COMMISSION OF THE EUROPEAN COBVMUNITIES 
COM(93)109 final 
Brussels, 9 March 1993 
Report on the situation on 
the market for milk and milk 
products 
(presented by the Coa«1ss1on) 
Amended proposal for a 
COUNCIL REGULATION (EEC) 
establishing an additional levy in the aille and nilk products sector 
(presented by the Commission pursuant to Article 149(3) 
of the EEC-Treaty) 
Proposal for a 
COUNCIL REGULATION (EEC) 
amending Regulation (EEC) No 2072/92 fixing the target price 
for milk and the intervention prices for butter, skimmed-mi Ik powder 
and Grana Padano and Paraigiano Reggiano cheeses for two annual periods 
from 1 July 1993 to 30 June 1995 
(presented by the Commission) 
Amended proposal for a 
COUNCIL REGULATION (EEC) 
fixing the threshold prices for certain milk products 
for the 1993/94 nilk year 
(presented by the Commission pursuant to Article 149(3) 
of the EEC-Treaty) 
REPORT FROM THE COMMISSION TO THE COUNCIL ON 
THE PROGRESS MADE BY GREECE. SPAIN AND ITALY 
IN THE EFFECTIVE APPLICATION OF 
THE MILK QUOTA SCHEME 
AT 5 MARCH 1993 
Report on the situation on 
the market for milk and milk 
products 
- 2 -
Introduction 
In its 1991/92 price proposals presented to the Council in March 1991<1), 
the Commission drew attention to the worsening situation on the market for 
milk and milk products, where intervention stocks were building up fast 
despite stable or practically stable milk production. 
Given the signs of stabilization in overall community consumption and the 
lasting reductions in export possibilities on account of the political and 
economic changes in the former USSR and central Europe and the uncertainty 
following the Gulf War on the traditional, important markets in the Middle 
East, the Commission considered that a 5% reduction in the guaranteed total 
quantities was necessary to establish better balance on the market for dairy 
products. Out of a concern to lessen the impact of such a reduction on the 
market for beef and veal, the Commission proposed, and the Council approved, 
an initial reduction not exceeding 2% in quantities not subject to the 
additional levy for 1991/92. 
The Commission Communication to the Council and the European Parliament 
entitled "The Development and Future of the common Agricultural Policy"(2) 
endorsed this analysis of the situation on the market for milk products. On 
that basis the Commission considered a further reduction in the guaranteed 
total quantities necessary and proposed to the Council that the additional 
levy arrangements be extended (and simplified) and a reduction of 3% be made 
in the quantities in steps of 1% over three twelve-month periods starting 
from 1 April 1992 at the same time as the staggered reduction in the 
institutional prices for milk<3). 
On 21 May 1992, as part of the reform of the common agricultural policy, the 
Council adopted the Commission proposals on milk and milk products(3) 
subject to a certain number of amendments I *) # <phe council decided that 
there would be no 1% reduction in quantities for the 1992/93 period, thereby 
confirming the Member States' guaranteed total quantities which it had fixed 
for that period on 31 March 1992, subject to a final decision in the context 
of the reform of the CAP(^). it further decided that before the beginning 
of the 1993/94 and 1994/95 periods of the additional levy scheme the 
Commission would present reports to the Council on the market situation 
together, where appropriate, with proposals in order to permit the Council 
to review decisions taken for those two periods. This report has been 
drafted in response to that request. 
(1) COM (91) 72 final of 1 March 1991. 
(2) COM (91) 258 final of 22 July 1991. 
(3) COM (91) 409 final of 31 October 1991. 
(4) COUNCIL DOCUMENT No 6953/92 of 2 June 1992. 
(5) Regulation (EEC) No 816/92, published in OJ No L 86, 1.4.1992, p 
83. 
- 3 -
1. Trends in the community market 
The 2% reduction in the guaranteed total quantities for the 1991/92 
twelve-month period, combined with the Community programme for the 
restructuring of dairy production, the effects of which extended until the 
end of 1992, together with the marked drop in production in the new Lander, 
had a significant impact on milk collection in 1992. Output of intervention 
products, i.e. butter and skimmed-milk powder, fell as a result by 7% and 
20% respectively compared with 1991. Quantities bought into intervention 
fell accordingly and the market seemed in better balance in 1992. 
Intervention on the Community market (tonnes) 
BUTTER 
Stocks at 1 January 
Buying-in 
Sales 
Stocks at 31 December 
SKIMMED-MILK POWDER 
Stocks at 1 January 
Buying-in 
Sales 
Stocks at 31 December 1990 
20 300 
250 300 
19 800 
250 800 
4 811 
337 211 
8 880 
333 142 1991 
250 800 
174 000 
163 900 
260 800 
333 142 
198 570 
117 330 
414 383 1992 
260 800 
48 800 
136 400 
172 700 
414 383 
367 269 
47 114 
However, these figures must be seen in relation to those for subsidized 
consumption, which accounts for a significant proportion of Community 
production. 
- 4 -
subsidized consumption on the Community market (tonnes) 
1991 
BUTTER (Milk fat in butter equivalent) 
Buying-in (sales at 
reduced prices) 
Products on market 
(subsidized) 
TOTAL 
Production 93 800 
344 300 
438 100 
1 800 000 1992 
96 200 
343 900 
440 100 
1 660 000 Percentage 
change 
+ 2,6% 
- 0,1% 
+ 0,5% 
- 7,8% 
Subsidized consumption as 
a percentage of production 24,3% 26.5% + 9,1% 
SKIMMED—MILK POWDER (skimmed milk in skimmed-milk powder equivalent) 
Animal feed 
Casein 
TOTAL (SMP equivalent) 
Production of skimmed-
milk powder 
Casein (SMP equivalent) 
TOTAL (SMP equivalent) 955 000 
350 000 
1 305 000 
1 510 000 
350 000 
1 860 000 860 000 
458 000 
1 318 000 
1 200 000 
458 000 
1 658 000 - 9 % 
+ 31 % 
+ 1 % 
- 20 % 
f 31 % 
- 11 % 
Subsidized consumption as 
a percentage of production 70 % 79,5 % + 13 % 
Under these circumstances, the level of intervention stocks and accordingly 
the market situation as a whole are to a very large extent determined by 
disposal measures, i.e. the budget funds available to finance them, and by 
exports, which are also subsidized and fluctuate more widely (see Annex I). 
Community exports (tonnes) 
Exports 
Butter and butteroil 
Skimmed-milk powder 1991 
321 000a> 
253 000 1992 
250 000b) 
389 000 Percentage 
change 
- 22 % 
+ 54 % 
a) incl. special exports to the former USSR, Albania, Romania and Bulgaria: 
107 000 and food aid: 12 600 t 
b) incl. special exports to former USSR and Albania: 40 000 t and food aid: 
5 500 t 
- 5 -
2. Trends on the world market 
The Community has a commanding position on the world market, both in terms 
of total production and the main products and in terms of share of the 
market, which is about 50% as a result of exports amounting in both 1991 and 
1992 to approximately 13 million tonnes milk equivalent (see also tables in 
Annex II). 
Community share of the world market 
Year 
Nilk equivalent 
(nillion tonnes) 
% 1983 
10 
44 1984 
12.8 
48 1985 
12.2 
45 1986 
11.4 
41 1987 
13.8 
48 1988 
16.5 
54 1989 
14.2 
51 1990 
12.4 
49 1991 
12.8 
49,5 1992* 
13 
50 
Preliminary 
The reduction in Community stocks has not, however, affected the world 
market, where prices have varied little. 
International pricees (US dollars fob) 
Minimus 
GATT prices 
1990 1st 6 months 
2nd 6 months 
1991 1st 6 months 
2nd 6 months 
1992 1st 6 months 
2nd 6 months Butter 
1 350 
1 350 - 1 550 
1 350 - 1 500 
1 350 - 1 400 
1 450 - 1 850 
1 350 - 1 600 
1 350 - 1 500 Butteroil 
1 625 
1 600 - 1 900 
1 600 - 1 800 
| 
1 
1 600 - 1 800 
1 675 - 2 250 
1 
1 625 - 1 950 
1 625 - 1 800 
1 Cheese 
1 500 
1 700 - 2 000 
1 550 - 2 000 
I 
! 
1 600 - 1 900 
1 600 - 2 100 
1 1 
1 750 - 2 100 
1 750 - 2 100 Skimmed-milk powder 
1 200 
1 200 - 1 700 
1 300 - 1 500 
1 
1 200 - 1 400 
1 450 - 1 800 
1 1 
1 550 - 1 900 
1 550 - 1 900 
i 
This stability in prices for products apart from skimmed-milk powder 
reflects the situation on the world market, which continues to be dominated 
by the consequences of the political changes in eastern Europe and the Gulf 
War. 
The market outlets which once existed in the former USSR and certain central 
European countries may be considered lost for years to come. The economic 
changes which have occurred in those countries have drastically reduced 
their consumption capacity. After the current restructuring period, those 
countries will probably reappear on the world market but as exporters, given 
their agricultural potential. 
- 6 -
In the Middle East, export outlets cut off by the Gulf War remain uncertain. 
More generally, currency fluctuations and the lack of a lasting solution to 
the indebtedness of the developing countries may jeopardize any serious hope 
of consolidation of the market. 
In addition the upward trend in production, which is being confirmed in New 
Zealand, in spite of the fact that producers there receive no price support, 
and in Australia, as well as in the United States despite the fall in 
support prices, against a background of static or even falling consumption 
of milk fat in particular, is threatening the stability of the world market 
so that it is likely to remain very precarious given the prospect of new 
surpluses in the near future. 
Lastly, it would be unwise to ignore the programme to win new markets 
currently being financed by the United States (DEIP - Dairy Export Incentive 
Programme), which is specifically targeted at the Community's traditional 
markets. 
3. Control of production and balance on the market 
Despite the difficulties connected with any quota system, the production 
control scheme has given ample proof of its effectiveness. Since its 
introduction, it has allowed progressive savings to be made through the fact 
that it has not been necessary to dispose of 1.4 million tonnes of butter 
and 2.8 million tonnes of skimmed-milk powder at reduced prices. 
Application of too additional levy arranaoawnta 
EC i «uarantaad i Quantity I Allocation from t Quantity i Quantity i Sroaa i Corraotioo t Xntarobanaai Sat 
(tonne*| i total i aaspondad i Coaaunity raearvo i available i delivered t diffaranoo i for nilk t diroet i difforaneo 
t quantity i i i SLOM i • 1 t i i i t fat i ealae i 
t at b i o i d i • i f-a-b+o+d+ai « i h-«-f t i I j I k-h+i*j 
1984/83(1) l »» 324 000 l I 31) l 0 t 0 t »• »17 000 I »» 2»3 2C1 I -«23 73» I 142 I SS US I -SCO 402 
1»SS/8«(1) I »• 070 574 l - l 3»3 i 0 t 0 I »• 471 S74 llOO 172 744 I 1 701 170 I 03 I -37 131 I 1 «44 122 
l»8«/87(2) 1103 »88 374 I - I 3*3 I 0 I 0 il04 381 374 llOS 073 2»7 I f»l 723 t lit 733 I -• 31» I 001 »3» 
1987/88(2) 1102 0»< 143 I 3 770 103 I 443 I 0 I 0 t »• 741 040 I »» 173 711 t 412 (71 I 433 »02 I -2<S 031 I 303 522 
1988/89(2) ilOl 03» 100 t S 3»< 405 I 443 I 0 t 0 I »« 105 «23 I »7 <1» 77< t 1 514 153 I 400 S0« I -332 123 I 1 3»0 S3< 
1989/90(2) 1100 209 222 I 4 317 «03 I 443 t 302 233 I 1 03» ••« t »7 «7« 730 I »7 »47 2»« I 270 350 I 77C 102 I -372 «21 t «74 032 
1»»0/»1(2) llOO 35» 222 I 4 «7» 4M t 443 I 302 233 t 1 03» ••« I »7 («4 »S5 t »< 701 «93 I -1 082 »«2 I 1 372 ««1 I -402 808 t -112 909 
1991/92(3) ll0« «37 «93 I 4 983 ««« I «43 I «00 000 I 1 03» «8« tl03 734 915 il03 921 500 I 1«« 583 I n.a. I n.a. s n.a. 
I l l t l t l (p| l t l I 
1992/93(3) 1101 «72 000 t - i 443 i «00 000 I 1 039 88« tlOJ 734 915 I n.a. I I I I 
(a) Artiola Se(3| of Keuulation (EEC) Bo 804/CS. 
(b) «.««illation (SEC) Mo 775/87. 
(e), (d) and (a) Artiola 1 of «ovulation (EEC) So 154C/88. 
(«) Meaber Stataa• daolarationa to tba Coaaieeion, aatiaataa or provisional daolarationa in tha eaaa of eartain Maabar Btataa. 
(i) Artiola 12 of Regulation (EEC) Bo 1544/88. 
(j| Artiola «a of Regulation (EEC) Mo 157/44. 
(1) 10 Maabar Stataa. 
(2) 11 Maabar Stataa. 
