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Home , Arnside and Silverdale, Cannock Chase, Dedham Vale, Forest of Bowland, Howardian Hills, Lincolnshire Wolds

EUROPEAN COMMISSION

Brussels, 26-VII-2006 C (2006) 3454

Subject: State aid / United Kingdom () Aid No N 425/06 Areas of Outstanding Natural Beauty Technical Support Scheme (England)

Madam,

I have the honour to inform you that, having examined the information supplied by your authorities on the aid scheme above, the Commission has decided to raise no objections to the state aid scheme in question.

In reaching this decision, the Commission based itself on the following considerations:

1. PROCEDURES

(1) The measure was notified by letter of 29 June 2006, registered on 29 June 2006, by the Permanent Representation of the United Kingdom to the European Union.

2. DESCRIPTION

2.1. Title

(2) Areas of Outstanding Natural Beauty Technical Support Scheme (England)

The Rt Hon Margaret Beckett MP Secretary of State for Foreign and Commonwealth Affairs Downing Street LONDON SW1A 2AL United Kingdom

Rue de la Loi 200, B-1049 Bruxelles/Wetstraat 200, B-1049 Brussel - Belgium Telephone: exchange (+32-2)299.11.11. Telex: COMEU B 21877. Telegraphic address: COMEUR Brussels.

2.2. Beneficiaries

(3) Over 1000 farmers and producer groups in England

2.3. Budget

(4) 2006/07: £0.5m Subsequent 5 years: £0.75m

Overall amount: £4.25million (€ 6.13 million)

2.4. Duration

(5) 1 August 2006 until 31 March 2012

2.5. Measures

(6) Under this scheme each Area of Outstanding Natural Beauty (AONB) will provide consultancy and training on heritage conservation entirely free of charge to farmers and producer groups. An AONB in England is a public body and is governed by a committee of relevant local authorities.

(7) The aid scheme is funded through the general budget of the Department for Environment, Food and Rural Affairs (Defra) and the general budget of the local authorities in which the AONBs are located.

(8) Areas designated as Areas of Outstanding Natural Beauty within England are: and Silverdale; ; ; ; ; Cranbourne Chase and West Wiltshire Downs; ; Dorset; East Devon; East Hampshire; ; High ; ; ; Isle of Wight; Downs; Wolds; ; ; Nidderdale; Norfolk Coast; North Devon; North ; Coast; ; ; Shropshire Hills; ; South Devon; Coast and Heaths; Sussex Downs; Surrey Hills; Tamar Valley; and (part of this boundary falls within ). During 2006, block exempted aid is given for the Chilterns and the AONBs (State aid Nos XA 04/06 and XA 08/06). They become part of this scheme only from 1 January 2007 onwards.

(9) The following measures can be distinguished:

a) Organisation and running of seminars, workshops and exhibitions on conserving and enhancing the natural beauty of the area;

2 b) Provision of training on any aspect of land management leading to the protection and enhancement of landscape, flora and fauna and training in local traditional skills; c) Production of guidance and information booklets and leaflets concerning the management, protection and/or maintenance of landscape features, habitats and flora and fauna; d) Provision of advice to individual farmers on management, protection and maintenance of landscape, habitats and flora and fauna; e) Monitoring and evaluating the results and effects of projects within the area; f) The production of reports and statistics.

(10) For eligibility, farmers and producer groups must manage land within the statutorily designated area or be in close proximity to its boundary or in some other way be capable of affecting the AONB. The aid must further the purpose of the AONB as a Category V Protected Landscape as specified in that AONBs management plan. The threshold of €100 000 on technical support from all Government sources over any period of 3 years must be respected. The AONBs will maintain a database of beneficiaries and verify any additional source of funding.

(11) The aid is available to all the farmers eligible in the area concerned based on objectively defined conditions. The aid measure excludes compulsory membership of the producer group or organisation. The contribution towards the administrative costs of the producer group or organisation is limited to the costs of providing the service.

(12) Farmers cannot freely choose the service provider. The AONBs as government controlled bodies will provide the service using their own staff if possible. Otherwise, the provider is chosen and remunerated according to market principles, in a non-discriminatory way, using a degree of advertising sufficient to enable the services market to be opened up to competition and the impartiality of procurement rules to be reviewed.

(13) If the business activity of the land manager concerned is not related to the production of Annex I-products, support will be given in compliance with Commission Regulation (EC) No 69/2001 of 12 January 2001 on the application of Articles 87 and 88 of the EC Treaty to de minimis aid1. This notification therefore covers only farmers.

