Proposal for a COUNCIL REGULATION (EC) on improving the processing and marketing conditions for agricultural products
Date: 1996-02-26
Institutions: European Commission
Subjects: Community support framework, EAGGF Guidance Section, agricultural product, agro-industry, aid programme, marketing

COMMISSION  OF THE  EUROPEAN  COMMUNITIES 

Brussels,  26.02.1996 
COM(96)  58  final 

96/0044  (CNS) 
96/0045  (CNS) 
96/0046  (CNS) 

Proposal  for  a 
COUNCIL  REGULATION  (EC) 

on  improving  the  efficiency  of  agricultural  structures 

Proposal  for  a 
COUNCIL  REGULATION  (EC) 

on  improving  the processing  and  marketing  conditions 
for  agricultural  products 

Proposal  for  a 
COUNCIL  REGULATION  (EC) 

on  producer  groups  and  associations  thereof 

(presented  by  the  Commission) 

EXPLANATORY  MEMORANDUM 

Consolidation  of  Objective  5(a)  on  the  adjustment 
of  agricultural  structures  throughout  the  Community 

1. 

The  adjustment  of  agricultural  structures  is an  essential  element  in  improving  the  rural 
economy,  both  in the context  of the economy  in general  and  in the  development  of the 
common  agricultural  policy  in  particular. 

2. 

In  November  1994 the  Council  adopted  Regulation  (EC)  No  2843/94  which  improved 
and  completed  the  Community  rules  concerning  Objective  5(a). 

the  Commission  undertook  to  work  on  the 
At  the  time  of  this  modification, 
consolidation  of  the  different  instruments  in  force.  This  present  proposal  fulfils  that 
undertaking. 

3. 

The three basic Regulations concerning Objective 5(a) [Regulations (EEC) Nos 1360/78, 
866/90  and  2328/91]  were adopted  at  different  times  (1978,  1990  and  1991)  and  have 
been  amended  more  than  a  dozen  times.  As  a result,  the  texts  in  force  are  difficult  to 
find  and  barely  understandable  to the  non-specialist. 

A  clear  presentation  of  the  rules  governing  agricultural  structures  across  the  whole 
Community  is an  essential  step towards  the achievement  of  the  stated  objectives.  Only 
if  official  texts  are  readable  and  transparent  will  potential  applicants  be  able  to  check 
the  usefulness  and  relevance  of the  available  opportunities,  with  a  view  to  making  an 
application  and  following  through  successfully  to  implementation. 

In addition,  one of the Regulations affected  [Regulation  (EEC) No 2328/91] governs the 
conditions  for  the  granting  of  compensatory  allowances  in  less-favoured  agricultural 
areas.  However,  the  rules  for  the  definition  of  these  areas  (criteria  for  mapping  and 
procedures) are contained  in a separate instrument, Council  Directive 75/268/EEC of 28 
April  1975.  These  rules  can  easily  be  incorporated  into  the  new  consolidated  text  of 
Regulation  (EEC) No  2328/91. 

4. 

This  proposal  for  consolidation  comprises  an  updating  of  the  original  legal  texts  by 
incorporating  their  successive  amendments  and  by  introducing  the  following  elements 
of  simplification  and  clarity  : 

- 

incorporation  into the text of Regulation  (EEC) No 2328/91  of the articles still  in 
force of Council Directive 75/268/EEC on the adjustment  of agricultural  structures 
throughout  the  Community  (see  2  above),  thus  reducing  the  number  of  legal 
instruments; 

- 

- 

- 

- 

- 

- 

introduction  of  tides  and  sub-titles  corresponding  to  the  areas  covered  by  the 
articles; 

retention,  as  far  as  possible,  of  current  article  numbering,  which  is  familiar  to 
administrators  and other users of the texts; 

removal  to an annex, of rates of aid in Regulation (EEC) No 2328/91  in order to 
facilitate  future updating; 

deletion  of unnecessary  references; 

correction  of  several  material  errors in certain linguistic version; 

rewriting  of  articles (very  few  in number) to improve clarity. 

5.  This  proposal  aims  to  update  and  to  consolidate  the  relevant  instruments  and, 
notwithstanding  the  amendments  in  the  interests  of  simplification  and  clarity,  this 
proposal  does  not  contain  any  substantive changes. 

COUNCIL REGULATION  (EC)  No 

of.: 

on improving  the  efficiency  of  agricultural  structures 

9 6 / 0 0 44 

(CNS 

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  Council  Regulation  (EEC) No  2328/91  of  15 July 
1991  on  improving  the  efficiency  of  agricultural  structures4, 
has been  substantially  amended  on  several  occasions;  whereas 
in  the  interests  of  clarity  and  rationality  it  is  appropriate  to 
consolidate  the  said  regulation;  whereas  moreover  in  the 
interests  of  simplification  and  coherence  it  is  appropriate  to 
incorporate  in  the  same text  Council Directive  75/268/EEC  of 
28  April  1975  on  mountain  and  hill  farming  in  certain  less-
favoured  areas5; 

Whereas, pursuant  to  Article  1 of  Council  Regulation  (EEC) 
No  2052/88  of  24  June  1988  on the  tasks  of  the  Structural 
Funds  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,  Community  action  through  the  Structural  Funds, 
in  particular,  is to  support  the  achievement  of  the  general 
objectives  set  out  in  Articles  130a and  130c  of  the Treaty  by 

OJ No  ... 

OJNo 

OJNo... 

OJ No L 218, 6.8.1991, p.  1, as last amended by  Commission Regulation  (EC) No  2387/95, OJ No 
L  244  of  12.10.1995', p.50. 

OJ>No L  128,  19.5.1975, p.l 

OJNo L 374 of 31.12.1988, p.25, as last amended by the Act of Accession of Austria, Finland and 
Sweden. 

contributing to the  attainment of five  priority  objectives; 
whereas it is for the Guidance  Section  of the European 
Agricultural  Guarantee  and Guidance Fund (EAGGF) to 
contribute towards promoting  rural  development  by  speeding 
up the adjustment  of  agricultural  structures in the context  of 
reform  of  the  common  agricultural  policy; 

Whereas intervention by  the EAGGF for the attainment  of 
Objective  5 (a) is  governed by  Council Regulation  (EEC) 
No  4253/88  of  19 December  1988  laying  down provisions  for 
implementing Regulation  (EEC) No  2052/88  as regards 
coordination of  the  activities of  the different  Structural Funds 
between themselves  and with the operations of the European 
Investment Bank  and the other existing financial  instruments7, 
and by  Council  Regulation  (EEC) No  4256/88  of  19 
December  1988  laying  down provisions  for  implementing 
Regulation  (EEC) No  2052/88  as regards the EAGGF 
Guidance Section8; 

Whereas this  common  measure  must fit  in with other 
horizontal  measures  decided  on for the attainment  of 
Objective  5  (a); whereas  it  also  reflects  certain principles  of 
Community  policy  and agricultural  structures that are 
generally  applicable  to  any intervention  by the Funds; 

Whereas  it is not possible  to  achieve the objectives  of the 
common  agricultural  policy  set out in Article  39  (1)  (a) and 
(b) of  the Treaty  without aiding the improvement  of the 
efficiency  of  agricultural  structures,  especially  in  regions 
experiencing  particularly  acute problems; 

Whereas this  improvement  of  the  efficiency  of  agricultural 
structures is  an indispensable  element in the development  of 
the  common agricultural  policy; whereas it is  therefore 
necessary  that such improvement  be based on  Community 
concepts  and criteria; 

Whereas, because  of the  diversity  of their causes, nature and 
gravity, structural  problems in  agriculture  may require 
solutions  which vary  according  to region  and are capable  of 
adjustment over a period  of time; whereas  such  solutions 
must  contribute to  the overall  economic  and social 
development  of  each region  concerned; 

Whereas the situation  of  agricultural  markets has changed, 

OJ No L 374, 31.12.1988, p. 25, as last amended by the Act of Accession of Austria, Finland and 
Sweden. 

• 

OJNo L 374,31.12.1988, p.25, as last amended by Resolution (EEC) No 2085/93 of 20 July 1993, 
OJNo L 193, 31.7.1993, p. 5. 

<f 

and will  change further,  as a result of the new direction 
imposed  on  the  common  agricultural  policy by the need  to 
secure  a gradual  drop in output in those sectors where there 
<, 
' is  a surplus; 

Whereas, in this  context, structural  policy  must be used to 
help  fanners  adapt to this new situation and to cushion the 
effects  that the new  markets and prices policy  is likely  to 
have on  agricultural  incomes in particular; 

Whereas, if European agriculture is to maintain a presence  on 
world  markets, the common  agricultural policy  must  continue 
to  aim  at increasing  the efficiency  and competitiveness  of 
agricultural  holdings; whereas, while the basic adjustments 
necessary  to  ensure the long-term  competitiveness  of 
Community  agriculture must be made through the markets 
policy,  the structural  policy  also must make its  contribution 
by  strengthening  production  and marketing structures  as far 
as possible  but without in  any  way worsening the imbalance 
between  the productive  resources  allocated to agriculture  and 
the  foreseeable  outlets; 

Whereas, within  the framework  of this common measure, in 
order to  achieve  the  aim of  improving the effectiveness  of 
agricultural  structures, Member  States should have the  choice, 
according  to the specific  position  of their farmers, to 
implement  the measures or not and to adapt them to the 
different  situations, while  maintaining the obligation  to 
respect  the  sectoral  prohibitions  and limitations  as well  as the 
rules  on  State aids; 

Whereas  agricultural  structure 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; 

Whereas,  in the future,  the only  holdings capable of  adjusting 
to  economic  conditions  will  be those on which  the farmer has 
adequate vocational  skill  and competence, and on  which 
profitability  is  verified  by  accounts and by a material 
improvement plan; 

Whereas  the  aim of  Community  investment aid is to 
modernize  agricultural  holdings  and thus improve their 
viability  in the  context  of the rational  development  of 
agricultural  production; whereas this aspect of the structural 
policy  must be  adjusted so  as to permit the modernization 
and diversification  of  agriculture  while remaining  consistent 
with  the  measures taken to limit surplus production; 

Whereas, in  order to  qualify  for  Community investment  aid, a 

farmer must normally  practise farming  as his main 
occupation, that is, he must devote  at least half of  his 
working  time to his holding  and derive  at least half of his 
income  therefrom;  whereas  investment  aid should, however, 
be  extended  to persons who  do not practise  farming  as their 
main occupation, provided that on their holding they  engage 
in  forestry,  tourism or craft  activities or activities designed to 
safeguard  the environment  and maintain the countryside; 

Whereas investment aid should be concentrated on holdings 
which  are in greatest need of  such aid; 

Whereas the adjustment of farm structures by an 
improvement  in productivity  resulting  in an increase in 
production  is confronted  by insurmountable  limits because  of 
the  state of the market for many  agricultural products; 
whereas  investment  aid is intended not necessarily  to  increase 
production  capacity  but also to  improve the quality  of 
production  conditions; whereas it  appears necessary  to 
concentrate  such aid on those  investments  which  allow for a 
reduction  in production  costs and for  the improvement in 
living  and working  conditions  or which  aim at conversion  of 
production;  whereas such aid may  also  be granted for 
investments  aimed at finding  new sources of  income,  such as 
tourism  or craft  activities or the farm-based  manufacture  and 
sale  of  farm products, and to investments  aimed  at improving 
conditions  for the hygiene  and welfare  of  animals  and at 
safeguarding  and improving  the  environment; 

Whereas,  in addition, the objective  of  market balance  in the 
Community  requires that specific  conditions be attached to 
the  granting  of  investment  aid in the pig, milk,  and beef and 
veal  production  sectors as well  as in the  egg  and poultrymeat 
sectors; 

Whereas  the grant of  specific  benefits  to young  farmers may 
facilitate  not only  their installation but also  the structural 
adjustment  of their holding  after  their first  installation; 

Whereas  the keeping  of  accounts is  essential  to the correct 
assessment  of the financial  and economic  situation  of 
holdings,  and in particular of  those  undergoing 
modernization; whereas a financial  incentive  may  encourage 
the  keeping  of accounts; 

Whereas, in the interests of rational  production  and of 
improvement  in living  conditions,  encouragement  should  also 
be given  to the formation  of groups having  as their purpose 
mutual  aid between holdings, including  the use of  new 
technologies  and practices for  safeguarding  and improving the 
environment  and preserving the  countryside,  and to the 

formation  of groups which would  introduce alternative 
farming  practices or a more rational joint  use of  agricultural 
means of production, or group fanning  operations; 

Whereas in the same  context it is also necessary  to  encourage 
the creation of  agricultural  associations  whose objective  is  the 
establishment  of  replacement  and management services; 

Whereas, the Council  has adopted the Community  lists  of 
less-favoured  areas, for which special  measures adapted to 
their situation should be  enacted at Community  level,  in 
particular in order to take account of the natural  conditions  of 
production  and to  ensure reasonable  incomes for farmers  in 
these regions; 

Whereas it may be essential, if the objectives  assigned to 
farming  in less-favoured  regions  are to be attained, that 
farmers permanently  engaged  in  agriculture in such  areas be 
paid annual  allowances  aimed  at compensation  for the 
permanent natural handicaps; whereas it should be left  to 
Member  States to fix  the amount of  such  allowances 
according to the severity  of the handicaps involved and 
taking  account  of  the economic  situation  and farmers' 
incomes  within the limits and conditions fixed  for the 
different  types of  areas, both as to the amounts which may  be 
paid  and the types  of production  which  may be covered; 

Whereas, in order to reduce the  drawbacks both in terms  of 
market balance and environmental  protection, the  allowance 
should be  granted for only  1.4  livestock  units (LU) per 
hectare of  the total  forage  area of  the holding; whereas, in 
addition,  as regards the maximum  amount of  Community  aid 
per holding, the administrative  difficulties  should be 
overcome by  replacing the existing  scheme by  a simpler  one 
designed  to  concentrate  the Community's  efforts  on those 
holdings  which  are in greatest need, that is, the Community 
contribution  would be restricted  to the equivalent of  120 
units; 

Whereas the rationalization  of holdings  and the need to 
preserve the countryside necessitate  the granting of  aid for 
joint investment  schemes in the less-favoured  areas in 
particular for fodder production  and for land improvement 
and capital equipment  for pasture  and hill  grazing; 

Whereas the evolution  and the specialization  of  agriculture  . 
require an appropriate level  of  general, technical  and 
economic  training for the active farm population,  especially 
as regards new orientations of  management, of production, or 
of  marketing,  as well  as for young people  about to be 
installed  or recently  installed  on  a holding; 

Whereas  the  insufficient  financial  means available  for 
vocational  training  and  further  training, and, in  particular,  that 
of  the  leaders  and  managers  of  cooperatives  and  agricultural 
groups,  impedes  the  structural  adjustment  of  agriculture  in 
many  regions; 

