ARCHIVES HISTORIQUES
DELACOMMISSION
COLLECTION RELIEEDES
DOCUMENTS "COM"
COM(81)446
Vol.1981/0138

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COMMISSION OFTHEEUROPEAN COMMUNITIES
COM(81)446 final
Brussels.10September 1981
Proposal fora
COUNCIL REGULATION
onproducer groupsandassociations thereofinthe
cottonsector
(submitted totheCouncil bytheCommission )
i".
C0MC81)446final

EXPLANATORY MEMORANDUM
INTRODUCTION -
On28April1981theCommission submitted totheCouncil,pursuantto
Protocol 4annexedtotheActofAccession oftheHeLlenic Republic to
theEuropean Communities ,aproposalforaregulation layingdownthe
generalrulesforthesystemofaidforcottonandtheminimumpricefor
the1981/82marketing year(C0M(81)189).
TheCommission is,submitting theattached proposal tosupplement the
arrangements applicable tocottonunderthesaidProtocol andthus
enabletheaimsspecified inparagraphs 2and4oftheProtocol tobe
achieved,namely: ■
-tosupport theproduction ofcottoninregionsoftheCommunity where
itisimportant fortheagricultural economy;
-topermittheproducers concerned toearnafairincome;»
-tostabilize themarketbystructural improvements ,atthelevelof 1
supplyandmarketing ; * .
-toprovideincentives fortheformation andtofacilitate the'opera­
tionofproducer groupsandassociations thereof.
TheCommission wouldalsopointoutthat,underthetermsoftheProtocol,
thissystemmustapplytotheentireterritory oftheCommunity' andnot'.
onlytoGreece (somecotton,equivalent toabout1%ofCommunity produc­
tion,isalsogrowninItaly,inparticular inSicilyandinthePouilles )
» • ■
I.Recognition ofproducer groupsandassociations thereof
TheCommission proposesfirstofallthatthegeneralrulesprovided
forintheabovementioned Protocol shouldcomprise acodeforthe
recognition ofproducer groupswhichwillensurethatefficient
procedures arefollowed andwhichwilllistthepreciseconditions
forrecognition sothatsuchgroupsandassociations complywith
therequirements withtheProtocol .Theseconditions arebasedon
thoselaiddownforothersectorsinwhichCommunity incentives are
offeredfortheformation ofproducer groups,andinparticular the
conditions specified inRegulation No1360/78.Theseconditions
relateto: '■ ..
0JNoL166,23.6.1978

-2-
'V' .'
-themarketingof,members'entireproductionthroughgroupsand
associations thereof;
-theexercisebythelatterofadequatedisciplineoverproduction
andmarketing;
\-theminimumlevelofeconomicactivityforsuchgroupsandasso-
4
ciations; _ ' -»
-therulesgoverningthewithdrawalofmembers.
II.Aid
\TheCommissionproposesthattwodifferentkindsofmeasureshould
beincludedinthesystemofaidforstructural improvements atthe
levelofsupplyandmarketingbyproducergroupsandassociations .
Thefirstofthesemeasureswouldbelaunchingaidforthefirst
fiveyearsfollowingrecognition .Thisaidwouldbesimilarin
naturetothatprovidedforproducerorganizations inothersectors
undertheCommonAgricultural Policy.Theaidwouldbegrantedfor
aperiodoffiveyearsandwouldbe:
-inthecaseofproducergroups,equalto.5,4,3,2and1%res­
pectivelyofthevalueoftheproducemarketed,providedthisdid
notekceedtheactualexpenditure onformationandoperation;
-inthecaseofassociations,equalto80,80,60,40and20%res­
pectivelyofactualexpenditure onformationandoperation,sub­
jecttoanoveralllimitof100000ECUperassociation .'
Thesecondmeasurewouldbeaidcoveringupto50%ofthecostof
' - *theinvestments necessaryfortheimplementation ofthecommon
rulesonproductionandmarketingand,inparticular,investments
inharvesting,ginning,storageandpackagingequipment.
,TheCommissionconsidersthatsuchaidisneededtofacilitatethe
formationofproducergroupsandassociations whosepurposeisthe
rationalization ofproductionandmarketing.Iftheseactivities
'a;-?'to':>*rationsVised,certaininvestmentsspecifictothe'proouc-«
tionandmarketingofcottonandbeyondthemeansofindividual
undertakings (machineryforharvesting,ginning,storageandpack­
aging)shouldbesharedamongthemembersoforganizations which
aresufficiently largetoensurethatadequateuseismadeofthe
equipmentinquestion.

