Committee on Agriculture and Rural Development

EUROPEAN PARLIAMT 2009-2014 Committee on Agriculture and Rural Development 24.7.2013 2013/0117(COD) ***I DRAFT REPORT on the proposal for a regulation of the European Parliament and of the Council laying down certain transitional provisions on support for rural development by the European Agricultural Fund for Rural Development (EAFRD) and amending Regulation (EU) No [RD] as regards resources and their distribution in respect of the year 2014 and amending Council Regulation (EC) No 73/2009 and Regulations (EU) No [DP], (EU) No [HZ] and (EU) No [scmo] as regards their application in the year 2014 (COM(2013)0226 C7-0104/2013 2013/0117(COD)) Committee on Agriculture and Rural Development Rapporteur: Albert Deß PR\938454.doc PE513.119v01-00 United in diversity

PR_COD_1amCom Symbols for procedures * Consultation procedure *** Consent procedure ***I Ordinary legislative procedure (first reading) ***II Ordinary legislative procedure (second reading) ***III Ordinary legislative procedure (third reading) (The type of procedure depends on the legal basis proposed by the draft act.) s to a draft act In amendments by Parliament, amendments to draft acts are highlighted in bold italics. Highlighting in normal italics is an indication for the relevant departments showing parts of the draft act which may require correction when the final text is prepared for instance, obvious errors or omissions in a language version. Suggested corrections of this kind are subject to the agreement of the departments concerned. The heading for any amendment to an existing act that the draft act seeks to amend includes a third line identifying the existing act and a fourth line identifying the provision in that act that Parliament wishes to amend. Passages in an existing act that Parliament wishes to amend, but that the draft act has left unchanged, are highlighted in bold. Any deletions that Parliament wishes to make in such passages are indicated thus: [...]. PE513.119v01-00 2/33 PR\938454.doc

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DRAFT EUROPEAN PARLIAMT LEGISLATIVE RESOLUTION on the proposal for a regulation of the European Parliament and of the Council laying down certain transitional provisions on support for rural development by the European Agricultural Fund for Rural Development (EAFRD) and amending Regulation (EU) No [RD] as regards resources and their distribution in respect of the year 2014 and amending Council Regulation (EC) No 73/2009 and Regulations (EU) No [DP], (EU) No [HZ] and (EU) No [scmo] as regards their application in the year 2014 (COM(2013)0226 C7-0104/2013 2013/0117(COD)) (Ordinary legislative procedure: first reading) The European Parliament, having regard to the Commission proposal to Parliament and the Council (COM(2013)0226 ), having regard to Article 294(2) and Article 43(2) of the Treaty on the Functioning of the European Union, pursuant to which the Commission submitted the proposal to Parliament (C7-0104/2013), having regard to Article 294(3) of the Treaty on the Functioning of the European Union, having regard to the opinion of the European Economic and Social Committee 1, having regard to the opinion of the Committee of the Regions of 4 June 2013 2, having regard to Rule 55 of its Rules of Procedure, having regard to the report of the Committee on Agriculture and Rural Development and the opinion of the Committee on Budgets (A7-0000/2013), 1. Adopts its position at first reading hereinafter set out; 2. Calls on the Commission to refer the matter to Parliament again if it intends to amend its proposal substantially or replace it with another text; 3. Instructs its President to forward its position to the Council, the Commission and the national parliaments. 1 2 Not yet published in the Official Journal. Not yet published in the Official Journal. PR\938454.doc 5/33 PE513.119v01-00

1 Recital -1 (new) (-1) whereas the Commission, in its Communication of 12 December 2012 on EU regulatory fitness (COM(2012) 746 final), undertakes to keep up its efforts to remove all unnecessary regulatory burdens; whereas it is important to ensure that administrative burden in the agricultural sector be regularly monitored and reduced; whereas the European Parliament and the Council should be informed about progress in this area; 2 Recital 3 (3) To ensure legal certainty in the transition it should be provided that expenditure undertaken pursuant to Regulation (EC) No 1698/2005 under area and animal related measures should be eligible for an EAFRD contribution in the new programming period when there are still payments to be made. In the interest of sound financial management and effective programme implementation, such expenditure should be clearly identified in the rural development programmes and throughout the management and control systems of the Member States. In order to avoid unnecessary complexity in the financial management of rural (3) To ensure legal certainty in the transition it should be provided that expenditure undertaken pursuant to Regulation (EC) No 1698/2005 under area and animal related measures and investment should be eligible for an EAFRD contribution in the new programming period. In the interest of sound financial management and effective programme implementation, such expenditure should be clearly identified in the rural development programmes and throughout the management and control systems of the Member States. In order to avoid unnecessary complexity in the financial management of rural PE513.119v01-00 6/33 PR\938454.doc

