Council Regulation (EC) No 2012/2006
of 19 December 2006
amending and correcting Regulation (EC) No 1782/2003 establishing common rules for direct support schemes under the common agricultural policy and establishing certain support schemes for farmers and amending Regulation (EC) No 1698/2005 on support for rural development by the European Agricultural Fund for Rural Development (EAFRD)

THE COUNCIL OF THE EUROPEAN UNION,
Having regard to the Treaty establishing the European Community, and in particular Article 36 and the third subparagraph of Article 37(2) thereof,
Having regard to the Treaty of Accession of the Republic of Bulgaria and Romania, and in particular Article 4(3) thereof,
Having regard to the Act of Accession of the Republic of Bulgaria and Romania (hereinafter referred to as ‘the 2005 Act of Accession’), and in particular Article 56 thereof,
Having regard to the proposal from the Commission,
Having regard to the Opinion of the European Parliament,
Whereas:
(1) Regulation (EC) No 1782/2003 established common rules for direct support schemes under the common agricultural policy and certain support schemes for farmers.
OJ L 270, 21.10.2003, p. 1. Regulation as last amended by Regulation (EC) No 1405/2006 (OJ L 265, 26.9.2006, p. 1).
(2) Articles 42(8) and 71d(6) of Regulation (EC) No 1782/2003 prohibit the transfer of entitlements established using the national reserve except in cases of inheritance. In cases of mergers and scissions it is also appropriate to allow farmers to bring payment entitlements allocated from the national reserve into the resulting new holding or holdings.
(3) Experience shows that for a decoupled income support the rules governing the eligibility of agricultural areas may be simple. In particular, it is appropriate to simplify the rules applicable to the single payment scheme for agricultural areas planted with olive trees.
(4) In Malta, a majority of farmers in the beef and veal sector do not have any land at their disposal. Under these specific circumstances, the application of the special conditions laid down in Article 71m of Regulation (EC) No 1782/2003 could create serious difficulties for the sustainable development of the beef and veal sector and an excessive administrative workload. It is appropriate to provide for simplified conditions for the single payment scheme payments to the farmers concerned in Malta.
(5) Currently, those Member States among the Czech Republic, Estonia, Cyprus, Latvia, Lithuania, Hungary, Malta, Poland, Slovenia and Slovakia (hereinafter referred to as ‘the new Member States’) that apply the single area payment scheme are excluded from the Community aid for energy crops. The review of the energy crops scheme pursuant to Article 92 of Regulation (EC) No 1782/2003 has shown that it is appropriate to extend the aid for energy crops to all Member States as from 2007 and under the same conditions. Therefore the maximum guaranteed area should be increased proportionally, the schedule of increments provided for the introduction of support schemes in the new Member States should not apply to the energy crops scheme and the rules governing the single area payment scheme should be amended.
(6) In order to strengthen the role of permanent energy crops and to provide an incentive to increase the production of these crops, Member States should be entitled to grant national aid up to 50 % of the costs associated with establishing permanent crops for the areas which have been subject to an application for the aid for energy crops.
(7) Sugar beet and cane producers in the new Member States have benefited since accession from price support under Council Regulation (EC) No 1260/2001 of 19 June 2001 on the common organisation of the markets in the sugar sector. Therefore, the Community aid for sugar beet and cane producers established in Chapter 10f of Regulation (EC) No 1782/2003 should not be subject to the application of the schedule of increments provided for in Article 143a of that Regulation, with effect from the day of application of the aid for sugar beet and cane producers. It is also appropriate to clarify the conditions for the application of this aid and the calculation of the payment to be granted to the farmers concerned.
OJ L 178, 30.6.2001, p. 1. Regulation as repealed by Regulation (EC) No 318/2006 (OJ L 58, 28.2.2006 p. 1).
(8) Experience shows that the single area payment scheme is an efficient and simple system of granting decoupled income support to farmers. For the sake of simplification it is appropriate to allow the new Member States to continue applying it until the end of year 2010. Nevertheless, it is not deemed appropriate to extend beyond 2008 the exemption, granted to Member States applying the single area payment scheme, from the obligation to introduce into cross-compliance statutory management requirements. To ensure coherence of certain rural development measures with this non-extension, Article 51 of Regulation (EC) No 1698/2005 should take account thereof.
OJ L 277, 21.10.2005, p. 1. Regulation as last amended by Regulation (EC) No 1463/2006 (OJ L 277, 9.10.2006, p. 1).
(9) Under normal circumstances, farmers may agree between themselves the conditions under which the holding (or part of the holding) having beneficiated from the separate sugar payment is transferred. However, in the case of inheritance, it is appropriate to provide that the inheritor be granted the separate sugar payment.
(10) The 2005 Act of Accession and this Regulation both amend Regulation (EC) No 1782/2003 and those amendments should come into force on the same day. In the interest of legal certainty, the order in which those amendments are to be applied should be specified.
(11) Regulations (EC) No 1782/2003 and (EC) No 1698/2005 should be amended accordingly.
(12) Council Regulation (EC) No 247/2006 of 30 January 2006 laying down specific measures for agriculture in the outermost regions of the Union amended Annex I to Regulation (EC) No 1782/2003. Due to an error, the entries for olive oil and hops did not take into account the amendments to that Annex introduced by Commission Regulation (EC) No 2183/2005 of 22 December 2005 amending Council Regulation (EC) No 1782/2003 establishing common rules for direct support schemes under the common agricultural policy and establishing certain support schemes for farmers and amending Regulation (EC) No 795/2004 laying down detailed rules for the implementation of the single payment scheme provided for in Council Regulation (EC) No 1782/2003. Annex I to Regulation (EC) No 1782/2003 should therefore be corrected accordingly, with effect from the date of application of Regulation (EC) No 2183/2005,
OJ L 42, 14.2.2006, p. 1.
HAS ADOPTED THIS REGULATION:

Article 1 Regulation (EC) No 1782/2003 as amended, including by the 2005 Act of Accession, is hereby amended as follows:
1. Article 20 shall be amended as follows:
(a) paragraph 2 shall be replaced by the following:

‘2. For the Member states applying the aid for olive groves provided for in Chapter 10b of Title IV, the identification system shall include a geographical information system for olive cultivation, consisting of a computerised alphanumerical database and a computerised graphical reference database for olive trees and areas concerned.’;

(b) the following paragraph shall be added:

‘3. Member States not applying the aid for olive groves provided for in Chapter 10b of Title IV may decide to include the geographical information system for olive cultivation referred to in paragraph 2 in the identification system for agricultural parcels.’;

2. the second indent of Article 22(1) shall be replaced by the following:

‘— in the case of an application for the aid for olive groves provided for in Chapter 10b of Title IV, or where the Member State is applying the option referred to in Article 20(3), the number of olive trees and their positioning in the parcel,’;

3. the first subparagraph of Article 42(8) shall be replaced by the following:

‘Except in the case of a transfer by actual or anticipated inheritance and of mergers and scissions, and by way of derogation from Article 46, the entitlements established using the national reserve shall not be transferred for a period of five years starting from their allocation. In the case of a merger or scission, the farmer(s) managing the new holding(s) shall keep the entitlements which were originally allocated from the national reserve until the remaining part of the five-year period.’;

4. the second subparagraph of Article 44(2) shall be replaced by the following:

‘“Eligible hectare” shall also mean areas planted with hops or being under a temporary resting obligation, or areas under olive trees.’;

5. point (a) of Article 51 shall be replaced by the following:

‘(a) permanent crops, apart from olive trees or hops;’;

6. Article 56(4) shall be replaced by the following:

‘4. Member States shall be authorised to pay national aid up to 50 % of the costs associated with establishing permanent crops intended for bio-mass production on set-aside land.’;

