Proposal for a Council Regulation amending Regulation (EC) No 1782/2003 establishing common rules for direct support schemes under the common agricultural policy and establishing certain support schemes for farmers
Date: 2003-11-18
Institutions: European Commission
Subjects: aid per hectare, aid system, common agricultural policy, common organisation of markets, cotton, hops, olive oil, production aid, tobacco

COMMISSION OF THE EUROPEAN COMMUNITIES

Brussels, 18.11.2003
COM(2003) 698 final

2003/0278 (CNS)
2003/0279 (CNS)

Proposal for a

COUNCIL REGULATION

amending Regulation (EC) No 1782/2003 establishing common rules
for direct support schemes under the common agricultural policy
and establishing certain support schemes for farmers

Proposal for a

COUNCIL REGULATION

on the common organisation of the market in olive oil and table olives
and amending Regulation (EEC) No 827/68

(presented by the Commission)

EXPLANATORY MEMORANDUM

1. 

INTRODUCTION COMMON TO THE FOUR SECTORS INVOLVED

Since  1992,  the  common  agricultural  policy  (CAP)  has  been  immersed  in  a
fundamental  reform  process,  aimed  at  moving  away  from  a  policy  of  price  and
production support to a more  comprehensive  policy  of farmer income support.  The
latest step in this process was the adoption by the Council on 29 September 2003 of
the proposal for Regulation (EC) No 1782/2003 establishing common rules for direct
support  schemes  under  the  common  agricultural  policy  and  establishing  certain
support schemes for farmers.

As  the  next  step  in  the  reform  process,  the  Commission  proposes  to  integrate  the
current support schemes for cotton, olive oil and table olives, tobacco and hops in the
above-mentioned.  Consequently,  the  proposal  is  based  on  the  same  objectives  of
enhanced  competitiveness,  stronger  market-orientation,  improved  environmental
respect,  stabilised  incomes  for  farmers  and  a  higher  regard  for  the  situation  of
producers  in  least  favoured  areas.  Priority  is  given  to  producer  income  and  not  to
production  support,  through  the  transfer  of  a  significant  part  of  the  current
production-linked expenditure to the single payment scheme established by the new
horizontal regulation.

However,  specific  circumstances  prevail  as  regards  the  sectors  of  cotton,  olive  and
tobacco, which  show  a  tendency  to  concentrate  their  production  in  regions  that  are
notably lagging behind in their economic development. The proposal therefore takes
into account the potential impact of a full de-coupling in these sectors, in particular
the risk of production abandonment  and  a  declining  competitiveness  of  rural  areas.
For that reason, a part of the expenditure should continue to be sector-specific in the
case of cotton and olive cultivation and the integration of raw tobacco in the single
payment  scheme  should  be  carried  out  gradually.  As  far  as  hops  is  concerned,
Member  States  may  retain  a  percentage  of  the  aid  to  allow  for  a  coupled  aid.  The
essential elements of the envisaged regime are described below.

2. 

THE NEW ARRANGEMENTS FOR COTTON

2.1. 

Introduction

The Commission proposes to transfer the part of the EAGGF expenditure for cotton
that  was  destined  to  producer  support  during  the  2000–2002  reference  period,  into
the  funding  of  two  support  measures,  namely,  the  single  payment  and  a  new
production aid, granted as an area payment, which would respond to the objective of
supporting the production of cotton in the  regions concerned as provided for  in  the
Cotton  Protocols  attached  to  the  Acts  of  Accession  of  Greece  and  of  Spain  and
Portugal.  The  rest  of  the  expenses  for  cotton  will  be  transferred  to  the  rural
Development measures for the regions concerned.

The budget destined to cover both measures is established on the basis of the average
expenditure on aid to this sector in the reference years reduced by the amounts that
were received by the ginners but not necessarily transferred to the producers. These
amounts  correspond  to  two  different  concepts.  First,  account  is  taken  of  the
difference  between  the  guide  price  and  the  minimum  price  (€53,1  per  tonne)

2

multiplied by the average eligible production, which results in €82,1 million. To this
must be added the difference between the average of the world prices on which the
aid applications have been fixed and the average of the actual world price during the
same  period,  multiplied  by  the  concerned  production,  which  results  in  a  total  of
€25,4  million.  This  difference  between  average  world  prices  is  due  to  the  existing
possibility for the  ginners to either prefix or postfix the world price on the basis of
which the aid is calculated.

Consequently,  the  total  amount  to  be  deducted  from  the  average  budget  spent  on
production  aid  during  the  reference  period  is  €107,5  million.  Considering  that  the
total average budget is of €803 million, the total amount to be allowed to the single
payment scheme and the new production aid for cotton is €695,8 million, distributed
as follows: €504,4 million for Greece, €190,8 million for Spain and €0,565 million
for Portugal.

2.2. 

Direct aid to farmers

2.2.1.  Production aid per hectare of cotton

The  production  aid  per  hectare  of  cotton  must  be  determined  in  such  a  way  as  to
ensure  economic  conditions  which,  in  regions  which  lend  themselves  to  that  crop,
enable  activity  in  the  cotton  sector  to  continue  and  therefore  make  it  interesting  in
relation to other competing arable crops.

Given, on the one hand, the fluctuations in the margins of competing crops between
producer Member States and, on the other hand, the de-coupling percentages decided
upon in the context of the 2003 Common Agricultural Policy reform, it is proposed
that  40%  of  the  budget  envelope  for  producer  support  be  destined  to  the  aid  per
hectare.  On  the  basis  of  the  above  mentioned  €695,8  million  budget,  this  would
correspond to €278,5 million, i.e. €202 million in Greece, €76,3 million in Spain and
€0,2 million in Portugal.

For environmental and quality reasons, the areas on which cotton can be grown and
the  appropriate  varieties  that  can  be  sown  will  have  to  be  authorised  by  Member
States. In addition, the aid per hectare of cotton will be limited to a maximum area
per Member State.

In Greece, the area under cotton  totalled  at least 400 000 hectares  over  each of the
five years before 2001. Since then, due to the introduction of specific measures under
Article 17  of  Regulation  (EC) No 1051/2001,  aiming  in  particular  at  environmental
considerations, the areas have gradually fallen to around 370 000 ha. With a view to
continue this downward trend, the maximum area for Greece should accordingly be
set  at  340 000 ha,  i.e. 11%  less  than  the  average  eligible  areas  for  the  period  from
2000/01 to 2002/03.

The maximum areas for the other producing Member States must be fixed taking into
account  the  differences  in  the  average  overshoot  of  the  National  Guaranteed
Quantities  (NGQ)  since  1995,  which  is  2,2  times  higher  in  Greece  than  in  Spain.
Accordingly, the maximum area is proposed at 85 000 ha in Spain, i.e. 5% below the
average  eligible  area  for  the  period  2000/01  to  2002/03.  In  Portugal,  where  there
have  been  no  overshoots  of  the  NGQ,  the  maximum  area  can  be  set  at  360  ha,
corresponding to the average eligible area in 2000/01 to 2002/03.

3

The  above  mentioned  available  amounts  and  the  maximum  areas  proposed  per
Member state result in a unit aid per hectare fixed at €594 in Greece, €898 in Spain
and €556 in Portugal. In case the eligible area under cotton exceeded the maximum
area, the aid per hectare would be reduced proportionally.

As other direct aids to producers that aid per hectare of cotton will have to comply
with  horizontal  obligation 
like  cross-compliance,  modulation  and  financial
discipline.

2.2.2.  Direct income aid

In  the  light  of  the  total  budget  available  for  direct  product  support  for  cotton,  and
taking  into  account  the  40%  share  allocated  to  production  aid,  the  balance  of  the
budget available for direct income aid is €302,4 million in Greece, €114,5 million in
Spain and €0,365 million in Portugal, i.e. a total of €417,3 million.

The entitlements per producer will have to be calculated on the basis of the eligible
areas under cotton in the marketing years 2000/01 to 2002/03. On average, these total
469 816 ha, i.e. 380 436 ha in Greece, 89 023 ha in Spain and 357 ha in Portugal.

Consequently,  the  direct  income  aid  to  producers  in  respect  of  eligible  areas  under
cotton in 2000/01 to 2002/03 shall be calculated on the basis of €795 per hectare in
Greece, €1 286 per hectare in Spain and €1 022 per hectare in Portugal.

The  inclusion  in  the  single  payment  scheme  obviously  implies  that  cotton  will  be
subject  to  the  same  horizontal  rules  – in  particular  in  terms  of  environmental
requirements –  as  those  applicable  to  the  other  crops  covered  by  the  de-coupled
payments.

2.3. 

Inter-branch organisations

In  order  to  allow  producers  and  ginners  to  enhance  the  quality  of  the  cotton
produced, it is proposed to encourage the establishment of inter-branch organisations
made  up  by  cotton  producers  and  at  least  one  ginner.  These  inter-branch
organisations  could  establish  rules  on  certain  aspects  of  the  contracts  between  the
grower  and  the  ginner  with  a view to  obtaining  a  quality  which  is  adapted  to  local
economic  and  environmental  conditions  and  for  which  there  is  market  demand,
taking commercial ginning requirements into account.

The  inter-branch  organisations  shall  be  authorised  to  lay  down  a  scale  for
differentiating at the maximum half of the amount of the crop specific aid  for  their
members,  within  the  frame  of  common  criteria,  and  respecting  the  same  budgetary
envelope. This could result in some producers  getting  an  amount  of  production  aid
per  hectare  higher  that  the  unit  amount  fixed  in  the  basic  Regulation  due  to  their
production  of  high  quality  cotton,  while  other  less  performing  producers  could
receive a lower amount of aid per hectare.

The  inter-branch  organisations  and  their  aid  differentiation  scales  will  need  to  be
approved by the Member State concerned. These organisations are to be financed by
its members, but as an encouragement to the sector the Community should contribute
to  their  activities  via  an  increase  of  €10  in  the  production  aid  per  eligible  hectare.
The total budget for the Community for this purpose would thus be €4,3 million.

4

The  Member  State  will  have  to  verify  the  results  of  the  application  of  the  scale  in
relation to the results achieved by the producers in question in order to grant the final
amount payable per hectare concerned.

A  grower  not  belonging  to  any  inter-branch  organisation  would  receive  the  unit
amount of aid.

2.4. 

Restructuring envelope

The proposed reform might require some adapting efforts from the sector or even a
certain  degree  of  restructuring.  With  this  in  mind,  it  is  conceived  that  a  financial
transfer  for  rural  development  measures  in  the  cotton  production  areas  should  be
made. This could benefit new recipients, be spent on new actions or serve to increase
the rate of co-financing.

The budget corresponds to the amount not necessarily transferred to producers in the
current  system  as  described  in  point  2.1,  reduced  by  the  amount  provided  for  the
encouragement  of  the  setting-up  of  inter-branch  organisations.  This  results  in
€102,9 million,  to  be  shared  out  between  the  Member  States  on  the  basis  of  the
average  area  eligible  for  aid  in  the  reference  period,  i.e.  €82,68  million  in  Greece,
€20,13 million in Spain and €0,12 million in Portugal.

The  amounts  thus  available  to  the  Member  States  and  regions  concerned  are  to  be
switched  from  Heading  1(a)  to  Heading  1(b)  of  the  Financial  Perspectives.  The
amounts would be an integral part of the second pillar of the CAP used as currently
provided for in Council Regulation (EC) No 1257/1999.

2.5. 

Application

The  new  arrangements  should  be  applicable  as  from  1  September  2005  and  would
thus already concern the crop sown in the spring of 2005. The current arrangements
would remain applicable until the end of the 2004/05 marketing year.

3. 

THE ARRANGEMENTS FOR OLIVE GROVES

3.1. 

Direct aid to growers

3.1.1. 

Integration into the single payment scheme

Income  support  will  be  integrated  into  the  new  single  payment  scheme.  It  will  be
equal  to  a  percentage  of  the  average  production  aid  for  olive  oil  and  table  olives
granted during the reference period. The surface area to be taken into consideration
(henceforth expressed  as "olive  GIS-ha") will be  established  by  the  Member  States
on  the  basis  of  the  data  in  a  geographical  information  system  (GIS)  for  olive
cultivation,  incorporated  in  the  Integrated  Administration  and  Control  System
(IACS)  and  constantly  kept  up  to  date.  The  method  of  calculating  the  number  of
olive  GIS-ha  will  be  established  by  the  Commission  for  the  entire  Community  in
such a way as to take account of the number of olive trees and their position on the
ground.

The  percentage  of  aid  allocated  to  the  single  payment  scheme  must  be  as  high  as
possible in order to maximise the benefits it brings, while permitting the existence of
national  envelopes  of  a  sufficient  amount  to  guarantee  the  preservation  of  olive

5

groves with an environmental and social value, and to finance the activities of olive
oil operators' organisations. The Commission considers that it would be appropriate
to  transfer  60%  of  the  existing  aid  for  olive  oil  to  the  single  payment  scheme.
However,  for  reasons  of  simplification,  this  percentage  should  not  be  applied  to
holdings  of  less  than  0,3  olive  GIS-ha,  since  the  entire  amount  of  the  payments
received by them during the reference period will be allocated to the single payment.

