Proposal for a Council Regulation amending Regulation (EC) No 1234/2007 establishing a common organisation of agricultural markets and on specific provisions for certain agricultural products (single CMO Regulation)
Date: 2009-10-09
Institutions: European Commission
Subjects: agricultural product, common organisation of markets, milk, milk product, redirection of production, single market, trading operation

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COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 9.10.2009 
COM(2009)539 final 

2009/0152 (CNS) 

Proposal for a 

COUNCIL REGULATION 

amending Regulation (EC) No 1234/2007 establishing a common organisation of 
agricultural markets and on specific provisions for certain agricultural products 
(single CMO Regulation)  

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EXPLANATORY MEMORANDUM 

Articles  65  to  84  of  Council  Regulation  (EC)  No  1234/2007  (Single  CMO)  lay  down 
provisions for the management of the quota system in the dairy sector. 

In  particular,  it  is  provided  that  Member  States  may  set  up  a  national  reserve  as  part  of  its 
national quota  with a view to  allocate further individual quotas to certain priority  groups of 
milk producers, defined by the Member State concerned. The surplus levy is only liable for 
milk marketed in excess of the national quota incl. the national reserve. Where a surplus levy 
is  found  to  be  payable  it  shall  be  allocated  among  the  producers  who  have  overrun  their 
individual quota. 

Within  the  quota  arrangements  Member  States  have  the  possibility  to  encourage  the 
restructuring  process  in  the  sector  through  a  quota  buy-out  scheme  (Article  75(1)(a)  of  the 
single CMO) where the quotas bought-out is subsequently placed in the national reserve. In 
order to help Member States financing that restructuring process it is proposed on a temporary 
basis to neutralise, for the purpose of establishing the national overrun, the quotas bought-out 
under the above mentioned Article. 

As  a  consequence,  the  surplus  levy  will  be  triggered  for  milk  marketed  in  excess  of  the 
national quota as reduced by the bought-out quantities. The supplementary levy generated in 
that way shall be retained by Member States for the purpose of financing the restructuring of 
the sector. 

During  the  discussion  at  the  Council  meeting  on  7  September  2009  concerning  the 
Communication  from  the  Commission  to  the  Council  on  the  dairy  market  situation  2009 
(COM(2009) 385),  Member  States  required  the  Commission  to  adapt  market  instruments  or 
create new ones in order to be able to react effectively to the increasing price volatility in a 
swift and flexible manner. 

It is proposed therefore to extend the scope of Article 186 of the single CMO Regulation to 
enable  the  Commission  to  take  measures  with  regard  also  to  the  dairy  sector  in  cases  of 
market disturbances where internal market prices significantly rise or fall. 

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2009/0152 (CNS) 

Proposal for a 

COUNCIL REGULATION 

amending Regulation (EC) No 1234/2007 establishing a common organisation of 
agricultural markets and on specific provisions for certain agricultural products 
(single CMO Regulation)  

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 Commission1, 

Having regard to the opinion of the European Parliament2, 

Whereas: 

(1) 

(2) 

(3) 

(4) 

(5) 

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2 
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For the purpose of restructuring milk production in the Community, Article 75(1)(a) of 
Council  Regulation  (EC)  No  1234/2007  of  22  October  2007  establishing  a  common 
organisation of agricultural markets and on specific provisions for certain agricultural 
products (Single CMO Regulation)3 gives to the Member States the possibility to grant 
compensation to producers who undertake to abandon permanently all or part of their 
milk production and place the individual quotas thus released in the national reserve. 

In  order  to  stimulate  further  the  necessary  restructuring,  the  surplus  levy  payable  by 
the milk producers pursuant to Article 78(1) of Regulation (EC) No 1234/2007 should 
be  calculated  on  the  basis  of  the  national  quota  reduced  by  the  individual  quotas 
bought-up  under  Article  75(1)(a),  subject  to  the  condition  that  those  released  quotas 
remain in the national reserve in the quota year concerned. 

Given  the  necessity  to  reinforce  the  financial  instruments  for  further  restructuring  of 
the  sector,  Member  States  should  be  allowed  to  use  for  the  same  restructuring 
purposes the additional money collected on the basis of the new calculation method. 

This  calculation  method  should  be  applicable  on  a  temporary  basis,  for  the  twelve-
month  periods  starting  on  1  April  2009  and  1  April  2010  and  only  as  regards  milk 
deliveries in order to limit the measure to the extent necessary. 

Article 186 of Regulation (EC) No 1234/2007 provides that the Commission can take 
measures in cases of disturbances of the market of certain agricultural products where 

OJ C …, …, p. …. 
OJ C …, …, p. …. 
OJ L 299, 16.11.2007, p. 1. 

