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COMMISSION  OF THE  EUROPEAN  COMMUNITIES 
COM(83) 33 final 
Brussels,  9 February  1983. 
Seventh Communication  from the Commission  to the Council 
concerning  the programme for the  utilization  of co-responsibility levy funds 
in the milk sector  for the  1983/84  milk year 
COM (83) 33  f inal 

Seventh  Communication  to the Council concerning the  programme 
for the utilization  of co-responsibility  levy funds in the milk sector 
for the 1983/84  milk year 
1. Article  4(3) of Council Regulation (EEC) No.  1079/77  requires the 
Commission  to inform the Council of the  programme  of measures  it proposes 
to implement  for the use of  co-responsibility  levy funds. Accordingly,  this 
document  contains the  Commission's  proposals for the  allocation  of 
co-responsibility  levy funds for the  1983/84  milk year. 
Summary  of the use of funds generated in the period from the beginning of  
the levy (16  September  1977) to the end of the  last milk year (19 May 1982) 
2. These funds,  which,  accrue to the  Community  budget  as negative expenditure, 
have played a  role in making  possible the  financing  of new and  improved 
specific  measures  for the  development  of outlets  for surplus milk 
production  and in  contributing  to expenditure on continuing  efficient 
measures  of disposal. 
3. The sixth Communication  to the Council  (C0M(82)66  final of 10 March 1982) 
- accounted for  revenue  accruing up to 31  March 1982, indicating  both the 
expenditure incurred or proposed on  specific  measures  and the  priority 
areas on  which remaining funds  were to be spent. The  1981/82  milk year 
was subsequently extended by the Council  until  19 May 1982. 
- established the  programme  for the use of  co-responsibility  funds up to 
the end of the  1982/83  milk year. 
4· The following  table brings up to date the  allocations  to specific  measures 
made or proposed from the beginning of the levy (16  September  1977) to the 
end of the  1982/83  milk year ^ • 

- 2 -
Table 1: Allocation  of levy funds to  specific  measures 
| ' Measures Allocations  MECU | 
| Promotional  measures 148,4 | 
| Research within the  Community 16,2  | 
| Research/technical assistance/ ) 
| promotion outside the  Community  ) 45,7 ' 1 
| Improvement  of milk  quality 51,1 | 
| School milk 255,4 | 
| Butterfat  for ice  cream  j 147,1 1 
| Concentrated butter 32,0 | 
| TOTAL | 695,9 1 
This figure  (695,9  million  ECU) is  slightly  highor than the cumulative 
total plus the proposed  figure  for the  1982/83  programme  shown in the 
sixth communication.  The principal  reason for  this is that  after the 
submission of the  sixth communication  the Council decided on  changes  in 
the school milk  scheme  which make it both  more favourable and  more costly. 
5· Total  levy receipts  for the period from the beginning of the levy  until 
the end of the  1981/82  milk year  amount  to 1 310  million  ECU; as 
indicated  in Table I  695-9 million  ECU has  been spent or  allocated  for 
expenditure on new and  improved  specific  measures  and the remainder has 
contributed  or will contribute to the  priority  areas for the  disposal  of 
milk products. The representatives of producers and processors, consulted 
in the context of  co-responsibility,  did not consider that these areas had 
been sufficiently  specified. 
The 1982/83  milk year 
6. The estimated  revenue  in the 1982/83  milk year is 387  million  ECU. The 
revenue  in the period 1  April 1982-to  19 May 1982 is estimated at 
100 million  ECU, which  sum was not covered in the  Sixth communication  to 
the Council  (C0M(82)  66 final of 10 March 1982). 

