Explanatory Memorandum to COM(2018)817 - Amendment of regulations 1305/2013 and 1307/2013 as regards certain rules on direct payments and support for rural development in respect of the years 2019 and 2020 - Main contents
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| dossier | COM(2018)817 - Amendment of regulations 1305/2013 and 1307/2013 as regards certain rules on direct payments and support for rural ... |
|---|---|
| source | COM(2018)817  |
| date | 07-12-2018 |
1. CONTEXT OF THE PROPOSAL
• Reasons for and objectives of the proposal
This proposal aims at providing certainty and continuity in the granting of support to European farmers in the years 2019 and 2020 by adapting two legislative acts of the Common Agricultural Policy (CAP).
In relation to rural development, certain amendments of Regulation (EU) No 1305/2013 (Rural Development Regulation) are needed to ensure the continuity of the policy in the final years of the programming period and a smooth passage to the next programming period. These amendments concern a new degressivity schedule for phasing out payments to areas facing natural constraints other than mountain areas (ANC) and the use of EAFRD technical assistance at the initiative of the Commission for actions preparing the implementation of the future CAP.
In relation to direct payments, some of the provisions in Regulation (EU) No 1307/2013 (Direct Payment Regulation) do not cover calendar year 2020 since expenditure relating to calendar year 2020 is made in financial year 2021, which is the first year of the new Multiannual Financial Framework (MFF) 2021-2027. At the time of adoption of the Regulation, it was therefore not possible to make commitments relating to the future MFF. In the absence of an amendment of Regulation (EU) No 1307/2013, some Member States would face disruptive financial implications as regards direct payments in calendar year 2020, going beyond those related to the new MFF (MFF 2021-2027). Those Member States would be faced with important changes in their direct payments and rural development envelopes with considerable effects on the payments to farmers under both pillars. In addition, other technical elements are added, as they would facilitate implementation of the current legislative framework.
• Consistency with existing policy provisions in the policy area
The proposed amendments are consistent with the Rural Development Regulation and Direct Payment Regulation, therefore the proposal is consistent with the existing policy provisions of the CAP.
• Consistency with other Union policies
Not applicable
2. LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY
• Legal basis
Articles 42 and 43 i of the Treaty on the Functioning of the European Union (TFEU).
• Subsidiarity (for non-exclusive competence)
The TFEU provides that the competence for agriculture is shared between the Union and the Member States. The Union exercises its competence through the adoption of various legislative acts, thereby defining and implementing an EU common agricultural policy as provided for in Article 38 to 44 of the Treaty on the Functioning of the European Union. Regulations (EU) No 1305/2013 and (EU) No 1307/2013 set up a system for support for rural development and for direct payments to farmers. According to Article 39 of the TFEU, a treaty objective of the CAP is inter alia to ensure a fair standard of living for farmers and the proposed initiative fits within this objective. Accordingly, with the European Agricultural Guarantee Fund (EAGF), the CAP funds direct payments and Regulation EU (No) 1307/2013 regulates the payments at Union level. Rural development support is an integral part of the CAP and contributes to the CAP objectives as laid down in the Treaty on the Functioning of the European Union. The added value of the proposal is to ensure certainty and stability of direct income support for European farmers in the year 2020 and of support for rural development in the final years of the current programming period. These objectives can only be achieved through an amendment of Regulations (EU) No 1305/2013 and (EU) No 1307/2013 by the EU co-legislators.
• Proportionality
The proposal does not entail any new policy developments compared to the legislative acts it intends to amend. The proposal modifies the existing Regulations only to the extent necessary to achieve the objectives outlined above.
• Choice of the instrument
Since the original legislative acts are regulations of the European Parliament and the Council, the amendments must also be introduced as a European Parliament and Council regulation by means of the ordinary legislative procedure.
3. RESULTS OF EX-POST EVALUATIONS, STAKEHOLDER CONSULTATIONS AND IMPACT ASSESSMENTS
The proposal deviates from standard practice as set out in the Better Regulation guidelines and in the Toolbox. A derogation to the standard practice is necessary for the following reasons:
- the proposal is highly technical in its scope;
- the initiative is confined to the final years of the current programming period;
- it does not introduce new political commitments.
An impact assessment, public consultation and a roadmap are therefore not suitable for this proposal. Moreover, as the legislation needs to be in place in 2019, adoption by the co-legislators is urgent.
• Ex-post evaluations/fitness checks of existing legislation
Not applicable
• Stakeholder consultations
Not applicable
• Collection and use of expertise
Not applicable
• Impact assessment
Not applicable
• Regulatory fitness and simplification
Not applicable
• Fundamental rights
The proposal respects the fundamental rights and observes the principles recognised in particular by the Charter of Fundamental Rights of the European Union.
4. BUDGETARY IMPLICATIONS
The proposed option for Member States to continue the current flexibility between direct payments and rural development in calendar year 2020 (financial year 2021), and the transfer of the estimated product of reduction from direct payments to rural development in that year, may, subject to Member States’ decisions, affect the allocation between direct payments and rural development. However, any such transfer will be neutral in terms of overall budgetary commitments.
Further details on the financial implications of the present proposal are provided in the financial statement attached to the proposal.
5. OTHER ELEMENTS
• Implementation plans and monitoring, evaluation and reporting arrangements
Not applicable
• Explanatory documents (for directives)
Not applicable
• Detailed explanation of the specific provisions of the proposal
·Rural development
The proposal makes it possible for the Member States to modify the degressivity schedule for payments to areas, which had received such payments in the previous programming period, while in the ongoing period, not being classified anymore as areas facing natural constraints other than mountain areas pursuant to Article 31(5) of Rural Development Regulation. This modification follows the extension of the deadline for the new delimitation of such areas to 2019 introduced by Regulation (EU) 2017/2393, which implies, by the end of the ongoing programming period, a shorter adaptation period for farmers who are no longer eligible for these payments. This modification would allow calculating transitional payments for the years 2019 and 2020 based on payment levels of the 2014-2020 period. Furthermore, the degressivity of the transitional payments shall be less steep as it shall be established by MS so that the end level is half of the starting level.
The proposal extends the use of the technical assistance at the initiative of the Commission funded by the European Agricultural Fund for Rural Development (EAFRD) to actions related to the preparation of the future CAP. The proposal concerns exclusively the scope of technical assistance without modifying the financial support.
·Flexibility between pillars in year 2020 and transfer of the product of reduction of direct payments to Rural development
The proposal includes provisions regarding the possibility for Member States to transfer funds between pillars in calendar year 2020 (corresponding to financial year 2021). For the period 2015-2019, Member States had the possibility to transfer amounts from direct payments to rural development and vice versa. Such flexibility for calendar year 2020/financial year 2021 is not laid out under the rules in force. This financial mechanism is an important mechanism for providing Member States with flexibility in managing their financial envelopes, and optimizing the use of available funds. Experience shows this mechanism has proven an effective tool for Member States and therefore certain Member States transfer a significant amount between the two pillars. An absence of flexibility between pillars in calendar year 2020/financial year 2021 would likely create serious financial disruptions for farmers in some Member States, as the effect on their envelopes could be significant. Accordingly, the proposal calls for a transfer between pillars to remain possible in calendar year 2020 under the same conditions as currently standing and that the estimated product of reduction continues to be transferred from direct payments to rural development.