Corrigendum to Council Regulation (EC) No 72/2009 of 19 January 2009 on modifications to the common agricultural policy by amending Regulations (EC) No 247/2006, (EC) No 320/2006, (EC) No 1405/2006, (EC) No 1234/2007, (EC) No 3/2008 and (EC) No 479/2008 and repealing Regulations (EEC) No 1883/78, (EEC) No 1254/89, (EEC) No 2247/89, (EEC) No 2055/93, (EC) No 1868/94, (EC) No 2596/97, (EC) No 1182/2005 and (EC) No 315/2007

Article 4 (Amendments to Regulation (EC) No 1234/2007), the following point is to be inserted:

Point A.II of Annex XI shall be amended as follows: the title shall be replaced by the following: “Apportionment of the maximum guaranteed quantity for each marketing year from 2009/2010 to 2011/2012 for short flax and hemp fibre among the Member States referred to in Article 94(1a)”; point (b) shall be replaced by the following: (b) 5 000 tonnes to be apportioned in national guaranteed quantities for each marketing year from 2009/2010 to 2011/2012 among Denmark, Ireland, Greece, Italy and Luxembourg. Such apportionment shall be determined on the basis of the areas which were the subject of one of the contracts or commitments as referred to in Article 91(1).

The European Parliament adopted, by 383 votes to 256 with 37 abstentions, a legislative resolution, amending the proposal for a Council regulation on modifications to the common agricultural policy by amending Regulations (EC) No 320/2006, (EC) No 1234/2007, (EC) No 3/2008 and (EC) No […]/2008. The report had been tabled for consideration in plenary by Luis Manuel CAPOULAS SANTOS (PES, PT), on behalf of the Committee on Agriculture and Rural Development

The main amendments – adopted in the framework of the consultation procedure – are as follows:

Cereals and rice : the cereals and rice intervention should not be changed but maintained as a safety net. In respect of cereals, Parliament stated that intervention should only take place during the last three months of the marketing year.

Pigmeat: the abolition of intervention for rice and pigmeat may safely be carried out in 2009.

Butter: Members stressed that butter is the most sensitive surplus product, and the one for which the maintenance of intervention tools is the most important. Accordingly, they want to improve on the Commission's proposal by maintaining the compulsory nature of private storage aid, and butter disposal aids, while accepting simplification of these schemes as they are extremely complicated to manage.

Cheese: Parliament felt it necessary to maintain Article 36 of Regulation No 1234/2007 granting private storage aid for cheese as price and stock trends for cheeses covered by Article 31(1)(e) show signs of a serious market imbalance, which could be reduced or smoothed out by seasonal storage.

Animal diseases : the Commission wanted to delete Article 44 of Regulation (EC) No 1234/2007 and justified this deletion by introducing a mutual fund in the event of animal or plant diseases. Members feel it necessary to maintain Article 44 as a precautionary measure, since it has been effective in devastating crisis situations, such as the outbreak of foot and mouth disease in 2001.

Milk sector : Members introduced a new clause stating that Member States may apply for temporary quota increases based on underutilisation of milk quota in other Member States, on the condition that they can prove that their dairy market is not likely to enjoy a soft landing under the basic rules. To this end the Commission shall calculate every year the underutilisation of milk quotas. The Commission shall assess potential applications by Member States for extra quota increases and present a proposal for the temporary handing out of production quotas at the beginning of each marketing year. These temporary quotas in a given marketing year shall always remain below the level of underutilisation of quotas in the marketing year before the given marketing year. All the revenue deriving from the payment of the additional levy to the Union and the appropriations saved from the agricultural budget should be paid into the milk fund so that flanking measures can be implemented in the milk sector. The Commission must submit before 31 December 2010 a report to the European Parliament and Council on the state of the milk market. The report shall also analyse the effectiveness of the Member States' management systems in relation to the liberalisation of the quota scheme. Where appropriate the report shall be accompanied by suitable proposals.

