Explanatory Memorandum to COM(2006)822 - Common organisation of agricultural markets and on specific provisions for certain agricultural products - Main contents
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| dossier | COM(2006)822 - Common organisation of agricultural markets and on specific provisions for certain agricultural products. |
|---|---|
| source | COM(2006)822  |
| date | 18-12-2006 |
- Grounds for and objectives of the proposal: A simpler legal framework for the CAP – one horizontal common market organisation instead of 21
The main objective of the proposed regulation is to revise the existing 21 regulations on sector-specific common market organisations (CMOs) and combine them into a comprehensive single regulation, with a view to streamlining and simplifying the legal framework without changing the underlying policies.
Thus, the proposal intends to provide a single set of harmonised rules in the classic areas of market policy such as intervention, private storage, import tariff quotas, export refunds, safeguard measures, state aid and competition rules, and the communication and reporting of data. The existing sector-specific rules on these matters have been rearranged by instrument or policy issue and merged, where possible, into horizontal provisions. As a synthesis of the current CMO provisions at Council level the proposed regulation should apply to all agricultural products that are currently covered by a CMO.
- General context
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' (referred to hereinafter as “the Communication”) i. In this document the Commission 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".
- Existing provisions in the area of the proposal
An essential part of the current CAP legal framework consists of the 21 CMOs that have been established since the introduction of the CAP (see Annex 1 to this document ). Each of these CMOs is governed by a separate basic Council regulation, often accompanied by a further set of subsidiary Council rules.
Most basic regulations follow the same structure and have numerous provisions in common. This is the case in particular as regards the rules on trade with third countries and general provisions but also to a certain extent for the rules related to the internal market. Moreover, the basic regulations often contain different solutions to identical or similar problems. On this last point, the Communication notes the 2003 reform of the CAP which “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.” In the Communication, the Commission declared its intention to extend the horizontal approach to the 21 CMOs and to examine in this context the extent to which harmonisation is possible and sectoral approaches can be replaced by horizontal ones.
- Consistency with other policies and objectives of the Union
This proposal, in the area of agriculture forms an integral part of the overall Commission approach to Better Regulation and simplification, as it is expressed in its Communication of 25 October 2005 on “ Implementing the Community Lisbon programme – A strategy for the simplification of the regulatory environment” i and endorsed in the Interinstitutional Agreement on better law-making of 16 December 2003 i.
- Consultation of interested parties
The Commission’s intention to draw up a proposal for a comprehensive CMO regulation was announced in its Communication of 19 October 2005. Following a discussion, the Council adopted in December 2005 conclusions which did not specifically address this issue. In the course of the preparatory work on the proposal both Member States and stakeholders were given the opportunity to express their views on the project. The consultation of Member States took place in a meeting of the Commission simplification experts group on 27 June 2006, that of the stakeholders in an ad-hoc meeting of the Agricultural Advisory Committee on 30 June 2006, in both cases on the basis of an information note summarising the broad lines of the envisaged proposal.
Member States representatives accepted in general that the approach could lead to simplifying the legislative framework of the CAP. However, they reserved the position of their governments until the presentation of a detailed legislative proposal.
The representatives of stakeholders were equally reluctant to comment on the approach in greater detail. A number of them showed openness to consider a proposal for a comprehensive CMO regulation provided that it would be restricted to a technical exercise without bringing about changes to the existing policies. Some concerns were voiced with regard to the creation of one management committee for all market sectors.
- Collection and use of expertise
There was no need for external expertise.
- Impact assessment
Not applicable. The proposal is not subject to impact assessment requirements as it is not included in the Commission Legislative and Work Programme.
- Legal basis
Articles 36 and 37 of the Treaty
- Content of the proposal
Simplification of the regulatory framework without changing the policy
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. Although there is no universal and agreed typology of simplification initiatives, the proposed Regulation is essentially an act of “technical simplification”, i.e. it implies, as it is expressed in the Communication, 'the revision of the legal framework, administrative procedures and management mechanisms to achieve streamlining and greater cost-effectiveness and attain existing policy objectives more effectively, without changing the underlying policies.' Accordingly, it is not proposed to repeal or change existing instruments unless they have become obsolete, redundant or should not by their very nature be dealt with at Council level. This also implies that in the framework of this proposal neither the current scope of the CMOs should be extended nor should new instruments or measures be introduced.
In line with these criteria, the proposed arrangements deviate on a limited number of points from those in current Regulations. This issue is in particular relevant to a number of provisions which currently empower the Council to adopt legal acts without consulting the Parliament (so-called “second generation” acts). In accordance with the institutional balance laid down in the third indent of Article 202 of the Treaty it is proposed to either adopt such acts in accordance with the procedure laid down in Article 37 of the Treaty, i.e. after consulting the Parliament, or to confer the relevant powers on the Commission.
