WORLD TRADE  
ORGANIZATION  G/SCM/N/123/EEC 
26 August 2005 
 (05-3585) 
Committee on Subsidies 
and Countervailing Measures Original:   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 8 July 2005,  is being circulated at the request of the 
Delegation of the European Commission.  
_______________ 
 
 G/SCM/N/123/EEC 
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EUROPEAN COMMUNITY  
 
TABLE OF CONTENTS  
 
Page  
I. INTRODUCTION ................................................................................................................... .5 
A. STRUCTURE OF NOTIFICATION ....................................................................................................5  
B. PERIOD COVERED ........................................................................................................................5  
C. PRESENTATION OF NOTIFICATION ...............................................................................................5  
D. STATUS OF SUBSIDIES .................................................................................................................5  
II. EUROPEAN COMMUNIT Y SUBSIDIES.............................................................................5  
III. THE EUROPEAN COMMUNITY’S STRUCTURAL ACTIONS ......................................6  
INTRODUCTION ............................................................................................................................... ........6  
A. EUROPEAN REGIONAL DEVELOPMENT FUND .............................................................................7  
B. EUROPEAN SOCIAL FUND ...........................................................................................................8  
C. EUROPEAN AGRICULTURAL GUARANTEE AND GUIDANCE FUND (EAGGF)  – 
GUIDANCE SECTION ....................................................................................................................9  
D. EUROPEAN AGRICULTURAL GUARANTEE AND GUIDANCE FUND (EAGGF)  – 
GUARANTEE SECTION ...............................................................................................................10  
IV. COMMON AGRICULTURE POLICY -ACCOMPANYING MEASURES.....................11  
A. EUROPEAN AGRICULTURAL GUARANTEE AND GUIDANCE FUND (EAGGF)  – 
GUARANTEE SECTION ...............................................................................................................11  
V. AGRICULTURE .................................................................................................................... 12 
A. GENERAL REMARKS ..................................................................................................................12  
B. MEASURES ............................................................................................................................... .13 
1. Export Refunds ................................................................................................................. ......13  
2. Measures on the Internal Market..........................................................................................14  
C. ANALYSIS BY SECTOR ................................................................................................................14  
(i) ARABLE CROPS" - SECTOR (Cereals, oilseeds, protein crops, linseed, fibre flax and 
fibre hemp and set-aside)...................................................................................................... ....14  
(ii) "RICE"  SECTOR................................................................................................................. .....19  
(iii) "DAIRY PRODUCT" SECTOR.................................................................................................20  
(iv) "OLIVE OIL”.................................................................................................................... ........22  
(v) "SUGAR" SECTOR................................................................................................................. ..23 
(vi) "BOVINE MEAT" SECTOR......................................................................................................25  
(vii) "PIGMEAT" SECTOR ..............................................................................................................2 7 
(viii) "SHEEPMEAT AND GOA TMEAT" SECTOR ..........................................................................27   G/SCM/N/123/EEC 
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 (ix) "FRUIT AND VEGETABLE" SECTOR ....................................................................................28  
(x) "BANANAS"  SECTOR .............................................................................................................2 9 
(xi) "PROCESSED FRUIT AND VEGETABLES" SECTOR ...........................................................30  
(xii) "WINE" SECTOR.................................................................................................................. ....31  
(xiii) "TOBACCO" SECTOR .............................................................................................................34  
(xiv) "TEXTILE FIBRES" SECTOR ..................................................................................................36  
(xv) "DRIED FODDER" SECTOR...................................................................................................38  
(xvi) "SEEDS"  SECTOR................................................................................................................ ...40 
(xvii)  "HOPS"  SECTOR ................................................................................................................. ...40 
VI. INDUSTRY....................................................................................................................... .......41  
A. COMMUNITY FRAMEWORK PROGRAMMES IN THE FIELD OF RESEARCH ...................................41  
B. RESEARCH ON COAL AND STEEL ...............................................................................................42  
C. AID TO THE COAL INDUSTRY .....................................................................................................44  
VII. OTHER PROGRAMMES:....................................................................................................46  
A. SME  AND ENTREPRENEURSHIP PROGRAMME ...........................................................................46  
B. JEV  PROGRAMME .....................................................................................................................48  
C. FIFG........................................................................................................................... ...............49  
D. COMMON ORGANISATION OF MARKETS IN FISHERY AND AQUACULTURE PRODUCTS ............50  
 G/SCM/N/123/EEC 
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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 (PORTUGUESE ESCUDOS) 
 
     =  5.94573 FIM (FINNISH MARKS) 
  G/SCM/N/123/EEC 
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I. INTRODUCTION 
A. STRUCTURE OF NOTIFICATION  
 Subsidies in the European Community are gran ted 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 rela tes to subsidies granted during the period 2003 and 
2004 and to subsidy programmes which are currently in force, and provides statistical information at 
least up to the end of 2004.  
C. PRESENTATION OF NOTIFICATION  
The information provided in this notification in cludes, as far as possible, all the elements 
required by Article 25.3 of the Subsidies Agreemen t and in almost all cases follows the presentation 
required by the subsidies questionnaire.  In a few ca ses, the presentation is different to that specified 
in the questionnaire, but all the re quired elements are still included. 
D. STATUS OF SUBSIDIES  
In preparing this notification, the Commun ity 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 th e Subsidies Agreement, prejudge 
its legal status under GATT 1994 or this Agreem ent, nor does it prejudge its effects under the 
Agreement 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, th e 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. 
II. EUROPEAN COMMUNITY SUBSIDIES 
(a) Subsidies granted out of the European Community budget
 
 In 2003, total  expenditure by the European Community amounted to € 102 billion . 
 In 2004, total  expenditure by the European Community amounted to € 111 billion . 
 The two largest areas of expenditure were agriculture and structural operations, which 
accounted for 44 per cent and 33 per cent of financia l commitments respectively.  Another notable 
area of expenditure is research, which took up 4 per cent of total expenditure.  All these are described 
in more detail in this part of the notification. G/SCM/N/123/EEC 
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 (b) State aid in the Member States
 
 The European Commission is responsible fo r 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 issues 
a negative decision which prevents the aid being gr anted.  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. 
III. THE EUROPEAN COMMUNITY’S STRUCTURAL ACTIONS 
I
NTRODUCTION  
1. The Community’s structural actions (compris ing 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 leve ls of development of the vari ous 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 2003 amounted to EUR 31,1 
Billion, in 2004 to EUR 35,2 Bio. Following th e enlargement of the EU on 1 May 2004, the 
commitment for the ten new EU Member States amounted to EUR 3,8 billion.   2. The three main Structural Funds (European Regional Development Fund (ERDF), European Social Fund (ESF), European Agricultural Gu idance and Guarantee Fund, Guidance Section 
(EAGGF) are described in detail below.  In addition,  the funds include the Financial Instrument for 
Fisheries Guidance (FIFG), which assists in the restru cturing of the fisheries sector with an annual 
budget of EUR 578 Mio in 2003 and EUR 629 in 2004.    The other component of EU structural spendi ng is the Cohesion Fund, which is intended to 
contribute to projects in the fields of environment and transport infrastructure, with an annual budget 
of around € 2,7 billion (€ 18 billio n for the 2000-2006 period).  Eligibility is reserved for Member 
States whose GDP per capita is less than 90 per cent of the EU average (currently Greece, Portugal, Spain, plus the ten new Member States as from their accession on 1 March 2004: Estonia, Latvia, 
Lithuania, Poland, Czech Republic, Slovakia , Hungary, Slovenia, Malta and Cyprus). 
 
3. The Structural Funds (ERDF, ESF, EAGGF and FIFG) are devoted to the following 
objectives, all of which are cofinanced by Member States:   Objective 1: Development and structural adju stment 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 asi de for Community initiatives in the fields of 
deprived urban areas, interregional co-operati on, rural development and equal opportunities. 
 
4. These structural actions are required to conf orm strictly to the Community’s rules on the 
provision of state aid (Article 87 of the EU Treaty).   G/SCM/N/123/EEC 
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 5. The structural actions are notified in a spir it of transparency. The aid involved is largely 
devoted to the least-developed areas of the EU, and the great majority of it goes to finance 
infrastructure or to assist individuals directly, without necessarily benefiting commercial enterprises.  
Consequently, as stated at the beginning of this doc ument, 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
 
  2003, 2004 
 
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 struct ural adjustment of regions whose development is 
lagging behind (Objective 1) and in the economic a nd 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 cofinance: 
• productive investment leading to the creation or maintenance of jobs; 
• infrastructure; 
• local development initiatives and the busin ess activities of small and medium-sized 
enterprises.  
 6. To whom and how the assistance is provided
 
  ERDF aid is cofinanced 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 implemen tation of the programme and the 
selection of individual projects. 
 
