Explanatory Memorandum to COM(2019)580 - Amendment Reg 1306/2013 as regards financial discipline as from financial year 2021 and Reg 1307/2013 as regards flexibility between pillars in respect of calendar year 2020 - Main contents
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This page contains a limited version of this dossier in the EU Monitor.
| dossier | COM(2019)580 - Amendment Reg 1306/2013 as regards financial discipline as from financial year 2021 and Reg 1307/2013 as regards flexibility ... |
|---|---|
| source | COM(2019)580  |
| date | 31-10-2019 |
1. CONTEXTOFTHE 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 year 2020 and ensuring the respect of budgetary ceilings for the EAGF by adapting two legislative acts of the Common Agricultural Policy (CAP).
In relation to the financing of the CAP, certain amendments of Regulation (EU) 1306/2013 on the financing, management and monitoring of the common agricultural policy (Horizontal Regulation) are needed to ensure that the financial discipline mechanism that makes it possible to respect the maximum ceiling set by the Regulation on the multi-annual financial framework can still operate for financial years post 2020.
In relation to Direct Payments, Regulation (EU) 2019/288 amended Regulation (EU) No 1307/2013 establishing rules for direct payments to farmers under support schemes within the framework of the common agricultural policy (Direct Payments Regulation) to extend the flexibility between pillars foreseen for calendar years 2015-2019 to calendar year 2020/financial year 2021. This regulation set up the amounts to transfer from the rural development to direct payments envelope as a percentage of the amount allocated to support financed under the EAFRD in financial year 2021 by Union legislation adopted after the adoption by the Council of the relevant Regulation pursuant to Article 312(2) TFEU. The relevant Union legislation may not be in place by the time the Member States need to notify their decision to transfer. To make it possible to apply the flexibility from rural development to direct payments, it is appropriate to establish the maximum amount that can be transferred based on a fixed amount and not a percentage. As a consequence, and because the amount available as direct payments has an impact on the choices by Member States on the Voluntary Coupled Support (VCS) communicated in August 2019, Member Sates should also be able to review the August decision on VCS.
• Consistency with existing policy provisions in the policy area
The proposed amendments are consistent with the Direct Payment Regulation as well as with the Regulation on the financing, management and monitoring of the common agricultural policy. Therefore, the proposal is consistent with the existing policy provisions of the CAP.
• Consistency with other Union policies
2. LEGALBASIS, SUBSIDIARITYAND PROPORTIONALITY
• Legal basis
• Subsidiarity (for non-exclusive competence)
The Treaty on the Functioning of the European Union 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 CAP as provided for in Article 38 to 44 TFEU. Regulation (EU) No 1307/2013 sets up a system for direct payments to farmers. According to Article 39 TFEU, an
objective of the CAP is to ensure a fair standard of living for farmers. The proposed initiative addresses this objective. The added value of the proposal is to ensure certainty and stability of direct income support for European farmers in the year 2020
The respect of the EAGF net ceiling shall be ensured at EU level through application of the financial discipline mechanism where need be. These objectives can only be achieved through an amendment of Regulation (EU) No 1306/2013 and 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
Contents
- CONSULTATIONS
- Not applicable
- Article 43(2) TFEU
- Not applicable
- Not applicable
- Not applicable
- Not applicable
- Not applicable
- Not applicable
- Not applicable
- Member States would therefore have no basis to notify the percentage of transfer from rural development to direct payments and Article 2 (3)(b) of Regulation (EU) 2019/288 amending
ANDIMPACTASSESSMENTS
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 targets financial concerns related to the end 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 December 2019, adoption by the co-legislators is urgent.
