CELEX: 51989PC0061
Language: en
Date: 1989-02-06
Title: PROPOSAL FOR A COUNCIL REGULATION ( EEC ) ESTABLISHING A SYSTEM OF TRANSITIONAL AIDS TO AGRICULTURAL INCOME

No C 97/12                            Official Journal of the European Communities                                18. 4. 89
                                                              II
                                                     (Preparatory Acts)
                                                COMMISSION
             Proposal for a Council Regulation (EEC) establishing a system of transitional aid to agricultural
                                                           income
                                                     COM(89) 61 final
                                    (Submitted by the Commission on 9 February 1989)
                                                       (89/C 97/09)
THE COUNCIL OF THE EUROPEAN COMMUNITIES,                         Whereas, in order to ensure the necessary transparency
                                                                 of such temporary aid and compliance with Community
                                                                 conditions laid down to prevent any jeopardizing of the
Having regard to the Treaty establishing the European            Community's objectives as regards market reform in
Economic Community, and in particular Articles 42 and            particular, the aid to income under consideration should
43 thereof,                                                      be granted subject to prior approval by the Commission
                                                                 of programmes of agricultural income aid drawn up by
                                                                 the Member States planning to introduce such measures;
Having regard to the proposal from the Commission,               whereas, in order to avoid distortion of competition
                                                                 between agricultural producers, such programmes must
                                                                 in particular establish and comply with the link existing
                                                                 between the aid provided for and the prejudice resulting
Having regard      to  the   opinion   of   the   European       from the adjustment of conditions on the markets;
Parliament,
                                                                 Whereas account should also be taken of the fact that
Having regard to the opinion of the Economic and
                                                                 the holdings of the type concerned are unevenly
Social Committee,
                                                                  distributed in the Community and are relatively concen-
                                                                 trated in the Member States where budget funds and,
                                                                 consequently, the possibilities for granting transitional
Whereas the Community's policy on agricultural                    aid are much more restricted than in other Member
structures has been supplemented by certain measures              States; whereas the cohesion sought by the Single Act
designed, in particular, to make it easier for farmers to         therefore requires, in the latter cases in particular, a
adapt to the new circumstances obtaining on agricultural          Community contribution towards the income aid granted
markets in the context of the current reform of the               to persons practising farming as their main occupation;
common agricultural policy and in particular of the               whereas the level of the Community contribution must
adjustment of the market organizations; whereas,                  be varied according to the requirements and the financial
however, such measures may not provide sufficient                 resources available in the various regions of the
assistance for certain categories of family holdings;             Community;
Whereas, this being the case, and in accordance with the
                                                                 Whereas the Community contribution is to be financed
conclusions of the European Council held in February
                                                                  from appropriations entered in a special chapter of the
 1988 in Brussels, Member States should have the option
                                                                  general budget of the Community; whereas, in order to
of granting transitional aid to agricultural income to
                                                                  facilitiate the management and financial execution of the
provide backing for the efforts of weak agricultural
                                                                  system, the financing rules should be those applying to
holdings, which would otherwise not be able to adapt
                                                                  the EAGGF Guarantee Section under Regulation (EEC)
successfully owing to their economic and structural
                                                                  N o 729/70 of the Council of 21 April 1970 on the
situation, to adjust; whereas such aid also contributes
                                                                  financing of the common agricultural policy ('), as last
towards maintaining a fair standard of living for the
                                                                  amended by Regulation (EEC) No 3183/87 (2),
agricultural community in accordance with the objective
laid down in Article 39 (1) (b) of the Treaty and
therefore towards safeguarding the balances necessary to
the vitality of rural society, given the requirements
 relating to the protection of the landscape and of the           O OJ No L 94, 28. 4. 1970, p. 13.
environment;                                                      (2) OJ No L 304, 27. 10. 1987, p. 1.
 ---pagebreak--- 18. 4. 89                              Official Journal of the European Communities                              No C 97/13
HAS ADOPTED THIS REGULATION:                                                                Article 3
                                                                  1.    Programmes of agricultural income aid (hereinafter
                           Article 1                             referred to as 'PAIA') shall constitute the general
                                                                 framework laid down by the Member State concerned
1.     To assist family holdings to overcome income diffi-       for granting income aids at national, regional and/or
culties as a result of the new circumstances obtaining on        sectoral level.
the markets in the context of the reform of the common
agricultural policy, a Community system is hereby
instituted whereby the Member States may be authorized           2.     Each PAIA shall include at least the following
to grant transitional aid to agricultural income, here-          details:
inafter referred to as 'income aid'.
