
CHAPTER 1
Article 1 

1. This Regulation shall apply to transparent aid granted to small and medium-sized agricultural holdings (farms) active in the primary production of agricultural products. Without prejudice to Article 9, it shall not apply to aid granted for expenditure linked to the processing or marketing of agricultural products.
2. Without prejudice to Article 16(1)(a), this Regulation shall not apply to:
(a) aid to export-related activities, namely aid directly linked to the quantities exported, to the establishment and operation of a distribution network or to other current expenditure linked to the export activity;
(b) aid contingent upon the use of domestic over imported goods.
Article 2 
For the purpose of this Regulation:

1.. ‘aid’ means any measure fulfilling all the criteria laid down in Article 87(1) of the Treaty;
2.. ‘agricultural product’ means:

((a)) the products listed in Annex I of the Treaty, except fishery and acquaculture products covered by Council Regulation (EC) No 104/2000;
((b)) products falling under CN codes 4502, 4503 and 4504 (cork products);
((c)) products intended to imitate or substitute milk and milk products, as referred to in Article 3(2) of Council Regulation (EEC) No 1898/87;
3.. ‘processing of agricultural products’ means any operation on an agricultural product resulting in a product which is also an agricultural product, except on farm activities necessary for preparing an animal or plant product for the first sale;
4.. ‘marketing of agricultural products’ means holding or display with a view to sale, offering for sale, delivery or any other manner of placing on the market, except the first sale by a primary producer to resellers or processors and any activity preparing a product for such first sale; a sale by a primary producer to final consumers shall be considered as marketing if it takes place in separate premises reserved for that purpose;
5.. ‘small and medium-sized enterprises’ (SME) means small and medium-sized enterprises as defined in Annex I to Regulation (EC) No 70/2001;
6.. ‘gross aid intensity’ means the aid amount expressed as a percentage of the project's eligible costs. All figures used shall be taken before any deduction for direct taxation. Where aid is awarded in a form other than a grant, the aid amount shall be the grant equivalent of the aid. Aid payable in several instalments shall be discounted to its value at the moment of granting. The interest rate to be used for discounting purposes and for calculating the aid amount in a soft loan shall be the reference rate applicable at the time of grant;
7.. ‘quality product’ is a product fulfilling the criteria to be defined pursuant to Article 32 of Regulation (EC) No 1698/2005;
8.. ‘adverse climatic event which can be assimilated to a natural disaster’ means weather conditions such as frost, hail, ice, rain or drought which destroy more than 30 % of the average of annual production of a given farmer in the preceding three-year period or a three-year average based on the preceding five-year period, excluding the highest and lowest entry;
9.. ‘less favoured areas’ means areas as defined by Member States on the basis of Article 17 of Regulation (EC) No 1257/1999;
10.. ‘investment made to comply with newly introduced minimum standards’ means:

((a)) in the case of standards which do not provide for any transitional period, investments actually started not more than two years after the date on which the standards are to be made compulsory vis-à-vis operators; or
((b)) in the case of standards which provides for a transitional period, investments actually started before the date on which the standards are to be made compulsory vis-à-vis operators;
11.. ‘young farmers’ means producers of agricultural products fulfilling the criteria laid down in Article 22 of Regulation (EC) No 1698/2005;
12.. ‘producer group’ means a group which is set up for the purpose of jointly adapting, within the objectives of the common market organisations, the production and output of its members to market requirements, in particular by concentrating supply;
13.. ‘producer association’ means an association which consists of recognised producer groups and pursues the same objectives on a larger scale;
14.. ‘fallen stock’ means animals which have been killed by euthanasia with or without definite diagnosis or have died (including stillborn and unborn animals) on a farm or any premise or during transport, but have not been slaughtered for human consumption;
15.. ‘TSE and BSE test costs’ means all costs, including those for test kits, taking, transporting, testing, storing and destruction of samples necessary for tests undertaken in accordance with Annex X, Chapter C to Regulation (EC) No 999/2001 of the European Parliament and of the Council;
16.. ‘enterprises in difficulty’ means enterprises considered in difficulty within the meaning of the Community guidelines on State aid for rescuing and restructuring firms in difficulty;
17.. ‘replacement investment’ means an investment that simply replaces an existing building or machine, or parts of it, by a new up-to date building or machine, without expanding the production capacity by at least 25 % or without fundamentally changing the nature of production or the technology involved. Neither the complete demolition of a farm building at least 30 years old and replacement by an up-to date building, nor the fundamental renovation of a farm building, are considered as replacement investments. Renovation is considered as fundamental when its cost amounts to at least 50 % of the value of the new building.
18.. ‘transparent aid’ means aid measures in which it is possible to calculate precisely the gross grant equivalent as a percentage of eligible expenditure ex ante without need to undertake a risk assessment (for example measures which use grants, interest rate subsidies, capped fiscal measures).
Article 3 

