Article 40 Value of payment entitlements
1. In the first year of implementation of the basic payment scheme, Member States shall calculate the unit value of payment entitlements by dividing a fixed percentage of the national ceiling set out in Annex II for each relevant year by the number of payment entitlements in the first year of implementation of the basic payment scheme, excluding those allocated from the national reserve or regional reserves. The fixed percentage referred to in the first subparagraph shall be calculated by dividing the national or regional ceiling for the basic payment scheme to be set in accordance with, respectively, Article 22(1) or Article 23(2) of this Regulation for the first year of implementation of the basic payment scheme, after applying the linear reduction provided for in paragraph 1 or, where applicable, paragraph 2 of Article 30 by the national ceiling set out in Annex II for the first year of implementation of the basic payment scheme. The payment entitlements shall be expressed in a number that corresponds to a number of hectares. 2. By way of derogation from the calculation method referred to in paragraph 1, Member States may decide to differentiate the value of payment entitlements in the first year of implementation of the basic payment scheme, excluding those allocated from the national reserve or regional reserves for each relevant year, on the basis of their initial unit value. 3. The initial unit value of payment entitlements referred to in paragraph 2 shall be set by dividing a fixed percentage of the total value of aid, excluding aid pursuant to Articles 41, 43, 48 and 50 and Title IV of this Regulation, received by a farmer in accordance with this Regulation for the calendar year preceding the implementation of the basic payment scheme, before the application of Article 63 of Regulation (EU) No 1306/2013, by the number of payment entitlements allocated to that farmer in the first year of implementation of the basic payment scheme, excluding those allocated from the national reserve or regional reserves. That fixed percentage shall be calculated by dividing the national or regional ceiling for the basic payment scheme to be set in accordance with, respectively, Article 22(1) or Article 23(2) of this Regulation for the first year of implementation of the basic payment scheme, after applying the linear reduction provided for in paragraph 1 or, where applicable, paragraph 2 of Article 30, by the total value of aid, excluding aid pursuant to Articles 41, 43, 48 and 50 and Title IV of this Regulation, granted for the calendar year preceding the implementation of the basic payment scheme within the Member State or region concerned, before the application of Article 63 of Regulation (EU) No 1306/2013. 4. When applying paragraph 2, Member States, acting in compliance with the general principles of Union law, shall move towards approximating the value of the payment entitlements at national or regional level. To this end, Member States shall fix the steps to be taken and the method of calculation to be used and shall notify them to the Commission by 1 August of the year preceding the implementation of the basic payment scheme. Those steps shall include annual progressive modifications of the initial value of payment entitlements referred to in paragraph 3 in accordance with objective and non-discriminatory criteria, starting from the first year of implementation of the basic payment scheme. In the first year of implementation of the basic payment scheme, Member States shall inform the farmers of the value of their entitlements, calculated in accordance with this Article, for each year of the period covered by this Regulation. 5. For the purposes of paragraph 3, a Member State may, on the basis of objective criteria, provide that, in cases of sale or grant or expiry of all or part of a lease of agricultural areas after the date fixed pursuant to Article 36(5) and before the date fixed pursuant to Article 33(1), the increase, or a part thereof, in the value of payment entitlements that would be allocated to the farmer concerned is to revert to the national reserve or regional reserves where the increase would lead to a windfall profit for the farmer concerned. Those objective criteria shall be established in such a way as to ensure the equal treatment of farmers and to avoid distortions of the market and of competition and shall include, at least, the following: (a) a minimum duration for the lease; (b) the proportion of the payment received which is to revert to the national reserve or regional reserves.
Amendment rationale: 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

EUROPEAN COMMISSIONBrussels, 7.12.2018COM(2018) 817 final2018/0414(COD)Proposal for aREGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCILamending 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 2020EXPLANATORY MEMORANDUM1.CONTEXT OF THE PROPOSAL•Reasons for and objectives of the proposalThis 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 areaThe 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 policiesNot applicable2.LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY•Legal basisArticles 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 forsupport 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 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.•ProportionalityThe 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 instrumentSince 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 OF EX-POST EVALUATIONS, STAKEHOLDER CONSULTATIONS AND IMPACT ASSESSMENTSThe 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 legislationNot applicable•Stakeholder consultationsNot applicable•Collection and use of expertiseNot applicable•Impact assessmentNot applicable•Regulatory fitness and simplificationNot applicable•Fundamental rightsThe proposal respects the fundamental rights and observes the principles recognised in particular by the Charter of Fundamental Rights of the European Union.4.BUDGETARY IMPLICATIONSThe 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 arrangementsNot applicable•Explanatory documents (for directives)Not applicable•Detailed explanation of the specific provisions of the proposal·Rural developmentThe 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 developmentThe 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.2018/0414 (COD)Proposal for aREGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCILamending 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 2020THE 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)Regulation (EU) No 1305/2013 of the European Parliament and of the Council2is 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 Council3and 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.(2)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.(3)Regulation (EU) No 1307/2013 of the European Parliament and of the Council4is 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.(4)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.(5)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.(6)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.(7)Regulations (EU) No 1305/2013 and (EU) No 1307/2013 should therefore be amended accordingly.(8)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,
Revised version (Article 40 Value of payment entitlements):
1. In the first year of implementation of the basic payment scheme, Member States shall calculate the unit value of payment entitlements by dividing a fixed percentage of the national ceiling set out in Annex II for each relevant year by the number of payment entitlements in the first year of implementation of the basic payment scheme, excluding those allocated from the national reserve or regional reserves. The fixed percentage referred to in the first subparagraph shall be calculated by dividing the national or regional ceiling for the basic payment scheme to be set in accordance with, respectively, Article 22(1) or Article 23(2) of this Regulation for the first year of implementation of the basic payment scheme, after applying the linear reduction provided for in paragraph 1 or, where applicable, paragraph 2 of Article 30 by the national ceiling set out in Annex II for the first year of implementation of the basic payment scheme. The payment entitlements shall be expressed in a number that corresponds to a number of hectares. 2. By way of derogation from the calculation method referred to in paragraph 1, Member States may decide to differentiate the value of payment entitlements in the first year of implementation of the basic payment scheme, excluding those allocated from the national reserve or regional reserves for each relevant year, on the basis of their initial unit value. 3. The initial unit value of payment entitlements referred to in paragraph 2 shall be set by dividing a fixed percentage of the total value of aid, excluding aid pursuant to Articles 41, 43, 48 and 50 and Title IV of this Regulation, received by a farmer in accordance with this Regulation for the calendar year preceding the implementation of the basic payment scheme, before the application of Article 63 of Regulation (EU) No 1306/2013, by the number of payment entitlements allocated to that farmer in the first year of implementation of the basic payment scheme, excluding those allocated from the national reserve or regional reserves. 4. When applying paragraph 2, Member States, acting in compliance with the general principles of Union law, shall move towards approximating the value of the payment entitlements at national or regional level. To this end, Member States shall fix the steps to be taken and the method of calculation to be used and shall notify them to the Commission by 1 August of the year preceding the implementation of the basic payment scheme. Those steps shall include annual progressive modifications of the initial value of payment entitlements referred to in paragraph 3 in accordance with objective and non-discriminatory criteria, starting from the first year of implementation of the basic payment scheme. In the first year of implementation of the basic payment scheme, Member States shall inform the farmers of the value of their entitlements, calculated in accordance with this Article, for each year of the period covered by this Regulation. 5. For the purposes of paragraph 3, a Member State may, on the basis of objective criteria, provide that, in cases of sale or grant or expiry of all or part of a lease of agricultural areas after the date fixed pursuant to Article 36(5) and before the date fixed pursuant to Article 33(1), the increase, or a part thereof, in the value of payment entitlements that would be allocated to the farmer concerned is to revert to the national reserve or regional reserves where the increase would lead to a windfall profit for the farmer concerned. Those objective criteria shall be established in such a way as to ensure the equal treatment of farmers and to avoid distortions of the market and of competition and shall include, at least, the following: (a) a minimum duration for the lease; (b) the proportion of the payment received which is to revert to the national reserve or regional reserves.