development programmes in the new programming period, it should be provided that the co-financing rates of the new programming period shall apply to transitional expenditure. development programmes in the new programming period, it should be provided that the co-financing rates of the new programming period shall apply to transitional expenditure. Investment measures with the aim of modernising agricultural holdings should also be eligible for funding during the transition period. A continuous transition is required in order to support the countryside. 3 Recital 11 With a view to allowing Member States to address the needs of their agricultural sectors or to strengthen their rural development policy in a more flexible way, they should be given the possibility to transfer funds from their direct payments ceilings to their support assigned for rural development and from the support assigned for rural development to their direct payments ceilings. At the same time, Member States where the level of direct support remains lower than 90 % of the Union average level of support should be given the possibility to transfer additional funds from their support assigned for rural development to their direct payments ceilings. Such choices should be made, within certain limits, once and for the whole period of financial years 2015-2020. With a view to allowing Member States to address the needs of their agricultural sectors or to strengthen their rural development policy in a more flexible way, they should be given the possibility to transfer funds from their direct payments ceilings to their support assigned for rural development. At the same time, Member States where the level of direct support remains lower than 90 % of the Union average level of support should be given the possibility to transfer additional funds from their support assigned for rural development to their direct payments ceilings. Such choices should be made, within certain limits, for the whole period of financial years 2015-2020, with the possibility of a review in 2017. PR\938454.doc 7/33 PE513.119v01-00

direct payments (Decision of 13 March 2013). 4 Article -1 (new) Article -1 Reducing administrative burden The Commission shall avoid any additional, unnecessary and disproportionate administrative burden when implementing this Regulation and Regulations (EU) No [DP], (EU) No [HZ] and (EU) No [scmo]. The Commission shall submit to the European Parliament and the Council at regular intervals a report on the efforts made to reduce administrative burden. 5 Article 1 paragraph 1 By way of derogation from Article 94 of Regulation (EU) No [ ] [RD], for the measures of Article 36(a)(i) to (v) and (b)(iv) and (v) of Regulation (EC) No 1698/2005, Member States may continue to undertake new legal commitments to beneficiaries in 2014 pursuant to the rural development programmes adopted on the basis of Regulation (EC) No 1698/2005 even after the financial resources of the By way of derogation from Article 94 of Regulation (EU) No [ ] [RD], for the measures of Article 20(b)(i), (iii), (iv) and (v) and Article 36(a)(i) to (v) and (b)(iv) and (v) of Regulation (EC) No 1698/2005, Member States may continue to undertake new legal commitments to beneficiaries in 2014 pursuant to the rural development programmes adopted on the basis of Regulation (EC) No 1698/2005 even after PE513.119v01-00 8/33 PR\938454.doc

2007-2013 programming period have been used up, until the adoption of the respective rural development programme for the 2014-2020 programming period. The expenditure incurred on the basis of these commitments shall be eligible in accordance with Article 3 of this Regulation. the financial resources of the 2007-2013 programming period have been used up, until the adoption of the respective rural development programme for the 2014-2020 programming period. The expenditure incurred on the basis of these commitments shall be eligible in accordance with Article 3 of this Regulation. Investment measures with the aim of modernising agricultural holdings should also be eligible for funding during the transition period. A continuous transition is required in order to support the countryside. 6 Article 3 paragraph 1 By way of derogation from Article 7(1) of Regulation (EU) No [ ] [RD], expenditure relating to legal commitments to beneficiaries, undertaken under the measures of Article 36(a)(i) to (v) and (b)(iv) and (v) of Regulation (EC) No 1698/2005 and of Article 36(b)(i) and (iii) of that Regulation in relation to the annual premium, shall be eligible for an EAFRD contribution in the 20142020 programming period in the following cases: a) for payments to be made between 1 January 2014 and 31 December 2015, if the financial allocation for the measure concerned of the respective programme adopted pursuant to Regulation (EC) No 1698/2005 has already been used up; and b) for payments to be made after 31 December 2015. By way of derogation from Article 7(1) of Regulation (EU) No [ ] [RD], expenditure relating to legal commitments to beneficiaries, undertaken under the measures of Article 20(b)(i), (iii), (iv) and (v), Article 36(a)(i) to (v) and (b)(iv) and (v) of Regulation (EC) No 1698/2005 and of Article 36(b)(i) and (iii) of that Regulation in relation to the annual premium, shall be eligible for an EAFRD contribution in the 20142020 programming period in the following cases: (a) for payments to be made between 1 January 2014 and 31 December 2015, if the financial allocation for the measure concerned of the respective programme adopted pursuant to Regulation (EC) No 1698/2005 has already been used up; and (b) for payments to be made after 31 December 2015 as regards commitments PR\938454.doc 9/33 PE513.119v01-00

