The Health Check of CAP Reform: Addressing the New Challenges with the second pillar of the CAP

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The Health Check of CAP ReformAddressing the
New Challenges with the second pillar of the CAP

• Working Party on Agricultural Structures and
  Rural Development
• July 10th 2008
• DG for Agriculture and Rural Development
• European Commission

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Table of Contents

• Introduction
• i and ii Health Check
• iii Technical adaptations

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i Meeting the new challenges (1/10)

• Scope of the new challenges
• What are the new challenges and how should they
  be addressed?
• Decision/recital 3 and Regulation/recital 1, 2,
  4 The Health Check identified the following
  new challenges crucial for European
  agricultureClimate change, renewable energies,
  water management and biodiversity
• Decision/recital 4 The CSG identify the support
  areas (key actions) important for the realisation
  of the revised priorities related to the new
  challenges.

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i Meeting the new challenges (2/10)

• Types of operations related to the new challenges
• Adjustment at the EU-level Comm. Strategic
  Guidelines
• Decision, point 2)
• A new guideline on the new challenges is added.
• European priorities related to the new challenges
  are up-dated (e.g. curbing green house gas
  emissions and increasing carbon sequestration in
  agriculture and forestry etc).
• Additional resources available as of 2010 to be
  devoted to the new challenges.
• Focus of support on key actions (e.g. develop
  innovative and more sustainable ways of biofuel
  processing).

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i Meeting the new challenges (3/10)

• Types of operations related to the new challenges
• Adjustment of the draft Council Regulation
• Reg. Article 16 a(1) RDPs shall provide for
  types of operations related to the new
  challenges.
• Annex II A non-exhaustive list of indicative
  types of operations falling into the scope of the
  NC.
• Explanation This list is non-exhaustive Member
  States may propose other types of operations if
• 1) they relate to the potential effects listed
  in Annex II, and 2) they are compatible with all
  rules for measures as defined by Reg. 1698/2005
  (e.g. eligibilty rules).

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i Meeting the new challenges (4/10)

• Types of operations related to the new challenges
• How to implement the proposal on the national
  level?
• Recital 5/Decision and Recitals 5,6, 7 and
  9/Regulation
• Following the review of the CSG each MS should
  revise its National Strategy Plan to take up the
  revised European priorities.
• Operations related to the new challenges are to
  be strengthened and set out in the rural
  development programs.

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i Meeting the new challenges (5/10)

• Targeting and management of budgetary resources
• With which financial resources?
• Recitals 11 / 12 The financial resources from
  increased compulsory modulation should be used
  for RD support.
• Point 7/Regulation, Art. 69 (5a) An amount equal
  to the amounts resulting from compulsory
  modulation shall be spent by MS
• between 1 Jan 2010 and 31 Dec 2015
• for operations related to the new challenges
  approved after 1 Jan 2010.

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i Meeting the new challenges (6/10)

• Targeting and management of budgetary resources
• Which financial resources will be eligible under
  the NC?
• Explanation Expenditures for agri-environmental
  contracts approved and spent after 1 Jan 2010
  could be counted.
• For contracts approved before 2010, the
  respective expenditures made in 2010 and later
  may not be counted.

2007 2008 2009 2010
Spend Spend Spend Spend
Approved Approved Approved Approved
Non eligible
Eligible
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i Meeting the new challenges (7/10)

• Targeting and management of budgetary resources
• What if amount equal to compulsory modulation is
  not spend on new challenges at closure?
• Point 7/Regulation, Art. 69 (5b) If at closure
  the total amount spent on the new challenges is
  lower than that from compulsory modulation, the
  difference shall be reimbursed to the Communitys
  budget

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i Meeting the new challenges (8/10)

• Targeting and management of budgetary resources
• How will the expenditure on new challenges affect
  the balance between axes?
• Point 4/Regulation, Art. 17 (3) The amounts
  spent on the new challenges shall not be taken
  into account when calculating the minimum
  spending rates for each axis.
• Explanation A Member State which already has
  reached the maximum spending rate for Axis 2 may
  use the additional funds from compulsory
  modulation for further expenditures on Axis 2.

