32003R1782

Council Regulation (EC) No 1782/2003

of 29 September 2003

establishing common rules for direct support schemes under the common agricultural policy and establishing certain support schemes for farmers and amending Regulations (EEC) No 2019/93, (EC) No 1452/2001, (EC) No 1453/2001, (EC) No 1454/2001, (EC) 1868/94, (EC) No 1251/1999, (EC) No 1254/1999, (EC) No 1673/2000, (EEC) No 2358/71 and (EC) No 2529/2001

CONTENTS

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THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Community, and in particular Articles 36, 37 and 299(2) thereof,

Having regard to the proposal from the Commission,

Having regard to the Opinion of the European Parliament(1),

Having regard to the Opinion of the European Economic and Social Committee(2),

Having regard to the Opinion of the Committee of the Regions(3),

Whereas:

(1) Common conditions should be established for direct payments under the various income support schemes in the framework of the common agricultural policy.

(2) The full payment of direct aid should be linked to compliance with rules relating to agricultural land, agricultural production and activity. Those rules should serve to incorporate in the common market organisations basic standards for the environment, food safety, animal health and welfare and good agricultural and environmental condition. If those basic standards are not met, Member States should withdraw direct aid in whole or in part on the basis of criteria which are proportionate, objective and graduated. Such withdrawal should be without prejudice to sanctions laid down now or in the future under other provisions of Community or national law.

(3) In order to avoid the abandonment of agricultural land and ensure that it is maintained in good agricultural and environmental condition, standards should be established which may or may not have a basis in provisions of the Member States. It is therefore appropriate to establish a Community framework within which Member States may adopt standards taking account of the specific characteristics of the areas concerned, including soil and climatic conditions and existing farming systems (land use, crop rotation, farming practices) and farm structures.

(4) Since permanent pasture has a positive environmental effect, it is appropriate to adopt measures to encourage the maintenance of existing permanent pasture to avoid a massive conversion into arable land.

(5) In order to achieve a better balance between policy tools designed to promote sustainable agriculture and those designed to promote rural development, a system of progressive reduction of direct payments should be introduced on a compulsory Community-wide basis for the years 2005 to 2012. All direct payments, beyond certain amounts, should be reduced by a certain percentage each year. The savings made should be used to finance measures under the rural development and allocated between Member States according to objective criteria to be defined. However, it is appropriate to establish that a certain percentage of the amounts should remain in the Member States where they have been generated. Until 2005, Member States may continue to apply the current modulation on an optional basis under Council Regulation (EC) No 1259/1999 of 17 May 1999 establishing common rules for direct support schemes under the common agricultural policy(4).

(6) With a view to ensure that the amounts for the financing of the common agricultural policy (subheading 1a) respect the annual ceilings set in the financial perspectives, it is appropriate to provide for a financial mechanism to adjust, where necessary, the direct payments. An adjustment of direct support should be fixed when the forecasts indicate that the subheading 1a, with a security margin of EUR 300 million, is exceeded in a given budget year.

(7) In view of the structure adjustments resulting from the abolition of rye intervention, it is appropriate to provide for transitional measures for certain rye production regions financed with part of the amounts generated by modulation.

(8) In order to help farmers to meet the standards of modern, high-quality agriculture, it is necessary that Member States establish a comprehensive system offering advice to commercial farms. The farm advisory system should help farmers to become more aware of material flows and on-farm processes relating to the environment, food safety, animal health and welfare without in any way affecting their obligation and responsibility to respect those standards.

(9) In order to facilitate the introduction of the farm advisory system, it should be provided for a time-period for Member States to set-up the system. Entry into the system should be on a voluntary basis for farmers with a priority for those who receive more than a certain amount per year in direct payments. Due to its nature of affording advice to farmers, it is appropriate for the information obtained in the course of the advisory activity to be treated as confidential, except in case of serious infringements of Community or national law.

(10) Member States must, in accordance with Article 8 of Council Regulation (EC) No 1258/1999 of 17 May 1999 on the financing of the common agricultural policy(5), take the measures necessary to satisfy themselves that transactions financed by the "Guarantee" Section of the European Agricultural Guidance and Guarantee Fund (EAGGF) are actually carried out and are executed correctly, and prevent and deal with irregularities.

(11) In order to improve the effectiveness and usefulness of the administration and control mechanisms, it is necessary to adapt the system established by Council Regulation (EEC) No 3508/92 of 27 November 1992 establishing an integrated administration and control system for certain Community aid schemes(6) with a view to including the single payment scheme, the support schemes for durum wheat, protein crops, energy crops, rice, potato starch, nuts, milk, seed, grain legumes and specific regional aids as well as controls on the application of the rules on cross compliance, modulation and the farm advisory system. Provision should be made for the possibility of including, at a later stage, other aid schemes.

(12) For the sake of effective control and to prevent the submission of multiple aid applications to different paying agencies within one Member State, each Member State should set up a single system to record the identity of farmers submitting aid applications subject to the integrated system.

(13) The various components of the integrated system are aimed at a more effective administration and control. Therefore, in the case of Community schemes not covered by this Regulation, the Member States should be authorised to avail themselves of the system, on condition they do not in any way act contrary to the provisions concerned.

(14) Given the complexity of the system and the large number of aid applications to be processed, it is essential to use the appropriate technical resources and administration and control methods. As a result, the integrated system should comprise, in each Member State, a computerised data base, an identification system for agricultural parcels, aid applications from farmers, a harmonised control system and, in the single payment scheme, a system for the identification and recording of payment entitlements.

(15) To enable the data collected to be processed and used for the verification of aid applications, it is necessary to set up high-performance computerised data bases which make it possible in particular to carry out cross-checks.

(16) The identification of agricultural parcels is a key element in the correct application of schemes linked to surface area. Experience has shown that the existing methods have certain deficiencies. Therefore, provision should be made for an identification system to be set up, where necessary, with the aid of remote sensing.

(17) For the sake of simplification, Member States should be authorised to make provision for the submission of a single application for several aid schemes and to replace the annual application by a permanent application subject only to annual confirmation.

(18) Member States should be enabled to use amounts which become available as a result of payment reductions under modulation for certain additional measures in the framework of rural development support provided for under Council Regulation (EC) No 1257/1999 of 17 May 1999 on support for rural development from the European Agricultural Guidance and Guarantee Fund (EAGGF)(7).

(19) Since the amounts which will become available as a result of cross compliance are not foreseeable sufficiently far ahead to be used for additional measures in the framework of rural development support, those amounts should be credited to the EAGGF "Guarantee" Section, except for a certain percentage which should be retained by the Member States.

(20) Payments provided for under Community support schemes should be made by the competent national authorities to beneficiaries in full, subject to any reductions provided for in this Regulation, and within prescribed periods.

(21) The support schemes under the common agricultural policy provide for direct income support in particular with a view to ensuring a fair standard of living for the agricultural community. This objective is closely related to the maintenance of rural areas. In order to avoid misallocations of Community funds, no support payments should be made to farmers who have artificially created the conditions required to obtain such payments.

(22) Common support schemes have to be adapted to developments, if necessary within short time limits. Beneficiaries cannot, therefore, rely on support conditions remaining unchanged and should be prepared for a possible review of schemes in the light of market developments.

(23) In view of the significant budgetary implications of direct payment support and in order to better appraise their impact, Community schemes should be subject to a proper evaluation.

(24) Enhancing the competitiveness of Community agriculture and promoting food quality and environment standards necessarily entail a drop in institutional prices for agricultural products and an increase in the costs of production for agricultural holdings in the Community. To achieve those aims and promote more market-oriented and sustainable agriculture, it is necessary to complete the shift from production support to producer support by introducing a system of decoupled income support for each farm. While decoupling will leave the actual amounts paid to farmers unchanged, it will significantly increase the effectiveness of the income aid. It is, therefore, appropriate to make the single farm payment conditional upon cross-compliance with environmental, food safety, animal health and welfare, as well as the maintenance of the farm in good agricultural and environmental condition.

(25) Such a system should combine a number of existing direct payments received by a farmer from various schemes in a single payment, determined on the basis of previous entitlements, within a reference period, adjusted to take into account the full implementation of measures introduced in the framework of Agenda 2000 and of the changes to the amounts of aid made by this Regulation.

(26) Since the benefits in terms of administrative simplification will increase if many sectors are included the scheme should, in a first stage, cover all products included in the arable crops regime as well as grain legumes, seeds, beef and sheep. The revised payments for rice and durum wheat as well as the payment in the milk sector once the reform is fully implemented, should also be integrated into the scheme. Payments for starch potatoes and dried fodder should also be included in the scheme, while separate payments for the processing industry should be maintained.

(27) Specific measures should be laid down for hemp, to ensure that illegal crops cannot be hidden among the crops eligible for the single payment, thereby adversely affecting the common market organisation for hemp. Provision should therefore be made for area payments to be granted only for areas sown to varieties of hemp offering certain guarantees with regard to the psychotropic substance content. The references to the specific measures provided for by Council Regulation (EC) No 1673/2000 of 27 July 2000 on the common organisation of the markets in flax and hemp grown for fibre(8) should be adapted accordingly.

(28) In order to leave farmers free to choose what to produce on their land, including products which are still under coupled support, thus increasing market orientation, the single payment should not be conditional on production of any specific product. However, in order to avoid distortions of competition some products should be excluded from production on eligible land.

(29) In order to establish the amount to which a farmer should be entitled under the new scheme, it is appropriate to refer to the amounts granted to him during a reference period. To take account of specific situations, a national reserve should be established. That reserve may also be used to facilitate the participation of new farmers in the scheme. The single payment should be established at farm level.

(30) The overall amount to which a farm is entitled should be split into parts (payment entitlements) and linked to a certain number of eligible hectares to be defined, in order to facilitate transfer of the premium rights. To avoid speculative transfers leading to the accumulation of payment entitlements without a corresponding agricultural basis, in granting aid, it is appropriate to provide for a link between entitlements and a certain number of eligible hectares, as well as the possibility of limiting the transfer of entitlements within a region. Specific provisions should be laid down for aid not directly linked to an area taking into account the peculiar situation of sheep and goat rearing.

(31) To ensure that the total level of support and entitlements do not exceed current budgetary constraints at Community or national level and, where applicable, at regional level, it is appropriate to provide for national ceilings calculated as the sum of all funds granted in each Member State for the payment of aids under the relevant support schemes, during the reference period and taking into account later adjustments. Proportional reductions should be applicable if the ceiling is overshot.

(32) In order to maintain the supply control benefits of set-aside, while reinforcing its environmental benefits under the new system of support, the set-aside conditions for arable land should be maintained.

(33) In order to allow flexibility to respond to specific situations, Member States should have the option to define a certain balance between individual payment entitlements and regional or national averages and between existing payments and the single payment. A specific derogation to the prohibition on cultivating fruits and vegetables including table potatoes should be provided for avoiding that in case of regionalisation this does not lead to a disruption of the production whilst minimizing any effect on distortion of competition. Moreover, in order to take into account its agricultural specific conditions, it is appropriate to provide for the possibility for a Member State to ask for a transitional period to implement the single payment scheme while continuing to respect the budgetary ceilings fixed for the single payment scheme. In case of severe distortions of competition during the transitional period and in order to ensure the respect of the Community international obligations, it is appropriate that the Commission can take the necessary measures to cope with such situations.

(34) In case of optional or transitional implementation, in order to protect the legitimate expectations of farmers, it is appropriate to fix a date before which Member States have to take their decision to apply the single payment scheme. Moreover, to ensure the continuation of the current regimes, certain conditions for entitlement to aid should be established, leaving to the Commission the powers to lay down the implementing rules.

(35) In order to maintain the role of durum wheat production in traditional production area while strengthening the granting of the aid to durum wheat respecting certain minimum quality requirements, it is appropriate to reduce, over a transitional period, the current specific supplement for durum wheat in traditional areas and to abolish the special aid in established areas. Only cultivation which produces durum wheat suitable for use in the manufacture of semolina and pasta products should be eligible for that aid.

(36) In order to strengthen the role of protein-rich crops and to provide an incentive to increase the production of these crops, it is appropriate to provide for a supplementary payment for farmers producing these crops. To ensure a correct application of the new scheme, certain conditions for entitlement to aid should be established. A maximum guaranteed area should be prescribed and proportional reductions applied if the maximum guaranteed area is exceeded.

(37) In order to maintain the role of rice production in traditional production areas, it is appropriate to provide for a supplementary payment for rice producers. To ensure a correct application of the new scheme, certain conditions for entitlement to aid should be established. National base areas should be established and reductions applied if the areas are exceeded.

(38) New support arrangements for nuts should be established to avoid the potential disappearance of nut production in traditional areas and the subsequent negative environmental, rural, social and economic consequences. To ensure a correct application of the new arrangements, certain conditions for entitlement to aid should be established, including a minimum tree density and plot size. In order to cater for specific needs, Member States should be entitled to provide additional aid.

(39) To avoid budgetary overshoot, a maximum guaranteed area should be prescribed and proportional reductions applied if the maximum guaranteed area is exceeded, concentrated in Member States which overshoot their area. To ensure balanced application throughout the Community, this area should be allocated in proportion to areas of nut production in Member States. The Member States should be responsible for allocating the areas within their territory. Areas subject to improvement plans should not be eligible for aid under the new scheme until the plan has expired.

(40) In order to capitalise on the success of improvement plans in regrouping supply, Member States may make entitlement to Community aid and national aid conditional on membership of producer organisations. To avoid disruption, a smooth transition must be ensured to the new scheme.

(41) Currently, support for energy crops consists of the possibility to grow industrial crops on set-aside land. Energy crops account for the largest amount of non-food production on set-aside land. Specific aid for energy crops with the objective of increasing carbon dioxide substitution should be established. A maximum guaranteed area should be prescribed and proportional reductions applied if the maximum guaranteed area is exceeded. The arrangements should be reviewed after a prescribed period taking into account the implementation of the Community biofuels initiative.

(42) In order to maintain starch production in traditional areas of production and to recognise the role of potato production in the agronomic cycle, it is appropriate to provide for a supplementary payment for potato starch producers. Moreover, in so far as the payment system for starch potato producers is to be partially included in the single payment scheme, Council Regulation (EC) No 1868/94 of 27 July 1994 establishing a quota system in relation to the production of potato starch(9) should be amended.

(43) The inclusion of arable crops, beef and sheep extends the single payment scheme to premiums which are paid in the outermost regions and Aegean islands, in order to achieve further simplification and to avoid leaving in place a legal and administrative framework for a limited number of farmers in those areas. However, in order to maintain the role of certain type of production in these regions of the Community, it is appropriate to provide that Member States may decide that they need not include those payments in the single payment scheme. The same possibility should apply to the supplementary payments in certain regions of Sweden and Finland as well as to seed aid. In this cases, the continuation of the current regimes requires that certain conditions for entitlement to aid shall be established, leaving to the Commission the powers to lay down the implementing rules.

(44) In order to facilitate the transition between the current regimes for arable crops payments and livestock premiums and the new single payment scheme, it is appropriate to provide for some adaptations to the current direct payments in those sectors.

(45) Agricultural activity in the Azores is highly dependent on milk production. It thus is advisable to renew and extend the measures taken in Article 23 of Regulation (EC) No 1453/2001 of 28 June 2001 introducing specific measures for certain agricultural products for the Azores and Madeira(10) and to derogate for a period of six marketing years in total beginning in 1999/2000 from certain provisions of the common market organisation for milk and milk products as regard of limitation of production in order to take account of the level of development of and the conditions for local production. Over the period of its application, this measure should enable the sector in the Azores to continue being restructured without interfering with the milk market and without appreciably affecting the sound working of the levy scheme at Portuguese or Community level.

(46) The application of the single farm payment scheme will de facto imply that the conversion programme of land currently under arable crops to extensive livestock farming in Portugal laid down in Regulation (EC) No 1017/94(11) becomes without object. Regulation (EC) No 1017/94 should therefore be repealed by the entry into force of the single payment scheme.

(47) As a result of the aforementioned changes and new provisions, Council Regulations (EEC) No 3508/92, (EC) No 1577/96 of 30 July 1996 introducing a specific measure in respect of certain grain legumes(12) and (EC) No 1251/1999 of 17 May 1999 establishing a support system for producers of certain arable crops(13) should be repealed. Regulation (EC) No 1259/1999 should also be repealed, except some provisions which provide for specific temporary and optional regimes.

(48) The specific provisions concerning direct payments in Council Regulations (EEC) No 2358/71 of 26 October 1971 on the common organisation of the market in seeds(14), No 2019/93 of 19 July 1993 introducing specific measures for the smaller Aegean islands concerning certain agricultural products(15), (EC) No 1254/1999 of 17 May 1999 on the common organisation of the market in beef and veal(16), (EC) No 1452/2001 of 28 June 2001 introducing specific measures for certain agricultural products for the French overseas departments(17), (EC) No 1454/2001 of 28 June 2001 introducing specific measures for certain agricultural products for the Canary Islands(18) and (EC) No 2529/2001 of 19 December 2001 on the common organisation of the market in sheepmeat and goatmeat(19) have effectively lost their substance and should therefore be deleted.

(49) At the time of entry into force of this regulation, the Community consists of 15 Member States. Taking into account the fact that, according to the Treaty of Accession of 2003, the accession of the new Member States is to take place on 1 May 2004, this Regulation should be adapted, by the date of accession, according to the procedures provided for by that Treaty, in order to make it applicable to the new Member States.

(50) The measures necessary for the implementation of this Regulation should be adopted in accordance with Council Decision 1999/468/EC of 28 June 1999 laying down the procedures for the exercise of implementing powers conferred on the Commission(20),

HAS ADOPTED THIS REGULATION:

TITLE I

SCOPE AND DEFINITIONS

Article 1

Scope

This Regulation establishes:

- common rules on direct payments under income support schemes in the framework of the common agricultural policy which are financed by the "Guarantee" Section of the European Agricultural Guidance and Guarantee Fund (EAGGF), except those provided for under Regulation (EC) No 1257/1999;

- an income support for farmers (hereinafter referred to as the "single payment scheme");

- support schemes for farmers producing durum wheat, protein crops, rice, nuts, energy crops, starch potatoes, milk, seeds, arable crops, sheep meat and goat meat, beef and veal and grain legumes.

Article 2

Definitions

For the purposes of this Regulation, the following definitions shall apply:

(a) "farmer" means a natural or legal person, or a group of natural or legal persons, whatever legal status is granted to the group and its members by national law, whose holding is situated within Community territory, as referred to in Article 299 of the Treaty, and who exercises an agricultural activity,

(b) "holding" means all the production units managed by a farmer situated within the territory of the same Member State,

(c) "agricultural activity" means the production, rearing or growing of agricultural products including harvesting, milking, breeding animals and keeping animals for farming purposes, or maintaining the land in good agricultural and environmental condition as established under Article 5,

(d) "direct payment" means a payment granted directly to farmers under an income support scheme listed in Annex I,

(e) "payments in a given calendar year" or "payments in the reference period" means the payments granted or to be granted in respect of the year/years concerned, including all payments in respect of other periods starting in that calendar year/years,

(f) "agricultural products" means the products listed in Annex I of the Treaty, including cotton, but with the exception of fishery products.

TITLE II

GENERAL PROVISIONS

CHAPTER 1

CROSS COMPLIANCE

Article 3

Main requirements

1. A farmer receiving direct payments shall respect the statutory management requirements referred to in Annex III, according to the timetable fixed in that Annex, and the good agricultural and environmental condition established under Article 5.

2. The competent national authority shall provide the farmer with the list of statutory management requirements and good agricultural and environmental condition to be respected.

Article 4

Statutory management requirements

1. The statutory management requirements referred to in Annex III shall be established by Community legislation in the following areas:

- public, animal and plant health,

- environment,

- animal welfare.

2. The acts referred to in Annex III shall apply within the framework of this Regulation in the version as amended from time to time and, in case of Directives, as implemented by the Member States.

