CELEX: 51988PC0125
Language: en
Date: 1988-03-04
Title: Proposals for Council Regulations amending the common organization of the market in wine (Action taken pursuant to the European Council in Brussels) (presented by the Commission)

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COM (88) 125
Vol. 1988/0038
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 ---pagebreak--- COMMISSION OF THE EUROPEAN COMMUNITIES
                                                   COM(88 ) 125 final
                                                  Brussels , 9 March 1988
                  Proposais for Council Régulations
                               amending
           the common organization of the market in wine
   ( Action taken pursuant to the European Council in Brussels )
                    (presented by the Commission )
 ---pagebreak---                              EXPLANATORY MEMORANDUM
1. There are surpluses in the table wine sector , owing to two basic causes ,
   which have taken effect in succession . Initially ( approximately until the
   end of the 1970’s ), with consumption practically stable production
   increased substantially and affected the precarious balance existing when
   the market organization was set up . That rising trend slowed down and has
   practically disappeared , and the main reason for imbalance now lies in the
   fall in consumption and in other uses , including exports to non-member
   countries . This phenomenon seems likely to continue as on the one hand
   consumers are preferring quality to quantity and on the other hand
   forseeable demand from non-member countries for table wine is not very
   encouraging .
   This situation requires the -scale of vine-growing potential to be
   redefined to adapt it to requirements . A structural production surplus in
   table wine of around 30% may be estimated to exist nowadays . That surplus
   must increase unless there is a change in market management or control of
   production potential . The latter aspect in particular is worrying as high
   yields are basically responsible for structural surpluses and production
   of mediocre quality .
   The Commission therefore considers that remedies must be found for this
   situation , which is becoming intolerable not only on account of the
   increasing budgetary burden of the sector but also for a reason which is
   more specific to the wine sector ; the very considerable weakening of
   prices due to the surplus is extremely damaging , particularly for
   producers of better class wine , production of which should be encouraged .
   The search for balance is based on structural measures to reduce
   vine-growing potential by reducing areas under vines and by limiting
   yields , which producers will be induced to achieve if compulsory
   distillation has the hoped-for dissuasive effects .
2. The Commission considers that the " legitimate " rights of producers should
   not be affected ; it must therefore maintain present support for a quantity
   not exceeding short-term variations in production . That quantity may
   reasonably be assessed at 10% of normal consumption , and the price paid
   for that quantity would be kept at the present level , i.e. 50% of the
   guide price . However , for that part of the surplus which is structural in
   nature ( in excess of the above 10% ), a rigorous , dissuasive policy must be
   applied , failing which the trend in surpluses will continue and may even
   rise . The Commission therefore proposes that the price to be paid to
                                                                               2
 ---pagebreak---                                       - 2 -
   producers should be substantially reduced during wine years when the
   abovementioned threshold is exceeded . That reduction would be progressive
   in order to enable vine-growers to adapt to the new situation in full
   knowledge of the facts .
   In practice , the price paid from the 1990 / 91 wine year will be given by
   the weighting between 50% of the guide price applied to the corresponding
   quantity at 10% of normal consumption and the level applied to the
   quantity exceeding that quantity . That price will therefore be closely
   dependent on the total quantity to be distilled , though it will fall in
   the case of very substantial quantities . However , it will not fall below
   a certain threshold , as a result of the quantity to be paid for at 50% in
   any case .
   For the producer the actual price will also depend on preventive
   distillation and the percentage which the quantity of the latter
   represents compared with his overall obligation to distill . For an
   individual obligation not exceeding the quantity eligible for preventive
   distillation , the price for production will coincide with that for such
   distillation while for producers who are subject , as a result of excessive
   yields , to the maximum of the obligation , the impact of preventive
   distillation will be small and the price paid will therefore approach the
   lowest level .
3. Sound conditions on the market , which must be achieved speedily but must
   be longlasting , may only be restored by combining measures to discourage
   high yields and those of a structural nature . The Commission considers
   that the discouragement of high yields must inevitably go hand- in-hand
   with a decrease in areas under vines . Council decisions have not brought
   such measures into effect as yet . Under these conditions the Commission
   proposes to achieve the objective sought after by stepping up and adapting
   voluntary abandonment measures at present in force , which have not given
   the hoped-for results .
   The voluntary nature of this measure will enable producers themselves to
   decide on the position they intend occupying in the future in the wine
   sector in view also of their family situations . That decision will have
   to be taken having regard to the prospects of profitability provided by
   the new Community rules , a feature of which should be a non-artificial
   balance on the market .
   To that end the Commission proposes making abandonment more attractive by :
   - extending the possibility of abandonment in return for a premium to all
      areas under vines ;
 ---pagebreak---                                         - 3 -
   - granting producers who have grubbed their vines an advantage at market
      management level . This link between structural and management measures
      consists of total or partial exemption from compulsory distillation ;
   - raising the abandonment premium . The Commission proposes increasing
      premiums by 20% for the Community of Ten .