Article 41 General rules
1. Member States may decide by 1 August of any given year to grant, from the following year, an annual payment to farmers who are entitled to a payment under the basic payment scheme referred to in Sections 1, 2, 3 and 5 of Chapter 1 or under the single area payment scheme referred to in Section 4 of Chapter 1 ("the redistributive payment"). Member States shall notify the Commission of any such decision by the date referred to in the first subparagraph. 2. Member States which have decided to apply the basic payment scheme at regional level in accordance with Article 23 may apply the redistributive payment at regional level. 3. Without prejudice to the application of financial discipline, of reduction of payments in accordance with Article 11, of linear reductions as referred in Article 7 of this Regulation, and to the application of Article 63 of Regulation (EU) No 1306/2013, the redistributive payment shall be granted annually upon activation of payment entitlements by the farmer, or, in Member States applying Article 36 of this Regulation, upon declaration of eligible hectares by the farmer. 4. The redistributive payment shall be calculated each year by Member States by multiplying a figure to be set by the Member State, which shall not be higher than 65 % of the national or regional average payment per hectare, by the number of payment entitlements activated by the farmer in accordance with Article 33(1) or by the number of eligible hectares declared by the farmer in accordance with Article 36(2). The number of such payment entitlements or hectares shall not exceed a maximum to be set by Member States which shall not be higher than 30 hectares or the average size of agricultural holdings set out in Annex VIII if that average size exceeds 30 hectares in the Member State concerned. 5. Provided that the maximum limits set out in paragraph 4 are respected, Member States may, at national level, establish a graduation in the number of hectares set in accordance with that paragraph, which shall apply identically to all farmers. 6. The national average payment per hectare referred to in paragraph 4 of this Article shall be established by the Member States on the basis of the national ceiling set out in Annex II for calendar year 2019 and the number of eligible hectares declared in accordance with Article 33(1) or Article 36(2) in 2015. The regional average payment per hectare referred to in paragraph 4 of this Article shall be established by the Member States by using a share of the national ceiling set out in Annex II for calendar year 2019 and the number of eligible hectares declared in the region concerned in accordance with Article 33(1) in 2015. For each region, this share shall be calculated by dividing the respective regional ceiling set in accordance with Article 23(2) by the national ceiling set in accordance with Article 22(1), after applying the linear reduction provided for in paragraph 1 of Article 30 where paragraph 2 of that Article is not applied. 7. Member States shall ensure that no advantage provided for under this Chapter is granted to farmers in respect of whom it is established that, after 18 October 2011, they divided their holding with the sole purpose of benefiting from the redistributive payment. This shall also apply to farmers whose holdings result from that division. 8. In the case of a legal person, or a group of natural or legal persons, Member States may apply the maximum number of payment entitlements or hectares referred to in paragraph 4 at the level of the members of those legal persons or groups where national law provides for the individual members to assume rights and obligations comparable to those of individual farmers who have the status of a head of holding, in particular as regards their economic, social and tax status, provided that they have contributed to strengthening the agricultural structures of the legal persons or groups concerned.
Article 42 Financial provisions
1. In order to finance the redistributive payment, Member States may decide, by the date referred to in Article 41(1), to use up to 30 % of the annual national ceiling set out in Annex II. They shall notify the Commission of any such decision by that date. 2. On the basis of the percentage of the national ceiling to be used by Member States pursuant to paragraph 1 of this Article, the Commission shall adopt implementing acts fixing the corresponding ceilings for the redistributive payment on a yearly basis. Those implementing acts shall be adopted in accordance with the examination procedure referred to in Article 71(2).
Article 43 General rules
1. Farmers entitled to a payment under the basic payment scheme or the single area payment scheme shall observe, on all their eligible hectares within the meaning of Article 32(2) to (5), the agricultural practices beneficial for the climate and the environment referred to in paragraph 2 of this Article or the equivalent practices referred to in paragraph 3 of this Article. 2. The agricultural practices beneficial for the climate and the environment shall be the following: (a) crop diversification; (b) maintaining existing permanent grassland; and (c) having ecological focus area on the agricultural area. 3. The equivalent practices shall be those which include similar practices that yield an equivalent or higher level of benefit for the climate and the environment compared to one or several of the practices referred to in paragraph 2. Those equivalent practices and the practice or practices referred to in paragraph 2 to which they are equivalent are listed in Annex IX and shall be covered by any of the following: (a) commitments undertaken in accordance with either Article 39(2) of Regulation (EC) No 1698/2005 or Article 28(2) of Regulation (EU) No 1305/2013; (b) national or regional environmental certification schemes, including those for the certification of compliance with national environmental legislation, going beyond the relevant mandatory standards established pursuant to Chapter I of Title VI of Regulation (EU) No 1306/2013, which aim to meet objectives relating to soil and water quality, biodiversity, landscape preservation, and climate change mitigation and adaptation. Those certification schemes may include the practices listed in Annex IX to this Regulation, the practices referred to in paragraph 2 of this Article, or a combination of those practices. 4. The equivalent practices referred to in paragraph 3 shall not be the subject of double funding. 5. Member States may decide, including, where appropriate, at regional level, to restrict the choice of the farmers to use the options referred to in points (a) and (b) of paragraph 3. 6. Member States may decide, including, where appropriate, at regional level, that farmers shall carry out all of their relevant obligations under paragraph 1 in accordance with national or regional environmental certification schemes referred to in point (b) of paragraph 3. 7. Subject to the decisions of Member States referred to in paragraphs 5 and 6, a farmer may observe one or more of the practices referred to in point (a) of paragraph 3 only if these fully replace the related practice or practices referred to in paragraph 2. A farmer may use certification schemes referred to in point (b) of paragraph 3 only if these cover the entire obligation referred to in paragraph 1. 8. Member States shall notify the Commission of their decisions referred to in paragraphs 5 and 6 and of the specific commitments or certification schemes which they intend to apply as equivalent practices within the meaning of paragraph 3. The Commission shall assess whether the practices included in the specific commitments or certification schemes are covered by the list in Annex IX, and if it considers this not to be the case, notify Member States accordingly by means of implementing acts adopted without applying the procedure referred to in Article 71(2) or (3). Where the Commission notifies a Member State that those practices are not covered by the list in Annex IX, that Member State shall not recognise as equivalent practices within the meaning of paragraph 3 of this Article the specific commitments or certification schemes covered by the Commission notification. 9. Without prejudice to paragraphs 10 and 11 of this Article, to the application of financial discipline and of linear reductions in accordance with Article 7 of this Regulation and to the application of Article 63 of Regulation (EU) No 1306/2013, Member States shall grant the payment referred to in this Chapter to farmers who observe the practices referred to in paragraph 1 of this Article that are relevant for them, and to the extent that those farmers comply with Articles 44, 45 and 46 of this Regulation. This payment shall take the form of an annual payment per eligible hectare declared in accordance with Article 33(1) or Article 36(2), the amount of which shall be calculated annually by dividing the amount resulting from the application of Article 47 by the total number of eligible hectares declared in accordance with Article 33(1) or Article 36(2) in the Member State or the region concerned. By way of derogation from the second subparagraph, Member States deciding to apply Article 25(2) may decide to grant the payment referred to in this paragraph as a percentage of the total value of the payment entitlements that the farmer has activated in accordance with Article 33(1) for each relevant year. For each year and each Member State or region, that percentage shall be calculated by dividing the amount resulting from the application of Article 47 by the total value of all payment entitlements activated in accordance with Article 33(1) in that Member State or region. 10. Farmers whose holdings are fully or partly situated in areas covered by Directives 92/43/EEC, 2000/60/EC, or 2009/147/EC shall be entitled to the payment referred to in this Chapter provided that they observe the practices referred to in this Chapter to the extent that those practices are compatible in the holding concerned with the objectives of those Directives. 11. Farmers complying with the requirements laid down in Article 29(1) of Regulation (EC) No 834/2007 as regards organic farming shall be entitled ipso facto to the payment referred to in this Chapter. The first subparagraph shall apply only to the units of a holding that are used for organic production in accordance with Article 11 of Regulation (EC) No 834/2007. 12. The Commission shall be empowered to adopt delegated acts in accordance with Article 70: (a) adding equivalent practices to the list set out in Annex IX; (b) establishing appropriate requirements applicable to the national or regional certification schemes referred to in point (b) of paragraph 3 of this Article, including the level of assurance to be provided by those schemes; (c) establishing detailed rules for the calculation of the amount referred to in Article 28(6) of Regulation (EU) No 1305/2013 for the practices referred to in points 3 and 4 of Section I and point 7 of Section III of Annex IX to this Regulation, and any further equivalent practices added to that Annex pursuant to point (a) of this paragraph for which a specific calculation is needed in order to avoid double funding. 13. The Commission shall adopt implementing acts establishing rules on the procedure for the notifications, including on timetables for their submission, and the Commission assessment referred to in paragraph 8. Those implementing acts shall be adopted in accordance with the examination procedure referred to in Article 71(2).