(3) 12 Maabar Stataa. 
n.a. not available 
(p| provision»! 
Application of additional levy arrangeaenta 
(•000 t) 
1991/92 1992/93 
Ouaranteed i 
total t 
quantity I Quantity 
auapended Allocation 
froa 
Coaaunity 
reserve SLOM (1) Total 
quantity 
available Deliveries I Adjustaent. i Interchanges Differenoe 
(p| i for ailk i (3) i after 
l fat t t adjuataant 
« (J| t i Ouaranteed i Allocation t 
total t froa i 
quantity i Coaaunity i 
i reserve i SLOM 
(H Total 
quantity 
available 
1 
EUR 12 
S 
DK 
D 
EL 
E 
r 
IRL 
X 
L 
ML (4) t 10»7+«-<-4 11 
101 «72.0 12 
1 482.» 14-11-12*131 
103 754.» 
3 025.5 
4 589.1 
28 514.4 
544.8 
4 571.0 
24 1»«.0 
« »«3.2 
5 «20.1 
249.1 
11 248.3 
1 743.4 
14 3»2.S 144.3 
21».7 
1 340.2 
24.2 
20». 2 
1 153.« 
237. « 
3»5.» 
11.9 
539.1 32.1 
48.8 
234.2 
3.4 
9«.S 
254.3 
353.8 
88.0 
27.7 
119.8 «.« 
9.4 
141.0 
«4.0 
118.0 
1.7 
47.9 2 919 
4 427 
27 549 
S2« 
4 458 
23 3<2 
5 199 
8 312 
2«« 
10 87C 
1 743 
14 112 2 994 
4 424 
2« 171 
578 
5 931 
23 389 
S 201 
S 8C2 
253 
10 534 
1 584 
13 995 (•) 
(») 130.0 
10.2 
n.d. 
n.d. 
n.d. 
293.5 
0.0 
n.d. 
12.0 
381.0 
n.d. 
171.0 180.0 
0.0 
n.d. 
n.d. 
n.d. 
143.3 
«.3 
n.d. 
0.2 
2.4 
n.d. 
38 25.2 
7.1 
177.0 
-4.1 
-0.4 
3C.2 2 «81.0 
« 349.4 
27 154.2 
320.• 
« 3(1.8 
23 042.4 
4 725.« 
« 224.2 
237.2 
10 709.2 
1 743.4 
13 073.0 32.1 
48.» 
234.2 
3.4 
9C.S 
254.3 
355.8 
«8.0 
27.7 
119.8 «00.0 103 754.9 
«.« 
».« 
1(1.0 
«4.0 
118.0 
1.7 
47.9 2 919 
4 427 
27 549 
52« 
4 458 
23 3(2 
5 199 
S 312 
2<( 
10 87( 
1 743 
14 112 
source i Meaber State'a daolarationa 
(1) SLOM t quantitiaa allocated pursuant to Article 3a of Regulation (EEC) Mo 857/84. 
(2) Adjuataents pursuant to Article 12 of Regulation (EEC) Mo 1S4C/88. 
(1) Intercbanqe purauant to Article «a of Regulation (EEC) Bo 857/84. 
(4) 52 weeke. 
(a) Eurostat - Cronoa. Tbeae statistical data do not neeeaaarily oorreopond to dolivoriaa recorded under the arrangements, 
(p) provisional 
* preliainary 
- 9 -
While the scheme has definitely enabled deliveries to be kept down, even 
below the levels set for most Member States, the tables set out earlier also 
point to a growing tendency for those quantities to be exceeded if the fat 
content of milk delivered is taken into account. This constant rise in the 
fat content of milk delivered seriously endangers the balance of the market. 
While the trend in consumption is stable in the Community and generally in 
all developed countries, the trends by product show significant 
variations(6); demand for partly skimmed milk, fresh (reduced-fat) milk 
products and certain cheeses is rising by 1% to 2% per year while that for 
whole milk, hard cheese and particularly butter is falling constantly by 2% 
to 2.5% per year. The result is an overall decline in milk fat consumption 
that is growing steeper every year and persistent difficulties on the 
market for butter, clearly reflected in the market price, which is 91% of 
the intervention price on average and has stayed between 89% and 94% of the 
intervention price for the last three years (see Annex). 
This downward trend in consumption of butter and milk fat, which is almost 
certainly in part a response to dietary concerns, is also the result of 
competition from butter imitation and replacement products. Products 
competing with butter are now in a dominant position on the market for 
yellow fats<6>. 
In the face of a similar situation, Canada reduced its quota for 
manufactured milk by 3% for the 1992/93 period. The United States, which 
does not have a comparable system, reduced the support price for butter 
twice in 1992 and plans a further reduction in 1993, thus considerably 
altering the solid-non-fat ratio contribution to the value of milk, which 
is USD 1 725/tonne or ECU 1 215/tonne for butter and USD 2 145/tonne or 
ECU 1 511/tonne for skimmed-milk powder. 
Such a reduction in prices for butter, which may help effectively to slow 
down the development of imitation and replacement products, has the 
definite advantage of encouraging consumption. In this respect, it should 
be remembered (to emphasize the quantities involved) that approximately one 
third of milk collected is still processed into butter and only 60% of that 
butter is disposed of at the market price. 
Conversely, it may be feared that the - in some cases substantial -
devaluation of the green rates of currencies which have recently been 
readjusted within the EMS may result in a marked increase in prices for 
butter and that this may be damaging to consumption in those Member states. 
(6) cf. Report on developments on the market in milk products and competing 
products - Fourth report from the Commission to the Council -
C0M(93) 34 final of 5 February 1993. 
- 10 -
Conclusions 
On 21 May 1992 the Council decided on a reduction over two years of 2% in 
the guaranteed total quantities and 5% in the intervention price for butter. 
Since then the situation on the market, which appears on analysis to be 
still exposed to the same pressures as those identified at the time, does 
seem to be in better equilibrium than might have been feared in March 1992. 
This glimmer of improvement in the market may be put down partly to the 
trend in production in the new Lander, which is now 25% to 30% below the 
reference quantities available for the region. In the short term, a better 
adjustment hardly seems possible given the restructuring of holdings 
currently under way. 
In this connection, the Council must also take into account the efforts of 
Spain and Italy over the last year to reduce their milk deliveries to within 
the reference quantities available to them. Given the programme to 
encourage the discontinuation of milk production implemented in 1992/93 by 
Spain, a reduction of approximately 600 000 tonnes is expected in 
deliveries in 1993/94. Similarly, the Italian authorities anticipate a fall 
in production of around 300 000 tonnes in 1992/93. Overall, actual 
quantities of milk collected in the Community in 1993/94 should not exceed 
103 million tonnes, a figure which must be compared with the guaranteed 
total quantity available for 1992/93 (103 755 000 tonnes). 
Seen from the demand side, there is a persisting decline in consumption of 
butter and milk fats and a move towards imitation and replacement products 
assisted by the price edge enjoyed by the latter. 
To sum up, the Commission considers that the situation on the market for 
milk fat gives cause for much greater concern than the situation for milk 
protein. Accordingly, before deciding on a further reduction in the 
guaranteed quantities, a determined effort should be made to deal directly 
with the imbalance on the market for milk fat. The Commission therefore 
proposes that the 5% reduction in the intervention price for butter decided 
by the Council in May 1992 should apply in full from this year and not be 
staggered over two years. At the same time as this reduction, which only 
covers milk processed into butter i.e. less than a third of Community 
deliveries, it has been decided, as part of the CAP reform package, to 
abolish the co-responsibility levy. The Commission has proposed that this 
take effect on 1 April 1993. The impact on incomes will therefore be 
slight. 
Consequently, the 1% reduction in guaranteed quantities decided for 1993/94 
could be deferred and its implementation reconsidered at the same time as 
the 1% reduction decided for 1994/95, in the light of a new market analysis 
to be presented before the end of 1993/94. 
- 11 -
ANNEX 1 
Supply balance for buter C) ('000 t) 
1990 1991 1992 
- Stocks at 1 January 
- Pub Iic -
- Pr ivate -
- Product ion 
- Import 124 
104 
20 
1796 
88 335 
251 
84 
1800 
68 302 
261 
41 
1660 
60 
AvaiI able 2008 2203 2022 
Consumpt ion 
normal market price -
special measures 
Export 
Stocks per 
Pub Iic -
Pr ivate -31 December 1455 
1089 
366 
218 
335 
251 
84 1580 
1148 
432 
321 
302 
261 
41 1522 
1097 
435 
250 
240 
172 
68 
C) Including former GDR as from 1991. 
The trend in internal disposal measures and exports and a comparison 
with butter production is given below: 
Internal disposal ('000 t) 
of which 
- Pastry & ice-cream 
- Non-profitmaking organizations 
- Cooking butter 
- Other (mid-year) 
1990 1991 1992 
366 
292 
37 
16 
21 432 
352 
37 
19 
24 435 
362 
36 
19 
18 
Exports ('000 t) 
of which 
- Normal 
- Special pr ice 
- Food aid 218 
202 
5 
11 321 
201 
107 
13 250 
205 
40 
5 
TOTAL 
- as a percentage of production 584 
33 759 
42 691 
41 
Subsidized butter for the internal market plus total exports exceeded 
41% of butter production both in 1991 and 1992 while it was only 33% in 
1990. 
- 12 -
SUPPLY BALANCE FOR SKIMMED-MILK POWDER ('000 t) 
1990<*> 
wmwmmwmmmi*mwÊimmm^mtwmmmtmimmmmmmmmmmmmmmmmmmmmmwmm* 
(1) Public stocks at 1 January 5 1991 
333 1992 
414 
(2) Quantities available 
of which: 
- product ion 
- imports 
(3) EC consumpt ion 
of which: 
- at fulI pr ice 
-feed for calves 1672 
1665 
7 
1067 
300 
767 
329 (4) Exports 
of which : -
- exported on market terms 261 
- food aid 68 
(5) Balance - (2) - (3) - (4) 276 1528 
1510 
18 
1186 
330 
856 
253 
192 
61 
89 1205 
1200 
5 
1140 
335 
805 
389 
295 
94(**> 
-324 
(6) Public stocks at 31 December 333 414 47 
(7) skimmed milk used in 
manufacture of casein 
(SMP equivalent) 334 350 458 
(*) excluding the former GDR. 
(**) of which 44 000 tonnes covers emergency supplies to eastern Europe 
SUBSIDIZED DISPOSAL OF SKIMMED MILK ('000 t) 
1990 1991 1992 
1. COMMUN ITY MARKET 
Of which 
- animal feed 
- casein 
2. EXPORTS 
3. TOTAL 
4. AS A PERCENTAGE OF PRODUCTION 
(powder + casein) 1166 
832 
334 
329 
1495 
75 1288 
939 
349 
253 
1541 
83 1317 
859 
458 
389 
1706 
92 
- 13 -
ANNEX I I 
Milk collection 
(million tonnes) 
EC 
CIS + Baltic Statesf1) 
USA 
New Zealand 
Australia 1990 
106.0 
108.2 
66.8 
7.3 
6.4 1991 
100.7 
101.2 
67.4 
8.1 
6.6 1992 
100.2 
87.3 
67.8 
8.5 
6.7 
(1) Estimated production. 
Butter production (tonnes) 
EC 
CIS 
USA 
New Zealand 
Australia 1990 
2 013 000 
1 740 000 
591 000 
276 000 
106 000 1991 
1 800 000 
1 504 000 
606 000 
269 000 
107 000 1992 (p) 
1 660 000 
1 420 000 
615 000 
286 000 
111 000 
(p) Provisional figures. 
Production of skimmed-milk 
powder (tonnes) 
EC 
USA 
CIS 
New Zealand 
Australia 1990 
1 665 000 
399 000 
300 000 
172 000 
127 000 1991 
1 510 000 
398 000 
274 000 
162 000 
135 000 1992 (p) 
1 200 000 
390 000 
263 000 
155 000 
146 000 
(p) Provisional figures. 
cheese production (tonnes) 
EC 
USA 
CIS 
Australia 
New Zealand 1990 
5 150 000 
2 749 000 
886 000 
175 000 
122 000 1991 
5 170 000 
2 763 000 
780 000 
176 000 
125 000 1992 (p) 
5 270 000 
2 920 000 
700 000 
197 000 
139 000 
(p) Provisional figures. 
