CELEX: 51981PC0527
Language: en
Date: 1981-10-15
Title: Proposal for a COUNCIL REGULATION (EEC) providing for special aid for raw tobacco following the earthquake in Italy in November 1980 and derogating from Article 12a of Regulation (EEC) No 727/70 (submitted to the Council by the Commission)

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DOCUMENTS "COM"
COM (81) 527
Vol. 1981/0158
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 ---pagebreak--- COMMISSION OF THE EUROPEAN COMMUNITIES
                                                  COM(81)527 final
                                                  Brussels . 15 October 1981
                                 Proposal for a
                            COUNCIL REGULATION ( EEC )
          providing for special aid for raw tobacco following the
           earthquake in Italy in November 1980 and derogating
               from Article 12a of Regulation ( EEC ) No 727 / 70
                                      : !
                                        I     ...              J
                 ( submitted to the Council by the Commission )
                                                   - -
 C0M(81 ) 527 final
 ---pagebreak---                                  EXPLANATORY MEMORANDUM
  1.    Italy/ and specifically the Campania region , was seriously affected by
        the earthquake in November 1980 . The extent of the damage to on-farm
        tobacco-curing facilities and to first-processing and market preparation
        installations , and the effect this has had :
         (a) on the income of growers ,                     ^                 %
         (b)  on their ability to adapt to market conditions ,
         (c)  on the scale of the problems for processors in marketing the 1980
              harvest,
        are such as to warrant exceptional measures for the tobacco sector .
        The tobacco produced in Campania accounts for about 50% of the country 's
        output, constitutes a source of income for 40 000 growers and provides
        employment for about 10 000 workers engaged in the processing and
        marketing of raw tobacco .                                    >
  2.1 . The earthquake destroyed, damaged or put out of action numerous centres
        for the first processing and market preparation of tobacco, and this
        has meant that all the operations carried out there have been concen­
        trated in those installations which were the least damaged or which
        were left unscathed . The Growers who could no longer complete the
        curing of the tobacco on the farm because of the damage suffered (2 600
        curing plants were severely damaged and put out of action, and a
        further 2 300 were damaged) , delivered their tobacco in bulk as best
        they could to the nearest processing centre .
  2.2 . The local authorities ordered the evacuation of damaged farms and
        asked those responsible for the processing centres to take over all
        the tobacco offered to them . Frcm 2 3 November 1980 these centres
\       accepted at their facilities and , warehouses all the tobacco delivered,
        making advance payments against the price and in seme cases paying the •
        norm price irrespective of the actual value of the tobacco and the
        state in which it was delivered . Early reports suggest that about
         15 000 tonnes of leaf tobacco were collected . Deliveries were concluded
        in February whereas normally they begin in March and are completed at
        the end of April . This meant suspending the normal activity of the
        plants engaged in first processing and market preparation, since their
        first concern was to accept the tobacco which was delivered to them
 ---pagebreak---                                        - 2 -
      and to carry out the initial curing operations normally carried out on
      the farms . The market preparation and baling of the tobacco was thus
      delayed by several months .
2.3 . When baled , this tobacco might be of less than normal quality , and
      there will be marketing problems . The resulting losses of income will
      adversely affect the final settlement paid to growers ( the vast majority
      of whcm are manbers of co-operatives ) at the end of the marketing
      year .
2.4 . Commercially , undertakings in the region concerned are all , irrespective
      of the extent of material damage to their various installations , faced
      with serious problans which will not be solved during a single year .
2.5 . The foregoing shows :
       (a)   the extent of the damage suffered by growers and processors and
             the degree to which their income from the 1980 tobacco harvest
             has been reduced , or wiped out , as a result of the earthquake ;
       (b)   the need for emergency financial aid from the Cormiunity for both
             growers and processors ;
       (c)   that there is a direct link between the earthquake and the fact
             that marketing of the 1980 tobacco harvest is proving difficult
             or impossible .
