CELEX: 51993PC0161
Language: en
Date: 1993-04-21
Title: Proposal for a COUNCIL REGULATION (EEC) providing for an offer of compensation to certain producers of milk or milk products temporarily prevented from carrying on their trade

COMMISSION OF THE EUROPEAN COMMUNITIES
                                            COM(93) 161 final
                                            Brussels, 21 April 1993
                         Proposal for a
                    COUNCIL REGULATION (EEC)
  providing for an offer of compensation to certain producers
      of milk or milk products temporarily prevented from
                    carrying on their trade
                 (presented by the Commission)
 ---pagebreak---                                      - 2 -
                            EXPLANATORY MEMORANDUM
I. INTRODUCTION
     When the additional levy scheme in the milk and milk products sector
     was introduced in 1984 the Community legislation did not provide for
     the allocation of a reference quantity to producers who had not
     delivered or sold milk during the reference year adopted by the Member
     State as a result of a prior undertaking not to market milk or milk
     products or to convert dairy herds. The reference year was 1983 in all
     cases.
     The Court of Justice, in its Mulder and Von Deetzen judgments of
     28 April 1988 (Cases C-120 and C-170/86), declared the legislation
     invalid because it infringed the principle of the protection of the
     legitimate expectations of the producers concerned in not providing for
     the allocation of reference quantities to them.
     As a result of the judgments the Council amended Regulation (EEC)
     No 857/84 adopting general rules for the application of the additional
     levy in the milk and milk products sector(*) by adopting Regulation
     (EEC) No 764/89(2), which added an "Article 3a" to the former
     Regulation. That Article in turn was declared partly invalid by the
     Court in its Spagl and Pastâtter judgments of 11 December 1990 (Cases
     C-189 and C-217/89) as being too restrictive with regard to the
     producers concerned. To remedy that situation, the Council adopted
     Regulation (EEC) No 1639/91(3) which amended Article 3a of Regulation
     (EEC) No 857/84. In other words, after some delay, two series of
     allocations of "special" reference quantities were made to the "SLOM"
     producers.
     In March 1989 and February 1990 respectively five of these SLOM
     producers again applied to the Court under Article 215 of the EEC
     Treaty to rule that the Community should make good the damage they had
     suffered as a result of the exclusion they had undergone under the
     terms of the original Community legislation. In its judgment of 19 May
     1992 in Joined Cases C-104/89 and C-37/90, Mulder et al and Heinemann,
     the Court ordered the Commission and the Council to make good the
     damage suffered by the five applicants insofar as the original
     Community legislation did not provide for the allocation of a reference
     quantity to producers who, pursuant to an undertaking given not to
     deliver milk or to convert dairy herds, did not deliver any milk during
     the reference year adopted by the Member State concerned.
     It should be borne in mind that about 120 000 producers participated in
     the SLOM scheme introduced by Council Regulation (EEC) No 1078/77(4)
     and that about 12 000 of them reverted to milk production after the
     above Council Regulations, (EEC) Nos 764/89 and 1639/91, were adopted.
     These twelve thousand are thus potential beneficiaries of the judgment
     made on 19 May 1992 on the award of damages.
(1)  OJ No  L 90, 1.4.1984, p. 13.
(2)  OJ No  L 84, 20.3.1989, p. 2.
(3)  OJ No  L 150, 15.6.1991, p. 35.
(4)  OJ No  L 131, 26.5.1977, p. 1.
 ---pagebreak---                                     - 3 -
     Of the twelve thousand producers, about three hundred have already
     applied to the Court for damages. The Court has suspended proceedings,
     firstly pending its own decision in principle on the first applications
     and secondly, since its decision in principle was a condemnation of the
     institutions, pending an overall solution to the problem.
     As well as the three hundred producers, about three thousand have to
     date submitted applications to either the Council or the Commission.
     After the Court's judgment and given the number of applications
     pending, the institutions could not remain silent. They declared their
     position in a Communication published in Official Journal No C 198 of
     5 August 1992 (5) in which they undertook to give full effect to the
     judgment of 19 May 1992 and granted a suspension for the future and
     erga omnes of the time bar on entitlement to claim damages pending an
     overall solution. The solution is contained in the present draft
     Council Regulation.
3.   The text comprises two sections:
         A legal section, which as regards content and form regulates the
         terms for awarding damages. Point II below is a detailed
         explanation of its contents.
         A financial section which, albeit very brief in the text, is the
         result of much research into devising a calculation method then
         setting the figures which appear in the Annex to the Regulation.
         Point III below sets out the details. Given the some 12 000
         potentially eligible producers, the proposed solution has had to be
         based on an overall approach. While account is not therefore taken
         of the situation of every injured producer, the calculation factors
         adopted are designed to work in favour of the clear majority of
         those concerned.
II. LEGAL ASPECTS
1.   The principle
     The solution adopted is to make an offer via the Member States to all
     the producers concerned which is to be accepted in full and final
     settlement. If the producer refuses to settle, he will have no
     alternative but to prove before the Court of Justice that his loss is
     greater than the offer, with all the attendant costs, risks and
     increased delay in payment. Given that the compensation has been
     generously calculated, it is hoped that the majority of the cases will
     be settled in this way.
2.   An examination, article by article
     The definition of producers concerned given in Article 1 is taken in
     very precise wording from the Court of Justice's judgment. The fact of
     not having received a reference quantity is the consequence of not
     having been able to deliver or sell milk or milk products during the
     reference year. The text thus refers, as did the Court, to the event
     causing the damage.
(5)  OJ No C 198, 5.8.1992, p.
 ---pagebreak---                                - 4 -
Article 2 establishes a direct link between actual resumption of milk
production and the existence of an injury which consisted in the fact
of not having been able to resume milk production in good time. The
term "definitive" qualifying the reference quantity allocated refers to
the "provisional" nature of the initial allocation of the quantity
which does not become definitive until after a trial production period
to which a number of obligations attach. Non-compliance with them may
mean loss of the quantity or a reduction of the definitive quantity.
This will have consequences for the calculation of the quantity used as
a basis for calculating the compensation.
Although the first series of SLOM producers received a definitive
allocation of quantities on 29 March 1991, this is not true of the
second series, whose right remains provisional until 1 July 1993. It
is therefore necessary to make different provisions taking into account
this time lag.
Article 3 may appear superfluous in that it merely states the principle
existing in each of the national legal systems regarding the voluntary
transfer of claims or the transfer of claims as the result, say, of a
death. The Article's inclusion is justified by the need to make it
clear to national administrations that an applicant for compensation
may be someone other than the producer and to specify how to deal with
such a situation.