Flax: Members state that the amount of processing aid shall be fixed:(a) for long flax fibre: EUR 160 for the 2009/10 to 2012/13 marketing years;(b) for short flax fibre and hemp fibre containing not more than 7.5% impurities and shives: EUR 90 per tonne for the 2009/10 to 2012/13 marketing years. However, the Member State may, with reference to traditional outlets, also decide to grant aid: (a) for short flax fibre containing a percentage of impurities and shives of between 7.5% and 15%; (b) for hemp fibre containing a percentage of impurities and shives of between 7.5% and 25%. A maximum guaranteed quantity of 147 265 tonnes for each of the marketing years 2009/10 to 2012/13 shall be established for short flax fibre and hemp fibre in respect of which aid may be granted.

Producer groups and interbranch organisations : Member States may also recognise as producer organisations applicant groups within the meaning of Article 5(1) of Council Regulation (EC) No 510/2006 on the protection of geographical indications and designations of origin for agricultural products and foodstuffs. Interbranch organisations may act to promote, inter alia, preventive risk management, research and development, information on, and promotion of, products and branches, market analysis and information, and measures of contractualisation.

Sugar: Members propose to extend until 2013/14 the current Community aid scheme for producers of sugar-beet and sugar-cane, for those Member States that have granted restructuring aid under Article 3 of Regulation (EC) No 320/2006 for at least 50 % of the sugar quota laid down on 20 February 2006 in Annex III to Regulation (EC) No 318/2006, without the upper limit of five years, to deal with the needs for adjustment following restructuring.

Outermost regions : an amendment is made to Regulation (EC) No 247/2006, so that it shall be permitted to market from the Azores to the rest of the Community the following maximum quantities of sugar (code NC 1701) during the following years: 2008: 3 000 tonnes ; 2009: 2 285 tonnes ; 2010: 1 570 tonnes ; 2011: 855 tonnes.

The Committee on Agriculture and Rural Development adopted a report drafted by Luis Manuel CAPOULAS SANTOS (PES, PT), and amended the proposal for a Council regulation on modifications to the common agricultural policy by amending Regulations (EC) No 320/2006, (EC) No 1234/2007, (EC) No 3/2008 and (EC) No […]/2008.

The main amendments – adopted in the framework of the consultation procedure – are as follows:

Cereals and rice : the cereals and rice intervention should not be changed but maintained as a safety net.

Butter: Members stressed that butter is the most sensitive surplus product, and the one for which the maintenance of intervention tools is the most important. Accordingly, they want to improve on the Commission's proposal by maintaining the compulsory nature of private storage aid, and butter disposal aids, while accepting simplification of these schemes as they are extremely complicated to manage.

Cheese: the committee feel it necessary to maintain Article 36 of Regulation No 1234/2007 granting private storage aid for cheese as price and stock trends for cheeses covered by Article 31(1)(e) show signs of a serious market imbalance, which could be reduced or smoothed out by seasonal storage.

Animal diseases : the Commission wanted to delete Article 44 of Regulation (EC) No 1234/2007 and justified this deletion by introducing a mutual fund in the event of animal or plant diseases. Members feel it necessary to maintain Article 44 as a precautionary measure, since it has been effective in devastating crisis situations, such as the outbreak of foot and mouth disease in 2001.

Milk sector : Members introduced a new clause stating that Member States may apply for temporary quota increases based on underutilisation of milk quota in other Member States, on the condition that they can prove that their dairy market is not likely to enjoy a soft landing under the basic rules. All the revenue deriving from the payment of the additional levy to the Union and the appropriations saved from the agricultural budget should be paid into the milk fund so that flanking measures can be implemented in the milk sector. Before 31 December 2010 to the European Parliament and Council on the state of the milk market. The report must also analyse the effectiveness of the Member States' management systems in relation to the liberalisation of the quota scheme. Where appropriate the report shall be accompanied by suitable proposals .

