WORLD TRADE
ORGANIZATIONG/SCM/N/95/EEC
15 December 2003
(03-6583)
Committee on Subsidies
and Countervailing MeasuresOriginal:  English
SUBSIDIES
New and Full Notification Pursuant to Article XVI:1 of
the GATT 1994 and Article 25 of the Agreement
on Subsidies and Countervailing Measures
EUROPEAN COMMUNITIES
The following communication, dated 6 October 2003, has been received from the Permanent
Delegation of the European Commission.G/SCM/N/95/EEC
Page 2
EUROPEAN COMMUNITY
TABLE OF CONTENTS
Page
I. INTRODUCTION ................................................................................................................. ..................4
A. STRUCTURE OF NOTIFICATION.................................................................................................... .....4
B. PERIOD COVERED............................................................................................................... ..................4
C. PRESENTATON OF NOTIFICATION.................................................................................................. ..4
D. STATUS OF SUBSIDIES.......................................................................................................... ...............4
II. THE EUROPEAN COMMUNITY’S STRUCTURAL ACTIONS .....................................................5
A. EUROPEAN REGAIONAL DEVELOPMENT FUND............................................................................6
B. EUROPEAN SOCIAL FUND......................................................................................................... ..........7
C. EUROPEAN AGRICULTURAL GUARANTEE AND GUIDANCE FUND (EAGGF) -
GUIDANCE SE CTION ............................................................................................................... .............8
D. EUROPEAN AGRICULTURAL GUARANTEE AND GUIDANCE FUND (EAGGF) -
GUARANTEE SECTION.............................................................................................................. ...........9
E. COMMON AGRICULTURE POLICY-ACCOMPANYING MEASURES EUROPEAN
AGRICULTURAL GUARANTEE AND GUIDANCE FUND (EAGGF) - GUARANTEE SECTION 10
III. AGRICU LTURE ................................................................................................................ ...................11
A. GENERAL REMARKS .............................................................................................................. ............11
B. MEASURES..................................................................................................................... .......................12
1. Export Refunds............................................................................................................... ..........12
2. Measures on the Internal Market .............................................................................................. 12
C. ANALYSIS BY SECTOR........................................................................................................... ............13
(i) "ARABLE CROPS" - SECTOR (Cereals, oilseeds, protein crops ,linseed, fibre flax and fibre hemp and
set-aside)..................................................................................................................... .................................13
(ii) "RICE"  SECTOR............................................................................................................. ...........................18
(iii) "DAIRY PR ODUCT" SE CTOR.................................................................................................... ..............19
(iv) "OLIVE OIL” ................................................................................................................ ..............................20
(v) "SUGAR" SECTOR .............................................................................................................. ......................22
(vi) "BOVINE ME AT" SECTOR....................................................................................................... ................23
(vii) "PIGMEAT " SECTOR .......................................................................................................... ......................25
(viii) "SHEEPMEAT AND GOATMEAT" SECTOR.......................................................................................... 26
(ix) "FRUIT AND VEGETABLE" SECTOR ............................................................................................... .....27
(x) "BANANAS"  SECTOR........................................................................................................... ...................28
(xi) "PROCESSED FRUIT AND VEGETABLES" SECTOR...........................................................................28
(xii) "WINE"  SECTOR ............................................................................................................ ..........................30
(xiii) "TOBACCO " SECT OR......................................................................................................... ......................33
(xiv) "TEXTILE FIBRES" SECTOR ................................................................................................... ................35
(xv) "DRIED F ODDER" SE CTOR...................................................................................................... ...............36
(xvi) "SEEDS"  SECTOR........................................................................................................... ..........................37
(xvii) "HOPS"  SECTOR........................................................................................................... ............................38
IV. INDUSTRY SECTORS............................................................................................................ .............38
A. COMMUNITY FRAMEWORK PROGRAMMES IN THE FIELD OF RESEARCH...........................38
B. AID TO THE C OAL INDUS TRY ..................................................................................................... .....40
V. OTHER PROGRAMMES............................................................................................................. .......43
A.  SME AND ENTREPRENE URSHIP PROGRAMME ............................................................................43
B.  JEV PROGRAMME.............................................................................................................. ..................45
C. FIFG ......................................................................................................................... ...............................46
D. COMMON ORGANISATION OF MARKETS IN FISHERY AND AQUACULTURE PRODUCTS. 47G/SCM/N/95/EEC
Page 3
IRREVOCABLE EURO CONVERSION RATES
(Council Regulation (EC) No 2866/98 of 31.12.1998
amended by (EC) No 1478/2000 of 19.6.2000)
                    1 EURO    = 40.3399 BEF (BELGIUM FRANCS)
                                    = 1.95583 DEM (GERMAN MARKS)
                                        = 340.750 GRD (GREEK DRACHMAS)
                                    = 166.386 ESP (SPANISH PESETAS)
                                  = 6.55957 FRF (FRENCH FRANCS)
                              = 0.787564 IEP (IRISH POUNDS)
                             = 1936.27 ITL (ITALIAN LIRAS)
                                            = 40.3399 LUF (LUXEMBURG FRANCS)
                                   = 2.20371 NLG (DUTCH GUILDAS)
                                            = 13.7603 ATS (AUSTRIAN SHILLINGS)
                                            = 200.482 PTE (PORTUGESE ESCUDOS)
                                = 5.94573 FIM FINNISH MARKS)G/SCM/N/95/EEC
Page 4
I. INTRODUCTION
A. STRUCTURE OF NOTIFICATION
Subsidies in the European Community are grante d both at Community level i.e. out of the
Community budget, and by Member States.
In view of this, the notification is divided into two parts.  This first part of the notification
deals with subsidies granted by the European Community and general information on aid granted
within the Community’s territory.  The second part of this notification, circulated as addenda to this
notification, covers subsidies granted by individual  Member States.  The Member States’ notifications
cover subsidies granted at both national and sub-national level.
B. PERIOD COVERED
As far as possible, this notification relates to subsidies granted during the period 2001 and
2002  and to subsidy programmes which are currently in force, and provides statistical information at
least up to the end of 2002.
C. PRESENTATION OF NOTIFICATION
The information provided in this notification includes, as far as possible, all the elements
required by Article 25.3 of the Subsidies Agreement and in almost all cases follows the presentation
required by the subsidies questionnaire.  In a few cases, the presentation is different to that specified
in the questionnaire, but all the required elements are still included.
D. STATUS OF SUBSIDIES
In preparing this notification, the Community has attempted to achieve the maximum
transparency with regard to aid and support measures granted within its territory.  The fact that such
aid has been notified does not, in accordance with Article 25.7 of the Subsidies Agreement, prejudge
its legal status under GATT 1994 or this Agreement, nor does it prejudge its effects under theAgreement or the nature of the measure itself.  In view of the diverse nature of many of the
programmes notified, it may be that only part of a programme’s funding involves a subsidy element,
which may or may not be specific.  Consequently, the appearance of a programme in this notification
does not in any way imply that the whole or part of its expenditure amounts to a specific subsidy.
EUROPEAN COMMUNITY SUBSIDIES
(a) Subsidies granted out of the European Community budget
In 2001 total  commitments  by the European Community amounted to EUR 96.99 billion .
In 2002 total commitments by the European Community amounted to EUR 98.63 billion.
The two largest areas of expenditure were agriculture and structural operations, which
accounted for 44 per cent per cent and 33 per cent per cent of financial commitments respectively.Another notable area of expenditure is research, which took up 4 per cent per cent of total
expenditure.  All these are described in more detail in this part of the notification.G/SCM/N/95/EEC
Page 5
(b) State aid in the Member States
The European Commission is responsible for examining all state aid granted within the
Community in order to determine its conformity with Article 92 of the EC Treaty, (and Article 95 of
the ECSC Treaty, for coal and steel products), Member States are required to notify all aid schemes to
the Commission, which may decide either not to raise any objection or open an investigation
procedure.  If the aid scheme is ultimately found not to conform to Article 92, the Commission issuesa negative decision which prevents the aid being granted.  If the Member State has already granted
such aid, the Commission can order the aid to be repaid.
Details of Member States’ aid schemes can be found in addenda to this notification.
II. THE EUROPEAN COMMUNITY’S STRUCTURAL ACTIONS
Introduction
1. The Community’s structural actions (comprising the Structural Funds and the Cohesion Fund)
are intended to strengthen the economic and social cohesion of the Community, in particular by
reducing disparities between the levels of development of the various regions and the backwardness
of the least-favoured regions.  Revised Regulations concerning the Structural Funds were adopted on
21 June 1999, and cover the period 2000-2006. The commitments in 2001 amounted to EUR 32.7Billion, in 2002 to EUR 33.8 Bio.
2. The three main Structural Funds (European  Regional Development Fund (ERDF), European
Social Fund (ESF), European Agricultural Guidance and Guarantee Fund, Guidance Section
(EAGGF) are described in detail below.  In addition, the funds include the Financial Instrument forFisheries Guidance (FIFG), which assists in the rest ructuring of the fisheries sector with an annual
budget of EUR 541 Mio in 2001 and EUR 749 in 2002.
The final component of EU structural spending is the Cohesion Fund, which is intended to
contribute to projects in the fields of environment and transport infrastructure, with an annual budgetof €2.7 billion.  Eligibility is reserved for Member  States whose GDP per capita is less than 90 per
cent of the EU average (currently Greece, Ireland, Portugal and Spain).
3. The Structural Funds (ERDF, ESF, EAGGF and FIFG) are devoted to the following
objectives, all of which are co-financed by Member States:
Objective 1: Development and structural adjustment of the regions whose development is
lagging behind (GDP of less than 75 per cent of the EU average).
Objective 2: Economic and social conversion of areas facing structural difficulties
Objective 3: The adaptation and the modernisation of national policies and systems of
education, training and employment. It is entirely financed by the ESF.
In addition, €1.5 billion per annum is set aside for Community initiatives in the fields of
deprived urban areas, interregional co-operation, rural development and equal opportunities.
4. These structural actions are required to conform strictly to the Community’s rules on the
provision of state aid (Article 87 of the EU Treaty).
5. The structural actions are notified in a spirit of transparency. The aid involved is largely
devoted to the least-developed areas of the EU, and the great majority of it goes to financeG/SCM/N/95/EEC
Page 6
infrastructure or to assist individuals directly, without necessarily benefiting commercial enterprises.
Consequently, as stated at the beginning of this document, the notification of a particular fund does
not prejudge the status of the aid involved.  In addition, only a relatively small part of the Structural
Funds are used to assist private investment.
A. EUROPEAN REGIONAL DEVELOPMENT FUND
1. Title of the programme
European Regional Development Fund (ERDF)
2. Period covered by the notification
2001, 2002
3. Policy objective and/or purpose of the programme
The ERDF is intended to help redress the main regional imbalances in the Community
through participation in the development and structural adjustment of regions whose development islagging behind (Objective 1) and in the economic and social conversion of areas facing structural
difficulties (Objective 2).
4. Background and authority for the programme
Articles 158 and 160 of the EU Treaty: C ouncil Regulation (EC) Nos. 1260/1999 and
1783/1999.
5.  Form of assistance granted – Grants from Community budget for
ERDF resources are mainly used to co-finance:
• productive investment leading to the creation or maintenance of jobs;
• infrastructure;
• local development initiatives and the business activities of small and medium-sized
enterprises.
6. To whom and how the assistance is provided
ERDF aid is co-financed by the Member States ; the ERDF provides a minimum of 25 per cent
of the total public expenditure involved, except in Objective 1 regions, where a minimum of 50 per
cent applies.
Member States submit multi-annual operation programmes, covering a coherent set of
regional development measures, and are responsible for the implementation of the programme and the
selection of individual projects.
As regards productive investment, the ERDF pa rticipates in financing (national) investment
aid with a regional aim. The aid is governed by  the principles of coordination adopted by the
Commission within the context of its competition policy and which, inter alia , set aid ceilings on
investments in firms. This ceiling has been reduced in the current period to 15 per cent of total eligible
costs, except in Objective 1 regions where the rate is 35 per cent.G/SCM/N/95/EEC
Page 7
Aid is normally in the form of grants or loans.
