(1)

Article 11(1) of Council Regulation (EC) No 73/2009 of 19 January 2009 establishing common rules for direct support schemes for farmers under the common agricultural policy and establishing certain support schemes for farmers (3) lays down that in financial year 2014, the amounts for the financing of the market related expenditure and direct payments of the Common Agricultural Policy (CAP) have to respect the annual ceilings set out in application of the Regulation adopted by the Council pursuant to Article 312(2) of the Treaty on the Functioning of the European Union. Article 11(1) of Regulation (EC) No 73/2009 also lays down that an adjustment of the direct payments (financial discipline) has to be determined when the forecasts for the financing of the direct payments and market related expenditures, increased by the amounts resulting from the application of Articles 10b and 136 of that Regulation but before the application of Article 10a thereof and without taking into account the margin of EUR 300 000 000, indicate that the annual ceiling will be exceeded. In accordance with Article 11(2) of Regulation (EC) No 73/2009, the European Parliament and the Council have to determine that adjustment by 30 June based on a proposal from the Commission to be presented no later than 31 March of the calendar year in respect of which the adjustment applies.

(2)

Pending the adoption of a regulation laying down the multiannual financial framework on the basis of Article 312(2) of the Treaty on the Functioning of the European Union, the level of the applicable ceiling for the year 2014 remains uncertain. Until there is clarity on the level of the applicable ceiling, it is not possible to determine whether an adjustment of the direct payments for 2013 is necessary and, if so, what the rate should be. The amount of financial discipline required should be revised by the budgetary authority in the framework of the adoption of the Budget 2014 on the basis inter alia of the Amending letter to the Draft General Budget 2014 by which the Commission provides updated estimated needs on market related expenditures and direct payments. [Am. 1]

(3)

As a general rule, farmers submitting an aid application for direct payments for one calendar year (N) are paid within a fixed payment period falling under the financial year (N+1). However, Member States have the possibility to make late payments, within certain limits, to farmers beyond this payment period without any time limits. Such late payments may fall in a later financial year. When financial discipline is applied for a given calendar year, the adjustment rate should not be applied to payments for which aid applications have been submitted in the calendar years other than that for which the financial discipline applies. Therefore, in order to ensure equal treatment of farmers, it is appropriate to provide that the adjustment rate should be applied to payments for which aid applications have been submitted in the calendar year for which the financial discipline is applied, irrespectively of when the payment is made to farmers.

(4)

The mechanism of the financial discipline, together with the modulation, was introduced with the 2003 CAP reform. Both instruments provided for a linear reduction of the amount of direct payments to be granted to farmers. Taking into account the implications of the unequal distribution of direct payments between small and large beneficiaries, modulation has been applied to amounts in excess of EUR 5 000 in order to achieve a more balanced distribution of payments. In respect of calendar year 2013, the adjustment of direct payments referred to in Article 10a of Regulation (EC) No 73/2009 continues to provide for the same exemption as the modulation. The financial discipline should be applied in a similar way to also contribute to achieving the objective of a more balanced distribution of payments; therefore, it is appropriate to provide for the application of the adjustment rate only for amounts in excess of EUR 5 000.

(5)

Article 11(3) of Regulation (EC) No 73/2009 lays down that in the framework of the application of the schedule of increments provided for in Article 121 of that Regulation to all direct payments granted in the new Member States within the meaning of Article 2(g) of that Regulation, the financial discipline should not apply to the new Member States until the beginning of the calendar year in respect of which the level of direct payments applicable in the new Member States is at least equal to the then applicable level of such payments in the other Member States. Since the direct payments are still subject to the application of the schedule of increments in calendar year 2013 in Bulgaria and Romania, the adjustment rate to be determined by the present Regulation should not apply to payments to farmers in those Member States.

(6)

Regulation (EC) No 73/2009 has been adapted by the Act concerning the conditions of accession of the Republic of Croatia. The amendments resulting from the adaptation in question will enter into force only subject to and on the date of the entry into force of the Treaty concerning the accession of the Republic of Croatia to the European Union. Since Croatia is subject to the application of the schedule of increments provided for in Article 121 of Regulation (EC) No 73/2009 in calendar year 2013 the adjustment rate to be determined by the present Regulation should not apply to payments to farmers in Croatia, subject to its accession and as of the date of its accession,