2001/259/EC: Commission Decision of 31 January 2001 on the State-aid scheme proposed by Greece for fruit and vegetable growers (notified under document number C(2001) 323)
Date: 2001-01-31
Institutions: European Commission
Subjects: Greece, State aid, control of State aid, fruit, producer organisation, vegetable

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COMMISSION

COMMISSION DECISION

of 31 January 2001

on the State-aid scheme proposed by Greece for fruit and vegetable growers

(notified under document number C(2001) 323)

(Only the Greek text is authentic)

(2001/259/EC)

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

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

After having given the parties concerned the opportunity to
submit their comments, in accordance with the first subpara-
graph of Article 88(2) of the Treaty, and in view of those
comments,

Whereas:

I

Procedure

(1)

(2)

(3)

By letter dated 16 February 1998, recorded as received
on 23 February 1998, the Greek authorities notified an
aid scheme under which Greece intended granting aid to
fruit and vegetable growers whose crops had been
damaged by field mice in the summer of 1997. Requests
for further information were sent on 25 March and 7
August 1998. The Greek authorities replied by letters of
9 June and 8 September 1998.

The Commission initiated the procedure provided for in
Article 88(2) of the EC Treaty in respect of the aid
concerned by letter SG(98) D/9449 of 10 November
1998.

The Decision initiating the procedure was published in
the Official Journal of the European Communities (1). The
Commission invited the other Member States and parties
concerned to submit their comments on the aid in ques-
tion. The Commission has not received any comments
from the parties concerned. The Greek authorities sent
their comments by letter of 16 December 1998.

(1) OJ C 396, 19.12.1998, p. 2.

II

Description

(4)

(5)

(6)

(7)

(8)

The measure notified concerned a draft interministerial
decision approving financial aid for growers in the
prefecture of Thessaloniki whose watermelon and melon
crops had been damaged by field mice during the
summer of 1997.

The recipients were to be full-time growers, 30 % or
more of whose crops had been damaged. The percentage
was calculated by comparing their output in 1997 with
their average output over the three previous years. The
aid was to amount to 30 % of the value of the lost
production. Recipients were to be selected on the basis
of the damage they had suffered individually. Compensa-
tion would be granted for 1998 and 1999 and the cost
of the measure was to total GRD 90 million (around
EUR 265 000).

According to the Greek authorities, the damage caused
by field mice to the watermelon and melon crops in one
municipality and three communes in the prefecture of
Thessaloniki in the summer of 1997 was considerable
(50 % to 70 %). A larger than usual population of field
mice had taken up residence in standing cereal crops
and reproduced there.

The field mice had not been detected in time and action
had not been taken speedily enough. Once it became
apparent that considerable damage had been done, the
area was declared infested and control measures were
taken, but it was not possible to contain the damage.

Around 65 % of the area in question is given over to
cerealgrowing. The cereal crops provided the field mice
with a place of refuge and feeding and did not suffer any
serious damage. After harvesting had taken place the
field mice attacked the watermelon and melon crops.

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(9)

(10)

(11)

(12)

(13)

They also attacked tobacco plantations and vines, but to
a lesser extent. The watermelon and melon crops
suffered the most serious damage and some of them
were said to have been destroyed totally.

According to the Greek authorities, the pest situation is
monitored by the prefectoral authorities who, if there is
a serious problem, apply control measures with the
that damage is usually insignificant. However,
result
detecting a rise in the field mice population may not be
easy in situations where crops occupy the major part of
an area.

The Commission, when initiating the review procedure
and in the light of
its established practice regarding
compensation for damage caused by natural disasters
about
and inclement weather (2),
whether the invasion of field mice in the watermelon
and melon crops affected could be regarded as an excep-
tional occurrence.

expressed doubt

The Commission considered in particular that where a
farmer loses livestock as a result of an epizootic or other
disease or his crops are affected by a plant disease, this
does not normally constitute a natural disaster or excep-
tional occurrence within the meaning of the Treaty. In
such circumstances, compensation or aid intended to
prevent loss may be authorised by the Commission only
on the basis of Article 87(3)(c) of the Treaty, which
provides that aid to facilitate the development of certain
economic activities may be considered compatible with
the common market.

