2014 as regards specific measures to mitigate the impact of the COVID-19 outbreak in the fishery and aquaculture sector - Main contents

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dossier	COM(2020)142 - Amending Regulations 1379/2013 and 508/2014 as regards specific measures to mitigate the impact of the COVID-19 outbreak in ...
source	COM(2020)142
date	02-04-2020

1. CONTEXT OF THE PROPOSAL

The COVID-19 outbreak has affected the Member States in a sudden and dramatic manner, with a major impact on their societies and economies, as economic activity decelerates sharply. This has created an exceptional situation for the whole EU that necessitates that all available resources, at Union and Member State level, are mobilised to overcome the unprecedented challenges related to the COVID-19 outbreak.

On 13 March 2020, the Commission proposed a “Coronavirus Response Investment Initiative” directed at promoting investments by mobilising available cash reserves in the European Structural and Investments Funds, to fight the crisis immediately. On 19 March 2020, the Commission adopted a new State Aid Framework.

However, Member States’ scope for intervention in the area of fisheries is restricted by the provisions of the European Maritime and Fisheries Fund (EMFF), which does not presently offer support for the most urgently needed actions to overcome the effects of the COVID-19 outbreak. Those limitations restrict Member States’ ability to use the EMFF to fight the crisis.

The fishery and aquaculture sector has been particularly hard hit by the market disruption generated by a significant drop in demand. The closure of sales venues, markets, outlets and distribution channels has seen prices and volumes drop substantially. The drop in demand and prices combined with the vulnerability and complexity of the supply chain (perishable products, important need of workforce) made the operations of fishing fleets and seafood production loss-making. Consequently, fishers are forced to stay in port and aquaculture producers will have to discard or destroy products within weeks or face exceptional stock management costs, including more space and feed for grown out fish that cannot be slaughtered due to drop in demand. The rapid decline particularly affects small-scale coastal fishing operators and fish producers.

Because the end of the current crisis cannot be predicted, it can rapidly lead to a cessation of activities and of businesses in a sector that is very sensitive to cyclical variations. This crisis can consequently have dramatic socio-economic consequences in certain communities where fishing and aquaculture play a key role. Small-scale coastal fisheries represent close to 75% of all active vessels and over 55% of direct employment; they constitute the main economic activity in many coastal areas. The fish farming sector sustains coastal communities and rural areas. Fishing and aquaculture operators, being mostly micro-enterprises, often lack the financial reserves to cover on-going costs. Once their operation ceases, marketing chains will be interrupted.

Unlike most other sectors of the economy, fisheries are subject to the Union’s exclusive competence and are regulated at Union level through a common policy, thereby largely excluding national regulations, including those in respect of financial support. The conditions for public support are governed by the EMFF.

The Commission is therefore adopting a legislative proposal to amend Regulation (EU) No 508/2014 (the EMFF Regulation), as well as Regulation (EU) No 1379/2013 (the CMO Regulation) to introduce specific measures in the EMFF to mitigate the impact of the COVID-19 outbreak in the fishery and aquaculture sector.

2. LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY

• Legal basis

Articles 43(2) and 175 of the Treaty on the Functioning of the European Union.

• Subsidiarity (for non-exclusive competence)

Provisions of the proposal are implemented within the framework of shared management, in accordance with the Financial Regulation.

• Proportionality

The proposed provisions comply with the proportionality principle as they are appropriate, necessary and no other less restrictive measures are available to obtain the desired policy objectives.

• Choice of the instrument

Proposed instrument: Regulation of the European Parliament and of the Council.

3. CONTENT OF THE PROPOSAL

The proposed specific measures to mitigate the impact of the COVID-19 outbreak in the fishery and aquaculture sector comprise:

–support to fishermen for the temporary cessation of fishing activities caused by the COVID-19 outbreak,

–support to aquaculture farmers for the temporary suspension or the reduction of production caused by the COVID-19 outbreak,

–support to producer organisations and associations of producer organisations for the storage of fishery and aquaculture products, in accordance with the Common Market Organisation.

It is proposed that these measures are retroactively eligible as of 1 February 2020 and available until 31 December 2020.

Additional amendments to the EMFF Regulation aim to ensure a flexible reallocation of financial resources within the operational programmes:

–a deletion of the ring-fenced amounts in Article 13, with the exception of those for fisheries control, collection of scientific data and compensation of additional costs in the outermost regions,

–a modification of the simplified procedure for amending operational programmes, in view of the introduction of the specific measures and the reallocation of financial resources thereto.

The specific EMFF measures are complemented by an amendment to the CMO Regulation to:

–enable resort to the storage mechanism if Member States have not set and published trigger prices,

–allow aquaculture producer organisations to benefit from the storage mechanism.

4. RESULTS OF EX-POST EVALUATIONS, STAKEHOLDER CONSULTATIONS AND IMPACT ASSESSMENTS

The Commission consulted with stakeholders by seeking the input of fisheries and aquaculture producer organisations, Advisory Councils, and receiving feedback about market developments and possible relief measures from industry associations, individual operators and Member States. The stakeholders’ assessment of the crisis situation and of how to fight its effects is almost entirely coherent and unanimous. The Commission took that feedback into account in preparing this proposal.

5. BUDGETARY IMPLICATIONS

The proposed modification does not imply any changes in the Multiannual Financial Framework annual ceilings for commitments and payments as per Annex I of Regulation (EU) No 1311/2013. The annual breakdown of commitment appropriations for the EMFF remains unchanged.

With fishing and aquaculture activities locked down or significantly reduced, there is little room for implementing the current EMFF measures and operational programmes normally. Without an effective counter to the crisis, the EMFF stands little chance of being fully implemented by the end of the current programming period. Member States should therefore have the possibility to reallocate at short notice existing financial resources within their operational programme to the specific measures. That possibility will be limited by the budget allocations that Member States have already received, which they cannot exceed.

The available payment appropriations in the 2020 budget for the EMFF can accommodate a shift between Union Priorities within operational programmes. The new measures will in fact to a large extent replace initially planned initiatives, which are now being stopped due to the general decline of economic activity. By consequence, the proposed measures aim to ensure an effective implementation of the 2020 budget and the 2014-2020 allocation for the EMFF.

The Commission will carefully monitor the impact of the proposed modification on payment appropriations in 2020 taking into account both the implementation of the budget and revised Member States forecasts.