Article 5

Good agricultural and environmental condition

1. Member States shall ensure that all agricultural land, especially land which is no longer used for production purposes, is maintained in good agricultural and environmental condition. Member States shall define, at national or regional level, minimum requirements for good agricultural and environmental condition on the basis of the framework set up in Annex IV, taking into account the specific characteristics of the areas concerned, including soil and climatic condition, existing farming systems, land use, crop rotation, farming practices, and farm structures. This is without prejudice to the standards governing good agricultural practices as applied in the context of Council Regulation (EC) No 1257/1999 and to agri-environment measures applied above the reference level of good agricultural practices.

2. Member States shall ensure that land which was under permanent pasture at the date provided for the area aid applications for 2003 is maintained under permanent pasture.

However a Member State may, in duly justified circumstances, derogate from the first subparagraph, provided that it takes action to prevent any significant decrease in its total permanent pasture area.

The first subparagraph shall not apply to land under permanent pasture to be afforested, if such afforestation is compatible with the environment and with the exclusion of plantations of Christmas trees and fast growing species cultivated in the short term.

Article 6

Reduction or exclusion from payments

1. Where the statutory management requirements or good agricultural and environmental condition are not complied with, as a result of an action or omission directly attributable to the individual farmer, the total amount of direct payments to be granted in the calendar year in which the non-compliance occurs, and after application of Articles 10 and 11, shall be reduced or cancelled in accordance with the detailed rules laid down under Article 7.

2. The reductions or exclusions referred to in paragraph 1 shall only apply if the non-compliance relates to:

(a) an agricultural activity, or

(b) an agricultural land of the holding, including the parcels on set aside.

Article 7

Detailed rules for reduction or exclusion

1. Detailed rules for the reductions and exclusions referred to in Article 6 shall be laid down in accordance with the procedure referred to in Article 144(2). In this context, account shall be taken of the severity, extent, permanence and repetition of the non-compliance found as well as of the criteria set out in paragraphs 2, 3 and 4 of this Article.

2. In case of negligence, the percentage of reduction shall not exceed 5 % and, in case of repeated non-compliance, 15 %.

3. In case of intentional non-compliance, the percentage of reduction shall not in principle be less than 20 % and may go as far as total exclusion from one or several aid schemes and apply for one or more calendar years.

4. In any case, the total amount of reductions and exclusions for one calendar year shall not be more than the total amount referred to in Article 6(1).

Article 8

Review

By 31 December 2007 at the latest, the Commission shall submit a report on the application of the system of cross compliance accompanied, if necessary, by appropriate proposals notably with the view of amending the list of statutory management requirements set out in Annex III.

Article 9

Amounts resulting from cross compliance

The amount resulting from the application of this Chapter shall be credited to the EAGGF "Guarantee" Section. Member State may retain 25 % of those amounts.

CHAPTER 2

MODULATION AND FINANCIAL DISCIPLINE

Article 10

Modulation

1. All the amounts of direct payments to be granted in a given calendar year to a farmer in a given Member State shall be reduced for each year until 2012 by the following percentages:

- 2005: 3 %,

- 2006: 4 %,

- 2007: 5 %,

- 2008: 5 %,

- 2009: 5 %,

- 2010: 5 %,

- 2011: 5 %,

- 2012: 5 %.

2. The amounts resulting from application of the reductions provided for in paragraph 1, after deducting the total amounts referred to in Annex II, shall be available as additional Community support for measures under rural development programming financed under the EAGGF "Guarantee" Section according to Regulation (EC) No 1257/1999.

3. The amount corresponding to one percentage point shall be allocated to the Member State where the corresponding amounts have been generated. The remaining amounts shall be allocated to the Member States concerned in accordance with the procedure referred to in Article 144(2) on the basis of the following criteria:

- agricultural area,

- agricultural employment,

- gross domestic product (GDP) per capita in purchasing power.

However, any Member State shall receive at least 80 % of the total amounts which the modulation has generated in that Member State.

4. By way of derogation from the second subparagraph of paragraph 3, if in a Member State the proportion of rye as part of its total cereal production exceeded 5 % on average during the period 2000-2002 and its proportion of the total Community production of rye exceeded 50 % during the same period, at least 90 % of the amounts which the modulation generated in the Member State concerned shall be reallocated to that Member State, until 2013 included.

In such a case, without prejudice to the possibility provided for by Article 69, at least 10 % of the amount allocated to the Member State concerned shall be available for measures referred to in paragraph 2 of this Article in rye producing regions.

For the purpose of this paragraph, "cereals" mean the cereals referred to in Annex IX.

5. Paragraph 1 shall not apply to direct payments granted to farmers in the French overseas departments, in the Azores and Madeira, in the Canary and Aegean islands.

Article 11

Financial discipline

1. Starting with the budget 2007, with a view to ensuring that the amounts for the financing of the common agricultural policy currently under subheading 1a (market measures and direct aids) respect the annual ceilings set out in the Decision of the Representatives of the Governments of the Member States, meeting within the Council on 18 November 2002, concerning the Conclusions of the European Council meeting in Brussels on 24 and 25 October 2002, an adjustment of the direct payments shall be fixed when the forecasts indicate that the amounts foreseen under subheading 1a taking into account a margin of EUR 300 million below the amounts foreseen and before application of modulation provided for in Article 10(2), will be exceeded in a given budget year. This is without prejudice to the financial perspectives for 2007-2013.

2. The Council, on a Commission's proposal presented not later than 31 March of the calendar year in respect of which the adjustments referred to in paragraph 1 apply, shall fix these adjustments at latest by 30 June of the calendar year in respect of which the adjustments apply.

Article 12

Additional amount of aid

1. An additional amount of aid shall be granted to farmers receiving direct payments under this Regulation.

The additional amount of aid shall be equal to the amount resulting from the application of the percentages of reduction for that calendar year under Article 10 to the first EUR 5000 or less of direct payments.

2. The total additional amounts of aid which may be granted in a Member State in a calendar year shall not be higher than the ceilings set out in Annex II. Where necessary, Member States shall proceed to a linear percentage adjustment of additional amounts of aid in order to respect the ceilings set out in Annex II.

3. The additional amount of aid shall not be subject to the reductions referred to in Article 10.

4. Starting with the budget 2007, the Commission, in accordance with the procedure referred to in Article 144(2), shall review the ceilings set out in Annex II in order to take into account structural changes of the holdings.

CHAPTER 3

FARM ADVISORY SYSTEM

Article 13

Farm advisory system

1. By 1 January 2007, Member States shall set up a system of advising farmers on land and farm management (hereinafter referred to as the "farm advisory system") operated by one or more designated authorities or by private bodies.

2. The advisory activity shall cover at least the statutory management requirements and the good agricultural and environmental condition referred to in Chapter I.

Article 14

Conditions

1. Farmers may participate in the farm advisory system on a voluntary basis.

2. Member States shall give priority to the farmers who receive more that EUR 15000 of direct payments per year.

Article 15

Obligations of approved private bodies and designated authorities

Without prejudice to national legislation concerning public access to documents, Member States shall ensure that private bodies and designated authorities referred to in Article 13 do not disclose personal or individual information and data they obtain in their advisory activity to persons other than the farmer managing the holding concerned, except any irregularity or infringement found during their activity which is covered by an obligation laid down in Community or national law to inform a public authority, in particular in case of criminal offences.

Article 16

Review

By 31 December 2010 at the latest, the Commission shall submit a report on the application of the farm advisory system, accompanied, if necessary, by appropriate proposals with a view of rendering it compulsory.

CHAPTER 4

INTEGRATED ADMINISTRATION AND CONTROL SYSTEM

Article 17

Scope

Each Member State shall set up an integrated administration and control system, hereinafter referred to as the "integrated system".

The integrated system shall apply to the support schemes established under Titles III and IV of this Regulation and under Article 2a of Regulation (EC) No 1259/1999.

To the extent necessary, it shall also apply to the administration and control of the rules laid down in Chapters 1, 2 and 3.

Article 18

Elements of the integrated system

1. The integrated system shall comprise the following elements:

(a) a computerised data base,

(b) an identification system for agricultural parcels,

(c) a system for the identification and registration of payment entitlements as referred to in Article 21,

(d) aid applications,

(e) an integrated control system,

(f) a single system to record the identity of each farmer who submits an aid application.

2. In case of application of Articles 67, 68, 69, 70 and 71, the integrated system shall comprise a system of identification and registration of animals set up in accordance with Directive 92/102/EEC(21) and Regulation (EC) No 1760/2000(22).

Article 19

Computerised data base

1. The computerised data base shall record, for each agricultural holding, the data obtained from aid applications.

This data base shall, in particular, allow direct and immediate consultation, through the competent authority of the Member State, of the data relating to the calendar and/or marketing years starting from the year 2000.

2. The Member States may set up decentralised data bases on condition that these, and the administrative procedures for recording and accessing data, are designed homogeneously throughout the territory of the Member State and are compatible with one another in order to allow cross-checks.

Article 20

Identification system for agricultural parcels

The identification system for agricultural parcels shall be established on the basis of maps or land registry documents or other cartographic references. Use shall be made of computerised geographical information system techniques including preferably aerial or spatial orthoimagery, with an homogenous standard guaranteeing accuracy at least equivalent to cartography at a scale of 1:10000.

Article 21

System for the identification and registration of payment entitlements

1. The system for the identification and registration of payment entitlements shall be set up allowing verification of entitlements and cross-checks with the aid applications and the identification system for agricultural parcels.

2. This system shall allow direct and immediate consultation, through the competent authority of the Member State, of the data relating to at least the previous three consecutive calendar and/or marketing years.

Article 22

Aid applications

1. Each year, a farmer shall submit an application for direct payments subject to the integrated system, indicating, where applicable:

- all agricultural parcels of the holding,

- the number and amount of payment entitlements,

- any other information provided for by this Regulation or by the Member State concerned.

2. A Member State may decide that the aid application needs to contain only changes with respect to the aid application submitted the previous year. A Member State shall distribute pre-printed forms based on the areas determined in the previous year and supply graphic material indicating the location of those areas.

3. A Member State may decide that a single aid application shall cover several or all support schemes listed in Annex I or other support schemes.

Article 23

Verification of eligibility conditions

1. Member States shall carry out administrative checks on the aid applications including a verification of the eligible area and the corresponding payment entitlements.

2. Administrative checks shall be supplemented by a system of on-the-spot checks to verify eligibility for the aid. For this purpose, Member States shall draw up a sampling plan of agricultural holdings.

Member States may use remote sensing techniques as a means to carry out on-the-spot checks on agricultural parcels.

3. Each Member State shall designate an authority responsible for coordinating the checks provided for in this Chapter.

Where the Member State provides for the delegation of some aspects of the work to be carried out under this Chapter to specialised agencies or firms, the designated authority shall retain control over, and responsibility for, that work.

Article 24

Reductions and exclusions

1. Without prejudice to reductions and exclusions provided for in Article 6 of this Regulation, where it is found that the farmer does not comply with the eligibility conditions relevant to the granting of the aid as provided for in this Regulation or by Article 2a of Regulation (EC) No 1259/1999, the payment or part of the payment granted or to be granted for which the conditions of eligibility have been meet shall be subject to reductions and exclusions to be laid down in accordance with the procedure referred to in Article 144(2) of this Regulation.

2. The percentage of reduction shall be graduated according to the severity, extent, permanence and repetition of the non-compliance found and may go as far as total exclusion from one or several aid schemes for one or more calendar years.

Article 25

Controls on cross compliance

1. Member States shall carry out on-the-spot-checks to verify whether the farmer complies with the obligations referred to in Chapter 1.

2. Member States may make use of their existing administration and control systems to ensure compliance with the statutory management requirements and good agricultural and environmental condition referred to in Chapter 1.

These systems, and notably the system for identification and registration of animals set up in accordance with Directive 92/102/EEC and Regulation (EC) No 1760/2000, shall be compatible, within the meaning of Article 26 of this Regulation, with the integrated system.

Article 26

Compatibility

For the purpose of applying the support schemes listed in Annex V, Member States shall ensure that the administration and control procedures applied to these schemes are compatible with the integrated system in the following respects:

(a) the computerised data base;

(b) the identification systems for agricultural parcels;

(c) administrative checks.

To this end, these systems shall be set up so as to allow, without any problems or conflicts, a common functioning of, or the exchange of data between, them.

Member States may, for the purposes of applying Community or national support schemes other than those listed in Annex V, incorporate in their administration and control procedures one or more components of the integrated system.

Article 27

Information and checks

1. The Commission shall be kept regularly informed of the application of the integrated system.

It shall organise exchanges of views on this subject with the Member States.

2. After informing the competent authorities concerned in good time, authorised representatives appointed by the Commission may carry out:

- any examination or control relating to the measures taken in order to establish and to implement the integrated system,

- checks at the specialised agencies and firms referred to in Article 23(3).

Officials of the Member State concerned may take part in such checks. The aforementioned powers to carry out checks shall not affect the application of national law provisions which reserve certain acts for officials specifically designated by national law. The authorised representatives appointed by the Commission shall in particular not participate in home visits to or the formal interrogation of suspects under the national law of the Member State. They shall, however, have access to the information obtained thereby.

3. Without prejudice to the responsibilities of the Member States for the implementation and application of the integrated system, the Commission may seek the assistance of specialised bodies or persons in order to facilitate the establishment, monitoring and utilisation of the integrated system, in particular with a view to providing the competent authorities of the Member States with technical advice, should they request it.

CHAPTER 5

OTHER GENERAL PROVISIONS

Article 28

Payment

1. Save as otherwise provided for in this Regulation, payments under support schemes listed in Annex I shall be made in full to the beneficiaries.

2. Payments shall be made once a year within the period from 1 December to 30 June of the following calendar year.

However, the additional amount of aid provided for in Article 12 shall be paid by 30 September at the latest of the calendar year following the calendar year concerned.

3. By way of derogation from paragraph 2 of this Article and in accordance with the procedure referred to in Article 144(2), the Commission may:

(a) extend the date of payment for the payments provided for in Article 5(1) of Regulation 136/66/EEC of the Council of 22 September 1966 on the establishment of a common organisation of the market in oils and fats(23);

(b) provide for advances;

(c) authorise the Member States, subject to the budgetary situation, to pay prior to 1 December advances in regions where, due to exceptional conditions, farmers face severe financial difficulties:

- of up to 50 % of the payments,

or

- of up to 80 % of the payments in case advances have already been provided for.

Article 29

Restriction of payment

Without prejudice to any specific provisions in individual support schemes, no payment shall be made in favour of beneficiaries for whom it is established that they artificially created the conditions required for obtaining such payments with a view to obtaining an advantage contrary to the objectives of that support scheme.

Article 30

Review

Support schemes listed in Annex I shall be applied without prejudice to possible review at any moment in the light of market developments and the budgetary situation.

Article 31

Evaluation

In order to gauge their effectiveness, payments under support schemes listed in Annex I shall be subject to evaluation designed to appraise their impact with respect to their objectives and to analyse their effects on the relevant markets.

Article 32

Interventions under Regulation (EC) No 1258/1999

The support schemes listed in Annex I shall be considered as "intervention" as referred to in Article 1(2)(b) and Article 2(2) of Regulation (EC) No 1258/1999.

TITLE III

SINGLE PAYMENT SCHEME

CHAPTER 1

GENERAL PROVISIONS

Article 33

Eligibility

1. Farmers shall have access to the single payment scheme if:

(a) they have been granted a payment in the reference period referred to in Article 38 under at least one of the support schemes referred to in Annex VI, or

(b) they have received the holding or part of the holding, by way of actual or anticipated inheritance, by a farmer who met the conditions referred to in point (a), or

(c) they have received a payment entitlement from the national reserve or by transfer.

2. In case the farmer who has been granted a direct payment in the reference period changes his legal status or denomination in that period or not later than 31 December of the year preceding the year of application of the single payment scheme, he shall have access to the single payment scheme under the same conditions as the farmer originally managing the holding.

3. In case of mergers during the reference period or not later than 31 December of the year preceding the year of application of the single payment scheme, the farmer managing the new holding shall have access to the single payment scheme under the same conditions as the farmers managing the original holdings.

In case of scissions during the reference period or not later than 31 December of the year preceding the year of application of the single payment scheme, the farmers managing the holdings shall have access, pro rata, to the single payment scheme under the same conditions as the farmer managing the original holding.

Article 34

Application

1. The first year of application of the single payment scheme, the competent authority of the Member State shall send an application form to the farmers referred to in Article 33(1)(a) indicating:

(a) the amount referred to in Chapter 2 (hereinafter referred to as the "reference amount");

(b) the number of hectares referred to in Article 43;

(c) the number and value of payment entitlements as defined in Chapter 3.

2. Farmers shall apply to the single payment scheme by a date, to be fixed by Member States, but not later than 15 May.

However, the Commission, in accordance with the procedure referred to in Article 144(2), may allow the date of 15 May to be postponed in certain zones where exceptional climatic conditions render the normal dates inapplicable.

3. Except in case of force majeure and exceptional circumstances within the meaning of Article 40(4), no entitlements shall be allocated to farmers referred to in Article 33(1)(a) and (b) and to those who receive payment entitlements from the national reserve, if they do not apply to the single payment scheme by 15 May of the first year of application of the single payment scheme.

The amounts corresponding to those entitlements not allocated shall revert to the national reserve referred to in Article 42 and shall be available for reallocation by a date to be fixed by the Member State but not later than 15 August of the first year of application of the single payment scheme.

Article 35

Double claims

The area corresponding to the number of eligible hectares as defined in Article 44(2) in respect of which a single payment application is submitted may be the subject of an application for any other direct payment as well as for any other aid not covered by this Regulation, save as otherwise provided.

Article 36

Payment

1. Aid under the single payment scheme shall be paid in respect of payment entitlements as defined in Chapter 3, accompanied by an equal number of eligible hectares as defined in Article 44(2).

2. Member States may decide to combine payments under the single payment scheme with payments under any other support scheme.

CHAPTER 2

ESTABLISHMENT OF THE AMOUNT

Article 37

Calculation of the reference amount

1. The reference amount shall be the three-year average of the total amounts of payments, which a farmer was granted under the support schemes referred to in Annex VI, calculated and adjusted according to Annex VII, in each calendar year of the reference period referred to in Article 38.

2. By way of derogation from paragraph 1, when a farmer commences an agricultural activity in the reference period, the average shall be based on the payments he was granted in the calendar year or years during which he exercised the agricultural activity.

Article 38

Reference period

The reference period shall comprise the calendar years 2000, 2001 and 2002.

Article 39

Application of modulation and cross-compliance laid down under Regulation (EC) No 1259/1999

In case of application of Articles 3 and 4 of Regulation (EC) No 1259/1999 during the reference period, the amounts referred to in Annex VII shall be those that would have been granted before application of the said Articles.

Article 40

Hardship cases

1. By way of derogation from Article 37, a farmer whose production was adversely affected during the reference period by a case of force majeure or exceptional circumstances occurring before or during that reference period shall be entitled to request that the reference amount be calculated on the basis of the calendar year or years in the reference period not affected by the case of force majeure or exceptional circumstances.

2. If the whole reference period was affected by the case of force majeure or exceptional circumstances, the Member State shall calculate the reference amount on the basis of the 1997 to 1999 period. In this case, paragraph 1 shall apply mutatis mutandis.

3. A case of force majeure or exceptional circumstances, with relevant evidence to the satisfaction of the competent authority, shall be notified by the farmer concerned in writing to the authority within a deadline to be fixed by each Member State.

4. Force majeure or exceptional circumstances shall be recognised by the competent authority in cases such as, for example:

(a) the death of the farmer;

(b) long-term professional incapacity of the farmer;

(c) a severe natural disaster gravely affecting the holding's agricultural land;

(d) the accidental destruction of livestock buildings on the holding;

(e) an epizootic affecting part or all of the farmer's livestock.

