Proposal for a Council Regulation (EC) derogating from certain provisions in Regulation (EEC) No 1765/92 establishing a support system for producers of certain arable crops
Date: 1997-07-10
Institutions: European Commission
Subjects: cereal-growing, economic support, production aid, set-aside

COMMISSION  OF THE EUROPEAN  COMMUNITIES 

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Brussels,  10.07.1997 
COM(97)  360  final 

97/0196  (CNS) 

Proposal  for a 

COUNCIL REGULATION  (EC) 

derogating  from certain  provisions in Regulation  (EK  ) No  1765/92 
establishing a support system for  producers of certain  arable crops 

(presented by the Commission) 

EXPLANATORY  MEMORANDUM 

To  qualify  for  compensatory  payments  under  the  reform  of  the  common  agricultural  policy 
for arable crops, producers participating  in the general  scheme have to  freeze  a percentage of 
their  arable  land  to  achieve  a  balance  between  Community  production  and  forecast  outlets. 
Small-scale  producers  may  however  opt  for  a simplified  scheme  exempt  from  the  set-aside 
requirement. 

The set-aside rate for the  1997 harvest  was fixed  at 5% by way of derogation  from  the basic 
rate set by Regulation  (EEC) No  1765/92 at  17,5%. 

At  present,  the  level  of  stocks  on  the  world  market  is  low,  principally  because  of 
unfavourable  weather  conditions which  affected  the  1994 and the  1995 cereal  harvest  in  the 
main  producing  countries.  The  1996  harvest  has  been  sufficient  only  to  partly  reconstitute 
stocks. 

In  1996 Community production reached a record level because of exceptional yields. This did 
not  lead  to  the  substantial  increase  in  intervention  stocks  expected  at  the  beginning  of  the 
marketing year because of a new substantial  increase in Community consumption  and the  fact 
that exports were maintained  at a good rate. 

Production  potential  needs  to  be  maintained  in  order  to  provide  security  against  arable 
production  problems  which  can  be  caused  by  weather  conditions,  but  the  objective  of 
controlling  production  must  not  be  undermined  by  the  reconstitution  of  excessive  public 
stocks  and  must  not  create  problems  in  seeking  alternative  outlets  for  arable  crops  in  the 
industrial  sector. 

In accordance  with  the compromise  reached  at the Council  for  agriculture  on June  1997, the 
proposed  regulation  would  maintain  the  5 %  set-aside  rate  for  crops  sown  for  the  1998/99 
marketing  year.  Fixing  this  level  at  5 % also  makes  it  necessary  to maintain  the  increase  in 
the set-aside percentage to be made in the case of transfer  at  1  %. 

In  the  interest  of  consistency,  the  Commission  also  considers  it  appropriate  to  extend  the 
suspension  of the special  set-aside  for a further  marketing year.  Furthermore,  it proposes that 
in the interest of equal treatment and as a corollary to the continued  suspension  of special  set-
aside, the penalties applicable  for exceeding "irrigated" ceilings should be made less severe. 

2. 

Proposal  for a 

Council Regulation  (EC) No  ..../97 

of 

1997 

derogating from certain provisions in Regulation  (EEC) No  1765/92 
establishing a support system for  producers of certain arable crops 

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  Commission, 

Having regard  to the opinion of the European  Parliament1, 

Whereas the support  system  for  producers  of certain  arable crops established  by  Regulation 

(EEC)  No  1765/922 provides that,  in order  to qualify  for  compensatory  payments  under  the 

general  scheme,  producers  must  set  aside  a predetermined  percentage  of  their  arable  land; 

whereas  this  percentage  is  to  be  reviewed  to  take  account  of  production  and  market 

developments; 

Whereas,  since  the  introduction  of  this  system,  the  cereals  market  has  achieved  a  better 

balance  as  a  result  of  an  increase  in  Community  consumption;  whereas  this  situation, 

together  with  the  very  low  level  of  stocks  and  firm  prices  on  the  world  market  has  also 

resulted  in  a  significant  reduction  in  public  stocks  and  firm  prices  for  cereals  on  the 

Community  market; 

1  Opinion given on 

2  OJ  No  L  181,  1.7.1992, p.  12.  Regulation  last  amended  by  Regulation  (EC)  No  922/97  (OJ  No  L  133, 

24.5.1997, p. 1). 