Whereas,  in  accordance  with  the principles  of the  reform  of 
the  Structural  Funds, and  in particular  with  Article  5 and  11 
of  Regulation  (EEC) No  2052/88, the EAGGF  cofinances 
national  aid  schemes by  reimbursing  expenditure  incurred  by 
Member  States;  whereas the rate of  Community 
part-financing  may  be  differentiated  on the basis  of  the 
criteria  and  within  the limits laid  down  in Article  13 of  the 
said  Regulation;  whereas  these  rates  are to be  determined  by 
the  Commission; 

Whereas,  for  the  purposes  of  administrative  management, 
Member  States  should  be  authorized  to  lay  down  additional 
conditions  for  the  execution  of the Member  States  provided 
for  in  this  Regulation; 

Whereas  to  facilitate  structural  improvement  of  the 
agricultural  sector  in  certain  regions, provision  must  be  made 
for  some  temporary  adjustments  to the rules on  the 
acceleration  of  structural  adjustment  in  the  context  of  the 
reform  of  the  common  agricultural  policy; 

Whereas  it  is  appropriate,  in the  interests  of  clarity  and  in 
order  to  facilitate  periodic  updating,  to place the  levels  of 
aids  in  an  annex, 

HAS  ADOPTED  TfflS  REGULATION: 

TITLE  I 

Framework  for  the  common  measure 

Article  1 

With  a view  to  expediting  the  adjustment  of  agricultural 
structures  in  the  Community  pursuant  to  Objective  5  (a)  as 
set  out  in  Article  1 of Regulation  (EEC) No  2052/88,  a 
common  measure  within  the  meaning  of  Article  2  (1)  of 
Regulation  (EEC) No  4256/88, to be  implemented  by  the 
Member  States, is hereby  introduced  with  the  following 
objectives: 

(i) 

to  help  restore  the balance between  production  and 
market  capacity; 

g 

•  (ii) 

to help improve the efficiency  of  farms by  developing 
and reorganizing their structures  and by  promoting 
supplementary  activities; 

(iii) 

to maintain a viable  agricultural  community  and thus 
help  develop the social  fabric  of  rural  areas by  ensuring 
a fair standard of  living  for farmers  and by  offsetting 
the effects  of  natural handicaps in less-favoured  areas; 

(iv) 

to  contribute to the safeguarding  of the environment 
and the preservation of die countryside, including the 
long-term  conservation  of natural  farming resources. 

Article  2 

The EAGGF, Guidance  Section,  (the Fund) shall be used, 
where  action is taken under the  common  measure refened  to 
in Article  1, to provide part-financing  for national  aid 
schemes  concerning: 

(a)  measures relating  to investments  in  agricultural 

holdings, in particular to  reduce production  costs, to 
improve the living  and working  conditions of  farmers, 
to promote the  diversification  of their activities, 
including  the marketing  of products on the farm,  and to 
preserve  and improve the natural  environment; 

(b)  measures to  encourage  the setting-up  of young  farmers; 

(c)  measures to  assist agricultural  holdings, involving the 
introduction  of  accounts  and the launching of groups, 
services  and other measures serving  several  holdings; 

(d)  measures to support farm  incomes  and to maintain 

viable  agricultural  communities  in less-favoured  areas 
by  means of  agricultural  aid for  offsetting  natural 
handicaps; 

(e) 

vocational  training projects connected  with the 
measures refened  to in points  (a), (b)  and (c). 

Article 3 

The  Community  contribution  to  aid under this Regulation 
shall  be limited to die financial  resources resulting from  the 
allocation  refened  to in Article  12 (4)  of Regulation  (EEC) 
No  2052/88  without prejudice to Article  32  (2)  of this 
Regulation. 

To this end, Member  States may  limit the right of  applicants 
to benefit  from such  aid according to the financial  resources 

9 

available. 

TITLE II 

Aid  scheme for  investments  in agricultural  holdings 

Article 4 

In order to  contribute to the improvement of agricultural 
incomes  and of  living, working and production conditions on 
agricultural  holdings, Member States may introduce a scheme 
for  investment  aid to agricultural  holdings, pursuant to the 
common  measure. 

Article 5 

The aid scheme  is confined  to agricultural  holdings 

1. 
where the farmer: 

(a)  practises farming  as his main occupation. 

Member  States may, however,  apply die aid scheme to 
part-time farmers who  derive at least  50% of  their total 
income  from  farming,  forestry, tourism, craft  activities, 
or activities  for maintaining  the countryside which 
benefit  from  public aid, carried out on the holding, 
provided  that the proportion  of  income deriving  directly 
from farming  on the holding  is not less than 25% of the 
farmer's total  income and that off-farm  activities  do not 
account for  more than half the farmer's total  working 
time; 

(b)  possesses  adequate occupational  skill  and competence; 

(c) 

submits  a material  improvement plan for the holding. 
This plan  must show that the investments  are justified 
with regard to the situation of  the holding  and its 
economic  position  and that implementation  of the plan 
will  bring  about a lasting  improvement of  that situation; 

(d)  undertakes to keep simplified  accounts comprising  at a 

minimum: 

- 

- 

records of  revenue  and expenditure  of the holding, 
with supporting  documents, 

the  drawing up of  an annual balance sheet of the 
assets  and liabilities of  the holding. 

2. 

The  aid system  shall  be  limited to  agricultural  holdings 

/O 

where  labour  income per man  work  unit  (MWU)  is less  than 
1,2  times  the  reference  income  refened  to  in  paragraph  3. 

Member  States  may  restrict  the. aid  scheme  to  aid  for  family 
farms. 

3.  Member  States  shall  fix  the reference  income  at  a  level 
not  exceeding  the  average  gross wage of  non-agricultural 
workers  in  the  region. 

The plan for  die material  improvement  of  the  holding 

4. 
shall  contain  at  least: 

- 

- 

- 

a  description  of  the  initial  situation, 

a  description  of  the situation  upon  completion  of  the 
plan,  drawn  up  on the basis of  an  estimated  budget, 

an  indication  of  the measures  and  in particular  the 
investments  planned. 

5.  Member  States  shall  define  the term:  'farmer  practising 
farming  as his  main  occupation*. 

This  definition  shall, in  the  case of natural  persons, include  at 
least  the  condition  that the proportion  of  income  derived  from 
the  agricultural  holding  must be  50 % or  more  of  the  farmer's 
total  income  and  that  the working  time  devoted  to  non-farm 
activities  must  be  less than  half  of the farmer's  total  working 
time. 

On  the  basis  of  the  criteria refened  to  in  the  second 
subparagraph,  the Member  States  shall  define  what  is  meant 
by  the  said  expression  in the  case of  legal  entities  other  than 
natural  persons. 

6.  Member  States  shall  lay  down  the  criteria  for  assessing 
the  occupational  skill  and  competence  of  the  farmer,  by 
reference  to  the  standard  of  agricultural  training  received 
and/or  to  a  minimum  period  of  farming  experience. 

Article 6 

1. The  aid  scheme  may  be  applied  to  investments  relating  to: 

- 

the  qualitative  improvements  and  redeployment  of 
production, in  line with  market  requirements  and,  where 
necessary,  with  a view to  adapting  it to  Community 
quality  standards, 

- 

the  diversification  of  activities  on the holding,  in 

i\ 

particular by the introduction of  tourism  and  craft 
activities  or the  manufacture  and sale of  farm produce 
on the holding, 

the  adaptation  of  the holding  for  the purposes  of 
reducing  production  costs  and saving  energy, 

the improvement  of  living  and working  conditions, 

the improvement of  the hygiene  conditions  of  livestock 
enterprises  and compliance  with  Community  animal 
welfare  standards, or, failing  these, national  standards 
until  Community  standards are adopted, 

- 

- 

- 

the protection  and improvement  of  the  environment. 

The  grant of  investment  aid may  be  refused  or  limited 

2. 
where the  effect  of  the investments  concerned  would  be to 
increase  the holding's  production  of  products for  which  no 
normal  market outlets  can  be found. 

The  Council,  acting  by  a qualified  majority  on  a proposal 
from  the  Commission,  shall  adopt the necessary  measures  and 
shall  define  the products falling  within  the meaning  of  the 
preceding  subparagraph. 

The  investment  aid shall  not be granted  in  respect  of 

3. 
investments  relating to  milk  production  the  effect  of  which  is 
to  exceed  the reference  quantity  determined  in  accordance 
with  rules on the  additional  levy  for  milk  and milk  products, 
unless  an additional  reference  quantity  has been  granted 
beforehand  as provided  for  in  accordance  with  the said rules. 

In such  cases, the granting  of  aid shall  be subject  to the 
condition  that the investment  does not  serve to raise the 
number of  dairy  cows  to  more than  50  per MWU  and more 
than  80 per holding  or, where  the holding  has more than  1.6 
MWU,  does not serve  to  raise the number of  dairy  cows by 
more than  15 %. 

Aid  may not be granted  for  investments  which  have the 

4. 
effect  of  increasing  pig places. 

The place  required by  one breeding  sow  shall  conespond  to 
6.5  fattening  pig places. 

Furthermore,  where  an improvement  plan provides  for 
investment  in the pig production  sector, the granting of  aid in 
respect  of  such  an investment  shall  be subject  to the 
condition  that, upon  completion  of  the plan,  at least the 
equivalent  of  35% of  the  quantity  of  feed  consumed  by  pigs 
can be produced  on the holding. 

/x 

However,  in  accordance  with the procedure laid down in 
Article  30 the  Commission  may  authorize a Member State to 
derogate  from  that condition,  in exceptional  cases and solely 
for investment  to  reduce  emissions  from  animal  droppings 
and the  elimination  of  slurry  in existing holdings, provided 
that such  investment  leads to a better result for the protection 
of  the environment than that obtained by  the condition 
derogated  from  and that it does not in any circumstances lead 
to  an increase  in production  capacity. 

Aid granted for investments relating to the beef sector, 

5. 
other than aid for  safeguarding  the environment, improvement 
of hygiene  conditions  on livestock  enterprises and animal 
welfare,  where  there is no increase in capacity, shall  be 
restricted to livestock  enterprises  where the  beef-cattle 
stocking  rate does not, in the final  year of the plan, exceed 3, 
2.5  and 2  livestock  units (LU) per hectare of forage  area used 
for feeding  the  cattle for plans ending respectively  in  1994, 
1995  and  1996  or later. The limits of 2.5  and 2 LU per 
hectare  shall  apply  only  to applications  submitted  as from 1 
January  1994. 

Where the number of  animals on a holding  which  are to be 
taken  into  account for the determination  of the stocking rate 
in  accordance  with Article 4  (g)  (1) of Regulation (EEC) No 
805/689  does not  exceed  15 LU, the maximum  rate of 3 
LU/ha  shall  apply. 

The LU  conversion  table is given  in Annex n. 

The granting  of  investment  in the egg  and poultry 

6. 
sector  is not permitted,  with the  exception  of  aid for 
safeguarding  the  environment,  improvement  of hygiene 
conditions on  livestock  enterprises and animal  welfare, 
provided  there is  no increase  in  capacity. 

Article 7 

The investment  aid scheme shall  cover aid in the form 

1. 
of  capital  grants or die  equivalent thereof in interest rate 
subsidies  or defened  repayments, or a combination of these, 
in respect of  the investments necessary  to  carry out the 
improvement  plan but with the exception  of  expenditure 
incuned  in buying: 

- 

- 

land, 

livestock  in the form of pigs, poultry  and calves  for 

OJNo  L  148, 28.6.1968, p. 24, as last amended.. 

13 

slaughter. 

With  regard to the purchase of livestock,  only  the  first 
purchase foreseen  in the improvement plan may  be  charged 
to  the  account 

The  aid scheme may  cover guarantees for loans  contracted 
and the interest thereon, where it is necessary  to  supplement 
an otherwise  insufficient  security  or personal guarantee. 

The total value of the aid expressed  as a percentage  of 

2. 
the  amount of the investment, shall not exceed: 

(a)  In the  case of  the less-favoured areas: 

- 
- 

45  %  for investments in fixed  assets, 
30 %  for  other types of investments; 

(b)  in the  case of  other areas: 

- 
- 

35  %  for  investments  in fixed  assets, 
20 %  for  other types of  investment. 

Capital  grants may  apply  to the level  of  investments 

3. 
specified  in Annex I. Member  States may set these  limits at 
lower  levels. 

Where the  aid is not granted in the form of  a capital grant, 
Member  States shall  draw up each year a table showing  the 
value  of  the aid, expressed  as a percentage  of the  amount  of 
the  investment,  taking  into  consideration the average annual 
rate of  interests on non-subsidized  loans, the value of the 
interest  subsidy, the term of  the loans, interest subsidies and 
defened  repayments  and any other factor  used for  expressing 
the  aid  in grant equivalent terms. 

In  accordance  with the procedure laid down in Article  30, a 
Member  State may  be authorized, for a specified  period, to 
grant  aid exceeding  the level  specified  in the  first 
subparagraph, if  such  action  is wananted  by the  situation  on 
the  capital  market in that Member State. 

Article 8 

The number of plans for the material  improvement  of a 
holding  which may be accepted successively  per  beneficiary 
during  a six-year period  shall  be limited to three. The total 
investment  eligible  for  co-financing  shall be limited  to the 
amounts  specified  in Annex L 

<<f 

Article  9 

A  material  improvement  plan  may  relate to an 

1. 
individual  holding  or to  a number of  holdings grouped 
together  with  a view  to the merger of  all  or part of these 
holdings. 

In the  case of  group-operated  holdings, the material 

2. 
improvement  plan shall  concern  the group-operated holding 
and, where necessary,  any parts of holdings which  continue 
to be run by the group members. 

3.  Member States may  grant the investment aid to 
group-operated holdings if  at least two-thirds of the members 
of  the group holding  satisfy  the conditions laid down in 
Article  5 (1). 

4. 
Except for  aquaculture, the  ceilings for livestock  or for 
the  amounts  refened  to  in Articles  6 (3),  7 (3)  and 8 may  be 
multiplied  by the number of holdings belonging to the group. 

However,  these  ceilings  may  not exceed: 

200  cows, 
the amounts specified  in Annex I, 

per group-operated holding,  including  any parts of holdings 
which  continue  to be run by the group members. 

The  Commission, in  accordance  with the procedure  laid 

5. 
down  in  Article 30, may  authorize  a Member State to grant 
the investment  aid, under the conditions  stipulated for the 
group-operated holdings, to  agricultural  cooperatives and 
similar  associations  whose  sole  objective  is to manage an 
agricultural  holding.  At the same time, the Commission  shall 
lay  down specific  conditions  for the granting of  aid to such 
cooperatives  and associations,  as well  as the conditions under 
which  and the limits  within  which  the volume of  investment 
provided  for  group-operated  holdings  may be exceeded. 

