CELEX: 51988PC0614
Language: en
Date: 1988-11-11
Title: Proposal for a COUNCIL REGULATION (EEC) amending Regulation (EEC) No 2727/75 on the common organization of the market in cereals#Proposal for a COUNCIL REGULATION (EEC) laying down general rules concerning the premium for the use of cereals in animal feed during the 1989/90 marketing year#(presented by the Commission)

ARCHIVES HISTORIQUES
DE LA COMMISSION
COLLECTION RELIEE DES
DOCUMENTS "COM"
COM (88) 614
Vol. 1988/0206
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la Communauté européenne de l'énergie atomique (JO L 43 du 15.2.1983, p. 1) modifié en dernier
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In accordance with Council Regulation (EEC, Euratom) No 354/83 of 1 February 1983 concerning
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In Übereinstimmung mit der Verordnung (EWG, Euratom) Nr. 354/83 des Rates vom 1. Februar
1983 über die Freigabe der historischen Archive der Europäischen Wirtschaftsgemeinschaft und
der Europäischen Atomgemeinschaft (ABI. L 43 vom 15.2.1983, S. 1), zuletzt geändert durch die
Verordnung (EU) Nr. 2015/496 vom 17. März 2015 (ABI. L 79 vom 25.3.2015, S. 1), ist dieser Akt
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2015/444 vom      13. März 2015 über die Sicherheitsvorschriften für den Schutz von EU-
Verschlusssachen als herabgestuft angesehen.
 ---pagebreak--- COMMISSION OF THE EUROPEAN COMMUNITIES
                                               COM(88 ) 614 final
                                               Brussels , 1 December 1988
                                 Proposal for a
                        COUNCIL REGULATION ( EEC )
  amending Regulation ( EEC ) No 2727 / 75 on the common organization
                        of the market in cereals
                                 Proposal for a
                        COUNCIL REGULATION ( EEC )
    laying down general rules concerning the premium for the use
           of cereals in animal feed during the 1989 / 90
                                 marketing year
                    ( presented-by-thee Commission )
                    (presented
                                     IA' ,-/;*
                   CA "A  'Xox/,
 ---pagebreak---                               EXPLANATORY MEMORENDUM
Subject : proposal for an incorporation scheme for cereals in animal feed .
    1 . Introduction
        According to the agreement of the Summit on 7-8 February , the Commis ¬
        sion put forward a proposal for increased use of cereals in the frame¬
        work of the price proposals for the 1988 / 1989 marketing year .
        The main principle in this proposal was to pay the premium on the addi¬
        tional use of cereals in relation to a reference period . The Council
        did not reach agreement on a measure during the price negotiations . In
        particular , Members States traditionally using a large amount of
        cereals ( high incorporation rates ) in animal feed were against , clai ¬
        ming that the measure is discriminatory against high cereal users who
        would only be able to benefit marginally from the measure . However the
        compromise on the price fixation for the 1988 / 89 marketing year stipu ¬
        lates that " the Council will decide before 31 October 1988 on the
        introduction of an incorporation premium from the 1989 / 90 marketing
        year . It will be guided by the following criteria :
        -   agreement on the increased use of cereals ;
        -   reference period : the most recent marketing year for which the
            requisite data is available ;
        -   in calculating the subsidy , the size of the cereals component during
            the reference period will be taken into account ;
            conformity with GATT rules
        -   review after one year .
        - a control system assuring the effeotivement of the regime "
    2 . Main elements in an incorporation scheme
        Having regard to the criteria set up by the Council and the political
        position of the major cereal consuming Member States a draft Council
        regulation including the following elements seems the most appropriate
        - a minimum incorporation rate is fixec , below which no premium is
            accorded ;
        - a progressive premium in relation to increasing incorporation rates
            is accorded to the additional use of cerals above the minimum incor ¬
            poration rate ;
            a maximum incorporation rate is fixed above which a flat rate
            premium is accorded to all use of cereals exceeding this rate .
        More specifically these elements should be ou '..lined as follows :
        a . Minimum incorporation rate .
            The minimum incorporation rate is set at 20 % . Below tnis rate ope¬
            rators will not be eligible for the premium for the additional use
            of cereals .
 ---pagebreak---  b . Progressive premium for additional use of cereals .
      Operators achieving an increased incorporation rate above the mini¬
      mum incorporation rate of 20 % will be eligible for the incorpora¬
      tion premium on the additional quantity of cereals used .
      This premium will increase according to progressive incorporation
      rates within a scale fixed by the Management Committee procedure .
 c . General premium above the maximum incorporation rate
      Operators with a reference incorporation rate ( see note d .) excee ¬
      ding a maximum incorporation rate of 45 % will be eligible for a
      general incorporation premium of 5 Ecu / t for the quantity of cereals
      corresponding to the difference between the reference incorporation
      rate and the maximum incorporation rate . However , if the current
      incorporation rate falls below the reference incorporation rate ,
      this premium will only be awarded on the quantitiy corresponding to
      the difference between the maximum incorporation rate and the cur ¬
     rent incorporation rate .
