CŒvlvlISSION OF THE EUROPEAN COMvïUNITIES 
C0M(91) 339 final 
Brussels, 24 October 1991 
Proposal for a 
COUNCIL REGULATION (EEC) 
on the common organization of the market 
in raw tobacco 
Proposal for a 
COUNCIL REGULATION (EEC) 
fixing the premiums for leaf tobacco by group of tobacco 
varieties and the processing quotas allocated by group 
of varieties and by Member State 
(presented by the Commission) 
- 2 -
EXPLANATORY MEMORANDUM 
REFORM OF THE TOBACCO MARKET ORGANISATION 
Some 200,000 holdings with an average production area of 1 hectare each are 
producing annually around 400,000 tonnes of leaf tobacco in the Community. 
Production takes place mainly in Italy (49%), Greece (31%) and to a lesser 
extent in Spain (10%), France (7%), Germany, Portugal and Belgium (3%). 
Overall consumption in the Community stands at 600,000 tonnes of baled 
tobacco, of which 72% is imported. Out of an annual 350,000 tonnes baled 
tobacco production, 165,000 tonnes are consumed in the Community and 
185,000 tonnes 53% or are exported. 
Support for the tobacco sector is not in conflict with the Commission's 
policy, which aims to combat smoking for public health reasons. Ending 
tobacco production would not necessarily bring about a reduction in 
cigarette consumption. In that event, the manufacturers would simply 
obtain supplies from non-member countries. 
As long as demand for tobacco exists it is reasonable that the product 
should be supplied and supported at producer level in the Community. Apart 
from the market aspect, the socio-economic position of tobacco producers 
who are located in the least developed parts of the Community and often 
have few economic alternatives, requires that worthwhile support continues 
to be available. On the other hand the emphasis in the support system must 
be on encouraging varieties usually of low yield, that can find a place in 
the market. 
In the proposals for prices and related measures (1991/92) (C0M(91) 72 
final), the Commission announced a change in the basic tobacco market 
mechanism to permit its implementation for the 1992 harvest. The Commission 
is presenting this proposal in advance to allow economic operators to 
adjust to the new rules of the market organisation. 
- 3 -
The tobacco sector presents great technical complexity. To take this 
situation into account, the Commission staff asked a group of external 
experts to prepare a report analysing the functioning of the market 
organization and presenting possible improvements. This report has been 
very valuable to the Commission staff in preparing this reform. In 
addition the background of a general reform of the CAP and of multilateral 
négociations has been taken into consideration. 
The cost of the market organization for tobacco rose by 27% from 1988 to 
1990, despite the introduction of a stabiliser. This increase is largely 
due to an expansion in the production of low-value varieties for which 
there is no outlet on the Community market and which are exported to the 
world market at prices which are below the premiums and refunds paid on 
them - in effect at negative prices. The present system does not permit 
these problems to be avoided mainly because it is based on a series of 
maximum guaranteed quantities, each being subject to a butoir of 15% and of 
premiums linked to 34 varieties, many of which are indistinguishable after 
the tobacco has been processed. This allows producers to claim the highest 
available premium and to minimise the effectiveness of the MGQ. (For one 
variety, production exceeded the MGQ by as much as 1000% but the maximum 
reduction in the price and premium under the stabiliser system is only 
15%.) 
To solve these problems the attached proposals comprise: 
a regrouping of varieties-, 
a temporary system of quotas; 
measures to strengthen the role of producers and to convert 
production to varieties which are easier to market. 
SUMMARY OF THE PROPOSALS 
The proposals for the tobacco market organisation fall under three main 
headings, namely premium, production control and production conversion. 
- 4 -
1. Premium 
A premium Is to be paid to the producer by the first processor when 
the tobacco is purchased. The EAGGF will immediately reimburse this 
amount to the processor. A system of guaranteed advance payments 
based on quantities under contract may be established. The level of 
the premium is to be fixed for five groups of varieties according to 
the type of curing, i.e. flue-cured, light-air cured, dark-air cured, 
sun-cured and fire-cured and for three aromatic oriental varieties, 
i.e. Basma, Katerini and Kaba Koulak classic. 
These premium arrangements cover the period from the 1992 harvest 
to the 1996 harvest. 
2. Production control 
A cultivation contract between the producer and the processor is 
compulsory for the payment of the production aid. 
A maximum threshold of 340,000 tonnes divided between the different 
groups is introduced. The level of the threshold corresponds to the 
1987 Commission proposal when the stabilizers were introduced. 
To ensure that this threshold is complied with a quota system is 
established for the 1992 to 1996 harvests. Initially the quotas are 
distributed among the processors on the basis of the average 
quantities processed over the past three years. However, the 
particular situation of certain speculative productions is taken into 
account during this distribution. This transitional period when the 
quotas are distributed to the processors will serve to prepare the 
measures required for the subsequent distribution of quotas to 
producers under satisfactory conditions. 
