&i M • COMMISSION OF THE EUROPEAN COMVTUNITIES 
C0M(91) 96 final 
Brussels,, 21 March 1991 
Proposal for a 
COUNCIL REGULATION (EEC) 
amending Regulation (EEC) No 657/64 adopting general rules for the 
application of the levy referred to in Article 5c of 
Regulation (EEC) No 601/66 in the mille and milk products sector 
(presented by the Commission) 
EXPLANATORY MEMORANDUM 
When the milk quota arrangements were being established in April 
1984, no account was taken of the position of producers who had taken 
on commitments under the non-marketing and conversion schemes under 
Council Regulation (EEC) 1078/77. These commitments implied giving 
up production totally for four years (conversion) or five years (non-
market ing). 
The earliest date of commencement of the non-marketing and conversion 
period had been towards the end of 1978 and it was possible for 
producers to commence under the schemes up to 1983. 
On the termination of the period over which they had been committed 
to cease production, the so-called SL0M producers were not 
allocated a milk quota but were successful In obtaining a ruling of 
the Court of Justice in 1988 to the effect that Community legislation 
should be changed in order to have quotas allocated to them. 
Accordingly, the rules were changed in March 1989 by adding a new 
Article 3(a) in Council Regulation 857/84. 
However, the Court of Justice in two rulings handed down on 11 
December 1990 declared invalid this article 3(a) insofar as (i) it 
allocated to SL0M producers a specific quantity equivalent to 60% 
only of their reference quantity and (ii) it excluded from the 
benefits of the new arrangements producers whose period of conversion 
and non-marketing had expired before 31 December 1983, and who had 
not resumed production at that date. 
The Commission must therefore present a new proposal to the Council 
in order to align Article 3(a) of Regulation 857/84 to the rulings of 
the Court. 
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The quantities necessary to meet the entitlements of the producers 
covered by the March 1989 regulation (so-called SLOM I producers 
were met from a Community reserve of 600,000 tonnes, drawn up for 
this purpose wi thout a corresponding reduction in the overall total 
guaranteed quantities of the Member States. 
A similar approach is precluded on this occasion given that the 
Commission has recently made a proposal to the Council to reduce the 
total guaranteed quantities by 2%. It would be possible of course to 
reduce the guaranteed quantities for all Community producers by means 
of a linear reduction in order to provide for an increased Community 
reserve, But while this solution would be conceivable from the point 
of view of market balance, for the reasons given below it would not 
provide the most appropriate solution in this instance. 
The Commission is proposing to meet the entitlements of the so-called 
SLOM II producers via the nat iona I reserves. This means that the 
quantities to be allocated must be found in each Member State 
concerned within its national total guaranteed quantity. This 
solution takes into account the fact that quantities produced by SLOM 
producers whose non-marketing or conversion period started after 
1981 were part of the total guaranteed quantities fixed for most 
Member States when the quota quantity was being established. It will 
be recalled that this quantity was fixed generally on the basis of 
production in 1981 plus 1%. However, for Ireland and Italy, quotas 
were based on the production for 1983. In the case of Italy no 
redistribution follows from this proposal since there was no take-up 
of the SLOM schemes. In the case of Ireland the additional 
redistribution necessary under SLOM II should not be as significant 
as in the case of SLOM I where the requirements were met from the 
Community reserve. 
As regards the extension of the entitlement of the SLOM producers, 
the Commission's proposal complies with the two requirements 
stipulated by the Court. In addition, going beyond the Court's 
rulings the proposal removes some restrictive aspects and strikes a 
fair balance between on the one hand the rights and obligations of 
SLOM producers, and on the other the position of the other producers. 
It is necessary nevertheless to set some limits on eligibility and 
use of quota. The present proposal would imply an estimated 
additional 600.000 tonnes of milk. It should be noted that a 
proposal involving no restrictions such as the minimum production 
requirements, limits on sale of quota etc. could require several 
million tonnes of extra milk quota. It would imply also the total 
failure of the 1978 scheme (cost 1200 MECU to the Community) which 
had been designed to encourage farmers to leave milk production. 
In conclusion, having regard to the need to avoid an overall increase 
in quota in the present market situation, the inclusion in the 
overall quantity fixed originally of production in 1981 by SLOM 
producers, and the difficulty of requiring producers in all Member 
States to bear the increased burden for the benefit of some producers 
only, the Commission considers it more equitable to have recourse to 
the national reserves in this instance. The burden to be imposed on 
producers in the individual Member States concerned should be 
attenuated by effective measures to ensure that, quotas granted to 
SLOM producers are utilised in the manner intended. 
