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TITLE IU.K.INTERNAL MARKET

Article 2U.K.

In order to encourage action by trade and joint trade organisations to facilitate the adjustment of supply to market requirements, the following Community measures may be taken in respect of the products listed in Article 1:

(a)

measures to improve sheep and goat farming;

(b)

measures to promote better organisation of production, processing and marketing;

(c)

measures to improve quality;

(d)

measures to permit the establishment of short- and long-term forecasts on the basis of the means of production used;

(e)

measures to facilitate the recording of market price trends.

General rules concerning these measures shall be adopted in accordance with the procedure laid down in Article 37(2) of the Treaty.

CHAPTER IU.K.DIRECT PAYMENTS

Article 3U.K.

For the purposes of this Title the following definitions shall apply:

(a)

‘producer’ shall mean an individual farmer, whether a natural or a legal person or group of natural or legal persons, irrespective of the legal status conferred by national law on such a group or its members, whose holding is located in Community territory and who is engaged in rearing ovine or caprine animals;

(b)

‘holding’ shall mean all production units managed by the producer and located within the territory of a single Member State;

(c)

‘ewe’ shall mean any female of the ovine species having lambed at least once or aged at least one year;

(d)

‘she-goat’ shall mean any female of the caprine species having kidded at least once or aged at least one year.

Section 1U.K.Ewe and goat premium

Article 4U.K.

1.A producer keeping ewes on his holding may qualify, on application for a premium for maintaining ewes (ewe premium).

2.A producer keeping she-goats on his holding may qualify, on application for a premium for maintaining she-goats (goat premium). This premium shall be granted to producers in specific areas where the production meets the following two criteria:

1.

goat rearing is mainly directed towards the production of goatmeat;

2.

goat and sheep rearing techniques are similar in nature.

A list of such areas shall be established following the procedure referred to in Article 25(2).

3.The ewe premium and the goat premium shall be granted in the form of an annual payment per eligible animal per calendar year and per producer within the limits of individual ceilings. The minimum number of animals in respect of which an application for a premium is lodged shall be determined by the Member State. This minimum shall not be less than 10 or greater than 50.

4.Per ewe, the amount of the premium shall be EUR 21. However for producers marketing sheep's milk or products based on sheep's milk the premium per ewe shall be EUR 16,8.

5.Per she-goat the amount of the premium shall be EUR 16,8.

6.Detailed rules for the application of this Article shall be adopted in accordance with the procedure referred to in Article 25(2).

Section 2U.K.Supplementary premium

Article 5U.K.

1.A supplementary premium shall be paid to producers in areas where sheep and goat production constitutes a traditional activity or contributes significantly to the rural economy. Member States shall define these areas. In any event the supplementary premium shall only be granted to a producer whose holding has at least 50 % of its area used for agriculture situated in less-favoured areas defined pursuant to Regulation (EC) No 1257/1999.

2.The supplementary premium shall also be granted to a producer practising transhumance provided that:

(a)at least 90 % of the animals for which the premium is applied are grazed for at least 90 consecutive days in an eligible area established in accordance with paragraph 1, and

(b)the seat of the holding is situated in a well-defined geographical area for which it has been established by the Member State that transhumance is a traditional practice of sheep and/or goat rearing and that these animal movements are necessary owing to the absence of forage in sufficient quantity during the transhumance period.

3.The amount of the supplementary premium shall be set at EUR 7 per ewe and per she-goat. The supplementary premium shall be granted under the same conditions as those laid down for the grant of the ewe and goat premium.

4.Detailed rules for the application of this Article shall be adopted in accordance with the procedure referred to in Article 25(2).

Section 3U.K.Common provisions

Article 6U.K.

1.Premiums shall be paid to recipient producers on the basis of the number of ewes and/or she-goats kept on their holding over a minimum period to be determined in accordance with the procedure referred to in Article 25(2).

Payments shall be made as soon as the inspections provided for in Council Regulation (EEC) No 3508/92 of 27 November 1992 establishing an integrated administration and control system for certain Community aid schemes(1) are carried out but not earlier than 16 October of the calendar year in respect of which they are applied for, and not later than 31 March of the following calendar year.

2.Once a Regulation providing for new rules on the identification and registration of sheep and goats becomes applicable, to qualify for the premium an animal shall be identified and registered in accordance with these rules.

Article 7U.K.

The amounts of the premiums may be changed in the light of developments in production, productivity and the markets, in accordance with the procedure laid down in Article 37(2) of the Treaty.

Section 4U.K.Individual limits

Article 8U.K.

1.On 1 January 2002 the individual ceiling per producer, subject to paragraphs 2 and 3, shall be equal to the number of premium rights which he held on 31 December 2001 in accordance with the relevant Community rules.

