ARCHIVESHISTORIQUES
DELACOMMISSION
COLLECTION RELIEEDES
DOCUMENTS "COM"
COM(80)66
Vol.1980/0024

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COMMISSION OFTHEEUROPEAN COMMUNITIES
COM(80)66 final
Brussels /22nd February 1980
a v;L^
I-"- ••V fojΒ ,'&Ν-:\*y£7e\ \ \ v*V? ACviYs*x^xx
COMMISSION REPORT TOTHE COUNCIL
ONTHE SITUATION INTHE COMMUNITY COLZA MARKET
COM (80)66final/

COMMISSION REPORT onthe situation inthe Community colza market -
1»Introduction
Within theframework ofthe price decisions for1979 /80,the following declaration
•was entered intheMinutes ofthe Council meeting of18-22 June 1979 : .
The Council
1.takes note ofthe Commission statement that inaccordance with the undertaking
entered into in1978 itwill
-continue diligently itsexamination oftheuse ofvarieties ofcolza seed of
the "00"type - ; .
-submit areport onthis subject tothe Council before 31December 1979 ,com--
bined ,ifitproves necessary inthe light ofexperience ,with aproposal
laying down themeasures tobeapplied ;
2.invites the "Commi ssion topropose before 1October 1979 ,appropriate^measures
toimprove thesituation ofthe Community market incolza seed and colza oil so
that regular outlets may beensured for theproducts obtained pending the neces­
sary resumption ofinternal consumption inthe Community ."
2.Economic situation inthe colza sector
Itisworth recalling the significant features ofthe Community colza sector .
Theacreage devoted tocolna has averaged some 500 000 hasince 1973 ,with only
small variations from this norm (seeTable I).However ,this total comprises a
decrease inacreage between 1974 and 1978 inall theoriginal Member States except
Germany ,atripling ofthe United Kingdom area and anincrease inthe Danish area .
Production hasfluctuated more than area ,from 938000 tto1,230 mio t,due to
variable climate conditions andyields .Theprincipal producer Member States ,in
decreasing order ofimportance ,areFrance ,Germany ,theUnited Kingdom andDenmark ,.
The seed isprocessed inthe first three Member States mentioged ,with almost the
entire Danish crop being processed inGermany .
Imports have varied from year toyear ;having fallen since 1973 following the -anti -"
erucic 0campaign ,they have increased^over thepast three years (Table IIand ;III)
reflecting arenewed demand forcolza' intheCommunity .In1978 /79imports reached
-419 000 t.
Thefigures available for1979 /80,moreover ,show that this trend towards increased
demand iscontinuing .The Community also imports some 250 000 tofcolza meal an-.
nually . - .
Itistherefore clear that theCommunity isnot self-^ui.f icient incolza seed .More­
over theoilextracted from colza only represents approximately 11%ofannual Com­
munity consumption ofvegetable oils ,whereas themeal constitutes amere4%of

ί.
-2-
Community requirements ofprotein q--ilmeal a n
Thebasic elements ofthe support system for colza arethe following .
Oilmills buy colza seed from Community producers ataprice which isatleast equal
tothe intervention price .They then receive asubsidy which isequal tothe dif-fe -
^rence between thetarget price andtheworld market price forthis seed .Thesubsidy
brings thecost totheoilmill ofCommunity seed down toworld market price levels ,
/
sothat theoil andmeal produced from seed ofCommunity origin arecompetitive
with those^supplied bythird countries ,which are imported into the Community with
little ornoimport duty payable .
3.Review ofthe system -
Having carried outathorough examination of^thecblza market ,incollaboration with
\theMember States ,the Commission hasconcluded that the common organization ofthe
market forcolza works efficiently ,and inthe interests oftheproducer ,the cru­
shing .industry ,and the consumer . <
*
i>The support system for colza and rapeseed haspermitted the sale each year of ,
thequantity produced ,without difficulty ;insupport ofthis conclusion it
„should benoted that sales into intervention represent only aminimal part of
the crop ,never having exceeded 1,%ofthetotal produced (seeTable IV).
ii)Inspite ofthefact that oilmills have afree choice between oilseeds ofCom-r
munity origin and imports ,the operation ofCommunity preference has always
provided industry with sufficient incentive to'buy all thecolza produced in
the Community .
iii)The cost tothe EAG6F hasnever been excessive (Table V),particularly when
compared tothecost ofsupport forother products which compete with colza
forthesoil,^which areinsurplus andwhich ,unlike colza seed ,have to
beexported atgreat expense . •
iv)Except during theperiod when thecampaign against erucic acid was atitspeak ,.
the sale oftheoilproduced from Community colza seed hastaken place without
difficulty ,andthere iias been noabnormal build-up ofstocks .Thesale of
colza meal hasnever presented the least problem .
Forthese reasons the Comnission concludes that there isnoreason tojustify any
major changes totheexisting support system forcolza .However ,some minor amend­
ments might beappropriate . '

