Regulation 2017/2393 - Amendment of Regulations (EU) No 1305/2013 on support for rural development by the European Agricultural Fund for Rural Development (EAFRD), (EU) No 1306/2013 on the financing, management and monitoring of the common agricultural policy, (EU) No 1307/2013 establishing rules for direct payments to farmers under support schemes within the framework of the common agricultural policy, (EU) No 1308/2013 establishing a common organisation of the markets in agricultural products and (EU) No 652/2014 laying down provisions for the management of expenditure relating to the food chain, animal health and animal welfare, and relating to plant health and plant reproductive material - Main contents

EN

Official Journal of the European Union

L 350/15

In order to ensure legal certainty and harmonised and non-discriminatory implementation of support to young farmers, it is necessary to provide that in the context of rural development the ‘date of setting up’, referred to in Regulation (EU) No 1305/2013 of the European Parliament and of the Council (5) and in other relevant rules, means the date when the applicant performs or completes an action related to the setting up for the first time and that the application for support is to be submitted at the latest 24 months after that date. Moreover, experience from the negotiations of the programmes has shown that the rules for the joint setting up of young farmers and the thresholds for access to support required under Article 19(4) of Regulation (EU) No 1305/2013 should be clarified, and that the provisions on the duration of the business plan should be streamlined.

In order to facilitate implementation of advisory and training services by Member States' Managing Authorities, the status of beneficiary under that measure should be extended to those authorities, while at the same time ensuring that the provider of the service is chosen by a body functionally independent from those authorities and that checks are carried out at the level of the provider of advice or training.

With a view to incentivising participation in quality schemes, farmers or groups of farmers taking part in such schemes in the five years preceding the application for support should be eligible for a maximum duration of five years, while duly taking into account the time of the initial participation in the scheme.

In order to be sufficiently attractive to the private sector, it is essential that financial instruments are designed and implemented in a flexible and transparent manner. However, experience has shown that certain measure-specific eligibility rules limit the uptake of financial instruments in the rural development programmes, as well as the flexible use of financial instruments by fund managers. Therefore, it is appropriate to provide that certain measure-specific eligibility rules do not apply to financial instruments. For the same reason, it is also appropriate to provide that start-up aid to young farmers under Article 19 of Regulation (EU) No 1305/2013 may also be provided in the form of financial instruments. In view of those changes, it should be provided that, where support for investments under Article 17 of Regulation (EU) No 1305/2013 is granted in the form of financial instruments, the investment must contribute to one or more Union priorities for rural development.

In order to reduce administrative burden in relation to the implementation of the principle of no double funding in relation to greening, Member States should be given the possibility of applying a fixed, average deduction to all beneficiaries concerned carrying out the type of operation or sub-measure concerned.

Nowadays farmers are exposed to increasing economic risks as a consequence of market developments. However, those economic risks do not affect all agricultural sectors equally. Consequently, Member States should have the possibility, in duly justified cases, to help farmers by means of a sector-specific income stabilisation tool, in particular for sectors affected by a severe income drop, which would have a significant economic impact for a specific rural area, provided that the drop in income exceeds a threshold of at least 20 %. In order to ensure that the sector-specific income stabilisation tool is effective and adapted to Member States' specific circumstances, it should be possible for them to define, in their rural development programmes, the income to be taken into account for the activation of the tool, in a flexible manner. At the same time, and in order to promote the use of insurance by farmers, the threshold for the drop in production applicable for insurance should be reduced to 20 %. In addition, in order to monitor the expenditure made under the sector-specific income stabilisation tool and insurance, the content of the financial plan of the programme should be adapted.

The specific reporting requirement for the risk management measure in 2018 referred to in Article 36(5) of Regulation (EU) No 1305/2013 is already covered by the report to the European Parliament and the Council on the monitoring and evaluation of the common agricultural policy (CAP) referred to in Article 110(5) of Regulation (EU) No 1306/2013 of the European Parliament and of the Council (6). Therefore, the second subparagraph of Article 36(5) of Regulation (EU) No 1305/2013 should be deleted.

With regard to mutual funds for farmers of all sectors, it appears that the prohibition of any contribution by public funds to initial capital stock laid down in Article 38(3) and Article 39(4) of Regulation (EU) No 1305/2013 hinders the effective functioning of those funds. That prohibition should therefore be deleted. It is also appropriate to expand the areas that can be covered by financial contributions to mutual funds, so that contributions can supplement the annual payments into the funds, as well as relate to their initial capital stock.

Support for investments for the restoration of production potential after natural disasters and catastrophic events under point (b) of Article 18(1) and point (d) of Article 24(1) of Regulation (EU) No 1305/2013 is usually granted to all eligible applicants. Therefore, Member States should not be obliged to define selection criteria for restoration operations. Moreover, in duly justified cases, where it is not possible to define selection criteria due to the nature of the operations, Member States should be allowed to define alternative selection methods.

