Common Agricultural Policy and direct payment component - - PowerPoint PPT Presentation

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Common Agricultural Policy and direct payment component implementation in Romania

• Dr. Cristu CHIRFOT – counsellor

Sofia, 12 05 2010

Departament for European Afaiers – Government of Romania Twinning BG 2007/AG/09/UE TWL

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Overview of Romanian agriculture

Share of agriculture, forestry and aquaculture in GDP is 9,7%; Labor force 34,4% - one third of the total employed population works in agriculture domain;

• Romania has a wide range of soil types with high

potential, about 60% of arable land having a good and medium fertility. Total country’s territory is 23, 4 million ha The total agricultural area in Romania is 14,7 mil. ha (61,7%) of the country’s territory Total arable land - 9,4 mil. ha , 67.6 % of the total agricultural area

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FARM STRUCTURE IN ROMANIA

Farm distribution is highly dualistic

Legal status Total agricultur al units Number of units utilizing agricultural area Utilized Agricultur al Area

• UUA (ha)

Average of utilized agricultural area – UUA (ha) Per unit (UUA) Total 4.256.152 4.121.247 13.906.701, 3 3,4 Individual farmers 4.237.889 4.103.404 9.102.018,2 2,2 Legal persons 18.263 17.843 4.804.683,1 269,3

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In February 2005: European Commission has launched Lisbon Strategy The strategy was ment to offer solutions for the European Unions need regarding the imbold for economic growth, creation

• f

new jobs and increse

• f

competitivity due development of global market. The strategy was focused on providing fair and better living standards by

• ffering

a sustainable natural and social environment Have been established basic principles regarding PAC contribution to the strategy, thus, increasing economic performance, competitiviness in concordance with sustainable and judicios use of natural resources, a sound management.

Common Agricultural Policy – implementation in Romania

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CAP actors

Farmers Tax payers Consumers Stake-holders administration and farmers organizations Civil society (NGOs, Copa Cogeca) ... WTO OECD/FAO Traders ACP countries- (Statele din zona Africa, Caraibe şi Pacific) LDCs MERCOSUR - (State Sud şi Central Americane) CAN - (Comunitatea Andină) BRIPS countyries ...

UE Global

Common Agricultural Policy European Enlargment / Health Check Challanges

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CAP objectives for which Romania pleeds as defined in

• Art. 39 of the Treaty on the Functioning European Union
• to increase agricultural productivity by promoting technical progress and

by ensuring the rational development of agricultural production and the

• ptimum utilisation of the factors of production, in particular labour;
• thus to ensure a fair standard of living for the agricultural community, in

particular by increasing the individual earnings of persons engaged in agriculture;

• to stabilise markets
• to assure the availability of supplies ;
• to ensure that supplies reach consumers at reasonable prices.

In working out the common agricultural policy and the special methods for its application, account shall be taken of: (a) the particular nature of agricultural activity, which results from the social structure of agriculture and from structural and natural disparities between the various agricultural regions;

7 MTR 2002-2003 AGENDA 2000

In 2003 – starts the process

• f decoupling introduction
• f SPS, and for NMS the

simplified SAPS. Reform of Comon market

• rganizations, 2005-2007:

sugar, wine, fruts and veg. A single common

• rganization by published

Reg 1234/2007

Rural development Regulation of 2005 Enlarged EU EU 25 EU 27 EU …+3 International trade relations WTO - Doha Round WHO/FAO – concerning signals Development of global markets, increase of competition FEADR Financial Perspective 2007-2013 EU – Council from October 2002 Enforced finanvial framedue to enlarged EU

CAP Context

Structural Funds Change CAP reform – “Health check” November 2007- 28 november 2008 (Reg 73/2009)

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European Agricultural Model in EU

The Model is based on a multifunctional egriculture, competitive, sustainable, social and covering all teritory.

Environment integrity, sound use of resources, increase afforestation (joudicious water and soil management fertilizersa and oils, alternative energy for irigations pumps and ilumination), big projects EERP from 2009. Definition of public goods Rural society development – essential element Food security whithin EU and contribution as global actor Economic viability – market orientation and agriculture competitiviness by direct payments support Agricultural policy – to be based on the sinergy between agriculture and rural development policy, as premises for social and economical development of rural areas

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Results for Romania Health Check of CAP

• Prolong possibility to apply SAPS until end 2013. Romania obtained the possibility to top up direct

payment with 50% rather than 30% from the level of direct payments applied in Community in 2004, from the national budget

• The CNDP on area is increased with approx. 40 euro, than the classical top up of 30%. The provision is

available for 2012-2012, afterwards the top up is not justified any longer.

• Under Council Regulation (EC) No 2012/2006, Member States applying the SAPS will have to implement

the SMRs as part of cross-compliance as from 2009. Experience with the other Member States has shown that setting up this element of cross-compliance was facilitated by a 3-year phasing-in period. A proposal is envisaged to apply the same 3-year phasing-in period for the Member States applying the SAPS – this period would start in 2009 for all except Bulgaria and Romania, for whom it would start in 2012.

