Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL amending Regulations (EU) No 1305/2013 and (EU) No 1307/2013 as regards certain rules on direct payments and support for rural development in respect of the years 2019 and 2020
Date: 2018-12-07
Institutions: Directorate-General for Agriculture and Rural Development, European Commission
Subjects: EAFRD, EU Member State, EU direct payments, aid to agriculture, rural development

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   EUROPEAN COMMISSION  Brussels, 7.12.2018 COM(2018) 817 final 2018/0414 (COD)  Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL amending Regulations (EU) No 1305/2013 and (EU) No 1307/2013 as regards certain rules on direct payments and support for rural development in respect of the years 2019 and 2020   
 
 
EXPLANATORY MEMORANDUM 

1. 

• 

CONTEXT OF THE PROPOSAL 

Reasons for and objectives of the proposal 

This  proposal  aims  at  providing  certainty  and  continuity  in  the  granting  of  support  to 
European farmers in the years 2019 and 2020 by adapting two legislative acts of the Common 
Agricultural Policy (CAP).  

In  relation  to  rural  development,  certain  amendments  of  Regulation  (EU)  No  1305/2013 
(Rural Development Regulation) are needed to ensure the continuity of the policy in the final 
years  of  the  programming  period  and  a  smooth  passage  to  the  next  programming  period. 
These  amendments  concern  a  new  degressivity  schedule  for  phasing  out  payments  to  areas 
facing natural constraints other than mountain areas (ANC) and the use of EAFRD technical 
assistance at the initiative of the Commission for actions preparing the implementation of the 
future CAP. 

In  relation  to  direct  payments,  some  of  the  provisions  in  Regulation  (EU)  No  1307/2013 
(Direct  Payment  Regulation)  do  not  cover  calendar  year  2020  since  expenditure  relating  to 
calendar  year  2020  is  made  in  financial  year  2021,  which  is  the  first  year  of  the  new 
Multiannual  Financial  Framework  (MFF)  2021-2027.  At  the  time  of  adoption  of  the 
Regulation, it was therefore not possible to make commitments relating to the future MFF. In 
the absence of an amendment of Regulation (EU) No 1307/2013, some Member States would 
face disruptive financial implications as regards direct payments in calendar year 2020, going 
beyond  those  related  to  the  new  MFF  (MFF  2021-2027).  Those  Member  States  would  be 
faced with important changes in their direct payments and rural development envelopes with 
considerable effects on the payments to farmers under both pillars. In addition, other technical 
elements  are  added,  as  they  would  facilitate  implementation  of  the  current  legislative 
framework.  

• 

Consistency with existing policy provisions in the policy area 

The proposed amendments are consistent with the Rural Development Regulation and Direct 
Payment Regulation, therefore the proposal is consistent with the existing policy provisions of 
the CAP. 

• 

Consistency with other Union policies 

Not applicable 

2. 

• 

LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY 

Legal basis 

Articles 42 and 43(2) of the Treaty on the Functioning of the European Union (TFEU).  

• 

Subsidiarity (for non-exclusive competence)  

The TFEU provides that the competence for agriculture is shared between the Union and the 
Member  States.  The  Union  exercises  its  competence  through  the  adoption  of  various 
legislative  acts,  thereby  defining  and  implementing  an  EU  common  agricultural  policy  as 
provided  for  in  Article  38  to  44  of  the  Treaty  on  the  Functioning  of  the  European  Union. 
Regulations (EU) No 1305/2013 and (EU) No 1307/2013 set up a system for support for rural 
development  and  for  direct  payments  to  farmers.  According  to  Article  39  of  the  TFEU,  a 
treaty objective of the CAP is inter alia to ensure a fair standard of living for farmers and the 

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proposed  initiative  fits  within  this  objective.  Accordingly,  with  the  European  Agricultural 
Guarantee Fund (EAGF), the CAP funds direct payments and Regulation EU (No) 1307/2013 
regulates  the  payments  at  Union  level.  Rural  development  support  is  an  integral  part  of  the 
CAP and contributes to the CAP objectives as laid down in the Treaty on the Functioning of 
the  European  Union.  The  added  value  of  the  proposal  is  to  ensure  certainty  and  stability  of 
direct  income  support  for  European  farmers  in  the  year  2020  and  of  support  for  rural 
development in the final years of the current programming period. These objectives can only 
be  achieved  through  an  amendment  of  Regulations  (EU)  No  1305/2013  and  (EU)  No 
1307/2013 by the EU co-legislators. 