Article 59 of Regulation (EU) No 1305/2013 defines the maximum European Agricultural Fund for Rural Development (EAFRD) contribution rates. In order to ease the pressure on the national budget of some Member States and to accelerate much-needed investments in Cyprus, the maximum contribution rate of 100 % referred to in point (f) of Article 59(4) of that Regulation should be extended until the programme closure. In addition, a reference to the specific contribution rate introduced in Regulation (EU) No 1303/2013 of the European Parliament and of the Council (7) for the new financial instrument referred to in point (c) of Article 38(1) of Regulation (EU) No 1303/2013 should be mentioned in Article 59(4) of Regulation (EU) No 1305/2013.

Pursuant to Article 60(1) of Regulation (EU) No 1305/2013, in cases of emergency measures due to natural disasters, eligibility of expenditure relating to programme changes may start from the date when the natural disaster occurred. That possibility to make eligible expenditure made before the submission of a programme amendment should be extended to other circumstances, such as catastrophic events or a significant and sudden change in the socioeconomic conditions of the Member State or region.

Pursuant to the second subparagraph of Article 60(2) of Regulation (EU) No 1305/2013, in respect of investments in the agricultural sector, only expenditure incurred after the submission of an application is eligible. In cases, however, where the investment is related to emergency measures due to natural disasters, catastrophic events or adverse climatic events or a significant and sudden change in the socioeconomic conditions of the Member State or region, Member States should be given the possibility to provide in their programmes that expenditure incurred after the occurrence of the event is eligible, in order to ensure their flexible and timely reaction to such events. In order to provide efficient support to emergency operations undertaken by the Member States in response to events which occurred in recent years, that possibility should apply from 1 January 2016.

In order to increase the use of the simplified cost options referred to in points (b) to (d) of Article 67(1) of Regulation (EU) No 1303/2013, it is necessary to limit the EAFRD-specific rules laid down in Article 62(2) of Regulation (EU) No 1305/2013 to aid granted in accordance with points (a) and (b) of Article 21(1), concerning income foregone and maintenance costs, and with Articles 28 to 31, 33 and 34 of Regulation (EU) No 1305/2013.

Article 74 of Regulation (EU) No 1305/2013 requires the Member States to consult the Monitoring Committee of the rural development programme on the selection criteria within four months from the approval of the programme. This creates an indirect obligation for the Member States to have defined all the selection criteria by that date even for the calls for applications which will be launched subsequently. In order to reduce unnecessary administrative burden, whilst ensuring that financial resources are used in the best possible way, Member States should be allowed to define the selection criteria and to ask for the opinion of the Monitoring Committee at any time before the publication of the calls for applications.

With a view to increasing the use of crop, animal and plant insurance, and of mutual funds and the income stabilisation tool, the maximum percentage of initial public support should be increased from 65 % to 70 %.

Financial discipline is used to ensure that the budget for the European Agricultural Guarantee Fund (EAGF) complies with the respective annual ceilings of the multiannual financial framework and to establish the reserve for crises in the agricultural sector. Given the technical character of the determination of the adjustment rate for direct payments and its inherent links with the Commission's estimates of expenditure set out in its annual draft budget, the procedure for setting the adjustment rate should be simplified by authorising the Commission to adopt it in accordance with the advisory procedure.

In order to harmonise the rules on automatic decommitment set out in Article 87 of Regulation (EU) No 1303/2013 and Article 38 of Regulation (EU) No 1306/2013, the date by which Member States have to send to the Commission information on exceptions to the decommitment referred to in Article 38(3) of Regulation (EU) No 1306/2013 should be adapted.

In order to provide for legal clarity as regards the treatment of the recoveries generated from the temporary reductions under Article 41(2) of Regulation (EU) No 1306/2013, the latter should be included in the list of sources of the assigned revenue under Article 43 of that Regulation.

In the interests of administrative simplification, it is appropriate to increase the threshold below which Member States may decide not to pursue recovery of undue payments from EUR 150 to EUR 250 provided that the Member State applies an equal or higher threshold for not pursuing national debts.

It is appropriate to ensure that the refusal or recovery of payments as a result of non-compliance with public procurement rules reflects the gravity of such non-compliance and respects the principle of proportionality, as expressed, for example, in the relevant guidelines established by the Commission for financial corrections to be made to expenditure financed by the Union under shared management for non-compliance with such rules. It is further appropriate to clarify that such non-compliance affects the legality and regularity of the transactions only up to the level of the part of the aid not to be paid or to be withdrawn.

In order to reduce administrative burden for small farmers, a further derogation should be introduced, exempting small farmers from declaring parcels on which a payment application is not made.

Having regard to practical and specific difficulties that the harmonisation of the payment deadlines for area-related payments between the EAGF and the EAFRD has given rise to, the transitional period should be extended by one more year. However, as regards area-related rural development measures, in order to maintain farmers' cash-flow, payments of advances before 16 October should remain possible.

In order to accommodate the diversity of agricultural systems across the Union, it is appropriate to allow Member States to consider ploughing up, which is relevant for the agronomic and environmental aspects, as a criterion to be used for the classification of permanent grassland.

