9. 7. 79 Official  Journal  of the European  Communities No C 171/1 
II 
(Preparatory  Acts) 
ECONOMIC  AND  SOCIAL  COMMITTEE 
Opinion  on the proposals  for the 1979/80  farm  prices  and  related  measures 
The text  referred  to the Committee  has not yet been  published  in the Official  Journal  of the 
European  Communities. 
A. LEGAL  BASIS  FOR  THE  OPINION 
On 5 February  1979,  the Council  referred  the abovementioned  proposal  to the Economic 
and Social  Committee  in accordance  with  Articles  47 and  198  of the Treaty  establishing  the 
European  Economic  Community. 
B. OPINION  OF THE  ECONOMIC  AND  SOCIAL  COMMITTEE 
The Economic  and  Social  Committee  prepared  its opinion  on the above  matter  at its 167th 
plenary  session,  held  in Brussels  on 4 and  5 April  1979. 
The full  text  of the opinion  is as follows: 
THE  ECONOMIC  AND  SOCIAL  COMMITTEE, 
Having  regard  to Articles  47 and  198  of the  Treaty 
establishing  the European  Economic  Community, 
Having  regard  to the  request  made  by the  Council  of 
the European  Communities  on 5 February  1979  for an 
opinion, 
Having  regard  to the decision  taken  by its Chairman  on 
6 February  1979,  instructing  the Section  for Agriculture 
to prepare  an opinion  on the matter, 
Having  regard  to Article  46 of the Committee's  Rules  of 
Procedure  (urgency  procedure), 
Having  regard  to past  Committee  opinions  on the same 
subject, 
Having  regard  to the opinion  issued  by the Section  for 
Agriculture  at its meeting  on 21 March  1979, Having  regard  to  the  report  submitted  by  the 
rapporteur,  Mr Schnieders, 
Having  regard  to the  discussions  at its 167th  plenary 
session  on 4 and  5 April  1979  (meeting  of 5 April), 
HAS  ADOPTED  THE  FOLLOWING  OPINION 
by 47 votes  to 23, with  13 abstentions: 
1. General  comments 
1.1. The  Economic  and  Social  Committee  appreciates 
the Commission's  efforts  to safeguard  and  consolidate 
the degree  of integration  achieved  so far under  the CAP. 
1.2. The  Committee  expects  that  the  introduction  of 
the European  Monetary  System  will  be a further  step 
No C 171/2 Official  Journal  of the European  Communities 9. 7. 79 
towards  greater  coordination  of economic  and  financial 
policy  in the Community. 
1.3. The  Committee  would  point  out  the  difficult 
situation  on some  agricultural  markets.  The  aim  of 
achieving  balance  between  supply  and  demand  on the 
agricultural  markets  must  be pursued,  due  regard  being 
paid  to the role  which  the CAP  must  be able  to play  in 
the international  context  (x). The  Committee  would 
refer  in this  respect  to its opinion  of 27 January  J 977 
on the Common  Agricultural  Policy  in the international 
context  (possible  consequences  and  improvements). 
1.4. The  Committee  is aware  that  the  CAP  is 
continuously  faced  with  the  need  to pursue  all the 
objectives  set out in Article  39 (1) of the Treaty.  These 
objectives  are: 
— to increase  agricultural  productivity  by promoting 
technical  progress  and  by  ensuring  the  rational 
development  of agricultural  production  and  the 
optimum  utilization  of the factors  of production,  in 
particular  labour, 
— thus  to ensure  a fair  standard  of living  for  the 
agricultural  community,  in particular  by increasing 
the individual  earnings  of persons  engaged  in 
agriculture, 
— to stabilize  markets, 
— to ensure  the availability  of supplies, 
— to ensure  that  supplies  reach  consumers  at 
reasonable  prices. 
1.5. A decision  must  be taken  within  the framework  of 
the common  agricultural  policy  as to how  these 
objectives,  which  are  sometimes  difficult  to reconcile, 
are to be taken  into  account.  For  this  purpose,  it will  be 
necessary  to fix priorities  and,  above  all,  to fix these 
priorities  both  in the light  of the structural  and  social 
problems  which  exist  in the  various  regions  of the 
Community  and  also  in accordance  with  an  EEC 
budgetary  policy  that  is tailored  more  to meeting  the 
need  for growth,  jobs  and  stability. 
2. Comments  on the 1978  Report  on the Agricultural 
Situation 
2.1. Comprehensive  Community  statistics  are available 
on trends  in farmers'  incomes.  (The  picture  they  show  is 
C) OJ No C 61, 10. 3. 1977. a varied  one).  Incomes  differ  considerably  within  the 
Community  depending  on region,  farm  size,  Member 
State,  crops  grown  in the light  of weather  conditions  in 
various  years,  etc.  Big  discrepancies  are  also  found 
when  comparing  farm  incomes  with  those  in other 
sectors  in the  Member  States  and  when  comparing 
workers'  incomes  in the  same  sector  in different 
Member  States. 
The Committee  considers  that  in view  of these 
disparities  data  about  the average  absolute  level  of farm 
incomes  has only  a very  limited  value.  For  this  reason  a 
comparison  of average  farm  income  with  that  of other 
sectors  has  little  weight.  Such  a comparison  could  only 
yield  reasonable  results  if it were  based  on comparable 
structures. 
But apart  from  income  levels,  income  trends  are also  of 
importance  in assessing  the  situation  of agriculture. 
Gross  and  net  value  added  are  indicators  that  can  at 
least  give  some  idea  about  the trend.  According  to the 
documents  which  the  Commission  submitted  to the 
Section  on 2 March  the  real  per capita  income  of all 
persons  working  in agriculture  in the Community  rose 
by an average  of 3 3% per  year  between  1970  and 
1978.  The  corresponding  increase  for  all sectors  was 
3%. However,  these  figures  do not  take  account  of 
depreciation  charges.  Net  value  added  in agriculture 
was lower  at 2 6%. 
The Committee  feels  that  it can  neither  prove  nor 
disprove  the Commission's  assertion  that  farm  incomes 
have  outstripped  those  in other  sectors. 
2.2. The  Committee  would  draw  attention  to the 
necessity  of pursuing  a common  agricultural  policy 
aimed  at ensuring  that  all Community  farmers'  incomes 
develop  in a balanced  manner. 
The Committee  feels  that  as well  as fixing  prices,  a 
solution  could  be found  for this  state  of affairs  through 
social  and  structural  policy  measures. 
2.3. The  Committee  asks  the Commission  to study  the 
possibility  of supporting  farmers'  incomes  without  at 
the same  time  helping  landowners. 