7. Total expenditure under the programme
The ERDF has historically tended to account for more than half of the total for the three
Funds, its expenditure amounted in 2001 to EUR 20 Billion and in 2002 to EUR 18 Billion.
8. Duration of the programme
2000-2006
9. Trade effects
Because the Fund is designed to alleviate disp arities between regions within the Community,
and because the aid is paid out on a horizontal basis, within eligible regions, it is considered that the
trade effects are minimal.
B. EUROPEAN SOCIAL FUND
1. Title of the programme
European Social Fund (ESF)
2. Period covered by the notification
2001, 2002
3. Policy objective and/or purpose of the programme
The European Social Fund was set up by the EEC Treaty in 1957 to improve the employment
opportunities for workers and to help raise their living standards.  It is based on Articles 146-148,
158-162 of the EEC treaty, according to which its main tasks are to render the employment of workers
easier by improving their geographical and occupational mobility and to increase economic and social
cohesion within the Community.  It is provided on a general basis under objective 3, and within theother two regional objectives.
4. Background and authority for the programme
Above Articles of the EC Treaty: Council Re gulations (EC) No. 1260/1999 as well as
Parliament and Council Regulations (EC) Nos. 1783/1999 and 1784/1999.5.
5. Form of assistance granted – Grants from Community budget for
- Vocational training,
- Employment aids and aids for self-employment,
- Development of new sources of employment.
6. To whom and how the assistance is provided
The ESF provides co-financed support in Member States for vocational training, aids for
employment and innovative actions.  The aid is normally devoted to people, not to enterprises.G/SCM/N/95/EEC
Page 8
Operational programmes, once approved by th e Commission, are managed by the competent
authorities in the Member States.  Identification of individual projects is the responsibility of the
Member State.
Aid is normally in the form of grants or loans.
7. Total expenditure under the programme
EUR 11.7 Billion for 2001 and EUR 9.4 Billion for 2002, excluding Community initiatives
8. Duration of the programme
2000-2006
9. Trade effects
Since aid is granted for the benefit of individuals, not enterprises, in order to promote active
labour market policies and social cohesion, the ESF is not considered to have any appreciable impact
on trade.
C. EUROPEAN AGRICULTURAL GUARANTEE AND GUIDANCE FUND (EAGGF) – G UIDANCE
SECTION
1. Title of the programme
European Agriculture and Guidance Fund (EAGGF)-Guidance section
2. Period covered by the notification
1 January 2001-31 December 2002
3. Policy objective and/ or purpose of the programme
Promoting rural development and structural adjustments in regions whose development is
lagging behind, including underdeveloped agricultural regions, (Objective 1). Speeding up the
adjustment of agriculture structures in the framework of the reform of the Common AgriculturePolicy.
4. Background and authority for the programme
Council Regulations (EEC) Nos. 1260/99 and 1257/99. The Guidance section was established in
1972.
5. Form of assistance granted-Grants from Community budget for
Rural development measures and adjustment of agricultural structures.
6. To whom and how the assistance is provided
Aid is co-financed with the Member States and implemented through multi-annual
programmes based on the aims of the EAGGF Guidance section as indicated above. The MemberStates are responsible for the implementation of the programme and the selection of individual
projects. Aid is normally in the form of grants or loans.G/SCM/N/95/EEC
Page 9
7. Total expenditure under the programme
EUR 2.62 billion was budgeted for every year (2001 and 2002), excluding the Community
Initiatives.
8. Duration of the programme
2000-2006
9. Trade effects
Given the aims of the programme it is considered that the trade effects are minimal.
D. EUROPEAN AGRICULTURAL GUARANTEE AND GUIDANCE FUND (EAGGF)-
GUARANTEE SECTION
1. Title of the programme
Rural Development plans. European Agriculture and Guidance Fund (EAGGF)-Guarantee
section.
2. Period covered by the notification
1 January 2001-31 December 2002
3. Policy objective and/ or purpose of the programme
Promoting rural development and structural adjustments outside Objective 1 regions.
Speeding up the adjustment of agriculture structures in the framework of the reform of the Common
Agriculture Policy.
4. Background and authority for the programme
Council Regulation (EEC) No 1257/99.
5. Form of assistance granted-Grants from Community budget for
 Agricultural development measures and adjustment of agricultural structures outside
objective 1 regions.
6. To whom and how the assistance is provided
Aid is co-financed with the Member States and implemented trough multi-annual operation
programmes based on the aims of the EAGGF Guarantee section as indicated above. The Member
States are responsible for the implementation of the programme and the selection of individual
projects.
Aid is normally in the form of grants or loans.
7. Total expenditure under the programme
EUR 0.84 billion was budgeted for 2001 and EUR 1.02 billion for 2002.G/SCM/N/95/EEC
Page 10
8. Duration of the programme
2000-2006
9. Trade effects
Given the aims of the programme it is considered that the trade effects are minimal.
E. COMMON AGRICULTURE POLICY-ACCOMPANYING MEASURES EUROPEAN
AGRICULTURAL GUARANTEE AND GUIDANCE FUND (EAGGF) - GUARANTEE
SECTION
1. Title of the programme
Accompanying Measures of the Rural Development Programmes. European Agriculture and
Guidance Fund (EAGGF)-Guarantee section
2. Period covered by the notification
1 January 2001-31 December 2002.
3. Policy objective and purpose of the programme
To support the following measures throughout the whole EU:(a) Early retirement
(b) Agroenvironmental measures.
(c) Afforestation of agricultural land(d) Compensatory allowances for less-favoured areas.
4. Background and authority for the programme
Council Regulations (EEC) No1257/99.
5. Form of assistance granted-Grants from Community budget for
(a) Early retirement for abandoning agricultural activity.
(b) Grants to compensate per income foregone and additional costs resulting from agri-
environment commitments.
(c)  Grants for planting trees on agriculture land.(d) Area payments to compensate less productivity in agriculture due to climatic or
geographic limitations.
6. To whom and how the assistance is provided
Aid is co-financed with the Member States on the basis of multi-annual operation
programmes based on the aims of the EAGGF Guarantee section as indicated above. The Member
States are responsible for the implementation of the programme and the selection of individual
projects. Aid is normally in the form of grants or loans.G/SCM/N/95/EEC
Page 11
7.  Total expenditure under the programme
EUR 3.52 billion was budgeted for 2001 and EUR 3.39 billion for 2002.
8. Duration of the programme
2000-2006
9. Trade effects
Given the aims of the programme it is considered that the trade effects are minimal.
III. AGRICULTURE
A. GENERAL REMARKS
1. The measures notified concern only products that are subject of a Common Agricultural Policy,
namely the following sectors:
- Arable crops (cereals, oilseeds, protein crops, linseed, flax and fibre hemp and set-aside)
- Rice
- Dairy products
- Olive oil
- Sugar and isoglucose
- Bovine meat- Pigmeat
- Sheepmeat
- Goatmeat
- Fruit and vegetables and products processed from fruit and vegetables
- Bananas- Wine
- Tobacco
- Textiles fibres (cotton, fibre flax and hemp, silkworms)
- Dried fodder
- Seeds- Hops
- Eggs and poultry
- Fishery products
- Products of the agri-foodstuff industries (products “not in Annex I”)
2. The measures notified include all price support measures, and direct payments introduced by the
common market organisations that can involve participation rather by the Community's financingorganisation or by the government of a member State, to the extend that such measure derive from the
Community regulations.
3. With respect to the total amount of aid for each sector, it should be noted that the data relate to
payments made by the European Agricultural Guidance and Guarantee Fund (EAGGF) in the course ofthe budgetary year concerned.G/SCM/N/95/EEC
Page 12
B. MEASURES
1. Export Refunds
For certain of the sectors governed by a common market organisation, the Common Agricultural
Policy provides for the possibility of granting export refunds.
The purpose of export refunds is to cover the difference between Community prices and
international trade prices in order to enable exports to be effected at international trade prices.
The refund is the same for the whole of the Community; a differential may be applied according
to destination or time (months of delivery). The amount of the refund is fixed periodically by the
Commission. The periodicity of the fixing is different for each sector because of the special
characteristics of each sector. In order to facilitate export operations, in the case of the majority of
products a system has been introduced whereby refunds can be fixed in advance. The refund is paid to theexporter.
The total amount of export refunds financed by the EAGGF in 2001 and 2002 are as follows:
     (EAGGF budgetary period-EUR million)
Products Refunds 2001 Refunds 2002
Arable crops
Sugar 1)
Rice
Olive oil
Fruits and vegetablesWine
Dairy products
Bovine meat
Pigmeat
Eggs and poultry
Non Annex I Products
Total expenditure259.8
1.008.2
38.7
   0.2
     50.8     22.5
1,106.5
   362.6
55.2
60.5
   438.8
3.403.899.3
1.168.2
41.1
   0.1
     46.4     23.8
1,159.6
   386.7
27.3
77.1
   413.5
3.443.1
1) Starting with marketing year 1981/1982, the export refunds on domestic sugar have been entirely
financed out of producer contributions by producers of sugar and isoglucose and sugar beet and sugar cane
producers of the Community.
2. Measures on the Internal Market
1. In order to stabilise markets and assure the agricultural population of an equitable standard of
living, the Common Agricultural Policy provides, in the market organisation regulations for the different
products, intervention and aid measures that vary according to the nature of the product and the special
characteristics of the market.
2. The cost of these intervention and aid measures is, as a general rule, financed by the EAGGF.
During the years 2001 and 2002, by product sector, they have amounted to:G/SCM/N/95/EEC
Page 13
     (EAGGF budgetary period-EUR million)  1)
Products Intervention 2001 Intervention 2002
Arable crops
Sugar  1)
RiceOlive oil
Flax and hemp
CottonSilkworms
Fruits and vegetables
Wine
Tobacco
SeedsHops
Dairy products
Bovine meat
Sheepmeat and goatmeat
Pigmeat, eggs and poultryFishery products
Other products
 2)
Total expenditures17,206.3
73.9
143.6
 2.523.6
92.6
            733.4
         0.5
  1.507.1
    1.174.2
     973.4
       102.7
       12.5
 800.1
  5.691.3
  1.447.3
       14.5
     13.4
1.362.4
33.872.818.490.8
54.4
150.5
 2.329.2
12.2
            804.0
         0.6
  1.505.0
    1.324.9
     963.2
       99.0       12.5
1.200.4
  6.685.2
  552.5
       2.8     15.4
1.027.5
35.230.1
1) Not including storage costs and the part co mprising production refu nds (chemical industry).
2) Dried fodder and dried vegetables; until 1994 expenditures on these was included under
expenditure on high-protein products (for dried fodder) and fruits and vegetables (for dried vegetables).
C. ANALYSIS BY SECTOR
(i) "ARABLE CROPS" - SECTOR (Cereals, oilseeds, protein crops ,linseed, fibre flax and fibre
hemp and set-aside)
This section covers the "classical market organisation for cereals as well as the area payment
scheme for producers in the arable crop sector (cereals, oilseeds, protein crops, linseed, fibre flax and
fibre hemp and set-aside).
The common market organisation for cereals
The common market organisation came into force on 1 July 1967. It is now regulated by
Council Regulation (EEC) No. 1766/92 and covers the following products:
- Grain cereals: common wheat, durum wheat, barley, rye, oats, maize, buckwheat,
canary seed, millet, others;
- processed products: flours, goats and meal of wheat, malt, starch, glucose, cereal-
based preparations, bran, wheat gluten, manioc and potato starch.
The cereal marketing year runs from 1 July to 30 June.G/SCM/N/95/EEC
Page 14
1. Operation of the market
A. Price arrangements
The Council fixes the intervention price for cereals. At this price the intervention
agencies must, at certain periods of the year, buy in the cereals they are offered thathave the requisite quality characteristics.
One single intervention price is valid for the following cereals: wheat, maize,
sorghum, barley, rye and durum wheat; there is no longer an obligation to buy in feed
wheat.
The intervention price is increased from November to June to cover storage costs (technical
and financing costs) and thus help to improve the disposal of cereals in line with market requirements.
The intervention price fixed by the Council for all cereals at EUR 101.31/t, for an indefinite
period and the monthly increment is EUR 0.93/t.
