Simplification and better regulation for the common agricultural policy

The Commission plans to simplify the Common Agricultural Policy (CAP) by improving the structure and presentation of agricultural legislation. This Communication examines the possibilities and limits of such a simplification and proposes measures, including a single common market organisation (CMO) and the drawing up in 2006 of an action plan containing specific measures.

ACT

Communication from the Commission of 19 October 2005 on Simplification and Better Legislation for the Common Agricultural Policy [COM(2005) 509 final - not published in the Official Journal].

SUMMARY

In the communication the Commission sets out past and future measures aimed at simplifying the CAP. One of the major steps envisaged is to create a single common market organisation (CMO) for all agricultural products.

The aim of this communication is to revise the legal framework, administrative procedures and management mechanisms to make them more transparent and understandable while preserving the basic policy principles. This initiative is to make simplifying the CAP part of a process of awareness-raising, dialogue and planning. These objectives were followed up on in October 2006 in an action plan and a conference of stakeholders.

THE PURPOSE OF SIMPLIFICATION:

The aim is to identify and eliminate unnecessary obstacles. Simplification will take two forms:

technical simplification meaning revision of the legal framework, administrative procedures and management mechanisms to achieve streamlining and greater cost-effectiveness;
political simplification meaning reducing complexity and improving agricultural support and rural development policy instruments.

LIMITATIONS

Simplifying the CAP is an ambitious task. It must be compatible with other political objectives such as environmental protection, food safety and safeguarding the Community's financial interests. It must also respect the different economic, environmental and political realities in the Member States. At the same time, it is important to find a balance between simplicity in administration and sufficient flexibility to reflect local needs.

STOCKTAKING: HORIZONTAL MEASURES

Streamlining of agricultural legislation

At the time of publication of this communication, the Commission has already reduced the number of agricultural acts in force and improved the presentation of the texts. As part of the two-year programme on Updating and simplifying the Community acquis the Commission screens the acquis to identify obsolete agricultural legislation. In addition, all Community agricultural legislation, most of which is available in a consolidated version, is freely accessible to all citizens.

State aid rules

Since 1999, the rules governing State aid have been simplified and made more transparent. Part of this rationalisation has involved repealing a number of legal texts.

Reporting

Informal guidelines have been established and the number and frequency of reports have been reduced. Certain acts on irregularities in CAP expenditure and the Structural Funds are being or will be reviewed to reduce the administrative burden on the Member States.

STOCKTAKING: POLICY MEASURES

2003 CAP reform

This reform, which radically changed the CAP, was an important step towards improving the quality of the European Union's legislation. Nine Council regulations and many other provisions were repealed. Other regulations have been reformulated and procedures have been simplified via the creation of a single management committee for all direct payments.

The reform's potential for simplifying the way agricultural income support is granted, managed and controlled is significant. Realising that potential is a matter for the Member States, who may choose between two decoupling models *, apply partial decoupling or exclude certain aid schemes from decoupling, implement a separate support system and make use of various derogations. If they decide to make use of the full range of possibilities the heterogeneous application of the reform will increase the complexity of the system.

Single Area Payment Scheme for the new Member States

For a maximum of five years after accession, the new Member States may grant simplified direct income support. The Single Area Payment Scheme (SAPS) authorises the grant of a flat rate per hectare of farmland. In addition, only area-related checks are required.

Rural development

The Council Regulation (EC) No 1698/2005 on support for rural development for the period 2007-2013 simplifies the content, scope and implementation of the policy by establishing clear priorities and streamlining programming. It also establishes a single financing, programming, financial management and control framework.

Financing the CAP

Through Council Regulation (EC) No 1290/2005, the rules for financing the two pillars of the CAP have been combined in a single legal text setting up two Funds - the European Agricultural Guarantee Fund (EAGF) and the European Agricultural Fund for Rural Development (EAFRD). As far as possible, the same rules apply to both, simplifying the financial management of rural development measures in the next programming period and the treatment of irregularity cases

THE WAY FORWARD: TECHNICAL SIMPLIFICATION

Streamlining of agricultural legislation

The Commission intends to explore new ways of improving the structure and presentation of agricultural legislation. A "legal audit" will be carried out to identify and eliminate superfluous rules, replace multiple sectoral rules with horizontal rules and provide for sunset clauses where appropriate.

A single CMO for all agricultural products

The 2003 reform simplified the CAP's legislative environment by establishing a horizontal legal framework for all direct payments and amalgamating an array of support systems into a single payment scheme. The Commission intends to extend that approach to the 21 common market organisations and to create a simplified and rationalised legal structure for the first pillar of the CAP. The extent to which harmonisation is possible and sectoral approaches can be replaced with horizontal ones needs to be examined.

Administrative costs

The Commission intends to test the feasibility of an "EU net administrative cost method" which would help national administrations to quantify and reduce the administrative costs imposed on farmers by CAP mechanisms.

State aid

The seven texts currently in force will be reduced to three: the exemption regulation, one set of guidelines and the de minimis regulation.

THE WAY FORWARD: POLICY MEASURES

Reform of the sugar CMO

In 2006, the reform of the agricultural sector instituted a significant number of simplifications:

introduction of a single quota system;
variable production levies linked to quotas replaced by fixed charges;
intervention replaced by private storage;
simplification of the rules on trade with third countries;
inclusion of direct income support in the sugar sector in the Single Payment Scheme.

Other sectors

Simplification will play an important role in the various scheduled policy reviews, including the wine CMO, organic farming and quality policy.

PROCESSES

CAP simplification needs to be embedded in a process of awareness-raising, dialogue and planning, providing for the following measures:

action plan (PDF): simplification proposals made by Member States and stakeholders were taken into consideration in the development of a CAP action plan drawn up by the Commission's departments in October 2006;
conference : a conference on simplification of the CAP brought together stakeholders' viewpoints and requirements in October 2006;
training: staff training and awareness raising on the purposes of simplification are an important part of the ongoing simplification work;
information technologies: the use of IT tools is essential for the implementation of the mechanisms for data collection and the exchange of information with the national authorities.

Context

This communication is part of the simplification of legislation (PDF) provided for in the Community's Lisbon programme.

Key terms used in the act

Decoupling: This consists in breaking the link between production and subsidy. From now on the major proportion of aid will be paid regardless of production volume.

See also