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7· The Commission  also recalls  that 100  million  ECU has  been carried  over 
from the 1981 to the 1982  budget,  with a view to expenditure  in 1982 on 
additional  measures  to restrain the build-up of  skimmed  milk powder  stocks. 
8. The Commission  has already stated in  C0M(82)66  Einal of 10  March 1982 that 
it is imperative "to  continue  and intensify the  Community's  disposal 
measures  within the  Community  by introducing speciaJ sales of  skimmed  milk 
powder into sectors other  than for calf feed, if the  development  of stocks 
makes it necessary". 
9· Since stocks of  skimmed-milk  powder  in public storage had  reached  about 
500 000 tonnes  by the  middle  of the  year 1982 the  Commission  introduced by 
Regulation (EEC) No  1753/82  a scheme  of aid for the disposal of  skimmed 
milk powder  in pig and poultry feed. 
On the basis of the  first experience  of the new  scheme  (an average  selling 
price of _+ 40  ECU/100  kg compared  with the intervention price of 
146.23 ECU/100  kg) the price reduction  amounts  to _+ 105  ECU/100  kg. Thus 
each tranche  of 100 000  tonnes  would cost about 105 Million  ECU. It is 
possible,  however,  that in order to  develop  a more significant  market  for 
skimmed  milk powder  for pigs in competition  with soya, the costs  will be 
higher. 
10. The Commission  proposes,  as a supplement  to the 1982/83  programme,  that 
- part of the cost of a  programme  of disposal of  about 150 000  tonnes  of 
skimmed-milk  powder  for pig and poultry feed should be met by 
co-responsibility  levy funds. 
- 5056 of the cost of the  scheme  would be attributed to co-responsibility 
levy funds but, in  view of the  specific  1982 budget  decision carrying 
over 100 million  ECU from the 1981  budget  to the 1982  budget  for-the 
purpose  of financing new disposals of  skimmed-milk  powder,  the first 
100 million  ECU of  expenditure  in 1982  would  be met by co-responsibility 
funds. 

-'4 -
Review of actions so far 
11. Before  setting  out its proposed  programme  for the  1983/84  milk year, the 
Commission  wishes to  draw attention  to the context so far. It is of the 
opinion  that the  specific  measures  introduced as a  result  of the 
availability  of co-responsibility  levy funds have had some effect  in 
developing  outlets  for milk and for  many milk products and in easing the 
disposal  of excess production. Despite a  substantial  and continuing 
increase  in the  Community's  milk production over the period, it has proved 
possible  in the  last two or three years to  establish  a better  control  over 
the surpluses and to  restrain  costs. 
12. From its inception  on 16 September  1977 to 31  December  1981 the  yield from 
the co-responsibility  levy was about 1000  million  ECU. Expenditure by the 
Guarantee  Section of the  EAGGF in the milk sector in the years 1977 to 
1981 totalled  about 19 560  million  ECU. Thus  5.1% of  this expenditure was 
covered by  co-responsibility  funds. 
Table 2: Expenditure by the  EAGGF Guarantee  Section in the milk sector and 
revenue from the  co-responsibility  levy from 1977  onwards 
| I 1977 1978 1979 I960 1981 | 
|l. Expenditure 1 1 
| - Refunds |1.417,4 1.565,0 2.087,9 2.745,9 1.886,31 
| - Intervention 1-1.506,7 2.449,6 2.439,6 2.006,1 1.456,4| 
| Total |2.924,1 4.014,6 4-527,5 4-752,0 3-342,71 
|II.Revenue  from levy I 24,0 156,1 94,2 222,9 478,5 1 
Since about 400  million  ECU were spent over the  same period on  measures 
under specific  programmes,  expenditure of  co-responsibility  funds on  more 
general measures  represents about 3.1% of  total expenditure. 

