No L 150/30 Official Journal of the European Communities 15.6.91 COUNCIL REGULATION (EEC) No 1637/91 of 13 June 1991 fixing compensation with regard to the reduction of the reference quantities referred to in Article 5¢ of Regulation (EEC) No 804/68 and compensation for the definitive discontinuation of milk production THE COUNCIL OF THE EUROPEAN COMMUNITIES, Having regard to the Treaty establishing the European Economic Community, Having regard to Council Regulation (EEC) No 804/68 of 27 June 1968 on the common organization of the market in milk and milk products (1), as last amended by Regulation (EEC) No 1630/91 (2), and in particular Article Sc(6) thereof, Having regard to the proposal from the Commission, Whereas developments in the milk market have made necessary a 2 % reduction in the guaranteed global quantities referred to in Article 5¢ of Regulation (EEC) No 804/68 and the Annex to Regulation (EEC) No 857/84 (3) adopting general rules for the application of the additional levy system in the milk and milk products sector, as last amended by Regulation (EEC) No 1635/91 (*); whereas the said reduction was decided with effect from the eighth 12-month period; Whereas, furthermore, Regulation (EEC) No 857/84, as amended by Regulation (EEC) No 1635/91, implies the short term granting of new reference quantities to producers who have entered into a non-marketing or conversion undertaking and, for that purpose, the increase of national reserves; whereas, taking into account the market situation, the reference quantities of the other producers in the other Member States concerned should, for-the time being, be subject to a deduction to be added to the 2% reduction of guaranteed global quantities; Whereas it therefore appears necessary to provide for a compensation of ECU 10 per 100 kilograms proportionate to the adjustment effort required of producers during the eighth 12-month period; whereas, however, the maximum compensation is limited to 3% of the available reference quantity, without prejudice to the possibility for the Member States to contribute to the financing by paying the same compensation for a reduction greater than 3 %; Whereas, however, in order to facilitate the decrease of deliveries and direct sales involved in reducing guaranteed global quantities and also the mobilization of the necessary quantities for producers who have entered into a non-marketing or conversion undertaking or for producers whose situation, in the view of the Member States, continues to give rise to concern, a Community system should be (') OJ No L 148, 28. 6. 1968, p. 13. (2) See page 19 of this Official Journal. () OJNo L 90, 1. 4, 1984, p. 13. (*) See page 28 of this Official Journal. established to finance the discontinuation of milk production by granting any producer, at the latter’s request and provided that he fulfils certain eligibility requirements, compensation, to be paid after the definitive discontinuation of all milk production; whereas the Member States must take account of the existence of agricultural leases; Whereas Member States should also be permitted to decide whether or in which region to implement this programme, for reasons relating to the necessity to encourage structural trends and changes, or to the requirements of regional development, or to the possibility under market conditions in the region or regions concerned to free significant reference quantities or to overriding administrative needs; Whereas, in the light of experience, the compensation for discontinuing milk production may be fixed at ECU 10 per 100 kilograms and per year, payable for five years, provided that the additional levy programme is extended for such period; Whereas the reduction target set by the Member State may be actieved by means of lower compensation; Whereas, on the other hand, it may be necessary to increase the level of compensation in order to achieve that target; whereas, therefore, Member States should be authorized to put up additional financing, the amount of which may be adjusted to take account of specific regional features; Whereas in order to ensure that in certain Membér States the programme for the discontinuation of milk production is carried out more efficiently and that Community funds are used as cost effectively as possible, it is appropriate to authorize national pre-financing of discontinuation . premiums; ‘ Whereas the compensation for discontinuing milk production is, in principle, granted for the whole of the reference quantity; whereas, however, this right should in certain cases be limited since producers who have benefited from Article 3¢ of Regulation (EEC) No 857/84 are excluded from the compensation; Whereas the reference quantities thus freed bolster the national reserves to be re-allocated to producers whose reference quantity for the eighth 12-month period has been reduced and to the producers refered to in Article 3 (a) of Regulation (EEC) No 857/84, and, where appropriate, after the Commission has agreed, to priority producers as defined by the Member State in order to resolve specific persistent problems; Wheras the rate of Community financing of compensation for discontinuation of milk production fixed in the Annex is limited to 3 % of the guaranteed global quantities, deliveries