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COM(81)58
Vol.1981/0017

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COMMISSION OFTHEEUROPEAN COMMUNITIES
COM(81)58 final
Brussels-23rdFebruary1981
■■■■■ ■
THESITUATION OFTHEAGRICULTURALMARKETS
REPORT1980
(presented bytheCommission totheCouncil)
COM(81)58final

-J?-
Thisreportwasdraftedanautumn1980andasummaryappearedin"The
Agricultural Situation intheCommunity -1980Report"published in
conjunction withtheFourteenth GeneralReportontheActivities ofthe
European Communities .Despitetheretrospective natureofthereport,the
departments concerned haveasfaraspossible updatedthekeyfiguresrelating
totheNineandaddedashortdescription ofthesituation intheCommunity of
Ten.
+++++
References tostatistical tablesrelatetothetablesintheabovementioned
report.
(D

3
CONTENTS
Thesituation ontheagricultural markets
1980 REPORT
Page
A.THE OUTLOOK FOR AGRICULTURAL MARKETS
I.Markets foragricultural products 4
B.ANALYSIS BYSECTOR
I.Products subject tocommon market organisation
1.Cereals 17
2.Rice 32
3.Sugar 38
4.Olive Oil 45
5.Oilseeds andprotein seeds 50
6.Dried fodder ;peas andfield beans 58
7.Fibre flax andhemp 63
8.Seeds 66
9.Wine 70
10.Raw Tobacco 76
11.Fruit ,vegetables andlive plants
a.Fresh fruit andvegetables 80
b.Processed fruit andvegetables 90
c.Live plants 93
12.Hops 94
13.Milk andmilk products 95
14.Beef and veal 109
15.Pigmeat 122
16.Eggs 132
17.Poultrymeat 135
18.Silkworms 138
19.Sheepmeat 139
II.Products notsubject tocommon market organisation
20a .Agricultural alcohol 145
20b .Potatoes 146
20c .Honey 151
C.SURVEY OFCERTAIN GROUPS OFSECTORS
21.Feedingstuffs 152

Summary
Markets foragricultural products
Introduction
6000 Thepurpose ofthe first part ofthis summary istogive
highlights ofthemarket situation inthose sectors ofimportance in
Community agriculture during 1979 /80.This review includes reference to
thepattern ofproduction andconsumption ,price developments ,particular
measures taken ,aswell asthedevelopment ofCommunity trade inworld
markets .Attention isfocussed onsixsectors which represent around 2/3of
agricultural output andwhere more than 75%ofthebudget isspent : *
cereals ,sugar ,fruit andvegetables ,milk products ,beef andpigmeat .
6001 The second part looks attheshort-term outlook for
agricultural markets examining inparticular those sectors where
problems exist orwhere they arelikely toarise .
6002 Asthedraft ofthis report wasprepared inAutumn 1980
-asynthesis hasalready been published inthedocument "The
Agricultural Situation intheCommunity 1980 Report "-no
account hasbeen taken inthis summary oftheimpact ofthe
accession ofGreece totheCommunity .However ,theindividual
market reports indicate that thegreatest impact will most
likely befelt inthesectors ofolive oilandtabacco .
6003 The references tostatistical tables relate tothose
included inthe document mentioned above .

-5-
Situation ontheprincipal agricultural markets
Crop products
Cereals (Tables M.I. -)
Community market
6100 Thetotal area ofcereals under cultivation intheCommunity
in1979 was 26.7 Mio haor28.7% oftheutilised agricultural area (UAA ).
Their importance inthe land-use ofindividual Member States varied
considerably ,being ofthegreatest significance inFrance ,Germany and
Denmark and ofleast importance inIreland and theNetherlands where fodder
crops andpermanent grassland aremore prevalent .
Production and consumption
6101 Although cereals production in1979 washampered byasevere
winter ,,final production was 113.6 Mio t,only 2.2% less than therecord
1978 crop .Despite unfavourable climatic conditions during this year ,
either from initial fears ofadrought inthespring orheavy rains inJune
andJuly ,preliminary estimates indicate anewproduction record in1980 of
around 118Mio t(4%more than in1979 ).Within this overall total there
hasbeen asignificant shift away from rye ,oats andmaize towards winter
wheat andwinter barley (production ofwinter wheat should beupby10%).
6103 Total consumption ofcereals intheCommunity in1978 /79
amounted to115.9 Mio t.,61%ofallcereals being utilised inanimal feed
while 34.3% went forhuman consumption andindustrial use (roughly thesame
asin1977 /78).Within these twodivisions ,theproportions vary
substantially from cereal tocereal ,from oneMember State toanother and
from year toyear .The final balance sheets for 1978 /79show that self-
supply didnot exceed 100% .

-6-
6104 The use ofcereals forfeeding tolivestock hasbeen
significantly affected inrecent years bythegrowth ofcereal substitutes
used inanimal feed such asmanioc ,oilcakes and avariety offood industry
by-products (seearticle oncereal substitutes )(1).Forexample ,there is
asign that animal feed use ofcereals onfarms where they were grown is
declining (under 45%in1978 /79compared toaround 50%in1975 /76),which
ismost probably due tothefact that farmers aretending tosell their
cereals (orproduce less ,asinthecase ofoats )andtopurchase compound
feeding stuffs .This trend hasbeen slowed down tosome extent bythe
operation oftheSilo system (2)inorder todevelop theuseofmore EC
wheat andbarley inanimal feed .
Main market features
6105 The 1979 /80marketing year opened with aslightly higher stock than
normal asaresult ofthelarge 1979 crop (total stocks about 14.7 Mio t).
With arecord crop anticipated in1980 ,theCommission has oriented its
policy towards encouraging alarge export programme .
6106 Among thedecisions made bytheCouncil when fixing theprices in
the 1980 /81marketing year was theagreement inprinciple tointegrate rye
into the silo system ofgrain prices inthree stages .This will align the
ryeintervention price with the level ofthe common intervention price for
coarse grains by1982 /83.Another important element was thedecision to
introduce full public intervention purchasing forbreadmaking wheat tobe
put into effect for the first 3months ofthe 1980 /81marketing year .
6107 Asaresult ofthequantities produced particularly ofwheat and
barley in1979 /80,market prices intheCommunity have been depressed to
around theintervention price level (inthecase ofcommon wheat the
reference price level which is12.7% above theintervention price level ).
There was ,however ,noprogress inthe level ofintra-Community trade .
World markets
6108 World production ofcereals (excluding rice )in1979 amounted to
1173Mio t(3)ofwhich thequantity produced intheCommunity was9.7%
Theproportions produced byother major exporters ofcereals were :US25% ,
Canada 3%,Australia 2%,andArgentina 2%.
(1)"Policy foranimal feeding stuffs :thecase ofthecereal "substitutes "
(2)Theaimofthesilo system istoreduce EAGGF expenditure inthecereals sector
byintroducing anatural hierarchy ,between acommon intervention price and a
common target price ,intheprices ofthemajor cereals (common wheat ,rye ,
barley andmaiza )ontheCommunity market infeed grains .
(3)FAO Statistics .

-7-
6109 Atthebeginning ofthe 1978 /79marketing year ,world stocks of
cereals were very high aswas the level ofproduction intheUSA ,theworld 's
largest grain exporter .Owing tothestrong import demand from theUSSR
andEastern Europe ,however ,andlower production levels inother exporting
countries ,market prices remained generally higher than in1978 /79
throughout themarketing year .Inthebeginning ofJanuary 1980 theUS
announced itsintention tolimit sales ofgrain totheUSSR (ameasure
supported byalltheother major exporting countries except Argentina ).
Owing tothe reasons setout above ,however ,this action only had a
temporary effect onworld price levels .
6110 In1978 /79theCommunity imported 18.5 Mio tofcereals (3%less
than 1977 /78).Ofthis total ,12.3 Mio twere maize ,(more than 80%of
which wasimported from theUS)and3.5million tons ofcommon wheat
(around 95%from North America ).Total quantities imported in1979 /80are
expected tobedown to16-17 million tons ,with amarked drop inmaize
(about 10Mio t).
6111 Total exports ofcereals andcereal products in1978 /79were up
34% to14.4 Mio t.Within this total ,common wheat andflour accounted for
7.7Mio t.This latter amount rose toabout 10Mio tin1979 /80(9Mio t
ofcommercial sales ,ofwhich almost 3.5Mio twere offlour ,and the rest
asfood aid).Inboth these years ,theCommunity 'smajor clients forwheat
exports have been inWest andNorth Africa aswell astoseveral European
countries ,including Poland andPortugal .Flour exports continued togoto
awide variety ofdestinations (Egypt ,SriLanka ,Syria andSaudi Arabia
being among themost important ).Barley andbarley product exports
amounted to5.1 Mio tin1978 /79ofwhich 1.5Mio twas inthe form of
products .
Sugar (Tables M.3.-)
Community market
6200 The trends observed :Lnthepast decade interms ofproduction
structures indicate that smaller beet-growing enterprises have tended to
diminish infavour ofunits larger than 10haandthat there hasbeen amarked
decrease inthenumber offarms producing sugar beet .Atthe same time ,
rationalisation has also occurred among thesugar beet processing factories ,
their number declining by13%between 1972 /73and 1979 /80whilst total
processing capacity hasincreased by21% .Thequota system ,now inforce
forover 5years ,does notappear tohave impeded this rationalisation
process .
Production and consumption
6201 Total sugar production intheCommunity in1978 /79was 11.8 Mio t
rising totherecord level of12.3 Mio tin1979 /80with scarcely any
change inthetotal acreage planted .For thelatter year ,about 9million
tons wasproduced within thebasic quota ('A'sugar );anamount of1.8Mio
twas reached outside thebasic quota butwithin themaximum

-8-
amount ('B'quota )while theremainder oftheproduction ('Csugar )
attained 1.45 Mio t,thehighest ever known .Production ofisoglucose in
1977 /80was 164000 tons .
6202 Levels ofsugar forhuman consumption for1979 /80remained .
roughly atlast year 'slevel (9.5Mio t)while total consumption of
isoglucose rose by18%to164000 tdrymatter .About 1%oftotal
production waschannelled forindustrial purposes .Asaresult ofrising
production andstagnant consumption ,self supply intheCommunity rose from
125% in1978 /79to130% .Nosugar wasoffered forpublic intervention during
1979 /80.
Main market features
6203 Noagreement was reached intheCouncil during theearly part of
1980 onanew sugar policy for 1980-1985 .Inconsequence ,anextension of
thestatus quowasdecided upon forthe 1980 /81year along with anincrease
intheintervention price forwhite sugar of5.3% overall differentiated
according toitsdifferent components .
6204 However ,there was awide measure ofagreement intheCouncil to
continue aquota system for alimited period based ontheprinciple that
disposal oftheentire quantity ofsugar produced inexcess ofCommunity
consumption should betheresponsibility oftheproducers .Itisonthis
basis that theCommission haspresented itsproposals for anewsugar
regime inSeptember 1980 .
6205 Market prices for 1979 /80remained close totheintervention
price insurplus areas intheCommunity ;they were higher intheUK .Intra
trade once more declined asaresult ofproduction increases indeficit
Member States such asItaly and theUK.
World market
6206 Asaresult ofrecord production levels in1979 /80,the
Community developed anexport programme amounting to4Mio t.This total
includes ACPsugar (1.25 Mio t),Community produced white sugar (2Mio t)
andsugar contained inprocessed products .For 1980 /81theexpected export
programme is4.0Mio t.
6207 This hascoincided with favourable trends onworld market prices .
While theprice level hasfluctuated considerably over thepast year ,it
hasremained above theintervention price level for1980 /81since the
beginning ofMay .AttheendofSeptember 1980 ,theworld price level
reached about 170% oftheECintervention price .Asaresult ,instead
ofrefunds theCommunity hasbeen charging export levies which are
counted asreceipts fortheCommunity budget .Thus nodisposal costs are
being incurred while asteady revenue isbeing obtained with stable
internal prices .

-9-
6208 Inthemeanwhile ,thecommitment toimport 1.3Mio tofACPsugar
hasbeen renewed inthecontext oftheLome IIConvention ;this sugar is
primarily disposed ofontheUKmarket .
Fruit andvegetables (Tables M.11.-)
6300 In1979 ,thesector offresh fruit andvegetables represented
11.9% ofthetotal final agricultural production intheCommunity ,similar
toprevious years .Pear and apple production was slightly down while
peaches remained atthe same level as1978 ;vegetable production also
decreased byabout 1%to24.4 Mio t.Fruit consumption rose by8.8% to
24.3 Mio twhile thelevel fell forvegetables by1.5% incomparison to
1978 .
Market prices fluctuated considerably over theyear andwere supported in
several instances bytemporary measures like countervailing charges (1)on
imports andoccasionally bysafeguard measures (2).Quantities withdrawn of
apples (6.8% total production ),peaches (3.7% ),pears (2.6% )andtomatoes
(3.4% )withdrawn were greater in1979 /80than 1978 /79butwithdrawals were
down fortheother products e.g. cauliflowers .
6301 Turning totrade ,thetotal imports offresh fruits in1978 /79
remained atabout thesame level astheprevious year -about 4.5Mio tor
more than 7times thetotal export volume .Novoluntary restraint was
requested from Southern Hemisphere suppliers owing totheir anticipated
export levels ,aswell asthesituation ontheCommunity market .Intra -
Community trade remained stable atabout 3.5Mio t.
6302 Total imports ofvegetables were 3.1Mio tin1978 /79,nearly three
times thevolume ofexports .Intra -Community trade wassignificant reaching a
level of4.6Mio t(anincrease of7%over 1977 /78).
6303 Thetrading pattern was alittle different forprocessed fruit
andvegetables .Imports oftomato concentrate declined by46%while
exports increased by33% ;intra trade increased by25% .Asimilar
development was observed forpeeled tomatoes .Apart from these features ,
themost significant element in1979 intheprocessed fruit andvegetables
sector was the spectacular rise bynearly 10times inbudgetary cost
anticipated owing tothelevel ofaids decided upon intheCouncil .
(1)Acountervailing charge -islevied tomake upthedifference
between thereference price for agiven product
and alower entry price forthat product from
anon-member country .
(2)Aprotective (or - istaken when ,byreason ofahigh level of
safeguard )measure imports ofaparticular product from anon-member
country ,the Community market issubjected
toorthreatened with aserious disturbance .

-10-
Livestock products
Milk andmilk products (Tables M.13.-)
Community market
6400 Over thepast fewyears dairy cownumbers have been remarkably
stable intheCommunity with only slight variations around atotal of25
million head inspite ofsignificant changes inthestructure ofdairy
farming .Milk production ,however ,has risen remorselessly astheaverage
yield per cowhasimproved from year toyear (4040kgin1979 ).Themain
impetus forgrowth appears tobecoming from those Member States with lower
yielding dairy cows while those Member States with high yielding cows seem
tohave stabilised for the time being .
Production and consumption
6401 Turning totheutilisation ofmilk produced ,anincreasing
proportion ofmilk production (nearly 91.1% )continues tobesold by
farmers todairies forprocessing into milk andmilk products .Deliveries
ofmilk byfarmers todairies in1979 increased by2.8% andareexpected to
rise by2.5% in1980 .Exceptionally ,however ,theincrease wasnotconverted
into theintervention products ofbutter andskimmed milk powder but channelled
instead into such products ascheese (up5%)whole milk powder (up10%),casein
andcondensed milk inorder tosatisfy theexpanding demand ontheworld market .
Itisanticipated that this trend will beconfirmed in1980 with a2.1% decrease
intheproduction ofbutter (-40000 t)andskimmed milk powder (-40000t).
6402 Consumption intheCommunity offresh milk continued torise by1.5%
in1979 (except intheUnited Kingdom where consumption isdeclining )asdid
cheese consumption (upby3%).Butter consumption increased by50000 tbut
only through costly special disposal programmes enabling butter tobesold
atgreatly reduced prices within theCommunity .This masks apersistent
trend ofdecline inbutter consumption over the last fewyears .The same
situation arises forskimmed milk powder where only about 10%ofthepowder
manufactured in1979 could besold intheCommunity atthe fixed price ,the
rest being sold forfeed tocalves (65% )andpigs andpoultry (25%).

Main market features
6403 Theprincipal effort inthemilk sector hasbeen tofind outlets
fortheincreasing volume ofmilk products atthecheapest unit cost ,
either internally orexternally .During 3979 /80and 1980 /81thedisposal
programmes have been sufficient tocontinue the reduction ofintervention
stock levels forbutter and skimmed milk powder even though theunit rate
ofaidfor aconsiderable number ofthem (e.g. aidforcasein ,forskimmed
milk powder andskimmed milk foruse inanimal feed )hasbeen reduced .At
the end ofSeptember 1980 ,public intervention stock levels forbutter and
skimmed milk powder were atsome 180000 tand 239 000 trespectively .A
more commercial element has thus been restored tothe internal markets for
these products .
6404 Within the 1980 /81marketing year theCouncil decided ona4%
increase for thetarget price ofmilk ;intervention prices forbutter and
skimmed milk powder were altered accordingly .Atthe same time ,however ,
theCouncil also agreed toapply aflat rate levy of2%onmilk production
andstated that anadditional levy would beapplicable inthe 1981 /82
marketing year should the increase ofmilk delivered todairies in1980
exceed 1.5% .
World markets
6405 World milk production in1979 increased less than 1%compared
with 1978 .This isonly half the increase in1978 and isnotably due to
thereductions inUSSR milk production (more afunction ofdeclining yield
percow -3%less in1979 than in1978 )-than with falling cownumbers .
6406 Theworld market continued toexpand in1979 forallmilk
products .The total butter /butteroil market ,including food aid ,increased
by38%in1979 compared with 1978 (reflecting alarge increase inimports
bytheUSSR ).Increases inother markets were less spectacular but
nevertheless substantial .World markets rose by9%forcheese (increased
imports byIran ,Saudi Arabia andJapan );by13%forwhole milk powder
(increased demand world wide );by7%forcondensed milk (increased imports
from Greece ,Libya andsome Gulf states )andby7%forskimmed milk powder .
6407 Community exporters took full advantage ofthis expanding world
market formilk products ,export continuing tobethecheapest method of
disposal ofsurpluses inthis section .Only inthecase ofcondensed milk
was there aslight deterioration intheCommunity share ofthemarket share
(seeTable M.13.11 ).Thus notonly didexport quantities increase formost
milk products butalso theunit rate ofrefund wasconsiderably reduced inthe

-12-
first half of1980 owing torising world prices .Food aidalso continued
atalevel of150000tonnes skimmed milk powder and 45000 tonnes
butteroil .Atthesame time imports ofdairy products continued in19,79 ,
theCommunity importing about 12%ofthetotal world cheese market (78000
tonnes )and 15%ofthetotal butter market 118000 tonnes almost all from
New Zealand .
Beef andveal (Tables M.14 .-)
Community market
6500 Beef production takes place onabout 2/3rds ofthetotal number
offarms intheCommunity ,being mostly concentrated inmember states with
large areas ofagricultural land available .Although animal numbers have
remained relatively stable in1979 (about 78Miohead ofwhich 31Mio
cows ),anoticeable trend towards larger size units hasbeen observed over
thepast several years ,thenumber ofproducers decreasing atarate of
4.5% perannum .
Production and consumption
6501 There arethree main forms ofenterprise inthebeef sector :
young calves (from themilk herd ),adult beef animals raised onpasture and
young male fattening animals fedoncereal feeds .Production continued to
increase in1979 after having slipped for ashort period during 1976 and
1977 .Total beef production wasupby6.2% in1979 compared to1978 to6.8
Mio t.
6502 Inspite ofpersistent problems inthegeneral economy ,consumption
once more rose by1.5% in1979 to6.8Mio t;estimated figures for 1980
indicate that adownturn islikely owing totheunfavourable price
relationship between beef andother meats .Price comparisons provided in
table -provide auseful guideline .
Main market features
6503 During 1979 andthefirst half of1980 ,producer prices forbeef
didnotrise above theguide price .Onaverage in1979 theproducer price
was85.25% oftheguide price while during 1980 itwasdown to80%ofthe
guide price .Inthese circumstances ,with ahigh level ofstocks at310
000 ton1January 1980 ,theCommission 'smajor policy objective hasbeen
toease themarket tosome degree through higher exports .This hasonly
been partially successful (seepara .6506 ).

-13-
6504 Inaddition tomaintaining ahigh level ofexport refunds andthe
possibility ofadvance fixing (1),theCommission has taken aseries of
measures supporting the internal beef market including measures tostimulate
consumption (e.g. cheap sales from intervention tosocial welfare categories )
aswell astheintroduction ofasuckler premium decided inthe Council for
the 1980 /81marketing year .Atthe same time ,theCouncil decided toraise
theguide price by4%butmarket prices have notmoved upwards inparallel .
Inconsequence purchases into intervention have risen and stocks areexpected
tobeabout 360 000 tat31December 1980 .
During the summer of1980 ,there was considerable consumer disquiet inthe
Community about theuse ofhormones inveal production leading tosignificant
upheaval inthemarket .Inresponse tothis ,theCommission will come
forward with proposals banning the use ofhormones inveal production .
6505 Intra-Community trade has stabilised atabout 1.3Mio tover the
past three years .
World markets
6506 TheCommunity isthethird largest beef producer intheworld ,
producing about 15%ofthetotal world production (well behind theUSand
theUSSR ).Asaresult ,theCommunity cannot play thedominant role inthe
world market asaprice leader asitispossible todofordairy products .
TheCommunity 'sshare oftheworld market during thepast decade didnot
exceed 15% .
6507 Nevertheless ,beef exports in1979 more than doubled the
quantities exported in1978 (168000 t)andareexpected toreach arecord
level of550 000 tin1980 .Principal destinations in1979 were Mediterranean
countries (30% )andEastern countries (30%).Thus anactive export
programme hasbeen pursued but ataconsiderable cost through ahigh unit
rate ofexport refund and the loss onsale ofintervention beef .
6508 Imports from non-member countries continued through 1979 atalevel
ofaround 400 000 t,roughly equivalent totheamounts imported each year
since 1973 .Most imports benefit from special import regimes either
bilateral ormultilateral (the latter inthecontext ofthe results
negotiated under theauspices ofGATT ).
Pigmeat (Tables M.15.-)
Community market
6600 Although thenumber ofpigplaces in1979 hasonly increased by
0.2% since 1978 ,pigmeat production rose by5%during 1979 to9.8Mio t.
Consumption in1979 rose only by3%to9.5Mio t,meaning that the level of
self sufficiency reached 101% .
6601 Price levels onrepresentative markets during 1979 /80have
remained consistently below thebasic price .The situation hascontinued
inthis manner during 1980 .Asaresult ,aseries ofmeasures have been
introduced tosupport producer prices .These have included aids ona
temporary basis forprivate storage aswell asacloser application of
supplementary amounts onimports when thesluicegate prices (2)have not
been respected .
(1)Advance fixing provides atrader with thepossibility ofknowing the
level ofanexport refund afewmonths inadvance ,theamount varying from
product toproduct .
(2)Sluicegate Price istheoffer price toberespected bythird countries
exporting totheCommunity

-14-
World market
6602 TheCommunity isatraditional exporter ofprocessed pigmeat
products of(e.g. sausages ).In1979 ,however ,fresh products have gained
inimportance through theapplication ofexport refunds tothem .
Conclusions and outlook for Community agriculture
6700 From thepreceding analysis oftheprincipal agricultural sectors
ofcereals ,sugar ,fruit andvegetables ,milk products ,beef andpigmeat
there are several conclusions tobedrawn which will have asignificant
effect onmarket management inthe short tomedium term .Some ofthese are
ofageneral nature ,others more particular tothe relevant sector .
6701 The first general observation isthat structural adjustments accompanied
bytechnical progress have been rapidly taking place intheagricultural
sector ,leading tolarger farming units and asmaller number ofproducers .
Asaresult ofimproved productivity ,production hasbeen rising steadily
inall the sectors examined .
Consumption has not always risen tothe same extent .Insome cases ,
consumption isroughly keeping pace with production increases (e.g.
pigmeat );sometimes only atsignificant budgetary cost (e.g. milk products ).
Inothers ,there isanevolving situation ofoversupply which has sofar
only been resolved byencouraging anactive export programme e.g. beef and
sugar andalso milk products (alongside expensive internal disposal
programmes ).
Inaclimate ofincreased awareness ofbudgetary limitation ,export has
been thepredominant means ofdisposal asitisthecheapest method
currently available inmost sectors .Inconsequence ,stock levels ofsome
major commodities are atpresent attheir lowest levels forthepast three
years .Atthe endofSeptember 1980 stock levels were at180000 tfor
butter and 239 000 tforskimmed milk powder .
Itshould benoted however that thephenomenon ofsurplus production isnot
restricted totheagricultural sector alone .
6702 Asecond general observation isthat intra trade hastended to
stagnate inmost sectors between 1978 and 1980 inmarked contrast tothe
considerable increases intheperiod 1973-1978 after accession totheCommunity
fortheUnited Kingdom ,Denmark andIreland .This isparticularly
noticeable inthecereals andbeef sectors .This mayonly benatural ina
climate ofeconomic recession when purchasing power hasfallen andwhere
there islittle population growth (fewer extra mouths tofeed ).Itisalso
indicative that theCommunity will increasingly depend onexports for
surplus disposal should production incertain surplus sectors notbe
brought under control .

-15-
6703 This isadanger signal forthefuture asthepresent policy
orientation hasdepended notonly onavailability ofbudgetary funds (over
half theexpenditure inthemilk sector of4.9billion EUA in1980 is
expected togoonexport refunds )butalso onavailability ofexport
markets .Exports ofsugar andmilk products inparticular have been
facilitated inboth respects byproduction shortages inthemajor producing
countries -either through climatic limitation ordomestic policy
objectives -which has led tohigh world market prices and ascarcity of
supplies .
6704 Thirdly ,intheshort term ,itisexpected that world price
levels forsugar and cereals will remain atrelatively high levels during
most of1981 .Inthemedium term ,onthebasis ofmost reliable forecasts ,
demand forcereals particularly from developing countries isvery likely to
continue .Inaddition ,fordairy products andbeef ,itishoped that the
new international arrangements negotiated inthe framework oftheGATT will
bring some price stability aswell ascontinued development intheworld
markets .Current indications are ,however ,that while theworld market for
dairy products should remain buoyant during 1981 the rate ofgrowth is
likely toslow and competition toincrease over themedium term .
6705 Lastly ,enlargement oftheCommunity toinclude Greece on1
January 1981 and then Spain andPortugal inafewyears time could well
lead toimbalance intheMediterranean product sectors like fruit and
vegetables ,olive oil andwine unless some important changes are ismade to
theexisting regulations .
6706 Turning tospecific comments ,there arethree particular areas
where problems are liable toincrease rather than decline inthenext two
tothree years :
6707 inthemilk sector production iscontinuing toincrease ata
rate above 2%perannum .Unless aproper balance canberestored
tothemarket through production control ,this increase islikely
tocontinue for the next fewyears asthere iswithout doubt
still aconsiderable potential foryield increases throughout the
Community based onexisting technology
6708 inthemeat sector competition islikely tobecome increasingly
sharp intheinternal market between thedifferent meats ofbeef ,
sheep ,pigs andpoultry .Encouragement ofproduction forbeef
and sheep provided through market support systems will ensure a
continued flow ofthese meats onto themarket (the same guarantee
notbeing provided forpigs andpoultry )

-16-
6709 finally ,thesectors ofmilk ,beef andpoultry will beassisted
bytheproliferation ofuseofcereal substitutes inanimal feeds
stretching out from traditional sources ofmanioc and soya to
products such asmaize gluten feed andindustrial by-products
(e.g. breweries ).
Conclusion
6800 Themain problem facing theCommunity over the short tomedium
term inthe agricultural markets istodetermine how the increasing
production volume available canbedisposed of,either internally or
externally ,atreasonable prices ,while safeguarding farmer 'sincomes and
atthe same time remaining within thebudgetary limits provided .If
restraint onproduction incertain sectors isnot exercised ,thus providing
alimit tobudgetary expenditure andbringing themarkets inquestion back
into balance ,thefinancial andpolitical consequences will bevery serious
indeed .

17
1.CEREALS (1)
1.Introduction
(a)Theeconomicsituation :
The1979/80cerealsmarketing yearopenedwithlargestocks,
particularly ofwheat,andtothiswereaddedsubstantial ,thoughnot
record,newcrops.Asaresult,marketmanagement wasdifficult and,
despiterecordexports,theintervention stocksofcommonwheatdoubled
tomorethan2million tonnes.Internal marketdifficulties were
exacerbated byhighinterestrates,makingstock-holding more
expensive ,thoughontheworldmarkettherewasgoodinitialdemand,
mainlyfromEasternEuropeandtheUSSR.Finallythisdemandwasnot
fullyexploited becauseoftheCommunity'sdecisiontolimitexport
salestotheUSSR.Atthestartofthe1980/81marketing year,world
marketpricesareonceagainveryfirm,mainlyasaresultofcrop
reductions following thedroughtinNorthAmerica.TheCommunity
cerealscropontheotherhandisexpectedtoreachanewrecord.
(b)CerealsinCommunity agriculture :
Thetotalareaofcerealsin1979was26.7Miohaor28.7%ofthe
utilizedagricultural area(UAA).Theirimportance intheland-useof
individual MemberStatesvariedconsiderably ,beingleastimportant in
IrelandandtheNetherlands (7%and12%ofUAArespectively )where
foddercropsandpermanent grasslands aremoreimportant .Theyareof
greatestsignificance inGermanyandDenmark (43%and63%ofUAA
respectively )wherecerealsaccountforabout70%ofthearableland,
theyalsoaccountforahighproportion ofthearablelandin
Luxembourg (70%).Intheremaining MemberStatescerealsoccupy50to
60%ofthearablelandand20to30%oftheUAA.
Thecerealsshareinthefinalproduction ofagriculture isaless
usefulmeasureoftheireconomic importance sinceinmanycasesalarge
proportion oftheproduction isusedforlivestock feedingonthefarm
whereitisproduced .Thismeansthatthefinalproduction ofsuch
cerealsisintheformoflivestock products .ThusinGermany,where
cerealsaccountfor43%oftheUAA,theyonlyrepresented 9.1%ofthe
valueoffinalproduction in1979becauseover40%ofthetotal
quantity produced wasusedforanimalfeedingonthefarmwhereitwas
grown.IntheUK,bywayofcontrast ,cerealsaccountedforonly20%
oftheUAAbut14%ofthevalueoffinalagricultural production
becauseonly16%ofthecropwasfedtolivestock onthefarmwhereit
wasgrown.IntheCommunity asawhole,whereabout27%ofthecrop
wasfedtolivestock onthefarmwheregrown,thedirectcontribution
ofcerealstothefinalproduction ofagriculture was11.2%in1979.
(1)SeeTablesM.l.ltoM.1.10

18
(c)TheCommunity inworld cereals production :
World production ofcereals (excluding rice )in1979 amounted to
1173million t(according toFAOstatistics )ofwhich thequantity
produced intheCommunity was9.7% (9.6% in1978 ).Theproportions
produced bytheother major exporters ofcereals were :United States
25% ;Canada 3%;Australia 2%;Argentina 2% (seetable M1.7).
2.Production
Community cereals production in1979 wasadversely affected bythesevere
1979 winter .This necessitated substantial resowing ofdamaged areas of
winter wheat especially inFrance where they were replaced byspring wheat ,
barley ormaize .Subsequent growing conditions were very good andthe
final production of113.6 million twasonly 2.2% down from therecord 1978
crop .Thetotal area sown tocereals for1980 harvest wasalmost identical
tothe1979 area butwith ahigher proportion ofwheat andless maize than
intheprevious year .After initial fears ofdrought inthespring ,the
heavy rains inJune andJuly had agenerally favourable effect oncereal
yields .Thepreliminary estimates indicate anewproduction record in
1980 ,ataround 118million tor4%more than in1979 .
(a)Common wheat :
Thecommon wheat crop wassown ingood conditions intheautumn of1979
andthearea increased byabout 5%ascompared tothe1978 and1979
crops .Thesubsequent mild winter andgenerally wetsummer have ledto
yields which areexpected toequal orexceed thelevel achieved in1978
(3to4%higher than in1979 ).Production isforecast atmore than 47
million t(+10%),anewrecord .Thequality ofthecrop isnotthought
tobeparticularly good andalthough this canbepartly explained by
thewetweather ,there isalso believed tobeagrowing tendancy among
producers toswitch from high quality varieties tohigher yielding but
mediocre quality varieties ofbread-making wheat .Ontheother hand
theproduction ofvarieties which areonly suitable foranimal feeding
seems tohave stabilised .
(b)Durum wheat :
Thearea ofdurum wheat increased inboth France andItaly in1980 to
reach 1.8million ha(+4%).Most oftheCommunity 'sdurum wheat
production isinItaly where thearea hasbeen quite stable fora
number ofyears .This contrasts with thedeclining area ofcommon
wheat inItaly where durum wheat nowoccupies over 50%ofthetotal
wheat area .Yields arealso expected tobehigher in1980 and
Community production isconsequently expected torise toover 4million
t(+9%).
(c)Rye :
Thearea ofryedecreased byalmost 4%in1980 ,though yields are
expected tobeslightly higher than in1979 .Asaresult production
should decline byaround 2%to2.9million t.
(2)

19
(d)Barley :
Thetotal area sown tobarley forthe1980 crop declined from the
exceptionally high 1979 level (-2%)to9.5million ha.Within this
total ,theswitch towinter barley continued inallMember States ,
though itisespecially pronounced inFrance andGermany :
Area ofwinter barley in%oftotal barley area
:1975 :1976 :1977 :1978 :1979 :1980 (P)
Germany :39% :46% :49% :53% :55% :59%
France :20% :31% :42% :51% :38% :54%
This change hashadtheeffect ofimproving average yields because of
thehigher yields ofwinter barley butithassometimes hadanadverse
effect onquality since some ofthewinter varieties areof6-row
barley which has alower specific weight andgenerally lower value for
animal feeding aswell asformalting .
Yields in1980 areexpected tohave increased by5-6%,partly because
ofthehigher proportion ofwinter barley .There isreported tobea
lower supply ofbarley suitable formalting ,following thewetweather
inJune andJuly .Total Community production ofbarley isforecast at
more than 40million t,some 4%more than in1979 .
(e)Oats :
Thearea ofoats continues todecline (-3in1980 and -5.3% peryear on
average between "1974 "and "1978 "). Production in1980 isexpected to
decrease by5%toabout 7.3million t.
(f)Maize :
Thearea ofmaize intheCommunity wasparticularly high in1979
because itreplaced part oftheFrench winter grain area affected by
frost damage .Community production wasarecord 17.3 million t.In
1980 ,thearea sown returned toamore normal level ,at2.8million ha
(-8%).Production isconsequently expected tobelower than in1979 at
around 16.1 million t(-8%).
3.Consumption
In1978 /79thetotal volume ofcereals used intheCommunity amounted to
115.9 million t,i.e. ,4.0% more than in1977/78.About 35%consisted of
wheat and65%ofcoarse grains ,ofwhich 30%wasaccounted forbybarley
and24%bymaize .Theutilization ofallcereals wasmade upasfollows in
1978 /79 :
Human consumption andindustrial use ,34.3% (34.7% in1977/78);animal
feed 61.0% (60.7% in1977/78);seed andlosses ,4.7% (4.6% in1977/78).
Theproportions vary substantially from cereal tocereal ,from oneMember
State toanother andfrom year toyear ;thefollowing table gives the
breakdown bycereals for1978 /79 :

20
Cereal consumption in1978 /79-breakdown bycereal
Human Animal Industrial Seed and Total
consumption consumption : use
•losses
% % % % %
Wheat (Durum
andcommon ) 64.3 28.9 0.8 6.0 100.0
Ryeandmeslin 41.2 51.3 1.8 5.7 100.0
Barley 0.3 77.7 15.9 6.1 100.0
Oats and sum-
mer mixed corn 3.8 91.7 0.0 4.5 100.0
Maize 3.5 78.1 17.2 1.2 100.0
(a)Human consumption :
Nethuman consumption increased by0.9% between 1977 /78and1978 /79.
Thepart ofthis increase accounted forbypopulation growth wasonly
very small andpercapita consumption increased by0.7% .Themost
significant part ofthis increase related toconsumption ofwheat in
France andItaly ,though attheCommunity level there hasalso been a
trend toincreasing consumption ofcommon wheat over recent years (0.6%
perannum over "1973 /74"to"1977/78"). Durum wheat consumption has
tended todecline (-2.2% perannum over "1973/74"to"1977/78"),though
in1978 /79there wasanincrease inconsumption inItaly (+4.8% ).
Nethuman consumption ofcereals in1978 /79-breakdown bycereal
Net overall
human consumption
('000 t)Netpercapita
Kgpercapitaconsumption
%change
1977 /78to
1978 /79
Wheat -common 16876 64.9 0.8
-durum 2722 10.5 3.8
Rye 1048 4.0 -2.3
Barley 70 0.3 -6.9
Oats 176 0.7 4.5
Maize 674 2.6 -9.1
(b)Animal feed use :
Theimportance ofcereals inanimal feeding reached apeak in1972/73
and1973/74when they accounted formore than 26%oftotal energy
requirements (expressed inFodder units ).This represented over 62%of
theenergy supplied byconcentrate feeds (i.e. ,excluding bulky fodder ,
root crops andgrazing ,etc.). This proportion hadfallen to55.8% by

21
1977 /78whilst thepart taken bymanioc hadincreased from 1.6% to3.7%
andthat foroilcakes from 12.3% to14.4% .Thetotal Quantity of
cereals fedtolivestock fell from apeak of72.3 million tin1973 /74
to67.1 million tin1976/77,since when ithasonly partly recovered ,
toreach 70.7 million tin1978 /79.This decline isprincipally dueto
thesubstitution ofcereals byproducts such asmanioc ,oil-cakes anda
variety offood industry by-products which maybeimported into the
Community with little ornoimport charge .Themost important direct
substitute forcereals ismanioc ,theimports ofwhich rose from 2.3
million tin1974 to6million tin1978 .Supply difficulties in1979
and1980 have temporarily stabilised imports ofmanioc ataround 5.5
million tandwhilst itispossible that further expansion canbe
controlled ,there islikely tobestrong growth intheimports ofother
products .Agood example ismaize gluten feed ,imports ofwhich have
risen from 0.7 million tin1974 to2million tin1979 and are
expected torise inline with maize alcohol ("gasohol ")production in
theUnited States ,since itisaby-product ofthis process .
Thefollowing table compares theconsumption ofdifferent cereals on
thefarms where they aregrown with theanimal feed useofcereals
which pass through themarket (usually purchased ascompound
feedingstuffs ).
Animal feed useofcereals in1978 /79,onthefarm where grown and
through themarket -breakdown bycereal
Cereals Used onfarms Marketed Total
1000 t 1000 t
1000 t %
Wheat 5627 6214 11841 16.8
Rye 1009 558 1567 2.2
Barley 14468 12589 27057 38.3
Oats etc. 6184 1692 7876 11.1
Maize 4279 17332 21611 30.6
Other 80 657 737 1.0
31647 39042 70689 100.0
Total
44.8% 55.2% 100.0%
Upto 1975/76,theanimal feed useofcereals onthefarms where they
were grown accounted foraround 50%ofthetotal feed use .Since
1976/77,however ,this proportion hasfallen tounder 45% .Inpart ,
this shift isduetoare-assessment ofmaize used directly onthefarm
inItaly butitmayalso beduetoagreater tendency forfarmers to
sell cereals andtopurchase compound feedstuffs .Agreater proportion
ofryeproduction ,forexample ,isbeing sold byfarmers andless is
being used onthefarm .Production ofoats ,acereal which islargely
fedonthefarm where grown ,isalso declining rapidly .