      For Spain it proposes fixing premiums progressively at the same level
      as for the Ten ;
   - doing away with the limit on the right to replant in respect of the
      areas under vines remaining on the holding after abandonment ;
   - making it possible for producers to receive an advance on the premium
      against a security .
   Since the abandonment of areas under vines must not create a risk of
   surpluses in other areas of agriculture , the Commission proposes that the
   land thus released must be used for non-agricultural or agricultural
   purposes not presenting any danger for market balance , such afforestation ,
   green fallow and , where appropriate , other non-surplus agricultural
   activities and crops adapted to the regions concerned and authorized by
   the Commission .
   The abandonment of an area under vines with an overall potential equal to
   the structural surplus would permit considerable annual savings in the
   longer term . In view of this and in order to reduce the cost to producer
   Member States of lowering production potential , the Commission proposes
   that the Community bear the cost of increasing the amounts of the premium
   by means of a 70% EAGGF contribution .
   So as not to complicate matters , the Commission proposes that , instead of
   being amended , Regulation ( EEC ) No 777 / 85 be replaced by a new Regulation
   incorporating all its essential administrative provisions .
4. Taken together the aim of these measures is to maintain a healthy
   vine-growing industry in the Community . When , as it must , balance is
   eventually restored on the market , the latter will support all quality
   production at a remunerative level .
                                                                                  H.
 ---pagebreak--- I. PROPOSAL FOR A COUNCIL REGULATION AMENDING REGULATION ( EEC ) No 822 /87 ON
   THE COMMON ORGANIZATION OF THE MARKET IN WINE
 ---pagebreak---                                        Proposal for a
                                 COUNCIL REGULATION ( EEC )
                           amending Regulation ( EEC ) No 822 / 87
                    on the common organization of the market in wine
THE COUNCIL OF THE EUROPEAN COMMUNITIES ,
Having regard to the Treaty establishing the European Economic Community , and
in particular Article 43 thereof ,
Having regard to the Act of Accession of Spain and Portugal , and in particular
Article 89(2 ) thereof ,
Having regard to the proposal from the Commission ,
Having regard to the opinion of the European Parliament ,
Having regard to the opinion of the Economic and Social Committee ,
Whereas Article 39 of Council Regulation ( EEC ) No 822 / 87 of 16 March 1987 on
the common organization of the market in wine ( 1 ), as last amended by
Regulation ( EEC ) No 3992 / 87 ( 2 ), provides for compulsory distillation to
establish balance on the table wine market ;
Whereas the price applicable at present to table wine delivered for compulsory
distillation is 50% of the guide price up to a volume of 12.5 million hi and
40% for further quantities ;
Whereas the degree of support thus granted does not sufficiently discourage
the production of wine not suiting market requirements and consequently
hinders disposal of the major structural surplus in the sector ; whereas
therefore that degree of support should be reduced ;
 ( 1 ) OJ L 84 , 27 . 3.1987 , p. 1 .
 ( 2 ) OJ L 377 , 31.12.1987 , p. 20 .
                                                                                 C .
 ---pagebreak---                                             - 2 -
Whereas to that end it should be laid down that , progressively by the
beginning of the 1990 / 91 wine year , the price should be fixed , using for
quantities of table wine exceeding 10% of normal utilization , a progressively
lower percentage of the guide price ;
Whereas the arrangements provided for in this Regulation amend the Community
rules in force and accordingly require the rules in Article 122(2 ) of the Act
of Accession to be amended ; whereas it should be provided that the Commission
fix for Spain a rate of progressive alignment on the ratio existing between
the guide prices and those to be fixed for compulsory distillation for the
1988 /89 and 1989 / 90 wine years for the Community of Ten ;
Whereas , in order to preserve the necessary balance between prices under the
various compulsory distillation schemes , the price for the distillation of the
by-products of wine-making should also be progressively reduced , as should
that for the distillation of wines referred to in Article 36 of Regulation
( EEC ) No 822/87 ,
HAS ADOPTED THIS REGULATION :
                                          Article 1
                                          -                        «
Regulation ( EEC ) No 822 / 87 is hereby amended as follows :
1 . Iw Article 35 :
    - the following paragraph 5a is added :
       "5a . From 1990 / 91 the buying-in price of grape marc , wine lees and any
             wine delivered for distillation shall be 20% of the guide price for
             table wine of type A I for the marketing year concerned .
             For 1988 /89 and 1989 / 90 the buying-in price shall be fixed , in
             accordance with the procedure provided for in Article 83 , in such a
             way as to ensure a smooth transition between the percentage of the
             guide price applying for 1987 /88 and the percentage applying from
             1990 / 91 ."
    - the second indent of paragraph 7 is deleted .
