Proposal for a COUNCIL REGULATION amending Regulation (EC) No 1254/1999 on the common organisation of the market in beef and veal

(presented by the Commission)

EXPLANATORY MEMORANDUM

1. Introduction

On 14 March 2000, at the invitation of the Cologne European Council, the Commission adopted a report on the measures to implement Article 299(2) of the EC Treaty on the outermost regions of the European Union [1]. The report was addressed to the Council and Parliament and was also transmitted to the Committee of the Regions and the Economic and Social Committee. In June, the Feira European Council invited the Commission to present appropriate proposals.

[1] COM(2000)147 final.

The report stated that in 2000 the Commission would present reports on the implementation since 1992 of the agricultural sections of the Posei programmes in those regions, together with proposals to amend the Council Regulations where justified. The three attached draft regulations concern those measures.

2. The agricultural section of the POSEI programmes

The Council adopted programmes of options specific to the remote and insular nature of certain Community regions (POSEI), in 1989 for the French overseas departments, and in 1991 for the Canary Islands and the Azores and Madeira [2].

[2] Poseidom - Decision 89/687/EEC - OJ L 399, 30.12.1989, p. 39. Poseima - Decision 91/315/EEC - OJ L 171, 29.6.1991, p. 10. Poseican - Decision 91/314/EEC - OJ L 171, 29.6.1991, p. 5.

The common agricultural policy applies fully to the agricultural production of the most remote regions through the common organisations of the market and a substantial package of agricultural measures under Council Regulations (EEC) No 3763/91 (POSEIDOM) [3], No 1600/92 (POSEIMA) [4] and No 1601/92 (POSEICAN) [5], the goal of which is to adapt the common policies to take account of the specific conditions of those regions.

[3] Council Regulation (EEC) No 3763/91, OJ L 356, 24.12.1991, p. 1.

[4] Council Regulation (EEC) No 1600/91, OJ L 173, 27.6.1992, p. 1.

[5] Council Regulation (EEC) No 1601/91, OJ L 173, 27.6.1992, p. 13.

The agricultural section of the POSEI programmes addresses the permanent handicaps (difficult terrain, particular climate, distance, small size of holdings) and specific constraints (lack of economies of scale, dependency, very high production costs). It is financed by the EAGGF Guarantee Section (around EUR 200 million/year) and provides, in particular, for two types of measure: specific supply arrangements and specific measures to assist local agricultural production. It also includes derogations from veterinary, plant-health and structural measures, as well as a graphic symbol.

3. The results of the agricultural section of the POSEI programmes

The French, Portuguese and Spanish authorities have sent the Commission reports on the implementation of these programmes as well as some requests for amendments of the Council Regulations.

In the context of SEM 2000, the Commission appointed external consultants to draw up reports evaluating the agricultural section of the POSEIDOM, POSEIMA and POSEICAN programmes. These consultants examined the achievement of the programmes' objectives and proposed some possible improvements.

On this basis, the Commission presented reports on the implementation (between 1992 and 1998) of the measures provided for in these Regulations, taking account of the experience gained and the impact of the measures implemented.

Overall, the measures have had a positive impact.

Examination of the results of the specific supply arrangements shows that administration of the arrangements has improved, and the supply balances have stabilised somewhat in terms of the local requirements. Supplies to these regions are guaranteed, and prices are lowered by promoting competition between sources of supply. This measure has had beneficial effects for the economic development of the regions concerned.

Following the changes introduced by the CAP reform and the Community's undertakings after the latest GATT agreements (Uruguay Round), and in view of the narrowing gap between world and Community prices, unit aid granted for the supply of Community products, mainly based on current export prices, has been reduced for certain products, particularly cereals. This phenomenon has given rise to some concern about achieving the goal of alleviating the additional cost of remoteness and insularity and bringing down production costs. Within the limits of the existing rules, the Commission has taken care to cushion the effects of these changes in the international context.

This analysis shows that one of the shortcomings of the current arrangements is a lack of objective criteria for quantifying the additional costs to be offset. The measure has reduced the effects of the additional cost of supply to differing degrees depending on the products and economic circumstances concerned.

