CELEX: 51994PC0472
Language: en
Date: 1994-11-03
Title: Proposal for a COUNCIL REGULATION (EC) amending Regulation (EEC) No 2990/82 on the sale of butter at reduced prices to persons receiving social assistance

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     COMMISSION OF THE EUROPEAN COMMUNITIES
                                                          COM(94) 472 final
                                                          Brussels, 03.11.1994
               REPORT FROM THE COMMISSION TO THE COUNCIL
        concerning application of Council Regulation (EEC) No 2990/82 on the
          sale of butter at reduced prices to persons receiving social assistance
                                       Proposal for a
                              COUNCIL REGULATION (EC)
              amending Regulation (EEC) No 2990/82 on the sale of butter
                  at reduced prices to persons receiving social assistance
                               (presented by the Commission)
 ---pagebreak---                                    -• 1   -
1.   Background
   The market situation for milk in general and for butter in particular has
   in the past required a whole range of disposal measures notably for
   butter in order to increase the internal and external sales and
   consequently diminish the purchases into public intervention storage.
   The scheme allowing for sale of butter to persons receiving social
   assistance has been in operation since 1978 and Article 3a of council
   Regulation   (EEC) No    2990/82,    last modified  by  Regulation  (EEC)
   No 3654/92, requires that the Council, on the basis of a report from the
   Commission before 31.12.1994, decides whether the subsidized sales under
   above mentioned regulation is to be continued. Reports previously
   forwarded to the Council, have on 3 occasions resulted in continuation of
   the scheme for consecutive two year periods ending 31.12.1994. Up until
   now the Regulation has only been applied in Ireland, and.the following
   therefore refers to this Member state.
2.   criteria for the determination of entitlement
   Persons entitled to benefit from the scheme are those in receipt of
   social assistance payements as defined in Part III, Section 118 of the
   Social Consolidation Act 1993. This covers the following schemes operated
   by the Irish Department of Social Welfare and Department for health :
           old Age Pensions
           Unemployment Assistance
           Widows' and Orphans' Pension
           Deserted Wife's Allowance
           Social Assistance Allowance for Unmarried Mothers
           Prisoner's Wife's Allowance
           Carer's Allowance
           Blind Pension
           Social Welfare (Supplementary Welfare) Allowance
           Disabled Persons (Maintainance) Allowances
           Infectious Diseases (Maintenance) Allowance
           Pre-retirement allowances, Carer's allowance, Blind Pension
3.   Procedure for implementation and control of the scheme
  A system of vouchers entitling two pounds of butter per month to be
   purchased at the normal retail price, less the amount of the subsidy, are
   supplied to those persons determined under the criteria set out at point
   2 above. Vouchers are also supplied for each qualified dependent of the
   social assistance recipient. Vouchers are valid for the month they are
   issued and the following two months.
   The system of control involves checks of water marked and security
   printed vouchers, numbers, amounts, quantities and eligibility of the
   numbered vouchers. These checks will, together with declarations from
   the retailers selling the butter and on the spot checks carried out by
   the competent authorities, ensure that the scheme is not abused.
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 4.    Developments in the butter and yellowfat market in Ireland
    In accordance with Article 4(3) of Regulation (EEC) n" 1898/87 the Member
    States shall forward to the commission information concerning the
    developments on the butter and yellow fat market.
   The       information        received       from       the    Irish       authorities     concerning
   developments in market shares of butter, low-fat butter, margarine and
   fat mixtures shows the following development between 1987 and 1993.
