Proposal for a Council Regulation amending Regulations (EEC) No 2759/75, (EEC) No 2771/75, (EEC) No 2777/75, (EC) No 1254/1999, (EC) No 1255/1999 and (EC) No 2529/2001 as regards exceptional market support measures . (presented by the Commission)
Date: 2004-10-26
Institutions: European Commission
Subjects: EU agricultural market, EU financing, beef, co-financing, common organisation of markets, egg, goatmeat, market support, milk, milk product, pigmeat, poultrymeat, sheepmeat

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 26.10.2004 
COM(2004) 712 final 

2004/0254 (CNS) 

. 

Proposal for a 

COUNCIL REGULATION 

amending Regulations (EEC) No 2759/75, (EEC) No 2771/75, (EEC) No 2777/75,  
(EC) No 1254/1999, (EC) No 1255/1999 and (EC) No 2529/2001  
as regards exceptional market support measures 

. 

(presented by the Commission) 

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EXPLANATORY MEMORANDUM 

In  the  case  of  serious  market  disturbances  due  to  restrictions  imposed  by  the  veterinary 
authorities in the case of outbreaks of animal diseases like Foot and Mouth Disease (FMD) or 
Classical Swine Fever (CSF), exceptional market support measures can be introduced by the 
Commission  in  order  to  support  the  farmers  affected  by  these  restrictions.  In  each  of  the 
following basic regulations, the legal provisions for such measures are laid down in: 

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Article 20 of Council Regulation (EEC) No 2759/75 on the common organisation of 
the market in pigmeat, 

Article 14 of Council Regulation (EEC) No 2771/75 on the common organisation of 
the market in eggs, 

Article 14 of Council Regulation (EEC) No 2777/75 on the common organisation of 
the market in poultrymeat, 

Article 39 of Council Regulation (EC) No 1254/1999 on the common organisation of 
the market in beef and veal, 

Article 36 of Council Regulation (EC) No 1255/1999 on the common organisation of 
the market in milk and milk products and 

Article 22 of Council Regulation (EC) No 2529/2001 on the common organisation of 
the market in sheepmeat and goatmeat. 

These articles provide for support measures which can be adopted; however the articles do not 
specify how they are to be financed. 

In view of the absence of precise rules concerning the financing of those measures, 100% of 
the  expenditure  for  the  measures  was  financed  by  FEOGA  in  the  late  80’s  and  early  90’s, 
especially for measures applied in the pigmeat sector which was confronted from time to time 
with outbreaks of CSF. 

In 1994, provisions regarding co-financing of the expenditure for exceptional market support 
measures  were  introduced  for  the  first  time  in  a  Commission  regulation  opening  such 
measures in the pigmeat sector in Germany. 

At this time, the co-financing rate for measures in the pigmeat sector was set at 70% for the 
Community  budget  and  at  30%  for  the  national  budget.  Later,  the  same  rate  was  used  for 
measures in the beef sector due to BSE and FMD. 

In the Court case C-239/01, several Member States lodged a complaint against the system of 
co-financing for special market support measures in the beef sector. In its ruling in 2003, the 
European  Court  of  Justice  stated  that  a  national  co-financing  of  exceptional  market  support 
measures is not in line with the current wording of the corresponding Council regulation; only 
a 100% financing by the Community budget would be possible. 

It is obvious that this ruling applies to all market organisations for animal products, because 
the articles in the different market organisations are more or less the same. 

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For the European Commission a co-financing system in the framework of exceptional market 
support measures is of utmost importance. Member States are responsible for the application 
of such measures but they are  also responsible for measures taken  to  combat the disease. If 
they share the financial responsibilities for the support measures, they will do their best in the 
veterinary and sanitary field to stamp out the disease as quickly as possible and to minimise 
the costs. An additional argument is the fact that the co-financing system is already used for 
the compensation paid to farmers for veterinary slaughterings of their animals in the case of 
an  outbreak  of  a  disease.  In  its  special  report  No  1/2000  on  classical  swine  fever,  the 
European Court of Auditors recommended a strict  parallelism regarding the co-financing of 
veterinary measures and market support measures. 

