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Vol. 19 83/0190 
  
 
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COMMISSION OF THE EUROPEAN COMMUNITIES
COM(83) 500 final
Brussels, 28th July 1983
COMMON AGRICULTURAL POLICY - PROPOSALS OF THE COMMISSION
(Communication from the Commission to the Council)
C0MC83) 500 final

COMMON AGRICULTURAL POLICY :  PROPOSALS OP THE COMMISSION
Communication of the Commission to the Council
Contents Page
1. Introduction 1
2. The General Context 3
3· Rationalisation of the Market Organisations 8
4· Guidelines for the Principal Sectors 14
A.Milk 17
B.Cereals and Rice 23
C.Beef 26
D.Sheepmeat 29
E.Fruit and Vegetables 30
F.Oilseeds 32
G.Olive Oil 33
H.Tax on Oils and Fats 34
I.Tobacco 35
J.Wine 36
5. Monetary Compensatory Amounts 38
6. Complementary Measures 40
7. Financial Guidelines 44
8. Conclusion 47
Annexes
I. Extract from Declaration adopted by the European Council
II. Development of expenditure from the Guarantee Section of the  
EAGGF
III. Description of market sectors.
IV. Aids under the Common Agricultural Policy - Guarantee Section  
of the EAGGF.

COMMON AGRICULTURAL POLICY :  PROPOSALS OP THE COMMISSION
Communication of the Commission to the Council
INTRODUCTION
1.1 The Common Agricultural Policy constitutes one of the major achievements  
of the Community. In this domain, to a greater degree than in most  
others, competence for the execution of the common policy lies with the  
Community institutions, in accordance with the objectives of Article 39  
of the EEC Treaty; and since a common policy implies common financial  
responsibility, its cost is borne to a large extent by the Community  
budget.
1.2 Agriculture plays an important role both in supplying food and in  
promoting development in poor and rich countries alike. The common  
agricultural policy has had considerable success. But Europe must adapt  
its agricultural policy. The adjustment of regulations adopted after  
difficult political compromises will require a firm political will. It  
will demand difficult decisions on the part of all the Community  
institutions, and an acceptance on the part of all the social and  
professional groups involved. The adaptation of the CAP is not a  
technical affair, but a political challenge. Europe is entitled to  
demand the necessary efforts of its rural Community and its food  
industry, provided that it offers them a well-defined and stable  
framework for their development. Moreover, the adaptation can be  
successfully accomplished only if the charge is distributed equitably  
between the different Member States, the different market organizations,  
and in general between the various interested parties.
1.3 It is normal that, in view of the future development of the Community,  
the agricultural policy should be examined and adapted, so that it can  
adequately fulfil its aims in the changed conditions now prevailing.
The agricultural policy, like other policies, must respond to the need  
for the most efficient use of the Community's financial resources.

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2.4 In these difficult economic conditions, the Community nevertheless  
remains the world's largest importer of food. It has maintained for  
several agricultural products a particularly liberal import system (entry  
at zero or reduced rates).
2.5 After a relative stabilization of expenditure from the Guarantee Section  
of the EAGGF in the period 1980-82, during which less was spent than  
provided for in the budgets, mainly because of the favourable conjuncture  
on world markets, an abrupt change has been experienced in 1983,  when 
expenditure is expected to be about 30# higher than in the preceding  
year. The tables in Annex II show the development of this expenditure,  
including the share represented by each product sector, and by each type  
of expenditure. The rate of growth of agricultural expenditure, taken  
over a period of years, is now higher than the rate of increase in the  
Community's own resources.
2.6 The Commission underlines that the situation cannot be remedied by  
short-term palliatives, or economies of an ad hoc nature. Only  
determined action to adapt the CAP in a rational long-term framework can  
serve to place the agricultural policy in a sound economic and financial  
context for the coming years.

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2.7 The adaptation necessary in European agriculture is only part of the  
general adaptation of our society, faced with technological progress and  
a rate of economic growth lower than in earlier years. The diverse  
structure of agriculture in the Member States is the inheritance of many  
generations, and its well-being is essential to the fabric of rural  
life. But its well-being can be ensured only by a better integration  
into the economy as a whole, not by its isolation from the underlying  
factors which are affecting modern society.
2.8 Two factors of particular importance are the following:
- Because of the lower rate of increase of population, overall demand for  
food in the Community will increase less rapidly than in the past. On  
world markets the capacity to pay - that is, effective demand - will  
depend on economic growth and credit possibilities, which are 
uncertain. The Community must continue to play an important part in  
food aid, but it must also encourage the developing countries to  
satisfy more of their food requirements from their own resources by the  
development of food strategies.
- Thanks to scientific research and development, there is a constant  
improvement of crops and breeds of animals, machinery and techniques  
which mean that the factors of production can be combined more and more  
efficiently and at lower real cost. These trends will continue and  
even accelerate in the coming years.
- The development of new technology has led, particularly in the case of  
animal production, to the setting up of agricultural enterprises for  
which land is no longer a limiting factor. There is a risk that this  
development may aggravate the problems of overproduction which have  
been experienced in the milk sector. The Commission has taken account  
of this aspect in the proposals which it makes on the subject.

-  6 -
2.9 The adaptation of the CAP must not ignore the consequences of
agricultural activity for the industries upstream and downstream of  
agriculture itself. The development of agriculture must necessarily be  
integrated more fully into the overall chain of economic activity which  
first provides the requisites for production, and then carries food and  
raw materials from the farmgate to the factory, the shop, and the  
table. In modern economic conditions, a common agricultural policy can  
hardly exist except within the broader concept of a common food policy.  
It must be remembered also that the Community's agricultural exports are  
increasingly in the form of processed products, rather than basic  
agricultural products. This trend, which means that a greater share of  
value-added (and therefore employment) is generated within the Community,  
must be encouraged.
2.10 Another development which has manifested itself in the last decade is the  
use of agricultural materials as a source of organic chemical products.  
The development of biotechnology represents an important challenge for  
the future, and if this activity is to be developed within the Community,  
it is essential that the provision of Community raw materials should be  
assured in the same conditions of competition as for its external  
competitors.
2.11 Other domains where the Community must promote the most efficient use of  
its resources of land and labour are the development of materials for use  
as energy (biomass) and the production of the forestry sector. Since  
the Community is deficient in both energy and wood products, these two  
domains represent real possibilities for alternative activity and  
employment in the rural regions.

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2.12 The Commission intends to make suggestions on the relationship between
agricultural policy and fundamental research. For this purpose, what is  
required is a system for forecasting the fundamental changes which may  
take place in the medium and long term, and also an examination of the  
possibilities for new outlets for agricultural production, particularly  
for products in surplus.
2.13 Agriculture, as the inheritor and guardian of the rural environment,
contributes to the well-being of the vast majority of the population who  
live in urban conditions but wish to enjoy and preserve Europe's  
traditional landscape, flora and fauna. For these reasons the  
development of agriculture must continue to be made in a way which  
reconciles the interests of human recreation, and the protection of  
habitats and species, with the economic interests of those who live and  
work in the country.
2.14 It cannot be the Community's aim to stop the development of its
agriculture. But in view of the future perspectives, the Community has  
no choice but to adapt its policy of guarantees for production. If  
Community agriculture is to succeed - as it should - in expanding its  
exports and maintaining its share of world markets, it must increasingly  
accept the market disciplines to which other sectors of the Community's  
economy are subject. In this dynamic approach, which rejects any  
Malthusian limitation of agriculture's potential, the accent must be  
placed more and more on production at a competitive price. Hitherto,  
the price guarantees for most products have been unlimited in nature.  
This situation cannot continue, if the CAP is to develop on a rational  
basis.

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RATIONALISATION OP THE MARKET ORGANISATIONS
Guarantee thresholds
3.1 The stagnation or decline in demand, both in the Community and on
external markets, for important products such as milk, wheat, beef and  
wine, confirms the diagnosis already made by the Commission in its  
memorandum "Guidelines for European Agriculture" of October 1981. It is  
no longer reasonable to provide unlimited guarantees of price and  
intervention when there is doubt about the possibility of outlets in the  
coming years. In other words, Europe's agricultural producers must  
understand that they will have to participate more fully in the cost of  
disposing of production beyond a certain threshold. The measures  
necessary to ensure respect of such guarantee thresholds constitute the  
centrepiece of the Commission’s proposals.
3.2 Guarantee thresholds can be applied by different procedures according to
the product concerned. For example, thresholds can be applied by
(a) lowering the increase in the target price or intervention price if  
production exceeds a global quantum;
(b) limiting the aids paid under the market regulation to a global  
quantum;
(c) participation of producers, by means of a levy, in the cost of  
disposing of additional production (or in the cost of net exports);
(d) quotas at national level, or at the level of the enterprise.
A choice is therefore necessary, in the light of the situation in each
sector, as to which procedures should be applied.

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3.3 All these various modalities have in fact been used, in differing  
degrees, in the context of the existing market organizations. For  
example, the approach at (a) was followed in the decisions taken by the  
Council concerning the common prices for cereals and milk for 1983/84;  
the modality under (b) exists in the market organization for cotton (and  
has been proposed for dried raisins); the coresponsibility levy  
introduced for milk in '1977 goes in the direction of (c); and quotas on  
the model of (d) have existed for sugar since the inception of the market  
organization.
Price Policy
3.4 Alongside the introduction of guarantee thresholds, the Commission  
considers it necessary to pursue a restrictive price policy. Its annual  
price proposals will continue to take account not only of the development  
of agricultural incomes in the Community, but also of the agricultural  
market situation, the budgetary situation, and other general economic  
factors.
In addition, special attention must be paid to the proper hierarchy of  
prices between the different products; to a satisfactory balance between  
the varieties produced and those demanded by users; and to the  
improvement of the quality of produce required by consumers.
Por certain products (for example, milk and cereals) it reserves the  
right to propose the fixing of common prices more in advance (for  
example, for two marketing years) in order to make the price policy more  
effective.
3*5 As regards the level of Community agricultural prices in relation to  
those applied internally by its competitors on the world market, the  
Commission notes that in many cases (particularly for milk) the common  
prices are at about the same level (or in some cases lower) than in other  
countries. However, particularly in the case of cereals, it continues  
to advocate a progressive reduction in the gap between Community prices  
and those of its principal competitors, not only in the interest of a  
more competitive production of Community cereals (and the elimination of

-  10 -
the advantage presently enjoyed by imports of cereals substitutes, for  
which there is a low or zero level of protection) but also with a view to  
the importance of cereals and feed costs in the economy of animal  
production.
3*6 The application of such a price policy in future years cannot exclude the  
possibility that, in certain cases where the market situation is  
particularly difficult, or where the effective application of a guarantee  
threshold so requires, the common prices expressed in ECU may be frozen  
or even reduced; and consequently that the Community support prices  
expressed in national currency may be reduced in nominal terms.
3.7 The Commission has given particular consideration to the consequences  
which this new approach to price policy could have in countries with a  
high rate of inflation. In this context it should be recalled that the  
Commission's new proposals for the dismantling of monetary compensatory  
amounts will contribute to a better convergence between agricultural  
incomes in Member States. In addition, the structural measures  
developed by the Community, with their efficiency strengthened by a  
better coordination, as suggested in the special Commission report to the  
Council, will also contribute to a solution to such problems in the  
medium term. In the third place, measures which could be taken for the  
incomes of small producers (see para. 3«10 below) will principally  
benefit farmers in countries with high inflation. Finally, the  
Commission recalls that a fall in the different rates of inflation must  
be achieved essentially by the efforts of economic policy to be pursued  
in these countries.
Market management
3.8 In the light of experience, the Commisson considers that the rational  
management of the agricultural markets has encountered difficulties  
because of the automatic nature of certain instruments (intervention  
etc.) which do not permit a flexible reaction to the development of the  
market situation. It is evident that frequent recourse to decisions at  
the level of the Council for the management of the agricultural markets  
is liable to lead to delays, or to linkage with other questions, which  
are detrimental to the proper execution of the common agricultural policy.

