RESTRICTED
WORLD TRADE G/SCM/N/3/EEC
12 March 1996
ORGANIZATION
(96-0849)
Committee on Subsidies and Countervailing Measures Original:English/
French/
Spanish
SUBSIDIES
NOTIFICATIONS PURSUANT TO ARTICLE XVI:1 OF THE GATT 1994
AND ARTICLE 25 OF THE AGREEMENT ON SUBSIDIES AND
COUNTERVAILING MEASURES
EUROPEAN COMMUNITIES
The following notification, dated 18 October 1995, has been received from the Permanent
Delegation of the European Commission.G/SCM/N/3/EEC
Page 2
EUROPEAN COMMUNITY
Notification of Subsidies Pursuant to Article XVI:1 of GATT and Article 25
of the Agreement on Subsidies and Countervailing Measures
1. Structure of notification
Subsidies in the European Community are granted both at Community level i.e. out of the
Community budget, and by the member States, at the level of national, regional or local government.
In view of this, the notification is divided into two parts. Part 1 deals with subsidies granted by
the European Community and general information on aid granted within the Community's territory,
Part 2 covers subsidies granted by individual member States.
2. Period covered
As far as possible, this notification relates to subsidy programmes which are currently in force, and
provides statistical information at least up to the end of 1994.
3. Presentation of notification
The information provided in this notification includes, as far as possible, all the elements required
by Article 25.3 of the Subsidies Agreement and in most cases follows the presentation required by the new
subsidies questionnaire. In view of the diverse nature of the sources of the individual contributions, it has
not in all cases been possible for the presentation to correspond exactly to the format of this questionnaire.
The Community is now making strenuous efforts to improve the presentation with a view to future
notifications.
4. Status of subsidies
In preparing this notification, the Community has attempted to achieve the maximum
transparency with regard to aid and support measures granted within its territory. The fact that such aid
has been notified does not, in accordance with Article 25.7 of the Subsidies Agreement, prejudge its legal
status under GATT 1994 of this Agreement, nor does it prejudge its effects under the Agreement or the
nature of the measure itself. In view of the diverse nature of many of the programmes notified, it may be
that only part of a programme's funding involves a subsidy element, which may or may not be specific.
Consequently, the appearance of a programme in this notification does not in any way imply that the
whole or part of its expenditure amounts to a specific subsidy.
Furthermore, the notification does not prejudge the non-actionable nature of certain programmes
under the provisions of footnote 35 to Article 10 of the Subsidies Agreement or the non-actionable status
that a programme would have under Article 8 of the Subsidies Agreement, had it been notified according
to the provisions of Article 8.3.G/SCM/N/3/EEC
Page 3
EUROPEAN UNION
Notification Pursuant to Article XVI of GATT and Article 25
of the WTO Subsidies Agreement
Structure of the Notification
Page
Chapter I: Subsidies granted by the European Union 4
Part 1: European Community's structural actions 5
Part 2: Agricultural products 11
Part 3: Industry sectors 53
(i) Aid to the coal industry 53
(ii) R&D Subsidies 56
Part 4: Fishery products 59
Chapter II: Subsidies granted by individual member States of the EU
Austria 61
Belgium 223
Denmark 229
Finland 235
France 245
Germany 277
Greece 299
Ireland 301
Italy 309
Luxembourg 329
Netherlands 331
Portugal 337
Spain 377
Sweden 507
United Kingdom 579G/SCM/N/3/EEC
Page 4
CHAPTER I: EUROPEAN COMMUNITY SUBSIDIES
(a) Subsidies granted out of the European Community budget
In 1994, total expenditure by the European Union amounted to 72.3 billion ECU, which is
equivalent to about 2.4 per cent of the public expenditure in the member States and 1.2 per cent of their
GDP.
The two largest areas of expenditure were agriculture and structural operations, which accounted
for 49.3 per cent and 30.5 per cent of financial commitments respectively. Another notable area of
expenditure is research, which took up 3.6 per cent of total expenditure. All these are described in more
detail in this part of the notification.
(b) State aid in the member States
(i)The European Commission is responsible for examining all state aid granted within the Community in
order to determine its conformity with Article 92 of the EC Treaty. Member States are
required to notify all aid schemes to the Commission, which may decide either not to
raise any objection or to open an investigation procedure. If the aid scheme is ultimately
found not to conform to Article 92, the Commission issues a negative decision which
prevents the aid being granted. If the member State has already granted such aid, the
Commission can order the aid to be repaid.
(ii)Details of member States' aid schemes can be found in Chapter II of this notification.G/SCM/N/3/EEC
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PART I: THE EUROPEAN COMMUNITY'S STRUCTURAL ACTIONS
Introduction
1. The Community's structural actions (comprising the structural funds and the cohesion fund) are
intended to strengthen the economic and social cohesion. of the Community, in particular by reducing
disparities between the levels of development of the various regions and the backwardness of the
least-favoured regions, including rural areas. Revised Regulations concerning the structural funds were
adopted on 20 July 1993, and cover the period 1994-1999. In 1995, 26.3 billion ECU was budgeted for
all structural actions.
2. The three main structural funds (European Regional Development Fund (ERDF), European
Social Fund (ESF), European Agricultural Guidance and Guarantee, Guidance Section (EAGGF)) are
described in detail in the attached annexes. In addition, the funds include the Financial Instrument for
Fisheries Guidance (FIFG) , which assists in the restructuring of the fisheries sector (0.44 billion ECU was
budgeted for this is 1995). The total budget of the structural funds amounted to 23.2 billion ECU in
1995.
The remainder of the Community's structural spending involves the Cohesion Fund , which is
intended to contribute to projects in the fields of environment and trans-European networks in the area of
transport infrastructure, and for which 2.15 billion ECU is budgeted in 1995, plus various reserves.
Those member States whose GDP per capita is less than 90 per cent of the EU average (Greece, Ireland,
Portugal and Spain) are eligible to benefit.
3. Total expenditure from the structural funds (ERDF, ESF, EAGGF and FIFG) is devoted to a
number of objectives as follows, all of which are co-financed by member States:
Objective 1Development and structural adjustment of the regions whose development is lagging behind
(61 per cent).
Objective 2Conversion of regions seriously affected by industrial decline (10 per cent).
Objective 3Combatting long-term unemployment and integrating young people and those threatened with
exclusion into the labour market (8 per cent).
Objective 4Facilitating the adaptation of workers of either sex, especially those threatened with
unemployment, to industrial change and to changes in production systems (1.5 per cent).