The producers may not participate in a programme of cessation of milk
production nor sell or lease their holding in its entirety, even after
the definitive allocation of quantities, on pain of the withdrawal of
their quantities, which thus revert to the national reserve. As
always, the aim of these rules is to exclude from the applicants those
who merely wish to speculate based on the allocation of quotas. Such
conduct also precludes the existence of an injury to be compensated.
This is what is stated in Articles 4 and 5. These requirements expire
on 31 March 1992 in respect of the producers benefiting from the first
Regulation, No 764/89, in other words, the date has already passed, and
on 1 July 1994 for those benefiting from the second Regulation,
No 1639/91. The fact that that date has yet to expire is the reason
why an application, under these conditions, will be admissible only on
condition that the prescribed obligations be respected within that time
limit.
Article 6 defines the quantity on the basis of which the amount of the
compensation can be fixed. Some of the different elements of that
quantity were imposed by the Court judgment.
The terminus a quo is the quantity used to calculate the premium
granted under Regulation (EEC) No 1078/77. This is the last production
reference available. That quantity is increased by 1%. The original
quota rules gave Member States the choice of 1981, 1982 or 1983 as the
national reference year. If 1981 was chosen the quantity was increased
by 1%. The Court therefore feels that, in application of the principle
of equal treatment, the SLOM producers should benefit from the 1%.
 ---pagebreak---                                - 5 -
In addition, when the milk quotas were first implemented the Member
States had the obligation under certain conditions and the right under
others to reduce the reference quantities by a percentage to be
determined. The obligation referred to the necessity, if the Member
State chose 1983 as the reference year, for example, that the total of
the reference quantities should not exceed the overall national
guaranteed quantity set in the legislation on the basis of 1981 + 1%.
Since productivity increased everywhere between 1981 and 1983 there
could only be equality between the quantity based on 1981 + 1% and the
sum of the quantities       allocated on the basis of        individual
deliveries/sales in 1983 if the quantities were reduced by a percentage
which one could define as an abatement owing to an increase in
productivity. The Court has ruled that that abatement cannot be applied
to the SLOM producers. On the other hand, in order to establish a
national reserve, Member States could apply other abatements differing
according to category of producer or size of holding. The Court ruled
that such abatements must be applied to SLOM producers' special
quantities.
It should be noted that the Court judgment which is being implemented
here in respect of damages is more generous than the previous Court
decisions on the amount of the quantities to be allocated for
production.
Article 7 lists the various cases in which the quantity to be
compensated is likely to be reduced. The figure of 80% refers to a
provision of Article 3a of Regulation (EEC) No 857/84 under the terms
of which, once production of 80% of the quantity provisionally
allocated is exceeded, the producer definitively receives the entire
quantity allocated provisionally. On the other hand, if production is
lower than 80% he receives only the quantity actually produced. It
seems normal to measure the reparable damage taking into account the
above factors.
Article 8 defines the period during which the damage was suffered.
Normally, it can be postulated that the damage commenced at the end of
the obligation not to deliver milk or to convert dairy herds and ended
either on the date of entry into force of Regulation (EEC) No 764/89 or
on the date of entry into force of Regulation (EEC) No 1639/91.
However, the above is valid without prejudice to the rules governing
application of the period during which the applicant must act to avoid
being time barred in his claim. Article 43 of the Statute of the Court
of Justice provides for a time limit of five years within which to
institute proceedings from the occurrence of the event giving rise
thereto. It can be accepted that if such an event recurs day after day,
as is the case here, the event does not cease until the activity
concerned is resumed.
In accordance with the terms of the Communication of the Council and
the Commission published on 5 August 1992 in the Official Journal, it
has been acknowledged that the five-year time limit was interrupted for
the future on the date of any application addressed to the institutions
or on 5 August 1992 at the latest. The aim of this was to stem the
flow of applications which had by then reached about 2 000 and to
provide reassurance to the producers. As a result, the time limit is
currently interrupted and will not recommence until the expiry of the
time limit for submission of applications for damages as stipulated in
the present proposal and for producers who have not made an approach
prior to the expiry of the time limit.
 ---pagebreak---                                - 6
Article 9 provides for the case where production was resumed prior to
the allocation of a special provisional reference quantity. The period
in question here is that in which the damage is claimed to have been
suffered. If, however, production did in fact take place the damage is
reduced accordingly or completely annulled.
Articles 10 and Article 11 set out the procedure to be followed by the
Member States. Articles 12 and 13 lay down the provisions relating to
calculation of the total amount of compensation. These are set out in
detail in Section III of this Explanatory Memorandum.
Article 14 represents the conclusion of the entire procedure described
above. A figure will be proposed to the producer on behalf of the
Commission. The former will then have two months to accept it.
Acceptance involves signature of a receipt in full and complete
settlement and relinquishment in the future of any claim whatever in
respect of the damage. Non-acceptance of the offer within the time
limit, either explicitly or tacitly by silence on the part of the
producer, will then involve the producer in putting his claim for
actual damages before the Court, it being specified that the
institutions will not in the future be bound by the offer which was
made and refused in any future legal proceedings.
Article 15 comprises two sections dealing with the allocation of powers
to the Commission. Firstly, the Commission must be able to adopt
detailed rules for applying the Regulation adopted by the Council; this
is the traditional formula. The reference to the fees of appointed
agents is made for two reasons: the Community has every interest in
lawyers' not dragging producers into actions before the Court of
Justice, which is unnecessary since the institutions' communication in
the Official Journal of 5 August 1992. In addition, the same lawyer
may represent several hundred producers so the reimbursement should be
made a flat-rate sum. The interested parties are therefore duly
apprised, each in regard to his own case, about the way in which this
question will be settled.
The second part of Article 15 is a clause relating to force majeure
which would apply to highly marginal cases not settled by the present
Regulation. The Commission feels that it must be able to deal with
dossiers worthy of interest but falling outside the strict framework
established by the Council, for reasons both of equity and of
simplicity.
Article 16 states that the payment of compensation is an intervention
measure, as is clear from the legal basis chosen, i.e. Article 43 of
the EC Treaty. For budgetary reasons, all the expenditure should be
committed during the 1993 budget year even if, because of a carrying-
forward of appropriations, the payment itself does not occur until the
1994 budget year.
 ---pagebreak---                                     - 7 -
III. FINANCIAL ASPECTS
1.   Calculation of the compensation offer should be based on paragraph 26
     of the judgment of 19 May 1992. This stipulates that the difference
     between the following two figures is to be calculated:
     -   one: the income which the non-marketer would have obtained from
         milk deliveries had he not been unlawfully excluded from milk
         production for a specific period;
         two: the income which the non-marketer actually obtained during the
         period of his exclusion or - if higher - the income which he could
         have obtained given equivalent efforts.
