Riga / Draft Regulation No.
Regulations regarding the Recognition of Fruit and Vegetable Producer Groups, the Conditions for and Control of the Activity thereof, as well as Procedures by which State and European Union Aid to the Fruit and Vegetable Producer Groups shall be Granted, Administered and Monitored
Issued pursuant to
Section 5, Paragraphs four and seven
and Section 9, Paragraph two of the
Law On Agriculture and
Rural Development
I. General Provision
1. These Regulations prescribe:
1.1. the criteria for the recognition of fruit and vegetable producer groups, procedures for recognition, conditions for the activity and control of the activity; and
1.2. the procedures by which State and European Union aid to the fruit and vegetable producer groups shall be granted, administered and monitored (hereinafter – aid) in accordance with:
1.2.1. Council Regulation (EC) No. 2200/96 of 28 October 1996 on the common organisation of the market in fruit and vegetables;
1.2.2. Council Regulation (EC) No. 1182/2007 of 26 September 2007 laying down specific rules as regards the fruit and vegetable sector, amending Directives 2001/112/EC and 2001/113/EC and Regulations (EEC) No. 827/68, (EC) No. 2200/96, (EC) No. 2201/96, (EC) No. 2826/2000, (EC) No. 1782/2003 and (EC) No. 318/2006 and repealing Regulation (EC) No. 2202/96; and
1.2.3. Council Regulation (EC) No. 1580/2007 of 21 December 2007 laying down implementing rules of Council Regulations (EC) No. 2200/96, (EC) No. 2201/96 and (EC) No. 1182/2007 in the fruit and vegetable sector.
II. Procedures for the Recognition of Producer Groups and Conditions for the Activity thereof
2. A fruit and vegetable producer group (hereinafter – producer group) shall be a legal person, which conforms with the requirements specified in Paragraphs 3 and 15 of these Regulations.
3. A producer group may qualify for recognition, if:
3.1. the main activity thereof is the marketing of the production produced by its members, and the amount of such production exceeds 51% of the total value of the marketed production of the producer group;
3.2. the submission of the recognition plan has been drawn up, which includes one of the following measures:
3.2.1. planning of production, taking into consideration the market demand;
3.2.2. measures for ensuring the production quality;
3.2.3. use of environment-friendly methods of cultivation in the process of production and in the management of the production waste with an aim to protect the water quality, soil, and landscape and to maintain biodiversity; and
3.2.4. investments that would reduce the costs of production and would stabilise the producers’ prices;
3.3. only the product producers referred to in Article 1(2) of Regulation No. 2200/96 have joined the group, the number of which is not less than five; and
3.4. the value of the products, referred to in Article 1(2) of Regulation No. 2200/96, marketed by the members, in the marketing of which the producer group shall specialise, has been at least LVL 33000 during the last 12 months, prior to the submission of the recognition plan submission.
4. The decision regarding the recognition of the producer group shall be taken by the Rural Support Service (hereinafter – Service).
5. In order to qualify for the recognition of a producer group, the producer group shall submit to the Service the following:
5.1. a recognition plan submission (Annex 1) and substantiation of the value of marketed production (Annex 2) in two copies (reservation of the number of copies of the document and the identity thereof shall be attributed only to the documents prepared in paper format). If the referred to documents are submitted in paper format, the person shall submit to the Service the information included in the document, using the electronic data providers, if such are available to him or her.
5.2. a certified copy of the agreement protocol of the producer group’s members regarding membership in the producer group;
5.3. producer group’s registration certificates of the Register of Enterprises and a certified copy of the registration certificate of the value added tax payer. If the producer group does not submit this statement, the Service shall receive it according to the procedures and within the term specified by the Administrative Procedure Law;
5.4. a certified copy of the annual account (a complete set) for the last concluded year prior to the submission of the recognition plan submission in accordance with the Annual Accounts Law with the mark for the receipt of the State Revenue Service. If the producer group has been established less than one year prior to the submission of the recognition plan submission, the producer group shall submit certified copies of the annual accounts of the members or certified copies of the declaration of the annual revenue “Revenue from Economic Activity” of the members; and
5.5. a statement from the State Revenue Service regarding the tax payment of the producer group. The statement has been issued not later than one month prior to the submission of the recognition plan submission. If the producer group does not submit such statement, the Service shall receive it according to the procedures and within the term specified by the Administrative Procedure Law.
6. The copies referred to in Sub-paragraphs 5.2, 5.3 and 5.5 of these Regulations shall be certified by a person authorised by the producer group. The request to submit the copies of documents shall be attributed only to the documents to be submitted in paper format.
7. The Service shall evaluate the recognition plan submission of the producer group and the documents attached thereto and, after the checks specified by Article 113 of Regulation No. 1580/2007, within the term specified in Article 40(1) of Regulation No. 1580/2007, shall take a decision:
7.1. regarding the approval of the recognition plan of the producer group and the acquisition of a status of an approved producer group and the entering into a contract regarding the implementation of the recognition plan;
7.2. regarding the rejection of the recognition plan submission, if:
7.2.1. the producer group does not conform with the requirements specified by Paragraphs 3 and 15 of these Regulations; or
7.2.2. when carrying out checks in the producer group or holdings of the producer group, it has been determined that the information indicated in the recognition plan submission is false; or
7.3. to request an introduction of changes in the recognition plan submission, indicating the deficiencies and the term for the elimination thereof.