Flax: Members state that the amount of processing aid shall be fixed: (a) for long flax fibre: EUR 160 for the 2009/10 to 2012/13 marketing years; (b) for short flax fibre and hemp fibre containing not more than 7.5% impurities and shives: EUR 90 per tonne for the 2009/10 to 2012/13 marketing years. However, the Member State may, with reference to traditional outlets, also decide to grant aid: (a) for short flax fibre containing a percentage of impurities and shives of between 7.5% and 15%; (b) for hemp fibre containing a percentage of impurities and shives of between 7.5% and 25% . A maximum guaranteed quantity of 147 265 tonnes for each of the marketing years 2009/10 to 2012/13 shall be established for short flax fibre and hemp fibre in respect of which aid may be granted.

Aid for the purchase of cream, butter and concentrated butter at reduced prices : an amendment stipulates that under conditions to be determined by the Commission, when surpluses of milk products build up or are likely to occur, the Commission may decide that aid shall be granted to enable cream, butter and concentrated butter to be purchased at reduced prices by: (a) manufactures of pastry products and ice-cream; (b) manufacturers of other foodstuffs to be determined by the Commission.

Interbranch organisations : interbranch organisations may act to promote, inter alia, preventive risk management, research and development, information on, and promotion of, products and branches, market analysis and information, and measures of contractualisation.

Sugar: Members propose to extend until 2013/14 the current Community aid scheme for producers of sugar-beet and sugar-cane, for those Member States that have granted restructuring aid under Article 3 of Regulation (EC) No 320/2006 for at least 50 % of the sugar quota laid down on 20 February 2006 in Annex III to Regulation (EC) No 318/2006, without the upper limit of five years, to deal with the needs for adjustment following restructuring.

The Council held a policy debate on the Health Check of the CAP, as reformed in 2003-2004. (See Council doc. 9656/08 ). The debate was structured by a Presidency questionnaire relating to 4 important aspects of the proposal: modulation, market management mechanisms, dairy quotas and cross-compliance.

Regarding the increase in the rate of compulsory modulation proposed by the Commission, several delegations wanted to continue exploring the other options for the funding needed to meet the new challenges. Some Member States reiterated their preference for keeping a strong Pillar I, while others considered that Pillar II already took on board the new challenges. The co-financing of funds derived from modulation also raises questions from a number of Member States.

The discussion on market management mechanisms showed that maintaining a real safety net was a common objective. Nevertheless, a number of delegations expressed doubts regarding the abolition of intervention and the mechanism of buying-in under a tendering procedure.

Several delegations wished to maintain aid for private storage in the dairy sector, as well as intervention for pigmeat.

The "soft landing" principle for the phasing out of milk quotas is accepted by a majority of delegations, but on the other hand there is not yet any consensus on how to achieve it.

A number of delegations thus considered the level of the proposed annual increases (5 times 1 %) inadequate. The report envisaging a reassessment of the situation by the end of June 2011 was welcomed by some Member States, while others thought an immediate decision should be taken. The concern to provide for suitable accompanying measures was expressed by several Member States, especially in vulnerable areas.

All delegations welcomed the effort made to simplify the cross-compliance rules and pressed for the process to continue, making the rules more transparent both for operators and for the authorities monitoring their application.

A large number of delegations felt that good agricultural and environmental practices (GAEP) should remain indicative, in order to take account of the specific situations in the individual Member States.

The Council instructed the preparatory bodies to continue their technical and political proceedings with a view to reaching agreement on this matter in November 2008.

The Council held a policy debate on the proposed legislative package for the "Health Check" of the CAP since the 2003 reform. The debate focused on two questions drawn up by the Presidency, one on the proposal for further decoupling, and the other on the proposal for specific support measures under a revised version of Article 69 of Regulation 1782/2003.