     Determining these figures is a very difficult process. Even income
     from milk deliveries cannot be determined directly from the milk price
     paid out by the relevant dairy to its associated producers. Production
     costs vary from one holding to the next; for instance, they vary
     according to the size of the holding, the production method and the
     skill of the farmer. Using these criteria alone, incomes fluctuating
     between ECU 6 and 14 per 100 kg milk are found for the year 1988/89
     within relatively small regions.
     Secondly, the milk prices actually paid out are anything but uniform.
     Their main determinant is the production capacity of the dairy; the
     market support measures for butter and skimmed-milk powder implemented
     by the Community have only a limited bearing on the price paid to the
     milk producer. This price may vary by up to 10% even between
     neighbouring dairies.
     The situation of individual non-marketers varies not merely in terms of
     their hypothetically obtainable income, but also in terms of
     opportunities to obtain income from other sources. In this case the
     main factor is the holding's structure and position, which are the
     decisive factors in its opportunities for making alternative use of
     available agricultural resources. In some cases pasture was turned
     into arable land, in others the alternative use was restricted to
     keeping suckler cows, sheep or fattening bulls. Geographical location
     is also important for the availability of other sources of income, in
     particular the existence of industrial job opportunities in the
     vicinity. The possibility of direct marketing of special crops in
     nearby centres of consumption should also be considered. Ultimately, a
     non-marketer's opportunities of obtaining non-agricultural income will
     be greatly affected by his personal circumstances, particularly his
     professional qualifications or the existence of retraining facilities.
     All in all, the factors to be taken into account in determining income
     from potential milk deliveries and from other sources of income are
     extremely varied. Calculating them in each individual case would
     require so much time, labour and expense that it would prejudice the
     interests of the farmer in obtaining compensation as quickly as
     possible.
 ---pagebreak---     Because of these problems and the number of people eligible for
    compensation as a result of the 19 May ruling (about 12 000) only a
    broad approach will be possible under the present compensation
    arrangements, i.e. flat-rate calculations. That will of necessity mean
    that not all the particular features of each individual case can be
    taken into account. To avoid wherever possible any disadvantages which
    might result from that approach, solutions which were in the interests
    of the parties concerned were selected in the calculation of the
    various factors.
4.  The planned      compensation   amounts   are   based   on   the   following
    cons iderat ions:
    (a) Paragraph 28 of the 19 May judgment states that the compensation
        calculation must be based on the reference quantity to which the
        non-marketer was entitled. Thus, the compensation is not based on
        the number and yield of the cows present at the time the
        undertaking not to market was entered into, but merely on the
        quantity of milk which, according to Community rules, the producer
        excluded    from   production    could   have   marketed    during   the
        compensation period. Consequently all calculations are based on
        compensation per 100 kg non-marketed milk.
    (b) The basis for calculating the potential income from milk deliveries
        was the gross margin from dairy farming, a method which on the
        income side covers sales of milk, calves born to dairy cows and the
        residual value of the dairy cow, and on the expenditure side covers
        deduction of variable costs (**). Since variable costs cease to
        exist as soon as production is stopped, they were disregarded in
        the calculation of loss of income. In contrast, fixed costs for
        land, labour and capital were not deducted. In economic terms,
        therefore, the gross margin on which the calculation was based
        represents the margin which a milk producer needs to cover his
        fixed costs (land, labour, capital).
        The figures in Table 1 give the gross margins per 100 kg milk
        produced in budget ecus( 7 ).
(6) For details of the method see Commission Decision 85/377/EEC,
    OJ No L 220, 17.8.1985.
(7) The conversion rates used for the years in question can be found in the
    annexed table.
 ---pagebreak---                                                       - 9 -
Table 1 : Gross margin in ECU (budget) per 100 kg of milk
 Member State           1990/91    1989/90    1988/89     1987/88 1986/87   1985/86    1984/85
 Belgique/Belgiê           23.7       24.8       22.2        18.9    18.7      18.1       16.5
 Danmark                   23.1       23.8       21.2        19.0    18.6      18.0       16.1
 Deutschiand               21.7       23.1       22.1        19.6    19.2      18.8       17.5
 France                    21.4       20.8       20.2        19.0    20.0      19.6       17.9
 Ireland                   23.7       26.5       23.9        20.9    19.6      20.9       19.0
 Luxembourg                28.7       27.3       23.6        22.0    20.5      17.8       17.0
 Nederiand                 21.5       23.7       22.8        21.2    19.0      16.5       15.8
 United Kingdom            18.9       19.3       18.7        15.8    14.6      16.7       14.3
Source: FADN
                       The data In Table 1 are based on the Farm Accountancy Data Network
                       (FADN) 1 . The gross margins were calculated using data transmitted
                       by the Member States under the FADN system in accordance with the
                       above method.
                       However, it should be noted that it was not possible to derive the
                       gross margins directly from the accounting data. Special
                       calculations still had to be made concerning allocation of variable
                       costs to dairy farming and estimation of the value of calves and
                       cull cows. On the other hand, use of FADN results ensured that a
                       uniform database could be used for all Member States.
                 (c)   To test the reliability of the gross margins per 100 kg milk shown
                       in Table 1 a credibility test was carried out using the standard
                       gross margins (SGMs) for dairy cows published in Official Journal
                      C 268/91 (J/07). The figures in Table 1 were converted to a gross
                      margin per cow and compared with the SGMs in the above publication.
                      The gross margins given in Table 1 for France and Ireland were a few
                       percent higher than the maximum SGMs for those countries. In the
                       cases of the Netherlands and Luxembourg, for which only national
                       average SGMs were given, the gross margins lay above the averages.
                      The maxima for Denmark and the United Kingdom were also almost
                       reached, which indicates that the gross margins in Table 1 are on
                       the whole realistic and if anything somewhat generous in the final
                      analysis. Only in the case of Germany are the maximum SGMs above
                       the figures obtained from the FADN data. However, these are only
                       regional peaks which are in no way representative of the average
                      yield In Germany. The gross margins obtained from the FADN data are
                      almost double the minimum SGM for Germany.
                 See FADN Handbook.    Commission of the European Communities, Luxembourg,
                 1990.
 ---pagebreak---                                           bi<
     (d) There are two reasons for not basing the calculation of
         compensation directly on the above standard gross margins: firstly,
         the figures in OJ No C 268/91 are based on the average for the
         years 1985-87, while 1988/89 must in the first instance be used for
         the compensation arrangements because of the time bar question; and
         secondly, the figures in the above publication relate to gross
         margins per cow. Because of the very varied milk yields per cow
         throughout the Community it is not possible to convert the gross
         margins per 100 kg milk on the basis of the data published in
         OJ No C 268/91. In the light of the above it seems appropriate not
         simply to use the often very different gross margins as the
         calculation basis but merely to use them for comparison purposes
         with the figures obtained from the FADN.
