ARCHIVES HISTORIQUES
DELACOMMISSION
COLLECTION RELIEEDES
DOCUMENTS "COM"
COM(81)189
Vol.1981/0073

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COMMISSION OFTHEEUROPEAN COMMUNITIES
COM(81)189 final
Brussels,23April1981
Proposalfora
COUNCILREGULATION (EEC)
layingdownthegeneralrulesforthesystemofaidforcottonandthe
minimumpriceforthe1981/82marketingyear
>.*n r\/N
•\.\
r>c.
(submittedtotheCouncilbytheCommission )
C0M(81)189final

Ccrvn
EXPLANATORY MEMORANDUM -
1-Protocol 4totheAct_ofAccessionofGreecesetupasystemofaidforCommunity
cottonandLaiddownthebasicprinciples ofthesystem*
PursuanttothatProtocoltheCouncilhastoadopt:
therulesofprocedure andofsoundmanagementforitsapplication ;
thegeneralrulesofthesystemofaidtoproduction and.thecriteriafor'
"determining theworldmarketprice;
thegeneralrulesconcerning theCommunityfinancingoftheexpenditure involved-"
TheRegulation nowproposedcomprisestheaboveprovisions *
2*Asregardsthe"rulesofprocedureandofsoundmanagement",theCommission considers >
inviewofthespecifically agricultural natureofcottonproduction,thatthepro-..
ceduregenerally usedinagricultural sectorsshouldbefollowed,namelytheManage­
mentCommitteeprocedure*' , .-~
Inviewofthenatureoftheproductconcerned (textilefibre),itseemeddesirable
touseanexistingManagement Committee (theManagement CommitteeforFlaxandHemp)
ratherthantosetupanewone* ' .
3*AccordingtotheProtocolthesystemforcottonistoincludeaidwhoseamountwill
bebasedonthedifference betweentheguidepriceforcottonthathasnotbeen
ginned,andtheworldmarketprice*However,thereisnoworldmarketpricefor
unginnedcotton,therebeingnointernational tradeinthatproduct*Thereforeit,
isproposedthattheworldpriceforunginnedcottonshouldbedetermined bytaking
thepriceofginnedcottonanddeductingthecostofginning*,
4*TheProtocolprovidesthattheaidshallbegrantedviacottonginningundertakings *
Toenablefarmerstobenefitfromtheaidsystem,itisproposedthatthegranting
of-theaidshoidbemadesubjecttoproductionofproofthatproducershaveobtained
atleastapriceclosetotheguideprice(minimumprice)*
Thisproposalalsocoversthefixingoftheminimumpriceforthefirstmarketing .
year*Ithasbeencalculated byreferencetotheguidepriceproposedbytheCommis­
sionforthesamemarketingyear*

\-2-
5-Theproposal takesaccountofthefactthat,inaccordance withparagraph 3
oftheProtocol,theaidismultiplied byacoefficient ifthequantity actually
produced exceedsthequantity fixedinadvance-Itistherefore provided that,
beforethequantity actually produced isdetermined ,advance payments maybemade
tothebeneficiaries oftheaidtoreducethedisadvantages arising fromlate
paymentoftheaid-
6-Theproposal alsoincludes thenecessary provisions on:
~thedateofthebeginning andtheendofthe.marketing year,,
-theconditions whichtherecipients oftheaidmustsatisfy,
-thecontrol systemtobesetupbytheproducer MemberStates,
-thegranting andpaymentoftheaid­