1. Transparent individual aid outside any scheme, fulfilling all the conditions of this Regulation, shall be compatible with the common market within the meaning of Article 87(3)(c) of the Treaty and shall be exempt from the notification requirement of Article 88(3) of the Treaty provided that the summary information provided for in Article 20(1) has been submitted and that the aid contains an express reference to this Regulation, by citing its title and publication reference in the Official Journal of the European Union.
2. Transparent aid schemes fulfilling all the conditions set out in this Regulation shall be compatible with the common market within the meaning of Article 87(3)(c) of the Treaty and shall be exempt from the notification requirement of Article 88(3) of the Treaty provided that:
(a) any aid that could be awarded under such scheme fulfils all the conditions set out in this Regulation;
(b) the scheme contains an express reference to this Regulation, citing its title and publication reference in the Official Journal of the European Union;
(c) the summary information provided for in Article 20(1) has been submitted.
3. Aid granted under the schemes referred to in paragraph 2 shall be compatible with the common market within the meaning of Article 87(3)(c) of the Treaty and shall be exempt from the notification requirement of Article 88(3) of the Treaty provided that the aid granted directly fulfils all the conditions of this Regulation.
4. Aid which does not fall within the scope of this Regulation, or of other Regulations adopted pursuant to Article 1 of Regulation (EC) No 994/98 or Regulations listed in Article 17 of this Regulation, shall be notified to the Commission in accordance with Article 88(3) of the Treaty. Such aid shall be assessed in accordance with the criteria laid down in the Community guidelines for State aid in the agriculture and forestry sector 2007-2013.
CHAPTER 2
Article 4 

1. Aid for investments in agricultural holdings within the Community for primary production of agricultural products, shall be compatible with the common market within the meaning of Article 87(3)(c) of the Treaty and shall be exempt from the notification requirement of Article 88(3) of the Treaty if it fulfils the conditions set out in paragraphs 2 to 10 of this Article.
2. The gross aid intensity must not exceed:
(a) 50 % of eligible investments in less favoured areas or in areas referred to in Article 36(a)(i), (ii) and (iii) of Regulation (EC) No 1698/2005, as designated by Member States in accordance with Articles 50 and 94 of that Regulation;
(b) 40 % of eligible investments in other regions;
(c) 60 % of eligible investments in less-favoured areas or in areas referred to in Article 36(a)(i), (ii) and (iii) of Regulation (EC) No 1698/2005, as designated by Member States in accordance with Articles 50 and 94 of that Regulation, and 50 % in other regions, in the case of investments made by young farmers within five years of setting up;
(d) 75 % of eligible investments in the outermost regions and the small Aegean Islands within the meaning of Council Regulation (EEC) No 2019/93;
(e) 75 % of eligible investments in regions referred to in point (a) and 60 % in other regions where investments result in extra costs relating to the protection and improvement of the environment, the improvement of hygiene conditions of livestock enterprises or the welfare of farm animals. This increase may only be granted for investments which go beyond the minimum Community requirements in force, or for investments made to comply with newly introduced minimum standards. The increase must be limited to the extra eligible costs necessary and must not apply in the case of investments which result in an increase in production capacity.
3. The investment must pursue notably the following objectives:
(a) reduction of production costs;
(b) improvement and re-deployment of production;
(c) improvement in quality;
(d) preservation and improvement of the natural environment, or the improvement of hygiene conditions or animal welfare standards.
4. The eligible expenses may include:
(a) the construction, acquisition or improvement of immovable property;
(b) the purchase or lease-purchase of machinery and equipment, including computer software up to the market value of the asset;
(c) general costs linked to expenditure under points (a) and (b), such as architects, engineers and consultation fees, feasibility studies, the acquisition of patents and licences.Costs connected with a leasing contract other than those listed in point (b) of the first subparagraph, such as tax, lessor's margin, interest refinancing costs, overheads insurance, charges, etc. are not eligible expenditure.
5. Aid may only be granted to agricultural holdings which are not enterprises in difficulty.Aid may be granted in order to enable the beneficiary to reach newly introduced minimum standards regarding the environment, hygiene and animal welfare.
6. The aid must not be granted in contravention of any prohibitions or restrictions laid down in Council Regulations establishing common organisations of the market, even where such prohibitions and restrictions only refer to Community support.
7. The aid must not be limited to specific agricultural products and must therefore be open to all sectors of agriculture, unless a Member State excludes certain products because of overcapacity or a lack of market outlets. Aid must not be granted in respect of the following:
(a) the purchase of production rights, animals and annual plants;
(b) the planting of annual plants;
(c) drainage works or irrigation equipment and irrigation works, unless such investment leads to a reduction of previous water use of at least 25 %;
(d) simple replacement investments.
8. Aid may be granted for a purchase of land other than land for construction purposes costing up to 10 % of the eligible expenses of the investment.
9. The maximum amount of aid granted to an individual enterprise must not exceed EUR 400 000 over any period of three fiscal years, or EUR 500 000 if the enterprise is situated in a less favoured area or in an area referred to in Article 36(a)(i), (ii) or (iii) of Regulation (EC) No 1698/2005, as designated by Member States in accordance with Articles 50 and 94 of that Regulation.
10. The aid must not be granted in respect of the manufacture of products which imitate or substitute for milk and milk products.
Article 5 

