CELEX: 51989PC0464
Language: en
Date: 1989-10-04
Title: PROPOSAL FOR A COUNCIL REGULATION ( EEC ) AMENDING REGULATION ( EEC ) NO 2601/69 LAYING DOWN SPECIAL MEASURES TO ENCOURAGE THE PROCESSING OF MANDARINS, SATSUMAS, CLEMENTINES AND ORANGES

COMMISSION OF THE EUROPEAN COMMUNITIES
                                        C0M(89) 464 final
                                        Brussels, 4 October 1989
                               Proposal for a
                         COUNCIL REGULATION (EEC)
     amending Regulation (EEC) No 2601/69 laying down special measures
      to encourage the processing of mandarins, satsumas, clémentines
                                 and oranges
                       (presented by the Commission)
 ---pagebreak---                                                                 to-kthf
                            EXPLANATORY MEMORANDUM
Subject; Proposal for an amendment to Regulation (EEC) No 2601/69 laying
          down special measures to encourage the processing of certain
          varieties of oranges
    In the chapter on citrus fruit In the 1989/90 price proposals, the
    Commission pointed out that the world market price for orange juice
    sometimes fluctuated strongly and that In order to encourage processors
    to purchase the available products provision should be made for the aid
    granted to processors who pay producers the minimum price to enable
    them to remain competitive even when trends In the world price
    situation are unfavourable. Therefore, at the time when the Council
    adopted the Commission's proposals for measures In that sector, the
    Commission also undertook to present to the Council as soon as possible
    a proposal to the effect that the system of aid for processing citrus
    fruit into juice should comprise an element enabling fluctuations in
    the prices of these products on the world market to be taken into
    account.
2.  The present rules provide for aid for processing into Juice to be
    calculated in a different way for lemons and oranges. In the case of
     lemons, Regulation (EEC) No 1035/77 provides that the financial
    compensation granted to processors for lemons purchased from producers
    at the minimum price "may not exceed the difference between the minimum
     purchase price and the price charged for the raw material In non-member
     producer countries".
     Thus the rules provide for fluctuations in the prices of the raw
    materials in non-Community countries to be taken into account at the
     annual fixing of the amount of the financial compensation.
     Processing costs are not taken into consideration, since the Industry
     is protected by the customs duty imposed on imports.
     This has created a situation In which:
     - aid is granted on the basis of the difference in the price of the raw
       material, without taking account of the competitiveness of the
       processing Industries, in accordance with the general policy on aid
       for the processing of agricultural products;
     - aid can take account of price fluctuations In competing countries.
                                                                             P2
 ---pagebreak---                                     - 2 -
     In thA case of oranges, on the other hand, Regulation (EEC) No 2601/69
    provides for financial compensation to be fixed In such a way that the
    cost borne by the processing industry cannot decrease from one year to
    the next. However, If the minimum price increases, the cost borne by
    the industry may Increase by at least 50% of the price Increase. Thus,
    the rate of financial compensation Is not linked to the price of the
    raw material on the world market.
    These rules can lead to situations in which the cost borne by the
     Industry, that Is, the cost to the Community processing Industry of the
    raw material (equal to the difference between the minimum prlce ( 1 )
    and the financial compensation), Is higher than the cost of the raw
    material In the producer countries.
    This could compromise the effort to encourage processing and reduce
    withdrawals, since the processing Industry may prove reluctant to enter
     Into contracts when prices are not sufficiently competitive to
    guarantee that they will be able to dispose of the finished product,
    even if Community products account for only a small percentage of the
     products consumed on the European market.
4.   It Is therefore proposed that the system for calculating financial
     compensation for the processing of oranges Into Juice be brought in
     line with the system used In the case of lemons and to provide for
     financial compensation to reflect the difference between the price of
     the raw material In the Community and the price In non-Community
     producer countries.
