CELEX: 51989PC0382
Language: en
Date: 1989-08-01
Title: PROPOSAL FOR A COUNCIL REGULATION ( EEC ) ON NATIONAL COMPENSATION AID GRANTED IN THE EVENT OF A FALL IN AGRICULTURAL PRICES IN NATIONAL CURRENCIES CONSEQUENT ON THE AUTOMATIC DISMANTLING OF THE MONETARY COMPENSATORY AMOUNTS

COMMISSION OF THE EUROPEAN COMMUNITIES
                                      C0M(89) 382 final
                                      Brussels, 1 August 1989
                            Proposal for a
                      COUNCIL REGULATION (EEC)
   on national compensation aid granted In the event of a fall in
    agricultural prices In national currencies consequent on the
     automatic dismantling of the monetary compensatory amounts
                    (presented by the Commission)
 ---pagebreak---                             EXPLANATORY MEMORANDUM
 In trying to cope with the problem that as a result of the automatic
dismantling of monetary compensatory amounts the prices for agricultural
products in the Member State concerned might fall, the Council has provided
for the possibility that Member States might compensate for these price
falls by granting national aids "according to a procedure to be determined
by the Council, acting by a qualified majority on a proposal from the
Commission" (Article 6(3) second subparagraph of Council Regulation (EEC)
No 1677/85, as amended by Council Regulation (EEC) No 1889/87). The present
Draft Regulation lays down the rules and procedures for granting such aids.
According to Article 6(3) of Regulation No 1677/85, the aids "must be
directed towards tiie soclo-structural field and may not be linked to
production". The present Draft Regulation contains a list of ail types of
national aids which are regarded as fulfilling these criteria.
 in trying to delimit the "soclo-structural field", and given the fact that
the term Is nowhere defined in Community legislation, reference has been
made to the measures indicated In the relevant Council Regulations namely
No 2052/88 (concerning the coordination and reform of the structural funds)
and Council Regulation No 4256/88. This definition would include aids
directed towards the soclo-structural field that in accordance with
established Community policy are considered compatible under Article
92(3)(c) of the Treaty on the grounds that they facilitate agricultural
development.
Moreover as common soclo-structural measures may Include action "to ensure
a fair standard of living for farmers" (Reg. 2052/88 Art. 3(3)(c)) or to
"support agricultural Incomes" (Art. 2(2) 4th Indent of Reg. 4256/88),
certain national operational aids that fall within this field, such as aid
to reduce administrative or insurance costs, have also been Included in the
present Draft Regulation.
 in order to take account of the nature of the aid In question as
compensation and thus In addition to what Is normally accepted by the
Commission, Article 1(2) of the draft makes provision for aid outwith the
normal limits set by the existing frameworks, provided that such aid is not
restricted to any agricultural sector.
Finally, aids which do not directly benefit the Individual farmer, have
also been included given their minimal link with production.
As the Draft Regulation only sets up the framework for the granting of
national aids, there will be no financial impact for the Community.
 ---pagebreak---                                 Proposal for a
                           COUNCIL REGULATION (EEC)
          on national compensation aid granted in the event of a fall in
      agricultural prices in national currencies consequent on the automatic
                 dismantling of the monetary compensatory amounts
THE COUNCIL OF THE EUROPEAN COMMUNITIES,
Having regard to the Treaty establishing the European Economic Community,
Having regard to Council Regulation (EEC) No 1677/85 of 11 June 1985 on
monetary compensatory amounts in agriculture (1), as last amended by
Regulation (EEC) No 1889/87 (2), and in particular the second subparagraph of
Article 6(3) thereof,
Having regard to the proposal from the Commission,
Whereas if under the arrangements for automatic dismantling of the monetary
compensatory amounts a fall in agricultural prices in national currencies
occurs as the result of a reduction, under the first subparagraph of Article
6(3) of Regulation (EEC) No 1677/85, in prices fixed in ecus, the Member
States concerned are authorized under the second subparagraph of that
paragraph to grant national compensation aid; whereas it is specified that
such aid must be directed towards the socio-structural field and may not be
linked to production; whereas detailed rules on this subject were left to be
determined;
(1) OJ No L 164, 24.6.1985, p. 6.