6.  Member  States shall  lay  down the  conditions to be met 
by  group-operated  holdings,  in particular: 

- 
- 

- 
- 

•  their legal  form, 

their minimum  duration, which  must not be less than 
six years, 
the formation  of their capital, 
the participation  of  members in management. 

TITLE  m 

Measures specifically  benefitting  young  farmers 

iC 

Article  10 

1.  Member  States may grant setting-up  aid to young 
farmers  under 40 years of age on  condition that: 

- 

- 

- 

- 

the young  farmer is established  as head of the holding, 
which  means that he assumes civil  and tax liability  or 
joint  liability  for the management of the holding and 
the  social  status accorded in the Member State 
concerned  to self-employed  heads of holding, 

the young farmer sets up as a farmer practising  fanning 
as his main occupation or begins, after having  set up as 
a part-time farmer, to practise farming  as his main 
occupation. However, Member  States may grant this aid 
to young farmers  who set up as part-time  fanners 
deriving  at least 50 % of their total income  from 
farming, forestry, tourism or craft  activities or  activities 
for  maintaining  the countryside  which benefit  from 
public  aid,  carried out on the holding, provided  that the 
proportion  of  income  deriving  direcdy  from fanning  on 
the holding  is not less than 25  %  of the fanner's total 
income  and that non-farm  activities  do not account  for 
more than half the farmer's total  working time; 

the occupational  qualifications  of the young  farmer are 
at a satisfactory  level  at the time of his setting up or at 
the  latest two years  thereafter; 

the holding  requires a volume of  work  equivalent  to at 
last one MWU, which must be achieved  at the latest 
two years  after  the setting up. 

2. 

The  setting-up  aid may comprise: 

(a) 

a single  premium  of  a maximum  eligible  amount 
specified  in  Annex I. The premium may be paid over a 
period not  exceeding  five  years. Member States may 
replace  the premium by  an equivalent  interest  subsidy; 

(b) 

an interest  subsidy  on loans taken with  a view  to 
covering the  costs arising from  setting up. 

The  duration of  the interest  subsidy  shall  not exceed  15 
years; the  capitalized  value  of the interest subsidy  may 
not  exceed the value of the single premium. 

Member  States may pay, in the form of  a grant, the 
equivalent  of the interest subsidy  resulting from  the 
volume  and duration of the loans taken  out 

te 

3.  Member States shall  define: 

- 

- 

- 

- 

the conditions governing  setting up, 

specific  conditions in a situation  where a young  farmer 
is not established as sole head of  the holding,  in 
particular where he sets up as a member of an 
association  or cooperative  whose principal  object  is the 
management of  an agricultural  holding; these  conditions 
must be equivalent to those required for setting  up as a 
sole head of  a holding, 

the agricultural  qualifications  required at the time of  the 
setting up, or which must be attained within two  years 
thereafter, 

the conditions  under which it will  be recognized that 
the volume  of  work  equivalent to  at least one  MWU 
has been achieved  within the maximum  time of  two 
years after  setting up. 

Article 11 

Member  States may grant young farmers under 40 years  of 
age  additional  aid for investments to be made under a 
material  improvement plan amounting  to a maximum  of  25 % 
of  the  aid granted pursuant to Article  7 (2)  and (3), provided 
that the young  farmer  submits the improvement  plan  within 
five  years of  setting  up and provided that he possesses  the 
occupational  qualifications  refened  to in Article  10 (1). 

TITLE TV* 

State aids for  investments  in agricultural  holdings 

Article  12 

State aids for investments in agricultural  holdings, 
1. 
granted outside the aid scheme refened  to in Tide II, are 
subject to the conditions set out in this article. 

This  article applies even in Member States which  do not 
institute the system  of  investment  aids provided for  in 
Title H. 

(Aids generally  allowed.) The Member States may grant 

2. 
aid for investments for: 

land purchase; 
operating loans the term of  which  does not exceed  one 
marketing year, 

i* 

the purchase of  male breeding stock, 
securities  for  loans contracted, including interest, 
the protection  and improvement  of the environment, 
provided  that such  investments  do not entail  an increase 
in production  capacity, 
the improvement  of  hygiene  conditions in livestock 
enterprises or of  compliance with Community  animal 
welfare  standards or national  standards where these are 
stricter than Community  standards, provided that these 
investments  do not give  rise to an increase in 
production  capacity, 
agricultural  holdings, for activities not relating to  field 
crops or stockfarming. 

Articles  92 to  94  of  the Treaty  apply to these aids. 

(Aid  for  eligible  farms.)  In the case of individual  or 

3. 
associated  holdings  which  satisfy  the conditions of  eligibility 
laid  down  in  Articles  5 and 9,  aid for  investments  which 
exceed  the amounts laid  down  in Article  7(2) and (3)  and  11, 
are prohibited. 

This prohibition  does not  apply  to  aid for investments for: 

the construction  of  farm buildings, 
the relocation  of  farm  buildings where this is  done in 
the public  interest, 
land improvement  operations, 
the protection  and improvement  of the  environment 

- 

- 
- 

Articles  92 to  94  of  the Treaty,  as well  as the prohibitions 
and limitations  provided  for in  Article 6 of this Regulation 
apply  to these aids. 

ir 

(Aid for ineligible farms.) In the case of holdings  which 

4. 
do not  satisfy  the conditions of  eligibility  laid down in 
Article  5, the Member States may provide investment aid. 

(a)  The levels of  aids may be up to those set out in Tide II 

in so  far as the aids are for: 
energy  saving, 
land improvement, 
the protection  and improvement of die environment, 
provided that such investments do not entail an increase 
in production capacity, 
the improvement of hygiene  conditions in  livestock 
enterprises or of  compliance with Community  animal 
welfare  standards or national  standards where these  are 
stricter than Community  standards, provided that these 
investments  do not give  rise to an increase in 
production capacity. 

(b)  The aids may be granted at the levels  set out in  Annex 
I  as temporary  aids in small  agricultural  holdings. 
These  aids may not be granted under conditions  more 
favourable than those set out in Articles  7 and  11. 

(c) 

In all other cases, these aids must: 

be less than or equal  to one quarter of  the levels  of 
aid granted by Tide H, 
relate to investments which  do not exceed the total 
amount set out in Annex I, for a period of  six 
years, and 
meet the conditions set out in Articles  6 and 7,  the 
number of  dairy  cows refened  to in Article  6(3) 
being fixed  at 50 per MWU and per farm, only  if 
they  are allocated; 
- 

in the sector of  geese  and ducks, for the 
production  of foie gras, 
for the purchase of  livestock  which  may  be 
encouraged under Article  7(1),  even  where  it  is 
not the first purchase. 

= 

With  the  exception  of Article  92(2) of the Treaty, 
Articles  92-94  of the Treaty  do not apply  to these aids.. 

TITLE V 

Aid for the introduction of  accounting practices 

Article  13 

1.  Member  States may introduce  a scheme to  encourage 

n 

the introduction  of  accounting on agricultural holdings. 

The scheme shall  involve granting to farmers whose main 
occupation  is farming  an aid spread over at least the first  four 
years  during  which  management  accounts are kept on their 
holdings.  Accounts  will  be kept for  at least four years. 

Member  States will  determine the amount of such aid  within 
the range  specified  in Annex I. 

2.  The keeping  of  accounts shall, 

(a) 
- 

- 

(b) 
- 

- 

- 

comprise: 
the preparation of  annual  opening  and closing 
valuations, 
the systematic  and regular recording  over the 
accounting year of the various transactions in cash or in 
kind concerning  the holding; 

conclude  with the presentation  each year  of: 
a description  of  the general  characteristics of the 
holding,  and in particular of the factors of production 
employed, 
a detailed balance  sheet (assets and liabilities)  and a 
detailed trading account (expenditure  and income), 
the necessary  data, including  in particular the earned 
income  per MWU and the farmer's income, for 
assessing  the  efficiency  of the management of the 
holding  as a whole, and the profitability  of the main 
enterprises of  the holding. 

3.  Where  a holding  is  chosen by bodies  appointed by 
Member  States for the collection  of  accountancy  data for the 
purposes  of  information  and scientific  study, in particular 
within  the framework  of  the Community  accountancy  data 
network,  and the farmer is the beneficiary  of  aid, he must 
undertake to  make available to those bodies, under conditions 
of  anonymity, the accountancy  data relating to his holding. 

TITLE VI 

Setting-up  aid for groups 

Article  14 

Member  States may  grant setting-up  aid to  recognized 
farmers' groups which have  as their object: 
- 

mutual  aid between holdings, including the use of  new 
technologies  and practices for safeguarding  and 
improving the environment  and preserving the 

IO 

- 
- 

countryside, 
the introduction  of  alternative  farming practices, 
the more rational joint  use of  agricultural means  of 
production,  and 
the operation  of  a group holding. 

This setting-up  aid will  contribute  to the costs of operating  a 
group  during not  more than the first  five years after the 
formation. 

Member  States shall  fix  the amount of such aid by  reference 
to the number of  members  and to the activity  performed 
joindy.  The maximum  amount is specified  in Annex L 

Member  States shall  determine the legal  form of  such groups 
and the provisions  governing  cooperation between members. 

TITLE VII 

Setting-up  aid for farm  relief services 

Article  15 

1.  Member  States may  grant launching  aid to  contribute to 
covering  the management  costs  of  agricultural  associations 
having  as their object the provision  of  farm relief services. 
This  aid is  designed  to  contribute to  covering the  costs  of 
their organization. 

The relief  service  must be  approved by the Member 

2. 
State  and employ  at least  one full-time  worker who is  fully 
qualified  for  the  work he is  called  upon to perform. 

3.  Member  States shall  lay  down the conditions for the 
approval  of  relief  services,  and in particular: 
- 
- 

their legal  form, 
the provisions  governing  their management and 
accounting  practices, 
the type of  replacement  which  may  comprise the 
replacement  of  the farmer,  his spouse or an adult 
worker, 
their minimum  duration, which must not be less than 
10 years, 
the minimum number of  affiliated  farmers. 

- 

- 

- 

* 

4.  Member  States shall  fix  the  amount of the setting-up aid, 
which  shall  not  exceed the amount specified  in Annex I per 
relief  worker  employed  on a full-time  basis. This amount 
shall  be spread over the first  five  years of  each worker's 
employment;  it may be spread  degressively  over that period. 

*r 

TITLE  Vm 

Aid  for  farm  management  services 

Article  16 

1.  Member  States  may  grant  aid to  agricultural 
associations  for  the purpose  of  creating  or  stepping  up 
services  to  assist  farm  management  and  which  is to  help 
cover  their  management  costs. 

Farm  management  services must be  approved  by  the 

2. 
Member  State  and  must  employ  on  a full-time  basis at  least 
one  member  of  qualified  staff. 

The  aid  shall  be  granted  in respect of  the work  of  staff 

3. 
responsible  for  providing  individual  assistance  in  the 
technical,  economic,  financial  and  administrative  management 
of  agricultural  holdings. 

4.  Member  States  shall  lay  down  the  conditions  for  the 
approval  of  these  services, and in  particular: 
- 
- 

their  legal  form, 
the  provisions  governing  their  management  and 
accounting  practices, 
their  minimum  duration,  which  must  not  be  less  than 
10 years, 
the  minimum  number  of  affiliated  farmers. 

- 

- 

5.  Member  States  shall  fix  the  amount  of  the  aid  per 
member  of  staff  employed  on  a full-time  basis. This  amount 
shall  be  spread  over  the first five years  of  each  member  of 
staffs  employment;  it  may  be  spread  degressively  over  this 
period.  The  maximum  eligible  total  of  the  aid  is that 
specified  in  Annex  I. 

6.  Member  States  may  replace  the  system  of  aid  provided 
for  in  paragraph  5 with  a system  to  introduce  farm 
management  aid  for  farmers  practising  farming  as their  main 
occupation  who  make  use of  the  services to  assist  farm 
management. 

In  this  event, Member  States  shall  set  aid  at  up  to  the 
maximum  specified  in  Annex I  per holding, «to be  spread  over 
at  least  two years. 

TTTLEIX 

Aid  scheme  to benefit  less-favoured  agricultural  areas 

Sub-tide I:  Compensatory  allowances 

«£<Z_ 

Article  17 

In order to  ensure the continuation  of  farming, thereby 

1. 
maintaining  a minimum population  level  or conserving the 
countryside  in  certain less-favoured  areas the list of which  is 
determined  in accordance  with the procedure laid down in 
Article  21, Member  States may  introduce  an aid scheme to 
encourage  farming  and to raise incomes  in these areas. 

The application of die measures provided for in this scheme 
should take into  account the situation and development 
objectives particular to each region. 

2. 
In these  areas Member States may grant an annual 
compensatory  allowance to  assist farming  activities, such 
allowance  to be fixed according to the permanent natural 
handicaps. 

Article  18 

1.  Member  States may grant compensatory  allowances to 
farmers  who  work  at least three hectares of  usable 
agricultural  area (UAA)  and who undertake to pursue a 
farming  activity  in  accordance with the aims of Article  17 for 
at least five years from  the first payment of  a compensatory 
allowance  shall  be eligible  for  such an allowance; where a 
fanner  gives  up fanning  and the area concerned  continues to 
be  worked, he may  be released  from  such undertaking; he 
shall  be released from  such  undertaking  in  cases of force 
majeure, for  example  where his property  is  compulsorily 
purchased  or purchased  in the public  interest; in addition, 
farmers  in receipt of  a retirement  or early-retirement  pension 
shall  be released from  such undertaking. 

However,  in the Italian Mezzogiorno  region, including the 
islands,  in the regions  in the French overseas  departments and 
in the  Greek, Portuguese  and Spanish  regions, the minimum 
UAA  per holding shall  be two hectares. 

2.  Member  States may  lay  down additional  or limiting 
conditions  for the grant of the  compensatory  allowance, 
including  conditions  which  encourage the use of practices 
compatible  with the need to safeguard  the environment and 
preserve  the  countryside. 

Article  19 

1.  Member  States shall  fix  the amounts of the 
compensatory  allowance  according to the severity  of the 
permanent natural handicaps affecting  farming  activities and 
having  regard to the limits set out below,  although no 

21 

allowance  may  be less than the amount specified  in Annex I 
per LU  or, where  appropriate, per hectare. 

(a) 

(Headage payment.)  In the Case of  farms  keeping  cattle, 
sheep,  goats or equine animals the allowance  shall  be 
calculated  in relation  to livestock  numbers. The 
allowance  may  not exceed  the amount specified  in 
Annex I per LU.  The total  amount of the  allowance 
granted  may  not exceed the amount specified  in  Annex 
I  per hectare of  total forage  area of die holding.  A 
conversion  table for expressing  cattle,  equine  animals, 
sheep  and goats  as LUs is given  in Annex II. 