     Calculations based on past figures show that, on average, the new
     calculation method, if used over a period of several years, would not
     result in an amount much higher than the amount fixed to date, but the
     amounts would differ from year to year (see Annex). The same holds
     good for the future when the hypotheses regarding costs are made on the
     basis of the FAO price estimates which were recently distributed to the
     citrus group, even those which predict an Important development of
     production In South American countries and In the United States. The
     system Is not more protectionist than the previous one.
 (1) The minimum price Is fixed by the Commission at the level of the
     withdrawal price, which Is derived mathematically for the basic and
      buying-in prices fixed annually by the Council.
                                                                             3
 ---pagebreak---                                    - 3 -
5. The  attached proposal therefore aims at introducing the same system for
   the  calculation of financial compensation for oranges as the one in use
   for  lemons processed into juice, without changing any other elements in
   the  system provided for in the relevant decisions for 1989/90.
   The financial compensation for the processing of satsumas, Clementines
   and mandarins into Juice will be similarly changed but without amending
    legislation as it is provided that aid In respect of those products be
   proportional to aid for oranges.
   There is no link between the price of orange and satsuma Juice and the
   price of satsumas in syrup ; the philosophy used is that the price to
   the industry for the raw materials for the two different products
   should be the same. Therefore, no amendment has been contemplated.
6.  In conclusion, it is proposed that the Council adopt the attached draft
   Regulation:
   - amending Regulation (EEC) No 2601/69 providing for the financial
      compensation for the processing of oranges into juice to be
      calculated by reference to the difference between the minimum
      purchase price and the price for the raw material in non-member
      producer count rI es ;
    - which provides for the possibility of adjusting the amount fixed for
      the 1989/90 marketing year In line with this new rule, so that the
      effects of the new system are felt In the Industry as soon as
      possible.
 ---pagebreak---                                       Proposal  for a
                               O0TJNCIL REGULATION (EEC)
      amending Regulation (EEC) No 2601/69 laying down special measures
                to encourage the processing of mandarins, satsumas,
                                 Clementines and oranges
THE COUNCIL OF THE EUROPEAN COMMUNITIES,
Having regard to the Treaty establishing the European Economic Ctammunity,
and in particular Article 43 thereof,
Having regard to the proposal from the Commission,
Having regard to the opinion of the European Parliament,
Whereas Council Regulation (EEC) No 2601 /691, as last amended by Regulation (EEC)
No 1123/892, provides for a system of financial compensation Intended to
encourage the processing of mandarins, satsumas, Clementines and oranges,
 in the context of contracts ensuring regular supplies to the processing industries
at a minimum purchase price to the producer;
Whereas the prices of the raw material produced in the Community are w g h w
than the prices in non-member countries; ràaereas the competitiveness of the
Ctommunity-produoed raw material should be ensured Irrespective of price
 movements for the raw material in the non-member country;
Whereas the current market situation requires that the competitiveness of
the Community product he improved as soon as possible; whereas, therefore,
provision should he made for the amount of the financial compensation fixed
for the 1989/90 marketing year to he adjusted during the year;
 1 OJ NO L 324, 27.12.1969, p. 21.
 2 QJ NO L 118, 29.4.1989, p. 25.
                                                                                    5"
 ---pagebreak---                                                    - 2 -
     HAS ADOPTED THIS REGCIAIICN:
                                                 Article 1
     The second subparagraph of Article 3(1) of Regulation (EEC) No 2601/69 is
     replaced by the following:
         "For      oranges,        the financial : compensation may not exceed the
          difference between the minimum price referred to in Article 2 (2) and
          the prices obtaining for the raw material i n non-member producer
          countries."
                                                 Artilolft a
     For the 1989/90 marketing year, the amount of the financial compensation
     fixed prior to the beginning of the marketing year may be adjusted HH-MT^
     the marketing year to take account of the second subparagraph of Article 3(1) of Regu-
      lation (EEC) No 2601/69, provided that such adjustment does not lead to a reduction in the
      financial compensation.
                                               • -        " •     - - - -            . . . x .