 ---pagebreak--- 2 . The first subparagraph of Article 36(3 ) is replaced by the following :
    " 3 . The buying-in price for wine delivered for distillation under
          paragraphs 1 and 2 shall be :
          - for 1987 / 88 , 50%
          - for 1990 / 91 , 25%
          of the guide price for table wine of type A I fixed for the wine year
          concerned .
          For 1988 / 89 and 1989 / 90 the buying-in price shall be fixed , in
          accordance with the procedure provided for in Article 83 , in such a way
          as to ensure a smooth transition between the percentages referred to
          above . "
3 . In Article 39 :
    -     the third subparagraph of paragraph 4 is replaced by the following :
          " That percentage shall be obtained from a progressive scale based on
             the yield per hectare , may vary between regions according to yields
             obtained in the past .
             It may be nil for yields which do not exceed , for the wine year in
             question , 70% of the average yield of table wine for the region .
             It may also be nil for producers whose yields per hectare are less
             than a level to be determined .
             It may exceed 80% only for yields which , for the wine year concerned ,
             are more than 200% of the average yield of table wine for the region ."
    -     Paragraph 6 is replaced by the following :
        "6 . From 1990 / 91 the purchase price for table wines delivered for
              compulsory distillation shall be fixed according to the quantities
             to be   distilled and :
             – where the total quantity for distillation does not exceed 10% of
               normal utilization for the wine year concerned as determined in the
               forward estimate referred to in Article 31 , it shall be equal to
               50% of the guide price fixed for the wine year in question , for
               each of the types of table wine ,
 ---pagebreak---                                          - и -
         - where the total quantity for distillation is more than 10% of
           normal utilization as referred to in the first indent , it shall be
           equal to the percentage of the guide price of each of the types of
           table wine fixed for the wine year in question , given by the
           weighted average of the percentage referred to in the first indent
           applied to the quantity corresponding to 10% of normal utilization
           and zero for quantities exceeding that volume .
         For the 1988 /89 and 1989 / 99 wine years
         - the 50% of the guide price shall apply to the quantity referred to
           in the first subparagraph ;
         - where the total quantity to be distilled is more than that referred
           to above , the percentage of the guide price to be used for
           determining the purchase price shall be fixed in accordance with
           the procedure laid down in Article 83 , in such a way as to ensure a
           smooth transition between the percentages of the guide price
           applying for the 1987 /88 and 1990 / 91 wine years respectively ."
         The purchase price to be paid by distillers to producers for
         quantities delivered for compulsory distillation in excess of those
         delivered for preventive distillation may not be less than the price
         provided for in the preceding subparagraphs . It shall also apply to
         wine in a close economic relationship with each type of table wine .
                                       Article 2
By way of derogation from Article 122(2 ) of the Act of Accession , the purchase
price for the 1988 /89 and 1989 / 90 wine years shall be fixed for Spain , in
accordance with the procedure laid down in Article 83 , in line with a rate of
progressive alignment on the purchase price fixed pursuant to Article 1(2 ).
                                       Article 3
This Regulation shall enter into force on 1 September 1988 .
This Regulation shall be binding in its entirety and directly applicable in
all Member States .
Done at Brussels ,                                      For
                                                        For the
                                                            the Council
                                                                Council
 ---pagebreak---                            II .
           PROPOSAL FOR A COUNCIL REGULATION
ON THE GRANTING , FOR THE 1988 /89 TO 1995 / 96 WINE YEARS ,
           OF PERMANENT ABANDONMENT PREMIUMS
            IN RESPECT OF AREAS UNDER VINES
                                                             (£>.
 ---pagebreak---                                        Proposai for a
                             COUNCIL REGULATION ( EEC ) No    /
                                          of
               on the granting , for the 1988 / 89 to 1995 / 96 wine years ,
          of permanent abandonment premiums in respect of areas under vines
THE COUNCIL OF THE EUROPEAN COMMUNITIES ,
Having regard to the Treaty establishing the European Economic Community , and
in particular Articles 42 and 43 thereof ,
Having regard to the proposal from the Commission ( 1 ),
Having regard to the opinion of the European Parliament ( 2 ),
Having regard to the opinion of the Economic and Social Committee ( 3 ),
Whereas the steadily increasing imbalance on the market in wine is such that
action must be taken on a scale and of an effectiveness to bring production ,
in the medium term , definitively back to the level of demand ;
Whereas experience gained in the reduction of vine-growing potential , in
particular under Council Regulation ( EEC ) No 777 / 85 of 26 March 1985 on the
granting , for the 1985 / 86 to 1989 / 90 wine years , of permanent abandonment
premiums in respect of certain areas under vines ( 4 ), as amended by Regulation
( EEC ) No 3775 / 85 ( 5 ), shows that the effort made must be stepped up ; whereas ,
in particular , the facility for abandonment of vine-growing areas must be
extended without delay to all classes of areas under vines ;
(1)
(2)
(3)
( 4 ) 0J No L 88 , 28.3.1985 , p . 8 .
