No C 236/4 Official Journal of the European Communities 2.9.87 
II 
(Preparatory Acts) 
COMMISSION 
Proposal for a Council Regulation establishing a Community system of aids to agricultural 
income 
COM(87) 166 final 
(submitted by the Commission to the Council on 15 april 1987) 
(87/C 236/04) 
THE COUNCIL OF THE EUROPEAN COMMUNITIES, 
Having regard to the Treaty establishing the European 
Economic Community, and in particular Articles 42 and 
43 thereof, 
Having regard to the proposal from the Commission, 
Having regard to the opinion of the European Par­
liament, 
Having regard to the opinion of the Economic and 
Social Committee, 
Whereas the medium and long-term prospects for both 
Community and world agricultural markets and the 
accumulation of significant stocks in many sectors make 
it necessary to adjust certain instruments of the common 
agricultural policy in order to restore balance on the 
markets; whereas during the period of adaptation to the 
situation the adjustments are likely to entail income 
difficulties for a section of the farming population whose 
holdings are structurally weaker; 
Whereas holdings which, though fundamentally sound 
and potentially viable, are not in a position in present 
circumstances to undertake the adjustments needed to 
enhance their efficiency, because of structural handicaps 
or for lack of the necessary capital, merit special 
attention at Community level; whereas, with a view to 
helping them to overcome their present difficulties, a 
Community system of aids to income for farmers and 
members of their families practising farming as their 
main occupation on holdings which appear capable, 
despite their present weakness, of carrying on farming at 
a later date under satisfactory economic conditions, after 
balance has been restored on the Community markets; grant them temporary, degressive income aid within a 
Community framework involving in particular a 
requirement for prior approval from the Commission of 
income aid programmes drawn up by the Member States, 
in accordance with criteria relating mainly to the 
economic situation of the holdings concerned as 
compared with that of the holdings in the geographical 
area in question as a whole; 
Whereas account should also be taken of the uneven 
distribution in the Community of holdings of the type 
concerned and of their relative concentration in the 
Member States where budget funds and consequently the 
possibilities of transitional aids are much smaller than in 
other Member States; whereas the cohesion sought by 
the Single Act therefore requires in the latter cases in 
particular a Community system of aids to agricultural 
income; whereas the level of Community assistance must 
vary according to requirements and available funds in 
the various regions of the Community; 
Whereas the purpose of the Community's contribution is 
to restore balance on the market for agricultural 
products while enabling the objective referred to in 
Article 39 (1) (b) of the Treaty to be achieved; whereas 
such Community measures may therefore be ranked as 
intervention within the meaning of Article 3 of Council 
Regulation (EEC) No 729/70 of 21 April 1970 on the 
financing of the common agricultural policy ('), as last 
amended by Regulation (EEC) No 3769/85 (2), 
HAS ADOPTED THIS REGULATION: 
Article 1 
1. A Community system is hereby instituted whereby 
the Member States may be authorized to grant aids to 
agricultural income as provided for in this Regulation. 
Whereas in order to facilitate the transition for the 
holdings concerned, it appears necessary to be able to 0) OJ No L 94, 28. 4. 1970, p. 13. 
(2) OJ No L 362, 31. 12. 1985, p. 17. 
2.9.87 Official Journal of the European Communities No C 236/5 
2. Within the meaning of this Regulation, 'aid to agri­
cultural income' shall be understood as meaning any 
public financial contribution to the liquidity position of 
an agricultural holding granted without any reciprocal 
concession or any condition on its use by the recipients, 
with a view to improving the economic and social 
situation of the farmer and his family. 
Article 2 
1. Aid to agricultural income shall fall within the 
scope of the Community system where: 
(a) it is covered by a programme drawn up by the 
Member State concerned in accordance with Article 
3; 
(b) the recipients meet the conditions laid down in 
Article 4; 
(c) the amount does not exceed the level determined in 
accordance with Article 5; 
(d) the amount is not determined by reference to: 
— prices, 
— quantities of agricultural products, or 
— production factors, with the exception of labour. 
2. Articles 92 and 94 of the Treaty shall not apply to 
the aids covered by this Regulation, with the exception 
of those referred to in Article 92 (2). 
