2000/335/EC: Commission Decision of 8 December 1999 on the Directives promoting the rearing of she-goats (Lower Austria) (notified under document under C(1999) 5210) (Only the German text is authentic)
Date: 1999-12-08
Institutions: European Commission
Subjects: Austria, goat, less-favoured agricultural area, livestock farming, production aid, restriction on competition

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Official Journal of the European Communities

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COMMISSION DECISION

of 8 December 1999

on the Directives promoting the rearing of she-goats (Lower Austria)

(notified under document number C(1999) 5210)

(Only the German text is authentic)

(2000/335/EC)

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

II. DESCRIPTION

Having regard to the Treaty establishing the European
Community, and in particular the first subparagraph of Article
88(2)(1) thereof,

Having regard to Council Regulation (EC) No 2467/98 of
3 November 1998 on the common organisation of the market
in sheepmeat and goatmeat (1), and in particular Article 22
thereof, and Council Regulation (EEC) No 804/68 of 27 June
1968 on the common organisation of the market in milk and
milk products (2), amended for
time by Council
Regulation (EC) No 1587/96 (3), and in particular Article 23
thereof,

the last

Having called on interested parties to submit their comments
pursuant to Article 88(2)(1) (4),

Whereas:

I. PROCEDURE

(1) By letter dated 26 August 1997, Austria notified the
Commission of the abovementioned aid. By letter(s) dated
13 July 1998 and 19 October 1998, Austria provided
the Commission with further information.

(2) By letter dated 21 January 1999,

the Commission
informed Austria that
it had decided to initiate the
procedure laid down in Article 88(2) of the EC Treaty in
respect of the aid.

(3) The Commission decision to initiate the procedure was
published
European
Communities (5). The Commission invited interested parties
to submit their comments on the aid.

in the Official

Journal

the

of

(4) The Commission received no comments from interested

parties.

(1) OJ L 312, 20.11.1998, p. 1.
(2) OJ L 148, 28.6.1968, p. 13.
(3) OJ L 206, 16.8.1996, p. 21.
(4) OJ C 113, 24.4.1999, p. 4.
(5) See footnote 4.

(5) The measure in question concerns a general aid scheme
providing for a direct grant of ATS 250 per she-goat per
year in less-favoured areas of Lower Austria within the
meaning of Article 21 of Council Regulation (EC) No
950/97 of 20 May 1997 on improving the efficiency of
agricultural structures (6) and ATS 200 per she-goat per
year in other parts of the province.

(6) The objective of this scheme is to promote goat farming
as an alternative to the tradition of dairy cattle farming.
Austria also aims to make goat farming on grassland and
in hill and mountain areas sustainable, extensive use of
these areas being in the common interest.

(7)

In principle, those eligible for the scheme are natural and
legal persons keeping goats on a commercial scale in
Lower Austria. To qualify for the premiums they must
keep at least 10 she-goats on the holding all year round.
The goats must be at least one year old or have kidded at
least once.

(8) The annual budget set for this measure is ATS 500 000,
i.e. EUR 36 350. The measure is of unlimited duration.

(9) After an initial examination of the information received,
the Commission decided to open the procedure laid
the EC Treaty in order to
down in Article 88(2) of
examine the scheme in greater detail. The Commission
expressed doubts when opening the procedure as to
whether the scheme was compatible with the common
market since it appeared at
to constitute
impact.
operating aid having no positive structural
Moreover, the scheme appeared to allow aid over and
above, and similar to, those aids provided for under the

first sight

(6) OJ L 142, 2.6.1997, p. 1.

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common organisation of the market concerned, which is
exclusive within its particular sphere of activity.

IV. ASSESSMENT OF THE AID

Market organisations

III. COMMENTS FROM AUSTRIA

(10) Austria confirmed that the aid in question was designed
to promote goat
farming as an alternative line of
production. In that way it was intended to ensure that
extensive use was made of grassland and mountain areas
in Lower Austria.

(11) Austria maintained that the argument

that the aid in
question was intended merely to cut the costs of goat
farms and was therefore contrary to Article 87 of the EC
Treaty did not hold water since the objective of the aid
was in accordance with Article 87(3)(c) of the EC Treaty,
whereby aid to facilitate the development of certain
economic activities or of certain economic areas
is
compatible with the common market where such aid
does not adversely affect trading conditions to an extent
contrary to the common interest. The purpose of the aid
in question was, they stated, not to assist certain breeders
but, in accordance with Article 87(3)(c) of the EC Treaty,
to make a tangible contribution to the development and
establishing of goat breeding and rearing in the province
of Lower Austria.