( 5 ) 0J No L 362 , 31.12.1985 , p . 39 .
                                                                                      Il
 ---pagebreak---                                             - 2 -
Whereas an incentive should be given to the abandonment of vine-growing areas
through the grant , during the next eight wine years , of premiums in amounts to
be varied on the basis of the productivity of the areas concerned , covering
the cost of the grubbing-up operations , the loss of replanting rights and the
loss of future income ;
Whereas , in the cases of producers who definitively abandon farming , the
measure may be made more attractive if provision is made to replace the single
premium scheme by a system of annual premiums ;
Whereas a reduction in the number of vine-growing holdings will enable the
dispersion of supply on the market to be limited and market management to be
simplified ; whereas there should therefore be a futher incentive for
vine-growers abandoning the whole of their holdings ;
Whereas , to enable the payment of abandonment premiums to be properly
administered , deadlines should be set for the submission of applications and
conditions to be complied with by the applicant should also be laid down ;
Whereas the abandonment of vineyards by growers who are members of cooperative
organizations jointly processing grapes harvested by their members may reduce
the quantities of grapes delivered and thereby increase processing costs ;
whereas such negative effects should be compensated ; whereas , bearing in mind
the differences which exist in vine-growing structures within the Community ,
any compensation scheme should be adopted by the Member State ;
Whereas , as a matter of fairness , growers implementing this scheme and thus
contributing to the effort to restore lasting sound conditions on the market
should enjoy a reduction in , ranging as far as exemption from , their
contribution to the scheme for compulsory distillation of table wines referred
to in Article 39 of Council Regulation ( EEC ) No 822 / 87 , as last amended by
Regulation ( EEC ) No 3992 / 87 ( 6 ); whereas a reasonable arrangement would be for
( 6 ) OJ No L 84 , 27.3.1987 , p. 1 .
                                                                                     II .
 ---pagebreak--- this reduction to be proportionate to the area grubbed up , and it would also
seem reasonable to require , for the grant of such benefit , that the reduction
in the relevant producer 's vine-growing potential should represent at least
100 hi ;
Whereas the utilization of areas released following the abandonment of
vine-growing should be limited in order to avoid disturbance of the market for
other agricultural products ;
Whereas the permanent abandonment premium serves the interests of the
Community and is designed to achieve the objectives laid down in
Article 39(l)(a ) of the Treaty ;
Whereas , in order to ensure maximum effectiveness for the proposed measure , it
is necessary to fix time-limits for the payment of premiums to the recipients ,
and to provide for the possibility of advances being paid against a security
and for payment by the European Agricultural Guidance and Guarantee Fund
( EAGGF ) to Member States of advances corresponding to the Community
contribution , while ensuring that the payment of premiums and the final EAGGF
contribution are subject to grubbing up being carried out under the conditions
laid down ,
HAS ADOPTED THIS REGULATION :
                                        Article 1
1.   Vine-growers cultivating areas under vines :
     ( a ) for the production of :
           - wine ,
           - table grapes ,
           - grapes for drying ,
          or
     ( b ) used as root-stock nurseries planted with root-stock varieties listed
           in the classification of vine varieties ,
     shall , during the 1988 / 89 to 1995 / 96 wine years , on application and as
     provided for in this Regulation for the permanent abandonment of
     vine-growing , qualify for ,
     -    a permanent abandonment premium ,
     -    preferential arrangements as regards distillation .
 ---pagebreak---                                              4
2.  The grant of the permanent abandonment premiums shall entail for the
    grower forfeiture of replanting rights in respect of the area for which
    the premium is granted .
    That same area may only be afforested or used for non-agr icul tural
    purposes .
    The Member States shall take all appropriate action to ensure that the
    land is kept in good heart . They shall lay down provisions needed for
    land management with a view to protecting the environment and natural
    resources .
b,  The Member States may authorize , in respect of some or all of their
    territory , use of farm land set aside :
    ( a ) for grazing , provided :
          - that a maximum stocking density per hectare of grazing land , to be
            determined , is complied with ;
          - that fodder produced on the holding is not marketed ;
    ( b ) for the production of lentils , chick peas and vetch .
    The Member States' authorization provided for in the preceding
    subparagraph is restricted to three years from ...*.       Before expiry of
    this deadline , the Commission shall lay before the Council a report on the
    application of the authorization .
    In addition , at the request of the Member State concerned , the Commission
    may , in accordance with the procedure laid down in Article 83 of
    Regulation ( EEC ) No 822 / 87 , permit them to authorize in demarcated areas
    the use of land released for the production of agricultural products
    particularly suited to the conditions of the said areas for which there is
    no risk of structural overproduction in the Community .
