Proposal for a COUNCIL REGULATION (EC) establishing a system of compensation for the additional costs incurred in the marketing of certain fishery products from the Azores, Madeira,the Canary Islands and the French department of Guiana as a result of their very remote location
Date: 1994-11-04
Institutions: European Commission
Subjects: aid recipient, balance of payments assistance, compensatory financing, fishery product, island region, peripheral region

fOSVfVlISSION  OF  THE  EUROPEAN  COMMUNITIES 

C0M(94) 473 final 
Brussels, 04.11.1994 

94/0255  (CNS) 

Proposal  for a 

COUNCIL REGULATION  (EC) 

establishing a system of compensation 

for the additional costs incurred in the marketing 
of certain fishery products from the Azores, Madeira, 
the Canary Islands and the French department of Guiana 
as a result of their very remote location 

(presented  by the Commission) 

«£WV 

* ? 

m 

EXPLANATORY  MEMORANDUM 

The  outermost  regions  of  the  Community  (the  Portuguese  archipelagos  of  the  Azores  and 
Madeira, the Spanish archipelago of the Canary Islands and the French overseas departments of 
Guadeloupe, Guiana,  Martinique and Réunion) suffer  from  structural backwardness justifying 
Community action to promote their economic and social development and their full involvement 
in the operational  framework  of the internal market. 

Against this background,  Council Decisions  89/6867EEC(1),  91/314/EEC® and 91/315/EEC® 
set up programmes of options specific to the remote and insular nature of those regions, creating 
a suitable framework  for the adoption of  measures in those economic sectors  where particular 
attention  must  be  given  to  strengthening  the  Community  support  required  to  alleviate  the 
permanent constraints  which characterize the regions. 

These programmes aim to take account, in the application of Community policies, of the specific 
features and disadvantages  of those regions arising from their remoteness,  island status, small 
size  and  difficult  topography  and climate.  The  economic  and  social  life  of  these  regions  is 
determined thus by their economic dependence on a few products, limited markets and two-fold 
status as  Community  regions  and as territories located among developing countries. 

A symbol of the Community's solidarity with its most remote regions, which is essential if they 
are to be integrated into the internal market, these programmes have been devised as reference 
frameworks  for the application of  Community policies in those regions. 

The joint Declaration  on  the outermost  regions  of  the Community,  annexed to the Treaty on 
European Union, acknowledges that specific  measures must be adopted to enable these regions 
to achieve the average economic and social level of the Community.  The Council has adopted 
a series of programmes  covering a range of economic activities,  including the fisheries  sector 
which plays a particularly  important role in securing the socio-economic development of these 
regions. 

Certain aspects of  the socio-economic  situation of  the regions should be highlighted: 

-a per capita GDP less  than half the Community average; 

-high unemployment in some regions and not inconsiderable  underemployment; 

-a primary sector that is still  heavily dependent on traditional  sectors of production employing 

(,)  OJ No L 399,  30.  12.  1989,  p.  39. 

® OJ No L  171, 29.  6.  1991, p.  5. 

w  OJ No L  171, 29.  6.  1991, p.  10. 

a considerable proportion of the population. The scale and importance of the fishing industry in 
particular are reflected  in the prevalence of family businesses; 

additional supply and transport costs: the lack of nearby regional markets, the small size 
of  local  markets  and  transport  problems  mean that these economies  suffer  permanent 
constraints  in relation  to access  to markets for their products. 

It is precisely  in relation  to this latter situation,  namely the marketing of fishery  products, that 
the  Community  decided  to  take  action  to  assist  producers  in  these  regions.  Since  1992(4>, 
therefore,  a scheme has been in place which has achieved considerable success.  In  1994 it was 
prolonged by Council  Regulation (EC) No  1503/94(5) under which support was made available 
for the marketing of  species  most concerned by marketing  for export. 

