Communication from Mrs Fischer Boel to the Commission
regarding the determination of surplus quantities OF OTHER AGRICULTURAL PRODUCTS THAN SUGAR in the NMS
In the context of the accession of the 10 New Member States (NMS) on 1May2004, legislation has been adopted in line with previous accessions to take account of possible stock-piling affecting negatively not only the workings of the common market organisations under the CAP but also the EU budget. This legislation has been laid down in the Treaty of Accession as well as in subsequent Commission implementing legislation. This communication addresses the determination of surplus stocks of agricultural products other than sugar. Given the particular instruments to manage the sugar market, excess stocks of sugar have been fixed earlier [1]
I. The legal framework
Annex 4, Chapter 4, paragraph 2 of the Treaty of Accession stipulates that “any stock of product, private as well as public, in free circulation at the date of accession within the territory of the New Member States exceeding the quantity which could be regarded as constituting a normal carry over of stock must be eliminated at the expense of the New Member States.
The concept of normal carry-over shall be defined for each product on the basis of the criteria and objectives specific to each common market organisation.”
In order to implement this legal base in the Act of Accession the Commission has taken preventive action in order to avoid surplus stocks being built up. For this purpose Regulation (EC) No 1972/2003[2] was adopted indicating a list of products regarded as sensitive in the different NMS. A levy equal to the erga omnes import duty for the products concerned should be applied on holders of surplus stock at 1May 2004.
II. Determination of surplus stocks other than sugar at the level of NMS
In line with the sugar methodology surplus stocks have been established by comparing the stock situation at the end of the last year before accession (1May2003 to 31April2004) with the same period during the previous 3 years.
For this purpose
– the variation of production
– the variation of imports
– the variation of exports
were taken as a basis taking into consideration possible trends. The Treaty of accession obliges to examine all agricultural products, not only the products that in the first instance were regarded by the Commission as sensitive (see point I).
In addition to this purely mathematical approach, the result of this calculation has been adjusted to take into consideration that some categories of products – such as butter and butter-oil, different qualities and types of rice, hops, seeds, wine, alcohol, tobacco and cereals – were interchangeable and could be considered as single groups. As a result, under each of these groups, negative surplus stocks and positive surplus stocks of the products belonging to the same group have been added up.
As regards the data used, the basic principle was to use official monthly Eurostat data. Where these data were not available or incomplete a best estimate method has been applied using calendar year Eurostat data or other sources of information. All data have been established in close contact with NMS.
A threshold should be introduced in order to cover situations where the resulting amounts of surplus stocks are relatively small compared to what could be regarded as a normal carry-over stock. This covers the margin of error of the statistical information gathered in the particular circumstances of the pre-accession period and the complexity and scope of this exercise. No charge should be payable by a New Member State on the amount of surplus stock of a particular product, as calculated, if this amount is no more than 10% of what could be regarded as a normal carry-over stock for that product in the new Member State concerned.
During the process other arguments as regards the methodology to determine surplus stocks have been examined on the request of NMS. The result of the mathematical calculation has been adapted on the basis of the assessment of arguments specific to the NMS. The result of this examination is indicated in annex I.
III. Elimination costs
The basic principle to calculate the amount to be charged to the NMS is based on the disposal costs of surplus stocks in the different sectors. A good indication of such costs is the difference between the internal and external price level, reflected by the average export refund during the first year after accession.
In the absence of export refunds in cases where important stocks have been established such as preserved mushrooms, garlic, fruit juices, it seems appropriate to take as a basis the price differences between the average internal and external prices. This difference is equivalent to an export refund amount.
The elimination cost to be charged to the NMS is calculated by multiplying the surplus stock with the (equivalent) export refund.
IV. Result
Application of the methodology set out in points I and II gives the following result:
Product Group / CZ 1000 EUR / EE 1000 EUR / CY 1000 EUR / LV 1000 EUR / LI 1000 EUR / MT 1000 EUR / PL 1000 EUR / SL 1000 EUR / SK 1000 EURMeat (*) / 6 221 / 0 / 0 / 7 773 / 0 / 980
Milk (**) / 0 / 7 523 / 2 971 / 288 / 752
Fruits (***) / 4 944 / 0 / 180 / 2 229 / 375 / 3 049
Rice / 1 123 / 5 / 115 / 30 / 1 225 / 18 / 585
Wine / 42 / 204 / 473
TOTAL: / 12 288 / 7 570 / 115 / 204 / 3 182 / 288 / 12 451 / 393 / 4 614
(*) 4 sub-groups: Beef Veal, Pigmeat, Sheep Goat, Poultry
(**) 4 sub-groups: Cheeses, SMP, WMP, Butter ButterOil
(***) 9 sub-groups: Mushrooms, Mandarins, Pineapples, Orange Juice, Pineapple Juice, Apple
Juice, Tomatoes, Garlic, Grape Juice
For more details see annex II.
The amounts charged on the new Member States shall be paid to the Community budget. In view of the potentially important financial consequences that a new Member State may face, the period for the payment of these amounts may be extended over four years.
V. Procedure
The college is invited:
– to approve the present communication;
– to present at the earliest opportunity to the Management Committee for Trade Mechanisms a draft Commission decision determining the surplus stocks in the New Member States and the amounts to be charged;
– to adopt the draft decision in the absence of a negative opinion of the aforementioned Committee by accelerated written procedure.
ANNEXES
Annex I: Methodology to determine surplus stocks, arguments advanced by NMS
Annex II: Statistical data and charge to be applied.
Annex III: Draft decision
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[1] As regards quantities: Reg. (EC) No 832/2005 of 31.5.2005 (OJ L 138 of 1.6.2005)
As regards amounts: Decision 2006/776/EC of 13.11.2006 (OJ L 314 of 15.11.2006)
[2] OJ L 293, 11.11.2003, p. 3, amended by Commission Regulations (EC) No 230/2004 of 10.02.2004 (O.J. L 39 of 11.02.2004, p. 13) and (EC) No 735/2004 of 20.04.2004 (O.J. L 114 of "1.04.2004, p.13)".