COMMISSION OF THE EUROPEAN COMMUNITIES. Proposal for a COUNCIL REGULATION

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1 COMMISSION OF THE EUROPEAN COMMUNITIES Brussels, COM(2002) 307 final 2002/0135 (CNS) Proposal for a COUNCIL REGULATION amending Regulation (EEC) No 3950/92 establishing an additional levy in the milk and milk products sector (presented by the Commission)

2 EXPLANATORY MEMORANDUM 1. INTRODUCTION On 29 November 2000 the Commission presented its proposals (COM(2000) 791 final) on the agricultural side of the POSEI / outermost region arrangements, including POSEIMA for the Azores and Madeira. In line with Article 299(2) of the Treaty the purpose of the POSEI measures is to take more effective account of the specific features of the outermost regions. Parliament issued its opinion on 14 June 2001 and the Council formally adopted the Regulations on 28 June POSEI AGRICULTURE Agricultural production in the outermost regions benefits from full application of the CAP through the common market organisations and also from specific measures. The agricultural strand of POSEI is a response to permanent handicaps (mountain topography, particular climatic features, great remoteness, small farm sizes) and to specific constraints (small-scale economies, dependence, very high production costs). Financed by EAGGF Guarantee, it comprises two types of measure: specific supply arrangements and specific local production measures. 3. POSEIMA ADDITIONAL LEVY ARRANGEMENT When the POSEIMA proposal was discussed in the Council Portugal requested that, in order to permit the maintenance of traditional dairy farming in Madeira, Council Regulation (EEC) No 3950/92 of 28 December 1992 establishing an additional levy in the milk and milk products sector 1 should not apply to milk production there. That Regulation sets the reference quantities applicable in each Member State. The need for an ongoing incentive to local production justifies non-application of the Regulation to Madeira. The exemption is to be restricted to tonnes: the tonnes of present production plus a further tonnes estimated as the maximum reasonable production increase. Article 15(3) of Council Regulation (EC) No 1453/2001 introducing specific measures for certain agricultural products for the Azores and Madeira and repealing Regulation (EC) No 1600/92 (POSEIMA) 2 therefore specifies that Regulation (EEC) No 3950/92 is not to apply to Madeira within the limit of local production: 1 2 OJ L 405, , p. 1. OJ L 198, , p

3 "3. The additional levy scheme applicable to producers of cow's milk provided for in Regulation (EEC) No 3950/92 1 shall not apply in Madeira, within the limit of local production of tonnes of milk. 1 Council Regulation (EEC) No 3950/92 of 28 December 1992 establishing an additional levy in the milk and milk products sector (OJ L 405, , p. 1). Regulation as last amended by Commission Regulation (EC) No 603/2001 (OJ L 89, , p. 18)". 4. PRESENT PROPOSAL TO AMEND REGULATION (EEC) NO 3950/92 Introduction of this specific POSEIMA measure must not affect application of the levy scheme in the rest of Portugal. The Council in a statement entered in the minutes of its meeting on 28 June 2001, requested the Commission to propose an amendment of Regulation (EEC) No 3950/92: "As regards exemption of Madeira from the milk sector levy, the Council requests the Commission to submit, as soon as possible, a proposal for the amendment of Regulation (EEC) No 3950/92 establishing an additional levy in the milk and milk products sector." The impact of exemption must be restricted to producers in Madeira. The reference quantity for Portugal should be reduced by the amount of it at present available to producers in Madeira. The Annex to the Regulation needs amendment accordingly. There will be no disturbance to application of the common agricultural policy. Whenever the objective of the present proposal is reached, the Commission shall examine, in the light of the evolution of the local production, the relevant Community legislation and undertake, where appropriate, the necessary steps to continue the objectives of the common agricultural policy and Council Regulation (EC) No 1453/2001 to be achieved. 3

4 Proposal for a COUNCIL REGULATION 2002/0135 (CNS) amending Regulation (EEC) No 3950/92 establishing an additional levy in the milk and milk products sector THE COUNCIL OF THE EUROPEAN UNION, Having regard to the Treaty establishing the European Community, and in particular Article 37 thereof, Having regard to the proposal from the Commission 3, Having regard to the opinion of the European Parliament 4, Whereas: (1) In order to permit the maintenance of traditional dairy farming in Madeira, Council Regulation (EC) No 1453/2001 of 28 June 2001 introducing specific measures for certain agricultural products for the Azores and Madeira and repealing Regulation (EEC) No 1600/92 (POSEIMA) 5 stipulates that Council Regulation (EEC) No 3950/92 6 is not, within the limit of local production, to apply to Madeira. (2) Regulation (EEC) No 3950/92 sets the reference quantities applicable in each Member State. The exemption must not affect application of the levy arrangements in Portugal. The reference quantity for Portugal should therefore be reduced by an amount equal to that of the quantities available to producers in Madeira that were used in determining it. The Annex to the Regulation is amended accordingly, HAS ADOPTED THIS REGULATION: Article 1 The Annex to Regulation (EEC) No 3950/92 is replaced by the Annex to this Regulation OJ C...,..., p. OJ C...,..., p. OJ L 198, , p. 26. OJ L 405, , p. 1. Regulation as last amended by Commission Regulation (EC) No 603/2001 (OJ L 89, , p. 18). 4

