Proposal for a COUNCIL REGULATION (EEC) amending Regulation (EEC) No 2990/82 on the sale of butter at reduced prices to persons receiving social assistance
Date: 1992-11-20
Institutions: European Commission
Subjects: aid to disadvantaged groups, butter, discount sale

COMMISSION  OF  THE  EUROPEAN  COMMUNITIES 

C0M(92) 478 final 

Brussels, 20 November  1992 

REPORT  FROM THE COMMISSION  TO THE COUNCIL 

concerning 

application  of  Council  Regulation  2990/82 
concerning  the  sale  of  butter  at  reduced 
prices  to  persons  receiving  social  assistance 

Proposal  for a 

COUNCIL  REGULATION  (EEC) 

amending Regulation  (EEC) No 2990/82 on the sale of butter at reduced prices 
to persons receiving social assistance 

(presented  by  the  Commission) 

1.  Background 

The  market  situation  for  milk  in  general  and  for  butter  in  particular  has 
in  the  past  required  a whole  range  of  disposal  measures  notably  for 
butter  in  order  to  increase  the  internal  and  external  sales  and 
consequently  diminish  the  purchases  into  public  intervention  storage. 
The  scheme  allowing  for  sale  of  butter  to  persons  receiving  social 
assistance  has  been  in  operation  since  197 8  and  Article  3a  of  Council 
Regulation  2990/82,  last  modified  by  Regulation  3917/90,  requires  that 
the  Council,  on  the  basis  of  a report  from  the  Commission  before 
31.12.1992,  decides  whether  the  subsidized  sales  under  above  mentioned 
regulation  is  to  be  continued. 
Two  reports  have  been  forwarded  to  the 
council,  one  in  December  1988  and  one  in  October  1990  resulting  in 
continuation  of  the  scheme  for  two  consecutive  year  periods  ending 
31.12.1992. 
Up  until  now  the  Regulation  has  only  been  applied  in 
Ireland,  and  national  legislation  opening  possibilities  for  such  sales 
in  Belgium  as  well,  was  introduced  in  the  beginning  of  19 88  but  the 
scheme  has  not  been  applied  in  practise.  The  following  therefore  refers 
to  Ireland  only. 

2.  Criteria  for  the  determination  of  entitlement 

Persons  entitled  to  benefit  from  the  scheme  are  those  in  receipt  of 
social  assistance  under  any  of  the  following  categories  which  provide  for 
social  assistance  payments  : 

Old  Age  Pensions  Acts,  1908  to  1978 
Unemployment  Assistance  Acts,  1933  to  1978 
Widows'  and  Orphans'  Pension  Acts,  1935  to  1978 
Deserted  Wife's  Allowance  under  the  Social  Welfare  Act,  1970 
Social  Assistance  Allowance  for  Unmarried  Mothers  Social  Welfare 
Act,  1973 
Prisoner's  Wife's  Allowance  under  the  Social  Welfare  Act  1974 
Single  Woman's  Allowance  under  the  Social  Welfare  Act  1974 
Social  Welfare  (Supplementary  Welfare  Allowance)  Act  1975 
Disabled  Persons  (Maintainance)  Allowances  payable  under 
Regulations  made  in  pursuance  of  Section  69  of  the  Health  Act 
1970 
under 
Infectious 
Regulations  made  in  pursuance  of  Section  44  of  the  Health  Act, 
1947 

(Maintenance) 

Allowance 

Diseases 

payable 

Procedure  for  implementation  and  control  of  the  scheme 

A  system  of  vouchers  entitling  two  pounds  of  butter  per  month  to  be 
purchased  at  the  normal  retail  price,  less  the  amount  of  the  subsidy,  are 
supplied  to  those  persons  determined  under  the  criteria  set  out  at  point 
2  above  by  the  competent  authority.  Vouchers  are  also  supplied  for  each 
qualified  dependent  of  the  social  assistance  recipient.  Vouchers  are 
valid  for  the  month  they  are  issued  and  the  following  two  months. 

In  1990  the  system  of  control  was  improved  and  involves  checks  oi  water 
marked  and  security  printed  vouchers,  numbers,  amounts,  quantities  and 
eligibility  of  the  numbered  vouchers.  These  checks  will,  together  with 
declarations  from  the  retailers  selling  the  butter  and  on  the  spot  checks 
carried  out  by  the  competent  authorities,  ensure  that  the  scheme  is  not 
abused. 

Developments  in  the  butter  and  yellowfat  market  in  Ireland 

In  accordance  with  Article  4(3)  of  Regulation  (EEC)  n°  1898/87  the  Member 
States  shall  forward  to  the  commission  information  concerning  the 
developments  on  the  butter  and  yellow  fat  market. 

The  information  received  from  the  Irish  authorities  concerning 
developments  in market  shares  of  butter,  low-fat  butter,  margarine  and 
fat  mixtures  shows  the  following  development  between  19 87  and  199 0. 