Examination of the measures to support local production shows that they have alleviated some of the production cost constraints. As a supplement to support from the CAP, they have helped improve local production in terms of both quality and quantity. Their effectiveness depends on the structure of each sector and its ability to capitalise on the possibilities offered. Aid has been most effective where it has been adapted to real local conditions and consistent with the supply arrangements, and where the creation of implementing conditions suited to the context has made possible some synergy with general aid granted under the CAP. Measures which were too unwieldy and complex (like the initiative programmes for fruit and vegetables) have failed.

4. Guidelines for review

The Commission is intending to consolidate and adapt the achievements so far, and to improve the existing agricultural arrangements for these regions, while staying within the limits of the financial perspective. To achieve this, the Commission is aiming for budget neutrality.

The Commission plans to simplify the management of these arrangements and improve their transparency and cost effectiveness. It also intends to strengthen the monitoring and control of all the measures.

The logic of the specific supply arrangements is to provide the regions concerned with supply arrangements which will enable them to align their production costs on those in the rest of the Union, thereby benefiting from the advantages of the single market to which they belong despite the particular geographical and economic conditions which set them apart. That logic still applies.

The proposals review the list of products covered by the supply arrangements. Specifically, in order to ensure the survival of traditional livestock farming, it is proposed in some cases to introduce additional inputs for animal nutrition (alfalfa and oil-cake).

In order to lighten the administrative burden of the arrangements, it is proposed to empower the Commission to review the product list, and to simplify administration of the supply balance.

It is proposed to adjust the means used to achieve the goal of the arrangements to reduce the additional costs of supplying these regions and bring down prices by promoting competition among sources of supply. This is to be achieved by adding the principle that aid should take account of the cost of transport to the most remote regions from the rest of the Union. This would introduce some stability and clarity to the objective of enabling these regions to enjoy the benefits of the single market.

Turning to the agricultural production measures, the adjustments to be made arise from the analysis of the local needs of each of the regions concerned. The Commission has sought to ensure that these measures more closely reflect a partnership approach to integrated development.

The agricultural production measures which experience has shown to be poorly suited to the local reality (as in the case of the livestock and milk sectors in the Canary Islands and Madeira where self-sufficiency is low), have been adapted to make them more attractive and effective. In particular, the eligibility criteria have been adjusted.

Changes have been made to existing measures, such as the adjustment of the level of some aids and quantities eligible for assistance (e.g. the quantity of milk produced in the overseas departments eligible for production aid).

In the interests of uniformity and in order to align the arrangements under POSEIMA and POSEICAN in the beef and veal sector with those in force for the French overseas departments, the annexes to Regulation (EC) No 1254/1999 on the common organisation of the market in beef and veal should be amended.

New measures are introduced to take account of specific local conditions and requirements without departing from the objectives of the POSEI programmes, particularly in the fruit and vegetable sector in the Canary Islands, the Azores and Madeira. Lessons have been learned in this sector from the successful experiment of local marketing aid.

Across-the-board approaches by sector or comprehensive programmes (inter-branch) are introduced to improve the structure of the different sectors.

To find a solution to the problem of quota overruns in the Azores, the Commission will shortly be presenting a proposal for a plan to buy back quotas.

5. Conclusion

The proposed amendments aim at taking better account of the specific local conditions in these regions, as provided for in Article 299(2) of the Treaty. They concern the three Council regulations and are proposed on the basis of the new Article 299(2) of the Treaty.

They are unlikely to disrupt the single market or the application of the common policies.

The budget impact of these changes is chiefly covered by savings arising from the introduction of the Agenda 2000 CAP reform, in particular the likely consequences for the supply arrangements (cereals, beef and veal, milk products).

These proposals for regulations introducing specific measures for certain agricultural products in the French overseas departments, the Canary Islands, the Azores and Madeira are a recasting of the arrangements currently in force. As in the past, all derogations are to be grouped together in a single regulation for each region. The proposed regulations therefore also contain a Title IV dealing with the structural derogations.

That title contains a provision with wording which is identical to that used in the proposal submitted to the Council for a regulation amending Regulations (EEC) Nos 3763/91, 1600/92 and 1601/92. Adoption of the structural derogations is a matter of some urgency because of the deadlines for effective implementation of the programming of structural measures. It is therefore essential to propose that the Council adopt these derogations in a preliminary regulation amending the current arrangements, and to include these amendments subsequently in the recasting of the regulations introducing specific measures for certain agricultural products in the French overseas departments, the Canary Islands, the Azores and Madeira.

