2003/884/EC: Commission Decision of 15 October 2003 concerning aid that the region of Sicily plans to grant in the citrus fruit sector (notified under document number C(2003) 3550)
Date: 2003-10-15
Institutions: European Commission
Subjects: Sicily, State aid, citrus fruit, control of State aid

L 330/30

EN

Official Journal of the European Union

18.12.2003

COMMISSION DECISION

of 15 October 2003

concerning aid that the region of Sicily plans to grant in the citrus fruit sector

(notified under document number C(2003) 3550)

(Only the Italian text is authentic)

(2003/884/EC)

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

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

Having given notice to the parties concerned to submit their
comments in accordance with that Article,

Whereas:

(1)

(2)

(3)

(4)

(5)

(6)

I. PROCEDURE

By letter dated 15 December 1999, registered on 20
December 1999, the Italian Permanent Representation to
the European Union notified the Commission, pursuant
to Article 88(3) of the Treaty, of Sicilian Regional Law
No 22/1999, providing for emergency measures in the
agricultural sector. The notification was registered under
No 795/99.

registered on 9
By letters dated 6 October 2000,
October 2000, 1 February 2001,
registered on 5
February 2001, and 30 July 2001, registered on 1
August 2001, the Italian Permanent Representation to
the European Union provided the Commission with
additional information on Regional Law No 22/1999 as
requested by letters dated 23 February 2000, 20
November 2000 and 27 March 2001.

By letter dated 25 September 2001 (1), the Commission
informed Italy that it had decided to initiate the proce-
dure provided for in Article 88(2) of the Treaty with
regard to the aid provided for in Articles 1 to 6 of
Regional Law No 22/1999. The procedure was registered
under No C 65/2001.

The Commission decision initiating the procedure was
published in the Official Journal of the European Commu-
nities (2). The Commission invited interested parties to
present their comments on the aid concerned.

The Commission has received no comments from inter-
ested parties.

By letter dated 28 May 2003, registered on 4 June 2003,
the Italian Permanent Representation to the European
Union forwarded a letter from the Italian authorities
in Article 5 of
asking for

the aid provided for

(1) Letter SG(2001) D/260216.
(2) OJ C 315, 9.11.2001, p. 12.

(7)

(8)

(9)

Regional Law No 22/1999 to be made the subject of a
separate decision in view of its close relationship to aid
provided for under a national aid scheme already
authorised by the Commission (3).

In response to the request, the Commission decided to
split case C 65/2001 into two parts: part A concerning
the aid provided for in Article 5 of Regional Law No 22/
1999 and part B concerning the aid provided for in Arti-
cles 1, 2, 3, 4 and 6 of that law.

This Decision concerns solely part A of case C 65/2001,
i.e. solely the aid provided for in Article 5 of Regional
Law No 22/1999. This Decision does not prejudice the
decision that will be adopted concerning part B of the
case.

II. DESCRIPTION OF THE AID PROVIDED FOR IN

ARTICLE 5 OF REGIONAL LAW No 22/1999

Article 5 of Regional Law No 22/1999 authorises the
Regional Minister for Agriculture and Forestry to contri-
bute a maximum of ITL 10 billion (EUR 5 164 569) to
the operations and assistance measures provided for in
the national citrus cultivation plan. This funding is in
addition to that already provided for in that plan for the
region of Sicily.

III. INITIATION OF THE PROCEDURE PROVIDED FOR

IN ARTICLE 88(2) OF THE TREATY

(10)

The Commission initiated the procedure provided for in
Article 88(2) of the Treaty for the following reasons:

request

(a) in the letter forwarded by the Italian Permanent
in reply to the
Representation on 30 July 2001,
Commission's
information dated 27
for
March 2001, the Italian authorities stated that they
had already forwarded all the information necessary
for examining the aid provided for in Regional Law
No 22/1999 and that they were not in a position to
supply any further information. They therefore asked
the Commission to adopt a decision on the aid
concerned within two months in accordance with
Article 4(5) of Council Regulation (EC) No 659/
1999 laying down detailed rules for the application
of Article 93 (now Article 88) of the EC Treaty (4);

(3) The national citrus cultivation plan authorised by the Commission
in aid cases N 560/99 (letter SG(2000) D/103679 of 16 May 2000)
and N 313/2001 (Decision C(2003) 369 final of 5 February 2003,
notified to the Italian authorities by letter SG(2003) D/228423 of 7
February 2003).