(2) OJ No L 182, 3.7.1987, p. 1.
                                                                              3
 ---pagebreak---                                        _ 9 _
Whereas in order to ensure that the aid in question meets the abovementioned
requirements and in particular is not linked to the volume or value of the
production of the recipients, the specific purposes for which such aid may be
given in the socio-structural field should be laid down;
Whereas the rules to be adopted must guarantee that the total amount of aid
granted does not exceed the losses for which it is intended to compensate,
HAS ADOPTED THIS REGULATION:
                                     Article 1
1.  In cases of application of the authorization provided for in the second
    subparagraph of Article 6(3) of Regulation (EEC) No 1677/85, national
    compensation aid   may be granted for the following socio-structural
    purposes:
    a) farm-level aid:
       -  aid for the dissemination of new techniques and the training of
          farmers;
       -  aid for technical assistance through the provision of information
          and for accounting support for farmers;
       -  aid to cover administrative costs in connection with the
          establishment and keeping of herd books;
       -  measures to improve agricultural product quality by quality control;
       -  measures to improve working conditions in agriculture:
          . encouragement of the use of replacements for holiday periods and
            periods of illness
          . training of replacement workers
          . encouragement: and development of joinc use of machines
                                                                               H
 ---pagebreak---                                      - 3 -
        - aid to cover in part the cost of insurance against extraordinary
          weather conditions
       - aid for combating animal and plant diseases
 b) agricultural product marketing aid:
    -   launching aid   for producer groups;
    -  aid   for publicity for agricultural products.
 c) aid for research in the following areas:
    -   computerization
    -  protection of the environment
    -  product diversification in line with CAP reform aims.
Should the need arise, the restrictions        imposed   by the
relevant frameworks determined by the Commission may be waived to
cover the grant      of the aid   indicated in paragraph 1.
No aid may however be:
-   determined on the basis of the volume or value of the production of
    recipients, or
-   restricted to one or more agricultural production sectors.
                                  Article 2
Member States shall take whatever action is necessary to ensure that the
total volume of compensation to be granted under the second subparagraph
of Article 6(3) of Regulation (EEC) No 1677/85 does not on a yearly basis
exceed the fall in gross agricultural product consequent on the tall in
prices referred to in that provision.
                                                                           5
 ---pagebreak---                                                   - 4 -
     To t h i s end:
     a) along with the n o t i f i c a t i o n indicated in A r t i c l e 93(3) of the Treaty they shall
        send the Cormrission an estimate of the yearly amount of the above l o s s e s and of
        annual expenditure on the compensation measures provided;
    b) compensation aid may not be granted for more than three years following
        the monetary event and the amount granted must f a l l by 25% per year.
                                               Article 3
The aid    referred to in this Regulation shall be subject to the procedure
provided for in Article 93 (3) of the Treaty.
                                               Article 4
This Regulation shall enter into force on the third day following that of 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
                                                             The President
                                                                                                         £
 ---pagebreak---                 Note on the Impact of leglslatory acts on
                            SME and employment
1. Administrative obligations resulting from the application of the
   legislation for the enterprise :
       None.
2. Advantages for the enterprise :
       No.
   The measure Is meant to compensate farmers for agricultural price falls
   resulting from the dismantling of monetary compensatory amounts. There
   will be no particular Impact on the competitiveness of enterprises or
   on non-agricultural employment.
3. Inconveniences for the enterprises :
       No.
4. Effects on employment :
       None (see 2 ) .
5. Y a-t-ll eu concertation préalable avec les partenaires sociaux ?
       Non.
6. Y a-t-ll une approche alternative moins contraignante ?
       Non.
                                                                           *
 ---pagebreak---  ---pagebreak---                                                                       ISSN 0254-1475
                                                               COM(89) 382 final
                                                       DOCUMENTS
 EN                                                                         03 10
                                 Catalogue number : CB-CO-89-338-EN-C
                                                             ISBN 92-77-52317-4
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