Explanatory Memorandum to COM(2003)643 - Adaptation of the Act of Accession of the Czech Republic, Estonia, Cyprus, Latvia, Lithuania, Hungary, Malta, Poland, Slovenia and Slovakia and the adjustments to the Treaties on which the EU is founded, following the reform of the common agricultural policy - Main contents
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| dossier | COM(2003)643 - Adaptation of the Act of Accession of the Czech Republic, Estonia, Cyprus, Latvia, Lithuania, Hungary, Malta, Poland, ... |
|---|---|
| source | COM(2003)643  |
| date | 27-10-2003 |
Contents
On 29 September 2003, the Council adopted a CAP reform package which makes significant changes to the acquis on which the accession negotiations were based. In their current form the CAP reform texts take no account of the results of those negotiations or indeed of enlargement itself. There is therefore a need to adapt both the Act of Accession and the CAP reform texts before accession to ensure that the two are complete and compatible, i.e. to ensure that they can function in an enlarged community. Specifically, there is a need to:
- adapt the CAP-related annexes of the Act of Accession so that the negotiation results fit with the new acquis (this will be necessary where references in the Act of Accession are rendered obsolete or where the negotiation results are not immediately compatible with the reformed CAP);
- adapt the CAP reform texts so that they can be applied to the new Member States and so that they incorporate any negotiation results that would otherwise (in the future) be lost.
To achieve these two objectives the Commission has prepared two legislative proposals for a Decision and a Regulation respectively. Both texts are based on the following guiding principles:
- the fundamental character and principles of the package agreed in Copenhagen should be maintained, and applied to any new elements. There should be no erosion of the terms of accession negotiated by the acceding countries;
- where the CAP reform introduces new elements that were not covered during the accession negotiations on agriculture, the new Member States should be treated similarly to the current Member States, except where that conflicts with the overriding principle described above;
- adaptations should be limited to what is absolutely necessary;
- the new Member States should be integrated smoothly into the reformed CAP as soon as possible.
The present proposal sets out the adaptations to the Act of Accession which have become necessary as a consequence of the reform of the Common Agricultural Policy. Accordingly the proposed decision is based on Article 23 of the Act of Accession.
Phasing-in of direct payments
The CAP Reform introduces new direct payments for energy crops and nuts. It also introduces an additional price cut in the dairy sector, on top of what was agreed in Agenda 2000, and thus increases the compensatory direct payments for dairy (which incidentally will now start in 2004 not 2005). In order to maintain the general approach taken on direct payments in Copenhagen, these new direct payments should not be granted in full to the new Member States but should be subject to the phasing-in schedule for all other direct payments (25%, 30%, 35% etc.). This is consistent with the fact that the Act of Accession refers to the direct payments mentioned in Article 1 of Regulation (EC) No 1259/1999 at the level 'then applicable', meaning this is a dynamic reference that was open to amendment at any time. It is also consistent with the need to stay inside the Brussels ceiling and with the agro-economic arguments for the phasing-in approach (for example the desire to facilitate rather than hamper restructuring).
Despite the coming introduction of the Single Farm Payment (SFP), the SAPS set out in the Act of Accession should be maintained. This is justified on the grounds that:
- SAPS has been agreed in the negotiations;
- SAPS remains significantly simpler than the SFP: all utilised agricultural area is included, no coupled payments are maintained for specific sectors and there is no set-aside;
- it would be difficult to have new Member States applying the SFP from 2004 when it only enters into force in the EU-15 from 2005;
- even if that were desirable, new Member States would not have enough time to make the necessary preparations
For these reasons the proposals maintain SAPS within the framework of the reformed CAP and make the technical adjustments necessary for it to apply in the form negotiated. In doing this the proposals make clear that the temporary opt-out from the SFP that applies to the current Member States until the end of 2006 does not apply to the new Member States - in other words the new Member States will not be able to move back from SAPS to the classical direct payment scheme before 2007, but only move forward to the SFP.
So as to maintain the principle of topping-up in the framework of the reformed CAP, the current proposals provide for three different scenarios:
- topping-up under classical scheme until the end of 2006,
- topping-up under the SFP from 2005,
- topping-up under SAPS.
