REPORT on the proposal for a regulation of the European Parliament and of the Council amending Council regulation (EC) N° 1234/2007 as regards the regime of the single payment scheme and support to vine-growers

25.6.2012 - (COM(2011)0631 – C7‑0338/2011 – 2011/0285(COD)) - ***I

Committee on Agriculture and Rural Development
Rapporteur: Herbert Dorfmann

Amendments

• 001-010 (PDF - 103 KB)
• 001-010 (DOC - 63 KB)
• 011-011 (PDF - 124 KB)
• 011-011 (DOC - 75 KB)

DRAFT EUROPEAN PARLIAMENT LEGISLATIVE RESOLUTION

on the proposal for a regulation of the European Parliament and of the Council amending Council regulation (EC) N° 1234/2007 as regards the regime of the single payment scheme and support to vine-growers

(COM(2011)0631 – C7‑0338/2011 – 2011/0285(COD))

(Ordinary legislative procedure: first reading)

The European Parliament,

–   having regard to the Commission proposal to Parliament and the Council (COM(2011) 0631),

–   having regard to Article 294(2) and Article 43(2) of the Treaty on the Functioning of the European Union, pursuant to which the Commission submitted the proposal to Parliament (C7‑0338/2011),

–   having regard to the opinion of the Committee on Legal Affairs on the proposed legal basis,

–   having regard to Article 294(3) of the Treaty on the Functioning of the European Union,

–   having regard to the opinion of the European Economic and Social Committee of 25 April 2012[1],

–   having regard to the opinion of the Committee of the Regions of 4 May 2012[2],

–   having regard to the opinion of the European Data Protection Supervisor of 14 December 2011[3],

–   having regard to Rules 55 and 37 of its Rules of Procedure,

–   having regard to the report of the Committee on Agriculture and Rural Development (A7-0203/2012),

1.  Adopts its position at first reading hereinafter set out;

2.  Calls on the Commission to refer the matter to Parliament again if it intends to amend its proposal substantially or replace it with another text;

3.  Instructs its President to forward its position to the Council, the Commission and the national parliaments.

Amendment  1 Proposal for a regulation Citation 1
Text proposed by the Commission	Amendment
Having regard to the Treaty on the Functioning of the European Union, and in particular Article 43(2) thereof,	Having regard to the Treaty on the Functioning of the European Union, and in particular the first subparagraph of Article 42 and Article 43(2) thereof,
Amendment  2 Proposal for a regulation Recital 1
Text proposed by the Commission	Amendment
(1) Article 103o of Council Regulation (EC) No 1234/2007 of 22 September 2007 establishing a common organisation of agricultural markets and on specific provisions for certain agricultural products (Single CMO Regulation) provides for a possibility for the Member States to grant decoupled aid under the Single Payment Scheme to vine-growers. Several Member States have used this possibility which shows the utility of that measure.	(1) Article 103o of Council Regulation (EC) No 1234/2007 of 22 September 2007 establishing a common organisation of agricultural markets and on specific provisions for certain agricultural products (Single CMO Regulation) provides for a possibility for the Member States to grant decoupled aid under the Single Payment Scheme to vine-growers. Several Member States have used this possibility.
Amendment  3 Proposal for a regulation Recital 2
Text proposed by the Commission	Amendment
(2) However, the fact that Member States may modify support programmes once a year, including the part of the Union budget allocated to the Single Payment Scheme, and the fact that support programmes have a five-year duration whilst payment entitlements under the Single Payment Scheme are granted for an indeterminate period of time, have generated administrative and budgetary burdens, in particular as regards the monitoring of funds allocated to the Single Payment Scheme.	(2) However, the fact that Member States may modify transfers to the Single Payment Scheme from the support programmes once a year, and the fact that support programmes have a five-year duration whilst payment entitlements that give rise to direct payments are granted for an indeterminate period of time, can generate administrative and budgetary burdens.
Amendment  4 Proposal for a regulation Recital 3
Text proposed by the Commission	Amendment
(3) In order to simplify the management of this measure, it is appropriate to grant it a definitive character, taking into account that it should continue to apply through the Single Payment Scheme.	(3) In order to simplify the management of the Single Payment Scheme and to ensure that it is consistent with the objectives of the rules for direct support schemes for farmers, it is appropriate to amend it so that it includes the possibility for Member States to definitively decrease the funds allocated to the support programmes in the wine sector and thereby increase the national ceilings for direct payments.
Amendment  5 Proposal for a regulation Recital 3 a (new)
Text proposed by the Commission	Amendment
	(3a) It is appropriate to allow Member States to continue applying the support provided for in Article 103o of Regulation (EC) No 1234/2007.
Amendment  6 Proposal for a regulation Article 1 – paragraph -1 (new) Regulation (EC) No 1234/2007 Article 103n - paragraph -1 (new)
Text proposed by the Commission Amendment   (-1) In Article 103n of Regulation (EC) No 1234/2007, the following paragraph is added:   "-1. By 1 August 2013, Member States may decide to reduce, with effect from 2015, the amount available for the support programmes referred to in Annex Xb in order to increase their national ceilings for direct payments referred to in Article 40 of Regulation (EC) No 73/2009.   The amount resulting from the reduction referred to in the first paragraph shall remain in the national ceilings for direct payments referred to in Article 40 of Regulation (EC) No 73/2009 on a permanent basis and shall no longer be available for the measures listed in Articles 103p to 103y."
Amendment  7 Proposal for a regulation Article 1 – paragraph 1 Regulation (EC) No 1234/2007 Article 103o – paragraph 1 - first subparagraph
Text proposed by the Commission Amendment 1. Member States may decide by 1 December 2012 to provide support to vine-growers from 2014 by allocating payment entitlements within the meaning of Chapter 1 of Title III of Regulation (EC) No 73/2009. 1. Member States may decide by 1 December 2012 to provide support to vine-growers for 2014 by allocating payment entitlements within the meaning of Chapter 1 of Title III of Regulation (EC) No 73/2009.
Amendment  8 Proposal for a regulation Article 1 – paragraph 1 Regulation (EC) No 1234/2007 Article 103o – paragraph 3 – introductory part
Text proposed by the Commission Amendment 3. Once effective, the support referred to in paragraph 1 shall: 3. The support for 2014 referred to in paragraph 1 shall:
Amendment  9 Proposal for a regulation Article 1 – paragraph 1 Regulation (EC) No 1234/2007 Article 103o – paragraph 3 - point (a)
Text proposed by the Commission Amendment (a) definitively remain in the Single Payment Scheme and no longer be available under Article 103k(3), for the measures listed in Articles 103p to 103y; (a) remain in the Single Payment Scheme and no longer be available under Article 103k(3), for the measures listed in Articles 103p to 103y;
Amendment  10 Proposal for a regulation Article 1 Regulation (EC) N°1234/2007 Article 103o – paragraph 3 – point a – subparagraph 1a (new)
Text proposed by the Commission Amendment   If a Member State decides to use its national envelope in the form of payments per hectare to vine growers, such payments shall be exempt from any modulation system between Member States;