     If operators increase their incorporation rate they are eligible for
     the progressive premium mentioned above for the additional quantity
     used .
d . Reference incorporation rates
     For each operator who wants to participate in the measure a refe ¬
     rence incorporation rate shall be fixed on the basis of the cereal
     consumption during the 1986 / 87 and 1987 / 38 marketing years . These
     two marketing years are chosen , firstly , because Member States have
     already important administrative knowledge about the quantities pro¬
     cessed as the coresponsibility levy was collected at the stage of
     first processing during this period . Secondly because it avoids
     manipulation of the consumption of cereals during the current mar ¬
    keting year in anticipation of an incorporation measure as from the
     1989 / 90 marketing year .
e . Beneficiaries
     The beneficiaries should be the same as defined in the initial pro ¬
     posal , i.e. all operators ( including livestock producers ) in the
    animal feed sector able to prove in a satisfactory way to the compe ¬
    tent authorities their use of cereals in animal feed production , in
    particular , during the above mentioned reference periods .
f . Review after one year
    The incorporation scheme shall be fixed for the 1989 / 90 marketing
    years only . At the end of this marketing year the measure will be
    reviewed .
 ---pagebreak---                           Proposai for a
                       COUNCIL REGULATION ( EEC )
             amending Regulation (EEC) No 2727/ 75 on the common
                     organization of the market in cereals
TEE COUNCIL OF THE EUROPEAN COMMUNITIES ,
Having regard to the Treaty establishing the European Economic Community ,
and in particular Article 43 thereof ,
Having regard to the proposal from the Commission ,
Having regard to the opinion of the European Parliament ,
Having regard to the opinion of the Economic and Social Committee ,
Whereas , on account of the growing imbalance in the Community between
supply and demand for cereals , a number of measures have been introduced to
improve the situation ; whereas the said measures should be reinforced by
the introduction of arrangements designed to encourage the use of cereals
for animal feed ; whereas , however , to enable these arrangements to be
reviewed in the light of experience gained , application should be limited
initially to the 1989/ 1990 marketing year ;
Whereas for the purpose of introducing the above-mentioned arrangements , an
addition should be made to Article lib of Council Regulation (EEC )
No 2727/75 on the common organization of the market in cereals-*- , as last
amended by Regulation (EEC ) No 2221 / ££& ,
HAS ADOPTED THIS REGULATION :
 1 0JNOL 281 , 1.11.1975 , p. 1 .
 2 OJ NO L 197 , 26.7.1988 , p. 16 .
                                                                             4
 ---pagebreak---                                      - 2 -
Article lib of Regulation (EEC) No 2727/ 75 is hereby replaced by the
following :
"Article 11b
1 . Aid may be granted for cereals harvested in the Community that are put
    to new industrial uses . The amount of the aid may not exceed that of
    the export refund for the cereal concerned .
2 . For the 1989/90 marketing year , a premium my be granted for cereals
    used in animal feed above a quantitative threshold to be determined .
3 . The Council , acting by a qualified majority on a proposal from the
    Commission , shall adopt general rules for the application of this
    Article .
4 . The Commission shall adopt detailed rules for the application of this
    Article in accordance with the procedure laid down in Article 26 . "
                                   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---                             Proposai for a
                        COUNCIL RfEULATTON ( EEC )
       laying down general rules concerning the premium for the use of
          cereals in animal feed during the 1989/90 marketing year
THE COUNCIL OF THE EUROPEAN COMMUNITIES ,
Having regard to the Treaty establishing the European Economic Community ,
Having regard to Council Regulation (EEC ) No 2727/ 75 of 29 October 1975 on
the common organization of the market in cereals^ , as last amended by
Regulation (EEC) No       2 , and in particular Article llb(2) thereof ,
Having regard to the proposal from the Commission ,
Whereas Article llb(2 ) of Regulation ( EEC ) No 2727/ 75 provides for the
possibility for the 1989/90 marketing year of granting a premium for
cereals used in animal feed above a quantitative threshold to be
determined ; whereas the scheme was introduced on a provisional basis with
the aim of increasing the use of cereals in animal feed ;
Whereas the said aim can be achieved by granting a progressive premium, to
all operators using a significant and increasing cereal component in
animal feed ; whereas in view of the objective in question , incentives
should also be given to operators already using a very substantial cereals
component in animal feed to maintain that level of use by granting a fixed
premium for the use of cereals above a certain quantitative threshold ;
whereas provision should also be made for appropriate incentives to such
operators to encourage them to use more cereals ;
Whereas the use of cereals during the 1989/90 marketing year must be
assessed in relation to actual use of cereals recorded during a reference
period ; whereas , in the case of operators not engaged in the activities in
question during the said period , the reference taken should be the average
use recorded in the region in which they operate ;
Whereas , given that the aim of the premium is to ensure that more cereals
are used , this can be achieved only if the premium is fixed at a sufficient
level to ensure that cereals can compete with substitute products ;