Concerning the criteria applicable to plant diseases
which may qualify for the above exception, the Commis-
sion stated that only infections (including their observa-
tion and eradication) which are of concern to the public
and for which it
is provided under Community or
national rules that the competent public authorities must
take action to prevent the disease in question should be
covered. Situations in which farmers are reasonably
required to take their responsibilities and assume the
normal risks associated with farming do not qualify for
aid measures. The measures
should be preventive,
compensatory or a combination of the two and must
not give rise to compensation in excess of the damage
sustained.

The Commission noted that the information provided
the aid was
by the Greek authorities indicated that
compensatory and would not exceed the losses sustained
by the farmers. The losses, furthermore, were deemed to
have exceeded the maximum of 30 % of average output
for the three preceding years, which was used by the
Commission as a criterion for authorising aid intended
to offset losses caused by exceptional weather condi-
tions.

(2) See earlier aid schemes, for example: N 259/97, N 267/97, N 613/

97, N 732/97, N 734/97, N 57/98 and NN 72/98.

(14)

(15)

(16)

the
The Commission was doubtful, however, about
application of
these criteria by analogy to damage
caused by pests such as field mice. It considered that
unlike damage caused by plant diseases or poor weather
conditions, which by its nature is difficult to predict,
that caused by pests constitutes a normal, ongoing risk
inherent in farming against which farmers can reason-
ably be expected to take precautions.

like
The Commission believed that even if field mice,
other
crop pests, were monitored using warning
systems, there were no Community provisions and there
seemed to be no Greek provisions requiring the Greek
authorities to take action to protect crops against field
mice. Farmers often only needed to be advised to take
the necessary precautions.

From the description of the events provided by the
Greek authorities at the time, it seemed that the field
mice began by infesting the cereal crops and presented a
serious problem for melons and watermelons after the
cereals were harvested. Control measures necessary to
protect the crops appear not to have been taken in time
because the infestation was not detected early enough.
However, the Commission considered that there was
nothing fundamentally unusual in the fact that melons
and watermelons are grown and stored side-by-side with
field crops. Similarly, the Commission considered that
the operative event for the aid was not a natural disaster,
in itself difficult to predict, but the absence of measures
to control pests, which are a permanent threat to crops.

(17)

The Commission took the view therefore that
the
compensation for melon and watermelon growers must
be regarded as an operating aid, which is prohibited by
the Treaty. It considered it necessary therefore to initiate
the procedure provided for in Article 88(2) of
the
Treaty.

III

Comments submitted by Greece

(18)

(19)

By letter dated 16 December 1998, the Greek authorities
submitted their comments on the Commission Decision
initiating the procedure provided for in Article 88(2) in
respect of the aid that had been notified.

The Greek authorities did not share the view of the
Commission that there do not appear to be any Greek
provisions requiring them to take action to protect crops
against field mice. They stated that control was a matter
for the State, and more specifically, for the local agricul-
tural departments. This was evident from Law 6281 of
10 to 15 September 1934 codifying and replacing Law
512 of 20 to 27 December 1914 concerning damage
caused by field mice and locusts.

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(20) Under that Law, the Governor of Thessaloniki

issued
Decision No 12/13639 of 14 July 1997 declaring agri-
cultural areas in the municipality of Epanomi and the
communes of Mesimeri and Skholari to be infested with
field mice. The decision was valid for a year. The Greek
authorities also provided legislation showing that the
State had provided for protection against field mice as
far back as 1893.

(21)

The comments by the Commission to the effect that the
operative event for the aid was not a natural disaster but
instead the absence of measures to control pests, which
are a permanent threat to crops, were considered to be
unfounded. According to the Greek authorities, it is clear
from the documents provided, such as Document No
12/24313 of 25 November 1998 issued by the Direc-
torate for Agricultural Development of the Prefecture of
Thessaloniki — the local department responsible for
monitoring and controlling field mice — that the 1997
attacks on melons and watermelons were not at all
comparable with the usual annual
invasions. Farmers
control these themselves using standard methods and
compensation was never awarded for the damage they
cause. In 1997, according to the Greek authorities, the
population of field mice was 500 times or even 1 000
times larger than usual. The Greek authorities considered
that it was an exceptional invasion which could not have
been foreseen scientifically.
the damage
appeared to have been perpetrated in a short three to
four-day period following the arrival of the field mice.
The Greek authorities used the most effective chemical
the invasion, with the
products available to control
result that the hoped-for effects only began to become
apparent six or seven days following application, once
the damage had been done.

In addition,

(22)

The Greek authorities considered,
in the light of the
above, that it was not possible, from both a scientific
and a practical point of view, to contain the field mice
attack and that it should be considered an exceptional
occurrence within the meaning of the Treaty.

