COMMISSION OF THE EUROPEAN COMMUNITIES 
Brussels, 18.03.1998 
COM(1998) 158 final 
98/0107 (CNS) 
98/0108 (CNS) 
98/0109 (CNS) 
98/0110 (CNS) 
98/0111 (CNS) 
98/0102 (CNS) 
98/01 12 (CNS) 
98/0113 (CNS) 
Proposals for 
COUNCIL REGULATIONS (EC) 
concerning the reform of the common agricultural policy 
(presented by the Commission) 

EXPLANATORY MEMORANDUM 
THE FUTURE FOR EUROPEAN AGRICULTURE 
Since its inception, the common agricultural policy has been able to adapt and grow by 
mastering the challenges with which it has been faced over the years: in the early days it 
concentrated on attaining the goals set out in Article 39 of the Treaty, then it had to 
control the surpluses which appeared in some sectors, mainly by introducing quantitative 
restrictions, and finally it embarked on a new approach based on a combination of 
lowering institutional prices and making compensatory payments. This was the 1992 
reform reviewed in the document Agenda 2000. 
In Agenda 2000, the Commission explained why it believes that the moment has come to 
give a new impetus to the CAP by tackling a further stage. 
The Commission is now transmitting a set of proposals for legislation to the Council and 
Parliament which translate the main lines contained in Agenda 2000 into legal texts. 
Before analysing the various parts of the proposed reforms, the Commission would like 
to explain the overall thinking which has guided these proposals. 
1. THE NEED FOR REFORMING THE COMMON AGRICULTURAL POLICY 
The challenges facing the CAP are first and foremost internal in nature. There are at 
least three of these. 
- Agenda 2000 highlights a number of developments on our main agricultural 
markets which, in the long term, pose a major threat to Community agriculture. 
The vast majority of analyses which attempt to gauge the prospects for world 
markets agree in predicting strong growth in demand and prices offering a good 
rate of return. 
It is also clear that the current level of prices in the Union is still too high for it to 
be able to take advantage of this expansion of world markets given the 
international commitments it has made. If this is not corrected, the consequences 
are easy to predict: surpluses will appear again and stocks will start to build up 
and create intolerable budget costs. The Union will gradually lose its position on 
both the world and internal market, not only in agricultural commodities but also 
in processed products. This would have detrimental effects on employment as 
well. 
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This analysis has been presented at the Council of agriculture ministers and was 
scarcely contested. 
The CAP has had a number of negative effects which have only been very 
partially corrected by the 1992 reform. The support it provides is distributed 
somewhat unequally and is concentrated on regions and producers who are not 
among the most disadvantaged. This is having negative effects on regional 
development planning and the rural community, which has suffered badly from 
the decline in agricultural activity in many regions. At the same time, other 
regions have seen the development of excessively intensive farming practices 
which are having often a serious impact in terms of the environment and animal 
diseases. 
All these factors combine to create a bad image of the CAP in the minds of the 
public. An agriculture which pollutes, which contributes inadequately to spatial 
development and protection of the environment, and which, because of its 
undesirable practices, must take its share of responsibility in the spread of animal 
diseases, has no chance of long-term survival and cannot justify what it is 
costing. 
Making the CAP more acceptable to the citizen in the street, to the consumer, is 
one of our primary tasks in the years ahead. 
Agriculture in the fifteen countries of the Union is highly diverse in its natural 
resources, its farming methods, its competitiveness and income levels, and also in 
its traditions. This diversity is one of the strengths of European agriculture, 
contributing to its specific character and quality. But to make best use of this 
diversity, we have to relate it to how agricultural policy is devised and managed; 
the current way the CAP operates and is managed was designed for the 
Community of six and has hardly been modified since. It is not suited to a Union 
of fifteen which is on the point of welcoming in further members. It gives rise to 
complexity, bureaucracy and, in the end, a lack of understanding among farmers 
about how it works. 
A new, more decentralised model has therefore to be developed which gives the 
Member States the means of settling a number of issues for themselves by taking 
better account of the characteristics of a given sector or a given set of local 
conditions. 
But such a development in this direction needs to be carefully controlled so as to 
avoid any risk of distorting competition or renationalising the CAP. 
This also means that the greater freedom granted to the Member States must be 
exercised within a framework of shared, clear and precise ground rules, using a 
Community financing system and based on rigorous controls. 
Defining and safeguarding this new balance between common management and 
increased decentralisation is without doubt one of the major issues facing us in 
the years to come. 
These challenges on the internal scene, which are easily enough on their own to 
justify reforming the CAP, are reinforced by two external factors. 
- The first is the future expansion of the Union, already analysed in Agenda 2000. 
Here it is enough to add that enlargement makes the measures of market 
management and simplification which have to be taken anyway within the 
present Union even more necessary 
- The second factor is the international trade negotiations which are in the offing, 
both the new round of agricultural talks under the WTO and the negotiatipn of 
various bilateral trade agreements. 
We cannot expect that these negotiations will result in a reversal of the trend 
towards greater liberalisation of trade, with all the implications this has for the 
Community market. 
The Union has to prepare its agriculture sector for these negotiations. This has 
two vital consequences: 
- First, with this reform the Union has to lay down the agricultural policy that it 
intends carrying out in the years ahead in a way that satisfies its own interests and 
takes a realistic view of developments in the international context. This needs to 
be done before the opening of the WTO negotiations so that the Union can 
negotiate on a solid basis and knows where it wants to go. 
- Secondly, it must be made quite clear to all that the reform to be adopted will 
outline the limits of what the Union is able to agree to in the forthcoming 
international negotiations. 
These are the reasons why the CAP must be reformed. They have been the subject 
of wide-ranging debate within the Council, Parliament, the Economic and Social 
Committee and the Committee of the Regions. These discussions have shown that 
the arguments are largely understood and shared. 
The European Council in Luxembourg confirmed the point by concluding, in 
December 1997, that "The process of reform begun in 1992 should be continued, 
deepened, adapted and completed". 
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2. THE MAIN LINES OF THE PROPOSED REFORMS 
Based on the preceding analysis, the Commission has defined a number of 
guidelines on which the proposals for reforming the CAP are founded. 
Before detailing its proposals in the second part of this Explanatory Memorandum, 
the Commission would like first to explain these guidelines. 
2.1. Continued competitiveness must be ensured by sufficiently large price cuts 
that will guarantee growth of home-market outlets and increased participation 
by Community agriculture in the world market. 
These price reductions should be offset by an increase in direct aid payments 
in order to safeguard producers' incomes. 
2.2. The principle that there should be a new division of functions between 
Brussels and the Member States means developing a new approach on several 
very important points. 
- Compensation in the form of direct payments to producers has to be 
organised in a different way compared with 1992. Some of the 
compensation will take the form of national envelopes, financed entirely 
from the EAGGF Guarantee Section and distributed according to the size 
of national production. Each Member State will be able to allocate this 
money as it chooses, provided it complies with a number of Community 
criteria designed to prevent distortions of competition. Each Member State 
will be able to strike the balance it wants between intensive and extensive 
production. 
- The new Regulation on rural development recasts all the rural development 
schemes within a single framework, providing Member States with an 
opportunity of defining their priorities themselves and making their own 
choices among the schemes contained in the Regulation. These choices 
will be incorporated into an overall programming frame. 
2.3. This new decentralisation needs logically to be accompanied by a major effort 
at simplifying the rules. An example is the new rural development Regulation, 
which does away with a large number of complicated regulations which are 
often mutually not very consistent. 
The same approach has been taken to the market-management regulations, in 
particular the one on arable crops. 
2.4. The Commission's determination to give agricultural policy a number of new 
tasks so that it can meet the expectations of society better leads to a series of 
further guidelines: 
- Action on the environment is to be substantially reinforced. The resources 
devoted to agri-environmental measures are increased and the aid for less-
favoured areas is to be made into an instrument for consolidating, or even 
expanding, cultivation methods requiring low intermediate inputs. A major 
effort will be made to encourage truly extensive beef production by almost 
tripling the premium for this type of livestock farming. Finally, Member 
States will have to take detailed steps to ensure that environmental rules are 
complied with, including reducing or discontinuing direct payments. 
- The new rural development Regulation, for the first time, lays the 
foundations for a comprehensive and consistent rural development policy 
whose task will be to supplement market management by ensuring that 
agricultural expenditure is devoted more than in the past to spatial 
development and nature conservancy. 
- Rural development will thus become the second pillar of the CAP. This 
major new departure is to be backed by Community funding for rural 
development schemes across all rural areas and transferring the financing 
of most of the expenditure on this from the EAGGF Guidance Section to 
the Guarantee Section. 
2.5. The Commission is proposing an increase in milk quotas of 2%, with the idea 
of signalling two clear political messages: half the increase will go to 
mountain regions and half to new entrants to farming, who need to be 
supported. 
2.6. The Commission has also wanted to underscore the importance it attaches to 
Mediterranean products by proposing a reform of the market organisation in 
olive oil to complement the proposal already presented on tobacco. A 
proposal for the wine sector will be. transmitted to the Council and Parliament 
by June 1998. 
2.7. Lastly, it is vital to deal with various inequalities and abuses which seriously 
harm the image of the CAP. 
- A ceiling is therefore proposed, to operative degressively, on the amount of 
direct aid that a farm can receive under the various support schemes linked 
to the market organisations. The Commission wants to avoid the reform of 
the CAP becoming a further reason for handing out over-generous public 
subsidies to agricultural holdings. 
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Member States will be given a legal basis for awarding direct aids only to 
farms that are genuinely engaged in farming. This should end the abuses 
detected since 1992 by which individuals making clever use of legal 
loopholes have been able to apply for CAP aids although they are not 
farmers. 
The Member States will be able to vary, i.e. downwards, the direct aids 
awarded to holdings in line with criteria to be defined by each Member 
State relating to the amount of labour employed on a farm. Money released 
in this way is to be allocated by the Member State to agri-environmental 
schemes. 
3. THE EUROPEAN MODEL OF AGRICULTURE. 
All these proposals together have the aim of giving concrete form to a European 
model for agriculture in the years ahead. 
It is worth listing here what the main lines of this model should be: 
- a competitive agriculture sector which can gradually face up to the world market 
without being over-subsidised, since this is becoming less and less acceptable 
internationally; 
- production methods which are sound and environmentally friendly, able to 
supply quality products of the kind the public wants; 
- diverse forms of agriculture, rich in tradition, which are not just output-oriented 
but seek to maintain the visual amenity of our countrysides as well as vibrant and 
active rural communities, generating and maintaining employment; 
- a simpler, more understandable agricultural policy which establishes a clear 
dividing line between the decisions that have to be taken jointly and those which 
should stay in the hands of the Member States; 
- an agricultural policy which makes clear that the expenditure it involves is 
justified by the services which society at large expects farmers to provide. 
This is not the same model as pursued by our major competitors elsewhere. There 
are many differences between ours and theirs. Seeking to be competitive should not 
be confused with blindly following the dictates of a market that is far from perfect. 
The European model is designed to safeguard the earnings of farmers, above all 
keeping them stable, using the machinery of the market organisations and 
compensatory payments. 
For centuries Europe's agriculture has performed many functions in the economy 
and the environment and has played many roles in society and in caring for the land. 
That is why it is vital, as the Luxembourg European Council concluded in December 
1997, that multifunctional agriculture must develop throughout Europe, including 
those regions facing particular difficulties. In connection with Agenda 2000 and its 
implementation, care will accordingly need to be taken to provide proper 
compensation for natural constraints and disadvantages. 
The fundamental difference between the European model and that of our major 
competitors lies in the multifunctional nature of Europe's agriculture and the part it 
plays in the economy and the environment, in society and in preserving the 
landscape, whence the need to maintain farming throughout Europe and to safeguard 
farmers' incomes. 
In any case, it is wrong to claim that there is another model available. Those who 
claim it is possible to reconcile the two models outlined above are prey to an 
illusion. They would like to believe that there is a future in high prices, 
protectionism and bureaucratic steering of production. But that way lies a loss of 
international markets, falling home consumption and, as a result, declining 
production in Europe. This model, if it can be called that, may offer short-term 
comfort but means inevitable decline in the longer run. 
This is not in the interests of farmers who want to have a future and need to bank on 
future growth. Nor is it what consumers, the private sector or the taxpayer want, 
since they are less and less inclined to pay for rising surpluses. 
EXPLANATORY MEMORANDUM 
(TECHNICAL PART) 
4. ARABLE CROPS 
4.1. The Regulation on arable crops and the modification of the cereal CMO 
transpose the orientations concerning cereals, oilseeds and protein crops 
contained in Agenda 2000. In view of these proposals and of previous 
modifications of Regulation (EEC) No 1765/92, it appears appropriate, for 
reason of clarity, to replace the current Regulation on arable crops. 
4.2. As the role of intervention will no longer be to guarantee price stability at a 
high level, but rather to act as a safety net for farm incomes, the intervention 
price for cereals will be reduced by 20 % in one single step. 
4.3. With the diminishing role of intervention, a seasonal correction of 
intervention prices will no longer be justified. The monthly increment system 
will therefore be abrogated, without changing the intervention period. The 
provisions for maize and sorghum, export refunds - in particular for "malt" -
will be adapted. The minimum price for starch potatoes will be reduced by 
20% and compensation payments to starch potato producers will be increased 
in line with the increase of area payments for arable crops thus maintaining 
the calculation base in the 1992 Reform. Furthermore, the notion of quality 
type will become obsolete, as the intervention price will refer to a certain 
minimum quality, with no further differentiation. However, stabilisation of 
markets will continue to be a major objective of the Common Market 
Organisation. Therefore, the instrument of export levies would be retained but 
under normal circumstances would not be required. 
4.4. The Regulation on arable crops increases the direct payment for cereals from 
54 ECU/t to 66 ECU/t and puts direct payments for oilseeds and non-textile 
linseed at the same level. For oilseeds, this non-specific payment eliminates 
the basic condition for production area constraints imposed by the Blair 
House agreement and enables the EU to abrogate all specific oilseeds 
provisions. 
4.5. To ensure the relative profitability of protein crops compared to the other 
arable crops, they will receive an additional direct payment of 6,5 ECU/t. 
Compared to the current situation this will mean a reduction in the direct 
payment from 78,49 ECU/t to 72,5 ECU/t. The specific scheme for durum 
wheat, which was modified in 1997, will be continued. 
4.6. Compulsory set-aside will be retained as an instrument, while its normal rate 
will be fixed at zero, under expected conditions. Voluntary set-aside will still 
be allowed, but its effectiveness and positive impact on the environment 
should be further improved. Thus it should be available at a minimum level of 
10% of the arable area across the Community. At or above this level Member 
States may fix their own maximum percentage. Compensation per hectare will 
be at the same level as for cereals. This amount can be guaranteed for a period 
up to 5 years in order to enhance the environmental impact of set-aside. 
4.7. The payment per hectare and the rate of set-aside may be modified according 
to market developments. 
4.8. The draft Regulation on arable crops does not exclude silage cereals from 
direct payments. This departure from Agenda 2000 will mean expensive 
control mechanisms are avoided and producer flexibility is maintained, since 
the final use of maize (grain versus silage) may depend on weather conditions 
which cannot be foreseen when applying for the arable crop payment. The 
retention of aid for silage cereals will result in important cost savings 
compared to the earlier Agenda 2000 proposal, for many producers in other 
sectors, notably the dairy and beef sectors. 
4.9. Although the essential elements of the existing regime, in particular the base 
areas, the régionalisation scheme, the link to historic yields and the set-aside 
provisions, are retained, major simplifications have been achieved. 
- As no Member State has chosen this option, the application of individual 
base areas will no longer be possible. If base areas are exceeded, financial 
sanctions will still apply, while extraordinary set-aside is abolished. The 
system of concentrating sanctions on responsible sub-areas has turned out 
to be extremely complex and is discontinued. 
- Under the régionalisation scheme, the possibility of determining specific 
base areas for maize will no longer apply. A specific yield may, however, 
be fixed for irrigated crops. Only historic areas may benefit from such 
specific aid, which implies the determination of base areas for irrigated 
land. Reference yields for oilseeds will no longer be necessary, since direct 
payments will be based on cereals base areas. 
- All provisions concerning the use of set-aside for environmental or forestry 
purposes have become obsolete. Small producers will continue to be 
exempt from obligatory set-aside should the set-aside rate at some stage be 
other than zero. 
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4.10. Practical experience with the implementation of the 1992 reform has led to 
certain technical changes being proposed: 
- postponement of the sowing date from 15 May to 31 May; 
- postponement of the payment period from autumn to spring (1 January - 31 
March); 
- reduction of the number of management committees to a single committee 
competent for all arable crops covered by this Regulation. 
4.11. The provisions on trade with third countries have not been altered, except for 
some minor adaptations and a new proposal to establish general Commission 
competence for the implementation of tariff quotas. 
5. BEEF REGIME 
5.1. The proposal for a new Common Market Organisation for beef and veal 
intends replacing the intervention system by a private storage system, inspired 
by that applied in the pig meat sector. The scope of direct payments will be 
extended and made more flexible in application. For reason of clarity, it 
appears appropriate to replace Regulations (EEC) No 805/68 and No 1892/87. 
5.2. Under the reform proposal, the effective market support level of 2 780 ECU/t 
will be reduced by 30 %. The current intervention price will be reduced in two 
annual steps of 10 % and on 1 July 2002 be replaced by a basic price for 
private storage, which will introduce the third 10 % decrease in support level. 
The basic price for private storage will be set at 1 950 ECU/t which is the 
level for effective market support foreseen in the Agenda 2000 proposal. 
Private storage aid may be granted when - as in the pig meat sector - the 
average Community market price is less than 103 % of the basic price. This 
price can only be changed by the Council in consultation with the European 
Parliament (Art. 43 (2) of the Treaty). The legal provisions on the intervention 
scheme, including the existing private storage provisions, will be maintained 
for a transitional period, to allow for phasing-in. 
5.3. To ensure a fair standard of living for the farmers concerned, direct payments 
will be increased for male bovine animal and suckler cows. Heifers will - to a 
certain percentage - be eligible for the suckler cow premium. A new direct 
payment for dairy cows would be introduced. Flexibility and targeting will be 
increased by entitling Member States to allocate part of the direct payment 
(national envelope) according to specific priorities. 
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5.4. The amount of direct support follows the Agenda 2000 proposal but will be 
sub-divided into a Community-wide basic payment and an additional payment 
according to national provisions. However, the premium for bulls has to take 
into account the benefits of retaining the arable crop payment for silage maize. 
Direct payments for bovine animals will only be granted for those animals, 
which are identified and registered in accordance with EU legislation. 
5.5. The basic special premium for male animals will be increased in three steps 
from 135 ECU up to 220 ECU for bulls and from 108.7 ECU up to 170 ECU 
for steers in the year 2002 and will be continued at this level in the subsequent 
calendar years. Payments will be one-off for bulls and twice in a lifetime for 
steers. 
Regional ceilings for the number of premium rights for male animals will be 
fixed. 
The deseasonalisation premium for steers would continue as at present. 
However, to apply this scheme effectively, it appears appropriate to require a 
certain level of relative importance of steer production in a Member State 
(60%). 
5.6. The annual stickler cow premium will be increased from 144.9 ECU up to 180 
ECU in 2002 and will continue to be based on individual ceilings. A 
maximum 20 % of the suckler cow premium rights can be claimed for heifers. 
This will help reduce the total number of suckler cows, while maintaining the 
current individual ceilings. 
In addition, it is appropriate to introduce national ceilings to cover all suckler 
cow premium rights. The overall number of premium rights would therefore 
be reduced to the level of actual use in a certain reference period (best out of 
1995 and 1996, plus 3%). Where the national ceiling would require a 
reduction of individual premium rights, Member States would have to comply 
with certain objective criteria. The provisions for a national reserve of 
premium rights have been simplified. 
5.7. The beef premium granted to dairy cows will be determined on the basis of 
the dairy premium units. Thus an excessive administrative and control burden 
will be avoided. According to the milk yield, a certain number of dairy 
premium units could be achieved with different numbers of cows. Therefore, 
the beef premium for dairy cows has been adjusted to these differences at a 
national level. The beef portion will in consequence be higher in Member 
States with low milk yields (more cows per premium unit) and vice versa. The 
amounts to be paid per premium unit are fixed on an annual base in the annex. 
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5.8. The total number of animals qualifying for the special premium and the 
suckler cow premium will be limited to 2 livestock units (LU) per hectare 
forage area. Producers with a stocking density less than 1.4 LU per hectare 
and currently practising extensive production methods (animal grazing on 
pasture land) may qualify for an additional payment of 100 ECU per premium 
granted. 
5.9. In addition to this premia, Member States will allocate additional payments 
within the limits of fixed global amounts, financed by the EAGGF. While 
permitted extensive flexibility, Member States will be responsible for a non­
discriminatory implementation. Payments should be allowed per animal 
and/or per hectare of permanent pasture. For pastureland, a maximum amount 
per hectare should be approximately equal to the average area payment for 
arable crops. A set of specific Community criteria, including specific density 
requirements, are considered necessary to ensure a reasonable level of 
production control, to avoid discriminatory effects, and to ensure 
compatibility with multilateral commitments. An evaluation of the 
distribution of Community funds is envisaged after 4 years. 
5.10. The amount of direct payments may be adapted in the light of developments 
in production, productivity and the markets. 
5.11. The provisions on trade with third countries would be carried over from 
existing legislation, except for some minor amendments concerning in 
particular an extension of Commission competence for the implementation of 
tariff quotas. 
5.12. The Regulation establishes a new legal basis for price reporting. 
6. DAIRY REGIME 
6.1. The Regulation establishes a new Common Market Organisation for dairy 
products. The internal market provisions would continue to be based on 
intervention and public storage of butter and skimmed milk powder as well as 
certain aid schemes for private storage and particular marketing measures. 
The proposed Regulation repeals Regulations (EEC) No 804/68 (old basic 
Regulation), No 987/68, No 1723/81, No 2990/82, and No 1842/83 and 
777/87. All the essentials of these Regulations have been incorporated in the 
new CMO and will therefore be commonly based on articles 42 and 43 of the 
Treaty. It appears appropriate, for reason of clarity, to replace the current 
Regulations. 
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6.2. In the dairy sector, competitiveness should be increased by a reduction of 
internal prices. This will improve marketing possibilities on both internal and 
external markets. To make best use of these possibilities the Commission 
proposes gradually decreasing in 4 equal steps intervention prices for butter 
and skimmed milk powder by 15%. This proposed price decrease goes beyond 
the Agenda 2000 proposal. It is justified not only by the added benefit in 
terms of competitiveness but also, in comparison to the Agenda 2000 
proposal, by the fact that available milk quotas will be increased and also by 
the fact that dairy farmers will partially benefit from the retention of a crop 
premium for silage cereals. Moreover, most farmers can be expected to adapt 
to their new situation through cost saving measures. 
Intervention prices in the dairy sector, as in the arable and beef sectors, will 
no longer be subject to annual price fixing but will be fixed for the whole 
period covered by Agenda 2000. It can be expected for the dairy sector as well 
as for the other sectors that internal market prices will stay above the 
intervention level. 
6.3. The conditions for intervention remain largely unchanged, except for butter 
where intervention will be explicitly restricted to produce originating in the 
Community. 
6.4. Provisions concerning private storage aids and marketing measures would be 
adapted to existing general rules. For school milk, a Community aid level 
(95% of the target price) and a maximum quantity per pupil (0.25 litre of milk 
equivalent) have been fixed. Provisions for butter purchases have been 
specified. 
6.5. The amount of direct support per producer will be based on the number of 
premium units. This number will be determined by dividing the individual 
reference quantity by the average milk yield in the Community. In order to 
target support to producers rather than quota holders, temporarily leased quota 
will be accounted to the producer who has leased it. 
6.6. The amount of direct payment per premium unit follows the Agenda 2000 
proposal but will be sub-divided into a basic payment common to all premium 
units and an additional payment according to national provisions. The global 
amounts available per Member State are fixed in an annex. 
The basic cow premium will be phased in gradually by four equal steps in 
parallel with the reduction in intervention prices, reaching 100 ECU in the 
calendar year 2003 and the subsequent years. 
The additional payments follow similar common rules as introduced for the 
beef sector (per head maximum, area payments, maximum per hectare, s. 
paragraph 5.9). 
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6.7. The provisions on trade with third countries will be carried over from 
previous regulations, except for some minor amendments concerning in 
particular an extension of Commission competence for implementation of 
tariff quotas, and for the granting of export refunds on imported milk 
products. 
6.8. Some general provisions concerning internal trade and the Milk Marketing 
Board have become obsolete and have been deleted. Furthermore, the 
Commission should be empowered to facilitate the transition and to resolve 
specific practical problems. 
7. NEW MILK QUOTA REGULATION 
7.1. Council Regulation (EEC) No 3950/92 of 28 December 1992, establishing an 
additional levy in the milk and milk products sector remains necessary in a 
mid-term perspective in order to maintain a reasonable market balance. 
However, farmers should not given the impression that the present schemes, 
with its intrinsic rigidities, can last forever. It is therefore only proposed to 
continue to apply the scheme for six further consecutive years. 
7.2. The effects of the price support reduction on internal consumption and export 
of milk and milk products justify a 2% increase in the total reference quantity 
for milk in the Community in four steps following the respective price cuts. 
The additional reference quantities should be distributed in such a way as to 
improve the situation of certain categories of farmers who need particular 
support. It is therefore appropriate to provide that Member States allocate 
these quantities with priority to young farmers who intend to start or develop 
milk production and to producers in mountain areas. Precautions should 
however be taken to prevent the said distribution criteria from being 
circumvented. In the case of producers in mountain areas, these measures 
should be designed in the form of ring-fencing clauses in order to nullify the 
effects of moving additional reference quantities out of mountain areas during 
the first two twelve months periods following their allocation. 
7.3. The experience with the additional levy scheme has shown that the transfer of 
reference quantities through legal constructions such as leases which do not 
necessarily lead to a permanent allocation of the reference quantities 
concerned to the transferee, can be an additional cost factor for milk 
production hampering the improvement of production structures. In order to 
strengthen the reference quantities' character as a means of regulating the 
market of milk and milk products, it is appropriate to provide that in cases of 
non-permanent transfers a certain part of the relevant reference quantities be 
returned to the national reserve for re-distribution to active producers. 
Member States should however have the possibility to exempt certain specific 
categories of persons or cases from the application of this syphoning-off 
measure, in the light of an evaluation of the interests involved and the 
objectives pursued by the said clause. The percentages applied should be 
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determined by Member States in the light of their specific situation. 
Moreover, where reference quantities fall back to persons who did not actively 
produce milk or milk products during a given reference period, Member 
States should have the possibility to provide that the relevant reference 
quantities should revert to the national reserve unless they are permanently 
transferred to an active producer within a certain period. However, persons 
who resume milk production within a certain period should have the 
possibility to apply for a re-allocation of reference quantities, similarly to 
Article 5 second subparagraph of Regulation (EEC) No 3950/92. 
8. RURAL DEVELOPMENT 
8.1. In transposing the orientations set out in the Agenda 2000 document on rural 
policy, agri-environmental policy and on economic and social cohesion, the 
new Regulation on Community Support for Rural Development by the 
EAGGF establishes an effective instrument to accompany and complement 
the proposed reforms in market and price policy. The new Regulation will 
replace the EAGGF Structural Funds Regulation, four Objective 5a 
regulations, the three accompanying measures regulations and the regulation 
on structural forestry support. Their fusion under a single legal framework for 
rural development support will constitute a significant contribution to the 
simplification of Community legislation. The scope of the new regulation may 
be extended to a new Community Initiative on rural development by the 
Commission. 
8.2. Rural development measures concern in particular support for structural 
adjustment of the farming sector (investment in agricultural holdings, 
establishment of young farmers, training, early retirement), support for 
farming in less favoured areas, remuneration for agri-environmental activities, 
support for investments in processing and marketing facilities, for forestry and 
for measures promoting the adaptation of rural areas insofar as these are 
related to farming activities and to their conversion. 
Following a request of the European Parliament concerning a European Forest 
Strategy, forestry measures have been extended in the rural development 
framework. Furthermore, measures in favour of producer organisations have 
been reassigned from rural development to market policy. 
8.3. Eligibility criteria for the different measures are inspired by current 
legislation. There are, however, some important new elements: 
- Only certain basic eligibility criteria will be laid down, for most measures, 
in the Council framework Regulation. This radical simplification will 
allow for greater flexibility and subsidiarity. Details will be decided at 
programming level, rather than by overloading the Council Regulation. If a 
particular need arises for further Community legislation, this can be 
enacted at Commission implementing level. 
-16-
- Current eligibility criteria for support in Less Favoured Areas will be 
modified in order better to integrate environmental goals into rural 
development policy; the LFA scheme will gradually be transformed into an 
instalment to maintain and promote low-input farming systems. In 
addition, targeted agri-environmental measures will be aimed more 
specifically at achieving the objectives of protecting the environment and 
maintaining the countryside. 
- Coherence between rural development measures and other instruments of 
the Common Agricultural Policy or other Community policies will be 
ensured by specific rules, which will ensure that overlapping between 
instruments is avoided. On this line, training measures financed by 
EAGGF under this regulation should have a sufficient link to rural 
development in order to exclude financing of activities supported by the 
Social Fund. Maximum amounts for some measures will prevent any abuse 
of rural development support, such as unjustified additional market 
support. 
8.4. Administrative and financial provisions of the Rural Development Regulation 
reflect the Agenda 2000 proposals that Community support for rural 
development measures 
- is programmed under the Structural Funds in those regions qualifying for 
Objective 1 and Objective 2 support, 
- is financed from the "Guidance" or the "Guarantee" section of the EAGGF 
according to the measure and the region. 
8.5. Two groups of rural development measures have therefore been distinguished: 
- the 1992 accompanying measures (agri-environment, afforestation, early 
retirement) complemented by the Less Favoured Areas Scheme, 
- measures concerning modernisation and diversification (investment in 
agricultural holdings, establishment of young farmers, training, support for 
investments in processing and marketing facilities, additional support for 
forestry and measures promoting the adaptation and reconversion of 
agriculture in the context of rural development). 
8.6. The 1992 accompanying measures including the LFA scheme will be applied 
horizontally in all regions of the Community. The EU will co-finance these 
measures through the EAGGF Guarantee Section. 
8.7. Measures concerning modernisation and diversification follow a different 
approach according to their regional context. In Objective 1 and Objective 2 
regions, they will be included in the regional programmes and so contribute to 
specific targets set under the Economic and Social Cohesion Policy. For these 
purposes, the Rural Development Regulation is equally part of the overall 
17-
legal framework for Structural Funds, referring in particular to the General 
Structural Funds Regulation (Com. proposal...). 
In Objective 1 regions, the measures concerning modernisation and 
diversification will be financed under the EAGGF "Guidance" section while 
in Objective 2 regions and in all other regions they would fall under the 
EAGGF "Guarantee" section. 
For Objective 2 regions the General Structural Funds Regulation will provide 
the legal framework. However, financing by the EAGGF "Guarantee" section 
would inevitably require some limited derogations from the Structural Funds 
Regulation. Such derogations are in most cases justified by the fact that 
similar rules already exist for the "Guarantee" section or may be adopted 
under Commission powers. None of these derogations calls Objective 2 
programming into question. 
8.8. Outside Objective 1 and Objective 2 areas, rural development measures 
concerning modernisation and diversification will be applied horizontally 
under the same administrative and financial provisions as the 1992 
accompanying measures and the LFA scheme. All these measures will be 
implemented in a decentralised way at the appropriate level, at the initiative of 
the Member States. The draft Regulation establishes rules for multiannual 
Rural Development Programming, including monitoring and evaluation. 
These rules are as close as possible to those for the Structural Funds or even 
refer to them in some cases. 
8.9. State aid rules (Art. 42 of the Treaty) clarify conditions and procedures for 
state aids in the field of rural development support. 
18 
9. FÏNANCING RÉGULATION 
9.1. Taking into account the reorganisation of rural development policy a new 
financing Regulation on the EAAGF will replace Regulation (EEC) No 
729/70 on the financing of the Common Agricultural Policy rather than 
pursuing the codification procedure. The new Regulation will consolidate 
former legislation and thus contribute to simplification. 
9.2. Rural development measures would in future be financed by either the 
Guarantee Section or the Guidance Section of EAGGF according to the 
regional context. Rural development measures covered by Objective 1 
programmes and the rural development Community Initiative will be financed 
by the Guidance Section of EAGGF. Other rural development measures will 
fall under the Guarantee Section of EAGGF. These will be the accompanying 
measures and the LFA scheme in all rural areas as well as measures 
concerning modernisation and diversification covered by Objective 2 
programmes and by rural development programmes outside Objective 1 or 2 
regions. In this concept some specific financial rules would be introduced, in 
particular, the possibility of advanced payment for rural development 
programmes. 
9.3. Moreover, it will be clarified that the EAGGF Guarantee Section would also 
finance specific veterinary and plant health measures as well as information 
on the Common Agricultural Policy. 
10. HORIZONTAL REGULATION AND OTHER HORIZONTAL QUESTIONS 
10.1. The Commission proposes to deal with certain issues concerning all Common 
Market Organisations providing direct payments in a horizontal Regulation 
which will contain the following rules: 
10.2. Cross compliance: With respect to integrating better the environment into the 
CAP, Member States should apply appropriate environmental measures 
concerning the particular market support schemes. They will also be enabled 
to decide on appropriate and proportional penalties for environmental 
infringements and be authorised to reduce or to annul direct payments. 
10.3. Modulation: The distribution of direct payments among farmers might cause 
specific problems within certain Member States which call for a subsidiarity 
approach. However, agricultural income including direct payments has 
important employment impacts in rural areas. Member States would therefore 
be authorised to modulate direct payment per farm within certain limits and 
relative to employment on the farm. 
-19 
10.4. Funds made available from aid reducing - either under cross-compliance or 
under modulation - would remain available for the respective Member State as 
an additional Community support for agri-environmental measures. 
10.5. Ceilings: To avoid excessive transfers of public funds to individual farmers, 
the Commission proposes to introduce a degressive overall ceiling to direct 
payments. A degressive formula takes into account the differences in 
adaptation opportunities according to production capacities. 
10.6. The changes in the different market organisations will require an adaption of 
the Integrated Management and Control System (Regulation (EEC) No 
3508/92. In due course, the Commission will make a proposal. 
10.7. The various changes which are proposed for the support scheme for arable 
crops, the common market organisations for beef and veal and for milk and 
milk products as well as for the system of CAP financing would require major 
and complex amendments to the relevant Council Regulations. For reasons of 
transparency and legislative clarity it is appropriate to repeal these said acts 
and to replace them by new consolidated Regulations. 
As regards Regulations (EEC) No 804/68 (milk and milk products), No 
805/68 (beef and veal) and No 1765/92 (arable crops), the Commission has 
started the special consolidation procedure. So far, two consolidation 
proposals have already been presented to the Council: 
- COM(94) 467 final of 3.11.1995 for the CMO for beef and veal and 
- COM (95) 598 final of 6.12.1995 for the CMO for milk and milk products. 
As a consequence of the respective proposals presented under Agenda 2000, 
both proposals will become obsolete. They will be formally withdrawn. 
11. PRE-ACCESSION REGULATION 
11.1. The Luxembourg Council agreed on a substantial increase in pre-accession 
aid to complement the PHARE programme, Structural Funds support and 
support for agriculture and rural development in the applicant countries of 
Central and Eastern Europe. 
-20 
11.2. In accordance with the orientations of Agenda 20001 and with the conclusions 
of the European Council in Luxembourg, financial aid provided for by the 
structural and agricultural pre-accession instruments will be granted to Central 
and Eastern European applicant countries. This is reflected in article 1 of the 
present regulation, which lists the ten countries concerned. 
11.3. Cyprus, as set out in the Luxembourg conclusions (§ 22), benefits from a 
specific pre-accession strategy which corresponds with its present economic 
situation. 
11.4. In the light of future progress towards a political solution to the Cyprus 
problem currently being pursued under the aegis of the United Nations and in 
order to take account of the economic situation then prevailing on the island, 
it may become appropriate, as accession negotiations proceed on the basis of 
the Luxembourg conclusions (§ 28), to also include Cyprus in the list of 
beneficiary countries. 
11.5. In many of the applicant countries, agriculture still represents a major source 
of employment. In general, the institutional process of privatisation and 
transformation in the agricultural sector still has to be completed and farm 
structures will continue to evolve. Community pre-accession aid for 
agriculture and rural development has to be decided in view of the particular 
need for adaptation to a rather complex Community "acquis" in this sector. 
11.6. The framework for Community pre-accession aid is provided by a horizontal 
co-ordination Regulation. The Regulation concerning pre-accession measures 
for agriculture and rural development has been drafted in accordance with the 
horizontal framework. Article 235 of the Treaty is the relevant legal basis for 
these indispensable Community measures. 
11.7. Concentrating on priority needs for agriculture and rural development, pre-
accession measures concern in particular support for improving the efficiency 
of farms (including producer groups), processing and distribution, promotion 
of quality products, veterinary and phytosanitary control, improving land 
quality, its reparcelling and registration, water resource management, 
vocational training, diversification of economic activities in rural areas, agri-
environmental and forestry measures, improvement of rural infrastructure and 
rural villages, including the maintenance of rural heritage as well as technical 
assistance. The list can be extended if additional priority needs should emerge. 
see part II (the Challenge of Enlargement), section III (a strategy for enlargement) part 2 (reinforcing 
the pre-acceession strategy) and section IV (Cyprus) 
21 
11.8. Community support will be implemented in the form of multiannual 
programmes, following the guidelines and principles for operational 
programmes under the EU Structural Policy. These comprise in particular the 
principles of complementarity, partnership, additionality, the programming 
procedure, monitoring and evaluation. Compatibility with the accession 
partnership and the national programme for the adoption of the "aquis" must 
be ensured. 
11.9. According to the Agenda 2000 proposal, the annual resources available to the 
EAGGF "Guarantee" section are equal to 500 MECU at constant 1997 prices. 
This money will be allocated to the applicant countries according to objective 
criteria. Upon accession to the EU, a country will lose its entitlement under 
this Regulation. 
-22 
Proposal for a 
.o 1^ /wnm 98/0107 (CNS) 
Council Regulation (EC) No 
of... 
amending Regulation (EEC) No 1766/92 on the common organisation of the 
market of cereals and repealing Regulation (EEC) No 2731/75 fixing standard 
qualities for common wheat, rye, barley, maize and durum wheat 
THE COUNCIL OF THE EUROPEAN UNION 
Having regard to the Treaty establishing the European Community and in particular 
Article 43 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 after the 1992 reform of the common agricultural policy, there has been a 
particular improvement in market balances; 
Whereas set-aside under the support system for producers of certain arable crops 
introduced in 1992 in addition to a lowering of the intervention price, has helped to keep 
production under control, while increased price competitiveness has allowed significant 
additional cereals quantities to be used on the domestic market, mainly for animal feed; 
1 OJ C... 
2 OJC... 
3 OJC... 
23 
Whereas, subject to increases of area payments under the arable crops support system as 
laid down in Council Regulation (EC) No ...4, to reinforce the effect of the 1992 reform, 
price competitiveness should be strengthened by a further cut in the intervention price, 
bringing it down at one step to a safety-net level; 
Whereas intervention should no longer be a major factor on the internal market; whereas 
in the light of this new role of intervention, the system of monthly increments should be 
discontinued; 
Whereas the provisions of standard quality have no longer any practical relevance and 
should, therefore, be withdrawn; 
Whereas since the non cereal starch price and compensation arrangements have always 
been governed by the common organisation of the market in cereals, the adjustment of 
those arrangements should follow the measures taken for cereals; that the minimum price 
for potatoes intended for the manufacture of potato starch and the payments for producers 
of such potatoes should, therefore, be adapted in line with the price reduction for cereals; 
Whereas tariff quotas resulting from agreements concluded in accordance with 
Article 228 of the Treaty or from any other act of the Council should be opened and 
administered by the Commission on the basis of detailed rules; 
Whereas, taking into account the influence of the world market price on the internal 
price, the conditions for application, by the Commission, of the necessary measures to 
stabilise the internal market should be clarified, 
HAS ADOPTED THIS REGULATION: 
Article 1 
Regulation (EEC) No 1766/92 is hereby amended as follows 
1. Article 1 paragraph 2 shall be replaced by the following text: 
OJL... 
24 
"2. This Regulation shall apply notwithstanding the measures provided for by 
Regulation (EC) No ... on support for arable farmers." 
2. Article 3 shall be replaced by the following: 
"Article 3 
1. An intervention price for cereals subject to intervention shall be fixed at 
ECLL2125 per tonne. 
2. The intervention price shall refer to the wholesale stage for goods delivered to the 
warehouse, before unloading. It shall be valid for all Community intervention 
centres designated for each cereal. 