 As regards productive investment, the ERDF par ticipates 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/123/EEC 
Page 8  
 
  
 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 2003 to EU R 13,4 Billion and in 2004 to EUR 16,8 Billion. 
 8. Duration of the programme
 
 
 2000-2006 
 9. Trade effects
 
  Because the Fund is designed to alleviate di sparities 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. E
UROPEAN SOCIAL FUND 
1. Title of the programme  
 European Social Fund (ESF) 
2. Period covered by the notification  
 2003, 2004 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 livi ng 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 occupatio nal mobility and to increase economic and social 
cohesion within the Community.  It is provided on a general basis under objective 3, and within the 
other two regional objectives. 
4. Background and authority for the programme  
 Above Articles of the EC Treaty: Council Regulations (EC) No. 1260/1999 as well as 
Parliament and Council Regulations (E C) 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 nor mally devoted to people, not to enterprises.   G/SCM/N/123/EEC 
 Page 9 
 
 
  Operational programmes, once approved by the 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 6,5 Billion for 2003 and EUR 7,6 Billion for 2004,  
8. Duration of the programme  
 2000-2006 9. Trade effects
 
 Since aid is granted for the benefit of indivi duals, 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. E
UROPEAN AGRICULTURAL GUARANTEE AND GUIDANCE FUND (EAGGF)  – GUIDANCE 
SECTION  
1. Title of the programme  
 European Agriculture and Guid ance Fund (EAGGF)-Guidance section. 
2. Period covered by the notification  
 1 January 2003-31 December 2004 3. Policy objective and/or purpose of the programme
 
 Promoting rural development and structural adjustments in regions whose development is 
lagging behind, including underdeveloped agricult ural regions, (Objective 1). Speeding up the 
adjustment of agriculture structures in the frame work of the reform of the Common Agriculture 
Policy. 
4. Background and authority for the programme  
 Council Regulations (EEC) Nos. 1260/99 a nd 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 St ates and implemented through multi-annual  
programmes based on the aims of the EAGGF Gu idance section as indicated above. The Member 
States are responsible for the implementation of  the programme and the selection of individual 
projects. G/SCM/N/123/EEC 
Page 10  
 
  Aid is normally in the form of grants or loans. 
7. Total expenditure under the programme
 
 EUR 2,76 billion was budgeted for 2003 (EU- 15) and EUR 3,23 billion (EU-25) for 2004, 
excluding the  Community Initiatives. 
8. Duration of the programme  
 2000-2006 
9. Trade effects  
 Given the aims of the programme it is cons idered 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 Ag riculture and Guidance Fund (EAGGF)-Guarantee 
section. 
2. Period covered by the notification  
 1 January 2003-31 December 2004 
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 St ates and implemented trough multi-annual operation 
programmes based on the aims of the EAGGF Gu arantee 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 1,12 billion was budgeted for 2003 (EU- 15)  and EUR 0,85 billion for 2004 (EU-15).  G/SCM/N/123/EEC 
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 8. Duration of the programme  
 2000-2006 9. Trade effects
 
 Given the aims of the programme it is cons idered that the trade effects are minimal. 
IV. COMMON AGRICULTURE POLICY-ACCOMPANYING MEASURES 
A. EUROPEAN AGRICULTURAL GUARANTEE AND GUIDANCE FUND (EAGGF)  – GUARANTEE 
SECTION  
1. Title of the programme  
 Accompanying Measures of the Rural Develo pment Programs. European Agriculture and 
Guidance Fund (EAGGF)-Guarantee section 
2. Period covered by the notification  
 1 January 2003-31 December 2004. 3. Policy objective and/or 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 aban doning agricultural activity. 
 (b)  Grants to compensate per income fo regone and additional costs resulting from agri-
environment commitments. 
 (c)   Grants for planting trees on agriculture land.  (d)  Area payments to compensate less produc tivity in agriculture due to climatic or 
geographic limitations. 
6. To whom and how the assistance is provided
 
 Aid is co-financed with the Member St ates on the basis of multi-annual operation 
programmes based on the aims of the EAGGF Gu arantee section as indicated above. The Member G/SCM/N/123/EEC 
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 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 3,58 billion was budgeted for 2003 (E U-15) and EUR 5,62 billion for 2004 (EU-25). 
8. Duration of the programme  
 2000-2006 9. Trade effects
 
 Given the aims of the programme it is cons idered that the trade effects are minimal. 
 
V. 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 cr ops, 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  G/SCM/N/123/EEC 
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  - 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 pa rticipation rather by the Community's financing 
organisation or by the government of a member Stat e, 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 Agricultu ral Guidance and Guarantee Fund (EAGGF) in the 
course of the budgetary year concerned. 
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 deliver y). 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 
the exporter. 
 The total amount of export refunds financed  by the EAGGF in 2002 and 2003 are as follows: 
       ( E A G G F  b u d g e t a ry period-EUR million) 
Products Refunds 
2002 Refunds 
2003 
Arable crops Sugar 
1  
Rice Olive oil 
Fruits and vegetables  
Wine Dairy products Bovine meat Pigmeat  
Eggs and poultry 
Non Annex I Products   Total expenditure 99,3 
1.168,2 
41,1 
   0,1 
     46,4 
     23,8 1.159,6    386,7 
27,3 
77,1 
   413,5 
 
3.443,1 175,9 
1.021,3 
37,7 
   0,1 
     29,3 
     19,6 1.595,4    295,5 
17,3 
98,8 
   433,3 
 
3.724,2 
 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.  
 G/SCM/N/123/EEC 
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 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 measur es is, as a general rule, financed by the EAGGF. 
During the years 2002 and 2003, by product sector, they have amounted to: 
 
              (EAGGF  budgetary period- EUR million) 
1 
Products Intervention 
2002 Intervention 
2003 
Arable crops  Sugar 
1 
Rice Olive oil Flax and hemp Cotton 
Silkworms 
Fruits and vegetables Wine Tobacco Seeds 
Hops 
Dairy products Bovine meat Sheepmeat and goatmeat Pigmeat, eggs and poultry Fishery products 
Other products 
2 
 Total expenditures 18.490,8 
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 16.633,5 
55,5 
193,5 
 2.346,3 
17,5 
            872,6 
         0,4 
  1.502,9 
    1.193,4 
     960,2        88,3 
       12,5 
1.200,8 
  7.795,4   2.082,1        55,4 
     12,6 
1.075,8 
 
36.098,7 
 1Not including storage costs and the part comprising production refunds (chemical industry). 
 2 Dried fodder and dried vegetables; until 1994 e xpenditures 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 market organisation for cereals as well as the single payment scheme 
for producers in the arable crop sector (cereals, o ilseeds, protein crops, linseed, fibre flax and fibre 
hemp and set-aside). The 2003 reform abolished area payments for cereals and introduced a system of 
decoupled income support for each farm, called “si ngle farm payment “which is conditional upon 
cross-compliance with environmental, food safety,  animal health and welfare, as well as the 
maintenance of the farm in good agricultural and environmental condition. 
 Such a system combines the existing direct payments received by a farmer in a single 
payment, determined on the basis of previous entitleme nts, within a reference period, adjusted to take  G/SCM/N/123/EEC 
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 into account the full implementation of measures in troduced in the framework of Agenda 2000 and of 
the changes to the amounts of aid made by Council regulation (EC) No 1782/2003 of 29 September 2003 establishing common rules for direct support schemes under the common agricultural policy (OJ L 270/1 of 21.10.2003). 
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 until the 2003 agri culture reform which, in the interest of 
clarity, repealed and replaced it with Council Re gulation (EC) No 1784/2003 of 29 September 2003 
on the common organisation of the market in cereals (OJ L 270/78 of 21.10.2003). This regulation 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. 
1. Operation of the market
 
 
 A.  Price arrangements  
 
  The Council fixes the intervention price for cereals. At this pr ice the intervention agencies 
must, at certain periods of the year, buy in the cer eals they are offered that have the requisite quality 
characteristics.  
  One single intervention price is valid for the following cereals: wheat, maize, sorghum, barley 
and durum wheat; there is no longer an obligation to  buy in feed wheat. Rye has been excluded from 
the intervention system in marketing year 2003/04. 
 
