Proposal for a Council Regulation (EC) fixing compensation with regard to the reduction in individual reference quantities in the milk sector and compensation for the definitive discontinuation of milk production (94/C 108/04) COM(94) 64 final - 94/0066(CNS)

(Submitted by the Commission on 24 March 1994)

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Community, and in particular Article 43 thereof,

Having regard to the proposal from the Commission,

Having regard to the opinion of the European Parliament,

Whereas developments in the milk market have made necessary a 1 % reduction in the global quantities fixed in Article 3 (2) of Council Regulation (EEC) No 3950/92 (1), establishing an additional levy in the milk and milk products sector, as last amended by Regulation (EEC) No . . ./. .; whereas, to offset the inevitable reduction in individual reference quantities which will result, it seems necessary to provide for compensation of ECU 5 per 100 kilograms per year for 10 years, commensurate with the ajustment effort required of producers; whereas provision should be made for the possibility of paying such compensation in the form of transferable guaranteed bonds negotiable on the market;

Whereas, however, it is important not to reduce the reference quantities of small and medium-sized holdings; whereas to that end, in order to release reference quantities for allocation to the said holdings, a Community scheme should be introduced to finance the definitive discontinuation of milk production which provides for the grant of compensation to all producers who so request, subject to certain eligibility conditions, payable after they have fully and definitively ceased to produce milk; whereas the Member States must take account of the existence of agricultural leases;

Whereas Member States should also be permitted to decide whether or in which region to implement this programme, for reasons relating to the necessity to encourage structural trends and changes, or to the requirements of regional development, or to the possibility under production conditions in the region or regions concerned to free significant reference quantities or to overriding administrative needs;

Whereas the compensation for discontinuing milk production is, in principle, granted for the whole of the reference quantity; whereas, however, this right should in certain cases be limited since producers who have benefited from Article 3c of Regulation (EEC) No 857/84 (2) are excluded from the compensation;

Whereas, in the light of experience, the maximum compensation for discontinuing milk production may be fixed at ECU 17 per 100 kilograms and per year, payable for three years; whereas it may be necessary to increase the level of compensation; whereas, therefore, Member States should be authorized to put up additional financing, the amount of which may be adjusted to take account of specific regional features; whereas provision should also be made for the compensation to be paid in the form of transferable guaranteed bonds negotiable on the market;

Whereas the reference quantities thus freed must be reallocated to small and medium-sized holdings in order to prevent a reduction in their reference quantity; whereas the Community contribution to the compensation for permanent cessation of milk production must be restricted to these reallocation requirements;

Whereas, over and above this objective, provision should be made for the following periods to allow Member States who deem it necessary to continue restructuring to maintain a scheme for financing discontinuation of milk production by providing for a Community contribution to the financing of such schemes of up to 50 % of the amount of compensation fixed by the Member State, up to a maximum of ECU 2,5 per 100 kilograms and per year for 10 years; whereas the compensation may also be paid in the form of transferable guaranteed bonds negotiable on the market; whereas, if necessary, the reference quantities liberated under this scheme may remain unallocated in order to facilitate the decline in deliveries and direct sales implicit in the reduction of guaranteed total quantities;

Whereas the aim of the Community compensation is to restore market balance and may, therefore, be considered as intervention within the meaning of Article 3 of Council Regulation (EEC) No 792/70 of 21 April 1970 on the financing of the common agricultural policy (3), as last amended by Regulation (EEC) No 2048/88 (4),

HAS ADOPTED THIS REGULATION:

Article 1

1. Compensation shall be granted to producers whose reference quantity has been reduced in order not to exceed the guaranteed total quantity fixed in Article 3 (2) of Regulation (EEC) No 3950/92 for the period concerned.

2. This compensation shall be:

(a) fixed at ECU 5 per 100 kilograms per year;

(b) paid for such part of the individual reference quantity as has been and remains actually deducted in relation to the reference quantity availabe on 31 March 1994, where applicable corrected by the quantities allocated from the national reserve and transfers of reference quantities which have taken place since that date. The part so defined may not exceed in relative value the reduction applied to the quantities fixed in Article 3 (2) of Regulation (EEC) No 3950/92 for the Member State and the period concerned;

(c) paid in ten annual instalments from 1995, between 1 April and 30 September each year.

3. The Member State may pay the compensation in the form of transferable guaranteed bonds which are negotiable on the market.

Article 2

1. At the request of the party concerned and subject to the conditions laid down in this Article, the Member States shall grant, to any producer who undertakes to discontinue definitively all milk production before a date to be determined, compensation payable in three annual instalments between 1 April and 30 September each year.

However, each Member State may, on the basis of one or more of the following criteria:

- the need to encourage structural trends and changes,

- the requirements of regional development in order to avoid, in particular, the desertification of certain areas,

- the possibility, under production conditions in the region or regions concerned, that such a scheme will not free significant reference quantities,

- overriding administrative needs,

decide not to implement the scheme referred to in the preceding subparagraph in one, several or all of its regions.

2. (a) Eligible producers are those who have a reference quantity for deliveries or direct sales, excluding producers who have benefited from quantities pursuant to Article 3c of Regulation (EEC) No 857/84.