Share of market 
in milk equivalent 
EC 
New Zealand 
Australia 
USA 1990 
million 
tonnes 
12.5 
4.3 
1.8 
0.3 % 
49 
17 
7.3 
1.2 1991 
million 
tonnes 
13.0 
5.0 
2.3 
0.7 % 
49.5 
19.3 
8.9 
2.7 
- 14 -
Amended proposal for a 
Council Regulation (EEC) No /93 
of 
establishing an additional levy in the milk and milk products sector 
- 15 -
Amended proposal for a 
COUNCIL REGULATION (EEC) No /93 
Of 
establishing an additional levy in the milk and milk products sector 
The sixth recital is deleted and replaced by the following three recitals: 
N Whereas, under the reform of the common agricultural policy, the Council 
has decided to reduce the guaranteed total quantities by a further 2% 
over two twelve-month periods without prejudice to any review in the 
light of the market situation and the special conditions governing the 
implementation of the arrangements in certain Member States; 
whereas an analysis of the market shows that the situation regarding milk 
fat gives cause for much greater concern than that for milk protein; 
whereas an attempt should therefore be made first of all to remedy the 
imbalance on the market for milk fat before applying the 1% reduction to 
the guaranteed total quantities decided in principle for the 1993/94 
period; whereas that 1% reduction should accordingly be deferred and its 
entry into force should be reconsidered, in the light of a new market 
analysis, at the same time as that decided for 1994/95; 
Whereas, upon examination of the particular situations in Spain, Italy 
and Greece, it appears advisable on the basis of the current data to 
increase the guaranteed total quantity for Spain for 1993/94 at this 
juncture and to defer by at most three months the decisions regarding 
Italy and Greece; " 
Article 3 is replaced by the following: 
" Article 3 
1. The sum of the individual reference quantities of the same type may 
not exceed the -corresponding guaranteed total quantities in each 
Member State. 
- 16 -
2. The guaranteed total quantities shall be as set out below, without 
prejudice to any revision in the light of the overall market 
situation and the particular situation in certain Member States: 
Member State Deliveries (tonnes) Direct Sales (t) 
Belgium 2 919 720 373 193 
Denmark 4 427 830 951 
Germany (1) 27 549 481 150 038 
Greece 525 985 4 528 
Spain 5 200 000 366 950 
Prance 23 362 797 732 824 
Ireland 5 199 358 15 210 
Italy 8 312 190 717 870 
Luxembourg 266 499 951 
Netherlands 10 906 664 102 307 
Portugal 1 743 420 118 580 
United Kingdom 14 112 504 392 868 
(1) Of which 6 157 620 tonnes covers deliveries to purchasers 
established in the territory of the new Lander and 58 801 tonnes 
covers direct sales in the new Lander. 
The total quantities given for Spain are hereby fixed for the 
1993/94 period. 
3. Where the Council decides to adjust the abovementioned total 
quantities to the prevailing market situation, the adjustments shall 
be expressed as a percentage of the total quantities for the 
preceding period. " 
-17-
Proposal for a 
COUNCIL REGULATION (EEC) No /92 
Of 
amending Regulation (EEC) No 2072/92 fixing the target price 
for milk and the intervention prices for butter, skimmed-milk powder 
and Grana Padano and Parmigiano Reggiano cheeses for two annual periods 
from 1 July 1993 to 30 June 1995 
THE COUNCIL OF THE EUROPEAN COMMUNITIES, 
Having regard to the Treaty establishing the European Economic Community, 
and in particular Article 43 thereof, 
Having regard to the Act of Accession of Spain and Portugal, and in 
particular Article 234(3) thereof, 
Having regard to the proposal from the Commission1, 
Having regard to the opinion of the European Parliament2, 
Having regard to the opinion of the Economic and Social Committee3, 
Whereas, given the pressing need to improve the balance between supply and 
demand, the Council has decided to extend as from 1 April 1993 the 
additional levy arrangements introduced for milk and milk products and to 
reduce the guaranteed total quantities fixed under those arrangements, 
without prejudice to a review in the light of the market situation; 
Whereas an analysis of the market shows that the situation regarding milk 
fat gives cause for much greater concern than that for milk protein; 
whereas, as a consequence, before applying the 1% reduction in the 
guaranteed total quantities decided for the 1993/94 period, an attempt 
should firstly be made immediately to remedy the imbalance on the market for 
milk fat and to bring forward to 1 July 1993 the entry into force of the 
reduction in the target price and the 5% reduction in the intervention price 
for butter fixed by Council Regulation (EEC) No 2072/924, 
1 0J No 
2 OJ No 
3 OJ No 
4 OJ No L 215, 30.7.1992, p. 65. 
-18-
HAS ADOPTED THIS REGULATION : 
Article 1 
Article 2(1) of Regulation (EEC) No 2072/92 is hereby replaced by the 
fol Iow i ng: 
" (1) For the period from 1 July 1993 to 30 June 1994 
(ECU/100 kg) 
Community 
except 
Portugal Portugal 
(a) Target price for milk 26,13 
(b) Intervention price for : 
- butter 278,14 
- skimmed-milk powder 172,43 
- Grana Padano cheese: 
- between 30 and 60 days old 369,84 
- at least six months old 460,18 
- Parmigiano Reggiano cheese, 
at least six months old 509,04 26,13 
278,14 
195,48 
Art icle 2 
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. 
Done at Brussels, For the CounciI 
-19-
Amended proposal for a 
COUNCIL REGULATION (EEC) No /93 
Of 
fixing the threshold prices for certain milk products 
for the 1993/94 milk year 
-20-
Amended proposal for a 
COUNCIL REGULATION (EEC) No /93 
Of 
fixing the threshold prices for certain milk products 
for the 1993/94 milk year 
In Article 1(1), the table setting out the pilot products and the 
corresponding prices is replaced by the following: 
Pilot product ECU/100 kg 
of group of products 
1 56,86 
2 193,83 
3 263,32 
4 98,75 
5 130,52 
6 311,95 
7 372,24 
8 312,24 
9 589,52 
10 336,75 
11 310,80 
12 94,26 
/. INTRODUCTION FINANCIAL EVALUATION 
The proposals Include the following measures 
there will be a deferral of the 1% reduction In quotas already decided 
In principle for 1993/94. It Is assumed that this reduction will 
Instead be applied as from the beginning of 1994/95, at the same time 
as the 1% reduction already decided for that year; 
the quota for deliveries for Spain for 1993/94 will be Increased by 
650 000 tonnes. It Is also envisaged that before 1.7.1993, a decision 
will be taken on an Increase In the quantities for 
and Italy. Subject to certain conditions being 
assumed that there will be Increases respectively 
and 900 000 tonnes; 
the levels of the target price for milk and of the Intervention price 
for butter, currently envisaged to apply as from 1.7.1994, will 
Instead apply as from 1.7.1993. This leads to total reductions, as 
from 1.7.1993 of 5% for the Intervention price for butter and of 2,5% 
for the target price. There are also corresponding adaptations of 
threshold prices. 1993/94 for Greece 
fulfilled. It Is 
of 100 000 tonnes 
The 1993 budget and the financial assessment of the Council's decisions 
of May 1992 concerning the reform were drawn up on the assumption that 
the 1% quota reduction would be applied as from 1.4.1993, with a further 
1% reduction being applI cable as from 1.4.1994. It was similarly assumed 
that the butter intervention price would be reduced by 2.5% as from 
1.7.1993 and by a further 2.5% as from 1.7.1994. Against this background 
and therefore in relation to the évaluât ion made at the time of the 
reform decisions, the financial Impact of the proposed measures Is 
assessed below. 
2. FINANCIAL ASSESSMENT 
a) Deferral of the 1% decrease In quotas for 1993/94 to 1994/95 and 
Increase in quota for Greece of 100 000 tonnes 
(i) Impact on milk production 
In relation to the level foreseen at the time of the reform 
decisions, the delivery quota for 1993/94 Is Increased by 1.2 mio 
tonnes. This should lead to a corresponding Increase in milk 
deliverles and a consequent higher product ion of butter and skimmed 
milk powder of 55 000 tonnes and 105 000 tonnes respectively. These 
additional quantities of butter and skimmed milk powder are allocated 
between the 1993 and 1994 financial years as follows : 
tonnes 
1993 1994 
Butter . + 20 000 + 35 000 
Skimmed milk powder + 40 000 + 65 000 
- 2 -
Assuming that these additional quantities are exported to 
countries, the additional cost to the EAGGF is the following -. third 
1993 Mlo ECU (B) 
Butter 
Skimmed milk powder 
TOTAL 20 000 t X 1 690 ECU/t X 1.205 (DT) 
40 000 t x 645 ECU/t x 1.205 (DT) 40.7 
31.1 
+ 71.8 
1994 
Butter 
Skimmed milk powder 
TOTAL 35 000 t x 1 640 ECU/t X 1.205 (DT) 
65 000 t x 900 ECU/t x 1.205 (DT) 57.4 
70.5 
+ 127.9 
In addition, the maintenance of the 100 000 tonne increase In quota 
for Greece in 1994/95 and onwards would also lead to an extra 
expenditure of 12 Mio ECU (B) in 1994 and of 21 Mlo ECU (B) for 1995 
and subsequent years. 
(Il) Compensât ion for the reduction of quotas 
The financial assessment made at the time of the reform decisions 
took account of compensation to be paid to producers in 1994 in 
respect of the 1% reduction of quotas in 1993/94 (153 Mio ECU). 
Given that this quota reduction will now be applied as from 1994/95 
instead of 1993/94, these compensât ion payments will accordingly be 
transferred from 1994 to 1995. 
(iil) Impact on the beef sector 
The financial assessment made at the time of the reform decisions 
also took account of the Impact on the beef sector of the quota 
reduction of 1% for 1993/94. it was estimated that this would lead 
to extra beef product ion In 1994 of 76 000 tonnes, involving 
additional public storage expenditure of 189 Mio ECU. This extra 
expenditure will not now take place in 1994. Instead, the extra beef 
product ion will arise In 1995. Assuming that the extra quant it les 
are purchased into public Intervention and within the intervent ion 
ceiling, the additional public storage costs for that year would be 
181 Mio ECU. 
b) increase in quotas for Spain and Italy 
(i) Impact on milk production 
The envisaged increase in the delivery quotas for Spain and Italy 
cannot be dissociated from the measures which have been introduced to 
reduce milk product Ion in these two Member States. For Spain, 
measures for the buying-up of quotas are designed to reduce milk 
product ion by a total of 0.8 mio tonnes, whilst for Italy a 
corresponding reduction of about 1.6 mio tonnes should be achieved by 
1.4.1995. v 
- 3 -
On the assumption that Spain achieves Its reduction objective within 
the 1993 financial year but that the reductions In Italy are staged 
over three years (0.3 mlo tonnes in 1993, 0.65 mio tonnes In 1994 and 
0.65 mlo tonnes In 1995), the total cumulative impact on milk 
delIverles and the consequent cumulative effect on butter and skimmed 
milk powder production Is as follows ; 
Milk deliveries (mlo t) 
Butter production (1000 t) 
Skimmed milk powder 
production (1000 t) 1993 
- 7.70 
- 50 000 
- 95 000 1994 
- 1 .75 
- 85 000 
- 155 000 7995 
- 2.40 
- 7 75 000 
- 210 000 
In terms of their disposal cost on third country markets, these 
reductions In the product Ion of butter and skimmed milk powder are 
estimated to lead to the following savings : 
1993 Mlo ECU (B) 
Butter :- 50 000 t X 1 690 ECU/t x 1.205 (DT) -
Skimmed milk powder:- 95 000 t x 645 ECU/t x 1.205 (DT) -
TOTAL - 101.8 
- 73.8 
- 775.6 
7994 
Butter :- 85 000 t x 1 640 ECU/t x 1.205 (DT) 
Skimmed milk powder:-155 000 t x 900 ECU/t x 1.205 (DT) 
TOTAL - 768.0 
- 768.7 
- 336.7 
7995 and onwards 
Butter .-7 75 000 t x 1 580 ECU/t x 1.205 (DT) 
Skimmed ml Ik powder:-210 000 t x 900 ECU/t x 1.205 (DT) 
TOTAL - 278.9 
- 227.7 
- 446.6 
(ii) Impact on the beef sector 
The reduction in milk product ion in the two Member States concerned 
will require the corresponding removal of cows from the dairy herd. 
Assuming the cows are slaughtered, the consequent additional meat 
production and the extra costs of public storage^1) are assessed as 
follows : 
Quantity Cost 
tonnes Mlo ECU (B) 
1993 + 70 000 + 184 
1994 + 40 000 + 99 
7995 + 40 000 + 94 
TOTAL + 150 000 + 377 
(1) Assuming that the extra quant it ies can be 
intervent ion ceilings for the years concerned. purchased within the 
14) 
- 4 -
(III) Effect of the Increases in quotas 
Given that the level of milk production In Italy and Spain is greater 
than current quota levels and will not be lower than the new quota 
levels now envisaged for 1993/94, the proposed quota increases for 
these two Member States do not lead to an Increase In del Iveries. 
Instead, the potential financial Impact of the additional quotas 
should be seen In terms of receipts foregone from the application of 
the super levy. In this respect, each 100 000 tonnes of increase in 
the quota for 1993/94, is equivalent to foregone super levy receipts 
calculated as follows : 
100 000 t x 261.40 ECU/t X 115% X 1.205 (DT) - 36.2 Mlo ECU (B). 
c) Additional reduction In the Intervention price for butter and In the 
target price for milk as from 1.7.1993 
The effet of the proposal Is that for the period 1.7.1993 to 
30.6.1994, Inst I tut Zonal prices will now be as follows : 
ECU/tonne 
Butter Intervent Ion price 
Butter purchase price 
Skimmed milk powder price 
Target price Proposed 
prices (1) 
2 746.60 
2 471.90 
1 702.70 
258.00 Previous 
prices (1) 
2 818.90 
2 537.00 
1 702.70 
261.40 Variât Ion 
- 72.3 
- 65.7 
3.4 
(1) Taking Into account the applicat I on of the monetary correct ion 
coefficient of 1.012674. 
