CELEX: 51991PC0438
Language: en
Date: 1991-11-14
Title: Proposal for a COUNCIL REGULATION ( EEC ) amending Regulation ( EEC ) No 1360/78 on producer groups and associations thereof

COMMISSION OF THE EUROPEAN COMMUNITIES
                                                                            C0MC91) 438 final
                                                                            Brussels, 14November 1991
                                             REPORT TQ THE ÇQUNC11 CONCERNINfi AIQ FOR
                                    THE FORMATION OF PRODUCER GROUPS AND ASSOCIATIONS THEREOF
                                                           Proposal for a
                                                     COUNCU REQUIATIQN (ggç)
                                               amending Regulation (EEC) No 1360/78
                                           on producer groups and associations thereof
                                                   (presented by the Commission)
llifj;'^"'"^^.'.'^.''' '•'•••'%^
 ---pagebreak---                           - 2-
        REPORT TO THE COUNCIL CONCERUtNft AIP FOR
THE FORMATION OF PROPUCER 6RPMPS AMP ASSOCIATION THEREOF
 ---pagebreak---                                         - 3 -
                      REPORT TO THE COUNCIL CONCERNING AID FOR
             THE FORMATION OF PRODUCER GROUPS AND ASSOCIATIONS THEREOF
                                        INDEX
                                                                         P^ge
      INTRODUCTION                                                        I 4
I.    BASIC RULES
1.1   Introduction                                                        j 5
1.2   Scope                                                                 5
1.3   Amount of aid                                                         5
1.4   Community contribution                                                6
1.5   Detailed provisions                                                   6
1.6   Duration                                                              7
II.   RESULTS OF IMPLEMENTATION
M . 1 Recogn i zed groups                                                    8
11.2 Refunds                                                                8
III. PROPOSALS
111.1   Extension                                                           9
111.2   Scope                                                               9
111.3   Changes                                                            10
IV.   CONCLUSIONS                                                         11
                                       ANNEXES
Annex I Community contribution (p. 13)
Annex II Results of implementation (p. 14)
Annex III Foundation aid for producer groups and associations thereof (p. 15)
 ---pagebreak---                                        - 4 -
                     REPORT TO THE COUNCIl CONCERN IN6 A»P FOR
            THE FORMATION OF PROPUCE* GRPVPS ANP ASSOQIATIONJI IHERIOF
INTRODUCTION
1. Through Council Regulation (EEC) No 1360/78, the Council adopted a common
   measure to deal with the structural deficiencies in the supply and marketing
   of certain agricultural products in certain Community regions.
2. The arrangements adopted consist of aid to encourage farmers to join together
   to influence the economic process through groups or associations which would
   concentrate supply and adapt production to market requirements.
3. Aid covers the costs of formation and administrative operation of groups and
   associations and is paid for the first five years in annual instalments for a
   maximum of seven years following recognition.
4. This document fulfils the Commission's obligation under Article 13(2) of
   Regulation (EEC) No 1360/78 to report on implementation of the common measure
   before It expires on 31 December 1991.
5. It covers:
   (a) the content of the basic rules;
   (b) the practical results of application of the common measure;
   (c) the proposal to extend the period of time allowed for the common measure;
   (d) the amendments proposed to the scheme of aids for the formation of
       producer groups and associations thereof.
 ---pagebreak---                                     - 5 -
I.  BASIC RULES
1.1 Introduction
    6.  Regulation (EEC) No 1380/78 of 19 June 1978 on producer groups and
        associations thereof, as last amended by Regulation (EEC) No 3808/89
        of 12 December 1989, introduced a common measure to encourage producer
        groups in regions and sectors where the supply of agricultural
        products   suffers    from   very   severe   structural   deficiencies
        characterized by a very large number of holdings which are small in
        size and insufficiently organized.
    7.  Commission Regulation (EEC) No 2083/80 of 31 July 1980, as
        consolidated by Regulation (EEC) No 220/91 of 30 January 1991, lays
        down detailed rules of application concerning the economic activity of
        producer groups, minimum turnover, volume of production and number of
        members and territorial extent.
