No C 88/10 Official  Journal  of the European  Communities 26. 7. 74 
CONSULTATION  OF  THE  ECONOMIC  AND  SOCIAL  COMMITTEE 
on a proposal  from  the Commission  to the  Council  concerning  the fixing  of prices  for 
certain  agricultural  products  and  certain  measures  specified  in the memorandum  on the 
improvement  of the  common  agricultural  policy 
A. REQUEST  FOR  AN  OPINION 
On 21 and  22 January  1974,  the  Council  decided  to exercise  its option  of consulting 
the Economic  and  Social  Committee  on the above  proposal. 
The request  for  an Opinion  was  sent  by the President  of the Council  to the Chairman 
of the Economic  and  Social  Committee  on 23 January  1974. 
B. TEXT  WHICH  WAS  THE  SUBJECT  OF  THE  CONSULTATION 
The text  which  was  the subject  of the consultation  was  published  in the Official  Journal 
of the European  Communities  No  C 27 of 15 March  1974. 
C. OPINION  OF  THE  ECONOMIC  AND  SOCIAL  COMMITTEE 
At its 118th  plenary  session  held  in Brussels  on 28 February  1974,  the Committee  adopted 
its Opinion  on the text  referred  to under  B by 66 votes  to 16, with  18 abstentions  out of 
100 members  present  or represented. 
The text  of the  Opinion  is as follows: 
THE  ECONOMIC  AND  SOCIAL  COMMITTEE, 
Caving  regard  to the  requests  of 22 January  1974 
Htd 25 February  1974,  by the Council  of the European 
nommunities  for  an Opinion  on the  proposal  from 
he Commission  to the  Council  concerning  the 
fixing  of prices  for  certain  agricultural  products 
and certain  measures  specified  in the  memorandum 
on the  improvement  of the  common  agricultural 
policy; 
Having  regard  to Articles  47 and  198  of the  Treaty 
establishing  the European  Economic  Community; 
Having  regard  to the decision  taken  by its Chairman 
on 1 February  1974  entrusting  the Section  for Agricul-
ture with  the preparation  of an Opinion  on the matter; 
Having  regard  to Articles  46 and  47 of the  Rules  of 
Procedure; 
Having  regard  to the  Opinions  previously  delivered 
by the Committee  on this  subject; 
Having  regard  to the  Opinion  of the  Committee  of 
27 February  1974  on the  Commission  memorandum to the  Council  of Ministers  on improvement  of the 
common  agricultural  policy; 
Having  regard  to the Opinion  delivered  by the Section 
for Agriculture  at its meeting  on 21 and  22 January 
1974; 
Flaving  regard  to the  verbal  report  submitted  by the 
rapporteur,  Mr  de Caffarelli; 
Having  regard  to the  discussions  at its 118th  plenary 
session  on 27 and  28 February  1974  (session  of 28 
February); 
Whereas  in its Opinion  on the  memorandum,  the 
Committee  stressed  that  the  views  expressed  therein 
would  have  to be amplified  very  extensively  when  it 
was consulted  on the  proposals  which  follow  on 
from  the  memorandum,  proposals  which  will  deal 
mainly  with  agricultural  prices  for  the  1974/75 
marketing  year,  with  reforms  to be made  in market 
organization  and  with  structural  policy; 
Considering  in addition,  the  detailed  studies  being 
carried  out  in respect  of the  progress  report  on the 
26. 7. 74 Official  Journal  of the  European  Communities No C 88/11 
common  agricultural  policy  and  in respect  of the 
annual  report  on the  agricultural  situation  in the 
enlarged  Community; 
Whereas  the  present  Opinion  cannot  be seen  in iso-
lation  from  the work  referred  to above; 
Considering  the  importance  to farmers  and  farm-
workers,  the  processing  industry  and  consumers  in 
the Community  of the  Commission's  price  proposals 
for agricultural  products, 
HAS  ADOPTED  THE  FOLLOWING  OPINION: 
Firstly,  the Committee  stresses  that  it received  effective 
assistance  from  the  Commission's  staff  in preparing 
the present  opinion. 
Nevertheless,  the  Committee  must,  as in previous 
years,  deplore  the fact  that  it has  been  allowed  very 
little  time  to study  these  proposals,  which  should  have 
been  dealt  with  in greater  depth. 
For instance,  it would  have  been  desirable  to take 
advantage  of this  opportunity  to review  action  taken 
on the  comments  and  requests  which  were  made  in 
the Committee's  Opinion  of March  1973  on the same 
subject.  But  there  has  not  been  enough  time. 
Given  the  current  overall  economic  and  social  situ-
ation,  it would  have  been  useful  to study  how  the 
Commission  proposals  will  effect  not only  agriculture, 
farmers  and  farmworkers,  but  also  the development 
of the  Community  as a whole. 
PRELIMINARY  COMMENTS 
Firstly,  the  present  Opinion  will  place  the  Com" 
mission's  proposal  in the overall  economic  and  social 
context  by means  of a number  of preliminary  com-
ments. 
