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A B C D E F G H I L M N O P R S T W
Acquis communautaire African, Caribbean and Pacific countries Axes of the rural development policy  
European Agricultural Fund for Rural Development European Agricultural Guarantee Fund European Agricultural Guidance and Guarantee Fund
Financial discipline mechanism
General Agreement on Tariffs and Trade Generalised System of Preferences Good Agricultural and Environmental Condition
Instrument for Pre-accession Assistance Integrated Administration and Control System
Most Favoured Nation treatment
Protected designation of origin Protected geographic indication
Sanitary and Phytosanitary (SPS) Measures and Agreement Single Area Payment scheme (Saps) Special and Differential Treatment
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The common agricultural policy - A glossary of terms
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in pdf Abatimento: the lowering of the tariff for imports of maize and sorghum into Spain and Portugal in accordance with obligations falling upon the European Union under the rules of the World Trade Organisation.
Acquis communautaire: The phrase 'acquis communautaire', sometimes translated as 'the Community patrimony' denotes the whole range of principles, policies, laws, practices, obligations and objectives that have been agreed or that have developed within the European Union. The acquis communautaire includes most notably the Treaties in their entirety, all the legislation enacted to date and the judgements of the Court of Justice.
Ad valorem duty: This is an import duty, expressed as a percentage of the value of the good on which it is applied (for example 5% of the value). The term "ad valorem duty" contrasts with the term "specific duty". The latter term refers to an import duty expressed as, for example, 10 dollars per tonne, 20 yen per head or 30 euro per hectolitre.
Advisory
groups: these are groups of representatives of organisations
from civil society. The organisations include professional
associations, NGOs and so forth which are involved in farming, the
rural economy, food production, the environment and other related
matters. The groups meet with the services of the Commission several
times a year. There are around 30 of them. They play an advisory and
consultative role – they are not involved in the drafting or
approval of legislation. Afforestation: This is the planting of trees for the purpose of creating woodland or forest. In the context of the common agricultural policy, the term refers to measures, co-financed by the European Union, to encourage new woodland development with a view to its beneficial effects for the environment.
African, Caribbean and Pacific countries (ACP countries): These are the African, Caribbean and Pacific states that are associated with the European Union under the Cotonou Agreement (previously the Lome Agreement). There are 79 states in the group which represents more than 650 million people. All members of the group – with the exception of Cuba – are signatories to the Cotonou Agreement which defines the relationship between the ACP countries and the European Union in the ares of trade and cooperation. The principal objective of this agreement is to reduce poverty. This is to be pursued through political dialogue, development aid, economic liberalisation and trade .
Agenda 2000: Agenda 2000 was a
strategy paper, adopted by the European Commission in 1997.
It is significant because it set out the main political,
economic and social issues that confronted the European Union at
the beginning of the 21st century and put forward a strategy to
respond to those issues. The principle issue was that of the
enlargement of the Union, then comprising 15 countries, towards
Central and Eastern Europe. The paper consisted of three parts:
In 1999, the The European Council, meeting in Berlin, agreed to the proposals. The subsequent legislation (to give legal effect to the proposals) was adopted later the same year.
Agreement on Agriculture: This term refers, in the context of negotiations in international trade, to an agreement between a number of countries to restrict the amount of support that they grant to their farmers and to open up their countries to more agricultural trade. This agreement was made in 1994 between the countries that took part in the Uruguay Round of trade negotiations. The 8th round of multilateral trade negotiations known as the Uruguay Round, conducted within the framework of the General Agreement on Tariffs and Trade, concluded in 1994 with the signature of the Final Act of the Uruguay Round. This adopted a number of individual Agreements and Decisions, including the Agreement on Agriculture, as well as provisions that set up the World Trade Organisation. The Agreement on Agriculture brought agricultural trade and, for the first time, domestic agricultural policy, more fully under international rules and obligations. Specifically the agreement provided for reductions in tariffs, export subsidies and trade-distorting domestic support to farmers, while having regard to non-trade concerns and the situation of developing countries and the situation of developing countries.
Aggregate Measure of Support: The Aggregate Measure of Support is an indicator used by the World Trade Organisation. It quantifies the extent to which a country supports its agricultural sector through the use of measures that fall into the 'amber box'. Under the terms of the Uruguay Round Agreement on Agriculture, members of the World Trade Organisation undertook to reduce their Aggregate Measure of Support.
Agri-environmental payments: In the context of the common agricultural policy these are payments made to farmers who go beyond the requirements of Good Farming Practice. The purpose is to protect and improve the environment, to maintain the countryside in good condition, to encourage extensive farming, to preserve genetic diversity and to respect high standards of animal welfare. Farmers are reimbursed, from European Union and national funds, for the costs incurred and income foregone as a result of farming in a manner that delivers these additional public goods and services. Agri-environmental payments
fall within Axis 2 of the rural development policy (i.e.
measures to improve the environment and the countryside).
