Proposal for a Council Regulation amending Regulation (EC) No 1257/1999 on support for rural development from the European Agricultural Guidance and Guarantee Fund (EAGGF) and repealing Regulation (EC) No 2826/2000
Date: 2003-01-21
Institutions: European Commission
Subjects: EAGGF, EU agricultural market, cereal-growing, dairy production, farm price support, reform of the CAP, support policy

COMMISSION OF THE EUROPEAN COMMUNITIES

Brussels, 21.1.2003
COM(2003) 23 final
2003/0006 (CNS)
2003/0007 (CNS)
2003/0008 (CNS)
2003/0009 (CNS)
2003/0010 (CNS)
2003/0011 (CNS)
2003/0012 (CNS)

Proposal for a

COUNCIL REGULATION

establishing common rules for direct support schemes under the common agricultural policy and support
schemes for producers of certain crops

Proposal for a

COUNCIL REGULATION

amending Regulation (EC) No 1257/1999 on support for rural development
from the European Agricultural Guidance and Guarantee Fund (EAGGF) and repealing Regulation (EC)
No 2826/2000

Proposal for a

COUNCIL REGULATION

on the common organisation of the market in cereals

Proposal for a

COUNCIL REGULATION

on the common organisation of the market in rice

Proposal for a

COUNCIL REGULATION

on the common organisation of the market in dried fodder
for the marketing years 2004/05 to 2007/08

Proposal for a

COUNCIL REGULATION

amending Regulation (EC) No 1255/1999 on the common organisation
of the market in milk and milk products

Proposal for a

COUNCIL REGULATION

establishing a levy in the milk and milk-products sector

(presented by the Commission)

EXPLANATORY MEMORANDUM

A LONG-TERM POLICY PERSPECTIVE FOR SUSTAINABLE AGRICULTURE

1. 

TOWARDS SUSTAINABLE AGRICULTURE

In  1999  the  European  Council  in  Berlin  agreed  the  Agenda  2000  reform  of  the  common
agricultural  policy  (CAP),  a  new  and  important  step  in  the  agricultural  reform  process.
Agenda  2000  gives  concrete  form  to  a  European  Model  of  Agriculture  with  the  aim  of
preserving the diversity of farming systems spread throughout Europe, including regions with
specific  problems,  in  the  years  ahead.  Its  objectives  involve  more  market  orientation  and
increased  competitiveness,  food  safety  and  quality,  stabilisation  of  agricultural  incomes,
integration of environmental concerns into agricultural policy, developing the vitality of rural
areas, simplification and strengthened decentralisation.

These  objectives  are  in  line  with  the  Sustainable  Development  Strategy  agreed  by  the
European  Council  in  Göteborg  in  2001,  which  requires  that  economic,  social  and
environmental  effects  of  all  policies  are  examined  in  a  co-ordinated  way  and  taken  into
account in decision-making.

The Commission adopted the Communication on the Mid-Term Review: Towards Sustainable
Farming1 in  July 2002.  The  Communication  provided an assessment  of the  evolution of the
CAP reform process since 1992. It concluded that much has been achieved. Market balances
have  improved  and  agricultural  incomes  have  developed  favourably.  A  sound  basis  for
enlargement and the current WTO negotiations has been established. Yet in many areas, gaps
remain  between  the  objectives  set  for  the  CAP,  and  its  capacity  to  deliver  the  outcomes
expected by society. The Commission has therefore proposed a number of adjustments to the
CAP.

In  bringing  forward  its  legislative  proposals  the  Commission  has  taken  account  of  the
conclusions of the Brussels European Council in October 2002, and of the intense debate that
has  followed  the  publication  of  the  Communication  in  July  2002  within  the  Council,  the
European  Parliament,  the  European  Economic  and  Social  Committee,  the  Committee  of
Regions  and  other  Consultative  Committees,  as  well  as  civil  society.  The  debate  has  been
enriched by contacts in the member states with farmers' representatives, industry, consumers,
environmental groups and NGOs. These have revealed a broad consensus about the direction
of  further  CAP  reform.  But  have  also  highlighted  concerns  and  uncertainties.  In  bringing
forward  its  proposals  the  Commission  has  sought  to  take  into  account  these  concerns  and
uncertainties, as well as the impact analyses and the new budgetary constraints arising from
the Brussels Agreement.

The  agreement  between  the  Heads  of  State  and  Government  in  Brussels  to  endorse  the
Commission's proposals on the introduction of direct aids in the new member states marked a
major  step  forward  in  the  process  of  enlargement.  This  paved  the  way  for  the  successful
conclusions of  negotiations  with  ten  candidate  countries  in  Copenhagen  in  December  2002.
This agreement set a ceiling for market and direct aids expenditure in an enlarged EU, which
will rise more slowly than the rate of inflation. It also recalled the importance of less-favoured

1

COM(2002) 394 final.

2

                                                
regions and the multifunctional nature of agriculture, confirming the importance of the second
pillar.

In addition to the request by the European Council in Berlin to carry out a mid-term review of
the  CAP,  further  steps  are  needed  to  meet  the  new  tasks  and  challenges  established  in
Göteborg  and  Brussels.  The  new  long-term  framework  for  agricultural  expenditure  in  the
form of the ceiling calls for a clear perspective for the future development of the Common
Agricultural  Policy.  Without  such  certainty,  the  sector  cannot  plan  for  the  future.  A  further
reform  step  is  therefore  necessary  as  indicated  in  the  Communication  on  the  Mid-Term
Review:

– 

– 

– 

To enhance the competitiveness of EU agriculture by setting intervention as a real
safety  net  measure,  allowing  EU  producers  to  respond  to  market  signals  while
protecting them from extreme price fluctuations.

To promote a  more  market  oriented,  sustainable  agriculture  by  completing  the
shift  from  product  to  producer  support  with  the  introduction  of  a  decoupled  single
farm  payment,  based  on  historical  references  and  subject  to  compliance  with
environmental, food safety and  animal welfare requirements. This will improve the
efficiency of income payments to farmers.

To  provide  a  better  balance  of  support  and  strengthen  rural  development  by
transferring funds from the first to the second pillar of the CAP via the introduction
of an EU-wide system of modulation and expanding the scope of currently available
instruments  for  rural  development  to  promote  food  quality,  meet  higher  standards
and foster animal welfare.

Providing a clear policy perspective for the CAP

Further  reform  needs  will  in  all  likelihood  lead  to  additional  expenditure,  since  farmers'
income will need to be stabilised in an appropriate manner. Following the budgetary decisions
in  the  Brussels  Summit,  this  can  only  be  achieved  by  increasing  the  resources  available
through savings  elsewhere in the first pillar. Additional reform efforts will  therefore  require
savings from existing direct payments and market expenditure.

There  is  a  real  risk,  that  if  budget  savings  are  not  generated  in  a  fair,  transparent  and
predictable manner, the EU could face stalemate on further agricultural decisions. It would be
necessary to negotiate reductions and reallocations of expenditure at the same time on a case-
by-case  basis.  It  would  be  almost  impossible  to  ensure  the  balance  and  fairness  of  the
contribution of individual farmers. This would make it very difficult for farmers to plan, since
in  addition  to  further  reform  efforts,  they  would  not  be  able  to  anticipate  how  such  efforts
would be financed.

But the absence of certainty would not only be damaging for farmers' interests, it could also
undermine  decisions  to  move  the  CAP  more  into  line  with  society's  expectations.  Indeed,  a
piecemeal  approach  in  the  CAP  reform  process  could  exacerbate  many  existing  problems,
bringing  real  risks  to  sustainable  agriculture.  The  Commission  has  therefore  proposed  a
mechanism  for  generating  savings,  which  ensures  that  new  financial  needs  can  be  met  in  a
balanced manner across the farming sector.

3

Enhancing the competitiveness of EU agriculture

The impact analysis undertaken supports the necessity of making adjustments proposed by the
Commission  in  July  2002.  Following  the  broad  debate  on  the  options  for  the  dairy  quota
system, it is the Commission's view that the Agenda 2000 reform should be extended to better
reflect price realities and the need to further differentiate the levels of support for butter and
skimmed milk powder.  It is also proposed to modify the quality premia for durum wheat in
order to encourage further quality production in a simpler manner.

Promoting a more market oriented, sustainable agriculture

The  debate  on  the  introduction  of  the  decoupled  single  farm  payment  has  highlighted  a
number of concerns that the Commission has addressed in its proposals.

– 

– 

In order to avoid land abandonment  as  a  result of decoupling,  the  Commission  has
clarified that farmers will have to meet stringent land management obligations as part
of the new cross-compliance requirements. By providing greater farming flexibility,
decoupling will improve the income situation of many farmers in marginal areas.

In order to ensure that the interests of tenant  farmers and landowners  are balanced,
the proposals establish a system of transfers of payment entitlements. Payments will
only be made to farmers actively producing or maintaining land in good agronomic
condition,  maintaining  the  link  to  land.  Specific  arrangements  are  established  for
livestock production taking place without a corresponding land basis.

As  regards  WTO  aspects,  the  new  single  farm  payment  will  be  green  box  compatible.
Decoupling  will  allow  the  European  Union  to  maximise  its  negotiating  capital  in  order  to
achieve its WTO objectives such as non-trade concerns. Hence the proposals for decoupling
could be crucial in getting the best deal for the European Model of Agriculture.

In  order  to  maximise  the  benefits,  particularly  in  administrative  terms,  the  single  farm
payment  will  cover  the  widest  possible  range  of  sectors:  all  products  included  in  the  COP
regime as well as grain legumes, seeds, starch potatoes, beef and sheep; the revised payments
for rice, durum wheat and dried fodder; the milk sector on implementation of dairy payments.
Proposals for other sectors scheduled for reform (sugar, olive oil, tobacco, cotton and possibly
fruit and vegetables, and wine) will follow in the course of 2003.

Strengthening rural development

The proposals to extend the scope of currently available instruments for rural development to
promote food quality, meet higher standards and foster animal welfare have been universally
welcomed.

The  Commission  has  taken  careful  note  of  the  repeated  calls  of  Member  States  for  a
simplification  of  Community  rural  development  policy  under  the  second  pillar.  The
Commission  agrees  with  Member  States  on  the  importance  of  efficient  management  of  the
second  pillar.  It  has  already  demonstrated  its  willingness  to  engage  actively  and
constructively with Member States in such a simplification exercise and is fully committed to
achieving  concrete  results.  The  Commission  tabled  at  the  end  of  December  2002  important
proposals  to  facilitate  management  of  rural  development  programming  at  the  level  of  the
Commission implementing rules. Simplification gains additional importance in the context of
the current proposals to expand the scope and coverage of rural development.

4

A better balance of support

The  fixing  of  a  ceiling  for  agricultural  market  expenditure  in  Brussels  implies  that  the
mechanism  for  shifting  between  budget  headings cannot be  implemented  before  the  start  of
the  next  financial  perspective.  The  Commission  therefore  proposes  introducing  a  system  of
modulation from the start of the next financial perspective to improve the balance of support
between market expenditure and rural development.

The Commission stresses, particularly in the light of the conclusions of the Brussels European
Council, the necessity to further strengthen the second pillar. In this respect, the transfer from
the first to the second pillar should be seen as  a first step in the necessary  reinforcement of
rural development, without prejudice to future discussions.

This shift to the second pillar as well as new financing needs arising from new market reforms
will be achieved through a new system of degression. This system introduces the principle of
progressive  contributions  according  to  the  overall  amount  of  direct  payments  received  by  a
farm in order to ensure that reductions in direct payments are balanced and simple to apply.

2. 

THE IMPACT OF THE PROPOSED REFORMS

The proposed adjustments in CAP policy measures allow maximum flexibility in production
decisions  and  significantly  simplify  the  manner  by  which  support  is  provided  to  producers
while guaranteeing their income stability. Their implementation would remove a large part of
the  environmentally  negative  incentives  within  the  current  system  of  support,  improve
implementation  of  legislation  and  provide  encouragement  for  more  sustainable  farming
practices.  They  also  promote  a  substantial  simplification  in  the  CAP,  facilitate  the
enlargement process and help to better defend the CAP in the WTO.

The adjustments proposed will complement the EU's international objective of ensuring that
developing countries fully benefit from the expansion of world trade, while maintaining food
security.  As  the  impact  analysis  show,  by  reorienting  support  towards  more  extensive
agricultural practices and less trade-distorting domestic support, the proposals are expected to
reduce  export  availability,  thereby  contributing to stronger world  market  prices,  which  is  in
the interest of the agricultural sector in developing countries.

These  adjustments  are  necessary  to  ensure  that  the  EU  is  able  to  provide  a  sustainable  and
predictable policy framework for the European Model of Agriculture over the coming years.
Such changes are made even more urgent by the new budgetary framework. This will enable
the  EU  to  preserve  a  stable  farm  policy  for  the  future,  to  ensure  a  transparent  and  more
equitable  distribution  of  income  support  for  farmers,  and  to  better  respond  to  what  our
consumers and taxpayers want.

2.1. 

The economic impact

The  Commission  has  published  an  in-depth  impact  analysis  of  the  adjustments  proposed  in
the  Mid-Term  Review2.  The  broad  conclusions  of  this  analysis  are  that  in  spite  of  modest
changes in the total level of support, the MTR proposals would entail an improved allocation
of resources between commodities and greater income transfer efficiency.

2

Further details are available at
http://europa.eu.int/comm/agriculture/publi/reports/mtrimpact/index_en.htm.

5

                                                
EU  cereal  production  is  foreseen  to  slightly  decline  in  all  analyses  owing  mainly  to  the
implementation of the decoupling of direct payments, the carbon credit proposal and the cut
in  support  price  level.  These  developments  would  mainly  result  from  lower  cereal  area  as
average  yields  are  expected  to  increase  in  most  analyses.  Wheat  would  appear  to  be  less
affected than coarse grains as it should benefit from better world market price prospects than
most coarse grains.

The  effects  of  the  MTR  proposals  on  oilseed  production  are  more  mixed  although  most
analyses  would  tend  to  show  a  small  decline  in  "food"  oilseed  production.  According  to
Commission analysis, the carbon credit payments would lead to an increase in the production
of energy crops, particularly of oilseeds, mainly at the expense of cereal production.

The implementation of the decoupling of direct payments in the livestock sector would entail
some  decline  in  beef  and  sheep  production  as  it  would  favour  the  extensification  of
production systems, generating an increase in market prices, with positive income effects for
the livestock farms concerned.

The  effects  of  the  MTR  proposals  on  agricultural  income  are  generally  found  to  be  rather
limited  for  the  EU  agricultural  sector  as  a  whole,  with  nevertheless  potentially  diverging
impacts across the various commodity sectors and regions.

While  the  implementation  of  the  decoupling  of  direct  payments  would  entail  an  income
increase in the livestock sector (through higher market prices), this increase would be broadly
offset at the sector level by the negative income impact of the decline in coarse grains market
prices due to the abolition of rye intervention.

2.2. 

The budgetary impact

For EU-15, the proposed measures involve a saving which is estimated at 337 Mio EUR for
the financial year 2006 and of about 186 Mio EUR as from 2010. This impact results from the
fact that the savings under the proposals for market measures are greater than the effect of the
proposals  concerning  direct  aids  estimated  at  + 729 Mio EUR  in  2006  and  around
+ 1 610 Mio EUR as from 2010.

However,  for  the  new  accession  countries,  the  financial  impact  in  2010  is  for  an  additional
expenditure of around 88 Mio EUR which increases annually to reach 241 Mio EUR in 2013,
as a result of the increasing share of direct aids in their total expenditures.

In  order  that  total  expenditures  remain  within  the  new  ceiling  decided  at  Brussels  for  the
financing of market measures and direct aids for an enlarged Europe of 25 Member States, a
reduction  in  the  direct  aids  for  EU-15  is  proposed,  as  from  the  financial  year  2007.  This  is
presented in the following table:

6

EU-25: Expenditure forecasts for heading 1a - Reform proposals

Mio EUR

Heading 1a

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

EU-25 Ceiling
EU-25 Expenditure

42 979
41 681
of which EU-15 41 320
361
CC-10

44 474
43 642
41 339
2 303

45 306
44 395
41 746
2 649

1 298

832

911

Difference
Degression

of which available for
rural development

45 759
45 156
42 183
2 973

603
228
228

46 217
46 123
42 802
3 321

94
751
475

46 679
47 568
43 569
3 999

-889
2 030
741

47 146
48 159
43 513
4 646

-1 013
2 420
988

47 617
48 805
43 513
5 292

-1 188
2 810
1 234

48 093
49 451
43 513
5 938

-1 358
3 200
1 481

48 574
50 099
43 513
6 586

-1 525
3 343
1 481

3. 

MID-TERM-REVIEW AND ACCEDING STATES

In accordance with the Internal arrangements to implement the information and consultation
procedure  for  the  adoption  of  certain  decisions  and  other  measures  to  be  taken  during  the
period preceding accession the Commission will transmit the attached proposals on the Mid-
Term-Review  to  the  acceding  states  after  their  transmission  to  the  Council.  Each  acceding
state  may  request  a  discussion  on  these  proposals  according  to  the  terms  of  the  above
arrangements.3

4. 

DESCRIPTION OF PROPOSALS

4.1. 

Stabilising markets and improving common market organisations

Arable sector

Cereals

A final 5% reduction (of the 20% proposed in Agenda 2000) is proposed to bring the cereals
intervention  price  down  to  EUR  95.35/t  from  2004/05  to  ensure  that  intervention  is  a  real
safety net. To avoid a further accumulation of intervention stocks, rye shall be excluded from
the intervention system.

With the diminishing role of intervention, a seasonal correction for intervention price will no
longer  be  justified.  It  is  therefore  proposed  to  abolish  the  monthly  increment  system.
Production refunds for starches and certain derived products will no longer be applied.

As a consequence of the cut in cereal intervention price, area payments for cereals and other
relevant arable crops will be increased from EUR 63 to EUR 66/t. These will be included in
the single farm payment.

3

The Internal arrangements to implement the information and consultation procedure for the adoption of
certain  decisions  and  other  measures  to  be  taken  during  the  period  preceding  accession  have  not  yet
been adopted by the Commission.

7

                                                
Protein crops

The current supplement for protein crops (EUR 9.5/t) will be maintained and converted into a
crop  specific  area  payment  of  EUR  55.57/ha.  It  will  be  paid  within  the  limits  of  a  new
Maximum Guaranteed Area set at 1.4 million ha.

Durum wheat

The supplement for durum wheat in traditional production zones will be brought from EUR
344.5/ha to EUR 250/ha and included in the single farm payment. The specific aid for other
regions where durum wheat is supported, currently set at EUR 139.5/ha, will be phased out.
The cuts will be implemented over three years, starting in 2004.

A new premium will be introduced to improve the quality of durum wheat with regard to uses
for semolina and pasta production. The premium will be paid in traditional production zones
to farmers who are using a certain quantity of certified seeds of selected varieties. Varieties
will be selected to meet quality requirements for semolina and pasta production. The premium
amounts to EUR 40/ha and is paid within the limits of Maximum Guaranteed Areas that are
currently applying in traditional production zones.

Starch potatoes

Regulation (EEC) No 1766/92 provides for a direct payment for producers of starch potatoes.
Its amount was fixed at EUR 110.54 per tonne of starch in the framework of Agenda 2000.
50%  of  this  payment  will  be  included  into  the  single  farm  payment,  on  the  basis  of  the
historical  deliveries  to  the  industry.  The  remainder  will  be  maintained  as  crop  specific
payment for starch potatoes. The minimum price is abolished.

Dried fodder

Support in the dried fodder will be redistributed between growers and the processing industry.
Direct  support  to  growers  will  be  integrated  into  the  single  farm  payment,  based  on  their
historical deliveries to the industry. National ceilings will apply to take into account current
National Guaranteed Quantities.

During a transitional period of 4 years, a simplified single support scheme for the dehydrated
and  sun-dried  fodder  industry  will  apply  with  a  degressive  aid,  starting  from  EUR  33/t  in
2004/05. The respective National Guaranteed Quantities will be merged.

Seeds

Regulation  (EC)  No  2358/71  established  an  aid  for  the  production  of  selected  seed  species.
The  aid,  currently  paid  per  tonne  of  produced  seeds,  will  be  integrated  into  the  single  farm
payment.  It  will  be  calculated  by  multiplying  the  number  of  aided  tons  by  the  amount
established in application of Article 3 of the above-mentioned Regulation.

Rice

In  order  to  stabilise  market  balances  due  notably  to  the  impact  of  the  Everything  but  Arms
(EBA) initiative, the Commission proposes a one step reduction of the intervention price by
50%  to  an  effective  support  price  of  EUR  150/t  in  line  with  world  prices.  To  stabilise
producers' revenues, the current direct aid will be increased from EUR 52/t to EUR 177/t, a
rate equivalent to the total cereals compensation over the 1992 and Agenda 2000 reforms. Of

8

this,  EUR  102/t  will  become  part  of  the  single  farm  payment  and  paid  on  the  basis  of
historical  rights  limited  by  the  current  maximum  guaranteed  area  (MGA).  The  remaining
EUR 75/t multiplied by the 1995 reform yield will be paid as a crop specific aid. The MGA
will  be  set  at  the  1999-2001  average  or  the  current  MGA,  whichever  is  lower.  A  private
storage  scheme  will  be  introduced  to  be  triggered  when  the  market  price  falls  below  the
effective support price. In addition, special measures will be triggered when market prices fall
below EUR 120/t.

Nuts

The current system will be replaced by an annual flat rate payment of EUR 100/ha granted for
a maximum guaranteed area of 800 000 ha divided into national guaranteed areas. This can be
topped up by an annual maximum amount of EUR 109 per hectare by Member States.

Dairy

In  order  to  provide  a  stable  perspective  for  dairy  farmers,  the  Commission  proposes  the
prolongation of a reformed dairy quota system until the 2014/15 campaign.

In Berlin in March 1999 the European Council decided to delay the entry into force of reform
in the dairy sector due to budgetary  considerations. Since unanticipated budgetary resources
have become available in the current financial perspective, the Commission strongly believes
the  dairy  reform  agreed  in  Berlin  should  be  advanced  by  one  year  in  order  to  achieve  the
objectives and benefits of the reform at the earliest possible date. Furthermore, it is necessary
to reduce  the  support  price  for  milk  with  a  corresponding  quota  increase  of  1%  per  year  in
2007 and 2008 based on reference quantities after the full implementation of Agenda 2000.

The foreseen uniform reduction of 5% per  year will be replaced by asymmetric intervention
price  cuts  of  3.5%/year  for  skimmed  milk  powder  and  7%  per  year  for  butter  over  the  five
year  period.  On  the  whole  this  35%  reduction  in  butter  prices  and  17.5%  reduction  in
skimmed  milk  powder  prices  correspond  to  a  global  reduction  of  28%  for  EU  milk  target
prices over 5 years. Intervention purchases of butter will be suspended above a limit of 30 000
tonnes  per  year.  Above  that  limit,  it  is  proposed  that  purchases  may  be  carried  out  under  a
tender procedure.

Additional compensation in 2007 and 2008 through direct payments will be made, using the
same method of calculation as in Agenda 2000. All dairy payments will be integrated into the
single farm payment.

4.2. 

Decoupling of direct aids – establishment of a single farm payment

A  single  farm  payment  will  replace  most  of  the  premia  under  different  Common  Market
Organisations.  Farmers  will  receive  a  single  farm  payment  based  on  a  reference  amount
covering  payments  for  arable  crops,  beef  and  veal  (including  POSEI  and  Aegean  Islands),
milk and dairy, sheep and goats, starch potatoes, grain legumes, rice, seeds, dried fodder in a
reference period of 2000 to 2002.

This single farm payment will be broken down into payment entitlements in order to facilitate
their  transfer.  Each  entitlement  will  be  calculated  by  dividing  the  reference  amount  by  the
number of hectares,  which  gave  rise  to  this  amount  (including  forage  area)  in  the  reference
years.

9

A claim for payment under entitlement must be accompanied by an eligible hectare defined as
any agricultural area of the holding. Eligible hectares will not include area under permanent
crops,  forests  and  area  used  for  non-agricultural  purposes  on  31  December  2002.  For
livestock  production  without  an  equivalent  land  base  or  where  the  entitlement  is  above
EUR 10 000  a  special  payment  entitlement  will  apply  with  corresponding  conditions.
National ceilings for the single farm payment and the special payment will be established. 1%
of this amount at member state level will be reserved for hardship cases.

Entitlements  may  be  transferred,  with  or  without  land,  between  farmers  within  the  same
Member  State.  A  Member  State  may  define  regions  within  which  transfers  are  limited.
Moreover,  it  will  be  open  to  Member  States  to  adjust  entitlements  with  respect  to  regional
averages.

Farmers  may  use  this  land  for  any  agricultural  activity  except  permanent  crops.  Any
entitlement which has not been used in a period of a maximum of 5 years, apart from force
majeure and exceptional circumstances shall be allocated to a national reserve.

Reinforcement  of  environmental,  food  safety,  animal  health  and  welfare  and
occupational safety standards

Compulsory  cross-compliance  will  apply  to  statutory  European  standards  in  the  field  of
environment,  food  safety,  animal  health  and  welfare  and  occupational  safety  related  to  the
farm level. As a necessary complement to decoupling in order to avoid land abandonment and
subsequent environmental problems, beneficiaries of direct payments will also be obliged to
maintain all agricultural land in good agricultural condition.

This will be applied as a whole-farm approach, and sanctions will be applicable to any case of
non-compliance on a beneficiary's farm. It will apply to all sectors and apply to used as well
as unused agricultural land.

Farmers receiving the single farm payment or other direct payments under the CAP who do
not comply with these statutory standards will be subject to a system of sanctions. The penalty
will take the form  of  a  partial  or full reduction  of the  aid  (depending  on  the  severity  of  the
case).

Farm Advisory System

The farm advisory system will be mandatory as a part of cross-compliance requirements. Its
introduction,  in  the  first  instance,  will  be  limited  to  producers  receiving  more  than
EUR 15 000  per  year  in  direct  payments  or  with  a  turnover  of  more  than  EUR  100 000  per
year.  Other  farmers  will  be  able  to  enter  the  system  on  a  voluntary  basis.  This  service  will
provide advice through feedback to farmers on how standards and good practices are applied
in  the  production  process.  Farm  audits  will  involve  structured  and  regular  stocktaking  and
accounting of material flows and processes at enterprise level defined as relevant for a certain
target issue (environment, food safety, and animal  welfare). Support for farm audits will  be
available under rural development.

Long-term environmental set-aside

Producers currently subject to the set-aside obligation will be obliged to continue set-aside on
an area equivalent to  10%  of their  current COP area  as a condition for  receipt  of the single
farm payment. Organic farming will not be subject to this obligation for the area concerned.
Set-aside will be non-rotational and should not be used for agricultural purposes nor produce

10

crops for commercial purposes. However, member states will be able to allow rotational set-
aside where this was necessary for environmental reasons. In the case of transfers of land, it
shall continue to be set-aside.

Support for energy crops - a carbon credit

The Commission proposes an aid of EUR 45/ha for energy crops. This will apply for an EU
MGA of 1 500 000 ha. The aid will only be granted in respect of areas whose production is
covered  by  a  contract  between  the  farmer  and  the  processing  industry  except  where  the
processing is undertaken by the farmer on the holding. Within five years of the application of
the  energy  crops  scheme,  the  Commission  will  submit  a  report  to  the  Council  on  its
implementation, with proposals if appropriate.

Integrated administration and control system (I.A.C.S.)

The integrated administration and control system will have to be adapted on the basis of the
new  provisions  relating  to  direct  aids.  In  particular,  the  introduction  of  the  single  farm
payment  will  lead  to  a  simplification  of  a  key  component  of  the  present  IACS,  since  the
identification of COP and livestock production will no longer condition the new single farm
payment, except for those products continuing to benefit from a crop-specific payment such
as rice or durum wheat. The current monitoring and control system for payments will be used
to  facilitate  cross  checks  between  payment  entitlements  and  the  surfaces  needed  to  activate
them.  The  system  for  identifying  agricultural  parcels  therefore  remains  fundamental  to  the
new IACS.

Aid applications will need to be subject to administrative controls relating to the eligibility of
surfaces  and  the  existence  of  the  corresponding  payment  entitlements.  These  administrative
controls will have to be complemented by on-the-spot checks, made on a sample basis, which
could employ teledetection methods to control surfaces. Together these controls and checks,
which will have to be co-ordinated by a designated competent authority, will give rise to aid
reductions or exclusions where it is found that the eligibility conditions have not been met.

It should be noted that controls relating to cross compliance will also be covered by the new
IACS, which therefore will not be limited to eligibility conditions. In this way, the proposal
represents a fully integrated administration  and control system.  It  is  foreseen  in  this  respect
that the control systems already  existing  in  the  Member States to verify  respect of statutory
management requirements and good agricultural conditions may be used in the framework of
IACS,  with  which  they  will  also  have  to  be  compatible.  This  concerns  inter  alia  the
identification  and  registration  system  for  animals  pursuant  to  Directive  92/102/EEC  and
Regulation  (EC)  No  1760/2000.  The  system  for  administering  and  controlling  those  aid
schemes laid down in Annex IV of the proposal for the horizontal Regulation will also have to
be compatible with IACS.

4.3. 

Degression

In  order  to  ensure  a  better  balance  of  support  and  to  provide  a  predictable  and  transparent
framework to meet future financing needs, a system of degression is proposed for the period
2006-2012.

The payments granted to a farmer in a given year will be reduced in the following manner:

11

DEGRESSION and MODULATION
Percentage reduction of direct payments
A: Degression
B to D: By tranche of direct payment
E: Modulation – Destined for the Rural Development budget
F: Destined for financing future market needs

A

F

% General reduction in direct payments
% Total reduction applying successively to the different tranches of direct payments
From 1 to 5 000 EUR

2006
1

2007
4

2008
12

2009
14

B
C=(A+E)/2 From 5 001 to 50 000 EUR
D = A
E

0
1
1

0
3
4

0
7.5
12

Above 50 000 EUR
Of which % of the direct payments destined for the Rural Development budget
From 5 001 to 50 000 EUR
Above 50 000 EUR
Of which % of the direct payments destined for financing future market needs
From 5 001 to 50 000 EUR
Above 50 000 EUR

1
1

2
2

3
3

4.5
9

0
0

1
2

2010
16

0
10.5
16

5
5

5.5
11

2011
18

0
12
18

6
6

6
12

2012
19

0
12.5
19

6
6

6.5
13

0
9
14

4
4

5
10

Within  the  system  outlined  above  the  modulation  part  resulting  from  degression,  starting  at
1% in 2006 rising to 6% in 2011, shall be made available to the Member States as additional
Community support for measures to be included in the their rural development programming.
These amounts will be allocated between member states according to criteria of  agricultural
area,  agricultural  employment  and  GDP  per  capita  in  purchasing  power.  The  remaining
amounts will be available for additional financing needs for new market reforms. Degression
and  modulation  would  not  apply  in  the  new  Member  States  until  the  phasing-in  of  direct
payments reaches the normal EU level.

4.4. 

Consolidating and strengthening Rural Development

The Commission proposes  to widen the  scope  of  Community  rural  development  support  by
introducing new measures, without prejudice to the upcoming debate on the reshaping of rural
development policy.. These additions will be made to the 'menu' of measures available under
the  second  pillar  without  changing  the  basic  framework  under  which  rural  development
support is implemented, which the Commission considers would be counter-productive at this
mid-way stage in the current 2000-2006 programming period.

The  new  measures  proposed  are  all  accompanying  measures  and  will  be  financed  by  the
EAGGF-Guarantee  Section  throughout  the  EU  territory.  They  are  all  targeted  primarily  at
farmer beneficiaries. It will be for Member States and regions to decide if they wish to take up
these measures within their rural development programmes. The new measures will comprise:

First, introduction of a new Chapter in Regulation (EC) No 1257/1999 entitled 'Food Quality'
comprising two measures:

– 

– 

Incentive  payments  will  be  permitted  for  farmers  who  on  a  voluntary  basis
participate  in  Community  or  recognised  national  schemes  designed  to  improve  the
quality of agricultural products and the production process used, and give assurances
to consumers on these issues. Such support will be payable annually for a maximum
5-year period, and up to a maximum of EUR 1 500 per holding in a given year.

Support  for  producer  groups  for  activities  intended  to  inform  consumers  about  and
promote  the  products  produced  under  quality  schemes  supported  under  the  above
measure.  Public  support  will  be  permitted  up  to  a  maximum  of  70%  of  eligible
project costs.

12

Secondly,  introduction  of  a  new  Chapter  entitled  'Meeting  Standards',  comprising  two
measures:

– 

– 

Possibility for Member States to offer temporary and degressive support to help their
farmers  to  adapt  to  the  introduction  of  demanding  standards  based  on  Community
legislation  concerning  the  environment,  public,  animal  and  plant  health,  animal
welfare and occupational safety. Aid levels must be modulated to take account of the
level  of  additional  obligations  and  operating  costs  for  farmers  associated  with  the
introduction  of  a  particular  standard.  Aid  will  be  payable  on  a  flat-rate  basis,  and
degressive  for  a  maximum  period  of  5  years.  Aid  will  be  subject  to  a  ceiling  of
maximum EUR 10 000 per  holding  in a given  year.  In  no  case  will  aid  be  payable
where  the  non-application  of  standards  is  due  to  the  non-respect  by  an  individual
farmer of standards already included in national legislation.

Support  for  farmers  to  help  them  with  the  costs  of  using  farm  advisory  services.
Farmers may benefit from public support of up to a maximum of 80% of the cost of
such services the first time they are used, subject to a ceiling of EUR 1 500.

Thirdly,  introduction  within  the  current  agri-environment  Chapter  of  Regulation  (EC)
No 1257/1999 the possibility  to  pay  support  for  farmers  who  enter  into  commitments  for  at
least 5 years to improve the welfare of their farm animals and which go beyond usual  good
animal  husbandry  practice.  Support  will  be  payable  annually  on  the  basis  of  the  additional
costs  and  income  foregone  arising  from  such  commitments,  with  annual  payment  levels  of
maximum EUR 500 per livestock unit.

In addition to a further series of technical modifications arising from the introduction of new
measures, the Commission proposes to use the opportunity of the amendment of Regulation
(CE) No 1257/1999 in the context of the current proposals to also simplify and clarify certain
provisions at the level of the Council regulation. These amendments concern a clarification of
the  scope  of  the  Forestry  and  Training  Chapters  and  the  adding  within  the  Chapter  on  the
adaptation and development of rural areas (the so-called Article 33 measures) a new indent to
cover the management costs associated with local partnership groups.

In 2004, the Commission shall review the extent to which rural development is contributing to
these objectives of sustainable development  in particular  in  relation  to  bio-diversity  and  the
implementation  of  Directive  92/43/EC  (i.e.  the  Habitats  Directive).  Moreover,  the  same
review  will  consider  the  possibility  of  extending  the  support  provided  to  farmers  to  meet
newly enacted Community food quality standards also to small, traditional food producers. If
necessary, the Commission will make proposals to enhance the contribution of the Common
Agriculture Policy to these objectives.

13

2003/0006 (CNS)

Proposal for a

COUNCIL REGULATION

establishing common rules for direct support schemes under the common agricultural
policy and establishing support schemes for producers of certain crops

CONTENTS

TITLE I

SCOPE AND DEFINITIONS

TITLE II

GENERAL PROVISIONS

Chapter 1
Chapter 2
Chapter 3
Chapter 4
Chapter 5

Cross compliance
Degression and modulation
Farm advisory system
Integrated administrative and control system
Other general provisions

TITLE III

SINGLE PAYMENT SCHEME

Chapter 1
Chapter 2
Chapter 3
Section 1
Section 2
Chapter 4
Section 1
Section 2
Chapter 5

TITLE IV
Chapter 1
Chapter 2
Chapter 3
Chapter 4
Chapter 5
Chapter 6
TITLE V

General provisions
Establishment of the amount
Entitlements
Entitlements based on area
Special Payment Entitlements
Land use under the single payment scheme
Use of the land
Set-aside
Regional implementation

OTHER AID SCHEMES
Specific quality premium for durum wheat
Protein crop premium
Crop specific payment for rice
Area payment for nuts
Aid for energy crops
Aid for starch potato
TRANSITIONAL AND FINAL RULES

List of support schemes fulfilling the criteria set out in Article 1
National ceilings referred to in Article 11(3)
Statutory management requirements referred to in Articles 3 and 4
Good agricultural conditions referred to in Article 5
 Compatible support schemes referred to in Article 29
List of direct payments in relation to the single payment referred to in Article 36

ANNEX I
ANNEX II
ANNEX III
ANNEX IV
ANNEX V
ANNEX VI
ANNEX VII Calculation of the reference amount referred to in Article 40
ANNEX VIII National Ceilings referred to in Article 44
ANNEX IX

Traditional production zones for durum wheat as referred to in Article 61

THE COUNCIL OF THE EUROPEAN UNION,

Having  regard  to  the  Treaty  establishing  the  European  Community,  and  in  particular  Articles 36
and 37 thereof,

14

Having regard to the proposal from the Commission4,

Having regard to the opinion of the European Parliament5,

Having regard to the opinion of the European Economic and Social Committee6,

Having regard to the opinion of the Committee of the Regions7,

Whereas:

(1) 

(2) 

(3) 

(4) 

(5) 

Common  conditions  should  be  established  for  direct  payments  under  the  various  income
support schemes in the framework of the common agricultural policy.

The  full  payment  of  direct  aid  should  be  linked  to  compliance  with  rules  relating  to
agricultural land, agricultural production and activity. Those rules should serve to incorporate
in the common market organisations basic standards for the environment, food safety, animal
health and welfare, occupational safety for farmers and good agricultural conditions. If those
basic standards are not met, Member States should withdraw direct aid in whole or in part on
the basis of criteria which are proportionate, objective and graduated. Such withdrawal should
be  without  prejudice  to  sanctions  laid  down  now  or  in  the  future  under  other  provisions  of
Community or national law.

In order to maintain land in good agricultural condition, standards should be established for a
number of areas in which standards do not currently exist. Those standards should be based on
good  farming  practices  which  may  or  may  not  have  a  basis  in  provisions  of  the  Member
States. It is therefore appropriate to establish a Community framework within which Member
States  may  adopt  standards  taking  account  of  the  specific  characteristics  of  the  areas
concerned, including soil and climatic conditions and existing farming systems (land use, crop
rotation, farming practices) and farm structures.

Since  permanent  pasture  has  a  positive  environmental  effect,  it  is  appropriate  to  adopt
measures  to  encourage  the  maintenance  of  existing  permanent  pasture  to  avoid  a  massive
conversion into arable land.

In  order  to  achieve  a  better  balance  between  policy  tools  designed  to  promote  sustainable
agriculture  and  those  designed  to  promote  rural  development,  a  system  of  progressive
reduction of direct payments should be introduced on a compulsory Community-wide basis for
the years 2007 to 2012. All direct payments, beyond certain amounts, should be reduced by a
certain percentage each year. The savings made should be used to finance, where the case may
be,  further  reforms  of  sectors  under  the  common  agricultural  policy.  It  is  appropriate  to
provide for Commission’s powers to adjust the said percentages where the case may be. Until
2007, Member States may continue to apply the current modulation on an optional basis under
Council Regulation (EC) No 1259/1999 of 17 May 1999 establishing common rules for direct
support schemes under the common agricultural policy8.

(6) 

In  order  to  help  farmers  to  meet  the  standards  of  modern,  high-quality  agriculture,  it  is
necessary  that  Member  States  establish  a  comprehensive  system  offering  advice  to
commercial farms. The farm advisory system should help farmers to become more aware of
material flows and on-farm processes relating to the environment, food safety, animal health

4

5

6

7

8

OJ C …, …, p. …
OJ C …, …, p. …
OJ C …, …, p. …
OJ C …, …, p. …
OJ  L  160,  26.6.1999,  p.  113.  Regulation  amended  by  Regulation  (EC)  No  1244/2001  (OJ  L  173,
27.6.2001, p. 1).

15

                                                
and  welfare  and  occupational  safety  standards  without  in  any  way  affecting  their  obligation
and responsibility to respect those standards.

(7) 

In order to facilitate the introduction of the farm advisory system, it should, as a first step, be
mandatory as part of the cross-compliance requirements for producers who receive more than
a certain amount per year in direct payments or have a turnover higher than a certain amount.
Other  farmers  should  be  able  to  enter  the  system  on  a  voluntary  basis.  Due  to  its  nature  of
affording advice to farmers, it is appropriate for the information obtained in the course of the
advisory  activity  to  be  treated  as  confidential,  except  in  case  of  serious  infringements  of
Community or national law.

(8)  Member States must, in accordance with Article 8 of Council Regulation (EC) No 1258/1999
of  17  May  1999  on  the  financing  of  the  common  agricultural  policy9,  take  the  measures
necessary to satisfy  themselves that  transactions  financed by  the  “Guarantee”  Section  of  the
European  Agricultural  Guidance  and  Guarantee  Fund (EAGGF)  are  actually  carried  out  and
are executed correctly, and prevent and deal with irregularities.

(9) 

(10) 

(11) 

In  order  to  improve  the  effectiveness  and  usefulness  of  the  administration  and  control
mechanisms,  it  is  necessary  to  adapt  the  system  established  by  Council  Regulation  (EEC)
No 3508/92  of  27  November  1992  establishing  an  integrated  administration  and  control
system  for  certain  Community  aid  schemes10  with  a  view  to  including  the  single  payment
scheme, the support schemes for durum wheat, protein crops, energy crops, rice, potato starch
and nuts as well as controls on the application of the rules on cross compliance, modulation
and the farm advisory system. Provision should be made for the possibility of including, at a
later stage, other aid schemes.

For the sake of effective control and to prevent the submission of multiple aid applications to
different paying agencies within one Member State, each Member State should set up a single
system to record the identity of farmers submitting aid applications subject  to the integrated
system.