8. If all the necessary information has not been indicated in the recognition plan submission or all documents referred to in Paragraph 5 of these Regulations have not been submitted, the Service shall notify it in writing to the producer group within a time period of three working days, indicating the deficiencies and the term for the elimination of faults.
9. Implementation of the recognition plan shall be commenced after the approval thereof in conformity with the term indicated in the recognition plan submission.
10. Duration of the recognition plan shall not exceed five years.
11. The producer group may introduce changes in the recognition plan during the implementation thereof, submitting a submission to the Service in accordance with Annex 3 to these Regulations, substantiating the necessity of changes.
12. The producer group may introduce changes in the activities provided for in the contract not more than once per year of the activity thereof, without changing the aims of the recognition plan and the total amount of eligible costs, specified by the contract concluded with the Service.
13. Participation in the producer group shall be terminated by a member not later than six months prior the specific date when the notice of termination comes into force.
14. Each member of the producer group shall have one vote.
15. The members of the producer group shall sell the production, indicated in the recognition plan submission, produced by them through the producer group. The members may market not more than 25% of the production indicated in the recognition plan submission thereof, including products which due to their features are not a part of the commercial activity of the producer group:
15.1. by themselves to the final consumer; or
15.2. through another producer group, selected by themselves.
16. Every year until 1 July, the producer group shall send to the Service the information, indicated in Annex XIII, Part A, Paragraph 1(c) and Paragraph 2(b) of Regulation No. 1580/2007, regarding the previous year of activity of the producer group.
17. The Service shall revoke the recognition of the producer group in accordance with Article 117 and Article 118(1) of Regulation No. 1580/2007.
18. If within four months after the implementation of the recognition plan the producer group is not recognised as a producer organisation in conformity with Article 7(1) of Regulation No. 1182/2007, it shall repay the received aid according to the procedures specified by Article 118(2) of Regulation No. 1580/2007.
19. If a member of the producer group, in the holding of which investments have been made in accordance with the recognition plan submission approved by the Service, discontinues its membership in the producer group, he or she shall:
19.1. repay to the producer group the whole investment value, if he or she discontinues its membership in the producer group within the term that is less than one year after the performance of the relevant investment;
19.2. repay to the producer group 80% of the investment value, if he or she discontinues its membership in the producer group in the second year after the performance of the relevant investment;
19.3. repay to the producer group 60% of the investment value, if he or she discontinues its membership in the producer group in the third year after the performance of the relevant investment;
19.4. repay to the producer group 40% of the investment value, if he or she discontinues its membership in the producer group in the fourth year after the performance of the relevant investment; or
19.5. repay to the producer group 20% of the investment value, if he or she discontinues its membership in the producer group in the fifth year after the performance of the relevant investment.
III. Aid to the Activity of a Producer Group
20. A recognised producer group shall receive the following aid during the implementation of the recognition plan:
20.1. for the covering of administrative expenditures in the amount of 100% (the European Union part is 75% and the State budget part – 25%) from the value of marketed production in accordance with Article 7, Paragraph 5(a) of Regulation No. 1180/2007 and Article 45(1), (2), (3) and Article 52 of Regulation No. 1580/2007. The marketed by-products, referred to in the recognition plan submission, shall be included within the value of marketed production; and
20.2. investments in the amount of 75% (the European Union part – 50% and the State budget part – 25%), if they have been carried out in accordance with the recognition plan submission approved by the Service.
21. The Service shall grant, administer and monitor the aid referred to in Paragraph 20 of these Regulations.
22. If due to a natural disaster or in the case of fire the value of marketed production in the relevant year of activity has decreased by more than 35% in comparison with the previous year of activity, the producer group shall notify it in writing to the Service and shall determine the value of the marketed production on the basis of Article 44(2) of Regulation No. 1580/2007.
23. Aid for investments shall be granted in accordance with the recognition plan approved by the Service to the following investments:
23.1. reconstruction or construction of facilities for manufacturing, first stage processing and storage of products in accordance with the maximum amount of aid specified in Annex 4 to these Regulations, on the basis of the contracts with third persons that are responsible for the performance of the work;
23.2. reconstruction of administrative buildings in accordance with the maximum amount of aid specified in Annex 4 to these Regulations, on the basis of the contracts with third persons that are responsible for the performance of the work;
23.3. farm sheds (without lining, gates and windows) in accordance with the maximum amount of aid specified in Annex 4 to these Regulations, on the basis of the contracts with third persons that are responsible for the performance of the work;
23.4. specialised seeding, planting and harvesting devices and equipment;
23.5. cultivation and harvesting devices and equipment in greenhouses;
23.6. refrigerating systems of storage premises;
23.7. hoisting equipment, specialised loading equipment, transportation equipment;
23.8. transportation equipment which has been equipped with a refrigerating plant or artificial climate regulatory equipment;
23.9. computerised management of first stage processing and processing procedure and control devices and equipment (including software programs);
23.10. sorting, cleaning, washing, peeling, pre-packaging devices and equipment;
23.11. containers for temporary storage and for transportation of products;
23.12. equipment for the washing of multiple-use containers;
23.13. territories and facilities for the storage of organic waste and composting;
23.14. equipment that promotes the multiple-use of the environment and biodiversity or natural resources;
23.15. water supply and drainage system, heating and ventilation, sewage treatment devices and equipment;
23.16. mobile and stationary scales; and
23.17. irrigation, watering and spraying equipment and structures.