However, since there is currently no need to change or repeal the relevant second generation Regulations in substance the proposal leaves them in place while explicitly setting out a Commission power to amend or repeal such acts by means of the management committee procedure once this becomes necessary. Furthermore, it should be noted that for certain issues which, due to their particularly technical character are not appropriate to be dealt with in a basic Council Regulation, it is proposed to transfer the relevant powers to the Commission.
The scope of the proposed Regulation reflects the step-by-step approach that has already been set out in the Communication. Accordingly, it is proposed for the new basic Regulation to apply from the very beginning to all agricultural products that are currently governed by a CMO. In addition, for the sake of completeness and consistency the new basic Regulation should also include certain other agricultural products such as silkworms, ethyl alcohol of agricultural origin and apiculture products which at present are not subject to a fully-fledged CMO but regulated by a set of specific agricultural rules, without however giving them full CMO-status. It should be noted, however, that due to its particular status as a product that is not covered by Annex I to the Treaty i, cotton is not included in this proposal.
As regards the sectors which are currently or will soon be subject to policy reviews (fresh and processed fruit and vegetables, wine), it appears appropriate to include only those provisions in the proposal which are or will not be affected by such reviews. This is the case in particular for horizontal or common rules such as the provisions on state aid and competition, comitology procedures, and Member States’ communications to the Commission. Accordingly each review will take place on the basis of a separate proposal. Once a review process is concluded the legal acts adopted in its framework will then in a second step have to be incorporated into the new basic Regulation. To that end the Commission will at due time submit appropriate proposals to the Council. Until such proposals are adopted, the existing regulations governing these rules will remain applicable in addition to the new basic Regulation.
In addition to the Council acts referred to under 1., it is proposed that the new basic Regulation also take on board further Council rules which do currently not formally form part of CMO Regulations even though they are applicable to the agricultural products covered by current CMOs and other Council acts. This category includes e.g. the rules on milk quotas, specific provisions on private storage and public intervention i and the provisions contained in Regulation No 1184/2006 i with regard to competition and state aid rules for the production of and trade in agricultural products. Annex 2 to this document contains a complete list of such legal acts.
The structure of the new CMO should mainly follow that used in most of the current basic Regulations. However, due to their importance it seems appropriate to foresee a specific part for competition rules. Accordingly the body of the proposed Regulation is subdivided as follows:
- introductory provisions (e.g. 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 rules (antitrust, state aids),
- general provisions (e.g. disturbance clause, communications, management committee),
- transitional and final provisions (e.g. amendments, repeals, transitional clause, entry into force).
In addition the proposed regulation contains a number of annexes which mainly reflect the annexes to current CMO regulations.
As foreseen in the existing CMOs the proposal requires the Commission in the vast majority of cases to exercise its decision making powers in accordance with the so-called management committee procedure. To avoid repeating in each and every case the necessary reference to the relevant comitology clause the proposal stipulates this requirement at horizontal level.
The new Regulation is proposed to enter into force on the seventh day following that of its publication in the Official Journal.
However, the dates for the application of provisions in the proposed Regulation should be fixed so as to ensure a smooth transition to the new legal framework. This implies that the new provisions should not become applicable in the course of marketing years on the one hand, and the Commission should be given the time needed for preparing and adopting the necessary implementing acts. On the assumption of a formal adoption of the proposed regulation by the Council in autumn 2007 its provisions should apply:
- in sectors for which marketing years are provided for, from the beginning of the relevant marketing years in 2008,
- in sectors for which no marketing year is provided for, from 1 January 2008.
In line with the current arrangements the provisions on sugar and milk quotas should apply no longer than the end of the 2014/2015 sugar marketing/milk quota year.
- Subsidiarity principle
The proposal pursues the objective to simplify the legislative framework of the CMOs without changing their underlying political orientations.
- Choice of instrument
Proposed instruments: regulation.
Other means would not be adequate as the proposal is aimed at establishing a horizontal CMO which is directly applicable in all Member States.