Animal
welfare: the well-being of farm animals. European Union
rules specify that animals should enjoy the following freedoms:
freedom from hunger and thirst, freedom from discomfort, freedom
from pain, injury and disease, freedom to express normal
behaviour and freedom from fear and distress.
Axes of rural development policy: In September 2005 the European Union adopted a new rural development policy which came into effect at the beginning of 2007. The policy is structured around three core objectives of rural development policy each of which has a corresponding axis. Axis 1: improving the competitiveness of the agricultural and forestry sector. This axis comprises measures to improve knowledge and innovation, measures to improve the quality of farm products and two transitional measures for the new Member States, these being assistance for semi-subsistence farms and producer groups. Axis 2: improving the environment and the countryside. This axis comprises measures to promote sustainable farming and forestry and high standards of animal welfare. Farmers may receive payments to compensate them for actions that they have taken in the public interest but which are not profitable in themselves (such as farming in a manner that preserves biodiversity, farming in mountainous areas and thereby maintaining rural society in those areas, etc.). Axis 3: improving the quality of life in rural areas and helping the diversification of the rural economy. This axis comprises measures which encourage farmers to diversify into non-agricultural activities, measures to improve the quality of life in rural areas and measures concerning the local development strategies. This axis therefore helps to promote micro-enterprises, rural tourism, basic services and village renewal. In addition to these three axes there is fourth one which promotes the Leader approach.
Biodiesel: is a biofuel, liquid in form and produced by plants (such as sunflower, oilseed rape and groundnut)
Biodiversity: the variability among living organisms from all sources, including terrestrial, marine, and other aquatic ecosystems and the ecological complexes of which they are part. It includes diversity within species (genetic diversity), between species (species diversity), and between ecosystems (ecosystem diversity).
Bioenergy: this is energy that is derived from biological sources (ie plants or animals) and which has not undergone any geological process. Sources of bioenergy may be solid (eg wood, straw), liquid (eg biodiesel, bioethanol) or gaseous (methane). Biomass is in contrast to fossil fuels. Although the latter are also derived from plants and animals, they have undergone a geological process (extreme heat and pressure) which have transformed them into coal, oil, natural gas and a number of other products.
Bioethanol: is a biofuel, liquid in form and produced from plant matter by a process of fermentation of carbohydrates (such as cereal flour, potato starch, sugarbeet and sugarcane).
Biofuel: this is a fuel that is produced by a biological process (as opposed to a geological process). Biofuels can be in a solid, liquid or gaseous form. Wood, biodiesel and bioethanol are examples of biofuels.
Biogas: is a biofuel, gaseous in form. It is produced by the anaerobic fermentation of animal manure.
Biomass: is all
living matter and all matter that was living but is in the
process of decay.
Bound Tariffs: tariffs which, under WTO law, cannot be raised. Under the terms of the 1994 Agreement on Agriculture the countries belonging to the World Trade Organisation have agreed not to increase their tariffs on imports of agricultural products. They can decrease them, but they are not allowed to increase them. These tariffs are known as ‘bound tariffs.’
Boxes: Under the terms of the Uruguay Round Agreement on Agriculture, the measures that a country uses to support its agricultural sector are categorised into one or other of the following boxes:
Clearance of accounts: this is a procedure, operated by the
Commission, to ensure that the member states carry out, in a
proper manner, their responsibilities concerning payments made
under the Common Agricultural Policy. The procedure includes an
annual financial clearance of the accounts of each paying agency
and a multi-annual conformity clearance regarding the conformity
of the transactions within EU rules. Coexistence: Coexistence refers to the presence, within the same area of land, of crops grown in different ways (i.e. crops grown in a conventional manner, crops grown according to the principles of organic farming and crops grown from seeds that have been genetically modified). There are a number of legal obligations regarding labeling and/or purity standards that apply in these situations. More information
Common agricultural policy (CAP): This is the set of legislation and practices adopted by the European Union to provide a common, unified policy on agriculture. It aims to ensure that agriculture can be maintained over the long term at the heart of a living countryside. The European Union is obliged by law to have an agricultural policy. The aims are set out in Article 39 of the Treaty establishing the European Community and are as follows:
Common market organisation (CMO): A common market organisation is a set of measures that enables the European Union firstly to manage, to a greater or lesser degree, markets for agricultural products and secondly to support the incomes of farmers. Markets are managed by altering the supply and demand for agricultural products from the situation that would pertain if markets were entirely "free". The purpose of market management is to stabilise markets (in terms of quantity offered and purchased and the price at which transactions take place) and thus to ensure that farmers have a reasonable income and that consumers have a secure supply of food at reasonable prices. Until recently, the European Union operated 21 common market organisations which together covered around 90% of the output of farms. In a bid, however, to make things simpler, the European Union has amalgamated them into a single common market organisation. The measures may influence the demand for and/or the supply of farm products:
Compensatory allowances: Introduced in 1975, these are payments to farmers who are located in areas where farming is relatively difficult. Such areas are known as 'less favoured areas'. They include mountainous areas and areas where there are specific environmental difficulties. In these areas, farmers may apply for compensatory payments. The purpose of these payments is to ensure that land remains in farming, and that these areas are not de-populated and the land abandoned. Compensatory allowances are only paid to farmers if they respect the rules of cross-compliance. They form part of the menu of measures available under Axis 2 of the rural development policy.
