Proposal for a COUNCIL REGULATION amending Regulation (EU) No 1370/2013 determining measures on fixing certain aids and refunds related to the common organisation of the markets in agricultural products, as regards applicable quantitative limitations for buying-in butter and skimmed milk powder
Date: 2016-04-11
Institutions: Directorate-General for Agriculture and Rural Development, European Commission
Subjects: butter, common organisation of markets, farm price support, intervention buying, intervention policy, intervention price, market stabilisation, quantitative restriction, skimmed milk powder

EUROPEAN 
COMMISSION 

Brussels, 11.4.2016  
COM(2016) 208 final 

2016/0111 (NLE) 

Proposal for a 

COUNCIL REGULATION 

amending Regulation (EU) No 1370/2013 determining measures on fixing certain aids 
and refunds related to the common organisation of the markets in agricultural products, 
as regards applicable quantitative limitations for buying-in butter and skimmed milk 
powder 

EN 

   EN 

 
 
 
  
 
EXPLANATORY MEMORANDUM 

1. 

CONTEXT OF THE PROPOSAL 

1.1. 

Reasons for and objectives of the proposal 

The  milk  and  milk  products  sector  is  experiencing  a  prolonged  period  of  severe  market 
imbalance. Global demand for milk and milk products has deteriorated in the course of 2015, 
notably due to the introduction and prolongation of the Russian import ban and the weakening 
of imports in China (main world importer of dairy products). At the same time milk supply 
has generally increased in the main exporting regions. 

Milk production in the Union is steadily increasing as investments in milk production capacity 
were made in the Union in view of milk quota expiry and positive medium term prospects on 
the world market. Milk deliveries in the Union increased by 2.5% in 2015, representing more 
than 3.5 million tonnes of raw milk in addition. Milk volumes produced in excess have to be 
processed into long term storable products such as butter and skimmed milk powder (SMP). 
Indeed,  production  increased  by  8.1%  for  SMP  and  by  4.7%  for  butter  in  2015.  DG  AGRI 
estimates point to a further increase by 1.4% of EU milk deliveries in 2016. 

Prices of butter and SMP in the Union have consequently declined in years 2014 and 2015, 
when  skimmed  milk  powder  prices  hit  the  public  intervention  price.  Butter  prices  are  still 
above the public intervention price but under downward pressure . 

Article 3 of Council Regulation (EU) No 1370/2013  sets quantitative limitations for buying-
in  butter  and  skimmed  milk  powder  at  the  fixed  price  referred  to  in  Article  2  of  the  same 
Regulation  (50  000  tonnes  for  butter  and  109  000  tonnes  for  SMP).  Once  those  limits  are 
reached,  buying-in  is  to  be  carried  out  by  way  of  a  tendering  procedure  to  determine  the 
maximum buying-in price. 

Commission Delegated Regulation (EU) 2015/1549 advanced the  public intervention period 
for  butter  and  skimmed  milk  powder  in  2016  to  1  January,  as  an  exceptional  measure  to 
secure  the  undisrupted  availability  of  the  public  intervention  mechanism  in  a  situation  of 
market disturbance in the milk and milk products sector. 

In  the  additional  public  intervention  period  opened  by  Commission  Delegated  Regulation 
(EU)  2015/1549  for  year  2016  (January-February  2016),  54  522  tonnes  of  SMP  have  been 
offered, meaning half of the quantitative limitation set for buying-in at fixed price by Council 
Regulation (EU) No 1370/2013. 

In  order  to  help  the  milk  and  milk  products  sector  find  a  new  balance  under  the  prevailing 
severe  market  situation,  and  preserve  confidence  in  the  effectiveness  of  intervention 
mechanisms, it is appropriate to increase the quantitative limitations for buying-in butter and 
skimmed milk powder at fixed price in the year 2016. 

As it is possible that, by the time this Regulation enters into force, a tendering procedure for 
buying-in might have been automatically triggered, it is necessary not to take into account the 
volumes bought-in under that procedure so that they are not deducted from the new available 
ceilings. 

EN 

2 

   EN 

In  order  to  ensure  that  the  temporary  measures  provided  for  in  this  Regulation  have  an 
immediate  impact  on  the  market  and  contribute  to  stabilise  prices,  this  Regulation  should 
enter into force on the day following that of its publication. 

1.2. 

Consistency with existing policy provisions in the policy area 

This  proposal  is  consistent  with  the  spirit  of  the  common  organisation  of  the  markets  in 
agricultural products, aiming at stabilising markets and ensuring a fair standard of living for 
the agricultural community. 

