CELEX: 51989PC0328
Language: en
Date: 1989-07-12
Title: PROPOSAL FOR A COUNCIL REGULATION ( EEC ) MODIFYING COUNCIL REGULATION ( EEC ) NO 1316/86 OF 22 APRIL 1986 ADOPTING THE APPLICATION IN PORTUGAL OF REGULATION ( EEC ) NO 797/85 ON IMPROVING THE EFFICIENCY OF AGRICULTURAL STRUCTURES

COMMISSION OF THE EUROPEAN COMMUNITIES
                                                  C0MC89) 328 final
                                                  Brussels,  12  July 1989
                           Proposal for a
                      £2J2!£ik_Bi5yk£II2!L£§Kl
     modifying Council Regulation (EEC) No 1316/86 of 22 April 1986
  adopting the application in Portugal of Regulation (EEC) No 797/85 on
           improving the efficiency of agricultural structures
                     (presented by the Commission)
 ---pagebreak---                                                                       &^uK
                                EXPLANATORY NOTE
                                                                                y
1. Background
   At the time of entry into the Community of Portugal in 1986 a number of
   specific agreements were made and special regulations were adopted
   concerning the agricultural structure. The reason for this was the poor
   situation of agricultural structures in Portugal which meant that it was
   not possible to apply fully all the existing EC measures in the field of
   agricultural structures. One of the most important of these measures was
   Regulation (EEC) No 797/85 on improving the efficiency of agricultural
   structures.
   On 22 April 1986 the Council therefore adopted Regulation (EEC) No 1316/86
   concerning certain specific conditions for the application in Portugal of
   Regulation (EEC) No 797/85. Regulation (EEC) No 1316/86 had a term of
   three years, which ends on 1 September 1989.
   Now the question arises as to what extent there is still a need for the
   derogations set out in the Regulation. On 16 March 1989 the Portuguese
   government made a request to the Commission to extend Regulation (EEC)
   No 1316/86 up to and including 31 December 1991. Article 6 of Regulation
   (EEC) No 1316/86 foresees a decision by the Council on a proposal of the
   Commission and based on a report on the evolution of the economic and
   structural situation in Portugal.
2. Summary of the measures in Regulation (EEC) No 1316/86
   In this Regulation provision is made for four different measures.
   (a) The reference income
       In fixing the reference income as laid down in Article 2, paragraph 3
       of Regulation (EEC) No 797/85, Portugal may apply a corrective factor
       not exceeding a maximum of 1.7 to the average gross wage of
       non-agricultural workers in Portugal as a whole. No such corrective
       factors are allowed for other Member States.
   (b) Group operated holdings
       Where an improvement plan relates to group operated holdings
       (Article 6, paragraphs 1 to 4 of Regulation (EEC) No 797/85), Portugal
       may grant aids provided at least two-thirds of the members of the group
       practise farming as their main occupation. In other Member States all
       the members of a group have to meet the main occupation requirements.
   (c) Pig farming in Madeira
       Portugal may grant aid for investment in pig farming in Madeira if the
       condition relating to fodder production (Article 3, paragraph 4 of
       Regulation (EEC) No 797/85) is not met. That is to say, that on
       completion of the farm improvement plan at least 35% of the quantity of
       feed consumed by the pigs can be produced on the holding.
   (d) Minimum hectarage for compensatory allowances
       In mainland Portugal, compensatory allowances may be granted to farmers
       with at least one hectare of usable agricultural land. In the Azores
       and Madeira the minimum is half a hectare.
                                                                               z
 ---pagebreak---                                       - 2 -
       In the rest of the Community the minimum amount of usable agricultural
       area for holding is at least three hectares. However, in the
       Messogiorno, including the islands, in the French overseas departments
       and in the Greek regions, the minimum usable agricultural area per
       holding is two hectares.
3. Results of the application of Regulation (EEC) No 1316/86 in Portugal
   Information was requested from the Portuguese government on 29 March 1989
   about the results of the application of the Regulation. This information
   was supplied on 4 April 1989 and may be summarized as follows :
   (a) The reference income
       The reference income for 1988 in Portugal was 6608 ECU's; for other
       Member States the figures ranged between 10.270 ECU's for Spain to
       21.702 ECU*s for Denmark. Without the coefficient of 1.7 the reference
       income in Portugal should have been reduced to 3887 ECU.
       In 1988 2447 farm improvement plans (regiem Al) were approved and
       1914 plans for young farmers (regiem A2). In the first semester of
       1989 the equivalent figures were 477 and 392. By leaving out the
       factor of 1.7, a great number of farmers would not have been able to
       fulfill the conditions for investment aid any more. The percentage of
       applications that could not be met differs from 5% in Beira Litoral to
       40% in the Algarve, Madeira, the Azores and Tras os Montes (see
       Table I).