                                         Article 2
1.  The amount of the premium per hectare is hereby fixed as follows :
* Date of entry into force of the Regulation .
 ---pagebreak---                                      - 5 -
(a ) for areas of not less than 10 ares but no more than 25 ares planted
      with wine-grape varieties and constituting the entire vineyard area of
      the holding concerned : 3 600 ECU ;
(b ) for areas of more than 25 ares planted with wine-grape varieties :
      - 1 200 ECU if the average yield per hectare of the said areas is not
        more than 20 hi ,
      - 4 200 ECU if the average yield per hectare of the said area is more
        than 20 hi but not more than 50 hi ,
      - 6 000 ECU if the average yield per hectare of the said areas is more
        than 50 hi but not more than 90 hi ,
      - 7 800 ECU if the yield per hectare of the said areas is more than
        90 hi but not more than 130 hi ,
      - 9 600 ECU if the yield per hectare of the said areas is more than
        130 hi but not more than 160 hi ,
      - 10 200 ECU if the yield per hectare of the said areas is more than
        160 hi ;
( c ) for areas planted with varieties classified in the administrative unit
      concerned either as table grapes or as both table and wine grapes :
      - 10 800 ECU in the case of large-grape varieties , trained by the
        pergola method , contained in a list to be drawn up ,
      - 8 400 ECU in the case of varieties other than those referred to in
        the first indent trained by the pergola method ,
      - 7 200 ECU in the case of the varieties referred to in the first
        indent trained by a method other than the pergola method ,
      - 6 000 ECU in the case of varieties other than those referred to in
        the first indent trained by a method other than the pergola method ;
( d ) for areas for the production of wine for making wine spirits of
      designated origin in the Charentes region : 7 200 ECU ;
( e ) for areas planted with varieties classified in the administrative unit
      concerned as dried-grape varieties or as both dried-grape and other
      varieties : 7 200 ECU ;
                                                                             IS­
 ---pagebreak---       ( f ) for areas used as root-stock nurseries : 6 000 ECU .
2.    The amounts specified in paragraph 1 , with the exception of the amount
      referred to in paragraph 1(a ), shall be increased by 600 ECU per hectare
      if the areas concerned constitute the entire vineyard area cultivated by
      the applicant .
3.    The yield per hectare of the grubbed-up area referred to in paragraph 1(b )
      shall be calculated on the basis of the average yield declared for the
      recipient 's holding and an on-the-spot assessment , carried out by the
      competent body of the Member State concerned prior to grubbing-up , of the
      productive capacity of the wine-growing area to be grubbed up .
4.    As regards Spain , the premiums provided for in paragraph 1 and the amounts
      referred to in paragraph 2 shall be fixed in accordance with the procedure
      laid down in Article 83 of Regulation ( EEC ) No 822 / 87 so that the
      difference between the amounts referred to in Article 2(la ) of Regulation
      ( EEC ) No 777 / 85 and those in paragraphs 1 and 2 is reduced successively by
      one third in the 1988 / 89 and 1989 / 90 wine years , the Community level
      applying in that Member State from the 1990 / 91 wine year .
      As regards Portugal , the premiums provided for in paragraphs 1 and 2 shall
      apply from the beginning of the second stage .
                                          Article 3
The following shall not qualify for the permanent abandonment premium :
( a ) areas under vines located on holding which total 25 ares or less , with the
      exception of holdings of not less than 10 ares where the areas constitute
      the entire vineyard area of the holding concerned ,
( b ) areas under vines in respect of which infringements of Community or
      national provisions regarding planting have been ascertained since 1976 ,
( c ) areas under vines which are no longer tended ,
( d ) areas on which vines were planted after the entry into force of this
      Regulation .
 ---pagebreak---                                        - 7 -
                                     Artide 4
1. Applications for premiums must be submitted to the departments appointed
   by the Member States before 31 December of each wine year .
   Applications relating to areas under wine grapes shall be accompanied by
   an official declaration stating the yield per hectare calculated in
   accordance with Article 2(3 ).
2. The grant of the premium shall be subject to a written declaration in
   which the applicant undertakes to grub up the vines on the areas in
   respect of which the premium has been applied for or to have them grubbed
   up by 15 May of the year following that in which the application is
   submitted .
3. The premium shall be granted only if the applicant :
   -   has , in accordance with national laws and on submission of his
       application , the right to continue cultivation of the relevant land for
       a period of 15 years ,
   -   produces , where he does not meet the condition specified in the first
       indent , a written undertaking from the owner of the land that he will
       guarantee that the obligations referred to in paragraph 2 are complied
       with or that he will himself comply with them .