under Article 36. Investment measures with the aim of modernising agricultural holdings should also be eligible for funding during the transition period. A continuous transition is required in order to support the countryside. 7 Article 5 paragraph 1 point 2 Regulation (EC) No 73/2009 Article 40 paragraph 3 3. Without prejudice to Article 25 of Regulation (EU) No [HZ] of the European Parliament and of the Council*, the amounts of direct payments which may be granted in a Member State in respect of calendar year 2014 under Articles 34, 52, 53 and 68 of this Regulation and for the aid to silkworm rearers under Article 111 of Regulation (EC) No 1234/2007 shall not be higher than the ceilings set out in Annex VIII to this Regulation for that year. Where necessary, and in order to comply with the ceilings set out in Annex VIII, Member States shall make a linear reduction in the amounts of direct payments in respect of calendar year 2014. 3. Without prejudice to Article 25 of Regulation (EU) No [HZ] of the European Parliament and of the Council*, the amounts of direct payments which may be granted in a Member State in respect of calendar year 2014 under Articles 34, 52, 53 and 68 of this Regulation and for the aid to silkworm rearers under Article 111 of Regulation (EC) No 1234/2007 shall not be higher than the ceilings set out in Annex VIII to this Regulation for that year, minus the amounts resulting from the application of Article 136(b) for calendar year 2015 in accordance with Annex VIIIa to this Regulation. Where necessary, and in order to comply with the ceilings set out in Annex VIII, Member States shall make a linear reduction in the amounts of direct payments in respect of calendar year 2014 minus the amounts resulting from the application of Article 136(b) for calendar year 2015 in accordance with Annex VIIIa to this regulation. PE513.119v01-00 10/33 PR\938454.doc

Inclusion of a provision allowing Member States to continue to transfer unspent resources from the first pillar to the second in 2014. 8 Article 5 paragraph 1 point 5a (new) Regulation (EC) No 73/2009 Chapter 5a (new) In Title III, Chapter 5a is inserted after Article 72: CHAPTER 5a REDISTRIBUTIVE PAYMT for 2014 Article 72a General rules 1. Member States may decide, up to...*, to grant, for the year 2014, an award to farmers who are entitled to a payment under the single payment scheme in accordance with Chapter 1 and/or Chapter 2, Section 1 of this Title or under the single area payment scheme under Title 5. Member States shall notify the Commission of their decision by the date referred to in the first subparagraph. 2. Member States which have decided to apply the single payment scheme at regional level may apply the payment referred to in this Chapter at regional level. 3. Payments made in accordance with paragraph 1 shall only be made to farmers who activate payment claims or receive payments under the single area payment scheme in 2014. 4. The payment referred to in paragraph 1 shall be calculated by Member States by PR\938454.doc 11/33 PE513.119v01-00

multiplying a figure to be set by the Member State which shall not be higher than 65 % of the national or regional average payment per hectare by the number of payment entitlements that the farmer has activated in accordance with Article 35(1), or by the number of eligible hectares declared by the farmer under the single area payment scheme. The number of such payment entitlements or hectares shall not be greater than 30 hectares or the average size of agricultural holdings as set out in Annex XIIa if that average size is greater than 30 hectares in the Member State concerned. Provided that the maximum limits set out in the first subparagraph are respected, Member States may, at national level, establish a graduation within the number of hectares set in accordance with the first subparagraph, which shall apply equally to all farmers. The national average payment per hectare referred to in the first subparagraph shall be established by the Member States on the basis of the national ceiling set in Annex VIII for calendar year 2014 and the number of eligible hectares declared in accordance with Article 35 or under the single area payment scheme in 2014. The regional average payment per hectare in accordance with the first subparagraph shall be determined by Member States on the basis of objective criteria. 5. Member States shall ensure that no payments are made to farmers where it has been proven that, at any point after 19 October 2011, they have divided up their land with the sole purpose of being awarded a redistributive payment. This shall also apply to farmers whose holdings result from that division. Article 72b Financial provisions PE513.119v01-00 12/33 PR\938454.doc

