Opinion of the Committee of the Regions on:

- 'the proposal for a Council Resolution on the common organization of the market in fruit and vegetables`, and - 'the proposal for a Council Regulation (EC) on the common organization of the market in processed fruit and vegetables` (96/C 129/05)

In accordance with Article 10, paragraph 1, of the Rules of Procedure, on 19 April 1995, the Committee of the Regions decided to draw up an Own-initiative Opinion on the above-mentioned proposals.

Commission 2 for Spatial Planning, Agriculture, Hunting, Fisheries, Forestry, Marine Environment and Upland Areas was given the task of undertaking this work. (Rapporteur: Mr Joseph).

The Committee of the Regions adopted the Opinion set out below at its 11th Plenary Session, held on 17 and 18 January 1996 (meeting of 18 January).

In view of the communication of September 1995 on the draft proposal for a Regulation regarding the common organization of the market in fresh and processed fruit and vegetables,

In view of the communication from the Commission of July 1994 (COM(94) 360 final),

In view of the Opinion of the European Parliament and the ESC of January 1995 (ESC/54/95 - A400/15/95),

In view of the communication from the Commission on the Euro-Mediterranean partnership (COM(95) 72 final),

In view of the conclusions of the Joint Council of 20 September 1993,

The COMMITTEE OF THE REGIONS adopts the following Opinion:

Considering that the aims of the European Union in view of its enlargement are the expression of fundamental democratic values, and that the EU can and must respond to the requests of the countries of the East and the South of the Union;

Considering that it has been possible for European construction to take place while taking into account geographical, social, cultural and economic diversity, and whilst respecting the ability of its constituents to achieve the aims they have been assigned;

Considering that since 1972, the date of the fruit and vegetable COM Regulation, it has been possible for the strengthening and development of the Union to take place whilst respecting and taking into account numerous differences and an increasing diversity;

Considering that the Community at that time was able to inspire and implement sector-based and cross-sector policies which have conferred upon it an economic strength of the very first order, but has also, in conjunction with the national policies of its members, ensured an exceptional standard of living and degree of political development;

Considering that as a result, the Union today, reinforced by the Maastricht Treaty, has the capacity to face up to world trends, not only for itself and the citizens who make it up, but also to help its neighbours to gain access to better living conditions;

Considering, in consequence, that the successive phases of this process have always required an optimal search for consensus over aims and for the adaptability of the solutions adopted in order to attain them; that, with this in view, CAP reform and the agricultural aspect of the GATT Agreements are perfectible elements of a wider mechanism and not ends in themselves; that it is appropriate to thoroughly weigh up the bargaining chips to be conceded on other aspects of European policy; that the Committee of the Regions of Europe, by reason of its closeness to the economic, social and cultural realities, can make a useful contribution in pointing out the need for balances to be introduced, both internally and also in external relations;

Considering that, with this perspective, the creation of a large single market, the role and the place of the Union within the worldwide trade organization recently constituted, and the partnership projects to the east and south are major stages which should not be looked upon as cut and dried; that these stages, in their initial or preliminary phases, bring with them, quite clearly, consequences to be assessed and the need for adaptation at a number of levels, and that an approach that over-simplified these questions would be of a type to put at risk the chances of the citizens of the Union supporting such a policy;

Considering, too, that the phenomena of environmental blight, going as far as desertification, even if they are not seen with equal clarity by and in all the regions of Europe, carry with them enormous ecological, economic and political risks, the importance of which is insufficiently taken into account; that to these risks may be added the hitherto uncalculated effects of European integration, taking the form of industrial concentration caused by intensified economic regrouping, and that it is therefore appropriate to inquire about the possibilities of bringing into competition zones at varying levels of development, and the consequences for each of these zones;

Considering that the globalization of the economy is increasingly affecting companies and their production methods, and more particularly SMEs and SMIs; that the fresh and processed fruit and vegetable sector has felt more sharply than others the repercussions of this situation, with the drop in the costs of transport and communication; that these sectors, which are labour-intensive not only in production but also in processing, storage, packaging and related activities, are experiencing very large disparities of competition resulting from social costs within the Union, and still more so vis-à-vis non-member countries, that beyond the free play of the market, there arises for the authorities the problem of funding social policy, for growers who will finish their working lives with the prospect of pensions which are inadequate in certain countries, and the problem of agricultural-structure policies for areas of production fairly clearly marked out by the small scale of their operations;

Considering that the areas of production concerned are strongly localized in zones where the alternatives in terms of agricultural diversification are restricted; that these zones are, many of them, seriously affected by unemployment, with growing incidence of urban concentration, the social costs of which are already posing serious problems for local authorities; that it is appropriate to remove from these costs those resulting from the disuse of whole swathes of land; that in this connection, the policies of wholesale uprooting, put forward at the macro-economic level as a sure method of rationalization and making savings, have, at regional level, disastrous effects for local economies through their impact on the occupation of land, upon the socio-economic fabric, and, more especially, small and medium-sized businesses and growers' cooperatives, and collection and processing cooperatives;

