Proposal for a COUNCIL REGULATION determining measures on fixing certain aids, refunds and prices related to the single common organisation of agricultural markets
Date: 2011-04-11
Institutions: European Commission
Subjects: EU agricultural market, State aid, common agricultural policy, common organisation of markets, export, foodstuff

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EUROPEAN COMMISSION 

Brussels, 11.4.2011 
COM(2011) 193 final 

2011/0075 (NLE) 

Proposal for a 

COUNCIL REGULATION  

determining measures on fixing certain aids, refunds and prices related to the single 
common organisation of agricultural markets 

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EXPLANATORY MEMORANDUM 

1. 

CONTEXT OF THE PROPOSAL 

On 21 December 2010 the Commission adopted a Proposal for a Regulation of the 
European  Parliament  and  of  the  Council  establishing  a  common  organisation  of 
agricultural  markets  and  on  specific  provisions  for  certain  agricultural  products 
(Single CMO Regulation)1, the purpose of which is to align Council Regulation (EC) 
No 1234/20072 on the Single Common Market Organisation with the differentiation 
between  delegated  and  implementing  powers  of  the  Commission  introduced  by 
Articles  290  and  291  of  the  Treaty  on  the  Functioning  of  the  European  Union 
(TFEU). 

In the above proposal, the Commission proposed that the Council should determine 
measures on the fixing of certain aids, refunds and prices under Article 43(3) TFEU, 
which is the purpose of this proposal. 

Following  the  entry  into  force  of  the  Lisbon  Treaty,  the  ordinary  legislative 
procedure is now the standard procedure for the adoption of EU legislative acts. In 
particular, Article 43(2) TFEU requires the use of the ordinary legislative procedure 
"to  establish  the  common  organisation  of  agricultural  markets  …  and  the  other 
provisions  necessary  for  the  pursuit  of  the  objectives  of  the  common  agricultural 
policy".  

Article  43(3)  TFEU  stipulates  that  "The  Council,  on  a  proposal  from  the 
Commission,  shall  adopt  measures  on  fixing  prices,  levies,  aids  and  quantitative 
limitations  (…)".  As  an  exception  to  the  standard  procedure,  Article  43(3)  TFEU 
needs to be interpreted restrictively so as to ensure that the Legislator can exercise its 
legislative  prerogatives  under  Article  43(2)  TFEU.  This  includes  the  Legislator 
regulating  the  fundamental  elements  of  the  common  agricultural  policy  and  taking 
the  political  decisions  that  shape  its  structure,  instruments  and  effects.  Against  this 
background  the  specific  procedure  laid  down  in  Article  43(3)  TFEU  should  only 
apply  where  an  issue  referred  to  in  that  provision  does  not  form  part  of  the 
fundamental  policy  decisions  reserved  to  the  Legislator  under  Article  43(2)  TFEU. 
Therefore, where such an issue is inextricably linked with the political substance of 
the  decisions  to  be  taken  by  the  Legislator,  Article  43(3)  TFEU  should  not  be 
applied. 

Against  this  background,  the  Commission  in  its  proposal  for  a  new  Single  CMO 
Regulation  has  proposed  that  measures  on  the  fixing  of  certain  aids,  refunds  and 
prices, as referred to in Article 43(3), which do not fall in the scope of Article 43(2) 
TFEU,  shall  be  taken  by  the  Council.  The  relevant  Articles  of  the  Single  CMO 
proposal are: 

(i)  Articles 20 and 21 on the mandatory aid for private storage of butter; 

(ii)  Article 99 on the production refund in the sugar sector; 

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COM(2010) 799 final 
OJ L 299, 16.11.2007, p. 1.  

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(iii)  Article  101  on  aid  for  skimmed  milk  and  skimmed  milk  powder  for  use  as 

feedingstuffs; 

(iv)  Article  102  on  aid  for  skimmed  milk  powder  processed  into  casein  and 

caseinates; 

(v)  Article 108 on the supply of milk products to pupils; 

(vi)  Article 155 on aid for silkworm rearers; 

(vii)  Article 273 on export refund fixation; and 

(viii)  Article 281 on minimum export prices for live plants.  

In respect of the above mentioned provisions, the proposal provides for measures on 
the  fixing  of  aid  amounts,  export  refunds  and  minimum  export  prices  to  be 
determined by the Council under Article 43(3) TFEU and that amounts of such aids, 
refunds  and  prices  should  be  fixed  by  the  Commission  by  means  of  implementing 
acts.  

2. 

