected side-effects 
on the environment from the support for these two sectors depend greatly on the combination of the 
following elements:  

-  Degree of coupling of the payment: decoupled payments should not affect either production level 
or  practices,  and  they  should  have  a  neutral  impact  on  the  environment.  Moreover,  farmers  that 
receive decoupled payment have to comply with the GAEC, which are supposed to have positive 

1 Issues of coherence between Article 68 measures and AEMs are treated in EQ1. 

104 

                                                      
Evaluation of Article 68 measures 

impact. However, in both studied sectors, the majority of the measures was coupled to the production, 
with payment either per litres/kg/tons (strong coupling) or per head or ha (lower coupling). Payments 
based on production quantity may favour intensification, especially when they are combined with 
technical progress and when they are not submitted to specific production conditions (e.g. a national 
production threshold, a stocking density, etc.). Per head payment may also induce intensification but 
to  a  lesser  extent,  whereas  per  ha  of  grassland  payment  on  the  contrary  may  favour  extensive 
production systems. 

-  The  farming  systems  they  directly  support:  some  coupled  support  focus  on  specific  types  of 
farming  systems  (labelled/organic  farming,  fattening  activity,  etc.),  which  generate  well  known 
effects on the environment. 
the geographical targeting (LFA etc.).  

- 

  Effects on animal welfare 

From 2010 to 2014, only the Netherlands implemented measures with the objective of enhancing animal 
welfare  standards  ((1)(a)(iv))1.  The  Dutch  National  Study  provided  a  comprehensive  grasp  of  the 
regulatory context of animal welfare in the Netherlands and highlighted the additional effects of 
Article 68. The analysis also takes into consideration other measures implemented under Article 68 
that may also have an impact on animal welfare (positively or not) in the dairy and beef cattle as well as 
sheep and goats sectors.  

  Effects on territorial development 

The evaluation question seeks to assess the territorial impact triggered locally by the implementation of 
Article 68 measures.  

Specific Support directly affects farm viability under the different existing objectives (environmental, 
quality and economic sustainability), except for the support granted under the objective 68(1)(a)(v) that 
shall compensate solely for extra-costs of the agri-environment activity supported and therefore does 
not directly affect the economic viability of beneficiaries. In consequence, if the results of the measures 
are  significant  at  territorial  level,  then  Specific  Support  might  have  an  effect  on  the  economic 
dynamism of the agricultural sector (employment, value generated, etc.).  

Moreover,  some  Article  68  measures  were  implemented  so  as  to  target  specific  areas  with 
environmental/economic issues. This is particularly the case of the measures under Article 68(1)(b) 
supporting  the  agricultural  sectors  situated  in  sensitive  areas  to  help  them  overcome  the 
disadvantages they are facing. The Article 68(1)(b) measures are thus likely to have an impact on the 
local  economy  of  these  territories.  Most  often,  the  areas  targeted  consist  of  the  LFA,  the  nitrate 
vulnerable zones (NVZ) and mountainous areas and, less commonly, specific regions (Scotland in the 
UK, southeast Poland, regions A, B, AB and C in Finland and the south of Wallonia in Belgium). 

In  Article  68(1)(c),  territorial  objectives  are  explicitly  targeted,  since  the  measures  aimed  at 
preventing land abandonment. For this purpose, the increase of the value entitlements under the SPS, in 
areas subject to restructuring and/or development programmes, probably encouraged the maintenance 
of  the  agricultural  and  processing  sectors.  However,  Hungary  is  the  only  Member  State  having 
implemented it in compliance with the regulation2, for producers of tobacco, fruit and vegetables, and 
ruminants participating in restructuring and development programmes.  

1  Estonia  also  used  objective  (a)(i)(iv)  in  2014  only  (for  pigsties).  Ireland  also  planned  a  measure  for  the  beef  sector  in  2012,  but  it  was 
abandoned before its implementation. 
2 As opposed to Greece and Slovenia, which notified the implementation of Specific Support under these measures but do not appear in the 
CATS database. 

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Evaluation of Article 68 measures 

7.2  METHODOLOGY AND LIMITATIONS 

  Effects on the environment 

The methodology entails three main steps, as shown in the figure below: (1) the analysis of the design 
of the measures, (2) the analysis of the effect of the measure on changes in agricultural practices or 
sectors and (3) the analysis of the effect of these changes (if any) on the environment. The last two steps 
take into account potential external factors (especially interaction with other schemes) and deadweight 
effects.  

Figure 27: Steps in the analysis of Article 68 environmental measure impacts 

(1) Analysis of the 
relevance of the measure 

(2) Analysis of the 
respective weight of 
drivers 

(3) Analysis of 
environmental effects 

DESIGN 

IMPLEMEN-
TATION 

Feedback 

CHANGES IN 
THE SECTORS 
AND PRACTICES 

External factors 

External factors 

EFFECTS ON THE 
ENVIRONMENT 

MONITORING 

Are  the  measures 
well designed? 

Did  the  measures 
affect the sector? 

these  changes 
the 

Did 
affect 
environment? 

 

(1) Assess the design of the measures (objectives and features)  

Source: developed by Agrosynergie 

The first step of the analysis makes use of the main conclusions of EQ1 on the relevance of the objectives 
and features of the measures with environmental objectives. Beforehand, the main conditions needed to 
ensure the optimal effect of the measure are described, based on a literature review.   

 

 (2) Assess the impact of environmental measures on the practice and/or sector  

The second step evaluates whether the measures led to the expected changes in terms of agricultural 
practices and at the sector level. It therefore assesses the outputs and outcomes of the measures. The 
outputs  are  evaluated  based  on  available  implementing  data,  collected  at  EC  and  national  levels: 
expenditures, eligible areas, number of units supported (usually hectares) or number of beneficiaries 
when the latter is not available. Given the lack of monitoring data, the outcomes of the measures are 
studied based on National or Community databases (when relevant) and experts’ opinions. 

 

(3) Assess the impact of the measure on the environment  

The third step looks at the impact on the environment. Given the lack of monitoring data, the scientific 
and grey literature was used to estimate the effects of the change in practices (e.g. the change in the 
legume  crops  surface)  on  the  pressures  (e.g.  reduction  in  pesticide  consumption)  and  thus  on  the 
environment  (e.g.  protection  of  biodiversity).  Results  of  the  three  steps  were  used  to  draw  up  the 
conclusions. The major difficulty is that the measures are very numerous and were usually applied on a 
very  limited  geographical  scale,  on  which  specific  literature  or  data  are  usually  not  available.  The 
evaluation had to rely on more general scientific literature, whose data cannot always be used in the 
studied contexts.  

For measures that do not have environmental objectives, the results of EQ2 were used to check whether 
the Article 68 measures affected the sector or not (viability and sustainability) and to conclude on their 
actual effects on the environment. The major difficulty of this analysis is thus to judge the role of Article 
68 compared to that of other factors.   

106 

 
 
 
 
Evaluation of Article 68 measures 

  Effects on animal welfare 

-  Effects of the measures set up under sub-Article 68(1)(a)(iv):  the analysis focusses especially on 
how  the  measures  go  beyond  regulatory  requirements  and  their  results  (based  on  the  monitoring 
existing at the Netherlands level and the opinion of the stakeholders). For this purpose, the Dutch 
national framework on animal welfare was studied.  

-  Effects of the other measures: opinions of the stakeholders and analysis of the livestock sectors in 

EQ2 and 3 were used. 

  Effects on territorial development 

The  analysis  considered  the  results  of  the  EQ2  that  determined  whether  the  Article  68  measures 
contributed to the economic viability of the agricultural sector and the sustainability of the-processing 
industries. For the sectors where such results were observed and for the regions where the payments are 
“concentrated”, the importance of the sector for the local economy was studied in terms of employment 
(AWU by farm) and agricultural production value. This was based on EU regional statistical data that 
were extracted from Eurostat.  

Finally, the RDP measures with objectives similar to the ones in Article 68 (e.g. farm modernization, 
agro-environment  or  support  for  improvements  in  sector  competitiveness)  were  also  considered  to 
analyse whether the effects on rural development can be attributed to Article 68.  

Selection of the relevant regions in Member States studied to conduct the analysis 

Two NUTS 2 regions were selected in each MS studied, regarding (a) the global budget delivered for 
all  Article  68  measures  implemented  over  the  2010-2012  period,  (b)  the  cumulated  number  of 
beneficiaries  of  Article  68  measures  for  the  3  years  observed,  (c)  the  average  amount  granted  per 
beneficiary at NUTS 2 level during the this period and (d) the implementation of geographically targeted 
Article 68 measures in the MS. This information was available from the CATS EC data and the inventory 
of the measures. The selected regions are presented in Annex 5.3.2. 

To the fullest extent possible, we selected two different region profiles in each Member State: 

-  Regions  with  the  highest  share  of  beneficiaries,  but  relatively  middle/low  average  amount 

granted per beneficiary, 

-  Regions with fewer beneficiaries, but significant average amount of Specific Support granted 
to each of them. Regarding the number of beneficiaries here, the selection choice was done with 
caution given that it must reach a critical threshold so that Article 68 can potentially generate 
territorial effects. Regions with an extremely low number of beneficiaries were thus excluded.    

As regards Hungary, the national study observed in particular the effects of the Article 68(1)(c) measure 
to prevent land abandonment. The analysis was conducted on the NUTS HU32 of the north-eastern part 
of Hungary that was specifically targeted by the Article 68 tobacco measure from 2010 to 2015 under 
the objective 68(1)(c) to prevent land abandonment. This region also presents the highest number of 
Article 68 beneficiaries and the highest regional budget granted in Hungary.  

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Evaluation of Article 68 measures 

7.3  ANSWER ON THE ENVIRONMENTAL IMPACT OF THE 
MEASURES  IMPLEMENTED  UNDER  OBJECTIVES 
(1)(A)(I) – (1)(A)(V) 

7.3.1  DISTINCTION BETWEEN MEASURES IMPLEMENTED UNDER 

THE ENVIRONMENTAL OBJECTIVES OF ARTICLE 68 

  A great diversity of measures  

Thirteen  Member  States  chose  to  use  the  Specific  Support  under  objective  (1)(a)(i)  and  (v).  They 
implemented 30 different measures. Among them, 13 fall under objective (1)(a)(v), and 17 fall under 
objective (1)(a)(i).  

Among the ten Member States in which National Case Studies were conducted, 8 have implemented in 
total 23 environmental measures under one or both objectives:  Denmark, Finland, France, Italy, the 
Netherlands,  Poland,  Portugal,  and  Spain.  Consequently,  their  analysis  provides  a  fairly  good 
depiction of the situation in the whole EU.  

The measures implemented by the 13 Member States are quite diverse and included (cf.:Annex 5.1.1.):  

  Crop rotation and diversification with introduction of legumes and/or oilseeds. 
  Support for agro-industrial sectors associated by the Member States with environmental benefits 
such as starch potatoes (used as a crop to diversify cereal crop rotation), aroma hops, energy and 
fibre crops.  

  Support  for  developing  or  maintaining  practices/farming  systems  that  are  well  known  for  their 

environmental benefits and are usually former AEM (Pillar II). This mainly concerns:  
  Extensive and organic farming systems; 
  Extensive livestock farming system and maintenance of grasslands;  
  Other agri-environmental practices such as manure management and nuts pruning. 

  Maintenance of local genetic breeds/varieties. 
  Financing of investments with environmental objectives: this was done in the Netherlands (e.g. 
equipment  for  precision  agriculture,  sustainable  storage  facilities,  and  manure  processing 
installations) and in Denmark (planting of organic fruit trees and berry bushes). 

The  support  was  mainly  granted  per  hectare.  The  only  exceptions  were  Portuguese  measures  for 
conservation of autochthonous livestock (per head), and Dutch investment support (cost repayment for 
a share of the expenses incurred). 

108 

Evaluation of Article 68 measures 

Figure 28: Distribution of the expenditure in (average/y) in 

studied Member States 

Other crops 
(starch, energy 
crops, fiber 
plants)
1,22%

Extensive and 
organic 
farming
21,56%

Maintenance of 
extensive 
grasslands
1,96%

Sustainable 
investments
1,72%

Maintenance of 
local breeds
0,43%

Other Agri 
environmental 
practices
1,67%

Legumes 
and/or oilseeds 
crops (for 
rotation or 
diversification)
71,43%

Source: National Studies and the respective Member States paying 

agencies 

for 

In  terms  of  amount,  crop 
diversification  and  rotation 
measures  accounted  for  over 
72% of the overall budgetary 
the 
expenditure 
environmental  measures,  and 
support  for  extensive  and 
organic  farming  21.6%  (of 
for  organic 
which  77% 
farming  support  in  France). 
The 
expenditure 
provides  an  overview  of  the 
relative share of each type of 
measure.  However,  judging 
the effects of the measure on 
the environment also requires 
looking at the outreach of the 
measures  in  terms  of  surface 
area  or  number  of  livestock 
supported. 

budget 

Table 37: Total output by categories of Article 68 environmental measures in MS studied (2010-2013) (ha) 

2011 

Categories of support 
Crop rotation / diversification* 
Extensive and organic farming** 
Extensive maintenance of grassland*** 
Agro-processing sectors**** 
*   Unavailable data for French measures  
**   Unavailable data for conversion and maintenance of organic production in France 
***   Unavailable data for one measure in the Netherlands 
**** Unavailable data for support to fibre crops in the Netherlands 

2 063 555  1 982 793 
240 466 
167 838 
12 070 

2010 
1 741 310 
124 673 
161 035 
1 306 

175 645 
182 048 
1 354 

2012 

2013 
2 127 632 
274 293 
202 740 
12 348 

Source: Paying agencies of each Member State 

Annex 5.1.2 presents more outreach data for each measure (share of supported areas, number and share 
of farms supported); however, not all Member States provided this information, even though it is basic 
data to properly monitor environmental measures.  

In terms of number of beneficiaries, the main types of measures supported are crop diversification and 
rotation,  extensive  and  organic  farming  and,  to  a  lesser  extent,  maintenance  of  extensive  grasslands 
(81%, 15% and 3% of the total beneficiaries respectively). 

  Difference between the Article 68 environmental objectives (1)(a)(i) and (1)(a)(v) 

The  ECA  report  (2013)  highlighted  the  lack  of  clear  distinction  between  measures  set  up  under 
objectives (1)(a)(i) types of farming important for the protection or enhancement of the environment and 
(1)(a)(v)  activities  entailing  additional  agri-environment  benefits.  Indeed,  the  wording  of  the  EC 
regulation1 remains vague on the measures that can be established by the Member States under 
these objectives. However, these measures differ significantly with regard to their administrative 
constraints: 

  On the one hand, the ‘agri-environmental’ measures (set up under objective (1)(a)(v)) are subject to 
requirements similar to the ones applicable to equivalent agri-environmental measures included in 
the rural development programmes, and they are considered to be decoupled payments. 

  On the other hand, the ‘environmental measures’ (set up under objective (1)(a)(i)) give the Member 
States more flexibility, because they are not subject to EC approval but are subject to a more limited 

1 Council Regulation (EC) No73/2009 and Commission Regulation (EC) No 1120/2009 

109 

 
                                                      
Evaluation of Article 68 measures 

budgetary ceiling as they are considered to be a coupled payment. 

The analysis of the environmental measures set up by the Member States confirms that the same 
type  of  measures  (in  terms  of  objectives  and  rationale)  were  implemented  under  both 
environmental  objectives.  For  instance,  organic  farming  was  supported  under  objective  (1)(a)(i)  in 
Denmark, (1)(a)(v) in France and even under (1)(a)(ii) in Romania; crop diversification and rotations 
was  supported  under  objective  (1)(a)(i)  in  Denmark  and  France  and  (1)(a)(v)  in  Italy  and  Spain; 
extensive  grasslands  is  supported  under  objective  (1)(a)(i)  in  the  Netherlands  and  under  (1)(a)(v)  in 
Portugal and  Denmark.  However,  support  for  agro-industrial  sectors  were  all set  up  under  objective 
(1)(a)(i), because of their coupled nature. 

The interviews conducted during the National Studies showed that  the Member States set up their 
environmental  measures  under  one  or  the  other  objectives,  depending  on  the  administrative 
burden and budgetary constraints of each objective. Striking examples of the flexibility between 
these articles occurred in Portugal and Denmark. In Portugal, due to financial constraint, the measure 
supporting  autochthonous  breeds  (except  for  the  breed  Bovina  de  Lide)  was  moved  from  Article 
68(1)(a)(i)  to  68(1)(a)(v)  in  2012.  It  reverted  back  again  to  Article  68  in  2013-2014.  In  Denmark, 
according the ECA report, a crop rotation measure was initially notified under Article (1)(a)(v), but the 
EC considered the measure as incompatible with AEM rules; the measure was then reformulated by 
Denmark and presented under (1)(a)(i) objective. 

Some Member States, such as France, Denmark and Portugal, used agro-environmental measures under 
Article 68 to resume, continue or supplement their former RDP’s AEM. In this case the benefit could 
have been manifold for the Member States. First, the design of the measure already fit the requirements 
of Article (1)(a)(v) and was likely to be accepted by the EC. Secondly, the Member States do not have 
to co-finance the measures, since Article 68 is fully financed from the EU budget, thereby providing 
greater budgetary leeway for the RDP. Finally, the measures were usually better designed in this case 
and thus had more potential impact on the environment. 

The fact that the measures set up under Article 68 (1)(a)(i) were not approved by the EC led in 
certain cases to a ‘misuse’ of the support and less attention and time paid to the design of the 
measure. For instance, in the Netherlands, the investment support for precision farming, sustainable 
storage and manure management did not strictly correspond to a ‘specific type of farming that protects 
the environment’. This remark can also be applied to the Danish support for perennial energy crops, 
which had no particular environmental virtues when it comes to land management. The case of Cyprus 
should be also underlined: in 2014, Cyprus supported the banana sector under objective (1)(a)(i), even 
though its contribution to the protection of environment was not justified. 

This lack of clear distinction between the two objectives raises a coherence issue, given that the same 
type  of  measures  could  be  implemented  under  both  objectives,  but  with  different  levels  of 
restrictions. Moreover, the flexibility of objective (1)(a)(i) sometimes led to support practices that 
do  not  strictly  correspond  to  the  definition  of  a  ‘specific  type  of  farming  that  protects  the 
environment’. Finally, the measures set up under objective (1)(a)(v) were usually better defined 
because they had to be approved by the EC and were thus expected to have more impact on the 
environment.  

  Relation with Good Agricultural and Environmental Conditions (GAEC) 

As  mentioned  in  paragraph  2.1.4  (cross-compliance),  measures  set  up  under  the  Article  68 
environmental  objectives  had  to  support  practices  that  went  beyond  the  regulatory  requirements, 
especially beyond the GAEC. The measures raising a risk of non-respect of this requirement are mainly 
those relating to crop and pasture management.  Their analysis based on the National Studies and 
notifications to the EC did not reveal any case where this rule was not respected.  

Moreover,  for  some  measures,  the  requirements  were  clearly  additional  specifications  to  the 
GAEC. For instance, for crop rotation, in Spain the GAEC do not include surface restrictions for crop 
rotation,  and  since  2007  fallow  is  not  compulsory.  The  Article  68  Spanish  crop  rotation  measure 
imposed that at least 20% of the surface be leguminous, protein and oilseed crops and that the farmers 
comply to a 10 to 25% fallow rate.  In Italy, the crop rotation measure initially required a three-year 

110 

Evaluation of Article 68 measures 

rotation with one year of protein or oleaginous crops, which was a similar to the GAEC. At the EC’s 
request,  the  Italian  Ministry  reduced  the  rotation  from  three  to  two  years:  the  farmers  thus  had  to 
introduce protein or oleaginous crops every two years. In Finland, the GAEC regarding crop rotation 
required that at least two different crops or forms of managing or using agricultural areas be applied on 
a uniform area of at least 0.05 hectares. The support for protein and oilseed crop rotation required that 
at least 10% of the total cultivated area and the type of protein and oilseed crops eligible be specified. 
The Danish agri-environmental measures for extensive farming defined a manure limitation of 140 kg 
nitrogen/ha, which is stricter than the limit of 170 kg nitrogen/ha established in the Nitrate Directive. 
The Article 68 measure also requires a fertilizer plan of 5 years instead of 1 year in the Directive. No 
GAEC  are  defined  on  these  points.  Concerning  the  extensive  pasturing  measure,  compared  to  the 
existing GAEC, the Article 68 measure forbids the placing of additional fodder on an area for grazing 
animals and the use of plant protection products or fertiliser during the commitment period other than 
the manure left by grazing livestock. 

7.3.2  EFFECTS  OF  THE  MAIN  TYPE  OF  MEASURES  ON  THE 

ENVIRONMENT 

Given the large number of measures, the evaluation focuses hereinafter1 on the three major measures 
(crop rotation and diversification, extensive/organic farming, extensive pasturing) given that they have 
more chance of reaching a critical mass and generate effects at a greater scale than the plot or the farm 
where they are applied. The evaluation assesses the effects at the level of Member States where national 
case studies were conducted, during which grey literature and sometime data were collected. 

7.3.2.1  Literature  review  on  the  environmental  impacts  of  the  main 

supported practices / farming systems  

1 The analysis of the measures for ‘extensive grasslands’ is in Annex 5.1.6.; only the main conclusions are presented in the report. 

111 

                                                      
Evaluation of Article 68 measures 

Table 38: Main expected environmental benefits of the most supported practices under objectives (1)(a)(i) and (1)(a)(v) 

Type of 
practice 

Water 
resource 

Rotation and 
diversification 
(with 
legumes) 

Plot /farm 
level 
Mycorrhizal 
association in 
the soil: water 
retention. 

Water quality 

Biodiversity and Habitats 

Landscape 

Soil 

Air and climate 

Sources 

Plot /farm level 
Efficient use of  soil phosphorus 
and atmospheric nitrogen 
fixation: 
reduced use of fertilisers and 
reduced risk of nutrient 
leaching. 
At territorial level 
Lesser risk of water pollution if 
a minimum number of farms are 
enrolled within a given 
watershed (threshold effect). 

Plot /farm level 
Greater availability of nectar 
and pollen: stimulation of bee 
population. 
Depending on the sowing 
season and combined with 
forage and cover crop: 
increase in population of wild 
flora, small mammals, insects 
and birds. 
At territorial level 
Potential positive effects on 
biodiversity if ecological 
corridors are established. 

At territorial level 
maintenance of 
landscape mosaic 

Plot /farm level 
 Efficient use of 
soil phosphorus 
and  fixation of 
atmospheric 
nitrogen: 
improved soil 
quality and 
structure, reduced 
risk of erosion and 
soil structure. 

At territorial level 

Atmospheric 
nitrogen fixation, 
short-term storage 
of carbon, then 
reduced use of 
synthetics 
fertilisers: limit 
GHG emission, 
ozone formation 
and acidification. 

Kirkegaard et al. (2008), Li et al. 
(2007), Chalk (1998), Köpke and 
Nemecek (2010), Dunbabin et al. 
(2003), Westphal et al. (2003), 
Kopij (2008), Eisenhauer et al. 
(2009), Sabais et al. (2011), 
Nemecek and Baumgartner (2006), 
Potts (2003), Evans et al. 2004, 
European Parliament (2013), 
Lopez-Bellido et al. (2010), Lemke 
et al. (2007), Baumgartner et al. 
(2008) 

Extensive and 
organic 
farming 

Plot /farm 
level 
Cover crops 
and legumes 
lead to 
mycorrhizal 
associations: 
water retention. 

Plot /farm level 
Restricted use of plant 
protection products, fertilizers 
and low livestock density: 
reduced risk of nutrient leaching 
and water pollution. 
At territorial level  
Reduced risk of  water pollution 
if a minimum number of farms 
are enrolled in a given 
watershed (threshold effect). 

Plot /farm level 
Low use of plant protection 
products, crop diversification: 
superior specific richness. 
At territorial level 
Stimulate biodiversity if 
ecological corridors are 
established. 

At territorial level 
Crop diversification 
and rotation, 
restoration of 
hedges and other 
landscape 
components: 
restoration of 
landscape 
heterogeneity. 

Plot /farm level 
Livestock matter 
recycling and 
using forage 
legumes in crop 
rotation: 
preservation of the 
physical and 
biological soil 
fertility. 

At territorial level 
Restricted use of 
mineral fertilizers 
and of concentrated 
feedstuff, no use of 
pesticides, manure 
management: 
reduction in CO2 
emission and air 
pollution. 

Extensive 
pasturing 

Above farm 
level 
If pastures 
located in 
wetland: 
regulate water 
resources and 
mitigate flood 
risks. 

Plot /farm level 
Permanent covers: reduced 
nitrogen leaching. 
At territorial level Reduced 
risk of water pollution if a 
minimum number of farms are 
enrolled in a given watershed 
(threshold effect). 

Plot /farm level 
Low use of plant protection 
products, regulation of 
opportunistic plant species, 
favourable condition for seed 
dispersion, reduced risk of 
fire: favour floristic diversity. 
At territorial level  
Stimulate biodiversity if 
ecological corridors are 
established. 

At territorial level 
Reduced risk of fire; 
maintenance of 
open areas and 
semi-natural 
habitats: preserve 
landscape diversity. 

Plot/farm level 
Permanent soil 
covers: reduce 
water runoff and 
soil erosion. 

At territorial level 
reduced GHG 
emission: Important 
role in carbon 
storage:  

Sources: Literature review (c.f. Annex 5.1.3 for details) 

Pimentel et al. (2005), Smith et al. 
(2008), Pfiffner and Luka (2007), 
Gattinger et al. (2012), Stolze et al. 
(2000), Schader et al. (2012), Mahé 
and Portet (2012), Lotter, (2003); 
Caplat (2006), Gabriel et al. (2006); 
Gabriel et al. (2007); Kragten 
(2008), Mondelaers et al. (2009), 
Fleury (2011); Bengtsson et al. 
(2005), SRU (1996), Rogasik et al. 
(1996), Snyder (2009), Stolze et al. 
(2000); de Boer (2003); Nemecek 
et al. (2005) 

Alliance Environnement (2007a), 
Kleijn et al. (2009), Plantureux et 
al. (2005), Dumont et al. (2007), 
Polakova et al. (2011), Peyraud et 
al. (2012) Rossi et al. (2014), Rook 
and Tallowin (2003), Gaujour 
(2012), Centre d’Etudes et de 
Prospective (2014), Peyraud et al. 
(2012), Gac et al. (2010), Arrouays 
et al. (2002), Amezquita et al. 
(2010) 

112 

 
 
Evaluation of Article 68 measures 

The  potential  incidence  of  the  three  main  supported  practices  and farming  systems  are  analysed  in 
scientific and grey literature and summarized in the previous table (a more comprehensive review is 
presented  in  Annex  5.1.3).  Based  on  this  analysis,  it  may  be  concluded  that  the  supported  practices 
/farming  systems  have  the  potential  to  provide  environmental  benefits  under  some  conditions:  the 
benefits  depend  greatly  on  the  way  the  practices  are  applied.  For  instance,  concerning  crop 
diversification, a reduction in fertilisers will be observed if a provision states the quantity of fertilizers 
applied on the plot for crops following legumes; concerning the extensive and organic system, effects 
on biodiversity and water will depend more on the type of restriction limiting the use of insecticides; 
concerning extensive pasturing, a limit on the carrying capacity must be defined for grasslands, etc. 
Therefore,  to  judge  the  actual  effects  of  the  Article  68  measures,  the  technical  specifications  of  the 
measures need to be carefully studied. This is done in the next paragraphs.  

7.3.2.2  Support for crop rotation and diversification 

7.3.2.2.1  Design of the measures 

In all the Member States, the measures set up for crop diversification and rotation included either 
a percentage of cultivation area to be respected or crop rotation, except in: 

-  France: one measure (diversification of the area sown) included this type of requirements but 
was implemented only for one year; the second measure (support for protein crop and fodder 
legumes) included these requirements but they were cancelled in 2012. 

-  Poland, where only the type of eligible crops was defined. 

Italy  and  Spain  are  the  only  Member  States  that  targeted  the  measures  on  specific  areas  based  on 
environmental considerations. Both implemented the measures under objective (1)(a)(v): Italy targeted 
areas within south-central regions: these areas were historically cropped with durum wheat monoculture 
on poor soils, and these lands were abandoned after the 2003 reform. Spain also targeted areas where 
risk of land abandonment and cereal monocrop was considered as important. It consisted in the low-
yield  and  non-irrigated  areas,  representing  11.7%  of  Spanish  UAA.  The  overriding  interest  of  the 
measure was to support more sustainable alternatives to land abandonment or cereal monoculture.  

However, in all the Member States studied, it was not possible to identify criteria regarding the use of 
inputs  (fertilizers  or  pesticides),  even  though  they  are  key  criteria  in  terms  of  environmental 
effectiveness. Moreover, in a recent report (INRA, 2013), the French Institute for Agronomic Research 
identified several obstacles to crop diversification at the farm level, one of which is the need for farmer 
to gain technical expertise when introducing a new crop. On this point, only the Spanish measure was 
associated  with  a  specific  training/advising  programme  to  ensure  that  the  practice  was  led  in  a 
sustainable way: according to managing authorities, the Spanish regional governments organized several 
events (meetings, workshops, focus groups, etc.) to provide farmers with technical information about 
the measure. In addition, all Spanish regional governments included the measure 114 ‘Use of advisory 
services by farmers and foresters’ in their RDPs to train and to advise farmers on crop diversification. 
The absence of a training and advising programme in the other Member States (FR, FI, DK, IT, PL) 
may have impeded the Article 68 environmental outcomes.  

