CELEX: 51996PC0651
Language: en
Date: 1996-12-06
Title: Proposal for a COUNCIL REGULATION (EC) amending Regulation (EEC) No 2990/82 on the sale of butter at reduced prices to persons receiving social assistance

COMMISSION OF THE EUROPEAN COMMUNITIES
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                                                 Brussels, 06.12.1996
                                                 COM(96) t>51 final
                        Report to the Council concerning
              application of Council Regulation (EEC) No 2990/82
           concerning the sale of butter at reduced prices to persons
                           receiving social assistance
                                  Proposal for a
                        COUNCIL.REGULATION (EC)
amending Regulation (EEC) No 2990/82 on the sale of butter at reduced prices to persons
                             receiving social assistance
                         (presented by the Commission)
 ---pagebreak---  ---pagebreak---              Report to the Council concerning
   application of Council Regulation (EEC) No 2 9 9 0 / 8 2
concerning the sale of butter at reduced prices to persons
                receiving social assistance
 ---pagebreak--- 1 • Background
    The market situation for milk in general and for butter in particular has in the past
    required a whole range of disposal measures notably for butter in order to increase the
    internal and external sales and consequently diminish the purchases into public
    intervention storage. The scheme allowing for the sale of butter to persons receiving
    social assistance has been in operation since 1 978 and Article 3a of Council Regulation
    (EEC) No 2 9 9 0 / 8 2 , last modified by Regulation (EC) n" 1802/95, requires that the
    Council, on the basis of a report from the Commission shall decide before 31.12.1 996
    whether the subsidized sales under the abovementioned Regulation are to be continued.
    Reports previously forwarded to the Council have on 4 occasions resulted in the
    continuation of the scheme for two consecutive years, ending 3 1 . 1 2 . 1 9 9 6 . Up until
    now the Regulation has only been applied in Ireland, and the following therefore refers
    to this Member State only.
2- Criteria for the determination of entitlement
    Persons entitled to benefit from the scheme are those in receipt of social assistance
    payments as defined in Part III, Section 118 of the Social Consolidation Act 1993. This
   covers the following schemes operated by the Irish Department of Social Welfare and
    Department for Health :
          Old Age Pensions;
          Unemployment Assistance;
          Windows' and Orphans' Pension;
          Deserted Wife's Allowance;
          Alone Parents Allowance;
          Prisoner's Wife's Allowance;
          Carer's Allowance;
          Blind Pension;
          Social Welfare (Supplementary Welfare) Allowance ;
          Pre-retirement Allowances.
3. Procedure for implementation and control of the scheme
   A system of vouchers entitling two pounds of butter per month to be purchased at the
   normal retail price, less the amount of the subsidy, are supplied to those persons found
   eligible under the criteria set out in point 2 above. Vouchers are valid for the month
   they are issued and the following two months.
   The system of control involves checks of water marked and security printed vouchers,
   numbers, amounts, quantities and eligibility of the numbered vouchers. These checks
   will, together with declarations from the retailers selling the butter and on the spot
   checks carried out by the competent authorities, ensure that the scheme is not abused.
                                               ^
 ---pagebreak--- 4. Developments in the builej^ijg^_^JIoj^ni i market in Ireland
    In accordance with Article 4(3) of Regulation (EEC) no 1 8 9 8 / 8 7 , the Member States
    shall forward to the Commission information concerning the developments on the butter
    and yellowfat market.
    The information received from the Irish authorities concerning developments in market
    shares of butter, low-fat butter, margarine and fat mixtures shows the following
    developments between 1987 and 1995.
   Year          Butter          Low-fat butter      Margarine       Fat Mixture      Total
           Tonnes        (%)   Tonnes      (%)  Tonnes        (%) Tonnes       (%)   Tonnes
   1987    20.500       42.4    2.000      4.1  14.900       30.8 11.000       22.7  48.400
 . 1988    16.325       33.8    2.750       5.7 14.200       29.4 15.000       31.1  48.275
   1989    13.235       27.4    1.860       3.9 15.700       32.5 17.500       36.2  48.295
   1990    12.000       25.3    1.575       3.3  15.100      31.8 18.825       39.6  47.500
   1991    12.025       25.4    1.575       3.3 14.600       30.9 19.100      40.4   47.300
   1992    11.925       25.1   .1.575       3.3 13.900       29.5 19.700      41.8   47.100
   1993    1 1.825      25.1    1.575       3.3 13.700       29.1 20.000      42.5   47.100
   1994    12.000       25.5    1.500       3.2 13.200       28.1 20.300      43.2   47.000
   1995    1 1.900      25.4    1.500       3.2 13.000       27.7 20.500      43.7   46.400
    The total yellowfat market between 1 987 and 1 995 shows a decline of 4.1 % while the
    fat mixtures have taken a continuing higher market share compared to that of butter.