The proposals also take account of the two different topping-up formulae set out in the Act of Accession, namely:
- the 30% formula, i.e. increase the direct payments available from the EU by 30% points (this gives farmers a maximum of 55% points in the first year, 60% points in the second, 65% in the third etc); or
- the pre-accession formula, i.e. increase the direct payments available from the EU up to the pre-accession support level plus X% points (X = 10% points for all countries except Slovenia, for which X is 10% in 2004, 15% in 2005, 20% in 2006 and 25% points from 2007).
Finally, the proposal takes advantage of the fact that the changes wrought by the CAP reform provide an opportunity to simplify, from 2005, the topping-up arrangements under SAPS that were agreed in the accession negotiations. This simplified option, which is described below, is desirable insofar as it reduces the administrative burden that is otherwise imposed on SAPS by the topping up rules and insofar as it renders the topping-up arrangements fully compatible with the main principles of the CAP reform.
In concrete terms, the current proposal therefore ensures the following:
For topping-up under the classical scheme, which remains possible until the end of 2006, the rules in the Act of Accession are maintained essentially unchanged.
For topping-up under the new SFP, the arrangements would be slightly different depending on which formula the new Member State chose. Under the 30% formula, all payments could be increased across the board by a maximum of 30% points, regardless of whether they were payments based on entitlements, payments for coupled schemes, or ceilings for partially-coupled schemes. Under the pre-accession formula, payments under the schemes that remained coupled could be topped-up as planned, i.e. up to the pre-accession level + X% points (see above). For those schemes that were merged into the single farm payment, topping-up would be a little more complicated, and would be carried out in two steps. The first step would be to add-up all the pre-accession direct support granted for the sectors concerned (increased by X% points) and see how much higher this was than the baseline direct payments available from the EU. The difference would constitute the total envelope available for topping up in the region concerned. The second step would then be to divide this envelope between the farmers in the region on a per-hectare basis. In the event of partial implementation of the SFP, the envelope referred to above would have to be calculated according to the extent of decoupling applied.
For topping-up under SAPS, the arrangements in the Act of Accession (i.e. top-ups granted from sector-specific envelopes) would apply unchanged for 2004. Given that the classical direct payment system remains a possibility until the end of 2006, the topping-up arrangements in the Act of Accession would also apply until the same date. For those countries that wished, a simplified option would be applicable from 2005 (see above). Under this option the new Member States would be allowed to pay top-ups not from sector specific envelopes, but from a single envelope reflecting the difference between the SAPS support level and the topping-up margin (+30% points or pre-accession level). From this envelope, top-ups would be granted per hectare for the entire area eligible under SAPS, except for permanent crops. There would be no obligation to produce. Sector-specific top-ups would still be possible in respect of schemes that remain fully or partially coupled.
The CAP reform package repeals the regulation establishing a levy in the milk and milk products sector and amends the regulation on the CMO of the market in milk and milk products before 1 May 2004. There is therefore a need to make quite extensive (albeit technical) changes to the Act of Accession in this area so that the negotiation results refer to, and fit with, the new acquis. The proposals therefore include changes such as the adaptation of dates for the establishment of individual reference quantities and the reference period for the reduction of the total amount of individual reference quantities eligible for premium. They also include the addition or modification of various tables, for example to set the representative fat content for the new Member States or to include the appropriate quotas for deliveries and direct sales.
In the accession negotiations a new measure Compliance with Community standards was created for the new Member States to help their farmers 'to adapt to standards established by the Community -- until such time as the required standard is due to be met'. This was intended to support farmers' efforts to reach EU standards during the transition period granted by giving them additional transfers to offset the costs of compliance. The CAP reform now introduces a general 'meeting standards' measure intended to help farmers adapt to the operating costs resulting from newly introduced EU standards. The proposal deletes the separate 'compliance with Community standards' measure in order to avoid any overlap whilst maintaining the possibilities available to the new Member States under the compliance measure.
During the accession negotiations various transition periods (e.g. on the definition of suckler cows) were granted to new Member States, generally as a derogation from existing acquis. In certain cases the CAP reform package repeals the regulations from which such derogations were made, meaning that there will be transitional arrangements in the Act of Accession (i.e. primary law) that are without effect. The proposals therefore amend the Act of Accession so as to give continuing effect to any transition periods accorded.
The SMPPMA as provided for in the Act of Accession makes numerous references to sectoral (market) regulations. As some of these regulations will be repealed by the CAP reform regulations there is a need for quite extensive (though purely technical) amendment to the relevant section of the Act of Accession, so that the provisions of the SMPPMA refer to the correct acquis. The necessary amendments form part of the current proposals.