• Animal welfare shall be introduced into the scope of cross compliance as of 1 of January 2016 for the

dead line of implementing the mandatory cross compliance request for farm animal welfare.

• Art. 68 Specific Support – granting from 2010 the sensibles sectors, as follows, 22,47 thou euro support

scheme to milk sector milion euro according to Article 68(1)(b), and 3,098 thou euro for granting specific support schemes for improving the quality in the organic farming sector in accordance with Article 68(1)(a)(ii)

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Future of CAP

• Romania will support the maintaining of the present

CAP structure, based on two pillars (First pillar - direct payments and market mechanisms and Second pillar – rural development policy), but also with a sufficient strong First pillar able to assure a decent and equitable living standard for farmers, to avoid the abandonment of agricultural production, lands, rural migration in order to maintain the specificity of local traditions (that bring added value to products) and agricultural works.

• Romania also considers as a necessity the equitable

distribution of direct payments at European level by increasing the financial allotment for the new member states, in order for this to lead to the increase in productivity and competitiveness of the European agriculture as a whole.

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CAP framework - 2007-2013 Direct payments

And Market measures

PILLAR I Politica de dezvoltare rurală PILLAR II

Food supplier and economic function. Environment function Rurality and social function

Agriculture, sustainable rural areas and natural resources FEGA FEADR

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Institutions involved in CAP implementation

• Ministry of Agriculture, Forests and Rural Development
• MAFRD
• Paying and Intervention Agency for Agriculture - PIAA
• Paying Agency for Rural Development and Fisheries -

PARDF

• Competent Authority
• Coordination body of the paying agencies

Competent Authority (MAFRD) PARDF PIAA Coordination Body (MAFRD)

UE

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FIRST PILLAR – DIRECT PAYMENTS POLICY SAPS implementation

• 1. Single area payment scheme (SAPS)

Romania decided to implement SAPS from 2007, after HC of CAP until 1 of January 2013 Legal basis: R 1782/2003, R 1973/2004, Reg. 796/2004, after HC CAP R 73/2009, R 1120/2009. PIAA implements support measures for farmers financed from European Agricultural Guarantee Fund – EAGF as direct payment under SAPS and support measures financed from national budget as Complementary National Direct Payments – CNDP, other direct payments and state aids SAPS starts in 2007 – phasing in according art. 143a of 1782/2003, as follows:

• Community as constituted on 30 April 2004:
• — 25 % in 2007,
• — 30 % in 2008,
• — 35 % in 2009,
• — 40 % in 2010,
• — 50 % in 2011,
• — 60 % in 2012,
• — 70 % in 2013,
• — 80 % in 2014,
• — 90 % in 2015,
• — 100 % as from 2016.
• 2. CNDP for vegetal and animal breeders sectors are authorized by the European

Commission on annual basis.

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Others schemes of direct payments granted from pillar I of CAP

• 3. Separate sugar payment – decoupled support

Legal basis of payment (in accordance with the art. 143 ba of Council Regulation 1782/2003 or art.126 (1) of EC Reg. 73/2009, and art.17a

• f Commission Regulation 2025/2006)

Financial ceilings of 1.930 thou € in 2007, 2.781 thou € in 2008, 3.54 thou € in 2009 and of 4,041 thou € in 2010.

• The sugar beet farmers’ federation and the Ministry of agriculture

decided to grant the aid on hectare, choosing as a reference the average number of hectares under sugar beet used for production of sugar covered by delivery contracts in the marketing year 2007/2008 in accordance with the art. 1 of Council Regulation (EC) 2011/2006.

• The aim of the support is to ensure the financial means for good farming

practice, and the farmer ability to respect the proper crop technology for a better profit and equitable income results. Always was took into account the quota ceilings not to be overshot by the farmers. This year the surface of sugar beet for sugar production is reduced according to the Commission Regulation by 13.5% (national sugar quota initially being of 109164 sugar tons) resulting a quota of 94,426 sugar tons.

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Others schemes of direct payments granted from Pillar I of CAP

• 5. Transitional scheme for tomatoes for processing –Until end 2011:

50% of envelope for tomatoes intended for processing Art. 143 bc (1) of R 1782/2003 and now art. 128(1) of R 73/2009.

• Romania as a SPAS country has decided on 1 November 2007, to retain,

until 31 December 2011, up to 50 % of the component of national ceilings referred to in Article 41 corresponding to tomatoes falling within CN code 0702 00 00. The 50 % amount retained and granted yearly is 869 000 Euro, for almost 1000 farmers. Is granted to farmers with a delivery contract signed until 15 of July with a first processor approved by the Ministry of agriculture and rural development, he has to deliver at least 8 tones of tomatoes falling into code CN code 0702 00 00, for processing .

• 6. Energy crops scheme for years 2007-2009 in quantum of 45 €/ha. In

Romania the energy crops for bio diesel and bio ethanol, where: rapes seeds, sun flower, soybeans and corn, the area paid in first year of application was 88 025 ha, then in 2008 it was 32 683 ha and in 2009 the determined area is 69 509 ha .

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The new CAP sound ellaboration, with no doubt, is a important challange, but which will assure better premises for farmers rural society, and for the economic growth. Many thanks.