2.4. Prices  of supplies  to consumers.  Here  the  trends 
have  varied  throughout  the  Community.  In  the 
countries  with  a weak  currency,  apart  from  the United 
Kingdom,  food  prices  have  risen  more  steeply  than  the 
general  inflation  rate.  In the strong  currency  countries 
9. 7. 79 Official  Journal  of the European  Communities No C 171/3 
the rise  in food  prices  has,  however,  been  less  than  the 
general  rate  of inflation. to such  an extent  over  the past  10 years  that  the market 
is seriously  imbalanced.  There  are no acceptable  outlets 
for this  volume  of production  either  on the  internal 
Community  market  or on the export  market. 
2.5. The  Commission's  figures  indicate  that  about 
two-thirds  of the  price  increase  are  attributable  to 
higher  processing  and  marketing  costs.  The  costs  of 
processing  agricultural  raw  materials  and  marketing  the 
finished  products  today  account  for well  over  50%  of 
the price  of food  to the consumer. The resultant  surpluses  have  become  a heavy  burden  for 
the Common  Agricultural  Policy,  as consumers  and 
tax-payers  can  hardly  be  expected  to  fork  out 
indefinitely  for the costs  associated  with  the surpluses. 
When,  therefore,  one  is looking  for the causes  of the 
increases  in food  prices  paid  by the final  consumer  one 
should  take  account  not  only  of price  increases  by the 
producer  but  also  of the  effect  of processing  and 
marketing  costs. 
2.6. The  Committee  considers  that  the  Commission 
must  effectively  ensure  that  supplies  reach  consumers  at 
reasonable  prices.  Accordingly  the  Commission  must 
concern  itself  about  consumer  prices  and  not only  about 
production  prices. 
By failing  to publish  the  findings  of the  annual  retail 
prices  survey  since  the 1975  survey,  the Commission  is 
out of step  with  the Council  resolution  which  specifies 
that the Commission  should  continue  to carry  out retail 
price  surveys  and  inform  the  public  promptly  about 
price  differences  within  the Community. 
2.7. The  proportion  of total  income  spent  on food  has 
gone  down  in all the Member  States  in recent  years.  In 
1976  the  money  spent  on food  accounted  for 20%  of 
private  consumption  (Cf.  the  1978  Report  on  the 
Agricultural  Situation  in the Community  (point  247)). 
This  figure  is a general  average  for  all the  Member 
States  together  and  for all income  groups  and  all family 
sizes.  In Italy  the figure  is over  30%  and  in the Federal 
Republic  of Germany  it is over  17%. 2.9. The  cost  of the  CAP,  which  still  represents  a 
major  part  of the Community's  activity,  has  also  gone 
up in the  last  few  years.  For  1977  total  Community 
expenditure  on the  CAP  amounted  to 6 980  MUA 
(million  units  of account),  of which  6 662  MUA  was 
accounted  for  by  market  expenditure.  This  figure 
represents  more  than  75%  of the  total  Community 
budget.  Public  expenditure  on the  CAP,  including  the 
common  financing  of the MCAs,  represents  about  2-7% 
of consumer  spending  on food.  Total  national  and 
Community  expenditure  on agriculture  represents  13% 
of Community  GDP,  with  0 9% borne  by the national 
budgets  and  0-4%  by  the  EAGGF  (excluding  the 
expenditure  of the Guidance  Section). 
2.10.  The  Committee  would  stress  the need  for better 
coordination  of economic  policy  in the  Community. 
This  applies  in  particular  to  the  fight  against 
unemployment.  Because  of the  difficulties  in the 
industrial  sector  where  there  are  about  six  million 
people  out  of  work  at present,  farming  in the 
Community  has been  unable  in recent  years  to continue 
its restructuring  drive  (with  its associated  improvements 
in income)  with  the same  degree  of intensity. 
The employment  situation  in the  Community  should 
prompt  the  Community  authorities  to pursue  a policy 
enabling  a maximum  number  of farms  to be retained. 
The Committee  considers,  however,  that  because  of 
their  lower  output  marginal  holdings  cannot  be kept 
going  by price-policy  measures;  other  measures  will 
have  to be used  instead. 
For larger  families  and  the  lower  income  groups  the 
figure  is appreciably  higher  than  the average. 
2.11.  In view  of this  situation,  a sustained,  long-term 
effort  must  be made  to find  solutions  to agricultural 
problems.  The  Committee  would  have  liked  the 
2.8. Community  output  of a number  of important  Commission  to have  presented  a blueprint  which  took 
agricultural  products,  such  as milk  and  sugar,  has risen  account  of prospective  effective  and  potential  supply 
No C 171/4 Official  Journal  of the European  Communities 9. 7. 79 
and demand  at Community  and  international  level  and 
to have  proposed  on the  basis  of this  an export  and 
food  aid policy  commensurate  with  the ambitions  that 
the Community  should  have  in the food  sector  and  with 
the contribution  which  it can  and  must  make  towards 
solving  the problems  of hunger  in the world. 
The Committee  considers  that  such  a policy  should  be 
used  as a base  for implementing  accompanying  policies 
for trade,  market  organization,  regional  development, 
agricultural  research,  farm  modernization,  the 
modernization  of the  agricultural  and  food  industries 
and for  any  financial  participation  by producers  that 
may be deemed  necessary. 
The Committee  considers  that  the Commission's  present 
proposals  can  be assessed  only  on the  basis  of a 
long-term  policy. 
2.12.  Stabilization  of  markets  and  guarantees  of 
supply 
The Committee  would  stress  that  the  CAP  has 
succeeded  in bringing  about  stable  markets  and 
guaranteed  supplies,  albeit  in an imperfect  way.  This 
stabilization  would  not  have  been  possible  had  it not 
been  for the high  farm  prices.  The  question  arises  as to 
whether,  in some  cases,  the price  paid  has  not been  too 
high. 
3. Comments  on  the  average  level  of the  prices 
proposed 
3.1. The  Committee  notes  that  'the  prudent  price 
policy  pursued  in the last  two  years  helped  consumers  at 
a time  of high  inflation  and  economic  recession'  (Cf. 
The 1978  Report  on the  Agricultural  Situation  in the 
Community  (point  242)).  This  year  the Commission  is 
proposing  that  farm  prices  be increased  only  in the 
Member  States  with  weak  currencies.  This  increase 
would  not,  however,  enable  farmers  in those  States  to 
benefit  from  the same  prices  as those  applicable  in the 
Member  States  with  strong  currencies. 