B. Specific market instruments
(a) Border regime
Where the price of cereals within the Community is higher than the world price, a refund
calculated in terms of the difference may be granted on exports. If the world price reaches a level
which disrupt or threatens to disrupt the availability of supply on the Commission market, appropriate
measures such as export levies may be taken.
Community food aid operations also attract refunds.(b) Stocks
Two types of intervention measures are involved:
- Buying-in and subsequent operations involving public stocks: this concerns buying-in by
the intervention agencies and the related disposal operations. They give rise to technical
and financial costs and to losses or gains on sales of stocks.
- Special measures: these are measures provided for in Article 6 of the basic regulation
(No 1766/92) to avoid situations in which the intervention agencies are forced to buy in
excessively large quantities of cereals. The Commission has broad discretionary powersfor the application of special measures and may, if necessary, also adopt measures
equivalent to carryover payments.
(c) Production refunds for potato and other starch
1. A production refund is paid to users of maize starch, wheat starch, barley starch or potato
starch for the production of certain non-food produc ts which are not protected upon import by tariffs.
The principal beneficiary industry comprises the chemical, paper and paperboard industry and
pharmaceutical sector. This refund is variable and is currently calculated so as to align prices of the
European Community raw materials to those of the world market.G/SCM/N/95/EEC
Page 15
2. The price and support policy for starch potatoes consists of three measures:
- the minimum potato price: This price is equivalent to the price of cereals, in particular
maize; the price is at the level of EUR 178.31 per quantity of raw material needed to
produce one ton of potato starch, as from 1 July 2001.
- the payment to farmers: This payment is granted to producers of  potatoes intended for
starch production. It is applied to the quantities required to produce one ton of starch, and
is set at the level of EUR 110.54 from 1 July 2001. Furthermore, the payment occurs
within a quota limit.
- the special starch producer’s premium: This premium set at EUR 22.25 per tonne of
starch is paid to potato starch-producing undertakings for the quantity of starch
corresponding to the starch producer’s quota provided that the minimum price is paid to
the farmer. It was intended to offset certain structural disadvantages in the starch
industry.
(d) Other intervention
These headings cover expenditure on various measures, in particular special digressive aid for
Portuguese cereal producers.
2. Arable crops scheme and set-aside
The reform of arable crops entered into force on 1 July 1993. It is currently governed by
Regulation (EEC) No 1251/99, which covers all cereals, oilseeds, protein crops, non-fibre flax seeds
(or linseed) fibre flax and fibre hemp and set-aside.
As far as cereals are concerned, the institutional prices have been gradually reduced as from
the 1993/94 marketing year to bring them closer to world prices. The resulting loss of income is offset
by an area payment, paid per hectare and calculated on a regional basis to producers sowing cereals
and submitting applications, subject to certain conditions, in particular that of setting aside land.
For oilseeds, linseed, flax and hemp area payments have been aligned from 2002 onwards to
cereal payments. For protein plants a special payment is applied.
Regionalisation plan
In order to reflect the diversity of agricultu ral structures in the Community, area payments
vary from region to region on the basis of the yields per hectare recorded in the past.(The periodcovered is 1986/87 to 1990/91, excluding the highest and lowest year).
The Member States have established a regionalisation plan in accordance with the criteria set
out in Article 3 of Regulation (EC) No 1251/99 which aims to define, insofar as is possible, distinct
homogeneous areas. The average yields may be modulated in order to take account of possiblestructural differences between production regions. The regionalisation plan must, however, guarantee
that the average historical yield (fixed for a given period) of each Member State concerned is
respected.
As a rule, for each area an "all cereals" yield should be applied. On account of the, sometimes
substantial, differences in yield, two distinct arrangements are provided for:
- for maize a yield different from that from other cereals may be applied;G/SCM/N/95/EEC
Page 16
- yields for a single region may be broken down into different yields for irrigated and non-
irrigated land (mixed areas).
Even where these two exceptions are applied, however, the yield recorded for all cereals in
the relevant region during the reference period must not be exceeded.
Expenditure stabilisation mechanism
The area payment is granted only for an area not exceeding a regional base area. This is
established as the average number of hectares sown to arable crops (cereals, oilseeds, protein plants,
linseed, flax and hemp) or, as the case may be, set aside under a public aid scheme in 1989, 1990 and
1991 in a given region.
As with the regionalisation plan, Member States are required to determine the region, which
may cover an entire Member State or several areas within a Member State.
A base area must be established separately for maize or irrigated crops where a yield higher
than that for other cereals is applied to these products. In addition, the area payment on irrigated areas
is granted only up to a separate base area.
Production and expenditure are controlled by the establishment of these base areas.
If the sum of the areas in respect of which the area payment is applied for (including that on
set-aside) the "COP" (cereals, oilseeds, protein plants, linseed, fibre flax and fibre hemp) and areas
declared as fodder areas is greater than the regional base, during one and the same marketing year, the
eligible area per producer is to be reduced proportionally.
In addition, where a Member State chooses to establish production regions that do not
correspond to the regional base areas and where the average yield under the regionalisation plan
applied in 1993 is exceeded, all area payments to be paid to that Member State in respect of the
following marketing year are to be reduced in proportion to the observed overrun, except where the
quantity applied for is less than the product of the base area of the Member State multiplied by theabove mentioned average yield.
3. Area payment
Cereals
For the period 1995/1999 the compensation amounted to EUR 54.34/t of historical cereals
yield for the region of production concerned. For 2000 and 2001 campaigns the amount is increased to
EUR 58.67/t and EUR 63/t. taken into account partly the intervention price reduction.
As regards durum wheat the system of individual rights the system of individual rights has
been replaced by a MGA (Maximum Guaranteed Area) system. . The total of all MGA's reaches3.19 million hectares for traditional regions. The supplementary aid for traditional zones, which was
introduced because of the alignment of intervention price for durum wheat to other cereals, was cut to
EUR 344.50/ha (not to be regionalised).
For certain non-traditional areas (France, Spain, Italy, Germany and UK) an additional
payment of EUR 138.90/ha in respect of an area not exceeding 73,000 hectares. That amount reflects
loss of income due solely to the fall in the guaranteed price for durum wheat.G/SCM/N/95/EEC
Page 17
Oilseeds
The products covered are rape sunflower and soya.
The Community market is essentially free. Imports are free of customs duties and exports do
not attract refunds.
From the 2002/2003 marketing year onwards, area payments are granted to producers,
calculated on a regional basis according to the historical yields defined in the regionalisation plan
excluding maize where maize is treated separately. The basis amount is identical to the amount for
cereals and set-aside (EUR 63/t). For the 2000/2001 marketing year the basis amount was
EUR 81.74/t and for the 2001/2002 marketing year EUR 72.37/t. During this transition period, these
amounts can be multiplied with the historical oilseeds yields of the existing regionalisation plans,multiplied with 1.95.
Protein crops, linseed, flax and hemp
The products are covered are:/g167 peas (excluding chick peas), beans and sweet lupines
/g167 non-fibre flax seed (linseed)
/g167 fibre flax and fibre hemp
The Community market is essentially free. Imports are free of customs duties and exports do
not attract refunds.
From the 2002/2003 onwards area payments for linseed, fibre flax and fibre hemp are granted
to producers, calculated on a regional basis according to the historical yields defined in theregionalisation plan excluding maize where maize is treated separately. The basis amount is identical
to the amount for cereals and set-aside (EUR 63/t). For the 2000/2001 marketing year the basis
amount was EUR 88.26/t and for the 2001/2002 marketing year EUR 75.63/t.
For protein crops the area payment amounts to EUR 72.5.-/t of historical cereals yield for the
region of production concerned.
Set-aside
Each producer claiming area payments for more than the equivalent of 92 tons of cereals
required to set aside 10 per cent of the area down to arable crops scheme on his holding. The
compensation for the set-aside obligation is fixed at EUR 63.-/t multiplied by the regional cereal yields.
This compensation is also payable on land voluntarily set aside in excess of the obligation,
subject however to a ceiling set by the Member State (which may not exceed the area sown to eligible
crops covered by payment applications).
Land set aside may be used for producing raw material for the manufacture of products not
directly intended for human or animal consumption.
Clause 7 of the Memorandum of Understanding on certain oilseeds between the EC and the US
stipulates that by-products of oilseeds produced on set aside land may not exceed one million tonnes perannum, in terms of soya bean meal equivalent, for animal or human consumption produced on set-aside
land from rape, colza, sunflower and soya.G/SCM/N/95/EEC
Page 18
Producers applying for area payments for an area not exceeding that needed to produce 92 tonnes
of cereals are not obliged to set-aside. The yields to be taken into consideration to calculate this tonnage
are those fixed by the regionalisation plan.
(ii) "RICE"  SECTOR
(a) Intervention measures
The intervention price for paddy rice shall be reduced by 15 per cent from 351.00 EUR/t. for the
1996/97 marketing year to 298.35 EUR/t. for the 2000/2001 marketing year. Community rice producers
may claim compensatory payments fixed per hectare of land under rice sown which shall be
differentiated according to the yield (tons/ha).
The intervention agencies are obliged to buy in any rice harvested in the Community and offered
to them, provided offers are made during the open period (April-July) and comply with certain
conditions, in particular in respect of quality and quantity.
The intervention buying-in price is fixed for a given standard quality. If the quality offered
differs from the standard quality, the price is adjusted by the application of price increases or reductions.It is applicable in all the Community intervention centres fixed at the beginning of the marketing year.
The real intervention price is increased each month during the open period to take some account
of warehousing and interest costs for storage of cereals in the Community.
The intervention buying-in prices fixed at the beginning of marketing years have been as follows:
(EUR/t.)
Product
Paddy rice1993/94
291.021994/95
291.021995/96
(1)351.411996/97
351.001997/98
333.451998/99
315.90From 1999/00
Onwards298.35
(1) As from February 1995, the prices were converted on the basis of the monetary coefficient of
1,207509.
Spanish prices have been aligned with Community prices as from marketing year 1990/91.
Portuguese prices have been aligned with Community prices from April 1993.
A national base area for each producer Member State is established:
- Spain: 104.973 ha.
- France
         - metropolitan territory:          24,500 ha.
        - French Guyana     5,500 ha.
-      Greece:          - traditional zones   22,330 ha.
          - other     2,561 ha.
-      Italy: 239,259 ha.
-      Portugal:   34,000 ha.
In case national areas in a given year exceed one of the base areas indicated, progressive
penalties will be applied in the form of a reduction of the compensatory payments.G/SCM/N/95/EEC
Page 19
(b) Production refund
A production refund is paid to users of rice starch for the production of certain non-food products
that are not protected upon imports by a tariff system.  The main beneficiary industry comprises the
chemical, paper and pharmaceutical sector.  The refund is variable and is currently calculated so as to
align prices of Community raw materials with the world market level.
(iii) "DAIRY PRODUCT" SECTOR
(a) Intervention measures
Each year an intervention price is fixed for butter and skimmed milk powder and the national
intervention agencies buy in, following the rules as indicated below, any such products of the Community
origin which comply with certain quality and packaging conditions.
The intervention prices fixed for the last few marketing years were as follows:
Intervention price valid
for2002/2003 2001/2002 2000/2001 1999/2000
1. Butter 328.20 328.20 328.20 328.20
2. Skimmed milk powder 205.52 205.52 205.52 205.52
Under the intervention mechanism, as amended in March 1987 and to apply until the end of the
additional levy system, intervention buying-in may be limited when certain conditions are met. Since
July 1987, intervention butter has been bought in under a tendering procedure. Butter is bought in at a
maximum price that is fixed in relation with the bids received by the Commission, but not lower than
90 per cent of the full intervention price. Skimmed milk powder can only be bought between 1 March and
31 August each year. Purchases can be suspended when the annual quantity offered reaches109,000 tonnes.
(b) Aid to private storage
Aid for private storage of milk powder, butter and certain cheeses produced in the Union is or
may be granted:
- for top quality skimmed milk powder: only when the market situation justifies the aid;- for butter stored for at least three months and between 15 March and 15 August; the aid can
be paid for a storage period of maximum 210 days;
- for certain cheeses : Grana Padano aged at least nine months old, Parmigiano-Reggiano
aged at least 15 months old and Provolone at least three months old.