    The fat mixtures generally contain butter or cream and vegetable fat and have been
    principally marketed on the basis of improved spreadability vis-à-vis butter. The
    introduction of reduced and low-fat butters, which incorporate additional milk protein
    and moisture to reduce the overall fat has also led to a reduction of the market share
    of full fat butter. However, it is noted that the important yearly decline in the
    consumption of full fat butter experienced in the 1980'shas disappeared since 1990
    showing a stable market share slightly in excess of 2 5 % .
5. Developments of sales, financial costs and number of beneficiaries
    Ireland has operated the aid scheme as provided for in the abovementioned Regulation
    since 1 978 and the scheme has, especially during the last year, accounted for important
    shares of the internal Irish butter consumption. In 1 995, the purchase of around 7.600
    tonnes of butter was aided under the scheme and the estimated purchases for 1 996 are
    approximately the same. Since 1992, the purchases amounted to more than 6 0 % of
    the total Irish butter consumption but accounted for less than 6% of the production and
    it is expected that these percentages will remain practically unchanged in 1996. The
    total estimated cost calculated as the purchased quantities multiplied by the aid level
     after applying the switchover coefficient amounted to 10,4 MECU in 1996.
 ---pagebreak---    The development in purchases, costs and number of beneficiaries since 1987 is
   indicated below :
         Year            Purchases             Financial costs        Beneficiaries* *
                         (in tonnes)               (MECU)
         1987                      5.651                    10.06                 720.000
         1988                      6.178                    11.00                 720.000
         1989                      6.567                    11.69                 720.000
         1990                      6.182                    11.00                 720.000
         1991                      6.260                     9.39                 740.000
         1992                      7.331                    11.00                 776.000
         1993                      7.400                    10.36                 834.000
         1994                      7.900                    11.06                 800.000
         1995*                       7600                     8.74                916.000
         1996*                      7.500                     8.63                900.000
          Provisional and without the application of the switchover coefficient.
          Calculated on the basis of vouchers issued.
6. Conclusions and recommendations
    The application of Council Regulation 2990/82 in Ireland has continued to be a
    successful means of maintaining sales to the social assistance categories indicated
    under point 2 which in the normal course of events would, for economic reasons, be
    at the forefront of change to cheaper substitutes.
    A reduction in consumption by these categories could result in sales of butter into
    intervention. Furthermore, a withdrawal of this longstanding benefit to the less well-off
    sectors of society e.g. the unemployed, old age pensioners, etc. could hardly be
    defended from a social, market or economic point of view. Furthermore, the favourable
    public perception of a Community scheme promoting butter sales should not be
    neglected.
    The Commission therefore proposes a continuation of the scheme for an additional two
    year period ending 31 December 1998. However, the maximum quantity eligible per
    beneficiary each month should, due to the general tendency of decline in Irish butter
    consumption over the last decade, be reduced from 1 kg to 0,5 kg.
 ---pagebreak---                                          PROPOSAL FOR A
                             COUNCIL REGULATION (EG) No
 amending Regulation (EEC) No 2990/82 on the sale of butter at reduced prices to persons
                                    receiving social assistance
THE COUNCIL OF THE EUROPEAN UNION,
Having regard to the Treaty establishing the European Community,
Having regard to Council Regulation (EEC) No 804/68 of 27 June 1968 on the common
organization of the market in milk and milk products1, as last amended by Regulation
(EC) No 1587/962 and in particular Article 12(2) thereof,
Having regard to the proposal from the Commission,
Whereas Council Regulation (EEC) No 2990/823, as last amended
by Regulation (EC) No 1802/954, introduces arrangements, expiring on 31 December
 1996, for the sale of butter at reduced prices to persons receiving social assistance;
whereas, Article 3a(3) of that Regulation provides that the Council is to examine the
possibility before that date and on the basis of a report from the Commission, of renewing
the arrangements laid down; whereas, in view of the report presented by the Commission
and the results achieved, the arrangements should be extended for two years,
1
    OJ No L 148, 28.6.1968. p. 13.