1. In order to finance the payment referred to in this Chapter, Member States may use up to 30 % of the national ceiling for calendar year 2014 in accordance with Annex VIII. 2. On the basis of the percentage of the national ceiling used by Member States in accordance with paragraph 1, the Commission shall set, by means of delegated acts pursuant to Article 141a, the respective ceilings for the payment concerned and adapt the ceilings in line with Annex VIII." * OJ please insert date: three months after the entry into force of this Regulation. 9 Article 5 point 9 Regulation (EC) No 73/2009 Article 136a paragraph 1 subparagraph 2 The decision referred to in the first subparagraph shall be notified to the Commission by the date referred to in that subparagraph. The decision referred to in the first subparagraph shall be notified to the Commission by the date referred to in that subparagraph. The decision shall set out the percentage referred to in the first subparagraph, which may vary by calendar year. PR\938454.doc 13/33 PE513.119v01-00

direct payments (Decision of 13 March 2013). 10 Article 5 point 9 Regulation (EC) No 73/2009 Article 136a paragraph 1 subparagraph 3 The percentage notified in accordance with the second subparagraph shall be the same for the years referred to in the first subparagraph. deleted direct payments (Decision of 13 March 2013). 11 Article 5 point 9 Regulation (EC) No 73/2009 Article 136a paragraph 1 a (new) 1a. By 1 August 2017, Member States may decide to review the decisions referred to in this article with effect from the following year. direct payments (Decision of 13 March 2013). PE513.119v01-00 14/33 PR\938454.doc

12 Article 5 point 9 Regulation (EC) No 73/2009 Article 136a paragraph 2 subparagraph 1 2. [Member States] not using the possibility under paragraph 1, [may decide, before..., to make available as direct payments under this Regulation and Regulation (EU) No [DP] up to [15] % of the amount allocated to support for measures under rural development programming financed under the EAFRD in the period 2015-2020 as specified under Regulation (EU) No [ ] [RD]]. Bulgaria, Estonia, Finland, Latvia, Lithuania, Poland, Portugal, Romania, Slovakia, Spain, Sweden and the United- Kingdom may decide to make available as direct payments an [additional] [10%] of the amount allocated under rural development. As a result, the corresponding amount shall no longer be available for support measures under rural development programming. 2. Before...* Bulgaria, Estonia, Finland, Latvia, Lithuania, Poland, Portugal, Romania, Slovakia, Spain, Sweden and the United-Kingdom may decide to make available as direct payments up to [10%] of the amount allocated under rural development. As a result, the corresponding amount shall no longer be available for support measures under rural development programming. As a result, the corresponding amount shall no longer be available for support measures under rural development programming. * OJ please insert the date 7 days from the date of entry into force of this Regulation. * OJ please insert the date three months after the entry into force of this Regulation. direct payments (Decision of 13 March 2013). PR\938454.doc 15/33 PE513.119v01-00

13 Article 5 point 9 Regulation (EC) No 73/2009 Article 136a paragraph 2 subparagraph 2 The decision referred to in the first subparagraph shall be notified to the Commission by the date referred to in that subparagraph. The decision referred to in the first subparagraph shall be notified to the Commission by the date referred to in that subparagraph. The decision shall set out the percentage referred to in the first subparagraph, which may vary by calendar year. direct payments (Decision of 13 March 2013). 14 Article 5 point 9 Regulation (EC) No 73/2009 Article 136a paragraph 2 subparagraph 3 The percentage notified in accordance with the second subparagraph shall be the same for the years referred to in the first subparagraph of paragraph 1. deleted direct payments (Decision of 13 March 2013). PE513.119v01-00 16/33 PR\938454.doc

15 Article 5 point 9 Regulation (EC) No 73/2009 Article 136a paragraph 2 a (new) 2a. By 1 August 2017, Member States may decide to review the decisions referred to in this article with effect from the following year. direct payments (Decision of 13 March 2013). 16 Article 5 paragraph 1 point 9a (new) Regulation (EC) No 73/2009 Article 136b (new) 9a. The following Article 136b shall be inserted: Article 136b Member States which have decided, in accordance with Article 136, to make available from financial year 2011 an amount for Community support in the framework of rural development programming and financing under the European Agricultural Fund for Rural Development (EAFRD), shall continue to make these amounts available for Community support in the framework of rural development programming and financing under the EAFRD for financial year 2015 in accordance with PR\938454.doc 17/33 PE513.119v01-00

