3.4 Agriculture and Rural Development en

Project Fiche 3.
4: Development of the administrative capacity to adopt and implement the

Acquis in the agricultural sector
1. Basic Information
1.1. CRIS Number: 2008/20-311
1.2. Title: Development of the administrative capacity to adopt and implement the
Acquis in the agricultural sector
1.3. ELARG Statistical Code: 3.11
1.4. Location: Skopje and additional nation wide project related locations
Implementing arrangements
1.5 Contracting Authority (EC)

European Commission, EC Delegation, on behalf of the beneficiary
1.6 Implementing Agency

European Commission, EC Delegation, on behalf of the beneficiary
1.7 Beneficiary (including details of project manager)

Ministry of Agriculture, Forestry and Water Economy (MAFWE) and the Agency for
Financial Support in Agriculture and Rural Development (IPARD Agency)
Contact:
* * Mr. Toni Dimovski, Director, Agency for Financial Support in Agriculture and Rural
Development
Toni.Dimovski@ipardpa.gov.mk
* Mr. Zivko Brajkovski, Head of Sector, Ministry of Agriculture, Forestry and Water
Economy,
Zivko.Brajkovski@mzsv.gov.mk
* Mr. Kostadin Kus-Ivanov, Head of Sector, Agency for Financial Support in Agriculture and
Rural Development
kostadin.kus-ivanov@ipardpa.gov.mk
1.8 Overall costs (VAT excluded)1: EUR 2.500.000
1.9 EU contribution: EUR 2.000.000
1.10 Final date for contracting

Two years from the date of the conclusion of the Financing Agreement
1
The total costs of the project should be net of VAT and/or other taxes. Should this not be the case, the amount
of VAT and the reasons why it should be considered eligible should be clearly indicated.
3.4 Agriculture and rural development.doc 1

1.11 Final date for execution of contracts:
Two years from the final date for contracting.
1.12 Final date for disbursements

One year from the final date for execution of contracts.

2. Overall Objective and Project Purpose
2.1 Overall Objective:
The overall objective of the project is to contribute to the development of the agricultural
sector in the country.
2.2 Project purpose
The purpose of the project is to provide technical and material assistance to the Ministry of
Agriculture, Forestry and Water Economy (MAFWE) and the Agency for Financial Support in
Agriculture and Rural Development (IPARD Agency) in order to strengthen the national and
regional capabilities that are required to tackle the priorities for EU alignment and market-
orientated reforms and development in the sector, focusing on:
- adoption and implementation of the acquis vis-à-vis the CAP, specifically in relation to
CMO establishment
- development and implementation of agri-environment measures
- reinforcing the Agency for Financial Support in Agriculture and Rural Development
(IPARD Agency)
- designing a functional Integrated Administration and Control System and establishing
the associated institutional capacity
2.3 Link with AP/NPAA/EP/SAA

The programme will contribute towards the implementation of the Stabilisation and
Association Agreement Articles 1 and 68 on approximation of legislation to that of the
Community, and Article 100 (Agriculture, and the agro-industrial sector) on modernisation
and restructuring of agriculture, the agro-industrial sector and rural development.
For agricultural reform and rural development, the Accession Partnership outlines a series of
priorities to be addressed. The Partnership stresses the importance of speeding up the
registration of agricultural land in the real estate cadastre and ensuring collection and
processing of sound and reliable agricultural data. It calls for establishment of effective and
financially sound paying bodies for the management and control of agricultural funds, in line
with EU requirements and international auditing standards and for upgrade of the capacity of
the agricultural administration. Furthermore, it calls for completing the preparations for
enforcement and practical application of the management mechanisms of the common
agricultural policy and specific attention draws to the integrated administration and control
system (IACS) and to the land parcel identification system (LPIS).
The National Plan for Adoption of Acquis with regard to agricultural reform and rural
development intends to further pursue legal development and harmonisation with the Acquis,
strengthen administrative capacity building of overall administration in the field of
agriculture, particularly of that of Agency for Financial Support in Agriculture and Rural
Development (IPARD Agency) as well as the establishment of integrated administration and
control system (IACS) and land parcel identification system (LPIS).
2.4 Link with MIPD

The Multi-Annual Indicative Planning Document (MIPD) indicates that further efforts to
align the agriculture and rural development legislation with the acquis needs to be made as the
country faces difficulties in implementing and effectively enforcing the legislation. It assesses

that the agriculture sector is dominated by very small and highly fragmented family farms,
engaged mainly in subsistence agriculture, while only a small surplus is marketed locally and
thus economies of scale are not exploited. It underlines that the agricultural sector remains
relatively problematic for several reasons, such as lack of irrigation, land fragmentation and
lack of proper management systems in general. It states that assistance should focus on
preparing the country for the implementation of the Community’s rural development policy, in
particular by focusing on investments in agricultural production to restructure and upgrade the
sector to Community standards and on investments to develop and diversify economic
activities in rural areas. Furthermore, it calls for upgrade of the capacity of the administration
to enforce the management mechanisms of the Common Agricultural Policy.
2.5 Link with National Development Plan

The Draft 2008-2013 National Development Plan in its chapter VIII - Agriculture and Rural
Development, within its Goal 4. Increase of competitiveness of the Agriculture, especially
refers to the activities for “improvement of the support policies in agriculture”, which is related
to this project proposal efforts to strengthen the IACS system and further reinforce the
implementing agency for the overall support in agriculture - the Agency for Financial Support
in Agriculture and Rural Development (IPARD Agency). Furthermore, a major activity within
Goal 5 (Reform of the regulatory and institutional frame) of the NDP is the establishment of
the Common Market Organizations, which is also foreseen within this project proposal.
2.6 Link with national/ sectoral investment plans (where applicable)

The project directly links to the following key strategies and action plans in the sector (see for
a more extensive list annex 3):
• Strategic Plan 2007-2009 of the Ministry of Agriculture, Forestry and Water Economy
• National Strategy for Agricultural and Rural Development 2007-2013, 2007
• Operational programme under the EU instrument for pre-accession for rural
development (IPARD) 2007-2013
3. Description of project
3.1 Background and justification
During the past few years, the sector has witnessed significant developments on the legal,
policy and strategic side. A variety of laws has been adopted, harmonising with the EU Acquis,
and while the National Strategy for Agriculture and Rural Development (2007 – 2013) sets out
the policy objectives, the Operational Programme for IPA Component 5 identifies key
measures to be undertaken to stimulate the sector.
The administrative structures in charge of the sector are at the time of writing of this fiche
under development and receive assistance from different donor agencies, including the EU
under the CARDS programme. It is expected that the structures will receive their accreditation
during the year 2009. In order to further guide the development and implementation of the
reform in the sector, a number of key priorities have been identified that will need support
during 2010 and 2011, when the trust of the present programme will be operational. These
priorities are:
- adoption and implementation of the acquis vis-à-vis the CAP, specifically in relation to
CMO establishment
- development and implementation of agri-environment measures

- reinforcement the Agency for Financial Support in Agriculture and Rural Development
(IPARD Agency);
- design of a functional Integrated Administration and Control System and establishing the
associated institutional capacity.
CAP and CMO

The MAFWE has to introduce major new policies and means of supporting general and
sectoral reforms and developments, and align laws, institutional and enforcement capabilities
for every major sector of the Common Agricultural, Fisheries and Forestry Policies. The
development of Common Market Organisations (CMO) is a new feature in the national
context. In order to appropriately prepare the country for the CAP in this aspect, further
support is required to different units of the administration. The Agriculture Department and
Policy Analyses Department needs support in the development of CMO measures and their
monitoring and impact assessment. The State Agriculture Inspectorate requires assistance in
the controlling and monitoring of the implementation of the CMO measures.
The Agency for Financial Support in Agriculture and Rural Development (IPARD Agency)
needs constant support for implementing the acquis communautaire, including introduction of
new rules and tasks for the IPARD Agency with regards to direct payments and market
measures (under separate CMOs), based on adequately trained staff and adequate equipment.
This support will focus on the management and control of agricultural funds dedicated to direct
payments and CMO measures, following all new developments in the area of single Common
Market Organisations and CAP in general.
The Department for EU Integration in MAFWE needs further assistance in the preparation of
new and amended legislation. The staff in the different departments needs further training on
strategy development in their respective fields, implementation of agricultural economic
analysis through sector studies as well as economic analysis of the CMOs. Assistance is also
envisaged for support to the reorganisation of the Agriculture Department to become MAFWE
Directorate capable to manage sectoral CMO’s. Training of AD staff in central and regional
offices will be provided as well as supply of IT and office equipment for its central and 33
regional units.
Agri-Environment
Agri-environment measures are the only obligatory elements of rural development plans
following EC Regulation 1698/2005 on rural development. Regulation specifies that rural
development plans shall include "provisions to ensure the effective and correct implementation
of the plans, including monitoring and evaluation". In addition, the Regulation envisages that
"monitoring shall be carried out by reference to specific physical and financial indicators" and
that "Member States shall submit annual progress reports to the Commission". Annual progress
reports must be submitted to the Commission of each year covering the previous calendar year.
The IPARD Programme 2007-2013 envisages extension and introduction of pilot Agri-
Environment measures in the second financial period 2010-2013. Therefore the project will
concern strengthening of the capacity within the Department for Rural Development to carry
out the programming and Monitoring and Evaluation of such measures as well as
establishment of appropriate systems for implementation, reporting, monitoring and evaluation
within the IPARD Agency . The preparation of feasibility studies, Agri-environmental Plan
and appropriate legislation preparation will be carried out by forthcoming CARDS 2006
project. The Agri-Environment measure is planned to be introduced initially as pilot within the
National Rural Development Programme in 2009. Training of Department of Rural
Development staff in central offices will be provided as well as supply of IT and office
equipment.