-3-
TheCommission takestheviewthatsuch-aidisespecially necessary
since:
■
»eeiteffpredueflén ,etèspitcIti«peelfìeally *gpicultural natur>e,11
notincluded inAnnexIIoftheTreatyandcannottherefore qualify
fortheinvestment aidprovided forbyotherstructural measures '
underthecommonagricultural policy(suchasDirective 159/72/EEC
onthemodernization offarmsandRegulation (EEC)No355/77on
commonmeasurestoimprovetheconditions ^underwhichagricultural
products areprocessed andmarketed);
-themaintenance ofcottonproduction isimportant notonlyasa
sourceofincomeandemployment inless-favoured regionsofthe
.»
Community butalsoasavalidalternative tosomeformsofagri­
cultural production whichmaygiverisetoproblems (e.g.certain
fruitandvegetable crops).Anotherspecifically agricultural
featureisthatcotton-growing entersintotheannualrotation of
crops. - • *
/ / .
TheCommission considers ,however,thatinvestment aidforpooled
1equipment shouldbegrantedinsuchawaythatrational andconsistent
useisstillmadeofexisting investments .TheCommission proposes,*
therefore,thatsuchaidshouldbegranted underprogrammes whichgive
adetailed analysis oftheexisting situation andtheimprovements
planned .Italsoproposes thattheseprogrammes shouldbedrawnupby
theMemberStates ,andapproved bytheCommission ,with,theassistance
oftheStanding Committee onAgricultural Structure ,inaccordance
withtheManagement Committee procedure .
III.Financial andgénéralprovisions
TheProtocol stipulates thatthesemeasures shouldbefinanced bythe
Community . ",v'
1.TheCommission proposes thattheCommunity shouldrefundtothe
MemberState40%oftheaidgrantedpursuant totheRegulation .
Overafive-year period,'Communityexpenditure shouLdamountto17
million ECU,which,inviewoftheparticular natureofthese/
measures,wouldbefinanced fromtheChapteroftheCommunity
Budgetentitled "Expenditure intheagricultural sector".
2.Lastly,theattached proposal contains:' /
-themeasures necessary toensurethattheCommission isinformed
concerning theimplementation ofthesystemenvisaged ;
-measures toensurecompliance withtherulesgoverning competition
inthesphereinquestion .

ProposalforaCouncilRegulation onproducergroupsandassociations
thereofinthecottonsector
THECOMMISSION OFTHEEUROPEANCOMMUNITIES,
HavingregardtotheTreatyestablishing theEuropeanEconomicCommunity,
HavingregardtotheActofAccessionofGreecetothe
EuropeanCommunities,andinparticularparagraph9ofProtocol4,
HavingregardtotheproposalfromtheCommission,
Whereastheabovementioned Protocolstatesthat,inordertostabilizethe
marketbystructuralimprovements atthelevelofsupplyandmarketing,the
systemofaidtoproductionshouldbesupplemented byaidforproducer
groupsandassociations thereof:
whichhavebeenformedattheinitiativeoftheproducersthemselves;
whichoffersufficientguaranteeastothedurationandeffectiveness
oftheiroperations;
whicharerecognizedbytheMemberStateconcerned;-
WhereasthesaidProtocolalsostipulatesthat-itisfortheCouncil,
acting .onaproposalfromtheCommission,toadoptthegeneralrules
governingtheabovementioned system;