However,  in less-favoured  areas where the permanent 
natural handicaps  are serious  enough to justify  it, the 
local  allowance  granted may be increased to the amount 
specified  in Annex I per LU and per hectare. 

The  allowance  shall  be granted in  respect  of not  more 
than  1.4  LU per hectare of  the total  forage  area of  the 
holding. 

Cows  whose  milk  is intended  for marketing  may  be 
taken into  consideration  for the  calculation  of  the 
compensatory  allowance only: 
in  mountain areas; 
in other less-favoured  areas where  dairying  forms 
an important part of  farming  activity,  subject  to a 
limit  of  20  dairy  cows  per  beneficiary. 

(b) 

(Area payment)  In the  case of  production  other than  of 
cattle,  equine  animals, sheep  and goats, the  allowance 
shall  be proportional  to the  area farmed,  less that 
devoted  to the feeding  of  livestock  and: 

(i) 

in  all  less  favoured  areas, less that given  over to 
wheat growing,  except  areas given  over to the 
growing  of  common  wheat, in  areas the  average 
yield  from  which  does not  exceed  2.5  tonnes per 
hectare  used  for this product; 

(ii)  in  all  less-favoured  areas, less  any  areas which are 
full  plantations of  apple, pear or peach trees 
exceeding  0.5  hectares per holding; 

(iii)  in the less-favoured  areas other than mountain 

areas, less  any  areas assigned to the production  of 
wine,  apart from vineyards the yield  from  which 
does not exceed  20 hectolitres per hectare, or the 
production  of  sugarbeet or intensive crops. 

it 

The allowance  may not exceed the amount specified  in 
Annex I per hectare. However in less-favoured  areas in 
which  the severity  of the permanent natural  handicaps 
is great  enough so  to justify,  the total  amount granted 
may  be increased to the amount specified  in Annex I. 

(c) 

(Variation  of  allowances.)  Member States may vary  the 
compensatory  allowance  on the basis of the  economic 
situation of  the holding  and of the income  of the 
farmer. The  amount of the allowance may  also be 
adjusted in the light of the use of  agricultural  practices 
compatible  with the requirement for safeguarding  die 
environment  and preserving the countryside; the  benefit 
of  any increases may not, however, be combined  with 
the aid refened  to in Regulation  (EEC) No  2078/9210. 

2. 
The granting of  a compensatory  allowance  which 
exceeds  those  limits or which fails to satisfy  the  conditions 
laid  down  in this Title  shall  be prohibited. 

Expenditure  in respect of  the compensatory  allowances  shall 
not  be  eligible  for part-financing  by the Fund where the 
farmer  is  in receipt  of  a retirement or early-retirement 
pension. 

3. 
The maximum  amount eligible  under the fund  shall  be 
limited  to the equivalents of  120 units per holding,  whether 
livestock  units (LU)  or area units (ha); beyond  the  equivalent 
of  the first 60  units, the maximum  eligible  amount shall  be 
reduced  by half. 

4. 
In Finland,  for the purpose of  applying  this Article,  all 
the  less-favoured  areas shall  be  considered  as mountain area. 

Sub-tide TL:  Aid for joint  investments 

Article  20 

In the less-favoured  areas, Member States  may grant 

1. 
aid to joint  investment  schemes for fodder production, 
including the storage  and distribution of  fodder,  and for the 
improvement  and equipping  of pastures which  are farmed 
jointly  and, in mountain  areas, to joint or individual 
investment  in water points, in minor roads for  immediate 
access  to pastures, including  mountain pastures, and in 
shelters for herds. 

However,  where stock-breeding  constitutes  a peripheral 

OJ No L 215 of  13.7.1992, p. 85. 

9.<r 

activity  in these  areas, the aid shall be extended to 
agricultural  activities  other than stock-breeding. 

2.  Where  economically justified,  the work refened  to in 
paragraph  1 may  include  small-scale  farm water supply 
measures  compatible  with protection  of the environment, 
including  small-scale  irrigation  works, and die construction or 
repair of  shelters necessary  for transhumance. 

The  aid eligible for  co-financing may not exceed the 
3. 
amounts specified  in Annex I per joint investment project, 
per hectare of  pasture or mountain pasture improved or 
equipped  and per hectare irrigated. 

Sub-title  HI: Delimitation  of  less-favoured  areas 

Article 21 

1.  Member  States  shall  communicate to the Commission 
the boundaries of  the areas in which  they propose to apply 
the  special  system  of  aids provided for in this Tide, and 
which,  in the light of  the  characteristics specified  in Articles 
22  to  25, are eligible  for  inclusion  in the list of  less-favoured 
areas. Member  States shall  at the same time submit all 
relevant information  concerning the characteristics of  these 
areas and the measures  which they  propose to apply  in those 
areas under the  aid scheme. 

2. 
The  Council,  acting in  accordance  with the procedure 
laid  down  in Article  43  of the Treaty, shall  adopt the list  of 
less-favoured  areas. 

3. 
At the request of  a Member  State, submitted in 
accordance  with paragraph  1, amendments may be made to 
the  limits of die  areas in  accordance  with the same procedure 
as that  laid  down  in Article 30. These  amendments may not 
have the  effect  of  increasing the  effective  amount of 
agricultural  land of  all  the areas in the Member State 
concerned  by  more than  1.5% of  the total UAA  of that State. 

Article  22 

The less-favoured  areas shall  include mountain areas, in 

1. 
which  farming  is necessary  to protect the countryside, 
particularly  for  reasons of protection  against  erosion or in 
order to meet  leisure needs; they  shall  also include other 
areas where the maintenance of  a minimum population or the 
conservation  of  the countryside  are not assured. 

2.These areas must have  adequate infrastructures,  including 
access  roads to farms,  electricity  and drinking water and, in 

2& 

tourist and recreation areas, disposal  of sewage.  Should  such 
amenities be lacking,  their provision  should be envisaged  in 
the near future  in public amenity programmes. 

Article 23 

1.  Mountain  areas shall be made up of  local  government 
districts or parts thereof characterized by  a considerable 
limitation  of the possibilities for using the land and an 
appreciable increase in the cost of working it,  due : 

(a) 

(b) 

(c) 

either to the existence, because of the altitude,  of  very 
difficult  climatic  conditions the effect  of which  is 
substantially  to shorten the growing season, 

or, at a lower altitude, to the presence, over the greater 
part of the district in question, of  slopes too  steep  for 
the use of  machinery  or requiring the use of very 
expensive  special  equipment, 

or to the  combination  of these two factors,  where the 
handicap resulting from  each taken separately  is  less 
acute, provided that this combination  gives rise to a 
handicap  equivalent to that caused by the situation 
refened  to in the first two indents. 

Areas north of  the 62nd parallel  and certain  adjacent 

2. 
zones  are to be  included  as mountain areas in so  far  as they 
are subject to very  difficult  climatic  conditions the  effect  of 
which  is  substantially  to shorten the growing season. 

Article 24 

Less-favoured  areas in danger of  depopulation  and where  the 
conservation  of  the  countryside  is necessary,  shall  be made 
up of  farming  areas which are homogeneous form  the point 
of  view  of natural production  conditions  and must 
simultaneously  exhibit  all the following  characteristics: 

(a) 

(b) 

the presence  of  land of poor productivity,  unsuitable  for 
cultivation  and with a limited potential  which  cannot be 
increased  except at excessive  cost,  and mainly  suitable 
for  extensive  livestock  farming; 

the production  which results from  the low productivity 
of the natural  environment is appreciably  lower than the 
average, with regard to the main indices of  economic 
performance  in agriculture; 

(c) 

either a low  or dwindling population  predominantly 
dependent on  agricultural  activity,  and the  accelerated 

-> 

•* 

decline  of  which  would jeopardies the viability  of the 
area concerned  and its continued habitation. 

Article  25 

Less-favoured  areas may  include  small  areas affected  by 
specific  handicaps  and in which  farming  must be continued, 
where necessary  and subject to  certain  conditions, in order to 
conserve the environment,  maintain the  countryside  and to 
preserve the tourist potential  of die area or in order to protect 
the coastline. The total  extent of  such areas may not in any 
Member  State exceed  4% of the area of  the State concerned. 

TTTLEX 

Adjustment  of vocational  training to the requirements  of 
modern  agriculture 

Article  26 

In so  far  as no provision  is  made for their financing in 

1. 
Regulation  (EEC) No  4255/8811, Member  States  may, in 
regions  where the need  is  apparent and with  a view to the 
smooth  implementation  of  the relevant measures, introduce a 
scheme  of  special  aid for the improvement  of the agricultural 
skills of  beneficiaries  of  the measures refened  to  in Articles 5 
to  16  and young  farmers  under 40 years of age. 

Article  27 

The aid scheme  may  comprise: 

- 

- 

courses of basic  and advanced vocational  instruction or 
training for  farmers, family  helpers and agricultural 
workers who  have passed  the minimum  school-leaving 
age  and courses of  additional  training  for  such persons, 
intended to prepare them  for  qualitative  reorientation  of 
production; the application  of production  practices 
compatible  with protection  of  the landscape and 
acquisition  of  skills needed  to  enable them to  manage 
their woodlands, 

courses of  instruction  or training  for  leaders and 
managers of  producer groups and  cooperatives,  where 
this is necessary  to  improve the  economic  organization 
of  producers  and the processing  and marketing  of 
agricultural  products from  the region concerned, 

OJ No L 374 of 31.12.1988, p. 21, as last amended,. 

Vc 

- 

the courses of  further training, needed to achieve the 
level  of  qualifications  refened  to in Article  10(1), 
which  must be  of a minimum  length of  150 hours. 

Article 28 

1. 

The system  shall  comprise the granting of aid: 

(a) 

for  attendance  at courses of instruction or training; 

(b) 

for the organization  and provision of  courses  of 
instruction  and training. 

2. 
The  expenditure  inclined by Member  States in granting 
the  aid for training  shall  be eligible for  co-financing  up to a 
maximum  amount, specified  in Annex I, per person having 
completed  a course  of  instruction or training.  Of this amount, 
a sum,  as specified  in Annex I, must be spent on further 
courses  on reorientation  of production,  with  regard to 
production  practices  compatible  with landscape protection 
and management  of woodlands. 

The  measures  covered by this Article  shall  not include 
courses  of  instruction  or training  which form part of normal 
programmes  or systems of  agricultural  education  at secondary 
or higher  level. 

TITLE XI 

General  and financial provisions 

Article  29 

1.  Member  States  shall  forward to the Commission: 

- 

- 

drafts  of  all  laws, regulations  or administrative 
provisions  which  they  propose  to adopt pursuant to this 
Regulation,  including  those relating to Article  12, 

the texts of  any  existing provisions  which  may  make it 
possible  to implement  this Regulation. 

2.  When submitting,  pursuant to paragraph  1, drafts  of 
laws,  regulations  or administrative  provisions  or the texts  of 
existing  provisions, Member  States shall  also  submit an 
explanatory  memorandum  showing  the relationship at 
regional  level  between die measure in question  and  economic 
and structural  conditions  in the agricultural  sector. 

v=i 

The  Commission  shall  examine drafts forwarded  in 

3. 
accordance  with the first indent of paragraph  1 for the 
purpose  of  determining  whether, having regard to die 
objectives  of  this Regulation  and to the need for a proper 
connection  between  the various measures, such  drafts  comply 
with  the Regulation  and thus satisfy  the conditions for a 
financial  contribution  by the Community  to the measure 
refened  to in Article  1. 

4.  Member  States shall, on enactment of  any law, 
regulation  or administrative provision as refened  to in 
paragraph  3, forward  the text thereof to the Commission. 

Article  30 

With regard to provisions forwarded pursuant to the  second 
indent  of  Article 29  (1)  or to Article 29 (4), the  Commission 
shall  decide  within two  months of their being forwarded,  in 
accordance  with the procedure laid  down in Article  29(1), 
sub-paragraphs  2-5  of Regulation  (EEC) No  4253/88, 
whether,  in the light  of  their compliance  with this Regulation 
and having  regard to the objectives of this Regulation  and to 
the  need  to  ensure that the various measures are properly 
related, such provisions  satisfy  the conditions for  a financial 
contribution  by the  Community  to the common measure 
refened  to in  Article  1. 

Article 31 

1.  On the basis of  the  data refened  to in Article  29  (2) 
and to  ensure  consistency  with the allocation  of 
appropriations  between Member  States pursuant to Article  12 
(4)  of Regulation  (EEC) No  2052/88, Member  States shall 
establish  for  1994  to  1999  annual  expenditure  forecasts. 

Austria, Finland  and  Sweden  shall  establish  such forecasts  for 
1995-1999. 

These  forecasts  shall  cover all  expenditure financed  by  the 
EAGGF,  Guidance  Section, pursuant to: 

- 

this Regulation; 
Directive  72/159/EEC; 
Directive  72/160/EEC; 
Regulation  (EEC) No  1035/72; 
Regulation  (EEC) No  1360/78; 
Regulation  (EEC) No 389/82; 
Regulation  (EEC) No  1696/71. 

2.  Member  States shall  forward, together with the annual 
expenditure  forecasts,  an aid application  submitted  in 

* s^ 

accordance with Article  14 (1) of Regulation  (EEC) No 
4253/88. 

The  aid  application  shall  include  the  information  necessary  to 
enable the Commission  to make an evaluation  and, in 
particular, a description  of the proposed measures,  their 
scope, including  geographical  coverage, their  specific 
objectives,  an indication  of die bodies responsible  for 
carrying out die measures  and the  beneficiaries. 

To the extent that the Regulations refened  to in paragraph 1 
of this Article  and the national  implementing  provisions 
communicated  to  the  Commission  contain  a description  of  the 
measures  and  their specific objectives  it is not  necessary  for 
the information  relating  thereto  to  appear  in  the  aid 
application. 

In  any  event  the  aid  application  shall  include  a breakdown  of 
forecast  expenditure  between  the Regulations  refened  to  in 
paragraph  1 and,  in  the  case of Regulation  (EEC)  No 
2328/91,  between  the  various  titles  of  the Regulation  for  the 
entire period,  together  with  a breakdown  by  year  of  all 
expenditure. 

In  the  case  of  regions  covered  by  Objectives  1 and  6  as 

3. 
defined  in  Article  1 of  Regulation  (EEC) No  2052/88, the 
expenditure  forecasts  refened  to  in  paragraph  1 shall  be 
included  in  the  documents  relating  to the  programming 
refened  to  in  Article  8 (7)  of  the  said  Regulation  and  Article 
5  (2)  of  Regulation  (EEC) No  4253/88. 