• 

Proportionality 

The proposal does not entail any new policy developments compared to the legislative acts it 
intends to amend. The proposal modifies the existing Regulations only to the extent necessary 
to achieve the objectives outlined above.  

• 

Choice of the instrument 

Since the original legislative acts are regulations of the European Parliament and the Council, 
the amendments must also be introduced as a European Parliament and Council regulation by 
means of the ordinary legislative procedure.  

3. 

RESULTS 
CONSULTATIONS AND IMPACT ASSESSMENTS 

EX-POST 

EVALUATIONS, 

OF 

STAKEHOLDER 

The  proposal  deviates  from  standard  practice  as  set  out  in  the  Better  Regulation  guidelines 
and  in  the  Toolbox.  A  derogation  to  the  standard  practice  is  necessary  for  the  following 
reasons:  

- the proposal is highly technical in its scope;  

- the initiative is confined to the final years of the current programming period; 

- it does not introduce new political commitments.  

An impact  assessment, public consultation  and a  roadmap are therefore not  suitable for this 
proposal.  Moreover,  as  the  legislation  needs  to  be  in  place  in  2019,  adoption  by  the  co-
legislators is urgent.  

• 

Ex-post evaluations/fitness checks of existing legislation 

Not applicable 

• 

Stakeholder consultations 

Not applicable 

• 

Collection and use of expertise 

Not applicable 

• 

Impact assessment 

Not applicable 

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• 

Regulatory fitness and simplification 

Not applicable 

• 

Fundamental rights 

The  proposal  respects  the  fundamental  rights  and  observes  the  principles  recognised  in 
particular by the Charter of Fundamental Rights of the European Union. 

4. 

BUDGETARY IMPLICATIONS 

The  proposed  option  for  Member  States  to  continue  the  current  flexibility  between  direct 
payments and rural development in calendar year 2020 (financial year 2021), and the transfer 
of the estimated product of reduction from direct payments to rural development in that year, 
may, subject to Member States’ decisions, affect the allocation between direct payments and 
rural development. However, any such transfer will be neutral in terms of overall budgetary 
commitments.  

Further  details  on  the  financial  implications  of  the  present  proposal  are  provided  in  the 
financial statement attached to the proposal. 

5. 

• 

OTHER ELEMENTS 

Implementation plans and monitoring, evaluation and reporting arrangements 

Not applicable 

• 

Explanatory documents (for directives) 

Not applicable 

• 

 

Detailed explanation of the specific provisions of the proposal 

Rural development 

The proposal makes it possible for the Member States to modify the degressivity schedule for 
payments  to  areas, which had  received such payments in  the previous programming  period, 
while in the ongoing period, not being classified anymore as areas facing natural constraints 
other than mountain  areas pursuant  to  Article 31(5) of Rural  Development  Regulation.  This 
modification follows the extension of the deadline for the new delimitation of such areas to 
2019  introduced  by  Regulation  (EU)  2017/2393,  which  implies,  by  the  end  of  the  ongoing 
programming  period,  a  shorter  adaptation  period  for  farmers  who  are  no  longer  eligible  for 
these payments. This modification would allow calculating transitional payments for the years 
2019  and  2020  based  on  payment  levels  of  the  2014-2020  period.  Furthermore,  the 
degressivity of the transitional payments shall be less steep as it shall be established by MS so 
that the end level is half of the starting level.  

The proposal  extends the use of the technical  assistance at  the initiative  of the Commission 
funded  by  the  European  Agricultural  Fund  for  Rural  Development  (EAFRD)  to  actions 
related to the preparation of the future CAP. The proposal concerns exclusively the scope of 
technical assistance without modifying the financial support. 