5 Article 2 This Regulation shall enter into force on the 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 The President 5

6 ANNEX a) Total reference quantities (Article 3(2)) applicable from 1 April 2000 to 31 March 2001 Belgium Denmark Germany Greece Spain France Ireland Italy Luxembourg Netherlands Austria Portugal Finland Sweden United Kingdom ( 1 ) ( 1 ) Specific quota increase for allocation to Northern Ireland. b) Total reference quantities (Article 3(2)) applicable from 1 April 2001 to 31 March 2002 Belgium Denmark Germany France Luxembourg Netherlands Austria Portugal ( 1 ) Finland Sweden United Kingdom (²) (²) Specific quota increase for allocation to Northern Ireland. 6

7 c) Total reference quantities (Article 3(2)) applicable from 1 April 2002 to 31 March 2005 Belgium Denmark Germany France Luxembourg Netherlands Austria Portugal ( 1 ) Finland Sweden United Kingdom d) Total reference quantities (Article 3(2)) applicable from 1 April 2005 to 31 March 2006 Belgium Denmark Germany France Luxembourg Netherlands Austria Portugal ( 1 ) Finland Sweden United Kingdom

8 e) Total reference quantities (Article 3(2)) applicable from 1 April 2006 to 31 March 2007 Belgium Denmark Germany France Luxembourg Netherlands Austria Portugal ( 1 ) Finland Sweden United Kingdom f) Total reference quantities (Article 3(2)) applicable from 1 April 2007 to 31 March 2008 Belgium Denmark Germany France Luxembourg Netherlands Austria Portugal ( 1 ) Finland Sweden United Kingdom

9 FINANCIAL STATEMENT 1. BUDGET HEADING: B1-2000; B1-2001; B APPROPRIATIONS: 323m; 41m; 23m 2. TITLE: Council Regulation amending Regulation (EEC) No 3950/92 establishing an additional levy in the milk and milk products sector. 3. LEGAL BASIS: Treaty Articles 36, 37 and 299(2) 4. AIMS OF PROJECT: Maintain traditional dairy farming in Madeira. 5. FINANCIAL IMPLICATIONS PERIOD OF 12 MONTHS 5.0 EXPENDITURE - CHARGED TO THE EC BUDGET (REFUNDS/INTERVENTION) - NATIONAL ADMINISTRATION - OTHER 5.1 REVENUE - OWN RESOURCES OF THE EC (LEVIES/CUSTOMS DUTIES) - NATIONAL (EUR million) 0.3* CURRENT FINANCIAL YEAR 2002 (EUR million) FOLLOWING FINANCIAL YEAR 2003 (EUR million) ESTIMATED EXPENDITURE ESTIMATED REVENUE METHOD OF CALCULATION: Butter: 100 t x 1700/t = 0.17 Mio. SMP: 200 t x 500/t = 0.10 Mio Mio. 6.0 CAN THE PROJECT BE FINANCED FROM APPROPRIATIONS ENTERED IN THE RELEVANT CHAPTER OF THE CURRENT BUDGET? 6.1 CAN THE PROJECT BE FINANCED BY TRANSFER BETWEEN CHAPTERS OF THE CURRENT BUDGET? YES / NO YES / NO 6.2 IS A SUPPLEMENTARY BUDGET NECESSARY? YES / NO 6.3 WILL FUTURE BUDGET APPROPRIATIONS BE NECESSARY? YES / NO OBSERVATIONS: The measure reduces the milk quota for Portugal by 2000 t (equivalent to the current reference quantities of milk producers in Madeira) and establishes an exemption from the superlevy on the island of Madeira for local production up to 4000 t. The proposal will, if production in Madeira increases to 4000 t, result in the exportation from the EU of a further 2000 t of milk at present attracting a subsidy under the Madeira supply scheme. The intention of the Commission is to ensure, that these increased export quantities will be compensated for by a similar decrease in quantities allocation of these products to the supply scheme for Madeira. The calculations have been based on the cost of disposing of 2000 t of milk in the form of skimmed milk powder and butter. * If the annual milk production in future years on Madeira should increase to 4000 t, the proposal could lead to "non-collection" of superlevies on the quantities above 2000 t. This can at maximum be estimated at: 2000 t x /t = 0.7 Mio. 9