Cross-compliance: This is the creation of a link between the receipt of direct payments by farmers and their compliance with certain rules which are in the interests of society as a whole. The rules concern the protection of the environment, food safety, animal health, animal welfare, public health, plant health and environmental condition. This link is expressed in concrete terms in the possibility, if the rules are not respected, of a reduction or cancellation of direct payments. In other words, if farmers do not respect these rules then they may not receive some or all of their direct payments. The specification of good agricultural and environmental condition is set at the level of the member state. Cross-compliance applies to farmers who receive direct payments.
Customs duty: The amount of money that a person has to pay to the national authorities when importing or exporting a good. The term 'customs duty' is synonymous with the term 'tariff' and the two terms are often used interchangeably.
Decoupling: Decoupling, introduced by the 2003 reform of the common agricultural policy, is the removal of the link between direct payments and production. Prior to the reform, farmers received direct payments only if they produced particular commodities. It meant that the profitability of producing a particular product did not depend only on the amount of money for which the farmer could sell the product in the market, but also on the amount of the direct payment that was associated with the product. This in turn meant that, when farmers made their business decisions regarding which crops to grow or which type of animal to produce, they would take account of both the market price and the direct payment. In other words, farmers responded not only to signals from the market but also to the level of the direct payment that they would receive for that particular crop of animal. The decoupling of direct payments has changed this. In principle, when farmers decide what to produce they do not take into account the level of direct payments that they receive, since these are no longer coupled to a particular crop or animal. The overall effect of decoupling is to move the agricultural sector more towards the free market and gives farmers greater freedom to produce according to market demand.
De Minimis Rule: This is the rule whereby a member of the World Trade Organisation is not required to reduce:
The corresponding figures under the Uruguay Round Agreement on Agriculture for developing countries is 10%.
Direct payments: These are payments made directly to farmers in order to support their incomes. Direct payments are in contrast to price support which supports the incomes of farmers by supporting the prices that they receive for their products when they sell them in the market. Direct payments were first introduced on a significant scale following the reform of the common agricultural policy in 1992. The reform reduced the level of price support. To prevent a corresponding fall in the incomes of farmers, direct payments were introduced. They compensated farmers for the lower prices that they received in the market for their products.
Dispute Settlement Body: This is the
body within the World Trade Organisation that
is ultimately responsible for the settling of disputes that
arise between countries in the field of international trade. It
consists of all the countries that belong to the WTO.
Doha Development Agenda (DDA): The Ministerial conference of the World Trade Organisation, which took place in Doha, Qatar in November 2001, launched a round of multilateral negotiations concerning trade. These negotiations are known as the Doha Development Agenda. The same Ministerial conference also set the agenda and the timetable. More information
Early retirement scheme: Farmers who are above a certain age and who have decided to stop farming may receive payments under an early retirement scheme. The purpose is to encourage the replacement of elderly farmers by younger farmers, these being in a better position to improve the economic viability of farms.
Energy crops: energy crops are crops that are grown for energy. They include oilseeds crops (rape, soya, sunflower), cereals (wheat, barley, maize, rye), sugar beet, sugar cane and perennial crops (miscanthus, short rotation coppice, eucalyptus).
Erosion of preferences: Many developed countries provide what are known as 'preferential import duties' for goods originating from developing countries. In means that the import duties on goods coming from developing countries are less than the import duties on like goods coming from developed countries. The negotiations that are taking place in the framework of the Doha Development Agenda aim at a reduction in the level of non-preferential tariffs. If the negotiations succeed, non-preferential tariffs will be reduced but preferential tariffs will remain the same. As a result, the margin of preference in favour of developing countries will be less than it was previously. This is known as erosion of preferences.
Euro: The official currency of the 13 member states of the European Union that have chosen to adopt it. These countries are: Austria, Belgium, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal, Slovenia and Spain. As from 1 January 2008, the euro will also be the currency of Cyprus and Malta. Euro banknotes and coins have been in circulation since 1 January 2002 and are a part of daily life for 315 million Europeans living in the euro area.
European Agricultural Fund for Rural Development (EAFRD): This fund was created in September 2005 and came into operation at the beginning of 2007, when it replaced the Guidance Section of the European Agricultural Guidance and Guarantee Fund and that part of the Guarantee Section than financed some of the rural development measures. It is the single source of funding from the European Union to rural development programmes.
European Agricultural Guarantee Fund (EAGF): This fund was created in September 2005 and came into operation at the beginning of 2007, when it replaced the Guarantee Section of the European Agricultural Guidance and Guarantee Fund. It provides funding for
European Agricultural Guidance and Guarantee Fund (EAGGF): This was the fund which financed the common agricultural policy but which was replaced in 2005 by two new funds: the European Agricultural Fund for Rural Development and the European Agricultural Guarantee Fund.