 

Flexibility  between  pillars  in  year  2020  and  transfer  of  the  product  of  reduction  of 
direct payments to Rural development 

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The proposal includes provisions regarding the possibility for Member States to transfer funds 
between pillars in calendar year 2020 (corresponding to financial year 2021). For the period 
2015-2019,  Member  States  had  the  possibility  to  transfer  amounts  from  direct  payments  to 
rural development and vice versa. Such flexibility for calendar year 2020/financial year 2021 
is not laid out under the rules in force. This financial mechanism is an important mechanism 
for  providing  Member  States  with  flexibility  in  managing  their  financial  envelopes,  and 
optimizing  the  use  of  available  funds.  Experience  shows  this  mechanism  has  proven  an 
effective  tool  for  Member  States  and  therefore  certain  Member  States  transfer  a  significant 
amount  between  the  two  pillars.  An  absence  of  flexibility  between  pillars  in  calendar  year 
2020/financial year 2021 would likely create serious financial disruptions for farmers in some 
Member  States,  as  the  effect  on  their  envelopes  could  be  significant.  Accordingly,  the 
proposal calls for a transfer between pillars to remain possible in calendar year 2020 under the 
same conditions as currently standing and that the estimated product of reduction continues to 
be transferred from direct payments to rural development. 

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2018/0414 (COD) 

Proposal for a 

REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 

amending Regulations (EU) No 1305/2013 and (EU) No 1307/2013 as regards certain 
rules on direct payments and support for rural development in respect of the years 2019 
and 2020  

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION, 

Having  regard  to  the  Treaty  on  the  Functioning  of  the  European  Union,  and  in  particular 
Article 42 and Article 43(2) thereof, 

Having regard to the proposal from the European Commission, 

After transmission of the draft legislative act to the national parliaments, 
Having regard to the opinion of the European Economic and Social Committee1, 

Acting in accordance with the ordinary legislative procedure, 

Whereas: 

(1) 

(2) 

1 
2 

3 

Regulation (EU) No 1305/2013 of the European Parliament and of the Council2 is the 
current legal framework for the support for rural development. It provides for support 
to areas facing natural constraints other than mountain areas. Taking into account the 
extension  to  2019  of  the  deadline  for  the  new  delimitation  of  areas  facing  natural 
constraints  other  than  mountain  areas  through  Regulation  (EU)  2017/2393  of  the 
European Parliament and of the Council3 and the shorter adaptation period for farmers 
who  will  no  longer  be  eligible  for  payments,  degressive  transitional  payments  that 
only start in 2019 should start at no more than 80% of the average payments fixed in 
the 2014-2020 programming period. The payment level should be established in such 
a way that the end level in 2020 is half of the starting level. 

In  order  to  provide  assistance  to  Member  States  and  stakeholders  for  the  timely 
preparation of the future Common Agricultural Policy (CAP) and to ensure a smooth 
passage  to  the  next  programming  period,  it  should  be  clarified  that  it  is  possible  to 
finance  activities  linked  to  the  preparation  of  the  future  CAP  through  technical 
assistance at the initiative of the Commission. 

OJ C , , p. . 
Regulation (EU) No 1305/2013 of the European Parliament and of the Council of 17 December 2013 on 
support for rural development by the European Agricultural Fund for Rural Development (EAFRD) and 
repealing Council Regulation (EC) No 1698/2005 (OJ L 347, 20.12.2013, p. 487).  
Regulation  (EU)  2017/2393  of  the  European  Parliament  and  of  the  Council  of  13  December  2017 
amending  Regulations  (EU)  No  1305/2013  on  support  for  rural  development  by  the  European 
Agricultural  Fund  for  Rural  Development  (EAFRD),  (EU)  1306/2013  on  the  financing,  management 
and  monitoring  of  the  common  agricultural  policy,  (EU)  1307/2013  establishing  rules  for  direct 
payment  to  farmers  under  support  schemes  within  the  framework  of  the  common  agricultural  policy, 
(EU)  No  1308/2013  establishing  a  common  organisation  of  the  markets  in  agricultural  products  and 
(EU)  No  652/2014  laying  down  provisions  for  the  management  of  expenditure  relating  to  the  food 
chain, animal health and animal welfare, and relating to plant health and plant reproductive material (OJ 
L 350, 29.12.2017, p. 15).  