Objective 5aSpeeding up adjustment of structures in agriculture and fisheries in fine with the reform of the
Common Agricultural Policy (4.5 per cent).
Objective 5bEconomic diversification of fragile rural areas (4.5 per cent).
Objective 6Combatting problems faced by thinly populated regions of the Nordic countries (0.5 per cent).
The remaining 9 per cent is spent on Community initiatives and transitional measures.
4. These structural actions are required to conform strictly to the Community's rules on the
provision of state aid (Article 92 of the EC Treaty).
5. The structural actions are notified in a spirit of transparency vis-à-vis other Members of the WTO.
The aid involved is largely devoted to the least-developed areas of the Community, and the great majorityG/SCM/N/3/EEC
Page 6
of it goes to finance infrastructure or to assist individuals directly, without necessarily benefiting commercial
enterprises. Consequently, as stated at the beginning of this document, the notification of a particular
fund does not prejudge the status of the aid involved. In particular, only a small part of the structural
funds is used to assist investment.G/SCM/N/3/EEC
Page 7
European Regional Development Fund
1. Title of the programme
European Regional Development Fund (ERDF)
2. Period covered by the notification
January 1994 - June 1995
3.Policy objective and/or purpose of the programme
The ERDF is intended to help to redress the main regional imbalances in the Community
through participation in the development and structural adjustment of regions whose development is
lagging behind (objectives 1 and 5(b)) and in the conversion of declining industrial regions (objective 2).
4. Background and authority for the programme
Article 130(c) of the EC Treaty; Council Regulations (EEC) No. 2081/93, 2082/93 and 2083/93.
5.Form of assistance granted - Grants from Community budget for:
-Productive investment,
-The creation or modernization of infrastructure which contributes to the development or conversion of
the regions concerned, and
-Measures to exploit the potential for internally generated development of the regions concerned.
6. To whom and how the assistance is provided
ERDF aid is co-financed with the member States, and in general does not exceed 50 per cent of
the total public expenditure involved.
Member States submit multi-annual operation programmes, covering a coherent set of regional
development measures, and are responsible for the implementation of the programme and the selection
of individual projects.
As regards productive investment, the ERDF participates in financing (national) investment aid
with a regional aim.. This aid is governed by the principles of coordination adopted by the Commission
within the context of its competition policy and which, inter alia , differentiate aid ceilings according to the
levels of development of the assisted regions.
7. Total expenditure under the programme
10.6 billion ECU has been budgeted for 1995, excluding Community initiatives.
8. Duration of the programme
1994-99 (Revised Regulations)G/SCM/N/3/EEC
Page 8
9. Trade effects
Because the programme is designed to alleviate disparities between regions within the
Community, and because the aid is paid out on a horizontal basis, it is considered that the trade effects are
minimal.G/SCM/N/3/EEC
Page 9
European Social Fund
1. Title of the programme
European Social Fund (ESF)
2.Period covered by the notification
1 January 1994 - 30 June 1995
3. Policy objective and/or purpose of the programme
The European Social Fund was set up by the EEC Treaty in 1957 to improve the employment
opportunities for workers and to help raise their living standards. It is based on Articles 123-125,
130(a)-130(e) of the EEC Treaty, according to which its main tasks are to render the employment of
workers easier and to increase geographical and occupational mobility within the Community.
4. Background and authority for the programme
Above Articles of EC Treaty: Council Regulations (EEC) No. 2081/93, 2082/93 and 2084/93.
5. Form of assistance granted - Grants from Community budget for:
-Vocational training;
-Start-up aid;
-Innovative measures.
6. To whom and how the assistance is provided
The ESF provides co-financed support in member States for vocational training, aids for
employment and innovate actions. The aid is normally devoted to people, not to enterprises.
Operational programmes, once approved by the Commission, are managed by the competent
authorities in the member State. Identification of individual projects is the responsibility of the member
State.
7. Total expenditure under the programme
6.4 billion ECU has been budgeted for 1995, excluding Community initiatives.
8. Duration of the programme
1994-99 (Revised Regulations)
9. Trade effects
Since aid is granted for the benefit of individuals, not enterprises, the ESF is not considered to have any
appreciable impact on trade.G/SCM/N/3/EEC
Page 10
European Agricultural Guarantee and Guidance
Fund (EAGGF) - Guidance Section
1. Title of the programme
European Agricultural Guarantee and Guidance Fund (EAGGF) - Guidance Section
2. Period covered by the notification
1 January 1994 - 30 June 1995
3.Policy objective and/or purpose of the programme
(a)Speeding up the adjustment of agricultural structures in the framework of the reform of the common
agricultural policy (objective 5(a));
(b)Promoting rural development and structural adjustments in regions whose development is lagging
behind, including underdeveloped agricultural regions, (objective 1 and 5(b)).
4. Background and authority for the programme
Council Regulations (EEC) No. 2081/93, 2082/93 and 2085/93. The EAGGF Guidance
Section was established in 1972.
5. Form of assistance granted - Grants from Community budget for:
(a)Adjustment of agricultural structures (objective 5(a));
(b)Agricultural development measures (objectives 1 and 5(b)).
6.To whom and how the assistance is provided
Aid is co-financed with the member States on the basis of multi-annual operation programmes
based on the aims of the EAGGF Guidance Section as set out above. The member States are responsible
for the implementation of the programme and the selection of individual projects.
7.Total expenditure under the programme
3.3 billion ECU has been budgeted for 1995, excluding Community initiatives.
8. Duration of the programme
1994-99 (Revised Regulations)
9. Trade effects
Because of the aims of the programme it is considered that the trade effects are minimal.G/SCM/N/3/EEC
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PART II: AGRICULTURE
A. GENERAL REMARKS
1. The measures notified concern only products which are the subject of a Common Agricultural
Policy, namely the following sectors:
-Cereals
-Rice
- Dairy products
-Oils and fats
-Sugar and isoglucose
-Bovine meat
-Pigmeat
-Sheepmeat
-Fruit and vegetables and products processed from fruit and vegetables
-Wine
-Tobacco
-Fishery products
-Dehydrated fodder
-Textile fibres (cotton, fibre flax and hemp, silkworms)
-Peas, broad beans and field beans used in animal feed
-Seeds
-Hops
-Eggs and poultry
-Products of the agri-foodstuffs industries (products "not in Annex II")
2. The measures notified include all the price support measures introduced by the common market
organizations that can involve participation either by the Community's financing organization or by the
government of a member State, to the extent that such measures derive from the Community regulations.
