Proposal for a Council Regulation amending Regulation (EC) No 1290/2005 on the financing of the common agricultural policy and Regulation (EC) No 1234/2007 establishing a common organisation of agricultural markets and on specific provisions for certain agricultural products (Single CMO Regulation) as regards food distribution to the most deprived persons in the Community {SEC(2008) 2436} {SEC(2008) 2437}
Date: 2008-09-17
Institutions: European Commission
Subjects: EU financing arrangements, agricultural product, aid to disadvantaged groups, common agricultural policy, intervention stock

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COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 17.9.2008 
COM(2008) 563 final 

2008/0183 (CNS) 

Proposal for a 

COUNCIL REGULATION 

amending Regulation (EC) No 1290/2005 on the financing of the common agricultural 
policy and Regulation (EC) No 1234/2007 establishing a common organisation of 
agricultural markets and on specific provisions for certain agricultural products (Single 
CMO Regulation) as regards food distribution to the most deprived persons in the 
Community 

{SEC(2008) 2436} 
{SEC(2008) 2437} 

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EXPLANATORY MEMORANDUM 

1. 

CONTEXT OF THE PROPOSAL 

Council  Regulation  (EEC)  No  3730/87  laid  down  the  general  rules  for  the  supply  of  food 
from intervention stocks to designated organisations for distribution to the most deprived in 
the  Community.  That  Regulation  was  subsequently  repealed  and  integrated  into  the 
Regulation  establishing  a  common  organisation  of  agricultural  markets  and  on  specific 
provisions for certain agricultural products (Single CMO Regulation). 

For  more  than  two  decades  intervention  stocks  made  available  by  the  Community  have 
proven  to  be  a  reliable  supply  of  food  aid  for  the  most  deprived.  The  need  for  food 
distribution  has  grown  following  the  successive  enlargements  that  have  substantially 
increased the Community's needy population. In 2006 more than 13 million people benefited 
from this aid scheme. Moreover, rising food prices are adversely affecting the food security of 
the most deprived persons as well as increasing the costs of providing food aid.  

The  objectives  of  the  Common  Agriculture  Policy  (CAP)  as  defined  in  Article  33(1)  of  the 
Treaty  include  stabilising  the  markets  and  ensuring  that  supplies  reach  consumers  at 
reasonable prices. Over the years the food distribution plans implemented under the scheme 
have  helped  to  achieve  both  objectives  and,  by  reducing  the  food  insecurity  of  the  most 
deprived  persons  in  the  Community,  have  proven  to  be  an  essential  tool,  contributing  to 
guarantee  the  broad  availability  of  food  within  the  European  Union  while  reducing  the 
intervention stocks. 

In recent years, the CAP has been substantially reframed, with a switch of emphasis from the 
primary  objective  of  increasing  productivity  to  enhancing  the  long-term  sustainability  of 
agriculture. In this context, intervention as a regulatory tool has been removed completely for 
some  products  such  as  olive  oil,  sugar  and  maize  and,  for  the  rest,  is  being  returned  to  its 
original  role  as  a  safety  net.  As  a  result,  the  Community  programme's  reliance  on  market 
purchases for the provision of food has increased significantly over the years. 

In its declaration of 4 April 2006 on supplying approved charities working to implement the 
European food aid programme for the most deprived, the European Parliament expressed its 
concern about the future of the European food aid programme for the most deprived and, in 
acknowledgement of the need to meet their food requirements, called on the Commission and 
the Council to put the European food aid programme on a permanent footing.  

More recently, on 22 May 2008, the European Parliament adopted a resolution on rising food 
prices in the EU and the developing countries, in which it stresses the fundamental nature of 
the right to food and the need to improve access for all people at all times to enough food for 
an active, healthy life. 

The Commission has already recognised the importance of this scheme in its Communication 
on "Tackling the challenge of rising food prices – Direction for EU Action" of 20 May 2008. 
During  his  speech  to  the  Parliament  on  18  June  2008,  the  President  of  the  European 
Commission indicated that the Commission foresees an increase in budget for this initiative 
by two thirds. 

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- Consultation of interested parties and impact assessment 

An  internet-based  public  consultation  on  the  Community  food  distribution  programme 
attracted a large response, with replies expressing overwhelming support for the continuation 
of  the  Community  food  distribution  programme.  Suggestions  from  charitable  organisations 
involved in the distribution in the Member States were solicited at two workshops held on 11 
April  and  15  July  2008  and,  in  the  framework  of  the  Management  Committee  for  the 
Common Organisation of Agricultural Markets, national authorities presented their views on 
the implementation of the programme. 

