CELEX: 51989PC0437(01)
Language: en
Date: 1989-09-14
Title: PROPOSAL FOR A COUNCIL REGULATION ( EEC ) AMENDING REGULATIONS ( EEC ) NO 2764/75 LAYING DOWN THE RULES FOR CALCULATING A COMPONENT OF THE LEVY ON PIG CARCASES AND ( EEC ) NO 2766/75 ESTABLISHING THE LIST OF PRODUCTS FOR WHICH SLUICE-GATE PRICES ARE TO BE FIXED AND LAYING DOWN THE RULES FOR FIXING THE SLUICE-GATE PRICE FOR PIG CARCASES

COMMISSION OF THE EUROPEAN COMMUNITIES
                                                   437
                                           C0MC89)     final
                                           Brussels, 14    September 1989
                            Proposal for a
                       C0UNUL_RE6yLATigN_(!§C)
           amending Regulations (EEC) No 2764/75 laying down
  the rules for calculating a component of the levy on pig carcases
  and (EEC) No 2766/75 establishing the list of products for which
          sluice-gate prices are to be fixed and laying down
     the rules for fixing the sluice-gate price for pig carcases
                            Proposal for a
                       COUNCIL REGULATION (EEC)
       amending Regulation (EEC) No 2765/75 on the general rules
  to be applied In the event of a substantial rise in pigmeat prices
                       (presented by the Commission)
 ---pagebreak---                                                                C^       kl>
                             EXPLANATORY MEMORANDUM
Subject:  Proposal for a regulation amending Regulations (EEC) No 2764/75 and
          2766/75 laying down the rules for calculating the levy and the
          sluice-gate price for slaughtered pigs.
1.  The sluice-gate price for slaughtered pigs is made up of three components:
    -  an amount equal to the value on the world market of the quantity of
       feed grain equivalent to the quantity of feedingstuffs required for the
       production in third countries of one kilogramme of pigmeat,
    -  the extra cost, in relation to feed grain, of feedingstuffs other than
       grain required for the equilibrium of the feed ration for pigs,
    -  a standard amount representing overhead costs of production and
       marketing.
    As the parameters for the calculation of these elements have not been
    reviewed since 1979 and taking into account the technical, genetical and
    management improvements which have occurred in the pigmeat sector since
    that time, a review and updating of these parameters is considered
    necessary.
    -  The quantity of feedstuff necessary in third countries for producing
       1 kg of pigmeat has been last fixed in 1975 by Regulation (EEC)
       No 2766/75 (OJ No L 282, 1.11.1975, p. 25) at a value of 5,46 kg
       (Article 2(1) and (2)). Since that time, the improvement of pig breeds
       in genetic terms as well as the improvement in management of feeding
       and farming have led to a reduction in nutritional needs of the
       animals, which, on the basis of available information at present, can
       be fixed at 4,79 kg of compound feed to produce 1 kg of pigmeat in
       third countries.
    -  The composition of the grain ration, fixed by the same regulation at
       40% barley, 35% maize and 25% oats should be adjusted to the more
       frequent composition on the world market where the 25% of oats can be
       replaced by 25% of wheat.
    -  The present standard amount expressing the overhead costs of producing
       and marketing of pigmeat has been fixed at 38,69 ecu/100 kg on the
       basis of information available in 1979 by Regulation (EEC) No 772/79.
       In the light of the most recent data available on the overhead costs of
       pig farms in third countries, this standard amount should be increased
       to 43,57 ecu/100 kg to be in line with the cost evolution occurred on
       the world market.
    -  The cost of the other components than grain in the compound remains
       still the same, that is to say 15% of the value of the feed grain
       mixture.
 ---pagebreak---                                       - 2 -
2. The levy for slaughtered pigs is made up of two components:
   -   the difference between prices within the Community and on the world
      market for the quantity of feed grain required for the production in
      the Community of one kilogramme of pigmeat adjusted regularly according
      to the price evolution on the world market;
       7% of the average of the sluice-gate prices applied during the four
      quarters preceding the 1 April of each year.