3. With respect to the total amount of aid for each sector, it should be noted that the data relate to
payments made by the European Agricultural Guidance and Guarantee Fund (EAGGF) in the course of
the budgetary year concerned.
B. MEASURES
I. EXPORT REFUNDS
For certain of the sectors governed by a common market organization, the Common Agricultural
Policy provides for the possibility of granting export refunds.
The purpose of export refunds is to cover the difference between Community prices and
international trade prices in order to enable exports to be effected at international trade prices.
The refund is the same for the whole of the Community; a differential may be applied according
to destination or time (months of delivery). The amount of the refund is fixed periodically by the
Commission. The periodicity of the fixing is different for each sector because of the special characteristics
of each sector. In order to facilitate export operations, in the case of the majority of products a system has
been introduced whereby refunds can be fixed in advance. The refund is paid to the exporter.
The total amount of export refunds financed by the EAGGF during the past few years, and for
each sector, is as follows:G/SCM/N/3/EEC
Page 12
(ECU million)1
Products Refunds
1991Refunds
1992Refunds
1993Refunds
1994
Cereals 3,732.4 3,281.7 2,878.8 1,571.6
Rice 89.6 101.4 75.4 23.6
Sugar24.4 7.1 1.0 0.7
Olive oil 111.8 48.4 68.8 52.8
Oils and fats 0.5 0.1 pm pm
High-protein products - - - -
Flax and hemp - - - -
Cotton - - - -
Silkworms - - - -
Fruits and vegetables 94.8 116.7 187.5 216.7
Wine 55.5 77.3 100.2 80.4
Tobacco 65.3 57.4 36.2 49.9
Seeds - - - -
Hops - - - -
Agriculture - - - -
Dairy products 2,319.0 2,119.0 2,340.8 1,949.2
Bovine meat 1,282.4 1,332.5 1,711.2 1,708.4
Sheepmeat and goatmeat - - - -
Pigmeat 199.5 130.5 193.5 259.1
Eggs and poultry 169.2 193.1 290.9 239.6
Products of the agri-foodstuffs
industries 704.1 699.6 743.5 631.4
Fishery products - 1.9 0.1 pm
Total expenditure 8,828.5 8,166.7 8,627.9 6,783.4
1Includes "food aid" refunds.
2Starting with marketing year 1981/82, the export refunds on domestic sugar have been entirely financed out
of producer contributions by producers of sugar and isoglucose and sugar beet and sugar cane producers of the
Community. The amounts for 1991, 1992, 1993 and 1994 represent food aid.G/SCM/N/3/EEC
Page 13
II. MEASURES ON THE INTERNAL MARKET
1. In order to stabilize markets and assure the agricultural population of an equitable standard of
living, the Common Agricultural Policy provides, in the market organization regulations for the different
products, intervention and aid measures which vary according to the nature of the product and the special
characteristics of the market.
2. The cost of these intervention and aid measures is, as a general rule, financed by the EAGGF.
During the past few years, by product sector, they have amounted to:
(ECU million)1
Products Intervention
1991Intervention
1992Intervention
1993Intervention
1994
Cereals11,475.9 2,317.2 3,748.7 11,130.5
Rice 34.1 - 4.5 10.2 4.0
Sugar252.6 72.6 83.6 59.2
Olive oil 1,762.4 1,705.9 2,395.4 1,758.9
Oils and fats13,549.0 4,131.9 3,063.4 -
High-protein products1959.0 862.0 1,083.8 -
Flax and hemp 33.6 29.0 29.6 33.2
Cotton 487.9 742.1 830.8 830.2
Silkworms 0.3 0.2 0.2 0.2
Fruits and vegetables 1,011.7 1,145.0 1,476.5 1,309.8
Wine 992.3 1,009.9 1,409.4 1,095.8
Tobacco 1,264.3 1,175.6 1,127.6 1,007.6
Seeds 66.7 81.5 70.4 75.5
Hops 0.9 9.9 24.5 3.7
Agriculture - - - -
Dairy products 3,387.6 1,950.7 2,923.8 2,291.5
Bovine meat 3,012.6 3,081.3 2,275.1 1,758.1
Sheepmeat and goatmeat 1,790.4 1,749.2 1,800.4 1,279.8
Pigmeat 52.7 11.2 2.4 21.9
Eggs and poultry - - - -
Products of the agri-foodstuffs
industries3- - - -
Fishery products 26.2 30.1 32.3 33.0
Other measures4- - - 378.4
Total expenditure 19,960.1 20,100.8 22,388.1 23,071.3
1Since 1994, expenditure on cereals, oils and fats and high-protein products has been consolidated under the
same budgetary heading: "Arable crops".
2Not including storage costs and the part comprising production refunds (chemical industry).
3Products "not in Annex II".
4Dried fodder and dried vegetables; until 1994 expenditure on these was included under expenditure on
high-protein products (for dried fodder) and fruits and vegetables (for dried vegetables).G/SCM/N/3/EEC
Page 14
ANALYSIS BY SECTORS
"CEREALS" SECTOR
The reform of the sector, adopted by the Council on 21 May 1992, radically changed the system
regulating cereals, dividing it into:
-A common market organization;
- a producer support system.
(a) The common market organization
The "reformed" common market organization came into force on 1 July 1993. It is regulated by
Council Regulation (EEC) No. 1766/92 and, like the former system, covers the following products:
-Grain cereals: common wheat, durum wheat, barley, rye, oats, maize, buckwheat, canary seed,
millet, others;
-processed products: flours, groats and meal of wheat, malt, starch, glucose, cereal-based
preparations, bran, wheat gluten, manioc.
The cereal year runs from 1 July to 30 June.
1. Operation of the market
Price regime
The three types of price (intervention, target, threshold) applied under Regulation No. 2727/75
have been retained in the new basic Regulation, No. 1766/92, but their structure has undergone significant
changes:
-Significantly reduced price levels over a period of three marketing years (1993/94-1995/96)1;
-the price differentials between the various categories of cereal, established according to their use (bread
crops, animal feed), have been eliminated; the same price levels now apply to all cereals;
-the rules on derived prices have been abandoned for target and threshold prices;
-intervention buying in prices have been eliminated;
-special price increases for above standard qualities have been eliminated.
1
Year Target price Intervention price Threshold price
1993/94 128.32 115.49 172.74
1994/95 118.45 106.60 162.87
1995/96 108.58 98.71 153.00G/SCM/N/3/EEC
Page 15
There has been no change in the role of these prices.