In conclusion, two groups of Member States can be distinguished: 

-  On  the  one  hand,  Member  States  that  implemented  measures  with  the  primary  objective  of 
maintaining  the  sector  and  increasing  domestic  availability  of  protein  crops  (France,  Poland, 
Denmark, and Finland). These measures could have contributed to crop diversification and limitation 
of cereal monoculture; however, the requirements were not defined in such a way that environmental 
benefits would be generated (especially in France and Poland). 

-  On  the  other  hand,  Italy  and  Spain  set  up  measures  with  the  primary  objective  of  increasing 
leguminous/oleaginous crop areas and properly targeted the measures, which is more in line with the 
objectives of Article 68. 

113 

Evaluation of Article 68 measures 

7.3.2.2.2  Effects of the measures on change in the farm practices 

 

 Unconvincing  results  in  France,  Finland  and  Denmark  that  do  not  confirm  the  intended 
positive effect of the measure 

In  France,  two  measures  were  established.  The  support  for  diversification  of  crop  rotation  was 
implemented only in 2010. The aid amount was established at 25€/ha, but due to the high number of 
applicants  it  had  to  be  reduced.  The  fact  that  it  was  applied  during  one  only  year  combined  with 
conditions  relatively  easy  to  comply  with,  lead  to  conclude  that  this  measure  could  not  generate 
significant and lasting effects. It was meant more as a compensation for the reduction of the value of 
direct payment entitlement, than a support with environmental objectives. The second measure (support 
for protein and fodder legumes crop (1)(a)(i)) did not meet the expected results. This measure supported 
protein crops and fodder legumes crops (dehydrated starting from 2012). The French authorities did not 
provide the change in area supported, but a decline in the number of beneficiaries is observed from 2010 
to 2012 (-44.2%). Moreover the protein crops surface fell very significantly in 2010 (-78%) and stayed 
relatively stable then, the legume surface area remained starting from 2012.  The sector representatives 
explained that the payment was well defined in 2010, however, the low  protein yield sent a negative 
signal for the following years. 

the  measure  was 

According  to  the  Natural  Resources  Institute 
Finland  (LUKE)  and  Eurostat  data,  the  area 
supported by the ‘protein and oilseed’ measure 
(Article 68(1)(a)(i))) represented almost all the 
Finnish surface of protein and oilseed crops (1). 
Both the supported and the total surface areas 
recorded  a  decrease  over  the  years  during 
which 
implemented. 
Meanwhile, cereal areas kept progressing at an 
even  greater  rate  than  before  2010  (+4%  in 
2006-2010 and +7.5% in 2011-2014), and the 
measure  did  not  prevent  the  development  of 
cereal monoculture. Contextual events such as 
market  prices,  climatic  conditions  and  the 
(neocotinoides) 
in  2013 
pesticides  ban 
influenced  the  trends  and  explained  the  weak 
results  of  the  measures.  In  this  context,  the 
payment  (about  60€/ha)  had  no  significant 
effect  on  the  production  area,  compared  to 
other  drivers  (especially  the  cereal  market 
price).  

Figure 29: Surfaces of Finnish Protein, Oilseeds 
and Cereals crops, 2006-2014, and Article 68 
supported areas (ha) 

Extreme  weather  events  were  recorded  in  2010  at  the  expense  of 

cereals and to the benefit of alternatives crops. 

)
a
h
(
a
e
r
A

1400000

1200000

1000000

800000

600000

400000

200000

0

Protein (EUROSTATS) and Oilseeds (LUKE)

Cereals (LUKE)

Art 68

Source: LUKE, 2015 – Eurostat, 2015 – MAVI, 2015 

In Denmark, the measure (support for crop rotation 68(1)(a)(i)) was only in force in 2012 and 2013, the 
farmers’ participation was lower than anticipated (only 35 and 38% of the planned budget was spent, 
respectively) and the supported areas represented merely 0.4% of the arable crops in 2013. According 
to the authorities, the reason for low farmer interest was the low level of support (67€/ha). According to 
the farmers’ representatives, the design of the measure may also have been too restrictive regarding the 
crop limitation.  

1 The figure shows the evolution of the surface of protein and oilseeds crops from 2009 to 2014 based both the Finnish Natural Resources 
Institute (LUKE) and Eurostat data. This explains why the surface supported by the measure seems to be more significant than the protein and 
oilseed surface over the same period. 

114 

 
 
 
 
                                                      
 
Evaluation of Article 68 measures 

  Other  more  significant  results  reflecting  a  better  design  of  the  Polish,  Italian  and  Spanish 

measures 

350000

300000

250000

200000

)
a
h
(
a
e
r
A

Figure 30: Surfaces of Polish Protein (as main 
crops), 2003-2013, and Article 68 supported areas 
(ha) 

In  Poland,  the  area  of  protein  crops  benefiting 
from the Specific Support for farmers cultivating 
pulses and herbage legumes (Article (68(1)(a)(i)) 
was about 65 to 75% of the total area of perennial 
and grain protein grown as a main crop (based on 
data of CSO, ARMA, 2015). The area of protein 
crops in Poland was subject to a strong decline 
after 2003. According to the Polish expert, this 
reflects  the  price  changes  and  the  lack  of 
domestic demand for this production. However, 
a  turnaround  is  observed  following  Article  68 
implementation.  It  shows  that  the  Specific 
support (60€/ha to 100€/ha) combined with other 
drivers  (especially  other  AEM  that  the  farmers 
could apply at the same time) contribute to this 
development.  Sector  representatives  reported 
that clear changes in the crop rotation occurred 
(implementation  of  protein  crops),  but  that  a 
implementation  period  would  be 
longer 
necessary 
to  draw  significant 
conclusions.  
However,  as  the  objective  of  this  measure  was  to  reduce  the  protein  imports,  on  this  point  the 
contribution of the Article 68 measure to the Polish domestic protein balance sheet is considered to be 
limited (and it was the primary objective of the measure). 

Sources: National Study based on data of CSO, ARMA, 2015 

Protein crop area (grown as main crop) (ha)

to  be  able 

100000

150000

50000

Art 68

5
0
0
2

0
1
0
2

3
0
0
2

4
0
0
2

6
0
0
2

7
0
0
2

8
0
0
2

9
0
0
2

1
1
0
2

2
1
0
2

3
1
0
2

0

Figure 31: In Italy (2000-2014),  a) Development of durum wheat areas (ha); b) Development of protein 
and oilseeds areas (ha) 

2000000

1500000

1000000

500000

0

300000

250000

200000

150000

100000

50000

0

2000 2002 2004 2006 2008 2010 2012 2014

2000 2002 2004 2006 2008 2010 2012 2014

2000-2004

2004-2009

2009-2014

2000-2004

2004-2009

2009-2014

a)

b)

In Italy, Specific Support (Article 68(1)(a)(v), 100 €/ha) was set up in order to raise farmer interest 
again in soil-improving crops (the rotation plan had to include protein and oilseed crops) and to prevent 
land abandonment. The share of the eligible surface areas covered by the measure was 70%, and that of 
total areas eligible for the measure 80%. As shown in the two graphs, the measure helped to re-stabilize 
the  durum  wheat  surface  area  and  therefore  to  prevent  land  abandonment  on  these  areas.  It  is  also 
observed that, despite the stabilization of durum wheat areas, the surface area of oilseed and protein 
crops  has  remained  stable  since  2004.  This  is  an  indication  of  the  implementation  of  the  rotation 
practices supported by Article 68. The measure therefore did contribute to the maintenance of durum 
wheat  areas  through  the  development  of  crop  rotation;  however,  it  did  not  stimulate  the  increase  of 
protein and oilseed crop surface areas. According to the authorities, the success of this measure helped 
consolide environmental awareness among durum wheat producers. 

115 

 
 
 
Evaluation of Article 68 measures 

The  Spanish  measure  (Article  68(1)(a)(v),  60€/ha  to  80€/ha)  was  considered  successful  by  the 
authorities and farmers’ representatives interviewed. In Aragon, the region with the most beneficiaries, 
95% of the eligible area benefited from Article 68 Specific Support. Moreover, in this region, the ratio 
between leguminous and oilseed crops to cereal crops in the eligible areas increased significantly when 
Article 68 was introduced in 2010 (0.64% in 2008; 16.07% in 2010; 19% in 2014). These results show 
that the area of eligible crops positively responded to support for ‘crop rotation’. Spain implemented 
another measure that supported legumes under Objective (1)(a)(ii) (quality measure for legumes).  It 
was not able to contribute to this result because it targets other areas.  

The Specific Support for crop rotation and diversification contributed to a development in the surface 
area of leguminous and/or oilseed crops in Spain and Poland, as well as to stabilization in Italy.  Other 
drivers also contributed to this result:  there is a close connection between the evolution of protein crop 
surfaces and various CAP policies (SPS, PDR, coupled payment for COP in Spain and France until 
2010,  protein  premium  (1),  etc.),  the  market  (e.g.:  cereal  and  soy  bean  price,  inputs)  and  the 
weather/sanitary conditions. However, in France, Finland and Denmark, the Specific Support was not 
effective.  This  shows  that  the  measures  must  be  sufficiently  well  designed  to  balance  all  the  other 
factors, which may discourage farmers from diversifying their rotation (e.g. competition with cereals, 
input prices, sensitivity to climate and sanitary conditions). The Italian and Spanish authorities have 
clearly  identified  a  need  in  a  particular  area  and  properly  designed  the  measures,  whereas  France, 
Finland and Denmark rather aimed at supporting the sector as a whole. 

7.3.2.2.3  Actual effects on the environment 

As  described  in  Annex  5.1.3.,  under  specific  conditions  concerning  diversity  and  type  of  crops 
introduced in the rotation, duration of the rotation, level and type of input used, (etc.), crop rotation and 
crop diversity are a practice generating benefits from the agronomical and environmental point of view.  

However, no monitoring was done by the Member States to assess the actual effects of these measures 
on  the  environment.  A  quantification  of  the  environmental  impact  is  thus  not  feasible  here.  The 
judgement  can  only  be  based  on  the  features  of  the  measures,  their  output  and  the  expected  effects 
according to the literature:  

  As demonstrated here above, the French, Finnish and Danish measures did not participate in the 
increase of protein and oilseeds crops surface in their respective Member States. Therefore, they did 
not significantly influence the state of the environment. 
In Poland, the supported areas are significant (between 65 and 75%); however, it represented merely 
2% of arable area and did not focus on a given area that limits the mass and continuity effect. The 
effect therefore did not go beyond the plot/farm level, although this should be checked with specific 
monitoring of the outcomes.  

 

  The area supported by the measures is significant in Italy and Spain (70-90% of the eligible areas 
and about 15–7% of the arable crop areas respectively), and the measures were overall well designed. 
One can thus expect positive impact at least at the territorial level (areas targeted by the measures). 
In both cases, the measure targeted specific areas, which favoured potential mass effect in the given 
area. In this case, benefits are expected to be widespread – beyond the farm and parcel level – at least 
regarding the biodiversity (entomofauna, small fauna, flora), the mosaic of habitats, and the water 
quality. However, this should be verified with a proper assessment of the measures’ outcomes (e.g. 
taking into account the protein yield level, the actual level of input and pesticides use and the results 
on the nutrient leakage).  

  More specifically, in Spain, the eligible surface coincides with the Natura 2000 agrarian areas 
there, and it seems that it was not a strategic choice when the measure was designed. However, 
the superimposition of both areas may have reinforced the measure effect on biodiversity and 
ecological continuity.  
In Italy, the main expected environmental improvement lay in the fact that the measure made 

 

1  Uniform  area  payment:  56€/ha  in  17  Member  States  (Austria,  Belgium,  Denmark,  Finland,  France,  Germany,  Greece,  Ireland,  Italy, 
Luxembourg, Malta, the Netherlands, Portugal, Slovenia, Spain, Sweden, and the UK), complementary national payments in 3 Member States 

116 

                                                      
Evaluation of Article 68 measures 

it possible to limit land abandonment and introduced a certified Durum Wheat seed, which is 
expected to limit the quantity of input used in the supported areas. The output data did not 
show a development of protein and oilseeds crop areas, but a stabilization. 

The outcomes in terms of surface suggest that the direct effect on the environment is not significant at 
the  national  or  community  scale.  However,  the  type  of  crop  rotations  supported  remains  a  better 
alternative to cereal monoculture. Therefore, even if the environmental outcomes are inconclusive for 
the country or the community level, isolated improvements at the plot or farm scale can still be expected. 
These measures have the potential to be a useful instrument for the environment, but they must be better 
controlled, accompanied, and targeted in order to be more effective. 

7.3.2.3  Support for extensive and/or organic farming 

7.3.2.3.1  Design of the measures 

Three Member States used Article 68 to support extensive and organic farming: France (conversion and 
maintenance  of  organic  farming),  Denmark  (organic  fruit  and  berry  and  extensive  framing)  and 
Portugal  (maintenance  of  low-density  olive  groves)  (cf.:  Annex  5.1.5).  French  support  for  organic 
farming conversion and maintenance accounted for the vast majority of the budget of this set of measures 
(77%). 

Apart from the Danish organic fruit and berry measure, all these measures were previously included in 
the PDR and were transferred to Pillar I. The main changes that occurred after this transfer are the 
following: 

  France: before 2010 the farmers registered one given plot in the scheme for one particular type of 
plant cover (with some flexibility to allow crop rotation). With the implementation of Article 68, 
they had to register a given surface area for a specific plant cover but not a given plot; the support 
was opened to all regions; payments for moorland and rangeland were introduced in 2012; and, due 
to the high number of applicants in 2014, a proportional reduction of the support was applied. 

  Denmark: the commitment period was reduced to one year instead of five years 
  Portugal: the measure under Article 68 is the continuation of a measure (RURIS) existing in the 
2000-2006 RDP (the measure was ended between the two schemes); a lower proportion of trees 
under 30 year old was eligible starting from 2013; and, due to the increasing number of beneficiaries, 
a proportional reduction of support was applied (cut ranging between 54% and 66% of the expected 
amount from 2010 to 2014). 

The main effects of these changes were to broaden the eligibility criteria. Therefore, compared to the 
corresponding AEM, the measures could have had greater mass effects but, in Portugal and Denmark, 
less positive qualitative effects on the environment.  

The goals of these measures were clearly to promote the development of more sustainable agriculture, 
either  for  specific  sectors  (DK  (fruit  and  berries),  PT)  or  on  a  broader  scale  (FR,  DK  (extensive 
farming)). When the measures targeted specific sectors (PT, DK), the notifications to the EC did not 
clearly  justify  this  targeting.  When  they  were  originally  designed  under  the  RDP,  the  needs  were 
eventually justified during the original design process. This does not apply to the Danish support for 
organic fruit and berries, which was new and implemented under objective (1)(a)(i). The objectives were 
not set precisely relative to the environmental achievement pursued for this particular sector.  

The eligibility criteria of each measure are relevant to support extensive (or organic) farming: a limited 
density of trees (PT), restricted use of inputs or plant protection (quality and quantities), and compliance 
with the adequate specifications (organic specifications1  in France and Denmark for small fruit and 
berries, Danish Plant Directorate guidelines, etc.). The Danish measure for extensive farming did not 
officially support organic production, but it promoted agricultural production based on restrictive use of 

1  Organic  farming  is  regulated  at  the  European  level.  The  Council  regulation  of  2007  (EC/834/2007)  sets  out  the  principles,  aims  and 
overarching rules of organic production (regarding environment and resources protection and animal welfare standards) and defines the control 
and labelling requirements thereby providing a legal basis for supply chain activities. 

117 

                                                      
Evaluation of Article 68 measures 

plant  protection  products  allowed  in  organic  farming  in  Denmark,  thus  indirectly  making  organic 
producers the primary target. At the end of Article 68, the measure was even re-integrated to the RDP 
and specifically targeted organic farmers.  

As it is presented in § 4.1.4.2.3, the main issue concerning these measures is the commitment period: 
not all the measures had a commitment period longer than one year, unlike the AEM. This is especially 
the case for organic conversion/establishment measures that typically require four to six years to be fully 
completed. France decided to maintain the obligation of a five-year commitment (following the request 
of the French organic sector representatives). On the contrary, the  Danish authorities decided not to 
impose a longer commitment period, arguing that farmers were more willing to commit five times for 
one year, than to commit one time for five years. In the case of the support for extensive farming, the 
number  of  applications  indeed  increased  within  the  five  years  (cf.:  Annex  5.1.2).  However,  shorter 
commitment increases the risk of deadweight effects (the farmers enrol for one or a few years in order 
to receive the support and then stop) and so impedes the environmental effectiveness of the measures. 
The Danish monitoring data could not be used to assess the rate of farmers who dropped the measures 
after  one  or  a  few  years.  Nonetheless,  the  authorities  mentioned  that  the  applications  were  usually 
renewed.  In the case of the support for establishment of organic fruit trees and berry bushes, the support 
lasted for two years, and no environmental effects can be expected. 

7.3.2.3.2  Effects of the measures on the practices and type of farming 

In Denmark, on the one hand, the support for extensive farming supported 198 684 hectares in 2014, 
which is slightly less than 10% of the total Danish UAA. A substantial increase in the area supported 
was also noticed (cf. Table 39) (+17.5% in 5 years). In the light of the previous AEM for extensive 
farming, the share of total Danish UAA dedicated to organic production kept increasing during the last 
decade (5.9 % in 2000 and 7.3% in 2012 according to Eurostat data), considering the features of the 
measure (funded under Pillar I or II), and the results of the mid-term evaluation of the 2007-2013 RDP 
it can be concluded that it participated to some extend to this trend. However, the mid-term evaluation 
showed that 30 to 35 % of the investments under the AEM for extensive farming would also have been 
accomplished  without  the  support.  Therefore  it  is  assumed  that  the  same  level  of  deadweight  effect 
applied to the measure when it was implemented under Article 68.  

On the other hand, the Danish support for planting organic fruit trees and berry bushes did not meet the 
expected  results:  only  about  11.5%  of  the  planned  budget  was  actually  spent  during  the  2  years  of 
implementation and the number of adhesions decreased (-55% between 2012 and 2013). According to 
the  authorities,  the  aid  level  was  not  well  calculated  to  compensate  for  additional  cost  and  income 
forgone even though ranged between 40 to 100% of the estimated establishment costs. The supported 
surface area was very limited (cf. Table 39), and not significant compared to the total organic fruit and 
berry surface (7% in 20121). Because of its limited success, the measures were terminated after two 
years (in 2014). Given this short period of implementation, the environmental benefits can be regarded 
as null. The measures were included under the support to organic production under the 2014-2020 RDP. 
The data made available did not make it possible to determine whether the beneficiaries maintained their 
commitment under this new scheme.  

Table 39: Supported surface for the support for extensive and organic farming in Denmark (ha) 
2011 

2010 

2012 

2013 

2014 

Support  for  planting  organic 
fruit trees and berry bushes  
Support for extensive farming 

- 

- 

34 735 

82 577 

35 
146 108 

19 
174 782 

- 

198 684 

Sources: MFAF, 2015 (Denmark) 

In France, although surface area supported was not made available, steady growth in expenditure and 
the number of beneficiaries is observed: +56% in the number of beneficiaries between 2010 and 2012 
for the maintenance measure and +24% between 2011 and 2012 for the conversion measure. According 

1 Total surface of organic fruit and berries according to Eurostat Data (2015) 

118 

 
                                                      
Evaluation of Article 68 measures 

to the Eurostat data, from 2009 to 2012, the total area in conversion increased by 17%, and the fully 
converted organic area increased by 63% (cf. Figure 32). It is believed that the measures (implemented 
under Pillar I or II) did contribute to this trend, one of the reasons being that it was opened to all regions. 
Other regional schemes also contributed to this: regional support for certification, exemption from land 
taxes  in  some  Departments,  tax  credits,  other  organic-compatible  AEM  (e.g.  agri-environmental 
grassland premium), investments measures, technical assistance, training, etc. In this regard, the French 
National RDP midterm evaluation (2011) concluded that the aid was a triggering factor for conversion, 
although effective only when associated with the above-mentioned schemes. On the other hand, this 
support  was  perceived  by  the  farmers  as  unstable  and  so  mentioned  as  one  of  the  obstacles  to  the 
conversion: the farmers feared the changes that could be introduced when the support switched to the 
Pillar I (duration and level of support). This explains a higher level of adhesion in 2010, just before the 
conversion measure was transferred under Article 68. 

Figure 32: Surface of total certified organic production in France, 2003-2012 (ha) 

1 200 000

1 000 000

800 000

600 000

400 000

200 000

0

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Fully converted crop area (Ha)

Crop area under conversion (Ha)

Total crop area (Ha)

Sources: Eurostat 2015 (no data for conversion areas in 2005) 

Finally, in Portugal, according to the managing authorities report that the measure did contribute to 
maintaining the area of low-density olive groves from 2009 to 2013. This assertion is supported by the 
yearly increase in the area supported by the measure (+7.4%) from 2011 to 2014, despite the proportional 
reduction of the level of support. The statistical data also show that the area of low-density olive groves 
(under 300 trees/ha) was maintained (300,000 to 301,000 ha) from 2009 to 2013. However, it may have 
negative  side  effects  on  very  low  density  olive  groves:  the  area  under  100  trees/ha  decreased  from 
154,000 ha to 150,000 ha. 

7.3.2.3.3  Actual effects on the environment 

No monitoring of the outcomes of the measures was identified: the authority representatives met during 
the national studies have no quantitative or qualitative data on the environmental results of the measures.  

However, apart from the Danish support for planting organic fruit trees and berry bushes, the measures 
were well designed overall from an environmental perspective. 

In Denmark, the support for extensive farming helped reduce the use of nitrogen inputs and pesticides. 
First, as the farmers had to respect a minimum reduction of 30 kg/ha of nitrogen inputs (as required by 
the measure), it can be estimated that the measure led to a reduction of at least 19,000 tons of nitrogen 
inputs between 2010 and 2014. Second, it is estimated that the support for extensive farming generated 
a reduction of 382 to 637 tons of pesticides in total between 2010 and 20141. The consequence of this 
reduction in input uses on water resources, biodiversity, air quality and climate has yet to be assessed 
by the Danish Ministry of Agriculture (MFAF), which is preparing a comprehensive assessment of the 
Danish interventions targeting environment, nature, biodiversity and climate for 2016. 

1  based  on  the  Danish  2007-2013 RDP  Midterm  Evaluation  (MTE) that  estimated  that the  equivalent  AEM contributed to a   reduction  of 
pesticide use by 0.6 kg to 1 kg /ha, 

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In France, the measure did contribute to organic farming maintenance and conversion. Therefore, it is 
expected that the environmental effects related to organic production are at least partially linked to the 
Article 68 measures (other drivers exist as presented earlier). Most of the studies that assess the overall 
impact of organic farming on the environment consist in a summary of literature in various countries 
(see Annex 5.1.3 for details). As such, it is difficult to define the case of France in particular. However, 
many scientific studies were carried out in French regions (e.g. GHG emission and energy consumption 
in Bochu et al. (2008) and Van der Werf et al. (2009); nutrient recycling in Nowak et al (2015), water 
resources in Barataud et al (2014), Caplat (2006), FNAB (2008), impact of conservation tillage systems 
on soil fertility in Peigné et al. (2009); biodiversity and landscape in Fried et al (2009), Lemaire (2008), 
Pointereau (2006) and Caplat (2006)). Based on this literature, it is possible to say that the measure 
participated in the reduction of the use of fertilizers and pesticides, in the improvement of soil quality 
and in diversification of crops and ecological infrastructure. Organic farming represented between 2.9% 
(in 2010 – Eurostat) and 4.14% (in 2014 – Agence Bio) of the total French UAA; the farms are scattered 
all  over  the  country,  which  limits  the  mass  and  continuity  effects.  Therefore,  it  is  believed  that  the 
measure’s effects were limited to the plot and farm level, in particular in terms of improvement of soil 
quality and structure and of biodiversity. Considering the results of the measure at a greater scale (water 
quality, climate change mitigation, ecological continuity), the measure contributed to the reduction of 
energy consumption and GHG emissions per hectare and of nutrient leaching.  

In Portugal, the main goal of the olive grove measure was to maintain the country’s cultural heritage; 
as such, the measure was applied to a targeted area (1). The measure is considered to have attained its 
objective: it limited the abandonment of olive groves as well as their conversion into intensive olive 
groves with very little varietal diversity. It also contributed to preserving the distinctive landscape and 
to reducing fire hazards. 

7.3.2.4  Support for the maintenance of pastures 

Denmark,  Portugal,  the  Netherlands  and  Ireland  (not  concerned  by  the  National  Studies)  have 
implemented measures to maintain extensive pasturing. The features are considered to be well designed 
from an environmental perspective (limitation of the risk of overgrazing, no use of inputs in Denmark, 
preservation of traditional irrigation and drainage systems in lamieros (2) in Portugal), and the targeted 
areas presented real environmental interests (‘S.3 areas’ (3) in Denmark, High Nature Value grazing 
systems in Portugal and remote pastures reachable by boat only in the Netherlands) (cf.: Annex 5.1.6). 

All  three  measures  were  used  to  supplement,  resume  or  continue  former  support  (Pillar  II  AEM  in 
Denmark and Portugal, national scheme in the Netherlands). During their transfer to Pillar I, the eligible 
areas were expanded: addition of temporary grasslands in Denmark, of the non-forested woodlands areas 
in Portugal, and of plots in the Weerribben and Wieden regions in the Netherlands. Besides, in Denmark, 
the support for extensive pasturing in the so-called ‘S.3 areas’ supplemented a similar AEM set up under 
the Pillar II for Natura 2000 areas only.  

No monitoring of the outputs and outcomes of these measures was identified at the Member State level. 
However, given that the measures were well designed overall, they had the potential to generate positive 
environmental effects, especially for the biodiversity and the ecological continuity in these areas of high 
environmental interest. Benefits are also expected regarding the maintenance of soil structure (use of 
light  machinery  in  the  Netherlands,  and  limitation  of  stock  density  in  Denmark  and  Portugal)  and 
limitation of nutrient leaching (in Denmark).  

The extent of these expected effects are unclear, since the share of the surface of the supported area was 
not  provided  by  the  managing  authorities  (except  Portugal).  However,  the  effects  of  the  Article  68 
measure  associated  with the  RDP  AEM in  Natura 2000  areas  may  go  beyond  the  territorial level in 

1 The measure was available for selected areas, mostly located in the North and Centre interior regions and in Ribatejo and the Alentejo, which 
are the main olive producing areas in Portugal. 
2  high-altitude irrigated pastures 
3 The Section 3 areas are light open permanent grassland areas designated as protected by Danish environment authorities according to the 
Danish Nature Protection Act. They contain significant natural amenities, but the protection status does not oblige the farmer to carry out a 
higher level of management than already provided through the GAEC.  

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Denmark. Effects on territorial level may also have occurred in Portugal, where about 47% (1) of the 
eligible HNV area was supported.  

Article 68 was implemented in a context of general increase of the surface of permanent pastures in the 
EU, due to AEM under the RDP, to cross-compliance rules (2) or to environmental national and regional 
legislation in the areas of nature conservation and of water and soil protection (H.Nitsch et al., 2012). 
Nevertheless, the deadweight effect of such types of measures is considered to be low since, it concerns 
farming systems that generate environmental amenities but are not profitable enough to maintain in the 
long term. These types of farming systems typically need support that pays for the public goods they 
provide, in this case environmental services (Oréade-Brèche, 2015). 

7.3.2.5  Summary of the analysis of the impact  

None  of  the  studied  Member  States  monitor  the  effectiveness  and  the  impacts  of  the  Article  68 
environmental measures. The evaluation thus has to be based on the following criteria: the extent to 
which the environmental needs are well-targeted; the extent to which the features are relevant for the 
protection of the environment; and the geographical outreach (share of eligible area) of the measures. 
Combined with available scientific literature and based on rough estimates of the effects (sometimes 
available in mid-term evaluation of the RDP, when the Article 68 measures were transferred from CAP 
Pillar  II),  the  evaluation  can  judge  the  extent  to  which  the  measures  had  potential  results  on  the 
environment. 

Table 40: Synthesis of the criteria for estmating the effects on the environement 

   Targeting of the 
needs (N) 

Relevance of the 
features (R) 

Outreach (O) 

Observed effect on the 
practice/ FS (OE) 

Specific needs for 
a territory and 
area targeted 
accordingly 
Transversal 
environmental 
issues 

Link to the 
environment is 
unclear 

3 

2 

1 

0 

limited/partial 

.unattractive measure,  
.ill-designed,  
.implemented for a too 
short period of time. 

Yes 

> 50% of the eligible area 

Observed effects that can 
reasonably be attributed to the 
measure 

Observed effect that can partly 
be attributed to other factors. 

Between 15 and 50% of 
eligible area. 
Or reported to be significant. 

