FUTRUE of the STATE AID IN AGRICULTURE

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FUTRUE of the STATE AID IN AGRICULTURE

• Christine Meisinger
• EUROPEAN COMMISSION
• January 2006

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Future of state aid rules in 2006

• In 2006, adaptation of
• Community Guidelines for State Aid in the
  Agricultural Sector (OJ 28/2000)
• State aid exemption Regulation 1/2004
  (agricultural SME)
• De minimis Regulation 1860/2004 in the
  agricultural and fishery sector
• Community Guidelines for State aid for
  advertising of agricultural products (OJ C
  252/2001)
• Community Guidelines for State aid concerning TSE
  tests, fallen stock and slaughterhouse waste (OJ
  C 324/2002)

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Future of state aid rules - reasons

• Adaptation of these instruments to the Regulation
  EC 1698/2005 on support for RD by the EAFRD
• Lisbon agenda less better targeted state aid
• Simplification of the legal texts
• End 2005 first drafts in consultation
• 2006 discussion and conclusion
• entering into force 1.1.2007

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Lisbon agenda

• Objective setting according to Lisbon agenda
• General reduction of state aid
• More horizontal aid and less sectoral aid
• Aid should contribution to growth and employment

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Horizontal objectives

• State aid to the agricultural sector -
  contribution to horizontal objectives such as
• research and development
• environmental protection
• services (of common economic interest)
• regional development
• Vocational training, education
• Rescue and restructuring actions

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Sectoral objectives

• Sectoral aid to agriculture
• Economic impact to the sub-sectors
• Guidelines derived from the new RD Regulation
  (1698/2005)
• human resources
• physical investments and promotion of innovations
• environment and landscape
• Diversification
• Management of risk- and crises

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Simplification

• Considering the abolitions of certain
  requirements and criteria e.g.
• market outlet test for investment aid,
• occupational skills of farmers
• meeting environmental and animal welfare
  standards
• tender procedures for service provider
• Replacement of viable enterprises by the
  exclusion of aid to companies in difficulties

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less and better targeted aid

• What aid intensity is necessary to get the best
  effects?
• Sound environmental management e.g. aid for
  irrigation equipment, if it leads to significant
  water savings
• Better risk and crisis management e.g. aid
  compensation for disease and bad weather losses,
  only if farmer has taken out an insurance
• Avoiding that big aid amounts go to large scale
  companies e.g. setting of an upper limit for
  investment aid for a farmer over a certain
  periode of years

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Legislative procedure

• draft regulations/guidelines
• February block exemptions
• March Community Guidelines for State Aid in the
  Agricultural Sector
• drafts will be sent to MS and discussed in the
  Advisory Committee
• incorporation of requested changes into the
  drafts
• re-consultation of the Advisory Committee
• final text adopted by the College in the second
  half of 2006

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• Thank you for your attention!