5. Paragraphs 1, 2 and 3 of this Article shall apply, mutatis mutandis, to farmers who, during the reference period, were under agri-environmental commitments according to Regulations (EEC) No 2078/92(24) and (EC) No 1257/1999.

In the case where the commitments covered both the reference period and the period referred to in paragraph 2 of this Article, Member States shall establish, according to objective criteria and in such a way as to ensure equal treatment between farmers and to avoid market and competition distortions, a reference amount in accordance with the detailed rules to be laid down by the Commission in accordance with the procedure referred to in Article 144(2).

Article 41

Ceiling

1. For each Member State, the sum of the reference amounts shall not be higher than the national ceiling referred to in Annex VIII.

2. Where necessary, a Member State shall proceed to a linear percentage reduction of the reference amounts in order to ensure respect of its ceiling.

Article 42

National reserve

1. Member States shall, after any possible reduction under Article 41(2), proceed to a linear percentage reduction of the reference amounts in order to constitute a national reserve. This reduction shall not be higher than 3 %.

2. The national reserve shall further include the difference between the ceiling referred to in Annex VIII and the sum of the reference amounts to be granted to farmers under the single payment scheme, before the reduction referred to in paragraph 1 second sentence.

3. Member States may use the national reserve to grant, in priority, reference amounts to farmers who commence their agricultural activity after 31 December 2002, or in 2002 but without receiving any direct payment in that year, according to objective criteria and in such a way as to ensure equal treatment between farmers and to avoid market and competition distortions.

4. Member States shall use the national reserve for the purpose of establishing, according to objective criteria and in such a way as to ensure equal treatment between farmers and to avoid market and competition distortions, reference amounts for farmers finding themselves in a special situation, to be defined by the Commission in accordance with the procedure referred to in Article 144(2).

5. Member States may use the national reserve for the purpose of establishing, according to objective criteria and in such a way as to ensure equal treatment between farmers and to avoid market and competition distortions, reference amounts for farmers in areas subject to restructuring and/or development programs relating to one or the other form of public intervention in order to avoid abandoning of land and/or in order to compensate specific disadvantages for farmers in those areas.

6. In application of paragraphs 3 to 5 Member States may increase the unit value, within the limit of the regional average of the value of entitlements, and/or the number of entitlements allocated to farmers.

7. Member States shall proceed to linear reductions of the entitlements in case their national reserve is not sufficient to cover the cases referred to in paragraphs 3 and 4.

8. Except in case of transfer by actual or anticipated inheritance and by way of derogation from Article 46, the entitlements established using the national reserve shall not be transferred for a period of five years starting from their allocation.

By way of derogation from Article 45(1), any entitlement which has not been used during each year of the five year period shall revert immediately to the national reserve.

9. By way of derogation from Articles 33 and 43, in case of sale or lease for six or more years of the holding or part of it or premium rights in the reference period or not later than 29 September 2003, part of the entitlements to be allocated to the seller or the lessor may revert to the national reserve under conditions to be defined by the Commission, in accordance with the procedure referred to in Article 144(2).

CHAPTER 3

PAYMENT ENTITLEMENTS

Section 1

Payment entitlements based on areas

Article 43

Determination of the payment entitlements

1. Without prejudice to Article 48, a farmer shall receive a payment entitlement per hectare which is calculated by dividing the reference amount by the three-year average number of all hectares which in the reference period gave right to direct payments listed in Annex VI.

The total number of payment entitlements shall be equal to the above mentioned average number of hectares.

However, in the case referred to in Article 37(2), the total number of payment entitlements shall be equal to the average number of hectares of the same period used for the establishment of the reference amounts and Article 42(6) shall apply to these payment entitlements.

2. The number of hectares referred to in paragraph 1 shall further include:

(a) in case of potato starch, dried fodder and seed aids listed in Annex VII, the number of hectares whose production has been granted the aid in the reference period as calculated in points B, D and F of Annex VII;

(b) all forage area in the reference period.

3. For the purpose of paragraph 2(b) of this Article, "forage area" shall mean the area of the holding that was available throughout the calendar year, in accordance with Article 5 of Commission Regulation (EC) No 2419/2001(25), for rearing animals including areas in shared use and areas which were subject to mixed cultivation. The forage area shall not include:

- buildings, woods, ponds, paths,

- areas used for other crops eligible for Community aid or for permanent crops or horticultural crops,

- areas qualifying for the support system laid down for the producers of certain arable crops, used for the aid scheme for dried fodder or subject to a national or Community set-aside scheme.

4. The payment entitlements per hectare shall not be modified save as otherwise provided.

Article 44

Use of payment entitlements

1. Any payment entitlement accompanied by an eligible hectare shall give right to the payment of the amount fixed by the payment entitlement.

2. "Eligible hectare" shall mean any agricultural area of the holding taken up by arable land and permanent pasture except areas under permanent crops, forests or used for non agricultural activities.

3. The farmer shall declare the parcels corresponding to the eligible hectare accompanying any payment entitlement. Except in case of force majeure or exceptional circumstances, these parcels shall be at the farmer's disposal for a period of at least 10-months, starting from a date to be fixed by the Member State, but not earlier than 1 September of the calendar year preceding the year of lodging the application for participation in the single payment scheme.

4. Member States may, in duly justified circumstances, authorise the farmer to modify his declaration on condition that he respects the number of hectares corresponding to his payment entitlements and the conditions for granting the single payment for the area concerned.

Article 45

Unused payment entitlements

1. Any payment entitlement which has not been used for a period of 3 years shall be allocated to the national reserve.

2. However, unused payment entitlements shall not revert to the national reserve in case of force majeure and exceptional circumstances within the meaning of Article 40(4).

Article 46

Transfer of payment entitlements

1. Payment entitlements may only be transferred to another farmer established within the same Member State except in case of transfer by actual or anticipated inheritance.

However, even in the case of actual or anticipated inheritance, payment entitlements may only be used in the Member State where the payment entitlements were established.

A Member State may decide that payment entitlements may only be transferred or used within one and the same region.

2. Payment entitlements may be transferred by sale or any other definitive transfer with or without land. In contrast, lease or similar types of transactions shall be allowed only if the payment entitlements transferred are accompanied by the transfer of an equivalent number of eligible hectares.

Except in case of force majeure or exceptional circumstances as referred to in Article 40(4), a farmer may transfer his payment entitlements without land only after he has used, within the meaning of Article 44, at least 80 % of his payment entitlements during at least one calendar year or, after he has given up voluntarily to the national reserve all the payment entitlements he has not used in the first year of application of the single payment scheme.

3. In case of sale of payment entitlements, with or without land, Member States may, acting in compliance with the general principle of Community law, decide that part of the payment entitlements sold revert to the national reserve or that their unit value is reduced in favour of the national reserve, according to criteria to be fixed by the Commission in accordance with the procedure referred to in Article 144(2).

Section 2

Payment entitlements subject to special conditions

Article 47

Payments giving right to payment entitlements subject to special conditions

1. By way of derogation from Articles 43 and 44, the following amounts resulting from payments granted in the reference period shall be included in the reference amount under the conditions provided for in Article 48 and point C of Annex VII:

(a) the deseasonalisation premium provided for in Article 5 of Regulation (EC) No 1254/1999;

(b) the slaughter premium provided for in Article 11 of Regulation (EC) No 1254/1999;

(c) the special premium for male bovine animals and the suckler cow premium, where the farmer was exempted from the stocking rate requirement pursuant to Article 12(1) of Regulation (EC) No 1254/1999, provided that the farmer did not apply for the extensification payment provided for in Article 13 of that Regulation;

(d) additional payments provided for in Article 14 of Regulation (EC) No 1254/1999 where paid in addition to aid provided for under (a), (b) and (c) of this paragraph;

(e) the aids provided for under the sheep and goats aid scheme:

- in the calendar years 2000 and 2001, in Article 5 of Regulation (EC) No 2467/98 and in Article 1 of Regulation (EEC) No 1323/90(26),

- in the calendar year 2002, in Articles 4, 5 and 11(1) and in the first, second and fourth indent of Article 11(2) of Regulation (EC) No 2529/2001.

2. Starting from 2007 and by way of derogation from Articles 33, 43 and 44, the amounts resulting from dairy premium and additional payments, provided for in Articles 95 and 96 and to be granted in 2007 shall be included in the single payment scheme under the conditions provided for in Articles 48 to 50.

Article 48

Determination of the payment entitlements subject to special conditions

When farmer was granted payments referred to in Article 47, but had no hectares as referred to in Article 43 in the reference period, or the entitlement per hectare results in an amount higher than EUR 5000, the farmer shall have right, respectively, to a payment entitlement:

(a) equal to the reference amount corresponding to the direct payments he was granted in the three-year average period;

(b) for each EUR 5000 or fraction of the reference amount corresponding to the direct payments he was granted in the three-year average period.

Article 49

Conditions

1. Save as otherwise provided for in this section, the other provisions of this Title shall apply to the payment entitlements subject to special conditions.

2. By way of derogation from Articles 36(1) and 44(1), a farmer who has such payment entitlements for which he did not have hectares in the reference period, shall be authorised by the Member State to derogate from the obligation to provide a number of eligible hectares equivalent to the number of entitlements on the condition he maintains at least 50 % of the agricultural activity exercised in the reference period expressed in livestock units (LU).

In case of a transfer of the payment entitlements, the transferee may benefit from this derogation only if all the payment entitlements subject to the derogation are transferred.

3. The payment entitlements determined according to Article 48 shall not be modified.

Article 50

Dairy premium and additional payments

1. Without prejudice to Article 48 and by way of derogation from Articles 37 and 43, a farmer shall receive a supplementary amount per entitlement resulting by dividing the amounts to be granted under Articles 95 and 96 by the number of entitlements he owns in 2007 except set-aside entitlements.

The unit value of each payment entitlement he owns in 2007 shall be increased by this supplementary amount.

2. In cases where he does not own any entitlement, Articles 48 and 49 shall apply mutatis mutandis. In this case, for the purpose of applying Article 48, the term "hectares" shall mean the eligible hectares the farmer owns in 2007.

CHAPTER 4

LAND USE UNDER THE SINGLE PAYMENT SCHEME

Section 1

Use of the land

Article 51

Agricultural use of the land

Farmers may use the parcels declared according to Article 44(3) for any agricultural activity except for permanent crops and except for the production of the products referred to in Article 1(2) of Council Regulation (EC) No 2200/96 of 28 October 1996 on the common organisation of the market in fruit and vegetables(27), in Article 1(2) of Council Regulation (EC) No 2201/96 of 28 October 1996 on the common organisation of the markets in processed fruit and vegetable products(28) and potatoes other than those intended for the manufacture of potato starch for which aid is granted under Article 93 of this Regulation.

Article 52

Production of hemp

1. In case of production of hemp falling within CN Code 5302 10 00, the varieties used shall have a tetrahydrocannabinol content not exceeding 0,2 % and the production shall be covered by a contract or commitment as referred to in Article 2(1) of Regulation (EC) No 1673/2000. Member States shall establish a system for verifying the tetrahydrocannabinol content of the crops grown on at least 30 % of the areas on hemp grown for fibre for which the contract is concluded or the commitment made. However, if a Member State introduces a system of prior approval for such cultivation, the minimum shall be 20 %.

2. In accordance with the procedure referred to in Article 144(2), the granting of payments shall be made subject to the use of certified seeds of certain varieties and to a declaration of areas on hemp grown for fibre.

Section 2

Set-aside entitlements

Article 53

Determination of the set-aside entitlements

1. By way of derogation from Articles 37 and 43 of this Regulation, where in the reference period a farmer was subject to the obligation to set aside part of the land of his holding pursuant to Article 6(1) of Regulation (EC) No 1251/1999, the three-year average amount corresponding to the compulsory set-aside payment calculated and adjusted according to Annex VII and the three-year average number of compulsory set-aside hectares shall not be included in the determination of the entitlements referred to in Article 43 of this Regulation.

2. In the case referred to in paragraph 1, the farmer shall receive an entitlement per hectare (hereinafter referred to as "set-aside entitlement") which is calculated by dividing the three-year set-aside average amount by the three-year average number of hectares set-aside, as referred to in paragraph 1.

The total number of set-aside entitlements shall be equal to the average number of compulsory set-aside hectares.

Article 54

Use of set-aside entitlements

1. Any set-aside entitlement accompanied by a hectare eligible for set-aside entitlement shall give right to the payment of the amount fixed by the set-aside entitlement.

2. By way of derogation from Article 44(2), "hectare eligible for set-aside entitlement" shall mean any agricultural area of the holding taken up by arable land, except areas which at the date provided for the area aid applications for 2003 were under permanent crops, forests or used for non agricultural activities or under permanent pasture.

However, the following areas may be counted as being set aside, as a result of an application made after 28 June 1995:

- areas set aside pursuant to Articles 22 to 24 of Regulation (EC) No 1257/1999, which are neither put to any agricultural use nor used for any lucrative purposes other than those accepted for other land set aside under this Regulation, or

- areas afforested pursuant to Article 31 of Regulation (EC) No 1257/1999.

3. Farmers shall set aside from production the hectares eligible for set-aside entitlements.

4. Set aside areas shall not be less than 0,1 ha in size and 10 metres wide. For duly justified environmental reasons, Member States may accept areas at least 5 metres wide and 0,05 ha in size.

5. Member States may, on terms to be determined in accordance with the procedure referred to in Article 144(2), derogate from first subparagraph of paragraph 2 of this Article, provided that they take action to prevent any significant increase in the total agricultural area eligible to set-aside entitlements.

6. By way of derogation from Articles 36(1) and 44(1), set-aside entitlements shall be claimed before any other entitlement.

7. The set aside obligation shall continue to apply in respect of the set-aside entitlements which are transferred.

Article 55

Exemption from set-aside

A farmer shall not be subject to the obligation referred to in Article 54 if:

(a) his entire holding is managed for the totality of its production in compliance with the obligations laid down in Council Regulation (EEC) No 2092/91 of 24 June 1991 on organic production of agricultural products and indications referring thereto on agricultural products and foodstuffs(29);

(b) the land set-aside is used for the provision of materials for the manufacture within the Community of products not primarily intended for human or animal consumption, provided that effective control systems are applied.

Article 56

Use of the set aside land

1. The land set aside shall be maintained in good agricultural and environmental condition as established under Article 5.

Without prejudice to Article 55, it shall not be used for agricultural purposes and shall not produce any crop for commercial purposes.

2. It may be subject to rotation.

3. If the quantity of by-products for feed or food uses likely to be made available as a result of the cultivation of oilseeds on land set-aside under Article 55(b), will, on the basis of the forecast quantities covered by contracts made with farmers, exceed 1 million tonnes annually expressed in soya bean meal equivalents, in order to limit such quantity to 1 million tonnes, the amount of the forecast quantity under each contract, which may be used of feed or food uses, shall be reduced.

4. Member States shall be authorised to pay national aid up to 50 % of the costs associated with establishing multiannual crops intended for bio-mass production on set-aside land.

Article 57

Application of other provisions

Save as otherwise provided for in this section, the other provisions of this Title shall apply to the set-aside entitlements.

CHAPTER 5

REGIONAL AND OPTIONAL IMPLEMENTATION

Section 1

Regional implementation

Article 58

Regional allocation of the ceiling referred to in Article 41

1. A Member State may decide, by 1 August 2004 at the latest, to apply the single payment scheme provided for in Chapters 1 to 4 at regional level under the conditions laid down in this Section.

2. Member States shall define the regions according to objective criteria.

Member States with less than three million eligible hectares may be considered as one single region.

3. The Member State shall subdivide the ceiling referred to in Article 41 between the regions according to objective criteria.

Article 59

Regionalisation of the single payment scheme

1. In duly justified cases and according to objective criteria the Member State may divide the total amount of the regional ceiling established under Article 58 or part of it between all the farmers whose holdings are located in the region concerned, including those who do not meet the eligibility criterion referred to in Article 33.

2. In this case of division of the total amount of the regional ceiling, farmers shall receive entitlements, whose unit value is calculated by dividing the regional ceiling established under Article 58 by the number of eligible hectares, within the meaning of Article 44(2), established at regional level.

3. In case of partial division of the total amount of the regional ceiling, farmers shall receive entitlements whose unit value is calculated by dividing the corresponding part of the regional ceiling established under Article 58 by the number of eligible hectares, within the meaning of Article 44(2), established at regional level.

In case the farmer is also entitled to receive entitlements calculated on the remaining part of the regional ceiling, the regional unit value of each of his entitlements, except for set-aside entitlements, shall be increased by an amount corresponding to the reference amount divided by the number his entitlements established in accordance with paragraph 4.

Articles 48 and 49 shall apply mutatis mutandis.

4. The number of entitlements per farmer shall be equal to the number of hectares he declares in accordance with Article 44(2) the first year of application of the single payment scheme, except in case of force majeure or exceptional circumstances within the meaning of Article 40(4).

Article 60

Use of the land

1. Where a Member State makes use of the option provided for in Article 59, farmers may, by way of derogation from Article 51 and in accordance with the provisions of this Article, also use the parcels declared according to Article 44(3) for the production of products referred to in Article 1(2) of Regulation (EC) No 2200/96, in Article 1(2) of Regulation (EC) No 2201/96 and potatoes other than those intended for the manufacture of potato starch for which aid is granted under Article 93 of this Regulation, except permanent crops.

2. The Member State shall establish the number of hectares that may be used according to paragraph 1 of this Article by subdividing, according to objective criteria, the average of the number of hectares that were used for the production of the products referred to in paragraph 1 at national level during the three-year period 2000-2002 amongst the regions defined pursuant to Article 58(2). The average number of hectares at national level and the number of hectares at regional level shall be fixed by the Commission in accordance with the procedure referred to in Article 144(2) on the basis of the data communicated by the Member State.

3. Within the limit established according to paragraph 2 for the region concerned, a farmer shall be allowed to make use of the option referred to in paragraph 1:

(a) within the limit of the number of hectares that he used for the production of the products referred to in paragraph 1 in 2003;

(b) in case of application, mutatis mutandis, of Articles 40 and 42(4), within the limit of a number of hectares to be established according to objective criteria and in such a way as to ensure equal treatment between farmers and to avoid market and competition distortions.

4. Within the limit of the number of hectares that remain available after application of paragraph 3, farmers shall be allowed to produce the products referred to in paragraph 1 on a number of hectares other than the number of hectares falling under paragraph 3 within the limit of a number of hectares used for the production of the products referred to in paragraph 1 in 2004 and/or 2005, whereby priority shall be given to the farmers who produced the products already in 2004 within the limit of the number of hectares used in 2004.

In case of application of Article 71, 2004 and 2005 shall be replaced by, respectively, the year previous to the year of application of the single payment scheme and the year of application itself.

5. In order to establish the individual limits referred to in paragraphs 3 and 4, the Members State shall use the farmer's individual data, where available, or any other evidence at its satisfaction provided by the farmer.

6. The number of hectares for which the authorisation has been established according to paragraphs 3 and 4 of this Article, shall in no case exceed the number of eligible hectares as defined in Article 44(2) declared in the first year of application of the single payment scheme.

7. The authorisation shall be used, within the region concerned, with the corresponding payment entitlement.

8. By at the latest 2007, the Commission shall submit a report to the Council, accompanied, if necessary, by appropriate proposals, on the possible consequences, in terms of market and structural developments, of the implementation by Member States of this Article.

Article 61

Grassland

In case of application of Article 59, Member States may also, according to objective criteria, fix, within the regional ceiling or part of it, different per unit values of entitlements to be allocated to farmers referred to in Article 59(1), for hectares under grassland at the date provided for the area aid applications for 2003 and for any other eligible hectare or alternatively for hectares under permanent pasture at the date provided for the area aid applications for 2003 and for any other eligible hectare.

Article 62

Dairy premium and additional payments

By way of derogation from Article 47(2), Member State may decide that the amounts resulting from dairy premiums and additional payments, provided for in Articles 95 and 96, shall be included, in part or in full, in the single payment scheme starting from 2005. Entitlements established under this paragraph shall be modified accordingly.