 The intervention price is increased from Novemb er to June to cover storage costs (technical 
and financing costs) and thus help to improve the di sposal of cereals in line with market requirements. 
  The intervention price fixed by the Council fo r all cereals at EUR 101,31/t, for an indefinite 
period and the monthly increment is EUR 0,46/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 availab ility 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: G/SCM/N/123/EEC 
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 - Buying-in and subsequent operations involving  public stocks: this concerns buying-in by 
the intervention agencies and the related dispo sal 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 7 of the basic regulation 
(No 1784/2003) to avoid situations in which the intervention agencies are forced to buy 
in excessively large quantities of cereals. The Commission has broad discretionary powers for the application of special measu res 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. 
 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 quan tities required to produce one ton of starch, and 
is set at the level of EUR 110,54 from 1 July 2001 until the end of the 2004/05 marketing 
year. 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 certa in structural disadvantages in the starch 
industry. 
 (d)  Other intervention
  
 
 These headings cover expenditure on various measu res, in particular special digressive aid for 
Portuguese cereal producers.  2. Arable crops scheme and set-aside
 
 
 Arable crops are currently governed by  Regulation (EEC) No 1251/99, as amended by 
Council Regulation (EC) No 1782/200 3 of 29 September 2003, which covers all cereals, oilseeds, 
protein crops, non-fibre flax seeds (or linseed) fibre flax and fibre hemp and set-aside. For durum wheat a special quality premium is applied. For prot ein crops a special premium is also applied.  
 Regionalisation plan
 
 
 In order to reflect the diversity of agricu ltural structures in the Community, area payments 
vary from region to region on the basis of the yiel ds per hectare recorded in the past.(The period 
covered is 1986/87 to 1990/91, excluding the highest and lowest year).  G/SCM/N/123/EEC 
 Page 17 
 
 
  The Member States have established a regionali sation plan in accordance with the criteria set 
out in Article 3 of Regulation (EC) No 1251/99 which ai ms to define, insofar as is possible, distinct 
homogeneous areas. The average yields may be m odulated in order to take account of possible 
structural 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; 
 
 - yields for a single region may be broken dow n 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 Stat es 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 ma ize or irrigated crops where a yield higher 
than that for other cereals is applied to these produc ts. 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 th e area payment is applied for (including that on 
set-aside) the "COP" (cereals, oilseeds, protein pl ants, linseed, fibre flax and fibre hemp) and areas 
declared as fodder areas is greater than the regiona l 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 producti on 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 pr oportion 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 the above 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 63,00/t. taken into account  partly the intervention price reduction. G/SCM/N/123/EEC 
Page 18  
 
  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 reaches 3.19 
million hectares for traditional regions. The supp lementary aid for traditional zones, which was 
introduced because of the alignment of intervention pr ice for durum wheat to other cereals, was cut to 
EUR 344,50/ha (not to be regionalised). 
 For certain non-traditional areas (France, Sp ain, 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. 
Oilseeds
 
 
 The products covered are rape sunflower and soya. 
 The Community market is essentially free. Impor ts 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 histor ical yields defined in the regionalisation plan 
excluding maize where maize is treat ed 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 oilsee ds yields of the existing regionalisation plans, 
multiplied with 1.95. 
Protein crops, linseed, flax and hemp  
 
 The products are covered are: 
 - peas (excluding chick peas), beans and sweet lupines 
 - non-fibre flax seed (linseed)  - fibre flax and fibre hemp 
 The Community market is essentially free. Impor ts 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 acco rding 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 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.  G/SCM/N/123/EEC 
 Page 19 
 
 
  This compensation is also payable on land voluntarily set aside in excess of the obligation, 
subject however to a ceiling set by the Member Stat e (which may not exceed th e 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 pr oduced on set aside land may not exceed one million 
tonnes per annum, in terms of soya bean meal equi valent, for animal or human consumption produced 
on set-aside land from rape, colza, sunflower and soya. 
 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 yiel ds 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 has been  set at 150 EUR/t since the beginning of the 
2004/05 marketing year.  
 The intervention agencies are obliged to buy in any rice ha rvested in the Community and 
offered to them, provided offers are made during th e open period (April-July) and comply with certain 
conditions, in particular in respect of quality a nd quantity. The quantities that can be bought by the 
intervention agencies are limited to 75,000 tonnes per year.  
 The intervention buying-in price is fixed for a given standard quality. If the quality offered 
differs from the standard quality, the price is ad justed 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. 
(b) Direct aids  
 
 Following the CAP reform in 2003, compensatory payments for rice are replaced by a two-fold measure: 
 a) rice will be included in the single paym ent regime, so rice producers will receive a 
decoupled aid per hectare as an income payment. 
 b) an area payment per hectare of cultivated  rice is granted in order to maintain rice 
production. This coupled aid is limited by national base areas, which can be 
regionalised. If the base areas are overrun,  the aid is reduced accordingly. 
The national base area for each producer Member State is established:  -  Spain:  104,973 ha. 
 -  France 
  - metropolitan territory:          19,050 ha. 
  - French Guyana      4,190 ha. G/SCM/N/123/EEC 
Page 20  
 
  -  Greece:    
  - traditional zones     20,330 ha.               -  Italy:    219 588 ha.  -  Portugal:     24,667 ha. 
 
(b) Production refund
 
  A production refund is paid to users of rice st arch 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 se ctor.  The refund is variable and is currently calculated so as to 
align prices of Community raw materi als with the world market level. 
 
(iii) "DAIRY PRODUCT" SECTOR 
(a) Intervention measures
 
 
 Each year an intervention price is fixed for bu tter and skimmed milk powder and the national 
intervention agencies buy in, following the rules as in dicated below, any such products of the Community 
origin which comply with certai n quality and packaging conditions. 
  The intervention prices fixed for the last few marketing years (1 July to 30 June)  were as 
follows: 
   
Intervention price valid for 2004/05 2003/2004 2002/2003 2001/2002 
1. Butter 305,23 328,20 328,20 328,20 
2. Skimmed milk powder 195,24 205,52 205,52 205,52 
 
 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 unde r a tendering procedure. Butter is bought in at a 
maximum price that is fixed in relation with the bi ds received by the Commi ssion, but not lower than 
90 per cent of the full intervention price. As from 1 March 2004 butter is only bought into public storage 
at 90 per cent of the intervention price during the period 1 March to 31 August. Where the quantity 
offered to intervention during th is period exceeds 70,000 tonnes1,  the obligatory intervention may be 
suspended and buying-in may be carried out under a tendering procedure.  Skimmed milk powder can 
only be bought between 1 Ma rch and 31 August each y ear. Purchases can be susp ended when the annual 
quantity offered reaches 109,000 t onnes and then be carried out under a tendering procedure.   
 
(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; 
 
                                                     
 
1 The quantity of 70,000 tonnes for 2004 is reduced by 10,000 tonnes per year until reaching 30,000 tonnes 
in 2008.   G/SCM/N/123/EEC 
 Page 21 
 
 
  - for certain cheeses : Grana Padano aged at least nine months old, Parmigiano-Reggiano 
aged at least 15 months old and Pr ovolone 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 type and of certain goat or ewe milk 
cheeses. 
 (c) Aid for skimmed milk for animal feed
 
  Aid is granted for skimmed milk powder intended  for animal feed. 
 
 The milk powder must be either directly dena tured or incorporated in some compound feeding 
stuff 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  and 
caseinates, provided both the milk and the casein produced from it comply with certain conditions. 
 (e) Other measures
 
 
 - 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 a nd for direct consumption by certain categories 
of persons or institutions. 
  - In order to encourage consumption by young pe ople, aid is granted to Member States which 
operate an aid programme for milk  distributed in schools so that  pupils can obtain milk at a 
reduced rate. 
 
(f) Additional levy payable by pr oducers or purchasers of cows' milk
 
  The additional milk levy scheme, introduced in 1984, is designed to reduce the imbalance 
between supply and demand for milk and milk products.  
 Starting on 1 April of each year, and renewe d in 2004 for eleven consecutive periods of 
twelve months, Member States collect a levy from farmers on quantities of cow's milk or other milk products marketed during the relevant twelve-m onth period in excess of the maximum reference 
quantities allocated to each Member State.    The levy is administered separately for tw o types of activity, one for deliveries to an 
undertaking approved by a Member State and the ot her for direct sales to the consumer. When the 
Member States exceed their national reference quan tity producers who contributed to the overrun pay 
the proportional levy. The revenue of individual le vies is for 99 per cent transferred to the European 
Agricultural Guidance and Guarantee Fund (EAGGF). 1 per cent can be withhold to solve difficult 
cases. 
 