24. In the case of the purchase of the devices and equipment enumerated in Paragraph 23 of these Regulations, one-time expenditures shall be also considered as the eligible expenditures, which are related to the installation of such devices and equipment (for example, attachment to the power supply, drainage, water supply and ventilation systems) in order to ensure the functioning thereof.
25. The producer group may not receive aid for investments for the purchase of used equipment and devices.
26. The purchase of the investments specified in Paragraphs 23 of these Regulations shall be carried out in accordance with the regulatory enactments regarding the application of the procurement procedure.
IV. Receipt of Aid
27. In order to receive the aid referred to in Paragraph 20 of these Regulations, the producer group shall submit the recognition plan submission (Annex 5) in conformity with Article 47 of Regulation No. 1580/2007. In order to receive the aid referred to in Sub-paragraph 20.2 of these Regulations, the following documents shall be attached to the submission:
27.1. in relation to the specialised harvesting devices – a certified copy of the conformity declaration issued by the producer or authorised representative;
27.2. certified copies of payment and transaction documents certifying the implementation of the recognition plan measures;
27.3. certified copies of the contracts concluded with the providers of services;
27.4. certified copies of the deeds of delivery and acceptance of works;
27.5. procurement procedure documents in accordance with the regulatory enactments in force regarding the application of the procurement procedure;
27.6. in the case of construction, reconstruction and renovation, the following shall be submitted additionally:
27.6.1. certified copies of the accepted building design (in a technical draft stage) and building permit; and
27.6.2. a certified copy of the deed regarding acceptance of a structure for service; and
27.7. certified copies of the annual account (a complete set) for the last concluded year of the producer group and statements from the State Revenue Service regarding the payment of taxes of the producer group. If the producer group does not submit these statements, the Service shall receive them according to the procedures specified by the Administrative Procedure Law.
28. If the submission referred to in Paragraph 27 of these Regulations is submitted in the first year of activity of the producer group, the annual account referred to in Sub-paragraph 27.7 of these Regulations shall not be submitted by the producer group.
29. The copies referred to in Paragraph 27 of these Regulations shall be certified by a person authorised by the producer group.
30. The submitted documents shall be summarised by the applicant for aid in a summary where the name of the document and number of pages shall be indicated.
31. The Service, by means of a transfer, shall pay to the producer group the aid within six months after the approval of a completely formed submission for aid in the Service.
V. Control of the Activity of a Producer Group and Notification to the European Commission
32. The actions of a competent authority, specified in Article 99(1) of Regulation No. 1580/2007, shall be carried out by the Service.
33. The Service shall carry out the control of recognised producer groups, the evaluation of the recognition plan submission, payment of aid and provision of the necessary information and notifications to the European Commission.
34. After the receipt of the submission referred to in Paragraph 27 of these Regulations, the Service shall carry out the administrative checks and on-the-spot checks of the producer group in accordance with Article 114(2) of Regulation No. 1580/2007.
35. If the Service, carrying out the checks referred to in Paragraph 34 of these Regulations, discovers deficiencies and faults in the fulfilment of the measures specified in the recognition plan submission, it may request from the producer group to carry out the relevant actions in order to ensure the fulfilment of the measures specified in the recognition plan.
36. The producer group shall present the recognition plan, the documentation and information related to the implementation and monitoring thereof to the officials of the Rural Support Service, and shall keep it for not less than five years after the implementation of the recognition plan submission.
37. Upon the request of the Service, the Food and Veterinary Service shall carry out an examination of the product quality once per year of activity of the production group (cultivation season) and shall inform regarding the results of the examination within a time period of ten working days.
VII. Closing Provisions
38. Cabinet Regulation No. 338 of 20 April 2004, Regulations regarding Criteria for Recognition, Procedures for Recognition, Conditions for Activity and Control of Activity of Fruit and Vegetable Producer Groups (Latvijas Vēstnesis, 2004, No. 69) shall be repealed.
39. The aid for the covering of administrative expenditures shall be granted in accordance with the provisions specified in Article 55(4) of Regulation No. 1182/2007 to the producer groups to which recognition has been granted prior to the coming into force of Regulation No. 1182/2007.
40. Aid to the renovation of buildings, which has been granted to the producer group prior to the coming into force of these Regulations, shall be in force until the entire fulfilment of the commitment.
41. To the producer groups that have been recognised prior to the coming into force of these Regulations, the aid rate referred to in Sub-paragraph 20.2 of these Regulations shall be applied only to such investments that have been carried out after the recognition of the producer group and for which the producer group has submitted an aid application to the Service after the coming into force of these Regulations.