The reference amount for those payments shall be equal to the amounts to be granted according to Articles 95 and 96 calculated on the basis of the individual reference quantity for milk available on the holding on 31 March of the year of inclusion, in part or in full, of those payments in the single payment scheme.

Articles 48 to 50 shall apply mutatis mutandis.

Article 63

Conditions for the entitlements established under this section

1. In case of application of Article 59, entitlements established under this section may only be transferred or used within the same region or between regions where the entitlements per hectare are the same.

2. In case of application of Article 59, by way of derogation from Article 53, any farmer in the region concerned shall receive set-aside entitlements.

The number of set-aside entitlements is established by multiplying a farmer's eligible land within the meaning of Article 54(2) declared in the first year of application of the single payment scheme with a set-aside rate.

The set aside rate is calculated by multiplying the basic rate of compulsory set-aside of 10 % by the proportion, in the region concerned, between the land for which arable crops area payments referred to in Annex VI have been granted in the reference period and the eligible land within the meaning of Article 54(2) in the reference period.

The value of the set-aside entitlements shall be the regional value for payment entitlements as established according to Article 59(2) or, as the case may be, Article 59(3) first subparagraph.

Those farmers shall not receive set-aside entitlements who declare less than a number of hectares within the meaning of Article 54(2) which would be needed to produce a number of tonnes equal to 92 tonnes of cereals as defined in Annex IX on the basis of the yields determined according to the regionalisation plan applicable in the region concerned in the year before the year of application of the single payment scheme divided by the proportion referred to in the third subparagraph of paragraph 2 of this Article.

3. By way of derogation from Articles 43(4) and 49(3), Member States may also decide, by 1 August 2004 at the latest, and acting in compliance with the general principle of Community law, that entitlements established under this section shall be subject to progressive modifications according to pre-established steps and objective criteria.

4. Save as otherwise provided for in this Section, the other provisions of this Title shall apply.

Section 2

Partial implementation

Article 64

General provisions

1. A Member State may decide, by 1 August 2004 at the latest, to apply, at national or regional level, the single payment scheme provided for in Chapters 1 to 4 under the conditions laid down in this Section.

2. According to the choice made by each Member State, the Commission shall fix, in accordance with the procedure referred to in Article 144(2), a ceiling for each of the direct payments referred to, respectively, in Articles 66, 67, 68 and 69.

This ceiling shall be equal to the component of each type of direct payment in the national ceilings referred to in Article 41, multiplied by the percentages of reduction applied by Member States in accordance with Articles 66, 67, 68 and 69.

The total amount of the fixed ceilings shall be deducted from the national ceilings referred to in Article 41 in accordance with the procedure referred to in Article 144(2).

3. By at the latest two years after the implementation of the single payment scheme by all Member States or at the latest by 31 December 2009, the Commission shall submit a report to the Council, accompanied, if necessary, by appropriate proposals, on the possible consequences, in terms of market and structural developments, of the implementation by Member States of the options provided for in Sections 2 and 3.

Article 65

Establishment of the entitlements under this section

1. For the entitlements to be allocated to farmers, after any possible reduction under Article 41, the component of the reference amount which results from each of the direct payments referred to, respectively, in Articles 66, 67, 68 and 69 shall be reduced by the percentage to be fixed by Member States within the limit fixed in Articles 66, 67, 68 and 69.

2. Save as otherwise provided for in this Section, the other provisions of this Title shall apply to the entitlements established on the remaining part of the reference amount.

Article 66

Arable crops payments

In case of arable crops payments, Member States may:

(a) retain up to 25 % of the component of national ceilings referred to in Article 41 corresponding to the arable crops area payments referred to in Annex VI, except compulsory set-aside payment.

In this case and within the limit of the ceiling fixed in accordance with Article 64(2), the Member State concerned shall make, on a yearly basis, an additional payment to farmers.

The additional payment shall be granted to farmers producing arable crops listed in Annex IX and, in Member States where maize is not a traditional crop, grass silage on a per hectare basis, at a maximum level up to 25 % of the per hectare payments referred to in Annex VI to be granted under the conditions provided for in Chapter 10 of Title IV.

or, alternatively

(b) retain up to 40 % of the component of national ceilings referred to in Article 41 corresponding to the durum wheat supplement payment referred to in Annex VI.

In this case and within the limit of the ceiling fixed in accordance with Article 64(2), the Member State concerned shall make, on a yearly basis, an additional payment to farmers.

The additional payment shall be granted to farmers producing durum wheat listed in Annex IX on a per hectare basis, at a maximum level up to 40 % of per hectare supplement payment for durum wheat referred to in Annex VI granted or to be granted under conditions provided for in Chapter 10 of Title IV.

Article 67

Sheep and goat payments

Member States may retain up to 50 % of the component of national ceilings referred to in Article 41 corresponding to the sheep and goat payments listed in Annex VI.

In this case and within the limit of the ceiling fixed in accordance with Article 64(2), the Member State concerned shall make, on a yearly basis, an additional payment to farmers.

The additional payment shall be granted to farmers rearing sheep and goats, at a maximum level up to 50 % of sheep and goat payments listed in Annex VI to be granted under conditions provided for in Chapter 11 of Title IV.

Article 68

Beef and veal payments

1. In case of beef and veal payments, Member States may retain up to 100 % of the component of national ceilings referred to in Article 41 corresponding to the slaughtering premium referred to in Annex VI for calves.

In this case and within the limit of the ceiling fixed in accordance with Article 64(2), the Member State concerned shall make, on a yearly basis, an additional payment to farmers.

The additional payment shall be granted on slaughtering of calves at a maximum level up to 100 % of the slaughtering premium for calves referred to in Annex VI to be granted under conditions provided for in Chapter 12 of Title IV.

2. Member States may also:

(a) (i) retain up to 100 % of the component of national ceilings referred to in Article 41 corresponding to the suckler cow premium referred to in Annex VI.

In this case and within the limit of the ceiling fixed in accordance with Article 64(2), the Member State concerned shall make, on a yearly basis, an additional payment to farmers.

The additional payment shall be granted for maintaining suckler cows, at a maximum level up to 100 % of suckler cow premium referred to in Annex VI to be granted under conditions provided for in Chapter 12 of Title IV;

and

(ii) retain up to 40 % of the component of national ceilings referred to in Article 41 corresponding to the slaughter premium referred to in Annex VI for bovine animals other than for calves.

In this case and within the limit of the ceiling fixed in accordance with Article 64(2), the Member State concerned shall make, on a yearly basis, an additional payment to farmers.

The additional payment shall be granted on slaughtering of bovine animals other than calves at a maximum level up to 40 % of the slaughtering premium referred to in Annex VI for bovine animals other than for calves to be granted under conditions provided for in Chapter 12 of Title IV;

or alternatively,

(b) (i) retain up to 100 % of the component of national ceilings referred to in Article 41 corresponding to the slaughter premium referred to in Annex VI for bovine animals other than for calves.

In this case and within the limit of the ceiling fixed in accordance with Article 64(2), the Member State concerned shall make, on a yearly basis, an additional payment to farmers.

The additional payment shall be granted on slaughtering of bovine animals other than for calves at a maximum level up to 100 % of the slaughtering premium referred to in Annex VI for bovine animals other than for calves to be granted under conditions provided for in Chapter 12 of Title IV;

or, alternatively,

(ii) retain up to 75 % of the component of national ceilings referred to in Article 41 corresponding to the special male premium referred to in Annex VI.

In this case and within the limit of the ceiling fixed in accordance with Article 64(2), the Member State concerned shall make, on a yearly basis, an additional payment to farmers.

The additional payment shall be granted at a maximum level up to 75 % of the special male premium referred to in Annex VI to be granted under conditions provided for in Chapter 12 of Title IV.

Article 69

Optional implementation for specific types of farming and quality production

Member States may retain up to 10 % of the component of national ceilings referred to in Article 41 corresponding to each sector referred to in Annex VI. In the case of the arable crops, beef and veal and sheep and goat sectors, this retention shall be taken into account for the purpose of application of the maximum percentages fixed, respectively, in Articles 66, 67 and 68.

In this case and within the limit of the ceiling fixed in accordance with Article 64(2), the Member State concerned shall make, on a yearly basis, an additional payment to farmers in the sector or sectors concerned by the retention.

The additional payment shall be granted for specific types of farming which are important for the protection or enhancement of the environment or for improving the quality and marketing of agricultural products under conditions to be defined by the Commission in accordance with the procedure referred to in Article 144(2).

Section 3

Optional exclusions

Article 70

Optional exclusion of some direct payments

1. A Member State may decide, by 1 August 2004 at the latest, to exclude from the single payment scheme:

(a) one or more of the direct payments granted in the reference period under:

- Article 4(4) of Regulation (EC) No 1251/1999,

- Article 3 of Regulation (EC) No 2358/71.

In this case, Articles 64 and 65 shall apply mutatis mutandis;

(b) all other direct payments listed in Annex VI granted to farmers in the reference period in the French Overseas Departments, the Azores and Madeira, the Canary and Aegean Islands and the direct payments granted in the reference period under:

- Article 6 of Regulation (EEC) No 2019/93,

- Article 9 of Regulation (EC) No 1452/2001,

- Articles 13 and 22(2) to (6) of Regulation (EC) No 1453/2001,

- Articles 5 and 6 of Regulation (EC) No 1454/2001.

2. Without prejudice to Article 6(2) of Regulations (EEC) No 2019/93, Article 9(2) of Regulation (EC) No 1452/2001, Articles 13(2) and 22(2) of Regulation (EC) No 1453/2001, and Article 5(2) of Regulation (EC) No 1454/2001, Member States shall grant the direct payments referred to in paragraph 1 of this Article, within the limit of the ceilings fixed in accordance with Article 64(2) of this Regulation, under the conditions established, respectively, in Title IV Chapters 3, 6 and 7 to 13 of this Regulation, Article 6 of Regulation (EEC) No 2019/93, Article 9 of Regulation (EC) No 1452/2001, Articles 13 and 22(2) to (4) of Regulation (EC) No 1453/2001 and Article 5 of Regulation (EC) No 1454/2001.

The total amount of the fixed ceilings shall be deducted from the national ceilings referred to in Article 41 in accordance with the procedure referred to in Article 144(2).

Section 4

Optional transition

Article 71

Optional transitional period

1. Where specific agricultural conditions so warrant, a Member State may decide, by 1 August 2004 at the latest, to apply the single payment scheme after a transitional period which shall expire either on 31 December 2005 or on 31 December 2006.

In the case where the Member State concerned decides to apply the single payment scheme before the end of the transitional period, it shall decide by 1 August at the latest of the calendar year preceding the calendar year in respect of which the single payment scheme will apply.

2. Without prejudice to Article 70(2) of this Regulation, in the transitional period the Member State concerned shall apply the direct payments referred to in Annex VI under the conditions established, respectively, in Title IV Chapters 3, 6 and 7 to 13 of this Regulation, Article 6 of Regulation (EEC) No 2019/93, Article 9 of Regulation (EC) No 1452/2001, Articles 13 and 22(2) to (4) of Regulation (EC) No 1453/2001, and Article 5 of Regulation (EC) No 1454/2001, within the limit of budgetary ceilings corresponding to the component of these direct payments in the national ceiling referred to in Article 41, fixed by the Commission, in accordance with the procedure referred to in Article 144(2), for each of the direct payments.

In the case of dried fodder payment, Member States shall grant an aid under conditions to be defined in accordance with the procedure referred to in Article 144(2), within the aforementioned budgetary limits.

3. The single payment scheme shall apply on 1 January of the calendar year following the calendar year of expiry of the transitional period.

In this case, the Member State concerned shall take the decisions referred to in Articles 58(1), 63(3), 64(1) and 70 by 1 August 2005 or alternatively 2006 according to the deadline decided under paragraph 1 of this Article.

4. The Commission in accordance with the procedure referred to in Article 144(2) shall take the necessary measures in case the application of this transitional period causes severe distortion of competition in the Community market and in order to ensure the respect of the Community international obligations.

TITLE IV

OTHER AID SCHEMES

CHAPTER 1

SPECIFIC QUALITY PREMIUM FOR DURUM WHEAT

Article 72

Scope of application

Aid shall be granted to farmers producing durum wheat falling within CN code 1001 10 00, under the conditions laid down in this Chapter.

Article 73

Amount and eligibility

1. The aid shall be EUR 40 per hectare.

2. Granting of payments shall be subject to the use of certain quantities of certified seeds of varieties recognised, in the production zone, as being of high quality for the production of semolina or pasta.

Article 74

Areas

1. The aid shall be granted for national base areas in the traditional production zones listed in Annex X.

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2. A Member State may subdivide its base area into sub-base areas in accordance with objective criteria.

Article 75

Overrun of the area

1. Where the area for which aid is claimed exceeds the base area, the area per farmer for which aid is claimed shall be reduced proportionately in that year.

2. When a Member State subdivides its base area in sub-base areas, the reduction provided for in the paragraph 1 shall apply only to the farmers in sub-base areas where their limit have been exceeded. This reduction shall be made when, in the Member State concerned, the areas in sub-base areas, which have not reached their limits, have been redistributed to sub-base areas in which those limits have been exceeded.

CHAPTER 2

PROTEIN CROP PREMIUM

Article 76

Scope

An aid shall be granted to farmers producing protein crops under the conditions laid down in this Chapter.

Protein crops shall include:

- peas falling within CN code 0713 10,

- field beans falling within CN code 0713 50,

- sweet lupins falling within CN code ex 1209 29 50.

Article 77

Amount and eligibility

The aid shall be EUR 55,57 per hectare of protein crops harvested after the stage of lactic ripeness.

However, crops grown on areas which are fully sown and which are cultivated in accordance with local standards, but which do not attain the stage of lactic ripeness as a result of exceptional weather conditions recognised by the Member State concerned, shall remain eligible for aid provided that the areas in question are not used for any other purpose up to this growing stage.

Article 78

Area

1. A maximum guaranteed area of 1400000 ha for which the aid may be granted is hereby established.

2. Where the area for which aid is claimed exceeds the maximum guaranteed area, the area per farmer for which aid is claimed shall be reduced proportionately in that year in accordance with the procedure referred to in Article 144(2).

CHAPTER 3

CROP SPECIFIC PAYMENT FOR RICE

Article 79

Scope

Aid shall be granted to farmers producing rice, falling within CN code 1006 10 under the conditions laid down in this Chapter.

Article 80

Amount and eligibility

1. The aid shall be granted per hectare of land sown under rice and where the crop is maintained until at least the beginning of flowering under normal growth conditions.

However, crops grown on areas which are fully sown and which are cultivated in accordance with local standards, but which do not attain the stage of flowering as a result of exceptional weather conditions recognised by the Member State concerned, shall remain eligible for aid provided that the areas in question are not used for any other purpose up to this growing stage.

2.

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Article 81

Areas

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A Member State may subdivide its base area or areas into sub-base areas in accordance with objective criteria.

Article 82

Overrun of the areas

1. Where in a Member State the area given over to rice in a given year exceeds the base area indicated in Article 81, the area per farmer for which aid is claimed shall be reduced proportionately in that year.

2. When a Member State subdivides its base area or areas in sub-base areas, the reduction provided for in paragraph 1 shall apply only to the farmers in sub-base areas where their limit have been exceeded. This reduction shall be made when, in the Member State concerned, the areas in sub-base areas, which have not reached their limits, have been redistributed to sub-base areas in which those limits have been exceeded.

CHAPTER 4

AREA PAYMENT FOR NUTS

Article 83

Community aid

1. A Community aid shall be granted to farmers producing nuts under the conditions laid down in this Chapter.

Nuts shall include:

- almonds falling within CN codes 0802 11 and 0802 12,

- hazelnuts or filberts falling within CN codes 0802 21 and 0802 22,

- walnuts falling within CN codes 0802 31 and 0802 32,

- pistachios falling within CN codes 0802 50,

- locust beans falling within CN codes 1212 10 10.

2. Member States may differentiate the aid in function of the products or by increasing or decreasing the national guaranteed areas (hereinafter referred to as the "NGA") established in Article 84(3). However, in each Member State, the total amount of aid granted in a given year shall not be higher than the ceiling referred to in Article 84(1).

Article 84

Areas

1. A Member State shall grant the Community aid within the limit of a ceiling calculated by multiplying the number of hectares of its NGA as fixed in paragraph 3 by the average amount of EUR 120,75.

2. A maximum guaranteed area of 800000 ha is hereby established.

3. The maximum guaranteed area referred to in paragraph 2 shall be divided into the following NGA:

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4. A Member State may subdivide its NGA into sub-areas in accordance with objective criteria, in particular at regional level or in relation to the production.

Article 85

Overrun of the sub-base areas

When a Member State subdivides its NGA in sub-base areas and one or more sub-base areas are exceeded, the area per farmer for which Community aid is claimed shall be reduced proportionately in that year for the farmers in the sub-base areas where their limit have been exceeded. This reduction shall be made when, in the Member State concerned, the areas in sub-base areas, which have not reached their limits, have been redistributed to sub-base areas in which those limits have been exceeded.

Article 86

Conditions for eligibility

1. Payment of the Community aid shall be conditional on, in particular, minimum plot size and tree density.

2. Areas in improvement plans within the meaning of Article 14(b) of Regulation (EEC) No 1035/72 of the Council of 18 May 1972 on the common organisation of the market in fruit and vegetables(30) become eligible for aid under this scheme on 1 January of the year following the year in which the improvement plan expired.

3. Member States may make the granting of Community aid conditional on farmers being members of a producer organisation recognised under Articles 11 or 14 of Regulation (EC) No 2200/96.

4. If the provision of paragraph 3 is applied, Member States may decide that the payment of the aid referred to in paragraph 1 is made to a producer organisation on the behalf of its members. The amount of aid received by the producer organisation shall be paid to its members. However, Member States may authorise a producer organisation, as compensation for the services provided to its members, to operate a deduction on the amount of Community aid up to a maximum of 2 %.

Article 87

National aid

1. Member States may grant national aid, in addition to the Community aid, up to a maximum of EUR 120,75 per hectare per year.

2. The national aid may be paid only for areas receiving Community aid.

3. Member States may make the granting of national aid conditional on farmers being members of a producer organisation recognised under Articles 11 or 14 of Regulation (EC) No 2200/96.

CHAPTER 5

AID FOR ENERGY CROPS

Article 88

Aid

An aid of EUR 45 per hectare per year shall be granted for areas sown under energy crops used under the conditions laid down in this Chapter.

Energy crops shall mean crops supplied essentially for the production of the following energy products:

- products considered biofuels listed in Article 2, point 2 of Directive 2003/30/EC of the European Parliament and of the Council of 8 May 2003 on the promotion of the use of biofuels or other renewable fuels for transport(31),

- electric and thermal energy produced from biomass.

Article 89

Areas

1. A maximum guaranteed area of 1500000 ha for which the aid may be granted is hereby established.

2. Where the area for which aid is claimed exceeds the maximum guaranteed area, the area per farmer for which aid is claimed shall be reduced proportionately in that year in accordance with the procedure referred to in Article 144(2).

Article 90

Conditions for eligibility

The aid shall be granted only in respect of areas whose production is covered by a contract between the farmer and the processing industry, except in case of processing undertaken by the farmer himself on the holding.

Areas which have been subject to an application for energy crops scheme may not be counted as being set aside for the purposes of the set-aside requirement indicated in Article 6(1) of Regulation (EC) No 1251/1999 and in Articles 54(2), 63(2) and 107(1) of this Regulation.

Article 91

Review of the list of energy crops

Products may be added or removed to Article 88 in accordance with the procedure referred to in Article 144(2).

Article 92

Review of energy crops scheme

By 31 December 2006, the Commission shall submit a report to the Council on the implementation of the scheme, accompanied, where appropriate, by proposals taking into account the implementation of the EU biofuels initiative.