In order to ensure that the new aid system cannot alter the fragile balance currently
prevailing  on  the  olive  oil  market,  access  to  the  single  payment  scheme  must  be
limited  to  olive-growing  areas  existing  prior  to  1  May  1998  and  to  new  plantings
provided for under the programmes approved by the Commission.

3.1.2.  Additional aid to olive growing

Each Member State will have a national envelope equal to 40% of the direct aid paid
to  olive-growing  holdings  of  more  than  0,3  olive  GIS-ha.  The  aid  will  be  granted
according  to  procedures  to  be  specified  by  the  Commission  and  will  follow  the
principles set out below:

(a)

(b)

(c)

(d)

the  aid  will  depend  on  the  surface  area  of  the  olive  grove,  expressed  as  a
number of olive GIS-ha;

a record of the existence of the olive grove prior to 1 May 1998 must appear in
the  geographical 
for  olive  cultivation.  However,
replacement  olive  trees  and  plantings  carried  out  after  this  date  under  a
programme approved by the Community will also be eligible;

information  system 

in accordance with a framework to be established by the Commission, Member
States are to define up to five categories of olive groves which are eligible for
aid  on  the  basis  of  their  environmental  and  social  value.  Within  the  limits  of
the national envelope, Member States will set the amount of aid corresponding
to  each  category,  which  should  not  exceed  maintenance  costs  excluding
harvesting costs;

granting  of  the  aid  in  the  years  following  its  introduction  will  be  conditional
upon  the  number  of  olive  trees  remaining  the  same  as  at  1  January  2005,
subject to a variation of no more than 10%, and upon the characteristics of the
particular  category  of  olive  grove  for  which  the  aid  was  requested  being
preserved;

(e)

for reasons of simplification, only applications for amounts of over €50 will be
accepted.

The  inspection  agencies  must  ensure  payment  of  production  aid  for  the  2003/04
marketing year, and part-financing of their operating costs, which is to continue until
31  October  2005,  is  therefore  justified.  The  Commission  considers,  however,  that
checks on aid for olive cultivation beyond this date will be the same as those on other
CAP aid and financing of the agencies will no longer be necessary.

3.2. 

The Regulation on the common organisation of the market in olive oil

Although the CAP measures relating to oilseeds come under the  general  provisions
on  arable  crops,  Regulation  No  136/66/EEC  on  the  establishment  of  a  common
organisation of the market in oils and fats covers not only olive oil and table olives
but  also  oilseeds,  oil  cakes  and  other  vegetable  oils.  Since  the  aid  scheme  under

6

Regulation  No  136/66/EEC  is  due  to  expire  on  1  November  2004,  this  instrument
must be repealed and replaced by a Council Regulation on the common organisation
of the market in olive oil and table olives.

The new market organisation must comprise:

– 

– 

an  internal  market  and  trade  scheme  which  allows  market  forces  to  operate,
while  controlling  imports  under  the  common  market  organisation  rules  and
providing for crisis-management instruments; and

a  scheme  to  enhance  quality  in  the  broad  sense  of  the  term,  based  on
observance of marketing standards and the work of operators' organisations in
the olive sector.

3.2.1.  The internal market and trade scheme

The  marketing  year  currently  begins on 1 November  for olive oil and 1  September
for table olives. However, these dates are inappropriate in the case of certain varieties
of  olive  which  are  harvested  early.  The  Commission  proposes  that,  by  way  of
exception,  the  2004/05  marketing  year  should  last  for  a  period  of  eight  months
ending on 30  June  2005. Subsequent marketing  years will begin  on  1  July  and  last
for twelve months.

Although the olive oil market is still in balance in terms of aggregate figures over a
number  of  years,  variations  in  production  and  the  impact  of  new  plantings  could
result in periods of low prices in future. The existing aid scheme for private storage
must therefore be retained. However, it is important that this mechanism should not
distort market-led production. Consequently, aid should continue to be triggered by
the  Commission  on  a  non-automatic  basis  and  in  accordance  with  the  market
situation.

Community  canned  foods  preserved  in  olive  oil  are  at  present  highly  rated  by
consumers, who are coming to appreciate foodstuffs in olive oil to a growing extent.
Aid for the use of olive oil – usually of medium quality – in canning has ceased to be
justified by the new marketing approaches, which set out to highlight the attributes of
olive oil rather than affect selling prices. The Commission proposes that this refund
should be abolished.

reached  within 

the  World  Trade  Organisation.  However, 

Where trade with third countries is concerned, the fragile balance of the Community
market  requires  import  controls  and  customs  protection  in  the  context  of  the
the
agreements 
development of our Euro-Mediterranean policy will entail a circumspect opening-up
of  the  Community  market  to  respond  to  the  opportunities  offered  by  increases  in
production  and  consumption.  In  addition,  the  inward-processing  regime  must
continue  to  allow  import  requirements  to  be  controlled  in  accordance  with  the
cyclical  situations  on  the  world  market.  Provision  must,  however,  be  made  for  the
possibility  of  restricting  the  regime  where  necessary  by  means  of  a  Commission
decision taken in accordance with the management committee procedure.

As  regards  Community  olive  oil  exports,  experience  since  1998  has  shown  that
refunds  are  unnecessary  since  the  Community  price  is  used  as  a  reference  in
international  trade  and  the  fact  that  this  price  is  high  in  relation  to  prices  of  other
vegetable  oils  is  not  decisive  in  influencing  consumer  choices.  The  Commission
therefore proposes that this instrument should be abolished.

7

3.2.2.  The quality enhancement scheme

Given  that  production  could  exceed  current  consumption,  the  future  of  the
Community  olive-growing  sector  depends  to  a  large  extent  on  the  entire  industry
committing  itself  to  a  comprehensive  quality-oriented  approach.  Following  the
Council Decision of 2001, the operators' organisations in the olive sector are already
developing  activities  in  this  field.  Although  little  experience  has  been  acquired  to
date,  there  appears  to  be  a  need  to  reinforce  the  existing  mechanism  in  several
respects:

– 

– 

– 

– 

establish  commitments  spread  over  three  years  and  promote  activities  with  a
multinational dimension;

reinforce  the  contribution  of  operators  in  the  olive  sector  towards  effective
quality  monitoring  and  control  of  the  genuineness  of  olive  oils  released  for
consumption;

step  up  activities  which  target  quality,  publicising  this  work  and  the  results
achieved;

reinforce the arrangements for appraisal and audit by the Member States.

The  total  Community  financing  for  these  programmes  is  to  be  set  by  the  Member
State concerned, but may not exceed 10% of the national envelope, which is greater
than the maximum amounts which may be deducted from production aid at present.

This  mechanism  would  replace  the  deductions  currently  made  in  order  to  finance
measures  aimed  at  improving  the  quality  of  olive  production,  which  will  become
redundant. The  existing support for producer organisations and associations thereof
will no longer be justified on the ground that they manage production aid since such
aid will be abolished. However, the producer organisations will have to manage and
check aid applications for the 2003/04 marketing year.

4. 

THE NEW ARRANGEMENTS FOR TOBACCO

4.1. 

Direct aid to farmers

With  the  reshaping  of  the  CAP,  some  of  the  objectives  formerly  assigned  to  the
common  market  organisation  in  raw  tobacco  are  no  longer  pertinent.  Some
instruments  are  not  suited  to  the  new  context,  whilst  others  have  under-performed
and  so  failed  to  achieve  their  goals,  even  if  these  remain  valid.  Moreover,  like  the
common market organisations in other product sectors, the CMO for raw tobacco had
to redefine its objectives in line with the new economic context and the expectations
of consumers and taxpayers.

Apart from the general objectives of the horizontal scheme for direct aid to farmers,
to be achieved by an integration of the tobacco sector in this scheme, there is also the
objective  of  an  increased  coherence  between  the  main  policies  of  the  European
Union, in particular the public health policy.

8

At the Göteborg European Council, the Commission presented a communication on
the  European  Union's  strategy  for  sustainable  development1  (May  2001)  which
specifically  referred  to  the  tobacco  sector.  Though  the  Council  withheld  from
adopting  any  specific  conclusions  on  tobacco,  it  was  evident  from  the  discussions,
and the context in which they took place, that certain reservations existed about the
sustainability of the tobacco sector.

The Commission's response at the time was to strengthen its commitment to finding a
sustainable  policy-approach  for  the  tobacco  regime,  based  on  an  assessment  of  the
economic, social and environmental aspects of the sector. Thus, in May 2002, in its
Legislative  and  Work  Programme  for  2003,  the  Commission  decided  to  subject  its
policy  reflections  on  the  tobacco  sector  to  an  Extended  Impact  Assessment2,  in
accordance with its 'Sustainable and inclusive economy priority'.

The  Commission’s  principal  conclusion  from  the  Extended  Impact  Assessment  for
the  tobacco  sector  was  that,  to  avoid  a  disruptive  effect  on  production,  where  at
present  about  one  third  of  the  tobacco  premium  is  needed  to  cover  the  variable
production  costs,  the  decoupling  and  integration  in  the  single  payment  scheme
should be carried out gradually. This approach, accompanied by a phasing out of the
Community  Tobacco  Fund  and  the  setting  up,  in  the  framework  of  rural
development, of a financial envelope for restructuring concerned areas, is considered
as providing the most sustainable policy for the future.

The  proposed  reform  should  begin  with  the  transfer  of  all  or  part  of  the  current
tobacco  premium  payment  into  entitlements  for  the  single  payment.  While  this
transfer  will  be  complete  for  a  farmer's  first  3,5  tonnes  of  production,  for  the
following part exceeding 3,5 tonnes up to 10 tonnes, only 75% of the current tobacco
premium will be incorporated  in  the  single payment.  For  the  part  above  10  tonnes,
1/6 in the first year, 1/3 in the second year and 45% from the third year onwards of
the corresponding tobacco premium payment shall be converted into single payment
entitlements.  2/3  of  the  tobacco  premium  payment  corresponding  to  the  part  above
10 tonnes will thus remain coupled to production in the first year. In the second year,
1/3 of the tobacco premium payment corresponding to the part above 10 tonnes will
remain coupled to production. In each case, the remaining percentage is transferred
to the restructuring envelope, i.e. 1/6 in the first year, 1/3 in the second year and 55%
from the third year onwards.

The following table illustrates the gradual integration of the current tobacco premium
into the single payment scheme:

1

2

Communication  from  the  Commission:  A  Sustainable  Europe  for  a  Better  World:  A  European  Union
Strategy for Sustainable Development (COM(2001) 264 final of 15.5.2001)
SEC(2003) 1023 of 23.9.2003 presenting the Extended Impact Assessment of the Tobacco Sector.

9

                                                
1st STEP

Coupled
payment

Transferred to
single payment

Restructuring
envelope

Level of payment, by quantity group:

0 - 3,5 tonnes

3,5 - 10 tonnes

 + 10 tonnes

2nd STEP

Level of payment, by quantity group:

0 - 3,5 tonnes

3,5 - 10 tonnes

 + 10 tonnes

3rd STEP

Level of payment, by quantity group:

0

0

2/3

completely

75%

1/6

none

25%

1/6

Coupled
payment

Transferred to
single payment

Restructuring
envelope

0

0

1/3

completely

75%

1/3

none

25%

1/3

Coupled
payment

Transferred to
single payment

Restructuring
envelope

0 - 3,5 tonnes

3,5 - 10 tonnes

 + 10 tonnes

0

0

0

completely

75%

45%

none

25%

55%

The  percentage  of  the  global  aid  for  tobacco  that  will  be  transferred  to  the
restructuring envelope stays just above 20% as was foreseen in the Communication
accomplishing  a  sustainable  agricultural  model  for  Europe  through  the  reformed
CAP – the tobacco, olive oil, cotton and sugar sectors adopted by the Commission on
23 September 2003 (COM(2003) 554 final – see paragraph 3 on page 15).

4.2. 

Restructuring envelope

The  gradual  de-coupling  of  the  current  aid  scheme  for  raw  tobacco  should  be
accompanied by the setting up, in the framework of rural development, of a financial
envelope  for  restructuring  concerned  areas.  The  restructuring  envelope  will  be  the
difference  between  a  total  envelope  of  €955  million  and  the  proposed  coupled  and
de-coupled aid as well as payments made under the tobacco quota buy-back scheme.
The  envelope  of  €955  million  corresponds  to  the  historical  average  expenditure  in
the  tobacco  sector  during  the  reference  period  2000  to  2002.  Each  Member  State
should  receive  an  amount  corresponding  to  the  difference  between  its  historical
expenditure  and  the  proposed  coupled  and  de-coupled  aid,  to  be  used  in  favour  of
tobacco  producing  regions.  The  amounts  thus  available  to  the  Member  States  and
regions  concerned  are  to  be  switched  from  Heading  1(a)  to  Heading  1(b)  of  the
Financial Perspectives. The amounts would be an integral part of the second pillar of
the CAP used as currently provided for in Council Regulation (EC) No 1257/1999.

