1. 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. 2 Structure of presentation I.Structure of EU regulation II.Measures and activities in market intervention II. 1.Bying-in II.2.Sale II.3.Notifications III.Example: Intervention in Germany IV. Important working principles for intervention agencies

3. 3 I.Structure of EU regulation 1.Council-/EP-regulation Council. EP. Trilogue (Council, EP, EU-Commission). 2.Commission regulation Management Committee Common organisation Agricultural Markets. Expert group (delegated acts).

4. 4 EU-Regulations = Directly enforceable law from the date of entry into force in each member state (MS). Only Commission can make proposals. Publication of regulations in the official journal of the EU.

5. 5 Most Important regulations for intervention -Council regulation (EC) No 1234/2007 (single CMO). -Commission regulation (EU) No 1272/2009 (Horizontal Intervention regulation). -Commission regulation (EC) No 884/2006 (Financing of intervention measures).

6. 6 II. Measures and activities in market intervention What is intervention? -Support for producers. -Products bought by „the state“. -Products taken out of market, to reduce supply and support producer prices. -Important: Market developments.

7. 7 Products that can be intervened: -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.

8. 8 Common intervention rules for cereals -Limits of intervention - -Common wheat:3,0 million tons - -Durum wheat Barley 0,0 million tons currently - -Maize Sorghum -Extended application by means of a tendering procedure (if justified by the development of market prices). -Intervention period:1. November to 31 May -Intervention agencies in charge of public intervention in the member states (MS).

9. 9 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 Title (main chapters) I. II. III. IV. V. Annex I Content Common rules and conditions related to public intervention Procedure of bying-in Procedure of sale of products from intervention Provisions concerning notifications Amendments, repeals and final provisions Cereals Articles 1 – 5 6 – 39 40 – 54 55 – 58 59 - 61

10. 10 Common rules of intervention -Intervention centres / Storage places (Art. 2, 3). - -Prior approval by MS (intervention agencies). - -Minimum capacity. Intervention centre: 20.000 t Storage place: 5.000 t. -Operators (Art. 4). - -Can only participate if established and registered for VAT purpose (farm registry).

11. 11 Procedure of buying-in Quality (Art. 7, Annex I). -General requirements Sound, fair, of marketable quality, typical colour, free from abnormal smell and live pests. -Minimum quality standards - - Detailed requirements. - - For all cereals admissible for intervention.

12. 12 Minimum quality requirements of cereals admissable for intervention (Annex I, Part II of reg. (EU) No. 1272/2009) - 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 12 1. Broken grains 2. Grain inpurities 3. Sprouted grains 4. Miscellaneous impurities 6 8,5 4 4,5 1) 57435743 5 12 6 3 55635563 55635563 C. Maximum percentage of wholly or partially mitadiné grains D. Maximum tannin content 2) E. Minimum specific weight kg/hl F. Minimum protein content 2) G. Minimum Hagberg falling number (seconds) H. Minimum Zeleny index (ml) 27 n. a. 78 11,5 220 n. a. 73 10,5 220 22 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

13. 13 - Definitions relevant for quality (not in all details); Annex I, Part III. - -Matter which is not basic cereal of unimpaired quality. Standard EN 15587 (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.: - -EN ISO 6540 (moisture content for maize). - -EN ISO 712 (moisture content for cereals other than maize). - -Infrared technology-based methods. - -Standard EN ISO 20483 (Protein content in durum and common wheat).

14. 14 Price increases and reductions (Annex I, Part IX). - Price increases for (low) moisture content. Maize and sorghum: Per 0,1 %-point moisture content less than 12,5 %, price increase of 0,1 €/t. Cereals other than maize and sorghum: Per 0,1 %-point mosture content less than 13,5 %, price increase of 0,1 €/t.

15. 15 -Price reductions for (high) moisture content. Maize and sorghum: Per 0,1 %-point moisture content above 13 %, price reduction of 0,2 €/t, up to13,5 % (1 €/t).Cereals other than maize and sorghum: Per 0,1 %-point moisture content above 14 %, price reduction of 0,2 €/t, up to 14,5 % (1 €/t). - Price reduction for specific weight.Common wheat (Less than 76 kg/hl: 0,5 €/kg).Barley (64-62: 1 €/t). - Other Criteria (broken grains, grain impurities, sprouted grains, miscellaneous impurities („Schwarzbesatz“), piebald grains in durum).

16. 16 -Methodology of sampling and analyses for cereals (Annex I, Part XII). Representative sample for at least every 60 tons. -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.

17. 17 -Minimum quantity of products offered (Art. 8). - -Common wheat, barley, maize, sorghum: 80 tons - -Durum wheat:10 tons. -Security (Art. 9) Reg. (EC) No 2220/85 20 €. -Conditions for submission and admissibility of offers and tenders (Art. 10). -Check by the intervention agency, that offers or tenders are admissible (Art. 11).

18. 18 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).

19. 19 -Tendering procedure (Art. 15 - 19). -- Can be opened by the Commission without the assistance of the Committee (common wheat: if 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. - -Maximum price = reference (intervention) price. - -Notification to the Commission (also nil returns). - -Fixing of maximum bying-in price (publication in official journal) or rejection of offers.