Integrated Administration and Control System
The establishment of an Integrated Administrative and Control System within the MAFWE
according to the Acquis, including a database which is accurate, exhaustive, up-dated and
secure will provide the MAFWE and the IPARD Agency with the institutional and
administrative capabilities required for the harmonisation and implementation of the Common
Agricultural Policies. Furthermore, the system will provide other government entities with
effective data for execution of policies regarding agriculture and rural development.
Currently there is no integrated information regarding the farmers available to the MAFWE.
The present Agricultural Land Registry was established in 1945 and contains information
about farmers, their holding and the type of cultivation, which is maintained, hand-written, in
old protocols. The farmer’s registration records are not complete, as farmers are not obliged to
report changes in their tenure and in their farm production. Due to this out-dated system, no
collective information can be compiled, as, for example, the total number of farmers in a
district, or the total area of irrigated land. These hamper administrative and control procedures
whenever required.
The Integrated Administrative and Control System is linked to the Animal Identification
programme that is presently ongoing and managed through the veterinary department in
MAFWE. The Animal Identification system allows animal surveliance by identifying and
tracking specific animals. Also, with support form the World Bank, a GIS database will be
established.
Efforts have been made to establish an Integrated Farm Registry, but due to lack of know-how
as well as human capacity and an insufficient integrated support system with other local
government institutions, the project is still in its early stages. It needs further support to
develop to its full potential.
The intention of the MAFWE is to set an integrated register of agricultural holdings as a

shield register over all other registers carrying the information important for effective decision
making and implementation of direct payments policies. The main purpose of the integrated
farm register is to link and thus unify all registers by setting a unique farm identification
number. The established network of inter-connected registers will then be a source for
multidimensional data warehouse serving the analytical needs and policy planning. The
register should be developed on a farm level, supported by appropriate IT technology
(hardware and software), and fed by data from the relevant available and future databases and
registers that operate (or will operate once will be established) with information
characteristics that describe agricultural holdings in terms of farm ownership, physical
production structure, uniformed on commonly defined IT platform with provided consistency
through operational procedures and methodology for data flow and data management.
The initial establishment of the core Farm Register is foreseen by the end of 2008 (which is to
a great extent covered by the WB project). However, the future integration and/or connection
of other registers and data-bases (records for direct support and state aid), as well as the
Animal Identification and Registration System, the Vineyards Register, which are under
preparation, and the Land Parcel Identification System (when established) will be subject of
this project.

3.2 Assessment of project impact, catalytic effect, sustainability and cross border
impact
The expected combined impact of the four main components of this project is a significant
improvement in the administrative capacities of the institutions responsible for rural
development. After project completion, the key elements of the system are expected to be in
place and operational. This in turn, is expected to have a positive impact on developments in
the agricultural sector, stimulating growth, diversification and exports.
3.3 Results and measurable indicators2
The project consists of three components:

1) Adoption and implementation of the acquis vis-à-vis the CAP, specifically in relation
to CMO establishment an implementation by the IPARD Agency
2) Development and implementation of agri-environment measures
3) Design of a functional Integrated Administration and Control System and establishing
the associated institutional capacity
Component 1: Adoption and implementation of the acquis vis-à-vis the CAP, specifically
in relation to CMO establishment
The expected results are:

- Approximated national legislation to the EU Acquis in the area of CMOs
- Agriculture Department Reorganised
- Sector economic analysis serve as a basis for policy development
- Competent administrative structures to deal with the task emerging from EU integration in
the sector;
- IPARD Agency capable to manage/control agriculture funds dedicated to direct payments
to Rural Development measures;
- Producer groups and producer organizations appropriately supported in the context of
Pillar 1 payments.
The measurable indicators are:

- Adopted legislation
- Reorganisation implemented
- Sector studies produced
- Number of staff trained;
- IPARD Agency capable of handling records (compliance, handling speed)
- Satisfaction levels of training implemented, measured through after-training surveys
Component 2: Development and implementation of agri-environment measures

- Approximated national legislation to the EU Acquis in the area of AE
- Competent administrative structures to deal with the task emerging from EU integration in
the sector;
- National Agri-Environmental Programme developed
- Regulatory background developed and adopted;
2
Please note that some of the indicators have not yet been quantified or been given a benchmark. This will be
done during the development of the detailed Terms of Reference.

- Pilot AE measures implemented by the IPARD Agency;
- IPARD Agency capable to manage/control agriculture funds dedicated to direct payments
to Rural Development measures ;
- Methodology for payment calculations and agri-environmental schemes on farm level
developed by/for the IPARD Agency

- Adopted legislation;
- Approved National Agri-Environmental Programme;
- Implementation reports of AE measures;
- Regulations adopted;
- IPARD Agency capable of handling records (compliance, handling speed);
- Methodology for payment calculations and agri-environmental schemes on farm level;
- Satisfaction levels of training implemented, measured through after-training surveys.
Component 3: Design of a functional Integrated Administration and Control System and

establishing the associated institutional capacity

- Establishment and functioning of the LPIS to the whole territory of the country;
- Integration of various registers and databases into fully functional IACS;
- Vehicles purchased and operational;
- IACS unit established;
- Operating manuals for IACS system developed;
- Cooperation agreement between farmers/breeders and IACS unit arranged.

- Output data from IACS system utilised to formulate policies relating to agriculture and
sustainable rural development;
- Number of staff appointed to IACS unit, budget of IACS unit;
- Number of staff effectively trained and prepared to use the IACS system;
- Number of vehicles;
- Number of cooperation agreement between farmers/breeders and IACS unit arranged;
- Satisfaction levels of training implemented, measured through after-training surveys.
3.4 Activities
Component 1: Adoption and implementation of the acquis vis-à-vis the CAP, specifically
in relation to CMO establishment
1) Training needs assessment, training plan development and implementation with
specific reference to:
a. the Agriculture Department and Policy Analyses Department in the
development of CMO measures and their monitoring and impact assessment;
b. the State Agriculture Inspectorate in the controlling and monitoring of the
implementation of the CMO measures;
c. the IPARD Agency in the management and control of agricultural funds
dedicated to direct payments and CMO measures;

specific reference to the IPARD Agency for:
a. Implementation of new public measures as proposed in the IPARD Programme
(rural infrastructure and LEADER); and in relation to CMO measures
b. Producer group support.
3) Strategic, Operational and knowledge management, with specific reference to:
a) Reorganization of the Agriculture Department
b) Developing manuals and publicity materials on the basis of the legal acts and
institutional arrangements with regards to the CMOs thereby providing and
communicating information necessary for the effective implementation;
c) Elaborating of agricultural economic analysis for: policy decisions and regular
agricultural report requirements on cereals, oilseeds, mild, sugar, pork, beef,
poultry, eggs, vegetables, fruits, wine, potatoes and farm development;
d) Review of the reliability of the economic analysis the respective CMO’s
within MAFWE;
e) Elaboration recommendations for the adaptation of the sectoral strategies with
respect to the requirements of the competitive markets;
f) Identify priority legislation to be harmonised with the EU Acquis, implement
harmonisation.
Component 2: Development and implementation of agri-environment measures

a. EU legislation on the agricultural production methods according to the
environmental and landscape conservation requirements;
b. Regulatory background, control and sanctions of cross compliance and cross-
compliance implementation
c. Data recording and handling of software, quality assurance of data, cross
checking of data;
d. Advisory Services related to Agri-Environment;
specific reference to the IPARD Agency for agri-environmental measures
3) Strategic, operational and knowledge management, with specific reference to:
a. Development of the regulatory background, control and sanctions of Cross
Compliance;
b. Development of National Agri-environmental Programme (AEP) and pilot AE
measures, as well as introduction of Cross Compliance as a requisite for the
direct payments within SPS/SAPS;
c. Development of Methodology for payment of payment calculations and agri-
environmental schemes design on farm level;
d. Promote the agri-environmental schemes (focus on Regional MAFWE
Inspectors and Directorates);
e. Development of the software system (AEMIS) for agri-environment measures
compatible with IACS, FADN, Biodiversity Monitoring Programme,
Information handled on GIS surface,
f. Cooperation and information exchange between MAFWE and MEPP.

