THE COMMISSION OF THE EUROPEAN COMMUNITIES,

Having regard to the Treaty establishing the European Community,

Having regard to Council Regulation (EC) No 1782/2003 of 29 September 2003 establishing common rules for direct support schemes under the common agricultural policy and establishing certain support schemes for farmers and amending Regulations (EEC) No 2019/93, (EC) No 1452/2001, (EC) No 1453/2001, (EC) No 1454/2001, (EC) No 1868/94, (EC) No 1251/1999, (EC) No 1254/1999, (EC) No 1673/2000, (EEC) No 2358/71 and (EC) No 2529/2001(1), and in particular Article 145(c), (h), (i), and (s) and Article 155 thereof,

Whereas:

(1) Commission Regulation (EC) No 795/2004(2) introduces the implementing rules for the single payment scheme as from 2005.

(2) Regulation (EC) No 1782/2003 as amended by Regulation (EC) No 864/2004(3) defines the rules for the coupled support for cotton, olive oil, raw tobacco and hops as well as the de-coupled support and the integration of those sectors into the single payment scheme.

(3) For the purposes of the establishment of the amount and the determination of payment entitlements in the framework of the integration of tobacco, olive oil, cotton and hops payments in the single payment scheme, specific rules should be established concerning the national ceilings referred to in Article 41 of Regulation (EC) No 1782/2003 and different aspects of the national reserve referred to in Article 42 (1) and (8) of that Regulation.

(4) In Member States that applied the single payment scheme in 2005, for farmers who were allocated, bought or received payment entitlements by the last date for applying for the establishment of payment entitlements for 2006, the value and number of their payment entitlements should be recalculated as a result of the reference amounts and hectares derived from the integration of tobacco, olive oil and cotton payments. Set-aside payment entitlements should not be taken into account in this calculation.

(5) It should be allowed that the private contractual clause referred to in Article 27 of Regulation (EC) No 795/2004 be inserted or modified in a lease contract until the last date for lodging an application under the single payment scheme in 2006.

(6) For Member States that apply the regional model established in Article 59(1) and (3) of Regulation (EC) No 1782/2003, all payment entitlements should be increased by a supplementary amount as a result of the reference amounts derived from the integration of tobacco, olive oil, cotton and hops payments.

(7) In application of Article 71(1) of Regulation (EC) No 1782/2003, Malta and Slovenia have decided to apply the single payment scheme in 2007. The third subparagraph of Article 71(1) of that Regulation provides that the transitional period shall not apply in respect of cotton, olive oil and table olives and tobacco and shall apply only until 31 December 2005 in respect of hops. Malta and Slovenia would therefore be obliged to implement the single payment scheme only for those sectors and integrate all the other sectors in 2007. In order to facilitate the transition towards the single payment scheme, it is therefore appropriate to provide for transitional rules allowing them to continue the application, in 2006, of the current regimes for olive groves in Malta and Slovenia and for hops in Slovenia, which are the only sectors concerned in those Member States. Malta and Slovenia could therefore proceed to the implementation of the single payment scheme, in 2007, for all the sectors.

(8) Article 37 of Regulation (EC) No 1782/2003 as amended by Regulation (EC) No 864/2004 provides that for the olive oil sector, the reference amount corresponding to the individual farmers is the four-year average of the total amount of payments which a farmer was granted under the olive oil production aid, calculated and adjusted according to Annex VII to that Regulation, during the marketing years 1999/2000, 2000/01, 2001/02 and 2002/03. At the time of adopting Regulation (EC) No 864/2004, the Commission had not fixed the definitive amount of aid for the marketing year 2002/03. It is appropriate to amend point H of Annex VII to Regulation (EC) No 1782/2003 in order to take into account the unit amount of the production aid for olives for the marketing year 2002/03 fixed in Commission Regulation (EC) No 1299/2004(4).

(9) Article 43 of Regulation (EC) No 1782/2003 provides that the total number of payment entitlements is equal to the average number of hectares for which direct payments have been granted during the reference period. As regards the olive oil sector, the number of hectares is to be calculated on the basis of the common method referred to in point H of Annex VII to that Regulation. It is necessary to define the common method to determine the number of hectares as well as the payment entitlements and the utilisation of the payment entitlements in the olive oil sector.

(10) Articles 44 and 51 of Regulation (EC) No 1782/2003 consider as eligible to the single payment scheme areas planted with olive trees after 1 May 1998 within approved planting schemes. Those plantings may be considered as investments in the framework of Article 21 of Regulation (EC) No 795/2004. The final date for the authorised plantings under those schemes has been fixed at 31 December 2006. It is necessary to fix a later date for the investments concerning olive-tree plantings.

(11) Regulations (EC) No 1782/2003 and (EC) No 795/2004 should be amended accordingly.

(12) The measures provided for in this Regulation are in accordance with the opinion of the Management Committee for Direct Payments,

HAS ADOPTED THIS REGULATION: