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COUNCIL OF THE EUROPEAN UNION

Brussels, 8 November 2013

15835/13 LIMITE AGRI 723 AGRIFIN 182 NOTE from: to: Subject:

General Secretariat Delegations Preparation of delegated acts foreseen under the CAP Reform package - Request from Belgium, Bulgaria, Czech Republic, Denmark, Estonia, Ireland, Spain, France, Croatia, Italy, Cyprus, Latvia, Luxembourg, Hungary, Malta, Austria, Poland, Portugal, Romania, Slovenia, Slovakia, Finland, Sweden

With a view to the Special Committee on Agriculture on 11 November 2013, delegations will find attached in Annex a note on the subject above, supported by Belgium, Bulgaria, Czech Republic, Denmark, Estonia, Ireland, Spain, France, Croatia, Italy, Cyprus, Latvia, Luxembourg, Hungary, Malta, Austria, Poland, Portugal, Romania, Slovenia, Slovakia, Finland and Sweden, to be presented under "Any Other Business". _________________

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ANNEX Note concerning the preparation of delegated acts foreseen under the CAP reform package Supported by the delegations from Belgium, Bulgaria, Czech Republic, Denmark, Estonia, Ireland, Spain, France, Croatia, Italy, Cyprus, Latvia, Luxembourg, Hungary, Malta, Austria, Poland, Portugal, Romania, Slovenia, Slovakia, Finland and Sweden Within the framework of the political agreement they have reached on the CAP reform, the colegislators have foreseen that the European Commission should be entitled to adopt delegated acts on several specific points of the different regulations constituting the CAP reform package. Under Article 290 TFEU, it is indeed up to the colegislators to allow a legislative act to delegate to the Commission the power to adopt “non-legislative acts of general application to supplement or amend non-essential elements of the legislative act”. As foreseen by the Treaty, the colegislators have systematically specified in the basic acts “the objective, content, scope and duration” of the delegation. In this regard, the abovementioned Member States wish to underline that the objective and scope of the delegation that the Council and the Parliament have specified in the basic acts should be fully respected in the preparation currently underway of such delegated acts. Delegated acts should in no way be seen as a mean to circumvent the terms of the political agreement of colegislators. The Council and the Parliament have negotiated in good faith, the Commission being present as a facilitator at every step of the negotiation. Therefore, when the colegislators have explicitly decided to take a point on board in the political agreement, and have delegated power to the Commission in order to spell out some additional technical elements, the corresponding delegated act cannot impose restrictive conditions which would de facto deprive the decision of colegislators of its concrete effect. Similarly, when the colegislators have explicitly decided to rule out some proposals or some specific conditions, the delegated act can absolutely not impose those proposals or conditions, in the same way or via another equivalent manner.

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Consistency between the basic acts and the delegated acts is of paramount importance for the quality of agricultural legislation. Governments, farmers, paying agencies need a stable and predictable legislative framework to be put in place in due time. In this regard, and as laid down in article 290 of the Treaty, it should be recalled that the basic acts of the CAP reform package foresee that “the delegation may be revoked at any time by the European Parliament or by the Council”, these institutions being also able to express an “objection” to the delegated act “within a period of 2 months” (which can be extended by 2 months). While colegislators were able to find a political agreement on time, it is then in the interest of all stakeholders that the preparation of delegated acts doesn’t threaten now the progress made so far.

Here are some examples of inconsistencies between the basic acts and the delegated acts, which should now be urgently corrected (this list is purely illustrative and unfortunately not exhaustive, given the large number of problematic issues raised during the expert groups):  The draft delegated act for direct payments establishing further criteria for the types of Ecological Focus Area (DS/EGDP/2013/10) foresees that “Strips of eligible hectares along forest edges shall be without agricultural production”. Nevertheless, this condition has already been discussed in the 26. June Council in Luxembourg, at Ministers’ level. The condition of strips of eligible hectares along forest hedges being “without cultivation” or “without agricultural production”, or any kind of similar conditions, was explicitly ruled out by Ministers, and the Council position in this point was subsequently agreed in trilogue. The intention of both legislators is then absolutely clear, and cannot be circumvented.  The same draft text foresees that “Areas under catch crops or green cover shall be considered ecological focus area only if established beyond what is required from farmers pursuant to Council Directive 91/676/EEC [SMR 1] In addition, only those areas under catch crops or green cover that are established by sowing a mixture of crop species shall be considered as ecological focus area”. These stringent conditions, which were absolutely not foreseen in the basic act, would de facto preclude farmers in several Member States from having their areas under catch crops qualified as Ecological focus area (EFA), thus depriving the mention of those crops in the list of EFA in the basic act of its concrete effect. This goes clearly beyond the intention of colegislators.

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 The same draft also foresees that “On areas with nitrogen fixing crops, farmers shall only grow nitrogen fixing crops that are traditionally grown with only a limited amount of plant protection products and without the use of fertilisers.” Due to this provision, the conventional production on such areas will clearly be impossible. On the substance, this is not justified, as conventional production of nitrogen fixing crops prevents the leaching of nitrogen and are beneficial for the physicochemical and biological soil features. This limitation to the EFA´s was not foreseen in the basic act, and clearly alters the legislators’ decision.

 In general, the proposal of delegated act about the maintenance of Ecological Focus Areas does not respect the conclusions of the European Council of 7/8 February 2013, which in their paragraph 67 state that this requirement “will be implemented in ways that do not require the land in question to be taken out of production and that avoids unjustified losses in the income of farmers”.