3.1 . Articles 1 and 2 of the draft Regulation provide for special financial
      aid for growers (Article 1 ) and for undertakings engaged in first
      processing and market preparation (Article 2 ) .
3.2 . The aid to producers has a threefold aim :
       ( a)  to help maintain the income of tobacco growers who were adversely
             affected by the earthquake ;
       ( b)  to help recreate normal conditions for growing , curing and market
             preparation on the farm;
       (c)   to provide tobacco growers with an opportunity to adapt to market
             requirements .
 ---pagebreak---                                       - 3 -
3.3 . The aid will be : 1 ECU/kg for growers whose tobacco-handling facilities
      have been destroyed , payable for the quantity of tobacco frcm 1980
      harvest delivered for which a pranium certificate was issued ; and 0.70
      ECUA9 for other growers who have suffered losses .
      For producers whose 1980 crop was at least 40% destroyed , the aid will
      be payable for 60% of the 1979 production as indicated in the premium
      certificate .
3.4 . About 5 000 growers could receive aid under this measure .
4.1 . The aid for undertakings engaged in first processing and market prepara­
      tion is intended to offset part of the additional costs which they
      have had to bear as a result of the initial curing and market prepara­
      tion operations carried out at their facilities on the quantities of
      tobacco harvested in 1980 and collected frcm growers because of the
      damage to tobacco-processing installations on the farm, where these
      operations are normally carried out .
4.2 . Since these costs cannot be entirely covered by "the Community , it would be
      appropriate to fix the flat-rate aid at a level more or lesB corresponding
      to half of the amount of the costs , i.e. 0,30 ECU/kg.
4.3 . The total quantity of tobacco eligible for the aid might amount to
      around 15 000 tonnes .
5.1 . Article 3 provides for the suspension of the application of Article
      12a of Regulation (EEC ) No 727/70 for undertakings engaged in the
      processing and market preparation of tobacco in Campania and its
      immediate surroundings .
5.2 . Article 12a of Regulation (EEC) NO 727/70 provides that where , for a
      given variety and harvest , the quantities of tobacco sold into inter­
      vention by an undertaking exceed 25% of the quantities treated by that
      undertaking the surplus quantities shall be bought in at a derived
      intervention price minus 10% .
 ---pagebreak---                                      - 4 -
5.3 . This measure will enable undertakings engaged in the first processing
      and market preparation of tobacco in Campania and its immediate sur­
      roundings to receive the derived intervention prices fixed for the
      1980 harvest on all quantities of tobacco grown there which are sold
      into intervention .
5.4 . The suspension of Article 12a is acceptable because it comes under the
      " exceptional circumstances" provided for in the basic Regulation ; the
      inclusion of the entire region affected and all the tobacco grown
      there is justified by the fact that all tobacco undertakings have been
      directly or indirectly affected by the earthquake in their processing
      and marketing operations .
6.    The cost of these measures will be borne by the EAGGF , Guarantee
      section , as part of the 1982 Budget . The total may be assessed at sane
      21 million ECU .
 ---pagebreak---         . '         Proposai for Council Regulation ( EEC )
             providing for special aid for raw tobacco following the
             earthquake in Italy in November 1980 and derogating from
             Article 12a of Regulation ( 3EC ) Ho 727/70
THK GUUÎÎCIL OF THE EUROPE/LU COÎ4MUIJITIE3 ,
Having regard to the Trea-ty establishing the Europes-n Economic Community ,
and in particular Articles 42 and 43 thereof , •
Ilavi-ng regard to the proposal from the Commission,
Having regard to the opinion of the European Parliament ,             1 .