7. Article 60(1) shall be replaced by the following:

‘1. Where a Member State makes use of the option provided for in Article 59, farmers may, by way of derogation from Article 51(b) and (c) and in accordance with this Article, also use the parcels declared in accordance with Article 44(3) for the production of products referred to in Article 1(2) of Regulation (EC) No 2200/96 or in Article 1(2) of Regulation (EC) No 2201/96 and of potatoes other than those intended for the manufacture of potato starch for which aid is granted under Article 93 of this Regulation, except crops referred to in Article 51(a).’;

8. the first subparagraph of Article 71d(6) shall be replaced by the following:

‘6. Except in the case of a transfer by actual or anticipated inheritance, of mergers and scissions and of the application of paragraph 3, and by way of derogation from Article 46, the entitlements established using the national reserve shall not be transferred for a period of five years starting from their allocation. In the case of a merger or scission, the farmer(s) managing the new holding(s) shall keep the entitlements which were originally allocated from the national reserve for the remaining part of the five-year period.’;

9. Article 71g(1), shall be replaced by the following:

‘1. Farmers may, by way of derogation from Article 51(b) and (c) and in accordance with this Article, also use the parcels declared in accordance with Article 44(3) for the production of products referred to in Article 1(2) of Regulation (EC) No 2200/96 or in Article 1(2) of Regulation (EC) No 2201/96 and of potatoes other than those intended for the manufacture of potato starch for which aid is granted under Article 93 of this Regulation, except crops referred to in Article 51(a).’;

10. the following subparagraph shall be added to Article 71m:

‘However, for Malta, the second subparagraph shall not apply and the derogation provided for in the first subparagraph shall apply without the condition that the farmer maintain at least 50 % of the agricultural activity exercised before the transition to the single payment scheme expressed in livestock units.’;

11. the following subparagraph shall be added to Article 88:

‘Articles 143a and 143c shall not apply to the aid for energy crops in the Community as constituted on 1 January 2007.’;

12. Article 89(1) shall be replaced by the following:

‘1. A maximum guaranteed area of 2 000 000 ha for which the aid may be granted is hereby established.’;

13. the following Article shall be inserted:

‘Article 90a National aid
Member States shall be authorised to pay national aid up to 50 % of the costs associated with establishing permanent crops for the areas which have been subject to an application for the aid for energy crops.’;

14. Article 110q(1) shall be replaced by the following:

‘1. In Member States which have granted the restructuring aid provided for in Article 3 of Regulation (EC) No 320/2006 for at least 50 % of the sugar quota fixed on 20 February 2006 in Annex III to Regulation (EC) No 318/2006, Community aid shall be granted to sugar beet and cane producers.’;

15. Article 110s shall be replaced by the following:

‘Article 110s Amount of the aid
The aid shall be expressed per tonne of white sugar of standard quality. The amount of the aid shall be equal to half of the amount obtained by dividing the amount of the ceiling referred to in point 2 of point K of Annex VII for the Member State concerned for the corresponding year by the total of the sugar and inulin syrup quota fixed on 20 February 2006 in Annex III to Regulation (EC) No 318/2006.
Articles 143a and 143c shall not apply to the aid for sugar beet and cane producers.’;

16. Article 143b shall be amended as follows:
(a) paragraph 1 shall be replaced by the following:

‘1. The new Member States may decide not later than the date of accession to replace the direct payments, with the exception of the aid for energy crops established in Chapter 5 of Title IV, during the period of application referred to in paragraph 9, with a single area payment which shall be calculated in accordance with paragraph 2.’;

(b) the first subparagraph of paragraph 5 shall be replaced by the following:

‘For the purpose of granting payments under the single area payment scheme, all agricultural parcels corresponding to the criteria provided for in paragraph 4, as well as agricultural parcels planted with short rotation coppice (CN code ex 0602 90 41) which have been maintained in good agricultural condition as at 30 June 2003 and which are subject to an application for the aid for energy crops provided for in Article 88, shall be eligible. However, for Bulgaria and Romania, all agricultural parcels corresponding to the criteria provided for in paragraph 4, as well as agricultural parcels planted with short rotation coppice (CN code ex 0602 90 41) which are subject to an application for the aid for energy crops provided for in Article 88, shall be eligible.’;