1. Aid for conservation of traditional landscapes and buildings shall be compatible with the common market within the meaning of Article 87(3)(c) of the Treaty and shall be exempt from the notification requirement of Article 88(3) of the Treaty if it complies with the provisions of paragraphs 2 and 3 of this Article.
2. Aid may be granted up to 100 % of the real costs incurred as regards investments or capital works intended for the conservation of non-productive heritage features located on agricultural holdings, such as archaeological or historical features. These costs may include reasonable compensation for the work undertaken by the farmer himself, or his workers, up to a limit of EUR 10 000 a year.
3. Aid may be granted up to 60 %, or 75 % in less favoured areas or in areas referred to in Article 36(a)(i), (ii) or (iii) of Regulation (EC) No 1698/2005, as designated by Member States in accordance with Articles 50 and 94 of that Regulation, of the real costs incurred as regards investments or capital works intended for the conservation of heritage features of productive assets on farms, such as farm buildings, provided that the investment does not entail any increase in the production capacity of the farm.Where there is an increase in production capacity, the aid rates for investment established in Article 4(2) shall apply as regards eligible expenses resulting from undertaking the relevant work using normal contemporary materials. Additional aid may be granted at a rate of up to 100 % to cover the extra costs incurred by using traditional materials necessary to maintain the heritage features of the building.
Article 6 

1. Aid for the relocation of farm buildings shall be compatible with the common market within the meaning of Article 87(3)(c) of the Treaty and shall be exempt from the notification requirement of Article 88(3) of the Treaty if it is in the public interest and fulfils the conditions set out in paragraphs 2, 3 and 4 of this Article.The public interest invoked to justify the granting of aid under this Article shall be specified in the relevant provisions of the Member State.
2. Aid may be granted up to 100 % of the actual costs incurred where a relocation in the public interest simply consists of the dismantling, removal and re-erection of existing facilities.
3. Where the relocation in the public interest results in the farmer benefiting from more modern facilities, the farmer must contribute at least 60 %, or 50 % in less favoured areas or in areas referred to in Article 36(a)(i), (ii) or (iii) of Regulation (EC) No 1698/2005, as designated by Member States in accordance with Articles 50 and 94 of that Regulation, of the increase in the value of the facilities concerned after relocation. If the beneficiary is a young farmer, this contribution shall be at least 55 % or 45 % respectively.
4. Where the relocation in the public interest results in an increase in production capacity, the contribution from the beneficiary must be at least equal to 60 %, or 50 % in less favoured areas or in areas referred to in Article 36(a)(i), (ii) or (iii) of Regulation (EC) No 1698/2005, as designated by Member States in accordance with Articles 50 and 94 of that Regulation, of the expenses relating to this increase. If the beneficiary is a young farmer, this contribution shall be at least 55 % or 45 %.
Article 7 
Aid for the setting up of young farmers shall be compatible with the common market within the meaning of Article 87(3)(c) of the Treaty and shall be exempt from the notification requirement of Article 88(3) of the Treaty if the criteria set out in Article 22 of Regulation (EC) No 1698/2005 are fulfilled.
Article 8 
Aid for early retirement of farmers shall be compatible with the common market within the meaning of Article 87(3)(c) of the Treaty and shall be exempt from the notification requirement of Article 88(3) of the Treaty under the following conditions:

((a)) the criteria set out in Article 23 of Regulation (EC) No 1698/2005 and any rules adopted by the Commission to implement that Article must be fulfilled;
((b)) the cessation of commercial farming activities must be permanent and definitive.
Article 9 

1. Start-up aid for the constitution of producer groups or producer associations shall be compatible with the common market within the meaning of Article 87(3)(c) of the Treaty and shall be exempt from the notification requirement of Article 88(3) of the Treaty if it complies with the provisions of paragraphs 2 to 8 of this Article.
2. The following shall be eligible for the aid referred to in paragraph 1, provided that they are entitled to financial assistance under the legislation of the Member State concerned:
(a) producer groups or producer associations involved in the production of agricultural products; and/or
(b) associations of producers responsible for the supervision of the use of geographical indications and designations of origin or quality marks in conformity with Community law.The internal rules of the producer group or association must provide an obligation on members to market production in accordance with the rules on supply and placing on the market drawn up by the group or association. Those rules may permit a proportion of the production to be marketed directly by the producer. They must require producers joining the group or association to remain members for at least three years and to give at least 12 months notice of withdrawal. In addition they must provide common rules on production, in particular relating to product quality, or use of organic practices or other practices designed to protect the environment, common rules for placing goods on the market and rules on product information, with particular regard to harvesting and availability. However, producers must remain responsible for managing their holdings. The agreements concluded in the framework of the producer group or association must comply fully with all relevant provisions of competition law, in particular Articles 81 and 82 of the Treaty.
3. The eligible expenses may include the rental of suitable premises, the acquisition of office equipment, including computer hardware and software, administrative staff costs, overheads and legal and administrative fees. If premises are purchased, the eligible expenses for premises must be limited to rental costs at market rates.
4. The aid must not be paid in respect of costs incurred after the fifth year, or paid following the seventh year after recognition of the producer organisation. This is without prejudice to grant aid towards eligible expenses limited to and resulting from a year-on-year increase in turnover of a beneficiary of at least 30 % where this is due to the accession of new members and/or the coverage of new products.
5. The aid must not be granted to production organisations such as companies or co-operatives, the objective of which is the management of one or more agricultural holdings and which are therefore in effect single producers.
6. The aid must not be granted to other agricultural associations, which undertake tasks at the level of agricultural production, such as mutual support and farm relief and farm management services, in the members' holdings without being involved in the joint adaptation of supply to the market.
7. The total amount of aid granted to a producer group or association under this Article must not exceed EUR 400 000.
8. The aid must not be granted to producer groups or associations the objectives of which are incompatible with a Council Regulation setting up a common market organisation.
Article 10 