Annex VIIIa." Inclusion of a provision allowing Member States to continue to transfer unspent resources from the first pillar to the second in 2014. 17 Article 6 point 2 Regulation (EU) No [...] [DP] Article 14 paragraph 1 subparagraph 2 The decision referred to in the first subparagraph shall be notified to the Commission by the date referred to in that subparagraph. The decision referred to in the first subparagraph shall be notified to the Commission by the date referred to in that subparagraph. The decision shall set out the percentage referred to in the first subparagraph, which may vary by calendar year. direct payments (Decision of 13 March 2013). 18 Article 6 point 2 Regulation (EU) No [...] [DP] Article 14 paragraph 1 subparagraph 3 The percentage notified in accordance with the second subparagraph shall be the same for the years referred to in the first deleted PE513.119v01-00 18/33 PR\938454.doc

subparagraph. direct payments (Decision of 13 March 2013). 19 Article 6 point 2 Regulation (EU) No [...] [DP] Article 14 paragraph 2 subparagraph 1 2. [Member States] not using the possibility under paragraph 1, [may decide, before..., to make available as direct payments under this Regulation and Regulation (EU) No [DP] up to [15] % of the amount allocated to support for measures under rural development programming financed under the EAFRD in the period 2015-2020 as specified under Regulation (EU) No [ ] [RD]]. Bulgaria, Estonia, Finland, Latvia, Lithuania, Poland, Portugal, Romania, Slovakia, Spain, Sweden and the United- Kingdom may decide to make available as direct payments an [additional] [10%] of the amount allocated under rural development. As a result, the corresponding amount shall no longer be available for support measures under rural development programming. 2. Before...* Bulgaria, Estonia, Finland, Latvia, Lithuania, Poland, Portugal, Romania, Slovakia, Spain, Sweden and the United-Kingdom may decide to make available as direct payments up to [10%] of the amount allocated under rural development. As a result, the corresponding amount shall no longer be available for support measures under rural development programming. As a result, the corresponding amount shall no longer be available for support measures under rural development programming. * OJ please insert the date 7 days from the date of entry into force of this Regulation. * OJ please insert the date three months after the entry into force of this Regulation. PR\938454.doc 19/33 PE513.119v01-00

direct payments (Decision of 13 March 2013). 20 Article 6 point 2 Regulation (EU) No [...] [DP] Article 14 paragraph 2 subparagraph 2 The decision referred to in the first subparagraph shall be notified to the Commission by the date referred to in that subparagraph. The decision referred to in the first subparagraph shall be notified to the Commission by the date referred to in that subparagraph. The decision shall set out the percentage referred to in the first subparagraph, which may vary by calendar year. direct payments (Decision of 13 March 2013). 21 Article 6 point 2 Regulation (EU) No [...] [DP] Article 14 paragraph 2 subparagraph 3 The percentage notified in accordance with the second subparagraph shall be the same for the years referred to in the first subparagraph of paragraph 1." deleted PE513.119v01-00 20/33 PR\938454.doc

direct payments (Decision of 13 March 2013). 22 Article 6 point 2 Regulation (EU) No [...] [DP] Article 14 paragraph 2 a (new) 2a. By 1 August 2017, Member States may decide to review the decisions referred to in this article with effect from the following year. direct payments (Decision of 13 March 2013). 23 Article 6 point 4 Regulation (EU) No [...] [DP] Article 59 (4) In Article 59, the second and the third paragraphs are replaced by the following: (4) In Article 59, the second and the third paragraphs are replaced by the following: "It shall apply from 1 January 2015. "It shall apply from 1 January 2015. However, Articles 20(5), 22(6), 35(1), 37(1) and 39 shall apply from the date of entry into force of this Regulation." However, Articles 18(2), 20(5), 22(6), 28a(1), 35(1), 37(1) and 39 shall apply from the date of entry into force of this Regulation. Articles 29, 30, 31, 32 and 33 shall only apply from 1 January 2016." PR\938454.doc 21/33 PE513.119v01-00

The greening of direct payments should come into force in 2016 in order to give rural development programmes a head start. In view of the reorientation of the CAP, Member States need sufficient time to ensure a smooth transition in order to prevent any possible duplication of funding through greening, to ensure eligibility of landscape features etc. and to adopt new countryside programmes. It is therefore important to ensure that greening is implemented simultaneously and equally in all Member States. 24 Article 7 point -1a (new) Regulation (EU) No [...] [HZ] Article 114a The following Article 114a is inserted: "Article 114a Derogation from Regulation (EU) No 966/2012 By way of derogation from Article 59(5) of Regulation (EU) No 966/2012 and Article 9(1) of this Regulation, the certification body s opinion for the year 2014 does not need to confirm the legality and regularity of the underlying transactions." The implementing rules and guidelines required by the Financial Regulation for the purposes of examining legality and regularity will be available by the beginning of 2014 at the earliest. Implementation is therefore already impossible in claim year 2013 (EU budget year 2014). 25 Article 7 Regulation (EU) No [...] [HZ] Article 115 PE513.119v01-00 22/33 PR\938454.doc

