# CE2012038EN.01000101.xml

| 11.2.2012 | EN | Official Journal of the European Union | CE 38/1 |
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11.2.2012

EN

Official Journal of the European Union

CE 38/1

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POSITION (EU) No 3/2012 OF THE COUNCIL AT FIRST READING

with a view to adoption of the Regulation of the European Parliament and of the Council amending Council Regulations (EC) No 1290/2005 and (EC) No 1234/2007 as regards distribution of food products to the most deprived persons in the Union

Adopted by the Council on 23 January 2012

(3/2012/EU)

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty on the Functioning of the European Union, and in particular the first paragraph of Article 42 and Article 43(2) thereof,

Having regard to the proposal from the European Commission,

After transmission of the draft legislative act to the national parliaments,

Having regard to the opinion of the European Economic and Social Committee (1),

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Having regard to the opinion of the Committee of the Regions (2),

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Acting in accordance with the ordinary legislative procedure (3),

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Whereas:

| (1) | Council Regulation (EEC) No 3730/87 of 10 December 1987 laying down the general rules for the supply of food from intervention stocks to designated organisations for distribution to the most deprived persons in the Community (4), which was subsequently repealed and integrated into Council Regulation (EC) No 1234/2007 of 22 October 2007 establishing a common organisation of agricultural markets and on specific provisions for certain agricultural products (Single CMO Regulation) (5), has provided a reliable scheme for the distribution of food products to the most deprived persons of the Union (food distribution scheme) for more than two decades and has positively contributed to the social cohesion of the Union by reducing economic and social disparities. |
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(1)

Council Regulation (EEC) No 3730/87 of 10 December 1987 laying down the general rules for the supply of food from intervention stocks to designated organisations for distribution to the most deprived persons in the Community (4), which was subsequently repealed and integrated into Council Regulation (EC) No 1234/2007 of 22 October 2007 establishing a common organisation of agricultural markets and on specific provisions for certain agricultural products (Single CMO Regulation) (5), has provided a reliable scheme for the distribution of food products to the most deprived persons of the Union (food distribution scheme) for more than two decades and has positively contributed to the social cohesion of the Union by reducing economic and social disparities.

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| (2) | The objectives of the Common Agricultural Policy (CAP) as defined in Article 39(1) of the Treaty include stabilising markets and ensuring that supplies reach consumers at reasonable prices. Over the years, the food distribution scheme has underpinned the fulfilment of both objectives and, by reducing the food insecurity of the most deprived persons in the Union, has proved to be an essential tool contributing to guaranting the broad availability of food within the Union while reducing intervention stocks. |
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(2)

The objectives of the Common Agricultural Policy (CAP) as defined in Article 39(1) of the Treaty include stabilising markets and ensuring that supplies reach consumers at reasonable prices. Over the years, the food distribution scheme has underpinned the fulfilment of both objectives and, by reducing the food insecurity of the most deprived persons in the Union, has proved to be an essential tool contributing to guaranting the broad availability of food within the Union while reducing intervention stocks.

| (3) | The European Parliament, in its resolution of 7 July 2011, called on the Commission and the Council to develop a transitional solution for the remaining years of the current multi-annual financial framework so as to avoid a sharp cutback in food aid as a result of the reduction in funding from EUR 500 million to EUR 113 million and so as to ensure that people who are dependent on food aid do not suffer from food poverty. |
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(3)

The European Parliament, in its resolution of 7 July 2011, called on the Commission and the Council to develop a transitional solution for the remaining years of the current multi-annual financial framework so as to avoid a sharp cutback in food aid as a result of the reduction in funding from EUR 500 million to EUR 113 million and so as to ensure that people who are dependent on food aid do not suffer from food poverty.

| (4) | The current food distribution scheme relies on the distribution of products from Union intervention stocks, supplemented on a temporary basis by purchases on the market. However, successive reforms of the CAP and favourable developments in producer prices have resulted in a progressive reduction in intervention stocks, and in the range of products available. The current version of Regulation (EC) No 1234/2007 only allows market purchases in the case of temporary unavailability of products. In the light of the judgment of the General Court in Case T-576/08 (6), purchases of food on the Union market cannot replace the reduced intervention stocks on a regular basis. In these circumstances, it appears appropriate to end the food distribution scheme. In order to give charity organisations in Member States that are using the current food distribution scheme sufficient time to adapt to the new situation, the food distribution scheme should be amended to provide for a phasing-out period during which market purchases should become a regular source of supply for the food distribution scheme in order to complement intervention stocks, where suitable intervention stocks are not available. The phasing-out period should end on the completion of the 2013 annual plan. |
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(4)

