The Common Agricultural Policy Minimum requirements for receiving direct payments Presentation by A. Lillig DG AGRI, Unit D October 2010

CONTENT 1.Current legal situation 2.Compulsory minimum requirements 2.Compulsory minimum requirements 3.Optional criteria for exclusion 3.Optional criteria for exclusion 4.What are the aims of article 28 ? 4.What are the aims of article 28 ? 5.MS choices on minimum requirements 5.MS choices on minimum requirements 6.MS reasoning on use of article MS reasoning on use of article Criticism of the SPS 7.Criticism of the SPS 8.How to reply to criticism ? 8.How to reply to criticism ? 9.Conclusions 9.Conclusions

Current legal situation (1/2) Council Regulation (EC) No 73/2009, Article 28 Minimum requirements for receiving direct payments 1.From 2010, MS shall not grant direct payments to a farmer in one of the following cases: (a)the total of direct payments is less than EUR 100 (b)the eligible area is less than one hectare MS may adjust the thresholds within limits set out in Annex VII Shall be further subject to article 28.1.(a): -Farmers with special entitlements -Farmers having sheep & goat or beef & veal payments but no land (Art.6 of Reg 1120/09) -In Lisbon alignment proposal: Farmers receiving specific support who do not hold land

Current legal situation (2/2) Council Regulation (EC) No 73/2009, Article 28 2.From 2010, MS may establish appropriate objective and non- discriminatory criteria to ensure that no direct payments are granted to a natural or legal person: (a)whose agricultural activities form only an insignificant part of its overall economic activities; or (b)whose principal business or company objects do not consist of exercising an agricultural activity

What are the aims of art. 28 ? –reduce administrative burden –decrease the number of applications from very small and perhaps not genuine farmers –exclude non-farming beneficiaries –respond to criticism that CAP is paying for non- agricultural area or land only kept in GAEC

Most of the MS have maintained the basic minimum requirements at 100 € or 1 hectare (detail on next slide) 10 MS have adapted the minimum amount or area within the limits of annex VII of Reg 73/2009. Main reasons for the decisions : -suitability in terms of administration -structures of agricultural sector Implementation in the MS (1/4)

Reasons to keep standard options for art. 28.1: -Easy to administrate -Controllability / simplification -Cost of management to handle application -Minimize exclusion of small (part-time) farmers -Exclude the smallest farms -Offer stability to farmers -Meet farmers’ legitimate expectations -1 ha is known to farmers in many MS -100 € easy to implement in IT system -To avoid unnecessary disruption to agricultural sector Implementation in the MS (2/4)

BE 100 €LT1 haUK En 1 ha/200€ sp BU1 ha/0,5 haLU100 €UKSc 3 ha/100€ sp CZ 1 haHU 1/0,3 haUK Wa1 ha/100€ sp DK2 ha /300€ spMT 0,1 haUK N-Ir 100€ DE1 haNL 500 € EE1 haAT 100 €sp = special entitlements IE100 €PL1 ha EL 200 €PT0,3 ha ES100 €RO1 ha FR100 €SI0,3 ha / 100 € sp IT100 €SK1 ha CY0,3 haFI200 € LV1 haSE4 ha / 100€ sp Implementation in the MS (3/4)

No MS has decided to make use of the option in art to exclude beneficiaries in 2010 * because: -It was seen as very complicated to define the right criteria to exclude sofa-farmers but no others -Companies can easily adapt their objectives -Many MS feared exclusion of small and or part-time farmers, which in itself could lead to abandonment of land / not keeping it in GAEC -Concern that farmers would go to court to challenge exclusion * NL will apply in 2011 exclusion of public bodies Implementation in the MS (3/4)

Criticism on SPS –SPS does not target the active farmer –Landlord receives the aid and not the farmer –SPS encourages farmers to abandon production or only keeping land in GAEC –CAP is paying to beneficiaries such as investors, companies, authorities, nature conservation organisations etc

How to reply to criticism ? –Revise definition of farmer ? –Adapt definition of agricultural activity ? –GAEC ? –Further criteria to be set to target the real active farmer ? –Eligibility rules / register / time spent ? –Make art compulsory ? –Other criteria ?

Conclusions –MS are concerned about (small) farmers’ legitimate expectations : no further change before 2013 –There is a political will to better target the aid; however, the wording of article 28(2) might not be appropriate

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