IV

Evaluation

production of certain goods is,
trade between Member States,
common market.

in so far as it affects
incompatible with the

(24)

(25)

The measure notified by the Greek authorities is State
aid within the meaning of the Treaty because it obtains
for recipients an economic advantage to which other
sectors are not entitled.

The aid is liable to affect trade between Member States
in that it favours national production at the expense of
the production of other Member States (3). The fruit and
vegetables
is very open to competition at
Community level and sensitive therefore to any measure
favouring production in one or other Member State.

sector

(26)

The table below shows the level of trade between Greece
and the other Member States and third countries with
regard,

in particular, to melons:

Fresh melons — Total

1999

Tonnes

EUR

Exports — Intra-Community

210

61 200

Exports — Extra-Community

831,1

235 200

Total exports

1 041,9

296 400 (*)

Imports — Intra-Community

91,3

107 000

Imports — Extra-Community

485,5

673 300

Total imports

576,8

780 300 (*)

(*) The average price for exports was

EUR 0,20/kg and for imports

EUR 1,35/kg.

(27)

(28)

to Article 87 of

There are exceptions
the Treaty
however. Article 87(2)(b) provides in particular that aid
to make good the damage caused by natural disasters or
exceptional occurrences may be considered compatible
with the common market.

The Community guidelines for State aid in the agricul-
ture sector (4) contain provisions on aid intended to
compensate for damage caused to agricultural produc-
tion or means of agricultural production. Point 23.3
provides, however, that the Commission will apply the
guidelines to new State aid, including pending notifica-
tions from Member States, with effect from 1 January
2000.

(23) According to Article 87(1) of the EC-Treaty, save as
otherwise provided therein, any aid granted by a
Member State or through State resources in any form
whatsoever which distorts or
to distort
competition by favouring certain undertaking or the

threatens

(3) Greek production of melons and watermelons taken as a whole
accounted for almost one fifth of total output of fresh vegetables in
Greece in 1998 and 1999.
in turn, one fifth of
Community production of melons and watermelons. Total Greek
production of
fresh vegetables accounts for around one tenth of
Community production.
(4) OJ C 28, 1.2.2000, p. 2.

It represented,

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(29) While the case under consideration concerns a State aid
scheme on which the Commission has yet to rule defin-
itively that was notified before 1 January 2000,
it is
important to note that it initiated the review procedure
under Article 88(2) in 1998 and that the assessment
contained in it was made in the light of the provisions in
force at the time. Consequently, in order not to under-
mine the rights of defence of the parties, the Commis-
sion considers that the measure must continue to be
examined in the light of the rules that applied before 1
January 2000.

(34)

The Commission notes furthermore that attacks by field
mice are a recurring phenomenon in Greece and farmers
have means of combating them at their disposal. It can
be concluded therefore that they are not exceptional and
their scale does not in itself change their nature, which
moreover is well known to the Greek authorities.

(35)

Regarding the exceptions contained in Article 87(3),
some clearly do not apply and have not been relied on
by the Greek authorities.

(30) According to its established practice which applies in the
case under consideration (5), the Commission believes
that this provision of the Treaty covers national aid
intended to compensate for material damage of all kinds
caused by earthquakes,
flooding, avalanches or land-
slides. Exceptional occurrences, such as wars, domestic
upheaval or strikes and, subject to certain reservations,
nuclear disasters and fires (depending on their scale)
must be treated in the same way in the view of the
Commission. All these occurrences, irrespective of the
extent of the damage they cause,
justify payment of
compensation to individuals.

(31)

The Commission considers on the other hand that
ice, rain and
weather conditions, such as frost, hail,
drought, cannot be regarded as natural disasters within
the meaning of the Treaty, unless the damage suffered
by the aid recipient represents not less than 30 % of
normal production (20 % in less-favoured regions as
defined in Community legislation). The Commission has
always applied this policy in the past when dealing with
cases involving compensation for damage caused by
natural disasters and inclement weather (6).

(36)

(37)

(32)

In the present case, the Commission doubts whether the
invasion of field mice in the melon and watermelon
crops described above can be considered an exceptional
occurrence in the light of its above policy.

(38)

(33)

The Commission, as it indicated already when initiating
the review procedure, considers that, where a farmer
loses livestock as a result of an epizootic or other disease
or where his crops are affected by a plant disease, the
situation does not normally constitute a natural disaster
or exceptional occurrence within the meaning of the
Treaty.