Whereas a system of control ard. penalties should be set up to ensure that
the premium is granted only in accordance with the conditions laid down in
this Regulation ,
 1 OJ No L 281 , 1.11.1975 , p. 1 .
 2 OU No L . p. . .
 ---pagebreak---                                        - 2 -
HAS ADOPTED THIS REGULATION :
                                     Article 1
The premium referred to in Article lLb(2 ) of Regulation ( EEC ) No 2727/ 75
shall be applied in accordance with the provisions of this Regulation .
                                     Artide 2
Only those operators manufacturing or using products for animal feed and
keeping stock records may qualify for the arrangements provided for in this
Regulation .
                                     Artide 3
1 . The premium shall, be granted only in respect of those cereals used in
    animal feed exceeding a rate of 20% of the end-product . It shall be
    granted on a sliding scale with reference to the quantity of cereals
    used compared with the corresponding percentage recorded during the
    reference period referred to in Article 5 .
2 . To qualify for the premium referred to in. paragraph 1 , the operators
    referred to in Article 2 must furnish proof that :
    - the cereals component -used in animal feed during the 1989/90 marketing
      year exceeds 20% of the end-product ;
    - the cereals component used during the 1989/90 marketing year exceeds
      the percentage recorded during the reference period referred to in
      Article 5 .
                                     Article 4
A fixed premium of 5 ECU per tonne of cereals shall be granted to the
operators referred to in Article 2 who have used a cereals component of
more than 45% in products for animal feed during the reference period . The
premium shall be granted on the percentage of cereals used in 1989/90
exceeding the percentage referred to above up to the percentage recorded
during the reference period . For the percentage of cereals exceeding the
actual percentage recorded during the said period , the arrangements
referred to in the second sentence of Article 3(1 ) shall apply .
                                     Article 5
For the purposes of this Regulation :
    - "percentage of cereals recorded during the reference period " means the
      weighted average of cereals used in products for animal feed recorded
      during the 1986/87 and 1987/ 88 marketing years ;
    - "cereals " means the products referred to in Article 1(a) and (b) of
      Regulation (EEC ) No 2727/75 .
However , by way of derogation from the first indent of the first paragraph ,
in the case of operators who were not engaged in the activities referred to
in Article 2 during the 1986/87 and 1987/ 88 marketing years , "percentage of
cereals recorded during the reference period " means the weighted average of
cereals used recorded in the region in which the activities in question
are now carried on .
 ---pagebreak---                                      - 3 -
                                   Article 6
The amounts of the premium shall be fixed in accordance with the procedure
laid down in Article 26 of Regulation (EEC ) No 2727/75 , at such a level as
to ensure that cereals can compete with substitute products .
                                   Article 7
The amount of the premium shall be converted into the national currencies
using the agricultural coversion rate in force on the first day of the
1989/90 marketing year .
                                   Article 8
Operators shall be entitled to the premium for cereals actually processed
or used during the 1989/90 marketing year .
                                   Article 9
1 . The Member States shall, establish a system of control to ensure that the
    aid is granted only in accordance with the conditions laid down in this
    Regulation . The said system shall in particular feature checks which
    are representative as regards the number of beneficiaries , their
    geographical distribution and the amount of the premium .
2 . The Member States shall take appropriate measures to ensure compliance
    with the provisions adopted . These measures shall include the debarring
    of a beneficiary from receiving the premium in the case of falsified
    information .
                                  Article 10
Detailed rules for the application of this Regulation shall be adopted in
accordance with the procedure laid down in Article 26 of Regulation (EEC)
No 2727/ 75 .
This Regulation shall enter into force on the third day following its
publication in the Official Journal of the European Communities .
It shall apply from 1 July 1989 .
This Regulation shai 1 be binding in its entirety and directly applicable in
all Member States .
Done at Brussels ,                                For the Council
                                                                              V
 ---pagebreak---               r  i   IN A IN  L J A  L       STATEMENT
                                                                            Date :   27.10.1988
 1 .  BUDGET HEADING :          1023                                      APPROPRIATIONS :       p.m .
 2.   TITLE :        Amendment to Regulation ( EEC ) No 2727 / 75 , introducing the legal
      possibility of providing for a premium for cereals used in animal feed
      exceeding a quantitative threshold to be determined and general rules
      relating to the 1989 / 90 marketing year .
3.    LEGAL BASIS :          EEC Treaty
4.    AIMS :       To make cereals competitive with substitute products so as to
                   ensure additional use of cereals .