Intervention price: Intervention agencies are obliged, during a certain period, to buy in cereals
offered to them provided they comply with quality requirements.
This obligation does not apply to fodder wheat, for which support is subject to special intervention
measures.
An intervention price has been maintained for common wheat (bread crops), durum wheat,
barley, maize, sorghum and rye.
Target price: It is no longer derived from the intervention price using predetermined criteria. It
serves only as a "guideline" for the market price.
Target, intervention and threshold prices are subject to monthly increases to cover storage costs
(technical and financing costs). This also helps ensure that the disposal of cereal stocks conforms to
market requirements.
2. Specific measures
Border regime
When the world price is lower than the Community threshold price, a levy equal to the
difference between the threshold and the c.i.f. price is charged on imports.
When the price of cereals within the Community is higher than the world market price, a refund
based on the difference between the internal and world prices is granted for exports. If the world price
exceeds the common price, exports may be subject to a levy.
There is also a cereal food aid programme under which refunds may be granted.
Stocks
Following the reform, only two intervention measures now apply in this area (the third, - the
compensatory allowance payable at the end of the marketing year, has been abandoned).
-Buying-in from public stocks and subsequent operations: these measures concern buying-in by
the intervention agencies and related disposal operations. They give rise to technical and
financing costs, and gains and losses on sales of stocks;
-special measures: the purpose of these measures, provided for in Article 6 of the new basic
Regulation, No. 1766/92, is to limit the quantities of the cereals subject to compulsory
buying-in by the intervention agencies. The Commission has wide discretion as to their
application.
Production refunds
The reform has not changed the structure and objectives of these refunds. They consist of aid
granted to industrial users of starch.G/SCM/N/3/EEC
Page 16
Aid for durum wheat (see point (b) 4 below).
Co-responsibility levies and aid for small cereal producers
Since the 1992/93 marketing year, co-responsibility levies in the cereals sector and, consequently,
aid to small producers, no longer apply.
(b) Producer support system
1. The reform of the "arable crops" sector came into force on 1 July 1992. It is regulated by Council
Regulation (EEC) No. 1765/92 which covers all cereals, oilseeds and protein crops.
2. For cereals, institutional prices are greatly reduced in order to approximate them to world prices.
The resulting loss of income is offset by a compensatory payment calculated per hectare granted upon
application to producers who sow cereals. To take account of the diversity of agricultural structures within
the Community, compensatory payments are differentiated according to region on the basis of past yields
per hectare. Each member State establishes a regionalization plan using the criteria set out in Article 3 of
Regulation No. 1765/92:
-The regions must be homogeneous zones of a minimum size;
-the zones must allow for specific structural characteristics that influence yields (soil fertility,
irrigation, etc.).
As a general rule, for each zone an average yield for all cereals should be applied. However, two
exceptions are allowed in view of the fact that yields may differ widely:
-A different yield figure may be applied for maize as compared to other cereals;
-the yields fixed for a given region may be differentiated between irrigated and non-irrigated areas
(mixed zones).
Where these two exceptions are applied, however, the yield may not be higher than the average
cereal yield for the region in question during the reference period.
3. Since the cereal price reduction is phased in over three years, the amount of the compensatory
payment is increased accordingly:
-ECU 25 x regional yield for 1993/94;
-ECU 35 x regional yield for 1994/95;
-ECU 45 x regional yield for 1995/96.
These amounts apply by analogy to potatoes used for starch.
4. In the case of durum wheat, alignment with the intervention price of other cereals has led to a
further drop in prices. To offset the consequent loss of earnings to producers a supplement to the
compensatory payment is granted for the area sown with durum wheat in traditional production zones.
The supplement is set at 297 ECU/ha. for the 1993/94 marketing year. It encompasses both the former
aid for durum wheat and the part of the price reduction not covered by the compensatory payment.G/SCM/N/3/EEC
Page 17
The supplement is payable for the number of hectares sown with durum wheat which were
eligible for the former aid during the marketing years 1988/89 to 1991/92. The producer determines the
marketing year to be used.
5. Compensatory payment is granted only for an area not exceeding a regional base area. This is
established as the average number of hectares within the region sown with arable crops (cereals, oilseeds,
protein crops) in 1989, 1990 and 1991 or, where appropriate, left fallow in accordance with a publicly
funded aid scheme. As in the case of regionalization plans, member States determine the region, which
may cover the whole territory of a member State or several zones within a member State. It may not be
less than a yield zone.
Member States may also apply individual base area systems. In the first year, however, no
member State made use of this option.
6. A base area system ensures more effective production restraint.
When the sum of the individual areas for which aid is claimed (including the set-aside) is in excess
of the regional base area the following measures are applied in the region in question:
-During the same marketing year, the eligible area per producer will be reduced proportionally for
all the aids;
-in the following marketing year, producers in the general scheme will be required to make,
without compensation, a special set-aside.
7. The compensatory payment is granted under:
-A general scheme open to all producers; or
- a simplified scheme open to small producers.
Small producers are producers who make a claim for compensatory payments for an area no
bigger than the area which would be needed to produce 92 tonnes of cereals. The yields set out in the
regionalization plan are used to calculate this tonnage.
Under the simplified scheme applicable to small producers:
-No set-aside requirement is imposed;
-the compensatory payment is paid at the rate applicable to cereals for all areas sown with arable
crops, including oilseeds and protein crops.
Producers who claim compensatory payment under the general scheme (i.e. either for a number
of hectares producing more than 92 tonnes of cereal, or special payment for oilseeds) are required to set
aside part of the land of their holding from production, for which they receive compensation. The
compensation is equal to ECU 45 x regional yield, i.e. the level of compensatory payment to apply as from
the 1995/96 marketing year. For the 1993/94 marketing year, the amount of compensation is ECU 57.G/SCM/N/3/EEC
Page 18
The set-aside system is one of the principal measures for ensuring more effective restraint of
production. As a rule, it should be organized on the basis of a rotation of areas. The legislation therefore
provides for a five-year interval before the same land may be again left fallow. The rotational set-aside
requirement has been fixed at 15 per cent. As from the 1993/94 marketing year, non-rotational set-aside
is allowed in return for a higher set-aside percentage rate (+5 per cent as a general rule and +3 per cent for
crops needing less fertilizer or in countries heavily committed to the set-aside system).
8. The price and support policy for potatoes grown for starch manufacture comprises two measures:
-A minimum price paid by the industry to the farmer; and
-a special premium which may be paid to the industry.