   -  The composition of the feed grain mixture has last been fixed by
      Regulation (EEC) No 2764/75 (OJ No L 282, 1.11.1975, p. 21) and
      consists of: 40% barley, 20% maize, 10% oats, 20% rye and 10% sorghum.
      The cost of this mixture being comparable to the cost of the same
      quantity of the mixture currently composed of 40% barley, 20% maize and
      40% wheat, it is proposed to substitute the present composition by the
      latter; that is to say, 40% barley, 20% maize and 40% wheat, which
      would simplify the calculation in the case of the levies and would
      unify the components within the feed grain mixture for the two
      instruments making part of the trade system with third countries and to
      adjust the feed grain mix to the market situation within the Community.
   -  The quantity of feed grain necessary to produce 1 kg of pigmeat within
      the Community has last been fixed at 4,2 kg by Regulation (EEC)
      No 2764/75. The favourable evolution within the Community pigmeat
      production allows for a reduction of this quantity down to 3,6 kg on
      the basis of figures available for 1989.
3. In conclusion, it is proposed to adjust the parameters mentioned hereafter
   and to fix them as follows:
   -  quantity of feed grain necessary to produce 1 kg of pigmeat within the
      Community: 3,6 kg;
   -  quantity of complete compound necessary to produce 1 kg of pigmeat
      within third countries: 4,79 kg;
   -  standard amount for overhead costs of producing and marketing within
      third countries: 43,57 ecu/100 kg;
   -  composition of the feed grain quantity within the Community:
      40% barley
      40% wheat
      20% maize;
   -  composition of the feed grain quantity within third countries:
      40% barley
      35% maize
      25% wheat.
                                                                              /
 ---pagebreak---                                          Draft
                      REGULATION (EEC) No         OF THE COUNCIL
                                     of
                  amending Regulations (EEC) No 2764/75 laying down
         the rules for calculating a component of the levy on pig carcases
         and (EEC) No 2766/75 establishing the list of products for which
                 sluice-gate prices are to be fixed and laying down
             the rules for fixing the sluice-gate price for pig carcases
THE COUNCIL OF THE EUROPEAN COMMUNITIES,
Having regard to the Treaty establishing the European Economic Community,
Having regard to Council Regulation (EEC) No 2759/75 (1) of 29 October 1975 on
the common organization of the market in pigmeat (2), and in particular
Article 9(2) and 12(4) thereof,
Having regard to the proposal from the Commission,
Whereas the quantity of feed grain required for the production, within the
Community, of one kilogramme of pigmeat as well as the percentages of the
different feed grains making part of this quantity mentioned in
Article 9(1)(a) of Regulation (EEC) No 2759/75 has been fixed at
4,2 kilogrammes of a mixture of feed grain of which the percentages of the
different components have been established at
Barley     40%         Rye        20%
Maize      20%         Sorghum    10%
Oats       10%
by Council Regulation (EEC) No 2764/75 of 29 October 1975 laying down the
rules for calculating a component of the levy on pig carcases, as last amended
by Regulation (EEC) No 4160/87 (4);
(1)  0J No  L 282, 1.11.1975,   p. 1.
(2)  0J No  L 129, 11. 5.1989,  p. 12.
(3)  0J No  L 282, 1.11.1975,   p. 21.
(4)  0J No  L 392, 31.12.1987,  p. 46.
