(1)

Whereas at the present time various changes are placing the fruit and vegetable sector in a new situation to which producers must adjust; whereas, accordingly, a reorientation of the basic rules of the market organization for the sector is warranted; whereas, in view of the numerous changes made to that market organization since it was first adopted, a new regulation should, for reasons of clarity, be adopted;

(2)

Whereas it is desirable to insert in that new regulation the main provisions of Council Regulation (EEC) No 3285/83 of 14 November 1983 laying down general rules for the extension of certain rules issued by producers' organizations in the fruit and vegetables sector ( 4 ), of Council Regulation (EEC) No 1319/85 of 23 May 1985 on the reinforcement of supervision of the application of Community rules on fruit and vegetables ( 5 ), of Council Regulation (EEC) No 2240/88 of 19 July 1988 fixing, for peaches, lemons and oranges, the rules for applying Article 16b of Regulation (EEC) No 1035/72 on the common organization of the market in fruit and vegetables ( 6 ), of Council Regulation (EEC) No 1121/89 of 27 April 1989 on the introduction of an intervention threshold for apples and cauliflowers ( 7 ), and of Council Regulation (EEC) No 1198/90 of 7 May 1990 establishing a Community register of citrus cultivation ( 8 ); whereas these Regulations should therefore be repealed;

(3)

Whereas classification using common obligatory standards for fruit and vegetables both marketed within the Community and exported to third countries provides a reference framework that encourages fair trading and market transparency and also eliminates products of unsatisfactory quality from the market; whereas compliance with these standards thus also helps to improve the profitability of production;

(4)

Whereas it would be desirable, for reasons of simplicity, to adopt standards for fruit and vegetables having a relatively large impact on the market which take account of the standards adopted by the United Nations Economic Commission for Europe (UN/ECE); whereas it is necessary to set the terms on which these international standards can be adjusted to the specific requirements of the Community;

(5)

Whereas standardization cannot be fully effective unless it is applied, subject to exemption, at all marketing stages and on departure from the production region; whereas exemption may, nevertheless, be provided for in the case of certain operations which either are very marginal and specific or take place at the start of the distribution chain, or in the case of products intended for processing; whereas account should also be taken of the possibility of shortages and of exceptionally plentiful supply; whereas in order to guarantee the quality required by the standards, the holder of the product must be responsible for compliance, whereas in particular, consumer requirements as regards the characteristics of fruit and vegetables mean that the origin of products should be included in the labelling up to and including the final retail stage;

(6)

Whereas the production and marketing of fruit and vegetables should take full account of environmental concerns, including cultivation practices, the management of waste materials and the destruction of products withdrawn from the market, in particular as regards the protection of water quality, the maintenance of biodiversity and the upkeep of the countryside;

(7)

Whereas producer organizations are the basic elements in the common market organization, the decentralized operation of which they ensure at their level; whereas, in the face of ever greater concentration of demand, the grouping of supply through these organizations is more than ever an economic necessity in order to strengthen the position of producers in the market; whereas such grouping must be effected on a voluntary basis and must prove its utility by the scope and efficiency of the services offered by producer organizations to their members; whereas the delivery of products to specialist producer organizations existing before the entry into force of this Regulation is not brought into question;

(8)

Whereas a producer organization cannot be recognized by its Member State as able to contribute to achievement of the objectives of the common market organization unless its articles of association impose certain requirements on it and its members; whereas producer groups wishing to acquire the status of producer organizations in accordance with this Regulation should be allowed the benefit of a transitional period during which national and Community financial support can be given against certain commitments by the group;

(9)

Whereas a transitional period should be allowed to producer organizations already recognized under Regulation (EEC) No 1035/72 ( 9 ) which cannot immediately meet the requirements of this Regulation for recognition; whereas such organizations must be able to show themselves able to make the necessary changes;

(10)

Whereas in order to give producer organizations greater responsibility for their financial decisions in particular and to gear the public resources assigned to them towards future requirements, terms should be set for the use of these resources; whereas joint financing of operational funds set up by producer organizations presents itself as an appropriate solution;

(11)

Whereas the establishment and proper functioning of operational funds requires that producer organizations should take charge of the whole of the relevant fruit and vegetable production of their members;

(12)

Whereas in order to control Community expenditure, there should be a cap on assistance granted to producer organizations that establish operational funds;

(13)

