Proposal for a COUNCIL REGULATION amending Regulation (EEC) No 2358/71 on the common organisation of the market in seeds and fixing the aid granted in the seeds sector for the 2002/03 and 2003/04 marketing years

(presented by the Commission)

EXPLANATORY MEMORANDUM

1. Since 1994, the area sown to seeds in the European Union has increased substantially, as have the quantities produced, particularly for certain species.

Over that period, the market prices received by producers have fluctuated, sometimes considerably. At the same time, there has been an increase in the quantities exported and in the stocks held by the Community, demonstrating that more seeds are being produced than can be actually disposed of on the Community market.

EAGGF Guarantee Section spending on the seed sector has been increasing constantly since 1994. This trend accelerated in 1999 and 2000, reaching EUR 109.5 million in 2000.

The only budgetary stabilising mechanism that currently exists in this sector concerns rice seed, for which the Council introduced a maximum guaranteed quantity apportioned among the Member States from the 1999 marketing year. The Commission is responsible for determining and applying this mechanism.

2. Under the common organisation of the market in seeds established by Council Regulation (EEC) No 2358/71, the amount of aid to be paid for the 2002/03 and 2003/04 marketing years must be fixed before 1 August 2001.

In addition, in order to curb the constant increase in expenditure under this market organisation, a stabiliser mechanism similar to the one for rice seed must be introduced.

3. These two matters (fixing the aid and introducing a stabiliser) must be dealt with together because they are closely linked: spending on the market organisation depends on the unit rate for aid applied to the quantity produced and eligible for Community aid. Keeping the aid at the current level is acceptable only if a stabiliser mechanism is introduced to keep spending within reasonable limits. The alternative of reducing the unit rate of aid will not be as effective and does not place responsibility on the Member States where the increased production has been recorded.

4. Among the species of seed covered by the market organisation, Lolium perenne L. currently receives aid differentiated by variety (briefly put: high-persistence, new, and low-persistence varieties). The last time the aid was fixed, it was noted that this differentiation was no longer justified and so it was decided that it should be continued for the 2001/02 marketing year, but on a temporary basis only.

5. This proposal aims to introduce a stabiliser similar to the one in place for rice seed for all the species covered by the market organisation and to carry over the amounts of aid to be paid for the 2002/03 and 2003/04 harvests.

2001/0099 (CNS)

Proposal for a COUNCIL REGULATION amending Regulation (EEC) No 2358/71 on the common organisation of the market in seeds and fixing the aid granted in the seeds sector for the 2002/03 and 2003/04 marketing years

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Community, and in particular Article 37 thereof,

Having regard to the proposal from the Commission [1],

[1] OJ C ..., ..., p. .

Having regard to the opinion of the European Parliament [2],

[2] Opinion delivered on ...

Having regard to the opinion of the Economic and Social Committee [3],

[3] Opinion delivered on ...

Whereas:

(1) Article 3(2) of Council Regulation (EEC) No 2358/71 of 26 October 1971 on the common organisation of the market in seeds [4], as last amended by Regulation (EC) No 2371/2000 [5], provides that the amount of aid must be fixed taking into account the need to ensure a balance between the volume of production required in the Community and the amount that can be marketed. Since the 1994/95 harvest, the production and export of seeds has increased constantly and stocks of seeds in the Community have reached a level likely to affect the balance of the market in seeds.

[4] OJ L 246, 5.11.1971, p. 1.

[5] OJ L 275, 23.10.2000, p. 1.

(2) It is therefore justified to introduce a mechanism to stabilise the production of seeds other than rice seeds, for which such a mechanism is already in place. The stabiliser mechanism must set a maximum quantity eligible for aid in the Community determined on the basis of the average quantity harvested during a reference period to be established.

(3) The Annex to Regulation (EEC) No 2358/71 refers to the varieties of Lolium perenne L. of high persistence, late or medium late, new and other varieties and varieties of low persistence, medium late, medium early or early. Since the prices for those varieties on the external markets no longer justify that distinction, the Annex maintains it as a transitional arrangement for the 2000/01 and 2001/02 marketing years for the purposes of fixing the amounts of aid applicable in the Community and a variation of the said aid. The distinction between three different groups of varieties of Lolium perenne L. should therefore be abolished and a single rate of aid fixed.

(4) Given the situation on and the outlook for the Community market, producers are not assured of a fair return from seeds listed in the Annex to Regulation (EEC) No 2358/71 which will be marketed in the 2002/03 and 2003/02 marketing years. Production aid should be granted for those seeds.

(5) Article 3(2) of Regulation (EEC) No 2358/71 provides that when the aid is fixed, account should be taken, on the one hand, of the need to ensure balance between production in the Community and the outlets for such production and, on the other hand, of the prices for such products on the external markets.

(6) The application of these criteria results in fixing the aid applicable for the 2002/03 and 2003/04 marketing years at the levels set out in the Annex,

HAS ADOPTED THIS REGULATION:

Article 1

Article 3(4a) of Regulation (EEC) No 2358/71 is replaced by the following:

"4a. The maximum quantity of seed on which the aid is payable in the Community shall be fixed in accordance with the procedure referred to in paragraph 5. That quantity shall be apportioned among the producer Member States.

Except in the case of rice seed, the maximum quantity shall be determined on the basis of the average quantity harvested during a reference period to be established."

Article 2

For the 2002/03 and 2003/04 marketing years, the aid granted in the seeds sector as provided for in Article 3 of Regulation (EEC) No 2358/71 shall be as set out in the Annex hereto.

Article 3

This Regulation shall enter into force on the third day following its publication in the Official Journal of the European Communities.

It shall apply from 1 July 2002.

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

Done at Brussels,

For the Council

The President

ANNEX

2002/02 AND 2003/04 MARKETING YEARS Aid applicable in the Community

(EUR/100 kg)

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