CELEX: 51988PC0272
Language: en
Date: 1988-05-30
Title: Amended Proposal for a COUNCIL REGULATION (EEC) establishing a system of transitional aids to agricultural income (presented by the Commission pursuant to Article 149(3) of the Treaty)

ARCHIVES HISTORIQUES
DE LA COMMISSION
COLLECTION RELIEE DES
DOCUMENTS "COM"
COM (88) 272
Vol. 1988/0086
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 ---pagebreak--- COMMISSION OF THE EUROPEAN COMMUNITIES
                                             COM(88 ) 272 final
                                             Brussels , 30 May 1988
                           Amended Proposal for a
                          COUNCIL REGULATION ( EEC )
     establishing a system of transitional aids to agricultural income
 ( presented by the Commission pursuant to Article 149(3 ) of the Treaty )
                                     1–3    r\ b Jv/ i             F®
                                     \&'A  bCi>‘
                                                       .• l'.arta1
                                              ial oo i zz.
 ---pagebreak---                                 EXPLANATORY MEMORANDUM
1.  In June 1987 the Commission sent to the Council its proposals on income
    aids in the agricultural sector . Three regulations were proposed , namely :
    - a Regulation establishing a Community system of aids to agricultural
        income ;
    - a Regulation establishing a framework system for national aids to
        agricultural income ;
                      ψ
    - a Regulation establishing a Community scheme to encourage the cessation
        of farming .
2.  The Commission proposals have been discussed in detail by the European
    Parliament (which delivered its opinion on the first two proposals on
    28 October 1987 and on the third proposal on 21 January 1988 ), by the
    Economic and Social Committee ( which delivered its opinion on 3 September
    1987 ) and by the Council .
3.  Following the agreement reached at the European Council held in Brussels
    on 11 , 12 and 13 February 1988 and the amendments introduced by the
    Commission in agreement with Parliament , the proposal for a Regulation
    establishing a Community scheme to encourage the cessation of farming was
    separated from the rest of the package and adopted by the Council on
     25 April 1988 .
4 . The Council also adopted a Regulation on the set-aside of agricultural
     land and the extensif ication and conversion of production . This also goes
     some way to meeting some of the aims of the Commission in proposing a
     system of income aids .
5 . The Brussels European Council also asked the Council to reach a decision
     on income aids before 1 July . It provided for the creation of a special
     budget heading for set aside and income aids and the fixing of a 600
     million ECU ceiling in 1992 , of which 150 million ECU would be charged to
     the EAGGF Guarantee Section .
                                                                                 г
 ---pagebreak---                                           2
6. The attached proposal amends the Commission 's earlier proposals , as
   regards :
       the Community system of aids to agricultural income ;
   -   the framework system for national aids to agricultural income .
   The proposal aims , on the one hand , at making the systems in question more
   of a clear addition to the existing legislation and , on the other hand , at
   simplifying and thus increasing the effectiveness of the planned measures ,
   taking account of the comments made during the discussions held within the
   various Community institutions .
7. As regards the first of these aims , the proposed amendments target the
   instrument more closely on the adjustment problems facing those family-run
   holdings which are relatively weak in structural and economic terms .
   These are the farms which have the greatest difficulty in making good use
   of the opportunities offered by the set-aside , extens if ication and
   conversion schemes and where the farmer does not qualify for the scheme to
   encourage the cessation of farming .
   Of these potential beneficiaries , only operators who practise farming as
   their main occupation are eligible for Community financing .
8. As regards the simplification of the system , the proposed amendments
    include changes in the rules for calculating the aid . Under the new
   proposals :
       the " overall income " ( agricultural + non-agricultural income ) of the
       holding would be used only as a criterion for excluding potential
       beneficiaries , when the eligibility of the latter was being assessed by
       reference to a regional or national indicator of relative prosperity ;
    -  the amount of the aid would be calculated on the basis of the
       difference between individual agr icul tural income and a regional or
       national agricultural indicator ;
       the Community system of income aids and the framework system for
       national aids would be covered by a single legislative text .