Article 5 of the Regulation provides for a reassessment  of the situation so that the Commission 
can make proposals  appropriate to the circumstances  that may arise.  It should be noted in this 
connection that the conditions verified  relating to the marketing of the products covered by the 
Regulation are the same.  Figures  for the additional costs of  marketing  show  no change. 

In  the  Azores  and  Madeira  the  local  canning  industries  account  for  a  volume  of  production 
equivalent  to  almost  50%  of  exports  and  employ  a  significant  proportion  of  the  working 
population. Production is intended primarily for the Portuguese mainland and the Italian market. 
The special characteristics of these regions, created by their small size and geographical location, 
give  rise,  however,  to  additional  production  and  marketing  costs,  which  undermine  their 
competitiveness in relation to that of similar sectors on the mainland of Europe.  The returns on 
canning are therefore well below the Community average. The factors determining this situation 
are to be found  in the industry's  operating conditions: additional transport and financing costs 
arising  from  the immobilization  of inputs  (mainly  salt,  oil and cans); additional energy costs; 
transport  insurance  costs.  The same applies in the case of the tuna and sardine industry  in the 
Canary  Islands  where  additional  costs  are  incurred  in  relation  to  raw  materials,  energy  and 
transport.  In the department of  Guiana the situation  is  the same with,  in addition  to the extra 
costs described  above, particular circumstances  that aggravate operating conditions  (no marine 
credit for financing costs;  the need to create large stocks of  spare parts for  vessels;  the price 
differential  for the purchase of vessels from continental shipyards in the absence of local yards; 
competition  with  exports  from  certain  Central  and South  American  third countries  which are 
eligible for advantageous  terms under Community rules). 

(For  details  of  the  verification  of  the  additional  costs,  see  the  Annex  to  this  explanatory 
memorandum).  The situation  as described  cannot be resolved  in the short term.  The measures 
that have been implemented to date will have to be continued therefore through the adoption of 
a legal  instrument establishing  a stable reference  framework  for the operators  in question. 

(4) OJ No L 248,  28.8.1992,  pp.  73 and 75. 

(5) OJ No L  162,  30.6.1994,  p.  8. 

The purpose of this proposal  is to continue the arrangements  now in place,  which,  we repeat, 
have achieved considerable success. The producers to whom the arrangements apply have, with 
the  help  of  the  Community  system  of  compensation,  been  able  to  overcome  the  constraints 
imposed by the verified additional costs of transporting their products to market on the mainland 
of Europe. 

In  this  respect  the  proposal  aims  solely  to  compensate  for  the  verified  additional  costs  of 
marketing the products in question. Its object, therefore, is to bring the operating conditions into 
line with those on the mainland so that the sector can be integrated into the single market. 

It should be noted that the proposed measures seek to provide market support in order to offset 
a permanent geographical disadvantage and do not therefore have any structural aspect or effect. 
For that reason they are to be financed by the Guarantee Section of the EAGGF and cannot be 
charged to the newly established financial instrument for fisheries guidance (FIFG) which, by 
definition,  is to be used only to finance structural  measures. 

All the above measures concern a sector which is of particular economic and social importance 
for the regions in question and for which there exists virtually no possibility of conversion. The 
measures  will help to improve  the competitiveness of  the sector by compensating  through the 
programmes of specific options in favour of the Community's outermost regions adopted by the 
Council for the handicap isolation  constitutes  for the local fishery products industry  . 