3. Production conversion 
A specific aid of 10% is paid to the producers' group if the 
cultivation contract is signed between a processor and a producers' 
group. 
- 5 -
An extensive research programme permits the identification of low-tar 
varieties of tobacco (less harmful). The budget for this programme is 
obtained from an advance deduction from the production aid. 
There is provision for specific programmes for the conversion of 
Tsebelia and Mavra production to a higher-quality tobacco or to some 
other agricultural product. The cost of this programme is calculated 
taking into account the amount paid previously as a premium for those 
var iet ies. 
To ensure the uniform implementation of Community rules in the 
tobacco sector, specific national agencies are created with Community 
financial support up to a maximum level of 50 %. 
If measures are necessary to facilitate the transition from the 
previous system to the new one, appropriate measure are to be decided 
by the Commission by the management committee procedure. 
As regards the system of premiums and production control, the 
appended Regulation simply lays down the temporary framework applying 
until the 1996 harvest. 
Before 1 April 1995, the Commission will present to the Council 
proposals concerning the premium and production control to apply from 
the 1997 harvest. 
As soon as possible the Commission will also submit a proposal for a 
Regulation on inter-trade organizations and agreements in the tobacco 
industry. 
This reform will have no impact on SMEs. 
- 6 -
Proposal for a 
COUNCIL REGULATION (EEC) 
on the common organization of the market 
in raw tobacco 
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, 
Having regard to the opinion of the Economic and Social Committee, 
Whereas the operation and development of the common market for 
agricultural products must be accompanied by the establishment of a 
common agricultural policy, to include in particular a common 
organization of markets, which may take various forms depending on the 
product; 
Whereas it is the purpose of the common agricultural policy to achieve 
the objectives of Article 39 of the Treaty, and, in particular in the 
raw tobacco sector, the stabilization of markets and a fair standard of 
living for the agricultural population concerned; whereas these 
objectives may be achieved by adapting resources to requirements, in 
particular by means of a quality policy; 
- 7 -
Whereas the present situation on the tobacco market, on which supply 
does not correspond to demand, calls for a substantial overhaul of the 
Community arrangements which have governed the market hitherto, while 
ensuring the continuation of tobacco growing by the traditional 
producers; whereas such an overhaul requires simplification of the 
market management mechanisms, limitation of production in line with the 
requirements of the market and the demands of the budget, and stronger 
means of control to ensure that the management mechanisms fully achieve 
the objectives of the common market organization; 
Whereas tobacco varieties can be classified in groups according to 
cultivation technique and production costs, taking account of the 
descriptions used in international trade; 
Whereas competition on the tobacco market calls for some support of 
tobacco production; whereas such support should be based on a premium 
system allowing the disposal of tobacco in the Community; 
Whereas the premium system can be managed efficiently by means of 
cultivation contracts between growers and first processors which 
guarantee stable outlets to the growers and regular supplies to the 
processor; whereas payment of a sum equivalent to the premium by the 
processor to the producer at the time of delivery of the tobacco 
covered by the contract, subject to compliance with the quality 
requirements, provides support for the growers while facilitating 
management of the premium system; 
Whereas, in order to limit Community tobacco production and to 
discourage the production of varieties which are not readily disposed 
of, a maximum global guarantee threshold should be laid down for the 
Community and divided annually into specific guarantee thresholds for 
each group of varieties; 
- 8 -
Whereas, to ensure that the guarantee thresholds are observed, a 
processing quota system must be instituted for a limited period; 
whereas, for a transitional period, the Member States must allocate, 
within the guarantee thresholds, processing quotas to the firms 
concerned, applying the Community rules laid down for the purpose to 
ensure fair allocation on the basis of the quantities processed in the 
past, but disregarding any abnormal production levels; whereas the 
necessary measures will be taken to permit subsequent allocation of the 
quotas to the producers, under satisfactory conditions; 
Whereas it is indispensable that first processors do not conclude 
cultivation contracts for quantities exceeding the processing quotas 
allocated to them; whereas reimbursement of the premium must be 
limited to an amount corresponding to no more than the processing 
quota; 
Whereas provision should be made initially for the premium and 
production limitation systems to run until 1996 so that they can be 
reviewed in the light of experience and possibly adapted for the 
subsequent period; 
Whereas measures to orientate production can help to stabilize the 
tobacco market and improve the quality of production; whereas specific 
aid will enable producer groups to contribute towards the improvement 
of the organization and orientation of production; whereas a research 
programme financed with the proceeds of a deduction from the premium 
will enable tobacco growing to be brought more closely into line with 
Community requirements as regards public health; whereas, lastly, a 
conversion programme for growers of Mavra and Tsebelia tobacco is 
necessary because of the importance of these varieties for the economy 
of certain Community regions; 
Whereas the establishment of a single market requires a single system 
of trade at the external frontiers; 
- 9 
Whereas quantitative restrictions at the Community's external frontiers 
can be dispensed with; whereas, however, should exceptional 
circumstances arise, in order not to leave the Community market without 
protection against any disturbance, the Community should be able to 
take all the necessary measures without delay; 
Whereas unforeseen market circumstances may necessitate the adoption by 
the Commission of exceptional market support measures; 
Whereas the achievement of a single market would be jeopardized by the 
grant of certain aid; whereas the Treaty provisions governing the 
appraisal of aid granted by Member States and the prohibition of aid 
incompatible with the common market should be applied to the tobacco 
sector; 
Whereas, in accordance with 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 2048/88(2), the Community 
should bear financial responsibility for expenditure incurred by Member 
States pursuant to this Regulation; 
Whereas experience shows that more stringent controls in the tobacco 
sector are essential; whereas in appropriate cases certain supervisory 
powers could be assigned to an independent supervisory agency in order 
to deal with the specific requirements of the tobacco market; 
(1) OJ No L 94, 28.4.1970, p. 13. 