 The Council has fixed the corresponding quantiti es for each Member State. Until the quota 
year 2003/2004 the rules were fixed by Regulation (EEC) No. 3950/92 (OJ L405 of 31.12.92). As from 1 April 2004 the rules are fixed by Regulation (EC) No. 1788/2003 (OJ L270/123 of 21.10.2003) lastly amended by Regulation (EC) No 2217/2004(OJ L375 of 22.12.2004). G/SCM/N/123/EEC 
Page 22  
 
  
 For the quota years 2002/2003 and 2003/2004 th e milk quota quantities were respectively 
117.6 and 117.7 million tonnes for deliveries and 1.3 and 1.2 million tonnes for direct sales. 
  Since 1 May 2004 10 New Member States joined the EU. For the quota year 2004/2005 
starting on 1 April 2004 the total quantity of milk quo ta is 137.34 million tonnes. The total quantity is 
split-up in 134.87 million tonnes for deliveries and 2. 47 million tonnes for direct sales. In case of non-
respect of the milk quota for the quota year 2004/2005 the levy for 100 kg of milk is set at EUR 33,7.”  (g) Dairy premium and additional payment
 
 
 From 2004 to 2007 milk producers are entitled to a dairy premium which as a general rule is 
calculated on the basis of the individual reference qua ntity for milk and a rate of 8,15 €/t for the year 
2004, 16,31 €/t in 2005 and 24,49 €/t in 2006 and 2007,  reflecting the reduced market support through 
the intervention measures. 
 Furthermore, equally from 2004 to 2007 Member  States shall within a specific financial 
framework as set out in article 96 of Regulation (EC) No 1782/2003 make additional payments to 
milk producers in their respective territory by following objective criteria while ensuring equal 
treatment. 
 The direct payments referred to above may be dealt with by Member States either through an 
immediate (as from 2005) decoupled system or through an initial coupled system. 
(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 ag encies to buy in Community olive oil offered, was abolished. 
 
 Instead, a private storage system was put in place that allows market operators to store 
quantities for relatively long periods if the market ba lance is disturbed.  The quantities to withdraw 
from the market and the aid to be paid are determined by tender.  2. The maximum guaranteed quan tity (MGQ) of 1.35 million tonn es was increased in 1998/1999 
to 1,777,261 t and distributed among the producing Member States.  These National Guaranteed 
Quantities (NGQs) are dist ributed 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 pe r cent is distributed among those Member States 
which have exceeded their NGQ.  3. Aid to the producers of olive oil is grante d 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 produc tion aid. The aid is designed to contribute to  G/SCM/N/123/EEC 
 Page 23 
 
 
 establishing a fair income for producers. For Member  States who wish, an aid to the producers of 
table olives can be granted.  The quantities bene fiting 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 desi rable 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 a nd which was designed to facilitate the marketing 
of the Community olive oil, has been abolishe d as from 1 November 1998. The representative market 
price as well as the consumption aid scheme, have been abolished.  6. Export refunds are foreseen in the olive o il 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 price Production aid 
Production aid for small producers 
Representative market price Consumption aid 383,77 
- 
132,25 
- 
- - 383,77 
175,16 142,20 
151,48 
229,50 
   12,07 383,77 
- 
132,25 
- 
- - 383,77 
- 
132,25 
- 
- - 
 7.  Production refund is granted for olive oil u sed 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 pr ices, the quality of oil th ey that they use most 
frequently for their manufacturing.  
 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 s ugar 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 ar e also fixed for each of the deficit areas. 
 The intervention price is fixed for a standard qu ality; if the quality of sugar is different, the 
price is adjusted in accordance with  a scale of increases or reductions. G/SCM/N/123/EEC 
Page 24  
 
  In addition, an intervention price derived fro m 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, the basic price for a specific delivery stage and a specified standard quality has been 
set at 47.67 EUR/tonne for the period 2001/02-2005/06. This price has been fixed taking account of the intervention price for white s ugar and of national values representi ng in particular the processing 
margin, yield, and undertakings' receipts from sales of molasses.  In addition, for the said period a 
minimum price has been fixed for A beet (2) - at 46.2 EUR/tonne and for B beet (3) at 32.42 EUR/tonne.  
 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 inte rvention price of white sugar has been fixed, 
these minimum prices are increased by an amount repr esenting the effects of regionalization of prices. 
2. Production levies
 
  Levies are calculated as to cover the global loss, which is calculated based on the average 
export refund multiplied by the exportable surplus (production less consumption). The amount of the 
levy is set every year by the Commission based on st atistical data for the relevant factors. 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). The levies are collected by the Member States.  
 If this first levy is not enough to cover the financial losses in question, a second levy, that may 
not exceed 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).  
 (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. 
3. Intervention measures  
 
(a) Production refunds are granted on sugar used in the chemical industry so th at these industries can 
operate in similar conditions that  those being supplied in sugar from the international market. 
These production refunds are charged to the producers and covered by the levies they pay  
 
(b) Disposal aid (transport, refini ng) is granted on raw sugar produced in the French overseas 
departments in order to ensure that it has the sa me conditions of refinery access as preferential 
sugar (ACP countries and India). 
  Either a refining aid or a corresponding tariff adjustment is granted on all raw preferential and 
special preferential sugar refined in the Community.   G/SCM/N/123/EEC 
 Page 25 
 
 
 (vi) "BOVINE MEAT" SECTOR 
1. In the bovine meat sector an intervention pr ice is fixed each year valid for the reference 
quality for slaughtered adult male bovine animals. 
 Market price quotations and public interven tion buying-in are based on the Community scale 
for classification of adult bovine carcasses. 
 In the marketing year 2000/01 the interven tion price has been 342.20 EUR/100 kg carcass 
weight and in 2001/02 301.30 EUR/100kg. The publ ic 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). The amount 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 provi ded in case of a very severe decrease in the 
market prices, i.e. the average market  price in a Member State, or a re gion thereof, has to fall below 156.0 
EUR/100 kg during two consecutive weeks.  2. Price support regime
 
  The European Community has introduced me asures 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 pric es 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. Carcass Under regular tendering 
procedures Under safety net 
Community market price 
 Member State market price 84% 
 
80% 78% 
 
60% 
  The reorientation measures adopted in the bovi ne meat sector also include a substantial 
reduction in the level of price support.  This is off set by the grant of direct income support, which is 
not tied to the level of production, appli cable as from 1 January 1993, and subject to: 
 - At farm level, a density threshold in lives tock units (LSU) per hectare of forage area; 
and G/SCM/N/123/EEC 
Page 26  
 
  - 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, LSU/ha. 
 In 2002: 1,9 LSU/ha.  From 2003: 1,8 LSU/ha.  The density requirement does not apply, however, to holdings with less than 15 LSU.  In addition, a supplementary extensification pr emium of EUR 36,23 per eligible head may be 
granted when the stocking density is lower than 1,4 LSU/ha.  As from 1997, th is supplementary premium 
amounts to EUR 36,00 and to EUR 54,00 when th e 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 numb er slaughtered during the year, an additional 
deseasonalization premium of a decreasing amount of EUR 72.45 to EUR18.11 per head may be 
granted for 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 breeder s 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 144,0 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 laggi ng (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.  G/SCM/N/123/EEC 
 Page 27 
 
 
  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 price stands at 150,94 EUR/100 kg (Reg. 2759/75).  
2. Intervention measures may be taken in form of  aid for private storage, which is granted to 
operators satoring pigmeat on their own expen se. This measure may be taken when, on the 
representative markets in the Community, the averag e Community price for pig carcasses is less, and 
is likely to remain less, than 103 per cent of the basic price. 
 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 a nd goatmeat is governed by Regulation (EC) 
No 2529/2001. However, the arrangements concerning direct payments below have been altered by 
the 2003 agricultural reform under Regulation (EC) No  1782/2003, particularly in the sheep and goat 
sector. The premiums are paid under the general conditions  laid down in Chapter 11 of Title IV of that 
Regulation. 
A. Direct Payments 2002-2004 (for some Member States until 2005 or 2006 included) 
  - Non-milking ewe premium   -  Milking ewe premium  
 -  She-goat premium  
 -  Supplementary premium   -  Additional payments  B. Direct Payments under CAP refo rm (2005, 2006 or 2007 onwards)  
 
 Member States can opt of fully decoupled or partially coupled systems. 
 Under the reform Member States may distribute in the form of premiums coupled with 
production up to 50 per cent of the aids paid to pr oducers in the sheepmeat and goatmeat sector during 
the reference years 2000, 2001 and 2002. If that is the case, the premiums are paid under the conditions laid down in Chapter 11 of single farm  payment regulation and the unit amount of the 
premiums is determined in relation to number of el igible females in the reference period and to the 
premium level of 2002. The conditions are practica lly the same as those set out in the "direct 
payments" chapter of the previous regi me combined with a financial ceiling. 
C. Direct Payments under the SAPS and top-ups regime (most of the new Member States only, 
period from 2004 to about 2007 or 2008) 
 