                                                                                3
 ---pagebreak---                              Amended Proposal for a
                            COUNCIL REGULATION ( EEC )
       establishing a system of transitional aids to agricultural income
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 Community 's policy on agricultural structures has been
supplemented by certain measures designed , in particular , to make it easier ,
for farmers to adapt to the new circumstances obtaining on agricultural
markets in the context of the current reform of the common agricultural
policy ; whereas , however , these measures may not provide sufficient
assistance for certain categories of family holding ;
Whereas , this being the case , Member States should have the option or grant :. .
transitional aids to agricultural income so that the agricultural population
can maintain a fair standard of living and the balances necessary to the
vitality of rural society can thus be saf eguarded , given tr.e restricted
opportunities for non-agricultural employment available to the farmers
 concerned in the present economic climate ;
 ( 1 ) OJ No C
 ( 2 ) OJ No C
 ( 3 ) OJ No c
 ---pagebreak---                                            – 2 –
  Whereas , to ensure the necessary transparency of such temporary aids and to
  ensure compliance with the Community conditions laid down to prevent any
  jeopardizing of the Community’s objectives as regards market reform in
  particular , the granting of the said aids to income should have to satisfy
  criteria relating mainly to the economic situation of the holdings concerned
  as compared with that of holdings in the region concerned as a whole anc
  should be subject to prior approval by the Commission of income aid programmes
  drawn up by the Member States planning to introduce such measures ;
  Whereas account should also be taken of the fact that holdings of the type
  concerned are unevenly distributed in the Community and are relatively
  concentrated in the Member States where budget funds and , consequently , the
  possibilities for granting transitional aids are much more restricted than in
  other Member States ;     whereas the cohesion sought by the Single Act therfore
  requires , in the latter cases in particular , a Community contribution towards
  the income aids granted to persons practising farming as their main
  occupation ;    whereas the level of the Community contribution must be varied
  according to requirements and the financial resources available in the various
  regions of the Community ;
  Whereas the Community contribution will be financed from appropriations
  entered in a special chapter of the general budget of the Communities ;
  whereas in order to facilitate operation of the system the financing rules
  should be those applying to the EAGGF Guarantee Section under Council
  Regulation ( EEC ) No 729 / 70 of 21 April 1970 on the financing of the common
  agricultural policy ( 1 ), as last amended by Regulation ( EEC ) No 3183 / S7 ( 2 ),
  HAS ADOPTED THIS REGULATION :
   ( 1 ) 0J No L 94 , 28.4,1970 , p. 15 .
   ( 2 ) OJ No L 304 , 27.10.1987 , p. 1 .
*
 ---pagebreak---                                               - 3 -
                                           Artide 1
  1.    To assist family holdings to overcome short-term income difficulties and
        to adjust to market conditions in the context of the reform of the common
        agricultural policy , a Community system is hereby instituted whereby the
        Member States may be authorized to grant transitional aids to agricultural
        income , hereinafter referred to as " income aids ".
  2.    The Community shall contribute towards the financing of income aids on the
        terms laid down in Title II .
                              TITLE I : The system of income aids
                                            Article 2
  Income aids shall fall within the scope of this system where :
  ( a ) they are covered by a programme drawn up by the Member State concerned in
        accordance with Article 3 ;
  (b ) the recipients meet the conditions laid down in Article 4(1 ); and
  ( c ) they do not exceed in amount the level determined in accordance with
        Article 5 .
                                            Article 3
  1.     Each programme of agricultural • income aids ( hereinafter referred to as a
         "PAIA") shall include at least the following details :
         ( a ) the geographical scope of the PAIA as delimited in accordance wiih
               paragraph 2 and , where this does not fully coincide with one or more
               administrative regions within the meaning of paragraph 2 , the reasons
               for such delimitation ;
         (b ) the objectives pursued and the period within which they are to be
               achieved , specifying the data necessary for establishing the average
»              regional income and the average national income within the meaning of
               Article 5 ;
                                                                                      ê
 ---pagebreak---                                             h
   ( c ) the status of the PAIA in relation to any other measures to stimulate
          economic development , and employment and incomes in general in the
           region concerned , outlining the necessary coordination between those
          measures and those provided for in the PAIA ;
   ( d ) the forecast amount of overall annual expenditure on the
           implementation of the PAIA , justifying that amount by reference to the
           socio-economic situation of the holdings concerned and specifying ,
           with supporting evidence , the amount which may qualify for a Community
           contribution under Articles 7 and 8 ;
   ( e ) data warranting conformity with the objective that the aids granted
           under this Regulation must not stimulate agricultural production ;
   ( f ) the detailed conditions for granting income aids within the framework
           of the PAIA in question , in compliance with the conditions laid down
           in Articles U and 5 and , where appropriate , Article 7 .