1.2 Scope
    8.  Originally, the arrangements applied to:
        - the whole of Belgium as regards the cereals, live bovine animals,
          piglets and lucerne sectors;
        - the whole of Italy as regards all products of the soil and livestock
          products listed in Annex II to the Treaty (except for products
          referred to in Article 1(2) of Regulation (EEC) No 1035/72 on the
          common organization of the market in the fruit and vegetables, hops
          and silkworms sector) and certain processed agricultural products;
        - seven regions of France as regards the table w|ne, plants used in
          perfumery, table olives, tropical fruits, beef and veal and olive
          oiI sectors.
    9.  On their accession to the Community, the Regulation was extended to
        Greece, Spain and Portugal as regards the products to which it applied
        in Italy.
    10. At the request of the Irish and French authorities, Regulation (EEC)
        No 3875/88 of 12 December 1988 extended the scope of the aid scheme to
        the whole of Ireland for cereals, potatoes, bovine animals and sheep
        and goats and to the whole of the wine sector in certain regions of
        France already covered for table wines.
  3 Amount of aid
    11. For producer groups recognized before 1 July 1985, aid for the first,
        second and third year is limited to 3%, 2% and 1% respectively of the
        value of the products marketed, subject to a ceiling of the actual
        formation and operating expenses.
 ---pagebreak---                                      - 6-
    12. The amount of aid granted to producer groups recognized after 1 July
        1985 for the first five years following the date of recognition:
        - is limited for the first, second, third, fourth and fifth year to
           5%, 5%, 4%, 3% and 2% respectively of the value of the products
           marketed;
        - may not exceed actual formation and operating expenses;
        - is payable in annual instalments for up to seven years following the
           date of recognition.
    13. The amount of aid granted to associations:
        - is limited for the first, second and third year to 60X, 40% and 20%
           respectively of the actual formation and operating expenses;
        - may not, however, exceed a total of 50 000 units of account.
    14. Implementation of the Regulation and the granting of formation aid are
        obligatory for the Member States in the regions and sectors listed at
         1.2.
I.4 Community contribution
    15.  In general, the Guidance Section of the EAGGF      refunds 25% of the
        chargeable expenditure to the Member States.
         In regions eligible under Objective 1 as defined by Regulation (EEC)
        No 2052/88 of 24 June 1988, refunds may, pursuant to Regulation (EEC)
        No 223/90 of 26 January 1990, be at the rate of 65% (see Annex I)
1.5 pétrie provisions
    16. The implementing provisions concerning the minimum number of members,
        cultivated area, turnover and volume of production were laid down in
        Regulation (EEC) No 2083/80 of 31 July 1980, consolidated by
        Regulation (EEC) No 220/91 of 30 January 1991.
         In the case of products other than those listed in the Annex        to
        Regulation (EEC) No 220/91, producer groups must have:
        - a turnover of at least ECU 1 million (ECU 500 000 In Greece);
        - at least 50 members.
    17.  In general, associations must    have  a  volume  of  production or  a
        turnover which amounts to:
 ---pagebreak---                                   - 7-
      - at least three times the minimum size for producer groups in the
        region where their head office is situated;
      - not less than 5% of national production.
      In the case of the products listed in the Annex to Regulation (EEC) No
      220/91, associations must meet the criteria laid down there.
      In each Member State associations must also have the geographical
      scope laid down in Article 3 of that Regulation.
6 Puratlon
  18. In accordance with Article 13(1) of Regulation (EEC) No 1360/78; the
      common measure will expire on 31 December 1991.
 ---pagebreak---                                      - 8 -
I».  RESULTS OF IMPLEMENTATION
11.1 RtfgBnUtfl growt
     19. On 31 December 1990 the Member states had recognized 560 groups (see
         Annex it).