Amendment rationale: 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

EUROPEAN COMMISSIONBrussels, 7.12.2018COM(2018) 817 final2018/0414(COD)Proposal for aREGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCILamending 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 2020EXPLANATORY MEMORANDUM1.CONTEXT OF THE PROPOSAL•Reasons for and objectives of the proposalThis 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 areaThe 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 policiesNot applicable2.LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY•Legal basisArticles 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 forsupport 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 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.•ProportionalityThe 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 instrumentSince 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 OF EX-POST EVALUATIONS, STAKEHOLDER CONSULTATIONS AND IMPACT ASSESSMENTSThe 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 legislationNot applicable•Stakeholder consultationsNot applicable•Collection and use of expertiseNot applicable•Impact assessmentNot applicable•Regulatory fitness and simplificationNot applicable•Fundamental rightsThe proposal respects the fundamental rights and observes the principles recognised in particular by the Charter of Fundamental Rights of the European Union.4.BUDGETARY IMPLICATIONSThe 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 arrangementsNot applicable•Explanatory documents (for directives)Not applicable•Detailed explanation of the specific provisions of the proposal·Rural developmentThe 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 developmentThe 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.2018/0414 (COD)Proposal for aREGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCILamending 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 2020THE 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)Regulation (EU) No 1305/2013 of the European Parliament and of the Council2is 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 Council3and 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.(2)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.(3)Regulation (EU) No 1307/2013 of the European Parliament and of the Council4is 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.(4)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.(5)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.(6)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.(7)Regulations (EU) No 1305/2013 and (EU) No 1307/2013 should therefore be amended accordingly.(8)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,
Revised version (Article 43 General rules):
1. Farmers entitled to a payment under the basic payment scheme or the single area payment scheme shall observe, on all their eligible hectares within the meaning of Article 32(2) to (5), the agricultural practices beneficial for the climate and the environment referred to in paragraph 2 of this Article or the equivalent practices referred to in paragraph 3 of this Article. 2. The agricultural practices beneficial for the climate and the environment shall be the following: (a) crop diversification; (b) maintaining existing permanent grassland; and (c) having ecological focus area on the agricultural area. 3. The equivalent practices shall be those which include similar practices that yield an equivalent or higher level of benefit for the climate and the environment compared to one or several of the practices referred to in paragraph 2. Those equivalent practices and the practice or practices referred to in paragraph 2 to which they are equivalent are listed in Annex IX and shall be covered by any of the following: (b) national or regional environmental certification schemes, including those for the certification of compliance with national environmental legislation, going beyond the relevant mandatory standards established pursuant to Chapter I of Title VI of Regulation (EU) No 1306/2013, which aim to meet objectives relating to soil and water quality, biodiversity, landscape preservation, and climate change mitigation and adaptation. Those certification schemes may include the practices listed in Annex IX to this Regulation, the practices referred to in paragraph 2 of this Article, or a combination of those practices. 4. The equivalent practices referred to in paragraph 3 shall not be the subject of double funding. 5. Member States may decide, including, where appropriate, at regional level, to restrict the choice of the farmers to use the options referred to in points (a) and (b) of paragraph 3. 6. Member States may decide, including, where appropriate, at regional level, that farmers shall carry out all of their relevant obligations under paragraph 1 in accordance with national or regional environmental certification schemes referred to in point (b) of paragraph 3. 7. Subject to the decisions of Member States referred to in paragraphs 5 and 6, a farmer may observe one or more of the practices referred to in point (a) of paragraph 3 only if these fully replace the related practice or practices referred to in paragraph 2. A farmer may use certification schemes referred to in point (b) of paragraph 3 only if these cover the entire obligation referred to in paragraph 1. 8. Member States shall notify the Commission of their decisions referred to in paragraphs 5 and 6 and of the specific commitments or certification schemes which they intend to apply as equivalent practices within the meaning of paragraph 3. The Commission shall assess whether the practices included in the specific commitments or certification schemes are covered by the list in Annex IX, and if it considers this not to be the case, notify Member States accordingly by means of implementing acts adopted without applying the procedure referred to in Article 71(2) or (3). Where the Commission notifies a Member State that those practices are not covered by the list in Annex IX, that Member State shall not recognise as equivalent practices within the meaning of paragraph 3 of this Article the specific commitments or certification schemes covered by the Commission notification. 9. Without prejudice to paragraphs 10 and 11 of this Article, to the application of financial discipline and of linear reductions in accordance with Article 7 of this Regulation and to the application of Article 63 of Regulation (EU) No 1306/2013, Member States shall grant the payment referred to in this Chapter to farmers who observe the practices referred to in paragraph 1 of this Article that are relevant for them, and to the extent that those farmers comply with Articles 44, 45 and 46 of this Regulation. By way of derogation from the second subparagraph, Member States deciding to apply Article 25(2) may decide to grant the payment referred to in this paragraph as a percentage of the total value of the payment entitlements that the farmer has activated in accordance with Article 33(1) for each relevant year. For each year and each Member State or region, that percentage shall be calculated by dividing the amount resulting from the application of Article 47 by the total value of all payment entitlements activated in accordance with Article 33(1) in that Member State or region. 10. Farmers whose holdings are fully or partly situated in areas covered by Directives 92/43/EEC, 2000/60/EC, or 2009/147/EC shall be entitled to the payment referred to in this Chapter provided that they observe the practices referred to in this Chapter to the extent that those practices are compatible in the holding concerned with the objectives of those Directives. 11. Farmers complying with the requirements laid down in Article 29(1) of Regulation (EC) No 834/2007 as regards organic farming shall be entitled ipso facto to the payment referred to in this Chapter. The first subparagraph shall apply only to the units of a holding that are used for organic production in accordance with Article 11 of Regulation (EC) No 834/2007. 12. The Commission shall be empowered to adopt delegated acts in accordance with Article 70: (a) adding equivalent practices to the list set out in Annex IX; (b) establishing appropriate requirements applicable to the national or regional certification schemes referred to in point (b) of paragraph 3 of this Article, including the level of assurance to be provided by those schemes; (c) establishing detailed rules for the calculation of the amount referred to in Article 28(6) of Regulation (EU) No 1305/2013 for the practices referred to in points 3 and 4 of Section I and point 7 of Section III of Annex IX to this Regulation, and any further equivalent practices added to that Annex pursuant to point (a) of this paragraph for which a specific calculation is needed in order to avoid double funding. 13. The Commission shall adopt implementing acts establishing rules on the procedure for the notifications, including on timetables for their submission, and the Commission assessment referred to in paragraph 8. Those implementing acts shall be adopted in accordance with the examination procedure referred to in Article 71(2).
Article 44 Crop diversification
1. Where the arable land of the farmer covers between 10 and 30 hectares and is not entirely cultivated with crops under water for a significant part of the year or for a significant part of the crop cycle, there shall be at least two different crops on that arable land. The main crop shall not cover more than 75 % of that arable land. Where the arable land of the farmer covers more than 30 hectares and is not entirely cultivated with crops under water for a significant part of the year or for a significant part of the crop cycle, there shall be at least three different crops on that arable land. The main crop shall not cover more than 75 % of that arable land and the two main crops together shall not cover more than 95 % of that arable land. 2. Without prejudice to the number of crops required pursuant to paragraph 1, the maximum thresholds set out therein shall not apply to holdings where grasses or other herbaceous forage or land lying fallow cover more than 75 % of the arable land. In such cases, the main crop on the remaining arable area shall not cover more than 75 % of that remaining arable land, except where this remaining area is covered by grasses or other herbaceous forage or land lying fallow. 3. Paragraphs 1 and 2 shall not apply to holdings: (a) where more than 75 % of the arable land is used for the production of grasses or other herbaceous forage, is land lying fallow, or is subject to a combination of these uses, provided that the arable area not covered by these uses does not exceed 30 hectares; (b) where more than 75 % of the eligible agricultural area is permanent grassland, is used for the production of grasses or other herbaceous forage or for the cultivation of crops under water for a significant part of the year or for a significant part of the crop cycle, or is subject to a combination of these uses, provided that the arable area not covered by these uses does not exceed 30 hectares; (c) where more than 50 % of the areas of arable land declared were not declared by the farmer in his aid application of the previous year and, where based on a comparison of the geo-spatial aid applications, all arable land is being cultivated with a different crop compared to that of the previous calendar year; (d) that are situated in areas north of 62nd parallel or certain adjacent areas. Where the arable land of such holdings covers more than 10 hectares, there shall be at least two crops on the arable land, and none of these crops shall cover more than 75 % of the arable land, unless the main crop is grasses or other herbaceous forage, or land lying fallow. 4. For the purposes of this Article, a "crop" means any of the following: (a) a culture of any of the different genera defined in the botanical classification of crops; (b) a culture of any of the species in the case of Brassicaceae, Solanaceae, and Cucurbitaceae ; (c) land lying fallow; (d) grasses or other herbaceous forage. Winter crop and spring crop shall be considered to be distinct crops even if they belong to the same genus. 5. The Commission shall be empowered to adopt delegated acts in accordance with Article 70: (a) recognising other types of genera and species than those referred to in paragraph 4 of this Article; and (b) laying down the rules concerning the application of the precise calculation of shares of different crops.