-2-
Whereasitisessential,inthefirstinstance,toLaydownprecise
conditionsforrecognition sothatthegroupsandassociations meetthe
requirements ofthesaidProtocol,particularly-inrespectofthedura­
tionandeffectiveness oftheiroperations;whereas,tothisend,these
conditionsshouldinclude,inparticular,centralized handlingofall
supplies,theexerciseofadequatecontroloverproductionandmarket­
ing,andtheprovisionsnecessarytoensurethatthegroupsandasso-"*
ciationshaveasufficiently stablemembershipandanadequatelevelof
J
economicactivity;
Whereasthenatureandtheamountoftheaidgrantedtogroupsand
associations shouldalsobespecified;whereasanappropriate incentive
fortheestablishment ofgroupsandassociations meetingtheconditions
laiddowncouldtaketheformofaidgrantedtocoverformationand
operatingexpensesduringthefirstfiveyearsandaidtowardsthe
investments necessaryfortheperformance oftheirsupplyandmarketing
functions;whereas,toensurethatthesystemenvisagedisimplemented
inallregionsoftheCommunitywhereitprovesnecessary,thegranting
u
oftheabovementionedformsofaidshouldbemadeobligatory; T
Whereastheaidgrantedtowardstheformationandoperatingexpensesof
associations shouldbesubjecttoanoverallceiling,totakeaccountof
thefactthateachofthegroupsbelongingtosuchanassociation has
alreadyqualifiedorstillqualifiesforsuchaid;whereasthelevelof
aidtobegrantedtoorganisations existingpriortotheintroduction of
thissystemandthelevelofaidtobegrantedinthecaseofgmalgama-
tionsoforganisations alreadymeetingthesetrequirements shouldalso
befixedinapreciseandappropriate manner;

-3-
Whereasitshouldbestipulated thatinvestment aidshouldbegrantedin
• '■ i
respectofstructures tobeusedbygroupsorassociations ortob©used
jointlybytheirmembers;whereasitshouldalsobeensuredthatsuch
aidcontributes towardsthesystematic improvement ofexisting struc­
tures;whereas,therefore,itisappropriate tostipulate thatsuchaid
shouldbegrantedunderprogrammes comprising athorough analysisofthe
situation inthesectorandtheimprovement envisaged,suchprogrammes
beingdrawn vupbytheMemberStatesandapproved bytheCommission under
aprocedure ensuring closecooperation betweentheMemberStatesandthe
Commission ;whereas theappropriate bodyforsuchcooperation isthe
Standing Committee onAgricultural Structure setupbyArticle 1ofthe
CouncilDecision of4December 1962onthecoordination ofpolicies on
1thestructure ofagriculture ;
Whereas,inorderthatCommunity expenditure entailed bytheimplemen­
tationofthesystemenvisaged shouldbegoverned byadequate financial
.rulesandprocedures ,theprovisions ofCouncilRegulation (EEC)No729/70
pf21ApriI1970 2
3 onthefinancing ofthecommonagricultural policy,aslastamended by
.. 3Regulation (EFC)No3509/80,shouldbemadeapplicable tothisspecifi­
callyagricultural sector;
Whereas theplannedduration andestimated costofCommunity aidshould
bespecified ;whereasaidgrantedforaperiodoffiveyearsandatan
estimated costof17million ECUcouldmakeaneffective contribution
towardsstructural improvements inthesupplyofcottonandtowardsthe.
adaptation ofcottonproduction tomarketrequirements ;
V
J
Whereas theCommission mustbeabletoverifythatthemeasures takenby
theMemberStatestoimplementthepLannedscheme/witR¥heconditions "thereof;
whereas theCommission mustalsobeabletoassesseachyeartheprac­
ticalresultsachieved byimplementation ofthesaidsystem.
^0JNo136of17.12.1962,p.2892/62
,0JNoL94of28.4.1970,p.13
0JNoL367of31.12.1980 ,p.87

