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KOSTADIN KUS-IVANOV Head of Sector Authorization of Payments

COMMON AGRICULTURE POLICY AND MANAGEMENT OF THE PRE-ACCESSION SUPPORT FOR RURAL DEVELOPMENT IN THE REPUBLIC OF MACEDONIA. KOSTADIN KUS-IVANOV Head of Sector Authorization of Payments Agency for Financial Support in Agriculture and Rural Development.

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KOSTADIN KUS-IVANOV Head of Sector Authorization of Payments

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  1. COMMON AGRICULTURE POLICY AND MANAGEMENT OF THE PRE-ACCESSION SUPPORT FOR RURAL DEVELOPMENT IN THE REPUBLIC OF MACEDONIA KOSTADIN KUS-IVANOV Head of Sector Authorization of Payments Agency for Financial Support in Agriculture and Rural Development

  2. NATIONAL LEGISLATION FOUNDATIONThe agricultural policy of Republic of Macedonia is regulated through: Law of Agriculture and Rural Development • Act of legislation establishing the frame for the implementation of all political and institutional reformsin the sector of agriculture and foods and the rural sub-sectors • Article 3 of this ActAEin Republic of Macedonia aims at: 1. securing a stable production of high-quality, low-priced food 2. enhancing competitiveness 3. securing of stable levels of income 4. sustainable development for the rural sub-sectors 5. maximum benefit from the natural recourses

  3. NATIONAL LEGISLATION FOUNDATIONThe agricultural policy of Republic of Macedonia is regulated through:(2) National Strategy for Agriculture and Rural Development 2007-2013 • Goal of the strategy: defining the development policy and enhancing competitiveness of agricultural and rural areas, as well as their unification with the EU Common Agricultural Policy (CAP) Program for support for the implementation of certification and registrationsystems(HACCP, EUREP GAP, etc.) Acceptance of Good Agricultural Practices Conduct

  4. Following the recommendations of the European Commission included in: 1. Regulative (EU) 1085/2006 establishing IPA 2. Regulative (EC) 718/2007 to define the conditions for implementation of Regulative (EL) N 1085/2006 3. Frame Agreementsigned byRM and EU 4. Sectoral agreement (in the process of signing) Documents adopted by Republic of Macedonia government: 1. National strategy for European integration of Republic of Macedonia Action plan for European collaboration Strategy for adjustment of the Macedonian agriculture and foods sector to the Common Agriculture Policy (CAP) of the EU National Development Plan NPAA MIPD MIFF IPARD Program National and European legislation for implementation of the policy for rural development

  5. Регулатива (ЕЗ) бр. 1085/2006 за воспоставување на ИПА • An instrument for pre-accession aid – IPA includes the following separate components (instruments): • PHARE • ISPA • SAPARD • CARDS • Instrument for pre-accession aid for Turkey • The enforcement of the instrument is directly connected to the new Financial Plan 2007-2013 • The Financial Plan is valid for the candidate-members and for the potential candidate-members • It consists of 5 components • Therefore, IPA is not a FUND but an INSTRUMENT

  6. POLITICAL FRAME AND PROGRAMMING IPA Strategic Documents for financialpre-accession: Establishes the strategies for the IPA components, based on the prioritiesset in the Pre-Accession Partnershipand the Regular Reports Components Transition and Institutional Development Cross-border Cooperation Regional Development Development of Human Resources Rural Development

  7. Regulative (ЕC) N 718/2007 for determination of the conditions for implementation of Regulative (ЕU) N1085/2006 • In order to secure the successful implementation of Regulative1085/2006, which establishes IPA, the European Commission has acceptedRegulative 718/2007 that determines the conditions and the measures for implementation of the aid offered to the countries in Annex 1 and 2 • Methods of aid implementation(Article 53 fromRegulative(EL)1605/2002) - shared implementationmeasures (component 2) - common implementationmeasures (component 1 + international organizations) - centralized implementation measures (components1, 2 + technical assistance) - decentralized implementation measures

  8. Decentralized Management of FundsDIS • According to Articles 10 and 11from Regulative (EC) 718/2007 all 5 components can operate based on DIS but following the general regulations: (Article 56 from Regulative (EL)1065/2002) • Clear procedure for organization of public tenders • Efficient management and internal control systems • Accounting standardization • Independent external audit • Free access to public information and exchange • Formation of operational structure with defined standarts and objective internal operation procedures

  9. NIPAC CAO NAO Audit Authorities (АА) NF MANAGING AUTHORITY Agency for Financial Support in Agriculture And Rural Development Decentralized Implementation SystemDISOperational Structure for IPA Component 5

  10. Based on the situation described, there was a recognized need for establishment of a new institution:Agency for Financial Support in Agriculture and Rural Development

  11. The overall decentralized system secures Agency accreditationand delegation of funds management EUROPEAN COMMISSION NIPAC CAO National Fund National Accreditation Coordinator(NAO) Management Body Agency for Financial Support in Agriculture and Rural Development • application check • internal control and on field inspections • issuing approvals for project beginning • supervision of the project development • payment conduct • accounting • check of payments inquiries • approval of payment • internal revision

  12. DIRECTOR SECTOR NATIONAL PAYMENTS SECTOR RURAL DEVELOPMENT SECTOR PAYMENTS AUTHORIZATION SECTOR FIELD CONTROL SECTOR FINANCES AND ACCOUNTING SECTOR ICT SECTOR INTERNAL REVISION LEGAL SECTOR Internal Organization of the Agency