Article 3 
1. The programme of agricultural income aids (herein­
after referred to as 'PAIA') shall include at least the 
following details: 
(a) the delimitation of the geographical scope of the 
PAIA in accordance with paragraph 2, and the 
reasons for such delimitation; 
(b) the objectives and the period within which it is 
expected to achieve them, indicating the information 
required to establish the average regional income and 
the average national income within the meaning of 
Articles 4 and 5; 
(c) the situation of the PAIA with regard to any other 
measures to encourage economic development, and 
employment and incomes in general in the area 
concerned, demonstrating the necessary coordination 
between those measures and those provided for in 
the PAIA; 
(d) the overall annual amount of forecast expenditure 
resulting from the application of the PAIA, justifying 
that amount by reference to the socio-economic 
situation of the holdings concerned; (e) elements warranting conformity with the objective 
that aids within the scope of this Regulation may not 
stimulate agricultural production; 
(f) detailed conditions for granting the aids to agri­
cultural income within the framework of the PAIA in 
question, in compliance with the conditions laid 
down in Articles 4 and 5. 
2. The geographical scope of the PAIA shall be 
delimited in terms of objective data so that it relates to 
an area in which the socio-structural characteristics of 
the agricultural holdings are broadly homogeneous. 
To that end the Member States shall take into account 
the initial situation and the trends which may be inferred 
therefrom, and in particular: 
(a) the economic and social situation of the area in 
general, and in particular the prospects for jobs 
outside agriculture, 
(b) the importance of farming, the typical types of 
produce, and the structures of the agricultural 
holdings, 
(c) the economic data relating to the profitability of 
agricultural holdings, their financial situation (capital 
and liabilities) and the average level and distribution 
of family agricultural incomes. 
3. PAIAs may limit the grant of aids to income only 
by way of an exception, in specially warranted cases, to 
determined production sectors. 
In that case, the PAIA shall indicate, in addition to the 
data laid down in paragraph 1, within the framework of 
the information referred to in the second subparagraph 
of paragraph 2, the specific characteristics of the 
production sector(s) concerned as compared to the agri­
cultural holdings located in the PAIA area as a whole. 
Article 4 
1. Farmers and members of their families working on 
the holding may qualify under the Community system 
only where the following conditions are met: 
(a) The farmer must possess adequate professional skill 
and competence and must practise farming as his 
main occupation. The latter condition shall also 
apply to members of his family for receiving income 
aid under the system. 
(b) The overall family income from the holding per 
work unit must be less than 125 °/o of the average 
regional income or, at the option of the Member 
State concerned, less than 100 % of the average 
national income. 
No C 236/6 Official Journal of the European Communities 2.9.87 
'Overall family income' shall be understood as 
meaning the income of the farmer and the members 
of his family working on the holding, including any 
non-agricultural resources. The family agricultural 
income to be taken into account shall be established 
on the basis of objective criteria relating to the 
holding. 
The average regional income shall be the average of 
the agricultural incomes from holdings per work 
unit, recorded in the area of application of the PAIA 
concerned on the basis, of a multiannual reference 
period to be determined in accordance with the 
procedure laid down in Article 9 for the whole 
period of application of the system. 
The average national income shall be the average of 
the agricultural incomes from holdings per work 
unit, recorded within the national territory in 
accordance with the same procedure as the average 
regional income. 
(c) The holding must be in a position to yield, after a 
transitional period not exceeding five years, without 
further income aid under this system or that 
provided for in Regulation (EEC) No .. ./87, at least 
the average regional income or, where appropriate, 
80 % of the average national income. 
. (d) During the period referred to under (c) the aids shall 
be granted on a degressive basis to the individual 
recipients. 
2. For the purposes of paragraph 1 (a), Article 2 (5) 
and (6) of Regulation (EEC) No 797/85 shall apply. 
3. Evidence that the condition laid down in paragraph 
1 (c) is met must be provided by a farm readjustment 
plan approved by the competent authorities of the 
Member State concerned. Such a plan shall not be 
required where an improvement plan has been approved 
under Article 2 (1) (c) of Regulation (EEC) No 797/85 
and shows that the condition laid down in paragraph 1 
(c) above is met. 
Article 5 
The level of aid to income per work unit shall be 
determined: 
(a) per farmer and per family member working on the 
holding; and 
(b) in such a way as to cover at most the difference 
between: 
— the existing overall family income from the 
holding, divided by the number of recipients on 
the holding, and 
— 125 % of the average regional income or, where 
appropriate, the average national income. Article 6 
1. Where a Member State contemplates introducing 
or amending a PAIA, it shall notify the Commission of 
the draft programme or the proposed amendment. The 
notification must contain the information required to 
enable it to be ascertained whether the conditions laid 
down in this Regulation are met. 
At the request of the Commission, the Member State 
concerned shall provide additional information. 