Certain shrubs or trees which are not directly grazed by animals may nevertheless produce animal feed. Member States should be allowed to include those shrubs or trees in permanent grassland where grasses and other herbaceous forage remain predominant, in the whole or in part of their territory.

In order to clarify the classification prior to 2018 of land lying fallow as arable land, where it had been in place for five years or more, and provide certainty to the farmers concerned, Member States should be able to maintain its classification as arable land in 2018.

Land which can be grazed, where grasses and other herbaceous forage are not predominant or are absent, and where the grazing practices are neither traditional in character nor important for the conservation of biotopes and habitats, may nevertheless have relevant grazing value in certain areas. Member States should be allowed to consider those areas as permanent grassland in the whole or in part of their territory.

The experience gained in the first years of implementation of Regulation (EU) No 1307/2013 of the European Parliament and of the Council (8) has shown that certain Member States applying the single area payment scheme did not use the entire amount of the funds available under the budgetary ceilings laid down in Commission Implementing Regulation (EU) 2015/1089 (9). Member States applying the basic payment scheme already have the possibility, within certain limits, of distributing payment entitlements for a higher value than the amount available for their basic payment scheme in order to ensure a more efficient use of the funds. Member States applying the single area payment scheme should also be allowed, within the same common limits and without prejudice to the respect of the net ceilings for direct payments, to calculate the necessary amount by which their single area payment scheme ceiling may be increased.

Certain Member States operate national fiscal or social security registers in which farmers are registered for their agricultural activities. Those Member States should be able to exclude from eligibility for direct payments farmers who are not registered accordingly.

As experience acquired in the past showed that support was in a number of cases granted to natural or legal persons whose business purpose was not, or was only marginally, targeted at an agricultural activity, Regulation (EU) No 1307/2013 introduced the active farmer clause. Pursuant thereto, Member States are to refrain from granting direct payments to certain persons unless such persons can demonstrate that their agricultural activity is not marginal. However, subsequent experience shows that implementing the three criteria for being regarded as an active farmer, listed in the third subparagraph of Article 9(2) of Regulation (EU) No 1307/2013, has proven difficult for many Member States. In order to reduce the administrative burden associated with the implementation of those three criteria, Member States should have the possibility to decide that only one or two of them are made available to demonstrate that a person is an active farmer.

Moreover, the experience of some Member States is that the difficulties and the administrative costs of implementing the elements relating to the list of activities or businesses as provided for in Article 9(2) of Regulation (EU) No 1307/2013, has outweighed the benefit of excluding a very limited number of non-active beneficiaries from the direct support schemes. When a Member State considers this to be the case, it should be able to discontinue the application of Article 9 thereof in relation to the list of activities or businesses.

It is appropriate to make explicit that Article 11 of Regulation (EU) No 1307/2013 allows Member States to review, on an annual basis, their decisions on the reduction of the part of the basic payment to be granted to farmers which exceeds EUR 150 000, provided that such a review does not lead to a reduction of the amounts available for rural development.

To allow Member States to adapt support under the CAP to their specific needs, they should be given appropriate opportunities to review their decision on transferring funds from their direct payments ceiling to their rural development programmes and vice versa. They should therefore be given the possibility to review their decision also with effect from calendar year 2019, provided that any such decision does not entail a decrease in the amounts assigned to rural development.

In addition to using a linear reduction of the value of payment entitlements under the basic payment scheme to replenish national or regional reserves to facilitate the participation of young farmers and farmers commencing their agricultural activity in the support scheme, Member States should also be allowed to use the same mechanism to finance measures taken to prevent land from being abandoned and to compensate farmers for specific disadvantages.

To simplify and improve consistency between the rules applicable to greening measures, the exemption from the ecological focus area obligation applicable to holdings cultivating leguminous crops as a sole crop or in combination with grasses or other herbaceous forage or land lying fallow on more than 75 % of arable land pursuant to point (a) of Article 46(4) of Regulation (EU) No 1307/2013 should be extended to the obligation of crop diversification.

To ensure consistency in the way several types of crops are considered, on account of their substantial share in areas, in relation to the crop diversification requirement, the flexibility in applying the rules of crop diversification under Article 44(2) of Regulation (EU) No 1307/2013 should be extended to include the cultivation of crops under water for a significant part of the year or for a significant part of the crop cycle.

In order to streamline the existing exemptions from the crop diversification obligation set out in points (a) and (b) of Article 44(3) of Regulation (EU) No 1307/2013, applicable to land predominantly used for the production of grasses or other herbaceous forage, or for cultivation of leguminous crops or the cultivation of crops under water, or which is predominantly land lying fallow or permanent grassland, and so as to provide for equal treatment of all farmers with the same land use proportions, the upper limit of 30 hectares of arable land should no longer be applicable.

In order to take account of the agronomic specificity of Triticum spelta, it should be considered as a distinct crop for the purpose of Article 44 of Regulation (EU) No 1307/2013.

In order to streamline the existing exemptions from the ecological focus area obligation set out in points (a) and (b) of Article 46(4) of Regulation (EU) No 1307/2013, applicable to land predominantly used for the production of grasses or other herbaceous forage, or for cultivation of leguminous crops or the cultivation of crops under water, or which is predominantly land lying fallow or permanent grassland, the upper limit of 30 hectares of arable land should no longer be applicable.

