European Commission, DG Agriculture and Rural Development Report to the Council on the implementation of the cross-compliance system Aymeric Berling European Commission, DG Agriculture and Rural Development April 2007

Overview : Cross Compliance in summary Background Political statements Problems identified Some figures Proposals Next steps

Cross compliance in summary: Statutory Management Requirements (SMRs) Good Agricultural and Environmental Condition (GAEC)

SMRs: environment Nitrates Wild birds Sewage Sludge Habitats Surface water and Groundwater Soil Nature protection Nitrates Wild birds Sewage Sludge Habitats Groundwater

SMRs: sanitary and veterinary legislation Animal Id. Plant health Public health Animal health and welfare Animal identification and registration Hormone ban Animal diseases notification Plant protection products General Food Law Animal welfare

GAEC: 4 issues, 11 standards Minimum level maintenance Soil erosion Soil organic matter Soil structure Livestock stocking rates Minimum soil cover Crops rotations Permanent pasture Appropriate machinery use Minimum land management Retention landscape features Arable stubble management Unwanted vegetation Retain terraces Olive groves

Background Article 8 of Council Regulation (EC) No 1782/2003 : « By 31 December 2007 at the latest, the Commission shall submit a report on the application of the system of cross-compliance accompanied, if necessary, by appropriate proposals notably with the view of amending the list of statutory management requirements set out in Annex III. »

Background Cross-compliance has started in 2005 During the 2 first years of application a number of questions have been raised In order to tackle these questions in due time the decision has been taken to present the report in early 2007 to the Council, under the German presidency

Political statements The report contains a number of political statements, based on the EU legislative framework: Council Regulation (EC) No 1782/2003 Commission Regulation (EC) No 796/2004

Political statements Definition of cross compliance: “Cross-compliance creates a link between the full payment of support, and compliance with certain rules relating to agricultural land and to agricultural production and activity in the areas of the environment, public, animal and plant health, animal welfare and good agricultural and environmental condition.”

Political statements Definition of cross compliance: “This link is expressed in concrete terms in the possibility, if the rules are not respected, of full or partial reductions of certain EU agricultural payments. The reductions shall be based on the severity, the extent, the permanence, the repetition and the intentionality of the non-compliance.“

Political statements Objectives of cross compliance: “The first objective is to contribute to the development of sustainable agriculture. This is achieved through the respect by the farmer of the rules relating to the relevant aspects of cross-compliance.”

Political statements Objectives of cross compliance: “The second objective is to make the CAP more compatible with the expectations of society at large. There is now a growing body of opinion that agricultural payments should no longer be granted to farmers who fail to comply with basic rules in certain important areas of public policy.“

Political statements Objectives of cross compliance: “Achieving these two objectives will help to ensure the CAP's future .“

Political statements Payments concerned by cross compliance: All direct payments - decoupled or coupled - under the first pillar of the CAP (the payments listed in Annex I to Council Regulation (EC) N° 1782/2003)

Political statements Payments concerned by cross compliance: Eight measures under "Axis 2" of the second pillar of the CAP (listed in Council Regulation (EC) N°1698/2005) Agri-environment payments; Natural handicap payments to farmers in mountain areas; Payments to farmers in areas with handicaps, other than mountain areas; Natura 2000 payments on agricultural land and payments linked to Directive 2000/60/EC (the Water Framework Directive); Animal welfare payments; First afforestation of agricultural land; Natura 2000 payments on forestry land; Forest-environment payments.

Political statements Scope of cross compliance: Statutory Management Requirements (SMRs) They do not create new obligations to farmers since the legal texts existed previously Most of them are Directives which implies a degree of variation in the implementation between Member states

Political statements Scope of cross compliance: Good Agricultural and Environmental Condition (GAEC) : standards The concept and the obligations are not new to many farmers (good farming practices, etc.) Member states have to define obligations at farm level, where appropriate, for all standards listed in the EU framework (Annex IV of Regulation No 1782/2003)

Political statements Scope of cross compliance: Good Agricultural and Environmental Condition (GAEC) : maintenance of the ratio of permanent pasture

Political statements Given the discussion during the start up phase and the sensitivity of this topic, the Commission is willing to propose immediate solutions to the problems identified so far There is however no question to water down the system Every effort should be made to improve the acceptance of cross compliance, for the benefit of all

Political statements Subsidiarity is an underlying principle to address the local risk and constraints and take into account the organisation in each Member state However there is a need to ensure a level playing field for farmers, through a common legal framework Striking the appropriate balance is one of the most important challenge of the system

Problems identified From the farmers view From the national authorities view From the Commission view

Problems identified from the farmer view Volume and technical nature of the information Obligations sometimes new Feeling of “double sanction” On-the-spot checks long and burdensome No exemption of reduction for minor non-compliances

Problems identified from the national administrations view Difficulties to inform farmers of their obligations Difficulties to organise the control system (co-ordination of bodies, of controls, taking into account existing systems, reporting, etc) Concept sometimes difficult to handle (what is an infringement, intentionality, etc) Problems of interpretation of the EU legislation

Problems identified from the Commission view Information given to farmer sometimes not concrete enough Member States choice in the organisation of controls sometimes raising difficulties, in particular for the designation of the Competent Control Authority Some obligations were not checked Reduction matrices sometimes designed at a very low level

Some figures (2005, rounded) 5% of farmers receiving direct payments have been checked on-the-spot (240 898 checks) 12% of these checked farmers have been applied a reduction (mostly for the I&R of animals and the GAEC) 68% of these applied reduction were at the minimum level of 1%

Proposals from the Commission To tackle horizontal problems which can be solved at EU level Keeping the right balance between a common level playing field between Member states and farmers and the need for flexibility to address the local constraints

Proposals from the Commission Allow an exemption of reduction for minor cases of non-compliance

Proposals from the Commission Allow a de minimis rule for applying the reductions

Proposals from the Commission Harmonisation of control rates

Proposals from the Commission Increase of control rates following high level of non-compliances limited to the concerned area of cross compliance (and no other areas)

Proposals from the Commission Advance notice of on-the-spot checks

Proposals from the Commission Clarify the selection, the timing, the elements and the reporting of on-the-spot checks

Proposals from the Commission Taking into account the Farm Advisory System (FAS) The FAS is a fundamental tool to implement cross compliance

Proposals from the Commission Taking into account the relevant certification systems

Proposals from the Commission Modify the so-called “10 month rule”

Proposals from the Commission Phasing-in period for the introduction of SMRs under cross compliance for MS applying the SAPS The 8 MSs applying the SAPS will introduce the SMRs along the same 3 steps as other MSs, as from 2009 BG and RO will introduce the SMRs along the same 3 steps as other MSs, as from 2012

Next steps Discussion at the Council and the European parliament on the report. Conclusions foreseen in June.

Next steps Discussion at the Council and the European parliament on a draft Council Regulation on : The 10 month rule The phasing-in of SMRS for MSs applying SAPS Provisions to be implemented as from 2008

Next steps Discussion at the Management Committee for Direct Payments on implementing rules regarding the management and control. Provisions to be implemented as from 2008

Next steps Further discussions with the Member States to allow sharing “best practices” and comparing experience

Next steps Changes to the scope of cross compliance will be addressed in the “Health Check” The Commission has committed to foresee a realistic timetable for the inclusion of any new or changed requirements into the scope of cross compliance

Thank you for your attention Information : http://ec.europa.eu/agriculture/simplification/crosscom/index_en.htm