     20. Belgium and Portugal are the two countries whore there are still no
         recognized producer groups, in the case of Belgium, changes to the
         thresholds requested by the Belgian authorities were mad» through
         Regulation (EEC) No 3087/88 amending the Regulation Implementing the
         scheme. However, the various sectors of agriculture concerned have
         still expressed no interest in taking advantage of this common
         measure.
          In the case of Portugal, the lack of recognized producer groups is
         explained by the date of the implementing regulation (Regulation (EEC)
         No 277/88 of 7 September 1988). The Portugueaa author it las intend to
         recognize 50 producer groups between 1992 and 1996.
         in Ireland the implementing regulation dates from 1988 and the first
         two groups were recognized in 1990. There will be 82 new groups
         between 1992 and 1996.
          in Greece the number of recognized operational groups is 29 and there
         will be 73 new groups between 1992 and 1996.
         The French authorities     have  sent  the Commission  a  list  of 99
         recognized groups.
         Since the scheme became applicable in Spain in 1988, 30 groups have
         been recognized and it is expected that 142 will be recognized between
         1992 and 1996.
         Following a slow start in Italy, the new responsibilities for
         recognition conferred on the regions mean that the number of groupa,
         at 406, is now the highest in the Community. Producer groupa now
         cover 1.3 million producers, or 45% of all holdings.
11.2 Rafunto
     21. Formation aid totalling ECU 9.4 million has been granted to 108
         producer groups and by 31 December 1990 the EAGGF had refunded ECU 2.4
         mi 11 ion (see Annex III).
         These amounts are low compared with the number of recognized producer
         groups, mainly because of the slowness of the Member States'
         administrations in drawing up implementing rules and requesting
         refunds. For example, in Italy the regional circulars date from 1984.
 ---pagebreak---                                       - 9 -
III.  PROPOSALS
HI.1 EEttmion
      22. Those concerned by this Regulation have not yet had time to benefit
          from the most recent extensions of the scope of the common measure, to
          Spain and Portugal when they joined the Community (applicable from
          1988) and In Ireland and France In 1990. Nevertheless, these
          countries continue to suffer from structural problems arising from
          inadequate concentration of supply and marketing. The proportion of
          agricultural products sold through organizations continues to be very
          low.
          Extension of the scheme would mean that, as has happened hitherto,
          this structural instrument could be used in the future In regions
          where structural deficiencies regarding the supply and marketing of
          agricultural products have been detected. Similarly, the proposal for
          a Regulation concerning the Poseidom programme (C0M(91) 160), approved
          by the Commission on 13 May 1991 includes extension of the scope of
          the common measure in France to three new sectors in the overseas
          departments.
          The increase in the rate of Community refund in regions eligible under
          Objective 1 arising from the reform of the structural Funds should
          make the common measure more attractive. In certain regions, the rate
          increased from 25% to 65% with effect from 1 January 1990 and so the
          duration of the common measure should be extended to enable the Member
          States to take advantage of these new conditions.
          For these reasons the Commission considers that the common measure
          should be continued so that farmers can organize themselves both to
          centralize the supply of products whose quality depends principally on
          market demand and to achieve greater discipline in the production and
          marketing of agricultural products. Since this is a common measure
          within the meaning of Article 2(1) of Regulation (EEC) No 4256/88, its
          duration does not have to be limited, as was the case before the
          reform of the structural Funds.
 II.2 Scope
      23. Belgium has not yet taken advantage of the common measure, despite the
          changes made in the thresholds for implementation of the scheme there.
          The Belgian authorities have also reported that those concerned are
          uninterested in the very idea of producer groups and that, in the
          present circumstances, this is unlikely to change in the future.
          Accordingly, the Commission believes it unnecessary to extend the
          common measure in Belgium for a further period.
 ---pagebreak---                                        - 10 -
H I . 3 CJUDflfifi.