(2) OJ No L 185, 15.7.1988, p. 1. 
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Whereas the common organization of the tobacco market must take 
account, simultaneously and appropriately, of the objectives laid down 
in Articles 39 and 110 of the Treaty; 
Whereas the transition from the arrangements instituted by Council 
Regulation (EEC) No 727/70 of 21 April 1970 on the common organization 
of the market in raw tobacco(3), as last amended by Regulation (EEC) 
No 1737/91(4) to the arrangements provided for herein must take place 
in the best possible conditions; whereas transitional measures may 
prove necessary to ensure this; whereas the new arrangements should 
not become fully applicable until after the 1992 harvest, 
HAS ADOPTED THIS REGULATION: 
Article 1 
The common organization of the market in raw tobacco shall comprise 
rules on: 
- a premium system; 
- measures to orientate and limit production; 
- arrangements for trade with third countries. 
The common organization shall cover raw or unmanufactured tobacco and 
tobacco refuse falling within heading 2401 of the Combined 
Nomenclature. 
(3) OJ No L 94, 28.4.1970, p. 1. 
(4) OJ No L 163, 26.6.1991, p. 11. 
- 11 -
Article 2 
Raw tobacco varieties shall be classified in the following groups: 
(a) flue-cured: 
tobacco dried in ovens with controlled air circulation, 
temperature and humidity; 
(b) light air-cured 
tobacco dried in the air under cover, not left to ferment; 
(c) dark air-cured 
tobacco dried in the air under cover, left to ferment 
naturally before being marketed; 
(d) sun-cured 
tobacco dried in the sun; 
(e) fire-cured 
tobacco dried by fire; 
(f) Basma (sun-cured); 
(g) Katerini (sun-cured); 
(h) Kaba-Koulak (classic) (sun-cured). 
The varieties in each group are listed in the Annex. 
TITLE I 
PREMIUM SYSTEM 
Article 3 
From the 1992 harvest until the 1996 harvest a premium system shall be 
applied. The amount of the premium shall be the same for the tobacco 
varieties in each of the various groups. 
ran VIP» HiononoûH uï-H-i» t.iV>a*-* 
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The purpose of the premium shall be to supplement the incomes of 
producers whose products correspond to market requirements and to 
facilitate the disposal of tobacco produced in the Community. 
Article 4 
1. In accordance with the procedure laid down in Article 43(2) of 
the Treaty, the Council shall fix the amount of the premium for 
each tobacco harvest, taking particular account of past and 
foreseeable possibilities for the disposal of the various types 
of tobacco, under normal conditions of competition, on the 
Community and world markets. 
2. The amount of the premium shall be fixed: 
(a) per kilogram of leaf tobacco not having undergone first 
processing and market preparation; 
(b) for each raw tobacco group. 
Article 5 
Granting of the premium shall be subject to the following conditions: 
(a) the tobacco must come from a production area specified for the 
variety concerned; 
(b) quality requirements must be fulfilled; 
(c) the leaf tobacco must be delivered by the producer to the 
premises of the first processor under a cultivation contract; 
(d) any other requirements to be laid down must be fulfilled. 
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Article 6 
1. Cultivation contracts shall comprise: 
an undertaking by the first processor to pay to the grower, in 
addition to the purchase price, a sum equal to the premium at the 
time of delivery for the quantity under contract and actually 
delivered; 
an undertaking by the grower to deliver to the premises of the 
first processor raw tobacco corresponding to the quality 
requirements. 
2. The competent body shall reimburse the amount of the premium to 
the first processor against presentation of proof that the grower 
has delivered the tobacco and that the amount referred to in 
paragraph 1 has been paid. 
Article 7 
Detailed rules for the application of this Title shall be adopted in 
accordance with the procedure laid down in Article 23. 
