EN Official Journal of the European Union C 93/8

Information communicated by Member States regarding State aid granted under Commission Regulation (EC) No 1857/2006 on the application of Articles 87 and 88 of the EC Treaty to State aid to small and medium-sized enterprises active in the production of agricultural products and amending Regulation (EC) No 70/2001

(2008/C 93/06)

XA Number: XA 373/07

Member State: United Kingdom

Region: Shetland

Title of aid scheme or name of company receiving an individual aid: Shetland Cast Ewe Welfare Scheme

Legal basis: Section 4 of the Small Landholders (Scotland) Act 1911

Commission Regulation (EC) No 1857/2006

Annual expenditure planned under the scheme or overall amount of individual aid granted to the company:

Year Expenditure 2007-2008 Under GBP 50 000

Maximum aid intensity: The aid will be limited to losses caused by quarantine restrictions linked to a disease outbreak that has been formally recognised by public authorities. The aid intensity will not exceed 100 %

Date of implementation:

Duration of scheme or individual aid award: The scheme will run for ten weeks and will close on the 9 February 2008

Objective of aid: The Shetland Cast Ewe Welfare Scheme will be open to Shetland farmers and crofters facing animal welfare problems with cast ewes as a result of export restrictions imposed following the outbreak of foot and mouth disease in the United Kingdom. In Shetland, this situation is particularly serious in the case of cast ewes (ewes that are approaching the end of their breeding life in Shetland) — these old animals would normally have been sold and exported from Shetland by the end of September, destined either for a final year breeding in the more clement climate elsewhere in the United Kingdom, or to enter the food chain as sheep meat. The foot and mouth disease export ban and movement restrictions meant that the usual autumn markets for cast ewes as either breeding stock or for consumption were not available to Shetland during August/September.

The Cast ewes covered by this scheme are defined by their age (over five years) and failing physiology they are broken mouthed, lacking the teeth complement necessary to chew anything but the very softest of fodder. Supplementary feeding therefore cannot provide them with nutrition required which would allow a final breeding season. The necessity to move these animals to the type of lush pasture found in the South of England and Wales during August/September was not possible due to the export restrictions mentioned above imposed by the outbreak of FMD in the United Kingdom during that time.

The climate of Shetland is such that by October the grass has stopped growing. As a consequence, with limited natural fodder remaining, cast ewes' welfare is already beginning to suffer as they lose condition. As the winter progresses, this situation will worsen, and there will be serious welfare issues as animals starve. The majority of farmers and crofters do not have the wherewithal to kill and bury their cast ewes on-farm (indeed, so thin is the soil above bedrock in much of Shetland burial is practically impossible). As there is now no market for these animals if left they will suffer a protracted decline in condition therefore culling is the most appropriate course of action on welfare grounds.

Note: Shetland has an exemption which allows burial.

Producers will be responsible for transporting eligible animals (namely cast ewes that are at the end of their breeding life in Shetland) to a central collection centre. The operators of the collection centre will not pay producers for eligible animals. The animals will not enter the human food chain but will be transported to abattoirs for slaughter and subsequent disposal. Competitive tendering will be used to provide these services on behalf of the Scottish Government. This complies with Article 10 of Regulation (EC) No 1857/2006 where the aid must be limited to losses caused by diseases for which an outbreak has been formally recognised by public authorities

Eligible costs: Under the Shetland Cast Ewe Welfare Scheme, the operator of the collection centre will be paid a total of GBP 10 per head for each eligible animal, up to a limit of 5 000 animals in total. This GBP 10 will cover the cost of slaughter of the animal in question, the cost of burial at the Rova Head landfill site in Shetland, and the cost of transport between collection centre and abattoir, and abattoir and landfill site.

The operators of abattoirs and landfill disposal sites will be paid for the services involved in slaughtering and disposing of carcases; these costs will be determined by competitive tender for the abattoir and will be paid by the operators of the collection centre. This complies with Article 10 of Regulation (EC) No 1857/2006 where the gross aid intensity must not exceed 100 %.

Farmers and crofters will not receive any payment for cast ewes disposed of through this scheme or the costs incurred in bringing them to the collection centre, thereby avoiding overcompensation issues, and not providing an incentive for culling of animals for which another solution can be found

Sector(s) concerned: The scheme applies exclusively to SME's keeping cast ewes in Shetland. Cast ewes do not qualify for the previously notified Scottish Welfare Disposal Scheme as this is aimed solely at light lambs.

Eligible businesses must be classified as a ‘small or medium sized enterprise’ which means that the beneficiaries of this scheme (as opposed to service providers) must have less than 250 employees, less than EUR 50 million annual turnover or EUR 43 million balance sheet equity, and not be owned at a rate of more than 25 % by other companies.

Larger businesses and publicly funded government agencies are not eligible to be beneficiaries of this scheme

Name and address of the granting authority:

Shetland Islands Council 6 North Ness Business Park ZE1 0LZ Lerwick United Kingdom Contact Jon Dunn Tel (44) 1595 74 49 51

Web address: http://www.sdt.shetland.org/Schemes.aspx

Signed and dated on behalf of the Department for Environment, Food and Rural Affairs (United Kingdom competent authority)

Duncan KERR

Agricultural State Aid

Department for Environment, Food and Rural Affairs

Area 8D, 9 Millbank

C/o Nobel House

17 Smith Square, Westminster

SW1P 3JR London

United Kingdom