-— 1973  has  been  a year  of change  on  commodity 
markets. 
Up to last  year,  prices  within  the Community  for the 
main  agricultural  products  were  sometimes  decidedly 
higher  than  those  on the  world  market.  This  was 
attributable  to surpluses,  and  to dumping  by certain 
exporting  countries  on the  world  market. Most  agricultural  markets,  which  are also  commodity 
markets,  are  currently  suffering  from  shortages  and 
high  prices  and  there  is no reason  to believe  that  any 
rapid  change  will  take  place  to this  state  of affairs. 
Annexed  to this  opinion  is a table  showing  certain 
price  trends  in 1973  and  percentage  increases  over 
1972  prices.  This  table  includes  agricultural  products 
which  are  covered  by Community  regulations  and 
therefore  shielded  from  changes  in world  prices. 
However,  rice,  whose  price  increased  by approxi-
mately  200%  between  December  1972  and  December 
1973,  should  be added. 
It can  be seen  that  some  EEC  agricultural  prices  are 
currently  lower  than  ruling  world  prices  for  the 
same  products. 
Other  agricultural  prices  also  appear  on this  table. 
Since  there  is no common  organization  of the markets 
in these  products,  price  rises  on the  world  market 
have  an impact  on their  prices  in the Community. 
For example,  the price  of wool  on the  world  market 
has doubled  in two  years.  Another  instance  is timber, 
which  became  considerably  more  expensive  in 1973 
after  20 years  of stagnation. 
This  finding  led the  Finance  Ministers  of the  Nine, 
meeting  on 4 December  1973,  to point  out  in point 
VI of their  declaration  that  'the  implementation  of the 
machinery  of the  common  agricultural  policy  . .. 
helps  to shield  the consumer  against  appreciable  price 
increases  on the  world  market  for a large  number  of 
products,  such  as cereals,  including  rice  and  sugar'. 
It is normal  for  the  internal  Community  market  to 
be shielded  against  world  inflation  by machinery 
which  — from  1967  to the present  day  — has protected 
the prices  paid  to Community  farmers. 
— Inflation  worsened  in 1973 
In connection  with  this,  the Opinion  of the Economic 
and Social  Committee  on  the  memorandum  on 
improvement  of  the  common  agricultural  policy 
states  that  'this  inflationary  climate  engenders  increases 
in the prices  of means  of production,  increases  which 
farmers  feel  — with  justification  — should  be in-
corporated  in the prices  of their  products'. 
Moreover,  the  Commission's  summary  of the  report 
on the  agricultural  situation  in the  enlarged  Com-
munity  states  that  'it is feared  that  inflation  will  lose 
none  of its acuteness  (in 1974)'. 
No C 88/12 Official  Journal  of the European  Communities 26. 7. 74 
— 1973  is the first  year  in which  the  enlargement  of 
the Community  has  had  practical  effects  on the 
production  costs  of agricultural  products  in the 
new Member  States. 
As a result  of closer  price  alignment,  the  beginning 
of the  transitional  period  has  entailed  price  rises. 
These  rises  have  been  combined  with  the  general 
upward  trend  recorded  in all the  Member  States. 
— 1973  was  marked  by  increased  disarray  of  the 
international  monetary  system 
The planned  transition  to the second  stage  of econo-
mic and  monetary  union  on 1 January  1974  has  been 
rendered  impossible  and,  as  the  memorandum 
emphasizes,  this  lack  of  an  internally  consistent 
economic  and  monetary  policy  is also  harming 
agriculture. 
In addition,  the  fact  that  monetary  upheavals  are 
continuing  to worsen  brings  real  pressure  to bear  — 
for manifold  reasons  —•  on agricultural  prices,  and 
excessively  complicates  the  administrative  machinery 
for the regulation  of trade,  with  all the adverse  effects 
this can  have  on the  sound  development  of trade. 
The operation  of the  common  agricultural  market  is 
very  considerably  handicapped  by  the  absence  of 
economic  and  monetary  union. 
The Committee  feels  it should  stress  that,  owing  to 
increased  commodity  and  energy  prices,  one  of the 
main  difficulties  which  will  face  the  economies  of 
certain  Member  States  in 1974  will  be the  problem 
of keeping  their  balances  of payments  in equilibrium. 
For its part,  agriculture  assists  to a certain  extent 
in resolving  this  problem  — exports  of agricultural 
products  affect  the balance  of payments. 
These  few  preliminary  comments  should  be coupled 
with  a number  of  points  on  farmers,  fannworkers 
and consumers,  in  order  to round  off  the  overall 
context  of the  Commission's  proposal. 
Farmers  and  farmworkers 
As the  Commission  points  out  'a price  and  market 
policy  continues  to be the  main  instrument  of agri-
cultural  incomes  policy'. 