The various components of the integrated system are aimed at a more effective administration
and control. Therefore, in the case of Community schemes not covered by this Regulation, the
Member States should be authorised to avail themselves  of the system  on  condition  they  do
not in any way act contrary to the provisions concerned.

(12)  Given the complexity of the system and the large number of aid applications to be processed,
it  is  essential  to  use  the  appropriate  technical  resources  and  administration  and  control
methods.  As  a  result,  the  integrated  system  should  comprise,  in  each  Member  State,  a
computerised data base, an identification system for agricultural parcels, aid applications from
farmers,  a  harmonised  control  system  and,  in  the  single  payment  scheme,  a  system  for  the
identification and recording of payment entitlements.

(13) 

(14) 

To enable the data collected to be processed and used for the verification of aid applications, it
is  necessary  to  set  up  high-performance  computerised  data  bases  which  make  it  possible  in
particular to carry out cross-checks.

The identification of agricultural parcels is a key element in the correct application of schemes
linked  to  surface  area.  Experience  has  shown  that  the  existing  methods  have  certain
deficiencies.  Therefore,  provision  should  be  made  for  an  identification  system  to  be  set  up,
where necessary, with the aid of remote sensing.

9

10

OJ L 160, 26.6.1999, p. 103.
OJ L 355, 5.12.1992, p. 1. Regulation last amended by Commission Regulation (EC) No 495/2001 (OJ
L 72, 14.3.2001, p. 6).

16

                                                
(15) 

For the sake of simplification, Member States should be authorised to make provision for the
submission  of  a  single  application  for  several  aid  schemes  and  to  replace  the  annual
application by a permanent application subject only to annual confirmation.

(16)  Member  States  should  be  enabled  to  use  amounts  which  become  available  as  a  result  of
payment  reductions  under  modulation  for  certain  additional  measures  in  the  framework  of
rural development support provided for under Council Regulation (EC) No 1257/1999 of 17
May  1999  on  support  for  rural  development  from  the  European  Agricultural  Guidance  and
Guarantee Fund (EAGGF) and amending and repealing certain Regulations11.

(17) 

(18) 

(19) 

Since  the  amounts  which  will  become  available  as  a  result  of  cross  compliance  are  not
foreseeable sufficiently far ahead to be used for additional measures in the framework of rural
development support, those amounts should be credited to the EAGGF “Guarantee” Section,
except for a certain percentage which should be retained by the Member States.

Payments provided for under Community support schemes should be made by the competent
national  authorities  to  beneficiaries  in  full,  subject  to  any  reductions  provided  for  in  this
Regulation, and within prescribed periods.

The support schemes under the common agricultural policy provide for direct income support
in particular with a view to ensuring a fair standard of living for the agricultural community.
This  objective  is  closely  related  to  the  maintenance  of  rural  areas.  In  order  to  avoid
misallocations  of  Community  funds,  no  support  payments  should  be  made  to  farmers  who
have artificially created the conditions required to obtain such payments.

(20)  Common support schemes have to be adapted to developments, if necessary within short time
limits.  Beneficiaries  cannot,  therefore,  rely  on  support  conditions  remaining  unchanged  and
should be prepared for a possible review of schemes in the light of market developments.

(21) 

(22) 

(23) 

(24) 

In  view  of  the  significant  budgetary  implications  of  direct  payment  support  and  in  order  to
better appraise their impact, Community schemes should be subject to a proper evaluation.

Enhancing  the  competitiveness  of  Community  agriculture  and  promoting  food  quality  and
environment standards necessarily entail a drop in institutional prices for agricultural products
and  an  increase  in  the  costs  of  production  for  agricultural  holdings  in  the  Community.  To
achieve  those  aims  and  promote  more  market-oriented  and  sustainable  agriculture,  it  is
necessary to complete the shift from production support to producer support by introducing a
system  of  decoupled  income  support  for  each  farm.  While  decoupling  will  leave  the  actual
amounts  paid  to  farmers  unchanged,  it  will  significantly  increase  the  effectiveness  of  the
income  aid.  It  is,  therefore,  appropriate  to  make  the  single  farm  payment  conditional  upon
cross-compliance with environmental, animal-welfare and food-quality criteria.

Such a system should combine a number of existing direct payments received by a producer
from various schemes in a single payment, determined on the basis of previous entitlements,
within a reference period, adjusted to take into  account  the  full implementation  of  measures
introduced in the framework of Agenda 2000 and of the changes to the amounts of aid made
by this Regulation.

Since the benefits in terms of administrative  simplification  will increase if  many  sectors  are
included  the  scheme  should,  in  a  first  stage,  cover  all  products  included  in  the  arable  crops
regime as well as grain legumes, seeds, beef and sheep. The inclusion of beef and sheep makes
it necessary to extend the scheme to some premiums which are paid in the outermost regions
and  Aegean  islands  as  a  supplement  to  the  direct  aids  provided  for  in  those  common

11

OJ L 160, 26.6.1999, p. 80.

17

                                                
organisations of the markets, in order to achieve further simplification and to avoid leaving in
place a legal and administrative framework for bovine animals and sheep for a limited number
of  producers  in  those  areas.  The  revised  payments  for  rice  and  durum  wheat  as  well  as  the
payment  in  the  milk  sector  should  also  be  integrated  into  the  scheme.  Payments  for  starch
potatoes and dried fodder should also be included in the scheme, while separate payments for
the processing industry should be maintained.

Specific measures should be laid down for hemp, to ensure that illegal crops cannot be hidden
among  the  crops  eligible  for  the  single  payment,  thereby  adversely  affecting  the  common
market  organisation  for  hemp.  Provision  should  therefore  be  made  for  area  payments  to  be
granted only for areas sown to varieties of hemp offering certain guarantees with regard to the
psychotropic  substance  content.  The  references  to  the  specific  measures  provided  for  by
Council Regulation (EC) No 1673/2000 of 27 July 2000 on the common organisation of the
markets in flax and hemp grown for fibre12 should be adapted accordingly.

In  order  to  leave  farmers  free  to  choose  what  to  produce  on  their  land,  including  products
which are still under coupled support, thus increasing market orientation, the single payment
should not be conditional on production of any specific product.

In order to establish the amount to which a farmer should be entitled under the new scheme, it
is  appropriate  to  refer  to  the  amounts  granted  to  him  during  a  reference  period.  To  take
account of specific situations, a national reserve should be established. That reserve may also
be used to facilitate the participation of new farmers in the scheme. The single payment should
be established at farm level.

The  overall  amount  to  which  a  farm  is  entitled  should  be  split  into  parts  (payment
entitlements)  and  linked  to  a  certain  number  of  eligible  hectares  to  be  defined,  in  order  to
facilitate  transfer  of  the  premium  rights.  To  avoid  speculative  transfers  leading  to  the
accumulation of payment entitlements without a corresponding agricultural basis, in granting
aid, it is appropriate to provide for a link between entitlements and a certain number of eligible
hectares,  as  well  as  the  possibility  of  limiting  the  transfer  of  entitlements  within  a  region.
Specific  provisions  should  be  laid  down  for  aid  not  directly  linked  to  an  area  taking  into
account the peculiar situation of sheep and goat rearing.

To  ensure  that  the  total  level  of  support  and  entitlements  do  not  exceed  current  budgetary
constraints  at  Community  or  national  level  and,  where  applicable,  at  regional  level,  it  is
appropriate to provide for national ceilings calculated as the sum of all funds granted in each
Member  State  for  the  payment  of  aids  under  the  relevant  support  schemes.  Proportional
reductions should be applicable if the ceiling is overshot.

In  order  to  maintain  the  supply  control  benefits  of  set-aside,  while  reinforcing  its
environmental  benefits  under  the  new  system  of  support,  the  set-aside  conditions  for  arable
land should be maintained.

In order to allow flexibility to respond to specific situations, Member States should have the
option  to  define  a  certain  balance  between  individual  payment  entitlements  and  regional  or
national averages.

In order to maintain the role of durum wheat production in traditional production area while
strengthening  the  granting  of  the  aid  to  durum  wheat  respecting  certain  minimum  quality
requirements,  it  is  appropriate  to  reduce,  over  a  transitional  period,  the  current  specific
supplement for durum wheat in traditional areas and to abolish the special aid in established

(25) 

(26) 

(27) 

(28) 

(29) 

(30) 

(31) 

(32) 

12

OJ L 193, 29.7.2000, p 16. Regulation amended by Commission Regulation (EC) No 651/2002 (OJ L
101, 17.1.2002, p. 3).

18

                                                
(33) 

(34) 

areas.  Only  cultivation  which  produces  durum  wheat  suitable  for  use  in  the  manufacture  of
semolina and pasta products should be eligible for that aid.

In order to strengthen the role of protein-rich crops and to provide an incentive to increase the
production  of  these  crops,  it  is  appropriate  to  provide  for  a  supplementary  payment  for
producers of these crops. To ensure a correct application of the new scheme, certain conditions
for entitlement to aid should be established. A maximum guaranteed area should be prescribed
and proportional reductions applied if the maximum guaranteed area is exceeded.

In order to maintain the role of rice production in traditional production areas, it is appropriate
to provide for a supplementary payment for rice producers. To ensure a correct application of
the new scheme, certain conditions for entitlement to aid should be established. National base
areas should be established and reductions applied if the areas are exceeded.

(35)  New support arrangements for nuts should be established to avoid the potential disappearance
of nut production in traditional areas and the subsequent negative environmental, rural, social
and economic consequences. To ensure a correct application of the new arrangements, certain
conditions for entitlement to aid should be established, including a minimum tree density and
plot  size.  In  order  to  cater  for  specific  needs,  Member  States  should  be  entitled  to  provide
additional aid.

(36) 

To  avoid  budgetary  overshoot,  a  maximum  guaranteed  area  should  be  prescribed  and
proportional reductions applied if the maximum guaranteed area is exceeded, concentrated in
Member  States  which  overshoot  their  area.  To  ensure  balanced  application  throughout  the
Community, this area should be allocated in proportion to areas of nut production in Member
States. The Member States should be responsible for allocating the areas within their territory.
Areas subject to improvement plans should not be eligible for aid under the new scheme until
the plan has expired.

(37) 

In  order  to  capitalise  on  the  success  of  improvement  plans  in  regrouping  supply,  Member
States may make entitlement to Community aid and national aid conditional on membership of
producer organisations. To avoid disruption, a smooth transition must be ensured to the new
scheme.

(38)  Currently, support for energy crops consists of the possibility to grow industrial crops on set-
aside land. Energy crops account for the largest amount of non-food production on set-aside
land. Specific aid for energy crops with the objective of increasing carbon dioxide substitution
should  be  established.  The  area  allocation  between  Member  States  should  take  into  account
historical energy crop production on set-aside and arrangements for C02 commitment burden
sharing as well as the present base areas for main crops. The arrangements should be reviewed
after a prescribed  period  taking  into  account the implementation  of  the  Community  biofuels
initiative.

(39) 

In order to maintain starch production in traditional areas of production and to recognise the
role  of  potato  production  in  the  agronomic  cycle,  it  is  appropriate  to  provide  for  a
supplementary  payment  for  potato  starch  producers.  Moreover,  in  so  far  as  the  payment
system for starch potato producers is to be partially included in the single payment scheme and
due  to  the  abolition  of  the  starch  potato  minimum  price  and  the  starch  production  refunds,
Council Regulation (EC) No 1868/94 of 27 July 1994 establishing a quota system in relation
to the production of potato starch13 should be amended.

13

OJ  L  197,  30.7.1994,  p.  4.Regulation  last  amended  by  Regulation  (EC)  No  962/2002  (OJ  L  149,
7.6.2002, p. 1).

19

                                                
(40)  As  a  result  of  the  aforementioned  changes  and  new  provisions,  Council  Regulations  (EEC)
No 3508/92,  (EC)  No  1577/96  of  30 July  1996  introducing  a  specific  measure  in  respect  of
certain grain legumes14 and (EC) No 1251/1999 of 17 May 1999 establishing a support system
for  producers  of  certain  arable  crops15  should  be  repealed.  Council  Regulation  (EC)  No
1259/1999 should also be repealed, except Article 2a and Articles 4, 5 and 11, which provide
for specific temporary and optional regimes that will expire respectively in 2005 and 2006.

(41) 

The specific provisions concerning direct payments in Council Regulations (EEC) No 2019/93
of  19  July  1993  introducing  specific  measures  for  the  smaller  Aegean  islands  concerning
certain  agricultural  products16,  (EC)  No  3072/95  of  22  December  1995  on  the  common
organization  of  the  market  in  rice17,  (EC)  No  1254/1999  of  17  May  1999  on  the  common
organisation  of  the  market  in  beef  and  veal18,  (EC)  No  1255/1999  of  17  May  1999  on  the
common  organisation  of  the  market  in  milk  and  milk  products19,  (EC)  No  1452/2001  of
28 June  2001  introducing  specific  measures  for  certain  agricultural  products  for  the  French
overseas  departments,  amending  Directive  72/462/EEC  and  repealing  Regulations  (EEC)
No 525/77  and  (EEC)  No  3763/91  (Poseidom)20,  (EC)  No  1453/2001  of  28  June  2001
introducing specific measures for certain agricultural products for the Azores and Madeira and
repealing  Regulation  (EEC)  No  1600/92  (Poseima)21,  (EC)  No  1454/2001  of  28  June  2001
introducing  specific  measures  for  certain  agricultural  products  for  the  Canary  Islands  and
repealing Regulation (EEC) No 1601/92 (Poseican)22 and (EC) No 2529/2001 of 19 December
2001 on the common organisation of the market in sheepmeat and goatmeat23 have effectively
lost their substance and should therefore be deleted.

(42) 

The  measures  necessary  for  the  implementation  of  this  Regulation  should  be  adopted  in
accordance with Council Decision 999/468/EC of 28 June 1999 laying down the procedures
for the exercise of implementing powers conferred on the Commission24.

HAS ADOPTED THIS REGULATION:

TITLE I
SCOPE AND DEFINITIONS

Article 1
Scope

This Regulation establishes:

– 

– 

– 

14

15

16

17

18

19

20

21

22

23

24

common rules on direct payments under support schemes in the framework of the common
agricultural  policy  which  are  financed  by  the  "Guarantee"  Section  of  the  European
Agricultural  Guidance  and  Guarantee  Fund  (EAGGF),  except  those  provided  for  under
Regulation (EC) No 1257/1999;

an income support for farmers (hereinafter referred to as the "single payment scheme");

support schemes for producers of durum wheat, protein crops, rice, nuts, energy crops and
potato starch.

OJ L 206, 16.8.1996, p. 4.
OJ L 160, 26.6.1999, p. 1.
OJ L 184, 27.7.1993, p. 1.
OJ L 329, 30.12.1995, p. 18.
OJ L 160, 26.6.1999, p.21.
OJ L 160, 26.6.1999, p.48.
OJ L 198, 21.7.2001, p. 11.
OJ L 198, 21.7.2001, p. 26.
OJ L 198, 21.7.2001, p. 45.
OJ L 341, 22.12.2001, p.3.
OJ L 184, 17.7.1999, p. 23.

20

                                                
For the purposes of this Regulation, the following definitions shall apply:

Article 2
Definitions

(a)

(b)

(c)

(d)

(e)

1. 

2. 

1.

2.

"farmer" means  a  natural  or legal  person,  or  a  group  of  natural  or legal  persons,  whatever
legal  status  is  granted  to  the  group  and  its  members  by  national  law,  whose  holding  is
situated  within  Community  territory,  as  referred  to  in  Article  299  of  the  Treaty,  and  who
exercises an agricultural activity,

"holding" means all the production units managed by a farmer situated within the territory of
the same Member State,

"agricultural  activity"  means  the  production,  rearing  or  growing  of  agricultural  products
including harvesting, milking and farmed animal production, or maintaining the land in good
agricultural conditions as established under Article 5,

"direct payment" means a payment granted directly to farmers under a support scheme listed
in Annex I,

"payments in a given calendar year" means the payments granted or to be granted in respect
of  the  year  concerned,  including  all  payments  in  respect  of  other  periods  starting  in  that
calendar year.

TITLE II
GENERAL PROVISIONS

Chapter 1
Cross compliance

Article 3
Main requirements

A  farmer  receiving  direct  payments  shall  respect  the  statutory  management  requirements
referred to in Annex III and the good agricultural conditions established under Article 5.

The  competent  national  authority  shall  provide  the  farmer  with  the  list  of  statutory
management requirements and good agricultural conditions to be respected.

Article 4
Statutory management requirements

The  statutory  management  requirements  referred  to  in  Annex  III  shall  be  established  by
Community legislation in the following areas:

– 
– 
– 
– 

public, animal and plant health,
occupational safety,
environment,
animal welfare.

The acts referred to in Annex III shall apply within the framework of this Regulation in the
version as amended from time to time.

21

Article 5
Good agricultural conditions

Member States shall define good agricultural conditions taking into account the framework set up in
Annex IV.

Member  States  shall  ensure  that  land  which  was  under  permanent  pasture  on  31  December  2002  is
maintained under permanent pasture.

Article 6
Reduction or exclusion from payments

Where  the  statutory  management  requirements  or  good  agricultural  conditions  are  not
complied  with,  the  total  amount  of  direct  payments  to  be  granted  in  the  calendar  year  in
which  the  non-compliance  occurs,  and  after  application  of  Article  10,  shall  be  reduced  or
cancelled in accordance with the detailed rules laid down under Article 7.

The  reductions  or  exclusions  referred  to  in  paragraph  1  shall  only  apply  if  the  non-
compliance relates to:

(a)

(b)

(c)

an  activity  concerning  agricultural  products,  as  listed  in  Annex I  of  the  Treaty,
including cotton, but with the exception of fishery products,

an agricultural land of the holding, including the parcels on long term set aside,

the  labour  force  used,  even  on  a  temporary  basis,  on  the  holding  for  agricultural
activities.

Article 7
Detailed rules for reduction or exclusion

Detailed rules for the reductions and exclusions referred to in Article 6 shall be laid down in
accordance with the procedure referred to in Article 82(2). In this context, account shall be
taken of the severity, extent, permanence and repetition of the non-compliance found as well
as of the criteria set out in paragraphs 2, 3 and 4.

In  case  of  negligence,  the  percentage  of  reduction  shall  not  exceed  10%  and,  in  case  of
repeated non-compliance, 20%.

In case of intentional non-compliance, the percentage of reduction shall not be less than 50%
and may go as far as total exclusion from one or several aid schemes and apply for one or
more calendar years.

In any case, the total amount of reductions and exclusions for one calendar year shall not be
more than the total amount referred to in Article 6(1).

1.

2.

1.

2.

3.

4.

Article 8
Supplementary statutory management requirements

Where a Member State considers that a supplementary statutory management requirement should be
added to the list set out in Annex III, it shall submit a corresponding request to the Commission.

Such a supplementary statutory management requirement may be added to the list set out in Annex III
in accordance with the procedure referred to in Article 82(2).

22

Article 9
Amounts resulting from cross compliance

The  amount  resulting  from  the  application  of  this  Chapter  shall  be  credited  to  the  EAGGF
“Guarantee” Section. Member State may retain 20% of those amounts.

Chapter 2
Degression and modulation

Article 10
Degression

All the amounts of direct payments to be made in a given calendar year to a farmer under the
support schemes listed in Annex I and the ceiling of Annex VIII shall be reduced for each
year until 2012 by the following percentages:

– 
– 
– 
– 
– 
– 
– 

1% in 2006,
4% in 2007,
12% in 2008,
14% in 2009,
16% in 2010,
18% in 2011,
19% in 2012.

The  percentages  referred  to  in  paragraph  1  may  be  modified  in  accordance  with  the
procedure referred to in Article 82(2).

Article 11
Additional amount of aid

An additional amount of aid shall be granted to farmers receiving direct payments under this
Regulation. This amount shall be calculated as follows:

(a)

(b)

for the first EUR 5 000 of direct payments the additional amount of aid shall be equal
to  the  amount  resulting  from  the  application  of  the  percentage  of  reduction  for  that
calendar  year  under  Article  10.  If  the  farmer  receives  less  than  EUR  5 000,  the
additional amount of aid shall be calculated proportionately;

for the amount exceeding 5 000 and up to EUR 50 000 the additional amount of aid
shall be equal to half of the amount resulting from the application of the percentage of
reduction  for  that  calendar  year  under  Article  10  reduced  by  the  percentages  points
referred to in Article 12. If he receives less than EUR 50 000, the additional amount of
aid shall be calculated proportionately.

The total additional amounts of aid which may be granted in a Member State in a calendar
year  shall  not  be  higher  than  the  ceilings  set  out  in  Annex  II.  Where  necessary,  Member
States shall proceed to a linear percentage adjustment of additional amounts of aid in order to
respect the ceilings set out in Annex II.

1.

2.

1.

2.

3.

The additional amount of aid shall not be subject to the reductions referred to in Article 10.

23

Article 12
Modulation

The amounts resulting from application of the following percentage points of the reductions
provided for in Article 10 shall be available as additional Community support for measures
under  rural  development  programming  financed  under  the  EAGGF  “Guarantee”  Section
according to Regulation (EC) No 1257/1999:

– 
– 
– 
– 
– 
– 
– 

2006: 1%,
2007: 2%,
2008: 3%,
2009: 4%,
2010: 5%,
2011: 6%,
2012: 6%.

The amounts referred to in paragraph 1 shall be allocated to the Member States concerned in
accordance  with  the  procedure  referred  to  in  Article  82(2)  on  the  basis  of  the  following
criteria:

– 
– 
– 

agricultural area,
agricultural employment,
gross domestic product (GDP) per capita in purchasing power.

Chapter 3
Farm advisory system

Article 13
Farm advisory system

Member  States  shall  set  up  a  system  of  advising  farmers  on  land  and  farm  management
(hereinafter referred to as the “farm advisory system”) operated by one or more designated
authorities or by private bodies approved in accordance with Article 16.

The  advisory  activity  shall  cover  at  least  the  statutory  management  requirements  and  the
good agricultural conditions referred to in Chapter I.

Article 14
Conditions

Member States shall ensure that all farmers who receives more than EUR 15 000 of  direct
payments per year or has a turnover of more than EUR 100 000 per year shall participate in
the  farm  advisory  system  within  a  period  of  5  years,  starting  from  1  January  2005,  at  a
minimum of 15% rate per year.

Farmers  other  than  those  referred  to  in  paragraph  1  may  participate  in  the  farm  advisory
system on a voluntary basis.

1.

2.

1.

2.

1.

2.

Article 15
Supervisory authority

Where  the  farm  advisory  system  is  operated  by  private  bodies,  Member  States  shall  designate  an
authority  responsible  for  the  approval  and  supervision  of  such  bodies  (hereinafter  referred  to  as  the
“supervisory authority”).

24

Article 16
Approval of private bodies

1.

2.

A  private  body  may  only  be  approved  by  the  supervisory  authority  of  the  Member  State
where it has its principal place of business and, if any, its registered office. Once approved, it
may operate throughout the entire Community.

In order to be approved, a private body shall ensure the availability of appropriate resources
in the form of qualified staff, administrative and technical facilities and advisory experience
and reliability with respect to the statutory management requirements and good agricultural
conditions referred to in Chapter I on which it intends to advice.

Article 17
Supervison of private bodies

1.

After a private body has been approved, the supervisory authority shall:

(a)

(b)

(c)

ensure that the body carries out its activities in an objective manner;

verify the effectiveness of the body’s activities;

withdraw  the  approval  if  the  body  fails  to  comply  with  the  requirements  and
obligations referred to in Articles 16 and 18.

2.

Approved private bodies shall:

(a)

(b)

allow  the  supervisory  authority  access  to  their  offices  and  facilities  for  inspection
purposes  and  provide  any  information  and  assistance  deemed  necessary  by  that
authority for the fulfilment of its obligations pursuant to this Regulation;

send to the supervisory authority by 31 January each year a list of farmers subject to
their activity until 31 December of the previous year and present to the said authority a
concise  annual  report  on  its  advisory  activities.  The  report  shall  not  disclose  any
personal or individual information or individual holding data.

Article 18
Obligations of approved private bodies and designated authorities

The designated authorities and the approved private bodies referred to in Article 13 shall:

(a)

(b)

ensure  that  the  advisory  activity  on  the  statutory  management  requirements  and  good
agricultural conditions has been carried out on the holdings subject to their activity;

not disclose personal or individual information and data they obtain in their advisory activity
to persons other than the farmer managing the holding concerned, except any irregularity or
infringement  found  during  their  activity  which  is  covered  by  an  obligation  laid  down  in
Community  or  national  law  to  inform  a  public  authority,  in  particular  in  case  of  criminal
offences.

Article 19
Obligations for the farmers

In case a farmer refuses to participate in the farm advisory system or does not provide the information
and assistance deemed necessary by the private bodies or designated authorities for the fulfilment of

25

their  advisory  activities  or  provides  false  information,  he  shall  be  subject  to  the  reductions  and
exclusions referred to in Article 6.

Chapter 4
Integrated administration and control system

Article 20
Scope

Each Member State shall set up an integrated administration and control system, hereinafter referred to
as the ”integrated system”.

The integrated system shall apply to the support schemes established under Titles III  and  IV  of  this
Regulation and under Article 2a of Regulation (EC) No 1259/1999.

To the extent necessary, it shall also apply to the administration and control of the rules laid down in
Chapters 1, 2 and 3 of this Title.

Article 21
Elements of the integrated system

The integrated system shall comprise the following elements:

(a)

(b)

(c)

(d)

(e)

(f)

1.

2.

a computerised data base,

an identification system for agricultural parcels,

a  system  for  the  identification  and  registration  of  payment  entitlements  as  referred  to  in
Article 24,

aid applications,

an integrated control system,

a single system to record the identity of each farmer who submits an aid application.

Article 22
Computerised data base

The  computerised  data  base  shall  record,  for  each  agricultural  holding,  the  data  obtained
from aid applications.

This  data  base  shall,  in  particular,  allow  direct  and  immediate  consultation,  through  the
competent authority of the Member State, of the data relating to at least the previous three
consecutive calendar and/or marketing years.

The  Member  States  may  set  up  decentralised  data  bases  on  condition  that  these,  and  the
administrative  procedures  for  recording  and  accessing  data,  are  designed  homogeneously
throughout the territory of the Member State and are compatible with one another in order to
allow cross-checks.

26

Article 23
Identification system for agricultural parcels

The  identification  system  for  agricultural  parcels  shall  be  established  on  the  basis  of  maps  or  land
registry documents or other cartographic references. Use shall be made of computerised geographical
information  system  techniques  including  preferably  aerial  or  spatial  orthoimagery,  with  an
homogenous standard guaranteeing accuracy at least equivalent to cartography at a scale of 1:10000.

1.

2.

1.

2.

3.

1.

2.

3.

Article 24
System for the identification and registration of payment entitlements

The  system  for  the  identification  and  registration  of  payment  entitlements  shall  be  set  up
allowing  verification  of  entitlements  and  cross-checks  with  the  aid  applications  and  the
identification system for agricultural parcels.

This system shall allow direct and immediate consultation, through the competent authority
of the Member State, of the data relating to at least the previous three consecutive calendar
and/or marketing years.

Article 25
Aid applications

Each year, a farmer shall submit an application for direct payments subject to the integrated
system, indicating, where applicable:

– 
– 
– 

all agricultural parcels of the holding,
the number and amount of payment entitlements,
any  other  information  provided  for  by  this  Regulation  or  by  the  Member  State
concerned.

A  Member  State  may  decide  that  the  aid  application  needs  to  contain  only  changes  with
respect  to the aid application submitted  the  previous  year.  A  Member  State  may  distribute
pre-printed forms based on the areas determined in the previous year and supplying graphic
material indicating the location of those areas.

A Member State may decide that a single aid application shall cover several or all support
schemes listed in Annex I or other support schemes.

Article 26
Verification of eligibility conditions

Member  States  shall  carry  out  administrative  checks  on  the  aid  applications  including  a
verification of the eligible area and the corresponding payment entitlements.

Administrative  checks  shall  be  supplemented  by  a  system  of  on-the-spot  checks  to  verify
eligibility  for  the  aid.  For  this  purpose,  Member  States  shall  draw  up  a  sampling  plan  of
agricultural holdings.

Member  States  may  use  remote  sensing  techniques  as  a  means  to  carry  out  on-the-spot
checks on agricultural parcels.

Each  Member  State  shall  designate  an  authority  responsible  for  co-ordinating  the  checks
provided for in this Chapter.

27

Where  the  Member  State  provides  for  the  delegation  of  some  aspects  of  the  work  to  be
carried out under this Chapter to specialised agencies or firms, the designated authority shall
retain control over, and responsibility for, that work.

Article 27
Reductions and exclusions

1.

2.

1.

2.

Without prejudice to reductions and exclusions provided for in Article 6 of this Regulation,
where it is found that the farmer does not comply with the eligibility conditions relevant to
the granting of the aid as provided for in this Regulation or by Article 2a of Regulation (EC)
No 1259/1999, the payment or part of the  payment  granted  or  to  be  granted for  which  the
conditions of eligibility have been meet shall be subject to reductions and exclusions to be
laid down in accordance with the procedure referred to in Article 82(2).

The percentage of reduction shall be graduated according to the severity, extent, permanence
and repetition of the non-compliance found and may go as far as total exclusion from one or
several aid schemes for one or more calendar years.

Article 28
Controls on cross compliance

Member States shall carry out administrative checks supplemented by on-the-spot-checks to
verify whether the farmer complies with the obligations referred to in Chapter 1.

Member States may make use of their existing administration and control systems to ensure
compliance  with  the  statutory  management  requirements  and  good  agricultural  conditions
referred to in Chapter 1.

These systems, and notably the system for identification and registration of animals set up in
accordance  with  Directive  92/102/EEC  and  Regulation  (EC)  No  1760/2000,  shall  be
compatible, within the meaning of Article 29, with the integrated system.

Article 29
Compatibility

1. 

For the purpose of applying the support schemes listed in Annex V, Member States
shall ensure that the administration and control procedures applied to these schemes
are compatible with the integrated system in the following respects:

(a)

(b)

(c)

the computerised data base,

the identification systems for agricultural parcels,

administrative checks.

To this end, these systems shall be set up so as to allow, without any problems or conflicts, a
common functioning of, or the exchange of data between, them.

2. 

Member States may, for the purposes of applying Community or national support schemes
other than those listed in Annex V, incorporate in their administration and control procedures
one or more components of the integrated system.

28

Article 30
Information and checks

1. 

The Commission shall be kept regularly informed of the application of the integrated system.

It shall organise exchanges of views on this subject with the Member States.

2. 

After informing the competent authorities concerned in good time, authorised representatives
appointed by the Commission may carry out:

– 

– 

any examination or control relating to the measures taken in order to establish and to
implement the integrated system;

checks at the specialised agencies and firms referred to in Article 26(3).

Officials of the Member State concerned may take part in such checks. The aforementioned
powers to carry out checks shall not affect the application of national law provisions which
reserve  certain  acts  for  officials  specifically  designated  by  national  law.  The  authorised
representatives appointed by the Commission shall in particular not participate in home visits
to or the formal interrogation of suspects under the national law of the Member State. They
shall, however, have access to the information obtained thereby.

Without  prejudice  to the  responsibilities  of the Member  States  for  the  implementation  and
application of the integrated system, the Commission may seek the assistance of specialised
bodies  or persons in  order  to  facilitate  the  establishment,  monitoring  and  utilisation  of  the
integrated  system,  in  particular  with  a  view  to  providing  the  competent  authorities  of  the
Member States with technical advice, should they request it.

Chapter 5
Other general provisions

Article 31
Payment

Save as otherwise provided for in this Regulation, payments under support schemes listed in
Annex I shall be made in full to the beneficiaries.

Payments shall be made once a year within the period from 1 December to 30 April of the
following calendar year.

By way of derogation from paragraph 2 and in accordance with the procedure referred to in
Article 82(2), authorisation may be  granted to the Member States, subject to the budgetary
situation,  to  pay  prior  to  1  December  advances  of  up  to  50%  of  the  payments  in  regions
where, due to exceptional climatic conditions, farmers face severe financial difficulties.

3. 

1. 

2. 

3. 

Article 32
Restriction of payment

Without prejudice to any specific provisions in individual support schemes, no payment shall be made
in  favour  of  beneficiaries  for  whom  it  is  established  that  they  artificially  created  the  conditions
required for obtaining such payments with a view to obtaining an advantage contrary to the objectives
of that support scheme.

29

Article 33
Review

Support  schemes  listed  in  Annex  I  shall  be  applied  without  prejudice  to  possible  review  at  any
moment in the light of market developments and the budgetary situation.

Article 34
Evaluation

In  order  to  gauge  their  effectiveness,  payments  under  support  schemes  listed  in  Annex  I  shall  be
subject to evaluation designed to appraise their impact with respect to their objectives and to analyse
their effects on the relevant markets.

Article 35
Interventions under Regulation (EC) No 1258/1999

The  support  schemes  listed  in  Annex  I  shall  be  considered  as  intervention  as  referred  to  in
Article 1(2)(b) and Article 2(2) of Regulation (EC) No 1258/1999.

TITLE III
SINGLE PAYMENT SCHEME

Chapter 1
General provisions

Article 36
Eligibility

Farmers shall have access to the single payment scheme if they have received a direct payment in the
reference  period  referred  to  in  Article  41  under  at  least  one  of  the  support  schemes  referred  to  in
Annex VI.

Article 37
Application

The competent authority of the Member State shall send an application form to the farmer indicating:

(a)

(b)

(c)

the amount referred to in Chapter 2 (hereinafter referred to as the "reference amount"),

the number of hectares referred to in Article 46,

the number of payment entitlements per hectare as defined in Chapter 3.

Article 38
Double claims

The  area  corresponding  to  the  number  of  eligible  hectares  as  defined  in  Article  47(2)  in  respect  of
which  a single  payment  application  is  submitted  may  be  the  subject  of  an  application  for  any  other
direct payments listed in Annex I, except for the direct payments provided for in Chapter 4 of Title IV
of this Regulation, Article 5(1) of Regulation 136/66/EEC, Article 12 of Regulation (EEC) No 404/93
and Article 7(1) of Regulation (EC) No 2201/96 and Article 2a of Regulation (EC) No 1259/1999.

The  area  corresponding  to  the  number  of  eligible  hectares  as  defined  in  Article  47(2)  in  respect  of
which a single payment application is submitted and which is set aside from production in accordance

30

with  Article  55  may  not  be  the  subject  of  an  application  for  direct  payments  for  energy  crop  as
provided for in Chapter 5 of Title IV.

Article 39
Payment

1. 

2. 

3. 

Aid  under  the  single  payment  scheme  shall  be  paid  in  respect  of  payment  entitlements  as
defined  in  Chapter  3,  accompanied  by  an  equal  number  of  eligible  hectares  as  defined  in
Article 47(2).

For  Member  States  which  have  not  adopted  the  euro,  the  payment  shall  be  converted  into
their national currency using the exchange rate applicable on 1 January of each calendar year
in respect of which the single payment is granted.

Member  States  may  decide  to  combine  payments  under  the  single  payment  scheme  with
payments under any other support scheme.

Chapter 2
Establishment of the amount

Article 40
Calculation of the amount

The reference amount shall be the yearly average of the total amount which a farmer was granted, on
the basis of the number of hectares and the number of animals, under the support schemes referred to
in Annex VI calculated and adjusted according to Annex VII, for each calendar year of the reference
period referred to in Article 41.

The reference period shall comprise the calendar years 2000, 2001 and 2002.

Article 41
Reference period

Article 42
Application of modulation and cross-compliance laid down under Regulation (EC) No 1259/1999

In  case  of  application  of  Articles  3  and  4  of  Regulation  (EC)  No  1259/1999  during  the  reference
period,  the  amounts  referred  to  in  Annex  VII  shall  be  those  that  would  have  been  granted  before
application of the said Articles.

Article 43
Hardship cases

1. 

2. 

By  way  of  derogation  from  Article  40,  a  farmer  whose  production  was  adversely  affected
during  the  reference  period  by  a  case  of  force  majeure  or  exceptional  circumstances
occurring before or during that reference period shall be entitled to request that the reference
amount be calculated on the basis of the calendar year or years in the reference period not
affected by the case of force majeure or exceptional circumstances.

If  the  whole  reference  period  was  affected  by  the  case  of  force  majeure  or  exceptional
circumstances,  the  Member  State  shall  calculate  the  reference  amount  on  the  basis  of  the
1997 to 1999 period. In this case, paragraph 1 shall apply mutatis mutandis.

31

3. 

4. 

1. 

2. 

1. 

2. 

3. 

4. 

A  case  of  force  majeure  or  exceptional  circumstances,  with  relevant  evidence  to  the
satisfaction of the competent authority, shall be notified by the farmer concerned in writing
to the authority within a deadline to be fixed by each Member State.

Force majeure or exceptional circumstances shall be recognised by the competent authority
in cases such as, for example:

(a)

the death of the farmer,

(b)

long-term professional incapacity of the farmer,

(c)

a severe natural disaster gravely affecting the holding's agricultural land,

(d)

the accidental destruction of livestock buildings on the holding,

(e)

an epizootic affecting part or all of the farmer's livestock.

Article 44
Ceiling

For  each  Member  State,  the  sum  of  the  reference  amounts  shall  not  be  higher  than  the
national ceiling referred to in Annex VIII.

Where  necessary,  a  Member  State  shall  proceed  to  a  linear  percentage  reduction  of  the
reference amounts in order to ensure respect of its ceiling.

Article 45
National reserve

Member  States  shall,  after  any  possible  reduction  under  Article  44(2),  proceed  to  a  linear
percentage reduction of the reference amounts in order to constitute a national reserve. This
reduction shall not be higher than 1%.

The national reserve shall comprise the difference between the ceiling referred to in Annex
VIII and the sum of the reference amounts to be granted to farmers under the single payment
scheme, after the reduction referred to in paragraph 1.

Member  States  shall  use  the  national  reserve  for  the  purpose  of  establishing  reference
amounts for the farmers referred to in Article 43.

Member States may use the national reserve to grant reference amounts to new farmers who
commence their agricultural activity after 31 December 2000, according to objective criteria
and  in  such  a  way  as  to  ensure  equal  treatment  between  farmers  and  to  avoid  market  and
competition distortions.

32

Chapter 3
Entitlements

Section 1
Entitlements based on areas

Article 46
Determination of the entitlements

1. 

Without prejudice to Article 51, a farmer shall  receive  an  entitlement  per hectare  which  is
calculated by dividing the reference amount by the average number of all hectares which in
the reference period gave right to direct payments listed in Annex VI.

2. 

The number of hectares referred to in paragraph 1 shall further include:

(a)

in case of potato starch, dried fodder and seed aid listed in Annex VII, the number of
hectares  whose  production  has  been  granted  the  aid  in  the  reference  period  as
calculated in points B, D and G of Annex VII;

3. 

4. 

1. 

2. 

(b)

all forage area in the reference period.

For the purpose of paragraph 2(b), “forage area” shall mean the area of the holding that was
available  throughout  the  calendar  year  for  rearing  bovine  animals  and  sheep  and/or  goats
including areas in shared use and areas which were subject to mixed cultivation. The forage
area shall not include:

– 

– 

– 

buildings, woods, ponds, paths,

areas  used  for  other  crops  eligible  for  Community  aid  or  for  permanent  crops  or
horticultural crops,

areas qualifying for the support system laid down for the producers of certain arable
crops, used for the aid scheme for dried fodder or subject to a national or Community
set-aside scheme.

The entitlements per hectare shall not be modified except when a farmer has received durum
wheat supplement or special aid in the reference period or, starting from 2004, he is entitled
to dairy payments as provided for in point F of Annex VII.

Article 47
Use of entitlements

Any  entitlement  accompanied by  an  eligible  hectare  shall  give  right to  the  payment  of the
amount fixed by the entitlement.

“Eligible hectare” shall mean any agricultural area of the holding taken up by arable land and
permanent pasture except areas under permanent crops, forests or used for non agricultural
activities on 31 December 2002.

Article 48
Unused entitlements

Any  entitlement  which  has  not  been  used  for  a  period  of  5  years  shall  be  allocated  to  the  national
reserve.

However,  unused  entitlements  shall  not  revert  to  the  national  reserve  in  case  of  force  majeure  and
exceptional circumstances within the meaning of Article 43(4).

33

Article 49
Transfer of entitlements

Without prejudice to transfers by actual or anticipated inheritance, entitlements may only be
transferred to another farmer established within the same Member State.

A  Member  State  may  decide  that  entitlements  may  only  be  transferred  between  farmers
within one and the same region.

Entitlements  may  be  transferred  by  sale  with  or  without  land.  In  contrast,  lease  or  similar
type of transactions shall be allowed only if the entitlements transferred are accompanied by
the transfer of an equivalent number of eligible hectares.

In  case  of  transfers  of  entitlements  referred  to  in  Article  46(4),  the  calculation  of  the
entitlements  per  hectare  shall  take  into  account  the  application  of  points  A.2  and  F  of
Annex VII.

Section 2
Special Payment Entitlements

Article 50
Nature of the special payment entitlements

By  way  of  derogation  from  Articles  46  and  47,  the  following  amounts  resulting  from
payments granted in the reference period shall be included in the reference amount under the
conditions provided for in Article 51 and point C of Annex VII:

the deseasonalisation premium provided for in Article 5 of Regulation (EC) No 1254/1999;

the slaughter premium provided for in Article 11 of Regulation (EC) No 1254/1999;

the  special  premium  for  male  bovine  animals  and  the  suckler  cow  premium,  where  the
farmer  was  exempted  from  the  stocking  rate  requirement  pursuant  to  Article  12(1)  of
Regulation (EC) No 1254/1999, provided that the farmer did not apply for the extensification
payment provided for in Article 13 of that Regulation;

additional payments provided for in Article 14 of Regulation (EC) No 1254/1999 where paid
in addition to aid provided for under a), b) and c) of this Article;

1. 