Less than 15% of eligible area 
or data not made available 

Unclear or data not made 
available 

- 

- 

- 

No observed effects  

Expected Level of Impact (EI) = (N+R+O) x OE 

Four main ‘expected levels of impact’ (EI) (detailed hereunder in Table 41) can be distinguished: 

 

 

3 out of 14 (3) measures have an expected positive impact at a greater extent than just plot and 
farm level   21-27  : these measures were set up under objective (1)(a)(v). For these measures, the 
needs  have  been  clearly  identified,  and  a  specific  area  has  been  targeted  accordingly.  The 
requirements were relevant with the environmental objectives. The outreach was significant (at least 
50% of the eligible area) and the observed effect on the practice / farming system can reasonably be 
attributed to the measures.  
5  out  of  14  measures  have  an  expected  positive  impact  at  the  plot  and/or  farm  level  with  a 
possible effect at a larger scale   14-20 : these measures were also set up under objective (1)(a)(v). 
They  generally  focused  on  transversal  environmental  issues  (e.g.  reduction  of  the  pressures  of 
conventional  or  intensive  agriculture)  and  were  designed  in  order  to  reach  as  many  farmers  as 

1 Total eligible area is estimated around 38.000 ha according to the Portuguese Ministry of Agriculture 
2 Member States have to ‘ensure the maintenance of the ratio of land under permanent pasture in relation to the total agricultural area’. Paragraph 
2 of Article 3 of Regulation 796/2004 states that this ratio shall not decrease to the detriment of land under permanent pasture by more than 
10% relatively to the ratio for the relevant reference year (2003 for old Member States and 1 May 2004 for new Member States). Besides, 
Many  Member  States  place  obligations  on  farmers  applying  for  direct  aid  to  not  convert  land  under  permanent  pasture  without  prior 
authorisation, if the ratio of permanent pasture to total agricultural area is decreasing (either at all or by 5%). Farmers can also be asked to 
reconvert their land to permanent pasture if the 10% threshold is reached (e.g. the Netherlands) 
3 French measures for maintenance and conversion to organic farming are counted as one. 

121 

                                                      
Evaluation of Article 68 measures 

 

 

possible. The specifications of the measures were relevant with the environmental goals. However, 
the data available and the interviews did not enable judgement of the extent of the effects. Besides, 
according to the interviews, the observed effects on the practices / farming systems can partly be 
attributed to other factors as well.  
2  out  of  14  measures  have  an  expected  positive  impact  at  the  plot  and/or  farm  scale  and 
unknown or unlikely impact at the larger scale    7-13  : The measures that have achieved this 
level of impact were set up under objective (1)(a)(i). The requirements were relevant overall with 
the environmental goals, but the data available regarding the level of implementation did not enable 
full appraisal of the extent of the measures’ effects. 
4 out of 14 measures have an insignificant impact   0-6  : This concerns the remaining measures set 
up under objectives (1)(a)(i) or (1)(a)(v) (French rotation measure). These measures did not attract 
enough  applicants (e.g.  protein  and  oilseed  crops  in Finland, crop  rotation and organic  fruit  and 
berries in Denmark), were ill-targeted (e.g. organic fruit and berries in Denmark) or implemented 
for a too short period of time (e.g. French support for diversification in crop rotations). 

It must be underlined that low ratings for a measure are sometimes due to the fact that no evidence or 
scientific literature demonstrates the effects of the supported practices on the environment. Moreover, 
measures  targeted  on  limited  areas  may  have  a  high  rate  if  they  were  well  developed  and 
evidence/literature existed on the impact on the environment, even though this measure will not have an 
impact beyond the territorial level. 

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Evaluation of Article 68 measures 

Measures: 
Support for… 

Table 41: Synthesis of the analysis of the environmental impact of the measures set up under Objectives (1)(a)(i) and (1)(a)(v) of Article 68  
Art 
68 
obj. 

Main expected 
environmental effects 
(literature) 

Observed effect on the practice / 
farming system 

Features 
ensuring a 
positive impact 

Share of the 
eligible area 
supported 

Period 

N R 

OE 

O 

Expected impact of SS on the 
environment 

Crop rotation and diversification (with introduction of oilseed and protein crops) 

Focus on 
legume sector 

2010-2014 

2  2 

N/A 
Low uptake 

1 

Maintenance of the agri-industrial 
sector, decrease in protein crop 
surfaces and maintenance of fodder 
legume surface 

2 

Expected to be positive at the level 
of the plot 
Not significant at the upper scales 

FR 

FR 

FI 

Protein and 
forage 
legumes 

Diversification 

in crop 
rotations 
Protein and 
oilseed crops 

1ai 

1av 

1ai 

DK  Crop rotation 

1ai 

PL 

Pulses and 
herbage 
legumes 

1ai 

IT 

Crop rotation 

1av 

SP 

Crop rotation 
on non-
irrigated 
areas 

1av 

FR 

Extensive and organic farming 
Maintenance 
of organic 
farming 
Conversion to 
organic 
farming 

1av 

1av 

FR 

Plot and farm level: 
. Improvement of the 
soil structure and 
quality 
. Preservation of 
biodiversity (mainly 
soil fauna/ 
entomofauna and flora) 
Regional/ territorial 
level: 
. Improvement in water 
quality 
. Mosaic of habitats / 
landscapes 
. Preservation of 
biodiversity and 
ecological continuity 
. GHG Reduction 

Plot and farm level: 
. Improvement of the 
soil structure and 
quality 
. Preservation of 
biodiversity (mainly 

Relevant criteria 
for 
diversification 
Legumes and 
oilseeds sector 
Relevant criteria 
diversification 
Legumes 
cultivated as 
main crops 

Relevant criteria 
for rotation 
Specific needs 
and areas 
targeted 

Relevant criteria 
for 
diversification 
Specific needs 
and area 
targeted 
Information 
campaign 

Organic 
production 
specification 
5 year 
commitment 

1 Agrosynergie estimation based on the Eurostat and LUKE data (2015) 

2010 

2  1 

N/A 

1  No significant effect 

0  No noticeable effects 

2011-2014 

3  1 

Entire*1 

3 

No limitation of the progression of 
cereals 

0  Unlikely noticeable effects 

2012-2013 

1  1 

0.4% of the 
arable crops 

1  No significant effect 

0  Unlikely noticeable effects 

2010-2014 

2  2 

65 -75% 

3 

2010-2013 

3  3 

70 - 80% 

3 

2010-2014 

3  2 

95% 
in Aragon 
(region with 
the most 
beneficiaries) 

3 

Participation in limiting the decrease 
of domestic legumes production with 
AEM 
Reduction of land abandonment in the 
targeted areas 
Maintenance of the crop rotation and 
protein and oilseed surface area 
Introduction of certified seeds of 
durum wheat requiring less inputs 
Development of legume and oilseed 
crops in the targeted regions 
Reduction of cereal monoculture and 
of land abandonment in the targeted 
regions 
Likely effect on reducing use of N on 
the plot (advice and information 
provided to the farmers) 

2010-2014 
(+ previous 
AEM) 
2011-2014 
(+ previous 
AEM) 

2  3 

N/A but area 
reported to be 
significant 

2 

Positive influence of the measure on 
the increase in organic activity in 
combination with other instruments at 
national, regional and local scale 

2 

2 

3 

2 

10 

0 

0 

0 

14 

18 

Expected positive impact at the plot 
and farm level 
Unknown at the upper scales 

Positive impact expected at the plot, 
farm and regional level 
However, the practice has to keep 
ensuring the positive impact on the 
long run 

Positive impact expected at the plot, 
farm and regional level (yet, the 
practice has to keep ensuring the 
positive impact on the long run) 

24 

Impact at the plot and farm level 
Effect likely to be positive at the 
upper scales but depends on 
numerous other factors 

14 

123 

 
 
 
                                                      
Evaluation of Article 68 measures 

Share of the 
eligible area 
supported 

7 to 3 % 
(decrease of 
the uptake) 

O 

Observed effect on the practice / 
farming system 

OE 

Expected impact of SS on the 
environment 

1  No significant effect 

0  No noticeable effects 

Art 
68 
obj. 

Main expected 
environmental effects 
(literature) 

Features 
ensuring a 
positive impact 

Period 

N R 

soil fauna / 
entomofauna and flora) 
Regional/territorial 
level: 
. GHG Reduction  
. Improvement in water 
quality 
. Mosaic of habitats / 
landscapes 
. Preservation of 
biodiversity and  
ecological continuity 

1ai 

1av 

1av 

Relevant criteria 
for an organic 
practice 

2012-2013 

1  1 

Relevant criteria 
for an extensive 
practice 

2010-2014 
(+ previous 
AEM) 

2  3 

About 10% of 
Danish UAA 
in 2014 

2 

Relevant criteria 
for an extensive 
practice 

2010-2014 
(+ previous 
AEM) 

3  2 

31-33% 

2 

Measures: 
Support for… 

Planting 
organic fruit 
trees and 
berry bushes 

DK  

DK  

Extensive 
farming 

PT  

Protection of 
the national 
olive growing 
heritage 

Extensive pasturing 

NL 

Water 
Transport 
Allowance 

1ai 

PT 

Extensive 
grazing 

1av 

DK 

Extensive 
pasturing 

1av 

Plot and farm level: 
.Improvement of the soil 
structure and quality 
. Preservation of 
biodiversity (soil fauna/ 
insects and flora) 
Regional/territorial 
level: 
. GHG Reduction 
(carbon sink) 
. Preservation of water 
resources  
. Mosaic of habitats / 
landscapes 
. Preservation of 
biodiversity and 
ecological continuity 

Specific needs 
and area 
identified 
Some plots are 
located in a 
National Park 
Specific needs 
identified, HNV 
area targeted 
Relevant criteria 
for extensive 
grazing 
Relevant criteria 
for extensive 
pasturing 
Specific area 
targeted to 
supplement a 
similar AEM 

2010-2014 
(+ previous 
national aid 
scheme) 

2010-2014 
(+ previous 
AEM) 

3  3 

N/A 

1 

3  3 

47% 

2 

Maintenance of the extensive grazing 
activity in almost half of the eligible 
HNV areas  

2010-2014 
(+ 
supplement
ary AEM) 

3  3 

̴ 5% of the 
pasture areas  
in 2014 

1 

Probable contribution to the 
maintenance of extensive pasturing 
(based on the corresponding AEM in 
N2000 areas). However, no data were 
available to demonstrate it. 
Reduction of nitrate leakage 

Contribution to the development of the 
extensive and organic farming. 
Reduction of the use of nitrogen input. 
30% deadweight effect (based on 
former AEM assessment) 

Maintenance of the area of low-
density olive groves (under 300 
trees/ha), but decrease in the area of 
olive groves with very low density 
(under 100 trees/ha) 

Effect on the maintenance of the 
remote parcels likely to be positive 
(constant level of uptake)  
However, no data were available to 
demonstrate it 

2 

2 

1 

2 

2 

0 

14 

14 

Positive impact expected at the plot 
and farm level 
Effect at the upper scales likely to 
be positive 

Positive impact expected at the plot 
and farm level 
Maintenance of a national heritage 
and the associated landscape 
Limitation of land conversion into 
intensive olive groves 

Positive impact expected at the plot 
and farm level 
Effect unknown at the upper scales 

7 

Positive impact expected at the plot 
and farm level 
Likely maintenance of the 
continuity effect within the High 
Nature Value areas considering the 
type of practice and area supported 
Positive impact expected at the plot 
and farm level  
Effect unknown at the upper scales 
but likely to be positive when 
associated with other measures 
(such as the AEM in Natura 2000 
areas) 

16 

14 

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Evaluation of Article 68 measures 

7.4  ANSWER ON THE ENVIRONMENTAL IMPACTS OF THE 

OTHER OBJECTIVES 

7.4.1  BOVINES: SUPPORT FOR MILK AND MEAT PRODUCTION 

  Literature review of the environmental impacts of the system of production 

The impact of the bovine sector varies depending on the type of bovine production systems and their 
geographical localisation, according to the literature reviews: 

  For the beef sector, the threshold of 1.4 LU/ha can be applied to distinguish between intensive and 
extensive systems (Alliance Environment, 2007b). Cattle breeding can be associated with, on one 
extreme, a grazing-only system (organic and labelled calves from suckler cows) and on the  other 
with a high concentrates feed system (specialised fattening indoors). The type of activity, breeding 
or fattening, is an indication of the intensity of the production system: the stocking density of a 
fattening  activity  is  about  twice that  of  a  breeding/fattening  or  breeding-only  activity  (European 
Commission DG Agri, 2007). Moreover, organic production is characterized by a higher rate of 
grazing  on  permanent  pastures  compared  to  conventional  systems  (Sheperd,  2003,  European 
Commission, 2013a).  

  For the dairy sector, the threshold of 1.4 LU/ha can also be applied to distinguish between intensive 
and extensive systems (Alliance Environment, 2007b). The main production systems in the EU are 
extensive grassland, conventional mixed or intensive maize silage (European Commission, 2013b). 
The latter is a relatively high input/output system. The extensive systems, such as Mediterranean 
mixed,  permanent  grassland  mountain  or  transhumance,  lead  to  low  input/output  and  are 
characterized by grazing and low concentrate use (Alliance Environnement, 2008).  

  Concerning geographical targeting: pasture-based or extensive production systems are commonly 
found in pastoral regions and mountainous areas throughout the EU, where crops are hard to grow 
(European Commission, 2003). Moreover according to Galan et al. (2007), the stocking density is 
lower in mountain dairy farming than in plain dairy farming (between 0.8 and 1.1 LU/ha instead of 
1.4 and 1.8, depending on the feeding system). 

Tableau 2: Summary of the literature review on the environmental impacts of the bovine production 
system 
Bio-
diversity 
- 

Air and 
Climate 
--- 

Land-
scape 
- 

Sources 

Water 

Plains 

Area 

Soil 

-- 

- 

Milk production 

Mountains/LFA 

Fattening young 
bovine 

Plains 

Plains 

Suckler cow 

Mountains/LFA 

Organic/labelled 
calves from suckler 
cows 

All 

- 

-- 

-- 

- 

- 

++ 

++ 

++ 

- 

- 

+ 

+ 

- 

- 

- 

- 

++ 

++ 

++ 

+ 

- 

- 

-- 

- 

- 

Alliance Environnement (2007b) 
Galan et al. (2007) European 
Commission (2013) 
Bunce (2004) 

European Commission (2007) 

Alliance Environnement (2007b) 
EC DG Agri( 2004) 
Galan et al. (2007) European 
Commission (2013) 
EC DG Agri, (2004) 
Bunce (2004) 

Chambaut et al. (2011) 
European Commission, (2013) 

The preceding table shows that the bovine sectors can lead to negative environmental impacts: 

-  Water  pollution  is  induced  by  nitrogen  and  phosphate  release  caused  by  application  of  organic 
manures, slurries and inorganic fertilisers for feed production (Henning et al., 2006). Other potential 
pollutants are pesticides and veterinary medicines (Alliance Environnement, 2007).  

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Evaluation of Article 68 measures 

- Traffic, tillage and grazing livestock cause soil compaction and as a consequence can increase the 
anaerobicity  of  the  soil,  cause  denitrification  and  limit  gas  diffusion  and  water  absorbing  capacity 
(Henning et al., 2006b).  
- According to Henning et al. (2006) enteric fermentation and/or manure lead to methane, nitrous oxide 
and ammonia emission and thus affect air quality. Degradation of pastures and a significant use of fossil 
fuel (intensive system based on imported feed) could increase CO2 emissions (Henning et al., 2006).   
- The increasing amount of maize fields used to grow fodder for cows could lead to the homogenization 
of the landscape, which brings about low ecological continuity (Burel, 2004).  

These impacts are aggravated in certain systems such as fattening activities, with cattle kept indoors and 
fed a non-grass diet such cereals, etc. They can also be reduced when the production is associated with 
extensive pasturing (e.g.: grazing suckler cows, label/organic calves from suckler cows, some farms in 
mountainous areas): in this case, the incidence is reduced and it can even be positive on biodiversity, 
soil structure and landscapes. The table also shows that the impacts of a given cattle breeding activity 
are on average limited in mountainous/LFA areas, because breeders in plains may more easily adopt 
intensive practices, while in mountainous/LFA areas breeders have hardly any other alternative than to 
adopt extensive practices (European Commission, 2003). The level of the impacts described in the table 
has to be put into perspective within the local environmental context, for instance: 







The impacts on water resources have to be taken seriously, especially in dry areas such as ones in
Portugal and Spain (Alliance Environnement, 2007b), when crops such as maize, used as feed crops,
need to be irrigated.
Suckler  cow  production  in  LFA  is  an  essential  activity  for  the  maintenance  of  biodiversity  as
suckler  cows  are  less  selective  in  the  plants  they  eat  than  sheep  (Rook  and  Tallowin,  2003).
However, on some fragile soils on Mediterranean mountains, sheep farming is more appropriate to
manage and protect the vegetation (Bunce, 2004).
In Finland, the maintenance of bovine farms helps limit the extension of cereal monoculture and
thus helps to preserve soil quality, according to the managing authorities and sector representatives
(National Studies).

Based  on  these  elements,  it  can  be  concluded  that  Article  68  measures  implemented  to  maintain 
extensive cattle breeding systems should have a low negative to positive impact on the environment, at 
least  at  the  farm  level.  Conversely,  measures  encouraging  high  density  herds  and  productivity  such 
payment coupled with the production will likely be promoting systems with higher negative impacts on 
the environment if no sustainable management practices (maximum stocking density etc.) are included 
in the requirements of the measure. Finally, measures targeting LFA or mountainous areas favour farms 
based in these areas compared to the ones based in plains, which are more often intensive. They are thus 
supposed to favour extensive farming systems, although this is not fully guaranteed, especially in semi-
mountainous areas and piedmonts. 

 Expected effects of the measures supported by Article 68 in the beef and dairy sectors

Denmark,  Finland,  France,  Greece,  Hungary,  Italy,  Poland  and  Spain  implemented  measures 
under  Article  68  supporting  the  bovine  sectors  without  specific  environmental  objectives.  The 
majority of the measures (12 out of 20) supported beef production; milk production was supported by 
seven measures, and one measure supported both sectors. The inventory of the measures and the analysis 
of  their  criteria  make  it  possible to  distinguish  three  types  of  measures: the  measures  that support a 
system that is more ‘extensive’, the measures that support a system that is more ‘intensive’ and the ones 
that indifferently support both systems. This analysis is presented in the first columns of Table 42 and 
leads to the conclusions presented hereafter.  

All the measures supporting the  beef sector were coupled payments per head, except one decoupled 
payment in Hungary. All measures supporting the milk sector were coupled payments per litre/tonne 
(3  measures)  or  per  head  (4  measures).  As  said  before,  coupled  payments  may  favour  intensive 
production systems; however, some of these measures had requirements that limited this risk:  

-  In the meat beef sector: 
o Spain defined a maximum stocking density of 1.5 ha, for the two measures supporting this sector.
o In France, one measure out of three targeted extensive systems (organic/labelled calves).

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Evaluation of Article 68 measures 

o  Poland targeted support in areas where the impacts of the sector on the environment are lower (LFA/ 
mountainous areas). In addition, in Poland the support was channelled only to farms with a maximum 
of 10 head, with the argument that these small family farms have a low impact on the environment 
(pasture system) and contribute to maintaining traditional landscape.   

o  In Greece, the regions supported are mainly situated in semi-mountainous or mountainous areas.  
-  In the milk sector: only geographical targeting criteria could moderate the effects of the coupled 
support. In Hungary, the support was targeted on LFA and mountainous areas, and in France one 
measure  was  specifically  targeted  on  mountainous  areas  with  a  higher  level  of  support  than  the 
support for the other areas.  

In the milk sector, it can therefore be concluded that, if the Specific Support had a significant impact 
on the sector, the measures may have contributed to negative environmental impact associated with this 
sector,  except  in  France  and  Hungary.  In  the  context  of  the  milk  crisis  it  seems  that  economic 
consideration has prevailed over an environmental one.  

In the meat sector, more measures integrated (voluntarily or not) requirements contributing to favouring 
extensive systems, especially in Hungary, Spain and Poland. In the other countries the situation is more 
mixed:  one  measure  in  France  did  so,  but  the  other  favoured  rather  intensive  systems  or  both  types 
(suckler cows); in Italy one measure supported extensive system (according to the managing authorities 
and  experts)  while  the  other  clearly  support  fattening  activity.  In  Greece,  despite  the  absence  of 
geographical requirements in the two implemented measures, one can assume that the regions supported 
are based in semi-mountainous or mountainous areas, where the environmental impacts are from low 
negative  to  positive  depending  to  the  practices.  In  Finland  and  Denmark  both  systems  could  be 
supported,  expected  effects  thus  depends  on  the  results  of  the  measures.  However,  according  to 
managing authorities and the experts, in Finland the bovine farming is characterized by small farms, 
with low negative environmental impacts. 

  Impact on the environment of the measures 

These conclusions were deepened taking into account the results of the measures and the other factors: 

  Meat sector 

In  the  meat  sector,  the  measures  implemented  under Article  68  have  globally  failed  to  maintain  the 
production, they had very low effects on the farm viability, expect for Finland and Greece and to a lesser 
extent Denmark, and France (see EQ2). It can thus be concluded that the indirect effect of these measures 
on the environment is insignificant, except for the following cases:  

 

 

 

 

In  Greece,  the  measures  significantly  supported  the  viability  of  farms  likely  to  be  in  extensive 
production systems. 
In  Finland,  the  measures  significantly  contributed  to  the  viability  of  farms  in  a  sector  mainly 
characterized by small farms, thus with potential low negative environmental impacts (according to 
interviews) 
In  France,  the  measures  for  organic  and  labelled  calves  have  had  a  positive  impact  on  the 
maintenance of the sector and thus led to associated positive impacts on the environment. The other 
measures had low impact on the sector and thus insignificant indirect effects on the environment. 
In Denmark, the measures probably had a limited positive or negative impact on the environment, 
depending on the overall environmental impact of the meat sector in Denmark, which could not be 
well documented here. 

  Milk sector 

As explained in EQ2, the measures implemented under Article 68 have failed overall to maintain 
milk production. They had a limited impact on the farm viability except in Hungary and to a much 
lesser extent in France, Spain, and Finland. The effects on the environment of Specific Support in this 
sector are also insignificant, except for:  Hungary and to a much lesser extent France and Finland, 
where they have contributed to support an extensive milk system, and Spain, where they may have had 
a limited impact, positive or negative, depending on the overall impact of the meat sector in Spain, which 
could not be well documented here.  

127 

Evaluation of Article 68 measures 

Table 42 : Overview of the measures implemented in the bovine sectors in the Member States  
Environmental 
impact of the 
sector impact of 
the supported 
sector 
Low Neg to Pos 

Criteria used to define 
the type of measure 
(positive/negative 
impact on the 
environment) 

Coupled/not 
Coupled/not 
coupled 

Aid 

Coupled (head) 

Area targeted 

Country 

Sector 
supported 

Greece 

Meat 

Meat 

Dairy 

France 

(ii) Beef and veal meat, in the case of reproduction 
heifers 
(ii) Beef and veal meat, in the case of suckler cows 
(b) Suckler cows 
(b) For organic/labelled calves 
(b) For fattening young bovine 
(b) Support for milk production (implemented only for 1 
year) 

(b) For milk producers in mountain areas 

Coupled (litres) 

Meat 

(c) Beef and veal 

Hungary 

Dairy 

(b) Dairy 

Poland  Dairy/Meat 

Meat 

Italy 

(b) For farmers keeping cows in the region of south-
eastern Poland 
(ii) Submeasure ‘Aid for calves born from beef breed 
suckler cows and from dual purpose suckler cows’ 
(ii) Submeasure ‘Aid for cattle aged between 12 and 24 
months’ 

Dairy 

(ii) Improvement in milk quality 

Coupled (ton) 

(b) Disadvantaged holdings containing suckler cows 

Coupled (head) 

Spain 

Meat 

Dairy 

(ii) Certified quality beef 

Coupled (head) 

Finland 

Meat 
Dairy 
Denmark  Meat 
Source: developed by Agrosynergie based on the description of the measures in EC Notifications and the National studies.

(b) Aid to milk producers 
(ii) Quality milk products 
(b) Beef and veal production 
(b) Milk production 
(b) Production of beef meat 

Coupled (head) 
Coupled (head) 
Coupled (head) 
Coupled (head) 
Coupled (head) 

Coupled (head) 
Coupled (head) 
Coupled (head) 
Coupled (head) 

Coupled (litres) 

Decoupled 
(historical) 

Coupled (ton) 

Coupled (head) 

Area targeted  
None 
Organic System 
Fattening 
Strong coupling to the 
production 
Strong coupling to the 
production 
Mountainous areas 
Decoupled 
Bovine extensification 
supplement 
Strong coupling to the 
production 
LFA and mountains  
LFA and mountains 
10 head / farm max 

Low Neg to Pos 
Unknown 
Low Neg to Pos 
Negative 

Negative 

Low Neg to Pos  

Low Neg to Pos 

Low Neg to Pos 

Low Neg to Pos 

Coupled (head) 

None 

Unknown 

Coupled (head) 

Fattening 

Strong coupling to the 
production 
Maximum stocking 
density =1.5LU 
Fattening 
Maximum stocking 
density=1.5LU 
None 
None 
None 
None 
None 

Negative 

Negative 

Low Neg to Pos  

Low negative 

Unknown 
Unknown 
Low Neg to Pos 
Low Neg to Pos 
Unknown 

Impact of the 
Art. 68 on the 
maintenance of 
the sector 

Overall 
environmental 
impact of the 
measure 

+ 

0 
+ 
0 

0 

+ 

0 

+ 

0 

0 

0 

0 

0 

0 

+ 

+ 
+ 
+ 

+ 

+ 
0 
+ 
0 

0 

+ 

0 

+ 

0 

0 

0 

0 

0 

0 

? 

+ 
+ 
? 

128 

 
 
Evaluation of Article 68 measures 

7.4.2  SHEEP  AND  GOATS:  SUPPORT  FOR  MILK  AND  MEAT 

PRODUCTION 

  Literature review of the environmental impact 

According to the European Commission (2000), it is appropriate to divide the goat and sheep sector into 
two  categories,  depending  on  the  type  of  inputs  and  outputs:  Northern  European  systems  and 
Southern and Mediterranean systems. The first ones are characterized by significant use of grassland 
for seasonal grazing sheep, seasonal breeding with lambing and production of heavy lamb (EC, 2000). 
These systems are found in Finland, Poland, Hungary and Central and Northern France. Goat milk and 
meat production is insignificant in these systems (except for France). In Southern European countries, 
the range of systems is more complex because of the breeding of both sheep and goats. Dairy systems 
dominate. The system are often based on transhumance, and sheep or goat farms are not often organised 
into producer organisations, with individual cheese making activity and a high demand on labour (EC, 
2000). These systems are found in Spain, Italy, Greece and the South of France.  

The literature reviews shows a diversity of impacts on the environment by sheep and goat production 
depending on the production system used and on the farming practices adopted. The typology described 
above was not used because these types of systems are characterized by a large range of production 
intensity. As a consequence the environmental impacts can be distinguished by area. 

Tableau 3: Summary of the literature review regarding the environmental impacts of the system of 
production in the sheep and goat sectors 

Area 

Water 

Soil  Biodiversity  Landscape 

Plains 

-- 

+ 

+ 

+ 

Sheep 
& Goat 

LFA/Mountains 

- 

++ 

+++ 

++ 

Air and 
Climate 

- 

- 

Sources 

Niemi and Ahlstedt 
(2014), Idele (2012), 
European 
Commission (2000 
and 2006) 
Niemi and Ahlstedt 
(2014), European 
Commission (2000 
and 2006) 

Of course, the level of the impact described above must be put into perspective with the management 
implemented on the farms and the local environmental context. Some examples are presented below. 

  Water  pollution  and  overuse  could  result  from  stock  concentration  from  intensified  production 
systems and cheese making. However, the irrigation of fodder systems for sheep and goat farming 
is considered as marginal, and water issues are considered insignificant compared to other livestock 
sectors (EC, 2006). 

  The impact of grazing could be either negative or positive on biodiversity, habitats and soil quality, 
depending on the biotopes, the intensity of grazing, the seasonal condition and number of head per 
hectare (EC, 2006).  
In areas where no other agricultural alternatives exist, especially in Mediterranean regions, sheep 
and goat production helps to preserve the landscape by maintaining a network of natural open areas 
and limits the significant risk of fire (Ripoll-Bosch, 2011). 

 

  Type of measures supported by Article 68 in the sheep and goat sectors 

Finland, France, Greece, Hungary, Italy, Poland and Spain implemented measures to support the 
sheep  and  goat  sector  under  objectives  (1)(a)(ii),  (b)  and  (c).  Therefore,  both  Northern  and 
Mediterranean systems were supported. 

It is determined whether a measure led to more positive or negative impacts based on the degree of 
decoupling and the production provisions (threshold stocking density, productivity rates, slaughtering 
weight), the type of production system and the geographical area targeted.  

129 

 
Evaluation of Article 68 measures 

Except for the (c) support for the ovine sector in Hungary, all the measures were coupled payments per 
head.  Moreover,  the  regions  supported  were  mostly  located  in  semi-mountainous  and  mountainous 
areas.  

