10.5.93 OfficialJournaloftheEuropeanCommunities NoC129/25
OpinionontheCommissionproposalsonthepricesforagriculturalproductsandonrelated
measures(1993/1994)(])
(93/C129/09)
On18February1993theCouncildecidedtoconsulttheEconomicandSocialCommittee,
underArticle198oftheTreatyestablishingtheEuropeanEconomicCommunity ,onthe
abovementioned proposals.
TheSectionforAgricultureandFisheries,whichwasresponsibleforpreparingtheCom­
mittee'sworkonthesubject,adopteditsOpinionon9March1993.TheRapporteurwas
MrMantovani .
Atits304thPlenarySession(meetingof24March1993),theEconomicandSocialCommittee
adoptedthefollowingOpinionby83votesto27,withsixabstentions .
1.Generaleconomicsituation anyfurtherreductionoffarmincomeswouldhavea
dramaticimpactandisthusunacceptable .Thispoint
isborneoutbytheCommissiondata.
1.1.The1993/1994farm-priceproposalscomeata
difficulteconomicperiodforalldevelopedcountries,
includingtheECMemberStates.Thegrowthofthe
GrossDomesticProduct(GDP)inrealtermsisesti­
matedat1,7%in1992,withaforecastofonly0,8%
for1993.Inflationin1993isexpectedtofallto4,1%,
buttoriseinsometraditionallylow-inflationcountries
suchasGermany.Inotherwordstherearedangerous
signsofstagflationwhichcouldaggravatethealready
highlevelofunemployment throughouttheCom­
munity.1.5.Asregardstheeffectsonconsumerfoodprices
oftrendsinfarm-gateprices,itshouldbenotedthat
thecostofprocessingandmarketing—whichincludes
advertisingandthevariousmeansofmarketpen­
etration—contributesverygreatlytothefinalconsumer
price.Furthermore ,final-consumer pricesalsoinclude
tax.Thustherelationbetweenfarm-gateandconsumer
pricevariesgreatlydependingontheamountofadded
valueinthefinalproduct.
1.2.Theoverallagriculturalsituationwillbeaffec­
tedbythegeneraleconomicclimate.AGATTagree­
mentneglectfulofthestructuralandsocialpeculiarities
ofEuropeanagriculture,andwhichfailstorespectthe
contentofthereformoftheCommonAgricultural
Policy(CAP),couldfurtherhitfarmincomesand
employment .1.5.1.Asregardstherelationbetweentrendsinthe
twoprices,itmaybenotedthatfarm-gateandcon­
sumerpricetrendsarenotsymmetrical .Asarule,a
dropinfarmpricesdoesnotaffectconsumerprices,
butariseinfarmpricesisoftenaccompaniedbya
simultaneous—ifnotevenearlier—riseintheconsumer
price.Farmersshouldbegrantedashareofthebenefit
oftheaddedvaluecreatedbytheprocessingandmar­
ketingoffarmproducts.Tothisend,theCommittee
callsformorefundstobemadeavailableforstructural
spendingundertheGuidanceSectionoftheEuropean
AgriculturalGuidanceandGuaranteeFund(EAGGF).
Inallcases,ECcompetitionrulesmustberespected.1.3.Economicstagnationishamperingthepro­
ductionrestructuringusheredinbythereformofthe
CAP,particularlyinthoseregionsoftheCommunity
wheretherearenoalternativejobsformanyofthe
farmersandfarmworkerswhoareforcedoutofthe
sectorbyrestructuring .
1.6.ThepresentOpinionmustbearinmindthe
generaleconomicsituation.1.3.1.Fortheabovereasons,theCommitteefeels
thattheCommission shoulddeviseinstrumentsto
cushionthesocialeffectsofthedifficultsituationfacing
thefarmsectorasaresultofthereformoftheCAP
andthegeneraleconomicrecession.
2.Priceproposalsandaccompanying measures 1.4.Implementation oftherecentreforminaccord­
ancewiththeprincipleswhichoriginallyinspiredit
thereforeremainsdesirable,butitmustberealizedthat
2.1.ThemeasuresadoptedintheJuly1992Regu­
lationsreformedmostofthemainsectorscoveredby
theCAP. (')OJNoC80,20.3.1993,pp.1-53.