In years where a serious imbalance can be reduced or eliminated by seasonal storage aid can be
granted for private storage of the long-keeping cheeses Emmental and Gruyère and of certain ewe milkcheeses.
(c) Aid for skimmed milk for animal feed
Aid is granted for skimmed milk and skimmed milk powder manufactured in the Community
and intended for animal feed.G/SCM/N/95/EEC
Page 20
The milk or powder must be either directly denatured or incorporated in some compound
feedingstuff intended for livestock.
(d) Aid for skimmed milk processed into casein
Aid is granted for skimmed milk produced in the Community and processed into casein,
provided both the milk and the casein produced from it comply with certain conditions.
(e) Other measures
- Measures may be taken, in years in which they are found necessary, to support the market
for long-keeping cheeses and goat’s milk cheeses, if such cheeses comply with certain
conditions.  These measures are taken, in particular, in the form of private storage aid.
- When surpluses of dairy products develop, or threaten to develop, measures other than the
above may be taken to facilitate their disposal or to prevent the development of new
surpluses.  A number of measures are currently in force to facilitate butter disposal on the
Community market; inter alia , aid is granted for use in the form of concentrated butter for
cooking, incorporation in certain foodstuffs and for direct consumption by certain categories
of persons or institutions.
- In order to encourage consumption by young people, aid is granted to Member States which
operate an aid programme for milk distributed in schools so that pupils can obtain milk at areduced rate.
(f) Additional levy payable by producers or purchasers of cows' milk
An additional levy was introduced in 1984 on quantities of milk exceeding those delivered in
1981 plus 1 per cent.  The Council has fixed the corresponding quantities for each Member State.  The
current rules are fixed by Regulation (EEC) No. 3950/92 (OJ L405 of 31.12.92) lastly amended by
Regulation (EC) N° 572/2003 (OJ L82 of 29.03.2003, p.20).
In the five last years, the total milk quota quantities for EC 15 were:
    (million tonnes)
1998/99 1999/00 2000/01 2001/02 2002/03
Deliveries 115.7 116.0 117.0 117.6 117.6
Direct sales 1.8 1.5 1.4 1.2 1.3
In case of non-respect of the milk quota, the levy is equal to 115 per cent of the target price
for both deliveries and direct sales, i.e. EUR 35.627/100 kg
(iv) "OLIVE OIL”
As from 1 November 1998, the market organisation system was substantially modified.
1. The public intervention system based on an intervention price fixed for a given quality and
that obliged the intervention agencies to buy in Community olive oil offered, was abolished.G/SCM/N/95/EEC
Page 21
Instead, a private storage system was put in place that allows market operators to store
quantities for relatively long periods if the market balance is disturbed.  The quantities to withdraw
from the market and the aid to be paid are determined by tender.
2. The maximum guaranteed quantity (MGQ) of 1.35 million tonnes was increased in 1998/1999
to 1,777,261 t and distributed among the producing Member States.  These National GuaranteedQuantities (NGQs) are distributed as follows:
- Spain: 760,027 t
- Greece: 419,529 t
- France:     3,297 t
- Italy: 543,164 t
- Portugal:   51,244 t
Exceeding the NGQ results to a proportionate reduction of the aid to the olive oil producers of
the Member States.  If the production is lower than the NGQ, 80 per cent of the remaining quantity is
carried over to the next marketing year and 20 per cent is distributed among those Member States
which have exceeded their NGQ.
3. Aid to the producers of olive oil is granted for olive oil produced in the Community from
olives harvested in the Community. However, any olive oil produced from olive trees planted after
1 May 1998 is not eligible to receive the production aid. The aid is designed to contribute to
establishing a fair income for producers. For Member States who wish, an aid to the producers oftable olives can be granted.  The quantities benefiting from the aid scheme are being converted to
olive oil and included in the NGQs.  The increased aid granted for small producers who were also
exempted from the co-responsibility scheme is abolished.
4. The Production target market price is the price that is considered desirable with the aim of
providing a fair income to producers. This price has remained stable since 1993/1994.
5. The Consumption aid which was equal to the difference between the indicative price less the
production aid and the representative market price and which was designed to facilitate the marketing
of the Community olive oil, has been abolished as from 1 November 1998. The representative marketprice as well as the consumption aid scheme, have been abolished.
6. Export refunds are foreseen in the olive oil market organisation scheme. However as of
1998/1999 market-year, the amount of refund has been fixed at zero.
The various elements mentioned above were fixed at the following levels:
      (EUR / 100 kg)
2000/01 1997/98 1998/99 1999/2000
Target price
Intervention priceProduction aidProduction aid for small producers
Representative market price
Consumption aid383.77
-
132.25
-
-
-383.77
175.16142.20151.48
229.50
12.07383.77
-
132.25
-
-
-383.77
-
132.25
-
-
-
7. Production refund is granted for olive oil used in the manufacture of certain preserved foods
(vegetables, fish, crustaceans).  The purpose of this refund is to enable beneficiaries to buy on the
Community market, at prices close to world market prices, the quality of oil they that they use most
frequently for their manufacturing.G/SCM/N/95/EEC
Page 22
The average production refunds are as follows:
       (EUR /100 kg)
2000/01 1997/98 1998/99 1999/2000
Production refunds 44.00* 61.26 44.00 44.00
* Estimate
(v) "SUGAR" SECTOR
1. Prices
(a) Sugar
Each year, an intervention price for white sugar is fixed for the non-deficit areas of the
Community; the intervention agencies are required to buy in the sugar concerned at that price
throughout the marketing year.
Intervention prices derived from that price are also fixed for each of the deficit areas.The intervention price is fixed for a standard qua lity; if the quality of sugar is different, the
price is adjusted in accordance with a scale of increases or reductions.
In addition, an intervention price derived from the intervention price for white sugar is fixed
for raw sugar of a standard quality after allowing for a uniform refining margin and national yield.  In
the marketing years 1996/97 - 1999/2000 and 2000/01 –2005/06 the intervention price for white sugar
amounted to 63.19 EUR/100 kg and for raw sugar to 52.37 EUR/100 kg (Reg. 1260/2001 OJ L 178 of
30.6.2001).
(b) Beet
For beet, a basic price is fixed each year valid for a specific delivery stage and a specified
standard quality.  This price is fixed taking account of the intervention price for white sugar and of
national values representing in particular the processing margin, yield, and undertakings' receipts fromsales of molasses.  In addition a minimum price is fixed for A beet 
(2) equal to 98 per cent of the basic
price and a minimum price for B beet  (3) equal to 68 per cent or 60.5 per cent of the basic price.
These percentages are in direct relation with the production levies charged on A sugar and B
sugar. Manufactures are required to pay at least these prices.
In addition, in areas for which a derived intervention price of white sugar has been fixed, these
minimum prices are increased by an amount representing the effects of regionalization of prices.
(2) A beet is beet intended for processing into A sugar, i.e. into sugar included in production quota A.
(3) B beet is beet intended for processing into B sugar, i.e. into sugar included in production quota B.
2. Production levies
As from 1 July 1981, the principle in force is that producers should bear the full amount of any
financial losses resulting from disposal of surplus production of Community sugar in relation to
consumption in the Community.  Practical implementation of this principle is ensured through a levy
which may be charged at a rate of up to 2 per cent of the intervention price on all production under quotas
A and B (whereas hitherto only B sugar was subject to a levy).G/SCM/N/95/EEC
Page 23
If this first levy is not enough to cover the financial losses in question, a second levy, that initially
may not exceed 30 per cent and subsequently 37.5 per cent, if necessary, of the intervention price, is
charged.  This levy is only charged on B quota production (i.e. a total of 2 per cent plus 37.5 per cent =
39.5 per cent, that represents a minimum price for beet of 60.5 per cent of the basic price). This
possibility has been used since marketing year 1982/83.  Any remaining losses not covered by these
levies have been absorbed since marketing year 1986/87 by additional levies.  These new levies wereintroduced during the revisions of the quota system from 1986 to 1988.  Firstly to absorb the accumulated
negative balance not covered during the five marketing years from 1981/82 to 1985/86, and secondly to
avoid any further accumulation during the five-year period (from 1986/87 to 1990/91) for which it has
been decided to extend the quota system.  Thus, for the marketing years 1986/87 and 1987/88 a special
absorption levy was introduced, as well as an additional levy for the remaining three marketing years so
as to absorb annually the losses not covered by the normal production levies.  These levies are calculated
by multiplying the total amount owed by the enterprise by a factor representing the relation between the
total loss recorded and the receipts from the normal levies, i.e. the basic levy for A and B sugar and the B
levy for B sugar.  The integral self-financing system on an annual basis has been extended whenever the
quota system has been extended.
3. Reimbursement of storage costs
Provisions has been made for reimbursement of storage costs in respect of sugar produced under
quotas A and B.  The reimbursement is calculated on the basis of the intervention price for white sugar
and a standard fixed-rate interest rate for the whole Community.  It is aimed at equalising storage costs in
the Community.  It is a measure designed to ensure regular disposal of sugar in the market throughout themarketing year, to prevent the sale of excessive tonnage during the manufacturing period and in particular
to avoid the offering of sugar to intervention agencies solely in order to avoid storage costs.  This
reimbursement is financed out of a levy on manufacturers, based on the principle of equality, at the
Community level, between the total sum reimbursed and the total sum levied.
4. Intervention measures
(a) Production refunds are granted on sugar used in the chemical industry, of which
60,000 tonnes are charged to the budget.  That is the quantity eligible for refunds before
a new system came into effect on 1 July 1986 under which all quantities over and abovethat ceiling are charged to the producers and covered by the levies they pay.
(b) Disposal aid (transport, refining) is granted on raw sugar produced in the French
overseas departments in order to ensure that it has the same conditions of refinery access
as preferential sugar (ACP countries and India).
Either a variable refining aid or a corresponding tariff adjustment is granted on all raw
preferential and special preferential sugar refined in the Community in order to maintain a competitive
refining margin.
(vi) "BOVINE MEAT" SECTOR
1. In the bovine meat sector an intervention price is fixed each year valid for the reference quality
for slaughtered adult male bovine animals.
Market price quotations and public intervention buying-in are based on the Community scale for
classification of adult bovine carcasses.G/SCM/N/95/EEC
Page 24
In the marketing year 2000/01 the intervention price has been 342.20 EUR/100 kg carcass weight
and in 2001/02 301.30 EUR/100kg. The public intervention regime was abolished on 1 July 2002 and
replaced by a system of private storage aid.
Aid to private storage may be granted if the average Community price of adult male carcasses is
for two consecutive weeks below 103 per cent of the basic price (222.4 EUR/100kg carcass weight). Theamount of such aid is:
- Either established under a tendering procedure;
- Or fixed in advance on a lump sum basis.
A safety net public intervention mechanism is provided in case of a very severe decrease in the market
prices, i.e. the average market price in a Member State, or a region thereof, has to fall below 156.0EUR/100 kg during two consecutive weeks.
2. Price support regime
The European Community has introduced measures to link management of the internal market
more closely to market price trends (Reg.1254/1999).
During the transitional period up to 1 July 2002:- For the determination of buying-in prices under the tendering procedures, only offers not
exceeding market prices by more than a reasonable margin were eligible;
- the thresholds for the activation of intervention buying-in were fixed as follows (tendering
procedure):
Market price as a percentage of the
intervention price equal to 347.50
EUR/100 kg. CarcassUnder regular tendering
proceduresUnder safety net
Community market price
Member State market price84%
80%78%
60%
The reorientation measures adopted in the bovine meat sector also include a substantial
reduction in the level of price support.  This is offset by the grant of direct income support, which is
not tied to the level of production, applicable as from 1 January 1993, and subject to:
- At farm level, a density threshold in livestock units (LSU) per hectare of forage area; and- At Community level, a ceiling on the number of animals eligible for premium.
3. Premiums
Payment of premiums in the bovine meat sector is subject to a density requirement in LSU/ha
of forage area, which has been fixed as follows:
In 2000: 2.0 LSU/ha.
In 2002: 1.9 LSU/ha.