        24. Experience of the changes made to the scheme by Regulation (EEC) No
            1760/87 as regards Introduction of new methods of marketing the
            production of members of producer groups has led the Commission to the
            view that there should be rules governing the notification by members
            to the producer groups of information on harvests and the availabiIity
            of products for which they are members.
        25. A technical correction was put in place to convert the maximum global
            amount of 50.000 units of account into 60.000 ecus for aid agreed to
            unions.
 ---pagebreak---                                     - 11 -
IV. CONCLUSIONS
    26. The main objective of aid for the formation of producer groups and
        associations thereof is to overcome structural deficiencies in the
        supply and marketing of agricultural products in certain regions of
        the Community and in certain sectors.
        The main features of these regions are the small numbers of
        agricultural   holdings which     belong   to producer   organizations
        established to market products and the low percentage of the total
        value of the country's agricultural production marketed by such
        organizations.
        During the period of operation of the scheme, similar needs elsewhere
        in the Community have been noted and so the scheme has been extended
        to deal with this situation by bringing farmers together in groupe.
        However, in Belgium the scheme has not been applied since Its
        introduction, despite revision in 1989 of the criteria to be applied.
        Although the measure began slowly, there were 560 recognized groups on
        31 December 1990 and new applications for recognition are expected,
        mainly from Spain, Ireland and Portugal, where the measure has applied
        only since 1988.
        The reform of the structural Funds resulted in more attractive refund
        conditions and the new rates apply from 1 January 1990.
        The new conditions for the marketing of members' products introduced
        by Regulation (EEC) No 1760/87 mean that the groups need better
        information about harvesting and availability.
        Furthermore,   the    thresholds   concerning  associations   in   the
        implementing regulations for the scheme mean that the overall ceiling
        on formation aid should be revised.
        Accordingly, it is proposed:
        - to extend the duration of the scheme, except in the case of Belgium;
        - to include     in the general conditions      imposed on producers
          notification by members to the producer group of information on
          harvesting and the availability of the products in respect of which
          they are members;
 ---pagebreak---                                       - ta ~
Before 1 January 1991, the Commission will look again at operation of the
aches* and will report to the Council, on the baa la of information
provided by the Member States, on the results of implementation of this
^IF'emee^mmiPf s *^ms^vji^s/vs)v ^p 9
 ---pagebreak---                                     - 13 -
                                   ANNEX I
                           community contribution
The normal part-financing rate ia 25%. in ragiona eligible under Objective
1 aa defined by Article 1 of Regulation (EEC) No 2062/68, this baeomea:
   I        —•                          "i            1   1
    Member States                            Rate (%)
    Greece, Ireland, Portugal                  65
    France:     - Overaeaa departments         60
                - Corsica                      50
    Spa i n                                     50
    Italy                                      50
 ---pagebreak---                                         -   14 -
                                       ANNEX I I
                          HwiWH IHEI i "T. i JMftjJeiSiOMda»Uj*u-
                        (Regulation (EEC) No 1960/76)
 wejepwr sxa*>ee     Data of           First yoar of              Groupa recognized
                  Implementation        recognition               iy
                                                             31.12.1988 1989 1990 TOTAL
 Belgium               1960
 Greece                1961                    1963                21           1   23
 Spain                 1966                    1966                 1          21   80
 Franco             1960/1988                      i              95            2   99
  Ireland              1988                    1990                             2    2
  Italy                1980                    1962               360     96   21 406
 Portugal*             1966
 TOTAL                                                            467     4*   47
*   Forecast for 1992 to 1996: 50
 ---pagebreak---                                    - 15 -
                                 ANNfcA III
       Foundation aid for producer groupa and aigosi«tl9ni Sharaof
                          (aa at 31 Deeember 1990)
                                                                (ECU)
Member States      Number of         Expenditure by       EAGGF
                     groupe           Member States     refunds
Greece                 8              248 744            62 186
Italy                100            9 114 124         2 353 531
TOTAL                108            9 362 868         2 415 717
 ---pagebreak---                    - 16 -
               Propoaai for a
    amending Regulation (EEC) No 1360/78
on producer groupa and aaaociationa thereof
 ---pagebreak---                                        - 17 -
                              EXPLANATORY frWtMQBAfflUM.
