2004/89/EC: Commision Decision of 9 July 2003 on the aid scheme implemented by Italy for natural disasters up to 31 December 1999 (notified under document number C(2003) 2048)
Date: 2003-07-09
Institutions: European Commission
Subjects: Italy, State aid, agricultural holding, aid system, control of State aid, natural disaster

4.2.2004

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II

(Acts whose publication is not obligatory)

COMMISSION

COMMISSION DECISION

of 9 July 2003

on the aid scheme implemented by Italy for natural disasters up to 31 December 1999

(notified under document number C(2003) 2048)

(Only the Italian version is authentic)

(2004/89/EC)

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

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

absence of any reply from the Italian authorities, by
letter dated 15 June 1993, the Commission invited the
Italian authorities to provide the information requested
within fifteen days from the date of
the letter. An
additional reminder was sent by the Commission by
letter dated 20 August 1993.

Having called on interested parties (1)
comments pursuant
having regard to those comments,

their
to the aforementioned provisions, and

to submit

Whereas:

(3)

(4)

(5)

I. PROCEDURE

By letter dated 22 February 1993, registered on 26
February 1993, the Italian Permanent Representation to
the European Union notified the Commission under
Article 88(3) of
law
providing for aid measures designed to help farmers
affected by natural disasters and for modifications to
existing aid schemes in the agriculture sector. The draft
law was registered under State aid number N 126/93.

the Treaty of a Sicilian draft

Supplementary
Commission by letter dated 17 March 1993.

information was

requested by

the
In the

(1)

(2)

(1) OJ C 295, 10.11.1995, p. 5.

1993,

In reply to the reminders above, the Italian authorities
transmitted an incomplete reply by letter dated 16
September
on 26
September 1993. By letter dated 14 October 1993, the
Commission invited the Italian authorities to submit a
complete reply to the questions requested in its letter of
17 March 1993.

registered

received

as

The Italian authorities replied by letter of 14 February
1994 registered on 22 February 1994.

From the reply it emerged that the draft aid measures
notified by the Italian authorities on 22 February 1993
had meanwhile been adopted as Regional Law No 6 of
12 January 1993 (2) (hereinafter Regional Law 6/93) and
that the newly-adopted law also contained additional
measures not initially notified to the Commision under
Article 88(3) of the Treaty. The Commission therefore
the aid on to the register of
decided to transfer
non-notified aids under number NN 31/94.

(2) ‘Norme per

consentire alle aziende

agricole danneggiate da
l'accesso ai benefici della legge 30
eccezionali avversità naturali
gennaio 1991, n. 31. Rifinanziamento della legge regionale 25
marzo 1986 n. 13 nonché anticipazioni dell' intervento dello Stato
per le finalità del D.M. 21 dicembre 1987, N. 524 in applicazione
del Regolamento CEE n. 857/84' Gazzetta Ufficiale della Regione
agricultural
(Provisions
siciliana
undertakings affected by exceptional weather events to benefit from
the aids provided for by Law No 31 of 30 January 1991;
Refinancing of regional law No 13 of 25 March 1986 as well as
advanced payments on the aids to be provided by the National
Government in accordance with Ministerial Decree No 524 of 21
December 1987 implementing (EEC) Regulation No 857/84).

16.1.1993.

enable

del

to

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(6)

(7)

(8)

(9)

(10)

(11)

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By telex of 30 March 1994, the Commission asked the
Italian authorities to submit the final text of Regional
Law No 6/93 and asked for additional information.

legislation on the matter to which Law No 6/93 made
constant reference and whose accumulation with the
aids under assessment could not be excluded (4).

Having received no reply to the above-mentioned letter,
by letter dated 21 June 1994, the Commission sent a
to the Sicilian authorities asking them to
reminder
provide the requested information.

(12)

The Italian authorities replied to the Commission' s
reminder by letters of 14 July 1994 and 14 September
1994 registered on 16 September 1994.

By letter dated 2 March 1995,
the Commission
informed Italy that it had no objections to raise with
respect to the aid measures provided for by Articles 5
and 7 of Regional Law No 6/93 in that they did not
constitute aids within the meaning of Article 87(1). The
Commission also raised no objections with respect to
the refinancing of the aids provided for by Articles 9
and 15, paragraph 3 and following paragraphs of
Regional Law (Sicily) No 13/86 (3). However, by the
same letter, the Commission also informed Italy that it
reserved the right to examine the said aids under Article
87(1) of the Treaty upon the adoption of general criteria
for
the assessment of aids given in the form of
short-term subsidised loans.

By the same letter the Commission also informed Italy
of its decision to initiate the procedure laid down in
Article 88(2) of the Treaty in respect of Articles 1 and 6
of Regional Law No 6/93 and with respect to the Italian
national
legislation providing for aids designed to
compensate farmers in the case of natural disasters.

The Commission explained the decision to initiate the
proceedings provided for by Article 88(2) of the Treaty
not only with respect to Articles 1 and 6 of Law No
6/93 but also with respect
to the Italian national
legislation on natural disasters by virtue of the fact that
it was practically impossible to assess the compatibility
of Articles 1 and 6 of Law No 6/93, which provided for
aids in favour of farmers affected by natural disasters,
with the applicable Community provisions on the
the national
subject without

taking into account

(3) See note 2.

In order to be able to proceed with the assessment of
Regional Law No 6/93 and undertake the evaluation of
the national
legislation on natural disasters, when
opening the procedure the Commission asked the Italian
authorities to specifically provide the following acts
which had not been notified to the Commission as
required by Article 88(3) of the EC Treaty:

— all

legal

texts adopted up to then concerning,
amending or implementing National Law No 590 of
15 October 1981 ‘Nuove norme per il Fondo di
solidarietà nazionale' which was
the national
framework law on natural disasters to which Law
No 6/93 made reference and in conjunction with
which Law No 6/93 needed to be assessed,

— all

legal

texts adopted up to then concerning,
amending or implementing Law Decree No 367 of 6
December 1990 co-ordinated with conversion Law
No 31 of 30 January 1991 on ‘Urgent measures in
favour of agricultural and livestock undertakings
the
affected
exceptional
1989-1990 agricultural year' (5) with respect
to
which Articles 1 and 6 of Law No 6/93 provided
for specific derogations and benefits,

drought

the

by

of

(4) More specifically in its opening, the Commission stated that even
though to a certain extent it was possible to ‘isolate' the assessment
of Articles 1 and 6 of Law 6/93 from that of
the national
legislation on which the law was based,
in practice it was not
possible to ignore the links existing between the regional text and
the national legislation on natural disasters quoted in the regional
law of which the latter was at the same time a refinancing and a
modification.
texts
in the first place,
provided for additional aid measures which, on the basis of the
information available at the time might be cumulated with the
regional measures. Secondly, the conditions for benefiting from the
regional law were to be found in the national texts. In the absence
of any information on these aspects the Commission therefore
concluded that on the basis of the information available it was not
in a position to verify the conformity of the regional aid measures
with the Community criteria on aids to compensate farmers for
damage caused by natural disasters.

the two national

In fact

(5) Decreto Legge 6 dicembre 1990, n. 367 (in Gazzetta Ufficiale —
serie generale — No 285 of 6 December 1990), coordinato con la
legge di conversione 30 gennaio 1991, n. 31 (in the same Gazzetta
Ufficiale on page 3) recante: ‘Misure urgenti a favore delle aziende
siccità
agricole
verificatasi nell'annata agraria 1989—1990'.

zootecniche danneggiate dalla

eccezionale

e

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— the text of Law No 185 of 14 February 1992 ‘Nuova
disciplina del Fondo di solidarietà nazionale' which
was, and still is, the Italian national framework law
on natural disasters in force; along with all the legal
acts amending, supplementing or implementing that
law,

— the text of national Law No 198 of 13 May 1985 (6)
with respect to which Articles 1 and 6 of Law No
6/93 provided for derogations and benefits, along
with all the legal acts amending, supplementing or
implementing that law,

— with respect

to the abovementioned acts, any
element capable of defining the scope of
the
measures contained therein, the criteria for granting
the aids and the powers of the State, regions, and
autonomous provinces as regards grant of the aids.

(16)

(17)

authorities to the need to provide clear answers to those
questions,
failing which the Commission would be
obliged to take a decision on the basis of the elements
available at that moment.

the

letter dated 20 November 2000,

By
Italian
authorities provided the information requested by the
Commission in its letter of 19 April 2000 as regards the
regards
legislation on natural disasters. As
national
Regional Law No 6/93, they clarified that it would be
up to the Sicilian regional authorities to submit the
information requested. No information has reached the
Commission in this regard.

By letter dated 29 January 2001, the Italian authorities
also transmitted the texts of two additional acts related
to Law No 185/92: Ministerial Decree No 100460 of
18 March 1993 implementing Article 6 of Law No
185/92 and Presidential Decree No 324 of 17 May
1996. In the same letter, the Italian authorities stated
that Decree No 100460 of 18 March 1993 had never
been implemented in practice (non ha mai
trovato
pratica applicazione).

(13)

(14)

(15)

The Commission decision to initiate the procedure was
published in the Official
the European
Communities (7). The Commission invited interested
parties to submit their comments.

Journal

of

By letter dated 12 April 1995,
the Italian national
authorities submitted their comments on the opening of
the procedure related to the national
legislation on
natural disasters and sent the Commission the texts of
all the national
laws requested in the opening of the
procedure. The Italian national authorities left it to the
Sicilian regional authorities to send their comments on
Regional law No 6/93. No comments were sent by the
Sicilian authorities.