Whereas in regions where the organization of production is weak the grant of additional, national, financial contributions should be allowed; whereas in the case of Member States which are at a particular disadvantage with regard to structures, those contributions should be reimbursable by the Community via the Community Support Framework;

(14)

Whereas, in order to further boost the impact of producer organizations and associations thereof and ensure the market as much stability as is desirable, Member States should be allowed on certain conditions to extend to non-member producers in their region the rules, particularly on production, marketing and environmental protection, adopted for its members by the organization or association for the region concerned; whereas, where proper justification is given, certain costs arising from this extension of the rules should be chargeable to the producers concerned since they will benefit from the extension;

(15)

Whereas interbranch organizations set up on the initiative of individual or already grouped operators can, if they account for a significant proportion of the members of the various occupational categories of the fruit and vegetable sector, contribute to behaviour taking closer account of market realities and facilitate a commercial approach that will improve production reporting, that is to say the organization of production, product presentation and marketing; whereas since the work of these organizations is able to contribute in general to attaining the objectives of Article 39 of the Treaty and in particular to those of this Regulation it should, once the relevant forms of action are defined, be possible to grant specific recognition to those organizations which provide proof of sufficient representativeness and carry out practical action in regard to the abovementioned objectives; whereas the provisions on extending the rules adopted by producer organizations and their associations and on sharing the costs resulting from such extension should, given the similarity of the objectives pursued, also apply to interbranch organizations;

(16)

Whereas to stabilize prices it is desirable that producer organizations should be able to intervene on the market, in particular by deciding not to put up for sale particular quantities at particular periods; whereas these withdrawal operations must not be regarded as an alternative outlet to the market itself; whereas Community financing of withdrawals should therefore be restricted to a set percentage of production and the Community compensation granted at a reduced level, though use of the operational funds for this purpose should be permitted; whereas for simplicity Community compensation should be at a single flat rate for each product; whereas, to achieve a comparable reduction for all products, certain differentiations are required;

(17)

Whereas intervention can be fully effective only if the products withdrawn from the market are not reintroduced into the normal marketing channel again; whereas various alternative uses to which they may be put should be specified so that their destruction is avoided wherever possible;

(18)

Whereas this new way of managing withdrawals will allow the provisions in force on the implications of threshold overruns to be repealed immediately; whereas it is, however, reasonable to retain the underlying principle of those provisions for a transitional period and to give the Commission authority to take action on the basis of that principle if the need arises;

(19)

Whereas by Regulation (EC) No 3290/94 ( 10 ) the Council has adopted the adjustments and transitional arrangements required in the agricultural sector in order to implement the agreements concluded in the context of the Uruguay Round of multilateral trade negotiations, in particular the new trading arrangements with third countries in the fruit and vegetable sector; whereas the provisions in Annex XIII to Regulation (EC) No 3290/94 have been inserted in this Regulation; whereas, however, where products are imported into the Community for industrial processing, they are not sold on consignment; whereas verification of the entry price can therefore be made on other bases than a flat rate value; whereas the relevant provisions should therefore be supplemented in this regard;

(20)

Whereas the rules of the common market organization should be complied with by all operators to whom they apply, otherwise their impact will be distorted with all the resulting consequences in terms of both the use of public resources and the interplay of competition; whereas a special corps of Community inspectors should be set up for this sector; whereas for both budget reasons and effectiveness the corps should consist of Commission officials and possibly other staff; whereas it is also necessary to make provision for Community penalties in order to ensure that the new rules are uniformly applied throughout the Community;

(21)

Whereas one of the indispensable elements for the proper management of the common organization of the market is detailed knowledge of the market; whereas measures should therefore be provided for to this end;

(22)

Whereas the granting of certain aid would compromise the functioning of the single market; whereas, therefore, the provisions of the Treaty enabling aid granted by Member States to be examined and enabling aid which is incompatible with the common market to be prohibited, should be extended to cover the sector referred to in this Regulation;

(23)

Whereas the common organization of the market in that sector must take proper and simultaneous account of the objectives set out in Articles 39 and 110 of the Treaty;

(24)

Whereas, to facilitate the implementation of the provision of this Regulation, a procedure for close cooperation between the Member States and the Commission by means of a management committee should be set up;

(25)

Whereas in order to deal with a particularly unfavourable situation in the hazelnut sector, flat-rate aid should be granted for hazelnuts harvested in the 1997/1998, 1998/1999 and 1999/2000 marketing years,