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Single Common Market Organisation: 21 market organisations under one legislative roof

European Commission - MEMO/06/497   18/12/2006

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MEMO/06/497

Brussels, 18 December 2006

Single Common Market Organisation: 21 market organisations under one legislative roof

The European Commission today has proposed to the Council and the European Parliament to adopt one single Common Market Organisation for all agricultural products. This project, "the Single CMO" is another important step in the process of simplification, which is priority of the Commission.

This proposal is an essential component in the Commission’s plans to streamline and simplify the common agricultural policy (CAP). The key issues of the Commission’s approach have been set out in its 2005 Communication on "Simplification and Better Regulation for the Common Agricultural Policy" (COM(2005) 509 final). The main objective of the proposal is to revise the existing 21 basic regulations on sector-specific common market organisations (CMOs) and combine them into a comprehensive single regulation without changing the underlying policies. Having a single CMO will increase transparency of our legislative instruments and improve the quality of the legal texts. Furthermore, having a clear and transparent legal framework for the markets will allow the identification of further specific simplification possibilities.

The structure

The 2003 reform simplified the CAP's legislative environment by establishing a horizontal legal framework for all direct payments and amalgamating an array of support systems into a single payment scheme. It is envisaged to extend the horizontal approach to the 21 CMOs each of which is governed by a separate Council basic regulation, often accompanied by a set of further Council rules. Most basic regulations follow the same structure and have numerous provisions in common. However, due to their importance it seems appropriate to foresee a specific part for competition rules. Often they contain different solutions to identical or similar problems. In many cases it is possible to harmonise different approaches or to replace sectoral approaches by horizontal ones.

Accordingly the body of the proposed Regulation is subdivided as follows:

  • introductory provisions (scope, definitions, marketing years),
  • provisions concerning the internal market (e.g. public intervention, private storage, special intervention measures, quotas, aid schemes),
  • provisions concerning trade with third countries (e.g. licences, import duties, tariff quotas, special safeguard, export refunds, safeguard clause, inward- and outward processing),
  • competition and state aid rules,
  • general provisions (e.g. disturbance clause, communications, reporting, management committee),
  • transitional and final provisions (e.g. amendments, repeals, transitional clause, entry into force).

Ultimately the vast majority of the CAP will be governed by only four Council regulations:

  • the Council regulation on the common organisation of the markets,
  • Council Regulation (EC) No 1782/2003 on direct payments,
  • Council Regulation (EC) No 1698/2005 on rural development and
  • Council Regulation (EC) No 1290/2005 on the financing of the CAP.

Simplification but no change of the policy

The proposal is an important contribution to the process of legislative simplification. However, its contribution to simplifying the CAP should not be judged in an isolated manner but within the global context of the Commission’s efforts in this area. It clearly follows from the Communication that the Commission’s activities with regard to Better Regulation and simplification in the CAP comprise a whole variety of technical and policy related measures and initiatives of which the proposal is only one important component.

It will:

  • drastically reduce the number of legal acts and provisions governing the CAP,
  • harmonise and streamline the instruments and measures of the CAP,
  • increase the transparency of the CAP's legal framework and improve its accessibility for legal advisors, farmers' unions and coops, food industry, national administrations etc. The single CMO will save time and thus costs.

The single CMO will not put into question any policy decisions. Therefore, those provisions of the fruit & vegetables and the wine sectors which are currently being submitted to a policy review will not be included in the single CMO at this stage but will be incorporated once the policy decisions in these sectors have been taken. All horizontal issues (Committee procedure, communications, competition and state aid rules) of the single CMO already apply, however, to these "reform markets" from the beginning.

Furthermore, the project includes market measures for agricultural products which are currently not subject to a fully-fledged CMO, namely silk worms, ethyl alcohol and apiculture products without making these products subject to a fully fledged CMO.

A legislative project of this order of magnitude which consists of combining a significant number of separate legal acts into one comprehensive Regulation goes clearly beyond the level of a mere consolidation of existing legal texts. It inevitably requires re-arranging and re-wording many of the provisions concerned. This should not be seen, however, as an attempt to change the political decisions the Council has taken over the years in CAP matters and which are reflected in the current CMOs.

Support initiatives:

Simplification Conference, Action Plan, Expert Group, Study

On 3 and 4 October 2006 a Simplification Conference was held to discuss the simplification with the stakeholders and other European Institutions. The conference focussed on the relation between political decision making processes and simplification, on the measurement of the administrative burden and on the expectations on the different stakeholders concerning simplification.

Results of the conference:

  • increased awareness of simplification (general public, farming and trade sector, and national administrations),
  • active involvement of the NGOs (farming and other) via consultative committees,
  • concrete suggestions for technical simplification (co-regulation of certain standards and abolition of certain licences),
  • increased awareness of the importance of simplification for agriculture within the Commission.

In the context of this CAP simplification conference the DG AGRI Action plan was presented which currently contains 20 proposals for legislative change that will have an immediate impact for farmers, traders and national administrations. The proposals are based on suggestions from Member States experts the general public and from DG AGRI services.

The proposals by definition concern technical changes that may seem trivial but that have substantial effects for the persons concerned such as:

  • the removal of certain obligations for farmers (having a contract with a processor to become eligible for certain kinds of support)
  • to the setting up of electronic communication systems between the Member States and the Commission to transfer data on utilisation of quota, amount of direct payments, etc.
  • the harmonisation of the way we open tendering procedures for export refunds.

The current proposals are planned to be implemented before the end of 2007. The Action Plan is set up as a rolling Action Plan. Other proposals are being examined. A reinstalled Simplification Expert Group (4 meetings in 2006) discusses all suggestions. This approach has created a process that will continue to generate new simplification proposals.

Study to access the administrative burden on farms arising from the 2003 CAP reform.

In June DG AGRI has launched a call for tenders for a study to measure the administrative burdens for farmers resulting from the single payment scheme which was introduced by the 2003 reform. This should allow awarding the tender around the end of December. The results of the study should be available in mid 2007.

The study will cover France, Italy, Ireland, Denmark and Germany. This selection aims at covering the diversity of implementation of the single payment scheme.

The contractor will follow the EU methodology for assessing administrative costs as set out in COM (2005) 518 final.


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