(12) Austria pointed out that Lower Austria was currently not
in goat products, which conclusively
self-sufficient
indicated that
scarcely any trade in the
products in question between the Member States. Nor
were fears founded that there could be distortions of
competition or that trade could be affected between the
Member States.

there was

(13) According to Austria, Article 2(1) of Council Regulation
(EEC) No 2078/92 of 30 June 1992 on agricultural
production methods compatible with the requirements of
the protection of the environment and the maintenance
the countryside (7) was applicable to the aid in
of
question since it provided for aid for rearing animals of
local breeds in danger of extinction. Such was the aim of
the planned aid for goats since it would promote a
species under extreme threat, which would thus have a
positive impact on the environment, thanks to utilisation
of
thus curbing
degeneration of the landscape into karst and steppe.

the mountain area for goat keeping,

(14) Before the Article 88(2) procedure was opened, Austria
had also argued that the legal basis for the scheme was
the provisions governing the compensatory allowance
provided for in Regulation (EC) No 950/97, amended by
Council Regulation (EC) No 2331/98 (8).

(15) Article 22 of Regulation (EC) No 2467/98 lays down that
Articles 87, 88 and 89 of
the EC Treaty apply to
products covered by the Regulation. Under Article 23 of
Regulation (EEC) No 804/68 Articles 87, 88 and 89 of
the EC Treaty also apply to products covered by that
Regulation.

(16) The sector concerned by the aid scheme in question (i.e.
goat’s milk, [she-]goats and goatmeat) is therefore subject
to the Community rules on granting State aids.

Prohibition of State aids under Article 87(1) of the
EC Treaty

(17) Under Article 87(1) of the EC Treaty any aid granted by
a Member State or through State resources in any form
whatsoever which distorts or
to distort
competition by favouring certain undertakings or the
production of certain goods is, in so far as it affects trade
between Member States, incompatible with the common
market.

threatens

Aids granted from State resources

(18)

In view of the fact that the aid is granted in the form of
a direct provincial grant, the scheme appears beyond any
doubt to constitute aid granted (cid:145)through State resources(cid:146).
Justice has consistently ruled that aids
The Court of
granted by administrative bodies at a level below the
federal level are covered by the ban on State aid (9).

Selectivity of the measure

(19) One effect of the measure is that certain undertakings or
a certain line of agricultural production is assisted
especially since the premiums are paid direct to the goat
farmers. Austria has
intended to
stated that
make a tangible contribution to the establishment and
development of goat breeding and keeping in the
province of Lower Austria (10). Austria actually states in
its letter of 19 October 1998 that the purpose of the aid
is to promote a specific economic sector. Therefore the
measure is selective in the sense that only one region in

this

is

(7) OJ L 215, 30.7.1992, p. 85.
(8) OJ L 291, 30.10.1998, p. 10.

(9) Court of Justice judgment of 14 October 1987, Case C-248/84,

ECR 1987, p. 4013.

(10) See letter of 22 February 1999.

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Austria is granted the aid and in the sense that a
particular sector within agriculture (cid:151) the keeping of
she-goats (cid:151) is promoted.

Distortion of competition

(20) According to the case-law of

in

the

competitive

the Court of
position

Justice,
improvement
an
of
undertaking resulting from a State aid generally points
to a distortion of competition compared with other
competing undertakings not receiving such assistance (11).
Neither the relatively low level of aid nor the relatively
modest size of the beneficiary undertaking rules out the
trade between Member States being
possibility of
distorted (12). Application of
rule is
excluded for the agricultural sector by the Commission
communication on de minimis aids (13).

the de minimis

Interference with trade

(21) A measure affects trade between Member States if

it
hampers imports from other Member States or facilitates
exports to other Member States; the deciding factor is
whether there is a risk that intra-Community trade will
develop differently or is liable to develop differently as a
result of the measure in question.

(22) The products to which the aid scheme in question relates
are involved in trade between Member States and thus
exposed to competition.
In 1998 151 goats were
imported into Austria, worth EUR 4 370. In the same
year 1 518 goats, worth EUR 50 160 were exported
from Austria to other Member States. Even aid of a
relatively small amount is liable to affect trade between
Member
strong
competition in the
recipient
operates (14). Furthermore, they are also in competition
with products from other Member States which the
consumer regards as more or less similar and as possible
substitutes. The aid thus affects trade between Member
States.

in which the

States where,

as here,

sector

there

is

(11) See judgment of the Court of Justice of 17 September 1980, Case
C-730/79, Philip Morris, ECR 1980, p. 2671, paragraphs 11 and
12.

(12) Court of Justice judgments of 21 March 1990, Case C-142/87,
Belgium v Commission, ECR 1990, I-959, paragraph 43, and of
14 September 1994, Cases C-278/92, C-279/92 and C-280/92,
Spain v Commission, ECR 1994, I-4103, paragraphs 40 to 42.

