Article 2
1. At the request of the party concerned and subject to the conditions defined in this Regulation, the Member States shall grant to any producer, as defined in the first subparagraph of Article 12 (c) of Regulation (EEC) No 857/84, or to any associated producer, where the second subparagraph of Article 12 (c) of the aforesaid Regulation is applicable, who undertakes to discontinue definitively all milk production before a date to be determined, compensation payable in five annual instalments during the las quarter of each of the following calendar years 1992, 1993, 1994, 1995 and 1996, without prejudice to the possibility for the Member States to pay the compensation on earlier dates and/or in a single payment if they ensure the pre-financing. Each Member State may, on the basis of one or several of the following criteria: - the need to encourage structural trends and changes, - the requirements of regional development in order to avoid, in particular, the desertification of certain areas, - the possibility, under market conditions in the region or regions concerned, that such a scheme will free significant reference quantities, - overriding administrative needs, decide not to implement the scheme referred to in the preceding subparagraph in one, several or all regions, as defined in the first subparagraph of Article 1 (2) of Regulation (EEC) No 857/84. In such cases, paragraph 5 of this Article shall apply. 2. (a) Eligible producers are those who have obtained a reference quantity by virtue of Article 5c of Regulation (EEC) No 804/68, in the context of either formulas A or B and/or in the context of direct sales, excluding producers who have benefited from quantities pursuant to Article 3c of Regulation (EEC) No 857/84. However, Member States: - may decide not to grant compensation to producers possessing less than six dairy cows or whose real individual available reference quantity is less than 25 000 kilograms, - shall be authorized to make the necessary provisions to ensure that the reductions in quantities effected under this Regulation are, in so far as possible, harmoniously apportioned between the regions and collecting areas. (b) Compensation shall be granted for the reference quantity available before the entry into force of this Regulation, with the exception of: - quantities suspended pursuant to Regulation (EEC) No 775/87 (7), as last amended by Regulation (EEC) No 3643/90 (8), - quantities received pursuant to Article 3 (1) and (2), Article 3a and (6) and Article 4 (1) (b) and (c) of Regulation (EEC) No 857/84, and - quantities transferred during the eighth period, (c) The compensation shall be reduced by the overall amounts paid out pursuant to Article 1, (d) In the case of agricultural leases, the request to obtain the compensation shall be submitted by the lessee. Member States shall determine the conditions under which the lessee may submit the request to obtain the compensation and the conditions under which the compensation shall be granted. 3. Subject to the additional levy scheme being extended, Community financing of the compensation referred to in paragraph 1 shall be limited to the amounts set out in the Annex. Within that limit, Member States shall be authorized to pay maximum compensation of ECU 10 per 100 kilograms and per year. Member States may: (a) pay compensation of less than ECU 10 per 100 kilograms and per year and use the balance to free additional quantities; (b) contribute to Community financing by increasing the amount of compensation. The level of the increase may be adjusted by each Member State within its territory to take account of the differing local conditions in respect of: - milk production developments, - the average level of deliveries per producer, - the need to avoid hampering the restructuring of milk production, - the existence of opportunities for converting to other productive activities, - the siting of milk production in one of the zones as defined in Article 3 (3), (4) and (5) of Council Directive 75/268/EEC of 28 April 1975 on mountain- and hill-farming and farming in certain less-favoured areas (9), as last amended by Regulation (EEC) No 797/85 (10). In the case of producers who have two reference quantities by virtue of deliveries and direct sales, the compensation shall be granted for both reference quantities. 4. Subject to the additional levy scheme being extended, the reference quantities freed pursuant to this Article shall be added to the reserve referred to in Article 5 or in Article 6 (3) of Regulation (EEC) No 857/84 to be: (a) re-allocated to the producers referred to in Article 1 of this Regulation; (b) awarded to the producers referred to in Article 3a of Regulaiton (EEC) No 857/84; (c) with regard to any remainder, awarded to priority producers determined in accordance with objective criteria by the Member State with the agreement of the Commission, in particular to small producers and producers situated in areas such as those defined in Article 3 (3), (4) and (5) of Directive 75/268/EEC. 5. Subject to the additional levy scheme being extended, in cases where the amounts set out in the Annex are not entirely used up under the scheme referred to in paragraph 1, the Member States concerned shall use the amounts remaining available for payment of compensation to the producers referred to in Article 1. This compensation, which may not exceed ECU 10 per 100 kilograms and per year, shall be paid for the portion by which the amount of individual reference quantity has been reduced in relation to the reference quantity available for the seventh period or, with regard to Portugal and the territory of the former German Democratic Republic, to the reference quantity available before the entry into force of this Regulation. Compensation shall be paid not later than during the last quarter of each of the following calendar years 1993, 1994, 1995 and 1996.