- 5 -
Table 3: Expenditure on  special  measures  in the milk sector financed with 
co-responsibility  levy funds 
in million ECU 
1 I 1977 I 1978 I 1979 | 1980 1 1981  | 
|1. School milk I -1 10,3 1 30,0 1 45,7 1 41,4  | 
12. Butterfat  for ice  cream 1 7,5 1 28,5 1 23,8 1 24,0 1 24,4  | 
13. Concentrated butter 1 - 1 4,5 1 3,6 1 5,1 1 7,3 1 
14. 
1 Promotion/research  ) 
within the Community,) J 
Promotion  outside  ) ! - 1 10,1' 1 37,4 1 26,6 1 35,2  | 
the Community  ) 1 * 
1 i 
5. Improvement  of milk 
quality I 1 15,5 1 7,8 1 8,8  | 
6. Total 1 7,5 1 53,4 |ll0f3 1109,4 |H7,1 | 
7. Revenue |24,1 |156,1 1 94,2 |222,9 |478,5 | 
8. 6 as % of  7 131,2 1 34,1 1117,1 1 49,1 1 25,6  | 
The programme  of expenditure for the 1983/84 milk year 
13· (i) Sales promotion and  publicity 
There is widespread support  among producers and processors for the 
sales promotion  programme.  To finance the continuation of these 
measures  in the 1983/84 milk year it is proposed that 45  million  ECU 
should be  allocated.  Yfithin  this figure  the work of the Butter 
Information Council  would also continue to be supported up to a 
maximum  of 5 million  ECU. 
(ii) School milk 
It was estimated for the current milk year that the sum of 
97.5 million  ECU "would adequately finance  this programme,  two-thirds 
or 65 million  ECU of  which would be financed from levy  revenue.  In 
Regulation  (EEC) No 1188/82 the Council has  stipulated  that the 
Community  contribution,  in terms of whole milk, is to be  112.5%  of the 
target price for milk applicable in the relevant milk year. This 
decision  and the  rise in the target  price to 26.81  ECU/100  kg result 
in a revised  level of aid of 30.16  ECU/100  kg of whole milk. Milk 

- 6 -
deliveries  in the milk year  1983/84  to schools  will probably be  about 
400 000 tonnes  of whole milk equivalent. The  total cost would 
therefore  exceed 120  Million  ECU and it is proposed to  attribute 
90 million  ECU to  co-responsibility  levy funds. This  amount  includes 
5 million  ECU for  financing  a pilot project  concerning the 
distribution  of drinking milk to schools in  certain  regions of  Greece 
and Southern  Italy. 
(iii) Butterfat  for ice  cream 
The estimated quantity to be used in the  1983/84  milk year is over 
40 000 tonnes. It is proposed that 40  million  ECU be  allocated  for 
this measure. 
(iv) Concentrated butter 
The amount  to be sold for processing to concentrated butter is 
estimated at 5 000 tonnes. The  total cost will be about 9 million  ECU, 
of which two-thirds are to be financed from levy funds. A sum of 
6 million  ECU should therefore be  allocated  for this purpose. 
(v) Improvement  of milk  quality 
Measures  to improve  milk quality  have been implemented  throughout the 
Community  under Regulations (EEC) No  1271/78  and tip  2936/79,  to the 
benefit  of consumers  as well as producers. The  schemes  have mainly 
involved  technical  improvements  to milk  analysis.  Now that experience 
has been gained in the use of the new  equipment  and valuable  results 
obtained, a  programme  of intensive  counselling of milk producers 
should be  started.  It is proposed that a sum of 25  million  ECU be 
allocated  for such  measures.  This amount  should  primarily  be spent in 
those regions of the  Community  where there are  still problems  with the 
milk quality  on account of the  structural  and organisational  situation. 
(vi) Development  of markets  outside the  Community 
The existing  programme  of promotion and  market  research outside the 
Community  is continuing in  1983/84  and finance has already  been 
allocated  for this purpose  in the  last programme.  Nonetheless, in the 
light of the  potential  developments,  it is considered that a  decision 

- 7 -
should be  made now to allocate an additional  20 million  ECU, so that 
those concerned  can have the assurance  now that  some continuing 
finance  will be available to follow up actions  which appear  likely  to 
give a favourable  result. 
(vii) Skimmed  milk powder 
The Commission  considers that provision should be  made for a programme 
of the order of  250 000  tonnes  of skimmed  milk powder  for pig and 
poultry feed for the period  1 April 1983 up to 31st  March  1984. The 
estimated  financial  contribution of  50$ from co-responsibility levy 
funds requires that  100 million  ECU is included in the  programme 
summarized  below and, as  a-measure  of prudence  a reserve is also 
included in the  programme  for this and other  purposes. 
14· The programme  of specific  measures  proposed  for the  1983/84  milk year (1), 
therefore, is as follows  -
Table 4: Proposed  measures  and allocations for the  1983/84  milk year 
Measures  | Allocations 
million ECU 
1. Promotional  measures  within the | 45 
Community  • | 
2. School milk | 90 | 
3. Butterfat  for ice  cream | 40 | 
4. Concentrated  butter |' 6 | 
5. Improvement  of milk quality | 25 | 
6. Promotion/research  of new | 
markets  outside the  Community  | 
(additional  measures)  | 20 | 
7. Skimmed-milk  powder  programme  | 100 (2)  | 
8. Reserve  | 35 (3) | 
Total 1 361 1 
(1) Research within  the Community  carried  out under the 6th  programme  wilL not be 
completed  until the end of 1984; accordingly,  this programme  does not propose 
any research projects. 
(2) Estimation on the basis of the  programme  which han recently  been put into 
effect. 
(3) Taking account in particular of point  8 and of other  needs which may 
become apparent  during the period of the  programme. 