   If , after the grant of the premium and in the course of the period
   referred to in the first indent of the first subparagraph , all or part of
   the holding passes to another party , the recipient of the premium or his
   assignees shall remain responsible for the performance by the successor of
   the undertaking entered into by the recipient of the premium or his
   assignees shall remain responsible for the performance by the successor of
   the undertaking entered into by the recipient , unless :
   -   the successor enters into such an undertaking on his own account for
       the remainder of the period ,
       or
   -   the owner has given the undertaking provided for in the second indent
       of the first subparagraph .
 ---pagebreak---                                       - 8 -
4. The Member States may bring forward the dates referred to in the first
   subparagraph of paragraph 1 and the first indent of paragraph 2 .
                                    Article 5
1. For the grant of the permanent abandonment premium , mixed cultivation
   areas shall be expressed as specialized cultivation areas on the basis of
   the conversion factor usually used for the vine-growing area concerned .
2. The amount of the permanent abandonment premium shall be paid no later
   than the end of the calendar year following that in which the application
   for the premium was submitted , provided the application has furnished
   proof that grubbing up has in fact taken place .   At his request , the
   premium shall be paid in advance to the producer , provided the latter has
   put up a security to be determined .
                                    Article 6
1. The Member States may provide that , for vine-growers who are members of a
   wine cooperative or other association of vine-growers , the premiums
   provided for in Article 2(1 ) shall be reduced by up to 15% .   In such case ,
   the sums corresponding to this reduction shall be paid to the cooperatives
   or associations in question .
2. Without prejudice to paragraph 1 , Member States may provide for measures
   comprising national compensation for wine cooperatives and other
   associations of vine-growers who furnish proof that :
   - they have had to reduce their activity as a result of the lower level
      of deliveries from their members following the grant of the permanent
      abandonment premium ,
   - the area cultivated by their members has been reduced by at least 10%
      compared with that cultivated during the 1987 / 88 wine year .
   The amount of the national compensation may not exceed the losses due to
   the reduction in activity .
3. Member States shall inform the Commission of any provisions they may adopt
   pursuant to this Article .
 ---pagebreak---                                          Article 7
The Council , acting by a qualified majority on a proposal from the Commission ,
may alter the amount of the premium .
                                         Article 8
1.  Producers entitled to the premium as a result of permanently abandoning an
    area for the production of table wine shall also qualify , at their
    request , for exemption from the obligation provided for in Article 39 of
    Regulation ( EEC ) No 822 / 87 , which shall be
    - total , where the holding has undergone a reduction in table wine
       production potential of more the 50% ;
    - 20% where the reduction in potential is between 20 and 35% ;
    - 50% , where the reduction in potential is more than 35 and less than 50% ,
    provided always that the reduction in potential is at least 100 hi .
    The exemption provided for in the preceding subparagraph shall not apply
    to the quantity resulting from an increase , after the abandonment premium
    is granted , in vine-growing potential due to an increase in yield and / or
    the area under vines .
2.  The percentage reduction in table wine production potential shall be equal
    to the ratio between the quantity obtained by multiplying the yield
    determined in accordance with Article 2(3 ) by the area abandoned and
    average table wine production declared for the holding during the three
    wine years preceding grubbing up .
                                         Article 9
If the grower qualifies for the annual allowance referred to in the first
indent of Article 3(1 ) of Council Regulation ( EEC ) No    / establishing a
Community scheme to encourage the cessation of farming , the permanent
abandonment premium referred to in Article 1 of this Regulation may be
granted , at the request of the party concerned , in the form of an annual
premium of an eligible maximum amount not exceeding 1 350 ECU / ha . This
premium shall exclude , in respect of areas under vines , the supplementary
premium per hectare referred to in the second indent of Article 3(1 ) of
Council Regulation ( EEC ) No .
 ---pagebreak---                                       - 8 -
A. The Member States may bring forward the dates referred to in the first
   subparagraph of paragraph 1 and the first indent of paragraph 2 .
                                    Article 5
1. For the grant of the permanent abandonment premium , mixed cultivation
   areas shall be expressed as specialized cultivation areas on the basis of
   the conversion factor usually used for the vine-growing area concerned .
2. The amount of the permanent abandonment premium shall be paid no later
   than the end of the calendar year following that in which the application
   for the premium was submitted , provided the application has furnished
   proof that grubbing up has in fact taken place . At his request , the
   premium shall be paid in advance to the producer , provided the latter has
   put up a security to be determined .
                                    Article 6
1. The Member States may provide that , for vine-growers who are members of a
   wine cooperative or other association of vine-growers , the premiums
   provided for in Article 2(1 ) shall be reduced by up to 15% . In such case ,
   the sums corresponding to this reduction shall be paid to the cooperatives
   or associations in question .
2. Without prejudice to paragraph 1 , Member States may provide for measures
   comprising national compensation for wine cooperatives and other
   associations of vine-growers who furnish proof that :
   - they have had to reduce their activity as a result of the lower level
      of deliveries from their members following the grant of the permanent
      abandonment premium ,
   – the area cultivated by their members has been reduced by at least 10%
      compared with that cultivated during the 1987/88 wine year .