NoC129/26 OfficialJournaloftheEuropeanCommunities 10.5.93
2.1.1.AstheCommitteenotedinitsOpiniononthe
DevelopmentandFutureoftheCAP(*),thereformwas
reallymotivatedbytheCommunity's'deficitspending'
situationandtheneedtofacilitateaGATTagreement.
Thesefactorsprovedmoredecisivethanthedeclared
aimsofimprovingmarketbalanceandprovidingnew
incomeguaranteesforproducers.3.2.Cereals
3.2.1.Inadditiontothemeasuresdecidedinthe
CAPreform,theCommissionproposesreducingthe
monthlyincreasesfromECU1,5/tonnepermonthto
ECU1,35/tonnepermonth.
3.2.2.TheCommitteedoesnotaccepttheCom­
mission'spositionandsuggeststhatthesecutsberecon­
sidered.Althoughminimal,theyaresignificantforthe
reasonsmentionedabove:thesectorcannotwithstand
anyfurtherincomelosses.
3.2.3.TheCommitteealsorecommendsthat,before
the1995sowing-season ,adjustmentsaremadeto
extendtheareasunderdurumwheat.Theextension
shouldinvolvesuitableareaswhichwouldotherwise
beforcedtoabandondurum-wheatproductionfor
good,andwherenoalternativeproductionispossible.2.2.TheCommissionstatesthatthegeneralprin­
cipleunderlyingthefarm-priceproposalsfor1993/1994
isthatofstability.Butquiteapartfromafewexplicit
pricecuts,thisstabilityisonlysuperficial :theprice
packagewilltriggerafurtherwidespreadfallinreal
farmprices.
2.2.1.Thedecisionsonthepricesandsupportsys­
temsofthesectorscoveredbythereformwereendorsed
bytheCouncilon21May1992andarecontainedin
thesubsequentimplementingRegulations .
3.3.Milk 2.3.TheCommitteedrawstheattentionoftheCom­
missionandCounciltothefactthattheresultsofthe
firststageofimplementingthereformmaynotmatch
uptotheCommission'sexpectationsintermofquanti­
tativeproductionandincometrends.Furthermore ,
measuresareappliedtoobureaucratically ;thepro­
visionsonpermanentset-asidearestillawaited;and
importsofcerealsubstitutesremainattheirpreceding
levels.TheCommitteecallsontheCommissiontotake
accountofthesecontradictions .
2.3.1.Inparticular,theCommitteecallsforproper
monitoringoftheimplementingstagesofthereform.
ItplansinthenearfuturetodrawupanOwn-initiative
Opiniononcertainkeyissuesrelatedtothereform:
structures,production,thefarmworkforce,aswellas
environmental impact,productquality,redtape,and
theoverallphilosophybehindthereform.3.3.1.Milkisanothersectorwherethemain
decisionsonpricesandsupportarrangements were
adoptedaspartofthereform.
3.3.2.TheCommitteeispleasedtoseethatthebasic
Co-responsibility levyformilkistobecancelledasof
1April1993,inlinewiththeundertakingmadebythe
Council.
3.3.3.IftheCouncilprovesunabletoadopttheprice
packagebythatdate,theCommitteeconsidersitvital
thatthemeasurebeappliedretroactivelyfrom1April.
3.3.4.Inthemeantime,theCommitteeurgesagainst
takingothermeasurestoreplacetheco:responsibility
levy.Anadhocfundshouldalsobesetuptohelp
promotedairyproducts.
3.3.5.Inthiscontext,topromoteindustrialuseof
liquidmilk,withouttoogreatanincreaseinconsumer
prices,theCommitteecallsforapolicydesignedto
reducethecostofskimmed-milk powdertoindustry.
Tothisend,itaskstheCommissiontoconducta
detailedstudyofthismarket.3.SectorscoveredbytheCAPreform
3.1.TheCommission's1993/1994priceproposals
fortheproductscoveredbythereformflowautomati­
callyfromthedecisionstakeninMay1992.However,
intheCommittee'sview,thiscouldhavebeenthe
momenttomakethefirstadjustments .