2. The geographical scope of the PAIA shall be delimited in terms of the
   administrative regions of the Member State concerned ; however , it need
   not fully coincide with one or more administrative regions if it covers an
   area where the socio-structural characteristics of agricultural holdings
   are broadly homogeneous .
    For the purposes of the geographical delimitation , Member States shall
    also take into account the initial situation and the trends which may be
    inferred therefrom , and in particular :
    ( a ) the economic and social situation of the area in general , and in
            particular the prospects for non-agricul tural employment ;
     ( b ) the importance of farming , the characteristic types of farming and the
            structure of agricultural holdings ;
     ( c ) the economic data relating to the profitability of agricultural
            holdings , their financial situation ( capital and liabilities ) and the
            average level and distribution of family agricultural incomes .
 ---pagebreak---                                          - 5 -
  3.  PAIAs may restrict the granting of income aids to certain production
      sectors , but only by way of exception and in specially warranted cases .
      In such cases the PAIA shall indicate , in addition to the details listed
      in paragraph 1 and in the context of the information referred to in the
      second subparagraph of paragraph 2 , the specific features of the
      production sector(s ) concerned as compared to agricultural holdings as a
      whole within the PAIA area .
  4.  A PAIA must not cover all or part of any regions for which another PAIA
      has already been approved in accordance with Article 6 .
                                       Article 4
  1.  Farmers and members of their families working on the holding may qualify
      for income aid only where the overall family income on the holding
      amounts , per work unit , to less than 100% of the regional gross domestic
      product per member of the working population or , at the option of the
      Member State concerned , 75% of the national gross domestic product per
      member of the working population . If the Member State uses the regional
      GDP , the limit of 75% of the national GDP must not be exceeded .
       "Overall family income " shall mean the income of the farmer and those
      members of his family who belong to his household , including any
       non-agri cultural resources .
       The agricultural income of the holding to be taken into account shall be
       established by recourse to objective criteria relating to the holding to
       be determined by the procedure laid down in Article 12 .
   2.  Income aids may be granted to individual beneficiaries for a period not
       exceeding five years as from the first income-aid payment .
*
                                                                                 8
 ---pagebreak---                                             Artide 5
1. The level of income aid per agricultural work unit shall be determined in such a way as
   to cover , at most , the difference between :
   ( a ) the agricultural income of the holding , determined as indicated in the
          third subparagraph of Article 4(1 ), divided by the number of work
          units on the holding , and
   ( b ) 100% of the average regional income or , at the option of the Member
          State concerned , 80% of the average national income .
   If determined by reference to the average regional income , the aid must
   not result in the agricultural income of the holding per work unic
   exceeding 90% of the average national income .
2. For the purposes of paragraph 1 :
   ( a ) "average regional income " shall mean the average agricultural income
          per work unit recorded in the administrative region covered by the
          PAIA in question over a multiannual reference period to be determined
          in accordance with the procedure laid down in Article 12 for the
          entire period of application of this system ;
    ( b ) "average national income " shall mean the average agricultural income
          per work unit recorded at national level on the same basis as the
          average regional income .
3.    By way of derogation from paragraph 1 and without prejudice to paragraph 4 , a
    flat rate for the aid per work unit may be determined for the zone of
    application of the PAIA by establishing the difference between the average
    regional or average national income , as appropriate , specified in
    paragraph 2 , and the average agricultural income per work unit in the zone
    derived from the most recent figures .