3. The prices fixed in this Regulation may be changed in the light of developments 
in production and the markets in accordance with the procedure laid down in 
Article 43 (2) of the Treaty." 
3. Article 8 shall be replaced by the following: 
"Article 8 
1. A minimum price for potatoes intended for the manufacture of potato starch shall 
be set at ECU 167.82. 
This price applies to the quantity of potatoes, delivered to the factory, which is 
needed for making one tonne of starch. 
2. A system of payments is established for producers of potatoes intended for the 
manufacture of potato starch. The amount of the payment applies to the quantity of 
potatoes needed for making one tonne of starch. It shall be set at ECU 105.60. 
25 
The payment shall be paid only in respect of the quantity of potatoes covered by a 
cultivation contract between the potato producer and the starch manufacturer within 
the limit of the quota allocated to such undertaking, as referred to in Article 2 (2) of 
Council Regulation (EC) No 1868/945 
3. The minimum price and the payment shall be adjusted according to the starch 
content of the potatoes. 
4. If the situation on the potato starch market makes it necessary, the Council shall 
adopt the appropriate measures in accordance with the procedure laid down in 
Article 43 (2) of the Treaty. 
5. The Commission shall adopt the detailed rules for applying this Article following 
the procedure laid down in Article 23." 
4. Article 12 paragraph 1 shall be replaced by the following text: 
"1. Tariff quotas for the products listed in Article 1 resulting from agreements 
concluded in accordance with Article 228 of the Treaty or from any other act of the 
Council pursuant to the Treaty shall be opened and administered in accordance with 
detailed rules adopted under the procedure laid down in Article 23." 
5. Article 13 paragraph 8 shall be replaced by the following text: 
"8. A corrective amount may be fixed in accordance with the procedure laid down in 
Article 23. However, the Commission may, where necessary, alter corrective 
amounts. 
The first subparagraph may be applied, in whole or in part, to products listed in 
Article 1(1 )(c) and (d) and to products listed in Article 1 and exported in the form of 
goods listed in Annex B." 
6. Article 16 shall be replaced by the following: 
5 Council Regulation of 27 July 1994 establishing a quota system in relation to the production of potato 
starch, OJ L 197 of 30.7.1994, p. 4, as last amended by Council Regulation (EC) No 1863/95, 
OJ L 179 of 29.7.1995, p. 1, corrected by OJ L 83 of 2.4.1995, p. 20 and OJ L 39 of 8.2.1997, p. 23.. 
26 
"Article 16 
1. Where the quotations or prices on the world market for one or more of the 
products listed in Article 1 reach a level which disrupts or threatens to disrupt the 
availability of supply on the Community market, and where that situation is likely to 
continue and to deteriorate, appropriate measures may be taken. 
2. Detailed rules for the application of this Article shall be adopted in accordance 
with the procedure laid down in Article 23." 
Article 2 
Council Regulation (EEC) No 2731/75 of 29 October 1975 fixing standard qualities for 
common wheat, rye, barley, maize and durum wheat6 shall hereby be repealed. 
Article 3 
This Regulation shall enter into force on the seventh day following its publication in the 
Official Journal of the European Communities. 
This Regulation shall apply from the 2000/2001 marketing year onwards. 
This Regulation shall be binding in its entirety and directly applicable in all Member 
States. 
Done at 
For the Council 
6 OJ L 281 of 1.11.1975, p. 22, as last amended by Council Regulation (EC) No 2594/97, OJ L 352 of 
23.12.1997, p. 10. 
27 
Proposal for a 
Council Regulation (EC) No 98/0108 (CNS) 
of... 
establishing a support system for producers of certain arable crops 
THE COUNCIL OF THE EUROPEAN UNION, 
Having regard to the Treaty establishing the European Community, and in particular 
Articles 42 and 43 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 the common agricultural policy aims to attain the objectives referred to in 
Article 39 of the Treaty, taking account of the market situation; 
Whereas, in order to ensure better market balance, a new scheme of support was 
introduced by Council Regulation (EEC) No 1765/92 of 30 June 1992 establishing a 
support system for producers of certain arable crops4; 
Whereas, after the 1992 reform of the common agricultural policy, there has been a 
particular improvement of market balances; 
Whereas set-aside under the support system for producers of certain arable crops, 
introduced in 1992 in addition to a lowering of the intervention price, has helped to keep 
production under control, while increased price competitiveness has allowed significant 
additional cereals quantities to be used on the domestic market, mainly for animal feed; 
1 OJC... 
2 OJ C... 
3 OJC... 
4 OJ L 181 of 1.7.1992, p. 12, as last amended by Regulation (EC) No 2309/97, OJ L 321 of 
22.11.1997, p. 3. 
28 
Whereas the support on the basis of the scheme introduced in 1992 should be continued, 
taking into account, however, market developments and experience acquired in applying 
the current scheme; 
Whereas the reform of the support scheme has to take into account the international 
obligations of the Community; 
Whereas the best way to achieve market balance is to approximate the Community prices 
of cereals to the prices on the world market and to provide for non-crop specific area 
payments; 
Whereas area payments should be revised if the market conditions differ from those 
currently foreseen; 
Whereas the area eligible should be restricted to the area down to arable crops or publicly 
funded set aside in the past; 
Whereas, when the sum of the areas for which payment is claimed under the scheme is in 
excess of the base area, a reduction of the eligible area per farm should be provided for in 
order to ensure market balance; 
Whereas area payments should reflect the specific structural characteristics that influence 
yield; whereas the drawing up of a régionalisation plan based on objective criteria should 
be left to the Member States; whereas uniform average yields should be established by 
the régionalisation plans; whereas these plans should be consistent with the average 
yields of each region achieved in a given period, taking into account any structural 
differences between production regions; whereas a specific procedure should be provided 
in order to examine these plans at Community level; 
Whereas differentiation of yields may be permitted for irrigated and non-irrigated areas 
provided that a separate base area for irrigated crops is established and there is no 
extension of the total base area; 
Whereas, in order to calculate the area payment, a basic amount per tonne should be 
multiplied by the average cereals yield determined for the region concerned; 
29 
Whereas a single area payment should be fixed for arable crops; whereas the basic 
amounts per tonne should be increased taking into account the reduction in the cereals 
intervention price; whereas crop specific payments for oilseeds and linseed should be 
abolished; whereas a specific aid should be established for protein crops in order to 
preserve their competitiveness with cereals; 
Whereas a special scheme for durum wheat should be established to ensure a durum 
wheat production level which is sufficient to supply user industries while keeping 
budgetary expenditure in check; whereas that objective should be achieved by 
introducing a supplement limited, for each Member State concerned, to a maximum area 
of durum wheat; whereas any overshoot of those areas should lead to an adjustment to the 
applications submitted; 
Whereas, moreover, in some Member States, the production of durum wheat is well 
established in regions outside traditional zones; whereas it is desirable to safeguard a 
certain level of production in those regions by the grant of special aid; 
Whereas, in order to benefit from the area payments, producers should set aside a 
predetermined percentage of their arable area; whereas the land set aside should be cared 
for so as to meet certain minimum environmental standards; whereas the areas set aside 
should also be eligible for use for non-food purposes, provided effective control systems 
can be applied; 
Whereas in the current market situation, the set-aside requirement should be fixed at 0%; 
whereas this percentage should be re-examined to take account of production and market 
developments; 
Whereas the set-aside obligation should be subject to due compensation; whereas the 
compensation should be equivalent to the area payments for arable crops other than 
protein crops; 
Whereas no set-aside requirement should be imposed for small producers whose claim 
for area payments is below a certain level; whereas this level should be fixed; 
Whereas for voluntary set-aside, basic conditions should be fixed at Community level; 
30 
Whereas area payments should be paid once a year for a given area; whereas areas not 
cultivated immediately before the entry into force of the scheme established by 
Regulation (EEC) No 1765/92 should not be eligible for payment; whereas to take 
account of certain specific situations where this provision is unduly restrictive certain 
derogations should be permitted, to be managed by the Member States; 
Whereas it is necessary to determine certain conditions for applying for area payments 
and to specify when producers should be paid; 
Whereas payment dates should be fixed in order to ensure an even distribution of arable 
crops sales during the marketing year; 
Whereas sowing dates should be adapted to natural conditions in the different production 
areas; 
Whereas expenditure incurred by the Member States as a result of the obligations arising 
out of the application of this Regulation should be financed by the Community in 
accordance with Articles 1 and 2 of Council Regulation (EC) No ... on the financing of 
the common agricultural policy5; 
Whereas it is necessary to provide for transitional measures and to enable the 
Commission to adopt, if necessary, additional transitional measures; 
Whereas the adaptations to the arable crops support system should be introduced as from 
the marketing year 2000/2001 ; 
Whereas, in view of the present adaptations to the current support scheme and to previous 
modifications, it is appropriate, for reasons of clarity , to replace Regulation (EEC) 
No 1765/92 by a new Regulation, 
HAS ADOPTED THIS REGULATION: 
OJ L... 
31 
Article 1 
1. This Regulation hereby establishes a system of area payments for producers of 
arable crops. 
2. For the purposes of this Regulation: 
- the marketing year shall run from 1 July to 30 June, 
- 'arable crops' are taken to mean those listed in Annex I. 
CHAPTER I 
Area payment 
Article 2 
1. Community producers of arable crops may apply for an area payment under the 
conditions set out in this Chapter. 
2. The area payment shall be fixed on a per hectare basis and regionally differentiated. 
The area payment shall be granted for the area which is down to arable crops or 
subject to set-aside in accordance with Article 6 and which does not exceed a 
regional base area. This is established as the average number of hectares within a 
region down to arable crops or where appropriate fallowed in conformity with a 
publicly funded scheme during 1989, 1990 and 1991. A region in this sense shall be 
understood to mean a Member State or a region within the Member State, at the 
option of the Member State concerned. 
3. Producers applying for the area payment shall be subject to an obligation to set aside 
part of the land of their holding from production and shall receive compensation for 
this obligation. 
4. When the sum of the areas for which payment is claimed under the arable 
producers' scheme, including the set-aside provided for under that scheme, is in 
excess of the base area, the eligible area per farmer shall be reduced proportionately 
for all the payments granted under this Chapter in the region in question during the 
same marketing year. 
32 
Areas which are not the subject of an application for payment under this Regulation 
but are used to support an application for aid under Regulation (EC) No [...] shall 
also be taken into account for the calculation of areas for which payment is claimed. 
Article 3 
1. For the purpose of setting average yields to be used for calculation of the area 
payment, each Member State shall establish a régionalisation plan setting out the 
relevant objective criteria for determination of the separate production regions in 
order to arrive at distinct homogeneous areas. 
With this in mind, Member States shall take due account of specific situations in 
drawing up their régionalisation plans. They may in particular adjust average yields 
in line with any structural differences between production regions. 
Member States may in their régionalisation plans set different yields for irrigated 
and non-irrigated land. In that case, Member States shall establish a separate base 
area for areas bearing irrigated crops. 
The irrigated base area shall be equal to the average area irrigated from 1989 to 
1991 with a view to harvesting arable crops including the increases made pursuant 
to Article 3 paragraph 1 fourth subparagraph last sentence of Regulation (EEC) 
No 1765/92. The establishment of the irrigated base area must not lead to any 
increase in the total base area of the Member State concerned. Should this base area 
be exceeded, Article 2(4) shall apply. 
The régionalisation plan shall in all cases ensure that the average yield of the 
Member State concerned established for the period and in accordance with the 
criteria referred to in paragraph 2 is respected. 
2. For each production region, the Member State shall give details of the areas and 
yields of arable crops produced in that region during the five year period 1986/87 to 
1990/91. Average cereals yields shall be separately calculated for each region by 
excluding the year with the highest and the year with the lowest yield during that 
period. 
33 
However, this obligation may be fulfilled in the case of Portuguese cereals by 
providing data having been supplied pursuant to Council Regulation (EEC) 
No 3653/90 of 11 December 1990 introducing transitional measures governing the 
common organisation of the market in cereals and rice in Portugal6 and in the case 
of the five new German Lander by providing the average crop yield applicable in the 
other German Lander. 
If a Member State decides to treat irrigated land separately from non-irrigated land, 
the corresponding average yield, which shall not be altered, shall be broken down 
between the two types. 
3. Member States shall submit their régionalisation plan to the Commission by 
1 August 1999 together with all necessary supporting information. In order to fulfil 
this obligation, they may refer to their régionalisation plan submitted to the 
Commission in accordance with Regulation (EEC) No 1765/92. 
4. The Commission shall examine the régionalisation plans submitted by the Member 
States and shall ensure that each plan is based on appropriate, objective criteria and 
is consistent with available historical information. The Commission may object to 
plans which are not compatible with the aforementioned relevant criteria in 
particular with the average yield of the Member State. In this case the plans shall be 
subject to adjustment by the Member State concerned after consultation with the 
Commission. 
5. The régionalisation plan may be revised by the Member State concerned at the 
request of the Commission or at the initiative of that Member State in accordance 
with the same procedure as outlined in paragraphs 1 to 4. 
6 OJ No L 362 of 27.12.1990, p. 28 
34 
6. Should a Member State, pursuant to paragraph 1, choose to establish production 
regions the demarcation of which does not correspond to that of regional base areas, 
it shall send the Commission a summary statement of payment applications and the 
yields pertaining to these. If it emerges from this information that, in a Member 
State, the average yield resulting from the régionalisation plan applied in 1993 or, in 
the case of the new Member States, the average yield resulting from the plan applied 
in 1995, is exceeded, all payments to be made in that Member State for the 
following marketing year shall be reduced in proportion to the overrun which has 
been recorded. However, this provision shall not apply where the quantity for which 
applications were made, expressed in tonnes of cereals, does not exceed that 
resulting from the product of the total base areas of the Member State by the 
aforementioned average yield. 
Member States may decide to ascertain whether there has been any exceeding of the 
average yield for each base area. In such cases, the provisions of this paragraph shall 
be applied to the payments to be paid in each base area concerned. 
Article 4 
1. The area payment is calculated by multiplying the basic amount per tonne by the 
average yield determined in the régionalisation plan for the region concerned. 
2. The basic amount per tonne is fixed at: 
- ECU 72.5 for protein crops and 
- ECU 66 for other arable crops. 
Article 5 
A supplement to the area payment of ECU 344.5 per hectare shall be paid for the area 
down to durum wheat in the traditional production zones listed in Annex II, subject to the 
limits fixed in Annex III. 
Should the total of the areas for which a supplement to the area payment is claimed be 
greater than the limit referred to above during the course of a marketing year, the area per 
producer for which the supplement may be paid shall be reduced proportionately. 
35 
However, subject to the limits per Member State laid down in Annex III, Member States 
may distribute the areas indicated in that Annex among the production zones as defined 
in Annex II, or, if necessary, the production regions referred to in Article 3, according to 
the extent of the production of durum wheat during the period 1993 to 1997. Where this 
is done, should the total of the areas within a region for which a supplement to the area 
payment is requested be greater than the corresponding regional limit during the course 
of a marketing year, the area per producer in that production region for which the 
supplement may be paid shall be reduced proportionately. The reduction shall be made 
when, within a Member State, the areas in regions which have not reached their regional 
limits have been distributed to regions in which those limits have been exceeded. 
In regions where the production of durum wheat is well established, other than those 
referred to in Annex II, special aid amounting to ECU 138.9 per hectare shall be granted 
up to a limit of the number of hectares laid down in Annex IV. 
Article 6 
1. The set-aside obligation for each producer applying for area payments shall be fixed 
as a proportion of his area down to arable crops and for which a claim is made, and 
left in set-aside pursuant to this Regulation. 
The set-aside obligation shall at present be 0%. 
2. Member States shall apply appropriate environmental measures which correspond to 
the specific situation of the land set aside. 
3. The land set aside may be used for the provision of materials for the manufacture 
within the Community of products not primarily intended for human or animal 
consumption, provided that effective control systems are applied. 
Member States are authorised to grant national aid to producers to help them to 
cover the costs of planting multiannual crops for biomass production. The aid may 
not, however, be more than the equivalent of the interest to be paid on a loan, 
repayable in five equal annual instalments, taken out for an amount not exceeding 
five years of area payments for the land in question. 
36 
4. The payment for set-aside obligation shall be calculated as the area payment 
according to Article 4 paragraphs 1 and 2, second indent. Where different yields are 
set for irrigated and non-irrigated land, those for non-irrigated land apply. In the 
case of Portugal, payment shall take account of the aid granted under Regulation 
(EEC) No 3653/90. 
5. Producers may be granted the set-aside payment on land set aside in excess of their 
obligation. In such cases, the area set aside may not exceed an area to be defined by 
Member States at rates taking into account specific situations and ensuring sufficient 
occupation of farmland. The area set aside should at least be 10% of the area down 
to arable crops and for which a payment application is made, and left in set-aside 
pursuant to this Regulation. The set-aside payment may be granted on a multiannual 
basis for a period up to five years. 
6. Producers who make a payment application for an area no bigger than the area 
which would be needed to produce 92 tonnes of cereals, on the basis of the yield 
determined for their region, are not bound by the set-aside obligation. 
Article 7 
Applications for payment Is may not be made in respect of land that on 31 December 
1991 was under permanent pasture, permanent crops or trees or was used for non-
agricultural purposes. 
Member States may, on terms to be determined, depart from these provisions under 
certain specific circumstances, in particular for areas subject to restructuring programmes 
or for areas subject to standard rotations of multi-annual arable crops with those crops 
listed in Annex I. In such cases, they shall take action to prevent any significant increase 
in the total eligible agricultural area. This may in particular involve deeming previously 
eligible areas ineligible as an offsetting measure. 
37 
Member States may also depart from the provisions of the first subparagraph under 
certain specific circumstances relating to one or other form of public intervention where 
such intervention results in a farmer growing crops on land previously regarded as 
ineligible in order to continue his normal agricultural activity and if the intervention in 
question means that land originally eligible ceases to be so with the result that the total 
amount of eligible land is not increased significantly. 
Moreover, Member States may, in certain cases not covered by the previous two 
subparagraphs, depart from the first subparagraph if they provide proof in a plan 
submitted to the Commission that the total amount of eligible land remains unchanged 
Article 8 
1. Payments shall be made between 1 January to 31 March following the harvest. 
2. In order to qualify for the area payment, a producer shall by 31 May preceding the 
relevant harvest have sown the seed and by 15 May have lodged an application. 
3. Member States shall take the necessary measures to remind applicants of the need to 
respect environmental legislation. 
Article 9 
Detailed rules for the application of this Chapter shall be adopted in accordance with the 
procedure laid down in Article 23 of Council Regulation (EEC) No 1766/927 and in 
particular: 
- those relating to the establishment and management of base areas, 
- those relating to the establishment of production régionalisation plans, 
- those relating to the granting of the area payment, 
7 OJ No L 181 of 1.7.1992, p. 21, as last amended by Regulation (EC) No 923/96 of 24.5.1996, p. 37 
38 
- those relating to the minimum area eligible for payment; such rules shall take 
particular account of the monitoring requirements and of the desired effectiveness of 
the scheme in question, 
- those determining, for durum wheat, the eligibility for the supplement to the area 
payment referred to in Article 5 and the eligibility requirements for the special aid 
referred to in that Article, and in particular determination of the regions to be taken 
into consideration, 
- those relating to set-aside, in particular those relating to Article 6 (3); these conditions 
may include the growing of products without compensation, 
- those relating to the conditions for applying Article 7; these conditions shall specify 
under what circumstances the provisions of Article 7 may be waived and Member 
States' obligation to refer envisaged action to the Commission for approval. 
According to the same procedure, the Commission may: 
- either make the granting of payments subject to the use of specific seeds, certified 
seeds in the case of durum wheat, certain varieties in the cases of oilseeds, durum 
wheat and linseeds or provide for the possibility for Member States to make the 
granting of payments subject to such conditions; 
- allow the dates in Article 8(2) to be varied in certain zones where exceptional climatic 
conditions render the normal dates inapplicable; 
- allow, subject to the budgetary situation, to authorise, in derogation from Article 8(1), 
payments prior to 1 January in certain regions, of up to 50 % of the area payments and 
of the payment for set-aside in years in which exceptional climatic conditions have so 
reduced yields that producers face severe financial difficulties. 
Article 10 
The measures defined in this Chapter shall be deemed to be intervention intended to 
stabilise agricultural markets within the meaning of Article [..] of Regulation (EC) 
No [...]. 
39 
Chapter II 
General and transitional provisions 
Article 11 
The amounts of the area payments and the payment for set-aside as well as the percentage 
area to be set aside fixed in this Regulation may be changed in the light of developments 
in production, productivity and the markets, according to the procedure laid down in 
Article 43(2) of the Treaty. 
Article 12 
Should specific measures be necessary to facilitate the transition from the system in force 
to that established by this Regulation, such measures shall be adopted in accordance with 
the procedure laid down in Article 23 of Regulation (EEC) No 1766/92. 
Article 13 
Regulation (EEC) No 1765/92 is hereby repealed. 
Article 14 
1. This Regulation shall enter into force on the seventh day following its publication in 
the Official Journal of the European Communities. 
2. This Regulation shall apply from the 2000/ 2001 marketing year onwards. 
3. Regulation (EEC) No 1765/92 shall continue to be applied in relation to the 
1999/2000 marketing year. 
This Regulation shall be binding in its entirety and directly applicable in all Member 
States. 
Done at 
For the Council 
40 
Annex I 
Definition of products 
CN Code Description 
I. CEREALS 
100110 00 Durum wheat 
1001 90 Other wheat and meslin other than durum wheat 
1002 00 00 Rye 
1003 00 Barley 
1004 00 00 Oats 
1005 Maize 
1007 00 Grain sorghum 
1008 Buckwheat, millet and canary seed; other cereals 
0709 90 60 Sweet corn 
II. OILSEEDS 
120100 Soyabeans 
ex 1205 00 Rape seed 
ex 1206 00 10 Sunflower seed 
III. PROTEIN CROPS 
0713 10 Peas 
0713 50 Field beans 
1209 29 50 Sweet lupins 
IV. FLAX 
other than fibre flax 
ex 1204 00 Linseed 
(Linum usitatissimum L.) 
41 
Annex II 
Traditional production zones for durum wheat 
GREECE 
Nomoi (prefectures) of the following regions 
Central Greece 
Péloponnèse 
Ionian Islands 
Thessaly 
Macedonia 
Aegean Islands 
Thrace AUSTRIA 
Pannonia 
SPAIN 
Provinces 
Almeria 
Badajoz 
Burgos 
Cadiz 
Cordoba 
Granada 
Huelva 
Jaén 
Malaga 
Navarra 
Salamanca 
Seville 
Toledo 
Zamora 
Zaragoza FRANCE 
Regions 
Midi-Pyrénées 
Provence-Alpes-Côte d'Azur 
Languedoc-Roussillon 
Departments* 
Ardèche 
Drôme 
ITALY 
Regions 
Abruzzo 
Basilicata 
Calabria 
Campania 
Latium 
Marches 
Molise 
Umbria 
Apulia 
Sardinia 
Sicily 
Tuscany PORTUGAL 
Districts 
Santarém 
Lisbon 
Setùbal 
Portalegre 
Évora 
Beja 
Faro 
Each of these departments may be linked to one of the above mentioned regions. 
42 
Annex III 
Maximum guaranteed areas in receipt of the supplement to the area payment for 
durum wheat 
(hectares) 
Greece 617 000 
Spain 594 000 
France 208 000 
Italy 1 646 000 
Austria 7 000 
Portugal 59 000 
Annex IV 
Maximum guaranteed areas in receipt of the special aid for durum wheat 
(hectares) 
Germany 10 000 
Spain 4 000 
France 50 000 
Italy 4 000 
United Kingdom 5 000 
43 
Proposal for a 
COUNCIL REGULATION (EC) NO ...../98 98/0109 (CNS) 
of 199. 
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 Articles 42 and 43 
thereof; 
Having regard to the proposal from the Commission1; 
Having regard to the opinion of the European Parliament2; 
(1) Whereas the operation and development of the common market in agricultural products should be 
accompanied by the establishment of a common agricultural policy to include in particular a 
Common organisation of agricultural markets which may take various forms depending on the 
product; 
(2) Whereas the aim of the common agricultural policy is to attain the objectives set out in Article 39 of 
the Treaty; whereas, in the beef and veal sector, in order to stabilise markets and to ensure a fair 
standard of living for the agricultural community, provision should be made for internal market 
measures comprising, in particular, direct payments to beef producers-and a private storage aid 
scheme; 
(3) Whereas, in order to rebalance meat consumption in the Community to the benefit of beef sector and 
to improve the competitivity of these products on the international markets, the level of market 
support should be gradually reduced; whereas, given the consequences for producers, the level of 
income aid provided for under the common market organisation should be adapted and reshaped; 
whereas, to that end, it is appropriate to establish a comprehensive scheme of direct payments for 
producers; whereas the amounts of these payments should develop in parallel with the gradual 
reduction of market support; 
(4) Whereas, given the variety of stockfarming enterprises, direct payments should include a special 
premium for producers of bulls and steers, a premium for maintaining suckler cow herds and a dairy 
cow premium; whereas the granting of the premiums should not be reflected by an increase in 
overall production; whereas, to that end, the number of male bovine animals and suckler cows 
eligible for premiums should be limited by applying respectively regional and individual ceilings 
and, in the case of the special premium, a headage limit per holding; whereas, as regards the dairy 
cow premium, an equivalent limitation follows the individual reference quantities of the producers 
concerned which serve as the basic reference for calculating the level of support; whereas as regards 
the regional ceiling for the special premium, the existing level should be maintained; 
(5) Whereas the conditions of steer production usually differ from those of bull production; whereas it 
is therefore justified to set the special premium for steers at a different level per animal than for 
bulls; whereas, however, the special premium for steers should be split into two payments for 
specific age brackets; 
(6) Whereas slaughtering too great a number of steers during the slaughtering season in Member States 
where this type of production is particularly important, could disturb the stability of the market and, 
in particular, lead to a fall in market prices; whereas to encourage the slaughter of steers outside the 
annual "off grass" period, an additional premium should be granted, subject to certain conditions, in 
l 
2 
; 44 
addition to the special premium for animals slaughtered out of season during the first twenty three 
weeks of the year; 
(7) Whereas, in order to give more flexibility to producers, eligibility for suckler cow premium should 
be extended to heifers meeting the same breeding requirements as suckler cows; whereas, however, 
the number of eligible heifers in suckler cow herds should be limited to the normal ratio of 
replacement; 
(8) Whereas the suckler cow premium should primarily be restricted to producers who do not supply 
milk to dairies under the additional levy scheme provided for by Council Regulation (EEC) No 
3950/92 of 28 December 1992, establishing an additional levy in the milk and milk products sector3; 
whereas, however, income support is also needed in the case of small and medium-sized holdings 
with a dairy herd and a suckler cow herd; whereas suckler cow premium should therefore also be 
granted for those mixed holdings with a total individual milk reference quantity of not more than 
120 000 kilograms; 
(9) Whereas, as regards the suckler cow premium, it is appropriate to maintain individual ceilings for 
producers; whereas some of the premium rights conferred by the individual ceilings have not been 
used in the past; whereas these unused rights would be likely to encourage production and increase 
expenditure, in particular, as a consequence of heifers becoming fully eligible for suckler cow 
premium; whereas to avoid such an effect, the total number of suckler cow premium rights of each 
Member State should be fixed on the basis of the premium payments actually made in respect of 
historical reference years, increased by a certain margin for maintaining the national reserve; 
whereas Member States should take the necessary measures to ensure the respect of their national 
ceilings; whereas, if necessary, they should adjust the individual ceilings of their producers without 
compensation according to certain objective criteria; whereas these criteria should ensure, in 
particular, equal treatment of the producers concerned and the protection of legitimate expectations; 
(10) Whereas a producer's level of production may vary because of changes in stock or production 
capacity; whereas it is therefore advisable to provide for the possibility of transferring suckler cow 
premium rights acquired in respect of individual ceilings to other producers, under certain 
conditions, either together with the holding or without retaining the link between premium rights 
and land farmed; 
(11) Whereas new producers and existing producers whose individual ceilings do not correspond, for 
various reasons, to changed circumstances of their suckler cow herds should not be excluded from 
rights to premium; whereas provision should therefore be made to operate national reserves to be 
stocked and administered in accordance with Community criteria; whereas, for the same reason, it is 
appropriate to subject the transfer of rights to premium without the transfer of the associated holding 
to rules whereby part of the rights transferred shall be withdrawn without compensatory payment 
and allocated to that national reserve; 
OJ No L 405, 31.12.1992, p. 1. Regulation as last amended by Commission Regulation (EC) No 
614/97 of 8.4.1997 OJNo L 94 , 9.4.1997, p. 4.; 
45 
(12) Whereas it is opportune to allow Member States to establish a link between sensitive zones or 
localities and the production of suckler cows so as to ensure the maintainance of such production 
especially in areas where there is no other alternative; 
(13) Whereas, given the trend towards intensification of beef and veal production, premiums for 
stockfarming should be limited with regard to the forage capacity of each holding in relation to the 
numbers and species of animals held; whereas, to avoid excessively intensive types of production, 
the grant of such premiums should be subject to compliance with a maximum stocking density on 
the holding; whereas, however, the situation of small producers should be taken into consideration; 
(14) Whereas, to strengthen incentives to extensify production with a view to improving their 
effectiveness in relation to environmental objectives, an additional amount should be granted to 
producers who comply with severe and genuine stocking density requirements; whereas, to avoid a 
major change in the global level of support and ensure reasonable control of expenditure, provision 
should be made for adjusting the additional amount, if necessary; 
(15) Whereas, as a consequence of reduced market support in the beef and veal sector, there should also 
be income support for milk producers in the form of a dairy cow premium; whereas this support 
should be granted on the basis of the individual reference quantities of the producers concerned and 
the national average milk yield in the Member State where their holdings are located; whereas, for 
reasons of simplification, the dairy cow premium should be managed and granted together with the 
corresponding income support for dairy cows under the common market organisation for milk and 
milk products; whereas this support takes account of the average milk yield in the Community; 
whereas, to that end, the amounts of dairy cow premium per Member State need to be calculated 
taking into account the difference between the average milk yield in the Community and that in the 
Member State concerned; 
(16) Whereas the conditions for beef production and the income situation of producers significantly 
varies in different production areas of the Community; whereas a Community-wide scheme with 
uniform payments to all producers would be too rigid to respond adequately to the structural and 
natural disparities and the diverse needs resulting therefrom; whereas, therefore, it is appropriate to 
provide for a flexible framework of additional Community payments to be determined and made by 
Member States within fixed global amounts and in accordance with certain common criteria; 
whereas the global amounts should be allocated to the Member States on the basis of their share in 
Community beef production; whereas the common criteria are intended, inter alia, to prevent 
additional payments from producing discriminatory effects and to take full account of the relevant 
multilateral commitments of the Community; whereas, in particular, it is essential that Member 
States be obliged to use their discretionary powers exclusively on the basis of objective criteria, to 
pay full regard to the concept of equal treatment and to avoid market and competition distortions; 
whereas it is appropriate to provide for the forms that additional payments may take; whereas these 
forms should be headage payments for certain categories of bovine animals and area payments; 
(17) Whereas, as regards additional headage payments, certain quantitative limits are required to ensure a 
reasonable level of production control; whereas it is also necessary to limit the total amount of 
support which may be granted per animal and, where applicable, per year; whereas, moreover, the 
concept of applying stocking density requirements should be followed by Member States; 
(18) Whereas additional area payments should only be granted for permanent pasture which does not 
benefit from other Community market support measures; whereas area payments should be applied 
within the limits of regional base areas of permanent pasture which should be established by 
Member States according to historical reference data; whereas the maximum amount of area 
payments which may be granted per hectare, including additional area payments under the common 
market organisation for milk and milk products, should be comparable the average support per 
hectare under the support system for producers of certain arable crops; 
46 
(19) Whereas direct payments should be subject to compliance by the keepers of the animals concerned 
with the relevant Community rules on identification and registration of bovine animals; whereas, in 
order to achieve the desired economic impact, direct payments must be granted within certain time 
limits; 
(20) Whereas me use of certain substances in beef production is prohibited under Community law; 
whereas appropriate penalties should apply where the relevant provisions are not respected; 
(21) Whereas under the price and income support arrangements provided for in this Regulation, public 
intervention in the form of buying-in by intervention agencies and public storage is no longer 
indispensible to balance the market but would cause considerable expenditure; whereas it should, 
therefore, be phased out gradually; whereas, however, in order to contribute to stabilising the market 
prices around the basic price which represents the desired market support level, aid for private 
storage should be provided for; whereas, to that end, the Commission should be authorised to decide 
the grant of private storage aid when the market price falls below 103% of the basic price; whereas 
provision should be made for the private storage aid scheme to be implemented on the basis of the 
grading scale laid down in Council Regulation (EEC) No 1208/81 of 28 April 1981 determining the 
Community scale for the classification of carcases of adult bovine animals4; 
(22) Whereas the creation of a single Community market for beef and veal involves the introduction of a 
single trading system at the external frontiers of the Community; whereas a trading system including 
import duties and export refunds, in addition to the internal market measures, should, in principle, 
stabilise the Community market; whereas the trading system should be based on the undertakings 
accepted under the Uruguay Round of multilateral trade negotiations; 
(23) Whereas, in order to monitor the volume of trade in beef with third countries, provision should be 
made for a system of import and export licences for certain products, which includes the lodging of 
a security to guarantee that the transactions for which such licences are granted are effected; 
(24) Whereas in order to prevent or counteract adverse effects on the Community market which could 
result from imports of certain agricultural products, imports of one or more such products should be 
subject to payment of an additional import duty, if certain conditions are fulfilled; 
(25) Whereas it is appropriate, under certain conditions, to confer on the Commission the power to open 
and administer tariff quotas resulting from international agreements concluded in accordance with 
the Treaty or from other acts of the Council; 
(26) Whereas provisions for granting a refund on exports to third countries, based on the difference 
between prices within the Community and on the world market, and falling within the WTO 
Agreement on Agriculture5, should serve to safeguard Community participation in international 
trade in beef and veal; whereas these refunds should be subject to limits in terms of quantity and 
value; 
(27) Whereas compliance with the limits in terms of value should be ensured at the time when refunds 
are fixed through the monitoring of payments under the rules relating to the European Agricultural 
Guidance and Guarantee Fund; whereas monitoring can be facilitated by the compulsory advance 
fixing of refunds, while allowing the possibility, in the case of differentiated refunds, of changing 
the specified destination within a geographical area to which a single refund rate applies; whereas, 
in the case of a change of destination, the refund applicable to the actual destination should be paid, 
with a ceiling of the amount applicable to the destination fixed in advance; 
(28) Whereas ensuring compliance with the quantity limits calls for the introduction of a reliable and 
effective system of monitoring; whereas, to that end, the granting of refunds should be made subject 
to an export licence; whereas refunds should be granted up to the limits available, depending on the 
particular situation of each product concerned; whereas exceptions to that rule should only be 
OJ No L 123, 7.5.1981, p. 3. Regulation as last amended by Council Regulation No 1026/91 (OJ 
No L 106, 26.4.1991, p. 2). 
5 OJNoL336, 23.12.1994, p. 22. 
47 
permitted in the case of food-aid operations, which are exempt from any limit; whereas monitoring 
of the quantities exported with refunds during the marketing years as referred to in the WTO 
Agreement on Agriculture should be carried out on the basis of export licences issued for each 
marketing year 
(29) Whereas, in addition to the system described above, and to the extent necessary for its proper 
working, provision should be made for regulating or, when the situation on the market so requires, 
prohibiting the use of inward processing arrangements; 
(30) Whereas the customs duty system makes it possible to dispense with all other protective measures at 
the external frontiers of the Community; whereas, however, the internal market and duty mechanism 
could, in exceptional circumstances, prove defective; whereas, in such cases, so as not to leave the 
Community market without defence against disturbances which may arise therefrom, the 
Community should be able to take all necessary measures without delay; whereas those measures 
should be in accordance with the obligations derived from the relevant WTO agreements; 
(31) Whereas, in order to ensure proper application of the instruments provided for in this Regulation, 
the Commission should be fully informed about the development of prices on the common market 
for beef and veal; whereas, therefore, provision should be made for a system for recording the prices 
of adult bovine animals and meat of such animals; 
(32) Whereas it is appropriate to provide for measures to be taken when a substantial rise or fall in prices 
disturbs or threatens to disturb the Community market; 
(33) Whereas restrictions on free movement resulting from the application of measures intended to 
prevent the spread of animal diseases could cause difficulties on the market of one or more Member 
States; whereas provision should be made for the introduction of exceptional market support 
measures in order to remedy such situations; 
(34) Whereas the establishment of a single market would be jeopardized by the granting of certain aids; 
whereas, therefore, the provisions of the Treaty which allow the assessment of aids granted by 
Member States and the prohibition of those which are incompatible with the common market should 
apply in the common market organisation for beef and veal; 
(35) Whereas it is necessary that, as the common market in beef and veal develops, the Member States 
and the Commission should keep each other supplied with the information necessary for applying 
this Regulation; 
(36) Whereas, in order to facilitate implementation of the proposed measures, a procedure should be 
provided for establishing close co-operation between Member States and the Commission within a 
Management Committee; 
(37) Whereas expenditure incurred by the Member States as a result of the obligations arising out of the 
application of this Regulation should be financed by the Community in accordance with Council 
Regulation (EC) No / of 6 on the financing of the common agricultural policy; 
(38) Whereas the common organisation of the market in beef and veal should take appropriate account, at 
the same time, of the objectives set out in Articles 39 and 110 of the Treaty; 
OJNoL 
48 
(39) Whereas the common organization of the market in beef and veal laid down in Council Regulation 
(EEC) No 805/68 has been amended several times; whereas, by reason of their number, their 
complexity and their dispersal among several Official Journals, these texts are difficult to use and 
thus lack the clarity which should be an essential feature of all legislation; whereas, under these 
circumstances, they should be consolidated in a new regulation and the aforementioned Regulation 
(EEC) No 805/68 should be repealed; whereas Council Regulation (EEC) No 1892/87 of 2 July 
1987 on the recording of market prices in the beef and veal sector8, whose legal base was Regulation 
(EEC) No 805/68, is replaced by a new provision in this regulation and should therefore be 
repealed; 
(40) Whereas the change from the arrangements in Regulation (EEC) No 805/68 to those in this 
Regulation could give rise to difficulties which are not dealt with in this Regulation; whereas, in 
order to deal with that eventuality, provision should be made for the Commission to adopt the 
necessary transitional measures; whereas the the Commission should also be authorized to solve 
specific practical problems; 
HAS ADOPTED THIS REGULATION: 
Article 1 
1. The common organization of the market in beef and veal shall comprise an internal market and trade 
with third countries system and cover the following products: 
CNCode Description of goods 
(a) 0102 90 05 to Live animals of the domestic bovine species, other than pure-bred breeding 
0102 90 79 animals 
0201 Meat of bovine animals, fresh or chilled 
0202 Meat of bovine animals, frozen 
0206 10 95 Thick skirt and thin skirt, fresh or chilled 
0206 29 91 Thick skirt and thin skirt, frozen 
0210 20 Meat of bovine animals, salted, in brine, dried or smoked 
0210 90 41 Thick skirt and thin skirt, salted, in brine, dried or smoked 
0210 90 90 Edible flours and meals of meat or meat offal 
1602 50 10 Other prepared or preserved meat or meat offal of bovine animals, un cooked; 
mixtures of cooked meat or offal and uncooked meat or offal 
1602 90 61 Other prepared or preserved meat containing bovine meat or offal, un cooked; 
mixtures of cooked meat or offal and uncooked meat or offal 
(b) 010210 Live bovine pure-bred animals 
0206 10 91 Edible offal of bovine animals excluding thick skirt and thin skirt, fresh or 
chilled, 
OJ No L 148,28.6.1968, p. 24. Regulation as last amended by Regulation (EC) No 2634/97 (OJ 
NoL 356, 31.12.1997, p. 13). 
8 OJ No LI 82, 3.7.1987, p. 29. 
49 
0206 10 99 other than for the manufacture of pharmaceutical products 
0206 21 00 Edible offal of bovine animals excluding thick skirt and thin skirt, frozen, 
other 
0206 22 90 than for the manufacture of pharmaceutical products 
0206 29 99 
0210 90 49 Edible meat offal of bovine animals, salted, in brine, dried or smoked, other 
than thick skirt and thin skirt 
ex 1502 00 90 Fats of bovine animals, raw or rendered, whether or not pressed or solvent-
extracted 
1602 50 31 to Other prepared or preserved meat or meat offal, of bovine animals, other than 
1602 50 80 uncooked meat or meat offal and mixtures of cooked meat or offal and un 
cooked meat or offal 
1602 90 69 Other prepared or preserved meat containing bovine meat or offal other than 
uncooked, and mixtures of cooked meat or offal and uncooked meat or offal 
2. For the purposes of this Regulation: 
(a) "bovine animals" shall mean live animals of the domestic bovine species other than pure-bred 
breeding animals falling within subheadings 0102 90 05 to 0102 90 79 of the combined 
nomenclature; 
(b) " adult bovine animals" shall mean bovine animals the live weight of which is more than 300 
kilograms. 