European Union (EU): A group of twenty seven democratic European countries - its Member States - committed to working together for peace and prosperity. The Member States have set up common institutions to which they entrust some of their sovereignty so that decisions on specific matters of joint interest can be made democratically at the European level.
Everything But Arms (EBA): The Everything But Arms agreement is a preferential trading agreement which has been granted to 50 least developed countries by the European Union. It has been granted within the framework of the Generalised System of Preferences of the European Union. The agreement is designed to grant duty-free and quota-free access to the market of the European Union for all products (except weapons and arms). Under the terms of the agreement, all products (including agricultural products) are granted free access to the market of the EU.
Export Competition: This is a term used in the context of trade negotiations that includes all forms of financial incentives or assistance that are provided by governments for the export of products from their countries. It includes the following: export subsidies, export refunds, export credits and insurance, tax breaks, government-backed privileges and regulatory benefits that support trading enterprises that belong to the state, and lastly, abuse of food aid for commercial purposes. Under the terms of the Uruguay Round Agreement on Agriculture only scheduled export subsidies are subject to control and reduction.
Export credits: These are all forms of official support including direct credits/financing, refinancing, interest-rate support, export credit insurance and guarantees, deferred invoicing and any other form of involvement, direct or indirect, by providers of official support.
Export refunds: Export refunds are paid to trading companies that have purchased agricultural goods from within the European Union and sold them at a lower price in a third country. The refund (subsidy) covers the difference between the internal European Union price and the world market price. This internal European Union price is generally higher than the World Market price because the European Union support the internal price.
Extensification: To farm 'extensively' is to use a relatively low level of inputs. For instance a farmer who produces cereals can be said to farm 'extensively' if he applies relatively low quantities of fertiliser or pesticides for every hectare of cereal. A farmer who produces beef can be said to farm 'extensively' if he has a relatively small number of cattle for every hectare of pasture. Extensification refers to measures, partially financed by the European Union, which encourage farmers to farm extensively. Such measures fall within Axis 2 of the rural development policy.
Farm Accountancy Data Network (FADN): The Farm Accountancy Data Network provides data on the financial and economic aspects of farming in the Member States of the European Union. Each year a sample of farms is selected, which is representative of commercial farms, and these farms provide data on their costs of production, their revenues from selling their output and on other aspects of their farming operations. The data enable the European Union to monitor the income situation of farmers and to examine the effects of policy. More information
Farm advisory systems: These are systems that are run by the Member States to help farmers to identify and implement improvements in farm management performance with regard to statutory environmental, public, animal and plant health and animal welfare standards and the maintenance of their land in good agricultural and environmental condition.
Farmer: A farmer is defined as an individual (or group of individuals e.g. partnerships, companies, and other legal structures through which a business is conducted) who exercises an agricultural activity on a holding.
Financial discipline mechanism: This is a mechanism for ensuring that expenditure under the provisions of the common agricultural policy does not exceed the limits specified in the European Union budget.
Financial perspective: The financial perspective forms the framework for the expenditure of the European Union over a period of seven years. It is the result of an interinstitutional agreement between the European Parliament, the Council and the Commission. The financial perspective indicates the maximum volume and the composition of the foreseeable expenditure. It is adjusted annually by the Commission to take account of prices and the development of the GNP of the European Union. The financial perspective is not a multiannual budget since the annual budgetary procedure remains essential to determine the actual amount of expenditure and the breakdown between the different budget headings. To date, four inter-institutional agreements of this type have been concluded:
First generation biofuels: biofuels made from cereals, sugar and oilseeds. In Europe, the most significant first generation biofuel is biodiesel made from oilseed rape.
Food safety: This term refers to the extent to which food is safe to eat. The term is sometimes confused with that of food security which refers to the extent to which food is available - i.e. whether it is physically available and can be bought at a price that people can afford.
Food security: This term refers to the availability of food - in other words whether it is physically available and if so at what price. The term is sometimes confused with that of food safety which refers to the extent to which food is safe to eat. Article 39 of the Treaty establishing the European Community provides that the objectives of the common agricultural policy are, among other things, to assure the availability of supplies of food and to ensure that supplies reach consumers at reasonable prices.
General Agreement on Tariffs and Trade (GATT): The General Agreement on Tariffs and Trade dates from 1944. It was both an agreement concerning international trade (now incorporated into the agreements of the World Trade Organisation) and an organisation set up to administer the agreement. Since 1995 the organisational part has been replaced by the World Trade Organisation.