By letter of 19 April 2000, the Commission asked the
Italian authorities to provide additional information on
the national
legislation on natural disasters and on
Regional
law No 6/93. With respect to Regional Law
No 6/93, in its letter, the Commission reiterated part of
the questions already asked in previous requests for
additional
information made to the Italian authorities
and to which they had not replied. In the same letter (8),
the Italian
the Commission drew the attention of

(6) ‘Interventi per i danni causati dalle eccezionali calamità naturali e
da avversità atmosferiche nei mesi di dicembre 1984 e gennaio
1985. Nuova disciplina per la riscossione agevolata dei contributi
agricoli di cui alla legge 15 ottobre 1981, n. 590' Italian Official
Gazette n. 118 of 21 May 1985 (Measures to compensate damage
caused by the exceptional weather events of December 1984 and
January 1985. New provisions for easier access to the contributions
provided for by Law No 590 of 15 October 1981).

(7) OJ C 295, 10.11.1995.
(8) Commission letter VI/10837 of 19 April 2000.

(18) On 13 November 2002, the Commission decided to
split the case under assessment into three parts: State
aid C 12/A/95 concerning all aids to compensate for the
damage caused by natural disasters granted by Italy on
the basis of Law No 185 of 14 February 1992 up to 31
December 1999; State aid C 12/B/95 concerning all aids
granted by the Italian authorities on the basis of Law No
185 of 14 February 1992 from 1 January 2000; State
aid C 12/C/95 concerning Articles 1 and 6 of Regional
Law No 6 of 12 January 1993 and the other national
legislation mentioned therein.

(19)

This decision only concerns the State aids granted by
Italy on the basis of Law No 185 of 14 February 1992
up to 31 December 1999, namely the aids examined
under State aid C 12/A/95 . The aids granted by Italy on
the basis of Law No 185 of 14 February 1992 from
1 January 2000 as well as Articles 1 and 6 of Regional
Law No 6 of 12 January 1993, which are covered by
State aid C 12/B/95 and State aid C 12/C/95, will be the
subject of a separate decision.

II. DESCRIPTION

Content of Law No 185 of 1992

(20)

Law No 185 of 14 February 1992 is the Italian national
framework law on natural disasters. The law, which is

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currently in force, provides for a comprehensive set of
aid measures designed to compensate farmers for the
damage to agricultural production or
the means of
agricultural production resulting from natural disasters,
adverse weather conditions and animal diseases.

(21)

The resources to compensate farmers for the damage
suffered as a result of these events are provided through
fund known as National Solidarity Fund
a national
(Fondo di solidarietà nazionale), which allocates to the
individual regions the sums necessary to compensate
farmers. The Fund was originally set up in 1970 with a
view to establishing an automatic system designed to
implement specific actions of active and passive defence
in the agricultural sector without having to resort each
time to individual financial laws (leggi di spesa).

(22)

The law, which consists of 12 articles, provides for four
basic types of aid measures:

1. Aids designed to compensate

the
damage caused by natural disasters and adverse
weather events

farmers

for

2. Aids for combating animal diseases

3. Aids in favour of active forms of defence against

adverse weather events

4. Aids towards the payment of insurance premiums

(also defined as passive forms of defence)

(23)

the

inter alia,

aids. The detailed arrangements

The law does not specify the actual arrangements for
for
granting
implementing the law are explained,
in an
explanatory letter (Circolare No 7 — hereinafter the
Circolare) sent by the Italian Ministry for Agriculture on
28 May 1992 to all
Italian regions, the autonomous
provinces of Bolzano and Trento, banks and financial
institutions specialising in agricultural loans and a large
number of professional associations operating in the
agriculture sector. The Circolare was transmitted to the
Commission by the Italian authorities immediately after
the opening of the proceedings provided for by Article
88(2) of the Treaty. Law No 185/92 cannot be read in
isolation
the
assessment of the Law cannot be separated from that of
the Circolare.

from the Circolare

therefore

and

the

benefit

from these measures

resumption of production activities
to favour
following natural disasters or adverse weather events.
According to this Article, the bodies which are entitled
individual
to
are
agricultural undertakings or groups thereof
located in
areas which have been declared affected by a natural
disaster or exceptionally adverse weather conditions by
the competent regional authorities. It is therefore up to
regional authorities to ascertain the exceptionality of the
event as well as the actual damage caused by it.

(25)

(26)

To be entitled to the aid, the undertakings concerned
must have reported production losses equal at least to
their gross marketable production, with the
35 % of
exclusion of
the
livestock losses. The calculation of
damage may also include the losses due to previous
natural disasters which hit the same holding and the
same crop during the same marketing year.

the

Law No 185/92 does not specify the types of ‘natural
disasters and exceptionally adverse weather events' for
which farmers may be compensated. In their letter of 20
November 2000, however,
Italian authorities
specified that these events were identified in Circolare
No 7 of 28 May 1992. The standard form, attached to
to be used by potential
the Circolare, which is
beneficiaries to report the losses suffered, mentions the
following events: hail,
ice, persistent rainfalls, drought
and heavy snowfalls, floods, scirocco winds, earthquakes,
whirlwinds, frost, strong winds and sea storms. In their
letter, the Italian authorities added that all the events in
question can only be considered exceptional when they
result in serious losses to gross marketable production
not lower than 35 %.

(27) Neither the Law nor the Circolare explain the methods
of calculation of the gross marketable production. In
their letter of 20 November 2000, the Italian authorities
explained that the calculation is done as follows:

(a) Calculation of normal gross marketable production:

Aids designed to compensate farmers for the
damage caused by natural disasters and adverse
weather events (Articles 3, 4 and 5 of
Law No 185/92)

(24) Article 3 of Law No 185/92 defines various types of
intervention in favour of the agricultural sector designed

— based on the production features of

the
the quantities which may be
undertaking,
(no
produced under normal
damage) are estimated, net of
the products
re-employed in the farm. Their monetary value
is thus calculated;

circumstances

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— ancillary revenues already cashed and to be
cashed during the year are calculated, including
income support (if any);

(a)

‘First aid' measures.

— the sum of the production value and of ancillary
the normal gross marketable

revenues gives
production.

(b) Calculation of actual gross marketable production

which can be obtained after the damage:

— on the basis of the production features of the
undertaking (same as above)
the quantities
obtainable after the event are calculated with the
relevant monetary values;

— ancillary revenue and income support measures

(if any) are calculated;

— the sum of the production obtainable after the
damage and ancillary revenues gives the actual
gross marketable production after the damage.

(c) Calculation of the incidence of the damage:

— the

the

between

ratio
production after
damage
production gives
the
percentage of gross marketable production.

gross marketable
the
gross marketable
a

and the normal

event producing

actual damage

the

as

the Circolare

(28) With respect to the damage to infrastructure and land
that any
states
improvement works,
attributed to negligence,
damage which may be
or
natural
insufficient maintenance,
is
to
normal
seasonal
Solidarietà
Fondo
compensation
Nazionale. The exceptionality of
the event must be
proven by irrefutable technical data substantiated by
official climatic detectors. They must be compared with
the data of previous years over a sufficiently long period
which must be statistically significant.

deterioration,
entitled
not

conditions
the

through

di

(29) According to the information submitted by the Italian
authorities in their letter of 20 November 2000, the
calculation of
the
individual holding and takes into account any damage
to crops benefiting from a subsidised insurance scheme
as well as the normal costs not incurred by farmers.

the loss is made at

the level of

The Article generically speaks of ‘first aid measures'
as provided for by Article 1 of Law No 590 of 15
October 1981 and its subsequent amendments.

On the basis of the information contained in the
abovementioned Circolare, it is possible to infer that
these aids are granted in the presence of significant
damage and for specific situations of need which
require prompt intervention. This heading includes
one-off contributions designed to partially cover the
damage
suffered by farmers, paying particular
attention to the costs incurred to reduce the damage
to
costs,
including
warehousing costs, and processing costs. According
to the Circolare sent by Italian authorities to the
Regions, these measures include:

production,

transport

— a per hectare contribution in case of crops

which were completely or partially lost;

— up to 40 % of the damage suffered by the loss of
livestock and up to 30 % of the damage suffered
by the destruction of dead stock;

— a contribution up to ITL 5 million for urgent

repairs of rural premises (9);

— a contribution up to ITL 50 million for the
restoration of infrastructure serving agricultural
holdings;

— a contribution up to 100 % of costs incurred for
the
the collection, sheltering and feeding of
livestock only during the emergency period and
for no longer than six months in any event;

— up to 90 % contribution of costs incurred to

alleviate the damage to production.

(b) Grants up to ITL 3 million to farmers

and
agricultural holdings having farming as their main
occupation. This amount may be increased up to
ITL 10 million in the case of damage to facilities for
protected specialised crops. The aid may reach 80 %

(30) Under Article 3 of Law No 185/92, the holdings which
from the
the requirements above may benefit

meet
following types of aids:

(9) These values are those contained in Law 185/92 and in the
accompanying Circolare; they do not take account of subsequent
amendments.

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of eligible expenditure. The aid is designed to enable
farmers to restore their working capital (capitale di
conduzione). Farmers and agricultural holdings not
having farming as
their main occupation may
benefit only from five-year soft loans.

(31)

(c) Soft-loans of a duration of

five years to enable
farmers to continue their operations during the year
in which the event took place, and the following
year. The loan granted may also cover the loan
instalments falling due the year in which the event
took place, provided they are not extended for more
than 24 months.

loans due by

and agricultural

In addition to the above measures which are provided
for by Article 3 of Law No 185/92, Article 4 provides
for an extension of the repayment period for operating,
improvement
the
agricultural undertakings which meet the requirements
to be entitled to the aids. The extended instalments
benefit from a subsidised interest payments. Article 5 of
the
a partial
exemption from the payment of
the social security
contributions
for agriculture falling due within 12
months of the occurrence of the event. The reduction
may vary between 20 % and 50 % of the amount due.

same undertakings

law grants

the

(d) 10-year soft loans for the recovery, restoration and
conversion of structures in the holdings which were
damaged by the event,
including damage to trees,
greenhouses and road facilities within the holding.
As an alternative to this measure, the holdings may
benefit from grants of up to 80 % of the actual costs
incurred in the case of small holdings, 65 % for
medium sized ones and 50 % for large holdings. The
aid may be granted for the recovery and repair of
repair and replacement of
premises,
agricultural equipment, plants for the storage and
processing of products and lastly, for the purchase
of seeds and the restoration of stocks.

trees,

land,

Aids for combating animal diseases
(Article 6 of Law No 185/92)

(32) Article 6 authorises producer consortia to support the
income of livestock farmers affected by animal diseases
which require the compulsory slaughter of the animals
under Law No 218 of 2 June 1988. The contributions
take account of
the loss of production due to the
waiting period imposed by the competent authorities.
The contribution from the State may be up to 50 % of
the expenses actually incurred by the funds.