Considering that, in the light of these comments, existing aid programmes in the context of EEC Regulations No 2078/92 (Agricultural Environmental Protection Programmes), No 2079/92 (Pre-retirement), No 2080/92 (Forestry) should be maintained and possibilities for promotion ensured by means of structural funds for reinforcement of socio-economic cohesion. Structural funds and the correspondingly targeted alignment policy for the benefit of regions that exhibit specific economic and social deficits must also, in future, constitute the Community's main tool for assuring positive regional economic development, for reinforcing local potential and for dealing with social problems;

Considering that the conclusions of the 1994 White Paper presented by President Delors highlight the strengthening of the Union's economic and social cohesion; that this would be unthinkable without a preservation of territorial balance at the level of the Regions,

1. The Committee of the Regions calls on the Council and the Commission to fulfil their joint commitment of 20 September 1993 and to carry out the obligations agreed at that time:

- to adopt, for sectors of production for which the organization of the market has not yet been modified, the necessary arrangements to guarantee agricultural incomes, preferably at Community level;

- to take into account in these sectors the agricultural principles and financial principles that have been applied for the agricultural sector as a whole.

2. To this end, the Committee of the Regions urges the Commission and the Council to propose and implement provisions intended:

- to ensure that the funding earmarked for reform is adjusted in the light of the adverse effects which implementation of the reform may produce;

- to re-establish conditions for competition which are not distorted by currency variations and disparities in social costs;

- with a view towards the next round of negotiations, to put across to its partners in the World Trade Organization the interests of the Union's producers in their access to the internal market and the external markets, in particular through an energetically adopted position on issues relating to social dumping;

- to consider with the closest attention the direct and indirect consequences of trade agreements with non-member countries, in particular in terms of tonnages and the import timetable, and more particularly to take into account the aims of the founding treaties of the Union in proceeding to global analyses prior to drafting bilateral agreements, or to renewing them;

- to revise the methods of calculating entry prices, taking into account marketing costs and production costs, and to apply these controls rigorously;

- to work out without delay the implementing regulation concerning the levels of volumes, and the prices triggering the special protective clause;

- to engage within the earliest possible timescale in in-depth consultations in order to study, before any hypothetical free-trade agreement, the effects of further liberalization, the localization of these effects, and any corrective measures that might be available.

3. The Committee of the Regions considers that co-financing - including EAGGF guarantees - could be an effective instrument in ensuring the efficient and responsible use of financial resources, without undermining the principle of financial solidarity. Public co-financing aimed at building up the operational fund for growers' organizations makes it possible to react flexibly to fluctuations in production caused by cyclical or regional factors and is also a means of adapting production more appropriately to suit the market equilibrium and thus safeguard prices.

The Committee of the Regions considers it necessary to retain the possibility of including, where the need arises, products which have a particularly strong impact on regional economies, with the aim of avoiding serious market disturbances. These measures would have to be of limited duration and scale.

The Committee of the Regions also stresses the irrelevance of the requirement for growers and Member States to bear the majority of the costs of intervention. This requirement would lead to a blatantly unfavourable situation for States and regions with a weaker economic potential, especially those of southern Europe, or those in which there are few producer organizations. A socio-economic study has demonstrated the need for intervention costs to be met in full by the Guarantee section of the EAGGF during a transitional period.

Furthermore, the proposal to reduce withdrawal prices, combined with the reduction of the volumes which can be taken into withdrawal, is in contradiction with the Commission's own recognition of the need for slight trading surpluses for the stability of the fruit and vegetable market. The Commission should devise appropriate mechanisms to ensure that the maximum level of the operational fund envisaged in the draft Regulation does not make it difficult to mop up any exceptional cyclical surpluses which might arise during the farm year. Such mechanisms would help to ensure proper management of the market.

The Committee of the Regions considers it necessary to retain the possibility of including, from one case to another, in products which benefit from intervention, representative products from traditional production areas.

4. The Committee of the Regions would like to see the Commission fill in the gaps its proposals for setting up an effective mechanism for obtaining information about the market. The introduction of operational programmes should not culminate in interference with structural policy and with measures that accompany the reform of the CAP.

5. The Committee of the Regions urgently draws the attention of the Council and the Commission to the impact of such measures on employment, investment, and the structure of farms and companies which are closely tied in with regional economies. The Committee of the Regions of Europe points out that, in addition to the variations in the powers of regions, the low amount of their budgetary resources prevents them from being able to take effective action in crisis conditions which they would be the first to feel through their closeness to the people, to their plans and to their difficulties.