10

5. 

THE NEW ARRANGEMENTS FOR HOPS

The  support  scheme  for  hops  is  to  be  integrated  fully  in  Council  Regulation  (EC)
No 1782/2003.

The  report  submitted  by  the  Commission  to  the  Council  on  the  evaluation  of  the
common market  organisation for Hops  under  the terms  of Article 18  of  Regulation
(EEC) No 1696/71 describes in detail the development of the operation of the hops
market. This market is primarily marked by a continuous search for balance between
the  offer  of  hops  and  the  requirements  of  the  beer  industry.  Two  remarkable
phenomena characterised the market trend during the last decade. On the one hand,
the  consumer's  preference  developed  towards  less  hopped  beers  and  therefore  the
demand  for  hops  fell.  On  the  other  hand,  conversion  towards  varieties  with  a  high
alpha  acid  content  resulted  in  a  too  high  an  offer  of  hops  on  the  market.  This
situation caused the need to reduce the areas under hop.

This permanent adaptation was realised within the framework of the common market
organisation where the production aid level proved to be satisfactory for the survival
of the crop and the special measures which allowed for the conjunctural (temporary
resting) and structural adjustments (reduction of areas) of hop production.

The present situation which shows a sector fully directed towards the requirements of
the  market  and  which  tends  to  answer  in  a  satisfactorily  manner  leads  to  envisage
that  the  integration  of  the  hop  production  aid  scheme  in  the  de-coupled  single
payment scheme should allow the safeguarding of hop production in the Community.

That  being  so,  this  proposal  envisages  the  possibility  for  the  Member  States  to
maintain a coupled aid in order to take into account special production conditions or
specific circumstances in the production regions.

11

2003/0278 (CNS)

Proposal for a

COUNCIL REGULATION

amending Regulation (EC) No 1782/2003 establishing common rules
for direct support schemes under the common agricultural policy
and establishing certain support schemes for farmers

THE COUNCIL OF THE EUROPEAN UNION,

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

Having regard to Protocol No 4 on cotton3, annexed to the Act of Accession of Greece, and in
particular paragraph 6 thereof,

Having regard to the proposal from the Commission,

Having regard to the opinion of the European Parliament,

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

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

Whereas:

(1) 

(2) 

(3) 

The de-coupling of direct producer support and the introduction of the single payment
scheme  are  essential  elements  in  the  process  of  reforming  the  common  agricultural
policy aimed at moving away from a policy of price and production support to a policy
of farmer income support.  Council  Regulation (EC)  No 1782/20034 introduced these
elements for a variety of agricultural products.

In  order  to  meet  the  objectives  that  lay  at  the  heart  of  the  reform  of  the  common
agricultural policy, the support for cotton, olive oil and raw tobacco should be largely
de-coupled  and  integrated  into  the  single  payment  scheme.  Hops,  on  the  contrary,
should be fully integrated in the scheme.

In  the  reference  period  2000–2002,  there  existed  no  direct  producer  aid  for  cotton.
However,  under  the  arrangements  in  force  in  that  period,  Community  support  was
indirectly  received  by  the  producers  via  an  aid  to  the  ginners.  This  support  can  be
evaluated  by  leaving  apart  from  the  payments  to  the  ginners  the  part  that  was  not
obligatorily transferred to producers.

3

4

OJ L 291, 19.11.1979, p. 174. Protocol as last amended by Regulation (EC) No 1050/2001 (OJ L 148,
1.6.2001, p.1).
OJ L 270, 21.10.2003, p. 1.

12

                                                
(4) 

(5) 

(6) 

(7) 

(8) 

(9) 

A complete integration in the single payment scheme of the current support scheme in
the cotton sector would bring a significant risk of production disruption to the cotton
producer regions of the Community. A part of the support should therefore continue to
be  linked  to  the  cultivation  of  cotton  through  a  crop  specific  payment  per  eligible
hectare.  Its  amount  should  be  calculated  in  such  a  way  so  as  to  ensure  economic
conditions which, in regions which lend themselves to that crop, enable activity in the
cotton sector to continue and prevent cotton from being driven out by other crops. In
order  to  achieve  that  goal,  it  is  justified  that  the  total  available  aid  per  hectare  per
Member State is set at 40% of the national share of the aid that went indirectly to the
producers.

The  remaining  60%  of  the  national  share  of  the  aid  that  went  indirectly  to  the
producers should be available for the single payment scheme.

For  environmental  reasons,  a  base  area  per  Member  State  should  be  established  in
order  to  limit the  areas sown  under  cotton. The  reductions  per  Member  State  should
reflect  the  overshoot  of  the  average  National  Guaranteed  Quantities  since  their
introduction. In addition, the eligible areas should be restricted to those authorised by
the Member States.

In  order  to  allow  producers  and  ginners  to  enhance  the  quality  of  the  cotton,  the
establishment  of  inter-branch  organisations,  to  be  approved  by  the  Member  States,
should be encouraged. These organisations should be financed by their members. The
Community should contribute indirectly to the activities of these organisations via an
increase of the aid to the farmers who are members of the organisations.

To  foster  quality  supplies  to  the  industry,  the  approved  organisations  should  be
authorised  to  differentiate  the  aid  to  which  their  producer-members  are  entitled  in
conformity with a scale adopted by them. The scale, approved by the Member States,
should take account of criteria to be established.

In view of recent international developments, notably resulting from the World Trade
Organisation  negotiations,  the  option  of  postponing  the  introduction  of  cotton  in  the
single payment scheme should not apply.

(10)  A complete integration in the single payment scheme of the current production-linked
support scheme in the olive sector could bring problems to certain traditional producer
regions of the Community. There is a significant risk of widespread disruption to olive
tree maintenance, which could in turn lead to degradation of land cover and landscape
or have negative social impacts. A part of the support should therefore be linked to the
maintenance of olive groves of environmental or social value.

(11)  Consequently, 60% of the average of the production aid payments in the olive sector
during the reference period 2000 to 2002 should be converted into entitlements under
the single payment scheme. However, holdings of a size of less than 0,3 olive GIS-ha,
established on the basis of the geographical information system  for olive  cultivation,
should be fully integrated in the scheme, for reasons of equity.

(12)  The  number  of  hectares  to  be  included  in  the  calculation  of  the  single  payment
entitlement should be established on the basis of the geographical information system
for  olive  cultivation,  which  henceforth  is  to  be  part  of  the  integrated  administration
and control system.

13

(13)  The  remaining  40%  of  the  production  aid  payments  in  the  olive  sector  during  the
reference period should be retained by the Member States,  as national envelopes, for
the granting  to  farmers of an  aid  to contribute  to  the  maintenance  of olive  groves of
environmental  or  social  value,  including  aspects  of  local  traditions  and  culture,  in
particular in marginal areas. Holdings of less than 0,3 olive GIS-ha should be equally
eligible. For reasons of simplification, payments under this scheme should not be of an
amount of less than EUR 50.

(14)  Member States should have the possibility to withhold a certain percentage of the aid
paid  for  olive  groves  to  finance  activities  related  to  product  quality,  monitoring  and
information,  which  are  carried  out  under  work  programmes  drawn  up  by  approved
operator's organisations.

(15)  Only  areas  corresponding  either  to  olives  trees  planted  before  1  May  1998  or  to
replacing trees or covered by a programme approved by the Commission are eligible
for production aid under the current scheme and should therefore be the only ones to
be  included  under  the  single  payment  scheme  as  well  as  be  eligible  under  the  olive
grove payment scheme.

(16)  The  current  support  scheme  for  olive  oil  expires  in  the  end  of  the  marketing  year
2003/04.  It  is  necessary  to  ensure  a  harmonious  continuation  of  income  support
payments  to  olive  producers,  wherefore  the  option  of  postponing  the  introduction  of
the single payment scheme should not apply.

(17) 

In order to avoid a disruptive effect on production and local economies, and to allow
the  market  price  to  adjust  to  the  new  conditions,  the  current  support  scheme  for
producers of raw tobacco should be gradually de-coupled and integrated into the single
payment scheme. The establishment of the payment entitlement per hectare under the
new scheme should therefore be performed in three steps, starting in the calendar year
2005 and to be completed by the beginning of the calendar year 2007.

(18)  The  current  income  support  to  tobacco  producers  is  paid  as  a  premium  based  on
produced quantities of tobacco. For the establishment of the payment entitlement, the
calculation of the reference amount is divided in relation to three quantities of tobacco
for  which  a  payment  was  granted  during  the  reference  period  2000  to  2002.  For  the
first  3,5  tonnes,  a  complete  transfer  of  the  payment  into  the  single  payment  scheme
should be provided. For the quantity exceeding 3,5 tonnes up to 10 tonnes, 75% of the
payment  should  be  transferred  into  the  single  payment  scheme.  For  the  quantity
exceeding 10 tonnes, 1/6 of the payment should be transferred in year 2005, 1/3 of the
payment  should  be  transferred  in  year  2006  and  45%  of  the  payment  should  be
transferred from year 2007 onwards.

(19)  By this method, small producers should receive,  from the  start, a  major  part  of  their
income as a single payment. For larger tobacco holdings, part of the aid should remain
coupled in a transition period.

(20)  The option of postponing the integration of the tobacco support in the single payment
scheme is incompatible with the conception and the principles of the new system, as
implemented by the step-by-step approach, and should therefore not apply.

(21)  Farmers  who  have  left  the  tobacco  sector  by  participating  in  the  quota  buy-back
programme  set  up  in  accordance  with  Article  14  of  Council  Regulation  (EEC)
No 2075/1992 on the common organisation of the market in raw tobacco, and who are

14

granted aid under the single payment scheme, should not in addition receive the buy-
back price but should have the choice between the two types of payment. However, to
ensure  a  fair  choice,  a  part  of  the  buy-back  price  should  be  paid  in  so  far  as  this  is
necessary  to  compensate  for  the  difference  between  the  amount  of  tobacco  aid
included  in  the  calculation  of  the  reference  amount  and  the  amount  of  the  buy-back
price, where the latter amount is superior.

(22)  As regards the premium that will continue to be granted for tobacco production during
the harvest years 2005 and 2006, an amount equal to 4% for the first year and 5% for
the  second  year  should  be  transferred  to  the  Community  Tobacco  Fund,  for  the
purpose  of  financing  actions  of  information  for  improving  public  awareness  of  the
harmful effects of tobacco consumption.

(23)  The full integration of hops in the single payment scheme enables the hops farmer to
receive a stable income. If the farmer decides, for example as a result of the conditions
of the market or for structural reasons, to abandon the growing and harvesting of hops,
he can freely decide to do so without being without income.

(24) 

In  order  to  deal  with  specific  market  situations  or  with  regional  implications,  the
Member  State  should  have  the  possibility  to  retain  a  certain  percentage  of  the
de-coupled aid in order to support the production of hops via an area aid,

(25)  The de-coupling of the aid for cotton and raw tobacco might require actions towards
restructuring.  Additional  Community  support  for  the  production  regions  concerned
should be made available by a transfer of funds from Heading 1(a) to Heading 1(b) of
the Financial Perspectives. This additional support should be used as provided  for in
Council  Regulation  (EC)  No  1257/1999  of  17  May  1999  on  support  for  rural
development  from  the  European  Agricultural  Guidance  and  Guarantee  Fund
(EAGGF)5.

HAS ADOPTED THIS REGULATION:

Article 1

Regulation (EC) No 1782/2003 is amended as follows:

(1)

In Article 1, the third indent is replaced by the following:

"–

support schemes for farmers producing durum wheat, protein crops, rice, nuts,
energy  crops,  starch  potatoes,  milk,  seeds,  arable  crops,  sheep  meat  and  goat
meat,  beef  and  veal,  grain  legumes,  cotton,  tobacco,  hops,  as  well  as  for
farmers maintaining olive groves."

(2)

In Article 19(1), the second subparagraph is replaced by the following text:

"This data base shall, in particular, allow direct and immediate consultation, through
the  competent  authority  of  the  Member  State,  of  the  data  relating  to  the  calendar
and/or  marketing  years  starting  from  the  year  2000  and,  for  aid  granted  under
Chapter 15 of Title IV, from 1 May 1998."

5

OJ  L  160,  26.6.1999,  p.  80.  Regulation  as  amended  by  Regulation  (CE)  No  1783/2003  (OJ  L  270,
21.10.2003, p. 70.

15

                                                
(3)

Article 20 is replaced by the following:

"Article 20
Identification system for agricultural parcels

1.

2.

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

The  identification  system  shall,  where  appropriate,  include  a  geographical
information  system  for  olive  cultivation,  consisting  of  a  computerised
alphanumerical  database  and  a  computerised  graphical  reference  database  for
olive trees and areas concerned."