(33)

(34)

and producer

(e) Five-year soft loans for processing and marketing
cooperatives
groups within the
meaning of Community legislation which, by virtue
of damage to their members, have suffered a
reduction in income due to a reduction of
least
35 % of
the average production conferred and
marketed over the last two years. Only a reduction
in the quantities conferred directly due to a decrease
in production caused by a natural distaster or like
event may be taken into accout. Any reduction due
to other
in the
operation of cooperatives, changes in the number of
their members or changes in agricultural practices
cannot be taken into account. Furthermore, the aid
cannot be granted to those cooperatives which
purchase from market suppliers more than half of
the overall amount processed.

such as modifications

factors

(f) Special contributions for the storage of citrus fruit
which cannot be marketed may be granted to
cooperatives and groups of
fruit and vegetables
producers.

(g) The Regions may also provide up to 100 % aid for
the restoration and repair of road networks and
water works.

the

the

leaves

definition of

The Article
exact
arrangements for implementing the law to a Decree to
be issued by the Ministry of Agriculture. At
the
Commission's request, the Italian authorities submitted
the relevant Decree: Ministerial Decree No 100460 of
18 March 1993 which,
Italian
authorities, has never been implemented.

according to the

classical

are members of

swine
stomattatis,

fever, African swine
pleuropneumonia.
that

The decree provides for aid measures in favour of
agricultural undertakings affected by foot-and-mouth
fever,
disease,
Only
vesicular
agricultural undertakings
a
consortium for
the defense of production and who
report the number of animals they have by March 30 of
each year, agree to pay their membership contribution
and commit
themselves to meeting all hygienic and
sanitary provisions for the protection of the stock farm
may benefit from the aid. The aid may not exceed 40 %
of the gross marketable production which might have
been obtained from the slaughtered animals. For each
year and head of cattle, the decree fixes the value of the
gross marketable production. The aid (within the 40 %
limit)
the farm's fixed costs and
whether the animal was registered in the genealogical
register. The overall aid contribution is proportional to
the waiting period of the farm which cannot be longer
than six months for bovine animals and three months
for pigs, sheep and goats. The State contribution is paid
the final
to the consortia only after approval of
accounts upon presentation of the relevant applications

takes into account

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consortia may decide

to the competent regional authorities. As an alternative,
the
to insurance
contracts on the basis of Article 9(1)(b) of Law No
185/92.

to resort

Active forms of defence against adverse weather
events (Article 8 of Law No 185/92)

(35) A contribution up to 80 % of eligible expenses may be
provided for investments concerning initiatives — even
pilot ones — of ‘active protection' (10) of the holdings
(crops) against adverse weather events. A case in point
is the installation of special nets against hail. The
beneficiaries of the measures are protection consortia,
which are also responsible for actual implementation of
the projects. A 50 % aid rate may also be granted for
the running and maintenance of the equipment installed
by virtue of
active
protection projects may only be financed if they prove
the
viable
to
corresponding forms of passive protection. It is up to
the Ministry for Agriculture to establish the minimum
thresholds below which the active protection projects
are not considered economically viable.

contribution. The

economically

compared

above

the

be

to

(36) According to the information submitted by the Italian
authorities in their letter of 20 November 2000, no
initiative of this type has ever been undertaken since
apparently no suitable
to
counter the damage caused by either natural disasters or
adverse weather conditions have yet been found.

technological

solutions

business risk. The losses may also be due to plant
diseases, if strictly related to adverse weather events,
and to animal diseases
(various weather events
affecting individual crops or structures). This type of
contract also includes damage to quality;

(c) compensation for the damage caused to the main
crops on the farm by all adverse weather events
whenever the level of damage exceeds the normal
business risk (several weather events affecting more
than one crop or structure).

(38) As to the ordinary business risk, the Italian authorities
have clarified that it is generally set at 10 to 15 %.

(39)

The fund paying out the insurance premiums is financed
through:

1.

the contributions of the members;

2. a contribution from the State equal to 50 % of the

overall costs;

3. contributions from the regional authorities, private

and public bodies.

Insurance contracts (Article 9 of Law No 185/1992)

(37) Article 9 of Law 185/1992 authorises

the defense
consortia set up on the basis of Law No 364 of 25 May
1970 and of Law No 590 of 15 October 1981 to
conclude insurance contracts covering losses caused by
adverse weather events as well as animal or plant
diseases. Farmers may choose among three types of
contracts:

(40)

The Circolare states that
the policies made in areas
characterised by high climatic risk, which are to be
defined by Ministerial Decree, may benefit from a public
(State, regions etc.) contribution of up to 65 % of the
overall cost. In their letter of 20 November 2000, the
Italian authorities stated that the State contribution to
the actual costs sustained generally ranged between
30 % and 40 %. In those few cases where a regional
contribution is also granted,
like in the Province of
Trento,
the overall public contribution never exceeds
65 %.

(a) compensation for

the damage caused to specific
crops by hail, ice, frost and other adverse weather
events (individual events affecting individual crops);

Insurance contracts Decree
(Presidential Decree No 324 of 17 May 1996)

(b) compensation for the damage caused to a holding's
facilities and specific crops by all adverse weather
events affecting production beyond the normal

(41)

(10) As opposed to ‘passive protection'

represented by insurance

schemes.

letter of 20 November 2000,

In their
the Italian
authorities clarified that Article 9 of Law No 185/92
had been replaced by Presidential Decree No 324 of 17
May 1996 (Regolamento concernente norme sostitutive
dell' art. 9 della legge 14 febbraio 1992, n. 185,

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sull'assicurazione agricola agevolata). The assessment of
the Italian legislation on compensation of damage
caused by natural disasters until the entry into force of
the new Guidelines (11) needs therefore to take this
Decree into account as well.

III. ASSESSMENT

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

(42) According to the Italian authorities,

into

insurance

the Decree was
to bring the Italian legislation on
issued in order
subsidised
line with Community
provisions. The 2001 Finance Act contains an Article
which further modifies
Italian legislation on
subsidised insurance to bring it into line with the new
Community Guidelines for State aid in the agriculture
sector. This
last provision is not covered by this
Decision.

the

(43)

Presidential Decree No 324/96 explicitly
governs
subsidised insurance contracts. The types of contract
which may benefit from public contributions are the
same as those laid down in Law No 185/92. The State
contribution to these contracts may be up to 50 % of
eligible expenditure, which may be increased to 65 % in
areas characterised by high climatic risk.

(45)

(46)

Law No 185/92 provides for the grant of aid, through
public resources,
to specific agricultural undertakings
which will undeniably be granted an undue economic
and financial advantage to the detriment of other
same
agricultural undertakings not
contribution. According to the case law of the Court of
Justice, an improvement in the competitive position of
an undertaking as a result of State financial aid leads to
possible distortion of competition compared with other
competing
such
assistance (12).

undertakings

receiving

receiving

not

the

in

there

States

The measures under consideration affect trade between
substantial
that
Member
intra-Community trade
as
in agricultural products
indicated by the table (13) below, which lists the overall
value of agricultural imports and exports between Italy
and the rest of the EU over the 1992-1999 period, with
the relevant percentage share.

is

All products

All agriculture

Share of Agric in All
trade

Exports

Imports

(+Balance (E-I))

Exports

Imports

(+Balance (E-I))

Exports

Imports

1992

79 388 214

85 692 624

–6 304 409

6 562 005

14 020 411

–7 458 406

8,27

16,36

1993

77 274 764

70 223 928

7 050 836

6 714 141

12 741 140

–6 026 999

8,69

18,14

1994

86 512 176

80 515 251

5 996 925

7 360 628

13 390 286

–6 029 659

8,51

16,63

1995

102 383 525

95 845 379

6 538 146

8 364 233

13 629 860

–5 265 628

8,17

14,22

1996

110 160 747 100 188 306

9 972 440

9 191 731

14 525 682

–5 333 951

8,34

14,50

1997

116 528 196 113 098 493

3 429 703

9 458 357

15 356 986

–5 898 629

8,12

13,58

1998

124 669 240 120 903 295

3 765 945

9 996 756

15 628 673

–5 631 917

8,02

12,93

1999

128 692 641 127 285 283

1 407 359

10 665 255

15 927 386

–5 262 131

8,29

12,51

(11) Community Guidelines for State aid in the agriculture sector

(OJ C 28, 1.2.2000, republished in OJ C 232, 12.8.2000).

(12) See Case C-730/79 [1980] ECR. 2671, grounds 11 and 12.
(13) Source: Comext.

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the Court of

(47) With respect to the above, it should however be noted
that
Justice has held that aid to an
undertaking may be such as to affect trade between the
Member States and distort competition where that
undertaking competes with products coming from other
its
Member States even if
products. Where a Member State grants aid to an
undertaking, domestic production may for that reason
be maintained or
that
undertakings established in other Member States have
less chance of exporting their products to the market in
that Member State. Such aid is therefore likely to affect
trade
distort
between
competition (14).

increased with the

itself export

it does not

Member

States

result

and

(48)

The Commission therefore concludes that the measures
are caught by the prohibition in Article 87(1) of the EC
Treaty.

(49)

The prohibition in Article 87(1)
exemptions in Article 87(2) and (3).

is

followed by

(50)

The exemptions listed in Article 87(2)(a) and (c) are
manifestly inapplicable given the nature of
the aid
measure in question and its objectives. Indeed, Italy has
not submitted that either Article 87(2)(a) or (c) are
applicable.