Given the potential for indirect environmental benefits for biodiversity that may be provided by certain permanent crops, the list of ecological focus area types set out in Article 46 of Regulation (EU) No 1307/2013 should be extended to include Miscanthus and Silphium perfoliatum. Considering that the type of vegetation coverage may positively affect the biodiversity contribution of land lying fallow, land lying fallow for melliferous plants should be recognised as a distinct ecological focus area type. Consequently, weighting factors should be established for Miscanthus, Silphium perfoliatum and land lying fallow for melliferous plants. Weighting factors should be established in such a way as to reflect their different importance for biodiversity. The introduction of additional ecological focus area types requires the existing weighting factors for areas with nitrogen-fixing crops and for areas with short rotation coppice to be adapted so as to reflect the new balance between all ecological focus area types.

Experience gained with the application of the support scheme for young farmers under Article 50 of Regulation (EU) No 1307/2013 has shown that, in some cases, young farmers cannot benefit from the full five years of support. While the focus of that support remains on new economic activity by young people starting their farming activities, Member States should facilitate the access of young farmers to the full five years of payment for young farmers also in cases where young farmers have not applied for support immediately after setting up.

Some Member States have assessed that the payment provided to young farmers under Article 50 of Regulation (EU) No 1307/2013 is insufficient to adequately respond to the financial challenges of the initial establishment and the structural adjustment of agricultural holdings set up by young farmers. To further enhance the prospects for participation of young farmers in farming, Member States should have the possibility to decide to increase the percentage applied to calculate the amount of the payment for young farmers in the range of 25 % to 50 % and irrespective of the calculation method applied. Such decision should be without prejudice to the 2 % limit of their national ceiling for direct payments to finance the payment for young farmers.

In order to enhance clarity with regard to the responsibilities of Member States as far as the production limiting character of voluntary coupled support is concerned, it is appropriate to reformulate Article 52(5) and (6) of Regulation (EU) No 1307/2013. As the reformulation reflects the current practice since 1 January 2015 with regard to the provisions concerned, it is appropriate that it should apply from claim year 2015.

In order to ensure the greatest possible consistency between Union schemes targeting sectors that, in certain years, are marked by structural market imbalances, the Commission should be empowered to adopt delegated acts allowing Member States to decide that voluntary coupled support can continue to be paid until 2020 on the basis of the production units for which such support was granted in a past reference period.

In order to enhance the flexibility with regard to voluntary coupled support, annual review by the Member States of their support decisions should be allowed with effect from claim year 2019.

One of the major obstacles to the formation of producer organisations, mainly in Member States which are lagging behind as regards the degree of organisation, appears to be the lack of mutual trust and past experiences. In this context, coaching, whereby producer organisations which are functioning show the way to other producer organisations, producer groups or individual producers of fruit and vegetables, could offset that obstacle and should thus be included among the objectives of producer organisations in the fruit and vegetables sector.

In addition to withdrawals for free distribution, it is also appropriate to provide financial support for coaching actions intended to encourage producers to set up organisations meeting the criteria to be recognised in order to benefit from full Union financing within the operational programmes of existing producer organisations.

Crisis prevention and management measures should be extended to cover replenishment of mutual funds which could as new instruments help to combat crises, and to promotion and communication in order to diversify and consolidate the fruit and vegetables markets.

In order to simplify the current procedure of first authorising Member States to grant additional national financial assistance to producer organisations in regions of the Union where the degree of organisation is particularly low and second reimbursing a part of the national financial assistance if further conditions are complied with, a new system should be established for Member States where the degree of organisation is significantly below the Union average. In order to ensure a smooth transition from the current procedure to the new system, a transitional period of one year should be provided for. The new system should therefore become applicable from 1 January 2019.

In order to ensure protection for wine spirits with a geographical indication against risks of misappropriation of reputation, Member States should be allowed to apply the rules on authorisations for vine plantings suitable for producing wines with a geographical indication also to wines suitable for producing wine spirits with a geographical indication.

The use of contracts in the milk and milk products sector may help to reinforce the responsibility of operators and to increase their awareness of the need to better take into account the signals of the market, to improve price transmission and to adapt supply to demand, as well as to help to avoid certain unfair commercial practices. In order to incentivise the use of such contracts in the milk and milk products sector as well as in other sectors, producers, producer organisations or association of producer organisations should have the right to request a written contract, even if the Member State concerned has not made the use of such contracts compulsory.

While the parties to a contract for the delivery of raw milk are free to negotiate the elements of such contracts, Member States who make the use of contracts compulsory have been granted the opportunity to impose certain contract clauses, in particular their minimum duration. With a view to enabling the parties to achieve contractual clarity on the delivered quantities and prices, Member States should also have the possibility of imposing on the parties the obligation to agree on a relationship between a delivered quantity and the price payable for that delivery.