(13) OJ C 68, 6.3.1996.
(14) See Cases 259/85 France v Commission [1987] ECR 4393,
paragraph 24, and C-303/88 Italy v Commission, [1991] ECR
I-1433, paragraph 27.

(23) The conclusion of Austria that, given that Lower Austria
is not self-sufficient in goat products, there is virtually no
trade in the products in question between Member States
does not hold water. Apart from the fact that there is
insufficient evidence to support
this claim, as stated
above, for Article 87(1) to be applied, it is not necessary
in principle for trade between Member States to attain a
certain scale; on the other hand, there is the matter of
product substitutability, so the market to be considered is
broader in scope than the products directly concerned.

(24) The argument put forward by Austria that, given the
relatively low level of prices in Lower Austria compared
there is no distortion of
with other Member States,
competition cannot be accepted because this price level
could, on the contrary, encourage producers to seek
outlets outside Lower Austria, and the aid would help
them to do so by reducing their production costs.

(25) The measure in question thus constitutes aid within the

meaning of Article 87(1) of the EC Treaty.

Article 87(2) of the EC Treaty: exceptions

(26) Exceptions to the prohibition laid down in Article 87(1)
of the EC Treaty are set out in Article 87(2) and (3).

(27) The exceptions listed in Article 87(2) are not applicable,
given the nature of the aid measure and its objectives.
Nor has Austria claimed that Article 87(2) is applicable.

Article 87(3) of the EC Treaty: exceptions at the
Commission’s appreciation

(28) Article 87(3) lists aids which may be considered to be
compatible with the common market. Their compatibility
with the Treaty has to be studied from the point of view
of the Community, not solely that of a given Member
State. To ensure the proper operation of the common
market and compliance with Article 3(1)(g) of the EC
Treaty, the exceptions provided for in Article 87(3) must
be interpreted in a strict manner.

(29) As regards Article 87(3)(a),

it is pointed out that the
measure is not to be applied only in regions where the

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economic
extremely
situation can be described as
unfavourable in relation to the Community as a whole
according to the Guidelines on national regional aid (15)
(having a per capita gross domestic product, measured in
purchasing power standards, of
less than 75 % of the
Community average).

(30) As regards Article 87(3)(b), it is noted that the measure
concerned is not intended to promote the execution of
an important project of common European interest or to
remedy a serious disturbance in the economy of Austria.

(31) Nor is the aid designed or intended or appropriate to the

objectives referred to in Article 87(3)(d).

Article 87(3)(c) of the EC Treaty

(32) Aid to facilitate the development of certain economic
activities or of certain economic areas may be deemed by
the Commission to be compatible with the common
market under Article 87(3)(c) of the EC Treaty if the aid
does not adversely affect trading conditions to an extent
contrary to the common interest.

(37)

(33) The measure in question cannot, however, be regarded as
serving the development of certain economic sectors or
economic areas. Without making the aid conditional
upon structural improvements to production, the effect
and the declared purpose of the measure is to cut the
production costs of beneficiaries for the duration of the
aid. The effect of the measure is therefore limited in time
and disappears as soon as the aid is no longer granted. It
has been the consistent practice of the Commission to
consider such aid as not meeting the criteria of Article
87(3)(c) of the EC Treaty and to regard it as operating
common
aid and as
market (16).

such incompatible with the

the aid scheme in question.

(34) Austria referred to Regulation (EEC) No 2078/92 as
justification for
In the
decision opening the procedure the Commission noted
that it had received no details about the environmental
aspect of the measure. Austria was requested to supply
such information in their comments. The Commission
notes that Austria’s comments on the environmental
aspect of
the measure do not contain further details,
apart from the brief remark that goat farming ensures
utilisation of the mountain countryside, which curbs the
formation of karst and steppe.

(35)

It should be pointed out, on the one hand, that the aid as
it stands would not be granted solely in the mountain
areas of Lower Austria. On the other hand, Austria has
not, despite requests, stated what specific environmetal
benefit would result from continuing to keep goats when
this is no longer economically viable or what costs would
be linked to this keeping of goats. Therefore, there is no
reason to grand aid as a compensation for environmental
undertakings.

(36) Regulation (EEC) No 2078/92 cannot

reducing the number of

therefore be
regarded as a valid legal basis for deeming the aid to be
compatible with the common market; it should also be
stressed that, with the exception of permissible payments
for
livestock units and for
endangered species (see Article 4 of Regulation (EEC) No
2078/92),
cannot be
support per production unit
part-financed under the Regulation or be regarded as
permissible under the system provided for in Articles 87
to 89 of the EC Treaty in conjunction with Article 10 of
the Regulation.