[F12. Member States shall take the necessary measures to ensure that, from 1 January 2002 , the sum of premium rights on their territory does not exceed the national ceilings set out in Annex I and that the national reserves referred to in Article 10 may be maintained. The Czech Republic, Estonia, Cyprus, Latvia, Lithuania, Hungary, Malta, Poland, Slovenia and Slovakia shall allocate individual ceilings to producers and shall set up the national reserves from the overall number of rights to the premium reserved for each of these Member States as set out in Annex I, no later than one year after the date of accession.]

3.Where the measures taken pursuant to paragraph 2 necessitate a reduction of individual ceilings held by producers, that reduction shall be carried out without compensatory payment and decided on the basis of objective criteria.

Those criteria shall include:

(a)the rate at which producers have used their individual ceilings during the three reference years prior to the year 2001;

(b)particular natural circumstances or the application of penalties, resulting in a non-payment or a reduced payment of the premium for at least one reference year;

(c)additional exceptional circumstances having the effect that the payments made for at least one reference year do not correspond to the actual situation as established during the previous years.

4.Premium rights, which have been withdrawn pursuant to the measure taken pursuant to paragraph 2 shall be abolished.

5.Detailed rules for the application of this Article shall be adopted in accordance with the procedure referred to in Article 25(2).

Article 9U.K.

1.When a producer sells or otherwise transfers his holding, he may transfer all his premium rights to the person who takes over his holding.

2.A producer may also transfer, in whole or in part, his rights to other producers without transferring his holding.

In the case of a transfer of rights without transfer of the holding, a part of the premium rights transferred, not exceeding 15 %, shall be surrendered, without compensation to the national reserve of the Member State where his holding is situated for redistribution free of charge.

Member States may acquire premium rights from producers who agree, on a voluntary basis, to surrender their rights, in whole or in part. In this case payments for the acquisition of such rights may be made to such producers either from national budgets or as provided for under Article 11(2), fifth indent.

By way of derogation from paragraph 1 and in duly justified circumstances, Member States may provide that in the case of a sale or other transfer of the holding, the transfer of rights is carried out by the intermediary of the national reserve.

3.Member States may take the necessary measures to avoid premium rights being moved away from sensitive zones or regions where sheep production is especially important for the local economy.

4.Member States may authorise, before a date that they shall determine, temporary transfers of that part of the premium rights, which are not intended to be used by the producer who holds them.

5.Detailed rules for the application of this Article shall be adopted in accordance with the procedure referred to in Article 25(2).

These detailed rules may concern in particular:

(a)provisions enabling Member States to resolve specific problems linked to the transfer of premium rights by producers who do not own the areas on which their holdings are situated, and

(b)specific rules relating to the minimum number, which may form the subject of a partial transfer.

Article 10U.K.

1.Each Member State shall maintain a national reserve of premium rights.

2.Any premium rights withdrawn pursuant to Article 9(2) or other Community provisions shall be added to the national reserve.

3.Member States may allocate premium rights to producers, within the limits of their national reserves. When making the allocation they shall give precedence in particular to newcomers, young farmers or other priority producers.

4.Detailed rules for the application of this Article, in particular, rules concerning the withdrawal and reallocation of unused premium rights, shall be laid down in accordance with the procedure referred to in Article 25(2).

CHAPTER IIU.K.ADDITIONAL PAYMENTS

Article 11U.K.

1.Member States shall, on a yearly basis, make additional payments totalling the global amounts set out in Annex II.

Member States may decide to supplement the global amounts set out in Annex II by reducing the amounts of the payments referred to in Article 4. The reduction in the amounts, which may be applied on a regional basis, shall not exceed one euro.

The payments shall be made, on a yearly basis, according to objective criteria including, in particular, the relevant production structures and conditions, and in such a way as to ensure equal treatment between producers and to avoid market and competition distortions. Payments shall be made within the time limit provided for in Article 6. Moreover, such payments shall not be linked to fluctuations of market prices. They may be made on a regional basis.

2.Payments may include, in particular, the following:

3.Detailed rules for the application of this Article shall be adopted in accordance with the procedure referred to in Article 25(2).

[F2Article 11a U.K.

The global amounts referred to in Article 11(1) shall be applied in accordance with the schedule of increments as set out in Article 1a of Council Regulation (EC) No 1259/1999.]

CHAPTER IIIU.K.PRIVATE STORAGE

Article 12U.K.

1.The Commission may decide to grant private storage aid when there is a particularly difficult market situation in one or more quotation areas. Quotation area shall mean:

(a)Great Britain;

(b)Northern Ireland;

(c)every other Member State taken separately.

The aid shall be introduced in the framework of a tendering procedure.

However, it may be decided to grant aid in the framework of an advance fixing procedure where urgent recourse to private storage proves necessary.

2.Detailed rules for the application of this Article shall be adopted and the granting of aids for private storage shall be decided in accordance with the procedure referred to in Article 25(2).

(1)

OJ L 355, 5.12.1992, p. 1. Regulation as last amended by Regulation (EC) No 495/2001 (OJ L 72, 14.3.2001, p. 6).