                                                                  (a) the actual objectives sought by the introduction of
Articles 92, 93 and 94 of the Treaty shall not apply to               the PAIA;
the aid granted in conformity with this Regulation.
                                                                 (b) the geographical area and, where appropriate, the
2.     Income aid may contribute in particular to:                    agricultural sector or sectors concerned by the PAIA;
(a) safeguarding income at fair levels during a process of       (c) definition of the potential recipients of the income
     adaptation which may affect the structure, organ-                aid in compliance with the conditions laid down in
     ization or management of agricultural holdings;                  Article 4;
(b) alleviating the impact, in terms of income, arising          (d) detailed rules for granting the aid in compliance with
     from the financial obligations of agricultural                   the conditions laid down in Articles 5 and 6, with
     holdings;                                                        justifications for the prejudice referred to in Article
                                                                      5, as intended to serve as a basis for the granting of
(c) supporting the level of agricultural income during                the aid;
     efforts to diversify the farmer's activity outside agri-
     culture.                                                     (e) the maximum overall annual amount of estimated
                                                                      expenditure resulting from the application of the
                                                                      PAIA, with details of the amount likely to qualify for
It must not stimulate agricultural production nor bring
                                                                      a Community contribution under Articles 8 and 9.
about distortion of competition.
3.     The Community shall contribute towards the                 3.    Where the geographical scope of the PAIA is not
financing of the income aid on the terms laid down in            the national territory, it shall be delimited in terms of the
                                                                 administrative regions of the Member State concerned;
Title II.
                                                                  however, it may relate only partially to one or more
                                                                 administrative regions where the socio-structural charac-
                                                                 teristics of agricultural holdings are broadly homo-
                           TITLE I                               geneous in the planned area of application.
                  The system of income aid
                                                                                            Article 4
                           Article 2                              1.    The farmers and members of their families working
                                                                 on the holding may qualify for income aid only where
Income aid may only be authorized within the scope of            the overall family income amounts, per work unit, to less
this system where:                                               than a threshold determined by the Member State
                                                                 concerned, having regard to the national provisions in
(a) it is covered by a programme drawn up by the                 force for similar measures and the objectives and detailed-
     Member State concerned in accordance with Article            rules on granting the aid laid down in the PAIA in
     3;                                                           question.
(b) the recipients meet the conditions laid down in              That threshold may in no case exceed 70 % of the
     Article 4 (1);                                               national gross domestic product or 90 % of the regional
                                                                 gross domestic product per member of the working
(c) it does not exceed in amount the level determined in         population.
     accordance with Article 5; and
                                                                  'Overall family income' means the income of the farmer
(d) it is granted in compliance with the special detailed         and of those members of his family working on the
     rules referred to in Article 6.                              holding, including any non-agricultural resources.
 ---pagebreak--- No C 97/14                              Official Journal of the European Communities                                 18. 4. 89
2.     The agricultural income of the holding to be taken         In no case may aid exceed ECU 2 500 per year per work
into account shall be established by means of accounting          unit on the holding concerned.
figures or other objective criteria relating to the holding,
to be determined in accordance with the procedure laid             3.     In order to achieve the objectives in Article 1 (2):
down in Article 13.
                                                                   (a) the amount of the aid to be granted to individual
                                                                        recipients may be capitalized;
                           Article 5
                                                                  (b) for the application of the threshold referred to in
1.     The level of income aid shall be determined on the               Article 4 (1) and for the purpose of applying Article
basis of the prejudice arising for potential recipients from            5, the net agricultural income of the holding may be
the adjustment of the markets in the context of the                     used using accounting figures.
reform of the common agricultural policy and of the
adjustment of the market organizations; it shall be estab-        The detailed rules for the application of this paragraph
lished, as the Member State concerned so chooses, on a            shall be determined in accordance with the procedure
flat-rate or individual basis.                                    laid down in Article 13.