They shall comprise: 
delimitation of the production areas for each variety; 
quality requirements for delivered tobacco; 
additional points to be included in the cultivation contract and 
the final date for its conclusion; 
the obligation for the first processor to provide a security if 
he requests an advance, and the conditions governing the 
provision and release of the said security; 
specific conditions for the grant of the premium in cases where 
the cultivation contract is concluded with a group of producers; 
- measures to be taken in the event of failure of the grower or 
first processor to fulfil his statutory obligations. 
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TITLE II 
SYSTEM OF PRODUCTION LIMITATION 
Article 8 
A maximum global guarantee threshold for the Community is hereby fixed 
at 340 000 tonnes of raw leaf tobacco per harvest. 
Every year, within this limit, the Council shall fix, in accordance 
with the procedure laid down in Article 43(2) of the Treaty, a specific 
guarantee threshold for each group of varieties, taking particular 
account of market conditions and socio-economic and agronomic 
conditions in the production areas concerned. 
Article 9 
1. To ensure observance of the guarantee thresholds a system of 
processing quotas is hereby instituted for the harvests of 1992 
to 1996. 
2. Each harvest, in accordance with the procedure laid down in 
Article 43(2) of the Treaty, the Council shall allocate among the 
producer Member States the quantities available for each group of 
varieties. 
3. On the basis of the quantities allocated pursuant to paragraph 2 
and without prejudice to the application of paragraph 4, Member 
States shall distribute processing quotas on a transitional basis 
for the 1992 and 1993 harvests among the first processors in 
proportion to the average quantities delivered for processing 
during the three years preceding the year of harvest, broken down 
by group of varieties. The procedure for allocating processing 
quotas for the subsequent harvests shall not be affected by this 
allocation. 
First processors who start business after the beginning of the 
reference period shall obtain a quantity proportional to the 
average quantity delivered for processing during their period of 
business. 
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Where appropriate, production shall be taken into account only 
within the limit of the processing quota allocated during the 
years taken into consideration. 
For first processors which begin business in the year of harvest, 
Member States shall reserve 2% of the total quantities available 
to them by group of varieties. Within this percentage, the said 
first processors shall obtain a quantity not exceeding 70% of 
their processing capacity, provided that they offer adequate 
guarantees as to the efficiency and long-term viability of their 
business. 
4. When the processing quotas are allocated as provided for in 
paragraph 3, no account shall be taken in particular, when 
calculating the reference production, of any quantities of raw 
tobacco produced in excess of the maximum guaranteed quantities 
applicable under Regulation (EEC) No 727/70. 
Article 10 
A first processor may not conclude cultivation contracts or be 
reimbursed the amount of the premium for quantities exceeding the 
processing quota allocated to him. 
Article 11 
Detailed rules for the application of this Title shall be adopted in 
accordance with the procedure laid down in Article 23. They shall 
include the adjustments, as provided for in Article 9(4), in the method 
of distribution of the quotas and the preconditions for applying the 
quotas at the level of the producers, in particular in relation to 
their previous situations. 
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TITLE III 
MEASURES TO ORIENTATE PRODUCTION 
Article 12 
1. In order to concentrate supply and adapt it to the qualitative 
requirements of the market, specific aid equivalent to 10% of the 
premium shall be granted where cultivation contracts are 
concluded between a first processor and a recognized group of 
producers and where the deliveries covered by such contracts 
account for the entire output of the members of the group. 
2. Specific aid shall be paid to the producers' group for the 
purpose of improving the organization and orientation of 
production. 
3. Detailed rules for the application of this Article shall be 
adopted by the Commission in accordance with the procedure laid 
down in Article 23. They shall include: 
the definition of producers' groups eligible for specific 
aid; 
- the conditions for recognizing producers' groups; 
the use to which specific aid may be put. 
Article 13 
1. A Community Fund for tobacco research and information shall be 
set up. It shall be financed from the proceeds of a deduction 
not exceeding 1% from the premium at the time of payment. 
2. The Fund shall finance and coordinate programmes of research and 
information to promote greater knowledge of the harmful effects 
of tobacco and the appropriate preventive and curative measures 
relevant to such effects and to orientate Community tobacco 
production towards the least harmful varieties and qualities. 
3. Detailed rules for the application of this Article shall be 
adopted in accordance with the procedure laid down in Article 23. 
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Article 14 
A three-year programme for the conversion of plantations of Mavra and 
Tsebelia tobacco to varieties more in line with market requirements or 
to other agricultural crops shall be adopted by the Commission in 
accordance with the procedure laid down in Article 23. The programme 
shall be launched immediately after the 1992 harvest. It may comprise 
specific measures to compensate growers for any loss of income due to 
the conversion. 
TITLE IV 
TRADE WITH THIRD COUNTRIES 
Article 15 
Except where this Regulation provides otherwise or where the Commission 
adopts a derogation in accordance with the procedure laid down in 
Article 23, the following shall be prohibited in trade with third 
countries: 
(a) the collection of any charge with an effect equivalent to a 
customs duty; 
(b) the application of any quantitative restriction or measure with 
equivalent effect. 