However, Member States:

- may decide not to grant compensation to producers possessing less than six dairy cows or whose annual individual reference quantity is less than 25 000 kilograms,

- shall be authorized to make the necessary provisions to ensure that, in the event that the amount of compensation corresponding to all eligible compensation applications exceeds the amount of Community financing referred to in paragraph 3, the reductions in quantities effected under this Regulation are, in so far as possible, harmoniously apportioned between the regions and collection areas.

(b) Compensation shall be granted for the reference quantity available at the end of the 12-month period in question.

(c) In the case of producers who have two reference quantities, one for deliveries and one for direct sales, the compensation shall be granted for both reference quantities.

(d) In the case of agricultural leases, the application for compensation shall be submitted by the lessee.

Member States shall determine the conditions under which the lessee may submit the application for compensation and the conditions under which the compensation is granted, taking account of the legitimate interests of the parties concerned.

3. Community financing of the compensation referred to in paragraph 1 shall be limited to the reallocation requirements referred to in the first paragraph of Article 3.

Within that limit, Member States shall be authorized to pay maximum compensation of ECU 17 per 100 kilograms and per year.

Member States may:

(a) pay compensation of less than ECU 17 per 100 kilograms and per year and use the balance to free additional quantities;

(b) contribute to Community financing by increasing the amount of compensation.

The level of the increase may be adjusted by each Member State within its territory to take account of the differing local conditions in respect of:

- milk production trends,

- the average level of deliveries per producer,

- the need to avoid hampering the restructuring of milk production,

- the existence of opportunities for converting to other productive activities,

- the siting of milk production in one of the areas as defined in Article 3 (3), (4) and (5) of Council Directive 75/268/EEC of 28 April 1975 on mountain and hill farming and farming in certain less-favoured areas (5), as last amended by Regulation (EEC) No 797/85 (6).

4. The Member State may pay the compensation in the form of transferable guaranteed bonds which are negotiable on the market.

Article 3

The reference quantities freed pursuant to Article 2 shall be reallocated, within the limits of the quantity covered by the compensation provided for in Article 1, to producers whose reference quantity remains less than 200 000 kilograms, provided that in cases where the Member State has implemented Article 1 (3) the amount of compensation still payable corresponding to the reallocated quantities is repaid.

The additional quantities referred to in the second subparagraph of Article 2 (3) (a) shall be reallocated in the following order of priority: first to extensive holdings in areas as defined in Article 3 (3), (4) and (5) of Directive 75/268/EEC, then to those in other areas and, where applicable, to producers determined on the basis of objective criteria laid down in agreement with the Commission, and particularly to small producers and producers situated in the abovementioned areas.

'Extensive holdings` means holdings on which the maximum stocking density, converted into LU in accordance with Annex I to Council Regulation (EEC) No 2328/91 (7), does not exceed 1,4 LU per hectare of total forage area on the holding calculated in accordance with the second indent of Article 4g (3) of Regulation (EEC) No 805/68 (8).

Article 4

1. From 1 April 1995 until the end of the additional levy scheme, the Member States may, at the request of the party concerned and subject to the conditions laid down in Article 2, grant any producer as defined in that Article compensation payable in 10 annual instalments from 1996, between 1 April and 30 September each year.

2. The Member State shall fix the amount of the compensation, which may vary on the basis of one or more of the criteria referred to in the second subparagraph of Article 2 (3).

Community financing shall be limited to 50 % of the compensation granted, with a maximum contribution of ECU 2,5 per 100 kilograms and per year for 10 years.

3. The reference quantities freed pursuant to this Article shall be reallocated in accordance with the second paragraph of Article 3 or, where applicable, shall not be reallocated.

4. The Member State may pay the compensation in the form of transferable guaranteed bonds negotiable on the market.

Article 5

Financing of the Community compensation provided for in Articles 1, 2 and 4 shall be considered as intervention within the meaning of Article 3 of Regulation (EEC) No 729/70.

Article 6

Member States shall forward to the Commission, before 1 April each year, all the information needed for an assessment to be made of the effectiveness of the measures provided for in this Regulation.

Article 7

The Commission shall, in accordance with the procedure laid down in Article 30 of Regulation (EEC) No 804/68, adopt the measures for applying this Regulation.

Article 8

This Regulation shall enter into force on the third day following its publication in the Official Journal of the European Communities.

It shall apply from 1 April 1994.

This Regulation shall be binding in its entirety and directly applicable in all Member States.

(1) OJ No L 405, 31. 12. 1992, p. 1.

(2) OJ No L 90, 1. 4. 1984, p. 13. Regulation repealed by Regulation (EEC) No 3950/92.

(3) OJ No L 94, 28. 4. 1970, p. 13.

(4) OJ No L 185, 15. 7. 1988, p. 1.

(5) OJ No L 128, 19. 5. 1975, p. 1.

(6) OJ No L 93, 30. 3. 1985, p. 1.

(7) OJ No L 218, 6. 8. 1991, p. 1.

(8) OJ No L 148, 28. 6. 1968, p. 24.