The  proposal  is  consistent  with  Article  43(3)  of  the  TFEU  by  which  the  Council,  on  a 
proposal  from  the  Commission,  shall  adopt  measures  on  fixing  prices,  levies,  aid  and 
quantitative limitations and on the fixing and allocation of fishing opportunities. 

Consistency with other Union policies 

1.3. 

N/A 

2. 

LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY 

2.1. 

Legal basis 

Article 43(3) of the Treaty on the Functioning of the European Union. 

2.2. 

Subsidiarity (for non-exclusive competence)  

The  proposal  falls  under  shared  competence  between  the  EU  and  the  Member  States  and 
complies with the subsidiarity principle. 

2.3. 

Proportionality 

The proposal complies with the proportionality principle. 

Choice of the instrument 

RESULTS 
CONSULTATIONS AND IMPACT ASSESSMENTS 

EX-POST 

EVALUATIONS, 

OF 

STAKEHOLDER 

Ex-post evaluations/fitness checks of existing legislation 

Stakeholder consultations 

Collection and use of expertise 

Impact assessment 

Regulatory fitness and simplification 

2.4. 

N/A 

3. 

3.1. 

N/A 

3.2. 

N/A 

3.3. 

N/A 

3.4. 

N/A 

3.5. 

N/A 

EN 

3 

   EN 

Fundamental rights 

3.6. 

N/A 

4. 

BUDGETARY IMPLICATIONS 

The  budgetary  impact  of  this  proposal  is  limited  to  the  price  difference  between  the  fixed 
price referred to Article 2 of Council Regulation (EU) No 1370/2013 and the price that would 
have  been  eventually  determined  under  a  tendering  procedure.  Under  current  circumstances 
(and based on past experiences), it is likely that the latter would have been set at a level close 
to the fixed price, so that the actual budgetary implication would be negligible. 

OTHER ELEMENTS 

Implementation plans and monitoring, evaluation and reporting arrangements 

Explanatory documents (for directives) 

Detailed explanation of the specific provisions of the proposal 

5. 

5.1. 

N/A 

5.2. 

N/A 

5.3. 

N/A 

EN 

4 

   EN 

2016/0111 (NLE) 

Proposal for a 

COUNCIL REGULATION 

amending Regulation (EU) No 1370/2013 determining measures on fixing certain aids 
and refunds related to the common organisation of the markets in agricultural products, 
as regards applicable quantitative limitations for buying-in butter and skimmed milk 
powder 

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) 

The milk and milk products sector is experiencing a prolonged period of severe market 
imbalance.  While  word  import  demand  for  milk  and  milk  products  remained  overall 
stable in 2015 compared to 2014, production significantly increased in the Union and 
other main exporting regions.  

(2)  Milk production in the Union is steadily increasing as investments in milk production 
capacity were made in the Union in view of milk quota expiry and positive medium 
term prospects on the world market. Milk volumes produced in excess are processed 
into long term storable products such as butter and skimmed milk powder.  

(3) 

(4) 

(5) 

1 

2 

Prices of butter and skimmed milk powder in the Union have consequently declined in 
years  2014  and  2015,  when  skimmed  milk  powder  prices  hit  the  public  intervention 
price.  Butter  prices  are  still  above  the  public  intervention  price  but  under  downward 
pressure. 
Article 3 of Council Regulation (EU) No 1370/20131 sets quantitative limitations for 
buying-in butter and skimmed milk powder at the fixed price referred to in Article 2 of 
that Regulation. Once those limits are reached, buying-in is to be carried out by way of 
a tendering procedure to determine the maximum buying-in price. 
Article  1  second  paragraph  of  Commission  Delegated  Regulation  (EU)  2015/15492 
advanced  the  public  intervention  period  for  butter  and  skimmed  milk  powder  in  the 
year  2016  to  1  January,  as  an  exceptional  measure  to  secure  the  undisrupted 
availability of the public intervention mechanism in a situation of market disturbance 
in the milk and milk products sector. 

Council Regulation (EU) No 1370/2013 of 16 December 2013 determining measures on fixing certain 
aids and refunds related to the common organisation of the markets in agricultural products (OJ L 346, 
20.12.2013, p. 12). 
Commission  Delegated  Regulation  (EU)  2015/1549  of  17  September  2015  laying  down  temporary 
exceptional  measures  for  the  milk  and  milk  product  sector  in  the  form  of  extending  the  public 
intervention period for butter and skimmed milk powder in 2015 and advancing the public intervention 
period for butter and skimmed milk powder in 2016 (OJ L 242, 18.9.2015, p. 28). 