(4) OJ L 83, 27.3.1999, p. 1.

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(b) when it received the abovementioned letter,

the
Commission had not completed its examination of
the measures provided for in the national citrus
cultivation plan and was therefore unable to decide
whether or not
the measures it contained were
compatible with the common market;

(c) in view of the continuing doubt about the compat-
ibility of the measures concerned with the common
the Commission could not but express
market,
doubts regarding the compatibility of aid that might
be financed by means of the funding made available
in Article 5 of Regional Law No 22/1999, which
was intended to complement the central government
funding provided for in the national citrus cultiva-
tion plan.

(11)

(12)

(13)

(14)

IV. COMMENTS BY THE ITALIAN AUTHORITIES

the Italian authorities,
the initiation of

By letter forwarded by the Italian Permanent Representa-
in
tion on 29 April 2002,
response to the notification of
the
procedure provided for in Article 88(2) of the Treaty,
repeated that they were unable to supply any further
information regarding the rules governing the use of the
funding made available to the citrus fruit sector in
Article 5 of Regional Law No 22/1999 because those
rules had to be laid down in the light of the conclusions
of the examination of the national citrus cultivation plan
being carried out by the Commission. They nevertheless
undertook not to use the funding in question until the
Commission had approved that plan.

In the letter from the Italian Permanent Representation
dated 28 May 2003, the Italian authorities, in asking for
the aids provided for in Article 5 of Regional Law No
22/1999 to be the subject of a separate decision,
confirmed that the funding provided pursuant to that
Article would be used in accordance with the rules for
the grant of the aid authorised by Commission Decision
C(2003) 369 final of 5 February 2003 (hereinafter ‘Deci-
sion C(2003) 369 final’).

By letter dated 10 July 2003, registered on 11 July
2003, the Italian Permanent Representation forwarded
to the Commission a letter from the Italian authorities
stating that
the sums allocated in accordance with
Article 5 of Regional Law No 22/1999 had not been
used and that
they would be used only when the
Commission had authorised the rules governing their
use.

By letter dated 13 August 2003, registered on 18
August, the Italian Permanent Representation forwarded
a further letter from the Italian authorities assuring the
Commission that the cumulation of aid granted under
the national citrus cultivation plan with central govern-
ment funding and regional funding pursuant to Article 5
of Regional Law No 22/1999 would be allowed only

within the limits on rates of aid laid down in the Region
of Sicily's programming documents, which are those
authorised in Decision C(2003) 369 final. In the same
letter,
the Sicilian regional authorities assured the
Commission that checks on the various types of aid
granted in the citrus fruit sector had been entrusted to a
single managing body responsible for verifying compli-
ance with the authorised rates of aid in the event of
cumulation.

V. EVALUATION

(15) According to Article 87(1) of the Treaty, 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 is, in so far as it affects trade
between Member States, incompatible with the common
market. The measures in question fall into that category
in that they favour the production of certain fruit (citrus
fruit) and are likely to affect trade given the position
Italy occupies in Community production of the fruit
concerned (in 2000,
Italy accounted for 31 % of all
Community citrus fruit production).

(16) However, in the cases provided for in Article 87(2) and
(3) of the Treaty, certain measures may, by way of dero-
compatible with the
gation, be considered to be
common market.

(17)

(18)

(19)

In the case under examination, in view of the nature of
the measures concerned, the only derogation that could
be granted is that provided for in Article 87(3)(c) of the
Treaty, on the basis of which aid to facilitate the devel-
opment of certain economic activities or of certain
economic areas, where such aid does not adversely affect
trading conditions to an extent contrary to the common
interest, may be considered to be compatible with the
common market.