                                                                               4
 ---pagebreak---                                        - 2 -
Whereas, in view of the evolution, in the course of the last years, of the
 conditions for pigmeat production within the Community, it is appropriate to
adjust this quantity of feed grain to the requirement for producing one
kilogramme of pigmeat in establishing this quantity in the form of a
 transformation coefficient of 1 : 3,6; whereas, in fact, this coefficient
 indicates the ratio between one kilogramme of pigmeat and the required
quantity of feed grain for its production; whereas, furthermore, to take into
account the conditions of production within the pigmeat sector, it is
appropriate to take as a representative composition of this quantity within
the Community, a mixture of grain with the following composition:
Barley     40%
Wheat      40%
Maize      20%;
Whereas the quantity of feed grain equivalent to the quantity of compound feed
required for the production, within third countries, of one kilogramme of
pigmeat, according to Article 12(2)(a) of Regulation (EEC) No 2759/75, has
been fixed at 5,46 kilogrammes of a mixture of feed grain composed of
Barley     40%
Maize      35%
Oats       25%
by Council Regulation (EEC) No 2766/75 of 29 October 1975 establishing the
list of products for which sluice-gate prices are to be fixed and laying down
the rules for fixing the sluice-gate price for pig carcases (5), as last
amended by Regulation (EEC) No 3906/87 (6);
Whereas, in view of the evolution in the course of the last years, of the
conditions for pigmeat production within third countries, it is appropriate to
adjust the quantity of feed grain equivalent to the quantity of compound feed
required for the production, within third countries, of one kilogramme of
pigmeat, and to establish this quantity at 4,79 kilogrammes of feed grain with
the following composition:
(5) 0J No L 282, 1.11.1975, p. 25.
(*) OJ No L 370, 30.12.1987, p. 11.
 ---pagebreak---                                        - 3 -
Barley     40%
Maize      35%
Wheat      25%;
Whereas the standard amount for overhead costs of production and marketing
according to Article 12(2)(c) of Regulation (EEC) No 2759/75 has last been
fixed at 38,69 ecu per 100 kilogrammes of slaughtered pigs by Council
Regulation (EEC) No 772/79 of 18 April 1979 (7);
Whereas the overhead costs for production and marketing, and in particular
those for production, found on the world market have increased substantially
in the course of the last years; whereas the standard amount representing such
costs needs to be increased to a level of 43,57 ecu per 100 kilogrammes of
slaughtered pigs,
HAS ADOPTED THIS REGULATION:
                                    Article 1
Regulation (EEC) No 2764/75 is amended as follows:
1.  Article 1 is replaced by the following:
                                    "Article 1
    The quantity of feed grain specified in Article 9(1)(a) of Regulation
    (EEC) No 2759/75 shall amount to 3,6 kilogrammes composed as follows:
    Barley    40%
    Maize     20%
    Wheat     40%".
(7) OJ No L   99, 21. 4.1979, p. 1.
 ---pagebreak---                                        - 4 -
 2.  In Article 2(1), the figure "4,2" is replaced by the figure "3,6".
3.   In Article 3(1), the figure "4,2" is replaced by the figure "3,6".
                                     Article 2
Regulation (EEC) No 2766/75 is amended as follows:
1.  Article 2(1) is replaced by the following:
    "1. The value of the quantity of feed grain mentioned in Article 12(2)(a)
         of Regulation (EEC) No 2759/75 shall be equal to the price of 4,79
         kilogrammes of feed grain with the following composition:
         Barley     40%
         Maize      351
         Wheat      25%".
2.  In Article 2(2), the figure "5,46" is replaced by the figure "4,79".
3.  In Article 3(2), the figure "38,69" is replaced by the figure "43,57".
                                     Article 3
This Regulation shall ester into force on 1 October 1989.
This Regulation shall be binding in its entirety and directly applicable in
all Member States.
Done at                                           For the Council
                                                                              ?
 ---pagebreak---               FINANCIAL              STATEMENT
                                                                                 !
                                                                            *•*•       5.9.1989
i. BUDGET HEADING :    Chapter    100                                       APPtOBIATIONS :     1419
2. TITLE : Proposal for a CounciI Regulation amending Regulations (EEC) no 2764/75
    and no 2766/75 laying down the rules for calculating the levy and the sluice-
    gate price for slaughtered pigs
3. LEGAL sAsis : Regulation 2759/75 as last amended by Regulation (EEC) no 1249/89
A. AIWS OF PROJECT»    Revision and up-dating of parameters to be employed for the
    calculation of levies and sluice-gate price while taking into account technical,
    genetical and management improvements in the pigmeat sector.