1. Aid to compensate farmers for the costs of prevention and eradication of animal or plant diseases or pest infestations incurred for the costs of health checks, tests and other screening measures, purchase and administration of vaccines, medicines and plant protection products, slaughter and destruction costs of animals and costs of destruction of crops shall be compatible with the common market within the meaning of Article 87(3)(c) of the Treaty and shall be exempt from the notification requirement of Article 88(3) of the Treaty if it fulfils the following conditions and the conditions set out in paragraphs 4 to 8 of this Article:
(a) the gross aid intensity must not exceed 100 %;
(b) the aid shall be granted in kind by means of subsidised services and must not involve direct payments of money to producers.
2. Aid to compensate farmers for losses caused by animal or plant diseases or pest infestations shall be compatible with the common market within the meaning of Article 87(3)(c) of the Treaty and shall be exempt from the notification requirement of Article 88(3) of the Treaty if it fulfils the following conditions and the conditions set out in paragraphs 4 to 8 of this Article:
(a) compensation must be calculated only in relation to:
((i)) the market value of animals killed or plants destroyed by the disease or pest infestation or of animals killed or plants destroyed by public order as part of a compulsory public prevention or eradication programme;
((ii)) income losses due to quarantine obligations and difficulties in restocking or replanting;
(b) the gross aid intensity must not exceed 100 %;
(c) the aid must be limited to losses caused by diseases for which an outbreak has been formally recognised by public authorities.
3. The maximum amount of costs or loss eligible for aid pursuant to paragraphs 1 and 2 must be reduced by:
(a) any amount received under insurance schemes; and
(b) costs not incurred because of the disease, which would otherwise have been incurred.
4. Payments must be made in relation to diseases or pests for which Community or national provisions exist, whether laid down by law, regulation or administrative action. Payments must thus be made as part of a public programme at Community, national or regional level for the prevention, control or eradication of the disease or pest concerned. The diseases or pest infestation must be clearly identified in the programme, which must also contain a description of the measures concerned.
5. The aid must not relate to a disease in respect of which Community legislation provides for specific charges for control measures.
6. The aid must not relate to measures in respect of which Community legislation provides that the cost of such measures is to be borne by the agricultural holding, unless the cost of such aid measures is entirely offset by compulsory charges on producers.
7. As regards animal diseases, the aid must be granted in respect of diseases mentioned in the list of animal diseases established by the World Organisation for Animal Health and/or in the Annex to Council Decision 90/424/EEC.
8. Aid schemes must be introduced within three years following the occurrence of the expense or loss. Aid must be paid out within four years following the occurrence.
Article 11 

1. Aid to compensate farmers for losses of plants or animals or farm buildings caused by adverse climatic events which can be assimilated to natural disasters shall be compatible with the common market within the meaning of Article 87(3)(c) of the Treaty and shall be exempt from the notification requirement of Article 88(3) of the Treaty if it fulfils the conditions set out in paragraphs 2 to 6, 9 and 10 of this Article as far as plants or animals are concerned, and paragraphs 3 to 8 and 10 of this Article as far as farm buildings are concerned.
2. Gross aid intensity must not exceed 80 %, and 90 % in less favoured areas or in areas referred to in Article 36(a)(i), (ii) or (iii) of Regulation (EC) No 1698/2005, as designated by Member States in accordance with Articles 50 and 94 of that Regulation, of the reduction in income from the sale of the product resulting from the adverse climatic event. That reduction in income shall be calculated by subtracting:
(a) the result of multiplying the quantity of product produced in the year of the adverse climatic event by the average selling price obtained during that year;
(b) the result of multiplying the average annual quantity produced in the preceding three-year period (or a three-year average based on the preceding five-year period, excluding the highest and lowest entry) by the average selling price obtained.The amount thus eligible for aid may be increased by other costs specifically incurred by the farmer because of non-harvesting due to the adverse event.
3. The maximum amount of loss eligible for aid pursuant to paragraph 1 must be reduced by:
(a) any amount received under insurance schemes; and
(b) costs not incurred because of the adverse climatic event.
4. The calculation of loss must be made at the level of the individual holding.
5. Aid must be paid directly to the farmer concerned or to a producer organisation of which the farmer is a member. If the aid is paid to a producer organisation, the amount of aid must not exceed the amount of aid that could be granted to the farmer.
6. Compensation for damages to farm buildings and farm equipment caused by adverse climatic events which can be assimilated to natural disasters must not exceed gross aid intensity of 80 %, and 90 % in less favoured areas or in areas referred to in Article 36(a)(i), (ii) or (iii) of Regulation (EC) No 1698/2005, as designated by Member States in accordance with Articles 50 and 94 of that Regulation.
7. The adverse climatic event which can be assimilated to a natural disaster must be formally recognised as such by public authorities.
8. From 1 January 2010, compensation offered must be reduced by 50 % unless it is given to farmers who have taken out insurance covering at least 50 % of their average annual production or production-related income and the statistically most frequent climatic risks in the Member State or region concerned.
9. From 1 January 2011, aid for losses caused by drought may be paid only by a Member State which has fully implemented Article 9 of Directive 2000/60/EC of the European Parliament and of the Council in respect of agriculture, and ensures that the costs of water services provided to agriculture are recovered through an adequate contribution from that sector.
10. Aid schemes must be introduced within three years following the occurrence of the expense or loss. Aid must be paid out within four years following the occurrence.
Article 12 