The financial Impact of these price reductions for the 1993/94 
marketing year Is assessed below -. 
(I) Export rest I tut Ions Mio ECU (B) 
Butter and butterol1: 230 000 t x -65.1 ECU/t x 1.205 (DT) « - 78.0 
Skimmed milk powder : 
Other products : 10.4 mio t x -3.4 ECU/t x 1.205 (DT) « - 42.6 
(il) Private storage for butter 
Normal aid 
Special Increase 200 000 t X - 4.4 ECU/t X 1.205 (DT) - - 7.7 
725 000 t x 65.1 ECU/t x 1.205 (DT) - + 9.8 
(III) Public storage for butter 
. Financial costs 
. Other costs 
. Depreciation 
TOTAL - 0.7 Mlo ECU (A) X 1.205 (DT) - - 0.7 
+ 6.7 Mlo ECU (A) x 1.205 (DT) - + 8.0 
- 2.3 Mlo ECU (A) X 1.205 (DT) - - 2.8 
+ 5.1 
(iv) Aids for butter: 445 000 t x -65.1 ECU/t x 1.205 (DT) = - 34.9 
(v) School milk : 575 000 t x -4.25 ECU/t x 1.205 (DT) = - 2.9 
TOTAL -84.6 
- 5 
This total saving of 85 Mio ECU (B) for the quota year 1993/94 is 
allocated as follows between the 1993 and 1994 financial years -. 
1993 : - 12 Mlo ECU (B) 
1994 : - 73 Mlo ECU (B) 
3. CONCLUSION 
The financial impact of the measures proposed can be summarized in the 
table shown below : 
Mio ECU (B) 
a) Non-reduction In quotas of 1% 
in 1993/94 and increase of 
0.1 mio t for Greece; quota 
reduction of 2% from 1994/95 : 
- Increased milk production 
- compensation payments 
- impact on beef sector 
b) Increase In quotas for Spain 
and Italy and Impact of 
buylng-up measures : 
- reduced milk production 
- impact on beef sector 
- super levy receipts 
c) Additional price reduction 
from 1.7.1993 instead of 1.7. 
1994 for the butter interven­
tion price and the milk target 
price 
TOTAL 1993 
+ 72 
- 776 
+ 184 
(1) 
- 12 
+ 68 1994 
+ 140 
- 153 
- 189 
- 336 
+ 99 
(1) 
- 73 
- 572 7995 
+ 21 
+ 153 
+ 181 
- 447 
+ 94 
(D 
+ 2 1996 
onwards 
+ 21 
- 447 
(D 
- 426 
(1) Each 100 000 tonnes of milk removed from the appi Ication of 
super levy corresponds to foregone levy receipts of 36 Mio ECU. the 
Finally, It should be noted that this assessment takes no account of the 
impact for the EAGGF of any Community contribution which may be made 
towards the cost of the national buying-up programmes being operated in 
Spain and Italy in order to reduce product ion by 0.8 mio tonnes and 1.6 
mio tonnes respectively. 
COMMISSION 
OF THE EUROPEAN 
COMMUNITIES 
REPORT FROM THE COMMISSION TO THE COUNCIL ON 
THE PROGRESS MADE BY GREECE. SPAIN AND ITALY 
IN THE EFFECTIVE APPLICATION OF 
THE MILK QUOTA SCHEME 
AT 5 MARCH 1993 
Address : 
LOI 120 - 10/39 
200. rw de la Loi 
9 - 1049 Brussels Tel.: Oirect line : 293 94 79 
Exchange : 299 11 11 
Fox : 296 23 25 Telex 
Telegraphic address 22037 AGftEC B 
COVEUR Brussels 
CONTENTS 
INTRODUCTION 
Situât ion in 1992 
Request for additional quotas 
PROGRESS AT 15 FEBRUARY 1993 
Preliminary comments 
Greece 
Spain 
Italy 
CONCLUSIONS AND PROPOSAL 
ANNEX Reports transmitted by Greece, Spain and Italy 
- 3 -
INTRODUCTION 
Situation in 1992 
Three Member States - Greece, Spain and Italy - had not fully 
introduced the milk quota scheme by 1992. 
Greece was entitled to apply country-wide compensations, which meant 
that no additional levies were due until the national guaranteed 
quantity was exceeded. This overrun in production first occurred in 
the 1988/89 milk year. Additional levies were charged to the milk 
industry by the Greek authorities in late 1992 for excess production in 
1988/89, but have not yet been collected, and levies for 1990/91 and 
subsequent milk years are still to be established. 
In Spain, although individual reference quantities for deliveries were 
provisionally allocated in 1987, no system was established to permit 
additional levies to be collected. Following a re-assessment of 
production statistics in 1991, it transpired that production had 
substantially exceeded the national reference quantity, with excess 
deliveries amounting to some 1.5 million tonnes in 1990/91. 
In Italy the national authorities had laid down a legal framework for 
the collection of additional levies, but UNALAT, the association of 
producer groups which represents practically the whole dairy industry, 
had failed to apply it, and had in particular failed to allocate 
individual reference quantities to its members, amongst other reasons 
because production already exceeded the quota allocated to it. A full 
re-assessment of production conducted in 1991 showed excess production 
of some 2.5 million tonnes in that year. 
Request for additional Quotas 
The three Member States requested increases in their national 
guaranteed quantities for deliveries. Spain and Italy asserted that, 
as a result of shortcomings in their national production statistics, 
production in the original reference year had been underestimated, and 
therefore higher national guaranteed quantities should have been 
claimed initially. All three asserted that structural changes, in 
particular rapid urbanization, had led to increased demand for milk and 
milk products, thus increasing the gap between demand and the national 
production quotas. 
- 4 -
The Council of Ministers agreed on 21 May 1992 (Greece and Spain) and on 
16 December 1992 (Italy) to consider an Increase in the guaranteed total 
quantities with effect from 1 April 1993 in order to permit a rapid 
transition to full compliance with the quota arrangements. Certain 
conditions were attached which each of the three Member States was required 
to respect, in particular: 
(a) an agency shall be established, having the general competence for the 
implementation and supervision of the additional levy system, 
(b) individual reference quantities, based on their deliveries in 1991/92, 
shall be allocated to each producer, the total of which shall not exceed 
the guaranteed total quantity, 
(c) the levies due shall be collected from the producers who have 
contributed to the excess production, after having shared out the excess 
quantities of other producers. 
The additional guaranteed quantities envisaged and the arrangements to 
absorb the excess production, are summarized in Annex 1. 
The three Memebr States were required to send to the Commission before 
31 December 1992 (Greece, Spain) and 31 January 1993 (Italy), reports 
attesting to the introduction In national regulations and the effective 
Implementation of these provisions, which were to be sent to the Council 
accompanied by appropriate proposals from the Commission. 
- 5 -
PROGRESS AT 15 FEBRUARY 1993 
Preliminary remarks 
Commission officials have: 
(a) examined 
submitted the reports which 
by the due date, each of the three Member States 
(b) examined the national regulations, whether adopted or still 
consideration, which aim at applying the milk quota scheme, under 
(c) conducted inspection visits lasting three weeks to the responsible 
control departments and a selection of regional authorities, 
dairies, producer associations and producers in the three Member 
States in order to appraise the progress made in the field. 
It is apparent that the time required to fully introduce a quota system 
covering all milk producers should not be underestimated. 
Firstly the enabling legislation and the detailed implementing rules 
must be proposed and adopted in a form which is workable in countries 
as highly federalized as Spain and Italy. 
Secondly procedures must be established for recording deliveries of 
milk to each dairy or intermediary buyer, establishing its fat content, 
identifying the producer and determining when the producer's individual 
reference quantity has been exceeded. 
The individual reference quantities have to be established, and the 
opportunity given for appeals and reassessment. 
Buy-up schemes cannot usefully be implemented until the claimants' 
entitlements to quotas have been established. 
A structure for inspections and supervision must be established to 
verify production declarations, to ascertain cessation in the case of 
buy-up, to ensure that all quantities of milk traded by intermediaries 
are properly accounted for, and to ensure that the appropriate amounts 
of levy are calculated and collected. 
The Commission has examined the progress made by each of the three 
Member States. It must be stressed that none had completed the 
implementation process by mid-February 1993. Each aims to apply the 
quota scheme as from 1 April 1993, i.e. as from the 1993/94 marketing 
year, and none plans to collect additional levies for the 1992/93 milk 
year. Only at the end of the 1993/94 marketing year, therefore, will 
it be possible to confirm application of the system, as levies can then 
be seen to be collected from those individual producers who exceed 
their reference quantities. 
- 6 -
The Commission's main aim is to ensure that the milk quota scheme is 
effectively applied. Until then the Commission will continue through 
the clearance of accounts procedure to recover from the Member States 
concerned appropriate sums to compensate for their failure to collect 
additional levies on excess production. In this context it should be 
borne in mind that the additional levy is not intended as a source of 
revenue for the Community budget, but as a means of restricting milk 
production to a certain maximum quantity. This objective will be 
achieved only when the burden of the levy is borne by the individual 
producers rather than the Member States. 
(5) 
- 7 -
GREECE 
Legal provisions 
The Greek authorities adopted a legal basis for the implementation of 
the milk quota scheme on 28 September 1984, and, in response to 
Commission observations, amended this by adopting a replacement decree 
on 14 July 1986. Formula "B" had been applied whereby all the dairies 
were considered as one purchaser. 
On 10 April 1992, the Ministry of Agriculture issued a circular which 
established the procedure for the allocation of individual reference 
quantities to each producer, one quantity for deliveries to dairies, or 
intermediaries, and one for direct sales. The regional agricultural 
directorates were required to perform administrative checks on all 
claims for quotas, and to verify 10 X on the spot. DIDAGEP was 
required to allocate the national guaranteed quantity between the 
regional directorates, which would in turn allocate individual 
reference quantities to producers. This procedure was to have been 
completed by 10 January 1993. 
Purchasers of milk are required to keep a record of the quantities 
delivered by each producer and of the fat content and to collect the 
additional levy due by producers exceeding their reference quantities. 
Direct sales are declared at the end of each year to the competent 
regional directorate, which establishes the amount of any additional 
levy due. 
The regional directorates are responsible for all the controls and 
cross-checks between the records of producers, dairies and 
intermediar ies. 
Implementation 
Individual reference quantities 
For the 1992/93 milk year, before the introduction of the revised 
scheme, reference quantities were distributed to the dairy industry, 
but there has been no meaningful distribution by the industry to the 
individual producers. 
The introduction of the revised scheme has fallen considerably behind 
the schedule laid down in the circular dated 10 April 1992. It is now 
expected that DIDAGEP will allocate the 1993/94 reference quantities to 
the regional directorates on 10 March 1993, instead of 15 November 1992 
as laid down in the circular, and further time will be required for the 
regional directorates to allocate individual reference quantities to 
each producer. 
- 8 -
The quant ities aval lab le on each producer's holding have been assessed 
by the regional authorities in relation to the number of cows held and 
to an estimate of their milk yields. The Commission has proposed that 
the Greek authorities base the individual reference quantities not on 
this rather arbitrary evaluation but on actual deliveries to dairies in 
the 1991/92 milk year, as the Spanish and Italian authorities have 
done. Moreover, the provisions regarding the milk fat content do not 
comply with the Community regulations, as no individual average content 
has been established. 
Competent agency 
A condition for the Council's agreement was that an agency is to have 
general competence for the implementation and supervision of the 
additional levy system, and in particular is to have the power to: 
check on the spot the accuracy of producers' and purchasers' 
declarations, 
calculate the levy due and collect it. 
None has yet been appointed in Greece, but the authorities have 
indicated their intention to establish a Milk Board before the 
beginning of the 1993/94 milk year. 
The Commission considers that the principal obstacle to proper 
implementation of the milk quota scheme in Greece is the lack of 
central supervision and control which such a body should be exercising. 
The present reliance on 56 regional directorates for all administration 
and verification has been the main cause of delay in allocating 
individual reference quantities, leads to unequal treatment of 
producers, and prevents any effective cross-check on quantities of milk 
produced in one region but sold to an intermediary or dairy trading in 
another. 
Unlike Spain and Italy, there is as yet no provision in Greece for a 
central record of production and deliveries or even any record at 
regional level. 
Conclusions 
The Commission has informed the Greek authorities that it considers 
that the essential prerequisites for the application of the milk quota 
regime in Greece are the establishment of a central agency with the 
means to record and monitor milk production and deliveries, and the 
allocation of individual reference quantities based on deliveries to 
dairies in the 1991/92 milk year. These requirements have yet to be 
met. 
