COMMISSION OF THE EUROPEAN COMMUNITIES 
C0MC91) 438 final 
Brussels, 14November 1991 
REPORT TQ THE ÇQUNC11 CONCERNINfi AIQ FOR 
THE FORMATION OF PRODUCER GROUPS AND ASSOCIATIONS THEREOF 
Proposal for a 
COUNCU REQUIATIQN (ggç) 
amending Regulation (EEC) No 1360/78 
on producer groups and associations thereof 
(presented by the Commission) 
llifj;'^"'"^^.'.'^.''' '•'•••'%^ 
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REPORT TO THE COUNCIL CONCERUtNft AIP FOR 
THE FORMATION OF PROPUCER 6RPMPS AMP ASSOCIATION THEREOF 
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REPORT TO THE COUNCIL CONCERNING AID FOR 
THE FORMATION OF PRODUCER GROUPS AND ASSOCIATIONS THEREOF 
INDEX 
P^ge 
INTRODUCTION I 4 
I. BASIC RULES 
1.1 Introduction j 5 
1.2 Scope 5 
1.3 Amount of aid 5 
1.4 Community contribution 6 
1.5 Detailed provisions 6 
1.6 Duration 7 
II. RESULTS OF IMPLEMENTATION 
M.1 Recogn i zed groups 8 
11.2 Refunds 8 
III. PROPOSALS 
111.1 Extension 9 
111.2 Scope 9 
111.3 Changes 10 
IV. CONCLUSIONS 11 
ANNEXES 
Annex I Community contribution (p. 13) 
Annex II Results of implementation (p. 14) 
Annex III Foundation aid for producer groups and associations thereof (p. 15) 
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REPORT TO THE COUNCIl CONCERN IN6 A»P FOR 
THE FORMATION OF PROPUCE* GRPVPS ANP ASSOQIATIONJI IHERIOF 
INTRODUCTION 
1. Through Council Regulation (EEC) No 1360/78, the Council adopted a common 
measure to deal with the structural deficiencies in the supply and marketing 
of certain agricultural products in certain Community regions. 
2. The arrangements adopted consist of aid to encourage farmers to join together 
to influence the economic process through groups or associations which would 
concentrate supply and adapt production to market requirements. 
3. Aid covers the costs of formation and administrative operation of groups and 
associations and is paid for the first five years in annual instalments for a 
maximum of seven years following recognition. 
4. This document fulfils the Commission's obligation under Article 13(2) of 
Regulation (EEC) No 1360/78 to report on implementation of the common measure 
before It expires on 31 December 1991. 
5. It covers: 
(a) the content of the basic rules; 
(b) the practical results of application of the common measure; 
(c) the proposal to extend the period of time allowed for the common measure; 
(d) the amendments proposed to the scheme of aids for the formation of 
producer groups and associations thereof. 
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I. BASIC RULES 
1.1 Introduction 
6. Regulation (EEC) No 1380/78 of 19 June 1978 on producer groups and 
associations thereof, as last amended by Regulation (EEC) No 3808/89 
of 12 December 1989, introduced a common measure to encourage producer 
groups in regions and sectors where the supply of agricultural 
products suffers from very severe structural deficiencies 
characterized by a very large number of holdings which are small in 
size and insufficiently organized. 
7. Commission Regulation (EEC) No 2083/80 of 31 July 1980, as 
consolidated by Regulation (EEC) No 220/91 of 30 January 1991, lays 
down detailed rules of application concerning the economic activity of 
producer groups, minimum turnover, volume of production and number of 
members and territorial extent. 
1.2 Scope 
8. Originally, the arrangements applied to: 
- the whole of Belgium as regards the cereals, live bovine animals, 
piglets and lucerne sectors; 
- the whole of Italy as regards all products of the soil and livestock 
products listed in Annex II to the Treaty (except for products 
referred to in Article 1(2) of Regulation (EEC) No 1035/72 on the 
common organization of the market in the fruit and vegetables, hops 
and silkworms sector) and certain processed agricultural products; 
- seven regions of France as regards the table w|ne, plants used in 
perfumery, table olives, tropical fruits, beef and veal and olive 
oiI sectors. 
9. On their accession to the Community, the Regulation was extended to 
Greece, Spain and Portugal as regards the products to which it applied 
in Italy. 