The following countries included provisions favouring extensive systems:  

 

 
 

 

In Italy, one sub-measure (out of four) was restricted to farms with a cattle load of less than 1 LU 
per hectare of forage area (low density).  
In Poland, the support was restricted to farms having a herd of 10 animals or less. 
In Greece, the maximum size of herd supported was 50 ewes. Moreover, the support targeted semi-
mountainous and mountainous areas. Yet, a risk of overgrazing was identified during the National 
Study  
In  Spain,  one  of  the  measures  included  support  for  organic  production,  thereby  promoting  the 
positive effects of this type of system. The two other measures were restricted to LFA, mainly semi-
mountainous and mountainous areas. 

In other countries the provisions did not favour any specific type of farming systems. 

  Two different production systems are found in France. For instance, sheep and goat production can 
be  very  intensive  in  the  plains,  whereas  it  is  usually  extensive  in  the  semi-mountainous  and 
mountainous areas. 

  Considering the type of production usually found in Finland, one should expect that the Finnish 
measure  will  mainly  support  small  grazing  herds  (statement  based  on  interviews  of  managing 
authorities).   

Therefore, it can concluded that, in the sheep and goat sector, the measures may have contributed to 
positive  environmental  impact  in  Italy,  Poland,  Hungary  and  Spain.  Conversely,  in  Greece  the 
potential impacts are considered to be potentially mixed due to the overgrazing risk. Finally, in France 
and in Finland, the impacts are considered to be potentially mixed.  

  Impact of Article 68 on the viability and the maintenance of the sectors 

According to EQ2, the measures implemented under Article 68 have failed to maintain production 
in the sheep and goat sectors, except in France, where a significant positive impact on viability was 
observed. However, in this country the measure supported both extensive (Mediterranean regions) and 
intensive (western regions) indistinctly. This allows us to conclude that, given the results, the impact of 
the Specific Support on the environment is very low, except for France, where the impact is considered 
as either low negative or positive depending on the region. It should be noted that, overall, the negative 
environmental impacts associated with sheep and goat sector are limited. 

130 

Evaluation of Article 68 measures 

Tableau 4 : Overview of the measures implemented in the sheep and goat sectors in the Member States 

Environmental impact of 
the sector impact of the 
supported sector 

Impact of the Art. 
68 on the 
maintenance of the 
sector 

Overall 
environmental 
impact of the 
measure 

Country 

Sector 
supported 

Aid 

Finland 

Hungary 

Meat 

Meat 

Poland 

Meat 

France 

Dairy or 
meat 

(ii) Support for quality for 
slaughtered lambs 
(c) Support for bovine and 
ovine sector 
(b) Specific Support for 
farmers keeping sheep in 
the region of southeastern 
Poland 
(b) Sheep  
 and goat producers 

Coupled/not 
Coupled/not 
coupled 

Coupled (per 
head) 
Decoupled 

Coupled (per 
head) 

Coupled (per 
head) 

Greece 

Dairy or 
meat 

(b) Specific Support for 
sheep and goat production 

Coupled (per 
head) 

Criteria used to define the 
type of measure 
(positive/negative impact on 
the environment) 
Minimum slaughtering weight 
(18 kg) 
None 

Minimum livestock threshold 
(10 head) 
Maintain pasturing in 
mountains 
Minimum threshold (50 ewes 
or 25 goats) 
Minimum birth rate (0.7 to 
0.6 lambs/ewes/y) 
LFA and mountains including 
pastoralism and maintenance 
of local breeds (top ups) 
Minimum threshold (50 
females) 
Maximum LU= 1LU/ha 

Italy 

Spain 

Meat 

Dairy or 
meat 

Dairy or 
meat 

Dairy or 
meat 

(ii) Specific Support for 
the improvement sheep 
and goat meat quality 
(ii) Aid to sheep and goat 
producers for quality labels 
(b) Aid to compensate 
vulnerability in the goat 
sector for holdings located 
in disadvantaged areas 
(b) Aid to compensate 
vulnerability in the sheep 
sector for holdings located 
in disadvantaged areas 

Coupled (per 
head) 

Coupled (per 
head) 

Quality schemes including 
organic 

Coupled (per 
head) 

Coupled (per 
head) 

LFA 

Low Neg to Pos n 

LFA 

Low Neg to Pos 

Source: developed by Agrosynergie, based on the description of the measures in EC Notifications and the National studies 

Negative to Positive 

Low Neg to Positive 

Low Neg to Pos 

Negative/Positive 
depending on the 
localisation 

Negative/ Positive 

Low Neg to Pos 

Low Neg to Pos 

0 

0 

0 

+ 

0 

0 

0 

0 

0 

0 

0 

0 

+/- 

0 

0 

0 

0 

0 

131 

 
 
Evaluation of Article 68 measures 

7.5  ANSWER ON THE EFFECT ON ANIMAL WELFARE 

  Case of the Netherlands 

The  Netherlands  is  a  major  exporting  country  (for  livestock),  and  therefore  faces  great  difficulty 
regarding the development of intermediate animal-friendly production (i.e.: between conventional 
and organic standards), which is less competitive than the conventional production (Ingenbleek, 2013). 
Yet, in the Netherlands, the interviews with the stakeholders revealed that Dutch farmers are generally 
willing  to  improve  their  animal  welfare  standards  (beyond  the  regulatory  requirements),  since  they 
believe that the political and social interest in animal welfare is clearly growing in the Netherlands (LTO, 
2007). However, the high production costs and the risks involved discourage them. To support the policy 
ambitions in the field of sustainability and animal welfare, there are several initiatives. These initiatives 
take  various  forms  (cf.:  Annex  5.2):  regulation,  financial  support,  certification  schemes  or  research 
programmes. 

This is the context in which Article 68 measures regarding Animal Welfare were designed. The whole 
point of the Dutch Specific Support for animal welfare was to support the improvement in relation to 
the  minimum  EC  or  national  legal  requirements  regarding  animal  welfare.  The  Netherlands  thus 
designed four measures to enhance animal welfare standards, incite innovation and prepare farmers 
for  the  new  national  regulations.  The  rationale  behind  the  measures  was  relevant,  since  the  support 
aimed  at  the  different  and  complementary  levels:  housing  improvement,  market  (certification), 
management practices and innovation.  

Measure 

Period  Targeted sectors 

Table 43: Dutch measures for animal welfare 
Type of practice supported 

Level of support 

AW I: Fully 
sustainable 
housing 

2010-
2014 

AW II: Animal 
friendly 
products 

2011-
2013 

Dairy and beef 
cattle, sheep, 
goat, pigs, veal 
calf, poultry, 
duck, or rabbit, 
turkeys 

Broilers, laying 
hens, veal 
calves, beef 
cattle, pigs 

AW III: 
Management 
measures 

2011 

Pigs and 
Broilers 

AW IV: Calves’ 
floors 

2012-
2013 

Calves 

Investments. 
.Construction of/conversion into an 
integrated sustainable housing or farming 
method, 
. Installation of the necessary equipment 
for the operation of fully sustainable 
stables and animal-friendly farming 
methods. 

Participation in an approved welfare 
certification system. 

Management practices to : 
. Reduce the occurrence of contact 
dermatitis (footpad lesions) in broiler 
production, 
. Reduce the occurrence of tail biting 
problem in pigsties. 
Investment for innovations. (Experimental 
floors) 

.Up to 50% of the 
investment  
.Maximum: 400,000€ 
per application 

.60% of the cost of 
supported activities 
(excl. investments) 
.Maximum 200,000€ 
per application 

.Flat rate per animal 
.Up to 60% of the 
fixed costs  
. Maximum: 500,000€ 

60% of the investment 
costs reimbursed 

In terms of implementation, AWI accounts by far for the majority of the expense. Almost 94% of the 
amount granted to the AW measures between 2010 and 2014 were allocated to the sustainable housing 
measure, even though it only represents 41% of the beneficiaries of the Dutch AW measures throughout 
the  whole  period  of  implementation  of  Article  68.  In  2011,  AWIII  (management  measure)  had  fair 
success amongst the pig and broiler producers, but the measure was too difficult to implement (control 
– see EQ5) and was abandoned after one year. AWIV was experimental, and therefore targeted a limited 
number of farmers (14 beneficiaries – see Annex 5.2). 

All  the  measures  were  designed  to  go  beyond  the  statutory  requirements.  The  experimental 
investments  (AWIV)  and  the  certification  measure  (AWII)  by  definition  entail  a  higher  level  of 
standards  than  the  regulation.  As  for  the  management  measure  (AWIII)  and  the  fully  sustainable 
housing measure (AW I), the national legislation clearly stated that the eligible expenses should go over 

132 

Evaluation of Article 68 measures 

and above the statutory minimum to enhance animal welfare and, and in the case of AWI should also 
satisfy minimum legal requirements in the fields of environment, energy, health, landscape suitability 
and working conditions.  

Some changes are noted by the stakeholders (development of fully sustainable houses, creation of a 
new market for peat as a soil subtract for keeping broilers, increased of the application of the certification 
scheme); however, there was no monitoring of the outcomes, and therefore it is not possible to draw a 
solid conclusion on what extent Article 68 contributed to these changes. Although abandoned after 
1 year, the support for management practices (AWII) was particularly promising since it was designed 
based on scientific studies and was associated with training courses (mandatory or not). However, it was 
stopped  because  it  was  too  costly  to  control  the  compliance  of  good  management  practices,  and 
generated a significantly higher administrative cost than the three other measures.  

  Impact of the other measures implemented under other objectives than (1)(a)(iv) 

The previous analysis related to the environmental impact of the Article 68 measures provides reliable 
criteria to judge the breeding conditions in the cattle and sheep and goat sectors: provisions limiting or 
increasing the stocking density and references to a label or a quality scheme requiring higher animal 
welfare  standards.  Indeed,  lower  stocking  density  is  reported  as  being  associated  with  better  animal 
welfare and can reduce the development and the spreading of diseases (Alliance Environment, 2007). 
Based on these criteria, a number of measures clearly appear to have a rather positive impact on the 
enhancement of animal welfare on the farm:  

--  measures  under  objectives  (1)(a)(i)  and  (1)(a)(v)  in  the  livestock  sector:  in  France  (measures 
supporting organic production applied to livestock sectors), and to a certain extent in the Netherlands 
(cattle sector), Portugal (sheep and goat) and Denmark (cattle sector), the measures supporting extensive 
grazing help to limit the stocking density but do not have other animal welfare provisions.  

-  regarding  measures  set  up  under  objectives  (1)(a)(ii),  (1)(b)  and  (1)(c),  several  measures  support 
production with an obvious enhancement of the animal welfare standards (limit of the stocking density, 
pastoralism, etc.). However, EQ2 showed that Article 68 failed overall to maintain the livestock sectors 
and is therefore expected to have little impact on animal welfare as well. 

7.6  ANSWER ON TERRITORIAL EFFECTS 

7.6.1  EXPECTED  DIRECT  AND  INDIRECT  EFFECTS  OF  THE 
SPECIFIC SUPPORT ON TERRITORIAL DEVELOPMENT  

Many  Member  States  did  intend  to  achieve  territorial  effects  by  implementing  Article  68  measures 
explicitly  targeting  specific  regions,  or  supporting  a  sector  traditionally  localised  and/or 
concentrated in specific regions, which can have effects on territorial development. These Article 68 
measures, identified in the notifications (targeting of a region with explicit territorial objectives) and 
during the interviews (targeting of a sector with implicit territorial objectives), have been presented in 
the Annex 5.3.1.  

The  Article  68  measures  with  territorial  objectives  were  mainly  measures  1(b)  addressing  specific 
disadvantages  of  vulnerable  sectors  listed  in  the  regulation  (dairy,  beef  and  veal,  sheepmeat  and 
goatmeat and rice). Other sectors were supported via a(ii) or 1(c) measures. In particular, the tobacco 
sector  was  supported  under  the  objective  1(a)(ii)  of  quality  improvement  in  Spain  and  Poland.  The 
support  1(c)  ensuring  against  land  abandonment  was  implemented  in  Hungary  for  the  tobacco,  the 
fruit/vegetables and the ruminant sectors. Finally, some Specific Support schemes with environmental 
objectives were also implemented for territorial purposes, particularly to avoid land abandonment in 
Italy and Spain. 

133 

 
 
Evaluation of Article 68 measures 

At the EU-level, the sectors supported for territorial purposes were: 

… supported by the following Member States:  Total of MS 
Sectors… 
Dairy 
BG, EE, FI, FR, RO, SK, SI, ES 
Sheep and goats  BG, FR, EL, HU, IT, PL, RO, ES 
Cattle 
Tobacco 
Rice 
Sugar beet 
Starch 
Durum wheat 
F&V 
Olive 
Cotton 

FI, EL, HU, LT, PL, RO, UK 
HU, PL, ES 
HU, RO 
IT, ES 
FI,  
FR,  
HU 
IT 
ES 

8 
8 
7 
3 
2 
2 
1 
1 
1 
1 
1 

The main territorial objectives stated were: 

o 

o 

o 

o 

to  maintain  sectors  in  regions  that  are  economically  vulnerable  (i.e.  LFA)  or  facing 
structural disadvantages (remote, mountainous or dry area), essentially dairy and meat cattle 
(ES, BG, EE, FR, RO, EL, LT, PL, SI, SK, UK) and sheep/goats (ES, BG, FR, EL, IT, PL, RO). 
In some of these regions, other sectors were also supported, such as olive oil (IT). 
to support sectors of strategic importance for employment in rural areas, i.e. labour-intensive 
sectors such as tobacco (HU, PL, ES), cotton (ES), sugar beet (ES) and rice (HU, RO). 
to  guarantee  the  supply  to  down-stream  industries,  by  supporting  industrial  crops  such  as 
starch potato (FI) and sugar beet (IT). 
to maintain a traditional heritage in rural areas (landscapes, know-how), e.g. durum wheat 
(FR), sheep and goat (PL, RO) and meat cattle (RO). 

The analysis conducted in the following parts assesses whether these measures actually had territorial 
effects in the Member States studied. It also analyses whether unexpected territorial effects arose from 
measures for which territorial development was not an objective of national authorities. 

7.6.2  IDENTIFICATION  OF  SUPPORTED  SECTORS  WITH 

POTENTIAL TERRITORIAL EFFECTS 

To assess the expected and unexpected territorial effects of Article 68 measures, highly supported 
NUTS 2 regions1 were selected in the Member States studied. Territorial impact can arise in regions if 
two conditions are met: a significant part of the sector has been supported (more than 50% of holdings 
and/or production) and significant effects of the measures were noticed on the viability of the supported 
productions (EQ2 results). Table 39, presented in Annex 5.3.3, enabled identification of the supported 
sectors with potential territorial effects: 
- 

In EL61, significant effects can be expected from the implementation of the Specific Support for 
heifers, suckler cows (1(b)) and durum wheat (1(a)(ii)); 
In ES43, major effects can be expected from the implementation of the tobacco quality support 
(1(a)(ii)); 
In FR62, FR71 and FR82, major effects can be expected from the implementation of the sheep/goat 
support (1(b)); 
In  HU21  and  HU32,  significant  impact  can  be  expected  from  the  support  for  dairy  farmers  in 
economically vulnerable areas or environmentally sensitive areas (1(1(b)); 
In ITC1, significant impact can be expected from the tobacco quality support (1(a)(ii)); 
In PL21 and PL31, significant impact can be expected from the tobacco quality support (1(a)(ii)). 

- 

- 

- 

- 
- 

1 In terms of number of beneficiaries and amount of budget granted per beneficiary. 

134 

                                                      
Evaluation of Article 68 measures 

7.6.3  CONTRIBUTION TO THE LOCAL AGRICULTURAL ECONOMY 

In the regions where supported sectors might have led to potential territorial effects, the contribution of 
these sectors to the agricultural production value has been calculated.  

Table 44: Share of supported sectors in the total agricultural production value in the regions observed 
2012 
1% 
4% 

2010 
1% 
3% 

2005 
1% 
4% 

2006 
2% 
3% 

2008 
1% 
5% 

2011 
2% 
4% 

2004 
1% 
4% 

2007 
1% 
4% 

2009 
2% 
4% 

Sectors supported  

Region 

EL61 – Thessalia 

Beef 
Durum wheat 
Total production value at 
basic price (M€) 
Tobacco 
Total production value at 
basic price (M€) 
Sheep and goat 
Total production value at 
basic price (M€) 
Sheep and goat 
Total production value at 
basic price (M€) 
Sheep and goat 
Total production value at 
basic price (M€) 
Dairy 
Total production value at 
basic price (M€) 
Dairy 
Total production value at 
basic price (M€) 
Tobacco 
Total production value at 
basic price (M€) 
Tobacco 
Total production value at 
basic price (M€) 
Tobacco 
Total production value at 
basic price (M€)  

ES43 - Extremadura 

FR62 – Midi-Pyrénées 

FR71 – Rhône-Alpes 

FR82 – Provence Alpes 
Côte d’Azur 

HU21 – Közép-Dunántúl 

HU32 - Észak-Alföld 

ITC1 - Piemonte 

PL21 - Małopolskie 

PL31 - Lubelskie 

2 915  2 904  2 127  2 247  2 442  2 407  2 513  2 348  2 525 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

2% 

2% 

2% 

-  2 833  2 972  2 955 

3.5% 

3.6% 

3.4% 

2.8% 

2.8% 

3.0% 

2.9% 

3.0% 

2.7% 

5 679  5 611  5 295  5 915  6 020  5 478  6 195  6 421  7 127 

0.9% 

1.0% 

0.8% 

0.7% 

0.8% 

0.8% 

0.8% 

0.7% 

0.7% 

4 989  4 747  4 899  5 240  5 131  5 105  5 316  5 703  5 951 

1.1% 

1.1% 

0.9% 

0.8% 

0.9% 

0.9% 

0.9% 

1.0% 

0.9% 

5 060  5 011  5 107  5 174  5 287  4 951  5 454  5 481  6 044 

7% 

1 012 

5% 

7% 

933 

7% 

7% 

7% 

6% 

6% 

6% 

6% 

6% 

977  1 016  1 298 

909  1 043  1 382  1 276 

7% 

6% 

5% 

5% 

5% 

5% 

5% 

2 114  1 840  1 878  2 118  2 707  1 897  1 826  2 403  2 571 

0.01%  0.02%  0.01%  0.01%  0.01%  0.02%  0.01%  0.01%  0.00% 

5 432  4 456  4 679  4 744  5 148  4 527  4 629  5 021  5 176 

-  0.57%  0.58%  0.56%  0.72%  0.79%  0.93% 

-  1 110  1 116  1 421  1 505  1 100  1 158 

- 

1.5% 

1.5% 

1.4% 

1.5% 

1.7% 

1.9% 

-  1 826  1 989  2 724  3 217  2 308  2 371 

- 

- 

- 

- 

- 

- 

- 

- 

Source: Eurostat 

As presented in the table above, the contribution to the agricultural production value of supported 
sectors with potential territorial effects is very limited (from 0.01% for the tobacco sector in Italy to 
6% for the dairy sector in Hungary over the 2009-2012 period). However, these figures must be handled 
with caution, given that the types of production supported might have been essential for the creation of 
value in more localised areas.  

When comparing the changes in the share of the agricultural production value of the “supported 
sectors  with  potential  territorial  effects”,  especially  comparing  the  periods  before  and  after  the 
implementation of the Specific Support schemes, two different trends can be seen1: 

-  No  changes  from  2004  to  2012:  beef  and  durum  wheat  in  Thessalia  (EL61),  tobacco  in 

Extremadura (ES43) and Piemonte (ITC1). 

-  A  slight  decrease  in  the  contribution  to  the  production  value  from  2004  to  2009,  then 
stabilisation  over  the  Article  68  implementation  period:  sheep  and  goats  in  Midi-Pyrénées 
(FR62),  Rhône-Alpes  (FR71)  and  Provence  Alpes  Côte  d’Azur  (FR82),  dairy  in  Közép-
Dunantul (HU21) and Eszak-Alföld (HU32). 

The EQ2 shows a positive impact of the Specific support on the viability of these sectors, therefore these 
results can be interpreted in the following way:  the delivering of Specific Support to these rather 

1 The trend regarding the contribution of the tobacco sector to the agricultural production value in Poland, which slightly increased from 2005 
to 2010, could not be assessed after the implementation of Article 68 because of a lack of data. 

135 

                                                      
Evaluation of Article 68 measures 

small  sectors  enabled  the  maintenance  of  the  production  value,  which  would  have  decreased 
otherwise. 

7.6.4  EFFECTS ON EMPLOYMENT IN SUPPORTED HOLDINGS 

The  territorial  effects  of  the  Article  68  measures  can  be  assessed  through  changes  in  the  level  of 
employment at regional level. The table below shows the evolution of the average work units registered 
by holding benefiting from Specific Support during the 2010-2012 period of implementation (all sectors 
and all types of Article 68 measures together), compared to the average work units calculated over the 
total number of holdings at regional level. 

Table 45: Employment in supported holdings compared to the regional trend (2010-2012) 

FR62 
(Midi-Pyrénées) 
FR71 
(Rhônes-Alpes) 
FR82 
(PACA) 

France 

AWU in supported holdings 
AWU at regional level 
AWU in supported holdings 
AWU at regional level 
AWU in supported holdings 
AWU at regional level 

ITALY 

Size of the 
FADN sample 
(2010/2011/2012) 

129/156/168 
310/296/299 
90/83/106 
184/198/204 
45/53/52 
62/60/58 

ITC1 
(Piemonte) 

AWU in supported holdings 
AWU at regional level 

101/83/175 
285/270/297 

SPAIN 

ES43 
(Extremadura) 

AWU in supported holdings 
AWU at regional level 

6/32/80 
422/435/435 

EL61 
(Thessalia) 

767  
(Alföld) 
768 
(Dunántúl) 

795 
(Mazowsze i 
Podlasie) 
800 
(Malopolska i 
Pogorze) 

GREECE 

AWU in supported holdings 
AWU at regional level 

10/17/85 
76/154/239 

HUNGARY 

AWU in supported holdings 
AWU at regional level 
AWU in supported holdings 
AWU at regional level 

POLAND 

53 
467 
63 
393 

AWU in supported holdings 

195/202/219 

AWU at regional level 

1563/1572/1625 

AWU in supported holdings 

140/114/120 

AWU at regional level 

331/299/323 

Source: FADN 

2010 

2011 

2012 

Trend  
2010 - 2012 

1.45 
1.39 
1.65 
1.62 
1.33 
1.35 

3.09 
2.32 

3.00 
1.76 

2.78 
1.75 

2.46 

2.51 

2.39 

2.78 

1.43 
1.40 
1.68 
1.61 
1.33 
1.32 

2.65 
2.24 

1.92 
1.90 

2.70 
1.46 

2.47 

2.50 

2.39 

2.69 

1.49 
1.43 
1.66 
1.59 
1.42 
1.42 

2.69 
2.31 

1.31 
1.89 

1.48 
1.43 

17.01 
5.00 
16.17 
5.73 

2.53 

2.47 

2.52 

2.64 

 
 
 
 
 
 

 
 

 
 

 
 

 

 

 

 

For  the  2010-2012  period,  the  holdings  benefiting  from  Specific  Support  registered  higher  levels  of 
employment  on  farms  than  the  regional  average,  according  to  the  analysis  conducted  on  the  FADN 
sample in the EU regions observed1 (except for two regions in Poland and Spain). This can be explained 
by the fact that Article 68 measures mainly supported livestock sectors that are more labour-intensive 
than arable crops. Significant differences were noted in Hungary (+12 AWU in Alföld region and +10.44 
in  Dunántúl  in  2012),  which  implemented  Specific  Support  requiring  a  high  level  of  employment 
(measures 1(c) targeting tobacco and fruit and vegetables). 

1 In Greece, Hungary and Poland, the FADN data are available at the scale of CATS regions, which are slightly larger than the NUTS 2 regions 
selected. 

136 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                      
Evaluation of Article 68 measures 

With regard to the AWU changes over time, the same trends were observed between supported holdings 
and the regional average from 2010 to 2012, except for 3 regions out of the 10 observed (2 Member 
States concerned): 

- 

- 

In ES43, the AWU by supported holdings strongly decreased (-1.69), whereas the regional 
AWU by holdings increased (+0.16). In this region, the sheep/goat and olive sectors benefiting 
from the Article 68 measure registered a decline in production value over the same period. 
In Poland, the AWU by supported holdings increased in the two observed regions (+0.07 
and 0.13), whereas the regional AWU by holdings decreased (-0.04 and -0.14). 

The conclusion is that the level of employment registered in supported holdings seems to be strongly 
linked  to  the  characteristics  (labour-intensive  livestock  sectors)  and  context  specific  to  the  sectors 
supported (climatic conditions affecting yields and thus needs for temporary labour force), rather than 
to the role played by Article 68. 

7.6.5  EXPERTS’  OPINION  ON  THE  POTENTIAL  TERRITORIAL 

IMPACT GENERATED BY ARTICLE 68 MEASURES 

Although the data did not enable a demonstration of significant territorial effects, the perceptions of the 
stakeholders interviewed is that the Article 68 measures played a key role in maintaining vulnerable 
sectors concentrated in small territories with few other alternatives, where they contributed to the local 
economy (cattle in FR, tobacco and sugar beet in IT, tobacco in ES, beef and starch potatoes in FI, 
tobacco and rice in HU, milk, tobacco in PL).  

137 

 
 
Evaluation of Article 68 measures 

7.7  EVALUATION JUDGEMENT  

7.7.1  EVALUATION JUDGEMENT ON ENVIRONMENTAL EFFECTS 

  Measures with environmental objectives 

In  the  whole  EU,  30  measures  were  implemented  under  objectives  (1)(a)(v)  activities  entailing 
additional  agri-environment  benefits  and  (1)(a)(i)  types  of  farming  important  for  the  protection  or 
enhancement of the environment of Article 68 (13 and 17 measures respectively). The great majority of 
the  practices/farming  systems  supported  under  the  environmental  objectives  of  Article  68  have  the 
potential, according to the literature, to generate environmental benefits. Moreover, they usually 
respond  to  well-known  environmental  issues,  if  not  at  the  local  level  at  least  at  the  EU  level: 
maintenance  of  crop  diversity  and  limitation  of  cereal  monoculture,  reduction  of  the  pressures  of 
conventional or intensive agriculture, maintenance of permanent grassland and their amenities (in terms 
of landscape, biodiversity and resources preservation). In this sense, the measures met the requirements 
of Article 68. 

The objectives (1)(a)(i) and (1)(a)(v) of Article 68 were thus implemented to support a great variety of 
practices and farming systems. Three situations can be observed: 

  Measures  whose  aim  was  to  help  develop  or  maintain  a  practice/system  well  known  for  its 
environmental benefits; these are usually former AEM (Pillar II), such as extensive and organic 
farming, extensive pasturing, etc.  

  Measures whose aim was to support an agro-industrial sector associated by the Member States 
with environmental benefits, such as fibre crops in the Netherlands, energy crops in Denmark, 
starch potatoes in Finland, grain and forage legumes in France, Finland, Spain, etc. 

  Measures that support environmentally friendly investment, which were less frequent but used 
in the Netherlands (e.g. equipment for precision agriculture etc.) and Denmark (support for planting 
organic fruit trees and berry bushes) 

All measures analysed supported practices that went beyond regulatory requirements. Moreover, when 
applicable, the requirements were clearly additional specifications to the GAEC and SMR. 

Objectives (1)(a)(i) and (1)(a)(v) of Article 68 entailed a different level of constraints: this raises a 
coherence issue and ultimately translates into a different level of impacts. The types of practices 
supported  under  one  or  the  other  objective  were  not  clearly  defined,  and  similar  measures  could  be 
designed under both objectives, although their level of constraints was different. The measures set under 
(1)(a)(v) had to be precisely justified (in terms of needs, area targeted and criteria, level of support) and 
to be approved by the EC. The measures that were transferred from the Pillar II AEM ended up under 
the ‘agri-environmental’ objective (1)(a)(v), and most of the measures aiming at supporting the agro-
industrial sectors were usually found under objective (1)(a)(i).  

The analysis of the environmental impact was made difficult by the lack of monitoring data. The level 
of  impact  was  estimated  based  on  the  literature review  crosschecked  with  analysis  of the  measures’ 
features and the interviews. The main findings are summarized here below: 

Level  of 
the 
impact 

Table 46: Main findings regarding the impact of the measures set up under objectives (1)(a)(i) and 
(1)(a)(v) 
  A positive impact is expected at least at the plot or farm level for 10 measures out of 14.  
  Some impacts  may have spread at the local or regional level when a specific area was targeted and 
when a significant eligible surface was supported, leading to a concentration of the effects. It is namely 
the case of Italy and Spain’s measures on crop rotation and, to a lesser extent, Portugal’s measure on 
low density olive groves maintenance. 

Expected 
impacts 

  At the parcel level, the environmental fields that were mainly concerned are soil (quality and structure), 

and biodiversity (entomofauna, soil fauna, flora). 

  In the cases where the measures had widespread effects and/or that an area with great ecological interest 
was targeted (e.g.: HNV in Portugal, Danish’s ‘S.3’ areas, Natura 2000 in Spain), one can also expect an 
enhancement of water quality, landscape and ecological continuity. 

138 

Evaluation of Article 68 measures 

Objective 
(1)(a)(v) 

Objective 
(1)(a)(i) 

Other 
factors 

  The potential effects at the national or transboundary scale are limited (e.g. climate change mitigation). 
However,  they  should  be  considered  in  addition  to  other  national  or  community  regulations  and  
schemes.  