'Proposal
for .
COUNCILREGULATION (EEC)
Layingdownthegeneralrulesforthesystemofaidforcottonandtheminimum
priceforthe1981/82marketing year
THECOUNCILOFTHEBJROPEANCOMMUNITIES ,
HavingregardtotheTreatyestablishing theEuropeanEconomicCommunity/ 1
HavingregardtotheActofAccessionof^Greece,andinparticular paragraph 9
ofProtocol4oncotton,hereinafter referredtoasthe"Protocol",
HavingregardtotheproposalfromtheCommission, -
Whereas,pursuanttoparagraph 9oftheProtocol,itisnecessarytolaydownthe
rulesofprocedure andofsoundmanagementforitsapplication,thegeneralrules
of.thesystemofproductionaid,thecriteriafordetermining theworldmarket .>/
priceandthe_rulesonthefinancingofthe.measuresenvisaged;^ «
Whereas,inordertofacilitate implementation oftheproductionaidsystemand-
itssoundmanagement,aprocedureshouldbeprovidedforestablishing closeco-'
operation betweentheMemberStatesandtheCommissionwithinaManagement Committee;
whereasitisappropriate thattheManagement CommitteeforFlaxandHempprovidedfor
(1)inCouncilRegulation (EEC)No1308/70,as.lastamendedbytheActofAccession
ofGreece,shouldperformthisfunction;
- ^
Whereas,inordertofacilitate themanagement andcontrolofthesaidsystem,theaid
shouldbegrantedtocottonginningundertakings ;whereas,sothatproducers may
benefitfromthesystem,thegrantofaidshouldbemadesubjecttoproofthatthey
haveobtained aminimumpurchaseprice,tobedetermined,whichisclosetotheguide
pricefixedinaccordancewithparagraph 8oftheProtocol;
Whereas,inaccordance withparagraph 3oftheProtocol,ifCommunityproduction
exceedsaquantityfixedin.advance,theaidistobemultiplied byacoefficient
tobedetermined;1whereastheamountoftheaidtobegrantedcannotthereforebe
knownuntilafteFthequantityproducedhasbeenascertained;whereastolessenthe
(1)0JNoL146,4.7.1970,p.1.

-2-
1
'disadvantages forthoseconcerned ofanydelayinpaymentoftheaid,provision
shouldbemadefortheadvance paymentofaproportion "ofit.
Whereas,pursuant tothethirdsubparagaph ofparagraph 3oftheProtocol,the
amountofaidistobebasedonthedifference between aguidepricefixedforun~
ginnedcottonandtheworldmarketprice;whereas,sincethereisnointernational
tradeinunginned cotton,andtherearetherefore nooffersorquotations ,provision
shouldbemadetoenableaworldmarketpriceforthisproducttobedetermined ;
whereasthispricemaybedetermined bytakingthevalueoftheproducts obtained
byginning,anddeducting thecostofginning;
Whereasthevalueoftheproducts obtained shouldbedetermined onthebasis,first,
ofayieldinfibreandinseedtobedetermined and,secondly,ofthepriceonthe
worldmarketofthoseproducts ;whereastheworldmarketpriceshouldbedetermined
onthebasisofthemostfavourable purchasing possibilities onthatmarket;
Whereastheoffersandquotations takenintoconsideration shouldbethosemadeon
theworldmarketandthemajorinternational exchanges respectively ;whereas,however,
offerswhichcannotbeconsidered representative oftherealmarkettrendshouldbe
ignored;
Whereas,iftherearenorepresentative offersorquotations forcottonseed,the
worldmarketpriceforcottonseedshouldbedetermined bytakingthevalue
oftheproducts resulting fromtheprocessing ofthisseed;whereas wheretheoffers
orquotations forcottonseedontheworldmarketmightprejudice thesaleofthe
Community production ofcottonseed,theworldmarketpriceshouldbedetermined by
takingthevalueoftheaveragequantities ofoilandoil-cake derived fromthepro­
cessingofcottonseed,lessthe'processing costs;
Whereas,fortheaidsystemtooperatecorrectly ,theaverageworldmarketpricemust
berecorded foraCommunity frontier crossing'point;whereasinfixingthispoint
accountshouldbetakenoftheextenttowhichitisrepresentative forimportsof
cottonseed;whereastherefore theportofPiraeusshouldbechosen;whereasthe
offersandquotations adoptedwillhavetobeadjustediftheyrelatetoadifferent
frontier crossing point;
Whereassuchadjustments shouldalsobemadetotheoffersandquotations adoptedin
ordertocompensate foranyvariation fromthepresentation andqualitytakenasthe
basisforthefixingoftheguideprice;
Whereastheproducer MemberStatesshouldberequired tosetupthecontrolarrange­
mentsnecessary toensurethattheaidsystemoperates correctly ;

