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COM (86) 019
Vol. 1986/0008
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COMMISSION OF THE EUROPEAN COMMUNITIES
C0MC86) 19 final
Brussels, 24 January 1986
TENTH COMMUNICATION FROM THE COMMISSION TO THE COUNCIL
concerning the programme for the utilization of co-responsibility levy funds
in the milk sector for the 1986/87 milk year
C0MC86) 19 final
Tenth Communication to the Council concerning the programme
for the utilization of co-responsibility levy funds in the
milk sector for the 1986/87 milk year
1. Article 4(3) of Council Regulation (EEC) No 1079/77 requires the Commission
to inform the Council of the programme of measures it proposes to implement
for the use of co-responsibility levy funds. Accordingly, this document
contains the Commission's proposals for the allocation of co-responsibility
levy funds of 2 % of the target price for the 1986/87 milk year. By
Regulation (EEC) No 1302/85 the Council has fixed the levy at 2 X of the
target price as from 1 April 1985 on. In its price decisions for the
1985/86 campaign the Council also made the statement that the disposal of
supplementary quantities resulting from its decisions should be financed by
increased contribution from co-responsibility levy funds.
2. General orientation
Council Regulation (EEC) No 1079/77 states that provision should be made
for specific measures linked to the co-responsibility levy to encourage the
expansion of markets inside and outside the Community and the search for
new outlets and improved products. Those measures have been considered by
the representatives of producers and processors as necessary for market
development in the long term. Moreover, taking account of the current
market situation, other measures were foreseen to encourage, in particular,
the disposal of stocks. Here also, the representatives of producers and
processors have made an important contribution in suggesting and
formulating priorities. The measures financed to date have been successful
in maintaining the market for milk and dairy products within the Community
and in providing an opportunity for the Community industry to exploit
market possibilities externally.
In addition to maintaining a long-term market support programme, the
Community now has a stock situation, especially in butter, which suggests
continuation of the current disposal measures. Producers and processors
will continue to have an important input in establishing priority measures
within the framework of co-responsibility.
- 2 -
3. The 1985/86 milk year
In the Ninth Communication (COH(84) 675 final of 4 December 1984) to the
Council, the estimated revenue available from the 1984/85 milk year was
545 million ECU. The proposed measures for the 1985/86 milk year amounted
to 545 MECU, thus matching the available revenue.
4. The .Commission has stated in the Seventh Communication (COM(83) 33 final of
9 February 1983) that it is imperative “to continue and intensify the
Community's disposal measures within the Community by introducing special
sales of skimmed milk powder into sectors other than for calf feed, if the
development of stocks makes it necessary". Due to increased disposal
measures and a reduction in production, stocks have reached a normal level;
hence those measures can be suspended.
5. Stocks of skimmed milk powder in public1 storage fell to 391 000 tonnes in
July 1985 and now stand at 493 462 tonnes (10 October 1985). Public and
private stocks of butter have again surpassed 1 million tonnes, as
indicated below: *
Intervention stocks
J- Skimmed milk butter :
Date powder public private :
(tonnes) (tonnes) (tonnes) :
: 11 Oct. 1984 885 630 1 031 683 214 957 :
: 10 Oct. 1985 493 462 980 319 217 613 :
Under the schemes of aid for the disposal of skimmed milk powder from
public storage for pig and poultry feed (Regulation 368/77 and 443/77)
451 000 tonnes were sold in the calendar year 1983 and 563 000 tonnes in
1984 and a further 258 422 tonnes were sold from 1st January to
31 July 1985. The average selling price was between 20 - 28 ECU/100 kg,
compared with the intervention price of 174,04 ECU/100 kg. An additional
83 704 tonnes of fresh skimmed milk powder were subsidised under Regulation
1844/77 from June 1983 When the scheme was reintroduced to July 1984. The
level of aid ranged from 115 - 131 ECU/100 kg. This scheme has not been
applied since July 1984.
