No C 115/22 Official  Journal  of the European  Communities 28. 9. 74 
Opinion  on the Communication  from  the Commission  to the Council  on improvement 
of the  common  agricultural  policy 
The text  on which  the Opinion  is based  has  not been  published  in the Official  Journal 
of the European  Communities. 
A. LEGAL  BASIS  FOR  THE  OPINION 
At its 115th  plenary  session  held  on 28 and  29 November  1973  the Committee,  acting 
on a proposal  from  the Bureau,  decided  to deliver  an opinion  on the abovementioned 
subject  on its own  initiative. 
B. OPINION  OF  THE  ECONOMIC  AND  SOCIAL  COMMITTEE 
The Economic  and  Social  Committee  prepared  its Opinion  on the above  matter  at its 
118th  plenary  session,  held  in Brussels  on 27 and  28 January  1974. 
The full  text  of the Opinion  is as follows: 
THE  ECONOMIC  AND  SOCIAL  COMMITTEE: 
Having  regard  to the Decision  taken  on 27 November 
1973  at its plenary  session  on a proposal  from  its 
Bureau,  entrusting  the  Section  for  Agriculture  with 
the preparation  of an opinion  to be delivered  by the 
Committee,  at its own  initiative,  on the Commission 
memorandum  to the  Council  on improvement  of 
the common  agricultural  policy; 
Having  regard  to the Decision  taken  by its Bureau  on 
25 June  1973,  entrusting  the Section  for Agriculture 
with  the  preparation  of a study  on the  progress 
report  on the common  agricultural  policy; 
Having  regard  to the agricultural  reports  and  studies 
compiled  by the Economic  and  Social  Committee; 
Having  regard  to the  Opinion  of the  Section  for 
Agriculture  at its meetings  on 10 and  21 January 
1974  and  the  oral  report  made  by the  Rapporteur, 
Mr Bourel; 
Having  regard  to the  discussions  at its meeting  on 
27 February  during  the  plenary  session  of 27 and 
28 February  1974; 
Has adopted,  with  3 votes  against  and  10 abstentions THE  FOLLOWING  OPINION: 
Introduction 
1. The  Committee  has  studied  with  great  interest 
the Commission  memorandum  to the  Council  of 
Ministers  entitled  'Improvement  of the  common 
agricultural  policy'.  The  Committee  is aware  that 
the memorandum  gives  the Commission's  own  views 
on the changes  to be made  to various  aspects  of the 
CAP,  and  is not intended  to be a detailed  blueprint 
setting  out  practical  measures  for  immediate  imple-
mentation.  The  Committee  will  therefore  not  give 
detailed  consideration  to the  agricultural  prices  for 
the 1974/75  marketing  year,  reforms  to be made  in 
market  organization  or structural  policy  until  it has 
been  consulted  on the ensuing  proposals,  which  will 
deal mainly  with  these  aspects. 
2. The  Committee  nevertheless  considers  that  it 
should  make  some  general  comments  on the  ideas 
set out in the memorandum.  It has therefore  decided 
to take  a stand  on this  memorandum  now,  in an 
opinion.  The  Committee  would  stress  that  the views 
expressed  in the  present  Opinion  will  have  to be 
very extensively  amplified  when  the  Committee  is 
asked  to deliver  an opinion  on the  proposals  which 
follow  on from  the memorandum. 
28. 9. 74 Official  Journal  of the European  Communities No C 115/23 
3. The  Committee  is concurrently  drawing  up  a 
study  dealing  with  the  progress  report  on the  CAP 
and with  the  1973  report  on  agriculture  in the 
enlarged  Community. be maintained.  It is not  to be regarded  as merely 
based  on a situation  which  no longer  exists.  We  can 
reasonably  ask  whether  the  past  failure  to extend 
this solidarity  to other  sectors  of economic  and  social 
activity  is not to be deplored. 
The Committee's  Opinion  and  study  on the  separate 
— but  interrelated  — documents  submitted  to the 
Council  by the  Commission  will,  as a result,  be at 
the disposal  of these  two  institutions  at a time  when 
they are  preparing  the  important  Decisions  to be 
taken  in April  1974  on  agricultural  prices,  the 
functioning  of the  market  organizations  and  struc-
tural  policy. 