- Most delegations welcomed the proposal for further decoupling , which is in the spirit of the 2003 reform, In their opinion, decoupling provides the necessary impetus to allow farmers to respond to market signals. However, several delegations considered that for certain vulnerable sectors coupled or partial coupled payments may still be necessary at least over a transitional period. In this context they highlighted the risks of land abandonment, loss of biodiversity and/or serious irreversible social impacts. With regard to the specific support provided for under a " revised Article 69 " (new Article 68 in the proposal), several delegations reiterated their request for this to be simpler and more flexible so that each member state can choose how to target the support appropriately. Other delegations underlined the importance of ensuring that the measures would not distort trade or competition or reintroduce coupled payments and that to this end the measures envisaged should only be transitional.

- Delegations also had concerns about the proposed restrictions on the financing of this measure. Some delegations considered that there were other possible financing solutions such as using unused funds earmarked for direct payments, reclassifying some of the measures under rural development, and increasing the ceilings imposed). Some delegations also criticised the proposal on mutual funds to provide financial compensation to farmers as a result of animal or plant disease crises and considered that the current text set out in Article 44 of the Single CMO Regulation (Regulation 1234/2007) was a more satisfactory tool.

The future French Presidency indicated its intention to take forward its preparatory work, with the aim of reaching political agreement in November. To that end, it will table policy debates Council level on this item, in July and September 2008.

PURPOSE: to modify the common agricultural policy by amending, inter alia, Regulations (EC) No 320/2006, (EC) No 1234/2007, and (EC) No 3/2008.

PROPOSED ACT: Council Regulation.

CONTENT: this proposal follows the Commission Communication "Preparing the Health Check of the CAP reform" of 20 November 2007. It should be noted that this proposal is closely linked to the following procedures: CNS/2008/0103 , CNS/2004/0105 , and CNS/2008/0106 .

It is recalled that in recent months, there has been a sharp rise in the price of many agricultural commodities to exceptional levels. Their steady increase in 2006 and 2007 had already supported the conclusion that any remaining supply controls of the CAP (namely, dairy quotas and set-aside) should be removed. The Commission proposes further to break the link between direct payments and production and thus allow farmers to follow market signals to the greatest possible extent. Among a range of measures, the proposals call for the abolition of arable set-aside and a gradual increase in milk quotas before they are abolished in 2015, and a reduction in market intervention. These changes will free farmers from unnecessary restrictions and let them maximise their production potential. The Commission also proposes an increase in modulation, whereby direct payments to farmers are reduced and the money is transferred to the Rural Development Fund. This will allow a better response to the new challenges and opportunities faced by European agriculture, including climate change, the need for better water management, and the protection of biodiversity.

The main points of the proposals are as follows:

Abolition of set-aside : the Commission proposes abolishing the requirement for arable farmers to leave 10 percent of their land fallow. This will allow them to maximise their production potential. However, under the proposals for cross compliance and Rural Development, Member States are given the appropriate tools to ensure that the present environmental benefits of set aside can be retained.

Phasing out milk quotas: milk quotas will be phased out by April 2015. To ensure a 'soft landing', the Commission proposes five annual quota increases of one percent between 2009/10 and 2013/14.

Decoupling of support : the CAP reform "decoupled" direct aid to farmers i.e. payments were no longer linked to the production of a specific product. However, some Member States chose to maintain some "coupled" – i.e. production-linked - payments. The Commission now proposes to remove the remaining coupled payments and shift them to the Single Payment Scheme, with the exception of suckler cow, goat and sheep premia, where Member States may maintain current levels of coupled support (as it exists currently) in order to sustain economic activity in regions where other economic alternatives are few or do not exist.

Moving away from historical payments: farmers in some Member States receive aid based on what they received in a reference period. In others, payments are on a regional, per hectare basis. As time moves on, the historical model becomes harder to justify, so the Commission is proposing to allow Member States to move to a flatter rate system.

Extending SAPS : ten of the 12 newest EU members apply the simplified Single Area Payment Scheme. This is supposed to expire in 2010, but the Commission proposes extending it to 2013.