The measures set up under objective (1)(a)(v) had the potential to generate better results mainly because: 

  Specific needs environmental were targeted, and the measures were better designed.  
  The effects were concentrated sometimes on areas with environmental interest.  
  The  measures  were  usually  implemented  in  continuity  with  former  AEM  (longer  period  of 

implementation, already known by the farmers). 

The measures implemented under objective (1)(a)(i) seemed to be less efficient and suffered from the lack of 
precision  of  the  goals  pursued  and/or  of  the  inadequacy  between  the  measures’  features  and  the  actual 
environmental issues/ farmers’ needs. 
Other factors may have impeded or, on the contrary, favoured certain practices, for instance: the favourable 
context  for  the  development  of  organic  farming  or  the  maintenance  of  pastures  (cross-compliance  rules, 
national regional or territorial schemes, RDP), the market (input or cereal price) and weather events have a 
great influence on the level of development of legumes. 

The great variety of measures thus leads to uneven outcomes, which are mainly dependent on the 
level  of  uptake  (level  of  support,  proper  targeting  of  the  beneficiaries)  and  the  design  of  the 
measure  (geographical  and  sectorial  targeting,  applicable  and  relevant  requirements  regarding  their 
effect on the environment, interaction with other schemes to optimise the effect). The time span of the 
measures is also essential to ensure a lasting effect. Therefore, it was considered that measures that 
took over former AEM were more likely to have an impact in the long run. This also raises the issue of 
the commitment period and the risk of opportunistic application. Indeed, Article 68 does not impose 
commitments of at least 5 years (like Pillar II AEM), which are nonetheless crucial for guaranteeing 
environmental resilience. To our knowledge, France is the only Member State that requires a 5-year 
commitment for the support for organic farming conversion under Article 68.  

Finally, the measures may also have suffered from a lack of monitoring of their effects. This makes it 
impossible to quantitatively estimate the impact on the different aspects of the environment and thus 
subsequently adjust the measures (e.g. change of the criteria, increasing the eligible area or refining the 
targeting). This may have limited the actual effect of all the measures. 

  Other measures 

Article 68 measures, set up under objectives (1)(a)(ii) quality, (1)(b) specific disadvantages and (1)(c) 
land abandonment and specific disadvantages in areas subject to restructuring, may have had a side 
effect on the environment either because they supported specific sectors that affect the environment, or 
because they  indirectly  induce  changes in  agricultural  practices. The  analysis  of  the  impact of these 
measures was focused on the support for bovine (meat and milk) and sheep and goat sectors for two 
reasons: these two sectors represent 60% of the measures implemented under objectives (1) (a)(ii), (b) 
and (c) (almost half of the expenditure), and the bovine sector has known controversial effects on the 
environment. 

Overall, the measures implemented under Article 68 have failed to maintain the production in the meat 
and milk sector and generally had very low effects on farm viability.  Consequently, they had no or 
very limited effects on the environment. However, there are some exceptions, with rather positive 
effects that are worth noting:  

  For the beef meat sector, the measures had a limited impact except in Finland (small farms with 
low negative environmental impacts), Greece (farms likely to be in extensive production systems), 
and France (organic and labelled calves and or farms with low negative environmental impacts).  
  For the milk sector, the measures had a limited impact except in Hungary (extensive milk system) 

and to a much lesser extent in France, Spain, and Finland.  

In the sheep and goat sectors, the measures had a limited impact on farm viability and on primary 
production, and thus limited impact on the environment. An exception is the French sectors, where a 
significant  positive  impact  on  viability  can  be  observed  but  the  measure  supported  both  extensive 
(Mediterranean regions) and intensive (western regions) indistinctly, and the environmental impact is 
thus mitigated. 

According to the analysis, Article 68 did not generate a negative effect on the environment on a 
great scale. Indeed, the major portion of the budget (for the environmental and non-environment 

139 

Evaluation of Article 68 measures 

objectives) was allocated to measures which have the potential to be beneficial to the environment 
at least at the plot or farm level:  

-  The ‘environmental measures’ either had no effects or had impacts at least at the plot and farm 
level. In a few cases, some of the measures were designed in such way that their effect on the 
environment is expected to spread at a local or regional level. However, the effectiveness of the 
environmental measures can be limited by the lack of monitoring, lack of clear environmental 
objectives and features that are not well defined. 

-  On the other hand, the measures set under ‘non-environmental objectives’ either had no effect 

or maintained a type of production with very low positive impacts on the environment.  

7.7.2  EVALUATION JUDGEMENT ON ANIMAL WELFARE EFFECTS 

The Netherlands designed four measures under objective (1)(a)(iv) to enhance animal welfare standards 
(above the statutory requirements), incite innovation and prepare farmers for the new coming national 
regulations. The support aimed at the different and complementary levels: housing improvement, market 
(certification),  management  practices  and  innovation.  Some  positive  changes,  in  relation  with  the 
measures, have been noted by the stakeholders; however. the absence of monitoring makes it difficult 
to judge the level of contribution of Article 68. 

As for the other measures, those set up under objectives (1)(a)(i) and (1)(a)(v) had a positive impact on 
the maintenance of extensive livestock rearing conditions in the Netherlands, Portugal, Denmark and 
France (measures for extensive pasturing and organic farming). As for measures set up under objectives 
(1)(a)(ii), (1)(b) and (1)(c), several measures have supported production with an obvious enhancement 
of the animal welfare standards (limit of the stocking density, pastoralism, etc.). However, the results of 
EQ2 showed that Article 68 failed overall to maintain the livestock sectors, and thus the overall impact 
on animal welfare was considered limited. 

7.7.3  EVALUATION JUDGEMENT ON TERRITORIAL EFFECTS 

The analysis of the objectives of Article 68 measures helped identify the measures granted to specific 
sectors with expected impact on the territorial development. Indeed, livestock sectors (dairy and meat) 
were supported as key sectors to address territorial issues, especially under measure 1(b) targeting 
LFA/mountainous  areas  (at  EU-level,  eight  Member  States  supported  livestock  for  territorial 
purposes). Other sectors supported for territorial concerns were tobacco, rice, sugar beet, starch, durum 
wheat, fruit and vegetables, olive and cotton. Most of them are also strategically important for supply to 
downstream industries, with potential economic and social impacts on the territories.  

However, the evaluation did not enable identification of significant effects of Article 68 measures 
on regional development. The territorial impact was examined in regions in which a significant part of 
the sector has been supported with strong effects on production viability (1). Ten regions2 meet these 
criteria  in  six  Member  States.  Limited  effects  were  noticed  in  these  regions,  either  in  terms  of 
contribution  of  supported  sectors  to  the  agricultural  production  value  or  on  the  level  of 
employment in supported holdings. 

In these regions, the supported sectors did not contribute significantly to the regional agricultural 
value. This shows that the supported sectors were either poorly developed or concentrated in a small 
area. In this last case, they might play an essential role for the creation of value at the very local level. 
These sectors, with very limited contribution to the production of agricultural value, registered flat rates 
over the 2010-2012 period and Specific Support enabled the maintenance of the production value 
that would have otherwise decreased. However, this had a low impact on the regional agricultural 
value.  

1 Results of EQ2 were used for that purpose. 
2 EL-Thessalia, ES-Extremadura, FR-Midi-Pyrénées, FR-Rhône-Alpes, FR-Provence Alpes Côte d’Azur, HU-Közép-Dunántúl, HU-Észak-
Alföld, IT-Piemonte, PL-Małopolskie, PL-Lubelskie 

140 

                                                      
Evaluation of Article 68 measures 

In  terms  of  employment,  in  these  ten  regions,  the  Specific  Sector  targeted  intensive  labour  sector. 
However,  the  AWU  level  registered  in  supported  holdings  seems  to  be  linked  to  the  regional 
context specific to the sectors, rather than to the role played by Article 68. 

The Specific Support scheme, while sharing similar objectives with the CAP measures granted 
under Pillar II, shows its limited capacity in addressing territorial issues. 

141 

Evaluation of Article 68 measures 

8  THEME 

5 

– 

MANAGEMENT 

AND 

ADMINISTRATION 

This theme assesses the efficiency of the Specific Support at EU and Member State levels. It comprises 
one evaluation question: to what extent have the national administrative arrangements, including 
control, been successful in targeting the aids and monitoring the impacts?  

8.1  COMPREHENSION OF THE QUESTION 

This theme and evaluation question should be analysed keeping in mind that one of the objectives of the 
2003  reform  was  to  simplify  the  CAP  and  reduce  the  administrative  burden  for  all  stakeholders 
(managing  authorities,  controllers  at  EC  and  Member  States  levels  and  beneficiaries).  The  SPS 
constituted  a  first  step  in  this  direction:  replacing  various  aid  schemes  with  a  single  scheme  was 
supposed to reduce the number of aid requests; the decoupling principle was also supposed to simplify 
the  monitoring  and  control  procedures.  Thereafter,  in  2005,  the  Commission  committed  itself  to  a 
simplification plan of the CAP (1), with two main axes: technical and policy simplifications. 

Given that Article 69 of the SPS Regulation and, later on, Article 68 of the Direct Payment Regulation 
introduced derogations to full decoupling principles and allowed Member States to reintroduce coupled 
payments (under specific conditions and with a limited ceiling), one may question the efficiency of these 
schemes and their coherence with the objective of simplifying the CAP. 

The EQ also seeks to go into more depth on certain aspects concerning the efficiency of the Specific 
Support, for which weaknesses were identified by the ECA Special Report n°10 (2013) or audits of the 
EC; these aspects include the administrative and control arrangements set up by Member States in order 
to properly target the Specific Support and ensure that its objectives are met, the monitoring systems set 
up by Member States, and the arrangements to deal with the risks of overlap.  

8.2  METHODOLOGY AND LIMITATIONS 

The method encompasses: 

(1) The evaluation of the administrative and control arrangements: Member States had to define 
administrative and control arrangements of the Specific Support respecting implementing rules defined 
in  Title  IV  of  Commission  Regulation  (EC)  No  1120/2009  and  Commission  Regulation  (EC)  No 
1122/2009. 

The  efficiency  of  the  administrative  arrangements  is  assessed  by  estimating  the  level  of 
simplicity/complexity of these arrangements  for managers and beneficiaries of the Specific Support. 
The additional work load for the beneficiaries resulting from the introduction of the Specific Support 
was examined through the list of the documents to be attached to the aid request and the type of  aid 
request to be filled in.  

As  regards  the  national  control  arrangements,  the  evaluators  thoroughly  considered  the  existing 
control  procedures  defined  in  the  national  legislation  for  the  administrative/on-the-spot  controls,  to 
assess  whether  they  comply  with  the  EU  requirements  and  provide  for  a  proper  assessment  of  each 
eligibility criterion.  

(2) Monitoring system: on the basis of information collected during the national studies, the evaluators 
assessed the quality of the set of indicators in order to monitor the effectiveness and the impacts of the 

1 COM(2005) 509.19.10.2005 

142 

                                                      
Evaluation of Article 68 measures 

measures, as well as the reliability of the information sources. Then, interviews with national authorities 
evaluated how the monitoring data were used for the decision-making process.  

(3)  Finally,  the  evaluators  assessed  the  arrangements  set  up  by  Member  States  to  guarantee  the 
coherence of the Specific Support with other EC or national support schemes, i.e. the procedures 
to avoid double-financing of operations supported under Article 68 and other national or EC measures.  

The main information sources were the national reports sent to the EC by Member States, interviews 
with  DG  Agri  and  the  interviews  and  information  (procedures,  etc.)  collected  during  the  National 
Studies. 

8.3  ANSWER TO EQ5 

8.3.1  EFFICIENCY  OF  THE  NATIONAL  ADMINISTRATIVE 

ARRANGEMENTS 

Table 47 hereunder describes the administrative arrangements set up by the studied Member States for 
the  management  of  the  Specific  Support  and,  when  relevant,  the  improvements  proposed  by 
authorities/farmers’ representatives.  

It shows that the management of the Specific Support required the setting up of specific administrative 
procedures at Member State level for each type of measure, in addition to the one existing for the SPS, 
as for any coupled support. While this did not contribute to the policy simplification, it did not result 
in significant additional administrative burden compared to the one existing before Article 68, 
given that almost all the measures already existed before Article 68 (see EQ1). Moreover, only limited 
specific  cases  are  considered  to  be  burdensome:  the  registration  of  lambs  in  Finland;  procedures  to 
control  insurance/mutual  fund  support  in  France;  administrative  controls  of  sheep/goat  database  in 
Greece; control of industrial crops in Spain; management of investment support in the Netherlands.  

The  table  also  shows  that,  as  a  whole,  the  degree  of  simplicity  of  the  procedures  (both  for  the 
beneficiaries and managing authorities) is mainly linked to the type of support: 

-  The  support  under  objective  (1)(b),  granted  per  hectare  /  per  animal,  is  quite  simple  to 
implement: in this case, the farmers only needed to tick a box in the SPS application form, while 
the authorities could cross-check the information via the IACS with other databases (i.e. animal 
identification  registers).  However,  the  burden  linked  to  the  control  /  completion  of  the 
identification  register  for  sheep  and  goat  was  quoted  as  significant  in  France,  Finland  and 
Greece.  

-  The support granted under quality/environment objectives (1)(a)(i), (a)(ii) and (a)(v), as well as 
(1)(b) when support is linked to quantity produced, is more complex to manage for both the 
authorities and the farmers, because it requires the collection of data on practices, on quantity 
delivered to processing industries or on quality parameters of the production). 

Specifically, the requirement of documents to prove compliance with the eligibility criteria generated 
burden for the farmers (submittal of a complete application) and additional costs for the authorities to 
process  the  requests  (1).  Nearly  all  these  documents  relate  to  purchases  by  farmers  (seed  invoices, 
varietal  tags,  investments,  etc.)  and  to  results  of  quality  analysis  (dairy),  others  attest  to  the  efforts 
undertaken  by  the  beneficiaries  (conversion  and  training  certificates,  animals  sold  to  the 
slaughterhouses, membership in a producers’ organisation, etc.). 

1 See the list of the supporting documents requested and the types of measures concerned in the Member States studied in Annex 6.2. 

143 

 
 
                                                      
Evaluation of Article 68 measures 

Identification of improvements 

particular 

No 
improvements  were 
requested by authorities or representatives 
of farmers. 

FI 

Table 47: Degree of simplicity of administrative arrangements and improvements proposed 
Degree of simplicity of the national administrative arrangements 
DK  The administrative burden is considered as limited for the authorities 
and beneficiaries thanks to the design of the measures, which ensures 
simplicity and low administrative costs: one-year measures, simple flat 
rates per hectare (support for extensive pasture, energy crops, fruit trees 
and berry bushes and crop rotation granted under obj. (1)(a)(i)) and per 
animal (beef support (1)(b)), application integrated in the common SPS 
application form, etc. 
According to the authorities, the administrative burden is low since the 
applicants  only  need  to  apply  once  (support  for  beef  and  milk  under 
measure 1(b)) or yearly to notify the area and crops concerned (support 
for starch potatoes and protein and oilseed crops under obj. (1)(a)(i)). 
Cross-checks are made to verify the number of eligible animals on the 
basis of the animal register, whereas the weight and age of slaughtered 
animals  are  verified  with  the  slaughterhouses  (support  for  quality  of 
slaughtered lamb under obj. (1)(a)(ii)). 
The representatives of lamb farmers highlighted the difficulties in using 
and completing the electronic register (small size of the sector, farmers 
not used to computers). 

The FI authorities regret that a small error 
by the applicants in the digital registration 
form led to total loss of the aid. 

regarding 

especially 

Difficulties  were  noticed  regarding  the 
registration of sheep and goats, for which 
the  burden  is  said  to  be  significant  but 
inevitable.  This  procedure  should  be 
simplified according to representatives of 
farmers, 
the 
notification  of  animals  sold,  because  it 
does not encourage the sale of lamb/sheep 
for meat. The producers must also provide 
forecasts of their production that could be 
difficult to estimate and must generally be 
reviewed at the time of the control. Lastly, 
the criterion of the minimum rate of born 
lambs  is  difficult  to  verify  other  than  by 
on-the-spot checks. 
The improved reliability of the sheep/goat 
databases  would  enable  administrative 
controls  to be  carried out  on  the  basis  of 
cross-checks, thus reducing the number of 
on-the-spot checks to be conducted by the 
control 
authority  OPEKEPE.  The 
sheep/goat  national  databases  could  be 
improved 
reliability, 
through  better 
accuracy  and  efficiency  of  the  controls 
carried  out  by  the  local  and  regional 
veterinary services at farm level. 

No particular improvements were required 
by  the  authorities  /  representatives  of 
farmers interviewed. 

FR  The  authorities  mentioned  that  Article  68  measures  did  not  generate 
additional  burden  because  they  were  designed  on  the  same  model  as 
coupled  support  existing  previously.  However,  in  the  case  of 
insurance/mutual  fund  support  under  obj.  (1)(d)  and  (1)(e),  the 
procedures  were  said  to  be  very  long.  The  procedures  to  collect 
evidence  among  third  parties  such  as  agro-processors  (support  for 
harvest  insurance,  support  for  tobacco  quality  under  obj.  (1)(a)(ii), 
support for dehydrated fodder legumes under obj. (1)(a)(i) and support 
for poultry under obj. (1)(a)(ii)) were mentioned as very effective. 
No  particular  burden  was  notified  by  the  representatives  of  the 
beneficiaries. Nevertheless, the complexity of the eligibility criteria for 
the sheep/goat support was quoted as a source of errors for producers. 

EL  The  administrative  burden  was  essentially  generated  by 

the 
administrative control of specific requirements of some support, e.g. the 
control of the invoices and seed labels (support for durum wheat quality 
under obj. (1)(a)(ii)). Moreover, the increasing number of applicants for 
the durum wheat and olives quality support under obj. (1)(a)(ii) required 
the  implementation  of  a  database  recording  the  AGRO  and  organic 
certifications.  Farmers  applying  for  this  support  subcontracted  the 
paperwork generated by these certifications to agro-consultants.  
Regarding support for heifers and suckler cows under obj. (1)(b), the 
administrative  procedures  were  simple:  examination  of  certificates 
from the Veterinary Services and KGVZ provided by the producers and 
cross-checks  with  different  databases  (Bovine  identification  register, 
KGVZ,  veterinary  services).  However,  in  the  case  of  the  support  for 
sheep and goats in mountainous areas and LFA under obj. (1)(b), the 
lack  of  update,  accuracy  and  efficiency  of  the  registry  (database) 
required the carrying out of on-the-spot checks on an increased number 
of farms. 
For  administrative  authorities, 
the 
management of Article 68 measures is the same as that for any coupled 
aid. The administrative controls are simplified by the IACS, especially 
with regard to livestock Specific Support (support for certified beef and 
support for quality milk products under obj. (1)(a)(ii); support for the 
economic  viability  of  sheep  and  goat  farms  and  support  for  specific 
disadvantages  in  rearing  suckler  cows  under  obj.  (1)(b))  and  the 
payments  per  hectare  (support  for  grain  legumes  quality  and  cotton 
under obj. (1)(a)(ii); support for crop rotation in non-irrigated areas; and 
support to specific agricultural activities in the nuts sector under obj. 
(1)(a)(v)).  Regarding  industrial  crops  (i.e.  cotton,  tobacco  –  obj. 
(1)(a)(ii)),  the  administrative  burden  is  significant  given  the  large 
number of stakeholders involved in the control (processing industries, 
farmers’ organisations, farmers). 

the  burden  associated  with 

ES 

144 

 
Evaluation of Article 68 measures 

For  farmers,  the  application  consisted  only  in  filling  in  an  extra 
document attached to the single application form and in attaching the 
required evidence when necessary, which was quite simple. 

HU  According  to  the  authorities,  no  additional  burden  arose  from 
implementation of the Art. 68 measures, compared to before. Regarding 
farmers, they only had to fill in an extra page on the SAPS application 
form,  which  did  not  represent  a  significant  burden.  Moreover,  they 
benefited from Chamber of Agriculture assistance. 

IT  According to the authorities, the implementation of Article 68 generated 
the  same  administrative  burden  as  any  coupled  aid.  However,  the 
administrative  controls  were  simplified  by  the  IACS,  which  enables 
cross-checks  with  other  databases  (identification  of  the  parcels, 
registration  of  payment’s  entitlements, 
farmers’  previous  aid 
applications, animal identification registers). Most criticism relates to 
the work generated by the procedures to ensure demarcation with Rural 
Development measures. 
For farmers, there is no other administrative requirement than a tick in 
the single application form.  

NL  According  to  the  authorities,  the  support  granted  per  head  (I&R  for 
sheep/goats under obj. (1)(b)) or per hectare (water transport allowance 
support  and  hemp  and  flax  support under  obj.  (1)(a)(i))  were  easy  to 
implement, and applications for it were integrated into the SPS single 
application form. The procedures for the investment measures (under 
obj. (1)(a)(i)) were more complicated and required farmers to advance 
the funds and install equipment within one year. 

PL  No additional burden was mentioned, neither by the authorities nor the 
farmers. According to the authorities, the implementation of Article 68 
measures was underpinned by the whole SAPS management and control 
system.  Regarding  the  support  granted  to  farmers  rearing  sheep  in 
south-eastern Poland, the representatives of farmers regretted that the 
website did not always enable application online.  

No particular improvements were required 
by  the  authorities  /  representatives  of 
farmers interviewed. 

the 

concerns 

Complicated procedures were highlighted 
by the authorities for the olive oil quality 
support under obj. (1)(a)(ii) and the agri-
environmental support under obj. (1)(a)(v) 
.  E.g.  the  certification  bodies  sometimes 
refused to carry out controls to deliver the 
required certificate needed to apply for the 
olive oil quality measure, stating that their 
expertise 
certification 
process  (biological  farming)  and  not  the 
product certification (olive oil). 
According  to  the  authorities,  Article  68 
was  not  adapted  to  support  investments. 
They  reckon  that  using  Article  68  to 
support investments in manure processing 
installations,  sustainable  storage  and 
precision  agricultural  equipment  turned 
out to be a bad decision. 
Farmers’  representatives  (cattle,  sheep) 
suggested 
the  single  day  when 
animals must be held on farms for controls 
(i.e.  in  this  case  31  May)  should  be 
replaced by a longer holding period as in 
other MS. Indeed, it is not possible to carry 
out all the controls on that single day, and 
payments  are  made  on  the  basis  of 
documentary controls of eligible animals, 
with  no possibility  for  the  verification of 
the register. 

that 

Source: National studies 

8.3.2  EFFECTIVENESS  AND  EFFICIENCY  OF  THE  NATIONAL 

CONTROL ARRANGEMENTS 

The  EU  provisions  for  the  implementation  of  administrative  control  and  on-the-spot  checks,  to  be 
considered  in  this  section,  are  described  in  Annex  6.1.  The  evaluation  also  relies  on  ECA  findings. 
Indeed, the ECA Special Report n°10 (2013) identified several weaknesses regarding the following 
national control arrangements: 

- 

In  France  and  Italy,  the  procedures  implemented  did  not  enable  a  re-verification  of  the 
administrative  controls  a  posteriori  for  further  examination  of  the  compliance  with  the 
eligibility criteria. As regards the on-the-spot checks, important supporting documents had not 
been collected and kept in Greece and Spain. 

-  The minimum rate of on-the-spot checks to carry out has not been observed in Greece (2010), 
where the authorities conducted only half of the on-the-spot checks required by the regulation 
for the control of the sheep/goat support. In Italy, the minimum rate was not achieved in control 
of the insurance support, mainly because of the total lack of checks in one region.  
In  Italy,  in  the  case  of  insurance  support,  the  control  of  other  stakeholders  was  confined  to 
producer organisations. No verification of the insurers or the final beneficiaries was carried out. 
-  As regards the timing for on-the-spot checks to be carried out, in Greece (2010), ¾ of the checks 
conducted to control the sheep/goat measure were outside of the compulsory animal retention 
period. 

- 

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Evaluation of Article 68 measures 

The  ECA  report  also  underlined  several  cases  of  administrative  and  control  weaknesses  that  led  to 
payment  errors/dysfunctions  (1),  as  well  as  cases  of  weaknesses  related  to  the  control  of  the 
compliance with the eligibility criteria, especially regarding: 

-  The  fodder  legume  aid  in  France  –  no  provision  to  verify  at  the  administrative  level  the 
compliance with the eligibility criterion that requires farmers to plant fodder on areas previously 
planted with COP; further, the on-the-spot checks were not systematically documented on this 
aspect, which increased the risk of high rate undetected errors. 

-  The aid for sheep producers in France – no provision to verify at the administrative level the 
compliance with the productivity ratio, which is therefore only verified by on-the-spot checks. 

-  The insurance support in Italy – no control system relying on insurer’s data and checks. 
-  Crop rotation in Spain and Italy – on-the-spot checks on area aid were conducted too late to 

allow key verification on the crop rotation. 

8.3.2.1  Adequacy  of  national  control  arrangements  with  the  regulatory 

requirements 

The analysis of the national control arrangements set up by the Member States for the control of the 
Article 68 measures reveals that national authorities generally respected the EU requirements and 
implemented specific procedures to verify the compliance with eligibility criteria. The evaluation 
also identified weak control arrangements relating to 13 measures implemented in 6 Member States. 

Indeed, the evaluation considers to what extent the national control arrangements (presented in Annex 
6.3) guaranteed that: 

- 
the eligibility criteria are verified for 100% of the applicants during the administrative controls;  
- 
the relevant supporting documents are requested; 
- 
the controls are carried out at the level of other services / bodies / organisations when relevant; 
-  at  the  level  of  on-the-spot  checks,  the  eligibility  criteria  are  controlled  in  a  way  that  enables 
verification  of  the  statements  by  farmers  and  of  certification  documents  provided  in  the  aid 
application.  

It turns out that the national control arrangements were generally  adequate for guaranteeing sound 
controls  of  the  beneficiaries  of  Specific  Support,  in  compliance with the  EU  requirements  (see 
Annex 6.4), except with regard to 13 measures implemented in 6 Member States (DK, EL, ES, FR, HU, 
IT). The results of the analysis (2) confirm the conclusion of the ECA report regarding the national 
control arrangements for the control of the beneficiary eligibility, which was assessed as weak from a 
legal point of view for 13 measures. In these cases, the national control arrangements do not provide 
explicit and comprehensive guidelines to verify compliance with eligibility criteria.  

Moreover,  in  7  out  of  the  13  identified  cases,  the  national  control  arrangements  did  not  allow  for 
verification of the criteria either at the administrative level or at the time of on-the-spot checks, thus 
increasing  the  rate  of  potentially  undetected  errors.  The  measures  and  criteria  concerned  are  the 
following: 

-  Support  for  the  establishment  of  perennial  energy  crops  (DK):  no  provision  to  verify  the 

establishment of new plantations from 1st January to 15th June; 

-  Crop rotation in drylands (ES): no provision to control the ‘non-irrigated plots’ criterion; 
-  Support for protein crops and fodder legumes (FR): no provision to control the date of sowing 

and the harvest conducted after lactic ripeness; 

-  Support for durum wheat quality (FR): no provision to control the date of sowing; 
-  Poultry  support  (FR):  no  provision  to  verify  the  100%  vegetal  feeding  without  growth 

promoters; 

1 Errors in the bovine database (IT) used to calculate the aid to the cattle sector; refused payment for eligible animals in the dairy sector aid 
(ES); payment of additional component of aid on the basis of a criterion opposed to the one designed for the measure (ES);  subsidising of 
premiums corresponding to insured values set by the beneficiary (no reference to actual past production or any form of justification) (IT). 
2 It must be noted that the analysis is based on the information collected during the National Studies, which cannot guarantee a comprehensive 
picture of the legislative modalities of the Member States examined. 

146 

                                                      
Evaluation of Article 68 measures 

-  Rice support (HU): no provision to control the date of sowing and the growing conditions until 

flowering; 

-  Support for specific agricultural activities entailing additional agri-environment benefits (IT): 
no provision to verify that the rotation has been implemented during the two-year period.  

However, according to the managing authorities interviewed, these points were actually verified during 
on-the-spot checks. 

Then, the evaluation also underlined cases in which supporting documents could have been requested 
or a third party involved for more rigorous controls or re-verification of the eligibility a posteriori, for 
8 measures in 6 countries (DK, ES, FI, FR, HU, IT).  

8.3.2.2  Efficiency of national control arrangements 

The burden generated by control procedures has been partly analysed in section 8.3.1, which considers 
the administrative procedures (including primary level control). This section focuses on secondary level 
control, i.e. physical controls conducted on-site.  

