Council Regulation (EC) No 1261/2007 of 9 October 2007 amending Regulation (EC) No 320/2006 establishing a temporary scheme for the restructuring of the sugar industry in the Community
Date: 2007-10-09
Institutions: Council of the European Union
Subjects: aid for restructuring, production aid, production quota, sugar industry

L 283/8

EN

Official Journal of the European Union

27.10.2007

COUNCIL REGULATION (EC) No 1261/2007

of 9 October 2007

amending Regulation (EC) No 320/2006 establishing a temporary scheme for the restructuring of
the sugar industry in the Community

THE COUNCIL OF THE EUROPEAN UNION,

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

establishing the European

Having regard to the proposal from the Commission,

Having regard to the opinion of the European Parliament,

(4)

Whereas:

(1)

(2)

(3)

Council Regulation (EC) No 320/2006 (1) was adopted
with the aim of enabling the least competitive sugar
producers to give up their quota production. However,
the renunciation of quotas under that Regulation has not
reached the level that was initially expected.

In accordance with Article 10(2) of Council Regulation
(EC) No 318/2006 of 20 February 2006 on the common
the markets in the sugar sector (2), a
organisation of
linear reduction of national and regional quotas is to
the
be carried out by the end of February 2010 at
latest, with a view to avoiding market imbalances in
the marketing years as from 2010/2011,
taking into
account the results of the restructuring scheme. Such a
linear cut may penalise the most competitive under-
takings and weaken the industry as a whole. To avoid
this, it is considered necessary to improve the functioning
of
in order to increase the
renunciation of quotas under that scheme.

the restructuring scheme,

It appears that sugar undertakings have been discouraged
from making applications for restructuring aid by the fact
that
there is no certainty as regards the amount of
restructuring aid that they will receive, since Member
States can decide to increase the minimum percentage
of the aid reserved for growers of beet, cane or chicory
and for machinery contractors,
in accordance with
Article 3(6) of Regulation (EC) No 320/2006. To
remove this uncertainty,
the amount of aid to be
reserved to growers and machinery contractors should
be fixed at 10 % of the aid to be granted to the sugar
undertakings, and the growers concerned should be
the 2008/2009
granted an additional payment

for

(1) OJ L 58, 28.2.2006, p. 42.
(2) OJ L 58, 28.2.2006, p. 1. Regulation as

last amended by
Commission Regulation (EC) No 247/2007 (OJ L 69, 9.3.2007,
p. 3).

(5)

(6)

(7)

marketing year.
In certain cases, a longer preparatory
period for the restructuring process is needed. Where,
in such cases, undertakings decide to apply for restruc-
turing aid as from the marketing year 2009/2010, and in
order not to disadvantage growers in such cases, the
additional payment to growers should also be granted
for the 2009/2010 marketing year provided that
the
undertaking’s application is submitted by 31 January
2008.

In order not to penalise undertakings and growers who
took part in the restructuring scheme in the 2006/2007
and 2007/2008 marketing years, the difference between
the aid amount granted for those marketing years and
the aid amount that would have been granted for the
2008/2009 marketing year should be paid retroactively
to them.

it

In order to create a further incentive to participate in the
restructuring scheme,
is considered appropriate to
provide for the exemption of a part of the temporary
restructuring amount
to be paid in accordance with
Article 11 of Regulation (EC) No 320/2006 for the
2007/2008 marketing
to those undertakings
year
which renounce, for the 2008/2009 marketing year, a
percentage of
the withdrawal
percentage applied to the undertaking in 2007/2008.
The amount to be exempted should correspond to this
withdrawal percentage.

their quota of at

least

Moreover, it is appropriate to set up a two-phase appli-
cation procedure which should allow undertakings who
decide up until 31 January 2008 to renounce a part of
their quota, corresponding to at least that withdrawal
percentage,
to submit a second application by 31
March 2008 enabling them to renounce a further part
or the totality of
the market
situation known at that stage.

their quota in view of

It is considered that the restructuring scheme would give
better result if growers were able to give up on their own
initiative their production of beet or cane intended to be
processed into quota sugar. To that end, growers should
in the 2008/2009 marketing year be given the possibility
to apply directly for the aid provided for in Article 3(6)
of Regulation (EC) No 320/2006 provided that
they
cease to deliver sugar beet or cane to the undertakings
to which they were bound by delivery contracts in the
previous marketing year. As a consequence, Member
States should reduce the quota of the sugar undertakings
concerned. In certain cases it may be more appropriate to
apply this possibility at Member State level rather than at
undertaking level.