Cross Compliance : aid to farmers is linked to the respect of environmental, animal welfare and food quality standards. Farmers who do not respect the rules face cuts in their support. This Cross Compliance will be simplified, by withdrawing standards that are not relevant or linked to farmer responsibility. In particular, the proposals aim at withdrawing certain Statutory Mandatory Requirements that are considered not relevant or linked to farmer responsibility, and to introduce into Good Agricultural Environmental Conditions requirements that retain the environmental benefits from set aside and address issues of water management.

Assistance to sectors with special problems : currently, Member States may retain by sector 10 percent of their national budget ceilings for direct payments for environmental measures or improving quality and marketing of products in that sector. The Commission wants to make this tool more flexible. The money would no longer have to be used in the same sector; it could be used to help farmers producing milk, beef, goat and sheep meat in disadvantaged regions; it could be used to support risk management measures such as insurance schemes for natural disasters and mutual funds for animal diseases; and countries operating the SAPS system would become eligible for the scheme.

Shifting money from direct aid to Rural Development : currently, all farmers receiving more than EUR 5,000 in direct aid have their payments reduced by 5 percent and the money is transferred into the Rural Development budget. The Commission proposes to increase this rate to 13 percent by 2012. Additional cuts would be made for bigger farms (an extra 3 percent for farms receiving more than EUR 100,000 a year, 6 percent for those receiving more than EUR 200,000 and 9 percent for those receiving more than EUR 300,000). The funding obtained this way could be used by Member States to reinforce programmes in the fields of climate change, renewable energy, water management and biodiversity.

Intervention mechanisms : market supply measures should not slow farmers' ability to respond to market signals. The Commission proposes to abolish intervention for durum wheat, rice and pig meat. For feed grains, intervention will be set at zero. For bread wheat, butter and skimmed milk powder, tendering will be introduced.

Payment limitations : 46.6% of the total direct payment beneficiaries in the EU-25 receive less than EUR 500. This number essentially includes small farmers, but it also includes in certain Member States recipients whose value of payment is below the administrative cost of managing it. In order to simplify and reduce the costs of administration of direct payments, it is proposed that Member States shall either apply a minimum amount of payments of EUR 250 or apply a minimum size of eligible area per holding of at least 1 hectare or apply both. Nevertheless, special provision is made for those Member States whose agricultural sector is mainly composed of very small holdings.

Other measures : a series of small support schemes will be decoupled and shifted to the SPS. For hemp, dried fodder, protein crops and nuts this would happen immediately. For rice, starch potatoes and long fibre flax, there would be a transitional period. The Commission is also proposing to abolish the energy crop premium.

Budgetary impact: proposals for modulation in the Single Payment Scheme and Rural Development are neutral with the respect to the EU budget, as it is a simple compulsory transfer between the second and the first pillar of the CAP. For national budgets the increased modulation could lead to additional national expenditure in view of the necessary co-financing needed in Rural Development. This would mean that some Member States have the possibility of returning to the (higher) level of national expenditure originally provided for before the decision on the Financial Framework 2007–2013. As regards the transfer of measures into the Single Payment Scheme there could be moderate financial consequences for the EU-budget, but most of the transfers are also budgetary neutral.

The expiry of the dairy quota will bring additional pressure on butter under all options. These proposals, by initiating a gradual process of a quota phasing-out, are more beneficial for the sector and for the long-term developments of the CAP. However, the need for some limited additional expenditure on butter exports cannot be excluded. Whether this materialises will depend on factors that are at this stage unknown (Doha Development Agenda, world market developments). Therefore the present proposals include a review clause in 2012 that would allow developments in dairy markets to be assessed to determine if additional measures will be needed to avoid any increase in the budget. Some savings are foreseen as a consequence of abolition of existing measures. However, the biggest budgetary effect of the soft-landing on the milk quota is a loss of budgetary revenue due to the decrease in milk levy.