22
(c)Industrial use:
Theuseofcerealsforprocessing andindustrial purposesincreased
considerably in1978/79(+7.2%).Thisincrease ,whichrepresents a
strengthening oftheprevioustrend,hasaffected maize,barleyand
wheat.Infacttheindustrial useofwheathasincreased by52%thoughitstillonlyaccountsfor3%ofthetotalindustrial useofcereals.
Mostoftheremainder isaccounted forbybarley(52%)andmaize
(45%).Theuseofbarleyinbrewing,whichaccountsfor91%ofthe
industrial useofbarley,wentupby7.5%,thisincrease beingmainly
inGermanyandtheUnitedKingdom.Theonlyotherindustrial outlet
forbarley,distilling (mainlyinIrelandandtheUnitedKingdom),
declined by13.1%.Theprocessing andindustrial useofmaizehas
increased by7.4%duetohigherutilisation inGermany,theBenelux
countries andtheUnitedKingdom,whichmorethanoffsetthedecrease
inItaly.
(d)Self-supply :
Thefinalbalancesheetsfor1978/79showedthat,contraryto
expectations ,theself-supply didnotexceed100%.Thiswasdespitea
recordlevelofproduction (115.4milliont)anditisexplained byan
increase of4.4milliontinthelevelofdomestic use(115.9million
t).Whilsthumanconsumption andindustrial usetogetherincreased by
1milliontonnesthemajorpartwasduetotheincreased animalfeed
use.Suchalargeincreaseisdifficult toexplaininviewofthe
growingimportsofcompeting products ,thoughitsoriginmaybepartly
statistical .Thiscanarisewhereanimalfeeduseisassessed asa
residual iteminthebalanceandsoisaffected byerrorsofestimation
inother'items.
Summaryofthecerealbalancesheetin1978/79
(Miot)
Common
wheatDurum
wheat RyeBarleyOats
etc.MaizeOther
cereals Total
Stockchange(l )-2.5 --0.1-0.4-0.2-0.5 --3.7
Netexternal
balance (2)-4.2 +0.3-0.3-4.0 +0.2+11.8 +0.3 +4.1
Domestic use
lessproduction -6.7 +0.3-0.4-4.4 -+11.3 +0.3 +0.4
Self-supply %118.1 93.3113.5112.6 99.9 59.0 59.8 99.6
(1)+=stockreduction ;-=stockincrease
(2)+=netimports ;-=netexports

23
In1979/80thedomesticuseofcerealsappearstohavebeenslightly
lower,ataround114milliont,sotheself-supply rateisestimated at
almost100%,despitethereducedlevelofproduction .Infactitis
probablethattotalexportsslightly exceededtotalimportswiththe
resultthatstocksdeclined .Afeatureofthismarketing yearwasthe
lowlevelofmaizeimports,ataround10milliont,following thelarge
Community cropin1979.
(e)Stocks :
Theestimation ofstocksinthedifferent MemberStatesisundoubtedly
ofveryvariable accuracy asbetweenbothMemberStatesandstock
positions .According tothebestavailable estimates ,thetotalstocks
ofcerealsintheCommunity atthebeginning ofthe1979/80marketing
yearamountedto14.7milliontofwhich1.6milliontwereheldon
farms.Ofthe13.1milliontofstocksinotherpositions (including
intervention stocks),commonwheataccounted for6.9milliont,durum
wheatfor0.6milliont,barleyfor1.8milliontandmaizefor2.7
milliont.
By1August1980theoff-farmstocksareexpectedtohavefallento
about11.5milliont;including around6milliontofcommonwheat(13%
ofnormalproduction ),0.3milliontofdurumwheat(7%ofnormal
production ),2.2milliontofbarley(5%ofnormalproduction )and
about2.1milliontofmaize(13%ofnormalproduction butonly8%of
consumption ).
4.Trade
(a)Between MemberStates :
Tradebetween MemberStatesoftheCommunity fallsintotwodistinct
categories ,tradeincerealsofCommunity originandtradeinor
transhipment ofcerealsofthirdcountryorigin.Briefly ,thelatter
consists ofimportintooneMemberStateviaanother Member
State,generally forsoundeconomic reasonssuchasvesselsizeandport
charges ,butoccasionally inordertobenefitfromanomalies arising
fromthemechanisms ofthecommonagricultural policyandinparticular
itsmonetary compensatory system.Themajorityofthistradeconsists
ofimportsofgrainultimately destinedforGermanyandtheUnited
KingdomviathelargeBeneluxports.Thecerealmostcommonlyinvolved
ismaize,theexportsofwhichfromtheBeneluxcountries toother
MemberStatesamounted to1.9milliontin1978/79.Therehasalso
beenasignificant tradeofthiskindincommonwheat(1.1milliont
fromtheBeneluxcountries in1978/79).
ThemajorCommunity supplierofcerealstootherMemberStatesis
France.Frenchdeliveries in1978/79totalled 10.4milliont
(including cerealproducts )ascomparedwith10.8milliontin
1977/78.Deliveries ofFrenchwheatin1978/79were4.3milliontand

24
in1979 /80declined to3.8million t,mainly because ofreduced
deliveries toBelgium ,Italy andtheUnited Kingdom .Deliveries of
barley increased slightly in1979 /80,from 2.1to2.3million t,the
main customers being Belgium ,Germany andItaly .However asignificant
part oftheshipments toBelgium ,which in1979 /80totalled 0.9million
tofbarley and0.5million tofwheat ,arebelieved tohave been for
subsequent export tothird countries viaBelgian ports .French
deliveries ofmaize toother Member States went upfrom 2.7million t
in1978 /79to3.3million tin1979 /80,theprincipal customers being
theBenelux countries ,Germany ,theUnited Kingdom andIreland .
Intra-Community trade incereal products isalso ofincreasing
importance ,including such products aswheat flour andsemolina ,barley
malt andmaize grits .
(b)With third countries :
Imports ofcereals from third countries (reduced bytheestimated level
oftranshipments )amounted to18.5 million tin1978 /79 (3%less than
in1977 /78)ofwhich 12.3 million twere maize (2%more than in
1977/78).In1979 /80thepreliminary estimates indicate imports of
about 16to17million tofcereals ,including only about 10million t
ofmaize .In1978 /79over 80%ofthemaize imports came from the
United States -with theremainder coming mainly from Argentina .
Imports ofbarley andmalt in1978 /79amounted to1.1million t.The
barley came mainly from Canada (74% )andAustralia (15%).Imports of
barley in1979 /80areestimated ataround 700000 tandagain consisted
mainly ofimports ofCanadian barley into Italy .
Imports ,ofcommon wheat remained unchanged between 1977/78and1978/79
at3.5million tandareexpected tobesimilar in1979 /80.Ofthis
total itisbelieved that some 0.3million twere temporary imports
under inward processing arrangements forsubsequent re-export inthe
form offlour .Durum wheat imports have decreased from 1.5million t
in1977 /78to0.9million tin1978 /79because ofthe improved Italian
crop .Around 95%ofthe1978 /79imports came from North America and
most oftheremainder from Argentina .Itisexpected that imports of
durum wheat in1979 /80will beatabout the same level .
Total exports ofcereals andcereal products in1978 /79rose by34%to
14.4 million t.Within this total ,common wheat andflour accounted
for7.7million t.Theexports ofwheat andwheat flour in1979 /80are
estimated atabout 10million twhich were broken down asfollows :9
million tofcommercial sales ,ofwhich almost 3.5million tinthe
form offlour ,and 1million tasfood aid ,ofwhich 0.5million tin
theform offlour .Theestimated total ofcommercial flour exports
includes around 0.3million texported under inward processing
arrangements ,apractice ofconsiderable significance among millers who
arefavourably located (i.e. inports )because ofthesubstantial
economies resulting either from thepurchase ofcheap third country
wheat orfrom thesaving ofimport levy onimported wheat when the
operation isdone onanequivalence basis (i.e. export offlour of
Community origin setagainst import ofwheat ofthird country origin ).
Commercial exports ofwheat in1978 /79went totheCommunity 'sregular
clients inWest and North Africa aswell astocountries inthe
European area ,including Poland andPortugal .In1979 /80thepattern

25
wassimilar,thoughtherewerealsoexportstoEastGermany,
Czechoslovakia andtheSovietUnion.Flourexportscontinuedtogoto
awidevarietyofdestinations ,withEgypt,SriLanka,Syria,Saudi
ArabiaandVietnamamongthemostimportant.
Therewereagainlargeexportsofbarleyin1978/79andin1979/80.
Totalexportsofbarleyandbarleyproducts(mainlymalt)amountedto
5.1milliontin1978/79,ofwhich1.5milliontwasintheformof
products.Thequantities exportedin1979/80arebelievedtohavebeen
slightlylower,thoughtheprincipaldestinations ofthebarleywere
onceagainotherEuropeancountries ,theSovietUnion,the
Mediterranean areaandtheMiddleEast.InbothyearsFrancewasthe
dominantsupplier(includingFrenchbarleyexportedthroughtheBelgian
ports)thoughtheUnitedKingdomandDenmarkwerealsoimportant .
5.Prices
(a)Commonprices:
Themostimportantfeatureofthepricesfixedforthe1980/81
marketingyearwastheagreementinprincipletoreducetherye
intervention pricetothelevelofthecommonintervention pricefor
coarsegrainsandtherebytointegrateryeintheso-called"silo"
systemofgrainprices.Thiswilltakeplaceinthreestages,the
firstin1980/81,withcompletealignmentin1982/83.In1980/81the
ryeintervention pricewasincreasedbyonly2.5%whereasthecommon
intervention priceforbarleyandmaizewentupby4.5%.Thereference
priceforcommonwheat,atwhichlevelintervention takesplacein
practice,wasincreasedbyA.25%,atokenimprovementintheprice
relationship betweenwheatandfeed-grains .Inviewofthefactthat
thispricerelatestowheatofthelowestbreadmaking quality,the
pricesupportforcommonwheatremainsexcessively high(12.7%above
thecommonintervention priceforbarleyandmaize).Therewasalsoa
slightimprovement inthecompetitive positionofcommonwheatin
animalfeeding,asaresultoffeedgraintargetpriceincreasesof
6.25%(2%pointsmorethantheincreaseinthecommonwheatreference
price).Asregardsdurumwheat,thedirectaidwasonlyincreasedby
2.5%buttheintervention pricewentupby4.5%,soslightlywidening
thegapbetweenthepriceofdurumandthepriceofcommonwheat.The
durumwheatintervention priceisnowatalevelequivalentto148.6%
ofthecommonwheatreferenceprice,afactorofgrowingimportancein
thecomposition ofpastaproducts.
(b)Internalmarketprices:
1979/80,likethepreviousmarketingyearwascharacterized by
surplusesofbothbarleyandwheat.Thesesurplusesdepressedprices
toaroundtheintervention pricelevelor,inthecaseofcommonwheat,
thereferencepricelevel(thereferencepricewas12.7%abovethe
intervention price).Thissituationcontinuedthroughoutthemarketing
yeardespitelargeexports.Themostnotableexceptiontothese
generalobservations wasthesituationinItalywherethepricesof
commonwheatandfeedgrainswerearoundorabovetheirrespective
thresholdprices;thepriceofdurumwheathoweverremainednearerto
theintervention price.

26
Averaae difference between market price andintervention price in
1979 /80
{%)
Common wheat
r^i «T^Iinn
Breadmaking Otheruururn
wheat Barley Rye Maize
quality
Germany 13.1 10.9 X 1.6 4.0 X
France 12.1 13.2 X 3.9 X 11.4
Italy 26.7 X 7.0 X X 18.5
Netherlands 13.3 X X 8.7 6.6 X
Belgium 13.8 X X 3.3 X X
United Kingdom 12.2 9.6 X 3.0 X X
Denmark χ X X 0.1 3.8 X
Consideration ofthecommon wheat market iscomplicated bythe
existence oftwosupport price levels ,theintervention price andthe
reference price (which only applies towheat of"breadmaking
quality "). Thecriteria used todefine "breadmaking quality "andwhich
areapplied tothereference price aresuch that theprice ofmost
kinds ofwheat in'theCommunity ,even those which arenotof
"breadmaking quality ",tend towards thereference price .This is
because thedifference between theintervention price andthereference
price isgreater than isjustified bythenormal price "spread "found
onthemarket .This means that support buying atthereference prices
stops thelower quality wheats being sufficiently competitive onthe
animal feed market .However theabsence ofsupport buying after
October 1979 allowed market prices tofall tolevels asmuch as5%
below thereference price forbreadmaking wheat andthereby encouraged
theuseofwheat inanimal feeding .
(c)World prices :
Atthebeginning ofthe1979 /80marketing year world stocks ofcereals
were very high ,aswasgrain production intheUnited States ,the
world 'slargest grain exporter .Ontheother hand ,production was
lower intheother exporting countries andthere wasstrong import
demand from theUSSR andEastern Europe .Asaresult ,market prices
throughout themarketing year were generally higher than in1978 /79.
Atthebeginning ofJanuary 1980 theUnited States announced its
intention tolimit sales ofgrain totheUSSR andthis measure was
supported bytheother major exporting countries except Argentina .In
practice this hadtwoeffects ontheworld market :thefirst wasto
depress prices temporarily ,especially asregards maize ;thesecond was
togive Argentine grains aprice premium over grains from other origins
because thequantity available forexport from Argentina wasnot
sufficient tosatisfy theremaining needs oftheUSSR .Towards theend
ofthemarketing year prices remained very firm because ofthe
uncertain production outlook inmany countries .

27
Highest andlowest monthly average prices in1978 /79-
CIFAntwerp /Rotterdam
TypeHighest : Lowest
ECU/t Month ECU/t Month
Common wheat :
Soft Red Winter II
Dark Northern
Spring 11/14%153.54
151.32May1980
July 1980135.23
141.96April 1980
June 1980
Barley :
Canada Feed I 122.38 October 1979 100.73 May1980
Maize :
Yellow Corn III 108.52 July 1980 92.34 January 1980
Durum wheat :
USHard Amber
Durum III 212.24 July 1980 162.38 August 1979
(d)Consumer prices :
Bread prices increased byanaverage ofunder 10%between 1978 and
1979 ,rather less than inprevious years .Thegreatest increases
(12-17% )occurred inFrance ,theUnited Kingdom andIreland .The
degree towhich those increases were duetowheat prices isprobably
very small though itremains difficult todetermine since bread prices
areprincipally determined bydistribution andmanufacturing costs and
bygovernment price controls and/orconsumer subsidies .Moreover these
increases arevery much smaller oreven negative when expressed in
relation tothegeneral index ofconsumer prices .
6.Short-term outlook
Community cereals production in1980 isexpected toestablish anewrecord
ataround 118million t.This should mean anoverall netsurplus of
cereals ,particularly asimports ofsome cereal substitutes (notably manioc
andmaize gluten feed )areexpected tobehigher than in1979/80.Cereal
imports which consist mainly ofmaize andquality wheat areunlikely to
diminish significantly ,sotheexportable surplus should increase .The
cereal most affected iscommon wheat and ,assuming nochange instock
levels ,exports arelikely tototal 12million tofwhich around 7.5
million tintheform ofcommercial exports asgrain .Barley exports are
expected tobehigher than in1979 /80leading tolower stock levels by
31July 1981 .
Fortunately these exports will take place against abackground ofhigher
world prices especially forfeed grains .Prices have risen asaresult of
thereduced maize crop intheUnited States aswell ascontinuing logistic
problems inCanada andanexpected reduction inAustralian cereal croDS .
Atthesame time import demand continues atahigh level ,particularly in
thecentrally-planned economies .

28
7.Economic aspects ofthemeasures taken
(a)Levies andrefunds
(1)Import levies :
Import levies have moved within quite narrow ranges during the
1979 /80marketing year
-common wheat 70to100 ECU/t
-barley 60to90ECU/t
-maize 70to100 ECU/t
These levies represented around 60to70%ofthecifprice (without
levy )ofimported wheat andbarley but80to90%ofthecifprice
ofimported maize .
(2)Export levies :
Export levies have notbeen applied inthecereals sector since the
end of1975 .
(3)Export refunds :
Export refunds were fixed inthenormal waythroughout the
marketing year forwheat flour ,ryeflour andryeand ,towards the
endofthemarketing year ,fordurum wheat semolina .They were
also fixed inrespect ofexports ofcommon wheat ,barley andoats
tonearby destinations (e.g. Switzerland ,Austria ,Spain and
Portugal ).Refunds oncommon wheat andbarley exports toother
destinations were mostly fixed bymeans oftenders .Initially
there wasonetender forbarley forexport toallzones except Zone
VII (FarEast Asia ),atender forcommon wheat forexport toZone
IV(Latin America ),oneforChina and athird oneforallthe
remaining export zones .Asaresult oftheCouncil 'sdecision to
support theUSlimitation ongrain sales totheUSSR ,thetenders
were amended inJanuary 1980 toremove from them theUSSR and
Eastern Europe .Atthesame time separate tenders were opened for
Eastern Europe (excluding theUSSR )inorder tohave abetter
quantitative control ofexports tothese destinations .In
addition ,thefixed refunds forsome other products were
differentiated inorder tofix dissuasive orzero refund levels for
exports totheUSSR .
Thetenders ranfrom September 1979 toJune 1980 ,with the
following results :
-common wheat ,5.3million taccepted atexport refunds of
45to75ECU/t,
-barley ,2.2million taccepted atexport refunds of50to
75ECU/t.
Refunds formalt continued tobefixed according tothespecial
system which involves aweekly calculation based ontheimport levy
forbarley .This system wasadhered tothroughout themarketing
year ,though theconditions relating totheexport licences were
eased slightly .-Theperiod ofvalidity forthenormal export

29
licencesforcerealsremainedatthemonthofissueplusthetwo
following monthsexceptwhenlicences wereissuedundertheexport
refundtenderwhereitwasincreased tothreemonthsafterthe
monthofissue.
(b)International agreements andfoodaid:
TheInternational WheatAgreement of1971wasextended fromJuly1979
toJune1981whileawaitingthenegotiation ofanewagreement .The
onlyoperational provisions ofthe1971Agreement wereinthe
accompanying FoodAidConvention underwhichtheCommunity was
committed tothesupplyof1287000tofcereals.In1979/80,720500
tofthistotalquantity (or56%)wastobegivenasdirectCommunity
aid.Theproportion ofthisdirectCommunity aidcommitment whichhad
beeneffected by31July1980was53.7%inrespectofthe1979/80
programme and99.5%inrespectofprevious programmes .Asregardsaid
byMemberStates,thecorresponding proportions were37.9%forthe
1979/80programme and94.2%forprevious programmes .
AnewFoodAidConvention wasnegotiated in1980,independently ofthe
negotiations foranewAgreement (covering commercial trade).The
Community'scommitment underthenewConvention ,toapplyfrom1980/81,
isforthesupplyof1650000tofcereals .
(c)Intervention :
Stocksofcommonwheatdoubledduring1979/80asaresultof
intervention purchases ofwheatatthereference price.These
purchases werecarriedoutundertwoseparateseriesofspecial
intervention measures .Thefirstofthesewereduringthemonths
AugusttoOctober1979andcovered 1048000tofwheat.Thesecond
seriestookplaceinMayandJune1979andwasforlimitedquantities ,
allocated toeachMemberState.Thissecondroundofpurchases
amounted to544OOOt.Salesofcommonwheatfromintervention stocks
amountedto539000tofwhichmorethan80%wasexported .Barley
stocksalsoincreased but,likedurumwheatstocks,remainedata
fairlylowlevel(under200000t).Purchases ofryeintointervention
werenotashighasin1978/79buttheywereagainsignificant at
301OOOt(10%oftotalproduction ).Aftersubstantial sales,ofwhich
over70%wereforexport,stocksofryefellsomewhat .

30
Details ofchanges inintervention stocks during 1979 /80were asfollows :
Intervention stock changes in1979 /80 (provisional estimates )
(1000 t)
Common wheat Durum wheat Rye Barley
Stocks on1.8.1979 1008 151 421 59
Purchases 1592 2 301 153
Sales 539 23 365 30
Netchange 1053 -21 -64 +123
Stocks on1.8.1980 2061 130 357 182
Besides thetypes ofintervention involving outright purchase of
cereals there were additional support measures taken forcommon wheat
intheform ofaids forprivate storage (Intervention "B"). Private
storage contracts were concluded inrespect of720000 tofcommon
wheat tobestored from 1June 1980 until itsstaged release ,tobe
spread over thelast three months of1980 .
(d)Endofseason carry-over payments :
Inview oftheexpected pressure ofsupplies onthemarket attheend
ofthe1979 /80marketing year ,payments were granted oncommercial
stocks ofcommon wheat tocompensate foranyreduction inprices ,
expressed innational currency ,atthebeginning ofthenewmarketing
year .Such payments were also made inrespect oftrade stocks ofmaize
insurplus producing regions andmilling industry stocks ofrye ,in
order toreduce the risks ofintervention atthe end ofthe 1979 /80
marketing year .
(e)Uniformity ofprices -Monetary compensatory amounts :
Incommon with other sectors ,cereals still suffer from some disunity
caused bymonetary differences ,though these have been considerably
reduced .
(f)Production refunds :
Production refunds arepaid tocereal andpotato starch manufacturers
inorder toenable them tocompete with starch manufactured from other
rawmaterials .Therefunds fixed forthe1980 /81marketing year were
reduced ascompared with theprevious year ,being 17.23 ECU/tformaize
starch ,24.67 ECU/tforwheat ,21.22 ECU/tforbroken rice and27.74
ECU/tforpotato starch .

31
(g)Durum wheat aid :
This direct income aidtocertain producers ofdurum wheat isaimed at
those areas oftheCommunity where yields arelowyetwhere producers
aredependent onthis cereal forasignificant part oftheir income .
Theaidfixed for1980 /81is19.2k ECU/ha (77.31 ECU/hain1979 /80)and
covers thesame administrative regions (including theless favoured
areas indicated inCouncil Directive 75/268/EEC )asitdid inthe
previous year .
8.Budgetary expenditure
Theexpenditure oftheEAGGF Guarantee Section oncereals was 1563.7
million EUAin1979 ;itisestimated at1616.4 million EUAin1980 andat
2250EUAin1981 ,representing 15.0% ,14.0% and17.6% respectively of
total Guarantee Section expenditure .The 1616.4 million EUAestimated for
1980 breaks down into 1122.4 million EUAforexport refunds and494.0
million EUA for intervention measures .
9.Greek accession
TheCommunity 'sself-supply situation will belittle changed byGreek
accession .However theGreek surplus ofdurum wheat will result inthe
Community becoming anetexporter ofthis cereal .Greek exports ofwheat
flour anddurum wheat semolina will significantly reinforce theCommunity 's
dominant position intheworld market forthese products .

-3£-
2.RICE
1.Introduction
In1979 thearea under rice intheCommunity represented about 0.2% ofits
total UAA and 0.13% ofworld UAA under rice .
Rice isgrown only inFrance andItaly .Some 97.3% ofCommunity production
comes from Italy ;in1979 this represented only 0.27% ofworld rice
production (373million t)(1).
2.Production
In1979 thearea sown with rice intheCommunity was187926ha,a
reduction of6.9% compared with theprevious year .InFrance thearea
represents only 7107hacompared with 13954hain"1974 ",orareduction
of10.6% peryear .
InItaly thearea under rice in1979 totalled 180219ha,orareduction of
5.16% compared with 1978 ,andareduction of1.5% peryear ascompared with
"1974 "(197763ha).
In1979 Community rice production was3.7% more than in1978 andtotalled
1.020 million t(1).This increase ,which occurred despite areduction in
area ,wasmainly duetoahigher yeild perhathan intheprevious year
(54.28 q/ha (1)ascompared with 48.71 q/ha(1)in1978 ).
In1979 French production totalled 28622t(1),orareduction of22.2% ,
whilst Italian production increased by4.8% to992000t(1).Ascompared
with "1974 ",harvests have therefore shown anannual decrease of11.94% in
France ,0.45% inItaly and0.93% intheEEC .
3.Internal consumption
In1978 /79,984000 tofrice were used within theCommunity ,12.9% less
than intheprevious year (1.130 million t).There wasnoappreciable
difference inindustrial uses ortheuseofseed (-5.7% ),buttheusemade
ofrice infeedingstuffs waswell down (-25% )andhuman consumption was
appreciably lower (-13.9% ),falling from 1.016 million tin1977/78to
0.875 million tin1978 /79.Therate ofself-supply ,which had
deteriorated between 1976 /77and1977 /78because ofapoor harvest and
increased uses ,improved considerably between 1977/78and1978 /79for
diametrically opposite reasons (high production figures andreduced
utilization ),rising from 52.7% to80.5% .
(1)Quantities expressed interms ofpaddy rice .
Inthis document the word "rice "means "husked rice "unless otherwise
stated .

33
4.Trade
In1978 /79,imports from non-member countries including thequantities
imported under inward processing arrangements amounted to0.672 million t
ascompared with 0.846 million tin1977/78,oradecrease of20.6% .In
1978/79,thequantities imported under inward processing arrangements may
beestimated atsome 50000 t.This decrease isduetoagood rice harvest
inItaly andtheexistence ofconsiderable stocks atthebeginning ofthe
rice year .
In1978 /79,rice exports amounted to0.477 million t,including the
quantities exported under inward processing arrangements ,ascompared with
0.358 million tin1977 /78,which represents anincrease of33.5% .This
increase inthevolume ofexports isattributable tothesame reasons as
thereduction inimports .
TheCommunity 'sshare ofworld trade in1977 /78was7.4% ofimports and
3.6% ofexports .Theprinciple sources ofimports remain theUnited
States ,Thailand ,South America andSurinam forwhole rice andSouth
America ,Burma andThailand forbroken rice .
Exports traditionally gotoItaly 'simmediate neighbours such as
Switzerland ,Austria ,Portugal andtotheMediterranean countries ,with ,
however ,some special sales tomore remote destinations .
Intra-Community trade increased by8.7% in1978 /79,totalling 0.585 million
t,ofwhich some 50%wasgrown intheCommunity andsupplied byItaly to
theother Member States .Italian exports totherest oftheEECreached
therecord figure ofsome 299000 tduring themarketing year .
5.Prices
a)Common prices
Anumber ofmeasures were adopted inrespect ofthe1980 /81marketinq
year ,some relating tothefixing ofprices andothers tocomplete the
levelling ofprices forround-grain andlong-grain rice (measures
initiated in1979 /80);
1.Theintervention price forpaddy rice wasincreased by6.92% over the
previous year ,thus rising to233.71 ECU/t.Thetarget price forhusked
rice (round-grain andlong-grain )wasfixed at408.16 ECU/t,or6.77%
higher than intheprevious year .

34
2.-Thecorrective amounts which areadded totheintervention price and
theremaining difference (12.09 ECU/t)between thethreshold prices
forthetwovarieties ofrice (round-grain andlong-grain )were
abolished with effect from 1980 /81.
Thecorrective amounts forthedetermination ofc.i.f .prices were
also adjusted toreflect thelevelling ofprices .
Thethreshold price forhusked rice (401.07 ECU )isnowtheonly
price applicable ,following theremoval ofthedifference between
round-grain andlong-grain rice .Thenewprice isthus 6.50% higher
than theprevious threshold price forround-grain husked rice but
only 3.19% higher than that forlong-grain rice .
b)Market prices
During the1979 /80marketing year ,themarket prices inthemain
rice-producing region (Vercelli region )averaged :
forround-grain rice ,14%above theintervention price ;
forlong-grain rice ,15%above theintervention price .
In1978 /79themarket prices forround-grain rice andforlong-grain
rice hadbeen 35%and21%above theintervention price ,respectively .
Theimprovement intheintervention price isalso attributable tothe
increase inprices expressed inItalian lire following thedevaluation
ofthegreen lira by9%in1979 /80.
Despite thealignment ofintervention prices (thefirst stage took place
in1979/80),market prices forlong-grain rice arestill higher than
those forround-grain rice .
In1979 /80,prices inlire forround-grain rice were 1.8% higher than in
theprevious year andthose forlong-grain rice 8.5% higher .
c)World prices
In1979 /80,world prices increased by25.8% inthecase ofround-grain
rice andby23.5% inthecase oflong-grain rice ,ascompared with the
previous marketing year .
Prices forround-grain rice were often higher than those forlong-grain
rice ,since supplies oftheformer were much less plentiful ontheworld
market than supplies ofthelatter .
Since world trade inrice accounts foronly asmall percentage ofworld
production (about 3%in1979 /80),theslightest variation inharvests ,
supply ordemand mayresult inabrupt andsubstantial changes inprices .
(3)

35
d)Consumer prices
Consumer prices are notavailable foralltheMember States .The
following were recorded in1979 :
.Germany :DM3.12 /kg,or+1.8% compared with 1978
.Belgium :BFR52.25 /kg,or-0.2% compared with 1978
.France :FF5.83 /kg,or-A.6%compared with 1978
.Italy :LIT 1124/kg,or+9.3% compared with 1978
.Netherlands :HFL2.40/kg,or-0.8% compared with 1978 .
From 1975 to1979 movements ofprices have been asfollows :
.Germany
.Belgium
.France
.Italy
.Netherlands+2.4%
-2.4%
+15.4%
+140.2%
-9.8%
Thesharp increases inFrance andespecially inItaly bring prices in
these twoproducing countries tolevels close tothose intheother
Member States .
6.Short-and medium-term outlook
Inthe1980/81marketing year ,theareas sown with rice decreased yet
again .InFrance only 6700haarenowunder rice ,which is5.8% less than
intheprevious year .InItaly thereduction wasonasmallerscale (2%):
the area under rice fell to177 145 ha.
Thetendency togive uprice-growing inFrance isduetothedifficulties
caused byenvironmental andclimatic factors (wind andsalinity ofthe
soil )andeconomic factors (higher irrigation costs andlower yields ).
Thus ,thevolume ofproduction fell in1980 and ,ifnoappropriate measures
aretaken ,itwill fall still further or,atbest ,remain atitspresent
low level .
InItaly ,thereduction inarea wasonce more offset bythevery high
yields perhectare ,which should result inaproduction figure close to
1million tonnes (916000tofpaddy ).Interest inmaize-growing ,however ,
seems tobeincreasing attheexpense ofrice-growing ,nowthat themaize
price hasrisen toamore attractive level than that ofrice .
In1979 /80,partly asaresult ofthelevelling ofintervention prices ,
good prices were obtained forround-grain rice ,sometimes even higher than
those obtained forlong-grain rice .This ledtoanincrease intheareas
under round-grain rice inItaly .Production ofthis type ofrice accounted
forsome 30-35% oftotal Italian production in1980 /81(asagainst amere
20%in1977 /78).Demand ontheinternal market and ,toalesser extent ,on
theCommunity market isnowcovered byinternal production rather than
imports .Production should not ,however ,exceed present levels since ,from
January 1981 onwards ,Greek production (some 95000 t)which includes a
high proportion ofround-grain rice ,will becoming ontothemarket .