-  11 -
3.9 In response to the solemn declaration adopted by the Heads of State and  
Government in Stuttgart on 19 June 1983, which "confirmed the value of  
making more frequent use of the possibility of delegating powers to the  
Commission within the framework of the Treaties", it is the intention of  
the Commission to propose, in appropriate cases, the delegation by the  
Council of further powers in the context of agricultural management.  The  
objective is to make the management of the“policy more flexible and less  
automatic, with a view to the most efficient use of the instruments and  
of the financial resources.
Incomes of small producers
3.10 The Commission will propose, in those cases where it would be necessary,  
further measures to alleviate the possible consequences for the incomes  
of certain small producers, or producers in certain less-favoured  
regions. Such measures, which would be defined on a Community basis and  
limited to producers whose principal income is from agriculture, and  
whose opportunity for other economic activity is limited, could be  
financed totally or partly by the Community budget.
3.11 It should be noted that measures of this kind are already being  
implemented. Thus, for example, farmers in hill areas and less-favoured  
areas already receive aid under Directive 75/268, to compensate for the  
natural handicaps and to maintain a farming activity which helps to  
protect the environment. In the milk sector, the Council adopted in  
respect of the 1982/83 and 1983/84 marketing years a special aid of
120 million ECU for small-scale milk producers.

-  12 -
Aids and premiums
3.12 It is a normal feature of many market organizations that there exist aids  
and premiums, paid by the Community budget. As can be seen from  
Annex IV, this category of measures financed by the Guarantee Section of  
the EAGGF comprises:
- aids with the general objective of supporting producers' incomes.
- aids to offset the difference between the prices for Community  
production and prices on the world market.
- aids to encourage the sale of Community produce on the internal  
market; in most cases, these measures are applied to products when  
similar products are imported free of charge or at low rates of duty.
This type of payment has increased in importance in recent years, and has  
now overtaken the category "export refunds" as the largest single  
category of expenditure from the Guarantee Section of the EAGGF.
3.13 The Commission has made a systematic examination of the aids and premiums  
under the market organizations covered by this report, in order to verify  
their economic justification and to see if their objectives are properly  
attained. In some cases, the market situation which existed at the time 
of the original introduction of the measures has changed, and their  
justification is no longer evident. The Commission therefore makes  
specific proposals for improvement or discontinuation, as indicated in  
the product-by-product examination. In addition, the Commission will  
pursue the examination of the other aids and premiums, particularly those  
under market organizations not covered in this report, and will propose  
appropriate measures.
External trade
3.14 Faced with difficulties of disposal on its own markets, and increased  
competition on external markets, the Community must base its agricultural
trade policy on a combination of three elements:

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- international cooperation with the principal exporting countries, to  
prevent the deterioration of world prices;
the development of a policy at the Community level for promoting  
exports on a sound economic basis;
- the exercise of the Community’s international rights, particularly in  
GATT, for the revision of the external protection system in those  
cases where the Community is taking measures to limit its own  
production.
3.15 The introduction of measures permitting the observance of guarantee  
thresholds, particularly the participation of producers wholly or partly  
in the cost of disposal, should permit the agricultural exports of the  
Community to develop on a sound basis. This will create the necessary  
conditions for envisaging the conclusion of long-term contracts for the  
supply of agricultural produce to third countries, particularly certain  
developing countries who have requested them of the Community in the  
framework of their policies for food security.
3.16 As regards agricultural imports, the Community is obliged to re-examine  
the regimes applicable for the different products, with a view to  
adapting them to the market situation. In some cases, the Community has  
contracted international commitments concerning agricultural imports in  
exchange for reciprocal concessions in the agricultural sector, or other  
sectors; in these cases, an adjustment of the import regime must take  
account of the possibilities of negotiation and of the reactions of the  
Community’s trading partners. In other cases, autonomous concessions  
have been granted for reasons of general commercial policy and foreign  
policy. Nevertheless, if the Community is to demand greater disciplines  
of its own agricultural producers, it must be prepared to take parallel  
action in respect of imports and to ensure a satisfactory observance of  
Community preference.
(2)

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GUIDELINES FOR THE PRINCIPAL SECTORS
4.1 The adaptation of the agricultural policy must he made in accordance with  
the market conditions prevailing in each product sector; the aim must be  
not to achieve economies irrespective of the economic and social  
conditions particular to agriculture, but to streamline expenditure in  
such a way that the financial resources available are concentrated on the  
areas where those resources are most needed, where the interest of  
Community action is most clearly demonstrated, and where budgetary  
intervention can be most cost-effective.
4.2 With this objective in mind, the Commission has made a thorough
examination of the principal market organizations, and of the measures  
resulting in expenditure from the Guarantee Section of the EAGGP. In  
presenting its proposals, the Commission observes that for the most part  
the adaptations indicated require Council decisions; however, certain  
measures fall within the competence of the Commission under its own  
powers. The Commission requests the Council to decide on its proposals  
before the end of the year, so that they can be applied as from the next  
agricultural marketing year.
4»3 In some cases, the adaptations require modification of the administrative  
procedures and economic instruments hitherto applied by Member States. If  
there is resistance to making adjustments, or if the administrative  
difficulties inherent in any such improvements are invoked, this will be  
seen as an excuse for delaying the necessary decisions. The Commission  
emphasises strongly that the improvement of the functioning of the CAP  
implies the acceptance of change by the Member States. It underlines  
also that its proposals represent a global package, which cannot be  
significantly modified without compromising its overall balance.

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4.4 The Commission has examined the economic context of each market  
organization for which adaptations appear to he required, taking account  
of all market organizations with a share of more than 2,0$ of the  
expenditure of the Guarantee Section:
Milk
Cereals and Eice  
Beef
Sheepmea t
Fruit and Vegetables
Oilseeds
Olive Oil
Tobacco
Wine
A descriptive note on each of these market organizations is included in  
Annex III. The Commission will pursue its examination of market  
organizations of a lesser importance, not covered in this report, and  
will, if necessary, propose suitable adaptations
4.5 Before coming to the individual products, however, the Commission draws  
attention to the fact that the sector of milk products presents the most  
urgent problem. In this sector the trend of annual increase of milk  
deliveries was about 2,5$ in the period from 1973 to 1981, but the annual  
increase has accelerated in 1982 and 1983 to about 3»5$; meanwhile  
consumption in the Community of milk products in all forms, which showed  
an annual increase of the order of 0,5$ in the 1970s, is now tending to  
stagnate; thus the milk sector is different from other agricultural  
sectors by virtue of the unremitting and even accelerating divergence of  
the trends of production and consumption. The volume of milk produced  
in the Community now exceeds the realistic possibilities for additional  
disposal, except at rates of subsidy which are hardly acceptable for the  
Community taxpayer.

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4.6 In its examination the Commission has concluded that, at this stage,  
adaptations are not necessary in the sugar sector,  whose market  
organization was already revised by the Council in 1981, and renewed for  
a period of five years. It includes a system of production quotas which  
gives to producers themselves (beet-growers and sugar-processors) the  
entire responsibility for financing the disposal of sugar exceeding the  
Community's internal consumption.

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A. MILK
Guarantee Threshold
4.7 The market imbalance, already grave when the guarantee threshold was  
first introduced in 1982, has deteriorated further. World market  
prospects do not indicate the possibility of further significant  
increases in the Community's exports. The cost of subsidized disposal  
on the Community's own markets has reached very high levels.
Consumption of milk products within the Community shows signs of  
stagnation. The Community is therefore faced with the need for radical  
action to correct the situation.
4.8 It is evident that the price decisions taken over the last ten years have  
not been sufficient to redress the market balance. Although the  
guarantee threshold has been applied in such a way as to limit severely  
the 1983/84 milk price increase, this does not appear to have had an  
effect so far in restraining production. Since milk deliveries in 1983  
are now expected to increase by at least 3»5$, the threshold fixed for  
1983 will be exceeded by at least 6%. The Commission estimates that, in  
order to offset fully the additional expenditure likely to arise from the  
guarantee threshold being exceeded in 1983, the milk price for 1984/84  
would have to be abated by as much as 12%. A measure of this kind would  
evidently have grave and immediate effects on the revenues of producers,  
while there would be some delay before the full effect on production was  
achieved.
4.9 The Commission has considered, as an alternative, an increase in the  
existing coresponsibility levy in the milk sector (currently applied at  
the rate of 2%) but with a differentiation of the levy according to the  
volume produced, so as to alleviate the effect on the incomes of small  
producers. But such a measure, to be both financially and socially  
efficacious, would involve a differentiation so great as to risk  
resulting in inequalities between Member States, and could even  
compromise the unity of the price mechanism.