It is clear  that  the  selling  price  of the  products  of 
any entrepreneur  plays  a decisive  role  in determining 
the financial  results  of his  undertaking  and,  con-sequently,  his  income  and  standard  of living.  It is 
well to reiterate  that  several  million  farming  families 
are aware  that  their  standard  of living  in 1974  and 
1975  depends  in part  on the price-setting  and  associa-
ted measures  which  are  dealt  with  in this  opinion. 
These  decisions  also  affect  all the other  social  and 
occupational  groups  — industrialists,  dealers,  craft 
workers,  farmworkers  and  wage-earners  in other 
sectors  of the  economy  — for  subsistence  farming 
has disappeared.  Intermediate  consumption  by farmers 
is increasing  every  year  and,  consequently,  a large 
number  of jobs  depend  indirectly  on agriculture.  The 
standard  of living  of a good  many  non-farming 
families  thus  hinges  to a certain  extent  on the incomes 
of farmers  and  farmworkers. 
The Committee  notes  that  as far  as assessing  the 
trend  of  farmers'  and  farmworkers'  incomes  is 
concerned,  there  are  no  documents  available  pro-
viding  reliable  scientific  facts,  although  the  report  on 
the agricultural  situation  did  supply  data  on income 
increases  from  1968  to 1972,  and  particularly  in 1972. 
The Committee  points  out  that  farm  incomes  have 
of course  increased  in past  years,  and  particularly 
markedly  in 1972,  but  when  assessing  the  situation 
it is essential  to allow  for  the  fact  that  there  is still 
a certain  need  for  agriculture  to catch  up,  given  the 
income-parity  objective. 
However,  sufficient  account  is not  taken  of farm 
investment  needs,  and  it does  not  seem  possible  to 
catch  up here,  in view  of the  present  interest  rates  on 
loans. 
The Committee  notes  that  no  effective  provisions 
have  been  made  to ensure  that  the  increased  income 
arising  from  price  guarantees  is shared  by all sections 
of the  agricultural  community.  However,  the  Com-
mittee  has  recommended  that  a study  should  be 
undertaken  in this  field. 
1972  was  a particularly  good  year,  but  this  is less 
true of 1973. 
Lastly,  it is worth  restating  — as the  Committee's 
Opinion  on the memorandum  stresses  — 'the  need  to 
pursue  the  grand  design  sketched  by the  Treaty  of 
Rome,  namely  integration  of a modern  agriculture 
in a modern  economy  at EEC  level'. 
Community  agriculture  certainly  cannot  be modern-
ized unless  suitable  measures  are  implemented, 
measures  which  have  already  been  the  subject  of 
26. 7. 74 Official  Journal  of the European  Communities No C 88/13 
Council  directives  and  which  will  have  to be sup-
plemented  promptly  by measures  on market  structures. 
However,  farmers,  confronted  with  high  interest 
rates  and  increasing  building-material  prices,  will  only 
be in a position  to cope  with  the  financial  burden 
entailed  by modernization  of any  sort  if their  selling 
prices  are  high  enough. 
Consumers 
The Committee  stressed  in its Opinion  on the  memo-
randum  that  'it is clear  that  the  present  inflationary 
climate  makes  public  opinion,  and  especially  the 
most  deprived  sections  of the  population,  highly 
sensitive  to any  significant  increase  in the  prices  of 
agricultural  and  food  products'. 
The relative  importance  of food  has  decreased  in 
household  budgets,  but  this  statement  is not  so valid 
for households  with  a low  standard  of living. 
However,  it is true  to say that  farmgate  prices  represent 
a constantly  decreasing  fraction  of the  amount  the 
consumer  pays  for  food.  Services  as a whole,  taxes, 
etc. sometimes  account  for  a greater  proportion  of 
the end  price  paid  by the  consumer  for  agricultural 
products. 
On the  other  hand,  nobody  could  deny  that  agricul-
tural  products  such  as beef  and  veal  account  for  an 
important  proportion  of family  food  budgets.  Further-
more,  consumption  of beef  and  veal  goes  down 
whenever  purchasing  power  is reduced  by economic 
difficulties.  Here  again,  the  poorest  consumers  are 
the first  to suffer. 
The Commission  states  that  'in the  current  market 
situation  these  proposals  (the  Commission's)  will 
have  only  a limited  impact  on  consumer  prices'. 
Furthermore,  it should  be pointed  out  that  the prices 
proposed  by the  Commission  are  administrative  in 
nature  and  not  market  prices.  They  do  not  have 
automatic  repercussions  on  retail  prices  paid  by 
consumers. 
As can  be seen,  this  is all very  complicated;  it is a 
pity that  no action  was  taken  on the  request  that  the 
Committee  made  in its opinion  on  the  fixing  of 
agricultural  prices  for  the  1973/74  marketing  year, 
viz.: 
'The  Committee  also  asks  the  Commission  to 
carry  out  an invistigation  into  the  relationship 
between  the common  agricultural  policy  and  food 
prices  paid  by the consumer'. 