36
Thesurpluses oflong-grain rice were disposed ofeither asfood aidoras
commercial exports tonon-member countries .Inall ,some 380000 twere
exported ,much ofittotheMediterranean countries .Inview oftheslight
drop inproduction in1980 ,exports will probably decrease accordingly
(some 75000tinthe1980 /81marketing year ).
Thelatest information available concerning supplies ofrice byItaly to
theother Member States in1979 /80points toarecord figure of
299000t(1).These supplies maywell remain atthesame level in1980/81
because ofthegood quality oftherice ofthis marketing year andthe
availabilities ofround-grain andlong-grain rice .
Since the1978 /79marketing year ,therefore ,thesituation with regard to
round-grain andlong-grain rice hasbeen reversed .Intra-Community trade
inround-grain rice hasexpanded .Further production guidance measures
were adopted inconnection with thecommon prices for1980 /81.
These factors taken together could well entail aconsiderable change not
only inproduction butalso intrade andconsumption ofrice inthe
Community .
7.Economic aspects ofthemeasures taken
a)Levies andrefunds
Onaccount ofrising world market prices andthevery slight increase in
thethreshold price in1979/80,import levies decreased sharply as
compared with theprevious marketing year .Forthelast three marketing
years ,,levies have been asfollows :
Since there wasnosurplus ofround-grain rice ,norefund wasfixed for
such rice in1979 /80.
Traditional exports oflong-grain husked rice toAustria ,Liechtenstein
andSwitzerland were subject torefunds of109ECU/t,80ECU/tand
68ECU/tatthebeginning ,inthemiddle andattheendofthemarketing
year ,respectively .Thecorresponding refunds onmilled rice were 136
ECU/t,110ECU/tand85ECU/t.inECU/t
Round-grain husked rice
Long-grain husked rice
Round-grain milled rice
Long-grain milled rice
Broken rice1977 /8 1978 /9
79.57 135.88
126.92 174.59
169.19 197.09
267.98 336.05
60.00 66.381979 /80
92.81
128.22
198.45
285 .46
41.94

37
Forlong-grammilledrice,refundswerelowerthanintheprevious
marketingyearandwerefixedatlevelsvaryingfrom68ECU/tto
127ECU/tfortheperiodfrommid-October 1979tomid-April1989in
respectofexportstoZoneIonly.Norefundswerefixedforother
non-membercountriesduringthemarketingyear.Thus,Communityexports
wentexclusively totheMediterranean countriesandnottoanyremote
destinations ,althoughthelatterdidreceivesomere-exports under
inwardprocessing arrangements .
b)Foodaid
In1979/80,89665tofricewereexportedasfoodaid,including
39022tasnationalaid.Thisrepresents aconsiderable increase
(+185%)comparedwith1978/79,when31500tweresupplied,8000tof
whichwasnationalaid.
c)Quantities submittedforintervention
Since1972/73nointervention measureshavebeentakeninrespectof
rice.
d)Monetarycompensatory amounts
Sofarnomonetarycompensatory amountshavebeenfixedforrice.
8.Budgetaryexpenditure
Expenditure bytheEAGGFGuaranteeSectioninrespectofriceamountedto
42.9millionEUAin1979;theprovisional figurefor1980is50.0million
EUAandtheestimatefor1981is63.8millionEUA,i.e.0.4%,0.4%and
0.5%,respectively ,oftheGuaranteeSection'stotalexpenditure .The
totalof50.0millionEUAbreaksdowninto45.0millionEUAforrefundsand
5.0millionEUAforintervention .
9.AccessionofGreece
Thedegreeofself-supplyintheTenaftertheaccessionofGreecewillnot
changeverymuch.However,Greecemayincreaseitsproductionfurther.

-38-
3.SUGAR AND ISOGLUCOSE (1)
1.INTRODUCTION
The 1979 /80marketing year wasthelast year covered byRegulation (EEC)
No3330 /74,since theCommunity system governing sugar production and
quotas was due toendon30June 1980 ,after aperiod offive years .
This was also thefirst marketing year forwhich aquota system was
applied inthe isoglucose sector .
Itwastherefore time todefine theCommunity 'ssugar policy forthe
future and ,inDecember 1979 ,theCommission proposed totheCouncil
asystem covering both sugar andisoglucose andproviding for a
system ofquotas inboth sectors for anew5-year period and
increased financial contributions byproducers tocover losses
incurred inthedisposal ofsurpluses ofCommunity production .
This proposal wasdiscussed between January andApril 1980 without
theCouncil reaching anyoverall agreement ,with theresult that
itwasdecided toextend thevalidity oftheexisting rules for a
single marketing year ,namely 1980 /81.
During these discussions ,however ,broad agreement was reached
onthecontinuation ofthequota system for alimited period
andontheprinciple that producers should befully responsible
forthedisposal ofanysugar produced which was surplus to
Community consumption .
Itwasonthis basis ,therefore ,that theCommission submitted
totheCouncil inlate September 1980 anewproposal onthe
common organization ofthemarket insugar and isoglucose .
Sugar andCommunity agriculture
In1980 thearea under sugar-beet increased only slightly ,
despite thefact that world market prices forsugar hadcome
much closer toCommunity prices inwinter 1979 /80,atthe
time when beet-growers decide onthesowing oftheir crops .
Thedata supplied bythe 1975 structures survey showed that
inall the Member States the number offarms with small-scale
sugar-beet crops haddecreased ascompared with theprevious
1970 /71survey andthat thenumber offarms with relatively
large areas under sugar beet hadincreased .InBelgium and ,
more especially ,inFrance ,even thenumber offarms with two
totenhectares under sugar-beet decreased ,which means that
there was aconsiderable increase inthe number offarms
belonging tothecategory with over tenhectares under beeti
(2)SeeTables M.3.1 .toM.3.7 .

-39-
Anappreciable number offarms ceased growing sugar-beet altogether .
The 1970 /71survey showed that there were still 425000farms of
this type ,but the figure hadfallen to365000 in1975 andhas
continued tofall since then .
Onthewhole ,these far-reaching changes inthestructures of
sugar-beet farms signify animprovement inproduction conditions
andseem toindicate that thecurrent system ofproduction quotas
hasnot really hampered the restructuring process .
Restructuring oftheprocessing industry
In1972 /73there were 127sugar manufacturers intheCommunity
oftheNine ,mostly concentrated inFrance ,Germany and Italy .
Thenumber offactories processing beet in1972 /73was 246 .
The latest data available for 1979 /80indicate substantial changes
inthestructure ofthis sector .Thenumber ofsugar manufacturers
hasfallen to104 (-18% )andthenumber ofprocessing plants in
operation hasfallen to213 (-13%).
Itshould bestressed that this trend hasbeen accompanied by
improvements intheequipment ofthefactories still operating
andthedaily input ofsugar-beet intheCommunity asawhole
rose from 868 000 tin1972 /73to1052000 tin1979 /80,an
increase ofsome 21% .
2.PRODUCTION
In1977 /78and 1978 /79,thanks toexcellent yields ,sugar production
totalled 11.5 and 11.8 million trespectively .In1979 /80,with little
ornochange inthearea under sugar-beet ,Community sugar production
exceeded even these high levels andtotalled arecord 12289 000 t,
following anexceptional increase inyields ,which were 14.5% higher
than the "normal "level .
These good results were partly attributable totheweather conditions
inautumn 1979 ,which were particularly favourable tothegrowing of
sugar-beet .
Account being taken totherecord production achieved in1979 /80,
some 9million tofsugar were produced within thebasic quotas .
Thequantities inexcess ofthebasic quota but less than the
maximum quota amounted tosome 1.8million t,whilst production
of"C"sugar totalled some 1.45 million t,thegreatest quantity
ever recorded .

-40-
Given thetrend inworld market prices ,the "C"sugar produced
during themarketing year brought most Community producers better
prices than the "B"sugar .Thecommitment toexport "B"sugar
covered thewhole period from August 1979 toJune 1980 ,whilst
the "C"sugar ,which cannot becommitted forexport until after
itisproduced ,didnotbecome available until December 1979 and
thus benefitted more from therise inworld market prices ,which
became even more pronounced subsequently .
3.CONSUMPTION
Human consumption
In1979 /80theuseofsugar forhuman consumption wasmaintained
almost atthelevel ofthepreceding year ,at9.5million t.Per
capita consumption amounted to35.7 kgofsugar .There was a
further rise ,however ,intotal consumption ofsweeteners ,because
ofincreased use ofisoglucose .
Production /consumption ofisoglucose intheCommunity
('000 tdrymatter )
1976 /7 1977 /8 1978 /9 1979 /80
82.6 102.8 139.1 164.1
Non-food sector and degree ofself-supply
In1979 /80,11400 tofwhite sugar was sold under thedenaturing
premium system forfeeding bees .Some 110000 twas used bythe
chemical industry ,compared with 106000 tintheprevious year .
Theproduction refund was 4,11 ECU/100kg .
Following theincrease inproduction (12.3 million t)andthe
levelling-off ofconsumption in1979 /80,theCommunity 'sdegree
ofself-supply again increased ,reaching 130% .The surplus thus
created was further aggravated bytheimportation ofpreferential
sugar from theACP countries ,amounting to1.25 million twhite
sugar equivalent .
Thequantities ofsugar available forexport during themarketing
year thus totalled 4.0million t,including some 1.4million tof
"C"sugar ,thefull cost ofexporting this being borne byCommunity
producers .
Community producers also *bore asubstantial part ofthecost ofthe
refunds granted ontheexport oftheremaining sugar .

-41-
4.TRADE
Between Member States
TheUnited Kingdom andItaly buy relatively large quantities of
sugar assuch from theother Member States .
Sugar inthe form ofprocessed products finds itsmain outlet in
theFederal Republic ofGermany ,which imports itfrom theother
Member States .
In1979 /80thetotal volume ofintra -Community trade decreased
still further asaresult ofincreased production bythe
countries with asugar deficit .
With non-member countries
Asusual ,imports ofpreferential sugar went mainly totheUnited
Kingdom inthis marketing year .Small quantities ofsuch sugar
were also imported byFrance and Ireland .
In1979 /80Community refunds were awarded bytender .Tenders were
awarded for 1781000 tofwhite sugar and 110000 tofraw
sugar .Refunds under the "periodic "system were also awarded in
respect of251 000 tofwhite sugar and 50000 tofraw sugar .
Including exports ofsugar inthe form ofprocessed products ,
thetotal volume ofexports in1979 /80amounted tosome 4.0
million tofwhite sugar equivalent .
5.COMMUNITY PRICES
1979 /80
Since theCommunity area under sugar-beet was still the same ,
theCommission proposed for 1979 /80atotal freeze onprices
together with afurther reduction inthe coefficient used for
thedetermination ofthemaximum quota .TheCouncil ,however ,
taking into consideration themeasures which hadbeen adopted
inthemonetary sector and had resulted inthevalue ofthe
national currencies ofseveral Member States decreasing in
relation totheCommunity unit ofagricultural currency ,
dediced that prices should beincreased by1.5% ,thus
preventing anydrop inprices asexpressed innational
currency .The coefficient used for thedetermination of
themaximum quota waskept atthesame level (127.5 ).
1980 /81
For the 1980 /81marketing year theCouncil decided toincrease the
intervention price forwhite sugar by5.3% overall ,butdifferentiated
between thevarious components ofthis price .

-42-
Since Community sugar production isinsurplus ,theincrease in
sugar-beet prices wasrestricted to4%,whilst theincrease in
theindustrial processing margin wasmore substantial ,at11.6% ,
totake account ofthe steep rise inoilprices ,which seriously
affects processing costs ,andtherepercussions onthis margin
ofthe increase inthethreshold price formolasses .Itwas also
decided toincrease by24%themonthly reimbursement ofstorage
expenses .
Prices onthe internal market
In1979 /80ex-refinery market prices net oftaxapplied bythe
sugar industry were again very close tothe intervention price
intheCommunity areas with surpluses .IntheUnited Kingdom ,
market prices were higher .The trend inprices expressed in
national currencies was largely determined bythevarious
adjustments toagricultural parities .
Prices onthe world market
InNovember 1974 world market prices reached their highest level ,
well above Community prices ,but 12months later they had fallen
tosome 30to40% ofthe latter .
Until August 1979 theprices actually paid remained atavery low
level (varying between 7and 9UScents per lb),well below the
lower price limit setbytheInternational Sugar Agreement (limits
agreed in1977 =11to21UScents per lb).
In1979 /80,forthefirst time after four consecutive surplus years ,
world consumption exceeded production byalmost 6million t,largely
because ofthevery poor harvests inseveral ofthemain producer
countries .This resulted inavery substantial increase inworld
market prices .
In1979 /80,theannual average price ofwhite sugar ontheParis
market was32.3 EUAper 100kgforshort-term deliveries ,which
was 109% higher than intheprevious year .
Since May 1980 ,world prices have risen still further inanticipation
ofanewsugar shortage in1980 /81andhave remained atalevel well
above theCommunity price .
Itithighly probable that world market prices will remain attheir
present high level inthe 1980 /81marketing year .

-43-
6.Short-term outlook
Invxew ofthe slight increase inthe total area under sugar-beet ,
which in1980 covered some 1.78 million haintheCommunity ,and
inview ofclimatic trends ,production in1980 /81iscurrently
estimated at12million tofwhite sugar .Since the general
situation with regard tosweeteners (seeChapter on"Consumption ")
does notpoint toany substantial increase insugar consumption ,
Community surpluses areagain fairly large ,particularly ifthe
end-of-year stocks are reduced inrelation toinitial stocks on
1October 1980 ,asisnecessary .Account being taken toimports
ofpreferential sugar andtraditional external trade insugar
inthe form ofprocessed products ,thequantities ofsugar
available forexport will probably exceed 4million t,
including 1million tof"C"sugar exported byCommunity
producers ontheir ownfinancial responsibility and 140.000 t
tobedelivered toGreece during thefirst half of1981 ,
tomeet theshortfall inthis years exceptional harvest .
Current forecasts arethat world sugar production in1980 /81
will bebetween 88and89million t(rawsugar equivalent ),as
compared with anestimated world consumption ofsome 92million t.
Thus ,forthe second time since theworld sugar shortage of1973
and 1974 ,world production will fall short ofconsumption .
7.ECONOMIC ASPECTS OFTHE MEASURES TAKEN
levies and refunds
Towards theend ofsummer 1979 thesurpluses exported onCommunity
responsibility were qualifying forrefunds ofsome 20ECU/100kg;
the rise inworld market prices then caused the refunds tofall
tobetween 5and 10ECU/100kgbythebeginning of1980 .Since
then ,inview ofthetrend inworld market prices ,allexports
ofsugar have been subject toexport levies ,which ,itshould
beremembered ,areconsidered astheCommunity 'sownresources .
Intervention and food aid
In1979 /80nosugar wasoffered totheintervention agencies .
During theyear thecustomary shipments offood aidincluded
6068 tofwhite sugar .
8.BUDGETARY EXPENDITURE
Inrecent years ,expenditure inthesugar sector hasconsiderably
increased onaccount oftheincrease inexports andthegrowth
ofthe costs incurred under the rules relating totheoffsetting
ofstorage costs .

-LL -
Expenditure bytheEAGGF Guarantee Section thus amounted to
878million EUA in1978 ,1005million EUA in1979 and are
estimated at696million EUA in1980 .These amounts respresent
10.1% ,9.7% and6.1% oftheGuarantee Section 'stotal
expenditure in1978 ,1979 and 1980 respectively .Aconsiderable
proportion oftheexpenditure resulting from theorganization
ofthemarket insugar ,however ,was covered byrevenue from
the levies inthesugar sector ,namely theproduction levy
which must bepaid onsugar inexcess ofthebasic quota but
within themaximum quota ,and the levy tocover storage costs
which iscollected onall sugar produced within the quotas .
The latter levy hasyielded enough tocover reimbursements
ofstorage costs for the relevant years taken asawhole .
After deduction ofthe revenue from the two levies inthesugar
sector ,netCommunity expenditure totalled 467million EUA in
1978 ,545million EUA in1979 and some 191million EUA in1980 .
Lastly ,itshould bementioned that thenet amount ofthe
abovementioned expenditure incorporates theconsiderable
expenditure resulting from theobligation toexport a
quantity ofCommunity sugar corresponding tothe 1.3million
tofimported preferential sugar .

4.OLIVEOIL(1)
1.Introduction
OftheCommunity'soliveoilproduction ,0.5%comesfromFranceand99.5%
fromItaly,wherethisproductin1979accounted for(3.8%)byvalueof
nationalagricultural production and(0.8%)byvalueofCommunity
agricultural production .
Upto1975production coveredabout70%oftheCommunity'soliveoil
requirements ;according tocertainestimates thetotalnumberofolive
treesintheCommunity ,bothcultivated andnot,isabout190million (185
millioninItalyand5millioninFrance).However ,thepercentage of
Community requirements covered byinternal production ofoilhasbeen
risingsteadilyforthreeyears.
Sincetheestablishment ofthecommonorganization ofthemarketinoils
andfats,thescaleofolivecultivation intheoriginal Community has
changedlittle.Olivegrovesstillcoveraround2.3millionha(2280000
hainItalyand38000inFrance),representing 2.3%oftheCommunity's
totalUAA,andformpartofsome1200000holdings .
InanormalyearCommunity oliveoilproduction represents 30%ofworld
output.However ,becauseolivetreesaresubjecttoalternate bearing ,
oliveoilproduction mayvaryverysharplyfromoneyeartothenext.
According totheInternational OliveOilCouncil ,thetotalworldarea
devotedtooliveoilcultivation amountsto10millionha;theCommunity
areaisthus23%oftheworldtotal.
Theestimation offiguresforoliveoilintheCommunity forcoming
marketing yearspresentsthesamedifficulties asinrespectofprevious
marketing years.ThustheCouncilhasdecidedtoestablish aregisterof
olivecultivation intheCommunity .Thiswillbeaninstrument for
countingthenumberofolivetreesintheCommunity whichshouldenable
soundstatistics inthissectortobeobtained .
(1)SeeTablesM.A.I,toM.4.3.

A6
2.Production
Since1978/79production aidtogrowers whobelongtoaproducer
organization hasbeenbasedontheactualquantityofoilproduced ,while
thatpaidtoothergrowersiscalculated atafixedrateaccording tothe
numberandproduction potential oftheolivetreestheyown.
Thereareatpresent Aproducerorganizations inItalyandAinFrance.In
Francenearlyallolivegrowersbelongtosuchorganizations ,butinItaly
onlyabout20%ofthegrowersbelongtoanassociation .
Onthebasisofapplications forsubsidies ,production in1978/79amounted
toAO500t(including oliveresidueoil)inItalyand1600tinFrance.
Forthe1979/80marketing yearproduction inFranceisestimated at
1A00t.Thenumberofapplications forsubsidies inItalyisnotyet
known,butitcanalreadybesaidthatthefigurewillbehigherthanfor
thepreviousyear.TheItalianStatistical Officeputsitatabout
A75000t.
3.Consumption andmarketing
Themainfactorinfluencing consumption -sometimes withacertaintime-lag
-istherelationship betweentheconsumerpricesofoliveoilandseedoil.
Duringthe1977/78marketing yearthepriceratioofoliveoiltoseedoil
wasabout2.5:1,asintheprevious marketing year.Thishighpriceratio
betweencompeting oilsled,duringthemarketing yearsunderconsideration ,
toareduction intheconsumption ofoliveoilandconsequently a
substantial fallinimportsanddeliveries tointervention oflarge
quantities .
Inviewofthissituation theCommission proposed andtheCouncilaccepted
anewsystemfortheorganization ofthemarketinoliveoilapplicable as
fromthe1978/79marketing year.Itsmostimportance innovation consists
intheintroduction ofasystemofconsumption aid.Inviewofthe
technical complexity ofthemachinery tobeestablished ,thenewsystem,as
farastheconsumption aidwasconcerned ,hasbeenoperated onlyasfrom
1April1979.
Numerousdifficulties wereencountered whenimplementing thenewsystemin
Italy,thecountryprimarily concerned .Thiswasbecausethesectoral
organization which,pursuanttoanoptionprovided forinCommunity
legislation ,hadbeenentrusted bytheItalianauthorities withthe
management oftheaidscheme,wasdissolved bytheItalianParliament at
thebeginning ofAugust1979,thuscompelling theItalianadministration to
undertake adifficult taskofreorganization .Asaresult,thereweresome
delays,atfirst,intheadvancepaymentsoftheaid,andinspections for
thispurposedidnotbeginuntil1980.Thesituation nowappearstobe
improving andif,pursuanttotherecentCouncilDecision amending the
rulesforconsumption aid,Italydecidestoentrust ,withinthelimitslaid
down,someofthetasksinvolvedtosectoralorganizations ,thisshould
helptoensurethatthesystemcontinues tooperatesatisfactorily inthe
future.

47
Thestatistics thusfaravailable showthat:
-duringtheperiodfromApriltoOctober1979(7monthsofthe1978/79
marketing yearwhichwerealsothefirstsevenmonthsduringwhichthe
systemwasinoperation )operators appliedforconsumption aidin
respectof125000tonnes,98%oftheapplications beinginItaly;
-duringtheperiodfromNovember 1979toJuly1980(9monthsofthe
1979/80marketing year)thequantityconcerned was140000tonnes,with
Italyagainaccounting fornearlyalltheapplications foraid.
Trade
TheCommunityistheworld'slargestnetoliveoilimporter .From1974/75,
onaccountofthedifficulties described inparagraph 3,imports ,whichhad
reachedapeakof251000tin1972/73,droppedverysubstantially .
Importsamountedto90000tin1977/78(ahighproduction year)and
140000tin1978/79.Importsin1979/80onthebasisoftheimport
licencesissuedupto15September 1980areabout120600t.
Intra-Community tradeisverylimitedandbasically concerns thetwo
olive-oil producer-consumer countries ,FranceandItaly;otherMember
States'tradeisnegligible .
Exportstonon-member countries ,whichusuallyfollowanestablished
tradingpattern ,amounttoabout14000tpermarketing year.
Exportstonon-member countries for1977/78wererunningat14046t-an
exactlyaveragefigure.Exportsin1978/79wereabout24600tandin
1979/80,onthebasisoftheexportlicencesissuedupto15September
1980,areabout4000tonnes,plustheexportsundertheEXIMprocedure ,
althoughtheseareunlikelytobeveryhighinviewofthedifficulties
experienced byoperators inimplementing theprocedure duringthemarketing
yearconcerned (see"Refunds").
Prices
a)Commonprices
Theneworganization ofthemarketinoliveoilcameintoforceon
1January1979.
Forthe1979/80marketing yearthemechanism established wasasfollows:
ECU/100kg
Producertargetprice 235.04
Production aid 52.90
Intervention price 173.19
Marketrepresentative price 147.00
Threshold price 144.96
Theconsumption aidisequaltothedifference betweentheproducer
targetpriceminustheproduction aidandthemarketrepresentative
price.Forthe1979/80marketing yeartheconsumption aidwas
35.14ECU/100kg.

48
Forthe1980 /81marketing year theprices fixed bytheCouncil areas
follows :
ECU/100ka %increase compared %increase compared
with 1977 /78
Producer target price
Production aid
Intervention price247.97
55.81
180.125.5
5.5
4.0
b)Market price /
Market prices in1978 /79forlampante olive oilfluctuated around the
intervention price ,and 1600 tofthis oilwere infact thesubject of
intervention .
Market prices ofedible virgin oilwere above thecorresponding
intervention prices during the1978/79marketing year .
Prices in1979 /80corresponded more orless totheintervention prices ;
however ,atotal of42890tonnes ofolive oilwere thesubject of
intervention ,asfollows :
20320tonnes ofedible virgin oil ,
9590tonnes oflampante oïl ,
12980 tonnes ofolive residue oil .
6.Economic aspects ofthemeasures taken
a)Import levies
From June 1976 thelevy hasbeen fixed bytender inthelight ofboth
theworld andCommunity markets .
Application oftheSystem
Aspecific problem arose in1979 /80with regard toedible virgin oil
imported insmall containers andexempted from thesecurity requirement
attached toconsumption aid .Inview oftherise inthevolume ofolive
oilimported insmall containers andthedanger ofsuch imports taking
toomuch oftheconsumption aid ,theCommission took thenecessary
countermeasures .
b)Refunds
During the1977 /78and1978 /79marketing years cash refunds were kept at
such lowlevels astobescarcely operational .Nonetheless ,traditional
exports continued since operators used theEXIM procedure orwere able
togetolive oilsupplies from theintervention agency .From 1979 /80
operators encountered some very real problems such astheimplementation
oftheEXIM procedure ,because oftheprices ruling inthetwomain
exporting countries ,Spain andTunisia .TheCommission accordingly
decided tointroduce bystages anoperational refund ;thus ,therefund
wasraised from 4.00 to10.00 ECU/100kginJune andto14.00 ECU/100kg
inJuly ,andhasstood at20ECU/100kgsince August .

49
c)Olive oilheld bytheItalian intervention agency
Since the1975 /76marketing year andupto31August 1980 theItalian
intervention agency hasbought-in 230700 tofolive oil .During the
same period 154000 tofolive oilwere sold andthus there were
76300 tofolive oilofallqualities instock ontheabovementioned
date .
7.Budgetary expenditure
Expenditure intheolive oilsector consists ofintervention buying ,
subsidies toolive oilproducers ,consumption aidgranted toolive oil
packaging plants andexport refunds .
Expenditure bytheEAGGF Guarantee Section inrespect ofolive oilwas
388.2 million EUAin1979 .Theprovisional figure for1980 is467million
EUAandtheestimate for1981 is582.8 million EUA ,or3.7% ,4.1% and4.5%
oftheGuarantee Section 'stotal expenditure .
8.Thesituation described inthis report islikely toalter tosome extent
with effect from 1January 1981 ,thedate ofGreece 'saccession ,byreason
oftheimportance ofolive oilproduction inthat country .

5.OILSEEDS ANDPROTEIN SEEDS (1)
5.a.Colza ,rape and sunflower seeds
1.Introduction
In1979 ,theshare ofoilseeds inthevalue offinal agricultural production
was0,5%andthese crops again accounted forslightly less than 0.7% ofthe
Community 'sUAA .World production ofcolza fell from 10.7 million tinthe
previous year to10.4 million tin1979 ;Community production also fell ,
from 1232000 tin1978 to1119000 tin1979 .TheCommunity 'sshare of
world production thus remained relatively stable (11.5% ).
World production ofsunflower seed rose from 12.8 million tin1978 to
15.7 million tin1979 ,mainly because oftheremarkable expansion inthe
area devoted tocultivation ofthis crop intheUnited States ;Community
production ofsunflower seed is228000t,only 1.5% ofworld production .
TheCommunity 'sownoilseed production provides only avery small part of
itsneeds inoils andoilcakes .Theself-supply rate in1979 was12%for
oil ,excluding olive oil ,and4%foroilcake .
2.Production
In1979 theCommunity area under colza was506000hacompared with 513000ha
in1978 .However ,trends inthefour main producing countries differed .There
wasanincrease of15.4% inarea intheUnited Kingdom (from 64200 to
74100haj ,andof5%inGermany (from 121100hato127000ha),andof
asmuch as37.2% inDenmark (from 47000hato64500ha).InFrance on
theother hand thearea hasdropped from 270300hain1978 to232600ha
in1979 .Theincrease inarea inGermany ,Denmark andtheUnited Kingdom
isduemainly tothefact that these three countries hadencouraging
yields inprevious years ,whereas thereverse wastrue inFrance .Total
production in1979 wasabout 1169000 tcompared with 1234000 tin
1978 .Thearea under sunflower ,produced only inFrance andItaly ,rose
by74.7% from 62100hain1978 to108500hain1979 .Production rose
by84.4% ,from 123400 tin1978 to227500 tin1979 .
3.Consumption
Thedemand forcolza ,rape andsunflower seed depends onthedemand for
colza andsunflower oils andoilcakes ;thelatter demand isinturn
determined bytheoverall demand foroils andoilcake andbythe
relationship between theprices ofcolza andsunflower oils andoilcake
andtheprices ofalternative types .This being thecase ,twosets of
consumption data will begiven ,oneforoils andtheother forcolza
andsunflower cake ,while seeds will bedealt with separately .
(1)SeeTables M.5.1 .toM.5.5 .

Oil
After afewdifficult years ,apparent consumption ofcolza oil rose from
494 000 tin1978 to515 000 tin1979 ,anincrease of4.3% which was due
totheavailability ofoils with lowerucic acid content and amore
favourable price forcolza than foroils .
The figures supplied byCommunity crushing mills show that ,compared with
1978 ,theCommunity 'sconsumption ofsunflower oil rose byabout 18% in
1979 ,although this isnot fully reflected inthestatistics annexed to
this Report ,some figures relating tothelast sixmonths of1980 being
unavailable .
Oilcakes
Judging from market information and theinformation supplied bythe
Community 'scrushing mills ,theconsumption ofcolza oilcakes inthe
Community increased from 1.1to1.2million to,arise ofabout 9%
compared with 1978 /79,while production intheCommunity wasalso up
byabout 10% .
Similarly ,theconsumption ofsunflower oilcakes went upfrom 1.1 to
1.3million t,anincrease ofabout 18%compared with 1978 /79,while
theCommunity 'sconsumption rose from about 500million tin1978 /79
toabout 725million tin1979 /80,anincrease of45% .
Themarket situation forboth these products isnot reflected inthe
statistics annexed tothis Report ,assome ofthe figures are not
available .
Seed
Thanks tothegrowth ofcolza oilconsumption the 1979 colza harvest was
sold without anymajor difficulties ,although about 20000 tofcolza had
tobebought-in inDenmark because ofdifficulties inshipping the small
quantities produced there .TheCommunity 'slowdegree ofself-supply in
sunflower seed means that there hasnever been anydifficulty inselling
the crop .
Trade
In1978 /79imports ofcolza into theCommunity rose from 207000 tto
419000 t,reflecting theincrease incolza oilconsumption .There was
also anincrease inthe case ofsunflower seed ,upfrom 598 000 to
997000 t.Ontheother hand ,exports ofcolza remained atavery
lowlevel (3000 t)andexports ofsunflower seed fell from 17000 t
in1977 /78to1000 t.Trade incolza within theCommunity consists
mainly ofFrench andDanish exports toGermany .

-52-
5.Prices
(a)Common prices
Forthe1979 /80marketing year thetarget price forcolza was36.41
ECU/100kgandforsunflower seed 39.07 ECU/100kg.Anincrease of
6.5% hasbeen decided onfor 1980 /81.Thetarget price forcolza is
fixed at39.094 ECU/100kgandforsunflower seed at42.360 ECU/100kg.
(b) Market price
1.World market
During 1979 /80the1979 oilseed crop ledtoabundant oilseed
supplies ontheworld market andthese inturn meant that the
price level was relatively low .Prices fell steadily asa
result oftheyields andtherecord levels ofproduction in
the United States and Brazil .
2.Community market
Prices obtained byproducers were generally between theinter­
vention price andthetarget price .Thesunflower crop issold
each year without difficulty atprices well inexcess ofthe
intervention price andoften higher than thetarget price .
6.Outlook
TheCommunity colza crop forthepresent marketing year (1980 /81)is
estimated' at1.97 million t,upbyabout 65%onlast year ,because of
substantial increase inareas sown inFrance and Denmark .Because of
therelatively inelastic demand forcolza intheCommunity andthe
shortage ofavailable crushing capacity incertain areas ,there could
beproblems inselling the crop .
Thesunflower crop for1980 /81isestimated atabout 310 -360000 t,
compared with 227000 tin1979 /80.Inthelight ofthegreater demand
forsunflower oil intheCommunity ,ofwhich only asmall percentage
ismetbytheEEC'sownproduction ,itisunlikely that there will be
anymajor difficulties inselling the crop .
7.Economic aspects ofthemeasures taken
(a)Aid and refunds
Aid forcolza inthe 1979 /80marketing year fluctuated between 12.352
and20.121 ECU/100kgwith anaverage of16.532 ECU/100kg .Theexport
refund during thesame period varied between 11and 18ECU/100kg.
Thesunflower seed crop was sold without difficulty .Aidvaried between
11.393 and23.249 ECU/100kg,averaging around 20.2 ECU/100kg.No
export refund was fixed forthis product .

-53-
(b) Intervention
During the 1979 /80marketing year 21659 tofcolza were offered for
intervention ,including 19967 tinDenmark .Some 5886 twere sold
from intervention stocks .
(c) Change inrules
In1980 theManagement Committee forOils andFats adopted Regulation
(EEC )No1979 /80extending from three months tofour months theperiod
ofvalidity oftheAPpart oftheCommunity subsidy certificate for
sunflower seeds and allowing theCommmission toextend this period
byanadditional month where conditions sopermit .
8.Budgetary expenditure
EAGGF Guarantee Section expenditure oncolza and sunflower seeds amounted
to202million EUA in1979 .Theprovisional figure for 1980 is288million
EUAand theestimate for 1981 330million EUA .These figures are1.9% ,
2.5% and2.6% respectively oftotal Guarantee Section expenditure .
9.GREEK ACCESSION
Atpresent Greece grows neither colza nor sunflower seed crops .
Production ofcotton seed totals about 200 000 t.For the first
three years after accession Greece ispermitted tomaintain a
system ofimport control onoilseeds andvegetable oils .
Nonetheless ,during thefirst year itisrequired topermit
the first 25000 tofoilequivalent ofoilseeds tobe
imported duty-free and 18000 tofvegetable oils at
reduced rates ofduty .Over thenext twoyears ithas
toliberalize imports from Community Member States
progressively .Attheend ofthis transitional period
Greece islikely tobeanet importer ofoils and fats ,
mainly from theCommunity .

