Proposal for a Council Regulation amending Regulation (EC) No 1788/2003 establishing a levy in the milk and milk products sector
Date: 2006-06-23
Institutions: European Commission
Subjects: agricultural levy, milk, milk product, production quota, regulation of agricultural production

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 23.6.2006 
COM(2006) 330 final 

2006/0108 (CNS) 

Proposal for a 

COUNCIL REGULATION 

amending Regulation (EC) No 1788/2003  
establishing a levy in the milk and milk products sector 

(presented by the Commission) 

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EXPLANATORY MEMORANDUM 

Due to the new CAP financing regulation (Council Regulation (EC) No 1290/2005 of 21 June 
2005),  the  milk  levy  paid  by  Member  States  shall  be  regarded  as  assigned  revenue  as  of 
1 January 2007. 

In this context, it is appropriate to make the levy available at the start of the budget year in 
order to improve budgetary forecasting and make budgetary management more flexible. 

Council Regulation (EC) No 1788/2003 should be amended accordingly so that the levy due 
shall  be  paid  by  Member  States  in  the  period  between  16  October  to  30  November  of  each 
year rather than before 1 October under the current rules. 

Furthermore,  in  some  new  Member  States,  the  dairy  sector  has  quickly  adapted  to  the  new 
commercial  opportunities  in  an  extended  European  market,  generating  a  substantial 
restructuring  process.  Due  to  this  situation  but  also  due  to  stricter  hygiene  provisions  for 
direct sales after Accession it appears that individual producers to a large extent have chosen 
not  to  apply  for  individual  reference  quantities  for  direct  sales.  Consequently,  in  some  new 
Member States, the total individual reference quantities allocated to the producers for direct 
sales  are  substantially  below  the  national  reference  quantities  and  unused  quantities  remain 
therefore in the national reserves for direct sales, hindering a further restructuration.  

For  the  quota  year  2005/06  it  is  therefore  appropriate  exceptionally  to  provide  for  a  single 
transfer of the national reference quantity from direct sales to deliveries upon request by the 
new  Member  State  concerned.  Council  Regulation  (EC)  No  1788/2003  should  therefore  be 
amended accordingly. 

Due  to  the  urgency  of  the  two  amendments  the  draft  Regulation  should  enter  into  force  as 
soon as possible. 

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2006/0108 (CNS) 

Proposal for a 

COUNCIL REGULATION 

amending Regulation (EC) No 1788/2003  
establishing a levy in the milk and milk products sector 

THE COUNCIL OF THE EUROPEAN UNION, 

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

Having regard to the proposal from the Commission, 

Having regard to the opinion of the European Parliament1, 

Whereas: 

(1) 

(2) 

(3) 

According  to  Article  34(1)(b)  of  Council  Regulation  (EC)  No  1290/2005  of  21 June 
2005 on the financing of the common agricultural policy2, sums which are collected or 
recovered  under  Council  Regulation  (EC)  No  1788/20033  shall  be  regarded  as 
assigned  revenue  within  the  meaning  of  Article  18  of  Council  Regulation  (EC, 
Euratom) No 1605/2002 of 25 June 2002 on the Financial Regulation applicable to the 
general budget of the European Communities4. 

In  order  to  improve  budgetary  forecasting  and  make  budgetary  management  more 
flexible,  it  is  appropriate  to  make  the  levy  introduced  by  Regulation  (EC) 
No 1788/2003 available at the start of the budget year. Provision should be therefore 
made  for  the  levy  due  to  be  paid  in  the  period  running  from  16  October  to 
30 November of each year. 

For  the  Czech  Republic,  Estonia,  Cyprus,  Latvia,  Lithuania,  Hungary,  Poland, 
Slovenia  and  Slovakia  (hereinafter  referred  to  as  the  “new  Member  States”)  the 
reference quantities for deliveries and direct sales were initially set out in table (f) of 
Annex I  to  Regulation  (EC)  No 1788/2003.  Subsequently  and  in  the  light  of  the 
conversions  requested  by  producers,  those  quantities  were  adapted  for  each  Member 
State by the Commission in accordance with Article 8 of that Regulation. 

1 
2 

3 
4 

OJ C …, …, p. …. 
OJ  L  209,  11.8.2005,  p. 1.  Regulation  as  amended  by  Regulation  (EC)  No 320/2006  (OJ L 58, 
28.2.2006, p. 42). 
OJ L 270, 21.10.2003, p. 123. Regulation as last amended by the Act of Accession of 2003. 
OJ L 248, 16.9.2002, p. 1. 

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(4) 

The  national  reference  quantities  for  direct  sales  were  fixed  on  the  basis  of  the 
situation  before  the  accession  of  the  new  Member  States.  However,  following  the 
restructuring  process  in  the  dairy  sectors  in  the  new  Member  States  and  stricter 
hygiene  provisions  for  direct  sales,  it  appears  that  individual  producers  to  a  large 
extent  have  chosen  not  to  apply  for  individual  reference  quantities  for  direct  sales. 
Consequently,  the  total  individual  reference  quantities  allocated  to  the  producers  for 
direct  sales  are  substantially  below  the  national  reference  quantities  and  important 
unused quantities therefore remain in the national reserves for direct sales. 