The funding provided for in Article 5 of Regional Law
No 22/1999 is intended to complement the aid provided
by the central government for the implementation of the
national citrus cultivation plan, which covers six regions
of southern Italy: Campania, Apulia, Basilicata, Calabria,
Sicily and Sardinia.

‘research and development’,

seven
The national citrus cultivation plan contains
‘citrus
measures. Six of
these (‘market monitoring’,
‘communication
register’,
and promotion’,
‘aids for the creation of cooperatives
and associations of producers of quality products’ and
‘technical assistance and monitoring’) were authorised as
aid N 560/99. The Commission authorised the seventh
measure, ‘support and part-financing of integrated assis-
tance schemes
increasing the market value of
products and strengthening producer organisations’ as
aid N 313/01.

for

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(20)

The planned aid for Sicily N 313/01 and the rules for
granting that aid are as follows:

(a) for investments relating to varietal conversion: aid
equal to 50 % of eligible expenditure for investments
in agricultural holdings in less-favoured areas and
40 % for investments in other areas, with the possi-
bility of increasing those rates by five percentage
points for young farmers making investments during
the first five years after setting up (eligible expendi-
ture is that defined in the 2000-06 regional opera-
tional programme (ROP) for Sicily, authorised by the
Commission, and the programme complement);

(b) for

the ‘Marketing and communication services

scheme’:

(i) aid for technical and organisational assistance of
up to EUR 100 000 per beneficiary per three-
year period or 50 % of eligible expenditure for
SMEs;

(ii) aid for the purchase of computing equipment
(hardware and software) equal
to 50 % of
eligible expenditure within the meaning of point
4.2 of the Community guidelines for State aid in
sector (1)
the
undertakings
processing and marketing agricultural products
and aid equal to 50 % in less-favoured areas and
40 % in other areas for agricultural holdings;

agriculture

for

(iii) for measures to improve product quality:

— aid for

investments

in quality assurance
systems (rate of 50 % for holdings in less-
favoured areas and 40 % for holdings in
other areas, with the possibility of increasing
those rates by five percentage points for
young farmers making investments during
the first five years after setting up). In the
case of collective investments outside hold-
ings, the planned rate is 50 % (Sicily is an
Objective 1 region) and the increase of five
percentage
farmers
provided for in the plans does not apply,

young

points

for

— aid equal to 100 % of eligible expenditure,
up to a maximum of EUR 100 000 per
beneficiary per three-year period, or equal to
50 % of eligible expenditure for SMEs, for
the provision of assistance with the intro-
duction of quality assurance standards, the
preparation of applications for registration
as PDOs (protected designations of origin),
PGIs
indications)
and CSCs (certificates of specific character),
the introduction of voluntary quality stan-

(protected geographical

dards and HACCP systems (hazard analysis
and critical control points) and for staff
training for the application of quality assur-
ance standards,

— temporary and decreasing aid during the six
years following the introduction of a control
system to guarantee the authenticity of
PDOs, PGIs and CSCs
(rates applicable
during those years: 100 %, 85 %, 70 %,
55 %, 40 %, 25 %, 0 %),

— temporary and decreasing aid during the six
years up until 2006 (rates applicable during
those years: 100 %, 85 %, 70 %, 55 %, 40 %,
25 %, 0 %) for monitoring the use of quality
marks under quality guarantee schemes;

(iv) for communication and promotional measures:

— aid equal to 100 % of eligible expenditure,
up to a maximum of EUR 100 000 per
beneficiary per three-year period, or equal to
50 % of eligible expenditure for SMEs, for
promotional activities such as the organisa-
tion of competitions, fairs and exhibitions
and for carrying out studies,