S. FINANCIAL IMPLICATIONS
5.0 EXPENDITURE
                                          PERIOD OF 12 MONTHS
                                                                     /"wn
                                                              CURRENT FINANCIAL YEAR   FOLLOWING  FINANCIAL TEAR
                                                                                             /ING ilNANCI
     - CHARGED TO THE EC BUDGET
       (REFUNDS/INTERVENTIONS)
     ~ NATIONAL ADMINISTRATION                                          p.m.
     - OTHER
5.1 RECEIPTS
     - OWN RESOURCES OF THE EC
       (LEVIES/CUSTOMS DUTIES)                  - 3,2                                            - 3,2
     - NATIONAL
                                                1991             1992            1993                 1994
5.0.1 ESTIMATEO EXPENDITURE
5.1.1 ESTIMATED RECEIPTS                       - 3,2            - 3,2          - 3,2                 - 3,2
5.2 «ETHOO OF CALCULATION
    The revision brings about a reduction of the sluice-gate price as well as for
    the levies of about 8,71. The impact can be estimated as:
    levy: 65.000 t x (513,2 - 468,6) ECU/t x 1,110 (DT) - -3,2 inio ECU (B)
6.0 CAN THE PROJECT IE FINANCED FRON APPROBATIONS ENTERED IN THE RELEVANT CHAPTER OF THE CURRENT BUOGET ?
                                                                                                            XXKKKX
6.1 CAN THE PROJECT BE FINANCED BY TRANSFER BETWEEN CHAPTERS OF.THE CURRENT BUDGET ?
                                                                                                            XXXftX
 6.2 IS A SUPPLEMENTARY BUOGET 8E NECESSARY T
                                                                                                            KXK**
6.3 WILL i-'UTURE BUOGET APPROBATIONS BE NECESSARY ?
                                                                                                            XXKXdi
 OBSERVATIONS :
 ---pagebreak---                              EXPLANATORY MEMORANDUM
Subject: Proposal for a regulation amending Regulation (EEC) No 2765/75 on the
         general rules to be applied in the event of a substantial rise in
         plgmeat prices
1.  In the communication from the Commission to the Council on the market
    situation in the plgmeat sector (COM (88) 428 final) It has been established
    that the plgmeat sector is characterised by quite a regular cycle with
    upward and downward movements in production and prices.
    Taking into consideration the conclusions of this communication In which the
    Commission has shown Its willingness to propose adequate measures In order
    to provide for greater stability on this market and also the conclusions of
    an initiative report of the European Parliament (PE 128.119) concerning the
    crisis in the plgmeat sector, the Commission considers It necessary to
    submit to the Council the present proposal amending Regulation (EEC)
    No 2765/75 on the general rules to be applied In the event of a substantial
    rise in prices In the plgmeat sector.
    In fact the present situation with regard to prices of slaughtered pigs
    within the Community and the forecasts with regard to the plgmeat market and
    animal foodstuffs In the coming months make It necessary, as soon as
    possible, to approve measures aimed at avoiding a repetition of a new
    serious crisis in the plgmeat sector.
2.  Article 11 of Regulation (EEC) No 2769/75 on the common organization of the
    market in plgmeat contains measures to be applied In the event of a
    substantial rise in prices. The general rules on this matter are laid down
    in Regulation (EEC) No 2765/75 of the Council of 29 October 1975. These
    "shortage" rules determine the conditions under which a substantial rise In
    plgmeat prices Is recorded on the Community market as well as the measures
    to be taken in such a situation (suspension, even partial, of import levies
    according to the so-called management committee procedure).
