No C 97/12 Official Journal of the European Communities 18. 4. 89 
II 
(Preparatory Acts) 
COMMISSION 
Proposal for a Council Regulation (EEC) establishing a system of transitional aid to agricultural 
income 
COM(89) 61 final 
(Submitted by the Commission on 9 February 1989) 
(89/C 97/09) 
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 Community's policy on agricultural 
structures has been supplemented by certain measures 
designed, in particular, to make it easier for farmers to 
adapt to the new circumstances obtaining on agricultural 
markets in the context of the current reform of the 
common agricultural policy and in particular of the 
adjustment of the market organizations; whereas, 
however, such measures may not provide sufficient 
assistance for certain categories of family holdings; 
Whereas, this being the case, and in accordance with the 
conclusions of the European Council held in February 
1988 in Brussels, Member States should have the option 
of granting transitional aid to agricultural income to 
provide backing for the efforts of weak agricultural 
holdings, which would otherwise not be able to adapt 
successfully owing to their economic and structural 
situation, to adjust; whereas such aid also contributes 
towards maintaining a fair standard of living for the 
agricultural community in accordance with the objective 
laid down in Article 39 (1) (b) of the Treaty and 
therefore towards safeguarding the balances necessary to 
the vitality of rural society, given the requirements 
relating to the protection of the landscape and of the 
environment; Whereas, in order to ensure the necessary transparency 
of such temporary aid and compliance with Community 
conditions laid down to prevent any jeopardizing of the 
Community's objectives as regards market reform in 
particular, the aid to income under consideration should 
be granted subject to prior approval by the Commission 
of programmes of agricultural income aid drawn up by 
the Member States planning to introduce such measures; 
whereas, in order to avoid distortion of competition 
between agricultural producers, such programmes must 
in particular establish and comply with the link existing 
between the aid provided for and the prejudice resulting 
from the adjustment of conditions on the markets; 
Whereas account should also be taken of the fact that 
the holdings of the type concerned are unevenly 
distributed in the Community and are relatively concen­
trated in the Member States where budget funds and, 
consequently, the possibilities for granting transitional 
aid are much more restricted than in other Member 
States; whereas the cohesion sought by the Single Act 
therefore requires, in the latter cases in particular, a 
Community contribution towards the income aid granted 
to persons practising farming as their main occupation; 
whereas the level of the Community contribution must 
be varied according to the requirements and the financial 
resources available in the various regions of the 
Community; 
Whereas the Community contribution is to be financed 
from appropriations entered in a special chapter of the 
general budget of the Community; whereas, in order to 
facilitiate the management and financial execution of the 
system, the financing rules should be those applying to 
the EAGGF Guarantee Section under Regulation (EEC) 
No 729/70 of the Council of 21 April 1970 on the 
financing of the common agricultural policy ('), as last 
amended by Regulation (EEC) No 3183/87 (2), 
O OJ No L 94, 28. 4. 1970, p. 13. 
(2) OJ No L 304, 27. 10. 1987, p. 1. 
18. 4. 89 Official Journal of the European Communities No C 97/13 
HAS ADOPTED THIS REGULATION: Article 3 
Article 1 
1. To assist family holdings to overcome income diffi­
culties as a result of the new circumstances obtaining on 
the markets in the context of the reform of the common 
agricultural policy, a Community system is hereby 
instituted whereby the Member States may be authorized 
to grant transitional aid to agricultural income, here­
inafter referred to as 'income aid'. 
Articles 92, 93 and 94 of the Treaty shall not apply to 
the aid granted in conformity with this Regulation. 
2. Income aid may contribute in particular to: 1. Programmes of agricultural income aid (hereinafter 
referred to as 'PAIA') shall constitute the general 
framework laid down by the Member State concerned 
for granting income aids at national, regional and/or 
sectoral level. 
2. Each PAIA shall include at least the following 
details: 
(a) the actual objectives sought by the introduction of 
the PAIA; 
(b) the geographical area and, where appropriate, the 
agricultural sector or sectors concerned by the PAIA; 
(a) safeguarding income at fair levels during a process of 
adaptation which may affect the structure, organ­
ization or management of agricultural holdings; (c) definition of the potential recipients of the income 
aid in compliance with the conditions laid down in 
Article 4; 
(b) alleviating the impact, in terms of income, arising 
from the financial obligations of agricultural 
holdings; 
(c) supporting the level of agricultural income during 
efforts to diversify the farmer's activity outside agri­
culture. 
It must not stimulate agricultural production nor bring 
about distortion of competition. (d) detailed rules for granting the aid in compliance with 
the conditions laid down in Articles 5 and 6, with 
justifications for the prejudice referred to in Article 
5, as intended to serve as a basis for the granting of 
the aid; 
(e) the maximum overall annual amount of estimated 
expenditure resulting from the application of the 
PAIA, with details of the amount likely to qualify for 
a Community contribution under Articles 8 and 9. 
3. The Community shall contribute towards the 
financing of the income aid on the terms laid down in 
Title II. 