Butte r 

Low-fat  butter 

Margarine 

Fat 
Mixture 

!S 

tonnes  (%) 

tonnes (%) 

tonnes 

(%) 

tonnes 

(%) 

1987  20,500  (42%) 
1988  16,325  (33%) 
1989  13,235  (27.5%) 
1990  12,000  (25.3%) 

2,000  (4%) 
2,750  (6%) 
1,860  (4%) 
1,575  (3,3%) 

14,900 
14,200 
15,700 
15,100 

(31%) 
(31%) 
(32.5%) 
(31.8%) 

11,000 
15,000 
17,500 
18,825 

(23%) 
(30%) 
(36%) 
(39.6%) 

It  is  noted  that  the  total  yellow  fat  market  between  1987  and  1990  shows  a 
decline  of  1,9%  while  the  fat  mixtures  have  taken  a  continuance  higher 
market  share  compared  to  that  of  butter  while  the  market  share  of 
margarine  has  been  stable.  The  fat  mixtures  generally  contain  butter  or 
cream  and  vegetable  fat  and  have  been  principally  marketed  on  the  basis  of 
improved  spreadability  vis-à-vis  butter.  The  introduction  of  reduced  and 
low-fat  butters,  which  incorporate  additional  milk  protein  and  moisture  to 
reduce  the  overall  fat  has  also  led  to  a  reduction  of  the  market  share  of 
full  fat  butter. 

5.  Developments  of  sales,  financial  costs  and  number  of  beneficiaries 

Ireland  has  operated  the  aid  scheme  as  provided  for  in  the  above  mentioned 
Regulation  since  1978  and  the  scheme  has  especially  during  the  last  years 
accounted  for  important  shares  of  the  declining  internal  Irish  butter 
In  1991  the  purchase  of  around  6.182  tonnes  of  butter  was 
consumption. 
aided  under  the  scheme  and  the  estimated  purchases  for  1992  are  7.246t. 
In  1990  the  purchases 
amounted  to  50%  of  the  total  Irish  butter 
consumption  but  accounted  for  less  than  5%  of  the  production  and  it  is 
also  expected  that  the  purchases  in  1992  will  account  for  more  than  50% of 
the  consumption  and  less  than  5%  of  the  production. 
The  maximum  aid 
reimbursed  by  EAGGF  amounts  at  present  to  149.74  ECU/100kg  and  the  total 
financial  costs  for  EAGGF  in  1991  amounted  to  9.3S  mio  ECU.  The 
expenditure  for  1992  is  estimate  at  10,87  mio  ECU. 

The  development  in  purchases,  financial  EAGGF  costs  and  number  of 
beneficiaries  since  1978  is  indicated  below  : 

Purchases 
(in  tonnes) 

Financial  Costs 
(MECU) 

Beneficiaries 

1978 
1979 
1980 
1981 
1982 
1983 
1984 
1985 
1986 
1987 
1988 
1989 
1990 
1991* 
1992* 
Jan-June* 
year* 

66 
3.704 
3.958 
3.825 
4.080 
4.892 
4.122 
5.785 
5.189 
5.651 
6.178 
6.567 
6.182 
6.260 

3.623 
7.246 

*  =  Provisional 

0.05 
2.96 
3.17 
3.06 
3.26 
3.91 
3.30 
4.63 
4.15 
10.06 
11.00 
9.85 
8.40 
9.39 

n.a. 
n.a. 
419.000 
431.000 
543.000 
569.000 
617.000 
650.000 
642.000 
720.000 
720.000 
720.000 
720.000 
740.000 

10.87 

740.000 

5. Conclusions  and  recommendations 

The  application  of  Council  Regulation  2990/82  in  Ireland  has  continued  to 
be  a  successful  means  in  maintaining  sales  to  the  social  assistance 
categories  indicated  under  point  2  who  in  the  normal  course  of  events 
would  for  economic  reasons  be  in  the  forefront  of  change  to  cheaper 
substitutes. 

of  butter,  the 
With  a  continued  decline  in  the  normal  consumption 
importance  of  the  scheme  will  be  even  greater  in  future  for  the  milk 
The  Community 
sector  in  general  and  the  butter  sector  in  particular. 
financial  costs  are  considered  limited  notably  compared 
with  costs 
relating  to  alternative  purchase  into  public  intervention,  which,  in  1990 
and  1991,  has  been  the  outlet  for  a  very  important  part  of  the  Irish 
butter  production. 

A  withdrawal  of  this  long  standing  benefit  from  the  less  well  off  sectors 
of  society  e.g.  unemployed  persons,  old  age  pensioners,  etc.  could  hardly 
be  defended  from  a  social,  market  or  economic  point  of  view,  as  well  as 
the  favourable  public  perception  of  a  Community  scheme  promoting  butter 
sales  should  not  be  neglected. 

The  Commission  therefore  proposes  a  continuation  of  the  scheme  for  an 
additional  two  years  ending  31  December  1994.  However,  in  view  of  the 
reductions  in  intervention  prices  for  butter  already  agreed  by  the  Council 
for  the  next  two  milk  marketing  years  and  the  expected  resulting  declines 
in  market  prices  for  butter  in  Ireland,  the  aid  levels  are  proposed 
reduced  by  almost  10 ECU/100kg  to  140  ECU/100kg  as  from  1.1.1993. 