CHAPTER I 
Internal Market 
Article 2 
In order to encourage action by trade and joint trade organisations to facilitate the adjustment of supply to 
market requirements, the following Community measures may be taken in respect of the products listed in 
Article 1 : 
(a) measures to improve stock breeding; 
(b) measures to promote better organisation of production, processing and marketing; 
(c) measures to improve quality; 
(d) measures to permit the establishment of short- and long-term forecasts on the basis of the means of pro­
duction used; 
(e) measures to facilitate the recording of market price trends. 
General rules concerning these measures shall be adopted by the Council in accordance with the procedure 
laid down in Article 43 (2) of the Treaty. 
50 
Title 1 - Direct payments 
Article 3 
For the purposes of this title: 
(a) "producer" shall mean an individual farmer, whether a natural or a legal person or group of natural or 
legal persons, irrespective of the legal status conferred by national law on such a group or its members, 
whose holding is located in Community territory and who is engaged in rearing bovine animals, 
(b) "holding" shall mean all the production units managed by the producer and located in the territory of a 
single Member State; 
(c) "region" shall mean a Member State or a region within a Member State, at the option of the Member 
State concerned; 
(d) "bull" shall mean an uncastrated male bovine animal; 
(e) "steer" shall mean a castrated male bovine animal; 
(f) "suckler cow" shall mean a cow belonging to a meat breed or born of a cross with a meat breed, and 
belonging to a herd intended for rearing calves for meat production; 
(g) "heifer" shall mean a female bovine animal of more than 8 months which has not yet calved, belonging 
to a meat breed or born of a cross with a meat breed, and belonging to a herd intended for rearing calves 
for meat production ; 
(h) "permanent pasture" shall mean non-rotational land used for grass production (sown or natural) on a 
permanent basis (five years or longer). 
Section 1 - Premiums 
Sub-section 1 - Special premium 
Article 4 
1. A producer holding male bovine animals on his holding may qualify, on application, for a special 
premium. It shall be granted in the form of an annual premium per calendar year and per holding within 
the limits of regional ceilings for not more than 90 animals for each of the age brackets referred to in 
paragraph 2. 
2. The special premium shall be granted no more than: 
(a) once in the life of each bull from the age of 10 months; or 
(b) twice in the life of each steer: 
- the first time at the age of 10 months, 
- the second time after it has reached the age of 22 months. 
51 
3. To qualify for the special premium: 
(a) any animal covered by an application shall be held by the producer for fattening for a period to be 
determined, 
(b) each animal shall be covered until slaughter by an animal passport referred to in Article 6 of 
Regulation (EC) No 820/97 containing all relevant information on its premium status or, if not 
available, an equivalent administrative document 
4. When in a given region the total number of bulls from the age of 10 months and of steers from 10 
months to 22 months of age, for which an application has been made and which satisfy the conditions 
for granting the special premium exceeds the regional ceiling referred to in Annex I, the number of all 
eligible animals under paragraph 2 (a) and (b) per producer for the year in question shall be reduced 
proportionately. 
Within the meaning of this Article, "regional ceiling" shall mean the number of animals entitled to 
benefit, in a region and per calendar year, from the special premium. 
5. Member States may decide to grant the special premium at the time of slaughter. In this case, for bulls 
the age criterion referred to in paragraph 2 (a) shall be replaced by a minimum weight of 200 
kilogrammes. 
The premium shall be paid or passed back to the producers. 
The United Kingdom shall be authorized to apply in Northern Ireland a system for granting the special 
premium which differs from that applied in the remainder of its territory. 
6. The amount of the premium shall be: 
(a) per eligible bull: 
- ECU 165 for the calendar year 2000, 
- ECU 195 for the calendar year 2001, 
- ECU 220 for the calendar year 2002 and the subsequent calendar years; 
(b) per eligible steer and age bracket: 
- ECU 130 for the calendar year 2000, 
- ECU 150 for the calendar year 2001, 
- ECU 170 for the calendar year 2002 and the subsequent calendar years. 
7. Detailed rules for the application of this Article shall be adopted by the Commission in accordance with 
the procedure laid down in Article 39. 
52 
Sub-section 2- Deseasonalisation premium 
Article 5 
1. Where, in a Member State the number of steers: 
(a) slaughtered in a given year exceeds 60% of total annual slaughterings of male bovine arimals, and 
(b) slaughtered during the period 1 September to 30 November in a given year exceeds 35% of total 
annual slaughterings of steers, 
producers may qualify, on application, for an additional premium to the special premium 
(deseasonalization premium). However, if both triggering rates referred to above are reached in Ireland 
or in Northern Ireland, the premium shall apply in Ireland and in Northern Ireland. 
For the purpose of applying this Article in the United Kingdom, Northern Ireland shall be regarded as a 
separate entity. 
2. The amount of this premium shall be set at: 
- ECU 72.45 per animal slaughtered during the first 15 weeks in a given year, 
- ECU 54.34 per animal slaughtered during the 16th and 17th weeks in a given year, 
- ECU 36.23 per animal slaughtered during the 18th to the 21st week in a given year, and 
- ECU 18.11 per animal slaughtered during the 22nd and 23rd weeks in a given year. 
3. Where the rate referred to in paragraph 1 (b) is not achieved, Member States whose producers have 
previously received the deseasonalization premium may decide to grant this premium at the rate of 60 % 
of the amounts set in paragraph 2. 
In such case, the Member State concerned shall ensure the measure is financially neutral in respect of 
the same budget year by accordingly reducing: 
- the amount of the second age bracket of the special premium applicable to steers granted in that 
Member State, and/or 
- the additional payments to be made under section 2, 
and shall inform the Commission of the reduction measure applied. 
For the purpose of applying this measure, Ireland and Northern Ireland shall be regarded as one entity 
for the calculation of the rate referred to in paragraph 1 (b) and consequently for qualification for the 
premium. 
4. In order to establish whether the percentages referred to in this Article have been exceeded, account 
shall be taken of slaughterings carried out during the second year preceding that in which the animal 
qualifying for the premium was slaughtered. 
5. Detailed rules for the application of this Article shall be adopted by the Commission in accordance with 
the procedure laid down in Article 39. 
53 
Sub-section 3 - Suckler cow premium 
Article 6 
1. A producer keeping suckler cows on his holding may qualify, on application, for a premium for 
maintaining suckler cows (suckler cow premium). It shall be granted in the form of an annual premium 
per calender year and per holding within the limits of individual ceilings. 
2. The suckler cow premium shall be granted to any producer: 
(a) not supplying milk or milk products from his farm for twelve months from the day on which the 
application is lodged.. 
The supply of milk or milk products directly from the holding to the consumer shall not, however, 
prevent grant of the premium. 
(b) supplying milk or milk products whose total individual reference quantity as referred to in Article 4 
of Regulation (EEC) No 3950/92 does not exceed 120 000 kilograms. 
provided that he keeps, for at least six consecutive months from the day on which the application is 
lodged a number of suckler cows at least equal to 80% and of heifers at most equal to 20% of the 
number for which the premium was requested. 
For the purposes of determining the number of eligible animals under points (a) and (b) of the first 
subparagraph, whether cows belong to a suckler herd or to a dairy herd shall be established on the basis 
of the beneficiary's individual reference quantity as defined in Article 15 (3) of Council Regulation (EC) 
No 9 [milk] and the average milk yield in the Member State where the holding is located. 
3. The producers' entitlement to the premium shall be limited by the application of an individual ceiling as 
defined in Article 7. 
4. Per eligible animal, the amount of the premium shall be: 
- ECU 155 for the calendar year 2000, 
- ECU 170 for the calendar year 2001, 
- ECU 180 for the calendar year 2002 and the subsequent calendar years. 
5. Detailed rules for the application of this Article and, in particular, those relating to the definition of the 
concept of suckler cow referred to in Article 3, shall be adopted by the Commission in accordance with 
the procedure laid down in Article 39. 
OJNo 
54 
Article 7 
1. On 1 January 2000, the individual ceiling of each producer shall be equal to the number of suckler cow 
premium rights (premium rights) which he held on 31 December 1999 according to the relevant 
Community rules and, where appropriate, adjusted according to paragraph 3. 
2. Member States shall take the neceesary steps to ensure that, from \ January 2000, the sum of premium 
rights on their territory does not exceed the national ceilings set out in Annex II and that the national 
reserves referred to in Article 9 may be set up. 
3. Where the adjustment referred to in paragraph 2 requires a reduction of individual ceilings held by 
producers, it shall be carried out without compensatory payment and decided on the basis of objective 
criteria, including, in particular: 
- the rate at which producers have used their individual ceilings during the three reference years prior to 
the year 2000, 
- the implementation of an investment or extensification programme in the beef and veal sector, 
- particular natural circumstances or the application of penalties, resulting in a non-payment or a 
reduced payment of the premium for at least one reference year, 
- additional exceptional circumstances having the effect that the payments made for at least one 
reference year do not correspond to the actual situation as established during the previous years. 
4. Premium rights which have been withdrawn pursuant to the measure provided for in paragraph 2 shall 
be abolished. 
5. Detailed rules for the application of this Article shall be adopted by the Commission in accordance with 
the procedure laid down in Article 39. 
Article 8 
1. Where a producer sells or otherwise transfers his holding, he may transfer all his suckler cow premium 
rights to the person taking over his holding. He may also transfer, in full or in part, his rights to other 
producers without transferring his holding. 
In the case of transfer of premium rights without transfer of the holding a part of the transferred rights, 
which shall not exceed 15 %, shall be returned without compensatory payment to the national reserve of 
the Member State where the holding is situated for redistribution free of charge. 
2. The Member States: 
(a) shall take the necessary measures to prevent premium rights being transferred outside sensitive areas 
or regions where beef and veal production is particularly important for the local economy; 
(b) may provide either that the transfer of rights without transfer of the holding is carried out directly 
between producers or that it is carried out through the intermediary of the national reserve. 
3. Member States may authorize, before a date to be determined, temporary transfers of part of the 
premium rights which are not intended to be used by the producer who holds them. 
4. Detailed rules for the application of this Article shall be adopted by the Commission in accordance with 
the procedure laid down in Article 39. 
55 
These detailed rules may concern in particular: 
- provisions enabling the Member States to resolve problems relating to the transfer of premium rights 
by producers who are not the owners of the land occupied by their holdings, and, 
- specific rules relating to the minimum number which may form the subject of a partial transfer. 
Article 9 
1. Each Member State shall maintain a national reserve of suckler cow premium rights. 
2. Any premium rights withdrawn pursuant to Article 8 (I) or other Community provisions shall be added 
to the national reserve, without prejudice to Article 7 (4). 
3. The Member States shall use their national reserves for allocating, within the limits of those reserves, 
premium rights in particular to newcomers, young farmers and other priority producers. 
4. Detailed rules for the application of this Article shall be adopted by the Commission in accordance with 
the procedure laid down in Article 39. These rules shall concern, in particular: 
- the measures applicable where, in a Member State, the national reserve is not used, 
- the measures relating to unused premium rights which have been returned to the national reserve. 
Sub-section 4 - Stocking density 
Article 10 
1. The total number of animals qualifying for the special premium and the suckler cow premium shall be 
limited by the application of a stocking density on the holding of 2 LU per hectare and calendar year. 
This stocking density shall be expressed in livestock units (LU) per unit of forage area of the holding 
used for the animals carried on it. However, a producer shall be exempt from the application of the 
stocking density if the number of animals held on his holding and to be taken into account for 
determining the stocking density is not more than 15 LU. 
2. For determining the stocking density on the holding, account shall be taken of: 
(a) the male bovine animals, suckler cows and heifers, sheep and/or goats for which premium 
applications have been submitted, as well as the dairy cows needed to produce the total reference 
quantity of milk allocated to the producer. The number of animals shall be converted to LU by 
reference to the conversion table in Annex III. 
(b) the forage area, meaning the area of the holding available throughout the calendar year for rearing 
bovine animals and sheep and/or goats. The forage area shall not include: 
- buildings, woods, ponds, paths, 
- areas used for other crops eligible for Community aid or for permanent crops or horticultural 
crops, except permanent pasture for which area payments are granted pursuant to Article 15 of 
this Regulation and Art. 18 of Regulation (EC) No [milk] 
- areas qualifying for the support system laid down for the producers of certain arable crops, used 
for the aid scheme for dried fodder or subject to a national or Community set-aside scheme. 
56 
Forage area shall include areas in shared use and areas which are subject to mixed cultivation. 
3. The Commission shall adopt detailed rules for the application of this Article in accordance with the 
procedure laid down in Article 39. These rules shall, in particular, concern those: 
- relating to areas in shared use and to areas which are subject to mixed cultivation, 
- enabling improper application of the stocking density to be pcvented. 
Sub-section 5 - Extensiflcation payment 
Article 11 
1. Producers receiving the special premium and/or the suckler cow premium may qualify for an additional 
payment of ECU 100 per premium granted provided that during the calendar year concerned: 
- the stocking density on their holdings is less than 1,4 LU per hectare, 
- their animals are actually grazed on pasture land during the growing season. 
2. For the purposes of this Article: 
- by derogation from Article 10 (2) (a), the stocking density of the holding shall be determined taking 
account of the male bovine animals, suckler cows, dairy cows and heifers present thereon during the 
calendar year concerned, as well as of the sheep and/or goats for which premium applications have 
been submitted for the same calendar year. The number of animals shall be converted to LU by 
reference to the conversion table in Annex III. 
- by derogation from Article 10 (2) (b), only the temporary and permanent pasture of the holding 
available throughout the calendar year for rearing bovine animals and sheep and/or goats shall be 
taken as "forage area". 
3. In accordance with the procedure laid down in Article 39 the Commission shall: 
- adopt detailed rules for the application of this Article, 
- if necessary, adjust the amount set out in paragraph 1 taking account, in particular, of the number of 
animals qualifying for the payment for the preceding calendar year, 
Sub-section 6 - Dairy cow premium 
Article 12 
1. The amount per dairy cow premium unit set out in Article 15 (2) of Regulation (EC) No [dairy] 
shall be supplemented by the amounts per premium unit set out in Annex IV 
2. Detailed rules for the application of this Article shall be adopted by the Commission in accordance with 
the procedure laid down in Article 39. 
57 
Section 2 - Additional payments 
Article 13 
1. Member States shall make additional payments to producers in their territory within the limits of the 
global amounts set out in Annex V and on a yearly basis. Such payments shall be made according to 
objective criteria including, in particular, the relevant production structures and conditions, arid in such a 
way as to ensure equal treatment between producers and to avoid market and competition distortions. 
Moreover, such payments shall not be linked to fluctuations of market prices. 
2. Additional payments may be made in the form of headage payments (Article 14) and/or area payments 
(Article 15). 
Article 14 
1. Headage payments may be granted for: 
(a) male bovine animals, 
(b) suckler cows, 
(c) dairy cows, 
(d) heifers. 
2. The grant of headage payments shall be subject: 
(a) to the special conditions set out in Annex VI, 
(b) to specific stocking density requirements to be established by Member States. 
3. The specific stocking density requirements shall be established: 
- on the basis of the forage area referred to in Article 10 (2) (b), 
- taking account of, in particular, the environmental impact of the type of production concerned, the 
environmental sensitivity of the land used for rearing cattle and the measures which have been 
implemented with a view to stabilise or improve the environmental situation of this land. 
Article 15 
1. Area payments shall be granted per hectare of permanent pasture: 
(a) which is available to a producer during the calendar year concerned, 
(b) which is not used to comply with the specific stocking density requirements referred to in Article 14 
(3), and 
(c) in respect of which no payments under the support system laid down for producers of certain arable 
crops, under the aid system for dried fodder and under Community aid schemes for other permanent or 
horticultural crops are claimed for the same year. 
2. The area of permanent pasture in a region for which area payments may be granted shall not exceed the 
relevant regional base area. 
58 
Regional base areas shall be established by Member States as the average number of hectares of 
permanent pasture available for rearing bovine animals during the years 1995,1996 and 1997. 
3. The maximum area payment per hectare which may be granted, including area payments pursuant to 
Article 18 of Regulation (EC) No [milk], shall not exceed: 
- ECU 210 for the calendar year 2000, 
- ECU 280 for the calendar year 2001, 
- ECU 350 for the calendar year 2002 and the subsequant calendar 
Article 16 
Before 1 January 2000, Member States shall provide the Commission with detailed information on their 
national arrangements concerning the granting of additional payments. Any changes of these arrangements 
shall be communicated to the Commission not later than one month after their adoption. 
Article 17 
Before 1 April 2004, Member States shall submit to the Commission detailed reports on the 
implementation of this section. 
Before 1 January 2005, the Commission shall evaluate the implementation of this section and examine the 
distribution of Community funds between Member States as provided for in Annex V, taking account of, 
in particular, the development of the Member States' shares in Community beef production. If necessary, 
the Commission shall make appropriate proposals to the Council. 
Article 18 
Detailed rules of application of this section shall be adopted by the Commission in accordance with the 
procedure laid down in Article 39. 
Section 3 - Common provisions 
Article 19 
To qualify for direct payments under this title, except area payments referred to in Article 15, an animal 
shall be identified and registered in accordance with Council Regulation (EC) No 820/9710. 
Article 20 
1. Direct payments under this title, except the deseasonalisation premium, shall be paid as soon as the 
inspections are carried out but not earlier than 16 October of the calendar year in respect of which they 
are applied for. 
2. Save in duly justified exceptional cases, direct payments under this title shall be made not later than 30 
June of the year following the calendar year in respect of which the payment is applied for. 
10 OJNoL 117, 7.5.1997, p. 1. 
59 
However, the deseasonalisation premium shall be paid as soon as the inspections are carried out and no 
later than 15 October of the calendar year in respect of which it is applied for. 
Article 21 
1. Where residues of substances prohibited under Council Directive 96/22/EC11, or residues of substances 
authorized under the aforementioned act but used illegally, are detected pursuant to the relevant 
provisions of Directive 96/23/EC, in an animal belonging to the bovine herd of a producer, or where a 
non-authorized substance or product, or a substance or product authorized under Council Directive 
96/22/EC12 but held illegally is found on the producer's holding in any form, the producer shall be 
excluded, for the calendar year of that discovery, from receiving the amounts provided for under this 
section. 
In the event of a repeated infringement, the length of the exclusion period may, according to the 
seriousness of the offence, be extended to five years as from the year in which the repeated infringement 
was discovered. 
2. In the event of obstruction on the part of the owner or holder of the animals when inspections are being 
carried out and when the samples are being taken which are necessary for the application of national 
residue-monitoring plans or when the investigations and checks provided for under the Directive 
96/23/EC are being carried out, the penalties provided for in paragraph 1 shall apply. 
3. Detailed rules for the application of this Article shall be adopted by the Commission in accordance with 
the procedure laid down in Article 39. 
, Article 22 
The amounts of the direct payments set out in sections 1 and 2 may be changed in the light of 
developments in production, productivity and the markets, according to the procedure laid down in Article 
43 (2) of the Treaty. 
Article 23 
The expenditure incurred in granting the direct payments provided for in this title shall be considered as 
intervention measures within the meaning of Article 2 (2) of Regulation (EC) No [CAP financing] 
1 ' Council Directive 96/22/EC of 29 April 1996 concerning the prohibition on the use in 
stockfarming of certain substances having a hormonal or thyrostatic action and of 6-agonists, and repealing 
Directives 81/602/EEC, 88/146/EEC and 88/299/EEC, OJ No L 125, 23.5.1996, p. 3. 
12 Council Directive 96/23/EC of 29 April 1996 on measures to monitor certain substances and 
residues thereof in live animals and animal products and repealing Directives 85/358/EEC and 86/469/EEC 
and Decisions 89/187/EEC and 91/664/EEC, OJ No L 125, 23.5.1996, p. 10. 
60 
Title 2 - Private Storage 
Article 24 
1. From 1 July 2002, the granting of aids for private storage may be decided, when the average 
Community market price recorded, on the basis of the Community grading scale provided for in 
Regulation (EEC) No 1208/81, for the carcases of adult bovine animals, is, and is likely to remain, at 
less than 103% of the basic price. 
2. The basic price shall be set at ECU 1,950 per ton. 
3. Private storage aid may be granted for fresh or chilled meat of adult bovine animals presented in the 
form of carcases, half-carcases, compensated quarters, forequarters or hindquarters, classified in 
accordance with the Community grading scale provided for in Regulation (EEC) No 1208/81. 
4. The Council, acting in accordance with the procedure laid down in Article 43 (2) of the Treaty, may: 
- change the basic price taking account, in particular, of the need to fix this price at a level which 
contributes towards stabilizing market prices without, however, leading to the formation of structural 
surpluses in the Community, 
- amend the list of products in paragraph 3 which may be the subject of private storage aid. 
5. Detailed rules for the application of this Article shall be adopted and the granting of aids for private 
storage shall be decided by the Commission in accordance with the procedure laid down in Article 39. 
CHAPTER II 
Trade with third countries 
Article 25 
1. Imports into the Community of any of the products listed in Article 1 (1) (a) shall be subject to 
presentation of an import licence. 
Imports into the Community of any of the products listed in Article 1 (1) (b) and exports from the 
Community of products listed in Article 1 (1) (a) and (b) may be subject to presentation of an import or 
export licence. 
Licences shall be issued by the Member States to any applicant, irrespective of his place of 
establishment in the Community and without prejudice to measures taken for the application of Articles 
28 and 29. 
Import and export licences shall be valid throughout the Community. Such licences shall be issued 
subject to the lodging of a security guaranteeing that the products are imported or exported during the 
term of validity of the licence; except in cases of force majeure, the security shall be forfeited in whole 
or in part if import or export is not carried out, or is carried out only partially, within that period. 
2. Detailed rules for the application of this Article shall be adopted by the Commission in accordance with 
the procedure laid down in Article 39. These rules may concern, in particular, 
(a) the term of validity of licences, 
(b) the list of products for which import or export licences are requested under paragraph 1 second sub­
paragraph. 
Article 26 
Unless this Regulation provides otherwise, the rates of duty in the Common Customs Tariff shall apply to 
the products listed in Article 1. 
61 
Article 27 
1. In order to prevent or counteract adverse effects on the market in the Community which may result from 
imports of certain products listed in Article 1, imports of one or more of such products at the rate of duty 
laid down in Article 26 shall be subject to payment of an additional import duty if the conditions set out 
in Article 5 of the Agreement on Agriculture concluded in accordance with Article 228 of the Treaty in 
the framework of the Uruguay Round of multilateral trade negotiations have been fulfilled unless the 
imports are unlikely to disturb the Community market, or where the effects would be disproportionate to 
the intended objective. 
2. The trigger prices below on which an additional duty may be imposed shall be those which are 
forwarded by the Community to the World Trade Organization. 
The trigger volumes to be exceeded in order to have the additional import duty imposed shall be 
determined particularly on the basis of imports into the Community in the three years preceding the year 
in which the adverse effects referred to in paragraph 1 arise or are likely to arise. 
3. The import prices to be taken into consideration for imposing an additional import duty shall be 
determined on the basis of the cif import prices of the consignment under consideration. 
Cif import prices shall be checked to that end against the representative prices for the product on the 
world market or on the Community import market for that product. 
4. The Commission shall adopt detailed rules for the application of this Article in accordance with the 
procedure laid down in Article 39. Such detailed rules shall specify in particular: 
(a) the products to which additional import duties may be applied under the terms of Article 5 of the 
Agreement on Agriculture; 
(b) the other criteria necessary to ensure application of paragraph 1 in accordance with Article 5 of the 
Agreement on Agriculture. 
Article 28 
1. Tariff quotas for the products listed in Article 1 resulting from agreements concluded in accordance with 
Article 228 of the Treaty or from any other act of the Council shall be opened and administered by the 
Commission in accordance with detailed rules adopted under the procedure laid down in Article 39. 
With regard to the import quota of 50 000 tonnes of frozen meat coming under CN codes 0202 20 30, 
0202 30 and 0206 29 91 and intended for processing, the Council, acting on a proposal from the 
Commission by a qualified majority, may lay down that all or part of the quota shall cover equivalent 
quantities of quality meat, applying a conversion rate of 4,375. 
2. Quotas shall be administered by applying one of the following methods or a combination of them: 
- method based on chronological order of the lodgement of applications ('first come, first served' 
principle), 
- method of distribution in proportion to the quantities requested when the applications were lodged 
(using the 'simultaneous examination' method), 
- method based on taking traditional trade patterns into account (using the 'traditional importers/new 
arrivais' method). 
62 
Other appropriate methods may be adopted. 
They shall avoid any discrimination between the operators concerned. 
3. The method of administration adopted shall, where appropriate, give due weight to the supply 
requirements of the Community market and the need to safeguard the equilibrium of that market, whilst 
at the same time possibly drawing on methods which may have been applied in the past to quotas 
corresponding to those referred to in paragraph 1, without prejudice to the rights resulting from 
agreements concluded as part of the Uruguay Round trade negotiations. 
4. The detailed rules referred to in paragraph 1 shall provide for annual quotas, if necessary, suitably 
phased over the year, and shall determine the administrative method to be used and, where appropriate, 
shall include: 
(a) guarantees covering the nature, provenance and origin of the product, and 
(b) recognition of the document used for verifying the guarantees referred to in (a); and 
(c) the conditions under which import licences are issued and their term of validity. 
Article 29 
1. To the extent necessary to enable the products listed in Article 1 to be exported on the basis of 
quotations or prices for those products on the world market and within the limits resulting from 
agreements concluded in accordance with Article 228 of the Treaty, the difference between those 
quotations or prices and prices in the Community may be covered by export refunds. 
2. The method to be adopted for the allocation of the quantities which may be exported with a refund shall 
be the method which: 
(a) is most suited to the nature of the product and the situation on the market in question, allowing the 
most efficient possible use of the resources available, account being taken of the efficiency and 
structure of Community exports without, however, creating discrimination between large and small 
operators; 
(b) is least cumbersome administratively for operators, account being taken of administration 
requirements; 
(c) prevents any discrimination between the operators concerned. 
3. Refunds shall be the same for the whole Community. 
They may vary according to destination, where the world market situation or the specific requirements 
of certain markets make this necessary. 
Refunds shall be fixed by the Commission in accordance with the procedure laid down in Article 39. 
Refunds may be fixed: 
(a) at regular intervals; 
(b) in addition and for limited quantities, by invitation to tender for products for which that procedure 
seems appropriate. 
63 
Except where fixed by tender, the list of products on which an export refund is granted and the amount 
of such refund shall be fixed at least once every three months. The amount of the refund may, however, 
remain at the same level for more than three months and may, where necessary, be adjusted in the 
intervening period by the Commission at the request of a Member State or on its own initiative. 
4. The following shall be taken into account when refunds are being fixed: 
(a) the existing situation and the future trend with regard to: 
- prices and availabilities of beef and veal sector products on the Community market; 
- prices for beef and veal sector products on the world market; 
(b) the aims of the common organization of the market in beef and veal, which are to ensure 
equilibrium and the natural development of prices and trade on this market; 
(c) the limits resulting from agreements concluded in accordance with Article 228 of the Treaty; 
(d) the need to avoid disturbances on the Community market; 
(e) the economic aspect of.the proposed exports. 
Account shall also be taken in particular of the need to establish a balance between the use of 
Community basic products in the manufacture of processed goods exported to third countries and the 
use of products from these countries admitted to inward processing arrangements. 
5. When prices within the Community listed in paragraph 1 are being determined the following shall be 
taken into account: 
- prices ruling on the representative Community markets, 
- prices ruling at export. 
When prices in international trade listed in paragraph 1 are being determined account shall be taken of: 
- prices ruling on third-country markets, 
- the most favourable prices in third countries of destination for third-country imports, 
- producer prices recorded in exporting third countries, account being taken, where appropriate, of 
subsidies granted by those countries, 
- free-at-Community-frontier offer prices. 
6. Refunds shall be granted only on application and on presentation of the relevant export licence. 
7. The refund applicable to exports of products listed in Article 1 shall be that applicable on the day of 
application for the licence and, in the case of a differentiated refund, that applicable on the same day: 
(a) for the destination indicated on the licence; or 
(b) for the actual destination if it differs from the destination indicated on the licence. In that case, the 
amount applicable may not exceed the amount applicable for the destination indicated on the 
licence. 
Appropriate measures may be taken to prevent abuse of the flexibility provided for in this paragraph. 
64 
8. Paragraphs 6 and 7 may be waived in the case of products listed in Article 1 on which refunds are paid 
under food-aid operations, in accordance with the procedure laid down in Article 39. 
9. The refund shall be paid upon proof that: 
- the products are of Community origin, 
- the products have been exported from the Community, and 
- in the case of a differentiated refund the products have reached the destination indicated on the licence 
or another destination for which the refund was fixed, without prejudice to paragraph 3 (b). 
Exceptions may be made to this rule in accordance with the procedure laid down in Article 39, 
provided conditions are laid down which offer equivalent guarantees. 
Moreover, the payment of the refund for exports of live animals shall be subject to compliance with the 
provisions established in Community legislation concerning animal welfare and, in particular, the 
protection of animals during transport. 
10. Without prejudice to paragraph 9 first indent, in the absence of a derogation granted in accordance with 
the procedure laid down in Article 39, no export refund shall be granted on products which are imported 
from third countries and re-exported to third countries. 
11. Observance of the volume limits resulting from the agreements concluded in accordance with Article 
228 of the Treaty shall be ensured on the basis of the export licences issued for the reference periods 
provided for therein which apply to the products concerned. With regard to compliance with the 
obligations arising in the framework of the Uruguay Round multilateral trade negotiations, the ending of 
a reference period shall not affect the validity of export licences. 
12. Detailed rules for the application of this Article, including provisions on the redistribution of 
exportable quantities which have not been allocated or utilized, shall be adopted by the Commission in 
accordance with the procedure laid down in Article 39. 
With regard to paragraph 9, last subparagraph, the detailed rules for the application may also include 
conditions concerning, in particular, imports into third countries. 
Article 30 
1. To the extent necessary for the proper working of the common organization of the market in beef and 
veal, the Council, acting by a qualified majority, on a proposal from the Commission, may, in special 
cases, prohibit in whole or in part the use of inward or outward processing arrangements in respect of 
products listed in Article 1. 
2. However, by way of derogation from paragraph 1, if the situation referred to in paragraph 1 arises with 
exceptional urgency and the Community market is disturbed or is liable to be disturbed by the inward or 
outward processing arrangements, the Commission shall, at the request of a Member State or on its own 
initiative, decide upon the necessary measures; the Council and the Member States shall be notified of 
such measures, which shall be valid for no more than six months and shall be immediately applicable. If 
the Commission receives a request from a Member State, it shall take a decision thereon within a week 
following receipt of the request. 
3. Measures decided on by the Commission may be referred to the Council by any Member State within a 
week of the day on which they were notified. The Council, acting by a qualified majority, may confirm, 
amend or repeal the Commission decision. If the Council has not acted within three months, the 
Commission decision shall be deemed to have been repealed. 
65 
Article 31 
1. The general rules for the interpretation of the combined nomenclature and the detailed rules for its 
application shall apply to the tariff classification of products covered by this Regulation; the tariff 
nomenclature resulting from the application of this Regulation shall be incorporated into the Common 
Customs tariff. 
2. Save as otherwise provided for in this Regulation or in provisions adopted pursuant thereto, the 
following shall be prohibited in trade with third countries: 
- the levying of any charge having equivalent effect to a customs duty, 
- the application of any quantitative restriction or measure having equivalent effect. 
Article 32 
1. If, by reason of imports or exports, the Community market in one or more of the products listed in 
Article 1 is affected by, or is threatened with, serious disturbance likely to jeopardize the achievement of 
the objectives set out in Article 39 of the Treaty, appropriate measures may be applied in trade with third 
countries until such disturbance or threat of disturbance has ceased. 
The Council, acting by a qualified majority, on a proposal from the Commission, shall adopt general 
rules for the application of this paragraph and shall define the circumstances and limits within which 
Member States may adopt protective measures. 
2. If the situation referred to in paragraph 1 arises, the Commission shall, at the request of a Member State 
or on its own initiative, decide upon the necessary measures: the Member States shall be notified of such 
measures, which shall be immediately applicable. If the Commission receives a request from a Member 
State, it shall take a decision thereon within three working days following receipt of the request. 
3. Measures decided upon by the Commission may be referred to the Council by any Member State within 
three working days of the day on which they were notified. The Council shall meet without delay. It 
may, acting by a qualified majority, amend or repeal the measure in question within one month 
following the day on which it was referred to the Council. 
4. This Article shall be applied having regard to the obligations arising from agreements concluded in 
accordance with Article 228 (2) of the Treaty. 
CHAPTER III 
General provisions 
Article 33 
Member States shall record prices of adult bovine animals and of meat of adult bovine animals on the basis 
of rules to be established by the Commission in accordance with the procedure laid down in Article 39 
Article 34 
1. When a substantial rise or fall in prices is recorded on the Community market and this situation is likely 
to continue, thereby disturbing or threatening to disturb the market, the necessary measures may be 
taken. 
66 
2. Detailed rules for the application of this Article shall be adopted by the Commission in accordance with 
the procedure laid down in Article 39. 
Article 35 
In order to take account of the restrictions on free circulation which may result from the application of 
measures for combating the spread of diseases in animals, exceptional measures of support for the market 
affected by those restrictions may be taken in accordance with the procedure laid down in Article 39. 
Those measures may only be taken in so far as, and for as long as, is strictly necessary for the support of 
that market. 
Article 36 
Save as otherwise provided in this Regulation, Articles 92, 93 and 94 of the Treaty shall apply to the 
production of and trade in the products listed in Article 1. 
Article 37 
Member States and the Commission shall communicate to each other the information necessary for 
implementing this Regulation. The information to be communicated shall be determined in accordance 
with the procedure laid down in Article 39. Rules for the coriimunication and distribution of such 
information shall be adopted in accordance with the same procedure. 
Article 38 
A Management Committee for Beef and Veal (hereinafter called "the Committee") shall be established, 
composed of representatives of Member States and chaired by a representative of the Commission. 
Article 39 
1. Where the procedure laid down in this Article is to be followed, the chairman shall refer the matter to 
the Committee either on his own initiative or at the request of the representative of a Member State. 
2. The representative of the Commission shall submit to the Committee a draft of the measures to be taken. 
The Committee shall deliver its opinion on the draft within a time limit which the chairman may lay 
down according to the urgency of the matter. The opinion shall be delivered by the majority laid down 
in Article 148 (2) of the Treaty in the case of decisions which the Council is required to adopt on a 
proposal from the Commission. The votes of the representatives of the Member States within the 
Committee shall be weighted in the manner set out in that Article. The Chairman shall not vote. 
3. The Commission shall adopt measures which shall apply immediately. However, if these measures are 
not in accordance with the opinion of the Committee, they shall be communicated by the Commission to 
the Council forthwith. In that event the Commission may defer application of the measures which it has 
decided for a period of not more than one month from the date of such communication. 
The Council, acting by a qualified majority, may take a different decision within one month. 
67 
Article 40 
The Committee may consider any other question referred to it by its chairman either on his own initiative 
or at the request of the representative of a Member State. 
Article 41 
Regulation (EC) No [CAP financing]and the provisions adopted in implementation thereof shall 
apply to the products listed in Article 1. 
Article 42 
This Regulation shall be so applied that appropriate account is taken, at the same time, of the objectives set 
out in Articles 39 and 110 of the Treaty. 
CHAPTER IV 
Transitional and final provisions 
Article 43 
1. Until 30 June 2002, products as referred to in paragraph 2 in connection with Article 24 (1), may be 
bought-in by intervention agencies in accordance with the provisions laid down in this Article, to 
prevent or mitigate a substantial fall in prices. 
2. Where the conditions laid down in paragraph 3 are met, buying-in by intervention agencies in one or 
more Member States or in a region of a Member State of one or more categories, qualities or quality 
groups, to be determined, of fresh or chilled meat falling within CN codes 0201 10 00 and 0201 20 20 to 
0201 20 50 originating in the Community may be organized under tender procedures arranged with a 
view to ensuring reasonable support of the market, having regard to seasonal developments as regards 
slaughterings. 
Such buying in may not cover more than 350 000 tonnes per year and for the Community as a whole. 
The Council may amend this quantity, acting by a qualified majority on a proposal from the 
Commission. 
3. For each quality or quality group that may be bought in, the tender procedures may be opened as 
provided in paragraph 8 whenever, in a Member State or in a region of a Member State, the following 
two conditions are both met for a period of two consecutive weeks: 
- the average Community market price recorded on the basis of the Community grading scale for the 
carcases of adult bovine animals is less than 84 % of the intervention price, 
- the average market price recorded on the basis of the said scale in the Member State or States or 
regions of a Member State is less than 80 % of the intervention price. 
The intervention price shall be set at: 
- ECU 3,475 per ton for the period from 1 January until 30 June 2000, 
- ECU 3,127.5 per ton for the period from 1 July 2000 until 30 June 2001, 
- ECU 2,780 per ton for the period from 1 July 2001 until 30 June 2002, 
68 
4. Tender arrangements for one or more qualities or quality groups shall be suspended in any one of the 
following two situations: 
- where, for two consecutive weeks, the two conditions referred to in paragraph 3 are no longer both 
met, 
- where buying-in is no longer appropriate in view of the criteria set out in paragraph 2. 
5. Intervention shall also be opened if, for a period of two consecutive weeks, the average Community 
market price of young uncastrated male animals less than two years old or castrated male animals, 
recorded on the basis of the Community grading scale for carcases of adult bovine animals, falls short of 
78 % of the intervention price, and if in a Member State or regions of a Member State, the average 
market price of young uncastrated male animals less than two years old or castrated male animals, 
recorded on the basis of the Community grading scale for carcases of adult bovine animals, falls short of 
60 % of the intervention price; in this case, buying-in shall take place for the categories concerned in the 
Member States or regions of a Member State where the price level is below that limit. 
For this buying-in, and without prejudice to paragraph 6, all offers shall be accepted. 
The quantities bought in pursuant to this paragraph shall not be taken into account for the purposes of 
applying the buying-in ceiling referred to in paragraph 2. 
6. Only offers equal to or less than the average market price recorded in a Member State or a region of a 
Member State and increased by an amount to be determined on the basis of objective criteria may be 
accepted under the buying-in systems referred to in paragraphs 2 and 5. 
7. For each quality or quality group eligible for intervention, the buying-in prices and the quantities 
accepted for intervention shall be determined under tender procedures and may, in special 
circumstances, be fixed per Member State or per region of a Member State on the basis of recorded 
average market prices. The tender procedures must ensure equality of access for all persons concerned. 
They shall be opened on the basis of specifications to be determined taking commercial structures into 
account, where necessary. 
8. Under the procedure provided for in Article 39: 
- the categories, qualities or quality groups of products eligible for intervention shall be determined, 
- the opening or reopening of tender procedures and their suspension in the case referred to in the last 
indent of paragraph 4 shall be decided, 
- the buying-in prices and the quantities accepted for intervention shall be fixed, 
- the amount of the increase referred to in paragraph 6 shall be determined, 
- the procedures implementing this Article, and in particular those designed to prevent market prices 
spiralling downward, shall be adopted, 
- any transitional provisions necessary for the implementation of these arrangements shall be adopted. 
The Commission shall decide on: 
- opening intervention as referred to in paragraph 5 and suspending it where one or more conditions laid 
down in that paragraph no longer apply, 
- suspending buying-in as referred to in the first indent of paragraph 4. 
69 
Article 44 
1. Disposal of the products bought in by the intervention agencies in accordance with the provisions of 
Article 43 of this Regulation and of Articles 5 and 6 of Regulation (EEC) No 805/68 shall take place in 
such a way as to avoid any disturbance of the market and to ensure equal access to goods and equal 
treatment of purchasers. 
2. The Council, acting by a qualified majority, on a proposal from the Commission, shall adopt general 
rules for implementing this Article. 
3. Detailed rules for the application of this Article, in particular as regards selling prices, conditions for 
release from storage and, where appropriate, the processing of products bought in by the intervention 
agencies, shall be adopted by the Commission in accordance with the procedure laid down in Article 39. 
Article 45 
1. Until 30 June 2002, the granting of aids for private storage for products as referred to in Article 24 (3) 
may be decided. 
2. Detailed rules of application with regard to private storage aid shall be adopted and the granting of aids 
for private storage shall be decided by the Commission in accordance with the procedure laid down in 
Article 39. 
Article 46 
1. Regulations (EEC) No 805/68 and No 1892/87 are hereby repealed. 
2. References to Regulation (EEC) No 805/68 shall be construed as references to this Regulation and 
should be read in accordance with the correlation table in Annex VII. 