The common  agricultural  policy  and  the  building 
of Europe 
4. The  Committee,  considering  as it does  that  the 
vital  role  played  by the  CAP  in the  process  of EEC 
political  integration  must  be kept  in mind,  wishes  to 
lay particular  emphasis  on  the  general  political 
importance  of this  policy.  The  Committee  is alive  to 
the imperfections  of the  European  edifice  and  the 
difficulties  hampering  the Community's  endeavours  to 
achieve  smooth  progress  in the  various  fields  of 
economic,  political  and  social  activity.  But  it never-
theless  feels  that  the  very  existence  of the  CAP  and 
the rules  for  its application  has  been,  and  continues 
to be an extremely  important  force  for  integration. 
This,  despite  the  fact  that  some  of the  rules  may  be 
open  to criticism. 
5. In view  of the political  equilibrium  of the Member 
States  and  their  respective  economic  situations,  it is 
therefore  fair  to say  that  the  existence  of the  CAP 
enabled  faster  progress  towards  a customs  union  for 
industrial  products. 
Similarly,  it was  thanks  to the  formulation  of the 
CAP  and  the  initial  steps  to implement  this  policy 
that the  Member  States  were  able  to issue  a single 
negotiating  brief  for  the Kennedy  Round  — the  first 
time  in the  history  of the  Community  that  this  had 
been  done  for  international  negotiations  — and  thus 
agree  that  on that  occasion,  again  for  the  first  time, 
the Community  would  speak  with  a single  voice. 
Likewise,  the  Committee  considers  that  the  fact  that 
the principle  of financial  solidarity  has  been  adopted, 
and adhered  to despite  all vicissitudes,  is very  impor-
tant politically  for  the  development  of the  European 
Community.  This  is why  the financial  solidarity  must 6. At  a time  when  the  whole  case  for  a common 
agricultural  policy  progressively  replacing  national 
policies  is being  questioned  in a number  of quarters, 
the Committee  stresses  the  need  to pursue  the  grand 
design  sketched  by  the  Treaty  of Rome,  namely 
integration  of a modern  agriculture  in a modern 
economy  at EEC  level.  In addition,  the  political 
process  of European  integration  would  doubtless  have 
made  still  less  progress  without  the  crucial  role 
played  by the agricultural  policy. 
This  stand  does  not  prevent  the  Committee  making, 
as in the  past,  a critical  assessment  of the  various 
economic,  social  or even  technical  aspects  of the 
agricultural  policy  pursued.  However,  the Committee 
considers  it important  to point  out  that  this  critical 
assessment  must  always  be seen  against  the  back-
ground  of its unquestionably  favourable  attitude  to 
the policy  as a whole. 
General  observations  on the  'Progress'  Section 
7. The  memorandum  devotes  a number  of pages  to 
a progress  report  on the  CAP.  The  Committee  feels 
that this  calls  for a number  of comments. 
First  and  foremost,  it makes  the general  point  that  the 
CAP  has  in fact  been  the  only  common  policy 
accepted  by the  Member  States.  Even  supposing  that 
the CAP  had  been  provided  with  means  and  instru-
ments  capable  of satisfying  all the  interested  parties 
and all the  Member  States,  it would  certainly  have 
run into  difficulties  due  to the  lack  of comparable 
policies  in other  sectors  of economic  activity.  The 
Member  States  agreed  to a very  far-reaching  inte-
gration  of agricultural  policy,  whereas  the  other 
sectors  of the  economy  remained  almost  exclusively 
a national  responsibliliy. 
8. The  Committee  emphatically  reiterates  its view 
that any  common  agricultural  policy  will  be 
constantly  at risk  as long  as economic  and  monetary 
union  is delayed,  no real  common  transport  policy 
exists  and  decisive  progress  has  not  been  made  in 
No C 115/24 Official  Journal  of the European  Communities 28. 9. 74 
the fields  of regional  or social  policy,  or towards  the 
elimination  of technical  trade  barriers  which  is an 
important  aspect  of the  industrial  policy  as well  as 
of the common  agricultural  policy. better  mutual  flow  of information  between  the 
various  sides,  this  would  allow  the  objectives  and 
instruments  of the  CAP  to be studied  and  defined, 
particularly  in the light  of price  levels  and  quantities 
needed  to satisfy  demand. 