       Under the influence of investments in agriculture a positive
       development can be observed in both gross production, gross value
       added, net value added and the ratio between the set value added and
       the man work unit. It appears from the statistical data that on farms
       where investments are carried out both the absolute values and the rise
       of the index of these four indicators is higher than on farms where
       this is not the case (see Table II).
   (b) Group-operated holdings
       In 1988, 14 projects were approved concerning farm improvement plans
       under Article 6, paragraphs 1 to 5 of Regulation (EEC) No 797/85. In
       all of these cases use was made of the specific conditions foreseen for
       this kind of project in Article 2 of Regulation (EEC) No 1316/86.
   (c) Pig farming in Madeira
       In 1988 and the first semester of 1989 in total 18 farm improvement
       plans in the category Al and A2 were approved in Madeira. Of these
       18 plans none were in the pig sector. This means that no use has been
       made of the exemption for the pig sector concerning the 35% fodder
       clause as laid down in Article 3 of Regulation (EEC) No 1316/86.
   (d) Minimum hectarage for compensatory allowances
       For the years 1987 and 1988 figures are available on the distribution
       of exemptions concerning the minimum hectarage of farms. These can
       benefit from compensatory allowances under Articles 13 up to and
       including Article 17 of Regulation (EEC) No 797/85.
                                                                               ^
 ---pagebreak---                                       - 3 -
: Region          Mainland                Azores               Madeira
: Year        Between 1 & 2 ha   %    0.5 - 2 ha    %      0.5 - 2 ha      %   :
: 1987 No.        39.325         41       119       3          28          72 :
     Amount    1.010.000         15      1970       0.4       292          25 :
:(1000 ESC)
: 1988 No.        55.000         42       116       2.1       398          86 :
     Amount      770.000       . 14      2750       0.4      6066          65 :
:(1000 ESC)
       This table shows that both on the mainland and on Madeira the exemption
       concerning the minimum hectarage is used on a large scale. The number
       of beneficiaries has even risen in 1988. It is evident that cancelling
       these exemptions will have important consequences. For the mainland
       this would mean that 55.000 farmers or 42% of the number of
       beneficiaries could not apply for a compensatory allowance. The
       regions who would be hurt most are Entre Duoro e Minho (67%) and Beira
       Litoral (50%). Concerning the isles, it is evident that Madeira would
       be severely affected.
4. Evaluation
   The evaluation of the results of Regulation (EEC) No 1316/86 must be
   considered in the context of two developments.
   Firstly there are the changes in the common agricultural policy, as started
   a few years ago. Secondly there is the declaration of the Heads of
   governments at the Brussels Summit concerning the situation of agriculture
   in Portugal and the acknowledgment that it is necessary to adopt specific
   measures.
   Concerning the factor 1.7 in relation to the calculating of the reference
   income it is clear that leaving out this factor would have lead to an
   income for 1988 of 3887 ECU'S which is very low in relation to the rest of
   the Member States and hardly defensible. As concerns the incomes in the
   non-agricultural sector it appears that the relationship in the development
   between Portugal and the other Member States has stayed at nearly the same
   level as in 1986. In other words, the existing gap between Portugal and
   the other Member States has not been reduced. Lowering the factor 1.7
   would mean that the position of Portuguese agriculture would be influenced
   in a negative way.
   The exemption for group-operated holdings has been used for all such
   projects and therefore might be considered as successful.
 ---pagebreak---                                       - 4 -
   The exemption concerning the 35% fodder clause for Madeira seems to be
   superfluous, at first sight, because no farm improvement plans in the pig
   sector have been approved. However, despite the few plans that have been
   approved for Madeira, the possibility of introducing plans in the pig
   sector remains possible. In the light of the structural situation of
   Madeira, and that in the pig sector, an extension of this measure has to be
   considered.
   The figures resulting from the exemptions concerning the minimum hectarage
   of the farms, which can benefit from compensatory allowances show that the
   structural situation has not improved in the less-favoured areas, with the
   slight exception of the Azores. Not continuing with the exemptions would
   therefore lead to considerable negative effects for the area's concerned.
5. Conclusion
   Portugal has only recently joined the Community and therefore was only
   recently able to start applying Regulation (EEC) No 797/85 in any real
   way. At the time of entry into the Comunity the relative position of
   Portuguese agriculture was not favourable. It has been proven that
   structural improvement takes a certain period of time. In the present case
   it appears that the desired relative improvement of agricultural structures
   of Portugal has not been achieved during the period foreseen in Regulation
   (EEC) No 1316/86. A continuation of this Regulation for a limited period
   of time therefore seems reasonable.