   The amount of the national compensation may not exceed the losses due to
   the reduction in activity .
3. Member States shall inform the Commission of any provisions they may adopt
   pursuant to this Article .
 ---pagebreak---                                            - 9 -
                                         Article 7
The Council , acting by a qualified majority on a proposal from the Commission ,
may alter the amount of the premium .
                                         Article 8
1.  Producers entitled to the premium as a result of permanently abandoning an
    area for the production of table wine shall also qualify , at their
    request , for exemption from the obligation provided for in Article 39 of
    Regulation ( EEC ) No 822 / 87 , which shall be
    - total , where the holding has undergone a reduction in table wine
       production potential of more the 50% ;
    - 20% where the reduction in potential is between 20 and 35% ;
    - 50% , where the reduction in potential is more than 35 and less than 50% ,
    provided always that the reduction in potential is at least 100 hi .
    The exemption provided for in the preceding subparagraph shall not apply
    to the quantity resulting from an increase , after the abandonment premium
    is granted , in vine-growing potential due to an increase in yield and / or
    the area under vines .
2.  The percentage reduction in table wine production potential shall be equal
    to the ratio between the quantity obtained by multiplying the yield
    determined in accordance with Article 2(3 ) by the area abandoned and
    average table wine production declared for the holding during the three
    wine years preceding grubbing up .
                                         Article 9
If the grower qualifies for the annual allowance referred to in the first
indent of Article 3(1 ) of Council Regulation ( EEC ) No    / establishing a
Community scheme to encourage the cessation of farming , the permanent
abandonment premium referred to in Article 1 of this Regulation may be
granted , at the request of the party concerned , in the form of an annual
premium of an eligible maximum amount not exceeding 1 350 ECU/ha . This
premium shall exclude , in respect of areas under vines , the supplementary
premium per hectare referred to in the second indent of Article 3(1 ) of
Council Regulation ( EEC ) No .
 ---pagebreak---                                         - 12 -
3.  The financial consequences of failure to recover amounts paid out shall be
    borne by the Community in proportion to Community financing .
4.  Detailed rules for the application of this Article shall be adopted in
    accordance with the procedure laid down in Article 13 of Regulation ( EEC )
    No 729 / 70 .
                                      Article 16
The Member States shall inform the Commission , as part of the communication
referred to in Article 9(1 ) of Regulation ( EEC ) No 822/87 , during the
marketing years referred to in Article 1(1 ), of the areas under vines which
have been permanently abandoned in return for the corresponding premium . The
Commission shall take account of this information in the report referred to in
Article 9(2 ) of Regulation ( EEC ) No 822 /87 .
                                      Article 17
This Regulation shall not impede the granting of aid provided for by national
rules designed to achieve objectives similar to those sought by this
Regulation . The grant of such aid , with the exception of the compensation
provided for in Article 6 , shall be subject to review on the basis of
Articles 92 , 93 and 94 of the Treaty .
                                      Article 18
Subject to special provisions , detailed rules for the application of this
Regulation shall be adopted in accordance with the procedure laid down in
Article 83 of Regulation ( EEC ) No 822/87 .
                                      Article 19
The wine year 1989 / 90 referred to in the title , the first subparagraph of
Article 1(1 ) and Article 9(2 ) of Regulation ( EEC ) No 777 /85 is hereby replaced
by that of 1987/88 .
                                                                                    21 .
 ---pagebreak---                                      - 13 -
                                   Artide 20
This Regulation shall not apply to Portugal .
                                   Article 21
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
 ---pagebreak---                       NLHfc NNHWUtRfc                                                            :   01.03.1968
                                                                                                   1.379 Mi o ECU
  1.   HOME 9v:c£ **:«:                      Chapitre 16                                 CREDITS ;
                                                                                                   ( lettre rectif . n° 2 )
              •     ■               –                 ■-           -    -          –
  Z.   INTITULE DE .R MEStîE Règlements du Conseil relatif à l' octroi pour les campagnes
      1988 / 89 a 1995 / 96 des primes d' abandon definitif de certaines superficies plantée'
     en vigne , et modifiant le R. 822 / 87 portant OCM viti-vinicole .
 j . e.'.f ju» rri -.L- t :              Art . 42 et 43 du Traité CEE
t. OBJÎCT : ;; o-: L* HE-JR ;                    Rechercher l' équilibre dans le secteur viti-vinicole par :
            action structurelle visant la diminution du potentiel viticole par la réduction
            des superficies
     - limitation du rendement par les effets dissuasifs des distillations obligatoires
s.    INCIDENCE :          ‘ÌNÌNC                            PERIODE DE 12 HOIS  EXERCICE EN COURS C 88)  EXERCICE SUIVANT < 89 >
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                                                               1990              1991              1992                1993
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                                                                                                                    - 170
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s.".·         Bes·.              ÍES RECETTES                                                                       Mio ECU
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                                                Voir annexe technique ci-jointe
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50 3 £ 8 V *
 ---pagebreak---                              TECHNICAL ANNEX
1. The calculations are estimated by comparison with what would be the
   development of needs if the current legislation remained unchanged .