Article 47 
The Commission shall adopt, in accordance with the procedure laid down in Article 39: 
- the measures required to facilitate the transition from the arrangements provided in Regulation (EEC) No 
805/68 to those established by this Regulation, 
- the measures required to resolve specific practical problems. Such measures - if duly justified - may 
derogate from certain parts of this Regulation. 
70 
Article 48 
This Regulation shall enter into force on the day of its publication in the Official Journal of the European 
Communities. 
It shall apply as from 1 January 2000, except Article 16 which shall apply from the entry into force of this 
Regulation.. 
This Regulation shall be binding in its entirety and directly applicable in all Member States. 
Done at 
* For the Council 
The President 
71 
ANNEX I 
Special premium 
Regional ceilings of the Member States referred to in 
Art. 4 (4) 
Belgium 235 149 
Denmark 277 110 
Germany 1 782 700 
Greece 140130 
Spain 649 896 
France 1 754 732 (1) 
Ireland 1 002 458 
Italy 598 746 
Luxembourg 18 962 
Netherlands 157 932 
Austria 423 400 
Portugal 166 483 (2) 
Finland 241 553 
Sweden 226 328 
United Kingdom 1419 811 
(1) Without prejudice to the specific rules laid down in 
Council Regulation (EEC) No 3763/913. 
(2) Excluding the extensification programme set out in 
Regulation (EC) No 1017/9414. 
13 OJ No L 356 , 24.12.1991 p. 1. Regulation as last amended by Regulation (EC) No 2598/95 (OJ 
No L 267, 9.11.1995, p. 1). 
14 OJ No L 112 , 3.5.1994, p. 2. Regulation as last amended by Regulation (EC) No 1461/95 (OJ No 
L 144,28.6.1995, p. 4). 
72 
ANNEX n 
Suckler cow premium 
National ceilings referred to in Article 7 (2) applicable as 
from 1.1. 2000 
Belgium 
Denmark 
Germany 
Greece 
Spain 
France (1) 
Ireland 
Italy 
Luxembourg 
Netherlands 
Austria 
Portugal (2) 
Finland 
Sweden 
United Kingdom 391,034 
111,044 
547,690 
131,856 
1,347,486 
3,739,106 
1,020,606 
578,418 
13,978 
61,366 
283,010 
269,765 
28,332 
132,510 
1,629,268 
(1) Excluding the specific ceiling as provided for in 
Article 5 (3) of Regulation (EEC) No 3763/91. 
(2) Excluding the specific reserve provided for in Article 
2 of Regulation (EC) No 1017/94. 
73 
ANNEX III 
Livestock Unit conversion table referred to in Article 10 
Male bovine animals and 
heifers older than 24 
months, suckler cows, 
dairy cows 
Male bovine animals and 
heifers from 6 months to 
24 months 
Sheep 
Goats 1.0 LU 
0.6 LU 
0.15 LU 
0.15 LU 
74 
ANNEX TV 
Dairy cow premium 
Supplementary amounts referred to in Article 12 (expressed in ECU) 
Belgium 
Denmark 
Germany 
Greece 
Spain 
France 
Ireland 
Italy 
Luxembourg 
Netherlands 
Austria 
Portugal 
Finland 
Sweden 
United Kingdom 2000 
12.9 
9.8 
11.9 
15.4 
14.4 
12.1 
15.4 
13.4 
11.0 
10.0 
13.5 
14.3 
10.4 
9.5 
11.2 2001 
24.8 
18,9 
22.7 
29.5 
27.5 
23.1 
29.5 
25.7 
21.0 
19.1 
26.0 
27.4 
20.0 
18.1 
21.5 2002 and 
subsequent 
years 
37.7 
28.7 
34.6 
45.4 
41.9 
35.2 
44.9 
39.2 
31.9 
29.0 
39.5 
41.7 
30.5 
27.6 
32.3 
75 
ANNEX V 
Additional payments 
Global amounts referred to in Article 13 (expressed in Mio. ECU) 
Belgium 
Denmark 
Germany 
Greece 
Spain 
France 
Ireland 
Italy 
Luxembourg 
Netherlands 
Austria 
Portugal 
Finland 
Sweden 
United Kingdom 2000 
26.8 
16.3 
122.1 
5.3 
45.7 
129.1 
43.5 
90.6 
0.6 
35.0 
16.6 
8.6 
8.6 
12.7 
88.1 2001 
52.5 
31.9 
239.2 
10.3 
89.6 
252.9 
85.2 
177.5 
1.3 
68.5 
32.5 
16.8 
16.8 
24.9 
172.7 2002 and 
subsequent 
years 
80.9 
49.2 
368.8 
15.9 
138.2 
390.0 
131.3 
273.7 
1.9 
105.7 
50.2 
25.9 
25.9 
38.4 
266.3 
76 
ANNEX VI 
Special conditions for the granting of headage payments referred to in Article 14 
I. Male bovine animals 
1. Headage payments may be granted per calendar year for no more than: 
(a) a number of animals per holding to be determined by the Member State on a national or regional 
basis, using historical reference data, and, 
(b) a number of animals in a Member State: 
- equal to the regional ceiling of the Member State concerned set out in Annex I or 
- equal to the average number of slaughterings of male bovine animals during the years 1997, 1998 
and 1999 deriving from Eurostat statistics for these years or any other published official statistical 
information for these years accepted by the Commission. 
Only male bovine animals of more than 8 months shall be eligible. 
2. The total amount of headage payment and special premium which may be granted during the lifetime of 
an animal shall not exceed: 
(a) per eligible bull: 
- ECU 210 for the calendar year 2000, 
- ECU 280 for the calendar year 2001, 
- ECU 355 for the calendar year 2002 and the subsequent calendar years; 
(b) per eligible steer: 
- ECU 320 for the calendar year 2000, 
- ECU 420 for the calendar year 2001, 
- ECU 530 for the 2002 calendar year and the subsequent calendar years. 
II. Stickler cows 
1. Headage payments may only be granted as a supplementary amount per suckler cow premium unit set 
out in Article 6 (4). 
2. The total amount of headage payment and suckler cow premium which may be granted per eligible 
animal and calendar year shall not exceed: 
- ECU 175 for the calendar year 2000, 
- ECU 205 for the calendar year 2001, 
- ECU 235 for the calendar year 2002 and the subsequent calendar years. 
77 
III. Dairy cows 
1. Headage payments may only be granted as a supplementary amount per dairy cow premium unit set out 
in Annex IV. 
2. The total amount of dairy cow premium and headage payment, including any other dairy cow payment 
under Regulation (EC) No .... [milk], which may be granted per premium unit and calendar year shall 
not exceed the amounts set out in Article 17 (2) of the said Regulation. 
3. Article 14 (2) (b) shall not apply. 
IV. Heifers 
1. Headage payments may be granted per Member State and calendar year for no more than a number of 
heifers equal to the average number of slaughterings of heifers during the years 1997, 1998 and 1999 
deriving from Eurostat statistics for these years or any other published official statistical information for 
these years accepted by the Commission. 
2. The total amount of headage payment which may be granted during the lifetime of an animal shall not 
exceed: 
- ECU 100 for the calendar year 2000, 
- ECU 150 for the calendar year 2001, 
- ECU 225 for the calendar year 2002 and the subsequent calendar years. 
78 
ANNEX VII 
Correlation table 
| Regulation 805/68 This Regulation | 
Article 1 Article 1 
Article 2 Article 2 
Article 4 
Article 4a first and second indent Article 3 first and second indent 
Article 4b (1) Article 4(1) 
Article 4b (2) first subparagraph Article 4 (2) 
Article 4b (2) second subparagraph Article 4 (3) (a) 
Article 4b (3) point (a) of the third subparagraph Article 3 third indent 
Article 4b (3a) ' 
Article 4b (4) 
Article 4b (5) Article 4 (5) 
Article 4b (7a) 
Article 4b (8) Article 4 (7) 
Article 4c (1) second subparagraph Article 5 (4) 
Article 4c (1) third subparagraph Article 5 (1) second subparagraph 
Article 4c (2) second subparagraph Article 5 (2) 
^.Article 4c (2) third subparagraph Article 5 (4) 
Article 4c (3) third subparagraph Article 5 (3) third subparagraph 
Article 4c (4) Article 5 (5) 
Article 4d (1) first sentence Article 6(1) first sentence 
Article 4d (la) 
Article 4d (2) first sentence Article 6 (3) 
Article 4d (3a) 
Article 4d (5) Article 6 (2) (a) 
Article 4d (6) first subparagraph Article 6 (2) (b) 
Article 4d (6) second to fourth subparagraph 
79 
Article 4d (6) fifth subparagraph 
Article 4d (8) second indent 
Article 4e (1) first sentence of the first 
subparagraph 
Article 4e (1) second sentence of the first 
subparagraph 
Article 4e (1) second subparagraph 
Article 4e (2) 
Article 4e (3) 
Article 4e (4) 
Article 4e (5) 
Article 4f (4) first and second indents of the 
second subparagraph 
Article 4g (3) 
Article 4g (4a) 
Article 4g (5) 
Article 4h (2) 
Article 4i 
Article 4j (1) to (3) 
Article 4k 
Article 41 
Article 5 
Article 6 (1) 
Article 6 (2) 
Article 6 (3) 
Article 6 (4) 
Article 6 (5) 
Article 6 (6) 
Article 6 (7) 
Article 6a Article 6 (2) second subparagraph 
Article 6 (5) 
Article 8(1) first subparagraph 
Article 8 (4) second indent of the second 
subparagraph 
Article 8 (1) second subparagraph 
Article 8 (2) 
Article 8 (3) 
Article 8 (4) first subparagraph and first indent of 
the second subparagraph 
Article 9 (4) first and second subparagraphs 
Article 10 (2) 
Article 10 (3) 
Article 11 (3) first indent 
Article 21(1) to (3) 
Article 23 
Article 43 (2) 
Article 43 (3) 
Article 43 (4) 
Article 43 (5) 
Article 43 (6) 
Article 43 (7) 
Article 43 (8) 
80 
Article 7 
Article 8 
Article 9 
Article 10 
Article 11 
Article 12 (1) second subparagraph 
Article 12 (2) to (4) 
Article 13(1) to (3) 
Article 13 (4) first and second subparagraph 
Article 13 (5) to (12) 
Article 14 
Article 15 
Article 16 
Article 22 
Article 22a (1) 
Article 22a (2) 
Article 22a (3) 
Article 23 
Article 24 
Article 25 
Article 26 (1) 
Article 26 (2) 
Article 27 
Article 28 
Article 29 
Article 30 
Article 30a 
Article 31 
Article 32 Article 44 
Article 45 
Article 25 
Article 26 
Article 27 
Article 28 (1) second subparagraph 
Article 28 (2) to (4) 
Article 29(1) to (3) 
Article 29 (4) first and second subparagraph 
Article 29 (5) to (12) 
Article 30 
Article 31 
Article 32 
Article 34 (1) 
Article 34 (2) 
Article 35 
Article 36 
Article 37 
Article 38 
Article 39 
Article 40 
Article 41 
Article 42 
81 
Article 33 
Article 34 first subparagraph 
Annex 
Annex II Article 48 first subparagraph 
82 
Proposal for a 
98/0110 (CNS) 
COUNCIL REGULATION ( EC ) NO /98 
of 
on the common organisation of the market in milk and milk products 
THE COUNCIL OF THE EUROPEAN UNION, 
Having regard to the Treaty establishing the European Community, and in particular-Articles 42 and 43 
thereof; 
Having regard to the proposal from the Commission1; 
Having regard to the opinion of the European Parliament ; 
(1) Whereas the operation and development of the common market in agricultural products should be 
accompanied by the establishment of a common agricultural policy to include in particular a 
common organisation of agricultural markets which may take various forms depending on the 
product; 
(2) Whereas the aim of the common agricultural policy is to attain the objectives set out in Article 39 
of the Treaty; whereas, in the milk sector, in order to stabilise markets and to ensure a fair 
standard of living for the agricultural community, it is necessary that the intervention agencies, 
based on a single price system, may take intervention measures on the market including the 
buying-in of butter and skimmed milk powder and the grant of private storage aids for these 
products; whereas, however, such measures should be standardised so as not to impede the free 
movement of goods in question within the Community; 
(3) Whereas by Council Regulation (EEC) No 3950/92 of 28 December 19923 an additional levy 
scheme for the market of milk and milk products was introduced for the purpose of reducing the 
imbalance between supply and demand on the milk and milk-product market and resulting 
structural surpluses; whereas this scheme will apply for six new consecutive periods of twelve 
months commencing on 1 April 2000; 
(4) Whereas, in order to encourage the consumption of milk and milk products in the Community and 
to improve the competitivity of these products on the international markets, the level of market 
support should be reduced, in particular, through a gradual reduction of the target prices and 
intervention prices for butter and skimmed milk powder; 
(5) Whereas the implementation of an intervention system for butter should maintain the competitive 
position of butter on the market and provide for the most efficient possible storage; whereas the 
quality requirements to be observed in respect of butter constitute a determining factor for 
attaining these objectives; whereas buying into intervention should take place insofar as it is 
necessary to maintain the stability of the market by reference to the market price of butter in the 
Member States, and should be carried out under a tendering procedure; 
OJ L 405, 31.12.1992, p. 1. Regulation as last amended by Commission Regulation (EC) No 
614/97 of 8.4.1997, establishing an additional levy in the milk and milk products sector OJ L 94 , 
9.4.1997, p. 4. 
83 
(6) Whereas, in the case of private storage aid for butter, it is appropriate to subject its grant to butter 
produced from cream and milk of Community origin and to maintain a reference to national 
quality grades as a condition of eligibility; 
(7) Whereas in addition to intervention in respect of butter and fresh cream, other Community 
intervention measures are required to enable the best return to be obtained from milk proteins and 
to support the prices of products which have special importance in determining producer prices 
for milk; whereas these measures should take the form of buying-in of skimmed milk powder and 
of granting private storage aid for this product; whereas, however, the normal buying into 
intervention of skimmed milk powder may be suspended when a certain quantity is reached and 
may be replaced by buying-in under a tender procedure; 
(8) Whereas to avoid distortion between operators selling into public intervention and in the interest 
of the proper administration of Community funds, a minimum requirement should be set for the 
protein content of skimmed-milk-powder bought into intervention; whereas the content should be 
fixed taking account of current commercial standards and in such way that it cannot act as a 
criterion for exclusion from intervention; 
(9) Whereas, to contribute to balancing the milk market and to stabilise the market prices for milk and 
milk products, provision should be made for complementary measures increasing the possibility 
of disposing of milk products; whereas these measures should include the grant of private storage 
aid for certain types of cheeses, on the one hand, and the grant of aids for the marketing of certain 
milk products with a view to specific uses and destinations; 
(10) Whereas, in order to stimulate the consumption of milk by young people, provision should be 
made for the Community to defray a part of the expenditure occasioned by granting aid for the 
supply of milk to pupils in schools; 
(11) Whereas, as a consequence of reduced market support in the milk sector, income support 
measures for milk producers should be introduced; whereas these measures should take the form 
of a dairy cow premium the level of which should develop in parallel with the gradual reduction 
of market support; whereas the level of individual income support should be calculated on the 
basis of the individual reference quantities of the producers concerned and the average milk yield 
in the Community; whereas, to ensure the proper application of the scheme, to take account of the 
multilateral commitments of the Community and for reasons of budget control, provision should 
be made for keeping the overall income support at the level of the Member States' total reference 
quantities as applicable at the entry into force of the premium scheme; 
(12) Whereas, for reasons of simplification, the dairy cow premium should be managed and granted 
together with the corresponding income support for dairy cows under the common market 
organisation for beef and veal; 
(13) Whereas the conditions for milk production and the income situation of producers significantly 
vary in different production areas of the Community; whereas a Community-wide scheme with 
uniform dairy cow payments to all producers would be too rigid to respond adequately to 
structural and natural disparities and the diverse needs resulting therefrom; whereas, therefore, it is 
appropriate to provide for a flexible framework of additional Community payments to be 
determined and made by Member States within fixed global amounts and in accordance with 
certain common criteria; whereas the global amounts should be allocated to the Member States on 
the basis of their total reference quantity for milk; whereas the common criteria are intended, inter 
alia, to prevent additional payments from producing discriminatory effects and to take full account 
of the relevant multilateral commitments of the Community; whereas, in particular, it is essential 
that Member States be obliged to use their discretionary powers exclusively on the basis of 
objective criteria, to pay full regard to the concept of equal treatment and to avoid market and 
competition distortions; whereas it is appropriate to provide for the forms that additional payments 
may take; whereas these forms should be premium supplements and area payments; 
84 
(14) Whereas premium supplements should be granted in addition to the dairy cow premium units; 
whereas it is also necessary to limit the total amount of support which may be granted per 
premium unit per year; 
(15) Whereas additional area payments should only be granted for permanent pasture which does not 
benefit from other Community market support measures; whereas area payments should be 
applied within the limits of regional base areas of permanent pasture which should be established 
by Member States according to historical reference data; whereas the maximum amount of area 
payment which may be granted per hectare, including additional area payments under the 
common market organisation for beef and veal, should be comparable with the average support 
per hectare under the support system for producers of certain arable crops; 
(16) Whereas, in order to achieve the desired economic impact, direct payments must be granted within 
certain time limits; 
(17) Whereas, should the administration of bovine somatrophin to dairy cows be prohibited under 
Community law, the Commission should establish penalties analogous to those foreseen in the 
common market organsiation for beef and veal in the case of use of certain prohibited substances 
in beef production; 
(18) Whereas the creation of a single Community market for milk and milk products involves the 
introduction of a single trading system at the external frontiers of the Community; whereas a 
trading system including import duties and export refunds, in addition to the intervention 
measures, should, in principle, stabilise the Community market; whereas the trading system 
should be based on the undertakings accepted under the Uruguay Round of multilateral trade 
negotiations; 
(19) Whereas, in order to monitor the volume of trade in milk and milk products with third countries, 
provision should be made for a system of import and export licences for certain products, which 
includes the lodging of a security to guarantee that the transactions for which such licences are 
granted are effected; 
(20) Whereas in order to prevent or counteract adverse effects on the Community market which could 
result from imports of certain agricultural products, imports of one or more such products should 
be subject to payment of an additional import duty, if certain conditions are fulfilled; 
(21) Whereas it is appropriate, under certain conditions, to confer on the Commission the power to 
open and administer tariff quotas resulting from international agreements concluded in accordance 
with the Treaty or from other acts of the Council; whereas, moreover, the Commission should 
have analogous powers concerning certain tariff quotas opened by third countries; 
(22) Whereas provisions for granting a refund on exports to third countries, based on the difference 
between prices within the Community and on the world market, and falling within the WTO 
Agreement on Agriculture , should serve to safeguard Community participation in international 
trade in milk and milk products; whereas these refunds should be subject to limits in terms of 
quantity and value; 
(23) Whereas compliance with the limits in terms of value should be ensured at the time when refunds 
are fixed through the monitoring of payments under the rules relating to the European Agricultural 
Guidance and Guarantee Fund; whereas monitoring can be facilitated by the compulsory advance 
fixing of refunds, while allowing the possibility, in the case of differentiated refunds, of changing 
the specified destination within a geographical area to which a single refund rate applies; whereas, 
in the case of a change of destination, the refund applicable to the actual destination should be 
paid, with a ceiling of the amount applicable to the destination fixed in advance; 
OJ L 336, 23.12.1994, p. 22. 
85 
(24) Whereas ensuring compliance with the quantity limits calls for the introduction of a reliable and 
effective system of monitoring; whereas, to that end, the granting of refunds should be made 
subject to an export licence; whereas refunds should be granted up to the limits available, 
depending on the particular situation of each product concerned; whereas exceptions to that rule 
should only be permitted in the case of processed products not listed in Annex II to the Treaty, to 
which volume limits do not apply, and in the case of food-aid operations, which are exempt from 
any limit; whereas monitoring of the quantities exported with refunds during the marketing years 
-• as referred to in the WTO Agreement on Agriculture should be carried out on the basis of export 
licences issued for each marketing year; 
(25) Whereas, in addition to the system described above, and to the extent necessary for its proper 
working, provision should be made for regulating or, when the situation on the market so requires, 
prohibiting the use of inward processing arrangements; 
(26) Whereas it is appropriate to provide for measures to be taken when a substantial rise or fall in 
prices disturbs or threatens to disturb the Community market; 
(27) Whereas the customs duty system makes it possible to dispense with all other protective measures 
at the external frontiers of the Community; whereas, however, the internal market and duty 
mechanism could, in exceptional circumstances, prove defective; whereas, in such cases, so as not 
to leave the Community market without defence against disturbances which may arise therefrom, 
the Community should be able to take all necessary measures without delay; whereas those 
measures should be in accordance with the obligations derived from the relevant WTO 
agreements; 
(28) Whereas restrictions on free movement resulting from the application of measures intended to 
prevent the spread of animal diseases could cause difficulties on the market of one or more 
Member States; whereas provision should be made for the introduction of exceptional market 
support measures in order to remedy such situations; 
(29) Whereas the establishment of a single market would be jeopardized by the granting of certain 
aids; whereas, therefore, the provisions of the Treaty which allow the assessment of aids granted 
by Member States and the prohibition of those which are incompatible with the common market 
should apply in the common market organisation for milk and milk products; 
(30) Whereas it is necessary that, as the common market in milk and milk products develops, the 
Member States and the Commission should keep each other supplied with the information 
necessary for applying this Regulation; 
(31) Whereas, in order to facilitate implementation of the proposed measures, a procedure should be 
provided for establishing close co-operation between Member States and the Commission within a 
Management Committee; 
(32) Whereas expenditure incurred by the Member States as a result of the obligations arising out of 
the application of this Regulation should be financed by the Community in accordance with 
Council Regulation (EC) No / of on the financing of the common agricultural policy5; 
(33) Whereas the common organisation of the market in milk and milk products should take 
appropriate account, at the same time, of the objectives set out in Articles 39 and 110 of the 
Treaty; 
(34) Whereas the common organization of the market in milk and milk products laid down in Council 
Regulation (EEC) No 804/68 of 27 June 1968 on the common organization of the market in milk 
and milk products6 has been amended several times; whereas, by reason of their number, their 
OJ L 
6 OJ L 148, 27.6.1968, p. 13. Regulation as last amended by Regulation (EC) No 1587/96 (OJ 
L 206, 16.8.1996, p. 21). 
86 
complexity and their dispersal among several Official Journals, these texts are difficult to use and 
thus lack the clarity which should be an essential feature of all legislation; whereas, under these 
circumstances, they should be consolidated in a new regulation and the aforementioned 
Regulation (EEC) No 804/68 should be repealed; whereas the essential rules of Council 
Regulations (EEC) No 986/687, No 987/688, No 508/719, No 1723/8110, No 2990/8211, No 
1842/83n and No 777/8713 have been incorporated into this Regulation, and should therefore be 
repealed; 
(35) Whereas the change from the arrangements in Regulation (EEC) No 804/68 to those in this 
Regulation could give rise to difficulties which are not dealt with in this Regulation; whereas, in 
order to deal with that eventuality, provision should be made for the Commission to adopt the 
necessary transitional measures; whereas the the Commission should, also be authorized to solve 
specific practical problems; 
7 OJ L 169, 18.7.1968, p. 4. Regulation as last amended by Regulation (EC) No 1802/95 (OJ L 
174,26.7.1995, p. 31). 
8 OJ L 169,18.7.1968, p. 6. Regulation as last amended by Regulation (EEC) No 1435/90 (OJ L 
138, 31.5.1990, p. 8). 
9 OJ L58, 11.3. 1971, p.l. 
10 OJ L 172, 30.6.1981, p. 14. Regulation as last amended by Regulation (EEC) No 863/84 (OJ L 
90, 1.4.1984, p. 23). 
11 OJ L 314,10.11.1982, p. 26. Regulation as last amended by Regulation (EC) No 2442/96 (OJ 
L 333,21.12.1996, p.l). 
12 OJ L 183, 7.7.1983, p. 1. Regulation as last amended by Regulation (EC) No 1958/97 (OJ L 
277, 10.10.1997, p. 1). 
13 OJ L 78,20.3.1987, p. 10. Regulation as last amended by Regulation (EEC) No 1634/91 (OJ L 
150, 15.6.1991, p. 26). 
87 
HAS ADOPTED THIS REGULATION: 
Article 1 
The common organization of the market in milk and milk products shall cover the following 
products: 
CN code Description of goods 
(a) 
0401 Milk and cream, not concentrated nor containing added sugar or other 
sweetening matter 
(b) 
0402 Milk and cream, concentrated or containing added sugar or other 
sweetening matter 
(c) 
0403 10 11 to 39 
0403 90 11 to 69 
Buttermilk, curdled milk and cream, yoghurt, képhir and other fermented 
or acidified milk and cream, whether or not concentrated or containing 
added sugar or other sweetening matter not flavoured nor containing 
added fruit, nuts or cocoa 
(d) 
0404 Whey, whether or not concentrated or containing added sugar or other 
sweetening matter; products consisting of natural milk constituents, 
whether or not containing added sugar or other sweetening matter, not 
elsewhere specified or included 
(e) 
ex 0405 Butter and other fats and oils derived from milk; dairy spreads of a fat 
content of more than 75% but less than 80%; 
(0 
0406 Cheese and curd 
(g) 
1702 19 00 Lactose and lactose syrup not containing added flavouring or colouring 
matter, containing by weight less than 99% lactose, expressed as 
anhydrous lactose, calculated on the dry matter 
(h) 
2106 90 51 Flavoured or coloured lactose syrup 
88 
G) 
ex 2309 Preparations of a kind used in animal feeding: 
Preparations and feedingstuffs containing products to which 
this Regulation applies, directly or by virtue of Council 
Regulation (EEC) No 2730/7514, except preparations and 
feedingstuffs to which Council Regulation (EEC) No 1766/9215 
applies 
14 OJ L 281, 1.11.1975, p. 20. Regulation as last amended by Regulation (EC) No 2931/95 (OJ L 
307, 20.12.1995, p. 10). 
15 OJ L 181, 1.7.1992, p. 21. Regulation as last amended by Regulation (EC) No 923/96 (OJ L 
126, 24.5.1996, p. 37). 
89 
CHAPTER I 
Internal market 
TITLE I 
Prices 
Article 2 
The milk year for all products listed in Article 1 shall begin on 1 July and end on 30 June of the 
following year. 
Article 3 
1. The target price in the Community for milk containing 3.7 % fat, delivered to dairies and expressed in 
ECU per 100 kg, shall be set at: 
- 29.66 for the period from 1 July 2000 until 30 June 2001, 
- 28,35 for the period from 1 July 2001 until 30 June 2002, 
- 27.04 for the period from 1 July 2002 until 30 June 2003, 
- 25.72 as from from 1 July 2003. 
The target price shall be deemed to be that price which it is aimed to obtain for the aggregate of 
producers' milk sales on the Community market and on external markets. 
2. The Council, acting in accordance with the procedure laid down in Article 43 (2) of the Treaty, may 
change the target price. 
Article 4 
1. The intervention prices in the Community, expressed in ECU per 100 kg, shall be set: 
(a) for butter at: 
- 315.89 for the period from 1 July 2000 until 30 June 2001, 
- 303.59 for the period from 1 July 2001 until 30 June 2002, 
- 291.28 for the period from 1 July 2002 until 30 June 2003, 
- 278.97 as from from 1 July 2003; 
(b) for skimmed milk powder at: 
- 197.81 for the period from 1 July 2000 until 30 June 2001, 
-190.11 for the period from 1 July 2001 until 30 June 2002, 
- 182.40 for the period from 1 July 2002 until 30 June 2003, 
90 
- 174.69 as from from 1 July 2003 
2. The Council, acting in accordance with the procedure laid down in Article 43 (2) of the Treaty, may 
change the intervention prices. 
Article 5 
The price system is established without prejudice to the implementation of the additional levy scheme. 
TITLE n 
INTERVENTION SYSTEM 
Article 6 
1. Where the market prices of butter are, in one or more Member States, at a level lower than 92 % of the 
intervention price for a representative period, buying-in by the intervention agencies shall be carried 
out in the Member State(s) concerned under an open invitation to tender on the basis of specifications 
to be determined. 
The buying-in price fixed by the Commission shall not be less than 90 % of the intervention price. 
Where market prices in the Member State(s) concerned are at a level equal to, or higher than, 92 % of 
the intervention price for a representative period, buying-in under a tendering procedure shall be 
suspended. 
2. Under paragraph 1, the intervention agencies may only buy in butter produced directly and 
exclusively from pasteurized cream in an approved undertaking in the Community, and 
(a) meeting the following requirements: 
- a minimum butterfat content, by weight, of 82 % and a maximum water content, by weight, of 
16%, 
- an age at the time of buying in not exceeding a maximum to be fixed, 
- conditions to be determined as regards the minimum quantity and packaging; 
(b) meeting certain requirements to be determined regarding in particular: 
- preservation; additional requirements may be laid down by the intervention agencies, 
- free fatty acid content, 
- peroxide content, 
- microbiological standard, 
- sensory characteristics (appearance, texture, taste and smell). 
National quality grades to be determined may be shown on the packaging of butter which meets 
national quality requirements. 
Flat rate transport costs shall be borne, under conditions to be fixed, by the intervention agency if the 
butter is delivered to a cold store situated at a distance greater than a distance to be determined from 
the place where the butter was in store. 
91 
3. Aid for private storage shall be granted for: 
- cream, 
- unsalted butter produced from cream or milk in an approved undertaking of the Community of a 
minimum butterfat content, by weight, of 82 % and a maximum water content, by weight, of 16 %, 
- salted butter produced from cream or milk in an approved undertaking of the Community of a 
minimum butterfat content, by weight, of 80 %, a maximum water content, by weight, of 16 % and 
a maximum salt content, by weight, of 2 %. 
The butter shall be classified according to national quality grades to be determined and shall be 
marked accordingly. 
The aid shall be fixed in the light of storage costs and the likely trend in prices for fresh butter and 
butter from stocks. Where, at the time of removal from storage, an adverse change unforeseeable at 
the time of entry into storage has occurred on the market, the aid may be increased. 
Private storage aid shall be subject to the drawing-up of a storage contract concluded, in accordance 
with provisions to be laid down, by the intervention agency of the Member State on whose territory 
the cream or butter qualifying for the aid is stored. 
Where the market situation so requires, the Commission may decide to remarket some or all of the 
cream or butter covered by private storage contracts. 
4. Butter bought in by the intervention agencies shall be disposed of at a" minimum price and under 
conditions to be determined so as to avoid disturbing the balance on the market and to ensure 
purchasers equal treatment and access to the butter to be sold. Where the butter put up for sale is 
intended for export, special conditions may be laid down to ensure that the product is not diverted 
from its destination and to take account of requirements specific to such sales. 
For butter kept in public storage which cannot be disposed of during a milk year under normal 
conditions, special measures may be taken. Where warranted by such measures, special measures 
shall also be taken with a view to maintaining possibilities of disposing of products which were 
subject to aid as referred to in paragraph 3. 
5. The intervention arrangements shall be applied so as to: 
maintain the competitive position of butter on the market, 
safeguard the original quality of the butter as far as possible, 
ensure storage as rationally as possible. 
92 
6. For the purposes of this Article: 
- "milk" shall mean cow's milk produced in the Community, 
- "cream" shall mean cream obtained directly and exclusively from milk. 
Article 7 
1. The intervention agency designated by each of the Member States shall, under conditions to be 
determined, buy in at the intervention price top quality skimmed milk powder made by the spray 
process and obtained in an approved undertaking in the Community, directly and exclusively from 
skimmed milk, which is offered to it during the period 1 March to 31 August and which: 
meets a minimum protein content of 35,6 % by weight of the non-fatty dry extract, 
meets preservation requirements to be laid down, 
meets conditions to be determined as regards the minimum quantity and packaging. 
However, intervention agencies shall also buy in skimmed milk powder whose protein content is at 
least 31,4 % and less than 35,6 %, of the non-fatty dry extract, provided that the other provisions laid 
down in the first subparagraph above are met. In that case, the buying-in price shall be equal to the 
intervention price less 1,75 % for each percentage point by which the protein content is lower than ' 
35,6 %. 
The intervention price shall be that in force on the day of manufacture of the skimmed milk powder 
and shall apply to skimmed milk powder delivered to the store designated by the intervention agency. 
Flat-rate transport costs shall be borne, under conditions to be fixed, by the intervention agency if the 
skimmed milk powder is delivered to a store situated at a distance greater than a distance to be 
determined from the place where the skimmed milk powder was in store. 
The skimmed milk powder may only be stored in stores meeting conditions to be fixed. 
2. The Commission may suspend the buying in of skimmed-milk powder provided for in paragraph 1 as 
soon as the quantities offered for intervention in the period from 1 March to 31 August each year 
exceed 109 000 tonnes. 
In that case buying-in by the intervention agencies may be carried out under an open standing 
invitation to tender on the basis of specifications to be determined. 
3. Aid for the private storage of skimmed milk powder of top quality, obtained in an approved 
undertaking in the Community directly and exclusively from skimmed milk may be granted, in 
particular, if trends in prices and stocks of the products indicate a serious imbalance in the market 
which could be avoided or reduced by means of seasonal storage. In order to be eligible for aid, the 
skimmed milk powder must meet conditions to be fixed. 
The aid shall be fixed in the light of storage costs and the likely trend in prices for skimmed milk 
powder. 
Private storage aid shall be subject to the drawing-up of a storage contract concluded, in accordance 
with provisions to be laid down, by the intervention agency of the Member State on whose territory 
the skimmed milk powder qualifying for the aid is stored. Where the market situation so requires, the 
Commission may decide to remarket some or all of the skimmed milk powder covered by private 
storage contracts. 
93 
4. Skimmed milk powder bought in by the intervention agency shall be disposed of, at a minimum price 
and under conditions to be determined so as to avoid disturbing the balance on the market and to 
ensure purchasers equal treatment and access to the skimmed milk powder to be sold. 
Where the skimmed milk powder put up for sale is intended for export, special conditions may be laid 
down to ensure that the product is not diverted from its destination and to take account of 
requirements specific to such sales. 
For skimmed milk powder kept in public storage which cannot be disposed of during a milk year 
under normal conditions, special measures may be taken. 
5. Within the meaning of this Article, "skimmed milk" shall mean skimmed milk obtained directly and 
exclusively from cow's milk produced in the Community. 
Article 8 
1. Under conditions to be determined, aid shall be granted for the private storage of: 
(a) Grana Padano cheese at least nine months old; 
(b) Parmigiano Reggiano cheese at least 15 months old; 
(c) Provolone cheese at least three months old; 
if these cheeses reach certain standards. 
2. The amount of private storage aid shall be fixed taking account of storage costs and the likely trend of 
market prices. 
3. The intervention agency designated by the Member State in which the said cheeses are produced and 
qualify to bear the designation of origin shall implement the measures taken pursuant to paragraph 1. 
The granting of private storage aid shall be subject to the conclusion of a storage contract with the 
intervention agency. The contract shall be drawn up under conditions to be determined. 
Where the market situation so requires, the Commission may decide that the intervention agency will 
remarket some or all of the cheese stored. 
Article 9 
1. Private storage aid may be granted for longkeeping cheeses and for cheeses which are manufactured 
from sheep and/or goat's milk and require at least six months for maturing, if for those cheeses price 
developments and the stock situation indicate a serious imbalance of the market which may be 
eliminated or reduced by seasonal storage. 
2. The amount of aid shall be fixed with reference to storage costs and the balance to be maintained 
between cheeses for which aid is granted and other cheeses coming on the market. 
3. Should the situation of the Community market so require, the Commission may decide to remarket 
some or all of the cheeses covered by private storage contracts. 
4. If, at the time the storage contract expires, the level of market prices for cheeses in store is higher than 
that prevailing when the contract was signed, a decision may be taken to adjust the amount of aid 
accordingly. 
94 
Article 10 
There shall be adopted in accordance with the procedure laid down in Article 41 : 
(a) the detailed rules for the application of this Title and, in particular, those for establishing the market 
prices for butter, 
(b) the amounts of aid for private storage referred to in this Title, 
(c) the other decisions and measures which may be taken by the Commission under this Title. 
TITLE III 
Marketing measures 
Article 11 
1. Aid shall be granted for skimmed milk and skimmed-milk powder intended for use as feedingstuffs, if 
these products reach certain standards. 
For the purposes of this Article, buttermilk and buttermilk powder shall be regarded as skimmed milk 
and skimmed-milk powder. 
2. Aid amounts shall be fixed taking into account the following factors: 
- the intervention price for skimmed-milk powder, 
- development of the supply situation as regards skimmed-milk and skimmed-milk powder, and 
developments in the use thereof as feed, 
-trends in calf prices, 
- trends in the market prices for competing proteins as compared with those for skimmed-milk 
powder. 
3. Detailed rules for the application of this Article, and in particular the conditions under which such aid 
may be granted and the amount of the aids, shall be determined by the Commission in accordance 
with the procedure laid down in Article41. 
Article 12 
1. Under the conditions determined in accordance with paragraphs 2 and 3, aid shall be granted for 
Community-produced skimmed milk processed into casein and caseinates, if such milk and the casein 
or caseinates produced from it reach certain standards. 
2. The aid may vary, according to whether the skimmed milk is processed into casein or caseinates and 
according to the quality of those products. 
95 
Aid shall be fixed taking into account the follwing factors: 
- the intervention price for skimmed-milk powder, or the market price for first-quality spray-process 
skimmed milk powder, if that price exceeds the intervention price, 
- the market prices for casein and caseinates on the Community and world markets. 
3. Detailed rules for the application of this Article, and in particular the conditions under which such aid 
may be granted and the amount of the aid, shall be adopted by the Commission in accordance with the 
procedure laid down in Article 41. 
Article 13 
1. When surpluses of milk products build up, or are likely to occur, the Commission may decide that aid 
shall be granted to enable butter and concentrated butter to be purchased at reduced prices by: 
(a) non-profit making institutions and organisations; 
(b) military forces and units of comparable status in the Member States; 
(c) manufacturers of pastry products and icecream; 
(d) manufacturers of other foodstuffs to be determined 
2. The measures provided for in this Article and detailed rules for its application which shall cover in 
particular the amount of the aid and the determination of the products in paragraph 1 (d), shall be 
adopted by the Commission in accordance with the procedure laid down in Article 41. 
Article 14 
1. Subject to the conditions laid down in paragraphs 3, 4 and according to paragraph 5, Community aid 
shall be granted for supplying to pupils in educational establishments certain processed milk products 
falling under CN codes 0401, 0403, 0404 90 and 0406 or CN code 2202 90. 
2. In addition to the Community aid, Member States may grant national aid for supplying the products 
specified in paragraph 1 to pupils in educational establishments. 
3. In the case of whole milk, the Community aid shall be equal to 95% of the target price for milk. In the 
case of other milk products, the amounts of aid shall be determined taking into account the milk 
content of the products concerned. 
4. The aid referred to in paragraph 1 shall be granted on a maximum quantity of 0.25 litre of milk 
equivalent per pupil and per day. 
5. The detailed rules for the implementation of this Article and the amount of aid shall be adopted by the 
Commission in accordance with the procedure laid down in Article 41. 
96 
TITLE IV 
Direct payments 
Article 15 
1. Producers shall qualify for a dairy cow premium. It shall be granted per calendar year and per holding. 
2. The amount per premium unit shall be set at: 
- ECU 25 for the calendar year 2000, 
- ECU 50 for the calendar year 2001, 
- ECU 75 for the calendar year 2002 
- ECU 100 for the calendar year 2003 and the subsequent calendar years. 
It shall be supplemented by the amounts per premium unit set out in Annex IV of Regulation (EC) 
No 16 [beef] for the Member State and the calendar year concerned. 
3. The number of premium units to which a producer shall be entitled, shall be determined by dividing 
the individual reference quantity for milk, expressed in tonnes, available on the holding on 31 March 
of the calendar year concerned by the figure 5.8 representing the average milk yield in the 
Community. 
For the purpose of the preceding subparagraph, individual reference quantities which have been 
subject of temporary transfers in accordance with Article 6 of Regulation (EEC) No 3950/92 on 31 
March of the calendar year concerned shall be deemed to be available on the holding of the transferee 
for that calendar year. 
Where, on 31 March of a calendar year, the sum of all individual reference quantities in a Member 
State exceeds the sum of the corresponding total quantities of that Member State fixed for the twelve 
months period 1999/2000, the Member State concerned shall, on the basis of objective criteria, take 
the neccessary steps to reduce proportionately the total number of premium units on its territory for 
the calendar year concerned. 
4. For the purposes of this title, the definitions of "producer" and "holding" laid down in Article 9 of 
Regulation (EEC) No 3950/92 shall apply. 