The current food distribution scheme relies on the distribution of products from Union intervention stocks, supplemented on a temporary basis by purchases on the market. However, successive reforms of the CAP and favourable developments in producer prices have resulted in a progressive reduction in intervention stocks, and in the range of products available. The current version of Regulation (EC) No 1234/2007 only allows market purchases in the case of temporary unavailability of products. In the light of the judgment of the General Court in Case T-576/08 (6), purchases of food on the Union market cannot replace the reduced intervention stocks on a regular basis. In these circumstances, it appears appropriate to end the food distribution scheme. In order to give charity organisations in Member States that are using the current food distribution scheme sufficient time to adapt to the new situation, the food distribution scheme should be amended to provide for a phasing-out period during which market purchases should become a regular source of supply for the food distribution scheme in order to complement intervention stocks, where suitable intervention stocks are not available. The phasing-out period should end on the completion of the 2013 annual plan.

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| (5) | The Union's food distribution scheme should apply without prejudice to any national food distribution schemes. |
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(5)

The Union's food distribution scheme should apply without prejudice to any national food distribution schemes.

| (6) | In order to ensure sound budgetary management, it is necessary to lay down a fixed ceiling for Union aid. The food distribution scheme should be added to the list of expenditure in Article 3(1) of Council Regulation (EC) No 1290/2005 of 21 June 2005 on the financing of the common agricultural policy (7) to be financed by the European Agricultural Guarantee Fund (EAGF). |
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(6)

In order to ensure sound budgetary management, it is necessary to lay down a fixed ceiling for Union aid. The food distribution scheme should be added to the list of expenditure in Article 3(1) of Council Regulation (EC) No 1290/2005 of 21 June 2005 on the financing of the common agricultural policy (7) to be financed by the European Agricultural Guarantee Fund (EAGF).

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| (7) | Experience has shown that certain improvements in the management of the food distribution scheme are necessary. The Commission should therefore establish annual plans for the implementation of the food distribution scheme in 2012 and 2013 based on requests by Member States that have been communicated to the Commission and on other information considered to be relevant. Member States should base their requests for food products on national food distribution programmes setting out their objectives and priorities for food distribution to the most deprived persons, which should include nutritional considerations. In this context, it is appropriate that Member States have the option of giving preference to products of Union origin. Finally, in order to secure a proper coverage of costs linked to the implementation of the annual plans, it is necessary for Member States to be given the option to reimburse, within the resources made available through the annual plans, certain costs incurred by designated organisations in relation to administration, transport and storage. |
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(7)

Experience has shown that certain improvements in the management of the food distribution scheme are necessary. The Commission should therefore establish annual plans for the implementation of the food distribution scheme in 2012 and 2013 based on requests by Member States that have been communicated to the Commission and on other information considered to be relevant. Member States should base their requests for food products on national food distribution programmes setting out their objectives and priorities for food distribution to the most deprived persons, which should include nutritional considerations. In this context, it is appropriate that Member States have the option of giving preference to products of Union origin. Finally, in order to secure a proper coverage of costs linked to the implementation of the annual plans, it is necessary for Member States to be given the option to reimburse, within the resources made available through the annual plans, certain costs incurred by designated organisations in relation to administration, transport and storage.

| (8) | Member States should undertake adequate administrative and physical controls and provide penalties in the case of irregularities in order to ensure that the annual plans are implemented in accordance with the applicable rules. |
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(8)

Member States should undertake adequate administrative and physical controls and provide penalties in the case of irregularities in order to ensure that the annual plans are implemented in accordance with the applicable rules.

| (9) | In order to ensure the continuing operation of the current food distribution scheme enabling it to be phased-out in an efficient manner, this Regulation should apply as from 1 January 2012 and until the completion of the 2013 annual plan. |
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(9)

In order to ensure the continuing operation of the current food distribution scheme enabling it to be phased-out in an efficient manner, this Regulation should apply as from 1 January 2012 and until the completion of the 2013 annual plan.

| (10) | Regulations (EC) No 1290/2005 and (EC) No 1234/2007 should therefore be amended accordingly, |
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(10)

Regulations (EC) No 1290/2005 and (EC) No 1234/2007 should therefore be amended accordingly,

HAVE ADOPTED THIS REGULATION:

Article 1

In Article 3(1) of Regulation (EC) No 1290/2005, the following point is added:

| ‘(g) | the scheme for the distribution of food to the most deprived persons in the Union provided for in Article 27 of Regulation (EC) No 1234/2007.’. |
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‘(g)

the scheme for the distribution of food to the most deprived persons in the Union provided for in Article 27 of Regulation (EC) No 1234/2007.’.

