TRAINING SESSION I EU Market Intervention Technical Assistance for Development of a Strategy for Alignment with Common Market Organisation (CMO) Requirements TR2014/AG/10-A1-01/001 This Project is co-financed by the European Union and the Republic of Turkey TRAINING SESSION I EU Market Intervention Ankara, 14 May, 2018

Legal background Shall be applied in all Member States. Aim: safety net – stabilise the market by removing or supplying huge quantities rapidly Hierarchy of EU and national law: EU EP/Council regulations – EU Commission Regulations – national law – national ministerial regulations – notices of the intervention agency

Legal background Art. 8-16. of REGULATION (EU) No 1308/2013 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL Commission Reg. 2016/1238/EU (DEL) and 2016/1240/EU (IMP) Hungarian Law No. XCVII of 2015 on producer organisations Regulation 140/2009 (X.29.) of the Hungarian Ministry of Rural Development + specific Commission Regulations on buying-up and sale on a case-by-case basis

Eligible products - common wheat, durum wheat, barley and maize; open: 1st November – 31th May - paddy rice (150 EUR/t): open: 1st April – 31th July - fresh or chilled meat of the beef and veal sector – throughout the year - butter: open: 1st March – 30th September - skimmed milk powder: open: 1st March – 30th September

Operation/intervention prices Common wheat: - intervention opens automatically from 1st Nov., - buying up at a fixed price (101,31 EUR/t), - when the quantity bought-up in the EU reaches 3 million tons in a given year, buying-up continues automatically in a tendering procedure (where the maximum price is 101,31 EUR/t).

Operation/intervention prices Maize, barley, durum wheat, rice: - intervention may be opened by the Commission during the intervention period, - tendering procedure – where the maximum price is the 101,31 EUR/t intervention price (150 EUR/t for rice).

Operation/intervention prices Fresh or chilled meat of the beef and veal sector: - intervention may be opened by the Commission during the intervention period, if market prices of carcasses fall under 85% of the threshold price (2 224 EUR/t) - buying up at a fixed price (2 224 EUR/t)

Operation/intervention prices Butter: - intervention opens automatically from 1st March buying up at a fixed price (246,39 EUR/100kg) until 50 thousand tons, above this limit: COM may open tenders Skimmed milk powder: - buying up at a fixed price (169,8 EUR/100kg) until 109 thousand tons, above this limit: COM may open tenders

Operation/intervention prices (summary)

Public intervention (buy-up steps) 0. Publication of the notice for intervention buy-up. 1. Receiving an offer. 2. Verifying the offer, handling the security placed by offerers. 3. Preliminary on-the-spot control. 4. Sending the offers to Brussels (decision made in Brussels).

Public intervention (buy-up steps) 5. Preparing the delivery schedule. 6. Delivery, sampling and storing-in. 7. Laboratory control. 8. Take-over. 9. Calculating the price paid to offerer. Payment, release of security.

Public intervention (storage steps) 0. Publication of the notice for storage (public procurement). 1. Receiving offers of warehouse capacity. 2. Checking the offer. 3. Decision to use warehouse is made by Intervention Agency.

Public intervention (storage steps) 4. Signing the contract. 5. Stock reports. 6. Warehouse controls. 7. Calculation of storage fees. 8. Payment.

Public intervention (selling steps) 0. Publication of the notice for selling. Indicating details (quality, contacts) for each lot. 1. Receiving the bids. 2. Handling of security provided by the bidders. 3. Sending the bids to Brussels (decision made in Brussels).

Public intervention (selling steps) 4. Notifying bidders about the result of the tender. 5. Organising the removal (30 days time limit from decision). 6. Receiving the payment, releasing the security.

Example

Example Quantities offered for intervention in Hungary (thousand tons):

Example Preparations for cereal intervention: - warehouse registry - started collecting information already in 2002-2003 - increasing the administrative capacities of the responsible unit of ARDA/regional offices from 2003

Ministerial regulation on intervention - first working paper – middle of 2003 - first draft of the regulation – first months of 2004 (30 pages) - final draft sent to signature and publication – 9th April 2004 (7 pages, included only references to EU reg.) - publication of Ministerial Reg. 66/2004 (IV. 29.) on cereal and rice intervention and Ministerial Reg. 67/2004 (IV. 29.) on the requirements of cereal and rice intervention warehouses - entering into force: on the day of accession

HU experiences during the accession to the EU (1) Prior to accession: - ad-hoc market measures – no real solution - Commodity Exchange in Budapest - Licenced Warehouse System with the involvement of commercial banks - market price reporting system - eastern oriented market relations

HU experiences during the accession to the EU (2) After the accession (1st May 2004): - adoption of all EU market regulation - market price reporting aligned with EU rules - Commodity Exchange and Licenced Warehouse System remained in place - market orientation had to be restructured towards EU Member States

HU experiences during the accession to the EU (3) After the accession: - first years were difficult - unfavorable world market - new commercial relationships were just starting to take shape - poor flow of goods from new MS towards old MS (ESP: high prices and shortage – HU: depressed prices and huge surplus)

HU experiences during the accession to the EU (4)

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