In  accordance  with  the  commitment  to  better  regulation,  the  Commission  has  assessed  the 
impact  of  four  possible  options:  "Status  quo",  where  intervention  stocks  would  remain  the 
sole  permanent  source  of  food;  "  Intervention  stocks  complemented  by  market  purchases  ", 
which  bases  the  programme  on  withdrawals  from  intervention  when  stocks  are  available, 
supplemented  by  market  purchases;  "Market  purchases  only",  where  the  use  of  intervention 
stocks  would  no  longer  be  possible;  and  "Termination  of  food  distribution"  where  the  food 
distribution  programme  would  either  be  phased  out  gradually  or  brought  to  an  end.  The 
Impact Assessment found that the second and third options best achieve the stated objectives. 

2. 

ELEMENTS OF THE PROPOSAL 

In this context the Commission proposes a revision of the food distribution programme based 
on the following elements: 

– 

– 

– 

– 

– 

Two  sources  of  supply.  Food  may  be  sourced  either  from  intervention  stocks  or 
from  the  market.  The  latter  would  no  longer  be  limited  to  situations  of  temporary 
unavailability  of  intervention  stocks.  However,  priority  will  be  given  to  the  use  of 
suitable intervention stocks where these are available. 

Wider  variety  of  foods  to  be  distributed.  In  order  to  improve  the  nutritional 
balance  of  the  food  provided  by  the  programme,  the  products  distributed  would  no 
longer be limited to those for which intervention applies. The food would be chosen 
by  Member  State  authorities  on  the  basis  of  nutritional  criteria  and  distributed  in 
cooperation with civil society partners. 

Long-term perspective. Food distribution activities require long-term planning and 
careful preparation by the national authorities and civil society partners concerned. In 
order  to  enhance  its  efficiency,  the  Community  food  distribution  plan  would  be 
established for three years. The amounts of aid for the second and third years would 
only  be  indicative  and  would  have  to  be  subsequently  confirmed  by  the  budgetary 
authority. 

Clearer  priorities.  Member  States  would  base  their  aid  requests  on  national  food 
distribution  programmes,  setting  out  their  objectives  and  priorities  for  food 
distribution to the most deprived. 

Co-financing.  The  introduction  of  co-financing  would  underpin  the  cohesion 
dimension  of  the  scheme,  ensure  proper  planning  and  reinforce  synergies.  To  help 
make  for  a  smooth  introduction  and  a  continued  high  take-up  of  the  Community 
funding  made  available,  Community  co-financing  rates  would  be  75%  and  85%  in 
Cohesion Member States for the 2010/12 plan. Subsequently, as of the 2013/15 plan, 
the Community co-financing rates would be, respectively 50% and 75%. 

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– 

Reinforcing  monitoring  and  reporting.  Reporting  obligations  at  various  levels 
would  be  increased  and  include  a  report  from  the  Commission  to  the  European 
Parliament and the Council by 31 December 2012, at the latest. 

3. 

BUDGETARY IMPLICATIONS 

The  proposed  rules  are  designated  to  implement  the  new  provisions  for  the  food 
distribution  scheme  for  the  most  deprived  persons  in  the  Community.  The  new 
scheme will be co-financed by the Community; hence the amendment of Article 3(1) 
of Regulation (EC) No 1290/2005 is necessary. These rules by themselves will have 
no impact on the budget. The budget impact will start with the 2010 food distribution 
programme and will be determined at the time that this programme is drawn up. 

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2008/0183 (CNS) 

Proposal for a 

COUNCIL REGULATION  

amending Regulation (EC) No 1290/2005 on the financing of the common agricultural 
policy and Regulation (EC) No 1234/2007 establishing a common organisation of 
agricultural markets and on specific provisions for certain agricultural products (Single 
CMO Regulation) as regards food distribution to the most deprived persons in the 
Community 

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 from the European Parliament1, 

Whereas: 

(1) 

(2) 

(3) 

Council Regulation (EEC) No 3730/87 of 10 December 1987 laying down the general 
rules  for  the  supply  of  food  from  intervention  stocks  to  designated  organisations  for 
distribution  to  the  most  deprived  persons  in  the  Community2,  subsequently  repealed 
and  integrated  into  Council  Regulation  (EC)  No  1234/20073,  has  provided  a  reliable 
source  of  food  for  distribution  to  the  most  deprived  persons  of  the  Community  for 
more than two decades. 