Generalised System of Preferences (GSP): The Generalised System of Preferences scheme is an arrangement, within the context of the WTO, whereby a developed country is permitted to apply lower rates of tariff on imports from developing countries. All members of the World Trade Organisation have agreed that when it comes to applying tariffs on imports they will treat each other in a like manner. In other words, if country A applies a 10% import tariff on imports coming from country X, then it will similarly apply a 10% import tariff on like goods coming from country Y. This rule has become known as the "most favoured nation" rule. However, in the late 1960s it became clear that imports from developing countries should be allowed in at a lower rate of tariff, in order to help these countries to progress. This concept - known as "preferential tariffs" - was put forward by the meeting of the United Nations Conference on Trade and Development which took place in New Delhi, India in 1968. But the concept was in contradiction to the "most favoured nation" rule. To make it legally possible for developed countries to grant them preferential tarrifs, the members of the World Trade Organisation (at that time the General Agreement on Tariffs and Trade) decided that if a developed country wished to grant them to one or more developing countries, it could be granted a waiver to do so. The first waivers were granted in 1971 and were valid for a period of 10 years. By means of the "Enabling Clause" of 1979, they have been renewed indefinitely. This is the set of preferential tariffs granted by a developed country to developing countries. The European Union was the first to implement a GSP in 1971. Under the Generalised System of Preferences of the European Union, there are three types of arrangement:
Genetically modified organism (GMO): The term 'genetically modified organism' means an organism, with the exception of the human being, in which the genetic material has been altered in a way that does not occur naturally by mating and/or by natural recombination.
Good Agricultural and Environmental Condition (GAEC): Within the framework of cross compliance, farmers are obliged to respect certain minimum requirements for maintaining their land in good agricultural and environmental condition. These requirements are defined by the Member States at national or regional level. They include the following: the protection of soil against erosion, the maintenance of soil organic matter and soil structure, and the avoidance of the deterioration of habitats for wildlife.
Good Farming Practice (GFP): Member States are required to define codes of Good Farming Practice at the regional or national level. Good Farming Practice should correspond to the type of farming that a farmer would follow in the region concerned, which entails at least compliance with general statutory environmental requirements.
Health Check: Following the reform of 2003, the Common Agricultural Policy was adjusted in 2009 so that farmers would be better placed to respond to market signals, the administration of direct payments would be simplified and farmers would be helped to meet the new challenges of the future, in particular that of climate change. This adjustment is known as the Health Check.
Instrument for Pre-accession Assistance (IPA): This came into force on 1 January 2007, bringing all pre-accession support into one single, focussed instrument. It replaced the 2000-06 pre-accession financial instruments PHARE, ISPA, SAPARD, the Turkish pre-accession instrument, and the financial instrument for the Western Balkans CARDS. IPA covers the countries with candidate status (currently Croatia, the former Yugoslav Republic of Macedonia, Turkey) and potential candidate status (Albania, Bosnia and Herzegovina, Montenegro, Serbia including Kosovo according to United Nations Security Council Resolution no 1244). IPA has five components: the transition assistance and institution building (which principally involves institution building measures with accompanying investment); cross-border cooperation; regional development; human resources development; and rural development.
Integrated Administration and Control System (IACS): this is a system used by Member States to calculate the amount of direct payments to which farmers are entitled, to ensure that the payments are made correctly, to prevent irregularities and to recover amounts that are unduly paid.
Intervention buying: When market prices for an agricultural product fall below a certain level, the public authorities of the member states intervene to stabilise the market by purchasing surplus supplies, which may then be stored until the market price increases, exported to a third country or disposed of in an alternative way.
Leader: Leader stands for 'Links between actions for the development of the rural economy'. It is a method for mobilising and developing rural communities through local public-private partnerships ('Local Action Groups'). It is designed to help rural people, groups and enterprises to consider the potential of their area and to encourage the implementation of integrated, high-quality projects and programmes for sustainable development. More information
Leader Axis: In September 2005, the European Union adopted a new rural development policy. This has three core objectives, each of which has a corresponding axis. In addition to the three axes, there is a Leader axis which help the implementation of local projects and programmes and encourage Local Action Grops to cooperate amongst themselves.
Least developed countries (LDCs): These are countries where incomes are low and which suffer long-term handicaps to growth, in particular low levels of human resource development and/or severe structural weaknesses. According to the United Nations there are at present around 50 least developed countries in the world.
Less favoured
areas (LFA): areas in which farmers are entitled to financial
compensation due to a natural handicap (such as high altitude,
difficult climate or poor soil). Farmers in the hills and
mountains and in areas with another natural handicap are at a
competitive disadvantage compared to other farmers. In
acknowledgement of this fact and with a view to maintaining
farming in these areas, since the 1970s, the European Union has
provided them with financial compensation. Those areas where
farmers are eligible for this support are known as Less Favoured
Areas.
Market access: This term refers to the extent to which an exporting country has access to the markets of an importing country. Market access may be restricted if, for instance, an importing country has introduced tariffs and/or tariff quotas.
Market support: market support ensures that the price at which a farmer sells a good does not fall below a certain minimum.