Producer organisations and their associations can play useful roles in concentrating supply, in improving the marketing, planning and adjusting of production to demand, optimising production costs and stabilising producer prices, carrying out research, promoting best practices and providing technical assistance, managing by-products and risk management tools available to their members, thereby contributing to strengthening the position of producers in the food chain. Their activities, including the contractual negotiations for the supply of agricultural products by such producer organisations and their associations when concentrating supply and placing the products of their members on the market, therefore contribute to the fulfilment of the objectives of the CAP set out in Article 39 of the Treaty on the Functioning of the European Union (TFEU), since they strengthen the position of farmers in the food supply chain and can contribute to a better functioning of the food supply chain. The reform of the CAP in 2013 reinforced the role of producer organisations. By way of derogation from Article 101 TFEU, the possibility to carry out activities such as production planning, cost optimisation, placing producer members' products on the market and conducting contractual negotiations should therefore be explicitly regulated as a right of recognised producer organisations in all sectors for which Regulation (EU) No 1308/2013 of the European Parliament and of the Council (10) establishes a common organisation of the markets. That derogation should only cover producer organisations which genuinely exercise an activity aimed at economic integration and which concentrate supply and place products of their members on the market. However, in addition to the application of Article 102 TFEU to such producer organisations, safeguards should be put in place in order to ensure that such activities do not exclude competition or jeopardise the objectives set out in Article 39 TFEU. Competition authorities should have the right to intervene in such cases and decide that such activities should, for the future, be modified, discontinued or not take place at all. Until the adoption of the decision of the competition authority, the activities carried out by producer organisations should be considered legal. Associations of producer organisations recognised under Article 156(1) of Regulation (EU) No 1308/2013 should be able to rely, for the activities that they carry out themselves, on that derogation to the same extent and under the same conditions as producer organisations.

Producer organisations are recognised in a specific sector referred to in Article 1(2) of Regulation (EU) No 1308/2013. However, as producer organisations may operate in more than one sector and in the interest of avoiding administrative burden by obliging them to create several producer organisations for recognition purposes, it should be possible for a producer organisation to obtain more than one recognition. However, in such cases, the producer organisation in question should fulfil the conditions of recognition for each of the sectors concerned.

Taking note of the role which interbranch organisations can play for the better functioning of the food supply chain, the list of possible objectives which such interbranch organisations may pursue should be extended to cover also measures to prevent and manage risks related to animal health, plant-protection and the environment.

Interbranch organisations are recognised in a specific sector referred to in Article 1(2) of Regulation (EU) No 1308/2013. However, as interbranch organisations may operate in more than one sector and, in the interest of avoiding administrative burden by obliging them to create several interbranch organisations for recognition purposes, it should be possible for an interbranch organisation to obtain more than one recognition. However, in such cases, the interbranch organisation should fulfil the conditions of recognition for each of the sectors concerned.

In order to facilitate better transmission of market signals and strengthen linkages between producer prices and value added throughout the supply chain, farmers, including associations of farmers, should be allowed to agree with their first purchaser on value-sharing clauses, including market bonuses and losses. As interbranch organisations can play an important part in allowing dialogue between actors in the supply chain and in promoting best practices and market transparency, they should be allowed to establish standard value-sharing clauses. However, the use of value-sharing clauses by farmers, associations of farmers and their first purchaser should remain voluntary.

The experience gained through the application of Article 188 of Regulation (EU) No 1308/2013 has proven that the need to adopt implementing acts for the management of simple, mathematical processes linked to the way quotas are allocated is cumbersome and resource-intensive without any specific advantage linked to such an approach. The Commission has, in fact, no margin of discretion in this context considering that the related formula is already fixed by Article 7(2) of Commission Regulation (EC) No 1301/2006 (11). In order to reduce the related administrative burden and streamline the process it should be provided that the Commission makes the results of the allocation of the tariff quotas public through an appropriate web-publication. Moreover a specific provision should be included providing that Member States should only issue licences following the publication of the allocation results by the Commission.

In order to ensure the effective use by farmers' or producer organisations or their associations of Article 209 of Regulation (EU) No 1308/2013, the possibility to request the opinion of the Commission on the compatibility of agreements, decisions and concerted practices of farmers' or producer organisations or their associations with the objectives set out in Article 39 TFEU should be introduced.

In order to ensure that the provisions in Regulation (EU) No 1308/2013 allowing collective agreements and decisions to temporarily stabilise the sectors concerned in times of severe imbalance in markets can be implemented in an effective and timely manner, the possibilities for such collective actions should be extended to farmers and associations of farmers. Furthermore, such temporary measures should no longer be authorised as a means of last resort but could complement Union action in the context of public intervention, private storage and the exceptional measures envisaged by Regulation (EU) No 1308/2013.

As it is appropriate to continue to help the milk and milk products sector in its transition as a result of the end of the quota system and to encourage it to respond more effectively to market and price fluctuations, the provisions in Regulation (EU) No 1308/2013 reinforcing the contractual arrangements in the milk and milk products sector should no longer have an end date.

Agricultural markets should be transparent and information about prices should be accessible and useful to all those involved.

