Brussels, 06/02/2003 (Agence Europe) - The Commission has decided to initiate a formal investigation into the support for machinery rings in Bavaria. The aid consists of direct grants. The aid intensity was 42% of the operating costs in 2001 and will be reduced to 33% in 2005. The maximum amount of aid was €4.38 million in 2001 and will be reduced to €3.46 million in 2005. The aid is being paid to "Kuratorium Bayerischer Maschinen- und Betriebshilferinge e.V." (KBM) and groups together 87 machinery rings. Machinery rings are farmers' self-help organisations operating at local or regional level. These rings organise exchanges of farm workers and co-ordinate the sharing of machinery among holdings. Some machinery rings also provide communal services such as snow clearing, road building/repairs, wastewater treatment plant construction as well as garden/landscape maintenance and the construction of sports facilities. The machinery rings obtain grants from the KBM towards their material and personnel costs and are financed, on the one hand, with these grants and, on the other, with farmers' membership fees. The Commission takes note that the aid meets the conditions for state aid in the agriculture sector, insofar as its provides social aid to farms. However, the measure also seems to contain other aid elements that could be considered as incompatible with the common market. The Commission has also received complaints that machinery rings have set up subsidiaries, which have used the subsidies to set up in construction activities, trade in goods or running repair shops for agricultural machinery, thus competing with other undertakings. The Commission's investigation will attempt to delineate the rings' core tasks, which are eligible for subsidies, as well as other economic activities, in order to establish what activities are subsidised by these funds (the so-called "cross-subsidisation"). The Commission will endeavour to conclude its examination within 18 months, after receiving Germany's response, and comments by interested parties, within one month of the date of publication in the Official Journal of the decision.