From 2003: 1.8 LSU/ha.G/SCM/N/95/EEC
Page 25
The density requirement does not apply, however, to holdings with less than 15 LSU.
In addition, a supplementary extensification premium of EUR 36.23 per eligible head may be
granted when the stocking density is lower than 1.4 LSU/ha.  As from 1997, this supplementary premium
amounts to EUR 36.00 and to EUR 54.00 when the stocking density is lower than 1,0 LSU/ha.
(i) Special premium for young male bovine animals
The special premium for young male bovine animals applicable to each of the age groups at
9 months and over 21 months, is set at the following linea:
Bulls: EUR 160 for 2000, EUR 175 for 2001 and EUR 210 for 2002
Steers: EUR 122 for 2000, EUR 136 for 2001 and EUR 150 for 2002
In a country where the percentage of male bovine animals slaughtered during the "off grass"
period (IX-XI) exceeds 35 per cent of the total number slaughtered during the year, an additional
deseasonalization premium of a decreasing amount of EUR 72.45 to EUR18.11 per head may be grantedfor bovine male animals slaughtered. In 2000, farmers in Denmark and Germany benefited from this
measure at the full rate and in Ireland and Northern Ireland at 60 per cent of the above amounts.
(ii) Premium for the maintenance of suckler cow herds
The suckler cow premium is granted to breeders who do not deliver milk or dairy products or
whose milk production is lower than a reference quantity of 120,000 kg.
The premium is set at:
EUR 163.00 for 2000, EUR 182.00 for 2001 and EUR 144.90 in 2002
An additional premium of EUR 50 per cow may be granted at national level particularly in
regions where development in the sector is lagging (Greece, Ireland and Northern Ireland, Portugal and
certain regions of Southern Italy, Spain and France).
(iii) Slaughter Premium
The slaughter premium for calves (1-7 months) is set at:
EUR 17 in 2000, EUR 33 in 2001 and 50 in 2002.
The slaughter premium for adult cattle ( 8 months and more) is set at:
EUR 27 in 2000, EUR 53 in 2001 and EUR 80 in 2002.
(vii) "PIGMEAT" SECTOR
1. A basic price is fixed for meat of domestic swine, presented in carcasses or half carcasses of a
standard quality. The basic prices stands at 150.94 EUR/100 kg (Reg. 2759/75).
2. Intervention measures may be taken when, on the representative markets in the Community,
the average price for pig carcasses is less than 103 per cent of the basic price.
Intervention measures are taken in form of private storage aid which is granted to operators
storing pigmeat on their own expense for 3 to 6 months..G/SCM/N/95/EEC
Page 26
Public intervention is also provided for in the basic Regulation (EEC) No. 2759/75 but has
not been used since more than 20 years.
(viii) "SHEEPMEAT AND GOATMEAT" SECTOR
The market organisation for sheepmeat and goatmeat is governed by Regulation (EC)
No 2529/2001.
The products covered are the following:- live animals;
- meat: fresh, chilled or frozen;
- processed products: meat and offal of sheep and goats, salted, dried or smoked,
preserved, other;
- offal
The marketing year runs from the first Monday in January to the end of the previous day of
the following year.
Direct Payments
Per ewe, the amount of the premium shall be EUR 21. However for producers marketing
sheep’s milk or products based on sheep’s milk the premium per ewe shall be EUR 16.8. Per she-goat
the amount of the premium shall be EUR 16.8.
A supplementary premium of EUR 7 shall be paid to producers in areas where sheep and goat
production constitutes a traditional activity or contributes significantly to the rural economy or
practising transhumance.
Trade with third countries
Imports into the Community, or exports therefrom, of any of the products listed in Article 1
Regl. 2529/2001 may subject to presentation of an import or export licence.
The European Community has opened tariff quotas for imports of sheepmeat at a reduced
level of duty or at zero duty.  These concessions have been established under the Agreement on
Agriculture concluded within the framework of the Uruguay Round.
Private storageThe Commission may decide to grant private storage aid when there is a particularly difficult
market situation in one ore more quotation areas.  Quotation area shall mean: Great Britain, Northern
Ireland, every other Member State taken separately. The aid shall be introduced in the framework of a
tendering procedure. However, it may be decided to grant aid in the framework of an advance fixing
procedure where urgent recourse to private storage proves necessary.G/SCM/N/95/EEC
Page 27
(ix) "FRUIT AND VEGETABLE" SECTOR
(a) Measures to promote the formation of producers' organisations
In order to encourage the formation of producer organisations and facilitate their operation,
aid can be granted to such organisations established on the initiative of producers.  These
organisations are to promote the concentration of supply, its adjustment to demand, theimplementation of environmentally sound practices, the regularisation of prices at the producer stage
and to make suitable technical means available for presenting and marketing products.
The following may be granted:1. During preliminary recognition, (a) an aid to encourage the formation of the producer
organisation and facilitate its administrative operation; (b) a special loan to cover partof the investments required to attain recognition.
2. After recognition, a final assistance limited to 50 per cent (60 per cent under certain
conditions) of the actual expenditure of the operational funds, capped at (the most)
4.1 per cent of the value of the marketed production of each PO.  Those funds are
used to finance the operational programme of the producers’ organisation as well as
market withdrawals, supplementary to those of the normal scheme.
(b) Intervention measures
For certain fruit and vegetables  (cauliflower, tomatoes, aubergines, melons, watermelons,
apricots, peaches and nectarines, table grapes, apples, pears, lemons, oranges, mandarins, clementines
and satsumas) producer organisations  can decide to withdraw products from the market.
If such decision is taken, growers receive a Community withdrawal compensation up to a
ceiling expressed as a percentage of the marketed quantity.  After a transitional period (from 1997 to
2002), the final ceiling for this compensation is, for each marketing year, 10 per cent (5 per cent for
citrus and 8.5 per cent for apples and pears) of the marketed quantity.
(c) Special measures for citrus fruit
In order to encourage processing of products not very well adapted to the fresh market, an aid
is granted to producer organisations for the quantities delivered to processors, within contacts
concluded before the beginning of the season. This regime covers lemons, grapefruit, oranges,
mandarins and clementines processed into juice and clementines and satsumas processed into
quarters.
(d) Special measures for nuts
In order to encourage the nut sector (almonds, hazelnuts, walnuts, pistachios and carobs) to
modernise existing production and marketing conditions, provision has been made, in the beginning
of the 90s, for the following for the benefit of organisations of nut producers:
- Special aid for their establishment;- Aid for the establishment of a working capital fund to allow storage and improve
marketing;G/SCM/N/95/EEC
Page 28
- Aid to improve varieties and cultivation and modernise marketing under a ten year plan
to be presented by producers' organisations;
.
- Participation in promotion drives organised in collaboration with the various economic
operators in this sector.
This aid is granted to the producers' organisations only to the extent that they furnish a
substantial proportion of the funds used to promote these activities. This regime has not been renewed
after 1996. Therefore, the last approved plans will end in 2006.
(x) "BANANAS"  SECTOR
(a) Measures to promote the formation of producers' organisations
In order to encourage the formation of producers' organisations and facilitate their operation,
aid can be granted to such organisations established on the initiative of producers.  These
organisations are to promote the concentration of supply and the control of prices at the producer
stage and to provide members with appropriate technical facilities for packing and marketing bananas.
Start-up assistance may be granted during the first five years following recognition of the
organisation, amounting to 5 per cent, 5 per cent, 4 per cent, 3 per cent, and 2 per cent of the value of
the production marketed, for each successive year, provided that the actual cost of establishing and
administering the organisation are not exceeded.
(b) Compensatory aid to producers
A compensatory aid is payable to all producers who are members of a recognised producers'
organisation, and also to individual producers who are unable to join such an organisation.  This islimited to an annual maximum of 854,000 tonnes for all EC producers.
This compensation is calculated as the difference between a "flat-rate reference income" and
the "average production income" at ex-packing station stage obtained on the Community market
during the relevant years for bananas produced and marketed within the Community. The reference
income is currently fixed at EUR 640.30/t ex packing station. In 2001 the aid amounted to
EUR 284/tonne for a total of 767.268 tons.  There is also the possibility of a supplementary aid forregions that have experienced especially severe market circumstances. This supplementary aid is
decided on a yearly basis. In 2001 a supplementary aid was paid to producers in Madeira, in Portugal,
and amounted to EUR 80/tonne for a quality of 20.682 tons
(xi) "PROCESSED FRUIT AND VEGETABLES" SECTOR
Production aid
(a) A Community aid scheme assists producer organisations ("POs") supplying tomatoes,
peaches and pears harvested in the Community for the production of some defined processed
products. This scheme is based on contracts, to be concluded before the marketing year,between POs and processors. The amount of aid has been fixed at EUR 34.50/tonne for
tomatoes, EUR 47.0/tonne for peaches and EUR 161.0/tonne for pears
For each of these products, Community and national processing thresholds have been
established as follows (Net weight fresh product, in tonnes) :G/SCM/N/95/EEC
Page 29
Tomatoes Peaches Pears
Community threshold 8,251,455 539,006 104,617
Greece 1,211,241 300,000 5,155
Spain 1,238,606 180,794 35,199
France 401,608 15,685 17,703
Italy 4,350,000 42,309 45,708
Netherlands - - 243
Austria - - 9National
thresholds
Portugal 1,050,000 218 600
Whenever a Community processing threshold is overrun, the aid fixed for the product in
question shall be reduced, for the following marketing year, in all the Member States in which
the corresponding threshold has been overrun. The reduction in aid shall be proportional to
the volume of overrun relative to the relevant threshold. Due to such an overrun for the2002/03 marketing year, the aid fixed for Greece, Italy and France for the 2003 marketing
year shall be decreased by 51.1 per cent, 24.4 per cent and 3.4 per cent from the level above
mentioned.
(b) A production aid scheme applies to dried figs a nd to prunes derived from dried 'd'Ente' plums.
This aid shall be granted to processors who have paid producers for their raw materials a price
not less than the minimum price, under contracts with recognised POs. This production aid
may not exceed the difference between the minimum price and the price of the raw material in
the main producing and exporting third countries. For the 2002/03 marketing year, these
amounts have been fixed as follows:
(EUR/tonne) Dried figs Prunes
Minimum price 878.86 1,935.23
Production aid 286.30 671.73
(c) An aid is granted for the cultivation of grapes intended for the production of dried grapes of
the sultana and Muscatel varieties and currants. The amount of this aid is fixed per hectare of
specialised area harvested. A maximum guaranteed Community area has been fixed at 53,000hectares. If the specialised area used for the production of dried grapes during a marketing
year exceeds that maximum guaranteed Community area, the amount of the aid shall be
reduced for the following marketing year according to the extent by which that area has been
exceeded. For the 2002/03 marketing year, this aid has been fixed at 3,290 EUR/ha for
sultanas, 3,080 EUR/ha for currants and 880 EUR/ha for Muscatel.
(d) During the last two months of a marketing year, "Storage agencies" may buy-in sultanas,
currants and dried figs produced in the Community. The quantities of sultanas and currants so
bought-in may not exceed 27,370 tonnes. A storage aid may be granted to the storage
agencies. For the 2001/02 marketing year, these amounts have been fixed at the followinglevels:
Dried grapes Dried figs
Buying-in price
(EUR/tonne)445.65 542.70
Storage aid
(EUR/tonne/day0.1405 until
28.2.2003, 0.1144
from 1.3.20030.1261G/SCM/N/95/EEC
Page 30
(xii) "WINE"  SECTOR
(! decimal point = comma)
On 1 August 2000 the reform of the common organisation on the market in wine entered into
force (Council Regulation (CE) N° 1493/99 1).
The main changes, compared to the former market organisation2, concern the abolishment of
any guide prices and a reshaping of distillation measures. The general structure of the market support
measures, which is aid for private storage of wine and must, distillation of wine and aid for the use of
grape must, remained unchanged. The concrete implementing provisions for the market mechanisms
are laid down in Commission Regulation (EC) N° 1623/20003, as last modified by Commission
Regulation (EC) N° 625/2003.4
Furthermore the structural measures in the wine sector have been reinforced under the reform
by introducing a scheme for restructuring and conversion of vineyards. The concrete implementing
provisions for the structural measures are la id down in Commission Regulation (EC) N° 1227/2000.5
1. Aid for private storage of table wines and grape must (Art. 23-39 of Reg.1623/00):
The measure aims to encourage wine producers to use storage in order to stabilise supply during
the marketing year. The aid is fixed per hl of product and per day. For the 2000/2001 marketing year it
was set at 0.01544 € for table wine, 0.01837 € for grape must and 0.06152 € for concentrated andrectified grape must.