 In this respect, the low level of the coefficients proposed in this draft delegated act concerning weighting factors foreseen under article 32 (1a) of Direct payments regulation is a clear matter of concern. Low coefficients would preclude farmers from using this tool foreseen by colegislators as an incentive for them to use a broad range of different EFAs on their farms, instead of simply taking land out of production in order to meet the EFA target.

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 Concerning permanent grassland, article 31.2 of the basic act provides that “Member States shall ensure that the ratio of land under permanent grassland in relation to the total agricultural area declared […] does not decrease by more than 5% compared to a reference ratio […]”. Paragraph 3 of this article empowers the Commission to lay down “rules on maintenance of permanent grassland, including rules of reconversion in case of non-respect of the obligations […]”. Nevertheless, the draft delegated act (DS/EGDP/2013/7 – rev 1) would establish a complicated monitoring system to be implemented by Member States fixing an additional threshold triggering a system of individual authorizations. This completely new scheme has to be compared with the rules foreseen in the basic act, which only provide for one threshold fixed at the level of 5%, and which are clearly an essential element of the basic act. As no additional obligations have been foreseen by colegislators when below this unique threshold, any possible measure below 5% should be voluntary and left to the responsibility of the Member States.  In the same way, the draft delegated act related to coupled support (DS/EGDP/2013/4 – rev 1) limits the scope of article 38 (1) of the Direct payment Regulation. Under article 38 (7), the Commission has been empowered to adopt delegated acts concerning “the conditions for granting the support referred to in this Chapter”. Annex I of the draft act aims at specifying the sectors listed in the basic act, but leads in fact to a reduction of those. For example, when the basic act allows both sheepmeat and goatmeat sectors to be eligible, the delegated act limits the support to “female of the ovine and caprine species”. Another example: when the basic act mentions the possibility to “support the production of protein crops”, the draft delegated act enumerates some species eligible, not including on that list all possible protein species. The same problem also occurs with the proposed list of oilseeds, which doesn’t include all kind of oilseeds. These kinds of limitations are not “conditions for granting the support”. Instead, they effectively limit the scope of application of the basic act, which goes beyond the scope and purpose of a delegated act. The issue of the classification of the oilseeds and protein crops, with special attention to the soya bean, should be properly solved.

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 The draft delegated act related to the basic payment scheme (DS/EGDP/2013/6 – rev 1) also contains significant inconsistencies with the basic act. Article 21 (2) of the Direct payments Regulation enables Member States to use several options to limit the number of entitlements allocated to their farmers during the first year of allocation of payment entitlements. Nevertheless, article 18(2) of the draft delegated act foresees that, when the application of one or more of the options opened under article 21 (2) leads to a limitation of the number of payment entitlements allocated to a farmer (which is precisely the aim of these options in the basic act), that farmer shall still be granted a certain number of payments entitlements from the national reserve. This new requirement would be a double circumvention of the political agreement: -

because the delegated act would ignore the colegislators’ intentions and deprive the options opened in the basic act of their concrete effect ;

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because the basic act foresees that the use of the national reserve is up to Member States in the case of “specific disadvantage” (art 23. 5 of the basic act: “Member States may use the national reserve”…) whereas the delegated act would create an obligation for Member States to grant entitlements to farmers from the reserve (art 18.2 of the draft: “(…) that farmer shall be allocated a number of payment entitlements in accordance with Article 23(5)(a) of Regulation (EU) No [DPR]…”).

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 Concerning the payment for young farmers, the draft delegated act related to the first pillar scheme (DS/EGDP/2013/3 – rev 1) would impose very restrictive conditions on young farmers setting up as members of a legal person1. In some Member States, these conditions would de facto exclude from the benefit of the scheme 2/3 of the young farmers. This was clearly not the intention of the colegislators when they foresaw, in article 36 (7) of the Direct payments regulation, that the Commission should be empowered to adopt delegated acts on this issue “in order to guarantee the protection of the rights of beneficiaries and to avoid discrimination among them”. The provisions of the draft delegated act would lead to a result which would be the opposite of each and every term of the delegation.  The transcription in the delegated acts of the principle of “no double funding” raises a lot of questions among Member States. For example, DG Agriculture recently announced in an expert group meeting on rural development its intention to apply a lump sum correction to the level of payments dedicated to organic farming2. Nevertheless, when a political agreement on the Council mandate was reached in Luxembourg, it was understood by delegations that such a lump sum correction would be applied only to 3 measures, which were marked with an asterisk in the annex VIa of the DP regulation relating to practices equivalent to greening. The Council subsequently accepted the Parliament’s request on the principle of “no double funding” being systematically repeated in articles 29 to 31 of Rural development regulation. But it cannot be seen as a general acceptance by the Council of a lump sum correction being applied beyond the 3 abovementioned measures, as the “no double funding” principle could also be checked on a case-by-case basis in the baseline of the measures adopted under article 29 to 31. The reform aims at implementing a greener CAP: a lump sum reduction of payments dedicated to organic farming would be opposite to this clear purpose of colegislators. Other issues of importance and possible inconsistencies have also been flagged at experts level concerning the implementation of the principle of « no double funding », justifying an in-depth discussion on this issue between Member States and Commission. ________________

Similar conditions are also foreseen in the draft delegated act related to Rural development Also see “Explanatory document: methods of the rural development premia calculation to exclude double funding” 1 2

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23 ms letter nov 2013