Amendment rationale: 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

EUROPEAN COMMISSIONBrussels, 7.12.2018COM(2018) 817 final2018/0414(COD)Proposal for aREGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCILamending 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 2020EXPLANATORY MEMORANDUM1.CONTEXT OF THE PROPOSAL•Reasons for and objectives of the proposalThis 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 areaThe 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 policiesNot applicable2.LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY•Legal basisArticles 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 forsupport 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 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.•ProportionalityThe 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 instrumentSince 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 OF EX-POST EVALUATIONS, STAKEHOLDER CONSULTATIONS AND IMPACT ASSESSMENTSThe 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 legislationNot applicable•Stakeholder consultationsNot applicable•Collection and use of expertiseNot applicable•Impact assessmentNot applicable•Regulatory fitness and simplificationNot applicable•Fundamental rightsThe proposal respects the fundamental rights and observes the principles recognised in particular by the Charter of Fundamental Rights of the European Union.4.BUDGETARY IMPLICATIONSThe 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 arrangementsNot applicable•Explanatory documents (for directives)Not applicable•Detailed explanation of the specific provisions of the proposal·Rural developmentThe 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 developmentThe 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.2018/0414 (COD)Proposal for aREGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCILamending 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 2020THE 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)Regulation (EU) No 1305/2013 of the European Parliament and of the Council2is 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 Council3and 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.(2)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.(3)Regulation (EU) No 1307/2013 of the European Parliament and of the Council4is 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.(4)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.(5)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.(6)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.(7)Regulations (EU) No 1305/2013 and (EU) No 1307/2013 should therefore be amended accordingly.(8)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,
Revised version (Article 44 Crop diversification):
1. Where the arable land of the farmer covers between 10 and 30 hectares and is not entirely cultivated with crops under water for a significant part of the year or for a significant part of the crop cycle, there shall be at least two different crops on that arable land. The main crop shall not cover more than 75 % of that arable land. Where the arable land of the farmer covers more than 30 hectares and is not entirely cultivated with crops under water for a significant part of the year or for a significant part of the crop cycle, there shall be at least three different crops on that arable land. The main crop shall not cover more than 75 % of that arable land and the two main crops together shall not cover more than 95 % of that arable land. 2. Without prejudice to the number of crops required pursuant to paragraph 1, the maximum thresholds set out therein shall not apply to holdings where grasses or other herbaceous forage or land lying fallow or cultivated with crops under water for a significant part of the year or for a significant part of the crop cycle cover more than 75 % of the arable land. In such cases, the main crop on the remaining arable area shall not cover more than 75 % of that remaining arable land, except where this remaining area is covered by grasses or other herbaceous forage or land lying fallow. 3. Paragraphs 1 and 2 shall not apply to holdings: (a) where more than 75 % of the arable land is used for the production of grasses or other herbaceous forage, is used for cultivation of leguminous crops, is land lying fallow or is subject to a combination of those uses; (b) where more than 75 % of the eligible agricultural area is permanent grassland, is used for the production of grasses or other herbaceous forage or for the cultivation of crops under water for a significant part of the year or for a significant part of the crop cycle, or is subject to a combination of those uses; (c) where more than 50 % of the areas of arable land declared were not declared by the farmer in his aid application of the previous year and, where based on a comparison of the geo-spatial aid applications, all arable land is being cultivated with a different crop compared to that of the previous calendar year; (d) that are situated in areas north of 62nd parallel or certain adjacent areas. Where the arable land of such holdings covers more than 10 hectares, there shall be at least two crops on the arable land, and none of these crops shall cover more than 75 % of the arable land, unless the main crop is grasses or other herbaceous forage, or land lying fallow. 4. For the purposes of this Article, a "crop" means any of the following: (a) a culture of any of the different genera defined in the botanical classification of crops; (b) a culture of any of the species in the case of Brassicaceae, Solanaceae, and Cucurbitaceae ; (c) land lying fallow; (d) grasses or other herbaceous forage. Winter crop and spring crop shall be considered to be distinct crops even if they belong to the same genus. Triticum spelta shall be considered to be a distinct crop from crops belonging to the same genus. 5. The Commission shall be empowered to adopt delegated acts in accordance with Article 70: (a) recognising other types of genera and species than those referred to in paragraph 4 of this Article; and (b) laying down the rules concerning the application of the precise calculation of shares of different crops.
Article 45 Permanent grassland
1. Member States shall designate permanent grasslands which are environmentally sensitive in areas covered by Directives 92/43/EEC or 2009/147/EC, including in peat and wetlands situated in these areas, and which need strict protection in order to meet the objectives of those Directives. Member States may, in order to ensure the protection of environmentally valuable permanent grasslands, decide to designate further sensitive areas situated outside areas covered by Directives 92/43/EEC or 2009/147/EC, including permanent grasslands on carbon-rich soils. Farmers shall not convert or plough permanent grassland situated in areas designated by Member States under the first subparagraph and, where applicable, the second subparagraph. 2. Member States shall ensure that the ratio of areas of permanent grassland to the total agricultural area declared by the farmers in accordance with point (a) of the first subparagraph of Article 72(1) of Regulation (EU) No 1306/2013 does not decrease by more than 5 % compared to a reference ratio to be established by Member States in 2015 by dividing areas of permanent grassland referred to in point (a) of the second subparagraph of this paragraph by the total agricultural area referred to in point (b) of that subparagraph. For the purposes of establishing the reference ratio referred to in the first subparagraph: (a) "areas of permanent grassland" means the land under permanent pasture declared in 2012, or 2013 in the case of Croatia, in accordance with Regulation (EC) No 73/2009 by the farmers subject to the obligations under this Chapter, as well as the areas of permanent grassland declared in 2015 in accordance with point (a) of the first subparagraph of Article 72(1) of Regulation (EU) No 1306/2013 by the farmers subject to the obligations under this Chapter that have not been declared as land under permanent pasture in 2012 or, in the case of Croatia, 2013; (b) "total agricultural area" means the agricultural area declared in 2015 in accordance with point (a) of the first subparagraph of Article 72(1) of Regulation (EU) No 1306/2013 by farmers subject to the obligations under this Chapter. The reference ratio of permanent grassland shall be recalculated in cases where farmers subject to the obligations under this Chapter have an obligation to reconvert an area into permanent grassland in 2015 or in 2016 in accordance with Article 93 of Regulation (EU) No 1306/2013. In such cases, these areas shall be added to the areas of permanent grassland referred to in point (a) of the second subparagraph of this paragraph. The ratio of permanent grassland shall be established each year on the basis of the areas declared by the farmers subject to the obligations under this Chapter for that year in accordance with point (a) of the first subparagraph of Article 72(1) of Regulation (EU) No 1306/2013. The obligation under this paragraph shall apply at national, regional or the appropriate sub-regional level. Member States may decide to apply an obligation to maintain permanent grassland at holding level in order to ensure that the ratio of permanent grassland does not decrease by more than 5 %. Member States shall notify the Commission of any such decision by 1 August 2014. Member States shall notify the reference ratio and the ratio referred to in this paragraph to the Commission. 3. Where it is established that the ratio referred to in paragraph 2 has decreased by more than 5 % at regional or sub-regional level or, where applicable, at national level, the Member State concerned shall impose obligations at holding level to reconvert land into permanent grassland for those farmers who have land at their disposal which was converted from land under permanent pasture or from permanent grassland into land for other uses during a period in the past. However, where the amount of areas of permanent grassland in absolute terms established in accordance with point (a) of the second subparagraph of paragraph 2 is maintained within certain limits, the obligation set out in the first subparagraph of paragraph 2 shall be considered to have been complied with. 4. Paragraph 3 shall not apply where the decrease below the threshold is the result of afforestation that is compatible with the environment and does not include plantations of short rotation coppice, Christmas trees or fast growing trees for energy production. 5. In order to ensure that the ratio of permanent grassland is maintained, the Commission shall be empowered to adopt delegated acts in accordance with Article 70 laying down detailed rules on maintenance of permanent grassland, including rules on reconversion in the case of non-respect of the obligation in paragraph 1 of this Article, rules applying to Member States for setting up obligations at holding level for maintaining permanent grassland as referred to in paragraphs 2 and 3 and any adjustment of the reference ratio referred to in paragraph 2 that may become necessary. 6. The Commission shall be empowered to adopt delegated acts in accordance with Article 70: (a) laying down the framework for the designation of further sensitive areas referred to in the second subparagraph of paragraph 1 of this Article; (b) establishing detailed methods for the determination of the ratio of permanent grassland and of the total agricultural area that has to be maintained pursuant to paragraph 2 of this Article; (c) defining the period in the past referred to in the first subparagraph of paragraph 3 of this Article. 7. The Commission shall adopt implementing acts fixing the limits referred to in the second subparagraph of paragraph 3 of this Article. Those implementing acts shall be adopted in accordance with the examination procedure referred to in Article 71(2).