    Butter                  Low-fat   butter      Margarine     Pat                Total
                                                               Mixtures
Year   tonnes     (%)       tonnes    (%)    tonnes            tonnes             tonnes
                                                         r%;               r%;
1987  20,500    (42,4%)     2,000   (4,1%)   14,900    (30,8%) 11,000   (22,7%)   48,400
1988  16,325    (33,8%)     2,750   (5,7%)   14,200    (29,4%) 15,000   (31,1%)   48,275
1989  13,235   (27.4%)      1,860   (3,9%)   15,700    (32.5%) 17,500   (36,2%)   48,295
1990  12,000   (25.3%)      1,575   (3,3%)   15,100    (31.8%) 18,825   (39.6%)   4 7,500
1991  11,900   (24.6%)      1,575   (3,3%)   14,600    (30,9%) 19,100   (40.4%)   48,300
1992  11,800   (25.0%)      1,575   (3,3%)   13,900    (29,5%) 19,700   (41.8%)   4 7, 100
1993  11,700   (24.8%)      1,575   (3,3%)   13,700    (29,1%) 20,000   (42.5%)   47, 100
  It is noted that the total yellow fat market between 1987 and 1993 shows a
 decline of 1,9% while the fat mixtures have taken a continuing higher
 market share compared to that of butter. The fat mixtures generally
 contain butter or cream and vegetable fat and have been principally
 marketed on the basis of improved spreadability vis-à-vis butter.                                  The
  introduction of reduced and low-fat butters, which incorporate additional
 milk protein and moisture to reduce the overall fat has also led to a
 reduction of the market share of full fat butter. However, it is noted
 that the important yearly decline in the consumption of full fat butter
 experienced in the 1980*s is less significant since 1990.
5.    Developments       of sales, financial          costs and number of beneficiaries
 Ireland has operated the aid scheme as provided for in the above mentioned
 Regulation since 1978 and the scheme has especially during the last years
 accounted         for important        shares of the declining               internal Irish butter
 consumption.           In 1993 the purchase of around 7.424 tonnes of butter was
 aided under the scheme and the estimated purchases for 1994 are 7.500t.
 In 1993 the purchases amounted to more than 60 % of the total Irish butter
 consumption but accounted for less than 6% of the production and it is
 expected that these percentages remain practically unchanged in 1994. The
 maximum aid reimbursed               by EAGGF amounts at present to 140 ECU/100 kg
 resulting in total estimated cost of 10,4 MECU in 1993 and 10,5 MECU in
 1994        without      taking        the     monetary         adjustment        coefficient     into
 consideration.
 ---pagebreak---                                   - 3 -
  The development in purchases, financial EAGGF       costs  and number  of
  beneficiaries since 1978 is indicated below :
               Purchases       Financial Costs     Beneficiaries
               (in tonnes)      (MECU)
   1978            66                0.05          n.a.
   1979        3.704                 2.96          n.a.
   1980        3.958                 3.17          419.000
   1981        3.825                 3.06          431.000
   1982        4.080                 3.26          543.000
   1983        4.892                 3.91          569.000
   1984        4. 122                3.30          617.000
   1985        5.785                 4.63          650.000
   1986        5.189                 4.15          642.000
   1987        5.651                10.06          720.000
   1988        6.178                11.00          720.000
   1989        6.567                 9.85          720.000
   1990        6.182                 8.40          720.000
   1991        6.260                 9.39          740.000
   1992        7.331                11.00          776.000
   1993*       7.424                10.36          834.000
   1994*       7.500                10.50          800.000
   * = Provisional
6. conclusions and recommendations
 The application of Council Regulation (EEC) No 2990/82 in Ireland has
 continued to be a successful means in maintaining sales to the social
 assistance categories indicated under point 2 (who in the normal course of
 events would for economic reasons be in the forefront of change to cheaper
 substitutes) .
 A reduction in consumption by these categories of consumers could result
 in sales of butter into intervention. Furthermore, a withdrawel of this
 long standing benefit from the less well off sectors of society e.g.
 unemployed persons, old age pensioners, etc. could hardly be defended from
 a social, market or economic point of view, as well as the favourable
 public perception of a Community scheme promoting butter sales should not
 be neglected.
 The commission therefore proposes a continuation of the scheme for an
 additional two years ending 31 December 1996. Taking account, however, of
 the policies which the Council has been following with regard to the
 intervention price for butter which result in reduction in market prices,
 it is proposed to reduce the aid level by 25 ECU/100kg to 115 ECU/100kg as
 from 1.1.1995.