establishing the associated institutional capacity

a. Related to the necessary adjustment and extension of IACS/LPIS due to the
introduction of the Single Payment Scheme and particularly Cross
Compliance;
b. Data recording and handling of software;
c. Development of operating manuals for IACS system
2) Strategic, operational and knowledge management, with specific reference to:
a. Expansion of the LPIS on the whole territory of the country;
b. Purchase all-road vehicles that will enable the experts to execute on the spot
controls for data recoding;
c. Setting-up of an IACS unit within the MAFWE responsible for the
implementation of the system;
d. Establish an effective co-operation system between the farmers/breeders and
the IACS unit through: meetings; seminars; training of extension service staff;
media campaigns.
Management and contracting arrangements
For each component a steering committee will be established to oversee the overall
implementation of the project.
Advisory services will be provided to the beneficiary. The contracts to support the project will
contain next to a team leader additional expertise to assist in key tasks, e.g. in the field of
administrative capacity building, training, IT development, legal development and others.
Some of these experts will address the cross-cutting issues.
The core project team – consisting of the team leader and other expertise will be placed within
the respective units.
The team leader will be responsible for the overall management, representation (co-ordination
with the EU and other international bodies) as well as reporting. The co-ordination of activity
development in the different components of the activity is significantly important. The team
leader is responsible for an appropriate management of resources. During the inception phase
of the project, a detailed deployment plan will be developed under the coordination of a
Steering Committee in which each co-operating national institution will be represented to
ensure appropriate inclusion.
The expected contracting arrangements are:
Financed through IPA:

1) 1 service contract following an international restricted tender procedure will be developed
for the implementation of component 1: Adoption and implementation of the acquis vis-à-
vis the CAP, specifically in relation to CMO establishment. The contract has an expected
duration of 12 – 24 months, is expected to start in 2nd quarter 2010, and has a budget of
approximately 700.000 Euro.
for the implementation of component 2: Development and implementation of agri-
environment measures. The contract has an expected duration of 12 – 24 months, is
expected to start in 2nd quarter 2010, and has a budget of approximately 700.000 Euro.

for the implementation of Component 3: Design of a functional Integrated Administration
and Control System and establishing the associated institutional capacity. The contract
has an expected duration of 12 – 24 months, is expected to start at 2nd quarter 2010, and has a
budget of approximately 600.000 Euro.
The ToR's for all the contracts should be developed in the course of 2009.
Financed through the national contribution:

1) 1 Supply contract is expected to be concluded to provide the IT equipment for the different
components. The specifications of the IT equipment will be made through a dedicated
Framework Contract financed under the Project Preparation and Support Facility. The supply
contract will have a duration of 4 to 8 months for delivery and training in equipment use, a
subsequent 12 months warranty period, and hence an overall duration of 16 – 20 months, and
should start in 3rd quarter 2010. The total value of this supply contract is expected to be EUR
400.000. The contract should include the software necessary for the LIPS system and the
Farm Registry.
2) 1 supply contract is expected to be concluded to provide the vehicles required under
establishing the associated institutional capacity. Approximately 6-8 vehicles are to be
procured. The specifications of the vehicles will be made through a dedicated Framework
Contract financed under the Project Preparation and Support Facility. The supply contract will
have a duration of 4 to 8 months for delivery and training in equipment use, a subsequent 12
months warranty period, and hence an overall duration of 16 – 20 months, and should start in
3rd quarter 2010. The total value of this supply contract is expected to be 100.000 Euro.
3.5 Conditionality and sequencing
The project includes the following conditionalities:

1) Endorsement by all key stakeholders of the Terms of Reference, specifications for the
individual contracts to be engaged;
2) Appointment of counterpart personnel by the beneficiaries before the launch of the tender
process;
3) Allocation of working space and facilities by the beneficiaries for technical assistance
before the launch of the tender process;
4) Participation by the beneficiaries in the tender process as per EU regulations;
5) Organisation, selection and appointment of members of working groups, steering and
coordination committees, seminars by the beneficiaries as per workplan of the project;
6) Appointing the relevant staff by the beneficiaries to participate in training activities as per
work plan;
7) Amendments to legislation to harmonise with the Common Agricultural Policy enacted;
8) Sufficient managerial and technical human resources allocated to the relevant Departments
9) EU procedures to be followed for the procurement of supplies, contracting of technical
assistance and training financed from pre-accession funds.
In the event that conditionalities are not met, suspension or cancellation of projects will be
considered.
3.6 Linked activities

The EU – CARDS support (1,5 mill Euro) is foreseen to become operational in June 2008 to
support the IPARD Agency. This project is expected to finalise towards the end of 2009. The
present project (component 3) will provide a follow-up on the Cards project.
In addition to this, the World Bank Macedonian agriculture and EU acquis project, and
especially it’s first component Strengthening MAFWE’s administrative and management
capacity in compliance with EU accession requirement, among others institutional capacity
building activities, will be focused on assisting MAFWE to develop the basic elements of a
comprehensive Integrated Administration and Control System (IACS), including: a
computerised data base of records for each agricultural holding obtained from aid applications
representing a Registry of Farm Households with its progressive expansion with data from
relevant databases over the life of the project; an integrated control system consist of
administrative checks on the aid applications supplemented by a system of on-the-spot checks
to verify eligibility for the aid; and finally an identification system for agricultural parcels
(LPIS).
3.7 Lessons learned
Although impact realised through the previous assistance overall is satisfactory, a number of
challenges remain:
- Legal Reform: Initial timelines for the adoption of legal instruments are not always
honoured, leading to delays in implementation and causing difficulties in project
implementation.
- Enforcement: In previous years, a large focus has been on establishing the legal frameworks in
the country. The capacity to enforce the law, however, has received insufficient attention,
leading to a situation where the legal reform is rather well advanced, but the practice – law
enforcement and implementation - has not followed.
- Conditionalities: Often project implementation is hampered by either insufficient staff and
resources allocated to (newly established) institutions or insufficient operational funds available
in the government budget to allow for appropriate implementation of the mandate of the
concerned department.
- Coordination: Further improvements of the coordination of the relevant institutions and the
involvement of all relevant stakeholders - in line with the spirit of EU accession, is needed.

4. Indicative Budget (amounts in M€)
SOURCES OF FUNDING
TOTAL IPA COMMUNITY PRIVATE
NATIONAL CONTRIBUTION
EXP.RE CONTRIBUTION CONTRIBUTION
IB IN EUR EUR %( Total % Ce Regional IFIs EUR % (2)

(1 V (a)=(b)+(c) (b) 2) EUR (2) ntr / EUR (d)
ACTIVITI ) (1) al Local
+(d) (c)=(x)+( (z)
ES EU EUR
y)+(z) R (y)
(x)
1 contract
CMO
Service
contract
X – 0.7 0.7 100 –
2 contract
Agri-
Environm
ent
Service
Contract
X – 0.7 0.7 100 –
3 contract
IACS
Service
contract
X – 0.6 0.6 100 –
4 contract
Vehicles X 0.1 0.1 100 0.1
supplies
5 contract
upplies
IT
supplies
– X 0.4 0.4 100 0.4 –
TOTAL IB 2.0 2.0 100
TOTAL INV 0.5 0 0 0.5 100 0.5
TOTAL PROJECT 2.5 2.0 80 0.5 20 0.5
Amounts net of VAT

(1) In the Activity row use "X" to identify whether IB or INV
(2) Expressed in % of the Total Expenditure (column (a))
5. Indicative Implementation Schedule (periods broken down per quarter)
Contracts (Financed by IPA) Start of Tendering Signature of Project Completion

contract
Contract 1 - Component 1: CMO
Service Contract Qu4 2009 Qu2 2010 Qu2 2012
Contract 2 - Component 2: EA Service
Contract Qu4 2009 Qu2 2010 Qu2 2012
Contract 3 - Component 3: IACS
Service contract Qu4 2009 Qu2 2010 Qu2 2012
Contracts (financed by National Start of Tendering Signature of Project Completion
Contribution) contract
Contract 4 - Component 3: IACS Qu1 2010 Qu3 2010 Qu2 2012
Vehicles
Contract 5 - General: IT Supplies Qu1 2010 Qu3 2010 Qu2 2012

6. Cross cutting issues
The cross-cutting issues will be addressed throughout the project. Up to 10% of the budget of
the individual service contracts for capacity building – through short term expertise - may be
allocated to assist the different beneficiaries to comply with European standards and best
practices, implement relevant existing Government strategies and develop internal measures
to ensure each cross-cutting issue is appropriately mainstreamed.
The mainstreaming of the cross cutting issues is regarded on two different levels:
1) Ensuring that the internal policies, structure or operating procedures of the beneficiary
IPARD Agency will conform to and promote the relevant principles outlined per section
below.
2) Ensuring that the products, outputs produced by the beneficiaries (e.g. laws, regulations,
policies, and strategies) will conform to and promote the relevant principles outlined per
section below.
Throughout the project cycle, in particular when developing project ToR, state actors
specifically addressing (one of) the cross cutting issues shall be consulted. Specific attention
will be paid to transfer knowledge to trainees on mainstreaming the cross cutting issues into
future IPA plans.
Equal opportunities and non-discrimination

The project implementation will not tolerate any discrimination based on religion, ethnicity,
sex or physical disability. Equal gender opportunities will be fully respected in the
composition of the Steering Committee and/or Technical Committees for projects assessment
and elsewhere, where necessary. In addition to this, the internal policies, structure or
operating procedures of the beneficiaries, as well as products and outputs produced by the
beneficiaries (e.g. laws, regulations, policies, strategies) will conform to the relevant
principles of equal opportunities and non-discrimination
Environment
The European Community has a longstanding commitment to address environmental concerns
in its assistance programmes (as part as a wider commitment to sustainable development).
Key references include art. 6 of the Treaty and also the Cardiff process which foresees the
systematic consideration of environmental aspects into EC development cooperation and in
other policies (hence very important for the acquis).
The second component of this project is strictly concerned with environmental issues,
assisting and providing institutional support for training institutions in advisory, monitoring
and control issues related to various environmental aspects.