27.10.2007

EN

Official Journal of the European Union

L 283/9

(8)

In order to avoid endangering the economic viability of
the sugar undertakings concerned by growers’ aid appli-
cations, the quota reduction should be limited to 10 % of
the quota allocated to each undertaking, which corre-
sponds to the percentage of quota which the Member
State can re-allocate each marketing year in accordance
with Article 11(1) of Regulation (EC) No 318/2006.

(9) Where the quota of a sugar undertaking is reduced as a
result of growers’ aid applications,
that undertaking
should be granted restructuring aid as referred to in
Article 3(1)(c) of Regulation (EC) No 320/2006. Conse-
the aid amounts granted should be those
quently,
that Regulation.
referred to in Article 3(5)(c) of
However,
adjusted
downwards if the undertaking does not take measures
in favour of the workforce concerned by the reduction
of quota production.

amounts

should

those

be

until

should

January

preceding

(10) A sugar undertaking concerned by growers’ aid appli-
cations
the
31
marketing year concerned retain the right to submit an
application for
in
Articles 3 and 4 of Regulation (EC) No 320/2006,
provided that it renounces a quota corresponding to at
least the same level of quota reduction that would have
resulted from the applications for aid lodged by growers.
In that case the sugar undertaking’s aid application
should replace the growers’ applications.

restructuring aid as provided for

(11) Article 6 of Regulation (EC) No 320/2006 provides for
aid for diversification. It has become apparent that there
is need to clarify the meaning of the third subparagraph
of paragraph 4 of that Article. It should be made clear
that the aid payable in accordance with that Article in
respect of measures envisaged under Axis 1 and 3 of
Council Regulation
of 20
(EC) No
September 2005 on support for rural development by
the European Agricultural Fund for Rural Development
(EAFRD) (1)
is limited by the amounts and rates of
support as set out in the Annex to that Regulation.

1698/2005

(12) Article 10(4) of Regulation (EC) No 320/2006 provides
for the dates of payments of the aids under the restruc-
certain
turing fund. Experience
conditions a further incentive for the uptake of
the
fund could be set by advancing the payments. The
Commission should therefore be empowered to decide
on such a measure taking into account the availability
of financial means in the fund.

that under

shows

longer any need to refer to that product or to the raw
material from which it is produced, that is to say chicory,

HAS ADOPTED THIS REGULATION:

Article 1

Regulation (EC) No 320/2006 is amended as follows:

1. Article 3 shall be amended as follows:

(a) paragraph 1(c) shall be replaced by the following:

‘(c) renounces a part or the total of the quota assigned
by it to one or more of its factories and does not
factories
use
concerned for refining raw cane sugar.

the production facilities of

the

This last condition shall not apply in respect of:

— the sole processing plant in Slovenia,

— the sole beet processing plant in Portugal,

existing on 1 January 2006 and full-time refiners as
defined in point 13 of Article 2 of Regulation (EC)
No 318/2006.’;

(b) in paragraph 6, the first and second subparagraphs shall

be replaced by the following:

‘An amount of 10 % of the relevant restructuring aid
fixed in paragraph 5 shall be reserved for:

(a) growers of sugar beet and cane having concluded a
delivery contract with the undertaking concerned
during a period preceding the marketing year
referred to in paragraph 2 for the production of
sugar under the relevant quota renounced;

(b) machinery contractors, being private persons or
enterprises having worked under contract with their
the
agricultural machinery for
products and in the period referred to in point (a).

the growers,

for

(13)

Regulation (EC) No 320/2006 should therefore be
amended accordingly.