    Experience has shown that, because of the strong Interdependence between the
    prices for slaughtered pigs and the related production costs as well as the
    complexity of the formula, It Is not possible any longer to apply these
    rules. In fact, these rules were not applied until the end of 1969 and at
    the beginning of 1970 (EEC Regulations No 1956/69 and 530/70).
 ---pagebreak---                                      - 2 -
   As a result It Is proposed to amend the method of calculation In order to
   define a situation of substantial price rise. Such a situation exists if,
   following a general increase In prices In all the regions of the Community,
   the average price for slaughtered pigs recorded on the representative
   markets of the Community stays, for a period of nine months, at a level
   higher than the last average of those monthly prices recorded over a period
   of 36 months.
   This new formula would have meant that the "penury" rules could have been
   applied during years of high cyclical prices as was the case In 1969, 1973,
   1976, 1980, 1982 and 1984/85; that Is to say, in periods of good economical
   results preceding every time a period of low cyclical prices, brought about
   too strong expansion in pig herds.
   However, during periods of low cyclical prices this formula would not have
   been appiled.
3.  it is worth remembering that the measures to be taken In the case of
   "shortage" are discretionary and are also dependent on elements included In
   Article (1) paragraph 2 of (EEC) Regulation No 2765/75, being
   -   the number of sows mated;
   -   the price of piglets
   -   the results of surveys op pig herds and
   -   foreseeable trends In market prices for plgmeat.
    It is worth adding to these elements the evolution of prices for feedstuffs
   for pigs. The fluctuations In these prices have proved to be of crucial
   importance for pig economy In recent years.
                                                                                /lo
 ---pagebreak---                                     Draft proposal
                 REGULATION (EEC) No          / O F     THE  COUNCIL
                                 Of              1989
            amending Regulation (EEC) No 2765/75 on the general rules
       to be applied in the event of a substantial rise in plgmeat prices
THE  COUNCIL  OF   THE    EUROPEAN  COMMUNITIES,
Having regard to the Treaty establishing the European Economic Community;
Having regard to the proposal from the Commission;
Having regard to Council Regulation (EEC) No 2759/75 of 29 October 1975 on the
                                                (1)
common organization of the market in plgmeat        , as last amended by Regulation
                  (2)
(EEC) No 1249/89      , and In particular the second paragraph of Article 11
thereof;
Whereas Article 11 of Regulation (EEC) No 2759/75 provides that when a
substantial price rise is recorded on the Community market and this situation Is
likely to continue, thereby disturbing or threatening to disturb the market, the
necessary measures may be taken;
                                                                    (3)
Whereas Council Regulation (EEC) No 2765/75 of 29 October 1979          lays down
the relevant general rules;
Whereas In order to better respond to the evolution In prices of plgmeat and the
cost of production, greater flexibility In the practical application of this
measure should be Introduced in order to record the presence of a substantial
rise In prices on the Community market;
Whereas It has also become necessary, In the light of acquired experience and
with a view to estimate the eventual continuation of this rise, to take account
of the evolution in prices of feedstuffs for pigs;
HAS  ADOPTED   THIS    REGULATION :
(1) OJ No L 282, 1.11.1975, p. 1
(2) OJ No L 129, 11. 5.1989, p. 12
(3) OJ No L 282, 1.11.1975, p. 23
                                                                                    yf
 ---pagebreak---                                        - 2 -
                                     Article 1
Article 1 of Regulation (EEC) No 2765/75 Is replaced by the following
                                    "Article 1
1.  A substantial price rise within the meaning of Article 11 of Regulation
    (EEC) No 2759/75 shall exist when, as a result of a general price rise in
    all regions of the Community, the sliding average of monthly prices for
    slaughtered pigs recorded on the representative markets of the Community
    stays during the last nine months at a level higher than the sliding average
    of these prices recorded during the last 36 months.