(51) Article 87(3)(a) is also inapplicable since the aid is not
intended to promote the development of areas where
the standard of living is abnormally low or where there
is serious underemployment.

(52) With regard to Article 87(3)(b), the aid in question is
not intended to promote the execution of an important
project of common European interest or to remedy a
serious disturbance in Italy's economy.

(53)

This aid is not
achieving the objectives referred to in Article 87(3)(d).

intended to achieve or suitable for

(54)

Considering the nature of the aid under examination
and its objectives, the only exemptions which may be
applicable are those provided for by Article 87(2)(b) and
(c).

Applicable provisions

(55)

applicability of one of

The
exceptions needs to be assessed in the light of

abovementioned
the

the

provisions applicable to the granting of State aids in the
agriculture sector, namely the Community Guidelines
for State aid in the agriculture sector (15) (hereinafter the
Guidelines), which entered into force on 1 January
2000.

(56)

(57)

Point 23.3 of the Guidelines states that the Community
will apply them with effect from 1 January 2000 to new
notifications of State aid and to notifications which are
pending on that date. Unlawful aid within the meaning
of Article 1(f) of Council Regulation (EC) 659/1999 of
22 March 1999 laying down detailed rules for
the
application of Article 88 of the EC Treaty (16) will be
assessed in accordance with the rules and the guidelines
in force at the time the aid is granted.

Law No 185/92 was never notified to the Commission
and was therefore put into effect in contravention of
Article 88(3) of the Treaty. It therefore falls within the
scope of Article 1(f) of Regulation (EC) No 659/1999
and needs to be examined on the basis of the rules in
force at the time the relevant aids were granted. Any
aids granted on the basis of this law up to 31 December
1999 need therefore to be assessed in the light of the
provisions applicable before the entry into force of the
new Guidelines. Any aid granted on the basis of the
same law from 1 January 2000 will on the other hand
need to be assessed on the basis of the new Guidelines.

(58) As stated in paragraph 19 above,

this decision only
concerns the aids granted by Italy on the basis of Law
No 185 of 1992 up to 31 December 1999. The aids
granted on the basis of Law No 185/1992 from 1
January 2000 onwards as well as the aids granted on
the basis of Articles 1 and 6 of Regional Law No 6/93
and the other national legislation referred to therein are
assessed within the framework of State aid C 12/B/95
and State aid C 12/C/95 and will be the subject of
separate decisions.

Aids designed to compensate farmers for the
damage caused by natural disasters and adverse
weather events (Articles 3, 4 and 5 of Law 185/92).

(59)

The Articles at issue provide for aids to compensate
farmers for the damage suffered as a result of natural
disasters or adverse weather events. At the time they
were granted, these types of aid were assessed on the
basis of the Rules governing the grant of national aids

(14) Judgment of the Court of Justice of 13 July 1988 in Case 102/87
French Republic v Commission of the European Communities ECR
[1988] 4067.

(15) OJ C 232, 12.8.2000, p. 19.
(16) OJ L 83, 27.3.1999, p. 1.

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in the event of damage to agricultural production or the
means of agricultural production and national aids
involving the defraying of a proportion of the insurance
premiums covering such risks (17). Under these rules it
was customary for the Commission to regard as covered
by the provision of Article 87(2)(b) national aids
compensating for material damage of all kinds caused
landslides.
by
Exceptional
internal
disturbances or
strikes or, with some reservation,
(depending on their
nuclear catastrophes and fires
extent) were to be treated in the same way in the
Commission's view. Regardless of
the
damage, all these events per se justified compensating
private individuals for the damage incurred.

flood
occurrences

avalanches
such

the extent of

earthquakes,

as wars,

or

(60) On the other hand, the Commission customarily held
that weather events such as frost,
ice, hail, rain or
drought could not be regarded as a natural disaster
within the meaning of the Treaty unless the damage
caused to the individual recipient of the proposed aid
reached a certain minimum threshold. The threshold
was set at 30 % of normal production (20 % in the
less-favoured areas) based on the one hand on the total
gross production affected by the event on an individual
holding applying for an allowance to compensate for
the losses suffered and, on the other hand, on the
corresponding normal gross annual production. That
rate needed to be determined by comparing the average
normal production recorded objectively for each holding
three years
concerned during a reference period of
preceding that of the event in question (disregarding,
where appropriate, a previous year which also gave rise
to compensation on the same grounds) against
the
reduced or destroyed production under consideration.

Nature of the events covered by the law and level
of damage giving right to compensation

(61)

The Italian law generically speaks of natural disasters
and adverse weather conditions without mentioning any
specific event. In this respect, the Commission asked the
Italian authorities to specify the types of event which,
under certain conditions, might entitle farmers
to
compensation. In their letter of 20 November 2000, the
Italian authorities replied by stating that
the events
law had been identified in the
covered by the
the Regions
to all
explanatory circular
concerned and to other interested parties. The standard
form attached to the Circolare which was to be used by
potential beneficiaries
suffered
ice, persistent
mentions
rainfalls, drought, heavy snowfalls, floods, scirocco winds,
earthquakes, whirlwinds,
frost, strong winds and sea
storms.

the following events: hail,

the losses

to report

letter

sent

(17) Working document VI/5934/86, 10.11.1986.

the Treaty

(62) Of these events, only floods and earthquakes fall within
the definition of natural disasters laid down in Article
and justify the grant of
87(2)(b) of
compensatory aids regardless of
the level of damage
caused. As to the others, to be entited to the aid the
agricultural undertaking affected must have reported
damage reaching at least the 30 % threshold mentioned
in the abovementioned document, calculated using the
methodology
law
establishes that the agricultural undertakings affected by
adverse weather events are entitled to compensatory
aids only when they report a loss of production of at
least 35 % of gross marketable production.

described

therein.

Italian

The

(63) Neither the law nor the Circolare specifies how the
losses are to be calculated. At the Commission's explicit
request, the Italian authorities explained in their letter of
20 November 2000 the method of calculation used. As
shown from the description provided at paragraph 27
above, the method adopted by the Italian authorities to
calculate the loss of production does not coincide
perfectly with that proposed by the Commission.

(64)

(65)

In fact, while the Commission requires a 30 % loss of
normal production calculated over a reference period of
three years, the Italian authorities require a 35 % loss of
‘gross marketable production' in the year in which the
event takes place. The Italian method does not therefore
require a reference period of three years on the basis of
which normal production is
the
purpose of the reference period is to make sure that the
resulting calculation is actually representative and is not
based on abnormally high yields, it can be questioned
whether the absence of the three-year reference period
can actually make the Italian method of calculation
unrepresentative of average normal production,
so
opening the way to abuse and distortion.

calculated. Since

Italian authorities

is based on the

the holding, net of

To this end, it should be noted that the method used by
the
level of
production which can be obtained by the holding under
normal conditions, i.e.
in the absence of damage. The
method takes account of the specific production features
of
the percentage of production
which is re-employed on the holding. The production
level
is therefore calculated on ‘objective' parameters
(namely the surface of the holding, the inputs used)
the specific production unit
which are typical of
concerned and which cannot be affected by external
seasonal
factors capable of changing the level of
production that can on average be achieved on that
holding. The use of such parameters therefore makes it
no longer necessary to resort to a reference period of
three year to have a ‘representative' value. The level of
normal production which is obtained through this
method cannot in fact be inflated by external factors
giving abnormally high yields. Moreover, it should also
be considered that the loss is calculated at the level of

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the individual holding and not on the basis of an
average of several holdings, something that could lead
to an inaccurate representation of the damage suffered
by the individual holdings and might involve the risk of
overcompensation.

Aid to cooperatives engaged in the processing and
marketing of agricultural products
(Article 3 of Law 185/92)

Intensity of the aid and risk of overcompensation

(66) Under Community legislation,

requirements
described in point 60 are met, aids to compensate
farmers for
the damage suffered may reach 100 %.
Under no circumstances can the aids granted exceed the
losses actually suffered by farmers.

the

if

The law under examination lays down that the farmers
affected by the event may have access to one or more of
the types of aid described by the law itself, depending
on the type of damage reported and the type of
agricultural holding. The Italian authorities have clearly
indicated that even though the farmers may receive
types of aid, no overcompensation is ever
several
possible. They have in fact clarified that
the aids
covering damage to crops must be related and in any
event not exceed the value of the capital invested in the
production cycle and not recovered as a result of the
loss of the product, and the greater costs, if any, to be
sustained by the agricultural undertaking to complete
the production cycle. The aids for the restoration of the
holding's facilities and premises cover only part of the
costs of their restoration. The authority paying out the
aids must always make sure that the compensation of
the damage does not exceed the damage suffered since
that would obviously result in an illegal enrichment.
the
Furthermore,
payment of the aids must take account of any other
regional, national or Community aids which might be
granted to the same end as the law under consideration
here.

responsible

authorities

the

for

(70)

(71)

Law No 185/92 lays down that also cooperatives
engaged in the processing and marketing of agricultural
products which have suffered a reduction in income due
to a reduction in the products conferred by their
members who were affected by the catastrophic events
concerned may benefit
from the aids provided for
therein. The reduction must be at least equal to 35 % of
the average production conferred and marketed over the
last two years.

Before the entry into force of
the new Community
Guidelines on State aids in the agriculture sector, it was
Commission practice (18) to authorise aids of this type
in favour of processing and marketing cooperatives. The
Commission's approach was based on the idea that,
because of the reduction in production caused by an
adverse climatic event or natural disaster, farmers had to
reduce the quantity of products supplied to cooperatives
and which were
of which they were members
responsible for
their production.
the marketing of
Farmers who had been affected by natural disasters were
therefore penalised twice: first of all as a result of the
loss of their crops and secondly as a result of the losses
of the cooperatives of which they were members and to
which they generally supplied their production. The
latter in fact, due to the scarcity of supplies caused by
the event, might operate at a loss on account of the
fixed costs
In line with the
Commission's practice at the time in question, there is
no reason why processing and marketing cooperatives
should be excluded from the benefits of the law.

they have

to pay.