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internal market prices significantly rise or fall. Milk and milk products are, however, 
not covered by that Article. 

(6) 

In  view  of  the  serious  difficulties  and  the  increasing  price  volatility  on  the  dairy 
market it is appropriate to enlarge the scope of Article 186 to milk and milk products, 
thus enabling the Commission to react to market disturbances in a flexible and swift 
manner. 

(7) 

Regulation (EC) No 1234/2007 should therefore be amended accordingly, 

HAS ADOPTED THIS REGULATION: 

Article 1 

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

(1) 

Article 78 is amended as follows: 

(a)  The following paragraph 1a is inserted: 

"1a.  By  way  of  derogation  from  the  first  subparagraph  of  paragraph  1,  for 
the  twelve-month  periods  starting  on  1  April  2009  and  1  April  2010  and  as 
regards deliveries the surplus levy shall be payable on milk marketed in excess 
of  the  national  quota  as  established  in  accordance  with  Subsection  II  and 
reduced by individual quotas for deliveries released into the national reserve in 
accordance  with  Article  75(1)(a)  as  from  dd/mm/yy  (date  to  be  filled  by 
OPOCE,  corresponding  to  the  date  of  entry  into  force  in  accordance  with 
Article  2  )  and  kept  therein  until  31  March  of  the  twelve-month  period 
concerned." 

(b)  The following paragraph 2a is inserted: 

"2a.  The  difference  between  the  amount  of  the  surplus  levy  resulting  from 
the  application  of  paragraph  1a  and  that  resulting  from  the  application  of  the 
first  subparagraph  of  paragraph  1  shall  be  used  by  the  Member  State  for 
financing restructuring measures in the dairy sector." 

(2) 

In Article 79, the following paragraph is added: 

"For the twelve-month periods starting on 1 April 2009 and 1 April 2010 and 
as  regards  the  deliveries,  the  surplus  levy  shall  be  entirely  allocated,  in 
accordance  with  Articles  80  and  83,  among  the  producers  who  have 
contributed to the overrun of the national quota as established by application of 
Article 78(1a)." 

(3) 

In Article 186, point (a) is replaced by the following: 

"(a)  with regard to the products of the sugar, hops, beef and veal, milk and 
milk  products,  sheepmeat  and  goatmeat  sectors,  where  the  prices  on  the 
Community market for any of those products rise or fall significantly;". 

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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 

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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Fichefin/09/281327rev1
(MS/tm) 
6.142.2009.1 
DATE: 24.09.2009… 
APPROPRIATIONS: 
619 Mio € 
p.m. 

FINANCIAL STATEMENT 

1. 

2. 

3. 

4. 

5. 

5.0 

BUDGET HEADING: PDB 2010 
05 02 12 
67 03 
TITLE:  
Council Regulation amending 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 
AIMS: 
- To provide for the possibility for Member States to grant compensation to producers who undertake to 
abandon permanently all or part of their milk production and place the individual quotas thus released in 
the national reserve and this during the 12-month periods starting on 1 April 2009 and 1 April 2010.  
- To enlarge the scope of Article 186 to the market for milk and milk products, thus enabling the 
Commission to react to market disturbances in a flexible and swift manner. 
FINANCIAL IMPLICATIONS 

12 MONTH 
PERIOD 

CURRENT 
FINANCIAL 
YEAR 
2009 
(EUR million) 

FOLLOWING 
FINANCIAL YEAR 
2010 
(EUR million) 

CHARGED TO THE EC BUDGET 

EXPENDITURE 
- 
(REFUNDS/INTERVENTIONS) 
- 
- 

NATIONAL AUTHORITIES 
OTHER 

(EUR million) 
p.m. 

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: 

- 

2011 
p.m. 
- 

p.m. 

- 

2012 
p.m. 
- 

2013 
p.m. 
- 

2014 
p.m. 
- 

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: 

YES NO 
YES NO 

The extension of Article 186 to cover milk and dairy products, will not in itself lead to a change of the 
budgetary needs. Any proposed legislation based on the proposed amendment would be subject to the 
usual budget procedures. 
The proposal to exclude the bought up quota placed in the national reserve from the calculation of the 
superlevy will have two effects. 
Firstly it may slightly increase the superlevy due in the Member States in question. This additional 
superlevy amount will stay in the MS so there would be no change to the foreseen superlevy received by 
the EU-budget as assigned revenue. However, it should be underlined that following the Health Check 
decision, no superlevy has been foreseen to be collected as from budget year 2011. (Commission 
Working Document DS 1245/08 dated 12 December 2008) 
Secondly, the quota buy-up should reduce milk supply and thereby reduce the production of surplus 
products needing support, leading to a reduction in budgetary needs. This reduction will depend on the 
market situation at the time and is not quantifiable at the moment. 

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