In  the  case  of  regions  not  eligible  under  Objectives  1 

4. 
and  6, Member  States  shall  transmit  the  expenditure  forecasts 
refened  to  in  paragraph  1 by  30  April  1994  at  the  latest, 
distinguishing  the  information  relating  to  Objective  5 (b) 
areas  from  that  relating  to  the  rest  of  the  territory. 

Austria, Finland  and  Sweden  shall  communicate  such 
forecasts  within  three  months  of  their  accession. 

Where  appropriate,  Member  States  shall  draw  up  by  30  April 
at the  latest  an  update  of  the  expenditure  forecasts  and  of  the 
information  submitted  with  the  aid  applications. 

5. The  Commission  shall  adopt  detailed  rules  for  the 
application  of  this  Article,  in  accordance  with  the  procedure 
laid  down  in  Article  30. 

Article  32 

31 

1. 
Expenditure  incuned by  Member States in the 
framework  of  the  measures provided  for  in Articles 5 to  11 
and  13 to  28  shall  be  eligible  for  part-financing  under the 
Fund. 

In  the  case  of  regions not  eligible  under Objectives  1 

2. 
and 6  as defined  in Article  1 of Regulation  (EEC) 
No  2052/88,  the Commission  shall,  in accordance  with the 
procedure  laid  down in Article  30,  decide on the conditions 
for a financial contribution from die Community, including 
the rate of  community  part-financing,  in accordance with the 
criteria and limits  laid down in Article  13 of Regulation 
(EEC) No  2052/88,  so that consistency  is ensured with the 
allocation  of  the  appropriations  between Member States 
pursuant  to  the  second  subparagraph  of Article  12 (4) of the 
latter  Regulation. 

In  order  to  ensure  compliance  with  the resources  available  for 
the  whole  set  of  measures  refened  to  in  Article  2 of 
Regulation  (EEC)  No  4256/88, the  conditions  refened  to  in 
the  first  subparagraph  may  be  revised  in  accordance  with  the 
same  procedure. 

3.  Where  appropriate,  the  Commission  shall  adopt  detailed 
rules  for  the  application  of  this  Article  in  accordance  with  the 
procedure  laid  down  in  Article  30. 

Article  33 

Assistance  shall  be  paid  in  accordance  with  Article  21 

1. 
of  Regulation  (EEC)  No  4253/88; however,  in  addition  to  the 
conditions  listed  in  paragraph  4  of  the  said  Article,  payment 
of  the  balanpe  or  a  refund  shall  be  based  on: 

- 

- 

a  declaration  of  the  expenditure  effected  by  Member 
States  during  a  calendar  year,  and 
a  report  on  the  application  of  the  measures  during  the 
calendar  year  in  question,  prepared  in  accordance  with 
Article  25  (4)  of  the  said  Regulation, 

both  of  which  shall  be  submitted  to  the  Commission  before  1 
July  the  following  year. 

The  Commission  shall  in  accordance  with  the  procedure 

2. 
laid  down  in  Article  30  adopt  detailed  rules  for  the 
application  of  this  Article. 

Article  34 

Member  States  may  lay  down  additional  conditions  as 
regards  the  implementation  of  the  aid  measures  provided  for 

.^9L 

in this Regulation. 

Article 35 

The  Commission  shall  in  accordance  with the procedure  laid 
down  in Article  30  adopt detailed rules on monitoring  and 
assessment  to ensure in particular that the common  measures 
refened  to in Article 2 of Regulation  (EEC) No  4256/88  are 
carried out in  a manner consistent with the allocation  of 
appropriations between the Member States pursuant to  Article 
12 (4)  of Regulation  (EEC) No  2052/88. 

Article  36 

In  accordance  with the procedure laid down in Article  29  of 
Regulation  (EEC) No  4253/88, the Commission  may, on  its 
own  initiative  or  at the  request  of  a Member  State,  adjust  the 
amounts  laid  down  in  this Regulation  to take  account  of 
trends  in  inflation. 

Article  37 

This Regulation  shall  be  without  prejudice  to  the  right 

1. 
of  Member  States to  adopt  additional  aid  measures  in  the 
areas  covered  by  this Regulation,  with  the  exception  of  those 
covered  by  Articles  5 to  9,  11, 12 (4)  and  17, on  terms 
differing  from  those  laid  down  therein,  or  in  amounts 
exceeding  the  ceilings laid  down  therein,  provided  that 
Articles  92, 93  and  94  of  the Treaty  are not  infringed. 

Articles  92, 93  and  94  of  the Treaty,  with  the  exception 

2. 
of  Article  92  (2), shall  not  apply  to  the aid  measures 
governed  by  Articles  5 to  9,  11, 12 (4)  and  17 of  this 
Regulation. 

Article  38 

Checks  shall  be  carried  out  in  accordance  with  Article  23  of 
Regulation  (EEC) No 4253/88. 

Article  39 

The  following  special  provisions  shall  apply  to Portugal  until 
31  December  1995: 

(a) 

the  Commission  may, when  taking  decisions  as  refened 
to  in  Article  30, authorize  the Portuguese  Republic,  for 
the purposes  of fixing  the  reference  income  within  the 
meaning  of  Article  5 (3), to  apply  a  conection 
coefficient  to the  average  gross  income  of 
non-agricultural  workers throughout  Portuguese  , 

zi 

territory. This coefficient  may not exceed: 
-  1,7 for 1993, 
-  1,5 for 1994, 
-  1,3 for 1995; 

(b) 

the compensatory  allowance  within  the meaning the 
Article  17 may be granted to farmers who farm at least 
1 ha of utilized  agricultural  area in mainland Portugal. 

Article  40 

The following  special  provisions  shall  apply  to the new 
German Lander. 

(a)  When  family  holdings  are being  set up: 

- 

the condition  in  the first  indent  of  Article  5  (2) 
shall not  apply, 

-  Germany  may  grant the  aid  refened  to  in  Articles 

10 and  11 to  farmers  below  the  age  of  55 years. 
However,  aid  granted  to  farmers  over  the  age  of  40 
years  is not  eligible  under  the  Fund. 

(b)  The  conditions in  the second  subparagraph  of  Article  6 
(3)  and the  first  indent  of  Article  9 (4)  shall  not  apply 
to  aid  granted  in  the  context  of  the  creation  of  new 
family  holdings  or  the  restructuring  of  cooperative 
holdings  if  the number  of  dairy  cows  on  all the new  or 
restructured  holdings  does  not  exceed  the number  of 
dairy  cows held  previously  on  the old  holdings. 

The  conditions  laid  down  in  the pig production  sector 
in  Article  6 (4)  referring  to  the number  of pig  places 
and  in  the  second  indent  of  the  second  subparagraph  of 
Article  9 (4)  shall  not  apply  to  aid  granted  in  the 
context  of  the  creation  of  new  family  holdings  or  the 
restructuring  of  co-operative  holdings  if the number  of 
pig places  on  all  the  new  or  restructured  holdings  does 
not  exceed  the  number  of  pig  places previously  held  on 
the old  holdings. 

(c)  The level  of  investment  refened  to  in  the  first 

subparagraph  of  Article  7 (2)  shall  be  as specified  in 
Annex L 

The  ceiling  laid  down  in  the  second  indent  of  the 
second  subparagraph  of  Article  9 (4)  shall  be  increased 
to three  times  that volume  of  investment  per  holding. 

(d) 

In  the  context  of  the  restructuring  of  cooperative 
holdings, Article  9  (5)  shall  also  apply  to  associations 
which  do not  adopt  the  legal  form  of  a  cooperative. 

*<r 

Article 41 

1.  Regulation  (EEC) No  2328/91  and Directive 
75/268/EEC are hereby  repealed. 

2. 
References  to the repealed Regulation  and Directive 
shall  be  construed  as references to this Regulation  and should 
be read in  accordance  with the conelation table in Annex HI. 

Article  42 

This Regulation  shall  enter into force  on the seventh day 
following  its publication  in me Official Journal of the 
European Communities. 

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

3.^ 

ANNEX I 
TABLE OF AMOUNTS 

Article 

Paragraph 

Subject 

ECU 

level of  investment 

total  investment 

total income 

90  000 

per MWU 

ISO 000 

per holding 

90  000 

per MWU 

ISO 000 

per holding 

360  000 

per MWU 

720  000 

per holding 

2(») 

4(b) 

4(c) 

4 

5 

6 

1 

single  premium 

amount of  investment 

15 000 

45  000 

total investment  : between 

90  000 

per MWU 

and 

180  000 

per holding 

range: between 

and 

maximum  amount 

amount not to be  exceeded 

maximum  eligible total 

maximum 

700 

1  500 

22  500 

per group 

18  000 

per worker 

54  000 

per member of  staff 

750 

per holding 

allowance  not less than 

20.3 

per LU  or per hectare 

1(a)  1st sub-para. 

allowance  may not  exceed 

1(a) 2nd sub-para. 

allowance  may be  increased to 

10») (m) 

allowance  may not exceed 

total amount may be  mcreased 

may not exceed 

150 

180 

150 

180 

per LU and per hectare 

per LU and per hectare 

per hectare 

per hectare 

150  000 

per joint  investment project 

.750 

per hectare of  pasture or mountain 
pasture  improved  or equipped 

7  300 

per hectare irrigated 

up to a maximum  amount 

10  500 

per person 

of which 

4000 

spent on further  courses 

(c) 

the  level  of  investment 

173  038 

per MWU 

346  078 

per holding 

10 

12 

13 

14 

15 

16 

19 

20 

28 

40 

3* 

ANNEXn 

Table  of  livestock units (LU) 

Bulls, cows  and other bovine  animals over two years, equine animals over six  months 

1.0  LU 

Bovine  animals from six months to two years 

Sheep 

Goats 

0.6  LU 

0.15  LU 

0.15  LU 

The coefficients  relating to sheep and goats apply to all amounts per livestock unit as defined  in Articles 6  (5) 
and  19 (1). 

3^ 

ANNEX  m 
CORRELATION TABLE 

Regulation (EEC) No  2328/91 

Directive No 
75/268/EEC 

Present Regulation 

Article  1(1) 

Article  1(2) 

-Article  1(3) 

Title I 

Article 1 

Article  2 

Article3 

Title IV: 

Article 5  (IX  1«* sentence 

Title U: 

Article  4 

Articles 

Article  6 

Article  7 

Article  8 

Article  9 

Article  10 

Article  11 

Article  12 

Title  V: 

Article  13 

Article  14 

Article  15 

Article  16 

Tide  VI: 

Article  17  (1) 

Article  17  (2) 

Article  18 

Article  19 

Article  20 

Article 5 

Article  6 

Article  7 

Article  8 

Article  9 

ThlelU: 

Article  10 

Article  11 

Title IV: 

Article  12 

Title V: 

Article  13 

Tide VI: 

Article  14 

Thle VU: 

Article  15 

Title VHI: 

Article  16 

Article 1 

Title DC: 

Article  17  (1) 

Article  17  (2) 

Article  17  (3) 

Article  18 

Article  19 

Article  20 

Article  21 

Article 22  (1) 

Article 22  (2) 

Article  23 

Article  24 

Article  25 

Article 2 

Art  3(1) 

Art. 3  (2) 

Art. 3  (3) 

Art. 3 (4) 

Art. 3  (5) 

Title DC: 

Article 28  (IX  1st sub-par. • 

Title X: 

Article  26 

Article 28  (IX  2nd sub-par. 

Article 28  (2) and (3) 

Article  27 

Article  28 

Title X: 

Article  29 

Title XI: 

Article  29 

Article  30 

Article  31 

Article  32 

Article  33 

Article  34 

Article  30 

Article  31 

Article  32 

Article  33 

Article  34 

ZC 

Article 34a 

Artidc34b 

Article 35 

Article 36 

Article 37 

Article 38 

Article 40 

Article 41 

Annex I 

Annex II 

Article 35 

Article 36 

Article 37 

Article 38 

Article  39 

Article  40 

Article  41 

Article 42 

Annex I 

Annex II 

Annex  m 

39 

COUNCIL REGULATION (EC) No  ... 

of... 

on improving the processing and marketing conditions 
for  agricultural products. 

96/0045 

( CNS ) 

THE COUNCIL OF THE EUROPEAN UNION, 

Having regard to the Treaty establishing the European 
Community j 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 Council Regulation  (EEC) No 866/90 of 29 
March  1990 on improving the processing and marketing 
conditions for  agricultural products4 has been 
substantially  amended  several times; whereas it is 
advisable, in the interests of clarity and rationality,  to 
carry  out a consolidation of the said Regulation; 

Whereas Article  10 (1) of Council Regulation (EEC) 
No 4256/88 of  19 December  1988 laying down 
provisions  for implementing Regulation  (EEC) No 

1  OJ... 

2  OJ... 

»  OJ... 

4  OJ N° L 91 of 6.4.1995, p. 1 

CfO 

2052/88 as regards the EAGGF Gjuidance Section5 
provides for  a Council Decision on the forms of the 
Fund's contribution to measures to improve the 
conditions under which agricultural products are 
processed and marketed with a view  to achieving  the 
objectives  referred  to in  Council Regulation  (EEC)  No 
4253/88  of  19 December  1988 laying  down provisions 
for implementing Regulation  (EEC) No  2052/88  as 
regards coordination  of  the activities of  the  different 
Structural Funds between  themselves and with the 
operations of  the European Investment Bank and the 
other existing  financial  instruments6; 

Whereas the types of  investments  eligible  for a 
contribution from the EAGGF  Guidance Section 
(hereinafter  referred  to as the  'Fund')  should be 
defined,  taking account of  the current situation both on 
the agricultural  markets and in  the agriculture and  food 
sector,  as well  as the prospects  for  developing  outlets 
for  agricultural products; 

Whereas,  in order to ensure a coherent improvement in 
the processing  and marketing  of  agricultural products, 
financial  assistance from the Fund for investments in 
that field  should be made conditional  on the inclusion  of 
such investments in  sectoral plans containing  an in-
depth analysis of  the situation  in the sector and the 
proposed  improvement; 

Whereas,  for  such plans,  the Commission  should adopt 
sectoral  Community  support frameworks, to be drawn 
up in agreement with  the Member  States concerned, 
within  the framework of  the partnership,  taking 
account,  as appropriate,  of  the Community  support 
frameworks  adopted  for plans relating to Objectives 1 
and 5  (b) defined  in Article  1 of  Council  Regulation 
(EEC) No  2052/887; 

Whereas an effective  means  should be adopted  for 

5  OJ No L 374, 31.12.1988, p.25, as last amended by Regulation (EEC) No 2085/93 of 20 July 1993, 

OJ No L 193 of 31.7.1993, p.44. 