The minimum price is established as part of the CAP reform and is still aligned with institutional
prices of cereals, giving rise to payment of the above-mentioned compensation. The special premium
compensates the potato starch industry for certain structural disadvantages vis-à-vis cereal starch
manufacturers.
"RICE" SECTOR
(a) Intervention measures
Each year an intervention price for paddy rice is fixed from which the intervention buying-in price
is derived. The intervention agencies are obliged to buy in any rice harvested in the Community and
offered to them, provided offers are made during the open period (January to July) and comply with
certain conditions, in particular in respect of quality and quantity.
The intervention buying-in price is fixed for a given standard quality. If the quality offered differs
from the standard quality, the price is adjusted by the application of price increases or reductions. It is
applicable in all the Community intervention centres fixed at the beginning of the marketing year.
The intervention buying-in price is fixed for the marketing year (September to August) and
increased each month during the open period to take some account of warehousing and interest costs for
storage of cereals in the Community.
The intervention buying-in prices fixed at the beginning of marketing years have been as follows:
(ECU/t.)
Product 1988/89 1989/90 1990/91 1991/92 1992/93 1993/94
Paddy rice 295.34 295.34 294.83 294.83 294.83 291.02
Spanish prices have been aligned with Community prices as from marketing year 1990/91.
Portuguese prices have been aligned with Community prices as from April 1993.
(b) Compensatory allowance
In addition, a compensatory allowance may be granted for paddy rice and the husked rice
obtained therefrom remaining in stock at the end of the marketing year. The purpose of this allowance is
to give maximum compensation for the difference between the prices in force at the end of one and the
beginning of the next marketing year. To date, however, this measure has never been applied.G/SCM/N/3/EEC
Page 19
(c) Production refund
A production refund is paid to users of rice starch for the production of certain non-food
products that are not protected upon import by a levy or tariff system. The main beneficiary industry
comprises the chemical, paper and pharmaceuticals sector. The refund is variable and is currently
calculated so as to align prices of Community raw materials with the world market level.
(d) Varietal conversion scheme
In order to reorient rice production towards the varieties most in demand in the Community, an
aid for the production of "Indica" varieties has been introduced.
The aid is of a temporary nature and should encourage varietal conversion of rice production so
that it corresponds better to actual demand in the north of the Community. Development of "Indica" rice
production will at the same time be accompanied by a reduction in supplies of "Japonica" rice traditionally
exported in large quantities to Mediterranean countries.
For marketing year 1992/93, the amount of this aid is set at ECU 100/ha.
"DAIRY PRODUCTS" SECTOR
(a) Intervention measures
Each year an intervention price is fixed for butter, skimmed milk powder and Grana Padano and
Parmigiano-Reggiano cheeses and the national intervention agencies buy in at this price any such products
of Community origin which comply with certain quality and packaging conditions.
The intervention prices fixed for the last few marketing years were as follows:
(ECU/100 kg.)
Intervention price valid forMilk marketing year
1991/92 1992/93 1993/94
1. Butter
- Community of Ten 292.78 292.78 280.33
- Spain 302.49 - -
- Portugal 292.78 - -
2. Skimmed milk powder
- Community of Ten 172.43 170.20 170.20
- Spain 202.67 - -
- Portugal 200.00 - -
3. Cheese
- Grana Padano
- 30-60 days 380.32 379.67 367.24
- at least 6 months 471.24 470.43 456.53
- Parmigiano-Reggiano 519.21 519.21 504.76
Under the intervention mechanism, as amended in March 1987, intervention buying-in may be
limited when certain criteria are met. Since July 1987, intervention butter has been bought in under a
tendering procedure.G/SCM/N/3/EEC
Page 20
The butter is bought in at a maximum price fixed in relation with the bids received and accepted
by the Commission.
(b) Aid to private storage
In order to reduce any quantities offered for intervention buying-in or to deal with a certain
market imbalance, a system of aid for private storage is operated for:
-Butter bearing an official inspection mark, and prime-quality cream;
-cheese:
· Grana Padano aged at least nine months
· Parmigiano-Reggiano aged at least 15 months
· Provolone
provided they have been produced in the Community and comply with certain conditions.
(c) Aid for skimmed milk for animal feed
Aid is granted for skimmed milk and skimmed milk powder manufactured in the Community
and intended for animal feed.
The milk or powder must be either directly denatured or incorporated in some compound
feedingstuff intended for livestock.
(d) Aid for skimmed milk processed into casein
Aid is granted for skimmed milk produced in the Community and processed into casein,
provided both the milk and the casein produced from it comply with certain conditions.
(e) Other measures
-Measures may be taken, in years in which they are found necessary, to support the market for
long-keeping cheeses, if such cheeses comply with certain conditions. These measures
are taken, in particular, in the form of aid for private storage.
-When surpluses of dairy products develop, or threaten to develop, measures other than the above may be
taken to facilitate their disposal or to prevent the development of new surpluses. A
number of measures are currently in force to facilitate butter disposal on the Community
market; inter alia , aid is granted for use in the form of concentrated butter for cooking,
incorporation in certain foodstuffs and for direct consumption by certain categories of
persons or institutions.
-In order to encourage consumption by young people, aid is granted to member States which operate an
aid programme for milk distributed in schools so that pupils can obtain milk at a reduced
rate.
(f) Additional levy payable by producers or purchasers of cows' milk
An additional levy was introduced in 1984 on quantities of milk exceeding those delivered in 1981
plus 1 per cent. The Council has fixed the corresponding quantities for each member State. In thisG/SCM/N/3/EEC
Page 21
connection, the Council adopted Regulation (EEC) No. 856/84 (O.J. No. L 90 of 1 April 1984) and
Regulation (EEC) No. 857/84 (same O.J.).
The total quantity of "deliveries" envisaged for the Community (including Spain and Community
reserve) was 104,382 million tonnes for 1986/87. In parallel, the Council fixed a total quantity for direct
sales to consumers in the amount of 4.0 million tonnes. Within the total quantity for deliveries, the
member State determines reference quantities (quotas) either for individual producers (formula A), or for
dairies (formula B). On any quantities exceeding those quotas, a levy is applied during the first three years
of operation of the system, equivalent to 75 per cent of the target price for milk for formula A and 100 per
cent for formula B.
The total quantities were reduced by 2 per cent as from 1 April 1987 and by a further 1 per cent
on 1 April 1988. In order to facilitate the decline in deliveries and direct sales resulting from the
reduction of total quantities, a Community system has been set up to finance definitive cessation of
production (Regulation (EEC) No. 1336/86 - O.J. No. L 119 of 8 May 1986, page 19) providing for the
grant of an allowance to producers who so request, in return for an undertaking on their part to cease milk
production definitively and the cancellation of their reference quantities.
