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Enlargement and agriculture: Summit adopts fair and tailor-made package which benefits farmers in accession countries

European Commission - IP/02/1882   16/12/2002

Other available languages: FR DE DA ES NL IT SV PT FI EL

IP/02/1882

Brussels/Copenhagen 13 December 2002

Enlargement and agriculture: Summit adopts fair and tailor-made package which benefits farmers in accession countries

Heads of State and Government from the EU and ten candidate countries reached agreement on a formula for enlarging the EU to encompass ten new member states as from 2004. Following the decision of the Copenhagen Summit, Cyprus, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, the Slovak Republic and Slovenia can join the EU on 1 May 2004. The following was agreed. The new member states will receive a rural development package which is specifically adapted to their requirements and has more favourable conditions than those applied to the present EU member states. The amount available for the ten candidate countries is fixed at € 5.1 billion for 2004-2006. Direct aids for the new member states will be phased in over ten years. They will thus receive 25% of the full EU rate in 2004, rising to 30% in 2005 and 35% in 2006. This level can be topped up by 30% up to 55% in 2004, 60% in 2005 and 65% in 2006. Until 2006 the top-up payments can be co-financed up to 40% from their rural development funds, From 2007, the new member states may continue top-up EU direct payments by up to 30% above the applicable phasing-in level in the relevant year, but financed entirely by national funds. Special provisions have been agreed for Cyprus and Slovenia, to take account of their internal support systems prior to accession. The farmers from the new member states will have full and immediate access to Common Agricultural Policy (CAP) market measures, such as export refunds, and cereal, skimmed milk powder or butter intervention, which will contribute to stabilising their prices and incomes.

Welcoming the Summit decisions, Franz Fischler, EU Commissioner for Agriculture, Rural Development and Fisheries commented "This a great day for Europe - for the EU, for the candidate countries and for their farmers. The leaders of the candidate countries can return home with their heads held high. They have achieved a farm package which is perfectly saleable to their farm community. The deal is fair, far-sighted and tailor-made for the needs of the farm sectors of the ten new member states. EU membership will make the farm sector of each new member state better off. Producers and processors will have access to a huge, enlarged internal market of 500 million consumers. Under the CAP, farmers will receive more stable prices. This will lead to a greater stability of farm incomes. Furthermore farmers and the rural sector will benefit from increased rural development support which will help them to restructure and modernise. Accession will give the new Member States a seat at the table where many decisions concerning Europe are taken. By joining the European Union their countries will have the right to participate in the decisions concerning how Europe is run. "

The Copenhagen decisions in detail

    An enhanced rural development policy to incite change

In order to tackle structural problems in the rural areas of the new member states, the Summit agreed an enhanced rural development strategy worth € 5.1 billion for the years 2004-06, broadened in scope and in comparison to the funds available for the existing EU countries financially more important. From Day 1 upon accession, a wide range of rural development measures will be co-financed at a maximum rate of 80% by the EU.

Rural development measures eligible (max. 80% EU financed)

  • early retirement of farmers

  • support for less favoured areas or areas with environmental restrictions

  • agri-environmental programmes

  • afforestation of agricultural land

  • specific measures for semi-subsistence farms

  • setting up of producer groups

  • technical assistance

  • special aid to meet EU standards

Additional rural development measures will be financed from the Structural Funds (EAGGF Guidance sector).

    A special measure to make semi-subsistence farms viable

In the candidate countries many "semi-subsistence farms" exist, which produce for own consumption, but market part of their production. To help to turn them into commercially viable units and to contribute additional income support while the farm is upgrading, a specific measure is offered.

    A gradual increase of direct payments

Given that immediate introduction of 100% direct payments would serve to freeze existing structures and to hamper modernisation, the EU leaders agreed to focus on rural development measures and on gradual introduction of direct payments over a transition period of ten years. The starting level for 2004 is set at a rate equivalent to 25% of the present EU system, rising to 30% in 2005 and 35% in 2006. In a second step after 2006, direct payments would be increased by percentage steps in such a way as to ensure that the new Member States in 2013 reach the CAP support level then applicable. This money can be topped up with rural development money or national funds (see below).

    The possibility to top up direct payments

The new member states are offered the possibility to complement direct aid paid to a farmer under any CAP scheme - subject to authorisation by the Commission:

    By 30%, financed by the candidate countries rural development funds and national funds up to 55% in 2004, 60% in 2005 and 65% in 2006. From 2007 the new member states may continue to top-up EU direct payments by up to 30% above the applicable phasing-in level in the relevant year, but in this case the financing will be entirely from national funds,

or

    Up to the total level of direct support the farmer would have been entitled to receive, on a product by product basis, in the candidate country prior to accession (2003) under a like national scheme increased by 10% and with special provisions for Cyprus and Slovenia.

However, the total direct support the farmer can be granted after accession under the relevant EU scheme including all complementary national direct payments should in no case exceed the level of direct support he would be entitled to receive under that scheme in the existing EU.

    Simplified implementation of direct payments

Under the simplified system, the new Member States should have the option to grant direct payments during a limited period in the form of a de-coupled area payment applied to the whole agricultural area. On the basis of its total envelope of direct aids and its utilised agricultural area, an average area payment would be calculated for each country. All types of agricultural land are eligible for the payment. The approach is optional and transitional. The simplified scheme is available for three years, renewable twice by one year. Controls of payments will be effected by a simple physical control of land, through, in principle, the Integrated Administration and Control System (IACS). At the end of the transitional period, the new Member States will enter the regular system of direct income support in the form then applicable.

    Production quotas based on recent reference periods

The Council agreed on production quotas on the basis of the most recent historical reference periods for which data are available. In addition, specific problems, such as the Russian crisis or the future switch from on farm consumption to marketed milk have been taken into account.


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