-54-
.Soya beans
From 1974 to1978 thearea under soya intheCommunity ,almost all in
France ,varied between 1000and 4000ha,while in1979 itwag ,14200
with production reaching about 25000 t.
Inspite ofthis ,the crop still accounts foronly avery small
proportion ofCommunity UAA ,ofworld production (about 94million t
in1979 )andofCommunity soya cake requirements (about 16million t
ofseed equivalent ).
Theguide (=norm )price ("prix d'objectif ")forthe1980 /81marketing
year hasbeen setat42.05 ECU/100kg,a6.5% increase compared with
39.48 ECU/100kgfor1979 /80.
In1980 ,following aproposal bytheCommission ,theCouncil adopted ,
intheshape ofRegulation (EEC)No1724 /80,general rules concerning
special measures for soya beans harvested in1980 .The rules provide
foraid ,based ontheminimum price paid totheproducer tobepaid
tosoya bean crushers ,replacing theformer system ofaidpaid direct
totheproducer .
Theaccession ofGreece will have very little effect ontheCommunity 's
degree ofself-supply forsoya beans .

-55-
c.Flax seed (1)
Although Community flax production (2)accounts foronly avery small
proportion ofCommunity UAA and ofthe total world area under flax
seed (6.0million haand3.2million tin1979 according totheFAO)
itdoes help tocover theCommunity 'ssubstantial requirements .The
accession ofGreece will have little impact onthis situation .
The import figures for1979 are 317000 tofseed (including 297000 t
from Canada ),64000 tofoil (57000 tfrom Argentina )and544000 t
ofcake (399000 tfrom Argentina and 78000 tfrom theUnited States ).
In1979 only 5600haofseed flax (7800 t)were sown intheCommunity
compared with 6550 hain1978 and 19600 in1977 .The reasons forthe
drop (thecrop isgrown inFrance ,Italy andtheUnited Kingdom )are
uncertainty asregards income because ofthe late fixing oftheguide
price ("prix d'objectif ")andinadequate yields ,compounded bythe
fact that producers who exceed theaverage yield receive aid ,which
represents asubstantial part oftotal income ,only onaquantity
below theactual yield .This situation arises because aid isgranted
onasemi-standardized basis .
In1979 theCommunity produced 61400 tofflax seed ,compared with
53600 tofflax fibre .
For 1979 /80theguide price hasbeen fixed at42.18 ECU/100kg
compared with 39.79 ECU/100kgfor 1979 /80(+6.0% ).Aid for
1979 /80was 16.889 ECU/100kg.
Expenditure bytheEAGGF Guarantee Section forseed flax isincluded
intheexpenditure forfibre flax (2).
(1)SeeTable M.7.4 .
(2)Seealso under 7:Fibre flax andhemp

-56-
d.Cotton seed
Cotton represents aninfinitesimal percentage ofthevalue offinal
agricultural production ,oftheUAA intheCommunity ,and ofworld
production (25.8 million tin1979 according totheFAO).
Thanks totheCommunity aid system ,this crop isstill apaying
proposition insome oftheless-favoured regions ofItaly (3000ha
and 1000 tofseed ).
Aid for 1980 /81was fixed at140.72 ECU/ha,against 133.38 ECU/hain
1979 /80(+5.5% ).
Although Greece isarelatively large producer ofcotton fibres and
seed (about 150000 ha)theenlarged Community will still beanet
importer ofcotton fibres .

-57 -
e.Castor seed
Castor represents aninfinitesimally small proportion ofthevalue
offinal agricultural production ,ofUAA intheCommunity and of
world production (1.4million haand890000 tin1979 ,according
totheFAO ).IntheCommunity itisstill atanexperimental stage ,
accounting foronly about 180haand400 tin1979 asagainst
imports ,during thesame year ,of38800 tofseed (including
11800 tfrom Paraguay and 10400 tfrom China )and 88000 t
ofoil .Theaccession ofGreece isunlikely tochange this
situation inthe short term .
The aidsystem operational since 1978 /79comprises thefixing
ofaguide price ("prix d'objectif "),54.37 ECU/100kgfor 1980 ,
against 51.54 ECU for 1979 /80(+5.5% ),andthegranting of
aid equal tothedifference between this price and theworld
market price oncondition that theproducer has received at
least theminimum price ,fixed at51.78 ECU/100kg,against
49.08 ECU for 1979 /80.
For 1979 /80theaverage amount paid inaidwas 14.726 ECU/100kg .
Anadditional aid (launching aid )of12.90 ECU/100kghasbeen
decided forthe 1979 /80,1980 /81and 1981 /82marketing years .

-58-
6.DRIED FODDER ;PEAS AND FIELD BEANS
a.DRIED FODDER (1)
1.INTRODUCTION
Thecommon organization ofthemarket indried fodder covers the
following products :dehydrated fodder ,themain sun-dried legumes ,
andprotein concentrates obtained from lucerne and grass juice .
ByaRegulation of5June 1980 theCouncil decided that thecommon
organization ofthemarket would continue toapply todehydrated
potatoes forthe 1980 /81marketing year .ByaRegulation of
15January 1980 theCouncil also extended the scope ofthe common
market organization toinclude by-products obtained inthe
manufacture ofprotein concentrates from green fodder .
Thecommon organizaton ofthemarket indried fodder (seebelow
under 6)hasbeen operating since 1April 1978 .Itreplaces and
strengthens the common organization ofthemarket which had
operated inrespect ofdehydrated fodder alone since 1May 1974 .
Thenewproducts covered bytheneworganization are sun-dried
fodders and fodder protein concentrates .The importance ofthese
compared todehydrated fodders isstill very limited atpresent .
For this reason and since statistical information onthese new
products isnotavailable ,this chapter deals principally with
dehydrated fodders .
2.PRODUCTION
Production ofdehydrated fodder ,dehydrated potatoes excepted ,in
theCommunity in1979 was 1647 617 t,0.4% down on1978 .Thus ,
after asharp fall inthedrought year of1976 ,Community production
ofdehydrated fodder has remained atpractically the same level
since 1977 .France remains theprincipal producer with 900000 t,
more than half (55% )ofCommunity production .
Compared toconventional dehydrated fodders (mainly lucerne and
grass )dehydrated potatoes aremuch less important .In1979 /80
Community production was 55168 t,19%down ontheprevious year
(68474t).Themain producer isGermany ,ataround 44000 t.
Forsun-dried fodder thecommon organization ofthemarket has
been inoperation since 1July 1978 .Community production eligible
foraid isestimated at113000 tin1979 /80,80000 tinFrance
and 33000 tinItaly .
(1)SeeTables M6.1 toM6.4 .

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3.QUANTITIES AVAILABLE
Thesupply ofdehydrated fodder in1979 /80was 2043 177 t,12%more
than in1978 /79(1823 830 t).This was due toanincrease inimports
and adrop inexports .
4.TRADE
Mainly asaresult ofexpanding production incertain non-member
countries ,Community imports oflucerne meal again reached the
level recorded in1976 ,when there was adrought inEurope .Thus ,
385 000 twere imported in1979 ,against 229 000 tin1978 ,
334 000 tin1977 and 389 000 tin1976 .
In1979 ,asinprevious years ,theUnited States andHungary were
the largest exporters ofdehydrated fodder totheCommunity ,with
190000 tand 125000 trespectively (against 135000 tand
69000 trespectively in1978 ).Twoother countries continued
toexport totheCommunity in1979 :Canada with 21000 tand
Spain with 19000 t.Imports were mainly tothe F.R. ofGermany
(214000 t)andItaly (73000 t).
In1979 intra-Community trade indehydrated fodder amounted to
approximately 415000 tandfollowed theusual pattern :Denmark
exported 72000 ttothe F.R. ofGermany ,andFrance exported
around 320 000 ttothe F.R. ofGermany and theBenelux
countries .
Community exports ofdehydrated fodder have never been ona
large scale .In1979 (8101 t),asin1976 and 1977 ,they did
not exceed 10000 t.
5.PRICES
Inthe last quarter of1979 and the first quarter of1980 world
market prices fordehydrated fodder were relatively high atbetween
119and 122ECU/t.Since these prices were notvery much below
theguide (=norm )price ("prix d'objectif ")for 1979 /80
(126.40 ECU/tonne ),theadditional aidfortheproducts inquestion
during thesaid period waswell down onthat fixed in1978 /79.
Prices fell staedily from April 1980 onwards andreached around
109ECU/tonne inAugust .They then recovered ,mainly because of
theslight rise insoya prices caused bythedrought inthe
United States .

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6.ECONOMIC ASPECTS OFTHE MEASURES TAKEN
Inorder toimprove theCommunity 'sprotein supply theCouncil
adopted thecommon organization ofthemarket indried fodder
which hasbeen inforce since 1April 1978 .Thenew arrangements
provide fortheyearly fixing ofaguide price ("prix d'objectif ")
atafair level forproducers ,thegranting ofaidatastandard
rate toprocessing concerns and thegranting ofadditional aid
when theworld market price falls below the guide price .Production
ofdehydrated fodder was formerly affected byprice fluctuations
ontheworld market but thenew arrangements guarantee anincome
toproducers ofgreen fodder comparable tothat obtainable for
other products already covered byacommon organization ofthe
market .
For 1980 /81theCouncil fixed theguide price fordried fodder at
134.62 ECU/tonne and thestandard-rate aid at6.51 ECU/tonne ,
i.e. 6,5% and6%higher respectively than theamounts valid
for 1979 /80.Atthe same time theCouncil raised thepercentages
tobeapplied tothedifference between the guide price and
theworld market price ,for thepurpose ofcalculating the
additional aid ,to80% fordehydrated fodder andprotein
concentrates and45% forsun-dried fodder ,instead of70%
and40% aspreviously .
7.OUTLOOK
Community production ofdried fodder has remained fairly stable in
recent years .
Drying cpsts account for aconsiderable part oftheproduction
price ofdehydrated fodders ,which are thus particularly
sensitive toany increase inenergy prices .Recent and
foreseeable increases intheprice offuel oil are acause
ofconcern forthesector 'sfuture .Insome Member States ,
however ,alotofresearch hasbeen carried outrecently
into ways ofreducing fuel consumption bydryers ,and some
results have already been achieved .Over thenext fewyears
aslight drop inCommunity production ofdehydrated fodder
seems likely .
8.BUDGETARY EXPENDITURE
EAGGF Guarantee Section expenditure fordried fodder was
46.6 million EUA in1979 .Theprovisional figure for 1980
is56million EUAandtheestimate for1981 60million EUA ,
i.e. 0.4% ,0.5% and0.5% respectively oftotal Guarantee
Section expenditure .
9.ACCESSION OFGREECE
Atpresent very little dehydrated fodder isproduced inGreece :only
20000 t.There isapossibility that production ofsun-dried fodder
will develop inthe future .

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b.PEAS AND FIELD BEANS USED INTHE FEEDING OFANIMALS
Since theCommunity 'sdemand for feed proteins greatly exceeds production ,
theCouncil adopted on22Mai 1978 special measures designed toexpand the
production ofpeas and field beans used infeed .These measures have been
applicable since 1July 1978 .
Theproducts inquestion are indirect competition with oilcakes imported
from non-member countries atzero rates ofduty .Asystem was therefore
introduced whereby aid isgranted tofeed manufacturers who useCommunity -
grown peas and field beans iftheprice ofsoya cake islower than the
activating price .The aidvaries with thefluctuations intheprice of
soya cake .Itisgranted only ifthe feed manufacturer haspaid theproducer
not less than theminimum price fixed bytheCouncil .This enables producers
toobtain afair return .
In1979 /80aidfortheprocessing ofpeas and field beans waspaid in
respect ofsome 154000 tofpeas and 95000 toffield beans .This
represented a102% increase forpeas and a7%increase forfield beans ,
ascompared with 1978 /79 (76000 tand 89000 t).Thesubstantial increase
intheproduction ofpeas reflects alarge increase inFrance inthearea
sown and thequantities produced ,the 1979 harvest there of135000 t
being some 15000 tgreater than in1978 .
For the 1979 /80marketing year theactivating price foraid forpeas
andfield beans was fixed at34.97 ECUper 100kgofsoya cake ,while
theminimum purchase price was set at21.48 ECU/100kg.The aidvaried
between 6.220 and8.979 ECU/100kg;therelative stability ofthelevel
oftheaid reflects thestability ofthemarket forsoya cake during
themarketing year inquestion .
In1980 theCouncil ,acting onaproposal from theCommission ,amended
thebasic regulation onpeas andfield beans (Regulation (EEC)No1419 /78)
byextending entitlement toCommunity aid toproducers ofprotein concen­
trates whoprocess peas and field beans foruse inthe feeding ofanimals .
For the 1980 /81marketing year ,theactivating price fortheaidwas
fixed at37.59 ECU/100kgandtheminimum price at22.66 ECU/100kg,
or7.5% higher than in1979 /80 .
1See Table M.6.5 .

-62-
Expenditure onthis sector bytheEAGGF Guarantee Section in1979 was
15-3 million ECU .Theprovisional figure for 1980 is26million ECU ,
whilst expenditure in1981 isestimated at33million ECU .
The area under peas isexpected toincrease bysome 14000hain
1980 /81andthearea under field beans bysome 10000ha,most
ofthis increase being inFrance .
ACCESSION OFGREECE
Atthemoment Greek production ofpeas andfield beans foruse in
the feeding ofanimals isvery small :only 2500 tonnes .Moreover ,
until accession Greece didnot apply any support measures forthese
products .Itistherefore possible that Greek production ofpeas
and field beans will expand somewhat .

-63-
7.FIBRE FLAX ANDHEMP (1)
1.INTRODUCTION
Although thearea under flax andhemp isless than 1%of
Community UAA ,these crops areofconsiderable importance
for the regions inwhich they are concentrated .
For some years theCommunity area under fibre flax has
fluctuated around 60000ha.Fibre flax isgrown on
about 12000 farms intheNetherlands ,Belgium and
northwest France .Flax straw isprocessed there into
fibres inabout 250 retting and scutching concerns .
Their number isdecreasing but they aregrowing in
size andthey produce ahigh andrelatively stable
quantity ofrawmaterials which theCommunity lacks :
natural textile fibres ,oilseeds andpulpwood particles .
TheCommunity accounts foronly 4%ofthetotal world
area under fibre flax (1.5million ha)but for 12%of
world production offlax fibre (695000 t),asaresult
ofyields which arewell above average .TheUSSR accounts
for80%ofworld production ,theEast European countries ,
Egypt andChina being theother producers .
Paper hemp isgrown only inavery small area inFrance .
The rawmaterial supplied by1500 to2000producers
isused inmanufacturing special types ofpaper .Italy
produces avery small quantity oftextile hemp .
2.PRODUCTION
In1979 theCommunity area under fibre flax fell below
60000 ha:itwasonly 57400 haagainst 60300 hain
1978 (-5%)and 61600hain1977 .France isincreasing
itsproportion ofthetotal (81%)while that ofBelgium
(13%)andtheNetherlands (6%)isdecreasing .The
explanation forthis islower labour costs and land
rents inFrance and the fact that weather conditions
and thegreater size ofplots there aremore suitable
forthedewretting which isincreasingly taking the
place ofwater retting ,thehigher cost ofthelatter
(interms oflabour andenergy )being insufficiently
compensated bytheadditional return from ahigher
seed yield andtheproduction ofcertified seed .Another
reason forthedrop inareas sown intheNetherlands is
adrop inretting and scutching capacity .
Straw yield andquality were very satisfactory anddew
retting took place inexceptional conditions .Production
amounted to490 000 tofstraw and 87600 toffibres .
After asteady increase inprevious years thearea under
paper hemp fell from 10500 hain1978 to8600hain
1979 (-22%).Thedifficulties inselling paper have
(1)SeeTables M.7.1 toM.7.5

-64-
caused paper mills toconduct avery cautious buying
policy inrespect ofrawmaterials ,and the slump in
sales ofhemp seed asaresult oflow-priced imports
has further affected theprofitability ofthis crop .
3.CONSUMPTION AND STOCKS OFFIBRES
In1979 /80demand forCommunity fibres went upslightly
(105500 tagainst 104900 tfor 1978 /79),owing toan
increase inexports while internal consumption remained
unchanged .
Fibre supplies ,onthe other hand ,fell from 118200 tto
107 100 tasaresult ofamarked fall inquantities
imported and inproduction (-6300 t).Since fibre
supplies remained inexcess ofsales (+1600 t),stocks
rose again and atthe end ofthemarketing year amounted
to55500 tagainst 53900 atthebeginning .They were
thus fairly high ,especially forlong fibres .
4.TRADE
Since itsvalue interms ofweight andvolume istoo small
tojustify long-distance transport ,there isnotrade in
flax straw with non-member countries .In1979 retting and
scutching concerns inBelgium purchased 71600 tofflax
straw inFrance and theNetherlands toswell theBelgian
crop .This quantity isslightly less than' in1978 but
much more than in1977 and 1976 (54600 t)and the
Belgian retting and scutching industry does not appear
tohave been affected bythe recent drop inareas sown
inBelgium .The quantities offibre flax imported in
1979 (21500 t)were normal butthequantity exported
(25700 t)exceeds that recorded inprevious years .
TheCommunity does notproduce enough lowandmedium
quality fibre ,which itimports from Eastern Europe ,
Egypt and China where itisproduced inlarge
quantities ,but itsupplies theentire world with
good and superior quality fibre which isnot
produced elsewhere .
Imports ofhemp fibre amounted to8600 tin1979 (9600 t
in1978 )andexports were ofnecessity negligible .
5.PRICES
In1979 /80prices forflax straw were higher than inthe
previous marketing year while fibre prices stayed more
orless thesame .Although this situation benefited flax
growers ,itreduced theprofitability ofretting and
scutching .The contract price forpaper hemp straw
agreed between producers andusers was kept at420FF/t
(75.44 ECU/t).

-65-
6.OUTLOOK
The area under fibre flax in1980 ineach Member State
isroughly the same asin1979 .Straw and seed yield
issatisfactory but fibre yield ,and inparticular
quality ,arewell down compared with theprevious
harvest .Since fibre stocks arefairly high and the
short-term outlook forthespinning industry is
notvery good ,market balance will remain very
precarious .Only anupturn inconsumption could
provide growers and retters and scutchers with
satisfactory sales .
thesteady expansion ofthis crop inprevious years )
continued in1980 .Only 6700hawere sown ,representing
afurther drop of22% .Although thecontract price was
raised from 420 to435FF/t(75.40 ECU/t),anincrease
of3.6% ,and theaidwas also increased ,production did
not regain itsprevious level ofprofitability ,largely
because ofthe slump insales ofhemp seed .
7.PROJECTIONS FORFIBRE FLAX FOR 1981 /82AND BEYOND
Present consumption offibre flax intheCommunity accounts
foronly 90%ofproduction .Forannual production tobe
absorbed itwould benecessary tohave atrading surplus
of10000 tyear inyear out ,except inyears when the
harvest wasparticularly bad .Since itisnot likely that
there will beasignificant reduction inimports from
outside theCommunity oranappreciable increase in
exports ,only anupturn ininternal consumption cankeep
the market inbalance .
8.BUDGETARY EXPENDITURE
Theaid forfibre flax for 1980 /81was fixed at264.71 ECU/ha,
against 248.55 ECU/hafor1979 /80(+6.5% ).Aid isgiven for
fibre flax seed under thearrangements forflax seed .
Forhemp ,theaidwent upto240.41 ECU/ha,against 225.74
ECU/hafor 1979 /80(+6.5% ).
EAGGF Guarantee Section expenditure forflax andhamp was 17,6
million EUA for 1979 .Theprovisional figure for1980 is
19.0 million EUA and the estimate for 1981 22.0 million EUA .

66
8.SEEDS (1)
1.Introduction
Thecommon organization ofthemarket inseeds covers thefollowing
products :
-dried leguminous vegetables forsowing CCT07.05 A
-hybrid maize forsowing CCT10.05 A
-rice forsowing CCT10.06 A
-oilseeds andoleaginous fruit forsowing CCT12.01 A
-seeds ,fruit andspores ,ofakind used forsowing CCT12.03 A
Theproduction offodder seed must beconsidered notonly from the
standpoint oftheharvest obtained ,butalso from thestandpoint ofthe
species' function incrop rotation andtheend-use oftheseed ,since the
different varieties ofasingle species canhave their ownparticular use .
Leguminous plants areparticularly important because they increase the
nitrogen content ofthesoil inwhich they grow .
Community production offodder seed in1979 was1.8million quintals ,
approximately 25%oftheworld total (United States ,Canada ,NewZealand ,
EEC).TheCommunity isself-sufficient overall ,although itisanet
importer ofcertain species .
From the1979 harvest ,rice seed hasbeen included inthecommon
organization ofthemarket andreceives aidof12.1 ECU/100kg.
2.Production
Denmark ,producing nearly 26%ofthetotal (and40%ofgrasses ),isthe
main Community producer .France andItaly arethemain producers of
legumes .
Community production in1979 wasabout 1771000quintals ,almost thesame
asin1978 .
(1)SeeTable M.8.1 .
(5)

67
Thearea declared forthe1980 harvest (255000ha)reflects some increase
inproduction compared with that declared for1979 (240000ha).
Nevertheless ,because ofavery difficult growing period ,starting with a
drought which wasfollowed byalong spell ofrain ,theyields formost
species arewell below normal (10-30% down )andthequality oftheseed is
also below thenormal standard (lowgermination rate ).Inmid-September
some large areas ,particularly ofPisum sativum L.andVicia faba L.,still
had tobeharvested .
Acautious provisional estimate forproduction in1980 would beabout
1600000quintals .
Variations inproduction affected mainly thefollowing species :
1979 1980
ha q ha q+
Medicago sativa L. 49530 149 330 58491 110 000
Vicia faba L. 16401 359 786 28601 660 000
Pisum sativum L. 3944 72801 11607 230 000
Trifolium pratense L. 16974 62754 20728 45000
Trifolium repens L. 4445 21426 3812 3000
Theareas under hybrid maize in1980 (about 47969ha)are about 13% down
the1979 figure (54059ha).
Rice production hasrisen byabout 53% (1979 about 170000q,1980 about 260
000q).
.Supply situation
Community supplies have been satisfactory inrecent years andourdependence
onimports from non-member countries hasbeen reduced .With seed supplies am
ounting to2.5million quintals for1979/80,theCommunity wasable tomeet i
tsownrequirements .Forthecoming marketing year ,itwill also beself-suf
ficient onthewhole ,asabout 2.4million quintals will beavailable in1980
/81anddemand isestimated at1540000quintals .Trade with non-member cou
ntries will ,however ,continue ,particularly inthecase ofspecies ofwhich
there isstill ashortfall intheCommunity (Arrhenaterum elatias ,Vicia sati
va,Phleum pratense ,Festuca arundinacea ).
Stocks at1July 1979 totalled 820000quintals ,andthefigure for1980 isa
bout 800000quintals (Lolium perenne L.200000qandLolium multiflorum L.
250000q).Thepersistence ofrelatively large stocks isduetoanexcess o
fimports over requirements .
Supply anddemand foroilplant seeds areinbalance .

68
Theworld supply situation isgenerally good ,andnoparticular
difficulties areexpected .
4.Prices
Thelevel ofproducer prices intheCommunity canberegarded asgenerally
satisfactory .
Prices ontheDanish market ,which isthemain Community market ,were
(ECU/100kg):
September 1979 September 1980
Lolium perenne L. 92 117
Lolium multiflorum L. 68 79
Festuca pratensis L. 131 145
Festuca rubra L. 99 145
Poapratensis L. 149 141
Trifolium repens L. 172 248
Countervailing charges forhybrid maize according totype andorigin range
atthemoment (September 1980 )from 3.6to32.8 ECU/100kg.Forthe
1980/81marketing year ,thereference prices have been fixed between 70and
135ECU/100kgdepending ontype .Thegranting ofproduction aidforrice
seed led .toadrop inprices tousers ofbetween 7and11ECU/quintal
compared with 1979 .
5.fiction decided orproposed
TheCouncil decided toinclude rice seed (Regulation (EEC)No2878/79of17
December 1979 )inthefield ofapplication ofCouncil Regulation (EEC)No
2358 /71.Theaidfixed is12.1 ECU/100kg,applicable from the1979
harvest .

69
TheCouncil also decided toincrease theaidforthe1981/82marketing year
forPhleum pratense L. (50.3 ECU/quintal to55.3 ECU/quintal ),Trifolium
repens L.andTrifolium repens L.var .giganteum (36.8 ECU/quintal -40.9
ECU/quintal ).
TheLatin andnational names ofcertain species were altered from 1July
1980 .Thelist ofvarieties ofLolium perenne L. (high-persistence
varieties ,late ormedium-late ,low-persistence varieties ,madium-late ,
medium-early orearly )hasbeen slightly altered .
6.Outlook
Thearea which will beharvested in1981 maybeestimated atabout 220000
ha,i.e. thesame area asintheprevious year ,inwhich ameasure ofprice
stability wasattained asthere wasabalance between supply anddemand .
Price levels areexpected toremain more orless unchanged in1980 /81.
Stocks ofonespecies (Lolium multiflorum ,approximately 250000q)remain ,
however ,very high .
Difficulties could arise with Trifolium repens L.,forwhich areas
harvested in1979 show asignificant drop inproduction .Denmark andNew
Zealand aretheonly twocountries intheworld producing this species .
Medium-term Community production estimates areforthemoment satisfactory
onthewhole .Thesubsequent development oftheseeds sector will ,
however ,also depend ontheprofitability ofseed production compared with
cereals inparticular .
Account should also betaken ofcompeting imports from non-member countries
(particularly East European countries )which benefit from thesystem of
equivalence with Community seed asregards production andcontrol .
World production offodder seed isexpected toremain stable over the
coming years .
7.Budgetary expenditure
EAGGF Guarantee Section expenditure onseeds was20.3 million EUAin1978 .
Theprovisional figure for1979 is27.2 million EUAandtheestimate for
1980 33.0 million EUA .

70"
9.WINE (1)
1.Introduction
In1979 wine represented about 2.7% byvalue oftheCommunity 'sfinal
agricultural production .Thearea under vines inproduction amounted to
2358000ha,orabout 3%oftheCommunity 'sUAA .
TheFAOputs world wine production in1979 at366million hi,which ismuch
higher than theprevious year 'sfigure .Itisalsy very high compared with
earlier years astheaverage for1974 /75to1978 /79was308million hi.
Community production in1979 /80was177million hi,compared with 138
million hiin1978 /79and128million hiin1977 /78,representing 48.4% ,
47.2% and44.7% respectively ofworld production .Since thearea under
vines intheCommunity represents only about 23.0% oftheworld vineyard ,
theaverage Community yield isconsiderably higher than theworld average .
2.Production
The1979 harvest ,at175million hi,easily exceeded therecord level of
thelast exceptional harvest in1973 (171million hi).This follows the
low1978 and1977 harvests (138and128million hi)andaverage harvests in
1976 and1975 (148and145million hi).Thefavourable weather in1979
explains therecord level ,despite aslight reduction inthearea under
vines .
3.Consumption
In1978 /79,total internal utilization accounted for136million hi
compared with 137million hiin1977 /78,a1%reduction .
a)Human consumption
In1978 /79,direct human consumption was123million hiagainst 126
million hiin1977 /78,127million hiin1976 /77and130million hiin
1975/76.These figures show thegradual reduction indirect human
consumption ,which isfalling inthemain wine-producing countries
without increases inother countries compensating forthis .
b)Processing
In1978 /7912million hiwere processed compared to11million hiin
1977 /78and18million hiin1976 /77and1975 /76.Thequantities
distilled with Community aidin1978 /79were aslowasintheprevious
wine year .

71
c)Self-supply
TheCommunity self-supply rate in1978 /79forallinternal utilizations
was101.8% (93.4%in1977/78).Ifthequantities distilled under the
various intervention measures taken fornormal management (about 1.7
million hi)arededucted from thesupply figure ,therate ofself-supply
for1978 /79becomes 103.1% .Thefigures for1977/78,1976 /77and
1975/76were 94.1% ,105.8% and98.9% respectively .Thevolume ofstocks
on31August 1978 wasaverage (74million hi).
Trade
In1978 /79Community imports were 6.2million hiagainst 5.9million hiin
1977 /78,aslight rise (5%).This follows a7%increase intheprevious
year andreflects afairly good situation ontheCommunity wine market in
general in1978 /79.
In1978 /79exports rose sharply to6.8million hi,a70%increase over the
previous year (4.0million hi).This increase confirms theupward trend
which hasbeen evident since 1975/76andislargely duetoexpanded Italian
exports .
In1978/79,imports were 9%less than exports ,while in1977 /78they had
been 46%higher .
Prices
a)Common prices
Theaverage increase inguide prices foralltypes oftable wine was
5.5% for1980 /81,compared with anincrease of1.5% intheprevious year .
b)Market prices
Apart from German table wines ,alltheaverage prices quoted forthe
various marketing centres in1979 /80fortable wines oftypes RI,RII
andAIwere considerably lower than those oftheprevious year .The
decreases varied between 3.0% and23.5% fortype RI,between 4.6% and
19.7% fortype RIIandbetween 9.6% and29.0% fortype AI.

72
Asregards German table wines ,there wasaslight drop of5.4% fortype
RIII ,aredwine ofonly secondary importance ,while price levels for
white wines AIIandAIIIwere uponthose oftheprevious year by5.7%
and21.2% respectively .
ii)Price trends in1979 /80
Theeffect oftherecord harvest in1979 wastoupset thebalance
between supply anddemand causing ageneral drop inmarket prices for
table wines .With confirmation oftheestimates ofthis abundant
harvest ,prices oftable wines oftypes RIandRIIslid below the
activating price atthebeginning ofSeptember (endofAugust ).This
downward trend continued inOctober andNovember andpersisted until
April 1980 .Between April /Mayandtheendofthemarketing year there
wasaprogressive climb inboth types ofwine ,mainly duetothe
intervention measures tostabilize themarket ,although this reaction
wasless marked inItaly than inFrance .Neither inItaly norin
France ,however ,were table wine prices atorabove theactivating price
attheendofthemarketing year .
Fortype RIwine theweighted annual average ofprices inFrance was
7.5% higher than inItaly ,while Italian prices were 3%above French
prices forType RII.
Prices fortype AItable wines followed analmost identical pattern in
France andItaly until January 1980 ,when they were both below the
activating price .From then onprices inFrance rose sharply toabove
theactivating price ,around which they then fluctuated until theendof
themarketing year .Italian prices climbed slightly from January
onwards ,then fell inApril andremained fairly stationary ,still
considerably below theactivating price ,until theendofthemarketing
year .
Theannual weighted average price fortype AIwine inFrance was10.2%
higher than inItaly .
Theprices fortypes RIIIandAIIIwine were satisfactory ,their
annual weighted averages being 37%and30%respectively above theguide
price .Theprices oftype AIIsuffered asteady decline ,sothat by
Maythey were below theactivating price ,butfrom July onwards they
climbed above it.

73
c)World prices
Wine prices onthemain producers countries' markets remained firm
throughout 1979 .
OntheSpanish market ,which isoneofthose ofmost direct concern ,
after spectacular increases asaresult ofthree poor harvests ,there
wasasharp drop in1979 and1980 because oftherecord harvest in
1979 .In1979 /80Spanish prices were about 80-85% (white wine )and
115-120% (redwine )ofofficial Community prices forthecorresponding
types .
6.Outlook
a)Short-term
Thelatest information available suggests that the1980 harvest will
yield some 25million hiless wine than theprevious year .According to
thelatest estimates bytheMember States ,production should amount to
150million hi,against 175million hiin1979 /80.This quantity
exceeds normal foreseeable utilization (some 140million hi)and ,
existing stocks being very large ,market prices forFrench andItalian
table wine (types RI,RII,AI)maycause problems .However ,inview
ofthepoor harvest expected inGermany ,prices forGerman table wines
(RII,AIIandAIII)might remain atthecurrent level oreven
slightly above it.Asregards imports andexports ,thehigh level of
supplies within theCommunity in1980 /81might well confirm thetrend of
previous years towards anincrease inexports with imports remaining the
same .
b)Medium-term
Inrecent years theCommunity wine-growing potential (particularly
because ofhigher yields perhectare )hastended toexceed market
demand ,which ,forvarious reasons ,ispractically static .Toestablish
abetter balance inthemedium term ,theCouncil adopted inDecember
1979 an"Action Programme 1979-1985 "fortheprogressive establishment
ofbalance onthemarket inwine ,with aseries ofRegulations to
achieve amore balanced relationship between supply anddemand .

74
Economic aspectsofthemeasures taken
a)Leviesandrefunds
1)Importlevies
Theimportleviesinthewinesectorareknownas"countervailing
charges"andplayonlyaveryminorpartsincetheydonotapplyto
the19non-Community countries whichhaveundertaken toobservethe
reference priceandwhicharetheCommunity'sprincipal suppliers .
Thelevelofthecountervailing chargesremained unchanged throughout
1979/80.
2)Refunds
Thelevelofrefunds wasincreased attheendof1979.The
quantities qualifying forrefundsamountedtosome500000hifor
1979(against220000hiin1978).Averyconsiderable increaseis
expectedin1980,probablytoabout2-2.5millionhi.
b)Quantities inrespectofwhichintervention measures weretaken
Allthe"normalintervention measures providedforintheCommunity
ruleswereapplied.Inaddition ,becauseoftheabundantsupplies and
thefallinmarketpricesatthestartof1979/80,allpossible
"exceptional "intervention measures weretakeninordertostabilize the
market:
-atthestartofthemarketing year:
-authorization toconclude long-term storagecontracts fortable
wines,grapemustandconcentrated grapemust;
-distillation carriedoutunderthe"guarantee ofperformance "
(reservedforholdersoflong-term storagecontracts);
-preventive distillation andthedistillation ofwinessuitable
foryieldingcertainvinousspiritswitharegistered designation
oforigin.
-atthestartof1980thedistillation ofso-called additional
obligatory deliveries fordistillation (distillation ofadditional
quantities inconnection withtheobligatory distillation of
by-products ofwine-making )andtheso-called "exceptional "
distillation .Thequantities ofwinedistilled withCommunity aid,
underthevariousmeasures ,amountedtoabout17millionhi(compared
with1.7millionhiin1978/79).
Themonthlyaveragequantities covered bystoragecontracts amounted
to27.1millionhi(8.9millionhiin1978/79),themaximumfigure
being41.7millionhi(14.1millionhiin1979/80).

