FUTRUE of the STATE AID IN AGRICULTURE

Christine Meisinger

EUROPEAN COMMISSION

January 2006

Future of state aid rules – in 2006

In 2006, adaptation of Community Guidelines for State Aid in the

Agricultural Sector (OJ 28/2000) State aid exemption Regulation 1/2004 (agricultural

SME) De minimis Regulation 1860/2004 in the agricultural

and fishery sector Community Guidelines for State aid for advertising of

agricultural products (OJ C 252/2001) Community Guidelines for State aid concerning TSE

tests, fallen stock and slaughterhouse waste (OJ C 324/2002)

Future of state aid rules - reasons

Adaptation of these instruments to the Regulation EC 1698/2005 on support for RD by the EAFRD

Lisbon agenda: “less + better targeted state aid”

Simplification of the legal texts End 2005: first drafts in consultation 2006: discussion and conclusion entering into force: 1.1.2007

Lisbon agenda

Objective setting according to Lisbon agenda: General reduction of state aid More horizontal aid and less sectoral aid Aid should contribution to growth and

employment

Horizontal objectives

State aid to the agricultural sector - contribution to horizontal objectives such as

research and development environmental protection services (of common economic interest) regional development Vocational training, education Rescue and restructuring actions

Sectoral objectives

Sectoral aid to agriculture: Economic impact to the sub-sectors

Guidelines derived from the new RD Regulation (1698/2005)

human resources physical investments and promotion of innovations environment and landscape Diversification

Management of risk- and crises

Simplification

Considering the abolitions of certain requirements and criteria e.g. market outlet test for investment aid, occupational skills of farmers meeting environmental and animal welfare

standards tender procedures for service provider

Replacement of „viable“ enterprises by the exclusion of aid to companies in difficulties

less and better targeted aid

What aid intensity is necessary to get the best effects?

Sound environmental management e.g. aid for irrigation equipment, if it leads to significant water savings

Better risk and crisis management e.g. aid compensation for disease and bad weather losses, only if farmer has taken out an insurance

Avoiding that big aid amounts go to large scale companies e.g. setting of an upper limit for investment aid for a farmer over a certain periode of years

Legislative procedure

draft regulations/guidelines February: block exemptions March: Community Guidelines for State Aid in the

Agricultural Sector drafts will be sent to MS and discussed in the

Advisory Committee incorporation of requested changes into the drafts re-consultation of the Advisory Committee final text adopted by the College in the second half of

2006

Thank you for your attention!