HASADOPTEDTHISREGULATION :
Article 1 ■■
ThisRegulationshallapplytocotton,notcardedorcombed,ofheading
No55.01oftheCommonCustomsTariff.
TITLEI:Provisionsrelatingtoproducergroupsandassociations thereof.
Article2
1.ForthepurposesofthisRegulation,"producergroup"shallbetaken
tomeananyorganization ofcottonproducerswhichhasbeensetupat
theinitiativeoftheproducersthemselveswiththeaimof:
-furtheringthecentralization ofsupply;
-adaptingsupplytomarketrequirements ;
-placingatthedisposalofmemberproducersadequatetechnical
facilitiesfortheproduction,qualitative improvement andmarket­
ingoftheproductsinquestion, ..
andwhichhasbeenrecognizedbytheMemberStateconcernedinaccord­
ancewithArticle3.
2.ForthepurposesofthisRegulation,"association shallbetakento
meananyorganization consistingofrecognizedproducergroupswhich
pursuesthesameobjectivesasthelatterandwhichhasbeenrecog­
nizedbytheMemberStateconcernedinaccordancewithArticle3.
Article3
1,TheMemberStatesshallrecognizeproducergroupsandassociations
.thereof,includingthoseinexistencewhenthisRegulation comesinto
force,whichapplyforrecognition andwhichfulfilthefollowing
conditions: '.
(a)theirstatutesshallmakeitobligatoryforproducerswhoare
membersofgroupsandforgroupswhicharemembersofassocia­
tions:
toprovidetheinformation requestedbythegrouporasso­
ciationconcerningharvestsandavailabilities ;
toapplytheruleswhichthegrouporassociation hasadopted
/onproductionandmarketing;
-tomarkettheirentireproductionthroughthegrouporasso­
ciation.
However: .. not
-thislatterobligationshall/applytothatpartofproduction
inrespectofwhichproducershadconcludedsalescontractsor
agreedtooptionsbeforejoiningthegroup,providedthatthe
saidgroupwasinformed,beforetheproducerconcernedbecame
amember,oftheextentanddurationoftheobligations thus
contracted;
-thegrouporassociation mayauthoriseits'memberstomarket
partoftheirproductionthemselvesonacontractualbasis,in
accordancewithruleswhichtheyshalllaydownandtheimple­
mentationofwhichtheyshallsupervise;

-5-
(b)theyshallgiveproofofadequateeconomicactivity.Forthispur­
posetheymust:
-representatleast;
10producers,inthecaseofgroups;
100groups,inthecaseofassociations,
-controlavolumeofunginnedcottonproductionamountingtoat
least:
175tonnesinthecaseofgroups;.
17500tonnesinthecaseofassociations .
However,bywayof,exceptiontothese'proyisions,theassociations cons­
titutedinItalymustrepresentrecognizedproducergroups..■
existingatthelevelofeachproductionregion.
(c)they^hallhavelegalpersonality orsufficientlegalcapacityto
exerciserightsandbesubjecttoobligations inaccordancewith
nationallaw;
(d)theirstatutesshallincludeprovisionstoensurethatmembersofa
■grouporofanassociation whowishtowithdrawfrommembership may
doso: -
–aftertheyhavebeenmembersofthegrouporoftheassociation
foraminimumofthreeyearsfollowingrecognition thereof;
-andonconditi-onthattheyinformthegrouportheassociation
inwritingoftheirintentiontowithdrawnotlessthantwelve
monthsbeforesodoing. •
Theseprovisionsshallapplywithoutprejudicetonationallawsor
provisionsdesignedtoprotectthegrouporassociationortheir
creditors,inspecifiedcases,againstanyfinancialconsequences
whichmightresultfromthewithdrawalofamemberortopreclude
withdrawalofamemberinthecourseofthefinancialyear;'-
(e)theyshallkeepseparateaccountsfortheactivitiesin.respectof
wh.ichtheyarerecognized.Theseseparateaccountsandthoserela­
tingtootheractivitiesofthegrouporassociationaretobekept
sothattheaidprovidedforinArticle4canbecalculatedandthe
usemadeoftheaidprovidedforinArticles4and5canbeascer­
tained;
(f)theyshallnotholdadominantpositionwithinthecommonmarket;■
(g>theyshall/nov&rthewholerangeoftheiractivities,exerciseanydis­
crimination betweenproducerswhichrunscountertotheoperationof
thecommonmarketortheachievementofthegeneralobjectivesof
theTreatyandshallnot,inparticular,exerciseanydiscrimination connec
.tedwithnationalityorplaceofestablishment .
2,Forthepurposesofparagraph1(a),"marketing"shallcoverthefollow­
ingoperations -relatingtotheproductreferredtoinArticle1:
-centralization ofsupply;-
-preparationforsale;
-supplytobulkbuyers..
Article4
TheMemberStates: •• -
-shalltakeadecisiononrecognitionwithinthreemonthsofthedateon
whichrecognitionisrequested;.
-shallmakeknowntotheCommission,withintwomonths,anydecision
takenonthegranting,refusalorwithdrawalofrecognition.