On the basis of the unreliable production figures submitted by the 
regional directorates, requests for individual reference quantities for 
deliveries cover a total of some 775 000 tonnes, considerably more than 
the 625 000 tonnes in the national guaranteed quantity which will 
become available after the increase in the national quota. These 
disquieting statistics, which indicate that production is increasing 
much more rapidly than foreseen, underline the necessity for the 
implementation of systems for accurate and timely recording of 
production figures. 
- 9 -
SPAIN 
lega' provlslQns 
The Spanish authorities have adopted substantial legal provisions 
covering the implementation of the Community additional levy 
arrangements. Those provisions clearly demonstrate Spain's 
determination to apply the arrangements. The first national texts 
submitted for examination have been applicable from 1 April 1992 but 
will have to be adapted to the regulations adopted by the Council and 
the Commission governing the extension of the arrangements from 1 April 
1993. 
(a) Texts adopted in December 1991 
The basic text for the implementation of the arrangements is the 
Royal Decree of 30 December 1991 providing for a plan for 
restructuring the dairy sector. 
(i) It provides for the allocation of individual reference 
quantities to all producers and producer groups who declared and 
provided supporting documents for quantities marketed by them 
for 1985 (or, where applicable, 1983 or 1984). That quantity 
may be affected by the application of various percentages 
provided for in the Community regulations and may vary or change 
as provided for therein. 
The levy is payable where the individual quantity adjusted on 
the basis of the fat content of the products is exceeded and 
after quantities have been balanced out. 
(ii) A national reserve is set up and may be supplied from the 
various sources provided for in Community law, including 
programmes for the voluntary discontinuation of production. 
Such programmes, be they national or Community, can only permit 
the definitive discontinuation of production and not temporary 
discontinuation as provided for in Article 5(2) of the Decree. 
Quantities are allocated from the reserve in accordance with 
Community law. 
By a decree adopted on 30 December 1991 too, plans for the 
definitive discontinuation of milk production were implemented. 
That programme brings together in a single operation the various 
possibilities afforded by Community legislation in particular as 
regards the use of Community funds. 
From the legal viewpoint, the programme presentation is in line 
with the Community provisions while it is also pointed out that a 
resolution (see below) was adopted in July 1992 by SENPA to verify, 
by means of supporting documents and on-the-spot checks, that all 
production has actually been definitively discontinued. 
- 70 -
(b) Texts adopted in 1992 
The Decree of 30 December 1991 summarized in (a) was followed by 
the Order of 26 June 1992 on the updating of individual reference 
quantities of milk producers affected by transfers before 1 April 
1991. 
To update the reference quantities, producers receiving transfers 
in whatever form before 1 April 1991 must make an application for 
registration as having an individual reference quantity on their 
own holdings since 1 April 1991. In addition they must have been 
engaged in production uninterruptedly (except in cases of force 
majeure) from the date of the transfer to that of submission of 
their appiicat ions. 
That Order should provide the Spanish authorities with a clear idea 
of the number and identity of persons with individual quantities at 
1 April 1993 when Council Regulation (EEC) No 3950/92 is affected. 
Following the agreement reached in the Council on 21 May 1992 to 
make its decision to increase Spain's guaranteed total quantity by 
500 000 tonnes subject to a certain number of conditions, on 30 
October 1992 the Spanish authorities adopted a Royal Decree 
implementing those conditions. 
Thus, the public body designated to apply and monitor the scheme is 
SENPA. The latter is authorized to caclulate the levy once the 
figures have been forwarded and production declarations received 
and verified. That authorization is very precise and ensures 
proper application of the scheme within the time limits laid down. 
There is also provision for the Ministry of Finance to take action 
for recovery of sums and to ensure effective execution of 
procedures. 
The text states clearly that individual reference quantities are to 
be allocated to producers and that all changes relating to 
quantities are to be registered. 
7 ; -
The basis for calculating such allocations has been altered as 
compared with the Decree of 31 December 1991 since a programme for 
the discontinuation of milk production has been applied and the 
Council has decided, subject to conditions, to increase Spain's 
guaranteed total quantity. At all events there is provision for a 
downward adjustment in individual quantities so that the sum 
thereof does not exceed the guaranteed total quantity. 
At the same time as the Royal Decree was adopted, various 
resolutions were adopted by SENPA. Two of them relate to the 
declarations to be made by purchasers and by direct sellers. 
A third resolution lays down rules on the verification and 
monitoring of definitive discontinuation of production. 
By the Royal Decree of 30 October 1992, followed by the Order of 
4 December 1992, the Spanish authorities supplemented and where 
necessary amended the texts adopted previously in order to comply 
more closely with the conditions which the Council laid down for 
the definitive decision to increase the Spanish guaranteed total 
quantity. The Spanish authorities have even implemented in advance 
of the time limit certain provisions which the Council only adopted 
in December 1992, such as the possibility purchasers enjoy of 
withholding advances to producers to ensure collection of the levy. 
Appraisal 
The Spanish authorities have adopted texts demonstrating their clear 
determination to comply as closely as possible with the conditions* laid 
down by the Council for a definitive increase in the guaranteed total 
quantity. The legislation must be slightly amended to adapt it to the 
regulations on the reform applicable from 1 April 1993. 
The legislation is at variance with Community requirements, in 
particular in so far as it provides for a reduction in the reference 
quantity where utilization is less than 75% over two consecutive 
periods, except in cases of force majeure. 
- 12 -
Implementation of the scheme 
Allocation of individual reference quantities 
SENPA, the body assigned general competence for implementation and 
supervision of the scheme, has introduced the systems necessary to 
record and cross-check declarations of milk deliveries, has obtained 
from the dairies and the intermediaries the declarations concerning the 
1991/92 marketing year and allocated a provisional individual reference 
quantity and fat content to each producer by letter of notification in 
December 1992. 
SENPA has undertaken a programme of checks on declarations submitted by 
milk purchasers. Definitive individual reference quantities for 
deliveries will be allocated once these verifications have been 
completed, once grounds for appeals against the provisional allocation 
of reference quantities, lodged by some 20% of milk producers, have 
been examined and after confirmation by the Council of the increase in 
the national guaranteed quantity. It is also intended to inform milk 
purchasers before 1 April 1993 of individual quotas allocated. 
A programme for the verification of declarations of direct sales must 
also be completed before reference quantities can be allocated. In the 
meantime, no accurate information is available on the quantities 
covered by direct sales, estimated at some 10 % of total milk 
product ion. 
National buy-up scheme 
The nationally funded repurchase programme was implemented in April 
1992 and a total of 656 000 tonnes has been bought up (568 000 tonnes 
of deliveries quota and 88 000 tonnes of direct sales quota). 
Actual implementation is thus close to the target of the repurchase of 
600 000 tonnes of delivery quota set in the agreement with the Council. 
SENPA has carried out checks on compliance by the claimants, with 
generally satisfactory results. This buy-up scheme was based on the 
reference quantities distributed in 1987 and was implemented before 
definitive reference quantities were established. However, as the 
repurchase programme took place after 1991/92, any substitution of the 
bought-up quantities by other producers will not be reflected in these 
producers' quotas and will thus be eliminated in 1993/94. The 
effectiveness of the repurchase programme is also supported by 
slaughter statistics, which show that 35 % more heifers were 
slaughtered in 1992 than in 1991 (205 826 slaughtered in 1992, 152 493 
In 1991). 
The repurchase scheme to be financed by the Community has not yet been 
launched, pending confirmation of the Council's agreement, and 
finalization of individual reference quantities. 
- 73 -
Conclusion 
Spain has made considerable progress towards the effective 
implementation of the milk quota regime by 1993/94. 
The Commission has verified that SENPA, both at its head office and in 
its departments in the regions in which most of the milk is produced, 
is undertaking the controls necessary to establish a sound basis for 
effective implementation and sees no reason why these controls should 
not be completed before 1 April 1993 and definitive individual 
reference quantities allocated for deliveries. 
Until verification of claims for direct sales quotas is completed and 
the quantity of direct sales established, the Commission cannot confirm 
that 150 000 tonnes of national guaranteed quantity are available for 
transfer from direct sales to deliveries, as proposed in the agreement 
with the CounciI. 
- 74 -
ITALY 
iQflal provisions 
Framework law 
The Framework Law laying down urgent measures for the dairy sector and 
covering the implementation of the Community additional levy 
arrangements came into force on 19 December 1992. 
(a) Allocation of individual reference quantities 
To obtain an individual reference quantity, one must belong to a group 
or be registered individually in lists published by the authorities. 
Member producers have an A quota corresponding to quantities marketed 
in 1988/89 (or from 1985/86 to 1987/88 in the event of exceptional 
circumstances) and a B quota corresponding to the amount by which 
quantities marketed in 1991/92 exceed those in 1988/89. Non-member 
producers only have A quotas corresponding to the quantities allocated 
to them in 1988 and which cannot exceed the quantities marketed in 
1990/91 or 1991/92. 
Reference quantities are all allocated subject to a decision by the 
Council regarding the increase in Italy's guaranteed total quantity. 
National measures will be taken for the difference, i.e. the B quota, 
to be absorbed over three years. 
To that end, AIMA is authorized to introduce programmes for the 
voluntary discontinuation of production with the possibility of a 
difference in the way A and B quotas are dealt with. 
Even though the Community arrangements do not provide for the 
allocation of two quotas per producer, the practical solution proposed 
to absorb the production surplus may be accepted. 
(b) Calculation and payment of levy 
In accordance with Article 3 of the Law, producer groups may manage 
their members' quotas. 
Article 5, 6 and 7 lay down provisions on payment of the levy. 
Purchasers must draw up declarations of production by non-members and 
forward them with those for members within the time limits laid down in 
the Community regulations, in particular but not exclusively to AIMA. 
- 15 -
For non-members, purchasers withhold the levy where the individual 
quota is exceeded and pay it to the authorities within three months 
from 31 March, deliveries made outside quotas being charged in full. 
For members, the same amount is withheld but deliveries are balanced 
out within four months from 31 March and payment takes place within 20 
days of that time limit. Purchasers pay the levy to the authorities 
and refund any sums over to the producers. 
(c) Penalties and controls 
The text expresses a determination to ensure that the levy is paid by 
those liable. Penalties apply at all stages of the process. 
Controls are conducted by the regions and autonomous provinces within 
their areas of responsibility and without prejudice to checks falling 
within that of the judicial police and fraud prevention department. 
Implementing rules 
The Commission was consulted on the draft implementing rules, which are 
to be adopted before 1 April 1993, and sees to it that they take 
account of certain shortcomings or omissions in the Framework Law, i.e. 
in partIcular: 
the fat content of the products delivered to be taken into account, 
the amendments to be made following the reform of the milk quota 
scheme in 1993/94, 
no discrimination to be made between members and non-members of 
producer organizations, 
the link between the individual quota and the land, 
the procedure for paying the levy where the quota for direct sales 
is exceeded. 
The latest draft, forwarded on 22 February 1993, is basically in line 
with the Commission's comments. 
- 76 -
Appraisal 
The process of national implementation of the additional levy 
arrangements is under way. 
The national law demonstrates clear determination to apply the 
Community additional levy arrangements as regards the allocation of 
individual reference quantities, payment of the levy and application of 
penalt ies. 
It seems probable that the implementing rules will be published in 
accordance with the timetable laid down and that they will supplement 
the provisions of the Law of 19 December 1992. A comprehensive legal 
framework will then exist. 
However, the Commission has drawn the attention of the Italian 
authorities to the following points: 
management of quotas by producer groups, as provided for in Article 
3 of the Law, introduces a difference of treatment between member 
producers and non-members, in particular as regards the amount and 
payment of the levy due. In addition, such management no longer 
has any legal basis since Article 12(c) of Regulation (EEC) 
No 857/84, to which the national Law refers and which treats 
producer groups in the same way as producers, was not incorporated 
in Regulation (EEC) No 3950/92; 
Article 2(3) and (7) of the national Law, which reduce reference 
quantities to bring them into line with quantities actually 
marketed if the latter are less than the former, are at variance 
with the Community rules, which do not require producers to produce 
and market the whole of the reference quantity allocated to them. 
Implementation of the regime 
Allocation of Individual reference quant ities 
The Individual reference quantities were provisionally established In a 
bulletin published on 19 January 1993. These provisional figures are being 
verified and cross-checked by the producer associations, and It Is Intended 
that the definitive Individual reference quantities will be published on 
15 March 1993. It Is not at present Intended to notify each Individual 
producer, although the Commission considers this to be an essential element 
of an effective application of the quota regime. 
Whilst those producers which benetlfed from repurchase programmes have been 
eliminated from the lists of individual quota holders, the status of some 
40 000 producers who ceased producing without compensation, and thus are 
eligible to claim quotas, Is at present under examination. 
Until January 1993, AIMA had relied entirely on UNALAT for the establishment 
of the quantities delivered to each purchaser. On 27 January, AIMA sent to 
all regional authorities Instructions to undertake checks on the data on 
which the quota a Ilocations.were based. 