Economic and social cohesion, an everyday and immediate reality for the regions, would be made more difficult by a COM which authorized imports in dumping operations, and which called for self-financing on the part of growers whose financial capacity had been greatly impaired by successive slumps, and which the single market might introduce into all growing areas.

6. The Committee of the Regions, which supports the assumption of responsibility by growers, notes with satisfaction the proposals relating to economic organization, and emphasizes that the principle of encouraging them to keep production in line with market needs and shifts in demand, requires methods appropriate to their diversity; to this end, it is best to institute practical arrangements which offer a strong incentive, in order to allow the emergence of growers' organizations at the level of growing areas that are homogeneous in terms of soil and climate; it is also best to leave to the growers the option of dual membership for fresh produce, and produce intended for processing. Producer organizations play a key part in ensuring proper management of supply in the fruit and vegetable sector.

At the same time, it will be up to the Member States to decide the minimum economic size (number of producers and volume of marketable produce) at which a producer organization can be recognized as such in the new market organization, together with the necessary provisions to ensure democratic control of producer organizations by their members.

The Committee of the Regions considers the role of the citrus processing industry to be a positive one, providing stability for the fresh fruit market and at the same time ensuring that the Community juice industry is supplied with raw material under optimum conditions so as to compete with the main non-Community producers. Consequently, the Committee would wish to commit the Commission to maintaining the budget for citrus processing.

At the same time, it highlights the question of the exclusivity of negotiation of contracts in the processing industry between the processing sector and growers' organizations. This is an acceptable measure in the mid term, but also one which is certain, in the immediate timescale, to cause serious problems of adaptation in states and in regions that are confronted with delays in structuring of their growers' organizations. This demonstrates the need for defining an adequate transition period.

Taking into account specific situations concerning produce of local or regional importance is also a step forward that meets the expectations of numerous growers' organizations and organizations representing the processing industry. With this aim in view, a systematic study should be made of this produce and the socio-economic impact of the reform in each of the region's considered.

Secondly, the proposition concerning replacement of fixed quotas with moveable quotas in the processing industry will be an arbitrary source of serious problems, with the result of favouring certain Member States to the detriment of others. Whilst conceding the need to make the present quota system flexible, in Member States this must be done by means of transfer between the various tomato-based products whilst maintaining currently applicable global quotas as a point of reference.

In order to ensure sales of regional products, it is necessary that Member States, in the process of definition of criteria for recognition in relation to existing or future growers' organizations, should be able to take account of specific regional information.

In the same way, proposals relating to joint-trade organizations and agreements open up possibilities of a kind to add weight to efforts by the Union's growers in the area of the quality of, and respect for, the environment. It is unfortunate that on this occasion the proposed regulation does not aim to clarify rules for all of the operators in the chain, in particular, trading and mass distribution.

7. Producer organizations should be granted a period of six years in which to adjust. This period would apply to all the provisions of the reform. Without calling into question the proposals relating to standardization, the Committee of the Regions nonetheless wishes efforts towards simplification and openness to be continued, on the one hand in order to limit as far as possible additional costs for the Union's growers, and, on the other hand, so that European consumers have easy and permanent access to this information.

8. The Committee of the Regions, whilst agreeing with the value of a relevant and effective monitoring system, stresses that checks must be carried out across the whole of the Union on the basis of identical criteria and must be applicable to imports and Community produce alike.

In the context of reforming the procedure for clearance of accounts, the new version of EEC Regulation No 729/70 includes particular requirements with regard to funding organizations and the installation of 'certification offices` in Member States. This would conspicuously increase the assurance of utilization of resources in accordance with Community law. It therefore appears unnecessary to build additional requirements into the context of a specific Community legal regulation relating to organization of the market. The Committee of the Regions rejects all Community interventions that go beyond the procedure for clearance of accounts or that interfere with national powers and the administrative independence of the regions.

9. The Committee of the Regions urges the Commission and the Council not to underestimate the delicacy of the balance in connection with direct and secondary jobs, town and country planning, the preservation of the countryside and areas of outstanding beauty, and cultural foundations to which the sectors involved contribute. For this reason, the Committee of the Regions expressly requests the Council and the Commission to renew the possibilities for subsidy that exist in the context of Regulation EEC No 2078/92 (with regard to agricultural practices that are friendly to the environment and to the countryside) and which are also intended to encourage production methods which are friendly to the environment and to encourage configuration of land on a timescale extending beyond the present programme, and to reject anything that could jeopardize standards reached to date in regional programmes.

The revision envisaged for this Regulation should be devised such as to make it possible to configure policy relating to the agricultural environment as an independent, solid component of policy.

Done at Brussels, 18 January 1996.

The Chairman of the Committee of the Regions

Jacques BLANC