Proposal for a Council Regulation amending Regulation (EC) No 1453/2001 introducing specific measures for certain agricultural products for the Azores and Madeira and repealing Regulation (EEC) No 1600/92 (Poseima) with respect to the application of the supplementary levy in the milk and milk products sector in the Azores
Date: 2003-10-15
Institutions: European Commission
Subjects: Azores, Madeira, milk, milk product, production aid

COMMISSION OF THE EUROPEAN COMMUNITIES

Brussels, 15.10.2003
COM(2003) 617 final

2003/0244 (CNS)

Proposal for a

COUNCIL REGULATION

amending Regulation (EC) No 1453/2001 introducing specific measures for certain
agricultural products for the Azores and Madeira and repealing Regulation (EEC)
No 1600/92 (POSEIMA) with respect to the application of the supplementary levy
in the milk and milk products sector in the Azores

(presented by the Commission)

EXPLANATORY MEMORANDUM

Milk is the main resource associated with agricultural activity in the Azores. The milk sector
offers a secure income, and finding viable alternative activities rapidly would be difficult. In
1999/2000  the  level  of  production  stood  at  500 000 tonnes  and  in  2002/03  considerably
exceeded that, reaching 522 500 tonnes.

Beyond that level, there  is  a danger of disturbance to the overall balance  of  the  agricultural
markets  in  the  Azores  and  the  protection  of  the  environment.  Milk  production  should  be
stabilised  therefore  and  the  producers  concerned  given  the  opportunity  of  adapting  to  the
control mechanism which quotas represent.

In  2002/03,  the  quota  for  producers  established  in  the  Azores  was  nearly  450 000 tonnes.
Under  the  political  agreement  reached  in  Luxembourg  on  26  June  2003  it  was  decided  to
allocate to them an additional quota of 50 000 tonnes from the 2005/06 marketing year as part
of the quota arrangements, which were extended to 2014/15.

The  production  target  which  has  now  been  assigned  to  producers  in  the  Azores  is
500 000 tonnes. To comply with it, they will need a longer period of adjustment.

The  specific  measure  provided  for  in  Article  23  of  Council  Regulation  (EC)  No 1453/2001
(POSEIMA) could meet that aim.

The extension takes place against the background of the political agreement of June 2003, in
which it was decided to prolong the application of this measure up to the 2004/05 marketing
year and provide for a phased reduction.

In order to lessen this impact, it is proposed to prolong the specific measure.

This matter is going to be raised at the forthcoming meeting on 16 and 17 October 2003 of the
European Council, which in all likelihood is going to state that it is in favour of extending the
special arrangements for producers in the Azores.

This proposal gives substance to those policy directives.

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2003/0244 (CNS)

Proposal for a

COUNCIL REGULATION

amending Regulation (EC) No 1453/2001 introducing specific measures for certain
agricultural products for the Azores and Madeira and repealing Regulation (EEC)
No 1600/92 (POSEIMA) with respect to the application of the supplementary levy
in the milk and milk products sector in the Azores

THE COUNCIL OF THE EUROPEAN UNION,

Having  regard  to  the  Treaty  establishing  the  European  Community,  and  in  particular
Article 299(2) thereof,

Having regard to the proposal from the Commission1,

Having regard to the opinion of the European Parliament2,

Whereas:

(1) 

(2) 

(3) 

1

2

3

4

5

Article 23 of Council Regulation (EC) No 1453/20013 introduced for a period of four
marketing  years  beginning  in  1999/2000  a  derogation  from  certain  provisions  of
Council  Regulation  (ECC)  No  3950/92  of  28  December  1992  establishing  an
additional levy in the milk and milk products sector4 as regards the Azores. Regulation
(EC)  N°  …/2003  establishing  common  rules  for  direct  support  schemes  under  the
common agricultural policy and establishing certain support schemes for farmers5 has
amended  Article  23  of  Regulation  (EC)  No  1453/2001  in  order  to  extend  the
aforementioned  period  to  six  marketing  years  and  has  fixed  the  amounts  of  that
extension.

However, restructuring of the milk sector in the Azores has not yet been achieved. In
order  to  take  account  of  the  high  level  of  dependence  on  milk  production  in  the
Azores,  combined  with  other  handicaps  linked  to  their  outermost  location  and  the
absence of viable  alternative  production,  the  relevant  period  should  be  extended  and
the amounts of this further extension fixed.

This  measure  is  restricted  to  milk  producers  in  the  Azores.  Over  the  period  of  its
application,  this  measure  should  enable  the  sector  in  the  Azores  to  continue  being
restructured  without  interfering  with  the  milk  market  and  without  appreciably
affecting the sound working of the levy scheme at the Portuguese or Community level.