The first day of storage may not be later than 16 February and storage shall expire between
1 August and 30 November for all grape must and between 1 September and 30 November for table
wines.
2. Distillation
(a)   Compulsory Distillation
Within the former package of compulsory distillation measures only two were carried forward
under the reform. These are:
- Distillation of by-products of wine-making  (Art. 45-51 of Reg.1623/00):
The aim of this distillation scheme under Art. 27 of Council Regulation (EC) 1493/1999
is to avoid overpressing of grapes and thus manufacture of poor quality wines. The priceto be paid by the distillers to producers for the marc, wine lees or wine delivered was
0.995 €/°Vol/hl. Articles 48-51 of Reg.1623/00 determine that distillers received a
Community aid varying between 0.2777 €/°Vol/Hl and 0.6279 €/°Vol/Hl depending onthe type of product they distil.
- Distillation of wine from dual-purpose grapes (Art. 52-57 of Reg.1623/00):
                                                     
1 JO L 179 du 14.7.1999, p.1
2 Reg (CEE) 822/87, JO L 84 du 27.3.1987, p.1
3 JO L 194 du 31.7.2000, p.45
4 JO L 90 du 8.4.2003, p.4
5 JO L 143 du 16.6.2000, p.1G/SCM/N/95/EEC
Page 31
This measure under Art. 28 of Council Regulation (EC) 1493/1999, relates to wines
from grapes intended at the same time for wine making and for other purposes (case
of grapes used for wine spirits produced in the French Charentes region, of grapes
intended for drying in Greece or table grapes in Italy). In order not to overburden the
market for table wines, all quantities of these wines exceeding the quantitiestraditionally vinified have to be distilled. The minimum price to be paid to the
producers of the wines concerned was set for all wine at an average price of 1.340
€/°Vol/hl. Distillers received a Community aid varying between 0.6401 €/°Vol/Hl and
0.7728 €/°Vol/Hl depending on the type of product they distil.
The price to be paid to distillers for raw alcohol, when delivered to the intervention
agency, has been fixed as follows:
Compulsory distillation under Article 27 of Regulation (EC) No 1493/1999:(i) standard price: 1.654 €/°Vol/hl
(ii) marc alcohol: 1.872 €/°Vol/hl(iii) alcohol distilled from wine and wine lees: 1.437 €/°Vol/hl
Compulsory distillation under Article 28 of Regulation (EC) No 1493/1999:- price 1.799 €/°Vol/hl
(b)  Optional DistillationTwo new measures that have been introduced in the common organisation are intended to
allow a more flexible and targeted response to the actual market situation
- Distillation into drinkable alcohol (Art. 63-64 of Reg.1623/00):
The first optional measure is a distillation scheme for table wines to facilitate delivery
to the traditional drinkable wine alcohol market. (distillation under Art. 29 of CouncilRegulation (CE) N°1493/1999). The price to be paid to wine producers was fixed at
2.488 €/°Vol/Hl. The Community aid offered to distillers ranged between 1.751
€/°Vol/Hl and 1.884 €/°Vol/Hl, again depending on the type of product obtained by
distillation. In addition, distillers can receive a secondary aid for the storage of
alcohol, which was set for the wine year 2000/2001 at 0.0336 € per hl of product and
per day.
This measure shall be opened each year. For the marketing year 2000-2001 it has
been opened on 1 September and its volume was limited to 40 per cent of the highest
volume of wine produced by each individual producer in the previous 3 years.
- Crisis distillation:
Crisis distillation as foreseen under Art. 30 of Council Regulation (CE) N°1493/1999,
may be opened "if there is an exceptional case of market disturbance caused by
serious surpluses and /or problems of quality"  . The measure can be limited to certain
categories of wine or certain areas of production but may also include quality wine.During the marketing year 2000/2001 the measure was applied several times. Prices
to be paid to producers varied betw een 1.723 €/°Vol/Hl and 2.105 €/°Vol/Hl
depending on the kind of product and the inclusion of transport fees. The advancedG/SCM/N/95/EEC
Page 32
payments to the distillers concerning the obligatory delivery to intervention boards
were fixed between 2.090€/°Vol/Hl and 2.473 €/°Vol/Hl.
3. Aid for the use of grape must
(a) Aid to grape must used in the wine-making process
Aid is granted in respect of concentrated grape must and rectified concentrated grape must used
to increase the alcoholic strength of wines as foreseen by art.12 of Reg.1623/00. It shall compensate the
difference between the cost of enrichment by means of grape must and sucrose, respectively. For the wineyear 2000/2001, the aid was fixed, per degree of potential alcoholic strength per hectolitre as follows:
for concentrated grape must prepared from grapes originating in the wine-growing zones C III
(a) and C III at 1.699 €/°Vol/Hl, and prepared from  grapes originating in other zones at 1.446
€/°Vol/Hl;
for rectified concentrated grape must prepared  from grapes originating in the wine-growing
zones C III (a) and C III at 2.206 €/°Vol/Hl and prepared from grapes originating in other
zones at 1.953 €/°Vol/Hl.
(b) Aid for the manufacture of grape juice
Aid is granted for grapes, grape must and concentrated grape must intended for
manufacturing grape juice or, newly introduced under the reform, for manufacturing other comestible
products from such grape juice. The amount of the aid for the wine year 2000/2001, as foreseen byart. 4 of Reg.1623/00, has been fixed at 4.952 € per 100 kg of grapes; 6.193 € per hectolitre of grape
must and at 21.655 € per hectolitre of concentrated grape must produced.
(c) Aid for the manufacture of certain products in the United Kingdom and in Ireland
The amount of aid for preparations falling within CN Heading 22.06.00, which are traditionally
called "British and Irish wines", have been fixed by art. 18a) of Reg.1623/00, at 0.2379 €/kg of
concentrated grape must used. The product must be obtained entirely from grapes produced in wine-growing zones C III (a) and C III (b).
The amount of aid for  preparation of certain products enabling the consumer to obtain therefrom
a beverage in imitation of wine ("home-made wine"), which are also traditional in the United Kingdom
and Ireland, have been fixed by art. 18b) of Reg.1623/00, at 0.3103 €/kg of the product obtained.
Access to all these support measures is reserved to producers who have fulfilled their
obligations regarding compulsory distillation
Structural measures
1. Abandonment premiums
Premiums for permanent abandonment of vineyards have been maintained. Member States
may determine the eligible areas and conditions for the implementation of this measure, including the
amount of the premium. EU legislation sets ma ximum amounts for financing at Community level.G/SCM/N/95/EEC
Page 33
2. Restructuring and conversion
In order to assist further the adaptation of supp ly to market needs, a scheme for restructuring
and conversion of production potential, both in terms of quality and quantity, was introduced under
the reform. Member States have to determine the regions, types of production eligible and the
amounts of these aids. Wine producers receive up to 50 per cent of the restructuring or conversioncosts (75 per cent in regions under Objective 1 of the Structural Funds) plus compensation for the
temporary income loss for a maximum of three years.
For the wine year 2000/2001 the following amounts were initially attributed by Decision (EC)
N°503/2000.
6
Member State Superficies (Ha) Allocations  (Euro)
Germany 1.624 12.610.000
Greece 1.162 8.280.000
Spain 18.371 122.110.000
France 14.359 104.140.000
Italy 13.691 100.310.000
Luxembourg 19 150.000
Austria 780 5.470.000
Portugal 3.980 26.660.000
Total 53.986 Ha 379.730.000 €
(xiii) "TOBACCO" SECTOR
The reform of the sector, adopted by the Council on 3 June 1992 radically changed the system
regulating tobacco, suppressing the intervention and export subsidies and the replacing target price by a
system of premium and guarantee thresholds.
The reformed market organisation regulated by Council Regulation (EEC) No. 2075/92 divides
raw tobacco into eight variety groups (Flue cured, Light air cured, Dark air cured, Fire cured, Sun cured,
Basmas, Katerini, Kaba Koulak classical).
(a) Premium
- Every year, the Council fixes the premium for each of the eight variety groups.
The amounts of the premium for the 2002 , 2003 and 2004 crop were as follows:
                                                     
6 JO L 201 du 9.8.2000, p.4G/SCM/N/95/EEC
Page 34
                   (EUR /Kg.)
I
Flue
curedII
Light air
curedIII
Dark air
curedIV
Fire curedV
Sun
curedVI
BasmasVII
KateriniVIII
Kaba
Koulak
2.98062 2.38423 2.38423 2.62199 2.14581 4.12957 3.50395 2.50377
- EU Producers and groups of producers must have concluded a European crop contract in
order to be eligible for the premium.
- A supplementary amount to the premium is given to the northern tobacco producing
countries (France, Germany, Austria, Belgium) to compensate for the difference in
production costs with producers of the southern Member States.  The supplementary
amount to the 1999 premium has been fixed as follows:
Varieties
Badischer Geudertheimer, Pereg, Korso
Badischer Burley E and its hybrids
Virgin D and its hybrids, Virginia and its hybridsParaguay and its hybrids, Dragon vert and its hybridsPhillippin, Petit Grammont (Flobecq), Semois,
AppelterreEUR/kg.
0.5509
0.8822
0.50390.41120.41120.4112
(b) Guarantee thresholds
In 1992, the Council replaced the global guaranteed maximum quantity system by  guarantee
thresholds fixed by variety and by Member State.
The quantities produced in excess of the thresholds are not eligible for the premium.The guarantee thresholds for the 2003 and 2004 crop were fixed as follows:
I II III IV V Others Total
Flue cured Light air Dark air Fire cured Sun cured VI Basmas VII Katerini VIII Kaba
cured cured Koulak
Italy 48,263 47,689 15,682, 900 6,255 8,833 498 127,220
Greece 32,242 11,842 6,938 27,114 24,014 16,696 121,846
Spain 29,028 5,545 6,388 30 40,991
Portugal 4,906 1,028 5,934
France 10,490 9,262 5,170 24,922
Germany 4,728 2,588 3,711 11,047
Belgium 149 1,404 1,553
Austria 29 426 96 551
Total 132,686 78,529 32,471 6,285 15,771 27,114 24,512 16,696 334,064
(c) Producer groups
In order to concentrate supply and adapt it to the qualitative requirements of the market, a special
aid amounting to 2 per cent of the premium is given to producer groups when they conclude cultivation
contracts.G/SCM/N/95/EEC
Page 35
(xiv) "TEXTILE FIBRES" SECTOR
1. Cotton
The aid system for the production of unginned cotton production has been modified with effect
from the 1995/96 marketing year, inter alia  with the aim of improving the functioning of the stabilizer
system.  The Community aid system fixes a guide price (106.30 EUR/100 kg. as from the 1995/95
marketing year) and an aid equal to the difference between this price and the world market price for
ginning enterprises that they pay producers a minimum price.  If the production of unginned cotton
exceeds the guaranteed maximum quantity (GMQ) (1,031,000 tonnes), the guide price and the amount of
the aid are proportionally reduced.
In each Member State the reduction of the aid is proportional to the amount by which it exceeds
its GMQ, fixed at 782,000 tonnes for Greece and 249,000 tonnes for Spain.  This reduction (abatement) is
unlimited, but if world prices allow the cost of the aid system to be limited, it is reduced.
On 1 September 2000, when the 2000/2001 marketing year began, the Commission fixed the
world market price at 37.255 EUR/100 kg., corresponding to an advance of aid of 43.5 EUR/100kg forSpain and 24.5 EUR/100 kg for Greece (provisional amount).  These amounts were calculated on the
basis of estimated production of around 320,000 tonnes of unginned cotton for Spain and 1,250,000
tonnes for Greece.