• Ex-post evaluations/fitness checks of existing legislation
• Stakeholder consultations
• Collection and use of expertise
• Impact assessment
• Regulatory fitness and simplification
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 amendments of Regulation (EU) No 1306/2013 ensure that a financial discipline adjustment rate can be determined in financial years 2021 and onwards where the expenditure forecasts for the measures financed under the EAGF net ceiling for a given financial year indicate that the applicable annual ceilings would be exceeded. Thereby, the amendment potentially decreases expenditure under EAGF to the maximum level agreed for the fund in the multiannual financial framework.
The amendment of the flexibility provision for calendar year 2020 (financial year 2021) is a technical adjustment to ensure applicability of the provision and does not have any financial implications compared to those intended for the existing provision. T he review option for the voluntary coupled support may lead to financial reallocations between measures within the Member States but these will remain within the national ceiling and as such do not require additional financing.
The broader financial impact of the transitional provisions are set out in the financial state ment accompanying the present proposal.
5. OTHERELEMENTS
• Implementation plans and monitoring, evaluation and reporting arrangements
Explanatory documents (for directives)
• Detailed explanation of the specific provisions of the proposal
• Update of the reference for deter mining a financial discipline rate.
Expenditure under the EAGF within a given financial year shall respect the maximum ceiling set by the Regulation of the multiannual financial framework adopted by the Council pursuant to Article 312(2) TFEU. For that purpose, Article 26 of Regulation (EU) No 1306/2013 provides for the determination of a financial discipline adjustment rate. However, currently the relevant provisions refer to Regulation (EU, Euratom) No 1311/2013 which only sets the relevant ceilings for the period 2014 — 2020. T o ensure that the ceiling for the financing of market related expenditure and direct payments post 2020 will also be respected, the legal reference of Articles 16 and 26 should be amended to include the regulation to be adopted by the Council pursuant to Article 312(2) TFEU for financial year 2021 onwards.
• Change of the basis for notifying the transfer from rural development to direct pay m ents
Member States have to notify by 31 December 2019, the percentage of their direct payments envelope they propose to transfer to the rural development envelope for calendar year 2020 (i.e. financial year 2021). They will have to notify shortly thereafter the percentage of their rural development envelope they propose to transfer to direct payments envelope for calendar
year 2020. The direct payments’ envelopes for calendar year 2020 are already set in
Regulation (EU) No 1307/2013. However, the corresponding rural development envelopes for financial year 2021 may not yet be fixed by the end of 2019.
Member States would therefore have no basis to notify the percentage of transfer from rural development to direct payments and Article 2 (3)(b) of Regulation (EU) 2019/288 amending
Regulation (EU) No 1307/2013 would become “void”. To ensure continuity in the possibility
for Member States to transfer funds between the two pillars, already decided by the co-legislators in Regulation (EU) 2019/288, it is proposed to replace the percentage of transfer by maximum absolute amounts based on the current maximum percentages provided for in Article 14(2) Regulation of (EU) No 1307/2013 and the rural development envelope proposed in the Commission proposal COM(2018) 392 .
• Possibility to review the decisions concerning the Voluntary Coupled Support
Member States had the possibility to review by 1 August 2019 the percentage of their national ceiling for direct payments, which they want to allocate to Voluntary Coupled Support (VCS), as well as their detailed support decisions (i.e. list of support measures and their envelopes, targeti ng, etc.). T his review, if any, will apply from claim year 2020.
On the other hand, they will have to notify only by 31 December 2019 or shortly thereafter their transfers between pillars affecting their national ceiling for direct payments for calendar year 2020. Therefore, Member States applying flexibility between pillars did not yet know by 1 August 2019 (i.e. at the time of their VCS review) their final national ceiling for direct payments for the calendar year concerned. This may result in inconsistencies within the VCS decision, and may also give rise to the disrespect of the budgetary ceiling. Member States should thus be given the possibility to review and notify their VCS decision at the time of deciding on flexibility between pillars, i.e. by the end of 2019or shortly thereafter. However, this second VCS review with regard to calendar year 2020 should be limited to the extent necessary to adjust to the decision on the flexibility between pil lars.