-6-
Article5
* -
1.TheMemberStatesshallgrantaidtorecognizedgroups.andassocia­
tions,Inrespectofthefiveyearsfollowingthedateoftheirrecognition,
toencouragetheirformationandtofacilitatetheiroperation.The
amountofsuchaidshallbepaidduringaperiodofsevenyearsfollow­
ingthedateofrecognition ..-
2.Theamountofaidgrantedtoproducergroupsinrespectofthefirst,second,
third,fourthandfifthyears:
-shallbeequalto5%,4%,3%,2%and1%respectively ofthevalue
oftheproductsmarketedthroughthesegroups,*and
-maynotexceedtheactualformationandoperatingexpenditure as
definedbyCommissionRegulation (EFC)No2084/80onthedefinition
oftheactualformation ,andoperatingexpenditureofproducergroupsandassociations thereof.
3.Theamountoftheaidgrantedtoassociations :
Ca)shallbeequaltoamaximumof80%,80%,60%,40%and20%ofthe
actualformationandoperatingexpenditureforthefirst,second,third,fourthandfifthyearsrespectively ;
(b)maynot,however,exceedatotalof100000ECU.
4.Thevalueoftheproductsreferredtoinparagraph 2shallbecalcu­
latedforeachyearonthebasisof:
-theannualvolumeplacedonthemarketinaccordancewiththethird
indentofArticle3(1)(a);
'-theaverage.producerpricesobtained. v-
5.TheaidprovidedforinthisArticleshallbegranted:
,(a)togroupsandassociations formedbeforetheentryintoforceof
thisRegulationonlyinproportiontotheadditionalexpenditure
incurredincomplyingwiththerequirements ofArticle3;
(b)togroupsandassociations formedfrom1existingassociations
alreadycomplyingwiththerequirements ofthisRegulationonly:
-iftheyaretheresultofanamalgamation designedtoachieve
morefullytheobjectivesspecifiedinArticle2;
-inproportiontotheexpenditure incurredintheirformation
(expenditure onpreparation andonthedrawingupoftheir
constitutional instruments andstatutes).
0JL203,5.8.1980,p.9

--
Article6
1.Tocontributetowardsstructural improvements atthelevelofsupply
andmarketingandtowardstheharmonization andimprovement ofqual­
ity,theMemberStatesshallgranttorecognizedproducergroupsand
associations thereofaidforinvestments : '
(a)necessaryfor:
-theimplementation ofthecommonrulesreferredtointhe.
secondindentofArticle3(1)(a);
-themarketingreferredtointhethird,indentofArticle
3(1)(a);
andinparticularinvestmentsinharvesting,ginning,storageand
packagingfacilities;
(b)whicharetobeusedbythegrouporassociation,ortheuseof
whichistobesharedbytheirmembers;
(c)whichformpartofprogrammesapprovedinaccordancewithArticle9.
2.Theaidprovidedforinparagraph 1shallnotexceed50%ofthecost
oftheinvestment made.
TITLEII:Development andrationalisation programmes
Article7
1.TheprogrammesshallreLatetothedevelopment andrationalization of
cottonproductionandmarketing.Theyshallbedrawnupbythe
MemberStatesandshallcoverallorpartoftheirterritory.
2.Theprogrammesshallprovideatleastthefollowinginformation :
(a)definitionofthegeographical areaandtheactivitiesconcerned;
(b)theinitialsituationandthe,tendencieswhichmaybededuced
therefrom,particularly asregards:
cottonproduction (quantity,area,importancerelativeto
totalproduction,structure,existingpositionwithregardto
mechanization);
-presentandprospectiveoutlets;
-theexistingpositionasregardssupply,marketingandprepara-^
tionforsale,andinparticularthecapacitiesoftheunder­
takingsconcerned (includingginningestablishments );
(c)therequirements metbytheprogrammeandtheobjectivespursued
bythelatter,including:
capacitiestobeachievedoverallandperregionconcerned,
brokendownaccordingtothevarioustypesofestablishment
andthevariousstagesintheircompletion;
-theprofitability criteriatobeapplied;