Article 115 Article 115 Entry into force and applicability This Regulation shall enter into force on the seventh day following that of its publication in the Official Journal of the European Union. It shall apply from 1 January 2014, except as follows: (a) Articles 7, 8 and 9 shall apply from 16 October 2013; (b) Articles 18, 42, 43 and 45 shall apply from 16 October 2013 as regards expenditure incurred from 16 October 2013; (c) Title III, Chapter II of Title V and Title VI shall apply from 1 January 2015. Entry into force and applicability This Regulation shall enter into force on the seventh day following that of its publication in the Official Journal of the European Union. It shall apply from 1 January 2014. (a) Articles 7, 8, 16, 24a and 25 shall apply from 16 October 2013; (b) Articles 9, 18, 42 and 45 for expenditure incurred from 16 October 2013 without prejudice to Article 114a; (c) Article 54, Title III, Chapter II of Title V and Title VI from 1 January 2015. (d) Title VII, Chapter IV for expenditure incurred from budget year 2014 onwards." Investment measures with the aim of modernising agricultural holdings should also be eligible for funding during the transition period. A continuous transition is required in order to support the countryside. 26 Article 9 Regulation (EU) No [...] [RD] Article 64 paragraph 4 (4) The Commission shall, by means of an implementing act, make an annual breakdown by Member State of the (4) The annual breakdown by Member State of the amounts referred to in paragraph 1, after deduction of the amount PR\938454.doc 23/33 PE513.119v01-00

amounts referred to in paragraph 1, after deduction of the amount referred to in paragraph 2 and taking into account the transfers of funds referred to in Article 136a(2) of Council Regulation (EC) No 73/2009*. In making the annual breakdown the Commission shall take into account: a) objective criteria linked to the objectives referred to in Article 4; and b) past performance. referred to in paragraph 2 shall be taken from Annex Ia. direct payments (Decision of 13 March 2013). 27 Article 9 Regulation (EU) No [...] [RD] Article 64 paragraph 5 (5) In addition to the amounts referred to in paragraph 4, the implementing act referred to in that paragraph shall also include the funds transferred to the EAFRD in application of Article 136a(1) of Regulation (EC) No 73/2009 and Article 7(2) of Regulation (EU) No [DP] and the funds transferred to the EAFRD in application of Articles 10b and 136 of Regulation (EC) No 73/2009 in respect of calendar year 2013. (5) In accordance with Article 90, the Commission shall be empowered to adopt delegated acts for the purposes of amending Annex Ia where necessary, to also include the funds transferred to the EAFRD in application of Article 136a(1) of Regulation (EC) No 73/2009 and Articles 7(2) and 14 of Regulation (EU) No [DP] and the funds transferred to the EAFRD in application of Articles 10b and 136 of Regulation (EC) No 73/2009 in respect of calendar year 2013. PE513.119v01-00 24/33 PR\938454.doc

direct payments (Decision of 13 March 2013). 28 Article 9 point 1a (new) Regulation (EC) No [...] [RD] Annex 1a (new) The following Annex Ia shall be inserted into Regulation (EU) No [ ] [RD] ANNEX Ia National envelopes referred to in Article 64 (in EUR million) 2014 2015 2016 2017 2018 2019 2020 Belgium 73.838 73.838 73.838 73.838 73.838 73.838 73.838 Bulgaria 400.215 400.215 400.215 400.215 400.215 400.215 400.215 Czech Republic 432.820 432.820 432.820 432.820 432.820 432.820 432.820 Denmark 87.536 87.536 87.536 87.536 87.536 87.536 87.536 Germany 1 355.922 1 355.922 1 355.922 1 355.922 1 355.922 1 355.922 1 355.922 Estonia 109.623 109.623 109.623 109.623 109.623 109.623 109.623 Ireland 377.842 377.842 377.842 377.842 377.842 377.842 377.842 Greece 595.667 595.667 595.667 595.667 595.667 595.667 595.667 Spain 1 219.781 1 219.781 1 219.781 1 219.781 1 219.781 1 219.781 1 219.781 France 1 148.806 1 148.806 1 148.806 1 148.806 1 148.806 1 148.806 1 148.806 PR\938454.doc 25/33 PE513.119v01-00

