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SE3S COMMISSION OF THE EUROPEAN COMMUNITIES 
COM(93) 94 final 
Brussels, 9 March 1993 
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^S Proposal for a 
COUNCIL DECISION 
on further temporary national compensation for 
farmers in Germany 
(presented by the Commission) 
EXPLANATORY MEMORANDUM 
In 1992 farmers in Germany will receive some DM 3 600 million 
(±ECU 1 800 million) of national aid the grant of which compensates for 
price reductions in DM due to revaluations of the green mark in the mid and 
late 1980s. 
Under existing legal provisions this compensatory aid ceased in its 
entirety at the end of 1992. Faced with an essentially similar situation 
one year ago, but where the reduction in aid, rather than being total, was 
equivalent to a cut of some 60% (or DM 2 200 million) , the Council 
decided^^), on the basis of a Commission proposal supported by the 
European Parliament, to legislate so that, in substance, no reduction in 
the total volume of aid had to occur between 1991 and 1992. The decision 
to authorize maintenance of the volume of national aid in 1992 at a level 
equivalent to that in 1991 recognized the negative impact cessation of the 
DM 2 200 million aid would have had on farm incomes in Germany at a time 
when these were relatively low. 
Immediate and full cessation of the annual DM 3 600 million aid authorized 
until the end of 1992 (2) would have a severe impact on still low farm 
revenues in Germany. This aid represents about 15% of the value added of 
the sector. It is however evident that any continuation of the aid must 
be subject to defined ceilings which decrease over time to zero. It is 
equally important that any aid is granted in a non-trade distorting manner. 
The current proposal takes account of these considerations and involves a 
Council decision allowing Germany to continue to pay compensatory aid not 
linked to prices or to production, on a pre-set degressive basis until the 
end of 1995 after which it ceases totally. 
This measure has no impact on the EC budget. 
(1) Decision 92/392/EEC of 30 June 1992, OJ No L 215, 30.7.1992, p. 100. 
(2) See also Decision 88/402/EEC of 3£) June 1988, OJ No L 195, 23.7.1988, 
p. 70. 
- 3 -
Proposal for a 
COUNCIL DECISION 
on further temporary national compensation for 
farmers in Germany 
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 Parliament(2), 
Having regard to the opinion of the Economic and Social Committee^), 
Whereas to compensate for the lower farm incomes resulting from reductions 
in prices expressed in national currency brought about in Germany by the 
adaptation of agricultural conversion rates, Council Regulation (EEC) 
No 855/84 of 31 March 1984 on the calculation and dismantlement of the 
monetary compensatory amounts applying to certain agricultural 
products(4), as rectified by Regulation (EEC) No 1004/84(5), provided 
that, subject to certain specified conditions, a special national aid 
granted through the value added tax (VAT) system was compatible with the 
common market; whereas the aid provisions laid down in that Regulation are 
not limited in time; whereas Council Directive 85/361/EEC of 16 July 1985 
on the harmonization of the laws of the Member States relating to turnover 
taxon - Common nyntem of value added tax; derogations in connection with 
the special aids granted to certain farmers to compensate for the 
dismantlement of monetary compensatory amounts applying to certain 
agricultural products(°), laid down the conditions under which VAT could 
be used for the grant of this special aid; 
(1) 
(2) 
'(3) .... 
(4) OJ No L 90, i.4.19'84, p. L. 
(5) OJ No L 101, 13.4.1984, p. 2. 
(6) OJ Mo L 192, 2 4.7.1985, p. 18 
Whereas the Council, when adopting Directive 85/361/EEC, noted that the 
consequences of the dismantlement of monetary compensatory amounts are 
temporary and degressive; whereas in Council Decision 92/392/EEC of 30 June 
1992 on temporary national compensation for farmers in Germany( ^ ) the 
Council recognized the unsatisfactory manner in which farm incomes had 
developed in Germany and agreed on the need to allow Germany to continue to 
grant income support for the farm sector in 1992 which would otherwise have 
ceased at the end of 1991; 
Whereas Council Decision 88/402/EEC of 30 June 1988 on an aid granted to 
farmers in the Federal Republic of Germany(°) authorized Germany to grant 
another special national aid to farmers; whereas the total aid which may 
be paid in 1992 under Decisions 88/402/EEC and 92/392/EEC is of the order 
of DM 3 600 million; whereas these Decisions authorize aid only until 
31 December 1992; 
Whereas farm incomes in Germany have continued to develop in an 
unsatisfactory manner; whereas in the light of this situation it would be 
inappropriate for the income support farmers enjoy in Germany under 
Decisions 88/402/EEC and 92/392/EEC to cease on 31 December 1992; whereas 
it is therefore necessary to lay down provisions which allow compensatory 
aid to continue to be granted but at a reduced rate in 1993 and to be 
phased out totally over a pre-set limited period; 
Whereas in order to avoid distortions of competition the grant of 
compensatory aid should be linked to area; whereas due account should be 
taken of the farm structure in the new Lander, 
HAS ADOPTED THIS DECISION: 
Article 1 
Germany is hereby authorized to grant to farmers, from 1 January 1993 
until 31 December 1995, special national aid which is not linked to prices 
or to production, under the following conditions: 
(7) OJ No L 215, 30.7.1992, p. 100. 
(8) OJ No L 195, 23.7.1988, p. 70. 
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1. individual farmers shall qualify for aid per hectare of utilized 
agricultural area of their holdings. In 1993, the aid per holding 
shall not be less than DM 1 000 and shall not exceed DM 16 000. In 
1994 and 1995 these limits may be decreased as appropriate taking 
account, in particular, of the amounts referred to in point 5; 
2. Germany may lay down that farmers who cooperatively work the same 
holding receive the aid specified in point 1. The ceilings on area 
and maximum amounts shall be multiplied by the number of farmers in 
the cooperative; 
3. in principle, only farmers who are members of the German farm 
retirement pension scheme (GAL) may qualify for the scheme; 
4. derogations from points 1 and 3 shall be applied to the extent 
necessary to take account of the farm structure in the new Lander; 
5. Germany shall fix the unit amount referred to in point 1, the 
detailed rules for point 4, and all other implementing details in 
such a way as to ensure that the overall volume of the special aid 
does not exceed DM 2 200 million in 1993, 
1 500 million in 1994, 
750 million in 1995, 
zero in 1996 and subsequent years. 
Article 2 
1. Germany shall notify to the Commission drafts of detailed provisions 
and of any further amendments relating to the implementation of the 
aid scheme referred to in Article 1. 
At the request of the Commission, it- shall provide further guidance 
information. 
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2. Germany may not implement the relevant provisions before such time as 
the Commission has ascertained their compatibility with the 
stipulations set out in Article 1. 
The Commission shall decide on whether to approve the draft 
provisions within two months from the date of receiving them. 
Article 3 
This Decision is addressed to the Federal Republic of Germany. 
Done at Brussels, For the Council 
The President 
ISSN 0254-1475 
COM (93) 94 final 
DOCUMENTS 
EN 03 
16.3.93 
Catalogue number : CB-CO-93-136-EN-C 
ISBN 92-77-53851-1 
Office for Official Publications of the European Communities 
L-2985 Luxembourg