The Committee  draws  the  Council's  attention  to the 
fact that  agricultural  production  cost  trends  have 
diverged  from  those  of the prices  fixed  by the Council  in 
national  currencies.  It should  also  be noted  that  the 
proposals  could  have  an effect  on two  sectors  which  are 
in surplus,  in view  of: 
— the  considerable  increase  in levies  in the milk  sector, 
— the  reduction  in the B quotas  for sugar  beet,  and  the 
more  stringent  intervention  criteria  in other  sectors. 3.2. Taken  all together,  the proposed  measures  could 
well cut  many  farm  incomes  in both  real  and  money 
terms.  On the other  hand,  it cannot  be denied  that  farm 
incomes  do not  depend  on the  guarantee  prices  alone 
and that  the proposed  agri-monetary  measures  will  push 
up national  prices  in some  Member  States. 
3.3. After  weighing  up the views  of all concerned,  and 
particularly  bearing  in mind  the lack  of equilibrium  in 
some  important  sectors,  the  Committee  proposes  that 
the prices  in units  of account  of products  where  there 
are such  market  disequilibria  should  remain  unchanged. 
To this  extent  it agrees  with  the Commission's  proposal. 
But it would  ask  the  Commission  to see  whether 
reasonable  price  increases  for  other  products  are  not 
justified  nevertheless. 
To ensure  that  incomes  develop,  the  Committee  feels 
that long-term  measures  should  be  proposed  for 
products  where  it is impossible  to increase  prices. 
4. Comments  on the agro-monetary  proposals 
4.1. The  Commission's  agro-monetary  proposals  are 
concerned  to bring  about  a return  to a greater  degree  of 
integration  under  the CAP.  These  efforts  will,  however, 
be successful  only  if commensurate  alignment  is 
achieved  in other  areas  of economic,  budgetary, 
taxation  and  monetary  policy. 
4.2. The  Economic  and  Social  Committee  has 
advocated  the  rapid  dismantling  of these  payments  in 
several  opinions. 
4.3. It would  reiterate,  however,  that  when  these 
payments  are  dismantled,  allowance  must  be made  as 
far as possible  for  both  farm  incomes  and  consumer 
interests. 
4.4. The  Committee  can  approve  the  proposals  put 
forward  by the Commission. 
4.5. On  29 March  1979  the Council  of Ministers  took 
a decision  on  the  dismantling  of the  new  MCAs 
(monetary  compensatory  amounts)  after  the 
introduction  of the  European  Monetary  System  on 
13 March  1979.  New  MCAs  are  to be dismantled 
within  two  years  and  the  dismantling  is to take  place 
when  the farm  prices  are decided. 
9- 7. 79 Official  Journal  of the European  Communities 
The old  MCAs  must  be  dismantled  cautiously. 
Phasing-out  over  a period  of four  years  would  be 
acceptable  taking  into  account  the dismantling  of new 
MCAs.  This  period  could  be shorter  in countries  with 
negative  MCAs. 
Where  the  dismantling  of positive  MCAs  leads  to a 
drop  in farm  prices  in money  terms,  a study  should  be 
made  to determine  whether  other  measures  — and  if so, 
which  other  measures  — could  be taken  to cancel  out 
the adverse  effects  suffered  by some  farm  incomes. 
At the same  time  the Committee  would  emphasize  that, 
when  fixing  farm  prices  for  1979/80,  the  Council 
should  decide  on a substantial  and  balanced  reduction 
in negative  MCAs.  Part  of this  reduction  should  be 
effected  immediately. 
In countries  where  MCAs  are positive  it will  be easier  to 
dismantle  the scheme  if farm  prices  in ECUs  are raised. 
The Committee  notes  with  satisfaction  that  the 
Commission  must  rapidly  propose  a change  in the bases 
for calculating  MCAs. 
5. Comments  on individual  products 
5.1. Proposals  for  the milk  sector 
5.1.1.  The  substantial  general  increases  in  the 
co-responsibility  levy  proposed  by  the  Commission 
would,  to judge  by trends  over  the  last  year,  lead  to 
price  cuts  of 10%  or more  and  therefore  to a 30%  drop 
in milk  producers'  incomes. 
5.1.2.  The  Committee  is aware  that  the milk  market  is 
in need  of a general  long-term  solution. 
1 5.1.4.  The  Committee  believes  that  a greater 
preference  should  be given  to the needs  of low-income 
groups  within  the  Community  (including  social 
5.1.3.  The  Committee  does  not think  that  the financial 
resources  yielded  by the co-responsibility  levy  will  lead 
to a corresponding  increase  in sales  if they  are used  to 
reduce  the price  of milk  products.  In view  of the  low 
elasticity  in the  demand  for  milk  and  milk  products, 
price  reductions  will  generate  only  a disproportionately 
small  increase  in sales,  even  when  all the  differences 
within  the Community  are taken  into  account. No C 171/5 
institutions,  schools,  hospitals,  etc.)  by measures  en-
abling  such  groups  to benefit  from  surplus  production. 
5.1.5.  The  derogations  proposed  by the  Commission 
— apart  from  those  to help  hill farming  — offer  hardly 
any improvement  in the  incomes  of the  farmers 
concerned  and  are  a violation  of the  CAP.  The 
Committee  therefore  is in favour  of farm  structure, 
regional  and  social  measures  to alleviate  the problems 
of small  cattle  breeders. 
5.1.6.  Bearing  in mind  that  the  milk  sector  is 
responsible  for the lion's  share  of EAGGF  expenditure 
(3 000  million  units  of account  or 36-4%)  and  in the 
absence  of other,  efficient  measures  to bring  down  dairy 
surpluses  rapidly,  the ESC  approves  the  Commission's 
proposals  concerning  the  co-responsibility  levy.  It 
would  also  like  new  guidelines  for Community  policy  in 
the milk  sector  aimed  at: 
— reform  of the non-marketing  subsidy, 
— premiums  for  a progressive  cutback  in  milk 
production  per farm, 
— finding  of new  sales  outlets  in the Community  and 
in non-member  countries, 
— an increase  in food  aid, 
— encouragement  of the  utilization  of skimmed  milk 
as animal  feed, 
— the  abolition  of the commitment  to buy  from  certain 
third  countries  (e.g.  New  Zealand), 
— Community-wide  harmonization  of the  advantages 
granted  to consumers  as regards  milk  products, 
— the  definition  of common  quality  standards, 
— a greater  degree  of balance  so as to help  bring  about 
an overall  Community  policy  for fats  and  oils  and 
protein-bearing  products, 
— encouraging  doorstep  deliveries. 
5.1.7.  Instead  of the proposed  general  increase  in the 
co-responsibility  levy  the  Committee  suggests  that  the 
Commission  try  introducing  a levy  scheme  geared  to 
individual  producers'  contributions  to surpluses.  Such  a 
scheme  should  also  take  account  of the situation  in the 
milk  products  sector. 
