Article 4 
and the additional co-responsibility levy provided for in Article 4 b (2) of Council Regulation (EEC) No 2727/75 of 29 October 1975 on the common organization of the market in cereals (9), as last amended by Regulation (EEC) 3577/90 (10); Whereas the European Council has requested the Commission to explore all possibilities of stepping up the use of agricultural raw materials for non-food ends; Whereas possibilities for non-food use are sufficiently advanced, technically and economically, in the case of cereals; Whereas the realization of such possibilities enables farmers to turn towards new outlets; whereas, in order to encourage them in this direction, cereals must be made available at attractive prices; Whereas, however, such new uses must not lead to an increase in production of cereals, thereby leading to further surpluses; Whereas the existing aid scheme to encourage the set-aside of arable land should accordingly be adjusted by providing for specific aid for the use of arable land for non-food ends; Whereas an aid scheme, designed to encourage farmers to embark upon conversion and extensification of production, may contribute towards adjusting the various production sectors to market requirements, in particular those in which there is surplus; Whereas provision should be made for compensation, on the basis of the actual reduction in production due to extensification or conversion, allowing for the maintenance of the incomes of farmers who have undertaken to reduce production; Whereas agricultural structure in the Community is typified by the existence of a large number of holdings which lack the structural conditions which would ensure a fair income and living conditions; Whereas, in the future, the only holdings capable of adjusting to economic conditions will be those on which the farmer has adequate vocational skill and competence, and on which profitability is verified by accounts and by a physical improvement plan; Whereas the aim of Community investment aid is to modernize agricultural holdings and thus improve their competitiveness in the context of the rational development of agricultural production; whereas this aspect of the structural policy must be adjusted so as to permit the modernization and diversification of agriculture while remaining consistent with the measures taken to limit surplus production; Whereas, in order to qualify for Community investment aid, a farmer must normally practise farming as his main occupation, that is, he must devote at least half of his working time to his holding and derive at least half of his income therefrom; whereas investment aid should, however, be extended to persons who do not practise farming as their main occupation, provided that on their holding they engage in forestry, tourism or craft activities or activities designed to safeguard the environment and maintain the countryside; Whereas, in the present economic situation, investment aid should be concentrated on holdings where the labour income is less than comparable incomes, and which therefore are in greatest need of such aid; Whereas the adjustment of farm structures by an improvement in productivity resulting in an increase in production is confronted by insurmountable limits because of the existing state of the market for many agricultural products; whereas investment aid is intended not only to increase production capacity but also to improve the quality of production facilities; whereas it appears necessary to concentrate such aid on those investments which allow for a reduction in production costs and for the improvement in living and working conditions or which aim at conversion of production; whereas such aid may also be granted for investments aimed at finding new sources of income, such as tourism or craft activities or the farm-based manufacture and sale of farm products, and to investments aimed at improving conditions for the hygiene and welfare of animals and at safeguarding and improving the environment; Whereas, in addition, the objective of market balance in the Community requires that specific conditions be attached to the granting of investment aid in the pig, milk and beef and veal production sectors; whereas it is indispensable in accordance with this objective to prohibit investment aid in the poultrymeat and egg sectors; Whereas the grant of specific benefits to young farmers may facilitate not only their installation but also the structural adjustment of their holding after their first installation; Whereas the keeping of accounts is essential to the correct assessment of the finanical and economic situation of holdings, and in particular of those undergoing modernization; whereas a financial incentive may encourage the keeping of accounts; Whereas, in the interests of rational production and of improvement in living conditions, encouragement should also be given to the formation of groups having as their purpose mutual aid between holdings, including the use of new technologies and practices for safeguarding and improving the environment and preserving the countryside and to the formation of groups which would introduce alternative farming practices such as organic techniques, integrated crop-protection techniques, extensive techniques or a more rational joint use of agricultural means of production, or group farming operations; Whereas in the same context it is also necessary to encourage the creation of agricultural associations whose objective is the establishment of replacement and management services; Whereas, on the basis of Directive 75/268/EEC of 28 April 1975 on mountain and hill farming and farming in certain less-favoured areas (11), as last amended by Regulation (EEC) No 797/85, the Council has adopted the Community lists of mountain and certain less-favoured areas, for which special measures adapted to their situation should be enacted at Community level, in particular in order to take account of the natural conditions of production and to ensure reasonable incomes for farmers in these regions; Whereas it may be essential, if the objectives assigned to farming in less-favoured regions are to be attained, that farmers permanently engaged in agriculture in such areas be paid annual allowances aimed at compensation for the permanent natural handicaps referred to in Directive 75/268/EEC; whereas it should be left to Member States to fix the amount of such allowances according to the severity of the handicaps involved and taking account of the economic situation and farmers' incomes within the limits and conditions fixed for the different types of areas, both as to the amounts which may be paid and the types of production which may be covered; Whereas, in order to reduce the drawbacks both in terms of markets and the environment, the allowance should be granted for only 1.4 livestock units (LU) per hectare of the total forage area of the holding; whereas, in addition, as regards the maximum amount of Community aid per holding, the administrative difficulties should be overcome by replacing the existing scheme by a simpler one designed to concentrate the Community's efforts on those holdings which are in greatest need, that is, the Community contribution would be restricted to the equivalent of 120 