Aid to make good the damage caused by natural disasters in the agricultural sector
Article 37
1. Aid schemes to make good the damage caused by natural disasters shall be compatible with the internal market within the meaning of Article 107(2), point (b), of the Treaty and shall be exempted from the notification requirement of Article 108(3) thereof where they fulfil the conditions laid down in this Article and in Chapter I of this Regulation. 2. Aid shall be subject to the following conditions: (a) it shall be paid only when the competent authority of the Member State has formally recognised the character of the event as a natural disaster; (b) when there is a direct causal link between the natural disaster and the damage suffered by the undertaking. 3. The aid shall be paid directly to the undertaking concerned or to a producer group or organisation of which that undertaking is a member. Where the aid is paid to a producer group or organisation, the amount of aid shall not exceed the amount of aid to which that undertaking is eligible. 4. Aid schemes related to a natural disaster shall be established within three years and the aid paid out within four years from the date of the occurrence of the natural disaster. 5. The eligible costs shall be the damage incurred as a direct consequence of the natural disaster, as assessed by a public authority, by an independent expert recognised by the granting authority or by an insurance undertaking. 6. The damage incurred due to the natural disaster shall be calculated at the level of the individual beneficiary. 7. The aid may relate to the following: (a) the loss of income resulting from the full or partial destruction of the agricultural production and the means of production as referred to in paragraph 8; (b) material damage as referred to in paragraph 9. 8. The loss of income shall be calculated by subtracting: (a) the result of multiplying the quantity of the agricultural products produced in the year of the natural disaster, or in each following year affected by the full or partial destruction of the means of production, by the average selling price obtained during that year, from (b) the result of multiplying the average annual quantity of agricultural products produced in the three-year period preceding the natural disaster or a three year average based on the five-year period preceding the natural disaster, excluding the highest and lowest entry by the average selling price obtained. Where an SME was set up less than three years from the date of the occurrence of the natural disaster, the reference to the three-year period in paragraph 8, point (b) shall be understood as referring to the quantity produced and sold by an average undertaking of the same size as the applicant, namely a micro enterprise or a small enterprise or a medium enterprise, respectively, in the national or regional sector affected by the natural disaster. The loss of income may be calculated either at annual farm production level or at crop or livestock level. That amount may be increased by other costs incurred by the beneficiary directly linked to the natural disaster. That amount shall be reduced by any costs not incurred because of the natural disaster. Indexes may be used in order to calculate the annual agricultural production of the beneficiary provided that the calculation method used permits the determination of the real loss of the beneficiary in the given year. 9. The material damage to assets such as farm buildings, equipment and machinery, stocks and means of production caused by the natural disaster shall be calculated on the basis of the repair cost or economic value of the affected asset immediately before the disaster. It shall not exceed the repair cost or the decrease in fair market value caused by the disaster, namely the difference between the asset’s value immediately before and immediately after the disaster. 10. The aid and any other payments received to compensate the losses, including payments under insurance policies, shall be limited to 100 % of the eligible costs.