Report to the Council concerning application of Council Regulation (EEC) No 2990/82 concerning the sale of butter at reduced prices to persons receiving social assistance
Date: 1996-12-06
Institutions: European Commission
Subjects: discount sale, farm prices, intervention price, milk, social assistance

COMMISSION  OF  THE  EUROPEAN  COMMUNITIES 

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Brussels,  06.12.1996 
COM(96)  t>51  final 

Report to the Council concerning 

application of Council Regulation (EEC) No  2990/82 

concerning the sale of butter  at reduced prices to persons 

receiving social assistance 

Proposal  for  a 

COUNCIL.REGULATION  (EC) 

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

(presented  by  the  Commission) 

Report  to  the  Council  concerning 

application  of  Council  Regulation  (EEC)  No  2 9 9 0 / 82 

concerning  the  sale  of  butter  at  reduced  prices  to  persons 

receiving  social  assistance 

1  •  Background 

The  market  situation  for  milk  in  general  and  for  butter  in  particular  has  in  the  past 
required  a whole  range  of  disposal  measures  notably  for  butter  in  order  to  increase  the 
into  public 
internal  and  external  sales  and  consequently  diminish  the  purchases 
intervention  storage.  The  scheme  allowing  for  the  sale  of  butter  to  persons  receiving 
social  assistance  has  been in operation  since  1 978  and Article  3a  of  Council  Regulation 
(EEC)  No  2 9 9 0 / 8 2,  last  modified  by  Regulation  (EC)  n"  1802/95,  requires  that  the 
Council,  on  the  basis  of  a report  from  the  Commission  shall  decide  before  31.12.1 996 
whether  the subsidized  sales under  the abovementioned  Regulation are to be continued. 
Reports  previously  forwarded  to  the  Council  have  on  4  occasions  resulted  in  the 
continuation  of  the  scheme  for  two  consecutive  years,  ending  3 1 . 1 2 . 1 9 9 6.  Up  until 
now  the  Regulation  has  only  been  applied  in  Ireland, and  the  following  therefore  refers 
to  this  Member  State  only. 

2-  Criteria  for  the  determination  of  entitlement 

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

Old  Age  Pensions; 
Unemployment  Assistance; 
Windows'  and  Orphans'  Pension; 
Deserted  Wife's  Allowance; 
Alone  Parents  Allowance; 
Prisoner's  Wife's  Allowance; 
Carer's  Allowance; 
Blind  Pension; 
Social  Welfare  (Supplementary  Welfare)  Allowance  ; 
Pre-retirement  Allowances. 

3.  Procedure  for  implementation  and  control  of  the  scheme 

A  system  of  vouchers  entitling  two  pounds  of  butter  per  month  to  be  purchased  at  the 
normal  retail  price, less  the  amount  of  the  subsidy,  are supplied  to  those  persons  found 
eligible  under  the  criteria  set  out  in  point  2  above.  Vouchers  are  valid  for  the  month 
they  are  issued  and  the  following  two  months. 

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

^ 

4.  Developments  in  the  builej^ijg^_^JIoj^nii  market  in  Ireland 

In  accordance  with  Article  4(3)  of  Regulation  (EEC)  no  1 8 9 8 / 8 7,  the  Member  States 
shall  forward to  the  Commission information concerning  the developments  on the  butter 
and  yellowfat  market. 

The  information  received  from  the  Irish  authorities  concerning  developments  in  market 
shares  of  butter,  low-fat  butter,  margarine  and  fat  mixtures  shows  the 
following 
developments  between  1987  and  1995. 

Year 

Butter 

Low-fat  butter 

Margarine 

Fat  Mixture 

Total 

Tonnes 

2 0 . 5 00 
16.325 
13.235 
12.000 
12.025 
11.925 
1  1.825 
12.000 
1  1.900 

1987 
.  1988 
1989 
1 9 90 
1991 
1992 
1993 
1994 
1995 

(%) 

4 2 .4 
33.8 
27.4 
25.3 
25.4 
25.1 
25.1 
25.5 
25.4 

Tonnes 

(%) 

Tonnes 

2.000 
2.750 
1.860 
1.575 
1.575 
.1.575 
1.575 
1.500 
1.500 

4.1 
5.7 
3.9 
3.3 
3.3 
3.3 
3.3 
3.2 
3.2 

1 4 . 9 00 
1 4 . 2 00 
15.700 
15.100 
14.600 
1 3 . 9 00 
13.700 
13.200 
13.000 