1. Aid for insurance premiums shall be compatible with the common market within the meaning of Article 87(3)(c) of the Treaty and shall be exempt from the notification requirement of Article 88(3) of the Treaty if it fulfils the conditions set out in paragraphs 2 and 3 of this Article.
2. The gross aid intensity must not exceed:
(a) 80 % of the cost of insurance premiums, where the policy specifies that it provides cover only against losses caused by adverse climatic events which can be assimilated to natural disasters;
(b) 50 % of the cost of insurance premiums, where the policy specifies that it provides cover against:
((i)) losses referred to in point (a) and against other losses caused by climatic events; and/or
((ii)) losses caused by animal or plant diseases or pest infestations.
3. The aid must not constitute a barrier to the operation of the internal market for insurance services. The aid must not be limited to insurance provided by a single insurance company or group of companies, or be made subject to the condition that the insurance contract be taken out with a company established in the Member State concerned.
Article 13 
Aid for land reparcelling shall be compatible with the common market within the meaning of Article 87(3)(c) of the Treaty and shall be exempt from the notification requirement of Article 88(3) of the Treaty if it is granted towards and limited to the legal and administrative costs, including survey costs, up to 100 % of actual costs incurred.
Article 14 

1. Aid to encourage the production of quality agricultural products shall be compatible with the common market within the meaning of Article 87(3)(c) of the Treaty and shall be exempt from the notification requirement of Article 88(3) of the Treaty if it is granted towards the eligible costs listed in paragraph 2 and fulfils the conditions set out in paragraphs 3 to 6 of this Article.
2. Aid may be granted to cover the costs of the following service activities, insofar as they are related to the development of quality agricultural products:
(a) up to 100 % of the costs of market research activities, product conception and design, including aid granted for the preparation of applications for recognition of geographical indications and designations of origin or certificates of specific character in accordance with the relevant Community regulations;
(b) up to 100 % of the costs of the introduction of quality assurance schemes such as ISO 9000 or 14000 series, systems based on hazard analysis and critical control points (HACCP), traceability systems, systems to assure respect of authenticity and marketing norms or environmental audit systems;
(c) up to 100 % of the costs of training personnel to apply schemes and systems as referred to in point (b);
(d) up to 100 % of the costs of the charges levied by recognised certifying bodies for the initial certification of quality assurance and similar systems;
(e) up to 100 % of the costs of compulsory control measures undertaken pursuant to Community or national legislation by or on behalf of the competent authorities, unless Community legislation requires enterprises to bear such costs;
(f) up to the amounts laid down in the Annex to Regulation (EC) No 1698/2005 for support concerning measures referred to in Article 32 of that Regulation.
3. The aid may be granted only in respect of costs of services provided by third parties and/or controls undertaken by or on behalf of third parties, such as the competent regulatory authorities, or bodies acting on their behalf, or independent organisms responsible for the control and supervision of the use of geographical indications and designations of origin, organic labels, or quality labels, provided these denominations and labels are in conformity with Community legislation. The aid must not be granted towards expenditure for investment.
4. The aid must not be granted towards the cost of controls undertaken by the farmer or manufacturer himself, or where Community legislation provides that the cost of control is to be met by producers, without specifying the actual level of charges.
5. With the exception of the aid referred to in paragraph 2(f), the aid shall be granted in kind by means of subsidised services and must not involve direct payments of money to producers.
6. The aid must be accessible to all those eligible in the area concerned, based on objectively defined conditions. Where the provision of services listed in paragraph 2 is undertaken by producer groups or other agricultural mutual support organisations, membership of such groups or organisations must not be a condition for access to the service. Any contribution of non-members towards the administrative costs of the group or organisation concerned must be limited to the proportional costs of providing the service.
Article 15 

1. Aid shall be compatible with the common market within the meaning of Article 87(3)(c) of the Treaty and shall be exempt from the notification requirement of Article 88(3) of the Treaty if it is granted towards the eligible costs of the technical support activities listed in paragraph 2 and fulfils the conditions set out in paragraphs 3 and 4 of this Article.
2. Aid may be granted to cover the following eligible costs:
(a) concerning education and training of farmers and farm workers:
((i)) costs of organising the training programme;
((ii)) travel and subsistence expenses of participants;
((iii)) cost of the provision of replacement services during the absence of the farmer or the farm worker;
(b) concerning farm replacement services, the actual costs of the replacement of a farmer, the farmer's partner, or a farm worker, during illness and holidays;
(c) concerning consultancy services provided by third parties, the fees for services which do not constitute a continuous or periodic activity nor relate to the enterprise's usual operating expenditure, such as routine tax consultancy services, regular legal services, or advertising;
(d) concerning the organisation of and participation in forums to share knowledge between businesses, competitions, exhibitions and fairs:
((i)) participation fees;
((ii)) travel costs;
((iii)) costs of publications;
((iv)) the rent of exhibition premises;
((v)) symbolic prizes awarded in the framework of competitions, up to a value of EUR 250 per prize and winner;
(e) provided that individual companies, brands or origin are not named:
((i)) the vulgarisation of scientific knowledge;
((ii)) factual information on quality systems open to products from other countries, on generic products and on the nutritional benefits of generic products and suggested uses for them.Aid may also be granted to cover the costs referred to in point (e) if the origin of products covered by Council Regulation (EC) No 510/2006 and by Articles 54 to 58 of Council Regulation (EC) No 1493/1999 is indicated, provided that the references to the origin correspond exactly to those references which have been registered by the Community.
(f) publications such as catalogues or websites presenting factual information about producers from a given region or producers of a given product, provided the information and presentation is neutral and that all producers concerned have equal opportunities to be represented in the publication.
3. The aid may cover 100 % of the costs listed in paragraph 2. The aid must be granted in kind by means of subsidised services and must not involve direct payments of money to producers.
4. The aid must be accessible to all those eligible in the area concerned, based on objectively defined conditions. Where the provision of technical support is undertaken by producer groups or other organisations, membership of such groups or organisations must not be a condition for access to the service. Any contribution of non-members towards the administrative costs of the group or organisation concerned must be limited to the costs of providing the service.
Article 16 