-A-
Proposal for 
Council Regulation (EEC) No /91 
of 
Regulation (EEC) No 857/84 adopting general rules for the 
application of the levy referred to in Article 5c of 
Regulation (EEC) No 804/68 in the milk and milk products sector 
*EHE COONCIL OF THE EUROPEAN COMMUNITIES, 
Having regard to the Treaty establishing the European Economic Community, 
Having regard to Council Regulation (EEC) No 804/66 of 27 June 1968 on the 
common organization of the market in milk and milk products, 1 as last 
amended b% Regulation (EEC) No 3641/90,2 and in particular Article 5c(6) 
thereof, 
Having regard to the proposal from the Commission, 
Whereas the Court of Justice, in its judgments given on 11 December 1990 in 
Cases C-189/89 and C-217/89, declared invalid Article 3a of Council 
Regulation (EEC) No 857/843, as last amended by Regulation (EEC) 
No 306/91,4 in so far as it excludes from the grant of a special reference 
quantity .under that provision producers whose period of non-marketing or 
conversion expired before 31 December 1983 or 30 September 1983, as the 
case may be, and in so far as it restricts the special reference quantity 
provided for in that provision to 60% of the quantity of milk delivered by 
the producers in question during the period of twelve calendar months prior 
to the application for the non-marketing or conversion premium; whereas, 
therefore, it is necessary to amend the relevant provisions of the above-
mentioned Article 3a in order to comply with the above-mentioned judgments; 
1 OJ No L 148, 28.6.1968, p, 13. 
2 OJ No L 362, 27.12.1990, p. 5. 
3 OJ No L 90, 1.4.1984, p. 13. 
4 OJ No L 37, 9.2.1991, p. 4. 
Whereas a greater increase in the Community reserve provided for in Article 
5c(4) of Regulation (EEC) No 804/68 cannot be envisaged without prejudicing 
the equilibrium of the milk market; whereas, therefore, in order to grant 
new special reference quantities to producers having given a non-marketing 
or conversion undertaking, the possibility of reducing the reference 
quantities for other producers should be provided for, as suggested by the 
Court of Justice; whereas provision should therefore be made to increase 
national reserves and Articles 3 and 5 of Regulation (EEC) No 857/84 should 
be amended to this end; 
Whereas a producer who has given a non-marketing or conversion undertaking 
should nevertheless be allowed, in all cases where he has been able to 
obtain a special reference quantity pursuant to the general provisions of 
the additional levy scheme, to benefit from the provisions of Article 3a of 
Regulation (EEC) No 857/84 since the said quantity is deducted from the 
quantity obtained pursuant to Article 3a; 
Whereas in its judgments the Court of Justice stated that the Coinrnunity 
legislator may validly introduce a time limit concerning the expiry of the 
non-marketing or conversion period with the aim of preventing producers 
from benefiting from Article 3a of Regulation (EEC) No 857/84 if they did 
not deliver milk during all or part of the reference year in question for 
reasons not connected to a non-marketing or conversion undertaking; whereas 
all the Member States concerned took 1983 as the reference year; whereas, 
therefore, a producer who, with every opportunity to do so, had not resumed 
milk production between 1 January 1983 and 1 April 1984 had adequately 
demonstrated his wish to abandon milk production definitively for personal 
reasons not connected to the undertaking given or its consequences; 
whereas, therefore, only those producers whose period of non-marketing or 
conversion expired on or after 1 January 1983 should be allowed to benefit 
from the provisions of Article 3a; 
- 6-
Whereas, in the interests of sound management and with a view to avoiding 
excessive administration, the time limits for submission of applications 
should only be re-opened for those producers whose period of non-marketing 
or conversion expired in 1983 prior to 31 December 1983 or 
30 September 1983, as the case may be, or for those producers who, having 
obtained a reference quantity pursuant to the general provisions of the 
additional levy scheme, nevertheless intend to make use of the provisions 
of this Regulation; 
Whereas, in its judgments, the Court of Justice agrees that there were gool 
grounds for calculating the special reference quantity on the basis of the 
production volume which the producers in question had achieved prior to 
entering into a non-marketing or conversion undertaking, and that the 
quantity thus calculated could validly have an abatement rate applied to it 
for the purpose of ensuring that the producers in question do not receive 
an undue advantage over producers who continued to deliver milk during the 
reference year; whereas, therefore, the Member States should apply to the 
producers in question an abatement rate representative of all the 
abatements applied to the producers referred to in Article 2 of Regulation 
(EEC) No.857/84; 
Whereas Article 3a of Regulation (EEC) No 857/84 contains certain 
provisions intended to ensure that the quantities granted are actually 
produced by those to whom they are granted; whereas, while the sanction 
provided for in paragraph 2 of the said Article in the event of producers 
not achieving a minimum production level over a period of two years has to 
be relaxed, the other restrictive conditions should nevertheless be 
maintained in order that the effort made by all producers to supply the 
national reserve is balanced by the finding that quantities granted under 
the present scheme are not intended to give an undue advantage to those to 
whom they are granted; 
Whereas the producers affected by the above-mentioned provisions will only 
be in a position to know the precise amount of their' special reference 
quantity during the eighth period of the additional levy scheme; whereas it 
seems fair to make allowance for this in the collection of the levy; 
whereas it should also be specified that where a special reference quantity 
is returned to the Coramunity reserve pursuant to Article 3a(3) the producer 
in question will not be liable for the additional levy in respect of the 
quantities nevertheless produced, 
HAS ADOPTED THIS REGULATION: 
- *-
Article 1 
Regulation (EEC) No 857/84 is hereby amended as follows: 
1. In Article 2(3), "Articles 3 and 4" is replaced by "Articles 3, 3a and 
4". 