Amendment rationale: 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

EUROPEAN COMMISSIONBrussels, 7.12.2018COM(2018) 817 final2018/0414(COD)Proposal for aREGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCILamending 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 2020EXPLANATORY MEMORANDUM1.CONTEXT OF THE PROPOSAL•Reasons for and objectives of the proposalThis 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 areaThe 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 policiesNot applicable2.LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY•Legal basisArticles 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 forsupport 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 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.•ProportionalityThe 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 instrumentSince 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 OF EX-POST EVALUATIONS, STAKEHOLDER CONSULTATIONS AND IMPACT ASSESSMENTSThe 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 legislationNot applicable•Stakeholder consultationsNot applicable•Collection and use of expertiseNot applicable•Impact assessmentNot applicable•Regulatory fitness and simplificationNot applicable•Fundamental rightsThe proposal respects the fundamental rights and observes the principles recognised in particular by the Charter of Fundamental Rights of the European Union.4.BUDGETARY IMPLICATIONSThe 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 arrangementsNot applicable•Explanatory documents (for directives)Not applicable•Detailed explanation of the specific provisions of the proposal·Rural developmentThe 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 developmentThe 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.2018/0414 (COD)Proposal for aREGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCILamending 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 2020THE 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)Regulation (EU) No 1305/2013 of the European Parliament and of the Council2is 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 Council3and 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.(2)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.(3)Regulation (EU) No 1307/2013 of the European Parliament and of the Council4is 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.(4)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.(5)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.(6)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.(7)Regulations (EU) No 1305/2013 and (EU) No 1307/2013 should therefore be amended accordingly.(8)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,
Revised version (Article 45 Permanent grassland):
1. Member States shall designate permanent grasslands which are environmentally sensitive in areas covered by Directives 92/43/EEC or 2009/147/EC, including in peat and wetlands situated in these areas, and which need strict protection in order to meet the objectives of those Directives. Member States may, in order to ensure the protection of environmentally valuable permanent grasslands, decide to designate further sensitive areas situated outside areas covered by Directives 92/43/EEC or 2009/147/EC, including permanent grasslands on carbon-rich soils. Farmers shall not convert or plough permanent grassland situated in areas designated by Member States under the first subparagraph and, where applicable, the second subparagraph. For the purposes of establishing the reference ratio referred to in the first subparagraph: The reference ratio of permanent grassland shall be recalculated in cases where farmers subject to the obligations under this Chapter have an obligation to reconvert an area into permanent grassland in 2015 or in 2016 in accordance with Article 93 of Regulation (EU) No 1306/2013. In such cases, these areas shall be added to the areas of permanent grassland referred to in point (a) of the second subparagraph of this paragraph. The obligation under this paragraph shall apply at national, regional or the appropriate sub-regional level. Member States may decide to apply an obligation to maintain permanent grassland at holding level in order to ensure that the ratio of permanent grassland does not decrease by more than 5 %. Member States shall notify the Commission of any such decision by 1 August 2014. Member States shall notify the reference ratio and the ratio referred to in this paragraph to the Commission. 3. Where it is established that the ratio referred to in paragraph 2 has decreased by more than 5 % at regional or sub-regional level or, where applicable, at national level, the Member State concerned shall impose obligations at holding level to reconvert land into permanent grassland for those farmers who have land at their disposal which was converted from land under permanent pasture or from permanent grassland into land for other uses during a period in the past. However, where the amount of areas of permanent grassland in absolute terms established in accordance with point (a) of the second subparagraph of paragraph 2 is maintained within certain limits, the obligation set out in the first subparagraph of paragraph 2 shall be considered to have been complied with. 4. Paragraph 3 shall not apply where the decrease below the threshold is the result of afforestation that is compatible with the environment and does not include plantations of short rotation coppice, Christmas trees or fast growing trees for energy production. 5. In order to ensure that the ratio of permanent grassland is maintained, the Commission shall be empowered to adopt delegated acts in accordance with Article 70 laying down detailed rules on maintenance of permanent grassland, including rules on reconversion in the case of non-respect of the obligation in paragraph 1 of this Article, rules applying to Member States for setting up obligations at holding level for maintaining permanent grassland as referred to in paragraphs 2 and 3 and any adjustment of the reference ratio referred to in paragraph 2 that may become necessary. 6. The Commission shall be empowered to adopt delegated acts in accordance with Article 70: (a) laying down the framework for the designation of further sensitive areas referred to in the second subparagraph of paragraph 1 of this Article; (b) establishing detailed methods for the determination of the ratio of permanent grassland and of the total agricultural area that has to be maintained pursuant to paragraph 2 of this Article; (c) defining the period in the past referred to in the first subparagraph of paragraph 3 of this Article. 7. The Commission shall adopt implementing acts fixing the limits referred to in the second subparagraph of paragraph 3 of this Article. Those implementing acts shall be adopted in accordance with the examination procedure referred to in Article 71(2).
Article 46 Ecological focus area
1. Where the arable land of a holding covers more than 15 hectares, the farmer shall ensure that, from 1 January 2015, an area corresponding to at least 5 % of the arable land of the holding that the farmer declared in accordance with point (a) of the first subparagraph of Article 72(1) of Regulation (EU) No 1306/2013 and, if they are considered to be ecological focus area by the Member State in accordance with paragraph 2 of this Article, including the areas mentioned in points (c), (d), (g) and (h) of that paragraph is ecological focus area. The percentage referred to in the first subparagraph of this paragraph shall be increased from 5 % to 7 % subject to a legislative act of the European Parliament and of the Council in accordance with Article 43(2) TFEU. By 31 March 2017, the Commission shall present an evaluation report on the implementation of the first subparagraph of this paragraph accompanied, where appropriate, by a proposal for a legislative act as referred to in the second subparagraph. 2. By 1 August 2014, Member States shall decide that one or more of the following are to be considered to be ecological focus area: (a) land lying fallow; (b) terraces; (c) landscape features, including such features adjacent to the arable land of the holding which, by way of derogation from Article 43(1) of this Regulation, may include landscape features that are not included in the eligible area in accordance with point (c) of Article 76(2) of Regulation (EU) No 1306/2013; (d) buffer strips, including buffer strips covered by permanent grassland, provided that these are distinct from adjacent eligible agricultural area; (e) hectares of agro-forestry that receive, or have received, support under Article 44 of Regulation (EC) No 1698/2005 and/or Article 23 of Regulation (EU) No 1305/2013; (f) strips of eligible hectares along forest edges; (g) areas with short rotation coppice with no use of mineral fertiliser and/or plant protection products; (h) afforested areas referred to in point (b)(ii) of Article 32(2) of this Regulation; (i) areas with catch crops, or green cover established by the planting and germination of seeds, subject to the application of weighting factors referred to in paragraph 3 of this Article; (j) areas with nitrogen-fixing crops. With the exception of the areas of the holding referred to in points (g) and (h) of the first subparagraph of this paragraph, the ecological focus area shall be located on the arable land of the holding. In the case of areas mentioned in points (c) and (d) of the first subparagraph of this paragraph, the ecological focus area may also be adjacent to the arable land of the holding the farmer declared in accordance with point (a) of the first subparagraph of Article 72(1) of Regulation (EU) No 1306/2013. 3. In order to simplify administration and to take account of the characteristics of the types of ecological focus area listed in the first subparagraph of paragraph 2, as well as to facilitate their measurement, Member States may, when calculating the total hectares represented by the ecological focus area of the holding, make use of the conversion and/or weighting factors set out in Annex X. If a Member State decides to consider to be ecological focus area the area under point (i) of the first subparagraph of paragraph 2 or any other area that is subject to a weighting of less than 1, the use of the weighting factors set out in Annex X shall be mandatory. 4. Paragraph 1 shall not apply to holdings: (a) where more than 75 % of the arable land is used for the production of grasses or other herbaceous forage, is land lying fallow, is used for cultivation of leguminous crops, or is subject to a combination of those uses, provided that the arable area not covered by those uses does not exceed 30 hectares; (b) where more than 75 % of the eligible agricultural area is permanent grassland, is used for the production of grasses or other herbaceous forage or for the cultivation of crops under water either for a significant part of the year or for a significant part of the crop cycle, or is subject to a combination of those uses, provided that the arable area not covered by these uses does not exceed 30 hectares. 5. Member States may decide to implement up to half of the percentage points of the ecological focus area referred to in paragraph 1 at regional level in order to obtain adjacent ecological focus areas. Member States shall designate the areas and the obligations of participating farmers or groups of farmers. The aim of the designation of areas and obligations shall be to underpin the implementation of Union policies on the environment, climate and biodiversity. 6. Member States may decide to allow farmers whose holdings are in close proximity to fulfil the obligation referred to in paragraph 1 collectively ("collective implementation"), provided that the ecological focus areas concerned are contiguous. In order to underpin the implementation of Union policies on the environment, climate and biodiversity, Member States may designate the areas on which collective implementation is possible and may impose further obligations upon farmers or groups of farmers participating in such collective implementation. Each farmer participating in collective implementation shall ensure that at least 50 % of the area subject to the obligation in paragraph 1 is located on the land of his holding and is in accordance with the second subparagraph of paragraph 2. The number of farmers participating in such collective implementation shall not exceed ten. 7. Member States with more than 50 % of their total land surface area covered by forest may decide that paragraph 1 of this Article shall not apply to holdings situated in areas designated by those Member States as areas facing natural constraints in accordance with point (a) or (b) of Article 32(1) of Regulation (EU) No 1305/2013, provided that more than 50 % of the land surface area of the unit referred to in the second subparagraph of this paragraph is covered by forest and the ratio of forest land to agricultural land is higher than 3:1. The area covered by forest and the ratio of forest land to agricultural land shall be assessed on an area level equivalent to the LAU2 level or on the level of another clearly delineated unit which covers a single clear contiguous geographical area having similar agricultural conditions. 8. Member States shall notify the Commission of the decisions referred to in paragraph 2 by 1 August 2014, and of any decisions referred to in paragraphs 3, 5, 6 or 7 by 1 August of the year preceding their application. 9. The Commission shall be empowered to adopt delegated acts in accordance with Article 70: (a) laying down further criteria for the types of areas referred to in paragraph 2 of this Article to qualify as ecological focus area; (b) adding other types of areas than those referred to in paragraph 2 that can be taken into account for the purpose of respecting the percentage referred to in paragraph 1; (c) adapting Annex X in order to establish the conversion and weighting factors referred to in paragraph 3 and in order to take into account the criteria and/or types of areas to be defined by the Commission under points (a) and (b) of this paragraph; (d) setting rules for the implementation referred to in paragraphs 5 and 6, including the minimum requirements on such implementation; (e) establishing the framework within which Member States are to define the criteria to be met by holdings in order to be considered to be in close proximity for the purposes of paragraph 6; (f) establishing the methods for determination of the percentage of total land surface area covered by forest and the ratio of forest land to agricultural land referred to in paragraph 7.
