WRITTEN QUESTION E-1098/01 by Hans-Peter Mayer (PPE-DE) and Emilia Müller (PPE-DE) to the Commission. Subsidies for skimmed milk powder.
Date: 2001-04-06
Institutions: European Parliament, Provisional data
Subjects: aid system, animal nutrition, production aid, skimmed milk powder

C 81 E/10

Official Journal of the European Communities

EN

4.4.2002

(2002/C 81 E/013)

WRITTEN QUESTION E-1098/01

by Hans-Peter Mayer (PPE-DE) and Emilia M(cid:252)ller (PPE-DE) to the Commission

Subject: Subsidies for skimmed milk powder

(6 April 2001)

Since the entry into force of Commission Regulation (EC) 2799/1999, liquid skimmed milk (cid:129) as opposed
to skimmed milk powder (cid:129) is no longer subsidised as a feedstuff for fattening calves. This leads to the
absurd situation that, while skimmed milk is subsidised for the production of skimmed milk powder,
farmers who buy skimmed milk to feed their fattening calves no longer receive a subsidy.

Different treatment is being given to skimmed milk and skimmed milk powder, two products which
1.
are completely identical
terms. This rule leads to distortions of competition, because
producers, who have changed to liquid skimmed milk, at considerable expense, are no longer competitive.

in nutritional

2.
The production of skimmed milk powder involves a considerable consumption of fuel, mostly fossil
fuel. This energy imbalance is not compensated for by the greater energy consumption needed for the
transport of skimmed milk.

The water removed from the skimmed milk has to be purified, and yet farmers feeding it to their

3.
fattening calves add water again at a later stage.

The monitoring problem identified by the Court of Auditors in its Special Report 1/99 relates to

4.
skimmed milk powder as well as to skimmed milk.

Could the Commission please state its position on these points?

Answer given by Mr Fischler on behalf of the Commission

(3 September 2001)

The Commission(cid:146)s decision to end the subsidy scheme for skimmed milk used as animal feed should be
seen against the background of the marginal impact of the scheme and the control problems relating to its
implementation.

The quantities of skimmed milk subsidised under the scheme had declined substantially in recent years,
from 628 000 tonnes in 1989 to 211 000 tonnes in 1999. The latter quantity represents less than 4 % of
the total subsidised quantity of skimmed milk and skimmed milk powder used as animal feed and includes
certain quantities of skimmed that could only be used as animal feed because of quality or compositional
problems. The real market impact of the abolished aid scheme was therefore extremely marginal and could
not justify maintaining the control and administrative efforts required for its continuation.

The reasons for this development are structural, linked to the fact that calf rearing became more and more
concentrated in areas where a sufficient supply of skimmed milk was not guaranteed throughout the year.
Against this background, there is reason to believe that investments to convert farms to this type of calf
feeding were a fairly exceptional phenomenon in recent years and limited to very specific circumstances.

It is correct that the Court of Auditors special report No 1/99 identified monitoring problems in relation
to both the use of skimmed milk and skimmed milk powder. However, in the case of skimmed milk
powder these problems related to details of the control procedures that could be solved by minor
adjustments to the rules governing the scheme. In the case of skimmed milk, the problems were of a
structural nature and solving them would have required a major overhaul of the monitoring procedures
and substantial additional control efforts by Member States. This could not be justified by the marginal
impact of the scheme.

4.4.2002

EN

Official Journal of the European Communities

C 81 E/11

The energy balance of using either skimmed milk or skimmed milk powder as animal feed will differ from
case to case, but the Commission agrees that using skimmed milk may ultimately result in less energy
consumption. Therefore, in specific situations the savings on energy costs may result in making the use of
skimmed milk economically attractive despite the loss of the subsidy. However, globally the energy
argument cannot compensate for the overriding arguments in favour of suppressing the aid scheme as
indicated above.

(2002/C 81 E/014)

WRITTEN QUESTION E-1122/01

by Raffaele Costa (PPE-DE) to the Commission

(6 April 2001)

Subject: Request for investigations into the liberalisation of the market in gas in Italy

Can the Commission say what measures the European Union intends to take to ensure that a policy of
liberalisation with regard to the services of distribution, supply and sale of heating gas is at last introduced
in Italy? At present these services are almost exclusively performed by subsidiary undertakings of Snam,
amongst which ITALGAS and EDISON are in a dominant position. They impose conditions, tariffs and
prices without any proper control by their supervisory authorities or consumers, who are unable to
the services
negotiate, discuss or check objectively the prices, consumption, quantity or quality of
provided.

Answer given by Mrs de Palacio on behalf of the Commission

(7 September 2001)

Directive 98/30/EC of the Parliament and of the Council of 22 June 1998 concerning common rules for
the internal market in naturel gas (1) introduces competition in the gas sector and obliges Member States to
open up at least 20 % of demand to competition. Italy has implemented this Directive mainly through a
Government Decree dated 23 May 2000 (Decree No 164/2000) which entered into force on 21 June
2000.

The implementation chosen by Italy goes further than required by the Directive in the sense that 65 % of
final customer demand has already been liberalised. As from 1 January 2003, all customers will be eligible
(100 % opening).

The fact remains that, as in many other Member States, effective choice will evolve gradually, due to the
near monopoly structure of most of the gas markets. The Commission notes here that the Honourable
Member seems to consider Edison to be a subsidiary company of SNAM. This is, however, not the case.
Edison is part of the Montedison group, which is independent of the ENI group, of which SNAM forms
part.

The Italian authorities have taken steps to improve the situation in which little competition exists,
stipulating that from 1 January 2003, no operator can sell to final customers more than 50 % of the
annual national consumption of gas and that 1 January 2002 no operator can introduce in the Italian gas
pipelines more than 75 % of the annual national consumption of gas. These figure will be reduced by 2 %
each year till 2010.

The Italian regulator is responsible for setting the transport, storage and distribution tariffs of natural gas
in Italy, and the Commission understands that it is in the process of setting these tariffs.

In addition, the Commission(cid:146)s proposed new directive concerning common rules for the internal markets
in electricity and natural gas (2) is intended to remove the remaining main obstacles to competition and
create a level playing field in the Community gas market. Among other requirements, it strengthens the
current provisions ensuring the independent behaviour of the operators of transmission and distribution
system, and sets out minimum powers for national regulators.

(1) OJ L 204, 21.7.1998.
(2) COM(2001) 125 final.