4.  In order to prevent distortion of competition and ensure that the
    objective stated at ( e ) in Article 3(1 ) is respected , maximum aid amounts
    set as a percentage of the average regional or national income as defined
    in paragraph 2 shall be determined by the procedure laid down in Article
    12 .
                                                                                           â
 ---pagebreak---                                           7
                                      Artide 6
1.  Where a Member State plans to introduce or amend a PAIA , it shall notify
    the Commission of the draft programme or the proposed amendment . The
    notification must contain the information required for assessing whether
    the conditions laid down in this Regulation are met .
    At the request of the Commission , the Member State concerned shall provide
    additional information for assessment purposes .
2.  Member States may not implement the planned measures before the Commission
    has approved the PAIA concerned .
    The Commission in making its assessment shall ensure in particular that
    the planned measures :
    ( a ) comply with the provisions of this Regulation , taking into account the
          objectives thereof , and
    (b ) are consistent with the objective that aids granted pursuant to this
          Regulation must    not stimulate agricultural production .
3.  Within three months from the date of receipt of a draft PAIA or amendments
    thereto , the Commission , having consulted the Committee provided for in
    Article 12 , shall decide whether to approve the draft PAIA or the
    amendments thereto , provided that all the particulars listed in Article 3
    and , where appropriate , the additional information referred to in the
     second subparagraph of paragraph 1 of this Article have been supplied .
                    TITLE II : Community financing of income aids
                                       Article 7
1 . Income aids which are part of a PAIA approved in accordance with Article
     6(3 ) and which are granted in accordance with the condition* l \|,) down in
     Articles 4 and 5 shall be eligible for Coumunity financing , t invldcd that
     the following special conditions are met :
                                                                                  \o
 ---pagebreak---                                                   - 8 -
       ( a ) the far ner or another member of his family receiving the aid must possess adequate
              occupational skill and competence and must practise farming as his
              main occupation ;
       ( b ) he must have undertaken to continue farming for at least five years
              as from the first payment of income aid .
      For the purposes of compliance with the conditions laid down in subparagraph
      ( a ), Article 2(5 ) and ( 6) of Council Regulation ( EEC ) No 797/85 ^ shall
      apply . The party concerned may be released from the undertaking referred
       to in subparagraph ( b ) where he meets the requirements of the first
      subparagraph , second reference , of Article 14(1 ) of Regulation ( EEC ) No
       797 / 85 .
2.     However , only that proportion of income aid shall be eligible for
       Community financing :
        ( a ) which is granted in respect of not more than two work units per farm
               and amounts to not more than 1 500 ECU per work unit per year , and
        ( b ) which constitutes , in the second , third , fourth and fifth years of its
               grant to individual beneficiaries , 80% , 60% , 40% and 20% respectively
               of the eligible income aid granted to such beneficiaries in the first year in
               accordance with Articles 4 and 5 .
3.     To ensure that the appropriations entered in the Community budget are not
        exceeded by expenditure , additional conditions relating to the eligibility
        of PAIAs may be adopted in accordance with the procedure laid down in
        Article 12 , the EAGGF Committee having been consulted on the financial
        aspects .
                                                 Article 8
1.       In order to determine the Community contribution to the financing of
        eligible income aids , a Community list breaking down the regions of the
        Community into various categories shall be drawn up in accordance with the
        procedure laid down in Article 12 .
        The list shall be drawn up on the basis of a synthetic indicator :
         ( a ) three quarters of which shall reflect the level of economic
                development as measured in terms of the gross domestic product per
                inhabitant , and
         ( b ) one quarter of which shall reflect the share of total employment
                accounted for by agriculture , as measured by the percentage of total
                employment reoresented bv non-agr i cu Itura l employment .
  1 0J No L 93, 30.3.1985, p.1 ,                                                                 II
 ---pagebreak---                                           - 9 -
2.   The Community shall finance expenditure on the granting of eligible income
     aids according to the category of the region where the holding concerned
     is located , at the following rates :
          70% where the regional synthetic indicator is less than 75% of the
          Community indicator ( category I );
     -    45% where the regional synthetic indicator is equal to or greater than
          75% but less than 85% of the Community indicator ( category II );
          20% where the regional synthetic indicator is equal to or greater than
          85% but less^than 95% of the Community indicator ( category III );
     -    10% where the regional synthetic indicator is equal to or greater than
          95% of the Community indicator ( category IV ).