Article 16 
1. Member States shall make additional payments to producers in their territory within the limits of the 
global amounts set out in Annex I and on a yearly basis. Such payments shall be made according to 
objective criteria including, in particular, the relevant production structures and conditions, and in 
such a way as to ensure equal treatment between producers and to avoid market and competition 
distortions. Moreover, such payments shall not be linked to fluctuations of market prices. 
2. Additional payments may be made in the form of premium supplements (Article 17) and/or area 
payments (Article 18). 
16 OJ L 
97 
Article 17 
1. Premium supplements may only be granted as a supplementary amount per dairy cow premium unit 
referred to in Article 15 (2). 
2. The total amount of dairy cow premium and premium supplement, including any other dairy cow 
payments under Regulation (EC) No (beef), which may be granted per premium unit and 
calendar year shall not exceed: 
- ECU 90 for the calendar year 2000, 
- ECU 180 for the calendar year 2001, 
- ECU 270 for the calendar year 2002, 
- ECU 330 for the calendar year 2003 and the subsequent calendar years. 
Article 18 
1. Area payments shall be granted per hectare of permanent pasture: 
(a) which is available to a producer during the calendar year concerned, 
(b) which is not used to comply with the specific stocking density requirements referred to in Article 
14 (3) of Regulation (EC) No [beef], and 
(c) in respect of which no payments under the support system laid down for producers of certain 
arable crops, under the aid system for dried fodder and under Community aid schemes for other 
permanent or horticultural crops are claimed for the same year. 
The area of permanent pasture in a region for which area payments may be granted shall not exceed 
the relevant regional base area. 
2. The regional base areas shall be established by Member States in accordance with Article 15 of 
Regulation (EC) No [beef]. 
3. The maximum area payment per hectare which may be granted, including area payments pursuant to 
Article 15 of Regulation (EC) No [beef], shall not exceed: 
- ECU 210 for the calendar year 2000, 
- ECU 280 for the calendar year 2001, 
- ECU 350 for the calendar year 2002 and the subsequent calendar years. 
4. For the purposes of this Article, "permanent pasture" shall mean non-rotational land used for grass 
production (sown or natural) on a permanent basis (five years or longer). 
Article 19 
1. Before 1 January 2000, Member States shall provide the Commission with detailed information on 
their national arrangements concerning the granting of additional payments. Any changes of these 
arrangements shall be communicated to the Commission not later than one month following adoption. 
2. Before 1 April 2004, Member States shall submit to the Commission detailed reports on the 
implementation of Articles 16, 17 and 18. 
98 
Before 1 January 2005, the Commission shall evaluate the implementation of Articles 16 to 18 and 
examine the distribution of Community funds between Member States as provided for in Annex I. If 
necessary, the Commission shall make appropriate proposals to the Council. 
Article 20 
Direct payments under this title shall be made from 16 October of the calendar year concerned as soon as 
the legally required inspections are carried out and, save in duly justified exceptional cases, no later than 
30 June of the following year. 
Article 21 
The amounts of the direct payments set out in this title may be changed in the light of developments in 
production, productivity and the markets, according to the procedure laid down in Article 43 (2) of the 
Treaty. 
Article 22 
Where, by or on the basis of Community law, the administration of bovine somatrophin to dairy cows is 
not authorized or where the availability of that substance on farms is regulated otherwise, the 
Commission shall, in accordance with the procedure laid down in Article 41, adopt measures which shall 
be analogous to those provided for in Article 21 of Regulation (EC) No [beef]. 
Article 23 
Detailed rules for the application of this title shall be adopted by the Commission in accordance with the 
procedure laid down in Article 41. 
Article 24 
The expenditure incurred in granting the direct payments provided for in this title shall be considered as 
relating to intervention measures within the meaning of Article 2 (2) of Regulation (EC) No 
[EAGGF]. 
CHAPTER II 
Trade with third countries 
Article 25 
1. Imports into the Community of any of the products listed in Article 1 shall be subject to the 
presentation of an import licence. Exports from the Community of any such products may be made 
subject to presentation of an export licence. 
2. Licences shall be issued by Member States to any applicant, irrespective of his place of establishment 
in the Community and without prejudice to the measures taken for the application of Articles 28, 29 
and 30. 
Import and export licences shall be valid throughout the Community. Such licences shall be issued 
subject to the lodging of a security guaranteeing that the products are imported or exported during the 
term of validity of the licence; except in cases of force majeure, the security shall be forfeited in 
99 
whole or in part if import or export is not carried out, or is carried out only partially, within that 
period. 
3. The following shall be adopted by the Commission in accordance with the procedure laid down in 
Article 41: 
(a) the list of products in respect of which export licences are required; 
(b) the term of validity of the licences; and 
(c) the other detailed rules for the application of this Article. 
Article 26 
Unless this Regulation provides otherwise, the rates of duty in the Common Customs Tariff shall apply 
to the products listed in Article 1. 
Article 27 
1. In order to prevent or counteract adverse effects on the market in the Community which may result 
from imports of certain products listed in Article 1, imports of one or more of such products at the 
rate of duty referred to in Article 26 shall be subject to payment of an additional import duty if the 
conditions set out in Article 5 of the Agreement on Agriculture concluded in accordance with Article 
228 of the Treaty in the framework of the Uruguay Round of multilateral trade negotiations have been 
fulfilled unless the imports are unlikely to disturb the Community market, or where the effects would 
be disproportionate to the intended objective. 
2. The trigger prices below which an additional duty may be imposed shall be those which are forwarded 
by the Community to the World Trade Organization. 
The trigger volumes to be exceeded in order to have the additional import duty imposed shall be 
determined particularly on the basis of imports into the Community in the three years preceding the 
year in which the adverse effects referred to in paragraph 1 arise or are likely to arise. 
3. The import prices to be taken into consideration for imposing an additional import duty shall be 
determined on the basis of the cif import prices of the consignment under consideration. 
Cif import prices shall be checked to that end against the representative prices for the product on the 
world market or on the Community import market for that product. 
4. The Commission shall adopt detailed rules for the application of this Article in accordance with the 
procedure laid down in Article 41. Such detailed rules shall specify in particular: 
(a) the products to which additional import duties shall be applied under the terms of Article 5 of the 
Agreement on Agriculture; 
(b) the other criteria necessary to ensure application of paragraph 1 in accordance with Article 5 of 
the Agreement on Agriculture. 
Article 28 
1. Tariff quotas for the products listed in Article 1 resulting from agreements concluded in accordance 
with Article 228 of the Treaty or from any other act of the Council shall be opened and administered 
in accordance with detailed rules adopted under the procedure laid down in Article 41. 
100 
2. Quotas may be administered by applying one of the following methods or a combination of them: 
- method based on the chronological order of the lodging of applications (using the 'first come, first 
served' principle), 
- method of distribution in proportion to the quantities requested when the applications were lodged 
(using the 'simultaneous examination' method), 
- method based on taking traditional trade patterns into account (using the 'traditional importers/new 
arrivals' method). 
Other appropriate methods may be adopted. 
They shall avoid any discrimination between the operators concerned. 
3. The method of administration adopted shall, where appropriate, give due weight to the supply 
requirements on the Community market and the need to safeguard the equilibrium of that market, 
whilst at the same time possibly drawing on methods which may have been applied in the past to 
quotas corresponding to those referred to in paragraph 1, without prejudice to the rights resulting from 
agreements concluded in the framework of the Uruguay Round trade negotiations. 
4. The detailed rules referred to in paragraph 1 shall provide for annual quotas, suitably phased over the 
year, if necessary, to be opened, determine the administrative method to be applied and, where 
appropriate, include provisions regarding: 
(a) guarantees covering the nature, provenance and origin of the product; 
(b) recognition of the document used for verifying the guarantees referred to in (a); and 
(c) the conditions under which import licences are issued and their term of validity. 
Article 29 
1. Where an agreement concluded in accordance with Article 228 of the Treaty provides for the total or 
partial management of a tariff quota opened by a third country for the products referred to in Article 
1, the management method to be applied and detailed rules relating to that method shall be adopted in 
accordance with the procedure provided for in Article 41. 
2. Quotas may be managed using one of the following methods or a combination thereof: 
- order in which applications are submitted ('first come, first served' basis), 
- allocation in proportion to quantities requested when applications are submitted ('simultaneous 
examination' method), 
- traditional trade flows ('traditional importers/new arrivals' method). 
Other appropriate measures may be adopted, in particular ones which guarantee the full use of the 
possibilities available under the quota concerned. 
They shall avoid any discrimination between the operators concerned. 
Article 30 
1. To the extent necessary to enable the products listed in Article 1 to be exported without further 
processing or in the form of goods listed in Annex II if they are products listed in Article 1 (a), (b), 
101 
(c), (d), (e) and (g), on the basis of prices for those products on the world market and within the limits 
resulting from agreements concluded in accordance with Article 228 of the Treaty, the difference 
between those prices and prices in the Community may be covered by export refunds. 
Export refunds on the products listed in Article 1 in the form of goods listed in the Annex II may not 
be higher than those applicable to such products exported without further processing. 
2. The method to be adopted for the allocation of the quantities which may be exported with a refund 
shall be the method which: 
(a) is most suited to the nature of the product and the situation on the market in question, allowing 
the most efficient possible use of the resources available, account being taken of the efficiency 
and structure of Community exports without, however, creating discrimination between large 
and small operators; 
(b) is least cumbersome administratively for operators, account being taken of administration 
requirements; 
(c) prevents any discrimination between the operators concerned. 
3. Refunds shall be the same for the whole Community. 
They may vary according to destination, where the world market situation or the specific 
requirements of certain markets make this necessary. 
Refunds shall be fixed by the Commission in accordance with the procedure laid down in Article 41. 
Refunds may be fixed: 
(a) at regular intervals; 
(b) by invitation to tender for products for which that procedure was provided for in the past. 
Except where fixed by tender, the list of products on which an export refund is granted and the 
amount of such refund shall be fixed at least once every four weeks. The amount of the refund may, 
however, remain at the same level for more than four weeks and may, where necessary, be adjusted in 
the intervening period by the Commission at the request of a Member State or on its own initiative. 
However, for products listed in Article 1 and exported in the form of goods listed in the Annex II, the 
refund may be fixed according to another timetable determined in accordance with the procedure 
referred to in Article 16 of Council Regulation (EC) No 3448/93l7. 
4. The following shall be taken into account when refunds are being fixed for the products listed in 
Article 1 and exported without further processing: 
(a) the existing situation and future trends with regard to: 
- prices and availabilities for milk and milk products on the Community market; 
- prices of milk and milk products on the world market; 
(b) the most favourable marketing costs and transport costs from Community markets to Community 
ports or other places of export together with forwarding costs to the countries of destination; 
demand on the Community market; 
(c) the objectives of the common organization of the markets in milk and milk products, which are 
to ensure a balanced situation and natural development regarding prices and trade on these 
markets; 
OJ L 318, 20.12.1993, p. 31. 
102 
(d) limits resulting from agreements concluded in accordance with Article 228 of the Treaty; 
(e) the importance of avoiding disturbances on the Community market; 
(f) the economic aspect of the proposed exports. 
Account shall also be taken in particular of the need to establish a balance between the use of 
Community basic agricultural products for export as processed goods to third countries, and the use of 
products from those countries admitted for inward processing. 
5. For the products referred to in Article 1 and exported as such: 
(a) the prices in the Community referred to in paragraph 1 shall be determined taking account of the 
prices prevailing which prove to be the most favourable as regards export; 
(b) the prices on the world market referred to in paragraph 1 shall be determined taking account in 
particular of: 
- the prices on third-country markets; 
- the most favourable prices in third countries of destination for third-country imports; 
- producer prices recorded in exporting third countries, account being taken, where appropriate, 
of subsidies granted by those countries; 
- free-at-frontier offer prices. 
6. Refunds shall be granted for the products referred to in paragraph 1 and exported as such only on 
application and on presentation of the relevant export licence. 
7. The refund applicable to exports of products listed in Article 1 and exported as such shall be that 
applicable on the day of application for the licence and, in the case of a differentiated refund, that 
applicable on the same day for: 
(a) the destination indicated on the licence, or where appropriate 
(b) the actual destination if it differs from the destination indicated on the licence. In that case, the 
amount applicable may not exceed the amount applicable for the destination indicated on the 
licence. 
Appropriate measures may be taken to prevent abuse of the flexibility provided for in this paragraph. 
8. Paragraphs 6 and 7 may be made to apply to products listed in Article 1 and exported in the form of 
goods listed in Annex II in accordance with the procedure laid down in Article 16 of Regulation (EC) 
No 3448/93. 
9. Paragraphs 6 and 7 may be waived in the case of products listed in Article 1 on which refunds are paid 
under food-aid operations, in accordance with the procedure laid down in Article 41. 
10. The refund shall be paid upon proof that: 
- the products are of Community origin, 
- the products have been exported from the Community, and 
- in the case of a differentiated refund, the products have reached the destination indicated on the 
licence or another destination for which a refund was fixed, without prejudice to paragraph 7 (b). 
103 
Exceptions may be made to this rule in accordance with the procedure laid down in Article 41, 
provided conditions are laid down which offer equivalent guarantees. 
11. Without prejudice to paragraph 10 first indent, in the absence of a derogation granted in accordance 
with the procedure laid down in Article 41, no export refund shall be granted on products which are 
imported from third countries and re-exported to third countries. 
1?. As regards the products referred to in Article 1 and exported in the form of the goods listed in Annex 
II, paragraphs 10 and 11 shall apply only to goods falling within the following CN codes: 
- 0405 20 30 (dairy spreads with a fat content between 60 and 75%), 
- 1806 90 60 to 1806 90 90 (certain products containing cocoa), 
- 1901 (certain food preparations of flour, etc.), 
- 2106 90 98 (certain food preparations not elsewhere specified), 
having a high milk-product content. 
13. Compliance with the limits on volumes arising from agreements concluded in accordance with 
Article 228 of the Treaty shall be ensured on the basis of the export certificates issued for the 
reference periods provided for therein and applicable to the products concerned. With regard to 
compliance with the obligations arising under the Agreement on Agriculture, the ending of a 
reference period shall not affect the validity of export licences. 
14. Detailed rules for the application of this Article, including the arrangements for redistributing 
unallocated or unused exportable quantities, shall be adopted by the Commission in accordance with 
the procedure laid down in Article 41. However, the detailed rules on the application of paragraphs 8, 
10, 11 and 12 for products referred to in Article 1 and exported in the form of goods listed in Annex 
II shall be adopted in accordance with the procedure laid down in Article 16 of Regulation (EC) No 
3448/93. 
Article 31 
1. To the extent necessary for the proper working of the common organization of the market in milk and 
milk products, the Council, acting by a qualified majority, on a proposal from the Commission, may, 
in special cases, prohibit in whole or in part the use of inward processing arrangements in respect of 
products listed in Article 1 which are intended for the manufacture of products listed in that Article or 
of goods listed in Annex II. 
2. By way of derogation from paragraph 1, if the situation referred to in paragraph 1 arises with 
exceptional urgency and the Community market is disturbed or is liable to be disturbed by the inward 
processing arrangements, the Commission shall, at the request of a Member State or on its own 
initiative, decide upon the necessary measures; the Council and the Member States shall be notified of 
such measures, which shall be valid for no more than six months and shall be immediately applicable. 
If the Commission receives a request from a Member State, it shall take a decision thereon within a 
week following receipt of the request. 
3. Measures decided on by the Commission may be referred to the Council by any Member State within 
a week of the day on which they were notified. The Council, acting by a qualified majority, may 
confirm, amend or repeal the Commission decision. 
If the Council has not acted within three months, the Commission decision shall be deemed to have 
been repealed. 
104 
Article 32 
1. The general rules for the interpretation of the combined nomenclature and the special rules for its 
application shall apply to the tariff classification of products covered by this Regulation; the tariff 
nomenclature resulting from the application of this Regulation shall be incorporated in the Common 
Customs Tariff. 
2. Save as otherwise provided for in this Regulation or in provisions adopted pursuant thereto, the 
following shall be prohibited in trade with third countries: 
- the levying of any charge having equivalent effect to a customs duty, 
- the application of any quantitative restriction or measure having equivalent effect. 
Article 33 
1. Where, for one or more of the products listed in Article 1, the free-at-frontier price significantly 
exceeds the level of Community prices and where that situation is likely to continue, thereby 
disturbing or threatening to disturb the Community market, the measures provided for in paragraph 5 
may be taken. 
2. A significant excess within the meaning of paragraph 1 shall exist when the free-at-frontier price 
exceeds the intervention price fixed for the product in question, increased by 15 %, or, as regards 
products for which there is no intervention price, a price derived from the intervention price, to be 
determined in accordance with the procedure laid down in Article 41, taking account of the nature and 
composition of the product in question. 
3. The situation in which the free-at-frontier price significantly exceeds the level of prices is likely to 
continue when an imbalance exists between supply and demand and that imbalance is likely to 
continue, in view of foreseeable trends in production and market prices. 
4. The Community market is disturbed or under threat of disturbance by the situation referred to in this 
Article when the high level of prices in international trade: 
- hinders imports of milk products into the Community, or 
- causes milk products to leave the Community, 
so that security of supply is no longer ensured or threatens to be no longer ensured in the Community. 
5. Where the conditions listed in paragraphs 1 to 4 are met, total or partial suspension of the import 
duties and/or collection of export charges may be decided on in accordance with the procedure laid 
down in Article 41. Detailed rules for the application of this Article shall, if necessary, be adopted by 
the Commission in accordance with the same procedure. 
Article 34 
1. If, by reason of imports or exports, the Community market in one or more of the products listed in 
Article 1 is affected by, or is threatened with, serious disturbance likely to jeopardize the achievement 
of the objectives set out in Article 39 of the Treaty, appropriate measures may be applied in trade with 
third countries until such disturbance or threat of disturbance has ceased. 
The Council, acting by a qualified majority, on a proposal from the Commission, shall adopt general 
rules for the application of this paragraph and shall define the cases in which and the limits within 
which Member States may take protective measures. 
105 
2. If the situation referred to in paragraph 1 arises, the Commission shall, at the request of a Member 
State or on its own initiative, decide upon the necessary measures; the Member States shall be notified 
of such measures, which shall be immediately applicable. If the Commission receives a request from a 
Member State, it shall take a decision thereon within three working days following receipt of the 
request. 
3. Measures decided upon by the Commission may be referred to the Council by any Member State 
within three working days of the day on which they were notified. The Council shall meet without 
delay. It may, acting by a qualified majority, amend or repeal the measure in question within one 
month following the day on which it was referred to the Council. 
4. This Article shall be applied having regard to the obligations arising from agreements concluded in 
accordance with Article 228 (2) of the Treaty. 
CHAPTER III 
GENERAL PROVISIONS 
Article 35 
In order to take account of the restrictions on free circulation which may result from the application of 
measures for combating the spread of diseases in animals, exceptional measures of support for the 
market affected by those restrictions may be taken in accordance with the procedure laid down in Article 
41. Those measures may only be taken in so far as, and for as long as, is strictly necessary for the 
support of that market. 
Article 36 
Save as otherwise provided in this Regulation, Articles 92 to 94 of the Treaty shall apply to the 
production of and trade in the products listed in Article 1. 
106 
Article 37 
1. Subject to the provisions of Article 92 ( 2 ) of the Treaty, aids the amount of which is fixed on the 
basis of the price or quantity of products listed in Article 1 shall be prohibited. 
2. National measures permitting equalisation between the prices of products listed in Article 1 shall also 
be prohibited. 
Article 38 
Without prejudice to the application of Articles 92 to 94 of the Treaty, a Member State may impose a 
promotional levy on its milk producers in respect of marketed quantities of milk or milk equivalent in 
order to finance the measures on promoting consumption in the Community, expanding the markets for 
milk and milk products and improving quality. 
Article 39 
Member States and the Commission shall communicate to each other the information necessary for 
implementing this Regulation. Rules for the communication and distribution of such information shall be 
adopted by the Commission in accordance with the procedure laid down in Article 41. 
Article 40 
A Management Committee for Milk and Milk Products (hereinafter called the "Committee") shall be 
established, composed of representatives of Member States and chaired by a representative of the 
Commission. 
Article 41 
1. Where the procedure laid down in this Article is to be followed, the chairman shall refer the matter to 
the Committee either on his own initiative or at the request of the representative of a Member State. 
2. The representative of the Commission shall submit to the Committee a draft of the measures to be 
taken. The Committee shall deliver its opinion on the draft within a time limit which the Chairman 
may lay down according to the urgency of the matter. The opinion shall be delivered by the majority 
laid down in Article 148 (2) of the Treaty in the case of decisions which the Council is required to 
adopt on a proposal from the Commission. The votes of the representatives of the Member States 
within the Committee shall be weighted in the manner set out in that Article. The Chairman shall not 
vote. 
3. The Commission shall adopt measures which shall apply immediately. However, if these measures are 
not in accordance with the opinion of the Committee, they shall be communicated by the Commission 
to the Council forthwith. In that event the Commission may defer application of the measures which it 
has decided for not more than one month from the date of such communication. 
The Council, acting by a qualified majority, may take a different decision within one month. 
Article 42 
The Committee may consider any other question referred to it by its chairman either on his own initiative 
or at the request of the representative of a Member State. 
107 
Article 43 
This Regulation shall be so applied that appropriate account is taken, at the same time, of the objectives 
set out in Articles 39 and 110 of the Treaty. 
Article 44 
Regulation (EC) No [CAP financing] and the provisions adopted in implementation thereof shall 
apply to the products listed in Article 1. 
CHAPTER IV 
Transitional and final provisions 
Article 45 
1. Regulations (EEC) No 804/68, No 986/68, No 987/68, No 508/71, No 1723/81, No 2990/82, No 
1842/83 and No 777/87 are hereby repealed. 
2. References to the Regulation (EEC) No 804/68 shall be construed as references to this Regulation and 
should be read in accordance with the correlation table in Annex III. 
Article 46 
The Commission shall adopt, in accordance with the procedure laid down in Article 41 : 
- the measures required to facilitate the transition from the arrangements provided in Regulation (EEC) 
No 804/68 to those established by this Regulation, 
- the measures required to resolve specific practical problems. Such measures - if duly justified - may 
derogate from certain parts of this Regulation. 
Article 47 
This Regulation shall enter into force on the day of its publication in the Official Journal of the European 
Communities. 
It shall apply as from 1 January 2000, except Article 19 (1) which shall apply from the entry into force 
of this Regulation. 
This Regulation shall be binding in its entirety and directly applicable in all Member States. 
Done at... 
For the Council 
The President 
108 
ANNEX I 
Additional payments: global amounts referred to in Article 16 (expressed in Mio. ECU) 
Belgium 
Denmark 
Germany 
Greece 
Spain 
France 
Ireland 
Italy 
Luxembourg 
Netherlands 
Austria 
Portugal 
Finland 
Sweden 
United Kingdom 2000 
6.4 
8.7 
54.2 
1.2 
10.8 
47.2 
10.2 
19.3 
0.5 
21.6 
5.4 
3.6 
4.7 
6.4 
28.4 2001 
12.8 
17.3 
108.0 
2.4 
21.6 
93.9 
20.3 
38.5 
1.0 
42.9 
10.7 
7.3 
9.3 
12.8 
56.5 2002 
19.3 
25.9 
162.2 
3.7 
32.4 
141.1 
30.5 
57.8 
1.6 
64.5 
16.0 
10.9 
13.9 
19.2 
84.9 2003 
and subsequent 
calendar years 
25.7 
34.5 
216.0 
4.9 
43.1 
187.9 
40.7 
77.0 
2.1 
85.8 
21.3 
14.5 
18.6 
25.6 
113.1 
109^ 
ANNEX II (previously ANNEX) ' 
CNcode Description of goods 
0403 10 51 to 99 
and 
0403 90 71 to 99 
Buttermilk, curdled milk and cream, yoghurt, képhir and other fermented or acidified milk and cream, whether or not concentrated or 
containing added sugar or other sweetening matter, flavoured or containing added fruit or cocoa 
ex 0405 Butter and other fats and oils derived from milk; dairy spreads: 
0405 20 - Dairy spreads 
0405 20 10 - - of a fat content, by weight, of 39% or more but less than 60% 
0405 20 30 - - of a fat content, by weight, of 60% or more but not exceeding 75% 
ex 1517 Margarine; edible mixtures or preparations of animal or vegetable fats or oils or fractions of different fats or oils of this chapter, other 
than edible fats or oils or their fractions of CN code No 1516: 
1517 10 - Margarine, excluding liquid margarine: 
1517 10 10 - - containing more than 10% but not more than 15% by weight of milk fats 
1517 90 - Other: 
1517 90 10 - - Containing more than 10% but not more than 15% by weight of milk fats 
ex 1702 Lactose and lactose syrup: 
1702 11 00 - - containing by weight 99% or more lactose, expressed as anhydrous lactose, calculated on the dry matter 
ex 1704 Sugar confectionery (including white chocolate), not containing cocoa: 
ex 1704 90 - Other, excluding liquorice extract containing more than 10% by weight of sucrose but not containing other added substances 
110 
ex 1806 Chocolate and other food preparations containing cocoa, excluding cocoa powder sweetened solely by the addition of sucrose of CN code 
1806 10 
ex 1901 Malt extract; food preparations of flour, meal, starch or malt extract, not containing cocoa or containing less than 40% by weight of cocoa 
calculated on a totally defatted basis, not elsewhere specified or included; food preparations of goods of CN codes 0401 to 0404, not 
containing cocoa or containing less than 5% by weight of cocoa calculated on a totally defatted basis, not elsewhere specified or included: 
1901 10 00 - Preparations for infant use, put up for retail sale 
1901 20 00 - Mixes and doughs for the preparation of bakers'wares of CN code 1905 
1901 90 - Other: 
Other: 
1901 90 91 - - - Containing no milk fats, sucrose, isoglucose, glucose or starch or containing less than 1.5% milk fat, 5% sucrose 
(including invert sugar) or isoglucose, 5% glucose or starch, excluding food preparations in powder form of goods of 
CN codes 0401 to 0404 
190190 99 - - -Other 
ex 1902 Pasta, whether or not cooked or stuffed (with meat or other substances) or otherwise prepared, such as spaghetti, macaroni, noodles, 
lasagne, gnocchi, ravioli, cannelloni; couscous, whether or not prepared: 
Uncooked pasta not stuffed or otherwise prepared: 
1902 19 - - Other 
1902 20 - Stuffed pasta, whether or not cooked or otherwise prepared: 
Other: 
1902 20 91 - - - Cooked 
111 
1902 20 99 - - - Other 
1902 30 - Other pasta 
1902 40 - Couscous: 
1902 40 90 - - Other 
1904 Prepared food obtained by the swelling or roasting of cereals or cereal products (for example, com flakes); cereals (other than maize 
(com)) in grain form or in the form of flakes or other worked grains (except flour and meal),_pre-cooked or otherwise prepared, not 
elsewhere specified or included 
1905 Bread, pastry, cakes, biscuits and other bakers' wares, whether or not containing cocoa; communion wafers, empty cachets of a kind 
suitable for pharmaceutical use, sealing wafers, rice paper and similar products: 
Crispbread 
Gingerbread and the like 
Sweet biscuits; waffles and wafers 
Rusks, toasted bread and similar toasted products 
Other: 
Other: 
Waffles and wafers with a water content exceeding 10% by weight 
Biscuits 
Extruded or expanded products, savoury or salted 
With added sweetening matter 
- - - - Other 
Other vegetables prepared or preserved otherwise than by vinegar or acetic acid, frozen, other than products oh heading No 2006: 
Potatoes: 
Other: 
In the form of flour, meal or flakes 
112 1905 10 00 
1905 20 
1905 30 
1905 40 
1905 90 
1905 90 40 
1905 90 45 
1905 90 55 
1905 90 60 
1905 90 90 
ex 2004 
2004 10 
2004 10 91 
ex 2005 Other vegetables prepared or preserved otherwise than by vinegar or acetic acid, not frozen, other than products of heading No 2006: 
2005 20 - Potatoes: 
2005 20 10 - - In the form of flour, meal or flakes 
ex 2008 Fruit, nuts and other edible parts of plants, otherwise prepared or preserved, whether or not containing added sugar or other sweetening 
matter or spirit not elsewhere specified or included: 
Nuts, ground-nuts and other seeds, whether or not mixed together: 
200811 - - Ground-nuts: 
2008 1110 - - - Peanut butter 
2105 00 Ice cream and other edible ice, whether or not containing cocoa 
ex 2106 Food preparations not elsewhere specified or included, excluding compound alcoholic preparations falling within CN code 2106 90 20 
and flavoured or coloured sugar syrups falling within CN codes 2! 06 90 30,2106 90 51, 2106 90 55 and 2106 90 59 
ex 2202 Waters, including mineral waters and aerated waters, containing added sugar or other sweetening matter or flavoured, and other non­
alcoholic beverages, not including fruit and vegetable juices of CN code No 2009: 
2202 90 - Other: 
Other, containing by weight of fat obtained from the products of CN codes 0401 to 0404: 
2202 90 91 - - - Less than 0,2% 
2202 90 95 - - - 0,2% or more but less than 2% 
2202 90 99 - - - 2% or more 
ex 2208 Undenatured ethyl alcohol of an alcoholic strength by volume of less than 80% vol; spirits, liqueurs and other spirituous beverages: 
2208 70 - Liqueurs and cordials 
2208 90 - Other: 
other spirits and spirituous beverages, in containers holding: 
113 
2 litres or less: 
other: 
2208 90 69 - - - - - other spirituous beverages 
more than 2 litres: 
2208 90 78 - - - - other spirituous beverages 
ex 3302 Mixtures of odoriferous substances and mixtures (including alcoholic solutions) with a basis of one or more of these substances, of a kind 
used as raw materials in industry; other preparations based on odoriferous substances, of a kind used for the manufacture of beverages: 
3302 10 - of a kind used in the food or drink industries: 
of a kind used in the drink industries: 
3302 10 29 - - - - - other 
3501 Casein, caseinates and other casein derivatives; casein glues 
ex 3502 Albumins, albuminates and other albumin derivatives: 
3502 20 - milk albumin, including concentrates of two or more whey proteins: 
other: 
3502 20 91 ... dried (for example in sheets, scales, flakes, powder) 
3502 20 99 - - - other 
114 
ANNEX III 
Correlation table 
Regulation 804/68 I This Regulation 
Article 1 Article 1 
Article 2 Article 2 
Article 3 (1) and 2 Article 3(1) 
Article 3 (3) 
Article 3 (4) Article 3 (2) 
Article 4 
Article 5 Article 4(1) 
Article 5a 
Article 5c Article 5 
Article 6 (2) Article 6 (3) 
Article 6 (3) Article 6 (4) 
Article 6 (4) Article 6 (5) 
Article 6 (6) Article 10 
Article 7(1) Article 7(1) 
Article 7 (2) Article 7 (3) 
Article 7 (3) first subparagraph Article 7 (4) first subparagraph 
Article 7 (3) fourth subparagraph Article 7 (4) second subparagraph 
Article 7 (4) Article 7 (5) 
Article 7 (5) Article 10 
Article 7a 
Article 8 (1) to (3) Article 8 (1) to (3) 
Article 8 (4) Article 10 
Article 9 (3) Article 10 
Article 10(1) Article 11(1) 
Article 10 (2) 
Article 10 (3) Article 11 (3) 
Article 11(1) Article 12(1) 
Article 11 (2) 
Article 11 (3) Article 12 (3) 
Article 12 (3) Article 13 (2) 
Article 13 Article 25 
Article 14 Article 26 
Article 15 Article 27 
Article 16 Article 28 
Article 16a Article 29 
Article 17 Article 30 
Article 18 Article 31 
Article 19 Article 32 
Article 20 Article 33 
Article 21 Article 34 
Article 22 
Article 22a Article 35 
Article 23 Article 36 
Article 24 Article 37 
Article 24a Article 38 
Article 25 
Article 26 (1) and (2) Article 14 (1) and (2) 
115 
Article 26 (4) 
Article 26 (5) 
Article 28 
Article 29(1) 
Article 29 (2) 
Article 30 
Article 31 
Article 32 
Article 33 
Article 34 
Article 35 
Article 36 
Article 37 (1) 
Annex Article 14 (5) 
Article 39 
Article 40 
Article 41 
Article 42 
Article 43 
Article 44 
Article 47 
Annex II 
116 
Proposal for a 
COUNCIL REGULATION (EC) No /... 9g/Q1}, (CNS) 
of 199. 
amending Regulation (EEC) No 3950/92 establishing an additional levy in the milk 
and milk products sector 
THE COUNCIL OF THE EUROPEAN UNION, 
Having regard to the Treaty establishing the European Community, and in particular 
Article 43 thereof, 
Having regard to the proposal from the Commission , 
2 
Having regard to the opinion of the European Parliament, 
Whereas, pursuant to Council Regulation (EEC) No 3950/92 of 28 December 1992, 
establishing an additional levy in the milk and milk products sector3, the additional 
levy scheme, which had been originally been introduced from 2 April 1984 in the said 
sector, was extended by another seven twelve months periods; whereas the purpose of 
this scheme was to reduce the imbalance between supply and demand on the milk and 
milk-products market and the resulting structural surpluses; whereas the scheme 
remains necessary in the future in order to achieve a better market balance; whereas it 
should therefore continue to be applied for six further consecutive twelve month 
periods starting on 1 April 2000; 
OJNoC 
2 OJNoC 
3 OJ No L 405, 31.12.1992, p. 1. Regulation as last amended by Commission Regulation (EC) No 
614/97 of 8.4.1997 (OJNo L 94 , 9.4.1997, p. 4). 
117 
Whereas the level of price support in the dairy sector will be gradually reduced by 15% 
in total over four marketing years from 1 July 2000; whereas the effects of this 
measure on internal consumption and export of milk and milk products justify a 2% 
increase in the total reference quantity for milk in the Community in four steps 
following the respective price cuts; 
Whereas the individual reference quantity should be defined as the quantity available, 
irrespective of any quantities which may have been transferred temporarily, on 31 
March 2000, the expiry date of the seven periods of application of the levy scheme 
following its prolongation decided in 1992; 
Whereas the additional reference quantities should be distributed in such a way as to 
improve the situation of certain categories of farmers who need particular support; 
whereas it is therefore appropriate to oblige Member States to allocate these quantities 
with priority to young farmers who intend to start or develop milk production and to 
producers in mountain areas; whereas precautions should be taken to prevent the said 
distribution criteria from being circumvented; whereas, in the case of producers in 
mountain areas, these measures should be designed in such a way as to nullify the 
effects of moving additional reference quantities out of mountain areas during the first 
two twelve months periods following their allocation; 
118 
Whereas the experience with the additional levy scheme has shown that the transfer of 
reference quantities through legal constructions such as leases which do not necessarily 
lead to a permanent allocation of the reference quantities concerned to the transferee, 
can be an additional cost factor for milk production hampering the improvement of 
production structures; whereas, in order to strengthen the reference quantities' 
character as a means of regulating the market of milk and milk products, it is 
appropriate to provide that in cases of non-permanent transfers a certain part of the 
relevant reference quantities be returned to the national reserve for re-distribution to 
active producers; whereas Member States should have the possibility to exempt certain 
specific categories of persons or cases from the application of the said measure, in the 
light of an evaluation of the interests involved and the objectives pursued; whereas the 
percentages applied should be determined by Member States in the light of their 
specific situation; whereas, moreover, where reference quantities fall back to persons 
who did not actively produce milk or milk products during a given reference period, 
Member States should have the possibility to provide that the relevant reference 
quantities should revert to the national reserve unless they are permanently transferred 
to an active producer within a certain period; whereas, however, persons who resume 
milk production within a certain period should have the possibility to apply for a re­
allocation of reference quantities; 
Whereas a certain number of provisions in Regulation (EEC) No 3950/92 have 
become obsolete and should therefore be deleted; 
HAS ADOPTED THIS REGULATION: 
119 
Article 1 
Regulation (EEC) No 3950/92 is hereby amended as follows: 
1. Article 1 first subparagraph is replaced by the following: 
"For six new consecutive periods of twelve months commencing on 1 April 2000, an 
additional levy shall be payable by producers of cow's milk on quantities of milk or 
milk equivalent delivered to a purchaser or sold directly for consumption during the 12-
month period in question in excess of a quantity to be determined." 
2. Article 3 (2) is replaced by the following: 
"(2) The total quantities set out in Annex I and Annex II including the additional 
reference quantities referred to in Article 4 (3) and (4), shall be fixed without 
prejudice to possible review in the light of the general market situation and 
particular conditions existing in certain Member States. 
The overall quantity for the Austrian deliveries quota may be increased to 
compensate Austrian 'SLOM' producers, up to a maximum of 180 000 tonnes, to be 
allocated in accordance with Community legislation. This reserve must be non­
transferable and used exclusively on behalf of producers whose right to take up 
production again will be affected as a result of accession. 
The overall quantity for the Finnish deliveries quota may be increased to 
compensate Finnish 'SLOM' producers, up to a maximum of 200 000 tonnes, to be 
allocated in accordance with Community legislation. This reserve must be non­
transferable and used exclusively on behalf of producers whose right to take up 
production again will be affected as a result of accession. 
The increase in overall quantities, and the conditions under which the individual 
reference quantities provided for in the two preceding subparagraphs shall be 
granted, shall be decided upon in accordance with the procedure referred to in 
Article 11." 
3. Article 3 (3) is hereby deleted. 
120 
4. Article 4 is replaced by the following: 
"Article 4 
(1) The individual reference quantity available on the holding shall be equal to the 
quantity available on 31 March 2000. It shall be: 
- increased, where appropriate, in accordance with Article 4 (3) and (4), and 
- adjusted, where appropriate, for each of the periods concerned, so that the sum of 
the individual reference quantities of the same type does not exceed the 
corresponding global quantities referred to in Article 3, taking account of any 
reductions made for allocation to the national reserve provided for in Article 5. 
(2) Individual reference quantities shall be increased or established at the duly justified 
request of producers to take account of changes affecting their deliveries and/or 
direct sales. The increase or establishment of such a reference quantity shall be 
subject to a-corresponding reduction or cancellation of the other reference quantity 
the producer owns. Such adjustments may not lead to an increase in the sum of the 
deliveries and direct sales referred to in Article 3 for the Member State concerned. 
Where the individual reference quantities undergo a definitive change, the quantities 
referred to in Article 3 shall be adjusted in accordance with the procedure laid down 
in Article 11. 
(3) Member States shall: 
(a) allocate the additional reference quantities set out in column (c) of the tables in 
Annex II with priority to young farmers who intend to start or develop milk 
production; 
(b) take the necessary measures to ensure that the allocation of these additional 
reference quantities achieves the intended purpose and, in particular, to provide 
121 
for cases where reference quantities allocated have not been used in accordance 
with that purpose. 
(4) Member States shall allocate the additional reference quantities set out in column 
(d) of the tables in Annex II to producers the whole of whose holdings are situated 
in mountain areas within the meaning of Article 17 of Regulation (EC) No ... [rural 
development]. 
For two twelve month periods following the allocation referred to in the first 
subparagraph: 
(a) Member States shall not authorise the producers who have received such 
allocations to make temporary transfers as defined in Article 6 (1) to producers 
other than those referred to in the first subparagraph; 
(b) where all or part of the holding of a producer who has received such an 
allocation is sold or leased, to producers other than those referred to in the first 
sub-paragraph, the additional reference quantity shall revert to the national 
reserve in proportion to the area sold or leased. 
(c) where producers who have received such allocations transfer reference quantities 
under an authorisation granted pursuant to Article 8 (d) or (e) to producers other 
than those referred to in the first sub-paragraph, a part of the additional reference 
quantity allocated which shall be equal to the quantity subject to the transfer, 
shall be transferred to the national reserve. 
122 
(d) where producers who have received such allocations participate in any measure 
regarding the definitive abandonment of reference quantities, the additional 
reference quantity allocated shall revert to the national reserve, and 
compensation shall be paid for the quantity transferred less the said additional 
quantity. 
The additional reference quantities transferred to the national reserve under 
points (b), (c) and (d) shall be re-allocated to other producers referred to in the 
first sub-paragraph. 
(5) Member States shall allocate the additional reference quantities referred to in 
paragraphs 3 and 4, taking due account of the requirements resulting from 
Community legislation in the field of environment." 
5. The second sentence of Article 6 (1) first subparagraph is hereby deleted. 
6. Article 7 (1) second subparagraph is replaced by the following: 
"However, where land is transferred to public authorities and/or for use in the public 
interest, or where the transfer is carried out for non-agricultural purposes, Member 
States shall provide that the measures necessary to protect the legitimate interests of 
the parties are implemented, and in particular that the departing producer is in a 
position to continue milk production, if such is his intention." 