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4.10 In these conditions, the Commission considers that other modalities for  
the application of the guarantee threshold must be considered.
Experience in developed countries in other parts of the world suggests  
that, for the control of milk production, the only practical alternative  
to action through the common price mechanism is the application of  
quotas. The Organization for Economic Cooperation and Development, in  
which the Community and its Member States participate, has recently  
conducted an in-depth study of policies in the dairy sector, which  
concludes:
"There is increasing recognition that the critical state of the  
international dairy situation calls for more severe measures than have  
been taken so far. One possibility would be a more drastic reduction in  
real prices than has been imposed up to now. Another possibility would  
be the imposition of quotas which effectively reduce supply. A price  
policy that would bring about market equilibrium would result in a more  
efficient use of the resources in the economy. It would also have  
beneficial effects on consumption, though certain social, regional, 
environmental and other non-economic policy objectives might be  
imperilled. The second option, the imposition of quotas, might be  
politically easier to bring about, and though it would not make use of  
market forces to bring about a reallocation of resources - one of the  
prime objectives of positive adjustment - it would at least limit the  
resources used in dairying and hence provide an opportunity for their use  
elsewhere in the economy. If no efficient measures are taken there  
would be a risk of bringing about a complete disruption of the  
international market".
4.11 The Commission, having taken into account the gravity of the imbalance in  
the milk sector, and the economic and social aspects of the situation, is  
of the view that in future the principle of the guarantee threshold in  
this sector should be implemented through a quota system, accompanied by  
a restrictive price policy.

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4.12 This system should be applied by means of a supplementary levy, analogous  
to that already suggested by the Commission in its memorandum of October  
1981. A reference quantity (quota), corresponding to the concept of the  
guarantee threshold, would be established for each dairy, based on  
deliveries in 1981. All deliveries in excess of this quantity would be  
subject to a supplementary levy, calculated in such a way as to cover the  
full cost of disposal of T;he additional milk. The dairies in turn would  
apply the charge to producers, according to criteria to be fixed in  
Community legislation.
4.15 Such a measure would stabilize milk deliveries without aggravating the  
problem of the income of small producers. It would have a rapid effect  
in discouraging additional production; and if production increased, it  
would give sufficient income to cover the cost of disposing of milk in  
excess of the threshold. In order to avoid undesirable effects on the  
structure of milk production, and to provide for the possibility of  
establishing newcomers (such as young farmers),  the Commission will  
propose measures to allow the transfer of quotas from one enterprise to  
another.
Intensive production
4.14 The Commission is concerned that the possibility of increasing output  
through purchases of concentrated animal feed is leading to the  
development of "milk factories" where the connection with the land is  
diminished. The Commission already suggested in its memorandum of  
October 1981 the introduction of a special levy on milk from intensive  
farms, for example, those which deliver more than 15.000 kg per hectare  
of forage.

-  20  -
The Commission now proposes a levy of this kind, and will submit the  
detailed measures to the Council at a later stage.
t
Intervention Measures
4*15 The problems in the milk sector have been aggravated by the possibility  
for dairies to rely on intervention purchases as a more or less permanent  
outlet for production. To restore the balance of the market, the  
Commission will propose to suspend intervention for skimmed-milk powder  
for the part of the marketing year extending from 1 October to  
51 March. During this period the aids for feeding powder to animals  
should be sufficient to maintain the stability of the market; or if  
necessary, powder could be purchased into intervention by tender.
Subsidies for Disposal
4.16 The cost of disposing of butter on the Community's internal market is
high, particularly through general consumer subsidies, because the volume  
of extra butter consumed as a result of the subsidy (paid on all butter  
consumed) is relatively small. The Commission is conscious of the  
importance of this measure to consumers, but it does not seem to be fully  
justified; and it is the consumer, in his capacity as taxpayer, who  
finally has to bear the cost.

-  21  -
4.17 The Commission therefore proposes to eliminate, in two steps, the special  
subsidy for butter consumption. This will result in some loss of butter  
consumption, but compensating increases in disposal of milk fat can be  
obtained by more cost-efficient measures (extension to other foods of the  
aid for butter used in pastry and ice-cream, introduction of a special  
aid for whole concentrated milk). The disposal possibilities should also  
be increased by an increase in the fat content of whole milk for human  
consumption.
4.18 The Commission has decided not to propose a scheme of disposal involving  
the free distribution of surplus butter in proportion to quantities  
bought commercially. Experience of such schemes on the retail market,  
notably with Christmas butter, has shown that consumers simply store the  
concessionary butter and reduce future purchases accordingly. There is  
therefore little if any additional butter consumed, despite the very high  
cost.
Measures for the Cessation of Production
4.19 The Commission will pursue the examination of measures to allow certain  
farmers to give up milk production. In view of the difficulties (and  
even fraud) encountered in the past, additional technical studies will be  
necessary to ensure that such a programme can be conducted successfully,  
with positive results in cost-benefit terms.
External Trade
4.20 The Commission has examined the question of imports of New Zealand  
butter, for which the special arrangements expire at the end of 1983·  
Bearing in mind the trend in butter consumption, especially on the United  
Kingdom market, a reduction in the import quantities could be  
envisaged. However, although this would permit additional disposal of  
Community butter on the Community market, the imported butter thus  
displaced would enter into competition with Community butter on the world  
market.

-  22 -
4.21 The Community has to take account of the overall balance of economic and  
commercial interest which it has in continuing such an arrangement with  
New Zealand, which is a major supplier of the world market for dairy  
products; since the level of world dairy prices has a direct impact on  
the Community budget, cooperation for the stabilization of prices in this  
sector can be of mutual benefit. If the advantages to be gained by the  
Community from this cooperation balance the costs of these special  
imports, the arrangements for imports of New Zealand butter should be  
continued. The Commission will present a separate communication and  
proposals on this matter to the Council shortly.

- 23 -
B. CEREALS AND RICE
Guarantee Threshold
4.22 A guarantee threshold was first fixed in this~sector for 1982/83, at the  
level of 119,5 million tonnes. The Council decided that, if average  
production of cereals (excluding durum wheat) in the three most recent  
seasons exceeded the threshold, the intervention price would be abated.  
However, it also decided that, if imports of cereals substitutes exceeded  
15 million tonnes, the guarantee threshold would be increased  
accordingly. Since the threshold for 1982/83 was exceeded, the increase  
in the intervention price for 1983/84 was abated by 1%.
4.23 The threshold fixed for 1983/84 is 120,56 million tonnes. Taking  
account of the harvest prospects, and the level of imports of cereals  
substitutes, it is unlikely that the threshold will be exceeded in the  
coming season.
4.24 A prerequisite for implementing the guarantee threshold in future is a  
rapid and effective limitation of imports of substitutes. The Community  
has already stabilized the import of manioc and brans; and the import of  
molasses is subject to a threshold price fixed in the framework of the  
sugar market organisation. As regards corn gluten feed and citrus  
pellets, the limitation can be achieved by the Community by using its  
rights under GATT. These rights, and their conditions of application,  
are:
- Article 11 - Quantitative restriction of imports (restriction of  
imports in connection with the limitation of the production of an  
animal product, which fully or substantially depends on the imported  
product; the domestic production of this imported product should be  
negligible).

- 24 -
- Art. 19 - Safeguard clause (unexpected and unproportional development  
of imports; injury for domestic producers of similar or competing  
products; compensation).
- Art. 28 - Modification of a binding (compensation).
The Commission will therefore propose one or other of these solutions, in  
the light of the particular situation of each product and of the  
possibilities of negotiation with supplier third countries.
Price policy
4.25 The Commission proposes that the speeding-up of the narrowing of the gap  
between its prices and those applied by its main competitors should be an  
objective in its future proposals for common prices for cereals.
4.26 If this objective is not attained by the prices policy, the Community  
will then have to consider, in spite of the administrative difficulties  
which such a solution would create, imposing a levy on cereals to cover  
all or part of the cost of exports.
4.27 To achieve a proper price relationship between different qualities of  
wheat, and thus obtain economies in expenditure on intervention and  
exports, there should be a reduction in the gap between the intervention  
price for minimum quality bread-making wheat and feed wheat. The  
present gap is 10#, and the correct gap (taking into account nutritional  
value) would be 5#· With the same objective, there should be a  
reinforcement of quality standards for barley and wheat for use inside  
the Community and for export.

- 25 -
Durum wheat
4.28 Since the Community is now reaching self-sufficiency in this product,  
the Commission considers that it would be prudent to introduce a  
guarantee threshold. It will make the necessary proposals for  
application from the 1984/85 marketing year.
4.29 In order to discourage excessive recourse to intervention for durum  
wheat, the Commission will propose to apply intervention in this sector  
in the same way as for bread-making wheat.
Rice
4.30 The Commission will propose a prices policy that is modulated for the  
different varieties in order to encourage those for which there is real  
demand from European consumers, but without giving any advantage to  
imports of rice.

- 26 -
C. BEEF
Guarantee Threshold
4.31 Although the Community's beef production tends to follow a cyclical  
pattern, the long-term trend is for an increase of between 0,5% and 1% a 
year; meanwhile consumption of beef is expected to stagnate because of  
competition from lower-priced meats, and the limited growth in  
purchasing power of consumers. The Community has passed during the  
last decade from a situation of deficit to a position as a net exporter  
of beef.
4.32 In these circumstances, the Commission is concerned about the risk of  
future market imbalance in this sector. It reserves the possibility of  
proposing a guarantee threshold at a future date, if economic conditions  
justify its introduction. For the moment, it considers that the  
adaptation of the market organization could be limited to the following  
measures.
/•\
Intervention Measures
4.33 The intervention measures should be adapted, so as to conform more to  
market realities. The Commission will submit proposals to:
(i) Restrict purchases to whole and half-carcases during 2 autumn  
months (peak period for slaughtering); limit purchases of  
forequarters to 5 summer months, and of hindquarters to 5 winter  
months.

- 27 -
(ii) Apply the carcase classification grid to purchases from 1.1.1984,  
on the basis of the prices already proposed by the Commission in  
March 1983· This will have the effect of reducing purchase  
prices in Member States now having high coefficients and possibly  
increasing prices in those having low coefficients.
(iii) Terminate all national exemptions (exemptions for "stop and go",  
for packaging etc.)
Premiums
4.34 The system of premiums should be adapted in the following way:
(i) Non-renewal of calf premiums,  which were introduced 10 years ago  
to arrest the decline of herds in Italy, and were subsequently  
extended for other reasons to Greece, Ireland and Northern  
Ireland. Since the introduction of this measure, the market  
situation has changed markedly, and there are large public stocks  
of beef in several member states, including Italy and Ireland.
Its economic justification is therefore no longer valid in terms  
of the market organization. Moreover, the premium also applies  
to calves of dairy herds, and thus encourages milk production.  
The Commission will not therefore propose continuation of the  
premiums for the 1984/85 marketing year. At the same time, and  
for the same reasons, the import commitment for young calves for  
fattening should be implemented each year in a more flexible  
manner. It should be noted that measures in favour of beef  
producers in the Mediterranean regions are included in the  
proposed Integrated Programmes; and calves from specialised beef  
herds will continue to benefit from the suckler cow premium.

