Explanatory Memorandum to COM(2024)495 - - Main contents
Please note
This page contains a limited version of this dossier in the EU Monitor.
| dossier | COM(2024)495 - . |
|---|---|
| source | COM(2024)495 |
| date | 21-10-2024 |
1. CONTEXT OF THE PROPOSAL
- Reasons for and objectives of the proposal
The recent natural disasters in Central and Eastern as well as in Southern Europe have had a devastating effect on the populations living and working in these regions. A lot of agricultural and forestry production potential has been destroyed, causing huge losses of income. In order to quickly address vulnerabilities of the European food system and rural communities resulting from these disasters, Europe needs to be able to rapidly deploy effective support through the Rural Development Programmes in addition to ressources available from other European Funds.
The Common Agricultural Policy (CAP) already provides support for investments in restoration of agricultural and forestry potential and income support. However, these support measures may be underfunded in face of the needs of farmers and foresters in countries affected by natural disasters.
In order to provide additional assistance and further flexibility to Member States affected by natural disasters, the Commission proposes a new measure and more flexibility in relation to the non-regression threshold for a budgetary reinforcement of investments in restoration of agricultural potential as well as for funding the new measure.
The new measure, funded by the European Agricultural Fund for Rural Development (EAFRD) and implemented under rural development programmes, allows Member States to provide targeted liquidity support to farmers, forest holders, SMEs active in processing, marketing or development of agricultural or forestry products affected by natural disasters occurring as of 1 January 2024.
By directly and swiftly addressing the cash-flow challenges of affected businesses, the support through the new measure will contribute to food security and address upfront the potential market disturbance due to the impact of the natural disasters. In order to achieve these goals while providing for a reasonably simple administration allowing swift deployment, the support will take the form of a one-off lump sum for farmers, forest holders and SMEs.
In addition, investments in restoration of agricultural potential should be reinforced by providing more budgetary flexibilities as regards the non-regression threshold in using EAFRD funds.
In this context, while providing for budgetary flexibility as regards the non-regression threshold, it is important to continue and reinforce the planned investments and actions in disaster prevention and preparedness, as well as climate adaptation to mitigate the impact of the increasingly frequent climate-induced disasters. Restoration efforts and liquidity payments should be balanced as much as possible with the need to pursue currently foreseen investments and actions in disaster prevention and preparedness.
Further, with a view to ensuring the most efficient use of resources available under existing rural development programmes, Member States will be required to substantiate the targeting of the new support measure to those most affected, based on objective and non-discriminatory criteria. Moreover, a maximum share of the Union contribution to this new measure should be fixed.
As regards the process, Member States would need to include the new measure or the planned reallocation of funding in the rural development programmes via a programme modification. This submission of the programme modification can take place after the entry into force of this proposal.
- Consistency with existing policy provisions in the policy area
The proposal is consistent with the overall legal framework established for the Common Agricultural Policy and the European Structural and Investment Funds (ESIF) and is limited to a targeted amendment of Regulation (EU) 2020/2220. The proposal complements all other measures aimed at addressing the current situation taken by the Union, in particular those measures aimed at providing liquidity.
- Consistency with other Union policies
The proposal is limited to targeted amendments of Regulation (EU) 2020/2220 and maintains consistency with other Union policies.
2. LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY
- Legal basis
The proposal is based on 43(2) of the Treaty on the Functioning of the European Union.
- Subsidiarity (for non-exclusive competence)
The Treaty on the Functioning of the European Union provides that the competence for agriculture is shared between the Union and the Member States, while establishing a common agricultural policy with common objectives and a common implementation. The proposal aims at ensuring the common objectives and common implementation of a new rural development measure.
- Proportionality
The proposal comprises limited and targeted amendments that do not go beyond what is necessary to achieve the objective of providing exceptional and temporary relief to farmers, forest holders and SMEs active in processing, marketing or development of agricultural products or forestry products and for restoration efforts, who are particularly affected by natural disasters.
- Choice of the instrument
A Regulation is the appropriate instrument to introduce the additional measure needed to address these unprecedented circumstances.
3. RESULTS OF EX-POST EVALUATIONS, STAKEHOLDER CONSULTATIONS AND IMPACT ASSESSMENTS
- Ex-post evaluations/fitness checks of existing legislation
N/A
- Stakeholder consultations
Due to the technical, limited and urgent nature of the proposed modifications, the legal proposal is not suitable for a wide public consultation. This explanatory memorandum will however be transmitted to the other institutions together with the accompanying act and will be available to the public through EUR-Lex.
- Collection and use of expertise
N/A
- Impact assessment
An impact assessment was carried out to prepare the proposal for Regulation (EU) No 1305/2013. These proposed limited amendments do not require a separate impact assessment.
- Regulatory fitness and simplification
N/A
- Fundamental rights
N/A
4. BUDGETARY IMPLICATIONS
The proposal concerns the EAFRD rural development programmes for the 2014-2022 period and does not modify existing budgetary commitments. It remains within the limits of the overall allocation for the period 2014-2022 and is therefore budgetary neutral.
The total annual breakdown of commitment appropriations under EAFRD remains unchanged. Payments to beneficiaries will be made before 31 December 2025, and hence will be financed under the 2025, 2026 and 2027 budget. The payment appropriations needed to finance this measure are to be accommodated within the appropriations for the EAFRD included in the Commission’s forthcoming Draft Budget 2025 and will be offset by a corresponding decrease in payment needs in subsequent years.
The proposed modification does not imply any changes in the Multiannual Financial Framework annual ceilings for commitments and payments as per Annex I to Regulation (EU) 2020/2093.
5. OTHER ELEMENTS
- Implementation plans and monitoring, evaluation and reporting arrangements
The implementation of the measures will be monitored and reported upon in the framework of the general reporting mechanisms established in Regulations (EU) No 1303/2013 and (EU) No 1305/2013.
- Explanatory documents (for directives)
N/A
- Detailed explanation of the specific provisions of the proposal
In order to provide additional assistance and further flexibility as regards the non-regression threshold to Member States affected by natural disasters it is proposed to amend Regulation (EU) 2020/2220 to:
- Introduce a new measure to allow Member States to provide liquidity support to farmers, forest holders and SMEs active in processing of agricultural and forestry products affected by natural disasters occurring as of 1 January 2024. The support is paid in form of a lump sum. The new measure can be co-financed up to 100% with EAFRD and the maximum share of Union contribution is 10% of the total EAFRD contribution to the rural development programme for the years 2021-2022.
- Provide limited flexibility regarding the non-regression clause when reallocating funds to the new measure or to measures for restoring production potential.
- Give Member States the possibility to simplify procedures by considering the whole area to be gravely affected by a natural disaster when applying for “force majeure”.
- Allow Member States to select for support operations that have been physically completed or fully implemented before the application for funding when linked to restoration or liquidity payments.