The Committee  added: 'This  investigation  ought  to be carried  out  as 
soon  as possible'. 
The Committee  strongly  reiterates  this  request  and 
stresses  the  need  to investigate,  in particular,  the 
scope  for  direct  subsidies  to certain  categories  of 
consumers  in order  to put  the  prices  they  pay  more 
on a par  with  their  buying  power.  It states  that,  for 
its part,  it is willing  to play  an active  part  in drawing 
up such  a study. 
COMMENTS  ON  THE  COMMISSION  PROPOSAL 
In making  its proposals,  the  Commission  says  that 
it has  followed  the  arguments  put  forward  in its 
memorandum,  whilst  taking  into  account  the relevant 
debates  which  have  taken  place,  particularly  in the 
Council,  the  European  Parliament  and  the  Economic 
and Social  Committee. 
The Economic  and  Social  Committee  points  out  that 
it delivered  an opinion  in favour  of the  proposals, 
although  hedged  with  numerous  comments,  on 27 
February  1974. 
It also  stresses  that  the improvement  programme  is to 
take  effect  between  1973  and  1978.  Whilst  for  some 
matters  the  Commission  does  in fact  stipulate  a 
gradual  process  of improvement,  it does  not  seem  to 
have  made  provisions  for this  in all its proposals. 
The method  used  by  the  Commission  —  which 
consists  of basing  its price  proposal  on the  concept 
of modern  farms  as defined  in Council  Directive 
No 72/159/EEC  — has  already  been  endorsed  by 
the Economic  and  Social  Committee. 
However,  the  Committee  points  out  that  as these 
farms  are still  too small  a percentage  of EEC  holdings 
as a whole,  and  as their  number  varies  between  pro-
duction  sectors  and  regions,  combined  implemen-
tation  of directive  which  can  enable  the  maximum 
number  of farms  to achieve  this  status  as swiftly  as 
possible  is vital.  It must  nevertheless  be borne  in 
mind  that  this  is a slow  process. 
This  is why  the  Committee  considers  that  direct 
personal  aids  — dependant  neither  on production 
levels  nor  on use  of production  factors  — should  be 
introduced  and  granted  within  clear-cut  limits 
determined  on a basis  of regional  situations  and  the 
age of the  beneficiaries. 
No C 88/14 Official  Journal  of the European  Communities 26. 7. 74 
The Committee  points  out that  the objective  pursued 
by the calculation  method  used  by the Commission 
is to give  modern  farms  working  incomes  comparable 
to non-agricultural  working  incomes  in any  given 
region,  with  due  regard  to a satisfactory  return  on 
invested  capital  and  trends  in the prices  of the means 
of production  and  in productivity. 
The Commission  considers  that  the  probable  cost 
trend  for the year  to come  can  be calculated  from  the 
average  percentage  change  in production  costs  over 
the four  previous  years. 
In this  connection  the Committee  points  out that  the 
price  increases  proposed  by the  Commission  will 
have  to offset  production  cost  increases  until  1 April 
1975  and,  for certain  products,  until  1 July  1975. 
The Commission  believes  that,  bearing  in mind  a 
satisfactory  return  on invested  capital  and  trends  in 
the prices  of the means  of production  and  in produc-
tivity,  the level  of prices  should  rise  on average  by 
7-2%  in 1974/75,  in order  to enable  modern  farms  — 
on the basis  of the target  prices  — to keep  pace  with 
the general  progress  of non-agricultural  earned 
incomes. 
However,  the  Committee  notes  that  in 1973  cost 
increases  were  exceptionally  high  by comparison  with 
those  of previous  years.  It also  considers  that  it is 
impossible  to make  a precise  forecast  of price  and 
cost rises  for  1974/75.  Nevertheless,  all the  signs 
indicate  that  no real  levelling  out  of inflationary 
trends  can  be expected  in the  immediate  future.  In 
fact the very  opposite  is to be feared. 
Without  calling  the  method  into  question,  account 
should  be taken  of the present  special  situation  which 
calls,  as an exception,  for the introduction  of a cor-
rective;  for example,  the introduction  of a corrective 
factor  giving  greater  weight  to the last  reference  year 
would  bring  the average  over  the four  years  more  in 
line with  present  day  reality. 
The Committee  supports  the  Commission's  stated 
intention  of establishing  a better  price  relationship 
between  agricultural  products.  It finds  that  the 
Commission's  proposals  are in line  with  this  intention, 
but points  out that  the relationship  between  common 
prices  is not  necessarily  reflected  as market  price 
level.  However,  a better  relationship  between  prices 
is in fact  a long-term  aim  for producers. REMARKS  ON  PRODUCTS 
The Committee  points  out  that  the  practice  of con-
sulting  the Economic  and  Social  Committee  urgently 
on all  proposed  agricultural  prices  prevents  the 
representatives  of the business  and  social  groups  from 
carrying  out  a study  allowing  a sufficiently  detailed 
opinion. 