ANNEXES
1 - Log Frame in Standard Format
2 - Amounts contracted and Distributed per Quarter over the full duration of Programme
3 - Description of Institutional Framework
4 - Reference to laws, regulations and strategic documents

− Reference list of relevant laws and regulations
− Reference to AP/NPAA/EP/SAA
− Reference to MIPD
− Reference to National Development Plan
− Reference to national/sectoral investment plans
5 – Details per EU funded contract (*) where applicable:

− For TA contracts: account of tasks expected from the contractor
− For Twinning covenants: account of tasks expected from the team leader,
resident twinning advisor and short term experts
− For Grant schemes: account of components of the shceme
− For Investment contracts: reference list of feasibility study as well as technical
specifications and cost price schedule + section to be filled in on investment
criteria
− For works contracts: reference list of feasibility study for the constructing
works part of the contract as well as a section on investment criteria (**);
account of services to be carried out for the service part of the contract
(*) non standard aspects (in case of derogation to PRAG) also to be specified
(**) section on investment criteria (applicable to all infrastructure contracts and construction
works):
• Rate of return
• Co-financing
• Compliance with state aids provisions
• Ownership of assets (current and after project completion)

ANNEX 1 - Log frame in standard format
LOGFRAME PLANNING MATRIX FOR Programme name and number: Agriculture and rural development
Agriculture and rural development
Contracting period expires two years from Execution period expires two years Disbursement period expires
the date of the conclusion of the Financing from the final date for contracting one year from the final date for
Agreement execution of contracts.
Total budget: IPA budget:
EUR 2.5 million EUR 2.0 million
Overall objective Objectively verifiable indicators Sources of Verification

The overall objective of the project is to - -
contribute to the development of the agricultural
sector in the country.
Project purpose Objectively verifiable indicators Sources of Verification Assumptions
The purpose of the project is to provide technical - Timely delivery of the programming - MIPD updates DIS accreditation will be
and material assistance to the Ministry of document by the Government to the - Delivery dates of Operational implemented by the end of 2008.
Agriculture, Forestry and Water Economy Commission Programmes
(MAFWE) and the the Agency for Financial - Timely implementation of the IPARD - Contract records
Support in Agriculture and Rural Programme - - Audit reports
Development (IPARD Agency) in order to - Timely implementation of the project tender - Contracting records commission
strengthen the national and regional capabilities processes - Accreditation dossiers for PA
that are required to tackle the priorities for EU - Timely contacting of support project
alignment and market-orientated reforms and Availability of beneficiary agencies and staff
development in the sector, focusing on:
- adoption and implementation of the acquis
vis-à-vis the CAP, specifically in relation
to CMO establishment
- development and implementation of agri-
environment measures
- reinforcing the Agency for Financial
Support in Agriculture and Rural
Development (IPARD Agency)
16
- designing a functional Integrated
Administration and Control System and
establishing the associated institutional
capacity
Results Objectively verifiable indicators Sources of Verification Assumptions

Component 1: Adoption and implementation of The measurable indicators are: - Project reports - Cooperation among the
the acquis vis-à-vis the CAP, specifically in - Adopted legislation - Monthly reports from different stakeholders
relation to CMO establishment - Reorganisation implemented institutions - Commitment from national
- Sector studies produced; - Government reports authorities in the process
The expected results are: - Number of staff trained; - Progress Reports (Commission)
- Approximated national legislation to the EU - IPARD Agency capable of handling
Acquis in the area of CMOs records (compliance, handling speed)
- Agriculture Department Reorganised - Satisfaction levels of training
- Sector economic analysis serve as a basis for implemented, measured through after-
policy development training surveys
- Competent administrative structures to deal
with the task emerging from EU integration in
the sector;
- IPARD Agency capable to manage/control
agriculture funds dedicated to direct payments
to rural development measures;
- Producer groups and producer organizations
appropriately supported in the context of
Pillar 1 payments.
Component 2: Development and The measurable indicators are: -
implementation of agri-environment measures - Adopted legislation;
- Approved National Agri-Environmental
The expected results are: Programme;
- Approximated national legislation to the EU - Implementation reports of AE measures;
Acquis in the area of AE - Regulations adopted;
- Competent administrative structures to deal - Number of staff trained;
with the task emerging from EU integration in - IPARD Agency handling records
the sector; (compliance, handling speed);
- National Agri-Environmental Programme - Methodology for payment calculations
developed and agri-environmental schemes on farm
- Regulatory background developed and level;
adopted; - Satisfaction levels of training
17
- Pilot AE measures implemented by the implemented, measured through after-
IPARD Agency training surveys.
- IPARD Agency capable to manage/control
agriculture funds dedicated to direct payments
to rural development measures;
- Methodology for payment calculations and
agri-environmental schemes on farm level
developed by/for the IPARD Agency
Component 3: design of a functional Integrated The measurable indicators are: -
Administration and Control System and - Output data from IACS system utilised
establishing the associated institutional capacity to formulate policies relating to
agriculture and sustainable rural
The expected results are: development;
- Establishment and functioning of the LPIS to - Number of staff appointed to IACS unit,
the whole territory of the country; budget of IACS unit;
- Integration of various registers and databases - Number of staff trained;
into fully functional IACS; - Number of staff effectively trained and
- Vehicles purchased and operational; prepared to use the IACS system;
- IACS unit established; - Number of vehicles;
- Operating manuals for IACS system - Number of cooperation agreement
developed; between farmers/breeders and IACS unit
- Cooperation agreement between arranged
farmers/breeders and IACS unit arranged. - Satisfaction levels of training
implemented, measured through after-
training surveys.
Activities Means Costs Assumptions