Amendment rationale: 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

EUROPEAN COMMISSIONBrussels, 7.12.2018COM(2018) 817 final2018/0414(COD)Proposal for aREGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCILamending 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 2020EXPLANATORY MEMORANDUM1.CONTEXT OF THE PROPOSAL•Reasons for and objectives of the proposalThis 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 areaThe 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 policiesNot applicable2.LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY•Legal basisArticles 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 forsupport 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 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.•ProportionalityThe 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 instrumentSince 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 OF EX-POST EVALUATIONS, STAKEHOLDER CONSULTATIONS AND IMPACT ASSESSMENTSThe 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 legislationNot applicable•Stakeholder consultationsNot applicable•Collection and use of expertiseNot applicable•Impact assessmentNot applicable•Regulatory fitness and simplificationNot applicable•Fundamental rightsThe proposal respects the fundamental rights and observes the principles recognised in particular by the Charter of Fundamental Rights of the European Union.4.BUDGETARY IMPLICATIONSThe 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 arrangementsNot applicable•Explanatory documents (for directives)Not applicable•Detailed explanation of the specific provisions of the proposal·Rural developmentThe 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 developmentThe 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.2018/0414 (COD)Proposal for aREGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCILamending 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 2020THE 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)Regulation (EU) No 1305/2013 of the European Parliament and of the Council2is 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 Council3and 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.(2)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.(3)Regulation (EU) No 1307/2013 of the European Parliament and of the Council4is 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.(4)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.(5)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.(6)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.(7)Regulations (EU) No 1305/2013 and (EU) No 1307/2013 should therefore be amended accordingly.(8)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,
Revised version (Article 46 Ecological focus area):
The percentage referred to in the first subparagraph of this paragraph shall be increased from 5 % to 7 % subject to a legislative act of the European Parliament and of the Council in accordance with Article 43(2) TFEU. By 31 March 2017, the Commission shall present an evaluation report on the implementation of the first subparagraph of this paragraph accompanied, where appropriate, by a proposal for a legislative act as referred to in the second subparagraph. 2. By 1 August 2014, Member States shall decide that one or more of the following are to be considered to be ecological focus area: (a) land lying fallow; (b) terraces; (d) buffer strips, including buffer strips covered by permanent grassland, provided that these are distinct from adjacent eligible agricultural area; hectares of agro-forestry that receive, or have received, support under Article 44 of Regulation (EC) No 1698/2005 and/or Article 23 of Regulation (EU) No 1305/2013; (f) strips of eligible hectares along forest edges; (g) areas with short rotation coppice with no use of mineral fertiliser and/or plant protection products; (i) areas with catch crops, or green cover established by the planting and germination of seeds, subject to the application of weighting factors referred to in paragraph 3 of this Article; (j) areas with nitrogen-fixing crops; (k) areas with Miscanthus ; (l) areas with Silphium perfoliatum ; (m) land lying fallow for melliferous plants (pollen and nectar rich species). 3. In order to simplify administration and to take account of the characteristics of the types of ecological focus area listed in the first subparagraph of paragraph 2, as well as to facilitate their measurement, Member States may, when calculating the total hectares represented by the ecological focus area of the holding, make use of the conversion and/or weighting factors set out in Annex X. If a Member State decides to consider to be ecological focus area the area under point (i) of the first subparagraph of paragraph 2 or any other area that is subject to a weighting of less than 1, the use of the weighting factors set out in Annex X shall be mandatory. 4. Paragraph 1 shall not apply to holdings: (a) where more than 75 % of the arable land is used for the production of grasses or other herbaceous forage, is land lying fallow, is used for cultivation of leguminous crops, or is subject to a combination of those uses; (b) where more than 75 % of the eligible agricultural area is permanent grassland, is used for the production of grasses or other herbaceous forage or for the cultivation of crops under water either for a significant part of the year or for a significant part of the crop cycle, or is subject to a combination of those uses. 5. Member States may decide to implement up to half of the percentage points of the ecological focus area referred to in paragraph 1 at regional level in order to obtain adjacent ecological focus areas. Member States shall designate the areas and the obligations of participating farmers or groups of farmers. The aim of the designation of areas and obligations shall be to underpin the implementation of Union policies on the environment, climate and biodiversity. 6. Member States may decide to allow farmers whose holdings are in close proximity to fulfil the obligation referred to in paragraph 1 collectively ("collective implementation"), provided that the ecological focus areas concerned are contiguous. In order to underpin the implementation of Union policies on the environment, climate and biodiversity, Member States may designate the areas on which collective implementation is possible and may impose further obligations upon farmers or groups of farmers participating in such collective implementation. Each farmer participating in collective implementation shall ensure that at least 50 % of the area subject to the obligation in paragraph 1 is located on the land of his holding and is in accordance with the second subparagraph of paragraph 2. The number of farmers participating in such collective implementation shall not exceed ten. The area covered by forest and the ratio of forest land to agricultural land shall be assessed on an area level equivalent to the LAU2 level or on the level of another clearly delineated unit which covers a single clear contiguous geographical area having similar agricultural conditions. 8. Member States shall notify the Commission of the decisions referred to in paragraph 2 by 1 August 2014, and of any decisions referred to in paragraphs 3, 5, 6 or 7 by 1 August of the year preceding their application. 9. The Commission shall be empowered to adopt delegated acts in accordance with Article 70: (a) laying down further criteria for the types of areas referred to in paragraph 2 of this Article to qualify as ecological focus area; (b) adding other types of areas than those referred to in paragraph 2 that can be taken into account for the purpose of respecting the percentage referred to in paragraph 1; adapting Annex X in order to establish the conversion and weighting factors referred to in paragraph 3 and in order to take into account the criteria and/or types of areas to be defined by the Commission under points (a) and (b) of this paragraph; (d) setting rules for the implementation referred to in paragraphs 5 and 6, including the minimum requirements on such implementation; (e) establishing the framework within which Member States are to define the criteria to be met by holdings in order to be considered to be in close proximity for the purposes of paragraph 6; (f) establishing the methods for determination of the percentage of total land surface area covered by forest and the ratio of forest land to agricultural land referred to in paragraph 7.
Article 47 Financial provisions
1. In order to finance the payment referred to in this Chapter, Member States shall use 30 % of the annual national ceiling set out in Annex II. 2. Member States shall apply the payment referred to in this Chapter at national level. Member States applying Article 23 may decide to apply the payment at regional level. In such cases, they shall use in each region a share of the ceiling set pursuant to paragraph 3 of this Article. For each region, this share shall be calculated by dividing the respective regional ceiling set in accordance with Article 23(2) by the national ceiling set in accordance with Article 22(1), after applying the linear reduction provided for in paragraph 1 of Article 30 where paragraph 2 of that Article is not applied. 3. The Commission shall adopt implementing acts fixing the corresponding ceilings for the payment referred to in this Chapter on a yearly basis. Those implementing acts shall be adopted in accordance with the examination procedure referred to in Article 71(2).
Article 48 General rules
1. Member States may grant a payment to farmers who are entitled to a payment under the basic payment scheme or the single area payment scheme referred to in Chapter 1 and whose holdings are fully or partly situated in areas with natural constraints designated by Member States in accordance with Article 32(1) of Regulation (EU) No 1305/2013 ("payment for areas with natural constraints"). 2. Member States may decide to grant the payment for areas with natural constraints to all areas falling within the scope of paragraph 1, or to restrict the payment to some of those areas on the basis of objective and non-discriminatory criteria. 3. Without prejudice to paragraph 2 of this Article, to the application of financial discipline, of reduction of payments in accordance with Article 11 and of linear reduction in accordance with Article 7 of this Regulation, and to the application of Article 63 of Regulation (EU) No 1306/2013, the payment for areas with natural constraints shall be granted annually per eligible hectare situated in the areas for which a Member State has decided to grant a payment in accordance with paragraph 2 of this Article. It shall be paid upon activation of payment entitlements in respect of those hectares held by the farmer concerned or, in Member States applying Article 36 of this Regulation, upon declaration of those eligible hectares by the farmer concerned. 4. The payment for areas with natural constraints, per hectare, shall be calculated by dividing the amount resulting from the application of Article 49 by the number of eligible hectares declared in accordance with Article 33(1) or Article 36(2) which are situated in the areas for which a Member State has decided to grant a payment in accordance with paragraph 2 of this Article. Member States may, on the basis of objective and non-discriminatory criteria, also set a maximum number of hectares per holding for which support under this Chapter can be granted. 5. Member States may apply the payment for areas with natural constraints at regional level under the conditions laid down in this paragraph provided that they identified the regions concerned in accordance with objective and non-discriminatory criteria and, in particular, their natural constraint characteristics, including the severity of the constraints, and their agronomic conditions. Member States shall divide the national ceiling referred to in Article 49(1) between the regions in accordance with objective and non-discriminatory criteria. The payment for areas with natural constraints at regional level shall be calculated by dividing the regional ceiling calculated in accordance with the second subparagraph of this paragraph by the number of eligible hectares declared in the respective region in accordance with Article 33(1) or Article 36(2) which are situated in the areas for which a Member State has decided to grant a payment in accordance with paragraph 2 of this Article.