7. Article 8 shall be replaced by the following: 
"Article 8 
With a view to completing restructuring of milk production or to environmental 
improvement, Member States may take one or more of the following actions in 
accordance with detailed rules which they shall lay down taking account of the 
legitimate interests of the parties: 
123 
(a) grant compensation in one or more annual instalments to producers who undertake 
to abandon definitively all or part of their milk production and place the reference 
quantities thus released in the national reserve, 
(b) determine on the basis of objective criteria the conditions under which producers 
may obtain, in return for payment, at the beginning of a 12-month period, the 
reallocation by the competent authority or by the body designated by that authority, 
of reference quantities released definitively at the end of the preceding twelve­
month period by other producers in return for compensation in one or more annual 
instalments equal to the abovementioned payment, 
(c) provide, in the case of land transferred with a view to improving the environment, 
for the allocation of the reference quantity available on the holding concerned to the 
departing producer if he intends continuing milk production, 
(d) determine, on the basis of objective criteria, the regions or collection areas within 
which the transfer of reference quantities between certain producer categories 
without transfer of the corresponding land is authorized, with the aim of improving 
the structure of milk production, 
(e) authorize, upon application by the producer to the competent authority or the body 
designated by that authority, the transfer of reference quantities without transfer of 
the corresponding land, or vice versa, with the aim of improving the structure of 
milk production at the level of the holding or to allow for extensification of 
production." 
124 
8. The following is added after Article 8: 
"Article 8a 
(1) Where reference quantities are transferred with or without the corresponding land by 
means of rural leases or by other means involving comparable legal effects, a part of 
the transferred reference quantities to be determined by the Member State on the 
basis of objective criteria, shall revert to the national reserve for redistribution to 
producers. 
The first subparagraph shall not apply to cases where where due to the expiration of 
rural leases or in situations involving comparable legal effects, reference quantities, 
which had been transferred with or without the corresponding land, are transferred 
back. 
Member States may decide, on the basis of objective criteria, not to apply the first 
subparagraph to certain specific categories of persons or cases, where, taking 
account of the interests involved, such non-application does not put at risk the 
achievement of the objectives pursued in the first subparagraph. 
(2) Member States may provide that, where due to the expiration of rural leases or in 
situations involving comparable legal effects, reference quantities, which had been 
transferred with or without thé corresponding land, are transferred back to a person 
who has not marketed milk or milk products during the twelve months period 
preceding that during which the transfer took place as well as during the current 
twelve months period up to the transfer, the relevant reference quantities shall revert 
to the national reserve for redistribution to producers in accordance with detailed 
rules to be determined by them, unless the person concerned permanently transfers 
these reference quantities with or without the corresponding land to another 
producer. 
Where, in the case of the application of the first subparagraph, the person concerned 
resumes production of milk or other milk products within a period to be determined 
125 
by the Member State he shall be granted a reference quantity in accordance with 
Article 4 (1) no later than 1 April following the date of his application. Reference 
quantities re-allocated under this subparagraph shall not be transferred with or 
without the corresponding land by means of rural leases or by other means 
involving comparable legal effects during the two consecutive twelve months 
periods following their re-allocation." 
(3) Paragraph 1 and paragraph 2 first subparagraph shall not apply to temporary 
transfers under Article 6." 
9. The Annexes set out in the Annex hereto are hereby added to Regulation (EEC) No 
3950/92. 
Article 2 
Where transitional measures are necessary to facilitate the implementation of the 
amendments provided for in Article 1, they shall be adopted in accordance with the 
procedure referred to in Article 11 of Regulation (EEC) No 3950/92 
Article 3 
This Regulation shall enter into force on the day following that of its publication in the 
Official Journal of the European Communities. 
It shall apply from 1 April 2000. 
126 
This Regulation shall be binding in its entirety and directly applicable in all Member 
States. 
Done at Brussels, 
For the Council 
The President 
127 
ANNEX 
"ANNEXI 
Total reference quantities referred to in Article 3 (1) as applicable from 1 April 
2000 to 31 March 2001 
(expressed in tonnes) 
Member States Deliveries Direct supply 
total reference total reference 
quantities quantities 
Belgium 3 109 639 200 792 
Denmark 4 454 639 709 
Germany 27 764 778 100 038 
Greece 629 817 696 
Spain 5 438 118 128 832 
France 23 749 650 486 148 
Ireland 5 235 723 10 041 
Italy 9 698 399 231661 
Luxembourg 268 098 951 
Netherlands 10 988 039 86 653 
Austria 2 382 377 367 000 
Portugal 1835 461 37 000 
Finland 2 384 327 10 000 
Sweden 3 300 000 3 000 
United 14 338 375 251672 
Kingdom I 
128 
ANNEX II 
Total reference quantities referred to in Article 3 (1) including the additional 
reference quantities referred to in Article 4 (3) and (4) 
(expressed in tonnes) 
(a) applicable from 1 April 2001 to 31 March 2002 
Member States 
(a) 
Belgium 
Denmark 
Germany 
Greece 
Spain 
France 
Ireland 
Italy 
Luxembourg 
Netherlands 
Austria 
Portugal 
Finland 
Sweden 
United 
Kingdom Deliveries 
total reference 
quantities 
(b) 
3 117915 
4 465 777 
27 855 754 
634 435 
5 493 458 
23 886 636 
5 248 837 
9 770 989 
268 771 
11015 726 
2 429 221 
1 848 882 
2 434 316 
3 319 336 
14 374 850 additional 
reference 
quantities 
"young 
farmers"* 
(c) 
8276 
11138 
69662 
1576 
13917 
60589 
13114 
24825 
673 
27687 
6873 
4681 
5986 
8258 
36475 additional 
reference 
quantities for 
mountain 
areas* 
(d) 
21314 
3042 
41423 
76397 
47765 
39970 
8740 
44003 
11078 Direct supply 
total reference 
quantities 
(e) 
200 792 
709 
100 038 
696 
128 832 
486 148 
10 041 
231 661 
951 
86 653 
367 000 
37 000 
10 000 
3 000 
251 672 
* Included in total reference quantities for deliveries 
129 
(b) applicable from 1 April 2002 to 31 March 2003 
Member States 
(a) 
Belgium 
Denmark 
Germany 
Greece 
Spain 
France 
Ireland 
Italy 
Luxembourg 
Netherlands 
Austria 
Portugal 
Finland 
Sweden 
United 
Kingdom Deliveries 
total reference 
quantities 
(b) 
3 126 191 
4 476 915 
27 946 730 
639 053 
5 548 798 
24 023 622 
5 261951 
9 843 579 
269 444 
11043 413 
2 476 065 
1 862 303 
2 484 305 
3 338 672 
14 411325 additional 
reference 
quantities 
"young 
farmers"* 
(c) 
8276 
11138 
69662 
1576 
13917 
60589 
13114 
24825 
673 
27687 
6873 
4681 
5986 
8258 
36475 additional 
reference 
quantities for 
mountain 
areas* 
(d) 
21314 
3042 
41423 
76397 
' 
47765 
39970 
8740 
44003 
11078 Direct supply 
total reference 
quantities 
(e) 
200 792 
709 
100 038 
696 
128 832 
486 148 
10 041 
231661 
951 
86 653 
367 000 
37 000 
10 000 
3 000 
251 672 
* Included in total reference quantities for deliveries 
130 
(c) applicable from 1 April 2003 to 31 March 2004 
Member States 
(a) 
Belgium 
Denmark 
Germany 
Greece 
Spain 
France 
Ireland 
Italy 
Luxembourg 
Netherlands 
Austria 
Portugal 
Finland 
Sweden 
United 
Kingdom | Deliveries 
total reference 
quantities 
(b) 
3 134 467 
4 488 053 
28 037 706 
643 671 
5604 138 
24 160 608 
5 275 065 
9 916 169 
270 117 
11071 100 
2 522 909 
1 875 724 
2 534 294 
3 358 008 
14 447 800 additional 
reference 
quantities 
"young 
farmers"* 
(c) 
8276 
11138 
69662 
1576 
13917 
60589 
13114 
24825 
673 
27687 
6873 
4681 
5986 
8258 
36475 additional 
reference 
quantities for 
mountain 
areas* 
(d) 
21314 
3042 
41423 
76397 
47765 
39970 
8740 
44003 
11078 Direct supply 
total reference 
quantities 
(e) 
200 792 
709 
100 038 
696 
128 832 
486 148 
10 041 
231 661 
951 
86 653 
367 000 
37 000 
10 000 
3 000 
251 672 
Included in total reference quantities for deliveries 
131 
(d) applicable as from 1 April 2004 
Member States 
(a) 
Belgium 
Denmark 
Germany 
Greece 
Spain 
France 
Ireland 
Italy 
Luxembourg 
Netherlands 
Austria 
Portugal 
Finland 
Sweden 
United 
Kingdom Deliveries 
total reference 
quantities 
(b) 
3 142 743 
4 499 191 
28 128 682 
648 289 
5 659 478 
24 297 594 
5 288 179 
9 988 759 
270 790 
11098 787 
2 569 753 
1 889 145 
2 584 283 
3 377 344 
14 484 275 additional 
reference 
quantities 
"young 
farmers"* 
(c) 
8276 
11138 
69662 
1576 
13917 
60589 
13114 
24825 
673 
27687 
6873 
4681 
5986 
8258 
36475 additional 
reference 
quantities for 
mountain 
areas* 
(d) 
21314 
3042 
41423 
76397 
47765 
39970 
8740 
44003 
11078 Direct supply 
total reference 
quantities 
(e) 
200 792 
709 
100 038 
696 
128 832 
486 148 
10 041 
231661 
951 
86 653 
367 000 
37 000 
10 000 
3 000 
251 672 
Included in total reference quantities for deliveries' 
132 
Proposal for 
Council Regulation (EC) No.,. <;8/0« °2 (CNS) 
of... 
on support for Rural Development from the European Agricultural Guidance and 
Guarantee Fund (EAGGF) 
THE COUNCIL OF THE EUROPEAN UNION 
Having regard to the Treaty establishing the European Community, and in particular Articles 42 
and 43 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, 
Having regard to the opinion of the Committee of the Regions4, 
Whereas a common rural development policy should accompany and complement other 
instruments of the common agricultural policy and thus contribute to the achievement of the 
objectives of this policy laid down in Article 39(1) of the Treaty; 
Whereas, according to Article 39(2)(a) of the Treaty, in working out the common agricultural 
policy and the special methods for its application, account shall be taken of the particular nature 
of agricultural activities which result from the social structure of agriculture and from structural 
and natural disparities between the various agricultural regions; 
Whereas, according to Article 130b of the Treaty, the implementation of the common policies 
shall take into account the objectives set out in Articles 130a and 130c for the common policy of 
economic and social cohesion and shall contribute to their achievement; whereas rural 
development measures should, therefore, contribute to this policy in regions whose development 
is lagging behind (Objective 1) and regions facing structural difficulties (Objective 2) as defined 
in Council regulation (EC) No ... (General Structural Funds Regulation)5; 
133 
Whereas measures designed to support the improvement of agricultural structures have been 
introduced into the common agricultural policy as early as 1972; whereas during almost two 
decades, attempts have been made to integrate agricultural structural policy into the wider 
economic and social context of rural areas; whereas the 1992 policy reform stressed the 
environmental dimension of agriculture as the largest land user; 
Whereas rural policy is currently carried out through a range of complex instruments which lack 
overall coherence; 
Whereas over the coming years, agriculture will have to adapt to new realities and further 
changes in terms of market evolution, market policy and trade rules, consumer demand and 
preferences and the Community's next enlargement; that these changes will not only affect 
agricultural markets but also local economics in rural areas in general; whereas a rural 
development policy should aim at restoring and enhancing the competitiveness of rural areas 
and, therefore, contribute to the maintenance and creation of employment in these areas; 
Whereas these developments should be encouraged and supported by a reorganisation and 
simplification of the existing rural development instruments; 
Whereas such reorganisation should take into account the experience gained in applying existing 
instruments and thus to be based on these instruments, which are those implemented under the 
current priority objectives which promote rural development by speeding up the adjustment of 
agricultural structures in the framework of the reform of the common agricultural policy and 
which facilitate the development and structural adjustment of rural areas (Objectives 5a and 5b), 
as laid down in Council Regulation (EEC) No 2052/88 of 24 June 1988 on the tasks of the 
General Structural Funds Regulation and their effectiveness and on coordination of their 
activities between themselves and with the operations of the European Investment Bank and the 
other existing financial instruments6 and Council Regulation (EEC) No 4256/88 of 19 December 
1988 laying down provisions for implementing Regulation (EEC) No 2052/88 as regards the 
European Agricultural Guidance and Guarantee Fund (EAGGF) Guidance Section7, and those 
introduced as accompanying measures of the 1992 common agricultural policy reform by 
Council Regulation (EEC) No 2078/92 of 30 June 1992 on agricultural production methods 
compatible with the requirements of the protection of the environment and the maintenance of 
the countryside8, Council Regulation (EEC) No 2079/92 of 30 June 1992 instituting a 
Community aid scheme for early retirement from farming9and Council Regulation (EEC) No 
2080/92 of 30 June 1992 instituting a Community aid scheme for forestry measures in 
agriculture10; 
6 OJ L 185 of 15.7.1988, p. 9, as last amended by Regulation (EC) No 3193/94, OJ L 337 of 24.12.1994, p. 11. 
7 OJ L 374 of 31.12.1988, as amended by Regulation (EEC) No 2085/93, OJ L 193 of 31.7.1993, p. 44. 
8 OJ L 215 of 30.7.1992, p. 85, as last amended by Commission Regulation (EC) No 2272/95, OJ L 288 of 
1.12.1995, p. 35. Regulation rectified by Commission Regulation (EC) No 1962/96, OJ L 259 of 12.10.1996, 
p. 7. 
9 OJ L 215 of 30.7.1992, p. 91, as amended by Commission Regulation (EC) No 2773/95, OJ L 288 of 
1.12.1995, p. 37. 
10 OJ L 215 of 30.7.1992, p. 96, as last amended by Commission Regulation (EC) No 231/96, OJ L 30 of 
8.2.1996, p. 33. 
134 
Whereas the framework of a reformed rural development policy should cover all rural areas in 
the Community; 
Whereas the three existing accompanying measures introduced by the 1992 reform of the 
common agricultural policy (agri-environment, early retirement and afforestation) should be 
supplemented by the Less-Favoured areas Scheme (LFA); 
Whereas other rural development measures should form part of integrated development programs 
for Objective 1 regions and for Objective 2 regions; 
Whereas in the rural areas outside Objective 1 and Objective 2, rural development measures 
should accompany and complement market policies; 
Whereas support from EAGGF for rural development should be based on a single legal 
framework establishing measures eligible for support, their objectives and criteria for eligibility; 
Whereas, given the diversity of the Union's rural areas, rural development policy should follow 
the principle of subsidiarity; whereas it should, therefore, be as decentralised as possible and 
emphasis must be on participation and a "bottom up" approach; whereas, therefore, eligibility 
criteria for rural development support should not go beyond what is necessary to achieve the 
objectives of rural development policy; 
Whereas coherence with other instruments of the common agricultural policy and with other 
common policies requires, however, basic support criteria to be laid down at the Community 
level; whereas, in particular, unjustified distortions of competition resulting from rural 
development measures should be avoided; 
Whereas, in order to ensure flexibility and to simplify legislation, the Council shall confer all 
necessary implementing powers to the Commission in accordance with Article 155 of the Treaty; 
Whereas the structure of agriculture in the Community is typified by the existence of a large 
number of holdings which lack the structural conditions which would ensure a fair income and 
living conditions for farmers and their families; 
Whereas the aim of Community investment aid is to modernise agricultural holdings and to 
improve their viability; 
Whereas Community conditions concerning eligibility for investment aids should be simplified 
as compared to the existing conditions as laid down in Council Regulation (EC) No 950/97 of 20 
May 1997 on improving the efficiency of agricultural structures11; 
Whereas the grant of specific benefits to young farmers may facilitate not only their 
establishment but also the structural adjustment of their holdings after their initial establishment; 
11 OJ L 142 of 2.6.1997, p. 1. 
135 
Whereas the evolution and the specialisation of agriculture require an appropriate level of 
general, technical and economic training for the active farm population, especially as regards 
new approaches to management, to production or to marketing; 
Whereas a particular effort is needed to educate, and inform farmers of, agricultural methods 
compatible with the environment; 
Whereas early retirement from farming should be encouraged in order to improve the viability of 
agricultural holdings taking into account the experience acquired in the implementation of 
Regulation (EEC) No 2079/92; 
Whereas support to less favoured areas should contribute to continued agricultural land use, 
preservation of the countryside, maintenance and promotion of farming systems and to the 
fulfilment of environmental requirements; 
Whereas the support scheme for less favoured areas should constitute a basic instrument to 
maintain and promote low-input farming systems; 
Whereas less favoured areas should be classified on the basis of common criteria; whereas 
existing criteria should be modified to allow classification of new areas and in particular areas 
affected by specific environmental handicaps; 
Whereas there is no need for any further classification of less favoured areas to be drawn up at 
Community level; 
Whereas conditions concerning eligibility for compensatory allowances should be laid down in 
order to ensure the efficiency of this support scheme and to ensure that its objectives are 
achieved; 
Whereas, in the coming years, a prominent role should be given to agri-environmental 
instruments to support the sustainable development of rural areas and to respond to society's 
increasing demand for environmental services; 
Whereas the existing agri-environmental support under Regulation (EEC) No 2078/92 should be 
continued for targeted environmental measures taking into account experience gained in the 
implementation of this scheme, as described in detail in the Commission's report presented 
pursuant to Article 10(2) of Regulation (EEC) No 2078/92; 
Whereas the agri-environmental aid scheme should continue to encourage farmers to serve 
society as a whole by introducing or continuing the use of farming practices compatible with the 
increasing need to protect the environment and natural resources and to maintain the landscape 
and the countryside; 
Whereas improvements in the processing and marketing of agricultural products should be 
encouraged by support for investments in that field; 
136 
Whereas such support can largely be based on existing conditions as currently laid down in 
Council Regulation (EC) No 951/97 of 20 May 1997 on improving the processing and marketing 
conditions for agricultural products12; 
Whereas it should be ensured that such investments are viable and that farmers have a share in 
the economic benefits of the action taken; 
Whereas forestry is an integral part of rural development and forestry measures should, therefore, 
be included into the rural development support scheme; 
Whereas forestry measures should be adopted in the light of undertakings of the Community and 
the Member States made at an international level and should be based on Member States forest 
plans; whereas such measures should also take into account the specific problems of climatic 
change; 
Whereas forestry measures should be pursued on the lines of the existing schemes laid down in 
Regulation (EEC) No 1610/89 of 29 May 1989 laying down provisions for implementing 
Regulation (EEC) No 4256/88 as regards the scheme to develop and optimally utilise woodlands 
in rural areas in the Community13 and in Council Regulation (EEC) No 867/90 of 29 March 1990 
on improving the processing and marketing conditions for forestry products14; 
Whereas the afforestation of agricultural land is especially important from the point of view of 
soil use and the environment and as a contribution to increase supplies in certain forestry 
products; whereas the existing support for afforestation under Regulation (EEC) No 2080/92 
should, therefore, be pursued, taking into account experience gained in the implementation of 
that scheme as described in detail in the Commission's report presented pursuant to Article 8 
paragraph 3 of Regulation (EEC) No 2080/92; 
Whereas compensatory allowances should be granted for the maintenance of sustainable 
sylviculture in areas with major natural handicaps; 
Whereas support should be granted for other measures related to farming activities and their 
conversion; whereas the list of measures should be defined on the basis of experience and having 
regard to the need for rural development to be based partly on non-agricultural activities and 
services so as to reverse the trend towards the economic and social decline and depopulation of 
the countryside;whereas measures to remove inequalities and to promote equal opportunities for 
men and women should be supported; 
Whereas rural development measures eligible for Community support should comply with 
Community law and be coherent with other Community policies as well as with other 
instruments of the common agricultural policy; 
12 OJL142of2.6.1997,p.22. 
13 OJL165of 15.6.1989, p. 3. 
14 OJL 91 of 6.4.1990, p. 7. 
137 
Whereas support should be excluded for certain measures eligible under other common 
agricultural policy instruments and in particular those falling within the scope of support 
schemes under common organisations of the market; 
Whereas, in view of existing aids to producer groups and their associations in several common 
organisations of the market, specific support to producer groups in the framework of rural 
development does not appear to be necessary any more; whereas, therefore, the aid scheme 
existing under Council Regulation (EC) No 952/97 of 20 May 1997 on producer groups and 
associations thereof15should not be continued; 
Whereas the financing of Community support for the accompanying measures and to other rural 
development measures in areas outside objective No 1 should be made from the Guarantee 
Section of EAGGF; whereas the basic financial rules laid down in Council Regulation (EC) No 
...[General Structural Funds Regulation]16 have been adapted accordingly; 
Whereas the financing of Community support for rural development measures, in areas covered 
by objective No 1, should continue to be made from the Guidance Section of EAGGF except for 
the three existing accompanying measures and for less favoured areas support; 
Whereas, with regard to the support for rural development measures covered by Objective 1 and 
Objective 2 programming, Regulation (EC) No ... [General Structural Funds Regulation] should 
apply, in particular as to integrated programming of these measures; whereas, however, rules 
concerning financing should take into account the Guarantee financing of measures in Objective 
2 regions; 
Whereas rural development measures not covered by Objective 1 or Objective 2 programming 
should be subject to rural development programming pursuant to specific rules; whereas rates of 
assistance for such measures should be differentiated according to the general principles laid 
down in Article 28(1) of Regulation (EC) No ... [General Structural Funds Regulation] taking 
sufficiently into account the requirement of social and economic cohesion, and as a consequence 
those assistance rates should, in principle, be differentiated between areas covered by Objective 
and Objective 2 and other areas; whereas rates laid down in this Regulation are maxima of 
Community assistance; 
Whereas, in addition to Rural Development Programmes, the Commission should be able to 
make provisions for studies on rural development on its own initiative notwithstanding the rural 
development initiative provided for in Articles 18 and 19 of Regulation (EC) No... [General 
Structural Funds Regulation]; 
Whereas appropriate rules should be established for monitoring and evaluation of rural 
development support, using as a reference well defined indicators to be agreed and established 
prior to programme implementation; 
15 OJL 142 of 2.6.1997, p. 30 
16 OJL... 
138 
Whereas rural development measures should be eligible for Member State support without any 
Community cofinancing; whereas in view of the considerable economic impact of such aids and 
in order to ensure coherence with measures eligible for Community support, and to simplify 
procedures specific state aid rules should be established; 
Whereas it should be possible to adopt transitional rules to facilitate the transition from existing 
support schemes to the new rural development support scheme, 
HAS ADOPTED THIS REGULATION: 
Title I 
Scope and objective? 
Article 1 
1. This Regulation establishes the framework for Community support for sustainable rural 
development. 
2. Rural development measures shall accompany and complement other instruments of the 
common agricultural policy and thus contribute to the achievement of the objectives laid 
down in Article 39 of the Treaty. 
3. Rural development measures shall 
- be integrated into the measures promoting the development and structural adjustment of 
regions whose development is lagging behind (Objective 1) and 
- accompany the measures supporting the economic and social conversion of areas facing 
structural difficulties (Objective 2), 
in the regions concerned, taking into account the specific targets of Community support 
under these objectives as laid down in Articles 130a and 130c of the Treaty and in 
Regulation (EC) No ... [General Structural Funds Regulation] and according to the 
conditions laid down in this Regulation. 
Article 2 
Support for rural development, related to farming activities and their conversion, may concern: 
- the improvement of structures in agricultural holdings and for the processing and marketing of 
agricultural products; 
- the conversion and reorientation of agricultural production potential, the introduction of new 
technologies and the improvement of product quality; 
139 
- sustainable forest development; 
- the diversification of activities with the aim of complementary or alternative activities; 
- the maintenance and reinforcement of viable social fabric in rural areas; 
- the development of economic activities and the maintenance and creation of employment with 
the aim of ensuring a better exploitation of existing inherent potential; 
- the improvement of working and living conditions; 
- the maintenance and promotion of low-input farming systems in less favoured areas; 
- the preservation and promotion of a high nature value and a sustainable agriculture respecting 
environmental requirements; 
- the removal of inequalities and the promotion of equal opportunities for men and women, in 
particular by supporting projects initiated and implemented by women. 
Article 3 
Support shall be granted for the rural development measures defined, and under the conditions 
laid down, in Title II. 
Title II 
Rural development measures 
Chapter I 
Investments in agricultural holdings 
Article 4 
Support for investments in agricultural holdings shall contribute to the improvement of 
agricultural incomes and of living, working and production conditions. 
They shall pursue one or more of the following objectives: 
- reduce production costs; 
- improve and redeploy production; 
- increase quality; 
- preserve and improve the natural environment, hygiene conditions and animal welfare 
standards; 
- promote the diversification of farm activities. 
140 
Article 5 
Support for investments shall be granted to agricultural holdings: 
- whose economic viability can be demonstrated; 
- which comply with minimum standards regarding the environment, hygiene and animal 
welfare, and 
- where the farmer possesses adequate occupational skill and competence. 
Article 6 
Support shall not be granted for investments which have as their objective an increase in 
production for which no normal market outlets can be found. 
Article 7 
Member States shall set maximum amounts for support for investments. 
Chapter II 
Setting-up of young farmers 
Article 8 
1. Setting-up aids to young farmers shall be granted under the following conditions: 
- the farmer is under 40 years of age; 
- the farmer possesses adequate occupational skill and competence; 
- the farmer sets up for the first time on an agricultural holding; 
- for this holding 
(i) economic viability can be demonstrated; and 
(ii) minimum standards regarding the environment, hygiene and animal 
welfare are complied with; 
and 
- the farmer is established as head of the holding. 
Specific conditions may be applied to the situation where a young farmer is not established 
as sole head of the holding. These conditions must be equivalent to those required for a 
young farmer setting up as a sole head of a holding. 
141 
2. The setting-up aid may comprise: 
- a single premium up to the maximum eligible amount specified in the Annex; 
- an interest subsidy on loans taken on with a view to covering the costs arising from 
setting up; the capitalised value of the interest subsidy may not exceed the value of the 
premium. 
Chapter III 
Training 
Article 9 
Support for vocational training shall contribute to the improvement of the occupational skill and 
competence of farmers and other persons involved in agricultural activities, and their 
conversion. 
Training shall in particular be intended to prepare farmers for qualitative reorientation of 
production, the application of production practices compatible with the maintenance of the 
landscape, the protection of the environment, hygiene standards and animal welfare and 
acquisition of the skills needed to enable them to manage an economically viable farm. 
Chapter IV 
Early retirement 
Article 10 
1. Support for early retirement from farming shall contribute to the following objectives: 
- providing an income for elderly farmers who decide to stop farming; 
- encouraging the replacement of such elderly farmers by farmers able to improve the 
economic viability of the remaining agricultural holdings; 
- reassigning agricultural land to non-agricultural uses where it cannot be farmed under 
satisfactory conditions of viability. 
2. Early retirement support may include measures to provide an income for farm workers. 
Article 11 
1. A transferor shall : 
- stop all commercial farming activity definitively; he may, however, continue non­
commercial farming and retain the use of the buildings in which he continues to live; 
- be not less than 55 years old but not yet of normal retirement age at the time of transfer, 
and 
- have practised farming for the ten years preceding transfer. 
2. A farming transferee shall: 
- succeed the transferor as the head of the agricultural holding or take over all or part of 
the land released. The economic viability of the holding of the transferee must be 
improved within a period and in compliance with conditions to be defined, in terms of, in 
particular, the occupational skill and competence of the transferee, surface area and 
volume of work or income, according to the region and type of production; 
- possess adequate occupational skill and competence, and 
- undertake to practise farming on the agricultural holding for not less than 5 years in 
accordance with minimum standards regarding the environment, hygiene and animal 
welfare. 
3. A worker shall: 
- stop all farm work definitively; 
- be not less than 55 years old but not yet of normal retirement age; 
- have devoted at least half of his/her working time as a family helper or a farm worker to 
farm work during the preceding five years; 
- have worked on the transferor's agricultural holding for at least the equivalent of two 
years full-time during the four-year period preceding the early retirement of the 
transferor and 
- belong to a social security scheme. 
\. A non-farming transferee may be any other person or body who takes over released land to 
use it for non-agricultural purposes, forestry or the creation of ecological reserves in a 
manner compatible with protection or improvement of the quality of the environment and of 
the countryside. 
143 
5. The conditions laid down in this Article shall be applied throughout the period during which 
the transferor receives early retirement support. 
Article 12 
1. Early retirement support granted to transferors may not exceed the total amount per year 
fixed in the Annex. 
2. The duration of early retirement support shall not exceed ten years and shall not continue 
after the normal retirement age of the transferor or the worker's normal retirement age and 
in no case beyond his seventieth birthday. Where a normal retirement pension is paid by the 
Member State early retirement support shall be granted as a supplement taking into account 
the amount of the national retirement pension. 
Chapter V 
Less-favoured areas 
Article 13 
Support for less-favoured areas shall contribute to the following objectives: 
- ensuring continued agricultural land use and thereby contributing to the maintenance of a 
viable rural community, 
- preserving the countryside, 
- maintaining and promoting sustainable farming systems, 
- assuring environmental requirements. 
Article 14 
1. Farmers in less-favoured areas may be supported by compensatory allowances. 
2. Compensatory allowances shall be granted on a per hectare basis to farmers who: 
- farm a minimum area of land to be defined; 
- undertake to pursue their farming activity in a less-favoured area for at least five years 
from the first payment of a compensatory allowance; and 
144 
- use practices compatible with the need to safeguard the environment and preserve the 
countryside, in particular by sustainable farming, such practices to be defined for the 
different areas. 
3. Where residues of substances prohibited under Council Directive 96/22fEC11 or residues of 
substances authorised under the aforementioned act but used illegally, are detected pursuant 
to the relevant provisions of Council Directive 96/23/EC18 on monitoring, in an animal 
belonging to the bovine herd of a producer, or where an authorised substance or product, or 
a substance or product authorised under the Directive 96/22/EC but held illegally is found 
on the producer's holding in any form, then the producer shall be excluded, for the calendar 
year of that discovery, from receiving compensatory allowances. 
In the event of a repeated infringement, the length of the exclusion period may, according to 
the seriousness of the offence, be extended to five years from the year in which the repeated 
infringement was discovered. 
In the event of obstruction on the part of the owner or holder of the animals, when 
inspections are being carried out and when the samples are being taken which are necessary 
for the application of national residue-monitoring plans, or when the investigations and 
checks provided for under the Directive 96/23/EC referred to in the first subparagraph are 
being carried out, the penalties provided for in the first subparagraph shall apply. 
Article 15 
1. Compensatory allowances shall be fixed at a level which: 
- is sufficient to contribute effectively to a compensation for existing handicaps and 
- avoids overcompensation. 
The compensation may, if necessary, take into account the costs to and income foregone by 
farmers resulting from their obligations under environmental legislation. 
17 Council Directive concerning the prohibition on the use in stockfarming of certain substances having a 
hormonal or thyrostatic action and of 6-agonists, and repealing Directives 81/602/EEC, 88/146/EEC and 
88/299/EEC, OJ L 125 of 23.5.1996, p. 3. 
18 Council Directive on measures to monitor certain substances and residues thereof in live animals and animal 
products and repealing Directives 85/358/EEC and 86/469/EEC and Decisions 89/187/EEC and 91/664/EEC, 
OJL 125 of 23.5.1996, p. 10. 
145 
2. Compensatory allowances shall be duly differentiated taking into account: 
- the situation and development objectives particular to a region, 
- the severity of any permanent natural handicap affecting farming activities, 
- the particular environmental problems to be solved, 
- the type of production and economic situation of the holding and the income of the 
farmer. 
3. Compensatory allowances shall be fixed between the minimum and maximum amounts set 
out in the Annex. Compensatory allowances higher than the maximum amounts may be 
granted provided that the average amount of all compensatory allowances granted in the 
programming region concerned respects this maximum. 
Article 16 
Less-favoured areas shall include: 
- mountain areas, 
- other less-favoured areas and 
- areas affected by specific handicaps. 
Article 17 
1. Mountain areas shall be those characterised by a considerable limitation of the possibilities 
for using the land and an appreciable increase in the cost of working it, due: 
- to the existence, because of altitude, of very difficult climatic conditions, the effect of 
which is substantially to shorten the growing season; 
- at a lower altitude, to the presence, over the greater part of the area in question, of slopes 
too steep for the use of machinery or requiring the use of very expensive special 
equipment or 
- to a combination of these two factors, where the handicap resulting from each taken 
separately is less acute, provided that this combination gives rise to an equivalent 
handicap. 
2. Areas north of the 62nd parallel and certain adjacent areas shall be treated in the same way 
as mountain areas. 
146 
Article 18 
Less-favoured areas in danger of abandonment of land uses and where the conservation of the 
countryside is necessary, shall be made up of farming areas which are homogenous from the 
point of view of natural production conditions and exhibit all of the following characteristics: 
- the presence of land of poor productivity, difficult cultivation and with a limited potential 
which cannot be increased except at excessive cost, and which is mainly suitable for extensive 
livestock farming; 
- production which results from low productivity of the natural environment which is 
appreciably lower than the average, with regard to the main indices of economic performance 
in agriculture; 
- a low or dwindling population predominantly dependent on agricultural activity, the 
accelerated decline of which would jeopardise the viability of the area concerned and its 
continued habitation. 
Article 19 
Less-favoured areas may include other areas affected by specific handicaps, in particular by 
specific environmental constraints, and in which farming should be continued, where necessary 
and subject to certain conditions, in order to conserve or improve the environment, maintain the 
countryside and preserve the tourist potential of the area or in order to protect the coastline. 
The total extent of such areas may not in any Member State exceed 10% of the area of the State 
concerned. 
Chapter VI 
Agri-environment 
Article 20 
Support for agricultural production methods designed to protect the environment and to maintain 
the countryside (agri-environment) shall contribute to achieving the Community's policy 
objectives regarding agriculture and the environment. 
Such support shall promote: 
- ways of using agricultural land which are compatible with the protection and improvement of 
the environment, the landscape and its features, natural resources, the soil and genetic 
diversity, 
- an environmentally favourable extensification of farming and management of low intensity 
pasture systems, 
147 
- the conservation of high nature value farmed environments which are under threat, 
- the upkeep of the landscape and historical features on farmland, 
- the use of environmental planning in farming practice. 
Article 21 
1. Support shall be granted to farmers in return for agri-environmental undertakings of at least 
five years. Where necessary, a longer period shall be determined for particular types of 
undertakings in view of the environmental effects of such undertakings. 
2. Agri-environmental undertakings shall go beyond the application of usual good farming 
practice. 
They shall provide for services which are not provided for by other support measures, such 
as market support or compensatory allowances. 
Article 22 
1. Support for agri-environmtal undertakings shall be granted annually and be calculated on 
the basis of: 
- income forgone, 
- additional costs resulting from the undertaking, and 
- the need to provide an incentive. 
The cost of any non remunerative capital works necessary for the fulfilment of the 
undertakings may also be taken into account in calculating the level of annual support. 
2. Maximum amounts per year eligible for Community support are laid down in the Annex. 
These amounts shall be based on the area of the holding to which agri-environmental 
undertakings apply. 
Chapter VII 
Improving processing and marketing of agricultural products 
Article 23 
1. Support for investments shall facilitate the improvement and rationalisation of processing 
and marketing of agricultural products and thereby contribute to increasing the 
competitiveness and the added value of agricultural products. 
2. Such support shall contribute to one or more of the following objectives: 
- guiding production in keeping with foreseeable market trends or encouraging the 
development of new outlets for agricultural products, 
- improving or rationalising marketing channels or processing procedures, 
148 
- improving the presentation and preparation of products or encouraging a better use or 
elimination of by-products, 
- applying new technologies, 
- favouring innovative investments, 
- improving and monitoring quality and health conditions, 
- protecting the environment. 
Article 24 
1. Support shall be granted to those persons ultimately responsible for financing the 
investments in enterprises 
- for which economic viability can be demonstrated and 
- which comply with minimum standards regarding the environment, hygiene and animal 
welfare. 
2. Investments must contribute to improving the situation of the basic agricultural production 
sector in question. They must guarantee the producers of such basic products an adequate 
share in the resulting economic benefits. 
3. Sufficient evidence must be given that normal market outlets for the products concerned 
exist. 
Article 25 
1. The investments shall concern the processing and marketing of products covered by Annex 
II to the Treaty except fishery products. 
2. Investments shall meet selection criteria setting priorities and indicating which investments 
are not eligible for support. 
Article 26 
The following investments shall be excluded from support: 
- investments at the retail level, 
- investments in the processing or marketing of products from third countries. 
149 
Chapter VÏÏI 
Forestry 
Article 27 
1. Support for forestry shall contribute to the development of the economic, ecological and 
social functions of forestry in rural areas. 
2. Such support shall promote in particular one or more of the following objectives: 
- sustainable management and development of forestry, 
- conservation of forest resources, 
- extension of woodland areas. 
3. Such support shall contribute to the fulfilment of undertakings made by the Community and 
the Member States on international level. It shall be based on national forest plans as 
adopted in the Intergovernmental Panel on Forests. In relation to areas classified as high or 
medium forest-fire risk, forest fire protection plans according to Regulation (EEC) 
No 2158/9219 of 23 July 1992 on protection of the Community's forests against fire shall be 
provided for. 
Article 28 
1. Support for forestry shall concern one or more of the following measures: 
- planting and restocking of non-farm land provided that the planting is adapted to local 
conditions compatible with the environment, 
- investments in forest holdings owned by private forest owners,. associations thereof or 
municipalities, aimed at a significant improvement of their economic or ecological value, 
- investments to improve and rationalise the processing and marketing of forestry 
products; investments related to the use of wood as a raw material shall be limited to all 
working operations prior to industrial use, 
- promoting new outlets for the use and marketing of wood and forestry products, 
- setting up of associations of forest holders, that are established to help members to 
improve sustainable and efficient management of their holdings, 
- restoring forestry production potential damaged by natural disasters and fire and 
introducing appropriate prevention instruments. 
2. The rules laid down in Chapters I, III and VII shall apply correspondingly to forestry 
measures. 
19 OJ L 217 of 31.7.1992, p. 3, as last amended by Regulation (EC) No 308/97, OJ L 51 of 21.2.1997, p. 11. 
150 
Article 29 
1. Support shall be granted for the afforestation of agricultural land. 
Such support may include in addition to planting costs: 
- an annual premium per hectare afforested to cover maintenance cost for a period of up to 
five years, 
- an annual premium per hectare to cover losses of income resulting from afforestation for 
a maximum period of 20 years for farmers or their associations who worked the land 
before its afforestation or for any other private law person. 
2. Support for the afforestation of farmland shall not be granted: 
- to farmers benefiting from early retirement support, 
- in relation to the planting of Christmas trees. 
In the case of fast-growing species cultivated in the short term, aid for afforestation costs 
shall only be granted provided that the planting is adapted to local conditions compatible 
with the environment. 
3. Maximum amounts per year of the annual premium to cover losses of income eligible for 
Community support are laid down in the Annex. 
Article 30 
1. With a view to: 
- preserving and improving the ecological stability of forests or restoring damaged forests 
in areas with serious natural handicaps, where the protective and ecological role of these 
forests are in the general interest and where this role cannot be solely assured by income 
from sylviculture; or 
- maintaining fire-breaks through agricultural practices, 
support shall be granted as a compensatory payment to individual persons or associations 
thereof in order to safeguard the public interest in maintaining the forests concerned 
provided that sustainable management of these forests is ensured. 
2. Compensatory payments shall be fixed between the minimum and maximum amounts set 
out in the Annex. Compensatory payments higher than the maximum amounts may be 
granted provided that the average amount of all compensatory payments granted in the 
programming region concerned respects this maximum. 
151 
Chapter IX 
Promoting the adaptation and the development of rural areas 
Article 31 
Support shall be granted for measures, related to farming activities and their conversion and 
related to rural activities, which do not fall within the scope of any other measure referred to in 
this Title. 
These measures shall concern: 
- land improvement, reparcelling, 
- setting up of farm relief and farm management services, 
- marketing of quality products, 
- improvement of living conditions, 
- renovation and development of villages and protection and conservation of rural heritage, 
- diversification of activities, to provide multiple activities or alternative incomes, 
- agricultural water resources management, 
- development and improvement of rural infrastructure, 
- encouragement for tourist and craft activities, 
- preservation of the environment and management of rural areas, 
- restoring agricultural production potential damaged by natural disasters and introducing 
appropriate prevention instruments, 
- financial engineering. 
Chapter X 
Implementing rules 
Article 32 
Detailed rules for the implementation of this Title shall be adopted in accordance with the 
procedure laid down in Article 49 of Regulation (EC) No ...[General Structural Funds 
Regulation]. 
