No C 240/16 Official Journal of the European Communities 20. 9. 89 
Proposal for a Council Regulation (EEC) on improving the processing and marketing of agri­
cultural and forestry products 
COM(89) 91 final 
(Submitted by the Commission on 19 May 1989) 
(89/C 240/06) 
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 Article 10 (1) of Council Regulation (EEC) No 
4256/88 of 19 December 1988 laying down provisions 
for implementing Regulation (EEC) No 2052/88 as 
regards the EAGGF Guidance Section (') provides for a 
Council decision on the forms of the Fund's contribution 
to measures to improve the conditions under which agri­
cultural, forestry and fishery products are processed and 
marketed with a view to achieving the objectives referred 
to in Council Regulation (EEC) No 4253/88 of 19 
December 1988 laying down provisions for implementing 
Regulation (EEC) No 2052/88 as regards coordination 
of the activities of the different Structural Funds between 
themselves and with the operations of the European 
Investment Bank and the other existing financial 
instruments (2); 
Whereas the types of investments eligible for a contri­
bution from the EAGGF Guidance Section (hereinafter 
called 'the Fund') should be defined, taking account of 
the current situation both on the agricultural markets 
and in the agriculture and food sector, as well as the 
prospects for developing outlets for agricultural and 
forestry products; 
Whereas in order to ensure a coherent improvement in 
the processing and marketing of agricultural and forestry 
products, financial assistance from the Fund for 
investments in that field should be made conditional on 
the inclusion of such investments in sectoral plans 
containing an in-depth analysis of the situation in the 
sector and the proposed improvement; 
O OJ No L 374, 31. 12. 1988, p. 25. 
O OJ No L 374, 31. 12. 1988, p. 1. Whereas, for such plans, the Commission should adopt 
sectoral Community support frameworks, to be drawn 
up in agreement with the Member States concerned, 
within the framework of the partnership, taking account, 
as appropriate, of the Community support frameworks 
adopted for plans relating to Objectives 1 and 5 (b); 
Whereas an effective means should be adopted for 
ensuring that Community action is consistent with the 
CAP; whereas the most effective way to achieve this is to 
adopt selection criteria with which to determine which 
investments should be given priority for consideration; 
Whereas in order to ensure the necessary transparency in 
the operations of the Fund, eligible expenditure should 
be defined; 
Whereas it must be ensured that investmeats are viable 
and that farmers have a share in the economic benefits of 
the action taken; 
Whereas application of the measure should in general be 
restricted to the agricultural products listed in Annex II 
to the Treaty and to forestry products; whereas in 
certain cases, however, processed products no longer 
included in the Annex may be of importance to farmers 
in so far as they create new market outlets and/or 
increase the added value of the basic product; 
Whereas, in connection with the reform of the Structural 
Funds, Regulation (EEC) No 4256/88 provides for new 
forms of assistance by the Fund as regards improving 
structures for marketing and processing agricultural and 
forestry products; whereas general rules should therefore 
be laid down for its implementation; 
Whereas to allow for the differing structural situations in 
the different regions of the Community and to ensure 
that the action of the Fund is concentrated where it is 
needed, contribution rates should be differentiated by 
category of region; 
Whereas to ensure harmony between the Community's 
actions and those of the Member State and to ensure the 
additionality of Community assistance, the investments 
selected for financing by the Fund should be co-financed 
by the Member State; 
20. 9. 89 Official Journal of the European Communities No C 240/17 
Whereas to ensure a smooth transition for the financing 
arrangements under Council Regulation (EEC) No 
355/77 (') to the new provisions in this Regulation, 
provision should be made for transitional rules regarding 
action by the Fund approved before the entry into force 
of this Regulation; 
Whereas provision should be made for the possibility of 
laying down certain specific implementing rules adapted 
to the special nature of the measure that is the subject of 
this Regulation, to ensure that it is implemented effec­
tively, 
HAS ADOPTED THIS REGULATION: 
Article 1 
Objectives of the common measure 
1. In order to facilitate the adaptation or orientation 
of agriculture in line with the development of the 
common agricultural policy, a common measure within 
the meaning of Article 2 (1) of Regulation (EEC) No 
4256/88, designed to improve and rationalize the 
treatment, processing and marketing of agricultural and 
forestry products, is hereby introduced. Within the 
framework of this measure, the Fund may participate in 
the financing of investments: 
(a) which help to guide production in keeping with fore­
seeable market trends or which encourage the devel­
opment of new outlets for agricultural products, in 
particular through the production and marketing of 
new products or of high-quality products, including 
organically-grown products; 
(b) which relieve the intervention mechanisms of the 
market organizations by furthering long-term 
structural improvement where this is needed; 
(c) which are located in regions encountering special 
problems in adapting to the economic consequences 
of developments on the agricultural markets or 
which will benefit such regions; 
(d) which help to improve or rationalize marketing 
channels or processing procedures for agricultural 
and forestry products; 
(e) which help to improve the quality, preparation and 
presentation of products or which encourage a better 
use of by-products, particularly by recycling waste. 2. The chief objective of the common measure is to 
contribute towards the achievement of Objectives 1 and 
5, as set out in Article 1 of Council Regulation (EEC) 
No 2052/88 (2) namely speeding up the adjustment of 
agricultural structures with a view to reform of the 
common agricultural policy and promoting, the devel­
opment of rural areas and of the regions whose devel­
opment is lagging behind, subject to the conditions laid 
down in Regulation (EEC) No 4256/88. 
TITLE I 
SECTORAL PLANS, COMMUNITY SUPPORT FRAME­
WORKS AND SELECTION CRITERIA 
Article 2 
Role of the sectoral plans, Community support 
frameworks and selection criteria 
In order to ensure that the processing and marketing 
sectors develop in a way that is consistent with 
Community policy, and particularly with the common 
agricultural policy, and to ensure the effectiveness of 
Community aid, the financing of investments must take 
place within the framework of plans designed to improve 
the structures relating to the various products in question 
(hereinafter called 'sectoral plans') to be drawn up by the 
Member States, and on the basis of corresponding 
Community support frameworks, drawn up with due 
regard for the selection of investments eligible for 
Community financing (hereinafter called 'section 
criteria') to be laid down by the Commission. 
Article 3 
Content of the plans 
1. The sectoral plans shall include at least the infor­
mation specified in Articles 4 and 5. 
2. The information forwarded with the sectoral plans 
must reflect the situation throughout the Member State 
in question. 
3. In the case of regions and areas covered by 
Objectives 1 and 5 (b) of the reform of the Structural 
Funds, it must be shown that sectoral plans are consistent 
with the regional or rural development plans and with 
the appropriate Community support frameworks. 
(*) OJ No L 51, 23. 2. 1977, p. 1. (') OJ No L 185, 15. 7. 1988, p. 9. 
No C 240/18 Official Journal of the European Communities 20. 9. 89 
Article 4 
Analysis of the initial situation 
1. The information referred to in Article 3 (1) must, 
as regards the current situation of the marketing and 
processing sector, include at least the following: 
(a) demarcation of the sector, and the reasons therefor: 
(b) the initial situation and the trends which can be 
inferred from it, in particular as regards: 
— the economic and social situation in general, in 
so far as this has a bearing on the plan, and in 
particular the prospective outlets for agricultural 
and forestry products, 
— the importance of argriculture and forestry, 
— the situation as regards the processing and 
marketing of the agricultural and forestry 
products covered by the plan, and especially the 
existing capacity of the undertakings concerned 
and their geographical distribution. 
2. The information referred to in paragraph 1 must be 
up to date. 
Article 5 
Objectives and implementation of the plans 
The information referred to in Article 3 (1) must, as 
regards the objectives and resources relating to the plan, 
include at least the following: 
(a) the needs to be met by the plan and the objectives 
which it is intended to achieve, in particular the 
capacity to be reached; 
(b) the economic importance of the plan for the sector 
concerned and the implications for agricultural and 
forestry undertakings; 
(c) any aid measures in place in the sector covered by 
the plan; 
(d) the means proposed for achieving the objectives, 
particularly the total amount of investment and the 
financial participation of the Member State; 
(e) the relationship of the plan to any other measures to 
encourage the harmonious development of the whole 
economy; 
(f) the estimated time required for the execution of the 
plan, which in principle should be between three and 
five years; 
(g) the likely effects on the environment and, where 
appropriate, the environmental measures to be taken; (h) the administrative, legislative or financial measures 
adopted or to be taken to implement the plan, in 
particular details of the intended form of action and 
the authorities or bodies designated in accordance 
with Articles 14 (1) and 16 (1) of Regulation (EEC) 
No 4253/88; 
(i) a description of the national arrangements for the 
management and control of the operational 
programmes or global grants which are the subject of 
the application for aid. 
Article 6 
Updating and new plans 
If the period initially estimated by the Member State for 
implementation of a plan has expired, an updated or new 
plan must, in addition to the information referred to in 
Articles 4 and 5, include a report showing: 
(a) the progress made in relation to the forecasts in the 
expired plan, including the public funds, made 
available; 
(b) a description of developments in the situation 
regarding the processing and marketing of products, 
showing that there is a need for updating or for a 
new plan. 
Article 7 
Submission of sectoral plans and decision on corre­
sponding Community support frameworks 
1. The sectoral plans and any amendments thereto 
shall be forwarded to the Commission by the Member 
States concerned. 
2. The Community support frameworks relating to 
sectoral plans shall be established in agreement with the 
Member State concerned, within the partnership, and by 
Commission decision under the procedure laid down in 
Article 29 of Regulation (EEC) No 4253/88 and in 
accordance with the rules laid down in Title III of that 
Regulation. 
3. The Commission shall, as part of the procedure 
referred to in paragraph 2, ensure that the sectoral plans 
are consistent with the priorities of Community policies, 
in particular those of the common agricultural policy. 
Article 8 
Selection criteria 
1. The selection criteria referred to in Article 2 shall 
be used to determine which investments are to receive 
assistance from the Fund, within the framework of the 
approval of the operational programmes or global grants 
referred to in Article 9. The criteria shall lay down 
priorities and indicate investments which must be 
excluded from Community financing. 
20. 9. 89 Official Journal of the European Communities No C 240/19 
2. The selection criteria shall be drawn up in 
accordance with the guidelines of the Community's 
policies, particularly the common agricultural policy. 
3. The selection criteria and, where applicable, 
amendments thereto shall be adopted by the 
Commission. The decision shall be communicated to the 
Member States and published in the Official Journal of 
the European Communities. 
TITLE II 
OPERATIONAL PROGRAMMES AND GLOBAL GRANTS 
Article 9 
Forms of assistance 
The Fund shall provide assistance in the implementation 
of the measure which is the subject of this Regulation by 
means of: 
(a) part-financing of operational programmes within the 
meaning of Article 5 (5) of Regulation (EEC) No 
2052/88; or 
(b) the provision of global grants within the meaning of 
Article 5 (2) (c) of Regulation (EEC) No 2052/88. 
Article 10 
Applications for aid 
1. The authorities and intermediaries referred to in 
Articles 14 (1) and 16 (1) of Regulation (EEC) No 
4253/88 may submit applications for aid in the form of 
operational programmes or global grants. 
2. Applications for aid must supply the necessary 
information to enable the Commission: 
— to evaluate the conformity of the proposed measures 
with Community policies, particularly the common 
agricultural policy, 
— to evaluate the contribution the proposed action will 
make to the improvement of processing and 
marketing structures, the coherence of the measures 
which constitute it and their conformity with the 
sectoral plan, the Community support frameworks 
and the selection criteria, 
— to assess the socio-economic impact of the measures 
in the areas concerned, 
— to assess the proposed measures' impact on the envi­
ronment and their effectiveness in that field, 
— to check that the execution methods and the 
financing are suited to the effective implementation 
of the measures, — to determine the precise form of assistance to be 
provided by the Fund, where appropriate on the basis 
of information already given in any corresponding 
Community support framework. 
Article 11 
Eligible investments and expenditure 
1. To be eligible for aid from the Fund in the forms 
listed in Article 9 investments must relate to: 
(a) rationalizing or developing the market preparation, 
preservation, treatment or processing of agricultural 
and forestry products or recycling manufacturing 
waste; 
(b) improving marketing channels, including the trans­
parency of price formation; 
(c) applying new processing techniques, including the 
development of new products, by-products or 
markets; 
(d) improving product quality. 
2. Special priority may be given to investments to 
improve the marketing structures for agricultural 
products, particularly if such investments encourage the 
development of new outlets by facilitating the marketing 
of new products or of high-quality products having 
characteristics which comply with the Community's 
policy on foodstuffs, including organically grown 
products. 
2. Eligible expenditure in respect of the investments 
referred to in paragraph 1 may include: 
(a) the construction and acquisition of immovable 
property, with the exception of land purchase; 
(b) machinery and equipment, including computer 
software and programmes; 
(c) general costs, such as architects', engineers' and 
consultants' fees and feasibility studies, up to a 
ceiling of 12 % of the cost referred to in (a) and (b). 
Article 12 
Products concerned and participation of the producers 
1. Investments must contribute to improving the 
situation of the basic agricultural production sector in 
question; in particular, having regard to the specific 
nature of each sector, they must guarantee the producers 
of the basic agricultural product an adequate and lasting 
share in the resulting economic benefits. 
No C 240/20 Official Journal of the European Communities 20. 9. 89 
2. The investments must as a rule concern the 
products listed in Annex II to the Treaty, to the 
exclusion of those covered by Council Regulation (EEC) 
No .. ./89. However, investments relating to forestry 
products and products falling within CN codes 45 02, 
45 03 and 45 04 shall also be eligible. 
The Commission may accept investments relating to 
other products provided the aid recipients have direct 
contractual links with the producers of the basic agri­
cultural products. 
3. Sufficient evidence must be given that the 
investments will be profitable. 
Article 13 
Ineligible investments 
1. The following investments shall be excluded: 
— investments at the retail level, 
— investments in the marketing or processing of 
products from third countries. 
2. The work proposed may not be commenced before 
the date on which the Commission receives the 
application for assistance. 
Article 14 
Recipients 
1. Aid from the Fund shall be granted to the natural 
or legal persons, or groups thereof, who are ultimately 
responsible for financing the investments. 
2. Aid from the Fund shall be paid through: 
— the authorities designated in accordance with Article 
14 (1) of Regulation (EEC) No 4253/88, or 
— the intermediary agencies designated in accordance 
with Article 16 (1) of Regulation (EEC) No 4253/88. 
Article 15 
Decision to grant aid and budget commitment 
1. The Commission shall decide on the granting of aid 
from the Fund in accordance with the procedure laid 
down in Article 29 of Regulation (EEC) No 4253/88. 2. The decision referred to in paragraph 1 shall be 
communicated to the authority referred to in Article 14 
(1) of Regulation No 4253/88 or to the intermediary 
referred to in Article 16 (1) of that Regulation, and to 
the Member State concerned. 
3. In the case of multiannual operations, the authority 
or intermediary referred to in paragraph 2 shall forward 
to the Commission each year the information required 
for the commitment of the annual instalments referred to 
in Article 20 (2) of Regulation (EEC) No 4253/88 and 
for checking that the investments to be made comply 
with the decisions taken in accordance with paragraph 1 
and Article 7 (2). 
TITLE III 
FINANCIAL AND GENERAL PROVISIONS 
Article 16 
Aid rates and rules 
1. Aid from the Fund may not exceed, in relation to 
the eligible costs of the selected investments: 
(a) 50 % in the Objective 1 regions referred to in Article 
1 (1) of Regulation (EEC) No 2052/88; 
(b) 30 % in other regions. 
2. Aid from the Fund shall in general take the form of 
capital grants. If other forms of assistance are used, they 
must not exceed the capital grant equivalent referred to 
above. 
3. The Member States concerned must undertake to 
participate in financing the investments selected by the 
Commission for assistance from the Fund, to at least 
5 % of the eligible costs. 
4. The financial contribution by the recipients referred 
to in Article 14 (1) in relation to the eligible costs of the 
selected investments must be not less than: 
(a) 25 % in the Objective 1 regions referred to in Article 
1 (1) of Regulation (EEC) No 2052/88; 
(b) 45 % in other regions. 
20. 9. 89 Official Journal of the European Communities No C 240/21 
5. Within the field of application of this Regulation, 
Member States may take additional aid measures which 
are subject to conditions or rules differing from those 
provided for in the Regulation, or where the amounts of 
aid exceed the ceilings specified herein, on condition that 
such measures comply with Articles 92 to 94 of the 
Treaty. 
Article 17 
Procedures for payment of the aid 
1. Payment of advances or balances to be carried out 
in accordance with Article 21 of Regulation (EEC) No 
4253/88 shall be made to the authority designated in 
accordance with Article 14 (1) of Regulation (EEC) No 
4253/88 or, where applicable, to the intermediary 
referred to in Article 16 (1) of that Regulation. 
2. The authority or intermediary referred to in 
paragraph 1 shall check the supporting documents 
relating to the expenditure of the final recipients and 
ensure that they are in order before paying the 
Community contribution. It shall also make on-the-spot 
checks to verify that the information contained in the 
application corresponds to the true situation. 
Payment to final recipients must take place within four 
weeks of the date when the application was lodged, 
provided that the application contains all the documents 
required to establish that the expenditure was justified. 
3. At the end of each quarter the authority or inter­
mediary referred to in paragraph 1 shall forward to the 
Commission a statement of the payments made to reci­
pients, indicating the references of the supporting 
documents in its possession. 
4. An implementation report shall be sent to the 
Commission every half-year. 
Article 18 
Checks and penalties 
1. The authority designated in accordance with Article 
14 (1) of Regulation (EEC) No 4253/88 or, were appro­
priate, the intermediary referred to in Article 16 (1) of 
that Regulation shall forward to the Commission, at the 
latter's request, all supporting documents and evidence 
that can establish that the financial or other conditions 
have been met. The Commission may carry out 
on-the-spot checks. 
2. The Commission may decide to suspend, reduce or 
cancel assistance from the Fund granted in accordance 
with Articles 15 (1) and 14 (2) of this Regulation: 
— if the investments have not been implemented as 
provided for, or — if some of the conditions laid down in the 
Commission's Decision referred to in Article 15 (1) 
have not been met, or 
— if time limits set for implementation have not been 
respected. 
3. The decision shall be communicated to the Member 
State concerned and the authority designated in 
accordance with Article 14 (1) of Regulation (EEC) No 
4253/88 or, where appropriate, the intermediary referred 
to in Article 16 (1) of that Regulation. 
Article 19 
Transition period for the approval of plans 
For 12 months following the entry into force of this 
Regulation, a decision may be taken to provide the 
assistance referred to in Article 9 (1) in respect of 
measures which can be implemented in not more than 
one year and which are not part of an approved sectoral 
plan, provided that the sector in question is covered by a 
sectoral programme approved by the Commission under 
Article 5 (1) of Regulation (EEC) No 355/77 and that 
the implementation period laid down has not expired. 
Article 20 
Discontinuance of carry-over 
By way of derogation from Article 10 (3) of Regulation 
(EEC) No 4256/88, Article 21 of Regulation (EEC) No 
355/77 shall not apply to projects which have not been 
granted aid from the Fund for 1990. 
Article 21 
Transitional provisions for payments in respect of 
projects under Regulation (EEC) No 355/77 
1. From 1 January 1991, the payment of aid in respect 
of the projects referred to in Article 10 (3) of Regulation 
(EEC) No 4256/88 shall be carried out in accordance 
with Articles 17 and 18 of this Regulation. 
2. Member States shall, not later than 15 December 
1990, communicate to the Commission: 
— the authorities they have designated to pay out the 
aid in question, 
— the estimated amount of the payments for the first 
half of 1991, and 
— the basis on which that estimate was calculated. 
No C 240/22 Official Journal of the European Communities 20. 9. 89 
3. On receipt of the duly reasoned communication, 
the Commission shall make an initial lump-sum payment 
and will make additional payments on the basis of the 
quarterly statements referred to in Article 17 (3) 
according to the estimated needs communicated by the 
Member States. 
Article 22 
Extension of programmes 
Specific programmes relating to agricultural products 
approved in accordance with Article 5 of Regulation 
(EEC) No 355/77 for which the deadlines for 
completion are between 1 January 1989 and the date of 
entry into force of this Regulation shall be extended until 
the end of the period referred to in Article 19. Article 23 
Application 
The Commission shall adopt detailed rules for the 
application of this Regulation. 
Article 24 
Entry into force 
This Regulation shall enter into force on the third day 
following 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.