FUTRUE of the STATE AID IN AGRICULTURE Christine Meisinger EUROPEAN COMMISSION January 2006

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)

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:

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

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

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

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

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

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

Thank you for your attention!