1. The following aid to enterprises active in the livestock sector shall be compatible with the common market within the meaning of Article 87(3)(c) of the Treaty and shall be exempt from the notification requirement of Article 88(3) of the Treaty:
(a) aid at a rate of up to 100 % to cover the administrative costs of the establishment and maintenance of herd books;
(b) aid at a rate of up to 70 % of the costs of tests performed by or on behalf of third parties, to determine the genetic quality or yield of livestock, with the exception of controls undertaken by the owner of the livestock and routine controls of milk quality;
(c) until 31 December 2011, aid at a rate of up to 40 % for the introduction at farm level of innovative animal breeding techniques or practices, with the exception of costs relating to the introduction or performance of artificial insemination;
(d) aid at a rate of up to 100 % of costs of removal of fallen stock, and 75 % of the costs of destruction of such carcasses; alternatively, aid up to an equivalent amount towards the costs of premiums paid by farmers for insurance covering the costs of removal and destruction of fallen stock;
(e) aid at a rate of up to 100 % for costs of removal and destruction of carcasses where the aid is financed through fees or through compulsory contributions destined for the financing of the destruction of such carcasses, provided that such fees or contributions are limited to and directly imposed on the meat sector;
(f) aid of 100 % for the costs of removal and destruction of fallen stock where there is an obligation to perform TSE tests on the fallen stock concerned;
(g) aid at a rate of up to 100 % towards the costs of TSE tests.As far as compulsory BSE testing of bovine animals slaughtered for human consumption is concerned, total direct and indirect support, including Community payments, must not be more than EUR 40 per test. This amount refers to the total costs of testing, comprising test-kit, taking, transporting, testing, storing and destruction of the sample. The obligation to test may be based on Community or national legislation.
2. The exemption provided for in paragraph 1(d), (e), (f) and (g) shall be conditional upon the existence of a consistent programme monitoring and ensuring safe disposal of all fallen stock in the Member State. In order to facilitate administration of such State aid, payment may be made to economic operators active downstream from the farmer, providing services linked to the removal and/or destruction of fallen stock, if it can be properly demonstrated that the full amount of State aid paid is passed on to the farmer.
3. The aid shall not involve direct payments of money to producers.
Article 17 
The following aid to small and medium-sized enterprises shall be compatible with the common market within the meaning of Article 87(3)(c) of the Treaty and shall be exempt from the notification requirement of Article 88(3) of the Treaty:

((a)) aid granted by Member States fulfilling all the conditions laid down in Council Regulation (EC) No 1255/1999, in particular Article 14(2) thereof;
((b)) aid granted by Member States fulfilling all the conditions laid down in Council Regulation (EC) No 1782/2003, in particular Article 87, Article 107(3) and the first subparagraph of Article 125(5) thereof;
((c)) aid granted by Member States in accordance with Article 15(6) of Council Regulation (EC) No 2200/96.
CHAPTER 3
Article 18 

1. In order to qualify for exemption under this Regulation, aid shall only be granted under an aid scheme in respect of activities undertaken or services received after the aid scheme has been set up and published in accordance with this Regulation.If the aid scheme creates an automatic right to receive the aid, requiring no further action at administrative level, the aid itself shall only be granted in respect of activities undertaken or services received after the aid scheme has been set up and published in accordance with this Regulation.If the aid scheme requires an application to be submitted to the competent authority concerned, the aid itself shall only be granted in respect of activities undertaken or services received after the following conditions have been fulfilled:
(a) the aid scheme must have been set up and published in accordance with this Regulation;
(b) an application for the aid must have been properly submitted to the competent authority concerned;
(c) the application must have been accepted by the competent authority concerned in a manner which obliges that authority to grant the aid, clearly indicating the amount of aid to be granted or how this amount will be calculated; such acceptance by the competent authority may only be made if the budget available for the aid or aid scheme not exhausted.
2. In order to qualify for exemption under this Regulation, individual aid outside any aid scheme shall only be granted in respect of activities undertaken or services received after the criteria in points (b) and (c) of the third subparagraph of paragraph 1 have been satisfied.
3. This Article shall not apply to aid covered by Article 17.
Article 19 

1. The aid ceilings fixed in Articles 4 to 16 shall apply regardless of whether the support for the aided project or activity is financed entirely from State resources or is partly financed by the Community.
2. Aid exempted by this Regulation shall not be cumulated with any other State aid within the meaning of Article 87(1) of the Treaty, or financial contributions provided by Member States, including those covered by the second subparagraph of Article 88(1) of Regulation (EC) No 1698/2005, or financial contributions by the Community in relation to the same eligible costs, if such cumulation would result in an aid intensity exceeding the maximum laid down in this Regulation.
3. Aid exempted by this Regulation shall not be cumulated with de minimis support within the meaning of Regulation (EC) No 1860/2004 in respect of the same eligible expenditure or investment project, if such cumulation would result in an aid intensity exceeding that fixed by this Regulation.
Article 20 