2. 

3. 

1.

(a)

(b)

(c)

(d)

(e)

the aids provided for under the sheep and goats aid scheme:

– 

– 

in the calendar years 2000 and 2001, in Article 5 of Regulation (EC) No 2467/98,

in the calendar year 2002, in Articles 4, 5 and 11(1) and in the 1st, 2nd, 4th indent  of
Article 11(2) of Regulation (EC) No 2529/2001.

2.

Starting  from  2004  and  by  way  of  derogation  from  Articles  36,  46  and  47,,  the  amounts
resulting from dairy premium and additional payments, provided for in point F of Annex VII
shall be included in the reference amount under the conditions provided for in Article 51.

Article 51
Determination of the special payment entitlements

When  farmer  was  granted  payments  referred  to  in  Article  50,  but  had  no  hectares  as  referred  to  in
Article  46  in  the  reference  period,  or  the  entitlement  per  hectare  results  in  an  amount  higher  than

34

EUR 10 000,  the  farmer  shall  have  right  to  a  special  payment  entitlement  corresponding  to  the
amounts referred to in Article 50.

Article 52
Conditions for the special payment entitlements

1. 

2. 

The number of special payment entitlements shall not be modified except when a farmer is
eligible for dairy  payments.  In  this  case,  the  calculation  of  the  entitlements  shall  take  into
account the application of point F of Annex VII.

Special  payment  entitlements  may  not  be  transferred  other  than  by  actual  or  anticipated
inheritance.

However,  in  case  of  special  payment  entitlements  resulting  exclusively  from  the  aids
provided  for  under  the  sheep  and  goats  aid  scheme,  the  transfer  on  entitlements  shall  be
allowed among farmers who had been granted sheep and goats aid in the reference period.

3. 

Section 1 shall apply mutatis mutandis save as otherwise provided for in this Section.

Chapter 4
Land use under the single payment scheme

Section 1
Use of the land

Article 53
Agricultural use of the land

Farmers may use their land for any agricultural activity except for permanent crops.

Article 54
Production of hemp

1.

2.

In case of production of hemp falling within CN Code  5302 10 00, the  varieties  used  shall
have a tetrahydrocannabinol content not exceeding 0,2% and the production shall be covered
by a contract or commitment as referred to in Article 2(1) of Regulation (EC) No 1673/2000.
Member States shall establish a system for verifying the tetrahydrocannabinol content of the
crops grown on at least 30% of the areas on hemp grown for fibre for which the contract is
concluded  or  the  commitment  made.  However,  if  a  Member  State  introduces  a  system  of
prior approval for such cultivation, the minimum shall be 20%.

In accordance with the procedure referred to in Article 82(2), the granting of payments shall
be made subject to the use of certified seeds of certain varieties and to a declaration of areas
on hemp grown for fibre.

Section 2
Set-aside

Article 55
Obligation to set aside

1. 

Where a farmer was subject to the obligation to set aside part of the land of his holding for
the marketing year 2003/2004 pursuant to Article 6(1) of Regulation (EC) No 1251/1999, he
shall set aside from production part of the land of his holding for which an application for the

35

single payment scheme is made equivalent, in number of hectares, to 10% of the area used
for the calculation of the set aside obligation referred to above.

2. 

Agricultural parcels which were under permanent pasture, permanent crops or trees or used
for non-agricultural purposes on 31 December 1991 may not be used to comply with the set
aside obligation under paragraph 1. However, a declaration  for  set aside  may  be  presented
for  land  which  benefited  from  aid  granted  under  Council  Regulation  (EEC)  No  1308/70
during at least one of the marketing years from 1998/1999 to 2000/2001.

Member States may, on terms to be determined in accordance with the procedure referred to
in  Article  82(2),  derogate  from  these  provisions,  provided  that  they  take  action  to  prevent
any significant increase in the total eligible agricultural area.

3. 

The  set  aside  obligation  referred  to  in  paragraph  1  shall  apply  for  a  period  of  ten  years
starting on 1 January 2004.

As a result of an application made after 28 June 1995, the following areas may be counted as
being set aside for the purpose of the set aside obligation referred to in paragraph 1:

– 

– 

Areas set aside pursuant to Articles 22 to 24 of Regulation (EC) No 1257/1999, which
are neither put to any agricultural use nor used for any lucrative purposes other than
those accepted for other land set aside under this Regulation, or
Areas afforested pursuant to Article 31 of Regulation (EC) No 1257/1999.

Article 56
Exemption from set-aside

A farmer shall not be subject to the set aside obligation referred to in Article 55 if

– 

– 

1. 

2. 

he  submits  an  application  under  the  single  payment  scheme  for  an  area  not  exceeding
20 hectares, or
his  entire  holding  is  managed  for  the  totality  of  its  production  in  compliance  with  the
obligations laid down in Regulation (EEC) No 2092/91.

Article 57
Use of the set aside land

The land set aside shall be maintained in good agricultural conditions as established under
Article 5.

It shall not be used for agricultural purposes and shall not produce any crop for commercial
purposes.

It  shall  not  be  subject  to  rotation.  However,  Member  States  may,  in  duly  justified
circumstances  and  notably  for  specific  environmental  reasons,  authorise  the  farmer  to
exchange  the  parcels  subject  to  the  set  aside  obligation  on  condition  that  he  respects  the
number  of  hectares  and  the  conditions  for  eligibility  of  the  land  concerned  referred  to  in
Article 55(1).

3. 

The set aside obligation shall continue to apply if the land is transferred.

36

Chapter 5
Regional implementation

Article 58
Regional implementation

1.

2.

3.

4.

5.

A  Member  State  may  decide,  by  1  March  2004  at  the  latest,  to  apply  the  single  payment
scheme provided for in Chapters 1 to 4 at regional level under the conditions laid down in
this Chapter.

In this case, the Member State shall subdivide the ceiling referred to in Article 44 between
the regions in accordance with objective criteria.

The Member State shall apply the single payment scheme in the regions within the limit of
the regional ceilings established under paragraph 2.

Moreover, in duly justified cases such as, for example, to avoid distortions of competition,
the  Member  State  may,  by  way  of  derogation  from  Article  46,  calculate  the  number  of
hectares referred to in Article 46 at regional level including all eligible hectares, within the
meaning of Article 47(2), of all the holdings located in the region concerned. In this case and
by  way  of  derogation  from  Article  36,  a  farmer  whose  holding  is  located  in  the  region
concerned  shall  receive  an  entitlement  per  hectare  which  is  calculated  by  dividing  the
regional  ceiling  established  under  paragraph  2  by  the  number  of  hectares  established  at
regional level.

Entitlements established under this Article may only be transferred within the same region or
between regions where the entitlements per hectare are the same.

TITLE IV
OTHER AID SCHEMES

Chapter 1
Specific quality premium for durum wheat

Article 59
Scope of application

Aid  shall  be  granted  to  producers  of  durum  wheat  falling  within  CN  code  1001 10 00,  under  the
conditions laid down in this Chapter.

1. 

2. 

Article 60
Amount and eligibility

The aid shall be EUR 40 per hectare.

Granting  of  payments  shall  be  subject  to  the  use  of  certain  quantities  of  certified  seeds  of
varieties recognised, in the production zone, as being of high quality  for the  production  of
semolina or pasta.

Article 61
Areas

1.

The aid shall be granted for national base areas in the traditional production zones listed in
Annex IX.

37

The base areas shall be as follows:

Greece
Spain
France
Italy
Austria
Portugal

617 000 ha
594 000 ha
208 000 ha
1 646 000 ha
7 000 ha
118 000 ha.

2.

A  Member  State  may  subdivide  its  base  area  into  sub-areas  in  accordance  with  objective
criteria.

Article 62
Overrun of the area

Where the area for which aid is claimed exceeds the base area, the area per farmer for which aid is
claimed shall be reduced proportionately in that year.

Chapter 2
Protein crop premium

Article 63
Scope

An aid shall be granted to producers of protein crops under the conditions laid down in this Chapter.

Protein crops shall include:

– 
– 
– 

Peas falling within CN code 0713 10,
Field beans falling within CN code 0713 50,
Sweet lupins falling within CN code ex 1209 29 50.

Article 64
Amount and eligibility

The aid shall be EUR 55.57 per hectare of protein crops harvested after the stage of lactic ripeness.

However,  crops  grown  on  areas  which  are  fully  sown  and  which  are  cultivated  in  accordance  with
local standards, but which do not attain the stage of lactic ripeness as a result of exceptional weather
conditions recognised by the Member State concerned, shall remain eligible for aid provided that the
areas in question are not used for any other purpose up to this growing stage.

Article 65
Area

1.

2.

A  maximum  guaranteed  area  of  1 400 000  ha  for  which  the  aid  may  be  granted  is  hereby
established.

Where the area for which aid is claimed exceeds the maximum guaranteed area, the area per
farmer for which aid is claimed shall be reduced proportionately in that year in accordance
with the procedure referred to in Article 82(2).

38

Chapter 3
Crop specific payment for rice

Article 66
Scope

Aid  shall  be  granted  to  the  producers  of  rice,  as  defined  in  Article  1(3)  of  Regulation  (EEC)
No 3072/95, under the conditions laid down in this Chapter.

Article 67
Amount and eligibility

1. 

The aid shall be granted per hectare of land sown under rice  and  where  the  crop is
maintained until at least the beginning of flowering under normal growth conditions.

However, crops grown on areas which are fully sown and which are cultivated in accordance
with local standards, but which do not attain the stage of flowering as a result of exceptional
weather conditions recognised by the Member State concerned, shall remain eligible for aid
provided  that  the  areas  in  question  are  not  used  for  any  other  purpose  up  to  this  growing
stage.

2. 

The aid shall be as follows, according to the yields in the Member States concerned:

Spain
France:
— metropolitan territory
— French Guyana
Greece
Italy
Portugal

(EUR/ha)
476,25

411,75
563,25
561,00
453,00
453,75.

Article 68
Areas

A national base area for each producing Member State is hereby established as follows:.

Spain
France:
— metropolitan territory
— French Guyana
Greece
Italy
Portugal

104 973 ha

19 050 ha
4 190 ha
20 333 ha
219 588 ha
24 667 ha.

A Member State may subdivide its base area in accordance with objective criteria.

Article 69
Overrun of the areas

1. 

Where in a Member State the area given over to rice in a given year exceeds the base area
indicated in Article 68, a reduction of the amount of the aid shall be applied to all producers
in the base area in question for the same production year equal to:

– 

three times the rate of overrun if it is less than 1%,

39

– 
– 
– 

four times the rate of overrun if it is at least 1%, but less than 3%,
five times the rate of overrun if it is at least 3%, but less than 5%,
six times the rate of overrun if it is at least 5%.

2. 

Where  paragraph  1  is  applied,  the  Member  State  concerned  shall,  before  a  date  fixed  in
accordance  with  the  procedure  referred  to  in  Article  82(2),  determine  the  scale  of  the
reductions to be applied to the aid. It shall previously inform the Commission thereof.

Chapter 4
Area payment for nuts

Article 70
Community aid

A Community aid of EUR 100 per hectare per year shall be granted for nuts under the conditions laid
down in this Chapter.

Nuts shall include:

– 

– 

– 

– 

– 

1.

2.

almonds falling within CN codes 0802 11 and 0802 12,

hazelnuts or filberts falling within CN codes 0802 21 and 0802 22,

walnuts falling within CN codes 0802 31 and 0802 32,

pistachios falling within CN codes 0802 50,

locust beans falling within CN codes 1212 10 10.

Article 71
Areas

A  maximum  guaranteed  area  of  800 000  ha  for  which  the  aid  may  be  granted  is  hereby
established.

The maximum guaranteed area referred to in paragraph 1 shall be divided into the following
national guaranteed areas (hereinafter referred to as the “NGA”):

National Guaranteed Areas (NGA)

Belgium
Germany
France
Greece
Italy
Luxembourg
Netherlands
Austria
Portugal
Spain
United Kingdom

100 ha
1 500 ha
17 300 ha
41 100 ha
130 100 ha
100 ha
100 ha
100 ha
41 300 ha
568 200 ha
100 ha

3.

A Member State may subdivide its NGA into sub-areas in accordance with objective criteria,
in particular at regional level or in relation to the production.

40

Article 72
Overrun of the NGA

Where  the  area  for  which  Community  aid  is  requested  is  less  than  the  NGA  of  the  Member  State
concerned,  the  Commission  shall  reallocate  the  unused  balance  proportionately  to  the  NGAs  of  the
other Member States where an overrun occurs.

Where, after any possible application of paragraph 1, the area for which Community aid is requested
exceeds the  NGA  of the Member  State  concerned, the area  per  farmer  for  which  Community  aid  is
claimed shall be reduced proportionately in that year in accordance with the procedure referred to in
Article 82(2).

1. 

2. 

3. 

1.

2.

3.

Article 73
Conditions for eligibility

Payment of the Community aid shall be conditional on, in particular, minimum plot size and
tree density.

Areas  in  improvement  plans  within  the  meaning  of  Article  14(b)  of  Regulation  (EEC)
No 1035/72 become eligible for aid under this scheme on 1 January of the year following the
year in which the improvement plan expired.

Member  States  may  make  the  granting  of  Community  aid  conditional  on  producers  being
members of a producer organisation recognised under Articles 11 or 14 of Regulation (EC)
No 2200//96.

Article 74
National aid

Member States may grant national aid, in addition to the Community aid, up to a maximum
of EUR 109 per hectare per year.

The national aid may be paid only for areas receiving Community aid.

Member  States  may  make  the  granting  of  national  aid  conditional  on  producers  being
members of a producer organisation recognised under Articles 11 or 14 of Regulation (EC)
No 2200//96.

Chapter 5
Aid for energy crops

Article 75
Aid

An aid of EUR 45 per hectare per year shall be granted for areas sown under energy crops used under
the conditions laid down in this Chapter.

Energy  crops  shall  mean  crops  supplied  essentially  for  the  production  of  the  following  energy
products:

– 

– 

“bioethanol”: ethanol produced from biomass and/or the biodegradable fraction of waste, to
be used as biofuel,
“biodiesel”: a diesel quality liquid fuel produced from biomass or used fried oils, to be used
as biofuel,

41

– 

– 

– 

– 
– 

– 

1.

2.

“biogas”:  a  fuel  gas  produced  by  the  anaerobic  fermentation  of  biomass  and/or  the
biodegradable  fraction  of  waste  that  can  be  purified  to  natural  gas  quality,  to  be  used  as
biofuel,
“biomethanol”: methanol produced from biomass and/or the biodegradable fraction of waste,
to be used as biofuel,
“biodimethylether”: dimethylether produced from biomass and/or the biodegradable fraction
of waste, to be used as biofuel,
“biooil”: a pyrolysis oil fuel produced from biomass, to be used as biofuel,
“bioETBE  (ethyl-tertio-butyl-ether)”:  ETBE  produced  on  the  basis  of  bioethanol;  the
percentage of volume bioETBE that is calculated as biofuel is 45%,
electric and thermal energy produced from biomass.

Article 76
Areas

A  maximum  guaranteed  area  of  1 500 000  ha  for  which  the  aid  may  be  granted  is  hereby
established.

Where the area for which aid is claimed exceeds the maximum guaranteed area, the area per
farmer for which aid is claimed shall be reduced proportionately in that year in accordance
with the procedure referred to in Article 82(2).

Article 77
Conditions for eligibility

The aid shall be granted only in respect of areas whose production is covered by a contract between
the farmer and the processing industry, except in case of processing undertaken by the farmer himself
on the holding.

Article 78
Review of the list of energy crops

New  products  may  be  added  to  Article  75  in  accordance  with  the  procedure  referred  to  in
Article 82(2).

Article 79
Review of energy crops scheme

By 31 December 2006, the Commission shall submit a report to the Council on the implementation of
the scheme, accompanied, where appropriate, by proposals taking into account the implementation of
the EU biofuels initiative.

Chapter 6
Aid for starch potato

Article 80
Aid

Aid shall be established for producers of potatoes intended for the manufacture of potato starch. The
amount of the payment applies to the quantity of potatoes needed for making one tonne of starch. It
shall be EUR 55.27.

42

It shall be adjusted according to the starch content of the potatoes.

Article 81
Conditions

The  aid  shall  be  paid  only  in  respect  of  the  quantity  of  potatoes  covered  by  a  cultivation  contract
between the potato producer and the starch manufacturer within the limit of the quota allocated to such
undertaking, as referred to in Article 2(2) of Regulation (EC) No 1868/94.

TITLE V
TRANSITIONAL AND FINAL RULES

Article 82
Management Committee for Direct Payments

1.

2.

The  Commission  shall  be  assisted  by  the  Management  Committee  for  Direct  Payments,
consisting  of  representatives  of  the  Member  States  and  chaired  by  a  representative  of  the
Commission.

Where reference is made to this paragraph, Articles 4 and 7 of Decision 1999/468/EC shall
apply.

The period provided for in Article 4(3) of Decision 1999/468/EC shall be set at one month

Article 83
Implementing Rules

In accordance with the procedure referred to in Article 82(2), detailed rules shall be adopted for the
implementation of this Regulation. They shall include in particular:

(a)

(b)

(c)

(d)

(e)

(f)

detailed rules related to the establishment of a farm advisory system, and the criteria for the
allocation of amounts made available by the application of modulation;

detailed  rules  related  to  the  granting  of  aids  provided  for  in  this  Regulation,  including
eligibility  conditions,  dates  of  application  and  payment  and  control  provisions  as  well  as
checking and establishing entitlement to the aids including any necessary exchange of data
with the Member States, and the establishment of the overrun of the base areas or maximum
guaranteed areas;

with  regard  to  the  single  income  payment,  detailed  rules  relating  in  particular  to  the
establishment  of  national  reserve,  the  transfer  of  entitlements,  the  definition  of  permanent
crops and permanent pastures and the list of crops allowed on set-aside land;

with regard to durum wheat, detailed rules relating to minimum quality standards;

with regard to energy crops, detailed rules relating to the definition of crops covered by the
scheme, minimal requirements for the contract, control measures on the quantity processed
and processing on the holding;

with regard to hemp grown for fibre, detailed rules relating to the specific control measures
and  methods  for  determining  tetrahydrocannabinol  levels  including  the  arrangements  for
contracts and to the commitment referred to in Article 54;

43

(g)

(h)

(i)

(j)

(k)

(l)

(m)

(n)

(o)

(p)

such amendments to Annex I as may become necessary taking into account the criteria set
out in Article 1;

such  amendments  to  Annexes  III,  IV,  VI  and  VII  as  may  become  necessary  taking  into
account, in particular new Community legislation;

the basic features of the identification system for agricultural parcels and their definition;

any  amendments  which  may  be  made  to  the  aid  application  and  exemption  from  the
requirement to submit an aid application;

rules on the minimum amount of information to be included in the aid applications;

rules on the administrative and on-the-spot checks and the checks by remote sensing;

rules  on  the  application  of  reductions  and  exclusions  from  payments  in  case  of  non
compliance  with  the  obligations referred to in  Articles  3,  14(1)  and  27,  including  cases  of
non application of reductions and exclusions;

such amendments to Annex V as may become necessary taking into account the criteria set
out in Article 29;

communications between the Member States and the Commission;

the measures required to resolve specific practical problems, in particular those related to the
implementation  of  Chapter  4  of  Title  II.  Those  measures  may,  in  duly  justified  cases,
derogate from certain parts of this Regulation.

Article 84
Transmission of information to the Commission

Member  States  shall  inform  the  Commission  in  detail  of  the  measures  taken  to  implement  this
Regulation and, in particular, those relating to Articles 5, 8, 13, 30, 45 and 58.

Article 85
Amendments to Regulation (EC) No 1868/94

Regulation (EC) No 1868/94 is amended as follows:

(1)

Article 5 is replaced by the following:

“Article 5

A premium of EUR 22.25 per tonne of starch produced shall be paid to undertakings producing potato
starch for the quantity of potato starch up the quota limit referred to in Article 2(2).“

(2)

Article 7 is replaced by the following:

"Article 7

The provisions of this Regulation shall not cover production of potato starch which does not benefit
from the payment provided for in Article 80 of Regulation (EC) No …..*[this Regulation].

*JO L ….."

44

Article 86
Amendments to Regulation (EC) No 1673/2000

Regulation (EC) No 1673/2000 is amended as follows:

(1)

Article 1 is amended as follows:

(a)

In paragraph 2, point (a) is replaced by the following:

“(a)

“farmer” shall mean a farmer as defined in Article 2(a) of Regulation (EC) No ……*

*JO L …….”

(b)

In  paragraph  3,  “Regulation  (EC)  No  1251/1999”  is  replaced  by  “Article  54  of
Regulation (EC) No ……”

(2)

In the first and second indent of Article 5 (2), “Article 5a of Regulation (EC) No 1251/1999”
is replaced by “Article 54 of Regulation (EC) No ……”.

Article 87
Amendments to other Regulations

The following provisions are deleted:

– 

– 

– 

– 

– 

– 

– 

Article 6 of Regulation (EEC) No 2019/93,

Article 6 of Regulation (EC) No 3072/95,

Articles 3 to 25 of Regulation (EC) No 1254/1999,

Article 9 of Regulation (EC) No 1452/2001,

Articles 13 and 22(2) to (6) of Regulation (EC) No 1453/2001,

Articles 5 and 6 of Regulation (EC) No 1454/2001,

Articles 3 to 11 of Regulation (EC) No 2529/2001.

Article 88
Repeals

Regulations (EEC) No 3508/92, (EC) No 1577/96, (EC) No 1251/1999 and (EC) No 1259/1999  are
repealed.

However,  Article  2a  of  Regulation  (EC)  No  1259/1999  shall  continue  to  apply  until  31  December
2005 and Articles 4, 5 and 11 of the said Regulation shall continue to apply until 31 December 2006.

Article 89
Transitional rules for the simplified scheme

Where a Member State applies the simplified scheme referred to in Article 2a of Regulation (EC) No
1259/1999, the following provisions shall apply:

(a)

(b)

2003 shall be the last year in which participants may introduce new applications;

Participants  shall  continue  to  receive  the  amount  established  under  the  simplified  scheme
until 2005;

45

(c)

(d)

Chapters 1 and 2 of Title II of this Regulation shall not apply to the amounts granted under
the simplified scheme during the participation in the scheme;

Farmers  participating  in the simplified  scheme  shall  not be entitled  to  apply  for  the  single
payment  as  long  they  participate  in  the  simplified  scheme.  In  case  of  application  for  the
single payment scheme, the amount granted under the simplified scheme shall be included in
the reference amount referred to in Article 40 of this Regulation and calculated and adjusted
according to Chapter 2 of Title II of this Regulation.

Article 90
Other transitional rules

Further  measures  required  to  facilitate  the  transition  from  the  arrangements  provided  for  in  the
Regulations  referred  to  in  Articles  87  and  88  to  those  established  by  this  Regulation,  notably  those
related  to  the  application  of  Articles  4  and  5  of  Regulation  (EC)  No  1259/1999,  Article  6  of
Regulation (EC) No 1251/1999 and those related to the improvement plans referred to in Article 73,
may be adopted in accordance with the procedure referred to in Article 82(2).

Article 91
Entry into force

This  Regulation  shall  enter  into  force  on  the  seventh  day  following  that  of  its  publication  in  the
Official Journal of the European Communities.

It shall apply from 1 January 2004.

The integrated system shall apply at the latest from 1 January 2005 as regards the geographical part of
the  parcel  identification  system  provided  for  in  Article  23.  If,  however,  any  parts  of  the  integrated
system  are  operational  before  this  date,  Member  States  shall  use  them  for  their  management  and
checking activities.

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

Done at Brussels,

For the Council
The President

46

ANNEX I

List of support schemes fulfilling the criteria set out in Article 1

Sector

Legal base

Notes

Single payment

Title III of this Regulation

Decoupled payment (see Annex VI)

Durum wheat

Title IV Chapter 1 of this Regulation

Area aid (quality premium)

Protein crop

Title IV Chapter 2 of this Regulation

Title IV Chapter 3 of this Regulation

Title IV Chapter 4 of this Regulation

Title IV Chapter 5 of this Regulation

Area aid

Area aid

Area aid

Area aid

Rice

Nuts

Energy crops

Starch potato

Small farmers'
scheme

Olive oil

Silkworms

Bananas

Dried grapes

Tobacco

Hops

POSEIDOM

POSEIMA

Title IV Chapter 6 of this Regulation

Production aid

Article 2a
Regulation (EC) No 1259/1999

Transitional  area  aid  for  farmers  receiving  less
than € 1 250

Article 5(1)
Regulation 136/66/EEC

Article 1
Regulation (EEC) No 845/72

Article 12
Regulation (EEC) No 404/93

Article 7(1)
Regulation (EC) No 2201/96

Article 3
Regulation (EE) No 2075/92

Article 12
Regulation (EEC) No 1696/71
Regulation (EEC) No 1098/98

Articles 10, 12(1) and 16
Regulation (EC) No 1452/2001

Production aid

Aid to encourage rearing

Production aid

Area aid

Production aid

Area aid

Payments for temporary resting only

Sectors:  development  of  fruit,  vegetables,  plants
and flowers; sugar; milk

Articles 5(1), 9, 16 & 30, 17 & 28(1), 21,
22(7), 27 and 29
Regulation (EC) No 1453/2001

Sectors:  development  of  fruit,  vegetables,  plants
and  flowers;  milk;  potatoes  and  endives;  sugar;
wine; wicker; pineapples, tobacco

POSEICAN

Aegean Islands

Articles 9, 13 and 14
Regulation (EC) No 1454/2001

Articles 7, 8, 9, 11 and 12
Regulation (EEC) No 2019/93

Sectors:  development  of  fruit,  vegetables,  plants
and flowers; wine; potatoes; honey

Sectors:  development  of  fruit,  vegetables,  plants
and flowers; potatoes; wine; olives; honey

47

ANNEX II

National ceilings referred to in Article 11(3)

Member State

2006

2007

2008

2009

2010

2011

2012

MIO EUR

Belgium

Denmark

Germany

Greece

Spain

France

Ireland

Italy

Luxembourg

Netherlands

Austria

Portugal

Finland

Sweden

United Kingdom

1.4

2.6

13.3

13.6

18.7

17.6

5.0

20.4

0.1

2.3

4.0

3.6

2.7

2.2

5.8

9.5

17.3

84.1

60.3

35.2

63.4

40.0

72.2

44.9

80.9

49.8

89.7

53.2

95.9

306.5

349.6

329.6

435.7

465.3

189.8

220.0

250.2

280.3

296.9

101.2

345.2

396.2

447.2

498.2

530.2

131.0

491.8

558.2

624.6

691.0

739.7

27.9

98.2

0.5

14.6

19.3

16.7

13.6

13.5

47.7

97.3

111.5

125.7

139.8

149.0

322.3

371.8

421.4

471.0

499.9

2.0

55.5

64.0

54.3

46.0

48.6

2.3

63.2

73.9

62.8

52.9

55.5

2.5

70.9

83.7

71.3

59.9

62.4

2.8

78.6

93.6

79.8

66.8

69.2

3.0

84.0

99.3

84.5

71.0

73.9

183.2

207.4

231.7

255.9

274.3

48

1. 

2. 

3. 

4. 

5. 

6. 

7. 

8. 

9. 

ANNEX III

Statutory management requirements referred to in Articles 3 and 4

Public, animal and plant health

(a) Public health

Articles

Council Directive 70/524/EEC concerning additives in feedingstuffs

Article 9k

Council Directive 91/414/EEC concerning the placing of plant protection products on the market

Article 3

Council Directive 92/46/EEC laying down the health rules for the production and placing on the
market of raw milk, heat-treated milk and milk-based products

Council Regulation (EEC) No 315/93 of 8 February 1993 laying down Community procedures for
contaminants in food

Council Directive 94/371/EC laying down specific public health conditions for the putting on the
market of certain types of eggs

Council  Directive  95/69/EC  laying  down  the  conditions  and  arrangements  for  approving  and
registering certain establishments and intermediaries operating in the animal feed sector

Council  Directive  96/22/EC  concerning  the  prohibition  on  the  use  in  stockfarming  of  certain
substances having a hormonal or thyrostaic action and of beta-agonists

Council  Directive  96/23/EC  on  measures  to  monitor  certain  substances  and  residues  thereof  in
live animals and animal products

Council  Directive  96/25/EC  of  29  April  1996  on  the  circulation  of  feed  materials,  amending
Directives  70/524/EEC,  74/63/EEC,  82/471/EEC  and  93/74/EEC  and  repealing  Directive
77/101/EEC

10.  Directive 2002/32/EC of the European Parliament and of the Council on undesirable substances in

animal feed

11.  Regulation  (EC)  No  178/2002  of  the  European  Parliament  and  of  the  Council  laying  down  the

general principles and requirements of food law

12.  Regulation  (EC)  No  1774/2002  of  the  European  Parliament  and  of  the  Council  laying  down

health rules concerning animal by-products not intended for human consumption

(b) animal health

Articles 3,
4 and 5

Article 2

Article2

Article2

Articles 3,
4, 5 and 7

Articles 9
and 10

Article 3

Articles 3
and 5

Articles 14,
15, 18, 19
and 20

Articles 9
and 22

13.  Council  Directive  82/894  /EEC  of  21  December  1982  on  the  notification  of  animal  diseases

within the Community

14.  Council  Directive  85/511/EEC  introducing  Community  measures  for  the  control  of  foot-and-

Article 3

mouth disease

15.  Council  Directive  92/119/EEC  introducing  general  Community  measures  for  the  Control  of

Article 3

certain animal diseases and specific measures relating to swine vesicular disease

16.  Council Directive 2000/75/EC laying down specific provisions for the control and eradication of

Article3

bluetongue

17.  Regulation (EC) No 999/2001 of the European Parliament and of the Council laying down rules

for the prevention, control and eradication of transmissible spongiform encephalopathies

Articles 7, 11,
12, 13 and 15

49

(c)

identification and registration of animals

18.  Council Directive 92/102/EEC on identification and registration of animals

19.  Commission Regulation (EC) No 2629/97 of laying down detailed rules for the implementation of
Council  Regulation  (EC)  No  820/97  as  regards  eartags,  holding  registers  and  passports  in  the
framework of the system for the identification and registration of bovine animals

20.  Regulation  (EC)  No  1760/2000  of  the  European  Parliament  and  of  the  Council  establishing  a
system for the identification and registration of bovine animals and regarding the labelling of beef
and beef products

(d) plant health

21.  Council  Directive  2000/29/EC  on  protective  measures  against  the  introduction  into  the
Community of organisms harmful to plants or plant products and against their spread within the
Community

Articles 3,
4 and 5

Articles 2,
6 and 8

Article 4
and 7

Article 10

Occupational safety

22.  Council  Directive  89/391/EEC  of  12  June  1989  on  the  introduction  of  measures  to  encourage

Article 6

improvements in the safety and health of workers at work (OJ L 183, 29.6.1989, p. 1 )

23.  Council Directive 90/394/EEC of 28 June 1990 on the protection of workers from the risks related
to exposure to carcinogens at work (sixth individual Directive within the meaning of Article 16(1)
of Directive 89/391/EEC) (OJ L 196, 26.7.1990, p. 1)

Article 3
Articles 4
to 12

24.  Council Directive 94/33/EC of 22 June 1994 on the protection of young people at work

(OJ L 216, 20.8.1994, p. 12)

25.  Directive 2000/54/EC of the European Parliament and of the Council of 18 September 2000 on
the  protection  of  workers  from  risks  related  to  exposure  to  biological  agents  at  work  (seventh
individual directive within the meaning of Article 16(1) of Directive 89/391/EEC)
(OJ L 262 17.10.2000, p. 21)

Articles 3,
6, 8 and 9

Environment

26.  Directive 75/442/EEC on waste (OJ L 194, 25.7.1975, p. 39)

Articles 8,
9 and 14

27.  Directive  76/464/EEC  on  pollution  caused  by  certain  dangerous  substances  discharged  into  the

Article 3

aquatic environment of the Community (OJ L 129, 18.5.76, p. 23)

28.  Directive 79/409/EEC on the conservation of wild birds (OJ L 103, 25.4.1979, p. 1)

29.  Directive  80/68/EEC  on  the  protection  of  groundwater  against  pollution  caused  by  certain

dangerous substances (OJ L 20, 26.1.1980, p. 43)

Articles 3,
4, 5 and 9

Articles 4
and 5

30.  Directive  86/278/EEC  on  the  protection  of  the  environment,  an  in  particular  of  the  soil,  when

Article 3

sewage sludge is used in agriculture (OJ L 181, 4.7.1986, p. 6)

31.  Directive  91/676/EEC  concerning  the  protection  of  waters  against  pollution  caused  by  nitrates

from agricultural sources (OJ L 375, 31.12.1991, p. 1)

32.  Directive 92/43/EEC on the conservation of natural habitats and of wild flora and fauna

(OJ L 206, 22.7.1992, p. 7)

Animal welfare

33.  Council Directive 91/628/EEC on the protection of animals during transport

34.  Council Directive 91/629/laying down minimum standards for the protection of calves

35.  Council Directive 93/119/EC on the protection of animals at the time of slaughter or killing

Articles 4 and
5

Articles 6, 12
and 16

Article 5

Article 3
Article4

Article7

50

36.  Council Directive 91/630/EEC laying down minimum standards for the protection of pigs

37.  Council Directive 98/58/EC concerning the protection of animals kept for farming purposes

38.  Council Directive 1999/74/EC laying down minimum standards for the protection of laying hens

Article 3

Article 4

Article 7

51

Issue

Soil erosion

ANNEX IV

Good agricultural conditions referred to in Article 5

Requirement

Standards

Protect 
measures

soil 

through 

appropriate

–  Minimum  winter  soil  cover  at  farm
level and for sloping areas and all year
round minimum soil cover

–  Tillage practices (angle of inclination
and  length  of  slopes,  nearness  to
watercourses,  direction  and  timing  of
ploughing etc.)

–  Cropping  restrictions  in  relation  to

land use where applicable

–  Management  techniques  related  to
trees,

specific  crops  (vines,  olive 
maize etc.)
–  Retain terraces
–  Soil  tare  levels  for  specific  crop

(potatoes, sugar beet, etc.)

Soil organic matter

Maintain  soil  organic  matter 
through 
crop 
appropriate 
practices and tillage techniques

levels
rotation

–  Principles  and  standards  for  crop
rotations  including  where  appropriate
for the incorporation of crop residues

Soil structure

soil 

Maintain 
through
appropriate  machinery  use  and  stocking
rates

structure 

Soil salinisation

irrigation  and 

soil  nutrient
Follow 
management  practices  which  avoid  a
build up of salts in soils

–  Arable 

stubble  management 

in

particular regarding burning

–  Rules  where  renewal  of  permanent

pasture is undertaken

–  Appropriate  machinery  use 

(tyre
pressure,  use  of  tramlines,  type  and
timing of agricultural operations etc.)
–  Maximum  for  stocking  rate  levels  to

avoid damage to soil structure

–  Ensure balance of irrigation, drainage

and water table replenishment

–  In  coastal  areas,  irrigation  which
avoids  the  intrusion  of  sea  water  into
groundwater

Minimum level of
maintenance

Ensure a  minimum level of  maintenance
and avoid the deterioration of habitats

–  Minimum  livestock  stocking  rates

or/and appropriate regimes

–  Protect  permanent  pasture  through
principles  and  standards  restricting
use changes

–  Retention  of  field  boundaries  and

landscape features

–  Avoiding the encroachment of shrubs

on agricultural land

52

ANNEX V

Compatible support schemes referred to in Article 29

Sector

Legal base

Notes

Dried grapes

Tobacco

Hops

Agri-environment

Forestry

Less-favoured areas and areas
with environmental restrictions

Olive oil

Cotton

Dried fodder

Citrus for processing

Tomatoes for processing

Wine

Article 7(1)
Regulation (EC) No 2201/96

Article 3
Regulation (EEC) No 2075/92

Article 12
Regulation (EEC) No 1696/71
Regulation (EC) No 1098/98

Title II, chapter VI (Articles 22 to 24)
and Article 55(3)
Regulation (EC) No 1257/1999

Area-related aid

Production aid

Area-related aid

Payments for temporary resting
and grubbing-up

Area-related aid

Article 31 and Article 55(3)
Regulation (EC) No 1257/1999

Title II, chapter V (Articles 13
to 21)and Article 55(3)
Regulation (EC) No 1257/1999

Article 5(1)
Regulation No 136/66/EEC

Article 8
Regulation (EC) No 1554/95

Articles 10 and 11
Regulation (EC) No 603/95

Article 1
Regulation (EC) No 2202/96

Article 2
Regulation (EC) No 2201/96

Area-related aid

Area-related aid

Production aid

Production aid

Production aid

Production aid

Production aid

Articles 11 to 15
Regulation (EC) No 1493/1999

Restructuring aid

53

List of direct payments in relation to the single payment referred to in Article 36

ANNEX VI

Sector

Arable crops

Potato starch

Grain legumes

Rice

Seeds

Legal base

Notes

Articles 2, 4 and 5
Regulation (EC) No 1251/1999

Area  aid,  including  set-aside  payments,  grass  silage
payments,  supplementary  amounts,  durum  wheat
supplement and special aid

Article 8(2)
Regulation (EEC) No 1766/92

Payment  for  producers  of  potatoes  intended  for  the
manufacture of potato starch

Article 1
Regulation (EC) No 1577/96

Article 6
Regulation (EC) No 3072/95

Article 3
Regulation (EEC) No 2358/71

Area aid

Area aid

Production aid

Beef and veal

Articles 4, 5, 6, 10, 11, 13 and 14
Regulation (EC) No 1254/1999

Special  premium,  deseasonalisation  premium,  suckler
cow  premium  (including  when  paid  for  heifers  and
including the additional national suckler cow premium
when  co-financed),  slaughter  premium,  extensification
payment, additional payments

Milk and dairy
products

Annex  VII  point  F  of 
Regulation

this

Dairy premium and additional payments

Sheep and goats

POSEIDOM

POSEIMA

POSEICAN

Article 5
Regulation (EC) No 2467/98,
Articles  4,  5  and  11(1)  and  (2)
1st, 2nd and 4th indent
Regulation (EC) No 2529/2001

Article 9(1)(a) and (b)
Regulation (EC) No 1452/2001

Articles 13(2) and (3), 22(2) and (3)
Regulation (EC) No 1453/2001

Article  5(2)  and  (3),  6(1)  and  (2)
Regulation (EC) No 1454/2001

Ewe  and  she-goat  premium,  supplementary  premium
and certain additional payments

Sectors: beef and veal

Sectors: beef and veal

Sectors: beef and veal; sheep and goats

Aegean Islands

Article 6(2) and (3)
Regulation (EEC) No 2019/93

Sectors: beef and veal

Dried fodder

Article 3
Regulation (EEC) No 603/95

Payment  for  processed  products  (as  applied  according
to Annex VII point D of this Regulation)

54

ANNEX VII

Calculation of the reference amount referred to in Article 40

A.

1. 

Area aids

Where a farmer has received  area  aids,  the  number  of hectares, to two  decimal  places,  for
which a payment has been granted, respectively, in each year of the reference period, shall
be multiplied by the following amounts:

1.1.

For  cereals, including  durum  wheat,  oilseeds,  protein  crops, linseed,  flax  and  hemp  grown
for fibre, grass silage and set-aside:

– 

EUR 66/t multiplied by the yield as provided for  in  Article  4(2)  of  Regulation  (EC)
No  1251/1999  determined  in  the  regionalisation  plan  for  the  region  concerned
applicable in the calendar year 2002.

However,  in  case  the  condition  for  the  application  of  Article  3(7)  of  Regulation  (EC)
No 1251/1999  are  met  in  the  reference  period,  by  derogation  to  Article  3(7)  of  that
regulation, the yields for the year in question shall be the yields that would have been applied
in case of application of the said Article 3(7) for the following marketing year.

This  point  shall  apply  without  prejudice  to  the  provisions  laid  down  by  Member  States  in
application of Article 6(6) of Regulation (EC) No 1251/1999.

By way of derogation from Article 41, for flax and hemp, the average shall be calculated on
the basis of the amounts granted in the calendar year 2001 and 2002.

1.2.

For rice:

– 

EUR 102/t multiplied by the following average yields:

Member States

Yields (t/ha)

Spain

France
-  Metropolitan territory
- 
French Guyana

Greece

Italy

Portugal

6.35

5.49
7.51

7.48

6.04

6.05

1.3.

For grain legumes:

– 
– 

for lentils and chick peas, EUR 181/ha
for  vetches,  respectively,  EUR  175.02/ha  in  2000,  EUR  176.60/ha  in  2001  and
EUR 150.52/ha in 2002.

2. 

Where a farmer has received durum wheat supplement or special aid, the number of hectares,
to two decimal places, for which such a payment has been granted, respectively, in each year
of the reference period, shall be multiplied by the following amounts:

In  the  zones  listed  in  Annex  II  of  Regulation  (EC)  No  1251/1999  and  in  Annex  IV  of
Regulation (EC) No 2316/1999:

55

– 
– 
– 

EUR 313/ha for the single payment to be granted for the calendar year 2004,
EUR 281/ha for the single payment to be granted for the calendar year 2005,
EUR  250/ha  for  the  single  payment  to  be  granted  for  the  calendar  year  2006  and
subsequent calendar years.

In the zones listed in Annex V of Regulation (EC) No 2316/1999:

– 
– 

EUR 93/ha for the single payment to be granted for the calendar year 2004,
EUR 46/ha for the single payment to be granted for the calendar year 2005.

3. 