(5) 

In  order  to  solve  this  problem  and  to  make  possible  the  use  of  the  direct  sales 
quantities that may remain unused in the national reserve, it is appropriate to allow in 
the 2005/2006 period for a single transfer of the reference quantities for direct sales to 
the reference quantities for deliveries if requested by a new Member State. 

(6) 

Regulation (EC) No 1788/2003 should therefore be amended accordingly, 

HAS ADOPTED THIS REGULATION: 

Article 1 

Regulation (EC) No 1788/2003 is amended as follows: 

(1) 

In Article 3, paragraph 1 is replaced by the following:  

“1.  Member  States  shall  be  liable  to  the  Community  for  the  levy  resulting  from 
overruns  of  the  national  reference  quantity  fixed  in  Annex  I,  determined 
nationally  and  separately  for  deliveries  and  direct  sales,  and  between 
16 October  and  30  November  following  the  twelve-month  period  concerned, 
shall  pay  it,  within  the  limit  of  99%  of  the  amount  due,  into  the  European 
Agricultural Guidance and Guarantee Fund (EAGGF).”  

(2) 

In Article 8(1), the following subparagraph is added: 

“For  the  2005/2006  period,  in  accordance  with  the  same  procedure,  and  for  the 
Czech Republic, Estonia, Cyprus, Latvia, Lithuania, Hungary, Poland, Slovenia and 
Slovakia,  the  Commission  may  also  adapt  the  division  between  “deliveries”  and 
“direct  sales”  of  the national reference quantities  after the end  of  that period  at the 
request  of  the  Member  State  concerned.  This  request  shall  be  submitted  to  the 
Commission  before  dd/mm/yyyy  [i.e  X  weeks  following  the  publication  of  this 
regulation,  to  be  fixed  depending  on  date  of  publication].  The  Commission  shall 
subsequently adapt the division as soon as possible.” 

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

Article 2 

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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 (2006 budget):  
05 02 12 07 
TITLE: Council Regulation amending Regulation (EC) No 1788/2003 establishing a levy in the milk 
and milk products sector 
LEGAL BASIS: Article 37 of the Treaty 
AIMS:  
1) 

to change the date of payment of the levy due to the Community budget, i.e. in the period running 
from 16 October to 30 November following the 12-month period of the quota year; 
to allow 8 new Member States to transfer totally or partially the national reference quantities for 
direct sales to the reference quantities for deliveries. 

APPROPRIATIONS: 
–EUR 389 million 

2) 

5. 

FINANCIAL IMPLICATIONS 

5.0 

EXPENDITURE CHARGED TO 
THE EC BUDGET 
– 
(REFUNDS/INTERVENTION) 
– 
– 

NATIONAL ADMINISTRATION 
OTHER 

5.1  REVENUE 

ASSIGNED REVENUE  
– 
(LEVIES/CUSTOMS DUTIES) 
– 

NATIONAL 

12 MONTH 
PERIOD 

(EUR million) 
– 

CURRENT 
FINANCIAL 
YEAR 2006 
(EUR million) 
+306 
– 

1) 
2) 

FOLLOWING 
FINANCIAL 
YEAR 2007 
(EUR million) 
– 

– 

– 

1) 
2) 

– 
–30,6 

5.0.1  ESTIMATED EXPENDITURE 
5.1.1  ESTIMATED REVENUE 
CALCULATION METHOD: 
5.2 
1)  changing the date of payment of the levy due: between 16 October and 30 November following the quota year 

2008 
– 
– 

2009 
– 
– 

2010 
– 
– 

2011 
– 
– 

instead of before 16 October following the quota year 
The measure proposed concerns a defer the date of the perception of the milk quota levy and this for the first 
time from financial year 2006 to financial year 2007. There will thus be an impact on financial year 2006 which 
will be deprived of this amount. 
– budgetary impact for the 2006 budget: 
1 000 000 t x 

–309,1 €/t x 99% = 
Article 05 02 12 07: 
The revenue of € 306 Mio as the levy for marketing year 2005/2006 transferred to financial year 2007 will be 
neutralised by a lesser revenue for the levy for the marketing year 2006/07 (postponed to budget year 2008) 
using the same underlying hypothesis in 2007. In conformity with Article 34 § 1b of Regulation 1782/2005 the 
levy will be classified as assigned revenue as from 2007 onwards,  

€306 million  (2005/06 quota year) 

– budgetary impact for the 2007 budget (assigned revenue): 

Article 67 03: 
It should be noted that the PDB 2007 already takes this proposed change into account. 

€ 0 million 

2)  transfer between 'direct sales' and 'deliveries' in the new Member States 

The hypothesis of a transfer of 100 000 t from the 'direct sales' quota to the 'deliveries' quota in Poland, which 
would  already  exceed  its  present  reference  quantities  by  about  365 000  t,  would  lead  to  a  loss  of  levy  for 
2005/2006 (2007 budget) of: 

Article 67 03: 

–309,1 €/t x 99% = 
Considering that, in the other MS concerned, the existing reference quantities will probably not be exceeded, a 
possible transfer in these MS would not lead to exceeding their quota and, consequently, not entail a loss of levy.

–€30,6 million 

100 000 t x 

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? 
IS A SUPPLEMENTARY BUDGET NECESSARY? 

6.2 
6.3  WILL APPROPRIATIONS NEED TO BE ENTERED IN FUTURE BUDGETS? 
OBSERVATIONS: 

YES NO 

YES NO 
YES NO 
YES NO 

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