The experience gained through the application of Section A of Part II of Annex VIII to Regulation (EU) No 1308/2013 has proven that the need to adopt implementing acts for the approval of limited increases in wine enrichment limits, which are technical and uncontroversial in nature, is cumbersome and resource-intensive without any specific advantage resulting from such an approach. In order to reduce the related administrative burden and streamline the process it should be provided that Member States that decide to make use of that derogation are to notify the Commission of any such decisions.

Regulation (EU) No 652/2014 of the European Parliament and of the Council (12) provides for the possibility to divide budgetary commitments into annual instalments only in the case of approval of multiannual programmes for the eradication, control and surveillance of animal diseases and zoonoses, for survey programmes concerning the presence of pests and for programmes concerning the control of pests in outermost regions of the Union. In the interest of simplification and in order to reduce the administrative burden, that possibility should be extended to the other actions provided for in that Regulation.

In order to enable the amendments provided for in this Regulation to be applied from 1 January 2018, it should enter into force on the day following that of its publication in the Official Journal of the European Union.

Regulations (EU) No 1305/2013, (EU) No 1306/2013, (EU) No 1307/2013, (EU) No 1308/2013 and (EU) No 652/2014 should therefore be amended accordingly,

in Article 2(1), the second subparagraph is amended as follows:

in Article 8(1), point (h)(ii) is replaced by the following:

in Article 14, paragraph 4 is replaced by the following:

‘4.   Eligible costs under this measure shall be the costs of organising and delivering the knowledge transfer or information action. Infrastructure installed as a result of demonstration may be used after the operation is completed. In the case of demonstration projects, support may also cover relevant investment costs. Costs for travel, accommodation and per diem expenses of participants as well as the cost of the replacement of farmers shall also be eligible for support. All costs identified under this paragraph shall be paid to the beneficiary.’;

Article 15 is amended as follows:

Article 16 is amended as follows:

Article 17 is amended as follows:

Article 19 is amended as follows:

in Article 20, the following paragraph is added:

‘4.   Paragraphs 2 and 3 shall not apply where support is provided in the form of financial instruments.’;

Article 23 is amended as follows:

Article 28 is amended as follows:

Article 29 is amended as follows:

in Article 30(1), the second subparagraph is replaced by the following:

‘When calculating the payments related to the support referred to in the first subparagraph, Member States shall deduct the amount necessary in order to exclude double funding of the practices referred to in Article 43 of Regulation (EU) No 1307/2013. Member States may calculate the deduction as a fixed, average amount applied to all beneficiaries concerned carrying out the sub-measures concerned.’;

Article 31 is amended as follows:

in Article 33, paragraph 1 is replaced by the following:

‘1.   Animal welfare payments under this measure shall be granted to farmers who undertake, on a voluntary basis, to carry out operations consisting of one or more animal welfare commitments and who are active farmers within the meaning of Article 9 of Regulation (EU) No 1307/2013, as applicable in the Member State concerned.’;

Article 36 is amended as follows:

in Article 37(1), the first subparagraph is replaced by the following:

‘1.   Support under point (a) of Article 36(1) shall only be granted for insurance contracts which cover for loss caused by an adverse climatic event, or by an animal or plant disease, or a pest infestation, or an environmental incident or a measure adopted in accordance with Directive 2000/29/EC to eradicate or contain a plant disease, or pest which destroys more than 20 % of the average annual production of the farmer in the preceding three-year period or a three-year average based on the preceding five-year period, excluding the highest and lowest entry. Indexes may be used in order to calculate the annual production of the farmer. The calculation method used shall permit the determination of the actual loss of an individual farmer in a given year.’;

Article 38 is amended as follows:

Article 39 is amended as follows:

the following Article is inserted:

‘Article 39a

Income stabilisation tool for farmers of a specific sector

• 1. 

  Support under point (d) of Article 36(1) shall only be granted in duly justified cases and where the drop in income exceeds a threshold of at least 20 % of the average annual income of the individual farmer in the preceding three-year period or a three-year average based on the preceding five-year period excluding the highest and lowest entry. Indexes may be used in order to calculate the annual loss of income of the farmer. Income for the purposes of point (d) of Article 36(1) shall refer to the sum of revenues the farmer receives from the market, including any form of public support, deducting input costs. Payments by the mutual fund to farmers shall compensate for less than 70 % of the income lost in the year the producer becomes eligible to receive this assistance.

• 2. 

  Article 39(2) to (5) shall apply for the purpose of support under point (d) of Article 36(1).’;

Article 45 is amended as follows:

Article 49 is amended as follows:

in Article 59, paragraph 4 is amended as follows:

Article 60 is amended as follows:

in Article 62, paragraph 2 is replaced by the following:

‘2.   Where aid is granted on the basis of standard costs or additional costs and income foregone in accordance with points (a) and (b) of Article 21(1),as regards income foregone and maintenance costs, and with Articles 28 to 31, 33, and 34, Member States shall ensure that the relevant calculations are adequate and accurate and established in advance on the basis of a fair, equitable and verifiable calculation method. To this end, a body that is functionally independent from the authorities responsible for the programme implementation and possesses the appropriate expertise shall perform the calculations or confirm the adequacy and accuracy of the calculations. A statement confirming the adequacy and accuracy of the calculations shall be included in the rural development programme.’;

in Article 66(1), point (b) is deleted;

in Article 74, point (a) is replaced by the following:

Annex II is amended in accordance with Annex I to this Regulation.