    (e) According to the calculation method given in paragraph 26 of the
         19 May ruling, income from replacement activities must be deducted
         from potential income, in other words, according to the method used
         here, from the gross margins shown in Table 1. In the Court's
         view, the question of whether a non-marketer actually obtained
         alternative income during the compensation period and if so, how
         much, is not the decisive factor in itself. Paragraph 33 of the
         ruling stipulates that the decisive factor should be the income
         that a non-marketer could have obtained if he had made reasonable
         efforts to find an alternative source of income. It is clear that
         this reasoning prevents the calculation from being based merely on
         the actual alternative income obtained by the non-marketer during
         the compensation period.
(8) See FADN Handbook.   Commission of the European Communities, Luxembourg,
    1990.
 ---pagebreak---                               - 10 -
(f) In contrast to what has been claimed by many non-marketers, the
    compensation sum ultimately to be paid to them cannot merely be
    calculated by simply comparing the gross margins from milk
    deliveries with those obtained from fattening bulls, keeping sheep
    or cereal farming. Such an approach is clearly wrong because
    giving up milk production liberates the production factors (land,
    labour and capital) in such a combination that they could not be
    fully exploited if only a single alternative form of production
    were employed (e.g. fattening bulls). A non-marketer desirous of
    limiting the extent of the damage would therefore have had to seek
    combinations which enabled him, as far as possible, to use the
    three production factors (land, labour and capital) released to the
    full. In view of the        variety   of  alternative   sources of
    agricultural and non-agricultural income it is only possible to
    arrive at a calculation method valid for all non-marketers by
    disregarding specific forms of alternative production and assigning
    a financial value to the production factors liberated.
(g) The reasoning developed at (f) above also holds for producers who
    had accepted the conversion premium. Unlike producers who had
    taken the non-marketing premium, the undertaking for those with the
    conversion premium was only of four years duration and in most
    cases expired in 1983/84, i.e. at a time when those concerned knew
    that they were not eligible for the allocation of an individual
    reference quantity. At the end of their four-year undertaking, the
    producers who had opted for the conversion premium found themselves
    also free to choose an alternative activity in which they could
    fully exploit the production factors (land, labour and capital).
    The calculation rules pertaining to the non-marketing premium can
    thus also be applied to those producers who had taken the
    conversion premium.
(h) As has already been pointed out, land, labour and capital are the
    main production factors in agriculture. The profitability of their
    use is largely dependent on the size of the holding. The
    assumption can be made for the standard production method
    considered here (stall housing) that efficiency increases with
    increased production. On holdings with milk production in excess
    of 120 000 kg the Community average labour requirement is about 60
    hours per annum; in contrast, holdings producing less than 50 000
    kg milk per annum require about 80 hours per cow (for Germany see,
    for example, the KTBL Taschenbuch Landwirtschaft, Daten fur die
    Betriebskalkulation, 14th edition, 1988, pp. 200-201). As a result,
    relatively large holdings ceasing milk production liberate fewer
    working hours per 100 kg milk than smaller holdings. It is
    therefore essential to make a distinction according to the non-
    marketers' reference quantities in the compensation arrangements;
    in addition, this is the only criterion which meets the requirement
    of paragraph 32 of the 19 May 1992 ruling, which involves using the
    profitability of a "representative farm" for the non-marketer in
    question as a basis for the calculation.
 ---pagebreak---                                 11
(i) In the case of the production factor, labour, the criterion
    proposed is the average gross hourly wages for agricultural workers
    in the Member States (Table 2 ) . These data were calculated by
    Eurostat on the basis of a Community survey for 1984, 1986 and 1988
    (Eurostat, Earnings in Agriculture, 1986 and 1988). The hourly
    wages given in national currencies have been converted into budget
    ecus using the annual average of the daily currency rates for the
    years in question (for conversion rates see the Commission Report
    on the Agricultural Situation in the Community, 1989, Table 1 ) .
    The hourly wage rates for 1985, 1987 and 1989 were estimated.
 ---pagebreak---                                                                                             - 12 -
Table 2 : Wage costs In E C U txidgel} per lOO kg of m l k
I                                      1990/81
                         <50000kg <120000kg >120000kg
                                                                             1869/80                            1988/89
                                                                 <5000Qkg :120000kg >120000kg <50000kg <120000kg >12O00Qkg
                                                                                                                                              1987/88
                                                                                                                                 <50000kg < 120000 kg > 120000 kg
Member State
  Betglqua/Belgié               85          7.8           6.8          82         8.0         6.8        82         8.1      65        82         8.1         6.9
  Danmark                      132         11J8           85          12X1       105          9.0       112         85      8.4       105         82          7.9
  Deutschland*1                10.4         8.1           75          132         8.0         7.7        85         «.7      7.4      105         8.8         75
  France                        75          es            55           8.1        7X1         6.0        8.0        7X1     6.0        6.0        75          6.0
  Ireland                       75                        5.7          75         6.6         5.6        75         65       5.7       7.8        6.7         5.7
                                            6.6
  Luxembourg *2                 85                        65           8.7        7J6         65         8.7        75       65        85         75          6.4
                                            7.4
  Nederland                     85                        6.6          85         7.4         6.4        8.4        75       65        85         75          62
                                            7.7
   United Kingdom               8.1                       6.1          7.7        6.7         5.7        7 2        6 5      5.4       65         5.8         5.1
                                            7.1
                                       1886/87                                1865/86                           1984/85
 Member State             <50000kg <120000kg > 120000 kg         <50000kg <120000kg >120000kgl <50000kq <120000 kg >120000 kg
   Belglque/Betgie              OJO         7.8           65           8.7        75          6.5        8.1        8.0
   Oanmark                      85          8.4           72           8.8        75          8.7        82         72
   Deutschland*1                82          8.1           6.8          8.0        78          65         85         7.7
   France                       85          7.4           8.4          8.1        7.1         6.1        7.7        65
   Ireland                      7.7         6.8           55           72         6.3         5.4        75         8.1
   Luxembourg *2                8J8         75            6.4          85         75          OS         8.7         75
   Nederland                    82          72            8.1          82         72          8.1        8.1        7.1
   United Kingdom               82          5.4           4.7          6.4        55          43         6.4         5.6
 Labour/cow in h/year. < 50000 k g -                       80
 Labour/cow In h/year. < 120000 kg -                       70
 Labour/cow Inn/year: > 120000 k g -                       60
 • 1 : StatistJsches Jahrbuch ûberEmahrung. LaivMrtschaftijndForsten 1991. Tab. 363.