CHAPTER 6

AID FOR STARCH POTATO

Article 93

Aid

Aid shall be established for farmers producing potatoes intended for the manufacture of potato starch. The amount of the payment applies to the quantity of potatoes needed for making one tonne of starch. It shall be:

- EUR 110,54 for the marketing year 2004/2005 and in case of application of Article 71,

- EUR 66,32 from the marketing year 2005/2006 onwards.

It shall be adjusted according to the starch content of the potatoes.

Article 94

Conditions

The aid shall be paid only in respect of the quantity of potatoes covered by a cultivation contract between the potato producer and the starch manufacturer within the limit of the quota allocated to such undertaking, as referred to in Article 2(2) of Regulation (EC) No 1868/94.

CHAPTER 7

DAIRY PREMIUM AND ADDITIONAL PAYMENT

Article 95

Dairy premium

1. From 2004 to 2007, milk producers shall qualify for a dairy premium. It shall be granted per calendar year, per holding and per tonne of individual reference quantity eligible for premium and available on the holding.

2. Without prejudice to paragraph 3 and to reductions resulting from the application of paragraph 4, the individual reference quantity for milk available on the holding on 31 March of the calendar year concerned, expressed in tonnes, shall be multiplied by:

- EUR 8,15/t for the calendar year 2004,

- EUR 16,31/t for the calendar year 2005,

- EUR 24,49/t for the calendar years 2006 and 2007, and

in case of application of Article 70, for the following calendar years.

3. Individual reference quantities which have been the subject of temporary transfers in accordance with Article 6 of Council Regulation (EEC) No 3950/92 of 28 December 1992 establishing an additional levy in the milk and milk products sector(32) or Article 16 of Council Regulation (EC) No 1788/2003 of 29 September 2003 establishing a levy in the milk and milk products sector(33) on 31 March of the calendar year concerned shall be deemed to be available on the holding of the transferee for that calendar year.

4. For the purpose of applying paragraph 2, where, on 31 March of a calendar year, the sum of all individual reference quantities in a Member State exceeds the sum of the corresponding total quantities of that Member State set out in Annex I of Regulation (EEC) No 3950/92, for the 12-month period 1999/2000, the Member State concerned shall, on the basis of objective criteria, take the necessary steps to reduce accordingly the total amount of individual reference quantities eligible for premium on its territory.

Article 96

Additional payments

1. From 2004 to 2007, Member States shall, on a yearly basis, make additional payments to producers in their territory totalling the global amounts per year set out in paragraph 2. Such payments shall be made according to objective criteria and in such a way as to ensure equal treatment between producers and to avoid market and competition distortions. Moreover, such payments shall not be linked to fluctuations of market prices.

Premium supplements shall only be granted as a supplementary amount per premium amount as set out in Article 95(2).

2. Additional payments: global amounts expressed in EUR million:

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Article 97

Definitions

For the purpose of this Chapter, the definitions of "producer" laid down in Article 5 of Regulation (EC) No 1788/2003 shall apply.

CHAPTER 8

SPECIFIC REGIONAL AID FOR ARABLE CROPS

Article 98

Aid

In case of application of Article 70, in Finland and in Sweden north of the 62nd Parallel and some adjacent areas affected by comparable climatic conditions rendering agricultural activity particularly difficult, farmers producing cereals, oilseeds, linseed and flax and hemp grown for fibre shall be granted a specific aid of EUR 24/t, multiplied by the yields determined in the regionalisation plan for the region concerned within the limit of a ceiling, fixed by the Commission in accordance with Article 64(2), corresponding to the component of this aid in the ceiling referred to in Article 41.

When the total amount of aid claimed exceeds the fixed ceiling, the aid per farmer shall be reduced proportionately in that year.

CHAPTER 9

SEED AID

Article 99

Aid

1. In case of application of Article 70, Member States shall grant, on a yearly basis, the aids fixed in Annex XI for the production of basic seed or certified seeds of one or more of the species listed in Annex XI.

2. In case the area accepted for certification for which the aid for seeds is claimed is used also for claiming the aid under the single payment scheme, the amount of aid for seed, except in the case of species referred to in Annex XI points 1 and 2, shall be reduced, but not to less than zero, by the amount of aid of the single payment scheme to be granted in a given year for the area concerned.

3. The amount of aid claimed shall not exceed a ceiling, fixed by the Commission in accordance with Article 64(2), corresponding to the component of seed aids for the species concerned in the national ceiling referred to in Article 41.

When the total amount of aid claimed exceeds the fixed ceiling, the aid per farmer shall be reduced proportionately in that year.

4. The varieties of Cannabis sativa L. for which the aid provided for in this Article is payable shall be determined in accordance with the procedure referred to in Article 144(2).

CHAPTER 10

ARABLE CROPS AREA PAYMENT

Article 100

Scope of application and definitions

1. In case of application of Article 66, Member States shall grant, under the conditions set out in this Chapter, save as otherwise provided, the aid chosen by the Member State concerned according to that Article, to farmers producing arable crops.

2. For the purposes of this Chapter:

- the marketing year shall run from 1 July to 30 June,

- "arable crops" are taken to mean those listed in Annex IX.

3. Member States where maize is not a traditional crop may make grass silage eligible for the arable crops area payments, under the same conditions as those applicable for arable crops.

Article 101

Base areas

The area payment shall be fixed on a per hectare basis and regionally differentiated.

The area payment shall be granted for the area which is down to arable crops or subject to set-aside in accordance with Article 107 of this Regulation and which does not exceed the total number of hectares of the regional base area or areas as fixed in Annex VI of Commission Regulation (EC) No 2316/1999(34), taking into account the application of Regulation (EC) No 1017/94.

A region in this sense shall be understood to mean a Member State or a region within the Member State, at the option of the Member State concerned. In case of application of Article 66 of this Regulation, the area or areas fixed in Annex VI of Regulation (EC) No 2316/1999 shall be reduced by the number of hectares corresponding to the set-aside entitlements set up in accordance with Article 53 and 63(2) of this Regulation in the region concerned.

Article 102

Overrun of base areas and ceiling

1. When the sum of the areas for which payment is claimed under the arable crops' scheme, including the set-aside provided for under that scheme in case of application of Article 71, is in excess of the base area, the eligible area per farmer shall be reduced proportionately for all the payments granted under this Regulation in the region in question, during the same marketing year.

2. The sum of the payments claimed shall not be higher than the ceiling fixed by the Commission in accordance with Article 64(2). When the total amount of aid claimed exceeds the fixed ceiling, the aid per farmer shall be reduced proportionately in that year.

3. In case of application of Article 71, areas which are not the subject of an application for payment under this Chapter but are used to support an application for aid under Chapter 12 shall also be taken into account for the calculation of areas for which payment is claimed.

4. If a Member State makes grass silage eligible for the arable crops area payments, a separate base area shall be defined. If the base area for arable crops or grass silage is not reached in a given marketing year, the balance of hectares shall be allocated for the same marketing year to the corresponding base area.

5. Where a Member State has chosen to establish one or more national base areas, it may subdivide each national base area into sub-base areas according to objective criteria to be defined by the Member State.

For the purposes of applying this paragraph, the "Secano" and "Regadío" base areas shall be considered as national base areas.

Where there is an overshoot of a national base area, the Member State concerned may, in accordance with objective criteria, concentrate the measure applicable under paragraph 1 totally or partially on the sub-base areas for which the overshoot has been noted.

Member States which have decided to apply the possibilities provided for in this paragraph, shall notify farmers and the Commission by 15 September of their choices and the detailed rules for their application.

Article 103

Regionalisation plan

The regionalisation plan established by Member States pursuant to Article 3 of Regulation (EC) No 1251/1999 shall apply.

The regionalisation plan may be revised, according to objective criteria, by the Member State concerned at the request of the Commission or at the initiative of that Member State.

Article 104

Basic amount

1. The area payment shall be calculated by multiplying the basic amount per tonne by the average cereal yield determined in the regionalisation plan for the region concerned.

2. The calculation mentioned in paragraph 1 shall be made using the average cereals yield. However, where maize is treated separately, the 'maize' yield shall be used for maize and the "cereals other than maize" yield shall be used for cereals, oilseeds, linseed and flax and hemp grown for fibre.

3. The basic amount for arable crops and, in case of application of Article 71, for set-aside shall be fixed at EUR 63,00/t from the 2005/2006 marketing year onwards.

Article 105

Durum wheat supplement

1. A supplement to the area payment of:

- EUR 291/ha for the marketing year 2005/2006,

- EUR 285/ha for the marketing year 2006/2007 and onwards,

shall be paid for the area down to durum wheat in the traditional production zones listed in Annex X, subject to the following limits:

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2. Should the total of the areas for which a supplement to the area payment is claimed be greater than the limit referred to above during the course of a marketing year, the area per farmer for which the supplement may be paid shall be reduced proportionately.

However, subject to the limits per Member State laid down in paragraph 1, Member States may distribute the areas indicated in that paragraph among the production zones as defined in Annex X, or, if necessary, the production regions of the regionalisation plan, according to the extent of the production of durum wheat during the period 1993 to 1997. Where this is done, should the total of the areas within a region for which a supplement to the area payment is requested be greater than the corresponding regional limit during the course of a marketing year, the area per farmer in that production region for which the supplement may be paid shall be reduced proportionately. The reduction shall be made when, within a Member State, the areas in regions, which have not reached their regional limits, have been distributed to regions in which those limits have been exceeded.

3.

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Article 106

Flax and hemp

For flax and hemp grown for fibre, the area payment shall be made only, depending on circumstances, when the contract is concluded or commitment made as referred to in Article 2(1) of Regulation (EC) No 1673/2000.

For hemp grown for fibre, the area payment shall also be made under the conditions provided for in Article 52.

Article 107

Set-aside

1. In case of application of Article 71, farmers applying for the area payment shall be subject to an obligation to set aside part of the land of their holding from production and shall receive compensation for this obligation.

2. The set-aside obligation for each farmer applying for area payments shall be fixed as a proportion of his area down to arable crops and for which a claim is made and left in set-aside pursuant to this Chapter.

The basic rate of compulsory set-aside is fixed at 10 % for the marketing years 2005/2006 and 2006/2007.

3. The land set aside may be used for:

- producing materials for the manufacture within the Community of products not directly intended for human or animal consumption, provided that effective control systems are applied;

- growing legume crops on a agricultural holding, managed for the totality of its production, in compliance with the obligations laid down in Regulation (EEC) No 2092/91.

Member States shall be authorised to pay national aid up to 50 % of the costs associated with establishing multiannual crops intended for bio-mass production on set-aside land.

4. The quantity of by-products for feed or food uses likely to be made available as a result of the cultivation of oilseeds on land set-aside under paragraph 3 first indent shall be taken into account for the respect of the limit of 1 million tonnes referred to in Article 56(3).

5. Where different yields are set for irrigated and non-irrigated land, the payment for set-aside for non-irrigated land apply.

6. Farmers may be granted the set-aside payment on land voluntarily set aside in excess of their obligation. Member States shall allow farmers to set-aside up to at least 10 % of the area down to arable crops and for which a payment application is made, and left in set-aside pursuant to this Article. Higher percentages may be set by a Member State taking into account specific situations and ensuring sufficient occupation of farmland.

In case of application of Article 66, this paragraph shall apply according to detailed rules to be adopted by the Commission, in accordance with the procedure referred to in Article 144(2).

7. Farmers who make a payment application for an area no bigger than the area which would be needed to produce 92 tonnes of cereals, on the basis of the yields determined for their region, are not bound by the set-aside obligation. Paragraph 6 shall apply to these farmers.

8. Without prejudice to Article 108, areas:

- set aside pursuant to agri-environment (Articles 22 to 24 of Council Regulation (EC) No 1257/1999), which are neither put to any agricultural use nor used for any lucrative purposes other than those accepted for other land set aside under this Regulation, or

- afforested pursuant to afforestation (Article 31 of Regulation (EC) No 1257/1999),

as a result of an application made after 28 June 1995, may, up to any limit per holding which may be set by the Member State concerned, be counted as being set aside for the purposes of the set-aside requirement indicated in paragraph 1. Such limit shall be set only to the extent necessary to avoid a disproportionate amount of the available budget relating to the scheme in question being concentrated on a small number of farms.

However, on these areas, the area payment specified in Article 104 of this Regulation shall not be granted and the support granted under Article 24(1) or Article 31(1), second indent of Regulation (EC) No 1257/1999 shall be limited to an amount equal at most to the area payment for set aside specified in Article 104 of this Regulation.

Member States may decide not to apply the scheme provided for in this paragraph to a new applicant in any region in which there is a continuing risk of a significant overshoot of the regional base area.

9. Set aside areas shall not be less than 0,1 ha in size and 10 metres wide. For duly justified environmental reasons, Member States may accept areas at least 5 metres wide and 0,05 ha in size.

Article 108

Eligible land

Applications for payments may not be made in respect of land which, at the date provided for the area aid applications for 2003, was under permanent pasture, permanent crops or trees or was used for non-agricultural purposes.

Member States may, on terms to be determined in accordance with the procedure referred to in Article 144(2), derogate to the first subparagraph of this Article, provided that they take action to prevent any significant increase in the total eligible agricultural area.

Article 109

Sowing and application

In order to qualify for the area payment, a farmer shall by 31 May at the latest preceding the relevant harvest have sown the seed and by 15 May at the latest have lodged an application.

Article 110

Implementing rules

Detailed rules for the application of this Chapter shall be adopted in accordance with the procedure referred to in Article 144(2) and in particular:

- those relating to the establishment and management of base areas,

- those relating to the establishment of production regionalisation plans,

- those relating to grass silage,

- those relating to the granting of the area payment,

- those relating to the minimum area eligible for payment; such rules shall take particular account of the monitoring requirements and of the desired effectiveness of the scheme in question,

- those determining, for durum wheat, the eligibility for the supplement to the area payment and the eligibility requirements for the special aid, and in particular determination of the regions to be taken into consideration,

- those relating to set-aside, and in particular those relating to Article 107(3); these conditions shall define the fodder legumes that may be grown on land set aside and, with regard to the first indent of the first paragraph of that paragraph, may include the growing of crops without compensation.

According to the same procedure, the Commission may:

- either make the granting of payments subject to the use of:

(i) specific seeds;

(ii) certified seed in the case of durum wheat and flax and hemp grown for fibre;

(iii) certain varieties in the cases of oilseeds, durum wheat, linseed and flax and hemp grown for fibre,

- or provide for the possibility for Member States to make the grant of payments subject to such conditions,

- allow the dates in Article 109 to be varied in certain zones where exceptional climatic conditions render the normal dates inapplicable.

CHAPTER 11

SHEEP AND GOAT PREMIUMS

Article 111

Scope of application

In case of application of Article 67, Member States shall grant, on a yearly basis, premiums or additional payments to farmers rearing sheep and goats under the conditions provided for in this Chapter, save as otherwise provided.

Article 112

Definitions

For the purposes of this Chapter the following definitions shall apply:

(a) "ewe" shall mean any female of the ovine species having lambed at least once or aged at least one year;

(b) "she-goat" shall mean any female of the caprine species having kidded at least once or aged at least one year.

Article 113

Ewe and goat premium

1. A farmer keeping ewes on his holding may qualify, on application for a premium for maintaining ewes (ewe premium).

2. A farmer keeping she-goats on his holding may qualify, on application for a premium for maintaining she-goats (goat premium). This premium shall be granted to farmers in specific areas where the production meets the following two criteria:

(a) goat rearing is mainly directed towards the production of goatmeat;

(b) goat and sheep rearing techniques are similar in nature.

A list of such areas shall be established following the procedure referred to in Article 144(2).

3. The ewe premium and the goat premium shall be granted in the form of an annual payment per eligible animal per calendar year and per farmer within the limits of individual ceilings. The minimum number of animals in respect of which an application for a premium is lodged shall be determined by the Member State. This minimum shall not be less than 10 or greater than 50.

4. Per ewe, the amount of the premium shall be EUR 21. However for farmers marketing sheep's milk or products based on sheep's milk the premium per ewe shall be EUR 16,8.

5. Per she-goat the amount of the premium shall be EUR 16,8.

Article 114

Supplementary premium

1. A supplementary premium shall be paid to farmers in areas where sheep and goat production constitutes a traditional activity or contributes significantly to the rural economy. Member States shall define these areas. In any event the supplementary premium shall only be granted to a farmer whose holding has at least 50 % of its area used for agriculture situated in less-favoured areas defined pursuant to Regulation (EC) No 1257/1999.

2. The supplementary premium shall also be granted to a farmer practising transhumance provided that:

(a) at least 90 % of the animals for which the premium is applied are grazed for at least 90 consecutive days in an eligible area established in accordance with paragraph 1, and

(b) the seat of the holding is situated in a well-defined geographical area for which it has been established by the Member State that transhumance is a traditional practice of sheep and/or goat rearing and that these animal movements are necessary owing to the absence of forage in sufficient quantity during the transhumance period.

3. The amount of the supplementary premium shall be set at EUR 7 per ewe and per she-goat. The supplementary premium shall be granted under the same conditions as those laid down for the grant of the ewe and goat premium.

Article 115

Common provisions

1. Premiums shall be paid to recipient farmers on the basis of the number of ewes and/or she-goats kept on their holding over a minimum period to be determined in accordance with the procedure referred to in Article 144(2).

2. Once a Regulation providing for new rules on the identification and registration of sheep and goats becomes applicable, to qualify for the premium an animal shall be identified and registered in accordance with these rules.

Article 116

Individual limits

1. On 1 January 2005 the individual ceiling per farmer referred to in Article 113(3), shall be equal to the number of premium rights which he held on 31 December 2004 in accordance with the relevant Community rules.

2. Member States shall take the necessary measures to ensure that the sum of premium rights on their territory does not exceed the national ceilings set out in paragraph 4 and that the national reserves referred to in Article 118 may be maintained.

3. Premium rights, which have been withdrawn pursuant to the measure taken pursuant to paragraph 2 shall be abolished.

4.

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Article 117

Transfer of premium rights

1. When a farmer sells or otherwise transfers his holding, he may transfer all his premium rights to the person who takes over his holding.

2. A farmer may also transfer, in whole or in part, his rights to other farmers without transferring his holding.

In the case of a transfer of rights without transfer of the holding, a part of the premium rights transferred, not exceeding 15 %, shall be surrendered, without compensation to the national reserve of the Member State where his holding is situated for redistribution free of charge.

Member States may acquire premium rights from farmers who agree, on a voluntary basis, to surrender their rights, in whole or in part. In this case payments for the acquisition of such rights may be made to such farmers either from national budgets or as provided for under Article 119(2), fifth indent.

By way of derogation from paragraph 1 and in duly justified circumstances, Member States may provide that in the case of a sale or other transfer of the holding, the transfer of rights is carried out by the intermediary of the national reserve.

3. Member States may take the necessary measures to avoid premium rights being moved away from sensitive zones or regions where sheep production is especially important for the local economy.

4. Member States may authorise, before a date that they shall determine, temporary transfers of that part of the premium rights, which are not intended to be used by the farmer who holds them.

Article 118

National reserve

1. Each Member State shall maintain a national reserve of premium rights.

2. Any premium rights withdrawn pursuant to Article 117(2) or other Community provisions shall be added to the national reserve.

3. Member States may allocate premium rights to farmers, within the limits of their national reserves. When making the allocation they shall give precedence in particular to newcomers, young farmers or other priority farmers.

Article 119

Additional payments

1. In case of application of Article 71, Member States shall, on a yearly basis, make additional payments totalling the global amounts set out in paragraph 3 of this Article.

Member States may decide to supplement the global amounts set out in paragraph 3 of this Article by reducing the amounts of the payments referred to in Article 113. The reduction in the amounts, which may be applied on a regional basis, shall not exceed one euro.

The payments shall be made, on a yearly basis, according to objective criteria including, in particular, the relevant production structures and conditions, and in such a way as to ensure equal treatment between producers and to avoid market and competition distortions. Moreover, such payments shall not be linked to fluctuations of market prices. They may be made on a regional basis.

