Proposal for a COUNCIL REGULATION (EC) providing for additional payments to be made in 1996 with the premia referred to in Article 4b(6) and Article 4d(7) of Council Regulation (EEC) No. 805/68 on the common organisation of the market in beef and veal and amending Article 4i(4) of that Regulation
Date: 1996-05-29
Institutions: European Commission
Subjects: animal disease, beef, common organisation of markets, financial aid, financial loss

COMMISSION  OF THE EUROPEAN  COMMUNITIES 

* 

•tr 

-tr 

« 

Brussels,  29.05.1996 
COM(96)  242  final 

96/0148  (CNS) 

Proposal  for  a 

COUNCIL  REGULATION  (EC) 

providing  for  additional  payments to be made in  1996 with the premia referred  to in  Article 

4b(6) and Article 4d(7) of Council Regulation (EEC) No. 805/68 on the common organisation 

of  the  market in beef  and veal  and amending  Article  4i(4)  of  that Regulation 

(presented  by  the  Commission) 

Explanatory Memorandum 

The  announcement  on  20th  March  1996 that  10 cases  of  Creutzfeld-Jacob  Disease  in  the 
United  Kingdom  could  have  been  caused  by  exposure  to  the  Bovine  Spongiform 
Encephalopathy  (BSE.) before  1988, when measures were introduced to ban the use for food 
of  special  bovine  offals,  caused  on  immediate  disturbance  in  beef  markets not  only  in  the 
United Kingdom  but also in other  member  states where BSE.  is rare or unknown.  A series 
of measures have been adopted to improve consumer protection, to restore confidence  and to 
support the beef market. Although these measures have had a considerable and positive  effect, 
the beef  market  remains  depressed. 

Once  the  longer  term  impact  on  the  change  in  consumer  behaviour  can  be  assessed,  the 
Commission  intends  to bring  forward  proposals  designed  to  adapt beef  production  better  to 
consumer  demand.  These  proposals  will  be  complemented  by  appropriate  proposals  on 
labelling  and promotion. 

In  the  meantime  there  is  a  general  recognition  of  the  need  to  provide  short  term  and 
immediate income support to beef producers. Following intensive discussions in the Council, 
the  Commission  has  undertaken  to  provide  an  appropriate  proposal  to  this  effect.  The 
discussions  in the  Council  revealed  a general  recognition  that  this  measure  needed  to  meet 
the following  criteria: 

(a) 

(b) 

It must be capable of being applied  urgently. This implies that, so far  as possible, it 
should  be  based  on  the  existing  data  and  administrative  structures  which  exist  to 
apply  the premia  already  foreseen  in  the beef regime. 

Nevertheless,  the  measure  should  provide  a degree  of  flexibility  to  allow  member 
states to address certain specific problems which are not covered by a measure linked 
to the existing premia. 

(c) 

It must  respect the Union's budgetary  possibilities. 

As 
regards  the  amount  of  aid  to  be  granted,  the  Commission  considers  that  the  most 
appropriate  approach  is to  look  at  the  impact  of the  price  reduction  which  has taken  place 
since  20th March  as a result of the BSE.  crisis  and to project  this reduction  forward  until 
the end of this year. The Commission recognises that such an estimate cannot be precise. The 
market  disturbance  has  made  the  measurement  of  current  prices  difficult  and  there  are 
conflicting  views on the likely course of prices for the rest of this year. The best estimate the 
Commission  is able to make is that the price reduction  will lead to a loss of revenue this year 
of the order of  650 mecu. This figure  also corresponds  to the best estimate the Commission 
can  make  of  the  room  for  manoevre  within  the  1996  budget  in  the  light  of  conjunctural 
savings foreseen  in other sectors, net of the additional  costs which are already being incurred 
in the beef  sector. 

As  regards  the  method  of  making  the  payment,  the  Commission  considers  that  the  most 
appropriate  instrument  by  which  the  major part of  this aid  could  be  provided  is  the  existing 
male  animal  and suckler  cow premia.  On this basis  it  proposes  supplements  to the premium 
for suckler cows of 25  ecu and to the male animal premium of 21  ecu, the difference  between 
the  two  supplements  reflecting  the  somewhat  greater  fall  in  the  price  of  calves  sold  by  the 
suckler  cow producers  than has been  observed  in  the price of  young  male  animals.  In order 
to  allow  payment  to  be  made  as  soon  as  possible,  the  Commission  proposes  that  these 
supplements  should  be  granted  on  the  bases  of  data  already  in  the  possession  of  member 
states with regard to payment of the  1995 premia.  But in cases where producers subsequently 
claim fewer  premia in  respect of  1996, part of  the payments  made now  should be  recovered 
and the  sums  so  recovered  should be  distributed  to  those  producers  whose  validated  claims 
in  respect  of  1996  are higher than the  claims  in  respect  of  1995. 

