Explanatory Memorandum to COM(2007)58-1 - Amendment of Directive 2001/114/EC relating to certain partly or wholly dehydrated preserved milk for human consumption - Main contents
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| dossier | COM(2007)58-1 - Amendment of Directive 2001/114/EC relating to certain partly or wholly dehydrated preserved milk for human consumption. |
|---|---|
| source | COM(2007)58  |
| date | 15-02-2007 |
This package of proposals contains amendments of:
- Council Directive 2001/114/EC relating to certain partly or wholly dehydrated preserved milk for human consumption,
- Council Regulation (EC) No 1255/1999 on the common organisation of the market in milk and milk products and
- Council Regulation (EC) No 2597/97 laying down additional rules on the common organisation of the market in milk and milk products for drinking milk.
The proposed amendments will in particular provide simplification of a number of rules in the dairy sector to the benefit of all stakeholders.
Contents
- II. COUNCIL DIRECTIVE 2001/114/EC
- III. COUNCIL REGULATION (EC) NO 1255/1999
- b) Removal of intervention trigger for butter
- c) Abolition of national quality class for bu t ter
- d) Removal of certain aids for private storage
- e) Removal of disposal aid for military forces
- f) Introduction of a single rate of aid for school milk
- g) Compulsory use of import licence to be abandoned
- IV. COUNCIL REGULATION (EC) NO 2597/97
- V. FINANCIAL CONSEQUENCES
The Community dairy industry and exporters of milk powders and condensed milk have for a long time requested a modification of the Community rules on protein contents in such products. Currently, the natural content of milk protein in the collected milk should be maintained in preserved milk. The adjustment of the protein content to a standard level is not allowed.
However, since 1999 the Codex Alimentarius Committee has allowed such protein standardisation in the international standard for dry milk set by the Committee.
As a consequence, competitors from outside the Community, producing according to those standards, are enjoying an economical advantage vis-à-vis the Community producers. The attached proposals aim to modify that situation by allowing the standardisation of the protein content in the Community in line with the Codex standards (minimum content of 34%, expressed in fat free dry matter).
With a natural protein content in milk powder ranging from 31% to 37% a standardisation to 34% is likely to lead to substantial quantities of proteins being released on the Community market. On the basis of the foreseeable market for dairy proteins which is driven by a strong demand it is, however, not expected that increased availabilities would lead to any major additional costs for the Community, if any at all, in terms of intervention, export refunds of disposal aids. The overall higher commercial value of proteins together with improved competitive strength on the world market may even provide a higher milk price where the commercial benefits are passed on to the milk producers.
The intervention price for skimmed milk powder (SMP) is currently based on a protein content of 35.6%. With a Community standardisation to 34% the intervention standard should logically be aligned to that level with the consequent adaptations of the intervention price (see under III(a)).
a) Reduction of intervention price for SMP
The adaptation of the intervention price for SMP as referred to above is strictly mathematical and follow the current rules of price reduction where the SMP is having a protein content lower than the intervention standard of 35.6%. A reduction of 1.75% is applied for each percentage point lower than the standard.
The new intervention standard of 34% would therefore lead to a new intervention price which is 2.8% (1.6% x 1.75) lower than the current one. Furthermore, due to the new possibility of standardising SMP it is appropriate only to allow into intervention the standard SMP containing 34% of protein. Article 7 should therefore be amended accordingly.
The current rules for butter intervention provide that from 1 March to 31 August intervention is open in a Member State where the average market price falls to or is below 92% of the intervention price in two consecutive weeks. Suspension of buying-in is decided for a Member State where the average butter price is equal to or higher than 92% for two consecutive weeks. The actual fixed buying-in price is 90% of the intervention price. This system is administratively cumbersome for Member States and the Commission and has lost its practical value.
Without diluting the value of the intervention system the provisions should therefore be simplified by eliminating the 92% trigger mechanism. Intervention agencies may simply buy butter at 90% of the intervention price from 1 March and until the overall Community ceiling has been reached. The Commission can thereafter either suspend intervention buying or let it continue via a tendering system, as the rules already provide. Article 6 i should be amended accordingly.
Reference to the 'national quality class' was introduced in the Community legislation at a time when there was no Community standards for butter.
In 1995 common quality requirements for butter intervention were introduced. Those requirements were found both to be very strict and cumbersome to verify and consequently reference to national classes continued for butter under the various aid schemes. However, with now 25/27 national classes there is obviously a risk of different qualities and control systems linked to the granting of aids. It is therefore proposed to replace that national class as butter quality criterion by the Community requirements for butter exported with refunds. Those requirements are not only '"lighter" than the intervention requirements but they are also easy to control. Article 6 i and i should be amended accordingly.
As aid for private storage of cream or SMP has not in practice been used in the past by operators as support for the dairy market the two measures can be considered obsolete and should be removed from the basic dairy Regulation.
Equally, the possibility to grant an aid for butter purchased by military forces (Article 13(1)(b)) is obsolete and should be removed from the Regulation.
Article 14 provides for Community aid to be granted under the school milk system. Although the regime undoubtedly has both a great nutritional and promotional value the implementation of it is felt by Member States to be complicated and cumbersome. With a view to simplify the system it is proposed to have only one rate of aid, irrespective of the sort of milk delivered to the pupils. The single rate of aid should be established on the basis of past up-take of the various milk qualities under the school milk regime. For other eligible dairy products the amounts of aid should be determined in the light of that simplification.
Article 26 provides for the obligatory use of an import licence for all imports of Article 1-products. However, with regard to import quotas the Commission's DG TAXUD has for some time been monitoring the import of various agricultural products via the 'first-come/first-served'-system. The system is built on a daily follow up of imported quantities with the help of a reliable computer network with Member States.
As information source for the stakeholders the DG TAXUD monitoring system provides more accurate, updated and transparent information than the current licensing system would do. On that background it is proposed, where import quotas are or will be monitored by DG TAXUD, to exempt operators from presenting an import licence.
This Regulation currently provides that only three categories of drinking milk may be produced and marketed in the Community:
- skimmed milk (0.5% fat or less),
- semi-skimmed milk (between 1.5% and 1.8% fat)
- whole milk (3.5% fat or more).
However, a large number of derogations from the above have been accepted in the past in connection with the various accession treaties. All of those derogations expire in 2009, except for Estonia where the derogation expires in April 2007. Estonia has formally requested a prolongation of its derogation and with a view to provide equal treatment it is proposed in a separate proposal to meet that request by providing for a prolongation until 2009.
Furthermore, for many years there has been a clear and steady tendency in the Community towards consumption of dairy products with less milk fat, in particular with regard to drinking milk.
In order to respond to those changes in nutritional habits as well as to comply with the general objective of encouraging the production of such agricultural products which is demanded by the market it is proposed to liberate the drinking milk market by allowing production and marketing in the Community of milk with fat contents outside the three abovementioned categories, provided that clear and readable information on the fat content is provided on the label.
Such liberalisation would make some of the abovementioned derogations redundant while providing for increased transparency and trade among Member States.
Standardisation of preserved milk together with a reduction in the intervention price for SMP of 2.8% is likely to lead to a minor increase of SMP production while the bulk of the supplementary quantity of proteins obtained through standardisation will be absorbed by increased production of cheese and fresh dairy products. In turn, that increase would generate a higher fat use in those products and a correspondingly lower butter production and butter export. Overall, therefore, the standardisation would lead to budgetary savings.
The proposed amendments of the basic regulation (Regulation (EC) No 1255/1999), with the exception of the SMP intervention price, are of technical/obsolete nature and will not lead to any saving or new expenditures for the budget. The implementation of the single rate of aid for school milk does not change the total financial envelope for the scheme.
Finally, it is estimated that the liberation of the drinking milk regulation (Regulation (EC) No 2597/97) will not lead to a change in the speed of the shift towards consumption of lower fat drinking milk. Since the trend in the average fat content is not assumed to change, there will be no budgetary impact compared with the current legislation.