-3-
Commission position
4.The Commission isaware that the Italian oilseed crushing industry isunable to
purchase sizeable quantities ofcolza seed ofCommunity origin .Thereason for
this ,isthat onthe one hand ,Italian production ofcolza seed isminimal ,and .
ontheother ,the Italian oilseed crushing industry issituated farfrom thepro­
duction zones inthe Community . ". "
Inorder topermit the Italian crushing industry toadapt tothe new situation crea
ted bythecommon organization ofthemarket ,given itsdistance from Community
•colza-producing zones ,atemporary aid wasgranted tothe industry inquestion
from 1967 ,tocompensate for transport costs .This aid was proposed for three
yeans ,but remained inforce until 1974 .Itseffect was tocreate ademand for
colza seed inItaly .Since itsabolition ,very little colza seed ofCommunity
origin hasbeen purchased in -Italy ,and Italian demand for colza oil has decreased
«
over the same period .
The Italian government has called ,onmany occasions ,for the reintroduction ofa
transport aid forCommunity colza seed bought bytheItalian crushing industry .
•i
The Commission isnotprepared totake any action atall concerning this request .
Such ameasure would ,becontrary totheprincipale offree movement ofgoods in
natural conditions ofprice formation .Itwould create anartificial demand for
colza seed inItaly andconsequently risk disturbing themarket for this product .
.The Commission considers that'a logical i«/aytoensure theavailability ofoilseeds
ofCommunity origin tothe Italian crushing industry could Lie intheproduction
ofsunflower seed .. v
The Community produces annually between 120-000 tand220 000 tofsunflower seed .
This production isconcentrated inFrance andItaly ,andhasalways been sold
without anyproblem .Imports ofthis seed into the Community' rarely exceeded
250000 tannually prior to1976 .Since that year ,however ,they have increased
remarkably andmay reach amio tfor1979 .

InItaly/importshaveincreased from1000tin1976to
16000in1977and90000tin1978.
Production intheCommunity hasnotincreasedconcurrently withdemandbecausethe
pricerelationship betweensunflower seed,ontheonehand,andothercropswhich
competeforthesoil-particularly maize–ontheother,hasnotbeenwelt-balanced
andhascausedsunflowerproduction tobeneglected.
Ifthispricerelationship wereadjusted,anincreasecouldbeexpectedinsunflower
seedproduction in.Italy.Inthatcase,theItalianindustry,becauseofitsgeogra­
phicallocation,wouldbeadvantageously situatedtopurchasethisseed.
Severalotherquestions havebeenraisedbyMemberStatesconcerning problemswhich,
arespecifictothesecountries.Thefirstquestionconcernsthevarietiesofcolza
knownasdouble-00"tlowinerucicacidandinglucosinolates )whicharementionedin
thedeclaration underpoint1above. '"
Inaccordance withthatengagement,theCommission haspursuedtostudyofthediffe­
rentaspectsofthedouble-00Varitiesofcolzainordertoevaluatetheirinterest
fortheCommunity andtoascertainwhetherCommunitymeasurestopromotetheirpro­
ductionwouldappeartobeappropriate .
Theconclusion oftheCommission isthatthenewvarietiesofcolzainquestionre­
presentamarkedimprovement comparedtothosenormallyused,inviewofthequality
ofcolzamealwhichtheyyield.Itappearsthereforetobeintheinterestsofthe
Communitythatthissource,ofhigh-quality proteinforanimalfeedshoulddevelop.
However,certainproblemshaveinhibitedthewidespread useofdouble-00colza.The
foajor'drawbackisthatsofardouble-00varietiesexistonlyforspringcolza.
Springcolzarepresentsonly13%ofCommunityproduction,andsisprimarily'produ­
cedinDenmark,souseofdouble-00 seediseffectively limitedtothatcountry.
Moreover,yieldsarestilllowerthanfortheconventional varieties;andinspite
ofitshighernutritional value,animalfeedstuffs manufacturers arerotyetprepared
topayapremiumfordouble-0(^colzameal.Producersarenot-thereforeencouraged
toexpandthisproduction. - ..
Initsmemorandum totheCouncilonthissubject,theDanishGovernment proposedthat
an_additional subsidybepaidfordouble-00colza,to~prbm6t-e-4t-sdevelopment.
TheCommission doesnotfavourthissolution,bothbecauseoftheproblemsofcon­
trolwhichitwouldraise,andbecauseof'theexpenditure whichwouldbeincurred
whenuseofdouble-00se6dprevailedthroughout -theCommunity.Moreover,theCommis­
sionisnotconvincedthatfurther'expansionoftheareadevoted'tospringcolza
islikelyinDenmark.