75
c)Stock situation
Atthebeginning of1979 /80,stocks held byproducers andthetrade
amount to76.2 million hi.Attheendofthemarketing year ,stocks of
95million himaybeexpected .This quantity isconsiderably above
average stocks inprevious years .
d)Unity ofprices
Monetary compensatory amounts inthewine sector were applied only to
Italy andGermany andonly totable wines produced inthose countries .
Certain representative rates were amended on16December 1980 .Thenew
rates were applied asfrom 1September fortheconversion ofcertain
amounts relating todistillation operations andvarious aidmeasures .
8.Budgetary expenditure
Expenditure bytheGuarantee Section oftheEAGGF onwine amounted to61.9
million EUAin1979 ;theprovisional figure for1980 is303.0 million EUA
andtheestimate for1981 is466.0 million EUA .This is0.6% ,2.9% and
3.7% respectively oftotal expenditure bytheGuarantee Section .The
figure of303.0 million EUAcanbebroken into 30.0 million EUAonrefunds
and 273.0 million EUA onintervention .
9.Impact ofGreek accession
Theaccession ofGreece ,whose production potential islimited compared
with theNine (between 3and4%ofthetotal )does notsubstantially alter
thepresent situation inthewine sector .
Some problems could arise during theinitial period owing totheneed for
producers andtheauthorities inGreece toassimilate andimplement a
system involving relatively complicated intervention instruments .

76
10.RAWTOBACCO (1)
1.Introduction
In1979,worldleaftobaccoproduction was5%lowerthanintheprevious
year,reaching5.38milliontonnes(4.77millionbaled).Virginia
flue-cured accounted forabout42%oftotalproduction and43%ofall
trade.Ontheotherhand,Community production in1979(199000t)
increased by16%,compared withtheprevious year.Baledtobaccoaccounted
forslightlylessthan1%ofthevalueoftheCommunity'sfinal
agricultural production in1979.
2.Production andstructure
Between1973and1979Community production increased byabout58%,mainly
becauseofaconsiderable increase inyieldperha.Thetobaccosectorhas
undergone afar-reaching changeinitsproduction structure (the
development ofcooperatives )andmarketing structure (rationalization and
concentration ofundertakings )sincetheentryintoforceofthecommon
organization ofthemarket(1970)inthedirection ofbetteradjustment to
actualmarketrequirements .
Asregardsthemajortypesoftobacco ,worldproduction ofdarkair-cured
decreased byabout0.7%in1979ascompared withtheprevious yearandthat
ofBurleyby7.2%,thatofflue-cured by5.6%andsun-cured by4.1%.The
exceptionally favourable weatherconditions in1979accountinpartforthe
following changesinCommunity production levelscompared with1978:
darkair-cured varieties :anincrease of3.3%
lightair-cured varieties :anincrease of16.5%
flue-cured varieties :anincrease of52.3%
sun-cured varieties :anincrease of25.2%
fire-cured varieties :anincrease of17.6%
(1)SeeTablesM.10.1toM.10.5.

77
3.Degreeofself-supply
Consumption
In1979,worldconsumption ofbaledtobaccoamountedtoA.88million
tonnes:forthefirsttimeinfiveyears,production (baledtobacco)fell
shortofconsumption .Forthisreasonstocksshouldbeatthe1977level
(about700000tonnes).
TheCommunity self-supply rateisabout26%.Comparedwith1978,world
tobaccoconsumption wasunchanged in1979.Consumption intheCommunity of
Ninehasmoreorlessstabilized ,mainlyasaresultoftheeconomic
recession ,theincreaseintaxesandtheanti-smoking campaigns .
Nevertheless ,certainupwardtrendsareevidentincountries suchasFrance
(2.7%),andtheFederalRepublicofGermany (1.7%).Itshouldbepointed
out,moreover ,thatalthoughatworldlevelthereisnoincrease ,thereis
anaverageincreaseofover5%,withpeaksof10%to15%,inthedeveloping
countries andoil-producing countries .Thesteepriseinconsumption of
"lightcigarettes "(lownicotine andtarcontent)continued in1979and
trademaybeexpectedtomovetothosecountries exporting neutral-reaction
tobaccoforfilling .Furthermore ,intheUSAtherehasbeenadecrease in
theuseofVirginia flue-cured andanincreaseinblendsofimported
tobaccos .
4.Trade
Worldexportsin1979amounted to1.37milliontonnes,whichis2.3%less
thanintheprevious year.
Newmanufacturing technigues ,whichreducethetobaccoperunitof
consumption ,shouldcombinewithincreased prices (taxmeasures )andhealth
considerations tobringaboutadropinconsumption and,conseguently ,in
importdemand,especially intheindustrialized countries .Itshouldalso
bestressedthatthedeveloping countries andthecountries withplanned
economies aretakinganincreasing shareofworldtrade.
In1979Community exportswereabout26%higherthanin1978(around
29200t)whereasimportsfellby12%.Virginiaflue-cured tobacco
accountsforabout62%oftotalimports ,whereasBurleyaccountsforonly
7%.Furthermore ,aboutonethirdofimportsentertheCommunity atazero
orpreferential dutyunderthetermsoftheEECpolicytowardsthe
developing countries (generalized preferences ,ACP).Asfrom1January
1980,Zimbabwe (Rhodesia )-oneofthelargesttobaccoproducing and
exporting countries -wasadmitted totheACPsystem.
Thispolicy,wherebytobaccosindirectcompetition withthoseproducedin
theCommunity entertheCommunity onfavourable terms,alsomeansthat
strongersupportmeasuresareneededunderthecommonorganization ofthe
market(premiums andexportrefunds).

78
5.Prices
Pricesontheworldmarketweremoreorlessstablecompared withthe
previous year:intheUnitedStates,themostrepresentative marketat
worldlevel,Virginia flue-cured andBurleyreachedf.o.b.exportpricesof
between$4and$5perkg;pricesforKentucky ,ontheotherhand,have
fallensharply.
Thepricesoforiental tobaccos ,whicharestillshowingtheeffectsof
over-production inTurkey,Greece,Bulgaria andYugoslavia ,continued their
downwardtrend;minimumexportpriceshavebeenlowered ,andexport
subsidies andcreditfacilities havebeengranted .InTurkeyandGreece
largequantities ofinferior-quality tobaccohaveevenbeendestroyed .
Thissituation showsnosignofchanging duringthenextmarketing year.
Asfarasthesituation withintheCommunity isconcerned ,planters
generally receivedthenormpriceforthe1978crop.
6.Outlook
Firstindications for1980arethatworldproduction ofrawtobaccowill
increase (by5%)alt-houghyieldsinthemainproducercountries remainmore
orlessnormal.Thisincreaseappliestoallthemajorvarieties ,withthe
exception offire-cured whichshoulddecrease byabout10%.
However ,withparticular reference totheCommunity position ,itshouldbe
stressedthatthestructural difficulties affecting somevarieties
(particularly oriental tobacco )willcontinue andthattherewillbea
generaldecreaseincultivated areasandhenceinproduction ,owingtopoor
weatherconditions andasubsequent delayinplanting out.
Intervention buyingoforiental tobaccos fromthe1978harvestamountedto
5965t,whereastheforecastfor1979issome8000t.
7.Economic aspectsofthemeasures taken
Todealwiththewell-known difficulties ofmarketing theBeneventano
varietyaconversion planextending overthreeyearswasapproved bythe
Councilandappliedforthefirsttimetothe1977crop.Theoperation
involved 1232hain1977,1623hain1978and750hain1979,i.e.82%of
thetotalareaplantedwiththiscropin1976(4378ha).Conversion has
mainlybeentotheKentucky ,Paraguay andF.Havanna varieties .Itmustbe
stressedthatthetobaccogrownontheconverted areaswasmarketed
normally ,althoughitwasfearedthattheremightbesomedifficulty in
disposing ofF.Havanna .
During1980,threeinvitations totenderwereissuedforthesalefor
exportoftobaccoheldbytheItalianintervention agency(15014t).The
intervention agenciesaccordingly stillholdinstorage27459tfromthe
1974,1975,1976,1977and1978crops.

79
Thepaymentofexportrefundshascertainly contributed totheEEC's
continuance andextension ofitstraditional commercial outlets .
Nevertheless ,therecentdevelopments ininternational tradehave
restricted exportopportunities ontheworldmarket.Indeed,whileexports
oftheproduceofthe1975harvest ,whichbenefited fromexportrefunds ,
reached22690t,thosefromthe1976,1977and1978harvests declined
progressively :15725t,12885tand9522trespectively .
8.Budgetary cost
EAGGFguarantee expenditure intherawtobaccosectorwas216.1million ECU
in1978and225.5million EUAin1979,i.e.respectively 3.0%and2.5%of
totalexpenditure .Thisdevelopment canbeattributed toseasonal
production variations ,particularly tofluctuations inunityield.
Expenditure for1980isexpectedtobe282million EUA.

80
11.FRUIT ANDVEGETABLES ,FLOWERS ANDLIVE PLANTS
A.FRESH FRUIT ANDVEGETABLES (1)
1.Introduction
Production offresh fruit andvegetables in1979 ,including crops for
processing ,represented 11.9% byvalue offinal agricultural production ,
thesame asin1978 andrather less than in1977 (11.5% ).
Italy ,with 52%ofCommunity fruit production andnearly 45%of
Community vegetable production isbyfarthelargest producer among the
Member States .Second place goes toFrance ,with 20%forfruit and19%
forvegetables ,while thethird most important producer isGermany for
fruit (17% )andtheUnited Kingdom forvegetables (15%).
2.Production
Commercial fruit production (2)intheCommunity in1979 amounted to
17.7 million tonnes ,adrop of1.2% over 1978 ,butstill close tothe
average figure forprevious harvests .There were increases or
decreases -ofvarying proportions -inalltheMember States .
Thefollowing observations maybemade about themain fruit crops :
-inapple production ,which accounted for38%offruit production ,the
1979 harvest was2.6% lower than in1978 ,andalltheMember States
except Belgium ,Ireland andDenmark ,which achieved increases ,
produced less ;
-inpears ,(12%offruit production )thesituation wassimilar ,with a
marked drop inharvests inItaly andBelgium andless marked inthe
other Member States ,except intheUnited Kingdom ,France andDenmark ,
where production isrising .Theharvest fortheCommunity asawhole
was 6.4% lower than in1978 :
-thepeach harvest in1979 showed nochange fortheCommunity ,butrose
slightly (+2%)inItaly .
(1)See tables M.11.1 toM.11.9
(2)This is"biological production "

81
Commercial vegetable production InthewholeCommunity reached
24.4milliontonnes,slightlyless(1.1%)thanthe1978total.Output
declinedinGermany,Italy,theUnitedKingdomandDenmark,showedno
changeinFrance,androsealittleinBelgiumandtheNetherlands .
3.Consumption
In1978/79internal consumption offruit(1)intheCommunity amounted
to24.3milliontonnes,anincreaseof8.8%overthepreviousyear.
Internal consumption ofvegetables ,at29.8milliontonnes,showsafall
of1.5%compared with1977/78.
(a)Humanconsumption
Humanconsumption wastheprincipal usemadeoffreshorprocessed
fruitandaccounted for91%ofallinternal consumption .
Percapitaannualconsumption intheCommunity amountedto844kg
(22.3kgofcitrusfruitand62.1kgofotherfruit).
Humanconsumption ofvegetables was89.2%ofallconsumption .Per
capitaannualconsumption was102.1kgfortheCommunity asawhole.
Theannualrateofchange,calculated fortheperiod"1973/74"to
"1977/78",is-0.2%forfruitotherthancitrusfruit,0.9%for
citrusfruitand0.5%forvegetables .Thesearescarcely
perceptible variations which,although theydifferinmagnitude ,are
inthesamedirection asthevariations observed overthesame
periodinthecorresponding usableproduction .
(b)Animalconsumption andindustrial uses
Thesetwooutlets ,whichincludeindustrial usesfornon-food
purposes ,tendtobeadventitious andthequantities offruitand
vegetables whichtheyabsorbareingeneralappreciably less
significant thanlossesduringmarketing .
(1)Including preserves andfruitjuices,butexcluding tropicalfruitsand
dryordriedfruits.

82
(c)Rate ofself-supply
TheCommunity 'sself-supply rate isparticularly high for
vegetables ,reaching 94.1% in1978 /79;thefigure fornon-citrus
fruit is77.1% and for citrus fruit AO.6%.
4.Trade
In1978 /79theCommunity 'stotal imports offresh fruit amounted to
4.5million tonnes ,arise of0.6% over 1977 .
Oranges ,1.8million tonnes ,were byfarthepredominant import ,since
apples ,which occupied second place ,accounted foronly 0.36 million
tonnes .
Fruit exports were just over 0.6million tonnes ,including 0.22 million
tonnes ofapples ,0.1million tonnes oflemons and0.08 million tonnes
ofpeaches .
Imports offresh vegetables totalled 3.1million tonnes ,adecrease of
3.9% on1977 /78,while exports ,which fell by6.9% ,amounted to
1.25 million tonnes .
Intra-Community trade infresh fruit andvegetables wasalso substantial .
Although thequantity offruit traded didnotequal imports from
non-member countries ,itnevertheless totalled 3.5million tonnes .
Apples (1.09 million tonnes )were themain product ,followed bypeaches
0.29 million tonnes ).
Intra-Community trade invegetables ,ontheother hand ,totalled
4.6million tonnes ,approximately 1.5times thequantity imported from
non-member countries .These figures areslightly upon1977 /78 (7.0% )
andmaintain thepositive annual rate ofchange which hasmarked the
past fewyears .
5.Prices
(a)Common prices
Thebasic prices andbuying-in prices forthe1979 /80marketing year
have been increased sothat theresulting average withdrawal prices ,
atwhich producer groups buyback their members' unsold produce ,are
1.5% higher than inthe1977/78marketing year forallproducts .
Theaverage overall increase for1980 /81was6%forallproducts
except dessert apples ,forwhich itwas5.5% .
Thereference prices ,which determine theminimum level ofentry
prices forcertain products imported from non-member countries ,
increased onaverage by5%between 1978 /79and1979 /80inthecase
ofcucumbers ,tomatoes ,table grapes ,apples ,pears ,peaches ,
cherries andplums .
(6)

83
Inthecaseoflemons,orangesandmandarins ,however,reference
priceshaveremainedatthelevelofthepreviousyear,becauseof
therelationship betweenmovementsinthebasicandbuying-in
prices,thepenetration premiumsandthereferencepricesofthose
products (see6(c)).
Between1979/80and1980/81referencepricesincreasedbyanaverage
ofA.7%,withtheexceptionofcitrusfruits,wherethefull
increaseinthebasicandbuying-inpriceswasreflectedinthe
penetration premiums.
(b)Marketprices
Fruitandvegetablepricesfluctuateconstantly andmayvary
considerably fromonetimeoftheyeartotheother,fromonemarket
toanotherandevenfromoneconsianment toanother.
Ananalysisoftheavailabledataleadstothefollowing
conclusions ,basedonaveragebasicandbuying-inpricesforpilot
products:
-Apples(GoldenDelicious ,qualityClassI,70mmorover).
Astheaveragepricesforthe1978/79harvesthadbeendepressed
byacropslightlyaboveaverage,theysettledaroundtheaverage
levelrecordedin1976/77;pricesforthe1977/78harvesthad
beenfairlyhigh.For1979/80theaveragepriceremainedfairly
comparabletothatofthepreviousyearbutshowedvariations
betweenMemberStates;increasesintheNetherlands (+18.1%),
France(+11.3%)andBelgium(+11.4%),anddecreasesrangingfrom
1to13.3%intheotherCommunitycountries .TheUnitedKingdom
andDenmarkhavenosignificant quotationsforthisproduct.
Themonthlyanalysiscarriedoutthroughouttheseasonshowsthat
inBelgium,inLuxembourg andintheNetherlands ,appleprices
nearlyalwaysfailedtomatchthebasicprice.
InGermanytheyfluctuated aroundthebasicprice,whereasin
ItalyandinFrancepriceswerealwaysveryhigh.
-Pears(various,qualityClassI,60mmor70mmorover,according
totimeofyear)
Averagepricesinthe1979/80seasonfellinalmostallCommunity
countries.Theconsiderablefallrangedfrom19.7%inGermanyto
31%intheUnitedKingdom;theNetherlands constituted an
exceptionwithanincreaseof1.6%.IrelandandDenmarkhaveno
significant quotationsforthisproduct.

84
Themonthly analysis showed that there wasadegree ofstability
inprices .OnallCommunity markets ,prices were above thebasic
price andsometimes reached theexceptional levels encountered the
previous year .
-Peaches (various ,quality Class I,size 51/61mm or61/67mm
according toperiod )
In1979 ,prices were 2.7% lower than in1978 inFrance and16.1%
lower inItaly ;itshould besaid that the1978 prices sometimes
reached three times thebasic price .Theseasonal trend was ,
however ,normal andthemonthly average waswell above thebasic
price .
-Table grapes (various ,quality Class I)
Grape prices ontheFrench market were lower by18.7% than inthe
previous year .InItaly ,however ,theaverage price was10.9% up
ontheprevious year .
However ,thefigures areencouraging inview ofthebasic price
level inrespect ofFrench prices ,whereas inItaly only the
"Regina deiVigneti "variety reached ,during August ,prices
substantially higher than thebasic price .Prices forthe
"Regina "variety ,ontheother hand ,remained more orless atthe
basic price level .
-Oranges (various ,quality Class I,size 67/80mm )
Prices in1979 were 10.1% below those oftheprevious year .
However ,thedaily prices recorded throughout theyear yielded
quite high monthly averages ,which ,according tothevariety in
question ,were sometimes 10-15 ECUabove thebasic price .
-Mandarins (quality Class I,size 54/64mm )
Theaverage annual price formandarins fell by29.5% compared with
1978 /79.
Themonthly prices didnotvary greatly andwere normally between
5and 7ECUabove thebasic price .

85
-Lemons(qualityClassI,size53/62mm)
Theaverageannualpriceforlemonsfor1979/80wasthesameasin
thepreviousyear,whenhighpriceswererecordedasaresultof
fallingproduction .
Pricesare,however,stillhighand,throughout theyear,the
monthlyaverages wereabovethebasicprice.
-Cauliflowers ("withleaves"or"trimmed",according toperiod,
qualityClassI)
Theaverageannualpricesincreased onlyinBelgium,wherethey
were8.8%upon1978/79.InallotherMemberStatestheyfellby
percentages rangingfrom3to23.6%.
Throughout theyear,therewerevariations inpricesfromone
markettoanother,pricessometimes beingveryhighbutsometimes
closeto-orevenbelow-thebasicprice.
-Tomatoes ("round",qualityClassI,size57/67mm)
In1979pricesfellinalltheCommunity countries exceptGermany,
wheretheyroseslightly abovetheleveloftheprevious year.
Thesharpest dropsoccurredintheUnitedKingdom (28.1%),Belgium
andFrance (17.5%).
Themonthlyanalysis showsthatthedailyratessometimes fell
belowthebasicpriceinFranceandItaly,particularly duringthe
highseasoninJulyandAugust.
Thechanges-oftenrapid-indailypricesandthevarious
coefficients appliedtoproductsotherthanthepilotproducts
explain whyquantities ofsomeproductsfellshortofthewithdrawal
priceandwerewithdrawn fromthemarketbytheproducer groups,
evenwhentheaveragepricesofthepilotproductwerehigherthan
thebasicprice.
(c)Worldprices
Giventheperishable natureoftheproducts ,fruitandvegetable
pricesarefixedmoreorlessindependently ontheprincipal
markets.Thereisnorealworldmarketforsuchproducts and
consequently noworldprices.

86
(d)Consumer prices
Inview ofthelarge number ofvarieties ,qualities andsizes of
fruit andvegetables ,andinview ofthewide differences inprice
foragiven product from oneshop toanother ,itisnotpossible to
determine consumer prices forthevarious types ofproduct .
Outlook
Inthecase ofvegetables -most ofwhich areannuals -therapid
succession ofcrops andtheuseoffixed ormovable means ofprotection
make forflexibility ofsupply andenable growers toadapt production
promptly todemand .
Inview ofthetrends invegetable production over thelast fewyears
andthestability observed inthis sector ,nomajor changes aretobe
expected forsome time tocome .
Inthecase offruit too ,analysis ofproduction trends over a
relatively long period shows acertain stability ,albeit with
considerable fluctuations from oneseason toanother ,aswasobserved
forexample inthe1977 /78harvest .
Economic aspects ofthemeasures taken
(a)Import andexport measures
i)Countervailing charges onimports
During the1979 /80marketing year ,countervailing charges were
imposed onimports ofthefollowing products :
cucumbers from Spain ,Greece andRomania ;
tomatoes from Morocco ,Romania ,Bulgaria ,Spain ,Israel andAlbania ;
peaches from Greece ;
some varieties ofapple from Spain andYugoslavia ;
pears from Spain ;
table grapes from Greece ;
certain varieties ofplums from Spain ,Romania andYugoslavia ;
certain varieties oforanges from Greece ;
lemons from Uruguay .
These measures ,some ofwhich were applied foronly ashort time ,
resulted inhigher prices fortheimported products following adrop
oreven acomplete halt inshipments totheCommunity .

87
ii)Exportrefunds
Exportrefundswerefixedduringthe1979/80marketingyearfor
freshsweetoranges,freshmandarins,freshlemons,tablegrapes,
walnutsinshell,shelledalmonds,shelledhazelnuts,peaches,
dessertapplesandtomatoes.
Theserefunds,whichvaryaccordingtoproductandaregenerally
low,werefixedonlyfordestinations whichaffordedrealexport
outletsandonlyiftherewereexportdifficulties tobeovercome.
iii)Protective measures
Protective measureswereadoptedagainstgarlicfromSpain,
suspendingitsreleasetothemarketinFranceentirelyfrom
24Novemberto31December1979and,subsequently ,partiallyfrom
1Januaryto31March1980.Thereleasetothemarketoftomatoes
fromSpainandMoroccowassuspendedinFranceon14May1980for
oneday.
iv)Applesfromthesouthernhemisphere
Estimatedexportsfromsouthernhemispherecountries andtheprice
trendforCommunityapplesweresuchthatitwasnotnecessaryto
asksuppliersinthesouthernhemispheretoadapttheirprogrammes
forexportstotheCommunity ,forMarchtoAugust1980.
(b)Withdrawals fromthemarket
Intervention during1979/80wasonalargerscalethanin1978/79
forapples,pears,peachesandtomatoes;itwasonasmallerscale
forotherproducts.
Thequantityofappleswithdrawnwas468000tonnes,6.81%of
production .Thelargestwithdrawals wereintheNetherlands
(118000tonnes)butthehighestproportionoftheharvestwas
reachedinBelgium(22%,70000tonnes).
WithdrawalsofcitrusfruittookplaceonlyinItalyandaccounted
for676000tonnesoforangesand18000tonnesofmandarins,0.04%
and5.35%respectively ofItalianoutput.

88
Peaches were withdrawn almost exclusively inItaly (57000tonnes )
butthis only represents 3.66% ofCommunity production .
Withdrawals ofother products were even lower :2.58% for
cauliflowers ,2.55% forpears ,and3.36% fortomatoes .There were
nowithdrawals atalloftable grapes .
(c)Measures topromote themarketing ofCommunity citrus fruits
Measures topromote theprocessing oforanges
Measures toassist themarketing ofproducts processed from lemons
The "penetration premiums "(financial compensation topromote the
marketing ofCommunity citrus fruits )were fixed atthefollowing
levels forthe1979 /80marketing year :
10.91 ECUper100kgnetfororanges oftheMoro ,Tarocco ,Ovale
calabrese ,Belladonna ,Navel andValencia late varieties ;
9.36 ECUper100kgnetfororanges oftheSanguinello variety ;
6.16 ECUper100kgnet fororanges oftheSanguigno andBiondo
Commune varieties ;
9.36 ECUper100kgformandarins ;
5.46 ECUper100kgnetforclémentines ;
6.68 ECUper100kgnetforlemons .
Compared with 1978 /79,thefinancial compensation wasincreased by
thetotal percentage fixed fortheincrease inbasic andbuying-in
prices ofthesame products ,i.e. 1.5% .
Inapplication ofCouncil Regulation (EEC )No2601 /69of18December
1969 laying down special measures toencourage theprocessing of
certain varieties oforanges ,theminimum price tobepaid by
processors toproducers oforanges andthefinancial compensation
payable tothese processors were fixed atthefollowing levels for
the1979 /80marketing year :

89
Type ofproductMinimum price ,
ECUper100kgnetFinancial compensation ,
ECUper100kgnet
Oranges ofthefollowing
varieties
Biondo Comune
grade I
grade II
grade IIormixed10.28
8.45
6.656.89
5.06
3.26
Oranges ofgrade IIormixed
ofthefollowing varieties :
Moro and Tarocco
Sanguinello
Sanguigno13.12
12.17
10.299.73
8.78
6.90
Finally ,themeasures adopted toassist themarketing ofproducts processed
from lemons ,which were applied forthefirst time inthe1977/78marketing
year ,fixed theminimum price tobepaid togrowers byprocessors for
1979 /80at12.58 ECUper100kgnetandthefinancial compensation payable
totheprocessors at8.03 ECUper100kgnet .
d)Single prices
Nomonetary compensatory amounts were fixed forfresh fruit and
vegetables .
e)Budgetary expenditure
EAGGF guarantee expenditure onfresh fruit andvegetables amounted to
151.5 million EUAin1979 ,isforecast at200.0 million EUAin1980 and
estimated at243.9 million EUAin1981 ,or1.6% ,1.9% and1.9%
respectively oftotal EAGGF guarantee expenditure .Thefigure of200
million EUA can bebroken down into 45.0 million EUA onrefunds and
155.0 EUA onintervention .

90
11B .PROCESSED FRUIT AND VEGETABLES
1.Introduction
From 1978 to1979 production ofprocessed fruit andvegetables changed
asfollows :
'000 tonnes
:Products processed from : 1978 : 1979 :
:VEGETABLES : 4745 (x): 5177 (x):
:FRUIT : 2791 : 2846 :
(x)including preserved tomatoes .
Production ofprocessed vegetables from 1978 to1979 .
Community production ofsome sensitive products wasasfollows :
a)tomato concentrates :production was432000tin1979 compared with
296000 t(1)in1978 ,arise of45% ;
b)whole peeled tomatoes :production rose by40% ,from 873000t(1)in
1978 to1223000 tin1979 ;
c)tomato juice (CCTheading 20.07 ):production rose by34%from
35.000 tin1978 to47.000 tin1979 ;
d)preserved mushrooms :production rose from 177000tin1978 to
197000 tin1979 (+11%);
e)preserved peaches :production was96000 tin1978 androse by66%
to160 000 tin1979 :
f)theproduction oforange juice inItaly was60000tin1978 and
rose by50%to90000 tin1979 .Lemon juice production continues
torise (from 38000tin1978 to53000 tin1979 ,anincrease of
39%).
(1)Figure corrected from last year 'sreport .

91
2.Consumption andtrade
Thegeneral state oftrade inthis sector isshown inthefollowing
table :
1978
IMPORTS EXPORTS :
Tonnes mEUA Tonnes :mEUA :
:TOTAL :
:Intra-EEC :
:Non-member countries :4012 000
1912 000
2100 0002674.500
1280.300
1396.2002971 400 :
2537 500 :
433 900 :1924.000 :
1620.000 :
305.000 :
1979
IMPORTS EXPORTS :
Tonnes mEUA Tonnes : mEUA :
:TOTAL :
:Intra-EEC :
:Non-member countries :4.350.000 :
2.190.000 :
2.160.000 :2.910.000
1.469.000
1.441.0002.670.000 :
2.200.000 :
470.000 :1.737.000 :
1.407.000 :
330.000 :
Theavailable quantities oftomato concentrates andpeeled tomatoes rose by
around 35.5% from 1978 to1979 .This wasmainly duetoanincrease in
production .
Thequantities oftomato concentrates available forconsumption were
376 000 tin1978 and 380 000 tin1979 .
Imports fell from 93000 tin1978 to50000 tin1979 .Exports ,onthe
other hand ,increased substantially (82500 tin1978 and110000 tin
1979 ).
Intra-Community trade also expanded sharply from 80000tin1978 to
100 000 tin1979 .
Imports ofpeeled tomatoes were much lower than in1978 (40000tcompared
with 61000t).Exports ,ontheother hand ,rose steeply :44000 tin1978
and74000 tin1979 .Thequantities available forconsumption rose from
863000 tin1978 to1120000 tin1979 .Intra-Community trade also rose
considerably (from 156000 tin1978 to289000 tin1979 ).
Imports andexports oftomato juice remained practically unchanged from
1978 to1979 .

92
Imports ofpreserved peaches rose (107000tin1978 to150000 tin
1979 ).Exports remained insignificant .
Thequantities ofpreserved mushrooms available forconsumption' hardly
varied :210000 tin1978 and212000 tin1979 .Imports fell :.from
46000 tin1978 to33000 tin1979 ;exports also dropped .
3.Prices
World prices fortomato-based products ,inparticular peeled tomatoes and
concentrate ,remained fairly stable inabsolute terms ,with theresult
that ,because ofinflation ,prices fell inconstant terms .
Forpreserved mushrooms ,thefall inworld market prices ,which isliable
toinfluence theCommunity market andwhich hadnecessitated theadoption
ofprotective measures against imports inMay1978 ,continued in1979 .
TheCommunity price levels forother products didnotgive rise toany
difficulties ,generally speaking .
4.Outlook
Production oftomato-based products in1980 should bedown on1979 ,orat
least nothigher .Thesystem ofproduction aidfortomato-based products ,
peaches insyrup ,prunes andpears ,succeeded initsobjective of
strengthening theposition ofCommunity products .
Theprotective measures adopted attheendofMay1978 forpreserved
mushrooms arestill inforce ,except vis-a-vissupplier countries which
have agreed tolimit their exports totheCommunity .
5.Budgetary expenditure
EAGGF guarantee expenditure onprocessed fruit andvegetables amounted to
30.6 mECUin1978 ,isforecast at290.9 EUAin1979 andisestimated at
459mEUAin1980 ,respectively 0.35% ,2.7% and4.0% oftotal expenditure
bytheGuarantee Section .
6.With effect from 1January 1981 theaccession ofGreece totheCommunity is
likely tohave amarked effect onthefigures given above .Inthe
processed fruit andvegetables sector themost important product inGreece
istomato concentrate ,with production totalling 172000 tin1978 and
180000 tin1979 ,followed bypeaches insyrup (130000tproducted in
1978 and1979 ).Greek production ofpeeled tomatoes andorange juice
amounted to26000 tand26500 trespectively in1978 and30000 tand
31000 tin1979 .
Asregards Greece 'strade with non-member countries ,themain products
involved were tomato concentrate (65000 tin1978 and38000 tin1979 )
andorange juice (31000 tin1978 and27500tin1979 ).Theproduction
forecasts forGreece for1980 show something ofanupward trend fortomato
concentrate andpeaches insyrup .

93
11C .LIVE PLANTS
TheCommission departments donothave sufficient information available
toenable them tojudge howproduction capacity andproduction itself
developed inthepreceding year .
Asregards production capacity ,considerable efforts have clearly been
made tocope with rising energy costs .Many hothouses have been
insulated andtheir heating systems changed ,both measures requiring a
substantial investment ofcapital .Other hothouses have either been
temporarily shut down orsubjected tointensive use ,with opposite
effects onproduction .Recourse hasalso been hadtoplants requiring
less heat .
Other sectors ,such asthebulb andnursery product sector ,less
affected byenergy costs ,aredirectly exposed toweather conditions ,
theeffects ofwhich cannot beestimated ,being spread over several
consecutive years since thecrops areperennial ones .
Intra-Community trade rose by12.3% in1979 ;imports from non-member
countries rose by56.2% inthesame year andexports tonon-member
countries by6.7% .Exports valued at310million ECUexceed imports ,
which amount to289 million ECU .

94
12.HOPS(1)
In1979theCommunity's6701growersproduced 38%oftheworldproduction of
hops,i.e.44800t.Ofthesegrowers6112weremembersofrecognized
producer groups.TheCommunity harvestwasabout5%upon1978inspiteof
thereduction ofareasplanted (24658hain1979,2%downon1978).The
varieties richinalphaacidandthearomaticvarieties accounted for47%and
50%ofproduction respectively ,ascompared with29%and70%in1971.
Itshouldbenotedthatwhileworlddemandforbeercontinues toriseby3%a
year,Community beerproduction rosebyjustover1%in1979.Therecontinues
tobeamodestincreaseinthedemandforhops(1.8%)intheworld-wide
contextbutthisisaccounted formainlybydeveloping andState-trading
countries .IntheCommunity thedemandforhopsiscontinuing tofallvery
slightly asaresultofimproved manufacturing techniques andatendencyto
preferextracts andpowderstohopconesforreasonsofstorageandeaseof
handling .
In1976,theCommunity ,whileremaining thechiefworldexporterofhops
(18000t,aboutthesamequantityasin1978),imported 8100t,anincrease
of2.5%on1978.EECexportsofhopproducts (powdersandextracts )are
increasing .
Thefavourable effectsofthemarketstabilization operations whichhavebeen
carriedoutintheCommunity since1978continued tobefeltin1979.The
pricesatwhichcontracts wereconcluded inadvanceremained muchthesame,
whilepricesontheopenmarketcontinued toriseowingtothefactthatin
1979worldproduction wasbelowthequantity boughtbythebrewingindustry ,
thisdeficitof1.8%servingtoreducestocksslightly .
Theprohibition onnewplantings ,anintegralpartofthemeasures to
encourage restructuring andconversion operations ,whichhavetoalarge
extentledtothestabilization oftheCommunity marketoverthelasttwo
years(2414hain1978and1979)wasliftedattheendof1979.
Marketstability hasenabledexpenditure bytheEAGGFonhopstobereduced
considerably (5.6million ECUin1979ascompared with10million ECUin1978).
AsregardsGreece,itproduces about20%ofitshoprequirements fromacrop
areaof55ha;intheimmediate futureatleastitsaccession isnotexpected
tohaveanyimpactonthemarketsituation .