  •2: Belgium wages rates have been used lor calculating the wage costs In ECU/100 kg milk.
 Way of calculation: Labour/cow In h/year • Wage per h / MSk Production per cow
 Sources:
 FADN;
 Wages: Earnings In agriculture 1888, Eurostat, Series 3C, p 5 ;
 Labour requirement per cow: KTBL-Taschenbuch Landwirtschaft, Oaten fur die Betriebskalkulation 1888, p200.
                              (J)     For the production factor land the rent customary in the country in
                                      question was used. Since a g r i c u l t u r a l land is generally leased for
                                     periods of several years the average rents for the years 1987/88 and
                                      1988/89 were used for each Member S t a t e ( c f . Table 3 ) .
                         Table 3 : Rent costs in ECU (budget) per 100 kg of milk
                                                       I"                                            Milk/ha       Rent costs
                           Member State                          Rent/ha             LU/ha        in 100 kg        per 100 kg
                           Belgique/Belgiê                              91               2.5               111            0.8
                           Danmark                                    205                2.9               171            1.2
                           Deutschiand                                179                1.9                 94           1.9
                           France                                       78               1.4                 68            1.1
                           Ireland                                    112                 1.4                58            1.9
                           Luxembourg                                 120                 1.7                82            1.5
                           Nederiand                                  275                2.6               165             1.7
                          I United Kingdom              |              JO                 1^                102            0.7
                           Way of calculation: 1.) Milk/ha = LU/ha * Milk production percow;
                           2.) Rent costs = rent per ha/milk per ha.
                           Source: FADN
                                     For non-marketers, only the particularly low rents for absolute
                                     pasture (I.e. not useable for arable farming) were used; this is
                                     pasture for which there is no milk quota. This criterion is a
                                     considerable benefit to non-marketers with ploughable pasture land
 ---pagebreak---                               - 12 _ Wi
(k) For non-marketers, no allowance was made for alternative income
    from the capital liberated on cessation of production. This is
    because non-marketers had to indicate their willingness to resume
    milk production and therefore the possibility of alternative use of
    the capital was greatly reduced, although not entirely ruled out.
(1) Breaking down holding size according to milk production largely
    conforms to the non-marketing premium system. Only the alternative
    income for the smallest producers (< 30 000 kg milk) was omitted,
    since these holdings, with 5-6 cows, are not typical of northern
    European countries. Because of the relatively low productivity of
    labour on such small holdings a relatively large amount of labour
    is liberated on cessation of milk production;* as a result, income
    from replacement activities per 100 kg milk is very high.
    Compensating these small producers by placing them in the category
    proposed here (< 50 000 kg) would work to their advantage.
    It should also be noted that a production method typical of small
    and medium-sized holdings (stall housing) was used as the basis for
    calculating the labour requirement in hours per cow. Large
    holdings with a milk production of over 250 000 or 300 000 kg can
    manage with a relatively low labour requirement of about 35 hours
    per cow per annum because they can use different production methods
    (e.g. loose pen barns). Such holdings are also more easily able to
    find alternative uses for the factors liberated. As a result, the
    wage and rent figures used to calculate the alternative income for
    large holdings in particular will be clearly lower than actual
    income. In the end, this will compensate for the on average
    somewhat high estimate of the labour requirement per cow.
 ---pagebreak---                               - 13 -
(m) The above rent and wage figures had to be included in the
    calculation of alternative income irrespective of whether a non-
    marketer actually rented out the liberated land or entered into an
    employment contract. The reason for this is the indisputable fact
    that production factors were liberated upon cessation of milk
    production, and they have an economic value which must be credited
    to the non-marketer in each case. If he does not make use of these
    values he will in all probability not have made the increased
    efforts he should have made to limit the extent of the damage to
    him.
(n) The fact that only average wages and rents are used in the proposed
    calculation will work to the advantage of most of the non-
    marketers, for wages and rents are only paid if the employer/lessee
    sees the prospect of an income exceeding the sums in question.
    That there is a market for rented land and agricultural workers
    confirms the existence of agricultural production methods which
    will produce an alternative income exceeding the rents or wages in
    question.
 ---pagebreak---                              (o)       Table 4 shows income from replacement activities per 100 kg mi Ik in
                                       budget ecus. The figures are arrived at by adding together the wage
                                       and rent costs shown in Tables 2 and 3 respectively. As would be
                                       expected from the differences In labour productivity, the
                                       alternative income per 100 kg milk is lower for large holdings than
                                       for sma11 ones.
Table 4 : Aï: 3%-nathre Income In E C U (budget) per 100 kg of milk according to farni size*
                                       1880/81                                   1888/80                       1888/88                      1887/1886
 Member State          <S0O0Okg <120000kg > 120000 kg        < 5 0 0 0 0 k g < 120000kg > 120000kg <50000kg <120000kg > 120000kg <50000kg <120000kg >120000kg
Belgique/Belglê                85           8.7         75            10.0           85         7.7     10.0       85         7.7     1 0 5       85       7.7
Denmark                       14.4         125         11.1           132           11.7       102      12.4      115         85      11.7       10.4      8.1
Oeutschland                   125          115          8.7           12.1          105         85      115       105         85      115        10.7      8.4
France                         85           85          75              82           82         72       82        82         72       82         82       72
 Ireland                       85           85          75              85           65         75       85        8.6        75       85         8.8      7.7
 Luxembourg                    85           85          75            102            8.1        85      102        8.1        85      105         85       75
 Nederland                    105           8.4         85            102            8.1        8.0     10.1       85         85      105         85       75
 United Kingdom                85           75          65              85           7.4        8.4      75        75         6.1       75        6.6      5.8
                                        1886/87                                  188986                        1884/85
 Member State           <50000kg <120000kg > 120000 k g      < 5 0 0 0 0 k g <120000kg > 120000 kg <50000kg <120000kg > 120030kg
 Belgique/Belgiê               85           8.7         75              85           8.4        75      10.0       85         7.7
 Denmark                      105           85          6.4            10.1          85         75       8.4       8.4        7.4
 Oeutschland                  11.1         105          85             105           85         8.7     10.7       85         85
 France                        85           85          75              85           62         72       85        75         85
 Ireland                       8.7          8.7         7.7             82           65         7.4      65        6.1         72
 Luxembourg                   105           85          75             10.1          85         75      10.1       8.1         85
 Nederland                     85           85          75              85           65         75       85        85          75
 United Kingdom                65           6.1         5.4             7.1          65          55      7.1       65          55
Way of calculation: Alternative Income - Wage Costs + Rent Costs
Source: s. Table 2 and 3.