-  2 8  -
(ii) Termination of variable premiums applied in the United Kingdom  
from the beginning of the 1984/85 marketing year. This measure,  
which is a partial alternative to intervention, presents numerous  
disadvantages because it is applicable in only one member state,  
thus creating problems of competition; its modalities (payable on  
heifers, and on whole carcasses) have also led to difficulties.
(iii) Continuation of suckler cow premium at its current level. This  
should henceforth be considered as the single Community premium,  
for the encouragement of specialist beef producers.
External Trade
4.35 The Commission considers that the import concessions for beef, including  
the autonomous concessions, should be adapted in keeping with the market  
situation and taking account of current international agreements and of  
reciprocal concessions granted to the Community.
Thus, for example, the determination of the annual estimates of the  
quantities of frozen beef for manufacturing, and of the number of calves  
for fattening, should be handled more flexibly, taking account of market  
conditions and the internal needs of the Community. The volume of  
imports of Alpine breeds could also be reviewed.

- 29 -
D. SHEEPMEAT
Premiums
4.36 The principal expenditure in this sector, where a market organization  
was introduced only in 1980, arises from the payment of premiums to  
producers. The Community's level of self-sufficiency in sheepmeat is  
low. In view of the risk of further increases in expenditure, the  
Commission is of the view that the system of premiums should be modified  
in an appropriate way, without however radically changing the market  
conditions.
4.37 The Commission will therefore propose that, as from the 1984/85  
marketing year, the system of premiums should be adapted in the  
following way:
(i) Limitation of the variable premium applied in the United Kingdom  
to a certain proportion of the reference price. This would  
result in a corresponding increase in market prices, sufficient to  
maintain producers' revenue.
(ii) Application of the ewe premium according to strict criteria.
There should be no advance payment of the premium.
External Trade
4.38 The Commission considers that there should be an examination of the  
possibility of negotiation of a reduction in the quantities to be  
imported in the framework of the voluntary restraint arrangements with  
third countries, and at the same time the introduction of a minimum  
import price. Such an adaptation could lead to a reduction of Community  
expenditure in this sector, as a result of the strengthening of the  
market price, while maintaining the receipts enjoyed on the Community  
market by third country suppliers.

- 30 -
E. FRUIT AND VEGETABLES
4*39 The market organization in this sector covers both fresh and processed  
products.
It should be borne in mind that the Council is already discussing the  
Commission's proposals concerning the "acquis communautaire" for fruit  
and vegetables in view of enlargement, and proposals modifying the  
market organization for processed fruit and vegetables.
The guidelines indicated below are therefore put forward without  
prejudice to the Council's decisions on these matters.
Guarantee Thresholds
4.40 A guarantee threshold is already fixed for processed tomatoes at the  
level of 4,5 m tonnes of fresh tomatoes processed. A guarantee  
threshold is already proposed for dried raisins. For processed pears,  
an analogous measure exists by virtue of the limitation of the aid to a  
certain quantity.
Prices
4.41 A restrictive price policy is particularly important in this sector, to  
avoid the development of excessive intervention, withdrawals and other  
expenditure.

- 31 -
Aids and Premiums
4*42 With a view to the market situation, the Commission proposes to adapt  
the system in the following way:
(i) The system of aids for processing fruit withdrawn from the market  
into juice for free distribution has met with problems of cost and  
control. It would be advisable to discontinue this measure.
(ii) The aids for processing fruit of orange juice are presently paid  
for all quality classes of oranges, which has had the result that  
a large quantity of Class I produce, normally destined for human  
consumption, has gone for processing. It would be advisable in  
future to limit the aids to Class II. The method of calculation  
of the aid should also be revised.
(iii) The aids for processed cherries have mostly been paid on produce  
from non-Mediterranean Member States, despite the fact that this  
regulation was originally destined for produce of importance to  
the Mediterranean regions. Since the objective of the measure has  
not been attained, it would be advisable to discontinue it.

- 52 -
F. OILSEEDS
4*43 This sector is characterised by the fact that the Community is below
self-sufficiency, but nevertheless bears high and increasing costs due  
to the deficiency payments system which results from the duty free 
regime for imports.
Guarantee Thresholds
4.44 For colza and rapeseed there exists a guarantee threshold, fixed at
2,15 m tonnes for 1982/83 and 2,29 m tonnes for 1983/84· If production  
exceeds the threshold, the target price is abated. For 1983/84 the  
price increase was therefore limited to 4% (abatement of "norm" increase  
of 5,5%)· The Commission considers that the guarantee threshold should  
continue to be applied in this way, with a further abatement of the  
price to be proposed for 1984/85 if the threshold is exceeded. In  
addition, the Commission is studying the possibility of introducing in  
the oilseeds sector a system of minimum prices in place of the  
intervention system now in force.
4.45 For sunflower seed the Commission is of the view that a guarantee
threshold should be introduced as from the 1984/85 marketing year, to  
avoid the risk of a too rapid increase in expenditure resulting from the  
expansion of production.
Prices
4.46 Since the "double zero" varieties of rapeseed are better adapted for use  
in animal feed, the prices for the other varieties should be reduced.

- 33 -
G. OLIVE OIL
Prices and Intervention
4*47 The Commission considers that the Community should discourage excessive  
recourse to intervention by increasing the gap between the target price  
and the intervention price, and by reinforcing the conditions for  
intervention.
Production Aid
4*48 There is a serious problem of control of the payment of the production  
aid in this sector. The Commission has drawn up proposals for  
improving the control of the payment by producer groups. If these  
measures prove ineffective, the Commission will be obliged to resort to  
arrangements under which responsibility for payment and control will be  
delegated entirely, under its supervision, to the national  
administrations, thus excluding producers' organizations from  
administering the aid.
4.49 Since production is spread among a large number of producers, many of  
them farming on a very small scale, the Commission is of the view that  
the burden of control of payment of the production aid could be  
alleviated in the following way:
(a) flat-rate payment for small producers (those with less than half a  
tonne of oil, or equivalent quantity of olives);
(b) for other producers, payment according to the real volume of  
production, with strict control of application;
possibility for small producers to opt for (b), if satisfactory  
control is assured.

- 34 -
H. TAX ON OILS AMD MTS
4*50 The development of the market in oils and fats in the Community is
giving rise to increasingly serious imbalances. A comprehansive policy  
for the market in oils and fats is essential if the situation is to  
become healthier.
Apart from factors peculiar to the Community, notably the price policies  
which have been pursued, it should be stressed that the arrival of  
imported products free of duty has added to the imbalance in the market  
situation as between olive oil and other vegetable oils on the one hand  
and butter and other fats on the other.
This has had two consequences for the common agricultural policy:
(a) the consumption of butter and olive oil has fallen;
(b) it has pushed up costs in the oils and fats sector.
4.51 In order to restore balance on the market the Community has already
applied remedial measures in the form of a coresponsibility levy on milk  
and a guarantee threshold for milk and oilseeds, which has resulted in a  
lowering of institutional prices.
Similarly, it has restricted aids for the production of olive oil to  
trees planted before a certain date.
If the Community reinforces these measures by introducing a  
supplementary levy on milk, and thus an internal check on butter  
production, it must supplement its measures for re-establishing balance  
on the market in oils and fats by introducing a non-discriminatory  
internal tax on the consumption of oils and fats other than butter,  
irrespective of their origin. Such a tax would be in conformity with  
the international commitments of the Community.

- 35 -
4*52 In this connection the Commission proposes introducing such a tax,  
therefore, which would yield around 600 million ECU.
The Commission will propose in the near future detailed rules for  
implementing this measure.
I. TOBACCO
4.53 A prudent price policy is particularly important in this sector. For  
varieties for which there is little demand, prices and premiums should  
be frozen, so as to encourage conversion to other varieties for which  
there is a market.
This objective should be assisted by appropriate structural measures.

- 36 -
J. WINE
4.54 The Commission recalls that the Council recently adopted important  
changes in the acquis communautaire for wine, in view of enlargement.
Limitation of planting
4.55 The Commission would point out that the restoration of long-term balance  
on the market in table wine will be determined primarily by strict  
observance of the limits on the planting of vines imposed by the  
Community regulation. It requests the Member States to do all in their  
power to ensure that these provisions are observed.
Prices
4.56 Taking account of the long-term trend of production, which has been  
increasing while consumption has been declining, the Commission believes  
that a prudent policy must be followed in fixing prices.
/• \
4.57 It is necessary to reduce the excise duties on wine in certain Member  
States, in order to encourage consumption and to compensate for the  
decline in consumption in the traditional wine-producing countries.
Quality and aids
4.58 The Commission will make proposals to increase the natural minimum  
alcohol content of wine, in order to improve the quality. It also  
considers it desirable to ensure the use of concentrated must,  in place  
of sugar, for increasing the alcohol content of wine; it will therefore  
propose to prohibit the use of sugar, which would permit the  
discontinuation of the aid for the use of concentrated must (except for  
the making of grape juice) and thus allow a saving of expenditure.

- 37 -
Intervention Measures
4.59 Certain measures in this sector could be adapted, or made more  
effective. The Commission proposes to:
(i) Discontinue the aid for short-term storage for wine, since the  
economic justification for this measure is no longer evident in  
view of the availability of aids for long-term storage.
(ii) Improve the quality of wine marketed, by increasing the rate for  
compulsory distillation of by-products of wine from 8% of the  
quantity harvested to 10$.
(iii) Permit the more rapid and effective application of compulsory
preventive distillation of wine, by fixing a specific threshold  
(e.g. 5 months volume of availabilities) for triggering action,  
and by establishing precise criteria to ensure correct declaration  
of availabilities by Member States.

- 38 -
MONETARY COMPENSATORY AMOUNTS
5.1 For the agrimonetary system, the Commission proposes amending
Regulation 71/974 so that the MCAs can be dismantled in a more stringent  
and automatic manner.
5«2 Any monetary compensatory amount introduced after the entry into force of  
the new regulation would be eliminated in three stages by altering the  
green rate. The stages would be as follows:
- one-third would be eliminated on the introduction of new monetary  
compensatory amounts;
- one-third at the beginning of the marketing year immediately following  
the introduction of new MCAs; and
- one-third at the beginning of the second marketing year following the  
introduction of the MCAs.
5.3 MCAs existing at the time of entry into force of the new regulation would  
be dismantled by altering the green rate in two identical stages at the  
beginning of the two following marketing years.
5.4 By way of derogation from the provisions set out above, the Commission  
could propose to the Council the more speedy dismantling of negative  
compensatory amounts.
5.5 This system would have the advantage of ensuring a precise and  
foreseeable dismantling over a relatively short period. It would result  
in increases in prices in national currency in the case of negative MCAs, 
and reductions in prices in the case of positive MCAs. To avoid harmful  
effects on the incomes of farmers in Member States with positive MCAs,  
aids on a dégressive basis could be introduced as a transitional measure.