For  the  purpose  of  the  preceding  points,  "number  of  hectares"  shall  mean  the  number  of
hectares  corresponding  to  each  different  type  of  area  aid  listed  in  Annex  VI  of  this
Regulation,  taking  into  account  the  application  of  Articles  2(4)  and  5  of  Regulation  (EC)
No 1251/1999 and Article 3(1) of Regulation (EC) No 1577/96. In case of rice,  by  way  of
derogation  to  Article  6(5)  of  Council  Regulation  (EC)  No  3072/95,  where  the  areas  given
over to rice in one Member State in the reference period exceeded its Maximum Guaranteed
Area for this period, the amount per hectare shall be reduced proportionally.

B.

Potato starch payment

Where a farmer has received potato starch payment, the amount shall be calculated by multiplying the
number of tons for which such a payment has been granted, respectively, in each year of the reference
period, by EUR 55. 27 per tonne of potato starch. Member states shall calculate the number of hectares
to  be  included  in  calculation  of  the  single  payment  proportionately  to  the  number  of  tons  of  potato
starch produced for which the aid provided for in Article 8(2) Regulation (EEC) No 1766/92 has been
granted, respectively, in each year of the reference period, and within the limits of a base area to be
fixed by the Commission on the basis of the number of hectares, covered by a cultivation contract in
the reference period, communicated by Member States.

C.

Livestock premiums and supplements

Where a farmer has received livestock premiums and/or supplements, the amount shall be calculated
by  multiplying  the  number  of  animals  for  which  such  a  payment  has  been  granted,  respectively,  in
each year of the reference period, by the amounts per head established for the calendar year 2002 by
the corresponding Articles referred to in Annex VI, taking into account the application of Article 4(4),
Article  7(2)  and  Article  10(1)  of  Regulation (EC)  No 1254/1999  or  Article  8(3)  of  Regulation (EC)
No 2529/2001.  However  the  payments  in  application  of  the  following  provisions  shall  not  be  taken
into account:

– 
– 
– 

D.

Article 4(2) second subparagraph of Regulation (EC) No 1254/1999;
Article 32(11) and (12) of Commission Regulation (EC) No 2342/1999;
Article 4 of Commission Regulation (EC) No 1458/2001.

Dried fodder

When  a  farmer  has  delivered  fodder  under  a  contract  as  provided  for  in  Article  9(c)  of  Regulation
(EC)  No  603/95,  Member  States  shall  calculate  the  amount  to  be  included  in  the  reference  amount
proportionately  to  the  number  of  tons  of  dried  fodder  produced  for  which  the  aid  provided  for  in
Article 3 of that Regulation has been granted, respectively, in each year of the reference period, and
within the limits of the following ceilings expressed in EUR millions:

56

Member State

Ceiling for fodder processed
into the products referred to in
Article 3(2) of Regulation (EC)
No 603/95; (dehydrated fodder)

Ceiling for fodder processed
into the products referred to in
Article 3(3) of Regulation (EC)
No 603/95. (sun-dried fodder)

Total ceiling

UEBL

Denmark

Germany

Greece

Spain

France

Ireland

Italy

Netherlands

Austria

Portugal

Finland

Sweden

United Kingdom

0.049

5.424

11.888

1.101

42.124

41.155

0.166

17.999

6.804

0.070

0.102

0.019

0.232

1.950

1.951

0.069

1.586

0.020

0.049

5.424

11.888

1.101

44.075

41.224

0.166

19.585

6.804

0.070

0.122

0.019

0.232

1.950

Member  States  shall  calculate  the  number  of  hectares  to  be  included  in  calculation  of  the  reference
amounts proportionately to the number of tons of dried fodder produced for which the aid provided for
in Article 3 Regulation (EC) No 603/95 has been granted, respectively, in each year of the reference
period, and within the limits of a base area to be fixed by the Commission on the basis of the number
of  hectares,  covered  by  a  cultivation  contract  in  the  reference  period,  communicated  by  Member
States.

E.

Regional aids

In the regions concerned, the following amounts shall be included in the calculation of the reference
amount:

– 

– 

– 

F.

3. 

EUR 19/t multiplied by the yields utilised for the area payments for cereals, oilseeds, linseed
and flax and hemp grown for fibre in the regions indicated in Article 4(4) of Regulation (EC)
No 1251/1999;
the  amount  per  head  as  provided  for  in  Article  9(1)(a)  and  (b)  of  Regulation  (EC)
No 1452/2001,  Articles  13(2)  and  (3),  22(2)  and  (3)  of  Regulation  (EC)  No  1453/2001,
Article  5(2)  and  (3),  6(1)  and  (2)  of  Regulation  (EC)  No  1454/2001,  multiplied  by  the
number of animals for which such a payment has been granted in 2002;
the amount per head as provided for in Article 6(2) and (3) of Regulation (EEC) No 2019/93
multiplied by the number of animals for which such a payment has been granted in 2002.

Dairy premiums and supplements

Starting from 2004, where a farmer has an individual reference quantity for milk as provided
for by Article 5 of Regulation (EC) No…*[New Regulation establishing a levy in the milk
sector], the amounts referred to in points F. 2 and F. 5 shall be included in the calculation of
the reference amount.

57

4. 

5. 

6. 

7. 

Without prejudice to point F.3 and to reductions resulting from the application of point F.4,
the  individual  reference  quantity  for  milk  available  on  the  holding  on  31 March  2004,
expressed in tons, shall be multiplied by:

– 
– 
– 
– 
– 

EUR 5,75/t for the single payment to be granted for the calendar year 2004,
EUR 11,49/t for the single payment to be granted for the calendar year 2005,
EUR 17,24/t for the single payment to be granted for the calendar year 2006
EUR 22,99/t for the single payment to be granted for the calendar year 2007,
EUR 28,74/t for the single payment to be granted for the calendar year 2008 and the
subsequent calendar years.

Individual  reference  quantities  which  have  been  the  subject  of  temporary  transfers  in
accordance with Article 6 of Regulation (EEC) No 3950/92 during the period from 1 April
2003 to 31 March 2004 shall be deemed to be available on the holding of the transferee on
31 March 2004.

For the purpose of applying paragraph 2, where, on 31 March 2004, the sum of all individual
reference quantities in a Member State exceeds the sum of the corresponding total quantities
of that Member State set out in Annexe I of Regulation (EEC) No 3950/92, as amended by
Regulation (EC) No 1256/1999 [**], for the 12-month period 1999/2000, the Member State
concerned  shall,  on  the  basis  of  objective  criteria,  take  the  necessary  steps  to  reduce
accordingly the total amount of individual reference quantities on its territory.

Member  States  shall,  on  a  yearly  basis,  make  additional  payments  to  producers  in  their
territory totalling the global amounts per year set out in point F.6. Such payments shall be
made according to objective criteria and in such a way as to ensure equal treatment between
producers and to avoid market and competition distortions. Moreover, such payments shall
not be linked to fluctuations of market prices.

Premium supplements shall only be granted as a supplementary amount per premium amount
as set out in point F.2.

8. 

Additional payments: global amounts expressed in EUR million:

58

2004

2005

2006

2007

2008 and
subsequent
calendar years

Belgium

Denmark

Germany

Greece

Spain

France

Ireland

Italy

Luxembourg

Netherlands

Austria

Portugal

Finland

Sweden

8.6

11.5

72.0

1.6

14.4

62..6

13.6

25.7

0.7

28.6

7.1

4.8

6.2

8.5

United Kingdom

37.7

17.1

23.0

144.0

3.3

28.7

125.3

27.1

51.3

1.4

57.2

14.2

9.7

12.4

17.1

75.4

25.7

34.5

216.0

4.9

43.1

187.9

40.7

77.0

2.1

85.8

21.3

14.5

18.6

25.6

34.3

46.0

288.0

6.5

57.5

250.5

54.3

102.7

2.8

114.4

28.4

19.3

24.8

34.1

42.8

57.5

360.0

8.2

71.8

313.2

67.8

128.3

3.5

143.0

35.5

24.2

31.0

42.7

113.1

150.8

188.5

9. 

For  the  purpose  of  this  point,  the  definitions  of  "producer"  and  "holding"  laid  down  in
Article 4 of Regulation (EC) No …[New Regulation establishing a levy in the milk sector]
shall apply.

G.

Seed aids

Where a farmer has received seed production aid, the amount shall be calculated by multiplying the
number of tons for which such a payment has been granted, respectively, in each year of the reference
period,  by  the  amount  established  in  application  of  Article  3  of  Regulation  (EEC)  No  2358/71.
Member  States  shall  calculate  the  number  of  hectares  to  be  included  in  calculation  of  the  single
payment  proportionately  to  the  number  of  tons  of  seed  produced  for  which  the  aid  provided  for  in
Article 3 of Regulation (EEC) No 2358/71 has been granted, respectively, in each year of the reference
period, and within the limits of a base area to be fixed by the Commission on the basis of the number
of  hectares,  covered  by  a  cultivation  contract  in  the  reference  period,  communicated  by  Member
States.

* JO L……
** JO L 160, 26.6.1999, p. 73.

59

ANNEX VIII

National ceilings referred to in Article 44

Member State

2004

2005

2006

2007

Belgium

Denmark

Germany

Greece

Spain

France

Ireland

Italy

Luxembourg

Netherlands

Austria

Portugal

Finland

Sweden

443

908

4805

865

3338

7651

1168

2626

25

492

643

433

484

656

471

945

5037

851

3365

7844

1211

2658

27

584

665

445

504

684

498

983

5269

837

3394

8037

1255

2691

29

676

688

457

524

711

526

1020

5501

843

3440

8239

1299

2774

32

768

711

472

544

739

MIO EUR

2008
and subsequent
years

553

1057

5733

848

3486

8441

1343

2857

34

861

734

488

564

766

United Kingdom

3489

3610

3732

3853

3975

60

Traditional production zones for durum wheat as referred to in Article 61

ANNEX IX

GREECE

Nomoi (prefectures) of the following regions

Central Greece
Peloponnese
Ionian Islands
Thessaly
Macedonia
Aegean Islands
Thrace.

SPAIN

Provinces

Almeria
Badajoz
Burgos
Cadiz
Cordoba
Granada
Huelva
Jaen
Malaga
Navarra
Salamanca
Seville
Toledo
Zamora
Zaragoza.

AUSTRIA

Pannonia:

Gebiete der Bezirksbauernkammern

1.
2046 Atzenbrugg
2054 Baden
2062 Bruck/Leitha
2089
Ebreichsdorf
2101 Gänserndorf
2241 Hollabrunn
2275 Kirchberg/Wagram
2305 Korneuburg
Laa/Thaya
2321
2330
Langenlois
2364 Marchfeld
2399 Mistelbach
2402 Mödling
2470
Poysdorf
2500 Ravelsbach
2518 Retz
2551
2585

Schwechat
Tulln

61

2623 Wr. Neustadt
2631 Wolkersdorf
2658

Zistersdorf

Gebiete der Bezirksreferate

2.
3018 Neusiedl/See
3026
3034 Mattersburg
3042 Oberpullendorf

Eisenstadt

Gebiete der Landwirtschaftskammer

3.
1007 Wien.

FRANCE

Regions

Midi-Pyrénées
Provence-Alpes-Côte d'Azur
Languedoc-Roussillon
Departments(*)

Ardèche
Drôme.

ITALY

Regions

Abruzzo
Basilicata
Calabria
Campania
Latium
Marches
Molise
Umbria
Apulia
Sardinia
Sicily
Tuscany.

PORTUGAL

Districts

Santarem
Lisbon
Setubal
Portalegre
Evora
Beja
Faro.

(*)

Each of these departments may be linked to one of the above-mentioned regions.

62

                                                
2003/0007 (CNS)

Proposal for a

COUNCIL REGULATION

amending Regulation (EC) No 1257/1999 on support for rural development
from the European Agricultural Guidance and Guarantee Fund (EAGGF)
and repealing Regulation (EC) No 2826/2000

THE COUNCIL OF THE EUROPEAN UNION,

Having  regard  to  the  Treaty  establishing  the  European  Community,  and  in  particular
Articles 36 and 37 thereof,

Having regard to the proposal from the Commission25,

Having regard to the opinion of the European Parliament26,

Having regard to the opinion of the Economic and Social Committee27,

Having regard to the opinion of the Committee of the Regions28,

Whereas:

(1) 

(2) 

(3) 

In order to achieve the objectives of the common agricultural policy, as laid down in
Article 33 of the Treaty, it is appropriate to reinforce the rural development policy by
increasing the range of accompanying measures a provided for in Council Regulation
(EC) No 1257/199929.

A more rapid implementation in the agricultural sector of demanding standards based
on  Community  legislation  concerning  the  environment,  public,  animal  and  plant
health, animal welfare  and  occupational  safety  should  be  promoted.  Those  standards
may impose new obligations on farmers giving rise to a loss of income or  additional
costs. Temporary and degressive support should be provided to farmers to help cover
partly the costs arising from the implementation of such standards.

Following  the  introduction  of  the  “meeting  standards”  measure,  support  currently
permitted  under  Regulation  (EC)  No  1257/1999  to  farmers  for  limitations  on
agricultural  use  in  areas  with  environmental  restrictions  should  henceforth  cover
limitations  arising  from  the  implementation  of  Council  Directive  79/409/EEC  of

25

26

27

28

29

OJ C …, …, p. …
OJ C …, …, p. …
OJ C …, …, p. …
OJ C …, …, p. …
OJ L 160, 26.6.1999, p. 80.

63

                                                
(4) 

(5) 

(6) 

(7) 

(8) 

2 April 1979 on the conservation of wild birds30 and Council Directive 92/43/EEC of
21 May 1992 on the conservation of natural habitats and wild fauna and flora31.

Farm  advisory  systems  as  provided  for 
in  Council  Regulation  (EC)  No
.../…[establishing  common  rules  for  direct  support  schemes  under  the  common  agricultural
policy  and  support  schemes  for  producers  of  certain  crops]32,  are  to  identify  and
propose improvements in current performance with regard to statutory environmental,
public,  animal  and  plant  health,  animal  welfare  and  occupational  safety  standards.
Support should be provided to farmers towards the costs of such advisory services.

Farmers should be encouraged to adopt high standards of animal welfare. The scope of
the  existing  agri-environment  Chapter  of  Regulation  (EC)  No  1257/1999  should  be
extended to provide for support to farmers who undertake to adopt standards of animal
husbandry which go beyond statutory minima.

Experience  has shown  that  the  range  of instruments to promote food  quality  in  rural
development policy needs to be reinforced.

Farmers  should  be  encouraged  to  participate  in  Community  or  national  food  quality
schemes.  Participation  in  such  schemes  can  give  rise  to  additional  costs  and
obligations  which  are  not  fully  rewarded  by  the  marketplace.  Temporary  support
should be provided to farmers who participate in such schemes.

There is a need to improve consumers’ awareness of the existence and specifications
of  products  produced  under  Community  or  national  food  quality  schemes.  Support
should  be  provided  to  producer  groups  to  inform  consumers  and  promote  products
provided under schemes supported by Member States within their rural development
plans.  In  order  to  ensure  there  is  no  scope  for  duplication  of  agricultural  promotion
activities on the internal market, Community support foreseen by Council Regulation
(EC) No 2826/2000 on information and promotion actions for agricultural products on
the internal market33 should be suppressed from 2005.

(9) 

The  introduction  of  the  new  accompanying  measures  necessitates  a  clarification  of
certain  existing  provisions.  Such  clarifications  concern  mainly  the  investment  in
agricultural holdings and the financial provisions.

(10)  Experience  to date in the implementation  of  rural  development  programming  for  the
2000  to  2006  period  has  shown  a  need  to  clarify  and  simplify  certain  provisions  of
Regulation  (EC)  No  1257/1999.  Such  clarifications  concern  mainly  the  scope  and
detailed  content  of  support  for  training,  forestry  and  promoting  the  adaptation  and
development of rural areas.

(11)  Regulation (EC) No 1257/1999 should therefore be amended accordingly,

30

31

32

33

OJ L 103, 25.4.1979, p. 1. Directive as last amended by Directive 97/49/EC (OJ L 223, 13.8.1997, p. 9).
OJ  L  206,  22.7.1992,  p.  7.  Directive  as  last  amended  by  Directive  97/62/EC  (OJ  L  305,  8.11.1997,
p. 42).
OJ L …, …, p. ...
OJ L 328, 23.12.2000, p.2

64

                                                
HAS ADOPTED THIS REGULATION:

Article 1

Regulation (EC) No 1257/1999 is amended as follows:

(1)

In Article 5, the following paragraphs are added:

“The conditions for support for investment laid down in the first paragraph must be
fulfilled at the time when the individual decision to grant support is taken.

Where  investments  are  made  in  order  to  comply  with  newly  introduced  minimum
standards relating to the environment, hygiene, and animal welfare, support may be
granted in order to comply with the new standards. In such cases, a period of grace
may be provided to farmers to meet these minimum standards where time is needed
to solve specific problems involved in complying with such standards.”

(2)

In the second paragraph of Article 9, the first indent is replaced by the following:

“-

to  prepare  farmers  and  other  persons  involved  in  agricultural  activities  for
qualitative reorientation of production, the application of production practices
compatible  with  the  maintenance  and  enhancement  of  the  landscape,  the
protection  of  the  environment,  hygiene  standards  and  animal  welfare  and
acquisition  of  the  skills  needed  to  enable  them  to  manage  an  economically
viable farm, and”

(3)

Article 16(1) is replaced by the following:

“1.

Payments to compensate for costs incurred and income foregone may be made
to  farmers  who  are  subject  to  restrictions  on  agricultural  use  in  areas  with
environmental  restrictions  as  a  result  of  the  implementation  of  Directives
79/409/EEC* and 92/43/EEC**, if and in so far as such payments are necessary
to  solve  the  specific  problems  arising  from  the  implementation  of  those
Directives.

*
**

OJ L 103, 25.4.1979, p. 1.
OJ L 206, 22.7.1992, p. 7.”

(4)

The following Chapter is inserted after Chapter V of Title II:

“CHAPTER Va
MEETING STANDARDS

Article 21a

Support  to  help  farmers  to  adapt  to  demanding  standards  based  on  Community
legislation in the fields  of the  environment, public, animal  and  plant  health,  animal
welfare and occupational safety shall contribute to the following objectives:

(a)

a more rapid implementation of demanding Community standards by Member
States;

(b)

the respect of those standards by farmers;

65

(c)

the  use  of  farm  advisory  services  by  farmers,  as  provided  for  in  Council
Regulation (EC) No …[establishing common rules for direct support schemes
under  the  common  agricultural  policy  and  support  schemes  for  producers  of
certain  crops***],  in  assessing  the  performance  of  farm  businesses  and
identifying  improvements  required  with  regard  to  the  statutory  management
requirements as set out in that Regulation.

***OJ L ………..

Article 21b

1.

2.

3.

1.

2.

1.

2.

Temporary support intended to contribute partly to costs incurred and income
foregone  may  be  granted  to  farmers  who  have  to  apply  demanding  standards
based on Community legislation and newly introduced in national legislation.

Support may be granted during a period not exceeding five years from the date
the standard becomes mandatory in accordance with Community legislation.

To  be  eligible  for  support,  the  standard  should  impose  new  obligations  or
restrictions in farming practice which have a significant impact on typical farm
operating costs and which concern a significant number of farmers within the
area covered by the rural development plan.

For Directives  for  which the implementation  deadline  has  been exceeded  and
which are not yet correctly implemented by the Member State, support may be
granted during a period not exceeding five years from [date of entry into force
of this Regulation].

Support shall not be payable where the non-application of a standard is due to
the  non-respect  by  the  applicant  farmer  of  a  standard  already  transposed  in
national legislation.

Article 21c

Support  shall  be  granted  annually  in  the  form  of  a  flat  rate  aid  and  on  a
degressive basis, in equal instalments. Member States shall modulate the level
of payment per standard with regard to the level of obligations resulting from
the  application  of  the  standard.  Payment  shall  be  fixed  at  a  level  which
prevents overcompensation. Costs related to investments shall not be taken into
account when determining the level of annual support.

The maximum eligible annual amount, per holding, of support is set out in the
Annex.

Article 21d

Support may be granted to farmers to help them meet costs arising from the use
of  the  farm  advisory  services  which  identify  and  where  necessary,  propose
improvements relating to the application by farmers of statutory environmental,
public,  animal  and  plant  health,  animal  welfare  and  occupational  safety
standards.

Farm  advisory  services  for  which  support  may  be  granted  shall  be  in
accordance  with  Chapter  III  of  Title  II  of  Regulation  (EC)  No …/…

66

[establishing  common  rules  for  direct  support  schemes  under  the  common
agricultural policy and support schemes for producers of certain crops].

3.

The total amount of support for the first use of advisory services as referred to
in  paragraph  1,  shall  be  limited  to  a  maximum  of  80%  of  the  eligible  cost,
without exceeding the maximum eligible amount as set out in the Annex.”

(5)

In the second paragraph of Article 22, the following indent is:

“-

the improvement of animal welfare”.

(6)

In Article 23(2), the first subparagraph is replaced by the following:

“Agri-environmental commitments shall  involve  more  than the application  of usual
good farming practice including good animal husbandry practice.”

(7)

Article 24 is amended as follows:

(a)

In paragraph 1, the second subparagraph is replaced by the following:

“Costs related to investments shall not be taken into account when calculating
the level of annual support. Costs for non-remunerative investments which are
necessary  to  comply  with  a  commitment  may  be  taken  into  account  in
calculating the level of annual support.”

(b)

In paragraph 2, the second sentence is replaced by the following:

“When support is calculated on an area basis, these amounts shall be based on
that area of the holding to which agri-environmental commitments apply.”

(8)

The following Chapter is inserted after Chapter VI of Title II:

“CHAPTER VIa
FOOD QUALITY

Article 24a

Support  for  agricultural  production  methods  designed  to  improve  the  quality  of
agricultural  products  and  for  promotion  of  those  products  shall  contribute  to  the
following objectives:

(a)

(b)

(c)

to  provide  assurances  to  consumers  on  the  quality  of  the  product  or  of  the
production  process  used  through  the  participation  of  farmers  in  food  quality
schemes as defined in Article 24b;

to achieve added value for agricultural primary products and to enhance market
opportunities;

to improve consumer information on the availability and specifications of such
products.

67

Article 24b

1.

Support  shall  be  granted  to  farmers  who  participate  on  a  voluntary  basis  in
Community  or  national  food  quality  schemes,  which  impose  specific
production  requirements  on  agricultural  products  listed  in  Annex  I  to  the
Treaty, except fishery products, and comply with paragraph 2 or 3.

Support shall only cover products intended for human consumption.

2.

The following European Community quality schemes are eligible for support:

(a) Council Regulation (EEC) No 2081/92 on the protection of geographical
indications  and  designations  of  origin  for  agricultural  products  and
foodstuffs ****,

(b) Council  Regulation  (EEC)  No  2082/92  on  certificates  of  specific

character for agricultural products and foodstuffs *****,

(c) Council  Regulation  (EEC)  No  2092/91  on  organic  production  of
agricultural  products  and  indications  referring  thereto  on  agricultural
products and foodstuffs ******,

(d) Title  VI  on  quality  wine  produced  in  specified  regions  of  Council
Regulation  (EC)  No  1493/1999  on  the  common  organisation  of  the
market in wine *******.

**** OJ L 208, 24.7.1992, p. 1.
***** OJ L 208, 27.7.1992, p. 9.
****** OJ L 198, 22.7.1991, p. 1.
******* OJ L179, 14.7.1999, p. 1.

3.

To  be  eligible  for  support,  food  quality  schemes  recognised  by  the  Member
States shall comply with the criteria set out in points (a) to (e):

(a)

the specificity of the final product produced under such schemes shall be
derived from detailed obligations on farming methods that guarantee:

(i)

specific characteristics, or

(ii)

a  quality  of  the  final  product  that  goes  significantly  beyond  the
commercial commodity standards as regards public, animal or plant
health, animal welfare or environmental protection;

(b)

the schemes involve binding product specifications and compliance with
those specifications shall be verified by an independent inspection body;

(c)

the schemes shall be open to all producers;

(d)

the schemes shall be transparent and assure  complete traceability of  the
products;

(e)

the schemes shall respond to current or foreseeable market opportunities.

68

4.

1.

Schemes whose sole purpose is to provide a higher level of control of respect
of obligatory standards under Community or national law shall not be eligible
for support.

Article 24c

Support  shall  be  paid  as  an  annual  incentive  payment  up  to  the  maximum
eligible  amount  per  holding  as  set  out  in  the  Annex.  The  level  of  payment
amount  shall  be  determined  according  to  the  level  of  the  fixed  costs  arising
from participation in supported schemes and be fixed at a level which prevents
overcompensation.

2.

The duration of such support shall not exceed a period of five years.

Article 24d

1.

2.

3.

Support  shall  be  granted  to  producer  groups  for  activities  intended  to  inform
consumers  about  and  promote  agricultural  products  or  foodstuffs  designated
under Community or national food quality schemes as described in Article 24b
and selected for support by the Member State under the measure provided for
in Articles 24a, 24b and 24c.

Support shall cover information, promotion and advertising activities.

The  total  amount  of  support  shall  be  limited  to  a  maximum  of  70%  of  the
eligible costs of the action.

(9)

Article 29(3) is replaced by the following:

“3.

Such support, as provided for in Articles 30 and 32, shall be  granted only  for
forests  and  areas  owned  by  private  owners  or  by  their  associations  or  by
municipalities  or  their  associations.  This  restriction  shall  not  apply  to  the
measures provided for in the second indent of Article 30(1) for investment in
forests aimed at significantly improving their ecological and social value, and
for the measures provided for in the sixth indent of Article 30(1).”

(10)

Article 29(5) is replaced by the following:

“5. Measures  proposed  under  this  Chapter  in  areas  classified  as  high  or  medium
forest fire risk within the framework of the Community action on protection of
forests against fire, must conform to the forest protection plans established by
the Member States for these areas.”

(11)

In Article 30(1), the last indent is replaced by the following:

“-

restoring  forestry  production  potential  damaged  by  natural  disasters  and  fire
and introducing appropriate prevention actions.”

(12)

Article 31 is amended as follows:

(a)

In paragraph 1, the second subparagraph is replaced by the following:

“Such support may include in addition to establishment costs:

69

– 

– 

an annual premium per hectare afforested to cover maintenance costs for
a period of up to five years,

an  annual  premium  per  hectare  to  cover  loss  of  income  resulting  from
afforestation  for  a  maximum  period  of  20  years  for  farmers  or
associations  thereof  who  worked  the  land  before  its  afforestation  or  for
any other private law person.”

(b)

paragraph 2 is replaced by the following:

“2. Where support is granted for afforestation of agricultural land owned by

public authorities, it shall cover only the cost of establishment.

(c)

In paragraph 3, the second subparagraph is replaced by the following:

“In  the  case  of  fast-growing  species  cultivated  in  the  short  term,  support  for
afforestation shall be granted for establishment costs only.

(13)

In Article 33, the second paragraph is amended as follows:

(a)

the third and the fourth indents are replaced by the following:

“-

-

setting  up  of  farm  advisory  systems,  farm  relief  and  farm  management
services,

marketing  of  quality  agricultural  products,  including  the  setting-up  of
quality schemes,”

(b)

the following indent is added:

“-

management  of 
partnerships.”

integrated  rural  development  strategies  by 

local

(14)

In the second paragraph of Article 34, the following two indents are added:

“-

-

conditions governing meeting standards measures (Chapter Va)

conditions governing food quality measures (Chapter VIa)”.

(15)

Article 35(1) is replaced by the following:

“1. Community support for early retirement (Articles 10, 11 and 12), less-favoured
areas  and  areas  with  environmental  restrictions  (Articles  13  to  21),  meeting
standards (Articles 21a to 21d), agri-environment (Articles 22, 23 and 24), food
quality (Articles 24a to 24d) and afforestation (Article 31) shall be financed by
the EAGGF Guarantee Section throughout the Community.”

(16)

In  the  second  subparagraph  of  Article  37(3),  the  second  indent  is  replaced  by  the
following:

“-

measures  to  support  research  projects  or  measures  eligible  for  Community
funding under Council Decision 90/424/EEC ********.”

******** OJ L 224, 18.8.1990, p. 19.

70

(17)

In article 51, the following paragraph is added:

“5.

State  aid  to  support  farmers  who  adapt  to  demanding  standards  based  on
Community  legislation  in  the  fields  of  the  environment,  public,  animal  and
plant  health,  animal  welfare  and  occupational  safety  shall  be  prohibited  if  it
does  not  satisfy  the  conditions  provided  for  in  Articles  21a,  21b  and  21c.
However, additional aid exceeding the maximum amounts fixed in accordance
with  Article  21c  may  be  granted  to  help  farmers  to  comply  with  national
legislation which exceeds minimum Community standards.

In  the  absence  of  Community  legislation,  state  aid  to  support  farmers  who
adapt to demanding standards based on national legislation in the fields of the
environment, public, animal and plant health, animal welfare and occupational
safety shall be prohibited if it does not satisfy the relevant conditions provided
for  in  Articles  21a,  21b  and  21c.  Additional  aid  exceeding  the  maximum
amounts fixed in accordance with Article 21c may be granted if justified under
paragraph 1 of that Article."

(18)

The Annex is replaced by the text in the Annex to this Regulation.

Regulation (EC) n°2826/2000 is repealed from 1 January 2005.

Article 2

Article 3

This Regulation shall enter into force on the seventh day following that of 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
The President

71

Article

8(2)

12(1)

ANNEX

“ANNEX

TABLE OF AMOUNTS

Subject

Setting-up aid

euro

25 000

Early retirement

15 000 (*)

per transferor and year

150 000

3 500

35 000

total amount per transferor

per worker and year

total amount per worker

15(3)

Minimum compensatory allowance

25 (**)

per hectare areas used for agriculture

Maximum compensatory allowance

200 (***)

per hectare of areas used for
agriculture

16

21c

21d

24(2)

24c

31(4)

32(2)

Maximum payment

Maximum payment

Farm advisory services

Annual crops

Specialised perennial crops

Other lands uses

200

10 000

1 500

600

900

450

per hectare

per holding

per advisory service

per hectare

per hectare

per hectare

Local breeds in danger being lost to
farming

200 (****)

per livestock unit

Animal welfare

Maximum payment

Maximum annual premium to cover
loss of income from afforestation

- for farmers of associations thereof

- for any other private-law person

Minimum payment

Maximum payment

500

1 500

725

185

40

120

per livestock unit

per holding

per hectare

per hectare

per hectare

per hectare

(*)

(**)

(***)

(****)

Subject to the total maximum per transferor, the maximum annual payments may be increased up to
twofold  taking  account  of  the  economic  structure  of  holdings  in  territories  and  the  objective  of
speeding up the adjustment of the agricultural structures.

This  amount  may  be  reduced  to  take  account  of  the  particular  geographical  situation  or  economic
structure of holdings in certain territories and in order to avoid overcompensation and in accordance
with the second indent of Article 15(1).

This  amount  may  be  increased  in  duly  justified  cases  to  take  into  account  the  specific  problems  in
certain regions.

This amount may be increased in exceptional cases taking account of specific requirements of certain
breeds, which should be justified in the Rural Developments plans.”

72

2003/0008 (CNS)

Proposal for a

COUNCIL REGULATION

on the common organisation of the market in cereals

THE COUNCIL OF THE EUROPEAN UNION,

Having  regard  to  the  Treaty  establishing  the  European  Community,  and  in  particular
Articles 36 and the third subparagraph of 37(2) thereof,

Having regard to the proposal from the Commission34,

Having regard to the opinion of the European Parliament35,

Having regard to the opinion of the European Economic and Social Committee36,

Having regard to the opinion of the Committee of the Regions37,

Whereas:

(1) 

(2) 

(3) 

The  operation  and  development  of  the  common  market  for  agricultural  products
should  be  accompanied  by  the  establishment  of  a  common  agricultural  policy  to
include, in particular, a common organisation of agricultural markets which may take
various forms depending on the product.

The  common  agricultural  policy  pursues  the  objectives  set  out  in  Article  33  of  the
Treaty.  In  order  to  stabilise  the  markets  and  ensure  a  fair  standard  of  living  for  the
agricultural  community  in  the  cereals  sector,  it  is  necessary  to  provide  for  internal
market  measures  comprising,  in  particular,  an  intervention  system  and  a  common
import and export system.

Council Regulation (EEC) No 1766/92 of 30 June 1992 on the common organisation
of the market in cereals38 has been substantially amended several times. Since further
amendments  are  to  be  made,  that  Regulation  should  be  replaced  in  the  interests  of
clarity. Regulation (EEC) No 1766/92 should accordingly be repealed.

(4) 

Regulation  (EEC)  No 1766/92  provides  that  a  decision  upon  a  final  reduction  in  the
intervention  price  for  cereals  to  be  applied  from  the  2002/2003  marketing  year

34

35

36

37

38

OJ C …, …, p. …
OJ C …, …, p. …
OJ C …, …, p. …
OJ C …, …, p. …
OJ L 181, 1.7.1992, p. 21. Regulation as last amended by Regulation (EC) No 1666/2000 (OJ L 193,
29.7.2000, p. 1).

73

                                                
onwards is to be taken in the light of market developments. It is important that prices
on the internal market are kept as far as possible in line with those on world markets.
Accordingly the support provided by the market organisation should be reduced so as
to rely less on guaranteed prices. Therefore, it is necessary to establish intervention as
a real safety net. Council Regulation (EC) No 1251/1999 of 17 May 1999 establishing
a support system for producers of certain arable crops39, provides for a compensation
in the light of a final reduction in the intervention price for cereals. Such compensation
is  now  provided  for  in  Council  Regulation  (EC)  No …./….  of  ….  [establishing
common  rules  for  direct  support  schemes  under  the  common  agricultural  policy  and
support schemes for producers of certain crops]40.

In addition to the final steps of support price reduction, it is appropriate to abolish the
monthly  increment  in  order  to  improve  market  fluidity  and  to  simplify  market
management.

The introduction of a single intervention price for cereals has led to the accumulation
of large intervention stocks of rye as a result of the lack of sufficient disposal outlets
on  internal  and  external  markets.  Rye  should  therefore  be  excluded  from  the
intervention system.

The  intervention  agencies  should  be  able,  in  special  circumstances,  to  take
intervention  measures  suited  to  those  circumstances.  In  order  that  the  required
uniformity  of  intervention  systems  may  be  maintained,  those  special  circumstances
should be assessed and the appropriate measures determined at Community level.

The establishment of the intervention price as a real safety net implies the suppression
of the production refund for starches obtained from cereals.

The  non-cereal  starch  production  has  always  been  governed  by  the  common
organisation of the market in cereals. The suppression of the special regime for cereal
starches implies the abolition of the non-cereal starch regime in the framework of this
Regulation.

(5) 

(6) 

(7) 

(8) 

(9) 

(10)  The creation of a single Community market for cereals involves the introduction of a
trading  system  at  the  external  frontiers  of  the  Community.  A  trading  system
complementing the intervention system and including import duties and export refunds
should,  in  principle,  stabilise  the  Community  market.  The  trading  system  should  be
based  on  the  undertakings  accepted  under  the  Uruguay  Round  of  multilateral  trade
negotiations.  The  export  refund  system  is  to  be  applied  to  processed  products
containing cereals to enable them to participate in the world market.

(11) 

In  order  to  monitor  the  volume  of  trade  in  cereals  with  third  countries,  provision
should be made for an import and export licence scheme with the lodging of a security
to ensure that the transactions for which such licences are requested are effected.

(12)  For  the  most  part,  the  customs  duties  applicable  to  agricultural  products  under  the
World Trade Organisation (WTO) agreements are laid down in the common customs

39

40

OJ L 160, 26.6.1999, p. 1. Regulation as last amended by Regulation (EC) No 1038/2001 (OJ L 145,
31.5.2001,p. 16).
OJ L …, …, p. …

74

                                                
tariff. However, for some cereals, the introduction of additional mechanisms makes it
necessary to adopt derogations.

(13) 

In  order  to  prevent  or  counteract  adverse  effects  on  the  Community  market  which
could result from imports of certain agricultural products, imports of one or more such
products  should  be  subject  to  payment  of  an  additional  import  duty,  if  certain
conditions are fulfilled.

(14) 

It is appropriate, under certain conditions, to confer on the Commission the power to
open and administer tariff quotas resulting from international agreements concluded in
accordance with the Treaty or from other acts of the Council.

(15)  Provisions for granting a refund on exports to third countries, based on the difference
between prices within the Community and on the world market, and falling within the
limits  set  by  the  WTO  Agreement  on  agriculture41,  should  serve  to  safeguard
Community participation in international trade in cereals. Such export refunds should
be subject to limits in terms of quantity and value.

(16)  Compliance with the limits in terms of value should be ensured at the time when the
export refunds are fixed through the monitoring of payments under the rules relating to
the  European  Agricultural  Guidance  and  Guarantee  Fund.  Monitoring  can  be
facilitated  by  the  compulsory  advance  fixing  of  export  refunds,  while  allowing  the
possibility, in the case of differentiated refunds, of changing the specified destination
within a geographical area to which a single export refund rate applies. In the case of a
change of destination, the export refund applicable to the actual destination should be
paid, with a ceiling of the amount applicable to the destination fixed in advance.

(17)  Ensuring compliance with the quantity limits requires the introduction of a reliable and
effective system of monitoring. To that end, the granting of export refunds should be
made subject to an export licence. Export refunds should be  granted up to the  limits
available, depending on the particular situation of each product concerned. Exceptions
to  that  rule  should  only  be  permitted  in  the  case  of  processed  products  not  listed  in
Annex I to the Treaty, to which volume limits do not apply, and in the case of food-aid
operations  which  are  exempt  from  any  limitation.  Provision  should  be  made  for
derogating  from  strict  compliance  with  management  rules  where  exports  benefiting
from export refunds are not likely to exceed the quantity ceilings laid down.

(18)  To  the  extent  necessary  for  its  proper  working,  provision  should  be  made  for
regulating  or,  when  the  situation  on  the  market  so  requires,  prohibiting  the  use  of
inward and outward processing arrangements.

(19)  The  customs  duty  system  makes  it  possible  to  dispense  with  all  other  protective
measures  at  the  external  frontiers  of  the  Community.  The  internal  market  and  duty
mechanism  could,  in  exceptional  circumstances,  prove  deficient.  In  such  cases,  in
order  not  to  leave  the  Community  market  without  defence  against  disturbances  that
might  ensue,  the  Community  should  be  able  to  take  all  necessary  measures  without
delay.  All  such  measures  should  comply  with  the  obligations  arising  from  the  WTO
agreements.

41

OJ L 336, 23.12.1994, p. 22.

75

                                                
(20)  Taking into account the influence of the world market price on the internal price, there
should  be  provision  for  appropriate  measures  to  be  taken  in  order  to  stabilise  the
internal market.

(21)  The proper working of a single market based on common prices would be jeopardised
by the granting of national aid. Therefore, the provisions of the Treaty governing State
aid should apply to the products covered by this common market organisation.

(22)  As  the  common  market  in  cereals  is  in  continuous  development,  the  Member  States
and  the  Commission  should  keep  each  other  supplied  with  information  relevant  to
these developments.

(23)  The measures necessary for the implementation of this Regulation should be adopted
in accordance with Council Decision 1999/468/EC of 28  June 1999  laying  down the
procedures for the exercise of implementing powers conferred on the Commission42.

(24) 

In  view  of  the  necessity  to  solve  practical  and  specific  problems,  the  Commission
should be authorised to adopt necessary measures in cases of emergency.

(25)  Expenditure incurred by the Member States as a result of the obligations arising from
the application of this Regulation should be financed by the Community in accordance
with Council Regulation (EC) No 1258/1999 of 17 May 1999 on the financing of the
common agricultural policy43.

(26)  The  common  organisation  of  the  market  in  cereals  should  take  proper  and

simultaneous account of the objectives set out in Articles 33 and 131 of the Treaty.

(27)  The change from the arrangements in Regulation (EEC) No 1766/92 to those provided
for  in  this  Regulation  could  give  rise  to  difficulties,  which  are  not  dealt  with  in  this
Regulation. In order to deal with such difficulties, the Commission should be enabled
to adopt transitional measures.

HAS ADOPTED THIS REGULATION:

Chapter I
Introductory provisions

Article 1

The  common  organisation  of  the  market  in  cereals  shall  comprise  a  scheme  for  an  internal
market and trade with third countries, and cover the following products:

CN code

Description

(a) 0709 90 60

0712 90 19

Sweet corn, fresh or chilled
Dried sweet  corn,  whole,  cut, sliced,  broken  or  in  powder,
but not further prepared, other than hybrid for sowing

42

43

OJ L 184, 17.7.1999, p. 23.
OJ L 160, 26.6.1999, p. 103.

76

                                                
100190 91

100190 99

1002 00 00

1003 00

1004 00

1005 10 90

1005 90 00

1007 00 90

1008

(b) 1001 10

(c) 1101 00 00

1102 10 00

1103 11

1107

(d)

Common wheat and meslin seed

Spelt, common wheat and meslin other than for sowing

Rye

Barley

Oats

Maize (corn) seed other than hybrid

Maize other than seed

Grain sorghum, other than hybrids for sowing

Buckwheat, millet and canary seed; other cereals

Durum wheat

Wheat or meslin flour

Rye flour

Groats and meal of wheat

Malt, whether or not roasted

The products listed in Annex I

Article 2

The  marketing  year  for  the  products  listed  in  Article  1  shall  begin  on  1  July  and  end  on
30 June of the following year.

Article 3

This  Regulation  shall  apply  without  prejudice  to  the  measures  provided  for  by  Council
Regulation  (EC)  No  …./2003,  of  …  2003,  [establishing  common  rules  for  direct  support
schemes under the common agricultural policy and support schemes for producers of certain
crops].

Chapter II
Internal market

Article 4

1. 

2. 

3. 

An  intervention  price  for  cereals  subject  to  intervention  shall  be  fixed  at
EUR 95,35/tonne.