Proposal for a 

Council Regulation (EC) establishing a system of compensation 
for the additional costs incurred in the marketing 
of certain fishery products from the Azores, Madeira, 
the Canary Islands and the French department of Guiana 
as a result of their very remote location 

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(1>, 

Having regard  to the opinion of the European Parliament®, 

Having regard to the opinion of the Economic and Social Committee*3*, 

Having regard  to the current  difficulties  of the European  Union's fisheries sector,  which are 
particularly  aggravated by the cost of transporting fisheries products to markets on account of 
the remoteness and isolation of the outermost regions of the Community; 

Whereas,  by  Decisions  89/687/EEC(4),  91/314/EEC(5>  and  91/315/EEC(6>,  the  Council 
established, as part of the Community's policy in favour of its outermost regions, programmes 
of  options  specific  to  the  remote  and  insular  nature  of  the  French  overseas  departments 
(Poseidom), the Canary Islands (Poseican) and Madeira and the Azores (Poseima) respectively, 
laying  down  the  general  outlines  of  measures  to  be  applied  taking  account  of  the  special 
characteristics  of and constraints on those regions; 

Having regard to the success of similar initiatives which have already been undertaken; 

(l) 

« 

OJ No C 

OJ No C 

°> 

OJ No C 

OJ No L 399, 30.12.1989, p. 39. 

OJNoL171,  29.6.1991, p.  1. 

OJ No L  171, 29.6.1991, p. 10. 

H 

Whereas  those  regions  are  suffering  from  specific  development  problems,  in  particular  the 
additional  costs  incurred  in the marketing  of certain products as a result  of  their remoteness; 
whereas,  in  order  to  maintain  the  competitiveness  of  certain  fishery  products  in  relation  to 
similar products from other Community regions, Community measures have been applied in the 
fisheries  sector  in  1992  and  1993  to  compensate  for  the  additional  costs  incurred  in  the 
processing  of tuna in the Azores and Madeira and the production and freezing of tuna and the 
freezing and processing of sardines in the Canary Islands; that these measures were followed up 
in  1994  by  the  adoption  by  the  Council  of  Regulation  (EC)  No.  ISQWAP;  whereas  the 
continuation of the system of compensation  for the additional costs incurred  in the processing 
and  marketing  of  those products  should  be provided  for  at  Community  level  from  1995 and 
measures  should therefore be adopted providing for the continuation of the existing measures, 

HAS ADOPTED THIS REGULATION: 

Article  \ 

A system of compensation  for the additional costs incurred in the marketing of certain  fishery 
products from the Azores,  Madeira,  the Canary Islands and the French  department of Guiana 
as a result of their remoteness is hereby established. 

Article 2 

1. 

2. 

3. 

For  the  Azores  and  Madeira,  the  system  referred  to  in  Article  1 shall  consist  of  the 
payment of  ECU  155 per tonne up to  a maximum  of  15 000 tonnes  of  tuna per year 
delivered to local industry (10 000 tonnes for the Azores and 5 000 tonnes for Madeira). 

For the Canary Islands,  the system referred  to in Article  1 shall consist of the payment 
of  ECU  125  per  tonne,  up  to  a  maximum  of  10 400 tonnes  per  year,  of  tuna  for 
marketing fresh, ECU 45 per tonne, up to a maximum of 3 500 tonnes per year of frozen 
tuna, ECU  85 per tonne, up to a maximum of  10 500 tonnes per year,  of sardines and 
mackerel for canning and ECU 45 per tonne, up to a maximum of 7 000 tonnes per year, 
of  sardines and mackerel  for freezing  . 

For the French department of  Guiana, the system  referred  to in Article  1 shall consist 
of the payment of ECU 865 per tonne of prawns, up to a maximum of 3 500 tonnes per 
year,  for  industrial fishing and ECU 930  per  tonne of  prawns,  up to  a  maximum  of 
500 tonnes per year,  for non-industrial fishing. 

G> 

OJ No L  162, 30.6.1994,  p.  8. 

ArtkkJ 

The detailed rules for the application of this Regulation shall be adopted in accordance with the 
procedure laid down in Article 32 of Council Regulation (EEC) No  3759/92 of  17 December 
1992 on the common organization of the market in fishery and aquaculture products*8*. 