The  cost  of  this  measure  is  estimated  at  534  mecu  (B).  The  Commission  proposes  that the 
balance  between  this  figure  and the total  of  650  mecu  (116  ecu  (B)  equivalent  to  112.1  ecu 
(A))  should be  distributed to member  states on the basis of  the  size of  their non  dairy  cattle 
herds  as published  by  Eurostat.  These  sums  will  be  available  for the  use  of  member  states 
as a contribution to national  aid schemes in cases where, in the judgement of  member states, 
some  complementary  aid  is  needed  to  help  to  resolve  problems  not  fully  addressed  by  the 
increase  in the premia. 

The criterion  for the  acceptability  of  such  national  aid schemes  is that they  must not  exceed 
the estimated  income  loss  of  the  beneficiaries. 

At the same time  as making  this proposal,  the Commission  proposes  a technical  amendment 
to  the  calf  processing  scheme.  This  scheme,  which  has  been  available  as  an  option  for 
member  states  since  1992, has  not  been  used  by  any  member  states  until  recently,  when  it 
began to be  applied by  the United Kingdom  and Portugal  because of  the abrupt reduction  in 
demand for veal calves. Under current provisions, the scheme applies only to calves not more 
than  10 days of  age.  In certain  circumstances  this  age limit  can be  difficult  to respect  and it 
is  proposed  to  give  the  Commission  power  to  allow  a  slightly  higher  age,  subject  to 
appropriate  controls. 

In conclusion, the Commission  stresses the practical  and budgetary  urgency  of  this proposal. 
The  proposed  increase  in  the  male  animal  and  suckler  cow  premia  and  the  contribution  to 
complementary  national  aid schemes  will  only  be eligible  for EAGGF  funding  in  respect  of 
payments  made during the current budget year. 

"2-

COUNCIL  REGULATION  (EC)  No. 

/96 

of 

providing  for  additional  payments  to  be  made  in  1996  with  the  premia  referred  to  in  Article 

4b(6) and Article 4d(7) of Council Regulation  (EEC) No. 805/68 on the common  organisation 

of  the  market  in  beef  and  veal  and  amending  Article  4i(4)  of  that  Regulation 

THE  COUNCIL  OF  THE  EUROPEAN  UNION, 

Having  regard  to  the  Treaty  of  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, 

Whereas Regulation  (EEC) No. 805/683 provides for  the payment of premia in respect of  male 

bovine  animals  and  of  suckler  cows, designed  to  compensate  producers  for  the  consequences 

of  a  reduction  in  the  intervention  price  at  the  time  of  reform  of  the  sector; 

Whereas  the  market  for  beef  has  been  seriously  disturbed  as  a  result  of  consumer  concerns 

in  relation  to  bovine  spongiform  encephalopathy  (B.S.E.)  and  with  a  view  to  assuring  the 

future  of the  sector,  additional  resources  shall  be  made  available;  whereas  in  order  to  enable 

rapid  payment  and  to  achieve  the  desired  economic  effect,  such  resources  shall  generally  be 

made  available  in  the  form  of  payments  in  addition  to  the  premia  due  in  respect  of  animals 

eligible  in  the  1995  calendar  year,  as  the  necessary  data  is  already  available;  whereas, 

1  OJ  No 

2  OJ  No 

3  OJ  No.  L  114,  28.6.1968,  p.  24.  Regulation  last  amended  by 

3 

however,  producers  shall  only  be  entitled  to  such  additional  payments  to  the  extent  that  the 

number  of  eligible  animals  for  which  they  are  entitled  to  premium  in  respect  of  the  1996 

calendar  year  is  not  reduced  as  compared  with  the  1995  calendar  year; 

Whereas  overpayments  shall  be  set  off  against  a  producer's  entitlement  to  premia  in  respect 

of  the  1996 calendar  year  or,  where  this  is not  possible,  repaid  to  the  competent  authority  of 

the  Member  State  concerned;  whereas  the  sum  of  money  represented  by  such  overpayments 

shall  be  allocated  to  producers  whose  entitlement  to  premia  in  respect  of  the  1996  calendar 

year  is  greater  than  that  in  respect  of  the  1995  calendar  year,  pro  rata  to  their  additional 

entitlement; 

