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On January 1,
2005, the new CAP, as agreed in June 2003,
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started to
operate in 10 of the EU’s 25 Member States.
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One of the key
changes introduced by new CAP is that
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farmers
receive direct income payments that are largely
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decoupled from
production. This means that farmers
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face fewer
restrictions as to what they can do with their
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land –
previously they received direct income payments
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that were often
commodity specific.
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Further changes
introduced by the new CAP include
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switching some
budget allocations from direct income
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payments to
rural development, limiting the maximum
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EU budgetary
spending on market support to farmers
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(‘financial discipline’).
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Making new direct
support payments contingent on
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meeting
environmental, food safety and various other
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standards
(‘cross-compliance’).
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