(%) 

30.8 
29.4 
32.5 
31.8 
30.9 
29.5 
29.1 
28.1 
27.7 

Tonnes 

1 1 . 0 00 
1 5 . 0 00 
1 7 . 5 00 
18.825 
19.100 
1 9 . 7 00 
2 0 . 0 00 
2 0 . 3 00 
2 0 . 5 00 

(%) 

22.7 
31.1 
36.2 
39.6 
4 0 .4 
41.8 
42.5 
43.2 
43.7 

Tonnes 

4 8 . 4 00 
4 8 . 2 75 
4 8 . 2 95 
4 7 . 5 00 
4 7 . 3 00 
4 7 . 1 00 
4 7 . 1 00 
4 7 . 0 00 
4 6 . 4 00 

The  total  yellowfat  market  between  1 987  and  1 995  shows  a decline  of  4.1 %  while  the 
fat  mixtures  have  taken  a continuing  higher  market  share  compared  to  that  of  butter. 
The  fat  mixtures  generally  contain  butter  or  cream  and  vegetable  fat  and  have  been 
principally  marketed  on  the  basis  of  improved  spreadability  vis-à-vis  butter.  The 
introduction  of  reduced  and  low-fat  butters,  which  incorporate  additional  milk  protein 
and  moisture  to  reduce  the  overall  fat  has  also  led  to  a  reduction  of  the  market  share 
of  full  fat  butter.  However,  it  is  noted  that  the  important  yearly  decline  in  the 
consumption  of  full  fat  butter  experienced  in  the  1980'shas  disappeared  since  1990 
showing  a  stable  market  share  slightly  in  excess  of  2 5 %. 

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

Ireland  has  operated  the  aid  scheme  as  provided  for  in  the  abovementioned  Regulation 
since  1 978 and the scheme  has, especially  during the  last  year, accounted  for  important 
shares  of  the  internal  Irish  butter  consumption. 
In  1 995, the  purchase  of  around  7.600 
tonnes  of  butter  was  aided under  the  scheme  and the  estimated  purchases  for  1 996  are 
approximately  the  same.  Since  1992,  the  purchases  amounted  to  more  than  6 0%  of 
the  total  Irish  butter  consumption  but  accounted  for  less than  6%  of  the  production  and 
it  is  expected  that  these  percentages  will  remain  practically  unchanged  in  1996.  The 
total  estimated  cost  calculated  as  the  purchased  quantities  multiplied  by  the  aid  level 
after  applying  the  switchover  coefficient  amounted  to  10,4  MECU  in  1996. 

The  development 
indicated  below  : 

in  purchases,  costs  and  number  of  beneficiaries  since  1987  is 

Year 

1987 
1988 
1989 
1990 
1991 
1992 
1993 
1994 
1 9 9 5* 
1 9 9 6* 

Purchases 
(in  tonnes) 

Financial  costs 
(MECU) 

Beneficiaries* * 

5.651 
6.178 
6.567 
6.182 
6.260 
7.331 
7.400 
7.900 
7600 
7.500 

10.06 
11.00 
11.69 
11.00 
9.39 
11.00 
10.36 
11.06 
8.74 
8.63 

7 2 0 . 0 00 
7 2 0 . 0 00 
7 2 0 . 0 00 
7 2 0 . 0 00 
7 4 0 . 0 00 
7 7 6 . 0 00 
8 3 4 . 0 00 
8 0 0 . 0 00 
9 1 6 . 0 00 
9 0 0 . 0 00 

Provisional  and  without  the  application  of  the  switchover  coefficient. 
Calculated  on  the  basis  of  vouchers  issued. 

6.  Conclusions  and  recommendations 

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

A  reduction  in  consumption  by  these  categories  could  result  in  sales  of  butter  into 
intervention.  Furthermore, a withdrawal  of this  longstanding  benefit  to the  less  well-off 
sectors  of  society  e.g.  the  unemployed,  old  age  pensioners,  etc.  could  hardly  be 
defended  from  a social, market  or economic  point  of  view.  Furthermore, the  favourable 
public  perception  of  a  Community  scheme  promoting  butter  sales  should  not  be 
neglected. 

The  Commission therefore  proposes  a continuation  of  the  scheme  for  an additional  two 
year  period  ending  31  December  1998.  However,  the  maximum  quantity  eligible  per 
beneficiary  each  month  should,  due  to  the  general  tendency  of  decline  in  Irish  butter 
consumption  over  the  last  decade,  be  reduced  from  1 kg  to  0,5  kg. 