Table 48: Burden noticed for on-the-spot checks of Article 68 measures in Member States studied 

EL 

ES 

FR 

IT 

NL 

o  Support for sheep and goats in LFA / mountainous areas  
The following requirements were difficult to ensure: 
-  increased rate of farmers subject to OTSC to 10% of the beneficiaries because the computerised database for 
animals does not offer the level of assurance and implementation necessary for the proper management of the aid 
schemes;  
-  at least 5% of all animals eligible subject to on-the-spot checks; 
-  100% on-the-spot checks conducted during the retention period  
-  verification of the number of animals present on the holding compared to the number of animals entered in the 
registers. 
These difficulties partly resulted from the EC requirement to increase from 5% to 10% the percentage of farmers 
to be controlled because of the low degree of credibility of the computerised database.  
In addition to the large number of beneficiaries to control, the implementation of on-the-spot checks was very 
time-consuming given the nature of the livestock units and the LFA / mountainous areas, as well as the practices 
(extensive grazing) concerned. All these regulatory and physical constraints had negative impact on the OTSC 
efficacy. 
o  Support for specific disadvantages in rearing suckler cows 
The requirement of keeping cows on farm over six consecutive months led the authorities to ask the EC for a 
derogation to reduce this period in the event of drought (or other adversities), because the measure was very costly 
for  farmers.  The  FEGE  noted  that  a  reduction  of  the  6-month  period  would  be  more  appropriate  and  would 
facilitate the procedure. However, this relates to the measure’s design and EU requirements, not to the efficiency 
of the national arrangements. 
o  Mutual fund / crop insurance 
 These  measures  led  to  additional  burden  because  the  controls  are  complex  to  carry  out  among  the  various 
stakeholders, i.e. private companies such as insurance companies, the mutual fund organisation and its different 
partners. This might result in an increased risk of errors. 
o  Sheep/goat support: verification of ewe productivity rate on the basis of farmer statements, and counting of 
eligible animals in the absence of an ovine/caprine identification database. 
o  Agro-environmental  measure:  the  support  implied  a  two-year  rotation  in  the  same  parcel,  which  can  be 
cropped by different farmers from one year to another (rent or other forms of exchange), therefore complicating 
the control. 
o  Animal Welfare III - Management activities (2011-2012): Control bodies had trouble assessing whether the 
measure  was implemented properly. No easily assessable criteria. Most of them depend on when the check is 
carried out (the presence of a foraging box doesn’t necessarily mean that it is supplied regularly). These difficulties 
led to an increase in the rate of OTSC conducted. 

Source: National case studies 

On-the-spot checks of specific Article 68 measures led to significant costs for the national authorities in 
Greece, Spain, France, Italy and the Netherlands, generated by the verification of specific eligibility 
criteria,  the  control  of  third  parties,  the  control  of  livestock  to  be  conducted  during  the  minimum 
retention period and the minimum rate of beneficiaries to control. In Denmark, Finland, Hungary and 
Poland, no particular burden was generated by on-the-spot controls. 

If  the  implementation  of  these  on-the-spot  checks  has  been  heavy  in  Greece,  Spain,  France  and  the 
Netherlands,  no  room  for  improvement  has  been  mentioned  on  this  aspect.  In  the  case  of  Greece, 

147 

Evaluation of Article 68 measures 

however, the burden related to control of the support for sheep and goats in mountainous areas and LFA 
could have been reduced by an upgrade of the reliability, accuracy and efficiency of the on-the-spot 
checks implemented by the local and regional veterinary services, and also by an update of the livestock 
database and herds books, through more efficient on-site inspections from the veterinary services at the 
farm holdings. If this had been done, the reliability of the databases would have been higher and on-site 
controls of the OPEKEPE could have been reduced. 

8.3.3  EFFECTIVENESS  AND  EFFICIENCY  OF  THE  MONITORING 

SYSTEM 

This section examines the arrangements set up in Member States studied to monitor the results and the 
impacts of Article 68 measures. It considers the set of indicators, as well as the quality of the monitoring 
system (efficient collection and reporting of data). 

EU financial regulation (1) requires that policies implemented under the EU budget be monitored by 
performance indicators that are relevant, accepted, credible, easy and robust (RACER). However, the 
ECA  report  noted  that  Member  States  did  not  implement  a  ‘proper  systematic  monitoring’  of  the 
performance of Article 68 measures. As a consequence, it is difficult to assess the results of the measures 
and to what extent they made it possible to achieve the stated objectives.  

Particularly, as regards the Article 68 measures implemented under objective (1)(a)(i), EU regulation 
No 1120/2009 specifies that the types of farming supported must provide non-negligible and measurable 
environmental benefits. The Member States should thus document the environmental impact resulting 
from the implementation of the measure. About the measures implemented under objective (1)(b), the 
Member States were required to monitor the level of production of the sectors supported, in order to 
comply with the regulation’s provision of not exceeding the current level of production (Art. 68(3) of 
Reg. 73/2009). 

8.3.3.1  National  monitoring  systems  implemented  in  Member  States 

studied  

8.3.3.1.1  Monitoring of the implementation 

The Member States studied are collecting input/output data related to the implementation of Article 68 
measures (2). These data are extracted from the IACS and concern the payments granted, the number of 
beneficiaries, the number of hectares or the number of animals supported through Article 68 measures 
(3). These indicators attest to the efforts made by the Member State to support a sector or a practice. 
However, they don’t provide information on the outcomes of the support, or on the extent to which it 
contributes to achieve the objective targeted.  

Authorities  in  Denmark,  Greece  and  Spain  mentioned  that  they  reviewed  /  improved  measures  (4) 
following the information provided by the monitoring system. In these Member States, the input/output 
data were used to assess the uptake of the measure and eventually adapt the level of payment to make 
the measure more/less attractive.  

1 Council Regulation (EC, Euratom) No 1605/2002 of 25 June 2002 on the financial regulation applicable to the general budget of the European 
Communities. 
2 Although in France the authorities did not provide the evaluators with either the input data for years subsequent to 2012 or the output data on 
the number of hectares or on the number of animals supported. 
3 The data are requested by the EC in the annual reports and should include results of all controls implemented under Pillar I and II (Art. 84, 
Reg. (EC) N° 1122/2009)  
4 Support to perennial energy crops in DK; Support to durum wheat and olive sectors in GR 

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8.3.3.1.2  Monitoring of the results and impacts 

According  to  the  interviews  during  national  studies,  very  few  Member  States  (EL,  ES  and  NL) 
implemented  a  monitoring  system  based  on  outcome/results  indicators,  and  this  was  only  for  some 
measures. 

EL 

ES 

NL 

Table 49: Monitoring systems set up in Member States studied 

In EL, several efforts were made to monitor the effects of the measures implemented, by collecting data on the 
evolution of the number of farms / surfaces labelled under organic and AGRO certifications in durum wheat / 
olive sectors, which can be considered as a basic performance indicator. However, it does not make it possible to 
measure increase in quality, which was the objective of the measures. As the authorities explained, ‘No monitoring 
system  had  been  established  regarding  the  technical  quality  parameters  of  olive  oil  or  table  olives,  since  no 
particular threshold to achieve had been established’, thus underlining the need to formulate SMART objectives 
in order to monitor the results. National institutes provided data that could have been enhanced in the monitoring 
system. For durum wheat, for example the Ministry’s ‘Centre of Control and Standardization of Cereals’ together 
with the Cereals Institute of NAGREF-ELGO DIMITRA collected and analysed samples of durum wheat as well 
as other cereals for quality parameters. As regards the livestock measure, data on the evolution of the livestock 
population and indigenous breeds are collected from the Veterinary Services, the KGVZ, the Registries for the 
Bovines or the Registries of ELOGAK (Hellenic Organisation for Milk and Meat) of ELGO ‘DIMITRA’. 
In ES, data on the quality of the tobacco supported are collected and should be enhanced in the monitoring system, 
since the tobacco processing companies were in charge of sending the data on the quality of tobacco delivered by 
the beneficiaries of the Specific Support for tobacco quality. 
In  NL,  the  monitoring  system  concerned  the  animal  welfare  measures  for  sustainable  livestock  housing  and 
alternative floors in calf husbandry. Indeed, the number of fully sustainable houses is monitored annually in NL 
to meet the national objective of 8% of the cattle, pig and poultry houses being fully sustainable in 2014. Regarding 
the investment scheme in calf husbandry, outcomes generated by the measure have been monitored and should be 
available in 2016 according to the authorities. 

Source: National case studies 

In 2012, ten Member States did draft a first impact assessment of the Article 68 measures implemented 
from 2009 through 2011. The information was provided in mid-term reports sent to the EC by 1 October 
2012, according to Art. 51(4) of Reg. 1120/2009. In these mid-term reports, the EC required the Member 
States  to  provide  for  an  evaluation  of  the  measures’  outcomes  in  relation  to  the  objective  assigned, 
including a judgment on the level of achievement. Among the Member States that submitted a mid-term 
report on the implementation of Specific Support (AT, BE, CZ, ES, IT, UK, DK, EL, FI, IE), most of 
them  presented  indicators  for  the  performance  assessment  of  Article  68  measures.  Especially,  five 
Member  States  monitored  the  evolution  of  the  production  supported  under  objective  (1)(b).  The 
measures for quality improvement of agricultural products were assessed using indicators such as the 
number of farmers joining quality schemes (BE), the evolution of the number of animals registered in 
herdbooks (IT) or the qualitative characteristics of the production (EL). Measures with environmental 
objectives were monitored using relevant indicators on biodiversity, e.g. National Birds Species Index 
(DK)  and  indicators  measuring  the  environmental  benefits  resulting  from  the  change  in  practices 
implemented, e.g. nitrogen usage and leaching (DK). It must be noted that these reports did not follow 
the same template and that their content was of varying quality.  

Overall and indirect/unintended effects of the measures on social, economic and environmental aspects 
have not been monitored, according to the national authorities of the Member States studied.  

8.3.3.2  Collection of data and reporting system implemented in Member 

States studied 

In all the Member States studied, the monitoring data were collected from the IACS and corresponded 
to the information provided by the applications submitted to the administrative controls (input/output 
data). The sources of the few outcome and impact indicators are data provided by processing companies 
(ES), national institutes (EL) or universities (DK, NL).  

149 

 
 
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8.3.4  EXCLUSION OF THE RISK OF DOUBLE FINANCING 

According to EU Regulation 1120/2009, ‘similar measures should not be financed twice under both 
Specific  Support  and  other  Community  support  schemes.  Due  to  the  diversity  of  choices  offered  for 
implementing the Specific Support, the responsibility of ensuring the consistency should otherwise be 
left to the Member States’ (Recital 25 of Reg. (CE) No 1120/2009). 

Possible cases of overlapping were identified at the time of the notification of the measures. Then, it 
was the responsibility of Member States to set up specific rules or mutual exclusion procedures. In the 
Member States studied, the management of the risk of double-financing appeared to be properly set and 
effective for most Article 68 measures. Only few cases of potential overlaps were identified, for which 
no procedure had been set up or where Member States authorities considered that the objectives were 
different, against the advice of the EC (see EQ1). 

According to the interviews with the national authorities, the avoidance of double-financing has been 
effectively translated into procedures relating to applications by farmers (except for Italy, where the 
procedures were not clearly identified, preventing the evaluation team from judging their effectiveness). 
This  partially  contradicts  the  ECA  conclusion  that  French  and  Italian  authorities  were  not  able  to 
document the existence of procedures to avoid double-financing (1): information gathered during the 
French National Study showed that the risk of duplication was effectively managed and avoided.  

8.4  EVALUATION JUDGMENT ON EQ5 

The  workload  associated  with  the  management  of  Article  68  measures  is  due  to  the  specific 
administrative procedures that were set up by the Member States for each support in addition to the SPS, 
as with the management of any coupled aid. The design of the measure plays a significant role in the 
degree of complexity of the procedures to be implemented in order to manage the administrative controls 
of  applicants:  the  managing  authorities  made  efforts  in  order  to  simplify  eligibility  criteria  and 
conditions  in  order  to  avoid  complexity  in  the  procedures.  However,  environmental  and  quality 
measures  tended  to  include  more  stringent  requirements  than  the  other  types  of  measures,  and  this 
resulted in additional burden for all parties involved.   

The national control arrangements were effective to control the Specific Support and ensure the 
verification  of  the  eligibility  criteria.  However,  the  National  Studies  revealed  that  the  legal 
provisions could be improved to ensure that the control targeting is effective for 13 measures out of 
the  80  examined  during  the  evaluation,  in  six  different  Member  States.  The  analysis  of  the  errors 
registered  during  on-the-spot  checks  shows  that  a  limited  number  of  measures  (11  measures  in  5 
Member States for the 80 examined measures) generated more difficulties for beneficiaries in terms of 
justifying that they comply with the eligibility criteria.  

As regards the efficiency of on-the-spot checks, the implementation of Specific Support required the 
control bodies to verify additional criteria during inspections: the verification on site of some of these 
eligibility criteria was reported as burdensome in 4 Member States (EL, IT, FR, NL) out of the 9 
studied. 

As stated by the ECA in its report on Specific Support, the evaluation confirms that indicators used to 
monitor  the  effects  of  Article  68  measures  are  weak  or  inadequate.  Indeed,  the  major  elements 
available consist of the number of beneficiaries / hectares / animals supported, whereas no information 
is collected to assess the extent to which the objective is achieved (the quality is improved for measures 
under (1)(a)(ii), the environment is preserved or restored (measures under (1)(a)(i) and (a)(v)), etc.). 
Moreover, given that one objective of Specific Support under Article 68 measure was to alleviate the 
consequences  of  reforms  in  particularly  sensitive  sectors  (2)  (Article  68  (1)(b)),  it  would  have  been 

1 The ECA report focused for its analysis on 13 measures implemented in Greece, Spain, France and Italy. 
2 Recital 35, Reg.(EC) 73/2009. 

150 

                                                      
Evaluation of Article 68 measures 

particularly relevant for Member States to consider the results of such support and assess to what extent 
the sector/regions targeted did recover from the past reforms. However, in 2012, some Member States 
drafted a first impact assessment of the Article 68 measures, including performance indicators, presented 
in the mid-term report sent to the EC by 1 October 2012.  

When potentially overlapping measures were identified, the Member States were responsible for setting 
up the corresponding procedures. According to the authorities, procedures to avoid double-financing 
have been implemented at the stage of administrative controls of the applicants in all Member 
States studied (1). 

1 In Italy, the procedures were not clearly identified, preventing the evaluation team from judging their effectiveness. 

151 

                                                      
Evaluation of Article 68 measures 

9  THEME  6  –  RELEVANCE  AND  EFFICIENCY  OF 
ARTICLE  68  AS  AN  OPTIONAL  INSTRUMENT  IN 
THE CAP 

The last evaluation theme assesses whether the optional character of Article 68 is relevant and efficient 
within a common policy. It includes the following evaluation question: to which extent has the optional 
character  resulted  in  rebalancing  direct  support  to  curb  sectoral  and  local/regional/national 
disadvantages and needs? 

9.1  COMPREHENSION OF THE QUESTION 

The first pillar of the CAP, and especially its core measure, the SPS, is a set of measures that was similar 
for all Member States. Article 68 can be considered as relatively odd from this point view because it 
allowed  Member  States  to  define  and  implement  measures  tailor-made  to  local  needs  or  ‘sensitive’ 
sectors and finance them from the CAP budget. Moreover, it reintroduced the possibility for Member 
States to establish coupled payments for certain sensitive sectors or disadvantaged areas, to be financed 
in principle by a reduction of the SPS budget. Finally it introduced a certain complexity in the CAP, at 
least at Member State level, given that each and every measure was specific to each Member State that 
chose to apply it. 

This last theme and EQ deal with this optional character of Article 68, that is to say the fact that the 
Member States could decide to apply it or not, and could establish the type of measure of their choosing. 
It deals thus with the fact that measures for supporting certain sectors or objectives were applied by 
some  Member  States  but  not  all,  which  could  raise  relevance  and  efficiency  issues.  Both  issues  are 
particularly interesting to assess, given that the new CAP reform extended these types of measures via 
the optional coupled support and, in a way, the CAP greening measures.  

In terms of relevance, the theme seeks to assess whether it was relevant to give to Member States the 
possibility to design tailor-made measures in order to meet specific local/regional/national needs that 
could not have been met by other ‘generic’ measures of the CAP (in the sense that they applied to all 
Member States). The issue is also to assess whether it was relevant or not, considering the results of the 
Specific Support, to reduce the SPS unitary payments in order to finance Article 68 measures. When 
Article 68 was used to compensate for ‘market failures’ (e.g. achieve environmental or animal welfare 
objectives),  it  in  principle  did  not  raise  major  relevance  issues;  however,  when  it  was  used  for 
competitiveness objectives, it did raise major relevance issues because of the possibility of the optional 
character of Article 68 generating market distortions between those Member States that applied Article 
68 and those that did not. Furthermore, another issue is that reducing the Single Farm Payments affects 
the income of farmers that are not concerned by specific needs. 

In terms of the efficiency of the Article 68 optional character, the issue is twofold: firstly, the question 
seeks  to  assess  whether  the  budgetary  expenditures  for  the  Specific  Support  were justified  given  its 
results and impacts. Here deadweight effects must be estimated. Secondly, it seeks to assess whether the 
additional burden and administrative costs that arose from the Article 68 implementation were justified 
considering the results and impacts of the Specific Support.  

9.2  METHOD,  CRITERIA,  INDICATORS  AND  DATA 

SOURCES 

This concluding theme builds on the analysis of all the previous EQs.  The relevance of the optional 
character of Article 68 is discussed based on: 

152 

Evaluation of Article 68 measures 

- 
- 

- 

- 

the results of EQ 1 and 5 regarding the relevance of the design of the measures; 
the results of EQ 2, 3 and 4 regarding the effects of the measures compared to the needs they 
were supposed to cover; 
the analysis of the supplementary role of the measures, which is done through the summarizing 
of EQ1 concerning the coherence of the measures; 
the analysis of the financial provisions chosen by the Member States, given that they could 
finance Article 68 via a reduction of the Single Farm Payments or by using unspent SPS funds, 
meaning that their choices might affect the level of the Single Farm Payments. 

In terms of efficiency, the following criteria can be discussed in order to provide elements for judging 
the efficiency of Article 68: 

-  whether or not Article 68 generated additional administrative burden and costs not only at 

the national level (analysed in EQ5) but also at the EC level; 

-  whether or not deadweight effects (1) arose (i.e. effects that would have occurred even in the 

absence of Specific Support); 

-  whether or not the budget and administrative burden and costs were proportionate to the 
results and impacts of the Specific Support. EQ6 will thus use the results of EQ5 and compare 
them to the results of the Specific Support derived from EQ2, 3 and 4. 

9.3  ANSWER TO EQ6 

9.3.1  RELEVANCE OF REBALANCING DIRECT SUPPORT TO CURB 

SPECIFIC NEEDS 

9.3.1.1  Financial provisions used to finance Article 68 

In the ten Member States where a National Study was carried out, at least 37% of the expenditure 
between 2010 and 2013 was financed from unused SPS funds (see table next page) (2): generally, 
Member States financed the measures by mixing the possibilities offered by the regulation (unused funds 
– i.e. unspent funds arising from the SPS execution or retention on the national reserve, sectoral retention 
and transition from previous Article 69). France and Portugal made use of the provision allowing the 
financing of Article 68 by reducing payments still coupled (suckler cow premium and/or sheep and goat 
premium). 

However,  several  significant  measures  in  budgetary  terms  were  fully  financed  from  unused  funds 
(conversion to organic farming in France, dairy quality and crop rotation in Italy, sheep and goat support 
and crop rotation in Spain, sheep and goat and beef support in Greece etc.). Therefore, the impact of 
Article 68 on the value of payment entitlements allocated to farmers was less significant than expected: 
Spain and Denmark did not reduce the value of entitlements at all and, in the other eight Member States 
studied, they were reduced (although the authorities generally estimate that the cut was minor).  

Finally, only Hungary and Poland fully financed the Specific Support by a cut in SAPS entitlements. 
Being two new Member States, they had no unused funds that could be used for Article 68. However, 
they  were  able  to  benefit  from  annual  increases  in  their  SAPS  envelopes  along  with  the  gradual 
decoupling  of  CNDP  payments.  Thus,  previously  coupled  CNDP  payments  have  been  more  or  less 
replaced by Article 68 Specific Support. Even though a slight rebalancing in the amounts of payments 
received by the various farmers might have occurred, the level of SAPS payments remained relatively 

1 The ‘Evaluation of Market Effects of Partial Decoupling’ (Agrosynergie, 2010) concluded on the implementation of Article 69 of the Direct 
Payments regulation that Member States had chosen fairly few restrictive criteria, thus not requiring the adoption of different behaviour from 
those that farmers would have normally adopted in the absence of the Article 69 additional payments. This leads us to consider the presence 
of deadweight effects. 
2 The share of unused funds financing measures that were also funded by other sources could not be taken into account. 

153 

                                                      
Evaluation of Article 68 measures 

stable. To conclude, only a small share of Article 68 expenditure was financed by the rebalancing 
of direct support. 

Table 50: Financial provisions chosen by Member States under National Study 

MS 

Aid title (Article 68 objective) 

Protein crops and fodder 1(a)(i)   
Durum wheat 1(a) (ii) 
Maintain organic farming 1(a)(v) 
Organic/labelled calves  1(b)   
Milk producers in mountain areas 1(b)   
Sheep and goat producers 1(b)   
Crop harvest insurance 1(d) 
Tobacco quality 1(a)(ii) 
Fattening of young bovine animals 1(b)   
Suckler cows (AVA) 1(b)   
Support for suckler cows (ACVA) 1(b)   
Milk production 1(b) 
Quality in starch potato 1(a)(ii) 
Conversion to organic farming 1(a)(v) 
Mutual fund 1(e) 
Poultry sector (APV) 1(a)(ii) 
Diversification of crop rotation 1(a )(v) 
Potato quality 1(a)(ii) 
Sugar quality 1(a)(ii) 
Harvest insurance premiums 1(d) 
Tobacco quality 1(a)(ii) 
Other 1(a)(ii) measures  
Crop rotation 1(a)(v) 
Quality- sheep and goat, grain legumes 1(a)(ii) 
Tobacco quality 1(a)(ii) 
Beef, milk, cotton, sugar 1(a)(ii) 
Measures 1(a)(v)  (Crops rotation, Nuts)  
Sheep and goat 1(b) 
Dairy 1(b) 
Beef 1(b) 

FR 

IT 

ES 

HU  All measures 

EL 

New entitlements to farmers in LFA 1(c) 
Durum wheat 1(a)(ii) 
Olive oil 1(a)(ii) 
Beef, sheep and goats 1(b)   

PL  All measures 

FI 

PT 

DK 

NL 

Milk production  1(b)               
Beef and veal production 1(b)   
Protein and oilseed crops 1(a)(i)  
Quality of slaughtered lambs 1(a)(ii) 
Starch potatoes 1(a)(i) 
Autochthonous breeds 1(a)(i) 
Quality of agricultural products 1(a)(ii) 
Olive growing heritage 1(a)(v) 
Extensive grazing 1(a)(v) 
Dairy 1(b) 
Beef production 1(b)   
All environmental measures 
I&R sheep and goat measures I 1(b) 
Animal Welfare III 1(a)(iv) 
I&R sheep and goat measures II 1(b) 
Animal Welfare I, II, IV 1(a)(iv) 
Insurance 1(d) 
Measures 1(a)(i) 

* Not implemented between 2010 and 2012 

EU Budget 
share  
2010-12 
2.71% 
0.56% 
2.14% 
0.32% 
3.29% 
9.65% 
5.46% 
0.21% 
* 
* 
* 
* 
* 
1.97% 
0.00% 
* 
2.06% 
0.00% 
1.22% 
11.13% 
1.70% 
8.70% 
7.38% 
0.56% 
0.40% 
1.94% 
3.95% 
1.84% 
3.16% 
2.71% 
7.31% 
0.77% 
1.97% 
0.70% 
3.21% 

4.80% 

0.69% 
2.59% 
0.31% 
0.04% 
0.08% 
0.13% 
0.54% 
0.51% 
0.36% 
0.58% 
0.30% 
0.87% 
0.07% 
0.02% 
0.10% 
0.55% 
0.23% 
0.19% 

Un-
used 
funds 

Reduction of SPS 
entitlements  
(Art. 69(6)(b)) 

Reduction of 
payments still coupled 
(Art. 69(6)(b)) 

Sectoral 
retention 
(Article 69(2)) 

Transition from 
previous Art. 69 
(Article 72(2)) 

 
Suckler cow premium 

 
3 to 4% 
(estimation for 
2014) 

 
 

 

 

 

 

 

(Tomato) 

 

 

 

 
 

 
 

 
 
 
 

 
 
 
 
 

 
 
 

 
 

 

 
 
 
 

 
 
 
 

 
 
 
 
 
 
 

 
About 0.24% 

10% 

 
 

2%  2010-2011 
4% 2012-2014 

 
 

 

 

 

The authorities 
estimate at 1.5% 
the percentage of 
reduction. 

Source: Interviews 

154 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Evaluation of Article 68 measures 

9.3.1.2  Relevance  of  the  targeting  of  the  measures  relating  to  specific 

needs 

Even if direct support has only been used to a small extent to finance Article 68, the relevance 
analysis implies a check to see if it has really been used to curb specific disadvantages and needs. 

The table below summarizes the analysis of the targeting carried out in EQ1. As a reminder, the analysis 
focused on the Member States that implemented the most significant shares of EU Article 68 expenditure 
and, for each of them, on the most significant measures in budgetary terms. 

Table 51: Summary of the targeting relevance for the ten MS subject to National Study 
ES 
1(b) 
1(b) 
1(b) 

IT 
1(a)(ii) 
1(a)(ii) 

FI 
1(b) 
1(b) 

PT 
1(b) 
1(a)(ii) 
1(a)(ii) 

HU 
1(b) 

FR 
1(b) 

1(b) 

1(b) 

1(b) 

DK 

EL 

PL 

1(b) 
1(b) 
1(a)(ii) 

1(a)(ii) 

Dairy 
Beef and veal 
Sheep and Goat 
Durum wheat 
Tobacco 
1(a)(i) Pulses and herbage legumes 
1(a)(v) Crop rotation 
1(a)(v) Extensive/organic farming 
1(a)(v) Extensive pasturing 
1(a)(v) Olive 
1(c) Tobacco 
1(c) Bovine and ovine sectors 
1(d) Insurance 

          Relevant               Relevant to some extent              Poorly relevant 

Source: EQ1 

As explained in EQ1, measures supporting competitiveness (1(b) and 1(a)(ii)) were most often poorly 
targeted  and  sometimes  not  targeted  at  all,  either  in  terms  of  specific  types  of  farming  they  were 
supposed to address or in terms of quality requirements. Conversely, environmental and other measures 
were  most  often  relevantly  targeted towards  specific needs (1). These judgements  are  backed  by  the 
results of EQ2. 

Considering  the  choice  made  by  Member  States  to  support  one  sector,  in  several  cases,  supported 
farms are on average doing better than farms of the same sectors in Member States that did not 
implement Specific Support. 

o 

o 

In the dairy sector, during the period of implementation, the average viability indicator without 
support of the Member States that implemented the Specific Support was higher than in Member 
States that did not choose to implement Article 68 in the sector. High shares of the farms in the 
Member  States  that  implemented  measures  could  also  be  considered  to  have  viable  dairy 
production (more than 50% of specialised farmers had positive ROI). However, this last point 
must be qualified, since interest on investment still has to be paid after the calculation of the ROI 
indicator, which may impact the continuation of the activity (as the cost of capital is known to be 
particularly significant in the case of dairy). 
In the cattle sector, the ROI without support was also higher on average than in non-implementing 
Member  States,  although  it  was  negative  in  a  significant  number  of  Member  States  (France, 
Ireland, Poland, Finland, Slovenia and UK Scotland). Farms were often poorly viable (less than 
50% of specialised farmers with positive ROI). 

o  For other sectors, the choice of using Article 68 appears more justified by the average viability of 

o 

farms without support and the frequency of unviable producers. 
In several Member States that implemented measures with significant budgets, support recipients 
had relatively high ROI on average and were frequently viable (EL and ES for sheep and goats, 
EL, ES, CZ for cattle). 

1 The case of the Hungarian tobacco measure is specific: the measure has been wrongly targeted since it was built in a way that only tobacco 
can be cropped to earn the support, whereas 1(d) measures are supposed to be considered as decoupled ones. It is thus a  ‘hidden’ coupled 
measure. 

155 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                      
Evaluation of Article 68 measures 

Considering internal targeting, in several cases the ROI of recipient farms without support was higher 
on average and more frequently positive than for non-recipients. This is particularly true in the case of 
the cattle (in EL, ES, IT, PL and FI) and the sheep and goat sectors (ES, PT) as well as for the dairy 
sector  in  Italy  (and  Hungary  in  terms  of  frequency  only).  This  confirms  the  EQ1  result  that  the 
competitiveness measures set up under Article 68 objective 1(b) were generally poorly targeted 
towards specific disadvantages affecting farmers. 

9.3.2  RELEVANCE  OF  ARTICLE  68  AS  AN  OPTIONAL 

INSTRUMENT IN THE CAP 

In  order to judge  the relevance of  an optional scheme,  it is necessary  to  analyse  whether  Article  68 
allowed the setting up of measures that had a supplementary role compared to the common instruments 
of the CAP. This was analysed in EQ1 relating to the analysis of the design of the measures and is 
developed here in the light of the results of EQ 2, 3 and 4. 

9.3.2.1.1  Risk management measures 

The  only  ‘new  measure’  that  Article  68  made  it  possible  to  set  up  was  the  mutual  fund  in  France. 
However, due to its innovative character, it took a long time to become operational. 