The  intervention  price  shall  refer  to  the  wholesale  stage  for  goods  delivered  to  the
warehouse, before unloading. It shall be valid for all Community intervention centres
designated for each cereal.

The prices fixed in this Regulation may be changed in the light of developments in
production  and  the  markets  in  accordance  with  the  procedure  laid  down  in
Article 37(2) of the Treaty.

77

Article 5

1. 

The  intervention  agencies  designated  by  the  Member  States  shall  buy  in  common
wheat, durum wheat, barley, maize and sorghum which are offered to them and have
been harvested  in  the  Community,  provided  that  the  offers  comply  with  conditions
laid down, in particular in respect of quality and quantity.

2. 

Buying-in may take place only in the following intervention periods:

(a)

from 1 August to 30 April in the case of Greece, Spain, Italy, and Portugal;

(b)

from 1 December to 30 June in the case of Sweden;

(c)

from 1 November to 31 May in the case of the other Member States.

In  the  event  of  the  intervention  period  in  Sweden  leading  to  the  diversion  of  the
products listed in paragraph 1 from other Member States into intervention in Sweden,
detailed  rules  shall  be  adopted  to  rectify  the  position  in  accordance  with  the
procedure referred to in Article 24(2).

3. 

Buying-in shall be carried out on the basis of the intervention price, if necessary after
a price increase or reduction for quality reasons.

Article 6

Detailed rules for the application of Articles 4 and 5 shall be adopted in accordance with the
procedure referred to in Article 24(2), in particular as regards:

(a)

(b)

(c)

(d)

(e)

the determination of the intervention centres;

the minimum conditions, in particular with respect to quality and quantity required of
each cereal in order to be eligible for intervention;

the scales of price increase and reduction applicable to intervention;

the procedures and conditions for taking over by intervention agencies;

the procedures and conditions for disposal by intervention agencies.

Article 7

1. 

Where the market situation so dictates, special intervention measures may be taken.

Such intervention measures may in particular be taken if, in one or more regions of
the Community, market prices fall, or threaten to fall, in relation to the intervention
price.

2. 

The  nature  and  application  of  the  special  intervention  measures  and  the  conditions
and procedures for the sale or for any other means of disposal of the products subject
to  those  measures  shall  be  adopted  in  accordance  with  the  procedure  referred  to  in
Article 24(2).

78

Chapter III
Trade with third countries

Article 8

1. 

Imports  into  the  Community, or  exports  therefrom,  of  any  of  the  products  listed  in
Article 1 shall be subject to presentation of an import or export licence.

Licences  shall be issued  by the Member States  to  any  applicant, irrespective  of  his
place  of  establishment  in  the  Community  and  without  prejudice  to  measures  taken
for the application of Articles 11 to 16.

Import and export licences shall be valid throughout the Community. Such licences
shall be issued subject to the lodging of a security guaranteeing that the products are
imported  or  exported  during  the  term  of  validity  of  the  licence.  Except  in  cases  of
force majeure, the security shall be forfeited in whole or in part if import or export is
not carried out, or is carried out only partially, within that period.

2. 

The  term  of  validity  of  licences  and  other  detailed  rules  for  the  application  of  this
Article shall be adopted in accordance with the procedure referred to in Article 24(2).

SECTION I
PROVISIONS APPLICABLE TO IMPORTS

Article 9

1

2.

3

4.

Unless this Regulation provides otherwise, the rates of import duty in the Common
Customs Tariff shall apply to the products listed in Article 1.

The import duty on products covered by CN codes 1001 90 91, ex 1001 90 99, 1002,
ex  1005  other  than  hybrid  seed  and  1007  00  90,  shall  be  an  amount  equal  to  the
intervention  price,  as  provided  for  in  Article  4,  valid  for  such  products  on
importation  and  increased  by  55%,  minus  the  cif  import  price  applicable  to  the
consignment in question but not exceeding the rate of duty in the Common Customs
Tariff.

For  the  purposes  of  calculating  the  import  duty  referred  to  in  paragraph 2
representative  cif  import  prices  shall  be  established  for  the  products  referred  to  in
that paragraph. Such representative cif import prices shall be established on a regular
basis.

Detailed rules for the application of this Article shall be adopted in accordance with
the procedure referred to in Article 24(2).

The detailed rules shall in particular specify:

(a)

the minimum requirements for high quality common wheat;

(b)

the price quotations to be taken into consideration;

79

(c)

the  possibility,  where  appropriate  in  specific  cases,  of  giving  operators  the
opportunity  of  knowing  the  charge  applicable  before  the  arrival  of  the
consignments concerned.

Article 10

1. 

Without prejudice to Article 9(2), in order to prevent or counteract adverse effects on
the  market  of  the  Community  which  may  result  from  imports  of  certain  products
listed in Article 1, imports of  one or  more  of  such  products  at the  rate  of  duty  laid
down in Article 9 shall be subject to the payment of an additional import duty if the
conditions to be determined by the Commission pursuant to paragraph 4 are fulfilled,
unless  the  imports  are  unlikely  to  disturb  the  Community  market,  or  where  the
effects would be disproportionate to the intended objective.

2. 

Imports  made  at  a  price  below  the  level  notified  by  the  Community  to  the  World
Trade Organisation (‘the trigger price’) may be subject to an additional import duty.

3. 

4. 

1. 

2. 

If  the  volume  of  imports  in  any  year  in  which  the  adverse  effects  referred  to  in
paragraph  1  arise  or  are  likely  to  arise  exceeds  a  level  based  on  market  access
opportunities  defined  as  imports  as  a  percentage  of  the  corresponding  domestic
consumption  during  the  three  previous  years  (‘the  trigger  volume’),  an  additional
import duty may be imposed.

The  import  prices  to  be  taken  into  consideration  for  imposing  an  additional  import
duty  pursuant  to  the  first  subparagraph  of  paragraph  2,  shall  be  determined  on  the
basis of the cif import prices of the consignment under consideration.

Cif import prices shall be checked to that end against the representative prices for the
product on the world market or on the Community import market for that product.

Detailed rules for the application of this Article shall be adopted in accordance with
the  procedure  referred  to  in  Article  24(2).  Such  detailed  rules  shall  specify  in
particular the products to which additional import duties may be applied.

Article 11

Tariff quotas for imports of the products listed in Article 1 resulting from agreements
concluded in accordance with Article 300 of the Treaty or from any other act of the
Council  shall  be  opened  and  administered  by  the  Commission  under  detailed  rules
adopted in accordance with the procedure referred to in Article 24(2).

Tariff  quotas  shall  be  administered  by  applying  one  of  the  following  methods  or  a
combination of them:

(a)

(b)

a  method  based  on  the  chronological  order  of  the  lodgement  of  applications
("first come, first served" principle);

a  method  of  distribution  in  proportion  to  the  quantities  requested  when  the
applications were lodged (using the "simultaneous examination method”);

80

(c)

a  method  based  on  taking  traditional  trade  patterns  into  account  (using  the
"traditional/new arrival method”).

Other  appropriate  methods  may  be  adopted.  They  must  avoid  any  unjustified
discrimination between the operators concerned.

3. 

4. 

The  method of administration adopted  shall, where  appropriate,  give due  weight  to
the  supply  requirements  of  the  Community  market  and  the  need  to  safeguard  the
equilibrium of that market.

The detailed rules referred to in paragraph 1 shall provide for the annual tariff quotas,
if necessary suitably phased over the year, shall determine the administrative method
to be used and, where appropriate, shall include:

(a)

guarantees covering the nature, provenance and origin of the product;

(b)

(c)

recognition  of  the  document  used  for  verifying  the  guarantees  referred  to  in
point (a);

the  conditions  under  which  import  licences  shall  be  issued  and  their  term  of
validity.

In  the  case  of  tariff  quota  for  import  into  Spain  of  2 000 000  tonnes  of  maize  and
300 000 tonnes of sorghum and the tariff quota for import into Portugal of 500 000
tonnes of maize, those detailed rules shall also include the provisions necessary for
carrying out the tariff quota imports and, where appropriate, the public storage of the
quantities imported by the intervention agencies of the Member States concerned and
their disposal on the markets of those Member States.

SECTION II
PROVISIONS APPLICABLE TO EXPORTS

Article 12

1. 

To the extent necessary to enable the following products to be exported on the basis
of quotations or prices for those products on the world market and within the limits
resulting  from agreements  concluded  in accordance  with  Article  300  of  the  Treaty,
the difference between those quotations or prices and prices in the Community may
be covered by export refunds:

(a)

the products listed in Article 1 to be exported without further processing;

(b)

the  products  listed  in  Article  1  to  be  exported  in  the  form  of  good  listed  in
Annex II.

Export refunds on the products referred to in point (b) may not be higher than those
applicable to such products exported without further processing.

2. 

The method to be adopted for the allocation of the quantities which may be exported
with an export refund shall be the method which:

81

(a)

is most  suited  to  the  nature  of  the  product  and  the  situation  on  the  market  in
question,  allowing  the  most  efficient  possible  use  of  the  resources  available,
account  being  taken  of  the  efficiency  and  structure  of  Community  exports
without creating discrimination between large and small operators;

(b)

is  least  cumbersome  administratively  for  operators,  account  being  taken  of
administration requirements;

(c)

precludes discrimination between the operators concerned.

3. 

Export  refunds  shall  be  the  same  for  the  whole  Community.  They  may  vary
according  to  destination,  where  the  world  market  situation  or  the  specific
requirements  of  certain  markets  make  this  necessary.  Refunds  shall  be  fixed  in
accordance with the procedure referred to in Article 24(2). Refunds may be fixed:

(a)

at regular intervals;

(b)

by invitation to tender for products in respect of which provision was made for
that procedure in the past.

Export  refunds  fixed  at  regular  intervals,  may,  if  necessary,  be  amended  in  the
interval  by  the  Commission, at  the  request  either  of  a  Member  State  or  on  its  own
initiative.

Article 13

1. 

2. 

Export  refunds  on  products  listed  in  Article  1  exported  without  further  processing
shall only be granted on application and on presentation of an export licence.

The export refund applicable to products listed in Article 1 exported without further
processing shall be that applicable on the day of application for the licence and,  in
the case of a differentiated refund, that applicable on the same day:

(a)

for the destination indicated on the licence,

or, where appropriate,

(b)

for  the  actual  destination  if  this  differs  from  the  destination  indicated  on  the
licence.  In  that  case,  the  amount  applicable  shall  not  exceed  the  amount
applicable to the destination indicated on the licence.

Appropriate measures may be taken to prevent any abuse of the flexibility provided
for in this paragraph.

3. 

The  scope  of  paragraphs  1  and  2  may  be  extended  to  apply  to  products  listed  in
Article 1 that are exported in the form of goods listed in Annex II, in accordance with
the  procedure  laid  down  in  Article  16  of  Regulation  (EC)  No  3448/9344.  Detailed
implementing rules shall be adopted in accordance with that procedure.

44

OJ L 318, 20.12.1993, p. 18.

82

                                                
4. 

Derogations from paragraphs 1 and 2 may be granted in the case of products listed in
Article 1 on which export refunds are paid under food-aid operations, in accordance
with the procedure referred to in Article 24(2 )

Article 14

A  corrective  amount  applicable  to  the  export  refunds  may  be  set,  in  accordance  with  the
procedure  referred  to  in  Article 24(2).  However,  where  necessary,  the  Commission  may
amend the corrective amounts.

The first subparagraph may be applied to products listed in Article 1 that are exported in the
form of goods listed in Annex II.

Article 15

In  so  far  as  is  necessary  to  take  account  of  the  features  of  production  peculiar  to  certain
spirituous beverages obtained from cereals, the criteria for granting export refunds referred to
in  Article 12(1),  and  the  procedure  for  verification,  may  be  adapted  to  suit  this  particular
situation.

Article 16

Observance of the volume limits resulting from the agreements concluded in accordance with
Article 300 of the  Treaty shall  be  ensured on the basis of the  export  licences  issued  for  the
reference  periods  provided  for  which  apply  to  the  products  concerned.  With  regard  to
compliance  with  the  obligations  arising  under  the  WTO  Agreement  on  Agriculture,  the
ending of a reference period shall not affect the validity of export licences.

Article 17

Detailed rules for the application of this Section, including the provisions on the redistribution
of  exportable  quantities  which  have  not  been  allocated  or  utilised,  and  in  particular  those
concerning  the  adaptation  referred  to in Article  15, shall be  adopted  in  accordance  with  the
procedure referred to in Article 24(2).

Annex II shall be amended in accordance with the same procedure.

SECTION III
COMMON PROVISIONS

Article 18

1. 

To  the  extent  necessary  for  the  proper  working  of  the  common  organisation  of  the
market  in  cereals,  the  Council,  acting  on  a  proposal  from  the  Commission  in
accordance with the voting procedure laid down in Article 37(2) of the Treaty, may
prohibit in whole or in part the use of inward or outward processing arrangements:

83

(a)

(b)

for  products  listed  in  Article  1  that  are  intended  to  be  used  in  producing  the
products referred to in points (c) and (d) of that Article and;

in special cases, for products listed in Article 1 that are intended to be used in
producing goods listed in Annex II.

By  way  of  derogation  from  paragraph  1,  if  the  situation  referred  to  in  paragraph 1
arises with exceptional urgency and the Community market is disturbed or is liable to
be  disturbed  by  the  inward  or  outward  processing  arrangements,  the  Commission
shall,  at  the  request  of  a  Member  State  or  on  its  own  initiative,  decide  on  the
necessary  measures  in  accordance  with  the  procedure  referred  to  in  Article  24(2).
The Council and the Member States shall be notified of such measures, which shall
be  valid  for  no  more  than  six  months  and  shall  be  immediately  applicable.  If  the
Commission receives a request from a Member State, it shall take a decision thereon
within a week following receipt of the request.

Measures  decided  on  by  the  Commission  may  be  referred  to  the  Council  by  any
Member  State  within  a  week  from  the  date  on  which  they  were  notified.  The
Council,  acting  by  a  qualified  majority,  may  confirm,  amend  or  repeal  the
Commission's decision.

If the Council has not acted within three months following the date on which it was
referred to him, the Commission's decision shall be deemed to have been repealed.

Article 19

The  general  rules  for  the  interpretation  of  the  Combined  Nomenclature  and  the
detailed  rules  for  its  application  shall  apply  to  the  tariff  classification  of  products
covered by this Regulation. The tariff nomenclature resulting from the application of
this Regulation shall be incorporated into the Common Customs Tariff.

Save as otherwise provided for in this Regulation or in provisions adopted pursuant
thereto, the following shall be prohibited, in trade with third countries:

(a)

the levying of any charge having equivalent effect to a customs duty;

(b)

the  application  of  any  quantitative  restriction  or  measure  having  equivalent
effect.

Article 20

When the quotations or prices on  the world  market of one  or more  of the  products
listed in Article 1 reach a level that disrupts or threatens to disrupt the availability of
supply on the Community market and where that situation is likely to continue and to
deteriorate,  appropriate  measures  may  be  taken.  Such  measures  may  be  taken  as  a
safeguard measure in case of extreme emergency.

The detailed rules for the  application of this Article shall be adopted in accordance
with the procedure referred to in Article 24(2).

2. 

3. 

1. 

2. 

1. 

2. 

84

Article 21

1. 

2. 

3. 

4. 

If,  by  reason  of  imports  or  exports,  the  Community  market  in  one  or  more  of  the
products listed in Article 1 is affected by, or is threatened with, serious disturbance
likely  to  jeopardise  the  achievement  of  the  objectives  set  out  in  Article  33  of  the
Treaty, appropriate measures may be applied in trade with non-WTO members until
such disturbance or threat of disturbance has ceased.

If the situation referred to in paragraph 1 arises, the Commission shall, at the request
of a Member State or on its own initiative, decide upon the necessary measures. The
Member  States  shall  be  notified  of  such  measures,  which  shall  be  immediately
applicable. If the Commission receives a request from a Member State, it shall take a
decision thereon within three working days following receipt of the request.

Measures  decided  on  by  the  Commission  may  be  referred  to  the  Council  by  any
Member State within three working days of the day on which they are notified. The
Council shall meet  without delay.  It  may,  acting  by  a  qualified  majority,  amend  or
repeal the measure in question within one month following the date on which it was
referred to the Council.

Provisions  adopted  under  this  Article  shall  be  applied  having  regard  to  the
obligations arising from agreements concluded in accordance with Article 300(2) of
the Treaty.

Chapter IV
General provisions

Article 22

Unless this Regulation provides otherwise, Articles 87, 88 and 89 of the Treaty shall apply to
the production of and trade in, the products listed in Article 1 of this Regulation.

Article 23

Member States and the Commission shall send each other any information necessary for the
application of this Regulation and for complying with the international obligations concerning
cereals.

Detailed rules to determine which information is necessary as well as for its communication
and distribution shall be adopted in accordance with the procedure referred to in Article 24(2).

Article 24

1. 

2. 

The  Commission  shall  be  assisted  by  a  Management  Committee  for  Cereals,
hereinafter referred to as "the committee".

Where  reference  is  made  to  this  paragraph,  Articles  4  and  7  of  Decision
1999/468/EC shall apply.

85

The period laid down in Article 4(3) of Decision 1999/468/EC shall be one month.

3. 

The Committee shall adopt its rules of procedure.

The Committee  may  consider any question referred  to it by its chairman,  either  on  his  own
initiative or at the request of a representative of a Member State.

Article 25

Article 26

Measures  which  are  both  necessary  and  justifiable  in  an  emergency,  in  order  to  resolve
practical and specific problems shall be adopted in accordance with the procedure referred to
in Article 24(2).

Such measures may derogate from certain parts of this Regulation, but only to the extent that,
and for such a period, as is strictly necessary.

Article 27

Regulation  (EC)  No  1258/1999  and  the  provisions  adopted  in  implementation  thereof  shall
apply to the expenditure incurred by the Member States in carrying out obligations under this
Regulation.

This Regulation shall be so applied that appropriate account is taken at the same time of the
objectives set out in Articles 33 and 131 of the Treaty.

Article 28

Chapter V
Transitional and final rules

Article 29

1. 

Regulation (EEC) No 1766/92 is repealed.

References  to  the  repealed  Regulation  shall  be  construed  as  references  to  this
Regulation and shall be read in accordance with the correlation table in Annex III.

2. 

Transitional measures may be adopted in accordance with the procedure referred to
in Article 24(2).

This Regulation shall enter into force on the [seventh] day following that of its publication in
the Official Journal of the European Communities.

Article 30

86

It shall apply from the 2004/2005 marketing year.

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

Done at Brussels,

For the Council
The President

87

ANNEX 1
as referred to in Article 1(d)

Description

Manioc, arrowroot, salep, Jerusalem artichokes, sweet potatoes and similar roots and tubers with
high starch or inulin content, fresh, chilled, frozen or dried, whether or not sliced or in the form of
pellets; sago pith

CN code

0714

ex 1102

Cereal flours other than of wheat or meslin:

1102 20

1102 90

— Maize (corn) flour

— Other:

1102 90 10 — — Barley flour

1102 90 30 — — Oat flour

1102 90 90 — — Other

ex 1103

ex 1104

Cereal groats, meal and pellets with the exception of groats and meal of wheat (subheading 1103 11),
groats and meal of rice (subheading 1103 19 50) and pellets of rice (subheading 1103 20 50)

Cereal grains otherwise worked (for example, hulled, rolled, flaked, pearled, sliced or kibbled),
except rice of heading No 1006 and flaked rice of subheading 1104 19 91; germ of cereals, whole,
rolled, flaked or ground

1106 20

Flour and meal of sago or of roots or tubers of heading No 0714

ex 1108

Starches; inulin:

— Starches:

1108 11 00 — — Wheat starch

1108 12 00 — — Maize (corn) starch

1108 13 00 — — Potato starch

1108 14 00 — — Manioc (cassava) starch

ex 1108 19

— — Other starches:

1108 19 90 — — — Other

1109 00 00 Wheat gluten, whether or not dried

1702

Other sugars, including chemically pure lactose, maltose, glucose and fructose, in solid form; sugar
syrups not containing added flavouring or colouring matter; artificial honey, whether or not mixed
with natural honey; caramel:

ex 1702 30

— Glucose and glucose syrup, not containing fructose or containing in the dry state less than 20% by
weight of fructose:

— — Other:

— — — Other:

1702 30 91 — — — — In the form of white crystalline powder, whether or not agglomerated

1702 30 99 — — — — Other

ex 1702 40

— Glucose and glucose syrup containing, in the dry state, at least 20% but less than 50% by weight
of fructose, but excluding isoglucose of subheading 1702 40 10

ex 1702 90

— Other, including invert sugar:

1702 90 50 — — Maltodextrine and maltodextrine syrup

— — Caramel:

— — — Other:

1702 90 75 — — — — In powder form whether or not agglomerated

1702 90 79 — — — — Other

2106

Food preparations not elsewhere specified or included:

ex 2106 90

— Other:

— — Flavoured or coloured sugar syrups:

88

— — — Other:

2106 90 55 — — — — Glucose syrup and maltodextrine syrup

ex 2302

ex 2303

Bran, sharps and other residues, whether or not in the form of pellets, derived from the sifting,
milling or other working of cereals

Residues of starch manufacture and similar residues, beetpulp, bagasse and other waste of sugar
manufacture, brewing of distilling dregs and waste, whether or not in the form of pellets:

2303 10

— Residues of starch manufacture and similar residues

2303 30 00 — Brewing or distilling dregs and waste

2306

Oil-cake and other solid residues, whether or not ground or in the form of pellets, resulting from the
extraction of vegetables fats or oils, other than those of headings 2304 and 2305:

2306 70 00 — Of maize (corn) germ

2308

Vegetable materials and vegetable waste, vegetable residues and by-products, whether or not in the
form of pellets, of a kind used in animal feeding, not elsewhere specified or included:

2308 00 40 — Acorns and horse-chestnuts; pomace or marc of fruit, other than grapes

ex 2309 90

— Other:

— —Other, including premixes:

2309 90 31 — — — Other containing starch, glucose

2309

Preparations of a kind used in animal feeding:

ex 2309 10

— Dog or cat food, put up for retail sale:

— — Containing starch, glucose, glucose syrup, maltodextrine or maltodextrine syrup falling within
subheadings 1702 30 51to 1702 30 99, 1702 40 90, 1702 90 50 and 2106 90 55 or milk products45
except preparations and feedingstuffs containing 50% or more by weight of milk products

2309 10 11
2309 10 13
2309 10 31
2309 10 33
2309 10 51
2309 10 53

ex 2309 90

— Other:

— — Other, including premixes:

— — — Other, containing starch, glucose, glucose syrup, maltodextrine or maltodextrine syrup
falling within subheadings 1702 30 51 to 1702 30 99, 1702 40 90, 1702 90 50 and 2106 90 55 or
milk products12 except preparations and feeding-stuffs containing 50% or more by weight of milk
products

2309 90 31
2309 90 33
2309 90 41
2309 90 43
2309 90 51
2309 90 53

45

For the purposes of this subheading «milk products» means products falling within heading Nos 0401 to
0406 as well as subheadings 1702 11, 1702 19 and 2106 90 51.

89

                                                
CN code

ex 0403

ANNEX II

Description

Buttermilk, curdled milk and cream, whether or not concentrated or containing added sugar or other
sweetening matter or flavoured or containing added fruit, nuts or cocoa:

0403 10

– Yoghurt:

0403 10 51 to
0403 10 99

0403 90
0403 90 71 to
0403 90 99

– – Flavoured or containing added fruit, nuts or cocoa

– Other:
– – Flavoured or containing added fruit, nuts or cocoa

ex 0710

Vegetables (uncooked or cooked by steaming or boiling in water), frozen:

0710 40 00

– Sweet corn

ex 0711

Vegetables provisionally preserved (for example, by sulphur dioxide gas, in brine, in sulphur water
or in other preservative solutions), but unsuitable in that state for immediate consumption:

0711 90 30

– Sweet corn

ex 1704

1806

ex 1901

1901 10 00

1901 20 00

1901 90

1901 90 11 to
1901 90 19

1901 90 99

ex 1902

Sugar confectionery (including white chocolate), not containing cocoa, except liquorice extract of
subheading 1704 90 10

Chocolate and other food preparations containing cocoa

Malt extract; food preparations of flour, meal, starch or malt extract, not containing cocoa or
containing less than 40% by weight of cocoa calculated on a totally defatted basis, not elsewhere
specified or included; food preparations of goods of headings Nos 0401 to 0404, not containing
cocoa or containing less than 5% by weight of cocoa calculated on a totally defatted basis, not
elsewhere specified or included:

– Preparations for infant use, put up for retail sale

– Mixes and doughs for the preparation of bakers' wares of heading No 1905

– Other:

– – Malt extract

– – Other:

– – – Other

Pasta, whether or not cooked or stuffed (with meat or other substances) or otherwise prepared, such
as spaghetti, macaroni, noodles, lasagne, gnocchi, ravioli, cannelloni; couscous, whether or not
prepared:

– Uncooked pasta, not stuffed or otherwise prepared:

1902 11 00

– – Containing eggs

1902 19

ex 1902 20

1902 20 91

1902 20 99

1902 30

1902 40

1903 00 00

1904

1905

– – Other

– Stuffed pasta (whether or not cooked or otherwise prepared):

– – Other:

– – – Cooked

– – – Other

– Other pasta

– Couscous

Tapioca and substitutes therefor prepared from starch, in the form of flakes, grains, pearls, siftings
or similar forms

Prepared foods obtained by the swelling or roasting of cereals or cereal products (for example, corn
flakes); cereals (other than maize(corn)) in grain form, pre-cooked or otherwise prepared

Bread, pastry, cakes, biscuits and other bakers' wares, whether or not containing cocoa; communion
wafers, empty cachets of a kind suitable for pharmaceutical use, sealing wafers, rice paper and
similar products

90

ex 2001

Vegetables, fruit, nuts and other edible parts of plants, prepared or preserved by vinegar or acetic
acid:

2001 90 30

2001 90 40

ex 2004

– Other:

– – Sweet corn (Zea mays var. saccharata)

– – Yams, sweet potatoes and similar edible parts of plants containing 5% or more by weight of
starch

Other vegetables prepared or preserved otherwise than by vinegar or acetic acid, frozen, other than
products of heading No 2006:

– Potatoes:

– – Other:

2004 10 91

– – – In the form of flour, meal or flakes

– Other vegetables and mixtures of vegetables:

2004 90 10

– – Sweet corn (Zea mays var. saccharata)

ex 2005

Other vegetables prepared or preserved otherwise than by vinegar or acetic acid, not frozen, other
than products of heading No 2006:

2005 20 10

2005 80 00

ex 2008

2008 99 85

2008 99 91

ex 2101

– Potatoes:

– – In the form of flour, meal or flakes

– Sweet corn (Zea mays var. saccharata)

Fruit, nuts and other edible parts of plants, otherwise prepared or preserved, whether or not
containing added sugar or other sweetening matter or spirit, not elsewhere specified or included:

– Other, including mixtures other than those of subheading 2008 19:

– – Other:

– – – Not containing added spirit:

– – – – Not containing added sugar:

– – – – – Maize (corn), other than sweet corn (Zea mays var. saccharata)

– – – – – Yams, sweet potatoes and similar edible parts of plants, containing 5% or more by weight
of starch

Extracts, essences and concentrates of coffee, tea or maté and preparations with a basis of these
products or with a basis of coffee, tea or maté; roasted chicory and other roasted coffee substitutes,
and extracts, essences and concentrates thereof:

– – Preparations with a basis of these extracts, essences or concentrates or with a basis of coffee:

2101 12 98

– – – Other

2101 20

– Extracts, essences and concentrates, of tea or maté, and preparations with a basis of these extracts,
essences or concentrates, or with a basis of tea or maté:

2101 20 98

– – – Other

2101 30

– Roasted chicory and other roasted coffee substitutes, and extracts, essences and concentrates
thereof:

– – Roasted chicory and other roasted coffee substitutes:

2101 30 19

– – – Other

– – Extracts, essences and concentrates of roasted chicory and other roasted coffee substitutes:

2101 30 99

– – – Other

ex 2102

Yeasts (active or inactive); other single-cell micro-organisms, dead (but not including vaccines of
heading No 3002); prepared baking powders:

– Active yeasts

– – Bakers' yeast

2102 10 31 and
2102 10 39

2105 00

Ice cream and other edible ice, whether or not containing cocoa

ex 2106

Food preparations not elsewhere specified or included:

– Other:

2106 90 10

– – Cheese fondues

– – Other:

91

2106 90 92

– – – Containing no milk fats, sucrose, isoglucose, glucose or starch or containing, by weight, less
than 1,5% milk fat, 5% sucrose or isoglucose, 5% glucose or starch

2106 90 98

– – – Other

2202

2205

ex 2208

Waters, including mineral waters and aerated water, containing added sugar or other sweetening
matter or flavoured, and other non-alcoholic beverages, not including fruit or vegetable juices of
heading No 2009

Vermouth and other wine or fresh grapes flavoured with plants or aromatic substances

Undenatured ethyl alcohol of an alcoholic strength by volume of less than 80% vol; spirits, liqueurs
and other spirituous beverages:

2208 30 32 to
2208 30 88

2208 50

2208 60

2208 70

– Whiskies:

– – Other than Bourbon whiskey

– Gin and Geneva

– Vodka

– Liqueurs and cordials

– Other:

– – Other spirits and other spirituous beverages, in containers holding:

– – – 2 litres or less:

2208 90 41

– – – – Ouzo

– – – – Other:

2208 90 52

2208 90 54

2208 90 56

2208 90 69

2208 90 75

2208 90 77

2208 90 78

2905 43 00

2905 44

ex 3302

– – – – – Spirits (excluding liqueurs):

– – – – – – Other:

– – – – – – – Korn

– – – – – – – Tequila

– – – – – – – Other

– – – – – Other spirituous beverages

– – – More than 2 litres:

– – – – Spirits (excluding liqueurs):

– – – – – Tequila

– – – – – Other

– – – – Other spirituous beverages

Mannitol

D-glucitol (sorbitol)

Mixtures of odoriferous substances and mixtures (including alcoholic solutions) with a basis of one
or more of these substances, of a kind used as raw materials in industry; other preparations based on
odoriferous substances, of a kind used for the manufacture of beverages:

– Of a kind used in the food or drink industries:

– – Of a kind used in the drink industries:

– – – Preparations containing all flavouring agents characterising a beverage:
– – – – Other (of an actual alcoholic strength by volume not exceeding 0,5%):

3302 10 29

– – – – – Other

ex Chapter 35

Albuminoidal substances; modified starches, glues; enzymes:

3505

ex 3809

Dextrins and other modified starches (for example, pregelatinised or esterified starchs); glues based
on starches, or on dextrins or other modified starches

Finishing agents, dye carriers to accelerate dyeing or fixing of dyestuffs and other products and
preparations (for example, dressings and mordants), of a kind used in the textile, paper, leather or
like industries, not elsewhere specified or included:

3809 10

3824 60

– With a basis of amylaceous substances

Sorbitol other than that of subheading 2905 44

92

ANNEX III as referred to in Article 29 (I)

CORRELATION TABLE

Regulation (EEC) No 1766/92

This Regulation

Article 1(1)

Article 1(2)

Article 2

-

Article 3(1)

Article 3(2)

Article 3(3)

Article 3(4)

Article 4(1)

Article 1

-

Article 2

Article 3

Article 4(1)

-

Article 4(2)

Article 4(3)

Article 5(1)

Article 4(2), first subparagraph, first indent

Article 5(2), first subparagraph (a)

Article 4(2), first subparagraph, second indent

Article 5(2), first subparagraph (b)

Article 4(2), first subparagraph, third indent

Article 5(2), first subparagraph (c)

Article 4(2), second subparagraph

Article 5(2), second subparagraph

Article 4(3)

Article 5, first indent

Article 5, second indent

Article 5, third indent

Article 5, fourth indent

Article 5, fifth indent

Article 6

Article 7

Article 8

Article 9

Article 10

Article 11

Article 12(1)

Article 5(3)

Article 6(a)

Article 6(b)

Article 6(c)

Article 6(d)

Article 6(e)

Article 7

-

-

Article 8

Article 9

Article 10

Article 11(1)

Article 12(2), first subparagraph, first indent

Article 11(2), first subparagraph (a)

Article 12(2), first subparagraph, second indent

Article 11(2), first subparagraph (b)

Article 12(2), first subparagraph, third indent

Article 11(2), first subparagraph (c)

Article 12(2), second and third subparagraph

Article 12(2), second subparagraph

Article 12(3) and (4)

Article 13(1), (2) and (3)

Article 13(4), (5), (6) and (7)

Article 13(8), first subparagraph

Article 11(3) and (4)

Article 12(1), (2) and (3)

Article 13(1), (2), (3) and (4)

-

Article 13(8), second and third subparagraph

Article 14

Article 13(8), forth subparagraph

Article 13(9)

Article 13(10)

Article 13(11)

-

Article 15

Article 16

Article 17

Article 14(1), first indent

Article 18(1)(a)

93

Article 14(1), second indent

Article 14(2) and (3)

Article 15(1)

Article 15(2), first indent

Article 15(2), second indent

Article 16

Article 17(1), first subparagraph

Article 17(1), second subparagraph

Article 17(2), (3) and (4)

Article 18

Article 19

Article 20

Article 21, first sentence

Article 21, second sentence

Article 22

Article 23

Article 24

-

-

Article 25

Article 26(1)

Article 26(2)

Article 26(3)

Article 27

Annex A

Annex B

Annex C

Article 18(1)(b)

Article 18 (2) and (3)

Article 19(1)

Article 192)(a)

Article 19(2)(b)

Article 20

Article 21(1)

-

Article 21(2), (3) and (4)

-

Article 22

-

Article 23(1)

Article 23(2)

-

Article 24

Article 25

Article 26

Article 27

Article 28

Article 29(1)

-

Article 29(2)

Article 30

Annex I

Annex II

Annex III

94

2003/0009 (CNS)

Proposal for a

COUNCIL REGULATION

on the common organisation of the market in rice

THE COUNCIL OF THE EUROPEAN UNION,

Having  regard  to  the  Treaty  establishing  the  European  Community,  and  in  particular
Articles 36 and the third subparagraph of 37(2) thereof,

Having regard to the proposal from the Commission46,

Having regard to the opinion of the European Parliament47,

Having regard to the opinion of the European Economic and Social Committee48,

Having regard to the opinion of the Committee of the regions49,

Whereas:

(1) 

(2) 

(3) 

The operation and development of the common market for agricultural products must
be accompanied by  the  establishment of  a  common  agricultural  policy  to  include,  in
particular,  a  common  organisation  of  agricultural  markets  which  may  take  various
forms depending on the product.

Council  Regulation  (EC)  No  3072/95  of  22  December  1995  on  the  common
organisation of the market in rice has been substantially amended several times. Since
further amendments are to be made, in the interests of clarity that Regulation should
be replaced. Regulation (EC) No 3072/95 should accordingly be repealed.

The European rice market is in serious unbalance. The volume of rice stored in public
intervention is very large, equivalent to about a quarter of Community output, and is
likely  to  increase  in  the  long  run.  The  imbalance  is  caused  by  increases  in  both
domestic  output  and  imports  and  by  the  restrictions  on  exports  with  refunds  in
accordance  with  the  Agriculture  Agreement.  The  present  imbalance  is  to  be
exacerbated even further and probably to reach an unsustainable level, in the course of
the  years  to  come  as  a  result  of  increasing  imports  from  third  countries  due  to  the
implementation of the EBA Agreement.

(4) 

This problem must be solved by revising the common market organisation for rice, in
such  a  way  as  to  take  control  of  output,  improve  the  equilibrium  and  fluidity  of  the

46

47

48

49

OJ C ..., …, p. ...
OJ C ..., …, p. ...
OJ C ..., …, p. ...
OJ C ..., …, p. ...

95

                                                
(5) 

(6) 

(7) 

(8) 

(9) 

market and enhance the competitiveness of Community agriculture, while pursuing the
other aims of Article 33 of the Treaty, including maintaining suitable income support
for producers.

It appears that the most suitable solution is to discontinue the existing arrangements, to
create  a  private  storage  mechanism  and  a  safety  net  mechanism  to  deal  adequately
with price situations, to create, as a compensation an income payment per farm and a
crop specific aid reflecting the role of rice production in traditional production areas.
The latter two instruments are incorporated in Council Regulation (EC) No [...]/2003
of [...] 2003 on [...]50.

The  establishment  of  an  effective  support  price  is  necessary  in  order  to  stabilise  the
rice  market.  A  system  of  private  storage  is  a  suitable  and  flexible  way  to  deal  with
price fluctuations and serves therefore as an instrument to overcome such problems.

A  safety  mechanism  is,  however,  required  for  cases  where  the  instrument  of  private
storage fails to underpin sufficiently the effective support price.

The  useful  utilisation  of  private  storage  and  the  safety  mechanism  require  the
periodical transmission of information by the Member States to the Commission.

The  creation  of  a  single  Community  market  for  rice  involves  the  introduction  of  a
trading  system  at  the  external  frontiers  of  the  Community.  A  trading  system
complementing  the  private  storage  system  and  including  import  duties  applying  the
rates of the Common Customs Tariff and export refunds should, in principle, stabilise
the  Community  market.  The  trading  system  should  be  based  on  the  undertakings
accepted under the Uruguay Round of multilateral trade negotiations.

(10) 

In order to monitor the volume of trade in rice with third countries, provision should
be  made  for  an  import  and  export  licence  scheme  with  the  lodging  of  a  security  to
ensure that the transactions for which such licences are requested are effected.

(11)  For  the  most  part,  the  customs  duties  applicable  to  agricultural  products  under  the
World Trade Organisation (WTO) agreements are laid down in the common customs
tariff.  However,  for  some  rice  products,  the  introduction  of  additional  mechanisms
makes it necessary to adopt derogations.

(12) 

In  order  to  prevent  or  counteract  adverse  effects  on  the  Community  market  which
could result from imports of certain  agricultural products,  imports of  one or more of
such  products  should  be  subject  to  payment  of  an  additional  import  duty,  if  certain
conditions are fulfilled.

(13) 

It is appropriate, under certain conditions, to confer on the Commission the power to
open and administer tariff quotas resulting from international agreements concluded in
accordance with the Treaty or from other acts of the Council.

(14)  Provisions for granting a refund on exports to third countries, based on the difference
between prices within the Community and on the world market, and falling within the
limits  set  by  the  WTO  Agreement  on  agriculture51,  should  serve  to  safeguard

50

51

See p. ... of this Official Journal.
OJ L 336, 23.12.1994, p. 22.

96

                                                
Community participation in international trade in rice. Such export refunds should be
subject to limits in terms of quantity and value.

(15)  Compliance  with  the  limits  in  terms  of  value  should  be  ensured  at  the  time  when
export refunds are fixed through the monitoring of payments under the rules relating to
the  European  Agricultural  Guidance  and  Guarantee  Fund.  Monitoring  can  be
facilitated  by  the  compulsory  advance  fixing  of  export  refunds,  while  allowing  the
possibility,  in  the  case  of  differentiated  export  refunds,  of  changing  the  specified
destination within a geographical area to which a single export refund rate applies. In
the  case  of  a  change  of  destination,  the  export  refund  applicable  to  the  actual
destination should be paid, with a ceiling of the amount applicable to the destination
fixed in advance.

(16)  Ensuring compliance with the quantity limits requires the introduction of a reliable and
effective system of monitoring. To that end, the granting of export refunds should be
made subject to an export licence. Export refunds should be  granted up to the  limits
available, depending on the particular situation of each product concerned. Exceptions
to  that  rule  can  only  be  permitted  in  the  case  of  processed  products  not  listed  in
Annex I to the Treaty, to which volume limits do not apply, and in the case of food-aid
operations  which  are  exempt  from  any  limitation.  Provision  should  be  made  for
derogating  from  strict  compliance  with  management  rules  where  exports  benefiting
from export refunds are not likely to exceed the quantity ceilings laid down.

(17)  To  the  extent  necessary  for  its  proper  working,  provision  should  be  made  for
regulating  or,  when  the  situation  on  the  market  so  requires,  prohibiting  the  use  of
inward and outward processing arrangements.

(18)  The  customs  duty  system  makes  it  possible  to  dispense  with  all  other  protective
measures  at  the  external  frontiers  of  the  Community.  The  internal  market  and  duty
mechanism  could,  in  exceptional  circumstances,  prove  deficient.  In  such  cases,  in
order  not  to  leave  the  Community  market  without  defence  against  disturbances  that
might  ensue,  the  Community  should  be  able  to  take  all  necessary  measures  without
delay.  All  such  measures  should  comply  with  the  obligations  arising  from  the  WTO
agreements.

(19)  Taking into account the influence of the world market price on the internal price, there
should  be  provision  for  appropriate  measures  to  be  taken  in  order  to  stabilise  the
internal market.

(20)  The proper working of a single market based on common prices would be jeopardised
by the granting of national aid. Therefore, the provisions of the Treaty governing State
aid should apply to the products covered by this common market organisation.

(21)  As the common market in rice is in continuous development, the Member States and
the  Commission  should  keep  each  other  supplied  with  information  relevant  to  these
developments.

97

(22)  The measures necessary for the implementation of this Regulation should be adopted
in accordance with Council Decision 1999/468/EC of 28  June 1999  laying  down the
procedures for the exercise of implementing powers conferred on the Commission52.

(23) 

In  view  of  the  necessity  to  solve  practical  and  specific  problems,  the  Commission
should be authorised to adopt necessary measures in cases of emergency.

(24)  Expenditure incurred by the Member States as a result of the obligations arising from
the application of this Regulation should be financed by the Community in accordance
with Council Regulation (EC) No 1258/1999 of 17 May 1999 on the financing of the
common agricultural policy53.