6  OJ No L 374, 31.  12.  1988, p.  1, as last amended by Council Regulation (EEC) No 2082/93  of 20 

July 1993, OJ No L  193 of 31.7.1993, p. 20. 

7  OJ No L 185,  15. 7.  1988, p. 9,  as last amended, on  Regulation  (EEC)  N°2085/93 

(OJ  N"L  193  of  31.7.1993,  p44) 

4-1 

ensuring  that Community action is consistent with the 
common agricultural policy; whereas the most  effective 
way  to achieve  this is to adopt selection criteria with 
which to determine which investments should be given 
priority  for  consideration; 

Whereas in order to ensure the necessary  transparency 
in the operations of  the Fund,  eligible expenditure 
should be  defined; 

Whereas it  must be ensured that investments are viable 
and that farmers have a share in the economic  benefits 
of  the action taken; 

Whereas application  of  the measure should in general 
be restricted  to the agricultural products listed in Annex 
II to the Treaty;  whereas in certain cases,  however, 
processed  products no longer included in the Annex 
may be of importance  to farmers in so far as they 
create new  market outlets and/or increase the added 
value of  the basic product; 

Whereas,  in connection  with the reform of the 
Structural Funds,  Regulation  (EEC) No  4256/88 
provides  for new  forms  of assistance by the Fund as 
regards improving  structures for processing and 
marketing  agricultural products; whereas general  rules 
should  therefore  be laid down for its implementation; 

Whereas,  tq allow  for  the differing  structural  situations 
in the various regions of the Community,  contribution 
rates  should be differentiated  by category of region; 

» 
Whereas,  to ensure harmony between the Community's 
actions and those of  the Member State and to ensure the 
additionality  of  Community  assistance,  the investments 
selected  for  financing  by the Fund should be co-
financed  by the Member State; 

Whereas provision  should be made for the possibility  of 
laying  down certain  specific  implementing  rules adapted 
to the special  nature of  the measure that is the subject 
of  this Regulation,  to ensure that it is  implemented 
effectively, 

HAS  ADOPTED  THIS REGULATION: 

< f* 

Article 1 

Objectives of  the common measure 

A  common  measure within the meaning of 
1. 
Article 2  (1) of  Regulation  (EEC) No 4256788 and 
under Objective 5  (a),  as defined  in Article  1 of 
Regulation  (EEC) No  2052/88,  is hereby introduced 
with the aim of  facilitating  the improvement and 
rationalization of  the treatment,  processing and 
marketing  of  agricultural products.  This measure shall 
also help to achieve Objectives  1,  6 and 5  (b) as set out 
in the said Article  1,  namely promoting the 
development  of  those regions in which development is 
lagging  behind and rural areas. 

To  facilitate  the improvement and rationalization 

2. 
of  the treatment,  processing  and marketing of 
agricultural products,  the Fund,  may contribute to the 
financing  of  investments  which  satisfy  at least one of 
the following  criteria: 

(a) 

(b) 

(c) 

(d) 

(e) 

helping  to guide production in keeping with 
foreseeable  market trends or encouraging  the 
development  of  new outlets for agricultural 
products,  in particular through facilitating  the 
production and marketing of  new products or of 
high-quality products,  including  organically-
grown products; 

relieving  the intervention  mechanisms of  the 
market organizations by furthering  long-term 
structural  improvement  where this is needed; 

being  located  in regions which are faced  with 
special problems in adapting  to the economic 
consequences  of  developments  on the 
agricultural  markets,  or being  of benefit  to such 
regions; 

helping  to improve or rationalize marketing 
channels  or processing procedures  for 
agricultural products; 

helping  to improve the quality,  presentation and 
preparation  of  products or encouraging  a better 
use of  by-products,  particularly by recycling 
waste; 

Uri 

(f) 

(g) 

contributing  to the adjustment of  sectors facing 
new  situations as a result of  the reform of  the 
common agricultural policy; 

helping  to facilitate  the adoption of  new 
technologies relating  to environmental 
protection; 

(h) 

encouraging  the improvement  and monitoring  of 
quality and of  health conditions. 

TTTLEI 

Plans,  Community  support frameworks  and  selection 
criteria 

Article 2 

Plans and Community  support  frameworks 

In order to ensure that the marketing and 

1. 
processing  sectors develop in a way  that is  consistent 
with  Community policy,  and particularly  with the 
common agricultural policy,  and to ensure the 
effectiveness  of  Community aid,  the financing  of 
investments  must take place within the framework of 
plans designed  to improve the structures relating  to the 
various products in question,  to be presented  by the 
Member  States, and on the basis of  the corresponding 
Community  support  frameworks. 

*• 

Measures under this Regulation  shall be included 

Î. 
in the plans drawn up and presented  by the Member 
States  for  the Objective  1 and 6 regions. 

In the case of  regions not eligible under 
3. 
Objectives  1 or 6,  the plans referred  to in paragraph 1 
shall be prepared  by  the Member  States with the 
information  relating  to Objective 5  (b) areas given 
separately from that relating  to the rest of  the territory. 

Article  3 

Content of  the plans 

1. 

The plans referred  to in Article 2  must include 

^ 

at least  the following  information: 

(a) 

(b) 

determination  of  the sectors covered  and the 
reasons  for  such determination; 

the initial  situation and the trends which can be 
inferred from it,  particularly  as regards: 

-  the importance of  agriculture and the 
prospective outlets  for agricultural products; 

-  the situation as regards the processing and 
marketing  of  agricultural products and in 
particular the existing  capacity of the 
undertakings concerned and their  geographical 
distribution; 

(c) 

the plan's aims and means: 

-  the estimated  time required  for  the execution 
of  the plan,  which in principle  should be 
between  three and six years; 

-  the needs to be met by the plan and the 
objectives  which it is intended to achieve,  in 
particular the capacity  to be reached and the 
implications  for  agricultural undertakings; 

-  any aid  measures established  in the sector 
covered  by  the plan; 

-  the means proposed  for  achieving  the 
objectives,  particularly  the total amount of 
investment and the financial participation  of  the 
Member State; 

-  the arrangements made to associate the 
competent environmental  authorities  designated 
by the Member  State in the preparation and 
implementation  of  the measures laid down  in  the 
plan and to ensure compliance with  Community 
rules on the environment. 

Article  4 

The plans corresponding  to the first phase of  execution 
shall  be  submitted  to the Commission by 30 April  1994 
at the latest. 

^r-

Article 5 

Austria,  Finland  and Sweden shall present the plans 
within three months from their accession. 

Article 6 

Updating  and new plans 

If the period initially  estimated by the Member State for 
implementation of  a plan has expired,  or if  economic 
developments  make it necessary for the plan to be 
adjusted,  an updated or new plan must, in addition to 
the information  referred  to in Article 3,  include a report 
showing: 

(a) 

(b) 

the progress  made in relation to the forecasts in 
the plan,  including  the public funds made 
available; 

a description  of  developments  in the situation 
regarding  the processing  and marketing of 
products,  showing  that there is a need for 
updating or  for a new plan. 

Article 7 

Community  support  frameworks 

The Community  support frameworks relating to 
1. 
the plans  submitted  to the Commission by the Member 
States  shall be prepared  in partnership,  in accordance 
with the procedure laid down in Article 29 of 
Regulation  (EEQ  No  4253/88,  so as to ensure 
consistency  with  the allocation of  appropriations 
between  the Member  States pursuant to the second 
subparagraph of  Article  12 (4) of  Regulation  (EEC)  No 
2052/88.  In the case of  regions  not covered by 
Objective  1,  the Community  support frameworks may 
be revised  annually,  in accordance  with the same 
procedure,  in particular  in order to keep within the 
resources available  for  all  the measures referred  to in 
Article 2  of  Regulation  (EEC) No  4256/88. 

In accordance with the principles laid down in 

2. 
Tide HI of Regulation  (EEC) No 4253/88,  Community 
support frameworks  shall include a statement of the 
priorities  for  Community  intervention,  the total amount 

CfG 

of  the financial  assistance chargeable to the Fund and 
an indicative figure  for  the rate of  aid envisaged as the 
Fund's contribution. 

In the case of  Objective  1 and 6 regions, the 

3. 
information  specified  in paragraph 2  shall be included 
in the Community  support frameworks in accordance 
with Article 8 (7) of  Regulation (EEC) No 2052/88. 

In the case of  regions not covered by  Objective 

4. 
1 and 6,  the Community  support frameworks must 
include two financial indicative tables,  one of which 
relates to Objective 5  (b) areas and the other to the rest 
of  the territory.' 

Article 8 

Selection  criteria 

1. 
Investments  eligible for assistance from the Fund 
under this Regulation  shall  meet selection criteria  fixing 
priorities and indicating  investments which may not 
receive  Community financing. 

The selection  criteria shall be drawn up in 

2. 
accordance with the guidelines of  the Community's 
policies,  particularly  the common agricultural policy. 

The selection  criteria and,  where applicable, 

3. 
amendments  thereto  shall be adopted by the 
Commission  in accordance  with the procedure laid 
down in Article 29  of  Regulation  (EEC) No 4253/88. 
The Decision  shall be communicated  to the Member 
States and published in  the Official  Journal of the 
European  Communities. 

TTILEII 

Operational programmes and global grants 

Article 9 

Forms of  assistance 

The Fund shall provide assistance in the implementation 
of  the measure which  is  the subject of  this Regulation 
by means  of: 

e ^ ^-

(a) 

the part-financing  of operational programmes 
within the meaning of  Article 5  (2)  (a) of 
Regulation  (EEC) No  2052/88, 

or 

(b) 

the provision of global grants within the meaning 
of  Article 5  (2)  (c) of Regulation  (EEC)  No 
2052/88. 

Article  10 

Applications  for aid and single programming  document 

1. 

Member  States shall: 

(a) 

(b) 

submit their aid applications in accordance with 
Article  14 (1) and (2)  of Regulation  (EEC)  No 
4253/88; 

communicate  to the Commission  the laws, 
regulations and administrative provisions  for 
implementing  the common  measure defined  in 
Article  1 of  this Regulation. 

Both for regions covered  by  Objectives  1 and  6 

2. 
and for  regions not covered by those Objectives, 
Member  States may submit a single programming 
document which includes all the information  required  in 
the plans and that required in the aid applications.  If 
they  do  so,  the Commission  shall adopt a single 
decision  on a single document in accordance with the 
last  subparagraph of  Article  10 (1)  of Regulation  (EEC) 
No  4253/88.' 

Article  11 

Eligible investments  and expenditure 

To be eligible for  aid from the Fund in the 

1. 
forms  listed  in Article 9,  investments  must relate to: 

rationalizing  or developing  the preparation, 
preservation,  treatment and processing  of 
agricultural products or recycling  of  by-products 
or manufacturing  waste and eliminating  or 
treating  waste; 

W 

improving  marketing channels, including the 
transparency  of price formation, 

applying  new processing  techniques,  including 
the development  of new products and by-
products,  or opening up new  markets and 
innovative  investments, 

improving product quality. 

Special priority  may be given to investments to 

2. 
improve the marketing  structures for agricultural 
products, particularly  if  such investments encourage the 
development  of  new  outlets by facilitating  the marketing 
of  new products  or of  high-quality products having 
characteristics  which  comply  with the Community's 
policy  on foodstuffs,  including  organically-grown 
products,  in accordance in particular with Council 
Regulation  (EEC)  No  2092/91  of  24 June  1991 on 
organic production  of  agricultural products and 
indications  referring  thereto on agricultural products 
and  foodstuffs8. 

3. 
Eligible  expenditure in respect of the 
investments  referred  to in paragraph  1 may include: 

(a) 

(b) 

(c) 

the construction  and acquisition  of immovable 
property,  with  the exception  of land purchase; 

new  machinery  and equipment,  including 
computer  software  and programmes; 

general  costs,  such as architects',  engineers' and 
consultants'  fees and feasibility  studies,  up to a 
ceiling  of  12  % of  the cost  referred  to in (a) and 
(b). 

Article  12 

Products concerned  and participation  of  the producers 

1. 
Investments  must contribute  to improving  the 
situation  of  the basic  agricultural  production  sector in 
question;  in particular,  having regard  to the  specific 
nature of  each  sector,  they  must guarantee the 

OJ No L 198, 22. 7.  1991, p. 1. 

Vf 

producers of  the basic products an adequate and lasting 
share in the resulting economic  benefits. 

The investments  must concern the products listed 

2. 
in Annex II to the Treaty,  to the exclusion of  those 
covered by  Council Regulation (EEC) No 4042/89  of 
19 December  1989 on the improvement of the 
conditions under which fishery  and aquaculture products 
are processed and marketed9.  However,  investments 
concerning  the products of  CN codes 4502, 4503 and 
4504  shall also be allowed. 

In accordance with  the procedure laid down in Article 
29  of  Regulation  (EEC) No 4253/88,  the Commission 
may accept investments relating  to other products 
provided: 

the aid recipients have direct contractual links 
with the producers of  the basic  agricultural 
products, 

or 

the products in question have been processed 
from products listed in Annex n  to the Treaty 
and proper justification  can be provided that 
links exist proving  the benefit  to the producers 
of  the basic agricultural products. 

Sufficient  evidence must be given that the 

3. 
investments  will  be profitable. 

• 

Article  13 

Ineligible  investments 

The  following  investments  shall be excluded: 

investments  at the retail level, 

investments  in  the processing  or marketing  of 
products from third countries. 

Article  14 

OJ No L 388, 30.  12.  1989, p.  1. 

SO 

Récipients 

Aid from the Fund shall be granted to the natural or 
legal persons,  or groups thereof,  who are ultimately 
responsible  for financing the investments. 

Article  15 

Decision  to grant aid and budget commitment 

The Commission  shall decide on the granting  of 

1. 
aid from the Fund in accordance with Article  14 of 
Regulation  (EEC) No 4253/88 and,  where appropriate, 
the second and third subparagraphs of Article  10 (1)  of 
the said  Regulation 

2. 
The decision  referred  to in paragraph  1 shall  be 
communicated  to the authority referred  to in Article  14 
(1)  of  Regulation No 4253/88  or to the intermediary 
referred  to in Article  16 (1) of  that Regulation,  and to 
the Member  State concerned. 

TTTLEin 

Financial  and general provisions 

Article  16 

Aid rates and rules 

Aid from the Fund may not exceed,  in  relation 

1. 
to the eligible costs of  the selected  investments: 

(a) 

50  %  in the Objective  1 and 6 regions  referred 
to in point  1 of  Article  1 of  Regulation  (EEC) 
No  2052/88; 

(b) 

30  %  in other regions. 

Aid from the Fund shall in general  take the  form 

2. 
of  capital grants.  If other forms of  assistance are used, 
they  must not exceed  the said  capital grant equivalent. 

