Rights to aid in general

Since 2003, the legislature has pursued the reform of one of the most important policy areas of EU law, namely the common agricultural policy, the so-called CAP.

The first phase of this reform involved agricultural support schemes. The second phase focused on strengthening rural development policy.

The basic outlines of the system established by the reform were drawn by the community legislature.

Among the most notable innovations was the introduction of a support scheme for farmers that was profoundly divergent from previous aid schemes that were mostly tied to actual production in the various intervention sectors.

The new system provides for a single payment, which absorbs and replaces most of the direct payments made on the basis of the previous schemes, decoupled (“decoupled” to use EU jargon) from production and linked only to the size of the total farm area devoted to agricultural activity, with the only constraint being that good agronomic and environmental conditions are maintained and that standards relating to the environment, food safety and animal welfare and health are met.

This shift responds to a rationale of enhancing the competitiveness of community agriculture by shifting from a practice of price support to a policy of supporting the income of each farm devised in a way that allows farmers to optimize their choices with respect to the market.

A peculiarity of the system is the introduction of so-called environmental cross-compliance and modulation as common features of the generality of agricultural support schemes.

In relation to the first profile, the regulations make full payment of aid conditional on compliance with a number of basic requirements and which, as noted above, relate to the environment, food safety, animal welfare and health, and good agronomic and environmental conditions.

As for modulation, it consists, instead, of a gradual reduction in direct payments for the period 2005-2012 aimed at using the savings thus realized to finance rural development measures.

Italy, in implementing the CAP reform, opted by Ministerial Decree Aug. 5, 2004 no. 1787 for the maximum level of decoupling of aid from production under Regulation 1782/2003, excluding only, based on the possibility provided by Art. 70 of the same regulation, direct payments granted under Art. 3 of Reg. 2358/71, that is, those provided for seed producers.

The aforementioned decree was followed by specific, sectoral interventions, as well as a series of coordinating circulars issued by the Agency for Agricultural Disbursements (AGEA), the national body responsible for the centralized management of the Single Payment Scheme.

AGEA is a body established in 1999 to replace AIMA (the State Agricultural Market Intervention Agency) as of 2000. Among the functions attributed to AGEA by the legislation is, in addition to that of Paying Agency for EU aid, contributions and premiums provided for by European Union regulations, that of Coordinating Body of Italian Paying Agencies. In fact, given the possibility provided to the regions to set up special paying agencies, AGEA acts as a paying agency only where that competence has not been assigned to other bodies, in relation to which it plays a coordinating role.

In the aforementioned capacity, AGEA promotes the application of EU regulations by verifying the conformity and timing of the investigative and control procedures followed by the paying agencies; monitors the activities carried out by the paying agencies; and provides for the reporting to the European Union of the payments made by it and all other paying agencies.

Attorney Chiara Roncarolo

Attorney Maurizio Randazzo