(4)

Article 22 is amended as follows:

(a)

in paragraph 1, the following indent is inserted after the first indent:

"–

the number of olive trees and their positioning in the parcel,"

(b)

paragraph 2 is replaced by the following:

"2. A  Member  State  may  decide  that  the  aid  application  needs  to  contain
only  changes  with  respect  to  the  aid  application  submitted  the  previous
year.  A  Member  State  shall  distribute  pre-printed  forms  based  on  the
areas  determined  in  the  previous  year  and  supply  graphic  material
indicating  the  location  of  those  areas  and,  where  appropriate,  the
positioning of olive trees."

(5)

Article 35 is replaced by the following:

"Article 35
Double claims

1.

2.

The  area  corresponding  to  the  number  of  eligible  hectares  as  defined  in
Article 44(2) in respect of which a single payment application is submitted may
be the subject of an application for any other direct payment as well as for any
other aid not covered by this Regulation, save as otherwise provided.

Farmers  who  have  participated  in  the  tobacco  quota  buy-back  scheme
according to Council Regulation (EEC) No 2075/92 shall be entitled to either
the  single  payment  or  the  quota  buy-back  price.  However,  where  the  quota
buy-back price is superior to the amount calculated for tobacco to be included
in the reference amount, the farmer shall in addition to the single payment still
be  entitled  to  a  part  of  the  buy-back  price  corresponding  to  the  difference
between the price amount and the amount calculated in accordance with point I
of Annex VII to this Regulation."

(6)

In Article 40, paragraph 5 is replaced by the following:

16

"Paragraphs 1, 2 and 3 of this Article shall apply, mutatis mutandis, to farmers who,
during the reference period, were under agri-environmental commitments according
to Council Regulations (EEC) No 2078/92* and (EC) No 1257/1999, to hop farmers
who,  during  the  same  period,  were  under  a  grubbing-up  commitment  according  to
Council  Regulation  (EC)  No  1098/98**,  as  well  as  to  tobacco  farmers  who  have
participated  in  the  quota  buy-back  programme  according  to  Regulation  (EEC)
No 2075/92.

In the case where the measures referred to in the first subparagraph covered both the
reference  period  and  the  period  referred  to  in  paragraph  2  of  this  Article,  Member
States shall establish, according to objective criteria and in such a way as to ensure
equal treatment between farmers and to avoid market and competition distortions, a
reference  amount  in  accordance  with  the  detailed  rules  to  be  laid  down  by  the
Commission in accordance with the procedure referred to in Article 144(2).

*
**

OJ L 215, 30.7.1992, p. 85.
OJ L 157, 30.5.1998, p. 7."

(7)

In Article 43(2), point (a) is replaced by the following:

"(a)

in case of potato starch, dried fodder, seed, olive groves and tobacco aids listed
in Annex VII, the number of hectares whose production has been  granted  the
aid  in  the  reference  period  as  calculated  in  points  B,  D,  F,  H  and  I  of
Annex VII;"

(8)

In Article 44(2), the following subparagraph is added:

" 'Eligible  hectare'  shall  also  mean  areas  planted  with  hops  or  being  under  a
temporary  resting  obligation,  or  areas  as  calculated  in  the  second  subparagraph  of
point H of Annex VII under olive trees planted before 1 May 1998 or new olive trees
replacing  existing  olive  trees  or  olive  trees  within  approved  planting  schemes  and
registered into a geographic information system."

(9)

Article 51 is replaced by the following:

"Article 51
Agricultural use of the land

Farmers may use the parcels declared according to Article 44(3) for any agricultural
activity except for:

(a)

(b)

(c)

permanent  crops,  apart  from  olive  trees  planted  before  1  May  1998  or  new
olive trees replacing existing olive trees or olive trees within approved planting
schemes and registered into a geographic information system or hops;

the production of the products referred to in Article 1(2) of Council Regulation
(EC)  No  2200/96*  and  in  Article  1(2)  of  Council  Regulation  (EC)
No 2201/96**;

potatoes  other  than  those  intended  for  the  manufacture  of  potato  starch  for
which aid is granted under Article 93 of this Regulation.

*
**

OJ L 297, 21.11.1996, p. 1.
OJ L 297, 21.11.1996, p. 29."

17

(10)

In Article 60, paragraph 1 is replaced by the following:

"1. Where  a  Member  State  makes  use  of  the  option  provided  for  in  Article  59,
farmers may, by way of derogation from Article 51 and in accordance with this
Article,  also  use  the  parcels  declared  according  to  Article  44(3)  for  the
production  of  products  referred  to  in  Article 1(2)  of  Regulation  (EC)
No 2200/96 or in Article 1(2) of Regulation (EC) No 2201/96 and of potatoes
other than those intended for the manufacture of potato starch for which aid is
granted  under  Article  93  of  this  Regulation,  except  permanent  crops,  apart
from  hops  or  olive  trees  planted  before  1  May  1998  or  new  olive  trees
replacing existing olive trees or olive trees  within  approved planting schemes
and registered into a geographic information system."

(11)

In section 2 of Chapter 5 of Title III, the following Article 69a is added:

"Article 69a
Hops payments

In case of hops payments, Member States may retain up to 25% of the component of
national  ceilings  referred  to  in  Article  41  corresponding  to  the  hops  area  payments
and the temporary resting aid referred to in Annex VI.

In this case and within the limit of the ceiling fixed in accordance with Article 64(2),
the Member State concerned shall make, on a yearly basis, an additional payment to
farmers.

The additional payment shall be granted to farmers producing hops on a per hectare
basis,  at  a  maximum  level  of  25%  of  the  per  hectare  payments  referred  to  in
Annex VI to be granted under the conditions provided for in Chapter 17 of Title IV."

(12)

Article 71 is amended as follows:

(a)

in paragraph 1, the following subparagraph is added:

"The transitional period referred to in the first subparagraph shall not apply in
respect of cotton, olive oil and table olives, and tobacco."

(b)

in paragraph 2, the first subparagraph is replaced by the following:

"Without prejudice to Article 70(2), in the transitional period the Member State
concerned  shall  apply  the  direct  payments  referred  to  in  Annex  VI  under  the
conditions established, respectively, in Chapters 3, 6, 7 to 13 and 17 of Title IV
of  this  Regulation,  Article  6  of  Regulation  (EEC)  No  2019/93,  Article  9  of
Regulation  (EC)  No  1452/2001,  Articles  13  and  22(2)  to  (4)  of  Regulation
(EC)  No  1453/2001,  and  Article  5  of  Regulation  (EC)  No  1454/2001,  within
the limit of budgetary ceilings corresponding to the components of these direct
payments in the national ceiling referred to in Article 41, fixed in accordance
with the procedure referred to in Article 144(2) of this Regulation, for each of
the direct payments."

(13)

In Title IV, the following chapters 14, 15, 16 and 17 are added:

18

"Chapter 14
CROP SPECIFIC PAYMENT FOR COTTON

Article 143a
Scope

Aid  shall  be  granted  to  farmers  producing  cotton,  falling  within  CN  code  5201 00
under the conditions laid down in this Chapter.

Article 143b
Eligibility

1.

The aid shall  be  granted  per  hectare  of  eligible  area  of  cotton.  In  order  to  be
eligible,  the  area  shall  be  located  on  agricultural  land  authorised  by  the
Member  State  for  cotton  production,  sown  under  authorised  varieties  and
maintained at least until the boll opening under normal growing conditions.

However, if the cotton does not attain the stage of boll opening as a  result of
exceptional weather conditions recognised as such by the Member State, areas
fully sown under cotton shall remain eligible for aid provided that the areas in
question have up to the boll opening not been used for any other purpose than
for the production of cotton.

2. Member  States  shall  authorise  the  land  and  the  varieties  referred  to  in
paragraph 1 in accordance with detailed rules and conditions to be adopted in
accordance with the procedure referred to in Article 144(2).

Article 143c
Amounts and areas

1.

The amount of the aid per eligible hectare shall be in:

Greece:
Spain:
Portugal:

EUR 594
EUR 898
EUR 556.

2.

A national base area is hereby established for :

Greece:
Spain:
Portugal:

340 000 ha
85 000 ha
360 ha.

3.

If  the  eligible  area  of  cotton  in  a  given  Member  State  and  in  a  given  year
exceeds  the  base  area  laid  down  in  paragraph  2,  the  aid  referred  to  in
paragraph 1  for  that  Member  State  shall  be  reduced  proportionately  to  the
overrun of the base area.

Article 143d
Approved inter-branch organisations

1.

For the purpose of this Chapter, an "approved inter-branch organisation" shall
mean  a  legal  entity  made  up  of  farmers  producing  cotton  and  at  least  one

19

ginner,  aiming  at,  in  particular,  the  supply  of  qualitatively  suitable  unginned
cotton  to  the  ginner.  The  Member  State  in  whose  territory  the  ginners  are
established  shall  approve  the  organisation  that  respects  the  criteria  to  be
adopted in accordance with the procedure referred to in Article 144(2).

2.

The approved inter-branch organisation shall be financed by its members.

1.

2.

1.

2.

Article 143e
Differentiation of aid by approved inter-branch organisations

The approved inter-branch organisation may decide that a maximum of half of
the  total  amount  of  the  aid  to  which  its  farmer-members  are  entitled  on  the
basis  of  the  areas  eligible  pursuant  to  Article  143b(1)  is  differentiated
according to a scale fixed by it.

The scale referred to in paragraph 1 shall be approved by the Member State and
shall  respect  the  criteria  to  be  adopted  in  accordance  with  the  procedure
referred  to  in  Article  144(2).  These  criteria  shall  concern,  in  particular,  the
quality  of  the  unginned  cotton  to  be  delivered,  adapted  to  the  environmental
and economic conditions of the zones concerned.

Article 143f
Payment of aid

Farmers shall be granted the aid per eligible hectare pursuant to Article 143c.

Farmers  that  are  members  of  an  approved  inter-branch  organisation  shall  be
granted  an  aid  per  eligible  hectare  pursuant  to  Article  143c,  increased  by  an
amount of EUR 10. However, in case of differentiation, the aid shall be granted
per  eligible  hectare  pursuant  to  Article  143c  adjusted  in  accordance  with
Article  143e(1).  The  adjusted  amount  shall  be  increased  by  an  amount  of
EUR 10.

Chapter 15
AID FOR OLIVE GROVES

Article 143g
Scope

Aid shall be granted to farmers as a contribution to the maintenance of olive groves
of  environmental  or  social  value  according  to  the  conditions  laid  down  in  this
Chapter.

Article 143h
Eligibility

Payment of the aid shall be subject to the following conditions:

(a)

the  olive  grove  shall  be  registered  in  the  geographic  information  system
referred to in Article 20(2);

20

(b)

(c)

only surfaces corresponding either to olive trees planted before 1 May 1998 or
to  replacing  trees  or  covered  by  a  programme  approved  by  the  Commission
shall be eligible for the aid;

the number of olive trees in the olive grove shall not differ by more than 10%
from  the  number  registered  on  1  January  2005  in  the  geographic  information
system referred to in Article 20(2);

(d)

the olive grove shall comply with the features of the olive grove category under
which aid is claimed;

(e)

the aid applied for shall amount to at least EUR 50 per application.

Article 143i
Amount

1.

The  aid  for  olive  groves  shall  be  granted  per  olive  GIS-ha.  An  olive  GIS-ha
shall be the area unit used in a common method to be established in accordance
with the procedure referred to in Article  144(2)  on the  basis  of  data  from  the
in
geographical 
Article 20(2).

information  system  for  olive  cultivation  referred 

to 

2. Within the maximum amounts established in paragraph 3, and after deduction
of the amount withheld pursuant to paragraph 4, Member States shall fix an aid
per olive GIS-ha of up to a maximum of five categories of olive  grove  areas.
These categories shall be established in accordance with a common framework
of environmental and social criteria, including aspects related to landscape and
social tradition, to be adopted in accordance with the procedure referred to in
Article  144(2).  In  this  context,  particular  attention  shall  be  given  to  the
maintenance of olive groves in marginal areas.

3.

The maximum amount of aid referred to in paragraph 2 shall be as follows:

France

Greece

Italy

Spain

Portugal

EUR million

1,20

208,14

272,05

404,45

15,46

The Member States shall allocate the maximum amount between the different
categories  in  accordance  with  objective  criteria  and  in  a  non-discriminatory
manner. For each category, the aid per olive GIS-ha may  amount to, but may
not exceed, the level of the maintenance costs excluding harvest costs.

4. Member  States  may  withhold  up  to  10%  of  the  amounts  referred  to  in
paragraph 3 to ensure Community  finance  of  work  programmes  drawn  up  by
approved operators’ organisations pursuant to Article 8 of Council Regulation
(EC) No …/…* [on the CMO in olive oil and table olives].

