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Brussels, 18 December 2006

Simplifying the Common Agricultural Policy: Commission proposes to replace 21 Common Market Organisations with a single CMO

The European Commission today proposed to establish a single Common Market Organisation for all agricultural products, to replace the existing 21 CMOs. The move is a major step in the ongoing process of streamlining and simplifying the Common Agricultural Policy for the benefit of farmers, administrations and companies handling agricultural products. The creation of a single CMO will slim down legislation in the farming sector, improve its transparency and make the policy more easily accessible. It is an example of applied better regulation and therefore forms an integral part of the Lisbon strategy. Today's proposal is the most significant technical simplification of the CAP yet undertaken. However, it should not be interpreted as a way to reform the policy by the back door. Potential further simplification of a political nature will be examined in the 'Health Check' of the CAP reforms, due to take place in 2008. The proposed single CMO will allow the repeal of more than 40 Council acts and will replace more than 600 legal articles in the current regulations with less than 200. The proposal will now be sent to the Council and Parliament. The Commission hopes it will enter into force in 2008.

"The CAP is undeniably complex, but that must not stop us from doing all we can to make things simpler," said Mariann Fischer Boel, Commissioner for Agriculture and Rural Development. "The reforms which began in 2003 started the process of simplification. Today's proposal will build on this, making the policy more transparent, more understandable and less burdensome to implement. Less red tape will make life easier for farmers and administrators, and should reduce costs for the food industry." Vice President Günter Verheugen, responsible for enterprise and industry policy, said: "I am delighted with this important step forward. Simplification of the CAP is a key element of the Better Regulation and Simplification Agenda of the European Commission. If we are successful in reducing red tape in the agricultural domain, we will send a clear signal to citizens in rural areas that the Commission is serious about reducing the unnecessary burden of bureaucracy. The CAP simplification also fits into the overall European Commission emphasis on boosting the competitiveness of the European economy in the context of the re-invigorated Growth and Jobs Strategy.''

The CAP addresses complex economic and political issues and must guarantee that taxpayers' money is carefully spent. As such, a certain degree of complexity is unavoidable. However, there is still much scope for simplification. The single CMO follows up the Commission's 2005 Communication on simplifying the CAP, which underlined that "reducing red tape in the farm sector by making rules more transparent, easier to understand and less burdensome will reduce costs for businesses and ensure that European citizens receive value for money".

To achieve these goals, the single CMO combines and harmonises as far as possible the Council acts in the classic areas of market policy into one single Regulation. This covers the rules on intervention, private storage, marketing and quality standards, import and export rules, safeguard measures, competition, state aid and the communication and reporting of data.

This type of technical simplification is not a way to introduce reforms through the back door. Policy changes are happening in parallel, for example in the ongoing discussions on reforming the CMOs for bananas, fruit and vegetables and wine. These changes will be incorporated into the single CMO once the Council has reached final agreement on these three reforms.

The proposal foresees a single Regulation with 198 articles, in place of 41 Council acts with a total of more than 600 articles. Eventually, the whole CAP will be covered by just four main Council acts: those on the single CMO, the direct aid regime, rural development and the financing of the CAP. Economic operators will find it easier to find the legal text they need. Most of the current CMOs are old and have been amended very often. The single CMO will be of better quality.

The CMO can also serve as the basis for future political simplification. With improved transparency and better accessibility, a better view will be achieved of sector specific exceptions, allowing a judgment on whether these are necessary and justified. The upcoming 'Health Check' of the 2003 reforms will provide an occasion to study potential policy changes which could help further the simplification drive.

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