95
13MILKANDDAIRVPRODUCTS (1)
1.Production andutilisation ofmilk:
a)DairycownumbersintheCommunity areremarkably stablewithlittle
variation aroundatotalofjustover25millionheadoveranumberof
years.Thisissodespitequiterapidchangesinthestructure ofdairy
farming .Someslightbuild-upinnumbershasbeenapparentsince1976
butitseemslikelythatthepeakhasbeenreachedandnumbersare
stabilising .During1979,numbersfell,sothatattheendoftheyear,
theywere-0,2percentor42,000cowslessthanatthestartofthe
year.Theeconomicrecession hashadanimportant impactondairy
farmingparticularly inthosememberstateswithhighratesof
inflation .However ,thenon-marketing ofmilkanddairyherdconversion
schemesstillshowlittlesignsofcontributing inasignificant fashion
tothereduction ofsurplusdairyproduction intheCommunity .
Applications covering 300,000dairycowswereapprovedinthefirst
eightmonthsof1980undertheseschemesmakingatotalof1,3million
cowssincetheintroduction oftheschemesinJuly1977.Thedeadline
forapplications underthenon-marketing schemewas15September 1980
andfortheconversion schemeitistheendofthe1980/81milkyear
withthepossibility ofbeingextendedthereafter .
b)Thedevelopment ofmilkyieldperdairycowcontinues tobethe
principal determinant ofthegrowthofmilkproduction .In1979,
averageannualyieldperdairycowincreased to4040kg,orbyjust
under1percent.However ,thisrelatively modestyieldincrease wason
topofasubstantial 4,2percentincreasein1978.Itdoes,however ,
seemthatyieldsinthosememberstateswithhighyielding cows,notably
theNetherlands ,U.K.andDenmark ,havestabilised temporarily .The
mainimpetustogrowthappearstobecomingfromthosememberstates
withloweryieldingdairycows-France(particularly Brittany )and
Italy.Production isalsoincreasing rapidlyinthesouthofGermany .
Thereis,withoutdoubt,aconsiderable potential foryieldincreases
throughout theCommunity sothatthetendencytoover-produce islikely
toremainforsomeyearstocome.Community milkproduction in1979was
2percentuponthatof1978andtheincreasein1980islikelytobe
somewhatgreater .
(1)Seetables M13.1toM13.18

96
c)Ahigherproportion ofmilkproduction continues tobesoldbyfarmers
todairiesforprocessing intomilkanddairyproducts .1979wasno
exception ,sothatdeliveries ofmilkbyfarmerstodairiesincreased by
2,8percent.However ,exceptionally ,theincrease wasnotused'for
greaterproduction oftheintervention productsofbutterandskimmed
milkpowder.Theworldmarketfordairyproduceexpandedrapidlyin
1979andasaresultCommunity production ofcheese,wholemilkpowder,
caseinandcondensed milkincreased substantially tofillthisdemand.
Owingtothefavourable marketsituation ,lowerproduction andspecial
disposal measures ,thelevelofskimmedmilkpowderintervention stocks
werereduced bytheendof1979to227,000tonswhilethoseofbutter
(including privateaidedstocks)werelowerby46,000tonsincomparison
withtheirend1978level.
2.Production andconsumption ofmilkproducts
a)Drinkinq milk
In1979theproduction andmarketing offreshmilkcontinued toincrease
byabout1,5%,exceptintheUnitedKingdom ,wheretheconsumption of
drinking milkwasdecreasing again.Theshifttowardsthemanufacture
offreshmilkproductsiscontinuing .Itcanbeseen,thatinthe
Community moreUHTdrinking milkproductsarebeingsoldandless
pasteurised drinking milkproducts .Long-keeping yoghurtisreplacing
naturalyoghurtmoreandmore.Asamatterofconvenient marketing ,the
consumers seemtoacceptthelowerqualityoftheseproducts ,offered by
manufacturers andshop-keepers .
Thesteadydeclineintheaveragefatcontentofdrinking milkproducts
couldbestopped ,perhaps ,asaresultofachangeintheconsumers view
onmilkfats.
Theexpansion inyoghurtsalesofpreviousyearshasnotbeen
maintained .Creamconsumption in1979wasabovethelevelofprevious
years.Drinking milkproducts suchas.chocolate milk,mixeddrinksetc.
increased significantly ,partlyinconnection withtheSchoolMilk
Programme .
b)Butter
Theproduction ofbutterrosebyonly15,000tonsin1979,compared with
theincreaseof150,000tonsin1978.Ontheotherhand,total
consumption withintheCommunity increased by50,000tons,mainlyasa
resultofspecialsales.Buttheimbalance onthebuttermarket
continues onaccountoftheincentives toincrease production andofthe
persistent trendofdeclineinconsumption .However,specialmarketing
measuresenablebuttertobesoldatgreatlyreducedpriceswithinthe
Community andsignificant exportsatworldmarketpricesandasfoodaid

97
also provide some relief .Therefore ,stocks arecontinuing todecline .
BytheendofSeptember 1979 total public andprivate stocks hadrisen
forthefirst time above the600,000 tons mark .Nevertheless ,they will
amount ,attheendof1980 ,toonly 270,000 tons .
In1980 ,exports ofbutter andallother dairy products have expanded ,
andbutter production will decrease forthefirst time byabout 2%.In
view ofthis newsituation thevery expensive ,socalled Christmas
butter action ,will notberepeated in1980 .
Itshould also beremembered ,that theEECbutter balance includes
imports from NewZealand amounting in1979 to118,000 tandin1980 to
some 95,000 tons .
c)Skimmed milk powder
Theamount ofskimmed milk powder produced isdependent inpart onthe
useofmilk forother milk products andinparticular onthequantities
ofskimmed milk used inliquid form foranimal feed orprocessed into
cheese and casein .
In1979 production was2.1million tons (2.2million tons in1978 ).A
further slight drop of2%isexpected for1980 ,asmore oftheavailable
skimmed milk isbeing used forother purpoes .
Themanufacture ofskimmed milk powder farexceeds demand atmarket
prices .Only about 10%ofthepowder manufactured could besold inthe
Community atthefixed price .65%wassold asfeed with a50%price
reduction forfattening calves ,while 25%wassold with a90%price
reduction forfeeding ofpigs andpoultry in1979 .
During 1980 allthemeasures ,except sales ofskimmed milk powder to
pigs andpoultry feedingstuffs ,have continued though atreduced levels
ofaid ,with theresult that there will beapproximately 200,000 tons in
public stocks attheendoftheyear .
d)Cheese
Community cheese production andconsumption also increased in1979 by
about 5%and3%respectively .This trend ,which hasbeen apparent now
forseveral years ,seems tohave persisted in1980 .Thecause ofthis
isasteadily improving supply situation with regard toquality and
presentation ,aswell astheactive marketing policy ofcheese
manufacturers throughout theCommunity .
Inaddition ,anincreased demand ontheworld market hasallowed the
manufacture ofmore milk into cheese intheCommunity .

98
e)Wholemilkpowder
Production ofwholemilkpowderhasriseninrecentyearsmainlyon
accountofincreased exports.In1979theproduction wasagainabout
10%higherthanin1978.Consumption withintheCommunity however ,has
remained unchanged .Fluctuation inthissectorwillcontinuetobe
determined mainlybydemandontheworldmarket.Thistrendwill
continuein1980asaresultofasignificant expansion inexport
outlets .
f)Condensed milk
Despitethereduction indemandwithintheCommunity ,theproduction was
slightlyincreased in1979following theexportoutlets.Community
consumption hasnotincreased forseveralyears.Thus,itseems,that
thismarket,thoughhavingachieveditslimitwithintheCommunity ,
stillhasthepossibility ofgrowthinexportmarkets.
g)Casein
IntheCommunity themanufacture ofcaseinandcaseinates isbasedon
heavyexpenditure ofpublicfunds,theimportdutiesforthemaintariff
headingsareboundunderGATTataverylowlevel.However ,in1979
Community manufacturers havesucceeded inincreasing theirproduction
andtheirshareoftheworldmarket.Thisevolution hascontinued in
1980thoughthelevelofaidpaidforskimmilkmanufactured intocasein
andcaseinates hasbeenreducedsignificantly .
3.WorldMarketSituation
International developments inproduction andtrade
MilkProduction andPolicies
Inglobalterms,thenumberofdairycowsintheworldchangedonly
moderately in1979,compared withamoresignificant increasein1978.
However,themaintrendsweremaintained ,i.e.continued decreases in
NorthAmericaandAustralasia ,stability inWesternEuropeandincreases
inEasternEurope.Inthecourseof1979signalsshiftedslightlyin
bothUSAandEEC,asUScownumbersceasedtodecline,andstartedto
increasein1980.EECcownumbers ,ontheotherhand,startedto
decrease .Inbothcasesthisdevelopment seemstoreflectthemain
orientation ofpricepolicyinthesecountries .USmilkpriceshave
keptpacereasonably wellwithinflation .IntheEEC,ontheother
hand,pricesgenerally laggedbehindinflation .EECmilkproduction ,
furthermore ,wasinfluenced byotheranti-surplus measures .
(7)

99
However ,againworldmilkproduction figuresclearlydemonstrated the
roleofyieldperdairycow.Thus,inspiteofincreased cownumbersin
USSRin1979,milkdeliveries fellbymorethan2%becausemilkyield
percowdeclined by3%,compared with1978.Inthefirst6monthsof
1980,thisdevelopment becameevenmoreaccentuated ,asmilkyieldsin
theUSSRfellbymorethan5%andmilksupplies bymorethan4%,
compared withthesameperiodof1979.
IntheUSAaveragemilkyieldpercowincreased in1979by2%andmilk
production by1,4%reflecting aslightdecreaseincownumbers.
However ,throughout thefirsthalfof1980USmilkproduction increased
by3,8%,ofwhichonly0,7%wasduetoincreaseincownumbersandmore
than3%toyieldincreases .
InCanada,milkdeliveries in1979increased by0,4%whereas cownumbers
decreased considerably .Hence,theaverageyieldincrease amountsto
approximately 4-5%,andthisveryhighrateofincreaseiscontinuing
throughthefirsthalfof1980.
InAustralia ,milkproduction in1979increased againstall
expectations ,by1,9%.Theincrease wascompletely unexpected because
dairycownumbersfellby7,2%.Hence,averageyieldpercowincreased
bymorethan9%!In1980,however,cownumbersarestilldecreasing .
Together withdroughtsthishasreducedmilkyieldsand,consequently ,
milkproduction .
Milkproduction inNewZealandismainlydependent ontheyield
(weather )factor,asdairycownumbers ,althoughslightly onthe
decrease ,onlyvaryabout0,5%peryear.Thus,asmilkproduction in
1979increased by3,7%compared with1978,theincreaseinaverageyield
percowamountedtomorethan4%.Forthewholeof1980itislikely
thattheyieldwillincrease another 2-3%atleast.
TotalcownumbersinWesternEurope(15countries )remainedstablein
1979,however ,milkdeliveries -andyields-increased bymorethan
2%.Inthesecountries milkyieldshavesustained theirrateof
increase throughthefirsthalfof1980.
Intotal,worldmilkproduction in1979increased lessthanonepercent
compared with1978.Thisisonlyhalfoftheincreasein1978andis
notablyduetothereductions inUSSR-milk production .However ,itis
evident ,thatinternational milkproduction in1980willincreasefaster
thanin1979,inspiteofcontinued difficulties notablyinUSSRand
Australia .

100
Inthefollowing somefurtherinformation isgivenonchangesinmilk
policiesin1979/80:
TheU.S.supportpricelevelformilkhasincreased by39%overthelast
3years,andthetotal,averagemilkpricepaidtoproducers in1980
willprobably beabout10%higherthanin1979.Effective from1st
April1980,thesupportpriceformanufacturing grademilkwasincreased
by7.6%to12.07USdollarsper100lbsofmilk,andfurtherby6.0%to
12.80USdollars/100lbsinOctober1980.Together withhigherbeef
supplyandstagnating beefprices,morecowsarekeptinmilk
production .Furthermore ,theprice:feedratioremainsvery
favourable ,andtheconsequent increaseinmilkproduction in1980could
beashighas3or4%,compared with1979.Atthesametime,and
notablythroughthefirsthalfof1980,commercial disappearance ofmilk
anddairyproductsstartedtodecrease .Thisdecrease ,whichin
particular affectedbutter,fluidproducts andAmerican cheese,followed
alongperiodofgrowth.Hence,thecombinedeffectsofproduction and
consumption developments tendtoincrease theU.S.intervention stocks
forbutter,cheeseandskimmedmilkpowder.Inthiscontextproblems
havearisenconcerning thedisposalcostsofthedairypolicybudget.
InCanada,milkproducerpriceswereincreased inthreesteps,
altogether by11.6%,fromthedairyyear1979/80to1980/81.
Furthermore ,pricescanbeadjusted whenever thecostformulashowsa
changeofmorethantwopercent,withnomorethantwoadjustments in
onedairyyear.Motivated bystronger demandandneedforlargerwinter
supplies ,thenational milkquotaswereincreased bytwopercentin
January1980.However ,thegovernment hasauthorised anincreaseinthe
"exportquota"byafurther 2%(lastyear3%)ofthequotabasis.This
exportquota,subjecttonormalquotalevy,allowsmoremilktobe
produced withoutover-quota levyifthemilkisexportedintheformof
certainproductstocertainmarkets .Theprinciple ofproducer
responsibility forthecostsassociated withanyspecialproduction for
exportandforthedisposal ofallsurplusproducts hasbeen
reaffirmed .Thefederalgovernment willonlyberesponsible for
deficitsintheexportaccountresulting frommajorunforeseen changes
inworldmarketconditions .Thejointlyfundedproducer-government
advertising programme whichstartedin1975-76ischaracterised asa
success.Anewbudgetof1,5milliondollarsfor1980-81fordairy
productandmarketresearch hasbeenapproved .Thesubstantial increase
inCanadian milkproduction in1980isnotablyreflected insubsequent
increases intheproduction ofcheeseandevaporated milk.Throughthe
first5monthsof1980theseproduction levelswererespectively 6%and
24%higherthaninthesameperiodof1979.
InNewZealand,theDairyProductsPricesAuthority fixedthebasic
priceofmilkforthe1979/80dairyyearat176,91c/kg,or6.8%higher
thanin1978/79.Thefat/skimrelationship wasfixedat70:30.
However ,inNovember 1979,afterpressure fromtheNewZealandDairy
Board,theAuthority increased thepriceto185,00c/kgor11.6%higher

101
than the1978 /79price .Nevertheless ,thefinal ,average price to
producers would increase bysome 20% ,compared with 1978 /79byadding
theshare oftheBoard 'ssurplus intrading inrelation totheoverall
national Reserve Account .According toregular annual surveys the
average netincome atfarm level isestimated tobe14,7% higher in
1979 /80than in1978 /79.Expenditure onthefarm during thesame period
isestimated tohave risen by16% .Theoverall increase of4%in
production ofbutterfat ,representing anewrecord level ,ismainly
utilised intheproduction ofbutteroil (+136.4% ),cheese (+17.2% ),
andwholemilk powder (+25.8% ).Butter production andSMPproduction
have fallen by8.5% and6.2% respectively .
TheAustralian dairy policy hascontinued itsorientation towards
differentiating prices forindividual dairy products inaccordance with
obtainable market prices .Attheoutset ofthe1979 /80dairy year there
were noquantity limits linked tothefollowing guarantee prices ,which
should ,inprinciple allow efficient manufacturers topaymilk suppliers
around 1,75 Austr .dollars perkg.butterfat atthefarm gate :
Butter 1.240 Austr .dollars perton
SMP 534 " 11 " "
Casein 1.383 " " " "
Cheese • 1.075 " " 11 "
Wholemilk powder 818 " " 11 "
These prices aresubject toalevy system .Duetoincreases inthelevy
rates ,theabove prices were changed during themilk year ,andthe
following wholesale price values were inoperation at1stApril 1980 :
Butter
Butteroil
Cheese
SMP
WMP
Casein1.585 Austr .dollars perton
1.415 " " " "
l'A50 .. .. «»
700 " " " "
95Q H H H M
1.715 " " " "
From 1978 to1979 this policy asresulted inthefollowing relative
changes intheproduction ofindividual dairy products ,based on
approximately unchanged milk production :
Production ofcheese
" butter
" SMP+18.5
-17.7
-32 .-
In1980 ,theexpected reduction inmilk production ofabout 8%will
mainly bereflected inafurther decrease inbutter /SMPproduction .

102
InJapan ,milk production increased in1979 byalmost 6%asacombined
result ofincreased cownumbers andyield percow .This ledto ,
increases inproduction asfollows :5%inconsumption -milk ,2.1% in
cheese ,9.8% inbutter andanincrease of13%inSMP .
Thedomestic guaranteed manufacturing milk price fortheApril -milk
year 1980 /81hasbeen fixed atYen88.87 perkgforaceiling quota of
1.93 million tons .However ,asthegovernment hasbeen encouraging milk
output ,theindustrial milk quota didnotenter into force inthethree
preceding years .
Twomeasures tosupport domestic production ofnatural cheese were also
announced :
a)Financial help tobuild factories toproduce mainly Cheddar andGouda
type cheeses .Theproduction target issetat10,000 tons ofnatural
cheese and6,000 tons ofwhey powder .
b)Eight year plan tosubsidise thecost ofproducing natural cheese
from domestic milk .
International Trade (1)
World market offtake
Interms ofexports ,theworld market continued toexpand in1979 for
allthemajor dairy products .Thetotal butter /butteroil market
including food aid ,increased by38%compared with 1978 tomore than
800,000 tons .Asfood aidinbutterfat didnotexpand significantly ,
thecommercial butterfat market increased relatively more .About 60%of
themarket increase wasduetoincreased Russian imports (+135,000
tons ),however ,significant increases took place inmany other countries
among which Egypt (+10,000 tons ),Morocco (+8,000 tons ),Colombia
(+5,000 tons ),Iran (+19,000 tons ),Jordan (+5,000 tons )andPoland (+
8,000 tons ).Developing countries were responsible formore than 30%of
the total increase inthe butter market .The world cheese market
increased by9%,reflecting increased imports inseveral countries ,
notably inIran ,Saudi-Arabia ,Lebanon ,Japan andSpain .Whereas the
13%increase intheworld whole milk powder market in1979 must be
attributed toincreases inavery bignumber ofimporting countries all
over theworld ,themore modest increase inthecondensed milk market
(+7%)isthecombined result ofcontinued decreases inmany markets and
significant increases inafewmarkets among which could bementioned
Greece ,Libya ,Mexico ,Saudi-Arabia andsome other Persian Gulf
countries .Finally ,theworld skimmed milk powder market only increased
(1)(Seetable M.13.11 )

103
byabout7%in1979incomparison to1978.However,significant changes
tookplaceinimportsofindividual countries ,partlybasedontheir
changing needsforfoodaid,andirregular importsofmilkpowderfor
animalfeed.Someofthebiggestincreases inimportswereinAlgeria,
Mexico,Spain,Philippines ,Iraq,SaudiArabiaandChile.Substantial
decreases inEgypt,Pakistan ,Nigeria ,SomaliaandJapanshouldalsobe
mentioned .
EECExports
ItisevidentfromTableM.13.11thatEECexporters havetakenfull
advantage oftheexpanding worldmarketfordairyproductsin1979.
Onlyinthecaseofcondensed milk,therewasaslightdeterioration in
theEECmarketshare,evenifthetotalEECexportsofcondensed milk
increased incomparison to1978.Thesignificant increaseintheEEC
marketshareforbutter/butteroil reflectsnotablytheEECparticipation
inexportstotheirregular butimportant marketsmentioned above.For
skimmedmilkpowderasimilarincreaseinEECworldmarketsharein1979
isalsoinfluenced byincreased food-aiddeliveries .Asthetable
shows,itisforeseenthatEECexportswillcontinue toincreasein1980
forallmaindairyproducts .However,significant marketchangesare
takingplace.Hence,theforecasts areprobablyinaccurate .
International arrangement fordairyproducts inforcefrom1January1980
Theinternational arrangement fordairyproducts concluded inGATTin
theframework oftheTokyo-round isbelievedtoimprovethe
possibilities forcontinued development oftheworldmarketfordairy
products andtostabilise pricessothattheprincipal countries of
production andconsumption canfindamutualandprofitable basis,to
thebenefitofbothparties .Infact,thearrangement foreseesnotably
asystemofminimumprices,aregimeofreciprocal exchange of
information andaframework withinwhichtheeventual problemsofthe
participants canfindappropriate solutions .
TheCommunity hascontributed totheestablishment ofthisarrangement
inanactiveandpositive way,inviewoftheroleandthe
responsibility theCommunity hasintheinternational tradeofdairy
products .
EECImports
Thestatistics showthattheCommunity haveimported 118,000tonsof
butterin1979.Thequantity mainlyrepresents theimportsofNew
ZealandbutterintotheU.K.inaccordance withthespecialarrangement
following theProtocole 18oftheTreatyofAccession .Duetothe
expansion ofworldtrade,thisimportamountedto15%oftheworld
marketin1979against 21%in1978.EECcheeseimportsstabilised in
1979at78,000tonsorabout12%oftotalworldmarket.Aslight
increase isforeseen for.1980.

104
4.Producer MilkPrices
a)Thetargetpriceformilkwasfixedforthe1980/81milk-year,' with
effectfrom1June1980at22.26ECU/100kg.Thismeantthattherewas
anincreaseof4%ontheprevious year.Intervention pricesforbutter,
skimmed-milk powderandcertainItaliancheeseswerefixedaccordingly ,
inordertofollowtheaimsofthetargetpriceasdefinedinArticle3
ofRegulation N°804/68.
In1979actualmilkproducerpricesagainshoweddifferences whichare
attributable chieflytothemonetary measures andtheconnected fixing
ofrepresentative ratesforthevariousnationalcurrencies inrelation
totheECU.Moreover ,thedairiesinthevariousregionsofthe
Community differintheirutilisation ofmilk,theirspecificcost
situation andtheirparticular marketposition .
b)Wholesale andconsumerprices
Thegeneraleconomicclimateandthecompetition onthemilkmarkethave
recently madeitincreasingly difficult forsuppliers topassonthe
higherpricestotheconsumers .Themarketsituation hasinmanycases
prevented suchpricealterations frombeingputintoimmediate effect,
withtheresultthatprofitsfrommilkhavenotrisenasmuchasmight
havebeenexpected .
Asaresultofeconomic andmonetarydifferences betweentheMember
Statesandcertainnational measures concerning consumerprices,the
trendsintheseprices,expressed innational currency wereagainvery
variedin1979ascompared with1978.
TheCommunity'sprudentpricepolicyforthe1980/81milkmarketing year
shouldenablethesituation tosettledownsomewhatinthelongterm.
5.Marketprospects
Afteranincreaseindairycownumbersattheendof1978,numbersin
theCommunity fellbackslightly by-0.2%in1979andhavestabilised in
1980.In1981,afurthersmallfallinnumbersispossible .Increases
inmilkproduction havebeenconsiderable in1980inFrance,Germanyand
Italy.InDenmark ,production hasfallen,inIrelanditisstable,and
intheothermemberstates,onlysmallincreases havebeenexperienced .
In1981,theincreaseinmilkproduction intheCommunity seemslikely
tobeinlinewiththelongtermtrend-+1.5to2%.Deliveries to
dairiesin1980arelikelytoincrease bybetween2.5to3%.Highrates
ofinterest andinflation insomepartsoftheCommunities arelikelyto
inhibitmajorexpansion ofmilkproduction intheimmediate future
particularly inthelargerdairyherds.

105
Domestic consumption ofcheese andfesh c'airy products continued to
increase in1979 and1980 buttheincrease forcheese inparticular is
much less than inprevious years ,probably duetotheeffects ofthe
economic recession .Consumption ofbutter hasincreased slightly owing
inlarge part totheeffect ofsubsidies ;although intheUnited
Kingdom ,consumption iscontinuing tofall .
Increases indairy production have been absorbed byasubstantial
expansion intheworld market fordairy produce in1979 and1980 .World
exports ofnearly allmajor dairy products increased remarkably in
1979 .Exports ofcheese increased by9percent ,whole milk powder by
13percent ,andbutter /butteroil by38percent .Asaresult ,
increases inmilk production have been channeled into these products and
away from theintervention products ofbutter andskimmed milk powder .
Thus in1979 EECbutter production increased byless than 1percent and
skimmed milk powder production fell by5percent .Themajor markets
fordairy products have been intheMiddle East ,thewealthier
developing countries ,andinEastern Europe including Russia .The
Community delivered 179,000 tons ofskimmed milk powder asfood aidin
1979 andalmost 52,000 tons ofbutteroil .
Theworld market forbutter hasbeen relatively buoyant over thelast
twoyears andthis hasenabled stocks tobebrought down toreasonable
levels .Attheendof1979 EECstocks at372,000 tons (intervention
plus private-aided )were 46,000 tons less than atthestart oftheyear ,
andin1980 afurther decrease ofatleast 100,000 tons instocks is
anticipated .Theexport ofbutter atworld market prices hasbeen
accompanied byconsiderable efforts toincrease domestic sales of
butter .Thus consumer subsidies onbutter arepaid inLuxembourg ,U.K. ,
Ireland andDenmark which arelargely orwholly paid forbyFEOGA .
Short term consumer subsidies were paid over theChristmas period
1979 /80intheother member states .Finally ,aids arepaid onbutter
sales tobakers ,ice-cream manufacturers ,thearmed forces ,charities ,
and ,incertain member states ,forcheap sales forthose onsocial
security andforbutter concentrate .
Themarket situation forskimmed milk powder hasstabilised .
Intervention stocks attheendof1979 were 227,000 tons .This improved
situation permitted theCommission tosuspend expensive special measures
forsale ofpowder forpigandpoultry feed inOctober 1979 .Itwasnot
necessary tore-introduce these measures in1980 owing tocontinued high
demand ontheworld market forpowder andsteady domestic consumtion
especially inthecalf feedingstuffs market .Production ofpowder is
still some 100,000 tons p.a.below the1978 record level owing tomuch
increased usofliquid skimmed milk incasein manufacture andfordirect
feeding topigs .
Atpresent ,itseems that stock levels inthedairy sector canbe
contained within reasonable levels during 1981 .Theworld market for
dairy produce should remain relatively buoyant although itsrate of
growth islikely toslow andcompetition toincrease .

106
6.Economic effectsofthemeasures taken
a)Imports
Inprinciple theimportlevyasforeseen underArticle14ofRetulation
(EEC)N°804/68represents thedifference betweenthethreshold price
andthelowestofferingpricefree-at-frontier Community .Whenprices
werefixedforthe1980/81marketing yearthethreshold priceswere
increased .Asinpreviousyears,thefixingoftheleviesdidnot
resultinimportsofmilkandmilkproductsliabletodisturbthe
Community-market .
Undertheexistingtradeagreements betweentheCommunity andvarious
non-member countries ,theminimumpricesforthetariffheadings were
adaptedtothenewCommunity pricelevel.TheGATTnegotiations
resultedinnewarrangements forCheddarcheeseunderaminimumprice
systemtobeimported fromNewZealand,Australia andCanada,starting
on1January1980.
b)Exports
Exportsofmostmilkproducts increased substantially asaresultofa
higherdemandontheworldmarketduring1979.Therefundswhichwere
grantedtomaketheseexportspossible werereducedinthemiddleofthe
yearforskimmedmilkpowderandlaterforbutter,butteroil andwhole
milkpowder.Thefavourable development bothonpricesanddemand
continued in1980.
c)Aidforskimmedmilk,skimmed-milk powderandcasein
Atthestartofthemilkyear1980/81theaidshavebeenfixedas
follows :
ECU/100kg
Liquidskimmedmilkforfodderpurposes 5.50(1.5.80)
Skimmedmilkpowderforfodderpurposes 54,-(1.5.80)
Skimmedmilkusedforthemanufacture ofcasein 5.-(1.8.80)
Aspecialaidamounting to7.50ECU/100kgisgrantedforfeedingpigs
andpoultry.
SinceSeptember 1977aspecialaidhasalsobeengrantedfortheuseof
skimmedmilkpowderforfeedinganimalsotherthancalves.-Theamount
ofthiswasfixedbyatendering procedure .

107
In1978 inallsectors where aidwasgranted ,thequantities have
continued toincrease .Theuseofskimmed-milk powder forfeeding
calves hasstabilised intheCommunity ,because aidisgranted only if
atleast 60%ofmilk powder isincorporated into thecompound feed .
d)Storage
Butter
In1979 ,331,000 t.ofbutter wasbought inbytheintervention
agencies .Over thesame period 239,000 t.ofbutter wassold in
connection with special measures and afurther 53,000 t.from public
storage were allocated forfood aid .Public stocks ofbutter were
271,000 t.attheendof1979 .
During 1979 private storage aidwasgranted for266,000 t.ofbutter .
Attheendof1979 ,101,000 t.were still instorage .In1979 ,
207,000 t.were stored inprivate warehouses ,ofwhich 100,000 t.was
still instorage attheendoftheyear .
Skimmed-milk powder
In1979 ,216,000 t.ofskimmed milk powder were bought inbythe
intervention agencies ,while 662,000 t.were removed from storage ,
537,000 t.inconnection with measures within theCommunity ,72,000 t.
forexport and afurther 53,000 t.forfood aid .Public stocks of
skimmed milk powder were 227,000 t.attheendof1979 .
Italian cheeses ,long-keeping cheeses
In1978 ,fewintervention measures forGrana andParmigiano were
applied .In1978 and1979 private storage aids forcertain long-keeping
cheeses ,which have been applied regularly since 1978 andwhich were
extended toProvolone from 31July 1978 ,were also fixed .
e)Food aid
Since 1970 theCommunity hassupplied alarge proportion ofitsfood aid
inthe form ofbutteroil andskimmed-milk powder .
Thequantities yearly supplied are45,000 tofbutteroil and150,000 t
ofskimmed-milk powder .

108
Thedeliveries aremade onthebasis ofsetadministrative procedures
from themoment recipients have stated that they areready totake the
goods over .
7.Uniformity ofprices
Monetary compensatory amounts
Nochanges have occurred inthecalculation methods forM.C.A. *ssince 4
June 1979 .Inessence ,inallagricultural sectors ,themonetary
compensatory amounts arecalculated forthebasic agricultural product ,
except inthecase ofmilk ,where itisbutter andskimmed-milk powder
which are used for reference .
8.Greek accession
Theimportance ofmilk production intheCommunity andinGreece canbe
seen from thefollowing table :
(1979 inmill ,t)
EUR 9 Greece
Cow'smilk 102,0 0,7
Sheep milk 1,4 0,6
Goat 'smilk 0,6 0,4
Total 104,0 1,7
InGreece ,somewhat less than 50%ofthemilk isdelivered todairies .
Some 48%oftotal milk production isused inthefresh milk sector ,
while cheese production ,mainly from sheep andgoats milk ,accounts for
40% .
There areannual imports ofapproximately 3000 tons ofbutter ,7000 tons
ofcheese ,65000 tons ofcondensed milk and10000 tons ofmilk powder ,
corresponding toamilk equivalent of0,3million tons .
Theprice forbutter andskimmed milk powder inGreece aretherefore
mainly based onimports ,because there isonly asmall production of
butter from cows milk (1000 tons annually )andnolocal production of
skimmed milk powder .
Thepresent milk price inGreece isaguaranteed minimum price forcows
milk with afatcontent ofatleast 3,5% .Theaverage price paid tothe
producers forcows milk isabout 5%higher than theguaranteed minimum
price .
Milk prices inGreece andintheCommunity
Greece EUR 9
drs/100kq ECU/100kq ECU/100kq
Ex-farm price 1.200 ,- 19.96 (Ì)
Transport cost 72 ,- 1,20
Price delivered todairies 1.272 ,- 21,16 21,06 (2)
Average producer price 1.336 ,- 22,22 22,26 (3)
(1)conversion rate ldrs =0,0166346 ECU
(2)support price level (3)target price
Itcanbestated ,that themilk price support level inGreece isat
present equal tothat intheCommunity .

109
14.BEEFANDVEAL(1)
1.Introduction
Beefandvealproduction (adultcattleandcalves)accounted for15.8%of
thevalueoffinalagricultural production in1979.
Thenumberoffarmsengagedinbeefandvealproduction isnowdownto
about2.5million ,orroughlytwothirdsofallfarmsintheCommunity .
Since1973,thenumberofcattlefarmershasdroppedatanaverageannual
rateof4.1%.Landusedforfodderproduction represents about60%ofthe
Community'sUAAand,sincecattlerearingisessentially dependent onthe
land,itisnotsurprising thatmostbeefandvealisproducedinthe
countries withlargeareasofpasture .
TheCommunity ,withnearly15%ofworldproduction ,isinthirdplaceamong
worldproducers ofbeefandveal,justbehindtheUSSRbutfarbehindthe
USA.
2.Production
a)Cattlenumbers
CattlenumbersintheCommunity haveremainedrelatively stable;the
Community marketinbeefandvealwasthusrelatively balancedin1979.
ThesurveyofcattlenumbersinDecember 1979revealed 78.0millionhead
ofcattleincluding 31.1millioncows,up0.2%anddown0.3%
respectively onthepreviousyear,whichindicates astabilization of
cattlenumbersat1-2%belowthe1973/74figure.
InDecember 1979thenumberofcalves(cattlelessthanoneyearold)
wasagainabout1%uponDecember 1978,butthenumberofbeefcowshad
droppedby1%,whereasin1978therehadbeenaslightincreasein
suckler herds.
Inthepast,theaverageincreaseincattlenumbershasbeenabout1%
peryear,whilethenumberofcowshasremainedrelatively unchanged .
(1)SeeTablesM.14.1toM.14.7

110
b)Production ofbeef andveal
In1979 alarge number ofboth cows andcalves went forslaughter .
Slaughterings
In1979 slaughterings ofadult cattle amounted toabout 21.2 million
head ,i.e. over 5%more than in1978 ;inthefirst half of1980 the
number ofadult cattle slaughtered wasupbyafurther 3-4% andthe
number ofcows slaughtered byabout 5.5% .
Onthebasis ofthetrend intheCommunity cattle herd andinview of
theslaughterings ofcows under thereorganization programme inthemilk
sector ,itisestimated that thenumber ofadult cattle marketed in1980
will beaslarge asin1979 .
Itisexpected that more steers (Ireland )andfewer young bulls will be
slaughtered andthat thenumber ofcows andheifers slaughtered will
remain high .
Slaughterings ofadult cattle have shown adifferent trend from
slaughterings ofcalves inrecent years :there hasbeen aslight
increase inthe former and afall inthe latter .
In1979 slaughterings ofcalves ,amounting to7.1million head ,also
showed anincrease (over 2%)onthe1978 figure ;during thefirst half
of1980 ,however ,thenumber ofcalves slaughtered fell slightly -by
about 1-2% -compared with thelevel recorded inthefirst half of1979 .
Slaughtering coefficient (i.e. therelationship between slaughterings and
cattle numbers )
With asubstantial increase in1979 ,theslaughtering coefficient
returned toalevel comparable with that recorded in1974 and1975 .
Average slaughter weight
In1979 average slaughter weights ,284.9 kgforadult cattle and
111.6 kgforcalves ,were over 3kgheavier than those recorded in1978 ,
i.e. increases of1.1and3.1% respectively .