2.  The substantial price rise Is considered to be likely to continue if there
     is an Imbalance between supply and demand In plgmeat to continue on account
    of :
    a)   the results of surveys and estimates made in pursuance of Council
         Directive 76/630/EEC of 20 July 1976, concerning surveys of pig
                    (4)
         production     to be made by Member States and especially the
         conjunctural evolution of the number of sows;
    b)   the foreseeable evolution of the market prices for slaughtered pigs and
         for piglets;
    c)   the evolution of the prices for feedstuffs for pigs."
                                     Article 2
This regulation shall enter Into force on the third day following Its
publication In the official Journal of the European Communities.
It Is applicable from 1 October 1989.
This Regulation shall be binding in its entirety and directly applIcable In all
Member States.
Done at Brussels,                                 For the Council
(4) OJ L 223, 16. 8.1976, p. 13
                                                                                 /it
 ---pagebreak---                 FINANCIAL              STATEMENT
                                                                             o.tt :    5.9.1989
1.    BUDGET HEADING :   chapter 100                                         APPROBATIONS :     1419
                                                                                                                  —J
2. TITLE :        Proposal for a Council Regulation amending Regulation (EEC) no 2765/75
       on the general rules to be applied in the event of a substantial rise in
       pigmeat prices.
3. LEGAL    BASIS  :   Regulation (EEC) no 2759/75, as last amended by R. (EEC) no 1249/89
*. AIMS OFPROJECTI Proposal to amend the method of calculation for the conditions on
       which on the Community market a substantial rise in prices is recorded as well
       as measures to be taken in this case (suspension, even partial, of import
       levies) according to.the Management Committee procedure.
5. FINANCIAL IMPLICATIONS                  PER100 OF 12 MONTHS CURRENT FINANCIAL YEAR  FOLLOWING LINANCIAL YEAR
5.0 EXPENDITURE
       - CHARGED TO THE EC BUDGET
         (REFUNDS/INTERVENTIONS)
       - NATIONAL ADMINISTRATION
       - OTHER
5.1 RECEIPTS
       - OWN RESOURCES OF THE EC
         (LEVIES/CUSTOMS DUTIES)                 p.m.                                           p.m. (1)
       - NATIONAL
                                                 1991            1992               1993             1994
5.0.1 ESTIMATED EXPENDITURE
5.1.1 ESTIMATED RECEIPTS                         p.m.            p.m.               p.m.             p.m.
5.2 METHOD OF CALCULATION         The amendment in the method of calculation does not have a
       financial impact, in itself. However, with the modification the Commission
       intends a suspension of 50X of the levies for the period 1.10.89-31.12.89. This
       means a 'loss in levies of: 65.000 t x 3/12 x 500 ECU/t x 501 x 1,11 (DT) -
       -4,5 MECU.B. This suspension brings an increase in imported quantities about
       of 50.000 tons. As a result there is en increase in levies of 50.000 t x
       250 ECU/t x 1,11 (DT) - +13,9 MECU.B. The global impact of the suspension will
       therefore be about +9,4 mio ECU (B) for the period of 1.10.89 until 31.12.89.
6.0 CAN THE PROJECT BE FINANCED FROM APPROBATIONS ENTERED IN THE RELEVANT CHAPTER OF THE CURRENT 8U06ET ?
                                                                                                           XKttXK
 6.1 CAN THE PROJECT BE FINANCED BY TRANSFER BETWEEN CHAPTERS OF.THE CURRENT BUDGET ?
                                                                                                           XX*XX
 6.2 IS A SUPPLEMENTARY BUOGET BE NECESSARY ?
                                                                                                           XK#X*
 6 . 3 WILL FUTURE BUOGET APPROBATIONS BE NECESSARY ?
                                                                                                           XWfNO
 OBSERVATIONS :
                                                                                                                     A3
 ---pagebreak---  ---pagebreak---                                                                      ISSN 0254-1475
                                                              COM(89) 437 final
                                                      DOCUMENTS
EN                                                                              03
                                Catalogue number : CB-CO-89-403-EN-C
                                                             ISBN 92-77-52885-0
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