In  order  to  be  able  to  continue  co-financing,  after  the  ruling  of  the  Court,  it  is  proposed  to 
amend  the  corresponding  articles  in  the  different  Council  regulations  by  introducing  clear 
legal provisions for such a system. This amendment should concern all market organisations 
referred to above. 

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2004/0254 (CNS) 

Proposal for a 

COUNCIL REGULATION 

amending Regulations (EEC) No 2759/75, (EEC) No 2771/75, (EEC) No 2777/75,  
(EC) No 1254/1999, (EC) No 1255/1999 and (EC) No 2529/2001  
as regards exceptional market support measures 

THE COUNCIL OF THE EUROPEAN UNION, 

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

Having regard to the proposal from the Commission, 

Having regard to the opinion of the European Parliament, 

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

Whereas: 

(1) 

Some  common  market  organisations  include  exceptional  market  support  measures  to 
take  account  of  restrictions  on  free  circulation  resulting  from  the  application  of 
measures to combat the spread of animal diseases. These measures are contained in 

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– 

– 

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Article 20 of Council Regulation (EEC) No 2759/75 of 29 October 1975 on the 
common organisation of the market in pigmeat1, 
Article 14 of Council Regulation (EEC) No 2771/75 of 29 October 1975 on the 
common organisation of the market in eggs2, 
Article 14 of Council Regulation (EEC) No 2777/75 of 29 October 1975 on the 
common organisation of the market in poultrymeat3, 
Article  39  of  Council  Regulation  (EC)  No  1254/1999  of  17  May  1999  on  the 
common organisation of the market in beef and veal4, 
Article  36  of  Council  Regulation  (EC)  No  1255/1999  of  17  May  1999  on  the 
common organisation of the market in milk and milk products5 and 

1 

2 

3 

4 

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OJ  L  282,  1.11.1975,  p.  1.  Regulation  as  last  amended  by  Regulation  (EC)  No  1365/2000 
(OJ L 156, 29.6.2000, p. 5). 
OJ  L  282,  1.11.1975,  p.  49.  Regulation  as  last  amended  by  Regulation  (EC)  No  806/2003 
(OJ L 122, 16.5.2003, p. 1). 
OJ  L  282,  1.11.1975,  p.  77.  Regulation  as  last  amended  by  Regulation  (EC)  No  806/2003 
(OJ L 122, 16.5.2003, p. 1). 
OJ  L  160,  26.6.1999,  p.  21.  Regulation  as  last  amended  by  Regulation  (EC)  No  1782/2003 
(OJ L 270, 21.10.2003, p. 1). 
OJ  L  160,  26.6.1999,  p.  48.  Regulation  as  last  amended  by  Regulation  (EC)  No  186/2003 
(OJ L 29, 3.2.2004, p. 6). 

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– 

Article 22 of Council Regulation (EC) No 2529/2001 of 19 December 2001 on 
the common organisation of the market in sheepmeat and goatmeat6. 

(2) 

(3) 

(4) 

(5) 

As  a  result  of  outbreaks  of  disease  in  the  Community  there  have  been  some  very 
serious  crises  on  the  markets  in  livestock  products,  meats  in  particular.  In  order  to 
avoid serious disruption on the markets concerned, the Commission has been forced to 
adopt exceptional support measures for them in the affected Member States, resulting 
in significant expense to the Community budget. 

The Member States in this regard have prime responsibility for preventing an outbreak 
of  disease  and  its  spread.  In  the  light  of  the  situation,  the  extent  of  the  disease,  its 
duration, and accordingly the scale of the market-support efforts required, the cost of 
the aid actually paid to the producers should be shared between the Community and the 
Member State concerned. 

Adoption of the support measures should be dependent on the adoption by the Member 
States of health and veterinary measures to quickly stamp out any outbreaks of disease. 

The  rules  on  State  aid  should  not  apply  to  the  Member  States’  financial  contribution 
towards the exceptional market support measures, 

HAS ADOPTED THIS REGULATION: 

Article 20 of Regulation (EEC) No 2759/75 is replaced by the following: 

Article 1 

"Article 20 

1. 

2. 

3. 