-8-
<d)theeffectsoftheprogramme onfarmIncomesinthegeographical
areaconcerned ; '
.\
(e)themeansemployed toachievetheobjectives oftheprogramme ,in
particular :thetotalamountofinvestment (including themethod
ofcalculation );thedistinction between thesumsallocated for
modernization andthosefordevelopment ;thedistinction between
thesumsearmarked forthevarious typesofinvestment and
forthevariousregionsconcerned ;
(f)therateofaidplannedbytheMemberStateforthevarioustypes
ofinvestment ; *
(g)theestimated timerequiredfortheexecution oftheprogramme ,
whichshouldnotbemorethan5years..
Article 8
1.Theprogrammes andanymodifications theretoshallbeforwarded to
theCommission bytheMemberStateorStatesontheterritory of
whichtheyaretobecarriedout. v-
2.AttherequestoftheCommission ,theMemberStateorStatesinvolved
i"ntheprogramme shallsubmitsupplementary background information in
thecontextofthedetails required underArticle 7.
Artiele9
■■ii■■■■.m»■■■■ /
six ... . .
1.Within monthsofthedateofreceiptofeachprogramme ormodifica­
tionsthereto,andoncondition thatallthedetailsspecified in
Article 7havebeenprovided,theCommission shalltakeadecision as
_totheirapproval,inaccordance withtheprocedure laiddownin
Article ,22of.CouncilRegulation (EEC)No355/77of15February 1977on
commonmeasurestoimprove^theconditions underwhichagricultural produc >
areprocessed andmarketed
2.Whenaprogramme isapproved inaccordance withparagraph 1,the
Commission shall,ifnecessary,determine byagreement Withthe
MemberStateconcerned whichaspectsoftheprogramme shouldreceive
attention inthereportreferred tointhesecondindent
ofArticle 15.
TITLEIII:Financial andgeneralprovisions
Article 10
Theprovisions oftheregulations onthevalueoftheunitofaccount
andtheexchange ratestobeappliedforthepurposes ofthecommon
agricultural policy,ontheonehand,and Regulation (EEC)No
729/70,ontheotherhand,shallapplyforthepurposesofthis-
Regulation .
0JNoL51,23.2.1977 ,p.1;

-9-
Article11
1.Theestimatedtimeforcarryingoutthemeasuresprovidedforinthis
Regulationisfiveyearsasfromthedateofitsentryintoforce.
2.Beforetheendoftheperiodreferredtoinparagraph 1,thisRegulation
shallbere-examined bytheCouncilonthebasisofareportfromthe
Commissionconcerningtheresultsofitsapplication .
3.Communityexpenditure ontheapplicationofthisRegulationisestimated
at17miHionECU.
Article12
TheCommunityshallrefundtotheMemberStates40%oftheirexpenditure
onthemeasuresprovidedforinArticles5and6.
Article13
1.Applications forreimbursement shallrelatetoexpenditure incurred
bytheMemberStatesduringonecalendaryearandshallbesubmitted
totheCommissionbefore1Mayofthefollowingyear.
2.ThedecisiontograntCommunityaidshallbetakeninaccordancewith
Article7(1)ofRegulation (EEC)No729/70.<
3.PaymentsonaccountmaybegrantedbytheCommission.
4.Thedetailedrulesfortheapplication ofArticle12andofthis
Articleshallbeadoptedinaccordancewiththeprocedurelaiddownx
inArticle13ofRegulation (EEC)No729/70.,
Article14
ThisRegulationshallnotexcludetherightoftheMemberStatesto
adopt,withinthesphereofthisRegulation,additionalaidmeasures,
theconditionsorproceduresforthegrantingofwhichdifferfromthose
laiddowninthisRegulationortheamountsofwhichexceedtheupper
limitslaiddowntherein,providedthatthesemeasuresaretakenin
accordancewithArticles92,93and94oftheTreaty.
Article15
.'neMemberStatesconcernedshallcommunicate totheCommission :
thelaws,regulations andadministrative provisionsimplementing "this
Regulationnotlaterthanonemonthaftertheiradoption;
areportontheresultsoftheapplication ofthisRegulationeach
yearbefore31March,andforthefirsttimebefore31March198?.