No C 171/6 Official  Journal  of the European  Communities 9. 7. 79 
5.1.8.  The  Committee  would  once  again  call  for  the 
abolition  of aid for butter  consumers  which  differs  from 
one national  market  to another,  and  the replacement  of 
such  aid by a uniform  scheme. 
5.2. Proposals  for  the sugar  sector 
The Commission  has  proposed  a substantial  reduction 
in the B quota  for sugar  beet. 
The Committee  would  point  out in this  connection  that: 
— concessions  have  been  made  to the  signatory 
countries  of the Lome  Convention, 
— special  advantages  have  been  granted  to certain 
sugar  factories, 
— the  production  of isoglucose  is not  covered  by the 
same  taxation  and  quota  system  as that  applied  to 
sugar  production  in the Community. 
Because  of the  situation  on  the  sugar  market  the 
Committee  endorses  the  Commission's  proposal  that 
the B quota  be reduced. 
5.3. Proposals  for  the rice  sector 
The Committee  would  like  the difference  between  the 
threshold  prices  for long-grained  and  round-grained  rice 
to be removed  so as not  to penalize  Community 
producers,  with  the latter  being  raised  to the level  of the 
former. 
The Committee  also  asks  that  rice  be included  on the 
list of products  subject  to food  aid.  But  it cannot  accept 
the granting  of concessions  under  the  multilateral 
GATT  negotiations,  which  would  subsequently  disrupt 
this important  sector  of production,  as well  as tobacco 
and other  Mediterranean  products. 
5.4. Proposals  for  the tobacco  sector 
The Committee  considers  that  the general  proposal  for 
a system  of premiums  cannot  be accepted  in its present 
form. 
5.5. Proposals  for fruit  and  vegetables 
The Committee  would  stress  that  the  marketing 
standards  for  fruit  and  vegetables  have  led to certain 
varieties  being  replaced  by others. 
Done  at Brussels,  5 April  1979. The Committee  would  ask  the  Commission  to review 
these  marketing  standards,  which  occasionally 
discriminate  against  quality  varieties. 
This  review  might  be used  later  as a basis  for extending 
the policy  for  the  production  of quality  products  to 
other  sectors. 
5.6. Proposals  for  flax  and  oilseeds 
The Committee  welcomes  with  satisfaction  the 
Commission's  proposal  with  regard  to seed  flax.  It calls 
upon  the  Commission  to study  the openings  for other 
deficit  products  in the  EEC,  and  in particular  the 
openings  for products  needed  by the processing  industry 
and acquiring  a high  added  value  in the course  of their 
processing. 
In general,  the Committee  thinks  that  the Commission 
should  give  more  consideration  to the  repercussions 
which  decisions  in the agricultural  sector  have  on other 
sectors  further  downstream. 
5.7. Proposals  for  the wine  sector 
The Committee  calls  upon  the  Council  to give  an 
undertaking,  when  farm  prices  are set,  that  as soon  as 
possible  it will  dismantle  the system  of excise  duties  that 
places  an unjustifiable  burden  on the  products  of the 
wine  sector  in several  Community  Member  States. 
6. Comments  on structural  policy 
The Committee  believes  that  the  Community  should 
make  a greater  financial  commitment  to policy  in this 
sector  and  introduce  modifications  designed  to restore 
equilibrium,  aid  the  less-favoured  areas  and  support 
those  producers  who  are in the greatest  difficulties. 
When  the  Committee  meets  shortly  to examine  the 
agricultural  proposals  that  the  Commission  has  just 
submitted  to the  Council  this  question,  along  with  all 
those  associated  with  structural  policy,  will  be the 
subject  of in-depth  proposals  and  remarks. 
Finally,  the  Committee  would  stress  the  need  for 
intervention  to be used  more  effectively  and  for  the 
relevant  financial  inputs  to be periodically  updated. 
The Chairman 
of the Economic  and  Social  Committee 
Fabrizia  BADUEL  GLORIOSO 
9. 7. 79 Official  Journal  of the European  Communities No C 171/7 
ANNEX 
to the opinion  of the Economic  and  Social  Committee 
A. AMENDMENTS  REJECTED 
The following  amendments,  were  rejected  during  the debate: 
Delete  heading  1.6.1  'Farm  Incomes'  (corresponds  to point  2 of the Committee's  opinion). 
Point  1.6.1.1  (corresponds  to point  2.1 of the Committee's  opinion)  becomes  point  1.7 and  is replaced 
as from  the second  paragraph  by the following  text: 
'Given  the worsening  imbalance  on the major  agricultural  markets,  the Commission  considers  that  a 
price  freeze  is necessary  at least  for the coming  marketing  year.  The  cautious  price  policy  which  has 
been  followed  over  the  last  two  years  has,  the  Commission  believes,  proved  to be incapable  of 
dealing  with  major  market  problems  such  as the surpluses  in the milk  and  sugar  sectors.  Collateral 
measures  are  made  ineffective  in important  areas  by price  incentives  making  them  more  or less 
nugatory.  This  has led the Commission  to the view  that  a tougher  prices  policy  is essential  as long  as 
major  market  imbalances  subsist. 
Despite  certain  reservations,  the  " ESC  broadly  approves,  in the  light  of the  present  economic 
circumstances  and  of the  state  of the  agricultural  markets,  the  Commission's  proposals  that  the 
common  agricultural  prices  should  be frozen  for the 1979/80  marketing  year.  However,  it considers 
that longer  term  measures  to guide  farmers'  decisions  about  agricultural  production  are 
unavoidable.  The  resulting  hardship  for certain  farmers  in terms  of income  (level  and  development) 
cannot  be offset  by setting  the common  prices  at a more  generous  level.  In view  of the differences 
between  production  structures  and  the position  of individual  farms,  social  aims  cannot  be attained 
by means  of a further  across-the-board  price  rise. 
Political  prices  which  continue  to disregard  market  conditions  would  inevitably  lead  to a further 
misdirection  of resources,  overproduction  and  hence  to increased  costs  for  the  Community  and 
especially  the  tax-payer.  This  would  not  only  besmirch  the  CAP  but  also  the  whole  idea  of 
European  unification  in the eyes  of the man  in the street.  It must  be borne  in mind  that  the vast 
majority  of Europeans  are not employed  in agriculture'. 
The remainder  of the opinion  from  1.6.1.2  would  be deleted. 
Reasons 
The European  Community's  farm  prices  policy  must  be judged  in the general  economic  context.  It is not 
advisable,  in view  of the disturbing  developments  in the agricultural  sector,  to go into  too much  detail 
into matters  concerned  with  agricultural  incomes  or consumer  prices  in this  opinion. 
Voting 
For : 39; against:  46; abstentions:  8. 
