CELEX: 51991PC0409(02)
Language: en
Date: 1991-10-31
Title: Proposal for a COUNCIL REGULATION ( EEC ) establishing an additional levy in the milk and milk products sector

COMMISSION OF THE EUROPEAN COMVTUNITIES
                                               COM(91)409  final
                                               Brussels, 31 October 1991
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^5lliu            REFORM OF THE COMMON AGRICULTURAL       POLICY
                                   Legal texts
                                  Milk sector
                           (presented by the Commission)
 ---pagebreak---                            EXPLANATORY MEMORANDUM
                      Reform of the CAP - Milk sector
In the milk sector, the Commission is implementing the principles set out
in its Communication COM(91) 258 in five proposals for regulations.   At the
same time, in order to optimize the conditions for the reform, it is
proposing a radical simplification of the rules in this area.
A. IMPLEMENTATION OF THE PRINCIPLES OF THE REFORM
1. Extension of the milk quota scheme and reduction of the Member States'
   total quantities
   The Commission is proposing:
   (a) within the framework of a new regulation introducing an additional
        levy, the extension of the milk quota scheme from 1 April 1992 for
        a further period of eight years. While confirming the transitional
        nature of the scheme, this extension defines a multiannual
        framework which is adequate to ensure the legal certainty of
        producers and is compatible with both the gradual introduction of
        the reform over three years and the detailed rules for the payment
        of compensation;
   (b)  to convert the suspension of 4.5% of the guaranteed total
        quantities provided for in Regulation (EEC) No 755/87 into a
        definitive reduction.  The continued surplus on this market brooks
        no other choice.  In addition, given the compensation granted over
        the past five years for the suspended quantities, which totals
        ECU 45.5/kg, and the degressive nature of the compensation, the
        reduction in individual reference quantities has already been
        fairly compensated for;
                                                                             d
 ---pagebreak---                                     - 2 -
   (c)  entry into force of the first phase of the 4% reduction, with
        redistribution of 1% from 1992/93.   Both the surplus situation and
        the analysis carried out when the 2% reduction was introduced, at
        the same time as the agricultural prices were fixed for 1991/92, as
        well as the logic of the quota scheme, which implies that
        production subject to quotas should be closely linked to the
        availability of outlets, require that the reduction should become
        operational as soon as possible, In view of the proposal to phase
         It in gradua!ly.
2. Compensation of the ouota reduction, compulsory programme of voluntary
   discontinuation of milk production and optional post-reform scheme
   (a)  The draft differs little from Regulation (EEC) No 1637/91 adopted
        by the Council at the same time as the 1991/92 price proposals.    It
        follows on without interruption.   Community financing of
        discontinuation is not fixed in advance.    It will be restricted to
        reallocation requirements.   Distribution will depend on the number
        of producers producing less than 200 000 kg concerned in each
        Member State.
   (b)  The most innovative aspect is the guaranteed bond system proposed
        for the payment of compensation.   The bond is used as a means of
        payment.   The main advantages of this system are:
        - a reduction in the administrative workload of the Member States
           linked to the payment of all the compensation to individual
           producers;
        - containment and staggering of Community budget expenditure;
 ---pagebreak---                                    - 3 -
        - the producer is guaranteed a fixed annual payment, while the fact
          that the guaranteed bond is transferable provides the opportunity
          of raising considerable capital on the financial market.
   (c)  The arrangements are supplemented by a post-reform scheme, which is
        optional for the Member State.  This scheme, based on the^
        provisions of the compulsory programme, is intended to replace the
        national restructuring programmes provided for under the existing
        rules.
3. Reduction of institutional prices
   (a)  It is proposed to reduce prices on 1 July 1993, since it is
        specified in the recitals that the proposed reduction is linked to
        the reduction in the prices of cereals and concentrates.
   (b)  Prices are fixed in a multiannua I framework.
        The question arises of whether the prices, once fixed, can or
        cannot be adjusted:
        - upwards, to the advantage of producers, without difficulty on the
          basis of Article 43 of the Treaty, which is the legal basis for
          the proposal ;
        - downwards, on the basis of the same Article, but explicit
          provision should be made for this eventuality already at this
          stage so as not to run up against the principle of legitimate
          expectat ions.
   (c)  This proposal, which confirms and broadens the price policy
        followed since the accession of Spain and Portugal, further
        postpones the alignment provided for in the Treaty of the price of
        skimmed-milk powder in Portugal on the common price.   In order not
        to widen the existing gap of ECU 37.57/100 kg, it is proposed that
        the relevant arrangements in the Act of Accession should be adapted
        and the principle should be adopted of aligning the prices of
        skimmed-milk powder in Portugal on the common price in stages.
                                                                            4
 ---pagebreak---                                    - 4 -
4. Dairy cow premium
   The scheme is to be implemented from 1 January 1993, with conditions
   very similar to those fixed in the beef/sheep sector, to offset the
   effects of the fall In the milk price on the least intensive dairy
   holdings.
5. Promotion of milk and milk products
   The proposal creates the legal basis and provides for the financing of
   promotional measures adopted by the Commission, on the same lines as the
   procedure followed in the case of olive oil.
B. SIMULTANEOUS SIMPLIFICATION OF THE RULES
The Commission has three objectives:
-  to restore legal certainty, which has been eroded by countless
   amendments of the rules;
-  to enhance individual rights and strengthen their protection;
-  to improve the operation of the scheme.
To this end, the Commission proposes:
1. To group the basic principles
                                     i
   Parliament has repeatedly asked for the rules to be consolidated, and
   both the Commission and the Council accept this in principle.  Such a
   proposal will be of even greater benefit to the legal certainty of
   producers if the rules can be simplified.  To this end, taking account
                                                                            $
 ---pagebreak---    of Article 145 of the Treaty as amended by the Single Act, the
   Commission proposes to group the basic principles and the general rules
   in a single regulation providing for a delegation of powers to adopt the
   implementing rules.  This is the regulation referred to at A.1 above.
2. Removal of obsolete historical references, consolidation of the Member
   States' total quantities at the level available for 1991/92, including
   the quantities from the Community reserve, which can then be abolished,
   and determination of Individual reference quantities on the basis of the
   quantities available on 31.3.1992.
   As the scheme has developed over time through successive one-off
   adjustments of differing degrees of importance it has become more
   nuanced and harder for the Member States to apply; in some cases
   producers have had major problems in understanding the law, as
   Parliament emphasized in its resolution A3-41/91 on an assessment and
   forecast of the Community's dairy policy 1 . After almost eight years of
   application of the scheme, thanks in particular to the measures adopted
   by the Council in Regulation (EEC) No 3880/89 following the Commission's
   report on the operation of the quota system in the milk sector (COM (89)
   352), it is reasonable to state that the special situation of certain
   producers during the reference year (1983 in most Member States) was
   adequately taken into account by all the Member states.   Therefore, the
   reference quantities available to producers on 31 March 1992 should be
   consolidated into basic quantities on the basis of which the individual
   reference quantities will be determined; provisions should be adopted to
   specify the terms on which the said quantities must or may be reduced or
   increased under the extended scheme.  There is no point in keeping the
   principle of a Community reserve, which was created to facilitate the
   implementation of the scheme in Member States with difficulties.   Once
   the quantity which made up the reserve has been incorporated into the
   different total quantities concerned, it can be abolished.
1  0J No C 106, 22.4.1991, p. 52.
 ---pagebreak---                                     _6-
3. Uniform implementation of the scheme by replacing formulas A and B by a
   single formula AB, to be applied universally, so that overruns can be
   evened out at the level of the first buyer or group of buyers.
   In order to make full use of experience gained and in the interests of
   simplification and clarification with a view to ensuring the legal
   certainty of producers, the basic rules of the extended scheme should be
   laid down and their scope and diversity should at the same time be
   reduced.   It is particularly necessary to establish uniform application
   of the scheme in the texts since in practice this has already happened.
   The levy is either paid by the purchaser, who recoups it from the milk
   price, or collected by the purchaser on the price paid to the producer
   and the rate of the levy was aligned for the two formulas in 1988.
   The new, single formula should, therefore, be based on the sole
   principle that the levy payable by the producers is paid by the
   purchaser, who recoups it in the price paid for the milk.   In order to
   keep management of the scheme fairly flexible, and because the buyer is
   in the best position to carry out the necessary operations, in
   accordance with the above-mentioned Parliament resolution provision is
   made for overruns to be shared out over all the individual reference
   quantities within the collection area or, in the case of groups of
   purchasers, the creation of which has also been made easier, within the
   same geographical area.
4. A single levy rate for deliveries and direct sales.
   Setting a single levy rate at 115% of the target price is Justified on
   condition that, taking account of point 6 below, the producer who so
   requests is granted an increase in one reference quantity when there is
   a commensurate reduction in the other reference quantity.
                                                                            1
 ---pagebreak---                                     - 7 -
5. The extension to all producers of the right to transfer, for a twelve-
   month period, that part of the reference quantity which the producer to
   whom It Is available does not intend to use and the subsequent
   discontinuation of the evening out of overruns at national level at the
   end of the period, It being understood that all producers benefit from
   the evening out operation within the collection area or, in the case of
   groups of purchasers, within the same geographical area (taking account
   of point 3 above).
   Until now, the option of authorizing temporary transfers of part of the
   reference quantity has been left to the discretion of the Member States.
   An increasing number of Member States have authorized such transfers, or
   intend to do so.   Experience has shown that this is a major improvement
   to the scheme both at individual level and for the operation of the
   scheme.   This possibility should therefore be enjoyed by all producers,
   for the following reasons in particular:
   (a)  at the level of individual producers:
        - a producer who is unable to produce normally for reasons of
           health, family, etc. can obtain financial compensation if he
           temporarily transfers the part of the quantity which he cannot
           use;
        - for producers who are able to produce more than the reference
           quantity available to them, temporary transfers give them both
           the required flexibility and certainty regarding the quantities
           that they can produce without having to pay the additional levy.
   (b) At the level of the operation of the scheme, temporary transfers
        work in the opposite way from the evening out of overruns at
        national level:
        - temporary transfers take place during the period, well before the
          end, while the national evening out exercise can take place only
          after the end of the period, often a long time afterwards; this
          delays the calculation and collection of the levy and makes it
          difficult to comply with the deadlines laid down in the rules;
 ---pagebreak---                                     - 8 -
        - temporary transfers enable producers who are unable to produce
          normally to receive compensation, while the national evening out
          arrangements give undue advantage to producers responsible for
          surpluses, without providing compensation for the others; this
          undermines the effectiveness of the levy as a tool for
          controlling production.
6. Definitive transfer, at the request of the producer, of individual
   reference quantities for "direct sales" to quantities for "deliveries",
   or vice versa, and corresponding adjustment of the total quantities of
   the Member States.
   Structurai trends in milk marketing methods show a decline in direct
   sales which must be taken into account under the extended scheme in
   order not to unfairly penalize producers affected by this trend after
   eight years of milk quotas.   It is therefore proposed that the total
   quantities of the Member States be adjusted no longer on the basis of
   statistical data but on the basis of a duly Justified request by the
   producers concerned.
7. Groups of producers are no longer to be considered as producers.
   Experience has shown that this possibility is not only a factor which
   hinders the operation of the scheme, since the purchaser who is really
   in the best position to carry out all the operations required for its
   administration, if not the only one able to do so, is debarred, but is
   also damaging to the individual rights of producers whose legal
   existence is no longer recognized.
                                                                           <\
 ---pagebreak---                                       Draft
                                 Proposal for a
                      COUNCIL REGULATION (EEC) No     /..
                                   of
                  amending Regulation (EEC) No 804/68 on the
         common organization of the market in milk and milk products
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 proposal from the Commission1,
Having regard to the opinion of the European Parliament2,
Whereas Article 5b of Council Regulation (EEC) No 804/68 of 27 June 1968 on
the common organization of the market in milk and milk products 3 , as last
amended by Regulation (EEC) No 1630/914, provides for the annual fixing of
a guarantee threshold for milk; whereas the additional levy introduced by
Article 5c of the said Regulation has a comparable objective and has de
facto taken over the function of Article 5b, which should therefore be
repealed;
Whereas in the interests of simplification and clarification, it would be
preferable as a matter of good legislative practice to set out the basic
provisions governing the additional levy in a separate Regulation; whereas,
to this end, Article 5c of Regulation (EEC) No 804/68 should therefore be
amended,
HAS ADOPTED THIS REGULATION:
1   0J No L
2   OJ No L
3   OJ No L 148, 28.6.1968, p. 13.
4   OJ No L 150, 15.6.1991, p.19.
                                                                            Ao
 ---pagebreak---                                      -2-
                                 Articie 1
Regulation (EEC) No 804 is hereby amended as follows:
1. Article 5b is repealed.
2. Article 5c is replaced by the following:
   "The price system is established without prejudice to the implementation
   of the additional levy Introduced in Regulation (EEC) No      /.."5
                                  Article Z
This Regulation shall enter into force on the third day following its
publication in the Official Journal of the European Communities.
It shall apply from 1 April 1992.
        This Regulation shall be binding in its entirety and directly
        applicable in all Member States.
