Introductory text

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Community, and in particular the third subparagraph of Article 37(2) thereof,

Having regard to the proposal from the Commission,

Having regard to the Opinion of the European Parliament^f1,

Having regard to the Opinion of the European Economic and Social Committee^f2,

Whereas:

Council Regulation (EC) No 318/2006 of 20 February 2006 on the common organisation of the markets in the sugar sector^f3 provides for an important reform of the sugar common market organisation. The measures introduced by that Regulation include a significant reduction in the institutional support price for Community sugar in steps.

As a consequence of reduced market support in the sugar sector, income support for farmers should be increased. The overall level of the payment should develop in parallel with the gradual reduction of market supports.

The de-coupling of direct producer support and the introduction of the single payment scheme are essential elements in the process of reforming the common agricultural policy aimed at moving away from a policy of price and production support to a policy of farmer income support. Regulation (EC) No 1782/2003^f4 introduced those elements for a variety of agricultural products.

In order to meet the objectives underlying the reform of the common agricultural policy, the support for sugar beet, cane and chicory used for the production of sugar or inulin syrup should be de-coupled and integrated into the single payment scheme.

Consequently, the rules on direct support schemes laid down in Regulation (EC) No 1782/2003 should be adapted.

To buffer the effects of the restructuring process in Member States which have granted the restructuring aid provided for in Council Regulation (EC) No 320/2006 of 20 February 2006 establishing a temporary scheme for the restructuring of the sugar industry in the Community^f5 for at least 50 % of the quota fixed in Regulation (EC) No 318/2006, sugar beet and cane producers should be granted an aid for a maximum of five consecutive years.

The level of individual income support should be calculated on the basis of the support the farmer has benefited from in the context of the common organisation of the market in the sugar sector for one or more marketing years to be determined by Member States.

To ensure the proper application of the support scheme and for reasons of budget control, provision should be made for keeping the overall income support within the limit of national envelopes calculated on the basis of a historical reference year and taking into account, during the four first years, of additional amounts resulting from derived prices.

Sugar beet and chicory growers in the new Member States have benefited since accession from price support in the framework of Regulation (EC) No 1260/2001 of 19 June 2001 on the common organisation of the markets in the sugar sector^f6. Therefore, the sugar payment and the sugar and chicory components in the single payment scheme should not be subject to the application of the schedule of increments provided for in Article 143a of Regulation (EC) No 1782/2003. For the same reasons, Member States applying the single area payment scheme should, moreover, have the possibility to grant the support resulting from the sugar reform in the form of a separate direct payment outside that scheme.

To ensure the proper application of the single payment scheme in the new Member States, provisions should be made regarding specific problems arising as a result of the transition from the single area payment scheme to the single payment scheme.

Member States that have opted or will opt for applying the single payment scheme only as from 1 January 2007 should be enabled to grant income support to growers of sugar beet, cane and chicory used for the production of sugar and inulin syrup in 2006 in the form of a payment based on the number of hectares of sugar beet, cane or chicory delivered. With regard to the calculation of the sugar beet and chicory component in the single payment scheme, Member States should have the possibility to determine the marketing years to be taken into account on a representative basis.

In order to solve, as the case may be, problems arising from the change-over from the current regime to the single payment scheme, it is appropriate to confer the power on the Commission to adopt the relevant transitional rules by amending Article 155 of Regulation (EC) No 1782/2003.

In order to earmark certain newly introduced payments as direct payments, Annex I to Regulation (EC) No 1782/2003 should be adapted.

In order to take account of the amount of income support provided for with regard to the sugar payment, the national ceilings provided for in Annexes II, VIII and VIIIa to Regulation (EC) No 1782/2003 should be adapted.

Difficulties have been identified when implementing the aid for energy crops. Article 90 of Regulation (EC) No 1782/2003 should therefore be adapted.

Regulation (EC) No 1782/2003 should be amended accordingly,

HAS ADOPTED THIS REGULATION: