CRITERIA FOR THE CHOICE OF PROJECTS TO BE FINANCED UNDER REGULATION (EEC) No 355/77 (1)

I. CONDITIONS OF ELIGIBILITY

In accordance with Regulation (EEC) No 355/77, projects must satisfy the following conditions in order to be considered for assistance: 1. The project must relate to buildings and/or equipment for: - rationalizing or developing storage, market preparation, preservation, treatment or processing of agricultural products,

- improving marketing channels,

- better knowledge of the facts relating to prices and to their formation on the markets for agricultural products.

(Article 6 (1) (2)).

2. Projects must not relate to the retail trade.

(Article 6 (2)).

3. Projects must relate to the marketing of the products set out in Annex II to the Treaty or to the production of the processed products set out in that Annex.

(Article 7 (1)).

4. Projects must form part of a specific programme within the meaning of Article 2 of Regulation (EEC) No 355/77.

(Article 10 (a)).

5. The project must have been approved by the Member State on whose territory it is to be carried out.

(Article 13 (3)).

6. The financial contribution of the Member State concerned must be at least 5 % of the cost of the project.

(Article 17 (2) (b)).

7. The financial contribution of the beneficiary must be not less than 50 % (3).

(Article 17 (2) (a)).

8. The project must not be eligible for aid under other common measures financed by the Fund.

(Article 15 (2)).

9. Requests for assistance must contain the information indicated in Regulation (EEC) No 219/78. The requests which do not contain all the Annexes required under this Regulation will not be acknowledged and will be rejected as inadmissible.

10. Execution of the project must not have begun before the submission of the request to the Commission.

II. GENERAL EVALUATION CRITERIA

1. Projects must contribute to improving the situation of the basic agricultural production sectors in question. (The beneficiary must furnish sufficient proof in this matter, more particularly as regards the participation of the producers of the basic product in the economic benefits.)

(Article 9).

2. The project must offer adequate guarantees that it will be profitable.

(Article 10 (b)).

3. The project must contribute to the lasting economic effect of the aims pursued by the programme.

(Article 10 (c)).

4. The granting of assistance to the project must not affect conditions of competition in such a way as to be incompatible with the principles contained in the Treaty.

(Article 18). (1) The validity of these criteria is no longer limited to a fixed period but they will be regularly reviewed. Any amendments will be published in the Official Journal of the European Communities. (2) The Articles for which the Regulation is not stated are from Regulation (EEC) No 355/77. (3) This percentage is : - 25 % for the Mezzogiorno, the west of Ireland, and Greece with the exception of Greater Athens,

- 35 % for Languedoc-Roussillon and for projects concerning wine in the departments of Var, Vaucluse, Bouches-du-Rhône, Ardèche and Drôme.

III. SELECTION CRITERIA

1. The selection criteria are intended to indicate the types of investment which, if all other conditions are satisfied (see point I "Conditions of eligibility" and point II "General evaluation criteria"), may qualify, so far as available resources allow, for priority in the granting of assistance.

2. However, apart from a limited number of sections where, in principle, all types of investment are eligible under the above conditions, the rules governing the operation of the market and the structural conditions make it necessary, in respect of the other sectors, to lay down a series of restrictive conditions limiting the types of investment eligible for assistance, even where the other conditions are satisfied.

3. Consequently, the following list gives both the sectors in respect of which no restrictions are laid down, stating what types of investment have priority, and also, in respect of the other sectors, the limitations and restrictive conditons and the types of investment which may be given priority.

4. Within the framework of the approval of specific programmes under Article 2, derogations from the limitations and restrictive conditions listed below may be allowed in so far as such programmes demonstrate specific structural deficiencies or particular situations which indicate that the application of those restrictive horizontal criteria to projects included in the programmes concerned is not justified. In such a case, therefore, the only criteria to apply, apart from particular criteria arising from an assessment of the programme concerned, are the conditions of eligibility, the general evaluation criteria and the criteria of priority.

5. The priorities laid down in Article 11 still apply.

6. Priority may also be given to projects undertaken within the framework of integrated operations.

A. SECTORS WITHOUT RESTRICTIONS

7. Any type of investment may qualify for assistance in the following sectors: - floricultural products,

- potatoes,

- flax/hemp.