3.1.1.TheCommitteenotestheproposalsbutdraws
attentiontosomeadjustmentswhichitdeems
importantifthereformistobeimplementedtothe
bestpossibleeffect.3.4.Beefandveal
3.4.1.Thereformlaiddownnewinstitutionalprices
totakeeffecton1July1993.
(>)OJNoC40,17.2.1992.3.4.2.TheCommitteeproposesthattheCommission
alterthearrangementsforstaggeringpremiumsinline

10.5.93 OfficialJournaloftheEuropeanCommunities NoC129/27
withtheageandweightoftheanimals.Thiswould
helptailorthereformmorecloselytodifferentfarm
sizesandsystemswithoutinvolvingfurtherredtape.lowedbyapriceadjustment,basedontheactualtrend
foreachproduct.
4.1.3.Cultivationoftheproductsdiscussedbelowis
extremelylabour-intensive .Thereisthusanobvious
linkbetweenthefarmincomegeneratedbytheirculti­
vationanditsdistributionbetweenthevariouscategori­
esofemployment .Employmentisthereforeakeyfactor
inthepricepolicyandcommonmarketorganization
fortheseproducts.3.5.Sheepmeat
3.5.1.TheCommitteenotesthatinadditiontothe
decisionstakeninthereform,theCommissionproposes
retainingthepricesofthepreviousmarketingyear.
4.2.Rice
3.6.Pigmeat
3.6.1.Althoughthissectorisnotdirectlycoveredby
thereform,itsheavydependenceoncerealsprovides
reasonforconsideringpigmeatamongtheproducts
affectedbythereform.
3.6.2.TheCommissionproposesa25%cutinthe
basicprice—toECU1450pertonne—toreflectthe
expectedreductioninmarketpricesforcerealsin1993/
1994andthecorrespondingdropinfodderprices.The
Committeeconsidersthatthiscutisexcessiveandcould
haveadverseeffectsonthesector.
3.7.Oilseedsandproteincrops4.2.1.TheCommissionproposesdifferentbuying-in
pricesforthetwovarieties(94%oftheintervention
priceinthecaseofindica,and90%forjaponica).
Theupdatingofcertaincomponents ,suchastransport
costs,entailsaslightdropinthetargetprice.The
Commissionalsoproposestoreduceaidtoencourage
growerstoswitchfromjaponicatoindicarice.
4.2.2.TheCommitteerecommends :
—thatthebuying-inpriceofjaponicabekeptat94%
oftheinterventionprice,
—thatthepremiumforgrowerswhoswitchtoindica
bekeptatitspresentlevel,toavoidjeopardizing
thedrivetosteerproductiontowardsthevarieties
ingreatestmarketdemand.
4.2.3.TheCommitteealsofavourstheestablishment
ofnationalquotas,inhectares,forareasunderrice,in
ordertopreventapossibleincreaseintheseareas.
4.2.3.1.However,indeterminingthequotasfull
accountwillneedtobetakenofhistoricalfactors,
traditionandparticularregionalcircumstances .
4.2.3.2.SuchamechanismwouldimprovetheCom­
munity'snegotiatingplatformatGATT,aswellas
puttingalidonEAGGF-Guarantee expenditure .3.7.1.TheCAPreformaddressedthemaincom­
ponentsofthismarketorganizationandnofurther
proposalsarebeingmade.
3.7.2.IntheCommittee'sview,theCommissionhas
letslipagoodopportunitytopresentaninitialassess­
mentofthereformofthesectorafteroneyear's
implementation .
4.SectorsnotcoveredbytheCAPreform
4.3.Sugar
4.3.1.TheCommitteenotesthatpendingthemarket
reform,theCommissionproposesapricefreeze.4.1.Pendingfurtherproposalsonthereformofthe
keysectorsofwine,sugar,andfruitandvegetables,
andwiththeexceptionofafewproductsforwhichit
proposesslightcuts,theCommissionproposesprice
freezes.