In  order  to  take  account  of  the  restrictions  on  intra-Community  and  third-country 
trade which may result from the application of measures for combating the spread of 
diseases in animals, exceptional measures of support for the market affected by those 
restrictions may be taken in accordance with the procedure laid down in Article 24. 
These  measures  may  be  taken  only  if  the  Member  States  have  taken  health  and 
veterinary measures to quickly stamp out the disease and only to the extent and for 
the duration strictly necessary to support the market concerned. 

The  Community  shall  provide  part-financing  for  the  measures  referred  to  in 
paragraph 1 equivalent to 50% of the expenditure borne by Member States. 

Articles 87, 88 and 89 of the Treaty shall not apply to the Member States’ financial 
contribution towards the measures referred to in paragraph 1." 

Article 14 of Regulation (EEC) No 2771/75 is replaced by the following: 

Article 2 

6 

OJ  L  341,  22.12.2001,  p.  3.  Regulation  as  last  amended  by  Regulation  (EC)  No  1782/2003 
(OJ L 270, 21.10.2003, p. 1). 

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"Article 14 

1. 

2. 

3. 

In order to take account of the restrictions on free circulation which may result from 
the  application  of  measures  for  combating  the  spread  of  diseases  in  animals, 
exceptional measures of support for the market affected by those restrictions may be 
taken in accordance with the procedure referred to in Article 17. These measures may 
be  taken  only  if  the  Member  States  have  taken  health  and  veterinary  measures  to 
quickly  stamp  out  the  disease  and  only  to  the  extent  and  for  the  duration  strictly 
necessary to support the market concerned. 

The  Community  shall  provide  part-financing  for  the  measures  referred  to  in 
paragraph 1 equivalent to 50% of the expenditure borne by Member States. 

Articles 87, 88 and 89 of the Treaty shall not apply to the Member States’ financial 
contribution towards the measures referred to in paragraph 1." 

Article 14 of Regulation (EEC) No 2777/75 is replaced by the following: 

Article 3 

"Article 14 

1. 

2. 

3. 

In order to take account of the restrictions on free circulation which may result from 
the  application  of  measures  for  combating  the  spread  of  diseases  in  animals, 
exceptional measures of support for the market affected by those restrictions may be 
taken in accordance with the procedure referred to in Article 17. These measures may 
be  taken  only  if  the  Member  States  have  taken  health  and  veterinary  measures  to 
quickly  stamp  out  the  disease  and  only  to  the  extent  and  for  the  duration  strictly 
necessary to support the market concerned. 

The  Community  shall  provide  part-financing  for  the  measures  referred  to  in 
paragraph 1 equivalent to 50% of the expenditure borne by Member States. 

Articles 87, 88 and 89 of the Treaty shall not apply to the Member States’ financial 
contribution towards the measures referred to in paragraph 1." 

Article 39 of Regulation (EEC) No 1254/1999 is replaced by the following: 

Article 4 

"Article 39 

1. 

In order to take account of the restrictions on free circulation which may result from 
the  application  of  measures  for  combating  the  spread  of  diseases  in  animals, 
exceptional measures of support for the market affected by those restrictions may be 
taken in accordance with the procedure referred to in Article 43. These measures may 
be  taken  only  if  the  Member  States  have  taken  health  and  veterinary  measures  to 
quickly  stamp  out  the  disease  and  only  to  the  extent  and  for  the  duration  strictly 
necessary to support the market concerned. 

2. 

The  Community  shall  provide  part-financing  for  the  measures  referred  to  in 
paragraph 1 equivalent to 50% of the expenditure borne by Member States. 

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3. 

Articles 87, 88 and 89 of the Treaty shall not apply to the Member States’ financial 
contribution towards the measures referred to in paragraph 1." 

Article 36 of Regulation (EEC) No 1255/1999 is replaced by the following: 

Article 5 

"Article 36 

1. 

2. 

3. 