COUNCIL REGULATION  (EEC) No 

Of 

amending Regulation  (EEC) No 2990/82 on the sale of butter at reduced prices 
to persons receiving social assistance 

THE COUNCIL OF THE EUROPEAN COMMUNITIES, 

Having regard to the Treaty establishing the European Economic  Community, 

Having regard to council Regulation  (EEC) No 804/68 of 27 June  1968 on the common 

organization  *&£ the market in milk and milk products^*), as last amended by 
Regulation  (EEC) Ho 2071/92(2) and in particular Article  12(2) thereof, 

Having regard to the proposal from the Commission, 

Whereas Council Regulation  (EEC) No 2990/82^), as last amended by Regulation 

(EEC) No 3917/90(4), introduces arrangements, expiring on 31 December  1992, for 

the sale of butter at reduced prices to persons receiving  social assistance; 

whereas, as provided for in Article 3a(3) of that Regulation, the Council is to 

examine before that date and on the basis of a report from the Commission the 

possibility of renewing the arrangements laid down; whereas, as a result of the 

report submitted by the Commission and the results obtained, the abovementioned 

arrangements should be extended for a period of two years; whereas, in view on 

the one hand of experience gained and on the other hand of the situation on the 

market for butter, the aid should be reduced, 

HAS ADOPTED THIS REGULATION: 

(1) OJ NoL 148, 28.6.1968, p. 13. 
(2) OJ No L 215, 30.7.1992, p. 64. 
(3) OJ No L 314, 10.11.1982, p. 26. 
(4) OJ No L 375, 31.12.1990, p. 12. 

Regulation  (EEC) No 2990/82 is hereby amended as follows: 

Article 1 

1.  In Article  1, "31 December  1992" is replaced by  "31 December  1994"; 

2.  In Article  3, "149,74 ECU" is replaced by "140 ECV"; 

3.  In Article  3a(3),  "31 December  1992" is replaced by  "31 December  iff4". 

Article 2 

This Regulation  shall enter  into force on  thm  third day following  its publication 

in the Official Journal of the European  Communities. 

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

Member states. 

Done at Brussels, 

For the Council 

F i n a n c i al  S t a t e m e nt 

Date : 

1. BUDGET  HEADING  : B-1 2049 

APPROPRIATIONS  :  ECU  17 million  (PDB  1993) 

2. TITLE : 

Proposal  for a Council  Regulation amending  (Regulation  (EEC) No 2990/82 on the sale of butter 
at  reduced prices to persons  receiving  social  assistance 

3. LEGAL  BASIS  :  Article  12(2) of Regulation  (EEC) No 804/68 

4. AIMS 

Continuation of the scheme  involving  the sale of butter  at  reduced prices  to persons  receiving 
social  assistance at a lower  rate of aid 

5. FINANCIAL  IMPLICATIONS 

PERIOD OF  12 MONTHS 

CURRENT  FINANCIAL  YEAR 

(1992) 

FOLLOWING  FINANCIAL  YEAR 
ii°.?32 

+ ECU  16.2 mil lion 

•  ECU  10.1 mi 11 ion 

5.0 EXPENDITURE 

- CHARGED  TO THE EC BUDGET 
(REFUNDS/INTERVENT IONS) 

- NATIONAL  AUTHORITIES 

- OTHER 

5.1 REVENUE 

- OWN  RESOURCES OF  THE EC 
(LEVIES/CUSTOMS  DUTIES) 

- NATIONAL 

1994 

1995 

1996 

1997 

5.0.1  ESTIMATED  EXPENDITURE 
5.1.1  ESTIMATED  REVENUE 

5.2 METHOD OF CALCULATION 

+ ECU  16.2 mi 11 

+ ECU 6.1 mill 

12 months: 
1993 

10 000 t x 1 400 ECU/t  x 1.157  (DR) 
10 000 t x 1 400 ECU/t  x 7.5/12  x 1.157  (DR) = 

+ ECU  16.2 million  (B) 
•  ECU  10.1 million  (B) 

6.0 CAN  THE PROJECT BE  FINANCED  FROM APPROPRIATIONS ENTERED  IN THE RELEVANT  CHAPTER  OF  THE CURRENT  BUDGET ? 

6.1  CAN  THE PROJECT  BE FINANCED  BY TRANSFER  BETWEEN  CHAPTERS OF  THE CURRENT  BUDGET ? 

6.2 WILL A SUPPLEMENTARY  BUDGET BE NECESSARY ? 

6.3 WILL  FUTURE BUDGET APPROPRIATIONS BE NECESSARY ? 

YES 

YES 

COMMENTS : 

The PDB for  1993 has already been drawn up on the assumption  that  the scheme will  be extended  beyond 
31.12.1992 for 10 000 tonnes with  a reduced rate of aid to take account  of  the cut  in the butter 
intervention price for 1993/94. 

ISSN  0254-•4" 

COM(92)  478 final 

DOCUMENTS 

EN 

05  03 

Catalogue  numher : CB-CO-u2-503-EN-( 

ISBN 92-77-49345-

ivx  for  OfnciiiJ  Publications  of  the  Europe^:  '...  :::niuiiiries 
v:  Luxembourg