In December 1986 and March 1987, the Council extended the system until 31 March 1992 and
adopted a series of additional measures designed to adjust production to market needs. They include a
temporary suspension of 4 per cent of the reference quantities in 1987/88 and 5.5 per cent (an additional
1.5 per cent) in 1988/89, with payment of an allowance to the producers concerned, together with an
increase of the levy at the producer level (the levy rate for formula A has been raised to 100 per cent,
while for formula B the modalities for sharing out the levy paid by the dairy have been adjusted), so as to
reduce deliveries by a further 1 per cent.
Following the judgements of the Court of Justice, on 28 April 1988, on cases 120/86 and 170/86,
the Council adopted a series of measures in March 1989 providing inter alia for the allocation of a special
reference quantity to SLOM2producers and, for that purpose, an increase of the Community reserve by
600,000 tonnes (Regulations (EEC) Nos. 764/89 and 766/89 - O.J. L 84 of 29 March 1989, page 2).
On the basis of the Commission's report on the functioning of the quota system (COM(89)352 of
3 August 1989), in December 1989 the Council decided to increase the Community reserve by 1 per cent
of the guaranteed total quantity of member States in order to grant those quantities to certain producers in
a difficult situation (Regulation (EEC) No. 3881/89 - O.J. L 378 of 27 December 1989). At the same
time, the Council decided that 1 per cent of the 5.5 per cent of quantities suspended should be converted
into a definitive reduction of the guaranteed total quantity (Regulation (EEC) No. 3879/87 - O.J.
mentioned above) and to increase the additional levy rate from 100 to 115 per cent of the target price
(Regulation (EEC) No. 3880/89 - O.J. mentioned above).
Subsequently, taking into account the suspension and the Community reserve, the total quantity
available has moved as follows:
2SLOM: Slacht-en Omschakelingsregeling = premiums for non-marketing and conversion.G/SCM/N/3/EEC
Page 22
(million tonnes)
1990/91 1991/92 1992/93
97,864 103,754
The Community reserve of 393,000 tonnes, of which 25,000 tonnes was initially allocated to
Luxembourg, 303,000 tonnes to Ireland and 65,000 to Northern Ireland, was increased by 50,000 tonnes
for Spain since 1 April 1987, then by 600,000 tonnes for SLOM producers in March 1989, of which
502,233 tonnes were allocated under Article 3 bis of Regulation (EEC) No. 857/84. Since 1 April 1989
the reserve has been raised to 2,082,885,740 tonnes of which 1,039,885,740 have been allocated under
Article 3 ter of that same Regulation.
In 1992 the Council decided to simplify and codify the regulations on the additional levy system.
The new rules are contained in Council Regulation (EEC) No. 3950/92 which retains the
principle of the existing provisions but with certain adjustments, such as:
-The elimination of historical reference quantities, so that individual quantities are derived from
quantities available on holdings at 31 March 1993;
-the levy is equal to 115 per cent of the target price for both deliveries and direct sales;
- definitive transfers may be made between two types of quota at the request of producers;
-the Community reserve is abolished and its various parts distributed between member States and
incorporated into total quantities;
-the principle of the temporary lease of unused quantities is established, with certain derogations;
-the principle of linking quotas to holdings is retained, but greater flexibility is allowed in certain
cases;
-the provisions on control are strengthened, as are the rules enforcing payment of the levy.
"OILS AND FATS" SECTOR
A. Olive oil
The market organization system for olive oil is made up as follows:
1. Each year, before 1 August, an intervention price is fixed for olive oil, and the intervention
agencies are obliged to buy in at this price any olive oil of Community origin which may be offered to them
during the last four months of the marketing year.
The intervention price is fixed for a given standard quality. If the quality of olive oil offered
differs from the standard quality, the price is adjusted in accordance with a scale of price increases or
reductions. The intervention price is fixed before the beginning of the marketing year (1 November).
As from marketing year 1990/91, the Council has introduced a stabilizing mechanism for the
intervention price. If in any marketing year production exceeds the guaranteed maximum quantity
(GMQ) (1.35 million tonnes), the intervention price for the ensuing marketing year is reduced by up to 3
per cent.G/SCM/N/3/EEC
Page 23
2. Aid to producers is also granted in respect of olive oil produced in the Community from olives
harvested in the Community. However, if in any marketing year production exceeds the GMQ
(1.35 million tonnes), the amount of aid is reduced proportionately to the overrun. This aid is designed
to contribute to establishing a fair income for producers. Increased aid is also granted for small producers
who are exempt from the co-responsibility scheme.
3. A representative market price is fixed at a level permitting disposal of olive oil production, taking
into account prices of competing oils, by 1 October of each year.
4. Consumption aid is granted, equal to the difference between the production target price, less the
production aid and the representative market price. This aid is designed to facilitate the marketing of
Community olive oil.
The various elements mentioned above were fixed at the following levels:
(ECU/100 kg.)
1991/92 1992/93 1993/94
Intervention price 215.87 201.84 191.80
Production aid 70.83 84.11 88.18
Production aid for small producers 84.62 91.88 -
Representative market price 197.28 191.27 -
Consumption aid 53.90 45.78 -
5. Production refund for olive oil used in the manufacture of preserves (vegetables, fish, crustaceans)
The purpose of this refund is to enable beneficiaries to buy on the Community market, at prices
close to world market prices, the quality of oil which they use most frequently for their manufacturing.
(ECU/100 kg.)
1991/92 1992/93 1993/94
-Olive oil produced in the Community and used in member States other
than Spain and Portugal 104.53 96.36 96.36
-Olive oil other than referred to above, used in member States other
than Spain and Portugal 46.05 43.00 43.00
-Olive oil used in Spain 60.37 64.58 64.58
-Olive oil used in Portugal 95.55 89.89 89.89
Note: These amounts represent average prices.G/SCM/N/3/EEC
Page 24
Oilseeds
The Community's common market organization for oilseeds has undergone profound change
during the last two years. The volumetric support system, involving per tonne subsidies paid to
processors, was replaced at the end of the 1991/92 marketing year by a transitional system which involved
area-based support payments being made directly to producers. This transitional system was superseded,
at the end of the 1992/93 marketing year, by the provisions of the new arable crop producers' support
scheme, which involves area-based compensatory payments being made directly to producers of cereals,
oilseeds and pulses. Therefore, the details of the support scheme applicable in this sector during this
marketing year (1993/94) and those of the schemes applicable during the last two marketing years are all
different from each other.
