COMMISSION OF THE EUROPEAN COMMUNITIES 
Brussels, 12.12.1996 
COM(%) 664 final 
REPORT FROM THE COMMISSION TO THE COUNCIL 
AND THE EUROPEAN PARLIAMENT 
Application of the provision of article 5.1 under g) 
of Regulation (CEE) nr 1765/92 

INTRODUCTION 
Regulation (EC) No 232/94 (OJ L nr 30 dated February 3, 1994, p.7) amends 
Regulation (EEC) No 1765/92 in order to bring it into line with the Memorandum 
of Understanding on oilseeds approved by Council Decision 93/355/EEC of 8 
June 1993. This report is drafted in application of Article 5(1 )(g) of Regulation 
(EEC) No 1765/92 which lays down that the Commission must submit a report to 
the European Parliament and to the Council by 31 December 1996. 
BACKGROUND 
The Memorandum of Understanding on oilseeds of 3 December 1992 and the 
approval of that Agreement by the Council on 8 June 1993 (Decision 93/355/EEC) 
permitted a resolution of the dispute between the United States and the European 
Community on the aid arrangements for oilseeds. 
It should be recalled that this Agreement lost its bilateral character with the 
conclusion of the Agreements in Marrakesh on 15 April 1994 under the Uruguay 
Round multilateral negotiations. 
The Commission proposal for transposing the Memorandum of Understanding on 
oilseeds into Community law is contained in document COM(93) 389 final 
(28/07/1993). The proposal was the result of the undertaking made by the 
Commission when the Council adopted the Memorandum to propose to the 
Council a mechanism to ensure the equitable administration of the oilseeds base 
area in accordance with Regulation (EEC) No 1765/92. 
The proposal provided for the amendments to Regulation (EEC) No 1765/92 
necessary to implement the Memorandum of Understanding on oilseeds, i.e. 
(point 10 of the explanatory memorandum) : 
to exclude from the benefits of the regime the cultivation of "confectionery 
sunflower seed", with effect from sowing for harvest in 1994 (the technical 
implementation to be managed by the Commission via the Management 
Committee procedure); 
to introduce a separate base-area system, to be known as the maximum 
guaranteed area, for producers benefiting from the crop-specific oilseeds 
payments system, respecting the principles set out in the Memorandum of 
Understanding on oilseeds (the Commission to manage the system by the 
Management Committee procedure). 
> 
The Commission had previously estimated that, in the medium term, the area 
sown with oilseeds would be no more than the total figure for the Community 
referred to in the Memorandum of Understanding with the United States, but that 
areas in the Member States would not all develop in the same way. This led to 
the conclusion that a sub-division of the Community's Maximum Guaranteed Area 
by Member State would not only go beyond what was required by the 
Memorandum of Understanding but would also be unnecessarily restrictive. 
The Commission therefore proposed that, should it become necessary to adjust 
compensatory payments for oilseeds for 1994/95, 1995/96 and 1996/97 due to 
implementation of the Memorandum of Understanding, if the overrun was not 
greater than 5% measures would be applied Community-wide. In other words, up 
to an overrun of 5%, the final reference amounts would be reduced by the same 
amount in all Member States. Above that percentage, measures would focus on 
producers in those Member States in which areas under oilseeds had increased 
most. Additional reductions would be applied in those Member States which 
exceeded the average area sown for harvest in 1989, 1990 and 1991 reduced by 
the rate of rotational set-aside for the marketing year concerned or by 10% where 
that rate was lower than 10%. The proposal was made on the assumption that the 
mechanism would only be required for a transitional period. 
The Commission proposal was a compromise between two opposing views. One 
view was that all measures should be applied on a Community-wide basis, 
committing the solidarity of all Community oilseed producers and maximizing the 
area sown with oilseeds up to the level of the MGA. The other was that measures 
should be applied on a Member-State basis, placing responsibility on the 
prcducers in each Member State, thus protecting them against any risk of 
penalties arising from an increase in the area sown with oilseeds in another 
Member State. The former view is reflected in the proposed 5% threshold and the 
latter in the placing of responsibility on producers in those Member States which 
have most increased their area sown with oilseeds. 
The compromise reached in the Council in December 1993, formalized by 
Regulation (EC) No 232/94, maintains the principal features of the Commission 
proposal (threshold and responsibility of the Member States). The three-
marketing-year transitional period was abandoned but the compromise maintains 
the idea of Community solidarity, although to a lesser extent, and the 
responsibility of Member States and their producers, to an increased extent. 