Article 16 
1. If, by reason of imports or exports, the Community market in one 
or more of the products referred to in Article 1 suffers or is 
liable to suffer serious disturbance which may jeopardize the 
objectives of Article 39 of the Treaty, appropriate measures may 
be taken in respect of trade with third countries until the 
disturbance or threat of disturbance has ceased. 
- 18 -
2. If the situation referred to in paragraph 1 arises, the 
Commission shall, at the request of a Member State or on its own 
initiative, decide on the necessary measures, which shall be 
notified to the Member States and be immediately applicable. If 
the Commission receives a request from a Member State it shall 
take a decision thereon within 24 hours after receipt of the 
request. 
3. The measures taken by the Commission may be referred to the 
Council by any Member State within three working days of the date 
of notification. The Council shall meet without delay. It may 
amend or repeal the measure in question by a qualified majority. 
TITLE V 
GENERAL AND TRANSITIONAL PROVISIONS 
Article 17 
In order to deal with unforeseen market circumstances, exceptional 
support measures may be taken in accordance with the procedure laid 
down in Article 23. The scope and duration of such measures may not 
exceed that which is strictly necessary to support the market. 
Article 18 
Except where this Regulation provides otherwise, Articles 92, 93 and 94 
of the Treaty shall apply to production of and trade in the products 
referred to in Article 1. 
Article 19 
Expenditure incurred pursuant to Title III shall be regarded as 
expenditure within the meaning of Article 1(2) of Regulation (EEC) No 
729/70. 
- 19 -
Article 20 
1. Member States shall take all the necessary measures to ensure 
compliance with the Community provisions concerning raw tobacco. 
To this end they shall notify to the Commission, within six 
months after the adoption of this Regulation, the arrangements 
they intend to make for the purposes of management and 
supervision. Within three months after such notification the 
Commission shall approve the arrangements or ask for adjustments. 
Where adjustments are required the Member State shall make them 
at the earliest opportunity. Any modification of national 
arrangements shall be notified without delay by the Member States 
to the Commission and examined by it in accordance with the same 
procedure. 
2. Each producer Member State shall set up, in accordance with its 
legal system, a specific agency to carry out certain checks in 
connection with the Community arrangements for tobacco. 
3. The agency shall be given complete administrative autonomy. It 
shall be given full powers by the Member State concerned to carry 
out the tasks assigned to it. 
Its staff shall be sufficient in number and level of training to 
accomplish the tasks specified. 
4. Before the beginning of each marketing year, the Member State 
concerned shall, acting on a proposal from the agency, draw up 
and send to the Commission a budget estimate and work schedule to 
ensure correct application of the premium system. The Commission 
may ask the Member State, without prejudice to the 
responsibilities of the latter, to make any change in the budget 
estimate or work schedule that it deems appropriate. 
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Persons designated by the Commission may at any time monitor any 
of the work carried out by the agency. 
The agency shall submit to the Member State and the Commission 
regular reports on the work which it has carried out. Such 
reports must mention any problems encountered and, where 
appropriate, suggestions as to how to improve the checking 
arrangements. 
5. 50% of actual expenditure by the agency shall be chargeable to 
the general budget of the European Communities, the remainder 
being covered by the Member State concerned. 
6. The annual amount representing the actual expenditure referred to 
in paragraph 5 shall be decided upon by the Commission on the 
basis of the particulars provided by the Member States concerned. 
The amount shall be granted when the Commission is satisfied that 
the agency has been set up and is performing the work assigned to 
it. In order to facilitate the setting up and operation of the 
agency, the amount in question may be paid in advance in the form 
of instalments during the year in question, in accordance with 
the agency's annual budget, the latter being drawn up with the 
agreement of the Member State and the Commission before the end 
of October of each following year. 
7. Member States shall take the necessary measures to ensure that 
the inspection officers designated pursuant to paragraphs 2 to 4: 
have access to the production, processing and marketing 
premises, 
- can examine accounting data and other documents relevant to 
the checking procedure, and make copies or take extracts from 
them, 
- can ask for any relevant information. 
8. Detailed rules for the application of this Article shall be 
adopted by the Commission in accordance with the procedure laid 
down in Article 23. 
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Article 21 
Member States and the Commission shall send each other any information 
necessary for the application of this Regulation. Detailed rules for 
the sending and dissemination of such information shall be adopted in 
accordance with the procedure laid down in Article 23. 
Article 22 
A Management Committee for Tobacco (hereinafter called "the Committee") 
shall be established, consisting of representatives of the Member 
States and presided over by a representative of the Commission. 
Article 23 
1. The representative of the Commission shall submit to the 
Committee a draft of the measures to be taken. The Committee 
shall deliver its opinion on the draft within a time limit which 
the chairman may lay down according to the urgency of the matter. 
The opinion shall be delivered by the majority laid down in 
Article 148(2) of the Treaty in the case of decisions which the 
Council is required to adopt on a proposal from the Commission. 
The votes of the representatives of the Member States within the 
committee shall be weighted in the manner set out in that 
Article. The chairman shall not vote. 
2. The Commission shall adopt measures which shall apply 
immediately. However, if these measures are not in accordance 
with the opinion of the committee, they shall be communicated by 
the Commission to the Council. In that event the Commission may 
defer application of the measures which it has decided for a 
period of not more than one month from the date of such 
communication. 
3. The Council, acting by a qualified majority, may take a different 
decision within the time limit referred to in paragraph 2. 
- 22 -
Article 24 
The Committee may consider any other matter raised by its chairman, 
either on his initiative or at the request of the representative of a 
Member State. 
Article 25 
This Regulation must be applied in such a way that account is taken, 
simultaneously and appropriately, of the objectives laid down in 
Articles 39 and 110 of the Treaty. 
Article 26 
Before 1 April 1995 the Commission shall submit a proposal to the 
Council concerning the arrangements provided for in Titles I and II for 
application after the 1997 harvest. The Council shall act on this 
proposal in accordance with the procedure laid down in Article 43(2) of 
the Treaty. 
Article 27 
Where transitional measures prove necessary to facilitate the 
transition from the arrangements set up by Regulation (EEC) No 727/70 
to those laid down in this Regulation, such measures shall be adopted 
in accordance with the procedure laid down in Article 23. 
Article 28 
Regulation (EEC) No 727/70 is hereby repealed with effect from the 1992 
harvest. 
Article 29 
This Regulation shall enter into force on 1 January 1992. 
It shall apply from the 1992 harvest. 
- 23 -
This Regulation shall be binding in its entirety and directly 
applicable in all Member States. 
Done at Brussels, For the Council 
The President 
24 -
ANNEX 
Classification of tobacco varieties 
I. Flue-cured 
Virginia 
Virgin D and hybrids thereof 
Bright 
II. Light air-cured 
Burley 
Badischer Burley and hybrids thereof 
Maryland 
III. Dark air-cured 
Paraguay and hybrids thereof 
Dragon Vert and hybrids thereof 
Philippin 
Petit Grammont (Flobecq) 
Semois 
Appelterre 
Nijkerk 
Misionero and hybrids thereof 
Rio Grande and hybrids thereof 
Forchheimer Havanna lie 
Nostrano del Brenta 
Resistente 142 
Goyano 
Badischer Geudertheimer and its hybrids, Pereg, Korso 
Beneventano 
Brasile Selvaggio and similar varieties 
Fermented Burley 
Havana 
- 25 -
IV. Fire-cured 
Kentucky and hybrids 
Moro di Cori 
Salento 
V. Sun-cured 
Xanthi-Yaka 
Perustitza 
Samsun 
Erzegovina and similar varieties 
Myrodata, Smyrna, Trapezous and Phi 1 
Kaba Koulak (non-classic) 
Z ichnomyrodata 
Tsebelia 
Mavra 
VI. Basmas 
VII. Katerini and similar varieties 
VIII. Kaba Koulak (classic) 
Elassona 
- 26 -
FINANCIAL S TATEMENT 
DATE: 
1. BUDGET HEADING: 17 APPROPRIATIONS: ECU 1 341 million 
2. TITLE: 
Oounci I Regulation on the cannon organization of the market in raw tobacco 
3. LEGAL BASIS: 
Articles 42 and 43 of the Treaty 
4. AIMS OF PROJECT: 
To reform the market organization in raw tobacco 
5. FINANCIAL IMPLICATIONS 
5.0 EXPENDITURE 
- CHARGED TO THE EC BUDGET 
- (REFUNDS/ INTERVENT ION) 
- NATIONAL ADMINISTRATION 
- OTHER 
5.1 REVENUE 
- Om RESOURCES OF THE EC 
(LEVIES/CUSTOMS DUTIES) 
- NATIONAL Period of 12 months 
ECU mi 11 ion Current Financial Year 
(1991) ECU mi 11 ion Following Financial Year 
(1992) ECU mi 11 ion 
1993 
5.0.1 ESTIMATED EXPENDITURE 
5.1.1 ESTIMATED REVENUE 930,9 1994 
930,9 1995 
930,9 1996 
902,9 
5.2 METHOD OF CALCULATION: 
See detaiIs in Annex 
6.0 CAN THE PROJECT BE FINANCED FROM APPROPRIATIONS ENTERED IN THE RELEVANT CHAPTER OF THE CURRENT BUDGET? 
YES 
6.1 CAN THE PROJECT BE FINANCED BY TRANSFER BETWEEN CHAPTERS OF THE CURRENT BUDGET? 
YES 
6.2 IS A SUPPLEMENTARY BUDGET NECESSARY? 
ND 
6.3 WILL FUTURE BUDGET APPROPRIATIONS BE NECESSARY? 
YES 
OBSERVATIONS: 
The budgets for 1993 to 1996 must also take account of the residual expenditure arising frcm the operation 
of the present market organization in line with point V of the Annex. 
- 27 -
ANNEX 
COST PER MARKETING YEAR OF THE MARKET ORGANIZATION IN RAW TOBACCO 
I. COST OF PREMIUMS 
Premiums (1) 
ECU (A)/t 
Quota 
(tonnes) 
DR 
Cost 
ECU m (B) Flue-
cured 
2 500 
91 800 
1,153 
264,5 Light 
air-
cured 
2 000 
72 500 
1,143 
165,7 Dark 
air-
cured 
2 000 
53 900 
1,155 
124,5 Fire-
cured 
2 200 
9 900 
1,143 
24,9 Sun-
cured 
2 000 
39 500 
1,129 
89,2 Basmas 
3 300 
25 800 
1,119 
95,3 Katerini 
2 800 
21 800 
1,119 
68,3 K. Koulak 
2 000 
24 800 
1,119 
55,5 Total 
340 000 
887,9 
(1) Including the 10X Increase. 
It should be noted that an amount equal to no more than 1% of the cost 
of the premiums, i.e. ECU 9 million, will be withheld to finance a 
Community fund for research and information on the tobacco sector. 
I I. COST OF CONVERSION OF MAVRA AND TSEBELIA 
Production of these two varieties will switch from an MGQ of 
26 500 tonnes (1991) to a quota of 14 000 tonnes. Compensation at the 
level of the proposed premiums, i.e. ECU 2 OOO/t for the 12 500 
tonnes, will be granted for the first three years: 
12 500 t x ECU 2 000 (A)/t x 1,119 (DR) - ECU 28,0 million. 
Ml. COST OF CONTROL AGENCY 
Article 20(5) and (6) states that 50% of expenditure for the agency is 
to come from the general budget of the Community. Expenditure is 
fixed annually on the basis of information provided by the Member 
States concerned. 
In the light of experience with the olive oil control agency, an 
indicative amount of ECU 30 million, 50% of which is to be defrayed by 
the Community, has been decided. 
IV. TOTAL EXPENDITURE 
(ECU mi I I ion (B)) 
Premiums 
Conversion 
Control agency 
TOTAL 1993 
887,9 
28.0 
15,0 
930,9 1994 
887,9 
28,0 
15,0 
930,9 1995 
887,9 
28,0 
15,0 
930,9 1996 
887,9 
0 
15,0 
902,9 1997 
887,9 
0 
15,0 
902,9 
- 28 -
V. REMARKS 
In view of the time necessary for the payment of the premiums, refunds 
and intervention costs under the present market organization, the 
budgets for 1993 to 1996 should take account of the remaining 
expenditure arising from the operation of the present market 
organization as follows: 
(ECU million (B)) 
Premiums 
Refunds 
Intervent ion 
TOTAL 1993 
120 
40 
130 
290 1994 
60 
10 
70 
140 1995 
20 
p.m. 
30 
50 1996 
p.m. 
0 
p.m. 
p.m. 1997 
0 
0 
0 
0 
- 29 -
EXPLANATORY MEMORANDUM 
Fixing of premiums and processing quotas for leaf tobacco 
from the 1992 harvest 
In accordance with its undertaking, the Commission has submitted a new basic 
Regulation on the common organization of the market in tobacco for the 1992 
harvest. The Regulation provides for a system of premiums and measures to 
control and convert production. 
It provides that the Council is to fix each year the premiums on leaf tobacco 
and the annual allocation of the processing quota. 
The premiums proposed for the 1992 harvest were established taking account in 
part icular of: 
the premiums granted in the past; 
the grouping of varieties into groups of varieties according to the drying 
system; 
the differences in production costs according to the group of varieties; 
the converting of production to groups of varieties most sought after on the 
market. 
The allocation of the processing quotas among groups of varieties and among the 
Member States was established taking account in particular of: 
the production of each group of varieties in the various producer countries 
as observed in the past, not including quantities in excess of the maximum 
guaranteed quantities; 
the requirements of European industry, 
the trend in consumption in Europe-, 
the trend in demand on the world market for certain aromatic varieties. 
The fixing by the Council of the premiums and processing quotas at a 
sufficiently early stage enables operators to determine their economic strategy 
in full knowledge of the circumstances. 
- 30 -
Proposal for a 
COUNCIL REGULATION (EEC) 
fixing the premiums for leaf tobacco by group of tobacco 
varieties and the processing quotas allocated by group 
of varieties and by Member State 
THE COUNCIL OF THE EUROPEAN COMMUNITIES, 
Having regard to the Treaty establishing the European Economic 
Community, 
Having regard to Council Regulation (EEC) No of on the 
common organization of the market in raw tobacco, and in particular 
Articles 4(1) and 9(2) thereof, 
Having regard to the proposal from the Commission, 
Having regard to the opinion of the European Parliament, 
Having regard to the opinion of the Economic and Social Committee, 
Whereas, when the premiums for raw tobacco are fixed, account should be 
taken of the objectives of the common agricultural policy; whereas the 
common agricultural policy aims in particular to guarantee a fair 
standard of living for the farming community and to ensure supplies at 
reasonable prices to consumers; whereas the premiums must take account 
in particular of past and foreseeable possibilities of disposal of the 
various tobacco varieties under normal conditions of competition; 
- 31 -
Whereas Article 9(2) of Regulation (EEC) No provides for the 
annual allocation of processing quotas for each group of varieties 
among the producer Member States; whereas those quotas should be fixed 
for the 1992 harvest taking account in particular of market conditions 
and the socio-economic and agricultural circumstances of the production 
areas concerned, 
HAS ADOPTED THIS REGULATION: 
Article 1 
For the 1992 harvest, the premium referred to in Article 4 of 
Regulation (EEC) No for each group of raw tobacco varieties 
shall be as set out in Annex I hereto. 
Article 2 
For the 1992 harvest, the processing quotas referred to in Article 9 of 
Regulation (EEC) No by group of varieties and by Member State 
shall be as set out in Annex II hereto. 
Article 3 
This Regulation shall enter into force on the day of its publication in 
the Official Journal of the European Communities. 
This Regulation shall be binding in its entirety and directly 
applicable in all Member States. 
Done at Brussels, For the Council 
The President 
- 32 -
ANNEX I 
Premiums for leaf tobacco from the 1992 harvest 
Premium 
(ECU) 
ECU/kg Flue-
cured 
2,273 Light 
air-cured 
1,818 Dark 
air-cured 
1,818 Fire-
cured 
2,000 Sun-
cured 
1,818 Basmas 
3,000 Katerini 
2,545 Kaba 
Koulak 
1,818 
- 33 -
ANNEX I I 
ALLOCATION OF PROCESSING QUOTAS BY MEMBER STATE AND BY 
GROUP OF TOBACCO VARIETIES IN TONNES OF LEAF TOBACCO 
ITALY 
GREECE 
SPAIN 
PORTUGAL 
FRANCE 
GERMANY 
BELGIUM Flue-
cured 
43600 
12900 
22800 
4000 
6000 
2500 
91800 Light 
air-cured 
43600 
12900 
4000 
2000 
4000 
6000 
72500 Dark 
air-cured 
17800 
13800 
17000 
3500 
1800 
53900 Fire-
cured 
9900 
9900 Sun-
cured 
14900 
24600 
39500 Other 
Basmas 
25800 
25800 Katerini 
21800 
21800 K. Koulak 
24800 
24800 Total 
(tonnes) 
129800 
122800 
40600 
6000 
27000 
12000 
1800 
340000 
- 34 -
FINANCIAL STÂTEME 
DATE: 
1. BUDGET HEADING: 171 APPROPRIATIONS: ECU 1 107 mi 11 ion 
(1992 PDB) 
2. TITLE: 
Council Regulation fixing the premiums for leaf tobacco by group of tobacco varieties and the processing 
quotas a I located by group of varieties and by Member State. 
3. LEGAL BASIS: 
Counci I Regulation on the cannon organization of the market in raw tobacco. 
4. AIMS OF PROJECT: 
To fix the premiums and allocate the quotas. 
5. FINANCIAL IMPLICATIONS 
5.0 EXPENDITURE 
- CHARGED TO THE EC BUDGET 
- (REFUNDS/INTERVENT ION) 
- NATIONAL ADMINISTRATION 
- OTHER 
5.0.1 ESTIMATED EXPENDITURE 
5.1.1 ESTIMATED REVENUE Period of 12 months 
ECU mi 11 ion 
887,9 Current Financial Year 
1991 
ECU mi 11 ion Following Financial Year 
1992 
ECU mi 11 ion 
1993 1994 
887,9 p.m. 1995 1996 
5.2 METHOO OF CALCULATION: 
See calculation in financial sheet acoonpanying the Council Regulation on the cannon organization of the 
market in raw tobacco. 
£.0 CAN THE PROJECT BE FINANCED FROM APPROPRIATIONS ENTERED IN THE RELEVANT CHAPTER OF THE CURRENT BUDGET? 
YES 
6.1 CAN THE PROJECT BE FINANCED BY TRANSFER BETWEEN CHAPTERS OF THE CURRENT BUDGET? 
YES 
6.2 IS A SUPPLEMENTARY BUDGET NECESSARY? 
ND 
6.3 WILL FUTURE BUDGET APPROPRIATIONS BE NECESSARY? 
YES 
OBSERVATIONS: 
ISSN 0254-1475 
COM (91) 339 final 
DOCUMENTS 
EN 03 
Catalogue number : CB-CO-91-449-EN-C 
ISBN 92-77-76617-4 
Office for Offîdal Publications of the European Coznmimitîes 
Lr2985 Luxembourg