28.

the following Section shall be inserted in Chapter II of Title II of Part II: ‘Section IA Rules concerning producer and interbranch organisations and producer groups in the fruit and vegetables sector Subsection I Rules of association and recognition of producer organisations Article 125a Rules of association of producer organisations 1. The rules of association of a producer organisation in the fruit and vegetables sector shall require its producer members, in particular, to: (a) apply the rules adopted by the producer organisation relating to production reporting, production, marketing and protection of the environment; (b) belong to only one producer organisation in respect of a given holding's production of any given product referred to in Article 122(a)(iii); (c) market their entire production concerned through the producer organisation; (d) provide the information requested by the producer organisation for statistical purposes, in particular on growing areas, quantities cropped, yields and direct sales; (e) pay the financial contributions provided for in its rules of association for the establishment and replenishment of the operational fund provided for in Article 103b. 2. Notwithstanding paragraph 1(c), where the producer organisation so authorises and where this is in compliance with the terms and conditions laid down by the producer organisation, the producer members may: (a) sell no more than a fixed percentage of their production and/or products directly on their holdings and/or outside their holdings to consumers for their personal needs, such percentages being fixed by Member States at not less than 10 %; (b) market themselves or through another producer organisation designated by their own organisation, quantities of products which are marginal in relation to the volume of marketable production of their organisation; (c) market themselves or through another producer organisation designated by their own organisation products which, because of their characteristics, are not normally covered by the commercial activities of the producer organisation concerned. 3. The rules of association of a producer organisation shall also provide for: (a) procedures for determining, adopting and amending the rules referred to in paragraph 1; (b) the imposition on members of financial contributions needed to finance the producer organisation; (c) rules enabling the producer members to scrutinise democratically their organisation and its decisions; (d) penalties for infringement of obligations under the rules of association, particularly non-payment of financial contributions, or of the rules laid down by the producer organisation; (e) rules on the admission of new members, particularly a minimum membership period; (f) the accounting and budgetary rules necessary for the operation of the organisation. 4. Producer organisations in the fruit and vegetables sector shall be deemed as acting in the name of, and on behalf of, their members in economic matters. Article 125b Recognition 1. Member States shall recognise as producer organisations in the fruit and vegetables sector all legal entities or clearly defined parts of legal entities applying for such recognition, provided that: (a) they have the objective of the use of environmentally sound cultivation practices, production techniques and waste management practices in particular to protect the quality of water, soil and landscape and preserve or encourage biodiversity and meet the requirements laid down in Articles 122 and 125a and provide the relevant evidence therefore; (b) they have a minimum number of members and cover a minimum volume or value of marketable production to be laid down by Member States, and provide the relevant evidence therefore; (c) there is sufficient evidence that they can carry out their activities properly, both over time and in terms of effectiveness and concentration of supply, to which end Member States may decide which of the products, or groups of products referred to in Article 122(a)(iii) should be covered by the producer organisation; (d) they effectively enable their members to obtain technical assistance in using environmentally-sound cultivation practices; (e) they effectively provide their members, where necessary, with the technical means for collecting, storing, packaging and marketing their produce; (f) they ensure proper commercial and accounting management of their activities; and (g) they do not hold a dominant position on a given market unless this is necessary in pursuance of the objectives of Article 33 of the Treaty. 2. Member States shall: (a) decide whether to grant recognition to a producer organisation within three months of the lodging of an application accompanied by all the relevant evidence; (b) carry out checks at regular intervals to ascertain that producer organisations comply with this Chapter, impose the penalties on such organisations in the event of non-compliance or irregularities concerning the provisions of this Regulation and decide, where necessary, to withdraw recognition; (c) notify the Commission, once per year, of every decision to grant, refuse or withdraw recognition. Subsection II Association of producer organisations and producer groups Article 125c Association of producer organisations in the fruit and vegetables sector An association of producer organisations in the fruit and vegetables sector shall be formed on the initiative of recognised producer organisations and may carry out any of the activities of a producer organisation referred to in this Regulation. To this end, Member States may recognise, on request, an association of producer organisations where: (a) the Member State considers that the association is capable of effectively carrying out those activities; and (b) the association does not hold a dominant position on a given market unless this is necessary in pursuance of the objectives of Article 33 of the Treaty. Article 125a(4) shall apply mutatis mutandis. Article 125d Outsourcing Member States may permit a recognised producer organisation in the fruit and vegetables sector or a recognised association of producer organisations in that sector to outsource any of its activities, including to subsidiaries, provided that it provides sufficient evidence to the Member State that doing so is an appropriate way to achieve the objectives of the producer organisation or association of producer organisations concerned. Article 125e Producer groups in the fruit and vegetables sector 1. In Member States which acceded to the European Union on 1 May 2004 or thereafter, or in the outermost regions of the Community as referred to in