Additional sales of butter are also being encouraged through special
disposal schemes at reduced prices. These include reduced-price sales to
the patisserie and ice-cream industries. In 1983 sales of butter for
patisseries under Regulation (EEC) No 1932/81 (market butter) and
Regulation (EEC) No 262/79 (intervention butter) totalled 135 250 tonnes
and 152 500 tonnes in 1984. Additional 132 000 tonnes have been sold up to
the end of June 1985. Butter sales to the bakery industry have been
encouraging under this scheme. The uptake has been slower for the
ice-cream industry where sales totalled 47 000 tonnes in 1983 and 34 000
tonnes in 1984. The uptake for 1985 up to June was 33 765 tonnes. In
1984, the levels of aid under Regulation (EEC) No 1932/81 were
190 ECU/100 kg and 105 ECU/100 kg for the bakery and ice-cream industries
respectively, in June 1985 these aid levels were fixed at
178.50 ECU/100 kg and 118.50 ECU/100 kg respectively.
Other measures operate for the sale of butterfat at reduced prices, for
example, sales to the armed forces, social security recipients and
non-profit making organizations, but these schemes are not financed from
co-responsibility.
Thus, the present level of butter stocks makes it necessary to continue the
special disposal schemes for butterfat. Slightly higher quantities are
estimated to be sold in 1985 and a lower level of aid for butter resulting
from the second re-alignment of intervention prices at the beginning of the
1985/86 milk year.
6. The programme of expenditure for the 1986/87 milk year
(i) Sales promotion and publicity within the Community
There is widespread support among producers and processors for
sales promotion in order to maximise in particular human
consumption of dairy products. To finance the continuation of
these measures in the 1986/87 milk year and cognisant of the
overall budget situation in the dairy sector, it is proposed that
25 million ECU should be allocated. It should be recognised that
Spain participates from the new milk year on.
Of the sum of 25 million ECU at least 25 % should be used for
promotion of butter.*) The Council decided to reduce the price of
butter in 1985 again and every effort should be made to maximise
from this reduction.
(ii) Measures for launching the concentrated butter scheme
It is proposed to allocate a sum of 5 MECU to help launch the
revised scheme for cooking butter throughout the Community.
(ili) Research within the EEC
In the light of experience it is deemed appropriate to reinstate
these measures for research work within the Community in respect of
milk and milk products. Accordingly it is proposed to allocate the
sum of 10 million ECU.
*) xhe representatives of the producers and processors regret that, in view of
the Council decisions, the Commission has proposed an allocation amounting
to only 25 million ECU for promotional measures within the Community. This
amounts to a nominal reduction of 28,6 % compared with the funds allocated
in the preceding communication. This reduction is further accentuated by
the fact that Spain is participating in this programme. In real terms the
reduction will therefore be around 35 % in the various Member States-.
The representatives of the producers and processors are convinced that the
maintenance of internal consumption of milk and milk products calls for a
constant effort as regards promotion and publicity, and assess that the
reduction of funds allocated in thé programme to promotion and publicity
reduce the effectiveness of these measures.
-, 4 -
Civ) Improvement of Milk Quality
It is proposed to allocate a further 5 MECU for the improvement of
milk quality for the 1986/87 milk year to be applied on the same
basis as under Regulation (EEC) N° 283/84. It is agreed that this
measure will terminate the milk quality programme.
(v) School milk
By the 1986/87 milk year, the full impact of the new school milk
scheme should be evident and milk deliveries to schools are
estimated to be ever 300 000 tonnes. At a level of aid of
34.80 BCU/100 kg whale milk the total cost would be 105 million
ECU. As in certain Member States semi-skimmed milk is distributed
to schools, the financial contribution of 75 % from
co-responsibility levy funds requrires that 75 MECU should he
allocated for this measure.
(vi) Butterfat for ice-cream
The estimated quantity to be used in the 1986/87 milk year will
increase to 63 000 tonnes. It is proposed that 50 million ECU be
allocated for this measure.
(vii) Butterfat for pastry and bakery products
In 1984, sales of butter for patisseries under Regulations (EEC)
Nos 1932/81 and 262/79 totalled 152 500 tonnes. Since June 1985
the level of aid is 178,50 ECU/100 kg. It is proposed to finance
half of the aid on an additional quantity of 135 000 tonnes from
levy funds. A sum of 125 MECU should therefore be allocated for
this.
(viii) Concentrated butter
The amount of intervention butter to be sold for processing to
concentrated butter for cooking is estimated at 40 000 tonnes in
the first'year. The total cost will be about 90 million ECU, of
which, two-thirds are to be financed from levy funds. A sum of
60 million ECU should therefore be allocated for this purpose.