The objectives of the Common Agricultural Policy (CAP) as defined in Article 33(1) 
of  the  Treaty  include  stabilising  the  markets  as  well  as  ensuring  that  supplies  reach 
consumers  at  reasonable  prices.  Over  the  years  the  food  distribution  plans 
implemented  under  the  scheme  have  successfully  underpinned  the  fulfilment  of  both 
objectives  and,  by  reducing  the  food  insecurity  of  the  most  deprived  persons  in  the 
Community,  have  proven  to  be  an  essential  tool  contributing  to  guarantee  broad 
availability of food within the Community while reducing the intervention stocks.  

The  European  Parliament,  in  its  declaration  of  4  April  2006  on  supplying  approved 
charities  working  to  implement  the  European  food  aid  programme  for  the  most 
deprived4,  noted  that  the  European  food  aid  programme  for  the  most  deprived  had 
proved  its  worth  and  was  vital  for  millions  of  Europeans.  Moreover,  it  expressed  its 

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OJ L 352, 15.12.1987, p. 1. 
OJ L 299, 16.11.2007, p. 1. 
OJ C 293 E, 2.12.2006, p. 170. 

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(4) 

(5) 

(6) 

(7) 

concern about the future of the European food aid programme for the most deprived 
and  in  acknowledgement  of  the  need  to  meet  their  food  requirements  called  on  the 
Commission and the Council inter alia to place the European food aid programme on 
a permanent footing. 

The successive enlargements of the Community have increased the potential number 
of beneficiaries of food aid schemes in the Community. At the same time rising food 
prices  have  negatively  affected  the  food  security  of  the  most  deprived  persons  and 
increased the cost of providing the food aid. As a result, the importance of the scheme 
originally set up under Regulation (EEC) No 3730/87 has grown over the years. It is 
therefore essential to continue the scheme at Community level and further adapt it to 
changing market developments. 

The  current  food  distribution  scheme  relies  on  the  distribution  of  products  from 
Community intervention stocks supplemented, on a temporary basis, by purchases on 
the market. However, successive reforms of the CAP and favourable developments of 
producer prices have resulted in a progressive reduction in intervention stocks, as well 
as  the  range  of  products  available.  Consequently,  market  purchases  should  also  be 
made a permanent source of supply for the scheme to complement intervention stocks, 
where suitable intervention stocks are not available.  

A  Community  scheme  cannot  constitute  the  sole  response  to  the  growing  needs  for 
food aid in the Community. National policies implemented by public administrations 
and the mobilisation of civil society are equally necessary to provide food security for 
the  most  deprived.  A  Community  scheme  with  a  strong  cohesive  element  might, 
however, serve as a model for the distribution of food to the most deprived, help create 
synergies  and  encourage  public  and  private  initiatives  aimed  at  increasing  the  food 
security  of  persons  in  need.  Furthermore,  given  the  geographical  dispersion  of  the 
reduced available intervention stocks in the Member States, it can contribute to their 
best  use.  The  Community  scheme  should  therefore  also  be  without  prejudice  to  any 
such national policies. 

In order to fully benefit from the cohesive dimension of the Community scheme and 
reinforce  the  synergies  thereby  created,  and  in  order  to  ensure  proper  planning, 
provision  should  be  made  for  Member  States  to  co-finance  the  food  distribution 
programme. Maximum Community co-financing rates should be provided for and the 
Community financial contribution should be added to the list of measures eligible for 
financing by the European Agricultural Guarantee Fund (EAGF) set out in Article 3(1) 
of Council Regulation (EC) No 1290/20055. Higher co-financing rates should apply in 
the  first  years  of  application  of  the  revised  scheme  in  order  to  ensure  the  continued 
high  take-up  of  funds,  the  gradual  phase  in  of  co-financing,  to  allow  for  a  smooth 
transition and to avoid the risk of discontinuation of the scheme due to a possible lack 
of resources. 

(8) 

The  rate  of  the  contribution  from  the  EAGF  should  be  set  taking  into  account  the 
situation of Member States eligible for funding from the Cohesion Fund, as listed in 

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OJ L 209, 11.8.2005, p. 1.  

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Annex I to Commission Decision 2006/596/EC6 or in subsequent relevant decisions, in 
order to strengthen the economic and social cohesion of the Community. 

