Article 4
This Decision is addressed to the Italian Republic. Done at Brussels, 16 December 2003. For the Commission Franz Fischler Member of the Commission (1) OJ C 295, 10.11.1995, p. 5. (2) "Norme per consentire alle aziende agricole danneggiate da eccezionali avversità naturali l'accesso ai benefici della legge 30 gennaio 1991, n. 31. Rifinanziamento della legge regionale 25 marzo 1986 n. 13 nonché anticipazioni dell'intervento dello Stato per le finalità del D.M. 21 dicembre 1987, N. 524 in applicazione del Regolamento CEE n. 857/84" Gazzetta Ufficiale della Regione Siciliana, 16 January 1993. (Provisions to enable agricultural undertakings affected by exceptional weather events to benefit from the aids provided for by Law No 31 of 30 January 1991; Refinancing of regional law No 13 of 25 March 1986 as well as advanced payments on the aids to be provided by the National Government in accordance with Ministerial Decree No 524 of 21 December 1987 implementing Regulation (EEC) No 857/84). (3) See note 2 (4) More specifically, in opening the proceedings, the Commission stated that even though to a certain extent it was possible to "isolate" the assessment of Articles 1 and 6 of Law 6/93 from that of the national legislation on which the law was based, in practice it was not possible to ignore the links existing between the regional text and the national legislation on natural disasters quoted in the regional law of which the latter was at the same time a refinancing and an amendment. In fact in the first place, the two national texts provided for additional aid measures which, on the basis of the information available at the time might be cumulated with the regional measures. Secondly, the conditions for benefiting from the regional law were to be found in the national texts. In the absence of any information on these aspects the Commission therefore concluded that on the basis of the information available it was not in a position to verify the conformity of the regional aid measures with the Community criteria on aids to compensate farmers for damage caused by natural disasters. (5) Decreto Legge 6 dicembre 1990, n. 367 (in Gazzetta Ufficiale - serie generale - n. 285 del 6 dicembre 1990), coordinato con la legge di conversione 30 gennaio 1991, n. 31 (nella stessa Gazzetta Ufficiale alla pag. 3) recante: "Misure urgenti a favore delle aziende agricole e zootecniche danneggiate dalla eccezionale siccità verificatasi nell'annata agraria 1989-1990". (6) "Interventi per i danni causati dalle eccezionali calamità naturali e da avversità atmosferiche nei mesi di dicembre 1984 e gennaio 1985. Nuova disciplina per la riscossione agevolata dei contributi agricoli di cui alla legge 15 ottobre 1981, n. 590" Italian Official Gazette No 118 of 21 May 1985 (Measures to compensate damage caused by the exceptional weather events of December 1984 and January 1985. New provisions for easier access to the contributions provided for by Law No 590 of 15 October 1981). Gazzetta Ufficiale No 118 of 21 May 1985. (7) OJ C 295, 10.11.1995. (8) Commission letter VI/10837 of 19 April 2000. (9) OJ C 28, 1.2.2000, p. 2. As corrected in OJ C 232, 12.8.2000, p. 17. (10) Article 2 of Law No 185/92 provides that once the Regions have established, on the basis of technical reports made by the provincial public inspection services competent for agriculture, the areas which were hit by a natural disaster or by comparable exceptional adverse weather events and have assessed the damages, the Ministry of Agriculture, following verification of the effects of the event concerned, issues a Decree which declares the exceptional nature of the event and allows the grant of aid in favour of the affected undertakings which incurred damage equal at least to 35 % of their gross saleable production. According to the information provided by the competent authorities in their letter of November 2003 regarding the aids paid for natural disasters and comparable events from 1 January 2000, the technical elements for the evaluation of the exceptional nature of each weather event concerned (including the relevant meteorological information) and for the quantification of its consequential damages are contained in specific technical reports which are drafted by the provincial public inspection services competent for agriculture, on a case-by-case basis, following the event concerned. For each weather event, or group of weather events, which have resulted in damage equal at least to 35 % of the gross saleable production of the undertakings affected, after verification of the above regional inspection reports, the Ministry of Agriculture issues a Decree declaring the exceptional nature of the event concerned. As an example of the procedure described and of the data on the basis of which the exceptional nature of a weather event is declared, the national authorities sent a dossier regarding drought in Sicily (Agrigento) in the years 2001/2002. In the same letter the competent authorities indicated that, on the basis of the procedure described, from 2000 up to that date 370 Decrees of exceptional weather had been issued for the following Regions; they attached copies of the Decrees concerned (each Decree contains: an indication of the exceptional weather event concerned, the period during which the event took place, the affected area, and the type of aid provided for by Law 185/92 which could be granted). The Regions for which the Ministry of Agriculture issued the above decrees in the period 2000 to 