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(3) 

(4) 

(5) 

(6) 

(7) 

(8) 

Regulation (EU) No 1307/2013 of the European Parliament and of the Council4 is the 
current legal framework for direct payments. While most of its provisions can apply as 
long as that Regulation remains in force, other provisions explicitly refer to calendar 
years 2015 to 2019 covered by the Multiannual Financial Framework 2014-2020. For 
some other provisions, their applicability beyond calendar year 2019 was not explicitly 
envisaged.  In  June  2018,  the  Commission  has  submitted  a  proposal  for  a  new 
Regulation aiming to replace Regulation (EU) No 1307/2013, but only from 1 January 
2021.  Therefore,  it  is  appropriate  to  proceed  to  some  technical  adjustments  of 
Regulation  (EU)  No  1307/2013  so  that  it  can  be  smoothly  applied  in  calendar  year 
2020. 

The obligation set  out  in  Article 11 of Regulation (EU) No 1307/2013  to reduce the 
part of the amount of direct payments to be granted to a farmer for a given calendar 
year exceeding EUR 150 000 continues to apply as long as that Regulation is in force. 
However,  currently,  that  Article  only  provides  a  notification  obligation  for  Member 
States as regards their decisions and the estimated product of this reduction for  years 
2015 to 2019. With a view to ensuring a continuation of the existing system, it should 
be set out that Member States are also to notify their decisions concerning year 2020 
and the estimated product of reduction for that year.  

Flexibility  between  pillars  is  an  optional  transfer  of  funds  between  direct  payments 
and  rural  development.  Under  current  Article  14  of  Regulation  (EU)  No  1307/2013, 
Member  States  may  make  use  of  this  flexibility  as  regards  calendar  years  2014  to 
2019.  In  order  to  ensure  that  Member  States  may  keep  their  own  strategy,  the 
flexibility  between  pillars  should  be  made  available  also  for  calendar  year  2020, 
corresponding to financial year 2021.  

As a consequence of the amendment of Article 14 of Regulation (EU) No 1307/2013 
in  respect  of  calendar  year  2020,  it  is  appropriate  to  adjust  the  references  to  that 
Article  in  the  context  of  the  obligation  of  the  Member  States  to  linearly  reduce  or 
increase  the  value  of  the  payment  entitlements  due  to  fluctuations  in  the  annual 
national  ceiling  resulting  from  their  notifications  of  the  application  of  flexibility 
between pillars. 

Regulations (EU) No 1305/2013 and (EU) No 1307/2013 should therefore be amended 
accordingly. 

In  order  to  promptly  provide  the  necessary  flexibility  to  the  Member  States  and  to 
ensure  the  continuity  of  the  rural  development  policy  in  the  final  years  of  the  2014-
2020 programming period, this Regulation should apply from 1 March 2019,  

HAVE ADOPTED THIS REGULATION: 

Article 1 

Amendments to Regulation (EU) No 1305/2013 

Regulation (EU) No 1305/2013 is amended as follows: 

(1) 

in Article 31(5), the following second subparagraph is inserted: 

4 

Regulation (EU) No 1307/2013 of the European Parliament and of the Council of 17 December 2013 
establishing  rules  for  direct  payments  to  farmers  under  support  schemes  within  the  framework  of  the 
common  agricultural  policy  and  repealing  Council  Regulation  (EC)  No  637/2008  and  Council 
Regulation (EC) No 73/2009 (OJ L 347, 20.12.2013, p. 608). 