- 39 -
5.6 The Commission has also examined, but not adopted, a solution under which  
the MCAs would be calculated by reference to the green rate of the  
strongest currency. The results at the time of the changeover would be:
- no change in the price level in national currency, since there would be  
no change in green rates;
- the disappearance of all positive MCAs;
- the application of negative MCAs for all Member States other than that  
with the strongest currency, for which the MCA would be zero.
5*7 This arrangement would avoid the difficult problem of dismantling
positive MCAs but would introduce negative MCAs, at a relatively high  
level, at least at the time of changeover. If the negative MCAs were  
adjusted too speedily, it could result in an inflationary pressure in the  
Member States in question. Moreover, this system would amount to the  
introduction of a green ECU.
5.8 Furthermore, in accordance with the undertaking given on the adoption of  
the decisions on prices for the 1983/84 marketing year, the Commission  
will examine and propose at a later stage certain amendments to the rules  
for calculating MCAs.

- 40 -
COMPLEMENTARY MEASURES
6.1 The measures hitherto outlined, concerning the market organizations and  
monetary compensatory amounts, must be seen in the more general context  
of the actions already undertaken or proposed within the framework of the  
CAP and other Community policies. It would be an error to consider the  
price and markets policy in isolation from the other efforts of the  
Community to contribute to solving the problems of rural areas; indeed,  
if the Community is to find enduring solutions to these problems, it must  
put relatively more emphasis on long-term structural action, rather than  
on market intervention and price support.
6.2 The Commission recalls that, in addition to the measures considered in
the present document, decisions should be taken on the following matters:
(i) The introduction of Integrated Programmes for the Mediterranean  
regions :  the Commission demands that the Council should examine
without delay its proposals, which aim at integrating these  
regions into the general economy through agricultural and other  
actions.
(ii) The renewal and adaptation of the principal socio-structural
directives for agriculture,  which expire at the end of this year:  
the Commission will make the necessary proposals in September 1983«
(iii) The general improvement of the efficacity of the structural funds  
(Regional Fund, Social Fund, Guidance Section of the EAGGF), on  
which the Commission now transmits a separate communication to the  
Council.

- 41 -
6.3 It is also necessary to emphasise the importance of action in the fields  
of:
- financial control
- removal of internal barriers to trade
- scrutiny of national aids.
Financial Control
6.4 Application of agricultural regulations in Member States has in a number  
of cases been defective, leading not only to opportunities for deliberate  
fraud and unlawful expenditure, but also to the ineffective use of market  
instruments.
The Commission asks the Member States to assume to the full their  
national responsibility under the Community regulations and under  
Commission supervision in order to achieve greater rigour in  
administering the Community's financial resources.
6.5 The Commission has made new proposals in this document, for certain  
sectors, for the control of the organization of markets.
It will propose joint arrangements involving both national and Community  
administrations and will seek to increase the Commission's powers for  
dealing with problems which have emerged in certain specific sectors.
6.6The Commission points out that it has already made horizontal proposals  
to the Council for improved control; it is a matter of urgency that the  
Council adopt its position on these proposals quickly.

- 42 -
6.7 Lastly, the Commission would point out that it has adopted internal  
measures to speed up the procedures for clearing accounts.
It wishes to stress that it will apply the clearance procedure strictly  
in order to disallow expenditure which has not been incurred in full  
compliance with Community rules.
Internal barriers to trade
6.8 The Commisson will continue to carry out its obligations under the Treaty  
to ensure the free flow of trade in the agricultural sector, and to  
ensure that Member States assume fully their responsibilities in this  
regard. The Commission considers that there should be no further delay  
in harmonizing laws. Consequently, it requests the Council to draw up a  
strict timetable so that progress can be achieved in this area. It also  
requests it to give the necessary priority to its work in the veterinary,  
plant health and other areas, in view of the current proliferation of  
barriers to trade in those areas.

- 43 -
National Aids
6.9 The Commission recalls that for some years now it has been insisting that  
Member States should see to it that the rules regarding national aids for 
agriculture are more strictly observed.
It will continue to examine closely new aid proposals and existing aids  
to ensure that they are in compliance with the Treaty. It wishes to  
point out that aids which are not in conformity with the Treaty are 
especially harmful to competition and to trade within the common  
agricultural market. Such aids introduce an element of discrimination  
between Member States in relation to the economic and budgetary  
capabilities of each of them.
For these reasons, it will exercise fully its right under the Treaty in  
the event of infringements, including the right of recourse to financial  
penalties (the reimbursement of payments collected by recipients, the  
refusal of EAGGF expenditure in the market sectors concerned).

- 44 -
FINANCIAL GUIDELINES
7.1 In its report of June 1981 to the Council, pursuant to the Mandate of 
30 May 1980, the Commission, after.having presented the guidelines it 
recommended for the common agricultural policy, observed that if its 
guidelines were adopted, their effective implementation would result in 
agricultural expenditure increasing less rapidly in the future than the 
Community's own resources. This question was discussed both at the 
European Council at London in 1981 and at Stuttgart in 1983·
7.2 The amendments to the rules on the common organization of markets
proposed by the Commission constitute a global package based on the 
report to the Council of June 1981. It considers it essential that the
Council should accept this package. The Commission, for its part, is
determined to adopt a qualitative approach which will guide it in its own 
management, namely that the rate of growth of agricultural expenditure 
(as an average calculated over a number of years) remains below that of 
the Community's own resources (*). It recommends that the Council adopt 
for itself the same guideline.
The reference to an average calculated over several years will allow 
account to be taken of cases of the erratic development of conditions in 
which the common agricultural policy is implemented.
7«3 In addition, and in any case, the Commission proposes that special rules 
of procedure be adopted ensuring strict budgetary discipline in the
(*) Account will have to be taken when calculating the rate of growth of 
potential own resources of any alteration of the basis for those 
resources in terms of comparable bases before and after the change.

- 45 -
management of the agricultural policy. These procedures should be 
applied to decisions having a decisive effect on the volume of 
agricultural expenditure, i.e., decisions on agricultural prices which 
the Agricultural Council must adopt each year on a proposal from the 
Commission, a proposal in support of which the Commission presents its 
estimates of the cost to the budget for the current financial year and 
in a full year.
The Commission proposes that the Council adopt the following rule: "if
the Agricultural Council is likely, in the opinion of the Commission, to 
exceed the costs proposed by the Commission, the final decision must be 
referred to a special Council meeting attended by the Ministers for 
Finance and the Ministers for Agriculture, and can only be adopted at 
that special meeting."
The Commission also proposes the following measures which are designed 
to ensure the more effective and more tranparent administration of 
agricultural expenditure:
firstly, that each year an appropriations reserve is entered in 
Chapter 100 of the budget for the EAGGF Guarantee Section to cover 
any economic uncertainties during the financial year. The 
conditions for releasing this reserve would have to be determined in 
such a way as to ensure that it is used only in properly established 
cases of necessity;
secondly, that EAGGF Guarantee appropriations which are not used 
during a budget year are carried forward automatically to the 
Guarantee Section of the EAGGF for the following budget year.

- 46 -
Financial consequences of the measures proposed
7.5 A financial evaluation of the measures for the rationalisation of the CAP 
proposed in this document depends on a large number of hypotheses 
concerning the future development of the market, both within and outside 
the Community, the development of exchange rates, etc. In many cases, 
the determining factors are not in the control of the Community 
institutions. For these reasons, as is well known, all budgetary 
estimates for agriculture for a period of two or three years in advance 
are subject to serious reserves.
7.6 Nevertheless, the Commission considers that the following general
indications can be given. If the measures proposed are adopted with 
effect from the 1984/85 marketing year, they will have an effect in that 
year, and an increasing effect in succeeding years, in reducing 
agricultural expenditure below what it would otherwise have been. The 
orders of magnitude of the effects of the measures proposed would be:
1984/85 marketing year 2.500 million ECU less
1985/86IIII2.900 million ECU less
1986/87II •I3.200 million ECU less

- 47 -
CONCLUSION
8.1 The Commission considers that the adaptation of the common agricultural 
policy in a long-term framework, on the lines indicated in the present 
document, will permit the rational development of the Community's 
agricultural potential in accordance with the objectives of the Treaty, 
while respecting the need for efficient use of the Community's financial 
resources.
8.2 The modification of agricultural regulations, adopted after arduous 
compromises, will not be easy. It will require difficult decisions on 
the part of the Community institutions, and a readiness by all parties to 
make concessions and sacrifices in the interest of safeguarding the 
operation of the CAP. It may result in some cases in transfers of 
charges between the different social and political groups concerned: 
taxpayers, farmers, consumers, processors, Member States, third 
countries. To make adjustments of this kind is not a technical matter: 
it is a question of political choice. To rationalise and streamline a 
policy for the agriculture of ten (and soon twelve) Member States, after 
more than 20 years of development, requires imagination and political 
will.
8.3 The Commission believes that, in the present conjuncture of the European 
Community, the determination exists to make the necessary adaptations.
The Commission also warns that, unless decisions are now taken, there 
will be negative consequences not only for the agricultural policy but 
for the development of the Community itself. That is why it recommends 
to the Council a programme, set out in the present document, for the 
rationalisation of the common agricultural policy. The Commission, for 
its part, will present formal proposals, particularly for prices, only in 
strict conformity with the lines indicated in this document. There is 
general agreement that changes are necessary: and rational changes can 
validate, not weaken, the fundamental objectives of the Community in the 
coming years.

Annex I
Extract from Declaration adopted by the European Council 
in Stuttgart on 18 June 1983
The basic principles of the Common Agricultural Policy will be observed in 
keeping with the objectives set forth in Article 39 of the Treaty establishing 
the EEC. The Common Agricultural Policy must be adapted to the situation 
facing the Community in the foreseeable future, in order that it can fulfil 
its aims in a more coherent manner.
The following questions will in particular be examined:
- price policy,
- guarantee thresholds, in relation to objectives for production,
- co-responsibility of producers,
- intervention arrangements,
- export refund arrangements,
- substitutes and Community preference,
- monetary compensatory amounts,
- aids and premium arrangements,
- internal barriers to trade,
- type and size of farms, and particular situations of various categories of 
farmers,
- the need for strict financial guidelines,
- external agricultural policy,
- special problems arising in certain regions, such as in the Mediterranean 
regions, in mountain areas or other regions at a disadvantage because of 
natural or economic features.
The examination will result, among other things, in concrete steps compatible 
with market conditions being taken to ensure effective control of agricultural 
expenditure by making full use of available possibilities and examining all 
market organizations.
All Member States must contribute to achieving the savings.