Component 1: adoption and implementation of - Appropriate expertise is
the acquis vis-à-vis the CAP, specifically in Service Contract, supplies Service contract 700.000 (IPA) available
relation to CMO establishment Supplies combined with other - Beneficiary institutions can
1. Training needs assessment, training plan components in one supply contract: make (qualified) staff available.
development and implementation with specific EUR 400.000 (National
reference to: contribution)
a. the Agriculture Department and Policy
Analyses Department in the development of
CMO measures and their monitoring and
impact assessment;
b. the State Agriculture Inspectorate in the
18
controlling and monitoring of the
implementation of the CMO measures;
c. the IPARD AGENCY in the management
and control of agricultural funds dedicated
to direct payments and CMO measures;
2. Training needs assessment, training plan
development and implementation with specific
reference to the IPARD Agency for:
a. Implementation of new public measures as
proposed in the IPARD Programme (rural
infrastructure and LEADER); and in relation to
CMO measures
b. Producer group support.
3. Strategic, Operational and knowledge
management, with specific reference to:
a. Reorganization of the Agriculture Department
b. Developing manuals and publicity materials
on the basis of the legal acts and institutional
arrangements with regards to the CMOs
thereby providing and communicating
information necessary for the effective
implementation;
c. Elaborating of agricultural economic analysis
for: policy decisions and regular agricultural
report requirements on cereals, oilseeds, mild,
sugar, pork, beef, poultry, eggs, vegetables,
fruits, wine, potatoes and farm development
d. Review of the reliability of the economic
analysis the respective CMO’s within
MAFWE;
e. Elaboration recommendations for the
adaptation of the sectoral strategies with
respect to the requirements of the competitive
markets;
f. Identify priority legislation to be harmonised
with the EU Acquis, implement
harmonisation.
Component 2: development and
implementation of agri-environment measures Service contract, supplies Service contract 700.000 (IPA)
19
1. Training needs assessment, training plan Supplies combined with other
development and implementation with components in one supply contract:
specific reference to: EUR 400.000 (national
a. EU legislation on the agricultural contribution)
production methods according to the
environmental and landscape conservation
requirements;
b. Regulatory background, control and
sanctions of cross compliance and cross-
compliance implementation
c. Data recording and handling of software,
quality assurance of data, cross checking of
data;
d. Advisory Services related to Agri-
Environment;
2. Training needs assessment, training plan
development and implementation with
specific reference to the IPARD Agency
for: agri-environmental measures
3. Strategic, operational and knowledge
a. Development of the regulatory background,
control and sanctions of Cross Compliance;
b. Development of National Agri-
environmental Programme (AEP) and pilot
AE measures, as well as introduction of
Cross Compliance as a requisite for the
direct payments within SPS/SAPS;
c. Development of Methodology for payment
of payment calculations and agri-
environmental schemes design on farm
level;
d. Promote the agri-environmental schemes
(focus on Regional MAFWE Inspectors and
Directorates);
e. Development of the software system
(AEMIS) for agri-environment measures
compatible with IACS, FADN, Biodiversity
Monitoring Programme, Information
20
handled on GIS surface,
f. Cooperation and information exchange
between MAFWE and MEPP.
Component 3: design of a functional Technical Assistance, Supplies
Integrated Administration and Control System Service contract 600.000 (IPA)
and establishing the associated institutional Supplies combined with other
capacity components in one supply contract:
1. Training needs assessment, training plan EUR 400.000 (national
development and implementation with contribution)
specific reference to: Supply contract for vehicles: EUR
a. Related to the necessary adjustment and 100.000 (national contribution)
extension of IACS/LPIS due to the
introduction of the Single Payment
Scheme and particularly Cross
Compliance;
b. Data recording and handling of software;
c. Development of operating manulas for
IACS system.
2. Strategic, operational and knowledge
a. Expansion of the LPIS on the whole
territory of the country;
b. Purchase all-road vehicles that will
enable the experts to execute on the spot
controls for data recoding;
c. Setting-up of an IACS unit within the
MAFWE responsible for the
implementation of the system;
d. Establish an effective co-operation
system between the farmers/breeders and
the IACS unit through: meetings;
seminars; training of extension service
staff; media campaigns.
Pre conditions
The project includes the following conditionalities:
- Endorsement by all key stakeholders of the Terms of Reference, specifications for the individual contracts to be engaged;
- Appointment of counterpart personnel by the beneficiaries before the launch of the tender process;
- Allocation of working space and facilities by the beneficiaries for technical assistance before the launch of the tender process (if required);
21
- Participation by the beneficiaries in the tender process as per EU regulations;
- Organisation, selection and appointment of members of working groups, steering and coordination committees, seminars by the beneficiaries as per workplan of the
project;
- Appointing the relevant staff by the beneficiaries to participate in training activities as per work plan;
- Amendments to legislation to harmonise with the Common Agricultural Policy enacted;
- Sufficient managerial and technical human resources allocated to the relevant Departments
- EU procedures to be followed for the procurement of supplies, contracting of technical assistance & training financed from pre-accession funds.
In the event that conditionalities are not met, suspension or cancellation of projects will be considered.
22
ANNEX 2 - Amounts (in million EUR) contracted and Distributed per Quarter over the full duration of Programme (only IPA funds)
2010 2011 2012
Contracted Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Component 1: CMO
0.7
service contract
Component 2: EA
0.7
service contract
Component 3: IACS
0.6
Service contract
Cumulated 2.0
Disbursed
Component 1: CMO
0.2 0.2 0.2 0.1
service contract
Component 2: EA
0.2 0.2 0.2 0.1
service contract
Component 3: IACS
0.2 0.2 0.1 0.1
Service contract
Cumulated 0.6 1.2 1.7 2.0
23
ANNEX 3 – Description of Institutional Framework
A) MINISTRY OF AGRICULTURE, FORESTRY AND WATER ECONOMY
I. ORGANIGRAM (PRESENTED BELOW)
II. DYNAMICS OF EMPLOYMENT IN MAFWE BENEFICIARY DEPARTMENTS
2007
2007
recruited Status as Total new
public
Department 2006 from other of 2008 2009 2010 employees Total
announce
government 31.12.2007 (2008-2010)
ment
institutions
Policy Analyses
Department
1 2 5 8 6 5 5 16 24
Agriculture Department 5 1 3 9 9 7 6 22 31
Rural Development
Department
4 2 2 8 10 10 9 29 37
State Agriculture
Inspectorate
28 2 17 47 19 13 11 43 90
EU Department 1 0 3 4 2 2 2 6 10
III. MANDATE
The Law on Organisation and Operation of the State Administration Bodies (“Official Gazette of RM”
Nos. 58/00 and 44/02) defines the competence of the Ministry of Agriculture, Forestry and Water
Economy related to agriculture and rural development, forestry and water economy, utilisation of
agricultural land, forests and other natural resources, hunting and fishery, protection of livestock from
diseases and pests, monitoring and exploring the water conditions, maintaining and improving the
waters regime and other items defined with the Law.
IV. BUDGET OF THE MAFWE
The overall budget of the MAFWE for 2008 is 3.123.929.000,00 MKD. The Project’s beneficiaries
have the following budgets for 2008:
− Policy Analyses Department: 6.617.000,00 MKD
− Agriculture Department : 159.026.000,00 MKD
− Rural Development Department: 13.756.000,00 MKD
− State Agriculture Inspectorate: 40.682.000,00 MKD
− EU Department: 13.477.000,00 MKD
V. BRIEF DESCRIPTION OF THE BENEFICIARY DEPARTMENTS WITHIN THE

MAFWE
- Policy Analyses Department: provision of appropriate flow, collection and dissemination of

data related to agriculture and rural development from various sources; analyses of the data
and production of policy options; monitoring the implementation and evaluation of the effects
of the policy measures; and budget planning and financial management.
- Agriculture Department: drafting, proposing and implementation of the legislation, as well
as with administrative and governing issues in the area of livestock and plant production;
24
monitors the overall development of the agriculture sector; and proposes measures (market
and direct support measures) for development of agriculture sector through the support
programmes of the MAFWE.
- Rural Development Department: all aspects of management, programming, monitoring and
evaluation of rural development policies both national and EU funded schemes; develops and
proposes rural development policies and strategies in line with national strategies; organizes
and supports the work of the Rural Development Monitoring Committee and Inter-
Governmental Rural Development Body; prepares multiannual plans for utilization of EU
rural development pre-accession funds based on the strategic document for rural development
and the Rural Development Programme.
- State Agriculture Inspectorate: supervision of the circulation of plants, products, means,
items and other things defined by the agricultural legislation, in imports, exports and re-
exports via state border; examination and control of agricultural land, agricultural crops and
plantations, records on breeding and other cattle, areas of processing and finishing
agricultural products, equipment used in these procedures, agricultural technique, business
quarters, business books, contracts, inventory lists as well as other documentation relevant for
acquiring insight in entities’ activities in compliance with agricultural and other legislative;
and supervision of the overall quantities of products of plant origin, encompassed with the
certificate issued by authorized legal persons and institutions.
- EU Department: monitoring and management and coordination of all aspects of EU
integration processes within the MAFWE; preparation, implementation, coordination and
monitoring of the National Programme for the Adoption of the Acquis (NPAA);
implementing the process of EU integration and approximation/adoption of the EU Acquis
Communautaire; programming of the EU Instrument for Pre-Accession (IPA) , Component I;
and preparation of database of all relevant data (acts, documents, reports etc) related to the
EU integration process in the fields under the responsibilities of MAFWE.
25
Human Resources
Unit
MINISTER
Deputy Minister Internal Audit Unit
State Secretary
Strategic Planning
Unit
State Advisors
Organizational units – sectors Bodies within the MAFWE
Sector for Sector for Sector for Sector for Secto Sector for Sector Veterinary Seed and Plant State State Water Hydro
agriculture rural international EU Affairs r for forestry for Policy Directorate Planting Protection Agriculture forestry Economy meteorolog
development cooperation Fores police Analyses Material Directorate Inspectorate and Directorate ical
try Directorate hunting Directorate
Inspectorat
Unit for crop

production Unit for Sustainable
Rural Development Sector for Inspection
Policy Analyses Unit and Surveillance of
Unit for Unit for negotiations Crop-production,
grape / wine Unit for Education and EU integration Livestock Breeding,
production and Advisory Fisheries and Land
Services Policy Policy
Unit for monitoring
Unit for programming agriculture markets
Unit for fruit / the IPA and Sector for Inspection
vegetable Unit for Programming coordination and and Surveillance of
production the EU Rural monitoring of EU Unit for FADN Fruit Growing,
Development Pre- integration process Viticulture, Wine
accession Funds Production, Seedlings
Unit for
(IPARD) and Plant Protection
livestock
Chemicals
production Unit of EU Database Unit for Farm Register
Unit for Unit for Monitoring Sector for Inspection

products and Evaluation of and Surveillance of
standards Rural Development support measures in
and quality Programmes Agriculture
Unit for Unit for Rural Credit

organic Policy
production
Unit for Unit for Less-

fishery Favoured Areas
production 26
B) THE AGENCY FOR FINANCIAL SUPPORT IN AGRICULTURE AND RURAL
DEVELOPMENT (IPARD AGENCY)
I. ORGANIGRAM
The organigam of the Agency for Financial Support in Agriculture and Rural Development (IPARD
Agency) is presented further below
II. MANDATE OF THE IPARD AGENCY
The Agency for Financial Support in Agriculture and Rural Development was given a mandate with
the Law on establishing the Agency which came into force on 02.06.2007. The Government appointed
the Director of the Agency on 18.08.2007.
Article 1 of this law reads: This Law shall regulate the establishment, competences, organisation and
the manner of performing the work and management of the Agency for Financial Support of
Agriculture and Rural Development and shall determine the sources of funding and their purpose, as
well as other issues of relevance to the development of agriculture and rural areas.
III. STAFF ESTABLISHMENT IPARD AGENCY

