(1)

Council Regulation (EC) No 318/2006 of 20 February 2006 on the common organisation of the markets in the sugar sector (3) provides for an important reform of the sugar common market organisation. The measures introduced by that Regulation include a significant reduction in the institutional support price for Community sugar in steps.

(2)

As a consequence of reduced market support in the sugar sector, income support for farmers should be increased. The overall level of the payment should develop in parallel with the gradual reduction of market supports.

(3)

The de-coupling of direct producer support and the introduction of the single payment scheme are essential elements in the process of reforming the common agricultural policy aimed at moving away from a policy of price and production support to a policy of farmer income support. Regulation (EC) No 1782/2003 (4) introduced those elements for a variety of agricultural products.

(4)

In order to meet the objectives underlying the reform of the common agricultural policy, the support for sugar beet, cane and chicory used for the production of sugar or inulin syrup should be de-coupled and integrated into the single payment scheme.

(5)

Consequently, the rules on direct support schemes laid down in Regulation (EC) No 1782/2003 should be adapted.

(6)

To buffer the effects of the restructuring process in Member States which have granted the restructuring aid provided for in Council Regulation (EC) No 320/2006 of 20 February 2006 establishing a temporary scheme for the restructuring of the sugar industry in the Community (5) for at least 50 % of the quota fixed in Regulation (EC) No 318/2006, sugar beet and cane producers should be granted an aid for a maximum of five consecutive years.

(7)

The level of individual income support should be calculated on the basis of the support the farmer has benefited from in the context of the common organisation of the market in the sugar sector for one or more marketing years to be determined by Member States.

(8)

To ensure the proper application of the support scheme and for reasons of budget control, provision should be made for keeping the overall income support within the limit of national envelopes calculated on the basis of a historical reference year and taking into account, during the four first years, of additional amounts resulting from derived prices.

(9)

Sugar beet and chicory growers in the new Member States have benefited since accession from price support in the framework of Regulation (EC) No 1260/2001 of 19 June 2001 on the common organisation of the markets in the sugar sector (6). Therefore, the sugar payment and the sugar and chicory components in the single payment scheme should not be subject to the application of the schedule of increments provided for in Article 143a of Regulation (EC) No 1782/2003. For the same reasons, Member States applying the single area payment scheme should, moreover, have the possibility to grant the support resulting from the sugar reform in the form of a separate direct payment outside that scheme.

(10)

To ensure the proper application of the single payment scheme in the new Member States, provisions should be made regarding specific problems arising as a result of the transition from the single area payment scheme to the single payment scheme.

(11)

Member States that have opted or will opt for applying the single payment scheme only as from 1 January 2007 should be enabled to grant income support to growers of sugar beet, cane and chicory used for the production of sugar and inulin syrup in 2006 in the form of a payment based on the number of hectares of sugar beet, cane or chicory delivered. With regard to the calculation of the sugar beet and chicory component in the single payment scheme, Member States should have the possibility to determine the marketing years to be taken into account on a representative basis.

(12)

In order to solve, as the case may be, problems arising from the change-over from the current regime to the single payment scheme, it is appropriate to confer the power on the Commission to adopt the relevant transitional rules by amending Article 155 of Regulation (EC) No 1782/2003.

(13)

In order to earmark certain newly introduced payments as direct payments, Annex I to Regulation (EC) No 1782/2003 should be adapted.

(14)

In order to take account of the amount of income support provided for with regard to the sugar payment, the national ceilings provided for in Annexes II, VIII and VIIIa to Regulation (EC) No 1782/2003 should be adapted.

(15)

Difficulties have been identified when implementing the aid for energy crops. Article 90 of Regulation (EC) No 1782/2003 should therefore be adapted.

(16)

Regulation (EC) No 1782/2003 should be amended accordingly,

1)

in Article 33(1), point (a) shall be replaced by the following:

;

2)

the following subparagraph shall be added to Article 37(1):

‘For sugar beet, cane and chicory used for the production of sugar or inulin syrup the reference amount shall be calculated and adjusted in accordance with point K of Annex VII.’

3)

Article 40(2) shall be replaced by the following:

4)

Article 41 shall be amended as follows:

5)

in Article 43(2), point (a) shall be replaced by the following:

;

6)

the following subparagraph shall be added to Article 63(3):

‘However, with regard to the inclusion of the sugar beet, cane and chicory payments component in the single payment scheme, Members States may decide by 30 April 2006, to apply the derogation provided for in the first subparagraph.’

7)

the following paragraph shall be added to Article 71a:

8)

Article 71c shall be replaced by the following:

9)

Article 71d(1) shall be replaced by the following:

10)

in Article 71d(6) the first subparagraph shall be replaced by the following:

11)

the following paragraph shall be added to Article 71d:

12)

the following subparagraph shall be added to Article 71e(2):

‘However, new Member States having applied the single area payment scheme may be considered as one single region.’

13)

the following Article shall be added in Chapter VI of Title III:

14)

the first subparagraph of Article 90 shall be replaced by the following:

‘The aid shall be granted only in respect of areas whose production is covered by a contract between the farmer and the processing industry or by a contract between the farmer and the collector, except in case of processing undertaken by the farmer himself/herself on the holding.’

15)

the following Chapters shall be inserted in Title IV:

(*1)   OJ L 58, 28.2.2006, p. 42."

(*2)   OJ L 58, 28.2.2006, p. 1.’ "

16)

in Article 143b(3), the last indent shall be replaced by the following:

;

17)

the following Article shall be inserted after Article 143b:

18)

the following point shall be inserted in Article 145 after point (d)a):

;

19)

Article 155 shall be replaced by the following:

20)

the Annexes shall be amended in accordance with the Annex to this Regulation.