OJ C …, …., p. …
OJ C …, …., p. …
OJ L 198, 21.7.2001, p. 26. Regulation as last amended by Regulation (EC) No …/2003  establishing
common rules for direct support schemes under the common agricultural policy and establishing certain
support schemes for farmers (not yet published in the OJ).
OJ L 405, 31.12.1992, p. 1. Regulation last amended by regulation (EC) No…/2003.
Not yet published in the OJ.

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HAS ADOPTED THIS REGULATION:

Article 1

Article 23 of Council Regulation (EC) No 1453/2001 shall be replaced by the following:

1.

2.

"Article 23

As from marketing  year 1999/2000, for  the purposes of  sharing  the  additional  levy
between  the  producers  referred  to  in  the  second  sentence  of  Article 2(1)  of
Regulation  (EEC)  No 3950/92,  only  producers  as  defined  in  Article  9(c)  of  that
Regulation,  established  and  producing  in  the  Azores,  who  market  quantities
exceeding their reference quantity increased by the percentage referred to in the third
subparagraph shall be deemed to have contributed to the overrun.

The  additional  levy  shall  be  due  on  quantities  exceeding  the  increased  reference
quantity after reallocation of the unused quantities within the margin resulting from
this increase among the producers referred to in the first paragraph and in proportion
to the reference quantity available to each producer.

The percentage referred to in the first paragraph shall be equal to the ratio between
the quantities respectively of 73 000 tonnes for the period 1999/2000 to 2004/05 and
23 000  tonnes  as  from  marketing  year  2005/06  and  the  total  of  the  reference
quantities  available  on  each  holding  on  31 March 2000.  It  shall  apply  for  each
producer  only 
that  producer  on
31 March 2000.

the  reference  quantities  available 

to 

to 

The  quantities  of  milk  or  milk  equivalent  marketed  which  exceed  the  reference
quantities  but  which  comply  with  the  percentage  referred  to  in  paragraph  1  of  this
Article,  after  the  reallocation  referred  to  in  that  same  paragraph,  shall  not  be  taken
into account in establishing any overrun in Portugal as calculated in accordance with
the first sentence of Article 2(1) of Regulation (EEC) No 3950/92."

Article 2

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

It shall apply as from 1 April 2003.

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

Done at Brussels,

For the Council
The President

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1.

2.

3.

4.

5.

5.0

5.1

FINANCIAL STATEMENT

BUDGET HEADING:
B1-2000
B1-2001

APPROPRIATIONS:
EUR 420 million
EUR 176 million

TITLE:
Council  Regulation  amending  Regulation  (EC)  No  1453/2001  introducing  specific  measures  for
certain agricultural products for the Azores and Madeira and repealing Regulation (EEC) No 1600/92
(POSEIMA) with respect to the application of the supplementary levy in the milk and milk products
sector in the Azores

LEGAL BASIS:
Article 299(2) of the Treaty

AIMS OF PROJECT:
Specific measures for the production of milk in the Azores

FINANCIAL IMPLICATIONS

CHARGED TO THE EC BUDGET

NATIONAL ADMINISTRATION
OTHER

EXPENDITURE
-
(REFUNDS/INTERVENTION)
-
-
REVENUE
-
(LEVIES/CUSTOMS DUTIES)
-

NATIONAL

OWN RESOURCES OF THE EC

5.0.1 ESTIMATED EXPENDITURE
5.1.1 ESTIMATED REVENUE

5.2 METHOD OF CALCULATION:

PERIOD OF
12 MONTHS
(First year)
(EUR million)
1.4

CURRRENT
FINANCIAL
YEAR 2003
(EUR million)
-

FOLLOWING
FINANCIAL
YEAR 2004
(EUR million)
-

-

-

-

2005
1.4
-

2006
2.4
-

2007
2,1
-

(n+5)
2,0
-

Additional quantities:

2004/05 marketing year = 11 500 t
as from marketing year 2005/06 = 23 000 t

Cost of disposing of equivalent quantities of butter and skimmed-milk powder

6.0

6.1

CAN THE PROJECT BE FINANCED FROM APPROPRIATIONS ENTERED IN
THE RELEVANT CHAPTER OF THE CURRENT BUDGET?

CAN THE PROJECT BE FINANCED BY TRNSFER BETWEEN CHAPTERS OF
THE CURRENT BUDGET?

6.2

IS A SUPPLEMENTARY BUDGET NECESSARY?

6.3 WILL FUTURE BUDGET APPROPRIATIONS BE NECESSARY?

YES / NO

YES / NO

YES / NO

YES / NO

OBSERVATIONS:

It is assumed that, in the absence of the measure, the reference quantities would be observed. Consequently,
the  additional  costs  arising  from  the  measure  are  calculated  on  the  basis  of  the  cost  of  disposing  of  the
additional quantity and not on the basis of a loss of additional levy.
In contrary circumstances, the cost of not collecting the additional levy for the four marketing years will be:
EUR 3.8 million, EUR 7.1 Million, EUR 6.6 Miollion and EUR 6.4 million.

5