L 210/32 Official Journal of the European Communities 28. 7. 98 COUNCIL REGULATION (EC) No 1638/98 of 20 July 1998 amending Regulation No 136/66/EEC on the establishment of a common organisation of the market in oils and fats THE COUNCIL OF THE EUROPEAN UNION, Having regard to the Treaty establishing the European Community, and in particular Article 43 thereof, Having regard to the proposal from the Commission ('), Having regard to the opinion of the European Par- liament (?), Having regard to the opinion of the Economic and Social Committee (%), (1) Whereas in February 1997 the Commission submitted a communication to the European Par- liament and the Council on the olive and olive oil sector, concluding that the current common organ- isation of the market in oils and fats needed reform; whereas that communication and the options for reform set out therein have been discussed within the Community institutions; whereas opinions concur on the need for reform; whereas, however, with a view to determining the best approach, more reliable information must be obtained, in particular on the number of olive trees in the Community, the areas planted and yields; whereas, given the time required to gather and analyse such data, the Commission has undertaken to submit a proposal for reform in the course of 2000 for application from the 2001/02 marketing year; (2) Whereas experience has shown that some adjust- ments need to be made in the near future to the current common organisation of the market to reduce the difficulties of operators in the sector, improve checks conducted by the national author- ities and protect the Community budget better; whereas provision should be made for the necessary adjustments to the present market organisation and the relevant prices and amounts should be fixed for the marketing years from 1998/99 to 2000/01; (3) Whereas Article 5 of Council Regulation No 136/ 66/EEC of 22 September 1966 on the establishment of a common organisation of the market in oils and () OJ C 136, 1. 5. 1998, p. 20. () OJ C 210, 6. 7. 1998. () OJ C 235, 27. 7. 1998. fats (*) provides for production aid fixed on a flat-rate basis for producers whose average production does not exceed 500 kg; whereas the measure was intended in particular to reduce the administrative costs connected with checking on entitlement to the aid; whereas, however, changes to the production aid scheme, and in particular the rise in the proportion of expenditure on aid paid to small producers and the increase in the level of aid, have transformed the two-tier system of aid to producers into a source of fraud; whereas the provisions relating specifically to aid for small producers should accordingly be deleted; Whereas the stabiliser mechanism for production aid is currently based on a maximum guaranteed quant- ity for the Community as a whole; whereas the maximum guaranteed quantity should be increased to take account, in particular, of production trends; Whereas, to encourage a reasonable level of produc- tion in each Member State, the maximum guaranteed quantity should be apportioned among the producer Member States in the form of National Guaranteed Quantities (NGQ);, whereas the apportionment should essentially be based on production over a representative period, taking no account of extreme production years; whereas, however, account should be taken of the situation in the sector in the different Member States and in particular of the specific al- location of aid previously granted to small producers and of the production potential of existing olive groves in Spain and Portugal; Whereas, in order to mitigate the effects of fluctu- ations in production, where the actual production of a Member State is lower than its NGQ, part of the shortfall may be added to that Member State’s NGQ for the following marketing year; whereas the remainder of the shortfall can offset other Member States” NGQ overruns in order to continue to ensure some solidarity between producers in the European Union; Whereas the production aid is payable to the olive growers; whereas the latter must receive the aid in full, irrespective of the various reductions provided for in the Community rules; () OJ 172, 30. 9. 1966, p. 3025/66. Regulation as last amended by Regulation (EC) No 1581/96 (O] L 206, 16. 8. 1996, p. 11).