Concerning the insurance measures implemented, they had all already been financed by national funds 
in  the  Member  States  that  implemented  them.  Their  financing  by  Article  68  allowed  for  significant 
increases in the budget and thus in coverage in terms of risks as well as of beneficiaries. EQ1 showed 
that  a  pluri-annual  budgetary  framework  would  have  been  more  suitable  for  flexibility  matters  than 
annual budgets, given that these latter may change from one year to another. As a matter of fact, in the 
new CAP, risk management measures are integrated into the second pillar from 2014, which seems to 
be more relevant. 

9.3.2.1.2  Environmental measures 

The  most  significant  environmental  measures  in  terms  of  expenditure  were  generally  comparable to 
previously  existing  measures  of  the  RDR.  The  supplementary  role  of  Article  68  consisted  here  in 
granting financial room for manoeuvre to implement other actions of the second pillar.  

Concerning  the  relevance  of  their  optionality,  EQ4  showed  that  Article  68  environmental  measures 
related either to local or general issues. 

-  When issues at stake were local, it would have been more relevant to implement them under the 
second pillar, since this instrument already exists. In addition, for several measures, the annual 
budgetary framework was not adapted. However, the budget of the RDR would then need to be 
increased of an amount equivalent to the budget of environmental measures financed by Article 
68. 

-  When issues at stake could be considered as general, which is the case of a significant share of 
Article 68 environmental measures in terms of expenditure, it would have been relevant and 
effective to generalise the measures to all the Member States, instead of leaving the decision of 
their implementation to the Member States as an optional mechanism. 

9.3.2.1.3  Competitiveness measures 

As shown in EQ1, many measures whose aim was to support sector competitiveness maintained support 
that  were  already  existing  and  that  were  supposed  to  disappear  because  the  Health  Check  had 
demonstrated  that  they  were  not  justified  as  such.  However,  the  maintenance  of  optional  support 
considered as coupled could be considered as relevant under specific circumstances. 

-  They  support  sectors  that  provide  environmental  and  social  benefits  and  that  will  never  be 
profitable or able to continue in a competitive market. These public benefits can be the upkeep 

156 

Evaluation of Article 68 measures 

of  landscapes,  fire  prevention  or  the  fight  against  rural  desertification,  etc.  In  this  case,  as 
explained in EQ1, measures have to be designed in order to meet these objectives and not to 
maintain the production as such. Furthermore, given that these objectives correspond more to 
those of the second CAP pillar, financing from the RDR budget would thus have been more 
relevant (as well as more coherent, since several measures were targeted at LFA and mountain 
areas). This conclusion is valid for measures (1)(c) that aimed at preventing land abandonment. 
-  They were implemented as real transitory measures requiring strong commitment by the sectors 
to restructuring action (or applied after strong restructuring measures) or to improving quality. 
However, Article 68 was poorly adapted to such objectives, since there were no restructuring 
requirements  for  compliance  with  provisions  of  objective  (1)(b)  and  the  measures  were  not 
submitted  to  approval  by  the  EC,  sometimes  leading  to  criteria  not  sufficiently  restrictive 
enough to generate quality and value improvement as expected under objective (1)(a)(ii).  

Thus,  from  what  was  developed  above,  only  the  last  category  of  transitory  restructuring  measures 
appears justified for financing from the first CAP pillar, with an optional instrument such as Article 68. 
From the analysis of the relevance carried out in EQ1, the only measure that was really implemented 
with such intentions was the support to sheep and goats in France, which required farmers to reach a 
minimum productivity rate and to sign contracts with downstream sectors.  

In that case, the use of Article 68 as an optional instrument appears relevant and did not generate the 
development  of  any  unfair  competitiveness  compared  to  competitors.  Indeed,  EQ2  showed  that  the 
support allowed improvement in the viability indicators (on average and in terms of frequency). EQ3 
showed that the support contributed to significantly filling the competitiveness gap between recipients 
and non-recipients as well as to slowing down the decreasing trend of the industry production shares. 
However, the success of the support did not reach such levels as to generate a distortion of competition 
between recipients and non-recipients. 

9.3.3  EFFICIENCY  OF  ARTICLE  68  AS  AN  OPTIONAL 

INSTRUMENT IN THE CAP 

9.3.3.1  The  budgetary  expenditures  have  the  best relationship with  the 

results achieved 

It can be estimated that the expenditure reached more than 6 billion euros from 2010 to 2014 (1). This 
represents 4.1% of the SPS expenditures.  

Given that the objectives of Article 68 are manifold, efficiency should be assessed by type of objective. 
The graph below presents the expenditures per objective. 

1 Linear estimation based on the budgetary expenditures from 2010 to 2012 that reached 3.8 billion euros (CATS data) and the fact the Article 
68 was implemented over two additional years 

157 

 
                                                      
Evaluation of Article 68 measures 

Figure 33 : Distribution of expenditure per Article 68 objective (2010-2012) 

*Hungary (7.4% of the Article 68 expenditure) is not included because the expenditure for this Member State is not 
distinguished per objective in the CATS data. 

Source: CATS data  

9.3.3.1.1   Objectives 1(b) and (a)(ii)   

63% of budgetary expenditure was dedicated to these objectives (around 1.7 billion under objective 
1(b) for the three first years, and 0.66 billion under 1(a)(ii) for the three first years). The results of 
the measures implemented under both objectives (evaluated in EQ2 and 3) are relatively limited. 

o  On farm viability, EQ2 concludes that the Specific Support had a significant impact on 

farm viability only in some Member States and sectors :  

Table 52 : Summary of the results of the Specific Support on farm viability 

Sectors 

% of the sector in Article 
68 budgetary expenditures 

Dairy sector 
Beef sector 
Sheep and goat 
Tobacco 
Durum Wheat 
Olive 

17% 
14% 
15% 
5% 
2% 
2% 

No. of Member States 
with positive significant 
impact 
3 (ROU, BGR, HUN) 
2 (SUO, ELL) 
2 (FRA, BGR) 
3 (ESP, POL, ITA) 
1 (ELL) 
0 

Source: EQ2 

No. of Member States having 
implemented the measures 

15 
13 
9 
3 
3 
3 

Moreover, the results also show that some Member States targeted either sectors or farmers 
within a sector that were more frequently in a better position than the non-recipients, and 
in this case one may consider that Article 68 has had deadweight effects. This concerns:  

 

 
 
 

the dairy sector: 5 Member States (Bulgaria, Hungary, Latvia, Romania, Slovakia) 
out of 15 that have implemented the Specific Support for this sector;  
the cattle sector: 4 Member States (Greece, Spain, Italy, Finland) out of 13; 
the sheep and goat sector: 3 Member States (Spain, Ireland, Portugal) out of 9; 
in the olive oil sector, all the Member States; in tobacco, Italy. 

o  Regarding maintenance of primary production, the measures failed to reach the objective 
of maintaining production, except for two sectors: in the sheep meat sector it slowed down 
the  decrease,  and  in  the  cotton  sector  it  might  have  contributed  to  a  slight  production 
increase. 

o  Regarding  quality  issues,  impact  on  the  technical  quality  has  most  probably  only  been 
achieved in the tobacco sector, and Article 68 did not succeed in improving the value of 
the  product  (with  price  as  an  indicator  of  marketing  quality).  Moreover,  based  on  the 
analysis of the criteria set by the Member States in EQ1, deadweight effects were found in 
France  in  four  sectors  (tobacco,  durum  wheat,  calves  and  starch  potatoes),  because  the 
requirements were very similar to the usual industry standards; in Greece for durum wheat; 
and in Spain for tobacco. This contributed to the low effectiveness of the measures. 

158 

 
Evaluation of Article 68 measures 

For these two Article 68 objectives, the results compared to the budget show that the Specific 
Support had a very limited level of efficiency. The level of support was not sufficient to have 
a leverage effect on either farm viability or on production level. Moreover, when the targeting 
was not performed well, the Specific Support generated competitiveness distortion inside the 
EU, and in this case Article 68 can be considered as inefficient.  

9.3.3.1.2  Objectives 1(a)(v) and 1(a)(i)  

24%  of  budgetary  expenditure  was  dedicated  to  these  objectives  (0.7  billion  euros  under  objective 
(1)(a)(v) and 0.2 under (1)(a)(i) over the three first years of implementation).  

The results of the (1)(a)(v) measures were evaluated in EQ4 as generally positive because most of them 
were built as the AEM of the RDR. This contributed to well-designed features and targeting criteria. It 
is, however, difficult to judge whether the relationship between the budget and the results is good, given 
that quantitative results on the state of the environment are not available. However efficiency is assumed 
to be good.  

The measures set under objective (1)(a)(i) have either no or only a supposed positive impact (no clear 
element  to  demonstrate  it),  and  thus  efficiency  is  assumed  to  be  low.  In  this  case,  the  issue  is  that 
measures set under (1)(a)(i) often supported the agro-processing value chain of agricultural products 
with positive effects on the environment (fibre crops, energy crops, protein crops), which are difficult 
to demonstrate given that the support did not sufficiently define criteria (on the technical itinerary etc.) 
that would have guaranteed positive impact. Moreover, the issue was to maintain the whole chain and 
sometimes the processing industry in order to maintain market opportunities for agricultural producers 
of the crops. However, in this case the same limitations as those observed for the measures set under 
1(b) were observed. 

Finally, limited deadweight effects probably occurred in France for the diversification measure that was 
implemented  only  one  year  and  with  insufficiently  restrictive  criteria,  and  in  Bulgaria  and  Slovakia 
where the measures financed compliance with the Nitrate Directive. 

9.3.3.2  Significance of the administrative burden 

The administrative burden has been analysed in order to draw conclusions on efficiency. EQ5 showed 
that any coupled support (mainly measures set under objectives (1)(a)(i), (1)(a)(ii), (1)(b)) generated an 
additional burden. However, given that most often this support existed in the past, this additional burden 
was not considered as too heavy by the Member States.  

Measures that required setting criteria (quality criteria for instance under (1)(a)(ii) measures, or targeting 
and conditions to be respected under (1)(a)(v) and (1)(b)) were considered to be more burdensome. This 
is because the applicants had to justify their compliance with the criteria and the authorities had to verify 
this. However, the results of the previous EQs clearly show that they are crucial elements to guarantee 
effectiveness. The issue is thus to design sufficiently strict criteria that produce the expected results but 
do not generate a significant additional administrative burden. This difficult balance was achieved in 
measures  (1)(a)(v)  but  not  (1)(a)(ii),  for  which  the  criteria  were  not  strict  enough  and  generated 
significant additional administrative work in terms of checking whether they were respected.  

Moreover, considering the administrative burden at the EC level, the workforce was maintained at the 
same level as for the administrative management of Article 69, even though it had henceforth to control 
the ‘specific’ character  of the support (with the help of  other  units  that  gave  expert  opinions  on  the 
measures). Therefore, Article 68 generated limited additional administrative burden and cost at the EC 
level. However, several elements could have improved the efficiency. 

-  For the measures coming from the RDP, it would have been more efficient to transfer part of 
the Article 68 budget to the RDR instead of ‘transferring’ RDP measures to the first pillar of the 
CAP, which is less adapted to financing this type of measure (it is mainly valid for measures 
1(a)(i) and 1(a)(v) and 1(c)).  

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-  The efficiency depends greatly on the way the measures were designed (how they were targeted 
on specific sectors/regions/farms, how the aid level was calculated, and the real objectives and 
thus needs of the Member States). In the way Article 68 was implemented, the EC assessed 
regulation compliance of the measures proposed by the Member States and sent comments, but 
only measures under objective (1)(a)(v) had to be legally approved. Hence the EC had identified 
many of the weaknesses that were confirmed in this evaluation, but was not in a position to ask 
for changes. Therefore, it is essential to give the EC  a role of validation of the measures. It 
would not have generated more workload, because the work was done anyway. 

-  The  workload  at the  EC  level  could  have  been  reduced  if  proper software  had been used  to 
compile data and information sent by Member States into a database, as is done for Pillar II. 
The information on Article 68 provided by Member States were documents that did not exactly 
respect the same format, and so the EC had to dedicate time to compile a partial inventory of 
the measures.  

-  Finally, the monitoring and evaluation was fully the responsibility of the Member States, but 
they did not comply with this requirement. This makes it very difficult to evaluate Article 68 at 
the EU level. The EC needs to make sure that Member States monitor the results of the measures 
and to check how they do it. 

9.4  EVALUATION JUDGEMENT ON EQ 6 

EQ6 aimed at assessing whether the optional character of Article 68 was relevant and efficient within a 
common policy. It is a concluding question that builds on the answers to all other EQs.  

Concerning the relevance of reallocating direct payments to specific sectors or farmers, there was 
generally a low impact on the value of the SPS/SAPS decoupled payments. Old Member States partly 
financed Article 68 by unused funds1 while, in the new Member States, Specific Support partly replaced 
previously coupled CNDP payments.  

One justification of the optional character was to target specific sectors coping with competitiveness 
disadvantages; nonetheless, Article 68 has not always been used to target specific disadvantages and 
needs, especially in the case of measures supporting competitiveness.  

Some  measures  (a)(ii)  quality  and  (b)  specific  disadvantages  were  implemented  with  significant 
budgetary  expenditure.  However,  they  were  targeted  on  farms  which  had  a  relatively  high  viability 
indicator compared to farms of the same sectors in Member States that did not implement the measure 
(applies to most measures in the dairy sector, Greek and Spanish measures in cattle and sheep and goats 
sectors).  Furthermore,  several  measures  were  not  intended  to  target  specific  disadvantages,  since 
recipient farms generally had better viability indicators than non-recipients in the same Member State 
(especially in the sectors of cattle and sheep and goats).  

The relevance of the optional character of the scheme depends on the type of measures. 

- 

-  The optional character was relevant for risk management measures; however, the pluri-annual 
budgetary  framework  of  Pillar  II  would  have  been  more  suitable  than  annual  budgets  by 
providing more flexibility. 
In the case of environment measures:  
o  Optionality  was  relevant  in  the  case  of  local  environment  issues,  even  though  Pillar  II 
would have been more appropriate. As a matter of fact, instruments already exist in the 
RDR  and  appear  more  adapted  (pluri-annual  budget,  regionalisation  of  the  measures, 
enrolment of farmers over several years). 

o  By definition it was less relevant in the case of general issues that need to be tackled at the 

EU level and should apply to all Member States. 

- 

In the case of competitiveness measures:  

1 i.e. unspent funds arising from the SPS execution or retention on the national reserve. This possibility was not available to New Member 
States applying the Single Area Payment Scheme. 

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o 

o 

If the real objective was to provide local environmental and social amenities, optionality 
was justified, but Pillar II was more adapted to finance such objective. 
If the objective was to support transitional measures to improve the competitiveness of a 
sector, then optionality was relevant provided that the measures were well tailored to the 
needs. In that case, support may not generate any competitiveness distortion.   

The efficiency of Article 68 as an optional instrument of the CAP is limited. The impacts of measures 
supporting competitiveness were limited (the support had low leverage effect on farm viability or on 
production level) and sometimes may have generated distortion of competition and deadweight effects.  
However, 63% of budgetary expenditure was dedicated to these objectives. Concerning environmental 
objectives, effectiveness is assumed to be good for measures (1)(a)(v) agri-environment benefits, as they 
were  designed  as  the  AEMs  of  RDR,  but  low  for  measures  (1)(a)(i)  types  of  farming  protecting  or 
enhancing  the  environment.  Furthermore,  Article  68  generated  additional  administrative  burden, 
especially for quality measures (under objective (1)(a)(ii)).  

The efficiency could have been improved if all the measures had required approval by the EC. Actually 
the  EC  had  identified  many  weaknesses,  but  they  were  not  always  taken  into  consideration  by  the 
Member States. As concerns the measures transferred from the RDP, it would have been more efficient 
to increase the RDR budget to finance these measures given that the instruments existed and that Pillar 
II was better adapted. 

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10  CONCLUSIONS AND LESSONS LEARNED 

The evaluation assessed the possibility offered to Member States to implement optional support to deal 
with specific needs (1), under Article 68 of the Health Check Regulation (2). This Specific Support was 
implemented  by  twenty-six  Member  States  between  2009  and  2014  and  concerned  a  large  range  of 
animal and crop sectors. The evaluation focused on 10 Member States where National Studies were 
carried out (3).  

The  Specific  Support  as  defined  in  Article  68  does  not  exist  anymore.  Thus  the  conclusions  of  the 
evaluation indicate key lessons learned that might be useful in future CAP development. 

10.1  GENERAL CONCLUSIONS 

10.1.1  EFFECTIVENESS AND IMPACTS OF ARTICLE 68 MEASURES 

10.1.1.1 

Economic viability, competitiveness and sustainability 

  Economic viability 

The  economic  viability  was  defined  as  the  ability  of  a  sector  (product)  to  ensure  the  family  work 
remuneration to the level of opportunity cost, as well as a remuneration of the invested capital. Based 
on  the  FADN  data,  we  carried  out  the  analysis  of  the  Return  on  Investments4  (ROI)  of  the  farms 
specialised  in  the  sectors  concerned  by  the  Specific  Support  measures  under  objectives  (1)(a)(ii) 
‘improving the quality of agricultural products’ and (1)(b) ‘specific disadvantages’. The ROI measures 
as a percentage the economic return of globally employed capital. In absolute terms, for a sector to be 
viable, the ROI must be greater than zero. 

Specific Support had a different impact on the ROI levels according to the various sectors and 
Member States. 

The analysis at the aggregated level (the group of Member States having implemented the measures 
under objective (1) (a) (ii) quality and (1) (b) specific disadvantages and the group of Member States 
that have not implemented the measures), underlining the impact of the policy as a whole, showed 
that Specific Support had a larger impact on the tobacco and sheep and goat sectors, and a lower 
impact on the sugar beet and olive oil sectors. In addition, on the cattle, dairy and olive oil sectors, 
Article 68 recipients showed (on average) a higher ROI, even in the absence of Specific Support, 
relative  to  non-recipients.  Therefore,  on  average,  these  sectors  were  in  a  condition  of  relative 
advantage already before the implementation of Article 68. Conversely, in all the other analysed 
sectors,  recipients  had  a  lower  ROI  relative  to  non-recipients.  In  this  case,  Article  68 
implementation allowed to reduce but not to annul the disadvantage (sheep and goat, cotton, 
durum wheat, tobacco). 
The  analysis  carried  out  at  the  Member  State  level,  aimed  at  examining  the  impact  of  Specific 
Support  according  to  Member  States’  implementation  choices,  showed  average  ROI>0  but  also 
ROI<0  within  the  same  sector  depending  on  the  Member  States.  In  most  cases  for  which  the 
simulated ROI (without Article 68) was <0, Specific Support reduced the negativity, but without, 
however, cancelling it (cattle in France, Ireland, Poland, Finland, Slovenia, UK Scotland; sheep and 

1 in terms of environment, competitiveness and quality, risk management, animal welfare… 
2 Reg. (EC) 73/2009 
3 Denmark, Finland, France, Greece, Hungary, Italy, Poland, Portugal, Spain and the Netherlands 
4 The ROI is the ratio between the Earnings before interests and taxes (EBIT) and Total Assets (TA). 

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goats in France, Finland, and Ireland).In these cases, the implementation of Specific Support was 
not sufficient to guarantee economic viability of the sector. 

Specific Support played a role helping to move producers from a non-viable sector to a viable 
sector. 

The  analysis  of  the  percentage  of  farms  (aimed  at  determining  the  number  of  farms  whose 
productive  activity  passed  from  an  economically  not  viable  situation  to  an  economically  viable 
situation thanks the support) in the different sectors, showed that, in general, the percentage of farms 
with ROI>0 varied according to the sector. Accordingly, in all sectors, farms with ROI<0 (and thus 
not viable) managed to maintain their business only by reducing the remuneration of family labour 
below its opportunity cost, and without being able to offer a return on invested capital.  
Specific  Support  implementation  allowed  a  percentage  of  producers  to  move  from  a  non-viable 
situation to a viable situation. This was more significant in the tobacco and cotton sectors, while it 
was less significant in other sectors (sugar beet, dairy, and olive oil). 

  Competitiveness  

Considering  the  objectives  of  Article  68  support,  competitiveness  based  on  quality  was  analysed  - 
measure  under  objective  (1)(a)(ii)  "improving  quality".  Moreover,  the  role  of  Specific  Support  on 
quality improvement was also analysed through the improvement in the relative prices (1). 

In  general,  the  impact  of  Specific  Support  on  quality  improvement  was  limited  (2),  with  the 
exception of tobacco. The analysis of the relative prices confirms this conclusion.  

In the tobacco sector, the Specific Support eligibility criteria led to the exit from the sector, started 
with the CMO reform, of less performing farmers producing tobacco of lower quality. In the period 
between  the  CMO  reform  and  2010,  the  tobacco  average  price  increased  sharply  in  line  with  the 
improvement of the average quality in the same period. This increasing price trend was interrupted in 
conjunction  with  the  implementation  of  Article  68,  despite  a  further  improvement  of  tobacco 
average quality. This suggests that, knowing the existence of an aid linked to production, buyers 
bargain  with  producers  to  obtain  a  lower  purchase  price.  Therefore,  through  this  lower  price, 
producers actually lost part of the support, which is transferred to (captured by) buyers.  

  Sustainability of primary production 

To analyse the sustainability of the production, we examined the capacity of Specific Support to increase 
the stability of production flows, that was a specific objective of the measures under objective (1)(b) 
specific disadvantages. The analysis was also carried out on sectors that have benefited from the measure 
under objective (1)(a)(ii) quality. 

The impact of the measures on production was rather uneven. 

Concerning sectors benefiting from the measure under objective (1)(b) specific disadvantages , the 
effects were limited (beef) or zero (dairy). Conversely, in the sheep meat sector, Specific Support 
contributed significantly to slow down the decreasing trend in production, particularly in Member 
States that during the 2003 CAP period had chosen partial decoupling.  
Concerning  the  sectors  benefiting  from  the  measure  under  objective  (1)(a)(ii)  quality,  Specific 
Support induced a production decline in the tobacco sector due to the abandonment of lower quality 
tobacco production. In the cotton sector, it stimulated (together with favourable conditions-increase 
in  world  price)  a  production  increase  (although  at  levels  far  lower  than  the  levels  before  the 

1 The assumption was that there is a direct relationship between quality improvement and an increase of price. Durum wheat sector was also 
analysed. The lack of reliable data on sugar beet prices did not allow the analysis for this sector. 
2 The analysis was carried out for beef and sheep meat, cow milk, sugar beet, tobacco and olive oil sectors (with different parameters according 
to the product), only for Member States that have implemented the measure. 

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implementation of the 2003 CAP). In the other sectors (durum wheat (1), sugar beet and olive oil), 
there was no impact on production. 

  Sustainability of processing industries 

The analysis of the sustainability of the processing industry concerned only the sectors for which the 
supply of raw materials produced locally is a determinant element of survival (2). For these industries, 
we analysed two aspects: a) the stability of supply flows of raw materials, b) the possible impact on the 
industrial structure. 

Concerning the stability of supply flows of raw materials, Article 68 was not sufficient to ensure 
the sustainability of the processing industries. 
With the exception of cotton, the measures did not prevent the production decrease but only a slowdown 
of the decreasing trend. In the case of tobacco, the decrease in quantities seems to have met the first 
processing industries’ requests, as these are no longer obliged to handle (as before) a product of low 
quality not demanded by manufacturers. 

The dynamics of the structure of the analysed industrial sectors (strong decrease of the number 
of factories) are related to the 2003 CAP reform or other drivers and were not affected by the 
implementation of Article 68.  

However,  the  decrease  of  primary  production  in  the  sugar  and  tobacco  sectors  might  have 
deteriorated the industry competitiveness. 
In the tobacco and sugar sectors, the decrease of primary production might have had a negative impact 
on the utilization rate of the factories. The resulting increase in fixed costs per unit of product may have 
deteriorated the industry competitiveness, if it had not been accompanied by a more than proportional 
growth in sales prices as a result of quality improvement. Conversely, in the case of the cotton industry 
in Spain, the growth of supply flows happened in a context of price increase on the world market and of 
deep restructuring of the cotton sector, with a growth of the utilization rate of the factories capacity at 
levels higher than those observed before the implementation of the 2003 CAP. 

10.1.1.2 

Competitiveness  of  supported  sectors  and  Member  States 

compared to not supported ones 

These first results have been deepened to assess the impact of objectives (1)(a)(ii) quality and (1)(b) 
specific disadvantages on two levels: i) competitiveness of the agricultural component of the supply 
chain; ii) competitiveness of the industrial component (processing industry). 

  Competitiveness of the agricultural component of the supply chain 

The analysis was carried out by comparing the gross margin of recipient farms (in the real situation with 
Specific Support and in the simulated situation without Specific Support) and the gross margin of non-
recipients farms (3). Moreover, the analysis was carried out at the aggregated level (the group of Member 
States  having  implemented  the  measures  under  objective  (1)(a)(ii)  quality  and  (1)(b)  specific 
disadvantages  and  the  group  of  Member  States  that have  not implemented the measures)  and  at  the 
Member State level. 

1 However, in Italy the implementation of the “environmental” measure stimulated a new interest of producers: the measure contributed to 
areas stabilisation and, indirectly, also to production stabilisation. 
2 i.e. slaughtering industry, dairy, industry of first processing of raw tobacco, cotton industry, and sugar industry. 
3 Concerning the impact of the reduction of SPS entitlements on non-supported sectors, the analysis carried out in EQ6 highlights that many 
of  the  significant  Article  68  measures  in budgetary  terms  were  fully  financed by  unused  funds.  Therefore,  no  appreciable  change  in  non-
supported farms should have occurred. However, if there were any effect, it would not have been in terms of product competitiveness but on 
the income of farmers concerned by the SPS entitlements reduction.  

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All other things being equal, the gross margin is a proxy of the level of competitiveness achieved by 
farms, in terms of: i) increased efficiency (cost competitiveness); ii) a better market performance (higher 
sales prices due to improved quality). 

The first part of the work concerned the existence (or not) of a gap in competitiveness between sectors 
that received Specific Support and those that did not, and the extent to which Specific Support helped 
to reduce this gap. 

At the aggregated level (the group of Member States having implemented the measures and the 
group of Member States that have not implemented it), underlining the impact of the policy as a 
whole, results showed, within each Member State, situations where Specific Support:  
d-  may have generated a distortion of competition among recipients and non-recipients: in some 
Member States, Specific Support increased a gap already positive (cattle, dairy and sugar 
beet); 

e-  others in which Specific Support was not sufficient, to close the negative gap among recipients 

f- 

and non-recipients (olive oil); and,  
finally, others where Article 68 managed to cover the existing negative gap and (in some cases) 
going even further, probably generating a limited distortion of competition (sheep and goat, 
tobacco, durum wheat and cotton). 

The analysis at Member State level showed Member States, within each sector, in which recipient 
farms were more competitive than non-recipient farms before receiving the Specific Support (1) and 
others in which there was a negative gap that Specific Support allowed (2) or not to reduce/close. 

The second part of the work concerned the analysis of the extent to which Specific Support contributed 
to the gross margin formation of the recipient farms.  

In  general,  the  significance  of  Specific  Support  on  the  gross  margin  of  recipient  farms  varied 
according to sectors: the highest in tobacco sector, the lowest in the dairy sector. 

In  general, the analysis of the aggregated average by sector confirms the importance of Specific 
Support in the tobacco sector (over 27% of gross margin), and cotton (12.5%). A less important role 
was observed in the case of durum wheat, sheep and goat, cattle, sugar beet and olive oil. The dairy 
sector was the one where Article 68 had the lowest importance on gross margin formation (3.3%). 
At single Member State level the evidence showed a more complex situation, with some Member 
States where the incidence of Specific Support on gross margin was sharply higher (3) relative to 
the aggregated average or lower (4). 

  Competitiveness of the processing industry 

The  growth  or  decline  in  competitiveness  was  measured  by  the  difference  between  the  average 
production share in value (VPS) of each country-system (5) in the period of implementation of Specific 
Support  (2010-2014)  and  the  average  VPS  of  the  period  immediately  preceding  its  implementation 
(2005-2009)(6). An in-depth analysis of the two components of the VPS (production shares in volume - 
QPS - and prices) was also carried out. 

1 Belgium, Poland and Scotland in the cattle sector; Italy, Latvia, Poland, Slovakia and Slovenia in the dairy sector. Portugal in sheep and goat. 
Greece in durum wheat and olive oil. Italy in tobacco. 
2 France, Spain and Slovenia in the cattle sector. Hungary and Bulgaria in the dairy sector. Bulgaria, Italy, Ireland and Finland in sheep and 
goat. Spain and Poland in tobacco. 
3 Greece and Finland in cattle, Hungary, Bulgaria and Slovenia in dairy; Bulgaria and Finland in the sheep and goat, tobacco in Spain. 
4 Belgium, Poland and Denmark in cattle, Austria, Poland and Italy in the dairy, the Netherlands, Portugal and Italy in sheep and goat. 
5 i.e. the whole processing industry of a sector of each Member State. 
6 The analysis was limited to the processing sectors for which the supply of raw material within a limited distance range around the factory is 
a key factor of competitiveness: beef and sheep meat, olive oil, tobacco, cotton. Moreover, dairy industry was also analysed, even if part of the 
raw material supplies can originate from other areas not necessarily close to the factory. Indeed, another part of supplies for PDO/PGI cheese 
production is (more or less) linked to the production area.  