1991/92
As in previous years, the Council of Miniseries fixed target and intervention prices for rapeseed
and sunflowerseed and a target and minimum price for soyabeans (the institutional prices). These were:
Oilseed: Rapeseed Sunflowerseed Soya
Price in ECU/t.
Target price EC 10: 442.7 EC 10: 573.8 EC 10: 549.1
Spain: 419.7 Spain: 506.5 Spain: 485.1
Intervention price EC 10: 400.8 EC 10: 525.8 -
Spain: 377.8 Spain: 458.5 -
Minimum price - - EC 10: 481.3
- - Spain: 417.3
The institutional prices in 1991/92 were all 1.5 per cent below their 1990/91 levels.
Aid was paid to the processors of these seeds, who were consequently able to pass this benefit on
to farmers in the form of a higher price for Community produced oilseeds than prevailed on the world
market. The aids were based on the difference observed by the Commission between the Community
and world market prices for the seeds.
In the rapeseed and sunflowerseed sectors, the institutional prices were augmented by monthly
increments of 0.278 ECU/100 kg. and 0.331 ECU/100 kg. respectively which were paid between
November and June. Additionally, a bonus payment of 1.25 ECU/100 kg. existed for rapeseed of "00"
quality.
The system of Maximum Guaranteed Quantities was continued in 1991/92, with levels unchanged
from 1990/91. Production levels during the year were estimated to be of such a level that the aids payable
to processors were to be reduced by:G/SCM/N/3/EEC
Page 25
Sunflower EC 10 18.43 ECU/100 kg.
Rapeseed EC 10 9.08 ECU/100 kg.
Spain 6.78 ECU/100 kg.
Soya Spain 4.67 ECU/100 kg.
Others 11.07 ECU/100 kg.
1992/93
In response to the outcome of a GATT panel, on 30 June 1992, separate market support
arrangements covering rapeseed, sunflowerseed and soyabeans were superseded by the common
provisions of the transitional support scheme. The marketing year for the unified oilseed sector was
established as 1 July to 30 June.
The transitional oilseed scheme of 1992/93 was radically different from its predecessor. The
introduction of the new scheme involved an end to the price differential that had existed on the
Community market between domestically produced, and imported, oilseeds. This was achieved
through the abolition of all the institutional prices that had previously been set each year by the Council
and of the processing subsidies that had been calculated by the Commission. They were replaced by a
system of support payments to be made directly to farmers growing oilseeds.
The level of the support payments was established on a regionally differentiated basis, reflecting
historic yield levels. To this end, each member State was required to establish a regionalization plan
dividing their territory into one or more homogeneous zones for which the average yield for cereals,
and where possible oilseeds, could be calculated. These regional average yields were used to calculate
regional support payment levels (Regional Reference Amounts) which were derived from a basic
support level of 384 ECU/ha. (the Community Reference Amount). This amount was calculated to be
the level of support necessary to avoid disrupting the existing balance between oilseeds and cereals
within the Community. The Community Reference Amount was calculated assuming a medium-term
equilibrium price for the oilseeds complex of 163 ECU/t. (the Projected Reference Price). Special
accession provisions existed for sunflower producers in Spain and Portugal, for whom the Reference
Amounts were 292 ECU/ha and 272 ECU/ha. respectively.
1994/95
The marketing year 1994/95 was the second year of application of the reformed oilseeds
regime established by Council Regulation 1765/92 and was the first year of application of the additional
control mechanisms agreed in the Memorandum of Understanding on Oilseeds, that forms part of the
Community's Uruguay Round Schedule.
Oilseeds producers within the Community receive a compensatory payment in respect of the
land they sow with rapeseed, sunflowerseed and soyabeans. This payment is decoupled and is not
dependent upon a harvest being made.
Producers may apply for a crop-specific compensatory payment under the General Scheme
(which obliges them to make set-aside) or a non crop-specific compensatory payment under the
Simplified Scheme (which does not require set-aside but which is available for only a limited area per
producer). Exceptionally, to respect the terms of the Accession Treaty, producers requesting the
Simplified Scheme Compensatory Payment in Spain and Portugal in 1994/95 in respect of sunflowersG/SCM/N/3/EEC
Page 26
received a crop-specific "non-professional" compensatory payment. The 1994/95 marketing year was
the last in which special accessional arrangements applied in the oilseeds sector in Spain and Portugal.
The Observed Reference Price (world market price for oilseeds as calculated by the
Commission) was 185.3 ECU/tonne in 1994/95. The level of this price led to a 5 per cent reduction in
the crop specific compensatory payments made to farmers throughout the Community.
The Community breached all three of its Oilseed Separate Base Areas. The breaches of the
Spanish and Portuguese Sunflower Separate Base Areas were 4 per cent and 20 per cent respectively.
These breaches gave rise to further reductions in the crop specific compensatory payments for
sunflowers of 4 per cent in Spain and 20 per cent in Portugal.
The Separate Base Area covering the remainder of the Community's oilseeds was exceeded by
9 per cent. This breach gave rise to a reduction in support equal to an aggregate of 9 per cent of the
support payments made within the Separate Base Area. This reduction was distributed as follows, and
was in addition to the reduction in support caused by the high world market price:
Rapeseed and Soya
(Percentage)
Spain 20.00
Germany 17.87
United Kingdom 11.81
Ireland 11.81
France 4.3
1995/96
The marketing year 1995/96 is the final transitional year of the reformed arable crop producers'
support system. As such, it is the first year in which the full effects of the reform, including the new
balance of competition between the oilseeds, cereals and pulses sectors will become apparent.
"SUGAR" SECTOR
1. Prices
(a) Sugar
Each year, an intervention price for white sugar is fixed for the non-deficit areas of the
Community; the intervention agencies are required to buy in the sugar concerned at that price
throughout the marketing year.
Intervention prices derived from that price are also fixed for each of the deficit areas.
The intervention price is fixed for a standard quality; if the quality of sugar is different, the
price is adjusted in accordance with a scale of increases or reductions.
In addition, an intervention price derived from the intervention price for white sugar is fixed for
raw sugar of a standard quality after allowing for a uniform refining margin and notional yield.
Intervention PricesG/SCM/N/3/EEC
Page 27
1990/91 1991/92 1992/93 1993/94 1994/95
White sugar 53.01 53.01 53.01 52.33 52.33
Raw sugar 43.94 43.94 43.94 43.37 43.37
(b) Beet
For beet, a basic price is fixed each year valid for a specified delivery stage and a specified standard
quality. This price is fixed taking account of the intervention price for white sugar and of notional values
representing in particular the processing margin, yield, and undertakings' receipts from sales of molasses.
