Explanatory Memorandum to COM(2018)533 - Amendment of Regulation (EU) No 1370/2013 determining measures on fixing certain aids and refunds as regards the quantitative limitation for buying-in skimmed milk powder

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dossier COM(2018)533 - Amendment of Regulation (EU) No 1370/2013 determining measures on fixing certain aids and refunds as regards the ...
source COM(2018)533 EN
date 16-07-2018


1. CONTEXT OF THE PROPOSAL

• Reasons for and objectives of the proposal

Council Regulation 1370/2013 sets a ceiling of 109 000 t under which skimmed milk powder has to be bought in at fixed price (169.8 €/100 kg) during the public intervention period (1 March to 30 September). Once that ceiling is reached, public intervention continues but under a tendering procedure until the end of the intervention period.

That ceiling was set at zero in 2018 to avoid public intervention for skimmed powder at fixed price taking place with no market justification (e.g. while both butter prices and farm gate milk prices were at reasonably high levels), in the light of the long standing disconnection between dairy fat and protein prices.

Public intervention is therefore operated in 2018 through a tendering procedure. The Commission, with a vote at the Committee for the Common Organisation of the Agricultural Markets, decides on a case by case basis what volumes should be bought in and at what buying-in price.

In 2018, EU market prices for skimmed milk powder have remained on average some 19% below the public intervention level, and butter prices 117% above public intervention level. The fat-protein price gap is wider than ever. The ratio butter/SMP price in 2017-2018 has tripled from the levels between 2007 and 2016. At the same time raw milk prices paid to farmers have been above 34 c/kg in average (higher than the last 5-year average)

The procedure in place has allowed avoiding unjustified buying-in of 109 000 tonnes of skimmed milk powder (which would have piled up above existing stocks).

As market conditions have not substantially changed and the experience gained in 2018 proves the correctness of the approach, it is appropriate repeating the initiative and setting to zero the ceiling in 2019.

In order to allow market operators to be informed in due time before the start of the next intervention campaign, this Regulation should enter into force on the day following that of its publication.

• Consistency with existing policy provisions in the policy area

This proposal is consistent with the spirit of the common organisation of the markets in agricultural products, aiming at stabilising markets and ensuring a fair standard of living for the agricultural community.

The proposal is consistent with Article 43 i of the TFEU by which the Council, on a proposal from the Commission, shall adopt measures on fixing prices, levies, aid and quantitative limitations and on the fixing and allocation of fishing opportunities.

• Consistency with other Union policies

N/A.

2. LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY

• Legal basis

Article 43 i of the Treaty on the Functioning of the European Union.

• Subsidiarity (for non-exclusive competence)

The proposal falls under shared competence between the EU and the Member States and complies with the subsidiarity principle.

• Proportionality

The proposal complies with the proportionality principle.

• Choice of the instrument

N/A.

3. RESULTS OF EX-POST EVALUATIONS, STAKEHOLDER CONSULTATIONS AND IMPACT ASSESSMENTS

• Ex-post evaluations/fitness checks of existing legislation

N/A.

• Stakeholder consultations

N/A.

• Collection and use of expertise

N/A.

• Impact assessment

N/A.

• Regulatory fitness and simplification

N/A.

• Fundamental rights

N/A.

4. BUDGETARY IMPLICATIONS

The financial impact depends on the quantities/prices of skimmed milk powder (SMP) offered and the quantities/prices accepted, between March and September 2019, which depends on the evolution of the SMP market.

5. OTHER ELEMENTS

• Implementation plans and monitoring, evaluation and reporting arrangements

N/A.

• Explanatory documents (for directives)

N/A.

• Detailed explanation of the specific provisions of the proposal

N/A.