Amendments to Common Organisation
of the Market Regulations (article 52)
52. The UK does not implement the existing
provisions of this measure as currently available under EC Regulation
952/97 (previously 746/93 as amended).
Financial Implications
53. Rates of Community financing within
the proposal are given as maxima (50 per cent with higher maxima
in Objective 1 areas based on the Structural Regulation provisions
(75 per cent with higher rates for Objective 1 areas in Cohesion
countries (80 per cent) and ultra-peripheral regions (85 per cent)).
An increase of 10 per cent on the rate of EU co-financing (ie
50 per cent to 55 per cent) is available for agri-environment
measures "of special merit from the environmental viewpoint".
The general financing position is that financial envelopes would
be made available on a member state basis for the drawing up of
Regional Development Plans for approval as Programmes by the Commission.
54. The Commission have indicated a one-off
increase from Year 2000 for the new accompanying measures of 180
mecu (from 2,620 to 2,800 mecu) above current envisaged provision,
this being associated with reinforcing and encouraging agri-environment
measures. There are increases of 40 mecu (2 per cent) per annum
each year 2000-06 for the other "rural development"
measures. In carrying forward measures from current regulations
the Commission have also changed some of the minimum and maximum
rates for EU funding.
55. A major problem therefore arises from
the proposal will be ensuring an adequate level of funding, given
that funds are not released by the commodity reform proposals.
Savings from application of cross compliance and modulation by
work unit under the Commission's proposal for a horizontal regulation
would in theory be available for agri-environment measures. In
practice, however, it is doubtful if significant funds would be
released from these sources even if they were applied in the UK
and clarification is required of the need for increased matching
national funding.
56. As all the measures within the proposal
are eligible for co-financing, there could be expenditure implications
if current measures applied in the UK are to be expanded. Furthermore
the proposed minimum level for LFA (HLCA) payments would increase
HLCA expenditure by about £120 million on the current area
of the UK LFA. The proposal will also need to be considered in
the light of the outcome of the Comprehensive Spending Review
(CSR). Details of expenditure on the measures covered by this
proposal for 1997-98 are shown in Table 9.1 of Agriculture in
the UK 1997, Sections 1A(ii), 1B, III and IV.
Views of Other Member States
57. All Member States generally welcome
the proposal with most acknowledging the simplfication of Council
legislation, but doubting whether there will be simplification
in application. The most contentious issues are the move of funding
of certain measures within the EAGGF from Guidance section to
Guarantee section; and the proposal to introduce environmental
objectives and requirements into compensatory allowances. Initial
indications are that many member states are not in favour of either
of these. Many have also expressed concern at the financing arrangements
of the proposals and about the level of administrative arrangements
to be applied. Many would prefer an EU wide framework adopted
for most measures while others (including the Commission) wish
to see detailed rules adopted at Member State level within individual
Regional Programmes. Several Member States wish to see the measures,
if they are Guarantee funded, restricted to farmers and forestry.
58. During the meetings which have been
held to date of the Council Working Group which is considering
this proposal, the Commission has noted the comments of Member
States on a number of issues, including inconsistencies in the
draft, and agreed to consider them further. However, they have
not, as yet, agreed any changes to their proposal.
5 June 1998
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