Article 2

Regulation (EC) No 1234/2007 is amended as follows:

| (1) | Article 27 is replaced by the following:
  ‘Article 27
  Scheme for the distribution of food to the most deprived persons in the Union
  1.   A scheme is established for 2012 and 2013 whereby food products may be distributed to the most deprived persons in the Union through organisations, which shall not be commercial undertakings, designated by Member States. For the purpose of this food distribution scheme, products in intervention stocks shall be made available or, where there are no intervention stocks suitable for the food distribution scheme, food products shall be purchased on the market.
  For the purposes of the food distribution scheme provided for in the first subparagraph ‘most deprived persons’ means physical persons, including families or groups composed of such persons, who are recorded or recognised on the basis of eligibility criteria adopted by the national competent authorities to be socially and financially dependent, or who are judged to be so on the basis of the criteria used by the designated organisations and approved by those national competent authorities.
  2.   Member States wishing to participate in the food distribution scheme provided for in paragraph 1 shall submit, to the Commission, food distribution programmes containing the following:






  (a) | details of the main characteristics and objectives of such programmes, |
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(1)

Article 27 is replaced by the following:

‘Article 27

Scheme for the distribution of food to the most deprived persons in the Union

1.   A scheme is established for 2012 and 2013 whereby food products may be distributed to the most deprived persons in the Union through organisations, which shall not be commercial undertakings, designated by Member States. For the purpose of this food distribution scheme, products in intervention stocks shall be made available or, where there are no intervention stocks suitable for the food distribution scheme, food products shall be purchased on the market.

For the purposes of the food distribution scheme provided for in the first subparagraph ‘most deprived persons’ means physical persons, including families or groups composed of such persons, who are recorded or recognised on the basis of eligibility criteria adopted by the national competent authorities to be socially and financially dependent, or who are judged to be so on the basis of the criteria used by the designated organisations and approved by those national competent authorities.

2.   Member States wishing to participate in the food distribution scheme provided for in paragraph 1 shall submit, to the Commission, food distribution programmes containing the following:

(a)

details of the main characteristics and objectives of such programmes,

| (b) | the organisations designated, |
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(b)

the organisations designated,

| (c) | the requests for quantities of food products to be distributed each year and other relevant information. |
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(c)

the requests for quantities of food products to be distributed each year and other relevant information.

Member States shall choose the food products on the basis of objective criteria including nutritional values and suitability for distribution. For that purpose, Member States may give preference to food products of Union origin.

3.   The Commission shall adopt annual plans based on the requests and other relevant information referred to in point (c) of the first subparagraph of paragraph 2 and submitted by Member States as part of their food distribution programmes,.

Each annual plan shall set out annual financial allocations by the Union per Member State.

When food products included in the annual plan are not available in intervention stocks in the Member State where such products are required, the Commission shall make provision in the annual plan for the transfer of those products to that Member State from Member States where they are available in intervention stocks.

The Commission may revise an annual plan in the light of any relevant developments affecting its execution.

4.   The food products shall be released to designated organisations free of charge.

The distribution of the food products to the most deprived persons shall be:

| (a) | free of charge, or |
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(a)

free of charge, or

| (b) | at a price which is in no case greater than that justified by the costs incurred by the designated organisations in their distribution and that are not eligiblecosts under points (a) and (b) of the second subparagraph of paragraph 7. |
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(b)

at a price which is in no case greater than that justified by the costs incurred by the designated organisations in their distribution and that are not eligiblecosts under points (a) and (b) of the second subparagraph of paragraph 7.

5.   Member States participating in the food distribution scheme provided for in paragraph 1 shall:

| (a) | submit to the Commission an annual report on implementation of the food distribution programmes; |
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(a)

submit to the Commission an annual report on implementation of the food distribution programmes;

| (b) | keep the Commission informed in a timely manner on developments affecting the implementation of the food distribution programmes. |
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(b)

keep the Commission informed in a timely manner on developments affecting the implementation of the food distribution programmes.

6.   The Union shall finance the eligible costs under the scheme. This financing shall not exceed EUR 500 million per budget year.

7.   The eligible costs under the scheme shall be:

| (a) | the cost of food products released from intervention stocks, |
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(a)

the cost of food products released from intervention stocks,

| (b) | the cost of food products purchased on the market, and |
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(b)

the cost of food products purchased on the market, and

| (c) | the costs of transporting food products in intervention stocks between Member States. |
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(c)

the costs of transporting food products in intervention stocks between Member States.

Within the financial resources available to implement the annual plans in each Member State, the national competent authorities may consider to be eligible the following costs:

| (a) | costs of transport of food products to the storage depots of the designated organisations; |
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(a)

costs of transport of food products to the storage depots of the designated organisations;

| (b) | the following costs incurred by the designated organisations, to the extent that they are directly linked with the implementation of the annual plans:






  (i) | administrative costs; |
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(b)

the following costs incurred by the designated organisations, to the extent that they are directly linked with the implementation of the annual plans:

(i)

administrative costs;

| (ii) | transport costs between the storage depots of the designated organisations and the points of final distribution, and |
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(ii)

transport costs between the storage depots of the designated organisations and the points of final distribution, and

| (iii) | storage costs. |
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(iii)

storage costs.