 Most new Member States have adopted a simplified scheme under the single area payment 
scheme (SAPS). In addition, supplementary direct support (“top-ups”) may be authorised. G/SCM/N/123/EEC 
Page 28  
 
 D. Direct Payments under the POSEI regime (period 2005 onwards) 
  For 2005 and subsequent years overseas territori es or outermost regions have a financial 
ceiling for establishing their direct support measures.  
E.  Trade with third countries 
 
 The European Community has opened tariff quot as 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 framewo rk of the GATT and other agreements. 
 Tariff quotas are allocated on a first-come, firs t-served basis or accord ing to a simultaneous 
examination or traditional/new arrival method. Th e adoption of this quota management method in 
2003 and 2004, however, was made without impact on the real trade pattern that existed under the 
previous import licensing system. 
F.  Private storage 
 
 The Commission may decide to grant private stor age 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. 
(ix) "FRUIT AND VEGETABLE" SECTOR 
(a) Measures to promote the formation of producers' organisations
 
  In order to encourage the formation of produ cer organisations and f acilitate their operation, 
aid can be granted to such organisations est ablished on the initiative of producers.  These 
organisations are to promote the concentration of supply, its adjustment to demand, the 
implementation of environmentally sound practices, the regularisation of prices at the producer stage 
and to make suitable technical means ava ilable 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 ) an investment aid, either by  special loan or 
in capital grant, to cover part of the investment costs  required to attain recognition. 
2. After recognition, a final assistance limite d to 50 per cent (60 per cent under certain 
conditions) of the actual expenditure of th e operational funds, capped at (the most) 4.1 per cent of the 
value of the marketed production of each PO.  T hose 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, appl es, pears, lemons, oranges, mandarins, clementines 
and satsumas) producer organisations can deci de to withdraw products from the market.   G/SCM/N/123/EEC 
 Page 29 
 
 
  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 th e fresh market, an aid 
is granted to producer organisations for the qua ntities 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; 
 - Aid to improve varieties and cultivation and modernise marketing under a ten year 
plan to be presented by producers' organisations; 
 - Participation in promotion drives orga nised in collaboration with the various 
economic operators in this sector. 
 This aid is granted to the producers' organisa tions only to the extent that they furnish a 
substantial proportion of th e 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 produ cers' organisations and f acilitate their operation, 
aid can be granted to such organisations est ablished 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 tec hnical 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 pe r cent, 3 per cent, and 2 per cent of the value of 
the production marketed, for each successive year, pr ovided 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 is limited to an annual maximum of 854.000 tonnes for all EC producers. G/SCM/N/123/EEC 
Page 30  
 
  This compensation is calculated as the differen ce between a "flat-rate reference income" and 
the "average production income" at ex-packing st ation stage obtained on the Community market 
during the relevant years for bananas produced an d marketed within the Community. The reference 
income is currently fixed at EUR 640,30/t ex packing station. In 2003 the aid amounted to EUR 295/tonne for a total of 754.216 tons. In 2004 the aid was fixed at 281 EUR/t for a total of 
750.909 tonnes. A supplementary aid is also granted to regions that have experienced significantly 
severe market circumstances. This supplementary aid is decided on a yearly basis. In 2003 and 2004 a 
supplementary aid was paid to producers of Martin ique and Guadeloupe in the French West Indies, 
for an average amount of 51,5 EUR/t in 2003 and of 78,9 EUR/t in 2004.  
(xi) "PROCESSED FRUIT AND VEGETABLES" SECTOR 
Production aid
 
  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 conclude d before the marketing year, between POs and 
processors. The amount of aid has been fixed at EUR 34,50/tonne for tomatoes, EUR 47,70/tonne for 
peaches and EUR 161,70/tonne for pears 
 For each of these products, Community and national processing thresholds have been 
established as follows (Net weight fresh product, in tonnes) : 
 Tomatoes Peaches Pears 
Community threshold 8 251 455 539 006 104 617 
National 
thresholds 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 - - 9 
 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 marketi ng 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. . Fo r example, due to such an overrun for the 2002/03 
marketing year in the pears sector, the aid fi xed for Greece, Italy and France for the 2003/2004 
marketing year shall be decreased by 51,1 per cen t, 24,4 per cent and 3,4 per cent from the level 
above mentioned. 
(a) 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 expor ting third countries. For the 2002/03 marketing year, these 
amounts have been fixed as follows:  G/SCM/N/123/EEC 
 Page 31 
 
 
  
(EUR/tonne) Dried figs Prunes 
minimum price 878,86 1935,23 
production aid 286,0 671,73 
 
(b) An aid is granted for the cultivation of gr apes intended for the production of dried grapes of 
the sultana and Muscatel varieties and currants. Th e amount of this aid is fixed per hectare of 
specialised area harvested. A maximum guarant eed Community area has been fixed at 53 000 
hectares. 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 accordi ng 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. 
 (c) During the last two months of a marketing year, "Storage agencies"  may buy-in sultanas, 
currants and dried figs produced in the Comm unity. 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, th ese amounts have been fixed at the following 
levels : 
 
 Dried grapes Dried figs 
Buying-in price 
(EUR/tonne) 445,65 542,70 
Storage aid 
(EUR/tonne/day 0,1405 until 28.2.2003, 
0,1144 from 1.3.2003 0,1261 
 
(xii) "WINE" SECTOR  
 On 1 August 2000 the reform of the common orga nisation on the market in wine entered into 
force (Council Regulation (CE) N° 1493/99 2). 
 The main changes, compared to  the former market organisation3, concern the abolishment of 
any guide prices and a reshaping of distillation meas ures. 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 im plementing provisions for the market mechanisms 
are laid down in Commission Regulation (EC) N° 1623/20004, as last modified by Commission 
Regulation (EC) N° 616/2005.5 
 Furthermore the structural measures  in the wine sector have been  reinforced under the reform 
by introducing a scheme for restructuring and conve rsion of vineyards. The concrete implementing 
provisions for the structural measures are laid down in Commission Regulation (EC) N° 1227/2000 6. 
                                                      
2 JO L 179 of 14.7.1999, p.1  
3 Reg (CEE) 822/87, JO L 84 of 27.3.1987, p.1  
4 JO L 272 of 10.10.2002, p.15  
5 JO L 103 of 22.4.2005, p.15  
6 JO L 143 of 16.6.2000, p.1  G/SCM/N/123/EEC 
Page 32  
 
 1. Aid for private storage of table wine s 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 gr ape must and 0,06152 € for concentrated and 
rectified grape must. 
  The first day of storage may not be later than  16 February and storag e 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 dist illation measures only tw o 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 Ar t. 27 of Council Regulation (EC) 1493/1999 is to 
avoid overpressing of grapes and thus manufacture of  poor quality wines. The price to 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 vary ing between 0,777 
€/°Vol/Hl and 0,8453 €/°Vol/Hl depending on the type of product they dis til. 
 
- Distillation of wine from dual-purpo se grapes (Art. 52-57 of Reg.1623/00) :  
  This measure under Art. 28 of Council Regu lation (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 Charen tes 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 quantities tr aditionally vinified ha ve 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 0,8453 €/°Vol/Hl and 0,7728 €/°Vol/Hl depending on the type of product they distil. 
 
 The price to be paid to distillers for raw al cohol, 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 
  G/SCM/N/123/EEC 
 Page 33 
 
 
  (b)   Optional Distillation 
  Two new measures that have been introduced  in the common organisation are intended to 
allow a more flexible and targeted r esponse to the actual market situation 
 
- Distillation into drinkable alcohol (Art. 63-64 of Reg.1 623/00, modified by Reg.  1795/2002)
: 
  The first optional measure is a distillation schem e for table wines to facilitate delivery to the 
traditional drinkable wine alcohol market. (d istillation under Art. 29 of Council Regulation 
(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 be tween 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 since the wine year 2002/2003 at 0,00 042 € per °Vol per hl of product and per day. 
 
 This measure shall be opened each year between October 1st and December 15
th. Since the 
marketing year 2002-2003 its volume was limited to 25 per cent of the highest volume of wine produced by each individual produ cer 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 mark et disturbance caused by serious surpluses and 
/or problems of quality". The measure can be lim ited to certain categories of wine or certain 
areas of production but may also include quality wine. During the marketing year 2002/2003 and 2003/2004 no requests for Crisis Distillation were received.  
 