Done at ... ,                                            For the Council
                                                         The President
5  See page ... of this edition of the Official Journal.
                                                                           M
 ---pagebreak---                                      Proposal for a
                         COUNCIL REGULATION (EEC) No      /91
                                           Of
         establishing an additional levy in the milk and milk products sector
THE COUNCIL OF THE EUROPEAN COMMUNITIES,
                                   t
Having regard to the Treaty establishing the European Economic Community, and in
particular Article 43 thereof,
Having regard to the proposal from the Commission,1
Having regard to the opinion of the European Parliament,2
Whereas pursuant to Council Regulation (EEC) No 856/84 amending Regulation (EEC) No
804/68 on the common organization of the market in milk and milk products 3 an
additional levy was introduced from 2 April 1984 in the said sector; whereas the
purpose of this scheme, introduced for eight years and due to expire on 31 March
1992, was to reduce the imbalance between supply and demand on the milk and milk
products market and the resulting structural surpluses; whereas it has made a major
contribution to the reduction in milk production but remains necessary in order to
achieve a better market balance; whereas the additional levy should therefore
continue to be applied for eight further consecutive twelve-month periods starting on
1 April 1992;
Whereas, in order to make full use of the experience gained in this area and in the
interests of simplification and clarification with a view to ensuring the legal
certainty of producers and other parties concerned, the basic rules of the extended
scheme should be laid down in a separate regulation, their scope and diversity should
at the same time be reduced and Council Regulation (EEC) No 857/84 laying down
1 OJ No L,
2 OJ No L
3 OJ No L 90, 1.4.1984, p. 10
                                                                                      A^
 ---pagebreak---                                          - 2 -
general rules for the application of the levy referred to in Article 5c of Regulation
(EEC) No 804 in the milk and milk products sector4, as last amended by Regulation
(EEC) No 1639/915, should be repealed;   whereas the Commission must be granted
direct competence to implement the principles thus laid down;
Whereas the method adopted in 1984, consisting of the application of a levy to
quantities of milk collected or sold for direct consumption above a certain guarantee
threshold, must be maintained;   whereas the said threshold is expressed for each
Member State by a guaranteed total quantity which may not be exceeded by the sum of
the individually allocated quantities for both deliveries and sales for direct
consumption; whereas the quantities are established for the next eight periods and
take account of various factors relating either to the scheme in the past or to
provisions which need to be made for the future;
Whereas because of the market situation it was necessary temporarily to suspend part
of the reference quantities from the fourth twelve-month period, pursuant to
Regulation (EEC) No 775/876, as last amended by Regulation (EEC) No 3643/907;
whereas degressive compensation was granted to producers during five years in respect
of the suspended quantities; whereas because of persisting surpluses the suspension
of 4.5% of the reference quantities for deliveries must be converted to a definitive
reduction in the guaranteed total quantities;
Whereas a Community reserve was created at the start of the scheme to take account of
the difficulties created for certain Member States by the implementation of a scheme
for controlling milk production; whereas the said reserve has been increased several
times to meet the special needs of certain Member States and certain producers;
whereas in the light of this experience the various parts of the Community reserve
should be incorporated into the guaranteed total quantities and the reserve be
abolished;
4 OJ No L  90, 1.4.1984, p. 13.
5 OJ No L  150, 15.6.1991, p. 35.
6 OJ No L  78, 20.3.1987, p. 5.
7 OJ No L  362, 27.12.1990, p. 9.
                                                                                      A3
 ---pagebreak---                                         - 3 -
Whereas, given the imperative need to achieve a balance between supply and demand, a
further reduction of 3% in the reference quantities for the Member States, which must
share the burden of the required effort, cannot be avoided;  whereas, in view of the
consequences for the beef sector, this reduction must be spread over the three
twelve-month periods of 1992/93, 1993/94 and 1994/95;
Whereas the individual reference quantity should be defined as the quantity available
on 31 March 1992, the expiry date of the eight initial periods of application of the
levy scheme; whereas the principles or provisions pursuant to which the said quantity
must or may be reduced or increased under the extended scheme should be specified;
Whereas, therefore, under the rules for determining the individual reference
quantities, account should be taken, on the one hand, of producers who have
provisionally received a specific quantity under the old scheme and, on the other
hand, in accordance with the new guidelines of the common agricultural policy, of the
special situation of certain producers in any future allocation of additional or
specific reference quantities, within the limits of the guaranteed total quantity,
and particularly of young farmers, producers producing quality products which can be
directly marketed and producers engaged in an agri-environmenta I programme, including
those preserving genetic diversity by farming local breeds;
Whereas a producer should be entitled to have a reference quantity increased or
established where another is reduced or abolished commensurately, on condition that
the request is duly Justified by the need to take account of definitive changes in
his marketing requirements;
Whereas the temporary transfer of parts of individual reference quantities in Member
States which have authorized this has proven to be an improvement to the scheme;
whereas this facility should therefore be extended to all producers;
                                                                                       4H
 ---pagebreak---                                          - 4 -
Whereas the levy on deliveries and on sales for direct consumption should be fixed at
115% of the target price for milk; whereas, irrespective of the difficulties in
monitoring direct sales, a difference in rates is not Justified if producers can
obtain an increase in one quantity following a commensurate reduction in the other;
Whereas, in the case of deliveries, the levy due from producers must be paid by the
purchaser and recouped by him from the price paid for the milk; whereas the purchaser
is in the best position to carry out the necessary operations; whereas, in order to
keep the management of the scheme sufficiently flexible, provision should be made for
 individual overruns to be equalled out over all the individual reference quantities
within a collection area or, in the case of groups of purchasers, within the same
geographical area;
Whereas, under Article 12(c) of Regulation (EEC) No 857/84, producer groups and
associations thereof were considered as producers; whereas, under Article 7 of this
Regulation, provision should again be made for such an option, but for a limited
period and provided that it is implemented only to permit the structural and
administrative adjustments required for the application of ordinary law and respects
the rights of the individual producers;
Whereas the purpose of the levy provided for in this Regulation is to stabilize the
market in milk products; whereas the revenue accruing from this Regulation should
therefore be used for financing expenditure in the milk sector,
HAS ADOPTED THIS REGULATION:
                                       Article 1
During eight further consecutive twelve-month periods beginning on 1 April 1992, an
additional levy shall be payable by producers of cows' milk on the quantities of milk
or milk equivalent delivered to a purchaser or sold for direct consumption during a
twelve-month period in excess of a quantity to be determined.
The levy is hereby fixed at 115% of the target price for milk.
                                                                                      ^
 ---pagebreak---                                          - 5 -
                                       Article 2
1.   In the case of deliveries, the purchaser shall pay the levy due from the
     producers on the quantities of milk or milk equivalent delivered to him during
     the twelve-month period in excess of the sum of the Individual reference
     quantities available to the producers concerned.
     The purchaser shall recoup the levy from the price paid for the period concerned
     to the producers contributing to the overrun, after sharing out the excess
     quantities between the other producers, in proportion to the individual reference
     quantities to which they are entitled.
2.   In the case of direct sales, the producer shall pay to the competent body of the
     Member State the levy due on the quantities of milk or milk equivalent sold for
     direct consumption during the twelve-month period in excess of the reference
     quantity to which he is entitled.
                                       Article 3
The sum of the individual reference quantities may not exceed the following total
quantities expressed in thousands of tonnes:
1.   for the twelve-month period from 1 April 1992 to 31 March 1993:
                                         Deliveries             Direct sales
   Belgium                                2 887.610                  369.461
   Denmark                                4 379.010                    0.941
   Germany                               27 247.211                  148.538
   Greece                                   520.615                    4.483
   Spain                                  4 411.750                  511.781
   France                                23 106.457                  725.496
   Ireland                                5 146.558                   15.058
   Italy                                  8 224.210                  710.691
   Luxembourg                               263.849                    0.941
   Netherlands                           10 769.091                   89.404
   Portugal                               1 725.410                  117.394
   United Kingdom                        13 976.184                  372.133
                                                                                       yf (?
 ---pagebreak---                                         - 6 -
2. for the twelve-month period from 1 April 1993 to 31 March 1994:
                                        Deliveries             Direct sales
  Belgium                                2 855.500                 365.729
  Denmark                                4 330.190                   0.932
  Germany                               26 944.941                 147.037
  Greece                                   515.245                   4.437
  Spain                                  4 365.250                 506.611
  France                                22 850.117                 718.168
  Ireland                                5 093.758                  14.906
  Italy                                  8 136.230                 703.513
  Luxembourg                               261.199                   0.932
  Netherlands                           10 649.301                  88.501
  Portugal                               1 707.620                 116.208
  United Kingdom                        13 822.888                 368.374
3. For each of the six twelve-month periods from 1 April 1994 to 31 March 2000:
                                        Deliveries             Direct sales
  Belgium                                2 823.390                 361.997
  Denmark                                4 281.370                   0.922
  Germany                               26 642.671                 145.537
  Greece                                   509.875                   4.392
  Spain                                  4 318.750                 501.442
  France                                22 593.777                 710.839
  Ireland                                5 040.958                  14.754
  Italy                                  8 048.250                 696.334
  Luxembourg                               258.549                   0.922
  Netherlands                           10 529.511                  87.598
  Portugal                               1 689.830                 115.023
  United Kingdom                        13 669.593                 364.615
                                                                                J*
 ---pagebreak---                                          - 7 -
                                       Article 4
1.  The individual reference quantity available to a holding shall be equal to the
    quantity available on 31 March 1992, increased where applicable pursuant to
    Article 2(4) of Regulation (EEC) No 1637/91 8 and/or Article 6(2) of this
    Regulation and adjusted so as not to exceed the total quantities fixed in Article
    3, without prejudice to the application of Article 6.
2.  An individual reference quantity shall be increased or established at the
    producer's duly Justified request to take account of definitive changes affecting
    his deliveries and/or direct sales.   The increase or establishment of a reference
    quantity shall be subject to the reduction or abolition of the other reference
    quant ity.
    Such adjustments may not lead to an increase, for the Member State concerned, in
    the sum of the quantities for deliveries and direct sales   fixed in Article 3.
    These quantities shall be adjusted in accordance with the procedure laid down in
    Art icle 9.
3.  If a   producer who has provisionally been awarded a specific individual reference
    quantity pursuant to the last subparagraph of Article 3a(1) of Regulation (EEC)
    No 857/84 can prove before 1 July 1993, to the satisfaction of the competent
    authority, that he has actually resumed direct sales and/or deliveries and that
    the direct sales and/or deliveries totalled not less than 8 0 % of the provisional
    reference quantity in the preceding twelve months, the specific reference
    quantity shall be definitively allocated to him.   Otherwise, the reference
    quantity definitively allocated shall be equal to the quantity actually delivered
    or sold directly.
    The level of actual direct sales and/or deliveries shall be determined in the
    light of the trend of production on the producer's holding, seasonal conditions
    and any exceptional circumstances.
8 OJ No L 150, 15.6.1991, p. 30.
                                                                                       \S
 ---pagebreak---                                          - 8 -
                                       Art icle 5
Member States shall authorize, before a date to be determined and for the full
duration of the twelve-month period concerned, temporary transfers of that part of
the individual reference quantity which the producer who is entitled thereto does not
Intend to use.   However, the reference quantities referred to in Article 4(3) may not
be the subject of such temporary transfers until 31 March 1995.
Member States may differentiate the transfer operations on the basis of producer
categories or the milk production structure and restrict them to the regions or
collecting areas concerned.
It shall be determined in accordance with the procedure referred to in Article 9
whether and to what extent the transferer may renew transfer operations.
                                       Art icle 6
1.  When determining the individual reference quantities referred to in Article 4,
    Member States shall award additional or specific reference quantities within the
     limits of the total quantities fixed in Article 3, giving priority to extensive
    holdings in areas as defined in Article 3(3), (4) and (5) of Directive
    75/268/EEC9, as last amended by Regulation (EEC) No 797/85 10 , and thereafter
    to other areas and, where appropriate, to producers designated in accordance
    with the procedure referred to in Article 9.
     'Extensive holding' means a holding on which the stocking density does not
    exceed the rates fixed in the first subparagraph of Article 2(1) of Regulation
                    11
     (EEC) No
9 OJ No L 128, 19.5.1975, p. 1.
10 OJ No L 93, 30.3.1985, p. 1.
11 OJ No L
                                                                                       tf
 ---pagebreak---                                            - 9 -
2.  At the beginning of the period from 1 April 1992 to 31 March 1993, Member States
    shall, in accordance with paragraph 1, award the following quantities (in
    thousands of t o n n e s ) :
      Be I g i urn                32.110
      Denmark                     48.820
      Germany                    302.270
      Greece                       5.370
      Spain                       46.500
      France                     256.340
      Ireland                     52.800
      Italy                       87.980
      Luxembourg                   2.650
      Nether lands               119.790
      Portugal                    17.790
      United Kingdom             153.296
                                         Art icle 7
For the purposes of this Regulation:
(a) 'milk' means the product of the milking of one or more cows;
(b) 'other milk products' means, in particular, cream, butter and cheese;
(c) 'producer' means a farmer, whether a natural or a legal person or group of
    natural or legal persons, whose holding is located within the geographical
    territory of the Community:
    - who sells milk or other milk products directly to the consumer and/or
    - delivers to a purchaser;
    Until the end of the tenth period of the scheme, producer groups and associations
    thereof recognized under Regulation (EEC) No 1360/78 and under whose internal
    rules the members are subject to the obligation referred to in the first  indent
    of Article 6(1)(c) of that Regulation may be considered as producers;
                                                                                      &
 ---pagebreak---                                         - 10 -
(d) 'holding' means all the production units operated by the producer and located
    within the geographical territory of the Community;
(e) 'purchaser' means a firm or group which purchases milk or other milk products:
    - to treat or process them, or
    - to sell them to one or more firms treating or processing milk or other milk
      products.