111
Since feed prices were relatively low ,theaverage slaughter weight of
adult cattle continued torise in1979 and forcalves the rise was even
more marked .
Production ofbeef and veal
After reaching thetrough ofthecycle in1976 and1977 ,production of
beef andveal showed aslight recovery in1978 and afurther improvement
in1979 .Netproduction ofbeef andveal ,6.828 million tin1979 ,was
6.2% upon1978 .
In1979 beef production increased by6.3% intheCommunity ;during the
first half of1980 production continued torise ,atarate of4%.
Production ofveal rose by5.5% in1979 asaresult ofthemarked
increase inaverage slaughter weight .During thefirst half of1980
veal production wasthesame asinthefirst half of1979 .
Beef andveal production showed anaverage annual increase ofover 2%up
to1973 ,butsince then therate hasbeen much lower :about 1.6% .
Inrecent years cattle-rearing structures have greatly changed :
thenumber ofcattle farmers hasbeen falling attherate ofA.5%a
year ,mainly owing tothedisappearance ofsmall farms ,and
thenumber ofanimals perfarm hasbeen increasing .
Thus ,inDecember 1977 ,theaverage size ofcattle herd perfarm was
over 28head fortheCommunity ,about 12inItaly and72intheUnited
Kingdom .
Beef andveal producers fall into three main categories ,corresponding
tothethree categories ofanimals reared ,namely :
culled cows andyoung calves (milk production ),
grass-reared adult cattle (beef animals ),
young male cattle fattened oncereal-based feedingstuffs (maize
silage )inspecial production units .
Asaresult ofthegreat expansion intheorganized production ofyoung
bulls ,young male animals nowaccount forabout onethird ofalladult
cattle slaughtered .

112
3.Consumption
a)Consumption ofbeefandveal
Despitecontinuing economicdifficulties ,suchasthefallinthegrowth
rateasaresultoftheenergycrisisandthesignificant increase in
unemployment ,beefandvealconsumption againincreased substantially in
1979,asin1977and1978.
Assupplies werestillplentiful ,consumption ofbeefandvealincreased
byabout1.5%to6.8milliontonnes.Theconsumption trendforthe
comingyearsisexpectedtobelessfavourable ,onereasonbeingthat
thereisrelatively littleincome/demandelasticity intheCommunity at
themoment.
Bearinginmindthegeneraleconomic problems andtheunemployment
situation intheCommunity ,thereisunlikelytobeanincreaseinbeef
andvealconsumption in1980.
Thetrendofbeefandvealconsumption isaffected bythefollowing
factors :
population growth,whichinrecentyearshassloweddown
considerably ;
expansion oftheeconomy ,andthepatternofprivateexpenditure in
particular ;
theavailability ofmeatonthemarketandtheshort-term
fluctuations initsprice;
lastly,thesizeofthetradingmarginbetweenproducer andconsumer
prices.
a)Annualpercapitaconsumption ofbeefandvealincreased steadily
between1964and1971;in1972and1973,however,itstabilized inthe
Community ataround24.5kg,about1kglessthanthemaximumattained
in1971.Aftermarkedgrowthagainin1974,percapitaconsumption
levelledoutfrom1975to1977atjustover25kg.In1979,percapita
consumption roseagaintoover26kg(comparedwith25.8kgin1978):
23.1kgforbeefand3.0kgforveal.
Upto1973percapitaconsumption hadbeenincreasing byanaverageof
over1%peryear.Asaresultoftheeconomicdifficulties connected
withtheenergycrisis,however,theannualincreaseisnowwellbelow
1%.
Overthemediumtolongterm,percapitaconsumption ofbeefhas
increased ,whilepercapitaconsumption ofvealhasdeclined .

113
b)Thankstosubstantial population growth,overallconsumption ofbeef
andvealincreased considerably uptothebeginning ofthe1970s(by
morethan1.5%);butin1972and1973itfellslightly ,nodoubton
accountofthecyclicalfallinproduction .
In1974consumption increased markedly whenproduction ofbeefandveal
rosesharply ;thenin1975and1976consumption increased onlyslightly ;
butin1977,1978and1979itrosesteadilyto6.6,6.7and6.8
milliontrespectively .
Theannualriseintotalbeefandvealconsumption willprobably beless
infuturethaninthedecadepreceding 1973becauseofthedropinthe
birthrateandinthelevelofeconomicactivity .
b)Self-supply rate
InpastyearstheCommunity markethadhadabundantsuppliesofbeefand
veal,asaresultoffairlysteadyproduction ,theimportcommitments
enteredintoandintervention stocks.
Over100%in1974and1975,theself-supply rateforbeefandveal
droppedtolessthan100%forthenextthreeyears.In1979the
self-supply ratewasagain100%.Community consumption hasnotbeen
keepingpacewithsupplyinrecentyears,asisevidenced bythestocks
ofintervention meat.
Ifpublicstockshavenotyetbeenrundown,thisislargelybecause
sizeable importsandintervention buying-in havecontinued .The
quantities ofintervention meat(including meatqualifying forprivate
storageaid)stillinstorageinautumn1980amountedtosome0.24
milliont.,expressed intermsofunbonedmeat.Itislikely,
therefore ,thattherewillstillbeaconsiderable quantityinstorage
attheendof1980.
Trade
Intra-Community tradeinbeefandveal,afterexpanding rapidlyduringthe
firstfewyearsfollowing theaccession oftheUnitedKingdom,Irelandand
Denmark,haslevelledoutoverthepastthreeyearsataround1.3milliont.

114
Since 1974 imports ofbeef andveal from non-member countries have averaged
about 0.4 million t:
455 000 tin1974
289 000 tin1975
415 000 tin1976
379 000 tin1977
415 000 tin1978
412 000 tin1979
Itshould benoted that many ofthese imports enter theCommunity under
special conditions .
TheCommunity 'sexternal trade
•000 t
Trade Period 1973 1974 1975 1976 1977 1978 1979
Imports from non-member
countries
Beef and veal 990 445 289 415 379 415 412
ofwhich live animals 168 102 35 54 46 67 73
('000 head ) (846 ) (517 )(183 ) (265 ) (257 )(385) (451 )
Fresh orchilled meat 235 83 29 47 48 62 63
Frozen meat 548 171 77 154 141 122 141
Preserves 39(1 ) 99 148 160 144 164 135
Exports 86 200 237 209 152 168 338
ofwhich preserves 11(1 ) 22 20 38 41 38 70
Net trade balance 904 255 52 206 227 247 74
(1)EUR6only .
(»)

115
Exportsofbeefandveal,whichhadexceeded 200000tfrom1974to1976,
fellto152000tin1977andtotalled 168000tin1978.In1979they
weredoublethe1978figure.
ThebeefandvealdeficitintheCommunity'sexternaltrade,morethan
200000tinboth1977and1978,wasthusreducedtoabout74000tin1979.
Themainsuppliers ofbeefandvealtotheCommunity in1979were:
-LatinAmericancountries ,notablyArgentina andUruguay,supplying
around40%oftotalimportsandover60%ofimportsoffrozenmeat;
-EastEuropeancountries ,supplying aboutonefifthoftotalimportsand
twothirdsoftheliveanimalsimported ,HungaryandPolandaccounting
for56%;
-Australia andNewZealand ,supplying around 5%oftotalimports ;
-Yugoslavia ,supplying about15%ofimportsofliveanimalsandfreshand
chilledmeat;
-Austria,supplying around20%ofliveanimalandfreshmeatimports ;
-lastly,ACPcountries (Botswana ,Swaziland ,Kenya,Madagascar ),
supplying about7%oftotalimports.
Ourmaincustomers in1979were:
-Mediterranean Europeancountries (Spain,Yugoslavia ,Greece),taking
around30%ofourtotalexports ,
-EastEuropeancountries ,alsotakingaround30%ofourtotalexports,
-Africancountries ,particularly LibyaandtheMaghrebcountries ,for
over10%ofourtotalexports,especially liveanimals ,
-MiddleEastcountries ,takingunder5%ofourtotalexports.
5.Prices
a)Commonprices
Theguidepriceforadultcattleforthe1980/81marketing yearhasbeen
fixedat160.76ECU/100kgliveweight forthewholeCommunity .
Theguideprice,whichisapplicable toallcategories ofadultcattle
soldonrepresentative marketsintheCommunity ,isthepricewhichit
issoughttoachieveinanormalmarketing yearbymeansofCommunity
rules.

116
TheCouncil hasalso fixed theintervention price at144.68 ECU/100kg
liveweight or90%oftheguide price ,thereby derogating from Regulation
(EEC )No805/68forthis marketing year .
b)Market prices
Forthepast three years market prices foradult cattle ,expressed in
terms ofECUs ,have remained relatively stable ,about 130-131 ECU/100kg
liveweight .
In1979 ,theaverage Community market price foradult cattle rose by
only 0.2% ,which waswell below theinflation rate (1).Theaverage
prices foradult cattle settled ataround 82.25% oftheguide price ,
i.e. atalevel well below theCommunity intervention price .
Inmid-September 1980 ,Community market prices forallqualities of
adult cattle still stood ataround 81.5% oftheguide price .
TheCommunity market price forcalves fell by0.3% in1979 andduring
theearly months of1980 there wasafurther drop ofabout 3%.
Prices for adult cattle
ECU/100kgliveweight
Price Period 1978 /79 1979 /80 1980 /81 %change
Guide price 152.29 154.58 160.76 +4%
Intervention price 137.06 139.12 144.68 +4%
Market price
-inmoney terms 130.55 130.65 131.88° -0.4 %
-aspercentage of
guide price 86.1 84.8 83.1
Import price 76.47 82.55 84.50° +3.6 %
°April toSeptember 1980
(1)Innational currencies ,however ,this rise averaged about 6%.

117
c)Import prices
From 1975 ,thefree-at-frontier offer price ,although about 20%less
than in1973 ,varied little uptotheendof1978 .
However ,over thepast twoyears (1979-80 )theoffer price forlive
animals andfresh orchilled meat hasrisen byabout 10%andtheoffer
price forfrozen meat hasincreased even more (byabout 40%).
d)Consumer prices
Consumer prices forbeef andveal have risen fairly sharply over the
years ;in1979 they rose again byover 9%onaverage innational
currencies .This increase is,however ,less than therate ofinflation
inmost Member States .
e)Cost ofanimal feed
World prices forfeed grains rose in1979 butfrom arelatively low
level in1978 ;this ,coupled with relatively stable prices for
protein-rich products used inanimal feed ,meant that there wasonly a
slight rise inthecost ofcommercial feedingstuffs in1979 .
6.Outlook
a)After thesuccessive falls incattle numbers recorded upto1977 ,there
was arise incattle numbers intheCommunity asawhole between
December 1977 andDecember 1978 ,although thelevel wasstill 2%down on
the1973 /74figure .
In1980 ,Community production ofbeef andveal isexpected tobehigher
than the1979 figure ,i.e. some 6.9million t.
Itisestimated that 1981 will seenochange .
Consumption ofbeef andveal rose byabout 1.4% in1979 .
Since consumption ofbeef andveal depends notonly onthegeneral
economic andemployment situations andontherate ofpopulation growth
butalso onthesupply ofbeef andveal ascompared with other red
meats ,consumption ofbeef andveal isexpected toincrease slightly in
thecoming years .

118
Given theprobable production andconsumption trends andthestocks of
intervention meat tobesold inthecoming months ,theCommunity market
will continue tobewell supplied with beef andveal in1980 and1981 .
Theself-supply rate will bearound 100% inthecoming years ,asin1979 .
Theeconomic difficulties influencing demand formeat indicate that
there will benomarked rise inmarket prices foradult cattle in1981 .
b)Thedecline intheproduction ofbeef andveal which began in1978 is
going tocontinue notonly inthemajor non-member countries using
intensive rearing methods ,particularly theUSA ,butalso inexporting
countries which use extensive methods .
Astheimport reguirements ofthetraditional importing non-member
countries such astheUSAwill probably exceed availabilities andnow
that newmarkets have opened up (Middle East ),world prices canbe
expected toremain firm in1981 .
7.Economic aspects ofthemeasures taken under thecommon organization ofthe
market inbeef and veal
a)Market support measures
Inorder tosupport thebeef andveal market theCommunity hascontinued
toapply anumber ofmeasures :
market clearance measures :
.granting ofexport refunds with thepossibility ofadvance fixing
ofthese amounts ,
.direct buying-in bypublic intervention agencies :
23000 tin1973 (from July 1973 )
465 000 tin1974
414 000 tin1975
362 000 tin1976
260 000 tin1977
227 000 tin1978
330000 tin1979 ,representing 5.5% ofCommunity beef production .
Upto1December 1980 394000 thadbeen bought inbytheintervention
agencies ,i.e. about 30%more than during thecorresponding period of
1979 ;
granting ofprivate storage aid ,in1979 forforeguarters and
hindquarters ofadult cattle andin1980 forhindquarters only from
October onwards (with provision forboning and/orexport after a
minimum period ofstorage ).

119
-measures tostimulate consumption (sale ofintervention meat by
intervention agencies fordirect consumption ,allocation ofacertain
amount offrozen meat from intervention stocks toindustry for
processing intheCommunity ),reduced-price sales ofintervention meat
tosocial welfare organizations .
-aid measures
.possibility ofgranting variable premiums fortheslaughter ofcertain
beef cattle (clean cattle );only theUnited Kingdom hasavailed itself
ofthis possibility ;
.thecontinued grant ofacalving premium inItaly ;
.lastly ,tosupplement theincome ofproducers specializing inouality
meat ,thegrant ofapremium forkeeping suckler herds ,with effect from
the1980 /81marketing year ;
-adjustments totheintervention system
Following theCommission 'sproposals forfixing theguide price ona
deadweight basis forthestandard guality defined byreference toa
Community scale fortheclassification ofadult carcases ,theCouncil
decided tointroduce theCommunity scale with effect from the1981 /82
marketing year forcarcases ofadult cattle slaughtered inthe
Community ,inparticular forprice recording andintervention purposes .
b)International agreements
Inaddition tothenormal system ofimporting beef andveal ,the
Community hascommitted itself toimporting large guantities ofbeef and
veal annually onthebasis ofmultilateral andbilateral agreements .
Under GATT theCommunity opens annual tariff guotas fortheimport of:
38000head (18000onanautonomous basis )ofheifers andcows of
certain mountain breeds atthe rate of6%and 5000 head ofcertain
Alpine breeds ,other than animals intended forslaughter ,atthe
rate of4%;
50000 t(interms ofboned meat )offrozen beef andveal ,atthe
rate of20% .

120
Under thearrangement forso-called high-quality cuts theCommunity
opens anannual tariff quota forimports of21000 (interms ofboned
meat )offresh ,chilled andfrozen beef andveal ,attherate of20% ,as
follows :
10000 tfrom the United States ofAmerica
5000 tfrom Australia
5000 tfrom Argentina
1000 tfrom Uruguay
and atariff quota forimports of2250 t(interms ofboned meat )of
frozen buffalo meat from Australia ,also at20% .
Under theACP/EECLome Convention special arrangements were introduced
fortheimport of30000 t(interms ofboned meat )ofbeef andveal
from Botswana ,Swaziland ,Kenya andMadagascar .Theagreement provides
forexemption from customs duties andthereduction ofother import
charges .
Under theforward estimates for1980 theCommunity provided forthe
possibility ofimporting :
50000 t(interms ofunboned meat )offrozen beef and veal for
processing ;
230000head ofyoung male cattle forfattening .
Under the'newcommercial agreement with Yugoslavia 34800 toffresh or
chilled baby beef maybeimported annually from that country with a
reduced levy .
Under anagreement reached with Austria ,Sweden andSwitzerland ,
specific levies maybefixed onimports onlive cattle andfresh and
chilled beef and veal from those countries .
Given thelength oftime required forseatransport ,theCommunity has
also agreed totheadvance fixing ofthelevy forfresh andchilled meat
imported from Argentina andUruguay .
Itisalso possible tofixlevies inadvance onfrozen meat imported
from Romania ,Argentina ,Uruguay ,Australia andNewZealand .
Lastly ,there isprovision forimports with customs duties bound under
GATT ,i.e. with nolevy orquantitative limit ;this applies topure-bred
breeding animals (exemption from customs duty )andtopure beef
preserves (attherate of26%).

121
8.Budgetary expenditure
Expenditure bytheGuarantee SectionoftheEAGGFonbeefandvealamounted
to748.2million EUAin1979,isforecastat1178.0million EUAin1980
andestimated at1236.0million EUAin1981,i.e.7.2%,10.2%and9.6%
respectively oftotalGuarantee Sectionexpenditure .Thesumof1178.0
million EUAmaybebrokendowninto460.0million EUAforrefundsand718.0
million EUAforintervention expenditure ,including 514.0million EUAfor
publicandprivatestorageand88.0million EUAforpremiums ,mainlythe
calvingpremiumandthesucklerherdpremium.

122
15.PIGMEflT (1)
1.Introduction
InDecember 1979 there were intheCommunity altogether 75.0 million pigs
onabout 2.1 million farms .
Farms with more than 200pigs numbered about 87000 ,or4%ofthetotal (3%
in1975 ).
There arestill considerable structural differences inpiaproduction from
country tocountry :225pigs perfarm intheUnited Kingdom ,9inItaly ,
with aCommunity average ofabout 36.Theaverage size ofthefarms
continues toincrease intheCommunity Member States buttherange between
theextremes issteadily widening (in1977 ,196pigs perfarm intheUnited
Kingdom and8inItaly ,Community average 26).
Specialization inpigfarming isstill progressing :between 1977 and1979
thenumber offarms with over 200pigs increased by11.35% while farms with
less than 50pigs arebecoming fewer inallCommunity countries (2.9
million in1979 compared with 2.2million in1977 ),although they still
represent almost 87%ofallpig-farms .
Thedecline innumbers ofthesmallest farms (1-2pigs )isslower than that
oftheaverage-sized farms with aslightly larger number ofpigs (3to50
pigs ),especially inFrance andItaly .Given theuncertain economic
situation inrecent years ,many families still fatten apigtomake sure of
thesupply ofareasonable guantity ofcheap meat fortheir ownuse .
Thesize offarms with 10sows andover isstill increasing .Thenumber of
such farms decreased by3.5% between 1977 and1979 butthenumber ofsows
perfarm increased .
Thenumber ofsmall farms (1to9sows )decreased by20%between 1977 and
1979 andthenumber ofsows kept onthem also dropped by20%over thesame
period .
Interms ofgeographical distribution ,pigproduction isstill concentrated
intheareas bordering theNorth SeaandtheEnglish Channel andin
Northern Italy .
In1979 ,pigrneat accounted foralmost 12.1% byvalue ofgross final
agricultural production and42.8% ofthetotal tonnage ofmeat produced in
theCommunity .
TheCommunity isstill thesecond largest pigproducer intheworld after
China .
(1)SeeTables M.15.1 toM.15.7

123
2.Production
On1December 1979 ,there were inthewhole Community 75.4 million pigs ,
including 8.7million sows .
Compared with December 1978 ,thetotal number ofpigs hadrisen by0.5% ,
andsows by0.2% .Theresults ofthesurveys ofpignumbers at1August
1980 showed that potential supplies hadceased torise ;compared with
August 1978 ,thetotal number ofpigs was0.2% greater ,butthat ofsows
0.1% smaller .Thesurveys continue toshow awidening difference in
potential between countries .In1979 ,theCommunity produced 9.8million
tonnes ofpigmeat ,5.0% more than in1978 .Theincrease inproduction has
continued in1980 :during thefirst 6months pigmeat produced by
slaughterhouses intheCommunity wasabout %uponthesame period in
1979 .Thepersistence ofabundant supplies ofpigs ledtoprice support
measures forpigcarcases atlevels which required further intervention
from thespring of1980 .
Although theincrease intotal pignumbers ,andinbreeding sows ,in
particular lost alittle momentum ,gross home production increased atthe
same rate astheprevious year .This wasduemainly toafurther increase
intheproductivity ofbreeding herds ,thanks toimproved feeding
techniques andtheuseofstock ofbetter genetic quality .Insome
countries ,pigfarmers areadopting amore professional approach ,and
processors arealso better organized ,andthese factors ,too ,arereflected
inproductivity .
3.Consumption
In1979 ,pigmeat consumption increased intheCommunity asawhole bysome
3.0% compared with 1978 (9.29 million tin1978 and9.50 million tin
1979 ).Percapita consumption increased from 35.6 to37.0 kg.
Internal consumption
1000 tonneskg/inhabitant Self-supply rate
EUR 9 9671 37.1 100.9
BLEU Al8 41.0 161.7
Denmark 245 47.9 368.2
Germany 3889 56.9 88.5
France 2045 38.2 84.7
Ireland 108 32.1 143.5
Italy 1296 22.8 74.8
Netherlands 574 40.9 225.1
United Kingdom 1496 26.7 62.8

124
Pigmeat consumption continued toincrease inallmember countries .
Germany ,with apercapita consumption ofalmost 57kg,remains byfarthe
largest consumer (domestic consumption inGermany accounts for36.8% ofthe
Community total ).
In1979 thebalance between gross home production andconsumption
corresponded toaself-supply rate of101% .
Denmark still hasthehighest self-supply rate intheCommunity (349.8% )
butthis hasbeen falling steadily since 1974 (427% ).Germany (87.8% )is
maintaining itsrate .Thefigure hasdropped inFrance (83.6% ),theUnited
Kingdom (61.4% )andBelgium (170.9% ).Ireland ,even with afall asagainst
1977 ,ismaintaining itsaverage since 1974 .Therate continues to
increase intheNetherlands (224.4% ),while inItaly ,with aslight
improvement ,thelevel hasremained much thesame forseveral years .
4.Trade
Theexport-import balance inthevarious Member States isasfollows (all
intra-Community andextra-Community trade ):
Percentage change
Netimports Netexports 1979 /78
(t) (t)
•Netimports Netexports
BLEU 270 800 -0.5
Denmark 636 000 +14.1
Germany 295 500 -5.2
France 297 300 -7.0
Ireland 48300 +16.1
Italy 325 100 +21.9
Netherlands 758 600 +11.1
United Kingdom 747 400 -14.4
Thepositive trends inintra-Community trade ,which hassteadily increased
over theyears ,show that theintegration oftheCommunity pigmeat market
iscontinuing satisfactorily .

125
In1979 ,thequantity ofpigmeat products traded between themember
countries amounted to2.12 million t,anincrease of7.7% over 1978 (1.97
million t).Between 1977 and1978 ,intra-Community trade hadincreased by
11.4%.
Intrade with non-member countries in1979 ,imports were 224600 tand
exports 243200 t(1).
TheCommunity 'strade balance with non-member countries shows asurplus ,
with netexports ofabout 18600 t,replacing thedeficit which hadbeen
tending tocontract forseveral years ,andmore rapidly since 1976 .The
Community 'simports in1979 were down by23.1% against 1978 ,while exports
increased by27.3% .
Incomplete returns for1980 show afall inexports andincrease inimports
asagainst 1979 ,andthesurplus canbeexpected todisappear .
Thebreakdown bytype ofproduct imported orexported in1979 isgiven in
thefollowing table :
Imports from Exports to
non-member countries non-member countries
live pigs 13.7% 0.1%
fresh and salted meat 25.0% 42.8%
lard 31.8% 2.1%
offal 21.7% 7.5%
prepared andpreserved meat 7.8% 47.5%
Total-live pigs 13.7%
-fresh and salted meat 25.0%
-lard 31.8%
-offal 21.7%
-prepared andpreserved meat 7.8%
This breakdown shows that fresh meat isaccounting foralarger percentaoe
ofthetotal than inprevious years .Itisvery probable that this isa
cyclical development ,duetothemarket situation ,which hasreauired a
more active export refund policy .TheCommunity isstill ,however ,anet
exporter ofproducts processed from pigmeat .
With slight variations ,imports break down inmuch thesame wayasthe
previous year .
(1)DGVI;figures include lard andoffal .

126
In1979,theCommunity'sexternaltradewasmainlywithitstraditional
tradingpartners .
However,asinthepast,certainEastEuropeancountries (theGerman
Democratic Republic ,Hungary ,PolandandRomania )werethemainsuppliers
oflivepigsandfreshmeat.
Theothermainsuppliercountries were:
UnitedStatesofAmerica (mainlyoffal)
China(bonedmeat)
Sweden(mainlyfreshmeatandoffal)
Canada(offalandpigfat)
Spain(lard)
TheEECcontinued toexportto:
UnitedStates(preserves )
Japan(meatandpreserves )
Sweden (cutsandoffal)
Certainnon-member countries inEurope.
5.Prices
Basicprice
Management oftheCommunity pigmeatmarketdependsonthebasicprice,
whichisfixedannually forthemarketing yearfrom1November to31
OctoberandappliestoClassIIcarcases ontheCommunity scale.
Thebasicpricerepresents anequilibrium atwhichpigmeatproduction can
developandprovideafairreturntoproducers whilethebalancebetween
supplyanddemandismaintained .
Intervention provided forintheCommunity rulescanbeactivated when
pricesontherepresentative marketsfallbelow103%ofthebasicprice.
Thelevelofthebasicpricefortheperiodfrom1November 1979to
31October1980was150.446 ECU/100kg.
Giventhetrendinproduction costsasawholeandtheeconomicsituation ,
thenewbasicpriceapplicable from1November 1980to31October1981was
fixedat158.721 ECU/100kgofpigcarcases (+5.5%).

127
Sluice-gate price
Thesluice-gate prices ,which arefixed every guarter ,areconsidered tobe
thenormal world market offer prices attheCommunity frontier ,atwhich
products from non-member countries mayenter ,complying with theprices
aimed atbyCommunity market regulations .These prices vary with theprice
offeed grain ontheworld market .In1979 /80thesluice-gate prices were
slightly higher than during thepreceding period .
b)Market prices
Between thesummer of1978 andAugust 1979 prices forpigcarcases onthe
representative markets showed little change .ByJanuary 1979 ,this had
already necessitated thereintroduction ofintervention measures ,which had
tobemaintained until September (aidtoprivate storage ),when the
seasonal upswing indemand ledtoanincrease inpigcarcase prices which
continued until December .InJanuary-February 1980 prices were still at
much thesame level asinDecember .However ,inMarch 1980 ,they began to
fall again andfurther aidforprivate storage became necessary inMay .
There wasnorecovery inprices before theendofAugust .InSeptember
1980 ,theseasonal pick-up indemand ledtoaslight increase inmarket
prices .
Thesituation in1980 confirms that thetraditional price cycle hasbeen
broken ,with asteady increase inthesupply ofpigs despite market prices
persistently well below thebasic price .
Thereasons forthis situation aremanifold ,andinclude notonly better
technigues andimproved breeding butalso thefact that more andmore
non-cereal products arebeing fedtopigs .There isalso thefact that
market prices areatarelatively lowlevel .
(Table "Pigcarcases prices "onnext page )

PiqCarcases prices
ECU/100kgpigcarcase
1Nov .73 7Oct .74 1Aug .75 15Mar .76 1Nov .77 1Nov .78 1Nov .79 1Nov .80
6Oct .74 31Jul .75 14Mar .76 31Oct .77 31Oct .78 31Oct .79 31Oct .80 31Oct .81
Basic price
Absolute value 103.97 118.05 128.15 138.40 149.32 148.22 150.44 158.72
Percentage
change 100.00 113.50 123.30 133.10 139.80 142.60 144.70 152.66
Market price
Absolute value 118.60 121.87 144.23 140.99 135.62 129.00 (133.94 )
Percentage
change 100.00 102.70 121.6 118.40 114.40 108.76 (112.93 )
Asapercentage
ofbasic price 114.20 103.20 112.50 101.90 93.30 87.03 89.03
Sluice-gate
price
Absolute value 102.27 117.28 104.21 103.95 83.78 87.04 110.11
Percentage
change 100.00 114.70 101.90 101.60 81.92 85.00 107.67

129
c)Worldprices
Ofthe"marketeconomy"non-member countries ,theUSAisthebiggest
producer .
U.S.pigpricesfellfromthefirstquarterof1979onwards,dueto
increasing supply,reachingtheirlowestpointinthesoringof1980.
Despiteasubsequent fairlysharprecovery ,pricesarestillwellbelow
thoseoftheprevious year.ThetrendinCanadahasbeensimilar .
Theothercountries producing pigmeatonalargescalearetheEast
Europeancountries withState-run economies .
d)Consumerprices
Theconsumption offreshpigmeatisonlyabouthalfofalluses,andthe
cutsandpresentations varyfromonecountrytoanother .Comparison of
pricesandqualities atEuropeanlevelistherefore verydifficult .
Asharpriseinpricesattheproduction stagealwaysforcesupretail
prices.However ,areduction inpricesattheproduction stagedoesnot
necessarily bringaboutareduction inretailprices.
Whenpigcarcasepricesontherepresentative marketsfellandremained
lowin1979and1980,consumerpricesforpigmeatwerenotaffected and
remainedgenerally stable.Indeed,insomecountries ,theyshoweda
modestincrease .
6.Production costs
Feedingstuffs
Feedgrainpricesontheworldmarketroseinthespringof1979andfell
againinthesummer-autumn of1980.
FeedpricesontheCommunity market,whichin1979haddeveloped muchason
theworldmarket,nonethelessremainedsteadyin1980.Theratioofpig
carcasepricestofeedbarleypricesrosealittleintheautumnandwinter
of1979/80butfellagaininthespringof1980.

130
-Othercosts
Production costsotherthanfeedmakeup25to35%ofthetotal
production costsofpigcarcases .
Theyaregreatlyinfluenced bythegenerallevelofinflation ,whichwas
highin1979andhigherstillin1980.
Afurtherincrease inproduction costsisduetotheconsiderable rise
inbankinterestrates,whichwasespecially seriousforyoungfarmers
whohadborrowed inordertosetthemselves up.
7.Outlook
Theamplesupplyofpigsin1979keptmarketpricesbelowthebasicprice
allyear.However ,onthefarmsthebreeding herdcontinues toincrease ,
astherefore doesproduction ofpigmeat.
Thereshouldbeafurtherincrease inoutputin1981,butpossiblyata
slightly lowerratethanin1980.
8.Economic aspectsofthemeasures takenunderthecommonorganization ofthe
marketinpigmeat
a)Leviesandrefunds
Thesystemfortradewithnon-Community countries includes ,onthe
importside,leviesand,whereappropriate ,additional amounts ,and,on
theexportside,refundspayabletoexportersifnecessary .
TheleviesfixedvariedwithchangesinworldandCommunity feedgrain
prices;in1980therehasbeenaslightincreaseinthesluice-gate
priceandthelevieshavedeclined asagainst1979.
Additional amountshadtobereintroduced forcertainproducts inApril
1980,forthefirsttimesincemid-October 1979.
Theeconomicsituation enabledexportrefundstobereduced ,while
keepingthemarketsofnon-member countries accessible toCommunity
produce .
Subseguently amoderateincreaseinrefundswasnecessary intheautumn
of1980,moreespecially forfreshmeat.Therefundoncannedhamfor
theUnitedStatesmarketwasincreased twice(inNovember andSeptember
1980)beforealevelwasfoundwhichmadeCommunity exportsviable,
aftertheUnitedStatesauthorities foundthattheCommunity'srefund
policyhadnotdisturbed theAmerican market.
(9)

131
b)Intervention
Thesomewhatbetterpricesforpigcarcasesattheendof1979lasted
onlyuntilFebruary 1980.Sincethenpriceshavefallen.InMay1980
supportmeasures intheformofaidtoprivatestoragehadtobe
introduced .Thefirstaidmeasureapplieduntil21Juneandconcerned
about46000tonnes.On1Augustthesamemeasures hadtobe
reintroduced until3October .Thequantities involved wereaboutAO000
tonnes.Theeffectwasacertainstabilization ofmarketprices,and
evenaslightimprovement ,intheautumnof1980.
9.Budgetary expenditure
EAGGFGuarantee Sectionexpenditure in1980onpigmeatisoftheorderof
112million ECU,including 88milliononexportrefundsand24millionof
privatestorageaid(estimates subjecttocorrection ).
Totalexpenditure in1980isatleast7%abovetotalexpenditure in1979.

-1ΪΖ -
16.EGGS (1)
1.Introduction
Therelative value ofeggproduction intheCommunity maybegauged from
recent estimates :
1978 1979
Eggs /livestock products 6%
Eggs /total agricultural production 3.5% 3.3%
Theprocess ofrationalization andconcentration ofproduction inasmaller
number oflarger undertakings continues .In1975 more than half of
Community output came from 0.2% oftheundertakings .Avariety oftypes of
contractual arrangement andtheintegrated operation ofundertakings are
also characteristic features ofthesector .However ,many eggs arestill
sold bytheproducer directly totheconsumer ,even incountries where the
wholesale andretail trades have undergone thegreatest degree of
rationalization (Germany ,United Kingdom ).
Asregards operators ,contacts with therepresentative associations inthe
Community have been intensified with aview tosetting upajoint-trade
body .
2.Production ,consumption andtrade
In1979 Community production ofeggs (3.96 million tonnes )wasthesame as
intheprevious year ,with thenumber oflaying hens being slightly down on
1978 .Onthebasis ofdata indicating that chick placings fell by5%
during 1979 ,itistobeexpected that Community production will notchange
in1980 ,with theexception oftheNetherlands andFrance ,where output is
expected toincrease .These aretheonly twoMember States where there has
been anappreciable expansion ofeggproduction since thecrisis year of
1970 .
Overall consumption ,already down in1979 (3.68 million tonnes ),will
probably notincrease in1980 ,inview ofprices .
Intra-Community trade increased by12%in1979 ,with Germany still being
thebiggest buyer followed byFrance .TheNetherlands andBelgium were the
main suppliers .In1980 imports ofeggs bytheUnited Kingdom ,which had
been anetexporter forseveral years ,increased .
Trade with non-Community countries amounted tomore than 94000tonnes ,
with exports at66000tonnes andimports at28000tonnes .Although
exports account foronly about 2%ofCommunity output ,they have major
repercussions ontheinternal market ,because ofthelowelasticity of
Community demand .Supported byhigh refunds ,exports increased sharply in
1979 andremained high in1980 .Imports ontheother hand fell during
1979 ,especially consignments from certain Eastern European countries which
hadtocomply with thesluice-gate price .
Il)SeeTables M.16.1 .-M.16.6.