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. The aid was 
fixed, per degree of potential alcoholic strength per hectolitre as follows:    for concentrated grape must prepared from gr apes originating in the wine-growing zones C III 
(a) and C III at 1,699 €/°Vol/Hl, and prepared fro m grapes originating in other zones at 1,446 
€/°Vol/Hl; 
  for rectified concentrated grape must prepar ed 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 1,955 €/°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 by art. 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.  
 G/SCM/N/123/EEC 
Page 34  
 
  (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  
 
II. Structural measures 
 
1. Abandonment premiums  
  Premiums for permanent abandonment of vine yards have been main tained. Member States 
may determine the eligible areas and conditions fo r the implementation of this measure, including the 
amount of the premium. EU legislation sets maxi mum amounts for financing at Community level. 
 
2. Restructuring and conversion
 
  In order to assist further the adaptation of s upply to market needs, a scheme for restructuring 
and conversion of production potential, both in te rms of quality and quantity, was introduced under 
the reform. Member States have to determine th e regions, types of production eligible and the 
amounts of these aids. Wine producers receive up to  50 per cent of the restructuring or conversion 
costs (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.   Decision 2004/688/EC laid down the fi nal allocation for 2003/04 as follows: 
7: 
 
Member State Superficies (Ha) Allocations  (Euro) 
Germany 2.198 13.989.772 
Greece 1.519 7.176.037 
Spain 22.482 152.001.024 
France 21.058 111.840.613 
Italy 17.990 120.341.710 
Luxembourg 10 81.856 
Austria 1.837 7.798.847 
Portugal 4.854 29.967.725 
Total  71.948 ha 443.197.584 € 
 
(xiii) "TOBACCO" SECTOR 
 The reform of the sector, adopted by the C ouncil on 3 June 1992 radically changed the system 
regulating tobacco, suppressing the intervention and e xport subsidies and the replacing target price by 
a system of premium and guarantee thresholds. 
                                                      
7 JO L 201 of 9.8.2000, p.4   G/SCM/N/123/EEC 
 Page 35 
 
 
  The reformed market organisation regulat ed by Council Regulation (EEC) No. 2075/92 
divides raw tobacco into eight variety groups (Flue cure d, 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: 
                             (EUR /Kg.) 
I 
Flue 
cured II 
Light air 
cured III 
Dark air 
cured IV 
Fire cured V 
Sun 
cured VI 
Basmas VII 
Katerini VIII 
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 sout hern 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 hybrids 
Paraguay and its hybrids, Dragon vert and its hybrids 
Phillippin, Petit Grammont (Flobecq), Semois, Appelterre 
 EUR/kg. 
 
0.5509 0.8822 0.5039 0.4112 
0.4112 
 
 (b) Guarantee thresholds
 
 
 In 1992, the Council replaced the global guarant eed maximum quantity system by  guarantee 
thresholds fixed by variety and by Member State. 
 The quantities produced in excess of the thres holds are not eligible for the premium. 
 The guarantee thresholds for the 2003 and 2004 crop were fixed as follows:  G/SCM/N/123/EEC 
Page 36  
 
  I II III IV V                               Others  Total 
 Flue 
cured Light air 
cured Dark air 
cured Fire cured Sun 
cured VI Basmas VII Katerini VIII 
Kaba 
      Koulak 
Italy 48,263 47,689 15,682,
900 6,255 8,833 498  127,220
Greece 35,242 11,842  6,938 27, 114 24,014 16, 696 121,846
Spain 29,028 5,545 6,388 30   40,991
Portuga
l 4,906 1,028    5,934
France 10,490 9,262 5,170   24,922
German
y 4,728 2,588 3,731   11,047
Belgiu
m  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. 
(xiv) "TEXTILE FIBRES" SECTOR 
1. COTTON
 
  The Council Regulation (EC) No 1051/2001 on production aid for cotton applies till the 
marketing year 2005/2006. Aid per tonne of unginned  cotton is equal to the difference between an 
objective price per hectare and the world market pr ice calculated by the Commission, provided that 
the producer received a minimum price per tonne of ungi nned cotton. Moreover, the aid is paid only if 
the products are of sound and fair merchantab le quality. A NGQ’s of 1,031,000 tonnes distributed 
between Greece (782,000 tonnes) and Spain (249,0 00 tonnes) were establis hed. In case the NQG has 
been overshot, the Commission reduces the guide pri ce. In addition, Member States are required to 
take the environmental measures and to determine a sanction arrangement and to take the measures 
necessary to ensure their implementation. 
 The last modification of the regime of cotton was introduced by Council Regulation (EC) No 
1782/2003. As from 2006 the cotton producers would benefit from decoupled aid and from a crop specific payment under certain conditions. Decoupled aid will be incorporated into the mechanism 
applicable to the single payment and will not be subordinated to the exercise of an agricultural 
activity, but to maintenance of the equivalent la nd in a good environmental and agricultural condition. 
 With regard to coupled aid, or crop specific  payment, an amount will be granted per hectare 
maintained at least until the boll opening under nor mal growing conditions. If the eligible cotton area 
exceeds the basic area, aid is reduced proportionally to the overshot.  
 In addition, approved inter-bran ch organizations can be made up to ensure the ginner receives 
supplies of satisfactory quality of cotton. These orga nizations may decide that a maximum of half of 
the total amount of the aid to which its member pr oducers are eligible is differentiated according to a  G/SCM/N/123/EEC 
 Page 37 
 
 
 scale concerning in particular the quality of the u nginned cotton to be provided. Member farmers of 
the organization shall be granted an additional aid of 10 €.   
 
Decoupled aid Coupled aid Country Area (Ha) Aid (€/ha) Area (Ha) Aid (€/ha) 
Greece Reference period 966 370,000  - 594       for 300,000 ha  
 - 342.85  for 70,000 ha 
Spain Reference period 1,509 70,000 1,039 euro 
Portugal Reference period 1,202 360 556 euro 
 
2. FIBRE FLAX AND HEMP  
  After the deep reform of 2000, the support m easures in this sector comprise a payment for the 
producer of the straw of flax and hemp and an aid for the processor of the straw into fibre. 
(1) Production aid
 
 
 Flax and hemp grown for fibre are included in to the general support system for producers of 
certain arable crops since the 2001/2002 marketing year . Therefore, an aid is granted in the form of 
payment per hectare at the same level and on the same terms than for other arable crops.   
 Likewise, after the new Single payment schem e come into force, surfaces under flax and 
hemp grown for fibre will be eligible for this new regime, as well as for the optional arable crops area 
payment, in those countries where this measure is applied. 
(2)  Aid for processing the straw of flax and hemp into fibre  
  An aid for processing the straw into fibre is gran ted in order to ensure the maintenance of the 
economical activity in this sector. The aid is granted to authorised primary processors on the basis of 
the quantity of fibre actually obtained from straw.  Nevertheless, in cases where the farmer retains 
ownership of the straw, which he is having pro cessed under contract, and proves that he has placed 
the fibres obtained on the market, the aid is granted to the farmer. 
 A sale/purchase contract must be concluded betw een the farmer and the authorized processor. 
In cases where they both are one and the same person, the contract is replaced by a processing commitment. 
 The amount of the aid distinguishes between high quality long flax fibre and low quality 
fibres:  
1.  For long flax fibre:  EUR 100 for the 2001/2002 marketing year 
 EUR 160 for the 2002/2003 to 2005/2006 marketing years  
 EUR 200 from the 2006/2007 marketing year onwards 
 2.  For short flax and hemp fibre: 
 EUR 90 for the 2001/2002 to 2005/2006 marketing years.  The reason for the increase in long flax fibre payment is the comparable decrease of direct 
payment for farmers foreseen in the aid scheme fo r arable crops for those marketing years. The G/SCM/N/123/EEC 
Page 38  
 
 continuance of the short flax and hemp fibres pa yment beyond the 2005/2006 marketing year will be 
examined at the end of 2005. 
 The aid is granted within a maximum guara nteed quantity per marketing year of 80 823 
tonnes for long flax fibre and 146 296 tonnes for short flax and hemp fibre. These amounts are 
apportioned among the Member States as national guaranteed quantities 
3. SILKWORMS
 
  Community regulations in the silkworm-rear ing sector include the following measures: 
 (a) Production 
aid 
 
 Aid for silkworms, reared in the Community, ha s 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.  The aid is given to the rearer who successfully rears silkworms.  
 Since 1999/2000, the aid is fixed at 133.26 EUR/box   
  In the context of 2000/2001 package prices, th e Commission has contin ued the multi-annual 
approach followed for Agenda 2000 and previous refo rms 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 drie d fodder sector covers the following products: 
dehydrated fodder, the principal leguminous ve getables, 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 lim its of Maximum Guaranteed Quantities (MGQ) for 
both types of fodder. 
 These MGQs are the following:  - Dehydrated fodder: 4,412,400 tonnes 
 - Sun-dried fodder: 443,500 tonnes 
  The MGQ is the sum of the Nati onal Guaranteed Quantities (NGQ).  G/SCM/N/123/EEC 
 Page 39 
 
 
  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
 
 Among the new Member States that have joined the Community on 1 May 2004, the following 
NGQs have been attributed  for dehydrated fodder: 
 
Member States  National Guaranteed Quantities (in tonnes) 
 Dehydrated fodder Sun-dried fodder 
Czech Republic 27,942 - 
Lithuania 650 - 
Hungary 49,593 - 
Poland 13,538 - 
Slovakia 13,100 - 
 
 As a consequence of the enlargement, as from marketing year 2004/2005 the MGQ for dehydrated fodder will be 4,517,223 tonnes instead of 4,412,400 t. 
 