10. At the request of the Irish and French authorities, Regulation (EEC) 
No 3875/88 of 12 December 1988 extended the scope of the aid scheme to 
the whole of Ireland for cereals, potatoes, bovine animals and sheep 
and goats and to the whole of the wine sector in certain regions of 
France already covered for table wines. 
3 Amount of aid 
11. For producer groups recognized before 1 July 1985, aid for the first, 
second and third year is limited to 3%, 2% and 1% respectively of the 
value of the products marketed, subject to a ceiling of the actual 
formation and operating expenses. 
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12. The amount of aid granted to producer groups recognized after 1 July 
1985 for the first five years following the date of recognition: 
- is limited for the first, second, third, fourth and fifth year to 
5%, 5%, 4%, 3% and 2% respectively of the value of the products 
marketed; 
- may not exceed actual formation and operating expenses; 
- is payable in annual instalments for up to seven years following the 
date of recognition. 
13. The amount of aid granted to associations: 
- is limited for the first, second and third year to 60X, 40% and 20% 
respectively of the actual formation and operating expenses; 
- may not, however, exceed a total of 50 000 units of account. 
14. Implementation of the Regulation and the granting of formation aid are 
obligatory for the Member States in the regions and sectors listed at 
1.2. 
I.4 Community contribution 
15. In general, the Guidance Section of the EAGGF refunds 25% of the 
chargeable expenditure to the Member States. 
In regions eligible under Objective 1 as defined by Regulation (EEC) 
No 2052/88 of 24 June 1988, refunds may, pursuant to Regulation 
No 223/90 of 26 January 1990, be at the rate of 65% (see Annex I) (EEC) 
1.5 pétrie provisions 
16. The implementing provisions concerning the minimum number of members, 
cultivated area, turnover and volume of production were laid down in 
Regulation (EEC) No 2083/80 of 31 July 1980, consolidated by 
Regulation (EEC) No 220/91 of 30 January 1991. 
In the case of products other than those listed in the Annex to 
Regulation (EEC) No 220/91, producer groups must have: 
- a turnover of at least ECU 1 million (ECU 500 000 In Greece); 
- at least 50 members. 
17. In general, associations must have a volume of production or a 
turnover which amounts to: 
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- at least three times the minimum size for producer groups in the 
region where their head office is situated; 
- not less than 5% of national production. 
In the case of the products listed in the Annex to Regulation (EEC) No 
220/91, associations must meet the criteria laid down there. 
In each Member State associations must also have the geographical 
scope laid down in Article 3 of that Regulation. 
6 Puratlon 
18. In accordance with Article 13(1) of Regulation (EEC) No 1360/78; the 
common measure will expire on 31 December 1991. 
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I». RESULTS OF IMPLEMENTATION 
11.1 RtfgBnUtfl growt 
19. On 31 December 1990 the Member states had recognized 560 groups (see 
Annex it). 
20. Belgium and Portugal are the two countries whore there are still no 
recognized producer groups, in the case of Belgium, changes to the 
thresholds requested by the Belgian authorities were mad» through 
Regulation (EEC) No 3087/88 amending the Regulation Implementing the 
scheme. However, the various sectors of agriculture concerned have 
still expressed no interest in taking advantage of this common 
measure. 
In the case of Portugal, the lack of recognized producer groups is 
explained by the date of the implementing regulation (Regulation (EEC) 
No 277/88 of 7 September 1988). The Portugueaa author it las intend to 
recognize 50 producer groups between 1992 and 1996. 
in Ireland the implementing regulation dates from 1988 and the first 
two groups were recognized in 1990. There will be 82 new groups 
between 1992 and 1996. 
in Greece the number of recognized operational groups is 29 and there 
will be 73 new groups between 1992 and 1996. 
The French authorities have sent the Commission a list of 99 
recognized groups. 
Since the scheme became applicable in Spain in 1988, 30 groups have 
been recognized and it is expected that 142 will be recognized between 
1992 and 1996. 
Following a slow start in Italy, the new responsibilities for 
recognition conferred on the regions mean that the number of groupa, 
at 406, is now the highest in the Community. Producer groupa now 
cover 1.3 million producers, or 45% of all holdings. 
11.2 Rafunto 
21. Formation aid totalling ECU 9.4 million has been granted to 108 
producer groups and by 31 December 1990 the EAGGF had refunded ECU 2.4 
mi 11 ion (see Annex III). 
These amounts are low compared with the number of recognized producer 
groups, mainly because of the slowness of the Member States' 
administrations in drawing up implementing rules and requesting 
refunds. For example, in Italy the regional circulars date from 1984. 