As a result,  it asks  the  Commission  to try to find 
more  suitable  procedures. 
The Committee  reiterates  the remarks  already  made 
in its Opinion  on the  memorandum  and  adds  the 
following  comments: 
Cereals 
The Committee  notes  that  in its proposal  the Com-
mission  adopts  the  same  approach  as in previous 
years,  and  seeks  a new  relationship  between  the 
prices  of the various  grains.  Without  challenging  this 
approach,  the Committee  points  out  that  because  of 
the links  between  feed  grains  and livestock  production, 
the proposal  will  have  an impact  on the production 
costs  of the latter. 
The Commission  also  proposes  technical  changes  to 
the present  system  in order  to increase  the flexibility 
of market  management.  (For  example  the  recent 
discontinuing  of the  denaturing  of wheat,  putting 
back  the  date  for  the  beginning  of the  marketing 
year for  maize  and  end-of-year  compensation  not 
to be mandatory  any  more,  a single  intervention 
price  for barley). 
Because  of these  proposed  technical  measures  to gain 
more  flexibility,  income  trends  for  certain  farmers 
will depend  on market  management  more  than  they 
have  in the past. 
Under  these  circumstances,  the Committee  considers 
that it is essential  for  occupational  groups  and 
producers,  especially  the  latter,  to be involved  in 
market  management. 
26. 7. 74 Official  Journal  of the European  Communities No C 88/15 
The Committee  also  notes  a new  departure  in the 
Commission's  latest  proposals  — the discontinuance 
of the  direct  incentives  to quality  production  which 
previously  existed.  It wonders  whether  these  proposals 
are well-founded,  and  what  consequences  they  would 
have  for the producer  (malting  barley,  durum  wheat, 
rye of bread-making  quality,  quality  wheat). 
The proposals  on durum  wheat  also  call  for  the 
following  remarks  from  the Committee: 
The discontinuance  of production  price  supplements 
will penalize,  in particular,  small  farmers  who  use 
their  durum  wheat  themselves. 
These  producers,  almost  all of them  to be found  in 
one of the  poorest  regions  of the  EEC,  will  not  be 
granted  this  aid by the hill  farming  directive,  which 
does  not  include  assistance  for durum  wheat. 
The Committee  has  found  that  as a result  the  cost 
of price  supplements  may  be transferred  from  the 
Guarantee  Section  of the  EAGGF  to the  Italian 
consumer,  and  especially  the consumer  in the Mezzo-
giorno. 
If it proves  impossible  to resolve  these  undoubted 
difficulties  satisfactorily,  the Committee  feels  that  it 
would  be preferable  to keep  the  system  as it is at 
present.  In this  case,  an improvement  of controls 
would  be needed. 
The Committee  would  like  to take  the opportunity 
to reiterate  the need  to implement  the directives  which 
can improve  the situation  for  producers  in difficult 
regions  (hill  and  mountain  regions  and  problem 
areas). 
Dairy  products 
Due to past  difficulties  in the butter  sector  and  the 
danger  of future  surpluses,  the Commission  proposes 
that once  300  000 metric  tons  of butter  have  been 
bought  in by intervention  agencies,  a production  levy 
should  be imposed  on all producers.  In addition,  a 
levy should  be imposed  on dairies  selling  more  than 
15%  of their  output  to intervention  agencies. 
The Committee  feels  that  this  proposal  calls  for 
several  remarks. 
The Economic  and  Social  Committee  has  already 
accepted  the  possibility  of financial  contributions 
from  producers,  but  within  a clearly  defined  frame-work;  'structural  surpluses,  farm  income  policy, 
indicative  output  programme  for the  products  con-
cerned'  (Opinion  No CES  685/69). 
The question  of butter  surpluses  cannot  be treated 
in isolation  from  the  general  question  of vegetable 
fats and  oils,  three  million  metric  tons  of which  are 
imported  annually  by the EEC. 
Under  these  circumstances  the  Committee  wonders 
whether  a lower  price  of butter  can  be justified  given 
the present  situation  of general  increases  in the 
prices  of vegetable  fats  and  oils.  In actual  fact,  main-
taining  the butter  price  at its present  level  amounts 
to a decline  in price.  The  Committee  also  wonders 
whether  the change  in the fat/protein  ratio  could  not 
be effected  at a slower  rate  than  that  suggested  by 
the Commission,  so as, among  other  tilings,  not  to 
raise  the  price  of basically  protein  products  (cheese, 
fresh  products)  too  abruptly. 
In addition,  the  Committee  asks  for  the  measures 
for reducing  the consumer  price  of butter  to be made 
mandatory  in all the Member  States. 
With  regard  to the  more  specific  point  of financial 
contributions  from  producers,  the Committee  points 
out that  in its Opinion  on the memorandum  it won-
dered  'whether  such  a contribution  from  producers 
tallies  with  the  present  overall  situation  in the  fats 
and oils  sector  of the  European  Community'.  The 
Committee  confirms  this  position. 