2. The Member State may not implement the planned 
measures before the Commission has approved the PAIA 
concerned. 
The Commission shall determine in particular whether 
the planned measures: 
(a) comply with the provisions of this Regulation, taking 
into account the objectives thereof; and 
(b) are consistent with the Community's objectives as 
regards the readjustment of markets. 
3. Within six months from the date of receipt of a 
draft PAIA or amendments thereto, the Commission 
shall decide whether to approve them after consulting 
the Committee provided for in Article 9, on condition 
that all the information referred to in the second sub­
paragraph of paragraph 1 is provided. 
Article 7 
1. Aids to agricultural income which are part of a 
PAIA approved in accordance with Article 6 (3) and 
which are granted in accordance with the conditions laid 
down in Articles 4 and 5 of this Reglation shall qualify 
for Community financing, up to the limit of that part of 
the aid corresponding to a maximum of two work units 
per holding and 2 500 ECU per work unit per year. 
2. In order to determine the Community contribution 
xo the financing of the eligible aids a Community list 
breaking down Community regions into various cat­
egories shall be drawn up in accordance with the 
procedure laid down in Article 9. 
That list shall be drawn up on the basis of a synthetic 
indicator taking into account: 
(a) as far as three quarters are concerned, the level of 
economic development measured by the indicator of 
Gross Domestic Product per inhabitant; and 
(b) as far as one quarter is concerned, the share of agri­
culture in total employment, measured by the 
percentage of non-agricultural working persons in 
the total employed. 
2.9.87 Official Journal of the European Communities No C 236/7 
3. The Community shall finance expenditure resulting 
from the grant of eligible aids to agricultural income 
according to the category of the region where the 
holding concerned is located, at the following rates: 
— 70 °/o where the regional synthetic indicator is less 
than 75 % of the Community indicator (category I), 
— 45 % where the regional synthetic indicator is equal 
to or greater than 75 % but less than 85 % of the 
Community indicator (category II), 
— 20 % where the regional synthetic indicator is equal 
to or greater than 85 % but less than 95 % of the 
Community indicator (category III), 
— 10 % where the regional synthetic indicator is equal 
to or greater than 95 % of the Community indicator 
(category IV). 
However, for the purpose of implementing this Article, 
Northern Ireland is classified within the same category 
as the neighbouring regions of Ireland. 
Article 8 
Detailed rules for the application of Articles 3 to 7 shall 
be adopted in accordance with the procedure laid down 
in Article 9. 
Article 9 
1. A Management Committee for Agricultural Income 
Aids, hereinafter referred to as the 'Committee', shall be 
set up comprising representatives from the Member 
States and chaired by a Commission representative. 
2. Within the Committee, the votes of the Member 
States shall be weighted in accordance with Article 148 
(2) of the Treaty. The chairman shall not vote. 
3. Where the procedure laid down in this Article is to 
be followed, the chairman shall refer the matter to the 
Committee, either on his own initiative or at the request 
of the representative of a Member State. 
4. The Commision representative shall submit a draft 
of the measures to be adopted. The Committee shall 
deliver its opinion on those measures within a time limit 
which the chairman may lay down depending on the urgency of the matters submitted for examination. The 
opinion shall be delivered by a majority of 54 votes. 
5. The Commission shall adopt measures which shall 
apply immediately. However, if they are not in 
accordance with the opinion of the Committee, the 
measures shall be immediately notified by the 
Commission to the Council. In that case the Commission 
may defer application of the measures it has adopted for 
not more than one month from that notification. 
The Council, acting by a qualified majority on a 
proposal from the Commission, may take a different 
decision within one month. 
6. The Committee may examine any other matter 
referred to it by its chairman, either on his own initiative 
or at the request of the representative of a Member 
State. 
Article 10 
The measures provided for in this Regulation shall rank 
as interventions within the meaning of Article 3 of Regu­
lation (EEC) No 729/70. 
Article 11 
1. By the end of a three years' period after entry into 
force of this Regulation, the Commission shall submit a 
report on the operation of this system to the Council and 
the Parliament on the basis of the information provided 
by the Member States. 
2. After examining that report, the Council, acting in 
accordance with the procedure laid down in Article 43 
(2) of the Treaty, may decide, in the light of experience 
and changes in economic conditions, to amend this 
system where necessary. 
Article 12 
This Regulation shall enter into force on 1987. 
It shall apply until [5 years after entry into force]. 
This Regulation shall be binding in its entirety and 
directly applicable in all Member States.