Employment in 2006 was as follows:
- 15 employees employed through the Secretariat for European Affairs
- 4 employees employed through the General Secretariat, out of which 2 employees have resigned
before transfer to the Agency for Financial Support in Agriculture and Rural Development (IPARD
Agency)
Total: 17 employees
Employment in first half of 2007

- 2 employees employed through the Ministry of Agriculture, Forestry and Water Economy and
transferred to the Agency for Financial Support in Agriculture and Rural Development (IPARD
Agency)
- Director nominated by the Government
Total: 20 employees taken over by the Agency for Financial Support in Agriculture and Rural
Development (IPARD Agency)
Employment in second half of 2007

- 3 employees
Employment on basis of Agency for Civil Servants from the second half of 2007 till 13.02.2008
- 6 employees
TOTAL: 29 employees till 14.03.2008
Employment in first half of 2008

- open call published for 25 new employees, procedure for selection – on going
- open call published for 7 new employees, procedure for testing and selection – on going
IV. BUDGET OF THE IPARD AGENCY

- 2.733.000.000 (denars, national currency)
- 45.000.000 euros ( 42 mil. Euro have been programmed for the National Payment Schemes
from account no. 464)
V. BRIEF JOB DESCRIPTION OF THE SECTORS AND UNITS WITHIN AGENCY FOR FINANCIAL
SUPPORT IN AGRICULTURE AND RURAL DEVELOPMENT (IPARD AGENCY) (in connection to the
Law establishing the Agency for Financial Support in the Agriculture and Rural Development and the
Organigram)
27
- Sector for Approval of Projects: main function is to receive the project applications and to
evaluate the project application before approving it;
- Sector for Authorization of Payment: main function is to receive the claim for payment and
to perform necessary control of the eligibility of the costs occurred during realization of the
investment;
- Sector for Control: main function is to control the investment before approval according the
request from the Sector for Approval of Project, to control the realization of the investment
before payment and to perform ex-post control of the investment.
- Sector for Finance and Accounting: main function is to execute the payment and to record
the payments which are executed
- Sector for General and Legal Affairs: main function is to give administrative and legal
support to the Agency for Financial Support in Agriculture and Rural Development (IPARD
Agency)
- Sector for Internal Audit: main function is to perform audit of the administrative and
financial work of the IPARD Agency and possible delegated bodies, thus examining all
operating functions of the IPARD Agency
- Sector for Information and Communication Technology: main function is to give ICT
support to the working process of the IPARD Agency by creating secure IT system, data base
and provide technical support to the ICT system. (the sector is not part of the accreditation
process)
- Unit for Human Resources: main functions are keeping and updating the personal records
of the IPARD Agency’s civil servants and their personal files, carrying out employment
procedure within the Agency for the purpose of occupying the available work posts, taking
care of the rights and liabilities coming out of the employment contract of each of the
Agency’s employees, preparation and implementation of the human resources development
program within the IPARD Agency, preparing the monthly allowances for the IPARD
Agency employees, identifying necessary, and proposing training programs for the IPARD
Agency’s employees.
- Sector for National Payments: ( the sector is not part of the accreditation process)
28
DIRECTOR
Organigram Paying Agency

Unit for Human
Sector for Resources
Internal Audit Management
1 1+3
Unit for Internal Audit of Unit for Internal Audit

Rural Development Measures of Direct Payments
1+4 1+2
Sector for Direct Sector for Rural Sector for Sector for Control Finance and Sector for General Sector for Information and
Payments Development Authorization of 1 Accounting and Legal Affairs Communication
1 1 Payments Department 1 Technology
1 1 1
Unit for Agriculture Unit for Development Unit for Authorization Unit for Control of Unit for Information
Development of Economic Entities of EU Funded Rural Development Unit for Execution of Unit for Legal Affairs Systems
Support 1+12 Measures Measures Payment 1+4 1+4
1+18 1+4 1+12 1+6
Unit for Less Favored Unit for Rural Area Unit for Authorization Unit for Control of
Regions and Development of National Measures Direct Payments Unit for Accounting Unit for General Unit of Databases
Implementation of Agro- 1+8 for Rural Development 1+4 1+7 Affairs 1+4
Environment Measures 1+8
1+4
1+6
Unit for Director Unit for Technical

Support Support
1+7 1+5
Legend:
¾ Organizational units which which are not subject of accreditation by the European Commission
¾ Organizational units which are subject of accreditation by the European Commission
¾ total: 149 expected employees + 1 director = 150
29
Annex 4- Reference to laws, regulations and strategic documents
3.a) Reference list of relevant laws and regulations

Key laws and regulations on the sector:
• Law on Establishment of Directorate for Financial Support of Agricultural and Rural
Development, 2007
• Law on Agriculture and Rural Development, 2007
• Law on Wine, 2004
• Law on Livestock Breeding, 1997
• Law on Agricultural Land, 1998
• Law Amending the Law on Agricultural Land, 2004
• Law on Tobacco and Tobacco Products, 2006
• Law on Agricultural Activity, 2002
• Law on Establishing Agency for Promoting Development in Agriculture, 1998
• Law on Agricultural Inspection, 2004
• Law on Organic Agricultural Production, 2004
• Law on Pastures, 1998
• Law on Stock Exchanges of Agricultural and Food Products, 1992
• Law on Organisation and Operation of the State Administrative Bodies, 2000
• Law on Promoting Agriculture Development, 1996
• Law on Budget, 1993
• Law on State Audit, 2004
• Law on Audit, 2005
• Law on Financial Operations, 1997
• Law on Investment Funds, 2000
• Law on Banks, 2003
• Law on Indebtedness of the former Yugoslav Republic of Macedonia at the International Fund
for Agricultural Development for realisation of the Project for Rural Development of the
Southern and Eastern Regions, 1997
• Decision on Rising and Use of Funds from the Foreign Economic Assistance for Agricultural
Development in the former Yugoslav Republic of Macedonia, 1998
• Law on Establishing National Extension Agency, 1998
• Law on Associations of Citizens and Foundations, 1998
• Law on Waters, 2000
• Law on Water Communities, 2003
• Law on Water Management Enterprises, 2003
• Law on Promotion of Economically Underdeveloped Areas, 1999
• Decision on Determining Economically Underdeveloped Areas in the Period 2003 – 2007,
2004
• Law on Forests, 2004
• Law on Hunting, 2004
• Law on Nature Protection, 2004
• Law on State Statistics, 1997
• Company Law, 2004
• Law on Surveying, Land Register and Entry of Rights to Real Estate, 1991
• Law on of Animal Identification and Registration, 2004
• Law on Plants Protection, 2000
• Law on Plant Health, 2005
• Law on Seeds and seedlings from Agricultural Plants, 2006
• Rulebooks on implementation of the rural development measures, defined in accordance with
the Strategy for Agricultural and Rural Development
• Procedures on administrative and accounting procedures
30
• Bylaws on direct payments
• Bylaws on intervention on the market of agricultural and food products
• Bylaws on implementation of the measures for development of rural areas
• Bylaws on acts concerning AIS
• Law on establishing the Agency for Financial Support in Agriculture and Rural Development
(IPARD Agency) has been approximated with the EC Regulation 1085/2006 Establishing an
IPA and EC Regulation 718/2007 Setting up the rules for implementing EC Reg.1085/2006
• The Framework Agreement has been ratified by the Parliament thus is part of national
legislation
• The Sectoral Agreement awaits signing procedure and ratification
- the Law on Agriculture and Rural Development (Official Gazette no. 134/07) was recently
enacted and, as an umbrella law, it provides basis to regulate the fields of direct support and
market measures in agriculture, as well as the rural development measures. In this respect, it
is expected that several bylaws of this law will be enacted during 2008/2009 as it is foreseen
in the National Programme for the Adoption of the Acquis (NPAA 2008). These bylaws are
in the following fields and related to below mentioned EU acts:
Bylaws under Related EU Legislation