8. Priority is granted to the following types of investment:

potatoes : storage, sorting and packing installations.

B. SECTOR SUBJECT TO RESTRICTIONS

I. Agricutural products

B.1. MILK AND MILK PRODUCTS FOR 1983 (1)

9. Investments ineligible for assistance from the Fund are as follows: (a) investment, relating to the production or marketing of : butter (2), powdered milk, whey powder, butteroil, lactose, evaporated condensed milk, casein, caseinate, processed cheese and ice cream;

(b) investment aimed at increasing production capacity (2);

(c) investment involving an increase in existing milk use capacity (2).

10. Investments are eligible for assistance from the Fund by way of derogation from the abovementioned restrictions if they are for: (a) the restructuring of butter-production capacity, provided that the new capacity does not exceed discontinued capacity and that the latter was less than 50 tonnes per year per undertaking;

(b) the transfer of milk-use capacity to other undertakings;

(c) pasteurized drinking milk and fresh dairy products;

(d) the use of liquid skimmed milk as feed on farms;

(e) the production of products to increase commercial outlets for milk;

(f) the collection of milk in less-favoured areas.

10. (a) Priority is given to the types of investment under (c), (d) and (e) in paragraph 10 above. (1) Criteria applying to decisions taken for the year 1983 (projects submitted between 1 May 1982 and 30 April 1983 or carried forward from 1982). (2) See exceptions under 10.

FROM 1984 (1)

11. The derogations included for 1983 will not necessarily be renewed. The Commission reserves the right to review this question for 1984.

B.2. MEAT (PIGMEAT, BEEF AND VEAL, SHEEPMEAT, POULTRYMEAT) AND HEN EGGS

12. Investment is ineligible for assistance from the Fund if it relates to: (a) an increase in poultrymeat-slaughtering capacity and in hen egg-grading and packing capacity;

(b) an increase in pigmeat- and beef- and veal-slaughtering capacity, apart from the regional exceptions described in paragraph 13 (c).

13. Investment is eligible for assistance from the Fund if it relates to: (a) modernization and rationalization;

(b) adaptation to Community hygiene rules;

(c) extension of existing capacity or creation of new capacity where the regional production situation shows capacity to be insufficient or where a certain amount of unrationalized pigmeat, sheepmeat and beef and veal capacity needs to be closed down.

14. Priority is given to the following forms of investment:

cutting installations attached to slaughterhouses, particularly in production regions where as yet little or no such activity is carried on.

B.3. WINE

15. Investment is eligible for assistance from the Fund only for installations concerned with the production, storage, conditioning and marketing of wines of a type and quality which assure reasonable marketing prospects.

16. In the table wine sector the following investments are ineligible for assistance from the Fund: (a) investments aiming at an increase in production capacity for which proven market outlets have not been confirmed;

(b) investments which do not assure an adequate quality of product;

(c) construction of capacities for wine-fermentation and storage which are superior to proven average needs and which exceed admissible technical standards (subject to application of point (a));

(d) investments resulting in double usage and which could be avoided by a better collective discipline and a better vertical integration.

17. Priority is given to the following types of investment: (a) restructuring through the permanent closure of units which are too small and the creation of competitive units;

(b) showing of activities and cooperation between economic agencies particularly in the marketing sector.

B.4. FEEDINGSTUFFS

18. Investment is ineligible if it is intended to increase production capacity (apart from the exception described in paragraph 19).

19. Investments involving an increase in capacity are eligible in so far as the abandonment of corresponding capacity in other production installations is demonstrated. (1) Criteria applying to decisions taken for the year 1984 and subsequent years (projects submitted after 1 May 1983 or carried forward from 1983).

20. No special priority is envisaged in this sector.

B.5. FRUIT AND VEGETABLES

21. Investments which are ineligible are those involving an increase in processing capacity for tomatoes. However, in entirely exceptional cases it is possible to finance investments effected in regions where the income of farmers is significantly lower than the national average and where processing capacities are insufficient and outdated.

22. No special priority is envisaged in this sector.

B.6. OLIVES

23. Investments which are ineligible are those which involve an increase in the capacity of oil-crushing facilities (see exceptions under 24 (b)).

