THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Community, and in particular Article 37 thereof,

Having regard to the proposal from the Commission ( 1 ),

Having regard to the opinion of the European Parliament ( 2 ),

Having regard to the opinion of the Economic and Social Committee ( 3 ),

Having regard to the opinion of the Committee of the Regions ( 4 ),

Having regard to the opinion of the Court of Auditors ( 5 ),

(1)

Whereas, pursuant to Council Regulation (EEC) No 3950/92 of 28 December 1992, establishing an additional levy in the milk and milk products sector ( 6 ), the additional levy scheme, which had originally been introduced from 2 April 1984 in the said sector, was extended by another seven 12-month periods; whereas the purpose of this scheme was to reduce the imbalance between supply and demand on the milk and milk-products market and the resulting structural surpluses; whereas the scheme remains necessary in the future in order to achieve a better market balance; whereas it should therefore continue to be applied for eight further consecutive 12-month periods starting on 1 April 2000;

(2)

Whereas the level of price support in the dairy sector will be gradually reduced by 15 % in total over three marketing years from 1 July 2005; whereas the effects of this measure on internal consumption and export of milk and milk products justify a well balanced increase in the total reference quantity for milk in the Community following the respective price cuts on the one hand and targeting certain structural problems at an earlier stage on the other;

(3)	Whereas the individual reference quantity should be defined as the quantity available, irrespective of any quantities which may have been transferred temporarily, on 31 March 2000, the expiry date of the seven periods of application of the levy scheme following its prolongation decided in 1992;

(4)

Whereas the underuse of reference quantities by producers can prevent the sector of milk production from developing properly; whereas in order to avoid such practices Member States should have the possibility to decide in accordance with the general principles of Community law that, in cases of substantial underuse over a significant period of time, the unused reference quantities will revert to the national reserve with a view to their reallocation to other producers;

(5)

Whereas in order to strengthen the possibilities for decentralised management of reference quantities for restructuring of milk production or environmental improvement Member States should be given the power to implement certain provisions in that context at the appropriate territorial level or in collection areas;

(6)

Whereas the experience with the additional levy scheme has shown that the transfer of reference quantities through legal constructions such as leases which do not necessarily lead to a permanent allocation of the reference quantities concerned to the transferee, can be an additional cost factor for milk production hampering the improvement of production structures; whereas, in order to strengthen the reference quantities' character as a means of regulating the market of milk and milk products, the Member States should be authorised to allocate reference quantities, which have been transferred through leases or comparable legal means, to the national reserve for re-distribution, on the basis of objective criteria, to active producers in particular to those who have used them before; whereas Member States should also have the right to organise the transfer of reference quantities in a different way than by the means of individual transactions between producers; whereas it should be explicitly provided, in particular with a view to taking account adequately of existing legal rights, that, when using these authorisations, Member States are to take the necessary measures to comply with the general principles of Community law;

(7)	Whereas a certain number of provisions in Regulation (EEC) No 3950/92 have become obsolete and should therefore be deleted,

HAS ADOPTED THIS REGULATION:

1. Article 1, first subparagraph shall be replaced by the following:

‘For eight new consecutive periods of 12 months commencing on 1 April 2000, an additional levy shall be payable by producers of cow's milk on quantities of milk or milk equivalent delivered to a purchaser or sold directly for consumption during the 12-month period in question in excess of a quantity to be determined.’

2. The table in Article 3(2) shall be replaced by the table in Annex I to this Regulation.

3. Article 3(2) shall be replaced by the following:

‘2.  The total quantities set out in the Annex shall be fixed without prejudice to possible review in the light of the general market situation and particular conditions existing in certain Member States.

The overall quantity for the Finnish deliveries quota may be increased to compensate Finnish “SLOM” producers, up to a maximum of 200 000 tonnes, to be allocated in accordance with Community legislation. This reserve must be non-transferable and used exclusively on behalf of producers whose right to take up production again will be affected as a result of accession.

The increase in overall quantities, and the conditions under which the individual reference quantities provided for in the preceding subparagraph shall be granted, shall be decided upon in accordance with the procedure referred to in Article 11.’

4. Article 3(3) shall be deleted.

5. Article 4 shall be replaced by the following:

‘Article 4

1.  The individual reference quantity available on the holding shall be equal to the quantity available on 31 March 2000. It shall be adjusted, where appropriate, for each of the periods concerned, so that the sum of the individual reference quantities of the same type does not exceed the corresponding global quantities referred to in Article 3, taking account of any reductions made for allocation to the national reserve provided for in Article 5.

2.  Individual reference quantities shall be increased or established at the duly justified request of producers to take account of changes affecting their deliveries and/or direct sales. The increase or establishment of such a reference quantity shall be subject to a corresponding reduction or cancellation of the other reference quantity the producer owns. Such adjustments may not lead to an increase in the sum of the deliveries and direct sales referred to in Article 3 for the Member State concerned.

Where the individual reference quantities undergo a definitive change, the quantities referred to in Article 3 shall be adjusted in accordance with the procedure laid down in Article 11.’

6. Article 5 shall be replaced by the following:

‘Article 5

Within the quantities referred to in Article 3, the Member State may replenish the national reserve following an across-the-board reduction in all the individual reference quantities in order to grant additional or specific quantities to producers determined in accordance with objective criteria agreed with the Commission.

Without prejudice to Article 6(1), reference quantities available to producers who have not marketed milk or other milk products for one of the 12-month periods shall be allocated to the national reserve and may be reallocated in accordance with the first subparagraph. Where the producer resumes production of milk or other milk products within a period to be determined by the Member State, he shall be granted a reference quantity in accordance with Article 4(1) no later than 1 April following the date of his application.

Where during at least one 12 months period a producer does not make use, either through deliveries or direct sales, of at least 70 % of the individual reference quantity available to him, Member States may decide in compliance with the general principles of Community law:

7. Article 6(1), first subparagraph shall be replaced by the following:

‘1.  Before a date that they shall determine and by 31 March at the latest, Member States shall authorise, for the 12-month period concerned, temporary transfers of individual reference quantities which producers who are entitled thereto do not intend to use.’

8. Article 7(1) shall be replaced by the following:

‘1.  Reference quantities available on a holding shall be transferred with the holding in the case of sale, lease or transfer by inheritance to the producers taking it over in accordance with detailed rules to be determined by the Member States taking account of the areas used for dairy production or other objective criteria and, where applicable, of any agreement between the parties.

Any part of the reference quantity, which is not transferred with the holding, shall be added to the national reserve. However, if a part reverted to the national reserve on the occasion of a transfer of reference quantities the reduction shall not apply to cases where reference quantities are transferred back.

The same provisions shall apply to other cases of transfers involving comparable legal effects for producers.

However, where land is transferred to public authorities and/or for use in the public interest, or where the transfer is carried out for non-agricultural purposes, Member States shall provide that the measures necessary to protect the legitimate interests of the parties are implemented, and in particular that the departing producer is in a position to continue milk production, if such is his intention.’

9. Article 8 shall be replaced by the following:

‘Article 8

With a view to completing restructuring of milk production or to environmental improvement, Member States may take one or more of the following actions in accordance with detailed rules which they shall lay down taking account of the legitimate interests of the parties:

The rules under (a), (b), (c) and (e) may be implemented at national level or at the appropriate territorial level or in collection areas.’

10. The following shall be inserted after Article 8:

‘Article 8a

Acting in compliance with the general principles of Community law, Member States may take the following measures, with the aim of ensuring that reference quantities are solely attributed to active milk producers:

11. The Annex set out in Annex II to this Regulation is hereby added to Regulation (EEC) No 3950/92.