Article 26 is amended as follows:

in Article 38, paragraph 3 is replaced by the following:

‘3.   In the event of legal proceedings or of an administrative appeal having suspensory effect, the period for automatic decommitment referred to in paragraph 1 or paragraph 2 shall, in respect of the amount relating to the operations concerned, be interrupted for the duration of those proceedings or that administrative appeal, provided that the Commission receives a substantiated notification from the Member State by 31 January of year N + 4.’;

in Article 43(1), point (a) is replaced by the following:

in Article 54(3), point (a)(ii) is replaced by the following:

in Article 63(1), the following subparagraph is added:

‘Where the non-compliance concerns national or Union rules on public procurement, the part of the aid not to be paid or to be withdrawn shall be determined on the basis of the gravity of the non-compliance and in accordance with the principle of proportionality. The legality and regularity of the transaction shall only be affected up to the level of the part of the aid not to be paid or to be withdrawn.’;

in Article 72, paragraph 2 is replaced by the following:

‘2.   By way of derogation from point (a) of paragraph 1 of this Article, Member States may decide that:

the third and fourth subparagraphs of Article 75(1) are replaced by the following:

‘Notwithstanding the first and second subparagraphs of this paragraph, Member States may:

With regard to support granted under rural development, as referred to in Article 67(2), the first and second subparagraphs of this paragraph shall apply in respect of the aid applications or payment claims submitted from claim year 2019.’.

Article 4 is amended as follows:

in Article 6(2), the following subparagraph is added:

‘Where a Member State makes use of the option provided for in the second subparagraph of Article 36(4), the national ceiling set out in Annex II for that Member State for the respective year may be exceeded by the amount calculated in accordance with that subparagraph.’;

Article 9 is amended as follows:

in Article 11, paragraph 6 is replaced by the following:

‘6.   Member States may review their decisions on a reduction of payments in accordance with this Article on an annual basis, provided that such review does not lead to a reduction of the amounts available for rural development.

Member States shall notify the Commission of the decisions taken in accordance with this Article and of any estimated product of reductions for the years until 2019 by 1 August of the year preceding the application of such decisions, the last possible date for such notification being 1 August 2018.’;

Article 14 is amended as follows:

in Article 31(1), point (g) is replaced by the following:

in Article 36(4), the following subparagraphs are added:

‘For each Member State, the amount calculated in accordance with the first subparagraph of this paragraph may be increased by a maximum of 3 % of the relevant annual national ceiling set out in Annex II after deduction of the amount resulting from the application of Article 47(1) for the relevant year. When a Member State applies such an increase, that increase shall be taken into account by the Commission when setting the annual national ceiling for the single area payment scheme pursuant to the first subparagraph of this paragraph. For that purpose, Member States shall notify the Commission by 31 January 2018 of the annual percentages by which the amount calculated pursuant to paragraph 1 of this Article is to be increased each calendar year from 2018.

Member States may review their decision referred to in the second subparagraph of this paragraph on an annual basis and shall notify the Commission of any decision based on such review by 1 August of the year preceding its application.’;

Article 44 is amended as follows:

Article 46 is amended as follows:

Article 50 is amended as follows:

Article 52 is amended as follows:

in Article 53, paragraph 6 is replaced by the following:

‘6.   Member States may, by 1 August of any given year, review their decision pursuant to this Chapter and decide, with effect from the following year:

Member States shall notify the Commission of any such decision by the date referred to in the first subparagraph.’;

Article 70 is amended as follows:

Annex X is amended in accordance with Annex II to this Regulation.

Article 33 is amended as follows:

in Article 34, paragraph 4 is replaced by the following:

‘4.   The 50 % limit provided for in paragraph 1 shall be increased to 100 % in the following cases:

Article 35 is replaced by the following:

‘Article 35

National financial assistance

• 1. 

  In regions of Member States in which the degree of organisation of producers in the fruit and vegetables sector is significantly below the Union average, Member States may grant producer organisations national financial assistance equal to a maximum of 80 % of the financial contributions referred to in point (a) of Article 32(1) and up to 10 % of the value of the marketed production of any such producer organisation. That assistance shall be additional to the operational fund.

• 2. 

  The degree of organisation of producers in a region of a Member State shall be considered as significantly below the Union average where the average degree of organisation has been less than 20 % for three consecutive years preceding the implementation of the operational programme. The degree of organisation shall be calculated as the value of fruit and vegetable production that was obtained in the region concerned and marketed by producer organisations, associations of producer organisations and producer groups recognised in accordance with Article 125e of Regulation (EC) No 1234/2007 or Article 27 of Regulation (EU) No 1305/2013, divided by the total value of the fruit and vegetable production that was obtained in that region.