24. Investments which are eligible and which have priority are those which concern: (a) facilities for the processing and marketing of edible olives;

(b) rationalization and modernization of existing oil mills ; increased capacity in an oil mill is allowed in so far as proof is given that corresponding capacity is abandoned in other oil mills.

B.7. CEREALS

25. Investments which concern milling and malting (with the exception of those relating to the storage of barley), starch and fecula are ineligible.

26. All other investments are eligible.

27. Priority is given to investments which concern storage facilities in the areas of production.

B.8. TOBACCO

28. Investments which are ineligible are those involving increases in the production of oriental varieties of tobacco.

29. Investments which are eligible are those relating to the production of quality tobacco, allowing existing commercial outlets to expand.

30. Priority is given to investments concerning facilities for rationalizing the handling, packing and storage of tobaccos whose quality standards ensure reasonable prospects of disposal.

B.9. FATS AND PROTEINS

31. Investments which are eligible are those capable of reducing in an economic way the Community deficit in respect of proteins.

32. (a) Priority is given to investments concerning peas and beans;

(b) Eligible investments in relation to dried fodder are those concerning measures aimed at reducing the energy needs of the industry.

B.10. SUGAR

33. No investment is eligible in this sector.

II. Fishery products

34. Ineligible investments are those directed principally at the marketing and processing of fish products other than those for human consumption. However, consideration may be given to investments concerned exclusively with the handling, processing or marketing of waste from fish products.

35. A case by case examination will be made as regards investments which bring about an increase in the usage of species which are already in deficit in the Community and which show little likelihood of improvement in the future, or which concern the production of processed products, the marketing of which is likely to be difficult.

36. All other investments are eligible.

37. Investment is eligible and is given priority if it relates to: (a) projects relating to the marketing or processing of species which at the moment are little used or which are not well known to consumers, provided there are sufficient outlets for the finished products;

(b) projects which involve an important element of technological innovation;

(c) projects involving the reconversion of factories for the processing of fish products for purposes other than human consumption to operations relating specifically to human consumption;

(d) projects which reduce the seasonality or irregularity of production of processed fish products;

(e) projects which improve hygiene conditions in production facilities.

C. RESTRICTIONS ON ALL SECTORS

38. No investment is eligible which relates to the processing or marketing of products from non-member countries.

39. No investment is eligible for cold storage, with the exception of cold stores linked with processing and marketing facilities.

IV. VARIATION IN THE RATE OF AID

1. The normal rate is 25 % of eligible costs (1).

2. The rate of aid is 30 % of eligible costs in regions satisfying the criteria laid down in Article 11 (1) (c), where that rate is necessary either to ensure the viability of the project or to achieve an incentive effect or demonstrate the potential of the intended project.

3. Aid is limited to two and a half times national aid where this is less than 8 % (2).

4. In the milk sector, the level of assistance remains fixed at 25 % for new products; - it is limited to: - 20 % for projects related to liquid milk for human consumption, the production of speciality products with a ready market outlet, investments which result in the delivery of liquid skim milk to farmers, or the collection of milk in less-favoured regions,

- 15 % for all other eligible investments.

- By way of derogation from the rates cited above, projects: - satisfying the criteria laid down in Article 11 (1) (c) may qualify for 5 % more aid,

- in Languedoc-Roussillon may qualify for 10 % more aid,

- in the Mezzogiorno, the west of Ireland, and Greece with the exception of Greater Athens may qualify for 25 % more aid.

(1) This rate is increased to: - 50 % for the Mezzogiorno, the west of Ireland, and Greece with the exception of Greater Athens,

- 35 % for Languedoc-Roussillon and for projects relating to wine in the departments of Var, Vaucluse, Bouches-du-Rhône, Ardèche and Drôme.

(2) Written into the Council minutes: - 8 % is to be replaced by: - 16 % for the Mezzogiorno, the west of Ireland, and Greece with the exception of Greater Athens,

- 11 % for Languedoc-Roussillon and projects relating to wine in the departments of Var, Vaucluse, Bouches-du-Rhône, Ardèche and Drôme.