Delete  the fourth  paragraph  in point  1.6.1.1  (the  one  ending  on page  4). (Corresponds  to point  2.1 of 
the Committee's  opinion). 
Reasons 
The text  compares  agriculture  with  'other  sectors'  (average  pay  from  company  chairman  to unskilled 
worker).  But  the average  of these  other  sectors  (steel,  shipbuilding,  textiles,  public  sector,  banking,  etc.) 
No C 171/8 Official  Journal  of the European  Communities 9. 7. 79 
cannot  be a valid  reference  because  the situation  in each  sector  is so different  and  none  of the other 
sectors  is governed  by MCAs.  Moreover,  account  would  have  to be taken  of the increased  number  of 
unemployed,  the  number  of whom  exceeds  that  of farmers.  If one  compares  agriculture  with  other 
'assisted'  sectors  of the economy,  one  would  see that  it is far from  being  the worst-off  as far as income 
trends  are concerned,  as these  other  sectors  often  run at a loss. 
What  is more,  farm  incomes  themselves  vary  considerably: 
— from  one  product  to another  (the  variation  between  animal  and  vegetable  products  is particularly 
great), 
— from  one  Member  State  to another  (because  of MCAs).  Farm  income  trends  depend  not so much  on 
the prices  in units  of account  as on the MCAs  asked  for and  obtained  by certain  Member  States, 
and these  MCAs  do not exist  in other  sectors;  MCAs  bring  about  an average  fall in common  prices 
of 6% throughout  the Community,  and  thus  a fall  in incomes  of well  over  6%. 
Thus  it is MCAs,  and  not  prices  in units  of account  which  are responsible  for statistics  showing  a slight 
slowdown  in the average  trend,  at least  for the period  referred  to, 
— from  one  region  to another.  Here  are some  figures  showing  regional  incomes  in terms  of a national 
average  of 100  % m 1976/77: 
Schleswig-Holstein 128 
Bavaria 86 
lie de France 298 
Basse  Normandie 65 
Lombardy 186 
Molise 42 
Scotland 127 
Wales 71. 
Farm  income  averages  are  also  adversely  affected  because  marginal  operations,  which  under  similar 
circumstances  have  disappeared  in other  sectors,  are  kept  going  for  social  reasons.  The  average  is 
affected  by these  marginal  operations  being  taken  into  account  and  so it cannot  be a valid  reference. 
Another  thing  which  the statistics  do not take  into  account  is that  only  36%  of farmers  work  full-time, 
and the  figure  varies  considerably  from  one  Member  State  to another  (1978  Report,  p. 38).  This  is 
another  factor  to be taken  into  account  when  making  comparisons. 
Trend  comparison  depends  basically  on the methods,  terms  and  reference  periods  used.  The  ESC  notes 
that according  to the Commissioner  for Agriculture  (letter  of 2 March  1979  to the President  of COPA) 
the growth  in farm  incomes  last  year  (41%)  was  greater  than  the  overall  growth  in incomes  in the 
economy  as a whole  (2-6%). 
Growth  in per capita  incomes  — according  to the method  used  — was  still  higher  in agriculture  during 
the period  1970  to 1978,  both  in the six original  Member  States  and  in the nine  present  members. 
The Commission  Vice-President  concludes  by saying  that  given  the size  of the differences  between  farm 
incomes  in different  regions  or within  the same  region  there  is no way  of comparing  farm  and  non-farm 
incomes  for the whole  of the Community  (Annex  to the letter  referred  to above). 
9. 7. 79 Official  Journal  of the European  Communities No C 171/9 
Voting 
For: 13;  against:  57; abstentions:  8. 
Delete  point  1.6.5  (corresponds  to point  2.7 of the Committee's  opinion). 
Reasons 
Not everyone  agrees  with  the figures  in the first  paragraph. 
In the Bulletin  of the Societe  Generate  de Banque,  for example,  (Brussels,  February  1979,  No 185,  p. 1) 
it is stated  that: 
'26%  of the private  expenditure  of these  households  goes  towards  food,  drink  and  tobacco;  the 
percentage  varies  from  20 % in Federal  Republic  of Germany  to more  than  40 % in Ireland.' 
As far as the second  paragraph  is concerned,  it should  be pointed  out that  part  of the marketing  costs 
and VAT  make  up a fixed  percentage  that  increases  Automatically  in step  with  the basic  price.  The 
arguments  put  forward  here  therefore  err on the side  of over-simplification.  Instead  of strengthening 
their  case  they  tend  to weaken  it. 
Voting 
For: 3; against:  54; abstentions:  17. 
Add the following  to point  1.6.7: 
'Expenditure  on MCAs  rose  from  9-1%  of the Guarantee  Section's  total  expenditure  in 1976  to 
16 2% in 1977,  and  provisional  estimates  put it at 119%  in the initial  budget  for 1978. 
EAGGF  Expenditure 
(milliard  u.a.) 
1976 1977 1978 
(prov.) 
Guarantee  Section 5 570 7 100 8 873 
934 (i) 
of which: 
— refunds  and  intervention 4 715 5 280 6675 
— MCAs 505 970 993 
388 (i) 
— double  rates 350 600 676 
Guidance  Section  (appropriation) 325 325 325 
(') Supplementary  budget  adopted  7 July  1977. 
Source  : Extract  from  1977  Report  — The  Agricultural  Situation  in the European  Community  — February  1978. 
To gauge  the importance  of MCAs  to agriculture  one  must  also  take  into  account  Member  States' 
own spending  in implementing  Community  and  national  agricultural  policies.  In 1977,  the last  year 
for which  overall  figures  are available,  total  expenditure  came  to 20 300  million  u. a. (14  200 
million  in 1975). 
The EAGGF's  share  of this  came  to 7 200  million  u. a. (compared  with  5 000  million)  or 35%  of 
the total.  The  part  played  by State  aid in carrying  out national  agricultural  policy  objectives  is a 
subject  causing  much  concern.  There  are some  fair-sized  differences  in the way  the Member  States 
define  their  policy  aims  and  use aids. 
No C 171/10 Official  Journal  of the European  Communities 9. 7. 79 
The main  use  of State  aid  is to support  production.  Many  permanent  aid  payments  facilitate 
agricultural  development  and  the integration  of agriculture  into  the economy  as a whole.  But  where 
State  aid  provides  help  for  operations  or incomes  without  the  beneficiaries  undertaking  to do 
anything  in return  the integration  of agriculture  into  the economy  as a whole  is held  up, as too  is the 
attainment  of Common  Agricultural  Policy  objectives.  Such  aid  affects  trade  between  Member 
States  and  distorts  competition,  and  to an extent  much  greater  than  that  shown  in the  figures 
published  by the  Commission  (1978  Report,  point  317).  Moreover,  the  proportion  of aid  used  to 
support  production  varies  considerably  from  one  Member  State  to another  (29%  to 87%). 