  13. FUNCTIONS OF THE AGENCY • Receiving of applications/inquiries • Approving of applications/inquiries • Approval of payments • Conduct of payments • Accounting • Field control (before signing of contract, before payment approval and after payment conduct)

  14. IPARD Program vs.IPARD Agency I. Conditions for a start of the accreditation of the Agency II. IPARD Program - Priority Axes III. Measures for financing IV. Groups of investments by measures V. Conditions for financing

  15. I. Conditions for a start of the accreditation process of the Agency Accreditation Criteria – Annex 1 fromRegulative (ЕC) 718/2007 • Control system • Identification of control areas • Planning and risk management • Activities for monitoring, revision, and supervision of the implementation • Communication

  16. II. IPARD Program - Priority Axes, Article 171 fromReg. (ЕC) 718/2007 Priority Axe 1 Improvement of the market efficiency and implementation of the Union Standards Measures from Axe 1 1.1 Investment in agriculture enterprises 1.2 Investment in start-up production groups 1.3 Investment in processing and marketing of agriculture and fish products

  17. II. IPARDProgram - Priority Axes, Article 171 from Reg.(ЕC) 718/2007 Priority Axe 2 Preparatory activities for implementation of measures for agiculture and living environment, as well as strategies for local rural development Measures from Axe 2 2.1 activities for improvement of the living conditions and environment 2.2 preparation and implementation of strategies for local rural development

  18. II. IPARD Program – Priority Axes, Article 171 from Reg.(ЕC) 718/2007 Priority Axe 3 Development of Rural Economy Measures from Axe 3 3.1 Improvement and development of the rural infrastructure 3.2 Diversification and development of rural economic activities 3.3 Training 4. Technical Assistance

  19. III. Financing Measures 1.1 Investments in agriculture enterprises 1.3 Investments in processing and marketing of agriculture and fish products 3.2 Diversification and development of rural economic activities 4. Technical Assistance

  20. Indicative Financial Plan forMeasure 1.1 Investments in Agriculture Enterprises .

  21. IV. Group of InvestmentsMeasure 1.1Investments in Agriculture Enterprises

  22. Indicative Financial Plan underMeasure 1.3 Investments in Processing and Marketing of Agriculture and Fish Products .

  23. IV. Group of InvestmentsMeasure 1.3 Investment in Processing and Marketing of Agriculture and Fish Products

  24. Indicative Budget underMeasure 3.2 Diversification and Development of Rural Economic Activities

  25. IV. Group of InvestmentsMeasure 3.2Diversification and Development of rural economic activities

  26. IV. Group of InvestmentsMeasure 4

  27. V. Conditions for financing CO-FINANCING PRINCIPLE

  28. V. Conditions for financing(1) Measure 1.1 Investment in agriculture enterprises min. 5.000 Euros – max. 200.000 Euros Measure 1.3 Investment in processing and marketing ot agriculture and fish products min. 15.000 Euros – max. 800.000 Euros Measure 3.2 Diversification and development of rural economic activites min. 5.000 Euros – max. 200.000 Euros Measure 4. Technical Assistance

  29. V. Conditions for financing(2) Unrecognized expenses • Taxes (including VAT) • Cross-border and import taxes • Purchase, leasing, and rent of land or real estateregardless of the change of ownership • Financial penalties • Operational expenses • Second-hand equipment • Bank guarantees, provisions and similars • Losses of currency exchange, as well as other financial expences • Purchase of licenses and patents • Purchase of animals and multi-year plants • Expenses for maintenance of the main capital • Expenses for services, supplies, and construction activities, which exceed the amount of 10.000 Euros and for which there have not been collected 3 different offers

  30. V. Conditions for financing(3) Recognized expenditures • Building of reconstruction of real estate • Purchase or lease of new equipment, including computer software • General expenses (related to the above-listed expenses and required for the engagement of engineers, architects, and other consultants needed for a feasibility and acquiring the right over patents and licenses) not exceeding 12% of the total recognized expenses • Preparation and development of a business plan for investment of up to or more than 3 million Euros accounting for 3% of the total recognized expenses of the respective investment • Preparation and development of a business plan for investment of a minimum of 1 million Euros but no more than 3 million Euros, accounting for 4% of the total recognized expenses of the respective investment • Preparation and development of a business plan for investment smaller than 1 million Euros, accounting for5% of the total recognized expenses of the respective investment

  31. V. Conditions for financing(4) • All investments/projects must be sustainable for a 5-year period after he last payment has been done • The projects may not be altered/modified for a 5-year period after he last payment has been done • The projects may not change ownership • In ca se of natural disaster the above listed conditions are subject of derogation as far as the candidate country proves the forcemajeur circumstances

  32. V. Conditions for financing(5) • Main rule: 50% of the total recognized expenditures are to be covered • Additional rules: • 55% coverage of the investment expenditures for young farmers • 60% coverage of the investment expenditures in mountain areas • 65% coverage of investment expenditures of young farmers in mountain areas • 100% coverage of investment expenditures in non-profit infrastructure • 100% coverage of expenditures for technical assistance

  33. THANK YOU FOR YOUR ATTENTION!

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