    However, any group of purchasers in the same geographical area which carries out
    administrative and accounting operations on behalf of its members shall be
    regarded as a purchaser, provided that:
    - the quantity collected by each member is less than 250 tonnes of milk per day,
    - the average annual quantity collected by the members is less than 50 tonnes per
      day, and
    - the total quantity collected by the group is less than 2 000 000 tonnes of milk
      per year;
(f) 'milk or milk product treatment or processing firm' means a firm or group which
    treats or processes milk or other milk products or whose dairying activities are
    restricted to collection, packaging, storage and chilling or to one of these
    operat ions;
(g) 'delivery' means any delivery of milk or milk products whether the transport is
    carried out by a producer, a purchaser, a milk or milk product treatment or
    processing firm or a third party-,
(h) 'milk or milk equivalent sold directly for consumption' means milk or milk
    products converted to milk equivalent, sold without passing through a milk or
    milk product treatment or processing firm.
                                                                                      1
 ---pagebreak---                                          - 11 -
                                       Article 8
The levy shall be considered as intervention to stabilize agricultural markets and
shall be used to finance expenditure in the milk sector.
                                       Art icle 9
Detailed rules for the application of this Regulation shall be adopted in accordance
with the procedure laid down in Article 30 of Regulation (EEC) No 8 0 4 / 6 8 1 2 .
                                      Article 10
Regulation (EEC) No 857/84 is hereby repealed.
                                      Article 11
This Regulation shall enter into force on the third day following its publication in
the Official Journal of the European Communities.
It shall apply from 1 April 1992.
This Regulation shall be binding in its entirety and directly applicable in all
Member States.
Done at Brussels                                          For the Council
12 OJ No L 148, 28.6.1968, p. 13.
                                                                                     2
 ---pagebreak---  ---pagebreak---                                   Proposal for
                       COUNCIL REGULATION (EEC) No   /91
                                       of
               setting compensation for reduction of individual
                  milk reference quantities and for definitive
                       discontinuation of milk production
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 proposal from the Commission1,
Having regard to the opinion of the European Parliament2,
Whereas changes in the milk market necessitate a further 3% reduction in
the total quantities set by Article 3 of Council Regulation (EEC)
No      /.. establishing an additional levy in the milk and milk products
      3
sector ; whereas the reduction is staggered over three 12-month periods;
whereas to offset the resulting reduction In individual reference
quantities compensation of ECU 5 per 100 kilograms per year should be
granted for ten years, in proportion to the adjustment required of
producers during each of the three forthcoming 12-month periods, payable in
the form of transferable bonds guaranteed by the Community and by the
Member State and realizable on the market; whereas maximum compensation is
however restricted to 4% of the reference quantity available; whereas
Member States may increase the compensation on their own account;
Whereas, however, a reduction in the reference quantities of small and
medium-sized holdings must be avoided; whereas to secure the release of the
eference quantities that can be assigned to such holdings, a Community
scheme should be established for financing discontinuation of milk
production under which any producer applying will, provided that he meets
1  OJ No L      ,          , p.
2  OJ No L                , p.
3  OJ No L    ,           , p.
                                                                            Z3
 ---pagebreak---                                    - 2 -
certain conditions of eligibility, be paid compensation following total and
permanent cessation of milk production; whereas Member States must take the
existence of farm leases into consideration;
Whereas compensation for discontinuation of milk production will normally
be granted on the entire reference quantity; whereas in certain cases,
however, this entitlement should be restricted, it being understood that
producers will be excluded if they have benefited under Article 3c of
Council Regulation (EEC) No 857/84 adopting general rules for the
application of the levy referred to in Article 5c of Regulation (EEC)
No 804/68 in the milk and milk products sector4, as last amended by
Regulation (EEC) No 1639/915;
Whereas experence indicates that the compensation for abandonment of milk
production may be set at ECU 17 per 100 kilograms per year for three years,
payable in the form of transferable bonds and realizable on the market;
whereas it may prove necessary to increase the compensation; whereas Member
States should therefore be authorized to grant additional compensation,
which may be varied to take account of regional differences;
Whereas the reference quantities so freed must be reallocated to small and
medium-sized holdings in order to prevent their reference quantities from
falling; whereas Community financing of the compensation for abandonment of
milk production must be restricted to these reassignment requirements;
Whereas, beyond this objective, which relates to the ninth, tenth and
eleventh periods, Member States considering it necessary to continue
assignment of reference quantities as provided for in Article 6 of
Regulation (EEC) No     should be permitted to maintain for the following
periods a scheme for financing discontinuation of milk production involving
a Community contribution of 50% of the compensation set by the Member State
up to a maximum of ECU 2.5 per 100 kilograms per year for ten years;
whereas if appropriate, in order to facilitate the reduction in deliveries
and direct sales that reduction of the guaranteed total quantities implies,
the reference quantities released under this scheme may remain unallocated;
4  0J No L 90, 1.4.1984, p. 13.
5  0J No L 150, 15.6.1991, p. 35.
                                                                            24
 ---pagebreak---                                     - 3 -
Whereas the purpose of Community compensation is to reestablish balance on
the market and it may therefore be considered as intervention within the
meaning of Article 3 of Council Regulation (EEC) No 729/70 of 21 April 1970
on the financing of the common agricultural policy6, as last amended by
Regulation (EEC) No 2048/887,
HAS ADOPTED THIS REGULATION:
                                  Art icle 1
1. From the ninth 12-month period of application of the additional levy
scheme established by Regulation (EEC) No ..../.., compensation shall be
granted to producers whose reference quantity is reduced pursuant to
Article 4(1) of that Regulation.
2. The compensation shall:
   a)   amount to ECU 5 per 100 kilograms per year;
   b)   be granted on the actual reduction in the individual reference
        quantity available on 31 March 1992, where appropriate plus the
        quantities reallocated under Article 2(4) of Regulation (EEC)
        No 1637/916 and corrected for any reference quantity transfers
        since then; It may not exceed a maximum corresponding to 2%, 3% and
        4% of that quantity respectively for the ninth, tenth and eleventh
        12-month periods and for the following periods;
   c)   shall be paid in the form of guaranteed transferable bonds
        realizable on the market, payable in ten annual instalments from
        1993 onwards, between 1 April and 30 September of each year.
6  0J No L 94, 28.4.1970, p. 13.
7  0J No L 185, 15.7.1988, p. 1.
8  OJ No L 150, 15.6.1991, p. 30.
                                                                            ZS
 ---pagebreak---                                     - 4 -
                                  Art icle 2
1. At the request of the party concerned and subject to the terms of this
Article, Member States shall grant to any producer as defined in
Article 7(c) of Regulation (EEC) No       /.. who undertakes to discontinue
milk production totally and permanently before a date to be determined
compensation in the form of guaranteed transferable bonds realizable on the
market, payable in three annual instalments from 1993, between 1 April and
30 September of each year.
2. a)   Producers shall be eligible if they or the reference quantity for
        deliveries or direct sales, unless they have received quantities
        under Article 3c of Regulation (EEC) No 857/84.
   Member States, however:
        may decide not to grant compensation to producers with less than
        six dairy cows or whose reference quantity is less than
        25 000 kilograms per year,
        are authorized to act as necessary to ensure that the quantity
        reductions made under this Regulation are distributed as
        consistently as possible between regions and collection areas.
   b)   Compensation shall be granted for the reference quantity held at
        the end of the 12-month period concerned, excluding for the ninth
        and tenth periods quantities allocated under the last subparagraph
        of Article 3a(1) of Regulation (EEC) No 857/84.
   c)    If a producer has two reference quant itites, one for deliveries and
        one for direct sales, compensation shall be granted on both.
   d)    If the holding is held on a lease the application for compensation
        shall be made by the lessee.
                                                                              zé>
 ---pagebreak---                                     - 5 -
        Member states shall determine on what terms the lessee may make the
        application and compensation be granted.
   e)   The compensation shall be ECU 17 per 100 kilograms per year and may
        be supplemented by the Member State acting on its own account.
        The supplement may be differentiated by Member State to take
        account of local differences in:
                the trend of milk production
                the average size of producer deliveries
                the need not to hinder restructuring of milk production
                the potential for change to other products
                location of milk production in areas as defined in
                Article 3(3), (4) and (5) of Council Directive 75/268/EEC
                of 28 April 1975 on mountain and hill farming and farming
                 in certain less favoured areas9, as last amended by
                Regulation (EEC) No 797/85 10 .
                                  Art icle 3
Reference quantities released pursuant to Article 2 shall be reallocated,
up to the level of the volume on which compensation as provided for in
Article 1 is granted, to producers whose reference quantity remains below
200 000 kilograms, on condition that the amount of compensation still due
corresponding to the reallocated quantity is relinquished.
9 0J No L 128, 19.5.1975, p. 1.
10 0J No L 93, 30.3.1985, p. 1.
                                                                            ?>
 ---pagebreak---                                    - 6
                                 Article 4
Community financing of the compensation provided for in Article 2 is, for
the ninth, tenth and eleventh 12-month periods, restricted to the
reallocation requirements indicated in Article 3.
                                 Article §
1. From the end of the twelfth 12-month period until the additional levy
scheme is terminated Member States may, on request by the party concerned
and on the terms set out in Article 2, grant producers as defined in that
Article compensation in the form of transferable bonds guaranteed by the
Community and the Member State and realizable on the market, payable in ten
annual instalments from 1996, between 1 April and 30 September of each
year.
2. Member States shall set the amount of the compensation, which may be
differentiated in line with one or more of the criteria set out in the
second subparagraph of Article 2(2)(e).
The Community contribution shall be restricted to 50% of the compensation
granted and to a maximum contribution of ECU 2.5 per 100 kilograms per year
for ten years.
3. Reference quantities released pursuant to this Article shall be
reallocated as provided for in Article 6(1) of Regulation (EEC) No .../..
or, if appropriate, shall not be reallocated.
                                 Article 6
Financing of Community compensation as provided for in Articles 1, 2 and 5
shall be considered as intervention within the meaning of Article 3 of
Regulation (EEC) No 729/70.
                                                                            ^*
 ---pagebreak---                                     - 7 -
                                 Article 7
Member States shall pass to the Commission, each year before 1 April, all
information needed to assess the effectiveness of the measures contained in
this Régulât ion.
                                  Article 8
The Commission, in accordance with the procedure laid down in Article 30 of
Regulation (EEC) No 804/68, shall adopt measures for the application of
this Regulation.
                                 Article 9
This Regulation shall enter into force on the third day following its
publication in the Official Journal of the European Communities.
It shall apply from 1 April 1992.
This Regulation shall be binding in its entirety and directly applicable in
a 11 Member States.
Done at                                         For the Council
                                                The President
                                                                            if
 ---pagebreak---  ---pagebreak---                                 Proposal fçr a,
                    COUNCIL REGULATION (EEC) No        /91
                                      of
        fixing the target price for milk and the intervention prices
            for butter, skimmed-milk powder and Grana Padano and
            Parmigiano Reggiano cheeses for three annual periods
                       from 1 July 1993 to 30 June 1996
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 234(3) thereof,
Having regard to the proposal from the Commission,1
Having regard to the opinion of the European Parliament,2
Whereas the policy adopted by the Community since accession as regards
prices and, in particular, the introduction of the system of agricultural
stabilizers and the new guidelines for the common agricultural policy
cannot bring about, in the manner provided for in Article 285 of the Act of
Accession, the process of alignment of the prices of skimmed-milk powder in
Portugal on the common price;    whereas the common price was fixed for the
1991/92 marketing year at ECU 172.43/100 kg and the Portuguese prices for
the same period at ECU 210/100 kg on the mainland and at ECU 207/100 kg in
the Azores;   whereas in order that the existing gap between these prices
should not be widened but, on the contrary, closed, the relevant
arrangements in the Act of Accession should be adapted;    whereas the
principle should be adopted of aligning the prices of skimmed-milk powder
in Portugal on the common price in stages, once the two Portuguese prices
have been set at the same level;
1  OJ No L         ,        p.
2  OJ No L         ,         , p.
                                                                            30
 ---pagebreak---                                    - 2 -
Whereas, given the pressing need to improve the balance between supply and
demand, it was necessary to extend the additional levy scheme instituted in
the milk and milk products sector and reduce the guaranteed total
quantities fixed under that scheme;  whereas, given the foreseeable
reduction in milk production costs following the fall in the prices of
cereals and concentrates, the target price for milk should be reduced in
order to improve the competitive position of milk products;  whereas,
therefore, the target price for milk must be reduced in relation to other
agricultural products;
Whereas it is, moreover, necessary to take into consideration the long-term
balance between supply and demand on the milk market, account taken of
external trade, and accordingly to fix the target price for milk in a
multiannual framework, without prejudice to subsequent adjustments
necessitated by the market trend;
Whereas the intervention prices for butter and for skimmed-milk powder are
intended to contribute to the achievement of the target price for milk;
whereas it is necessary to determine their levels in the light of the
overall supply and demand situation on the Community milk market and the
opportunities for disposal of butter and skimmed-milk powder on the
Community and world markets;  whereas the competitive position of butter
necessitates a larger reduction in the intervention price for butter than
in the intervention price for skimmed-milk powder;
Whereas it is appropriate that the gap between the prices of skimmed-milk
powder in Portugal and the common price be closed in three stages
corresponding to each of the annual periods covered by the multiannual
framework in which the target price for milk is fixed;  whereas it has been
observed that the level of the market prices obtaining in Portugal for
skimmed-milk powder is such that alignment effected in this way is not
likely to have a negative effect on the said product;
                                                                            3-»
 ---pagebreak---                                    - 3 -
Whereas the intervention prices for Grana Padano and Parmigiano Reggiano
cheeses must be fixed in accordance with the criteria laid down in
Article 5(2) of Council Regulation (EEC) No 804/68 on the common
organization of the market in milk and milk products, 3 as last amended by
Regulation (EEC) No
3  OJ No L 148, 28.6.1968, p.13.
                                                                           3*
 ---pagebreak---  ---pagebreak---                                 -1-
                               Proposal for a
                    COUNCIL REGULATION (EEC) No      /..