The Committee  also  notes  that,  according  to the  Commission,  'In  1978,  expenditure  by the 
Guarantee  Section  of the  European  Agricultural  Guidance  and  Guarantee  Fund  (EAGGF)  totalled 
8 700  million  EUA,  an increase  of 25-7%  over  1977  (6 900  million  EUA)  and  more  or less  in line 
with  the  annual  rate  of change  observed  since  1975.  Because  of abundant  harvests,  expenditure  in 
the cereals,  rice  and  wine  sectors  was  twice  that  of 1977.  The  increases  in the oils  and  fats  and  the 
sugar  sectors  were  slightly  above  the 1978  average  and  the  increases  in the other  sectors  below  the 
average.  Expenditure  required  to finance  monetary  compensatory  amounts  increased  by 15%. 
The milk  products  sector  took  the  largest  share  with  nearly  3 000  million  EUA  (or  36 4% of total 
expenditure  excluding  the  effect  of the  dual  rate).  Cereals  (18%),  sugar  (10%)  and  milk  products 
accounted  for  nearly  65 % of all expenditure  by the  Guarantee  Section.  Monetary  compensatory 
amounts  and  accession  compensatory  amounts  took  about  13%.  Forecasts  for 1979  indicate  that 
total  expenditure  by the  Guarantee  Section  will  rise  by about  12%.  Cereals  (19%)  milk  products 
(36%),  sugar  (10%)  and  monetary  compensatory  amounts  (10%)  will  probably  account  for about 
75%  of this  figure,  as in 1978. 
Given  Community  policy,  the  economic  and  monetary  situation  (in  particular  the  relationship 
between  supply  and  demand)  meant  that  refunds  on exports  to the world  market  represented  about 
42%  of the  total.  Two-thirds  of all refunds  went  to the  cereals  and  milk  products  sectors,  each 
receiving  1 200  million  EUA.  Nearly  half  the expenditure  on price  subsidies  went  on milk  products 
(in particular,  skimmed  milk  used  as animal  feed  and  cheaper  consumer  prices  for butter).  Storage 
proper  received  14%  of all expenditure,  or about  the same  percentage  as in 1977.' 
(1978  Report,  points  290  to 292). 
Reasons 
The aim  of this  amendment  is to provide  a fuller  description  of the situation  on the basis  of the figures 
which  are available. 
Voting 
For:  32;  against:  44;  abstentions:  9. 
Point  2.3 (corresponds  to point  3.3  of the Committee's  opinion) 
Replace  by: 
'The  Committee  feels  that  the  Commission's  price  proposals  must  be supported  on account  of the 
general  economic  situation,  which  calls  for  a policy  aimed  at curbing  inflation  and  restricting 
general  expenditure,  and  also  in view  of the need  to restore  balance  on the  agricultural  market. 
Because  of the difficult  situation  on the  agricultural  market  long-term  measures  should  be adopted 
that take  account  of the  income  situation  in agriculture. 
The Committee  calls  upon  the  Commission  to work  out  proposals  to this  end.' 
Reasons 
An analysis  of the  problems  on the  agricultural  market  does  not  justify  the  recommendation  that, 
contrary  to the Commission's  proposal,  prices  should  be increased  by 3%.  The  progressive  deterioration 
of the situation  on important  agricultural  markets  calls  for a stringent  price  policy. 
9. 7. 79 Official  Journal  of the European  Communities No C 171/11 
The cautious  price  policy  in recent  years  has not  brought  any  improvement  in the market  situation. 
The effect  of a number  of measures  aimed  at restoring  market  balance  has  in the Commission's  view 
been  largely  cancelled  out  by the price  measures  adopted. 
In the present  situation  of surpluses  on several  important  agricultural  markets  any  price  increase  will 
have  direct  consequences  for EAGGF  expenditure,  which  has  now  reached  such  a volume  that  it can 
barely  be financed. 
It must  also  be added  that  the general  economic  situation  in all Member  States  calls  for an all-round 
income. 
Voting 
For: 39, against:  39; abstentions:  8. 
Amend  point  3.4 (corresponds  to point  4.4 of the Committee's  opinion)  to read  as follows  (and  delete 
the first  sentence  of point  3.5 as a result  of this  amendment): 
'The  financial  transfers  made  as a result  of the MCAs  benefit  consumers  in importing  countries  with 
a weak  currency  and  provide  an advantage  for exporters  exporting  products  from  a country  with  a 
strong  currency.  They  are a particular  source  of tension  and  friction  between  the Member  States. 
They  create  or accentuate  cases  of distortion  of competition  by encouraging  or penalizing 
producers. 
Their  influence  on agricultural  production  in the  different  countries  of the  EEC  is open  to 
discussion.  They  have  created  discrimination  between  consumers.  They  have  influenced  the 
distribution  of resources  within  the Member  States  and,  as a result,  product  specialization  within 
the common  market  and  intra-Community  trade.  They  may  have  helped  to change  the  place  of 
agriculture  in the different  economies.  But  such  effects  are difficult  to assess  because  they  cannot  be 
isolated  from  other  influences  that  have  also  played  a role. 
Moreover,  MCAs  have  led to cases  of fraud  which  have  produced  strains  on the EAGGF  budget. 
The Section  would  however,  have  preferred  a more  rapid  dismantling  with  a view  to applying  to all 
farmers  the principle  of 'equal  income  for equal  work'.  What  is more,  it is illogical  that  the EAGGF 
should  subsidize  Member  States  in a discriminatory  way. 
If Member  States  wish,  for domestic  reasons,  to subsidize  consumption  or provide  their  farmers 
with  a higher  income  than  that  of farmers  in the  other  Member  States,  they  should  bear  the 
financial  cost  involved  themselves.' 
Reasons 
Despite  the difficulty  of providing  figures,  the following  case  can  be given  as an example: 
Although  France  is the EEC's  biggest  exporter  of farm  products  and  has  a large  surplus  the percentage 
of imports  covered  by exports  keeps  going  down,  falling  from  284-2%  in the  first  half  of 1975  to 
199-5%  in the first  half  of 1978.  Germany  absorbs  only  16 6% of France's  farm  exports,  compared 
with  19%  in 1976.  On the other  hand,  French  imports  from  Germany  have  risen  from  6 6% (1972  to 
1976  average)  to 8-4%.  West  Germany,  which  as No 5 on France's  list of agricultural  suppliers,  has 
become  No 2. But  it has fallen  from  first  to second  place  in France's  list of customers.  In stock  rearing 
in particular  there  is a progressive  transfer  of potential  production  of animal  products  to West 
Germany. 