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III. PROPOSALS 
HI.1 EEttmion 
22. Those concerned by this Regulation have not yet had time to benefit 
from the most recent extensions of the scope of the common measure, to 
Spain and Portugal when they joined the Community (applicable from 
1988) and In Ireland and France In 1990. Nevertheless, these 
countries continue to suffer from structural problems arising from 
inadequate concentration of supply and marketing. The proportion of 
agricultural products sold through organizations continues to be very 
low. 
Extension of the scheme would mean that, as has happened hitherto, 
this structural instrument could be used in the future In regions 
where structural deficiencies regarding the supply and marketing of 
agricultural products have been detected. Similarly, the proposal for 
a Regulation concerning the Poseidom programme (C0M(91) 160), approved 
by the Commission on 13 May 1991 includes extension of the scope of 
the common measure in France to three new sectors in the overseas 
departments. 
The increase in the rate of Community refund in regions eligible under 
Objective 1 arising from the reform of the structural Funds should 
make the common measure more attractive. In certain regions, the rate 
increased from 25% to 65% with effect from 1 January 1990 and so the 
duration of the common measure should be extended to enable the Member 
States to take advantage of these new conditions. 
For these reasons the Commission considers that the common measure 
should be continued so that farmers can organize themselves both to 
centralize the supply of products whose quality depends principally on 
market demand and to achieve greater discipline in the production and 
marketing of agricultural products. Since this is a common measure 
within the meaning of Article 2(1) of Regulation (EEC) No 4256/88, its 
duration does not have to be limited, as was the case before 
reform of the structural Funds. the 
II.2 Scope 
23. Belgium has not yet taken advantage of the common measure, despite the 
changes made in the thresholds for implementation of the scheme there. 
The Belgian authorities have also reported that those concerned are 
uninterested in the very idea of producer groups and that, in the 
present circumstances, this is unlikely to change in the future. 
Accordingly, the Commission believes it unnecessary to extend 
common measure in Belgium for a further period. the 
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HI.3 CJUDflfifi. 
24. Experience of the changes made to the scheme by Regulation (EEC) No 
1760/87 as regards Introduction of new methods of marketing the 
production of members of producer groups has led the Commission to the 
view that there should be rules governing the notification by members 
to the producer groups of information on harvests and the availabiIity 
of products for which they are members. 
25. A technical correction was put in place to convert the maximum global 
amount of 50.000 units of account into 60.000 ecus for aid agreed to 
unions. 
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IV. CONCLUSIONS 
26. The main objective of aid for the formation of producer groups and 
associations thereof is to overcome structural deficiencies in the 
supply and marketing of agricultural products in certain regions of 
the Community and in certain sectors. 
The main features of these regions are the small numbers of 
agricultural holdings which belong to producer organizations 
established to market products and the low percentage of the total 
value of the country's agricultural production marketed by such 
organizations. 
During the period of operation of the scheme, similar needs elsewhere 
in the Community have been noted and so the scheme has been extended 
to deal with this situation by bringing farmers together in groupe. 
However, in Belgium the scheme has not been applied since Its 
introduction, despite revision in 1989 of the criteria to be applied. 
Although the measure began slowly, there were 560 recognized groups on 
31 December 1990 and new applications for recognition are expected, 
mainly from Spain, Ireland and Portugal, where the measure has applied 
only since 1988. 
The reform of the structural Funds resulted in more attractive refund 
conditions and the new rates apply from 1 January 1990. 
The new conditions for the marketing of members' products introduced 
by Regulation (EEC) No 1760/87 mean that the groups need better 
information about harvesting and availability. 
Furthermore, the thresholds concerning associations in the 
implementing regulations for the scheme mean that the overall ceiling 
on formation aid should be revised. 