133
3.Prices
After themarket crisis in1978 andthefirst half of1979 ,thefall in
production andincreased exports inthesecond half of1979 ledtoa
satisfactory level ofprices uptomid-1980 .Theseasonal fall inthe
summer of1980 wasnotasserious asinthetwoprevious years ,butthe
market isnone the less still somewhat unstable .
Consumer prices have notbeen running exactly parallel with producer prices
andthere hasbeen atendency forprofit margins towiden ,especially when
producer prices have risen .
4.Outlook
Eggproduction isfollowing acycle which "peaked out"inlate 1978 /early
1979 .Thefall inprices during this period ledtoareduction inthe
flock andinchick placings in1979 inmost Member States .
However ,theimproved market situation inlate 1979 and1980 does notseem
likely tolast long inview ofthefurther increase since January 1980 of
chick placings forlaying andthelong-term expansion intheNetherlands
andFrance .Only intheUnited Kingdom isthedownward trend inoutput
continuing .FortheCommunity asawhole ,supplies in1981 will therefore
again beontheincrease ,anditisthus tobefeared that thesituation on
theCommunity eggmarket will again bedetermined toalarge extent bythe
level ofexports outside theCommunity .
5.Measures taken under thecommon organization ofthemarket
a)Sluice-gate prices were increased on1November 1979 by5%,inline with
thetrend infeed grain prices ontheworld market .At1August 1980
they were practically unchanged ,while levies hadrisen 10%asaresult
ofthenewgrain prices fixed intheCommunity .
b)Refunds oneggs inshell were reduced from 24ECU/100kg(level seton
1May1979 )to21.50 ECU/100kgon15January 1980 and20ECU/100kgon
14April 1980 ,while refunds foreggproducts were reduced only on
15January 1980 .From that date ,refunds were introduced onhatching
eggs forallnon-Community countries except theUnited States .
c)Under themeasures forbetter supervision ofexports ofagricultural
products ,theCommission adopted on24January 1980 aregulation
provided fortheMember States toprovide monthly information onthe
advance fixing ofrefunds intheeggsector .
6.Budgetary expenditure
Expenditure bytheGuarantee Section oftheEAGGF oneggs amounted to15.9
million EUAin1979 ;theprovisional figure for1980 is22million EUAand
theestimate for1981 is24.0 million EUA .Allthis expenditure ison
refunds .

134
Theaccession ofGreece does notsubstantially alter thesituation onthe
Community market ineggs ,except that itopens upthepossibility for
expansion oftrade with that country incertain products inthesector .
(10)

135
17.POULTRYMEAT (1)
Introduction
In1979therelativevalueofpoultrymeat production wasstillsubstantial
andfairlysimilartothatofeggs,thatis,together about13.5%of
livestock production and8%oftotalagricultural production .Thefigures
relatingtopoultrymeat aloneare:
1978 1979
Poultrymeat /livestock products 7.0% 7%
Poultrymeat /totalagricultural production 4.1% 4.1%
Poultrymeat production isstillcharacterized byconcentration andby
variousformsofvertical andhorizontal integration .Thedegreeof
concentration isgreaterinthepoultrymeat sectorthanintheeggsector,
sinceinthenortherncountries oftheEECmorethan90%ofproduction is
accounted forbyholdings withmorethan10000birds.
Production ,consumption andtrade
In1979totalCommunity poultrymeat production (3740000t)increased by
4.2%(+7.6%inFranceand-1.9%inBelgium,theonlycountrywhere
production fell).Therateofincreaseasregardschickens (3%),
representing abouttwo-thirds oftotalproduction ,waslessmarkedthanfor
turkeys(+11%)andducks(+7%).In1980theincreasecontinued atthe
samerateforchickens (withtheexception ofDenmark )butwaslessfor
turkeysinmostMemberStates,exceptforFrance,ItalyandIreland).
Withconsumption havingincreased byonly1.9%in1979,theCommunity's
self-supply rateroseto105.4%.
Intra-Community tradeceasedtoincreasein1979owingtoincreased
production inGermanyandrisingdemandinnon-member countries .
Exportstonon-member countries in1979reachedatotalof263000t
(+38%),madeupmainlyofchickensfortheMiddleEastandtheUSSR.In
1980thisfigurewillprobably behigherinviewofthedemandincertain
non-member countries .Exportsofchickensrepresent 10%ofCommunity
production ,andthetrendisupward.
Importsrepresent only1.8%ofconsumption .Theyincludegeeseandducks
(31000t)fromEasternEuropeancountries ,whichforthemostpart
benefited fromthenon-application ofadditional amountsfollowing the
guarantee givenbythosecountries toobservethesluice-gate price.In
1979importsofturkeymeatfromtheUSAwere2000tupon1978.TheGATT
agreements provideforconsultations withtheUSAifexportsexceedthe
averagefor1977/78.

136
3.Prices
After thedrop inthemarket prices forchickens in1978 ,there was a
general rise in1979 (with theexception ofFrance )andatthebeginning of
1980 prices even gradually rose above thehigh level of1977 .
This trend canbeexplained bythefact that European slaughterhouses do
notalways have sufficient stocks available tomeet export demand .
Consumer prices have notkept pace with theincrease inmarket prices in
Benelux andGermany ,which reflects atemporary saturation ofthose
markets ,particularly asregards frozen chickens .
4.Outlook
Itisdifficult toforecast poultrymeat production accurately onthebasis
ofparent stock .Theproblem isthat only avery short production period
isnecessary toincrease parent stock -amatter ofsixtotwelve months -
andthat thenumber ofchicks used canvary greatly inrelation tothe
potential available .
Poultrymeat production isvariable anddepends onmany factors including
recent prices ,feedingstuff costs ,export possibilities andthegeneral
trend indemand .
Since parent stock wasreduced attheendof1978 andin1979 following the
fall inmarket prices in1978 ,placings oflaying hens ofmeat breeds rose
again considerably (about 7%)in1980 ,following the1979 /80rise in
prices .There will therefore bearapid expansion ofCommunity production
potential in1981 andthemarket situation will bemore dependent onexport
outlets tonon-member countries .
Asregards turkeys ,therather unsatisfactory market prices in1979 have
already ledtoareduction inthefirst sixmonths of1980 intheplacings
ofturkey poults insome Member States .Since world market demand is
limited ,theCommunity market situation will probably remain unstable and
depend toalarge extent onthetrend inincomes andontheprices of
competing products intheCommunity .Afavourable development has ,
however ,been noted intheturkey cuts andpreparations sector which is
facilitating thedisposal ofturkey production .
5.Measures taken under thecommon organization ofthemarket
a)Following thetrend infeed-grain prices ontheworld market ,
sluice-gate prices were slightly increased on1November 1979 (+2%)and
then ,on1May1980 reduced again forchickens (-1%).When thenew
cereals prices were fixed on1August 1980 ,thesluice-gate prices
remained practically unchanged butthelevies were increased onthat
date .
b)On1January 1980 thecoefficients used forcalculating thesluice-gate
prices andlevies forcertain cuts ofturkeys andforproducts derived
from turkeys were altered .

137
c)ThemeasurestakenbytheCommission inJanuary1980concerning
Community exportsofcertainagricultural productsincluded ,witheffect
from25January1980,asurveillance systemfortheadvance-fixing of
exportrefundsforeggsandpoultrymeat ,thusenablingthevolumeand
destination ofchickenexportstobemonitored .
d)Refundsforchickens werereducedfrom25ECU/100kgon15August1979
to22ECUon21January1980andto19ECUon14April1980,while
refundsforcertaincutsofpoultryremained unchanged .
Witheffectfrom21January1980thelistofproductsforwhichrefunds
aregrantedhasbeenextendedtoincludeducks,turkeys,turkeyDroducts
andday-oldchicks.Therefundsaretobegrantedonexportsofthese
productstoallnon-member countries withtheexception oftheUnited
States.
e)Inthelightoffurtherresearchintotheproblem,theCommission
adoptedtwoRegulations inOctober1980concerning technical adjustments
toanddetailedrulesfortheapplication oftheCouncilRegulation
layingdowncommonstandards concerning thewatercontentoffrozenand
deep-frozen poultrymeat .UnderthatRegulation ,poultrymeat withan
extraneous watercontentexceeding theinevitable technical minimum may
notbemarketed assuchwithintheCommunity unlessthisisspecified on
thelabelling .Theinspection ruleswillapplywitheffectfrom1April
1981.
6.Budgetary expenditure
Inparallel withthetrendinexportsandtheratesofrefunds ,expenditure
bytheGuarantee SectionoftheEAGGFonpoultrymeat doubledfrom31.2
million EUAin1978to63.5million EUAin1979;theprovisional figurefor
1980is72andtheestimate for1981is80million EUA.
Theaccession ofGreecewillhaveverylittleeffectontheCommunity's
degreeofself-supply forpoultrymeat .However,aboosttointra-Community
tradewithGreececanbeexpectedinthecaseofsomeproductsinthe
sector.

138
18.SILKWORMS (1)
Silkworm rearing ,which ispractised inItaly andonasmall scale for
research purposes inFrance ,represents only atiny fraction ofCommunity
agricultural activity andofworld sericulture (54800tofrawsilk in1979
according totheFAO).
Silkworm rearing ispractised inGreece aswell ,mainly tomeet the
requirements ofthedomestic market .
Relatively high prices forrawsilk ontheworld market have had astimulating
effect onrawsilk production .Approximately 10500boxes ofseed were used
in1979 ,butexceptionally badweather (severe frosts )meant that seed from
only 5500boxes wassuccessfully cultivated ,andhence only 147 tofcocoons ,
were produced .In1978 ,8700boxes produced 203 tofcocoons .
For1980 /81theamount oftheaidhasbeen fixed at61.21 ECUperbox ,
compared with 67.50 ECUfor1979 /80(+5.5% ).
Expenditure bytheEAGGF Guarantee Section onthesilkworm sector amounted to
0.5million EUAin1979 ,isforecast at1,0million EUAin1980 andestimated
at1.2million EUA in1981 .
(1)SeeTable M.18.1

139
19.SHEEPMEAT
1.Production
In1979 theproduction ofsheepmeat andgoatmeat (gross domestic production
529000tonnes )continued toincrease (+2.1% incomparison with 1978 )
following increased slaughtering (+3.4% head ),whereas theaverage weight
perhead fell slightly (17.7 kg/head in1979 against 18.0 in1978 ).
2.Sheep numbers
Thenumber ofsheep intheCommunity continued torise (asithasbeen
doing almost uninterruptedly since 1971 )andstood at46.8 million in
December 1979 .However ,in1979 theincrease wasonly 0.6% (compared with
3.9% in1978 ).
3.Consumption
Total consumption (809000tonnes in1979 (1))followed thesame rhythm as
production (+2.1% ).
4.Prices
Prices remained stable (except inIreland andItaly where they rose by
approximately 10%).
Prices ontheUnited Kingdom market in1979 were 73%ofFrench prices
(against 55%in1977 and72%in1978 ).
5.Trade
-in1979 theCommunity imported 273650tonnes (2)ofsheepmeat and
goatmeat from non-Community countries ,asagainst 275440tonnes in1978 .
Intra-Community trade decreased in1979 (94233tonnes ,whereas it
amounted to102500tonnes in1978 ).Itcontinued tobedominated bya
flow ofroughtly 45000tonnes towards France .
-TheCommunity exported approximately 10000tonnes ofsheepmeat to
non-Member countries .
6.Self-supply rate
TheCommunity self-supply rate remained steady in1979 ataround 65% (1977 :
63.8% -1978 :65.3% -1979 :65.3% ).
7.Non-member countries
Sheep numbers continued toincrease inexporting non-member countries in
1979 (NewZealand :+1%:Australia :+2.7% ).
(1)Including 4000tonnes forindustrial purposes .
(2)Expressed asproduct weight ;thefigure forslaughter weight would be
approximately 285000tonnes .

140
8.Outlook for1980
In1980 there was avery steep increase inproduction (+12.1% )and a
considerable increase inconsumption (+5.7% )intheCommunity .
Production increased inallMember States ,butparticularly intheUnited
Kingdom (+12.9% )andFrance (+11.6% ).
Consumption increased intheUnited Kingdom (+4%),under theinfluence of
asharply falling market price (1).
In1980 theaverage market price fortheCommunity maybeestimated at
287.4 ECU/100kgor10%lower than theaverage price for1979 .
TheCommunity 'srate ofself-supply for1980 will beclose to70% .
9.Forecast for 1981
In1981 Community production should increase only slightly (+1%
approximately ).Afurther increase inconsumption (+2%)isexpected ,
partly asaresult ofthepossibilities open tonon-member countries under
thevoluntary-restraint agreements concluded inrespect ofquantities
totalling some 320000 tfortheCommunity ofTen (expressed interms of
carcase weight equivalent ).
10.Consequences oftheaccession ofGreece
Theaccession ofGreece islikely toincrease theCommunity 'ssheepmeat
deficit byabout 12000 t.Theestimated figures fortheTenin1981 are
asfollows :
Production 678 000 t
Consumption 958000 t
Difference 280 000 t
Consequently ,thedegree ofself-supply for1981 isputat71%fortheTen
(69% fortheNine ).
(1)216ECU/100kg,compared with 267ECU/100kgin1979 (-19%).

TABLE N°1
EEC -SHEEPMEAT PRODUCTION
(Gross domestic production )
*000 tslaughter weight
Member State 1973 (1):1974 (1):1975 (1):1976 (1):1977 (1):1978 (1):1979 (1):1980 (2):1981 (3)
Germany
France
Italy
Netherlands
BLEU
United Kingdom
Ireland
Denmark
EEC total14
128
32
10
4
235
42
1
46616
133
32
16
3
254
44
1
49918
131
32
18
4
263
48
1
51518
147
34
17
3
250
38
1
50819
145
36
17
3
228
37 .
0.5
485.518.0
147
51.5
18
4 .
237
41
0.5
517.018
159.5
52
20.5
3
241
34
0.5
52918.6
178.0
60.0
22.0
3.8
272.0
38.0
0.7
593.120.0
180.0
65.0
23.0
3.8
270.0
34.4
0.7
596.9
(1)Source SOEC (including goatmeat )
(2)Estimates (from national sources )
(3)Forecasts (" " " )
(4)ISTAT adopted anewmethod ofcalculation for1978 and1979 (andfollowing years )

TABLE N°2
CENSUS OFSHEEP INTHEEEC
December census
•
• 1968 1969 1970 1971 1972
:EEC
•41620 41501 40881 40923 41775
•
:Germany 830 841 843 850 908
:France 9507 10037 10239 10115 10191
:Italy 8206 8138 7948 7846 7770
:Netherlands 360 360 375 375 388
:(1)
:Belgium 84 85 66 66 69
:Luxembourg 4 5 5 5 5
:United
:Kingdom (1) 19667 10157 18499 18749 19447
:Ireland 2852 2788 2836 2862 2835
:Denmark (2) 110 90 70 55 52Total numbers ,*000head
:1974 1975 1976 1977 1978 1979 1980 :
:43137 42865 43720 44803 46520 46800 47500 :
:1040 1087 1091 1135 1136 1145
:10569 10803 11046 11255 11642 11799
:7995 8152 8445 8694 8973 9110
: 490 495 510 523 548 585
: 81 83 82 84 91 84
: 5 5 5 5 5 5
:20187 19536 19900 20524 21651 21658
:2711 2653 2582 2526 2418 2360
: 59 61 59 57 54 571973
42548
1016
10324
7809
430
74
5
19989
2845
56
(1)Maycensus
(2)June census (excluding Greenland ;approx .20000head )
Source :SOEC

TABLE N°3
'000 tslaughter weightEEC -SHEEPMEAT PRODUCTION
(Total human consumption )
Member State :1973 (1):1974 (1):1975 (1):1976 (1):1977 (1):1978 (1):1979 (1):1980 (2):1981 (3)
Germany :24 :24 :38 :42 :43 :46 :53 :55.0 :58.0
Franee :180 :182 :190 :195 :198 :202 :208 :219.0 :230.0
Italy (4) :61 :62 :61 :63 :61 :81.5 :84 :100.0 :100.0
Netherlands :3:2:3:3:4:5:7 : 6.5 : 65
BLEU :11 :12 :13 :16 :18 :20 :21 :22.5 :22.5
United Kingdom :468 :441 :475 :438 :400 :388 :403 :419.0 :420.0
Ireland :32 :34 :34 :33 :33 :30 :26 :25.0 :25.0
Denmark : 2 : 2 : 2 : 2 : 2 : 3 : 3 : 3.6 : 3.6
EECtotal :781 :749 :816 :792 :759 :775.5 :805 :850.6 :865.6
(1)Source SOEC (including goatmeat )
(2)Estimates (from national sources )
(3)Forecasts (" " " )
(4)ISTAT adopted anewmethod ofcalculation for1978and1979 (andfollowing years )

144
EEC10production andconsumption ofsheepmeat
'000 tSlaughter Weight
Gross domestic production total human consumption
:Member States 1979 (1):1980 (2):1981 (3)
• ·1979(la )1980 (2):1981 (3)
:Germany™· ·
18.14 :18.60 :20.00 53.00 55.00 :58.00
:France 159.50 :178.00 :180.00 208.00 219.00 :230.00
:Italy (4) 52.08 :60.00 :65.00 84.00 100.00 :100.00
:Netherlands 20.65 :22.00 :23.00 7.00 6.50 : 6.50
:Belgium 3.80 :3.80 :3.80 20.50 22.00 :22.00
:Luxembourg 0.14 :0.14 :0.15 0.53 0.53 :0.53
:United Kingdom 241.00 :272.00 :270.00 403.00 419.00 :420.00
:Ireland 34.20 :38.00 :34.40 26.00 25.00 :25.00
:Denmark 0.62 :0.70 :0.70 3.00 3.60 :3.60
:Greece 80.22 :80.14 :81.00 91.84 87.10 :93.00
:EEC total 610.35 :673.38 :678.05 896.87 937.73 :958.63
(1)Source SOEC (including goatmeat )excluding Belgium ,Denmark ,Greece and
Luxembourg (from national sources )
(la)Source SOEC (including goatmeat )excluding Greece andLuxembourg (from
national sources )
(2)Estimates (from national sources )
(3)Forecasts (from national sources )
(4)ISTAT adopted anewmethod ofcalculation for1978 and1979 (andfollowing
years )
(5)including Greenland

145
20.aAGRICULTURAL ALCOHOL
1.Introduction
Noprogresshasbeenmadetowardscreating asinglemarket.
2.Production
Production ofagricultural alcoholremainsstable.In1979itwasalmost
ashighonceagainasin1977.Thiswas,however ,a6.3%increase on1978.
InItalyaslightdropinmolassesalcoholproduction wasoffsetbyan
increaseinvinousalcoholproduction .
Franceisstillthemainproducerofagricultural alcohol.
3.Consumption
Totalconsumption continues atthesamelevelintheCommunity but
consumption ofagricultural alcoholislosinggroundinBelgiumandthe
Netherlands infavourofsynthetic alcohol.
A.Prices
Theupwardmovement inmolasses alcoholpricesnotedlastyearhas
continued .Thusthepricesofmolasses alcoholhavenotgotappreciably
closertothoseofsynthetic alcohol .
5.Trade
Intra-Community tradeisstillononlyaverysmallscale.
Thereis,however ,arelatively heavyflowoftemporary importsof
agricultural alcoholundertheinwardprocessing arrangements .
6.Outlook
Themarketinalcoholistendingmoreandmoretosettleintopatterns
corresponding totheindividual MemberStates.Thisisnothelping
progress towardsthedevelopment ofaCommunity system.
7.Expenditure
TheCommunitystillhasacommitment tograntrefundsonexportsof
spiritous beverages obtained fromcereals.
8.Theaccession ofGreecedoesnotreallyalterthesituation inthissector.

146
20.bPOTATOES (1)
1.Introduction
Nocommon organization ofthemarket yetexists forpotatoes .Aproposal
waspresented bytheCommission totheCouncil on23January 1976 covering
thewhole range offresh andprocessed products .
Itprovides for :
-marketing standards ;
-measures toencourage theformation ofproducer groups ;
-limitation ofsupport measures tothose required tokeep themarket
stable ;
-asystem oftrade with non-member countries incorporating areference
price system fornewpotatoes .
Products such aspotato starch (2),dehydrated potatoes (3)andproducts
processed from potatoes (A)arealready subject toacommon organization .
Themarketing ofseed potatoes issubject toaCouncil Directive (5).
2.Production
According toFAOstatistics theworld harvest in1979 was283252000 t.
TheCommunity ,with 3A678000 t,grew about 12%oftheworld total .The
average yield perhectare intheEECisalmost double theworld average .
Thevalue ofpotato production represented %ofthevalue offinal
agricultural production intheCommunity .Available statistics indicate
that 2.Amholdings (intheenlarged Community )grew potatoes .Atnational
level theproduction structure isvery variable ,theaverage crop area per
farm being 5.3haintheUnited Kingdom andabout O.AhainFrance and
Italy .
(1)SeeTables M.19.b.l toM.19.b.A
(2)Regulation (EEC )No120/67of13.6.1967 ,OJNoL117of19.6.1967 ,p.
2209
(3)Council Regulation (EEC )No1117/78of22May1978 ,OJNoL1A2of
30.5.1978 .
(A)Council Regulation (EEC)No516/77of14.3.1977 ,OJNoL73of21.3.1977 .
(5)Consolidated version ofCouncil Directive of1A.6.1966 ,OJNo66of
8.6.1966 ,p.35.

147
Since 1951-1955 thetotal area under potatoes intheEEChasdropped by
about 66% ,from 3512000hain1951-55 to1200000hain1979 . 'Because
oftheincrease inyields perhectare ,however ,production hasfallen by
only 44% (61957000 tin1951-55 ,34678000 tin1979 ).
TheCommunity isbasically self-sufficient butthere have been supply
problems following very dryyears (in1975 about 33million tandin1976
about 29million t).
Both thearea under newpotatoes (about 114000ha)andproduction (about
2million t)have remained almost thesame over thepast tenyears and
there continues tobeashortfall ,about 450000 tbeing imported every
year .
In1979 thearea under seed potatoes intheEECwasthesame asin1978 ,
about 112000ha.About 3million tareharvested ,mainly inthe
Netherlands ,theUnited Kingdom ,France andGermany .
Processed products (crisps ,instant potato ,chips etc.)arealso important
inthepotato sector .About 3million toffresh potatoes areprocessed
annually intheEEC .Some varieties areparticularly suited toprocessing
andaremainly grown under contracts between farmers andtheprocessing
industry .Development hasbeen very rapid andconditions areright for
further expansion inthenear future ofanumber ofproducts .
.Consumption
Unprocessed potatoes areused mainly asfoodstuffs andareused toalesser
extent forfeeding animals .Thequantities turned bytheprocessing
industry into products forhuman consumption represent about 16%oftotal
human consumption .
a)Human consumption
Percapita consumption offresh potatoes isincreasing slightly .After
abigdrop in1976/77asaresult ofthedrought in1976 (69.1 kgper
head ),itclimbed to76.2 kgin1977/78andto78.8 kgin1978 /79.
b)Animal feeding
Theamount used forfeeding animals varies from 3million tto
7million tdepending onthevolume oftheharvest .In1978/79itwas
6391000t,comprising 3145000 tinGermany ,609000 tinFrance ,
251000tinItaly ,617000 tintheNetherlands ,1157000 tinthe
United Kingdom and378000 tinIreland .

148
c)Products processed forhuman consumption
Consumption ofproducts processed from potatoes (about 3million tin
1979 )continues toincrease .
Consumption ofcertain products such asdeep-frozen pre-cooked products
should increase further .
4.Trade
Intra-Community trade inpotatoes absorbs only about 4%oftotal
production ,forseed potatoes andnewpotatoes thefigure being between 12
and15% .Thesurplus countries aretheNetherlands ,France andIreland .
TheUnited Kingdom exports seed potatoes andimports newpotatoes .Italy
exports newpotatoes andimports seed potatoes andware potatoes .Denmark
andtheBLEU also have alarge-scale import-export trade .
Thestructure ofCommunity trade inprocessed products issimilar tothat
inunprocessed products .TheNetherlands andFrance areexporting
countries andtheothers areimporters .
Trade with non-EEC countries ismainly inseed potatoes andnewpotatoes .
Seed potatoes areexported toSouth America ,Africa andAsia andnew
potatoes imported from thecountries round theMediterranean .
5.Prices
Prices arevery unstable ,varying from year toyear .Because ofthe
inelasticity ofdemand ,plentiful harvests tend toforce down prices guite
sharply .Other factors mayaffect prices ,forexample theweather and
unexpected exports tocountries with shortages .
In1979 /80prices started ataverage levels ,higher than those ofthe
previous year :atRotterdam 6.98 EUA/100kgon10September 1979 forBintje
+35mm;atArras 7.67 EUA/100kgforBintje +40mm;atLondon 13.48
EUA/100kgforseveral varieties .
After theChristmas period ,when thetrend issetfortherest oftheyear ,
prices were slightly higher andwere expected torise still more .Butfrom
January onwards they dropped andon30May1980 were asfollows :at
Rotterdam 3.28 ECU/100kgforBintje +35mm;atArras 3.08 ECU/100kgfor
Bintje +40mm;atLondon 12.29 ECU/100kgforseveral varieties .Atthe
endoftheyear anumber ofMember States took measures .Thelower prices
forlate potatoes meant that prices forthe1980 newpotatoes were also
lower .

149
Themainreasonsforthewaypricesdeveloped duringtheyearare:thevery
mildwinter,whichencouraged consumption ofothervegetables ,the
smallness ofthe1979potatoes ,whichdiscouraged consumption ,thevery
smallquantities ofsortingrejectsandthesellingofseedpotatostocks
forconsumption .
AtNewYorkthepriceforroundwhite-fleshed varieties variedfrom12
ECU/100kgon5November to7.55ECU/100kgon28April.
Thepricesofnewpotatoes andseedpotatoesarehigherthanthoseoflate
potatoes .Thedifference variesbyalargeapountdepending onthesizeof
theharvestandtheleveloflatecropprices.Ifthesearelow,the
pricesofbothseedandnewpotatoesfall.
Newpotatopricesalsovarybyoriginandvariety.Seedpotatoesforwhich
amonopolyisheldaredearerthanfreevarieties .
6.Outlook
The1979/80marketing yearwasoneofundoubtedly disappointing pricesand
thefirstprovisional fiauresfromtheSOECputtheareaunderpotatoesin
19804.5%downon1979(1200000hain1979,1146000hain1980),the
sharpestdropsbeingagainintheUnitedKingdom(-14.7%)andinGermany
(-5.7%).
ThefirstreturnsfromtheMemberStatesshowthatthecrophasbeenheavy
withprobably ahighpercentage ofdeformed andsplittubersand
consequently largequantities ofsortingrejects .Thetotalharvestis
expectedtobehigherthanlastyear's(34678000t).
TheRotterdam marketopenedwithpriceslowerthanlastyear's:
6.98ECU/100kgforBintje+35mmin1979,5.56ECU/100kgin1980.In
FrancepricesatArraswerealsolower:7.67ECU/100kgin1979,
4.87ECU/100kgin1980.IntheUnitedKingdom12.48ECU/100kgin1979,
9.45ECU/100kgin1980.
Priceswillprobably notundergoanysubstantial changesbeforeChristmas .
Long-term markettrendswillnotbediscernible beforeearlyJanuary.The
marketing yearwillsubsequently beinfluenced ,asalways,bytheweather,
bythevolumeofrejectsandbythequantities exported .
7.Economic aspects
IntheabsenceofaCommunity marketorganization stepshavebeentakenby
someMemberStates:intervention inrespectoflatepotatoesintheUnited
Kingdom,supportmeasuresforlatepotatoes andnewpotatoesinFrance.

150
8.Accession ofGreece
Greekproduction amountsatpresenttojustunder1milliont.Following
theaccession ofGreecethesituation inthewareandseedpotatoessector
willremainvirtually unchanged ,whiletheCommunity'sdegreeofself-supply fornewpotatoesislikelytoincreaseslightly .

151
20.cHONEY (1)
1.Introduction
Honey isnotsubject toacommon organization ofthemarket .Theonly
general charge onimports isa27%customs duty ,reduced to25%onhoney
from most developing countries andtonilforhoney from the28
least-developed countries andtheACPcountries .
2.Production ,consumption andtrade
In1978 /79theEECproduced 32000 tofhoney andimported 104000 t.
Germany alone wasresponsible for41%ofCommunity production in1977 /78
and France for 28% .
Germany wasalso thebiggest importer (58% )oftheNine ,followed bythe
United Kingdom (19%).TheEECproduces only35% ofitsrequirements but
theamounts produced bytheMember States vary widely .Basically theEEC
maybedivided into countries with ahigh degree ofself-supply (France ,
Italy andDenmark )andthose dependent onimports formost oftheir
requirements .France increases itsdegree ofself-supply byapplyinq
quantitative restrictions onimports from certain countries andbyapplying
Article 115oftheTreaty ofRome (protective measures tothose from
certain other countries ).
Thedivergent trade policies oftheMember States explain thedifficulty of
introducing acommon market organization .
3.Common measures toassist beekeeping
Between 1968 and1973 theEECgranted indirect aidtobeekeepers inthe
form ofapremium fordenatured sugar forfeeding bees .This wasabolished
in1974 because ofthesugar shortage .In1976 theEECgranted direct aid
amounting to3million EUAtoassociations ofbeekeepers ;this aidcame
from special funds voted bytheEuropean Parliament andnotfrom theEAGGF
budget .
In1977 theEECreintroduced thepremium fordenatured sugar forfeeding to
bees .
With theaccession ofGreece ,theCommunity 'sproduction potential will
increase byabout 30% .However ,Greek exports account foronly 2-3% of
Community imports ,sothat thecommon market 'shoney deficit will not
change significantly .
(1)SeeTable M.19.d.l .

152 -
21 .FEEDINGSTUFFS
1.SUPPLY AND CONSUMPTION IN1979
Supplies ofboth energy-giving rawmaterials andproteins
were abundant in1979 .Asoften happens ,there was some
apprehension onthis point inthespring ,but doubts were
quickly dispelled when theworld supply position became
known .Increases inFeedingstuff prices generally lagged
behind inflation rates .This tended toboost the volume
ofcompound feedingstuff sused ,which infact increased
more than thevolume oflivestock products .The rate of
penetration ofcompound feedingstuff sistherefore rising .
Slightly more cereals were used inanimal feed ,partly
because Thailand curbed itsmanioc exports totheCommunity
onavoluntary basis .Ontheother hand ,Indonesia stepped
upitsexports ofthis product totheCommunity very
sharply ,sothat theincrease incereal consumption inthe
Community isinfact duemore toanincrease indemand
forlivestock products .
Asaresult ofcertain market measures ,skimmed-milk
powder for calf feed became scarce ,and users felt
that ashortage wasabout todevelop .
Onthedemand side anincrease ofabout 6%inpigmeat
production generated anincrease inconsumption ofmore
than 5% .Therelatively lowprices foreggs atthe
beginning oftheyear were due toanexcess ofproduction
over final demand .Thesituation improved attheend of
theyear and itmaybeconcluded that average demand for
feedingstuff sover theyear ispractically thesame as
in1978 .
Demand forpoultrymeat isgoing upandanincreasing
proportion ofproduction isbeing exported .Total
consumption ofcompound feedingstuff sinthe sector
rose byabout 5%.
Cattle numbers arenotincreasing ,but itwould
appear that thefavourable prices ofcompound
feedingstuf fsareinducing producers toallow
average slaughter weights toincrease .This has
been tothebenefit ofthefeedingstuf fsindustry ,
andtonnage figures forcompound feedingstuf fs
forcattle areincreasing more rapidly than for
other animals .

-153 -
PRODUCTION OFCOMPOUND FEEDINGSTUFFS IN1979
Production ofcompound feedingstuf fsintheCommunity in
1979 was 77920000 t,anincrease of8.7% on1978 .This
increase isnot identical for all the Member States or
for allfeedingstuff types .However ,only intheBLEU
was there adecline intotal production ,although the
volume offeedingstuf fsfor cattle increased bymore
than 13% .
Caution isnonetheless required ininterpreting the
figures .The increase inproduction of10.7% inGermany
may bemore apparent than real asitwas only during
1979 that factories were first required toreport
production feedingstuf fsforpets need not bereported .
The drop inproduction offeedingstuf fsfor laying hens
isasource ofconcern forGerman producers ,who fear
the loss oftheeggmarket totheNetherlands .
InFrance production isrising more slowly than in
anyother EEC country except theBLEU .There isno
ready explanation for this ,asFrance has ashortfall
inmeat .
Production intheNetherlands isreaching avery high
level .Thevolume produced isthehighest intheEEC
per head ofpopulation andexceeds domestic requirements .
Production continues toincrease intheUnited Kingdom ,
Denmark ,Ireland .
Comparisons with figures for thedifferent sectors in
1978 show that feedingstuf fsfor cattle and foranimals
other than poultry andpigs show thehighest rates of
increase .Cattle also account for thehighest increase
inabsolute terms (3400000 t),butcompared with total
requirements for this class oflivestock ,production
ofcompound feed remains very low .
REQUIREMENTS
Ingeneral ,requirements increased inall sectors in
proportion tothevolume ofproduction ,but the
increase wasparticularly marked forpigs .
Theapparent covering offeedstuff requirements for
livestock production shows animprovement ofthe rate
ofpenetration .

-154 -
SectorRequirementsProduction of
compound
feedingstuf fsPercentage of
requirements
1978 1979 1978 1979 1978 1979
Cattle ' 166.902 171.492 24.568 27.989 14,7 16,3
Pigs 45.482 47.760 25.049 26.463 55,1 55,4
Poultry 26.492 27.026 19.091 20.046 72,1 74,2
Others 25.410 25.530 2.994 3.422 11,8 13,4
Total 264.286 271.808 71.702 77.920 27,1 28,7
Calcu !.ations DGVI
OUTLOOK
The feedingstuf fsindustry which hasmajor problems inits
own area ,now also has tocontend with thegeneral economic
situation overshadowed bytheenergy supply position .
The aimofthefeedingstuf fsindustry is,andwill remain
over the coming years ,tomake thebest possible use of
available resources inorder toprovide stock-farmers with
quality feedingstuf fsatthelowest possible prices .The
increase inthetonnage ofcompound feedingstuf fsused
shows theincreasing penetration ofindustrial feeds in
stock-farming .This ishelping toimprove productivity ,
largely tothebenefit oftheconsumer ,asitishewho
determines the level ofdemand .
Asfar asrawmaterials areconcerned ,theshortfall of
proteins remains very serious ,despite theCommunity 's
efforts toimprove thedegree ofself-supply .
Apoor harvest insoya-producing countries ,forexample ,could
well ,byforcing upprices ,impair productivity severely within
theCommunity :imported protein ,being ofgreat biological
value ,enables theCommunity tomake optimum useoffarm
fodder ,both cereals andsilage ,while inthecase of
monogastric animals such protein supplies are ,ofcourse ,
indispensable .
There donotappear tobeanyfuture problems with regard
toenergy-producing rawmaterials ,large quantities being
available both inside andoutside theCommunity .

-155 -
The increase indemand forfeedingstuf fswill remain
proportional tothat oflivestock production .However ,
the increasing use ofconcentrates could well ,inthe
medium orlong term ,lead tofar-reaching changes in
patterns ofanimal feeding ,especially through a
reduction intheproportion ofcereals used .
The accession ofGreece tothe Community will not alter our
pattern oftrade insupplies ofrawmaterials foranimal
feed .
Problems may arise inGreece ,however ,where thepolicy
onpurchase andsupplies ofrawmaterials differs
radically from thepattern intheNine .
Thepossibility oftrade inanimal feed with Greece
should notberuled outunless the industry modernizes
rapidly .
Greece will also have some problem maintaining theexport
links ithas atpresent with theArab countries .