the Law on
agriculture and
rural
development
CMO (products 31971R2706, 31975R2728, 31986L0362, 31990R0837, 31993R1722,
of plant origin) 31993R2131, 31993R2273, 31994R1868, 31998D0292, 31998D0293,
31998D0294, 31998L0082, 32000R0824, 32000R1673, 32002L0076,
32003R1784, 32003R2236, 32006R1850
31968R0234; 31975R3279; 31997R0832; 31968R0315; 31968R0316;
31993R0404; 31994R2257; 31995R2898; 31996R2200; 31998R2717;
31999R0961; 32001R1148; 32003R1433; 32003R1432; 32003R1943;
32004R0877; 32004R0085; 32004R0086; 32000R0851; 32003R1466;
31999R2377; 31981R1292; 31997R0831; 32001R0912; 31987R1591;
32006R0634; 31999R0730; 31998R0963; 31987R1591; 32004R0214;
32001R1799; 32003R1757; 31988R1677; 31997R2288; 32002R1284;
32004R1673; 32001R2396; 32001R1543; 32001R1615; 32001R1508;
32004R1861; 31999R2561; 31999R1168; 31987R1591; 32002R0843;
31999R1455; 31999R2789; 32007R1182; 32007R1580; 32007R1234
CMO (products 31999R1254; 31996R2443; 31997R0226; 31999R2730; 31990R1186;
of animal 31982R0563; 31983D0471; 31991R0344; 32006R0103; 32006R1183;
origin) 32007R0700; 31977R1805; 32006R1669; 32000R0907; 32001R0026;
32001R1642; 31996R0295; 32002R2273; 32004D0761; 31984D0419;
31975R2771; 32006R1028; 32007R0557; 31975R2782; 31975R2777;
31990R1906; 31991R1538; 31990R1906; 31991R1538; 31999L0074;
32002L0004; 32007L0043; 32003R0546; 31975R2759; 31984R3220;
31985R2967; 32006R1128; 32002R2004; 31968R0391; 31975R2763;
31990R3444; 31998R2042; 31999R2713; 32002R2179; 32003R2246;
31981R1945; 31981R2180; 32006R0908; 32006R1319; 31993L0023;
32004D0760; 31989D0501; 31989D0502; 31989D0507; 31989D0503;
31989D0504; 31989D0505; 31989D0506; 31992R2137; 32001R2529;
31993R0461; 32002R0315; 31990R3446; 31990R3447; 31993L0025;
32004D0747;
Direct support 32003R1782
measures
Rural 31999R1257; 31999R2603; 32004R0817; 32005R1698; 32006R1974;
31
Development
measures
- in addition to this, the Law on State Aid in Agriculture will be enacted by the end of 2008 /
beginning of 2009 approximated with the following EU acts: (2006/C 319/01), 32006R1857,
32004R1860, 32004R0001, 32000Y0201(01).
3.b) Reference to AP/NPAA/EP/SAA

Reference to SAA (2001): The program will contribute towards the implementation of the SAA
Articles 1 and 68 on approximation of legislation to that of the Community, and Article 100
(Agriculture, and the agro-industrial sector) on modernisation and restructuring of agriculture, the
agro-industrial sector and rural development.
Reference to Accession Partnership (2007-2008): The program will address the following AP
priorities: “Speed up the registration of agricultural land in the real estate cadastre”; “Ensure collection
and processing of sound and reliable agricultural data”; “Continue preparations to establish effective
and financially sound paying bodies for the management and control of agricultural funds, in line with
EU requirements and international auditing standards”; “Upgrade the capacity of the agricultural
administration and complete preparations for enforcement and practical application of the
management mechanisms of the common agricultural policy, in particular the integrated
administration and control system (IACS), and ensure a functioning land parcel identification system
(LPIS)”.
Reference to the Progress Report (2007): The projects have reference to the Progress Report, which
highlights the importance of setting up of appropriate integrated administration and control system
(IACS), especially a land parcel identification system (LPIS). In terms od Agency for Financial
Support of Agriculture and Rural Development (IPARD Agency), although the Law establishing the
IPARD Agency was enacted, it still needs certain institutional strenghtening. In addition to this, the
State Agricultural Inspectorate also needs evident reinforcement.
With regards to the common market organisations, the Progress Report stress that limited progress is
to be be reported and that, overall, preparations in these areas are in the start-up phase.
Reference to National Plan for Adoption of Acquis (2007): The Plan has following assessment and
priorities with regard to agriculture and rural development: “With regard to better realisation and
management of the general measures for agricultural development, the realisation of the following
activities is foreseen: Adoption of a Law on Agriculture and Rural Development; … Establishment of
advisory and expert bodies for support of the agricultural policy; Regulating the markets of certain
agricultural and food products; System of direct support of the agricultural producers; Protection of
geographical indications, designations of origin and traditional specialty guaranteed on agricultural
and food products; Rural Development Support Policy; Support for scientific and research projects in
the area of agriculture; Agricultural Information System (AIS); Adoption of bylaws to the Law on
Agriculture and Rural Development; Drafting a programme for support of the introduction of
certification and registration systems; Introduction of Code of Good Agricultural Practice; Adoption of
bylaws to the rural development measures; Adoption of the Law on Establishing the Directorate for
Financial Support of Agriculture and Rural Development and Adoption of bylaws to the Law on
Establishing the Directorate for Financial Support of Agriculture and Rural Development; Drafting a
strategic document for establishing integrated IT system of the Ministry of Agriculture, Forestry and
Water Economy; Drafting a strategy and operational plan for development of sustainable and efficient
Agricultural Information System (AIS); Adoption of a Law on Farm Accountancy. … With regard to
strengthening the administrative capacity for better realisation and management of the general
measures for agricultural development, the realisation of the following activities is foreseen: Adoption
of new systematisation of the Ministry of Agriculture, Forestry and Water Economy and strengthening
and reorganisation of the administrative capacity; Establishing Agro-food Council for development of
private and public dialogue; Setting up an inter-ministerial group for rural development; Strengthening
32
the administrative capacity of the Sector for Rural Development; Strengthening the administrative
capacity of the The Agency for Financial Support in Agriculture and Rural Development (IPARD
Agency).Further staffing of the Sector for Agricultural Policy Analysis and Agricultural Information
System; Establishing a Single Farm Register; Establishing a Land Parcel Register (As a basis for
establishing a complete LPIS with digitalisation of the data from the cadastre in the State Authority for
Geodetic Works (SAGW), a Land Parcel Register will be established); Establishment of a Farm
Accountancy Data Network (FADN); Act on Accreditation of the IPARD Agency by the European
Commission … For the purpose of successful realisation of the Law on Agriculture and Rural
Development, apart from the existing staff capacity of the existing and newly established institutions,
it is required to employ new suitable personnel. In addition, it is necessary to provide equipping with
adequate IT technology, professional personnel upgrade, additional training and engagement of local
and foreign experts. For this reason, in this period strengthening the administrative capacity on most
levels is foreseen. From the aspect of realisation of the measures for support of agriculture and rural
development, it is foreseen to realise the following activities: Strengthening and further staffing of the
Sector for Rural Development; Further staffing of the Sector for Rural Development as an institution
in charge of setting, coordinating and implementing the policy for development of rural areas;
Strengthening the capacity of the newly formed IPARD Agency In accordance with the foreseen
competences of the Agency for Implementing Measures of National Programmes for Support and the
capacity required for the development of appropriate mechanisms for management of the EU pre-
accession funds, as well as the other accompanying activities in terms of: registration of applications
(regional office); approval of applications; authorisation of payments; carrying out payments;
accounting and internal audit; system of checks and controls / on-site inspections, and preparing
operational reports, there is series of additional medium-term measures to be implemented in relation
to the IPARD Management and IPARD Agency which will be determined in details upon the adoption
of the IPARD Programme. Moreover, for the requirements for managing an agricultural policy and
regulating the market for agricultural and food products, it is necessary to strengthen the capacity in
terms of interventions on the market, storing and keeping goods, selling goods in cases laid down by
law etc. To that end, taking into consideration the foreseen scope of medium-term activities of the
Agency, as upgrading of the short-term priorities, it will be necessary to provide additional technical
and safe working conditions. To realise these objectives, and in terms of establishment of the required
administrative capacity for management and realisation of the measures and activities in the field of
agriculture and rural development, the following activities have been foreseen: Establishing a
Agricultural Market Information System (AMIS); Further staffing of the Sector for Agricultural Policy
Analysis and Agricultural Information System; Land Parcel Identification System (LPIS) (Establishing
a Land Parcel Identification System (LPIS) pursuant to Regulations 32003R1782 and 32004R0796 for
the purpose of recording the use of land parcels); Integrated Administrative and Control System
(IACS) (Establishing an Integrated Administrative Control System (IACS) in accordance with
Regulations 32003R1782 and 32004R0795 for the purpose of efficient implementation of the
measures for support of the agriculture sector. A computer database, as a single farm register, will be
established for the purpose of data modelling, defining standards and forms of exchange, control
procedures for data quality and an overall strategy for application of information and communication
(including an alphanumerical identification of agricultural parcels in accordance with the land parcel
register and a System of Identification and Registration of Animals). IACS will also include the
following systems as part of the activities for financial support of agricultural producers: System for
Identification and Registration of Payment Orders, Applications for Financial Support, Integrated
Control System, and a single system of recording the identity of every farmer submitting an
application for support); Establishing a Farm Accountancy Data Network (FADN) (Introduction of a
network for collection of accounting data on the income and business operations of the agricultural
holdings in the country pursuant to Regulation 31965R0079, due to the necessity of support for the
agricultural policy in the process of adjustment to the EU Common Agricultural Policy”.
3.d) Reference to MIPD