APPLICATION OF THE MEASURE 
1994/1995 marketing year 
Application of the threshold (Article 5(1 )(g)) was limited to the 1994/95 marketing 
year, which was also the first marketing year in which the new mechanism was 
applicable. The areas for which specific compensatory payments for oilseeds 
were applied for exceeded by 9% the maximum guaranteed area of the 
Community of Twelve, excluding sunflower production in Spain and Portugal. The 
measure did not apply to Spanish or Portuguese sunflowers, for which there was 
a separate maximum guaranteed area. 
The method of applying the threshold is set out in Annex I to Commission 
Regulation (EC) No 307/95 establishing corrected final regional reference 
amounts for producers of soya beans, rape seed, colza seed and sunflower seed 
for the 1994/95 marketing year (OJ No L No 36, 16.2.1995, p.2). The left-hand 
side of the two tables given in Annex I to this report gives the basic figures for the 
1994/95 marketing year and the penalties to be applied. The right-hand side of 
the tables shows the results of applying the Commission's original proposal. 
A study of the tables leads to the following conclusions: 
a threshold of 0% still permits equal treatment of Member States which 
have exceeded the reference national guaranteed area and those which 
have not; compensatory payments can thus be optimized; 
application of penalties by Member State does not permit compliance with 
the international commitments made, which provide for a 1% reduction in 
compensatory payments for each percentage point overrun of the 
maximum guaranteed area; this is shown by the figures for Spain, as 
Spanish rape and soya producers would have received a negative 
compensatory payment; 
a higher threshold, for example 5%, would have permitted a further 
reduction in the penalties imposed on producers in Member States 
exceeding their reference national guaranteed area; it must also be 
recognized that such a mechanism would have led to a 5% reduction in 
compensatory payments for producers in Member States which had not 
exceeded their reference national guaranteed area. 
1995/96 and 1996/97 marketing years 
The MGA was respected in 1995/96 and it is highly unlikely that it will be 
exceeded in 1996/97. Compliance with the MGA over the last two marketing 
years is a result of the national measures that a number of Member States have 
applied in order to reduce the risk of an overrun of their national maximum 
guaranteed areas, a move to cereals caused by the level of market prices, the 
dissuasive effect of penalties applied in 1994/95 and the risk that penalties would 
be maintained for the following marketing year if the MGA were again to be 
exceeded. 
Nevertheless, in the 1995/96 and 1996/97 marketing years, oilseed producers in 
certain Member States will have profited from the fact that the reference national 
guaranteed area for oilseeds was not used up in other Member States. 
The straightforward division of the MGA into 15 reference national guaranteed 
areas, i.e. with no Community solidarity and therefore no thres+iold, would have 
resulted in an overrun of the reference national guaranteed area and therefore the 
imposition of a penalty for the 1995/96 marketing year in Spain, France, the 
United Kingdom and Finland, to which would have been added the penalty carried 
over from the previous marketing year. Furthermore, the penalties imposed would 
have had to have been maintained in 1996/97 for Spain, France and the United 
Kingdom, since the reference national guaranteed areas for those Member States 
have again been exceeded in 1996/97. Penalties would also have had to have 
been imposed on oilseed producers in Portugal and Italy. Figures for the two 
marketing years are given in Annex II. 
Conclusion 
The mechanism adopted allows Community solidarity, in that a Member State and 
its producers who have exceeded their reference national guaranteed area profit 
from under-utilization in other Member States. It avoids penalties disproportionate 
to production in certain Member States. Penalties are borne by those Member 
States and their producers who have not respected the reference national 
guaranteed area. It permits compliance with the international commitments made 
by the European Union and is in accord with the wishes of the Council as 
specified in Regulation (EEC) No 1765/92. 
The European Commission does not for the moment, therefore, propose to 
amend the provisions concerned. 
Area for which Crop Specific Oilseed Payment to be made 
MGA: EC-12 other than Spanish and Portuguese Sunflowers 
TP\ Belgium 
Germany 
Spain rape/soya 
Ireland 
Italy 
Luxembourg 
Netherlands 
Portugal rape/soya 
TOTAL Crop 
Specific 
Support 
3.893 National 
MGA MGA 
-15% 
3.696.956 3.966.000 3.371.100 Yes 325.866 Overshoot 
in ha Overshoot 
in% 
9% Reduction 
necessary 
17,11% 
4,12% Reduction 
necessary 
(ha equ.) Basic data wtth a 5% franchisa and no distribution of the reserve 
Reduction 
5% 
(ha equ.) 
195 
9% 332.726 184.848 3.512.108 Yes Crop 
Specific 
Support remain. 
Overshoot 
? remain. 
