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Rural Development policy 2007-2013

Review of the Less Favoured Area (LFA) scheme

The Commission has adopted a Communication on 21 April 2009 on a better targeting of the aid to farmers in areas with natural handicaps. The Communication is seeking the testing of a proposed set of 8 soil and climate criteria which might be used to objectively assess and delimit agricultural areas suffering from natural handicaps. Member States are being asked to undertake simulations of these criteria using national data sources so as to enable the review process team to gauge the likely impact of the criteria prior to the presentation of a legislative proposal.


Why is the LFA scheme being reviewed?

In 2003 the implementation of the LFA scheme was subject to criticisms in a report of the European Court of Auditors, in particular as regards the designation of intermediate LFAs and the lack of targeting of the aid.

The Rural Development Policy (RDP) for 2007-2013 includes a significant evolution of the LFA scheme: within the new strategic approach adopted to enhance RDP's contribution to the overarching objectives of the EU, the natural handicap payments in mountain areas and in other areas with handicaps became part of Axis 2, which aims at improving the environment and the countryside by supporting sustainable land management.

In this context and taking into account the Court of Auditors' concerns, the approach for designating the intermediate LFAs was substantially reviewed: according to Article 50.3 (a) of Council Regulation (EC) No 1698/2005 intermediate LFAs are those suffering from natural handicaps, which do not tend to change over time, removing the reference to the socio-economic criteria used in the past. The Council also indicated that these areas should be characterised by extensive agriculture considered as important to land management.

However, in 2005 the Council could not find an agreement on a possible Community wide system for classifying intermediate LFAs, more in line with the new policy objectives. It therefore decided to maintain the previous LFA system and called for the Commission to undertake a review of the LFA measures implementation and to present a report and proposals concerning the future payment system and designation of LFAs for a Council decision.


What has been done so-far to address the problems raised by the Court of Auditors?

The Commission departments launched the LFA review exercise by way of an independent evaluation concluded in November 2006.

Meanwhile, a panel of soil, climate and land evaluation experts, co-ordinated by the Joint Research Centre of Ispra, was tasked to elaborate a scientific approach which could support the delimitation of intermediate LFAs. Based on FAO's 'Agricultural problem land approach', the expert panel identified a number of soil and climate criteria indicating, at a certain threshold value, severe limitations for standard European rain fed agriculture.

The conclusions of the expert panel were subject to a wide ranging consultation, namely in the framework of an LFA expert group made up of the representatives of European Research Institutes and of the National Authorities that met on 14 November 2007, 23 April 2008 and on 25 June 2008. As a preparation and a complement to the works of the LFA expert group, approximately 80 technical bilateral meetings between the Commission departments and the Member States have taken place since the second half of 2006, to discuss the current delimitation system and the applicability of possible common bio-physical criteria in each Member State.

An inter-service steering group (ISSG) was set up in December 2007 with the task of guiding the analysis of the economic, social and environmental impact of the revision. It is made up of representatives from 14 Directorates General and Services of the Commission. The ISSG launched a public consultation in spring 2008 on four possible options for review, focussing on a new delimitation of the intermediate LFAs.

An analysis of the economic, social and environmental aspects of the issues linked to the LFA scheme was undertaken in order to issue a Communication to the European Parliament and to the Council in April 2009.


What are the main problems identified?

The issues justifying a revision of the LFA scheme, namely as regards the so-called 'intermediate LFAs' are:

  • the inconsistencies of the current delimitation system with the revised objectives and the strategic approach set down for the Rural Development Policy for 2007-2013,
  • the extreme diversity of the criteria used by the Member States for designating the intermediate LFAs that may lead to unequal treatment of beneficiaries,
  • the insufficient targeting of the aid in the light of the objectives of the measure.


What are the main policy objectives?

The aims of the revision responds to the critical factors identified for the current system. Taking into account the high degree of subsidiarity characterising the RDP, it is envisaged to set up a rigorous and transparent approach for implementing the LFA support scheme, targeted at the achievement of the strategic objectives of the Community.