(72) On the basis of the above considerations, it is possible
to conclude that the aids provided for by Articles 3, 4
and 5 of Law No 185/92 designed to compensate
cooperatives engaged in the processing and marketing
of agricultural products for the damage suffered as a
result of adverse weather conditions are compatible with
the common market in accordance with Article 87(2)(b)
of the Treaty.

In addition, the Italian authorities have confirmed that
the amount of the aid paid is reduced by any amount
received under subsidised insurance schemes and that
the normal costs not incurred by the farmer — because
of the non-harvesting of the crop, for example — are
also taken into account.

Aids for combating animal diseases
(Article 6 of Law No 185/92)

Based on the above, it is possible to conclude that the
aids designed to compensate farmers for damage caused
by natural disasters and adverse weather conditions
provided for by Articles 3, 4 and 5 of Law No 185/92
are compatible with the common market under Article
87(2)(b) of the Treaty as aid to make good the damage
caused by natural disasters.

(73) Article 6 of Law No 185/92 generically authorises
producers'
to support
consortia to take measures
incomes on holdings affected by animal diseases. The
specific arrangements for the implementation of
this
aid, which are not laid down in the Article, are left to a
Decree to be issued by the Ministry of Agriculture. In

(18) See for example aids N 877/95 and N 435/95.

(67)

(68)

(69)

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this respect, Law No 185/92 does not provide for the
immediate and direct aids to the farmers
grant of
concerned;
to the abovementioned
Decree. So Article 6 of Law No 185/92 does not
constitute State aid within the meaning of Article 87(1)
of the Treaty.

task is left

that

(77)

follows

from the above that

the aid measures
It
provided for by Ministerial Decree No 100460 comply
with the applicable Community provisions in force at
the time as defined in point 75. They can therefore be
considered compatible with the common market under
Article 87(3)(c) of the Treaty.

Ministerial Decree No 100460 of 18 March 1993

(78)

In their letter of 29 January 2001, the Italian authorities
the Ministerial Decree has never been
stated that
implemented.

(74)

(75)

(76)

lays

down

The Decree
for
implementing the measures generically defined by
Article 6 of Law No 185/92 and therefore falls within
the scope of Article 87(1) of the Treaty.

detailed

rules

the

Before the entry into force of
the new Community
Guidelines for State aid in the agricultural sector, it was
established Commission practice, based on its working
document VI/5934/86 Rev. 2 of 10 November 1986 (19)
to authorise compensatory aids for farmers affected by
epizootic diseases aids provided that:

— they concerned measures compulsory under the law
of the country concerned or Community law and
were granted by the Member States
in whose
territory such measures were carried out,

— they formed part of a national program limited to
the time needed to secure the effective eradication
of the disease concerned,

— the objective of

the aid measures were either

preventive, compensatory or both.

The aids provided for by the Ministerial Decree are only
granted in the case of diseases for which a compulsory
program of eradication is laid down by Law No 218 of
2 June 1988 relating to measures designed to combat
foot-and-mouth disease and other epizootic disease
(Misure per la lotta contro l'afta epizootica ed altre
malattie epizootica degli animali). The aids are envisaged
only for a limited period of either six months or three
months, which is the waiting period imposed on the
slaughtering
livestock holding as
obligation.
is
compensatory since
is designed to compensate
farmers for the loss of income suffered as a result of the
under
compulsory
eradication programmes. No overcompensation is
possible as a result of the aid since the contribution
cannot exceed 40 % of the gross marketable production
of the slaughtered animals.

a
objective
it

result of
of

the measure

slaughtering

animals

their

The

the

of

(19) Based on the Commission's working paper: Rules governing the
grant of national aids in the event of damage to agricultural
production or the means of agricultural production and national
the insurance
aids involving the defraying of a proportion of
premium covering such risks.

Aids for the implementation of active defense
projects (Article 8 of Law No 185/92)

(79) Article 8 of Law No 185/92 provides for a 80 % aid rate
in respect of eligible expenditure for investments related
to ‘active defense' including the construction of anti-hail
nets, as well as a 50 % aid rate in respect of eligible
expenditure for the operation and management of the
facilities created by virtue of
investment. The
investments are designed to prevent the damage caused
exceptional
by
occurrences. According to the information provided by
Italian authorities,
be
considered as an alternative to passive defense initiatives
(insurance) when they prove to be more viable and
economically convenient than the latter.

events or other

adverse weather

investments

these

this

are

to

(80) Despite the objective they pursue, the aids provided for
by Article 8 cannot be assessed on the basis of the
Commission's working document governing the grant of
national aids in the event of damage to agricultural
production and national aids covering the defraying of a
the insurance premium covering such
proportion of
risks (20). The document
in fact only covers ex post
compensatory aids granted after the actual occurrence
of the damage or loss and ex ante aids in the form of
insurance premiums against such potential risks. The
document makes no provision for aids for active defense
initiatives such as the ones described in Article 8 of Law
No 185/92.

(81)

It follows from the above that the aids provided for by
the Article in question must be assessed in the light of
the provisions applicable to aids for investments in
holdings, that is investments carried out at the level of
primary production which, at
the time the law was
issued, were regulated by Council Regulation (EEC) No
2328/91 of 15 July 1991 on improving the efficiency of
agricultural structures (21),
replaced by Council
Regulation (EC) No 950/97 (22) of 20 May 1997.

later

(20) Working document VI/5934/86, 10.11.1986.
(21) OJ L 218, 6.8.1991, p. 1.
(22) OJ L 142, 2.6.1997, p. 1.

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(82)

(83)

the

time

Regulation 2328/91 basically established a Community
part-financed system providing for a series of measures
to improve the efficiency of agricultural structures.
It
established a framework for common action authorising
or obliging Member States to implement a certain
number of aid schemes which were part-financed by the
Community. At
the Regulation
same
established a framework regulating the grant of certain
types of national aid financed by the Member States.
Article 35 of Regulation (EEC) No 2328/91 defined the
conditions under which Member States were authorised
to provide State aids in order to achieve the objectives
of the Regulation. More specifically, Article 35 stated
that the Regulation was without prejudice to the right
of Member States to adopt additional aid measures in
the areas covered by the Regulation with the exception
of those covered by Articles 2, 6 to 9, 11, 12(2), (3) and
(4) and 17 on terms differing from, or in amounts
exceeding,
the ceilings laid down in the Regulation,
provided that Articles 92, 93 and 94 of the Treaty were
not
the
provisions of Articles 92, 93 and 94 of the Treaty, with
the exception of Article 92(2), did not apply to the aid
measures governed by Articles 2, 6 to 9, 11, 12(2), (3)
and (4) and 17.

infringed. Article 35(2)

laid down that

The types of aid which Member States were authorised
to grant were therefore clearly defined by Article 35,
which limited the Member States' scope for intervention
as regards aids financed entirely by the state. In practice,
Member States had to notify the Commission of any
decision to grant aids for the initiatives covered by the
Regulation either in the framework of the procedure
provided for by the Regulation with a view to obtaining
Community part-financing or on the basis of Articles 87
and 88 of the Treaty with respect to State aid. The
Italian authorities did not notify the Commission of the
aids provided for by Article 8 of Law No 185/92 within
the framework of
the procedure provided for by
Regulation (EEC) No 2328/91 with a view either to
obtaining Community part-financing or with a view to
granting the aids in accordance with Article 12(2), (3)
and (4) of that same Regulation; the aids need therefore
to be assessed against Articles 87, 88 and 89 of the
Treaty within the limits and under the conditions laid
down by the Regulation.

investment which Member

(84) Article 12 of Regulation (EEC) No 2328/91 specifies the
States were
types of
authorised to fund exclusively out of
their own
resources. As stated under Article 35, Articles 87, 88
and 89 of the Treaty do not apply to the aid measures
governed by Article 12(2), (3) or (4). The aids provided
for by Article 8 of Law No 185/92 therefore can only
be assessed on the basis of Article 12(1) and (5) of
Regulation (EEC) No 2328/91.

in Articles 5 and 9 and which exceed the amounts laid
down in Article 7(2) increased, where appropriate, by
the aid referred to in Article 11 (with the exception of
aid for the construction of farm buildings), aid for the
relocation of farm buildings where this is done in the
public interest, aid for land improvement operations or
for
the purpose of environmental
protection or improvement, provided that the grant of
these higher amounts does not infringe Article 6 and
Articles 87 and 88 of the Treaty.

investments

for

(86) As its wording indicates, the aids provided for by Article
12(1) are additional aids which under strictly defined
conditions may be granted by Member States on top of
the Community part-financed system of aids granted
under Regulation (EEC) No 2328/91. Such additional
aids may only be granted to holdings which satisfy all
the conditions laid down by the Regulation (Articles 5
to 9) for access to Community aid and only with a view
to topping up previously approved part-financed aids.
The aids provided for by Article 8 of Law No 185/92
are, on the other hand, granted regardless of
the
existence of a previously approved part-financed system
of aids established on the basis of Regulation (EC) No
2328/91 to holdings which most probably do not meet
the conditions of Articles 5 to 9 of Regulation (EEC) No
2328/91. These aids by definition do not fall under the
scope of Article 12(1) of Regulation (EEC) No 2328/91.