RESULTS OF CONSULTATIONS WITH THE INTERESTED PARTIES AND 
IMPACT ASSESSMENTS 

There was no need for consultation of interested parties or for an impact assessment 
since  the  proposal  introduces  no  change  of  substance  compared  to  the  existing 
situation.  Rather  the  proposal  is  limited  to  adapting  the  Single  Common  Market 
Organisation to the new requirements introduced by the Lisbon Treaty, which is an 
inter-institutional matter.  

3. 

LEGAL ELEMENTS OF THE PROPOSAL 

•  Summary of the proposal 

Establish the corresponding procedure for adoption of the acts related to the Single 
Common  Market  Organisation  which  do  not  fall  within  the  scope  of  Article  43(2) 
TFEU. 

•  Legal basis 

Article 43(3) TFEU. 

•  Subsidiarity principle 

Agricultural policy is of shared competence between the EU and the Member States. 
This  means  that  as  long  as  the  EU  does  not  legislate  in  a  sector  Member  States 
maintain  their  competence.  The  proposal,  together  with  the  Commission's  parallel 
proposal (COM(2010)799 final), is limited to adapting the existing Single Common 
Market Organisation to the Lisbon Treaty. The existing common market organisation 
has, by definition, the role of regulating the markets of agricultural products and of 
defining  the  common  rules  for  these  products.  Market  mechanisms  in  force  are 
intended  to  exclude  any  discrimination  between  producers  or  consumers  within  the 

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Union (Article 40(2) TFEU). This approach is not affected by the present proposal, 
which respects the subsidiarity principle in relation to Member States competences in 
the agricultural sector.  

•  Proportionality principle 

The proposal entails no change to the existing situation in terms of financial impacts 
or burdens. 

•  Choice of instruments 

Proposed instrument: Council Regulation 

4. 

BUDGETARY IMPLICATION  

This measure does not involve any additional Union expenditure. 

5. 

ADDITIONAL INFORMATION  

The  proposal  is  directly  linked  with  the  Proposal  for  a  Regulation  of  European 
Parliament  and  of  the  Council  establishing  a  common  organisation  of  agricultural 
markets  and  on  specific  provisions  for  certain  agricultural  products  (Single  CMO 
Regulation). 

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2011/0075 (NLE) 

Proposal for a 

COUNCIL REGULATION (EU) [No …/..  

of…  

determining measures on fixing certain aids, refunds and prices related to the single 
common organisation of agricultural markets  

THE COUNCIL OF THE EUROPEAN UNION, 

Having  regard  to  the  Treaty  on  the  Functioning  of  the  European  Union,  and  in  particular 
Article 43(3) thereof, 

Having regard to the proposal from the European Commission, 

Whereas: 

(1) 

(2) 

(3) 

(4) 

(5) 

Regulation  of  the  European  Parliament  and  of  the  Council  (EU)  No  [xxxx/yyyy], 
establishing a common organisation of agricultural markets and on specific provisions 
for  certain  agricultural  products  (Single  CMO  Regulation)3  refers  to  measures  to  be 
adopted by the Council in accordance with Article 43(3) of the Treaty. 

To  ensure  the  proper  functioning  of  the  system  of  aid  for  private  storage  of  butter, 
appropriate conditions should be determined to fix the amounts of aid and to adapt aid 
following adverse changes in market conditions unforeseeable at the time of entry into 
storage of butter.  

To  ensure  an  efficient  production  refund  system  for  certain  products  of  the  sugar 
sector, appropriate conditions should be set to fix the amount of the production refund.  

To  achieve  the  aim  of  the  aid  scheme  for  skimmed  milk  and  skimmed  milk  powder 
intended  for  use  as  feedingstuffs,  appropriate  conditions  should  be  set  to  fix  the 
amounts of aid.  

To  achieve  the  aim  of  the  aid  scheme  for  skimmed  milk  processed  into  casein  and 
caseinates, appropriate conditions should be set to fix the amounts of aid and to adapt 
aid according to the type of product that the skimmed milk is processed into and the 
quality of those products.  

(6) 

To ensure the proper functioning of the aid scheme for the supply of certain processed 
milk products to pupils in educational establishments functions smoothly and to ensure 

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OJ L […], […], p. […]. 

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flexibility  in  the  scheme's  administration,  appropriate  conditions  should  be  set  to  fix 
the amounts of aid for all milk and other eligible milk products.  

(7) 

(8) 

(9) 

To ensure an effective aid scheme for silkworm rearers and flexibility in the scheme's 
administration, appropriate conditions should be set to fix the amounts of aid.  

To  ensure  the  proper  functioning  of  the  export  refund  system,  appropriate  measures 
should  be  set  to  fix  the  amount  of  the  refunds.  In  addition,  in  the  cereals  and  rice 
sectors appropriate measures should be set to fix the corrective amounts and to provide 
for  the  adjustment  of  the  refund  amount  in  line  with  any  changes  in  the  level  of  the 
intervention price.  