• [1]  Not yet published in the Official Journal.
• [2]  Not yet published in the Official Journal.
• [3]  OJ C 35, 9.2.2012, p. 1.

EXPLANATORY STATEMENT

The Commission's proposal aims at amending Article 103o of the single CMO regulation (1234/2007) which provides for a possibility for the Member States to grant decoupled aid to vine growers under the Single Payment Scheme (SPS) as part of their national vine growers' programmes.

What is new compared to the existing support regime in the wine sector?

On the basis of the provision that already exists in the current sCMO regulation, Member States (MS) could modify their support programmes as regards the part allocated to the SPS once a year (support programmes have a five-year duration). That means MS could start transferring funds on a yearly basis, and MS that used this possibility for only part of their envelopes like Spain and Greece could decide once a year to increase this part. Also, at the end of the five-year programming period, MS could decide to stop transferring funds from their wine envelopes to the SPS.

According to the COM proposal, Member States have to decide once and for all ('one shot' decision) by the end of this year (1st Dec 2012) to transfer funds from the wine envelope to the SPS. The decision is definitive. The reasons for this proposed change are that payment entitlements in the SPS are granted for an undetermined period and funds allocated in the SPS must be known in advance for ensuring predictability to the farmers. But even more importantly, the proposal has to be seen in the light of the new CAP proposal for direct payments (Art 25) that, on one hand, provides for vine-growers to obtain payment entitlements for their wine areas - while still being allowed to benefit from the measures of the wine programmes as in the past -; and on the other hand, does not allow for the amounts transferred from the wine envelopes to be allocated only to the vine-growers, in view of the objective of convergence of the value of all entitlements. In other words MS can react to this proposal by deciding before 1 Dec 2012 to 'adjust' support to vine-growers by transferring an x amount of the national wine envelope to the direct payments budget.

During discussions on this COM proposal concerns were raised about taking a fundamental decision regarding the future regime for the wine sector already in December of this year when the outcome of the CAP reform (new system of direct support) is likely to be unknown.

In order to avoid a definitive decision of wine fund transfers to SPS at too early a stage the draft report proposes a possible solution for this problem.

This proposal suggests to convert the existing 5-year measure into a one-year measure applicable only for 2014, and to provide for the possibility of making a 'one-shot' transfer (final and definitive decision) as from 2015. This proposal suggests also the possibility for Member States to decide to exclude from to 2015 the wine areas from the eligible areas for direct payments.