Italy 1 361.055 1 361.055 1 361.055 1 361.055 1 361.055 1 361.055 1 361.055 Cyprus 24.926 24.926 24.926 24.926 24.926 24.926 24.926 Latvia 159.703 159.703 159.703 159.703 159.703 159.703 159.703 Lithuania 267.461 267.461 267.461 267.461 267.461 267.461 267.461 Luxembourg 14.383 14.383 14.383 14.383 14.383 14.383 14.383 Hungary 584.679 584.679 584.679 584.679 584.679 584.679 584.679 Malta 11.762 11.762 11.762 11.762 11.762 11.762 11.762 Netherlands 89.850 89.850 89.850 89.850 89.850 89.850 89.850 Austria 609.744 609.744 609.744 609.744 609.744 609.744 609.744 Poland 2 029.504 2 029.504 2 029.504 2 029.504 2 029.504 2 029.504 2 029.504 Portugal 614.811 614.811 614.811 614.811 614.811 614.811 614.811 Romania 1 435.645 1 435.645 1 435.645 1 435.645 1 435.645 1 435.645 1 435.645 Slovenia 138.743 138.743 138.743 138.743 138.743 138.743 138.743 Slovakia 302.467 302.467 302.467 302.467 302.467 302.467 302.467 Finland 326.416 326.416 326.416 326.416 326.416 326.416 326.416 Sweden 291.736 291.736 291.736 291.736 291.736 291.736 291.736 United Kingdom 362.465 362.465 362.465 362.465 362.465 362.465 362.465 PE513.119v01-00 26/33 PR\938454.doc

direct payments (Decision of 13 March 2013). 29 Annex I Title Correspondence of Articles in animal and area related measures under the 2007-2013 and the 2014-2020 programming periods Correspondence of Articles in measures under the 2007-2013 and the 2014-2020 programming periods The correlation table should also contain intervention measures. 30 Annex I rows -1 (new) to -1c l(new) Regulation (EC) No 1698/2005 Article 20(b)(i) Modernisation of agricultural holdings Article 20(b)(iii) Increasing the added value of agricultural and forestry products Article 20(b)(iv) Cooperation as regards the development of new products, processes and technologies in agriculture, forestry and the food industry Article 20(b)(v) Improving and Regulation (EU) No [ ] [RD] Article 18 Investments in physical assets Article 18 Investments in physical assets and Article 27 Investments in new forestry methods and in the processing and marketing of forestry products Article 36 Cooperation Article 18 Investments in physical assets PR\938454.doc 27/33 PE513.119v01-00

developing infrastructure related to the development and adaptation of agriculture and forestry and Article 27 Investments in new forestry methods and in the processing and marketing of forestry products 31 Annex II introductory part Regulation (EC) No 73/2009 Annex II III VIII Annexes II, III and VIII to Regulation (EC) No 73/2009 are amended as follows: Annexes II, III and VIII to Regulation (EC) No 73/2009 are amended as follows and new Annexes VIIIa and XIIa are inserted: 32 Annex II point 2 point a 2. Annex III is amended as follows: a) The entry for "Protection and management of water" is replaced by the following: "Protection and management of water: - Establishment of buffer strips along water courses (1) - Where use of water for irrigation is subject to authorisation, compliance with authorisation procedures Protect water against pollution and run-off, The measures laid down in the Appendix and manage the use of water ( 1 ) Note: The GAEC buffer strips must respect, both within and outside vulnerable zones designated pursuant to Article 3(2) of Directive 91/676/EEC, at least the requirements relating to the conditions for land application of fertiliser near water courses, referred to in point A.4 of Annex II to Directive 91/676/EEC to be applied in accordance with the action programmes of Member States established under Article 5(4) of Directive 91/676/EEC." PE513.119v01-00 28/33 PR\938454.doc

