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DRAFT COMMISSION DECISION
allocating food aid to India

of The Commission of the European Communities


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6. Special Conditions (agreed with the Indian Authorities)

Supply and use of products

  1. In order to maintain and strengthen a price policy providing remunerative prices to the producers and stimulating local production, the food aid supplies should be priced at the same level as indigenous milk price, taking into account the cost of an efficient transformation into milk powder.

  2. In the framework of a multi-annual commitment, the EC ccntribution is defined as food aid (SMP and BO). Annual review will take place of the requirements of commodities which will result in allocation of quantities in the framework of the overall multi-annual commitment of 75,000 t of SMP and 25,000 t of butteroil. The counterpart funds will be posted in the interest-bearing EC-OF III account of IDC. This account will be debited for the financial contributions identified with the EC financing, in accordance with the financing plan. Should it happen one year that a smaller than average quantity of food aid is required to meet deficits in local supplies, the unused quantities will be transferred to the following year, except in the case where the financial obligations under the financing plan require EC fund generation. In this case, the use of financial substitution to food aid will take place and the funds be deposited in the EC-OF III account of IDC.

  3. The food aid is exclusively destined for recombination into liquid milk. Any other use will have to receive the prior approval of the Commission.
Review and Evaluation
  1. As part of the project implementation, a system of reviewing the annual programme jointly between the project authorities, the World Bank and the CEC will be followed.

  2. The Commisson will receive periodic progress reports on the implementation of Operation Flood III (starting 1 September 1987 to 31 August 1994). The adaptations to the reporting systems will be decided jointly between the project authorities, the World Bank and the CEC.

  3. Representatives of the Commission and of the Court of Auditors of the European Communities will be afforded all facilities to visit the project and have access to all documentation related to project implementation, as well as to the use of EEC financing. In particular, all documents and inputs should be made available to the EC's visiting missions.
Cofinancing Commitment
  1. The EC participation in OF III is subject to the signature of the loan agreement between India and the World Bank on the latter's participation in the project.




India Committee of the Netherlands/Landelijke India Werkgroep - 1 augustus 2003