— aid equal to 50 % of eligible expenditure for
publicity measures; the agricultural holdings
concerned must bear the remaining expendi-
ture by means of a direct contribution,
parafiscal
compulsory
charges or other
contributions;

(c) for the ‘Scheme for the reorganisation and moderni-

sation of production structures’:

(i) for the reorganisation of first processing, packa-
ging and processing structures and the technolo-
gical upgrading of processing and marketing
facilities on agricultural holdings, within the
maximum limits on investment laid down in
Article 7 of Council Regulation (EC) No 1257/
1999 (2): maximum aid of 50 % of eligible
expenditure in less-favoured areas and 40 % in
other areas, with the possibility of raising this to
55 % and 45 % respectively for young farmers
during the first five years after setting up with
an additional 25 and 20 percentage points
respectively where the investments permit a
holding to meet
the minimum Community
environmental requirements or to meet newly
introduced standards (in accordance with the
conditions laid down in Article 1(2) of Commis-
sion Regulation (EC) No 445/2002 (3)) without
increasing production capacity;

(1) OJ C 28, 1.2.2000, p. 2. Corrected version in OJ C 232, 12.8.2000,

p. 17.

(2) OJ L 160, 26.6.1999, p. 80.
(3) OJ L 74, 15.3.2002, p. 1.

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(ii) for the reorganisation of first processing, packa-
ging and processing structures and the technolo-
gical upgrading of processing and marketing
facilities of beneficiaries other than farmers (for
example, producer organisations): aid equal to a
maximum of 50 % of eligible expenditure;

(iii) for upgrading the safety of the plant and intro-
ducing HACCP on agricultural holdings: aid
equal to a maximum of 50 % of eligible expen-
diture in less-favoured areas and 40 % in other
areas, with the possibility of raising this to 55 %
and 45 % respectively for young farmers during
the first five years after setting up;

(iv) for upgrading the safety of the plant and intro-
ducing HACCP for beneficiaries other
than
farmers (for example, producer organisations):
aid equal to a maximum of 50 % of eligible
expenditure;

(v) for the computerisation of processing on agri-
cultural holdings, within the maximum limits
on investment laid down in Article 7 of Regu-
lation (EC) No 1257/1999: aid equal
to a
maximum of 50 % of eligible expenditure in
less-favoured areas and 40 % in other areas, with
the possibility of raising this to 55 % and 45 %
respectively for young farmers during the first
five years after setting up;

(vi) for the computerisation of the processing opera-
tions of beneficiaries other than farmers (for
example, producer organisations): aid equal to a
maximum of 50 % of eligible expenditure.

(21)

Pursuant to Decision C(2003) 369 final, the Commission
decided not to raise any objections to the aid referred to
in recital 20, since the Italian authorities assured the
Commission that the aid would be granted on conditions
that allow it to be considered to be compatible with the
common market.

(22)

VI. CONCLUSIONS

The funding provided for in Regional Law No 22/1999
is intended to complement central government funding
for the implementation of the national citrus cultivation
plan and will be used on the same conditions as
authorised by the Commission in Decision C(2003) 369
final. The cumulation of aid will be monitored centrally,
which will prevent the maximum permissible rates of
aid being exceeded. Therefore the Commission no longer
has any reason to doubt that the rules on the use of the
aid in question are compatible with the common market
and concludes that the aid financed by means of the
funding concerned can benefit
from the derogation
provided for in Article 87(3)(c) of the Treaty, as aid to
facilitate the development of certain economic activities
or of certain economic areas without adversely affecting
trading conditions to an extent contrary to the common
interest,

HAS ADOPTED THIS DECISION:

Article 1

The aid of ITL 10 billion (EUR 5 164 569) that the region of
Sicily plans to grant in the citrus fruit sector under Article 5 of
Regional Law No 22/1999 is compatible with the common
market.

Implementation of the aid scheme is accordingly authorised.

This Decision is addressed to the Italian Republic.

Article 2

Done at Brussels, 15 October 2003.

For the Commission

Franz FISCHLER

Member of the Commission