(25)  The  common  organisation  of  the  market  in  the  rice  sector  should  take  proper  and

simultaneous account of the objectives set out in Articles 33 and 131 of the Treaty.

(26)  The  change  from  the  arrangements  under  Council  Regulations  (EC)  No  3072/95  of
22 December  1995  on  the  common  organisation  of  the  market  in  rice  and  (EC)
No 3073/95 of 22 December 1995 determining the standard quality of rice54 to those
provided for in this Regulation could give rise to difficulties, which are not dealt with
in this Regulation. In order to  deal  with  such difficulties,  the Commission  should be
enabled to adopt transitional measures.

(27) 

In order to prevent a serious disturbance of the market in paddy rice in the last months
of  the marketing  year  2003/04,  it  is  necessary  to  limit  the  intake  by  the  intervention
agencies to a certain quantity fixed in advance.

(28)  Provision should be made for the application of the new common market organisation.
However, in order to prepare for the operation of the arrangements for private storage
and for the safety mechanism, the obligation to communicate information on regional
market prices to the Commission should apply from an earlier stage,

HAS ADOPTED THIS REGULATION:

52

53

54

OJ L 184, 17.7.1999, p. 23.
OJ L 160, 26.6.1999, p. 103.
OJ L 329, 30.12.1995, p. 33.

98

                                                
CHAPTER I
INTRODUCTIVE PROVISIONS

Article 1

The  common  organisation  of  the  market  in  rice  shall  comprise  a  scheme  for  an  internal

market and trade with third countries, and cover the following products:

CN Code

Description

(a)

1006 10 21 to 1006 10 98

Rice in the husk (paddy or rough)

1006 20

1006 30

(b)

1006 40 00

(c)

1102 30 00

1103 19 50

1103 20 50

1104 19 91

1104 19 99

1108 19 10

Husked (brown) rice

Semi-milled  or  wholly  milled  rice,  whether  or  not  polished  or
glazed

Broken rice

Rice flour

Rice groats and meal

Pellets of rice

Flaked grains of rice

Rolled grains of rice

Rice starch

Article 2

1.

2.

For the purposes of this Regulation, the terms 'paddy rice', 'husked rice', 'semi-milled
rice', 'wholly milled rice', 'round grain rice', 'medium grain rice', 'long grain rice' and
'broken rice' are defined in Annex I.

Annex  II  provides  definitions  of  grains  and  broken  grains  which  are  not  of
unimpaired quality.

The  Commission,  acting  in  accordance  with  the  procedure  referred  to  in  Article
25(2):

(a)

shall  fix  the  conversion  rates  for  rice  at  various  states  of  processing,  the
processing costs and the value of by-products;

(b) may change the definitions referred to in paragraph 1.

The marketing year for the products listed in Article 1 shall begin on 1 September and end on
31 August of the following year.

Article 3

99

Article 4

This  Regulation  shall  apply  without  prejudice  to  the  measures  provided  for  by  Council
Regulation  (EC)  No.../2003  of...  2003  ...,  [establishing  common  rules  for  direct  support
schemes under the common agricultural policy and support schemes for producers of certain
crops.]

CHAPTER II
INTERNAL MARKET

Article 5

1.

2.

3.

1.

2.

3.

A  subsidy  may  be  fixed  for  consignments  to  the  French  overseas  department  of
Réunion,  which  are  intended  for  consumption  there,  of  products  falling  within
CN code  1006  (excluding  code  1006 10 10)  which  come  from  the  Member  States
and are in one of the situations referred to in Article 23(2) of the Treaty.

That  subsidy  shall  be  fixed,  taking  into  account  the  supply  requirements  of  the
Réunion market, on the basis of the difference between the quotations or prices of the
relevant products on the world market and the quotations or prices of those products
on the Community market, and, if necessary, the price of those products delivered to
Réunion.

The  amount  of  the  subsidy  shall  be  fixed  periodically.  However,  where  the  need
arises, the Commission may, in the interval, at the request of a Member State or on
its own initiative, alter the amount.

The amount of the subsidy may be fixed by a tendering procedure.

The  Commission  shall  adopt  detailed  rules  for  the  application  of  this  Article  in
accordance with the procedure referred to in Article 25(2).

The  amount  of  the  subsidy  shall  be  fixed  according  to  procedure  referred  to  in
Article 25(2).

Article 6

The effective support price for paddy rice in the Community shall be EUR 150/t.

In order to stabilise the market price for paddy rice in a region of the Community, the
Commission  shall,  in  accordance  with  the  procedure  referred  to  in  Article  25(2),
authorise  the  Member  State  concerned  to  conclude  private  storage  contracts,  if  the
average market price in that region is for a consecutive period of two weeks less than
the  support  price  and  is,  without  support  measures,  likely  to  remain  less  than  the
support price.

Paddy rice harvested in the Community shall be eligible for private storage. The aid
for  private  storage  shall  be  fixed  in  accordance  with  the  procedure  referred  to  in
Article  25(2).  The  amount  of  the  aid  as  well  as  the  eligible  quantities  may  be
determined on the basis of tenders.

100

4.

1.

2.

3.

4.

5.

6.

7.

Detailed rules for the application of this Article shall be adopted in accordance with
the procedure referred to in Article 25(2).

Article 7

A  special  measure  shall  apply  where  the  average  market  price  for  paddy  rice  in  a
region of the Community for a consecutive period of two weeks shall be lower than
EUR 120/t and is likely to remain less than that price.

Agencies designated by the Member States shall buy in the paddy rice harvested in
the  Community  which  is  offered  to  them,  provided  that  the  offers  comply  with
conditions established in accordance with the procedure referred to in Article 25(2),
in particular in respect of quantity and quality.

The buying-in prices  and  the  eligible  quantities  may  be  determined  on  the  basis  of
tenders. If the quality of the paddy rice offered is lower than the standard quality for
which the buying-in price has been fixed, the latter price shall be reduced.

The standard quality of paddy rice shall be defined in Annex III.

In accordance with the procedure referred to in Article 25(2), the Commission shall
decide on the opening and the closing of the measure referred to in paragraph 1.  In
particular, it shall decide to close the measure if the market price for paddy rice in the
region  concerned  is  for  a  period  of  at  least  one  week  in  excess  of  a  price  level  of
EUR 120/t.

Under  conditions  to  be  determined  in  accordance  with  the  procedure  referred  to  in
Article 25(2), the paddy rice bought-in under the measure referred to in paragraph 1
shall  be  offered  for  sale,  for  export  to  third  countries  or  for  supply  to  the  internal
market.

Detailed rules for the application of this Article shall be adopted in accordance with
the procedure referred to in Article 25(2).

Article 8

The  Member  States  shall  communicate  to  the  Commission  on  a  periodical  basis  the
information necessary for the application of Articles 6 and 7.

The Member States shall provide the Commission, with detailed information, broken down by
variety, on the areas given over to rice, on output, on yields and on stocks held by producers
and  processors.  Such  information  shall  be  based  on  a  system  providing  for  compulsory
declarations by producers and processors set up, administered and monitored by the Member
State.

Detailed rules for the application of this Article and in particular a system of communication
of prices shall be adopted in accordance with the procedure referred to in Article 25(2).

101

CHAPTER III
TRADE WITH THIRD COUNTRIES

Article 9

1.

Imports into the Community, or  exports  therefrom,  of  any  of  the  products  listed  in
Article 1 shall be subject to presentation of an import or export licence.

2.

1.

2.

Licences  shall be issued  by the Member States  to  any  applicant, irrespective  of  his
place  of  establishment  in  the  Community  and  without  prejudice  to  measures  taken
for the application of Articles 12 to 15.

Import and export licences shall be valid throughout the Community. Such licences
shall be issued subject to the lodging of a security guaranteeing that the products are
imported  or  exported  during  the  term  of  validity  of  the  licence.  Except  in  cases  of
force majeure, the security shall be forfeited in whole or in part if import or export is
not carried out, or is carried out only partially, within that period.

The  term  of  validity  of  licences  and  other  detailed  rules  for  the  application  of  this
Article shall be adopted in accordance with the procedure referred to in Article 25(2).

Section I
Provisions applicable to imports

Article 10

Unless this Regulation provides otherwise, the import duty on the products listed in
Article 1 shall be that set out in the Common Customs Tariff.

Notwithstanding paragraph 1, the import duty on

(a)

husked rice falling within code 1006 20 shall be equal to the effective support
price, increased by:

(i)

(ii)

80%  in  the  case  of  husked  rice  falling  within  CN code  1006 20 17  and
1006 20 98;

88%  in  the  case  of  husked  rice  falling  within  CN codes  other  than
1006 20 17 or 1006 20 98, minus the import price; and

(b) milled  rice  falling  within  CN  code  1006 30  shall  be  equal  to  the  effective
support price, plus a percentage to be calculated and minus the import price.

However,  the  import  duty  calculated  in  accordance  with  this  paragraph  shall  not
exceed the rate of duty in the Common Customs Tariff.

The  percentage  referred  to  in  point  (b)  shall  be  calculated  by  adjusting  the
appropriate  percentage  referred  to  in  point  (a)  by  reference  to  the  conversion  rate,
processing costs  and  the  value  of  by-products,  and  subsequently  adding  an  amount
for the protection of the industry.

102

3.

4.

1.

2.

3.

1.

2

Notwithstanding  paragraph  1,  no  customs  duty  shall  be  levied  on  imports  into  the
French  overseas  department  of  Reunion,  intended  for  consumption  there  products
falling within CN code 1006 10, 1006 20 and 1006 40 00;

Detailed rules for the application of this Article shall be adopted in accordance with
the procedure referred to in Article 25(2).

Article 11

Without prejudice to Article 10(2), in order to prevent or counteract adverse effects
on the market in the Community which may result from imports of certain products
listed in Article 1, imports of one  or more of  such  products at the  rate of duty laid
down in Article 10 shall be subject to the payment of an additional import duty if the
conditions  to  be  determined  by  the  Commission  pursuant  to  paragraph  3,  are
fulfilled, unless the imports are unlikely to disturb the Community market, or where
the effects would be disproportionate to the intended objective.

Imports  made  at  a  price  below  the  level  notified  by  the  Community  to  the  World
Trade Organisation (‘the trigger price’) may be subject to an additional import duty.

If  the  volume  of  imports  in  any  year  in  which  the  adverse  effects  referred  to  in
paragraph  1  arise  or  are  likely  to  arise  exceeds  a  level  based  on  market  access
opportunities  defined  as  imports  as  a  percentage  of  the  corresponding  domestic
consumption  during  the  three  previous  years  (‘the  trigger  volume’),  an  additional
import duty may be imposed.

The import  prices  to  be  taken  into  consideration  for  imposing  an  additional  import
duty  pursuant  to  the  first  subparagraph  of  paragraph  2,  shall  be  determined  on  the
basis of the cif import prices of the consignment under consideration.

Cif import prices shall be checked to that end against the representative prices for the
product on the world market or on the Community import market for that product.

Detailed rules for the application of this Article shall be adopted in accordance with
the  procedure  referred  to  in  Article  25(2).  Such  detailed  rules  shall  specify  in
particular the products to which additional import duties may be applied.

Article 12

Tariff quotas for imports of the products listed in Article 1 resulting from agreements
concluded in accordance with Article 300 of the Treaty or from any other act of the
Council  shall  be  opened  and  administered  by  the  Commission  under  detailed  rules
adopted in accordance with the procedure referred to in Article 25(2).

Tariff q quotas shall, be administered by applying one of the following methods or a
combination of them:

(a)

a  method  based  on  the  chronological  order  of  the  lodgement  of  applications
(“first come, first served principle”),

103

3.

4.

1.

(b)

(c)

a  method  of  distribution  in  proportion  to  the  quantities  requested  when  the
applications were lodged (using the “simultaneous examination method”),

a  method  based  on  taking  traditional  trade  patterns  into  account  (using  the
“traditional/new arrival method”).

Other  appropriate  methods  may  be  adopted.  They  must  avoid  any  unjustified
discrimination between the operators concerned.

The method of administration adopted shall,  where appropriate,  give due  weight  to
the  supply  requirements  of  the  Community  market  and  the  need  to  safeguard  the
equilibrium of that market.

The detailed rules referred to in paragraph 1 shall provide for the annual tariff quotas,
if necessary suitably phased over the year, shall determine the administrative method
to be used and, where appropriate, shall include:

(a)

guarantees covering the nature, provenance and origin of the product,

(b)

(c)

recognition  of  the  document  used  for  verifying  the  guarantees  referred  to  in
point (a),

the  conditions  under  which  import  licences  shall  be  issued  and  their  term  of
validity.

Section II
Provisions applicable to exports

Article 13

To the extent necessary to enable the following products to be exported on the basis
of quotations or prices for those products on the world market and within the limits
resulting  from agreements  concluded  in accordance  with  Article  300  of  the  Treaty,
the difference between those quotations or prices and prices in the Community may
be covered by export refunds:

(a)

the products listed in Article 1 to be exported without further processing;

(b)

the  products  listed  in  Article  1  to  be  exported  in  the  form  of  goods  listed  in
Annex IV.

Export refunds on the products referred to in point (b) may not be higher than those
applicable to such products exported without further processing.

2.

The method to be adopted for the allocation of the quantities which may be exported
with a refund shall be the method which:

(a)

is most  suited  to  the  nature  of  the  product  and  the  situation  on  the  market  in
question,  allowing  the  most  efficient  possible  use  of  the  resources  available,
account  being  taken  of  the  efficiency  and  structure  of  Community  exports
without creating discrimination between large and small operators;

104

(b)

is  least  cumbersome  administratively  for  operators,  account  being  taken  of
administration requirements;

(c)

precludes discrimination between the operators concerned.

3.

Export  refunds  shall  be  the  same  for  the  whole  Community.  They  may  vary
according  to  destination,  where  the  world  market  situation  or  the  specific
requirements  of  certain  markets  make  this  necessary.  Refunds  shall  be  fixed  in
accordance with the procedure referred to in Article 25(2). Refunds may be fixed:

(a)

at regular intervals;

(b)

by invitation to tender for products in respect of which provision was made for
that procedure in the past.

Export  refunds  fixed  at  regular  intervals,  may,  if  necessary,  be  amended  in  the
interval  by  the  Commission  at  the  request  of  either  a  Member  State  or  on  its  own
initiative.

4.

The following shall be taken into account when refunds are being fixed:

(a)

the existing situation and future trends with regard to:

(i)

prices and availability of rice and broken rice on the Community market,

(ii)

prices of rice and broken rice on the world market;

(b)

(c)

the aims of the common organisation of the market in rice, which are to ensure
equilibrium and the natural development of prices and trade on this market;

limits resulting from agreements concluded in accordance with Article 300 of
the Treaty;

(d)

the importance of avoiding disturbances on the Community market;

(e)

the economic aspects of the proposed exports;

(f)

the  most  favourable  prices  in  third  countries  of  destination  for  third-country
imports, as far as products listed in Article 1(1)(a) and (b) are concerned.

Article 14

1.

2.

Export  refunds  on  products  listed  in  Article  1  exported  without  further  processing
shall only be granted on application and on presentation of an export licence.

The  refund  applicable  to  products  listed  in  Article  1  exported  without  further
processing shall be that applicable on the day of application for  the  licence  and,  in
the case of a differentiated refund, that applicable on the same day:

(a)

for the destination indicated on the licence

or, where appropriate,

105

3.

4.

1. 

2. 

1.

(b)

for  the  actual  destination  if  it  differs  from  the  destination  indicated  on  the
licence.  In  that  case  the  amount  applicable  may  not  exceed  the  amount
applicable to the destination indicated on the licence.

Appropriate measures may be taken to prevent any abuse of the flexibility provided
for in this paragraph.

The  scope  of  paragraphs  1  and  2  may  be  extended  to  apply  to  products  listed  in
Article 1  that  are  exported  in  the  form  of  goods  listed  in  Annex IV  in  accordance
with 
in  Article 16  of  Council  Regulation  (EC)
No 3448/9355. Detailed implementing rules shall be adopted in accordance with that
procedure.

the  procedure 

laid  down 

Derogations  from  paragraphs  1  and  2  may  be  granted  in  the  case  of  products  on
which  export  refunds  are  paid  under  food-aid  operations,  in  accordance  with  the
procedure referred to in Article 25(2).

Article 15

A corrective amount applicable to the export refunds may be set in accordance with
the  procedure  referred  to  in  Article  25(2).  However,  where  necessary,  the
Commission may, amend the corrective amounts.

The  first  subparagraph  may  be  applied  to  products  listed  in  Article  1  that  are
exported in the form of goods listed in Annex IV.

Article 16

The  refund  on  the  products  referred  to  in  Articles  1(a)  and  (b)  shall  be  paid  upon
submission of proof that:

(a)

the  products  were  wholly  obtained  in  the  Community  within  the  meaning  of
Article  23  of  Council  Regulation  (EEC)  No  2913/9256,  except  where
paragraph 6 applies;

(b)

the products have been exported from the Community;

(c)

in the case of a differentiated refund, have reached the destination indicated on
the  licence  or  another  destination  for  which  a  refund  was  fixed,  without
prejudice to point (b) of paragraph 2. However, exceptions may be made to this
rule in accordance with the procedure referred to in Article 25(2), provided that
conditions are laid down which offer equivalent guarantees.

Additional provisions may be adopted in accordance with the  procedure referred to
in Article 25(2).

55

56

OJ L  318,  20.12.1993, p.  18.  Regulation  last  amended  by  Regulation  (EC)  No  2580/2000  (OJ L 298,
25.11.2000, p. 15).
OJ L 302, 19.10.1992, p. 1.

106

                                                
2.

No  export  refund  shall  be  granted  on  rice  imported  from  third  countries  and  re-
exported to third countries, unless the exporter submits proof that:

(a)

the product to be exported and the product previously imported are one and the
same; and

(b)

the duties was collected when the goods were released for free circulation.

In  such  cases  the  refund  on  each  product  shall  be  equal  to  the  duties  collected  on
importation  where  those  duties  are  lower  than  the  refund  applicable.  Where  the
duties  collected  on  importation  are  higher  than  the  refund  applicable,  those  duties
shall apply.

Article 17

Observance of the volume limits resulting from the agreements concluded in accordance with
Article 300 of the  Treaty shall  be  ensured on the basis  of the export licences  issued  for  the
reference  periods  provided  for  which  apply  to  the  products  concerned.  With  regard  to
compliance  with  the  obligations  arising  under  the  WTO  Agreement  on  Agriculture,  the
ending of a reference period shall not affect the validity of export licences.

Article 18

Detailed rules for the application of this Section, including provisions on the redistribution of
exportable quantities which have not been allocated or utilised, shall be adopted in accordance
with  the  procedure  referred  to  in  Article  25(2).  Such  detailed  rules  may  include  provisions
governing the quality of the products eligible for an export refund.

Annex IV shall be amended in accordance with the procedure referred to in Article 25(2).

Section III
Common provisions

Article 19

1.

2.

To  the  extent  necessary  for  the  proper  working  of  the  common  organisation  of  the
market in rice, the Council, acting on a proposal from the Commission in accordance
with the voting procedure laid down in Article 37(2) of the Treaty may  prohibit  in
whole or in part the use of inward or outward processing arrangements in respect of
products listed in Article 1.

By  way  of  derogation  from  paragraph  1,  if  the  situation  referred  to  in  paragraph 1
arises with exceptional urgency and the Community market is disturbed or is liable to
be  disturbed  by  the  inward  or  outward  processing  arrangements,  the  Commission
shall,  at  the  request  of  a  Member  State  or  on  its  own  initiative,  decide  on  the
necessary  measures  in  accordance  with  the  procedure  referred  to  in  Article  25(2).
The Council and the Member States shall be notified of such measures, which shall
be  valid  for  no  more  than  six  months  and  shall  be  immediately  applicable.  If  the
Commission receives a request from a Member State, it shall take a decision thereon
within a week following receipt of the request.

107

3.

1.

2.

1.

2.

1.

2.

Measures  decided  on  by  the  Commission  may  be  referred  to  the  Council  by  any
Member  State  within  a  week  from  the  date  on  which  they  were  notified.  The
Council,  acting  by  a  qualified  majority,  may  confirm,  amend  or  repeal  the
Commission's decision.

If the Council has not acted within three months from the date on which the decision
was  referred  to  him,  the  Commission's  decision  shall  be  deemed  to  have  been
repealed.

Article 20

The  general  rules  for  the  interpretation  of  the  Combined  Nomenclature  and  the
detailed  rules  for  its  application  shall  apply  to  the  tariff  classification  of  products
covered by this Regulation. The tariff nomenclature resulting from the application of
this Regulation, including the definitions listed in Annex I, shall be incorporated in
the Common Customs Tariff.

Save as otherwise provided for in this Regulation or in provisions adopted pursuant
thereto, the following shall be prohibited in trade with third countries:

(a)

the levying of any charge having equivalent effect to a customs duty;

(b)

the  application  of  any  quantitative  restriction  or  measure  having  equivalent
effect.

Article 21

When the  quotations or  prices on the world market  of one or  more of the  products
listed in Article 1 reaches a level that disrupts or threatens to disrupt the supply of the
Community market and this situation is liable to persist and deteriorate, appropriate
measures may be taken. Such measures may be taken as a safeguard measure in case
of extreme emergency.

Detailed rules for the application of this Article shall be adopted in accordance with
the procedure referred to in Article 25(2).

Article 22

If,  by  reason  of  imports  or  exports,  the  Community  market  in  one  or  more  of  the
products listed in Article 1 is affected by, or is threatened with, serious disturbance
likely  to  jeopardise  the  achievement  of  the  objectives  set  out  in  Article  33  of  the
Treaty, appropriate measures may be applied in trade with non-WTO members until
such disturbance or threat of disturbance has ceased.

If the situation referred to in paragraph 1 arises, the Commission shall, at the request
of a Member State or on its own initiative, decide upon the necessary measures. The
Member  States  shall  be  notified  of  such  measures  which  shall  be  immediately
applicable. If the Commission receives a request from a Member State, it shall take a
decision thereon within three working days following receipt of the request.

108

3.

4.

Measures  decided upon by  the  Commission may  be  referred  to  the  Council  by  any
Member State within three working days of the day on which they were notified. The
Council  shall  meet  without  delay.  It  may,  acting  by  a  qualified  majority,  amend  or
repeal  the  measure  in  question  within  one  month  from  the  date  on  which  it  was
referred to the Council.

Provisions  adopted  under  this  Article  shall  be  applied  having  regard  to  the
obligations arising from agreements concluded in accordance with Article 300(2) of
the Treaty.

CHAPTER IV
GENERAL PROVISIONS

Article 23

Unless this Regulation provides otherwise, Articles 87, 88 and 89 of the Treaty shall apply to
production of and trade in the products listed in Article 1.

1.

2.

1.

2.

Article 24

Member States and the Commission shall send each other any information necessary
for  the  application  of  this  Regulation  and  for  complying  with  the  international
obligations concerning rice.

Detailed  rules  to  determine  which  information  is  necessary  as  well  as  for  its
communication  and  distribution  shall  be  adopted  in  accordance  with  the  procedure
referred to in Article 25(2)

Article 25

The  Commission  shall  be  assisted  by  the  Management  Committee  for  Cereals,
instituted by Article 24 of Regulation (EC) No .../2003 on the common organisation
of the market in cereals, hereinafter referred to as 'the Committee'.

Where  reference  is  made  to  this  paragraph,  Articles  4  and  7  of  Decision
1999/468/EC shall apply.

The period laid down in Article 4(3) of Decision 1999/468/EC shall be one month.

3.

The Committee shall adopt its rules of procedure.

Article 26

The  Committee  may  consider  any  question  referred  to  it  by  its  chairman  either  on  his  own
initiative or at the request of the representative of a Member State.

109

Article 27

Measures  which  are  both  necessary  and  justifiable,  in  an  emergency,  in  order  to  resolve
practical and specific problems shall be adopted in accordance with the procedure referred to
in Article 25(2).

Such measures may derogate from certain parts of this Regulation, but only to the extent that,
and for such a period, as is strictly necessary.

Article 28

Regulation  (EC)  No  1258/1999  and  the  provisions  adopted  in  implementation  thereof  shall
apply to the expenditure incurred by the Member States in carrying out obligations under this
Regulation.

This Regulation shall be so applied that appropriate account is taken at the same time of the
objectives set out in Articles 33 and 131 of the Treaty.

Article 29

CHAPTER V
TRANSITIONAL AND FINAL RULES

Article 30

1.

Regulations (EC) No 3072/95 and (EC) No 3073/95 are repealed.

References  to  the  repealed  Regulations  shall  be  construed  as  references  to  this
Regulation and shall be read in accordance with the correlation table in Annex V.

Transitional measures may be adopted in accordance with the procedure referred to
in Article 25(2).

Article 31

In the period from1 April 2004 to 31 July 2004, the quantities that shall be bought in
by  the  intervention  agencies  pursuant  to  Article  4  of  Regulation  (EC)  No  3072/95
shall be limited to 100 000 tonnes.

The  Commission,  on  the  basis  of  a  balance  sheet  reflecting  the  situation  of  the
market, may amend the quantity referred to in paragraph 1. The procedure referred to
in Article 25(2) shall apply.

Detailed rules for the implementation of this Article shall be adopted in accordance
with the procedure referred to in Article 25(2).

2.

1.

2.

3.

110

1.

2.

Article 32

This  Regulation  shall  enter  into  force  on  the  [seventh]  day  following  that  of  its
publication in the Official Journal of the European Communities.

It shall apply from the 2004/2005 marketing year.

However, Articles 8 and 31 shall apply from 1 April 2004.

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

Done at Brussels,

For the Council
The President

111

ANNEX I

I. DEFINITIONS as referred to in Article 2

1.

(a)

Paddy rice: means rice which has retained its husk after threshing.

(b) Husked rice:  means  paddy  rice  from  which  only  the  husk  has  been  removed.
Examples  of  rice  falling  within  this  definition  are  those  with  the  commercial
descriptions "brown rice", "cargo rice", "loonzain" and "riso sbramato".

(c)

Semi-milled rice: means paddy rice from which the husk, part of the germ and
the  whole  or  part  of  the  outer  layers  of  the  pericarp  but  not  the  inner  layers
have been removed.

(d) Wholly  milled  rice:  means  paddy  rice  from  which  the  husk,  the  whole  of  the
outer and inner layers of the pericarp, the whole of the germ in the case of long
grain or medium grain rice and at least part thereof in the case of round grain
rice have been removed, but in which longitudinal white striations may remain
on not more than 10% of the grains.

2.

(a)

Round grain rice: means rice, the grains of which are of a length not exceeding
5.2 mm and of a length/width ratio of less than 2.

(b) Medium grain rice: means rice, the grains of which are of a length exceeding
5.2 mm but not exceeding 6.0 mm and of a length/width ratio no greater than 3.

(c)

Long grain rice: means

(i)

(ii)

rice, the grains of which are of a length exceeding 6.0 mm and of which
the length/width ratio is greater than 2 but less than 3;

rice, the grains of which are of a length exceeding 6.0 mm and of which
the length/width ratio is equal to or greater than 3.

(d) Measurements  of  the  grains:  means  grain  measurements  are  taken  on  wholly

milled rice by the following method:

(i)

take a sample representative of the batch;

(ii)

sieve  the  sample  so  as  to  retain  only  whole  grains,  including  immature
grains;

(iii) carry  out  two  measurements  of  100  grains  each  and  work  out  the

average;

(iv)

express the result in millimetres, rounded off to one decimal place.

3.

Broken  rice:  means  grain  fragments  the  length  of  which  does  not  exceed  three
quarters of the average length of the whole grain.

112

ANNEX II

DEFINITION OF GRAINS AND BROKEN GRAINS
WHICH ARE NOT OF UNIMPAIRED QUALITY

A.

Whole grains

Grains  from  which  only  part  of  the  end  has  been  removed,  irrespective  of
characteristics produced at each stage of milling.

B

Clipped grains

Grains from which the entire end has been removed.

C.

Broken grains or fragments

Grains  from  which  a  part  of  the  volume  greater  than  the  end  has  been  removed;
broken grains include:

– 

– 

– 

– 

large broken grains (pieces of grain of a length not less than half that of a grain,
but not constituting a complete grain),

medium broken grains (pieces of grain of a length not less than a quarter of the
length of a grain but which are smaller than the minimum size of "large broken
grains"),

fine broken grains (pieces of grain less than a quarter of the size of a grain but
too large to pass through a sieve with a mesh of 1.4 mm),

fragments  (small  pieces  or  particles  of  grain  which  can  pass  through  a  sieve
with a mesh of 1.4 mm); split grains (pieces produced by a longitudinal split in
the grain) come under this definition.

D.

Green grains

Grains which are not fully ripened.

E.

Grains showing natural malformation

Natural  malformation  means  malformation,  whether  or  not  of  hereditary  origin,  as
compared with the morphological characteristics typical of the variety.

F.

Chalky grains

Grains at least three-quarters of the surface of which looks opaque and chalky.

G.

Grains striated with red

Grains  showing  longitudinal  red  striations  of  differing  intensity  and  shades,  due  to
residues from the pericarp.

113

H.

Spotted grains

Grains  showing  a  well-defined  small  circle  of  dark  colour  of  more  or  less  regular
shape;  spotted  grains  also  include  those  which  show  slight  black  striations  on  the
surface only; the striations and spots must not show a yellow or dark aureole.

I.

Stained grains

Grains which have undergone, on a small area of their surface, an obvious change in
their natural colour; the stains may be of different colours (blackish, reddish, brown);
deep  black striations  are  also to be  regarded  as  stains.  If  the  colour  of  the  stains  is
sufficiently  marked  (black,  pink,  reddish-brown)  to  be  immediately  visible  and  if
they cover an area not less than half that of the grain, the grains must be considered
to be yellow grains.

J.

Yellow grains

Grains which have undergone, totally or partially, otherwise than by drying, a change
in their natural colour and have taken on a lemon or orange-yellow tone.

K.

Amber grains

Grains which have undergone, otherwise than by drying, a slight uniform change in
colour  over the  whole surface;  this change  alters the  colour  of  the  grains  to  a  light
amber-yellow.

114

ANNEX III

Definition of standard quality of paddy rice

Paddy rice of standard quality shall :

(a)

be of a sound and fair marketable quality, free of odour;

(b)

contain a moisture content of maximum 13%;

(c)

have  a  yield  of  wholly  milled  rice  63%  by  weight  in  whole  grains  (with  a
tolerance of 3% of clipped grains) of which a percentage by weight of wholly
milled rice grains which are not of unimpaired quality:

–  chalky grains of paddy rice under CN codes 1006 10 27 and

CN 1006 10 98:

–  chalky grains of paddy rice under CN codes other than

CN 1006 10 27 and CN 1006 10 98:

–  grains striated with red:

–  spotted grains:

–  stained grains:

–  yellow grains:

–  amber grains:

1.5%

2.0%

1.0%

0.50%

0.25%

0.02%

0.05%.

115

ANNEX IV

Description

Buttermilk, curdled milk and cream, yoghurt, kephir and other fermented or acidified
milk and cream,  flavoured or containing added fruit,  nuts or  cocoa,  whether  or  not
concentrated or containing sugar or other sweetening matter:

- Yoghurt:

- - Flavoured or containing added fruit, nuts or cocoa

- Other:

- - Flavoured or containing added fruit, nuts or cocoa

CN code

ex 0403

0403 10

0403 10 51 to
0403 10 99

0403 90

0403 90 71 to
0403 90 99

ex 1704

Sugar confectionery (including white chocolate), not containing cocoa:

1704 90 51 to
1704 90 99

- - Other

ex 1806

ex 1901

1901 10 00

1901 20 00

1901 90

1901 90 11 to
1901 90 19

1901 90 99

ex 1902

1902 20 91

1902 20 99

1902 30

1902 40 90

1904

ex 1905

1905 90 20

ex 2004

Chocolate  and  other  food  preparations  containing  cocoa,  except  goods  of
subheadings 1806 10, 1806 20 70, 1806 90 60, 1806 90 70 and 1806 90 90

Malt extract; food preparations of flour, meal, starch or malt extract, not containing
cocoa or containing less than 40% by weight of cocoa calculated on a totally defatted
basis,  not  elsewhere  specified  or  included;  food  preparations  of  goods  of  headings
0401 to 0404, not containing cocoa or containing less than 5% by  weight of cocoa
calculated on a totally defatted basis, not elsewhere specified or included:

- Preparations for infant use, put up for retail sale

- Mixes and doughs for the preparation of bakers’ wares of heading No 1905.

- Other:

- - Malt extract

- - Other:

- - - Other:

Pasta, whether or not cooked or stuffed (with meat or other substances) or otherwise
prepared, such as spaghetti, macaroni, noodles, lasagne, gnocchi, ravioli, cannelloni;
couscous, whether or not prepared:

- - - Cooked

- - - Other

- Other pasta

- - Other

Prepared foods obtained by the swelling or roasting of cereals or cereal products (for
example, corn flakes); cereals (other than maize (corn)) in grain form or in the form
of  flakes  or  other  worked  grains  (except  flour  and  meal),  pre-cooked,  or  otherwise
prepared, not elsewhere specified or included

Bread,  pastry,  cakes,  biscuits  and  other  bakers’  wares,  whether  or  not  containing
cocoa; communion wafers, empty cachets of a kind suitable for pharmaceutical use,
sealing wafers, rice paper and similar products:

Communion wafers, empty cachets of a kind suitable for pharmaceutical use, sealing
wafers, rice paper and similar products.

Other  vegetables  prepared  or  preserved  otherwise  than  by  vinegar  or  acetic  acid,
frozen, other than products of heading No 2006:

116

- Potatoes:

- - Other:

2004 10 91

- - - In the form of flour, meal or flakes

ex 2005

Other vegetables prepared or preserved otherwise than by vinegar or acetic acid, not
frozen, other than products of heading No 2006:

2005 20 10

- - In the form of flour, meal or flakes

- Potatoes:

ex 2101

2101 12

2101 12 98

2101 20

Extracts, essences and concentrates, of coffee, tea or maté preparations with a basis
of  these  products  or  with  a  basis  of  coffee,  tea  or  maté;  roasted  chicory  and  other
roasted coffee substitutes, and extracts, essences and concentrates, thereof:

- - Preparations with a basis of these extracts, essences or with a basis of coffee:

- - - Other

- Extracts, essences and concentrates, of tea or maté, and preparations with a basis of

these extracts, essences or concentrates, or with a basis of tea or maté:

2101 20 98

- - - Other

2105 00

2106

Ice cream and other edible ice, whether or not containing cocoa

Food preparations not elsewhere specified or included:

- Other:

2106 90 10

- - Cheese fondues

- - Other:

2106 90 92

- - - Containing no milk fats, sucrose, isoglucose, glucose or starch or containing, by
weight, less than 1,5 % milk fat, 5 % sucrose or isoglucose, 5% glucose or starch

2106 90 98

- - - Other

ex 3505

ex 3809

Dextrins  and  other  modified  starches  (for  example,  pregelatinised  starches);  glues
based  on  starches,  or  on  dextrins  or  other  modified  starches,  except  starches  of
No 3505 10 50

Finishing  agents,  dye  carriers  to  accelerate  the  dyeing  or  fixing  of  dyestuffs  and
other  products  and  preparations  (for  example,  dressings  and  mordants),  of  a  kind
used  in  the  textile,  paper,  leather  or  like  industries,  not  elsewhere  specified  or
included:

3809 10

- with a basis of amylaceous substances’

117

ANNEX V

CORRELATION TABLE

Regulation (EC) No 3072/95

This Regulation

Article 1

Article 2

Article 3

Article 4

Article 5

Article 6

—

—

Article 7

Article 8

Article 9

Article 10

—

Article 11

Article 12

Article 13

Article 14

Article 15

Article 16

Article 17

Article 18

Article 19

—

Article 21

Article 22

Article 23

—

Article 24

Article 25

Article 1 and 2

Article 3

Article 6

Article 6

—

—

Article 4

Article 7

—

—

Article 9

Article 5

Article 8

Article 10

Article 11

Articles 13,14, 15, 16, 17 and 18

Article 19

Article 20

Article 21

Article 22

—

Article 23

—

Article 24

Article 25

Article 26

Article 27

Article 29

Article 30

118

Article 26

—

Article 27

Annex A

—

Annex B

Annex C

Article 28

Article 31

Article 32

Annex I

Annex II

Annex IV

Annex V

Regulation (EC) No 3073/95

This Regulation

Article 1

Annex III

119

2003/0010 (CNS)

Proposal for a

COUNCIL REGULATION

on the common organisation of the market in dried fodder
for the marketing years 2004/05 to 2007/08

THE COUNCIL OF THE EUROPEAN UNION,

Having  regard  to  the  Treaty  establishing  the  European  Community,  and  in  particular
Articles 36 and the third subparagraph of Article 37(2) thereof,

Having regard to the proposal from the Commission57,

Having regard to the opinion of the European Parliament58,

Having regard to the opinion of the European Economic and Social Committee59,

Having regard to the opinion of the Committee of the Regions60,

Whereas:

(1) 

(2) 

(3) 

(4) 

57

58

59

60

61

62

Council Regulation (EC) No 603/95 of 21 February 1995 of the common organisation
of the market in dried fodder61 establishes a common organisation of that market with
aid granted at two flat rates, one for dehydrated fodder and one for sun-dried fodder.

The main part of fodder production under the scheme established by Regulation (EC)
No 603/95 relies on the use of fossil fuel for dehydrating and, in some Member States,
on  the  use  of  irrigation.  Due  to  concerns  about  its  effects  on  the  environment,  the
scheme  should  be  discontinued;  In  order  to  ensure  a  transition  to  the  industry  that
scheme should be maintained until the 2007/08 marketing year.

Regulation  (EC)  No  603/95  has  been  substantially  amended  several  times.  Since
further amendments are to be made, in the interest of clarity that Regulation should be
replaced. Regulation (EC) No 603/95 should therefore be repealed.

Council Regulation (EC) No .../2003 of … on  …62 establishes the single  aid system.
Accordingly, the two aid rates set by Regulation (EC) No 603/95 should be reduced to

OJ C …, ..., p. …
OJ C …, ..., p. …
OJ C …, ..., p. …
OJ C …, ..., p. …
OJ  L  63,  21.3.1995,  p.  1.Regulation  as  last  amended  by  Regulation  (EC)  No  1347/95  (OJ L 131,
15.6.1995, p. 1).
See p. … of this Official Journal.

120

                                                
a  single  rate  applicable  to  both  dehydrated  and  sun-dried  fodder  and  decreased  by
steps for the three last marketing years.

(5) 

(6) 

(7) 

(8) 

(9) 

Since  production  in  southern  countries  begins  in  April,  the  marketing  year  for  dried
fodder on which aid is granted should be 1 April to 31 March.

To  guarantee  budget  neutrality  for  dried  fodder  there  should  be  a  ceiling  on  the
volume of Community production. To that end a maximum guaranteed quantity should
be set covering both dehydrated and sun-dried fodder.

That  quantity  should  be  divided  among  the  Member States  on  the  basis  of  the
historical quantities recognised for the purposes of Regulation (EC) No 603/95.

To  secure  respect  for  the  guaranteed  maximum  quantity  and  discourage  excess
production  throughout  the  Community,  the  aid  should  be  reduced  if  that  quantity  is
exceeded.  That  reduction  should  be  applied  in  each  Member State  in  excess  of  its
guaranteed national quantity being proportionate to the overshoot recorded for it.

The  aid  amount  finally  due  cannot  be  paid  until  it  is  known  whether  the  guaranteed
maximum quantity has been exceeded. An advance on the aid should therefore be paid
once the dried fodder has left the processor.

(10)  Minimum quality requirements for entitlement to the aid should be set.

(11)  To encourage a steady flow of green fodder to processors, eligibility for the aid should
in  certain  cases  require  conclusion  of  a  contract  between  producers  and  processing
undertakings.

(12)  To aid  transparency of the production  chain  and  facilitate  essential  checking,  certain

particulars in contracts should be compulsory.

(13)  To  receive  the  aid,  processors  should  therefore  be  required  to  keep  stock  records
providing  necessary  information  for  checking  entitlement  and  to  furnish  any  other
supporting document needed.

(14)  Where there is no contract between the producers and the processing undertakings, the

latter should have to provide other information allowing entitlement to be checked.

(15) 

It  should  be  ensured  that  where  a  contract  is  a  special-order  one  for  processing  of
fodder delivered by the grower the aid is passed back to him.

(16)  The  proper  working  of  a  single  market  in  dried  fodder  would  be  jeopardised  by  the
granting  of  national  aid.  Therefore,  the  provisions  of  the  Treaty  governing  State  aid
should apply to the products covered by this common market organisation.

(17)  The measures necessary for the implementation of this Regulation should be adopted
in accordance with Council Decision 1999/468/EC of 28  June 1999  laying  down the
procedures for the exercise of implementing powers conferred on the Commission63.

63

OJ L 184, 17.7.1999, p. 23.

121

                                                
(18)  The internal market and the custom duties could, in exceptional circumstances, prove
inadequate, In such cases, so as not to leave the Community market without defence
against  disturbances  that  might  ensue,  the  Community  should  be  able  to  take  all
necessary measures without delay. All such measures should be in conformity with the
Community's international obligations,

HAS ADOPTED THIS REGULATION:

Chapter I
Introductory provisions

Article 1

The common organisation of the market in dried fodder shall be established for the 2004/05 to
2007/08 marketing years, and cover the following products:

CN code

Description

(a) ex 1214 10 00

(cid:1)  Meal and pellets of lucerne artificially heat-dried

(cid:1)  Meal and pellets of lucerne otherwise dried and ground

ex 1214 90 91 and
ex 1214 90 99

(cid:1)  Lucerne,  sainfoin,  clover,  lupins,  vetches  and  similar  fodder  products,
artificially  heat-dried,  except  hay  and  fodder  kale  and  products  containing
hay

(cid:1)  Lucerne,  sainfoin,  clover,  lupins,  vetches,  honey  lotus,  chickling  pea  and

birdsfoot, otherwise dried and ground

(b) ex 2309 90 98

(cid:1) 

Protein concentrates obtained from lucerne juice and grass juice

(cid:1)  Dehydrated  products  obtained  exclusively  from  solid  residues  and  juice

resulting from preparation of the concentrates in the first indent

Article 2

The  marketing  year  for  the  products  listed  in  Article 1  shall  begin  on  1 April  and  end  on
31 March of the following year.