     However , for the purpose   of implementing this Article , Northern Ireland
     shall be placed in the same category as the neighbouring regions of Ireland .
                                        Article 9
The measures referred to in Articles 7 and 8 shall be financed from
appropriations entered in a special chapter of the general budget of the
Communities . The financing rules shall be those applying to the EAGGF
Guarantee Section .
                             TITLE III : General provisions
                                       Artide 10
 1 . The provisions of Articles 92 , 93 and 94 of the Treaty , with the exception
      of Article 92(2 ), shall not apply to aids granted pursuant to this
      Regulation .
 2 . Without prejudice to other specific or sectoral Community provisions , aids
      to agricultural income shall be prohibited if the conditions or rules
      governing the grant thereof differ from those laid down in this Regulation
      and , in particular , if the amount of such aids is determined by reference
      to prices , quantities of agricultural products or inputs .
                                                                                   12
 ---pagebreak---                                         10 -
                                    Artide 11
Detailed rules for the application of this Regulation shall be adopted in
accordance with the procedure laid  down in Article 12 .
                                    Article 12
1.  A Management Committee for Agricultural Income Aids , hereinafter referred
    to as the "Committee ", shall be set up , comprising representatives from
    the Member States and chaired by a Commission representative .
2.  Within the Committee the votes of the Member States shall be weighted in
    accordance with Article 148(2 ) of the Treaty . The Chairman shall not vote .
3.  Where the procedure laid down in this Article is to be followed , the
    Chairman shall refer the matter to the Committee , either on his own
    initiative or at the request of the representative of a Member State .
4.  The Commission representative shall submit a draft of the measures to be
    adopted . The Committee shall deliver its opinion on the measures within a
    time limit which the Chairman may lay down depending on the urgency of the
    matters submitted for examination . Opinions shall be delivered by a
    majority of 54 votes .
5.  The Commission shall adopt measures which shall apply immediately .
    However , if they are not in accordance with the opinion of the Committee ,
     the measures shall be immediately notified by the Commission to the
    Council . In this event the Commission may defer application of the
    measures which it has adopted for not more than one month as from such
    notification .
    The Council , acting by a qualified majority , may take a different decision
    within one month .
6.  The Committee may examine any other matter referred to it by its Chairman ,
    either on his own initiative or at the request of the representative of a
     Member State .
                                                                                  13
 ---pagebreak---                                     Artide 13
1.  At the end of a three-year period starting from the entry into force of
    this Regulation , the Commission shall submit to the Council and the European Parliament
    a report on the operation of the system provided for in this Regulation ,
    on the basis of the information provided by the Member States .
2.  Having examined the said report , the Council , acting in accordance with
    the procedure laid down in Article 43(2 ) of the Treaty , may decide , in the
    light of experience and changes in economic conditions , to amend this
    system where necessary .
                                    Article 14
This Regulation shall enter into force on .
It shall apply until . [ five years after entry into force ].
No PAIA may be approved under Article 6 after that date and no income aid
provided for in a PAIA approved before that date may be granted to individual
beneficiaries after . [ 10 years after entry into force ].
This Regulation shall be binding in its entirety and directly applicable in
all Member States .
Done at Brussels ,                                    For the Council
                                                       The President
 ---pagebreak--- FINANCIAL             STATEMENT relating to an amended proposal for a Council
Regulation establishing a system of transitional aids to agricultural income
1 . Budget heading : III B       Item : 39      Heading : Aids to income
2 . Legal basis : Articles 42 and 43 of the Treaty
3 . Classification :
4 . Aims of project and description of measures : To facilitate the adjustment of
    agricultural holdings to the new situation of the agricultural markets by granting
    temporary aid to income .