In so far as Austria refers to the (cid:145)endangered breeds(cid:146) aid
category under Article 1(c) of Regulation (EEC) 2078/92,
it should be pointed out the measure does not concern
an aid for a particular breed of goats that is in danger of
extinction. The measure grants aid for keeping (female)
goats in general. Furthermore,
the Commission only
considers a breed to be in danger of extinction on the
basis of scientific data showing trends in numbers of the
breed concerned (17). Austria has not submitted data
indicating that a particular breed of goats is in danger in
Lower Austria. Therefore,
cannot be
under
an
considered
Regulation (EEC) 2078/92 as there is no information
indicating that goats are in danger of extinction in Lower
Austria and as the measure does not concern a goat
breed but goats in general.

the measure

endangered

breeds

aid

for

any

that

giving

indicated

introduced, Austria

(38) Before the main investigation procedure under Article
88(2) was
the
provisions on the compensatory allowance served as a
legal basis, without, however,
further
explanation as to how the measure was geared to the
criteria laid down in Article 17 et seq. of Council
Regulation (EC) No 950/97. The requests to substantiate
these arguments remained unanswered in the comments
by Austria of 22 February 1999. The Commission’s
statements on opening the procedure
remain
undisputed: under Article 37(1) of the said Regulation
the granting of State aids as a compensatory allowance
within the meaning of Article 17 et seq. is excluded. The
compensatory
an
appropriate legal basis for the measure in question.

thus not

allowance

scheme

thus

is

(15) OJ C 74, 10.3.1998, p. 9.
(16) Judgment of the Court of First Instance of 8 June 1995, Case

T-459/93, Siemens, ECR 1995, p. II-1675.

(17) In the past the Commission has aproved aids for goat breeds that
were considered to be in danger of extinction in Austria. This
concerned the breeds Gemsfarbige Gebirgsziege, Pinzgauer Ziege,
Saanenziege, Toggenburgerziege, and Tauernschecken.

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Legal implications of the market organisations

It is as such incompatible with the common market. It is,
moreover, contrary to Council Regulation (EC) No
2467/98,

(39) As mentioned in recital 15,

the relevant common
organisations of the markets determine the applicability
of Articles 87 to 89 of the EC Treaty to the products in
question. In accordance with the consistent case-law of
the Court of Justice, this is to be understood in such a
way that the Member States may grant aid outside the
scope of a common organisation of the market, provided
that it is compatible with the abovementioned Articles.
Within the scope of a market organisation, however,
additional State aids are excluded since such aids would
this market organisation (18).
affect
Even if there were a possibility of an exception under
Article 87(2) or (3) of
it would have
to be rejected by the Commission on the grounds
of
common market
organisation (19).

the operation of

the EC Treaty,

incompatibility

with

the

(40) Austria

in

its

comments

the
Commission’s position as set out when it initiated the
procedure, nor argued that the aid scheme in question
was not to be regarded as an additional measure in the
sense described in recital 39.

disputed

neither

(41) The Commission therefore takes the view that the aid
scheme in question constitutes by its nature (payments
per production unit) an additional measure over and
above the price support mechanisms provided for in the
common organisation of the market in sheepmeat and
goatmeat. It therefore amounts to a State aid in the area
exclusively covered by Council Regulation (EC) No
2467/98 and is therefore unlawful. On this ground alone
the Commission is obliged to prohibit the aid measure.

HAS ADOPTED THIS DECISION:

Article 1

The aid scheme notified by Austria whereby it plans to grant
ATS 250 per she-goat per year in the less-favoured areas of
Lower Austria within the meaning of Article 21 of Council
Regulation (EC) No 950/97 and ATS 200 per she-goat per
year in other areas of Lower Austria, is according to Article
87(1) of the EC Treaty incompatible with the common market.

The aid scheme is furthermore contrary to Council Regulation
(EEC) No 2467/98.

The aid scheme may accordingly not be implemented.

Article 2

Austria shall inform the Commission, within two months of
notification of this Decision, of the measures taken to comply
with it.

Article 3

This Decision is addressed to the Republic of Austria.

V. CONCLUSION

Done at Brussels, 8 December 1999.

(42) The aid is therefore to be regarded as operating aid
prohibited under Article 87(1) of the EC Treaty, while
not qualifying as an exception under Article 87(2) or (3).

For the Commission

Franz FISCHLER

Member of the Commission

(18) Judgment of the Court of Justice of 12 June 1990, Case 35/88,

KYDEP, ECR 1990, p. I-3125.

(19) Court of Justice judgment of 26 June 1979, Case 177/78, Pigs and

Bacon Commission, ECR 1979, p. 2161.