(ix) Other destocking measures
The annual cost of these measures is estimated at more than
650 million ECU of Which 140 million ECU should come from levy
funds.
(x) Reserve
It is proposed to hold, 15 MECU in reserve to be allocated to
specific programmes if developments in the markets require
additional funds or for other needs which may become apparent
during the period of the programme.
- 5 -
7. The programme of specific measures proposed for the 1986/87 milk year,
therefore, is as follows:
Proposed measures and allocations for the 1986/87 milk year
M e a s u r e s Allocations
million ECU
1. Promotional measures within the Community
2. Measures for launching the concentrated
butter scheme 7
3. Research measures within the Community
4. Improvement of Milk Quality
5. School milk
6. Butterfat for ice-cream
7. Butterfat for pastry and bakery products
8. Concentrated butter
9. Other butter destocking measures
10. Reserve
25.0
5.0
10.0
5.0
75.0
50.0
125.0
60.0
140.0
15.0
T O T A L 510.0
This programme should be compared with the revenue available from the
1985/86 milk year of 510 million ECU.
8. The implementation of the proposals contained in this communication will
depend on both the evolution of the market and the budget situation and
outlook.
Annex I
of the Ni Ik and M U k Products Advisory Committee
(given at its meeting of 26 November 1985)
1
The Committee approves the text of the Communication in its entirety and makes
th# foilowing comments :
1) The agricultural producers
to paragraph 6 Ci) reads as follows ;
"The representatives of the producers and processors, in the conviction
that the maintenance of internal consumption for milk and milk products
requires a continuous effort in the fields of promotion and publicity,
are of the opinion that a maintenance of funds allocated to the promo
tion and publicity programme at a level comparable to that of the previous
communication would have permitted these measures to be more efficient".
2) The Retail Trade CUNECOLAIT) considers that the 5 mi IE on ECU allocated for
launching the concentrated butter scheme are insufficient.
3) The Consumers’ representatives, present at the meeting, asked to be disasso
ciated from the opinion as they had hot been consulted a priori.
ANNEX II
R>v»iu» from tha co-rasponslblIItv law on milk and allocation
of broc— d» «mono various schamas
m ECU
Maasura
1977
(from)
16.9
1978
' /
1979 I960 1981 1982 1983 1984 16.9.77
to
31.12.84
A. Ravanua from co-
rasponslbl IIty lavy
24 136,1 94,2 222,9 478,5 537,3 527,4 699,7 2.740,2
B. Total axpandltura
a) achool mlIk
(R/1080/77)
b) buttar.for tha
manufactura of
Ica-craam
(R/232/75,
R/262/79, R/1932/81)
c) butter for paltry
manufactura
(R/262/79,
R/1932/81, R/442/84)
■ 4) concantratad
buttar for dlr.
coniumptlon
(R/349/73, R/649/78)
a) promotion,
advartlslng and
markat rasaarch
1» tba Community
(R/723/78)
f) markat raaaarck
autilda tka
Cammunlty
(R/l»V78fR/l024/78)
fl) Improvamant of
tka quai Ity of
ml Ik (R/1271/78)
h) disposai for
p|g and poultry
food
(R. 368/77,
443/77, 1844/77)
i) financing of
priority measures
7,5
7.3
53.4
10,3
2)
28.5
110,3
3 0 ,-
2)
23,8
109,4
45,7
24,-
2)
3,6 5,1
37,4
2)
26,6
15,5
2)
8,-
117,1
41,4
24,4
7,3
35,2
8,8
197,7
49,1
22 ,6
335,1
59,8
30,9
550,6
88,3
28,4
3,7
125,7
5,4 : 7,4
6,3
5,2
18,6
I
2)
168,4
U,7
237,5
2): 2)
16,6-.102,7
1.4SI,I
324,6
190,1
125,7
39,-
)
)
)
)
) ·
)
) 387,6
)
)
)
>
>
)
)
494,1
* * · ■ ï 2) î S
U 16,1i 113,5 i 361,4 |339,6 i 193,2 i 149,1 ; 1.259,1
(I) Exeludlnfl appropriations carrlad ovar from ona yaar to tka naxt.
TZT~~~Tevr~
Source: COM (85) 492 fin. (supplemented)
Full & Egal Universal Law Academy