- 17 -
During its missions to a selection of regions, producer associations and 
purchasers, the Commis!son's departments found that the purchasers have kept 
a sufficient record of deliveries and of fat content since 1988/89, and that 
it is possible to verify the deliveries declared by the Producer 
Associations for the 1988/89 and 1991/92 years to the purchasers' books and 
records. The regional authorities are aware of their control 
responsibiI ities. 
There is thus evidence that a sound basis exists for the allocation of 
substantially all the deliveries quotas, and for a control over deliveries 
and over the collection of supplementary levies. However, as the controls 
by the regional authorities have only now begun to be implemented, a 
verification of their effectiveness cannot yet be undertaken. 
So far as concerns direct sales, the basis for declaration, control and levy 
collection is provided for in the draft Implementing regulations. 
Competent agency 
The conditions to the Council's agreement require the agency having general 
competence for the Implementation and the supervision of the system to have 
the power to 
check on the spot the accuracy of the declarations of producers and 
purchasers, 
calculate the levy due and collect It. 
In Italy, the responsibility for checks has been allocated not to a single 
body such as AIMA, but to the regional authorities. The Commission's 
departments will continue their close monitoring of the Implementation, and 
verify in particular the adequacy of the controls to be exercised by the 
regional authorities. The Commission considers It more appropriate for a 
central body to undertake checks throughout the territory, so that full 
assurance can be gained that the quantities on which levies are collected 
are fuily ver if led. 
Repurchase scheme 
Three repurchase schemes had been undertaken before the Council's agreement, 
a programme of 163 592 tonnes repurchased under regulation 1183 90, a 
nationally financed repurchase programme of 440 000 tonnes established by 
AIMA on 22 March 1991, and a programme of 285 853 tonnes under regulation 
1637/91. 
Except for some 10% of the claims under the last-mentioned programme which 
are still being processed, the Italian authorities have verified that no 
beneficiary has received a production quota. 
The repurchase programme of up to 0,73 million tonnes mentioned In the 
Council's agreement has not yet been implemented, pending a deflnltvie 
agreement on EEC finance and the establishment of the quantity of surplus 
production to be absorbed. 
- 18 -
Conclusions on the progress made 
A system which affects so many producers and so large an industry takes a 
certain time to implement. The basic conditions, covering the essential of 
all milk production, have been established, in that the enabling legislation 
has been adopted, the individual production statistics established and 
individual reference quantities provisionally allocated for deliveries. 
The Commission's departments are satisfied that the next steps are in the 
process of being taken, which are the adopting of the detailed Implementing 
rules, and the establishment and Implementation of control systems 
throughout the regions. 
It will take some further months before the progress on these next steps can 
be verified, and all controls over repurchase programmes and quota 
allocations completed, and indeed some years before the full application of 
the quotas can be confirmed, as Is recognized in the Council's agreement 
which provides for a time limit of 1 April 1995 for the full absorption of 
excess production. 
- 79 
CONCLUSIONS AND PROPOSAL 
As none of the three Member States has applied the regime, or is in a 
position to collect supplementary levies, in the 1992/93 year, it will 
not be until the end of the 1993/94 year that the final proof of 
compliance, the collection of levies from producers exceeding their 
individual reference quantities, will be available for verification. 
It is therefore still too early for the Commission to confirm that all 
the conditions of the Council's agreement have been met. 
The Commission considers that, provided it respects its intentions 
mentioned in this report, Spain has made, by 15 February 1993 all the 
progress which, given the point of departure, can be reasonably 
expected towards fulfilling the conditions. 
Greece and Italy have made a substantial effort and progress to apply 
the Council conditions taking into account particularly the difficult 
initial situation and time available. 
Nevertheless, further progress is required. 
For Greece, the following conditions remain to be fulfilled: 
a) individual reference quantities have to be calculated on the 
basis of deliveries to purchasers in 1991/92, and individual fat 
reference quantities established, 
b) individual reference quantities have to be notified to each 
producer, and communicated to the purchasers, 
c) a central agency must be established and equipped to verify the 
production records and the collection of levies due, 
d) an adequate record of production must be established both 
locally and centrally. 
Similarly, for Italy the following conditions remain to be fulfilled : 
a) adoption of the implementing regulations, 
b) notification to each producer of the individual reference 
quantities and communication of these to the purchasers, 
c) establishment of a central agency for the effective verification 
of the quantities declared and of the quantities on which levies 
are charged. 
Moreover, the attention of the Italian authorities is drawn to the 
need to remove all discrimination between affiliated and non 
affiliated producers. 
The Commission, therefore, proposes an interim solution whereby: 
a) The guaranteed quantity for deliveries for Spain be increased 
provisionally, for the 1993/94 year only by the amounts 
mentioned in Annex I. 
- zu -
(b) Greece and Italy are granted until 15 May 1993 to fulfil the 
conditions of the Council agreement so that, by the end of 
July 1993 and on the basis of a further proposal from the 
Commission, an increase of the guaranteed quantities for 
deliveries may be considered for the 1993/94 milk year. 
(c) It reports again to the Council in March 1994 on further 
progress made in the effective application of the milk quota 
scheme in the three countries concerned and proposes further 
measures to be taken in the light of such progress, and in 
particular states whether the increased quotas should be 
continued in 1994/95. 
- 27 -
PROPOSALS FOR ABSORBING EXCESS PRODUCTION 
SPAIN 
SPAIN 
(tonnes) 
Present quota 
- Deliveries 4 550 000 
- Direct sales 527 000 
Present estimated 
production 6 000 000 
Difference between 
quota/production 1 450 000 
National buy-up 
already decided 600 000 
SOLUTION 
Revision quota 500 000 
Direct sales 
transfer 150 000 
Buy-up financed 
by the Community 200 000 
GREECE: Quota is increased by 100 000 tonnes 
Mi 11 ion tonnes 
ITALY 
I. Excess to be removed 2.47 
II. Of which to be removed without compensation 
in accordance with I ta Iian law 0.84 
III. Net excess 1.63 
IV. Increase in wholesale quota 0.9 
V. Amount to be bought up 0.73 
VI. Amount to be purchased with Community 
contribution (25% of V) 0.2 
- 22 -
ANNEX 
REPORTS TRANSMITTED BY GREECE, SPAIN AND ITALY 
HELLENIC REPUBLIC 
Ministry of Agriculture ATHENS, 30 November 1992 
Ref : 210365 
I. Directorate for Management of Agricultural Products 
Animal Products Section To : EEC Commission 
Akharnon 241 10446 ATHENS VI/DI - Milk Products 
Information : G. Zakharopoulos 
Tel : 8626415 
II. Directorate for Animal Production 
and Exploitation of Animal Products 
Milk Products Section 
Kapnokopt ir iou 6 
Informat ion : E. Bol las 
Tel : 8215894 Copies : EAGGF 
Greek Permanent 
Représentât ive 
SUBJECT : Mi Ik quotas 
Pursuant to the provisions of the Council's compromise document 
No 6953/92/AGRI 53 of 2 June 1992 on reform of the CAP, we enclose the 
report provided for in paragraph 6 of Annex II of that document. 
REPORT ON IMPLEMENTATION OF THE MILK QUOTA SYSTEM IN GREECE 
1. Implementation of the system 
Since the milk quota system was first implemented, and up to the present 
time (92/93 milk year), Greece has been applying the quota system in 
accordance with Formula B provided for in Council Regulation (EEC) No 857/84 
and Commission Regulation (EEC) No 1546/88. 
In order to implement the provisions of these Regulations, the 
Ministries of Agriculture and the National Economy published joint Decision 
No 204930 of 1 August 1984, which was supplemented and amended by their 
joint Decision No 39187 of 14 July 1986. 
2. Transfer of guaranteed quantities from direct sales to deliveries 
to dair ies 
Because of the structural changes which have occurred in Greece in 
recent years in the way the milk produced is marketed, and in particular 
- 2 -
because of the increase in deliveries instead of direct sales (as the result 
of the steadily increasing demand by consumer's for standardized fresh milk 
products and the implementation of health and veterinary regulations), 
Community regulations were adopted, following a request by Greece, which 
allowed the transfer of 110 000 tonnes of milk from direct sales to 
deliver ies. 
3. Taking into account the provisions of Regulations (EEC) No 1336/86 and 
No 775/85 which reduced the overall guaranteed quantities of deliveries and 
direct sales, and the continual structural changes which have occurred in 
the areas which collect milk from industries (Formula B), and in order to 
meet the consumer requirements specified in the previous paragraph, a number 
of decisions were taken amending the basic implementing Decision 
No 339187/86, although these only applied to Annexes A and B to that 
Decision. (These Decisions are enclosed). 
4. Monitoring the system 
Pursuant to Decision 339187/86, responsibility for monitoring the system 
has been assigned to the Regional Departments of the Ministry of 
Agriculture, which in turn keep industries and producers informed about 
implementation of the system in Greece. 
It should be stressed that until the 87/88 milk year there were no 
serious problems, since overall quantities produced did not exceed the 
guaranteed quantities specified, after taking into account the possibility 
of making adjustments for any overruns at national level (Article 10 of 
Regulation (EEC) 857/84). 
Beginning in the 88/89 milk year, production started to exceed the 
overall guaranteed quantities specified. However, the continual changes 
occurring in the industrial collection areas and the inherent administrative 
impossibility of monitoring the system (because the shortage of computer 
equipment, in particular, and staff made the task of inputting and 
processing data extremely slow) resulted in a delay in the confirmation and 
cross-checking of the original figures and consequently in the proportional 
charging of additional levies to the industries concerned. 
- 3 -
5. Proportional charging of additional levies 
9 
Pursuant to the relevant Community regulations and national decisions, 
the Ministry of Agriculture adopted Decision No 205197 of 5 October 1992 on 
the proportional charging of additional levies for the 88/89 milk year to 
the industries concerned. 
The reasons for the delay in charging were explained in paragraph 4. 
The amount concerned - DR 164 913 628 - has already been charged by the 
EAGGF departments. 
6. Overruns for the 89/90. 90/91 and 91/92 milk years 
With regard to the overruns for the 89/90, 90/91 and 91/92 milk years, 
according to the provisional figures, it was agreed at bilateral meetings 
between the Greek Ministry of Agriculture and the EAGGF held in Brussels on 
8 October 1992 to suspend measures to charge these overruns by applying 
retroactively the overall guaranteed quantities which are expected to be 
allocated to Greece in the 93/94 milk year, increased by 100 000 tonnes. 
7. Direct sales 
With regard to the level of direct sales in the period since the 
introduction of the quota system, we would remind you of document No 35092 
of 11 June 1992 that we sent to the EAGGF departments, which states that the 
figures on direct sales communicated to the Community's Statistical 
Department are estimates applying only to the regional departments in each 
area and are designed to establish a balance between the production and 
consumption of milk in Greece. They cannot therefore be used as a basis for 
charging additional levies. 
8. Monitoring the quota system in the 1992/93 milk year 
Because of the regular overruns since the 88/89 milk year, the Ministry 
of Agriculture has held a series of discussions at regional level with the 
authorities responsible and has contacted the sectors concerned in order to 
ensure full compliance with our obligations under Community regulations. 
- 4 -
The relevant quotas have already been allocated in turn: 
(a) by the central departments of the Ministry of Agriculture to the 
regional departments in each prefecture; 
(b) by the regional departments of the Ministry of Agriculture to the 
local industries; 
(c) by the local industries to producers. 
It should be emphasized that all Greek producers now know their own 
personal quotas (see enclosed model) after being informed by the local 
industries. 
9. Appointing a body to control the system 
The enclosed draft law proposes a vote in Parliament on the appointment 
of a Milk Board to manage the quota system. 
This draft law should be voted on before the end of the year and should 
come into force at the beginning of the 93/94 milk year. 
10. Future operation of the system beginning with the 1993/94 milk year 
So that Greece can comply in good time with the future proposals of the 
Commission on reform of the CAP and the application of the quota system, the 
Ministry of Agriculture published the enclosed circular No 176124 of 
10 April 1992 setting out new procedures for applying the quota system. 
The procedures for allocating quotas to individual producers are 
expected to be completed by the end of this year. 
11. The departments of the Ministry of Agriculture will be pleased to 
provide any further details or other information. 
Director-General 
G. Konstandin id is 
MINISTERIO DE AGRICULTURE PESCA Y ALIMENTACION 
REPORT FROM THE MINISTRY OF AGRICULTURE, FISHERIES AND FOOD TO THE 
COMMISSION OF THE EUROPEAN COMMUNITIES 
Re: Council agreement of 21.5.92 for adapting the guaranteed overall 
quantity for Spain: Allocation of individual quotas. 
The consolidated text of the commitment to reforming the CAP in the 
milk and dairy products sector (Doc. 6953/92 of 2.6.S2) in Annexe II sets a 
guaranteed overall quantity for Spain, taking effect from 1.4.93 and 
establishes that this decision is subordinate to certain conditions being 
fulfilled, among which is the fact that the Member State will, before 31.12.92, 
provide the Commission with a report testifying that the established provisions 
have been introduced into national legislation so that they can be applied 
within the specified periods (Annexe NQ 1 cf this report). 