8.   Member States shall carry out administrative and physical controls to ensure that the annual plans are implemented in compliance with the applicable rules and shall establish the penalties applicable in cases of irregularities.

9.   The words ‘European Union’ aid accompanied by the emblem of the European Union shall be clearly marked in the packing of food distributed through the annual plans as well as in the distribution points.

10.   The food distribution scheme provided for in paragraph 1 shall be without prejudice to any national schemes, whereby food products are distributed to most deprived persons, that are in conformity with Union law.’.

| (2) | In Article 204, the following paragraph is added:
  ‘6.   Article 27 shall apply from 1 January 2012 until the completion of the annual plan for 2013.’. |
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(2)

In Article 204, the following paragraph is added:

‘6.   Article 27 shall apply from 1 January 2012 until the completion of the annual plan for 2013.’.

Article 3

This Regulation shall enter into force on the seventh day following that of its publication in the Official Journal of the European Union.

Official Journal of the European Union

This Regulation shall apply from 1 January 2012 until the completion of the annual plan for 2013.

This Regulation shall be binding in its entirety and directly applicable in all Member States.

Done at ..., ....

For the European Parliament

The President

...

For the Council

The President

...

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(1)  OJ C 84, 17.3.2011, p. 49.

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(2)  OJ C 104, 2.4.2011, p. 44.

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(3)  Position of the European Parliament of 26 March 2009 (OJ C 117 E, 6.5.2010, p. 258) and Position of the Council at first reading of 23 January 2012.

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(4)  OJ L 352, 15.12.1987, p. 1.

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(5)  OJ L 299, 16.11.2007, p. 1.

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(6)  Case T-576/08 Germany v Commission, judgment of 13 April 2011 (not yet published).

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(7)  OJ L 209, 11.8.2005, p. 1.

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STATEMENT OF THE COUNCIL'S REASONS

I.   INTRODUCTION

On 25 September 2008, the Commission submitted a proposal (1) to the Council on the above issue.

The European Parliament delivered its opinion at first reading on 26 March 2009.

On 17 September 2010, the Commission presented an amended proposal (2). On 3 October 2011, the Commission submitted a new amended proposal (3) replacing the previous one.

The Economic and Social Committee delivered its opinion on 7 December 2011.

On 15 December 2011, the Council reached a political agreement on the text of the proposal.

II.   OBJECTIVES

The scheme was originally established in 1987, allowing Member States to release public stocks of surplus food for use as food aid. Since then, the situation has changed (intervention stocks are almost non-existent) which led the Commission in 2008 to adopt a proposal to allow food purchases on the open market on a permanent basis. The main elements of that proposal were the introduction of national co-financing and of three-year distribution plans, and the eligibility of those products to which no intervention applied.

The most recent amended proposal of October 2011 provides for the alignment of EU agricultural legislation with the Lisbon Treaty provisions on delegated and implementing acts and, furthermore, it provides 100 % EU funding with an annual ceiling of EUR 500 million, as well as reimbursement of storage costs to charities and the maintaining of the current annual plans. In addition, market purchases are made a regular source of supply for the programme to complement intervention stocks.

III.   ANALYSIS OF THE COUNCIL'S POSITION AT FIRST READING

The Council's position confirms most of the amendments introduced by the Commission in the amended proposal and, therefore, takes into account all the European Parliament's substantial first-reading amendments.

In particular, the Council accepts the European Parliament's view as regards full Union funding for the programme, the possibility of giving preference to food products of Union origin, and the notion that the transport, storage and administrative costs directly linked with the implementation of the scheme can be eligible.

The Council's position also introduces some changes to the amended proposal not covered by the European Parliament's first-reading opinion, which referred to the first proposal from 2008:

| — | it removes the additional legal basis proposed by the Commission on social cohesion (Article 175(3) of the TFEU); |
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—

it removes the additional legal basis proposed by the Commission on social cohesion (Article 175(3) of the TFEU);

| — | it phases out the programme within the CAP by 31 December 2013; |
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—

it phases out the programme within the CAP by 31 December 2013;

| — | it exceptionally removes the alignment provisions; and |
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—

it exceptionally removes the alignment provisions; and

| — | it provides for retroactivity as from 1 January 2012. |
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—

it provides for retroactivity as from 1 January 2012.

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(1)  13195/08

(2)  13435/10

(3)  15054/11

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