2.     Where the level of the aid is established on a                                         Article 7
flat-rate basis for the PAIA application area:                     1.    Where a Member State plans to introduce or
                                                                  amend a PAIA, it shall notify the Commission of the
(a) the prejudice referred to in paragraph 1 shall, in            draft programme or the proposed amendment. The noti-
     compliance with the detailed rules to be adopted in          fication must contain the information required for
     accordance with the procedure provided for in                assessing whether the conditions laid down in this Regu-
     Article 13, be established overall on the basis of a         lation are met.
     multi-annual reference period for the holdings in the
     area and/or the PAIA sector in question, expressed           At the request of the Commission, the Member State
     as a total amount;                                           concerned shall provide additional information for
                                                                   assessment purposes.
(b) the aid   granted to individual recipients in the area
     and/or   the sector of application may not exceed            2.      Member States may not implement the planned
     overall  the amount referred to in (a); it may be             measures before the Commission has approved the PAIA
     granted   on the basis of objective data relating to the     concerned.
     holding  (UAA, standard gross margin, etc.).
                                                                  When making its assessment the Commission shall
                                                                  ensure in particular that the planned measures are in
3.     Where the level of the aid is established indi-             accordance with the provisions of this Regulation,
vidually, it may at most cover the prejudice referred to in        having regard to its objectives.
paragraph 1, suffered by the holding concerned. That
prejudice shall be established on the basis of a multi-            3.    Within three months from the date of receipt of a
annual reference period and in compliance with detailed            draft PAIA or amendments thereto, the Commission,
rules to be determined in accordance with the procedure            having consulted the Committee provided for in Article
laid down in Article 13.                                           13, shall decide whether to approve the draft PAIA or
                                                                  the amendments thereto provided that all the particulars
                                                                   listed in Article 3 and, where appropriate, the additional
                           Article 6
                                                                   information referred to in the second subparagraph of
 1.    The detailed rules for granting the income aid shall        paragraph 1, are provided.
be governed by the following special conditions:
                                                                   4.     The first subparagraph of paragraph 2 shall be
 (a) it may not be granted on the basis of the prices              without prejudice to the Member State concerned
     and/or quantity of production of the holding                  implementing in the framework of a PAIA approved in
     concerned;                                                    accordance with paragraph 3 income aid measures which
                                                                   are more restrictive than those laid down in the PAIA in
(b) it may be granted to an individual recipient only              question as regards in particular:
     degressively and for no more than a maximum of
                                                                  — the geographical or sectoral scope,
     five years from the first payment;
                                                                  — the detailed rules for the grant in accordance with
(c) the Member States shall exclude from income aid                     Articles 4 and 5, and
     such households where farming accounts for a
     negligible part of the income.                                — the duration of application
                                                                   of income aid actually granted.
 2.    In order to prevent distortion of competition,
 maximum amounts of aid per work unit, expressed as a              5.     In accordance with detailed rules to be determined
percentage of the average regional or national income              in accordance with the procedure laid down in Article
 shall be fixed in accordance with the procedure laid              13, the Member States shall notify the Commission
 down in Article 13.                                               periodically of progress in approved PAIAs.
 ---pagebreak---  18. 4. 89                             Official Journal of the European Communities                                          No C 97/15
                          TITLE II                                                             Article 10
          ' Community financing of income aid                    T h e measures   provided for in Articles 8 and 9 shall be
                                                                 financed from   appropriations entered in a special chapter
                                                                 of the general  b u d g e t of the C o m m u n i t i e s . T h e financing
                          Article 8                              rules shall be  those applying to the E A G G F G u a r a n t e e
                                                                 Section.
 1.    Income aid which is part of a PAIA approved in
accordance with Article 7 (3) and which, in addition to
the conditions in Articles 4, 5 and 6, relates to holdings
                                                                                               TITLE III
where the farmer or a member of his family working on
the holding possesses adequate occupational skill and                                   G e n e r a l provisions
competence and practises farming as his main occupation
shall be eligible for Community financing.
