COMMISSION OF THE EUROPEAN COMMUNITIES 
C0M(89) 382 final 
Brussels, 1 August 1989 
Proposal for a 
COUNCIL REGULATION (EEC) 
on national compensation aid granted In the event of a fall in 
agricultural prices In national currencies consequent on the 
automatic dismantling of the monetary compensatory amounts 
(presented by the Commission) 
EXPLANATORY MEMORANDUM 
In trying to cope with the problem that as a result of the automatic 
dismantling of monetary compensatory amounts the prices for agricultural 
products in the Member State concerned might fall, the Council has provided 
for the possibility that Member States might compensate for these price 
falls by granting national aids "according to a procedure to be determined 
by the Council, acting by a qualified majority on a proposal from the 
Commission" (Article 6(3) second subparagraph of Council Regulation (EEC) 
No 1677/85, as amended by Council Regulation (EEC) No 1889/87). The present 
Draft Regulation lays down the rules and procedures for granting such aids. 
According to Article 6(3) of Regulation No 1677/85, the aids "must be 
directed towards tiie soclo-structural field and may not be linked to 
production". The present Draft Regulation contains a list of ail types of 
national aids which are regarded as fulfilling these criteria. 
in trying to delimit the "soclo-structural field", and given the fact that 
the term Is nowhere defined in Community legislation, reference has been 
made to the measures indicated In the relevant Council Regulations namely 
No 2052/88 (concerning the coordination and reform of the structural funds) 
and Council Regulation No 4256/88. This definition would include aids 
directed towards the soclo-structural field that in accordance with 
established Community policy are considered compatible under Article 
92(3)(c) of the Treaty on the grounds that they facilitate agricultural 
development. 
Moreover as common soclo-structural measures may Include action "to ensure 
a fair standard of living for farmers" (Reg. 2052/88 Art. 3(3)(c)) or to 
"support agricultural Incomes" (Art. 2(2) 4th Indent of Reg. 4256/88), 
certain national operational aids that fall within this field, such as aid 
to reduce administrative or insurance costs, have also been Included in the 
present Draft Regulation. 
in order to take account of the nature of the aid In question as 
compensation and thus In addition to what Is normally accepted by the 
Commission, Article 1(2) of the draft makes provision for aid outwith the 
normal limits set by the existing frameworks, provided that such aid is not 
restricted to any agricultural sector. 
Finally, aids which do not directly benefit the Individual farmer, have 
also been included given their minimal link with production. 
As the Draft Regulation only sets up the framework for the granting of 
national aids, there will be no financial impact for the Community. 
Proposal for a 
COUNCIL REGULATION (EEC) 
on national compensation aid granted in the event of a fall in 
agricultural prices in national currencies consequent on the automatic 
dismantling of the monetary compensatory amounts 
THE COUNCIL OF THE EUROPEAN COMMUNITIES, 
Having regard to the Treaty establishing the European Economic Community, 
Having regard to Council Regulation (EEC) No 1677/85 of 11 June 1985 on 
monetary compensatory amounts in agriculture (1), as last amended by 
Regulation (EEC) No 1889/87 (2), and in particular the second subparagraph of 
Article 6(3) thereof, 
Having regard to the proposal from the Commission, 
Whereas if under the arrangements for automatic dismantling of the monetary 
compensatory amounts a fall in agricultural prices in national currencies 
occurs as the result of a reduction, under the first subparagraph of Article 
6(3) of Regulation (EEC) No 1677/85, in prices fixed in ecus, the Member 
States concerned are authorized under the second subparagraph of that 
paragraph to grant national compensation aid; whereas it is specified that 
such aid must be directed towards the socio-structural field and may not be 
linked to production; whereas detailed rules on this subject were left to be 
determined; 
(1) OJ No L 164, 24.6.1985, p. 6. 
(2) OJ No L 182, 3.7.1987, p. 1. 
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Whereas in order to ensure that the aid in question meets the abovementioned 
requirements and in particular is not linked to the volume or value of the 
production of the recipients, the specific purposes for which such aid may be 
given in the socio-structural field should be laid down; 
Whereas the rules to be adopted must guarantee that the total amount of aid 
granted does not exceed the losses for which it is intended to compensate, 
HAS ADOPTED THIS REGULATION: 
Article 1 
1. In cases of application of the authorization provided for in the second 
subparagraph of Article 6(3) of Regulation (EEC) No 1677/85, national 
compensation aid may be granted for the following socio-structural 
purposes: 
a) farm-level aid: 
- aid for the dissemination of new techniques and the training of 
farmers; 
- aid for technical assistance through the provision of information 
and for accounting support for farmers; 
- aid to cover administrative costs in connection with the 
establishment and keeping of herd books; 
- measures to improve agricultural product quality by quality control; 
- measures to improve working conditions in agriculture: 
. encouragement of the use of replacements for holiday periods and 
periods of illness 
. training of replacement workers 
. encouragement: and development of joinc use of machines 
H 
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- aid to cover in part the cost of insurance against extraordinary 
weather conditions 
- aid for combating animal and plant diseases 
b) agricultural product marketing aid: 
- launching aid for producer groups; 
- aid for publicity for agricultural products. 
c) aid for research in the following areas: 
- computerization 
- protection of the environment 
- product diversification in line with CAP reform aims. 
Should the need arise, the restrictions imposed by the 
relevant frameworks determined by the Commission may be waived to 
cover the grant of the aid indicated in paragraph 1. 
No aid may however be: 
- determined on the basis of the volume or value of the production of 
recipients, or 
- restricted to one or more agricultural production sectors. 
Article 2 
Member States shall take whatever action is necessary to ensure that the 
total volume of compensation to be granted under the second subparagraph 
of Article 6(3) of Regulation (EEC) No 1677/85 does not on a yearly basis 
exceed the fall in gross agricultural product consequent on the tall in 
prices referred to in that provision. 
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To this end: 
a) along with the notification indicated in Article 93(3) of the Treaty they shall 
send the Cormrission an estimate of the yearly amount of the above losses and of 
annual expenditure on the compensation measures provided; 
b) compensation aid may not be granted for more than three years following 
the monetary event and the amount granted must fall by 25% per year. 
Article 3 
The aid referred to in this Regulation shall be subject to the procedure 
provided for in Article 93 (3) of the Treaty. 
Article 4 
This Regulation shall enter into force on the third day following that of its 
publication in the Official Journal of the European Communities. 
This Regulation shall be binding in its entirety and directly applicable in 
all Member States. 
Done at Brussels, For the Council 
The President 
£ 
Note on the Impact of leglslatory acts on 
SME and employment 
1. Administrative obligations resulting from the application of the 
legislation for the enterprise : 
None. 
2. Advantages for the enterprise : 
No. 
The measure Is meant to compensate farmers for agricultural price falls 
resulting from the dismantling of monetary compensatory amounts. There 
will be no particular Impact on the competitiveness of enterprises or 
on non-agricultural employment. 
3. Inconveniences for the enterprises : 
No. 
4. Effects on employment : 
None (see 2). 
5. Y a-t-ll eu concertation préalable avec les partenaires sociaux ? 
Non. 
6. Y a-t-ll une approche alternative moins contraignante ? 
Non. 
* 

ISSN 0254-1475 
COM(89) 382 final 
DOCUMENTS 
EN 03 10 
Catalogue number : CB-CO-89-338-EN-C 
ISBN 92-77-52317-4 
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