National legislative provisions 
(All these provisions have been sent to the Commission.) 
1.- Provisions passed prior to the Council agreement of 21.5.92 (Annexe 
N9 2): 
Although these provisions do not form part of the commitment, they are 
considered to be of interest for understanding the problem of applying the 
quota system in Spain and as forming a background to the provisions passed 
in compliance with the said Council agreement: 
a) Royal Decree 2466/1986 which established the procedure for 
determining the reference quantities provided for in (EEC) Regulations 804/68 
of the Council and 857/84 of the Commission. 
MINISTERIO DE AGRICULTURA, PESCA Y ALIMENTACION 
This Royal Decree has allowed other provisions of lesser rank to be 
passed and, on the basis of the obligatory statements from producers and 
buyers established therein, and in spite of containing important loopholes and 
mistakes, it was possible to make an allocation of provisional individual quotas, 
which meant a major step towards the implementation of a quota system in 
Spain. 
b) Resolution of the National Agrarian Products Service (SENPA) on the 
statements to be made by companies buying milk and/or dairy products 
(12.7.91). 
With the aim of fully complying with Community regulations, the 
authorities of the Ministry of Agriculture, Fisheries and Food (MAPA- Miniterio 
de Agricuitura, Pesca y Aiimentaciôn) considered it necessary to produce a 
more precise report than the one deriving from traditional statistics. The data 
provided by the obligatory statements from buyers indicated that the volume 
of milk marketed in 1990 stood at 6,000,000 mt, which meant a surplus of some 
1,450,000 mt above the overall quota. 
With this information it was decided to prepare a plan of action which 
essentially consisted in reducing the average production by means of a plan 
of voluntary abandonment and in requesting the Community authorities to 
collaborate in order to be able to solve the problem of the effective 
application of the quota system. 
c) Royal Decree 1888/1991 which established a restructuring plan for the 
milk and dairy products sector. 
This constitutes the second basic legislative piece in the development 
of the actions needed for applying the supplementary rate system. It consists 
of a framework provision that considers the points established in (EEC) 
Regulations 857/84 of the Council and 1546/88 of the Commission along with a 
series of measures for improving production structures, especially with 
regard to the quality of the milk. 
d) MAPA Order of 30 December 1991 which formalized a plan of voluntary 
abandonment in milk production. 
This provision, as with all those that have regulated the abandonment 
programmes, only affected producers who had been allocated a provisional 
quota. 
MINISTERIO DE AGRICULTURA, PESCA Y ALIMENTACION 
The period in which producers could resort to abandonment to withdraw 
from activity ended on 1 May 1992 and the quantity of quota bought came to 
600,000 mt, so the surplus had been reduced to 850,000 mt. 
All this information and the situation of the milk producer sector prior 
to Spain's membership, as contained in a Memorandum and complementary 
documentation, was made available to the Commission in full detail and served 
as tha basis the Council agreement of 21.5.92. 
2.- Provisions passed as a consequence of the Council agreement of 
21.5.92 (Annexe N9 3). 
a) Resolution of 3 June 1992 from the SENPA on statements to be made 
by buyers of cow's milk or dairy products deriving from cow's milk. 
Annexe II of the Council agreement establishes in section b) that the 
individual reference quantity is equal to the quantity available at 31.3.92 or 
otherwise to the production in the eighth period adjusted by a reduction 
coefficient so that the sum of the individual reference quotas does not exceed 
the guaranteed overall quantity. 
The aim of this provision was to discover the quantity of milk or dairy 
products bought by the buyers in the eighth period as a necessary element 
for allocating individual quotas. 
b) SENPA resolution of 22 June 1992 by which rules are established for 
inspection and control of compensated abandonments in milk production. 
The aim of this provision is to guarantee that producers resorting to 
abandoning the activity have actually complied with their commitment, and 
concerns both producers and economic agents related to the process (buyers 
of milk and those acquiring the cows or the farm that ceased production). 
The Organization responsible for the control is the SENPA, which 
conducts inspections via its provincial services and, up to the present 
moment, has carried out several inspections (Annexe NQ 4). 
MINISTERIO DE AGRICULTURA, PESCA Y ALIMENTACION 
c) MAPA Order of 26 June 1992 on updating the individual reference 
quantities of producers affected by acts of transference. 
The aim of this provision is to regularize the situation at the eighth 
period of all producers who, due to inheritance or other reasons, transferred 
their quotas prior to 1 April 1992, so that the allocations of the quotas 
provided for in section b) of Annexe II of the commitment can be made to the 
current producers. 
d) SENPA resolution of 20 July 1992 on the statements to be made by 
the producers who directly sell certified milk or pasteurized milk. 
This provision deals with obtaining the necessary information for 
allocating individual quotas in direct sale, which will be done as soon as the 
process of allocating delivery quotas to buyers has been completed. 
e) Royal Decree 1319/1992 of 30 October which establishes specific rules 
for applying the. supplementary rate system in the milk and dairy products 
sector. 
This provision complements Royal Decrees 2466/1986 and 1888/1991 
closing the cycle of basic regulations for the effective application of the quota 
system in Spain. At the same time it faithfully reflects the conditions 
established in Annexe II of the Council agreement of 21.5.92: 
- It establishes that the individual reference quantities will be allocated 
by MAPA through the Directorate General of Farming Productions and Markets, 
which will inform the producers, the competent Organization and the buyers 
of those allocations. 
- The SENPA is appointed as the competent Organization with the 
participation of the Ministry of Economy and Finance and will be responsible 
for inspecting and controlling statements from buyers and producers, as well 
as calculating and collecting the supplementary rates that are owed. 
A specific unit in the SENPA is created with the rank of Subdirectorate 
(Subdirectorate General for Dairy Quotas) for carrying out these undertakings, 
with the participation in these tasks of the State Agency for Tax 
Administration on behalf of the Ministry of Economy and Finance. 
MINISTERIO DE AGRICULTURA, PESCA Y ALIMENTACION 
- The remaining articles contain the other conditions estabished in the 
said Annexe II and all the steps for collecting the supplementary rate 
considered in (EEC) Regulations 857/84 and 1546/88. 
Annexe N9 5 gives a graphic indication of the scheme for the work of 
the Organizations involved and the general functioning of the supplementary 
rate system. 
f) MAPA Order of 4 December 1992 regulating certain aspects relating 
to the allocation of individual reference quantities of deliveries to buyers for 
applying the supplementary rate system in the milk and dairy products sector. 
This provision, which develops Royal Decree 1319/1992, establishes the 
steps for allocating the individual reference quantities and sets the criteria 
to be taken into account: 
- For producers who had an allocated quota for the statement made on 
the year 1985, they will be allocated that quantity without any reduction. 
- For the above producers whose production in the eighth period 
exceeded the allocated quota for 1985, their allocation will be reduced by 10 
percent of the excess. 
- For producers who did not make a statement in 1985, their allocation 
will be reduced by 20 percent of the production marketed in the eighth 
period. 
This Order contains an Annexe with a standard communication form for 
producers regarding the allocation of the individual quota corresponding to 
them, the part that may correspond to them concerning amplification of the 
overall quota provided for in the Council agreement for 1.4.93 being left as 
a variable. 
Communications on individual reference quantities are currently being 
sent out and it is hoped that this will be completed in the present month of 
December. In order to give the process more flexibility, the individual 
communications signed by the Director General ôf Farming Productions and 
Markets are being sent to the provincial Directors of MAPA, who in turn will 
pass them on to each of the producers in his province. 
MINISTERIO DE AGRICULTURA, PESCA Y ALIMENTACION 
We understand that this legislative packet allows the supplementary rate 
system to be applied in Spain with regard to deliveries to buyers and that it 
complies with that specified in the conditions established in Annexe II of the 
Council agreement. 
Nevertheless, the allocation of direct sale quotas is going to be tackled 
immediately and a lesser rank provision will be passed for establishing certain 
details on dealing with the process. 
Information on the current situation regarding the application of the 
legislation passed 
1.- Quantity of milk marketed in the eighth period. 
As has already been said, knowledge of this quantity was necessary 
before allocating the individual quotas. This quantity appears in Annexe nS 6 
after having deducted the quotas corresponding to the abndonments 
established in MAPA Order of 30 December 1991. 
2.- Allocation of individual quotas. 
Taken as the starting point were the quantities of milk and dairy 
products marketed in the eighth period and the application of the criteria 
established in MAPA Order of 4 December 1992, taking into account the 
amplification of thé overall quota provided for in the Council agreement. Thé 
total figures, with the corresponding reductions, also appear in Annexe N2 6, 
being subject to review in line with the result of inspections and controls 
that are being conducted. 
Attached is an example of the individual communication that is being 
sent to producers (Annexe 7). 
MINISTERIO DE AGRICULTURA, PESCA Y ALIMENTACION 
3.- The competent Organization is formally constituted and consists of 
the following staff: 
- Central services: 25 officials. 
- Inspectors throughout Spain not including the collaboration of the 
State Agency for Taxes: 78. 
4.- Inspections and control. 
As has been stated, intensive inspections are being conducted, both on 
abandonments (Annexe 4) and on the statements of buyers in the eighth 
period (Annexe 8). 
5.- Forecasts. 
a) In December, all communications of individuals quotas will have been 
made. 
b) In January, the allocation of direct sale individual quotas is planned. 
c) In January, the provision for the abandonment plan of 200,000 mt, 
provided for in the Council agreement of 21.5.92, will be passed. 
d) All inspections will continue and, prior to 31 March, it will be 
possible to have a fairly precise result on the accuracy of the statements. 
6.- Cooperation with the Services of the Commission. 
The Spanish Government desires this cooperation and is willing to 
facilitate whatever information may be necessary as well as a joint analysis of 
the problems that may arise from the effective implementation of the 
supplementary rate system, due to the characteristics of the dairy sector in 
our country. 
MINISTERIO DE AGRICULTURA, PESCA Y ALIMENTACION 
conclusion 
The points stated in this report confirm that Spain has passed the 
necessary provisions for complying with the conditions established in Annexe 
II of the Council agreement of 21.5.92 and that the said provisions are being 
applied at this moment. 
Maaria, IA uecemoer iyyz 
OFFICE OF THE ITALIAN PERMANENT REPRESENTATIVE 
TO THE EUROPEAN COMMUNITIES 
Ref. 980 Brussels, 1 February 1993 
Commission of the European Communities, 
DG VLB. I., 
130 Rue de la LoI, 
1040 Brussels 
Subject: Report on application of milk quota arrangements 
Please find enclosed letter No C/336 of 30 January 1993 together with the 
abovementioned report whereby the Italian authorities comply with their 
obligations pursuant to the decisions of the Council (agriculture) meeting 
on 14 to 17 December 1992. 
A copy of the abovementioned report has been forwarded directly to the 
Commission by the Ministry of Agriculture and Forestry by fax of 
30 January 1993, a receipt for which is appended. 
Deputy Permanent Representative 
Rocco Antonio Cangelosi 
Translation of letter from the Ministry of Agriculture and Forestry to the 
Commission. 
Subject: Report on application of milk quota arrangements 
In accordance with the decision of the Council meeting on agriculture of 14 
to 17 December 1992, the report on the application in Italy of Community 
regulations on milk quotas is enclosed. 
THE MINISTER 
REPORT ON MILK QUOTAS 
Introduct ion 
The application of the Community arrangements on milk quotas in Italy has 
not gone smoothly, largely owing to the objective complexity of the system. 
Prior to the adoption of Law No 468 of 26 November 1992 laying down urgent 
measures for the dairy sector, the Italian legal framework covering milk 
quotas was based on Decree No 258 of the Ministry of Agriculture of 
7 June 1989. 
In accordance with a possibility opened by the Community regulations, the 
abovementioned Decree provided for the allocation of an overall reference 
quantity to UNALAT (Unione fra le associazioni di produttori di latte bovino 
- association of cow's milk producer organizations) corresponding to the 
quantities to which producer members were entitled. 
Producers not members of UNALAT were granted quotas directly by the Ministry 
of Agriculture, which published a list of successful applicants with the 
relevant reference quantities in the Official Gazette. 
In the case of member producers, UNALAT was required to pay the additional 
levy due. 
In the case of non-member producers, the purchasers withheld the additional 
levy in place of the tax authorities. 
- 2 -
Overall, the system laid down did not operate smoothly, in particular as 
regards member producers, especially since when the arrangements came into 
force, it became apparent that actual national production was substantially 
higher than that indicated by the statistics used to calculate the national 
quota. 
In February 1992, by note to the President of the EC Commission, the Italian 
Prime Minister (Présidente del Consiglio dei Ministri) outlined the 
difficulties encountered in Italy in applying the milk quota arrangements 
and requested an adjustment to the national quota. 
Subsequently, at the summit of heads of State and Government held in Lisbon 
in June 1992, the European Council called on the Ministers of Agriculture 
meeting in the Council to put forward a proposal to solve the problems 
ar ising in Italy. 