Contents
- Budgetary implications
- 2. Consultation of interested parties and impact assessment
- 3. Legal elements and main characteristics of the horizontal CMO
- Scope of the proposal
- Incorporated legal acts
- Structure
- Decision making by the Commission
- Entry into force and application
- 5. Simplification
- Repeal of existing legislation
- ANNEX 1
- 1. (EEC) No 234/ Live trees and other plants, bulbs, roots and the like, cut flowers and ornamental foliage
- 3. (EEC) No 2759/ Pigmeat
- 4. (EEC) No 2771/ Eggs
- 5. (EEC) No 2777/ Poultrymeat
- 6. (EEC) No 2075/ Raw tobacco
- 7. (EC) No 1254/ Beef and veal
- 8. (EC) No 1255/ Milk and milk products
- 9. (EC) No 1673/ Flax and hemp
- 10. (EC) No 2529/ Sheep and goat meat
- 11. (EC) No 1784/ Cereals
- 12. (EC) No 1785/ Rice
- 13. (EC) No 1786/ Dried fodder
- 14. (EC) No 865/ Olive Oil
- 15. (EC) No 1947/ Seeds
- 16. (EC) No 1952/ Hops
- 17. (EC) No 318/ Sugar
- 18. (EEC) No 404/ Bananas
- 21. (EC) No 1493/ Wine
- 74/583/EEC Council Decision of 20 November 1974 on the monitoring of sugar movements
- Poultry sector
Given that the proposal does not bring about changes to the existing CAP measures it has no budgetary implications.
The proposal is expected to lead to significant simplification of existing legislation. 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 farmers, economic operators and national administrations,
- reduce administrative costs.
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.
The proposal is therefore 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.
The adoption of the proposal will lead to the repeal of 35 Council Regulations.
COMMON MARKET ORGANISATIONS INCORPORATED IN THE PROPOSED HORIZONTAL CMO
Regulation Scope
1. (EEC) No 234/ Live trees and other plants, bulbs, roots and the like, cut flowers and ornamental foliage
2. (EEC) No 827/ 'Solde' (CMO for many products not covered by other CMOs)
19. (EC) No 2200/ Fresh fruit & vegetables
20. (EC) No 2201/ Processed fruit & vegetables
ANNEX 2
LEGAL ACTS INCORPORATED IN THE PROPOSED HORIZONTAL CMO OTHER THAN BASIC CMO REGULATIONS
NON-CMO products
Regulation Scope
(EEC) No 845/ Silk Worms
(EEC) No 707/ Silk Worm Producer Groups
(EC) No 670/ Ethyl alcohol of agricultural origin
(EC) No 797/ Apiculture products
Horizontal provisions
Regulation Scope
(EC) No 1184/ Council Regulation applying certain rules of competition to the production of, and trade in, agricultural products (= ex Regulation No 26)
(EEC) No 1055/ Council Regulation on the storage and movement of products bought in by an intervention agency
(EEC) No 2931/ Council Regulation on the granting of assistance for the exportation of agricultural products which may benefit from a special import treatment in a third country
(EEC) No 386/ Council Regulation on the monitoring carried out at the time of export of agricultural products receiving refunds or other amounts
Sugar sector
Decision Scope
Fruit and vegetables sector
Regulation Scope
(EEC) No 2517/ Council Regulation laying down certain measures for reorganising Community fruit production
Pigmeat sector
Regulation Scope
(EEC) No 2763/ Council Regulation laying down general rules for granting private storage aid for pigmeat
Milk sector
Regulation Scope
(EEC) No 1898/ Council Regulation on the protection of designations used in marketing of milk and milk products
(EEC) No 2204/ Council Regulation laying down additional general rules on the common organisation of the market in milk and milk products as regards cheese (systems of prior authorisation and administrative control)
(EC) No 2991/ Council Regulation laying down standards for spreadable fats
(EC) No 2597/ Council Regulation laying down additional rules on the common organisation of the market in milk and milk products for drinking milk
(EC) No 2250/ Council Regulation concerning the tariff quota for butter of New Zealand origin
(EC) No 1788/ Council Regulation establishing a levy in the milk and milk products sector
Egg sectors
Regulation Scope
(EC) No 1028/ Council Regulation on marketing standards for eggs (= ex Regulation No 1907/90)
Regulation Scope
(EEC) No 1906/ Council Regulation on certain marketing standards for poultry meat
Floriculture sector
Regulation Scope
(EEC) No 4088/ Council Regulation fixing conditions for the application of preferential customs duties on imports of certain flowers originating in Cyprus, Israel and Jordan
Tobacco sector
Regulation Scope
(EEC) No 2077/ Council Regulation concerning inter-branch organisations and agreements in the tobacco sector
Carcase classification
Regulation Scope
(EEC) No 1358/ Council Regulation fixing the guide price and the intervention price for adult bovine animals for the 1980/81 marketing year and introducing a Community grading scale for carcases of adult bovine animals
(EC) No 1183/ Council Regulation concerning the Community scale for the classification of carcases of adult bovine animals (= ex. Regulation No 208/81)
(EEC) No 3220/ Council Regulation determining the Community scale for grading pig carcases
(EEC) No 1186/ Council Regulation extending the scope of the Community scale for the classification of carcases of adult bovine animals
(EEC) No 2137/ Council Regulation concerning the Community scale for the classification of carcases of ovine animals and determining the Community standard quality of fresh or chilled sheep carcases and extending Regulation (EEC) No 338/