After consultation of
the interested parties, Member
States shall determine the period referred to in the first
subparagraph.’;

(14) Account should be taken in this Regulation of the fact
that the total quota for production of inulin syrup has
already been renounced under the restructuring scheme
in the 2006/2007 marketing year. Hence, there is no

(1) OJ L 277, 21.10.2005, p. 1. Regulation as last amended by Regu-

lation (EC) No 2012/2006 (OJ L 384, 29.12.2006, p. 8).

(c)

the following paragraphs shall be added:

For

‘7.
the 2008/2009 marketing year, growers
referred to in paragraph 6(a) shall receive an additional
payment of EUR 237,5 per
sugar quota
renounced.

tonne of

L 283/10

EN

Official Journal of the European Union

27.10.2007

This additional payment shall also be made for the
2009/2010 marketing year where
the undertaking
concerned renounces a part or the totality of the sugar
from that marketing year
quota allocated to it as
by
that
provided
31 January 2008.

application

submitted

the

is

whether applications at growers’ initiative or by themselves
were submitted previously.

___________
(*) OJ L 78, 17.3.2007, p. 20.’;

8.

This paragraph shall apply to:

3. the following Article shall be inserted:

(a) undertakings having renounced under the restruc-
turing scheme in the 2006/2007 or 2007/2008
marketing year a part or the totality of the quota
allocated to them; and

(b) growers

concerned by

the quota

renunciation

referred to in point (a).

Where the amounts granted to undertakings and growers
in the 2006/2007 and 2007/2008 marketing years were
less than the amounts that they would have received if
they had restructured under the conditions applicable in
the 2008/2009 marketing year, the difference shall be
granted to them retroactively.

The same shall apply in respect of inulin syrup producers
and chicory growers. The latter shall, for that purpose, be
deemed as being eligible for the additional payment
referred to in paragraph 7.’;

2. after Article 4(1), the following paragraph shall be inserted:

‘1a.
Undertakings may submit an additional application
for restructuring aid to renounce, as from the marketing
year 2008/2009, a further part or the totality of the quota
allocated to them, until 31 March 2008 in the case where:

— applications at growers’

initiative in accordance with
Article 4a or of an undertaking in accordance with
paragraph 1 of this Article to renounce quota as from
the marketing year 2008/2009 have been granted, and

— the quota renounced accordingly corresponds at least to
the withdrawal percentage set on 16 March 2007 by
Article 1(1) or Article 1(2) of Commission Regulation
(EC) No 290/2007 of 16 March 2007 establishing
for
the percentage
provided for in Article 19 of Council Regulation (EC)
No 318/2006 (*).

the 2007/2008 marketing year,

However, undertakings situated in Member States where the
withdrawal percentage set at the date specified in the second
indent of the first subparagraph is 0 may make use of the
possibility stipulated in that subparagraph independently of

‘Article 4a

Application for restructuring aid by growers

1.
For the 2008/2009 marketing year, any grower of
sugar beet or cane intended to be processed into quota
sugar may submit to the Member State concerned a direct
application for the aid provided for in Article 3(6) and 3(7),
accompanied by a commitment to cease delivery of a certain
amount of quota beet or cane to the undertaking with which
he has concluded a delivery contract
in the preceding
marketing year.

By way of derogation from the first subparagraph,
in the
framework of an agreement within the trade it may be
decided that only growers who have concluded delivery
contracts in the preceding marketing year with one and
the same undertaking shall be entitled to submit an appli-
cation as referred to in the first subparagraph provided that:

— the quota allocated to that undertaking corresponds to at
least 10 % of the remaining sugar quota fixed for the
Member State concerned in Annex III
to Regulation
(EC) No 318/2006, and

— the amount of sugar quota to be renounced by that
undertaking plus the amount of sugar quota already
renounced by all undertakings within the Member State
concerned as a consequence of previous applications in
accordance with Article 4 of Regulation (EC) No
320/2006 correspond to at
the sugar
quota fixed for that Member State in Annex III to Regu-
lation (EC) No 318/2006 on 20 February 2006. For
those Member States which were not members of the
Community on 1 July 2006, the reference to the said
Annex III shall concern the version applicable on the
date of their accession to the Community.

least 60 % of

2.
The applications referred to in paragraph 1 shall be
submitted by 30 November 2007. Applications may be
submitted as from the 30 October 2007.