-3-
Whereas,inorderthattheCommunity expenditure relating tothemeasurein
question maybesubjected toappropriate financial andmonetary rulesand
procedures ,theprovisions ofRegulation No729/70oftheCouncil,of
(2)21April1969concerning thefinancing ofthecommonagricultural policy,
(3)aslastamended byRegulation (EEC)No3509/80,aswellastheRegulations
relating tothevalueoftheunitofaccount andtheexchangeratestobe
appliedinconnection withthecommonagricultural policy,shouldbeapplied
inthissector,inviewofthespecifically agricultural natureof^cotton,
HASADOPTED THISREGULATION :
0JNoL94,28.4.1970,p.13
3°JNoL367,31.12.1980,p.87

Article1
Forthepurposes ofthisRegulation :
(a)"unginned cotton"shallmeanthecapsules orfruitofthecottonplant(Gossypium )
whichhavereachedmaturity andhavebeenharvested ;
(b)"ginned cotton"shallmeanthecottonfibres(otherthanlinters
andcottonwaste)fromwhichonlytheseedsandmosttracesofthecapsules,
leavesandsoilhavebeenremoved-
Article2
Theguidepriceforunginned cottonshallremainapplicable throughout agiven
marketing year;themarketing yearshallrunfrom1September to31August.
/
Article 3
1.Theworldmarketpriceforunginned cottonshallbedetermined fromtimetotime
onthebasisoftheworldmarketpricesrecorded forginnedcottonandcottonseed
andinthelightoftheestimated yieldincottonseedandinginnedcottonofthe
Community harvest andofthecostofginning.
2mIftheworldmarketpriceforunginned cottoncannotbedetermined inaccordance
withparagraph 1,thispriceshallbefixedattheleveloftheguideprice-
Article4
1.Theworldmarketpricesforginnedcottonandcottonseedshallbedetermined inthe
lightoftheoffersontheworldmarketandthepricesquotedonthemajorinterna­
tionalexchanges-
2^Theworldmarketpricesshallbedetermined onthebasisofthemostfavourable
offersandquotations recorded,excluding offersandquotations whichcannotbe
regarded asrepresentative oftherealmarkettrend.
3,Asregards ginnedcotton,theworldmarketpriceshallbedetermined foraproduct
delivered toPiraeus,ofgraden°5andhavingfibres28mmlong.
Asregardscottonseed,theworldmarketpriceshallbedetermined foraproduct
delivered inbulktoPiraeus,ofsoundandfairmerchantable quality,witha12%
oilcontent,a9%moisture contentand2%impurities .
Wheretheoffersandquotations recorded donotsatisfytherequirements referred to
inthepreceding subparagraphs ^thenecessary adjustments shallbemade.

*ί*
-5-
4-Iftherearenosuitableoffersorquotations fordetermining theworldmarket
priceforcottonseed,thispriceshallbedetermined on>thebasis;ofthevalue
oftheproducts obtained fromtheprocessing ofthoseseeds,lessthecostof
crushing-
5-Wheretheworldmarketpriceforcottonseedcannotbedetermined inaccordance
withthepreceding paragraphs ,this.priceshouldbeestablished onthebasisof
themostrecentpricedetermined ,adjusted asappropriate totakeaccountoftrends
inthepricesofcompeting products . >
Article 5
1.Subjecttotheprovisions ofArticle6(3),whenthe , -
*worldmarketpricedetermined inaccordance withArticle 3isbelowtheguideprice,
aidequaltothedifference betweenthesetwopricesshallbegrantedforunginned
cottonharvested intheCommunity-
2mTheaidshallbegrantedtocottonginningundertakings whichapplyforitand
which : . '
(a)haveconcluded acontract withproducers stipulating paymenttothelatterofa
priceatleastequaltotheminimumpricereferred toinArticle 7,reduced,where
appropriate ,bytheamountbywhichtheaidisreducedinaccordance with
Article6(3),exceptincaseswhereaderogation hasbeenallowedinaccordance
withtheprocedure referred toinArticle 9;
(b)keepstockaccounts,withaviewtoenabling entitlement totheaidtobechecked,
whichsatisfyrequirements tobelaiddown; '
(c)providetheothersupporting documerts neededforchecking entitlement tothe
aid- ■ '**- H .
3-.Theamountofaidtobepaidshallbetheamountapplicable onthedaywhenthe
application foraidismade-
Applications foraidinrespectofagivenmarketing yearshallbesubmitted prior
toadatetobedetermined forthemarketing yearinquestion .
4.Entitlement totheaidshallbeacquired atthetimewhenthecottonisginned.The
aidmay,however,bepaidinadvance whentheunginned cottonentersthecotton
ginningundertaking ,providedthatanadequate guarantee isprovided-
5-TheaidshallbepaidbytheMemberStateonwhoseterritory theginningtakesplace-