EN 

5 

   EN 

                                                 
 
(6) 

(7) 

(8) 

(9) 

In  the  additional  public  intervention  period  opened  by  Commission  Delegated 
Regulation (EU) 2015/1549 for the year 2016, half of the quantitative limitation set for 
buying-in  skimmed  milk  powder  at  fixed  price  by  Council  Regulation  (EU)  No 
1370/2013 has been reached. 

In  order  to  help  the  milk  and  milk  products  sector  to  find  a  new  balance  under  the 
prevailing  severe  market  situation,  and  preserve  confidence  in  the  effectiveness  of 
public  intervention  mechanisms,  it  is  appropriate  to  increase  the  quantitative 
limitations  for  buying-in  butter  and  skimmed  milk  powder  at  fixed  price  in  the  year 
2016. 

In the event that a tendering procedure is operated before the entry into force of this 
Regulation,  it  is  necessary  that  possible  volumes  bought-in  under  that  procedure  are 
not  taken  into  account  to  determine  the  available  volumes  for  buying-in  butter  and 
skimmed milk powder at fixed price in 2016. 

In order to ensure that the temporary measures provided for in this Regulation have an 
immediate  impact  on  the  market  and  contribute  to  stabilise  prices,  this  Regulation 
should enter into force on the day following that of its publication, 

HAS ADOPTED THIS REGULATION: 

Article 1 

In Article 3(1) of Council Regulation (EU) No 1370/2013, the following second subparagraph 
is added: 

'In the year 2016, the quantitative limitations for buying-in butter and skimmed milk 
powder  at  fixed  price  shall  be  100  000  tonnes  butter  and  218  000  tonnes  skimmed 
milk powder. In the eventuality that a tendering procedure was operated before [date 
of publication], volumes bought-in under that procedure shall not be deducted from 
the aforementioned quantitative limitations.' 

This  Regulation  shall  enter  into  force  on  the  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

EN 

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FINANCIAL STATEMENT 

FS/16/CM/1489821  
agri.ddg2.c.3(2016) 
1362121 – Rev1 
6.142.2016.1 

DATE: 25.03.2016 

1. 

BUDGET HEADING: 

05 02 12 02 
05 02 12 04 
TITLE: 
Draft REGULATION OF THE COUNCIL amending Regulation (EU) No 1370/2013 determining 
measures on fixing certain aids and refunds to the common organisation of the markets in agricultural 
products, as regards applicable quantitative limitations for buying-in butter and skimmed milk powder 

APPROPRIATIONS: 
in EUR million 
17,0 
15,0 

LEGAL BASIS: 
Article 43 (3) of the Treaty on the Functioning of the European Union 

AIMS: 
This draft regulation increases the quantitative limitations for buying-in of butter and skimmed milk 
powder at fixed price in the year 2016. 
FINANCIAL IMPLICATIONS 

12 MONTH 
PERIOD 

CURRENT 
FINANCIAL 
YEAR 
2016 
(EUR million) 
- 
- 

FOLLOWING 
FINANCIAL 
YEAR 
2017 
(EUR million) 
- 
- 

2. 

3. 

4. 

5. 

5.0 

CHARGED TO THE EU BUDGET 

EXPENDITURE 
- 
(REFUNDS/INTERVENTIONS) 
- 
- 

NATIONAL AUTHORITIES 
OTHER 

(EUR million) 
-
-

5.1  REVENUE 

OWN RESOURCES OF THE EU  

- 
(LEVIES/CUSTOMS DUTIES) 
NATIONAL 
- 

2018 

2019 

2020 

2021 

5.0.1  ESTIMATED EXPENDITURE 
5.1.1  ESTIMATED REVENUE 
5.2  METHOD OF CALCULATION: 
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? 

YES 

YES 

6.2  WILL A SUPPLEMENTARY BUDGET BE NECESSARY? 
6.3  WILL APPROPRIATIONS NEED TO BE ENTERED IN FUTURE BUDGETS? 
OBSERVATIONS: 
Quantitative limitations for buying-in into public intervention at fixed price are proposed to be increased for 
butter (100 000 tonnes instead of 50 000 tonnes) and skimmed milk powder (218 000 tonnes instead of 109 000 
tonnes). Without this increase, buying-in would have to be carried out by way of a tendering procedure to 
determine the maximum buying-in price. It is however estimated that buying-in prices determined as a result of 
such tendering procedure would be very close to the fixed intervention price, and it is therefore assumed that the 
financial impact of the proposal is negligible, but it would nevertheless preserve confidence in the public 
intervention mechanism under the prevailing severe market situation. Currently, it is not expected that the actual 
intake into intervention will reach these increased ceilings 

NO 

NO 

EN 

7 

   EN