- 8 -
- This programme  should be  compared  with the  revenue'  available  from"the~ 
1982/83  milk year of 387 million  ECU to  which should be  added  100 million 
ECU not  covered  by the Sixth  communication.-
Pluriannual  programmes 
15- The Commission  considers, in the  light of its discussions with the 
interests  concerned , that some ,of the  specific  measures  now being 
implemented  would be more efficient  if there  were an assurance  of 
continuity  for a period of  more than one year. It therefore indicates 
that, irrespective of the decisions  which the Council nay ta-ce  about the 
continuation or rate of the co-responsibility levy, it  will propose  3ome 
financial  provision for continuing action on 
! - promotional  measures  within the  Community  ' 
- promotion/research  of new markets  outside the  Community  in the 
Community's  budget  for 1984 and 1985 in addition to its present proposal 
for the 1983 budget 
- research  within the Community.. 
It hopes  that the Council  will support  this pluriannual'approach. 
16. i'.ud.ret  impact 
1'he mensuros  cort.^  i ned ir,  thr- nrorrmirne  r^nrenent  1 nrrelv a 
continuati  on of tbone  i mp3 rented  under  the rjrof rarmno for the 
19c?./t3 milk year. 
The main difference  concerns  the disposal of  skimmed-mi  ].k 
powder  for feeding of pip- md poultry. 
Trie a npropri  :Ì t •> o n r, for the 19<"  3 bud pet are  based  on a. continuation 
of the various ni'-sent  m--.-! snres . The 19<\5  budr-'-t  nino nlr^Pdv 
inol.ud.es  a •vnropriati  nns for the rip- ?nd  nou] try -iropromme. 
As a re •=••••'] t -there in no  need to enter additional ao-nropri  ati ons 
in thr- 1<~'83 budget. 
The budgetary  imni cmentntion  of thi"  type of orop-ramme  is specified 
in the commentary  to the  19r>3 bud pet i  r. rispee  t <>f financial 
i-ii' 1 i r-- oiti ori by r)r':fliìCfT,s  (/«i-ti  eie  207) • 

OPINION 
of the Advisory  Committee  on Milk and Milk  Products 
(delivered  at the meeting  of 10 December  1982) 
The Committee  approved  the text of the  seventh,communication  as a whole. 
The following  comments  were made: 
(a) A representative of the  consumers  said that he  would have preferred the 
funds allocated for  measures  outside the  Community  to be used for 
promotional  measures  within the  Community  and that the  measures  to improve 
the quality of  milk should apply only in  those regions  which have genuine 
problems  as regards  quality. 
(b) A representative of the  workers  said that, at a  time when purchasing  power 
was shrinking, the best way to  promote  sales would be to cut  consumer 
prices. 
(c) A representative of the  retail trade,  supported  by other Committee  members, 
• expressed  the hope that, under the programme  for sales  promotion  and 
publicity  within the  Community,  an amount would be earmarked  for the 
training  of persons  engaged  in the sale of  milk products. 
(d) Several  Committee  members  called for a  review of the school  milk programme, 
particularly  as regards  the national contribution  (which  could be replaced 
by a contribution  from private parties) and the definition of beneficiaries. 
In some regions the  programme  should  be linked  with structural  measures 
(refrigeration  and distribution  facilities).  The continuity of the 
programme  should  be guaranteed  for a period of several years.