Accordingly, it is proposed: 
- to extend the duration of the scheme, except in the case of Belgium; 
- to include in the general conditions imposed on producers 
notification by members to the producer group of information on 
harvesting and the availability of the products in respect of which 
they are members; 
- ta ~ 
Before 1 January 1991, the Commission will look again at operation of the 
aches* and will report to the Council, on the baa la of information 
provided by the Member States, on the results of implementation of this 
^IF'emee^mmiPf s *^ms^vji^s/vs)v ^p 9 
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ANNEX I 
community contribution 
The normal part-financing rate ia 25%. in ragiona eligible under Objective 
1 aa defined by Article 1 of Regulation (EEC) No 2062/68, this baeomea: 
I —• "i 1 1 
Member States Rate (%) 
Greece, Ireland, Portugal 65 
France: - Overaeaa departments 60 
- Corsica 50 
Spa i n 50 
Italy 50 
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ANNEX II 
HwiWH IHEI i "T. i JMftjJeiSiOMda»Uj*u-
(Regulation (EEC) No 1960/76) 
wejepwr sxa*>ee Data of 
Implementation First yoar of 
recognition Groupa recognized 
iy 
31.12.1988 1989 1990 TOTAL 
Belgium 
Greece 
Spain 
Franco 
Ireland 
Italy 
Portugal* 1960 
1961 
1966 
1960/1988 
1988 
1980 
1966 1963 
1966 
i 
1990 
1962 21 
1 
95 
360 96 1 
21 
2 
2 
21 23 
80 
99 
2 
406 
TOTAL 467 4* 47 
* Forecast for 1992 to 1996: 50 
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ANNfcA III 
Foundation aid for producer groupa and aigosi«tl9ni Sharaof (aa at 31 Deeember 1990) 
(ECU) 
Member States 
Greece 
Italy 
TOTAL Number of 
groupe 
8 
100 
108 Expenditure by 
Member States 
248 744 
9 114 124 
9 362 868 EAGGF 
refunds 
62 186 
2 353 531 
2 415 717 
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Propoaai for a 
amending Regulation (EEC) No 1360/78 
on producer groupa and aaaociationa thereof 
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EXPLANATORY frWtMQBAfflUM. 
Council Regulation (EEC) No 1360/78 of 19 June 1978 on producer groups and 
associations thereof, as last amended by Regulation (EEC) No 3808/89 of 12 
December 1989, introduced a common measure to encourage the formation of groups 
of agricultural producers. 
It applies to regions and sectors where the supply of agricultural products 
suffers from very severe structural deficiencies characterized by a very large 
number of holdings which are small in size and insufficiently organized. 
Originally, these deficiencies were found to exist in Belgium, France and Italy. 
The Regulation was extended to Greece, Spain and Portugal when these countries 
Joined and since 1988 it has also covered Ireland. 
As a result of the reform of the structural Funds, the rates of refund in 
Objective 1 regions were increased to make the scheme more attractive. 
The number of groups recognized in the beneficiary countries, other than 
Belgium, is 560. 
The Commission considers that the scheme should continue everywhere apart from 
Belgium, where it has aroused no interest. This will enable the Member States, 
particularly those where the scheme has been introduced recently, to benefit 
fully from the common measure and the new arrangements for refunds. 
Some changes are proposed to improve the rules concerning information on 
production. 
In view of the earlier amendments to the Regulation and those now proposed, a 
consolidated version of Regulation (EEC) No 1360/78 is currently being prepared. 
The estimated total cost to the EAGGF Guidance Section is ECU 15,9 million. 
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Proposal for a 
COUNCIL REQUIATION (f6C) 
amending Regulation (EEC) No 1360/78 
on producer groupa and aaaociationa thereof 
THE COUNCIL OF THE EUROPEAN COMMUNITIES, 
Having regard to the Treaty establishing the European Economic Community, and in 
particular Art idea 42 and 43 thereof, 
Having regard to the propoaai from the Commission, 
Having regard to the opinion of the European Parliament1, 
Having regard to the opinion of the Economic and Social Committee2, 
Whereaa Council Regulation (EEC) No 1360/783, as last amended by Regulation 
(EEC) No 3808/894, introduced a common measure to encourage, in certain regiona 
of the Community where the aupply of agricultural producta reflecta very aevere 
atrucural deficiencies, the grouping of producers to concentrate the aupply of 
agricultural products and adapt production to market requirements; 
Whereaa Belgium has not so far availed itself of this Regulation, despite the 
Changea to the minimum requirements for that country laid down ir\ the 
implementing regulation. Commission Regulation No 220/915; whereaa that Member 
State should therefore no longer fall within the ecope of Regulation (EEC) 
No 1360/78; 
Whereaa aince the common meaaure waa adopted the scheme has been extendad to 
other regions and sectors with similar needs, most recently by Council 
Regulation No 3875/88® to the whole of Ireland and to certain producta in 
France, and producers in those regiona should continue to have the opportunity 
to benefit from Community aid; 
1 
2 
3 0J No L 166, 23.6.1978, p. 1. 