Voting 
For: 26;  against:  40;  abstentions:  19. 
No C 171/12 Official  Journal  of the  European  Communities 9. 7. 79 
Point  4.1.5.  (corresponds  to point  5.1.5  of the Committee's  opinion) 
Replace  by the following: 
'The  ESC  approves  the  derogations  planned  by the  Commission  for  social  reasons  to help  hill 
farming  and  small  farmers.' 
Voting 
For: 25; against:  33; abstentions:  22. 
Point  4.1.6  (corresponds  to point  5.1.6  of the Committee's  opinion) 
Substitute  the following  for this  paragraph: 
'4.1.6.  Because  of the particularly  serious  imbalance  on the milk  sector,  the Committee  approves 
the Commission's  proposals  concerning  the  co-responsibility  levy.  It also  urges  that  a 
long-term  solution  to the problems  in the milk  sector  be sought  in the near  future.  The 
European  Commission  is asked  to study  this  issue  and  submit  suitable  proposals.' 
Reasons 
So as to prevent  a continuation  of the enormous  rise  in production  in the milk  sector  without  there 
being  any  prospect  of sales  being  increased,  it is clear  that  producers  should  be made  to shoulder  some 
of the responsibility  for an increase  in production  by being  charged  a levy. 
The production  of structural  surpluses  which  are sold  into  intervention  must  be prevented.  Otherwise, 
the financing  of these  surpluses  will  soon  present  a problem.  The  co-responsibility  levy  which  is being 
advocated  will  clearly  curb  production  and  also  help  to finance  any surpluses.  In addition  to these  direct 
short-term  measures,  there  is also  a need  for the problem  in the milk  sector  to be viewed  in the long 
term.  In this  context  the  problem  should  be examined  from  the point  of view  of both  supply  and 
demand  with  a view  to establishing  a structural  balance  on the market.  A number  of the ideas  set out by 
the rapporteur  should  no doubt  be considered.  Nevertheless,  the Committee  would  be advised  not  to 
anticipate  the systematic  analysis  of the problem  which  is necessary. 
Voting 
For: 27, against:  38; abstentions:  13. 
Point  4.1.7  should  read  as follows  (corresponds  to point  5.1.7  of the Committee's  opinion) 
'Instead  of the proposed  sliding-scale  tax,  there  should  be a general  increase  in the co-responsibility 
levy within  the bounds  of the current  Regulation  (Regulation  (EEC)  No 1079/77).  Each  producer 
should  be allowed  a certain  standard  quantity  free  of tax.  The  increased  resources  of the 
co-responsibility  levy  should  moreover  be used  (a) to promote  the sale  of milk  products  inside  and 
outside  the Community,  and  (b) for measures  to raise  quality.' 
Reason 
The administration  of the proposed  taxation  system,  which  has  so many  socially-slanted  exceptions, 
will cause  more  trouble  than  it is worth. 
Voting 
For: 23; against:  37; abstentions:  10. 
Point  4.1.7  (corresponds  to point  5.1.7  of the Committee's  opinion) 
First  sentence  to read: 
'... try introducing  a progressive  levy  scheme  per section  of production.' 
9. 7. 79 Official  Journal  of the  European  Communities No C 171/13 
Reasons 
The text  of the opinion  rightly  condemns  the across-the-board  increase  in the co-responsibility  levy 
proposed  by the Commission. 
But it seems  to link  an increase  in the co-responsibility  levy  which  would  be owed  by producers  to an 
increase  in production. 
Such  a system  would  impose  on breeders  with  a small-  or medium-sized  output  a tax that  could  rise 
enormously  if their  output  increased  by only  a small  amount. 
But producers  who  already  have  a fair-sized  or large  herd  and  do not  need  to increase  their  output 
(sometimes  these  are producers  who  have  developed  an artificial  system  of milk  production  based  on 
soya  and  manioc)  would  have  to pay  out much  less. 
The aim  of the amendment  proposed  is to replace  this  socially  unjust  and  economically  inefficient  state 
of affairs  by a scheme  that  is simple  to operate.  The  system  proposed  in the Section's  opinion  would  be 
cumbersome,  complex  and  cost  a lot of money  to set up. 
Voting 
For: 10;  against:  52; abstentions:  9. 
Point  4.1.8  (corresponds  to point  5.1.8  of the Committee's  opinion) 
Delete  this  paragraph. 
Reasons 
Aid for the consumers  of milk  products  can help  to promote  sales.  The  question  as to whether  and  how 
this aid should  be granted  cannot  be answered  until  the problem  has been  carefully  analysed. 
Voting 
For: 26; against:  38; abstentions  : 10. 
Point  4.4 (point  5.4 of the Committee's  opinion) 
Delete  this  paragraph. 
Reasons 
No reason  has been  given  for the Commission's  proposal  being  unacceptable. 
Voting 
For: 32; against:  36; abstentions:  5. 
B. THE  FOLLOWING  PASSAGES  OF THE  SECTION'S  OPINION  HAVE  BEEN  REPLACED  BY 
AMENDMENTS  APPROVED  DURING  DISCUSSIONS 
Point  1.6.1.1  (the  second  paragraph,  et seq.,  of the Section's  opinion,  i.e. the second  paragraph,  et seq. 
of point  2.1.1  of the Committee's  opinion) 
The Section  would  point  out that  a distinction  must  be made  between  income  trends  and  income  levels. 
In its statements  the European  Commission  lays  particular  stress  on income  trends. 
According  to the documents  which  the Commission  presented  to the Section  on 2 March  the real  per 
capita  income  of all persons  working  in agriculture  in the Community  rose  by an average  of 3-3%  per 
No C 171/14 Official  Journal  of the European  Communities 9. 7. 79 
year between  1970  and  1978.  The  corresponding  increase  for all sectors  was  3%.  However,  these 
figures  do not take  account  of depreciation  charges.  Net  value  added  in agriculture  was  2 6% lower. 
While  gross  and  net value  added  enable  trends  to be identified,  both  overstate  farmers'  real  incomes  and 
are therefore  not good  indicators. 
The Section  cannot  accept  the Commission's  statement  that  farm  incomes  have  risen  faster  than  those  in 
other  sectors  of the economy. 
The Commission  has neglected  to present  a comparison  of farmers'  income  levels  with  income  levels  in 
other  sectors.  According  to the figures  made  available  to the Study  Group,  the absolute  level  of incomes 
in agriculture  is considerably  lower  than  the figure  in other  sectors. 
Voting 
For: 54; against:  30; abstentions:  6. 