At all events  it has  reservations  about  the threshold 
at which  the levy  will  be triggered.  In addition,  it lays 
stress  on the complex  problems  that  would  be thrown 
up by the  application  of the  charge  to holdings 
delivering  more  than  15%  of their  own  output  to 
intervention  agencies,  since  there  is a possibility  of 
penalizing  producers  from  regions  which  are furthest 
away  from  centres  of consumption  and  also  of 
disrupting  the  liquid  milk  market  as well  as all the 
present  trading  flows. 
Apart  from  these  reservations,  arrangements  proposed 
for the consultation  of representatives  of the farming 
community  are far from  adequate. 
Whether  producers  make  a financial  contribution  or 
not, the Committee  requests  that  farming  community 
representatives  be involved  in market  management. 
The other  changes  in the organization  of the market 
are also  sufficient  justification  for this  demand. 
The Committee  wonders  whether  a Community 
inter-trade  organization  might  not facilitate  the organ-
ization  of the market  and  thus  further  the aim  of the 
Commission.  This  point  should  be gone  into. 
No C 88/16 Official  Journal  of the European  Communities 26. 7. 74 
On the  question  of differing  prices  for milk  powder 
which  penalize  producers  in Member  States  which 
have  revalued  their  currencies,  the Committee  deplores 
the consequences  of monetary  manipulation  and  the 
effect  this has on the incomes  of a given  occupational 
group. 
The Committee  requests  that  this  measure  be abol-
ished. 
As regards  the question  of processing,  the Committee 
considers  that  the  Commission  should  take  into 
account  the substantial  increase  in costs.  Raising  the 
flat-rate  processing  margins  appears  to be necessary 
if producers  are  to be assured  of receiving  from 
enterprises  the prices  fixed  for the marketing  year. 
Beef and  veal 
The Commission  proposes  that  the  Regulation 
should  be changed  fundamentally  by introducing  a 
single  import  charge  fixed  ad valorem  for  all cuts. 
Fixing  this  charge  ad valorem  seems  unwise  in view 
of the  increased  fluctuations  that  this  is liable  to 
cause  for both  farmers  and  consumers. 
The establishment  of this  single  basic  levy  and  riiles 
for its application,  such  as discontinuance  of the 
guide  price  for veal,  prompts  the Committee  to state 
that the  income  of veal  and  beef  producers,  which 
the Commission  would  like  to see improved,  is going 
to be more  and  more  dependent  on the effectiveness 
of day-to-day  market  management. 
It must  be remembered  that  this  change  entails  the 
fixing  of basic  levies  by the  Council  itself.  Apart 
from  the delay  this  may  cause,  there  is a danger  of 
this levy  fixing  being  influenced  by short-term  con-
siderations  so that  decisions  on producers'  incomes 
will,  through  market  management,  become  'political' 
issues. 
The Committee  therefore  underlines  the  need  to 
involve  producers  in market  management. 
However,  the  Committee  finds  that  at the  present 
time  farmers  are  disenchanted  with  beef  and  veal 
production,  because  they  have  lost  confidence  in its 
profitability. 
In the  medium  term  the  resultant  cutback  in pro-
duction  may  cause  an increase  in consumer  prices 
and increase  balance  of payments  deficits. An adequate  increase  in producer  prices  would  make 
it possible  for this  situation  to be avoided,  and  would 
serve  the  real  long-term  interests  of Community 
consumers. 
However,  the  Committee  is worried  about  possible 
reduction  in consumers'  purchasing  power.  It there-
fore recommends  that  the  Commission  investigate 
new specific  aids  to livestock  farmers  specializing  in 
beef and  veal  production.  This  study  — justified  by 
forecasts  of a Community  shortfall  of 850  000 metric 
tons of meat  in 1980  — should  be made  in conjunction 
with  producers  and  consumers. 
Since  it considers  that  the  Council's  measures  to 
encourage  beef  and  veal  production  do not  appear 
to be having  any  great  measure  of success  in the 
Member  States,  the Committee  also  wonders  whether 
the criteria  for  granting  incentives  should  not  be 
made  more  flexible  — small  farmers,  in particular, 
not being  excluded. 
Olive  oil 
The Commission  proposes  an important  change  to the 
present  Regulation.  The  present  practice  of fixing 
aid to the producer  in advance  is to be discontinued 
and replaced  by an aid fixed  retroactively  and  equal 
to the  difference  between  the  target  price  and  the 
average  market  price. 
The Committee  points  out  that  the  change  in the 
fixing  of the  amount  of aid  does  not  remove  the 
guarantee  to the commercial  producer.  On the other 
hand  it penalizes  small  producers  who  use  their 
output  themselves,  especially  in the  South  of Italy, 
in other  words,  in a very  poor  region  where  olive  oil 
accounts  for  36%  of agricultural  output. 