2. Payments may include, in particular, the following:

- payments to farmers engaged in specific types of production, in particular related to quality, which are important for the local economy or the protection of the environment;

- an increase in the premium set out in Article 113. The additional amounts may be subject to the application of stocking density requirements, to be determined by the Member State according to local conditions;

- support for restructuring of farmers' holdings or the development of producers' organisations;

- area payments to farmers, to be granted per hectare of forage area, which is available to a farmer during the calendar year concerned and in respect of which no payments are claimed for the same year under the support system for farmers producing certain arable crops, under the aid system for dried fodder and under Community aid schemes for other permanent or horticultural crops;

- payments to farmers who surrender their rights on a voluntary basis pursuant to Article 117(2);

- support for the improvement and rationalisation of processing and marketing of sheep and goatmeat.

3.

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Article 120

Ceilings

The sum of the amounts of each premium or additional payment claimed shall not exceed the limit of the ceiling, fixed by the Commission in accordance with Article 64(2).

When the total amount of aid claimed exceeds the fixed ceiling, the aid per farmer shall be reduced proportionately in that year.

CHAPTER 12

BEEF AND VEAL PAYMENTS

Article 121

Scope of application

In case of application of Article 68, Member States shall grant, under the conditions set out in this Chapter, save as otherwise provided, the aid or aids chosen by the Member State concerned according to that Article.

Article 122

Definitions

For the purposes of this Chapter:

(a) "region" shall mean a Member State or a region within a Member State, at the option of the Member State concerned,

(b) "bull" shall mean an uncastrated male bovine animal,

(c) "steer" shall mean a castrated male bovine animal,

(d) "suckler" cow shall mean a cow belonging to a meat breed or born of a cross with a meat breed, and belonging to a herd intended for rearing calves for meat production,

(e) "heifer" shall mean a female bovine animal from the age of eight months which has not yet calved.

Article 123

Special premium

1. A farmer holding male bovine animals on his holding may qualify, on application, for a special premium. It shall be granted in the form of an annual premium per calendar year and per holding within the limits of regional ceilings for not more than 90 animals for each of the age brackets referred to in paragraph 2.

2. The special premium shall be granted no more than:

(a) once in the life of each bull from the age of nine months, or

(b) twice in the life of each steer:

- the first time at the age of nine months,

- the second time after it has reached the age of 21 months.

3. To qualify for the special premium:

(a) any animal covered by an application shall be held by the farmer for fattening for a period to be determined,

(b) each animal shall be covered until slaughter or until export by an animal passport referred to in Article 6 of Regulation (EC) No 1760/2000 of the European Parliament and of the Council of 17 July 2000 establishing a system for the identification and registration of bovine animals and regarding the labelling of beef and beef products(35) containing all relevant information on its premium status or, if not available, an equivalent administrative document.

4. When in a given region the total number of bulls from the age of nine months and of steers from nine months to 20 months of age, for which an application has been made and which satisfy the conditions for granting the special premium exceeds the regional ceiling referred to in paragraph 8, the number of all eligible animals under paragraph 2(a) and (b) per farmer for the year in question shall be reduced proportionately.

Within the meaning of this Article, "regional ceiling" shall mean the number of animals entitled to benefit, in a region and per calendar year, from the special premium.

5. By way of derogation from paragraphs 1 and 4, Member States may:

- on the basis of objective criteria that are part of a rural development policy and only on the condition that they take into account environmental as well as employment aspects, change or waive the headage limit of 90 animals per holding and age bracket, and,

- where exercising this power, decide to apply paragraph 4 in such a way as to reach the level of reductions required to comply with the applicable regional ceiling, without applying such reductions to small farmers who, in respect of the year in question, did not submit special premium applications for more than a minimum number of animals determined by the Member State concerned.

6. Member States may decide to grant the special premium at the time of slaughter. In this case, for bulls the age criterion referred to in paragraph 2(a) shall be replaced by a minimum carcass weight of 185 kilograms.

The premium shall be paid or passed back to the farmers.

The United Kingdom shall be authorised to apply in Northern Ireland a system for granting the special premium which differs from that applied in the remainder of its territory.

7. The amount of the special premium shall be set at:

(a) EUR 210 per eligible bull;

(b) EUR 150 per eligible steer and age bracket.

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Article 124

Deseasonalisation premium

1. In case of application of Article 71 where, in a Member State the number of steers:

(a) slaughtered in a given year exceeds 60 % of total annual slaughterings of male bovine animals, and

(b) slaughtered during the period 1 September to 30 November in a given year exceeds 35 % of total annual slaughterings of steers,

farmers may qualify, on application, for an additional premium to the special premium (deseasonalisation premium). However, if both triggering rates referred to above are reached in Ireland or in Northern Ireland, the premium shall apply in Ireland and in Northern Ireland.

For the purpose of applying this Article in the United Kingdom, Northern Ireland shall be regarded as a separate entity.

2. The amount of this premium shall be set at:

- EUR 72,45 per animal slaughtered during the first 15 weeks in a given year,

- EUR 54,34 per animal slaughtered during the 16th and 17th weeks in a given year,

- EUR 36,23 per animal slaughtered during the 18th to the 21st week in a given year, and

- EUR 18,11 per animal slaughtered during the 22nd and 23rd weeks in a given year.

3. Where the rate referred to in paragraph 1(b) is not achieved, taking into account the penultimate sentence of paragraph 1, Member States whose farmers have previously received the deseasonalisation premium may decide to grant this premium at the rate of 60 % of the amounts set in paragraph 2.

In such case, the Member State concerned:

(a) may decide to grant this premium for the first two or three of the periods in question only,

(b) shall ensure the measure is financially neutral in respect of the same budget year by accordingly reducing:

- the amount of the second age bracket of the special premium applicable to steers granted in that Member State, and/or

- the additional payments to be made under Section 2, and shall inform the Commission of the reduction measure applied.

For the purpose of applying this measure, Ireland and Northern Ireland shall be regarded as one entity for the calculation of the rate referred to in paragraph 1(a) and consequently for qualification for the premium.

4. In order to establish whether the percentages referred to in this Article have been exceeded, account shall be taken of slaughterings carried out during the second year preceding that in which the animal qualifying for the premium was slaughtered.

Article 125

Suckler cow premium

1. A farmer keeping suckler cows on his holding may qualify, on application, for a premium for maintaining suckler cows (suckler cow premium). It shall be granted in the form of an annual premium per calendar year and per farmer within the limits of individual ceilings.

2. The suckler cow premium shall be granted to any farmer:

(a) not supplying milk or milk products from his farm for 12 months from the day on which the application is lodged.

The supply of milk or milk products directly from the holding to the consumer shall not, however, prevent grant of the premium,

(b) supplying milk or milk products whose total individual reference quantity as referred to in Article 4 of Regulation (EEC) No 3950/92 does not exceed 120000 kilograms. However, Member States may decide on the basis of objective criteria, which they determine, to change or waive this quantitative limit,

provided that the farmer keeps, for at least six consecutive months from the day on which the application is lodged a number of suckler cows at least equal to 60 % and of heifers at most equal to 40 % of the number for which the premium was requested.

For the purposes of determining the number of eligible animals under points (a) and (b) of the first paragraph of paragraph 2 of this Article, whether cows belong to a suckler herd or to a dairy herd shall be established on the basis of the beneficiary's individual reference quantity as defined in Article 95(2) and the average milk yield.

3. The farmers' entitlement to the premium shall be limited by the application of an individual ceiling as defined in Article 126.

4. Per eligible animal, the amount of the premium shall be set at EUR 200.

5. In case of application of Article 68(a)(i), Member States may grant an additional national suckler cow premium, up to a maximum of EUR 50 per animal, provided that no discrimination is caused between stockfarmers in the Member State concerned.

In respect of holdings located in a region as defined in Articles 3 and 6 of Council Regulation (EC) No 1260/1999 of 21 June 1999 laying down general provisions on the Structural Funds(36), the first EUR 24,15 per animal of this additional premium shall be financed by the Guarantee Section of the European Guidance and Guarantee Fund (EAGGF).

In respect of holdings located throughout the territory of a Member State, if in the Member State concerned the cattle population has a high proportion of suckler cows, representing at least 30 % of the total number of cows, and if at least 30 % of male bovine animals slaughtered belong to conformation classes S and E, the Guarantee Section of EAGGF shall finance the additional premium in total. Any overshoot of these percentages is established on the basis of the average of the two years preceding that for which the premium is granted.

6. For the purposes of this Article, only heifers belonging to a meat breed or born of a cross with a meat breed and belonging to a herd intended for rearing calves for meat production shall be taken into account.

Article 126

Individual ceiling for suckler cow

1. An aid shall be granted to each farmer of suckler cow within the limit of the individual ceilings established in application of Article 7 of Regulation (EC) No 1254/1999.

2. Member States shall take the necessary steps to ensure that the sum of premium rights on their territory does not exceed the national ceilings set out in paragraph 5 of this Article and that the national reserves referred to in Article 128 may be maintained.

3. Where the adjustment referred to in paragraph 2 requires a reduction of individual ceilings held by farmers, it shall be carried out without compensatory payment and decided on the basis of objective criteria, including, in particular:

- the rate at which farmers have used their individual ceilings during the three reference years prior to the year 2000,

- the implementation of an investment or extensification programme in the beef and veal sector,

- particular natural circumstances or the application of penalties, resulting in a non-payment or a reduced payment of the premium for at least one reference year,

- additional exceptional circumstances having the effect that the payments made for at least one reference year do not correspond to the actual situation as established during the previous years.

4. Premium rights which have been withdrawn pursuant to the measure provided for in paragraph 2 shall be abolished.

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Article 127

Transfer of suckler cow premium rights

1. When a farmer sells or otherwise transfers his holding, he may transfer all his suckler cow premium rights to the person who takes over his holding. He may also transfer, in whole or in part, his rights to other farmers without transferring his holding.

In the case of transfer of premium rights without transfer of the holding a part of the transferred rights, which shall not exceed 15 %, shall be returned without compensatory payment to the national reserve of the Member State where the holding is situated for redistribution free of charge.

2. The Member States:

(a) shall take the necessary measures to prevent premium rights being transferred outside sensitive areas or regions where beef and veal production is particularly important for the local economy;

(b) may provide either that the transfer of rights without transfer of the holding is carried out directly between farmers or that it is carried out through the intermediary of the national reserve.

3. Member States may authorise, before a date to be determined, temporary transfers of part of the premium rights which are not intended to be used by the farmer who holds them.

Article 128

National reserve of suckler cow premium rights

1. Each Member State shall maintain a national reserve of suckler cow premium rights.

2. Any premium rights withdrawn pursuant to Article 127(1) or other Community provisions shall be added to the national reserve, without prejudice to Article 126(4).

3. The Member States shall use their national reserves for allocating, within the limits of those reserves, premium rights in particular to newcomers, young farmers and other priority farmers.

Article 129

Heifers

1. By way of derogation from Article 125(3), Member States where more than 60 % of suckler cows and heifers are kept in mountain areas within the meaning of Article 18 of Council Regulation (EC) No 1257/1999 may decide to manage the granting of the suckler cow premium for heifers separately from that for suckler cows within the limits of a separate national ceiling to be set up by the Member State concerned.

Such separate national ceiling shall not exceed 40 % of the national ceiling of the Member State concerned set out in Article 126(5). That national ceiling shall be reduced by an amount equal to the separate national ceiling. When in a Member State exercising the power provided for in this paragraph, the total number of heifers, for which an application has been made, and which satisfy the conditions for granting the suckler cow premium, exceeds the separate national ceiling, the number of eligible heifers per farmer for the year in question shall be reduced proportionately.

2. For the purpose of this Article, only heifers belonging to a meat breed or born of a cross with a meat breed shall be taken into account.

Article 130

Slaughter premium

1. A farmer keeping bovine animals on his holding may qualify, on application, for a slaughter premium. It shall be granted on slaughter of eligible animals or their export to a third country and within national ceilings to be determined.

The following shall be eligible for the slaughter premium:

(a) bulls, steers, cows and heifers from the age of eight months,

(b) calves of more than one and less than eight months old and of carcass weight up to 185 kg,

provided they have been held by the farmer for a period to be determined.

2. The amount of the premium shall be set at:

(a) EUR 80 per eligible animal as specified under paragraph 1(a);

(b) EUR 50 per eligible animal as specified under paragraph 1(b).

3. The national ceilings referred to in paragraph 1 shall be established per Member State and separately for both groups of animals as specified in (a) and (b) thereof. Each ceiling shall be equal to the number of animals of each of these two groups which in 1995 were slaughtered in the Member State concerned to which are added those animals exported to third countries, according to Eurostat data or any other published official statistical information for that year accepted by the Commission.

4. When in a given Member State the total number of animals, for which an application has been made in respect of one of the two groups of animals specified in (a) or (b) of paragraph 1, and which satisfy the conditions for granting the slaughter premium exceeds the national ceiling laid down for that group, the number of all eligible animals under that group per farmer for the year in question shall be reduced proportionately.

Article 131

Stocking density

1. In case of application of Article 71, the total number of animals qualifying for the special premium and the suckler-cow premium shall be limited by the application of a stocking density on the holding of two livestock units (LU) per hectare and calendar year. The stocking density shall be 1,8 LU from 1 January 2003. This stocking density shall be expressed in LU per unit of forage area of the holding used for the animals carried on it. However, a farmer shall be exempt from the application of the stocking density if the number of animals held on his holding and to be taken into account for determining the stocking density is not more than 15 LU.

2. For determining the stocking density on the holding, account shall be taken of:

(a)

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(b) the forage area, meaning the area of the holding available throughout the calendar year for rearing bovine animals and sheep and/or goats. The forage area shall not include:

- buildings, woods, ponds, paths,

- areas used for other crops eligible for Community aid or for permanent crops or horticultural crops, except permanent pasture for which area payments are granted pursuant to Article 136 or, as the case may be, Article 96,

- areas qualifying for the support system laid down for the farmers producing certain arable crops, used for the aid scheme for dried fodder or subject to a national or Community set-aside scheme.

Forage area shall include areas in shared use and areas which are subject to mixed cultivation.

Article 132

Extensification payment

1. In case of application of Article 71, farmers receiving the special premium and/or the suckler cow premium may qualify for an extensification payment.

2. The extensification payment shall be EUR 100 per special premium and suckler cow premium granted, provided that in respect of the calendar year concerned the stocking density on the holding concerned is less than or equal to 1,4 LU per hectare.

However, Member States may decide to grant the extensification payment at an amount of EUR 40 for a stocking density of 1,4 LU per hectare or more and less or equal to 1,8 LU per hectare, and at an amount of EUR 80 for a stocking density of less than 1,4 LU per hectare.

3. For the purposes of the application of paragraph 2:

(a) by way of derogation from Article 131(2)(a), the stocking density of the holdings shall be determined by taking into account the male bovine animals, cows, and heifers present thereon during the calendar year concerned, as well as the sheep and/or goats for which premium applications have been submitted for the same calendar year. The number of animals shall be converted to LU by reference to the conversion table referred to in Article 131(2)(a);

(b) without prejudice to the third indent of Article 131(2)(b), areas used for the production of arable crops as defined in Annex IX shall not be taken as "forage area";

(c) the forage area to be taken into account for the calculation of the stocking density shall consist of at least 50 % of pasture land.

"Pasture land" shall be defined by Member States. The definition shall include at least the criterion that pasture land shall be grassland which, following the local farming practices is recognised as being destined for grazing bovine animals and/or sheep. However, this shall not exclude the mixed use of pasture land during the same year (pasture, hay, grass silage).

4. Without prejudice to the stocking density requirements set out in paragraph 2 of this Article, farmers in Member States where more than 50 % of milk production takes place in mountain areas within the meaning of Article 18 of Regulation (EC) No 1257/1999 and whose holdings are located in such areas, may receive extensification payments as set out in that paragraph for the dairy cows kept thereon.

5. In accordance with the procedure referred to in Article 144(2), the Commission shall if necessary, adjust the amounts set out in paragraph 2 of this Article, taking account, in particular, of the number of animals qualifying for the payment for the preceding calendar year.

Article 133

Additional payments

1. In case of application of Article 71, Member States shall, on a yearly basis, make additional payments to farmers in their territory totalling the global amounts set out in paragraph 3 of this Article. Such payments shall be made according to objective criteria including, in particular, the relevant production structures and conditions, and in such a way as to ensure equal treatment between farmers and to avoid market and competition distortions. Moreover, such payments shall not be linked to fluctuations of market prices.

2. Additional payments may be made in the form of headage payments and/or area payments.

3.

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Article 134

Headage payments

1. Headage payments may be granted for:

(a) male bovine animals,

(b) suckler cows,

(c) dairy cows,

(d) heifers.

2. Headage payments may be granted as supplementary amounts per slaughter premium unit as set out in Article 130, except for calves. In the other cases, the grant of headage payments shall be subject:

(a) to the special conditions set out in Article 135,

(b) to specific stocking density requirements to be established by Member States.

3. The specific stocking density requirements shall be established:

- on the basis of the forage area referred to in Article 131(2)(b), with the exception of areas for which area payments are granted in accordance with Article 136,

- taking account of, in particular, the environmental impact of the type of production concerned, the environmental sensitivity of the land used for rearing cattle and the measures which have been implemented with a view to stabilise or improve the environmental situation of this land.

Article 135

Conditions for the headage payment

1. Headage payments for male bovine animals may be granted per calendar year for no more than a number of animals in a Member State:

- equal to the regional ceiling of the Member State concerned set out in Article 123(8), or

- equal to the number of male bovine animals for which premiums were granted in 1997, or

- equal to the average number of slaughterings of male bovine animals during the years 1997, 1998 and 1999 deriving from Eurostat statistics for these years or any other published official statistical information for these years accepted by the Commission.

Member States may also provide for a headage limit of number of male bovine animals per holding to be determined by the Member State on a national or regional basis.

Only male bovine animals from the age of eight months shall be eligible. If headage payments are made at the time of slaughter, Member States may decide to replace this condition by a minimum carcase weight of at least 180 kilograms.

2. Headage payments for suckler cows and heifers qualifying for suckler cow premium under Article 125(4) and Article 129 may only be granted as a supplementary amount per suckler cow premium unit as set out in Article 125(4).

3. Headage payments for dairy cows may only be granted as amount per tonne of reference quantity eligible for premium available on the holding to be established in accordance with Article 95(2).

Article 134(2)(b) shall not apply.

4. Headage payments for heifers other than those referred to in paragraph 2 may be granted per Member State and calendar year for no more than a number of heifers equal to the average number of slaughterings of heifers during the years 1997, 1998 and 1999 deriving from Eurostat statistics for these years or any other published official statistical information for these years accepted by the Commission.

Article 136

Area payments

1. Area payments shall be granted per hectare of permanent pasture:

(a) which is available to a farmer during the calendar year concerned,

(b) which is not used to comply with the specific stocking density requirements referred to in Article 134(3), and

(c) in respect of which no payments under the support system laid down for farmers producing certain arable crops, under the aid system for dried fodder and under Community aid schemes for other permanent or horticultural crops are claimed for the same year.

2. The area of permanent pasture in a region for which area payments may be granted shall not exceed the relevant regional base area.

Regional base areas shall be established by Member States as the average number of hectares of permanent pasture available for rearing bovine animals during the years 1995, 1996 and 1997.

3. The maximum area payment per hectare which may be granted, including, as the case may be, area payments pursuant to Article 96 shall not exceed EUR 350.

Article 137

Transmission of information

Any changes of national arrangements concerning the granting of additional payments shall be communicated to the Commission not later than one month after their adoption.

Article 138

Common provisions

To qualify for direct payments under this chapter, an animal shall be identified and registered in accordance with Regulation (EC) No 1760/2000.

Article 139

Ceilings

The sum of the amounts of each direct payment claimed under this chapter shall not exceed a ceiling, fixed by the Commission in accordance with Article 64(2) corresponding to the component of each of these direct payments in the ceiling referred to in Article 41.