                                 of
                   Instituting a dairy cow premium scheme
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 proposal from the Commission1,
Having regard to the opinion of the European Parliament2,
Whereas, given the imperative need to achieve a better balance between
supply and demand, it has become necessary to prolong the additional levy
scheme instituted in the milk and milk products sector and to reduce the
guaranteed total quantities fixed under that scheme and the prices fixed
under the market organization;
Whereas the target price for milk has been reduced along with those for
other agricultural products;  whereas extensive dairy farms may be
adversely affected by the milk price cuts without benefiting from the
reductions in input prices which will be of benefit to intensive dairy
farms;  whereas this situation should be remedied and, in line with the new
direction of the common agricultural policy, encouragement be given to
extensive production systems;
Whereas this may be achieved by grant of an annual premium per dairy cow,
subject to compliance with a maximum stocking density differentiated
according to the location of the holding;  whereas, because of the lower
agricultural potential of the mountain and hill areas and less-favoured
areas, It is impossible to maintain, in extensive farming conditions,
stocking densities comparable to those of other areas;   whereas the
situation of very small-scale producers should be taken into account;
1  OJ No L
2  OJ No L
                                                                            33
 ---pagebreak---                                 -2-
Whereas the amount of the premium must be fixed in relation to the income
loss expected as a result of the reduction of milk prices to be effected in
three stages;
Whereas the sum total of the premiums should be limited to an amount
corresponding to an economically viable holding;
Whereas to facilitate the checking of applications, provision should be
made for dairy cows to be identified by marking;
Whereas this premium scheme will help to restore balance on the market by
encouraging more extensive dairy farming methods;  whereas it may therefore
be regarded as intervention within the meaning of Article 3 of Council
Regulation (EEC) No 729/70 of 21 April 1970 on the financing of the common
agricultural policy3, as last amended by Regulation (EEC) No 2048/884,
HAS ADOPTED THIS REGULATION:
                                 Article 1
1.  On application by interested parties and in accordance with the
conditions laid down herein, Member States may grant an annual premium per
dairy cow for dairy herds kept by producers as defined in Article 7(c) of
Council Regulation (EEC) No ... establishing an additional levy in the milk
and milk products sector5.  However, in each case the premium shall be
paid for not more than 40 dairy cows.
2.  Applications shall be made at the beginning of each calendar year
before a date to be determined.
3  OJ No L 94, 28.4.1970, p. 13.
4  OJ No L 185, 15.7.1988, p. 1.
5
                                                                            M
 ---pagebreak---                                 -3-
                                 Article 2
1.  The premium shall be granted for the calendar year in question provided
that, at all times,  the stocking density on the holding, as referred to in
Article 7(d) of Regulation (EEC) No..., expressed in Livestock Units (LU)
per hectare of forage area (ha), does not exceed the following:
- 1.4 LU/ha for holdings or parts of holdings located in areas as defined
in Article 3(3), (4) and (5) of Directive 75/268/EEC6, as last amended by
Council Regulation (EEC) No 797/857;
- 2 LU/ha for holdings or parts of holdings located elsewhere.
and the number of dairy cows present on the holding is at least equal to
the number for which the premium is applied for.
However, the stocking density requirement shall not apply to producers
whose reference quantity is less than 25 000 kilograms at the start of the
calendar year in question.
2.  The number of LU shall be determined on the basis of the number of
dairy cows, suckler cows, male bovine animals over 6 months and ewes,
converted by reference to the conversion table in Annex I to Regulation
(EEC) No 2328/918;
3.  The forage area means the total area of the holding as referred to in
Article 7(d) of Regulation (EEC) No ..., less any buildings, paths, ponds,
woods, areas used for permanent crops or horticultural crops, or areas
eligible under Regulation (EEC) No . ..9 or used for purposes other than
cattle or sheep rearing and/or qualifying for national or Community aid
other than that referred to in point (a) of the third subparagraph of
Article 2(3) of Regulation (EEC) No 2328/91.
6  OJ No L 128, 19.5.1975, p. 1.
7  OJ No L 93, 30.3.1985, p. 1.
8  OJ No L 218, 6.8.1991, p.1.
9  Arable crops
                                                                            h-
 ---pagebreak--- In addition, the forage area shall include areas Jointly farmed in
accordance with rules to be adopted in accordance with the procedure laid
down in Article 30 of Regulation (EEC) No 804/68 10
                                  Article 3
1.  The amount of the premium per dairy cow is:
- ECU 25 for 1993
- ECU 50 for 1994
- ECU 75 for the following years.
2.  Dairy cows in respect of which the premium is applied for must be
identified by marking in accordance with Regulation (EEC) No 1 1 .
Identification data must be entered on the premium application and in a
special register kept by the producer.
The number of dairy cows for which the premium is applied for shall be
checked by the competent authority, in particular on the basis of the
producer's reference quantity and the average milk yield in the region
concerned.
3.    Except in duly Justified cases, payment must be made as soon as the
checks have been carried out and not later than 30 April of the following
year.
                                  Article 4
Financing of the premium provided for in this Regulation shall be regarded
as intervention within the meaning of Article 3 of Regulation (EEC) No
729/70.
                                  Article 5
Detailed rules for the application of this Regulation, and in particular
concerning checks to ensure compliance with obligations, shall be adopted
by the Commission in accordance with the procedure laid down in Article 30
of Regulation (EEC) No 805/68.
10 0J No L 148, 28.6.1968, p. 13.
11 0J No L .
                                                                           ié
 ---pagebreak---                                 -5-
                                 Article 6
This Regulation shall enter into force on the third day following its
publication in the Official Journal of the European Communities.
It shall apply from 1 January 1993.
This Regulation shall be binding in its entirety and directly applicable in
a 11 Member States.
Done at ... ,                                   For the Council
                                                        The President
                                                                            3>
 ---pagebreak---                                   Proposal
                        COUNCIL REGULATION (EEC) No
                                     of
  on promoting consumption in the Community and expanding the markets for
                           milk and milk products
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 proposal from the Commission1,
Having regard to the opinion of the European Parliament2,
Whereas the market in milk and milk products is affected by the continued
fall in the consumption of certain milk products in the Community; whereas,
in view of the pressing need to attain a better balance between supply and
demand, it has been necessary both to extend the additional levy scheme
introduced in the milk and milk products sector and to reduce the
guaranteed total quantities fixed under that scheme; whereas in order to
improve the competitive position of milk products provision has also been
made for lowering the prices referred to in Title I of Council Regulation
(EEC) No 804/68 of 27 June 1968 on the common organization of the market in
milk and milk products3, as last amended by Regulation (EEC) No        4
                                                                         ;
Whereas specific measures to encourage consumption in the Community and
favour expansion of the markets for milk and milk products may also help to
improve market balance by stimulating demand; whereas these specific
measures should be defined;
1  OJ No L
2  OJ No L
3  OJ No L 148, 28.6.1968, p. 13.
4   OJ No L
                                                                            8
 ---pagebreak---                                    - 2 -
Whereas the provisions of this Regulation have the same objective as
Council Regulation (EEC) No 1079/77 on a co-responsibility levy and on
measures for expanding the market in milk and milk products5, as last
amended by Regulation (EEC) No 1632/916; whereas, therefore, it is not
necessary to extend the application of the said Regulation;
Whereas the purpose of the said provisions is to improve the balance on the
market for milk products; whereas the expenditure incurred under the
specific measures should therefore be considered as intervention within the
meaning of Article 3 of Council Regulation (EEC) No 729/70 of 21 April 1970
on the financing of the common agricultural policy7, as last amended by
Regulation (EEC) No 2048/888,
HAS ADOPTED THIS REGULATION:
5  OJ No L 131, 26.5.1977, p. 6.
6  OJ No L 150, 15.6.1991, p. 23.
7  OJ No L 94, 28.4.1970, p. 13.
8  0J No L 185, 15.7.1988, p. 1.
                                                                            3q
 ---pagebreak---                                     - 3 -
                                  Article 1
1. Measures to promote consumption in the Community and to expand the
   markets for milk and milk products shall be adopted in accordance with
   the procedure laid down in Article 4.
2. The measures referred to in the previous paragraph shall be the
   fol lowing:
   (a)   dissemination within the Community of existing knowledge,
         particularly concerning the nutritional qualities of milk and milk
         products;
   (b)   research concerning, in particular, the nutritional aspects of milk
         and milk products;
   (c)   publicity and promotion campaigns within the Community to encourage
         the consumption of milk and milk products;
   (d)   market studies aimed at expanding the markets for milk and milk
         products.
3. The Commission shall communicate to the Council each year before 1 April
   the programme of measures which it intends to take during the following
   market ing year.
   With a view to programming measures, the Commission may, in particular,
   consult agencies which specialize in market studies and publicity as
   well as research institutes.
                                  Article 2
The expenditure incurred under the measures referred to in Article 1 shall
be considered as intervention within the meaning of Article 3 of Regulation
(EEC) No 729/70.
                                  Article 3
Detailed rules for the application of this Regulation shall be adopted in
accordance with the procedure laid down in Article 30 of Regulation (EEC)
No 804/68.
                                                                            ^0
 ---pagebreak---                                     - 4 -
                                 Art icle 4
This Regulation shall enter into force on the third day following its
publication in the Official Journal of the European Communities.
It shall apply from 1 January 1993.
This Regulation shall be binding in its entirety and directly applicable in
a I I Member States.
Done at Brussels                                        For the Council
                                                        The President
                                                                            k\
 ---pagebreak---                 FINANCIAL IMPLICATIONS OF THE CAP REFORM
                    DURING THE 1993-1997 BUDGET YEARS
                        FOR MILK AND MILK PRODUCTS
The financial  implications of the proposals for Council Regulations:
    amending Regulation (EEC) No 804/68 setting up a common market
    organisation in the sector of milk and milk products;
    fixing the target price for milk and the intervention prices for
    butter, skimmed-milk powder and Grana Padano and Parmigiano
    Reggiano cheeses for three annual periods from 1 July 1993 to 30
    June 1996;
    establishing an additional   levy in the milk and milk products
    sector;
    setting compensation for the reduction of individual milk reference
    quantities and for definitive discontinuation of milk production;
    instituting a dairy cow premium scheme;
    on promoting consumption in the Community and expanding the markets
    for milk and milk products.
                                                                        ^
 ---pagebreak---                             FINANCIAL IMPLICATIONS OF THE REFORM IN THE MILK SECTOR
                         (Financial implications in relation to the 1992 draft budget)
                                                                                                  ECU m (8)
                                                       1993        1994       1995        1996         1997
       withdrawal of basic co-responsibility
        levy and connected promotion measures         +    40     +   265     +   265    +   265     +    265
        10% reduction in the institutional prices
        as a result of the reduction in the price     (-   54)     (- 365)    (-  643)   (-  873)    (-   893)
       of cereals                              (1)
       3% reduction in quotas:
        . implications for milk                       -   289     -   462     -   547    -    523    -    523
        . additional expenditure in beef/veal
          sector as a result of the slaughter of
          da iry cows                                 +   187     +   175     +   164
       compensation for reduction/buying
       back of quaotas:
       * compensation for 4% of quotas in             +   292     +   438     +   584    +   359     +    246
          the form of:
          . discontinuation programme
            (ECU 170/t for 3 years)
          . linear quota reduction
            (ECU 50/t for 10 years)
       * optional discontinuation programme
          with redistribution, applicable
          from the fourth year of the reform                                                p.m.        p.m.
       dairy cow premium (ECU 75/head for all
       cows on holdings producing less than
       25 000 kg and for the first 40 cows on
       each holding observing 1.4 LU/ha of
       forage in less favoured areas and 2 LU/ha
        in other areas)                                           +   468     +   924    + 1.369     + 1.369
    -  promotional campaign for mi Ik products        +    10     +    10     +     10   +     10    +     10
    Total                                             +   240     +   894     + 1.400    + 1.480     + 1.367
(1) The impact of this reduction is not included here since it has already been taken into account in the
    figures for arable crops as a knock-on effect of the cereals reform.
                                                                                                           43
 ---pagebreak---                                                                      ISSN 0254-1475
                                                              COM(91) 409 final
                                                      DOCUMENTS
EN                                                                             03
                                Catalogue number : CB-CO-91-468-EN-C
                                                             ISBN 92-77-76797-9
Office for Official Publications of the European Communities
L-2985 Luxembourg
 ---documentbreak---   COMMISSION OF THE EUROPEAN COMMUNITIES
                                                                 COM(91)409           final / 2
NOUVELLE VERSION                                                  B r u s s e l s , 18 November 1991
Annule e t remplace c e l l e du 3 1 / 1 0 / 9 1
Ne concerne que la v e r s i o n anglaise
                    REFORM OF THE COMMON AGRICULTURAL                                POLICY
                                                 Legal t e x t s
                                                MHk sector .
                                   (presented by the Commission)
 ---pagebreak---                            EXPLANATORY MEMORANDUM
                      Refora of the CAP - Ml Ik sector
In the milk sector, the Commission is implementing the principles set out
in its Communication COM(91) 258 in five proposals for regulations. At the
same time, in order to optimize the conditions for the reform, it is
proposing a radical simplification of the rules in this area.