                                                                                               Article 11
For the purposes of applying this condition, Article 2 (5)       Without prejudice to other specific or sectoral
and (6) of Council Regulation (EEC) No 797/85 (')                Community provisions, agricultural income aid shall be
shall apply.                                                     prohibited if the conditions or rules governing the
                                                                 granting thereof differ from those laid down in this
                                                                 Regulation, and in particular if the amount of such aid is
2.     However, only that proportion of income aid shall
                                                                 determined by reference to prices, quantities of agri-
be eligible for Community financing which:
                                                                 cultural products or inputs.
(a) is granted in respect of not more than two work
     units per holding and amounts to not more than              Article 92, with the exception of paragraphs 1 and 2
     ECU 1 000 per work unit per year, and                       thereof, and Article 94 of the Treaty shall not apply to
                                                                 such aid.
(b) constitutes, in the second, third, fourth and fifth
     years of its grant to individual recipients, 85, 70, 55                                  Article 12
     and 40 % respectively of the income aid granted to
                                                                 Detailed rules for the application of this Regulation shall
     them in the first year in accordance with Articles 4
                                                                 be adopted in accordance with the procedure laid down
     and 5.                                                      in Article 13.
3.     To ensure that the appropriations entered in the
                                                                                               Article 13
Community budget are not exceeded by expenditure,
additional conditions relating to the eligibility of PAIAs        1.   A Management Committee for Agricultural Income
may be laid down in accordance with the procedure laid           Aid, hereinafter referred to as the 'Committee', shall be
down in Article 13, the EAGGF Committee having been              set up comprising representatives from the Member
consulted on the financial aspects.                              States and chaired by a Commission representative.
                                                                 2.    Within the Committee the votes of the Member
                          Article 9
                                                                 States shall be weighted in accordance with Article
1.     The Community contribution to the financing of            148 (2) of the Treaty. The chairman shall not vote.
the income aid shall amount to:
                                                                 3.    Where the procedure laid down in this Article is to
— 70 % of the eligible amount where the holding                  be followed, the chairman shall refer the matter to the
    concerned is located in a region covered by objective        Committee either on his own initiative or at the request
     1 in Article 1 of Council Regulation (EEC) No               of the representative of a Member State.
     2052/88 O ,
                                                                 4.    The Commission representative shall submit a draft
— 25 % of the eligible amount in other cases.                    of the measures to be adopted. The Committee shall
                                                                 deliver its opinion on the measures within a time limit
                                                                 which the Chairman may lay down depending on the
2.     However, in accordance with the procedure laid            urgency of the matters submitted for examination.
down in Article 43 (2) of the Treaty, an intermediate            Opinions shall be delivered by a majority of 54 votes.
rate of Community contribution may be fixed for certain
areas covered by objective 5 (b) in Article 1 of Regu-
                                                                 5.    The Commission shall adopt measures which shall
lation (EEC) No 2052/88.
                                                                 apply immediately. However, if they are not in
                                                                 accordance with the opinion of the Committee, such
                                                                 measures shall be immediately notified by the
(1) OJ No-L 93, 30. 3. 1985, p. 1.                               Commission to the Council. In this event the
(2) OJ No L 185, 15. 7. 1988, p. 9.                              Commission may defer application of the measures
 ---pagebreak--- No C 97/16                             Official Journal of the European Communities                                  18. 4. 89
which it has adopted for not more than one month as              2.    Having examined that report, the Council, acting in
from such notification.                                          accordance with the procedure laid down in Article
                                                                 43 (2) of the Treaty, may decide, in the light of
The Council, acting by a qualified majority, may take a          experience and of the development of economic
different decision within one month.                             conditions and agricultural incomes, to amend this
                                                                 system where necessary.
6.    The Committee may examine any other matter
                                                                                           Article 15
referred to it by its chairman, either on his own initiative
or at the request of the representative of a Member              This Regulation shall enter into force on . . .
State.
                                                                 It shall apply until. . . [four years after the entry into
                                                                 force].
                          Article 14
                                                                 No PAIA may be approved after that date pursuant to
1.    At the end of a three-year period starting from the        Article 7 and no income aid provided for in a PAIA
entry into force of this Regulation, the Commission shall        approved before that date may be granted to individual
submit to the Council and to the Parliament a report on          recipients after . . [nine years after the entry into force].
the operation of the system provided for in this Regu-
lation, on the basis of the information provided by the          This Regulation shall be binding in its entirety and
Member States.                                                   directly applicable in all Member States.