Modulation: This is a mechanism that transfers funds from direct payments to rural development measures. Modulation became compulsory from 2005. Member States must apply it at the rates agreed in the 2003 reform of the common agricultural policy. It applies to the direct payments that farmers receive over and above the first 5000 EUR.
Most Deprived Persons: in the context of the Common Agricultural Policy, this term refers to citizens within the European Union who, for one reason or another, have low incomes. Because of their difficult financial situation, they receive, gratis, a certain quantity of food from the European Union.
Most Favoured Nation treatment (MFN) : Most Favoured Nation treatment requires that when a member of the World Trade Organisation grants an advantage to one country, then it must give the same treatment to all other countries that belong to the WTO. The purpose of this principle is to ensure that there is no discrimination between the countries that belong to the WTO. This principle is found in Article I of General Agreement on Tariffs and Trade 1994 as well as in other agreements.
Multifunctionality: The complementary roles that farming plays within society, over and above its role as a producer of food. It includes the contribution of farming to sustainable development, the protection of the environment, the vitality of rural areas and the maintenance of an overall balance between the incomes of farmers and the incomes of people in other occupations.
National ceiling: The 2003 reform of the common agricultural policy established a maximum amount of money that each Member State could use for direct payments from 2005 onwards. This amount is known as the national ceiling. It is based on the total of direct aids and equivalent payments that were paid during a previous period (historic reference period) in each Member State.
National Treatment: This is the principle, applying to trade and investment matters, whereby a country grants the same treatment to both its own nationals and to the nationals of other countries. Article III:4 of the General Agreement on Tariffs and Trade 1994 requires that imported goods be treated no less favourably than like goods produced by the country itself.
Natura 2000: a Community policy to protect sites that are of particular ecological value. To date, some 25 000 sites have been so designated. Many are on farms. Farmers are obliged to respect certain practices so that the ecosystem is protected. In return, farmers receive a financial payment which compensates them for the income foregone.
Non-Trade Concerns (NTC) : The Uruguay Round Agreement on Agriculture provides significant scope for governments to pursue important "non-trade" concerns such as food security, environmental measures, structural adjustment, rural development and poverty alleviation.
Organic farming: This is the production of crops and animals without the use of synthetic inputs (such as manufactured pesticides and artificial fertiliser) or genetically modified organisms. More information
Outermost regions: these are certain islands and territories on the periphery of the European Union. Because they are part of a member state, they are also part of the European Union. There are seven outermost regions: Guadeloupe, French Guiana, Martinique and Réunion (the four French overseas departments), the Canaries (Spain), and the Azores and Madeira (Portugal).
Panel: a panel, in the parlance of the World Trade Organisation, is a group of three (sometimes five) persons that hear, and adjudicate upon, disputes between countries in the field of international trade. The members of a panel serve in their individual capacities and are not affiliated to any government. The panel passes its report to the Dispute Settlement Body which can only reject the report if there is a consensus in favour of rejection.
Partial decoupling: The 2003 reform of the common agricultural policy introduced decoupling of direct payments as the general rule. However, within the framework set out by the Council, Member States may chose to keep some of their direct payments coupled to production to a certain extent.
Payment entitlements: Payment entitlements were granted to those farmers who were actively farming at the date that each Member State introduced the Single Payment Scheme. The level of payment entitlement is calculated on the basis of reference amounts (amounts of direct payments granted in the period 2000–02). During the first year of implementation of the Single Payment Scheme, these historical amounts were allocated to farmers in the form of payment entitlements using a number of so-called "models" (historical, regional, hybrid.) Every year direct payments are granted to farmers if they have 'eligible hectares' at their disposal to activate the appropriate number of payment entitlements. Member States must create 'national reserves' which are to be used to address problems arising during the transitional phase and may also be used for grants of payment entitlement to new entrants to farming.
Peace clause: Article 13 of the Uruguay Round Agreement on Agriculture (the so-called "Peace clause") protected certain domestic support measures and export subsidies from being challenged under the provisions of the General Agreement on Tariffs and Trade 1994 and of the Subsidies Agreement. The clause has now expired.
Pillars of the CAP: The 'first pillar' is the the support that is provided to farmers' incomes. This support comes in the form of market management and direct payments – it is entirely financed from the European Agricultural Guidance Fund. The 'second pillar' is the support provided for the development of rural areas. This support takes the form of rural development programmes and is co-financed from the European Agricultural Fund for Rural Development.
POSEI: This is a programme that helps farmers in the outermost regions of the European Union. It is the French acronym for the Programme d’Options Spécifiques à l’Eloignement et à l’Insularité. The programme seeks to compensate farmers for the small size of their farms, a difficult climate and the long distance to European markets.