When the total amount of aid claimed exceeds the fixed ceiling, the aid per farmer shall be reduced proportionately in that year.

Article 140

Substances prohibited under Directive 96/22/EC

1. Where residues of substances prohibited under Directive 96/22/EC(37), or residues of substances authorised under the aforementioned act but used illegally, are detected pursuant to the relevant provisions of Directive 96/23/EC(38), in an animal belonging to the bovine herd of a farmer, or where a non-authorised substance or product, or a substance or product authorised under Directive 96/22/EC but held illegally is found on the farmer's holding in any form, the farmer shall be excluded, for the calendar year of that discovery, from receiving the amounts provided for under this Chapter.

In the event of a repeated infringement, the length of the exclusion period may, according to the seriousness of the offence, be extended to five years as from the year in which the repeated infringement was discovered.

2. In the event of obstruction on the part of the owner or holder of the animals when inspections are being carried out and when the samples are being taken which are necessary for the application if national residue-monitoring plans or when the investigations and checks provided for under Directive 96/23/EC are being carried out, the penalties provided for in paragraph 1 of this Article shall apply.

CHAPTER 13

GRAIN LEGUMES AID

Article 141

Scope of application

In case of application of Article 71, Member States concerned, shall grant an aid for the production of the following grain legumes:

(a) lentils other than for sowing covered by CN code ex 0713 40 00;

(b) chick peas other than for sowing covered by CN code ex 0713 20 00;

(c) vetches of the species Vicia sativa L. and Vicia ervilla Willd. covered by CN code ex 0713 90 90 (other).

Article 142

Aid

1. The aid shall be granted by marketing year for the production of the grain legumes covered by Article 141. The marketing year shall run from 1 July to 30 June.

An arable plot which is the subject of an application for aid per hectare under a system financed in accordance with Article 1(2)(b) of Regulation (EC) No 1258/1999 shall be excluded from eligibility for payment of the aid provided for by this system.

2. Without prejudice to Article 143, the aid per hectare of area sown and harvested shall be EUR 181 per hectare.

Article 143

Ceiling

The sum of the aid claimed shall not be higher than a ceiling, fixed by the Commission in accordance with Article 64(2), corresponding to the component of grain legumes area payments referred to in Annex VI in the national ceiling referred to in Article 41.

When the total amount of aid claimed exceeds the fixed ceiling, the aid per farmer shall be reduced proportionately in that year.

TITLE V

TRANSITIONAL AND FINAL RULES

Article 144

Management Committee for Direct Payments

1. The Commission shall be assisted by the Management Committee for Direct Payments, consisting of representatives of the Member States and chaired by a representative of the Commission.

2. Where reference is made to this paragraph, Articles 4 and 7 of Decision 1999/468/EC shall apply.

The period provided for in Article 4(3) of Decision 1999/468/EC shall be set at one month.

3. The Committee shall adopt its Rules of Procedure.

Article 145

Implementing Rules

In accordance with the procedure referred to in Article 144(2), detailed rules shall be adopted for the implementation of this Regulation. They shall include in particular:

(a) detailed rules related to the establishment of a farm advisory system;

(b) detailed rules related to the definition of the criteria for the allocation of amounts made available by the application of modulation;

(c) detailed rules related to the granting of aids provided for in this Regulation, including eligibility conditions, dates of application and payment and control provisions as well as checking and establishing entitlement to the aids including any necessary exchange of data with the Member States, and the establishment of the overrun of the base areas or maximum guaranteed areas as well as detailed rules concerning the withdrawal and reallocation of unused premium rights established under Chapter 11 and 12;

(d) with regard to the single payment scheme, detailed rules relating in particular to the establishment of national reserve, the transfer of entitlements, the definition of permanent crops, permanent pastures, agricultural land and grassland, the options provided for in Chapter 5 of Title III and the list of crops allowed on the set-aside land as well as detailed rules relating to compliance with the Memorandum of Understanding on certain oil seeds between the European Economic Community and the United States of America within the framework of the GATT approved by Decision 93/355/EEC(39);

(e) with regard to durum wheat, detailed rules relating to the quantities of certified seeds and recognised varieties;

(f) with regard to energy crops, detailed rules relating to the definition of crops covered by the scheme, minimal requirements for the contract, control measures on the quantity processed and processing on the holding;

(g) with regard to hemp grown for fibre, detailed rules relating to the specific control measures and methods for determining tetrahydrocannabinol levels including the arrangements for contracts and to the commitment referred to in Article 52;

(h) such amendments to Annex I as may become necessary taking into account the criteria set out in Article 1;

(i) such amendments to Annexes II, VI, VII, IX, X and XI as may become necessary taking into account, in particular new Community legislation and, as far as it concerns Annex VIII, in case of application of Article 62 and, as the case may be, in function of the information communicated by the Member States in relation to the part of the reference amounts corresponding to the payments for arable crops, as well as the amounts of the ceiling themselves, to be increased in function of the difference between the area actually determined and the area for which premiums were paid for arable crops in 2000 and 2001, in application of Article 9(2) and (3) of Commission Regulation (EEC) No 3887/92(40), within the limit of the base areas (or maximum guaranteed area for durum wheat) and taking into account the average national yield used for the calculation of Annex VIII;

(j) the basic features of the identification system for agricultural parcels and their definition;

(k) any amendments which may be made to the aid application and exemption from the requirement to submit an aid application;

(l) rules on the minimum amount of information to be included in the aid applications;

(m) rules on the administrative and on-the-spot checks and the checks by remote sensing;

(n) rules on the application of reductions and exclusions from payments in case of non-compliance with the obligations referred to in Articles 3 and 24, including cases of non-application of reductions and exclusions;

(o) such amendments to Annex V as may become necessary taking into account the criteria set out in Article 26;

(p) communications between the Member States and the Commission;

(q) measures which are both necessary and duly justified to resolve, in an emergency, practical and specific problems, in particular those related to the implementation of Chapter 4 of Title II and Chapter 5 of Title III. Such measures may derogate from certain parts of this Regulation, but only to the extent that, and for such a period, as is strictly necessary.

Article 146

Transmission of information to the Commission

Member States shall inform the Commission in detail of the measures taken to implement this Regulation and, in particular, those relating to Articles 5, 13, 42 and 58.

Article 147

Amendments to Regulations (EEC) No 2019/93, (EC) No 1452/2001, No 1453/2001, No 1454/2001

1) Article 6 of Regulation (EEC) No 2019/93 shall be replaced by the following:

"Article 6

1. In case of application of the exclusion provided for in Article 70 of Council Regulation (EC) No 1782/2003(41) of 29 September 2003 establishing common rules for direct support schemes under the Common Agricultural Policy and establishing certain support schemes for farmers, the Hellenic Republic shall present to the Commission a programme to assist traditional activities connected with beef and veal, as well as sheep and goat production, within the limits of the consumption needs of minor Aegean Islands.

The programme shall be prepared and implemented by the competent authorities designated by the Member State.

2. The Community shall finance the programme up to an annual amount equal to the sum of premiums actually paid in 2003 pursuant to Regulation (EC) No 1254/1999(42), to this Regulation and to Regulation (EC) No 2529/2001(43) for producers established in the minor Aegean Islands.

The Commission shall increase such amount in order to take into consideration the development of the local production. However, the annual amount shall in no case be higher than the sum of the ceilings applicable in 2003 for beef premiums pursuant to this Regulation multiplied by the base and complementary premiums and payments applicable in 2003 and the sum of all premiums rights held by producers established in the minor Aegean Islands at the date of 30 June 2003 pursuant to Regulation (EC) No 2529/2001 and the pertinent proportion of the national reserve multiplied by the premiums and payments applicable in 2003.

3. The Commission shall adopt the implementing arrangements, approve and modify the programme as well as fix and increase the amount provided for in paragraph 2, first subparagraph, of this Article in accordance with the procedure referred to in Article 144(2) of Regulation (EC) No 1782/2003 + The Commission may, in accordance with the same procedure, revise the limit set forth in paragraph 2, second subparagraph.

4. Before 15 April every year, Greek authorities shall present a report on the implementation of the programme."

2) Article 9 of Regulation (EC) No 1452/2001 shall be replaced by the following:

"Article 9

1. In case of application of the exclusion provided for in Article 70 of Regulation (EC) No 1782/2003 of 29 September 2003 establishing common rules for direct support schemes under the common agricultural policy and establishing certain support schemes for farmers(44), France shall present to the Commission programmes to assist traditional activities connected with beef and veal, as well as sheep and goat production and measures to improve product quality, within the limits of the consumption needs of the French Overseas Departments.

The programmes shall be prepared and implemented by the competent authorities designated by the Member State.

2. The Community shall finance the programmes up to an annual amount equal to the sum of premiums actually paid in 2003 pursuant to Regulation (EC) No 1254/1999(45), to this Regulation and to Regulation (EC) No 2529/2001(46) for producers established in the French Overseas Departments.

The Commission shall increase such amount in order to take into consideration the development of the local production. However, the annual amount shall in no case be higher than the sum of the ceilings applicable in 2003 for beef premiums pursuant to Regulation (EC) No 1452/2001 multiplied by the base and complementary premiums and payments applicable in 2003 and the sum of all premiums rights held by producers established in the French Overseas Departments at the date of 30 June 2003 pursuant to Regulation (EC) No 2529/2001 and the pertinent proportion of the national reserve multiplied by the premiums and payments applicable in 2003.

3. The Commission shall adopt the implementing arrangements, approve and modify the programmes as well as fix and increase the amount provided for in paragraph 2, first subparagraph of this Article, in accordance with the procedure referred to in Article 144(2) of Regulation (EC) No 1782/2003. The Commission may, in accordance with the same procedure, revise the limit set forth in paragraph 2, second subparagraph.

4. Before 15 April every year, French authorities shall present a report on the implementation of the programmes."

3) Regulation (EC) No 1453/2001 is hereby amended as follows:(a) Article 13 shall be replaced by the following:

"Article 13

1. In case of application of the exclusion provided for in Article 70 of Council Regulation (EC) No 1782/2003 of 29 September 2003 establishing common rules for direct support schemes under the common agricultural policy and establishing certain support schemes for farmers(47), the Portuguese Republic shall present to the Commission a programme to assist traditional activities connected with beef and veal, as well as sheep and goat production and measures to improve product quality, within the limits of the consumption needs of Madeira.

The programme shall be prepared and implemented by the competent authorities designated by the Member State.

2. The Community shall finance the programme up to an annual amount equal to the sum of premiums actually paid in 2003 pursuant to Regulation (EC) No 1254/1999(48), to this Regulation and to Regulation (EC) No 2529/2001(49) for producers established in Madeira.

The Commission shall increase such amount in order to take into consideration the development of the local production. However, the annual amount shall in no case be higher than the sum of the ceilings applicable in 2003 for beef premiums pursuant to Regulation (EC) No 1453/2001 multiplied by the base and complementary premiums and payments applicable in 2003 and the sum of all premiums rights held by producers established in Madeira at the date of 30 June 2003 pursuant to Regulation (EC) No 2529/2001 and the pertinent proportion of the national reserve multiplied by the premiums and payments applicable in 2003.

3. The Commission shall adopt the implementing arrangements, approve and modify the programme as well as fix and increase the amount provided for in paragraph 2, first subparagraph, of this Article in accordance with the procedure referred to in Article 144(2) of Regulation (EC) No 1782/2003. The Commission may, in accordance with the same procedure, revise the limit set forth in paragraph 2, second subparagraph.

4. Before 15 April every year, the Portuguese Republic authorities shall present a report on implementation of the programme."

(b) Article 22(2) to (5) shall be replaced by the following:

"2. In case of application of the exclusion provided for in Article 70 of Council Regulation (EC) No 1782/2003 +, the Portuguese Republic shall present to the Commission a programme to assist traditional activities connected with beef and veal, as well as sheep and goat production and measures to improve product quality.

The programme shall be prepared and implemented by the competent authorities designated by the Member State.

3. The Community shall finance the programme up to an annual amount equal to the sum of premiums actually paid in 2003 pursuant to Regulation (EC) No 1254/1999, to this Regulation and to Regulation (EC) No 2529/2001 for producers established in the Azores.

The Commission shall increase such amount in order to take into consideration the development of the local production. However, the annual amount shall in no case be higher than the sum of the ceilings applicable in 2003 for beef premiums pursuant to this Regulation multiplied by the base and complementary premiums a and payments applicable in 2003 and the sum of all premiums rights held by producers established in the Azores at the date of 30 June 2003 pursuant to Regulation (EC) No 2529/2001 and to Regulation (EC) No 1254/1999 for suckler cows premiums, and the pertinent proportions of the national reserves thereof multiplied by the premiums and payments applicable in 2003.

In case of application of Article 68(a)(i) of Regulation (EC) No 1782/2003 the Portuguese Republic authorities may increase the ceiling for suckler cow for the Azores by transferring suckler cow premium rights from the national ceiling. In this case, the corresponding amount shall be transferred from the ceiling fixed in application of Article 68(a)(i) of Regulation (EC) No 1782/2003 to the ceiling referred to in the second subparagraph of paragraph 3 of this Article.

4. The Commission shall adopt the implementing arrangements, approve and modify the programme as well as fix and increase the amount provided for in paragraph 3, first subparagraph of this Article, in accordance with the procedure referred to in Article 144(2) of Regulation (EC) No 1782/2003. The Commission may, in accordance with the same procedure, revise the limit set forth in paragraph 2, second subparagraph.

5. Before 15 April every year the Portuguese Republic authorities shall present a report on implementation of the programme."

(c) Article 22(6) shall be repealed.

(d) Article 23 shall be replaced by the following:

"Article 23

For a transitional period covering the 1999/2000 to 2004/2005 marketing years, for the purposes of sharing the additional levy between the producers referred to in the second sentence of Article 2(1) of Regulation (EEC) No 3950/92(50), only producers as defined in Article 9(c) of that Regulation, established and producing in the Azores, who market quantities exceeding their reference quantity increased by the percentage referred to in the third subparagraph shall be deemed to have contributed to the overrun.

The additional levy shall be due on quantities exceeding the increased reference quantity after reallocation of the unused quantities within the margin resulting from this increase among the producers referred to in the first paragraph and in proportion to the reference quantity available to each producer.

The percentage referred to in the first paragraph shall be equal to the ratio between the quantities respectively, of 73000 tonnes for the period 1999/2000 to 2003/2004 and 61500 tonnes for the 2004/2005 marketing years, and the total of the reference quantities available on each holding on 31 March 2000. It shall apply for each producer only to the reference quantities available to that producer on 31 March 2000."

4) Regulation (EC) No 1454/2001 is hereby amended as follows:(a) Article 5 shall be replaced by the following:

"Article 5

1. In case of application of the exclusion provided for in Article 70 of Council Regulation (EC) No 1782/2003 + of 29 September 2003 establishing common rules for direct support schemes under the common agricultural policy and establishing certain support schemes for farmers(51) the Kingdom of Spain shall present to the Commission a programme to assist traditional activities connected with beef and veal, as well as sheep and goat production and measures to improve product quality, within the limits of the consumption needs of Canary Islands.

The programme shall be prepared and implemented by the competent authorities designated by the Member State.

2. The Community shall finance the programme up to an annual amount equal to the sum of premiums actually paid in 2003 pursuant to Regulation (EC) No 1254/1999(52), to this Regulation and to Regulation (EC) No 2529/2001(53) for producers established in the Canary Islands.

The Commission shall increase such amount in order to take into consideration the development of the local production. However, the annual amount shall in no case be higher than the sum of the ceilings applicable in 2003 for beef premiums pursuant to Regulation (EC) No 1454/2001 multiplied by the base and complementary premiums and payments applicable in 2003 and the sum of all premiums rights held by producers established in the Canary Islands at the date of 30 June 2003 pursuant to Regulation (EC) No 2529/2001 and the pertinent proportion of the national reserve multiplied by the premiums and payments applicable in 2003.

3. The Commission shall adopt the implementing arrangements, approve and modify the programme as well as fix and increase the amount provided for in paragraph 2, first subparagraph, of this Article in accordance with the procedure referred to in Article 144(2) of Regulation (EC) No 1782/2003. The Commission may, in accordance with the same procedure, revise the limit set forth in paragraph 2, second subparagraph.

4. Before 15 April every year, the Kingdom of Spain authorities shall present a report on implementation of the programme."

(b) Article 6 shall be repealed.

Article 148

Amendments to Regulation (EC) No 1868/94

Regulation (EC) No 1868/94 is hereby amended as follows:

1) The following Article 4 shall be inserted:

"Article 4a

A minimum price for potatoes intended for the manufacture of potato starch shall be set at EUR 178,31 per tonne from the 2004/2005 marketing year onwards.

This price applies to the quantity of potatoes, delivered to the factory, which is needed for making one tonne of starch.

The minimum price shall be adjusted according to the starch content of the potatoes."

2) Article 5 shall be replaced by the following:

"Article 5

A premium of EUR 22,25 per tonne of starch produced shall be paid to undertakings producing potato starch for the quantity of potato starch up the quota limit referred to in Article 2(2), provided that they have paid to potato producers the minimum price, referred to in Article 4a, for all the potatoes necessary to produce starch up to that quota limit."

3) Article 7 shall be replaced by the following:

"Article 7

The provisions of this Regulation shall not cover production of potato starch by undertakings which are not subject to Article 2(2) of this Regulation and which purchase potatoes for which producers do not benefit from the payment provided for in Article 93 of Council Regulation (EC) No 1782/2003 of 29 September 2003 establishing common rules for direct support schemes under the common agricultural policy and establishing certain support schemes for farmers(54)."

Article 149

Amendments to Regulation (EC) No 1251/1999

Regulation (EC) No 1251/1999 is amended as follows:

1) In Article 4(3), the first indent shall be replaced by the following:

"for protein crops:

- EUR 63,00/t from the 2004/2005 marketing year onwards".

2) In Article 4(4), the amount of "EUR 19/t" shall be replaced by "EUR 24/t".

3) In Article 5:

(a) the first subparagraph shall be replaced by the following:"A supplement to the area payment of EUR 313/ha for the marketing year 2004/2005, shall be paid for the area down to durum wheat in the traditional production zones listed in Annex II, subject to the limits fixed in Annex III.";

(b) the fourth subparagraph shall be replaced by the following:"In regions where the production of durum wheat is well established, other than those referred to in Annex II, special aid amounting to EUR 93/ha for the marketing year 2004/2005 shall be granted up to a limit of the number of hectares laid down in Annex IV."

Article 150

Amendments to Regulation (EC) No 1254/1999

Regulation (EC) No 1254/1999 is amended as follows:

1) In Article 10(1) second subparagraph, the percentage of "20 %" shall be replaced by "40 %".

2) In Annex I, in the table concerning Special premium, the figure for Austria is replaced by "373400".

3) In Annex II, in the table concerning Suckler cow premium, the figures for Austria and Portugal are replaced respectively by "375000" and "416539".

Article 151

Amendments to Regulation (EC) No 1673/2000

Regulation (EC) No 1673/2000 is hereby amended as follows:

1) Article 1 is amended as follows:

(a) In paragraph 2, point (a) shall be replaced by the following:

"(a) 'farmer' shall mean a farmer as defined in Article 2(a) of Council Regulation (EC) No 1782/2003 + of 29 September 2003 establishing common rules for direct support schemes under the common agricultural policy and establishing certain support schemes for farmers(55)."

(b) In paragraph 3, "Regulation (EC) No 1251/1999" shall be replaced by "Article 52 of Regulation (EC) No 1782/2003 +"

2) In the first and second indent of Article 5(2), "Article 5a of Regulation (EC) No 1251/1999" shall be replaced by "Article 52 of Regulation (EC) No 1782/2003 +".

Article 152

Amendments to other Regulations

The following provisions are deleted:

(a) Article 3 of Regulation (EEC) No 2358/71;

(b) Articles 3 to 25 of Regulation (EC) No 1254/1999;

(c) Articles 3 to 11 of Regulation (EC) No 2529/2001.