Article 299(2) of the Treaty, or in the smaller Aegean Islands as referred to in Article 1(2) of Regulation (EC) No 1405/2006, producer groups may be formed as a legal entity or clearly defined part of a legal entity, on the initiative of farmers who are growers of one or more products of the fruit and vegetables sector and/or of such products solely intended for processing, with a view to being recognised as a producer organisation. Such producer groups may be allowed a transitional period in which to meet the conditions for recognition as a producer organisation in accordance with Article 122. In order to qualify, those producer groups shall present a phased recognition plan to the relevant Member State, acceptance of which shall signal the start of the transitional period referred to in the second subparagraph and shall constitute a preliminary recognition. The transitional period shall be no more than five years long. 2. Before acceptance of the recognition plan, Member States shall inform the Commission of their intentions and the likely financial implications thereof. Subsection III Extension of rules to producers in an economic area Article 125f Extension of rules 1. In cases where a producer organisation in the fruit and vegetables sector which operates in a specific economic area is considered, in respect of a specific product, to be representative of production and producers in that area, the Member State concerned may, at the request of the producer organisation, make the following rules binding on producers established in that economic area who do not belong to the producer organisation: (a) the rules referred to in Article 125a(1)(a); (b) the rules required to implement the measures referred to in Article 103c(2)(c). The first subparagraph shall apply on condition that those rules: (a) have been in force for at least one marketing year; (b) are included in the exhaustive list in Annex XVIa; (c) are made binding for no more than three marketing years. However, the condition referred to in point (a) of the second subparagraph shall not apply if the rules concerned are those listed in points 1, 3 and 5 of Annex XVIa. In this case, the extension of rules may not apply for more than one marketing year. 2. For the purposes of this subsection, “economic area” means a geographical zone made up of adjoining or neighbouring production regions in which production and marketing conditions are homogeneous. Member States shall notify a list of economic areas to the Commission. Within one month of notification, the Commission shall approve the list or shall, after consultation with the Member State concerned, decide on the amendments which the latter must make to it. The Commission shall make the approved list publicly available by the methods it considers appropriate. 3. A producer organisation shall be deemed representative within the meaning of paragraph 1 where its members account for at least 50 % of the producers in the economic area in which it operates and it covers at least 60 % of the volume of production of that area. Without prejudice to paragraph 5, in calculating these percentages account shall not be taken of producers or production of organic products covered, until 31 December 2008, by Regulation (EEC) No 2092/91 and, from 1 January 2009, by Regulation (EC) No 834/2007. 4. The rules which are made binding on all producers in a specific economic area: (a) shall not cause any damage to other producers in the Member State concerned or in the Community; (b) shall not apply, unless they expressly cover them, to products delivered for processing under a contract signed before the beginning of the marketing year, with the exception of the rules on production reporting referred to in Article 125a(1)(a); (c) shall not be incompatible with Community and national rules in force. 5. Rules may not be made binding on producers of organic products covered, until 31 December 2008, by Regulation (EEC) No 2092/91 and, from 1 January 2009, by Regulation (EC) No 834/2007 unless such a measure has been agreed to by at least 50 % of such producers in the economic area in which the producer organisation operates and that organisation covers at least 60 % of such production of that area. Article 125g Notification Member States shall notify the Commission forthwith of the rules which they have made binding on all producers in a specific economic area pursuant to Article 125f(1). The Commission shall make these rules publicly available by the methods it considers appropriate. Article 125h Repeal of the extension of rules The Commission shall decide that a Member State shall repeal an extension of the rules decided on by that Member State pursuant to Article 125f(1): (a) where it finds that the extension in question to other producers excludes competition in a substantial part of the internal market or jeopardises free trade, or that the objectives of Article 33 of the Treaty are endangered; (b) where it finds that Article 81(1) of the Treaty applies to the rules extended to other producers. The Commission’s decision with regard to those rules shall apply only from the date of such a finding; (c) where it finds after checks that this subsection has not been complied with. Article 125i Financial contributions of non-member producers Where Article 125f(1) is applied, the Member State concerned may decide, on scrutiny of evidence presented, that non-member producers shall be liable to the producer organisation for the part of the financial contributions paid by the producer members, insofar as these are used to cover: (a) administrative costs resulting from applying the rules referred to in Article 125f(1); (b) the cost of research, market studies and sales promotion undertaken by the organisation or association and benefiting all producers in the area. Article 125j Extension of rules of associations of producer organisations For the purposes of this subsection, any reference to producer organisations shall also be construed as a reference to recognised associations of producer organisations. Subsection IV Interbranch organisations in the fruit and vegetables sector Article 125k Recognition and withdrawal of recognition 1. If warranted by the Member State’s structures, Member States may recognise as interbranch organisations in the fruit and vegetables sector all legal entities established on their territory which make an appropriate application, on condition that: (a) they carry out their activity in one or more regions in the Member State concerned; (b) they represent a significant share of the production of, trade in and/or processing of fruit and vegetables and products processed from fruit and vegetables in the region or regions in question and, where more than one region is involved, they can demonstrate a minimum level of representativeness in each region for each of the branches that they group; (c) they carry out two or more of the activities referred to in Article 123(3)(c); (d) they are not themselves engaged in the production or processing or marketing of fruit and vegetables or products processed from fruit and vegetables; (e) they do not engage in any of the agreements, decisions and concerted practices referred to in Article 176a(4). 