Article 49 Financial provisions
1. In order to finance the payment for areas with natural constraints, Member States may decide, by 1 August 2014, to use up to 5 % of their annual national ceiling set out in Annex II. They shall notify the Commission of any such decision by that date. Member States may, by 1 August 2016, review their decision and amend it with effect from 1 January 2017. They shall notify the Commission of any such decision by 1 August 2016. 2. On the basis of the percentage of the national ceiling to be used by Member States pursuant to paragraph 1, the Commission shall adopt implementing acts fixing the corresponding ceilings for the payment for areas with natural constraints on a yearly basis. Those implementing acts shall be adopted in accordance with the examination procedure referred to in Article 71(2).
Article 50 General rules
1. Member States shall grant an annual payment to young farmers who are entitled to a payment under the basic payment scheme or the single area payment scheme referred to in Chapter 1 ("payment for young farmers"). 2. For the purposes of this Chapter, 'young farmers', means natural persons: (a) who are setting up for the first time an agricultural holding as head of the holding, or who have already set up such a holding during the five years preceding the first submission of an application under the basic payment scheme or the single area payment scheme referred to in Article 72(1) of Regulation (EU) No 1306/2013; and (b) who are no more than 40 years of age in the year of submission of the application referred to in point (a). 3. Member States may define further objective and non-discriminatory eligibility criteria for young farmers applying for the payment for young farmers as regards appropriate skills and/or training requirements. 4. Without prejudice to the application of financial discipline, of reduction of payments in accordance with Article 11 and of linear reductions in accordance with Article 7 of this Regulation, and to the application of Article 63 of Regulation (EU) No 1306/2013, the payment for young farmers shall be granted annually upon activation of payment entitlements by the farmer or, in Member States applying Article 36 of this Regulation, upon declaration of eligible hectares by the farmer. 5. The payment for young farmers shall be granted per farmer for a maximum period of five years. That period shall be reduced by the number of years elapsed between the setting up referred to in point (a) of paragraph 2 and the first submission of the application for the payment for young farmers. 6. Each year, Member States not applying Article 36 shall calculate the amount of the payment for young farmers by multiplying the number of entitlements the farmer has activated in accordance with Article 32(1) by a figure corresponding to: (a) 25 % of the average value of the owned or leased-in payment entitlements held by the farmer; or (b) 25 % of an amount calculated by dividing a fixed percentage of the national ceiling for the calendar year 2019 set out in Annex II by the number of all eligible hectares declared in 2015 in accordance with Article 33(1). That fixed percentage shall be equal to the share of the national ceiling remaining for the basic payment scheme in accordance with Article 22(1) for 2015. 7. Member States applying Article 36 shall each year calculate the amount of the payment for young farmers by multiplying a figure corresponding to 25 % of the single area payment calculated in accordance with Article 36 by the number of eligible hectares that the farmer has declared in accordance with Article 36(2). 8. By way of derogation from the paragraphs 6 and 7, Member States may calculate each year the amount of the payment for young farmers by multiplying a figure corresponding to 25 % of the national average payment per hectare by the number of entitlements that the farmer has activated in accordance with Article 32(1), or by the number of eligible hectares that the farmer has declared in accordance with Article 36(2). The national average payment per hectare shall be calculated by dividing the national ceiling for the calendar year 2019 set out in Annex II by the number of eligible hectares declared in 2015 in accordance with Article 33(1) or Article 36(2). 9. Member States shall set a single maximum limit applicable to the number of payment entitlements activated by the farmer or to the number of eligible hectares declared by the farmer. That limit shall not be below 25 or above 90. Member States shall respect that limit when applying paragraphs 6, 7 and 8. 10. Instead of applying paragraphs 6 to 9, Member States may allocate an annual lump sum amount per farmer calculated by multiplying a fixed number of hectares by a figure corresponding to 25 % of the national average payment per hectare, as established in accordance with paragraph 8. The fixed number of hectares referred to in the first subparagraph of this paragraph shall be calculated by dividing the total number of eligible hectares declared pursuant to Article 33(1) or Article 36(2) by the young farmers applying for the payment for young farmers in 2015 by the total number of young farmers applying for that payment in 2015. A Member State may recalculate the fixed number of hectares in any year after 2015 in the case of significant changes in the number of young farmers applying for the payment or in the size of the holdings of young farmers, or both. The annual lump sum amount that a farmer may be granted shall not exceed the total amount of his basic payment before application of Article 63 of Regulation (EU) No 1306/2013 in the given year. 11. In order to guarantee the protection of the rights of beneficiaries and to avoid discrimination among them, the Commission shall be empowered to adopt delegated acts in accordance with Article 70 concerning the conditions under which a legal person may be considered to be eligible to receive the payment for young farmers.
Amendment rationale: 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

EUROPEAN COMMISSIONBrussels, 7.12.2018COM(2018) 817 final2018/0414(COD)Proposal for aREGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCILamending 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 2020EXPLANATORY MEMORANDUM1.CONTEXT OF THE PROPOSAL•Reasons for and objectives of the proposalThis 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 areaThe 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 policiesNot applicable2.LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY•Legal basisArticles 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 forsupport 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 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.•ProportionalityThe 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 instrumentSince 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 OF EX-POST EVALUATIONS, STAKEHOLDER CONSULTATIONS AND IMPACT ASSESSMENTSThe 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 legislationNot applicable•Stakeholder consultationsNot applicable•Collection and use of expertiseNot applicable•Impact assessmentNot applicable•Regulatory fitness and simplificationNot applicable•Fundamental rightsThe proposal respects the fundamental rights and observes the principles recognised in particular by the Charter of Fundamental Rights of the European Union.4.BUDGETARY IMPLICATIONSThe 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 arrangementsNot applicable•Explanatory documents (for directives)Not applicable•Detailed explanation of the specific provisions of the proposal·Rural developmentThe 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 developmentThe 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.2018/0414 (COD)Proposal for aREGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCILamending 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 2020THE 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)Regulation (EU) No 1305/2013 of the European Parliament and of the Council2is 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 Council3and 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.(2)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.(3)Regulation (EU) No 1307/2013 of the European Parliament and of the Council4is 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.(4)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.(5)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.(6)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.(7)Regulations (EU) No 1305/2013 and (EU) No 1307/2013 should therefore be amended accordingly.(8)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,
Revised version (Article 50 General rules):
1. Member States shall grant an annual payment to young farmers who are entitled to a payment under the basic payment scheme or the single area payment scheme referred to in Chapter 1 ("payment for young farmers"). 2. For the purposes of this Chapter, 'young farmers', means natural persons: who are setting up for the first time an agricultural holding as head of the holding, or who have already set up such a holding during the five years preceding the first submission of an application under the basic payment scheme or the single area payment scheme referred to in Article 72(1) of Regulation (EU) No 1306/2013; and (b) who are no more than 40 years of age in the year of submission of the application referred to in point (a). 3. Member States may define further objective and non-discriminatory eligibility criteria for young farmers applying for the payment for young farmers as regards appropriate skills and/or training requirements. 4. Without prejudice to the application of financial discipline, of reduction of payments in accordance with Article 11 and of linear reductions in accordance with Article 7 of this Regulation, and to the application of Article 63 of Regulation (EU) No 1306/2013, the payment for young farmers shall be granted annually upon activation of payment entitlements by the farmer or, in Member States applying Article 36 of this Regulation, upon declaration of eligible hectares by the farmer. 5. The payment for young farmers shall be granted per farmer for a period of five years, starting from the first submission of the application for the payment for young farmers provided that that submission takes place within the five years following the setting up referred to in point (a) of paragraph 2. That period of five years shall also apply for farmers who have received payment for young farmers in respect of claims before claim year 2018. By way of derogation from the second sentence of the first subparagraph, Member States may decide that, for those young farmers who set up in accordance with point (a) of paragraph 2 in the period 2010-2013, the five-year period is to be reduced by the number of years which have elapsed between the setting up referred to in point (a) of paragraph 2 and the first submission of the application for the payment for young farmers. 6. Each year, Member States not applying Article 36 shall calculate the amount of the payment for young farmers by multiplying the number of entitlements the farmer has activated in accordance with Article 32(1) by a figure corresponding to: (a) between 25 % and 50 % of the average value of the owned or leased-in payment entitlements held by the farmer; or (b) between 25 % and 50 % of an amount calculated by dividing a fixed percentage of the national ceiling for the calendar year 2019 set out in Annex II by the number of all eligible hectares declared in 2015 in accordance with Article 33(1). That fixed percentage shall be equal to the share of the national ceiling remaining for the basic payment scheme in accordance with Article 22(1) for 2015. 7. Member States applying Article 36 shall each year calculate the amount of the payment for young farmers by multiplying a figure corresponding to a value between 25 % and 50 % of the single area payment calculated in accordance with Article 36 by the number of eligible hectares that the farmer has declared in accordance with Article 36(2). 8. By way of derogation from paragraphs 6 and 7 of this Article, Member States may calculate each year the amount of the payment for young farmers by multiplying a figure corresponding to a value between 25 % and 50 % of the national average payment per hectare by the number of entitlements that the farmer has activated in accordance with Article 32(1), or by the number of eligible hectares that the farmer has declared in accordance with Article 36(2). The national average payment per hectare shall be calculated by dividing the national ceiling for the calendar year 2019 set out in Annex II by the number of eligible hectares declared in 2015 in accordance with Article 33(1) or Article 36(2). 9. Member States shall set a single maximum limit applicable to the number of payment entitlements activated by the farmer or to the number of eligible hectares declared by the farmer. That limit shall not be below 25 or above 90. Member States shall respect that limit when applying paragraphs 6, 7 and 8. 10. Instead of applying paragraphs 6 to 9, Member States may allocate an annual lump sum amount per farmer calculated by multiplying a fixed number of hectares by a figure corresponding to a value between 25 % and 50 % of the national average payment per hectare, as established in accordance with paragraph 8. The fixed number of hectares referred to in the first subparagraph of this paragraph shall be calculated by dividing the total number of eligible hectares declared pursuant to Article 33(1) or Article 36(2) by the young farmers applying for the payment for young farmers in 2015 by the total number of young farmers applying for that payment in 2015. A Member State may recalculate the fixed number of hectares in any year after 2015 in the case of significant changes in the number of young farmers applying for the payment or in the size of the holdings of young farmers, or both. The annual lump sum amount that a farmer may be granted shall not exceed the total amount of his basic payment before application of Article 63 of Regulation (EU) No 1306/2013 in the given year. 11. In order to guarantee the protection of the rights of beneficiaries and to avoid discrimination among them, the Commission shall be empowered to adopt delegated acts in accordance with Article 70 concerning the conditions under which a legal person may be considered to be eligible to receive the payment for young farmers.