-5-
However,therCommissionwouldbepreparedtoConsiderproposingaspecialtemporary
premiumatintervention fordouble-00seed,forperhapsthreeyears.^ ,
Thiswouldgivetheproducerswhoused,double-00seedthepossibilitytoclaima-'
higherpricefortheirproduct.Itwouldpresentnomajorproblemregardingcontrol.
Itshouldnotgiverisetoadditionalexpenditure from,theEAGGF.Inviewofthe
Communitypreferencecomprisedinthesubsidysystem,theCommissiondoesnotbelieve
thatsuchameasurewouldincreasethequantitiespresentedtointervention .1~
However,inordertoavoidanysuchrisk,theCommissioncouldstudythepossibility
ofwideningthe.gapbetweenthebasicintervention priceandthetargetprice,by...
:increasingthelatter,by.agreaterpercentagethantheformer-which,indicentally ,
wouldcontributetogreatermarketfluidityinthissector.
■Asmentionedabove,double-00varietiesonlyexistsforspringcolza,butresearch
isbeingcarriedouttodevelopdouble-00winterseed.TheCommissionispreparedto
proposedthatagreaterfinancialcontribution bemadetothisresearchbytheCommu­
nity.ThiscouldBedonethroughthevegetableproteinprogrammeprovidedforin
theDecisionofthe.Councilof30October1978,oncommonprogrammes andcoordinated
programmesforagricultural research.
« '•
6.ThenextproblemexistsmainlyinFranceandconcernsalimitednumberofsmallcru-.
..shingplantswhicharesituatedfarfromsourcesofimportedseedsandaretherefore
obligedtocrushonlycolzaseedofCommunityorigin.Whencrushingmarginsforcolza
areunfavourable overaprolongedperiodsuchplantsareforcedtooperateataloss,
orclosedown,sincetheyhavenotthepossibility touseeitherimportedcolzaseed
oranyotherrawmaterial. ,
WhiletheCommissiondoesnotbelievethatth£roleofthesupportsystemforoil­
seedsistoguaranteetheprofitmarginsoftherelatedindustry,itdoesrecognise
thevulnerability ofthesmallundertakings inquestion.Anappropriatesolution
couldlieintheamendmentofthelegislationinordertopermitthatifandwhen
crushingmarginswerenegativeoveraprolongedperiod,thesubsidyofthedaycould
beadjustedtoensurethatitwassufficienttocoverthecostofcrushingtheseed.
Thisadjustmentwouldnotapplytosubsidiesfixedinadvance.Itsbenefitwould
thereforebelargelylimitedtothesmall,unfavourably -situatedundertakings men­
tionedabove,:sincelargerplantstendtofixthesubsidyinadvanceandrarely
usethedailyrate.Normally,onlyabout5%oftheharvestiscrushedwiththedaily
rateofsubsidy,andtheexceptional measureoutlinedabovewouldappearunlikely
toprovokeanysignificantincreaseinthisquantity*
Inordertoavoidimpedingthenormalprocessofintegration whichistakirtgplace
"intheoiIseedcrushingindustry,itwouldappearappropriatetolimitquchamea­
suretoaperiodof,say,threeyears. -