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‘By way of derogation from the first subparagraph, where degressive payments start 
only in the year 2019, those payments shall start at no more than 80% of the average 
payment  fixed  in  the  2014-2020  programming  period.  The  payment  level  shall  be 
established  in  such  a  way  that  the  end  level  in  2020  is  half  of  the  starting  level.’; 

(2) 

in Article 51(1), the following second subparagraph is inserted: 

‘The EAFRD may finance activities preparing the implementation of the CAP in the 
subsequent programming period.’. 

Article 2 

Amendments to Regulation (EU) No 1307/2013 

Regulation (EU) No 1307/2013 is amended as follows: 

(1) 

 in Article 7, paragraph 2 is replaced by the following: 

‘2. For each Member State and for each calendar year, the estimated product of the 
reduction of payments referred to in Article 11 (which is reflected by the difference 
between  the  national  ceiling  set  out  in  Annex  II,  to  which  is  added  the  amount 
available in accordance with Article 58, and the net ceiling set out in Annex III) shall 
be made available as Union support financed under the European Agricultural Fund 
for Rural Development (EAFRD).’; 

(2) 

in Article 11(6), the following third subparagraph is added: 

‘For  the  year  2020,  Member  States  shall  notify  the  Commission  of  the  decisions 
taken in accordance with this Article and of any estimated product of reductions by 
31 December 2019.’; 

(3) 

Article 14 is amended as follows: 

(a) 

in paragraph 1, the following sixth subparagraph is added:  

‘By 31 December 2019, Member States may decide to make available, as additional 
support financed under the EAFRD in financial year 2021, up to 15 % of their annual 
national ceilings for calendar year 2020 set out in Annex II to this Regulation. As a 
result,  the  corresponding  amount  shall  no  longer  be  available  for  granting  direct 
payments. This decision shall be notified to the Commission by 31 December 2019 
and shall set out the percentage chosen.’; 

(b) 

in paragraph 2, the following sixth subparagraph is added:  

‘By  31  December  2019,  Member  States  may  decide  to  make  available  as  direct 
payments up to 15 % or, in the case of Bulgaria, Estonia, Spain,  Latvia, Lithuania, 
Poland, Portugal, Romania, Slovakia, Finland and Sweden up to 25 % of the amount 
allocated  to  support  financed  under  the  EAFRD  in  financial  year  2021  by  Union 
legislation  adopted  following  the  Regulation  adopted  by  the  Council  pursuant  to 

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Article 312(2) of the Treaty on the Functioning of the European Union. As a result, 
the corresponding amount shall no longer be available for support financed under the 
EAFRD.  This  decision  shall  be  notified  to  the  Commission  by  31  December  2019 
and shall set out the percentage chosen.’;  

(4) 

in Article 22, paragraph 5 is replaced by the following: 

‘5. If the ceiling for a Member State set by the Commission pursuant to paragraph 1 
is  different  from  that  of  the  previous  year  as  a  result  of  any  decision  taken  by  that 
Member  State  in  accordance  with  paragraph  3  of  this  Article,  Article  14(1)  or(2), 
Article 42(1), the second subparagraph of Article 49(1), the second subparagraph of 
Article 51(1), or Article 53, that Member State shall linearly reduce or increase the 
value of all payment entitlements in order to ensure compliance with paragraph 4 of 
this Article.’. 

Article 3 

Entry into force and application 

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

It shall apply from 1 March 2019.  

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

Done at Brussels, 

For the European Parliament 
The President 

For the Council 
The President

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LEGISLATIVE FINANCIAL STATEMENT 

FINANCIAL STATEMENT 

FS/18/CS/pl 5249450 

6.15.2018.1 

DATE: 13/09/2018 

1. 

2. 

3. 

4. 