A. IMPLEMENTATION OF THE PRINCIPLES OF THE REFORM
1. Extension of the milk quota scheme and reduction of the Member States'
   total Quantities
   The Commission is proposing:
   (a) within the framework of a new regulation introducing an additional
        levy, the extension of the milk quota scheme from 1 April 1992 for
        a further period of eight years.   While confirming the transitional
        nature of the scheme, this extension defines a multiannua I
        framework which is adequate to ensure the legal certainty of
        producers and is compatible with both the gradual introduction of
        the reform over three years and the detailed rules for the payment
        of compensation;
   (b)  to convert the suspension of 4.5% of the guaranteed total
        quantities provided for in Regulation (EEC) No 755/87 into a
        definitive reduction.  The continued surplus on this market brooks
        no other choice.  In addition, given the compensation granted over
        the past five years for the suspended quantities, which totals
        ECU 45.5/kg, and the degressive nature of the compensation, the
        reduction in individual reference quantities has already been
        fairly compensated for;
 ---pagebreak---                                    - 2 -
   (c)  entry into force of the first phase of the 4% reduction, with
        redistribution of 1% from 1992/93. Both the surplus situation and
        the analysis carried out when the 2% reduction was introduced, at
        the same time as the agricultural prices were fixed for 1991/92, as
        well as the logic of the quota scheme, which implies that
        production subject to quotas should be closely linked to the
        availability of outlets, require that the reduction should become
        operational as soon as possible, in view of the proposal to phase
        It in gradually.
2. Compensation of the quota reduction, compulsory programme of voluntary
   discontinuation of milk production and optional post-reform scheme
   (a)  The draft differs little from Regulation (EEC) No 1637/91 adopted
        by the Council at the same time as the 1991/92 price proposals.   It
        follows on without interruption.  Community financing of
        discontinuation is not fixed in advance.   It will be restricted to
        reallocation requirements.  Distribution will depend on the number
        of producers producing less than 200 000 kg concerned in each
        Member State.
   (b)  The most innovative aspect is the guaranteed bond system proposed
        for the payment of compensation.  The bond Is used as a means of
        payment.  The main advantages of this system are:
        - a reduction in the administrative workload of the Member States
          linked to the payment of all the compensation to individual
          producers;
        - containment and staggering of Community budget expenditure;
                                                                             ?
 ---pagebreak---                                     - 3 -
        - the producer is guaranteed a fixed annual payment, while the fact
           that the guaranteed bond is transferable provides the opportunity
           of raising considerable capital on the financial market.
   (c)  The arrangements are supplemented by a post-reform scheme, which is
        optional for the Member State.   This scheme, based on the
        provisions of the compulsory programme, is intended to replace the
        national restructuring programmes provided for under the existing
        rules.
3. Reduction of institutional prices
   (a)   It is proposed to reduce prices on 1 July 1993, since it is
        specified in the recitals that the proposed reduction is linked to
        the reduction in the prices of cereals and concentrates.
   (b)  Prices are fixed in a mult(annual framework.
        The question arises of whether the prices, once fixed, can or
        cannot be adjusted:
        - upwards, to the advantage of producers, without difficulty on the
           basis of Article 43 of the Treaty, which is the legal basis for
           the proposal ;
        - downwards, on the basis of the same Article, but explicit
           provision should be made for this eventuality already at this
           stage so as not to run up against the principle of legitimate
           expectations.
   (c)  This proposal, which confirms and broadens the price policy
        followed since the accession of Spain and Portugal, further
        postpones the alignment provided for In the Treaty of the price of
        skimmed-milk powder in Portugal on the common price.   In order not
        to widen the existing gap of ECU 37.57/100 kg, it is proposed that
        the relevant arrangements in the Act of Accession should be adapted
        and the principle should be adopted of aligning the prices of
        skimmed-milk powder in Portugal on the common price in stages.
                                                                             A
 ---pagebreak---                                    ~ 4-
4. Dairy cow premium
   The scheme le to be Implemented from 1 January 1993, with conditions
   very similar to those fixed in the beef/sheep sector, to offset the
   effects of the fall in the milk price on the least intensive dairy
   ho id Ings.
5. Promotion of milk and milk products
   The proposal creates the legal basis and provides for the financing of
   promotional measures adopted by the Commission, on the same lines as the
   procedure followed In the case of olive oil.
B. SIMULTANEOUS SIMPLIFICATION OF THE RULES
The Commission has three objectives:
-  to restore legal certainty, which has been eroded by countless
   amendments of the rules;
-  to enhance individual rights and strengthen their protection;
-  to improve the operation of the scheme.
To this end, the Commission proposes:
1. To group the basic principles
   Parliament has repeatedly asked for the rules to be consolidated, and
   both the Commission and the Council accept this in principle.  Such a
   proposal will be of even greater benefit to the legal certainty of
   producers if the rules can be simplified.  To this end, taking account
                                                                            Ç
 ---pagebreak---    of Article 145 of the Treaty as amended by the Single Act, the
   Commission proposes to group the basic principles and the general rules
    in a single regulation providing for a delegation of powers to adopt the
    implementing rules.  This is the regulation referred to at A.1 above.
2. Removal of obsolete historical references, consolidation of the Member
   States' total quantities at the level available for 1991/92, including
   the quantities from the Community reserve, which can then be abolished,
   and determination of individual reference quantities on the basis of the
   quantities available on 31.3.1992.
   As the scheme has developed over time through successive one-off
   adjustments of differing degrees of importance it has become more
   nuanced and harder for the Member States to apply; In some cases
   producers have had major problems in understanding the law, as
   Parliament emphasized in its resolution A3-41/91 on an assessment and
   forecast of the Community's dairy policy 1 . After almost eight years of
   application of the scheme, thanks in particular to the measures adopted
   by the Council In Regulation (EEC) No 3880/89 following the Commission's
   report on the operation of the quota system in the milk sector (COM (89)
   352), it is reasonable to state that the special situation of certain
   producers during the reference year (1983 in most Member States) was
   adequately taken into account by all the Member States.   Therefore, the
   reference quantities available to producers on 31 March 1992 should be
   consolidated into basic quantities on the basis of which the individual
   reference quantities will be determined; provisions should be adopted to
   specify the terms on which the said quantities must or may be reduced or
   increased under the extended scheme.   There is no point in keeping the
   principle of a Community reserve, which was created to facilitate the
   implementation of the scheme in Member States with difficulties.   Once
   the quantity which made up the reserve has been incorporated into the
   different total quantities concerned, it can be abolished.
1  OJ No C 106, 22.4.1991, p. 52.
 ---pagebreak---                                    - 6-
3. Uniform Implementation of the scheme by replacing formulas A and B by a
   single formula AB, to be applied universally, so that overruns can be
   evened out at the level of the first buyer or group of buyers.
   In order to make full use of experience gained and in the interests of
   simplification and clarification with a view to ensuring the legal
   certainty of producers, the basic rules of the extended scheme should be
   laid down and their scope and diversity should at the same time be
   reduced.  It is particularly necessary to establish uniform application
   of the scheme in the texts since in practice this has already happened.
   The levy is either paid by the purchaser, who recoups it from the milk
   price, or collected by the purchaser on the price paid to the producer
   and the rate of the levy was aligned for the two formulas in 1988.
   The new, single formula should, therefore, be based on the sole
   principle that the levy payable by the producers is paid by the
   purchaser, who recoups it in the price paid for the milk.   In order to
   keep management of the scheme fairly flexible,, and because the buyer is
   in the best position to carry out the necessary operations, in
   accordance with the above-mentioned Parliament resolution provision is
   made for overruns to be shared out over all the individual reference
   quantities within the collection area or, in the case of groups of
   purchasers, the creation of which has also been made easier, within the
   same geographical area.
4. A single levy rate for deliveries and direct sales.
   Setting a single levy rate at 115% of the target price is Justified on
   condition that, taking account of point 6 below, the producer who so
   requests is granted an increase in one reference quantity when there is
   a commensurate reduction in the other reference quantity.
 ---pagebreak---                                     - 7 -
5. The extension to all producers of the right to transfer, for a twelve-
   month period, that part of the reference quantity which the producer to
   whom it Is available does not intend to use and the subsequent
   discontinuation of the evening out of overruns at national level at the
   end of the period, It being understood that all producers benefit from
   the evening out operation within the collection area or, in the case of
   groups of purchasers, within the same geographical area (taking account
   of point 3 above).
   Until now, the option of authorizing temporary transfers of part of the
   reference quantity has been left to the discretion of the Member States.
   An increasing number of Member States have authorized such transfers, or
   intend to do so.   Experience has shown that this is a major improvement
   to the scheme both at individual level and for the operation of the
   scheme.   This possibility should therefore be enjoyed by all producers,
   for the following reasons in particular:
   (a)  at the level of individual producers:
        - a producer who is unable to produce normally for reasons of
           health, family, etc. can obtain financial compensation if he
           temporarily transfers the part of the quantity which he cannot
           use;
        - for producers who are able to produce more than the reference
           quantity available to them, temporary transfers give them both
           the required flexibility and certainty regarding the quantities
           that they can produce without having to pay the additional levy.
   (b)  At the level of the operation of the scheme, temporary transfers
        work in the opposite way from the evening out of overruns at
        national level:
        - temporary transfers take place during the period, well before the
          end, while the national evening out exercise can take place only
          after the end of the period, often a long time afterwards; this
          delays the calculation and collection of the levy and makes it
          difficult to comply with the deadlines laid down in the rules;
                                                                            ?
 ---pagebreak---                                      - 8 -
        - temporary transfers enable producers who are unable to produce
          normally to receive compensation, while the national evening out
          arrangements give undue advantage to producers responsible for
          surpluses, without providing compensation for the others; this
          undermines the effectiveness of the levy as a tool for
          control Iing product ion.
6. Definitive transfer, at the request of the producer, of individual
   reference quantities for "direct sales" to quantities for "deliveries'1,
   or vice versa, and corresponding adjustment of the total quantities of
   the Member States.
   Structural trends in milk marketing methods show a decline in direct
   sales which must be taken into account under the extended scheme in
   order not to unfairly penalize producers affected by this trend after
   eight years of milk quotas.    It Is therefore proposed that the total
   quantities of the Member States be adjusted no longer on the basis of
   statistical data but on the basis of a duly Justified request by the
   producers concerned.
7. Groups of producers are no longer to be considered as producers.
   Experience has shown that this possibility is not only a factor which
   hinders the operation of the scheme, since the purchaser who is really
   in the best position to carry out all the operations required for its
   administration, if not the only one able to do so, is debarred, but is
   also damaging to the individual rights of producers whose legal
   existence is no longer recognized.
 ---pagebreak---                                  Proposal for a
                      COUNCIL REGULATION (EEC) No ..../..
                                   of
                   amending Regulation (EEC) No 804/68 on the
          common organization of the market In milk and milk products
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 proposal from the Commission1,
Having regard to the opinion of the European Parliament2,
Whereas Article 5b of Council Regulation (EEC) No 804/68 of 27 June 1968 on
the common organization of the market in milk and milk products3, as last
amended by Regulation (EEC) No 1630/914, provides for the annual fixing of
a guarantee threshold for milk; whereas the additional levy introduced by
Article 5c of the said Regulation has a comparable objective and has de
facto taken over the function of Article 5b, which should therefore be
repealed;
Whereas in the interests of simplification and clarification, it would be
preferable as a matter of good legislative practice to set out the basic
provisions governing the additional levy in a separate Regulation; whereas,
to this end, Article 5c of Regulation (EEC) No 804/68 should therefore be
amended,
HAS ADOPTED THIS REGULATION:
1   0J No  L
2   0J No  L
3   0J No  L 148, 28.6.1968, p. 13.
4   0J No  L 150, 15.6.1991, p.19.
                                                                           Ao
 ---pagebreak---                                      -2-
                                  Article 1
Regulation (EEC) No 804 is hereby amended as follows:
1. Article Sb Is repealed.
2. Article 5c is replaced by the following:
    "The price system is established without prejudice to the implementation
    of the additional levy introduced in Regulation (EEC) No ..../.. " 5
                                  Article 2
This Regulation shall enter into force on the third day following its
publication in the Official Journal of the European Communities.
 It shall apply from 1 April 1992.
         This Regulation shall be binding In its entirety and directly
         applicable in all Member States.