(87) Article 12(5) indicates the cases where Member States
are free to provide aids which are not subject to the
limitations and prohibitions laid down by the Article,
provided that the aids are granted in accordance with
Articles 87 and 88 of the Treaty. The Article mentions
the following six cases:

— aid for land purchase,

— subsidised operating loans the term of which does

not exceed one marketing year,

— aid for the purchase of male breeding stock,

— securities for loans contracted, including interest,

(85) Article

in
agricultural holdings satisfying the conditions laid down

investments

prohibits

12(1)

aid

for

— aid

for

investments

and
in
improvement of the environment provided that this
does not entail an increase in production,

protection

the

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— aids in respect of investments for the purpose of
improving hygiene conditions or complying with
Community animal welfare standards or national
than the
standards where
Community
these
investments do not give rise to an increase in
production.

these
standards,

are
provided

stricter

that

operating costs which should normally be sustained by
the holdings as part of their normal day to-day activity.
In their
the Italian
reply of 20 November 2000,
authorities explained that the active defense initiatives
envisaged were ‘collective' and were carried out by
defense consortia or other bodies. The related costs did
not cover the costs sustained by individual undertakings.
The 50 % contribution was granted by analogy with the
aid towards the costs of insurance policies.

(88)

(89)

(92)

reply of 20 November 2000,

The aids provided for by Article 8 of Law No 185/92
are generically defined as ‘active defense' investments to
be carried out as an alternative to passive defense
initiatives (insurance). The Italian authorities were asked
to describe and provide examples of
the types of
investment which might be covered by this definition.
In their
the Italian
authorities generically referred to anti-hail nets as the
sole example of possible investments. In the same letter
they stated that in reality no investments of this type
had ever been financed for want of appropriate
technology. Even in the absence of more specific
information from the
aids
provided for by Article 8 of Law No 185/92 are neither
aids for the purchase of land nor aids for the purchase
of male
concern
stock, nor
environmental
investments or investments designed to
improve hygiene conditions or to guarantee compliance
with Community animal welfare standards, nor are they
securities for loans contracted. They cannot therefore be
considered to fall under any of the categories provided
for by Article 12(5) of Regulation (EEC) No 2328/91.

Italian authorities,

do they

breeding

the

general

investments

In addition to the considerations above, it should also
be recalled that Article 8 of Law No 185/92 provides
for an aid rate of up to 80 % for the investments
concerned. The maximum aid rate authorised by the
in primary
Commission for
production was 35 % in the
investments
undertaken in normal areas and 75 % for investments
undertaken in less favored regions within the meaning
of Directive 75/268/EEC of 28 April 1975 (23). An
exceptional aid rate of 40 % applied to the purchase of
male breeding stock. The 80 % aid rate provided for by
the
exceed the
Italian authorities would therefore
maximum aid rate authorised by the Commission.

case of

that

active

farmers

benefiting

from the

The reply provided by the Italian authorities confirms
that the 50 % contribution is indeed granted to cover
the weather
the maintenance and operating costs of
defence facilities created as a result of the investments
described above. The fact
the contribution is
granted and is managed by the consortia is irrelevant
since the final beneficiaries of the aid are in any event
the
defense
structures. The aid is
therefore simply designed to
relieve farmers of normal operating costs associated
with the day-to-day running of their activities (including
farm structures and
those for
investments) for the duration of the aid. Aids towards
the payment of cost which should normally be borne by
farmers themselves are by definition operating aids (24),
in other words
a
short-term economic advantage. These aids have no
structural effect on the development of the sector and
cannot be
economic
development of certain economic activities or of certain
economic areas. It can therefore be concluded that these
aids cannot benefit
the derogations to
from any of
Article 87(1) laid down in the Treaty and are therefore
incompatible with the common market.

an aid which simply confers

considered to facilitate

the maintenance of

the

Assessment of the aids provided for by Article 8 of
Law No 185/92 on the basis of
Regulation (EC) No 950/97

(90)

The Commission therefore considers that the 80 % aid
in favour of active defense investments provided for by
Article 8 of Law No 185/92 cannot benefit from any of
the derogations to Article 87(1) laid down in the Treaty
and is therefore incompatible with the common market.

(93)

Regulation 2328/91 was repealed by Council Regulation
(EC) No 950/97 of 20 May 1997 on improving the
efficiency of agricultural structures (25), which entered
into force in June 1997. The provisions concerning the
application of Articles 87 and 88 of the Treaty to the
aid measures governed the Regulation did not change
with respect to Regulation (EEC) No 2328/91.

(91) Article 8 of Law No 185/92 also provides for 50 % aid
in respect of eligible expenditure for the operation and
maintenance of the facilities and structures created as a
result of the aids described in the previous paragraphs.
In its letter of 19 April 2000, the Commission asked the
Italian
this
justify
contribution which is apparently designed to cover

authorities

grant

the

to

of

(94) Article 37(1) of Regulation (EC) No 950/97 authorised
Member States to adopt additional aid measures in the

(24) See Judgment of the Court of First Instance of 8 June 1995 in Case
European

SA v Commission of

the

T-459/93 (Siemens
Communities 1995 ECR -1675).

(23) OJ L 128, 19.5.1975, p. 1.

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

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areas covered by the Regulation, with the exception of
those covered by Articles 5 to 9, 11, 12(4) and 17, on
terms differing from those laid down therein or for
amounts exceeding the ceilings
laid down therein,
provided that Articles 92, 93 and 94 of the Treaty were
not infringed. Article 37(2) laid down that Articles 92,
93 and 94 of the Treaty, with the exception of Article
92(2) did not apply to the aid measures governed by
Articles 5 to 9, 11, 12(4) and 17 of the Regulation.
Under Article 12 of
the Regulation, State aids for
investments in agricultural holdings granted outside the
aid scheme referred to in Title II were subject to the
conditions set out in the Article itself, which applied
even in Member States which did not institute the aid
scheme provided for in Title II.

related to crop and livestock farming, the destruction of
which they are designed to prevent. The investments at
issue are not covered therefore by Article 12(2) of
Regulation (EC) No 950/97,
just as they were not
covered by Article 12(5) of Regulation (EEC) No
2328/91.

(97) Article 12(3) of Regulation (EC) No 950/97 coincides
exactly with Article 12(1) of Regulation (EEC) No
2328/91 and therefore the same considerations apply
with respect to it.

(95) Article 12(2) of Regulation (EC) No 950/97 stated the
investment which were generally authorised
types of
and to which Articles 92, 93, 94 of the Treaty applied.
These were:

— aid for land purchase;

— subsidised operating loans the term of which did

not exceed one marketing year;

— aid for

the purchase of male breeding animals;

securities for loans contracted, including interest;

— aid for

investments to protect and improve the
it did not entail an

environment, provided that
increase in production;

— aids in respect of investments for the purpose of
improving hygiene conditions or of complying with
Community animal welfare standards or national
than the
standards where
Community
these
investments do not give rise to an increase in
production;

these
standards,

are
provided

stricter

that

(98) As regards the applicable aid rates,

(EEC) No

in this case too
Regulation (EC) No 950/97 introduced no changes from
Regulation
The maximum
authorised aid rates continued therefore to be 35 % in
normal areas and 75 % in less favoured areas. The aid
rates laid down in Article 8 of Law No 185/92 do not
comply with the abovementioned aid rates.

2328/91.

(99)

The aids provided for by Article 8 of Law No 185/92
could not therefore benefit from any of the derogations
to Article 87(1) of
therefore
incompatible with the common market.

the Treaty and are

of

the

facilities

operation

(100) With respect to the 50 % aid rate for the maintenance
same
existing
and
considerations made under points 91 and 92 apply. The
aids are in fact designed to cover costs which should
normally be borne by farmers themselves and are by
definition operating aids which have no structural effect
on the development of the sector and cannot therefore
be
economic
development of certain economic activities or of certain
economic areas. These aids cannot
therefore benefit
from any of the derogations to Article 87(1) laid down
in the Treaty and are therefore incompatible with the
common market.

considered

facilitate

aids

the

to

Aids for the payment of insurance contracts
(Article 9 of Law No 185/92)

— aids for activities not relating to field crops or
stockfarming where such activities are carried out
on agricultural holdings.

(101) Article 9 of Law No 185/92 lays down the conditions
under which aids
insurance
to cover
premiums may be granted by the New National
Solidarity Fund.

the cost of

(96)

The only difference with respect to the same provisions
of Article 12(5) of Regulation (EEC) No 2328/91 was
the possibility of granting aids for activities not relating
to field crops or livestock farming where such activities
are
The
investments covered by Article 8 of Law No 185/92 do
not fall under this heading since they are obviously

agricultural

holdings.

carried

out

on

(102) Before the entry into force of the new Guidelines, these
types of aids were assessed on the basis of the already
mentioned Commission working paper VI/5934/86
Rev. 2, which regulated aids to compensate farmers for
damage affected by adverse weather events. The paper
insurance
intended to cover
considered aids
premiums paid by farmers for adverse weather events

the

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and exceptional occurrences an alternative to the ex post
compensation for losses caused by natural disasters; the
paper accordingly analysed two kinds of aid. According
insurance
to the paper, aids to cover
premiums
following
could be granted under
conditions and at the following aid rates:

the cost of
the

the Treaty or pursuant

(a) where the insurance relates to losses which the
Member States might, in the absence of insurance,
reimburse 100 % either as a natural disaster or other
exceptional occurrence pursuant to Article 92(2)(b)
of
to Article 92(3)(c) as
compensatory aid in the case of an epizootic or
plant disease, State aid towards insurance premiums
may, on a permanent basis, cover up to 80 % of the
premium payable by the farmer, the remainder of at
least 20 % — considered a fair share of the almost
total guarantee provided by the State — being
repayable by the farmer.

(b) This percentage is reduced to 50 % in the case of
insurance covering other risks involving the loss of
crops or livestock to which the State could not
respond and where the damage meets the criteria
laid down in points 2.2 and 3.2 of document
VI/5934/86 Rev. 2.

(c)

In the case of insurance not covering the risk of
natural disasters: up to 30 % (this can be exceeded
in areas of high climatic risk, in especially justified
cases) of the premium payable by the farmer for a
maximum ten year period on a degressive basis.

the aid rate could be increased in duly
However,
justified cases in areas characterised by high climatic
risk (26).