2000/0317 (CNS)

Proposal for a COUNCIL REGULATION amending Regulation (EC) No 1254/1999 on the common organisation of the market in beef and veal

THE COUNCIL OF THE EUROPEAN UNION,

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

Having regard to the proposal from the Commission [6],

[6] OJ C , , p. .

Having regard to the opinion of the European Parliament [7],

[7] OJ C , , p. .

Whereas:

(1) In order to enable traditional cattle-rearing activities to be maintained, Council Regulations (EC) Nos... [8] (POSEIDOM),... [9] (POSEIMA) and... [10] (POSEICAN) introducing specific measures for certain agricultural products for the French overseas departments, the Azores and Madeira, and the Canary Islands respectively provide for the introduction of specific limits on the number of animals eligible for special premiums, suckler-cow premiums and slaughter premiums.

[8] OJ L

[9] OJ L

[10] OJ L

(2) Annex I to Council Regulation (EC) No 1254/1999 [11] lays down regional ceilings per Member State as regards the special premiums. Annex II to that Regulation lays down national ceilings as regards the suckler-cow premiums. Those ceilings must not affect the introduction of the specific limits mentioned above. As a consequence it should be stipulated as of now that in the case of France, Portugal and Spain those ceilings are to include subceilings that are based on the number of premiums paid in respect of a reference year to producers in the French overseas departments, the Azores and Madeira and the Canary Islands and are intended exclusively for producers in those regions. The remaining eligible animals making up the specific limits for the special premiums and the suckler-cow premiums introduced by Regulations (EC) Nos ...., .... and .... are to be added to those in Annexes I and II to Regulation (EC) No 1254/1999.

[11] OJ L 160, 26.6.1999, p. 21.

HAS ADOPTED THIS REGULATION:

Article 1

Regulation (EC) No 1254/1999 is hereby amended as follows:

1. Annex I is replaced by the text in Annex I hereto.

2. Annex II is replaced by the text in Annex II hereto.

Article 2

This Regulation shall enter into force on the 20th day following its publication in the Official Journal of the European Communities.

It shall apply from

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

Done at Brussels,

For the Council

The President

ANNEX I

SPECIAL PREMIUM

Regional ceilings of the Member States referred to in Article 4(4)

Belgium

Denmark

Germany

Greece

Spain

France

Ireland

Italy

Luxembourg

Netherlands

Austria

Portugal

Finland

Sweden

United Kingdom // 235 149

277 110

1 782 700

143 134

713 999 [12]

[12] Without prejudice to the specific rules laid down in Council Regulation (EC) of .... introducing specific measures for certain agricultural products for the Canary Islands (see p. ... of this Official Journal).

1 754 732 [13]

[13] Without prejudice to the specific rules laid down in Council Regulation (EC) of .... introducing specific measures for certain agricultural products for the French overseas departments (see p. ... of this Official Journal).

1 077 458

598 746

18 962

157 932

423 400

175 075 [14]

[14] Without prejudice to the specific rules laid down in Council Regulation (EC) of ... introducing specific measures for certain agricultural products for the Azores and Madeira (see p. ... of this Official Journal).

250 000

250 000

1 419 811 [15]

[15] This ceiling is increased temporarily by 100 000 head to 1 519 811 head until such time as live animals under six months of age can be exported.

ANNEX II

SUCKLER COW PREMIUM

National ceilings referred to in Article 7(2) applicable from 1 January 2000

Belgium

Denmark

Germany

Greece

Spain [16]

[16] Excluding the specific ceiling provided for in Article .. (..) of Regulation (POSEICAN).

France [17]

[17] Excluding the specific ceiling provided for in Article .. (..) of Regulation (POSEIDOM).

Ireland

Italy

Luxembourg

Netherlands

Austria

Portugal [18]

[18] Excluding the specific ceiling provided for in Article .. (..) of Regulation (POSEIMA). Excluding the specific reserve provided for in Article 2 of Regulation (EC) No 1017/94.

Finland

Sweden

United Kingdom // 394 253

112 932

639 535

138 005

1 441 539

3 779 866

1 102 620

621 611

18 537

63 236

325 000

277 539

55 000

155 000

1 699 511

>TABLE POSITION>