Whereas  the  additional  payments  to  producers  who  receive  a premium  may  not,  depending 

on  the  particular  production  structure  of  a  Member  State,  address  fully  the  problems  of 

certain producers;  whereas Member  States should be given the possibility  to  make payments 

to  such  producers;  whereas  the  amount  of  money  available  to  a  Member  State  for  this 

purpose  should  reflect  the  size,  of  its bovine  herd,  excluding  dairy  cows; 

Whereas Regulation  (EEC) No.  805/68 provides for a processing premium payable in relation 

to male calves  removed from  production before  they  exeed  10 days old;  whereas  experience 

has  shown  that  the  period  between  the  time  when  a  calf  may  be  moved  off  a farm  and  its 

required  removal  from  production  is  extremely  short,  whereas  it  should  therefore  be  made 

possible  for  the  Commission  to  allow  an  increase  in  the  10  day  age  limit  in  certain 

circumstances; 

HAS  ADOPTED  THE FOLLOWING  REGULATION: 

Article 1 

1. 

A producer whose entitlement to beef special premium under Article 4b of Regulation 

(EEC) No.  805/68  in respect of  animals kept in the  1995  calendar year  is  established 

^ 

shall, subject  to the provisions  of  paragraph  3, be entitled  to an  additional  ECU  21  for 

each  premium  which  he  receives.  The  additional  payment  shall,  where  possible,  be 

made  together  with  the  payment  of  the  premium  referred  to  in  Article  4b(6) 

2. 

A producer  whose entitlement  to suckler cow premium  under  Article 4d of  Regulation 

(EEC)  No.  805/68  in  respect  of  animals  kept  in  the  1995  calendar  year  is  established 

shall, subject  to the provisions of paragraph  3, be  entitled  to an  additional  ECU 25  for 

each  premium  which  he  receives.  The  additional  payment  shall,  where  possible,  be 

made  together  with  the  payment  of  the  premium  referred  to  in  Article  4d(7). 

3. 

Entitlement  to  the  additional  payments  referred  to  in  paragraphs  1  and  2  shall  be 

subject  to  the  establishment  of  entitlement  to  premium  for  at  least  the  same  number 

of animals retained  in the  1996 calendar year  as that for  which the producer  concerned 

received  additional  payments  in  respect  of  the  1995  calendar  year. 

4 

Member  States shall take all the necessary  measures  to ensure that  when the  additional 

payments  are made to producers they  are made aware of the fact  that their  entitlement 

to  those  payments  is  subject  to  the  condition  set  out  in  paragraph  3. 

Article  2 

1 

Where the number of animals for  which  entitlement to premia  is established  in  relation 

to  the  1996  calendar  year  is  less  than  that  for  which  a  producer  received  additional 

payments  under  Article  1,  the  part  of  the  additional  payments  to  which  he  was  not 

entitled  shall  be  set off  against  his entitlement  to premia  under  Regulation  (EEC)  No. 

805/68  for  the  1996  calendar  year. 

n 

Where  a producer  does  not  make  an  application  for  premia  under  Regulation  (EEC) 

No.  805/68  in  respect  of  the  1996  calendar  year  or  where  the  premia  to  which  he  is 

5 

entitled  are  insufficient  to  make  the  set  off  referred  to  in  paragraph  1,  he  shall  be 

required  to  repay  the  additional  payments  made  under  Article  1 to  which  he  was not 

entitled. 

Article  3 

Producers  whose  entitlement  to  premia  in  respect  of  the  calendar  year  1996  relates to  more 

animals than their entitlement  in respect of the calendar year  1995 shall be eligible for further 

additional  payments.  Such  payments  shall  only  be  made: 

to  the  extent  that  additional  payments  made  to  producers  who  were  not  eligible  for 

them  are repaid  or  recouped,  and 

pro  rata to the  additional  number of  premia  received  in  respect  of  the  1996  calendar 

year. 

Article  4 

Member  States  may : 

(a) 

use  the  amounts  set  out  in  the  Annex  to  make  payments  to  producers  in  the 

beef  and veal  sector  who  are facing  acute  problems  as  a result  of  the  market 

situation, which  are not fully  addressed by the measures referred to in Articles 

1  -  3; and 

(b) 

pay national  aid to such producers in addition  to the payments  under point  (a) 

to the extent that such national  aid does not  lead tc  the estimated  income  loss 

being  exceeded. 

6? 

Article  5 

The  conversion  rate to  be  applied  shall  be  the  agricultural  rate valid  on  1 January  1996. 