2. Before granting recognition Member States shall notify the Commission of the interbranch organisations which have applied for recognition, providing all relevant information about their representativeness and their various activities, together with all other information needed for an assessment. The Commission may object to recognition within a time limit of two months after notification. 3. Member States shall: (a) decide whether to grant recognition within three months of the lodging of an application with all relevant supporting documents; (b) carry out checks at regular intervals to ascertain that interbranch organisations comply with the terms and conditions for recognition, impose the penalties on such organisations in the event of non-compliance or irregularities concerning the provisions of this Regulation and decide, where necessary, to withdraw recognition; (c) withdraw recognition if: (i) the requirements and conditions for recognition laid down in this subsection are no longer met; (ii) the interbranch organisation engages in any of the agreements, decisions and concerted practices referred to in Article 176a(4), without prejudice to any other penalties to be imposed pursuant to national law; (iii) the interbranch organisation fails to comply with the notification obligation referred to in Article 176a(2); (d) notify the Commission, within two months, of any decision to grant, refuse or withdraw recognition. 4. The Commission shall lay down the terms and conditions on which and the frequency with which the Member States are to report to the Commission on the activities of interbranch organisations. The Commission may, as a result of checks, request a Member State to withdraw recognition. 5. Recognition shall constitute an authorisation to carry out the activities listed in Article 123(3)(c), subject to the terms of this Regulation. 6. The Commission shall make publicly available a list of recognised interbranch organisations, by the methods it considers appropriate, indicating the economic sphere or the area of their activities and the activities carried out within the meaning of Article 125l. Withdrawals of recognition shall also be made publicly available. Article 125l Extension of rules 1. In cases where an interbranch organisation operating in a specific region or regions of a Member State is considered to be representative of the production of or trade in or processing of a given product, the Member State concerned may, at the request of that interbranch organisation, make binding some of the agreements, decisions or concerted practices agreed on within that organisation for a limited period on other operators operating in the region or regions in question, whether individuals or groups, who do not belong to the organisation. 2. An interbranch organisation shall be deemed representative within the meaning of paragraph 1 where it accounts for at least two thirds of the production or trade in or processing of the product or products concerned in the region or regions concerned of a Member State. Where the application for extension of its rules to other operators covers more than one region, the interbranch organisation must demonstrate a minimum level of representativeness for each of the branches it groups in each of the regions concerned. 3. The rules for which extension to other operators may be requested: (a) shall have one of the following aims: (i) production and market reporting; (ii) stricter production rules than those laid down in Community or national rules; (iii) drawing up of standard contracts which are compatible with Community rules; (iv) rules on marketing; (v) rules on protecting the environment; (vi) measures to promote and exploit the potential of products; (vii) measures to protect organic farming as well as designations of origin, quality labels and geographical indications; (b) shall have been in force for at least one marketing year; (c) may be made binding for no more than three marketing years; (d) shall not cause any damage to other operators in the Member State concerned or the Community. However, the condition referred to in point (b) of the first subparagraph shall not apply if the rules concerned are those listed in points 1, 3 and 5 of Annex XVIa. In this case, the extension of rules may not apply for more than one marketing year. 4. The rules referred to in points (a)(ii), (iv) and (v) of paragraph 3 shall not be other than those set out in Annex XVIa. The rules referred to in point (a)(ii) of paragraph 3 shall not apply to products which were produced outside the specific region or regions referred to in paragraph 1. Article 125m Notification and repeal of the extension of rules 1. Member States shall notify the Commission forthwith of the rules which they have made binding on all operators in one or more specific regions pursuant to Article 125l(1). The Commission shall make those rules publicly available by the methods it considers appropriate. 2. Before the rules are made publicly available, the Commission shall inform the Committee set up by Article 195 of any notification of the extension of interbranch agreements. 3. The Commission shall decide that a Member State must repeal an extension of the rules decided on by that Member State in the cases referred to in Article 125h. Article 125n Financial contributions of non-members In cases where rules for one or more products are extended and where one or more of the activities referred to in Article 125l(3)(a) are pursued by a recognised interbranch organisation and are in the general economic interest of those persons whose activities relate to one or more of the products concerned, the Member State which has granted recognition may decide that individuals or groups which are not members of the interbranch organisation but which benefit from those activities shall pay the organisation all or part of the financial contributions paid by its members to the extent that such contributions are intended to cover costs directly incurred as a result of pursuing the activities in question.’;