(103) For a better understanding of the provisions above, it is
important to recall that the same working document
regards adverse weather conditions such as frost, hail,
ice, rain or drought only as a natural disaster within the
meaning of Article 87(2)(b) of the Treaty if they caused
losses equal
least 30 % (20 % in less-favoured
areas) of normal production, calculated in accordance
with the criteria contained in the document. According
to the
covering
exclusively natural disasters within the meaning of
Article 87(2)(b) and weather events such as frost, hail,
rain, etc., which could be considered natural disasters
under Article 87(2)(b) would fall within category (a) and

insurance policies

criteria,

above

to at

(26) Letter from the Commission to Member States of 21 March 1989
(SG(89) D/3659) where it is stated that the 80 %, 50 % and 30 %
percentages can be exceeded in areas of high climatic risk in
especially justified cases.

would therefore be entitled to an 80 % aid rate. Any
policy covering,
in addition to the risks falling under
Article 87(2)(b), other risks not meeting the criteria for
being considered natural disasters under Article 87(2)(b)
would fall within category (b) and could therefore
benefit of a maximum 50 % aid rate. Policies exclusively
covering weather events which could not be considered
natural disasters under Article 87(2)(b) would fall under
category (c) and could only benefit from a maximum
and degressive aid rate of 30 % over a maximum period
of 10 years.

(104) Law No 185/92, which generically refers to insurance
contracts covering damage caused by adverse weather
events, provides for three types of contracts:

(a) compensation for the damage caused to specific
crops by hail, ice, frost and other adverse weather
events (Article 9(1)(a));

(b) compensation for the damage caused to a holding's
facilities and specific crops by all adverse weather
events affecting production beyond the normal
business risk. The losses may also be due to plant
diseases, if strictly related to adverse climatic events,
and to animal diseases. This type of contract also
includes damage to quality (Article 9(1)(b));

(c) compensation for the damage caused to the main
crops on the holding by all adverse weather events
whenever the level of damage exceeds the normal
business risk (27) (Article 9(1)(c)).

(105) The contracts above must be analysed in the light of the
provisions of point 4.2 of document VI/5934/86 Rev. 2.
Each type of insurance contract is assessed on its merits.

(27) As explained by the Italian authorities in their

letter of 20
November 2000, the main difference between the three types of
insurance contract above lies in the fact that contracts under (a)
concern damage to individual crops caused by individual weather
events; insurance contracts under (b) concern damage to individual
crops or facilities caused by a plurality of adverse events while
insurance contracts under (c) concern damage to more than one
crop caused by a plurality of events.

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Contracts provided for by Article 9(1)(a)

Contracts provided for by Article 9(1)(b) and 9(1)(c)

or

ice,

disasters

(106) Under Article 9(1)(a) of Law No 185/92, compensation
may be granted towards the payment of
insurance
contract premiums covering damage caused to specific
frost and other adverse weather
crops by hail,
exceptional
other
events. Natural
occurrences under Article 87(2)(b) of the Treaty are not
mentioned. As to adverse weather events, the Article
does not say whether the insurance contracts at issue
cover risks meeting the conditions for being considered
the Treaty
natural disasters under Article 87(2)(b) of
(minimum 30 % loss
areas; 20 % in
less-favoured areas). Indeed the Law does not specify a
minimum level of damage triggering the insurance
farmers
coverage specified. So, under Article 9(1)(a),
may receive aid towards the payment of
insurance
premiums for insurance contracts covering any type of
weather event, regardless of the level of losses actually
suffered.

in normal

(107)

In order to clarify the point above, in its letter of 19
April 2000 the Commission explicitly asked the Italian
authorities to specify whether the aids provided for by
Article 9(1)(a) of Law No 185/92 concerned insurance
schemes covering damage caused by hail, frost or other
adverse weather events regardless of the level of damage
caused by the event in question or whether there was a
minimum threshold of damage triggering compensation.
In their
the Italian
authorities omitted to reply to this question, stating
instead that Article 9 of Law No 185/92 had been
replaced by Presidential Decree No 324 of 17 May 1996
with a view to bringing national
legislation into line
with Community law.

letter of 20 November 2000,

(108)

In the absence of a specific reply from the Italian
authorities,
it appears that no specific condition was
attached to the grant of aids under Article 9(1)(a) of
Law No 185/92 which therefore could be granted for
any type of insurance covering adverse weather events
regardless of the actual
level of damage suffered as a
result of the event.

(109) These types of contract

therefore do not meet

the
conditions of either point 4.2(a) or point 4.2(b) of
document VI/5934/86 Rev. 2 and would therefore fall
under point 4.2(c) of the same document applying to
insurance covering any type of weather event
risk
regardless of the level of damage caused. In this respect
these contracts would be entitled to a 30 % degressive
aid rate over a maximum period of 10 years.

(110) Article 9(1)(b) and 9(1)(c) of Law No 185/92 concern
insurance
contracts covering damage caused by a
plurality of weather events affecting the value of
production beyond ‘ordinary level'. No reference is made
to natural disasters or exceptional occurrences under
Article 87(2)(b) of the Treaty. In order to see whether
these insurance contracts meet the conditions of either
point 4.2(a) or 4.2(b)
it is therefore necessary to see
whether the adverse weather events they cover can be
considered natural disasters or exceptional occurrences
under Article 87(2)(b).

(111)

letter of 20 November 2000,

In order to clarify this point, in its letter of 19 April
2000, the Commission asked the Italian authorities to
specify the exact meaning of
‘beyond ordinary level'
which was not quantified either in the Law or Circolare.
In their
the Italian
authorities replied that ‘beyond ordinary level' meant
that damage could be compensated only when it
exceeded a certain threshold, equal
to the farmer's
ordinary risk, which had to be paid by the farmer.
According to the Italian authorities, normal business
risk is considered to range between 10 and 15 % even
though insurance contracts may provide for a higher
business risk in order to contain costs. No specific
provision is however made to this end in any document.

(112) The weather events covered by the insurance contracts
described under Articles 9(1)(b) and 9(1)(c) of Law No
185/92 cannot therefore be considered natural disasters
within the meaning of Article 87(2)(b) as they do not
meet the conditions laid down to this end in document
VI/5934/86 Rev. 2.
follows that aids towards the
payment of the relevant insurance premiums do not
meet
the conditions of either point 4.2(a) or point
4.2(b) of the abovementioned working document and
would therefore fall under point
the same
document. These contracts could qualify for a maximum
30 % aid rate, degressive over a maximum 10-year
period.

(c) of

It

(113) Law No 185/92 does not set any specific aid rate for the
various types of
insurance contracts it provides for.
Details on the level of aid rates are only to be found in
the Circolare sent by the Italian authorities to the
Regions. The Circolare explains that
the fund (Cassa
sociale) of the consortium (out of which the insurance
premiums are paid) receives contributions from the
members of the consortium, from the State and from
the regional authorities as well as private and public
bodies. The contribution from the State accounts for
50 % of
That
contribution may be increased to 65 % in the case of
areas characterised by high climatic risk. No indication
is given as to the maximum aid that might be paid out

expenditure.

eligible

overall

the

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(114)

(115)

as a result of the possible accumulation of the state
contributions with regional contributions and with aids
coming from other public bodies.

In its letter of 19 April 2000, the Commission asked the
Italian authorities to indicate the maximum aid rate
which could be awarded. In their reply of 20 November
2000, the Italian authorities stated that the maximum
contribution to be paid by the State was 50 %, which
could be raised to 65 % in areas of high climatic risk. In
practice, according to the Italian authorities, the 65 %
aid rate had never been applied for lack of resources. In
general, State contributions ranged between 30 % and
40 %. In the cases (very few, according to the Italian
authorities) where a regional contribution was paid, as
is the case of the province of Trento, it never exceeded
25 to 30 %,
resulting in an overall public
contribution not exceeding 65 %.

thus

the

relevant

the payment of

In points 109 and 112, the Commission has concluded
that the insurance contracts provided for by Article 9 of
Law No 185/92 meet the conditions of point 4.2(c) of
working paper VI/5934/86 Rev. 2 and that therefore aid
towards
insurance
premiums could not exceed 30 % during the first year,
needed to be degressive and could only be paid for a
maximum period of 10 years. In the same paragraphs
the Commission has also concluded that the insurance
contracts at issue did not meet the conditions of either
point 4.2(a) or point 4.2(b) of working document
they authorise
VI/5934/86 Rev. 2 as,
farmers to receive aid towards the payment of insurance
premiums covering any type of weather event regardless
of the level of damage triggering compensation. These
contracts cannot therefore benefit from the higher aid
rates (80 % and 50 % respectively) referred to in the
aforementioned points.

in principle,

(116) Since, according to the Italian authorities, a maximum
aid rate of 50 % (65 % in high climatic risk areas) could
be paid by the State with respect
to the insurance
premiums provided for by Law 185/92, the maximum
30 % aid rate provided for by point 4.2(c) of working
document VI/5934/86-2 might not always have been
observed. Moreover, since there is nothing in the Law or
Circolare which limits the duration of the aid to 10
years or which obliges the public authorities to reduce
the aid progressively from the initial 30 % aid rate as
laid down in the applicable Community provisions,
it
cannot be ruled out that these conditions too have not
always been complied with.

(117) The Commission can therefore conclude that the aids
towards the payment of insurance premiums granted by
Italy on the basis of Law No 185/92 are compatible
with the common market under Article 87(3)(c) only to
the extent that they were granted in compliance with
the provisions of point 4.2(c) of working paper
VI/5934/86 Rev. 2, namely only to the extent that the
the aid was
aid rate did not exceed 30 % and that
degressive over a maximum period of 10 years. Any aid

paid by Italy on the basis of Law No 185/92 not
complying with the provisions of point 4.2(c) of the
working paper and at the same time not fulfilling all the
requirements of either point 4.2(a) or point 4.2(b) of
document VI/5934/86 Rev. 2 cannot benefit from any
of the derogations to Article 87(1) of the Treaty and is
therefore incompatible with the common market.