4 OJ No L 371, 20.12.1989, p. 8. 
5 OJ NO L 26, 31.1.1991, p. 15. 
6 OJ NO L 346, 15.12.1988, p. 16. 
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Whereas under the reform of the structural Funds, in order to make the 
Regulation more effective in the future, Commission Regulation (EEC) 
No 223/907, as amended by Regulation (EEC) No 1941/908, introduced more 
attractive rates of Community aid for producer groups in regions eligible under 
Objective 1 as defined in Article 1 of Council Regulation (EEC) No 2052/889; 
Whereas Council Regulation (EEC) No 1760/8710, as amended by Regulation (EEC) 
No 1094/8811, introduced a number of provisions concerning the obligation on 
members to market the whole of their production; whereas the monitoring powers 
conferred on producer groups as regards harvesting and the availability of 
producta should be strengthened; 
Whereas this is a common measure within the meaning of Article 2(1) of Council 
Regulation (EEC) No 4256/8812 and consequently its duration need not be 
limited, as was the case before the reform of the etructural Funds when its 
legal basis was Article 6(1) of Council Regulation (EEC) No 729/7013, as 
amended by Regulation (EEC) No 2048/8814; 
Whereas to assess the implementation of this Regulation, particularly in view of 
Its recent extension to certain parts of the Community, a report should be 
submitted to the Council by 1 January 1997, 
HAS ADOPTED THIS REGULATION: 
Arttçia 1 
Regulation (EEC) No 1360/78 is hereby amended as follows: 
1. The third indent of Article 2 is deleted; 
7 OJ No L 22, 27.1.1990, p. 62. 
8 OJ No L 174, 7.7.1990, p. 34. 
9 OJ No L 185. 15.7.1988, p. 9. 
10 OJ No L 167, 26.6.1987, p. 1. 
11 OJ No L 106, 27.4.1988, p. 28. 
12 0J No L 374, 31.12.1988, p. 25. 
13 0J No L 94, 28.4.1970, p. 13. 
14 0J No L 185, 15.7.1988, p. 1. 
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2. The third paragraph of Article 3 is deleted; 
3. The following Indent ia added to Article 6(1 Mb): 
N- rulea on production information, with particular rogard to harvaatlng 
and availability."; 
4. Article 10(3)(b) ia replaced by the following: 
"(b) may not, however, exceed a total of ECU 60 000." 
5. Article 13(1) is replaced by the following: 
N1. Before 1 January 1997 the Commission shall submit to the Council, 
on the baaia of information supplied by the Member States, a report 
on the reaulta of the implementation of thia common meaaure.*1 
Article 2 
This Regulation shall enter into force on 1 January 1992. 
This Regulation shall be binding In ite entirety and directly applicable in all 
Member States. 
Done at Brussels, For the Councl 
The President 
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FINANCIAL STATEMENT 
concerning 
the proposal for a Council Regulation (EEC) amending Regulation (EEC) No 1360/78 
on producer groups and associations thereof. 
1. PMflgft holding : (1991 nomenclature) 
82*1010 : Improvement of agricultural structures - Objective 1 
B2-1012 : Objective 5(a) 
2. LOGE I Dial* : Art Idee 42 and 43 of the Treaty 
3. ClatalfiMtlop : Non-compulsory expenditure 
*• Alat and tioacrlptton of tha noaauro : 
The main aim of the proposal is to remove the restriction limiting 
application of the Regulation to 31 December 1991 thereby extending it to 
future years and enabling the Member Statee to benefit fully from this 
measure, which is Intended to concentrate the supply of agricultural 
products and improve adaptation of production to market requirements. 
5. Hathod or calculation : 
5.1 Type of expenditure : Partial refund of eligible national expenditure. 
5.2 Community contribution : Normally 25%; up to 65% for regions currently 
eligible under Objective 1. 
5.3 Calculation : Estimated expenditure is based on Member States' forecasts 
of development of the current scheme between 1992 and 1996, particularly 
the number of new producer groups which will be recognized. 
5. Financial impact on war at loo, appropriations 
6.1 Schedule of commitment and payment appropriations (ECU mili ion) 
Yaar Commitment ana; payment in opJactlva 1 ragiona 
appropriations 
1992 
1993 
1994 2.8(a) 2.0 
1995 3.7 2.8 
1996 4.3 3.4 
1997 5.1 4.1 

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