PART III MODULATION

Article 77 Basis for the calculation of the reduction
The amount of reduction in accordance with Article 10 of Regulation (EC) No 1782/2003 shall be calculated on the basis of the amounts of direct payments to which farmers are entitled, in accordance with the procedure provided for in Article 71a of this Regulation or, in the case of aid schemes listed in Annex I to Regulation (EC) No 1782/2003 but not falling under Titles III or IV of that Regulation, under the specific legislation applicable thereto.
Substituted by Commission Regulation (EC) No 1954/2005 of 29 November 2005 amending Regulation (EC) No 796/2004 laying down detailed rules for the implementation of cross-compliance, modulation and the integrated administration and control system provided for in Council Regulation (EC) No 1782/2003 establishing common rules for direct support schemes under the common agricultural policy and establishing certain support schemes for farmers and derogating from Regulation (EC) No 1782/2003 as regards payment of the aid.

Article 78 Allocation key
The allocation key for the remaining amounts referred to in the first subparagraph of Article 10(3) of Regulation (EC) No 1782/2003 shall be compiled by taking the Member States shares in agricultural area and agricultural employment with a weight of 65 % and 35 %, respectively.
Each Member State’s share in area and employment shall be adjusted in function of its relative Gross Domestic Product (GDP) per capita expressed in purchasing power standard, using one third of the difference of the average of the Member States to which modulation applies.
For that purpose, the following underlying data, based on the data available from Eurostat in August 2003, shall be used:
(a) in respect of agricultural area, the Farm Structural Survey 2000 in accordance with Council Regulation (EC) No 571/88;
OJ L 56, 2.3.1988, p. 1.
(b) in respect of agricultural employment, the annual series of the Labour Force Survey 2001 on employment in agriculture, hunting and fishing in accordance with Council Regulation (EC) No 577/98;
OJ L 77, 14.3.1998, p. 3.
(c) in respect of GDP per capita in purchasing power, the three-year average, based on the data of national accounts, 1999 to 2001.
Substituted by Corrigendum to Commission Regulation (EC) No 796/2004 of 21 April 2004 laying down detailed rules for the implementation of cross-compliance, modulation and the integrated administration and control system provided for in of Council Regulation (EC) No 1782/2003 establishing common rules for direct support schemes under the common agricultural policy and establishing certain support schemes for farmers (Official Journal of the European Union L 141 of 30 April 2004).

Article 79 Additional amount of aid
1 For the purposes of determining whether the threshold of EUR 5 000 referred to in Article 12 of Regulation (EC) No 1782/2003 has been reached, the total amount of direct payments that would have to be granted before the application of any reductions due to modulation in accordance with Article 10 of that Regulation or, in the case of aid schemes listed in Annex I to that Regulation but not falling under Titles III or IV of that Regulation, under the specific legislation applicable thereto, shall be taken into account.
However, where a farmer is excluded from receiving any direct payments as a consequence of irregularities or non-compliances, no additional amounts of aid shall be granted.
2 By 31 October at the latest, the Member States shall communicate to the Commission the total amount of the additional aid which has been granted for the preceding year.