At the Council meeting on agriculture in Brussels on 13 and 14 July 1992, 
with a view to finding a speedy solution to the problem of quotas, the 
Italian Minister for Agriculture out Iined the commitments and efforts which 
the Italian administration intended making to reduce milk production to 
within the limits laid down by the Community. 
It was also announced at that time that a law was to be adopted to define a 
new framework of rules on milk quotas with a view to overcoming all the 
obstacles which had hitherto prevented proper appi ication of the 
arrangements. 
A commitment to reduce national production by 1 600 000 tonnes within three 
milk years was also announced. The first stage was to be completed in the 
1992/93 milk year and to involve a reduction of 300 000 tonnes of mi Ik in 
production. 
- 3 -
This would call for the support of the Council and the Commission since the 
efforts and sacrifices required of the Italian dairy industry were 
considerable. 
The provisions announced by the Minister for Agriculture were approved by 
the Italian cabinet at a meeting held on 13 August 1992. 
In September, examination of the provisions commenced in the two houses 
after the summer break. 
In November the provisions were definitively adopted by Parliament and 
published in Offical Gazette No 286 of 4 December 1992 (Law No 468 of 
26 November 1992). 
The content of Law No 468/92 
Law No 468/92, which came into force on 19 December 1992 (a fortnight 
following publication in the Official Gazette in accordance with the general 
rule applying), provides for reference quantities to be allocated to all 
Italian producers who produced milk in the 1988/89 milk year in the case of 
members of producer organizations or in 1983 in the case of non-members. 
Non-member producers are to be granted a quota equal to the reference 
quantity already allocated to those producers in the current milk year by 
the Ministry of Agriculture. 
The list of this group of producers and the relevant reference quantities, 
broken down into deliveries and direct sales, was published in the Annex to 
the Ministerial Decree of 26 May 1992 (Official Gazette No 130 of 
4 June 1992). 
- 4 -
Reference quantities for member producers are divided, in the case of both 
deliveries and direct sales, into A quotas, equal to production in 1988/89, 
and B quotas, equal to the amount by which production in 1991/92 exceeded 
that in 1988/89. 
In order to bring Italian production within the limits laid down by the 
Community regulations, AIMA is to implement a production discontinuation 
programme with a system of compensation, or alternatively reductions are to 
be made in the B quotas without any corresponding compensation being paid. 
The quotas are allocated to individual producers, who are directly 
responsible for any production in excess and are liable to any levy to be 
paid thereon. 
During the initial application phase, the Law provides that AIMA is to 
publish a first list of producers allocated quotas and the relevant 
reference quantities. 
This first list of producers is to cover all producers, both members and 
non-members, broken down by province. 
After the abovementioned list has been published, producer organizations may 
submit applications to AIMA to manage their members' quotas. 
Immediately thereafter, AIMA is to publish a further list of all producers, 
broken down by province, showing individual member producers under the 
organization to which they belong. 
- 5 -
This second list will be updated and published by 31 January each year for 
use in the following milk year. 
The lists are to be forwarded to the regional authorities, which are to make 
them available immediately to operators at their premises in each provincial 
capital. 
In addition to providing various types of services to their members, under 
the milk quota arrangements producer organizations are responsible solely 
for balancing out the surpluses and shortfalls produced by their members at 
the end of the milk year. 
They do not claim to have any power over the quotas of members, who remain 
the sole persons entitled thereto and the sole parties responsible for them. 
The collection of the levy is essentially the responsibility of the 
purchaser. 
Using the abovementioned lists, the latter must verify deliveries from each 
supplier and when the producer exceeds his reference quantity, the purchaser 
must immediately withhold an amount per litre of milk equal to the 
additional levy in force. 
Amounts are withheld by the purchaser from payments to producers, be they 
members or not, and are paid after the end of the milk year. 
When making payments in respect of member producers, the purchaser must take 
account of balancing out effected by producer organizations. 
The Law specifies that the quota belongs to the producer as manager of. an 
agricultural holding. 
- 6 -
In accordance with the possibilities afforded by Community regulations on 
milk quotas, recently approved by the Council meeting on agriculture, Law 
No 468/92 provides that milk quotas may be leased or transferred without 
this implying the simultaneous leasing or transfer of the holding where 
production takes place. 
The Law provides for a series of penalties to which the various parties 
involved in the quota arrangements are subject where they fail to comply 
with its provisions. 
Checks on the system are largely the responsibility of the regions, which 
receive all data necessary to verify the correct application of the 
régulât ions as regards purchasers, producer organizations and producers. 
Checks may also be conducted by AIMA, the Judicial police authorities and 
the Central Fraud Prevention Inspectorate of the Ministry of Agriculture. 
As regards direct sales, the producer himself is required to pay the levy 
due directly, and in the case of member producers, payment is made through 
the organization after balancing out between the shortfalls and surpluses 
produced. 
Lastly, Law No 468/92 provides that supplementary rules for its application 
are to be adopted within four months of its entry into force. 
- 7 -
Application of the Law - Lists of producers 
Article 2(1) of the Law provides that within 30 days of its entry into 
force, i.e. by 18 January 1993, AIMA is to publish lists of producers and 
forward them to the regional authorities, which are to make them available 
to operators at their premises in each provincial capital. 
This first list is to include all producers entitled to a reference 
quantity, by province, showing the relevant quotas. 
No distinction is made between producers who are members of a producer 
organization and non-members. 
The list, which has already been prepared and forwarded to the regions 
within the time limits laid down by the Law, shows: 
1. Non-member producers who produced in 1983 and who took part in the 
survey provided for in the Ministerial Decree of 30 September 1985. Such 
producers were allocated reference quantities shown in the Annex to the 
Ministerial Decree of 26 May 1992, published in the ordinary supplement to 
Official Gazette No 130 of 4 June 1992. The list of non-member producers 
was updated subsequently to take account of changes occurring in the period 
elapsing between the commencement of the 1992/93 milk year and the entry 
into force of Law No 468/92 (19 December 1992); 
2. Producers belonging to producer organizations who produced in the 
1988/89 milk year. These were allocated A quotas equal to production in the 
1988/89 milk year and possibly B quotas equal to the amount by which 
production in 1991/92 exceeded that in 1988/89. 
- 8 -
Given the high number of producers involved, the possibility cannot be ruled 
out that the abovementioned list still contains certain errors or 
inaccuracies due to a failure to record sales of holdings, successions and 
the like. 
A series of checks is being carried out at present to weed out any possible 
mistakes. 
To that end, last December lists of producers were forwarded to the 
organizations concerned for the requisite corrections. 
At present the lists are being returned to the organizations with 
correct ions. 
All producers who have taken part in the programmes for the discontinuation 
of milk production implemented in Italy to date have naturally been deleted 
from the lists even if they were producing in the 1988/89 milk year. 
Applications from organizations to manage their members' reference 
quantities must reach AIMA by 17 February 1993. 
To that end an application form has been prepared for the purpose. It must 
be accompanied by a list of members with the relevant identifying data. 
AIMA will conduct all checks necessary on applications submitted by 
organizat ions. 
A second list of producers taking account of applications for authorization 
of management by organizations is thus scheduled to be published in early 
March. 
- 9 -
The abovementioned list will be printed by AIMA and forwarded to the regions 
for consultation by operators at their premises in each provincial capital. 
This second list will show member producers grouped by organization and will 
also take account of all corrections forwarded to AIMA in the meanwhile. 
The lists will thus be made available to purchasers and producers before the 
beginning of the 1993/94 milk year. 
As mentioned above, the first list is of necessity provisional in nature and 
includes 169 000 producers entitled to a quota covering a total of 
11.95 million tonnes in reference quantities allocated. 
To sum up, the allocation of individual quotas is being undertaken in 
accordance with the time limits and rules laid down by the Law. 
Detailed rules for implementing Law No 468/92 
The Law as it stands is sufficient to start operations required for the 
commencement of the 1993/94 milk year. 
It contains all the provisions necessary to allocate quotas and publish the 
Iists. 
However, for certain procedures which need to be carried out during the milk 
year and for checks thereon, it has been necessary to prepare provisions 
containing implementing rules. 
- 10 -
These implementing rules are intended to cover secondary aspects of the milk 
quota system and accordingly do not prevent the Law from applying 
immediately. 
The Regulation, laying down those rules to be adopted within four months 
from the entry into force of Law No 468/92, has already been drafted and 
consultations are under way on the subject with the bodies assigned 
responsibility for checks and with the main parties subject to the 
procedures laid down with a view to ensuring that the system is fully 
effective and complies as much as possible with the practical requirements 
of those part ies. 
In particular, the draft Regulation regulates in detail the requirements of 
producers, purchasers and organizations, and introduces further provisions 
in addition to those laid down by Law No 468/92, with a view to more 
efficient checks by inspection bodies. 
To that end there is provision for a computerized, standardized system 
enabling checks, including cross-checks, to be conducted on data by means of 
specific data-processing procedures. 
It will accordingly be easy to detect any possible infringements punishable 
by severe penalties under Law No 468/92. 
Further detailed rules on the keeping of accounts have been laid down to 
ensure that purchasers apply the system in all points. 
For that purpose there is provision for a special register, to be endorsed, 
indicating in particular the fat content of milk from each producer. 
In addition, purchasers are required to take two samples each month from 
milk delivered by each producer to calculate its fat content. 
. - 11 -
With a view to calculating any levy due, the purchaser must work out the 
average fat content of milk delivered over the period concerned by each 
producer. 
Special attention has been paid to the wording of the provisions on direct 
sales. 
There is thus provision for careful checking of declarations which producers 
must forward in accordance with Law No 468/92. 
Checks involve verifying records held for tax purposes or commercial 
documents to see whether the figures tally with data contained in the 
abovementioned declarations concerning quantities of milk or milk equivalent 
sold direct I y. 
Checks relating to producers exempt under the provisions in force from the 
obligation on keeping the abovementioned documents are aimed at ascertaining 
whether the number of dairy cattle on the holding tallies with the quantity 
of milk sold as given in the declaration. 
Discontinuation of milk production - 1992 
As mentioned above, at the Council meeting on agriculture in Brussels on 14 
and 15 July 1992, the Italian delegation outlined the measures which the 
Italian authorities intended introducing to bring milk production within the 
limits laid down by the Community. 
At that time it was pointed out that milk production would have to be 
reduced by a total of approximately 1 600 000 tonnes in Italy over three 
milk years as set out below: 
12 -
1992/93 milk year 
1993/94 milk year 
1994/95 mi Ik year 300 000 tonnes 
650 000 tonnes 
650 000 tonnes 
In order to implement the programme to reduce'mi Ik production, Law No 468/92 
provides explicitly for the Ministry of Agriculture and Forestry to issue a 
decree setting out the general criteria to be followed to bring quantities 
allocated to individual Italian producers into line with Italy's reference 
quantities over three years (Article 2(8)). 
The programme will be implemented by AIMA, which may make use of production 
discontinuation programmes involving compensation or may reduce B quotas 
without paying any compensation (Article 2(9)). 
With regard to the projected reduction of 300 000 tonnes during the current 
milk year, it should be pointed out that a production discontinuation 
programme in accordance with Regulation (EEC) No 1637/91 has already been 
completed and compensation paid to a large extent. 
That Regulation, which was adopted to allow the Member States to bring 
within the limits reference quantities, which were reduced by 2% for the 
1991/92 milk year, specified that the production discontinuation programme 
financed by the Community was to be completed by 31 March 1992. 
The operation could cover up to 3% of the national guaranteed quantity, 
which in the case of Italy was around 270 000 tonnes. 
By the Decree of the Minister for Agriculture and Forestry of 
20 October 1991, the Italian authorities adopted measures for the 
application of Regulation (EEC) No 1637/91 so permitting Italian producers 
to benefit under the Community programme. 
- 13 -
Subsequently, Regulation (EEC) No 1637/91 was amended by Regulation (EEC) 
No 1188/92 to permit the Member States to extend the programme for the 
discontinuation of milk production to 30 September 1992. 
At 15 November 1991, the closing date for submission of applications laid 
down by the Ministerial Decree of 29 October 1991, applications from 
producers numbered approximately 11 500, covering a total of approximately 
970 000 tonnes mi Ik. 
Of that number, 6 963 applications were approved from producers who at 
30 September 1992 had abandoned production quotas totalling 285 860 tonnes 
(equal to approximately 320 000 tonnes actual production). 
The objective of reducing production by around 300 000 tonnes in the 1992/93 
milk year was thus clearly attained. 
The expiry dates for the subsequent production discontinuation programmes to 
be implemented in the two forthcoming milk years must coincide with the 
termination of the milk year to permit measures relating to the additional 
levy to be applied more effectively. 
The next milk production discontinuation programme will therefore probably 
expire on 31 March 1994. 
Actual reductions covered by the programme may vary depending on the real 
needs, which will be assessed more accurately after the commencement of the 
milk year, without prejudice to the objective, which consists in reducing 
the overall quantities allocated to producers within the time limit laid 
down by the Council Decision of last December. 



ISSN 0254-1475 
COM (93) 109 final 
DOCUMENTS 
EN 03 
Catalogue number : CB-CO-93-137-EN-C 
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