   They only have an indicative value for various reasons :
     - the surplus to be withdrawn from the market is based on the
       trends in production and useage , whereas the annual fluctuations
       in wine production are very large ;
     - the possible costs linked to the alternative use of land freed ,
       notably from 1994 , could not be taken into account because they
       are difficult to estimate ;
     - controls are presumed to be correctly applied by Member States .
2. The overall purpose of the two proposals is to restore the balance
   in the wine sector which cunently suffers from an excess production
   of 40 mio hi ox 30% of total production .
   It is estimated that the surplus production can be eliminated by the
   grubbing up of some 700 000 ha or 30% of the area planted with vines .
   AQQ§x_I shows the implementation of this objective ; the main
   voluntary grubbing up is to take place from the 1989/ 90 to 1992/ 93
   marketing years . Total costs and Community shares of the scheme are
   shown and the reduction of production due to grubbing up is
   indicated .
 ---pagebreak---                                  - 2 -
Annex_ii basically shows how the operation is to be financed . The
point of departure has been that a double restriction should be
respected .
Firstly the structural measures should be financed from the market
savings that they generate . This can not be done in parallel since
the market savings are only realised after the grubbing up has taken
place and gfter the premium has been paid .
Secondly and implicitly the present level of expenditure for wine in
the FEOGA budget should not be exceeded .
The financing ( column D ) is therefore secured in a first stage by
the direct savings due to reduction of wine production i.e. less
expenditure on distillation , storage costs etc . ( column B ) . For 1989
this amounts to 72 mio ECU .
The remaining share of the finance should be achieved through less
disposal of alcohol ( column C ) which also emerges from column G
where there is a build up in terms of physical_stocks of alcohol
over the early years of the programme . ( However , it should be noted
that the value of the stocks is roughly unchanged because of the
depreciation carried out following the conclusions of the European
Council , column F ).
A comparison of columns B and C shows finally that as the grubbing
up is implemented , direct , true savings account for an increasing
share of the finance which again leaves room for a reduction of the
physical stocks ( see column G ) .
 ---pagebreak--- VI / G / 1                                                       1.3.88
                                                                 WP-846
                                      ANNEXA 1
   Campagne       Rythme    Nombre        *  Exercice    Coût en Mo ECU(B )   :
                d 'abandon   d' ha        * budgétaire   Total     à charge   :
                           abandonnés *                            du  FEOGA  :
                                          *
                                                                    ( 70 % )  :
     88 /89         10 %     70.600       *    1989      413           2 89   :
                                          «
     89 /90         15 %    IO5.9OO       *    1990      619           434    :
                                          «
     90 / 91  .     20 %    1*41 . 200    *    I99I      826           578    :
                                          *
     91 / 9 ?       20 %    1*41.200      *    1992      826           578    :
                                          «
     92 / 93        15 %    IO5.9OO       *    1993      619           434   :
                                          ft
     93 / 9*4        10 %    70.600       *    199 **    413           289   :
                                          it
     94 / 95          5 %     35.3OO      *    1995      206           144   :
                                          «
     95 / 96          5 %     35.300      »    1996      206           144   :
                                          ft
   TOTAL           100 %    706.000       *            4.128        2.890    :
   Hendement moyen hl / ha     58         *
 ---pagebreak---                                                                                               ANNEX 2
            Incidences des aésures préconisées dans le secteur viti-vinicole
Année   Réduction de                      Dépenses       Dépenses                        Stocks d' alcool fin d' année
Budgé­  1 * excédent      Economies        alcools       ■esure          5olde           découlant des hypothèses
taire                   1               1             1  structurelle !                   retenues
          nip i.i . vin 1   « 10 ECU    !  Hio ECU    1    Hio ECU    !    Hio ECU    !    Hio ECU        !   Hio hl .
               A        !       B       !     C       1       D       !    E=B*C+D    !          F        !       G
                                                      1
                        1               1             1                                                   1
  196°         0        !          -72  !       -217  1           289 !             0 !       472         !       7.36
                                                                                                          1
  19°0         3        !         -221  !       -213  1           434 !             0 !       513         !       9.06
                                                                                                          1
. 1??J        7,1       !         -417  !       - 161 1           578  i            0 !       490         !       9.55
                                                                                                          1
  jpe;       14.7       1         - 510 !         -68  1          578  !            0  !      305         !       7.15
                                                                                                           1
  1 ?63      23,9       1         -¿27  !          20  1          434  !        - 173  !       148         !      4.36