(9) 

Experience  has  shown  that  certain  improvements  in  the  management  of  this  scheme 
are  desirable,  in  particular  to  provide  Member  States  and  designated  organisations 
with  a  longer  term  perspective  through  multi-annual  plans.  The  Commission  should 
therefore establish three-year-plans for the implementation of the scheme, based on the 
Member States requests to be communicated to the Commission and other information 
considered relevant by the Commission. Member States should base their requests in 
terms  of  food  products  to  be  distributed  within  any  three-year-plan  on  national  food 
distribution programmes setting out their objectives and priorities for food distribution 
to  the  most  deprived  persons.  The  Commission  should  define  an  objective 
methodology for allocating available funds. 

(10)  Regulations (EC) No 1290/2005 and (EC) No 1234/2007 should therefore be amended 

accordingly, 

HAS ADOPTED THIS REGULATION: 

Article 1 

In Article 3(1) of Regulation (EC) No 1290/2005, the following point (g) is added: 

"(g) 

the  Community's  financial  contribution  to  food  distribution  to  the  most  deprived 
persons  in  the  Community  provided  for  in  Article  27  of  Regulation  (EC)  No 
1234/2007." 

Article 2 

Regulation (EC) No 1234/2007 is amended as follows: 

(1) 

Article 27 is replaced by the following: 

"Article 27 
Food distribution to the most deprived persons in the Community 

1. 

Products in intervention stocks shall be made available or food products shall 
be  purchased  on  the  market  so  that  food  products  may  be  distributed  to  the 
most deprived persons in the Community through organisations designated by 
Member States.  

Food products shall be purchased in the market only where intervention stocks 
suitable for the food distribution scheme are not available.  

2.  Member States wishing to participate in the scheme shall communicate to the 
Commission  national  food  distribution  programmes,  containing  requests  for 

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OJ L 243, 6.9.2006, p. 47. 

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amounts of food products to be distributed during a three-year period and other 
relevant information. 

3. 

The scheme referred to in paragraph 1 shall be based on three-year plans drawn 
up  by  the  Commission,  based  on  requests  notified  by  Member  States  in 
accordance with paragraph 2 and other information considered relevant by the 
Commission.   

The three-year plan shall set out annual financial allocations by the Community 
per  Member  State  and  minimum  annual  financial  contributions  of  Member 
States, determined by the Commission in accordance with a methodology to be 
set  out  in  the  implementing  rules  adopted  in  accordance  with  Article  43(g). 
Allocations for the second and third year of the programme shall be indicative. 
Member  States  participating  in  the  scheme  shall  confirm  every  year  the 
requests  referred  to  in  paragraph  2.  Following  these  confirmations,  the 
Commission  shall  decide  each  subsequent  year  on  the  definitive  allocations, 
within the limits of the appropriations available in the budget. 

The three-year plan may be modified in the light of any relevant developments 
affecting the implementation of the food distribution programmes. 

4. 

The  organisations designated by  the Member States according to paragraph 1 
cannot be commercial undertakings.  

The food products referred to in paragraph 1 shall be released free of charge to 
the designated organisations.  

The distribution of the food products to the most deprived persons shall be: 

(a) 

free of charge, or  

(b) 

at  a  price  which  is  in  no  case  greater  than  that  justified  by  the  costs 
incurred by the designated organisations in implementing the operation, 
other  than  the  costs  that  may  be  covered  under  point  (b)  of  the  second 
subparagraph of paragraph 6. 

5.  Member States participating in the scheme shall: 

(a) 

submit  to  the  Commission  an  annual  report  on  implementation  of  the 
scheme; 

(b)  keep  the  Commission  informed  in  a  timely  manner  on  developments 
affecting the implementation of the food distribution programmes. 

6. 

Eligible costs under the scheme shall be: 

(a) 

the  cost  of  products  released  from  intervention  stocks,  which  shall  be 
accounted  for  at  the  intervention  price,  adjusted  by  coefficients,  where 
necessary, to take account of quality differences; 

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(b) 

the cost of food products purchased on the market. 

The following costs may be considered as eligible in accordance with Article 
43(g):  

(a) 

(b) 

costs  of  transport  of  food  products  referred  to  in  paragraph  1  to  the 
designated organisations; 

costs  of  transport  of  food  products  and  administrative  costs  for  the 
designated  organisations  directly  linked  with  the  implementation  of  the 
scheme.  

7. 

The Community shall co-finance the eligible costs under the scheme. 