Council Regulation (EEC) No 1360/78 of 19 June 1978 on producer groups and
associations thereof, as last amended by Regulation (EEC) No 3808/89 of 12
December 1989, introduced a common measure to encourage the formation of groups
of agricultural producers.
It applies to regions and sectors where the supply of agricultural products
suffers from very severe structural deficiencies characterized by a very large
number of holdings which are small in size and insufficiently organized.
Originally, these deficiencies were found to exist in Belgium, France and Italy.
The Regulation was extended to Greece, Spain and Portugal when these countries
Joined and since 1988 it has also covered Ireland.
As a result of the reform of the structural Funds, the rates of refund in
Objective 1 regions were increased to make the scheme more attractive.
The number of groups     recognized   in   the  beneficiary  countries, other    than
Belgium, is 560.
The Commission considers that   the scheme should continue everywhere apart from
Belgium, where it has aroused  no interest. This will enable the Member States,
particularly those where the    scheme has been introduced recently, to benefit
fully from the common measure  and the new arrangements for refunds.
Some changes   are  proposed  to   improve   the  rules  concerning  information   on
production.
In view of the earlier amendments to the Regulation and those now proposed, a
consolidated version of Regulation (EEC) No 1360/78 is currently being prepared.
The estimated total cost to the EAGGF Guidance Section is ECU 15,9 million.
 ---pagebreak---                                            - 18 -
                                       Proposal for a
                                 COUNCIL REQUIATION (f6C)
                          amending Regulation (EEC) No 1360/78
                      on producer groupa and aaaociationa thereof
THE COUNCIL OF THE EUROPEAN COMMUNITIES,
Having regard to the Treaty establishing the European Economic Community, and in
particular Art idea 42 and 43 thereof,
Having regard to the propoaai from the Commission,
Having regard to the opinion of the European Parliament1,
Having regard to the opinion of the Economic and Social Committee2,
Whereaa Council      Regulation   (EEC) No 1360/78 3 , as     last amended by Regulation
                   4
(EEC) No 3808/89 , introduced a common measure to encourage, in certain regiona
of the Community where the aupply of agricultural producta reflecta very aevere
atrucural deficiencies, the grouping of producers to concentrate the aupply of
agricultural products and adapt production to market requirements;
Whereaa Belgium has not so far availed itself of this Regulation, despite the
Changea   to   the    minimum   requirements    for   that   country   laid   down ir\ the
                                                                   5
implementing regulation. Commission Regulation No 220/91 ; whereaa that Member
State should therefore       no   longer   fall  within    the ecope of Regulation (EEC)
No 1360/78;
Whereaa aince the common meaaure waa adopted the scheme has been extendad to
other   regions    and   sectors   with   similar    needs,   most   recently   by Council
Regulation No 3875/88® to the whole of             Ireland and to certain producta      in
France, and producers in those regiona should continue to have the opportunity
to benefit from Community aid;
1
2
3     0J  No L  166, 23.6.1978, p. 1.