Having regard to the opinion of the Economic and Social Committee ,
Whereas the earthquake in Italy in November 1980 particularly affected
the Campania region and its immediate surroundings ; whereas in that region
the growing , first processing and market preparation of tobacco constitute
an economic activity of prime importance } whereas the events of November
1980 have seriously affected the curing , first processing and market
preparation of the tobacco from that year 's harvest ;
Whereas the tobacco growers' production facilities were impaired by the
earthquake ; whereas official reports of the damage caused by the earthquake
have been drawn up by the Italian authorities ; whereas the damage has
adversely affected the competitiveness of individual or associated growers
and whereas , accordingly, they should be granted aid with a view to
restoring normal conditions of competition; whereas,however , in the
interests of fairness the aid should be granted to all those affected
and differentiated according to the extent to which their competitiveness
has been reduced ;
                            1
                            »                 *
Whereas all tobacco undertakings in the Campania region were directly or
indirectly affected by the earthquake in their processing and marketing
operations ; whereas undertakings engaged in the first processing and
market preparation of tobacco in Campania and its immediate surroundings
were asked to collect tobacco from growers in the . state in which it was
after the earthquake ; whereas in most cases they have had to carry out on
 ---pagebreak---                                        - 2 -
their premises the operations normally carried out by the growers ; whereas
they have had to hear additional costs as a result ; whereas there should
accordingly be a flat-rate aid to cover part of the additional costs which
the undertakings engaged in first processing and market preparation have
had to bear in the region affected by the earthquake ;
Whereas Article 12a of Council Regulation ( EEC ) Ho 727/70 of 21 April 1970
on the common organization of the market in raw tobacco ( l ), as last
amended by the Act of Accession of Greece , provides that where the quanti­
ties of baled tobacco sold into intervention by an undertaking engaged in
first processing and market preparation exceed , for a single variety and
a single harvest , 25% of the production of that undertaking, they are to
be bought in at a reduced intervention price ;
Whereas the earthquake has very
seriously affected the marketing of tobacco from the region concerned ;
whereas under these circumstances it would seem appropriate not to apply
the provisions of Article 12a ( l ) of Regulation ( EEC ) No 727/70 > whereas
it nevertheless seems possible for this derogation to be limited to the
processing of tobacco harvested in the region ;
'Jhereas in order to achieve the greatest possible effect the aid should
be paid within a very short period after it has been applied for }
HAS ADOPTED THIS REGULATION:
                                   Article 1
1 . Special aid shall be granted , on application, to Individual or associated
      growers whose premises or tobacco-handling installations were ,
     according to the official reports drawn up by the Italian authorities ,
     damaged as a result of the earthquake which occurred in Italy in
     November 1900 ,
( 1 ) OJ No L 94 , 28.4.1970 , p. 1 .
 ---pagebreak---                                        - 3 -
  2 . The aid shall consist of an amount for every kilogram of leaf tobacco
      harvested in 1980 for which a premium certificate , as provided for
      under Article 2(l ) of Regulation ( EEC ) No I726/7O , was issued.
                                    associated             .
      However , if an individual or U grower obtains from the 1980 harvest
      less than 60$ of the quantity of tobacco indicated on the premium          . '
      certificate issued for the 1979 harvest , the aid shall be calculated
      on the basis of 60% of the quantity of tobacco for 1979-
      The amount of aid shall be 1 ECU in the case of individual or associated
      growers whose premises or tobacco-handling installations have' been
      destroyed , and 0.70 ECU in other cases .
                                     Article 2
 1 . Special aid shall be granted , on application, to undertakings engaged
      in the first processing and market preparation of tobacco located in
                                                   I
      the Campania region in the Italian Republic in respect of the quantity ■
      of tobacco from the I98O harvest which they collected from the individual
      or associated growers referred to in Article 1 ( l ) after 2 3 November
      1900 .
 2 . For the purposes of this Regulation, undertakings engaged in the first
      processing and market preparation of tobacco located in Campania      shall
      include undertakings located in the immediate surroundings of the region
which'were requested by the Italian authorities to collect tobacco from the
 individual or associatedgrowers referred to in Article 1 ( l ).
 3 » The aid shall be 0.30 ECU for every kilogram of leaf tobacco collected
      in accordance with paragraph. 1 for whioh a premium certificate was
      issued ,                                                 •
                                   Article 3
 Article 12a(l ) of Regulation ( EEC ) No 727/7O shall not apply to the
 undertakings engaged in the first processing and market preparation of -
 tobacco referred to in Article 2 ( l ) and (2 ) in respect of tobacco
 harvested in I98O .