Point  1.6.1.2  (second  paragraph)  (corresponds  to point  2.2,  second  paragraph,  of the Committee's 
opinion) 
The Section  feels  that  as well  as fixing  prices  using  the objective  method,  a solution  could  be found  for 
this state  of affairs  through  social  and  structural  policy  measures. 
Voting 
For: 59; against:  7; abstentions:  17. 
Point  1.6.6  (corresponds  to point  2.8 of the Committee's  opinion) 
Domestic  production  of major  commodities  such  as milk  and  sugar  has constantly  increased  in the last 
10 years  and  outstrips  domestic  demand. 
Voting 
For: 51; against:  26; abstentions:  5. 
Point  1.6.7,  second  sentence  (corresponds  to point  2.9,  second  sentence,  of the Committee's  opinion) 
Public  expenditure  on the  CAP,  including  the  common  financing  of the  MCAs  still  represents  only 
about  2-7%  of consumer  spending  on food  and  0-4%  of Community  GDP. 
Voting 
Unanimous. 
Point  2.1,  paragraph  1, second  sentence  (corresponds  to second  sentence  of paragraph  1 of point 
3.1 of the Committee's  opinion) 
This year  the  Commission  is proposing  that  prices  in terms  of units  of account  should  remain 
unchanged. 
Voting 
For: 43; against:  42; abstentions:  11. 
Point  2.1,  paragraph  2 (corresponds  to point  3.1,  paragraph  2, of the Committee's  opinion) 
The Section  draws  the  Committee's  attention  to the  further  rise  in agricultural  marketing  and 
production  costs  which  might  erode  farm  incomes.  The  incomes  of some  farmers  will  also  be hit by the 
following  Commission  proposals. 
9. 7. 79 Official  Journal  of the European  Communities No C 171/15 
Voting 
Unanimous. 
Point  2.2  (corresponds  to point  3.2 of the Committee's  opinion) 
Taken  all together,  the proposed  measures  threaten  to reduce  most  farm  incomes  in both  real  and 
money  terms. 
Voting 
For: 55; against:  28; abstentions:  3. 
Point  2.3  (corresponds  to point  3.3 of the Committee's  opinion) 
The Section  feels  that  such  consequences  must  be avoided.  It therefore  considers  that  the  prices 
proposed  must  be raised  by 3%,  bearing  in mind  the state  of the markets  and  the Section's  comments 
on the agro-monetary  proposals  in point  3 below. 
When  this  has been  considered,  and  where  it is found  that  some  products  would  not be able  to benefit 
from  an increase  in prices,  then  long-term  measures  should  be proposed  with  the aim  of safeguarding 
producers'  incomes. 
The Section  therefore  calls  upon  the Commission  to draft  new  proposals  along  these  lines. 
Voting 
For: 59; against:  26; abstentions:  4. 
Point  3.5,  paragraph  1 (corresponds  to point  4.5,  paragraph  1, of the Committee's  opinion) 
Positive  and  negative  MCAs  must  therefore  be dismantled  cautiously.  If the EMS  is introduced,  the 
remaining  MCA's  could  be dismantled  over  a period  of four  years.  This  dismantling  process  could  be 
completed  in a shorter  space  of time  in countries  where  the MCAs  are negative.  Where  they  are positive, 
dismantling  should  not lead  to a drop  in farm  prices  in money  terms  or adversely  affect  farm  incomes  in 
any country  of the Community.  Under  this  provision  MCAs  created  after  the introduction  of the EMS 
could  also  be dismantled  on a time-scale  to be agreed  on in advance. 
Voting 
For: large  majority;  against:  0; abstentions:  5. 
Point  4.1.6,  first  sentence  (corresponds  to point  5.1.6,  first  sentence,  of the Committee's  opinion) 
The Section  cannot  therefore  accept  the Commission's  proposals  concerning  the co-responsibility  levy. 
Voting 
For: 35; against:  33; abstentions:  6. 
Point  4.1.7,  first  two  sentences  (corresponds  to point  5.1.7,  first  two  sentences,  of the Committee's 
opinion) 
Instead  of the  proposed  general  increase  in the  co-responsibility  levy  the  Section  suggests  that  the 
Commission  try introducing  a levy  scheme  geared  to the  increase  in milk  production  of individual 
producers.  Such  a scheme  should  also  take  account  of the situation  in the milk  products  sector. 
Voting 
For: 32; against:  29; abstentions:  16. 
No C 171/16 Official  Journal  of the  European  Communities 9. 7. 79 
Point  4.2 (point  5.2 of the Committee's  opinion) 
Proposals  for  the  Sugar  Sector 
'The  Commission  has  proposed  a substantial  reduction  in the B quota  for  sugar  beet.  The  Section 
considers  that  such  a reduction  is unjustified  when: 
— concessions  have  been  made  to the signatory  countries  of the Lome  Convention, 
— special  advantages  have  been  granted  to certain  sugar  factories, 
— the  production  of isoglucose  is not  covered  by the  same  taxation  and  quota  system  as that 
applied  to sugar  production  in the Community.' 
Voting 
For: 39;  against:  33;  abstentions:  8. 
Point  4.3  (second  paragraph)  (corresponds  to point  5.3,  second  paragraph,  of the  Committee's 
opinion) 
The Section  also  asks  that  rice  be included  on the  list of products  subject  to food  aid. 
Voting 
For:  37;  against:  32;  abstentions:  2. 
C. THE  FOLLOWING  PASSAGE  OF THE  SECTION'S  OPINION  WAS  WITHDRAWN  AFTER  AN 
AMENDMENT  ADOPTED  DURING  THE  DEBATE: 
Point  1.6.5,  third  sentence  (corresponds  to point  2.7  of the Committee's  opinion) 
This,  together  with  the  fact  that  producers'  prices  account  for  only  half  of the  final  consumer  price, 
shows  that  any  increase  in common  farm  prices  by a given  percentage  would,  on average,  lead  to an 
overall  rise  in the cost  of living  of roughly  one-tenth  of that  percentage. 
Voting 
For:  40;  against:  38;  abstentions:  9. 
Opinion  on the  proposal  for  a Council  Regulation  amending  Regulation  (EEC)  No  816/70 
laying  down  additional  provisions  for  the  common  organization  of the  market  in wine 
The text  referred  to the  Committee  has  been  published  in Official  Journal  of  the  European 
Communities  No  C 9 of 11 January  1979,  page  3. 
A. LEGAL  BASIS  FOR  THE  OPINION 
On 5 January  1979,  the  Council  referred  the  abovementioned  proposal  to the  Economic  and 
Social  Committee  in accordance  with  Article  43 of the  Treaty  establishing  the  European 
Economic  Community.