Proposal for a COUNCIL REGULATION (EC) amending Regulation (EEC) No 2990/82 on the sale of butter at reduced prices to persons receiving social assistance
Date: 1994-11-03
Institutions: European Commission
Subjects: aid to disadvantaged groups, butter, discount sale

iffi 

COMMISSION  OF  THE  EUROPEAN  COMMUNITIES 

COM(94)  472  final 
Brussels,  03.11.1994 

REPORT  FROM  THE  COMMISSION  TO  THE  COUNCIL 

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

Proposal  for  a 
COUNCIL  REGULATION  (EC) 
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 

-• 

1 

-

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  1978  and  Article  3a  of  council 
Regulation 
(EEC)  No  2990/82,  last  modified  by  Regulation  (EEC) 
No  3654/92, requires  that  the  Council, on  the  basis  of  a report  from  the 
Commission  before  31.12.1994, decides  whether  the  subsidized  sales  under 
above  mentioned  regulation  is  to  be  continued.  Reports  previously 
forwarded  to the  Council, have  on  3 occasions  resulted  in continuation  of 
the  scheme  for  consecutive  two  year  periods  ending  31.12.1994. Up  until 
now  the  Regulation  has  only  been  applied  in  Ireland,  and.the  following 
therefore  refers  to this Member  state. 

2.  criteria  for the determination  of  entitlement 

Persons  entitled  to  benefit  from  the  scheme  are  those  in  receipt  of 
social  assistance  payements  as  defined  in  Part  III,  Section  118  of  the 
Social  Consolidation  Act  1993. This  covers  the  following  schemes  operated 
by  the  Irish  Department  of  Social Welfare  and  Department  for  health  : 

old Age  Pensions 
Unemployment  Assistance 
Widows'  and  Orphans'  Pension 
Deserted  Wife's  Allowance 
Social Assistance Allowance  for Unmarried  Mothers 
Prisoner's  Wife's  Allowance 
Carer's  Allowance 
Blind  Pension 
Social Welfare  (Supplementary  Welfare)  Allowance 
Disabled  Persons  (Maintainance) Allowances 
Infectious  Diseases  (Maintenance)  Allowance 
Pre-retirement  allowances, Carer's  allowance, Blind  Pension 

3.  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.  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. 

The  system  of  control  involves  checks  of  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. 

-  2  -

4.  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. 

concerning 
The  information  received 
developments  in  market  shares  of  butter,  low-fat  butter,  margarine  and 
fat mixtures  shows  the  following  development  between  1987  and  1993. 

from  the  Irish  authorities 

Butter 

Low-fat  butter 

Margarine 

Pat 
Mixtures 

Total 

Year 

tonnes 

(%) 

tonnes 

(%) 

tonnes 

r%;  tonnes  r%;  tonnes 

1987  20,500 
1988  16,325 
1989  13,235 
1990  12,000 
1991  11,900 
1992  11,800 
1993  11,700 

(42,4%) 
(33,8%) 
(27.4%) 
(25.3%) 
(24.6%) 
(25.0%) 
(24.8%) 

2,000 
2,750 
1,860 
1,575 
1,575 
1,575 
1,575 

(4,1%) 
(5,7%) 
(3,9%) 
(3,3%) 
(3,3%) 
(3,3%) 
(3,3%) 

14,900 
14,200 
15,700 
15,100 
14,600 
13,900 
13,700 

(30,8%) 
(29,4%) 
(32.5%) 
(31.8%) 
(30,9%) 
(29,5%) 
(29,1%) 

11,000 
15,000 
17,500 
18,825 
19,100 
19,700 
20,000 

(22,7%) 
(31,1%) 
(36,2%) 
(39.6%) 
(40.4%) 
(41.8%) 
(42.5%) 

48,400 
48,275 
48,295 
4  7,500 
48,300 
4 7,  100 
47,  100 

It  is  noted  that  the  total  yellow  fat market  between  1987  and  1993  shows a 
decline  of  1,9%  while  the  fat  mixtures  have  taken  a  continuing  higher 
market  share  compared  to  that  of  butter.  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.  However,  it  is  noted 
that  the  important  yearly  decline  in  the  consumption  of  full  fat  butter 
experienced  in  the  1980*s  is  less  significant  since  1990. 