Annex II
Development of expenditure from the Guarantee Section 
of the EAGGF

27June 1983
T#£1BD W  ,Ett£GF-GUARANTEE SECTION EXPENDITURE BY SECTOR SINCE 1973
Mio ECU
1973  
< 1 2 m o is i
Cereals 
Rice
Sugar and isoglucose 
Olive oil 
OiIseeds 
Protein products
Textile fibres and
siIkworms
Fresh fruit and
Vegetables
Processed fruit and
vegetables
Wi ne
Tobacco
Other sectors or 
products (seeds, 
hops, bee-keeping)
Mi Ik 8 mi Ik product 
expenditure before (1 
co-responsibility 
- co-responsibility 
levy
Beef and veal. 
Sheepmeat and 
goatmeat
Pigneat.«51,4
10,1
141.2
246.2 
M,3
7,0
31.1
0,6
11.1
1241,5
20,7
1.583,61974
18,3
107,2383.0
1,0
106.1 
109,5
1 0 ,6
3,7
12,0
57.6 
0,9
41,0
166,4
20.7
1.257,91975
583,6X1.257,9
322,1
69,7589,3
3,4
271.2 
158,7
29,1
11.4 
15,0
67,6
5,0
141.3 
200,5
32.4
1.193,71976
923,3655,9
18.4
229.3
143.4
103.7
15.4
20,7
174.7
10.4
133.8
185.4 
40,1
2.277,71977
Cl.193,7X2.277,7>|C2.948,2: 
X
56,9615,9
29,06 2 9 ,9
13,5
598,4
177.1
91.4
13.8
14.8
154,8
23.4
89.9
205.2 
28,0
2.924,11979
- 24,1 :  
467,7
37,31.112,5
17.9
878.0
182.1 
142,7
43.9
15.9
70,0
30.7
63.7 
216,1
31,4
4.014,7
(4.170,8
(- 156,1
638.7
45,01.563,8
42.9
939.8
388.2
217.8
61.9 
18,1
151,6
291.2
61.9 
225,4
40,21980
4.527,5
C4.621,
- 94,1 
748,2
104,91 .669,: 
58, 
575,2 
317,9
369.4 
60,5
17.2
195.1
492.2
299.5
309.3
38.2Europe of Ten
1981
1.921,4
21.7 
767,5
442.7
582.7 
65 ;4
72,2
22 0 .8
420.3
459.4 
361,8
46.71982
1.824,5
50.3 
1.241,8
493,1
720,7
82,8
116.4
358.4 
555,9
570.6
622.6
53.41983(21 1984(3
4.752,0 3.342,8 
974,9 (3.821,3)6X4
(- 222,9k- 478,5)
1.363,3
53,51.436,9
191,5
115,6 154,63.327,7
(3.865,
(- 537,3
1.158,6
251.7
111.72.474 
81 
1.433 
, 676 
968 
109 
166
371
718
638
.668
63
4.723
242)0 (5 
(- 519)
1.479
360
1802.590 
92 
1.417 
773 
.100 
126 
193
350
695
588
745
55
5.006
5.556)
(-550)
1.399.
351
197
TOTAL CM6
Accession 
compensatory amounts
TOTAL CMO + ACAs
Monetary
compensatory amount
CMO + ACAs + MCAs
Final settlement previous financial 
years
TOTAL GENERAL
PAYMENT OF ARREARS 
CMO FISHERIES£5,5, 
S 27,7'li,2
'  13,79,4
23,915,1
67,025,6
136,338,1
208,5.... .79'5 
252,285,5
221,383,9
282,4-103,9
414,4.  125 
320128 
■  327
3.490,5
289,12.594,1 3.732,1 4.735,9 5.631,2 7.749,8
27,29.715,1
0,210.993,6 10.874,7 12.053,5 15.552 16.132
346,4 444,8 402,0 201,1 0,1 0,1 0>4'  1 1
3.779,6 2.940,5 4.176,9 5.137,9 5.832,3 7.777,0 9.715,3 10.993,7 10.874,8 12.058,9 15.553 16.133
147,4 153,5 335,6 438,2 989,3 880,3 708,4 298,5 238,3 312,7 416 367
3.927,0 3.094,0 4.512,5 5.576,1 6.321,6 8.657,3 10.423,7
'( ■i11.292,2 11.113,1 12.371,6 15.969 16.500
- 160,9 - 108
3.927,0 3.094,0 (.512,5 >.576,1 6.821,6 8.657,3 10.423,7 11.292,2 10.952,2 12.371,6 15.861 16.500
,
1,3 1,210,0 11,0 8,8 15,4 17,0 23,0 28,0 34,037,05 42,9
(1) Including 6 million ECU for final settlement of previous financial years
(2) 1983 budget (14.050 million ECU) + preliminary draft supplementary budget No 2/1983 (+1.811 million ECU)
(3) Preliminary draft budget

27 June 1983
TREND OF EAGGF-GUARANTEE SECTION EXPENDITURE BY SECTOR, SINCE 1973 AS A PERCENTAGE OF TOTAL EXPENDITURE
Mio ECU
Europe of Nine Europe of Ten
1973 1974 1975 1976 1977 1978 1979 1980 1981 1982198?11’%
Cereals 26,8 12,4 13,0 11,8 9,2 12,9 15,0 14,8 17,3 14,3 15,5 15,7
Rice o,3 P a lli. 0,1 0,3 0,2 0,2 0,4 0,5 0,2 0,4 0,5 0,5
Sugar & isoglucose 3,6 3,4 6,0 *,1 8,8 10,1 9,0 5,1 6,910,1 9,0 8,6
Olive oil 6,3 3,5 3,5 2,6 2,6 2,1 3,7 2,8 4,0 4,0 4,2 4,7
OiIseeds 2,1 0,4 0,6 1,8 1,3 1,6 2,1 3,3 5,2 5,8 6,1 6,7
Protein products - 0,1 0,3 0,3 0,2 0,5 0,6 0,5 0,6 0,7 0,7 0,8
Textile fibres and 
siIkworms0,2 0,4 0,3 0,4 0,2 0,2 0,2 0,2 0,7 0,9 1,0 1,2
Fresh fruit and vegetables 0,8 1,9 1,5 3,1 2,3 0,8 1;4 1,7 2,0 2,9 2,3 2,1
Processed fruit and 
vegetablesp.n. p.m. 0,1 0,2 0,3 0,4 2,8 4,4 3,8 4,5 4,5 4,2
Wine 0,3 1,3 3,1 2,4 1,3 0,7 0,6 2,7 4,1 4,6 4,0 3,6
Tobacco 3,2 5,4 4,5 3,3 3,0 2,5 2,2 2,7 3,3 5,0 4,2 4,5
Other setors or 
oroducts (seeds.0,5 0,7 0,7 0,7 0,4 0,4 0,4 0,3 0,4 0,4 0,4 0,3
hops, bee-keeping) ·
Hi Ik & mi Ik product! 
- expenditure bofcri 
co-responsibili ty40,3 40,7 26,5 40,9 42,9 46,4 43,4 42,1 30,1 26,9 29,6 30,3
(40,3) (40,7) (26,5) (40,9) (43,2) (48,2) (44,3) (44,1) (34,4) (31,2) (32,8) (33,6)
- co-responsibility 
levy( - ) C - ) ( * ) ( - ) (-0,3) (-1,8) (-0,9) (-2,0) (-4,3) (-4,3) (-3,2) (-3,3)
Beef and veal 0,5 10,4 20,5 11,0 6,9 7,4 7,2 12,1 12,9 9,4 9,3 8,5
Sheepmeat and - - - _ _0,5 1,7 2,0 2,2 2,1goatmeat
Pigmeat 2,7 2,2 1,3 0,5 0,5 0,5 1,0 1,0 1,4 0,9 1,1 1,2
Eggs and poultry 0,6 0,6 0,2 0,3 0,4 0,4 0,3 0,8 0,8 0,3 0,8 0,8
Non-Annex II 
Products0,7 0,4 0,5 1,2 2,0 2,4 2,4 2,0 2,5 3,4 2,0 2,0
TOTAL CMO 88,9 83,8 82,7 84,9 82,5 89,5 93,2 97,4 97,9 97,5 97,4 97,8
Accession
compensatory amount7,4 11,2 9,9 7,2 3,0 0,3 0,0 0,0 0,0 0,0 0,0 0,0
Total CMO + ACAs 
Monetary
compensatory amount
CMO + ACAs + MCAs
Final settlement 
previous financial 
years
PAYMENT OF ARREARS 
CMO FISHERIES96,3 95,0 .92,6 92,1 85,5 89,8 93,2 97,4 97,9 97,5 97,4 97,8
3,7 5,0 7,4 7,914,5 10,2 6,8 2,6 2,1 2,5 2,6 2,2
100X 100X 100X 100X 100X 100X 100X 100X 100X100X 100 X 100 X
- - 1,4 - 0,7
'
p.m> p.m. 0,2 0,2 . 0,1 0,2 0,2 0,2 0,3 0,3 0,2 0,3
(1) Figures for the preparationof preliminary draft supplementary and amending budget No 2/1983
(2) Preliminary draft budget