Apart  from  the administrative  difficulties  which  will 
ensue,  the proposed  change  has  two  disadvantages: 
— at present,  the Community  imports  100  000 metric 
tons of olive  oil every  year.  If retroactive  aid is 
brought  in, will  producers  not  be discouraged  by 
the uncertainty  they  will  feel  in respect  of their 
incomes?  In the  long  run,  is there  not  a danger 
that the Community  will  be increasingly  dependent 
on external  sources  ? 
— at the present  time  direct  aid to the producer  acts 
as a consumer  subsidy;  is there  not  a danger  of 
consumption  falling,  if it is discontinued  in its 
26. 7. 74 Official  Journal  of the European  Communities No C 88/17 
present  form  ? As it happens,  world  market  prices 
are considerably  above  the  current  Community 
level. 
The Committee  feels  that  if it is not  possible  to find 
satisfactory  solutions  to these  difficulties,  the present 
system  should  be maintained.  There  would  then  have 
to be more  effective  control,  for example  by random 
checks  right  down  to the  level  of the  individual 
holding. 
Protein 
The Committee  stresses  the  justification  of the 
Commission  proposals  to extend  to soya  beans  the 
support  at present  given  to colza  and  sunflower.  It 
also emphasizes  that  for  the  first  time  dried  lucerne 
and beans  are  considered  relevant  to Community 
self-sufficiency  in proteins. 
Wme,  fruit  and  vegetables 
As regards  the  problems  raised  by the  protection  of 
producers'  incomes  in the  wine  sector  and  the  fresh 
and preserved  fruit  and  vegetables  sector,  the  Com-
mittee  points  out  that  this  question  is linked  fairly 
closely  to establishment  of a policy  on trade  relations 
with  the  Mediterranean  countries.  It considers  that 
in this  field  the  machinery  for  protection,  notably 
for processed  fruits  and  vegetables,  must  be strength-
ened  (by  means  of a specific  regulation).  The  Com-
mittee  also  thinks  it essential  that  the reference  price 
machinery  for  these  products,  which  determines  the 
level  of protection,  should  work  satisfactorily. 
As regards  wine  in particular,  the  Committee  is of 
the opinion  that  the  Commission  proposal  set  out 
in the memorandum,  and  dealing  with  the possibility 
of distillation  at the  beginning  of the marketing  year, 
is only  of interest  if the purchase  price  is at a reason-
able level. Sugar 
The Committee  stresses  the need  for an overall  study 
on this  product,  for  it is impossible  to isolate  the 
Commission  proposals  from  the  negotiations  now 
taking  place  at international  level.  The  Committee 
therefore  urges  that  this  study  be begun  immediately 
in conjunction  with  appropriate  representatives  of 
the farming  community  representatives  and  consumers. 
Other  products 
Particularly  in the  case  of products  for  which  the 
cost of manpower  is particularly  high,  the  average 
rise proposed  is insufficient  (flax,  hemp,  tobacco, 
silkworm,  cotton).  This  is especially  true  since 
increases  in these  products'  prices  over  the  last 
marketing  year  were  small. 
In conclusion  the Committee  feels  it ought  to empha-
size just  how  much  it has  felt  obliged,  in its attempt 
to make  valid  judgements  of the Commission  propo-
sals,  to refer  in each  section  of its Opinion  to general 
economic  and  social  policy  or to the need  to implement 
specific  common  policies  in other  fields. 
Like  the  Commission,  the  Committee  declares  that 
the absence  or inadequacies  of such  policies  are  a 
major  obstacle  to full  implementation  of the common 
agricultural  policy  in line  with  the  objectives  set out 
in Article  39 of the  Treaty  establishing  the  EEC. 
What  is more,  they  are likely  to jeopardize  European 
integration  as a whole. 
Done  at Brussels,  28 February  1974. 
The Chairman 
of the Economic  and  Social  Committee 
Alfons  LAPPAS 
No C 88/18 Official  Journal  of the European  Communities 26. 7. 74 
PRICE  TREND  IN 1973 
Price  at end 
1972 Highest 
n 1973 Lowest 
in 1973 Price  on 
27 December 
1973 1973  - 1972 
difference! 