units, be they livestock units or area units; Whereas the rationalization of holdings and the need to preserve the countryside necessitate the granting of aid for joint investment schemes in the areas covered by the compensatory allowance in particular for fodder production and for land improvement and capital equipment for pasture and hill grazing; Whereas farmers in areas that are sensitive from the point of view of protection of the environment or preservation of the landscape are in a position to perform a valuable service to society as a whole; whereas the introduction of specific measures may encourage farmers to introduce or retain agricultural production practices that are compatible with the increased need to protect or preserve the countryside and at the same time help, by means of reorientation of their holdings, towards realization of the agricultural policy objective of restoring balance on the market in certain products; Whereas the market situation for agricultural products, and the limitations for the adjustment of farm structures resulting therefrom, require that the agricultural measures be complemented by special forestry measures to assist these holdings, such as the afforestation of farm land and improving the exploitation of wooded areas; Whereas an annual premium per hectare afforested, to compensate for the loss of income due to the afforestation of agricultural land, may encourage farmers to afforest such land; Whereas it should be for the Member States to lay down the conditions governing the afforestation of agricultural land; Whereas the forestry measures are normally linked and can contribute - to the conservation and improvement of the soil, the fauna and flora and to the surface and underground water systems, - to the productivity of agricultural land by an improvement of the natural conditions of agricultural production and to better use of farm labour; Whereas the evolution and the specialization of agriculture require a substantial improvement in the standard of the general, technical and economic training for the existing farm population, especially as regards new orientations of management, of production, or of marketing, as well as for young people about to be installed or recently installed on a holding; Whereas the insufficient financial means available for vocational training and further training, and, in particular, that of the leaders and managers of cooperatives and agricultural groups, impedes the structural adjustment of agriculture in many regions; Whereas, in accordance with the principles of the reform of the Structural Funds, and in particular with Article 5 and 11 of Regulation (EEC) No 2052/88, the EAGGF cofinances national aid schemes by reimbursing expenditure incurred by Member States; whereas the rate of Community part-financing may be differentiated on the basis of the criteria and within the limits laid down in Article 13 of the said Regulation; whereas these rates are to be determined by the Commission; Whereas, although the scheme for set-aside falls within the common measure for improving the efficiency of agricultural structures its main aim is nonetheless to help in re-establishing the balance between output and the market's capacity to absorb it; whereas the scheme is thus intended to supplement measures adopted by the Council under the various market organizations in order to stabilize those markets; whereas it should therefore be laid down that the scheme for set-aside is to be financed in equal parts from the Guarantee and Guidance Sections of the EAGGF; whereas, however, in order to facilitate the administrative and financial management of the scheme and by way of exception, the financial methods applying to the Guarantee Section should be applied for expenditure financed by the Guidance Section; Whereas, for the purposes of administrative management, Member States should be authorized to lay down additional conditions for the execution of the Member States provided for in this Regulation; Whereas to facilitate structural change in the agricultural sector in the territory of the former German Democratic Republic, involving both the creation of family farms and the reorganization of cooperative farms, provision must be made for some temporary adjustments to the rules on the acceleration of structural adjustment in the context of the reform of the common agricultural policy, HAS ADOPTED THIS REGULATION: Article 1 1. With a view to expediting the adjustment of agricultural structures in the Community pursuant to Objective 5 (a) as set out in Article 1 of Regulation (EEC) No 2052/88, a common measure within the meaning of Article 2 (1) of Regulation (EEC) No 4256/88, to be implemented by the Member States, is hereby introduced with the following objectives: ii(i) to help restore the balance between production and market capacity; i(ii) to help improve the efficiency of farms by developing and reorganizing their structures and by promoting supplementary activities; to maintain a viable agricultural community and thus help develop the social fabric of rural areas by ensuring a fair standard of living for farmers and by offsetting the effects of natural handicaps in mountain areas and less-favoured areas; to contribute to the safeguarding of the environment and the preservation of the countryside, including the long-term conservation of natural farming resources. 2. In accordance with Articles 5 (2) (b) and 11 (4) of Regulation (EEC) No 2052/88, the EAGGF, hereinafter called 'the Fund', Guidance Section, shall, acting under the common measure referred to in paragraph 1, provide part-financing for national aid schemes by reimbursing, on the terms laid down in Title X expenditure incurred by the Member States on: (a) schemes designated to encourage the conversion and extensification of production; measures relating to investments in agricultural holdings, in particular to reduce production costs, to improve the living and working conditions of farmers, to promote the diversification of their activities, including the marketing of products on the farm, and to preserve and improve the natural environment; measures to encourage the setting-up of young farmers; back-up measures to assist agricultural holdings, involving the introduction of accounts and the launching of groups, services and facilities for the benefit of several holdings; measures to support farm incomes and to maintain viable agricultural communities in mountain or less-favoured areas by means of agricultural aid for offsetting natural handicaps; measures to protect the environment and safeguard the countryside by encouraging appropriate farming methods; forestry measures to assist agricultural holdings; vocational training projects connected with the measures referred to in paragraphs (a) to (d). In accordance with Title X the Guarantee and Guidance Sections of the EAGGF shall contribute equally, under the common measure referred to in paragraph 1, towards measures linked with the scheme to encourage the set-aside of arable land. In the case of the share of expenditure financed by the Guidance Section, the financial rules for the application of the common measure shall, by way of exception, be those which apply to the Guarantee Section.