GUARANTEE EHWDITURE (1) BROKEN DOWN BY ECONOMIC NATURE
23
i  Other »Co-responsibi li
Total Guarantee Export Storage Aids * (distillation and receipts from
t(CMO + ACAs + MCAs) Refunds ( 2 ) ( 2 ) i withdrawals) mi Ik
l  ' CD ( 3 )
: 1 9 7 9 1 0 * 4 1 4 . 9 6 2 1 . 6 5 6 2 3 . 7 7 9 2 1 1 6 -  9 4
: 1 9 « 0 1 1 3 1 5 5 . 6 9 5 1 . 6 1 7 t 3 . 9 2 6 2 9 6 -  2 2 3
2 1 9 8 1 1 1 1 4 1  « 5 . 2 0 9 1 . 6 3 1 : 4 . 3 4 3 x 6 3 6 -  4 7 6
: 1 9 8 2 1 2 * 0 6 5 . 0 5 4 1 . 8 1 6 5 .4 6 8 : 6 0 3 -  5 3 7
2 1 9 8 3  (Budget) 1 4 0 6 7 6 . 3 6 6 1 .8 7 4 5 .9 4 1 2  4 6 6 -  5 6 4
{Supplementary and :
:  amending budget 1 6 0 0 6  * 6 . 0 6 3 2 . 6 6 2 6 . 9 7 1 t 6 0 9 -  5 1 9
:No 2/83) 2
1 6 5 4 3 : 6 . 5 9 6 3 . 1 5 9 2 6 . 6 1 4 5 2 4 -  5 5 0
draft buaqét:
%
2 :
O th e r C o - r e s p o n s i b i l i  ;
T o t a l  G u a r a n t e e  : E x p o r t  2 S t o r a g e 2 A id s ( d i s t i l l a t i o n  an d r e c e i p t s  fro m
:(CMO + ACAs + M C A s )| R e fu n d s  1  
2(2) * ( 2 )  
2w i t h d r a w a l s ) mi Ik
C l>  C3> I2
:
2 2 2
: 1 9 7 9 1 0 0  t 4 7 , 7  : i s 9 2  3 6 2 1 , 1 i -  0 , 9
: 1 9 6 0 1 0 0  t 5 0 , 4  i 1 4 3 3 4 7 : -  2 , 0
: 1 9 6 1  ' 1 0 0  2 4 6 , 8  2 1 4 6 3 9 0  2 3 , 9 2  -  4 . 3  (
: 1 9 8 2 lO O  2 4 0 , 7 1 4 6 : 4 4 1  : 4 , 9 2 -  4 , 3
2 1 9 6 3  (Budget) 1 0 0 4 5 , 3  2 13 3 : 4 2 2 3 , 3 : -  4 , 1
2 (Supplem entary and 2 2
xamending budget 1 0 0  2 3 6 , 0  2 17 9 2  4 3 5 3 , 6 2 -  3 , 2
sNo 2 /8 3 2 2
* « · *2 1 0 0  2 3 9 , 9 19,1 4 1. 3  : 3 , 1 : -  3 , 3
CD Including common organization of the market in fisheries
CD Aids to producers, processing aids and marketing aids for products with the exception of rebates granted on storage (for example, 
butter for pastry-making, the use of skimmed-milk in animal feed) included under the heading "stoaage", in accordance with the 
budget nomenclature
CD The MCAs for extra-Community trade are included in the refunds and the MCAs for intra-Community trade are included in the aids
* These amounts do not include reductions following final settlement of earlier periods, - 161 million ECU in 1981 and 
- 108 million ECU in 1983.

TABLE SHOWING TREND OF EAGGF-GUARANTEE SECTION EXPENDITURE AND OWN RESOURCES
I. EAGGF-Guarantee (not including fisheries but including refunds for food aid)
1973 1974 1975 1976 1977 1978 1979 1980 198119831984 (6)SAB to 1 SAD to 2(5)
TOTAL
Varia- t 
tion l(1) .  
3.927(1)
3.094(1)
4.513(1)
5.576(1)
6.822
+1.2468.657
♦1.83510.424
♦1.76711.292 
+ 868(2)
10.952 
- 34012.372 
+1.42014.050 
+1.67815.861
+3.48916.500 
♦ 639
—- 833 +1.419 +1.063
-21,2% +45,9% +23,6X ♦22,3% +26,9% +20,4% ♦ 8,3% -3,0X + 13,0X ♦13,6X. ♦ 28,2X ♦ 4,0%
^ ♦ 15,5 X Der year
^ ♦ 23,3 X per year ^ ^ +9,6 X Der year
II. The trend of the EAGGF-Guarantee Section share of the Community's general budget (including common organization of the market in 
fisheries)
1973 1974 1975 1976 1977 1978 1979 1980 1981 198219831984 (6)SAB to 1 SAB to 2
Original 
budget (3)71,4 X 69,2 X 68,3X 68,1% 72,9X 70,3% 71,2X 73,4X 66, 7X 62,3 X 61,5 X 64,8 X
Budget 
including 
stpplementan 
and amending 
budget (4)74,1% 67,2X 67,6X 69,4X 74,1X'  70,3X 72,OX 71,IX 63,OX···· ··
Annualpayments79,3X 72,6X 75,2X 73,6X 70,8X 77,5X 72,6X 69,4X 61,8·· ·■·■
III.- Own resources with 1% VAT (not including other types of revenue)
M O  ECU
1973 1974 1975 1976 1977 1978 1979 1980 1981 1984 (6)SAB to 1 SAB to 2
T C T * . < 8.2601**
(9.180)•
(10.120)* 1  *(12.120) (14.030) 14.961 16.712 13.600 19.825 22.247 24.375 - ♦ 25.867
Varia- C 
tion C+ 920 ♦ 940 +2.000 +1.960 + 881 
♦ 6,3X♦1.751 
+11,7X♦1.838 ♦1.225 ♦2.422 +2.128 ♦1.492
+11,IX ♦1C,2X +19,8X +16,2X ♦11,3X + 6,6% •*12,2% + .9,6 X··+ 6,IX
_+  11,Q_%_perygar
_________ ^ ^ ♦ 9,1 % per year
IV
. Variation in own agricultural resources *
MO E C U
1973 1974 1975 1976 1977 1978 1979 1980 1981------m i-------19
84 (6)SAB to 1 '  SAB to 2
Levies 
Sugar levy438
105280
81
361534
861.040
1331.817
3201.873
4061.678
4651.535
4671.265
4831.522
7061.558 j 
1.013··2.000
997
TOTAL 543 620 1.173 2.137 2.279 2.143 2.002 1.748 2.228 2,571--2.997
Varia- ( 
tion C-182 ♦259 ♦553 +964 +142 -136 -141 -254 +480 ♦ 343.. + 426
-33,52 +71,7X +89,2X +82,2X +6,6X -6,OX -6,6X -12,7X +27,5X + 15,4X-·♦ 16,6X
j ♦ 19.1 x per year * j 
^ ♦ 36.4X per year ^ ^ ♦ 6,9£ pe.r year }
* Estimated figures owing to the fact that for those years VAT was not taken into consideration
* Provisional figures
(1) For purposes of comparability expenditure before 1978 has been converted from Mio IMF units of account into Mio ECU; similarly 
the figures for 1973 have been corrected to correspond to a twelve-month payment period.
(2) Taking account of the reduction of 161 million ECU following the final settlement of the 1974 and 1975 financial years
(3) Including provisional appropriation entered in Chapter 100
(4) Source: Reports of the Court of Auditors
(5) Figures for the preparation of preliminary draft supplementary and amending budget No 2/1903
(6) Preliminary draft budget

ANNEX III
DESCRIPTION OF MARKET SECTORS

Description of sector :  Milk
1) The number of milk producers can be estimated at more or less 1.670.000, 
of which about 625.000 hold less than 5 cows and 660.000 between 5 and
20 cows. The producers holding less than 20 cows (1.285*000 or about 77% 
of the total) hold less than 34% of the total number of milk cows and 
deliver about 30% of the milk collected.
2) The total milk deliveries in 1983 are forecast at about 104 million 
tonnes, showing an increase of 3,5-4% in comparison with 1982. The total 
consumption is slightly higher than 88 million tonnes (the long-term trend 
of consumption is estimated at 0,5% per year, whereas it is of 2,5% per 
year for the deliveries).
3) End June 1983, the public -stocks of skimmed-milk powder were 916.000 t.
The public stocks of butter were 513*000 t (to which should be added more 
than 100.000 t of private stocks). End June 1982, the public stocks were 
396.000 t of skimmed-milk powder and 44.000 t of butter.
4) The exports of skimmed-milk powder and butter decreased dramatically 
during the last two years and in 1983 will reach only 81% of butter 
exports and 59% of skimmed milk exports in 1981. The Community exported 
in 1981 292.999 t of butter and 309.000 t of skimmed-milk powder, 
excluding food aid. The Community imported 115.000 t of butter and no 
skimmed-milk powder.
5) The forecast expenditure for the milk sector in 1983 is 4.723 million ECU, 
which represents about 29,8% of the total EAGGF Guarantee expenditure, in 
the corrective budget.

Description of sector :  Cereals
1) The number of producers involved in 1977 for all cereals was 3,9 million 
(EUR 10); for wheat the number of farms was 2,8 million (EUR 10).
2) Production has a tendency to increase because of better yields. The 
average yields for common wheat in the EEC have climbed from about
40 dt/ha 10 years ago to 51.1 dt/ha in 1982. There are still genetic 
reserves for further increases. The total EC-cereal production in 
1982/83 was 130 mio t, of which 56 mio to common wheat and 41 mio to 
barley. About 60% of the total Community production is used as animal 
feed.
3) The rapid increase of levy free or low duty raw materials for animal feed 
used as substitutes for cereals has led to a stagnation of internal cereal 
used in such feed, to a fall in leviable cereal imports, and in 
conjunction with the higher internal production to an increase in cereal 
exports. In 1981/82 the Community imported 28,7 mio t of total cereals 
and substitutes (of which 2,8 mio t common wheat, and 8,3 mio t maize; 
the imports of cereal substitutes increased, between 1978/79 and 1981/82 
from 9,8 mio t to 16,4 mio t). Community exports for all cereals 
amounted for 1981/82 to 21,8 mio t (of which 14,2 mio t common wheat (1) 
and 6,6 mio t barley (2)). Between 1978/79 and 1981/82 the exports of 
common wheat more than doubled.
4) EAGGF expenditure for this sector amounts in the corrective budget 1983 to 
2.474 mio ECU (* 15,6% of EAGGF Guarantee section).
(1) Flour and food aid included
(2) Malt included

Description of sector :  Beef
1) The number of producers involved at the end of 1981 was 2.580.000.
2) The total beef production in 1983 is forecast at about 6.830.000 tonnes,
showing an increase of 2,6% in comparison with 1982, after two years of 
substantially reduced production (1981 s  - 3»5%; 1982 : - 3»9%)·
The total consumption is slightly higher than 6.775.000 tonnes, more or 
less stable since the last two years.
End June 1983, the public stocks of beef were _+ 300.000 t. End June 
1982, the public stocks were 74.000 t.
3) The imports of beef are rather stable to increasing :  _+ 364.000 t in 1981, 
+_ 440.000 t in 1982 and +_ 450.000 t in 1983 (estimation); the exports of 
beef have declined in 1982 (from 662.000 t in 1981 to 480.000 t in 1982) 
and are stable to increasing in 1983 (estimated to reach 500.000 to 
575*000 tonnes).
4) The actual market price for beef is rather low, compared with the Guide 
price (80,13%).
5)The forecast expenditure for the beef sector in 1983 is 1.479 million ECU, 
which represents about 9,3% of the total EAGGF Guarantee expenditure in 
the corrective budget.