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In general, there are no strong correlations between the changes (positive or negative) in VPS and 
the implementation of Article 68. However, it should be noted that in the country-systems having 
lost VPS, the implementation of Article 68 proved not to be sufficient to avoid this drop.  

At the level of the group of country-systems that have implemented the measures, VPS changes 
were rather mixed while at the level of each country-system the VPS variations were quite limited. 
Indeed the only noteworthy change concerned the sheep meat industry for which Italy and Spain 
showed a decrease in their VPS (1). On the contrary, the VPS increase in the raw tobacco industry 
was mainly the result of a significant loss in Italy and a strong gain in Spain. 

Moreover, the analysis showed that the changes in the competitive positioning were mainly caused 
by changes in relative prices, while changes in QPS played a more limited role. 

In this general framework, however, two cases were identified: 

a-  some country-systems improved their global position thanks to the simultaneous growth of both 
parameters (QPS and relative prices) (2). However, in some cases, the overall improvements of 
both parameters were linked to events other than Article 68 implementation (for example, the 
end of the embargo of UK meat). 
Therefore, the implementation of Article 68 measures did not artificially and significantly 
changed  the  competitive  positioning,  existing  in  the  previous  period,  of  the  different 
country-systems. 

b-  vice versa, other country-systems worsened their position due to the decrease of both parameters 
(3). Obviously,  the implementation of Article 68 did not artificially changed the competitive 
positioning of the country-systems, existing in the previous period. In this case, at most, Article 
68 contributed to slowing down competitiveness losses due to other factors. 

10.1.1.3 

Territorial development 

While the Member States had intended the measures to have territorial effects, the analysis did 
not show any significant effects of Article 68 measures on territorial development at the regional 
level. 

Fifteen  out  of  26  Member  States  implemented  some  measures  with  either  explicit  or  implicit 
objectives  of  territorial  development  (under  Article  68  (1)(a)(ii),  (1)(b),(1)(c)).  These  included 
maintaining  jobs,  generating  value  (maintaining  agro-processing  value  chains),  and  protecting 
traditional heritage (landscapes, know-how) in rural areas, etc.  
Effects on territorial development were expected in regions in which both the share of supported 
sectors and effects on farm viability were significant. Ten EU regions in six Member States4 met 
these  criteria.  In  these  regions,  the  analysis  shows  limited  effects  at  the  regional  level:  Specific 
Support enabled the maintenance of the production value of sectors, but these latter had a very low 
level of contribution to regional agricultural value. Moreover, in these regions, Specific Support 
targeted intensive labour sectors (for instance livestock). However, in supported farm holdings, the 
employment trend was most often similar to regional trends and seemed to be mainly sensitive to 
regional and sectoral contexts rather than to the role played by Article 68. The measures sometimes 
targeted very specific sectors, located in specialised areas, where they might have significant effects 
in terms of local employment and economic activities that cannot be identified at the regional level 

1 An important change concerned the beef industry with a significant increase of production shares of Spain and a loss of France and Italy. 
However, the Spanish increase is probably influenced by statistical errors. 
2 i.e.  UK and Ireland country-systems in beef and veal sector; Germany in the dairy sector; tobacco in Spain together with Poland in tobacco 
varietal group II and France in tobacco varietal group I. 
3 This is the case of Spain in the cow and heifer beef meat sector (3); Spain, Italy, but also France in sheep meat; Spain, France and Portugal 
in the dairy sector; Greece in olive oil; Italy in the tobacco first processing industry. 
4 EL-Thessalia, ES-Extremadura, FR-Midi-Pyrénées, FR-Rhône-Alpes, FR-Provence Alpes Côte d’Azur, HU-Közép-Dunántúl, HU-Észak-
Alföld, IT-Piemonte, PL-Małopolskie, PL-Lubelskie 

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(tobacco in Spain, Italy and Poland; sheep and goats in France; dairy in Hungary; durum wheat and 
suckler cows in Greece, etc.).  

The Specific Support scheme, while sharing similar objectives with the CAP measures granted 
under Pillar II, showed a limited capacity in addressing territorial issues. 

10.1.1.4 

Environment 

  Measures with environmental objectives 

Two sub-articles 68 had environmental objectives: (1)(a)(i) supporting types of farming, which are 
important  for  the  enhancement  of  the  environment  and  (1)(a)(v)  supporting  agricultural  activities 
entailing  additional  agri-environmental  benefits.  13  Member  States  made  use  of  them  and 
implemented  13  measures  under  Article  68(1)(a)(v)  and  17  under  Article  68(1)(a)(i),  including 
measures whose aim was : 

 

 

 
 

to develop or maintain a practice/system well known for its environmental benefits, such as crop 
rotation, extensive and organic farming, and extensive pasturing, etc.; 
to  support  an  agro-industrial  sector  associated  by  the  Member  States  with  environmental 
benefits,  such  as  fibre  crops  in  the  Netherlands,  energy  crops  in  Denmark,  starch  potatoes  in 
Finland, etc.; 
to maintain local genetic breeds/varieties; 
to  support  environmentally  friendly  investments,  which  were  less  frequent  but  used  in  the 
Netherlands  (e.g.  equipment  for  precision  agriculture  etc.)  and  Denmark  (support  for  planting 
organic fruit trees and berry bushes). 

All  measures  analysed supported  practices  that  went beyond  regulatory  requirements.  Moreover,  for 
some measures, the requirements were clearly additional specifications to the GAEC and SMR. 

The types of practices that could be supported under Article 68 (1)(a)(i) and (1)(a)(v) were not 
clearly  defined  in  the  regulation,  and  similar  measures  were  designed  under  both  objectives, 
although  their  level  of  constraints  was  different.  This  raises  a  coherence  issue.  The  (1)(a)(v) 
measures had to be set up respecting the approach of the Pillar II AEM and to be approved by the EC. 
The  Member  States  had  much  fewer  constraints  under  Article  (1)(a)(i),  but  the  measures  were 
considered to be coupled payments and thus were subjected to the 3.5% budget ceiling. The Member 
States decided to develop their environmental measures under one or the other objective depending on 
their administrative burden and budgetary issues.  

The  different  level  of  constraints  translated  into  a  different  level  of  potential  impact  on  the 
environment:  

  The (1)(a)(v) measures had the potential to generate better results mainly because: (1) specific 
environmental  needs  were  targeted  (on  selected  areas/types  of  farming),  and  the  measures  were 
better  designed.  Some  of  them  were  former  Pillar  II  AEM  transferred  to  Pillar  I  for  budgetary 
reasons. (2) The effects were sometimes concentrated on areas with environmental interests.  
  The  measures  implemented  under  objective  (1)(a)(i)  had  less  potential  to  generate 
environmental  results  because Member  States  paid less attention  and  time  to their  design. The 
effectiveness of these measures suffered from the lack of precision of the goals pursued and/or of 
the inadequacy between the measures’ features and the actual environmental issues/farmers’ needs. 
For instance, all measures supporting agro-industrial sectors were set up under objective (1)(a)(i), 
usually with poor justification of their expected environmental effects. 

A large and varied set of measures were designed by the Member States; however, three major 
types of measures can be identified in terms of budget, number of hectares and farms supported:  in 
first  place  arable  crops  rotation  and  diversification  (72%  of  the  budget  in  average,  and  at  least 

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2 130 000 hectares supported in 2013 (1)), then extensive/organic farming (22%, and at least 274 000 
hectares) followed by extensive pasturing (2%, 12 350 hectares).  

The analysis of the environmental impact of these three types of measures was hindered by the lack of 
monitoring data. The level of impact was estimated based on the literature review crosschecked with 
analysis of the measures’ features and the interviews, which were all used to judge potential impact on 
the environment but not to measure it.  

Within each of the three categories, the level of potential impact on the environment is directly 
dependent  on  the  level  of  uptake  (level  of  support,  proper  targeting  of  the  beneficiaries)  and  the 
features  of  the  measure  (geographical  and  sectorial  targeting,  applicable  and  relevant 
requirements regarding their effect on the environment, time span of the measures, interaction 
with other schemes to optimise the effect). The existence of monitoring also affects the judgment 
on the environmental effects. Therefore, within a same category, the results are uneven.  

-  Arable  crops  rotation  and  diversification  measures:  these  support  the  development  or 
maintenance of protein and sometimes oilseed crops. Some measures consisted in per hectare 
payment  with  no  conditions  related  to  crop  rotation/diversification  (e.g.  French  support  for 
protein crops); other measures (Italy and Spain) were targeted on specific regions and included 
conditions  on  crop  rotation/diversification.  The  measures  contributed  to  the  development  of 
protein  and  oilseed  crop  areas  in  Spain  and  Poland,  and  to  their  maintenance  in  Italy.  The 
Spanish  and  Italian  measures  had  potential  positive  impacts  at  the  farm  and  regional  levels, 
whereas  it  applies  only  at  the  farm  level  for  the  Polish  and  French  (protein  crops  support) 
measures.  On  the  other  hand,  the  French  measure  ‘diversification  of  crop  rotation’  and  the 
Finnish and Danish measures had no noticeable effects on the environment: the French measure 
was implemented only for one year, in Finland the measure did not help maintain the protein 
and oilseed surface and in Denmark the measure had a very low uptake.   

-  Extensive and organic farming: two French measures (maintenance of and conversion to organic 
farming), one of the two the Danish measures (extensive farming) and the Portuguese measure 
(protection of national olive-growing heritage) are expected to have had positive environmental 
effects at the farm level. They had potential effects at larger scales but these depended on the 
geographical location of the beneficiaries (it may or may not favour ecological continuity and 
mass effects required for water protection etc.). One measure in Denmark (planting of organic 
fruit trees and berry bushes) is expected to have had insignificant environmental effects because 
of its low uptake. 

-  Extensive pasturing: the Portuguese and Danish measures are likely to have helped maintain 
extensive pasturing, which had a positive impact at least at the farm level. There is no evidence 
of  larger  scale  effects  due  to  the  lack  of  monitoring  data,  although  these  latter  could  have 
occurred. 

  Indirect impact of the measures set up under other objectives 

The  other  Article  68  measures,  set  up  under  objectives  (1)(a)(ii)  quality,  (1)(b)  specific 
disadvantages  and  (1)(c)  land  abandonment  and  specific  disadvantages  in  areas  subject  to 
restructuring, may have had side effects on the environment either because they supported specific 
sectors  that  affect  the  environment,  or  because  they  indirectly  induce  changes  in  agricultural 
practices.  

Based on the analysis of the two main supported sectors (beef, milk and sheep and goats), it can 
be concluded that the measures set up under ‘non-environmental objectives’ either had no effect 
or maintained a type of production with very low positive impacts on the environment 

Overall, the measures implemented under Article 68 have failed to maintain production in the meat 
and milk sector and generally had very low effects on farm viability. Consequently, they had no or 
very limited effects on the environment. However, there are some exceptions, with rather positive 

1 The number of hectares supported for the three types of measures does not take into account the measures of France and the Netherlands, 
because these countries did not communicate these data. 

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effects: for the beef meat sector in Finland, Greece and France; and for the milk sector in Hungary 
and to a much lesser extent in France, Spain and Finland.  
In the sheep and goat sectors, the measures had a limited impact on farm viability and on primary 
production, and thus limited impact on the environment. An exception is the French measure: it had 
a significant positive impact on viability but supported both extensive (Mediterranean regions) and 
intensive (western regions) farming systems, thereby leading to mixed environmental impact. 

10.1.1.5  Animal welfare 

The Netherlands is the only Member State that designed measures under objective (1)(a)(iv) to enhance 
animal  welfare  standards  (above  the  statutory  requirements).  The  four  different  measures  aimed  at 
different  and  complementary  levels:  housing  improvement,  market  (certification),  management 
practices and innovation. Some positive changes, in relation with the measures, have been noted by the 
stakeholders; however, the absence of monitoring makes it difficult to judge the level of contribution of 
Article 68. 

As for side effects of measures set up under other objectives: measures set up under objectives (1)(a)(i) 
and  (1)(a)(v)  had  a  positive  impact  on  the  maintenance  of  livestock-rearing  conditions  in  the 
Netherlands, Portugal, Denmark and France (measures for extensive pasturing and organic farming). As 
for  measures  set  up  under  objectives  (1)(a)(ii),  (1)(b)  and  (1)(c),  several  measures  have  supported 
production with an obvious enhancement of animal welfare. However, the results of EQ2 results showed 
that they failed overall to maintain the livestock sectors and thus the overall impact on animal welfare 
was considered limited. 

10.1.2  EFFICIENCY OF ARTICLE 68 MEASURES 

As with the management of any coupled aid, the workload associated with the management of 
Article 68 measures is due to the specific administrative procedures that were set up in addition 
to the SPS. Environmental and quality measures tended to include more stringent requirements 
than the other types of measures, and this resulted in additional burden for all parties involved. 

The  design  of  the  measure  significantly  affects  the  degree  of  complexity  of  the  implementation 
procedures required to manage the administrative controls of applicants. Generally, the managing 
authorities made efforts to simplify eligibility criteria and conditions, so that the procedures would 
not be too complex.   

The national control arrangements were effective to control the Specific Support and ensure the 
verification of the eligibility criteria. However, the legal provisions could be improved to ensure 
that the control targeting is effective for 13 measures out of the 80 examined during the evaluation, 
in six Member States.  

The  analysis  of  the  errors  registered  during  on-the-spot  checks  shows  that  a  limited  number  of 
measures  (11  measures  in  five  Member  States  for  the  80  examined  measures)  generated  more 
difficulties for beneficiaries in terms of justifying that they comply with the eligibility criteria.  

As  regards  the  efficiency  of  on-the-spot  checks,  the  verification  on  site  of  additional  eligibility 
criteria was reported  as burdensome in four  Member  States (EL,  IT, FR,  NL)  out  of the  nine 
studied. 

As stated by the ECA in its report on Specific Support, the evaluation confirms that indicators 
used to monitor the effects of Article 68 measures were weak or inadequate. Indeed, the major 
elements available consisted of the number of beneficiaries / hectares / animals supported, whereas 
no information was collected to assess the extent to which the objective was achieved. 

This  applies  to  quality  supposed  to  be  improved  for  measures  under  (1)(a)(ii)  and  environment 
supposed to be preserved or restored (measures under (1)(a)(i) and (a)(v)), etc.). Moreover, given 
that one objective of Specific Support under Article 68 measures was to buffer the consequences of 

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reforms  in  particularly  sensitive  sectors  (1)  (Article  68  (1)(b)),  it  would  have  been  particularly 
relevant for Member States  to consider the results of such support and assess to what extent the 
sector/regions targeted did recover from the past reforms.  

Member States were responsible for identifying potentially overlapping measures and setting up 
the corresponding procedures. These were reported to have been properly set up and effective (2).  

10.1.3  RELEVANCE AND COHERENCE OF ARTICLE 68 

10.1.3.1  Relevance of the measures 

Given the large number of measures, it was possible to provide a sound judgement only for the Member 
States where National Studies have been carried out (3). Results must be interpreted carefully, since they 
are based on experts’ judgements. 

The  majority  of  the  Member  States  studied  consulted  agricultural  sectors’  representatives.  In 
some cases (IT, PT), the negotiation led to a significant fragmentation of financial. 

  Relevance of the measures depending on their budget 

In Italy and France, which implemented the main share of the EU Article 68 budget, measures 
with the most significant expenditure were relevant overall. Together these measures account for 
38%  of  the  total  EU  expenditure  for  2010-2012.  In  the  other  Member  States,  the  degree  of 
relevance varies from one measure to another.  

In France and Italy, although most significant measures in terms of budget were considered relevant 
(4), the other measures had less relevance since they were often implemented with the objective of 
distributing funds to sectors or regions that were previously benefitting from other support. These 
measures, most often considered as coupled, did not have very ambitious objectives or were not 
intended to reach specific results regarding the set objectives. They were generally designed in order 
to fit within the framework and the objectives of Article 68.  
In  Spain  and  Finland,  a  high  share  of the  budget  was  allocated  to  livestock  sectors. The overall 
rationale was to continue granting coupled support in order to maintain sectors, which was generally 
relevant.  However,  in  terms  of  design,  the  measures  were  not  accompanied  by  requirements  to 
improve competitiveness or structure of the sectors. Both Member States also implemented relevant 
environmental measures in order to limit cereal mono-cropping but with insufficient financing to 
reach the objectives.  
In  Poland  and  Hungary,  significant share  of  the  budget  was dedicated to  milk  and  tobacco, two 
sectors with strong social impacts in generally poor regions. However, these measures were poorly 
targeted and/or included no restructuring requirements. In the specific case of Greece, in the context 
of  the  financial  crisis,  Article  68  was  used  for  the  purpose  of  distributing  funds  through  a  few 
measures with a high number of beneficiaries and of supporting sectors that could help limit the 
trade deficit. Portugal implemented support for a great number of sectors and with a relatively small 
budget, which puts into question the capacity of each measure to reach its objectives. In Denmark, 
the  strategy  was  mainly  aimed  at  implementing  measures  with  environmental  objectives  that 
appeared relevant overall. 

  Relevance of the measures depending on their objective 

A judgement depending on the objectives of the measures leads to more clear-cut conclusions. 
Therefore,  environmental  measures  (especially  (1)(a)(v)  agri-environmental  benefits)  and  risk 

1 Recital 35, Reg.(EC) 73/2009. 
2 In Italy, the procedures were not clearly identified, preventing the evaluation team from judging their effectiveness. 
3 The Netherlands implemented mainly  Animal Welfare measures and its case was therefore treated exclusively in the question on animal 
welfare. 
4 Support to sheep and goats (10% of EU Article 68 expenditure for 2010-2012), crop harvest insurance (5%) and organic farming (4%) for 
France; contributions to insurance premiums (11%) and support to crop rotation in Italy (7%). 

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management  measures  are  generally  judged  as  relevant.  However,  they  received  a  far  smaller 
share  of  the  budget.  On  the  contrary,  the  measures  (1)(b)  specific  disadvantages  and  (1)(a)(ii) 
quality are more often the source of relevance issues. 

-  Measures  were  often  poorly  targeted  towards  specific  needs,  especially  concerning 
measures  under  objective  (1)(b)  that  had  to  address  specific  disadvantages.  Indeed,  the 
support often poorly targeted specific areas or types of farming (the measures supporting dairy 
and beef and veal sectors in HU, FI, DK, CZ, AT, UK, LT, and LV).  

-  Measures  often  lacked  criteria  aimed  at  changing  or  improving  previous  practices, 
thereby  generating  deadweight  effects.  This  was  often  the  case  for  measures  aimed  at 
improving  the  quality  of  agricultural  products  (IT,  FR,  EL,  PL).  They  were  often 
implemented in order to widely distribute funds to the sectors, and the quality standards were 
the ones usually required by the industry. While such measures were sometimes needed, in other 
cases, quality was not necessarily an issue. For instance, quality measures for durum wheat and 
starch potatoes were implemented in France, whereas in other Member States (IT, FI) the same 
sectors were supported with environmental objectives that were more relevant for those sectors. 

-  Finally,  the  budget  allocation  rarely  resulted  from  a  detailed  analysis  of  the  level  of 
support required to meet the needs, but more from a political choice. This often led to the use 
of significant budgetary stabilisers that made the aid level too low to reach the objectives of the 
measures. 

In a longer-term perspective, an important issue is that (1)(b) support was channelled to sectors 
in order to maintain them, but most often without any requirement concerning the structural or 
strategic adjustments needed to favour the long-term viability of these sectors.  

Therefore, one could question their capacity to survive without the support, especially when support 
is significant. It is particularly the case in the beef and veal sector in which many Article 68 measures 
maintained the same support that was already existing in the past.  
Member  States  often  argue  that  these  sectors  need  to  be  maintained  because  of  territorial 
development issues (employment, social issues) or environmental issues (landscape protection, fire 
preventions etc.) (FR, ES, HU, EL, PL, FI). It must be underlined that several (1)(b) measures were 
targeted by Member States on LFA (ES, EL, FR, RO, BG, SK) and sometimes on small holdings 
(PL, RO), with objectives here similar to the RDR objectives. 

10.1.3.2 

Supplementary role and coherence of the measures 

The only really new measure was the French mutual fund (1).  

Indeed, Article 68 also allowed a high coverage of insurance measures in the concerned Member 
States  (FR,  IT,  NL,  HU).  However,  these  already  existed  under  limited  or  temporary  national 
insurance  mechanisms  as  well  as  most  of  the  other  measures  implemented,  including  either  the 
continuation of previous support of Pillar I, previous CNDPs or measures switched from the RDR 
to Article 68.  

When measures renewed support under Pillar I that had been stopped, it can be considered that 
Article 68 had a supplementary role. However, this raises an issue about the long-term viability 
of  the  support,  given  that  these  types  of  coupled  support were  supposed  to  end  after the  2003 
reform.  

In  the  case  of  measures  shifted  from  RDPs,  Article  68  provided  Member  States  room  for 
manoeuvre, by allowing them to implement other actions using the RDP budget. 

Portugal financed AEMs of the RDP for 2000-2006 that had been abandoned; Italy and Spain spread 
and put specific regional measures into widespread use; and France transferred budget from its AEM 

1 A mutual fund was also set up in Romania in 2014 and continued in the RDP 2014-2020. 

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for organic production to its ‘premium for grassland farming’ AEM. For all these examples, the 
tools thus already existed but the available RDP budget was not sufficient. As stated above, these 
measures were often the most relevant, since they were based on the model of similar RDP measures. 
However,  provisions  of  (1)(a)(v)  measures  rewarding  agri-environmental  benefits  were  poorly 
adapted,  since  budgets  could  not  be  managed  over  several  years  as  in  Pillar  II.  Furthermore, 
effectiveness  problems  may  arise  from  the  standardisation  of  the  level  of  payment  among  the 
concerned regions and from the lack of an commitment period of farmers over several years. 

Article 68 measures were generally coherent with measures of Pillar II and, in several cases, their 
actions  were  complementary  (RDR  modernisation  support  and  (1)(b)  specific  disadvantages 
measures or RDR AEMs and (1)(a)(v) agri-environment measures). However, as seen above, a 
coherence issue arose with LFA support of the RDR and (1)(b) specific disadvantages measures 
as they often targeted the same farmers and the Member States had the same specific objectives 
for applying those measures as was the case of LFA payments. The other main risks of overlapping 
arose with AEMs and food quality schemes measures of the RDR.  

In  the  majority  of  the  measures,  double-financing  was  prevented  by  specific  rules  or  mutual 
exclusion but, in several specific cases, demarcation between the measures was unclear. However, 
they do not represent a high share of Article 68 budget. Finally, demarcation between Article 68 and 
RDR measures sometimes led to remove incentives to produce organically, either because the level 
of  the  Specific  Support  was  higher  than  for  the  AEM  (1(b)  milk  measure  in  Poland),  or  for 
administrative  matters  (easier  application  and  faster  payments  in  the  case  of  the  durum  wheat 
measure in Greece). 

10.1.3.3  Optionality of the scheme 

Concerning the relevance of reallocating direct payments to specific sectors or farmers, there was 
generally a very low impact on the value of the SPS/SAPS decoupled payments. However, Article 
68 has not always been actually used to target specific disadvantages and needs, especially in the 
case of measures supporting competitiveness. 

Old Member States partly financed Article 68 by unused funds1 while, in the new Member States, 
Specific Support partly replaced previously coupled CNDP payments.  
One justification of the optional character was to target specific sectors coping with competitiveness 
disadvantages, yet Article 68 has not always been used to target specific disadvantages and needs, 
especially in the case of measures supporting competitiveness. Some measures – (a)(ii) quality and 
(b) specific disadvantages – were implemented with significant budgetary expenditure. However, 
they were targeted on farms which had a relatively high viability indicator compared to farms of the 
same sectors in Member States that did not implement the measure (applies to most measures in the 
dairy  sector,  Greek  and  Spanish  measures  in  cattle  and  sheep  and  goats  sectors).  Furthermore, 
several measures were not intended to target specific internal disadvantages, since recipient farms 
generally had better viability indicators than non-recipients in the same Member State (especially in 
the sectors of cattle and sheep and goats).  

The relevance of the optional character of the scheme depends on the type of measures. 

The  optional  character  was  relevant  for  risk  management  measures;  however,  the  pluri-annual 
budgetary framework of Pillar II would have been more suitable than annual budgets by providing 
more flexibility. 
In the case of environment measures:  

o  Optionality was relevant in the case of local environment issues, even though the second 
pillar would also have been more appropriate. As a matter of fact, instruments already exist 
in the RDR and appear more adapted (pluri-annual budget, regionalisation of the measure, 
enrolment of farmers over several years). 

1 i.e. unspent funds arising from the SPS execution or retention on the national reserve. This possibility was not available to New Member 
States applying the Single Area Payment Scheme. 

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o  By definition, it was less relevant in the case of general issues that need to be tackled at the 

EU level and should apply to all Member States. 

In the case of competitiveness measures:  

o 

o 

If the real objective was to provide local environmental and social amenities, optionality 
was justified, but Pillar II was more adapted to finance such objective. 
If the objective was to support transitional measures to improve the competitiveness of a 
sector, then optionality was relevant provided that the measures were well tailored to the 
needs. In that case, support may not generate any competition distortion. 

The efficiency of Article 68 as an optional instrument of the CAP is limited. The impacts of measures 
supporting competitiveness were limited (the support had low leverage effect on farm viability or on 
production level) and sometimes may have generated distortion of competition and deadweight effects.  
However 63% of budgetary expenditure was dedicated to these objectives. Concerning environmental 
objectives, effectiveness is assumed to be good for measures (1)(a)(v) agri-environment benefits, as they 
were  designed  as  the  AEMs  of  RDR,  but  low  for  measures  (1)(a)(i)  types  of  farming  protecting  or 
enhancing  the  environment.  Furthermore,  Article  68  generated  additional  administrative  burden, 
especially for quality measures. 

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10.2  LESSONS LEARNED 

  Some measures would have been more effective if implemented under CAP Pillar II 

Several  measures  implemented  under  Article  68  pursued  objectives  of  CAP  Pillar  II:  measures  with 
explicit  environmental  objectives  as  well  as  measures  with  implicit  environmental  and  territorial 
objectives, often supported by (1)(b) specific disadvantages measures. 

It would be more effective, efficient and coherent to implement these measures under Pillar II, in order 
to benefit from: 

- 

- 

the programing approach of CAP Pillar II, which provides a clear framework for analysing the 
needs, prioritises the measures and furthers synergies between measures; 
a multi-annual budgetary framework that allows more flexibility between the measures from 
one year to another and provides stability both in terms of budget and measures. This in turn 
can improve the effectiveness of measures such as the AEM by guaranteeing the commitment 
of farmers over several years for instance. 

In particular, measures set up under objective (1)(a)(v) and some (1)(a)(i) measures would have been 
more effective if they had been implemented under CAP Pillar II. This is also the case of (1)(b) measures 
targeting  LFA  and  other  specific  disadvantaged  areas,  whose  objectives  were  mainly  territorial  and 
environmental.  These  measures  aimed  at  improving  the  competitiveness  of  sectors  that  have  a  very 
limited capacity to be competitive in the long run. While public support to these sectors is justifiable, 
the rationale of such support should be to reward the social cohesion objectives or amenities generated 
rather than to maintain production as such. From this point of view, CAP Pillar II would be more suitable 
as a framework for designing the proper support.  

The implementation of such measures in CAP Pillar II would have required its budget to be increased 
to cover the extra-costs entailed.  

  Some measures should have included restructuring requirements 

Many (1)(b) specific disadvantages measures were channelled to sectors that had been supported for a 
long time. Even though a short-term support can be justified temporarily in order for a sector to maintain 
on the market, this raises the issue of the capacity of the sectors to stay on the market in the long run 
without the support. Hence, this support could have been more effective if it had been based not only on 
short-term analysis but also on long-term analysis of sectors’ weaknesses and needs. The scheme may 
thus include not only coupled support but restructuring measures in line with long-term strategies for 
the sectors.  

  The optional character was not justified for some measures 

When environmental issues at stake can be considered as general, which is the case of a significant share 
of  Article  68  environmental  measures  in  terms  of  expenditure,  it  would  be  relevant  to  extend  the 
obligation  to  tackle  these  issues  to  all  Member  States,  instead  of  leaving  the  decision  of  their 
implementation to the Member States as an optional mechanism. 

  The optional character of the Specific Support would have required setting clearer objectives 

Member States implemented very varied measures and made diverse interpretations of the notion of 
‘specific needs’, leading to poor levels of relevance and effectiveness for many measures. These results 
could have been improved by introducing approval by the EC of all the measures, but this would have 
considerably increased the administrative burden. Therefore, the best solution would have been to define 
much  more  precise  objectives  for  the  Specific  Support  as  well  as  stricter  implementation  rules  (for 
setting up, presenting and justifying to the EC and monitoring the measures). The definition of clearer 
objectives in the regulation as well as of a stricter implementation framework would have reduced the 
margin  for  interpreting  the  regulation  and  improved  the  relevance  of  the  measures.  Especially,  the 
evaluation  results  demonstrated  that  measures  may  distort  competition  among  EU  Member  States. 
Provisions should have been set for stricter targeting rules in the measure design. 

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doi: 10.2762/01565