21

Chapter 16
TOBACCO PREMIUM

Article 143j
Scope of application

For the harvest years 2005 and 2006, aid shall be granted to farmers producing raw
tobacco,  falling  within  CN  code  2401,  under  the  conditions  laid  down  in  this
Chapter.

Article 143k
Eligibility conditions

Within the limit of the maximum amounts established in Article 143l(1), aid shall be
granted  to  each  farmer  for  the  quantity  exceeding  10  tonnes  of  the  average  of  the
quantities  for  which  he  was  granted  a  tobacco  premium  payment  in  the  calendar
years  2000,  2001  and  2002.  The  granting  of  aid  shall  be  subject  to  the  following
conditions:

(a)

(b)

(c)

the  tobacco  must  come  from  a  production  area  referred  to  in  Annex  II  to
Commission Regulation (EC) No 2848/98**;

the  quality  requirements  defined  in  Regulation  (EC)  No  2848/98  must  be
fulfilled;

the  leaf  tobacco  must  be  delivered  by  the  farmer  to  the  premises  of  the  first
processor under a cultivation contract.

Article 143l
Amount

1.

The  maximum  amount  of  the  total  of  the  aid,  including  the  amounts  to  be
transferred to the Community Tobacco Fund referred to in Article 143m, shall
be as follows:

2005
EUR million

2006
EUR million

Belgium
Germany

Greece

Spain

France

Italy

Austria

Portugal

0,171
11,620

1,383

38,141

8,594

109,350

0

8,458

0,085
5,810

0,692

19,070

4,297

54,675

0

4,229

2.

The  aid  amount  granted  to  the  farmer  shall  be  calculated  by  multiplying  the
eligible  number  of  kilograms  of  tobacco,  as  defined  in  Article  143k,  by  the
average  amount  of  tobacco  premium  payments  per  kilogram  granted  in  the
calendar  years  2000,  2001  and  2002  in  application  of  Regulation  (EEC)
No 2075/92. The calculated amount shall be adjusted by the coefficient 2/3 for

22

the  harvest  year  2005  and  1/3  for  the  harvest  year  2006,  and  then  shall  be
reduced by the corresponding amount referred to in Article 143m.

Article 143m
Transfer to the Community Tobacco Fund

An  amount  equal  to  4%  for  the  calendar  year  2005  and  5%  for  the  calendar  year
2006  of  the  aid  granted  in  accordance  with  this  Chapter  shall  finance  actions  of
information  under  the  Community  Tobacco  Fund  provided  for  in  Article  13  of
Regulation (EEC) No 2075/92.

Chapter 17
HOPS AREA AID

Article 143n
Scope of application

Aid shall be granted to farmers producing hops falling within CN code 1210, under
the conditions laid down in this Chapter.

Article 143o
Eligibility

Eligible areas shall be areas that are:

– 

– 

– 

located in production regions listed in the Annex to Council Regulation (EEC)
No 1981/82***,

planted with hops, and

actually harvested.

OJ L
OJ L 358, 31.12.1998, p. 17.

*
**
*** OJ L 215, 23.7.1982, p. 3."

(14)

The following Title IVa is inserted:

"Title IVa
Financial transfers

Article 143p
Financial transfer for restructuring in the cotton regions

As  from  2006,  an  amount  of  EUR 103  million,  originating  from  the  average
expenditure  for  cotton  in  the  years  2000,  2001  and  2002,  shall  be  available  per
calendar  year  as  additional  Community  support  for  measures  in  cotton  producing
regions  under  rural  development  programming  financed  under  the  EAGGF
"Guarantee" Section according to Regulation (EC) No 1257/1999.

23

Article 143q
Financial transfer for restructuring in the tobacco regions

As from 2006, an amount originating from the three-year average total aid amount in
the  reference  period  for  the  subsidised  tobacco  shall  be  available  as  additional
Community  support  for  measures  in  tobacco  producing  regions  under  rural
development  programming  financed  under  the  EAGGF  “Guarantee”  Section
according to Regulation (EC) No 1257/1999. This amount shall be as follows:

– 

– 

– 

EUR 98 million for the calendar year 2005;

EUR 147 million for the calendar year 2006;

EUR 205 million for the calendar year 2007 onwards."

(15)

In Article 145, the following points are added:

"(r) with regard to cotton, detailed rules in respect of:

– 

– 

the calculation of the reduction of the aid provided for in Article 143c(3),

the approved inter-branch organisations, in particular their financing and
a control and sanction system.

(s)

such  adjustments  of  the  amounts  referred  to  in  Article  143q  as  may  become
necessary  in  order  to  take  into  account  budgetary  developments  due  to  the
in  application  of  Article  14  of  Regulation  (EEC)
rights  established 
No 2075/92."

(16)

In Article 152, the following points are added:

"(d) Article 3 of Regulation (EEC) No 2075/92. However, it shall continue to apply

to applications for direct payments in respect of the harvest 2004.

(e) Articles 12 and 13 of Council Regulation (EEC) No 1696/71*. However, they
shall  continue  to  apply  to  applications  for  direct  payments  in  respect  of  the
harvest 2004.

*

OJ L 175, 4.8.1971, p. 1."

(17)

In Article 153, the following paragraphs are inserted:

"4a. Council  Regulation  (EC)  No  1051/2001*  is  repealed.  However,  it  shall

continue to apply in respect of marketing year 2004/05.

4b. Regulation  (EC)  No  1098/98  is  repealed.  However,  it  shall  continue  to  apply

until 31 December 2004.

*

OJ L 148, 1.6.2001, p. 3."

(18)

The following Article 155a is inserted:

"Article 155a

By 31 December 2009, the Commission shall submit a report to the Council on the
implementation  of  this  Regulation  with  regard  to  cotton,  olive  oil,  table  olives  and
olive  groves,  tobacco  and  hops,  accompanied,  where  appropriate,  by  legislative
proposals."

24

(19)

In Article 156(2), the following points are added:

"(g) Title IV, Chapter 14, shall apply as from 1 January 2005 for the cotton sown as

from that date.

(h) Title IV, Chapter 15, shall apply as from marketing year 2004/05.

(i)

(j)

Title IV, Chapter 16, shall apply from 1 January 2005 to 31 December 2006.

Title IV, Chapter 17, shall apply as from 1 January 2005."

(20)

The Annexes are amended in accordance with the Annex to this Regulation.

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

Article 2

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

Done at Brussels,

For the Council
The President

25

ANNEX

The Annexes are amended as follows:

(1)

Annex I is replaced by the following:

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

Sector

Legal base

Notes

Single payment

Title III of this Regulation

Decoupled payment (see Annex VI) (*)

Durum wheat

Protein crop

Rice

Nuts

Energy crops

Starch potato

Milk and dairy
products

Title IV, Chapter 1 of this Regulation

Area aid (quality premium)

Title IV, Chapter 2 of this Regulation

Title IV, Chapter 3 of this Regulation

Title IV, Chapter 4 of this Regulation

Title IV, Chapter 5 of this Regulation

Area aid

Area aid

Area aid

Area aid

Title IV, Chapter 6 of this Regulation

Production aid

Title IV, Chapter 7 of this Regulation

Dairy premium and additional payment

Arable crop in Finland
and in certain regions
of Sweden

Title IV, Chapter 8 of this
Regulation (**)(*****)

Specific regional aid for arable crops

Seeds

Arable crops

Sheep and goats

Beef and veal

Title IV, Chapter 9 of this
Regulation (**)(*****)

Title IV, Chapter 10 of this
Regulation (***)(*****)

Production aid

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

Title IV, Chapter 11 of this Regulation
(***)(*****)

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

Title IV, Chapter 12 of this Regulation
(*****)

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

Grain legumes

Title IV, Chapter 13 of this Regulation
(*****)

Area aid

Specific types of
farming and quality
production

Dried fodder

Article 69 of this Regulation (****)

Article 71(2) second subparagraph of this
Regulation (*****)

Small farmers' scheme Article 2a

Regulation (EC) No 1259/1999

Transitional area aid for farmers receiving less
than EUR 1 250

Olive oil

Silkworms

Title IV, Chapter 15 of this Regulation

Area aid

Article 1
Regulation (EEC) No 845/72

Aid to encourage rearing

26

Bananas

Dried grapes

Tobacco

Hops

POSEIDOM

POSEIMA

POSEICAN

Aegean Islands

Cotton

(*)

(**)
(***)
(****)
(*****)

Article 12
Regulation (EEC) No 404/93

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

Production aid

Area aid

Title IV, Chapter 16 of this Regulation

Production aid

Title IV, Chapter 17 of this Regulation
(***)(*****)

Area aid

Articles 9 (**)(*****), 12(2) and 16
Regulation (EC) No 1452/2001

Articles 13 (**)(*****), 16, 17 and 28(1),
21, 22(2) to (4) (**)(*****) and (7), 27, 29
and 30(1), (2) and (4)
Regulation (EC) No 1453/2001

Articles 5 (**)(*****), 9 and 14
Regulation (EC) No 1454/2001

Articles 6 (**)(*****), 8, 11 and 12
Regulation (EEC) No 2019/93

Sectors: beef and veal; sugar; green vanilla

Sectors:  beef  and  veal;  milk;  potatoes;  sugar;
wicker;  pineapples, 
tobacco,  seed  potatoes,
chicory and tea

Sectors: beef and veal, sheep and goat; potatoes

Sectors: beef and veal; potatoes; olives; honey

Title IV, Chapter 14 of this Regulation

Area aid

Starting from 1 January 2005 or later in the case of application of Article 71. For 2004, or later on in
case  of  application  of  Article  71,  the  direct  payments  listed  in  Annex  VI  are  included  in  Annex  I
except dried fodder and cotton.
In case of application of Article 70.
In case of application of Articles 66, 67, 68 or 69A.
In case of application of Article 69.
In case of application of Article 71."

27

(2)

Annex II is replaced by the following:

"ANNEX II
National ceilings referred to in Article 12(2)

MIO EUR

Member State

2005

2006

2007

2008

2009

2010

2011

2012

Belgium

Denmark

Germany

Greece

Spain

France

Ireland

Italy

Luxembourg

Netherlands

Austria

Portugal

Finland

Sweden

United Kingdom

4,7

7,7

40,4

45,4

56,9

51,4

15,3

62,3

0,2

6,8

12,4

10,8

8,0

6,6

17,7

6,2

10,3

54,6

60,6

76,5

68,7

20,4

83,7

0,3

9,2

17,1

14,6

10,8

8,8

23,6

7,7

12,9

68,3

75,7

95,5

85,9

25,5

7,7

12,9

68,3

75,7

95,5

85,9

25,5

7,7

12,9

68,3

75,7

95,5

85,9

25,5

7,7

12,9

68,3

75,7

95,5

85,9

25,5

7,7

12,9

68,3

75,7

95,5

85,9

25,5

7,7

12,9

68,3

75,7

95,5

85,9

25,5

104,6

104,6

104,6

104,6

104,6

104,6

0,4

11,5

21,3

18,2

13,6

11,0

29,5

0,4

11,5

21,3

18,2

13,6

11,0

29,5

0,4

11,5

21,3

18,2

13,6

11,0

29,5

0,4

11,5

21,3

18,2

13,6

11,0

29,5

0,4

11,5

21,3

18,2

13,6

11,0

29,5

0,4

11,5

21,3

18,2

13,6

11,0

29,5

(3)

Annex V is replaced by the following:

"ANNEX V
Compatible support schemes referred to in Article 26

Legal base

Notes

Sector

Dried grapes

Agri-environment

Forestry

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

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

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

Less-favoured areas and
areas with environmental
restrictions

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

Dried fodder

Citrus for processing

Tomatoes for processing

Wine

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

Article 1
Regulation (EC) No 2202/96

Article 2
Regulation (EC) No 2201/96

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

28

Area-related aid

Area-related aid

Area-related aid

Area-related aid

Production aid

Production aid

Production aid

Restructuring aid

(4)

In Annex VI, the following rows are added:

"Cotton

Olive oil

Tobacco

Paragraph 3 of Protocol No 4 on cotton
annexed to the Act of Accession of Greece

Support through the payment for
unginned cotton

Article 5
Regulation 136/66/EEC

Article 3
Regulation (EEC) No 2075/92

Production aid

Production aid

Hops

Article 12 of Regulation (EEC) No 1696/71

Area aid

Article 1 of Regulation (EC) No 1098/98

Temporary resting aid"

(5)

In Annex VII, the following text is added:

"G. Cotton

Where a farmer has declared areas sown under cotton, Member States shall calculate
the  amount  to  be  included  in  the  reference  amount  by  multiplying  the  number  of
hectares, to two decimal places, which produced cotton that was granted aid pursuant
to paragraph 3 of Protocol No 4 on cotton* in each year of the reference period, by
the following amounts per hectare:

– 

– 

– 

EUR 795

for Greece,

EUR 1 286 for Spain,

EUR 1 022 for Portugal.