2003 are as follows: Piedmont (28 decrees); Valle D'Aosta (one Decree); Lombardy (21 decrees); Liguria (15 decrees); Autonomous Province of Trento (12 Decrees); Autonomous Province of Bolzano (three Decrees); Veneto (20 Decrees); Friuli Venezia-Giulia (16 decrees); Emilia Romagna (26 Decrees); Tuscany (20 Decrees); Marche (13 Decrees); Umbria (20 Decrees); Lazio (nine Decrees); Campania (39 Decrees); Abruzzi (14 Decrees); Molise (nine Decrees); Apulia (31 Decrees); Basilicata (nine Decrees); Calabria 19 (Decrees); Sicily (36 Decrees); Sardinia (nine Decrees). (11) According to the information provided by the Italian authorities in the November 2003 letter, when the undertaking hit by the exceptional weather event grows only one type of crop and all the land belonging to it is affected in the same way, these two conditions (35 % damage to the crop and 35 % damage to the gross saleable production) coincide. On the other hand, when the undertaking hit by the exceptional weather event grows more than one type of crop, the affected crop (e.g. maize) must have suffered much higher damage than 35 % (e.g. 80 %), so that this damage, spread over the unaffected crops (e.g. vegetables), results in damage to the gross saleable production of not less than 35 %. (12) In their letter of November 2003 the Italian authorities pointed out that as of 1 January 2001, following the amendments introduced by Article 127(1) of Law 388/2000, the gross saleable production for calculating damage does not include contributions or other payments granted by the EU. (13) See the preceding footnote. (14) See footnote 9. (15) As indicated by the competent authorities in their November 2003 letter, regarding the aid paid from 1 January 2000, the assessment of the exceptional nature of the weather events giving rise to the payment of aid is based on technical data (including the relevant meteorological information) which are contained in the specific technical reports drafted by the provincial public inspection services competent for agriculture, on a case-by-case basis, after the events concerned. (16) See footnote 9. (17) These amounts are set out in Law No 185/92 and in the accompanying Circular; they do not take account of subsequent amendments. (18) Article 6 of the Decree Law establishes that its provisions enter into force from the day following its publication in the Italian Official Journal (16 September 2002). (19) As opposed to "passive protection" represented by insurance schemes. (20) Commission Regulation (EEC) No 3932/92 of 21 December 1992 on the application of Article 85 (3) of the Treaty to certain categories of agreements, decisions and concerted practices in the insurance sector (O J L 398 of 31.12.1992, p.7). (21) According to the information provided by the competent authorities in their letter of 20 November 2000, the types of contract which may benefit from public contributions are the same as those provided for Article 9 of Law No 185/92. (22) See for example Italy/Sardinia, aid N 554/2000 approved by letter SG 2000/D109513 of 22 December 2000. (23) NN 64/03 (ex N 618/02) (mutuality funds) and N 758/2002 (reinsurance fund). (24) For example aid for insurance contracts covering the total production of the holding which may be damaged by all adverse climatic events. (25) Article 6 of the Decree Law lays down that its provisions enter into force on the day following that of its publication in the Italian Official Journal (16 September 2002). (26) See Case C-730/79 [1980] ECR 2671, grounds 11 and 12. (27) Source: Eurostat. (28) According to consistent case law, the condition of the effect on the trade is met since the benefiting company carries out an economic activity which is the subject of trade between the Member States. The simple fact that aid strengthens the position of this company in relation to other competing companies in intra-Community trade, makes it possible to consider that this trade was affected. With regard to State aids in the agriculture sector it is settled case-law that, even when the overall amount of aid in question is small and it is divided among a large number of farmers, intra-Community trade and competition are affected (see Case C-113/2000 [2002] ECR I-7601, pointes 30 to 36 and 54 to 56; Case C-114/2000 [2002] ECR I-7657, points 46 to 52 and 68 to 69). (29) Case 102/87 French Republic v Commission of the European Communities ECR [1988] 4067. (30) See footnote 9. (31) OJ L 83, 27.3.1999, p. 1. (32) Working document VI/5934/86, 10.11.1986. Rules governing the grant of national aids in the event of damage to agricultural production or the means of agricultural production and national aids involving the defraying of a proportion of the insurance premiums covering such risks. (33) See footnote 9. (34) See for example: N 173/2001 (Italy-Sardinia); C12/A/95 (Italy). For all the exceptional adverse weather events for which Italy granted compensation under Law 185/92 from 1 January 2000 and the relevant meteorological data, see footnote 10 above. (35) According to the information provided by the Italian authorities in their November 2003 letter, when the undertaking affected by the exceptional weather event grows only one type of crop and all the land belonging to it is affected in the same way, these two conditions (35 % damage to the crop and 35 % damage to the gross saleable production) coincide. On the other hand, when the undertaking affected by the exceptional weather event grows more than one type of crop, the affected