The main policy objective of the review are therefore:

  • to adapt the intermediate LFA delimitation and payment system in order to target the aid to the preservation of sustainable farming activity in areas affected by natural handicaps;
  • to ensure the transparency and controllability of the aid scheme, its consistency and complementarities with the other measures of the first and second pillars of the CAP;
  • to limit, as far as possible, the administrative burden linked to the implementation of the measure.


What are the main policy options?

The Commission presented a Communication to the Council, the European Parliament, the European Economic and Social Committee and the Committee of the Regions in April 2009. The Communication discusses the four following options for reviewing the delimitation and payment system for intermediate LFAs:

  1. 'Status Quo+', empowering the Member States to delimit LFAs according to national indicators of natural handicaps and excluding previously used socio-economic criteria, establishes a 'no policy change' reference scenario, consistent with the new LFA rationale and close to the current situation;

  2. 'Common Criteria', combines an LFA delimitation based on common and objective criteria referring to natural handicap with a limited revision of the eligibility rules, in order to improve effectiveness;

  3. 'Eligibility Rules' places emphasis on a common framework for coherent eligibility rules to be applied at farm level within the designated areas, in order to further enhance the territorial targeting;

  4. 'High Nature Value' links the support to agriculture in areas affected by natural handicaps to the preservation of high nature value farming systems defined on the basis of common criteria.

A more detailed description of these options is available at the consultation paper published on 22 May 2008.

  • Summary of the response to the consultation [pdf]

  • Presentation analysing the response to the consultation [pdf]


Are there new criteria for designating Less Favoured Areas?

The Commission departments are analysing possible options for reviewing the current delimitation methods.

Within the options considered and submitted to public consultation, there are a number of soil and climate criteria identified by a panel of soil, climate and land evaluation experts, co-ordinated by the Commission's Joint Research Centre of Ispra.


Which stakeholders and experts have been consulted?

The Inter-Service Steering Group in charge of the impact assessment has already held a series of hearings aimed at gathering the views of experts and of stakeholders on:

  • the threats posed to the continuation of sustainable farming systems in areas with natural handicaps,
  • the drawbacks of the present modalities for designating LFAs and for granting the aids,
  • the changes that could be introduced to improve the effectiveness and efficiency of the LFA scheme.

On 3 April 2008 the group presented four possible scenarios for revision of the LFA payment and delimitation system to the Advisory Group on Rural Development, made up of representatives of stakeholders active in the field of Rural Development Policies. An in-depth discussion of the options within an ad hoc working section of the same advisory group was held on 15 July 2008. The impact assessment process and the four review options were also presented to the Advisory Group on Agriculture and Environment on 17 June 2008.

On 22 May 2008 the ISSG invited interested parties and civil society to submit contributions on the basis of a public consultation document describing the four review options. By 30 June, 109 contributions were received, by NGOs, individuals, national and regional authorities. They will be summarised in the impact assessment report.


What is the planned timetable?

The Commission presented a Communication to the Council, the European Parliament, the European Economic and Social Committee and the Committee of the Regions on 21 April 2009. The Communication will pave the way for a Commission proposal to make the LFA delimitation and payment system more effective.


Are the delimitation criteria for mountain areas concerned?

No, the review exercise is focussed on the delimitation of intermediate LFAs.


Is a new LFA map available?

No, the Commission departments are analysing possible options for reviewing the current delimitation of intermediate LFAs.

It is not possible, using the pan-European data available, to draw a map of the areas that would be delimited under each option, as this would require the use of appropriate statistics indicating the proportion of the agricultural land that would qualify under the relevant criteria at LAU2 level.

The Communication is asking Member States to provide simulations of the proposed 8 soil and climate criteria using data available to them. This will enable the review team to assess the likely impact of the criteria prior to the delivery of a legislative proposal and a new classification system, likely to be in place by 2014.
 

 

 

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Last update: 21-04-2009