Theaidshallbepaidforthequantity otunginned cottonwhichentersthecotton
ginningundertaking -
Inordertodetermine quantity thecottonshallbeweighed andsamplesshall ,
betakenwhenitentersthecottonginningundertaking *Theaidshallbe'calculated
onthebasisoftheweight,thelatterbeingadjustedforanydifference betweenthe
percentages ofmoisturecontentandofimpurities recorded andthepercentages in
relation towhichtheguidepriceisfixed.
Article 6'
Pendingdetermination ofthequantityactually produced inamarketing year,produ­
cerMemberStatesshallmakeanadvanceofaproportion oftheaidtothe
recipient undertakings ,-Theamountof-thisadvanceshallbelaiddown,in
accordance withtheprocedure referredtoinArticle 9,beforethestartof.each
marketing year,,inthelightofharvestforecasts .
Asearlyaspossible andinany.eventnotlaterthantheendofthethirdmonth
following thefinaldateforsubmission ofaidapplications ,thequantityactually -
produced ineachmarketing yearshallbedetermined according totheprocedure
referredtoinArticle 9,accountbeingtakeninparticular ofthequantities in
respectofwhichaidhasbeenrequested .
Ifthe-quantityactuallyproduced exceedsthetotalquantity 'inrespectofwhich
aidisgranted,theamountofaidtobepaidshallbedetermined bymeans
ofthefollowing formula :
PM ■Α1χ–=Α2
where :
A1=amountofaidapplicable onthedaywhentheapplication wasmade;
PM=quantityfixedbytheCouncilinrespectofthemarketing year;
PE=actual'Community production ;
A2=aidtobepaid-
Anyaidoutstanding shallbe-paidafterthequantityactuallyproduced hasbeen
determined -
Article7
TheCouncil,actingbyaqualified majority onaproposal fromtheCommission ,
shalleachyearfixtheipinimumpriceforunginnedcottonatthesametimeasthe
guideprice-

Theminimumpriceshallbefixedforthequalityto.whichtheguidepricerelates,
withafibrecontentof32%.Thispriceshallbefixedatalevelenabling
producers tosellatapriceascloseaspossible totheguideprice,account
r; (beingtakenof:
-marketfluctuations ; '
-thecostoftransporting thecottonfromtheproduction areastothe
processing areas.
However,forthe1981/82marketing yeartheminimumpriceforunginned cottonshall
befixedat70.00ECUper100kg.
Article8
Theproducer Memberstatesshallsetupasystemofcontrols : '
-toascertain thequantity ofunginned Community cottonwhichhasenteredeach
cottonginningundertaking ;
-toascertain thequantity ofunginned cottonwhichhasbeenginned;
-toensurethattheminimumpriceiscomplied with.~
Article 9
Detailed rulesfortheimplementation ofthisRegulation shallbedetermined in
accordance withtheprocedure laiddowninArticle 12of^Regulation (EEC)No
1308/70.: ' '-
Article 10
Theprovisions of.theregulations relating tothevalueoftheunitofaccount
andtheexchangeratestobeappliedincohnection withthecommonagricultural ,
policy,andthoseofRegulation (EEC)No729/70,shallapplybyanalogytothe
mattersdealtwithinthisRegulation .
ThisRegulation shallbebindinginitsentirety anddirectly applicable inall
MemberStates.■• '
Doneat FortheCouncil