Done at ... ,                                             For the Council
                                                         The President
5   See page ... of this edition of the Official Journal.
                                                                            j*
 ---pagebreak---                                      Proposal for a
                          COUNCIL REGULATION (EEC) No     /91
                                           of
         establishing an additional levy in the milk and milk products sector
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 proposal from the Commission,1
Having regard to the opinion of the European Parliament,2
Whereas pursuant to Council Regulation (EEC) No 856/84 amending Regulation (EEC) No
804/68 on the common organization of the market in milk and milk products3 an
additional  levy was introduced from 2 April 1984 in the said sector; whereas the
purpose of this scheme, introduced for eight years and due to expire on 31 March
1992, was to reduce the imbalance between supply and demand on the milk and milk
products market and the resulting structural surpluses; whereas it has made a major
contribution to the reduction in milk production but remains necessary in order to
achieve a better market balance; whereas the additional levy should therefore
continue to be applied for eight further consecutive twelve-month periods starting on
1 ApriI 1992;
Whereas, in order to make full use of the experience gained in this area and in the
interests of simplification and clarification with a view to ensuring the legal
certainty of producers and other parties concerned, the basic rules of the extended
scheme should be laid down in a separate regulation, their scope and diversity should
at the same time be reduced and Council Regulation (EEC) No 857/84 laying down
1 0J No L,
2 OJ No L
3 0J No L 90, 1.4.1984, p. 10
                                                                                      A^
 ---pagebreak---                                           - 2 -
general rules for the application of the levy referred to in Article 5c of Regulation
(EEC) No 804 in the milk and milk products sector4, as last amended by Regulation
(EEC) No 1639/915, should be repealed;    whereas the Commission must be granted
direct competence to implement the principles thus laid down;
Whereas the method adopted in 1984, consisting of the application of a levy to
quantities of milk collected or sold for direct consumption above a certain guarantee
threshold, must be maintained;    whereas the said threshold is expressed for each
Member State by a guaranteed total quantity which may not be exceeded by the sum of
the individually allocated quantities for both deliveries and sales for direct
consumption; whereas the quantities are established for the next eight periods and
take account of various factors relating either to the scheme in the past or to
provisions which need to be made for the future;
Whereas because of the market situation it was necessary temporarily to suspend part
of the reference quantities from the fourth twelve-month period, pursuant to
Regulation (EEC) No 775/87 6 , as last amended by Regulation (EEC) No 3643/907;
whereas degressive compensation was granted to producers during five years in respect
of the suspended quantities; whereas because of persisting surpluses the suspension
of 4.5% of the reference quantities for deliveries must be converted to a definitive
reduction in the guaranteed total quantities;
Whereas a Community reserve was created at the start of the scheme to take account of
the difficulties created for certain Member States by the implementation of a scheme
for controlling milk production; whereas the said reserve has been increased several
times to meet the special needs of certain Member States and certain producers;
whereas in the light of this experience the various parts of the Community reserve
should be incorporated into the guaranteed total quantities and the reserve be
abolished;
4 OJ No L  90, 1.4.1984, p. 13.
5 OJ No L  150, 15.6.1991, p. 35.
6 OJ No L  78, 20.3.1987, p. 5.
7 OJ No L  362, 27.12.1990, p. 9.
 ---pagebreak---                                          - 3 -
Whereas, given the imperative need to achieve a balance between supply and demand, a
further reduction of 3% In the reference quantities for the Member States, which must
share the burden of the required effort, cannot be avoided;   whereas, in view of the
consequences for the beef sector, this reduction must be spread over the three
twelve-month periods of 1992/93, 1993/94 and 1994/95;
Whereas the individual reference quantity should be defined as the quantity available
on 31 March 1992, the expiry date of the eight initial periods of application of the
 levy scheme; whereas the principles or provisions pursuant to which the said quantity
must or may be reduced or increased under the extended scheme should be specified;
Whereas, therefore, under the rules for determining the individual reference
quantities, account should be taken, on the one hand, of producers who have
provisionally received a specific quantity under the old scheme and, on the other
hand, in accordance with the new guidelines of the common agricultural policy, of the
special situation of certain producers in any future allocation of additional or
specific reference quantities, within the limits of the guaranteed total quantity,
and particularly of young farmers, producers producing quality products which can be
directly marketed and producers engaged in an agr(-environmental programme, including
those preserving genetic diversity by farming local breeds;
Whereas a producer should be entitled to have a reference quantity increased or
established where another is reduced or abolished commensurately, on condition that
the request is duly Justified by the need to take account of definitive changes in
his marketing requirements;
Whereas the temporary transfer of parts of individual reference quantities in Member
States which have authorized this has proven to be an improvement to the scheme;
whereas this facility should therefore be extended to all producers;
                                                                                      4Y
 ---pagebreak---                                         - 4 -
Whereas the levy on deliveries and on sales for direct consumption should be fixed at
115% of the target price for milk; whereas, irrespective of the difficulties in
monitoring direct sales, a difference in rates Is not justified if producers can
obtain an increase in one quantity following a commensurate reduction in the other;
Whereas, in the case of deliveries, the levy due from producers must be paid by the
purchaser and recouped by him from the price paid for the milk; whereas the purchaser
is in the best position to carry out the necessary operations; whereas, in order to
keep the management of the scheme sufficiently flexible, provision should be made for
individual overruns to be equalled out over all the individual reference quantities
within a collection area or, in the case of groups of purchasers, within the same
geographical area;
Whereas, under Article 12(c) of Regulation (EEC) No 857/84, producer groups and
associations thereof were considered as producers; whereas, under Article 7 of this
Regulation, provision should again be made for such an option, but for a limited
period and provided that it is implemented only to permit the structural and
administrative adjustments required for the application of ordinary law and respects
the rights of the individual producers;
Whereas the purpose of the levy provided for in this Regulation is to stabilize the
market in milk products; whereas the revenue accruing from this Regulation should
therefore be used for financing expenditure in the milk sector,
HAS ADOPTED THIS REGULATION:
                                      Article 1
During eight further consecutive twelve-month periods beginning on 1 April 1992, an
additional levy shall be payable by producers of cows' milk on the quantities of milk
or milk equivalent delivered to a purchaser or sold for direct consumption during a
twelve-month period in excess of a quantity to be determined.
The levy is hereby fixed at 115% of the target price for milk.
                                                                                      -f.
 ---pagebreak---                                           - 5 -
                                        Article 2
1.    in the case of deliveries, the purchaser shall pay the levy due from the
     producers on the quantities of milk or milk equivalent delivered to him during
     the twelve-month period In excess of the sum of the individual reference
     quantities available to the producers concerned.
     The purchaser shall recoup the levy from the price paid for the period concerned
     to the producers contributing to the overrun, after sharing out the excess
     quantities between the other producers, in proportion to the individual reference
     quantities to which they are entitled.
2.    In the case of direct sales, the producer shall pay to the competent body of the
     Member State the levy due on the quantities of milk or milk equivalent sold for
     direct consumption during the twelve-month period in excess of the reference
     quantity to which he is entitled.
                                        Article 3
The sum of the individual reference quantities may not exceed the following total
quantities expressed in thousands of tonnes:
1.   for the twelve-month period from 1 April 1992 to 31 March 1993:
                                          Deliveries             Direct safes
  Belgium                                  2 887.610                 369.461
  Denmark                                  4 379.010                   0.941
  Germany                                 27 247.211                 148.538
  Greece                                     520.615                   4.483
  Spain                                    4 411.750                 511.781
  France                                  23 106.457                 725.496
   Ireland                                 5 146.558                  15.058
   Italy                                   8 224.210                 710.691
  Luxembourg                                 263.849                   0.941
  Netherlands                             10 769.091                  89.404
  Portugal                                 1 725.410                 117.394
  United Kingdom                          13 976.184                 372.133
                                                                                       A(r
 ---pagebreak---                                         - 6 -
2. for the twelve-month period from 1 April 1993 to 31 March 1994:
                                        Deliveries             Direct sales
  Belgium                                2 855.500                 365.729
  Denmark                                4 330.190                   0.932
  Germany                               26 944.941                 147.037
  Greece                                   515.245                   4.437
  Spain                                  4 365.250                 506.611
  France                                22 850.117                 718.168
  Ireland                                5 093.758                  14.906
  Italy                                  8 136.230                 703.513
  Luxembourg                               261.199                   0.932
  Netherlands                           10 649.301                  88.501
  Portugal                               1 707.620                 116.208
  United Kingdom                        13 822.888                 368.374
3. For each of the six twelve-month periods from 1 April 1994 to 31 March 2000
                                        Deliveries             Direct sales
  Belgium                                2 823.390                 361.997
  Denmark                                4 281.370                   0.922
  Germany                               26 642.671                 145.537
  Greece                                   509.875                   4.392
  Spain                                  4 318.750                 501.442
  France                                22 593.777                 710.839
  Ireland                                5 040.958                  14.754
  Italy                                  8 048.250                 696.334
  Luxembourg                               258.549                   0.922
  Netherlands                           10 529.511                  87.598
  Portugal                               1 689.830                 115.023
  United Kingdom                        13 669.593                 364.615
                                                                               A^
 ---pagebreak---                                          - 7 -
                                       Article 4
1.  The individual reference quantity available to a holding shall be equal to the
    quantity available on 31 March 1992, increased where applicable pursuant to
    Article 2(4) of Regulation (EEC) No 1637/91 8 and/or Article 6(2) of this
    Regulation and adjusted so as not to exceed the total quantities fixed In Article
    3, without prejudice to the application of Article 6.
2.  An individual reference quantity shall be increased or established at the
    producer's duty Justified request to take account of definitive changes affecting
    his deliveries and/or direct sales.   The increase or establishment of a reference
    quantity shall be subject to the reduction or abolition of the other reference
    quantity.
    Such adjustments may not lead to an increase, for the Member State concerned, in
    the sum of the quantities for deliveries and direct sales   fixed in Article 3.
    These quantities shall be adjusted in accordance with the procedure laid down In
    Article 9.
3.   If a producer who has provisionally been awarded a specific individual reference
    quantity pursuant to the last subparagraph of Article 3a(1) of Regulation (EEC)
    No 857/84 can prove before 1 July 1993, to the satisfaction of the competent
    authority, that he has actually resumed direct sales and/or deliveries and that
    the direct sales and/or deliveries totalled not less than 80% of the provisional
    reference quantity in the preceding twelve months, the specific reference
    quantity shall be definitively allocated to him.   Otherwise, the reference
    quantity definitively allocated shall be equal to the quantity actually delivered
    or sold directly.
    The level of actual direct sales and/or deliveries shall be determined in the
    light of the trend of production on the producer's holding, seasonal conditions
    and any exceptional circumstances.
8 OJ No L 150, 15.6.1991, p. 30.
                                                                                     A8
 ---pagebreak---                                          - 8 -
                                       Article 5
Member States shall authorize, before a date to be determined and for the full
duration of the twelve-month period concerned, temporary transfers of that part of
the individual reference quantity which the producer who is entitled thereto does not
intend to use.   However, the reference quantities referred to in Article 4(3) may not
be the subject of such temporary transfers until 31 March 1995.
Member States may differentiate the transfer operations on the basis of producer
categories or the milk production structure and restrict them to the regions or
collecting areas concerned.
 It shall be determined in accordance with the procedure referred to in Article 9
whether and to what extent the transferer may renew transfer operations.
                                       Article 6
1.   When determining the individual reference quantities referred to in Article 4,
     Member States shall award additional or specific reference quantities within the
     limits of the total quantities fixed In Article 3, giving priority to extensive
     holdings in areas as defined in Article 3(3), (4) and (5) of Directive
     75/268/EEC9, as last amended by Regulation (EEC) No 797/85 10 , and thereafter
     to other areas and, where appropriate, to producers designated in accordance
     with the procedure referred to in Article 9.
     'Extensive holding' means a holding on which the stocking density does not
     exceed the rates fixed in the first subparagraph of Article 2(1) of Regulation
                    11
     (EEC) No
9 OJ No L 128, 19.5.1975, p. 1.
10 OJ No L 93, 30.3.1985, p. 1.
11 OJ No L
                                                                                       41
 ---pagebreak---                                         - 9
2.  At the beginning of the period from 1 April 1992 to 31 March 1993, Member States
    shall, in accordance with paragraph 1, award the following quantities (in
    thousands of tonnes):
      Belgium                32.110
      Denmark                48.820
      Germany              302.270
      Greece                  5.370
      Spain                  46.500
      France               256.340
       Ireland               52.800
       Italy                 87.980
      Luxembourg              2.650
      Netherlands           119.790
      Portugal               17.790
      United Kingdom       153.296
                                      Article 7
For the purposes of this Regulation:
(a) 'milk' means the product of the milking of one or more cows;
(b) 'other milk products' means, in particular, cream, butter and cheese;
(c) 'producer' means a farmer, whether a natural or a legal person or group of
    natural or legal persons, whose holding is located within the geographical
    territory of the Community:
    - who sells milk or other milk products directly to the consumer and/or
    - delivers to a purchaser;
    Until the end of the tenth period of the scheme, producer groups and associations
    thereof recognized under Regulation (EEC) No 1360/78 and under whose internal
    rules the members are subject to the obligation referred to in the first indent
    of Article 6(1)(c) of that Regulation may be considered as producers;
                                                                                     •» ,
 ---pagebreak---                                         - 10 -
(d) 'holding' means all the production units operated by the producer and located
    within the geographical territory of the Community;
(e) 'purchaser' means a firm or group which purchases milk or other milk products:
    - to treat or process them, or
    - to sell them to one or more firms treating or processing milk or other milk
      products.
    However, any group of purchasers in the same geographical area which carries out
    administrative and accounting operations on behaJf of its members shall be
    regarded as a purchaser, provided that:
    - the quantity collected by each member is less than 250 tonnes of milk per day.
    - the average annual quantity collected by the members is less than 50 tonnes per
      day, and
    - the total quantity collected by the group Is less than 2 000 000 tonnes of milk
      per year;
(f) 'milk or milk product treatment or processing firm' means a firm or group which
    treats or processes milk or other milk products or whose dairying activities are
    restricted to collection, packaging, storage and chilling or to one of these
    operat ions;
(g) 'delivery' means any delivery of milk or milk products whether the transport is
    carried out by a producer, a purchaser, a milk or milk product treatment or
    processing firm or a third party;
(h) 'milk or milk equivalent sold directly for consumption' means milk or milk
    products converted to milk equivalent, sold without passing through a milk or
    milk product treatment or processing firm.
                                                                                      2\
 ---pagebreak---                                         - 11 -
                                      Art le le 8
The levy shall be considered as intervention to stabilize agricultural markets and
shall be used to finance expenditure in the milk sector.
                                      Article 9
Detailed rules for the application of this Regulation shall be adopted in accordance
with the procedure laid down in Article 30 of Regulation (EEC) No 804/68 1 2 .
                                      Article 1Q
Regulation (EEC) No 857/84 is hereby repealed.
                                      Article 11
This Regulation shall enter into force on the third day following its publication in
the Official Journal of the European Communities.
It shall apply from 1 April 1992.