H. Olive oil

Where a farmer has received olive oil production aid, the amount shall be calculated
by multiplying the number of tonnes for which such a payment has been granted in
the  reference  period  (i.e.  respectively,  in  each  of  the  marketing  years  2000/01,
2001/02  and  2002/03)  by  the  corresponding  unit  amount  of  aid,  expressed  in
EUR/tonne,  as  fixed  in  Commission  Regulations  (EC)  No  1271/2002**,  (EC)
No 1221/2003***  and  (EC)  No  1794/2003****,  and  multiplied  by  a  0,6  coefficient.
This  coefficient  shall  not  be  applied  to  farmers  whose  average  number  of  olive
GIS-ha  during  the  reference  period,  excluding  the  number  of  olive  GIS-ha
corresponding to additional trees planted outside any approved planting scheme after
1 May 1998, is less  than  0,3.  The  number  of olive  GIS-ha  shall  be  calculated  by  a
common  method  to  be  established  in  accordance  with  the  procedure  referred  to  in
Article 144(2) and on the basis of data  from the  geographic  information  system  for
olive cultivation.

Member  States  shall  calculate  the  number  of  hectares  to  be  included  in  the
calculation  of  the  single  payment  as  the  number  of  olive  GIS-ha  obtained  by  a
common  method  to  be  established  in  accordance  with  the  procedure  referred  to  in
Article 144(2) and on the basis of data from the geographic information system for
olive  cultivation,  excluding  the  number  of  olive  GIS-ha  of  additional  trees  planted
outside an approved planting scheme after 1 May 1998.

29

I.

Raw tobacco

Where a farmer has received a tobacco premium payment, the reference amount shall
be calculated as follows:

The  three-year  average total  number  of  kilograms of raw tobacco  for which such  a
payment  has  been  granted  in  the  reference  period  is  subdivided  into  three  quantity
groups, as follows:

– 

– 

– 

quantities of less than or equal to 3,5 tonnes;

quantities of more than 3,5 tonnes but less than or equal to 10 tonnes;

quantities exceeding 10 tonnes.

The  amount  included  in  the  reference  amount  shall  be  the  sum  of  three  amounts,
obtained by multiplying the number of  kilogram  falling  within  each quantity  group
by  the  weighted  three-year  average  aid  amount  granted  per  kilogram,  taking  into
account the  total quantity of raw tobacco of  all  variety  groups.  Each  of  these  three
amounts shall, before being added together, be adjusted by the coefficient established
for the corresponding quantity group, as follows:

– 

– 

– 

for the quantity of less than or equal to 3,5 tonnes, a coefficient of 1,0;

for the quantity of more than 3,5 tonnes but less than or equal to 10 tonnes, a
coefficient of 0,75;

for the quantity exceeding 10 tonnes, a coefficient of 1/6 for the calendar year
2005, a coefficient of 1/3 for the calendar year 2006 and a coefficient of 45%
for the calendar year 2007 and the subsequent calendar years.

The  number  of  hectares  to  be  included  in  calculation  of  the  single  payment  shall
correspond to the area indicated in the registered cultivation contracts for which the
premium  payment  has  been  granted,  respectively,  in  each  year  of  the  reference
period,  and  within  the  limits  of  a  base  area  to  be  fixed  by  the  Commission  on  the
basis  of  the  total  area  as  communicated  to  the  Commission  in  accordance  with
Annex I, point 1.3 of Commission Regulation (EC) No 2636/1999*****.

J.

Hops

Where a farmer has received hops area aid or temporary resting aid, Member States
shall calculate the amounts to be included in the reference amount by multiplying the
number  of  hectares,  to  two  decimal  places,  for  which  a  payment  has  been  granted,
respectively,  in  each  year  of  the  reference  period,  by  an  amount  of  EUR  480  per
hectare.

OJ L 291, 19.11.1979, p. 174.
OJ L 184, 13.7.2002, p. 5.

*
**
*** OJ L 170, 9.7.2003, p. 8.
**** OJ L 262, 14.10.2003, p. 11.
***** OJ L 323, 15.12.1999, p. 4."

(6)

Annex VIII is replaced by the following:

30

"ANNEX VIII
National ceilings referred to in Article 41

Member State

Belgium
Denmark
Germany
Greece
Spain
France
Ireland
Italy
Luxembourg
Netherlands
Austria
Portugal
Finland
Sweden
United Kingdom

2005

414
838
4 506
1 839
4 026
7 264
1 136
3 161
27
386
614
481
467
612
3 351

2006

414
838
4 509
1 837
4 032
7 262
1 136
3 179
27
386
614
483
467
612
3 351

MIO EUR

2007 and
subsequent years

532
996
5 500
1 859
4 236
8 123
1 322
3 550
37
779
712
551
552
729
3 869"

31

2003/0279 (CNS)

Proposal for a

COUNCIL REGULATION

on the common organisation of the market in olive oil and table olives
and amending Regulation (EEC) No 827/68

THE COUNCIL OF THE EUROPEAN UNION,

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

Having regard to the proposal of the Commission,

Having regard to the opinion of the European Parliament,

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

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

Whereas:

(1) 

(2) 

(3) 

6

7

8

The  common  agricultural  policy  pursues  the  objectives  set  out  in  Article  33  of  the
Treaty.  In  order  to  stabilise  markets  and  ensure  a  fair  standard  of  living  for  the
agricultural  community  in  the  sector  of  olive  oil  and  table  olives,  it  is  necessary  to
provide for an income support to farmers maintaining olive groves, for internal market
measures to maintain the prices and supply conditions in a reasonable frame, and for
activities aiming at influencing market demand  by  improving the quality of products
as well as the way of presenting quality to consumers.

Income  support  to  farmers  maintaining  olive  groves  is  provided  for  in  Council
Regulation (EC) No 1782/2003 of 29 September 2003 establishing common rules for
direct support schemes under the common agricultural policy and establishing certain
support schemes for farmers6 through the single farm payments as well as an aid  for
maintenance of olive groves.

Council Regulation No 136/66/EEC of 22 September 1966 on the establishment of a
common organisation of the market in oils and fats7 should therefore be repealed and
replaced by a new regulation. On this occasion, a number of Council regulations of the
olive oil sector should also be repealed, namely Regulations (EEC) No 154/758, (EEC)

OJ L 270, 21.10.2003, p. 1. Regulation as amended by Regulation (EC) No …/2003 (OJ L…).
OJ  172,  30.9.1966,  p.  3025/66.  Regulation  as  last  amended  by  Regulation  (EC)  No  1513/2001
(OJ L 201, 26.7.2001, p. 4).
Regulation (EEC) No 154/75 of the Council of 21 January 1975 on the establishment of a register of
olive cultivation in the Member States producing olive oil (OJ L 19, 24.1.1975, p. 1).Regulation as last
amended by Regulation (EEC) No 3788/85 (OJ L 367, 31.12.1985, p. 1).

32

                                                
(4) 

(5) 

(6) 

(7) 

9

10

11

12

13

14

15

16

17

18

19

20

No 2754/789,  (EEC)  No  3519/8310,  (EEC)  No  2261/8411,  (EEC)  2262/8412,  (EEC)
No 3067/8513, (EEC) No 1332/9214, (EEC) No 2159/9215, (EEC) No 3815/9216, (EC)
No 1255/9617, (EC) No 1414/9718, (EC) No 1638/9819 and (EC) No 1873/200220.

It is necessary that the marketing  year is adapted to the production cycle of  all olive
varieties  and,  for  harmonisation  simplicity  purposes,  it  should  be  realigned  with  the
marketing year for other agricultural products.

The descriptions and definitions of olive oil and so the denomination are an essential
element of the market order by setting quality standards and providing consumers with
an adequate information on the product.

The characteristics of the olive oil justify an interest of the consumers in spite of the
high  price  of  that  oil  as  compared  with  other  oils  and  fats.  To  avoid  abuses  on  the
quality  and  on  authenticity  of  the  products  presented  to  the  consumers  and  the
important disturbances on the market they may involve, special measures are needed
to develop and protect the quality of olives and olive oils.

The  authenticity  of  the  allegations  labelled  should  be  guaranteed  by  up-to-date
methods of analysis and other measures to determine the characteristics of each olive
oil standard.

Council  Regulation  (EEC)  No  2754/78  of  23  November  1978  on  intervention  in  the  olive  oil  sector
(OJ L 331, 28.11.1978, p. 13). Regulation as amended by  Regulation (EEC) No 2203/90 (O J L 201,
31.7.1990, p. 5).
Council Regulation (EEC) No 3519/83 of 12 December 1983 laying down certain measures for acid oils
from refining of by-products of olive oil or olive-residue oil (OJ L 352, 15.12.1983, p. 2).
Council Regulation (EEC) No 2261/84 of 17 July 1984 laying down general rules on the granting of aid
for the production of olive oil and of aid to olive oil producer organizations (OJ L 208, 3.8.1984, p. 3).
Regulation as last amended by Commission Regulation (EC) No 2366/98 (OJ L 293, 31.10.1998, p. 50).
Council  Regulation  (EEC)  No  2262/84  of  17  July  1984  laying  down  special  measures  in  respect  of
olive  oil  (OJ  L  208,  3.8.1984,  p. 11).  Regulation  as  last  amended  by  Regulation  (EC)  No  2292/2001
(OJ L 308 , 27.11.2001, p. 1).
Council  Regulation  (EEC)  No  3067/85  of  29  October  1985  setting  criteria  for  mobilization  on  the
Community market for vegetable oils for supply as food aid (OJ L 290, 1.11.1985, p. 96).
Council Regulation (EEC) No 1332/92 of 18 May 1992 introducing specific measures for table olives
(OJ  L  145,  27.5.1992,  p. 1).  Regulation  as  amended  by  Regulation  (EC)  No  2826/2000  (OJ  L  328,
23.12.2000, p. 2).
Council  Regulation  (EEC)  No  2159/92  of  23  July  1992  on  the  financing  of  expenditure  for  the
establishment and updating of the register of olive cultivation (OJ L 217, 31.7.1992, p. 8).
Council  Regulation  (EEC)  No  3815/92  of  28  December  1992  on  application  of  the  common
intervention price for olive oil in Spain (OJ L 387, 31.12.1992, p. 9).
Council  Regulation  (EC)  No  1255/96  of  27  June  1996  temporarily  suspending  the  autonomous
Common  Customs  Tariff  duties  on  certain  industrial  and  agricultural  products  (OJ  L  158,  29.6.1996,
p. 1). Regulation as last amended by Regulation (EC) No 1048/2003 (O J L 161, 30.6.2003, p. 1).
Council Regulation (EC) No 1414/97 of 22 July 1997 fixing, for the 1997/98 marketing year, the prices,
aids and percentages of aid to be retained in the olive oil sector, together with the maximum guarantee
quantity (OJ L 196, 24.7.1997, p. 4).
Council  Regulation  (EC)  No  1638/98  of  20  July  1998  amending  Regulation  No  136/66/EEC  on  the
establishment  of  a  common  organisation  of  the  market  in  oils  and  fats  (OJ  L  210,  28.7.1998,  p. 32).
Regulation as amended by Regulation by EC) No 1513/2001 (O J L 201, 26.7.2001, p. 4).
Council  Regulation  (EC)  No  1873/2002  of  14  October  2002  setting  the  limits  to  the  Community
financing  of  work  programmes  drawn  up  by  approved  operators'  organisations  in  the  olive  sector
provided  for  in  Regulation  (EC)  No  1638/98  and  derogating  from  Regulation  No  136/66/EEC
(OJ L 284, 22.10.2002, p. 1).

33

                                                
(8) 

(9) 

Taking into account the influence of variation in the level of the productions and the
world market supply available, there should be provision for appropriate measures to
be taken in order to stabilise the internal market.

The system of aid for private storage contracts is deemed to be an efficient instrument
to  regulate  the  supply  of  olive  oil,  acting  as  a  safety  net  mechanism  when  there  is
serious disturbance of the market.

(10)  The  contribution  of  olive  oil  and  table  olive  operators  to  improve  and  guaranty  the
quality of the products in question and so to develop the consumers interests and keep
the  balance  in  the  market  should  be  encouraged  and  organised  by  a  Community
scheme.

(11)  Community finance, consisting of the percentage of direct aid that Member States are
allowed  to  withhold  in  accordance  with  Article  143i(4)  of  Regulation  (EC)
No 1782/2003, is required to encourage approved operators’ organisations to draw up
work programmes for the purpose of improving the production quality of olive oil and
table olives. Community support should be allocated according to the priorities given
to the activities undertaken within the work programmes in question.

(12) 

In order to monitor the volume of olive oil trade with third countries while aiming at a
simplification  of  administrative  procedures,  provision  should  be  made  for  an  import
license scheme with the lodging of a security to ensure that the transactions for which
such  licenses  are  requested  are  effected.  If  market  developments  made  necessary  a
closer follow-up of exports of olive oil from the Community, the Commission should
be authorised to introduce a system of export licenses.

(13)  The Community market for olive oil and table olives involves a trading system at the
borders  of  the  Community,  including  import  duties.  The  trading  system  should  be
based on the undertakings accepted under international agreements.