These rules may in particular define: 
- conditions for support for investments in agricultural holdings (Articles 4 to 7); 
- the period and the conditions for the improvement of economic viability of a farm and 
conditions of use of land released in the case of early retirement (Article 11(2)); 
- conditions for granting and calculation of compensatory allowances (Articles 14 and 15); 
152 
- conditions governing agri-environmental undertakings (Articles 21 and 22); 
- selection criteria for investments improving processing and marketing of agricultural products 
(Article 25(2)), 
- conditions governing forestry measures (Articles 27 to 30). 
According to the same procedure, the Commission may derogate from Article 26 second indent 
in ultraperipheral regions subject to the condition that the processed products are destined for the 
market of the region in question. 
Title m 
General principles. Administrative and financial provisions 
Chapter I 
General principles 
Subchapter I 
Support from EAGGF 
Article 33 
1. Community support for early retirement (Articles 10 to 12), less-favoured areas (Articles 13 
to 19), agri-environment (Articles 20 to 22) and afforestation (Article 29) shall be financed 
by the EAGGF Guarantee Section throughout the Community. 
2. Community support for other rural development measures shall be financed by the EAGGF 
- Guidance Section in areas covered by Objective 1, 
- Guarantee Section in areas outside Objective 1. 
3. Support for the measures referred to in the third, sixth and eight indents of Article 31 shall 
be financed by EAGGF in areas classified under Objectives 1 and 2 in so far as their 
financing is not ensured by the ERDF. 
Article 34 
1. With regard to support for rural development measures referred to in Article 33(2) 
- in areas covered by Objective 1, Regulation (EC) No ... [General Structural Funds 
Regulation] shall apply as supplemented by specific rules contained in this Regulation; 
- in areas covered by Objective 2, Regulation (EC) No ... [General Structural Funds 
Regulation] shall apply as supplemented by specific rules contained in this Regulation 
and save as otherwise provided for under this Regulation. 
153 
2. With regard to support for rural development measures financed by the EAGGF Guarantee 
Section, the specific rules of Regulation (EC) No ... [Agricultural Financial Regulation] and 
the provisions adopted in implementation thereof shall apply save as otherwise provided for 
under this Regulation. 
Subchapter II 
Compatibility and Coherence 
Article 35 
1. Support for rural development shall only be granted for measures which comply with 
Community law. 
2. Such measures shall be coherent with other Community policies and measures implemented 
thereunder. 
In particular, any measure which falls within the scope of this Regulation shall only be 
eligible for support under other Community support schemes provided that this measure is 
not incompatible with any specific condition laid down in this Regulation. 
3. Coherence shall also be ensured with measures implemented under other instruments of the 
common agricultural policy. In particular, coherence shall be ensured between rural 
development support measures on the one hand and measures implemented under the 
common market organisations and agricultural quality and health measures on the other 
hand, as well as between the different rural development support measures. 
For this purpose, no support under this Regulation may be granted for: 
- measures falling within the scope of support schemes under common market 
organisations, 
- measures to support research projects, to promote agricultural products or to eradicate 
animal diseases. 
4. Member States may lay down further or more restrictive conditions for granting Community 
support for rural development provided that such conditions are coherent with the objectives 
and requirements laid down in this Regulation. 
Article 36 
1. Payments may not be made in respect of the same measure under both this Regulation and 
another Community support scheme. 
2. Support for several measures under this Regulation may only be combined provided that 
they are coherent and compatible between each other. If necessary, the level of support shall 
be adapted. 
154 
Article 37 
1. Member States shall take all necessary steps to ensure compatibility and coherence of rural 
development support measures pursuant to the provisions laid down in this Chapter. 
2. In relation to all rural development measures, the plans submitted by Member States shall 
include an appraisal of the compatibility and the coherence of the rural development support 
measures envisaged and an indication of the measures taken in order to ensure compatibility 
and coherence. 
3. Where necessary to ensure compatibility and coherence, support measures shall be revised 
subsequently. 
Chapter U 
Programming 
Article 38 
1. Rural development measures financed by the EAGGF Guidance Section shall form part of 
the programming for Objective 1 regions according to Regulation (EC) No ...[General 
Structural Funds Regulation]. 
2. Rural development measures other than those referred to in Article 33 (1) shall form part of 
the programming for Objective 2 regions in accordance with Regulation (EC) No ...[General 
Structural Funds Regulation]. 
3. Other rural development measures shall be subject to Rural Development Programming in 
accordance with Articles 39 to 42. 
Article 39 
1. Rural development plans shall be drawn up at the geographical level deemed to be the most 
appropriate. They shall be prepared by the competent authorities designated by the Member 
State and shall be submitted by the Member State to the Commission after consultation of 
competent authorities and organisations at the appropriate territorial level. 
2. Rural development support measures to be applied in one area shall be integrated, whenever 
possible, into a single plan. Wherever several plans need to be established, the relation 
between measures foreseen in these plans shall be indicated and their compatibility and 
coherence shall be ensured. 
Article 40 
Rural development plans shall cover a period of seven years from 1 January 2000. 
155 
Article 41 
1. Rural development plans shall include: 
- a quantified description of the current situation showing disparities, gaps and potential 
for development, the financial resources deployed and the main results of operations 
undertaken in the previous programming period with regard to the evaluation results 
available, 
- a description of the strategy proposed, its quantified objectives, and rural development 
priorities selected, and the geographic area covered, 
- a prior appraisal showing the expected economic, environmental and social impact, 
including employment effects, 
- an indicative overall financial table summarising the national and Community financial 
resources provided for and corresponding to each rural development priority adopted in 
the context of the plan, 
- a description of the measures contemplated for implementing the plans, and in particular 
aid schemes, including the points necessary for assessing the rules of competition, 
- where appropriate, information on the needs for any studies, demonstration projects, 
training or technical assistance operations relating to the preparation, implementation or 
adaptation of the measures concerned, 
- the designation of competent authorities and bodies responsible, 
- provisions to ensure an effective and correct implementation, including monitoring and 
evaluation with the definition of quantified indicators for evaluation, arrangements for 
controls and sanctions and adequate publicity, 
- the results of consultations and steps taken to associate competent authorities and bodies 
as well as the economic and social partners at the appropriate levels. 
I. In their plans, Member States shall 
- provide for agri-environment measures throughout their territories, and in accordance 
with their specific needs, 
- ensure the necessary equilibrium between the different measures to be supported. 
Article 42 
I. Rural development plans shall be submitted not later than six months after the entry into 
force of this Regulation. 
I. The Commission shall appraise the proposed plans to determine whether they are consistent 
with this Regulation. On the basis of the plans, it shall approve Rural Development 
Programming Documents in accordance with the procedure referred to in Article 49 of 
Regulation (EC) No ...[General Structural Funds Regulation] within six months after the 
submission of the plans. 
156 
Chapter III 
Additional measures and Community initiative 
Article 43 
1. Pursuant to Article 20(2) of Regulation (EC) No ... [General Structural Funds Regulation] 
the Commission, following the procedure laid down in Article 51 of that Regulation, may 
extend the scope of assistance from the EAGGF Guidance Section beyond that provided for 
in Article 33(2) of this Regulation for the implementation of the rural development 
Community initiative. 
2. The EAGGF Guarantee Section may finance, on the initiative of the Commission, studies 
related to Rural Development Programming. 
Chapter IV 
Financial provisions 
Article 44 
1. Community support for rural development from the EAGGF Guarantee Section shall be 
subject to financial planning and accounting on an annual basis. The financial planning shall 
form part of Rural Development Programming (Article 38(3)) and of programming related 
to Objective 2. 
2. The Commission shall make initial allocations to Member States and per year on the basis 
of objective criteria taking into account particular situations and needs, and efforts to be 
undertaken especially for the environment, job creation and the maintenance of landscape. 
3. Initial allocations shall be adapted in view of real expenditures and on the basis of revised 
expenditure forecasts submitted by the Member States taking into account the objectives of 
programmes and subject to funds available and, as a rule, in coherence with the aid intensity 
for rural areas covered by Objective 2. 
Article 45 
1. The financial provisions laid down in Articles 30, 31 (except for the fifth subparagraph of 
paragraph 1 thereof), 33, 37 and 38 of Regulation (EC) No ... [General Structural Funds 
Regulation] shall not apply to support for rural development measures in relation to 
Objective 2. 
The Commission shall take the necessary action to ensure efficient and coherent 
implementation of these measures which shall at least attain the same standards as those laid 
down in the provisions referred to in the first subparagraph, including the principle of a 
single management authority. 
157 
2. For measures covered by Rural Development Programming (Article 38(3)), the Community 
shall contribute to financing pursuant to the principles laid down in Articles 28 and 29 of 
Regulation (EC) No. ... [General Structural Funds Regulation]. The Community 
contribution shall not exceed 50% of the total eligible cost and, as a general rule, shall be 
equal to at least 25% of eligible public expenditure in areas not covered by Objective 1 and 
Objective 2. In those areas, the rates laid down in Article 28(4)(a)(ii) and (iii) and (b)(ii) and 
(iii) of Regulation (EC) No ... [General Structural Funds Regulation] shall apply. 
In the programming for the implementation of Articles 20, 21 and 22 of this Regulation, 
provision may be made, in exceptional cases, for a rate of part-financing up to 10% higher 
than the maximum rates laid down in the first subparagraph for specific measures of special 
merit from the environmental viewpoint. 
The fifth subparagraph of Article 31(1) of Regulation (EC) No ... [General Structural Funds 
Regulation] shall apply to such payments. 
3. Payments of financial assistance from the EAGGF Guarantee Section may take the form of 
advances for programme implementation and of payments in respect of expenditure 
incurred. 
Chapter V 
Monitoring and evaluation 
Article 46 
1. The Commission and the Member States shall ensure effective monitoring of 
implementation of Rural Development Programming (Article 38(3)). 
2. Such monitoring shall be carried out by way of jointly agreed procedures. 
Monitoring shall be carried out by reference to specific physical and financial indicators 
agreed and established beforehand. 
Member States shall submit annual progress reports to the Commission. 
3. Where appropriate, monitoring committees shall be established. 
Article 47 
Evaluation of measures covered by Rural Development Programming (Article 38(3)) shall be 
carried out on the basis of the principles laid down in Articles 39 to 42 of Regulation (EC) No ... 
[General Structural Funds Regulation]. 
Chapter VI 
Implementing rules 
Article 48 
Detailed rules for the application of this Title shall be adopted in accordance with the procedure 
laid down in Article 49 of Regulation (EC) No ...[General Structural Funds Regulation]. 
These rules may in particular define the details of 
158 
- the presentation of rural development plans (Articles 39 to 42), 
- the revision of Rural Development Programming Documents, 
- financial planning, in particular to ensure budgetary discipline (Article 44), the participation 
in financing (Article 45(2)), 
- the monitoring and evaluation (Articles 46 and 47). 
Title IV 
State aids 
Article 49 
1. Save as otherwise provided in this Title, Articles 92 to 94 of the Treaty shall apply to aids 
granted by Member States for measures to support rural development. 
However, Articles 92 to 94 of the Treaty shall not apply to financial contribution provided 
by Member States for measures subject to Community support within the scope of Article 
42 of the Treaty in accordance with the provisions of this Regulation. 
2. State aids to support farmers in less-favoured areas which fail to satisfy the conditions laid 
down in Articles 13 to 19 or which exceed the amounts determined in accordance with 
Article 15 shall be prohibited. 
3. State aids to support farmers in return for agri-environmental undertakings which fail to 
satisfy the conditions laid down in Articles 20 to 22 are prohibited. However, additional 
aids exceeding maximum amounts fixed according to Article 22(2) may be granted if 
justified under paragraph 1 of that Article. 
Article 50 
Within the scope of Article 42 of the Treaty State aids intended to provide additional financing 
for rural development measures for which Community support is granted shall be notified by 
Member States and approved by the Commission in accordance with the provisions of this 
Regulation as part of programming referred to in Article 38. The first sentence of Article 93(3) of 
the Treaty shall not apply to aids thus notified. 
Title V 
Transitional and final rules 
Article 51 
1. Should specific measures be necessary to facilitate the transition from the system in force to 
the one established by this Regulation, such measures shall be adopted by the Commission 
in accordance with the procedures laid down in Article 49 of Regulation (EC) 
No ...[General Structural Funds Regulation]. 
2. Such measures shall in particular be adopted for the integration of existing Community 
support actions, approved by the Commission for a period ending after 1 January 2000 or 
without any time limit into the rural development support provided for by this Regulation. 
159 
Article 52 
1. Article 17 of Council Regulation (EEC) No 1696/71 on the common organisation of the 
market in hops20 shall be replaced by the following: 
"Article 17 
1. The Regulations on the financing of the common agricultural policy shall apply to the 
market in the products referred to in Article 1(1) from the date of implementation of the 
arrangements laid down herein. 
2. The aid referred to in Article 8 shall be subject to part financing by the Community. 
3. The Member States shall pay the aid referred to in Article 12 to the producers between 
16 October and 31 December of the marketing year in respect of which the aid is applied 
for. 
4. The Commission shall, following the procedure laid down in Article 20, adopt rules for 
the application of this Article." 
2. Article 6 of Council Regulation (EEC) No 404/93 on the common organisation of the 
market in bananas21 shall be replaced by the following text: 
"Article 6 
1. For the five years following the date of recognition, the Member States shall grant 
recognised producer organisations assistance to encourage their establishment and assist 
their administrative operation. 
2. Such aid: 
- shall be, for the first, second, third, fourth and fifth years respectively, 5%, 5%, 4%, 3% 
and 2% of the value of production marketed under the auspices of the producer 
organisation, 
- shall not exceed the actual cost of formation and administrative operation of the 
organisation concerned, 
- shall be paid in annual instalments for a maximum of seven years following the date of 
recognition. 
The value of each year's production shall be calculated on the basis of: 
- the annual volume actually marketed, 
- the average producer prices obtained. 
3. Producer organisations deriving from organisations which already comply to a large 
extent with the conditions of this Regulation shall qualify for aid under this Article only if 
20 OJ L 175 of 4.8.1971, p. 1, as last amended by Regulation (EC) No 1554/97, OJ L 208 of 2.8.1997, p. 1 
OJ L 47 of 25.2.1993, p. 1, as last amended by Regulation (EC) No 3290/94, OJ L 349 of 31.12.1994, p. 105. 21 
160 
they are formed as the result of a merger enabling the objectives referred to in Article 5 to 
be achieved more effectively. However, in such a case, the aid shall be granted only in 
respect of the cost of formation of the organisation (expenditure incurred in connection with 
the preparatory work and the drawing up of the memorandum and articles of association). 
4. The aid referred to in this Article shall be notified to the Commission in a report from the 
Member States at the close of each financial year." 
3. Council Regulation (EC) No 2200/96 on the common organisation of the market in fruit and 
vegetables22 shall be amended as follows: 
- Article 15(6) shall be replaced by the following: 
"6. In regions of the Community where the degree of organisation of producers is 
particularly low, Member States may be authorised, upon duly substantiated request, 
to pay producer organisations national financial assistance equal to half the financial 
contributions of producers. This assistance shall be additional to the operational 
fund. 
For Member States less than 15% of whose fruit and vegetable production is 
marketed by producer organisations and whose fruit and vegetable production 
represents at least 15% of their total agricultural output, the assistance referred to in 
the first subparagraph may be partly reimbursed by the Community at the request of 
the Member State concerned". 
- Article 52 shall be replaced by the following: 
"Article 52 
1. Expenditure relating to the payment of the Community withdrawal compensation 
and to Community financing of the operational fund, the specific measures referred 
to in Article 17 and Articles 53, 54 and 55 and checks by experts of the Member 
States made available to the Commission in application of Article 40(1) shall be 
deemed to be intervention to stabilise agricultural markets within the meaning of 
Article l(2)(b) of Regulation (EC) No [Agricultural Financial Regulation]. 
2. Expenditure relating to the aid granted by the Member States in accordance with 
Article 14 and the second subparagraph of Article 15(6) shall be deemed to be 
intervention to stabilise agricultural markets within the meaning of Article l(2)(b) of 
Regulation (EC) No [Agricultural Financial Regulation]. It shall be eligible for part 
financing by the Community. 
22 OJ L 296 of 21.11.1996, p. 46, as amended by Commission Regulation (EC) No 2520/97, OJ L 346 of 
17.12.1997, p. 41. 
161 
3. The Commission shall, following the procedure laid down in Article 46, adopt 
rules for the application of paragraph 2 of this Article. 
4. The provisions of Title VI shall apply without prejudice to the application of 
Council Regulation (EEC) No 4045/8923". 
Article 53 
1. The following Regulations are hereby repealed: 
- Regulation (EEC) No 4256/88, 
- Regulations (EC) Nos 950/97, 951/97, 952/97, 867/90, 
- Regulations (EEC) Nos 2078/92, 2079/92, 2080/92, 
- Regulation (EEC) No 1610/89. 
2. The following provisions are hereby deleted: 
- Article 21 of Regulation (EEC) No 3763/9124, 
- Article 32 of Regulation (EEC) No 1600/9225, 
- Article 27 of Regulation (EEC) No 1601/9226, 
- Article 13 of Regulation (EEC) No 2019/9327. 
23 Council Regulation of 21 December 1989 on scrutiny by Member States of transactions forming part of the 
system of financing by the Guarantee Section of the European Agricultural Guidance and Guarantee Fund and 
repealing Directive 77/435/EEC, OJ L 388 of 30.12.1989, p. 17, as last amended by Council Regulation (EC) 
No 3235/94, OJ L 338 of 28.12.1994, p. 16. 
24 Council Regulation of 16 December 1991 introducing specific measures in respect of certain agricultural 
products for the benefit of the French overseas departments, OJ L 356 of 24.12.1991, p. 1, as last amended by 
Council Regulation (EC) No 2598/95, OJ L 267 of 9.11.1995, p. 1. 
25 Council Regulation of 15 June 1992 concerning specific measures for the Azores and Madeira relating to 
certain agricultural products, OJ L 173 of 27.6.1992, p. 1, as last amended by Council Regulation (EC) 
No 2348/96, OJ L 320 of 11.12.1996, p. 1. 
26 Council Regulation of 15 June 1992 concerning measures for the Canary Islands with regard to certain 
agricultural products, OJ L 173 of 27.6.1992, p. 13, as last amended by Council Regulation (EC) No 2348/96; 
OJL 320 of 11.12.1996, p. 1. 
27 Council Regulation of 19 July 1993 introducing specific measures for the smaller Aegean islands concerning 
certain agricultural products, OJ L 184 of 27.7.1993, p.l, as last amended by Commission Regulation (EC) 
No 2417/95, OJ L 248 of 14.10.1995, p. 39. 
162 
3. The Regulations and provisions repealed under paragraphs 1 and 2 shall remain applicable 
to actions approved by the Commission under those Regulations before 1 January 2000. 
4. Council and Commission Directives adopting lists of less favoured areas or amending such 
lists in accordance with Article 21(2) and (3) of Regulation (EC) No 950/97 shall remain in 
force unless further amended in the framework of programmes. 
Article 54 
This Regulation shall enter into force on the seventh day following its publication in the Official 
Journal of the European Communities. 
It shall apply in relation to Community support as from 1 January 2000. 
Done at 
For the Council 
163 
Annex 
Table of amounts 
Article 
8(2) 
12(1) 
15(3) 
22(2) 
29(3) 
30(2) Subject 
setting up aid 
early retirement 
minimum compensatory 
allowance 
maximum compensatory 
allowance 
annual crops 
specialised perennial crops 
other land uses 
premium to cover 
losses from afforestation 
- for farmers or associations 
thereof 
- for any other private law 
person 
minimum compensatory 
payment 
maximum compensatory 
payment ECU 
25 000 
15 000 
3 500 
40 
200 
600 
900 
450 
600 
150 
40 
120 per transferor 
per worker 
per hectare 
per hectare 
per hectare 
per hectare 
per hectare 
per hectare 
per hectare 
per hectare 
per hectare 
164 
Proposal for a 
Commission Regulation (EO No .J... 98/0 ] ] 2 (CNS) 
of 
on the financing of the common agricultural policy 
THE COUNCIL OF THE EUROPEAN UNION, 
Having regard to the Treaty establishing the European Community, and in particular 
Article 43 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 Court of Auditors3, 
Having regard to the opinion of the Economic and Social Committee4, 
Whereas by means of Regulation No 25 on the financing of the common agricultural 
policy5, the Council established the European Agricultural Guidance and Guarantee Fund 
(EAGGF), hereinafter referred to as "the Fund", which forms part of the general budget 
of the European Union; whereas that Regulation laid down the principles which should 
apply for the financing of the common agricultural policy; 
1 OJC... 
2 OJC... 
3 OJC... 
4 OJC... 
5 OJ 30, 20.4.1962. Regulation as last amended by Regulation (EEC) No 728/70 (OJ L 94, 28.4.1970, 
p. 9) 
165 
Whereas at the single market stage, in view of the fact that price systems are standardised 
and the agricultural policy is a Community policy, the financial consequences devolve 
upon the Community; whereas, in accordance with that principle as laid down in Article 
2(2) of Regulation No 25, refunds on exports to third countries, intervention aimed at 
stabilising agricultural markets, rural development measures, specific veterinary measures 
as laid down in Council Decision No 90/424/EEC of 26 June 1990 on expenditure in the 
veterinary field6 and measures intended to provide information on the common 
agricultural policy are financed by the Fund in order to achieve the objectives set out in 
Article 39(l)(a) of the Treaty; 
Whereas the "Guarantee" section of the Fund should in particular finance expenditure of 
the common organisation of the agricultural markets, those rural development measures 
which accompany market support, certain fishery expenditure, certain veterinary 
expenditure as well as measures intended to provide information on the common 
agricultural policy; 
Whereas the "Guidance" section of the Fund should finance expenditure for certain rural 
development measures in regions whose development is lagging behind as well as for the 
rural development Community initiative; 
Whereas the Commission is responsible for the administration of the Fund and whereas 
close cooperation between Member States and the Commission is provided for within a 
Committee for the European Agricultural Guidance and Guarantee Fund; 
6 OJL 224, 18.8.1990, p. 19 
166 
Whereas the responsibility for checking the Fund's Guarantee Section expenditure lies, in 
the first place, with the Member States, which designate the authorities and bodies 
empowered to effect expenditure; whereas the Member States must carry out this task 
fully and effectively; whereas the Commission, being responsible for implementing the 
Community budget, must verify the conditions under which payments and checks have 
been made; whereas the Commission can only finance expenditure where those conditions 
offer all necessary guarantees regarding compliance with Community rules; whereas, in a 
decentralised system of management of Community expenditure* it is essential that the 
Commission, as the institution responsible for funding, is entitled and enabled to carry out 
all checks on the management of expenditure it considers necessary and that there should 
be full and effective transparency and mutual assistance between the Member States and 
the Commission; 
Whereas, during the clearance of accounts, the Commission is able to determine within a 
reasonable time the total expenditure to be entered against the Guarantee Section in the 
general account only if its has satisfactory assurance that the national controls are 
adequate and transparent and that the paying agencies verify the legality and regularity of 
the payment requests which they execute; whereas provisions should therefore be made 
for the accreditation of paying agencies by Member States, the Commission provides 
guidance on the criteria to be applied; whereas, for that purpose, it should be stipulated 
that only expenditure effected by paying agencies accredited by the Member States should 
be financed; whereas, moreover, in order to ensure the transparency of national controls, 
in particular as regards authorisation, validation and payment procedures, the number of 
authorities and bodies to which these responsibilities are delegated should, where 
appropriate, be restricted taking account of the constitutional arrangements of each 
Member State; 
167 
Whereas decentralised management of Community funds, in particular following reform of 
the common agricultural policy, leads to the designation of several paying agencies; 
whereas, therefore, where a Member State accredits more than one paying agency, it must 
designate a single contact body to ensure consistency in the management of the funds, to 
provide liaison between the Commission and the various accredited paying agencies and 
to ensure that the information requested by the Commission concerning the operations of 
several paying agencies is made rapidly available; 
Whereas financial resources must be mobilised by the Member States in accordance with 
the needs of their disbursing agencies, while the Commission makes advance payments 
against the booking of the expenditure effected by the disbursing agencies; whereas in the 
framework of rural development measures, genuine advance payments for programme 
implementation should be provided for; whereas it is appropriate to treat these advance 
payments according to the financial mechanisms established for advances on the provision 
for expenditure effected in a reference period; 
Whereas two types of decisions should be established, one concerning the clearance of the 
Guarantee Section of the Fund, the other determining the consequences, including 
financial corrections, to be drawn from the results of the checks on conformity, with 
Community rules, of the expenditures; 
Whereas the checks on conformity and the ensuing clearance decisions will therefore no 
longer be linked to the implementation of the budget in a particular financial year; whereas 
the maximum period to which the consequences to be drawn from the checks on 
conformity may be applied must be determined; whereas, however, the pluriannual 
character of rural development measures does not allow to apply such a maximum period; 
Whereas measures must be taken to prevent and deal with any irregularities and to 
recover the amounts lost as a result of such irregularities or negligence; whereas the 
financial responsibility for such irregularities or negligence must be determined; 
168 
Whereas Community expenditure must be made subject to close supervision; whereas, in 
addition to supervision carried out by Member States on their own initiative, which 
remains essential, provisions should be made for verification by officials of the 
Commission and for it to have the right to enlist the help of Member States; 
Whereas information technology needs to be used as fully as possible for producing the 
information to be sent to the Commission; whereas, when carrying out checks, the 
Commission must have full and immediate access to information on expenditure held in 
both documents and electronic files: 
Whereas the extent of Community financing makes it necessary for the European 
Parliament and the Council to be kept regularly informed by means of financial reports; 
Whereas Council Regulation (EEC) No 729/70 of 21 April 1970 on the financing of the 
common agricultural policy7 has been substantially amended on several occasions; 
whereas, in the event of new amendments being made to the said Regulation, in order to 
clarify and rationalise matters, all provisions in question should be recast, 
HAS ADOPTED THIS REGULATION: 
Article 1 
1. The European Agricultural Guidance and Guarantee Fund (hereinafter called the 
"Fund") shall form part of the general budget of the European Union. 
It shall comprise two sections: 
- the Guarantee Section; 
- the Guidance Section. 
2. The Guarantee Section shall finance: 
(a) refunds on exports to third countries; 
(b) intervention intended to stabilise the agricultural market; 
7 OJ L 94, 28.4.1970, p. 13, as last amended by Regulation (EC) No 1287/96 (OJ L 125, 8.6.1995, 
P 1) 
169 
(c) rural development measures outside objective No 1 programmes 
except the rural development Community initiative; 
(d) measures accompanying the restructuring of the fishing fleets outside 
objective No 1 regions and all structural measures for the fishing 
sector outside objective No 1 and objective No 2 regions, according 
to the relevant legislation in the fisheries sector; 
(e) the Community's financial contribution towards specific veterinary 
measures, inspection measures in the veterinary field and programmes 
for the eradication and monitoring of animal diseases (veterinary 
measures) as well as towards plant health measures; 
(f) measures intended to provide information on the common agricultural 
policy. 
3. The Guidance Section shall finance rural development measures which are not 
covered by paragraph 2 point (c). 
4. Expenditure relating to administrative costs and personnel borne by Member States 
and by recipients of aid from the Fund shall not be taken over by the Fund. 
Article 2 
1. Refunds on export to third countries, granted in accordance with the Community 
rules within the framework of the common organisation of agricultural markets, shall 
be financed under Article l(2)(a). 
2. Intervention intended to stabilise the agricultural markets, undertaken in accordance 
with Community rules within the framework of the common organisation of 
agricultural markets, shall be financed under Article l(2)(b). 
3. The Council, acting by a qualified majority on a proposal from the Commission, 
shall, as far as is necessary, adopt the procedure for financing the measures referred 
to in paragraphs 1 and 2. 
170 
Article 3 
1. Rural development measures outside objective No 1 undertaken in accordance wi\h 
Community rules shall be financed under Article l(2)(c). 
2. Fishery measures undertaken in accordance with Community rules shall be financed 
under Article l(2)(d). 
3. Veterinary and plant health measures undertaken in accordance with Community 
rules shall be financed under Article l(2)(e). 
4. Information measures undertaken in accordance with Community rules shall be 
financed under Article l(2)(f). 
5. Detailed rules for the application of this Article shall be adopted in accordance with 
the procedure laid down in Article 13. 
Article 4 
1. Each Member State shall communicate to the Commission: 
(a) details of the authorities and bodies it accredits to pay the expenditure 
referred to in Articles 2 and 3, hereinafter referred to as "paying 
agencies"; 
(b) where more than one paying agency is accredited, details of the 
authority or body it charges, first, with bringing together the 
information to be supplied to the Commission and sending it the same, 
and, second, with promoting the harmonised application of 
Community rules, hereinafter referred to as the "coordinating body". 
2. Paying agencies shall be authorities and bodies of the Member States, which, as 
regards payments in the areas for which they are responsible, offer sufficient 
guarantees that: 
(a) the admissibility of claims and compliance with Community rules are 
checked before payment is authorised; 
171 
(b) the payments effected are correctly and fully recorded in the accounts, 
and 
(c) the necessary documents are submitted within the time and in the form 
laid down in Community rules. 
3. The paying agencies must hold documents justifying the payments effected and 
documents concerning the carrying out of the prescribed administrative and physical 
controls. Where the relevant documents are kept by the bodies responsible for 
authorising the expenditure, those bodies must transmit reports to the paying agency 
on the number of checks carried out, their content and the measures taken in the light 
of the results. 
4. Only expenditure effected by accredited paying agencies may be the subject of 
Community financing. 
5. Each Member State shall, taking into account its constitutional and institutional 
structures, limit the number of accredited paying agencies to the minimum necessary 
in order to effect the expenditure referred to in Articles 2 and 3 under satisfactory 
administrative and accounting conditions. 
6. Each Member State shall communicate to the Commission the following particulars 
concerning those paying agencies: 
(a) their name and their statues; 
(b) the administrative, accounting and internal control conditions under 
which payments are made relating to the implementation of 
Community rules within the framework of the common agricultural 
policy, 
(c) the act of accreditation. 
The Commission shall be informed forthwith of any change in those particulars. 
172 
7. Where one or more of the conditions for accreditation are not, or are no longer, 
fulfilled by an accredited paying agency, accreditation shall be withdrawn unless the 
paying agency makes the necessary adjustments within a time limit to be fixed in 
relation to the seriousness of the problem. The Member State concerned shall inform 
the Commission. 
8. Detailed rules for the application of this Article shall be adopted in accordance with 
the procedure laid down in Article 13. 
Article 5 
1. The financial resources required to cover the expenditure referred to in Articles 2 
and 3 shall be made available to the Member States by the Commission by means of 
advances on the provision for expenditure effected in a reference period. 
Advance payments for programme implementation in the framework of rural 
development measures referred to in Article 3(1) may be granted by the Commission 
on the approval of the programmes concerned and shall be deemed to be expenditure 
effected on the first day of the month following the granting decision. 
2. Until the advances on the provision for expenditure effected are paid, the resources 
necessary to meet that expenditure shall be mobilised by the Member States in 
accordance with the needs of their accredited paying agencies. 
3. Detailed rules for the application of this Article shall be adopted in accordance with 
the procedure laid down in Article 13. 
173 
Article 6 
1. Member States shall, at regular intervals, transmit to the Commission the following 
information concerning the accredited paying agencies and coordinating bodies and 
relating to the transactions financed by the Guarantee Section of the Fund: 
(a) statements of expenditure and estimates of financial needs; 
(b) annual accounts, accompanied by the information required for 
clearance and an attestation regarding the integrality, exactitude and 
veracity of the accounts transmitted; 
2. Detailed rules for the application of this Article and, in particular, those covering the 
attestation of the accounts referred to in paragraph 1(b) shall be adopted in 
accordance with the procedure laid down in Article 13. 
Article 7 
1. The Commission, after consulting the Fund Committee shall adopt the decisions set 
out in paragraphs 2, 3 and 4. 
2. The Commission shall decide on monthly advances on the provision for expenditure 
effected by the accredited paying agencies. 
Expenditure for October shall be attributed to October if it is effected from 1 to 
15 October and to November if it is effected from 16 to 31 October. Advances shall 
be paid to the Member State not later than the third working day of the second 
month following that in which the expenditure is effected. 
Additional advances may be made, the Fund Committee being informed at the next 
consultation. 
3. The Commission shall, before 30 April of the year following the financial year 
concerned, on the basis of the information referred to in point (b) of Article 6(1), 
clear the accounts of the paying agencies. 
174 
The clearance of accounts decision shall cover the integrality, exactitude and veracity 
of the accounts submitted. The decision shall not prejudice the adoption of a 
subsequent decision pursuant to paragraph 4. 
4. The Commission shall decide on the expenditure to be excluded from the Community 
financing referred to in Articles 2 and 3 where it finds that expenditure has not been 
effected in compliance with Community rules. 
Before a decision to refuse financing is taken, the results of the Commission's checks 
and the replies of the Member State concerned shall be notified in writing, after 
which the two parties shall endeavour to reach agreement on the action to be taken. 
If no agreement is reached, the Member State may ask for a procedure to be initiated 
with a view to mediating between the respective positions within a period of four 
months, the results of which shall be set out in a report sent to and examined by the 
Commission, before a decision to refuse financing is taken. 
The Commission shall evaluate the amounts to be excluded having regard in 
particular to the degree of non-compliance found. The Commission shall take into 
account the nature and gravity of the infringement and the financial loss suffered by 
the Community. 
A refusal to finance may not involve expenditure referred to in Article 2 effected 
prior to twenty-four months preceding the Commission's written communication of 
the results of those checks to the Member State concerned. 
However, the fifth subparagraph shall not apply to the financial consequences: 
(a) of irregularities as referred to in Article 8(2); 
(b) concerning national aids, or infringements, for which the procedures 
referred to in Articles 93 and 169 of the Treaty have been initiated. 
175 
5. Detailed rules for the application of this Article shall be adopted in accordance with 
the procedure laid down in Article 13. Those rules shall cover in particular the 
treatment of advance payments referred to in Article 5(1) second subparagraph under 
paragraphs 2, 3 and 4 and the procedures relating to the decisions referred to in the 
said paragraphs. 
Article 8 
1. The Member States shall, in accordance with national provisions laid down by law, 
regulation or administrative action, take the measures necessary to: 
(a) satisfy themselves that transactions financed by the Fund are actually 
carried out and executed correctly; 
(b) prevent and deal with irregularities; 
(c) recover sums lost as a result of irregularities or negligence. 
The Member States shall inform the Commission of the measures taken for those 
purposes and in particular of the state of the administrative and judicial procedures. 
2. In the absence of total recovery, the financial consequences of irregularities or 
negligence shall be borne by the Community, with the exception of the consequences 
of irregularities or negligence attributable to administrative authorities or other 
bodies of the Member States. 
The sums recovered shall be paid to the accredited paying agencies and deducted by 
them from the expenditure financed by the Fund. The interest on sums recovered or 
paid late shall be paid into the Fund. 
3. The Council, acting by a qualified majority on a proposal from the Commission, shall 
lay down general rules for the application of this Article. 
176 
Article 9 
1. Member States shall make available to the Commission all information required for 
the proper working of the Fund and shall take all suitable measures to facilitate the 
supervision which the Commission may consider it necessary to undertake within the 
framework of the management of Community financing, including inspections on the 
spot. 
Member States shall communicate to the Commission provisions laid down by law, 
regulation or administrative action which they have adopted for the application of 
legal acts of the Community relating to the common agricultural policy insofar as 
those acts have financial consequences for the Fund. 
2. Without prejudice to the supervision effected by the Member States in accordance 
with national provisions laid down by law, regulation or administrative action and 
without prejudice to Article 188c of the Treaty, or to any inspection organised on the 
basis of point (c) of Article 209 of the Treaty, authorised representatives appointed 
by the Commission to carry out inspections on the spot shall have access to the 
books and all other documents, including information created or stored in electronic 
form, relating to expenditure financed by the Fund. 
They may, in particular, check 
(a) whether administrative practices are in accordance with Community 
rules; 
(b) whether the requisite supporting documents exist and tally with the 
transaction financed by the Fund; 
(c) the condition under which transactions financed by the Fund are 
carried out and checked. 
The Commission shall give due notice before the inspection is carried out to the 
Member State concerned or to the Member State on whose territory it is to take 
place. Officials of the Member State concerned may take part in the inspection. 
177 
At the request of the Commission and with the agreement of the Member State, 
inspections or inquiries concerning the transactions referred to in this Regulation 
shall be carried out by the competent authorities of that Member State. Officials of 
the Commission may also participate. 
To make verification more effective, the Commission may, with the agreement of the 
Member States concerned, arrange for administrative authorities of those States to 
participate in certain inspections or inquiries. 
3. The Council, acting by a qualified majority on a proposal from the Commission, 
shall, as far as is necessary, lay down general rules for the application of this Article. 
Article 10 
Before 1 July of each year, the Commission shall submit to the European Parliament and 
to the Council a financial report on the administration of the fund during the preceding 
financial year and, in particular, on the state of its resources and the nature of its 
expenditure and the conditions for achieving Community financing. 
Article 11 
The Committee for the European Agricultural Guidance and Guarantee Fund (hereinafter 
called the "Fund Committee") shall assist the Commission in administering the Fund, as 
laid down in Articles 12 to 15. 
Article 12 
The Fund Committee shall consist of representatives of the Member States and of the 
Commission. Each Member State shall be represented on the Fund Committee by not 
more than five officials. 
The Fund Committee shall have a representative of the Commission as Chairman. 
178 
Article 13 
1. Where the procedure laid down in this Article is to be followed, the matter shall be 
referred to the Fund Committee by the Chairman, either on his own initiative or at 
the request of the representative of a Member State. 
2. The representative of the Commission shall submit to the Committee a draft of the 
measures to be taken. The Committee shall deliver its opinion on the draft within a 
time which the Chairman may lay down according to the urgency of the matter. The 
opinion shall be delivered by the majority laid down in Article 148(2) of the Treaty in 
the case of decisions which the Council is required to adopt on a proposal from the 
Commission. The votes of the representatives of the Member States within the 
Committee shall be weighted in the manner set out in that Article. The Chairman 
shall not vote. 
The Commission shall adopt measures which shall be immediately applicable. 
However, if such measures are not in accordance with the Opinion delivered by the 
Fund Committee, they shall at once be communicated by the Commission to the 
Council. In that case, the Commission may defer for not more than one month from 
the date of such communication, application of the measures which it has adopted. 
The Council, acting by a qualified majority, may adopt a different decision within one 
month. 
Article 14 
1. The Fund Committee shall be consulted: 
(a) in cases where provision is made for it to be consulted; 
(b) for the assessment of the Fund's credits to be entered in the 
Commission's estimate for the coming financial year and, if necessary, 
in additional estimates; 
(c) on draft reports on the Fund to be submitted to the Council. 
2. The Fund Committee may examine any other question referred to it by its Chairman 
either on his own initiative or at the request of a representative of a Member State. 
179 
It shall be informed regularly of the activities of the Fund. 
Article 15 
The Chairman shall convene the Fund Committee. 
Secretarial services shall be provided for the Fund Committee by the Commission. 
The Fund Committee shall lay down its own rules of procedure. 
Article 16 
Regulation (EEC) No 729/70 is hereby repealed. 
References to the repealed Regulation shall be construed as references to this Regulation 
and should be read in accordance with the correlation table set out in the Annex. 
Article 17 
Article 15 third subparagraph and Article 40 of Council Decision 90/424/EEC are hereby 
deleted. 
Article 18 
The measures required to facilitate the transition from the arrangements provided in 
Regulation (EEC) No 729/70 to those established by this Regulation shall be adopted in 
accordance with the procedure laid down in Article 13. 
Article 19 
This Regulation shall enter into force on the seventh day following its publication in the 
Official Journal of the European Communities. 
It shall apply to expenditure effected as from 1 January 2000. 
180 
This Regulation shall be binding in its entirety and directly applicable in all Member 
States. 