(%) 
"Wheat,  Chicago,  hard  winter  (US  cents  per 60 lb) 259-50 536-50 228 3/8 507-00 + 95  4 
Maize,  Chicago,  yellow  (US  cents  per 56 lb) 151-75 327-75 159 1/8 267-00 + 75-9 
Cocoa,  New  York,  (US  cents  per lb) 32-35 82-90 32-83 56-30 + 74-0 
Sugar,  New  York,  world  contract  (US  cents  per lb) 9-79 13-04 8-50 13-04 + 33-2 
Coffee,  New  York,  average  ICO  price  (US  cents 
per lb) 55-55 65-79 57-38 65-79 + 18-4 
Cotton,  Liverpool,  index  A, cif (US  cents  per lb) 38-08 88-40 39-24 86-15 + 126-2 
Wool,  London,  wooltops  64s (pence  per kg) 223-00 360-00 227-00 287-00 + 28-7 
Rubber,  London,  RSS  No 1 (pence  per kg) 21-00 54-00 22-20 54-00 + 157-1 
Soyabean  oil,  Rotterdam,  any  origin,  ex-tank 
(US dollars  per ton) 249-00 620-00 238-00 620-00 + 149  0 
Copper  London,  LME,  wirebars,  three  months 
(£ per ton) 462-00 887-00 496-00 846-00 + 83-1 
Tin, London,  LME,  three  months  {£ per ton) 1 620-00 2 720-00 1 614-00 2 590-00 + 59-9 
Zinc,  London,  LME,  three  months  (£ per ton) 165-00 769-00 169-50 565-00 + 242-4 
Lead,  London,  LME,  three  months  (£ per ton) 131-75 274-00 136-25 252-00 + 91-3 
Silver,  London,  three  months  (pence  per troy  ounce) 88-40 145-10 84-60 145-10 + 64-1 
Oil, Rotterdam,  heavy  fuel  oil, 3-5%  fob  (US  dol-
lars per ton) 14-57 130-00 15-00 130-00 + 792-2 
Source  of information:  Weekly  Bulletin  No 1 of 4 January  1974  'Kredietbank'. 
ANNEX 
to the Opinion  of the  Economic  and  Social  Committee 
Rejected  amendment: 
The following  amendment,  proposed  in accordance  with  the Committee's  Rules  of Procedure, 
was rejected  during  the discussions. 
Paragraph  A, on sugar: 
The first  sentence  to read  as follows: 
'The  Committee  notes  the small  price  increase  proposed  for sugar  beet  and  stresses  the need 
for an overall  study  on sugar  production.' 
Outcome  of the  voting: 
Votes  in favour:  31. 
Votes  against:  35. 
Abstentions:  18. 
26. 7. 74 Official  Journal  of the European  Communities No C 88/19 
Deleted  text  relating  to the 12th  and  13th  paragraphs  of the  Chapter  'Comments  on the Com-
mission  proposals': 
'However,  the  Committee  notes  that  in 1973  costs  increases  were  exceptionally  high  by 
comparison  with  those  of previous  years.  Therefore,  by scrupulously  applying  the Commis-
sion's  calculation  method,  but  using  a more  recent  reference  period,  a quite  different  result 
would  be obtained.  By way  of illustration,  on the basis  of cost  increases  in 1973,  and  taking 
account  of the productivity  factor,  agricultural  prices  would  have  to rise  more  than  12 % to 
achieve  the Commission's  objective.' 
Outcome  of the voting: 
A large  majority  voted  for deletion  of the text. 
Nevertheless  the Committee  is of the opinion  that  it would  be wrong  to make  a premature  forecast 
of price  and  cost  rises  in 1974/75. 
CONSULTATION  OF  THE  ECONOMIC  AND  SOCIAL  COMMITTEE 
on a proposal  for a Council  Regulation  on the control  of concentrations  between 
undertakings 
On 20 September  1973,  the Council  decided  to exercise  its option  of consulting  the Econo-
mic and  Social  Committee  on the above  proposal  for a Regulation. 
The request  for an Opinion  was  sent  by the President  of the Council  to the Chairman  of 
the Economic  and  Social  Committee  on 24 September  1973. 
B. TEXT  WHICH  WAS  THE  SUBJECT  OF  THE  CONSULTATION 
The text  which  was  the subject  of the consultation  was  published  in the Official  Journal 
of the European  Communities  No  C 92 of 31 October  1973,  pages  1 to 7. 
C. OPINION  OF  THE  ECONOMIC  AND  SOCIAL  COMMITTEE 
At its 118th  plenary  session  held  in Brussels  on 28 February  1974,  the Committee  adopted 
its Opinion  on the text  referred  to under  B, by 74 votes  to 15, with  25 abstentions  out of 
114 members  present  or represented. 
The text  of the Opinion  is as follows: A. REQUEST  FOR  AN  OPINION 
THE  ECONOMIC  AND  SOCIAL  COMMITTEE, Having  regard  to the  decision  of the  Bureau  of the 
Economic  and  Social  Committee  on 26 September 
1973  entrusting  the Section  for Industry,  Commerce, 
Crafts  and Services  with  the preparation  of an Opinion; Having  regard  to the  request  of the  Council  of the 
European  Communities  on 24 September  1973  for 
the delivery  of an optional  Opinion  on the proposal 
for a Council  Regulation  on the  control  of con-
centrations  between  undertakings; Having  regard  to the report  prepared  by Mr Clark, 
rapporteur,  and  Mr Friedrichs,  co-rapporteur; 
Having  regard  to the  second  sentence  of the  first 
paragraph  of Article  198  of the  Treaty  establishing 
the European  Economic  Community; Having  regard  to its information  report  of 3 September 
1973  on the phenomena  of concentration  (rapporteur, 
Mr de Grave)  (Doc.  CES  773/71  fin.);