3.
The Member State concerned shall establish a list of
applications referred to in paragraph 1 in the chronological
their lodging and shall communicate the total
order of
received
amount of quota affected by the applications
within 10 working days
for
submission as referred to in paragraph 2 to the Commission
and the undertakings concerned.

the deadline

following

27.10.2007

EN

Official Journal of the European Union

L 283/11

the chronological order

By 15 March 2008, the Member State concerned shall,
4.
on the basis of
referred to in
paragraph 3 and after the verification provided for in the
fourth indent of Article 5(2), grant growers’ applications
corresponding to up to 10 % of the sugar quota allocated
to each undertaking and shall reduce in proportion the sugar
quota of
the undertaking concerned in accordance with
Article 11(4) of Regulation (EC) No 318/2006. However,
in the case referred to in the second subparagraph of
paragraph 1 of this Article, the Member States concerned
shall, under the same conditions, grant growers’ applications
corresponding up to 10 % of the remaining sugar quota
fixed for this Member State in Annex III
to Regulation
(EC) No 318/2006.

In the case where any of the limits of 10 % referred to in the
first subparagraph is reached, the Member State concerned
shall reject the applications above this limit according to the
chronological order of submission.

The undertaking concerned shall establish and implement a
social plan as referred to in Article 4(3)(f).

As a result of the Member State’s acceptance of appli-
the amount of

5.
cations in accordance with paragraph 4,
restructuring aid to be granted shall be as follows:

(a)

for growers and contractors, 10 % of the relevant aid
amount fixed in Article 3(5)(c) and for growers the addi-
tional payment referred to in Article 3(7);

(b) for undertakings, the relevant aid amount fixed in Article
3(5)(c), reduced by 10 %, or by 60 % if the undertaking
concerned does not respect the requirement set out in
the third subparagraph of paragraph 4 of this Article.

6.
Paragraphs 4 and 5 of this Article shall not apply
where an undertaking’s application in accordance with
Article 4 has been granted as from the marketing year
2008/2009 renouncing an amount of quota higher than
the quota affected by the growers’ applications. The same
shall apply in any case, where an undertaking’s application
has been granted as from the marketing year 2008/2009
renouncing more than 10 % of its quota.’;

‘In the case of submission of additional applications for
restructuring aid in accordance with Article 4(1a), Member
States shall decide, after the verification provided for in the
fourth indent of Article 5(2) on the granting of that aid
linked to these applications by the end of April 2008.’;

5.

in Article 6(4), the third subparagraph shall be replaced by
the following:

‘The aid provided for in paragraph 1 of this Article shall not
be higher than the amounts and rates of support laid down
in the Annex to Regulation (EC) No 1698/2005.’;

6. Article 10(5) shall be replaced by the following:

‘5.
The Commission may decide to postpone payment of
the aids referred to in Articles 6, 7, 8 and 9 until the
necessary financial resources have been paid into the restruc-
turing fund or,
in the case where the necessary financial
resources are available in that fund, to advance the dates
for the payment of the aids.’;

7.

in Article 11, the following paragraph shall be added:

‘6.
In the 2008/2009 marketing year, undertakings which
were subject to the application of the withdrawal percentage
set on 16 March 2007 by Article 1(1) or Article 1(2) of
Regulation (EC) No 290/2007 and which renounce a
percentage of
that withdrawal
percentage shall be exempted from part of the temporary
restructuring amount
the 2007/2008
marketing year.

their quota of at

to be paid for

least

In the case where the conditions referred to in the first
subparagraph of this paragraph are fulfilled, the reduction
of the temporary restructuring amount shall be calculated
by multiplying that amount by the withdrawal percentage
set in accordance with Article 1(1) or 1(2)(c) of Regulation
(EC) No 290/2007.’

4.

in Article 5(1), the following subparagraph shall be added:

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

Article 2

L 283/12

EN

Official Journal of the European Union

27.10.2007

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

Done at Luxembourg, 9 October 2007.

For the Council
The President

F. TEIXEIRA DOS SANTOS