-10-
Article 16
ThisRegulation shallenterintoforceonthethirddayfollowing its
publication intheOfficial JournaloftheEuropean Communities .
ThisRegulation shallbebindinginitsentirety anddirectly applicable
inallMemberStates. * -
DoneatBrussels FortheCouncil

-? Ε!
|.'flWAKCJAL 'STATEMENT' '\
j . |9at*:12.6.1981 - |
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I associations thereofinthecottonsector.' * jj
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\4.-AJKISOFPROJECT: ,.• ... • |
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| ^producergroupsinthissectorciswellsstohelptheir 1|
| ,operation'byinvestmentaids.... ^'•|
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J<>.3WILLFUTUREBUDGETAPPROBIATIONS SENECE.SSARY ?
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JOBSERVATIONS: ■■"■■■«36.3WILLfllTUHfc QUOGFCTAPPSOBI ATIONS8ENECE.SSARY ?
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OBSERVATIONS : ■U

ANNEX
A.Producer Groups
Cotton production inthe EEC (Greece and Italy )stands atabout
380.000 tonnes per year .
Itisestimated that some 650producer groups will beformed inthe
first five years ,with anaverage 175tonnes pergroup ,orabout 30%
oftotal production coming from groups .
*
Hypothesis : - .
Formation of130producer groups per year who will receive aMember
"State aidofrespectively 5,4,3,2and 1%ofthevalue ofproduction
marketed during 5years .
Theprice ofcotton is735 ECU/tonne ., ,
•Value ofannual production :
130 χ175 χ735 =16,721,250 Μίο Εΰυ
Mio ECU
Year GroupPercentage ofMember State aid Communi ty' .
Reimbursement
40% 5% ,4% -3% 2% 1% total
1 130 0.835-..- 0.835-
2. ,130 CL.835 0.668■- - 1.503 0.334
3 130 0.835 0.668 0.501- - 2.004 0.601
4 130 0.835 *0,668 0.501 0.334 2.338 0.802
5 130 0.835 0.668 0.501 0.334 0.167 2.505 . 0.935
■6 0.668 0.501 0.334 0.167 1.,670 1.002
7 0.501 0.334 0.167 1.002 0.668
8 0.334 0.167 0.501 0.401
;9- 0.167 0.167 0.200
10 - 0.067
-650 4.175 3.340 2.505 1.670 -0.835 12.525 5.010

-2-
B.Associations ofproducer groups
Giventhattheestablishment ofanassociation requires atLeast
100producer groupsonecanexpecttheformation ofthefirstasso­
ciationinthesecondyearoftheimplementation ofthisRegulation at
theearliest . '
Hypothesis :Oneassociation isestablished eachyear.
Theaidgranted peryearwouldbeatmost100,000 ECU,ofwhichthe
Community reimburses 40%,or40,000 ECU/year
or4associations :total160,000 ECU.
C.Harvesting machines
Calculation hypothesis : *
Onemachine pergroup,or130maschines peryear.
Costofmachine :111.400 ECU
Average MemberStateaid:35%
Community reimbursement :40%
130x0.111x35%x40%=2.029MióECU/year
or10.145MioECUfor5years.
D.Otherinvestments
Thetotalestimated costfor5yearsfortheotherinvestments are
7.5MioECU,ofwhich50%fallstotheMemberState,or3.75MioECU.
TheCommunity reimburses 40%,or1.5MioECU,or0.3MioECUperyear.
SUMMARY
MioECU
A Β C D TotaI
YearM.S. ECC M.S. ECC M.S. EEC M.S. ECC M,S.ECC
Costs Reimb.Costs Reimb.Costs Reimb.Costs Reimb ",Costs Reimb.
10.835 5.073–0.75Q–6.658–
2 1.5030.334 0.100- 5.0732.029 .0.750 0.300 7.426 2.663
32.004 0.6010.100 0.040 5.073 2.0290.7500.300 7.9272.970
42.338 0.802 0.100 0.040 5.073 2.029 0.7500.300 8.261 3.171
52..5050.935 0.100 0.040 .5.0732.029 0.7500.300 8.4283.304
6 1'.670 1,002 0.040 2.029 0.300 1.6703.371
.7 1=0020.668 1o0020-668
80,501 0.401 0.501 ■0.401
90.1070.200 0.167 0.200
10 0.067
-0.067
.
1?..5255.01G0„4ÜJ.ü--U-025.36510.145 .3.Γ50Λ-re·.e-ν·.ε-5