 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 Stat es; moreover, supplementary reductions are G/SCM/N/123/EEC 
Page 40  
 
 applied 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 si nce 1 May 1972 and applied from 1 July 1972, a 
production aid is granted for certain types of seed: rice seed and seeds of sp elt wheat, oilseeds, and 
seed of fodder leguminosae and gramineae. 
 When the market situation does not ensure an ad equate income to the producer, an aid can be 
granted. It consists of EC wide rates for each sp ecies or group of species.  It is fixed by quintal 
(100kg) of produced certified seeds, taking into acc ount the market situation and the prices on the 
external market. 
 Aid is fixed for two marketing years with the po ssibility 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 2003/2004and 2004/2005 is as follows:                  (EUR/100 kg.) 
Products 
 
1. Cereals (rice, spelt)  2. Oilseeds (flax,hemp)  
3. Gramineae 
 4. Leguminosae  2003/2004 and 2004/2005  
 
between 14.37 and 17.27 
  
between 20.53 and 28.38 
 
between 21.13 and 83.56 
 
between 0 and 75.11 
  For rice seed a maximum guaranteed quantity is established since 1998. In 2002 a stabiliser 
mechanism including a maximum guaranteed quantity for which the Community aid is payable for 
seeds other than rice seeds was introduced. The overall quantity was fixed at 305.754 tons and 
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. In 2004, upon accession of the 10 new Member States, the 
total ceiling was increased to 332,841 tonnes. 
(xvii)  "HOPS"  SECTOR 
 In order to ensure a fair income for hop producers, the Community regulations provide for an 
aid per hectare.  The Council fixed the aid at 480.00 EUR /ha for the harvests 1996 to 2004 included, with no distinction between the various groups of va rieties 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 varietal conversion.  
  G/SCM/N/123/EEC 
 Page 41 
 
 
 VI. INDUSTRY 
A. COMMUNITY FRAMEWORK PROGRAMMES IN THE FIELD OF RESEARCH  
 There are two framework programmes: 
  -  the sixth framework programme of the European Community for research, 
technological development and demons tration activities (2002-2006), and 
  - the sixth framework programme of th e European Atomic Energy Community 
(EURATOM) for research and training activities (2002-2006). 
 
1. Policy objective and/or purpose of the programme
 
 Financial participation in Community r esearch and technological development (RTD) 
activities during the period 2003-2004 is provided through the two above-mentioned framework programmes.  
 The legal bases of these programmes are, resp ectively, Article 166 of the EU Treaty and 
Article 7 of the Treaty establishing the European Atomic Energy Community. 
  The sixth framework programme of the Europ ean Community is aimed at strengthening the 
scientific and technological bases of Community industry, encouraging the development of its competitiveness and contributing to the implementa tion of the other Community policies under the 
Treaty. These objectives and the activities to be unde rtaken are stated in the Treaty and further 
implemented through the Decision adopting this  framework programme (Decision N° 1513/2002/EC 
of 27 June 2002
8). 
  The framework programme of th e European Atomic Energy Co mmunity has two main parts: 
nuclear fission and controlled thermonuclear fusi on. The objectives and activities to be undertaken are 
set out in the Decision adopting this framewo rk programme (2002/668/Euratom of 3 June 2002
9).  
  The activities under the two framework programmes relate to fundamental  research, industrial 
research or pre-competitive development. Fina ncing 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.10 
  Community support to RTD activities is provided in the form of financing ("grants" within 
the meaning of Article 25.3 of the WTO Agreem ent on Subsidies and Countervailing Measures) 
granted to projects following, as a general rule , an invitation for proposals and an evaluation 
procedure with independent experts and selection procedure.  
 
                                                     
 
8 OJ L 232, 29.8.2002, p. 1  
9 OJ L 232, 29.8.2002, p. 34  
10 All these are published in the OJ L 294 of 29.10.2002.  G/SCM/N/123/EEC 
Page 42  
 
  Research projects are carried out primarily by  participants established within the Community. 
Legal entities established in a country that has signed an association agreement (associated state) with 
the Community may participate in a project and receive Community funding from the sixth framework programme on the same grounds as tho se established in Member  States. Legal entities 
established in countries targeted by the intern ational cooperation activities of the framework 
programme may participate and receive funding un der certain sixth framework programme research 
projects. Legal entities established in countries that have signed a scientific and technical cooperation 
agreement with the Community may participate in  sixth framework programme research projects. 
Legal entities established in any ot her third country may participate in sixth framework programme 
research projects. Funding for legal entities in the la tter two categories may be provided if provision is 
made for this or if it is essential for carrying out the project.  
 
 Research projects must include the participa tion of at least three independent legal entities 
established in three different Member States or associ ated states of which two must be Member States 
or associated candidate countries. Partnerships usua lly include universities, research organisations and 
industry. 
  The European Commission is responsible fo r the implementation of the programmes.  
Contracts concluded with the Commission govern the rights and obligations of each partner (see 
http://europa.eu.int/comm/research/f p6/model-contract/index_en.html). 
 
3. Amount and duration of subsidy
 
2003-2004  Total amounts 
(in millions of Euros) 
Sixth framework programme of the European Community  for research, technological development and demonstration activities  8267 
Sixth framework programme of the European 
Atomic Energy Community (EURATOM) 636 
Total   8903 
 
4. Incidence on trade  
 The sixth RTD framework programmes have no di rect 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, access to the results can be shared among partners and information may be made more widely available under certain conditions, whic h serves the public interest.  One of the main 
benefits lies in establishing links among research co mmunity 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 further i nvestment is required after the end of the research 
projects to develop any competitive applications.  
B. R
ESEARCH ON COAL AND STEEL  
 The Treaty establishing the European Coal and Steel Community (ECSC) expired on 
23 July 2002. The remaining assets at the expiry of  the ECSC were transferred to the European 
Community and a common Research Fund for Coal and Steel (RFCS) was created, dedicated to  G/SCM/N/123/EEC 
 Page 43 
 
 
 research in the coal and steel sectors. The ac tivities carried out under this Fund are exclusively 
financed by the yearly returns generated by these assets.  
 The Research Programme of the Research F und for Coal and Steel was established by the 
Council Decisions 2003/76/EC, 2003/77/EC and 2003/ 78/EC of 1 February 2003, published in the 
Official Journal of 5 February 2003 (see OJ L 29/22, OJ L 29/25, OJ L 29/28). 
 The programme is closely co-ordinated with ot her activities, carried out either in the Member 
States or existing Community research programm es, such as the Framework Programme of the 
European Community for research, technological de velopment and demonstration activities. In order 
to increase the impact of this programme, the Eu ropean Commission will encourage and promote co-
ordination, complementarities and synergy betw een the different research programmes and support 
the exchange of information between projects fi nanced under this programme and those financed 
under the Research Framework Programme. 
 The programme related documents and the info rmation package are available on CORDIS at: 
http://www.cordis.lu/coal-steel-rtd/home.html  
 For coal and steel, the Community contributes financially in the following ways: through 
research, pilot and demonstration (RTD) pr ojects, accompanying measures and support and 
preparatory actions. 
(1)  Research, Pilot and Demonstration:  Research projects are intended to cover investig ative or experimental work with the aim of 
acquiring further knowledge. The financial contribution of the Community is up to 60 per cent of the 
allowable costs. 
 Pilot projects address the construction, operati on and development of an installation or a 
significant part of an installation on an appropriate  scale. These installations should have a sufficient 
scale for use. They should allow the investigation of potential for putting theoretical or laboratory 
results either into practice or to increase the relia bility of the technical and economic data needed to 
progress to the demonstration stage, and in certain cases to the industrial and/or commercial stage. 
The financial contribution of the Community is  up to 40 per cent of the allowable costs. 
 Demonstration project: aim at constructing and/ or operating an industrial-scale installation or 
a significant part of an industrial-scale installati on. Such projects aim to bring together all the 
technical and economic data in order to proceed with  the industrial and/or commercial exploitation of 
the technology at minimum risk. The financial cont ribution of the Community is up to 40 per cent of 
the allowable costs. 
(2)  Accompanying measures are designed to comp lement and/or co-ordin ate research activities 
related to this programme. 
(3)   Support measures: this includes the dissemina tion of research results, the promotion of the use 
of knowledge gained and the support of training and mobility of researchers.  
 It is worth noting that the results of all RFCS funded research projects are made public and 
can be acquired against a small fee by any organi sation or individual, as provided for under Article 4 
of annex III of the model contract. This allows fo r a wide and non discriminatory dissemination of the 
research results. 
 Total EC support provided to coal and st eel projects in the years 2003 and 2004 are: G/SCM/N/123/EEC 
Page 44  
 