4.1.1.TheCommitteenotesthattheproductsnot
coveredbythereformcouldbeatadisadvantage
againstthereformproducts,inthattheyriskfurther
pricecutswithoutenjoyinganyalternativecompen­
sationintheeventofaGATTagreementbasedonthe
Dunkelproposal.
4.1.2.ForMediterranean productsinparticular,the
Committeetruststhatthe1992pricecutswillbefol­4.4.Oliveoil
4.4.1.TheCommitteeviewswithconcernthesignifi­
cantpricereductionsthatoccurredin1992,andcalls
forasmallincreaseinthetargetprice.Ittruststhatthe

NoC129/28 OfficialJournaloftheEuropeanCommunities 10.5.93
4.10.Rawmaterialsofagriculturaloriginandlinseed Commissionwillpressonwiththeshiftfromconsump­
tionaidtoproductionaid,inordertocontainthe
productioncostsbornebyolivegrowers.
4.4.1.1.TheCommitteepointsoutthatintervention
isaguaranteemechanismandthatitisthereforenecess­
arytofollowthemarkettoensurethatintervention
istimelyandeffective.Consequently ,itcallsforthe
extensionoftheperiodofintervention,tostartinApril.
4.4.1.2.Thiswouldensurethesurvivalofolive­
growinginmanydisadvantagedandmarginalareasof
theCommunity ,thusalsosavingjobsandprotecting
theenvironment .4.10.1.IntheCommittee'sview,moreviable
arrangementsareneededforgrowingagriculturalcom­
moditiesonset-asideland.Forexample,growersshould
alsoreceivepremiumswhentheycanshowthatthe
rawmaterialsharvestedareusedonthefarmfornon­
foodpurposesoraresoldsolelyfortheproductionof
energyorheatfrombiomass.Inshort,thecontribution
ofagriculturalcommoditiestoC02reductionsshould
beconsideredwithinanenvironmental perspective.
ThisisasectorinwhichtheCommunityishitherto
notboundbyGATTnegotiations .TheCommittee
favoursareviewofthecutinsubsidies.
4.10.1.1.Linseedhasconsiderablepotentialineco­
logicalterms.Italsooffersfarmersafuturealternative
rawmaterial.4.5.Driedfodder
4.5.1.TheCommitteebroadlyendorsestheCom­
missionproposals .
5.Financialimplications
5.1.ThefinancialestimatesputforwardbytheCom­
missionaretabulatedbelow:
(inmillionECU)4.6.Textilefibres
4.6.1.TheCommittee,havingconsideredtheCom­
mission'sobservationsconcerningcotton,findsthatthe
measureincreasingthemaximumreductionintheguide
pricefrom15%to20%isunjustifiablysevere,asis
theincrease(from5%to7%)inthelimitonthe
reductionwhichmaybecarriedforward.
4.6.1.1.CottonisaproductforwhichtheEChasa
cleardeficit.Itsproductionshouldbesafeguardedas
itprovidesemploymentforasubstantialnumberof
Communityfarmers;significantsavingsofCommunity
resourcesonthisproductalonearenotjustified.a)sumneeded1993 34052
b)additionalsumneeded 961
c)priceproposals 78
d)TOTAL 35091
e)Agriculturalguideline 36657
f)(e—d)newmargin 1566
g)monetaryre-alignment 150
h)(f—g)actualmargin 14164.7.Silkworms
4.7.1.TheCommitteeproposesincreasingaidper
boxofsilkwormeggs.
5.2.TheCommissionconsidersthattheECU1416
millionmarginissufficienttomanageagriculturalpol­
icyin1993.Thisassumesnofurtherdevaluationsof
non-EMScurrencies,andmoreespeciallythatthedollar
remainsatECU0,79.4.8.Wine,fruitandvegetables
4.8.1.Pendingtheproposalsonreformofthemarket
organizationinthesetwosectors,whichtheCom­
missionisduetopresentbytheendofJune,the
Committeecallsforapriceadjustmentasoutlinedin
Point4.1.2.5.3.Concernarisesfor1994.Theagriculturalguide­
lineforecastsacostofECU36700million,plusECU
1550millioninmonetarycosts;ECU1000millionof
thelatteraretobemetfromthemonetaryreserve.
