Committee Reports > List of Committees > Joint > 1976 > Committee on the Secondary Legislation of the European Communities > Report No. 45 - Milk Sector

APPENDIX

Proposal for a Council Regulation introducing a system of non-marketing subsidies for milk and milk products and for the conversion of dairy cow herds [R/1742/76].

1. Background

The proposal which is aimed at discouraging the production and marketing of milk because of the existing and increasing milk surplus in the Community, would provide for the introduction of a subsidy premium system for (a) non-marketing of milk and milk products and (b) the conversion of dairy cow herds,i.e. a switch from milk to beef production or sheep rearing.

2. Non-marketing premium

Under the proposal a producer would receive a premium, based on milk (or equivalent milk products) marketed during the year 1975, of 90% of the milk target price at time of application on the first 10,680 gallons (about 10 cow herd) marketed and of 75% of the target price on quantities between 10,680 and 32,000 (30-35 cow herd) gallons. The premium would be conditional on his giving the following written undertakings for a 5 year period:—

(a) to cease the sale of milk and milk products coming from the holding farmed

(b) to sell his dairy equipment within 3 months

(c) not to lease his holding for dairy farming

(d) not to lease his cows or sell them except for slaughter.

50% of the premium would be paid within the first 3 months of the scheme, 25% in the third year and 25% in the fifth year. Special provisions apply in the case of producers who cease farming under the scheme provided for in Directive 72/160.

3. Conversion premium

A producer would receive a premium, based on milk marketed during the year 1975, of 90% of the milk target price at time of application up to a maximum of 32,000 gallons. The same conditions as for the non-delivery premium would apply with the the following two additions:—

(a) that adult beef cattle or sheep would have to be kept on the land-and evidence adduced that by the end of the 3rd year, 90% of the cattle will be of the beefproducing variety

and

(b) the obligation to stop sales of milk, etc., would apply for 4 instead of 5 years.

60% of the premium would be paid within the first 3 months of the scheme, 20% in the 3rd year and 20% in the 4th year.

4. Eligibility

Producers with deliveries less than 10,680 gallons in 1975 would be eligible for the non-delivery premium only. Those with higher deliveries in 1975 would qualify under both schemes. There would be no upper limit but payments would not be made on more than 32,000 gallons except where the producer was participating in a disease eradication programme and then subject to specific limits.

5. Financing

Expenditure incurred by Member States under the scheme shall be eligible for a 50% refund from EAGGF, the balance being paid by the Exchequer.

6. Results

It is observed that the financial Annex to the document estimates that the non-marketing premium will be paid on 500,000 cows throughout the Community in 1977 and on 650,000 cows in 1978 and that the beef conversion payments would be made on 75,000 cows in 1977 and on 40,000 cows in 1978.