crop (e.g. maize) must have suffered much higher damage than 35 % (e.g. 80 %), so that this damage, spread over the unaffected crops (e.g. vegetables), results in damage to the gross saleable production of not less than 35 %. (36) See footnote 9. (37) See footnote 9. (38) See footnote 9. (39) As indicated above, Paragraph 2 of Article 3 of Law No 185/1992, listing the types of aid allowed in favour of agricultural holdings, was entirely replaced from 17 September 2002 by Article 1 of Law Decree No 200 of 13 September 2002 (Urgent assistance for the agriculture sector which was hit by exceptional weather events), as converted into Law No 256 of 13 November 2002. This measure is currently being examined by the Commission under Aid No NN 145/02 (ex N 636/02) and is not the subject of this Decision. (40) Point 11.2.1 states that: "... the Commission will continue to evaluate proposals to grant aid in accordance with Article 87(2)(b) on a case-by-case basis ...". Point 11.3.1 states that: "In order to enable the Commission to assess such aid schemes, notifications of aid measures to compensate for damage caused by adverse weather conditions should include appropriate supporting meteorological information". (41) Five-year soft loans, their amount being in proportion to the fixed operating costs and limited to the percentage reduction in income (see paragraph 36(c) of this Decision). (42) See for example aids N 877/95 and N 435/95. (43) See for example: N 679/2001 (Italy-Bolzano); N 250/2002 (Italy-Bolzano); N 301/2002 (Italy-Trento). (44) As indicated above, Article 3(2) of Law No 185/1992, listing the types of aid allowed for agricultural holdings, was entirely replaced from 17 September 2002 by Article 1 of Law Decree No 200 of 13 September 2002 (Urgent assistance for the agriculture sector hit by exceptional weather events), as converted into Law No 256 of 13 November 2002. This measure is currently being examined by the Commission under Aid No NN 145/02 (ex N 636/02) and is not the subject of this Decision. (45) See footnote 43. (46) Council Regulation (EC) No 1257/1999 of 17 May 1999 on support for rural development from the European Agricultural Guidance and Guarantee Fund (EAGGF) and amending and repealing certain Regulations (OJ L 160, 26.6.1999, p. 80); Regulation last amended by Regulation (EC) No 1783/2005 (OJ L, 21.10.2003, p. 70). (47) Aid cannot be granted to undertakings in financial difficulties except where such aid satisfies the conditions laid down in the Community Guidelines on State aid for rescuing and restructuring firms in difficulty. (48) The purchase of second-hand equipment may be regarded as eligible expenditure in duly substantiated cases when the four following conditions are met simultaneously: a declaration by the seller of the equipment confirms its exact origin and that the equipment has not already been the subject of national or Community assistance; the purchase of the equipment represents a particular advantage for the programme or project, or is made necessary by exceptional circumstances (no new equipment available on time, thus threatening proper execution of the project); reduction of the costs involved (and therefore of the amount of aid) as compared with the cost of the same equipment purchased new, while maintaining a good cost-benefit ratio; the second-hand equipment acquired must have the necessary technical and/or technological characteristics consistent with the requirements of the project. (49) See Case T-459/93 (Siemens SA v Commission [1995] ECR II-1675) and point 3.5 of the Guidelines. (50) As explained by the Italian authorities in their letter of 20 November 2000, the main difference between the three types of insurance contracts above lies in the fact that contracts under (a) above concern damage caused by individual weather events to individual crops; insurance contracts under (b) concern damage caused by a plurality of adverse events to individual crops or facilities, while insurance contracts under (c) concern damage caused by a plurality of events to more than one crop. (51) Under the rules previously applicable, these policies could qualify for a maximum 30 % degressive aid rate over a maximum period of 10 years. See the decision in Case C 12/A/95. (52) See for example Italy/Sardinia, aid N 554/2000 approved by letter SG 2000/D109513 of 22 December 2000. (53) Article 3(2) of Law No 185/1992, listing the types of aid allowed in favour of agricultural undertakings, was entirely replaced as of 17 September 2002, by Article 1 of Decree-Law No 200 of 13 September 2002 (Urgent assistance in favour of the agriculture sector affected by exceptional weather events) as transposed into Law No 256 of 13 November 2002. This measure is currently being examined by the Commission under Aid No NN 145/02 (ex N 636/02) and is not the subject of this Decision. (54) Point 11.2.1 states that: "...the Commission will continue to evaluate proposals to grant aid in accordance with Article 87(2)(b) on a case-by-case basis...". Point 11.3.1 states that: "In order to enable the Commission to assess such aid schemes, notifications of aid measures to compensate for damage caused by adverse weather conditions should include appropriate supporting meteorological information". (55) See paragraph 16. (56) See for example Italy/Sardinia, aid N 554/2000 approved by letter SG 2000/D109513 of 22 December 2000. (57) OJ L 210, 28.7.1998, p. 32. Regulation as amended by Regulation (EC) No 1513/2001 (OJ L 201, 26.7.2001, p.4).