The Community co-financing rate shall not exceed: 

(a) 

(b) 

for  the  three-year  plan  starting  on  1 January  2010,  75%  of  the  eligible 
costs,  or  85%  of  the  eligible  costs  in  the  Member  States  eligible  for 
funding  from  the  Cohesion  Fund  for  the  period  2007-2013,  as  listed  in 
Annex I to Commission Decision 2006/596/EC*;  

for subsequent three year plans, 50% of the eligible costs, or 75% of the 
eligible  costs  in  the  Member  States  eligible  for  funding  from  the 
Cohesion  Fund  in  a  given  year,  as  listed  in  Annex  I  to  Decision 
2006/596/EC and in subsequent decisions. 

8. 

The  Community  scheme  shall  be  without  prejudice  to  any  national  schemes 
which respect Community law, whereby food products are distributed to most 
deprived persons." 

* 

OJ L 243, 6.9.2006, p. 47." 

(2) 

In Article 43, points (g) and (h) are replaced by the following: 

"(g)  the  scheme  for  food  distribution  to  the  most  deprived  persons  in  the 
Community  provided  for  in  Article  27,  including  rules  on  financial  and 
budgetary  management,  transfers  of  intervention  products  between  Member 
States and eligible costs and on the coefficients referred to in point (a) of the 
first subparagraph of paragraph 6 of that Article; 

(h) 

the drawing up and modification of the three-year plans provided for in Article 
27(3), including Commission decisions on definitive financial allocations;" 

(3) 

In Article 184, the following point (9) is added: 

"(9)  by  31  December  2012,  at  the  latest,  to  the  European  Parliament  and  the 
Council  on  the  application  of  the  scheme  for  food  distribution  to  the  most 
deprived  persons  in  the  Community  provided  for  in  Article  27,  together  with 
any appropriate proposals." 

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Article 3 

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 in relation to three-year plans starting on or after 1 January 2010. 

For the execution of the 2009 distribution plan, the provisions amended pursuant to Articles 1 
and 2 as they stood before the entry into force of this Regulation shall apply. 

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. 

BUDGET HEADING: 

APPROPRIATIONS 
2008: 
307 mio euro 

05 02 04 01 
TITLE: 
Council Regulation amending Regulation (EC) No 1290/2005 on the financing of the common 
agricultural policy and Regulation (EC) No 1234/2007 establishing a common organisation of 
agricultural markets and on specific provisions for certain agricultural products (Single CMO 
Regulation) 
LEGAL BASIS: 
Article 37 of the Treaty establishing the European Community 
AIMS: 
To implement the new provisions for the food distribution scheme for the most deprived persons 
FINANCIAL IMPLICATIONS 

12 MONTH 
PERIOD 

CURRENT 
FINANCIAL 
YEAR 
2008 
(EUR million) 
- 

FOLLOWING 
FINANCIAL 
YEAR 
2009 
(EUR million) 
- 

2. 

3. 

4. 

5. 

5.0 

CHARGED TO THE EC BUDGET 

EXPENDITURE 
- 
(REFUNDS/INTERVENTIONS) 
- 
- 

NATIONAL AUTHORITIES 
OTHER 

(EUR million) 
- 

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: 

- 

2010 
(a) 
- 

2011 
- 
- 

2012 
- 
- 

2013 
- 
- 

6.0  CAN THE PROJECT BE FINANCED FROM APPROPRIATIONS ENTERED IN THE 

YES NO 

RELEVANT CHAPTER OF THE CURRENT BUDGET? 

6.1  CAN THE PROJECT BE FINANCED BY TRANSFER BETWEEN CHAPTERS OF 

YES NO 

THE CURRENT BUDGET? 

6.2  WILL A SUPPLEMENTARY BUDGET BE NECESSARY? 
6.3  WILL APPROPRIATIONS NEED TO BE ENTERED IN FUTURE BUDGETS? 
OBSERVATIONS: 
(a) 

The proposed rules  aim  at  implementing  the new provisions  for  the food  distribution  scheme  for  the 
most  deprived  persons  in  the  Community.  The  new  scheme  will  be  co-financed  by  the  Community, 
hence,  the  completion  of  Article  3(1)  of  Regulation  (EC)  No  1290/2005.  These  rules  by  themselves 
will  not  have  an  impact  on  the  budget.  The  impact  on  the  budget  will  start  with  the  2010  food 
distribution programme and it will be determined at the time of drawing up this programme. 

YES NO 
YES NO 

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