CELEX: 51993PC0094
Language: en
Date: 1993-03-16
Title: Proposal for a COUNCIL DECISION on further temporary national compensation for farmers in Germany

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                             COMMISSION OF THE EUROPEAN COMMUNITIES
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                                                                   COM(93) 94 final
                                                                   Brussels, 9 March 1993
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                                                  Proposal for a
                                                 COUNCIL DECISION
                                  on further temporary national compensation for
                                                farmers in Germany
^ S
                                           (presented by the Commission)
 ---pagebreak---                                EXPLANATORY MEMORANDUM
In   1992   farmers     in   Germany    will   receive   some   DM   3   600  million
 (±ECU 1 800 million) of national aid the grant of which compensates for
price reductions in DM due to revaluations of the green mark in the mid and
late 1980s.
Under   existing    legal   provisions    this   compensatory   aid   ceased  in  its
entirety at the end of 1992.         Faced with an essentially similar situation
one year ago, but where the reduction in aid, rather than being total, was
equivalent    to  a   cut  of   some   60%   (or  DM 2 200   million) , the   Council
decided^^),    on   the   basis   of   a  Commission   proposal    supported  by  the
European Parliament, to legislate so that, in substance, no reduction in
the total volume of aid had to occur between 1991 and 1992.              The decision
to authorize maintenance of the volume of national aid in 1992 at a level
equivalent to that in 1991 recognized the negative impact cessation of the
DM 2 200 million aid would have had on farm incomes in Germany at a time
when these were relatively low.
Immediate and full cessation of the annual DM 3 600 million aid authorized
until the end of 1992 (2) would have a severe impact on still low farm
revenues in Germany. This aid represents about 15% of the value added of
the sector.     It is however evident that any continuation of the aid must
be subject to defined ceilings which decrease over time to zero.                It is
equally important that any aid is granted in a non-trade distorting manner.
The current proposal takes account of these considerations and involves a
Council decision allowing Germany to continue to pay compensatory             aid not
linked to prices or to production, on a pre-set degressive basis until the
end of 1995 after which it ceases totally.
This measure has no impact on the EC budget.
(1)    Decision 92/392/EEC of 30 June 1992, OJ No L 215, 30.7.1992, p. 100.
(2)    See also Decision 88/402/EEC of 3£) June 1988, OJ No L 195, 23.7.1988,
       p. 70.
 ---pagebreak---                                           - 3 -
                                     Proposal for a
                                    COUNCIL DECISION
                  on further temporary national compensation for
                                   farmers in Germany
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(*),
Having regard to the opinion of the European Parliament(2),
Having regard to the opinion of the Economic and Social Committee^),
Whereas to compensate for the lower farm incomes resulting from reductions
in prices expressed in national currency brought about in Germany by the
adaptation    of    agricultural    conversion   rates,   Council    Regulation     (EEC)
No 855/84 of 31 March 1984 on the calculation and dismantlement of the
monetary     compensatory       amounts    applying     to     certain      agricultural
           4                                                              5
products( ),    as    rectified   by  Regulation   (EEC) No      1004/84( ),    provided
that,   subject    to  certain   specified   conditions, a      special   national    aid
granted through the value added tax (VAT) system was compatible with the
common market; whereas the aid provisions laid down in that Regulation are
not limited in time; whereas Council Directive 85/361/EEC of 16 July 1985
on the harmonization of the laws of the Member States relating to turnover
taxon - Common nyntem of value added tax; derogations in connection with
the   special    aids   granted    to  certain   farmers    to    compensate    for   the
dismantlement     of    monetary    compensatory   amounts     applying     to   certain
agricultural products(°), laid down the conditions under which VAT could
be used for the grant of this special aid;
(1)
(2)
'(3)   ....
(4)    OJ No L 90, i.4.19'84, p. L.
(5)    OJ No L 101, 13.4.1984, p. 2.