5.3.1.AsregardstheremainingECU550million,the
Committeeconsidersthatthebalanceneededtocover
anylossescausedbymonetaryrealignmentsshouldnot4.9.Seeds
4.9.1.TheCommitteebroadlyendorsestheCom­
missionproposals.

10.5.93 OfficialJournaloftheEuropeanCommunities NoC129/29
bechargedtotheEAGGFbudget,assuchcostsaretruststhattheywillbemetfromotherECbudget
non-agricultural innature.TheCommitteethereforechapters.
DoneatBrussels,24March1993.
TheChairman
oftheEconomicandSocialCommittee
SusanncTIEMANN
APPENDIX
totheOpinionoftheEconomicandSocialCommittee
Thefollowingamendments,draftedonthebasisoftheSectionOpinionandtabledinaccordancewiththe
RulesofProcedure,weredefeatedinthecourseofthedebate:
Point1.5.1
Deletethefirsttwosentences('Asregardstherelation...riseintheconsumerprice.');
Addthefollowingattheendoftheparagraph:
'Asalreadyoccursinmanycasesthankstothedevelopmentofagriculturalcooperatives,thoughtshouldbe
giventowaysofhelpingfarmerstoreceivealargershareoftheaddedvaluecreatedbytheprocessingand
marketingoffarmproducts.Apolicytoimproveprocessingandmarketingstructurescouldcontributeto
this.Inthiscontext,accountmustbetakenofECcompetitionrules.'
Reasons
ItbecameapparentduringStudyGroupandSectiondiscussionsthattheproblemof'asymmetricalrelations'
betweenfarm-gatepricesandconsumerpricesforoneandthesameproductvariesbetweenMemberStates.
Point1.5.1thereforeseriouslyoversimplifiesthesituation.Sincethepurposeofthecommentistoincrease
thefarmer'sshareoftheconsumerprice,itmakesmoresensetofocusonthataspect.
Iffarmerscanbegrantedalargershareoftheconsumerpricewithoutupsettingcompetitionrules,itshould
beeasiertointroduceareformedCAPaimedatmarketbalance.
Voting
For:38,against:63,abstentions :5.
Point2.1
Addthefollowing:
'Thepriceproposalsforthe1993/1994farmyearwillincreaseexpenditureontheadministration oftheCAP
byover12%.Inthelightofthepoorgeneraleconomicsituationoutlinedabove,theCommitteeasksthe
Commissiontodoallitcantoparedownthisincrease.'

NoC129/30 OfficialJournaloftheEuropeanCommunities 10.5.93
Reason
AnOpiniononagriculturalpolicycannotoverlooktrendsinthecostofitsadministration .
Voting
For:55,against:65,abstentions :6.
Point2.1.1
Rewordasfollows:
'AstheCommitteenotedinitsOpinionontheDevelopmentandFutureoftheCAP,theimmediatereason
forthereformlayintheCommunity's'deficitspending'situation,anditwasalsotofacilitateaGATT
agreement.Theultimateaimoftheproposedreformwasnaturallytoseekanewandimprovedbalanceon
theagriculturalmarkets.Thenewsystemwastoofferfarmersadifferenttypeofincomeguaranteefrom
thatprovidedundertheoldpolicysystem.'
Reason
Itiswrongtosuggestacontrastbetweenapolicyaimedatreducingagriculturalsupportspendingandthe
restorationofmarketbalance.Theyaretwosidesofthesamecoin.
Voting
For:30,against:44,abstentions:5.
Point3.2.2
Delete
Reason
TheCommissionproposestoadjustthestoragecostsforcerealsinthelightofchangedcircumstances .A
cutofbetween20%and25%ininterventionpricesalsomeanslowerfinancialcostsforstorage.The
referencetofarmincomeshouldfocusontheinterventionpriceitself,andnotontheadministrative
arrangementsforstoragecosts.
Voting
For:34,against:59,abstentions :4.