 ---pagebreak---                                       H
                                 Proposal for a
                       COtraCn* REGULATION t EC)
          amending Regulation (EEC) Bo 2990/82 on the sale of butter
           at reduced prices to persons receiving social assistance
THE COUNCIL OF THE EUROPEAN UNION,
Having regard to the Treaty establishing the European Community,
Having regard to Council Regulation (EEC) No 804/68 of 27 June 1968 on the
common organization of the market in milk and milk products^*), as last
amended by Regulation (EEC) No 1880/94<2), and in particular Article 12(2)
thereof,
Having regard to the proposal from the Commission,
Whereas   Council   Regulation   (EEC)   No 2990/82( 3 ), as  last   amended  by
Regulation    (EEC)  No 3654/92<4),    introduces  arrangements,    expiring  on
31 December   1994, for the sale of butter at reduced        prices   to persons
receiving social assistance; whereas, as provided for in Article 3a(3) of
that Regulation, the council is to examine before that date and on the basis
of a report from the Commission the possibility of renewing the arrangements
laid down; whereas, as a result of the report submitted by the Commission
and the results obtained, the abovementioned arrangements should be extended
for a period of two years; whereas, in view on the one hand of experience
gained and on the other hand of the situation on the market for butter, the
aid should be reduced,
HAS ADOPTED THIS REGULATION:
(1) OJ No L  148, 28.6.1968, p. 13.
(2) OJ No L  197, 30.7.1994, p. 21.
(3) OJ No L 314,  10.11.1982, p. 26.
(4) OJ No L 370,  19.12.1992, p. 1.
 ---pagebreak---                                     5
                                  Article 1
Regulation (EËC) No 2990/82 is hereby amended as follows:
1.  In Article 1, "31 December 1994" is replaced by "31 December 1996".
2.  In Article 3, "140 ECU" is replaced by "ECU 115".
3.  In Article 3a(3), "31 December 1994" is replaced by "31 December 1996".
                                  Article 2
This Regulation   shall enter  into force on the third day     following its
publication in the official Journal of the European Communities.
This Regulation shall be binding in its entirety and directly applicable in
all Member States.
Done at Brussels,                                For the Council
                                    - 2 -
 ---pagebreak---          FINANCIAL                        STATEMENT
 1. BUDGET HEADING: Chapter Bl-2049                                               APPROPRIATIONS: ECU 15 million
                                                                                                   (199S APB)
2. TITLE: Proposal for a Council Regulation amending Regulation     (EEC) No 2990/82 on the sale of butter at
           reduced prices to persons receiving social assistance
3. LEGAL BASIS: Article 12(2) of Regulation     (EEC) No 804/68
4. AIMS OF PROJECT:
    To extend the arrangements for selling butter at reduced prices to persons receiving social assistance, at
    a reduced rate of aid
5. FINANCIAL  IMPLICATIONS                    PERIOD OF 12 MONTHS        CURRENT  FINANCIAL      FOLLOWING  FINANCIAL
                                                                                YEAR                     YEAR
                                                                               (1994)                   (1995)
S.O. EXPENDITURE
      - CHARGED TO THE EC BUDGET
        (REFUNDS/INTERVENTIONS)                +ECU 13.9 million                                   +ECU 8.7 million
                                                   1996              1997                  1998
S.0.1. ESTIMATED  EXPENDITURE               +ECU 13.9 million   +ECU 5.2 million
5.2. METHOD OF CALCULATION:
      12 months: 10 000 t x ECU 1150/t x 1.207    (DT)          = + ECU 13.9 million   (B)
      1995     : 10 000 t x ECU 1150/t x 7.5/12 X 1.207    (DT) = + ECU 8.7 million   (3)
6.0. CAN THE PROJECT BE FINANCED FROM APPROPRIATIONS ENTERED IN THE RELEVANT CHAPTER OF THE CURRENT BUDGET?
                                                                                                                 YES
6.1. CAN THE PROJECT BE FINANCED BY TRANSFER BETWEEN CHAPTERS OF THE CURRENT BUDGET?
6.2. IS A SUPPLEMENTARY   BUDGET NECESSARY?
6.3. WILL FUTURE BUDGET APPROPRIATIONS BE NECESSARY?
COMMENTS:
The 1995 preliminary draft Budget was established on the assumption that the arrangements would be extended
beyond 31 December  1994 for 10 000 tonnes at a reduced rate of aid to take account of the reduction      in the
intervention price for butter in 1994.
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                                                              COM(94) 472 final
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