REPORT on the proposal for a regulation of the European Parliament and of the Council amending Council Regulation (EC) No 1234/2007 as regards contractual relations in the milk and milk products sector

4.7.2011 - (COM(2010)0728 – C7‑0408/2010 – 2010/0362(COD)) - ***I

Committee on Agriculture and Rural Development
Rapporteur: James Nicholson

DRAFT EUROPEAN PARLIAMENT LEGISLATIVE RESOLUTION

on the proposal for a regulation of the European Parliament and of the Council amending Council Regulation (EC) No 1234/2007 as regards contractual relations in the milk and milk products sector

(COM(2010)0728 – C7‑0408/2010 – 2010/0362(COD))

(Ordinary legislative procedure: first reading)

The European Parliament,

–   having regard to the Commission proposal to Parliament and the Council (COM(2010)0728),

–   having regard to Article 294(2), first subparagraph of Article 42 and Article 43(2) of the Treaty on the Functioning of the European Union, pursuant to which the Commission submitted the proposal to Parliament (C7‑0408/2010),

–   having regard to Article 294(3) of the Treaty on the Functioning of the European Union,

–   having regard to the reasoned opinion submitted, within the framework of the Protocol(No 2) on the application of the principles of subsidiarity and proportionality, by the Polish Diet, asserting that the draft legislative act does not comply with the principle of subsidiarity,

–   having regard to the opinion of the European Economic and Social Committee of 4 May 2011[1]

–   having regard to Rule 55 of its Rules of Procedure,

–   having regard to the report of the Committee on Agriculture and Rural Development (A7-0262/2011),

1.  Adopts its position at first reading hereinafter set out;

2.  Calls on the Commission to refer the matter to Parliament again if it intends to amend its proposal substantially or replace it with another text;

3.  Instructs its President to forward its position to the Council, the Commission and the national parliaments.

Amendment  1 Proposal for a regulation Recital 1 a (new)
Text proposed by the Commission	Amendment
	(1a) There are disadvantaged regions that depend heavily on milk production in respect of which it is necessary to assess the guidelines laid down for the milk and milk products sector, as recognised in the Treaties, so that support and the application of these policies continue to be adapted to their specific characteristics.
Amendment  2 Proposal for a regulation – amending act Recital 2
Text proposed by the Commission	Amendment
(2) In 2007-2009, exceptional developments took place in milk and milk products sector markets. Initially, extreme weather conditions in Oceania brought about a significant decline in supplies, leading to a rapid and significant increase in prices. Yet while world supplies had started their recovery, and prices had started to return to more normal levels, the subsequent financial and economic crisis negatively affected EU dairy producers, aggravating price volatility. Initially feed and other input costs including energy increased significantly as a result of higher commodity prices. Subsequently, a drop in worldwide, as well as EU, demand, including for milk and milk products, whilst EU production was stable led to a collapse in EU prices, down to the lower safety net level. This sharp decline in dairy commodity prices failed to fully translate into lower dairy prices at consumer levels, generating a widening in the gross margin of the downstream sectors for most milk and milk sector products and countries, and preventing demand for them to adjust to low commodity prices, slowing down price recovery and exacerbating the impact of low prices on milk producers.	(2) In the period from 2007 to 2009 , events occured that had an unprecedented impact on the activity of the milk and milk products sector, causing extreme price volatility and ultimately resulting in a price crash in 2009 which forced many dairy farmers in Europe out of business and put the viability of many other dairy producers at serious risk.
Amendment  3 Proposal for a regulation – amending act Recital 2 a (new)
Text proposed by the Commission	Amendment
	(2a) In addition to the dairy sector, other sectors have faced difficult market  conditions,  notably the olive oil and table olives'  sector, in which ,  over the last three years , price volatility has been without precedent in its intensity and duration. To ensure the rational development of production and to guarantee a fair standard of living  for producers of olive oil, it is necessary in the near future, to strengthen their contractual relations and to ensure a more equitable distribution of added value along the supply chain through greater functional efficiency and by strengthening the role of producer organizations as provided by Regulation 1234/2007. In this regard, the European  Commission should  include, in its future legislative proposals, measures to prevent crises in the sector, using as a model the three-year operating programs already included in the existing  Regulation 1234/2007, which would enhance the scope for producer organisations to plan production, increase market value and prevent and manage crises.
Amendment  4 Proposal for a regulation – amending act Recital 2 b (new)
Text proposed by the Commission	Amendment
	(2 b) These exceptional developments have further highlighted the essential role played by producers benefiting from protected designation of origin (PDO) or protected geographical indication (PGI) classification, especially as regards creating added value for producers and the economic good health of rural regions, particularly the most vulnerable ones. To recognise, preserve and develop that role there is a need to authorise, for such quality products, in conjunction with the guidelines set out in Article 184(6) of Regulation (EC) No 1234/2007, as amended by Regulation (EC) No 72/2009, the implementation of instruments to regulate supply, thus enabling their producers to make an important contribution to the stability and competitiveness of the European dairy sector.
Amendment  5 Proposal for a regulation – amending act Recital 3
Text proposed by the Commission	Amendment
(3) In October 2009, in light of this difficult market situation for milk, a High Level Expert Group on Milk ("HLG") was set up with the purpose of discussing mid-term and long-term arrangements for the milk and milk products sector, given the expiry of dairy quotas in 2015. While respecting the outcome of the Health Check, the HLG was to work on a regulatory framework to be put in place, to contribute to stabilising the market and producers' income and enhance its transparency.	(3) In response to this difficult market situation for milk, a High Level Expert Group on Milk ("HLG") was set up, in October 2009, with the purpose of discussing mid- and long-term arrangements for the milk and milk products sector which, in the context of the expiration of dairy quotas in 2015, (a decision that remains to be assessed by the 2012 report as provided for as part of the Health Check) would contribute to stabilising the market and producers' income and of enhancing transparency in the sector.
Amendment  6 Proposal for a regulation – amending act Recital 4
Text proposed by the Commission	Amendment
(4) The HLG obtained oral and written input from major European stakeholder groups in the dairy supply chain representing farmers, dairy processors, dairy traders, retailers and consumers. Further, the HLG received contributions from invited academic experts, third country representatives, National Competition Authorities and the Commission's services. A dairy stakeholder conference was also held on 26 March 2010 allowing a wider range of actors in the supply chain to express their views. The HLG delivered its report on 15 June 2010, which contained an analysis of the current situation of the dairy sector and number of recommendations.	(4) The HLG obtained oral and written input from major European stakeholder groups in the dairy supply chain and delivered its report on 15 June 2010. The report contained an analysis of the current situation of the dairy sector and a number of recommendations which focused on contractual relations, the bargaining power of producers, interprofessional /interbranch organisations, transparency, market measures and futures, marketing standards and origin labelling and innovation and research, whilst omitting to make any reference to distribution.
Amendment  7 Proposal for a regulation – amending act Recital 5
Text proposed by the Commission	Amendment
(5) The HLG noted that the dairy producing and processing sectors are highly differentiated between Member States. There is also a highly variable situation between operators and types of operators within individual Member States. But concentration of supply is low in many cases with a resulting imbalance in bargaining power in the supply chain between farmers and dairies. This imbalance can lead to unfair commercial practices; in particular, farmers do not know what price they will receive for their milk when delivering because the price is often fixed much later by dairies on a basis of the obtained added value, which, for non-cooperatives, is often outside of the farmer's control.	(5) The HLG noted that the dairy producing and processing sectors are highly differentiated between Member States. There is also a highly variable situation between operators and types of operators within individual Member States. But concentration of supply is low in many cases with a resulting imbalance in bargaining power in the supply chain between farmers and dairies. This imbalance can lead to unfair commercial practices; in particular, farmers do not know what price they will receive for their milk when delivering because the price is often fixed much later by dairies on a basis of the obtained added value, is often outside of the farmer's control. This imbalance and the uneven distribution of added value along the supply chain therefore requires measures to be taken which cover all the stages of the chain, including the distribution sector.
Amendment  8 Proposal for a regulation – amending act Recital 6
Text proposed by the Commission	Amendment
(6) There is a problem of price transmission along the chain, in particular as regards farm-gate prices. Conversely, during 2009 the supply of milk did not react to lower demand. Indeed, in some large producer Member States, in reaction to lower prices, farmers produced more than in the previous year. Value-added in the chain has become increasingly concentrated in the downstream sectors, notably with dairies.	(6) There is thus a problem of price transmission along the chain, in particular as regards farm-gate prices, the level of which generally does not take account of rising production costs. Conversely, during 2009, the supply of milk did not naturally adjust to lower demand.
	Indeed, in some large producer Member States, in reaction to lower prices, farmers produced more than in the previous year. Value-added in the chain has become increasingly concentrated in the downstream sectors, notably with dairies and retailers, with a final consumer price that is not reflected in the price paid to producers.
Amendment  9 Proposal for a regulation – amending act Recital 6 a (new)
Text proposed by the Commission	Amendment
	(6a) There has recently been discussion at the level of the Union regarding the functioning of the food supply chain. It has been highlighted that, while input costs for producers continue to rise, prices paid by consumers do not adequately reflect this situation. There is also concern regarding the increasing power of large retailers and specifically that added value is not evenly distributed along the chain.
Amendment  10 Proposal for a regulation – amending act Recital 7
Text proposed by the Commission	Amendment
(7) For dairies, the volume which will be delivered during the season is not always well planned. Even for dairy co-operatives (owned by farmers which posses processing facilities, by which 58% of EU raw milk is processed) there is a potential lack of adaptation of supply to demand: farmers are obliged to deliver all their milk to their co-operative and the co-operative is obliged to accept all the milk.	(7) For dairies, the volume which will be delivered during the season is not always well planned. Even for dairy co-operatives there is a potential lack of adaptation of supply to demand: farmers are obliged to deliver all their milk to their co-operative and the co-operative is obliged to accept all the milk. In this context, the Commission should propose an EU framework of guidelines for the cooperative sector.
Amendment  11 Proposal for a regulation – amending act Recital 8
Text proposed by the Commission	Amendment
(8) The use of formalised, written contracts even containing basic elements made in advance of delivery is not widespread. However, they could increase awareness and reinforce the responsibility of the operators in the dairy chain to better take into account the signals of the market, improve price transmission and adapt supply to demand, as well as help avoid certain unfair commercial practices.	(8) The use of formalised, written contracts may help to reinforce the responsibility of the operators in the dairy chain and increase awareness of the need to better take into account the signals of the market, improve price transmission and adapt supply to demand as well as help avoid certain unfair commercial practices. However, the recognition of inter-branch organisations, producer organisations and contractual relations between producers and first purchasers of raw milk may not be sufficient to deal with the serious difficulties facing Europe's dairy sector especially concerning small milk producers and non-arable and remote milk producing regions. The Commission should therefore propose additional measures for the dairy sector in the context of the CAP reform that take into account specific measures as part of direct payments and rural development schemes.
Amendment  12 Proposal for a regulation – amending act Recital 9
Text proposed by the Commission	Amendment
(9) In the absence of EU legislation on such contracts, Member States may, within their own contract law systems, make the use of such contracts compulsory provided that in doing so EU law is respected and in particular that the proper functioning of the internal market and the common market organisation is respected. Given the diversity of situations across the EU in this context, in the interests of subsidiarity, such a decision should remain with Member States. However, to ensure appropriate minimum standards for such contracts and good functioning of the internal market and the common market organisation, some basic conditions for the use of such contracts should be laid down at EU level. Since some dairy co-operatives may have rules with similar effect in their statues, in the interests of simplicity they should then be exempted from a requirement for contracts. In order to ensure that any such system is effective where intermediate parties collect milk from farmers to deliver to processors, it should apply equally in such a case.	(9) In the absence of EU legislation on such contracts, Member States may, within their own contract law systems, make the use at present of such contracts compulsory provided that in doing so EU law is respected and in particular that the proper functioning of the internal market and the common market organisation is respected. Given that contracts form the basis of the Commission's proposal for the future regulation of the milk sector, the same principle, with flexible implementing rules, should be followed by all the Member States. To ensure appropriate minimum standards for such contracts and good functioning of the internal market and the common market organisation, some basic conditions for the use of such contracts should be laid down at EU level. Since some dairy co-operatives may have rules with similar effect in their statues, in the interests of simplicity they should then be exempted from a requirement for contracts. In order to guarantee uniform conditions for all deliveries of raw milk in a given territory, the legislation of the Member State which receives the delivery should apply.
Amendment  13 Proposal for a regulation Recital 9 a (new)
Text proposed by the Commission	Amendment
	(9a) The Union, in accordance with its motto 'Unity in Diversity', should seek to develop common policies that take into account and do not compromise the specific characteristics inherent to the various Member States. Union legislation should therefore take account of the diversity of the milk sector in the various Member States and should not lay down conditions for the industry that would eliminate milk production in Member States and regions where that production traditionally guarantees an income for rural communities, thereby helping to populate and revitalise rural areas in disadvantaged regions such as mountain regions and the outermost regions.
Amendment  14 Proposal for a regulation – amending act Recital 11
Text proposed by the Commission	Amendment
(11) In order to ensure the rational development of production and so to ensure a fair standard of living for dairy farmers, their bargaining power vis-à-vis processors should be strengthened which should result in a fairer distribution of value-added along the supply chain. Therefore, in order to realise these objectives of the common agricultural policy, a provision should be adopted pursuant to Articles 42 and 43(2) TFEU to allow producer organisations constituted by dairy farmers or their associations to negotiate contract terms, including price, jointly for some or all of its members' production with a dairy. In order to maintain effective competition on the dairy market, this possibility should be subject to appropriate quantitative limits. Such producer organisations should therefore also be eligible for recognition under Article 122 of Regulation (EC) No 1234/2007. The Commission should be empowered to adopt delegated acts in accordance with Article 290 TFEU in respect of the conditions for approval of associations of producer organisations.	(11) In order to ensure the sustainable development of production and so to ensure a fair standard of living for dairy farmers, their bargaining power vis-à-vis processors should be strengthened which should result in a fairer distribution of value-added along the supply chain. Therefore, in order to realise these objectives of the common agricultural policy, a provision should be adopted pursuant to Articles 42 and 43(2) TFEU to allow producer organisations constituted by dairy farmers or their associations to negotiate contract terms, including price, jointly for some or all of its members' production with a dairy. In order to maintain effective competition on the dairy market, this possibility should be subject to appropriate quantitative limits. Such producer organisations should therefore also be eligible for recognition under Article 122 of Regulation (EC) No 1234/2007. The Commission should be empowered to adopt delegated acts in accordance with Article 290 TFEU in respect of the conditions for approval of associations of producer organisations. Existing producer organisations should be recognised de facto by the new legislation.
Amendment  15 Proposal for a regulation Recital 11 a (new)
Text proposed by the Commission	Amendment
	(11a) It is necessary to facilitate a soft landing for the Union milk quotas system in all Member States of the Union as soon as possible since a hard landing in some Member States could cause price fluctuations in international markets and harm the stability and predictability of the market that is so necessary for European dairy farmers.
Amendment  16 Proposal for a regulation – amending act Recital 12
Text proposed by the Commission	Amendment
(12) Rules have been introduced at EU level for interbranch organisations in some sectors. These organisations can play useful roles in allowing dialogue between actors in the supply chain, and in promoting best practice and market transparency. Such rules should equally be applied in the milk and milk products sector, along with the provisions clarifying the position of such organisations under competition law whilst ensuring that they do not distort competition or the internal market or affect the good functioning of the common market organisation.	(12) Rules have been introduced at EU level for interbranch organisations in some sectors. These organisations can play useful roles in allowing dialogue between actors in the supply chain, and in promoting best practice and market transparency. Such rules should also be applied in the milk and milk products sector, along with the provisions clarifying the position of such organisations under competition law whilst ensuring that they do not distort competition or the internal market or affect the good functioning of the common market organisation. Member States should take measures to encourage all relevant actors to participate in interbranch organisations.
Amendment  17 Proposal for a regulation – amending act Recital 13
Text proposed by the Commission	Amendment
(13) In order to follow developments in the market, the Commission needs timely information on volumes of raw milk delivered. Article 192 of Regulation (EC) No 1234/2007 provides a basis for the exchange of information between the Member States and the Commission. However, provision should be made to ensure that processors deliver such information to the Member States on a regular basis. The Commission should be empowered to adopt delegated acts in accordance with Article 290 TFEU in respect of the scope, content, format and timing of such declarations.	(13) In order to follow developments in the market, the Commission needs timely information on volume, characteristics and average price of raw milk delivered. While respecting the commercial confidentiality of each undertaking, Article 192 of Regulation (EC) No 1234/2007 provides a basis for the exchange of information between the Member States and the Commission. However, provision should be made to ensure that the first purchaser transmits such information to the Member States on a regular basis. The Commission should be empowered to adopt delegated acts in accordance with Article 290 TFEU in respect of the scope, content, format and timing of such declarations.
Amendment  18 Proposal for a regulation – amending act Recital 13 a (new)
Text proposed by the Commission	Amendment
	(13a) In order to provide an effective early warning of likely market imbalance in the milk sector as well as greater market transparency a Market Monitoring Agency should be established in order to collect and disseminate data and information on production and supply, exports and imports, production costs, milk prices at farm level, consumer prices and margins, at all levels of the milk and dairy product supply chain of the Union and Member States. In order to function effectively, the agency should be independent in its operations and should report to the Management Committee for the Common Organisation of Agricultural Markets.
Amendment  19 Proposal for a regulation Recital 13 b (new)
Text proposed by the Commission	Amendment
	(13b) Competition policies need to be co-ordinated at Union level in order to ensure uniform interpretation and implementation in all Member States, since the “relevant market” for the dairy sector is in many respects no longer limited to the national borders of Member States, but is increasingly international.
Amendment  20 Proposal for a regulation – amending act Recital 14
Text proposed by the Commission	Amendment
(14) The measures set out in this Regulation, are justified in the current economic circumstances of the dairy market and the structure of the supply chain. They should therefore be applied for a sufficiently long duration (both before and after the abolition of milk quotas) to allow them to have full effect. However, given their far-reaching nature, they should nevertheless be temporary in nature, and be subject to review to see how they have operated and whether they should continue to apply. This should be dealt with in Commission reports on the development of the milk market, and covering in particular potential incentives to encourage farmers to enter into joint production agreements, to be submitted by 30 June 2014 and 31 December 2018.	(14) The measures set out in this Regulation, are justified in the current economic circumstances of the dairy market and the structure of the supply chain. They should therefore be applied for a sufficiently long duration to allow them to have full effect. However, given their far-reaching nature, they should nevertheless be temporary in nature, and be subject to review to see how they have operated and whether they should continue to apply. This should be dealt with in Commission reports on the development of the milk market, and covering in particular potential incentives to encourage farmers to enter into joint production agreements, to be submitted by 30 June 2014 and 31 December 2018.
Amendment  21 Proposal for a regulation – amending act Recital 15
Text proposed by the Commission	Amendment
(15) The Commission should have the power to adopt delegated acts in accordance with Article 290 TFUE in order to supplement or amend certain non-essential elements of measures set out in this Regulation. The elements for which that power may be exercised should be defined, as well as the conditions to which that delegation is to be subject.	(15) The power to adopt delegated acts in accordance with Article 290 TFEU should be delegated to the Commission in order to supplement or amend certain non-essential elements of measures set out in this Regulation. It is of particular importance that the Commission carry out appropriate consultations during its preparatory work, including at expert level. The Commission, when preparing and drawing-up delegated acts, should ensure a simultaneous, timely and appropriate transmission of relevant documents to the European Parliament and Council.
Amendment  22 Proposal for a regulation – amending act Recital 16
Text proposed by the Commission	Amendment
(16) In order to guarantee a uniform application of measures set out in this Regulation in all Member States, the Commission should be empowered to adopt implementing acts in accordance with Article 291 TFUE. Save where explicitly provided otherwise, the Commission should adopt those implementing acts in accordance with the provisions of Regulation (EU) No [xxxx/yyyy] of the European Parliament and the Council on….	(16) In order to ensure uniform conditions for the implementation of this Regulation , implementing powers should be conferred on the Commission. The implementing powers relating to the conditions for the recognition of producer organisations and their associations and interbranch organisationsshould be exercised in accordance with Regulation (EU) No182/2011 of the European Parliament and of the Council of … laying down the rules and general principles concerning mechanisms for control by the Member States of the Commission's exercise of implementing powers*
	____________
	* OJ L 55, 28.2.2011, p. 13 ."
Amendment  23 Proposal for a regulation – amending act Recital 16 a (new)
Text proposed by the Commission	Amendment
	(16a) In the light of the Commission's competence in the field of Union competition policy and given the special nature of those acts, the Commission should decide whether certain agreements and concerted practices in the milk and milk products sector are compatible with Union competition rules, as well as whether the negotiations by a producer organisation relating to more than one Member State may take place.
Amendment  24 Proposal for a regulation – amending act Article 1 – point 1 a (new) Regulation (EC) 1234/2007 Article 113da
Text proposed by the Commission Amendment   Article 113da   Rules seeking to improve and stabilise the operation of the common market in milk products   1. In order to improve and stabilise the operation of the market in dairy products with a protected designation of origin or a protected geographical indication in accordance with Regulation (EC) No 510/2006, Member States may establish rules to allow the management of  supply, where the groups responsible for a PDO or PGI formally introduce such a demand.   2. Such rules shall be proportionate to the objective pursued and:   (a) may only cover the regulation of supply and shall aim to bring the supply of the product in line with demand;   (b) can be taken by way of implementing decisions taken by inter-branch organisations referred to in Article 123 or decisions taken by groups of operators managing the PDO or PGI's referred to in Regulation (EC) No 510/2006   (c) shall not be made binding for more than a (renewable) period of five years of marketing;   (d) shall not relate to any transaction after the first marketing of the product concerned;   (e) shall not allow for price fixing, including where prices are set for guidance or recommendation;   (f) shall not render unavailable an excessive proportion of the product concerned that would otherwise be available;   (g) shall not harm competition in the internal market, constitute a barrier for new entrants in the market, or lead to small producers being adversely affected.   2. The rules referred to in paragraph 1 must be brought to the attention of operators by publication in extenso in an official publication of the Member State concerned.   3. The decisions and measures taken by the Member States in year n in accordance with this article shall be notified to the Commission before 1 March of year n+1.   4. The Commission may revoke at any time the authorisation of a Member State to establish such rules if it finds that that decision excludes competition in the internal market, compromises the free movement of goods or contravenes the objectives of Article 39 TFEU.
Amendment  25 Proposal for a regulation – amending act Article 1 – point 3 Regulation (EC) 1234/2007 Article 123 - paragraph 4 – introductory sentence
Text proposed by the Commission Amendment 4) Member States may also recognise inter-branch organisations which: 4) Member States shall also recognise inter-branch organisations which:
Amendment  26 Proposal for a regulation – amending act Article 1 – point 3 Regulation (EC) 1234/2007 Article 123 - paragraph 4 – point a
Text proposed by the Commission Amendment (a) are made up of representatives of economic activities linked to the production of, trade in, or processing of products of the milk and milk products sector; (a) have formally requested recognition and are made up of representatives of recognised agricultural organisations and the dairy processing industry, with the optional involvement of representatives of the trade and distribution of milk and milk products or of any other actor in the dairy supply chain and/or public authorities;
Amendment  27 Proposal for a regulation – amending act Article 1 – point 3 Regulation (EC) 1234/2007 Article 123 - paragraph 4 – point a a (new)
Text proposed by the Commission Amendment   (aa) are formally constituted as entities that have democratic governance and representative structures;
Amendment  28 Proposal for a regulation – amending act Article 1 – point 3 Regulation (EC) 1234/2007 Article 123 – paragraph 4 – point c – introductory sentence
Text proposed by the Commission Amendment (c) carry out one or more of the following activities in one or more regions of the Union, taking into account the interests of consumers: (c) carry out one or more of the following activities in one or more regions of the Union, taking into account the interests of all actors in the dairy supply chain:
Amendment  29 Proposal for a regulation – amending act Article 1 – point 3 Regulation (EC) 1234/2007 Article 123 - paragraph 4 – point c – subpoint i
Text proposed by the Commission Amendment (i) improving knowledge and the transparency of production and the market, including by publication of statistical data on the prices, volumes and durations of contracts for the delivery of raw milk which have been previously concluded, and by providing analyses of potential future market developments at regional or national level; (i) improving knowledge and the transparency of production and the market, including by publication of statistical data on the prices, volumes and durations of contracts for the delivery of raw milk which have been previously concluded, and by providing analyses of potential future market developments at regional, national and international level;
Amendment  30 Proposal for a regulation – amending act Article 1 – point 3 Regulation (EC) 1234/2007 Article 123 – paragraph 4 – point c – subpoint ii
Text proposed by the Commission Amendment (ii) helping to coordinate better the way the products of the milk and milk products sector are placed on the market, in particular by means of research and market studies; (ii) helping to coordinate better the way the products of the milk and milk products sector are produced and placed on the market, by means of research and market studies specifically focusing on European quality products in order to emphasise their added value;
Amendment  31 Proposal for a regulation – amending act Article 1 – point 3 Regulation (EC) 1234/2007 Article 123 – paragraph 4 – point c – subpoint ii a (new)
Text proposed by the Commission Amendment   (iia) promoting consumption and providing information on milk and milk products in both internal and external markets;
Amendment  32 Proposal for a regulation – amending act Article 1 – point 3 Regulation (EC) 1234/2007 Article 123 – paragraph 4 – point c – subpoint ii b (new)
Text proposed by the Commission Amendment   (ii b) exploring potential export markets;
Amendment  33 Proposal for a regulation – amending act Article 1 – point 3 Regulation (EC) 1234/2007 Article 123 – paragraph 4 – point c – subpoint iii
Text proposed by the Commission Amendment (iii) drawing up standard forms of contract compatible with Union rules; (iii) drawing up standard forms of contract compatible with Union rules for the sale of raw milk to dairies and the supply of processed products to distributors and retailers , taking into account the need to achieve fair competitive conditions and to avoid market distortions, in the interests of all actors operating within the industry;
Amendment  34 Proposal for a regulation – amending act Article 1 – point 3 Regulation (EC) 1234/2007 Article 123 – paragraph 4 – point c – subpoint iii a (new)
Text proposed by the Commission Amendment   (iiia) developing practices aimed at the prevention and managment of the risks linked to the production, processing, marketing and distribution of milk and milk products;
Amendment  35 Proposal for a regulation – amending act Article 1 – point 3 Regulation (EC) 1234/2007 Article 123 – paragraph 4 – point c – subpoint iv a (new)
Text proposed by the Commission Amendment   (iva) maintaining and developing the production potential of the dairy sector;
Amendment  36 Proposal for a regulation – amending act Article 1 – point 3 Regulation (EC) 1234/2007 Article 123 – paragraph 4 – point c – subpoint vi a(new)
Text proposed by the Commission Amendment   (vi a) enhancing food safety and security, particularly by ensuring the tracability of milk products;
Amendment  37 Proposal for a regulation Article 1 – point 3 Regulation (EC) 1234/2007 Article 123 – paragraph 4 – point c – subpoint vii
Text proposed by the Commission Amendment (vii) exploiting the potential of organic farming and protecting and promoting such farming as well as designations of origin, quality labels and geographical indications; and (vii) exploiting the potential of organic farming and protecting and promoting such farming as well as designations of origin, quality labels and geographical indications and ) providing information on the particular characteristics of milk and milk products with a protected designation of origin (PGO) or a protected geographical indication (PGI);
Amendment  38 Proposal for a regulation – amending act Article 1 – point 3 Regulation (EC) 1234/2007 Article 123 – paragraph 4 – point c – subpoint viii
Text proposed by the Commission Amendment (viii) promoting integrated production or other environmentally sound production methods." (viii) promoting integrated production recognised and certified at European level as environmentally sound;
Amendment  39 Proposal for a regulation – amending act Article 1 – point 3 Regulation (EC) 1234/2007 Article 123 – paragraph 4 – point c – subpoint viii a (new)
Text proposed by the Commission Amendment (viii a)             raising awareness of funding opportunities, promoting innovation and supporting programmes for applied research and development (R&D) in order to exploit the full potential of milk and milk products, especially in order to create value added products which are more attractive to the consumer; and
Amendment  40 Proposal for a regulation – amending act Article 1 – point 3 Regulation (EC) 1234/2007 Article 123 – paragraph 4 – point c – subpoint viii b (new)
Text proposed by the Commission Amendment (viiib) working towards achieving fair distribution of the profits from the food supply chain , and promoting regional and local economic activity by reinforcing cooperative structures and direct sales of milk and dairy products to consumers.
Amendment  41 Proposal for a regulation Article 1 – point 3 Regulation (EC) 1234/2007 Article 123 – paragraph 4 a (new)
Text proposed by the Commission Amendment   4a Where raw milk is sourced from less favoured areas (mountainous areas, intermediate LFAs, areas with a specific natural handicap), any transfer of volume collected to an area which is not a LFA, or between different types of LFA, must be authorised in advance by the inter-branch organisation to which the collector and producer concerned belong.
Amendment  42 Proposal for a regulation – amending act Article 1 – point 4 Regulation (EC) 1234/2007 Article 126a – paragraph 2 – point c – introductory sentence
Text proposed by the Commission Amendment (c) provided that the total volume of raw milk covered by such negotiations by a particular producer organisation does not exceed: (c) provided that, for a particular producer organisation:
Amendment  43 Proposal for a regulation – amending act Article 1 – point 4 Regulation (EC) 1234/2007 Article 126a – paragraph 2 – point c – subpoint i
Text proposed by the Commission Amendment (i) 3.5 % of total Union production, and (i) the volume of raw milk covered by such negotiations does not exceed 3.5 % of total Union production, and
Amendment  44 Proposal for a regulation – amending act Article 1 – point 4 Regulation (EC) 1234/2007 Article 126a – paragraph 2 – point c – subpoint ii
Text proposed by the Commission Amendment (ii) 33 % of the total national production of any particular Member State covered by such negotiations by that producer organisation, and (ii) the volume of raw milk covered by such negotiations which is produced in any particular Member State does not exceed 40 % of the total national production of that Member State, and
Amendment  45 Proposal for a regulation – amending act Article 1 – point 4 Regulation (EC) 1234/2007 Article 126a – paragraph 2 – point c – subpoint iii
Text proposed by the Commission Amendment (iii) 33 % of the total combined national production of all the Member States covered by such negotiations by that producer organisation, (iii) the volume of raw milk covered by such negotiations which is delivered in any particular Member State does not exceed 40 % of the total national production of that Member State,
Amendment  46 Proposal for a regulation – amending act Article 1 – point 4 Regulation (EC) 1234/2007 Article 126a – paragraph 2 – point d
Text proposed by the Commission Amendment (d) provided the farmers concerned are not members of any other producer organisation which also negotiates such contracts on their behalf, and; (d) provided the farmers concerned are not members of any other producer organisation which also negotiates such contracts on their behalf. However, Member States may derogate from this condition in duly justified cases where two distinct production units are located in different geographic areas, and
Amendment  47 Proposal for a regulation – amending act Article 1 – point 4 Regulation (EC) 1234/2007 Article 126a – paragraph 2 – point e
Text proposed by the Commission Amendment (e) provided that the producer organisation notifies the competent authorities of the Member State or Member States in which it operates. (e) provided that the producer organisation notifies the competent authorities of the Member State or Member States in which it operates of the volume of raw milk covered by such negotiations.
Amendment  48 Proposal for a regulation - amending act Article 1 – point 4 Regulation (EC) 1234/2007 Article 126 a – paragraph 2 a (new)
Text proposed by the Commission Amendment   2a. By way of derogation from points (ii) and (iii) of paragraph 2(c), in Member States with a total annual raw milk production of less than 500 000 tonnes, the negotiation by the producer organisation may take place if the total volume of raw milk included by a particular producer organisation in such negotiations does not exceed:   - 75 % of the total national production of any particular Member State concerned, and   - 75 % of the total combined national production of all the Member States concerned.
Amendment  49 Proposal for a regulation – amending act Article 1 – point 4 Regulation (EC) 1234/2007 Article 126a – paragraph 3
Text proposed by the Commission Amendment 3. For the purposes of this Article, references to producer organisations shall also cover associations of such producer organisations. In order to ensure that these associations may be appropriately monitored, the Commission may, by means of delegated acts, adopt rules on the conditions for recognition of such associations. 3. For the purposes of this Article, references to producer organisations shall also cover associations of such producer organisations.
Amendment  50 Proposal for a regulation – amending act Article 1 – point 4 Regulation (EC) 1234/2007 Article 126a – paragraph 5, subparagraph 1
Text proposed by the Commission Amendment 5. By way of derogation from paragraph 2(c) (ii) and (iii), even where the threshold of 33% is not exceeded, the competition authority referred to in the second subparagraph may decide in an individual case that the negotiation by the producer organisation may not take place if it considers that this is necessary in order to prevent competition being excluded or in order to avoid serious prejudice to SME processors of raw milk in its territory. 5. By way of derogation from paragraph 2(c)(i), (ii) and (iii), even where the threshold of 3.5 % or 40 % is not exceeded, the competition authority referred to in the second subparagraph may decide in an individual case that the agreement involving the producer organisation must either be renegotiated or not take place at all if it considers that this is necessary in order to prevent competition being seriously distorted or in order to avoid serious prejudice to SME processors of raw milk in its territory.
Amendment  51 Proposal for a regulation – amending act Article 1 – point 4a (new) Regulation (EC) 1234/2007 Part II - Title II - Chapter II - Section II b (new)