                            (p)      Analysis of gross margins has indicated that differences w i t h i n
                                      individual Member States are much greater than the averages
                                     calculated for each Member S t a t e .                              I t was therefore f e l t appropriate
                                      to use an average weighted according to milk production for the
                                     compensation periods in question and the holding sizes used in (h)
                                     above for the Member States a f f e c t e d by the compensation scheme.
         Table            y-Losses in green ECU per 100 kg of milk, EUR8* Average
          Year                          I                               Farm-Size
                                                <50000 kg                      <120000 kg             >120000 kg
          1990/91                                             9.4                          10.3                  11.2
          1989/90                                           10.4                           11.3                  12.3
          1988/89                                             9.9                          10.8                  11.8
          1987/88                                             8.1                               9                  9.9
          1986/87                                             7.8                            8.7                   9.6
          1985/86                                             8.6                            9.5                 10.4
           1984/85                       I                    7^4                            8.3                    9^
            =Belgium, Denmark, Germany, France, Ireland, Luxembourg, Netherlands, UK.
                             To conclude, Table 5 alone constitutes the Annex to the proposal
                             for a Regulation and the figures therein must be used by the Member
                             States in calculating each individual compensation sum.
 ---pagebreak---                              Average r ates used for conversion of national currencies into ecus in the
                             calculation of the FADN gross margins
                        1984
     JfAB.            '      /85   ! _1985/86 j__1986/87  _l_ 1987/88   l_1988/89   1 1989/90     ! 1990/91_   I 199 l/9 2*_i-
                =    = =IS= =r
 GERMANY ~~ T ~            ~ ~~~T              7            7           ~""         7             7            7              j
 1.7-30.6 I 2,23440 i                 2,19092   I 2,08533   i 2,07179    l 2,07836  I 2,052507    I 2,056781   I 2,047056     j
 FRANCE             1               I           I           I            I          I             I            I              ]
 1.1-31.121             6,87165 i     6,79502   ! 6,79976   I 6,92848    ! 7,03643  1 7,023869    I 6,914159   I 6,973335     ]
 ITALY            7            "~"7            7           7            7           7            7            7              "
 l.T-31.12! 1381,381 I 1447,987 ! 1461,874 I 1494,708 I 1537,333 I 1510,469 I 1521,941 I 1533,235 ]
 l?^-1^^           I 45,0821       I 44,7506   1 43,3588    I 43,1625   ! 43,538    ! 43,00838 1 42,35358 I 42,15573 \
 DJXE^B5URG"7             "       7           7 "          7           7           7             7""""        7          ~~"7
 1.5-30.4 I 45,0821                I 44,7506   ! 43,3588   I 43,1625    I 43,538    I 43,00838 I 42,35358 I 42,15573 1
 NETHERLANDS!                     !           7           7       "    7           I""          7             7              7
 1.5-30.4 I 2,52085               I 2,48571    I 2,36628   I 2,33006    I 2,3434   I 2,31834     I 2,31710    I 2,306624     j
 DRftWARK         I               I           !            !           !           i             !            I              ]  i
1 . 7 - 3 0 . 6 I 8,05392         ! 8,CC261   ! 7,86013    ! 7,94047   I 8,03059   I 7,92298     I 7,882836   I 7,924647     ;
 TRPl AND         I               I           ;            l           i           l             i            !              ]
1.1-31.121 0,725942               ! C,~1516 " : 0,733526   ! 0,775443 l 0,775671 ! 0,776818      I 0,767769   ! 0,767808     •
_____            _                _           _           _            _           _            _            _               -
1.3-28.2         ! 0,598295       ! CS^IS"1!  : C,688453   ! 0,697229  ! 0,656018  ! 0,686898    I 0,710474   ! 0,702624     ;
r,OFFQF           I               :        "  7           7           "7" "        7           ~!            I
1.1-3*1.12 1 8 8 , 3 4 0 3        : 1C5,~39: . 137,4246   I 156,2204 l 167,5756    I 178,8404 : 201,412       I 225,2157     ;
                                                                                                                            T
'SPAÏV           7                7           7           7            7           7            7            7~"7
1.1-31.121            126,5693 : 125.1645 : 137,4563 l 142,1915 l 137,6007 I 130,4058 ! 129,3156              ! 128,4685 ;
PORTUGAL ~"7                     7            ~         '"7            7           7            7            7              "
1.1-31.12 I 115,6801 ! 12:. 2515 : 147,0884               I 162,5811 ! 170,0592 i 173,4131 ! 181,1076        ! 178,6141 ;
SOURCE: CRONOS ICG: * finished on 19 August 1992,
 ---pagebreak---                                         16
                                  Proposal for a
                            COUNCIL REGULATION (EEC)
         providing for an offer of compensation to certain producers
              of milk or milk products temporarily prevented from
                             carrying on their trade
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^) f
Having regard to the opinion of the Economic and Social Committee(^),
Whereas when the additional levy scheme was introduced in 1984 in the milk
and milk products sector the Community legislation did not provide for the
allocation of an individual reference quantity to producers who, as a result
of a prior undertaking pursuant to Council Regulation (EEC) No 1078/77 of
17 May 1977 introducing a system of premiums for the non-marketing of milk
and  milk  products   and  for   the  conversion  of dairy  herds( 4 ), had not
delivered  or sold milk during the reference year adopted       by the Member
State;
Whereas, on the application of five producers, the Court of Justice, in its
judgment of 19 May 1992 in Joined Cases C-104/89 and C-37/90, ordered the
Community to make good the damage the said producers had suffered in so far
as the   original  Community   legislation  did  not in  fact provide   for the
allocation of an individual reference quantity to them;
Whereas in a Communication published in the Official Journal on 5 August
1992^5) the institutions undertook to comply in full with the judgment of
19 May 1992 as regards all potentially qualifying producers;
(1)  OJ No  C
(2)  OJ No  C
(3)  OJ No  C
(4)  OJ No  L 131, 26.5.1977, p. 1.
(5)  OJ No  C 198, 5.8.1992, p. 4.
