PURPOSE: to share the cost of exceptional market support measures in the case of epizootic outbreaks between the Commission and the Member States.

LEGISLATIVE ACT: Council Regulation 1913/2005 amending Regulation 2759/75, 2771/75, 1254/1999, 1255/1999 and 2529/2001 as regards exceptional market support measures.

CONTENT: The Council adopted this Regulation with a qualified majority. The Danish and Portuguese delegation voted against the Regulation. The Polish and Greek delegations abstained.

This Regulation introduces a system of co-financing under the Common Agricultural Policy (CAP). Specifically, the co-financing between the Community and the Member States will apply in cases where restrictive market measures need to be introduced in order to prevent the spread of animal diseases. The Regulation applies to pig meat, eggs, poultry meat, beef and veal, milk and milk products, sheep meat and goat meat. Under the terms of the Regulation, the Community will provide part-financing equivalent to 50% of the expenditure borne by the Member States. In cases of foot and mouth, the Community will provide 60% of the expenditure. Member States must ensure that, where producers contribute to the expenditure borne by the Member States that it does not result in a distortion of competition with producers from other EU Member States.

ENTRY INTO FORCE: 02 December 2005.

The European Parliament adopted the resolution drafted by Niels BUSK (ALDE, DK) inserting new clauses into the proposal. (Please see the summary of 13/09/2005.)

The European Parliament adopted the resolution drafted by Niels BUSK (ALDE, DK) inserting new clauses into the proposal. (Please see the summary of 13/09/2005.)

The committee adopted the second report by Niels BUSK (ALDE, DK) amending the proposal under the consultation procedure. The first report (see summary dated 26/04/2005), recommending that the proposal be rejected, was referred back to committee for further consideration following the plenary sitting in Strasbourg of 10 May 2005.

In the second report, the committee inserted new clauses stipulating that Member States must ensure that, where producers contribute to the expenditure borne by Member States under the co-financing arrangements, this does not result in distortion of competition by producers in different Member States. The Commission must monitor whether any such distortion of competition is occurring and take any appropriate action. It must also report to Parliament and Council every 6 months.

The committee also adopted a number of amendments setting the Community's contribution under the co-financing arrangements at a higher level than the 50% proposed by the Commission. It proposed that the Community contribution be set at 75% for the pigmeat, eggs, poultrymeat, sheepmeat and goatmeat and milk and milk products sectors and 60% for the beef and veal sector.

The committee adopted the report by Niels BUSK (ALDE, DK) recommending that Parliament reject the Commission proposal (consultation procedure) and calling for a new proposal to be submitted.

PURPOSE : to share the cost of exceptional market support measures in the case of epizootic outbreaks between the Commission and the Member States.

PROPOSED ACT : Council Regulation.

CONTENT : when serious and/or contagious outbreaks of animal diseases occur, such as Foot and Mouth Disease or Classical Swine Fever, the EU has in place exceptional market support measures to support those farmers affected by the restrictions imposed on them. A number of basic Regulations exist providing for legal measures. Those Regulations refer to pig meat, eggs, poultry meat, beef and veal, milk and milk products and sheep meat and goat meat. Detailed guidelines on the financing of these exceptional measures remains vague. In the 1980's and early 1990's 100% of the expenditure for the measures was financed by the FEOGA. In 1994 the Commission prepared provisions regarding the co-financing of the expenditure. At the time co-financing for measures in the pig meat sector was set at 70% for the Community budget and 30% for the national budget. Later, the same rate was used for measures in the beef sector due to BSE and Food and Mouth Disease. A 2001 ECJ court case, however, lodged by the Member States ruled that only a 100% financing by the Community budget would be allowable. The ruling applies to all market organisations for animal products given that most of the articles in the different market organisations are more or less the same.

The Commission is now proposing, through this Regulation, a system of co-financing. This would allow the Member States to share responsibility for the application of exceptional market measures as well as gibing them an incentive to do their best to stamp out the disease as quickly as possible. In line with this policy the Commission proposes to amend the corresponding articles in the different Council Regulations by introducing clear legal provisions for such a system. The proposed co-financing would be based on a 50% share of the total amount split between the Community and the Member States.

FIANCIAL IMPLICATIONS:

- Budget lines and headings: 05 03 Animal products (in particular lines 05030199, 05030209, 05030399, 05030403 and 05030408).

- Appropriations budget 2004: EUR 239 million. It should be noted that the cost of the measure cannot be estimated, since it will depend on the importance of any outbreaks which may occur.

PURPOSE : to share the cost of exceptional market support measures in the case of epizootic outbreaks between the Commission and the Member States.

PROPOSED ACT : Council Regulation.

CONTENT : when serious and/or contagious outbreaks of animal diseases occur, such as Foot and Mouth Disease or Classical Swine Fever, the EU has in place exceptional market support measures to support those farmers affected by the restrictions imposed on them. A number of basic Regulations exist providing for legal measures. Those Regulations refer to pig meat, eggs, poultry meat, beef and veal, milk and milk products and sheep meat and goat meat. Detailed guidelines on the financing of these exceptional measures remains vague. In the 1980's and early 1990's 100% of the expenditure for the measures was financed by the FEOGA. In 1994 the Commission prepared provisions regarding the co-financing of the expenditure. At the time co-financing for measures in the pig meat sector was set at 70% for the Community budget and 30% for the national budget. Later, the same rate was used for measures in the beef sector due to BSE and Food and Mouth Disease. A 2001 ECJ court case, however, lodged by the Member States ruled that only a 100% financing by the Community budget would be allowable. The ruling applies to all market organisations for animal products given that most of the articles in the different market organisations are more or less the same.

The Commission is now proposing, through this Regulation, a system of co-financing. This would allow the Member States to share responsibility for the application of exceptional market measures as well as gibing them an incentive to do their best to stamp out the disease as quickly as possible. In line with this policy the Commission proposes to amend the corresponding articles in the different Council Regulations by introducing clear legal provisions for such a system. The proposed co-financing would be based on a 50% share of the total amount split between the Community and the Member States.

FIANCIAL IMPLICATIONS:

- Budget lines and headings: 05 03 Animal products (in particular lines 05030199, 05030209, 05030399, 05030403 and 05030408).

- Appropriations budget 2004: EUR 239 million. It should be noted that the cost of the measure cannot be estimated, since it will depend on the importance of any outbreaks which may occur.