(6)    OJ Mo L 192, 2 4.7.1985, p. 18
 ---pagebreak--- Whereas the Council, when adopting Directive 85/361/EEC, noted that the
consequences   of  the dismantlement    of monetary     compensatory    amounts   are
temporary and degressive; whereas in Council Decision 92/392/EEC of 30 June
1992  on  temporary   national   compensation   for   farmers   in Germany( ^ ) the
Council  recognized   the unsatisfactory manner      in which    farm   incomes had
developed in Germany and agreed on the need to allow Germany to continue to
grant income support for the farm sector in 1992 which would otherwise have
ceased at the end of 1991;
Whereas Council Decision 88/402/EEC of 30 June 1988 on an aid granted to
farmers in the Federal Republic of Germany(°) authorized Germany to grant
another   special national aid to farmers; whereas the total aid which may
be paid in 1992 under Decisions 88/402/EEC and 92/392/EEC is of the order
of  DM 3 600 million;    whereas  these   Decisions    authorize   aid   only  until
31 December 1992;
Whereas   farm   incomes   in  Germany    have   continued    to   develop    in   an
unsatisfactory manner; whereas in the light of this situation it would be
inappropriate   for  the   income   support   farmers   enjoy   in   Germany   under
Decisions 88/402/EEC and 92/392/EEC to cease on 31 December 1992; whereas
it is therefore necessary to lay down provisions which allow compensatory
aid to continue to be granted but at a reduced rate in 1993 and to be
phased out totally over a pre-set limited period;
Whereas   in  order   to  avoid   distortions   of   competition     the   grant   of
compensatory aid should be linked to area; whereas due account should be
taken of the farm structure in the new Lander,
HAS ADOPTED THIS DECISION:
                                    Article 1
Germany  is hereby   authorized   to grant   to   farmers, from     1 January    1993
until 31 December 1995, special national aid which is not linked to prices
or to production, under the following conditions:
(7)   OJ No L 215, 30.7.1992, p. 100.
(8)   OJ No L 195, 23.7.1988, p. 70.
 ---pagebreak---                                    - 5 -
1.  individual  farmers shall qualify     for aid per    hectare of    utilized
   agricultural area of their holdings. In 1993, the aid per holding
   shall not be less than DM      1 000 and shall not exceed DM 16 000. In
   1994 and 1995 these limits may be decreased as appropriate taking
   account, in particular, of the amounts referred to in point 5;
2. Germany may   lay down that farmers who cooperatively work the same
   holding receive the aid specified in point 1. The ceilings           on area
   and maximum amounts shall be multiplied by the number of farmers in
   the cooperative;
3. in   principle,  only   farmers  who   are  members   of  the   German   farm
   retirement pension scheme (GAL) may qualify for the scheme;
4. derogations   from  points   1 and   3 shall   be  applied  to   the   extent
   necessary to take account of the farm structure in the new Lander;
5. Germany   shall  fix  the  unit   amount   referred  to  in   point   1,  the
   detailed rules for point 4, and all other implementing details in
   such a way as to ensure that the overall volume of the special aid
   does not exceed DM 2 200 million in 1993,
                        1 500 million in 1994,
                         750 million in 1995,
                        zero in 1996 and subsequent years.
                                 Article 2
1. Germany shall notify to the Commission drafts of detailed provisions
   and of any further amendments relating to the implementation of the
   aid scheme referred to in Article 1.
   At the request of the Commission, it- shall provide further guidance
   information.
 ---pagebreak---                                     - 6 -
2.    Germany may not implement the relevant provisions before such time as
      the   Commission   has  ascertained   their   compatibility  with   the
      stipulations   set out in Article 1.
      The  Commission   shall  decide   on  whether   to  approve the   draft
      provisions within two months from the date of receiving them.
                                  Article 3
This Decision is addressed to the Federal Republic of Germany.
Done at Brussels,                                For the Council
                                                The President
 ---pagebreak---                                                                       ISSN 0254-1475
                                                               COM (93) 94 final
                                                       DOCUMENTS
EN                                                                               03
                                                                           16.3.93
                                 Catalogue number : CB-CO-93-136-EN-C
                                                             ISBN 92-77-53851-1
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