 ---pagebreak---                                      - 17 -
Whereas the sheer number of those potentially eligible makes it impossible
to take each case into account on an individual basis and necessitates a
solution based on a flat-rate approach, to be       expressed in the form of an
offer from the institutions to be accepted in full and final settlement or
else rejected; whereas the factors on the basis of which the offer             is
calculated should be set out;
Whereas a direct link should be drawn between the actual resumption of milk
production in full compliance with the Community provisions which permitted
such resumption and the existence of an injury consisting in the fact of not
having been able to resume milk production in good time, despite the wishes
of the person concerned; whereas, in the same spirit and to ensure that a
producer has not resumed activity with the sole aim of speculating on the
supposed asset value of the reference quantity allocated to him, both the
broad entitlement to compensation and the amount of that compensation should
be subject to certain conditions;
Whereas,   subject to the above, the quantity       to be   compensated  must  be
calculated in accordance with the principles underlying the terms of the
Court j udgment;
Whereas in their Communication of 5 August 1992 the institutions waived, for
the benefit of potential beneficiaries and for the future, their right to
plead the five-year time bar on claims, laid down in Article 43 of the
Statute of the Court of Justice; whereas it can furthermore be accepted that
in  the   present  case  the  injury   ended   only   upon  resumption   of  milk
production; whereas, therefore, for the benefit of all those concerned, the
period for which compensation is being offered and the circumstances under
which the time bar on entitlement may once again come into effect should be
stated;
Whereas under the terms of the Court judgment the amount of the compensation
must equal the difference between, on the one hand, the income which those
concerned   would  have  received  from   marketing   milk   had  they  not  been
prevented   from doing  so and, on the other hand, the         income which  they
actually obtained during the same period or could have obtained by showing
reasonable diligence;
 ---pagebreak---                                         - 18 -
Whereas  the    number   of   variables    to  be   considered     first   of   all   in
reconstituting the income from milk production and secondly in establishing
alternative sources of income would lead in the end to the merits of each
case being looked at separately, which cannot reasonably be expected given
the  sheer   number   of   producers   involved;    whereas   only    a  comprehensive
estimate of the damage is thus feasible; whereas to avoid underestimating
the  injury,   however,     the  various    factors   chosen    for   calculating    the
compensation operate as a general rule to the benefit of the applicants;
Whereas the potential revenue from marketing is calculated from the gross
margin for dairy farming, which on the receipts side includes sales of milk,
calves born to dairy cows and the residual value of the dairy cow, and on
the expenses side deducts only the variable costs which are immediately
eliminated when milk production ceases and not the fixed costs relating to
land, labour and capital;
Whereas,   in  calculating    the   replacement   income,    no   account   was  taken,
inter alia,   of   the    alternative    income   from   the    capital   released    by
abandoning milk production, on the basis that the producer concerned wanted
eventually to resume such production and that the options for using the
capital otherwise were accordingly limited;
Whereas under the terms of this Regulation the Member States have all the
information required to calculate, once the application              is accepted, not
only the quantity to be compensated but also the period concerned and the
final amount of compensation to be offered on behalf of the institutions;
whereas in fact the operation can be carried out only with the aid and
through the agency of the Member States, which are indeed the sole holders
of  the   individual     items   of   information    required     to   calculate    each
compensation sum;
Whereas, should the settlement of some cases require the Member States to
seek the opinion of the institutions -          especially where such cases fall
outside the scope of this Regulation although qualifying on their specific
merits for acceptance - the Commission should have responsibility for making
the required decision,
 ---pagebreak---                                     - 19 -
HAS ADOPTED THIS REGULATION:
                                  Article 1
Compensation on the terms set out in this Regulation shall be granted to
those producers who have suffered loss as a result of being prevented by an
undertaking given under Council Regulation (EEC) No 1078/77 from delivering
or selling milk or milk products during the reference year selected by the
Member State concerned under the additional levy scheme in the milk and milk
products sector.
                                  Article 2
An application for compensation shall be deemed eligible if it is submitted
by a producer who has been allocated a definitive special reference quantity
under the conditions set out in Article 3a(3) of Council Regulation (EEC)
No 857/84(6), either on 29 March 1991 by virtue of Council Regulation (EEC)
No 764/89 (7) or on 1 July 1993 by virtue of Council Regulation         (EEC)
No 1639/91(8).
                                  Article 3
If the applicant for compensation and the person to whom the definitive
special reference quantity has been allocated are not one and the same, the
competent authority referred to in Article 10 shall decide to allow or
refuse the application after verifying:
-    in the case of the producer receiving the reference quantity, that he
     satisfies the conditions in this Regulation governing the right to
     compensât ion;
     in the case of the applicant for compensation, that the entitlement
     under which he is applying for compensation is a legitimate one.
(6) OJ No L 90, 1.4.1984, p. 13.
(7) OJ No L 84, 29.3.1989, p. 2.
(8) OJ No L 150, 15.6.1991, p. 35.
 ---pagebreak---                                         - 20 -
                                      Article 4
Notwithstanding    Article   2, an application     shall   not  be   accepted   if the
producer who has received the definitive allocation of a reference quantity
under   Regulation    (EEC)   No 764/89    either   has    not   complied   with    his
undertaking    not  to   take  part    in  any  programme    of   cessation   of   milk
production until 31 March 1992 or has sold or leased all his holding prior
to that date.
                                      Article 5
An application made by a producer who will receive the definitive allocation
of the reference quantity by virtue of Regulation (EEC) No 1639/91 on 1 July
1993  shall be accepted on condition that          he does not take part        in any
programme of cessation of milk production and that he does not sell or lease
his holding in its entirety on or before 1 July 1994.
                                      Article 6
The competent authority referred to in Article 10 shall determine the annual
quantity to be compensated on the basis of the quantity used to calculate
the premium granted pursuant to Regulation (EEC) No 1078/77, increased by 1%
and reduced by a percentage representing the reductions applied                in each
Member   State   to  the   reference    quantities   of   producers   established    in
accordance with Articles 2 and 6 of Regulation (EEC) No 857/84.
                                      Article 7
If the definitive      special quantity     allocated   pursuant   to Article    3a of
Regulation   (EEC) No 857/84    is   less than    80% of the    provisional     special
quantity or if the holding is sold or leased in part prior to 1 April 1992
or prior to 1 July 1994 (as the case may be), the annual quantity to be
compensated   shall   be  reduced   by   the  quantity   returned   to  the   national
reserve.
                                      Article 8
1.   The compensation shall be granted only for the period for which the
     right to compensation is not time-barred.
 ---pagebreak---                                         - 21 -
2.    For the purpose of determining the period for which the compensation
      shall be offered:
      (a) the date of interruption of the five-year time bar set by Article
          43 of the Statute of the Court of Justice shall be the date of the
          application addressed to one of the institutions of the Community,
          or in the case of an action brought before the Court of Justice the
          date on which the application is entered in its register, or at the
          latest the date of the Communication published in Official Journal
          No C 198 of 5 August 1992;
      (b) the date of commencement of the compensation period shall be five
          years prior to the date of interruption of the bar, but may not
          fall before 2 April 1984 or the date on which the non-marketing or
          conversion undertaking expired;
      (c) The date of termination of the compensation period shall be either
          29 March   1989    for  those   producers   who   received   the  special
          reference   quantity   by  virtue   of  Regulation   (EEC) No 764/89   or
          13 July 1991 for those producers who received the special reference
          quantity by virtue of Regulation (EEC) No 1639/91.
