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Press Release
Political agreement on CAP financing

Date of release : 30-05-2005

Policy area : Agriculture and Fisheries Agriculture and Fisheries

Event : Agriculture and Fisheries Council

The EU Agriculture Ministers reached political agreement on financing the common agricultural policy (CAP) for the period 2007-2013 by qualified majority during the "Agriculture and Fisheries" Council held in Brussels on 30 May 2005.

Under the chairmanship of the Minister of Agriculture, Viticulture and Rural Development, Fernand Boden, the "Agriculture and Fisheries" Council put the finishing touches to the regulation forming the legal framework for Community spending on CAP.

"In a politically sensitive context, the Presidency has succeeded in finding a good solution", Fernand Boden declared after the Council meeting. "Thanks to the excellent work done in advance we were able to put forward a compromise which could not be easily rejected. We were able to convince the Council that this instrument will improve CAP financing and make it easier and more transparent. We have attached a declaration to the regulation allowing technical changes to be made after the decision on financial perspectives, should this be necessary, without changing the essential nature of this agreement".

"The fact that this agreement was concluded almost unanimously is important and shows that the European Union is capable of taking difficult decisions. I am therefore very hopeful that we will be able to achieve political agreement on support for rural development at the June Council", he added.

The direct aid payments and market support will be financed through the European Agricultural Guarantee Fund (EAGF), and programmes supporting rural development will be financed through the European Agricultural Fund for Rural Development (EAFRD).

From a technical perspective, the Presidency compromise provides for one central payment agency per fund in the Member States, which is to liaise with the European Commission and, should any subordinate payment agencies be involved, act as their coordinator.

With regard to auditing accounts for EAFRD expenses, a period of 24 months has been decided on for financial corrections. This would allow the Commission to backdate by 24 months its refusal to cofinance any expenses it does not consider valid.

The Commission and the Member States will bear equal financial responsibility for the sums spent under EAFRD that must be repaid in the event of irregularities and negligence being detected. Where the sums involved exceed EUR 1 million, then assignment of financial responsibility will be analysed on a case-by-case basis.

As regards powers to intervene should budget ceilings be exceeded, the regulation adopted stipulates that if the annual limit for finance is likely to be exceeded, the Commission can and must take those measures which are appropriate and available to it to adjust expenses. If these measures prove insufficient, then the Commission must advise the Council on additional measures which could be taken within the shortest possible time.

The Ministers also discussed the communication presented by the Commissioner for Agriculture and Rural Development, Mariann Fischer Boel, on risk and crisis management in agriculture.

With regard to the various tools suggested in the communication, Fernand Boden felt that, "the introduction of new tools and the associated rules for their financing must not threaten the instruments currently used, often very successfully, at national level, such as insurance against disasters."

"The new measures must fully comply with the World Trade Organisation’s green box criteria", he continued.

He added that, "if public financing is vital, particularly with regard to instituting and successfully implementing new tools, so are joint responsibility and a financial contribution by farmers."

The Presidency welcomed the support given by many Member States to the Swedish delegation’s request that the Commission decide as quickly as possible on the implementation of measures to stop the import of fur and skins from animals subjected to acute suffering.

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This page was last modified on : 31-05-2005

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