Article 4 

The measures provided for in this Regulation are measures intended to stabilize the agricultural 
markets  within the meaning of Article 3 of  Council Regulation  (EEC)  No 729/70 of 21 April 
1970  on  the financing of  the  common  agricultural  policy**.  They  are  to be financed by  the 
European Agricultural  Guidance and Guarantee Fund,  Guarantee Section. 

Arfoteg 

Every three years, commencing on 1 January  1998, the Commission  shall present the European 
Parliament and the Council with a report on the implementation of  the measures  provided  for 
in  this  Regulation  accompanied,  where  appropriate,  by  proposals  for  any  adjustments  which 
might be necessary  to achieve the objectives  set out in Article  1. 

This Regulation shall enter into force on  1 January  1995 

Article 6 

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

Done at Brussels, 

For the Council 

» 

» 

OJ No L 388,  31.12.1992,  p.  1. 

OJ No L 94,  28.4.1970,  p.  13. 

£ 

F i n a n c i al 

S t a t e m e nt 

DG: 1 
Date 

1. BUDGET HEADING  : Article B1-262 

Item 

B1-2621 

Programmes of options specific  to the remote and  insular 
nature of certain  regions  • Additional  costs  incurred  in 
disposing  of  fishery products 

2. TITLE  : Proposal  for a Council  Regulation  establishing  a system of compensation  for the additional  costs 

incurred  in the marketing  of certain  fishery products  from the Azores, Madeira,  the Canary 
Islands and the French department  of Guiana as a result  of their very  remote  location 

3. LEGAL  BASIS  : Article 43 of the Treaty  - Council  Decision 89/687/EEC  - Council  Decision 91/314/EEC 

Council  Decision 91/315/EEC 

4. AIMS To compensate  for the verified  additional  costs of marketing  certain  fishery products  from  the 

outermost  regions 

5. FINANCIAL  IMPLICATIONS 

PERIOD OF  12 MONTHS 

5.0  EXPENDITURE 

- CHARGED  TO THE EC BUDGET 

(INTERVENTIONS) 

- NATIONAL  AUTHORITIES 
- OTHER 

ECU  10.25 million 

CURRENT  FINANCIAL  YEAR 
,(.. °5,,,> 

ECU 8.11 million 

FOLLOWING  FINANCIAL  YEAR 
-** 

!cu 10.25 million 

-l 

5.1  REVENUE 

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

• NATIONAL 

5.0.1  PLURIANNUAL  EXPENDITURE 

PATTERN 

5.2 METHOD  OF  CALCULATION 

Azores/Madeira 
Canary  Islands  Tuna 

Sardines and 
mackerel 
Prawns 

Guiana 

TOTAL 

1997 
ECU  10.25 million 

1998 

ECU  10.25 million 

Fresh 
Frozen 
Canned 
Frozen 
Industrial 
Non-industrial 

15 000  t/yr 
10 400  t/yr 
3 500  t/yr 
10 500  t/yr 
7 000  t/yr 
3 500  t/yr 
500  t/yr 

x ECU 155/t 
x ECU  125/t 
x ECU  45/t 
x ECU  85/t 
x ECU  45/t 
x ECU 865/t 
x ECU 930/t 

» ECU 2 325 000 
« ECU  1 300 000 
157 500 
» ECU 
892 500 
* ECU 
•  ECU 
315 000 
* ECU 3 027 500 
465 000 
« ECU 

ECU 8 482 500 

applying  a correcting  factor of 
ECU(budget)10.25  million 

1.207509,  this amount  in ECU(agriculture) corresponds  to almost 

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 ? 

COMMENTS  : 

NO 

YES 

The appropriations  required  are  included  in the amending  letter  to the 1995 PDB  (ECU 8 million  in 
Chapter  BO-40) 

? 

ISSN 0254-1475 

COM(94) 473 final 

DOCUMENTS 

13 03 

r 

EN 

Catalogue number : CB-CO-94-498-EN-C 

ISBN 92-77-81560-4 

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