2. Fibre, flax and hemp
Community regulations include the following measures:(1) Production aid
Aid for fibre flax and hemp produced in the Community has been established in order to give
the producers concerned a fair income.  The amount of this aid is fixed each year for every hectare sown
and harvested.  As from the 1997/98 and the 1998/99 marketing year, the contracts with processors are
respectively obligatory for flax and hemp.
For hemp, the aid is given to the producer.  For fibre flax, one quarter of the aid is given to the
producer of the straw flax and three quarters to the person who buys the straw to process into fibre.  If the
producer processes the straw or has it processed on his behalf, he receives the total amount of the aid. In
addition, the Commission introduced in November 1998 criteria on normal cultivate work by fixing a
minimum yield.
Aid (EUR/ha.) Area (ha.)
Fibre flax: 2000/2001 marketing year 795.46 106,000
Hemp: 2000/2001 marketing year 646.31 20,000
(2) Aid for private storage of flax fibre bundle and hemp
The owners of bundle may conclude storage contracts when there is a temporary market
imbalance in order to prevent or reduce any significant drop in prices. In 1991, for example, thiscondition was met and the possibility was utilised.G/SCM/N/95/EEC
Page 36
(3) Aid to promote the use of flax fibre bundle
Community measures have been taken since the 1980/81 marketing year to promote the use of
flax in the Community.  It was decided to include in the basic regulations the possibility of taking
measures to promote the use of flax fibre bundle as from the 1987/88 marketing year. These measures are
entirely financed by a deduction from production aid.
(4) In November 1999, the Commission proposed a radical reform of the aid scheme
regime. The reform is structured around two proposals. The first would include flax and hemp in the
general aid scheme for arable crops, aligning the aid per hectare with aid rates for linseed. The second
would introduce supplementary assistance in the form of processing aid for straw and distinguishing
between high quality long fibre flax and low quality short fibre flax and hemp.  The rarely used measures
for private storage and promotion should be abolished.  The reform is to enter into force on the1 July 2000.
3. Silkworms
Community regulations in the silkworm-rearing sector include the following measures:(a) Production aid
Aid for silkworms, reared in the Community, has been established in order to provide silk
producers with a fair income.  The amount of this aid is fixed annually for each box of silk utilised.  Theaid is given to the rearer who successfully rears silkworms.
In 1997/98, aid amounting to 133.26 EUR/box was granted.In the context of 2000/2001 package prices, the Commission has continued the multi-annual
approach followed for Agenda 2000 and previous reforms by fixing an amount for the sector for an
undefined period.
(b) Aid to improve quality
Community measures may be taken to improve the quality of silkworms and silkworm eggs.
However, no such measure has been taken to date.
(xv) "DRIED FODDER" SECTOR
The common organisation of markets in the dried fodder sector covers the following products:
dehydrated fodder, the principal leguminous vegetables, sun- dried and ground, and protein concentrates
obtained from alfalfa and grass juice.
From 1 April 1995, beginning of the 1995/1996 marketing year, the Council has modified some
basic points of this sector.
Council Regulation (EC) No. 603/95 has established a system based on a flat rate aid for both
dehydrated and sun dried fodder within the limits of Maximum Guaranteed Quantities (MGQ) for both
types of fodder.
These MGQs are the following:
- Dehydrated fodder: 4,412,000 tonnesG/SCM/N/95/EEC
Page 37
- Sun-dried fodder: 443,500 tonnes
The MGQ is the sum of the National Guaranteed Quantities (NGQ).The NGQs are the following:
Member States National Guaranteed Quantities (in tonnes)
Dehydrated fodder Sun-dried fodder
UEBL 8,000 -
Denmark 334,000 -
Germany 421,000 -
Greece 32,000 5,500
Spain 1,224,000 101,000
France 1,455,000 150,000
Ireland 5,000 -
Italy 523,000 162,000
Netherlands 285,000 -
Austria 4,400 -
Portugal 5,000 25,000
Finland 3,000 -
Sweden 11,000 -
United Kingdom 102,000 -
Total 4,412,400 443,500
Within the MGQs, the amounts of the aid are:- Dehydrated fodder 68,83 EUR/tonne
- Sun-dried fodder 38,64 EUR/tonne
If, in any marketing year, the quantities for which the aid is granted exceed the MGQ, the amount
of the aid is reduced as follows:
- If the excess is less or equal to 5 per cent of the corresponding MGQ, the amount of the
aid is reduced accordingly in all Member States;
- If the excess is more that 5 per cent of the corresponding MGQ, the amount of the aid is
reduced by 5 per cent in all Member States; moreover, supplementary reductions areapplied in those Member States where the eligible production exceeds the NGQ
increased by 5 per cent.
(xvi)  "SEEDS"  SECTOR
Under the Community Regulations in force since 1 May 1972 and applied from 1 July 1972, a
production aid is granted for certain types of seed: rice and seeds of spelt wheat, maize and sorghum
hybrid, linseeds, leguminosae, and graminae.
When the market situation does not ensure an adequate income to the producer, an aid can be
granted. It consists of EC wide rates for each species or group of varieties.  It is fixed by quintal ofproduced seeds, taking into account the market situation and the prices on the external market.G/SCM/N/95/EEC
Page 38
Aid is fixed for two years with the possibility of modification before the start of the second year,
if the Community market is likely to be disturbed.
The amount of aid for the marketing years 2002/2003 and2003/2004 is as follows:
   (EUR/100 kg.)
Products
1. Cereals (rice, spelt)
2. Oilseeds
3. Graminae
4. Leguminosae 2002/2003 and 2003/2004
between 14.37 and 17.27
between 20.53 and 28.38
between 21.13 and 83.56
between 0 and 75.11
In 2002 a stabiliser mechanism including a maximum quantity for which the Community aid is
payable for seeds other than rice seeds was introduced. The overall quantity was fixed at 305.754 tonsand apportioned among the producer Member States. The distributed amounts are for Belgium 10,077 t,
Denmark 93,697 t, Germany 31,654 t, Greece 3,846 t, Spain 23,976 t, France 52,981 t, Ireland 1,016 t,
Italy 18,822 t, Luxembourg 865 t, Netherlands 35,856 t, Austria 769 t, Portugal 769 t, Sweden 8,132 t,
Finland 5,853 t, United Kingdom 17,910 t.
(xvii)  "HOPS"  SECTOR
In order to ensure a fair income for hop producers, the Community regulations provide for a
system of aid per hectare.  The Council fixed the aid at EUR 480.00/ha for the harvest 1996 to 2003
included, with no distinction between the various groups of varieties and payment being made at the end
of the harvest year.  The aid comprises two amounts which existed previously, i.e. aid to producers and
aid for variety conversion; for this latter, up to 20 per cent of the aid can be used.
IV. INDUSTRY SECTORS
A. COMMUNITY FRAMEWORK PROGRAMMES IN THE FIELD OF RESEARCH
There are two such framework programmes:
- The fifth framework programme of the European Community for research,
technological development and demonstration activities (1998-2002)
- The fifth framework programme of the European Atomic Energy Community
(EURATOM) for research and training activities ( 1998-2002).
1. Policy objective and purpose of the subsidy
Financial participation in Community research and technological development (RTD)
activities during the period 1998-2002 is provided through the two above-mentioned framework
programmes.
The legal bases of these programmes are, respectively, Article 166 of the EU Treaty and
Article 7 of the Treaty establishing the European Atomic Energy Community.G/SCM/N/95/EEC
Page 39
The fifth framework programme is aimed at strengthening the scientific and technological
bases of Community industry, encouraging the development of its competitiveness and contributing to
the implementation of the other Community policies under the Treaty.  These objectives and the
activities to be undertaken are listed in the Treaty and in the decision adopting the framework
programme (Decision N° 182/1999/EC of 22 December 1998).
The framework programme of the European Atomic Energy Community has two main parts:
nuclear fission and controlled thermonuclear fusion.  The objectives and activities to be undertaken
are set out in the Decision 1999/64/Eura tom of 22 December 1998 of the Council.
The activities under the two framework programmes are either fundamental research,
industrial research or pre-competitive development. Financing of product development is excluded.
The arrangements for implementing the two framework programmes are essentially the same
and are therefore described together in the following paragraph.
2. Form of subsidy
The framework programmes are implemented through specific programmes, which are the
subject of Council decisions
Community support to RTD activities is provided in the form of financing ("grants" within
the meaning of Article 25.3 of the WTO Agreement on Subsidies and Countervailing Measures)
granted to projects following an invitation for proposals and an evaluation procedure with
independent experts and selection procedure
Research projects  are carried out by participants established within the Community.  Non
Community participants whose country has signed an association agreement with the Community
may participate with Community funding to a fifth framework programme research project . Non
Community participants whose country has not signed an association agreement with the Community
may participate without Community funding to a fifth framework programme research project
Research projects must provide for the participation of at least two partners, independent of
each other, and established in different Member States.  Partnerships may involve universities,
research organisations and firms.
The European Commission is responsible for the implementation of the programmes.
Contracts concluded by the Commission (see attached specimen contract) govern the rights and
obligations of each partner, in particular arrangements for the dissemination protection andexploitation of research results (Article 167 of the Treaty).
3. Amount and duration of subsidy
1998-2002 framework programme Total amounts
(in millions of Euros)
 Fifth framework programme of the EuropeanCommunity  for research, technological
development and demonstration activities13,700
Fifth framework programme of the European
Atomic Energy Community (EURATOM)1,260
Total both programmes 14,960G/SCM/N/95/EEC
Page 40
4. Incidence on trade
The fifth RTD framework programmes  have no direct impact on trade.  As a general rule,
further work is always necessary for the results of a RTD project to lead to a commercially exploitable
process or product.
Furthermore, the results are shared among partners and may be made more widely available
under certain conditions, which serves the public interest.  One of the main benefits lies in
establishing links among research community partners, within Europe but also with non-EU countries.
The economic impact of industrially oriented programmes can be assessed only several years
after the completion of the projects, because firms have to make further investment to developcompetitive applications.
B. AID TO THE COAL INDUSTRY
Aid to the coal industry within the European Union during the period 2001-2002 has been
governed by two separate legal frameworks. This is due to the fact that the European Coal and SteelCommunity Treaty expired after 50 years of existence on 23
rd July 2002.
Commission Decision No 3632/93/ECSC covere d the period up to 23 July 2002 inclusive.
From 24 July 2002, Council Regulation 1407/2002 has governed state aid to the Community coal
sector. For the sake of completeness, a brief summary is given below of both legal frameworks.
Commission Decision No 3632/93/ECSC of 28 De cember 1993 on the Community rules for State
aid to the coal industry
Commission Decision No 3632/93/ECSC7 on the Community rules for State aid to the coal
industry entered into force on 1 January 1994 and expired on 23 July 2002..
Article 1 of this Decision defined what was considered to be an aid:(i) All aid to the coal industry, whether specific or general, granted by Member States or
through State resources in any form whatsoever may be considered Community aid and
hence compatible with the proper functioning of the common market only if it complies
with Articles 2 to 9.
(ii) The term "aid" covers any direct or indirect measure or support by public authorities
linked to production, marketing and external trade which, even if it is not a burden on
public budgets, gives an economic advantage to coal undertakings by reducing the costswhich they would normally have to bear.
(iii) The term "aid" also covers the allocation, for the direct or indirect benefit of the coal
industry, of the charges rendered compulsory as a result of State intervention, without
any distinction being drawn between aid granted by the State and aid granted by publicor private bodies appointed by the State to administer such aid.
(iv) The term "aid" also covers aid elements contained in financing measures taken by
Member States in respect of coal undertakings which are not regarded as risk capital
provided to a company under standard market-economy practice.
                                                     
7 OJ L 329 of 30 December 1993, p.12.G/SCM/N/95/EEC
Page 41
In addition to the specific criteria applicable to each category of aid, the Decision allowed aid
to be considered compatible with the proper functioning of the common market if it helped to achieve
at least one of the following objectives:
- to make, in the light of coal prices on international markets, further progress towards
economic viability with the aim of achieving a degression of aids;
- to solve the social and regional problems created by the total or partial reductions in the
activity of production units;
- to help the coal industry adjust to environmental protection standards.