Consequently, the exceptions laid down in Article 87(3)
must be interpreted strictly when any regional or
sectoral aid programme or any individual application of
a general aid scheme is being examined. In particular,
aid may be granted only where the Commission can
establish that it is needed to attain one of the objectives
in question. Granting the benefit of the exceptions to aid
which does not offer such a reciprocal concession would
amount to permitting trade between Member States to
be adversely affected and distortions of competition
which are unjustified having regard to the Community
interest and, at the same time, undue advantages for
operators in certain Member States.

The Commission considers that the aid in question is
not intended to promote the economic development of
areas where the standard of living is abnormally low or
where there is serious underemployment within the
meaning of Article 87(3)(a). It is not intended either to
promote the execution of an important project of
common European interest or to remedy a serious
disturbance in the economy of a Member State within
the meaning of Article 87(3)(b). Nor is intended to
promote culture and heritage conservation within the
meaning of Article 87(3)(d).

Compensation or aid intended to prevent losses of that
kind may be authorised by the Commission only under
Article 87(3)(c) of the Treaty, which states that aid to
facilitate the development of certain economic activities
may be considered compatible with the common
market. Only the criteria applicable to plant diseases
may be applied in the case under consideration because,
while it is true that attacks by field mice do not consti-
tute a plant disease, their effect is the same, that is to
say, the destruction of agricultural production by living
outside agents. By analogy, therefore, these criteria must
be applied.

(5) Commission working paper on national aids in the event of damage
to agricultural production or means of agricultural production, and
national aid schemes covering part of the premiums for insuring
against these risks (VI/5934/86, 10.11.1986).

(6) See footnote 2.

86 (7):

(7) See footnote 3.

(39) According to Commission working paper VI/5934/

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rules provide that

1. only infections which are of concern to the public
(observation and eradication included) and for which
Community or national
the
competent public authorities must
take action to
control the disease in question should be covered.
Situations in which farmers are reasonably required
to take the responsibilities and assume the normal
risks associated with farming do not qualify for aid
measures;

2. the aid measures should be preventive, compensatory

or a combination of the two;

3. the aid must not give rise to compensation in excess

of the damage sustained.

(43)

(44)

(40) After the review procedure had been initiated, the Greek
authorities provided the information the Commission
needed in order to be able to assess the measure notified
They were able to show, for example, that they are
concerned about the occurrence in question and that
national legislative arrangements for the monitoring and
control of
field mice have been in place for some
considerable time — originally the Law of 13 to 17
February 1893 on the control of field mice and locusts
and now Law 6281 of 10 to 15 September 1934 on the
destruction of field mice and locusts.

(41)

The extent of the invasion and the fact that on 14 July
1997 the competent authorities had declared the area
affected as being infested with field mice appear to
indicate that the farmers were in effect faced with a
situation that went beyond the normal risks associated
with farming which they would be able to assume. The
information provided shows that speedy action by the
competent authorities and the use of appropriate chem-
ical products did not contain and eliminate the attacks
or prevent major damage to the production of melons
and watermelons. Compensation for the resulting losses
seems to be justified therefore.

(42)

The Commission already had noted, when initiating the
procedure, that the information provided by the Greek
authorities indicated that the aid was compensatory and
would not exceed the losses sustained by the farmers.
The Commission can only confirm that finding.

The Commission notes, in the light of the above, that
the requirements imposed by its established practice are
met in the case under consideration, and for that reason
it concludes that the measure notified is compatible with
the Community rules of competition and, in particular,
with Article 87(3)(c) of the Treaty.

V

Conclusion

The measure granting aid to fruit and vegetable growers
whose crops were damaged by field mice during the
summer of 1997 qualifies for the exception provided for
in Article 87(3)(c) of the Treaty since it satisfies the
requirements laid down by Community rules.
is
compatible with the Treaty therefore and may be put
into effect,

It

HAS ADOPTED THIS DECISION:

Article 1

The State aid scheme proposed by Greece for
fruit and
vegetable growers whose crops were damaged by field mice in
the summer of 1997 is hereby deemed compatible with the
common market under Article 87(3)(c) of the Treaty.

The measure may therefore be implemented.

Article 2

This Decision is addressed to the Hellenic Republic.

Done at Brussels, 31 January 2001.

For the Commission

Franz FISCHLER

Member of the Commission