(14)  For  the  most  part,  the  customs  duties  applicable  to  agricultural  products  under  the
World Trade Organisation (WTO) agreements are laid down in the common customs
tariff.  However,  the  Commission  should  be  able  to  suspend  partially  or  fully  these
duties in order to ensure an adequate supply of the internal market in olive oil.

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

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

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

34

(18)  As the common market in olive oil and table olives is in continuous development, the
Member  States  and  the  Commission  should  keep  each  other  informed  of  these
developments.

(19)  The measures necessary for the implementation of this Regulation should be adopted
in accordance with Council Decision 1999/468/EC of 28  June 1999  laying  down the
procedures for the exercise of implementing powers conferred on the Commission21.

(20) 

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

(21)  Expenditure incurred by the Member States as a result of the obligations arising from
the application of this Regulation should be financed by the Community in accordance
with Council Regulation (EC) No 1258/1999 of 17 May 1999 on the financing of the
common agricultural policy22.

(22)  The products included in the common market organisation established by Regulation
No 136/66/EEC which are not covered by the common market organisation in olive oil
and table olives, or by any other common market organisation, should be included in
Council  Regulation  (EEC)  No  827/68  of  28  June  1968  on  the  common  market
organisation of the market in certain products listed in Annex II 23,

HAS ADOPTED THIS REGULATION:

Chapter I
Introductory provisions and quality requirements

Article 1

The common organisation of the market in olive oil and table olives shall cover the following
products:

CN code

Description

(a)

1509

Olive oil and its fractions, whether or not refined, but not chemically modified

1510 00

Other oils and their fractions, obtained solely from olives, whether or not refined,
but not chemically modified, including blends of these oils or fractions with oils
or fractions heading No 1509

(b)

0709 90 31

Olives, fresh or chilled, for uses other than the production of oil

0709 90 39

Other olives, fresh or chilled

0710 80 10

Olives (uncooked or cooked by steaming or boiling water), frozen

0711 20

Olives provisionally preserved (for example, by sulphur dioxide gas, in brine, in
sulphur  water  or  in  other  preservative  solutions),  but  unsuitable  in  that  state  for
immediate consumption

ex 0712 90 90

Olives dried, whole, cut, sliced, broken or in powder, but not further prepared

21

22

23

OJ L 184, 17.7.1999, p. 23.
OJ L 160, 26.6.1999, p. 103.
OJ L 151, 30.6.1968, p. 16. Regulation as last amended by Commission Regulation (EC) No 1272/2002
(OJ L 184, 13.7.2002, p. 7).

35

                                                
2001 90 65

Olives prepared or preserved by vinegar or acetic acid

ex 2004 90 30

Olives prepared or preserved otherwise than by vinegar or acetic acid, frozen

2005 70

Olives prepared or preserved otherwise than by vinegar or acetic acid, not frozen

(c)

1522 00 31
1522 00 39

2306 90 11
2306 90 19

Residues  resulting  from  the  treatment  of  fatty  substances  or  animal  waxes
containing oil having the characteristics of olive oil

Oil-cake and other residues resulting from the extractions of olive oil

Article 2

The  marketing  year  for  the  products  listed  in  Article  1  shall  begin  on  1  July  and  end  on
30 June  of  the  following  year.  However,  the  2004/05  marketing  year  shall  begin  on
1 November 2004.

This  Regulation  shall  apply  without  prejudice  to  the  measures  provided  for  by  Regulation
(CE) No 1782/2003.

Article 3

1.

2.

1.

2.

Article 4

The use of the descriptions and definitions of olive oils and olive-pomace oils set out
in Annex I shall be compulsory as regards the marketing of the products concerned
within each Member State, in intra-Community trade and trade with third countries.

Only oils referred to in points 1(a) and (b), 3 and 6 of Annex I may be marketed at
the retail stage.

Chapter II
Internal market

SECTION 1
MARKETING STANDARDS

Article 5

Marketing  standards  covering 
in  particular  quality  grading,  packaging  and
presentation  may  be  laid  down  in  respect  of  the  products  referred  in  Article  1(a)
taking into account technical production and marketing requirements and changes in
the  methods  used  for  determining  the  physical,  chemical  and  organoleptic
characteristics of these products.

Where  such  standards  are  laid  down,  the  products  to  which  they  apply  may  be
marketed in the Community only in accordance with those standards.

Member  States  shall,  in  case  of  products  which  are  the  subject  of  marketing
standards,  check  whether  those  products  conform  to  the  said  standards  and  apply
penalties as appropriate. They shall notify the Commission of the arrangements they
have taken for the purpose of applying this paragraph.

36

3.

1.

2.

3.

1.

2.

The marketing standards, as well as detailed rules for the application of this Article
and,  where  applicable,  the  methods  of  analysis  to  be  used,  shall  be  adopted  in
accordance with the procedure referred to in Article 18(2).

SECTION 2
DISTURBANCE OF THE MARKET

Article 6

In  the  event  of  serious  disturbance  of  the  market  in  certain  regions  of  the
Community, in order to regularise the market, it may be decided in accordance with
the  procedure  referred  to  in  Article  18(2)  to  authorise  bodies  offering  sufficient
guarantees, and approved by the Member States, to conclude contracts for the storage
of olive oil that they market.

The  measures  referred  to  in  the  first  subparagraph  may  be  implemented  inter  alia
when the average price recorded on the market during a representative period is less
than:

– 

– 

– 

EUR 1779/tonne for extra virgin olive oil, or

EUR 1710/tonne for virgin olive oil, or

EUR  1487/tonne  for  lampante  olive  oil  having  3  degree  of  free  acidity,  this
amount  being  reduced  by  EUR  36,70/tonne  for  each  additional  degree  of
acidity.

An aid for the performance of the contracts referred to in paragraph 1 may be granted
by means of tenders.

The  amount  of  the  aid  referred  to  in  paragraph  2  and  the  detailed  rules  for
implementing  this  Article,  in  particular  the  quantities,  qualities  and  duration  of
storage  of  the  oils  concerned  shall  be  established  by  the  procedure  referred  to  in
Article 18(2) in such a way as to ensure a significant impact on the market.

SECTION 3
OPERATORS’ ORGANISATIONS

Article 7

For the purposes of this Regulation, operators' organisations shall comprise approved
producers'  organisations,  approved 
interbranch  organisations  or  approved
organisations of other operators in the olive oil sector or their associations.

For  the  purposes  of  this  Section,  'approved  interbranch  organisations'  shall  mean
legal entities which:

– 

– 

– 

are made up of representatives of economic activities linked to the production
of and/or trade in and/or processing of the products referred to in Article 1;

are  established  at  the  initiative  of  all  or  some  of  the  organisations  or
associations which constitute them;

have been recognised by the Member State in which they operate.

37

Article 8

1.

The  amounts  withheld  by  Member  States  in  accordance  with  Article  143i(4)  of
Regulation (EC) No 1782/2003 shall ensure the Community financing of three-year
work programmes to be drawn up by operators’ organisations in one or more of the
following areas:

(a)

(b)

(c)

(d)

(e)

the market follow-up and administrative management in the olive oil and table
olives sector;

the improvement of the environmental impacts of the olive cultivation;

the improvement of the production quality of olive oil and table olives;

the  traceability  system,  the  certification  and  protection  of  olive  oil  and  table
olives quality, in particular the  monitoring  of  the  quality  of  olive  oils  sold  to
final consumers, under the authority of the national administrations;

the  dissemination  of  information  on  the  activities  carried  out  by  operator
organisations with the aim of improving olive oil quality.

2.

The  maximum  Community  funding  for  the  work  programmes  referred  to  in
paragraph 1 shall be equal to the part of the aids withheld by the Member States. This
funding concerns the eligible cost with a maximum of:

– 

– 

– 

100% for the activities in areas referred to in points (a) and (b) of paragraph 1,

100% for  the  fixed  assets  investments  and  75%  for  the  other  activities  in  the
area referred to in point (c) of paragraph 1,

75%  for  the  work  programmes  carried  out  in  at  least  three  non  producing
Member  States  or  third  countries  by  approved  operator  organisations  from  at
least two producer Member States in areas referred to in points (d) and (e) of
paragraph 1, and 50% for the other activities in these areas.

Complementary  financing  shall  be  ensured  by  the  Member  State  up  to  50%  of  the
costs not covered by the Community funding.

3.

Member States shall verify that the conditions for granting Community funding are
met.  To  that  end,  they  shall  carry  out  an  audit  of  work  programmes  and  a  control
plan involving a sample determined on the basis of a risk analysis and comprising at
least  30%  of  producer  organisations  and  all  the  other  operator’s  organisations  in
receipt of Community funding under this Article.

Article 9

In accordance with the procedure referred to in Article 18(2), detailed rules shall be adopted
concerning:

(a)

(b)

(c)

the conditions for the approval of operators’ organisations and their associations;

the  types  of  activities  eligible  under  programmes  in  the  five  areas  referred  to  in
Article 8(1);

the procedures for the approval of programmes by the Member States;

38

(d)

(e)

1.

2.

3.

4.

1.

2.

the  measures  concerning  the  control  and  sanctions  as  well  as  the  audit  of  work
programmes;

any  other  detailed  measure  that  might  be  necessary  for  the  implementation  of  this
Section.

Chapter III
Trade with third countries

Article 10

Imports  to  the  Community  of  any  of  the  products  falling  within  CN  codes  1509,
1510 00,  0709 90 39,  0711 20 90,  2306 90 19,  1522 00 31,  1522 00 39  shall  be
subject to presentation of an import licence.

Import licences shall be issued by the Member States to any applicant, irrespective of
his place of establishment in the Community.

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

Where  necessary  for  the  purposes  of  following  market  developments,  it  may  be
decided,  in  accordance  with  the  procedure  referred  to  in  Article  18(2),  to  make
exports from the Community of any of the products listed in Article 1(a) subject to
presentation of an export licence.

The  term  of  validity  of  licences  and  other  detailed  rules  for  the  application  of  this
Article shall be adopted in accordance with the procedure referred to in Article 18(2).

Article 11

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

By way of derogation from paragraph 1, should the market price for olive oil in the
Community  exceed  1,6  times  the  average  prices  laid  down  in  the  second
subparagraph of Article 6(1), during a period of at least three months, to ensure the
Community market is adequately supplied with olive oil through imports from non-
member countries, it may be decided, in accordance with the procedure referred to in
Article 18(2):

– 

– 

to partially or fully suspend the application of common customs duties to olive
oil, and establish the detailed arrangements for any such suspension,

to open an import quota for olive oil at a reduced rate of the common customs
duties and establish the detailed arrangements for managing such quota.

These measures  shall apply for the minimum necessary period,  which  in  any  event
shall not exceed the end of the marketing year in question.

39

Article 12

1.

2.

The  general  rules  for  the  interpretation  of  the  combined  nomenclature  and  the
detailed  rules  for  its  application  shall  apply  to  the  tariff  classification  of  products
covered by this Regulation. The tariff nomenclature resulting from the application of
this Regulation shall be incorporated into the common customs tariff.

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

(a)

(b)

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

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

Article 13

To the extent necessary for the proper functioning of the common organisation of the markets
in  the  olive  oil  and  table  olive  sector,  the  use  of  inward-processing  arrangements  for  the
products listed in Article 1(a) and (b) may be fully or partially prohibited in accordance with
the procedure referred to in Article 18(2).

Article 14

1.

2.

3.

4.

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

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

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

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

40

Chapter IV
General provisions

Article 15

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

Article 16

Measures taken by Member States to increase the price for other vegetable oils in relation to
that  for  olive  oil  so  as  to  ensure  an  outlet  for  nationally  produced  olive  oil  shall  be
incompatible with the application of this Regulation.

Article 17

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

Detailed rules to determine which information is necessary as well for its communication and
distribution shall be adopted in accordance with the procedure referred to in Article 18(2).

Article 18

1.

2.

The Commission shall be assisted by the Management Committee for Olive Oil and
Table olives, hereinafter referred to as 'the Committee'.

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

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

3.

The Committee shall adopt its rules for procedure.

Article 19

Measures that are both necessary and justifiable in an emergency, in order to resolve practical
and  specific  problems  shall  be  adopted  in  accordance  with  the  procedure  referred  to  in
Article 18.

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

Article 20

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

41

Chapter V
Transitional and final rules

Article 21

1.

2.

Regulations  (EEC)  No  136/66/EEC,  (EEC)  No  154/75,  (EEC)  No  2754/78,  (EEC)
No 3519/83,  (EEC)  No  2261/84,  (EEC)  2262/84,  (EEC)  No  3067/85,  (EEC)
No 1332/92,  (EEC)  No  2159/92,  (EEC)  No  3815/92,  (EC)  No  1255/96,  (EC)
No 1414/97, (EC) No 1638/98 and (EC) No 1873/2002 are repealed.