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i Meeting the new challenges (9/10)

• Targeting and management of budgetary resources
• Balance between axes Example

Table Additional amounts spend under HC will not
affect the balance between axes
Before Health Check 100 m Before Health Check 100 m After Health Check 100 m 30 m After Health Check 100 m 30 m
Average Extreme case Average Extreme case
Axis 1 35 10 3510 45 10 0 10
Axis 2 45 80 4510 55 8030 110
Axis 3 20 10 2010 30 100 10
Both cases would be compatible with provisions on
minimum spending requirements by axis!!!
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i Meeting the new challenges (10/10)

• Improving the effectiveness of the measure
• How to provide additional incentives for up-take?
• Reg. point 3/Art. 16 a(2) For investment related
  types of operations the maximum aid intensity
  rates in Annex I may be increased by 10
  percentage points.
• Reg. point 10 (b) For area-based payments the
  possibility to exceed the upper amounts per ha
  for operations related to the new challenges is
  established in the footnote to Annex 1.
• These amounts may be increased for the types of
  operations mentioned in Article 16a of this
  Regulation

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ii Practical Arrangements (1/3)

• Deadlines
• When does the revised scheme enter into force?
• Recital 8/Reg. Article 2 The amended Council
  Regulationshall enter into force on 1 January
  2009.
• Reg. Article 1 point 2 A revised NSP shall be
  submitted at the latest 3 months after adoption
  of the Council Decision on CSG.

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ii Practical Arrangements (2/3)

• Content of the (revised) NSP and RDP
• What has to be revised at the level of NSP?
• Reg. Point 1 An indication of the amounts
  originating from increased compulsory modulation
  that MS intend to spend for new challenges shall
  be given.
• Explanation As regards contents of the revised
  NSP the relevant provisions in Article 11 of Reg.
  (EC) 1698/2005 (e.g. analysis, strategy chosen,
  main quantified objectives etc.) should be taken
  into account.

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ii Practical Arrangements (3/3)

• Content of the (revised) NSP and RDP
• What has to be revised at the level of RDP?
• Recital 9 Adaptation of the RDPs in view of
  meeting the revised obligations related to the
  new challenges.
• Reg. point 3/Article 16a(3) Each RDP shall
  contain
• A list with the types of operations and measure
  description
• A table on total Community contribution for new
  challenge related types of operations (2010 to
  2013)
• These amounts will be counted against the
  additional amount from compulsory modulation.

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iii Technical Adaptations (1/4)

• Role of the Monitoring Committee
• Clarify the role of the Monitoring Committee
• Reg. point 8 The MC shall consider and approve
  any substantial proposals for changes in RDPs.
• Explanation In the past the MC did not have to
  be consulted for program modifications which did
  not necessitate a Commission decision. Therefore,
  certain sub-measures (e.g. on organic farming)
  could be dropped without consulting the MC.
  Following this revision the MC would need to be
  consulted on such program modifications.

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iii Technical Adaptations (2/4)

• Rules on Competition
• Clarifying the procedures for state aid
• Recital 17 Clarification and harmonisation for
  the non-application of state aid rules
  established by the Treaty to payments made by MS
  pursuant and in conformity with EAFRD Regulation
  within the scope of Article 36 of the Treaty.
• Explanation This modification clarifies that
  all payments under Article 36 (Community and
  national counterparts funds) are exempted from
  state aid rules defined by the Treaty. Additional
  national financing (top ups) are excluded from
  this exemption.

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iii Technical Adaptations (3/4)

• Cases of transfer of land
• Aligning the rules on transfer of land with those
  under the first pillar
• Recital 13 and Reg. point 5 New rules on
  liability under cross compliance in the case of
  transfer of land should be introduced.
• The term transfer is defined any type of
  transaction whereby the land ceases to be at the
  disposal of the transferor
• Non-compliance related to non-agricultural
  activities (e.g. sales activities) and
  non-agricultural areas (forestry) shall not
  result in a reduction of payments

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iii Technical Adaptations (4/4)

• Cases of non-application
• Alligning the rules on reduction of payments with
  those under the first pillar
• Recital 14 / 15/ Reg. point 5
• Exemptions from reduction of payments due to
  non-respect of cross compliance should be
  defined The reductions shall not apply for
  standards for which a period of grace has been
  granted.
• A measure of tolerance for minor infringements
  No reduction if reduction or cancellation amounts
  to 100 or less per calendar year.

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Thank you for your attention!