The one-year measure would have the following advantages:

1. to ensure continuity in the decisions made up to 2013 during the transition year for direct payments,

2. to avoid letting MS plan 5-years decisions that are actually not compatible with the Commission's proposal for a new system of direct support,

3. to link the calendar for the final transfer decision to the calendar of the reform.

The decisions for the one-year measure would need to be notified by the MS on 1 December 2012 in line with the date currently foreseen for notifying the 5-year measure under the current version of the Article.

The decisions for the one-shot transfer and the decision for excluding the wine areas from direct payment would need to be taken by the MS in 2013 when MS will also notify their decisions in terms of flexibility between pillars and implementation of the system of direct support (1 August 2013 in the proposal).

- While the one-year measure will still lead to the distribution of entitlements solely to vine-growers, the one-shot transfer will be a transfer of funds from the wine envelopes to the direct payments envelopes.

- MS that decide to transfer for 2014 will still have the possibility not to operate the one-shot transfer for 2015.

Aside from the subject of wine support, the European Parliament underlines its position against the abolishment of planting rights in the sector.

OPINION OF THE COMMITTEE ON LEGAL AFFAIRS ON THE LEGAL BASIS

Mr Paolo De Castro

Chair

Committee on Agriculture and Rural Development

BRUSSELS

Subject:           Opinion on the legal basis for the proposal for a regulation of the European Parliament and of the Council amending Council Regulation (EC) No 1234/2007 as regards the regime of the single payment scheme and support to vine-growers (COM(2011)0631 – C7‑0338/2011 – 2011/0285(COD))

Dear Mr Chair,

By letter of 7 March 2012 you asked the Committee on Legal Affairs, pursuant to Rule 37 of the Rules of Procedure, to give its opinion on the possibility of adding Article 42(1) to Article 43(2) TFEU as the legal basis of the proposal for a regulation of the European Parliament and of the Council amending Council Regulation (EC) No 1234/2007 as regards the regime of the single payment scheme and support to vine-growers.

The proposal for a regulation amending Council Regulation (EC) No 1234/2007 as regards the regime of the single payment scheme and support to vine-growers (COM(2011)0631) was presented by the Commission on the basis of Article 43(2) TFEU.

Background

I. The proposal

Council Regulation (EC) No 1234/2007 establishes a common organisation of agricultural markets and specific provisions for certain products, inter alia providing for the possibility for Member States to grant decoupled aid under the Single Payment Scheme to vine-growers.

The amendment now proposed to that regulation concerns this support for vine-growers and provides for the definite transfer of the measure on support to vine-growers to the Single Payment Scheme (Article 103o of Council Regulation No 1234/2007). In detail, it is proposed that Member States may decide by 1 December 2012 to provide support to vine-growers by granting decoupled aid under the Single Payment Scheme for vine growers, and the proposal also includes further details.

II. The legal bases in question

1. Legal basis of the Commission proposal

The proposal is based on Article 43(2) TFEU, which reads as follows:

"2. The European Parliament and the Council, acting in accordance with the ordinary legislative procedure and after consulting the Economic and Social Committee, shall establish the common organisation of agricultural markets provided for in Article 40(1) and the other provisions necessary for the pursuit of the objectives of the common agricultural policy and the common fisheries policy.

2. Proposed change of the legal basis

In your request for an opinion of the Legal Affairs Committee on the legal basis, you refer to the possibility of adding Article 42(1) TFEU which reads as follows:

"The provisions of the Chapter relating to rules on competition shall apply to production of and trade in agricultural products only to the extent determined by the European Parliament and the Council within the framework of Article 43(2) and in accordance with the procedure laid down therein, account being taken of the objectives set out in Article 39."

III. Analysis

Certain principles emerge from the case law of the Court as regards the choice of legal basis. First, in view of the consequences of the legal basis in terms of substantive competence and procedure, the choice of the correct legal basis is of constitutional importance[1]. Secondly, under Article 13(2) TEU, each institution is to act within the limits of the powers conferred upon it by the Treaty[2]. Thirdly, according to the case-law of the Court of Justice, "the choice of legal basis for a Community measure must rest on objective factors amenable to judicial review, including in particular the aim and the content of the measure"[3].

Article 43(2) TFEU provides the general legal basis for the common agricultural policy, under which Parliament and Council are to establish the common organisation of agricultural markets, as set out in Article 40 TFEU, by means of the ordinary legislative procedure.

The first subparagraph of Article 42 TFEU stipulates that the extent to which competition rules shall apply to production of and trade in agricultural products is determined by the European Parliament and the Council within the framework of Article 43(2).