Point3.8
Addanewpoint3.8:
Tobacco
'Thereformofthetobaccoregimewassupposedtoreducetobaccosubsidies,inthefirststagebyeliminating
subsidiesonvarietiesforwhichthereisnomarket.TheCommitteeisconcernedtherefore,thattobacco
subsidiesarebeingincreasedbyafurther9%(ECU134,000,000)andaskstheCommissiontoreviewthis
increase.'
Voting
For:40,against:62,abstentions:8.
Point4.3.2
Addanewpoint4.3.2:
'Pendingreformthereshouldbea(say)5%pricereductionasaninterimmeasure.'
Reasons
ApartfromsubsidiesforACPsugar,thesugarregimeis'selffinancingwhichisEurospeakfor'itisfinanced
entirelybyconsumerprices'.Asthereisnochargeonitsbudget,theCommissionhasbeenslowtoreform
thisandsupportforsugarisnowoutoftimewiththatoncerealsandoilseedswhichcompeteforthesame
land.Correctiveactionthereforeisurgent.

10.5.93 OfficialJournaloftheEuropeanCommunities NoC129/31
Voting
For:33,against:59,abstentions:7.
Point5.3.1
Rewordasfollows:
'TheCommitteenoteswithconcernthehighcosttotheEAGGFbudgetresultingfromtheCouncil'sDecision
inDecembertomaintaintheswitchovermechanismforafurthertwoyears.ItisestimatedbytheCommission
thatthiscouldalreadyincreasespendingbyECU1,6billion,inexcessofthemonetaryreserve,andfurther
realignmentswillincreasethisfigure.TheCommitteeconsidersthatswitchovershouldberemovedatthe
earliestopportunity.'
Reasons
Retainingtheswitchoverisinfactoneofthemainreasonsfortheenormousincreaseinthecostofthis
package.
Theswitchoverisalsoacontinuedinflationarythreattofoodprices.Forinstanceofthe23%riseinUK
farmprices(sofaronlypartlyreflectedinretailprices)about15%isduetothedevaluationofthepound
whilemuchoftherestisduetothismechanism .
Voting
For:49,against:57,abstentions :10.
OpiniononRelationsbetweentheEuropeanCommunityandtheBalticStates
(93/C129/10)
On7February1992theEconomicandSocialCommitteedecided,inaccordancewiththe
fourthparagraphofArticle20ofitsRulesofProcedure,todrawupanOpiniononEC
RelationswiththeBalticStates.
TheSectionforExternalRelations,TradeandDevelopmentPolicywhichwasresponsible
forpreparingtheCommittee'sworkonthissubject,adopteditsOpinionon11March1993.
TheRapporteurwasMrPetersen.
Atits304thPlenarySession(meetingof25March1993),theEconomicandSocialCommittee
adoptedthefollowingOpinion,withnovotesagainstandtwoabstentions .
turiiigandrenewalprocessesintheBalticStates,with
particularreferencetofurtherconsolidationoftheir
political,economicandsocialrelationswiththeEuro­
peanCommunity .TheCommittee'sobservationsare
forthemostpartbasedontheinformationavailablein
early1993.PreliminaryRemark
TheEconomicandSocialCommitteehasconsidered
thequestionofreformprocessesincentralandeastern
Europeonanumberofoccasionsinthelastfewyears.
Itsmostrecent,detailedassessmentwassetoutinthe
twoAdditionalOpinionsontheEuropeAgreements
withPoland,Hungary,theformerCzechandSlovak
FederalRepublicandBulgariaandRomania(!).The
presentOwn-initiative Opinionexaminestherestruc­Summary
AlthoughtherelativelysmalleconomiesofEstonia,
LatviaandLithuaniadonothavethemarketpotential
ofmostoftheformerSovietRepublics,theyplayan
importantrole,particularlyinviewoftheirgeographi­
calposition,asabridgebetweenEastandWest(1.1).(*)OJNoC339,31.12.1991,p.44etseq.andOJNoC19,
25.1.1993,p.74etseq.TheCommitteealsorefersinthis
contexttoitsOpiniononeconomicandsocialorganizations
inthecountriesofcentralandeasternEurope—consultative
mechanisms (OJNoC19,25.1.1993,p.114etseq.).