2. In Article 3a: 
(a) in paragraph 1 
(1) in the first indent the words "expires after 31 December 1983" 
are replaced by "expires, without prejudice to the provisions 
of the last subparagraph, on 31 Deoember 1983" 
(2) the second indent is replaced by the following: 
"- who, being premium transferees, have not received a 
reference quantity pursuant to Article 2 of this 
Regulation, " 
(3) point (b) is replaced by the following: 
"(b) establish in support of their request, to the 
satisfaction of the competent authority, that they are 
able to resume milk production on their holding ; " 
(4) point (c) is deleted; 
(5) point (d) is replaced by the following: 
"(d) undertake, as regards the definitive special reference 
quantity, not to apply for assistance under any 
programme for the abandonment of reference quantities 
until the end of the eighth period of appHcation of the 
additional levy scheme or, in the case referred to in 
the last subparagraph, until ... 
provided that the additional levy scheme is extendfid. " 
(6) the following subparagraph is added: 
"Producers whose period of non-marketing or conversion, in 
performance of the undertaking given under Regulation (EEC) 
No 1078/77, expired in 1983 or, in the case referred to in the 
first indent, during the period from 1 January to 
30 September 1983 inclusive, or, as the case may be, after the 
dates set out in the first indent if they had received a 
- * -
reference quantity on the terms referred to in Article 5(4)(b) 
and/or Article 9(2) of Regulation (EBC) No 1546/88 in respect 
of holdings having been the subject of a non-marketing or 
conversion premium, sha.11 receive on a provisional basis, on 
application submitted within a time limit of three months from 
.... a special reference quantity on the terms laid down In 
(a), (b) and (d) above." 
(b) paragraph 2 is replaced by the following: 
"2. The special, reference quantity shall be determined by deducting 
a percentage representative of all the abatements applied to 
the producers referred to in Article 2, and to be fixed, by the 
Member State according to objective criteria, from the quantity 
of milk delivered or the quantity of milk equivalent sold by 
the producer during the twelve calendar months preceding the 
month in which the application for the non-marketing or 
conversion premium was made, as determined by the compétent 
authority concerned pursuant to Article 5(l)(e) of Regulation 
(EBC) No 1391/78,5 as last amended by Regulation (EBC) 
No 84/83,6 and for which the producer has not lost his 
entitlewent to the premium. 
5 OJ No L 167, 24.6.1978, p. 45. 
6 OJ No L 13, IS.1.1983, p. 5. 
4-
Where the producer has obtained a reference quantity, in 
respect of the holding having been the subject of a non-
marketing or conversion undertaking, pursuant to Article 3(1) 
and (2) and/or Article 4(1 )(b) and (c) and/or Article 5(4) (b) 
and/or Article 9(2) of Regulation (EEC) No 1546/88,7 the 
special reference quantity referred to in the first 
subparagraph of this paragraph shall be reduced by such 
quantity. 
Where the producer has transferred part of his holding during 
the non-marketing or conversion period: 
the transferor's special reference quantity shall be 
determined in accordance with the first subparagraph on the 
basis of the quantity for which entitlement to the premium 
has been retained; 
the transferee's special reference quantity shall be 
determined in accordance with the first subparagraph on the 
basis of the quantity for which entitlement to the premium 
has been acquired. " 
(c) paragraph 3 is replaced by the following: 
"3. If, within two years from 29 March 1989 or, in the case 
referred to in the loot ERibparagraph of paragraph 1, from 
.. «, 
provided that the additional levy scheme is extended, the 
producer can prove, to the satisfaction of the competent 
authority, that he has actually resumed direct sales and/or 
deliveries and that the direct sales and/or deliveries 
reached a level greater than or equal to 80% of the 
provisional reference quantity during the last tweive 
months, the special reference quantity shall be 
7 OJ No L 139, 4.6.1988, p. 12. 
40 
definitively allocated to him. If this is not the case, 
the reference quantity definitively allocated shall be 
equal to the quantity actually delivered or sold directly, 
and the balance shall be returned to the Community reserve 
and/or the national reserve, as the case may be. Tne level 
of actual direct sales and/or deliveries shall be 
determined taking into account the trend of production «: < 
the producer's holding, seasonal conditJ.ons and any 
exceptional circumstances." 