Text proposed by the Commission Amendment   4a. In Chapter II of Title II of Part II, the following Section IIb is inserted :   ‘Section IIb   Recognition   Article 126b   Recognition of producer organisations and their associations in the milk and milk products sector   1. Member States shall recognise as producer organisations in the milk and milk products sector any legal entity or clearly defined part thereof applying for such recognition, provided that:   a) it meets the requirements laid down in Article 122(b) and (c);   b) it has a minimum number of members and/or it covers a minimum marketable production volume to be determined by the Member State concerned;   c) there is sufficient evidence that it can carry out its activities properly, both over time and in terms of effectiveness and concentration of supply,   d) it has statutes consistent with the provisions of points a), b) and c).   2. In response to an application, Member States may recognise an association of producer organisations if the Member State concerned considers that the association is capable of carrying out all the activities of a recognised producer organisation and fulfils the conditions laid down in paragraph 1.   3. Member States may decide that a producer organisation which has been recognised under national law before * and which meets the conditions laid down in paragraph 1 is to be recognised as a producer organisation in accordance with Article 122(1)(iiia).   4. Member States shall:   (a) decide within three months of the lodging of an application accompanied by all the relevant supporting documents whether to grant recognition to a producer organisation;   (b) carry out, at regular intervals to be determined by them, checks to verify that producer organisations and associations of producer organisations are complying with the provisions of this Chapter;   (c) in the event of non-compliance or irregularities in the implementation of the measures provided for in this Regulation, impose on those organisations the applicable penalties that they have laid down and decide whether, if necessary, recognition should be withdrawn;   (d) inform the Commission once each year, and at the latest on 1 March, of the number of times recognition was granted, refused or withdrawn in the previous year.   5. The Commission may adopt implementing acts laying down detailed rules necessary for the implementation of the conditions for recognition of producer organisations and their associations set out in this Article. Those implementing acts shall be adopted in accordance with the examination procedure referred to in Article 196b(2).   Article 126c   Recognition of inter-branch organisations in the milk and milk products sector   1. Member States may recognise inter-branch organisations in the milk and milk products sector which:   (a) meet the requirements laid down in Article 123(4);   (b) carry out their activities in one or more regions in the territory concerned;   (c) account for a significant proportion of raw milk production or the processing or marketing of milk products;   (d) do not themselves engage in the production of milk or the processing or marketing of milk products.   2. Member States may decide that an inter-branch organisation which has been recognised under national law before …* and which fulfils the conditions laid down in this Article is to be recognised as an inter-branch organisation.   3. Where they make use of the possibility of recognising an inter-branch organisation in accordance with paragraph 1, Member States shall:   (a) decide whether to grant recognition to an inter-branch organisation within three months of the lodging of an application accompanied by all the relevant supporting documents;   (b) carry out, at regular intervals to be determined by them, checks to verify that inter-branch organisations are complying with the conditions governing their recognition;   (c) in the event of non-compliance or irregularities in the implementation of the measures provided for in this Regulation, impose on those organisations the applicable penalties they have laid down and decide whether, if necessary, recognition should be withdrawn;   (d) withdraw recognition if:   (i) the requirements and conditions for recognition laid down in this Article are no longer met;   (ii) the inter-branch organisation engages in any of the agreements, decisions and concerted practices referred to in Article 177a(4), without prejudice to any other penalties to be imposed pursuant to national law;   (iii) the inter-branch organisation fails to comply with the notification obligation referred to in Article 177a(2);   (e) inform the Commission once each year, and at the latest on 1 March, of the number of times recognition was granted, refused or withdrawn in the previous year.   4. The Commission may adopt implementing acts laying down detailed rules necessary for the implementation of the conditions for recognition of interbranch organisations set out in this Article. Those implementing acts shall be adopted in accordance with the examination procedure referred to in Article 196b(2).   Article 126d   In order to ensure that the objectives and responsibilities of producer organisations and associations of producer organisations are clearly defined, so as to contribute to the effectiveness of the actions of such organisations, the Commission shall be empowered to adopt delegated acts in accordance with Article 196a, which lay down:   (a) the conditions under which administrative assistance is to be given by the relevant competent authorities in the case of transnational cooperation concerning transnational producer organisations or associations and   (b) rules concerning the possibility to derogate from the percentages referred to in Article 126a(2) point (c) in the event of a sudden and unpredictable change in the national production level from one year to another in a Member State in order to permit the producer organisations to continue to operate.   ___________   * Insert date of entry into force of this Regulation.
Amendment  52 Proposal for a regulation – amending act Article 1 – point 6 Regulation (EC) 1234/2007 Article 177a – paragraph 4 – point a
Text proposed by the Commission Amendment (a) agreements, decisions and concerted practices which may lead to the partitioning of markets in any form within the Union; (a) agreements, decisions and concerted practices which may lead to the partitioning of markets in any form or interfere with the proper functioning of the internal market of the Union;
Amendment  53 Proposal for a regulation – amending act Article 1 – point 7 Regulation (EC) 1234/2007 Article 179
Text proposed by the Commission Amendment (7) Article 179 is replaced by the following: deleted "Article 179Implementing powers in respect of agreements and concerted practices     The Commission may, by means of implementing acts, adopt all necessary measures related to Articles 176a to 178."
Amendment  54 Proposal for a regulation – amending act Article 1 – point 7a (new) Regulation (EC) 1234/2007 Article 179a (new)
Text proposed by the Commission Amendment 7a. The following article is inserted:   "Article 179aImplementing powers in respect of agreements and concerted practices in the milk and milk products sector     The Commission may adopt implementing acts as regards all necessary measures related to Article 177a.   Those implementing acts shall be adopted in accordance with the examination procedure referred to in Article 196b.".
Amendment  55 Proposal for a regulation – amending act Article 1 – point 9 Regulation (EC) 1234/2007 Article 185e – paragraph 1
Text proposed by the Commission Amendment 1. Processors of raw milk shall declare to the competent national authority the quantity of raw milk that has been delivered to them each month. 1. The first purchaser shall declare to the competent national authority the quantity details regarding the characteristics, volume and average price paid for raw milk that has been delivered to them each month with a view to accurately assessing global Union milk production and supply, thereby improving transparency throughout the dairy supply chain for the benefit of all actors operating within it.
Amendment  56 Proposal for a regulation – amending act Article 1 – point 9 Regulation (EC) 1234/2007 Article 185e – paragraph 2a (new)
Text proposed by the Commission Amendment   2a. In the interests of protecting fair competitive practices and in order to avoid market distortion, the commercially sensitive nature of such data shall be taken into consideration before it is made public, which may not be less than 45 days from the date of receipt of those declarations.
Amendment  57 Proposal for a regulation – amending act Article 1 – point 9 Regulation (EC) 1234/2007 Article 185f – paragraph 1– subparagraph 1
Text proposed by the Commission Amendment 1. If a Member State decides that every delivery of raw milk by a farmer to a processor of raw milk must be covered by a written contract between the parties, such contract shall fulfil the conditions laid down in paragraph 2. 1. Every delivery of raw milk by a farmer to a processor of raw milk must be covered by a written contract between the parties. Such contracts shall fulfil the conditions laid down in paragraph 2.
Amendment  58 Proposal for a regulation – amending act Article 1 – point 9 Regulation (EC) 1234/2007 Article 185f – paragraph 1 – subparagraph 2
Text proposed by the Commission Amendment In the case described in the first subparagraph, the Member State concerned shall also decide that if the delivery of raw milk is made through one or more collectors, each stage of the delivery must be covered by such a contract between the parties. To this end, a "collector" means an undertaking which transports raw milk from a farmer or another collector to a processor of raw milk or another collector, where the ownership of the raw milk is transferred in each case. If the delivery of raw milk is made through one or more collectors, the Member State shall decide which stage of the delivery shall be covered by such a contract between the parties. To this end, a "collector" means an undertaking which transports raw milk from a farmer or another collector to a processor of raw milk or another collector, where the ownership of the raw milk is transferred in each case.
Amendment  59 Proposal for a regulation – amending act Article 1 – point 9 Regulation (EC) 1234/2007 Article 185f – paragraph 2 – point c – subpoint i
Text proposed by the Commission Amendment (i) the price payable for the delivery, which shall: (i) the milk price payable for the delivery which shall be fixed for no less than one year and which shall:
Amendment  60 Proposal for a regulation – amending act Article 1 – point 9 Regulation (EC) 1234/2007 Article 185f – paragraph 2 – point c – subpoint i - indent 1a (new)
Text proposed by the Commission Amendment   - be calculated using a formula specified in the contract and/or
Amendment  61 Proposal for a regulation – amending act Article 1 – point 9 Regulation (EC) 1234/2007 Article 185f – paragraph 2 – point c – subpoint i – indent 2
Text proposed by the Commission Amendment - vary only on factors which are set out in the contract, in particular the development of the market situation based on market indicators, the volume delivered and the quality or composition of the raw milk delivered; - vary only on factors which are set out in the contract, in particular development of the market situation, other market indicators, the volume delivered and the quality or composition of the raw milk delivered and/or;
Amendment  62 Proposal for a regulation – amending act Article 1 – point 9 Regulation (EC) 1234/2007 Article 185f – paragraph 2 – point c – subpoint i – indent 2a (new)
Text proposed by the Commission Amendment   - may be fixed for a specific volume and for any additional volume, variable according to criteria freely agreed and set out in the contract,
Amendment  63 Proposal for a regulation – amending act Article 1 – point 9 Regulation (EC) 1234/2007 Article 185f – paragraph 2 – point c – subpoint ii
Text proposed by the Commission Amendment (ii) the volume which may and/or shall be delivered and the timing of deliveries, and (ii) the volume of raw milkwhich may and/or shall be delivered and the timing of such deliveries
Amendment  64 Proposal for a regulation – amending act Article 1 – point 9 Regulation (EC) 1234/2007 Article 185f – paragraph 2 – point c – subpoint iii
Text proposed by the Commission Amendment (iii) the duration of the contract, which may include an indefinite duration with termination clauses. (iii) the duration of the contract, which may include an indefinite duration and renegotiation and termination clauses,
Amendment  65 Proposal for a regulation – amending act Article 1 – point 9 Regulation (EC) 1234/2007 Article 185f – paragraph 2 – point c – subpoint iii a (new)
Text proposed by the Commission Amendment   (iii a) rules applicable to the renegotiation of the contract,
Amendment  66 Proposal for a regulation – amending act Article 1 – point 9 Regulation (EC) 1234/2007 Article 185f – paragraph 2 – point c – subpoint iii b(new)
Text proposed by the Commission Amendment   (iiib) details regarding payment periods and procedures,
Amendment  67 Proposal for a regulation – amending act Article 1 – point 9 Regulation (EC) 1234/2007 Article 185f – paragraph 2 – point c – subpoint iii c (new)
Text proposed by the Commission Amendment   (iiic) arrangements for collecting or delivering the products,
Amendment  68 Proposal for a regulation – amending act Article 1 – point 9 Regulation (EC) 1234/2007 Article 185f – paragraph 2 – point c – subpoint iii d (new)
Text proposed by the Commission Amendment   (iiid) the product characteristics,
Amendment  69 Proposal for a regulation – amending act Article 1 – point 9 Regulation (EC) 1234/2007 Article 185f – paragraph 2 – point c – subpoint iii e (new)
Text proposed by the Commission Amendment   (iiie) rules applicable in case of force majeure.
Amendment  70 Proposal for a regulation – amending act Article 1 – point 9 Regulation (EC) 1234/2007 Article 185f – paragraph 3
Text proposed by the Commission Amendment 3. By way of derogation from paragraph 1, a contract shall not be required where raw milk is delivered by a farmer to a processor of raw milk where the processor is a co-operative of which the farmer is a member if its statutes contain provisions having similar effects as those set out in points (a), (b) and (c) of paragraph 2. 3. By way of derogation from paragraph 1, a contract shall not be required where raw milk is delivered by a farmer to a co-operative of which the farmer is a member if its statutes or the agreements related to or derived from them contain provisions having similar effects as those set out in points (a), (b) and (c) of paragraph 2.
Amendment  71 Proposal for a regulation – amending act Article 1 – point 9 Regulation (EC) 1234/2007 Article 185f – paragraph 4
Text proposed by the Commission Amendment 4. All elements of contracts for the delivery of raw milk concluded by farmers, collectors or processors of raw milk, including those elements referred to in paragraph 2(c), shall be freely negotiated between the parties. 4. All elements of contracts for the delivery of raw milk concluded by farmers, collectors or processors of raw milk, including those elements referred to in paragraph 2(c), shall be freely negotiated between the parties. However, with due regard to the principle of subsidiarity, Member States may set the minimum duration of such contracts.
Amendment  72 Proposal for a regulation – amending act Article 1 – point 9 Regulation (EC) 1234/2007 Article 185f – paragraph 5
Text proposed by the Commission Amendment 5. In order to guarantee a uniform application of this Article, the Commission may, by means of implementing acts, adopt all necessary measures." deleted
Amendment  73 Proposal for a regulation – amending act Article 1 – point 10 Regulation (EC) 1234/2007 Article 196a – paragraph -1 (new)
Text proposed by the Commission Amendment - 1. The power to adopt delegated acts is conferred on the Commission subject to the conditions laid down in this Article.
Amendment  74 Proposal for a regulation – amending act Article 1 – point 10 Regulation (EC) 1234/2007 Article 196a – paragraph 1 – subparagraph 1
Text proposed by the Commission Amendment 1. The powers to adopt the delegated acts referred to in this Regulation shall be conferred on the Commission for an indeterminate period of time. 1. The power to adopt delegated acts is conferred on the Commission subject to the conditions laid down in this Article.   1a. The delegation of power referred to in Article 126 d and Article 185e(2) shall be conferred on the Commission for a period of five years from...*. The Commission shall draw up a report in respect of the delegated powers no later than nine months before the end of this five-year period. The delegation of power shall be tacitly extended for periods of an identical duration, unless the European Parliament or the Council opposes such extension not later than three month before the end of each period.   ____________   * OJ: please insert the date of entry into force of this regulation
Amendment  75 Proposal for a regulation – amending act Article 1 – point 10 Regulation (EC) 1234/2007 Article 196a – paragraph 1 – subparagraph 2
Text proposed by the Commission Amendment As soon as it adopts a delegated act, the Commission shall notify it simultaneously to the European Parliament and to the Council. deleted
Amendment  76 Proposal for a regulation – amending act Article 1 – point 10 Regulation (EC) 1234/2007 Article 196a – paragraph 2
Text proposed by the Commission Amendment 2. The delegation of power referred to in paragraph 1 may be revoked at any time by the European Parliament or by the Council. deleted The institution which has commenced an internal procedure for deciding whether to revoke the delegation of power shall endeavour to inform the other institution and the Commission within a reasonable time before the final decision is taken, indicating the delegated powers which could be subject to revocation and possible reasons for a revocation.   The decision of revocation shall put an end to the delegation of the powers specified in that decision. It shall take effect immediately or at a later date specified therein. It shall not affect the validity of the delegated acts already in force. It shall be published in the Official Journal of the European Union.
Amendment  77 Proposal for a regulation – amending act Article 1 – point 10 Regulation (EC) 1234/2007 Article 196a – paragraph 2a (new)
Text proposed by the Commission Amendment 2a. The delegation of power referred to in Article 126 d and Article 185e(2) may be revoked at any time by the European Parliament or by the Council. A decision to revoke shall put an end to the delegation of the power specified in that decision. It shall take effect the day following the publication of the decision in the Official Journal of the European Union or at a later date specified therein. It shall not affect the validity of any delegated acts already in force.
Amendment  78 Proposal for a regulation – amending act Article 1 – point 10 Regulation (EC) 1234/2007 Article 196a – paragraph 2b (new)
Text proposed by the Commission Amendment 2b. As soon as it adopts a delegated act, the Commission shall notify it simultaneously to the European Parliament and to the Council.
Amendment  79 Proposal for a regulation – amending act Article 1 – point 10 Regulation (EC) 1234/2007 Article 196a – paragraph 2c (new)
Text proposed by the Commission Amendment 2c. A delegated act adopted pursuant to Article 126 d and Article 185e(2) shall enter into force only if no objection has been expressed either by the European Parliament or the Council within a period of two months of notification of that act to the European Parliament and the Council or if, before the expiry of that period, the European Parliament and the Council have both informed the Commission that they will not object. That period shall be extended by two months at the initiative of the European Parliament or of the Council.
Amendment  80 Proposal for a regulation – amending act Article 1 – point 10 Regulation (EC) 1234/2007 Article 196a – paragraph 3
Text proposed by the Commission Amendment 3. The European Parliament and the Council may object to the delegated act within a period of two months from the date of notification. At the initiative of the European Parliament or the Council this period shall be extended by one month. deleted If, on the expiry of that period, neither the European Parliament nor the Council has objected to the delegated act it shall be published in the Official Journal of the European Union and shall enter into force at the date stated therein.   The delegated act shall be published in the Official Journal of the European Union and enter into force before the expiry of that period if the European Parliament and the Council have both informed the Commission of their intention not to raise objections.   If the European Parliament or the Council objects to a delegated act, it shall not enter into force. The institution which objects shall state the reasons for objecting to the delegated act.
Amendment  81 Proposal for a regulation – amending act Article 1 – point 10 Regulation (EC) 1234/2007 Article 196b
Text proposed by the Commission Amendment Implementing acts Committee procedure Where implementing acts are adopted pursuant to this Regulation, the Commission shall be assisted by the Committee referred to in Article 195 of this Regulation and the procedure provided for in Article [5] of Regulation (EU) No [xxxx/yyyy] shall apply." 1. The Commission shall be assisted by the Management Committee for the Common Organisation Agricultural Markets. That committee is a committee within the meaning of Regulation (EU) No 182/20111.   ___________   1 OJ L 55, 28.2.2011, p. 13.
Amendment  82 Proposal for a regulation – amending act Article 1 – point 10 Regulation (EC) 1234/2007 Article 196 b – paragraph 2 (new)
Text proposed by the Commission Amendment   2. Where reference is made to this paragraph, Article 5 of Regulation (EU) No 182/2011 shall apply1.   ____________   1 OJ L 55, 28.2.2011, p. 13

• [1]  Not yet published in the Official Journal

EXPLANATORY STATEMENT

Background

Between 2007-2009, exceptional developments took place in the milk and milk products sector. Initially, extreme weather conditions in Oceania brought about a significant decline in supplies, leading to rapid and significant increase in prices. Yet while world supplies had started their recovery and prices had started to return to more normal levels, the subsequent financial and economic crisis negatively affected EU dairy producers and aggravated price volatility. Initially feed and other input costs including energy increased significantly as a result of higher commodity prices. Subsequently, a drop in EU and worldwide demand coupled with EU production remaining stable led to a collapse in EU prices. This sharp decline in dairy commodity prices failed to fully translate into lower dairy prices at consumer levels. This situation slowed down price recovery and exacerbated the impact of low prices on milk producers.

In October 2009, in light of this difficult market situation for milk, a High Level Expert Group on Milk ("HLG") was set up with the purpose of discussing mid-term and long-term arrangements for the milk and milk products sector, given the expiry of dairy quotas in 2015. While respecting the outcome of the Health Check, the HLG was to work on a regulatory framework to be put in place which would contribute to stabilising the market and producers' income and enhancing transparency.

The HLG obtained oral and written input from major European stakeholder groups in the dairy supply chain representing farmers, dairy processors, dairy traders, retailers and consumers. Furthermore, the HLG received contributions from invited academic experts, third country representatives, National Competition Authorities and the Commission's services. A dairy stakeholder conference was also held on 26 March 2010 which allowed a wider range of actors in the supply chain to express their views. The HLG delivered its report on 15 June 2010 which contained an analysis of the current situation in the dairy sector and number of recommendations.

The HLG noted that the dairy producing and processing sectors are highly differentiated between Member States. There is also a highly variable situation between operators and types of operators within individual Member States. Concentration of supply is low in many cases with a resulting imbalance in bargaining power in the supply chain between farmers and dairies. This imbalance can lead to unfair commercial practices; in particular, farmers often do not know what price they will receive for their milk upon delivery as the price is often fixed much later by dairies on a basis of the obtained added value, which, for non-cooperatives, is often outside of the farmer's control.

On the other hand, for dairies, the volume which will be delivered during the season is not always well planned. Even for dairy co-operatives (owned by farmers which possess processing facilities, by which 58% of EU raw milk is processed) there is a potential lack of adaptation of supply to demand: farmers are obliged to deliver all of their milk to their co-operative and the co-operative is obliged to accept the whole delivery.

There is a problem of price transmission along the chain, in particular as regards farm-gate prices. Conversely, during 2009, the supply of milk did not react to lower demand. Indeed, in some large producer Member States, in reaction to lower prices farmers produced more than in the previous year.

Proposals

Contracts

The use of formalised, written contracts containing even basic elements made in advance of delivery is not widespread. However, after the abolition of quotas they could serve to increase awareness and reinforce the responsibility of the operators in the dairy chain to take into account market signals, improve price transmission and adapt supply to demand, as well as help to avoid unfair commercial practices.

In the absence of EU legislation on such contracts, Member States may, within their own contract law systems, make the use of such contracts compulsory provided that in doing so EU law is respected and in particular the proper functioning of the internal market and the common market organisation. In order to ensure appropriate minimum standards for such contracts, some basic conditions for their use should be laid down at EU level which would outline a general framework while maintaining a high degree of flexibility. Contracts should remain voluntary at member state level, although all producers should be able to request a contract which complies with the minimum conditions set out in the proposal if they so wish.

As some dairy co-operatives may have rules with similar effect in their statues or related agreements, in the interests of simplicity they should then be exempted from a requirement for contracts. In order to ensure that any such system is effective where intermediate parties collect milk from farmers to deliver to processors, it should apply equally in such a case.

Bargaining power of producers

In order to ensure the rational development of production and so to ensure a fair standard of living for dairy farmers, their bargaining power vis-à-vis processors should be strengthened which should result in a fairer distribution of value-added along the supply chain. Therefore, in order to realise these objectives of the common agricultural policy, a provision should be adopted pursuant to Articles 42 and 43(2) TFEU to allow producer organisations constituted by dairy farmers or their associations to negotiate contract terms, including price, jointly for some or all of its members' production with a dairy. In order to maintain effective competition on the dairy market, this possibility should be subject to appropriate quantitative limits. Such producer organisations should therefore also be eligible for recognition under Article 122 of Regulation (EC) No 1234/2007. In order to ensure a balanced approach, national competition authorities may intervene if they believe that any producer organisation has become too dominant to the detriment of fair competition, even if the bargaining power of a particular producer organisation has not exceeded the permitted percentage limits allowed for in the proposal. This will be especially relevant in order to protect small processors and SMEs.

Interbranch organisations

Interbranch organisations can play a useful role in facilitating dialogue between actors in the supply chain, and in promoting best practice and market transparency. Such rules should equally be applied in the milk and milk products sector, along with the provisions clarifying the position of such organisations under competition law whilst ensuring that they do not distort competition or the internal market or affect the good functioning of the common market organisation.

However, rules pertaining to interbranch organisations in the dairy sector should not be as far reaching as they are in other sectors (such as the fruit and vegetable sector).

Transparency

In order to follow developments in the market, specifically in the post quota era, the Commission needs timely information on volumes of raw milk delivered. Article 192 of Regulation (EC) No 1234/2007 provides a basis for the exchange of information between the Member States and the Commission. However, provision should be made to ensure that processors deliver such information to the Member States on a regular basis which should then be communicated to the Commission for analysis. While the transmission of such data will prove to be very important in order to assess EU milk production, the commercially sensitive nature of this information should always be respected. The overarching aim of analysing global EU milk production and supply should be to encourage all actors in the dairy supply chain to respond to market signals, for benefit of all actors operating within the chain.

Conclusion

Europe's dairy sector will experience a major shift after the expiration of quotas 2015. In order to secure a stable future for the sector, the bargaining power of producers needs to be improved. Hopefully this can be achieved through the use of contracts and by encouraging producers to organise themselves into producer organisations. Measures to improve transparency and comprehensive data analysis of EU milk production should go some way to replace the relative stability which was once achieved by supply management. Europe should look to countries such as Switzerland, which abolished quotas in 2009, in order to understand the potential impact of the new system and to anticipate any negative effects.

PROCEDURE

Title	Amendment of Council Regulation (EC) No 1234/2007 as regards contractual relations in the milk and milk products sector
References	COM(2010)0728 – C7-0408/2010 – 2010/0362(COD)
Date submitted to Parliament	8.12.2010
Committee responsible        Date announced in plenary	AGRI 13.12.2010
Rapporteur(s)        Date appointed	James Nicholson 1.12.2010
Discussed in committee	7.2.2011	15.3.2011	2.5.2011
Date adopted	27.6.2011
Result of final vote	+: –: 0:	34 3 0
Members present for the final vote	John Stuart Agnew, Liam Aylward, José Bové, Luis Manuel Capoulas Santos, Michel Dantin, Paolo De Castro, Albert Deß, Diane Dodds, Herbert Dorfmann, Iratxe García Pérez, Béla Glattfelder, Sergio Gutiérrez Prieto, Martin Häusling, Esther Herranz García, Peter Jahr, Elisabeth Jeggle, Jarosław Kalinowski, Elisabeth Köstinger, Agnès Le Brun, George Lyon, Gabriel Mato Adrover, Mariya Nedelcheva, James Nicholson, Georgios Papastamkos, Marit Paulsen, Britta Reimers, Czesław Adam Siekierski, Sergio Paolo Francesco Silvestris, Alyn Smith, Marc Tarabella, Janusz Wojciechowski
Substitute(s) present for the final vote	Luís Paulo Alves, Pilar Ayuso, Salvatore Caronna, Maria do Céu Patrão Neves, Dimitar Stoyanov
Substitute(s) under Rule 187(2) present for the final vote	Mara Bizzotto, Ioan Enciu, Oreste Rossi
Date tabled	5.7.2011