1. At the latest 10 working days before the entry into force of an aid scheme exempted by this Regulation, or the granting of individual aid exempted by this Regulation outside any scheme, Member States shall forward to the Commission, with a view to its publication in the Official Journal of the European Union, a summary of the information regarding such aid scheme or individual aid in the form laid down in Annex I. This shall be provided in computerised form. Within 10 working days of receipt of that summary, the Commission will send a notice of receipt with an identification number and publish the summary on the internet.
2. Member States shall maintain detailed records regarding the aid schemes exempted by this Regulation, the individual aid granted under those schemes, and the individual aid exempted by this Regulation that is granted outside any existing aid scheme. Such records shall contain all information necessary to establish that the conditions for exemption, as laid down in this Regulation, are fulfilled, including information on the status of the company as an SME. Member States shall keep a record regarding each individual aid for 10 years from the date on which it was granted and, regarding an aid scheme, for 10 years from the date on which the last individual aid was granted under such scheme. On written request, the Member State concerned shall provide the Commission, within a period of 20 working days or such longer period as may be fixed in the request, with all the information which the Commission considers necessary to assess whether the conditions of this Regulation have been complied with.
3. Member States shall compile a report on the application of this Regulation in respect of each whole or part calendar year during which this Regulation applies, in the form laid down in Annex II. This report may be integrated into the annual report to be submitted by Member States pursuant to Article 21(1) of Council Regulation (EC) No 659/1999, and shall be submitted by 30 June of the year following the calendar year covered by the report. By the same date, the Member State shall submit a separate report relating to payments made under Articles 10 and 11 of this Regulation, describing the amounts paid in that calendar year, the conditions for payment, the diseases concerned under Article 10 and, in relation to Article 11, the appropriate meteorological information proofing type, timing, relative magnitude and location of the climatic events and on its consequences on the production for which compensation has been granted.
4. As soon as an aid scheme exempted by this Regulation enters into force, or an individual aid exempted by this Regulation is granted outside an aid scheme, Member States shall publish on the internet the full text of such aid scheme, or the criteria and conditions under which such individual aid is granted.The address of the web-sites including a direct link to the text of the scheme shall be communicated to the Commission together with the summary of the information regarding the aid required pursuant to paragraph 1. It shall also be contained in the annual report submitted pursuant to paragraph 3.
5. Paragraph 1 shall not apply to aid covered by Article 17.
Article 21 
Regulation (EC) No 70/2001 is amended as follows:

1.. In Article 1(2), point (a) is replaced by the following:
'
((a)) to fishery and acquaculture products covered by Council Regulation (EC) No 104/2000 and to activities linked to the primary production (farming) of agricultural products; to the manufacture and marketing of products intended to imitate or substitute for milk and milk products;';
2.. Article 2 is amended as follows:
the following points (k) to (n) are added:
'
((k)) “agricultural product” means:

((i)) the products listed in Annex I of the Treaty, except fishery and acquaculture products covered by Regulation (EC) No 104/2000;
((ii)) products falling under CN codes 4502, 4503 and 4505 (cork products);
((iii)) products intended to imitate or substitute milk and milk products, as referred to in Article 3(2) of Council Regulation (EEC) No 1898/87;
((l)) “products intended to imitate or substitute milk and milk products” means products which could be confused with milk and/or milk products but whose composition differs from such products in that they contain fat and/or protein of non-milk origin with or without protein derived from milk (“products other than milk products” as referred to in Article 3(2) of Regulation (EEC) No 1898/87);
((m)) “processing of agricultural products” means any operation on an agricultural product resulting in a product which is also an agricultural product, except on farm activities necessary for preparing an animal or plant product for the first sale;
((n)) “marketing of agricultural products” means holding or display with a view to sale, offering for sale, delivery or any other manner of placing on the market, except the first sale by a primary producer to resellers or processors and any activity preparing a product for such first sale; a sale by a primary producer to final consumers shall be considered as marketing if it takes place in separate premises reserved for that purpose.';
3.. In Article 4, the following paragraph 7 is added:
'
7. Where the investment concerns the processing and marketing of agricultural products listed in Annex I to the Treaty, the gross aid intensity may not exceed:
(a) 75 % of eligible investments in the outermost regions;
(b) 65 % of eligible investments in the smaller Aegean Islands within the meaning of Council Regulation (EEC) No 2019/93;
(c) 50 % of eligible investments in regions eligible under Article 87(3)(a) EC;
(d) 40 % of eligible investments in all other regions.'
4.. In Annex II, the following is added after ‘Other manufacturing’, at the same level as ‘All manufacturing’:
' Processing and marketing of agricultural products'
Article 22 
Aid schemes exempted under Regulation (EC) No 1/2004 which fulfil all the conditions of this Regulation shall continue to be exempted until the date mentioned in Article 23(1) of this Regulation
Article 23 