Precautionary principle: This is a principle that applies mainly to the fields of food safety and consumer protection. It should be considered within a structured approach to the analysis of risk and is particularly relevant to the management of risk. The precautionary principle is not defined in the EC Treaty or in other Community instruments. However, in a Communication [pdf] the Commission has developed guidelines for its application. It is stated that the Community, like all other members of the World Trade Organisation, has the right to establish the level of protection that it deems appropriate. The precautionary principle covers cases where scientific evidence is insufficient, inconclusive or uncertain and preliminary scientific evaluation indicates that there are reasonable grounds for concern that the potentially dangerous effects of a good product or practice on the environment or on the health of plants, animals and humans may be inconsistent with the level of protection chosen by a particular country.
Premium: The term premium usually refers to a direct payment made to a farmer who produces beefmeat, sheepmeat and goatmeat. Prior to the 2003 reform of the common agricultural policy these payments were usually paid per head of livestock. They are now generally decoupled from production and incorporated into the Single payment scheme.
Private storage aid (PSA): The private storage of farm products enables the European Union to stabilise its agricultural markets with minimal effect on traditional marketing channels. Funds for private storage are made available through the establishment of a storage contract. This is concluded between a private company and the intervention agency of the Member State concerned, within the framework of the rules of the European Union.
Producer Organisation (PO): a legally-constituted group of farmers and growers. Producer organisations are particularly important in the fruit and vegetable sector where they assist in the distribution and marketing of products and promote their higher quality. They also encourage their members to adopt good environmental practices.
Production quotas: These are limitations on the amount of a specific product that a farmer may place on the market. They apply to milk, sugar, isoglucose, tobacco and potato starch.
Promotion policy: this is the promotion of farm products
produced in the European Union. Products are promoted both
within the European Union itself and in third countries. It is
done by organising and co-financing, together with the member
states and their professional organisations, promotion actions,
information campaigns and trade missions. Such actions raise the
public’s awareness of the qualities of the products.
Quality policy: 'Agricultural product quality policy' refers to a broad set of legal frameworks and aid measures (especially in rural development) designed to facilitate farmers to improve the quality of production and in particular to participate in food quality certification schemes. It includes specific Community schemes, such as organic farming (op cit), and the protection of geographical indications for wines, spirits and other foodstuffs, and also facilitating participation in national and private certification schemes.
Three aspects are regulated: organic farming, certain geographical names of food products and the status of 'traditional specialities'. Regarding geographical-based names, if the identity of a food is intrinsically linked to a particular place, then the name can be registered as a 'geographical indication'. Examples include: Welsh Lamb, Lubecker Marzipan and Camembert de Normandie. In the EU, the use of some geographical indications is restricted to original product. There are two types of geographical indications of which the use is restricted: one type is known as 'protected geographical indications', the other type is known as 'protected designations of origin'. Traditional food names can be registered as 'traditional specialities'. These are foods and drinks that are made according to traditional recipes. Examples include the beer Kriek and the ham Jamón Serrano. Food manufacturers who make and sell such products may only call them 'traditional specialities' if they have respected a specific and traditional recipe. If this is the case, then the food manufacturer may label the product a 'traditional speciality guaranteed'
Re-coupling:The 2003 reform of the common agricultural policy decoupled direct payments from production. Within the context of the reform decision, the Council set certain limits within which the Member States (or regions) may re-couple some direct payments in order to avoid the possibility of land falling out of production.
Regional Policy: This is one of the most important policies of the European Union. Its aim is to strengthen economic, social and territorial cohesion by reducing disparities in the level of development among regions and Member States. This means investing in regions’ indigenous potential to promote the competitiveness of regional economies and the permanent catch-up of those lagging behind the more prosperous areas. Regional policy is an expression of European Union
solidarity.
In addition, there are two more specific instruments:
Rural development policy: The rural development policy (also known as the second pillar of the common agricultural policy) seeks to maintain the vitality of the countryside through the balanced development of rural areas. Rural areas cover 90% of the territory of the European Union and around half the population lives in them. The policy focuses on three major objectives:
Corresponding to each core objective is a specific axis. To this end, a 'menu' of measures is available to the Member States. They, or regions within them, choose from this menu those measures that best suit their needs. The measures are then included in their national or regional rural development programmes. The main target groups of the programmes are farmers, foresters and other people and groups living in rural areas. The cost of the programmes is shared between the European Union and the beneficiary Member State. This arrangement is known as 'co-financing'. More information
Safety net price: a minimum price for a farm product. It is a concept that has been introduced as and when particular commodity markets have been reformed. To prevent EU market prices falling to very low levels, the European Union has set ‘safety net prices.’ These are price levels below which market prices cannot fall.
Sanitary and Phytosanitary (SPS) Measures and Agreement: These are measures to protect human, animal and plant life or health and to ensure that food is safe to eat. The Final Act of the Uruguay Round Agreement on Agriculture contains the "Agreement on the Application of Sanitary and Phytosanitary Measures" which applies to all sanitary and phytosanitary measures that may have a direct or indirect impact on international trade.
SAPARD: this stands for the Special accession programme for agriculture and rural development. It is a programme that was put in place to assist the countries of Central and Eastern Europe, before they joined the European Union. It helped them to adopt the Community acquis and to modernise their farming systems.