  
Year Coal 2003 Steel 2003 Coal 2004 Steel 2004 
 
Support in  
Million of  € 16,132 43,676 15,266 43,610 
 
 C. A
ID TO THE COAL INDUSTRY  
 Aid to the coal industry within the European Union during the period 2003-2004 has been 
governed Council Regulation 1407/2002. 
1. Council Regulation 1407/2002 of 23 July  2002 on State aid to the coal industry11 
 With the expiry of the ECSC Treaty on 23 Ju ly 2002, all secondary legislation under the 
ECSC Treaty also automatically expired. This  included Commission Decision 3632/93/ECSC of 
28 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 particul ar 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 provisi ons of Article 88 EC Treaty and Council Regulation 
(EC) No 659/1999 also apply. 
 According to Council Regulation 1407/2002, di fferent categories of aid can be considered 
compatible with the common market: 
 
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. 
                                                     
 
11 OJ L 205 of 2 August 2002, p. 1   G/SCM/N/123/EEC 
 Page 45 
 
 
  -  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 justif ied grounds, until June 2004 to notify the 
Commission of the individual identities of production units forming part of a closure plan. For the countries which joined the European Union on 1 May 2004, this 
deadline was set at August 2004. 
 -  Member States shall notif y the Commission of the amount and full information about 
the calculation of the aid actually paid durin g a coal year not later than six month 
after the end of that year.  
 -  The Commission takes a decision in accorda nce with the rules of procedure laid down 
in Regulation (EC) No 659/1999 and in the light of the plans submitted.  
State aid authorized 2003 – 2004 (in millions €)
 
 
ECU/EUR million 2003 2004      
Germany 
- operating aid 
- aid for the reduction of 
activity - other  
2,570.0 
56,483 
770 2 045.3 
413.9 
557.4      
Spain 
- operating aid 
- aid for the reduction of activity 
- other  
not yet 
approved not yet 
approved      
France 
- operating aid 
- aid for the reduction of 
activity - other  
169 
84,500 
746 0 
86,6 
769,3      
United Kingdom 
- operating aid - aid for the reduction of 
activity 
- other  
0 0 
21,7  
0 0 
29,1      
Poland 
- operating aid 
- aid for the reduction of 
activity 
- other  
n/a not yet 
approved      
Czech Republic 
- operating aid 
- aid for the reduction of activity 
- other  
n/a not yet 
approved      
Hungary 
- operating aid 
- aid for the reduction of 
activity - other  
n/a not yet 
approved      G/SCM/N/123/EEC 
Page 46  
 
  
Slovak Republic - operating aid 
- aid for the reduction of 
activity - other  
n/a not yet 
approved      
EU TOTAL 
- operating aid - aid for the reduction of 
activity 
- other  
not yet known not yet 
known      
Aid in € per tonne for 
operating aid 
and aid for the reduction 
of activity n/a 
 not yet 
known      
 
 
Coal production and imports in the Community (EUR-15):  2000-2004  
(In million tonnes)  
 
Year                         Million tonnes 2000    203.2 2001    196.5 2002    191.4 2003 (est.)  184.9 
2004    n/a 
 
 
 VII. OTHER PROGRAMMES: 
A. SME
 AND ENTREPRENEURSHIP PROGRAMME  
1. Title of the programme  
 Multiannual programme for enterprise and entrepre neurship, and in partic ular for  small and 
medium-sized enterprises (SMEs) (2001-2005)  
2. Period covered by the notification
 
 1 January 2003 – 31 December 2004 
 3. Policy objective and/or purpose of the programme
 
 The programme holds the following five objectives: 
 
 1:  enhancing the growth and comp etitiveness of business in a knowledge-based 
internationalised economy; 
 2:  promoting entrepreneurship;  3:  simplifying and improving the administ rative 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 c oordination of these facilities.  G/SCM/N/123/EEC 
 Page 47 
 
 
  
 With these objectives the MAP is also supportin g the implementation of the European Charter 
for Small Enterprises.  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 financial 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 Smallerbusinesses. 
 
• SME Guarantee Facility
. It is designed to increase the ava ilability 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 ma nagers) 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 va riety 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 coordinati on with Member States, analyses 
and studies how to ameliorate the overall environm ent 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 2005 
 G/SCM/N/123/EEC 
Page 48  
 
 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  PROGRAMME  
1. Title of the programme  
  The Joint European Venture (JEV) Programme  
2. Period covered by the notification
 
  1 January 2003 – 31 December 2004  3. Policy Objective and/or purpose of the programme
 
 
 To provide financial contributions to sma ll and medium-sized enterprises (SMEs) for the 
setting-up of new transnational joint ve ntures 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).    This programme was closed by Decision 593/2004/ EC of the European Parliament and of the 
Council of 21 July 2004 amending Council Decision 2000/819/EC (OJ L268/3, 16.8.2004), fixing the 
closure date for applications as 29.12.2004.  5. Form of assistance granted - Grants from Community budget for:
 
  The Community contribution was intended to cover a part of the expenses incurred in the 
conception and setting-up of transnational joint vent ures.  The maximum contribution per project was 
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 Europ ean Union.  Applications were made to 
intermediaries, which were banks or other appropriate financial in stitutions.  The intermediaries 
(selected by a call for expressions of interest) were entrusted with the evalua tion of the applications 
and, in the event of a favourable opinion, made recommendations to the Commission.  
 
7. Total expenditure under the programme  
  The total amount committed for the progra mme was EUR 57 million but only about EUR 3 
million was disbursed for joint venture projects by end of 2004.   G/SCM/N/123/EEC 
 Page 49 
 
 
 8. Duration of the programme  
  1997-2004  9. Trade effects
 
 
 The JEV aid was never contingent on the sub sequent joint venture’s export intentions or 
capabilities. The information on the joint venture pa rtners’ past or future exports was 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 31.12.2004 only 163 Joint 
Venture projects have received support from the JE V programme, due to which the impact of this 
programme on trade has been negligible.   C. FIFG
  
1. Title of the programme  
 
 Financial Instrument of Fisheries Guidance (FIF G) – 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 fisher ies 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 for the restructuring of fishing fleets, aquaculture, processing and marketing circuits,  port 
facilities and socio-economic measures. 
 G/SCM/N/123/EEC 
Page 50  
 
 6. To whom and how the subsidy is provided
 
  Co-financing principle and principle of regionally diversified action.   Shipowners, enterprises, producer organiza tions, public and private bodies, professional 
organizations, cooperatives, fishermen. 
 7. Total budget of the programme
 
  Objective 1 Regions: 2000-2006: EUR  2.6 billion (0.403 billion EUR budgeted in 2000)  
 Other Regions: 2000-2006 : EUR 1.1 billion   
  2003 (all regions) : 578 MEUR,  2004 (all regions) : 629 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. C
OMMON 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
 
  The objectives of this instrument are the following:  
 - To stabilize to promote sustainable fishing and optimum use of fish products 
 - To stabilize the market  - To ensure a regular supply of high-quality products  - To guarantee reasonable consumer prices  - To 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, auto nomous withdrawal and carry-over, private 
storage aid, compensatory paymen t for tuna supplied to industry. 
  G/SCM/N/123/EEC 
 Page 51 
 
 
 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
 
  (EU-15) 2003 : 14,5 MEUR budgeted, 12,6 MEUR effectively disbursed  (EU-25) 2004 : 33,0 MEUR budgeted,  14.05 MEUR effectively disbursed 
 
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. The amounts paid  under the programme represent less than 0,002 per 
cent of the value of landed fish in the EC (EU-15). 
 
 
__________