This Regulation shall be binding in its entirety and directly applicable in all
Member States.
Done at Brussels                                          For the Council
12 OJ No L 148, 28.6.1968, p. 13.
                                                                                     22 I
 ---pagebreak---                                  Proposal for
                      COUNCIL REGULATION (EEC) No   /91
                                      of
              setting compensation for reduction of individual
                 milk reference quantities and for definitive
                      discontinuation of milk production
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 proposal from the Commission1,
Having regard to the opinion of the European Parliament2,
Whereas changes in the milk market necessitate a further 3% reduction in
the total quantities set by Article 3 of Council Regulation (EEC)
No ..../.. establishing an additional levy in the milk and milk products
sector3; whereas the reduction is staggered over three 12-month periods;
whereas to offset the resulting reduction in individual reference
quantities compensation of ECU 5 per 100 kilograms per year should be
granted for ten years, in proportion to the adjustment required of
producers during each of the three forthcoming 12-month periods, payable in
the form of transferable bonds guaranteed by the Community and by the
Member State and realizable on the market; whereas maximum compensation is
however restricted to 4% of the reference quantity available; whereas
Member States may increase the compensation on their own account;
Whereas, however, a reduction in the reference quantities of small and
medium-sized holdings must be avoided; whereas to secure the release of the
eference quantities that can be assigned to such holdings, a Community
scheme should be established for financing discontinuation of milk
production under which any producer applying will, provided that he meets
1  OJ No L     ,          , p.
2  OJ No L               , p.
3  OJ No L               . p.
                                                                            23
 ---pagebreak---                                    - 2 -
certain conditions of eligibility, be paid compensation following total and
permanent cessation of milk production; whereas Member States must take the
existence of farm leases into consideration;
Whereas compensation for discontinuation of milk production will normally
be granted on the entire reference quantity; whereas in certain cases,
however, this entitlement should be restricted, it being understood that
producers will be excluded if they have benefited under Article 3c of
Council Regulation (EEC) No 857/84 adopting general rules for the
application of the levy referred to in Article 5c of Regulation (EEC)
No 804/68 in the milk and milk products sector4, as last amended by
Regulation (EEC) No 1639/915;
Whereas experence indicates that the compensation for abandonment of milk
production may be set at ECU 17 per 100 kilograms per year for three years,
payable in the form of transferable bonds and realizable on the market;
whereas it may prove necessary to increase the compensation; whereas Member
States should therefore be authorized to grant additional compensation,
which may be varied to take account of regional differences;
Whereas the reference quantities so freed must be reallocated to small and
medium-sized holdings in order to prevent their reference quantities from
falling; whereas Community financing of the compensation for abandonment of
milk production must be restricted to these reassignment requirements;
Whereas, beyond this objective, which relates to the ninth, tenth and
eleventh periods, Member States considering it necessary to continue
assignment of reference quantities as provided for In Article 6 of
Regulation (EEC) No     should be permitted to maintain for the following
periods a scheme for financing discontinuation of milk production involving
a Community contribution of 50% of the compensation set by the Member State
up to a maximum of ECU 2.5 per 100 kilograms per year for ten years;
whereas if appropriate, in order to facilitate the reduction in deliveries
and direct sales that reduction of the guaranteed total quantities implies,
the reference quantities released under this scheme may remain unallocated;
4  0J No L 90, 1.4.1984, p. 13.
5  0J No L 150, 15.6.1991, p. 35.
                                                                            ZL\
 ---pagebreak---                                    - 3 -
Whereas the purpose of Community compensation is to reestablish balance on
the market and it may therefore be considered as intervention within the
meaning of Article 3 of Council Regulation (EEC) No 729/70 of 21 April 1970
on the financing of the common agricultural policy6, as last amended by
Regulation (EEC) No 2048/887,
HAS ADOPTED THIS REGULATION:
                                 Article 1
1. From the ninth 12-month period of application of the additional levy
scheme established by Regulation (EEC) No ..../.., compensation shall be
granted to producers whose reference quantity is reduced pursuant to
Article 4(1) of that Regulation.
2. The compensation shall:
   a)   amount to ECU 5 per 100 kilograms per year;
   b)   be granted on the actual reduction in the individual reference
        quantity available on 31 March 1992, where appropriate plus the
        quantities reallocated under Article 2(4) of Regulation (EEC)
        No 1637/918 and corrected for any reference quantity transfers
        since then; it may not exceed a maximum corresponding to 2%, 3% and
        4% of that quantity respectively for the ninth, tenth and eleventh
        12-month periods and for the following periods;
   c)   shall be paid in the form of guaranteed transferable bonds
        realizable on the market, payable in ten annual instalments from
        1993 onwards, between 1 April and 30 September of each year.
6  0J No L 94, 28.4.1970, p. 13.
7  0J No L 185, 15.7.1988. p. 1.
8  OJ No L 150, 15.6.1991, p. 30.
                                                                            zS
 ---pagebreak---                                     - 4-
                                  Article 2
1. At the request of the party concerned and subject to the terms of this
Article, Member States shall grant to any producer as defined In
Article 7(c) of Regulation (EEC) No ..../.. who undertakes to discontinue
milk production totally and permanently before a date to be determined
compensation in the form of guaranteed transferable bonds realizable on the
market, payable in three annual Instalments from 1993, between 1 April and
30 September of each year.
2. a)   Producers shall be eligible if they or the reference quantity for
        deliveries or direct sales, unless they have received quantities
        under Article 3c of Regulation (EEC) No 857/84.
   Member States, however:
        may decide not to grant compensation to producers with less than
        six dairy cows or whose reference quantity is less than
        25 000 kilograms per year,
        are authorized to act as necessary to ensure that the quantity
        reductions made under this Regulation are distributed as
        consistently as possible between regions and collection areas.
   b)   Compensation shall be granted for the reference quantity held at
        the end of the 12-month period concerned, excluding for the ninth
        and tenth periods quantities allocated under the last subparagraph
        of Article 3a(1) of Regulation (EEC) No 857/84.
   c)    If a producer has two reference quant itites, one for deliveries and
        one for direct sales, compensation shall be granted on both.
   d)   If the holding Is held on a lease the application for compensation
        shall be made by the lessee.
                                                                              zi
 ---pagebreak---                                    - 5 -
        Member States shall determine on what terms the lessee may make the
        application and compensation be granted.
   e)   The compensation shall be ECU 17 per 100 kilograms per year and may
        be supplemented by the Member State acting on its own account.
        The supplement may be differentiated by Member State to take
        account of local differences in:
                the trend of milk production
                the average size of producer deliveries
                the need not to hinder restructuring of milk production
                the potential for change to other products
                location of milk production in areas as defined in
                Article 3(3), (4) and (5) of Council Directive 75/268/EEC
                of 28 April 1975 on mountain and hill farming and farming
                in certain less favoured areas 9 , as last amended by
                Regulation (EEC) No 797/85 1 0 .
                                 Article 3
Reference quantities released pursuant to Article 2 shall be reallocated,
up to the level of the volume on which compensation as provided for in
Article 1 is granted, to producers whose reference quantity remains below
200 000 kilograms, on condition that the amount of compensation still due
corresponding to the reallocated quantity is relinquished.
9 0J No L 128, 19.5.1975. p. 1.
10 OJ No L 93, 30.3.1985, p. 1.
 ---pagebreak---                                    - 6 -
                                 Article 4
Community financing of the compensation provided for in Article 2 is, for
the ninth, tenth and eleventh 12-month periods, restricted to the
reallocation requirements indicated in Article 3.
                                 Article §
1. From the end of the twelfth 12-month period until the additional levy
scheme is terminated Member States may, on request by the party concerned
and on the terms set out in Article 2, grant producers as defined in that
Article compensation in the form of transferable bonds guaranteed by the
Community and the Member State and realizable on the market, payable in ten
annual instalments from 1996, between 1 April and 30 September of each
year.
2. Member States shall set the amount of the compensation, which may be
differentiated in line with one or more of the criteria set out in the
second subparagraph of Article 2(2)(e).
The Community contribution shall be restricted to 50% of the compensation
granted and to a maximum contribution of ECU 2.5 per 100 kilograms per year
for ten years.
3. Reference quantities released pursuant to this Article shall be
reallocated as provided for in Article 6(1) of Regulation (EEC) No .../..
or, if appropriate, shall not be reallocated.
                                 Article 6
Financing of Community compensation as provided for in Articles 1, 2 and 5
shall be considered as intervention within the meaning of Article 3 of
Regulation (EEC) No 729/70.
                                                                            z?
 ---pagebreak---                                     - 7 -
                                  Article 7
Member States shall pass to the Commission, each year before 1 April, all
information needed to assess the effectiveness of the measures contained in
this Regulation.
                                  Article 8
The Commission, in accordance with the procedure laid down in Article 30 of
Regulation (EEC) No 804/68, shall adopt measures for the application of
this Regulation.
                                  Article 9
This Regulation shall enter into force on the third day following its
publication in the Official Journal of the European Communities.
 It shall apply from 1 April 1992.
This Regulation shall be binding in its entirety and directly applicable in
a 11 Member states.
Done at                                         For the Council
                                                The President
 ---pagebreak---                                 Proposal for a
                    COUNCIL REGULATION (EEC) No        /91
                                       Of
        fixing the target price for milk and the intervention prices
            for butter, skimmed-milk powder and Grana Padano and
            Parmigiano Reggiano cheeses for three annual periods
                       from 1 July 1993 to 30 June 1996
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 234(3) thereof,
Having regard to the proposal from the Commission,1
Having regard to the opinion of the European Parliament,2
Whereas the policy adopted by the Community since accession as regards
prices and, in particular, the introduction of the system of agricultural
stabilizers and the new guidelines for the common agricultural policy
cannot bring about, in the manner provided for in Article 285 of the Act of
Accession, the process of alignment of the prices of skimmed-milk powder in
Portugal on the common price;    whereas the common price was fixed for the
1991/92 marketing year at ECU 172.43/100 kg and the Portuguese prices for
the same period at ECU 210/100 kg on the mainland and at ECU 207/100 kg in
the Azores;  whereas in order that the existing gap between these prices
should not be widened but, on the contrary, closed, the relevant
arrangements in the Act of Accession should be adapted;    whereas the
principle should be adopted of aligning the prices of skimmed-milk powder
In Portugal on the common price in stages, once the two Portuguese prices
have been set at the same level;
1  0J No L         ,        p.
2  OJ No L         ,        , p.
                                                                            30
 ---pagebreak---                                    - 2 -
Whereas, given the pressing need to Improve the balance between supply and
demand, it was necessary to extend the additional levy scheme instituted in
the milk and milk products sector and reduce the guaranteed total
quantities fixed under that scheme;  whereas, given the foreseeable
reduction in milk production costs following the fall in the prices of
cereals and concentrates, the target price for milk should be reduced in
order to improve the competitive position of milk products;  whereas,
therefore, the target price for milk must be reduced In relation to other
agricultural products;
Whereas it is, moreover, necessary to take into consideration the long-term
balance between supply and demand on the milk market, account taken of
external trade, and accordingly to fix the target price for milk in a
mult(annual framework, without prejudice to subsequent adjustments
necessitated by the market trend;
Whereas the intervention prices for butter and for skimmed-milk powder are
intended to contribute to the achievement of the target price for milk;
whereas it is necessary to determine their levels in the light of the
overall supply and demand situation on the Community milk market and the
opportunities for disposal of butter and skimmed-milk powder on the
Community and world markets;  whereas the competitive position of butter
necessitates a larger reduction in the intervention price for butter than
in the intervention price for skimmed-milk powder;;
Whereas it is appropriate that the gap between the prices of skimmed-milk
powder in Portugal and the common price be closed in three stages
corresponding to each of the annual periods covered by the multtannua I
framework in which the target price for milk is fixed;  whereas it has been
observed that the level of the market prices obtaining in Portugal for
skimmed-milk powder is such that alignment effected in this way is not
likely to have a negative effect on the said product;
                                                                            3-
 ---pagebreak---                                    - 3 -
Whereas the intervention prices for Grana Padano and Parmigiano Reggiano
cheeses must be fixed in accordance with the criteria laid down in
Article 5(2) of Council Regulation (EEC) No 804/68 on the common
organization of the market in milk and milk products,3 as last amended by
                            4
Regulation (EEC) No           ,
HAS ADOPTED THIS REGULATION:
                                 Article 1
The gap between the prices of skimmed-milk powder in Portugal and the
common price shall be closed by aligning the Portuguese prices on the
common price in three stages.
The first move towards alignment shall take place on 1 July 1993.
The common price shall be applied in Portugal on 1 July 1995.
3  OJ No L 148, 28.6.1968, p.13.
4  OJ NO L                 . p.
                                                                          :«<
 ---pagebreak---                                      4 -
                                 Article 2
The target price for milk and the intervention prices for milk products
shall be as follows, without prejudice to subsequent adjustments-.