                                      Article 9
If production was resumed prior to allocation of the provisional            special
quantity the quantity to be compensated         shall be reduced    for the period
concerned by the quantities delivered or sold directly before that date.
                                     Article 10
1.   The application     for compensation must be addressed to the competent
     authority designated for that purpose in each Member State, using a
     form drawn up by that authority.
2.   Where a producer derives his right to a special reference quantity from
     Regulation    (EEC)   No 764/89   he  shall   send  his  application   to  the
     competent authority by 31 July 1993 at the latest; that date shall be
     replaced  by   31 August 1993    if the right was obtained      by  virtue of
     Regulation (EEC) No 1639/91.
 ---pagebreak---                                    - 22 -
     The limitation period under Article 43 of the Statute of the Court
     shall start to run afresh for all producers on whichever of the two
     dates referred to in the first subparagraph is appropriate, if the
     application referred to in that subparagraph has not been made prior to
      such date, save where the limitation period has been interrupted by
      virtue of the said Article 43 by an application to the Court of
      Justice.
                                  Article 11
The competent authority referred to in Article 10 shall check the accuracy
of the information provided by the producer and shall calculate the amount
 of the compensation on the basis of the quantity and the period in respect
 of which compensation is due, using the amounts specified in the Annex
 hereto*
% ^^                                Article 12
  The amount of the compensation shall be increased by default interest of 8%
  from 19 May 1992.
                                     Article 13
   The total amount of the compensation shall be converted       into national
   currency using the agricultural conversion rate applicable on the date on
   which this Regulation enters into force.
                                     Article 14
   Within a maximum of     four months    from receipt of the application the
   competent authority referred to in Article 10 shall, in the name and on
   behalf of the Council and the Commission, make an offer of compensation to
   the producer, accompanied by a receipt in full and final settlement.
   Where the producer derives his right to a special reference quantity:
         from Regulation (EEC) No 764/89, the compensation shall be paid on
         receipt of the returned receipt, duly approved and signed by the
         producer;
 ---pagebreak---                                         - 23 -
     from Regulation (EEC) No 1639/91, the compensation shall be paid - on
     condition that the receipt has been returned duly approved and signed
     by the producer - after       1 July   1994, so as to allow the      competent
     authority to check that Articles 5 and 7 have been complied with,
     unless the producer lodges with that authority a security amounting to
     115%    of the    compensation   fixed   prior  to  the  application   of   the
     abovementioned      Articles,  as   a   guarantee  of   compliance  with    the
     conditions set out in those Articles.
Failure to accept the offer within two months of its receipt shall mean that
it  shall   not  be  binding    in  the   future  on  the  Community  institutions
concerned.
Acceptance of the offer by the return to the competent authority of the duly
approved and signed receipt shall imply the relinquishment of any claim of
whatever nature against the Community institutions in respect of the loss
defined in Article 1.
                                     Article 15
Detailed rules for the application of this Regulation, and in particular the
provisions regarding payment of the costs of producers' agents             incurred
prior to 5 August 1992, shall be adopted by the Commission in accordance
with the procedure      laid down in Article 30 of Council Regulation          (EEC)
           9
No 804/68( ). The Commission, following the same procedure and at the duly
reasoned request of a Member State, may in exceptional circumstances allow
the eligibility of applications not covered by the cases provided for             in
this Regulation.
                                     Article 16
Financing of the payments made pursuant to this Regulation shall be deemed
to be intervention within the meaning of Article 3 of Council Regulation
(EEC) No 729/70( 10 ).
(9) OJ NO L 148, 26.6.1968, p. 13.
(10) OJ No L 94, 28.4.1970, p. 13.
 ---pagebreak---                                     - 24 -
Expenditure must be committed against 1993 appropriations on the basis of
applications received by the Member States, the total amount of which shall
be notified to the Commission not later than 30 September 1993.   The paying
agencies must effect the payments before 15 October 1994.
                                 Article 17
This Regulation   shall enter  into  force on the third   day following  its
publication in the Official Journal of the European Communities.
This Regulation shall be binding in its entirety and directly applicable in
all Member States.
Done at Brussels,                                    For the Council
 ---pagebreak---                                   - zç
                                   Annex
Compensation to be offered pursuant to Article 11 (ECU per 100 kg of milk)
    Year         I               Farm-Size
                      <50000 kg     < 120000 kg  > 120000 kg
    1990/91                  9.4           10.3         11.2
    1989/90                 10.4           11.3         12.3
    1988/89                  9.9           10.8         11.8
    1987/88                  8.1              9          9.9
    1986/87                  7.8            8.7          9.6
    1985/86                  8.6            9.5         10.4
   11984/85      I           7,4            &3            ^3
 ---pagebreak---                                                           - 26
      Financial                      Statement                         Date : 17.3.1993
1. BUDGET HEADING : B1-2090                                       APPROPRIATIONS: (PDSAB) ECU 255 ml 11 ion
2. TITLE :
   Draft Council Regulation providing for an offer of compensation to certain producers of milk or milk
   products temporarily prevented from carrying on their trade
3. LEGAL BASIS : Article 43 of the Treaty
4. AIMS
   As a result of the Court of Justice judgment of 19 May 1992 concerning certain milk producers
   excluded from the allocation of a reference quantity, this measure makes good the injury suffered
   by the said producers (known as SLOM producers) through the offer of flat—rate compensation.
5. FINANCIAL IMPLICATIONS          PERIOD OF 12 MONTHS   CURRENT FINANCIAL YEAR   FOLLOWING FINANCIAL YEAR
                                                                ( 1993    )            ( 1994      )
5.0 EXPENDITURE
      - CHARGED TO THE EC BUDGET
        (INTERVENTIONS)             + ECU 255 million     + ECU 255 mil lion               p.m.
5.1 REVENUE
      - OWN RESOURCES OF THE EC
        (LEVIES/CUSTOMS DUTIES)
      - NATIONAL
5.0.1 ESTIMATED EXPENDITURE
5.1.1 ESTIMATED REVENUE
5.2 METHOD OF CALCULATION
     See annex
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 ?
6.2 WILL A SUPPLEMENTARY BUDGET BE NECESSARY ?
                                                                                                          NO
6.3 WILL FUTURE BUDGET APPROPRIATIONS BE NECESSARY ?
                                                                                                          NO
COMMENTS :
 ---pagebreak---                                                                        ISSN 0254-1475
                                                                COM(93) 161 final
                                                       DOCUMENTS
EN                                                                                03
                                 Catalogue number : CB-CO-93-198-EN-C
                                                               ISBN 92-77-55069-4
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