Overshoot Overshoot! 
in% Total 
Reduction 
26,06% -11,24% 
5,00% Total 
Reduction 
("«equ.) 
195 
332.726 
Necessary reduction in ha - equivalents: 9,666% 
332.726 
Area for which Crop Specific Oilseed Payment to be made 
MGA: EC-12 other than Spanish and Portuguese Sunflowers 
Basic Data with distribution of the reserve to have the same réduction for all crops in Spain, 
no change for the U.K. and the same reduction for Ireland as U.K. Basic Dau with 5% franchise and distribution of the reserve to have the same reduction for a» crepe in Spain, 
no change for the U.K. and the same reduction for Ireland as U.K. 
Total 
R#ducbon 
% Reduction 
necessary 
4^ Belgium 
Germany 
Spain rape/soya 
Ireland 
Italy 
Luxembourg 
Netherlands 
Portugal rape/soya Crop 
Specific 
Support 
3893 National 
MGA Increase 
MGA total 
MGA 
-15% Overshoot 
in ha Overshoot) 
in% Reduction 
necessary % 
17,87% Reduction 
necessary 
(ha equ) Reduction 
5% 
(ha equ.) Crop 
Specific 
Support National 
MGA Increase 
MGA total 
MGA 
-15% Overshoe 
? Overshoot 
in ha Reducten 
in% 
5,48% 5.00% ("*»») 
TOTAL 325.856 9% 184.848 3.512.108 Yes 147.87» 
Necessary reduction in ha - equivalents: 9,666% 
332.726 
ANNEX II 
Area for which crop specific 
payment is made in 1995/1996 
Member state National MGA 'MGA-12% crop spec overshoot +/- in % 
Belgium 
Denmark 
Germany 
Greece 
Spain 
France 
Ireland 
Italy 
Luxembourg 
Netherlands 
Portugal 
UK 
EC-12 
Austria 
Finland 
Sweden 
EC-15 6.000 
236.000 
929.000 
26.000 
1.168.000 
1.730.000 
5.000 
542.000 
2.000 
7.000 
93.000 
385.000 
5.128.000 
147.000 
70.000 
137.000 
5.482.000 5.280 
207.680 
817.520 
22.880 
1.027.840 
1.522.400 
4.400 
476.960 
1.760 
6.160 
81.840 
338.800 
4.512.640 
129.360 
61.600 
120.560 
4.824.160 3.898 
119.515 
688.758 
18.809 
1.053.875 
1.531.706 
2.572 
396.247 
1.422 
1.110 
78.733 
354.709 
4.251.354 
102.411 
79.725 
94.192 
4.527.682 N 
N 
N 
N 
Y 
Y 
N 
N 
N 
N 
N 
Y 
N 
N 
Y 
N 
N -26,17 
-42,45 
-15,75 
-17,79 
2,53 
0,61 
-41,55 
-16,92 
-19,20 
-81,98 
-3,80 
4,70 
-5,79 
-20,83 
29,42 
-21,87 
-6,15 
? 
Area for which 
in 1996/1997 crop specific payments are to be made 
(art.8.2 du règlement (CE) n° 658/96) 
Member state National MGA 'MGA-10% crop spec. overshoot +/- in % 
Belgium 
Denmark 
Germany 
Greece 
Spain 
France 
Ireland 
Italy 
Luxembourg 
Netherlands 
Austria 
Portugal 
Finland 
Sweden 
UK 
EC-15 6.000 
236.000 
929.000 
26.000 
1.168.000 
1.730.000 
5.000 
542.000 
2.000 
7.000 
147.000 
93.000 
70.000 
137.000 
385.000 
5.482.000 5.400 
212.400 
836.100 
23.400 
1.051.200 
1.557.000 
4.500 
487.800 
1.800 
6.300 
132.300 
83.700 
63.000 
123.300 
346.500 
4.933.800 3.903 
81.174 
670.745 
9.994 
1.128.086 
1.603.951 
2.511 
540.441 
1.614 
592 
79.826 
92.785 
58.150 
60.320 
357.712 
4.691.803 N 
N 
N 
N 
Y 
Y 
N 
Y 
N 
N 
N 
Y 
N 
N 
Y 
N -27,73 
-61,78 
-19,78 
-57,29 
7,31 
3,02 
-44,20 
10,79 
-10,33 
-90,60 
-39,66 
10,85 
-7,70 
-51,08 
3,24 
-4,90 
9 

ISSN 0254-1475 
COM(96) 664 final 
DOCUMENTS 
EN 03 
Catalogue number : CB-CO-96-676-EN-C 
ISBN 92-78-13364-7 
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