5.   Method of calculation :
5.1 Type of expenditure : Community contribution with varying amounts per region .
5.2 Percentage Community financing : 70% /45% / 20% / 10% according to the region .
5.3 Calculation : See Annex
6.   Financial impact on operational apropriat ions
6.1 Schedule of commitment and payment appropriations ( million ECU )
       Financial Year
            1989                              50
           1990                              180
            1991                             290
            1992                             320
            1993                             280
            Subsequent financial years       320
           Total                           1 440
6.2 Financing during the current financial year : not necessary
                                                        1989 Budget : to be provided for
 7.  Observations :
 ---pagebreak---                                 ANNEX TO THE FINANCIAL STATEMENT
1•    The basic data to be used for establishing financial estimates are as
      follows :
      Holdings concerned :
      - holdings fanned by farmers practising farming as their main occupation
      - agricultural income less than the average for the region
                  AREAS                : Rate of       : Number potentially : Estimate of
                                       : financing     : involved ( 1 )     : number actually
                                       :               : ( ’000 )           : involved ( 2 )
                                        :          ... :                    : ( Ό00 )
   I     ( Greece , Portugal ,
         Ireland , certain regions
         of Spain and Italy ,
         Northern Ireland )                  70%              1 060                   510
   II    ( Certain regions of
         Spain and Italy )                   45%                   70                  30
   III ( Certain regions of
         Italy , France , Belgium ,
         the Netherlands and the
         United Kindgom )                    20%                  150                  30
    IV (All other regionsj                   10%                  900                 280
   Total                                                       2 180                  850
   NB : The groups of regions are established using a synthetic index ( 3 / 4 of
         GDP / head ; 1 / 4 share of non-agricul turai employment ).
( 1 ) These are definitions of the universe in statistical terms which do not
      always correspond to those used in the legal texts .
( 2 ) The application of the measures by the Member States is not compulsory but
      voluntary , as is the participation at agricultural holding level .
      Consequent . y , some caution is required when it comes to estimating the
      number of participants actually expected . The total number of holdings
       taken into account for a period of application of five years was estimated
      on the basis of pratical criteria , additional national or community
       conditions and social factors in each Member State .
                                                                                              U,
 ---pagebreak---                                             2
2. Unit aid : simulations concerning the holdings in question suggest that the
   average loss of revenue resulting from a rigorous prices policy ( less 5 to
   10% in real terms ) will amount to 2 000 ECU on average for the Community
   of Twelve . However , taking account of the 15 000 ECU / ALU ceiling and using
   indices of agricultural income published by Eurostat in 1988 , the average
   amount to be withheld is 1 330 ECU . The aid is to be granted for five
   years and will decrease as follows :
   First year :     1 330 ECU
   Second year :    1 070 ECU
   Third year :       800 ECU
   Fourth year :      530 ECU
   Fifth year :       270 ECU
   Total            A 000 ECU
3. The average rate df community financing will be A2.A% ( weighted average ,
   maximum 70% , minimum 10% ).
A. As regards getting the measure under way , experience with other innovative
   measures indicates some caution is needed . The first payments at national
   level will not take place before 1989 . The assumption is as follows for
   all recipient holdings over a 5-year period :
       Year of first :      %              Holdings
       payment         :
             1989      :    10                 85 000
             1990      :    30                255 000
             1991      :    30                255 000
             1992      :    20                170 000
             1993      :    10                 85 000
                           100                850 000
5.  The result is expenditure to the Community budget amounting to :
    850 000 holdings ( 1 ) x A 000 ECU x A2.A% = 1 AA0 million ECU , broken down
    as follows :
        Financial Year        Total ( million ECU )
             1989                       50
             1990                      180
             1991                      280
             1992                      320
             1993                      280
             199A                      180
             1995                       90
             1996                       A0
              1997                      10
             Total                  1 AA0
     ( 1 ) See Table in 1
                                                                                  1У
 ---pagebreak---                          Fiche d' impact de la mesure sur
                         les petites et moyennes entreprises
  Les mesures proposées sont destinées à aider les exploitants agricoles
  touchés par les effets de la réforme de la PAC à surmonter des difficultés
i conjoncturelles de revenu . Elles n' auront pas d' effet sur la compétitivité
* des entreprises et sur l' emploi dans des secteurs extra-agricoles .