Article  6 

The measures introduced by this regulation, with  the exception  of  the national  aid referred to 

in  Article  4,  shall  be  deemed  to  be  intervention  intended  to  stabilize  agricultural  markets 

within  the  meaning  of  Article  3  (1 ) of  Regulation  (EEC)  n°  729/70. 

The  Community  shall  finance  the  expenditure  incurred  by  Member  States  in  relation  to  the 

payments referred to in Article  1 and Article 4  (l)(a)  only  where such payments are made by 

them  by  15  October  1996  at the  latest. 

Article  7 

In  Article  4i  (4)  of  Regulation  (EEC)  No.  805/68  the  following  indent  shall  be  added: 

"- 

may,  on  the  basis  of  a duly  justified  application  setting  out  adequate  control 

measures  to  be  carried  out,  authorize  a  Member  State  to  pay  the  premium 

referred  to  in  paragraph  1 in  respect  of  animals  withdrawn  from  production 

before  exceeding  the  age of  20  days." 

Article  8 

Member States shall take all the necessary  measures to ensure compliance with the provisions 

of  this  Regulation. 

Article  9 

Any  detailed  rules  necessary  for  the  application  of  this  Regulation  shall  be  adopted  in 

accordance  with  the  procedure  set  out  in  Article  27  of  Regulation  (EEC)  No.  805/68. 

? 

Article 10 

This Regulation  shall  enter  into  force  on  the day  of  its publication  in  the  Official  Journal  of 

the  European  Communities. 

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

Done  at 

For the  Council 

The  President 

7 

ANNEX 

Amounts  referred  to  in  Article  4  (a) 

ECU  (millions) 

Belgium 

Denmark 

Germany 

Greece 

Spain 

France 

Ireland 

Italy 

Luxembourg 

Netherlands 

Austria 

Portugal 

Finland 

Sweden 

United  Kingdom 

4,5 

2,5 

19,3 

0,7 

7,7 

29,0 

9,5 

9,0 

0,3 

5,0 

2,9 

1,7 

1,4 

2,3 

16,3 

<) 

BUDGET  HEADING : B1 -21 

APPROPRIATIONS: 
ECU  5  458  million 

TITLE:  Council  Regulation  providing  for  additional  payments  to  be  made  in  1996  with  the  premia  referred  to  in 
Article  4  b  (6)  and  Article  4  d  (7)  of  Council  Regulation  (EEC)  No  805/68  on  the  common  organisation 

J 

LEGAL  BASIS:  Article  43  of  the  Treaty 

AIMS  OF  PROJECT:  Emergency  income  support  for  beef  producers 

FINANCIAL  IMPLICATIONS 

5.0. 

EXPENDITURE 
-  CHARGED  TO  THE  EC  BUDGET 

(REFUNDS/INTER VENTION) 
-  NATIONAL  ADMINISTRATION 
- OTHER 

5.1. 

REVENUE 
-  OWN  RESOURCES  OF  Till-  EC 
(LEVIES/CUSTOMS  DUTIES) 

-  NATIONAL 

5.0.1. 
5.1.1. 

s  i 

ESTIMATED  EXPENDITURE 
ESTIMATED  REVENUE 

METHOD  OF  CALCULATION: 

PERIOD  OF  12 
MONTHS 

ECU  million 

CURRENT 
FINANCIAL 
YEAR 
(96) 
ECU  million 

650 

FOLLOWING 
FINANCIAL 
YEAR 
(97) 
ECU  million 

1998 

1999 

2000 

2001 

10 274  239  suckler  cows 
12  478  897  male  bo vines 
Supplementary  payments 

x  ECU  25/hcad  *  1.030  (DR)  --
x  ECU  21/head  *  1.028  (DR)  = 
112.1  Mio  ECU  (A)  x  1.030  (DR) 

ECU  265  million  (II) 
ECU  269  million  (H) 
ECU  319  million  (H) 

•CU650  million  (IÎ) 

6.0. 

6.1. 

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

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

IS  A  SUPPLEMENTARY  BUDGET  NECESSARY? 

6.3. 

WILL  FUTURE  BUDGET  APPROPRIATIONS  BE  NECESSARY? 

OBSERVATIONS: 

This  measure  can  be  funded  within  the  guideline  for  1996. 

NO 

NO 

YES 

NO 

ID 

s^nnnnnii 

ISSN  0254-1475 

COM(96) 242  final 

DOCUMENTS 

EN 

03 

Catalogue number  :  CB-C096-266-EN-C 

ISBN 92-78-05213-2 

Office for Official Publications of the European Communities 

L-2985 Luxembourg 

Y) 

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