The Decision also contained provisions designed to make existing aid schemes more
transparent.  Article 9(7) allowed for a transitional period not exceeding three years (which therefore
ended on 31 December 1996) after which aid would only be authorized if it was entered in the
national, regional or local public budgets of Member States or channelled through strictly equivalent
mechanisms (Article 2(2)).  In addition, from the beginning of 1994, all aid received by undertakingshad to be shown together with their profit-and-loss accounts as a separate item of revenue, distinct
from turnover (Article 2(3)).
Member States intending to grant aid to coal undertakings during the period 1994 to 2002
were required to submit to the Commission in advance a modernization, rationalization andrestructuring plan to improve the economic viability of the undertakings concerned by reducing
production costs (Article 3(2)).  For undertakings unable to achieve this, aid would only be considered
if they are subject to a closure plan with a deadline occurring before the expiry of decision
No. 3632/93/ECSC or, in exceptional social and regional circumstances, if the closure occured after
the expiry of the Decision.
Council Regulation 1407/2002 of 23 July 2002 on State aid to the coal industry
8
With the expiry of the ECSC Treaty on 23 July 2002, all secondary legislation under the
ECSC Treaty also automatically expired. This included Commission Decision 3632/93/ECSC of28 December 1993. As from 24 July 2002, the sectors previously covered by the ECSC Treaty have
been subject to the rules of the EC Treaty as well as the procedural rules and other secondary
legislation derived from the EC Treaty.
Having regard to the EC Treaty, in particular Article 87(3)(e) thereof, Council Regulation
(EC) No 1407/2002 of 23 July 2002 was established as the new legal framework for state aid to the
Community coal industry. In addition, the provisio ns of Article 88 EC Treaty and Council Regulation
(EC) No 659/1999 also apply.
It should be note that, while Council Regulation 1407/2002 has been in application since
24 July 2002, Article 14 of that Regulation stipulates that aid covering costs for the year 2002 may, on
the basis of a reasoned request by a Member State, continue to be subject to the rules and principleslaid down in Decision No 3632/93/ECSC. In accordance with this provision, the notifications from
Germany and the UK concerning the second part of 2002 were assessed on the basis of
Decision 3632/93/ECSC.
According to Council Regulation 1407/2002, diff erent categories of aid can be considered
compatible with the common market:
                                                     
8 OJ L 205 of 2 August 2002, p. 1G/SCM/N/95/EEC
Page 42
Aid Conditions
- Aid for the reduction of activity (Article 4): - closure plan, with a deadline of
31 December 2007;
- aid may not exceed the difference between
production costs and revenue ;
- Aid for accessing coal reserves (Article 5):
Two categories are foreseen:
  aid for initial investment:    - operating plan to ensure economic viability;
- not more than 30 per cent of the total costs;
  current production aid: - part of a plan for accessing coal reserves;
- aid granted to production units which afford the
best economic prospects.
- Aid to cover exceptional costs (article 7) : - costs arising from rationalisation and
restructuring.
In addition, the following rules apply for all the categories of aid foreseen:
- The overall amount of aid to the coal industry granted shall follow a downward trend
so as to result in a significant reduction.
- Aid may not cause lower prices than those for coal from third countries.
- Aid may not cause distortion of competition.
- Member States have, on duly justified grounds, until June 2004 to notify the
Commission of the individual identities of production units forming part of a closure
plan.
- Member States shall notify the Commissi on of the amount and full information about
the calculation of the aid actually paid during a coal year not later than six month
after the end of that year.
- The Commission takes a decision in accordance with the rules of procedure laid down
in Regulation (EC) No 659/1999 and in the light of the plans submitted.
State aid authorized 2001 – 2002 (in millions €)
ECU/EUR million 2001 2002
Germany
- operating aid
- aid for the reduction of activity- other1789.5
965.8
1400.91711.3
693.4
1152.4
Spain- operating aid- aid for the reduction of activity- other274.3
385.2
1283.61279.2
329.9469.4
France- operating aid- aid for the reduction of activity- other0.0
350.6642.30.0
303.4692.4G/SCM/N/95/EEC
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ECU/EUR million 2001 2002
United Kingdom
- operating aid- aid for the reduction of activity- other105.7
0.00.023.5
0.01.3
EU TOTAL
- operating aid
- aid for the reduction of activity- other2169.5
1701.72512.32014.0
1326.72315.5
Aid in € per tonne for operating aidand aid for the reduction of activity49.57 46.42
Coal production and imports in the Community (EUR-15):  2001-2002
(In million tonnes)
2000 2001 2002*
Community production 86.1 78.1 72.0
Imports into the Community 170.9 192.3 171.7
* Estimates
V. OTHER PROGRAMMES
A.  SME AND ENTREPRENEURSHIP PROGRAMME
1. Title of the programme
Multiannual programme for enterprise and entrepreneurship, and in particular for  small and
medium-sized enterprises (SMEs) (2001-2005)
2. Period covered by the notification
1 January 2001 – 31 December 2002
3. Policy objective and/or purpose of the programme
The programme holds the following five objectives:1. enhancing the growth and competitiveness of business in a knowledge-based
internationalised economy;
2. promoting entrepreneurship;
3. simplifying and improving the administrative and regulatory framework for business
so that research, innovation and business creation in particular can flourish;
4. improving the financial environment for business, especially SMEs;
5. giving business easier access to Community support services, programmes and
networks and improving the coordination of these facilities.
With these objectives the MAP is also supporting the implementation of the European Charter
for Small Enterprises.G/SCM/N/95/EEC
Page 44
4. Background and authority for the programme
Council Decision 2000/819/EC of 20 December 2000
5. Form of assistance granted
The objectives of the programme are pursued via a series of activities that fall under one of
three headings:
The Financial Instruments : These are schemes, managed by the European Investment Fund,
that are specifically targeted at improving the fina ncial environment for businesses, especially SMEs,
by bridging those gaps that financial markets would otherwise normally leave open:
• Start-up Scheme of the European Technology Facility (ETF). It promotes growth and
employment throughout the European Union by investing in funds providing risk capital to
smaller businesses.
• SME Guarantee Facility. It is designed to increase the availability of and facilitate access to
debt finance for small companies with job creation potential in Europe.
• Seed Capital Action.  It is a facility designed to stimulate the supply of capital for the creation
of innovative new businesses with growth and job creation potential, through support (long-
term recruitment of additional investment managers) for seed funds, incubators or similar
organisation in which the EIF participates.
The Euro Info Centres Network : Euro Info Centres represent an interface between
European institutions and local actors. Their task is to inform, advise and assist SMEs in all Europe-
related areas while taking into account the great variety of enterprises concerned, so that, either
directly or indirectly, they can make matters simpler and more efficient for SMEs.
Policy Development : The Commission, in close coordination with Member States, analyses
and studies how to ameliorate the overall environment that enterprises have to operate in. This
category include activities such as Best projects  for the identification and the exchange of best
practices; data collection and analysis; grants, networks and other projects; Publication and
information dissemination .
6. To whom and how the assistance is provided
Public, private or semi-public bodies, mainly in response to public calls for expression of
interest/calls for proposals.
7. Total expenditure under the programme
The overall budget foreseen is 450 million EUR over 5 years.
8. Duration of the programme
1 January 2001 –31 December 2005G/SCM/N/95/EEC
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9. Trade effects
Despite the fact that some actions are aimed at promoting access to new markets, the number
of SMEs capable of internationalising their activities is nevertheless small.  Consequently, the impact
on trade may be considered minimal.
B.  JEV P ROGRAMME
1. Title of the programme
The Joint European Venture (JEV) Programme
2. Period covered by the notification
1 January 2001 – 31 December 2002
3. Policy Objective and/or purpose of the programme
To provide financial contributions to small and medium-sized enterprises (SMEs) for the
setting-up of new transnational joint ventures within the European Union.
4. Background and authority for the programme
Commission Decision 97/761 /EC of 5 November 1997 (OJ L 310/28, 13.11.1997), Council
Decision 98/347/EC of 19 May 1998 (OJ L 155/43, 29.5.1998) and Council Decision 2000/819/EC of
20 December 2000 (OJ L 333/84, 29.12.2000).
5. Form of assistance granted - Grants from Community budget for:
The Community contribution is intended to cove r a part of the expenses incurred in the
conception and setting-up of transnational joint ventures.  The maximum contribution per project is
EUR 100,000 covering:
• Up to 50 per cent of the eligible expenses, with a maximum of EUR 50,000;
• Up to 10 per cent of the total amount of investment made in fixed assets.
6. To whom and how the assistance is provided
Direct support to SMEs within the European Union.  Applications are made to intermediaries,
which may be banks or other appropriate financial institutions.  The intermediaries (selected by a call
for expressions of interest) are entrusted with the evaluation of the applications and, in the event of a
favourable opinion, make recommendations to the Commission.
7. Total expenditure under the programme
The amount committed for the programme is EUR 57 million in each year.
8. Duration of the programme
1997-2005G/SCM/N/95/EEC
Page 46
9. Trade effects
The JEV aid is not contingent on the subsequent joint venture’s export intentions or
capabilities. The information on the joint venture part ners’ past or future exports is neither requested
nor relevant in determining the amount of support for the preparatory works or for the investment.
Furthermore, from the start of the programme in1997 until 31.12.2002 only 132 Joint Venture projectshave received support from the JEV programme, due to which the impact of this programme on trade
is negligible.
C. FIFG
1. Title of the programme
Financial Instrument of Fisheries Guidance (FIFG) – structural measures in the fisheries and
aquaculture sector, .
2. Period covered by the notification
.2000-2006
3. Policy and/or programme objectives
Community structural measures in the fisheries and aquaculture sector and the processing and
marketing of its products.
The objectives of the instruments are the following:- To contribute to achieving a sustainable balance between fishery resources and their
exploitation.
- To strengthen the competitiveness of structures and the development of economically
viable enterprises in the sector.
- To improve market supply and the value added to fisheries and aquaculture products.- To contribute to the revitalization of areas that depend on fisheries.
4. Legal authority
Articles  32, 33, 158, 159 and 161 of the EC Treaty, Regulation (EC).1260/99, Regulation
(EC) 2792/99, Regulation (EC) 2369/2002.
5. Type of aid
Aid to fishing fleets, aquaculture, processing and marketing circuits,  port facilities and socio-
economic measures.
6. To whom and how the subsidy is provided
Co-financing principle and principle of regionally diversified action.
Shipowners, enterprises, producer organizations, public and private bodies, professional
organizations, cooperatives, fishermen.G/SCM/N/95/EEC
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7. Total budget of the programme
Objective 1 Regions: 2000-2006: EUR  2.6 bil lion (0.403 billion EUR budgeted in 2000)
Other Regions: 2000-2006 : EUR 1.1 billion
2001 (all regions) : 541 MEUR,  2002 (all regions) : 749 MEUR
8. Duration of the programme
 2000-2006
9. Trade effects
The Community has a shortfall in fishery and aquaculture products and is a major importer of
these products from non-Community countries.  The structural aid has only a very small influence on
this situation.
D. COMMON ORGANISATION OF MARKETS IN FISHERY AND AQUACULTURE PRODUCTS .
1. Title of the measure
Common Organisation of the Market in Fishery and Aquaculture Products.
2. Period covered by the notification
2001-2002
3. Policy objectives and/or programme objectives
Stabilize the market, ensure a regular supply of high-quality products, guarantee reasonable
consumer prices and support fishermen's incomes.
4. Legal authority
Articles 32, 33 and 34 of the EC Treaty, Regulation (EC) No. 104/2000
5. Intervention mechanisms
Financial compensation, carry-over aid, autonomous withdrawal and carry-over, private
storage aid, compensatory payment for tuna supplied to industry.
6. To whom and how the subsidy is provided
Mechanisms implemented by producers' organizations.
Beneficiaries:  fishermen belonging to such organizations.
7. Total budget of the programme
2001 : 16.0 MEUR budgeted, 13.0 MEUR effectively disbursed
2002 : 17.0 MEUR budgeted,  5.0 MEUR effectively disbursedG/SCM/N/95/EEC
Page 48
8. Duration of the programme
Fishing years.
9. Effects on trade
None in so far as the Common Organization of Markets aims at regularizing prices and not at
artificially raising their level.
__________