To  ensure  the  proper  functioning  of  the  export  system  of  certain  live  plants  and, 
particularly,  to  take  into  account  market  developments,  appropriate  measures  should 
be set to fix the minimum export prices.  

(10)  To  ensure  an  efficient  day-to-day  management  of  the  Common  Agricultural  Policy, 
the measures on fixing aid, refunds and prices set out in the present Regulation should 
be limited to the broad conditions allowing concrete  amounts to  be laid  down in the 
specific  circumstances  of  each  case.  In  order  to  ensure  uniform  conditions  for  the 
implementation  of  this  Regulation,  implementing  powers  should  be  conferred  on  the 
Commission to lay down those amounts. Those powers should be exercised with the 
assistance  of  the  Committee  established  by  Article  323(1)  of  Regulation  (EU)  No 
[xxxx/yyyy]  and  in  accordance  with  Regulation  (EU)  No  182/2011  of  the  European 
Parliament and of the Council of 16 February 2011 laying down the rules and general 
principles  concerning  mechanisms  for  control  by  the  Member  States  of  the 
Commission’s  exercise  of  implementing  powers4.  Furthermore,  to  ensure  a  swift 
response  by  the  Commission  to  fast  changing  market  situations,  it  should  be 
empowered to fix new refund levels and, in the cereals and rice sectors, to adapt the 
corrective  amount  without  the  assistance  of  the  Committee  referred  to  in  Article 
323(1) of Regulation (EU) No [xxxx/yyyy], 

HAS ADOPTED THIS REGULATION: 

Article 1 

Scope 

This Regulation provides for measures on the fixing of certain aids, refunds and prices related 
to the single common organisation of agricultural markets established by Regulation (EU) No 
[xxxx/yyyy ]("Single CMO Regulation"). 

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OJ L 55, 28.2.2011 

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Article 2 

Commission powers 

Save  as  otherwise  provided  for  in  this  Regulation,  where  powers  are  conferred  upon  the 
Commission, it shall adopt implementing acts in accordance with the procedure referred to in 
Article 323(2) of the Single CMO Regulation. 

Article 3 

Aid for private storage of butter 

Aid  amounts  for  private  storage  for  butter,  as  referred  to  in  Article  20  of  the  Single  CMO 
Regulation, shall be fixed by the Commission taking into account storage costs and the likely 
trends in prices for fresh butter and butter from stocks.  

Where, at the time of removal from storage, an adverse change, unforeseeable at the time of 
entry into storage, occurs on the market, the Commission may increase the amount of the aid. 

Article 4 

Production refund in the sugar sector 

The production refund for the products of the sugar sector, as referred to in Article 99 of the 
Single CMO Regulation, shall be fixed by the Commission taking into account, in particular: 

(a) 

(b) 

the costs arising from the use of imported sugar that the industry would have to bear 
in the event of supply from the world market; and  

the  price  of  surplus  sugar  available  on  the  Union  market  or,  if  there  is  no  surplus 
sugar on that market, the reference price for sugar fixed in point (c) of Article 8(1) of 
the Single CMO Regulation.  

Article 5 

Aid for skimmed milk and skimmed milk powder for use as feedingstuffs 

Aid amounts for skimmed milk and skimmed milk powder for use as feedingstuffs, as referred 
to in Article 101 of the Single CMO Regulation, shall be fixed by the Commission taking into 
account the reference price for skimmed milk powder fixed in point (e)(ii) of Article 8(1) of 
the Single CMO Regulation, and the development of the market situation as regards skimmed 
milk and skimmed milk powder. 

Article 6 

Aid for skimmed milk processed into casein and caseinates 

Aid amounts for skimmed milk processed into casein and caseinates, as referred to in Article 
102 of the Single CMO Regulation, shall be fixed by the Commission taking into account the 

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reference  price  for  skimmed  milk  powder  fixed  in  point  (e)(ii)  of  Article  8(1)  of  the  Single 
CMO Regulation, and the development of the market situation as regards skimmed milk and 
skimmed milk powder. 

The  aid  referred  to  in  the  first  paragraph  may  be  varied  by  the  Commission,  according  to 
whether the skimmed milk is processed into casein or caseinates and according to the quality 
of those products. 

Article 7 

Aid for the supply of milk products to pupils 

Aid  amounts  for  the  supply  of  milk  products  to  pupils,  as  referred  to  in  Article  108  of  the 
Single  CMO  Regulation,  shall  be  fixed  by  the  Commission  taking  into  account  the  need  to 
sufficiently encourage the supply of milk products to educational establishments. 