In addition a minimum price is fixed for A beet3equal to 98 per cent of the basic price and a minimum
price for B beet4equal to 68 per cent or 60.5 per cent or the basic price.
These percentages are in direct relation with the production levies charged on A sugar and B
sugar. Manufacturers are required to pay at least these prices.
In addition, in areas for which a derived intervention price of white sugar has been fixed, these
minimum prices are increased by an amount representing the effects of regionalization of prices.
2. Production levies
As from 1 July 1981, the principle in force is that producers should bear the full amount of any
financial losses resulting from disposal of surplus production of Community sugar in relation to
consumption in the Community. Practical implementation of this principle is ensured through a levy
which may be charged at a rate of up to 2 per cent of the intervention price on all production under quotas
A and B (whereas hitherto only B sugar was subject to a levy).
If this first levy does not suffice to cover the financial losses in question, then a second levy, which
initially may not exceed 30 per cent and subsequently 37.5 per cent, if necessary, of the intervention price,
is charged but only on B quota production (i.e. a total of 2 per cent plus 37.5 per cent = 39.5 per cent,
which represents a minimum price for beet of 60.5 per cent of the basic price). This possibility has been
used since marketing year 1982/83. Any remaining losses not covered by these levies have been absorbed
since marketing year 1986/87 by additional levies. These new levies were introduced during the revisions
of the quota system from 1986 to 1988, initially to absorb the accumulated negative balance not covered
during the five marketing years from 1981/82 to 1985/86, and secondly to avoid any further accumulation
during the five-year period (from 1986/87 to 1990/91) for which it has been decided to extend the quota
system. Thus, for marketing years 1986/87 and 1987/88 a special absorption levy was introduced, as well
as an additional levy for the remaining three marketing years so as to absorb annually the losses not
covered by the normal production levies. These levies are calculated by multiplying the total amount
owed by the enterprise by a factor representing the relation between the total loss recorded and the
receipts from normal levies, i.e. the basic levy for A and B sugar and the B levy for B sugar. The integral
self-financing system on an annual basis has been extended whenever the quota system has been extended.
3A beet is beet intended for processing into A sugar, i.e. into sugar included in production quota A.
4B beet is beet intended for processing into B sugar, i.e. into sugar included in production quota B.G/SCM/N/3/EEC
Page 28
3. Reimbursement of storage costs
Provision has been made for reimbursement of storage costs in respect of sugar produced under
quotas A and B. The reimbursement is calculated on the basis of the intervention price for white sugar
and a standard fixed-rate interest rate for the whole Community. It is aimed at equalizing storage costs in
the Community. It is a measure designed to ensure regular disposal of sugar in the market throughout the
marketing year, to prevent the sale of excessive tonnages during the manufacturing period and in particular
to avoid the offering of sugar to intervention agencies solely in order to avoid storage costs. This
reimbursement is financed out of a levy on manufacturers, based on the principle of equality, at the
Community level, between the total sum reimbursed and the total sum levied.
4. Intervention measures
(a)Production refunds are granted on sugar used in the chemical industry, of which 60,000 tonnes
are charged to the budget, that being the quantity eligible for refunds before a new system
came into effect on 1 July 1986 under which all quantities over and above that ceiling are
charged to the producers and covered by the levies they pay.
(b)Disposal aid (transport, refining) is granted on raw sugar produced in the French overseas
departments in order to ensure that it has the same conditions of refinery access as
preferential sugar (ACP countries and India).
Variable refining aid is granted on all raw sugar refined in the Community in order to maintain a
refining margin that is necessary from the economic aspect and thus ensure, in particular, the disposal of
preferential sugar.
Refining aid is also granted on sugar imported into Portugal with a reduced levy.
"BOVINE MEAT" SECTOR
1. In the bovine meat sector a guide price and an intervention price are fixed each year.
The guide price is the price to be aimed at in a normal marketing year, through the operation of
the Community regulations, for all categories of adult bovine animals marketed in representative markets
of the Community.
Market price quotations and public intervention buying-in are based on the Community scale for
classification of adult bovine carcasses.
In the last three marketing years the guide and intervention prices have been as follows:
Guide price
(ECU/100 kg. live weight)Intervention price
(ECU/100 kg. carcass weight)
Marketing year 1991/92 200.00 343.00
Marketing year 1992/93 200.00 343.00
Marketing year 1993/94 197.42 321.64
In addition to public intervention, aid to private storage may be granted. The amount of such aid
is:G/SCM/N/3/EEC
Page 29
-Either established under a tendering procedure;
-or fixed in advance on a lump sum basis.
2. Price support regime
The European Community has introduced measures to link management of the internal market
more closely to market price trends.
Under the new regime:
-For the determination of buying-in prices under tendering procedures, only offers not exceeding
market prices by more than a reasonable margin are eligible;
-the thresholds for the activation of intervention buying-in have been fixed as follows (tendering
procedure):
Market price as a percentage of the
intervention price equal to 343
ECU/100 kg. carcassUnder regular tendering
proceduresUnder safety net
Community market price
Member State market price84%
80%78%
60%
To improve fattening of bovine animals, carcasses classified as 0 quality in the Community scale
are to be excluded gradually from public intervention as from 1993.
Lastly, the acceptance for the purpose of intervention of light carcasses weighing 150-200 kg. is
possible for a transitional period of three years as an alternative to the grant of a ECU 100 premium per
young male dairy calf withdrawn from production before the age of 10 days.
The reform of the Common Agricultural Policy also includes measures to adjust the organization
of the bovine meat market. Measures relating to breeding include a substantial reduction in the level of
price support. This is offset by the grant of direct income support, which is not tied to the level of
production, applicable as from 1 January 1993, and subject to:
-At farm level, a density threshold in livestock units (LSU) per hectare of forage area; and
-at Community level, a ceiling on the number of animals eligible for premium, which must be the
one prevailing in a given reference year (1990, 1991 or 1992).
3. Premiums
Payment of premiums in the bovine meat sector is subject to a density requirement in LSU/ha. of
forage area, which has been fixed as follows:
In 1993: 3.5 LSU/ha.
In 1994: 3.0 LSU/ha.
In 1995: 2.5 LSU/ha.
In 1996: 2.0 LSU/ha.
The density requirement does not apply, however, to holdings with less than 15 LSU.