Done at Brussels, 
For the Council 
The President 
181 
Regulation 729/70 This Regulation 
Article 1 (I) Article 1 (1) 
Article 1 (2) (a) and (b) Article 1 (2) (a) and (b) 
Article 1 (4) Article 1 (4) 
Article 2(1) Article2(l) 
Article 2 (2) Article 2 (3) 
Article 3(1) Article 2 (3) 
Article 3 (2) Article 2 (3) 
Article 3 (3) 
Article 4 (1) (a) first subparagraph Article 4 (1) (a) 
Article 4 (1) (a) second subparagraph Article 4 (2) 
Article 4 (1) (a) third subparagraph Article 4 (3) 
Article 4 (1) (b) first subparagraph Article 4(1) (b) 
Article 4 (1) (b) second subparagraph Article 4 (4) 
Article 4 (2) Article 4 (5) 
Article 4 (3) Article 4 (6) 
Article 4 (4) Article 4 (7) 
Article 4 (5) first sentence Article 5 (1) first subparagraph 
Article 4 (5) second sentence Article 5 (2) 
Article 4 (6) Article 4 (8) and Article 5 (3) 
Article 5 (1) Article 6 (1) 
Article 5 (2) (a) Article 7 (2) 
Article 5 (2) (b) Article 7 (3) 
Article 5 (2) (c) Article 7 (4) 
Article 5a 
Article 6 
Article 6a 
Article 6b 
Article 6c 
Article 7 
Article 8 Article 8 
Article 9 Article 9 
Article 10 Article 10 
Article 11 Article 11 
Article 12(1) Article 12 
Article 12 (2) 
Article 13 Article 13 
Article 14 Article 14 
Article 15 Article 15 
Article 16 
Proposal for a 
Council Regulation ŒO No /... 98/0113 (CNSÏ 
of 199. 
establishing common rules for direct support schemes under the common agricultural policy 
THE COUNCIL OF THE EUROPEAN UNION, 
Having regard to the Treaty establishing the European Community, and in particular Article 43 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 for direct payments under the various income support schemes in the common agricultural 
policy some common conditions should be established; 
Whereas payments foreseen under Community support schemes should be made by the competent 
national authorities in full to beneficiaries without any prejudice of reductions explicitly foreseen in the 
present Regulation; 
Whereas, with respect of better integrating the environment into the common market organisations, 
Member States should apply appropriate environmental measures in relation to agricultural land and 
agricultural production; whereas Member States should decide the consequences in case of not 
observing mandatory environmental requirements and that they should be enabled to reduce or even 
cancel benefits accruing from support schemes where such environmental requirements are not 
respected; whereas such measures should be taken by Member States notwithstanding the possibility of 
granting aids for facultative agri-environmental undertakings; 
1 OJC 
2 OJC... 
3 OJC... 
183 
Whereas, in order to stabilise the employment situation in agriculture and thus contributing to a fair 
standard of living for the agricultural community, including all persons engaged in agriculture, Member 
States should be authorised to reduce direct payments to farmers in cases where the labour force used 
on their holding falls short of limits to be determined; whereas in order to in particular maintain in 
particular agricultural productivity, such reductions should, however, not exceed 20 % of the total 
amount of payments; 
Whereas modalities for reductions of payments for environmental reasons or for reasons of insufficient 
labour force should be determined by Member States on the basis of objective criteria; whereas Member 
States should be enabled to use amounts made available from payment reductions for additional agri-
environmental measures in the framework of rural development support provided for under Regulation 
(EC) No...4; 
Whereas direct payments should be subject to an overall limit in order to take account of economics of 
scale and to avoid excessively high payments to single beneficiaries; whereas the application of such 
ceilings should not put into question the objective laid down in Article 39 paragraph 1 of the Treaty to 
ensure a fair standard of living for the agricultural community and to stabilise markets; whereas overall 
ceilings for direct payments should be applied in a degressive way; 
Whereas common support schemes have to be adapted to market developments, if necessary within 
short delays; whereas beneficiaries can, therefore, not rely on support conditions remaining unchanged 
and should be prepared to possible review of schemes in the light of market developments; 
Whereas the support schemes under the common agricultural policy provide for direct income support 
in particular with a view to ensuring a fair standard of living for the agricultural community; whereas 
this objective is closely related to the maintainance of rural areas by enabling farmers to exercise 
genuine and serious agricultural activities; whereas, in order to avoid misallocations of Community 
funds, Member States should restrict, in an appropriate manner, the benefit of support payments to 
farmers who can demonstrate on the basis of objective and verifiable elements that the main purpose of 
their support-related activités is of such a genuine and serious nature and thus is not primarily pursued 
to obtain support payments; 
OJL 
184 
Whereas, in view of the significant budgetary implications of direct payment support and in order to 
better appraise their impact, Community schemes should be subject to a proper evaluation, 
HAS ADOPTED THIS REGULATION: 
Article 1 
Scope 
This Regulation shall apply to payments granted directly to farmers under support schemes in the 
framework of the common agricultural policy which are financed in full or in part by the "Guarantee" 
section of the EAGGF, except those provided for under Regulation (EC) No ... [Rural Development] 
(support schemes). 
Article 2 
Full payment 
Payments under support schemes shall be made in full to the beneficiaries. 
Article 3 
Cross compliance 
1. Member States shall take the environmental measures they consider to be appropriate in view of 
the specific situation of the agricultural land used and the production concerned. These measures 
may include support in return for agri-environmental undertakings, general mandatory 
environmental requirements and specific environmental requirements constituting a condition for 
direct payments. 
2. Member States shall decide the sanctions which are appropriate and proportionate to the 
seriousness of the ecological consequences of not observing the mandatory environmental 
requirements. They may provide for a reduction or, where appropriate, cancellation of the benefits 
accruing from the support schemes concerned if such specific environmental requirements are not 
respected. 
185 
Article 4 
Modulation 
1. Member States may decide to reduce the amounts which would, but for this paragraph and before 
applying Article 6, be granted to farmers in respect of a given calendar year in cases where the 
labour force used on their holdings during that calendar year, expressed in annual work units, falls 
short of limits to be determined by the Member States. 
"Annual work unit" shall mean the national or regional average annual working time of adult full 
time farm workers employed throughout a calendar year. 
2. The reduction of support to a farmer in respect of a given calendar year, resulting from the 
application of the measures referred to in paragraph 1, shall not exceed 20% of the total amount of 
payments which would, but for paragraph 1, be granted to the farmer in respect of the calendar 
year concerned. 
Article 5 
Common provision 
1. Member States shall apply the measures referred to in Articles 3 and 4 in such a way as to ensure 
equal treatment between farmers and to avoid market and competition distortions. 
2. The difference between the amounts which would, but for Articles 3 and 4, be paid to farmers in a 
Member State in respect of a calendar year and the amounts calculated after application of those 
Articles, shall be available to the Member State concerned within time limits to be fixed under the 
procedure referred to in Article 11 as additional Community support for agri-environment in 
accordance with Articles 20 to 22 of Regulation (EC) No [rural development]. 
186 
Article 6 
Ceiling 
Where the total amount of payments which would, but for this Article, be granted to a farmer under the 
support schemes in respect of a given calendar year exceeds ECU 100 000, that amount shall be 
reduced by: 
- 20% of the part of that amount which exceeds ECU 100 000 but is not more than ECU 200 000, and 
- 25% of the part of that amount which exceeds ECU 200 000. 
Article 7 
Review 
Support schemes shall be applied without prejudice to possible review at any moment in the light of 
market developments. 
Article 8 
Restriction of payments 
Member States shall take the measures they consider to be necessary, taking account of the objectives 
of the support schemes to restrict the benefit of payments to farmers who, in the case of doubt, are able 
to demonstrate on the basis of the objective elements of all their income-related activités, with reference 
in particular to the legal, economic, social and agronomic aspects thereof, that they do not exercise 
support relevant activities predominantly for the purpose of obtaining the benefit of support payments. 
Article 9 
Evaluation 
In order to gauge their effectiveness, payments under support schemes shall be subject to evaluation 
designed to appraise their impact with respect of their objectives and to analyse their effects on the 
relevant markets. 
187 
Article 10 
Information of the Commission 
Member States shall inform the Commission in detail on the measures taken to apply this Regulation. 
Article 11 
Definitions 
For the purposes of this Regulation: 
(a) "farmer" shall mean an individual agricultural producer, whether a natural or legal person or a 
group of natural or legal persons, whatever legal status is granted the group and its members by 
national law, whose holding is within Community territory, 
(b) "holding" shall mean all the production units managed by a farmer situated within the same 
Member State's territory, 
(c) payments to be granted in respect of a calendar year shall include payments to be granted in 
respect of other periods starting in that calendar year. 
Article 12 
Detailed Rules 
Detailed rules for the application of this Regulation including, in particular: 
- the list of support schemes referred to in Article 1, 
- the measures necessary to avoid Articles 3, 4 and 6 to be circumvented, 
shall be adopted by the Commission according to the procedure referred to in Article .... of Regulation 
(EC) No [arable crops], the procedure laid down in Article 39 of Regulation (EC) No 
[beef] or, as appropriate, the corresponding Articles in the other Regulations on the common 
organisation of agricultural markets. 
188 
Article 13 
Entry into force 
This Regulation shall enter into force on the day of its publication in the Official Journal of the 
European Communities. 
It shall apply as from 1 January 2000. 
Done at 
For the Council 
189 
it £ EUROPEAN COMMISSION 
Brussels, 1998 
EVALUATION OF THE FINANCIAL IMPACT OF THE 
COMMISSION PROPOSALS CONCERNING THE REFORM OF THE 
COMMON AGRICULTURAL POLICY 
AGENDA 2000 
2000 - 2006 
(Estimations based on preliminary estimations of the 1999 expenditure for non-reformed sectors) 
A$o 
INTRODUCTION 
In the three parts of this document an assessment has been made of global expenditure for 
the EAGGF Guarantee over the period 2000-2006. 
Part A includes global expenditure after the reform as proposed by the Commission. 
Part B includes global expenditure with the maintenance of status quo. 
Part C includes the financial impact of the proposed reform expressed as the difference 
between the cost under part A and under part B. 
f.i •' 
THE ASSESSMENT OF THE GLOBAL EXPENDITURE UNDER RUBRIC 1 AS 
PROPOSED BY THE COMMISSION IN AGENDA 2000 IS CONTAINED IN PART 
A. 
The agricultural guideline 
The latest revision of the economic forecasts and a revision for previous years leads to an 
increase in the 1999 guideline to 45 205 Mio. ECU, compared to a forecast in July 1997 of 
45 000 Mio. ECU. By maintaining the estimated annual growth rate at 2,5% and the deflator 
at 2% the agricultural guideline will increase to 
2000 2001 2002 2003 2004 2005 2006 
Mio. ECU (EU-15) 46940 48750 50630 52600 54650 56790 59020 
The forecasted guideline after enlargement takes the sugar levies to be paid by the new 
Member States into account. Furthermore, total growth is estimated to increase at an annual 
rate of 2,6% due to the impact of the 6 new Member States (5% growth with a GDP share of 
4%). 
Mio.ECU(EU-21) 50940 52990 55120 57350 59680 
"Existing" rubric 1 measures 
For the measures included in EAGGF Guarantee as outlined before the reform a detailed 
assessment of the total cost after the reform has been made for the sectors for which a 
specific proposal has been put forward. These sectors are: arable crops, dairy products, and 
beef and veal. 
The quantitative impact is based on the forecasts made in the DG VI CAP 2000 documents 
of April 1997 or on updated forecasts. 
A ratio between the $ and the ECU of 0,87 has been used. 
An analysis has also been made of the indirect financial impact for other sectors, as for 
example pigs and poultry, non Annex II products, and certain aid schemes. 
The point of departure for the calculation of the financial cost for the non reformed sectors 
has been the preliminary estimation of expenditure for the 1999 budgetary exercise. This 
expenditure has been kept stable to the extent that there are no specific factors which should 
lead to a change in the level of expenditure. 
For fruit and vegetables the financial assessment made after the 1996 reform has been used. 
For tobacco the financial sheet accompanying the latest proposal has been used. 
For sheep and goat meat a market price of 3 300 ECU/tonne has been used for the 
calculation of the financial cost. 
The forecast of expenditure for fish is based on the assumption of a slight deterioration of the 
market in the year 2000 and integrates, as from the financial year 2001, the budgetary 
consequences of introducing the new measures envisaged by the Commission in its 
communication on the future of the market in fisheries products in the European Union 
(COM(97)719 final of 16.12.1997). 
No account is taken of the clearance of accounts which normally leads to a net receipt for the 
EAGGF Guarantee. 
For the accompanying measures the cost is increased from the present level of 2 620 Mio. 
ECU to 2 800 Mio. ECU as foreseen in the AGENDA 2000 document of 15 July 1997. 
(DOC/97/6). The increase reflects the desire that the agri-environmental measures should be 
reinforced and encouraged. 
The introduction of financial ceilings on the amount to be paid to an individual holding is 
estimated to gradually lead to an annual saving of the order of 400 Mio. ECU, the main 
impact falling on arable and mixed farms. 
The calculations have been made in ECU (B). 
Global expenditure for "existing" rubric 1 measures is estimated to be 46 460 Mio. ECU in 
2006. 
"New" measures to be included under rubric 1 
The inclusion of expenditure for veterinary measures, currently financed under Chapter B2-
510. is expected to increase expenditure by 100 Mio. ECU per year. 
For the new structural measures and the cost arising from enlargement the financial 
assessment corresponds to the figures included in the AGENDA 2000 document of 15 July 
1997 (DOC/97/6). However, an additional amount of 45 Mio. ECU has been added to cover 
measures for the restructuring of the fishing fleets in Objective 2 areas. The initial amount of 
1 945 Mio. ECU in 2000 has been increased by 2% annually to reach 2 190 Mio. ECU in 
2006. The breakdown between the various measures is only indicative, based on average 
historical spending. In future Member States will have more flexibility in establishing their 
policy mix, and the relative weight of the different measures will possibly change. 
Community support for rural development will be subject to a financial planning on an 
annual basis. In practice, this will prevent an overshoot of the budget for rural development 
measures. 
The pre-accession aid for candidate countries is set at 500 Mio. ECU in 1997 prices as 
foreseen in the AGENDA 2000 document of 15 July 1997 (DOC/97/6), equivalent to 530 
Mio. ECU in the year 2000 and rising to 600 Mio. ECU for the year 2006 with an annual 
inflation rate of 2%. 
The expected cost of enlargement (excluding pre-accession aid) has been maintained as 
outlined in the AGENDA 2000 document of 15 July 1997 (DOC/97/6), i.e. +1 700 Mio. 
ECU in 2002 increasing to +3 900 Mio. ECU in 2006. 
/IS 
Total expenditure 
Total expenditure for measures under rubric 1 as defined after the reform is estimated to 
become 49 350 Mio. ECU for EU-15 in 2006, leaving a margin of 9 670 Mio. ECU under 
the agricultural guideline(EU-15). Total expenditure for EU-21 is estimated at 53 250 Mio. 
ECU, leaving a margin under the EU-21 guideline of 6 430 Mio. ECU. 
IN PART B AN ASSESSMENT OF GLOBAL EXPENDITURE WITH THE 
MAINTENANCE OF STATUS QUO HAS BEEN MADE. 
As under A, the expenditure for non-reformed products has mainly been based on the 
preliminary estimation of expenditure for the 1999 budgetary exercise. This expenditure has 
been kept stable to the extent that there are no specific factors which should lead to a change 
in the level of expenditure. 
For arable crops, dairy products, and beef and veal the expenditure has been evaluated by 
applying the present price levels to the quantitative and price forecasts in DOC/97/6 or 
updated forecasts. 
On the assumption of maintaining the status quo, global expenditure would be of the order of 
43 315 Mio. ECU, leaving a margin under the guideline of 15 705 Mio. ECU in 2006. 
IN PART C THE FINANCIAL IMPACT OF THE PROPOSED REFORM IS 
OUTLINED. 
The estimated financial impact of the proposed reform is an additional cost of 3 145 Mio. 
ECU in 2006 for the sectors currently covered by rubric 1. The inclusion of certain 
veterinary measures increases the cost by 100 Mio. ECU. The structural measures outside 
objective 1 add another 2 190 Mio. ECU. With the inclusion of pre-accession aid of 600 
Mio. ECU total expenditure under rubric 1 for EU-15 is estimated to increase by 6 035 Mio. 
ECU in 2006. The estimated financial impact of enlargement of 3 900 Mio. ECU in 2006 
would lead to a total increase of expenditure for rubric 1 of 9 935 Mio. ECU in 2006 for EU-
21. 
INDIVIDUAL SECTORS 
ARABLE CROPS 
Proposals 
Intervention price 
It is proposed to reduce the intervention price of cereals by 20% in a single step, as from 
marketing year 2000/2001, bringing it down from 119,19 ECU/t to 95,35 ECU/t on 1 July 
2000. It is also proposed to abolish monthly increments which are currently fixed at 1,0 
LCU/t. 
Area payments 
The proposed changes are the following: 
- A single basic amount per tonne of 66 ECU for cereals; oilseeds, non-textile linseed and 
set-aside (current amounts are 54,34 ECU/t for cereals, 68,38 ECU/t for set-aside, 105,1 
ECU/t for linseed and the average world market price related aid for oilseeds for 1997/98 is 
450 ECU/ha) 
- The proposed basic amount is 72,5 ECU for protein crops (current amount is 78,49 ECU/t). 
Area payments will be calculated by multiplying the basic amount per tonne by the average 
cereals yield. 
Set-aside rate 
It is proposed to fix the basic set-aside rate at 0%. 
Payment period 
Payments shall be paid between the period 1 January and 31 March following the harvest. 
Main assumptions for the status quo situation 
In a status quo situation, the current intervention price of 119,19 ECU/t as well as current 
monthly increments are considered to remain unchanged. 
The basic amounts of the area payments are kept at their current level throughout the 6 year 
period and the average historical yields on which these payments are based are those paid for 
marketing year 1997/98. 
The 17,5 % set-aside rate which is fixed in Council Regulation (EEC) N° 1765/92 is 
maintained for all six years. 
It is assumed that all the base area available under the arable crops regime (53,5 Mio. ha) 
will be farmed and that a little less than a million hectares of it will be claimed as fodder 
area. 
,/{?:" 
The cultivated areas are distributed between the various arable crops following the forecasts 
for the year 1999. The total area as well as its distribution remain stable throughout the 
period 1999-2005. 
Cereals yields increase from 5,40 t/ha in 1999 to 5,89 t/ha in 2005. 
Total gross production of cereals reaches 214 million tonnes in 2005 (coming up from 195 
Mio. t. in 1999). 
An average estimated world market price is used throughout the period. For wheat, it is 145 
$/t, for coarse grains, 113 $/t and for oilseeds, 260 $/t. 
Exports are kept at the level of the GATT quantitative ceilings. 
Intervention stocks accumulate over the 6 year period to reach a final theoretical high of 72,5 
million tonnes in 2005. 
Impact of the reform 
On areas and on the cereals balance sheet 
The reduction of the basic set-aside rate from 17,5% to 0% will put 4 103 000 ha back into 
production while an estimated 3 000 000 ha area would remain as voluntary set-aside. 
The impact on cereals production of the area put back into cultivation (3 337 500 ha of 
which 70 000 ha of silage) will be an annual increase of around 18 million tonnes. This extra 
production is distributed between wheat and coarse grains with about 10 million tonnes for 
wheat and 8 million tonnes for coarse grain. 
It is assumed that the proposed reduction in the intervention price will enable the European 
Union to export wheat without the need for an export refund. (There are no quantitative or 
financial limits to refund free exports.) The calculations based on world market price 
forecasts confirm this. The additional production of wheat will find an outlet on export 
markets. This is the reason why export quantities of wheat after the reform have been 
increased beyond GATT limits to around 30 Mio. tonnes per year. 
For coarse grains, the exportable quantities remain within the GATT ceilings because it is 
assumed that the world market price situation will still require an export refund. 
Taking these elements into consideration, the reform would have as a result, estimated 
intervention stocks of cereals in the year 2005 of just under 25 million tonnes. 
On prices and area payments 
The reduction in the intervention price has a direct impact on the amount of the export 
refunds. It reduces wheat export refunds to 0 from an assumed 7,5 ECU/t in a status quo 
situation. 
With the proposed reform, area payments would be radically simplified. All arable crops 
(except protein crops) as well as set-aside will be getting a single basic amount of 66 ECU/t 
to be multiplied by the cereals yield. In our calculations, we have taken the average paid 
yield for the European Union for marketing year 97/98 of 4,86 t/ha. This brings us to an 
average area payment of 321 ECU/ha (352 ECU/ha for protein crops). 
Budgetary impact 
The cost of area payments would be increased from 16 870 Mio. ECU to 18 500 Mio. ECU 
after the reform. 
The reform would bring about a considerable saving on intervention costs and export 
refunds. In a status quo situation, the estimate for these costs amounts to 2 100 Mio. ECU 
whereas they are budgeted at 550 Mio. ECU in the final year of the reform. 
The impact of the reform on the cost of production refunds for starch would represent 95 
Mio. ECU because production refunds would decrease due to the change in the relationship 
between world market prices and European Union prices. 
By 2006 the total cost of the arable crops chapter is estimated at 19 250 Mio. ECU, the 
reform is estimated to lead to a saving in the order of 30 Mio. ECU in 2006. 
Impact on other chapters 
The reduction in cereals prices is expected to lead to the elimination of export refunds for 
pigmeat, eggs and poultry meat, and cereals in non-Annex II products. An indicative cost of 
40 Mio. ECU has been maintained for pigmeat in order to cover possible costs linked to 
private storage and exceptional support measures (swine fever). The impact on chapters 18 
(POSEI), 30 and(non Annex II products), and 31 (food programmes) is estimated at -10, -53 
and -13 Mio. ECU respectively. 
W 
MILK AND DAIRY PRODUCTS 
Proposals 
It is proposed to reduce the intervention prices by 15% over four years as from 1 July 2000, 
leading to a reduction of the intervention price for butter from 3282 ECU/t to 2789,7 ECU/t 
in 2006, and of the intervention price for skimmed milk powder from 2055,2 to 1746,9 
ECU/t in 2006. The indicative price for milk will be reduced from 309,8 ECU/t to 257,2 
ECU/t. The price reduction will be accompanied by the gradual introduction of a dairy cow 
premium of 215 ECU per cow (EU average), the beef part of this premium (70 ECU) will be 
financed under the beef chapter, leaving an average amount of 145 ECU/cow for the dairy 
budget chapter. Part of the direct aid (100 ECU) will be paid according to common criteria 
and part (average 45 ECU) will be paid according to national criteria, this does however not 
affect the global expenditure. The global number of premium units will correspond to the 
present level of the milk quota divided by the estimated EU yield of 5,8 tons/cow in 2000. 
The measures mentioned above will be accompanied by a gradual increase of the milk quota 
by 2% over four years as from 1 April 2001. The increased quota will be distributed in 
mountain and Nordic areas (1 %) as well as to young farmers (1%). 
Quantitative impact 
The price reduction is assumed to lead to an increased export of cheese without refund 
(+100 000 tonnes by the end of the period), to higher consumption of butter (+48 000 
tonnes) and cheese (+300 000 tonnes), and to lower production of butter and skimmed milk 
powder (SMP). 
It is also assumed to lead to a very substantial reduction of the refund for SMP. This impact 
should make room for a increase in the milk quota by 2 % corresponding to 2,3. Mio. tonnes. 
The increase in milk production would lead to an annual increase in butter and SMP 
production of the order of 116 000 and 214 000 tonnes respectively by the end of the period. 
It is assumed that intervention butter and SMP intervention stocks will be eliminated by 
2001 and 2005 respectively. In a non-reform scenario the intervention stocks of SMP would 
have been expected to reach 200 000 tonnes by 2006. 
Priées and direct aids 
The reduction in the support level will lead to correspondingly lower prices for export 
refunds and internal aids. The substantial reduction of the difference between the internal 
price and the external price for protein will lead to increased exports of cheese and possibly 
also SMP without export refunds. 
For the calculations a world market price of 1600$ =1390 ECU/t has been forecasted for 
butter, and of 1950$ = 1700 ECU/t for SMP. To the extent that the development in SMP 
prices is more favourable which allows for the export refund for SMP to be eliminated, the 
reduction in SMP intervention stocks may be accelerated. 
It is assumed that the aid for internal disposal measures of butter and SMP etc. will be 
reduced by amounts corresponding to the price reduction. 
AM 
Budgetary impact 
The introduction of direct aids for dairy cows leads to higher budget costs. By 2006, total 
cost of the milk chapter is estimated at 4 550 Mio. ECU. 
The reform of the dairy sector is estimated to have a total budgetary impact of +1 900 Mio. 
in 2006. 
Impact on other chapters 
The reduction in the dairy prices will have a financial impact on chapter 25 (POSEI) -8 Mio. 
ECU in 2006, chapter 30 (export refunds for non-Annex II products) -69 Mio. ECU, and 
chapter 31 (food programmes) -37 Mio. ECU. 
The reduction in expenditure for chapter 30 should make it possible to overcome the 
difficulties in respecting the WTO financial ceiling for incorporated products. 
Ai ' 
BEEF AND VEAL 
Proposals 
It is proposed to reduce institutional prices by 30% over three years as from July 2000, 
accompanied by a gradual increase in the premiums for suckler cows, bulls, and steers and 
the gradual introduction of a "meat" premium for dairy cows within redefined individual or 
regional ceilings. The theoretical global premiums are 310 ECU/head for bulls paid once in 
their lifetime, 232 ECU for steers paid twice in their lifetime, 215 ECU/head for suckler 
cows per year and 70 ECU/head per year for dairy cows. 
The basic premiums will be (2002 level) 180 ECU for suckler cows, 220 ECU for bulls, 170 
ECU for steers, and 35 ECU for dairy cows. 
These basic amounts correspond to the pre-reform level of the aid plus 50% of the increase 
in the total premium. The remaining 50% of the increase is distributed to Member States 
according to their share in production, in order for Member States to distribute these 
amounts within certain limits and according to common rules. 
It is proposed to fix the sum of the individual quotas for suckler cows for 2000 onwards at 
the level of 1995 or 1996 payments + 3%, leading to an estimated total of 10,285 Mio. head 
(exc. the special ceilings for the French Overseas Departments and the Portuguese 
extensification programme). 
For male animals it is proposed to maintain the 1997 - 1998 ceilings increased by 57 000 
heads for Spain and Portugal (from 1997), leading to a total of 9,095 Mio. heads from 2000 
(exc. the special ceilings for the French Overseas Departments and the Portuguese 
extensification programme). 
The additional premiums for suckler cows which are at present co-financed by the EAGGF 
in certain regions (Objective 1 and Belgium) will be abolished (-90 Mio. ECU)/year). The 
calf processing scheme will also be eliminated. 
The criteria for receiving the extensification premium will be strengthened, followed by an 
increase in the premium for extensive animals to 100 ECU/head. The proposed increase is 
expected to be budgetarily neutral as fewer animals will qualify for the premium. 
It is also proposed to abolish public intervention as from 1 July 2002, and to replace it by 
private storage. 
Quantitative impact 
The price reduction is assumed gradually to lead to an increase in consumption of 200 000 
tonnes annually, as well as to exports to new markets without refunds of a quantity 
progressively rising to 200 000 tonnes per year. Intervention stocks are thereby expected to 
be eliminated by 2006, compared to the building of stocks reaching 1,6 Mio. tonnes in 2006 
if the status quo were to be maintained. 
£0Q 
Prices 
Aid levels for export refunds are assumed to be reduced by an amount corresponding to the 
price reduction. For the calculation of export refunds a theoretical world market price of 
1800 ECU/t has been used. 
The intervention price will be abolished from 2002 when intervention is replaced by private 
storage. 
Budgetary impact 
The global beef budget is expected to rise to 7 930 Mio. ECU, corresponding to an increase 
of+1 990 Mio. ECU compared to a continuation of the present regime. 
The increase is due to the payment of direct aids rather than export refunds and intervention 
storage. 
Impact on other chapters 
The reduction in beef prices will have a financial impact on chapter 25 (POSEI) of-19 Mio. 
ECU and on chapter 31 (food aid programmes) of -27 Mio. ECU. 
RURAL DEVELOPMENT 
Rural development measures concern: 
- Support for structural adjustment of the farming sector (investment in agricultural; 
holdings, establishment of young farmers, training, early retirement); 
- Support for farming in less favoured areas (compensatory allowances); 
- Payments for agri-environmental activities; 
- Support for investment in processing and marketing facilities; 
- Support for forestry; 
- Measures for promoting diversification and adaptation of rural areas. 
These different measures incorporate most of the current legislation with some important 
elements of simplification: 
Only basic eligibility criteria are laid down in the Council regulation. This will allow for 
greater flexibility and subsidiarity. Details will be inserted in the programmes approved 
by the Commission; 
Support in Less Favoured Areas is modified in order to integrate environmental goals 
and to promote low-input farming systems: it will be fixed on a per hectare basis. 
The Guarantee Section of EAGGF will finance: 
- The 1992 accompanying measures (agri-environment, afforestation, early retirement) and 
the Less Favoured Areas support scheme throughout the Union; 
- The remaining rural development measures in all areas outside Objective 1. 
lo I 
Moreover the Guarantee Section of EAGGF will also finance: 
"the accompanying measures for the restructuration of the fishing fleets" in the Objective 2 
areas which are not part of the programming of the Objective 2, and all structural fishery 
measures outside Objective 1 and 2 areas. 
Maximum amounts have been increased for the single premium for the establishment of 
young farmers (25 000 ECU), for early retirement support for transferors (15 000 ECU per 
year). The minimum aid for compensatory allowances in less favoured areas has been raised 
to 40 ECU per hectare in order to avoid ineffective payments. Moreover the average amount 
granted cannot exceed a maximum of 200 ECU per hectare. Maximum annual amounts for 
agri-environmental measures have been simplified by keeping only three categories: annual 
crops (600 ECU/ha), perennial crops (900 ECU/ha) and other land uses (300 ECU/ha). 
Modification of maximum amounts are not expected to lead directly to any increase of 
expenditure, on the one hand because most Member States do not reach these ceilings, and 
on the other because the overall budget allocations to Member States for rural development 
measures will be determined by the Commission. Rural development Programmes and any 
modifications to them will also be approved by the Commission. 
The ceiling for fishery structural measures in Objective 2 is 45 Mio ECU per year and 80 
Mio ECU per year outside Objective 1 and 2. 
The 1992 accompanying measures (agri-environment, afforestation, early retirement) are 
already financed by the Guarantee Section of the EAGGF, and a yearly amount of 2 800 Mio 
ECU has been foreseen for the period 2000-2006. 
The estimates for the other rural development measures have been made on the basis of the 
amounts made available during the programming period 1994-99 outside Objective 1 areas 
and for the LFA scheme in Objective 1 areas. 
For the new rural development measures the financial assessment corresponds to the 
figures included in AGENDA 2000. The initial amount will be 1 900 Mio ECU in 2000 
to which it should be added 45 mio ECU for fishery measures in Objective 2 areas not 
foreseen by AGENDA 2000. 
&>5 
PART A: SYNTHESIS ON THE FINANCIAL COST AFTER 
THE REFORM 
ia*/ 
ESTIMATE OF GLOBAL EXPENDITURE EAGGF 
2000-2006 (AFTER REFORM) 
2000 2001 2002 2003 2004 2005 2006 
EAGGF expenditure Mio. ECU 
B1-10 arable crops 
B1-11 sugar 
B1-12 olive oil 
B1-13 dried fodder 
B1-14 textiles 
B1-15 fruit and vegetables 
B1-16 wine 
B1-17 tobacco 
B1-18 other vegetable sectors 
B1-20 milk and dairy products 
B1-21 beef and veal 
B1 -22 sheep and goatmeat 
B1-23 pigmeat 
B1-24 eggs and poultry 
B1-25 other actions for animal products 
B1-26 fishery products . 
B1-30 restitutions non- annex II 
B1-31 food programmes 
B1-36 control actions 
B1-37 clearance of accounts 
B1-38 promotion 
total 
B1-50 accompanying measures 
total 
impact of ceiling on individual payments 16.850 
1.760 
2.340 
390 
850 
1.940 
800 
1.020 
430 
2.780 
4.700 
1.940 
190 
100 
130 
50 
475 
380 
50 
100 
37.275 
2.800 
40.075 19.120 
1.760 
2.340 
390 
850 
1.930 
800 
1.020 
420 
3.180 
5.730 
1.940 
40 
0 
120 
70 
340 
350 
50 
100 
40.550 
2.800 
43.350 19.170 
1.760 
2.340 
390 
850 
1.910 
800 
1.020 
420 
3.630 
7.120 
1.940 
40 
0 
110 
70 
330 
330 
50 
100 
42.380 
2.800 
45.180 19.220 
1.760 
2.340 
390 
850 
1.910 
800 
1.020 
420 
4.060 
8.230 
1.940 
40 
0 
,110 
70 
310 
310 
50 
100 
43.930 
2.800 
46.730 19.250 
1.760 
2.340 
390 
850 
1.910 
800 
1.020 
420 
4.500 
7.960 
1.940 
40 
0 
100 
70 
290 
300 
50 
100 
44.090 
2.800 
46.890 19.260 
1.760 
2.340 
390 
850 
1.890 
800 
1.020 
420 
4.520 
7.900 
1.940 
40 
0 
100 
70 
290 
300 
50 
100 
44.040 
2.800 
46.840 19.250 
1.760 
2.340 
390 
850 
1.890 
800 
1.020 
420 
4.550 
7.930 
1.940 
40 
0 
100 
40 
290 
300 
50 
100 
44.060 
2.800 
46.860 
-250 -325 -400 -400 -400 -400 
total "existing" CAP 
New measures to be financed under EAGGF Guarantee 
Veterinary measures B2-510 
Structural measures 
compensatory payments, less favoured areas 
measures "type 5a" outside objective 1 
of which fisheries 
measures "type 5b" outside objective 1 
total 
Enlargement 
pre-accession aid 40.075 43.100 44.855 46.330 46.490 46.440 46.460 
100 
1.945 
530 100 
1.990 
540 100 100 100 100 
2.030 
550 2.070 
560 2.110 
570 2.150 
590 100 
750 
645 
125 
550 770 
660 
130 
560 790 
670 
130 
570 810 
680 
130 
580 830 
690 
140 
590 850 
700 
140 
600 870 
710 
140 
610 
2.190 
600 
GENERAL TOTAL EU-15 
UPDATED GUIDELINE EU-15 
MARGIN EU-15 42.650 
46.940 
4.290 45.730 
48.750 
3.020 47.535 
50.630 
3.095 49.060 
52.600 
3.540 49.270 
54.650 
5.380 49.280 
56.790 
7.510 49.350 
59.020 
9.670 
Enlargement 
CAP market measures 
rural and accompanying measures 
total EU-6 1.100 
600 
1.700 1.200 
1.000 
2.200 1.200 
1.500 
2.700 1.300 
2.000 
3.300 1.400 
2.500 
3.900 
GENERAL TOTAL EU-21 
UPDATED GUIDELINE EU-21 
MARGIN EU-21 49.235 
50.940 
1.705 51.260 
52.990 
1.730 51.970 
55.120 
3.150 52.580 
57.350 
4.770 53.250 
59.680 
6.430 
PART B: SYNTHESIS ON THE FINANCIAL COST 
WITHOUT THE REFORM 
ESTIMATE OF GLOBAL EXPENDITURE EAGGF 
2000-2006 (STATUS QUO) 
2000 2001 2002 2003 2004 2005 2006 
B1-10 arable crops 
B1-11 sugar 
B1-12 olive oil 
B1-13 dried fodder 
B1-14 textiles 
B1-15 fruit and vegetables 
B1-16wine 
B1-17 tobacco 
B1-18 other vegetable sectors 
B1-20 milk and dairy products 
B1-21 beef and veal 
B1-22 sheep and goatmeat 
B1-23pigmeat 
B1-24 eggs and poultry 
B1-25 other actions for animal products 
B1-26 fishery products 
B1-30 restitutions non- annex II 
B1-31 food programmes 
B1-36 control actions 
B1-37 clearance of accounts 
B1-38 promotion 
total 
B1-50 accompanying measures 
total 17.940 
1.760 
2.340 
390 
850 
1.940 
800 
1.020 
430 
2.780 
4.700 
1.940 
190 
100 
130 
50 
475 
380 
50 
100 
38.365 
2.620 
40.985 18.070 
1.760 
2.340 
390 
850 
1.930 
800 
1.020 
430 
2.770 
4.930 
1.940 
190 
100-
130 
70 
415 
380 
50 
100 
38.665 
2.620 
41.285 18.240 
1.760 
2.340 
390 
850 
1.910 
800 
1.020 
430 
2.770 
5.780 
1.940 
190 
100 
130 
70 
415 
380 
50 
100 
39.665 
2.620 
42.285 18.450 
1.760 
2.340 
390 
850 
1.910 
800 
1.020 
430 
2.740 
6.480 
1.940 
190 
100 
130 
70 
415 
380 
50 
100 
40.545 
2.620 
43.165 18.690 
1.760 
2.340 
390 
850 
1.910 
800 
1.020 
430 
2.710 
6.130 
1.940 
190 
100 
130 
70 
415 
380 
50 
100 
40.405 
2.620 
43.025 18.960 
1.760 
2.340 
390 
850 
1.890 
800 
1.020 
430 
2.680 
5.940 
1.940 
190 
100 
130 
70 
415 
380 
50 
100 
40.435 
2.620 
43.055 19.280 
1.760 
2.340 
390 
850 
1.890 
800 
1.020 
430 
2.650 
5.940 
1.940 
190 
100 
130 
40 
415 
380 
50 
100 
40.695 
2.620 
43.315 
total "existing" CAP 40.985 41.285 42.285 43.165 43.025 43.055 43.315 
UPDATED GUIDELINE EU-15 
MARGIN 46.940 48.750 50.630 52.600 54.650 56.790 59.020 
5.955 7.465 8.345 9.435 11.625 13.735 15.705 
M 
PART C: SYNTHESIS ON THE FINANCIAL IMPACT OF 
THE REFORM 
FINANCIAL IMPACT OF THE REFORM 
2000-2006 
2000 2001 2002 2003 2004 2005 2006 
B1-10 arable crops 
B1-11 sugar 
B1-12 olive oil 
B1-13 dried fodder 
B1 -14 textiles 
B1-15 fruit and vegetables 
B1 -16 wine 
B1-17 tobacco 
B1-18 other vegetable sectors 
B1-20 milk and dairy products 
B1-21 beef and veal 
B1-22 sheep and goatmeat 
B1-23pigmeat 
B1-24 eggs and poultry 
B1-25 other actions for animal products 
B1-26 fishery products 
B1-30 restitutions non- annex II 
B1-31 food programmes 
B1-36 control actions 
B1-37 clearance of accounts 
B1-38 promotion 
total 
B1-50 accompanying measures 
total 
impact of ceiling on individual payments 1.090 
0 
0 
0 
0 
0 
0 
0 
0 
0 
0 
0 
0 
0 
0 
0 
0 
0 
0 
0 
0 
1.090 
180 
-910 1.050 
0 
0 
0 
0 
0 
0 
0 
-10 
410 
800 
0 
-150 
-100 
-10 
0 
-75 
-30 
0 
0 
0 
1.885 
180 
2.065 930 
0 
0 
0 
0 
0 
0 
0 
-10 
860 
1.340 
0 
-150 
-100 
-20 
0 
-85 
-50 
0 
0 
0 
2.715 
180 
2.895 770 
0 
0 
0 
0 
0 
0 
0 
-10 
1.320 
1.750 
0 
-150 
-100 
-20 
0 
-105 
-70 
0 
0 
0 
3.385 
180 
3.565 560 
0 
0 
0 
0 
0 
0 
0 
-10 
1.790 
1.830 
0 
-150 
-100 
-30 
0 
-125 
-80 
0 
0 
0 
3.685 
180 
3.865 300 
0 
0 
0 
0 
0 
0 
0 
-10 
1.840 
1.960 
0 
-150 
-100 
-30 
0 
-125 
-80 
0 
0 
0 
3.605 
180 
3.785 -30 
0 
0 
0 
0 
0 
0 
0 
-10 
1.900 
1.990 
0 
-150 
-100 
-30 
0 
-125 
-80 
0 
0 
0 
3.365 
180 
3.545 
-250 -325 -400 -400 -400 -400 
total "existing" CAP 
New measures to be financed under EAGGF Guarantee 
Veterinary measures B2-510 
Structural measure 
compensatory payments, less favoured areas 
measures "type 5a" outside objective 1 
of which fisheries 
measures "type 5b" outside objective 1 
total 
Enlargement 
pre-accession aid 
GENERAL TOTAL EU-15 
Enlargement 
CAP market measures 
rural and accompanying measures 
total 
GENERAL TOTAL EU-21 -910 
100 
1.945 1.815 
100 
1.990 2.570 
100 3.165 
100 3.465 
100 
2.030 2.070 2.110 3.385 
100 
2.150 3.145 
100 
750 
645 
125 
550 770 
660 
130 
560 790 
670 
130 
570 810 
680 
130 
580 830 
690 
140 
590 850 
700 
140 
600 870 
710 
140 
610 
2.190 
530 
1.665 540 
4.445 550 
5.250 560 
5.895 570 
6.245 590 
6.225 600 
6.035 
1.100 
600 
1.700 
6.950 ' 1.200 
1.000 
2.200 
8.095 1.200 
1.500 
2.700 
8.945 1.300 
2.000 
3.300 
9.525 1.400 
2.500 
3.900 
9.935 
2o9 

ISSN 0254-1475 
COM(98) 158 final 
DOCUMENTS 
EN 03 01 06 10 
Catalogue number : CB-CO-98-181-EN-C 
ISBN 92-78-32378-0 
Office for Official Publications of the European Communities 
L-2985 Luxembourg