4     OJ  No L  371, 20.12.1989, p. 8.
5     OJ  NO L  26, 31.1.1991, p. 15.
6     OJ  NO L  346, 15.12.1988, p. 16.
 ---pagebreak---                                                - 19 -
Whereas    under     the   reform   of   the   structural   Funds,   in order   to make    the
Regulation       more    effective      in    the   future,   Commission   Regulation   (EEC)
             7                                                           8
No   223/90 ,     as   amended    by   Regulation    (EEC) No    1941/90 ,  introduced    more
attractive rates of Community aid for producer groups in regions eligible under
Objective 1 as defined in Article 1 of Council Regulation (EEC) No 2052/889;
Whereas Council Regulation (EEC) No 1760/87 10 , as amended by Regulation (EEC)
No 1094/88 11 , introduced a number of provisions concerning the obligation on
members to market the whole of their production; whereas the monitoring powers
conferred on producer         groups as regards harvesting         and  the availability of
producta should be strengthened;
Whereas this is a common measure within the meaning of Article 2(1) of Council
Regulation     (EEC) No      4256/88 12    and   consequently   its  duration  need   not   be
 limited, as was the case before the reform of the etructural Funds when its
 legal   basis was Article        6(1) of     Council   Regulation   (EEC) No 729/70 13 , as
amended by Regulation (EEC) No 2048/88 14 ;
Whereas to assess the implementation of this Regulation, particularly in view of
 Its recent extension to certain parts of the Community, a report should be
submitted to the Council by 1 January 1997,
HAS ADOPTED THIS REGULATION:
                                             Arttçia 1
Regulation (EEC) No 1360/78 is hereby amended as follows:
1.     The third indent of Article 2 is deleted;
7       OJ No  L  22, 27.1.1990, p. 62.
8       OJ No  L  174, 7.7.1990, p. 34.
9       OJ No  L  185. 15.7.1988, p. 9.
10      OJ No  L  167, 26.6.1987, p. 1.
11      OJ No  L  106, 27.4.1988, p. 28.
12      0J No  L  374, 31.12.1988, p. 25.
13      0J No  L  94, 28.4.1970, p. 13.
14      0J No  L  185, 15.7.1988, p. 1.
 ---pagebreak---                                      - 20 -
2.   The third paragraph of Article 3 is deleted;
3.   The following Indent ia added to Article 6(1 M b ) :
     N
      - rulea on production information, with particular rogard to harvaatlng
        and availability.";
4.   Article 10(3)(b) ia replaced by the following:
        "(b) may not, however, exceed a total of ECU 60 000."
5.   Article 13(1) is replaced by the following:
        N
          1. Before 1 January 1997 the Commission shall submit to the Council,
             on the baaia of information supplied by the Member States, a report
             on the reaulta of the implementation of thia common meaaure.*1
                                    Article 2
This Regulation shall enter into force on 1 January 1992.
This Regulation shall be binding In ite entirety and directly applicable in all
Member States.
Done at Brussels,                                         For the Councl
                                                           The President
 ---pagebreak---                                          - 21 -
                                 FINANCIAL STATEMENT
                                      concerning
the proposal for a Council Regulation (EEC) amending Regulation (EEC) No 1360/78
on producer groups and associations thereof.
1.    PMflgft holding : (1991 nomenclature)
      82*1010 : Improvement of agricultural structures - Objective 1
      B2-1012 : Objective 5(a)
2.    LOGE I Dial* : Art Idee 42 and 43 of the Treaty
3.    ClatalfiMtlop : Non-compulsory expenditure
*•    Alat and tioacrlptton of tha noaauro :
      The main aim of the proposal is to remove the restriction limiting
      application of the Regulation to 31 December 1991 thereby extending it to
      future years and enabling the Member Statee to benefit fully from this
      measure, which is Intended to concentrate the supply of agricultural
      products and improve adaptation of production to market requirements.
5.    Hathod or calculation :
5.1   Type of expenditure : Partial refund of eligible national expenditure.
5.2   Community contribution : Normally 25%; up to 65% for regions currently
      eligible under Objective 1.
5.3   Calculation : Estimated expenditure is based on Member States' forecasts
      of development of the current scheme between 1992 and 1996, particularly
      the number of new producer groups which will be recognized.
5.    Financial impact on w a r at loo, appropriations
6.1   Schedule of commitment and payment appropriations (ECU mili ion)
      Yaar                 Commitment ana; payment      in opJactlva 1 ragiona
                                appropriations
      1992
      1993
      1994                            2.8(a)                       2.0
      1995                            3.7                          2.8
      1996                            4.3                          3.4
      1997                            5.1                          4.1
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                                                                 COM(91) 438 final
                                                         II
EN                                                                                 03
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