(d) the second subparagraph of paragraph 4 is replaced by the 
following: 
"Where the holding is sold or leased before the end of the 
eighth period of the additional levy scheme,, or in the case 
referred to in the last subparagraph of paragraph 1, before ... 
provided that the additional levy scheme is extended, the 
special reference quantity shall be returned to the Community 
reserve- and/or the national reserve, as the case may be. Where 
only part of the holding is sold or leased, part of the special 
reference quantity shall be returned to the Community reserve 
and/or the national reserve, as the case may be. Such part 
shall be calculated on the basis of the fodder area sold or 
leased in accordance with detailed rules to be defined in 
accordance with the procedure laid down in Article 30 of 
Regulation (EBC) No 804/68." 
(e) in paragraph 5 the words "sixth period of application of the 
additional levy scheme" are replaced by "eighth period of 
application of the additional levy scheme or, in the case 
referred to in the last subparagraph of paragraph 1 and 
provided that the additional levy scheme is extended, before 
AA-
(f) in paragraph 6, the words "until the end of the additional levy 
scheme" are replaced by "until the end of the eighth period of 
application of the additional levy scheme or, in the case 
referred to in the last subparagraph of paragraph 1, until ... 
provided that the additional levy scheme is extended. " 
3. In Article 5, "Articles 3 and 4" is replaced by "Articles 3, 3a and 
4". 
Article 2 
This Regulation shall enter into force on the day of its publication in the 
Official Journal of the European Communities. 
Point 2(c) of Article 1 shall apply from 28 March 1991. 
This Regulation shall be binding in its entirety and directly applicable in 
all Member States. 
Done at Brussels. For the Council 
The President 
- A2-
FICHE FINANCIERE 
1. LIGNE BUDGETAIRE Chapi tre B 01-20 CREDITS 5.534 Mio ECU 
2. INTITULE DE LA MESURE : 
Proposition de règlement modifiant le règlement (CEE) n' 857/84 portant règles géné­
rales pour l'application du prélèvement visé à l'article 5 quater du règlement (CEE) 
n* 804/68 dans le secteur du lait et des produits laitiers. 
3. BASE JURIDIQUE : Article 5 quater du règlement (CEE) n' 804/68 
4. OBJECTIFS DE LA MESURE : 
Suite à des arrêts de la Cour de Justice, prévoir les dispositions nécessaires pour 
l'attribution de quantités de référence à certains producteurs 'SLOM*. 
5. INCIDENCES FINANCIERES 
5.0 DEPENSES A LA CHARGE 
- DU BUDGET DES CE 
(RESTITUTIONS/INTERVENT IONS) 
- DC0 DUBSETA NATIONAUX 
-«© AUlHfii iELIEURJ» 
5.1 RECETTES 
- RESSOURCES PROPRES DES CE 
(PRELEVEMENTS/DROITS DE DOUANE) 
- SUR LE PLAN NATIONAL 
5.0.1 PREVISIONS DES DEPENSES 
5.1.1 PREVISIONS DES RECETTES PERIODE DE 
12 MOIS 
p .m 
1993 EXERCICE EN 
COURS (91) 
p .m 
1994 EXERCICE 
SUIVANT (92) 
p .m 
1995 1996 
5.2 MODE DE CALCUL 
6.0 PINANCEMfNT POSSIBLE PAR CREDITS INSCRITS AU CHAPITRE CONCERNE DU BUDGET 
EN COURS D'EXECUTION 
6.1 FINANCEMENT POSSIBLE PAR VIREMENT ENTRE CHAPITRES DU BUDGET EN COURS 
D'EXECUTION 
6.2 NECESSITE D'UN BUDGET SUPPLEMENTAIRE mw-mu 
fiVi t I fHf>J-l 
6.3 CREDITS A INSCRIRE DANS LES BUDGETS FUTURS 
OBSERVATIONS : 
S'agissant des modalités pour l'attribution et la détermination c"Tf> quantités d% réfé­
rence pour certains producteurs, préi^-é^ <J:L iëserves nationales «t donc sans augmenta­
tion du niveau giclai du Quota, la •.^-•^.^ ,t i pa- d'incidence pou:" se budget. 

:Si; 0254-1475 
COM(9i) 96 final 
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