      Detailed rules for the application of this Article shall be adopted in accordance with the pro-
      cedure laid down in Article 33 of Council Regulation (EEC) No KB5/7Z\
                                                 Acfciûle_2.
     This Regulation shall enter into force on the day of its publication in the
     Official Journal of the European Communities.
     It shall apply from the beginning of the 1989/90 marketing year.
     This Regulation shall be binding In its entirety and directly applicable in
     all Member States.
     Done at Brussels,
                                                                     For the Council
       3
        0J No L 118, 20.5.1972, p.1.                                                                  £
i__.
 ---pagebreak---          F I N A N C I A L      S T A T E M E N T
                                                            Date: 19.7.1989
1. Budget heading: 1503                          Appropriations: ECU 101 million
2. Title: Amendment to Regulation (EEC) No 2601/69 laying down special measures
            to encourage the processing of certain varieties of oranges (mandarins,
            satsumas, clémentines and oranges).
3. Legal basis: Article 43 of the Treaty and Regulation (EEC) No 2601/69
4. Aims of project: Financial compensation for oranges should not exceed the
                       difference between the minimum price and the prices of the
                       raw material in non-EEC producer countries
                                               period of      current         following
                                               12 months   financial year   financial year
5.    Financial implications                                   (1989)            (1990)
5.0   Expenditure
      - charged to the EC budget
         (refunds/intervention)                ECU 99.5 m                    ECU 99.5 m
      - national administration
      - other
5.0.1 Estimated expenditure
5.1.1 Estimated receipts
5.2 Method of calculation:
                                Quantity       Aid (1)         Cost
                 EEC-10         770 000 t x 110.2 ECU/t =  ECU 84.85 million
                 Spain           47 600 t x 99.6 ECU/t *   ECU 4.74 million
                 Portugal        12 000 t x 81.1 ECU/t =   ECU 0.97 million
                                                    TOTAL  ECU 90.56 million
                 Impact of dual rate : 1 099
                          ECU 90.56 m x 1.099 (DR) : ECU 99.5 m
 6.0 Can the project be financed from appropriations entered in the relevant chapter
      of the current budget ?                                                      yes
 6.1 Can the project be financed by transfer between chapters of the current budget ?
                                                                                   yes
 6.2 Is a supplementary budget necessary ?                                             no
 6.3 Will future budget appropriations be necessary ?                              yes
 Observations:
  (1) The aid has been calculated on the basis of last year's price for the raw
      material in the non-EEC producer countries.
      Given the various assumptions, it is likely that the measure will cost some
       ECU 5.1 million more than the amount provided for in the 1990 PDB.
 ---pagebreak---                                                                              •#-
                   PI CHE P'IMPACT SUR LA COMPETITIVITE ET L'EMPLOI
I.       Quelle est la Justification principale de la mesure ?
         Augmenter la compétitivité du transformateur européen d'agrumes
II. Caractéristiques des entreprises concernées
         En parti cul 1er :
           - Y a-t-l1 un grand nombre de P.M.E. ?       Oui
            - Note t'on des concentrations dans des réglons :      Oui
              - éliglbles aux aides régionales des E.M. ?
              - éliglbles au Feder ?
 I I I . Quelles sont les obligations Imposées directement aux entreprises ?
                              Néant
 IV. Quelles sont les obligations susceptible» d'être Imposées
          Indirectement aux entreprises via les autorités locales ?
                              Néant
V.        Y a-t-lI des mesures spéciales pour les PME ?      Aucune
            - lesquelles ?
 VI. Quel est l'effet prévisible ?
             - sur la compétitivité des entreprises ?     Positive
             - sur I'emploi ?
 VII. Les partenaires sociaux ont-Ils été consultés ?          Non
             - avis des partenaires sociaux                î
                                                                                 •ft
 ---pagebreak---                                                                    ISSN 0254-1475
                                                             COM(89) 464 final
                                                     DOCUMENTS
EN
                                Catalogue number : CB-CO-89-451-EN-C
                                                             ISBN 92-77-53571-7
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