3 

Whereas,  in  the  light  of  the  present  market  situation  for  cereals  and  to  avoid  jeopardizing 

the  Community's  presence  on  the  world  market,  the  rate  for  set-aside  beginning  not  later 

than  15 January  1998  should  therefore  be  set  for  the  1998/99  marketing  year  at  the  same 

level  as  for  the  1997/98  marketing  year  and  the  application  of  special  set-aside  should  be 

suspended  where the base area  under  the  1997/98  marketing  year  is exceeded;  whereas,  as 

a  corollary  to  this  provision,  the  level  of  the  penalty  for  exceeding  an  "irrigated"  ceiling 

should be made less severe; 

Whereas  in  the  event  of  a  transfer  of  the  set-aside  requirement,  the  basic  17,5%  set-aside 

rate  is  increased  by  3 % ;  whereas  this  increase  should  be  adjusted  in  order  to  maintain  a 

similar  ratio  between  the  basic  rate  and  the percentage  increase  due  on  transfer,  following 

the drop  in the basic rate; whereas,  in the event of a transfer  of the set aside requirement  to 

areas  which  are  sensitive  from  an  environmental  point  of  view,  it  is  appropriate  not  to 

apply  the abovementioned  increase, 

HAS ADOPTED THIS REGULATION: 

Article 1 

For  the  1998/99  marketing  year,  notwithstanding  Article  7  of  Regulation  (EEC) 

No  1765/92: 

- 

the set-aside requirement  referred  to in paragraph  1  of that Article shall be set at 5 %, 

- 

the increase referred  to in the second  indent of paragraph  7 of that Article shall be set at 

1  percentage  point.  However,  no  increase  shall  apply  to  transfers  executed  to  a 

particular  area where environment  objectives  are achieved. 

Article 2 

Should  the  base  area  under  the  1997/98  marketing  year  be  exceeded,  the  special  set-aside 

referred  to  in the  second  indent  of  Article  2(6)  of  Regulation  (EEC)  No  1765/92  shall  not 

apply. 

Article 3 

For  the  1997/98 marketing  year,  notwithstanding  the sixth  subparagraph  of Article  3(1), of 

Regulation  (EEC)  No  1765/92, where an  "irrigated"  ceiling  is exceeded,  the  compensatory 

payment  for  the  "irrigated"  rate  shall  in all  cases  be  reduced  proportionally  to  the  rate  of 

the overshoot  recorded. 

Article 4 

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 

For the Council 

FINANCIAL  STATEMENT 

BUDGET HEADING: 

B1-105 and B1-1060 

APPROPRIATIONS:  ECU  10 340.2  and 
1 553.6 million 

TITLE:  Council  Regulation  derogating,  for  the  1998/99  marketing  year,  from  certain  provisions  of  Regulation  (EEC)  No 
1765/92 establishing a support system for producers of certain arable crops 

LEGAL BASIS:  Articles 42 and 43 of the Treaty 

AIMS 
To set the compulsory  set-aside rate for the  1998/99 marketing year at 5% of the area under arable crops 

FINANCIAL  IMPLICATIONS (in ECU million) 

PERIOD OF 
12 MONTHS 

CURRENT 
FINANCIAL YEAR 
(97) 

FOLLOWING 
FINANCIAL YEAR 
(98) 

EXPENDITURE CHARGED TO: 
- EC BUDGET 

(REFUNDS/INTERVENTION) 

- NATIONAL  AUTHORITIES 
- OTHER 

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

2. 

4. 

5.0. 

5.1. 

5.0.1. 
5.1.1. 

ESTIMATED  EXPENDITURE 
ESTIMATED  REVENUE 

1999 

2000 

2001 

2002 

5.2. 

6.0. 

~6J. 

6.2. 

6.3. 

METHOD OF CALCULATION: 

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

YES/NO 

CAN  THE  PROJECT  BE  FINANCED  BY  TRANSFER  BETWEEN  CHAPTERS  OF  THE  CURRENT  YES/NO 
BUDGET? 

IS A SUPPLEMENTARY  BUDGET NECESSARY? 

WILL FUTURE BUDGET APPROPRIATIONS BE NECESSARY? 

Y-ES/NO 

YES/NO 

OBSERVATIONS: 

The main aim of the measure  is to prolong  the rate of compulsory  set-aside (including  the  increase applied  to transfers)  at the level of 
that  on which  the assumptions  used  in the  1998 preliminary  draft  budget  were based  and  to suspend  the rate  of exceptional  set-aside 
for  1997/98.  The  measure  has  no  new  financial  implications  for  the  1999  budget  as  against  the  1998  budget  year  and  has  no 
implications for the  1998 budget. 
The reduction  in the penalty  in the event of an overrun of irrigated areas has no budgetary  implications as against the assumptions used 
for 1998. 
It  should  be  noted  that  in  view  of  the  level  of  consumption  of  cereals  now  being  recorded  and  the  likely  yield  levels,  the  market  is 
expected  to  be  in  balance  for  the  1998/99  marketing  year  assuming  that  exports  reach  the  maximum  level  authorized  under  the 
Uruguay  Round. 

ISSN 0254-1475 

COM(97) 360 final 

DOCUMENTS 

EN 

03  10  14 

Catalogue  number  :  CB-CO-97-352-EN-C 

ISBN 92-78-22488-X 

Office  for Official  Publications of the European  Communities 

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