However, the provisions necessary for the management and control of the production
aid shall remain applicable for the purposes of managing and controlling production
aid related to the marketing years up to the marketing year 2003/04.

Transitional measures may be adopted in accordance with the procedure referred to
in Article 18(2).

The Annex to Regulation (EEC) No 827/68 is amended in accordance with Annex II to this
Regulation.

Article 22

Article 23

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

It shall apply from the 2004/05 marketing year.

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

Done at Brussels,

For the Council
The President

42

ANNEX I

DESCRIPTIONS AND DEFINITIONS OF OLIVE OIL AND OLIVE-POMACE OILS
REFERRED TO IN ARTICLE 4

1.

VIRGIN OLIVE OILS

Oils obtained from the fruit of the olive tree solely by mechanical or other physical
means  under  conditions  that  do  not  lead  to  alterations  in  the  oil,  which  have  not
undergone any treatment other than washing, decantation, centrifugation or filtration,
to the exclusion of oils obtained using solvents or using adjuvants having a chemical
or  biochemical  action,  or  by  re-esterification  process  and  any  mixture  with  oils  of
other kinds.

Virgin olive oils are exclusively classified and described as follows:

(a) Extra virgin olive oil

Virgin olive oil having a maximum free acidity, in terms of oleic acid, of 0,8 g
per 100 g,  the  other  characteristics  of  which  comply  with  those  laid  down  for
this category.

(b) Virgin olive oil

Virgin  olive  oil having  a  maximum free  acidity,  in  terms  of  oleic  acid,  of  2 g
per 100 g,  the  other  characteristics  of  which  comply  with  those  laid  down  for
this category.

(c) Lampante olive oil

Virgin  olive oil having  a  free  acidity, in terms  of  oleic  acid, of  more  than  2 g
per  100 g,  and/or  the  other  characteristics  of  which  comply  with  those  laid
down for this category.

2.

REFINED OLIVE OIL

Olive oil obtained by refining virgin olive oil, having a free acidity content expressed
as oleic acid, of not more than 0,3 g per 100 g, and the other characteristics of which
comply with those laid down for this category.

3.

OLIVE  OIL  –  COMPOSED  OF  REFINED  OLIVE  OILS  AND  VIRGIN  OLIVE
OILS

Olive  oil  obtained  by  blending  refined  olive  oil  and  virgin  olive  oil  other  than
lampante olive oil, having a free acidity content expressed as oleic acid, of not more
than  1 g  per  100 g,  and  the  other  characteristics  of  which  comply  with  those  laid
down for this category.

4.

CRUDE OLIVE-POMACE OIL

Oil obtained from olive pomace by treatment with solvents or by physical means or
oil  corresponding  to  lampante  olive  oil,  except  for  certain  specified  characteristics,
excluding oil obtained by means of re-esterification and mixtures with other types of
oils,  and  the  other  characteristics  of  which  comply  with  those  laid  down  for  this
category.

43

5.

REFINED OLIVE-POMACE OIL

Oil  obtained  by  refining  crude  olive-pomace  oil,  having  free  acidity  content
expressed as oleic acid, of not more than 0,3 g per 100 g, and the other characteristics
of which comply with those laid down for this category.

6.

OLIVE-POMACE OIL

Oil  obtained  by  blending  refined  olive-pomace  oil  and  virgin  olive  oil  other  than
lampante olive oil, having a free acidity content expressed as oleic acid, of not more
than  1 g  per  100 g,  and  the  other  characteristics  of  which  comply  with  those  laid
down for this category.

44

The Annex to Regulation (EEC) No 827/68 is amended as follows:

ANNEX II

(1)

After  the  description  of  the  goods  under  CN  code  1108 20 00  ("– Inulin"),  the
following is inserted:

"1202 10 90

Ground-nuts, not roasted or otherwise cooked, in shell, other than for sowing

1202 20 00

Ground-nuts, not roasted or otherwise cooked, shelled, whether or not broken

1203 00 00

Copra

1206 00 91
ex 1206 00 99

Sunflower seeds, whether or not broken, other than for sowing

1207 10 90

Palm nuts and kernels, whether or not broken, other than for sowing

1207 20 90

Cotton seeds, whether or not broken, other than for sowing

1207 30 90

Castor oil seeds, whether or not broken, other than for sowing

1207 40 90

Sesamum seeds, whether or not broken, other than for sowing

1207 50 90

Mustard seeds, whether or not broken, other than for sowing

1207 60 90

Safflower seeds, whether or not broken, other than for sowing

1207 91 90

Poppy seeds, whether or not broken, other than for sowing

ex 1207 92 98

Shea nuts (Karite nuts), whether or not broken, other than for sowing

1207 99 91

Hemp seeds, whether or not broken, other than for sowing

ex 1207 99 98

Other oilseeds and oleaginous fruits, whether or not broken, other than for sowing

1208

Flours and meals of oil seeds or oleaginous fruits, other than those of mustard"

(2)

After  the  description  of  the  goods  under  CN  code  1503 00  ("Lard  stearin,  lard  oil,
oleostearin, oleo-oil and tallow oil, not emulsified or mixed or otherwise prepared"),
the following is inserted:

"15 04

15 07

15 08

15 11

15 12

15 13

15 14

ex 1515

Fats and oils and their fractions, of fish or marine mammals, whether or not refined,
but not chemically modified

Soya-bean oil and its fractions, whether or not refined, but not chemically modified

Ground-nut oil and its fractions, whether or not refined, but not chemically modified

Palm oil and its fractions, whether or not refined, but not chemically modified

Sunflower  seed,  safflower  or  cotton-seed  oil  and  their  fractions,  whether  or  not
refined, but not chemically modified

Coconut  (copra),  palm  kernel  or  babassu  oil  and  fractions  thereof,  whether  or  not
refined, but not chemically modified

Rape,  colza  or  mustard  oil  and  fractions  thereof,  whether  or  not  refined,  but  not
chemically modified

Other  fixed  vegetable  fats  and  oils  (excluding  jojoba  oil:  1515 90 15)  and  their
fractions, whether or not refined, but not chemically modified

45

ex 1516

ex 1517

1518 00 31

1518 00 39

1522 00 91

1522 00 99

Animal or vegetable fats and oils and their fractions, partly or wholly hydrogenated,
inter-esterified,  reesterified  or  elaidinised,  whether  or  not  refined,  but  not  further
prepared, (excluding hydrogenated castor oil, so called ‘opalwax’: 1516 20 10)

Margarine,  edible  mixtures  or  preparations  of  animal  or  vegetable  fats  or  oils  or  of
fractions of different fats or oils of this Chapter, other than edible fats or oils or their
fractions  of  heading  No  1516,  excluding  subheadings  1517 10 10,  1517 90 10  and
1517 90 93

Fixed  vegetable  oils,  fluid,  mixed  for  technical  or  industrial  uses  other  than  the
manufacture of foodstuffs for human consumption

Oil  foots  and  dregs;  soapstocks,  resulting  from  the  treatment  of  fatty  substances  or
animal or vegetable  waxes, excluding those containing oil having  the  characteristics
of olive oil

Other residues resulting from the treatment of fatty substances or animal or vegetable
waxes, excluding those containing oil having the characteristics of olive oil"

(3)

After  the  description  of  the  goods  under  CN  code  2302 50 00  ("–  of  leguminous
plants"), the following is inserted:

"2304 00 00

2305 00 00

Oil-cake  and  other  solid  residues,  whether  or  not  ground  or  in  the  form  of  pellets,
resulting from the extraction of soya-bean oil

Oil-cake  and  other  solid  residues,  whether  or  not  ground  or  in  the  form  of  pellets,
resulting from the extraction of ground-not oil"

46

FINANCIAL STATEMENT

1.

2.

3.

4.

BUDGET HEADING:
B1-12, B1-141, B1-17, B1-181, B1-40

APPROPRIATIONS:
€8906 million

TITLE OF MEASURE:
Council  Regulation  amending  Regulation  (EC)  No  1782/2003  establishing  common  rules  for  direct
support  schemes  under  the  common  agricultural  policy  and  establishing  certain  support  schemes  for
farmers,
Council Regulation on the common organisation of the market in olive oil and table olives

LEGAL BASIS:
Article 37 of the Treaty
Paragraph 6 of Protocol No 4 on cotton, annexed to the Act of Accession of Greece

AIMS OF PROJECT:
Pursue  the  fundamental  objectives  of  the  CAP  reform  and,  in  particular,  support  sustainable
development.

5.

FINANCIAL IMPLICATIONS:

PERIOD OF
12 MONTHS

 (EUR million)

CURRENT
FINANCIAL
YEAR 2003
(EUR million)

FOLLOWING
FINANCIAL
YEAR 2004
(EUR million)

5.0

5.1

EXPENDITURE CHARGED TO:
–

THE EC BUDGET
B1 - Title 1
B1 - Title 4

NATIONAL BUDGETS
OTHER SECTORS

(REFUNDS/AID)
–
–
REVENUE
–
(LEVIES/CUSTOMS DUTIES)
–

EC OWN RESOURCES

AT NATIONAL LEVEL

5.0.1 ESTIMATED EXPENDITURE

B1 - Title 1
B1 - Title 4

5.1.1 ESTIMATED REVENUE

5.2 METHOD OF CALCULATION:

See Annex

–421
308

–

–
–

–

–
–

–

2005

–
–
–

2006

–314
201
–

2007

2008 et seq.

–363
250
–

–421
308
–

6.0

6.1

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

CAN THE MEASURE BE FINANCED BY TRANSFER BETWEEN CHAPTERS
OF THE CURRENT BUDGET?

6.2

IS A SUPPLEMENTARY BUDGET NECESSARY?

6.3 WILL FUTURE BUDGET APPROPRIATIONS BE NECESSARY?

OBSERVATIONS:

–
–
–

The figures do not take account of the impact of modulation;
the proposal has no impact on administrative expenditure;
an impact study has been drawn up for the tobacco sector.

YES / NO

YES / NO

YES / NO

YES / NO

47

I. Estimated expenditure under the proposal

2006

2007

2008

2009

2010

2011 et seq.

A. Decoupled aid
1. Cotton
2. Olive oil
3. Hops
4. Tobacco

B. Coupled aid
1. Cotton

cotton – inter-branch

2. Olive oil
3. Tobacco

incl. former Tobacco Fund

417,3

417,3

417,3
417,3
1429,7 1429,7 1429,7 1429,7 1429,7
11,2
749,6

11,2
718,5

11,2
749,6

11,2
749,6

11,2
674,1

417,3

278,5
4,3

901,3
177,7
7,1

278,5
4,3

901,3
88,9
4,4

278,5
4,3

901,3
0

278,5
4,3

901,3
0

278,5
4,3

901,3
0

417,3
1429,7
11,2
749,6

278,5
4,3

901,3
0

C. Market measures
1. Olive oil: private storage
2. Tobacco – quota buy-back
3. Tobacco – conversion fund (former scheme)

10,0
p.m.
5,0

10,0
p.m.
p.m.

10,0
p.m.
p.m.

10,0
–
–

10,0
–
–

10,0
–
–

TOTAL B1 – 1

3909,1 3859,7 3801,9 3801,9 3801,9

3801,9

D. Transfer to rural development (1B)
1. Cotton
2. Tobacco

Total B1 - 4

102,9
102,8

102,9
147,2

102,9
205,0

102,9
205,0

102,9
205,0

200,7

250,1

307,9

307,9

307,9

102,9
205,0

307,9

Total under new proposal

2006

2007

2008

2009

2010

2011 et seq.

TOTAL A+B+C+D
1. Cotton
2. Olive oil
3. Hops
4. Tobacco

TOTAL

II. Estimated expenditure under the current
regimes (in accordance with the expen-
diture forecasts contained in Annex I of
document COM(2002) 394 final)

1. Cotton
2. Olive oil
3. Hops
4. Tobacco

TOTAL

803
2341
11
955

4110

803
2341
11
955

4110

803
2341
11
955

4110

803
2341
11
955

4110

803
2341
11
955

4110

803
2341
11
955

4110

2006

2007

2008

2009

2010 2011 et seq.

854
2384
12
973

4223

854
2384
12
973

4223

854
2384
12
973

4223

854
2384
12
973

4223

854
2384
12
973

4223

854
2384
12
973

4223

III. Impact of the measure (I–II) (1)

2006

2007

2008

2009

2010 2011 et seq.

1. Cotton
2. Olive oil
3. Hops
4. Tobacco

TOTAL
– including B1 - 1
– including B1 - 4

-51
-43
-1
-18

-113
-314
201

-51
-43
-1
-18

-113
-363
250

-51
-43
-1
-18

-113
-421
308

-51
-43
-1
-18

-113
-421
308

-51
-43
-1
-18

-113
-421
308

-51
-43
-1
-18

-113
-421
308

(1)

The difference between the new proposal and the estimates of expenditures under the current regimes (in accordance
with the expenditure forecasts contained in Annex I of document COM(2002) 394 final).

48