PROPOSAL FOR A 

COUNCIL REGULATION (EG) No 

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

THE COUNCIL OF THE EUROPEAN UNION, 

Having regard to the Treaty establishing the European  Community, 

Having regard to  Council  Regulation  (EEC) No  804/68 of 27 June  1968 on the  common 
organization  of  the  market  in  milk  and  milk  products1,  as  last  amended  by  Regulation 
(EC) No  1587/962 and in particular Article  12(2) thereof, 

Having regard to the proposal from  the Commission, 

Whereas  Council  Regulation  (EEC) No 2990/823,  as  last  amended 
by  Regulation  (EC)  No  1802/954,  introduces  arrangements,  expiring  on  31  December 

1996,  for  the  sale  of  butter  at  reduced  prices  to  persons  receiving  social  assistance; 

whereas,  Article  3a(3)  of  that  Regulation  provides  that  the  Council  is  to  examine  the 

possibility before that date and on the basis of a report from  the Commission,  of renewing 

the arrangements laid down; whereas, in view of the report presented by the  Commission 

and the results achieved, the arrangements should be extended for two years, 

1  OJ No L  148, 28.6.1968. p. 13. 

2  OJ No L 206.  16.8.1996, p. 21. 

3  OJ No L 314,  10.11.1982. p. 26. 

4  OJ Np L  174, 26.7.1995. p. 27. 

4-

HAS ADOPTED THIS REGULATION: 

Article 1 

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

1. 

In Article  1, "31 December  1996" is replaced by "31 December  1998"; 

2. 

In Article 3a(3), "31 December  1996" is replaced by "31 December 1998". 

Article 2 

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

Official  Journal of the European Communities. 

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

States. 

Done at Brussels, 

For the Council 

£ 

FINANCIAL STATEMENT 

^ — — w w • — • — • — M a —— 

' 

" 

' 

BUDGET HEADING: 

Chapter BI  - 2040 

TITLE: 

APPROPRIATIONS: 

ECU  13.6 million (Second  LA to 
the PDB 97) 

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

3. 

LEGAL BASIS: 

Article  12(2) of Regulation (EEC) No 804/68 

AIMS: 

Extends the scheme for the sale of butter at reduced prices to persons receiving social assistance 

FINANCIAL  IMPLICATIONS 

5.0 

EXPENDITURE 
-  CHARGED TO THE EC BUDGET 
(REFUNDS/INTERVENTION) 

-  NATIONAL  AUTHORITIES 
-  OTHER 

5.1. 

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

-  NATIONAL 

5.0.1 
5.1.1 
5.2 

ESTIMATED  EXPENDITURE 
ESTIMATED  REVENUE 
METHOD OF CALCULATION: 

PERIOD OF 12 
MONTHS 

(ECU million) 

CURRENT 
FINANCIAL 
YEAR 
(97) 
(ECU million) 

FOLLOWING 
FINANCIAL 
YEAR 
(98) 
(ECU million) 

+ 10.2 

+8.1 

+ 10.2 

1998 
(ECU m) 

1999 
(ECU m) 
+2,1 

2000 
(ECU m) 

2001 
(ECU m) 

2002 
(ECU m) 

12months: 
1997: 

7 000 t x 1.389 ECU/tx  1.047 (DR) = ECU 10.2 million (B) 
7 000 t x  1,389  ECU/t x 9.5/12 x 1.047 (DR) -  ECU 8.1 million (B) 

6.0 

6.2 

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? 
WILL A SUPPLEMENTARY  BUDGET BE NECESSARY? 
WILL FUTURE BUDGET APPROPRIATIONS BE NECESSARY? 

OBSERVATIONS: 

YES/NO 

YES/NO 

YES/NO 
YES/N© 

The second  letter of amendment to the PDB was prepared on the basis of an extension  of the scheme beyond  3 Î December  1996, 
10 000 tonnes and an unchanged aid rate. 

As the maximum quantity per person per month  is reduced from  1  kg to 0.5 kg, the quantity of  10 000 tonnes in the PDB is now 
expected to drop to 7 000 tonnes. 

4 

ISSN 0254-1475 

COM(96)651  final 

DOCUMENTS 

03  05  01 

Catalogue number  :  CB-C0-96-654-EN-C 

ISBN 92-78-13142-3 

Office  for Official  Publications of the European Communities 

L-2985 Luxembourg 

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