TITLE I 
The system of income aid 
Article 2 
Income aid may only be authorized within the scope of 
this system where: 
(a) it is covered by a programme drawn up by the 
Member State concerned in accordance with Article 
3; 3. Where the geographical scope of the PAIA is not 
the national territory, it shall be delimited in terms of the 
administrative regions of the Member State concerned; 
however, it may relate only partially to one or more 
administrative regions where the socio-structural charac­
teristics of agricultural holdings are broadly homo­
geneous in the planned area of application. 
Article 4 
1. The farmers and members of their families working 
on the holding may qualify for income aid only where 
the overall family income amounts, per work unit, to less 
than a threshold determined by the Member State 
concerned, having regard to the national provisions in 
force for similar measures and the objectives and detailed-
rules on granting the aid laid down in the PAIA in 
question. 
(b) the recipients meet the conditions laid down in 
Article 4 (1); 
(c) it does not exceed in amount the level determined in 
accordance with Article 5; and 
(d) it is granted in compliance with the special detailed 
rules referred to in Article 6. That threshold may in no case exceed 70 % of the 
national gross domestic product or 90 % of the regional 
gross domestic product per member of the working 
population. 
'Overall family income' means the income of the farmer 
and of those members of his family working on the 
holding, including any non-agricultural resources. 
No C 97/14 Official Journal of the European Communities 18. 4. 89 
2. The agricultural income of the holding to be taken 
into account shall be established by means of accounting 
figures or other objective criteria relating to the holding, 
to be determined in accordance with the procedure laid 
down in Article 13. 
Article 5 
1. The level of income aid shall be determined on the 
basis of the prejudice arising for potential recipients from 
the adjustment of the markets in the context of the 
reform of the common agricultural policy and of the 
adjustment of the market organizations; it shall be estab­
lished, as the Member State concerned so chooses, on a 
flat-rate or individual basis. 
2. Where the level of the aid is established on a 
flat-rate basis for the PAIA application area: 
(a) the prejudice referred to in paragraph 1 shall, in 
compliance with the detailed rules to be adopted in 
accordance with the procedure provided for in 
Article 13, be established overall on the basis of a 
multi-annual reference period for the holdings in the 
area and/or the PAIA sector in question, expressed 
as a total amount; 
(b) the aid granted to individual recipients in the area 
and/or the sector of application may not exceed 
overall the amount referred to in (a); it may be 
granted on the basis of objective data relating to the 
holding (UAA, standard gross margin, etc.). 
3. Where the level of the aid is established indi­
vidually, it may at most cover the prejudice referred to in 
paragraph 1, suffered by the holding concerned. That 
prejudice shall be established on the basis of a multi-
annual reference period and in compliance with detailed 
rules to be determined in accordance with the procedure 
laid down in Article 13. 
Article 6 
1. The detailed rules for granting the income aid shall 
be governed by the following special conditions: 
(a) it may not be granted on the basis of the prices 
and/or quantity of production of the holding 
concerned; 
(b) it may be granted to an individual recipient only 
degressively and for no more than a maximum of 
five years from the first payment; 
(c) the Member States shall exclude from income aid 
such households where farming accounts for a 
negligible part of the income. 
2. In order to prevent distortion of competition, 
maximum amounts of aid per work unit, expressed as a 
percentage of the average regional or national income 
shall be fixed in accordance with the procedure laid 
down in Article 13. In no case may aid exceed ECU 2 500 per year per work 
unit on the holding concerned. 
3. In order to achieve the objectives in Article 1 (2): 
(a) the amount of the aid to be granted to individual 
recipients may be capitalized; 
(b) for the application of the threshold referred to in 
Article 4 (1) and for the purpose of applying Article 
5, the net agricultural income of the holding may be 
used using accounting figures. 
The detailed rules for the application of this paragraph 
shall be determined in accordance with the procedure 
laid down in Article 13. 
Article 7 
1. Where a Member State plans to introduce or 
amend a PAIA, it shall notify the Commission of the 
draft programme or the proposed amendment. The noti­
fication must contain the information required for 
assessing whether the conditions laid down in this Regu­
lation are met. 
At the request of the Commission, the Member State 
concerned shall provide additional information for 
assessment purposes. 
2. Member States may not implement the planned 
measures before the Commission has approved the PAIA 
concerned. 
When making its assessment the Commission shall 
ensure in particular that the planned measures are in 
accordance with the provisions of this Regulation, 
having regard to its objectives. 
3. Within three months from the date of receipt of a 
draft PAIA or amendments thereto, the Commission, 
having consulted the Committee provided for in Article 
13, shall decide whether to approve the draft PAIA or 
the amendments thereto provided that all the particulars 
listed in Article 3 and, where appropriate, the additional 
information referred to in the second subparagraph of 
paragraph 1, are provided. 
4. The first subparagraph of paragraph 2 shall be 
without prejudice to the Member State concerned 
implementing in the framework of a PAIA approved in 
accordance with paragraph 3 income aid measures which 
are more restrictive than those laid down in the PAIA in 
question as regards in particular: 
— the geographical or sectoral scope, 
— the detailed rules for the grant in accordance with 
Articles 4 and 5, and 
— the duration of application 
of income aid actually granted. 