In order to take account of the restrictions on free circulation which may result from 
the  application  of  measures  for  combating  the  spread  of  diseases  in  animals, 
exceptional measures of support for the market affected by those restrictions may be 
taken in accordance with the procedure referred to in Article 42. These measures may 
be  taken  only  if  the  Member  States  have  taken  health  and  veterinary  measures  to 
quickly  stamp  out  the  disease  and  only  to  the  extent  and  for  the  duration  strictly 
necessary to support the market concerned. 

The  Community  shall  provide  part-financing  for  the  measures  referred  to  in 
paragraph 1 equivalent to 50% of the expenditure borne by Member States. 

Articles 87, 88 and 89 of the Treaty shall not apply to the Member States’ financial 
contribution towards the measures referred to in paragraph 1." 

Article 22 of Regulation (EEC) No 2529/2001 is replaced by the following: 

Article 6 

"Article 22 

1. 

2. 

3. 

In order to take account of the restrictions on free circulation which may result from 
the  application  of  measures  for  combating  the  spread  of  diseases  in  animals, 
exceptional measures of support for the market affected by those restrictions may be 
taken in accordance with the procedure referred to in Article 25(2). These measures 
may be taken only if the Member States have taken health and veterinary measures to 
quickly  stamp  out  the  disease  and  only  to  the  extent  and  for  the  duration  strictly 
necessary to support the market concerned. 

The  Community  shall  provide  part-financing  for  the  measures  referred  to  in 
paragraph 1 equivalent to 50% of the expenditure borne by Member States. 

Articles 87, 88 and 89 of the Treaty shall not apply to the Member States’ financial 
contribution towards the measures referred to in paragraph 1." 

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

Article 7 

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

Done at Brussels, […] 

For the Council 
The President 

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FINANCIAL STATEMENT 

1. 

2. 

3. 

4. 

BUDGET HEADING: 
05 03  Animal products   
(in particular the lines :05030199, 05030209, 05030399, 05030403 and 
05030408) 

APPROPRIATIONS: 
Budget 2004: 
€239 million 

TITLE: 
Council Regulation amending Regulations (EEC) No 2759/75, (EEC) No 2771/75, (EEC) No 2777/75, 
(EC) No 1254/1999, (EC) No 1255/1999 and (EC) No 2529/2001 as regards exceptional market support 
measures 

LEGAL BASIS: 
 Articles 36 and 37 of the Treaty 

AIMS: 
To  ensure  that  the  Community,  by  sharing  with  the  Member  States  the  financial  responsibilities, 
reinforces the measures which the Member States take to stop epizootic outbreaks. 

5. 

FINANCIAL IMPLICATIONS 

5.0 

CHARGED TO THE EC BUDGET 

EXPENDITURE 
– 
REFUNDS/INTERVENTIONS) 
– 
– 

NATIONAL AUTHORITIES 
OTHER 

12 MONTH 
PERIOD 

(EUR million) 

CURRENT 
FINANCIAL 
YEAR  2004 
(EUR million) 

FOLLOWING 
FINANCIAL 
YEAR  2005 
(EUR million) 

(1) 

(1) 

(1) 

5.1  REVENUE 

– 

– 

– 

OWN RESOURCES OF THE EC  

– 
(LEVIES/CUSTOMS DUTIES) 
– 

NATIONAL 

5.0.1  ESTIMATED EXPENDITURE 
5.1.1  ESTIMATED REVENUE 

5.2  METHOD OF CALCULATION: 

– 

2006 

(1) 
– 

2007 

(1) 
– 

2008 

2009 

(1) 
– 

(1) 
– 

6.0  CAN THE PROJECT BE FINANCED FROM APPROPRIATIONS ENTERED IN THE 

RELEVANT CHAPTER OF THE CURRENT BUDGET? 

6.1  CAN THE PROJECT BE FINANCED BY TRANSFER BETWEEN CHAPTERS OF 

THE CURRENT BUDGET? 

6.2  WILL A SUPPLEMENTARY BUDGET BE NECESSARY? 

YES / NO 

YES / NO 

YES / NO 

6.3  WILL APPROPRIATIONS NEED TO BE ENTERED IN FUTURE BUDGETS? 

YES / NO 

OBSERVATIONS: 

(1) 

The cost of the measure cannot be estimated, since it will depend on the importance of any outbreaks 
which may occur. 

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