The Member  States concerned  must undertake  to 

3. 
participate in financing the investments  selected  as 
eligible  for  assistance from the Fund,  to at least 5  % of 
the eligible costs. 

si 

The financial contribution by the recipients in 

4. 
relation to the eligible costs of the selected investments 
must be not less than: 

(a) 

25  %  in the Objective  1 and 6 regions referred 
to in point  1 of Article 1 of Regulation (EEC) 
No 2052/88; 

(b) 

45  %  in other regions. 

5.  Within the field  of application of this 
Regulation, Member States may take aid measures 
which are subject to conditions or rules concerning 
granting which differ from those provided for in this 
Regulation, or,  where the amounts of aid exceed the 
ceilings specified  herein, on condition that such 
measures comply with Articles 92 to 94 of the Treaty. 
Article 17 

Procedures for payment of the aid 

Payment of advances or balances to be carried 
1. 
out in accordance with Article 21 of Regulation (EEC) 
No 4253/88  shall be made to the authority designated in 
accordance with Article  14 (1) of the said Regulation 
or,  where applicable,  to the intermediary referred to in 
Article  16 (1) of that Regulation, the Member States 
concerned being duly informed of these payments. 

The authority or intermediary referred to in 

2. 
paragraph 1 shall check the supporting documents 
relating to the expenditure of the final recipients and 
ensure that they are in order before paying the 
Community contribution. It shall also make on-the-spot 
checks to verify  that the information contained in the 
application corresponds to the true situation. 

3. 
At the end of each quarter the authority or 
intermediary referred to in paragraph  1 shall forward to 
the Commission a statement of the payments made to 
recipients. 

An implementation report shall be sent to the 

4. 
Commission every year. 

Article 18 

Checks 

Ç-L 

Checks shall  be carried out in accordance  with  Article 
23 of Regulation  (EEC) No  4253/88. 

Article  19 

Transitional  provisions 

The operational programmes introduced at the 
1. 
latest by 31 December  1993 under this Regulation and 
which have not been granted  aid from the fund  may be 
included in  the operational programmes to be  financed 
during  the period  1994/1999  provided  they  fulfil  the 
criteria and conditions  stipulated in this Regulation and 
provided  they  fall  within a Community  support 
framework.  Article  15  (2)  of  Regulation  (EEC) No 
4253/88  shall  not apply. 

Investments  eligible  under this Regulation and 

2. 
for  which  work has begun between  1 July  1993 and 31 
December  1993 and which  it has not been possible to 
insert into  the operational  programmes  referred  to in 
paragraph  1,  may  be financed during  the period 
1994/1999,  provided  they  fulfil  the criteria and 
conditions  stipulated  in  this Regulation  and provided 
they are covered  by a request  for  aid  to be submitted by 
the Member  State not later than 30 April  1994. 

The criteria  for  choice referred  to in Article  8 of 

3. 
this Regulation  applicable  to the operational 
programmes referred  to in paragraph  1 shall be those in 
force  at the date of  receipt of  the request  for aid. ' 

Article  20 

Application 

The  Commission  shall adopt detailed  rules  for the 
application  of  this Regulation  in accordance  with the 
procedure laid down  in Article 29  (1)  sub-paragraphs  2 
to 5  of Regulation  (EEC)  No  4253/88. 

Article 21 

1. 

Regulation  (EEC)  No  866/90  is  hereby repealed. 

References  to the repealed Regulation  shall be 

2. 
construed  as references  to this Regulation  and should be 
read in accordance  with  the correlation  table in the 

£3 

Annex. 

Article 22 

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 a t . ..  , 

1996. 

For  the  Council 

The President 

s<t 

ANNEX 

CORRELATION TABLE 

r  Regulation (EEC) No 866/90 

This Regulation 

Article 1 

Article 2 

Articled  (1) 

Article 3 (2)  1st indent 

Article 3 (2) 2nd indent 

Article 6 

Article 7 

Article 8 

Article 9 

Article 10 

Article 10a 

Article 11 

Article 12 

Article 13 

Article 14 

Article 15 

Article 16 

Article 17 

Article 18 

Article 19 

Article 23 

Article 24 

Article 1 

Article 2 

Article 3 

Article 4 

Article 5 

Article 6 

Article 7 

Article 8 

Article 9 

Article 10 (1) 

Article 10 (2) 

Article 11 

Article 12 

Article 13 

Article 14 

Article 15 

Article 16 

Article 17 

Article 18 

Article 19 

Article 20 

Article 21 

Article 22 

sr 

COUNCIL REGULATION  (EC)  No..../96 

of..... 

on producer groups and associations thereof 

9 6 / 0 0 46 

( CNS ) 

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  Council  Regulation  (EEC) No  1360/78  of 
19 June  1978  on producer groups and associations 
thereof4  has been  substantially  amended  several 
times; whereas it is  advisable,  in the interests of 
clarity  and rationality,  to carry out a consolidation 
of  the said Regulation; 

Whereas a feature  of  the Community is the 
variation  in the situation regarding  the supply and 
marketing  of  agricultural  products in the  different 
regions; 

Whereas  the persistence of  the above deficiencies  is 
an obstacle  to the fulfilment  of  the objectives  of 

1  OJ No... 

2  OJNo 

3  OJNo... 

4  OJ No L 166 of 23.6.1978, p.l,  as last amended by Regulation (EEC) No 746/93 of  17 March 1993 

(OJ No L 77 of 31.3.1993, p.14). 

se 

Article 39  (  1) of  the Treaty in as much as it 
makes it difficult  to increase agricultural 
productivity,  to promote technical progress,  to 
ensure rational development  of  agricultural 
production and optimum use of  the factors  of 
production,  to ensure a fair  standard of living  for 
the agricultural community  and to stabilize 
markets; whereas,  furthermore,  this situation  is 
likely  to affect  the level of prices to consumers; 

Whereas this situation can be remedied by grouping 
farmers  so that the economic process can be 
influenced  by common  measures designed  to 
centralize supply and adapt production  to market 
requirements;  whereas such grouping  should 
therefore be encouraged  henceforth  the regions 
concerned  without however preventing the 
arrangements envisaged being  extended to other 
regions  which give proof of  similar requirements; 

Whereas,  however,  steps should be taken to 
ensure,  by  means of  a system of recognition,  that 
the grouping of  holdings  takes place within bodies 
with the appropriate production and marketing 
discipline,  which offer  sufficient  guarantees as to 
the stability and effectiveness  of  their action and do 
not,  by virtue of  their position  and their economic 
activity,  conflict  with the operation of  the common 
market and the general objectives of  the Treaty; 

Whereas in order to promote greater  centralization 
of  supply  than can be achieved by one group, 
encouragement  should be given not only to the 
grouping  of  farmers within producer groups but 
also  to the formation  of  associations  of  such 
groups; 

Whereas the granting of  aid to cover part of  the 
formation  and operating  expenses  would be an 
appropriate incentive  for the creation of  groups and 
associations  thereof and for  the adaptation of 
existing  producer organizations  to the conditions 
laid down; 

Whereas the aid granted to the associations  should 
however  be limited  to an overall  maximum  sum  so 
as  to take account of  the fact  that each of the 
groups which belong  to such associations has 

JJ<V 

already received  or is  still receiving  aid  for 
formation and operation; 

Whereas in order to guarantee that the proposed 
system is implemented  in all  those regions of the 
Community  where it is considered necessary,  the 
granting  of aid to groups and associations  thereof 
should  be made obligatory;  whereas maximum 
amounts should be laid down for  such aid although 
it should be made possible to exceed  these limits in 
the case of certain aid for regions or sectors 
encountering  special  difficulties; 

Whereas it is appropriate to stipulate that,  for the 
information  of  the Member States and of  all those 
concerned,  a list of  those groups and associations 
thereof  which  were granted recognition  or from 
which  recognition  was withdrawn during the 
preceding  year  should  be published  at the beginning 
of  each year; 

Whereas all the proposed  measures are in the 
Community interest and are designed  to achieve the 
objectives outlined  in Article 39  (  1) ( a) of  the 
Treaty,  including  the structural changes necessary 
for the proper  functioning  of  the common  market; 
whereas  they therefore constitute a common 
measure within  the meaning of  article 2  of  Council 
Regulation  (EEC)  No  4256/885; 

Whereas the Commission  must be able to ensure 
that the provisions  introduced by the Member 
"States to apply  this common  measure fulfil  the 
relevant  conditions;  whereas it should also be able 
to assess  each year the practical results of  the 
implementation  of  the common  measure; 

Whereas aid from the European Agricultural 
Guidance and Guarantee Fund,  hereinafter  referred 
to as  'the Fund',  can help to improve the supply 
structure for  agricultural produce in regions  where 
such an improvement  is essential,  it being  covered 
by  the provisions of  annual expenditure  stipulated 
in Article  31  (1)  [old Regulation  (EEC)  No 

OJ No L 374 of 31.12.1988, p.25, as last amended by Regulation (EEQ No 2085/93 of 20 July 1993 
(OJ No L 193 of 31.7.1993, p.44). 

J 

S  *-

2328/91]; 

Whereas to facilitate  the future implementation  of 
certain proposed  measures,  a procedure establishing 
close cooperation  between the Member States and 
the Commission  should be introduced; whereas the 
appropriate body  for  ensuring  such cooperation is 
the Standing  Committee on Agricultural Structures, 

HAS  ADOPTED  THIS REGULATION : 

Article 1 

To remedy  the structural deficiencies  affecting  the 
supply and  marketing  of agricultural products in 
certain  regions,  resulting from insufficient  producer 
organization,  this Regulation  hereby introduces a 
system  to encourage  the formation  of producer 
groups and associations  thereof  in those regions. 

Title I 

Scope 

Article  2 

This Regulation  shall  apply: 

in Italy, 

in the French regions  of 
Languedoc-Roussillon,  Provence-Cote 
d'Azur,  Midi-Pyrenees,  Corsica,  the 
departments  of  Drome and Ardeche and in 
the French  Overseas Departments, 

in Belgium, 

in  Greece, 

in Spain, 

in Portugal, 

in Ireland, 

in Austria, 

5  e? 

in Finland. 

Article  3 

1. 
In the case of Italy,  Greece,  Spain, 
Portugal,  Austria and Finland,  this Regulation shall 
apply to the following  products: 

the products of  the soil and the livestock 
products listed in Annex H to the Treaty, 
excluding: 

products referred  to in Article  1 (2) 
of  Regulation  (EEC) No  1035/72 on 
the common organization of the 
market in fruit and vegetables6, 

hops  (CN code  1210), 

silkworms  (CN code 0106 00 99), 

the processed  agricultural products listed in 
Annex I hereto. 

In the case of  France,  this Regulation shall 

2. 
apply: 

wine of fresh grapes and grape must in 
fermentation  or with fermentation arrested, 
including  mistelles  (CN codes ex 2204  10, 
2204  21,  ex  2204  29  and 2204  30  10), in 
Languedoc-Roussillon,  Provence-Côte 
d'Azur,  Midi-Pyrénées  and Corsica, 

plants used in perfumery  and lavender  (CN 
code ex  1211) in Provence-Côte d'Azur and 
the departments of  Drome and Ardèche, 

table olives  (CN code 0710  80  10) in 
Languedoc-Roussillon,  Provence-Côte 
d'Azur,  Corsica and the department of 
Drome, 

live bovine animals  (CN code 0102); beef 

OJ No L118, 20. 5.  1972, p. 1., as last amended by Regulation (EEC) No 1363/95 of 16.6.1995, p.8. 

&o 

and veal  carcases or quarters (CN codes ex 
0201  and ex  0202); live trees and other 
plants; bulbs,  roots and the like; cut .flowers 
and ornamental foliage  (Chapter 6 of  the 
combined  nomenclature); fresh fruit and 
vegetables  (Chapters 7 and 8 of the 
combined  nomenclature and not covered by 
Regulation  (EEC) No  1035/72); vanilla  (CN 
code 0905  00 00); and plants (CN code 
1211),  in the overseas departments, 

olive oil  (CN code  1509) in the metropolitan 
areas listed  in the second indent of  Article 
2. 

In the case of Belgium,  this Regulation  shall 

3. 
apply to: 

-  * 

cereals  (CN codes  1001  to  1005,  0709  90 
60 and 0712  90  19), 

live bovine animals (CN code 0102,  with 
the exception  of  CN code 0102 90 90), 

piglets  (CN  code ex 0103), 

lucerne  (CN code ex  1214). 

In the case of  Ireland,  this Regulation  shall 

4. 
apply  to the following  products: 

cereals  (CN codes  1001,  1003 and  1004), 

potatoes  (CN  code 0701  90), 

live bovine animals  (CN code 0102,  with 
the exception  of  CN code 0102 90 90) and 
beef and veal  carcases and quarters (CN 
codes  ex  0201  and ex 0202), 

live  sheep and goats (CN code 0104) and 
sheep and goat carcases  (CN code ex 
0204).' 

TTTLEII 

Recognition  of  producer groups and associations 

c t 

thereof 

Article 4 

The Member  States  shall recognize producer 
groups and associations thereof,  including those in 
existence when  this regulation comes into force: 

(a) 

which apply  for  recognition; 

(b) 

which  fulfil  the conditions listed in articles 
5  and  6; 

(c) 

provided  that,  in the case of groups: 

at least two-thirds of  the members 
operate undertakings in the regions 
referred  to in Article 2, 

at least half of  the produce marketed 
in  accordance with Article 6  (1)  (c) 
comes from the regions referred to 
in  article 2. 

Recognition  shall  cover  the activities relating to 
the production and marketing  of  the products 
referred  to in Article 3  for each of  the regions to 
which  this regulation applies. 

Article 5 

1. 

Producer  groups shall : 

be  set up for  the purpose of jointly adapting 
the production  and output of  the producers 
who are members of  such groups to market 
requirements; 

consist  of: 

individual  producers,  or 

individual producers and 
organizations  for producing or 
increasing  returns from agricultural 
products,  consisting  solely  of 
agricultural producers. 

Cz. 

'Producer'  shall be taken to mean any person 
working an agricultural holding  situated within 
Community  territory: 

who produces the products of  the soil and 
livestock products listed in Article 3,  or 

who,  while being a primary producer, 
produces the processed products listed in 
Article 3. 

The Member States may,  when their 
2. 
national provisions  so provide,  recognize producer 
groups  which also include persons other than those 
covered  by paragraph  1.  In such cases the groups' 
statutes  must ensure that the members covered by 
paragraph  1 retain control over the groups and any 
decisions  the latter may take. 

Associations  shall consist of  recognized 

3. 
producer groups and shall pursue the same 
objectives  as those groups,  but on a larger scale. 