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 
consumption. 
In  1993  the  purchase  of  around  7.424  tonnes  of  butter  was 
aided  under  the  scheme  and  the  estimated  purchases  for  1994  are  7.500t. 
In  1993  the  purchases  amounted  to more  than  60  % of  the  total  Irish  butter 
consumption  but  accounted  for  less  than  6%  of  the  production  and  it  is 
expected  that  these  percentages  remain  practically  unchanged  in  1994.  The 
maximum  aid  reimbursed  by  EAGGF  amounts  at  present  to  140  ECU/100  kg 
resulting  in  total  estimated  cost  of  10,4  MECU  in  1993  and  10,5  MECU  in 
1994 
without 
consideration. 

coefficient 

adjustment 

monetary 

taking 

into 

the 

-  3  -

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 
1993* 
1994* 

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 
7.331 
7.424 
7.500 

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 
11.00 
10.36 
10.50 

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 
776.000 
834.000 
800.000 

*  =  Provisional 

6. conclusions and  recommendations 

The  application  of  Council  Regulation  (EEC)  No  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) . 

A  reduction  in  consumption  by  these  categories  of  consumers  could  result 
in  sales  of  butter  into  intervention.  Furthermore,  a  withdrawel  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  1996.  Taking  account, however, of 
the  policies  which  the  Council  has  been  following  with  regard  to  the 
intervention  price  for  butter  which  result  in  reduction  in  market  prices, 
it  is proposed  to  reduce  the  aid  level by  25 ECU/100kg  to  115  ECU/100kg  as 
from  1.1.1995. 

H 

Proposal for a 

COtraCn*  REGULATION 

t  EC) 

amending Regulation  (EEC) Bo 2990/82 on the sale of butter 
at reduced prices to persons receiving social assistance 

THE COUNCIL OF THE EUROPEAN UNION, 

Having regard to the Treaty establishing the European Community, 

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

common  organization  of  the  market  in  milk  and  milk  products^*),  as  last 

amended  by  Regulation  (EEC) No  1880/94<2),  and  in  particular  Article  12(2) 

thereof, 

Having regard to the proposal from the Commission, 

Whereas  Council  Regulation  (EEC)  No 2990/82(3),  as  last  amended  by 

Regulation  (EEC)  No 3654/92<4),  introduces  arrangements,  expiring  on 

31 December  1994,  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 No L  148, 28.6.1968, p. 13. 
(2) OJ No L  197, 30.7.1994, p. 21. 
(3) OJ No L 314, 10.11.1982, p. 26. 
(4) OJ No L 370, 19.12.1992, p. 1. 

5 

Article 1 

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

1.  In Article  1, "31 December  1994" is replaced by "31 December  1996". 

2.  In Article 3, "140 ECU" is replaced by "ECU 115". 

3.  In Article  3a(3), "31 December  1994" is replaced by  "31 December  1996". 

Article 2 

This  Regulation  shall  enter  into  force  on  the  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 

- 2 -

F I N A N C I AL 

STATEMENT 

1.  BUDGET  HEADING:  Chapter  Bl-2049 

APPROPRIATIONS:  ECU  15  million 

(199S  APB) 

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  OF  PROJECT: 

To  extend  the  arrangements  for  selling  butter  at  reduced  prices  to  persons  receiving  social  assistance,  at 

a  reduced  rate  of  aid 

5.  FINANCIAL  IMPLICATIONS 

PERIOD  OF  12  MONTHS 

CURRENT  FINANCIAL 

FOLLOWING  FINANCIAL 

YEAR 

(1994) 

YEAR 

(1995) 

S.O.  EXPENDITURE 

-  CHARGED  TO  THE  EC  BUDGET 

(REFUNDS/INTERVENTIONS) 

+ECU  13.9  million 

+ECU  8.7  million 

S.0.1.  ESTIMATED  EXPENDITURE 

+ECU  13.9  million 

+ECU  5.2  million 

1996 

1997 

1998 

5.2.  METHOD  OF  CALCULATION: 

12 months:  10  000  t  x  ECU  1150/t  x  1.207  (DT) 

=  +  ECU  13.9  million  (B) 

1995 

: 10  000  t  x  ECU  1150/t  x  7.5/12  X  1.207  (DT) =  +  ECU  8.7  million  (3) 

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

YES 

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

6.2.  IS  A  SUPPLEMENTARY  BUDGET  NECESSARY? 

6.3.  WILL  FUTURE  BUDGET  APPROPRIATIONS  BE  NECESSARY? 

COMMENTS: 

The  1995  preliminary  draft  Budget  was  established  on  the  assumption  that  the  arrangements  would  be  extended 

beyond  31  December  1994  for  10  000  tonnes  at  a  reduced  rate  of  aid  to  take  account  of  the  reduction  in  the 

intervention  price  for  butter  in  1994. 

ISSN 0254-1475 

COM(94) 472 final 

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