-6-
Apartfromthepossibility ofprovidingfortheadjustment described above/the
Commission doesnot-consideritappropriate topursuethesuggestions madeinthe
FrenchNoteiJiiCh wastransmitted totheCommission on18September 1978.Themain
requestisfortheintroduction ofasystemofintervention forcolzaoilwhenthe
FrenchNotewasexaminedinCouncilbodiesitbecameapparentthatsuchasystem
wasnotnecessarytoensuretheproperfunctioning ofthecommonorganisation of
themarketincolzaseed.Norissuchasystemdesirable,because,beinginaddition
tointervention forcolzaseed,theprincipleofadoubleguaranteeforthesame
sectorwouldbeintroduced,and,byensuring aprofitable marginfortheindustry
crushingCommunity seed,adistortion wouldbepromotedbetweenthisindustryand
thatcrushingimportedseeds.
7.Thelastproblemrelatestothememorandum submittedrecentlybythe-BritishGovern­
mentconcerning theenterprises whichuseanewprocesstopreparecolzafordirect
incorporation inanimalfeedingstuffs .Suchuseisnotcoveredbythecurrentsupport
system. "v
Inviewof/thefactthattheCommunityisanetimporterofcolzaseed,itisclear
thatproducers haveadequateoutletsfortheirproduction.Furthermore,theCommissic
isdubiousabouttheeconomicLisdomofaprocesswhichusesforanimalfeedahigh
qualityoilsuchascolzaoil.Finally,fromanadministrative pointofview,-the
controlofthisutilisation wouldposeconsiderable problems.Forthesereasons,
theCommission doesnotconsideritappropriate toproposeachangeinthesystem
onthelinessuggestedintheBritishmemorandum.
i

TABLEI:Colzaseedproduction intheCommunity
'000Tonnes
1.058,3
1.090,0
937,9
*1.022,8
953,1
1.230,0
TABLEII:Colzaseedimportsandexports000t
Imports Exports ,
1973/74 386 47
1974/75 167 220
1975/76 150- 59
1976/77; 399 46-
.1977/78 207 3 ..'
1978/79 419f • 3
Source~EUR0STAT
..• ........<1>.TABLEIII:ColzaseedcrushedintheCommunity t
Communityorigin Imports ,Total
1973/74964,493 361,445 1,325,938
1974/75'810,212* •.163,141*973,353
1975/76.832,380* 143,989*. •976,369
1976/77899,906 '361,275 1,261,181
1977/78841,546 215,345 1,056,891
1978/791,180,503 329,936 1,510,439
.(1)BasedonfiguresfurnishedbyMemberStatesforquantities
putundercontrolatoilmills
SourceD6VI
*.Figuresuncertain,asabsenceofsubsidyimpliedlesscontrol*000Hectares
1973/74 516,4
1974/75 539,0'
1975/76 489,6
1976/77 497,9
1977/78 495,8'
1978/79 513,1
Source-EUROSTAT

y.
TABLE IV :Quantities ofcolza seed bought into intervention
tonnes
1973 /74 0"
1974 /75 0
1975 /76 4.830
1976 /77 7.726
1977 /78 2.083
1978 /79 1.260
Source DGVI-Commission
TABLE V:EAGGF(1)Expenditure oncolza and sunflower seed
1973
1974
1975
1976
1977
1978Expenditure oncolza
and sunflower seed
79,0 MUCE
10/4MUCE
28/9MUCE .
103/1MUCE
82/6MUCE
131/2MUCEColza and sunflower seed
expenditure asaproportion
oftotal EAGGF expenditure
2/3%
0/4X
_ 0/6%
1/7%
1/2%
1/5%
Source -OGVI-Commissiort
(1)There isnobreakdown on (expenditure between these twoseeds /but
approximately )90%ofthetotal Refers tocolza seed .