Aid  amounts  for  eligible  milk  products  other  than  milk  shall  be  fixed  by  the  Commission 
taking into account the milk components of the product concerned. 

Article 8 

Aid for silkworm rearers 

Aid  amounts  granted  to  silkworm  rearers,  as  referred  to  in  Article  155  of  the  Single  CMO 
Regulation,  shall  be  fixed  by  the  Commission  taking  into  account  the  organisation  of  the 
silkworm  rearing  sector  in  certain  regions  of  the  Union  and  the  need  to  facilitate  the 
adaptation of supply to the market situation.  

Article 9 

Export refund fixation 

1. 

2. 

Export refunds, as referred to in Article 273 of the Single CMO Regulation, shall be 
fixed by the Commission.  

Refunds may be fixed by the Commission: 

(a) 

at regular intervals; 

(b)  by tendering procedures for cereals, rice, sugar and milk and milk products. 

Except  where  fixed  by  tendering  procedure,  the  Commission  shall  fix  the  list  of 
products on which an export refund is granted and the amount of export refunds at 
least once every three months. The amount of the refund may, however, remain at the 
same level for more than three months and may, where necessary, be adjusted in the 
intervening  period  by  the  Commission  without  the  assistance  of  the  Committee 
referred to in Article 323(1) of the Single CMO Regulation, either at the request of a 
Member State or on its own initiative. 

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3. 

One or more of the following aspects shall be taken into account when refunds for a 
certain product are being fixed: 

(a) 

the existing situation and the future trend with regard to: 

(i) 

prices and availabilities of that product on the Union market,  

(ii)  prices for that product on the world market. 

(b) 

(c) 

the aims of the common market organisation which are to ensure equilibrium 
and the natural development of prices and trade on this market; 

the need to avoid disturbances likely to cause a prolonged imbalance between 
supply and demand on the Union market; 

(d) 

the economic aspect of the proposed exports; 

(e) 

(f) 

(g) 

the limits resulting from agreements concluded in accordance with Article 218 
of the Treaty; 

the need to establish a balance between the use of Union basic products in the 
manufacture  of  processed  goods  for  export  to  third  countries  and  the  use  of 
third country products brought in under processing arrangements; 

the most favourable marketing costs and transport costs from Union markets to 
Union  ports  or  other  places  of  export  together  with  forwarding  costs  to  the 
countries of destination; 

(h)  demand on the Union market; 

(i) 

in respect of the pigmeat, eggs and poultrymeat sectors, the difference between 
prices within the Union and prices on the world market for the quantity of feed 
grain  input  required  for  the  production  in  the  Union  of  products  of  those 
sectors.  

Article 10 

Specific measures on export refunds for cereals and rice  

1. 

2. 

The Commission may fix a corrective amount applicable to the export refunds fixed 
in respect of the cereals and rice sectors. Where necessary, the Commission, without 
the  assistance  of  the  Committee  referred  to  in  Article  323(1)  of  the  Single  CMO 
Regulation, may amend the corrective amounts. 

The Commission may apply the first subparagraph to products of the cereals and rice 
sectors  that  are  exported  in  the  form  of  goods  listed  in  Annex XVII  to  the  Single 
CMO Regulation. 

For the first three months of the marketing year, the refund applicable to exports of 
malt, either in storage at the end of the previous marketing year or made from barley 
in stock at that time, shall be that which would have applied in respect of the export 

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licence in question to exports made during the last month of the preceding marketing 
year. 

3. 

The refund on products listed in points (a) and (b) of Part I of Annex I to the Single 
CMO Regulation, established in accordance with Article 274(2) of the Single CMO 
Regulation, may be adjusted by the Commission in line with any changes in the level 
of the intervention price. 

The  first  subparagraph  may  be  applied,  in  whole  or  in  part,  to  products  listed  in 
points (c)  and (d)  of  Part I  of  Annex I  to  the  Single  CMO  Regulation  as  well  as  to 
products listed in Part I of that Annex I and exported in the form of goods referred to 
in Part I of Annex XVII to the Single CMO Regulation. In that case, the adjustment 
referred  to  in  the  first  subparagraph  shall  be  corrected  by  the  Commission  by 
applying a coefficient expressing the ratio between the quantity of basic product and 
the quantity thereof contained in the processed product exported or used in the goods 
exported. 

Article 11  

Minimum export prices for live plants 

One  or  more  minimum  prices  for  exports  of  the  live  plants  sector  to  third  countries,  as 
referred to  in  Article 281 of the  Single CMO Regulation, may  be  fixed  by  the  Commission 
taking into account, in particular, the prices on international markets.  

Article 12  

Entry into force 

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

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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