5.    FINANCIAL IMPLICATIONS
                                        Period of 12 months  Current financial year     Following financial
                                                                                               year
5.0   EXPENDITURE
      - CHARGED TO EC BUDGET
      - REFUNDS / INTERVENTIONS
                                             - 29 ( 1 )              p.m .                   - 29 ( 1 )
      - NATIONAL AUTHORITIES
      - OTHER
5.1   REVENUE
      - OWN RESOURCES OF THE EC
        ( LEVIES / CUSTOMS DUTIES )
      -   NATIONAL
5.0.1   ESTIMATED EXPENDITURE
5.1.1   ESTIMATED REVENUE
5.2     METHOD OF CALCULATION :       ( See annex )
6.0   CAN THE PROJECT BE FINANCED FROM APPROPRIATIONS ENTERED IN THE RELEVANT CHAPTER OF THE
                                                                             CURRENT RUDGFT             Yes
6.1   CAN THE PROJECT BE FINANCED BY TRANSFER BETWEEN CHAPTERS OF THE CURRENT BUDGET0
6.2   WILL A SUPPLEMENTARY BUDGET BE NECESSARY ?
6.3   WILL FUTURE BUDGET APPROPRIATIONS BE NECESSARY ?                                                  Yes
COMMENTS :   (1)    This estimate is the result of the calculation set out in the Annex .
                    The margin of uncertainty which results from the calculation hypotheses is
                    clearly underlined in the text of the Annex .
 ---pagebreak---                        ANNEX TO THE FINANCIAL STAIшаващи
1 . As this is a new measure , the estimate is based on a relatively high
    degree of uncertainty . The financial impact is also calculated for a
    period of only 12 months ( 1989/90 marketing year) corresponding to the
    period of application of the measure .
2 . The quantities likely to qualify for the premium are put at 5 million
    tonnes . Of this quantity , it is estimated that only 2 mil.li.on t will
    constitute a net increase in the consumption of cereals , the rest being
    offset by , among other things , a decrease in farm use (supposed
    effectiveness of the measure : 40%).
3 . The net increase in consumption of 2 million t means an equivalent
    reduction in the quantities offered for intervention and hence savings
    on storage costs and on the depreciation of stocks entering
    intervention .
4 . The average amount of the premium taken as a basis for this calculation
    is 45 ECU/ t .
II . ESTIMATE OF FINANCIAL IMPACT
1 . Premium : + 5 million t x 45 ECU/ t = 225m ECU x 1.071 = +241m ECU
              + 5 million t1 x 5 ECU/t = 25m ECU x 1.071 = + 27m ECU
                                                              +268m ECU
2 . Intervention expendlture :
    Technical costs :
    Entry costs : - 2 million t x 2.35 ECU/T x 75% =       - 3.5
    Storage costs : - 2 million t x 16.2 ECU/t x 75% =     -12.2
                                       2
                                                           - 15.7m ECU
                                            x 1.091 =      -17 . Om ECU
    Financial costs : - 2 million t x 74.47 ECU/ t x 6.1%= - 9.1
                          payment deadline :               + 2.8
                                                           - 6.3m ECU
                                            x 1.081 =      - 7.0m ECU
    Dépréciation: - 2 million t x 118 ECU/t =
                          - 236m ECU x 1 . 084 =           -256m ECU
                                                           -28Qm ECU
1 Estimate of quantities of cereals exceeding an incorporation rate of 45%
during the reference period .
 ---pagebreak---                                        - 2 -
3 . Additional co-responsibility revenue :
    ( resulting from a drop in farm use and the sale of an equivalent
    quantity on the market )
    - 3 million t x 1 / 2 x 10.76 ECU/ t = - 16.1 x 1.081 = - 17m ECU
4 . Net effect over 12 months : - 29m ECU
    On the basis of these calculations , it is estimated that , all other
    things being equal :
    - a change in the premium of 10 ECU/ t would produce a difference of
       54 million ECU in the budgetary implications ;
    - a 10% increase in the net rise in cereals consumption would produce a
       difference in the budgetary implications of - 27 million ECU .
    The following have not been taken into account in this calculation :
    - risk of competing Community products (e.g. peas , beans) being used
       less , leading , if the measure is renewed , to a cutback in the
       production of these commodities and an increase in the production of
       cereals . It should be noted that the average production of cereals
       per hectare is twice that of peas and beans and that the budget cost
       of such a crop switch can be put at 600 ECU/ha .
    - ri.sk that additional cereals will not be used . Operators who
       incorporate less than 20% of cereals in animal feed may cut such use
       and use more substitute products . An increase in tlie incorporation of
       cereals in livestock feed will not be subsidized as long as the
       cereals component remains under 20% , and prices of cereals substitutes
       could drop as a result of this measure .
                                                                               4