1. This Regulation shall enter into force on the 20th day following its publication in the Official Journal of the European Union.It shall apply from 1 January 2007 until 31 December 2013.
2. Notifications pending at the time of entry into force of this Regulation shall be assessed in accordance with its provisions. Where the conditions of this Regulation are not fulfilled, the Commission will examine such pending notifications under the Community guidelines for State aid in the agriculture sector.Individual aid and aid schemes implemented before the date of entry into force of this Regulation and aid granted under those schemes in the absence of a Commission authorisation and in breach of the notification requirement of Article 88(3) of the Treaty shall be compatible with the common market within the meaning of Article 87(3)(c) of the Treaty and shall be exempt if they fulfil the conditions laid down in Article 3 of this Regulation, except the requirements in paragraph 1 and paragraph 2 (b) and (c) of that Article that express reference be made to this Regulation, and that the summary provided for in Article 20(1) has been submitted before granting aid. Any aid which does not fulfil those conditions will be assessed by the Commission in accordance with the relevant frameworks, guidelines, communications and notices.
3. Aid schemes exempted under this Regulation shall remain exempt for a period of six months following the date of expiry of this Regulation.
This Regulation shall be binding in its entirety and directly applicable in all Member States.Done at Brussels, 15 December 2006.
For the Commission
Mariann FISCHER BOEL
Member of the Commission
ANNEX I
Form of summary information to be provided whenever an aid scheme exempted by this Regulation is implemented and whenever an individual aid exempted by this Regulation is granted outside any aid scheme 
Member StateRegion(Indicate the name of the region if the aid is granted by a subcentral authority).Title of aid scheme or name of company receiving an individual aid(Indicate the name of the aid scheme or in case of individual aid, the name of the beneficiary).Legal basis(Indicate the precise national legal reference for the aid scheme or for the individual aid).Annual expenditure planned under the scheme or overall amount of individual aid granted to the company(Amounts are to be given in euros or, if applicable, national currency. In case of an aid scheme, indicate the annual overall amount of the budget appropriation(s) or the estimated tax loss per year for all aid instruments contained in the scheme. In case of an individual aid award: indicate the overall aid amount/tax loss. If appropriate, indicate also for how many years the aid will be paid in instalments or over how many years tax losses will be incurred. For guarantees in both cases, indicate the (maximum) amount of loans guaranteed).Maximum aid intensity(Indicate the maximum aid intensity or the maximum aid amount per eligible item).Date of implementation(Indicate the date from which aid may be granted under the scheme or when the individual aid is granted).Duration of scheme or individual aid award(Indicate the date (year and month) until which aid may be granted under the scheme or in case of an individual aid and if appropriate the expected date (year and month) of the last instalment to be paid).Objective of aid(It is understood that the primary objective is aid to SME. Indicate the further (secondary) objectives pursued. Indicate which one of (Articles(s) 4 to 17) is used and the eligible costs covered by the scheme or individual aid.Sector(s) concerned(Indicate the subsectors by mentioning the type of animal production (e.g. pig/poultry) or type of plant production (e.g. apple/tomato) concerned.Name and address of the granting authorityWeb-address(Indicate the internet address where the full text of the scheme or the criteria and conditions under which individual aid is granted outside of an aid scheme can be found).Other information.

ANNEX II
Form of the periodic report to be provided to the Commission 
Member States are required to use the format below for their reporting obligations to the Commission under group exemption regulations adopted on the basis of Regulation (EC) No 994/98.

The reports shall be provided in computerised form.

Information required for all aid schemes exempted under group exemption regulations adopted pursuant to Article 1 of Regulation (EC) No 994/98.
 1.  2.  3. 
(Separate figures have to be provided for each aid instrument within a scheme or individual aid (e.g. grant, soft loans, etc.)). The figures have to be expressed in euros or, if applicable, national currency. In the case of tax expenditure, annual tax losses have to be reported. If precise figures are not available, such losses may be estimated.

These expenditure figures should be provided on the following basis.

For the year under review indicate separately for each aid instrument within the scheme (e.g. grant, soft loan, guarantee, etc.):


3.1. amounts committed, (estimated) tax losses or other revenue forgone, data on guarantees, etc. for new assisted projects. In the case of guarantee schemes, the total amount of new guarantees handed out should be provided;
3.2. actual payments, (estimated) tax losses or other revenue forgone, data on guarantees, etc. for new and current projects. In the case of guarantee schemes, the following should be provided: total amount of outstanding guarantees, premium income, recoveries, indemnities paid out, operating result of the scheme under the year under review;
3.3. number of assisted projects and/or enterprises;
3.4. [Leave blank]
3.5. estimated overall amount of:

— investment aided,
— expenditure for conservation of traditional landscapes and buildings aided,
— expenditure for relocation of farm buildings in the public interest aided,
— aid granted for setting up of young farmers,
— aid granted for early retirement,
— expenditure of producer groups aided,
— expenditure for diseases,
— expenditure for bad weather compensation,
— expenditure for insurance premiums aided,
— aid granted for land reparcelling,
— aid granted to encourage the production of quality agricultural products,
— expenditure for technical support aided,
— expenditure for support for the animal sector;
3.6. regional breakdown of amounts under points 3.1. by less favoured areas or by areas referred to in Article 36(a)(i), (ii) and (iii) of Council Regulation (EC) No 1698/2005 and other areas;
3.7. sectoral breakdown of amounts under 3.1. by beneficiaries’ sectors of activity (if more than one sector is covered, indicate the share of each):

— type of animal product,
— type of plant product.
 4. 