Article 51 Financial provisions
1. In order to finance the payment for young farmers, Member States shall use a percentage, which shall not be higher than 2 %, of the annual national ceiling set out in Annex II. The Member States shall notify the Commission, by 1 August 2014, of the estimated percentage necessary to finance that payment. Member States may, by 1 August of each year, revise their estimated percentage with effect from the subsequent year. They shall notify the Commission of the revised percentage by 1 August of the year preceding its application. 2. Without prejudice to the maximum of 2 % laid down in paragraph 1 of this Article, where the total amount of the payment for young farmers applied for in a Member State in a particular year exceeds the ceiling set pursuant to paragraph 4 of this Article, and where that ceiling is lower than that maximum, that Member State shall finance the difference by applying point (f) of the first subparagraph of Article 30(7) in the relevant year, by applying a linear reduction to all payments to be granted to all farmers in accordance with Article 32 or Article 36(2), or by both means. 3. Where the total amount of the payment for young farmers applied for in a Member State in a particular year exceeds the ceiling set pursuant to paragraph 4 of this Article, and where that ceiling amount to 2 % of the annual national ceiling set out in Annex II, Member States shall apply a linear reduction to the amounts to be paid pursuant to Article 50 in order to comply with that ceiling. 4. On the basis of the percentage notified by Member States pursuant to paragraph 1 of this Article, the Commission shall adopt implementing acts fixing the corresponding ceilings for the payment for young farmers on a yearly basis. Those implementing acts shall be adopted in accordance with the examination procedure referred to in Article 71(2).
Article 52 General rules
1. Member States may grant coupled support to farmers under the conditions laid down in this Chapter (in this Chapter referred to as "coupled support"). 2. Coupled support may be granted to the following sectors and productions: cereals, oilseeds, protein crops, grain legumes, flax, hemp, rice, nuts, starch potato, milk and milk products, seeds, sheepmeat and goatmeat, beef and veal, olive oil, silkworms, dried fodder, hops, sugar beet, cane and chicory, fruit and vegetables and short rotation coppice. 3. Coupled support may only be granted to those sectors or to those regions of a Member State where specific types of farming or specific agricultural sectors that are particularly important for economic, social or environmental reasons undergo certain difficulties. 4. By way of derogation from paragraph 3, coupled support may also be granted to farmers who: (a) on 31 December 2014, have payment entitlements granted in accordance with Section 2 of Chapter 3 of Title III and Article 71m of Regulation (EC) No 1782/2003 and in accordance with Article 60 and the fourth paragraph of Article 65 of Regulation (EC) No 73/2009; and (b) have at their disposal no eligible hectares for the activation of payment entitlements under the basic payment scheme as referred to in Chapter 1 of Title III of this Regulation. 5. Coupled support may only be granted to the extent necessary to create an incentive to maintain current levels of production in the sectors or regions concerned. 6. Coupled support shall take the form of an annual payment and shall be granted within defined quantitative limits and be based on fixed areas and yields or on a fixed number of animals. 7. In the case of a legal person, or a group of natural or legal persons, Member States may apply the limits referred to in paragraph 6 at the level of the members of those legal persons or groups where national law provides for the individual members to assume rights and obligations comparable to those of individual farmers who have the status of a head of holding, in particular as regards their economic, social and tax status, provided that they have contributed to strengthening the agricultural structures of the legal persons or groups concerned. 8. Any coupled support granted under this Article shall be consistent with other Union measures and policies. 9. In order to ensure efficient and targeted use of Union funds and to avoid double funding under other similar support instruments, the Commission shall be empowered to adopt delegated acts in accordance with Article 70 laying down: (a) the conditions for granting coupled support; (b) rules on consistency with other Union measures and on the cumulation of support.
Amendment rationale: 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

EUROPEAN COMMISSIONBrussels, 7.12.2018COM(2018) 817 final2018/0414(COD)Proposal for aREGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCILamending 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 2020EXPLANATORY MEMORANDUM1.CONTEXT OF THE PROPOSAL•Reasons for and objectives of the proposalThis 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 areaThe 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 policiesNot applicable2.LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY•Legal basisArticles 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 forsupport 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 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.•ProportionalityThe 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 instrumentSince 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 OF EX-POST EVALUATIONS, STAKEHOLDER CONSULTATIONS AND IMPACT ASSESSMENTSThe 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 legislationNot applicable•Stakeholder consultationsNot applicable•Collection and use of expertiseNot applicable•Impact assessmentNot applicable•Regulatory fitness and simplificationNot applicable•Fundamental rightsThe proposal respects the fundamental rights and observes the principles recognised in particular by the Charter of Fundamental Rights of the European Union.4.BUDGETARY IMPLICATIONSThe 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 arrangementsNot applicable•Explanatory documents (for directives)Not applicable•Detailed explanation of the specific provisions of the proposal·Rural developmentThe 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 developmentThe 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.2018/0414 (COD)Proposal for aREGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCILamending 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 2020THE 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)Regulation (EU) No 1305/2013 of the European Parliament and of the Council2is 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 Council3and 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.(2)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.(3)Regulation (EU) No 1307/2013 of the European Parliament and of the Council4is 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.(4)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.(5)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.(6)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.(7)Regulations (EU) No 1305/2013 and (EU) No 1307/2013 should therefore be amended accordingly.(8)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,
Revised version (Article 52 General rules):
1. Member States may grant coupled support to farmers under the conditions laid down in this Chapter (in this Chapter referred to as "coupled support"). 2. Coupled support may be granted to the following sectors and productions: cereals, oilseeds, protein crops, grain legumes, flax, hemp, rice, nuts, starch potato, milk and milk products, seeds, sheepmeat and goatmeat, beef and veal, olive oil, silkworms, dried fodder, hops, sugar beet, cane and chicory, fruit and vegetables and short rotation coppice. 3. Coupled support may only be granted to those sectors or to those regions of a Member State where specific types of farming or specific agricultural sectors that are particularly important for economic, social or environmental reasons undergo certain difficulties. 4. By way of derogation from paragraph 3, coupled support may also be granted to farmers who: on 31 December 2014, have payment entitlements granted in accordance with Section 2 of Chapter 3 of Title III and Article 71m of Regulation (EC) No 1782/2003 and in accordance with Article 60 and the fourth paragraph of Article 65 of Regulation (EC) No 73/2009; and (b) have at their disposal no eligible hectares for the activation of payment entitlements under the basic payment scheme as referred to in Chapter 1 of Title III of this Regulation. 6. Coupled support is a production-limiting scheme that shall take the form of an annual payment based on fixed areas and yields or on a fixed number of animals and shall respect financial ceilings to be determined by Member States for each measure and notified to the Commission. 7. In the case of a legal person, or a group of natural or legal persons, Member States may apply the limits referred to in paragraph 6 at the level of the members of those legal persons or groups where national law provides for the individual members to assume rights and obligations comparable to those of individual farmers who have the status of a head of holding, in particular as regards their economic, social and tax status, provided that they have contributed to strengthening the agricultural structures of the legal persons or groups concerned. 8. Any coupled support granted under this Article shall be consistent with other Union measures and policies. 9. In order to ensure efficient and targeted use of Union funds and to avoid double funding under other similar support instruments, the Commission shall be empowered to adopt delegated acts in accordance with Article 70 laying down: (a) the conditions for granting coupled support; (b) rules on consistency with other Union measures and on the cumulation of support. 10. The Commission is empowered to adopt delegated acts in accordance with Article 70 supplementing this Regulation as regards measures in order to avoid beneficiaries of voluntary coupled support suffering from structural market imbalances in a sector. Those delegated acts may allow Member States to decide that such support may continue to be paid until 2020 on the basis of the production units for which voluntary coupled support was granted in a past reference period.