2.6. Legal basis

(14) Parts II and VI of the National Parks and Access to the Countryside Act 1949 and Part IV of the Countryside and Rights of Way Act 2000

1 OJ L 10, 13/1/2001, p. 30.

3 2.7. Aid intensity

(15) Up to 100%

3. EVALUATION

(16) Under Article 87(1) of the EC Treaty, aid granted by a Member State or through State resources in any form whatsoever which distorts or threatens to distort competition by favouring certain undertakings or the production of certain goods is prohibited, insofar as it affects trade between Member States. It is obvious that there is substantial crossborder trade in agricultural products.2

(17) The aid measure is financed through the general budget of the government and local authorities. Therefore, it has to be qualified as being granted through State resources.

(18) It favours certain enterprises in England. It is therefore liable to distort competition and to affect trade between Member States.

(19) Therefore, Article 87(1) of the EC Treaty applies.

(20) According to Article 87(3)(c) of the EC Treaty, aid to facilitate the development of certain economic activities or of certain economic areas can be regarded as compatible where such aid does not adversely affect trading conditions to an extent contrary to the common interest. Concerning this aid, the Community guidelines for state aid in the agriculture sector3 (hereinafter: Community agriculture guidelines) apply.

(21) Commission Regulation (EC) No 1/2004 of 23 December 2003 on the application of Articles 87 and 88 of the EC Treaty to State aid to small and medium-sized enterprises active in the production, processing and marketing of agricultural products4 does not apply as the UK authorities have not limited eligible beneficiaries to small and medium-sized enterprises.

(22) The UK authorities have given assurances that AONBs are government- controlled public bodies.5 The AONBs will use its own staff for providing technical support if possible.

(23) Though, on the basis of the information provided by the UK, the scheme prima facie seems to respect the applicable EU public procurement rules, this decision

2 Trade in agricultural products of the United Kingdom with other Member States in 2004: imports €24 075 million, exports €10 015 million (source: Eurostat). 3 OJ C 232, 12/8/2000, p. 19. 4 OJ L 1, 3/1/2004, p. 1. 5 ECJ cases C-107/98, Teckal, ECR [1999] I-8121 and C-26/2003, Stadt Halle, ECR [2005] I-1.

4 in no way prejudges any further analysis by the Commission from the point of view of public procurement.

(24) Aids for training and consultancy are considered by the Commission as “soft aids” which contribute to the long term viability of agriculture in the Community while producing only very limited effects on competition. According to point 14 of the Community agriculture guidelines, such aid may be granted at a rate of 100% of costs. The total amount of support granted should not exceed €100 000 per beneficiary over any three-year period. For the purpose of calculating the amount of aid, the beneficiary is considered the person receiving the services.

(25) The scheme contributes to the long-term viability of the agricultural sector. Costs for training and consultancy are eligible costs under point 14 of the Community guidelines.

(26) The United Kingdom authorities have given assurances that the aid schemes will be available to all eligible farmers and producer groups in the area concerned.

(27) The United Kingdom authorities have given assurances – besides the services of the AONBs – that they will comply with the provisions of Council Directive 92/50/EEC or, after transposition, with the provisions of Directive 2004/18/EC of the European Parliament and of the Council of 31 March 2004 on the coordination of procedures for the award of public works contracts, public supply contracts and public service contracts6, or, if that directive does not apply, that they will choose the entities entrusted with carrying out the works on the basis of an open, transparent and non discriminatory procedure.7

(28) The United Kingdom authorities have confirmed that the total amount of support granted for these activities will not exceed €100 000 per beneficiary over any three-year period.

(29) Therefore, the conditions of point 14 of the Community guidelines are met.

IV. DECISION

(30) The measure complies with point 14 of the Community guidelines for State aid in the agriculture sector. The Commission has accordingly decided that the aid is compatible with Article 87(3) of the EC Treaty.

(31) If this letter contains confidential information which should not be disclosed to third parties, please inform the Commission within fifteen working days of the

6 OJ L 134, 30/04/2004, p. 114. 7 Case C-324/98, Telaustria [2000] ECR p. I-10745.

5 date of receipt. If the Commission does not receive a reasoned request by that deadline, you will be deemed to agree to disclosure to third parties and to publication of the full text of the letter in the authentic language on the Internet site http://ec.europa.eu/community_law/state_aids/index.htm. Your request should be sent by registered letter or fax to:

European Commission Directorate-General for Agriculture and Rural Development Directorate H Office: Loi 130 5/120 B-1049 Brussels Fax No.: 0032.2.296 7672

Yours faithfully, For the Commission

Mariann FISCHER BOEL Member of the Commission

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