Multi-Annual Indicative Planning Document (2008-2010) refers to: “Further efforts to align with the
acquis have to be made. The country needs to intensify its efforts in particular as regards agriculture. …
The country faces difficulties in implementing and effectively enforcing the legislation”; “The
33
agriculture sector is dominated by very small and highly fragmented family farms, engaged mainly in
subsistence agriculture, while only a small surplus is marketed locally. Economies of scale are thus not
exploited. The agricultural sector remains relatively problematic for several reasons, such as lack of
irrigation, land fragmentation and lack of proper management systems in general”; “Assistance will
focus on … preparing the country for the implementation of the Community’s rural development
policy, in particular by focusing on investments in agricultural production to restructure and upgrade
the sector to Community standards and on investments to develop and diversify economic activities in
rural areas”; “Strategic choice is concentrated around three areas of intervention, which are included in
the priorities identified in the Accession Partnership: (i) implementation of sectoral reforms; (ii)
adoption and implementation of the acquis and (iii) support to the preparation for decentralised
management of EU funds”; “As regards the adoption and implementation of the acquis, and with a view
to helping the country complying with the Copenhagen criteria, priority will be given to areas, where
the harmonisation of the legislation is an obligation linked to the implementation of the Stabilisation
and Association Agreement and where the volume of legislation to be harmonised is particularly large
and where harmonisation requires costly investments that must be spread over many years”; “In the
field of agriculture and rural development the capacity of the administration to enforce the management
mechanisms of the Common Agricultural Policy needs to be further upgraded”.
3.e) Reference to National Development Plan

The proposed project has reference in following assessments of the National Development Plan
(2007): The Draft 2008-2013 National Development Plan in its chapter VIII - Agriculture and Rural
Development, within its Goal 4. Increase of competitiveness of the Agriculture, especially refers to the
activities for “improvement of the support policies in agriculture”, which is related to this project
proposal efforts to strengthen the IACS system and further reinforce the implementing agency for the
overall support in agriculture - the Agency for Financial Support in Agriculture and Rural
Development (IPARD Agency). Furthermore, a major activity within Goal 5 (Reform of the
regulatory and institutional frame) of the NDP is the establishment of the Common Market
Organizations, which is also foreseen within this project proposal.
3.f) Reference to national / sectoral investment plans

The project directly links to the following strategies and action plans in the sector:
• Strategic Plan 2007-2009 of the Ministry of Agriculture, Forestry and Water Economy
• Working Programme 2006-2010 of the Government
• National Strategy for Agricultural and Rural Development 2007-2013, 2007
• Action Plan for Agricultural Development, 2007
• Action Plan for Rural development, 2007
• Sector analyses, 2007
• Operational programme under the EU instrument for pre-accession for rural development
(IPARD) 2007-2013
• Strategy for establishing integrated IT system of the Ministry of Agriculture, Forestry and Water
Economy
• Strategy and operational plan for development of sustainable and efficient Agricultural
Information System (AIS)
34
ANNEX 5- Details per EU funded contract
Management and contracting arrangements
For each component a steering group will be established to oversee the overall
implementation of the project.
Advisory services will be provided to the beneficiary. The contracts to support the project will
contain next to a team leader additional expertise to assist in key tasks, e.g. in the field of
administrative capacity building, training, IT development, legal development and others.
Some of these experts will address the cross-cutting issues.
The core project team – consisting of the team leader and other expertise will be placed within
the respective units.
The team leader will be responsible for the overall management, representation (co-ordination
with the EU and other international bodies) as well as reporting. The co-ordination of activity
development in the different components of the activity is significantly important. The team
leader is responsible for an appropriate management of resources. During the inception phase
of the project, a detailed deployment plan will be developed under the coordination of a
Steering Committee in which each co-operating national institution will be represented to
ensure appropriate inclusion.
The expected contracting arrangements are:
Financed through IPA:

for the implementation of component 1: Adoption and implementation of the acquis vis-à-
vis the CAP, specifically in relation to CMO establishment. The contract has an expected
duration of 12 – 24 months, is expected to start in 2nd quarter 2010, and has a budget of
approximately 700.000 Euro.
for the implementation of component 2: Development and implementation of agri-
environment measures. The contract has an expected duration of 12 – 24 months, is
expected to start in 2nd quarter 2010, and has a budget of approximately 700.000 Euro.
for the implementation of Component 3: Design of a functional Integrated Administration
and Control System and establishing the associated institutional capacity. The contract
has an expected duration of 12 – 24 months, is expected to start at 2nd quarter 2010, and has a
budget of approximately 600.000 Euro.
The ToR's for all the contracts should be developed in the course of 2009.
Financed through the national contribution:

1) 1 Supply contract is expected to be concluded to provide the IT equipment for the different
components. The specifications of the IT equipment will be made through a dedicated
Framework Contract financed under the Project Preparation and Support Facility. The supply
contract will have a duration of 4 to 8 months for delivery and training in equipment use, a
subsequent 12 months warranty period, and hence an overall duration of 16 – 20 months, and
should start in 3rd quarter 2010. The total value of this supply contract is expected to be EUR
35
400.000. The contract should include the software necessary for the LIPS system and the
Farm Registry.
2) 1 supply contract is expected to be concluded to provide the vehicles required under
establishing the associated institutional capacity. Approximately 6-8 vehicles are to be
procured. The specifications of the vehicles will be made through a dedicated Framework
Contract financed under the Project Preparation and Support Facility. The supply contract will
have a duration of 4 to 8 months for delivery and training in equipment use, a subsequent 12
months warranty period, and hence an overall duration of 16 – 20 months, and should start in
3rd quarter 2010. The total value of this supply contract is expected to be 100.000 Euro.
36

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Project Fiche 3.

4: Development of the administrative capacity to adopt and implement the

1.5 Contracting Authority (EC)

1.6 Implementing Agency

1.7 Beneficiary (including details of project manager)

1.8 Overall costs (VAT excluded)1: EUR 2.500.000

1.9 EU contribution: EUR 2.000.000

1.10 Final date for contracting

3.4 Agriculture and rural development.doc 1

1.12 Final date for disbursements

3.4 Agriculture and rural development.doc 2

2.1 Overall Objective:

2.2 Project purpose

2.3 Link with AP/NPAA/EP/SAA

2.4 Link with MIPD

3.4 Agriculture and rural development.doc 3

2.5 Link with National Development Plan

2.6 Link with national/ sectoral investment plans (where applicable)

3.1 Background and justification

3.4 Agriculture and rural development.doc 4

CAP and CMO

3.4 Agriculture and rural development.doc 5

The intention of the MAFWE is to set an integrated register of agricultural holdings as a

3.4 Agriculture and rural development.doc 6

3.3 Results and measurable indicators2

The project consists of three components:

The expected results are:

The measurable indicators are:

Component 2: Development and implementation of agri-environment measures

The expected results are:

3.4 Agriculture and rural development.doc 7

The measurable indicators are:

Component 3: Design of a functional Integrated Administration and Control System and

The expected results are:

The measurable indicators are:

3.4 Agriculture and rural development.doc 8

Component 2: Development and implementation of agri-environment measures

Component 3: Design of a functional Integrated Administration and Control System and

3.4 Agriculture and rural development.doc 9

Management and contracting arrangements

The expected contracting arrangements are:

Financed through IPA:

3.4 Agriculture and rural development.doc 10

Financed through the national contribution:

3.5 Conditionality and sequencing

The project includes the following conditionalities:

3.6 Linked activities

3.4 Agriculture and rural development.doc 11

3.7 Lessons learned

3.4 Agriculture and rural development.doc 12

IB IN EUR EUR %( Total % Ce Regional IFIs EUR % (2)

TOTAL IB 2.0 2.0 100

TOTAL INV 0.5 0 0 0.5 100 0.5

TOTAL PROJECT 2.5 2.0 80 0.5 20 0.5

Amounts net of VAT

5. Indicative Implementation Schedule (periods broken down per quarter)

Contracts (Financed by IPA) Start of Tendering Signature of Project Completion

3.4 Agriculture and rural development.doc 13

Equal opportunities and non-discrimination