   This period of time should however be shorter than the one provided for in
   the existing regulation in order to indicate clearly the temporary nature
   of the measure. An extension of the existing Regulation (EEC) No 1316/86
   up to and including 31 December 1991 fulfills this condition and is also in
   line with the wishes of the Portuguese government.
                                                                               5
 ---pagebreak---                                       - 5 -
                                      ANNEX
           Table I : Reference income Article 1 of Regulation 1316/86
    Region                 :Percentage of rejected projects (regiems Al & A2) :
:                           : Reference income without factor 1.7             :
: Ent. Dour. MINHO:         :                    22.5                         :
: Tras os Mont.                                  40.0
: Beira Litoral                                   5.0                         :
: Beira Interior            :                    33.3                         :
: Ribatejo Oeste            :                    30.0
: Alentejo                  :                    30.0
: Algarve                                        40.0
: Madeira                                        40.0
: Azores                    :                    40.0
                                                                                G
 ---pagebreak---                                        - 6 -
          Table II : Results of the enterprises to the period 1985-1987
                          (Average value per enterprise)
                                             1985        1986         1987
: Enterprises without investments :
: Gross Production                           2516        2567          3034
        index                                (100)       (102)         (121)
: Gross Value Added                          1325        1374          1712
:       index                                (100)       (103)         (129)
: Net Value Added                            1197        1230          1568
:       index                                (100)       (103)         (131)
: Net Value Added / MWU                       532         566           709
:       index                                (100)       (106)         (133) :
: Enterprises with investments :
: Gross Production                           4099        4785          5505
        index                                (100)       (117)         (134)
: Gross Value Added                          2685        3024          3592  :
:       index                                (100)       (113)         (134) :
: Net Value Added                            2364        2670          3112
:       index                                (100)       (113)         (132) :
: Net Value Added / MWU                       651         738           889
        index                                (100)       (113)         (137) :
                                                                             1-
 ---pagebreak---                    Council Regulation (EEC) No      /89
                              of      1989
     modifying Council Regulation (EEC) No 1316/86 of 22 April 1986
 adapting the application in Portugal of Regulation (EEC) No 797/85 on
           improving the efficiency of agricultural structures
THE COUNCIL OF THE EUROPEAN COMMUNITIES,
Having regard to the Treaty establishing the European Economic Community,
Having regard to the Act of Accession of Spain and Portugal,
Having regard to Regulation (EEC) No 1316/86 (1) and in particular to
Article 6, second sub-paragraph,
Having regard to the proposal of the Commission,
Whereas the specific conditions of agriculture in Portugal are
characterised by a particularly poor structure and some of the
conditions laid down in Regulation (EEC) No 797/85 (2) as amended
by Regulation (EEC) No 591/89 (3) on improving the efficiency of
agricultural structures are therefore not in keeping with this specific
condition and the specific requirements of Portuguese agriculture;
(1) OJ No L 115, 03.05.1986, p.17
(2) OJ No L   93, 30.03.1985, p. 1
(3) OJ No L   65, 09.03.1989, p. 1
                                                                          I
 ---pagebreak--- Whereas, Regulation (EEC) No 1316/86 made provision for a number of
adjustments to, or derogations from, Regulation (EEC) No 797/85 for a period
of three years to enable it to be implemented in these specific conditions of
Portuguese agriculture, in particular as regards eligibility under the various
schemes and the improvements to be achieved by Portuguese agricultural
holdings;
Whereas these adjustments or derogations from the Regulation are due to expire
on 1 September 1989;
Whereas, the relative position of Portuguese agricultural structures has not
changed sufficiently during the time of application of Regulation (EEC)
No 797/85;
Whereas an estension of the adjustments and derogation of Regulation (EEC)
No 1316/86 in order to improve the relative position of Portuguese
agricultural structures therefore seems justifiable,
HAS ADOPTED THIS REGULATION :
                                    Article 1
In Article 6 of Regulation (EEC) No 1316/86 of 22 April 1986 adapting the
application in Portugal of Regulation (EEC) No 797/85 on improving the
efficiency of agricultural structures the words **three years** are replaced by
"six years**.                           v
                                    Article 2
This Regulation shall enter into force on the day of its publication in the
Official Journal of the European Communities.
 ---pagebreak---     FICHE FINANCIERE                                               concernant : une proposition de m o d i f i c a t i o n
     du règlement du Conseil (CEE) n* 1316/86 a r r ê t a n t certaines conditions                                       spécifiques
     pour l ' a p p l i c a t i o n du règlement (CEE) n - 797/85 au P o r t u g a l .