• 3. 

  Member States that grant national financial assistance in accordance with paragraph 1 shall inform the Commission of the regions that meet the criteria referred to in paragraph 2 and of the national financial assistance granted to producer organisations in those regions.’;

in Article 37, point (d)(ii) is replaced by the following:

in the first paragraph of Article 38, point (i) is replaced by the following:

in Article 62, the following paragraph is added:

‘5.   Member States may apply this Chapter to areas producing wine suitable for producing wine spirits with a geographical indication as registered in accordance with Annex III to Regulation (EC) No 110/2008 of the European Parliament and of the Council (*1). For the purposes of this Chapter, those areas may be treated as areas where wines with a protected designation of origin or protected geographical indication may be produced.

Article 64 is amended as follows:

Article 148 is amended as follows:

in Article 149, paragraph 1 is replaced by the following:

‘1.   A producer organisation in the milk and milk products sector which is recognised under Article 161(1) may negotiate on behalf of its farmer members, in respect of part or all of their joint production, contracts for the delivery of raw milk by a farmer to a processor of raw milk, or to a collector within the meaning of the third subparagraph of Article 148(1).’;

Article 152 is amended as follows:

Article 154 is amended as follows:

Article 157 is amended as follows:

in Article 159, the heading is replaced by the following:

‘Mandatory recognition’;

Article 161 is amended as follows:

Article 168 is amended as follows:

Articles 169, 170 and 171 are deleted;

the following Section is inserted:

‘Section 5a

Value-sharing clauses

Article 172a

Value-sharing

Without prejudice to any specific value-sharing clauses in the sugar sector, farmers, including associations of farmers, and their first purchaser may agree on value sharing clauses, including market bonuses and losses, determining how any evolution of relevant market prices for the products concerned or other commodity markets is to be allocated between them.’;

in Article 184, paragraph 1 is replaced by the following:

‘1.   Tariff quotas for the import of agricultural products for release into free circulation in the Union or a part thereof, or tariff quotas for imports of Union agricultural products into third countries, which are to be partly or fully administered by the Union, resulting from international agreements concluded in accordance with the TFEU or any other act adopted in accordance with Article 43(2) or Article 207 TFEU, shall be opened and/or administered by the Commission by means of delegated acts pursuant to Article 186 of this Regulation and implementing acts pursuant to Article 187 of this Regulation.’;

Article 188 is replaced by the following:

‘Article 188

Allocation process for tariff quotas

• 1. 

  The Commission shall make public, via an appropriate web-publication, the results of tariff quota allocation for the applications notified taking into account the tariff quotas available and the applications notified.

• 2. 

  The publication referred to in paragraph 1 shall also make reference, when appropriate, to the need of rejecting pending applications, suspending the submission of applications or allocating unused quantities.

• 3. 

  Member States shall issue import licences and export licences for the quantities applied for within the import tariff quotas and export tariff quotas, subject to the respective allocation coefficients and after they are made public by the Commission in accordance with paragraph 1.’;

Article 209 is amended as follows:

Article 222 is amended as follows:

in Article 232, paragraph 2 is deleted;

Annexes VII and VIII are amended in accordance with Annex III to this Regulation.

in Article 4, the following paragraph is added:

‘4.   In the case of approval of multiannual actions, budgetary commitments may be divided into annual instalments. Where budgetary commitments are so divided, the Commission shall commit the annual instalments taking into account the progress of the actions, the estimated needs and the budget available.’;

in Article 13, paragraph 5 is deleted;

in Article 22, paragraph 5 is deleted;

in Article 27, paragraph 5 is deleted.

point 11(a) and (b) of Article 3 shall apply from 1 January 2015;

point 23(b) of Article 1 shall apply from 1 January 2016; and

point 3 of Article 4 shall apply from 1 January 2019.

in the line concerning Article 17(3), Subject: Investment in physical assets, Agricultural sector, Maximum amount in EUR or rate: 40 %, the fourth column, the introductory part and the first indent is replaced by the following:

‘Of the amount of eligible investment in other regions

The above rates may be increased by an additional 20 percentage points, provided that maximum combined support does not exceed 90 %, for:

in the line concerning Article 17(3), Subject: Investments in physical assets, Processing and marketing of products listed in Annex I to the TFEU, Maximum amount in EUR or rate: 40 %, the fourth column is replaced by the following:

‘Of the amount of eligible investment in other regions

The above rates may be increased by an additional 20 percentage points, provided that maximum combined support does not exceed 90 %, for operations supported in the framework of the EIP, for collective investments and integrated projects or operations linked to a merger of producer organisations’;

the lines concerning Article 37(5), Article 38(5) and Article 39(5) are replaced by the following:

the line ‘Areas with short rotation coppice’ is replaced by the following:

the line ‘Areas with nitrogen fixing crops’ is replaced by the following:

the following lines are added:

in point 1(c) of Part II of Annex VII, the second indent is replaced by the following:

in Section A of Part I of Annex VIII, point 3 is replaced by the following: