Proposal for a Council Regulation (EC) amending Regulation (EEC) No 3813/92 on the unit of account and the conversion rates to be applied for the purposes of the common agricultural policy (94/C 360/12) COM(94) 498 final - 94/0265(CNS)

(Submitted by the Commission on 18 November 1994)

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European 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,

Whereas Article 13 (2) of Regulation (EEC) No 3813/92 (1), as amended by Regulation (EC) No 3528/93 (2), provides for an examination to be conducted by the Council, before 1 January 1995, of the agrimonetary arrangements introduced at the beginning measures of 1993; whereas measures must be taken at Community level for uniform application in all Member States to prevent distortion of monetary origin in the implementation of the common agricultural policy;

Whereas, as a consequence of the decision of 2 August 1993 raising the marginal intervention thresholds under the European Monetary System to 15 %, the currencies of the Member States are all treated as floating currencies from the agrimonetary viewpoint; whereas the correcting factor referred to in Aricle 1 (c) of Regulation (EEC) No 3813/92 has remained at 1,207509;

Whereas the correcting factor linked to the fixed currencies was abolished by Article 13 (2) of Regulation (EEC) No 3913/92 and must not be reintroduced in view of its implications for the reform of the CAP, international agreements and the Community budget; whereas the prices and amounts fixed in ecus must be adjusted as a consequence in order to maintain their value in national currencies;

Whereas the initial agricultural conversion rates for the currencies of the new Member States must be determined;

Whereas, in view of the elimination of the correcting factor, a specific agricultural conversion rate as provided for in Article 3 (2) of Regulation (EEC) No 3813/92 is not needed for the agricultural structure policy;

Whereas until 31 December 1994 Council Regulation (EC) No 3528/93 temporarily replaces the threshold for adjusting the agricultural conversion rates, which was initially symmetrical, narrow and fixed at between - 2 and + 2 points, by a threshold which is not symmetrical, is wider and movable between - 2 to + 3 and 0 to + 5 points; whereas the application of the initial threshold as from 1 January 1995 is likely, on account of the possibility of monetary fluctuations persisting within the exchange rate mechanism of the European Monetary System, to create instability adversely affecting the agricultural conversion rates;

Whereas, however, the rules in force at the end of 1994 must be adjusted to reduce their cost to the Community; whereas, in order to avoid, firstly, some overprotection against falls in agricultural conversion rates and, secondly, unnecessary Community expenditure, the movability of the threshold should be limited to below its technical maximum and it should be made symmetrical;

Whereas, in view of the impact of falls in the agricultural conversion rates on farm incomes, the monetary trends which trigger them off must be confirmed;

Whereas advance fixing of the agricultural conversion rates, provided for in certain cases in Article 6 of Regulation (EEC) No 3813/92, may be extended to the period of applicability of the amount in ecus concerned provided that the gap with the monetary trend remains within a certain limit;

Whereas the possibility of applying the compensatory measures provided for in Articles 7 and 8 of Regulation (EEC) No 3813/92 should be limited to cases of appreciable reductions in the agricultural conversion rates; whereas such appreciable reductions must be defined in terms of the scale and the period that prior increases in agricultural conversion rates have applied;

Whereas application of Article 7 of Regulation (EEC) No 3813/92 should be restricted to structural or environmental aid, in view of its particular nature, in order to avoid the risk of unnecessary Community expenditure and difficulties with international agreements; whereas reductions in aid per hectare or per animal should be offset by a degressive, temporary aid supplement;

Whereas, in the event of an appreciable reduction in the agricultural conversion rates, the need for and type and scale of the compensatory measures most suitable must be determined in the light of the actual circumstances surrounding the reduction;

Whereas this Regulation should apply from 1 January 1995, when the provisions on the correcting factor and the extension of the threshold expire,

HAS ADOPTED THIS REGULATION:

Article 1

Regulation (EEC) No 3813/92 is hereby amended as follows:

1. Article 1 (c) is replaced by the following:

'(c) "representative market rate" shall mean:

- in the case of a fixed courrency, the central rate for the ecu for that currency, fixed within the framework of the European Monetary System,

- in the case of a floating currency, the average exchange rate for the ecu with respect to that currency, recorded over a reference period of no more than one month, determined in accordance with the procedure laid down in Article 12;`.

2. In Article 1, point (d) is deleted and points (e) and (f) become points (d) and (e) respectively.

3. In Article 1, the following point (f) is added:

'(f) "appreciable reduction in the agricultural conversion rate" shall mean:

a reduction in the last agricultural conversion rate applicable which is greater, in absolute value, than the difference between that rate and the lowest conversion rate applicable:

- in the last 12 months, and

- in the period between 24 months and over 12 months before, and

- in the period between 36 months and over 24 months before.

Two thirds and one third respectively of the value of the differences in the second and third indents shall be taken into account.`

4. The second subparagraph of Article 3 (1) is replaced by the following:

'The agricultural conversion rate applicable on 1 January 1995 shall be equal to that determined for that date in accordance with the rules in force on 31 December 1994, divided by 1,207509.

The agricultural conversion rate for the national currency of a new Member State shall initially be equal to the representative market rate established in accordance with Article 1 (c) for the last reference period ending before the date of first application of this Regulation to the currency in question.`

5. In Article 3, paragraph 2 is deleted and 'Taking into account the correcting factor` is deleted from paragraph 3.

6. Articles 4 and 4a are replaced by the following:

'Article 4

1. The agricultural rates for the fixed currencies shall be adjusted immediately, without prejudice to Article 9, so as to eliminate their monetary gaps in the case of a monetary realignment the effect of which is to change the central rates determined for those Member States with a fixed currency.

2. The agricultural conversion rate for a floating currency shall be adjusted where:

(a) the absolute value of its monetary gap is greater than the threshold referred to in paragraph 5, less 0,5 points; or

(b) in the case of a negative monetary gap, the absolute value of the difference between that gap and the gap for another currency is greater than that threshold.

However, without prejudice to paragraph 6, where the agricultural conversion rate for a particular currency should be reduced on the basis of a single reference period, the first subparagraph shall not apply to that currency or to those currencies which, with respect to it, are in the situation referred to in point (b) thereof.

3. In the case referred to in paragraph 2, the new agricultural conversion rate shall be determined by reducing the absolute value of the monetary gap in question by half.

4. Paragraph 2 shall apply iteratively in respect of the same reference period, where appropriate starting with a reduction in the positive monetary gaps, on the basis of the agricultural conversion rates calculated in accordance with paragraph 3.

5. The threshold shall be 5 points. However, the threshold between two particular currencies may be reduced in accordance with the procedure laid down in Article 12 in order to avoid the risk of trade distortion.

6. Should paragraph 1 or 2 result in an appreciable fall in the agricultural conversion rate for a currency, the application of those provisions shall be suspended for the currency in question, as necessary and for no more than four consecutive reference periods.`

7. In Article 5 (2), 'Without account being taken of the correcting factor` is deleted.

8. The second subparagraph of Article 6 (1) is deleted and the following paragraph is inserted:

'2a. For amounts fixed in advance in ecus and amounts established in ecus under an invitation to tender, the agricultural conversion rate may be fixed in advance.

In that case, the agricultural conversion rate shall be that in force, respectively, on the date on which it was fixed in advance or the closing date for the submission of tenders. However, that rate shall be adjusted where it diverges by more than 4 % from the agricultural conversion rate which would have applied had the rate not been fixed in advance.

The term of validity of agricultural conversion rates fixed in advance shall be equal to that for the advance fixing of the amount concerned or that of the award.`

9. In Article 7, the last paragraph is deleted and the first paragraph is replaced by the following:

'Should there be an appreciable fall in the agricultural conversion rate applicable to an amount of a structural or environmental nature, the aid or amounts concerned shall be increased in ecus in accordance with the procedure laid down in Article 12.`

10. Article 8 is replaced by the following:

'Article 8

1. Member States may grant farmers compensatory aid for three years where:

(a) the average agricultural conversion rate over the last 12 months falls appreciably against the average agricultural conversion rate over the previous 12 months; or

(b) where the agricultural conversion rate applicable to:

- flat-rate aid calculated per hectare or per livestock unit, or

- a compensatory premium per sheep or goat,

falls by an appreciable amount.

Each successive annual instalment shall be reduced, in relation to the previous instalment, by at least one-third of the amount granted in the first year.

2. In the case referred to in paragraph 1 (a):

- the periods taken into account for the granting of aid may not be taken into account for the granting of further aid,

- the definition of an appreciable fall in the average agricultural converison rate shall be established in accordance with the procedure laid down in Article 12, by analogy with Article 1 (f),

- the compensatory aid may not be granted in the form of an amount linked to production other than production during a fixed, previous period; it may not be granted for any specific output or be dependant on there being any output,

- the first annual instalment of the aid shall be determined on the basis of the reduction in the average farm income in the Member State concerned, due to the reduction in the agricultural conversion rate,

- where the average rate which triggered the granting of aid is, for 12 consecutive months, below the average agricultural conversion rate applied subsequently the annual instalments of aid beginning after the 12 months in question shall be cancelled or reduced in accordance with the procedure laid down in Article 12,

- the Council shall, acting by a qualified majority on a proposal from the Commission and subject to the attainment of minimum limits, establish the maximum amounts which can be granted for each instalment of aid.

3. In the case referred to in paragraph 1 (b):

- the aid shall be granted to farmers affected by the reduction of the amounts in question,

- the first annual instalment of aid shall be determined so as to neutralize the reduction in the amounts in question in national currency occasioned by the fall in the agricultural conversion rate,

- where the rate which triggered the granting of aid is below that applied subsequently to the amounts in question the annual instalments of aid beginning after the date on which the new rate is applied shall be cancelled or reduced in accordance with the procedure laid down in Article 12,

- the Commission, in accordance with the procedure laid down in Article 12, shall establish the maximum amounts which can be granted for each instalment of aid.

4. The Community contribution to the financing of the compensatory aid shall amount to:

- 75 % of the aid actually granted to farmers in regions covered by Objective 1 as referred to in Article 1 of Regulation (EEC) No 2052/88,

- 50 % of the amounts actually granted in other cases.

For the purposes of the financing of the common agricultural policy, this contribution shall be deemed to be part of intervention intended to stabilize the agricultural markets.`

11. Article 9 is replaced by the following:

'Article 9

In the case referred to in Article 4 (6), the Commission shall decide in accordance with the procedure laid down in Article 11 (1) which national measures to support certain markets or direct national compensation may be authorized for a period of not more than one year in order to prevent significant falls in farmers' incomes for agrimonetary reasons.`

12. Article 13 (2) is replaced by the following:

'2. Prices and amounts in ecus whose value in national currency is subject on 31 December 1994 to the correcting factor 1,207509 shall be multiplied by that correcting factor on the first application, from 1 January 1995, of an agricultural conversion rate established in accordance with Article 3 (1) and Article 4.`

Article 2

This Regulation shall enter into force on 1 January 1995.

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

(1) OJ No L 387, 31. 12. 1992, p. 1.

(2) OJ No L 320, 22. 12. 1993, p. 32.