1.  For the period from 1 July 1993 to 30 June 1994
                                                  (ECU/100 kg)
                                           Community
                                              of               Portugal
                                            Eleven
   a) target price for milk                     25.74              25.74
   b) intervention price
       . butter                                275.21             275.21
       . skimmed-milk powder                   168.98             192.60
       . Grana Padano cheese
         - between 30 and 60
           days old                           364.24
         - at least 6 months old              454.27
       . Parmigiano Reggiano cheese
         at least 6 months old                503.13
2.  For the period from 1 July 1994 to 30 June 1995
                                                  (ECU/100 kg)
                                           Community
                                              of               Portugal
                                            Eleven
   a) target price for milk                     24.93              24.93
   b) intervention price
       . butter                                262.04             262.04
       . skimmed-milk powder                   166.39             178.60
       . Grana Padano cheese
         - between 30 and 60
           days old                           355.92
         - at least 6 months old              445.48
       . Parmigiano Reggiano cheese
         at least 6 months old                494.34
                                                                         33
 ---pagebreak---                                     - 5 -
3.   For the period from 1 July 1995 to 30 June 1996
                                                 (ECU/100 kg)
a) target price for milk                          24.13
b) intervention price
    . butter                                     248.86
    . skimmed-milk powder                        163.81
    . Grana Padano cheese
      - between 30 and 60
         days old                                347.60
      - at least 6 months old                    436.69
    . Parmigiano Reggiano cheese
      at least 6 months old                      485.55
                                  Art icle 3
This Regulation shall enter into force on the third day following its
publication in the Official Journal of the European Communities.
It shall apply from 1 July 1993.
This Regulation shall be binding in its entirety and directly applicable in
a I I Member States.
Done at Brussels,                                        For the Council
                                                                            ?A
 ---pagebreak---                                  -1-
                                Proposai for a
                    COUNCIL REGULATION (EEC) No       /..
                                  of     ...
                   instituting a dairy cow premium scheme
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 proposal from the Commission 1 ,
Having regard to the opinion of the European Parliament 2 ,
Whereas, given the imperative need to achieve a better balance between
supply and demand, it has become necessary to prolong the additional levy
scheme instituted in the milk and milk products sector and to reduce the
guaranteed total quantities fixed under that scheme and the prices fixed
under the market organization;
Whereas the target price for milk has been reduced along with those for
other agricultural products;   whereas extensive dairy farms may be
adversely affected by the milk price cuts without benefiting from the
reductions in input prices which will be of benefit to intensive dairy
farms;  whereas this situation should be remedied and, in line with the new
direction of the common agricultural policy, encouragement be given to
extensive production systems;
Whereas this may be achieved by grant of an annual premium per dairy cow,
subject to compliance with a maximum stocking density differentiated
according to the location of the holding;    whereas, because of the lower
agricultural potential of the mountain and hill areas and less-favoured
areas, it is impossible to maintain, in extensive farming conditions,
stocking densities comparable to those of other areas;    whereas the
situation of very small-scale producers should be taken into account;
1  OJ No L
2  OJ No L
                                                                            35
 ---pagebreak---                                   -2-
Whereas the amount of the premium must be fixed in relation to the income
 loss expected as a result of the reduction of milk prices to be effected in
three stages;
Whereas the sum total of the premiums should be limited to an amount
corresponding to an economically viable holding;
Whereas to facilitate the checking of applications, provision should be
made for dairy cows to be identified by marking;
Whereas this premium scheme will help to restore balance on the market by
encouraging more extensive dairy farming methods;   whereas it may therefore
be regarded as intervention within the meaning of Article 3 of Council
Regulation (EEC) No 729/70 of 21 April 1970 on the financing of the common
agricultural policy3, as last amended by Regulation (EEC) No 2048/884,
HAS ADOPTED THIS REGULATION:
                                   Article 1
1.   On application by interested parties and in accordance with the
conditions laid down herein, Member States may grant an annual premium per
dairy cow for dairy herds kept by producers as defined in Article 7(c) of
Council Regulation (EEC) No ... establishing an additional levy in the milk
and milk products sector5.   However, in each case the premium shall be
paid for not more than 40 dairy cows.
2.   Applications shall be made at the beginning of each calendar year
before a date to be determined.
3   OJ No L 94, 28.4.1970, p. 13.
4   OJ No L 185, 15.7.1988, p. 1.
5
                                                                             3*
 ---pagebreak---                                   -3-
                                   Article 2
1.    The premium shall be granted for the calendar year In question provided
that, at all times,    the stocking density on the holding, as referred to in
Article 7(d) of Regulation (EEC) No..., expressed in Livestock Units (LU)
per hectare of forage area (ha), does not exceed the following:
- 1 . 4 LU/ha for holdings or parts of holdings located in areas as defined
in Article 3(3), (4) and (5) of Directive 75/268/EEC6, as last amended by
Council Regulation (EEC) No 797/85 7 ;
- 2 LU/ha for holdings or parts of holdings located elsewhere.
and the number of dairy cows present on the holding is at least equal to
the number for which the premium is applied for.
However, the stocking density requirement shall not apply to producers
whose reference quantity Is less than 25 000 kilograms at the start of the
calendar year in question.
2.    The number of LU shall be determined on the basis of the number of
dairy cows, suck 1er cows, male bovine animals over 6 months and ewes,
converted by reference to the conversion table in Annex I to Regulation
(EEC) NO 2328/918;
3.    The forage area means the total area of the holding as referred to in
Article 7(d) of Regulation (EEC) No ..., less any buildings, paths, ponds,
woods, areas used for permanent crops or horticultural crops, or areas
eligible under Regulation (EEC) No ...9 or used for purposes other than
cattle or sheep rearing and/or qualifying for national or Community aid
other than that referred to in point (a) of the third subparagraph of
Article 2(3) of Regulation (EEC) No 2328/91.
6    OJ No L 128, 19.5.1975. p. 1.
7    OJ No L 93, 30.3.1985, p. 1.
8    OJ No L 218, 6.8.1991, p.1.
9    Arable crops
                                                                              >>
 ---pagebreak---                                  -4-
ln addition, the forage area shall include areas Jointly farmed in
accordance with rules to be adopted in accordance with the procedure laid
down in Article 30 of Regulation (EEC) No 804/68 1 0
                                  Article 3
1.   The amount of the premium per dairy cow is:
- ECU 25 for 1993
- ECU 50 for 1994
- ECU 75 for the following years.
2.   Dairy cows in respect of which the premium is applied for must be
 identified by marking in accordance with Regulation (EEC) N o 1 1 .
 Identification data must be entered on the premium application and in a
special register kept by the producer.
The number of dairy cows for which the premium is applied for shall be
checked by the competent authority, in particular on the basis of the
producer's reference quantity and the average milk yield in the region
concerned.
3.    Except in duly justified cases, payment must be made as soon as the
checks have been carried out and not later than 30 April of the following
year.
                                  Article 4
Financing of the premium provided for in this Regulation shall be regarded
as intervention within the meaning of Article 3 of Regulation (EEC) No
729/70.
                                  Article ff
Detailed rules for the application of this Regulation, and In particular
concerning checks to ensure compliance with obligations, shall be adopted
by the Commission in accordance with the procedure laid down in Article 30
of Régulation (EEC) No 805/68.
10 0J No L 148, 28.6.1968, p. 13.
11 OJ NO L .
                                                                           &
 ---pagebreak---                                 -5-
                                 Article 6
This Regulation shall enter into force on the third day following its
publication in the Official Journal of the European Communities.
It shall apply from 1 January 1993.
This Regulation shall be binding in its entirety and directly applicable In
a 11 Member States.
Done at ... ,                                   For the Council
                                                        The President
                                                                           B*
 ---pagebreak---                                    Proposal
                         COUNCIL REGULATION (EEC) No
                                      of
   on promoting consumption in the Community and expanding the markets for
                            milk and milk products
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 proposal from the Commission1,
Having regard to the opinion of the European Parliament2,
Whereas the market in milk and milk products is affected by the continued
fall in the consumption of certain milk products in the Community; whereas,
 in view of the pressing need to attain a better balance between supply and
demand, it has been necessary both to extend the additional  levy scheme
 introduced in the milk and milk products sector and to reduce the
guaranteed total quantities fixed under that scheme; whereas in order to
 improve the competitive position of milk products provision has also been
made for lowering the prices referred to in Title I of Council Regulation
(EEC) No 804/68 of 27 June 1968 on the common organization of the market in
milk and milk products3, as last amended by Regulation (EEC) No         4
                                                                          ;
Whereas specific measures to encourage consumption in the Community and
favour expansion of the markets for milk and milk products may also help to
improve market balance by stimulating demand; whereas these specific
measures should be defined;
1   OJ No L
2   OJ No L
3   OJ No L 148, 28.6.1968, p. 13.
4    OJ No L
                                                                            4?o
 ---pagebreak---                                    - 2 -
Whereas the provisions of this Regulation have the same objective as
Council Regulation (EEC) No 1079/77 on a co-responsibility levy and on
measures for expanding the market in milk and milk products5, as last
amended by Regulation (EEC) No 1632/916; whereas, therefore, it Is not
necessary to extend the application of the said Regulation;
Whereas the purpose of the said provisions is to improve the balance on the
market for milk products; whereas the expenditure Incurred under the
specific measures should therefore be considered as intervention within the
meaning of Article 3 of Council Regulation (EEC) No 729/70 of 21 April 1970
on the financing of the common agricultural policy7, as last amended by
Regulation (EEC) No 2048/888,
HAS ADOPTED THIS REGULATION:
5  OJ No L 131, 26.5.1977, p. 6.
6  OJ No L 150, 15.6.1991, p. 23.
7  OJ No L 94, 28.4.1970, p. 13.
8  0J No L 185, 15.7.1988, p. 1.
                                                                            k
                                                                              i !
 ---pagebreak---                                      - 3 -
                                   Article 1
 1. Measures to promote consumption in the Community and to expand the
    markets for milk and milk products shall be adopted in accordance with
    the procedure laid down in Article 4.
 2. The measures referred to in the previous paragraph shall be the
    fol lowing:
    (a)   dissemination within the Community of existing knowledge,
          particularly concerning the nutritional qualities of milk and milk
          products;
    (b)   research concerning, in particular, the nutritional aspects of milk
          and milk products;
    (c)   publicity and promotion campaigns within the Community to encourage
          the consumption of milk and milk products;
    (d)   market studies aimed at expanding the markets for milk and milk
          products.
3. The Commission shall communicate to the Council each year before 1 April
    the programme of measures which it intends to take during the following
    market ing year.
    With a view to programming measures, the Commission may, in particular,
    consult agencies which specialize in market studies and publicity as
    well as research institutes.
                                   Article 2
The expenditure incurred under the measures referred to in Article 1 shall
be considered as intervention within the meaning of Article 3 of Regulation
(EEC) No 729/70.
                                   Article 3
Detailed rules for the application of this Regulation shall be adopted in
accordance with the procedure laid down in Article 30 of Regulation (EEC)
No 804/68.
                                                                              H
 ---pagebreak---                                    - 4 -
                                 Article 4
This Regulation shall enter Into force on the third day following its
publication in the Official Journal of the European Communities.
It shall apply from 1 January 1993.
This Regulation shall be binding In its entirety and directly applicable in
a 11 Member States.
Done at Brussels                                        For the Council
                                                        The President
                                                                            4*
 ---pagebreak---                 FINANCIAL IMPLICATIONS OF THE CAP REFORM
                    DURING THE 1993-1997 BUDGET YEARS
                        FOR MILK AND MILK PRODUCTS
The financial implications of the proposals for Council Regulations:
    amending Regulation (EEC) No 804/68 setting up a common market
    organisation in the sector of milk and milk products;
    fixing the target price for milk and the intervention prices for
    butter, skimmed-milk powder and Grana Padano and Parmigiano
    Reggiano cheeses for three annual periods from 1 July 1993 to 30
    June 1996;
    establishing an additional levy in the milk and milk products
    sector;
    setting compensation for the reduction of individual milk reference
    quantities and for definitive discontinuation of milk production;
    instituting a dairy cow premium scheme;
    on promoting consumption in the Community and expanding the markets
    for milk and milk products.
                                                                        44
 ---pagebreak---                             FINANCIAL IMPLICATIONS OF THE REFORM IN THE MILK SECTOR
                         (Financial implications in relation to the 1992 draft budget)
                                                                                                  ECU m (B)
                                                      19 9 3      19 9 4       19 9 5    19 9 6      19 9 7
        withdrawal of basic co-responsibility
        levy and connected promotion measures         +    40     +   265     +   265    +   265     +    265
        10% reduction in the institutional prices
        as a result of the reduction in the price     (-   54)    (-  365)     (- 643)   (-  873)    (-   893)
        of cereals                            (1)
        3% reduction in quotas:
        . implications for milk                       -   289     -   462     -   547    -    523    -    523
        . additional expenditure in beef/veal
          sector as a result of the slaughter of
          dai ry cows                                 +   187     +   175     +   164
       compensation for reduction/buying
        bock of quaotas:
        * compensation for 4% of quotas in            +   292     +   438     +   584    +   359     +    246
          the form of:
          . discontinuation programme
            (ECU 170/t for 3 years)
          . linear quota reduction
            (ECU 50/t for 10 years)
        * optional discontinuation programme
          with redistribution, applicable
          from the fourth year of the reform                                                p.m.        p.m.
       dairy cow premium (ECU 75/head for all
       cows on holdings producing less than
       25 000 kg and for the first 40 cows on
       each holding observing 1.4 LU/ha of
       forage in less favoured areas and 2 LU/ha
        in other areas)                                           +   468     -I- 924    + 1.369     + 1.369
    -  promotional campaign for milk products         +    10     +    10     +     10   +     10    +     10
    Total                                                 240     +   894     • 1.400    + 1.480     + 1.367
(1) The impact of this reduction is not included here since it has already been taken into account in the
    figures for arable crops as a knock-on effect of the cereals reform.
                                                                                                           4JT
 ---pagebreak---  ---pagebreak---                                                                      ISSN 0254-1475
                                                            COM (91) 409/2 final
                                                      DOCUMENTS
EN                                                                              03
                                Catalogue number : CB-CO-91-516-EN-C
                                                             ISBN 92-77-77596-3
Office for Official Publications of the European Communities
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