2. Annex III is amended as follows: a) The entry for "Protection and management of water" is replaced by the following: "Protection and management of water: - Establishment of buffer strips along water courses (1) - Where use of water for irrigation is subject to authorisation, compliance with authorisation procedures Protect groundwater against pollution The measures laid down in the Appendix, where these are often used in agricultural practices (2) ( 1 ) Note: The GAEC buffer strips must respect, both within and outside vulnerable zones designated pursuant to Article 3(2) of Directive 91/676/EEC, at least the requirements relating to the conditions for land application of fertiliser near water courses, referred to in point A.4 of Annex II to Directive 91/676/EEC to be applied in accordance with the action programmes of Member States established under Article 5(4) of Directive 91/676/EEC." (2) The GAEC Standard does not apply where fertiliser and plant protection products are used in line with the codes of good agricultural practice. The wording of the GAEC Standard on groundwater protection is very broad in the Commission proposal and could lead to disproportionate restrictions on agricultural practices which comply with the rules. It is important, therefore, to make very clear that - the standard relates to groundwater protection (and not surface water), - it is only necessary to define measures which are relevant to traditional farming methods, and - fertilisers and plant protection products may still be applied, provided this is done in accordance with the rules. 33 Annex II point 3a (new) Regulation (EC) No 73/2009 Annex VIIIa (new) (4) The following Annex VIIIa is inserted after Annex VIII: Annex VIIIa (in EUR 1 000) PR\938454.doc 29/33 PE513.119v01-00

Member State Germany Sweden 2014 42 600 9 000 Inclusion of a provision allowing Member States to continue to transfer unspent resources from the first pillar to the second in 2014. 34 Annex II point 3b (new) Regulation (EC) No 73/2009 Annex XIIa (new) The following Annex XIIa is inserted after Annex XII: Annex XIIa Average size of agricultural holding for the purposes of Article 72a Belgium Bulgaria Czech Republic Denmark Germany Estonia Ireland Greece Spain France Croatia Italy Cyprus Latvia Lithuania Luxembourg Hungary Member State 29 6 89 60 46 39 32 5 24 52 5.9 8 4 16 12 57 7 Average size of agricultural holding (in hectares) PE513.119v01-00 30/33 PR\938454.doc

Malta Netherlands Austria Poland Portugal Romania Slovenia Slovakia Finland Sweden United Kingdom 1 25 19 6 13 3 6 28 34 43 54 PR\938454.doc 31/33 PE513.119v01-00

EXPLANATORY STATEMT The European Parliament, together with the other EU institutions, endeavours to make possible the entry into force of the reformed CAP on 1 January 2014. In order for this to be possible, however, an agreement between the institutions must be reached on the Multiannual Financial Framework 2014-2020 and the reform of the Common Agricultural Policy (CAP) by autumn 2013 to enable the legal bases of the reformed CAP to enter into force on 1 January 2014. It appears improbable, however, that all aspects of the reformed CAP will be able to be implemented by 1 January 2014. Transitional rules are therefore needed to define technical arrangements which will permit a smooth transition to the new regime, while at the same time ensuring continuity of the different forms of support under the CAP. As regards direct payments, sufficient time must be available to allow Member States, paying agencies and farmers to be well prepared and to learn about the new rules sufficiently in advance of their application. The main aspects of the current rules will therefore be extended to claim year 2014 and/or adjusted by means of transitional provisions. Subject to consent to the MFF by the European Parliament, the transitional provisions will incorporate the procedure on external convergence and flexibility between the two pillars of the CAP. The introduction of transitional measures means that some of the dates included in the Commission proposal on direct support beyond 2013 will have to be adapted accordingly in order to ensure consistency with this proposal for a Regulation. As regards rural development, it is common practice to establish transitional rules for the transition period between the two programming periods but also to determine how current measures can be continued, with funding from the new financial envelope. A bridge between the two consecutive programming periods must be established. Given that the countryside is currently facing new challenges, some specific transitional arrangements are required, notably to deal with the implications of the delay to the new direct payment regime for certain rural development measures, especially as regards the baseline for agri-environment and climate measures and the application of the rules on cross compliance. Transitional arrangements are also needed to ensure that Member States can continue to undertake new commitments in 2014 even if the resources for the current period have been exhausted. These new commitments and corresponding ongoing commitments can receive support from the new financial envelopes of the next programming period's rural development programmes. These transitional provisions include a flexibility mechanism, under which Member States can transfer funds from one CAP pillar to the other. It is proposed to limit the amount of funds transferred to 15 % for transfers from the first to the second pillar, and to 10 % for transfers from the second to the first pillar. The latter should, however, only be available to those Member States whose average direct payments amount to less than 90 % of the EU average. In order not to anticipate a final decision taken on this specific element, the parts of the article included in the transitional measures that differ from Article 14 of the Commission proposal on direct payments beyond 2013 have been placed between square brackets. In the light of the above, specific transitional rules need to be adopted by the European PE513.119v01-00 32/33 PR\938454.doc

Parliament and the Council before the end of the year and, where necessary, amendments to the basic acts of the CAP currently in force need to be made. PR\938454.doc 33/33 PE513.119v01-00