Joint Committee on Statutory Instruments Eighth Report


APPENDIX 1

Memorandum by the Ministry of Agriculture, Fisheries and Food

HILL LIVESTOCK (COMPENSATORY ALLOWANCES) REGULATIONS 1999 (S.I. 1999/3316)

  1. By a letter dated 19 January 2000, the Committee has requested that a memorandum be submitted by the Ministry on three points.

      (1) Identify the provision (whether in this instrument or elsewhere) which excludes a producer from receiving compensatory allowances for the Scheme year where prohibited substances or their residues, or authorised substances or their residues held or used illegally, are found on or in animals on, his holding, as required by Article 14(3) of Council Regulation (EC) No. 1257/1999.

  2. In the Ministry's view, it would not be appropriate to make statutory provision in United Kingdom law to implement Article 14(3) of Council Regulation (EC) No. 1257/1999. This Article is a directly applicable provision of Community law, which empowers and obliges Member States to exclude producers from receiving compensatory allowances where (inter alia) residues of prohibited substances are detected in their animals and, correspondingly, obliges producers in those circumstances to repay any compensatory allowances already received by them. As such, the Article creates, in the words of section 2(1) of the European Communities Act 1972 (c.68) "rights, powers, liabilities [and] obligations" which in accordance with Community Treaties "are without further enactment to be given legal effect or used in the United Kingdom". The section provides that powers, liberties and obligations of this kind shall be recognised and available in law and be enforced, allowed and followed accordingly.

  3. Given the terms of section 2(1), the Ministry believes its right and power to withhold or recover compensatory allowances in the circumstances described in Article 14(3) derive directly from, and can be established solely by reference to, the Article itself, without the need for any United Kingdom statutory provision.

  4. The Notes for Guidance relating to the Hill Livestock Compensatory Allowance Scheme in England and Wales in 2000 draw attention to the exclusion penalties laid down in Article 14(3) for use and possession of prohibited substances and illegal use and possession of authorised substances. These notes are issued to all potential claimants under the Scheme.

  5. The two Directives referred to in Article 14(3), Council Directive 96/22/EC concerning the prohibition on the use in stockfarming of certain substances having a hormonal or thyrostatic action and of beta-agonists (OJ No L125, 23.5.96, p.3) and Council Directive 96/23/EC on measures to monitor certain substances and residues thereof in live animals and animal products (OJ No L125, 23.5.96, p.10) are implemented in the United Kingdom by the Animals and Animal Products (Examination for Residues and Maximum Residue Limits) Regulations 1997 (S.I. 1997/1729). The use and possession of prohibited substances, and the illegal use and possession of authorised substances - which Member States must penalize under Article 14(3) of Council Regulation (EC No 1257/1999) - are criminal offences under those Regulations.

      (2) Is the release of a claimant from his regulation 5 undertaking (to continue to farm land for a period of five years from first payment of a compensatory allowance) granted by Regulation 14(b) of this instrument by reason of any "material circumstance beyond his control" intended to be limited by, or to be construed by reference to, the provisions of Article 30 of Commission Regulation (EC) No 1750/1999 which specify (non-exhaustively) categories of force majeure?

  6. The phrase "any material circumstance beyond his control" is to be construed by reference to the provisions of Article 30 of Commission Regulation (EC) No 1750/1999. In the Ministry's view, it is clear that the "Rules common to several measures" in Articles 28 to 30 of the Regulation apply to the compensatory allowances for farmers in less-favoured areas (Hill Livestock Compensatory Allowances in the United Kingdom) provided for in Articles 13 to 21 of Council Regulation (EC) No 1257/1999 - for example, Article 28 of the Commission Regulation defines the "usual good farming practices" referred to in Article 14(2) of the Council Regulation. Moreover, these common rules apply to "long-term undertakings/commitments" given as "a condition for the grant of support" (see recital (17) and Article 29(1) of the Commission Regulation), which will include the undertaking to farm in a less-favoured area for at least five years as set out in Article 14(2) of the Council Regulation and reflected in regulation 5 of this instrument. The force majeure provisions of Article 30 of the Commission Regulation are, the Ministry believes, "a rule guaranteeing such flexibility for long-term undertakings" - including the regulation 5 undertaking - "as is needed to take account of events which could affect these commitments" (see again recital (17) to the Commission Regulation). From this, the Ministry concludes that Article 30 of the Commission Regulation governs "the material circumstances beyond [a farmer's] control" which justify releasing him from his undertaking to farm in a less-favoured area; and it follows that this concept in regulation 14(b) of this instrument is to be construed by reference to Article 30.

  7. The Ministry does not consider that the concept is to be limited by Article 30, given that the list of force majeure circumstances there is not exhaustive and Member States are expressly permitted to recognise other categories of force majeure (though these must, presumably, comply with the overall Community law concept of force majeure). There is thus no obligation on Member States to specify in their domestic legislation which circumstances set out in Article 30 - or, indeed, which other circumstances - they propose to recognise as force majeure. To do so might exclude genuine cases of force majeure not expressly foreseen in the legislation and could thus prove unduly restrictive.

      (3) Article 29(1) of Commission Regulation (EC) No 1750/1999 requires reimbursement of support granted if a beneficiary transfers all or part of his holding to another person who does not take over any commitment given as a condition for the grant of support for the remainder of the period; in contrast, regulation 14(c), of this instrument releases a claimant who ceases farming from his regulation 5 undertaking if at least three hectares of the eligible land last used by him for grazing continue to be used for agriculture. Is it intended, by virtue of regulation 14(c), that a claimant is released from his obligation so long as the specified portion of his land continues to be used for agriculture for any period of time after he ceases farming, or only if that portion of his land continues to be so used for the remainder of the period of the undertaking? If the former, explain how regulation 14(c) implements Article 29(1) of the Commission Regulation and, if the latter, explain the grounds on which the regulation has that effect.

  8. The Ministry acknowledges that there is an apparent inconsistency between regulation 14(c), which releases a claimant who ceases farming from his regulation 5 undertaking provided at least three hectares of his eligible land remain in agriculture, but without stipulating for how long this should be, and Article 29(1) of Commission Regulation 1750/1999, which requires (in effect) that the land remain in agriculture for the remainder of the five year period of the undertaking. As Article 29(1) is a superior rule of Community law, it clearly prevails, and the Ministry do not intend that claimants be released by regulation 14(c) if their land remains in agriculture for less than the remainder of the five year period.

  9. The Ministry believes, however, that it must be implicit in regulation 14(c) that the relevant land continue to be used for agriculture for the remainder of the five-year period, given that this period is a vital term of the regulation 5 undertaking which is being released. If the land need only continue to be used for agriculture for any period of time, however short, the original undertaking might be effectively nullified, which would clearly defeat the objective of regulation 5.

  10. Nevertheless, the Ministry concedes that it would be better to make this requirement explicit in regulation 14(c). This will be done when the new long-term statutory arrangements for support for farmers in less-favoured areas are introduced later this year.

25 January 2000


 
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