20. 20 - -Intervention agencies (Art. 20).Accept tenders equal or lower than the maximum price, if fixed.Notification of the results to tenderers. -Primary requirements. -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.

21. 21 Common rules for deliveries (Art. 25, 26). -Intervention agency shall issue a delivery order (dated and numbered); - -quantity. - -final date of delivery. - -storage place. - -price. -If no deliveries possible to indicated storage place, intervention agency shell designate another storage place. -Quantities shall be weighed in the presence of offerer or tenderer and a representative ofthe intervention agency (latter can be the store keeper).

22. 22 Transport costs (lowest costs approach) (Art. 29, 30). -Up to 100 km borne by the offerer or tenderer. -Over 100 kg totally borne by intervention agency (reimbursed by COM). Takeover (Art. 31). -Conditional takeover (on the day, the whole quanitity entered the storage place). -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.

23. 23 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 Offerer100 80 Paying agency02001070

24. 24 - -Storage place in other MS (request for checks to the intervention agency of that MS). - -Amendments possible if market situation is seriously disrupted by contaminants. -Specific provions for the takeover in storage place of the storekeeper (Loco-intervention) (Art. 33). - -Quantity established on the basis of stock records. - -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.

25. 25 Takeover record (Art. 34) -Not later than 60 days after final delivery. -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). - -Replacement of product possible.

26. 26 Bying-in price (Art. 38). -Fixed price. -Tendered price. Payments no later than 65 days after conditional take over.

27. 27 II. 2.Procedure of sale Tendering procedure; (Art. 40/41). - Opened by a regulation on basis of Reg. (EC) No 1234/2007. -Regional opening possible. -Content of regulation: - -CN-Code. - -Period and sub-period(s). - -Restriction to specific uses possible (e.g. bioethanol).

28. 28 -Notice of invitation (Art. 41). - -By the intervention agency. - -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). - -Proof, that security is paid.

29. 29 -Reference to minimum or standard quality. -Exports: Export licence. -Tenders shall not be withdrawn or amended after their submission. Quantity per tender (Art. 43, 44). -Sales lot, as indicated in the invitation to the tender. -Security: 10 €/t. 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.

30. 30 -No acceptance of not notified tenders. -Notification to tenderers 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 transferable. Payments (Art. 49) -Before removal within a specified period, successful tenderersshall pay the intervention agency the amount corresponding to their tender. Sales by Member States (where no tendering procedure ist open) (Art. 50) -For less than 5.000 t. -Decision of the MS.

31. 31 Removal from storage (Art. 51) -Removal order. -Successful tenderer shall remove the product within 30 days (can be prolonged). 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).

32. 32 II. 3.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. - -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 12.00 (Brussels time)); (Art. 56). - -Quantities of common wheat offered. - -Quantities accepted.

33. 33 - -Quantities subject to conditional take over. - -Stock situation. - -Market prices for the previous week (representative). -Monthly notifications (not later than the 15th of each month for the previous month). - -Weighed average results of quality. - -Notification more and more via ISAMM.

34. 34 III. Intervention in Germany 1.In Charge of intervention: Federal Office for Agriculture and Food. (Bundesanstalt für Landwirtschaft und Ernährung = BLE). 2.In the past: High share of EU-intervention stocks in Germany -2000: 69 % -2012: 26 %.

35. 35 National tendering procedure for storage („public warehouses“) -Tendering procedure by BLE. -Offers are inspected by BLE-inspector. -Report about inspections. -Approval by BLE via contracts with storage keepers. - -HACCP-concept (Reg. (EC) No 852/2004 and 183/2005). - -Laboratory equipment (Reg. (EU) No 1272/2009). - -IT-bookkeeping, controlling, annual inventory, notifications (Reg. (EC) No. 884/2006).

36. 36 -In regions with surplus production of cereals. -Technical equipment for bying-in and selling big quantities. -Low transport costs to markets.

37. 37 Intervention centre Berlin 11 Inter- vention centre Storage placesCapacity t Removal capacity Transport comection t/day 10115 Berlin ShipTrainLory 13353 Berlin46.7071 000 750 14669 Ketzin42.8561 000 14641 Nauen12 017750 13585 Berlin17 974750 19322 Wittenberge5 778750 6333 Welfesholz12 442750 16928 Pritzwalk19 601750 15837 Baruth/Mark35 732750 14558 Nuthetal7 800750 14641 Nauen14 970750 16321 Bernau76 7002 000 16515 Oranienburg34 2161 000 14947 Nuthe-Urstromtal11. 659750 338 452 Die BLE.Ref. 313, Hinz/Jörke

38. 38 Intervention centres for cereals in Germany

39. 39 Production centres of cereals in Germany Cereals area in % of arable land

40. 40 Production centres of common wheat in Germany Wheat area in % of arable land

41. 41 Production centres of rye in Germany Rye area in % arable land

42. 42 Production centres of barley in Germany Barley area in % arable land

43. 43 Intervention centres in Germany Are situated in the centres of production of cereals. Are often near rivers or channels. Cereals can be transported with relatively low costs to markets.

44. 44 IV: Important working principles for intervention (paying) agencies - Written instructions for every step of procedure. - Check List for every step of procedure. - Four eyes principle for internal procedures.

45. 45 Thank you very much for your attention