Structure of EU regulation, measures and activities in market intervention 30th March 2012 in Belgrade Workshop on Market intervention and public warehouses Dr. Peter Bohlen

2 Structure of EU regulation 1.Council-/EP-regulation Council working group. Special Committee on Agriculture. Trilogue (Council, EP, EU-Commission). 2.Commission regulation Management Committee Common organisation Agricultural Markets Examination/Appeal Committee (Lisbon Treaty)

3 EU-Regulations = Directly enforceable law from the date of entry into force. Only Commission can make proposals. Publication in the official jounal of the EU.

4 Measures and activities in market intervention Relevant regulations dealing with intervention -Council regulation (EC) No 1234/2007 (single CMO) -Commission regulation (EU) No 1272/2009 (Horizontal Intervention regulation) -Commission regulation (EG) No 720/2008 (Storage and movements of products) -Commission regulation (EC) No 884/2006 (Financing of intervention measures) -Commission regulation (EC) No 1130/2009 (Use and/or destination of products from intervention

5 Commission regultation (EC) No. 1272/2009 of 11 December 2009 laying down common detailed rules for the implentation of Council Regulation (EC) No. 1234/2007 as regards bying-in and selling of agricultural products under public intervention (OJ L 349, p. 1) Products: Cereals: - - Common wheat. - - Durum wheat. - - Barley. - - Maize. - - Sorghum. -Paddy rice. -Fresh or chilled meat of the beef and veal sector. -Butter and skimmed milk powder.

6 Common intervention rules for cereals -Limits of intervention - -Common wheat:3,0 million tons - -Durum wheat Barley 0,0 million tons currently - -Maize Sorghum -Intervention period:1. November to 31 May -Extended application by means of a tendering procedure (if justified by the development of market prices). -Intervention agencies in charge of public intervention in the member states (MS).

7 -Intervention centres / Storage places - -Prior approval of the intervention centres and storage places by the Member states (intervention agencies). Adequate list is sent to the Commission by the intervention agency. - -Minimum capacity of intervention centres and storage places Intervention centre: t Storage place: t. - -Must be Suitable for the storage and keeping in good condition of cereals Technical equipment Able to remove the quantities. -Minimum quantity (bying-in and selling): - -Can be set by Member States on a higher Level. -Operators - -Can only participate if established and registered for VAT purpose (farm registry).

8 Quality (Art. 7, Annex I) -Sound, fair, of marketable quality, typical colour, free from abnormal smell and live pests. -Minimum quality standards - -For all cereals admissible for intervention. - -Minimum requirements.Maximum moisture content. Maximum percentage of matter, which is not basic cereal.Maximum percentage of wholly of partially mitadiné grains.Maximum tannin content.Minimum specific weight.Minimum protein content.Minimum Hagberg falling number.Minimum Zeleny index.

9 Minimum quality requirements of cereals admissable for intervention (Annex I, Part II of reg. (EU) No. 1272/ in percent if not otherwise stated - Durum wheat Common Wheat BarleyMaizeSorghum A. Maximum moisture content14,5 13,5 B. Maximum percentage of matter which ist not basic cereals of unimpaired quality Broken grains 2. Grain inpurities 3. Spronted grains 4. Miscellaneous impurities 6 8,5 4 4,5 1) C. Maximum percentage of wholly or portially mitadiné grains D. Maximum tannin content 2) E. Minimum specifiz weight kg/hl F. Minimum protein content 2) G. Minimum Hagberg falling number (seconds) H. Minimum Zeleny index (ml) 27 n. a ,5 220 n. a , n. a. 62 n. a. 1 n. a. n. a. = not applicable 1) of which maimum 3 % for impurities other than grains affected by fusariosis 2) As a percentage of dry matter

10 - Definitions relevant for quality (not in all details); Annex I, Part III - -Matter which is not basic cereal of unimpaired qualityBroken grains.Grain impurities.Sprouted grains.Miscellaneous impurities.Mitadiné grains. For all these Definitions see standard EN (durum wheat, common wheat, barlay). - -Specific factors to take into consideration for each type of cereal for the definition of impurities. -Methods for the determination of quality; Annex I, Part IV: e.g. - -Besides Standard EN there are several reference methods used. - -EN ISO 6540 (moisture content maize). - -EN ISO 712 (moisture content for cereals other than maize). - -Infrared technology-based methods. - -Standard ISO 9648 (tannin content of sorghum). - -Standard EN ISO (Protein content in durum and common wheat).

11 -Reference method for determining matter other than basic cereals of unimpaired quality in the case of maize and sorghum (Annex I, Part V). -Method for determing the non-stickiness and machinability of the dough obtained from common wheat (Annex I, Part VII). -Price increases and reductions (Annex I, Part IX) - -Price increases for moisture content. For maize and sorghum: Per 0,1 %-point moisture content less than 12,5 %, the price increases 0,1 €/t. Example: 11,2 % moisture content = 1,3 %-points less than 12,5 %; the price increases 1,3 €/t.For cereals other than maize and sorghum: Per 0,1 %-point mosture content less than 13,5 % the price increasecs 0,1 €/t. Example: 10,8 % moisture content = 2,7 %-points less than 13,5 %; the price increasecs 2,7 €/t.

12 - -Price reductions for moisture contentFor maize and sorghum: Per 0,1 %-point moisture content above 13 % the price has to be reduced 0,2 €/t, up to13,5 % (1 €/t).For cereals other than maize and sorghum: Per 0,1 %-point moisture content above 14 % the price has to be reduced 0,2 €/t; up to 14,5 % (1 €/t). - - Price reduction for specific weightCommon wheat (Less than 76 kg/hl).Barley (64-62: 1 €/t). - -Sorghum (tannin content). - -Other Criteria (broken grains, grain impurities, sprouted grains, miscellaneous impurities („Schwarzbesatz“), piebald grains in durum).

13 - Methodology of sampling and analyses for cereals (Annex I, Part XII) - -For each lot of cereals. - -Representative sample for at least every 60 tons. - -Analyes within 20 working days under responsibility of the intervention agancy. -Maximum contaminant level - -For durum and common wheat:Council Reg. (EEC) No 315/93.Commission Reg. (EC) No 1881/2006 (Fusarium-toxin level). - -For barley, maize and sorghum: Directive 2002/32/EC. - -Checks of the levels of contaminants, including radioactivity, on the basis of a risk analysis.

14 -Minimum quantity of products offered (Art. 8) - -Common wheat, barley, maize, sorghum: 80 tons - -Durum wheat:10 tons. MS may increase minimum quantity. -Security (Art. 9) - -For cereals:20 €/t. Reg. (EC) No 2220/85. -Conditions for submission and admissibility of offers and tenders (Art. 10), such as - - Official language. - -Name and address incl. VAT registration number. - -Product specification. - -Approved storage place. - -Annexed documents (proof, that security is lodged, quantityetc.).

15 -Check by the intervention agency, that offers of tenders are admissible (Art. 11) Specific conditions of buying-in -At fixed prices (common wheat):3 Mio. t - -Notification to the Commission (Art. 13). - -Measures for respecting the intervention ceilings.Closure of intervention bying-in at fixed price.Allocation coefficient (offerer may withdraw his offer within 5 working days).Probably rejection of pending offers.

16 -Tendering procedure (Art. 15, 16, 17, 18, 19) - -Can be opened leg the Commission without the assistance of the Committee (common wheat: it maximum quantity is reached). Publication of regulation in the official journal - -Products, period (eventually sub-periods); regions. - -Notification of market prices by MS. - -Submission and admissibility of tenders (proposed price referring to minimum quality, delivered to the storage place indicated by the tenderer, not unloaded) to the national intervention agency. - -Maximum price = reference (intervention) price. - -Notification to the Commission (also nil returns). - -Fixing of maximum bying-in price (publication in official journal) or rejections of offers.

17 - -Intervention agencies (Art. 20)Accept tenders equal or lower than the maximum price, if fixed.No acception of tenders, that have not been notified provided for in Art. 18.Notification of the results tenderers. -Primary requirements (maintenance of the offer or tender, delivery of the products to the storage place designated by the intervention agencies, quality compliance, presence of products in the storage place). -Release and forfeiture of the security - -Release as soon as the offerer or tenderer has delivered (or the offers have not been accepted). - -Forfeiture for the quantities that do not fulfill the requirements (except force majeure). - -Checks by intervention agency.

18 Deliveries (Art. 25, 26) -Intervention agency shall issue a delivery order (dated and numbered); - -Quantity - -final date of delivery - -storage place - -price. -No deliveries possible to the indicated storage place, intervention agency shell designate another storage place, if possible of the same intervention centre (lowest costs). -Quantities shall be weighed in the presence of offerer or tenderer and a representative ofthe intervention agency (latter can be the store keeper; than inspection by intervention agency within 30 days: at least volumetric check).

19 Transport costs (lowest costs approach) (Art. 29, 30) -Up to 100 km borne by the offerer or tenderer, exceeding 100 km by the intervention agency. -Storage place changed by intervention agency; additional cost, except the first 20 km, shall be born by the intervention agency. The transport costs over 100 kg shall be totally borne by the intervention agency (reimbursed by COM). Takeover (Art. 31) -Conditional takeover (on the day, the whole quanitity entered the storage place). -„Loco“ intervention possible (requirements must be fulfilled, conditional take over. -Control measures (Art. 2 of Reg. (EC) No 884/2006) - -MS shall be liable for the financial consequences to comply with the maximum admissible contaminent level (eventually with exception of ochratoxin and aflatoxin).

20 - -Storage place in other MS (requst for checks to the intervention agency of that MS). - -Amendments possible if market situation is seriously disrupted by contaminants. - -Costs are born by offerer for: tannin content of sorghum, Hagberg test, protein content of wheat, Zeleny and machinability test, contaminants. -Specific provions for the takeover in storage place of the storekeeper (Loco-intervention) (Art. 33) - -Quantity established on the basis of stock records (possibly adjusted) (weight, quality, trans-silages) (if any). - -Storekeeper decleration (lot corresponds to stock-record) - -Quality characteristics are the same as those of the representative sample. - -Volumetric check within 45 days after take over (tolerance: 5 %; if exceeded, weighed again; cost are born by storekeeper).

21 Examples for transport costs for cereals Storage place indicated by offerer Storage place changed by the paying agancy (original distance: 60 km) 100 km120 km80 km90 km150 km Offerer Paying agency

22 Takeover record (issued by intervention agency) (Art. 34) -Not later than 60 days after final delivery. -Date of check, weight, number of samples, quality, entity responsible for analyses, date of conditional take over, quantities that have not been taken over. -May be registered in the accounting system of the intervention agency and sent electronically. -If products do not meet the requirements - -Offerer shall take it back at his expense. - -Pay the costs from date of entry up to removal (standard accounts for entry, removal and storage costs; (Art. 4, 1 of Reg. (EC) No. 884/2006). - -A replacement of the quantities offered in case the product does not meet the requirements is possible.

23 Bying-in price (Art. 38) -Fixed price = reference price (101,31 €/t) adjustments possible. -Tendered price according to quality. -For loco-intervention: reduction: Transports costs to the storage with lowest costs + removal costs. Payments no later than 65 days after conditional take over. Procedure of sale (tendering system); (Art. 40/41) -Opened by a regulation on basis of Reg. (EC) No. 1234/2007 -First date of closing not later than 6 days after publication of that reg. -Regional opening possible. -Content of regulation: - -CN-Code. - -Period and sub-period. - -Global quantities possible. - -Provisions concerning transport costs possible. - -Restriction to specifie uses possible (e.g. bioethanol).

24 -Notice of invitation (Art. 41) - -By the intervention agency. - -Name and adress of intervention agency, reference to reg., closing date, storage places (lots) quality, delivery stage; port or place of exit reached at lowest transport costs. - -Properly published; make inspection possible. Submission and admissibility of tenders (Art. 42) -Admissible, of e. g. - -Reference to reg. - -Name, adress, VAT registration number. - -Products (CN-Code). - -Quantity. - -Price per unit (excl. VAT). - -Means of transport. - -Storage place. - -Proof, that security is paid.

25 -Reference to minimum or standard quality. -Exports: Export licence (regarded as having been issued on the closing date for submission). -Tenders shall not be withdrawn or amended after their submission. Quality per tender (Art. 43, 44) -Sales lot, as indicated in the invitation to the tender. -Security: 10 €/t. Notification of the admissible tenders to Commission by intervention agencies necessary (time limits according to opening regulation); also nil returns. Commission shall fix a minimum selling price (published in the official journal) or reject all tenders. -Minimum price: all tenders shall be rejected above minimum price.

26 -No acceptance of not notified tenders. -Notification to tenders about the outcome of the tender by intervention agency (3 days); accepted quantity, price (adjusted to quality). -Export: only quantities can be accepted for which a licence is issued. -Rights and obligatoris of tenderer not transforable. Payments (Art. 49) -Before removal within a specified period, successful tenderersshall pay the intervention agency the cemount corresponding to their tender. Sales by Member States (where no tendering procedure ist open) (Art. 50) -For less than t. -Decision of the MS. -Esp. for quantities, that after an inspection may not longer be repackaged orare deteriorated. -Equal access for all parties concerned.

27 Removal from storage (Art. 51) -Removal order, only the necessary account ist paid (quantity, storage place, final date). -Successful tenderer shall remove the product awarded to them within 30 days (can be prolonged); if not, they have to bear storing costs and storage shall be at tenderer‘s risk. Release of security (Art. 54) -For unsuccessful tenderers immediately after the decision about the tender published. -For successful tenderers after the selling price has been paid (if not, security forfeited).

28 Notifications to the Commission -MS: - -Approved intervention agencies. - -Approved intervention centres and their approved storage places. - -The minimum quantity required for bying-in products at a fixed price if different from 80 tons (common wheat, barley, maize, sorghum;10 tons for durum). - -List of intervention agencies, intervention centres and their storage places including updates will bei made available by COM. -Weekly notifications (each Wednesday, not later than (Brussels time)); (Art. 56) - -Quantities of common wheat offered. - -Quantities accepted on tenders. - -Quantities, the intervention agency has not received satisfactory evidence that they were present in the storage place.

29 - -Quantities subject to conditional take over - -Stock situationQuantities stored at the beginning of the marketing year.Cumulative quantities taken over since the beginning of the marketing year.Cumulative quantities which have left storage places (type of use or destination).Cumulative quantities earmarked.Quantities under offer at the end of the weekly reporting period - -Market prices for the previousweek (representative). -Monthly notifications (not later than the 15th of each month for the previous month) - -Weightes average results ofSpecific weight.Moisture content.Protein content for the batches of each cereal taken over. - -Notification more and more via ISAMM.

30 Intervention centres for cereals in Germany

31 Intervention centre Berlin 11 Inter- vention centre Storage placesCapacity t Removal capacity Transport comection t/day Berlin ShipTrainLory Berlin Ketzin Nauen Berlin Wittenberge Welfesholz Pritzwalk Baruth/Mark Nuthetal Nauen Bernau Oranienburg Nuthe-Urstromtal Die BLE.Ref. 313, Hinz/Jörke

32 Production centres of cereals in Germany Cereals area in % of arable land

33 Production centres of common wheat in Germany Wheat area in % of arable land

34 Production centres of rye in Germany Rye area in % arable land

35 Production centres of barley in Germany Barley area in % arable land

36 Intervention centres in Germany Situated in the centres of production of cereals. Are often near rivers or channels. Can be transported with relatively low costs.

37 Thank you very much for your attention