BUDGET HEADING: current MFF: Heading 2, proposal for the MFF 2021 – 
2027: heading 3 
Draft Budget 2019: 
05 03 Direct payments after financial discipline: 
05 04 60 European Agricultural Fund for Rural development (EAFRD) (2014 
– 2020) 
TITLE: 
Proposal for a regulation of the European Parliament and of the Council amending  Regulations (EU) No 
1305/2013 and (EU) No 1307/2013 as regards the application of direct payments and support for rural 
development in respect of the years 2019 and 2020 

APPROPRIATIONS: 
in EUR million 

40 981.6 

14 673.6 

LEGAL BASIS: 
Article 42 and 43(2) of the Treaty on the Functioning of the European Union  

AIMS: 
This proposal aims at providing continuity in the granting of support to European farmers in the years 
2019 and 2020 by adapting two legislative acts of the Common Agricultural Policy (CAP): rural 
development under Regulation (EU) No 1305/2013 and direct payments under Regulation (EU) No 
1307/2013.  

12 MONTH 
PERIOD 

(EUR million) 

CURRENT 
FINANCIAL 
YEAR 
2018 
(EUR million) 
n.a. 

FOLLOWING 
FINANCIAL 
YEAR 
2019 
(EUR million) 
n.a. 

5. 

FINANCIAL IMPLICATIONS 

5.0 

5.1 

CHARGED TO THE EU BUDGET 

NATIONAL AUTHORITIES 
OTHER 

EXPENDITURE 
- 
(REFUNDS/INTERVENTIONS) 
- 
- 
REVENUE 
- 
(LEVIES/CUSTOMS DUTIES) 
NATIONAL 
- 

OWN RESOURCES OF THE EU  

2017 

2018 

2019 

2020 

5.0.1  ESTIMATED EXPENDITURE 
5.1.1  ESTIMATED REVENUE 
5.2  METHOD OF CALCULATION: 

See observations 

6.0 

6.1 

CAN THE PROJECT BE FINANCED FROM APPROPRIATIONS ENTERED IN THE 
RELEVANT CHAPTER OF THE CURRENT BUDGET? 

CAN THE PROJECT BE FINANCED BY TRANSFER BETWEEN CHAPTERS OF 
THE CURRENT BUDGET? 

6.2  WILL A SUPPLEMENTARY BUDGET BE NECESSARY? 
6.3  WILL APPROPRIATIONS NEED TO BE ENTERED IN FUTURE BUDGETS? 

n.a. 

n.a. 

NO 

YES (see 
observations
) 

OBSERVATIONS: 

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As regards support for rural development under Regulation (EU) No 1305/2013 (EAFRD), the proposal relates 
to financial years 2019 – 2021, whereas the proposed modifications for direct payments under Regulation (EU) 
No 1307/2013 relate to calendar year 2020/financial year 2021.  

The proposal does not have any financial implications in terms of increased expenditure.  

The effect of the proposed provisions giving Member States an option to transfer amounts between direct 
payments allocations in calendar year 2020/financial year 2021 and EAFRD in financial year 2021 as well as 
the transfer of the estimated product of reduction from direct payments in calendar year 2020 to EAFRD in 
financial year 2021 will depend on Member States’ implementation and can therefore not be quantified at 
present.  

Such transfers will in any case remain neutral with regard to overall commitment appropriations in the way that 
any deductions from the direct payments allocations will be off-set by a corresponding increase in the EAFRD 
allocations and vice versa.  

With regard to payment appropriations, if Member States’ implementation of these provisions would lead to a 
net transfer to EAFRD, it could lead to a slight postponement of payments from financial year 2021 to the 
following years, compared to the situation where Member States’ implementation would imply a net transfer 
towards direct payments allocations or no re-allocation at all.  

This effect can however not be quantified at this stage and is in any case expected to remain minimal. 

As an example, without prejudging Member States’ choices for calendar year 2020/financial year 2021, the 
flexibility in financial years 2018 and 2019 implies net transfers to EAFRD of respectively EUR 612 million 
and EUR 920 million. The transfer to EAFRD of the estimated product of reduction in the same financial years 
is respectively EUR 110 million and EUR 111 million.  

Given the past experience and the budgetary envelopes proposed for 2021-2027, a net transfer to the EAGF 
seems unlikely; however, it cannot be fully excluded at this stage. In such a case, in order to comply with the 
applicable ceilings, differentiated expenditure, such as the payments under the EAFRD, may need to be given a 
lower priority. 

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