Presidential Decree No 324 of 17 May 1996

(118)

letter of 20 November 2000,

the Italian
In their
authorities clarified that Article 9 of Law No 185/92 on
subsidised insurance schemes had been replaced by
Presidential Decree No 324 of 17 May 1996
(Regolamento concernente norme sostitutive dell' art. 9
della legge 14 febbraio 1992, n. 185, sull' assicurazione
agricola agevolata). So the assessment of
the Italian
legislation on the compensation of damage caused by
natural disasters up to the entry into force of the new
Guidelines also needs to take this Decree into account.

(119) According to the Italian authorities,

the Decree was
issued in order
to bring the Italian legislation on
subsidised insurance (28) into line with Community law.
Presidential Decree No 324/96 explicitly lays down the
provisions relating to subsidised insurance contracts.
The types of contract which may benefit from public
contributions are exactly the same as those laid down in
Law No 185/92. The State contribution to these
contracts may be up to 50 % of eligible expenditure,
which may be increased to 65 % in areas characterised
by high climatic risk.

(120) The only difference between the new Presidential Decree
and Article 9 of Law No 185/92 it replaces lies in the
clear indication of the aid rates payable towards the
costs of insurance premiums, which was not contained
in Article 9. However, as in the case of Article 9 of Law
No 185/92, no indication is given as to the criteria
which the various types of insurance contract need to
meet to be entitled to aid. As in the case above, it is
therefore not possible to say whether all the types of
contract listed in Presidential Decree No 324/96 can
actually benefit from the 50 % or 65 % aid rates in the
case of high climatic risks provided for by the Decree.
is
Again, on the basis of

the Decree's wording,

it

(28) The Finance Act

for 2001 contains an Article which further
amends the Italian legislation on subsidised insurance to bring it
into line with the new Community Guidelines for State aid in the
agriculture sector. The latter is not covered by this Decision.

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possible to say that all the contracts mentioned could
benefit from the basic 30 % aid rate authorised by the
Commission in the case of insurance not covering also
natural disasters within the meaning of Article (87)(2)(b)
and this over a maximum period of 10 years phased out
degressively from an initial percentage equal to 30 % of
the cost of the insurance premiums.

(121) Moreover, the Decree only refers to the maximum aid
rate to be granted by the State for insurance premiums.
It does not say that these aid rates are the maximum aid
rates possible for this type of intervention. No reference
is made in the Decree either to possible accumulation
with aids for the same purpose granted out of public
funds at either regional or provincial
level. It cannot
therefore be ruled out that the 50 % (or 65 %) aid rate
laid down in the Decree may be exceeded far beyond
the aid rates acceptable under Community provisions.

(122)

towards

the payment of

In this respect again, the Commission concludes that the
insurance premiums
aids
granted by Italy on the basis of Law No 185/92 are
compatible with the common market under Article
87(3)(c) only to the extent that they were granted in
compliance with point 4.2(c) of working paper
VI/5934/86 Rev. 2, namely only to the extent that the
aid rate did not exceed 30 % and that
the aid was
degressive over a maximum period of 10 years. Any aid
paid by Italy on the basis of Law No 185/92 not
complying with point 4.2(c) of the working paper and
at the same time not fulfilling all the requirements of
either point 4.2(a) or point 4.2(b) of document
VI/5934/86 Rev. 2 cannot benefit
the
derogations
the Treaty and is
to Article 87(1) of
therefore incompatible with the common market.

from any of

IV. CONCLUSIONS

(126) According to the information provided by the Italian
authorities in their letter of 20 November 2000 (29), the
aids have never been implemented and do not need
therefore to be recovered.

(127) The aids towards the payment of insurance premiums
provided for by Article 9 of Law No 185/92 are
compatible with the common market in so far as they
comply with point 4.2(c) of working document
VI/5934/86 Rev. 2, namely in so far as they are granted
up to maximum aid rate of 30 % and are degressive
over a maximum 10-year period. Any aids towards the
payment of insurance premiums granted by the Italian
authorities on the basis of Article 9 of Law No 185/92
not complying with the abovementioned point 4.2(c)
(maximum aid rate of 30 %, degressive over a maximum
10-year period) and not fulfilling any of the conditions
entitling farmers to receive a higher rate in accordance
with the
and 4.2(b) of
Commission document VI/5934/86 Rev. 2 are not
compatible with the common market.

criteria of point 4.2(a)

(128) The aids towards the payment of insurance premiums
provided for by Presidential Decree No 324 of 17 May
1996 are compatible with the common market in so far
as they comply with point 4.2(c) of working document
VI/5934/86 Rev. 2, namely in so far as they are granted
up to maximum aid rate of 30 %, degressive over a
maximum 10-year period. Any aidstowards the payment
of insurance premiums granted by the Italian authorities
on the basis of Presidential Decree No 324 of 17 May
1996 not complying with the abovementioned point
4.2(c)
(maximum aid rate of 30 %, degressive over a
maximum 10-year period) and not fulfilling any of the
conditions entitling farmers to receive a higher rate in
accordance with the criteria of point 4.2(a) and 4.2(b)
of Commission document VI/5934/86 Rev. 2 are not
compatible with the common market.

(123) From the abovementioned considerations, it follows that
the aid measures provided for by Articles 3, 4 and 5 of
Law No 185 of 14 February 1992 concerning the grant
of aid for damage caused by natural disasters can be
considered compatible with the common market under
Article 87(2)(b) of the Treaty as aids designed to make
good the damage caused by natural disasters.

(129)

(124) The aid measures provided for by Article 6 of Law No
185/92 as
implemented by Ministerial Decree No
100460 of 18 March 1993 are compatible with the
common market under Article 87(3)(c) of the Treaty.

(125) The aid measures provided for by Article 8 of Law No
185/92 cannot benefit from any of the derogations to
Article 87(1) laid down in the Treaty and are therefore
incompatible with the common market.

legal certainty,

the principle of

Incompatible and illegally granted aid must, in principle,
be recovered (see also Article 14 of Council Regulation
(EC) 659/1999). However, the Commission has come to
in this case recovery would be
the conclusion that
contrary to the general principles of Community law, in
particular
the
reasons given below. First of all, the Commission notes
that working document VI/5934/86 has not been
published in the Official
the European
Communities. That, in itself, is not a sufficient reason for
non-recovery, since it is incumbent upon the beneficiary
it has been duly
of a State aid to verify whether
the
even where
the Commission,
approved
Commission does not have any published policy in the
sector concerned. In this case, however, the Commission
there is an ambiguity relating to
has noted that

Journal

for

by

of

(29) See paragraph 15.

L 31/20

EN

Official Journal of the European Union

4.2.2004

insurance in the Italian version of

the
agricultural
agricultural State aid guidelines published in 2000 (OJ C
232, 12.8.2000). This ambiguity is not there in any of
the other language versions. The ambiguity lies in the
fact that the Italian word for ‘also' is missing in the last
sentence of point 11.5.1 of the Italian version of the
guidelines. That imperfection in the Italian translation of
the aforementioned guidelines, together with the phrase
‘the aid rate is reduced to 50 % of
the
premium', and the fact that document VI/5934/86 was
not published in the Official Journal, may have created
the impression with Italian operators that until recently,
the Commission had a practice of approving higher aid
rates than 50 % also for insurance policies which did
not cover natural disasters and exceptional occurrences.
Under those circumstances, recovery is not appropriate.
The Commission will, however, publish a corrigendum
of
the guidelines as soon as
possible.

the Italian version of

the cost of

HAS ADOPTED THIS DECISION:

Article 1

1.
The aid measures designed to compensate farmers for
damage caused by natural disasters provided for by Articles 3,
4 and 5 of Law No 185/92 are compatible with the common
market under Article 87(2)(b) of the Treaty.

with the common market in so far as they comply with point
4.2(c) of working document VI/5934/86 Rev. 2, namely in so
far as they are granted up to maximum aid rate of 30 % and
are degressive over a maximum 10-year period.

The aids towards the payment of insurance premiums
6.
granted by the Italian authorities on the basis of Article 9 of
Law No 185/92 not complying with point 4.2(c) of working
document VI/5934/86 Rev. 2 and not fulfilling any of the
rate in
conditions entitling farmers
accordance with the criteria of point 4.2(a) and 4.2(b) of
Commission document VI/5934/86 Rev. 2 are not compatible
with the common market.

to receive a higher

7.
The aids towards the payment of insurance premiums
provided for by Presidential Decree No 324 of 17 May 1996
are compatible with the common market in so far as they
comply with point 4.2(c) of working document VI/5934/86
Rev. 2, namely in so far as they are granted up to maximum
aid rate of 30 %, degressive over a maximum 10-year period.

8.
The aids towards the payment of insurance premiums
granted by Italy on the basis of Presidential Decree No 324 of
17 May 1996 not complying with point 4.2(c) of working
document VI/5934/86 Rev. 2 (maximum aid rate of 30 %,
degressive over a maximum 10-year period) and not fulfilling
any of the conditions entitling farmers to receive a higher rate
in accordance with the criteria of point 4.2(a) and 4.2(b) of
Commission document VI/5934/86 Rev. 2 are not compatible
with the common market.

Article 2

2.
The measures provided for by Article 6 of Law No
185/92 do not constitute aids within the meaning of Article
87(1) of the Treaty.

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

3.
The aid measures provided for by Ministerial Decree No
100460 of 18 March 1993 are compatible with the common
market under Article 87(3)(c) of the Treaty.

Article 3

This Decision is addressed to the Italian Republic.

4.
The aids concerning active defence measures against
weather events provided for by Article 8 of Law No 185/92
are incompatible with the common market.

Done at Brussels, 9 July 2003.

The aids towards the payment of insurance premiums
5.
provided for by Article 9 of Law No 185/92 are compatible

For the Commission

Franz FISCHLER

Member of the Commission