5. In accordance with detailed rules to be determined 
in accordance with the procedure laid down in Article 
13, the Member States shall notify the Commission 
periodically of progress in approved PAIAs. 
18. 4. 89 Official Journal of the European Communities No C 97/15 
TITLE II Article 10 
' Community financing of income aid 
Article 8 
1. Income aid which is part of a PAIA approved in 
accordance with Article 7 (3) and which, in addition to 
the conditions in Articles 4, 5 and 6, relates to holdings 
where the farmer or a member of his family working on 
the holding possesses adequate occupational skill and 
competence and practises farming as his main occupation 
shall be eligible for Community financing. 
For the purposes of applying this condition, Article 2 (5) 
and (6) of Council Regulation (EEC) No 797/85 (') 
shall apply. 
2. However, only that proportion of income aid shall 
be eligible for Community financing which: 
(a) is granted in respect of not more than two work 
units per holding and amounts to not more than 
ECU 1 000 per work unit per year, and 
(b) constitutes, in the second, third, fourth and fifth 
years of its grant to individual recipients, 85, 70, 55 
and 40 % respectively of the income aid granted to 
them in the first year in accordance with Articles 4 
and 5. 
3. To ensure that the appropriations entered in the 
Community budget are not exceeded by expenditure, 
additional conditions relating to the eligibility of PAIAs 
may be laid down in accordance with the procedure laid 
down in Article 13, the EAGGF Committee having been 
consulted on the financial aspects. 
Article 9 
1. The Community contribution to the financing of 
the income aid shall amount to: 
— 70 % of the eligible amount where the holding 
concerned is located in a region covered by objective 
1 in Article 1 of Council Regulation (EEC) No 
2052/88 O, 
— 25 % of the eligible amount in other cases. 
2. However, in accordance with the procedure laid 
down in Article 43 (2) of the Treaty, an intermediate 
rate of Community contribution may be fixed for certain 
areas covered by objective 5 (b) in Article 1 of Regu­
lation (EEC) No 2052/88. 
(1) OJ No-L 93, 30. 3. 1985, p. 1. 
(2) OJ No L 185, 15. 7. 1988, p. 9. The measures provided for in Articles 8 and 9 shall be 
financed from appropriations entered in a special chapter 
of the general budget of the Communities. The financing 
rules shall be those applying to the EAGGF Guarantee 
Section. 
TITLE III 
General provisions 
Article 11 
Without prejudice to other specific or sectoral 
Community provisions, agricultural income aid shall be 
prohibited if the conditions or rules governing the 
granting thereof differ from those laid down in this 
Regulation, and in particular if the amount of such aid is 
determined by reference to prices, quantities of agri­
cultural products or inputs. 
Article 92, with the exception of paragraphs 1 and 2 
thereof, and Article 94 of the Treaty shall not apply to 
such aid. 
Article 12 
Detailed rules for the application of this Regulation shall 
be adopted in accordance with the procedure laid down 
in Article 13. 
Article 13 
1. A Management Committee for Agricultural Income 
Aid, hereinafter referred to as the 'Committee', shall be 
set up comprising representatives from the Member 
States and chaired by a Commission representative. 
2. Within the Committee the votes of the Member 
States shall be weighted in accordance with Article 
148 (2) of the Treaty. The chairman shall not vote. 
3. Where the procedure laid down in this Article is to 
be followed, the chairman shall refer the matter to the 
Committee either on his own initiative or at the request 
of the representative of a Member State. 
4. The Commission representative shall submit a draft 
of the measures to be adopted. The Committee shall 
deliver its opinion on the measures within a time limit 
which the Chairman may lay down depending on the 
urgency of the matters submitted for examination. 
Opinions shall be delivered by a majority of 54 votes. 
5. The Commission shall adopt measures which shall 
apply immediately. However, if they are not in 
accordance with the opinion of the Committee, such 
measures shall be immediately notified by the 
Commission to the Council. In this event the 
Commission may defer application of the measures 
No C 97/16 Official Journal of the European Communities 18. 4. 89 
which it has adopted for not more than one month as 
from such notification. 
The Council, acting by a qualified majority, may take a 
different decision within one month. 
6. The Committee may examine any other matter 
referred to it by its chairman, either on his own initiative 
or at the request of the representative of a Member 
State. 
Article 14 
1. At the end of a three-year period starting from the 
entry into force of this Regulation, the Commission shall 
submit to the Council and to the Parliament a report on 
the operation of the system provided for in this Regu­
lation, on the basis of the information provided by the 
Member States. 2. Having examined that report, the Council, acting in 
accordance with the procedure laid down in Article 
43 (2) of the Treaty, may decide, in the light of 
experience and of the development of economic 
conditions and agricultural incomes, to amend this 
system where necessary. 
Article 15 
This Regulation shall enter into force on . . . 
It shall apply until. . . [four years after the entry into 
force]. 
No PAIA may be approved after that date pursuant to 
Article 7 and no income aid provided for in a PAIA 
approved before that date may be granted to individual 
recipients after . . [nine years after the entry into force]. 
This Regulation shall be binding in its entirety and 
directly applicable in all Member States.