2
    OJ No L 206. 16.8.1996, p. 21.
3
    OJ No L 314, 10.11.1982. p. 26.
4
    OJ Np L 174, 26.7.1995. p. 27.
                                                       4-
 ---pagebreak--- HAS ADOPTED THIS REGULATION:
                                       Article 1
Regulation (EEC) No 2990/82 is hereby amended as follows:
1.   In Article 1, "31 December 1996" is replaced by "31 December 1998";
2.   In Article 3a(3), "31 December 1996" is replaced by "31 December 1998".
                                       Article 2
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---                                  '  "        '     ^ — — w w • — • — • — M a — —
                 FINANCIAL STATEMENT
         BUDGET HEADING:                                                                           APPROPRIATIONS:
         Chapter BI - 2040                                                                         ECU 13.6 million (Second LA to
                                                                                                   the PDB 97)
         TITLE:
         Proposal for a Council Regulation amending Regulation (EEC) No 2990/82 on the sale of butter at reduced prices to
         persons receiving social assistance
3.       LEGAL BASIS:
         Article 12(2) of Regulation (EEC) No 804/68
         AIMS:
         Extends the scheme for the sale of butter at reduced prices to persons receiving social assistance
         FINANCIAL IMPLICATIONS                                          PERIOD OF 12            CURRENT             FOLLOWING
                                                                           MONTHS               FINANCIAL             FINANCIAL
                                                                                                    YEAR                 YEAR
                                                                                                     (97)                 (98)
                                                                         (ECU million)         (ECU million)         (ECU million)
5.0      EXPENDITURE
         - CHARGED TO THE EC BUDGET                                           + 10.2                 +8.1                + 10.2
             (REFUNDS/INTERVENTION)
         - NATIONAL AUTHORITIES
         -   OTHER
5.1.     REVENUE
         - OWN RESOURCES OF THE EC
             (LEVIES/CUSTOMS DUTIES)
         - NATIONAL
                                                                          1998          1999          2000        2001         2002
                                                                        (ECU m)      (ECU m)        (ECU m)    (ECU m)      (ECU m)
5.0.1    ESTIMATED EXPENDITURE                                                          +2,1
5.1.1    ESTIMATED REVENUE
5.2      METHOD OF CALCULATION:
         12months:          7 000 t x 1.389 ECU/tx 1.047 (DR) = ECU 10.2 million (B)
         1997:              7 000 t x 1,389 ECU/t x 9.5/12 x 1.047 (DR) - ECU 8.1 million (B)
6.0      CAN THE PROJECT BE FINANCED FROM APPROPRIATIONS ENTERED IN THE                                                      YES/NO
         RELEVANT CHAPTER OF THE CURRENT BUDGET?
         CAN THE PROJECT BE FINANCED BY TRANSFER BETWEEN CHAPTERS OF THE                                                     YES/NO
         CURRENT BUDGET?
6.2      WILL A SUPPLEMENTARY BUDGET BE NECESSARY?                                                                           YES/NO
         WILL FUTURE BUDGET APPROPRIATIONS BE NECESSARY?                                                                     YES/N©
OBSERVATIONS:
 The second letter of amendment to the PDB was prepared on the basis of an extension of the scheme beyond 3 Î December 1996,
 10 000 tonnes and an unchanged aid rate.
 As the maximum quantity per person per month is reduced from 1 kg to 0.5 kg, the quantity of 10 000 tonnes in the PDB is now
 expected to drop to 7 000 tonnes.
                                                                         4
 ---pagebreak---                                                                   ISSN 0254-1475
                                                           COM(96)651 final
                                              DOCUMENTS
                                                                    03 05 01
                                    Catalogue number : CB-C0-96-654-EN-C
                                                             ISBN 92-78-13142-3
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