Set-aside: This is the removal of
farmland from production. It was introduced in the late 1980s with the
objective of reducing the amount of food produced by farmers. The
rationale was that farmers were producing moe food than the European
market could absorb.
Simplification: in the context of the Common Agricultural Policy, this refers to the continuing work by the European Union to simplify both the policy itself and its practical implementation. Among other things, the EU has reduced the number of regulations and replaced the commodity-specific market organisations with a single organisation that covers all the commodity markets.
Single Payment Scheme: A central objective of the 2003 reform of the common agricultural policy was the decoupling of direct payments. To this end, the Single Payment Scheme was introduced under which farmers receive a decoupled Single Farm Payment. More information
Special and Differential Treatment: These are provisions, within the context of the World Trade Organisation, that allow developing countries to benefit from exceptions or special treatment. These include preferential access to the markets of developed countries without having to reciprocate ie without having to provide a similar level of access to their own markets to developed countries. It also includes flexibility in the application of support measures to their own farming sectors.
Special safeguards (SSGs): Special safeguards are contingency restrictions on imports taken temporarily by an importing country to deal with special circumstances such as a sudden surge of imports. SSGs normally come under the Safeguards Agreement of the World Trade Organisation. However, the Uruguay Round Agreement on Agriculture has special provisions (Article 5) on safeguards:
Specific duty: This is an import duty, expressed as, for example, 10 dollars per tonne, 20 yen per head or 30 euro per hectolitre. The term "specific duty" contrasts with the term "as valorem duty". The latter term refers to an import duty expressed as, for example, 5% of the value of the good in question.
State aid: money made available by a government. In order to ensure a level playing field for its farmers within the European Union, in principle member states are not allowed to provide money to their farmers. The two exceptions to this rule are when the payments are of a low value or when they have been authorised by the Commission following an application by the member state concerned. In those cases where a member state has provided state aid to its farmers which, in the view of the Commission, undermines the principle of a level playing field, the farmers may be required to pay it back to the government.
Stresa Conference: This was a conference of Commission officials, national experts and representatives of farmers' organisations which decided how to accomplish the objectives of the common agricultural policy as set out in Article 39 of the Treaty of Rome. The conference was held at Stresa, on Lake Maggiore in Italy during July 1958. Its most far-reaching decision was to support agriculture by guaranteeing that the prices that farmers would receive for their products when they sold them in the market would not fall below a certain level (a mechanism of price support).
Sustainable development: The concept of sustainable development refers to a form of economic growth which satisfies society's needs in terms of well-being in the short, medium and - above all - long term. It is founded on the assumption that development must meet today's needs without jeopardising the prospects for growth of future generations. A European Union strategy for sustainable development was adopted in May 2001, and was given an external dimension by the global partnership for sustainable development which the Commission adopted in 2002. At the World Summit on Sustainable Development held in Johannesburg in August-September 2002, new objectives, work programmes and timetables were approved in the areas of water, fisheries resources, oceans, chemicals, biodiversity, energy and sustainable production and consumption. The European Union committed itself to achieve objectives which go even further than those set in Johannesburg by the other participants. When the current European Commission took up its duties in November 2004, the European Union decided to review its sustainable development strategy in light of the numerous changes that had taken place since it was adopted in 2001.
Tariff: The term 'tariff' has two meanings. Firstly it means the list, book or database of charges that are imposed by a government or public authority on goods when these are imported or exported. Secondly it means the charge itself. In its second meaning, the term 'tariff' is synonymous with the term 'duty'.
Tariff escalation: This is the difference between the level of tariff on a processed product and the level of tariff on the raw material from which it was derived.
Transparency: in the context of the Common Agricultural Policy, this is an initiative taken by the European Union which requires the member states to make available to the public information as to who receives payments under the Common Agricultural Policy.
Uruguay Round: The 8th round of multilateral trade negotiations known as the Uruguay Round, conducted within the framework of the General Agreement on Tariffs and Trade, was launched in Punta del Este, Uruguay, in 1986. It was concluded eight years later in Marrakesh in 1994, with the signature of the Final Act of the Uruguay Round. This adopted a number of individual Agreements and Decisions, including the Agreement on Agriculture, as well as provisions that set up the World Trade Organisation.
World Trade Organisation (WTO): The World Trade Organisation is an intergovernmental organisation. As of July 2007, 151 countries belonged to it - i.e. some three quarters of the countries of the world. The preamble of the document that established the organisation states that the countries that belong to it recognise that they should work towards raising standards of living, ensuring full employment and a large and steadily growing volume of real income and effective demand, and expanding the production of and trade in goods and services, while allowing for the optimal use of the world's resources in accordance with the objective of sustainable development, seeking both to protect and preserve the environment and to enhance the means for doing so in a manner consistent with their respective needs and concerns at different levels of economic development. The WTO is an autonomous organisation, meaning that it is not part of the United Nations. Neither does it have any formal relationship or legal agreement with it.
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Last update: 10-05-2008