Description of sector :  Sheep- and Goatmeat
1) The number of producers involved at the end of 1980 was about 600.000.
2) The total sheep- and goatmeat production in 1983 is forecast at about 
740.000 tonnes, showing an increase of 4,2% in comparison with 1982, after 
one year of slight increased production (1982 :  + 1,6%).
The total consumption is somewhat higher than 979*000 tonnes and slightly 
increasing since the last two years (1982 :  + 6,9%).
3) The imports in the sheep sector are rather stable to increasing :
+_ 226.000 in 1981, + 281.000 t in 1982 and + 250.000 t in 1983 
(estimation); the total imports realised are below the total quantities 
contracted with 12 third countries in the voluntary restraint agreements 
arrangements (_+ 322.000 tonnes); notwithstanding that some third 
countries are fulfilling their full quota.
The exports in the sheep sector are low and stable (_+ 5*000 t in 1983)·
4) The actual market price for she'epmeat is rather low, compared with the 
basic price (89%); already in early July 1983, the variable premium is 
_+ 70% of the market price in Great Britain.
5) The forecast expenditure for the sheep- and goatmeat sector in 1983 is 
360 million ECU, which represents about 2,2% of the total EAGGF Guarantee 
expenditure in the corrective budget.

Description of sector :  Fruit and Vegetables
1) The number of producers involved in 1977 for vegetables was 93*800 (EUR 9) 
for plantations of fruit and berries was 677*000 (EUR 10), for crops under 
glass was 97*300 (EUR 10).
A* Fresh products
2) The production of fruit and vegetables in the Community is fairly stable 
in the medium term, even if annual variations of some importance do occur, 
and represents an average of 18 mio tonnes of fruit, 25 mio tonnes of 
vegetables. The per capita consumption is stable too, but varies 
considerably from one Member State to the other.
5) The degree of self-sufficiency is, in round figures, 95% for vegetables, 
75% for fruit other than citrus, and 45% for citrus.
4) EAGGF expenditure has gone up progressively over the years to reach 
371 MECU which represents 2,2% of total guarantee expenditure in the 
corrective budget for 1983*
B .  Processed products
5) The processing of fruit and vegetables is increasing constantly.
Although no precise statistics are available concerning the type of 
processing (whole product in tins, juice, deep freezing, etc.) it is 
estimated that the total production of the Community exceeds 7 mio 
tonnes. Consumption per capita proceeds accordingly, whereas imports 
from non-member countries are relatively small. It should be noted that 
for tomato concentrate the Community has become an important net exporter.
6) EAGGF expenditure for this sector has gone up rapidly after 1977 when a 
processing aid,  together with a minimum price to be paid to the 
agricultural producer, was put into force for a number of products 
(tomatoes, peaches, pears, cherries, plums, raisins, figs), in order to 
keep up with foreign competition.
7)The forecast budget cost for this operation in the 1983 corrective budget 
is 718 MECU which represents 4,5% of total EAGGF Guarantee expenditure.
v

Sector: Colza and Sunflower Seed
1. Growers of colza and sunflower seed number an estimated 150.000 (colza 
100.000). Colza is mostly grown as an alternative to cereals and beet.
2. Production in the Community has risen steeply in recent years, more than 
doubling since 1979· Colza-seed production is up from 1,2 mn tonnes in 
1979 to 2,8 mn (estd) in 1983, and sunflower-seed production from 0,2 mn 
to 0,9 mn.
3· Exports of colza seed are negligible (22.000 tonnes in 1982/83) and of
sunflower seed nil. Imports of colza seed are declining (110.000 tonnes in 
1982); imports of sunflower seed ran fairly steadily at 1 - 1,2 mn. tonnes 
a year until 1981, but dropped to 600.000 in 1982.
The two products have, however, to be seen in the much wider context of 
oilseeds, oils and oilcakes as a whole: in 1982 for instance the Community 
imported 12 mn tonnes of soya seed and 8,9 mn of soya cake.
4.The forecast EAGGF guarantee expenditure in respect of colza and sunflower 
seed is 968 mn ECU in 1983, which represents 6,1% in the corrective budget.

Sector: Olive Oil
i* Producers,  in Italy and Greece, number 1.500.000, each owning an average 
1»8 hectares of olive groves and producing an average 0,5 tonne of olive 
oil.
2. Production is subject to swings (682.000 tonnes in 1975/76, 296.000 in 
1976/77, 714.000 in 1977/78, 447.000 in 1978/79) according to the 
quantities eligible for aid, the total being necessarily restricted (apart 
from doubts over the production statistics) by limitation of the acreage 
qualifying for producer aid.
3· Since Greece s accession, the EEC of the Ten has become practically 
se^^‘ ~su^‘ ^ c^-en^ in olive oil, which has meant lower imports and higher 
exports, particularly of certain grades.
4. The forecast expenditure for 1983 is 676 mn ECU, or 4,3% of the total 
EAGGF Guarantee spending in the corrective budget.

Description of sector :  Tobacco
1.) The number of producers involved in 1981 was 208.000  (EUE 10).
2) The production of tobacco in the Community is fairly stable from year to 
year and reached, after Greek accession, a level of 310.000 tonnes (Greece 
alone accounts for some 130.000 tonnes)·  Consumption of tobacco within 
the Community is fairly stable.
3) Imports of tobacco run at a level of about 500.000 tonnes per year, so 
that the degree of self-sufficiency is approximately 40$.
4) In the absence of protective measures at the border concerning quantities 
or prices of imported tobacco, a premium is paid to the processing 
industry in order to create a preference for the use of Community-grown 
tobacco and to ensure that a correct price is paid to the agricultural 
producers.
5) The premium which represents almost the entire EAGGF Guarantee expenditure 
for the tobacco sector, was at a level of about 350 MECU, immediately 
prior to Greek entry, but doubled thereafter to reach in the corrective 
■  budget 1983 668 MECU which represents 4,2$ of total Guarantee expenditure.

Description of sector :  Wine
i; The number of producers involved in 1977 (EUR 10) was 2.060.300.
2) The production of wine in the Community varies from year to year, but is 
on average at a level of about 160 mio hi, whereas total consumption does 
not exceed 140 mio hi. The per capita consumption shows a downward trend 
in the important producer countries, which is not compensated for by an 
upward consumption trend in the non-producing countries.
3) Exports exceed imports by about 5 mio hi, so that the Community is 
slightly more than self-sufficient in this sector.
4) The full effects of a large structural programme recently adopted have not 
yet worked through. Consequently, it has been necessary to distill 
considerable quantities of wine into alcohol in order to restore 
reasonable market equilibrium. Since several years the prices are below 
the guideprice fixed for table wine, by the Council.
5)EAGGF Guarantee expenditure for this sector is estimated at 638 MECU which 
represents 4% of total Guarantee expenditure in the 1983 corrective budget.

E.ro4uct»_ln.-MerobT States as a percentage of the final production of agriculture ln the Coimnunitv
(1981)
EUR 10 Silas BUR 9 : Deutsch-: 
: land :France :  Italia :Nederland Belgique/:  
BelgleLuxem­
bourg: United :  
: Kingdom :Ireland Danmark
_______l__________ 2 3 4: 
5 : 6: 7 : 8 9 : 10: 11 : 12 13
Wheat 100,0 5.3 94,7: 12,0 : 39,1: 20,9 : 1,6 1.7 0,0: 17,2 : 0,4 1,7
Barley 100,0 l.A 98,6: 17.4 : 26,7: 1,1 : 1,0 2.3 : 0.1: 33,2 : 4,2 12,6
Tobacco 100,0 49,9 50,1: 3,1 : 18,4: 28,3 : : 0,4 : ■  : : 0,0 : 0.0 0,0
Olive oil 100,0 31,3 68,7: 0,0 : 0.5 68,2: 0,0 0,0 : 0.0: 0,0 : 0,0 0,0
Ollaeed· 100,0 0,5 99,5: 15,5 : 52,0: 3,9 1,6 0,0 : 0,0: 16,4 : 0,0 10,0
Fresh fruit (1) 100,0 10,8 89,2: 14,3 : 22,2: 40,3 3,4 2,6 : 0,0: 5,6 : 0,2 0,6
Fresh vegetables 100,0 6,6 93,A: 5,1 : 20,5: 39,5 : 10,4 4.5 0,0: 11,7 : 0,9 0,8
Wine and must 100,0 2.8 97,2: 16,2 : 48,4: 32,4 : : : i 0,2: · · 0,0 0,0
Milk 100,0 2.1 97,9: 23,0 : 24,2 11,7: 11,5 3,0 : 0,2: 15,8 : 5,6 4,9
Beef and veal 100,0 1,6 98,4 20,5 : 2b, 5 14,6: 6,6 4,2 : 0,2: 14,5 : 5,1 3.2
Sheepmeat and 
goatmeat100,0 23,9 76,1: 2.5 : 27,6: 9,2
:: 2,8 0,4 : :: 29,2 4.4 0,0
(1) Thl* relates to product· In Annex II to Regulation (BBC) No 103S/72 
Source: Burostat - Agricultural account·

ANNEX IV
Aids under the common agricultural policy 
EAGGF Guarantee Section
The attached Table sets out:
In column A
Income subsidies and various aids whose principal aim is not to bridge the gap 
between the price of production in the Community and on the world market or to 
dispose of products.
In column B
Aids designed principally to offset by various arrangements the difference 
between the price of Community production and the price applied by third 
countries in their international trade.
In column C
Aids designed to encourage the disposal of production. These consist mainly 
of aids for products, the production of which in the present situation where 
similar competing products can be imported free of import charges or at low 
levels of import charges, exceeds consumption. By increasing the 
competitiveness of these products the aids increase the outlets for them.
These may also consist of production aids for products such as casein which, 
if no such aids existed, could not be obtained from the Community basic 
product and which result therefore in the expansion of the market for the 
latter.
Aids for storage, the withdrawal of fruit and vegetables and the distillation 
of wine are not included in this document.

ANNEX IV
Alda under the common agricultural policy, EAGGP - Guarantee Section 
Appropriation« entered In preliminary draft supplementary budget No 2 1983 In million ECU
e• A B C :
ee :  to offset the :
ee to support :dlfference between to encourage the
e• producers' Income :the Community price disposal of Total
•• :  and the world production
•• :  market price
:  1.Cereals 180e•
«e 173 353:
:  2.Sugar 9e ee 4 13:
:  3.Olive oil 391 : 235 : 626•e
:  4.Oilseeds and protein products : 1.071 : 1.071ee
:  5.Presh fruit and vegetables 125 : «• 125i
:  6.Processed fruit and vegetables : 711 711ee
:  7.Wine SO : 10 62 122:
8.Tobacco : 600 600:
:  9.Milk and milk products 255ee 2.206 2.461
:  10.Beef and veal 312ee 312
:  11.Sheepmeat 360ee 360
:  12.Textile fibres and silkworms : 164 164
:  13.Seeds :  50 50
:  14.Hops :  9 9
:  IS.Bee-keeping 5e• S
• "1
ee
•Total 1.687 :  2.850
e2.445 6.982