  1. ligne budgétaire : I I I B         poste : 301          intitulé : P o l i t i q u e s     structurelles.
  2. Base juridique : Acte d'adhésion de l'Espagne et du P o r t u g a l .
  3. Classification :                I H f H M I f U i J O é p e n s e non obligatoire
  K. Objectifs de la «esure et description de l'action : Prorogation de t r o i s ans du R. 1316/86.
     Ce règlement, qui expire le 1er septembre 1989, déroge à certaines d i s p o s i t i o n s du
    R. 797/85 concernant l ' é l i g i b i l i t é aux régimes d ' a i d e aux investissements et
    d ' o c t r o i des indemnités compensatoires, pour t e n i r compte des conditions s p é c i -
    fiques de l ' a g r i c u l t u r e p o r t u g a i s e .
  5. Mode de calcul
  5.1 Nature de la dépense : remboursement d'une p a r t i e des dépenses nationales                                  effectuées
        au cours de l ' e x e r c i c e précédent.
  5.2 Part du finançaient cceminautaire : Hypothèse retenue : 50 X.
  5.3 Calcul : Depuis 1986, le R. 797/85 a été appliqué au Portugal sur base des dispo-
        s i t i o n s spécifiques du R. 1 3 1 6 / 8 6 .            Comme la s i t u a t i o n de l ' a g r i c u l t u r e p o r t u -
        gaise n'évolue que lentement, l'hypothèse a été f a i t e , pour l ' é t a b l i s s e m e n t des
        perspectives f i n a n c i è r e s , que le R. 1316/86 c o n t i n u e r a i t de s ' a p p l i q u e r .             Le
        coût t o t a l pour le FEOGA de l ' a p p l i c a t i o n du R. 7 9 7 / 8 5 , avec les d i s p o s i t i o n s
        spécifiques du R. 1316/86, f i g u r e n t à la colonne ( 3 ) ci-dessous.                                 Ces montants
        ont été décomposés a f i n de d i s t i n g u e r : ( * )
  6. Incidence financière sur les crédits opérationnels
  6.1 Echéancier des crédits d'engagement.,^ dfcpaleaent (Mlo ECU)
                                              R.797/85                           Defenses supple-                       Total
                      Exercice                sans adaptation               mentaires resultant
                                                                                du R. 1316/86           •
                                                       (1)                                      (2)                   (3)-(1)+(2)
                      1990                          36,5                                 1155,,00                          51,5
                      1991                          41.4
                                                    41,4                                  20,0
                                                                                         20,0                              61,4
                      1992                          46,2                                  23,0
                                                                                         23,0                              69,2
                      1993                          50.5
                                                    50,5                                 2266,,00                          76,5
                      Total                        174,6                                 84,0                             258,6
                      T o t a l '91-93             138,1                                 69,0                             207,1
 6.2 Financée en t pendant l'exercice en cours : sans incidence.
        Dans I'APB 1990, le montant de 51,5 mio d'écus a été r e t e n u .
 7. Obstr.-'. .. :.
(*) - Les montants résultant de l'application du R. 797/85 sans adaptation aux con-
          ditions spécifiques portugaises par le R. 1316/86 (colonne 1)
      - les montants résultant du R. 1316/86 qui assure une plus large application du
          R. 797/85 (colonne 2 ) .
                                                                                                                                       ÂO
 ---pagebreak---  ---pagebreak--- Commission of the European Communities
COM(89) 328 final
Proposal for a
COUNCIL REGULATION (EEC)
modifying Council Regulation (EEC) No 1316/86 of 22 April 1986 adopting
the application in Portugal of Regulation (EEC) No 797/85 on improving
the efficiency of agricultural structures
(submitted to the Council by the Commission)
 12.7.1989
Office for Official Publications of the European Communities
L - 2985 Luxembourg
Series: DOCUMENTS
 1989 - 10 pp. — Format: 21.0 x 29.7 cm
EN
ISSN 0254-1475
ISBN 92-77-51973-8
Catalogue number: CB-CO-89-307-EN-C
 ---pagebreak---                                              ISSN 0254-1475
COM(89) 328 final
 DOCUMENTS
Proposal for a
COUNCIL REGULATION (EEC)
modifying Council Regulation (EEC) No 1316/86
of 22 April 1986 adopting the application in
Portugal of Regulation (EEC) No 797/85 on
improving the efficiency of agricultural
structures
(submitted to the Council by the Commission)
03                                         12.7.1989
Catalogue number: CB-CO-89-307-EN-C
ISBN 92-77-51973-8
€
COMMISSION OF THE EUROPEAN COMMUNITIES