The current Regulation provides in its Article 180 that Article 87, 88 and 89 of the EC Treaty (now Articles 107, 108 and 109 TFEU), i.e. the provisions on state aid, apply to production and trade of products referred to in Article 1 of that Regulation, i.e. the products covered by it. That same Article 180 however exempts certain provisions of the regulation from the application of the state aid rules, among them Article 103o (which belongs to "Section IVb of Chapter IV of Title I of Part II" as is referred to in the catalogue of exemptions).

The amendment which is now proposed to Article 103o changes the subject of that exemption from the state aid rules. It therefore concerns the extent to which competition rules apply to agricultural products and should be based also on Article 42(1) TFEU. Given that Article 42(1) refers back to Article 43(2) as the general legal basis in this context, those two provisions should be used together as a legal basis.

The Legal Service has stated in a note dated 15.3.2012 that Articles 42 and 43(2) TFEU should be the legal basis for the proposal.

The committee considered the above question at its meeting of 27 March 2012. At this meeting, it accordingly decided, by unanimity[4], to recommend that the appropriate legal basis for the proposal for a regulation of the European Parliament and of the Council amending Council Regulation (EC) No 1234/2007 as regards the regime of the single payment scheme and support to vine-growers should be Articles 43(2) and 42(1) TFEU.

Yours sincerely,

Klaus-Heiner Lehne

• [1]  Opinion 2/00 Carthagna Protocol [2001] E.C.R. I-9713, para. 5; Case C-370/07 Commission v. Council [2009] E.C.R. I-8917, paras 46-49; Opinion 1/08, General Agreement on Trade in Services [2009] ECR I-11129, para. 110.
• [2]  Case C-403/05 Parliament v. Commission [2007] E.C.R. I-9045, para. 49, and the case-law cited therein.
• [3]  See most recently Case C-411/06 Commission v Parliament and Council [2009] E.C.R. I-7585.
• [4]  The following were present for the final vote: Luigi Berlinguer, Sebastian Valentin Bodu, Piotr Borys, Françoise Castex, Christian Engström, Marielle Gallo, Giuseppe Gargani, Lidia Joanna Geringer de Oedenberg, Sajjad Karim, Klaus-Heiner Lehne, Eva Lichtenberger, Antonio Masip Hidalgo, Jiří Maštálka, Alajos Mészáros, Bernhard Rapkay, Evelyn Regner, Dagmar Roth-Behrendt, Alexandra Thein, Francesco Enrico Speroni, Cecilia Wikström, Tadeusz Zwiefka.

PROCEDURE

Title	Amendment of Council Regulation (EC) No 1234/2007 as regards the regime of the single payment scheme and support to vine-growers
References	COM(2011)0631 – C7-0338/2011 – 2011/0285(COD)
Date submitted to Parliament	12.10.2011
Committee responsible        Date announced in plenary	AGRI 25.10.2011
Committee(s) asked for opinion(s)        Date announced in plenary	DEVE 25.10.2011	BUDG 25.10.2011	EMPL 25.10.2011	ENVI 25.10.2011
	REGI 25.10.2011
Not delivering opinions        Date of decision	DEVE 25.1.2012	BUDG 18.1.2012	EMPL 27.10.2011	ENVI 24.10.2011
	REGI 25.1.2012
Rapporteur(s)        Date appointed	Herbert Dorfmann 26.9.2011
Legal basis disputed        Date of JURI opinion	JURI 27.3.2012
Discussed in committee	29.2.2012	30.5.2012
Date adopted	19.6.2012
Result of final vote	+: –: 0:	37 4 0
Members present for the final vote	Liam Aylward, José Bové, Luis Manuel Capoulas Santos, Vasilica Viorica Dăncilă, Michel Dantin, Paolo De Castro, Albert Deß, Diane Dodds, Herbert Dorfmann, Hynek Fajmon, Iratxe García Pérez, Julie Girling, Béla Glattfelder, Sergio Gutiérrez Prieto, Martin Häusling, Esther Herranz García, Peter Jahr, Elisabeth Jeggle, Elisabeth Köstinger, George Lyon, Gabriel Mato Adrover, Mairead McGuinness, Mariya Nedelcheva, Rareş-Lucian Niculescu, Wojciech Michał Olejniczak, Georgios Papastamkos, Marit Paulsen, Britta Reimers, Ulrike Rodust, Alfreds Rubiks, Giancarlo Scottà, Czesław Adam Siekierski, Alyn Smith, Janusz Wojciechowski
Substitute(s) present for the final vote	Luís Paulo Alves, Salvatore Caronna, María Auxiliadora Correa Zamora, Spyros Danellis, Jill Evans, Sylvie Goulard, Christa Klaß, Giovanni La Via, Anthea McIntyre, Petri Sarvamaa, Milan Zver
Date tabled	25.6.2012