Article 3

This  Regulation  shall  apply  without  prejudice  to  the  measures  provided  for  by  Council
Regulation  (EC)  No  …/2003  of  …  2003  establishing  common  rules  for  direct  support
schemes  under  common  agricultural  policy  and  support  schemes  for  producers  of  certain
crops (horizontal Regulation).

Chapter II
Aid

Article 4

1.

Aid shall be granted for the products listed in Article 1.

122

2.

Without prejudice to Article 5, the aid shall be:

(a)

EUR 33 per tonne for the 2004/05 marketing year,

(b) EUR 24.75 per tonne for the 2005/06 marketing year,

(c)

EUR 16.50 per tonne for the 2006/07 marketing year,

(d) EUR 8.25 per tonne for the 2007/08 marketing year.

Article 5

1.

2.

A maximum guaranteed quantity (MGQ) per marketing year of 4 855 900 tonnes of
dehydrated  and/or  sun-dried  fodder  for  which  the  aid  provided  for  in  Article  4(2)
may be granted is hereby established.

The  guaranteed  maximum  quantity  provided  for  in  paragraph 1  shall  be  divided
among the Member States as follows:

Guaranteed national quantity (tonnes)

BLEU

Denmark

Germany

Greece

Spain

France

Ireland

Italy

Netherlands

Austria

Portugal

Finland

Sweden

United Kingdom

8 000

334 000

421 000

37 500

1 325 000

1 605 000

5 000

685 000

285 000

4 400

30 000

3 000

11 000

102 000

Article 6

Where during a marketing  year the volume of dried fodder for which  aid as provided for in
Article 4(2) is claimed exceeds the guaranteed maximum quantity set out in Article 5(1), the
aid  to  be  paid  in  that  marketing  year  shall  be  reduced  in  each  Member State  in  which
production  exceeds  the  guaranteed  national  quantity  by  a  percentage  proportionate  to  that
excess.

123

The reduction shall be set, in accordance with the procedure referred to in Article 18(2), at a
level  ensuring  that  budget  expenditure  expressed  in  euros  does  not  exceed  that  what  would
been attained if the guaranteed maximum quantity had not been exceeded.

1.

Processing undertakings who apply for aid under this Regulation shall be entitled to
an advance payment as follows:

Article 7

(a)

(b)

(c)

(d)

for the 2004/05 marketing year: EUR 19,80 per tonne, or EUR 26,40 per tonne
if they have lodged a security of EUR 6,60 per tonne;

for the 2005/06 marketing year: EUR 14,85 per tonne, or EUR 19,80 per tonne
if they have lodged a security of EUR 4,95 per tonne;

for the 2006/07 marketing year: EUR 9,90 per tonne, or EUR 13,20 per tonne
if they have lodged a security of EUR 3,30 per tonne;

for the 2007/08 marketing year: EUR 4,95 per tonne, or EUR 6,60 per tonne if
they have lodged a security of EUR 1,65 per tonne.

Member States shall make the necessary checks to verify entitlement to the aid. Once
entitlement has been established the advance shall be paid.

However, the advance may be paid before entitlement has been established provided
the  processor lodges a  security  equal to the amount  of  the  advance  plus  10%.  This
security shall also serve as security for the purposes of the first subparagraph. It shall
be reduced to the level specified in the first subparagraph as soon as entitlement to
aid has been established and shall be released in full when the balance of the aid is
paid.

2.

3.

4.

Before  an  advance  can  be  paid  the  dried  fodder  must  have  left  the  processing
undertaking.

Where an  advance has been  paid, the balance  amounting  to  the  difference  between
the amount of the advance and the total aid due to the processing undertaking shall
be paid subject to application of Article 6.

Where the advance exceeds the total to which the processing undertaking is entitled
following the application of Article 6, the processor shall reimburse the excess to the
competent authority of the Member State on request.

Article 8

By 31 May of each year Member States shall notify the Commission of the quantities of dried
fodder that were eligible for aid as provided for in Article 4(2) in the previous marketing year.

124

Article 9

The aid provided for in Article 4(2) shall be paid on application from the party concerned, in
respect  of  dried  fodder  that  has  left  the  processing  plant  and  meets  the  following
requirements:

(a)

a  maximum  moisture  content  of  11%  to  14%  that  may  vary  depending  on  the
presentation of the product;

(b)

a minimum total crude protein content in the dry matter not less than:

(i)

15% for the products referred to in point (a) and the second indent of point (b)
in Article 1,

(ii)

45% for the products referred to in the first indent of point (b) in Article 1;

(c)

it is of sound and fair merchantable quality.

Further  requirements,  in  particular  on  carotene  and  fibre  content,  may  be  adopted  in
accordance with the procedure referred to in Article 18(2).

Article 10

Aid  as  provided  for  in  Article 4(2)  shall  only  be  granted  to  undertakings  processing  the
products listed in Article 1 which comply with the following conditions:

(a)

keep stock records containing at least the following information:

(i)

the  quantities  of  green  fodder  and,  where  applicable,  sun-dried  fodder
processed; however, where the particular circumstances of  the undertaking so
require, quantities may be estimated on the basis of areas sown;

(ii)

the  quantities  of  dried  fodder  produced  and  the  quantities,  with  their  quality,
that leave the processor;

provide any other supporting documents needed for verifying entitlement to the aid;

fall into at least one of the following categories:

(b)

(c)

(i)

a processor who has concluded contracts with producers of fodder for drying;

(ii)

an undertaking that has processed its own crop or, in the case of a group, that
of its members;

(iii) undertakings which have obtained their supplies from natural or legal persons
providing  certain  guarantees  to  be  determined  who  have  concluded  contracts
with producers of fodder for drying; such persons must be buyers approved, on
terms defined in accordance with the procedure referred to in Article 18(2), by
the competent authority of the Member State in which the fodder is harvested.

125

Article 11

Undertakings processing their own crops or those of their members shall each year submit to
the competent body of their Member State, before a date to be set, a declaration of the areas
from which the fodder crop is to be processed.

1.

2.

1.

2.

3.

Article 12

A contract as referred to in point (c) of Article 10 shall state not only the price to be
paid to the grower of the green fodder or, if appropriate, sun-dried fodder but also at
least the following:

(a)

the area from which the crop is to go to the processor,

(b)

the delivery and payment terms.

Where a contract as referred to in point (c) (i) of Article 10 is a special-order contract
for  processing  of  fodder  delivered  by  a  producer,  it  shall  specify  at  least  the  area
from which the crop is to be delivered and include a clause containing an obligation
for  the  processing  undertakings  to  pay  the  producer  the  aid  as  provided  for  in
Article 4 that is received for the quantity processed under the contract.

Article 13

Member States shall introduce inspection systems for verifying that each processing
undertaking has complied with the following:

(a)

the conditions laid down in Articles 1 to 12;

(b)

the quantities covered by aid applications correspond to the quantities of dried
fodder meeting the minimum quality that leave the processing undertakings.

Dried fodder shall be weighed on leaving the processing plant and samples taken.

Before adopting provisions for  the  application of  paragraph 1,  Member  States  shall
notify such provisions to the Commission.

CHAPTER III
Trade with third countries

Article 14

Unless this Regulation provides otherwise, the Common Customs Tariff duty rates shall apply
to the products listed in Article 1.

1.

The  general  rules  for  the  interpretation  of  the  Combined  Nomenclature  and  the
detailed  rules  for  its  application  shall  apply  to  the  tariff  classification  of  products

Article 15

126

listed  in  Article  1.  The  tariff  nomenclature  resulting  from  the  application  of  this
Regulation shall be incorporated in the Common Customs Tariff.

2.

Save as otherwise provided for in this Regulation or in provisions adopted pursuant
thereto, the following shall be prohibited in trade with third countries:

(a)

the levying of any charge having equivalent effect to a customs duty;

(b)

the  application  of  any  quantitative  restriction  or  measure  having  equivalent
effect.

Article 16

1.

2.

3.

4.

If  by  reason  of  imports  or  exports  the  Community  market  in  one  or  more  of  the
products  listed  in  Article 1  is  affected  by  or  threatened  with  serious  disturbance
likely  to  jeopardise  achievement  of  the  objectives  set  out  Article 33  of  the  Treaty,
appropriate measures may be applied to trade with non-WTO member countries until
the disturbance or threat of it ceases.

If the situation referred to in paragraph 1 arises, the Commission shall at a request of
a  Member State  or  on  its  own  initiative  decide  upon  the  necessary  measures.  The
Member  States  shall  be  notified  of  such  measures  which  shall  be  immediately
applicable. If the Commission receives a request from a Member State, it shall take a
decision thereon within three working days following receipt of the request.

Measures  decided  by  the  Commission  may  be  referred  to  the  Council  by  any
Member State within three working days of the day on which they were notified. The
Council  shall  meet  without  delay.  It  may,  acting  by  qualified  majority,  amend  or
repeal  the  measure  in  question  within  one  month  from  the  date  on  which  it  was
referred to the Council.

Provisions  adopted  under  this  Article  shall  be  applied  having  regard  to  the
obligations arising from agreements concluded in accordance with Article 300(2) of
the Treaty.

Chapter IV
General provisions

Article 17

Unless this Regulation provides otherwise, Articles 87, 88 and 89 of the Treaty shall apply to
production of and trade in the products listed in Article 1.

Article 18

1.

2.

The Commission shall be assisted by the Management Committee for Dried Fodder,
hereinafter referred to as "the Committee".

Where  reference  is  made  to  this  paragraph,  Articles 4  and  7  of  Decision
1999/468/EC shall apply.

127

The period laid down in Article 4(3) of Decision 1999/468/EC shall be one month.

3.

The Committee shall adopt its rules of procedure.

The  Committee  may  consider  any  other  question  raised  by  its  chairman,  either  on  his  own
initiative or at the request of a representative of a Member State.

Article 19

Article 20

Detailed rules for the application for this Regulation shall be adopted in accordance with the
procedure referred to in Article 18(2), in particular on:

(a)

(b)

(c)

(d)

(e)

(f)

(g)

(h)

granting  of  the  aid  provided  for  in  Article 4  and  the  advance  provided  for  in
Article 7;

verification  and  establishment  of  entitlement  to  the  aid,  including  any  necessary
controls, all of which may make use of certain elements of the integrated system;

release of the securities indicated in Article 7(1);

criteria for determining the quality standards referred to in Article 9;

conditions to be fulfilled by the undertakings as set out in point (c)(ii) in Article 10
and Article 11;

control measure to be carried out referred to in Article 13(2);

criteria to be fulfilled for the conclusion of contracts as referred to in Article 10 and
information  which  they  must  contain,  in  addition  to  the  criteria  laid  down  in
Article 12;

application  of  the  maximum  guaranteed  quantity  (MGQ)  as  referred  to  in
Article 5(1).

Transitional  measures  may  be  adopted  in  accordance  with  the  procedure  referred  to  in
Article 18(2).

Article 21

Article 22

Member States shall notify the Commission of the measures they take in order to  apply this
Regulation.

128

Regulation (EC) No 603/95 is repealed.

Article 23

References  made  to  the  repealed  Regulation  shall  be  construed  as  references  to  this
Regulation and shall be read in accordance with the correlation table in the Annex.

Article 24

This Regulation shall enter into force on the seventh day following that of its publication in
the Official Journal of the European Communities.

It shall apply from 1 April 2004.

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

Brussels,

For the Council
The President

129

ANNEX

CORRELATION TABLE

Regulation (EC) No 603/95

This Regulation

Article 1

Article 2

Article 3

Article 4

Article 5

Article 6

Article 7

Article 8

Article 9

Article 10

Article 11

Article 12

Article 13

Article 14

Article 15

Article 16

Article 17

Article 18

Article 19

Article 20

Article 21

Article 22

Article 23

Article 24

Article 1

Article 2

-

Article 3

Article 4

Article 5

Article 6

Article 7

Article 8

Article 9

Article 10

Article 11

Article 12

Article 13

Article 14

Article 15

Article 16

Article 17(1)-(4)

Article 17(5)

Article 18(a)

Article 18(b)

Article 19

Article 20

Article 21

130

2003/0011 (CNS)

Proposal for a

COUNCIL REGULATION

amending Regulation (EC) No 1255/1999 on the common organisation
of the market in milk and milk products

THE COUNCIL OF THE EUROPEAN UNION,

Having  regard  to  the  Treaty  establishing  the  European  Community,  and  in  particular  Article 37
thereof,

Having regard to the proposal from the Commission64,

Having regard to the opinion of the European Parliament65,

Whereas:

(1) 

(2) 

(3) 

(4) 

Council Regulation (EC) No ... of ....66 establishing a levy in the milk and milk-products sector
sets operational rules for a levy on milk and milk products aimed at reducing the imbalance
between  supply  and  demand  on  the  market  and  removing  the  resulting  structural  surpluses;
these arrangements will apply for a further eleven consecutive twelve-month periods starting
on 1 April 2004.

To  promote  consumption  of  milk  and  milk  products  in  the  Community  and  improve  their
competitiveness on  international  markets,  the  level  of  market  support  should  be  diminished,
specifically by gradual reduction from 1 July 2004 of the target price for milk and intervention
prices for butter and skimmed milk powder set by Council Regulation (EC) No 1255/199967.
To this end the relative intervention price levels of the two products should be adjusted.

To  avoid  creation  of  an  artificial  outlet  of  massive  recourse  to  intervention  a  fixed  quantity
ceiling should be set for intervention purchases of butter.

The direct payment measures in support of milk producers' incomes having been adjusted and
set  out  in  Council  Regulation  (EC)  No  [quote  …],  they  need  therefore  be  withdrawn  from
Regulation (EC) No 1255/1999.

(5) 

It is therefore necessary to amend Regulation (EC) No 1255/1999 accordingly.

64

65

66

67

OJ C ..., ...., p. ...
OJ C ..., ..., p. ...
OJ L ..., ..., p. ...
OJ L 160, 26.6.1999, p. 48. Regulation last amended by Commission Regulation (EC) No 509/2002 (OJ
L 79, 22.3.2002, p. 15).

131

                                                
HAS ADOPTED THIS REGULATION:

Article 1

Regulation (EC) No 1255/1999 is hereby amended as follows:

(1)

In Article 3(1) the first subparagraph is replaced by:

" 1. The target price in  the  Community  for  milk  containing  3.7% fat  delivered  to diaries

shall, in euro per 100 kg, be:

– 

– 

– 

– 

– 

– 

1 July 2000 to 30 June 2004: 30.98,

1 July 2004 to 30 June 2005: 29.22,

1 July 2005 to 30 June 2006: 27.47,

1 July 2006 to 30 June 2007: 25.71,

1 July 2007 to 30 June 2008: 23.96,

from 1 July 2008: 22.21."

(2)

Article 4(1) is replaced by:

" 1.

Intervention prices in the Community shall, in euros per 100 kg, be as follows:

(a)

butter:

– 

– 

– 

– 

– 

– 

1 July 2000 to 30 June 2004: 328.20,

1 July 2004 to 30 June 2005: 305.23,

1 July 2005 to 30 June 2006: 282.44,

1 July 2006 to 30 June 2007: 259.52,

1 July 2007 to 30 June 2008: 236.73,

from 1 July 2008: 213.95;

(b)

skimmed milk powder:

– 

– 

– 

– 

– 

– 

1 July 2000 to 30 June 2004: 205.52,

1 July 2004 to 30 June 2005: 198.32,

1 July 2005 to 30 June 2006: 191.19,

1 July 2006 to 30 June 2007: 184.01,

1 July 2007 to 30 June 2008:176.88,

from 1 July 2008: 169.74."

(3)

Article 6(1) is replaced by:

" 1.

If during the period 1 March to 31 August of any year market prices of butter in one or
more Member States are over a representative period less than 92% of the intervention
price, intervention agencies shall buy in butter as indicated in paragraph 2, at 90% of
the intervention price, in the Member State(s) concerned on the basis of specifications
to be determined.

132

Where  the  quantities  offered  for  intervention  during  the  above  period  exceed
30 000 tonnes the Commission may suspend intervention buying.

In such cases buying-in by intervention agencies may be carried out using a standing
tendering procedure on the basis of specifications to be determined.

Where market prices of butter in the Member State(s) in question over a representative
period  are  92%  or  more  of  the  intervention  price  the  Commission  shall  suspend
buying-in."

(4)

Articles 16 to 25 are deleted.

Article 2

This Regulation shall enter into force on the third day following its publication in the Official Journal
of the European Communities.

It shall apply from 1 January 2004. However, point (3) of article 1 shall apply from 1 July 2004.

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

Done at Brussels,

For the Council
The President

133

2003/0012 (CNS)

Proposal for a

COUNCIL REGULATION

establishing a levy in the milk and milk-products sector

THE COUNCIL OF THE EUROPEAN UNION,

Having  regard  to  the  Treaty  establishing  the  European  Community,  and  in  particular  Article 37
thereof,

Having regard to the proposal from the Commission68,

Having regard to the opinion of the European Parliament69,

Whereas:

(1) 

(2) 

(3) 

(4) 

68

69

70

71

72

Council  Regulation  (EEC)  No  856/84  of  31  March  1984  amending  Regulation  (EEC)
No 804/68 on the common organisation of the market in milk and milk products70 introduced
an  additional levy  scheme  in  that  sector from  2  April  1984.  The  scheme  has  been  extended
several  times,  notably  by  Council  Regulation  (EEC)  No  3950/92  of  28 December  1992
establishing an additional levy in the milk and milk-products sector71 and most recently, until
31 March  2008,  by  Council  Regulation  (EC)  No  1256/1999  of  17  May  1999  amending
Regulation (EEC) No 3950/92 establishing an additional levy in the milk  and  milk  products
sector72.

In  order  both  to  benefit  from  the  lessons  learned  and  to  simplify  and  clarify  the  scheme,
Regulation  (EEC)  No.  3950/92  should  be  repealed  and  the  rules  governing  the  extended
scheme should be reorganised and clarified.

The main purpose of the scheme is to reduce the imbalance between supply and demand on
the  milk  and  milk-products  market  and  the  resulting  structural  surpluses,  thereby  achieving
better  market  equilibrium.  It  should  therefore  continue  to  be  applied  for  seven  further
consecutive twelve-month periods starting on 1 April 2008. Those periods are to be added to
the periods already provided for in Regulation (EEC) No 3950/92.

The target price for milk is to be gradually reduced by a total of 28% over the five marketing
years  beginning  on  1  July  2004.  The  impact  of  this  measure  on  internal  consumption  and
exports  of  milk  and  milk  products  justifies  a  moderate  increase  in  the  total  Community
reference quantity for milk following each price reduction, with a view to keeping production
in balance with the expected trend in consumption and avoiding any disturbance of the market
in milk products.

OJ C ...., ....., p. ....
OJ C ...., ....., p. ....
OJ L 90, 1.4.1984, p. 10.
OJ  L  405,  31.12.1992,  p.  1.  Regulation  last  amended  by  Regulation  (EC)  No  2018/2002  (OJ  L  313,
16.11.2002, p. 3).
OJ L 160, 26.6.1999, p. 73.

134

                                                
(5) 

(6) 

(7) 

(8) 

(9) 

(10) 

(11) 

(12) 

(13) 

The method adopted in 1984, which consists of applying a levy to quantities of milk collected
or sold for direct consumption above a certain guarantee threshold, should be maintained. This
guarantee  threshold  is  fixed  for  each  Member  State  as  a  guaranteed  total  quantity  for  a
reference milk-fat content.

The levy to be applied when the reference quantities are exceeded should be set at a dissuasive
level  and  be  payable  by  the  Member  States  as  soon  as  the  national  reference  quantity  is
exceeded, with the Member State dividing the burden of payment among the producers who
have contributed to the overrun.

Regulation (EEC) No 3950/92 provided for a distinction between deliveries and direct sales.
Experience  has  shown  that  administration  should  be  simplified  by  restricting  deliveries  to
whole milk and excluding all other milk products, the marketing of which must therefore be
included henceforth in direct sales that should hereinafter be referred to as “sales”.

The Member States should be responsible for allocating the individual reference quantities, for
both deliveries and sales, requiring separate accounts to be  kept for quantities  delivered  and
quantities sold and for any overruns of those quantities. This allocation should be based on the
reference quantities held by producers for the twelve months period ending on 31 March 2004.
The sum of the quantities allocated to the producers by the Member States may not exceed the
national  reference  quantities.  The  national  reference  quantities  are  to  be  established  for  the
eleven  periods  from  1  April  2004  and  to  take  account  of  the  different  components  of  the
previous scheme.

It is necessary to determine the way the fat content of milk is to be taken into account when
drawing up the definitive statement of quantities delivered. It should be stressed that under no
circumstances may individual downward corrections of the fat content of delivered milk or the
separation of milk into its different components result in a deduction from the levy payment of
any  quantity  in  excess  of  the  guaranteed  total  quantity  in  a  Member  State.  In  view  of  the
negligible  quantities  concerned,  there  is  no  need  to  take  account  of  fat  content  for  sales
directly to consumers.

In  order  to  ensure  that  the  scheme  runs  effectively,  the  contribution  of  the  producers  to  the
levy  should  be  collected  by  the  purchasers,  who  are  in  the  best  position  to  carry  out  the
necessary transactions and who should therefore be given  the  means  to ensure that  they  can
collect this contribution. Conversely, any amount collected which exceeds the levy due by the
Member State should be used to finance national restructuring programmes and/or reimbursed
to  certain categories  of  producers  or those  in  an  exceptional  situation.  However,  where  it  is
found that no levy is due by the Member State, any advances collected should be reimbursed.

Experience has shown that implementing this scheme presupposes the existence of a national
reserve  to  accommodate  all  those  quantities  which,  for  whatever  reasons,  are  not,  or  are  no
longer,  allocated  individually.  In  order  to  allow  the  Member  State  to  cater  for  special
situations, determined by objective criteria, they should be authorised to top up their national
reserves, especially following across-the-board reductions in all reference quantities.

In order to ensure that administration of the scheme remains sufficiently flexible, the Member
States  should  be  authorised  to  reallocate  unused  reference  quantities  at  the  end  of  a  period,
either nationally or among purchasers.

The  underuse  of  reference  quantities  by  producers  can  prevent  milk  production  from
developing properly. In order to avoid such problems, Member States should be able to decide
in  accordance  with  the  general  principles  of  Community  law  that,  in  cases  of  substantial
underuse  over  a  significant  period  of  time,  unused  reference  quantities  are  to  revert  to  the
national reserve to be re-allocated to other producers. However, provision must be made for
cases where producers who are temporarily unable to produce wish to resume production.

135

(14) 

The  temporary  transfer  of  parts  of  individual  reference  quantities  in  Member  States  which
have  authorised  this  has  proven  to  enhance  the  effectiveness  of  the  scheme.  However,  this
mechanism  should  not  be  implemented  where  it  might  run  counter  to  structural  trends  and
adjustments,  nor  should  any  resulting  administrative  difficulties  be  underrated,  nor  should
former  producers  who  have  given  up  production  be  allowed  to  keep  their  quota  beyond  the
time strictly needed for it to be transferred to an active producer.

(15)  When the scheme was introduced in 1984, the principle was established that when a farm is
sold, leased or transferred by inheritance, the corresponding reference quantity is transferred to
the  purchaser,  tenant  or  heir.  It  would  not  be  appropriate  to  alter  this  original  decision.
However,  national  provisions  to  safeguard  the  legitimate  interests  of  the  parties  should  be
implemented in all cases of transfer in case the parties are not in agreement.

(16) 

(17) 

(18) 

(19) 

In order to continue the restructuring of milk production, improve the environment and ensure
that quotas do not remain tied to farms which no longer produce milk, some exceptions should
be  made  to  the  principle  that  reference  quantities  are  tied  to  farms,  and  the  Member  States
should be authorised to keep open the option to implement national restructuring programmes.
Also,  it  is  necessary  to  organise  some  mobility  in  reference  quantities  within  a  specified
geographical  area  and  based  on  objective  criteria,  in  particular  with  a  view  to  ensuring  that
quotas  are  held  by  active  producers.  Member  States  should  also  be  entitled  to  organise  the
transfer  of  reference  quantities  in  other  ways  than  through  individual  transactions  between
producers.

In order to avoid increasing the cost of means of production or causing unequal treatment, it
should be stressed that all public financial assistance to parties acquiring quotas are prohibited.

The main purpose of the levy provided for in this Regulation is to regularise and stabilise the
market  in  milk  products.  The  revenue  accruing  from  this  levy  should  therefore  be  used  to
finance expenditure in the milk sector.

The  measures  needed  to  implement  this  Regulation  should  be  taken  pursuant  to  Council
Decision  1999/468/EC  of  28  June  1999  laying  down  the  procedures  for  the  exercise  of
implementing powers conferred on the Commission73.

HAS ADOPTED THIS REGULATION:

Chapter 1
General provisions

Article 1
Scope

For 11 consecutive periods of twelve months commencing on 1 April 2004 (hereinafter referred to as
“twelve  month  periods”),  a  levy  is  hereby  introduced  (hereinafter  referred  to  as  “the  levy”)  on
quantities of cow's milk and other milk products marketed during the twelve-month period concerned
in excess of the quantities fixed in Annex I.

These quantities shall be fixed without prejudice to possible review in the light of the general market
situation and particular conditions existing in certain Member States.

73

OJ L 184, 17.7.1999, p. 23.

136

                                                
The levy is hereby set at 115% of the target price for milk.

Article 2
Levy

Article 3
Payment of the levy

1.

2.

Before 1 September following the twelve-month period concerned, the Member States shall
pay the European Agricultural Guidance and Guarantee Fund (EAGGF) a sum equivalent to
the levy  calculated  on every  overrun  of the  reference  quantities  set  out  in  Annex  I,  taking
account of the reference fat content fixed in Annex II.

The  levy  shall  be  entirely  allocated  among  the  producers  who  have  contributed  to  the
overruns in line with the individual reference quantities provided for in Article 5.

Article 4
Definitions

For the purposes of this Regulation:

(a)

(b)

(c)

(d)

'Milk' means the product defined in Article 1(2) a) of Regulation (EC) No 2597/9774.

'Other milk products' means any milk product other than milk, in particular skimmed milk,
cream, butter and cheese; when relevant, these shall be converted into "milk equivalents" by
applying  coefficients  to  be  fixed  in  accordance  with  the  procedure  provided  for  in
Article 21(2).

'Producer'  means  farmers  as  defined in  Article 2(a)  of  Regulation  (EC)  No  ....  establishing
common rules for direct support schemes under the common agricultural policy and support
schemes  for  producers  of  certain  crops75  with  a  holding  located  within  the  geographical
territory of a Member State who produce and market milk or who are preparing to do so in
the very near future.

'Holding'  means holdings as defined in  Article 2(b)  of  Regulation  (EC)  No  ....  establishing
common rules for direct support schemes under the common agricultural policy and support
schemes for producers of certain crops.

(e)

'Purchaser' means undertakings or groups which buy milk from producers:

– 

– 

to  subject  it  to  collecting,  packing,  storing,  chilling  and  processing  milk  or  milk
products, including under contract,

to  sell  it  to  one  or  more  undertakings  treating  or  processing  milk  or  other  milk
products.

However,  any  group  of  purchasers  in  the  same  geographical  area  which  carries  out  the
administrative and accounting operations necessary for the payment of the levy on behalf of
its members shall be regarded as a purchaser. For the purposes of this provision, Greece shall
be considered a single geographical area and it may deem an official body to be a group of
purchasers as referred to above.

74

75

OJ L 351, 23.12.1997, p. 13.
OJ L ...., ....., p. ....

137

                                                
(f)

(g)

(h)

(i)

(j)

1.

2.

3.

'Delivery' means any delivery of milk, not including any other milk products, to a purchaser,
whether the transport is carried out by the producer, a purchaser, an undertaking processing
or treating such products or a third party.

'Sale'  means  any  sale  or  transfer  of  milk  or  milk  products  other  than  deliveries  of  milk  as
defined under (f).

'Marketing' means deliveries of milk or sales of milk or milk products.

'Allocated  reference  quantities'  or  ‘individual  reference  quantities’  means  the  reference
quantities at 1 April of any twelve-month period.

'Available reference quantities' means the reference quantities available to producers on the
31 March, taking account of all transfers, sales and temporary allocations as provided for in
this Regulation, which have taken place during the preceding twelve-month period.

Chapter 2
Allocation of reference quantities

Article 5
Individual reference quantities

The Member States shall distribute the quantities set out in Annex I among producers on the
basis of the individual reference quantity or quantities, as provided in Article 4 of Regulation
(EEC) No 3950/92, for the twelve-month period ending on 31 March 2004.

Producers may have either one or two reference quantities, one for deliveries and the other
for sales. Quantities may be transferred from one reference quantity to the other only by the
competent authority of the Member State, at the duly justified request of the producer.

Individual reference quantities shall be adjusted, where appropriate, for each of the twelve-
month periods concerned, so that, for each Member State, the sum of the individual reference
quantities does not exceed the corresponding total quantity fixed in Annex I, taking account
of any reductions made for allocation to the national reserve provided for in Article 13.

Article 6
Allocation of quantities from the national reserve

The Member States shall adopt the necessary rules for allocating quantities from the national reserve
provided for in Article 13 to active producers or producers wishing to commence production, on the
basis of objective criteria to be notified to the Commission.

Chapter 3
Calculation of the levy

Article 7
Accounting of quantities

1.

2.

The Member States shall keep separate accounts, for deliveries and sales, of the individual
reference quantities, the quantities marketed, and any overruns on the individual quantities.

Where  a  producer  has  two  reference  quantities,  his  contribution  to  any  levy  due  shall  be
calculated separately for each one.

138

1.

2.

1.

2.

3.

1.

2.

Article 8
Fat content

Each producer shall be assigned a representative fat content, to be applied to the individual
reference  quantity  or  quantities  allocated  to  that  producer.  It  shall  be  the  average  of  the
representative  fat  contents  for  the  reference  quantities  at  the  date  of  allocation.  Where
reference  quantities  are  acquired  or  transferred,  the  representative  fat  content  shall  be
adjusted in accordance with rules to be laid down in accordance with Article 21(2).

The representative fat content referred to in paragraph 1 shall be adjusted, where appropriate,
for each twelve-month period concerned so that, for each Member State, the weighted sum
of the individual representative fat contents does not exceed the reference fat content set in
Annex II.

Article 9
Levy on deliveries

In order to draw up the definitive levy statement, the quantities delivered by each producer
shall be increased or reduced to reflect any difference between the real fat content and the
reference  fat  content,  using  coefficients  and  on  terms  to  be  laid  down  in  accordance  with
Article 21(2).

Where  the  sum  of  deliveries  adjusted  in  accordance  with  paragraph 1  is  less  than  the
deliveries actually made, the levy shall be calculated on the basis of the latter. In such cases,
each  downward  adjustment  shall  be  proportionately  reduced  so  as  to  bring  the  sum  of
adjusted deliveries into line with the deliveries actually made.

Where the sum of the deliveries adjusted in accordance with paragraph 1 is greater than the
deliveries actually made, the levy shall be calculated on the basis of the former.

Each producer's contribution to payment of the levy shall be established by decision of the
Member State, after any unused reference quantities for deliveries have been re-allocated or
not,

(a)

(b)

either at national level on the basis of the amount by which each producer's reference
quantity has been exceeded,

or firstly at the level of each purchaser, on the basis of the overrun remaining once any
unused reference quantities have been assigned, either in proportion to the individual
reference quantities of each producer or according to objective criteria to be set by the
Member States, and thereafter at national level.

Article 10
Role of purchasers

Purchasers  shall  be  responsible  for  collecting  contributions  to  the  levy  from  the  producers
concerned  and  shall  pay  to  the  competent  body  of  the  Member  State,  before  a  date  and
following a procedure to be laid down in accordance with Article 21(2), the amount of these
contributions deducted from the price of the milk paid to the producers responsible for the
overrun or, failing this, collected by any other appropriate means.

Where  a  purchaser  fully  or  partially  replaces  one  or  more  other  purchasers,  the  individual
reference quantities available to the producers shall be taken into account for the remainder
of the twelve-month period in progress, after deduction of quantities already delivered and

139

3.

4.

1.

2.

3.

account being taken of their fat content. The same provisions shall apply where a producer
transfers from one purchaser to another.

Producers who wish to deliver to more than one purchaser must notify each purchaser of the
identity of the other purchasers involved, the total reference quantity they hold and how they
intend to share this among the different purchasers.

Where  quantities  delivered  by  a  producer  exceed  that  producer's  reference  quantity,  the
purchaser shall deduct an amount from the price of the milk in any delivery by the producer
concerned  in  excess  of  the  reference  quantity,  by  way  of  an  advance  on  the  producer’s
contribution, in accordance with detailed rules laid down by the Member State.

Article 11
Levy on sales

In the case of sales, each producer's contribution to payment of the levy shall be established
by  decision  of  the  Member  State,  after any  unused reference  quantities for deliveries  have
been  re-allocated  or  not,  at  the  appropriate  territorial  level  or,  where  applicable,  through
approved producer organisations.

Where not all the components of the milk are marketed, the Member States shall  establish
the  levy  base  from  the  total  quantity  of  milk  used  by  applying  coefficients  fixed  in
accordance with the procedure laid down in Article 21(2).

In the case of sales directly to consumers the fat content shall not be taken into account for
the purpose of calculating the levy. In other cases, where the actual fat content is higher than
the  producer's  representative  fat  content,  the  quantities  transferred  shall  be  increased  by
applying coefficients and on terms to be laid down in accordance with Article 21(2).

Chapter 4
Administering the levy

Article 12
Amounts paid in excess or unpaid

1.

Where  the  levy  is  found  to  be  payable  and  the  contribution  collected  from  producers  is
greater than that levy, the Member State may

(a)

(b)

use partially or totally the excess to finance the measures referred to in Article 17(1),
point (a), and/or

redistribute  it  partially  or  totally  to  producers  who  fall  within  priority  categories
established by the Member State on the basis of objective criteria to be laid down in
accordance with the  procedure  laid  down  in  Article 21(2) or  who are  affected  by  an
exceptional  situation  resulting  from  a  national  rule  unconnected  with  the  present
scheme.

2.

3.

Where it is established that no levy is payable, any advances collected by purchasers or the
Member  State  shall  be  reimbursed  no  later  than  the  end  of  the  following  twelve-month
period.

Where  a  purchaser  fails  to  collect  from  a  producer  the  contribution  to  the  payment  of  the
levy, the Member State shall collect unpaid amounts directly from the producer.

140

1.

2.

1.

2.

3.

4.

1.

2.

Article 13
National reserves

Each Member State shall set up a national reserve as part of the quantities fixed in Annex I,
in  particular  with  a  view  to  making  the  allocations  provided  for  in  Article 6.  The  national
reserve  may  be  replenished,  inter  alia,  by  deducting  quantities  from  reference  quantities
transferred under Article 16 or Article 17 or by making an across-the-board reduction in all
individual reference quantities.

Any additional reference quantity allocated to a Member State shall automatically be placed
in the national reserve.

Article 14
Cases of inactivity

When a natural or legal person, holding individual reference quantities, does no longer meet
the conditions referred to in Article 4(c) during a twelve-month period, these quantities shall
revert to the national reserve no later than 1 April of the following calendar year, except in
case he resumes marketing no later than that date.

Where the person or entity concerned resumes marketing no later than the end of the second
twelve-month period following withdrawal of those quantities, that person shall be granted a
reference  quantity  from  the  national  reserve  in  accordance  with  Article  5(1)  no  later  than
1 April following the date of application.

Where producers do not use at least 70% of their individual reference quantity during at least
one twelve-month period by marketing milk or milk products, Member States may decide in
compliance with the general principles of Community law:

(a)

(b)

whether and on what conditions all or part of the unused reference quantity shall revert
to the national reserve,

on  what  conditions  a  reference  quantity  shall  be  re-allocated  to  the  producer
concerned.

However, paragraphs 1 and 3 shall not apply in cases of force majeure and in duly justified
cases  affecting  temporarily  the  production  capacity  of  the  producers  concerned  and
recognised by the competent authority.

Article 15
Temporary transfers

By  the  end  of  each  twelve-month  period,  Member  States  shall  authorise,  for  the  period
concerned,  any  temporary  transfers  of  part  of  individual  reference  quantities  which  the
producers who are entitled thereto do not intend to use.

Member States may regulate transfer operations according to the categories of producers or
dairy production structures concerned, may limit them to the level of the purchaser or within
regions and may determine to what extent the transferor can repeat transfer operation.

Any Member State may decide not to implement paragraph 1 on the basis of one or both of
the following criteria:

(a)

the need to facilitate structural changes and adjustments,

141

1.

2.

3.

4.

5.

1.

(b)

overriding administrative needs.

Article 16
Permanent transfers

The  individual  reference  quantities  shall  be  transferred  with  the  holding  when  it  is  sold,
leased  or  transferred  by  actual  or  anticipated  inheritance  to  the  producer  taking  it  over  in
accordance with detailed rules to be determined by the Member States, taking account of the
areas  used  for  dairy  production  or  other  objective  criteria  and,  where  applicable,  of  any
agreement between the parties.

Where  land  is  transferred  to  the  public  authorities  and/or  for  use  in  the  public  interest,  or
where the transfer is carried out for non-agricultural purposes,  Member  States shall ensure
that the necessary measures are taken to protect the legitimate interests of the parties, and in
particular that producers giving up such land are in a position to continue milk production if
they so wish.

Where  there  is  no  agreement  between  the  parties,  in  the  case  of  tenancies  due  to  expire
without  any  possibility  of  renewal  on  similar  terms,  or  in  situations  involving  comparable
legal effects, the individual reference quantities in question shall be transferred in whole or
in  part  to  the  producer  taking  them  over,  in  accordance  with  provisions  adopted  or  to  be
adopted by the Member States, taking account of the legitimate interests of the parties.

Member  States  may  provide  for  mutually  agreed  transfers  of  reference  quantities,  either
directly  between  producers  or  through  transactions  organised  at  the  initiative  of  the
competent authorities.

When transfers are made which fall under paragraphs 1 to 4, the Member States shall retain
part  of  the  transferred  quantity  for  the  national  reserve;  that  part  may  vary  depending  on
circumstances and according to objective criteria.

Article 17
Special transfer measures

With  a  view  to  successfully  restructuring  milk  production  or  improving  the  environment,
Member  States  may,  in  accordance  with  detailed  rules  which  they  shall  lay  down  taking
account of the legitimate interests of the parties concerned:

(a)

(b)

(c)

(d)

grant compensation in one or more annual instalments to producers who undertake to
abandon  permanently  all  or  part  of  their  milk  production  and  place  the  reference
quantities thus released in the national reserve;

determine  on  the  basis  of  objective  criteria  the  conditions  on  which  producers  may
obtain,  in  return  for  payment,  at  the  beginning  of  a  twelve-month  period,  the  re-
allocation  by  the  competent  authority  or  a  body  designated  by  that  authority  of
reference  quantities  released  definitively  at  the  end  of  the  preceding  twelve-month
period  by  other  producers  in  return  for  compensation  in  one  or  more  annual
instalments equal to the above-mentioned payment;

provide, in the case of land transferred with a view to improving the environment, for
the individual reference quantity concerned to be allocated to a producer giving up the
land but wishing to continue milk production;

determine,  on  the  basis  of  objective  criteria,  the  regions  or  collection  areas  within
which  the  permanent  transfer  of  reference  quantities  without  transfer  of  the

142

corresponding  land  is  authorised,  with  the  aim  of  improving  the  structure  of  milk
production;

(e)

authorise,  upon  application  by  a  producer  to  the  competent  authority  or  a  body
designated  by  that  authority,  the  definitive  transfer  of  reference  quantities  without
transfer  of  the  corresponding  land,  or  vice  versa,  with  the  aim  of  improving  the
structure of milk production at the level of the holding or to allow for extensification
of production;

(f)

determine the conditions on which additional quantities made available to the Member
State are to be allocated.

The  provisions  of  paragraph  1  may  be  implemented  at  national  level,  at  the  appropriate
territorial level or in specified collection areas.

No special transfer measure other than those referred to in paragraph 1 shall be allowed.

2.

3.

Article 18
Aid for the acquisition of reference quantities

No  financial  assistance  may  be  granted  by  any  public  authority  whatsoever  to  parties  acquiring
reference quantities by sale, transfer or allocation under this Regulation.

Article 19
Approval

Status as a seller or purchaser shall be subject to prior approval by the Member State in accordance
with criteria to be laid down in accordance with Article 21(2). The same shall apply, where applicable,
to producer organisations as referred to in Article 11(1).

Chapter 5
Transitional and final provisions

Article 20
Application of the levy

The levy shall be considered as intervention to stabilise agricultural markets  and  shall  be applied to
financing expenditure in the milk sector.

Article 21
Management Committee

1.

2.

3.

The  Commission  shall  be  assisted  by  the  Management  Committee  for  Milk  and  Milk
Products set up by Article 41 of Regulation (EC) No 1255/1999.

Where reference is made to this paragraph, Articles 4 and 7 of Decision 1999/468/EC shall
apply, subject to Article 8 of that Decision.

The period provided for in Article 4(3) of Decision 1999/468/EC shall be one month.

143

Article 22
Repeal

Regulation (EEC) No 3950/92 is hereby repealed as from 31 March 2004.

References to the repealed Regulation shall be construed as references to this Regulation and should
be read in accordance with the correlation table in Annex III.