(c) in paragraph 6, the third subparagraph shall be replaced by the following:

‘As from 1 January 2005 and until 31 December 2008 the application of Articles 3, 4, 6, 7 and 9 shall be optional for the new Member States insofar as those provisions relate to statutory management requirements. However for Bulgaria and Romania, the application of Articles 3, 4, 6, 7 and 9 shall be optional until 31 December 2011.’;

(d) paragraph 9 shall be replaced by the following:

‘9. Subject to paragraph 11, for any new Member State the single area payment scheme shall be available for a period of application until the end of 2010. However, for Bulgaria and Romania, the single area payment scheme shall be available for a period of application until the end of 2011. New Member States shall notify the Commission of their intention to terminate the application of the scheme by 1 August of the last year of application.’;

(e) the third subparagraph of paragraph 11 shall be replaced by the following:

‘Until the end of the period of application of the single area payment scheme as referred to in paragraph 9, the percentage rate set out in Article 143a shall apply. If the application of the single area payment scheme is extended beyond the end of 2010 pursuant to a decision taken under point (b) of the first subparagraph of this paragraph, the percentage rate set out in Article 143a for 2010 shall apply until the end of the last year of application of the single area payment scheme.’;

17. Article 143ba shall be amended as follows:
(a) in the first subparagraph of paragraph 1, the first sentence shall be replaced by the following:

‘By way of derogation from Article 143b, the new Member States applying the single area payment scheme may decide by 30 April 2006 to grant in respect of the years 2006 to 2010 a separate sugar payment to farmers eligible under the single area payment scheme.’;

(b) paragraph 3 shall be replaced by the following:

‘3. By way of derogation from paragraph 2, each new Member State concerned may decide by 31 March of the year in respect of which the separate sugar payment is granted and on the basis of objective criteria to apply for the separate sugar payment a ceiling lower than that listed in point K of Annex VII. Where the sum of the amounts determined in accordance with paragraph 1 exceeds the ceiling decided by the new Member State concerned, the annual amount to be granted to the farmers shall be reduced proportionally.’;

(c) the following paragraph shall be added:

‘6. In the case of actual or anticipated inheritance, the separate sugar payment shall be granted to the farmer who inherited the holding, under the condition that this farmer is eligible under the single area payment scheme.’;

18. Annex I shall be amended as follows:
(a) The entry for ‘olive oil’ shall be replaced by the following:

‘Olive oil	Title IV, Chapter 10b of this Regulation	Area aid
	Article 48a(11) of Commission Regulation (EC) No 795/2004 (OJ L 141, 30.4.2004, p. 1)	For Malta and Slovenia in 2006’;

(b) The entry for ‘hops’ shall be replaced by the following:

‘Hops	Title IV, Chapter 10d of this Regulation (***) (*****)	Area aid
	Article 48a(12) of Regulation (EC) No 795/2004	For Slovenia in 2006’.

Article 2 The following subparagraph shall be is added to Article 51(3) of Regulation (EC) No 1698/2005:

‘The derogation provided for in the first subparagraph shall apply until 31 December 2008. However, for Bulgaria and Romania it shall apply until 31 December 2011.’

Article 3 This Regulation shall enter into force on 1 of January 2007 subject to the entry into force of the 2005 Treaty of Accession of Bulgaria and Romania insofar as the provisions of this Regulation are based on that Treaty.
It shall apply as from 1 January 2007. However, Article 1(6) shall apply with effect from 1 January 2005, Article 1(14), (15), (17) and (18) shall apply with effect from 1 January 2006.
This Regulation shall be binding in its entirety and directly applicable in all Member States.
Done at Brussels, 19 December 2006.
For the Council
The President
J. Korkeaoja