 ---pagebreak---                                     Article 4
The special aid referred to in Articles 1 and 2 shall "be considered , for
the purposes of the financing of the common agricultural policy, as forming
part of the measures to stabilize agricultural markets .
                                   Article 5
The Italian .Republic shall be responsible for paying aid under this
Regulation within two months of it seeing applied for .
                                   Article 6
Detailed rules for the imp lenient at ion of this Regulation shall be adopted
in accordance with the procedure provided for in Article 17 of Regulation
( KLJC ) No 727/70 .
                                  Article 7
This Regulation shall enter into force on the day of 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                                       For the Council
 ---pagebreak---                    FINANCIAL                STATEMENT
                                                                                 Oitt t           1.10.81
                heading : 1Qn1        7011 ( public storage )
                            1901 7019 ( other intervention )
                                                                                 « PPROBIATIONS :'1981 7011 : 41 B £Cll
                                                                                                       7019x 1 m EC! I
                  Draft Counoil Regulation laying down special measures for raw tobacco
 ?. tiki r fQiiQvjjjjg the earthquake in Italy in November 1980 and derogating from
                  Article 12a of Regulation 727/7°
 3 . ifGii BASIS :            Articles 42 and 43 of the Treaty
 4. aims or project 1         To assist tobaooo produoers affected by the earthquake in
    November 1980 and to enable their tobaooo to be marketed in normal conditions
    of oompet 'it ion                                                                                      ,
 J. FJNANC IAL IMPLICATIONS .                  PERIOD or 12 MONTHS CURRENT MfiANCXAL YCAR   FOLLOWING ADMNCIAL TEAR
 S.O IKPCN9ITURE
         CHAfiGCO TO TM6 CC 8UDCCT
       , ( HI ruNDS / ZNTCUVCNTIONS )           Storagei 0*4
      m       1                                 Aldi       20.3
      m KUZ                                     Total    ' 2^.7                                    20.7 m ECU
 1.1 «tCEiprs                                            ■ ECU
         own tcsoutcrs of the cc
         ( lCVlt$'CU$TO"S DUTIES )
      • NATIONAL
J. 0.1 ESTIMATED CtPENDITURI                              concerns only onfi marketing year
5.1.1 ESTIMATED RECEIPTS
9.2 MTMO* Of CALCULATION                                                             .  Ν
                                                                      SMJLtMHi' MAPWUftf
                                                                                                              cnyn
*.) will future budget approbations be necessary ?
OBSERVATIONS I
                            This proposal was not taken into aooount in this 1982 draft
                           budget .
 ---pagebreak---                                ANNEX
Method of calculation
Estimate of quantities involved :
it is thought that the measure will apply to Campania + 10 % for neighbouring
regions , i.e. according to the Italian authorities * estimate :
                14 180 000 kg x 1.10 - 15 600 000 kg.
1 . Non-application of Article 12a
    This lays down an intervention ceiling of 25 % of the quantity handled by
    each firm . Above this point the intervention price is reduced t}y 10
    A first assessment tgr the Italian authorities indicates that under the
    measure 1 300 t will not lose 10 % of the intervention price ,
         giving a cost of 1 300 x 2 875 ECU/t ( average derived intervention
         price ) x 10 % = 0.4 mio ECU.
2 . Aid to growers
    0.7 ECU/kg or 1 ECU/kg depending on damage
    x 15 600 000 kg                               = 15*6 mio ECU maximum
    and aid to processors 0.3 ECU/kg x
    15 600 000 kg                                 » 4-7 mio ECU
                                                    20 . 3 mio ECU maximum
Non-application of Article 12a will increase expenditure tinder item 7011
( Article 172 of 1982 draft budget ). The aid is to be charged to item 7019
( Article 173 of 1982 draft budget ).