Article 23
Transitional measures

Any  transitional  measures  necessary  to  facilitate  the  implementation  of  the  changes  to  the  scheme
provided  for  in  this  Regulation  shall  be  adopted  in  accordance  with  the  procedure  laid  down  in
Article 21(2).

Article 24
Entry into force

This Regulation shall enter into force on the third day following its publication in the Official Journal
of the European Communities.

It shall apply from 1 April 2004.

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

Done at Brussels,

For the Council
The President

144

ANNEX I

Reference quantities

(a)

Period 2004/05

Member State

Quantities (tonnes)

Belgium

Denmark

Germany

Greece

Spain

France
Ireland

Italy

Luxembourg

Netherlands

Austria

Portugal

Finland

Sweden

United Kingdom

3 326 983.000

4 477 625.000

28 004 140.000

700 513.000

6 116 950.000

24 356 977.000
5 395 764.000

10 530 060.000

270 394.000

11 130 065.000

2 763 148.000

1 879 823.000

2 419 026.324

3 319 515.000

14 682 697.000

(b)

Period 2005/06

Member State

Quantities (tonnes)

Belgium

Denmark

Germany

Greece

Spain

France

Ireland

Italy

Luxembourg

Netherlands

Austria

Portugal

Finland

Sweden

United Kingdom

3 343 535.000

4 499 902.000

28 143 464.000

700 513.000

6 116 950.000

24 478 156.000

5 395 764.000

10 530 060.000

271 739.000

11 185 438.000

2 776 895.000

1 889 185.000

2 431 049.324

3 336 030.000

14 755 647.000

145

(c)

Period 2006/07

Member State

Quantities (tonnes)

Belgium

Denmark

Germany

Greece

Spain

France

Ireland

Italy

Luxembourg
Netherlands

Austria

Portugal

Finland

Sweden

United Kingdom

3 360 087.000

4 522 178.000

28 282 788.000

700 513.000

6 116 950.000

24 599 335.000

5 395 764.000

10 530 060.000

273 084.000
11 240 812.000

2 790 642.000

1 898 548.000

2 443 071.324

3 352 545.000

14 828 597.000

(d)

Period 2007/08

Member State

Quantities (tonnes)

Belgium

Denmark

Germany

Greece

Spain

France

Ireland

Italy

Luxembourg

Netherlands

Austria

Portugal

Finland

Sweden

United Kingdom

3 393 687.870

4 567 399.780

28 565 615.880

707 518.130

6 178 119.500

24 845 328.350

5 449 721.640

10 635 360.600

275 814.840

11 353 220.120

2 818 548.420

1 917 533.480

2 467 502.037

3 386 070.450

14 976 882.970

146

(d)

Periods 2008/09 to 2014/15

Member State

Quantities (tonnes)

Belgium

Denmark

Germany

Greece

Spain

France

Ireland

Italy

Luxembourg
Netherlands

Austria

Portugal

Finland

Sweden

United Kingdom

3 427 288.740

4 612 621.560

28 848 443.760

714 523.260

6 239 289.000

25 091 321.700

5 503 679.280

10 740 661.200

278 545.680
11 465 628.240

2 846 454.840

1 936 518.960

2 491 932.750

3 419 595.900

15 125 168.940

147

ANNEX II

Reference fat content

Member State

Reference fat content
(g/kg)

Belgium

Denmark

Germany

Greece

Spain

France
Ireland

Italy

Luxembourg

Netherlands

Austria

Portugal

Finland

Sweden

United Kingdom

36.91

43.68

40.11

36.10

36.37

39.48
35.81

36.88

39.17

42.36

40.30

37.30

43.40

43.40

39.70

148

ANNEX III

Correlation table

Present regulation

Regulation (EEC) No 3950/92

Art. 1 subparagraph 1
subparagraph 2

Art. 2

Art. 3

Art. 4

Art. 5 (1)
(2)
(3)

Art. 6

Art. 7

Art. 8

Art. 9 (1) and (2)
(3)

Art. 10(1)
(2)
(3)
(4)

Art. 11(1)
(2)
(3)

Art. 12(1)
(2)
(3)

Art. 13

Art. 14

Art. 15

Art. 16

Art. 17

Art. 18

Art. 19

Art. 20

Art. 21

Art. 22

Annex I

Annex II

Annex III

Art. 1 subparagraph 1
Art. 3 (2)

Art. 1 subparagraph 2

Art. 2 (1) subparagraph 1

Art. 9

-
-
Art. 4 (2)

-

-

-

-
Art. 2 (2)

Art. 2 (2) subparagraph 1
Art. 2 (2) subparagraph 2
–
Art. 2 (2) subparagraph 3

Art. 2 (1)
-
-

Art. 2 (4)
-
-

Art. 5 subparagraph 1

Art. 5 subparagraphs 2 and 3

Art. 6

Art. 7

Art. 8

-

-

Art. 10

Art. 11

Art. 12

Annex

-

-

149

1.

2.

3.
4.

5.

5.0

5.1

ANNEX

FINANCIAL STATEMENT

Council Regulation establishing common rules for direct support schemes for producers of certain crops
Council Regulation on the common organisation of the market of cereals
Council Regulation on the common organisation of the market of rice
Council Regulation on the common organisation of the market of dried fodder
Council Regulation on the common organisation of the market in milk and milk products
Council Regulation on the establishing of a levy in the milk and milk products sector

BUDGET CHAPTERS :
B1-10 to B1-33 (2003 – budgetary nomenclature)
TITLE:
-
-
-
-
-
-
LEGAL BASIS: Art. 36 and 37 of the Treaty
AIMS:
In the framework of the mid-term-review examination of the agricultural policy agreed in Agenda 2000,
proposal of a number of adjustments aiming to :
-
-
-
FINANCIAL IMPLICATIONS

enhance the competitiveness of EU agriculture
promote a more market oriented sustainable agriculture
provide a better balance of support and strengthen rural development.

BUDGET YEAR
2004
(EUR million)

BUDGET YEAR
2005
(EUR million)

BUDGET YEAR
2006
(EUR million)

EXPENDITURE CHARGED TO THE EC
BUDGET

EU-15
CC-10
--------
Total

- 97
-
--------
- 97

REVENUE
-

OWN RESOURCES OF THE EC

5.0.1 ESTIMATED EXPENDITURE

EU-15
CC-10
---------
Total (a)

Modulation degressivity impact

Total (b)

5.1.1 ESTIMATED REVENUE
5.2 METHOD OF CALCULATION:

- 28
+ 15
----------
- 13

-

2008

2009

- 566
– 45
--------
- 611
- 751
--------
- 1 362
-

+ 64
+ 37
--------
+ 101
- 2 030
----------
- 1 929
-

-
2007

- 470
– 33
--------
- 503
- 228
---------
- 731
-

6.0

6.1

See annexes
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?

6.2 WILL A SUPPLEMENTARY BUDGET BE NECESSARY?
6.3 WILL APPROPRIATIONS NEED TO BE ENTERED IN FUTURE BUDGETS?
OBSERVATIONS:
(b) The  amounts  available  for  rural  development  are  228 Mio €  for  2007,  475  Mio €  for  2008,  741 Mio €  for

2009 and 988 Mio € for 2010.
- The proposal has no impact on administrative expenditure.
-

Impact analyses relative to the measures proposed have been established.

150

- 337
- 17
--------
- 354

-
2010

- 186
+ 88
-----------
- 98
- 2 420
-----------
- 2 518
-

YES / NO

YES / NO
YES / NO
YES / NO

. Production aid for dried fodder

243,3

144,1

104,1

64,1

24,0

I. Market measures 1

EU-15
1. Cereals

. Export refunds

. Public storage

-wheat
-barley
-rye
-other
-wheat
-barley
-rye
-other

. Production refunds for starch
. Premiums for potato starch
. Other 2
. Total cereals

2. Dried fodder

3. Rice

. Export refunds
. Public and private storage
. Other 3
. Total rice

4. Milk and milk products

. Export refunds

. Public storage

. Internal aids

. Private storage

-butter/butteroil
-skimmed milk powder
-cheese
-other milk products
-butter
-skimmed milk powder
-butter
-skimmed milk powder
-casein
- butter
- cheese

. Other 4
. Total milk and milk products

5. Beef and veal

. Export refunds

6a Total market measures

(1 + 2 + 3 + 4 + 5)

6b Promotion measures

ANNEX A - 1

ESTIMATES OF EXPENDITURE

A. WITH MTR PROPOSALS

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

MIO EUR

9,0
39,0
27,5
78,0
16,5
64,0
169,2
3,5
45,9
39,2
1,0
492,8

1,0
7,0
22,2
63,8
14,4
47,0
44,8

4,7
39,2
0,0
244,1

0,0
0,0
21,2
60,8
14,4
14,1
17,5

0,0
39,2
0,0
167,2

0,0
0,0
21,2
55,4
14,4
12,2
15,0

0,0
39,2
0,0
157,4

0,0
0,0
42,4
53,6
14,4
12,2
0,0

0,0
39,2
0,0
161,8

33,0
55,0
22,0
110,0

367,0
165,0
210,0
697,0
-32,0
-8,0
416,0
250,0
270,0
26,0
54,0
46,0
2 461

10,0
21,0
7,0
38,0

303,0
144,0
196,0
632,0
-60,0
-15,0
310,0
220,0
231,0
43,0
54,0
43,0
2 101

0,0
5,0
2,0
7,0

223,0
120,0
183,0
551,0
-24,0
2,0
191,0
183,0
187,0
43,0
54,0
41,0
1 754

0,0
5,0
2,0
7,0

191,0
108,0
170,0
469,0
-22,0
7,0
71,0
122,0
143,0
43,0
54,0
37,0
1 393

0,0
5,0
2,0
7,0

150,0
82,0
157,0
387,0
-20,0
10,0
2,0
92,0
99,0
43,0
54,0
34,0
1 090

0,0
0,0
42,4
54,6
13,8
12,5
0,0

0,0
39,2
0,0
162,5

0

0,0
5,0
2,0
7,0

119,0
68,0
149,0
315,0
1,0
10,0
0,0
67,0
61,0
43,0
54,0
32,0
919

0,0
0,0
42,4
53,6
13,8
15,7
0,0

0,0
39,2
0,0
164,7

0

0,0
5,0
2,0
7,0

115,0
65,0
146,0
302,0
-2,0
10,0
0,0
61,0
55,0
23,0
54,0
32,0
861

0,0
0,0
42,4
53,6
13,8
15,7
0,0

0,0
39,2
0,0
164,7

0

0,0
5,0
2,0
7,0

115,0
65,0
146,0
302,0
-2,0
10,0
0,0
61,0
55,0
23,0
54,0
32,0
861

0,0
0,0
42,4
53,6
13,8
15,7
0,0

0,0
39,2
0,0
164,7

0

0,0
5,0
2,0
7,0

115,0
65,0
146,0
302,0
-2,0
10,0
0,0
61,0
55,0
23,0
54,0
32,0
861

0,0
0,0
42,4
53,6
13,8
15,7
0,0

0,0
39,2
0,0
164,7

0

0,0
5,0
2,0
7,0

115,0
65,0
146,0
302,0
-2,0
10,0
0,0
61,0
55,0
23,0
54,0
32,0
861

479,3

467,9

431,8

411,0

393,6

377,1

377,1

377,1

377,1

377,1

3 786,4

2 995,1

2 464,1

2 032,5

1 676,4

1 465,6

1 409,8

1 409,8

1 409,8

1 409,8

67,0

67,0

49,0

34,0

26,0

24,0

24,0

24,0

24,0

24,0

6 Total market and promotion measures

3 853,4

3 062,1

2 513,1

2 066,5

1 702,4

1 489,6

1 433,8

1 433,8

1 433,8

1 433,8

EUR-15 (6a+ 6b)

7. Market measures CC-10

of which - cereals

- dried fodder
- rice
- milk and milk prod.
- beef and veal exp. ref.

216,3
37,6
2,8
p.m.
154,4
21,5

480,0
97,0
7,0
p.m.
321,0
55,0

490,0
87,0
7,0
p.m.
341,0
55,0

458,0
85,0
7,0
p.m.
311,0
55,0

426,0
85,0
7,0
p.m.
279,0
55,0

394,0
85,0
7,0
p.m.
247,0
55,0

394,0
85,0
7,0
p.m.
247,0
55,0

394,0
85,0
7,0
p.m.
247,0
55,0

394,0
85,0
7,0
p.m.
247,0
55,0

394,0
85,0
7,0
p.m.
247,0
55,0

8.  Market 
EU-25 (6 + 7)

and 

promotion  measures

4 069,7

3 542,1

3 003,1

2 524,5

2 128,4

1 883,6

1 827,8

1 827,8

1 827,8

1 827,8

1

2

3

4

Cereals, dried fodder, rice, milk and milk products, beef and veal export refunds
Food aid
Food aid, aid for rice to Réunion
Food aid, school milk, milk levy.

151

II. Direct aids to producers 1

EU-15
1. Single farm payments

2a. Direct aids

. basic cop area payments
. drying aid supplementary payment
. durum wheat supplementary payment
. grain legumes aid
. production aid for seeds
. suckler cow premium
. additional suckler cow premium
. special beef premium
. beef slaughter premium
. beef extensification premium
. additional payments to beef producers
. sheep and goat premium
. sheep and goat suppl. premium
. add. paym. sheep + goat producers
. dairy premium
. additional payments to milk producers
. payments to starch potato prod. 50%
. area aid for rice
. dried fodder income payments
. additional beef and sheep premiums
 in remote islands and regions

ANNEX A – 2

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

MIO EUR

28 025,6 28 901,0 29 780,8 30 760,0 31 739,3 31 739,3 31 739,3 31 739,3 31 739,3

ORIGIN OF SINGLE FARM PAYMENTS

99,9

67,9
1 109,1
72,4
110,0

16 093 (16471,0) (16471,0) (16471,0) (16471,0) (16471,0) (16471,0) (16471,0) (16471,0) (16471,0)
(67,5)
(777,2)
(72,4)
(106,4)
(2012,5)
(99,4)
(1911,1)
(1525,8)
(1013,5)
(461,4)
(1378,6)
(393,6)
(72,0)
(3377,1)
(1518,0)
(96,0)
(247,4)
(132,7)
(5,7)

(67,5)
(979,3)
(72,4)
(106,4)
2 136,8 (2012,5)
(99,4)
1 925,8 (1911,1)
2 178,8 (1525,8)
1 023,0 (1013,5)
(461,4)
1 435,3 (1378,6)
(393,6)
(72,0)
(675,7)
(303,6)
(96,0)
(247,4)
(132,7)
(5,7)

(67,5)
(777,2)
(72,4)
(106,4)
(2012,5)
(99,4)
(1911,1)
(1525,8)
(1013,5)
(461,4)
(1378,6)
(393,6)
(72,0)
(2701,4)
(1214,4)
(96,0)
(247,4)
(132,7)
(5,7)

(67,5)
(876,7)
(72,4)
(106,4)
(2012,5)
(99,4)
(1911,1)
(1525,8)
(1013,5)
(461,4)
(1378,6)
(393,6)
(72,0)
(1350,1)
(607,2)
(96,0)
(247,4)
(132,7)
(5,7)

(67,5)
(777,2)
(72,4)
(106,4)
(2012,5)
(99,4)
(1911,1)
(1525,8)
(1013,5)
(461,4)
(1378,6)
(393,6)
(72,0)
(2025,8)
(910,8)
(96,0)
(247,4)
(132,7)
(5,7)

(67,5)
(777,2)
(72,4)
(106,4)
(2012,5)
(99,4)
(1911,1)
(1525,8)
(1013,5)
(461,4)
(1378,6)
(393,6)
(72,0)
(3377,1)
(1518,0)
(96,0)
(247,4)
(132,7)
(5,7)

(67,5)
(777,2)
(72,4)
(106,4)
(2012,5)
(99,4)
(1911,1)
(1525,8)
(1013,5)
(461,4)
(1378,6)
(393,6)
(72,0)
(3377,1)
(1518,0)
(96,0)
(247,4)
(132,7)
(5,7)

(67,5)
(777,2)
(72,4)
(106,4)
(2012,5)
(99,4)
(1911,1)
(1525,8)
(1013,5)
(461,4)
(1378,6)
(393,6)
(72,0)
(3377,1)
(1518,0)
(96,0)
(247,4)
(132,7)
(5,7)

(67,5)
(777,2)
(72,4)
(106,4)
(2012,5)
(99,4)
(1911,1)
(1525,8)
(1013,5)
(461,4)
(1378,6)
(393,6)
(72,0)
(3377,1)
(1518,0)
(96,0)
(247,4)
(132,7)
(5,7)

194,8
128,9

402,7
72,0

493,0

5,8

. total direct aids (a)

2b. Direct aids

. protein area supplementary aid
. area aid for quality durum wheat
. area aid for rice
. area aid for nuts
. area aid for energy crops
. payments to starch potato producers

27 549

67,4

. total direct aids (b)

67,4

77,8
127,6
182,3
80,0
67,5
97,4

632,6

77,8
127,6
182,3
80,0
67,5
97,4

632,6

77,8
127,6
182,3
80,0
67,5
97,4

632,6

77,8
127,6
182,3
80,0
67,5
97,4

632,6

77,8
127,6
182,3
80,0
67,5
97,4

632,6

77,8
127,6
182,3
80,0
67,5
97,4

632,6

77,8
127,6
182,3
80,0
67,5
97,4

632,6

77,8
127,6
182,3
80,0
67,5
97,4

632,6

77,8
127,6
182,3
80,0
67,5
97,4

632,6

3. Total (1+2a+2b) EU-15

27 616,1 28 658,2 29 533,6 30 413,4 31 392,6 32 371,9 32 371,9 32 371,9 32 371,9 32 371,9

4. Total direct aids CC-10

1 450,0

1 786,0

2 142,0

2 522,0

3 232,0

3 879,0

4 525,0

5 171,0

5 819,0

5. Total direct aids EU-25 (3 + 4)

27 616,1 30 108,2 31 319,6 32 555,4 33 914,6 35 603,9 36 250,9 36 896,9 37 542,9 38 190,9

III. TOTAL (I + II)

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

MIO EUR

Total (I + II)

EU-15

31 469,5 31 720,3 32 046,7 32 479,9 33 095,0 33 861,5 33 805,7 33 805,7 33 805,7 33 805,7

Total (I + II)

CC-10

216,3

1 930,0

2 276,0

2 600,0

2 948,0

3 626,0

4 273,0

4 919,0

5 565,0

6 213,0

Total (I + II)

EU-25

31 685,8 33 650,3 34 322,7 35 079,9 36 043,0 37 487,5 38 078,7 38 724,7 39 370,7 40 018,7

1

Measures amended, abolished or introduced by the MTR proposals.

152

I. Market measures 1

EU-15
1. Cereals

. Export refunds

. Public storage

-wheat
-barley
-rye
-other
-wheat
-barley
-rye
-other

. Production refunds for starch
. Premiums for potato starch
. Other 2

. Total cereals

2. Dried fodder

ANNEX B – 1

ESTIMATES OF EXPENDITURE

B. STATUS QUO

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

9,0
38,0
10,0
78,0
17,3
64,6
189,9
5,5
45,9
39,2
1,0

498,4

10,0
43,0
26,0
86,0
17,5
49,0
189,5

48,2
39,2
1,0

10,0
42,0
24,0
89,0
16,2
42,7
193,7

48,2
39,2
1,0

10,0
46,0
24,0
83,0
16,2
21,3
205,5

35,4
39,2
1,0

10,0
48,0
20,0
81,0
15,7
17,4
217,5

33,9
39,2
1,0

11,0
46,0
17,0
82,0
16,8
28,2
240,7

33,9
39,2
1,0

11,0
47,0
13,0
81,0
15,5
25,2
255,7

33,9
39,2
1,0

11,0
47,0
13,0
81,0
15,5
25,2
255,7

33,9
39,2
1,0

11,0
47,0
13,0
81,0
15,5
25,2
255,7

33,9
39,2
1,0

11,0
47,0
13,0
81,0
15,5
25,2
255,7

33,9
39,2
1,0

509,4

506,0

481,6

483,7

515,8

522,5

522,5

522,5

522,5

. Production aid for dried fodder

316,8

316,8

316,8

316,8

316,8

316,8

316,8

316,8

316,8

316,8

3. Rice

. Export refunds
. Public and private storage
. Other 3

. Total rice

4. Milk and milk products

. Export refunds

. Public storage

. Internal aids

. Private storage

. Other 4

- butter/butteroil
- skimmed milk powder
- cheese
- other milk products
- butter
- skimmed milk powder
- butter
- skimmed milk powder
- casein
- butter
- cheese

. Total milk and milk products

5. Beef and veal
. Export refunds

6a Total market measures

(1 + 2 + 3 + 4 + 5)

6b Promotion measures

33,0
55,0
22,0

34,0
62,0
22,0

34,0
74,0
22,0

34,0
84,0
22,0

110,0

118,0

130,0

140,0

364,0
151,0
210,0
697,0
-24,0
-7,0
430,0
256,0
275,0
26,0
54,0
47,0

2479

364,0
147,0
210,0
697,0
-19,0
-14,0
419,0
248,0
264,0
26,0
54,0
47,0

2443

327,0
109,0
199,0
630,0
-22,0
-8,0
345,0
204,0
209,0
36,0
54,0
44,0

2127

290,0
83,0
183,0
560,0
-40,0
-6,0
260,0
126,0
143,0
36,0
54,0
41,0

1730

34,0
134,0
22,0

190,0

255,0
57,0
175,0
474,0
-51,0
0,0
185,0
91,0
94,0
36,0
54,0
39,0

1409

34,0
344,0
22,0

400,0

228,0
52,0
174,0
460,0
-62,0
0,0
175,0
82,0
77,0
25,0
54,0
39,0

1304

34,0
507,0
22,0

563,0

228,0
52,0
174,0
460,0
-38,0
0,0
175,0
82,0
77,0
25,0
54,0
39,0

1328

34,0
507,0
22,0

563,0

228,0
52,0
174,0
460,0
-38,0
0,0
175,0
82,0
77,0
25,0
54,0
39,0

1328

34,0
507,0
22,0

563,0

228,0
52,0
174,0
460,0
-38,0
0,0
175,0
82,0
77,0
25,0
54,0
39,0

1328

34,0
507,0
22,0

563,0

228,0
52,0
174,0
460,0
-38,0
0,0
175,0
82,0
77,0
25,0
54,0
39,0

1328

479,3

467,9

431,8

431,8

431,8

431,8

431,8

431,8

431,8

431,8

3 883,5

3 855,1

3 511,6

3 100,2

2 831,3

2 968,4

3 162,1

3 162,1

3 162,1

3 162,1

67,0

67,0

67,0

67,0

67,0

67,0

67,0

67,0

67,0

67,0

6 Total mparket and promotion measures

3 950,5

3 922,1

3 578,6

3 167,2

2 898,3

3 035,4

3 229,1

3 229,1

3 229,1

3 229,1

EUR-15 (6a+6b)

7. Market measures

CC-10

- cereals
- dried fodder
- rice
- milk and milk prod.
- beef and veal exp. Ref.

216,3
37,6
2,8
p.m.
154,4
21,5

551,0
97,0
7,0
p.m.
392,0
55,0

611,0
97,0
7,0
p.m.
452,0
55,0

611,0
97,0
7,0
p.m.
452,0
55,0

611,0
97,0
7,0
p.m.
452,0
55,0

611,0
97,0
7,0
p.m.
452,0
55,0

611,0
97,0
7,0
p.m.
452,0
55,0

611,0
97,0
7,0
p.m.
452,0
55,0

611,0
97,0
7,0
p.m.
452,0
55,0

611,0
97,0
7,0
p.m.
452,0
55,0

8. Market and promotion measures

4 166,8

4 473,1

4 189,6

3 778,2

3 509,3

3 646,4

3 840,1

3 840,1

3 840,1

3 840,1

EU-25 (6 + 7)

1

2

3

4

Cereals, dried fodder, rice, milk and milk products, beef and veal export refunds
Food aid
Food aid, aid for rice to Réunion
Food aid, school milk, milk levy.

153

II. Direct aids to producers 1

EU-15
1. Single farm payments

2a. Direct aids

. basic crop area payments
. drying aid supplementary payment
. durum wheat supplementary payment
. grain legumes aid
. production aid for seeds
. suckler cow premium
. additional suckler cow premium
. special beef premium
. beef slaughter premium
. beef extensification premium
. additional payments to beef producers
. sheep and goat premium
. sheep and goat suppl. Premium
. add. paym. sheep + goat producers
. dairy premium
. additional payments to milk producers
. payments to starch potato producers
. area aid for rice
. dried fodder income payments
. additional beef and sheep premiums
 in remote islands and regions

ANNEX B – 2

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

16 093
67,9
1 109,1
72,4
110,0
2 136,8
99,9
1 925,8
2 178,8
1 023,0
493,0
1 435,3
402,7
72,0

194,8
128,9

99,9

72,4
110,0

16 093
67,9

16 093
67,9
1 109,1 1 109,1
72,4
110,0
2 136,8 2 136,8
99,9
2 090,3 2 090,3
2 178,8 2 178,8
1 068,0 1 068,0
493,0
1 435,3 1 435,3
402,7
72,0
675,7
303,6
194,8
128,9

402,7
72,0

194,8
128,9

493,0

16 093
67,9
1 109,1
72,4
110,0
2 136,8
99,9
2 090,3
2 178,8
1 068,0
493,0
1 435,3
402,7
72,0
1 350,1
607,2
194,8
128,9

16 093
67,9
1 109,1
72,4
110,0
2 136,8
99,9
2 090,3
2 178,8
1 068,0
493,0
1 435,3
402,7
72,0
2 025,8
910,8
194,8
128,9

16 093
67,9
1 109,1
72,4
110,0
2 136,8
99,9
2 090,3
2 178,8
1 068,0
493,0
1 435,3
402,7
72,0
2 025,8
910,8
194,8
128,9

16 093
67,9
1 109,1
72,4
110,0
2 136,8
99,9
2 090,3
2 178,8
1068,0
493,0
1 435,3
402,7
72,0
2 025,8
910,8
194,8
128,9

16 093
67,9
1 109,1
72,4
110,0
2 136,8
99,9
2 090,3
2 178,8
1 068,0
493,0
1 435,3
402,7
72,0
2 025,8
910,8
194,8
128,9

99,9

72,4
110,0

16 093
67,9

16 093
67,9
1 109,1 1 109,1
72,4
110,0
2 136,8 2 136,8
99,9
2 090,3 2 090,3
2 178,8 2 178,8
1 068,0 1 068,0
493,0
1 435,3 1 435,3
402,7
72,0
2 025,8 2 025,8
910,8
194,8
128,9

910,8
194,8
128,9

402,7
72,0

493,0

5,8

5,9

5,9

5,9

5,9

5,9

5,9

5,9

5,9

5,9

. total direct aids (a)

27 549 27 758,3 28 737,6 29 715,6 30 694,9 30 694,9 30 694,9 30 694,9 30 694,9 30 694,9

2b. Direct aids

. protein area supplementary aid
. area aid for quality durum wheat
. area aid for rice
. area aid for nuts
. area aid for energy crops
. payments to starch potato producers

67,4

67,4

67,4

67,4

67,4

67,4

67,4

67,4

67,4

67,4

. total direct aids (b)

67,4

67,4

67,4

67,4

67,4

67,4

67,4

67,4

67,4

67,4

3. Total direct aids (1+2a+2b) EU-15

27 616,1 27 825,7 28 805,0 29 783,0 30 762,3 30 762,3 30 762,3 30 762,3 30 762,3 30 762,3

4. Total direct aids

CC-10

1 364,0 1 682,0

2 022,0

2 382,0

2 978,0

3 574,0

4 169,0

4 765,0 5 361,0

5. Total direct aids

EU-25 (3+4)

27 616,1 29 189,7 30 487,0 31 805,0 33 144,3 33 740,3 34 336,3 34 931,3 35 527,3 36 123,3

III. TOTAL (I + II)

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

MIO EUR

Total (I + II)

EU-15

31 566,6 31 747,8 32 383,6 32 950,2 33 660,6 33 797,7 33 991,4 33 991,4 33 991,4 33 991,4

Total (I + II)

CC-10

216,3

1 915,0 2 293,0

2 633,0

2 993,0

3 589,0

4 185,0

4 780,0

5 376,0 5 972,0

Total (I + II)

EU-25

31 782,9 33 662,8 34 676,6 35 583,2 36 653,6 37 386,7 38 176,4 38 771,4 39 367,4 39 963,4

154

I. Market measures 1

EU-15
1. Cereals

. Export refunds

. Public storage

- wheat
- barley
- rye
- other
- wheat
- barley
- rye
- other

. Production refunds for starch
. Premiums for potato starch
. Other 2
. Total cereals
2. Dried fodder

ANNEX C - 1

ESTIMATES OF EXPENDITURE

C. FINANCIAL IMPACT

2004

2005

2006

2007

2008

2009

2010

2011

2012

MIO EUR
2013

0,0
1,0
17,5
0,0
-0,8
-0,6
-20,7
-2,0
0,0
0,0
0,0
-5,6

-9,0
-36,0
-3,8
-22,2
-3,1
-2,0
-144,7
0,0
-43,5
0,0
-1,0
-265,3

-10,0
-42,0
-2,8
-28,2
-1,8
-28,6
-176,2
0,0
-48,2
0,0
-1,0
-338,8

-10,0
-46,0
-2,8
-27,6
-1,8
-9,1
-190,5
0,0
-35,4
0,0
-1,0
-324,2

-10,0
-48,0
22,4
-27,4
-1,3
-5,2
-217,5
0,0
-33,9
0,0
-1,0
-321,9

-11,0
-46,0
25,4
-27,4
-3,0
-15,7
-240,7
0,0
-33,9
0,0
-1,0
-353,3

-11,0
-47,0
29,4
-27,4
-1,7
-9,5
-255,7
0,0
-33,9
0,0
-1,0
-357,8

-11,0
-47,0
29,4
-27,4
-1,7
-9,5
-255,7
0,0
-33,9
0,0
-1,0
-357,8

-11,0
-47,0
29,4
-27,4
-1,7
-9,5
-255,7
0,0
-33,9
0,0
-1,0
-357,8

-11,0
-47,0
29,4
-27,4
-1,7
-9,5
-255,7
0,0
-33,9
0,0
-1,0
-357,8

. Production aid for dried fodder

-73,54

-172,67

-212,71

-252,74

-292,78

-316,8

-316,8

-316,8

-316,8

-316,8

3. Rice

. Export refunds
. Public and private storage
. Other 3
. Total rice

4. Milk and milk products

. Public storage

. Export refunds

- butter/butteroil
- skimmed milk powder
- cheese
- other milk products
- butter
- skimmed milk powder
- butter
- skimmed milk powder
- casein
. Private storage - butter
- cheese

. Internal aids

. Other 4
. Total milk and milk products

5. Beef and veal

. Export refunds

6a Total market measures

(1 + 2 + 3 + 4 + 5)

6b Promotion measures

0,0
0,0
0,0
0,0

3
14
0
0
-8
-1
-14
-6
-5
0
0
-1
-18

0

-24,0
-41,0
-15,0
-80,0

-61
-3
-14
-65
-41
-1
-109
-28
-33
17
0
-4
-342

-34,0
-69,0
-20,0
-123,0

-34,0
-79,0
-20,0
-133,0

-34,0
-129,0
-20,0
-183,0

-34,0
-339,0
-20,0
-393,0

-34,0
-502,0
-20,0
-556,0

-34,0
-502,0
-20,0
-556,0

-34,0
-502,0
-20,0
-556,0

-34,0
-502,0
-20,0
-556,0

-104
11
-16
-79
-2
10
-154
-21
-22
7
0
-3
-373

-99
25
-13
-91
18
13
-189
-4
0
7
0
-4
-337

-105
25
-18
-87
31
10
-183
1
5
7
0
-5
-319

-109
16
-25
-145
63
10
-175
-15
-16
18
0
-7
-385

-113
13
-28
-158
36
10
-175
-21
-22
-2
0
-7
-467

-113
13
-28
-158
36
10
-175
-21
-22
-2
0
-7
-467

-113
13
-28
-158
36
10
-175
-21
-22
-2
0
-7
-467

-113
13
-28
-158
36
10
-175
-21
-22
-2
0
-7
-467

0

0

-20,8

-38,2

-54,7

-54,7

-54,7

-54,7

-54,7

-97,1

-860,0

-1 047,5 -1 067,7 -1 154,9 -1 502,8 -1 752,3 -1 752,3 -1 752,3 -1 752,3

0,0

0,0

-18,0

-33,0

-41,0

-43,0

-43,0

-43,0

-43,0

-43,0

6  Total  market  and  promotion  measures
EUR-15 (6a + 6b)

-97,1

-860,0

-1 065,5 -1 100,7 -1 195,9 -1 545,8 -1 795,3 -1 795,3 -1 795,3 -1 795,3

7. Market measures CC-10
- cereals
- dried fodder
- rice
- milk and milk prod.
- beef and veal exp. ref.

0,0
0,0
0,0
0,0
0,0
0,0

-71,0
0,0
0,0
0,0
-71,0
0,0

-121,0
-10,0
0,0
0,0
-111,0
0,0

-153,0
-12,0
0,0
0,0
-141,0
0,0

-185,0
-12,0
0,0
0,0
-173,0
0,0

-217,0
-12,0
0,0
0,0
-205,0
0,0

-217,0
-12,0
0,0
0,0
-205,0
0,0

-217,0
-12,0
0,0
0,0
-205,0
0,0

-217,0
-12,0
0,0
0,0
-205,0
0,0

-217,0
-12,0
0,0
0,0
-205,0
0,0

8.  Market  and  promotion  measures
EU-25 (6 + 7)

-97,1

-931,0

-1 186,5 -1 253,7 -1 380,9 -1 762,8 -2 012,3 -2 012,3 -2 012,3 -2 012,3

1

2

3

4

Cereals, dried fodder, rice, milk and milk products, beef and veal export refunds
Food aid
Food aid, aid for rice to Réunion
Food aid, school milk, milk levy.

155

II. Direct aids to producers 1

EU-15
1. Single farm payments
2a. Direct aids

. basic cop area payments
. drying aid supplementary payment
. durum wheat supplementary payment
. grain legumes aid
. production aid for seeds
. suckler cow premium
. additional suckler cow premium
. special beef premium
. beef slaughter premium
. beef extensification premium
. additional payments to beef producers
. sheep and goat premium
. sheep and goat suppl. premium
. add. paym. sheep + goat producers
. dairy premium
. additional payments to milk producers
. payments to starch potato producers
. area aid for rice
. dried fodder income payments
. additional beef and sheep premiums
 in remote islands and regions

. total direct aids (a)

2b. Direct aids

. protein area supplementary aid
. area aid for quality durum wheat
. area aid for rice
. area aid for nuts
. area aid for energy crops
. payments to starch potato producers

. total direct aids (b)

3. Total direct aids (1+2a+2b) EU-15

4. Total direct aids CC-10

5. Total direct aids EU-25 (3+4)

III. TOTAL (I + II)

ANNEX C – 2

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

0 28 025,6

28 901 29 780,8

30 760 31 739,3 31 739,3 31 739,3 31 739,3 31 739,3

-67,9

-67,9

-99,9

-67,9

-99,9

-99,9

-99,9

-67,9

-67,9

-67,9

-67,9

-72,4
-110,0

-72,4
-110,0

-72,4
-110,0

-72,4
-110,0

-72,4
-110,0

-72,4
-110,0

-72,4
-110,0

0 -16 092,5 -16 092,5 -16 092,5 -16 092,5 -16 092,5 -16 092,5 -16 092,5 -16 092,5 -16 092,5
0
-67,9
-67,9
-1 109,1 -1 109,1 -1 109,1 -1 109,1 -1 109,1 -1 109,1 -1 109,1 -1 109,1
0 -1 109,1
-72,4
-72,4
0
0
-110,0
-110,0
-2 136,8 -2 136,8 -2 136,8 -2 136,8 -2 136,8 -2 136,8 -2 136,8 -2 136,8
0 -2 136,8
0
-99,9
-99,9
-2 090,3 -2 090,3 -2 090,3 -2 090,3 -2 090,3 -2 090,3 -2 090,3 -2 090,3
0 -2 090,3
-2 178,8 -2 178,8 -2 178,8 -2 178,8 -2 178,8 -2 178,8 -2 178,8 -2 178,8
0 -2 178,8
-1 068,0 -1 068,0 -1 068,0 -1 068,0 -1 068,0 -1 068,0 -1 068,0 -1 068,0
0 -1 068,0
0
-493,0
-493,0
-1 435,3 -1 435,3 -1 435,3 -1 435,3 -1 435,3 -1 435,3 -1 435,3 -1 435,3
0 -1 435,3
-402,7
-402,7
0
-72,0
-72,0
0
-675,7 -1 350,1 -2 025,8 -2 025,8 -2 025,8 -2 025,8 -2 025,8 -2 025,8
0,0
0
-910,8
-303,6
0
0,0
-194,8
-194,8
-194,8
0
-128,9
-128,9
-128,9
0
0,0
0,0
0,0
0
-5,9
-5,9
-5,9
0

-910,8
-194,8
-128,9
0,0
-5,9

-910,8
-194,8
-128,9
0,0
-5,9

-607,2
-194,8
-128,9
0,0
-5,9

-910,8
-194,8
-128,9
0,0
-5,9

-910,8
-194,8
-128,9
0,0
-5,9

-910,8
-194,8
-128,9
0,0
-5,9

-402,7
-72,0

-402,7
-72,0

-402,7
-72,0

-402,7
-72,0

-402,7
-72,0

-402,7
-72,0

-402,7
-72,0

-493,0

-493,0

-493,0

-493,0

-493,0

-493,0

-493,0

-99,9

-99,9

-99,9

0 -27 758,3 -28 737,6 -29 715,6 -30 694,9 -30 694,9 -30 694,9 -30 694,9 -30 694,9 -30 694,9

0
0
0
0
0
0

0,0

0,0

0,0

0,0

10,4
127,6
182,3
80,0
67,5
97,4

565,2

10,4
127,6
182,3
80,0
67,5
97,4

565,2

10,4
127,6
182,3
80,0
67,5
97,4

565,2

10,4
127,6
182,3
80,0
67,5
97,4

565,2

10,4
127,6
182,3
80,0
67,5
97,4

565,2

10,4
127,6
182,3
80,0
67,5
97,4

565,2

10,4
127,6
182,3
80,0
67,5
97,4

565,2

10,4
127,6
182,3
80,0
67,5
97,4

565,2

10,4
127,6
182,3
80,0
67,5
97,4

565,2

832,5

728,6

630,4

630,3

1609,6

1609,6

1 609,6

1 609,6

1 609,6

86,0

104,0

120,0

140,0

254,0

305,0

356,0

406,0

458,0

918,5

832,6

750,4

770,3

1863,6

1914,6

1 965,6

2 015,6

2 067,6

2004

2005

2006

2007

2008

2009

2010

2011

2012

MIO EUR
2013

Total (I + II) EU-15

-97,1

-27,5

-336,9

-470,3

-565,6

63,8

-185,7

-185,7

-185,7

-185,7

Total (I + II) CC-10

0,0

15,0

-17,0

-33,0

-45,0

37,0

88,0

139,0

189,0

241,0

Total (I + II) EU-25

-97,1

-12,5

-353,9

-503,3

-610,6

100,8

-97,7

-46,7

3,3

55,3

1

Measures amended, abolished or introduced by the MTR proposals.

156

EU-25: Expenditure forecasts by sector for heading 1a - after MTR proposals

Mio EUR

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

28 026
4 380

32 406
8 933
41 339

1 450
853
2 303

33 856
9 786
43 642

44 474

832

28 901
4 384

33 285
8 460
41 746

1 786
863
2 649

35 071
9 323
44 395

45 306

911

31 366
9 954
41 320

361
361

31 366
10 315
41 681

42 979

1 298

EU-15

- direct aids decoupled
- other direct aids

- total direct aids 1
- other measures

TOTAL (1)

CC-10

- direct aids 1
- other measures

TOTAL (2)

EU- 25

- direct aids 1
- other measures

TOTAL (3)

EU- 25

Heading 1a ceiling (4)

Difference

(5) = (4) - (3)

Product of modulation/degressivity (6)

Reimbursement of supplementary aid  as a
result of the franchises (7)

Net  Product  of  modulation/degressivity
(8) = (6) – (7)

- of which available for rural development

Remaining margin available under heading
1a (10) = (5) + (8) – (9)

1 298

832

911

29 781
4 384

34 165
8 019
42 183

2 142
831
2 973

36 307
8 850
45 156

45 759

603

341

113

228

228

603

30 760
4 384

35 144
7 659
42 802

2 522
799
3 321

37 666
8 458
46 123

46 217

94

31 739
4 384

36 123
7 446
43 569

3 232
767
3 999

39 355
8 213
47 568

46 679

-889

31 739
4 384

36 123
7 390
43 513

3 879
767
4 646

40 002
8 157
48 159

47 146

-1 013

31 739
4 384

36 123
7 390
43 513

4 525
767
5 292

40 648
8 157
48 805

47 617

-1 188

31 739
4 384

36 123
7 390
43 513

5 171
767
5 938

41 294
8 157
49 451

31 739
4 384

36 123
7 390
43 513

5 8192
767
6 586

41 942
8 157
50 099

48 093

48 574

-1 358

-1 525

1 406

4 335

5 057

5 780

6 502

6 863

655

2 305

2 637

2 970

3 302

3 520

751

475

370

2 030

2 420

741

400

988

419

2 810

1 234

388

3 200

1 481

3 343

1 481

361

337

1

2

direct aids corresponding to the list contained in the Annex to Regulation (EC) n° 1259/1999 + new aids for dried fodder, nuts and energy crops.
2013 – 90% of total.

157