Article 6 

All  producer groups or associations thereof 
1. 
shall,  within  the limits of  the sector of  the product 
or products in respect of  which they are 
recognized,  fulfil  the following  general conditions: 

(a) 

they  shall,  through the activities in respect 
of  which they request recognition, 
contribute to the achievement  of the 
objectives  of  Article 39 of  the Treaty; 

(b) 

they  shall  decide on and apply in respect of 
persons  covered  by Article 5  (1): 

common rules on production,  in 
particular on product quality or use 
of  organic practices; 

common  rules  for placing  goods on 
the market; 

rules on production  information, 
with particular regard to harvesting 
and availability; 

Ce!> 

(c) 

the articles of association  shall at least 
require producers who are members of 
groups and recognized producer groups that 
are members of the association  to place on 
the market all of the production  for 
marketing of  the products in respect of 
which they belong to the group or 
association,  in accordance with the rules on 
supply and placing on the market drawn up 
and supervised by the group or by the 
association. 

Member States may authorize this obligation 
to be replaced by an obligation  to have all 
the production for  marketing  of  the products 
in respect of  which they are recognized 
placed on the market by the group or by the 
assocition  either in their name and on their 
behalf,  or on their behalf but in the name of 
the group or the association,  or in the name 
and on behalf of  the group or the 
association.  The group or association  may 
however  authorize its members to place part 
of  their production on the market in the 
manner specified  in the first  subparagraph. 

As  far as producer groups are concerned, 
these obligations  shall not apply  to that part 
of  their production for  which producers 
have included  sales contracts or granted 
options before  they join the group,  provided 
that the group was informed  before they 
joined  of  the scope and the duration  of  the 
obligations contracted; 

(d) 

the articles of association  shall  include 
provisions  to ensure that the members of a 
group or of  an association  who wish to 
withdraw from membership  may do so: 

after  they have been  members of  the 
group or of  the association  for a 
minimum of  three years  following 
recognition  thereof,  and 

on condition that they inform  the 
group or the association in writing  of 
their intention to withdraw  not less 

é<^ 

than  12 months before  so doing. 

These provisions  shall apply  without 
prejudice  to national laws or provisions 
designed  to protect the group or association 
or their creditors,  in specified  cases,  against 
any financial consequences  which might 
result from the withdrawal of a member or 
to preclude withdrawal  of a member in the 
course of  the financial year; 

they  shall  give proof of  adequate economic 
activity; 

without prejudice  to Article 4  (c),  they shall 
exclude,  as regards their constitution and 
the whole  range of  their activities,  any 
discrimination  which runs counter to the 
operation  of  the common  market and the 
achievement  of  the general  objectives of the 
Treaty  and,  in particular,  any  discrimination 
connected  with  the nationality  or place of 
establishment: 

of producers or groups which may 
become  members,  or 

of  their economic partners; 

they  shall  have legal personality  or 
sufficient  legal  capacity  to exercise rights 
and be subject to obligations  in accordance 
with national laws; 

they  shall keep  separate accounts  for 
activities  in respect of  which  they are 
recognized.  These separate accounts and 
those relating  to any other activities of the 
group or association  may be inspected  with 
a view  to ascertaining  whether the condition 
laid  down in  (e) is  still  fulfilled,  calculating 
the amount of  aid and ascertaining  the use 
which  has been  made of  it; 

(e) 

(f) 

(g) 

(h) 

(i) 

they  shall not hold  a dominant position in 
the common  market,  unless this is  necessary 
for  the pursuit of  the objectives laid down in 
Article  39  of  the Treaty; 

tr 

(j) 

producer groups to which  organizations 
referred  to in Article 5  (1),  second indent, 
also belong  shall also  make it compulsory  in 
their statutes for  the latter to ensure that 
their members comply  with the conditions in 
(b) and (c)  at the latest as from the date : 

on which recognition  takes effect,  or 

on which they join if  this is later 
than the date of  recognition. 

2. 
The placing  of  goods on the market for the 
purposes of paragraph  1 (b) and (c)  shall cover the 
following  operations: 

centralization  of  supply, 

preparation  for  sale, 

supply to bulk buyers. 

Detailed  rules of  application  shall be 

3. 
adopted,  in accordance with the procedure laid 
down in Article 29  (1)  2nd to 5th intents of 
Regulation  (EEC)  No  4253/887,  concerning: 

the criteria which the common rules 
provided  for  in paragraph  1 (b)  shall meet, 
where necessary, 

* 

the minimum cultivated  area,  turnover or 
volume of production  for  the product or 
product group in question coming from the 
members whom,  under the terms of 
paragraph  1 (a),  the groups are to represent, 
and if  necessary  the minimum number of 
members  they  must have, 

the area covered,  including  the minimum 
crop area,  turnover and proportion of  the 
national volume of production  for the 
product  or product group in  question 

OJ No L 374, 31.12.1988, p.  1, as last modified by Regulation (EEC) No 2082/93  of 20 July 1993 
(OJ No L 193 of 31.7.1993, p.20). 

&£ 

coming from the groups which the 
associations are to represent, and, if 
necessary,  the minimum number of 
producer groups in the membership. 

Article 7 

/ 

The Member States: 

shall take a decision on recognition within 
three months of the date on which 
recognition  is requested, 

shall make their decision known to the 
Commission within two months. 

Article 8 

Recognition of a producer group or of an 
association  shall be withdrawn: 

(a) 

(b) 

(c) 

(d) 

if the conditions for  recognition laid down 
in this regulation were not or are no longer 
fulfilled; 

if such recognition is based on erroneous 
information; 

if the group or association obtained 
recognition  by irregular means; 

if the Commission decides that Article 85 
(1) of the Treaty applies to the agreements, 
decisions and practices referred  to in Article 
17 of this regulation. 

In the case provided  for in (c), withdrawal of 
recognition  shall have retroactive effect  and aid 
granted pursuant to Article  10 shall be recovered. 

Article 9 

At the beginning of each year the Commission shall 
ensure that the list of producer groups and 
associations recognized  during the previous year, 
divided according to products or groups of 
products, is published in the Official  Journal of the 
European  Communities. 

<S3-

It shall also ensure that withdrawals of  recognition 
decided  on during  the previous year are published. 

TITLE  m 

Aid  to producer  groups and associations thereof 

Article 10 

1. 
The Member  States concerned shall grant 
aid to recognized  groups and associations,  during 
the three years following  the date of their 
recognition,  to encourage their formation and to 
facilitate  their operation.  The amount of  such aid 
may  be paid  over  five  years. 

2. 
The aid  granted  to producer groups 
recognized  after  1 July  1985  for  the first five years 
following  the date on which  they are recognized: 

shall,  for  the first, second,  third,  fourth and 
fifth years be respectively  a maximum of  5 
%, 5  %, 4  %, 3  %  and 2  %  of  the value of 
the products coming from the members, as 
defined  in the  second  indent of Article 5 
(1),  in respect  of  which they are recognized 
and  which  are marketed, 

may not exceed  the actual cost of  setting up 
and  running  the group, 

shall be paid  In annual instalments over at 
the  most  seven  years following  the date of 
recognition.' 

3. 

The amount of  aid granted  to associations: 

shall be equal  to a maximum of  60  %, 40 
%  and 20  % of  the actual  formation and 
operating  expenses  for  the first second and 
third  year  respectively; 

may  not,  however,  exceed  a total of ECU 
120 000. 

Larger amounts  than those provided  for in 

4. 
paragraphs 2  and 3  may be fixed for a  specified 
period by  the Council,  acting by a  qualified 

QQ 

majority  on a proposal from the Commission,  in 
respect of  certain regions and certain products 
encountering  special  difficulties  in adapting  to the 
conditions and economic implications of the 
common  agricultural  policy. 

For Portugal  the percentages  set out in 

5. 
paragraph  2 first indent shall  be doubled and those 
set out in paragraph 3 first indent shall be  100,  80 
and 40. 

Article  11 

The aid provided  for in Article  10 shall be 

1. 
granted  only: 

in  so  far as a group or an association has 
not already  received  aid under national provisions, 

in proportion  to the actual additional 
expenditure on formation  and operation 
incurred  in  complying  with the requirements 
of  Article  6,  in the case of producer groups 
or associations already in existence or set up 
by producers  who are members of  existing 
organizations. 

The value of  the products referred  to in 

2. 
Article  10 (2) first indent shall be calculated  for 
each  year as a flat  rate on the basis of : 

the annual volume placed on the market in 
accordance  with Article 6  (1)  (c), 

the average producer prices obtained. 

The necessary  definitions  of actual 
3. 
formation  and operating  expenditure within the 
meaning  of  Article  10 (2)  second  indent and (3) 
first indent shall be adopted in accordance with the 
procedure  laid  down in Article 29  (1)  second to 
fifth indent of  Regulation  (EEC) No  4253/88. 

TITLE IV 

Financial  and general provisions 

e>? 

Article  12 

The set of  measures provided  for  in this 

1. 
Regulation  shall constitute a common  measure 
within the meaning of Article 2  (1) of  Regulation 
(EEC) No 4256788*. 

Article 3 of Regulation  (EC) No  ..../96* 

2. 
shall apply. 

Article  13 

Before  1 January  1997 the Commission  shall 
submit to the Council,  on the basis of information 
supplied by the Member States,  a report on the 
results of  the implementation  of  this common 
measure. 

Article  14 

The measures provided  for in Article  10 and the 
aid resulting from the application of  Regulation 
(EEC) No  389/8210 shall be covered by the annual 
expenditure  forecasts referred  to in  Article 31  (1) 
of  Regulation  (EEC) No  ..../96  [old R.  2328/91]. 

Article  15 

Assistance  shall be paid in accordance with 

1. 
Article 21  of  Regulation  (EEC) No  4253/88. 
However,  in addition to the conditions  listed in 
paragraph 4  of  the said Article,  payment of the 
balance or refund  shall be based on: 

a  declaration  of  the expenditure effected  by 
Member  States during  a calendar year, 

and 

a report on the application  of  the measures 
during  the calendar  year in question, 

t 

9 

OJ No L 374, 31.12.1988, p. 25. 

[old R.2328J 

10 

OJ No L 51 of 23.2.1982,  p.l. 

>e> 

prepared in accordance with Article 25 (4) 
of the said Regulation, 

which shall be submitted to the Commission before 
1 July of the following year. 

Article 16 

The Commission shall adopt detailed rules for the 
application of this Article after consulting the 
Committee referred to in Article 29 (1) second to 
fifth indent of Regulation  (EEC) No 4253/88. 

Article 17 

Should  the Commission  decide, pursuant to Article 
2 of Regulation No 26 applying certain rules of 
competition  to production  of and trade in 
agricultural products11,  that Article 85 (1) of the 
Treaty  is applicable to agreements,  decisions or 
concerted  practices: 

by which persons referred  to in Article 5 
(1),  second indent, join  together in a group 
fulfilling  the conditions laid down in this 
regulation,  or groups form  an association 
fulfilling  the conditions of  this Regulation, 

or by which  the common rules referred  to 
in Article 6 (1) (b) are adopted  or executed, 

a decision  relating  thereto shall apply only from the 
date on which the Commission reached  its 
conclusion. 

Article 18 

This Regulation  shall not prejudice the right of the 
Member States to adopt,  within the sphere of this 
Regulation,  additional aid  measures,  the conditions 
or procedures for  the granting of which differ  from 
those laid  down in  this Regulation  or  the amounts 
of which exceed  the upper limits laid  down herein, 
provided  that these measures are taken in 

OJ No  30 of  20.4.1962,  p.993/62. 

yi 

' '-~t-  r.-*T^. ~/f*????-p™- -

accordance with  Articles 92,  93  and 94 of  the 
Treaty. 

Article  19 

The Member States shall notify  to the Commission: 

the laws,  regulations and administrative 
provisions  concerning  the application of this 
Regulation  not later than one month  after 
they have been adopted; 

a report on  the results of  the application  of 
this Regulation  each year before 31 March. 

Article  20 

Regulation  (EEC) No  1360/78  is  hereby 

1. 
repealed. 

References  to the repealed  Regulation  shall 

2. 
be construed  as references  to this Regulation and 
should  be read in accordance with  the correlation 
table in Annex  H. 

Article 21 

This Regulation  shall enter into force  on the 
seventh  day  following  its publication  in the Official 
Journal  of the European Communities. 

Done a t . ..  , 

.....  1996. 

For  the  Council 

The  President 

y st 

ANNEXI 

list  of processed products referred to in Article 3 (1) 

CN  code 

Description 

ex 0201  1 
ex 0202  J 

ex  0203 

ex 0204 

Meat: 

- of bovine animals,  in  quarters 

- of  swine,  in  half-carcases 

-  of  sheep,  in whole  carcases 

ex 0205 00 00 

- of  horses 

ex  0206 

Edible offal  of bovine animals,  swine and  sheep 

ex  0207 
with  the exception  of 
0207  31  00 
0207  39 90  and 
0207  50 

0207  31 00 
0207  39 
0207  50 
0210  90  71 
0210  90 79 

0208  10  10 

0406 

ex  1214  10 00 
ex  1214  90  90 

' 

1509 
1510 00 

2204  30  10 

2204  10 
2204  21 
2204  29 

Meat and  edible offal  (with  the exception  of  livers)  of  the  poultry 
of  CN  code 0105,  fresh,  chilled  or  frozen 

Poultry  livers,  fresh,  chilled,  frozen,  salted  or  in  brine 

• 

Meat of  domestic  rabbits 

Cheese and  curd 

Dehydrated  fodder 

Olive oil  •-

Grape must,  in  fermentation  or with  fermentation  arrested 
otherwise  than by  addition  of  alcohol 

Wine of  fresh  grapes;  grape  must with  fermentation  arrested  by 
the addition  of  alcohol  (including  mistelles) 

^ 

ANNEXA 

CORRELATION TABLE 

Regulation  (EEC) No 1360/78 

This Regulation 

Article 1 

Article 2 

Article 3 

Article 4 

Article 5 

Article 6 

Article 7 

Article 8 

Article 9 

Article 10 

Article 1Ï 

Article 12 

Article 13 

Article 14 

Article 15 (1) 

Article  15 (2) 

Article 17 

Article 18 

Article 19 

Article 20 

Annex 

Article 1 

Article 2 

Article 3 

Article 4 

Article 5 

Article 6 

Article 7 

Article 8 

Article 9 

Article 10 

Article 11 

Article 12 

Article 13 

Article 14 

Article 15 

Article 16 

Article 17 

Article 18 

Article 19 

Article 20 

Article 21 

Annex I 

Annex II 

n 

ISSN 0254-1475 

COM(96) 58 final 

DOCUMENTS 

EN 

03 

Catalogue number  :  CB-CO-96-066-EN-C 

ISBN 92-78-00544-4 

Office for Official Publications of the European Communities 

L-2985 Luxembourg 

&