Article 153

Repeals

1. Regulation (EEC) No 3508/92 is hereby repealed. However, it shall continue to apply to applications for direct payments in respect of the calendar years preceding 2005.

2. Regulation (EC) No 1017/94 is hereby repealed starting from 1 January 2005.

3. Regulation (EC) No 1577/96 and Regulation (EC) No 1251/1999 are hereby repealed. However, they shall continue to apply to the marketing year 2004/2005.

4. Regulation (EC) No 1259/1999 is hereby repealed starting from 1 May 2004. However, Articles 2a and 11 of Regulation (EC) No 1259/1999 as well as, for the purpose of applying those Articles, the Annex of that Regulation shall continue to apply until 31 December 2005. Furthermore Articles 3, 4, 5 and, for the purpose of applying those Articles, the Annex of that Regulation (EC) No 1259/1999 shall continue to apply until 31 December 2004.

5. References made to the repealed Regulations shall be construed as being made to this Regulation.

Article 154

Transitional rules for the simplified scheme

Where a Member State applies the simplified scheme referred to in Article 2a of Regulation (EC) No 1259/1999, the following provisions shall apply:

(a) 2003 shall be the last year in which participants may introduce new applications;

(b) Participants shall continue to receive the amount established under the simplified scheme until 2005;

(c) Chapters 1 and 2 of Title II of this Regulation shall not apply to the amounts granted under the simplified scheme during the participation in the scheme;

(d) Farmers participating in the simplified scheme shall not be entitled to apply for the single payment as long they participate in the simplified scheme. In case of application for the single payment scheme, the amount granted under the simplified scheme shall be included in the reference amount referred to in Article 37 and calculated and adjusted according to Chapter 2 of Title III of this Regulation.

Article 155

Other transitional rules

Further measures required to facilitate the transition from the arrangements provided for in the Regulations referred to in Articles 152 and 153 to those established by this Regulation, notably those related to the application of Articles 4 and 5 and the Annex of Regulation (EC) No 1259/1999, Article 6 of Regulation (EC) No 1251/1999 and those related to the improvement plans referred to in Article 86 of this Regulation, may be adopted in accordance with the procedure referred to in Article 144(2) of this Regulation. Regulations and Articles referred to in Articles 152 and 153 shall continue to apply for the purpose of the establishment of the reference amounts referred to in Annex VII.

Article 156

Entry into force and application

1. This Regulation shall enter into force on the seventh day following that of its publication in the Official Journal of the European Union.

2. It shall apply as of the date of entry into force, with the following exceptions:

(a) Title II, Chapters 4 and 5 shall apply to the applications for payments made in respect of the calendar year 2005 and onwards. However, Article 28(2) shall apply for the application for payments under Title IV, Chapters 1 to 7 from 1 January 2004.

(b) Title IV, Chapters 1, 2, 3, 6, and Article 149 shall apply starting from marketing year 2004/2005.

(c) Title IV, Chapters 4, 5, 7 and Article 150 shall apply from 1 January 2004.

(d) Title II, Chapter 1, Article 20, Title III, Title IV Chapters 8, 10, 11, 12 and 13 and Article 147 shall apply from 1 January 2005, except Article 147(3)(d) which shall apply from 1 April 2003.

(e) Title IV, Chapter 9 shall apply from marketing year 2005/2006.

(f) Article 151 and 152 shall apply from 1 January 2005, except Article 152(a) which shall apply from the marketing year 2005/2006.

This Regulation shall be binding in its entirety and directly applicable in all Member States.

Done at Brussels, 29 September 2003.

For the Council

The President

G. Alemanno

(1) Opinion delivered on 5 June 2003 (not yet published in the Official Journal).

(2) OJ C 208, 3.9.2003, p. 64.

(3) Opinion delivered on 2 July 2003 (not yet published in the Official Journal).

(4) OJ L 160, 26.6.1999, p. 113. Regulation as amended by Regulation (EC) No 1244/2001 (OJ L 173, 27.6.2001, p. 1).

(5) OJ L 160, 26.6.1999, p. 103.

(6) OJ L 355, 5.12.1992, p. 1. Regulation as last amended by Commission Regulation (EC) No 495/2001 (OJ L 72, 14.3.2001, p. 6).

(7) OJ L 160, 26.6.1999, p. 80.

(8) OJ L 193, 29.7.2000, p. 16. Regulation as amended by Commission Regulation (EC) No 651/2002 (OJ L 101, 17.4.2002, p. 3).

(9) OJ L 197, 30.7.1994, p. 4. Regulation as last amended by Regulation (EC) No 962/2002 (OJ L 149, 7.6.2002, p. 1).

(10) OJ L 198, 21.7.2001, p. 26.

(11) OJ L 112, 3.5.1994, p. 2. Regulation as last amended by Regulation (EC) No 2582/2001 (OJ L 345, 29.12.2001, p. 5).

(12) OJ L 206, 16.8.1996, p. 4. Regulation as last amended by Regulation (EC) No 811/2000 (OJ L 100, 20.4.2000, p. 1).

(13) OJ L 160, 26.6.1999, p. 1. Regulation as last amended by Regulation (EC) No 1038/2001 (OJ L 145, 31.5.2001, p. 16).

(14) OJ L 246, 5.11.1971, p. 1. Regulation as last amended by Regulation (EC) No 154/2002 (OJ L 25, 29.1.2002, p. 18).

(15) OJ L 184, 27.7.1993, p. 1 (OJ L 68, 12.3.2002, p. 4). Regulation as last amended by Regulation (EC) No 442/2002.

(16) OJ L 160, 26.6.1999, p. 21. Regulation as last amended by Regulation (EC) No 806/2003 (OJ L 122, 16.5.2003, p. 1).

(17) OJ L 198, 21.7.2001, p. 11.

(18) OJ L 198, 21.7.2001, p. 45. Regulation as last amended by Commission Regulation (EC) No 1922/2002 (OJ L 293, 29.10.2002, p. 11).

(19) OJ L 341, 22.12.2001, p. 3.

(20) OJ L 184, 17.7.1999, p. 23.

(21) OJ L 355, 15.12.1992, p. 32. Directive as amended by the 1994 Act of Accession.

(22) OJ L 204, 11.8.2000, p. 1.

(23) OJ 172, 30.9.1966, p. 3025/66. Regulation as last amended by Regulation (EC) No 1513/2001 (OJ L 201, 26.7.2001, p. 4).

(24) OJ L 215, 30.7.1992, p. 85. Regulation repealed by Regulation (EC) No 1257/1999 (OJ L 160, 26.6.1999, p. 80).

(25) Commission Regulation (EC) No 2419/2001 of 11 December 2001 laying down detailed rules for applying the integrated administration and control system for certain Community aid schemes established by Council Regulation (EEC) No 3508/92 (OJ L 327, 12.12.2001, p. 11). Regulation as amended by Commission Regulation (EC) No 2550/2001 (OJ L 341, 22.12.2001, p. 105).

(26) OJ L 132, 23.5.1990, p. 17. Regulation repealed by Regulation (EC) No 2529/2001 (OJ 341, 22.12.2001, p. 3).

(27) OJ L 297, 21.11.1996, p. 1. Regulation as last amended by Commission Regulation (EC) No 47/2003 (OJ L 7, 11.1.2003, p. 64).

(28) OJ L 297, 21.11.1996, p. 29. Regulation as last amended by Commission Regulation (EC) No 453/2002 (OJ L 72, 14.3.2002, p. 9).

(29) OJ L 198, 22.7.1991, p. 1. Regulation as last amended by Commission Regulation (EC) No 806/2003 (OJ L 122, 16.5.2003, p. 1).

(30) OJ L 118, 20.5.1972, p. 1. Regulation as last amended by Commission Regulation (EC) No 1363/95 (OJ L 132, 16.6.1995, p. 8).

(31) OJ L 123, 17.5.2003, p. 42.

(32) OJ L 405, 31.12.1992, p. 1. Regulation as last amended by Commission Regulation (EC) No 572/2003 (OJ L 82, 29.3.2003, p. 20).

(33) See page 123 of this Official Journal.

(34) Commission Regulation (EC) No 2316/1999 of 22 October 1999 laying down detailed rules for the application of Council Regulation (EC) No 1251/1999 establishing a support system for producers of certain arable crops (OJ L 280, 30.10.1999, p. 43). Regulation as last amended by Regulation (EC) No 1035/2003 (OJ L 150, 18.6.2003, p. 24).

(35) OJ L 204, 11.8.2000, p. 1.

(36) OJ L 161, 26.6.1999, p. 1. Regulation as last amended by Regulation (EC) No 1105/2003 (OJ L 158, 27.6.2003, p. 3).

(37) Council Directive 96/22/EC of 29 April 1996 concerning the prohibition on the use in stockfarming of certain substances having a hormonal or thyrostatic action and of β-agonists, and repealing Directives 81/602/EEC, 88/146/EEC and 88/299/EEC (OJ L 125, 23.5.1996, p. 3).

(38) Council Directive 96/23/EC of 29 April 1996 on measures to monitor certain substances and residues thereof in live animals and animal products and repealing Directives 85/358/EEC and 86/469/EEC and Decisions 89/187/EEC and 91/664/EEC (OJ L 125, 23.5.1996, p. 10). Directive as amended by Regulation (EC) No 806/2003 (OJ L 122, 16.5.2003, p. 1).

(39) OJ L 147, 18.6.1993, p. 25.

(40) Commission Regulation (EEC) No 3887/92 of 23 December 1992 laying down detailed rules for applying the integrated administration and control system for certain Community aid schemes (OJ L 391, 31.12.1992, p. 36). Regulation repealed by Regulation (EC) No 2419/2001 (OJ L 327, 12.12.2001, p. 11).

(41) OJ L 270, 21.10.2003, p. 1.

(42) OJ L 160, 26.6.1999, p. 21. Regulation as last amended by Regulation (EC) No 806/2003 (OJ L 122, 16.5.2003, p. 1).

(43) OJ L 341, 22.12.2001, p. 3.

(44) OJ L 270, 21.10.2003, p. 1.

(45) OJ L 160, 26.6.1999, p. 21. Regulation as last amended by Regulation (EC) No 806/2003 (OJ L 122, 16.5.2003, p. 1).

(46) OJ L 341, 22.12.2001, p. 3.

(47) OJ L 270, 21.10.2003, p. 1.

(48) OJ L 160, 26.6.1999, p. 21. Regulation as last amended by Regulation (EC) No 806/2003 (OJ L 122, 16.5.2003, p. 1).

(49) OJ L 341, 22.12.2001, p. 3.

(50) OJ L 405, 31.12.1992, p. 1. Regulation as last amended by Commission Regulation (EC) No 572/2003 (OJ L 82, 29.3.2003, p. 20).

(51) OJ L 270, 21.10.2003, p. 1.

(52) OJ L 160, 26.6.1999, p. 21. Regulation as last amended by Regulation (EC) No 806/2003 (OJ L 122, 16.5.2003, p. 1).

(53) OJ L 341, 22.12.2001, p. 3.

(54) OJ L 270, 21.10.2003, p. 1

(55) OJ L 270, 21.10.2003, p. 1.

ANNEX I

List of support schemes fulfilling the criteria set out in Article 1

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ANNEX II

National ceilings referred to in Article 12(2)

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ANNEX III

Statutory management requirements referred to in Articles 3 and 4

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ANNEX IV

Good agricultural and environmental condition referred to in Article 5

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ANNEX V

Compatible support schemes referred to in Article 26

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ANNEX VI

List of direct payments in relation to the single payment referred to in Article 33

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ANNEX VII

Calculation of the reference amount referred to in Article 37

A. Area aids

1. Where a farmer has received area aids, the number of hectares, to two decimal places, for which a payment has been granted, respectively, in each year of the reference period, shall be multiplied by the following amounts:

1.1. For cereals, including durum wheat, oilseeds, protein crops, linseed, flax and hemp grown for fibre, grass silage and set-aside:

- EUR 63/t multiplied by the yield as provided for in Article 4(2) of Regulation (EC) No 1251/1999 determined in the regionalisation plan for the region concerned applicable in the calendar year 2002.

This point shall apply without prejudice to the provisions laid down by Member States in application of Article 6(6) of Regulation (EC) No 1251/1999.

By way of derogation from Article 38, for flax and hemp, the average shall be calculated on the basis of the number hectares for which a payment was granted in the calendar year 2001 and 2002.

1.2. For rice:

-

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1.3. For grain legumes:

- for lentils and chick peas, EUR 181/ha

- for vetches, respectively, EUR 175,02/ha in 2000, EUR 176,60/ha in 2001 and EUR 150,52/ha in 2002.

2. Where a farmer has received durum wheat supplement or special aid, the number of hectares, to two decimal places, for which such a payment has been granted, respectively, in each year of the reference period, shall be multiplied by the following amounts:

In the zones listed in Annex II of Regulation (EC) No 1251/1999 and in Annex IV of Regulation (EC) No 2316/1999:

- EUR 291/ha for the single payment to be granted for the calendar year 2005,

- EUR 285/ha for the single payment to be granted for the calendar year 2006 and subsequent calendar years.

In the zones listed in Annex V of Regulation (EC) No 2316/1999:

- EUR 46/ha for the single payment to be granted for the calendar year 2005.

3. For the purpose of the preceding points, "number of hectares" shall mean the determined number of hectares corresponding to each different type of area aid listed in Annex VI of this Regulation, for which all the conditions laid down in the rules for the granting of the aid have been met, taking into account the application of Articles 2(4) and 5 of Regulation (EC) No 1251/1999. In case of rice, by way of derogation to Article 6(5) of Council Regulation (EC) No 3072/95, where the areas given over to rice in one Member State in the reference period exceeded its Maximum Guaranteed Area for this period, the amount per hectare shall be reduced proportionally.

B. Potato starch payment

Where a farmer has received potato starch payment, the amount shall be calculated by multiplying the number of tonnes for which such a payment has been granted, respectively, in each year of the reference period, by EUR 44,22 per tonne of potato starch. Member states shall calculate the number of hectares to be included in calculation of the single payment proportionately to the number of tonnes of potato starch produced for which the aid provided for in Article 8(2) of Regulation (EEC) No 1766/92 has been granted, respectively, in each year of the reference period, and within the limits of a base area to be fixed by the Commission on the basis of the number of hectares, covered by a cultivation contract in the reference period, communicated by Member States.

C. Livestock premiums and supplements

Where a farmer has received livestock premiums and/or supplements, the amount shall be calculated by multiplying the number of determined animals for which such a payment has been granted, respectively, in each year of the reference period, by the amounts per head established for the calendar year 2002 by the corresponding Articles referred to in Annex VI, taking into account the application of Article 4(4), Article 7(2) and Article 10(1) of Regulation (EC) No 1254/1999 or Article 8(3) of Regulation (EC) No 2529/2001.

By way of derogation from Article 38, for sheep and goat additional payments granted on the basis of Article 11(2) first, second and fourth indent of Regulation (EC) No 2529/2001, the average shall be calculated on the basis of the number of animals for which the payment has been granted in the calendar year 2002.

However, the payments under Article 4(2) second subparagraph of Regulation (EC) No 1254/1999, shall not be taken into account.

Moreover, by way of derogation from Article 38, in case of application of Article 32(11) and (12) of Commission Regulation (EC) No 2342/1999 and Article 4 of Commission Regulation (EC) No 1458/2001, the number of animals, for which a payment was granted in the year during which such measures were applied, to be taken into account for the calculation of the reference amount, shall not be higher than the average of the number of animals for which a payment was granted in the year/years during which such measures were not applied.

D. Dried fodder

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Member States shall calculate the number of hectares to be included in calculation of the reference amounts proportionately to the number of tonnes of dried fodder produced for which the aid provided for in Article 3 of Regulation (EC) No 603/95 has been granted, respectively, in each year of the reference period, and within the limits of a base area to be fixed by the Commission on the basis of the number of hectares, covered by a cultivation contract or a declaration of areas in the reference period, communicated by Member States.

E. Regional aids

In the regions concerned, the following amounts shall be included in the calculation of the reference amount:

- EUR 24/t multiplied by the yields utilised for the area payments for cereals, oilseeds, linseed and flax and hemp grown for fibre in the regions indicated in Article 4(4) of Regulation (EC) No 1251/1999;

- the amount per head as provided for in Article 9(1)(a) and (b) of Regulation (EC) No 1452/2001, Articles 13(2) and (3), 22(2) and (3) of Regulation (EC) No 1453/2001, Article 5(2) and (3), 6(1) and (2) of Regulation (EC) No 1454/2001, multiplied by the number of animals for which such a payment has been granted in 2002;

- the amount per head as provided for in Article 6(2) and (3) of Regulation (EEC) No 2019/93 multiplied by the number of animals for which such a payment has been granted in 2002.

F. Seed aids

Where a farmer has received seed production aid, the amount shall be calculated by multiplying the number of tonnes for which such a payment has been granted, respectively, in each year of the reference period, by the amount per tonne established in application of Article 3 of Regulation (EEC) No 2358/71. Member States shall calculate the number of hectares to be included in calculation of the single payment proportionately to area accepted for certification for which the aid provided for in Article 3 of Regulation (EEC) No 2358/71 has been granted, respectively, in each year of the reference period, and within the limits of a base area to be fixed by the Commission on the basis of the total area accepted for certification as communicated to the Commission according to Regulation (EEC) No 3083/73. This total area shall not include the area accepted for certification for rice (Oryza sativa L.), spelt (Triticum spelta L.), and fibre and oil flax (Linum usitatissimum L.) and hemp (Cannabis sativa L.) that already has been declared for arable crops.

ANNEX VIII

National ceilings referred to in Article 41

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ANNEX IX

List of arable crops referred to in Article 66

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ANNEX X

Traditional production zones for durum wheat as referred to in Article 74

GREECE

Nomoi (prefectures) of the following regions

Central Greece

Peloponnese

Ionian Islands

Thessaly

Macedonia

Aegean Islands

Thrace.

SPAIN

Provinces

Almería

Badajoz

Burgos

Cádiz

Córdoba

Granada

Huelva

Jaén

Màlaga

Navarra

Salamanca

Sevilla

Toledo

Zamora

Saragossa

AUSTRIA

Pannonia:

1. Gebiete der Bezirksbauernkammern (Areas covered by District Farmers' Boards)

2046 Tullnerfeld-Klosterneuburg

2054 Baden

2062 Bruck/Leitha-Schwechat

2089 Baden

2101 Gänserndorf

2241 Hollabrunn

2275 Tullnerfeld-Klosterneuburg

2305 Korneuburg

2321 Mistelbach

2330 Krems/Donau

2364 Gänserndorf

2399 Mistelbach

2402 Mödling

2470 Mistelbach

2500 Hollabrunn

2518 Hollabrunn

2551 Bruck/Leitha-Schwechat

2577 Korneuburg

2585 Tullnersfeld-Klosterneuburg

2623 Wr. Neustadt

2631 Mistelbach

2658 Gänserndorf

2. Gebiete der Bezirksreferate (Areas covered by District Divisions)

3018 Neusiedl/See

3026 Eisenstadt

3034 Mattersburg

3042 Oberpullendorf

3. Gebiete der Landwirtschaftskammer (Areas covered by the Chamber of Agriculture)

1007 Wien

FRANCE

Regions

Midi-Pyrénées

Provence-Alpes-Côte d'Azur

Languedoc-Roussillon

Departments(1)

Ardèche

Drôme

ITALY

Regions

Abruzzo

Basilicata

Calabria

Campania

Latium

Marches

Molise

Umbria

Apulia

Sardinia

Sicily

Tuscany

PORTUGAL

Districts

Santarém

Lisbon

Setúbal

Portalegre

Évora

Beja

Faro

(1) Each of these departments may be linked to one of the abovementioned regions.

ANNEX XI

List of seed species referred to in Article 99

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