In this  respect,  the Committee  agrees  with  the Com-
mission's  statement  that  'it would  be wrong  to blame 
the common  agricultural  policy  for  some  of these 
deficiencies,  for which  it definitely  cannot  be held 
solely  responsible'. 
9. The  Committee  is nevertheless  fully  aware  that 
as the  Commission  itself  admits,  the  common 
agricultural  policy  implemented  since  the  establish-
ment  of the common  market  is open  to criticism  on 
certain  scores;  in addition,  the  Committee  has  not 
forgotten  that  when  the Council  of Ministers  had  to 
set the 1973/74  agricultural  prices  it came  up against 
political  difficulties  raised  — for varying  reasons  — 
by the Member  States.  In its Opinions  on agricultural 
matters,  the  Economic  and  Social  Committee  has 
called  the attention  of the Community  bodies  to the 
need  to rectify  certain  broad  policy  decisions  which 
it considered  open  to criticism. 
As has  already  been  indicated,  the  Committee 
proposes  to amplify  its critical  assessment  at a later 
date and  is merely  outlining  its views  here. 
10. In general,  farmers  find  that  the  'price'  and 
'market  organization'  components  of the  CAP  have 
had a very  different  impact  on their  incomes,  both 
as between  one  region  of the  Community  and 
another  and  as between  one  production  sector  and 
another.  Similar  differences  are also  noted  between 
different  farms  within  the  same  production  sector. 
11. As  regards  users  and  consumers  of agricultural 
products  it is clear  that  the  present  inflationary 
climate  makes  public  opinion,  and  especially  the most 
deprived  sections  of the  population  highly  sensitive 
to any  significant  increase  in the prices  of agricultural 
and food  products.  At the same  time  this  inflationary 
climate  engenders  increases  in the  prices  of means 
of production,  increases  which  farmers  feel  — with 
justification  — should  be incorporated  in the prices 
of their  products.  The  Committee  considers  it vital 
that the  CAP  be based  on a continuing  dialogue 
between  the various  socio-economic  groups  involved, 
particularly  farmers  and  consumers.  Thanks  to the 12. In addition,  it must  not  be forgotten  that  the 
CAP  has  been  sharply  criticized  by certain  people 
who consider  that  the  periodical  surplus  in certain 
agricultural  products  have  entailed  high  storage  costs 
and, in certain  cases,  have  only  been  reduced  by 
paying  export  subsidies,  to which  there  have  been 
understandable  reactions.  Similarly,  the complicated 
nature  of a certain  number  of rules  has  doubtless 
marred  the public  image  of the common  agricultural 
policy. 
13. Lastly,  the CAP  should  benefit,  and be constantly 
seen to benefit,  all socio-economic  groups  within 
Community  agriculture.  The  Committee  considers 
that a study  should  be carried  out promptly  in Liaison 
with  the  Joint  Advisory  Committee  on  Social 
Questions  arising  in Agriculture,  with  the  aim  of 
examining  the ways  and  means  of ensuring,  within 
the framework  of the CAP,  that  farmworkers  receive 
a fair  share  of the increase  in European  farm  incomes. 
The Economic  and  Social  Committee  should  be kept 
up to date  on the progress  of this  work. 
14. The  Committee  realizes  that  there  are  other 
conceivable  means  of guaranteeing  fair  incomes  to 
farmers  and  farmworkers  — for instance,  the British 
deficiency  payment  system,  the direct  production  aids 
already  granted  in certain  cases  within  the  EEC, 
direct  income  support  and  other  measures.  But,  due 
to slack  of time,  the Committee  has  been  unable  to 
state  its views  on the  Commission's  findings  as to 
more  or less  generalized,  direct  income  aids.  It plans 
to return  to this  in its progress  report  on the  CAP, 
when  it will  give  detailed  consideration  to the  pre-
requisites  of the  various  systems,  their  impact  on 
farmers'  and  farmworkers'  incomes,  in relation  to 
the situation  as regards  individual  products,  and  their 
cost for the whole  economy. 
Purpose  of the memorandum 
15. The  Committee  agrees  with  the  Commission 
that,  overall,  'improvements'  must  be made  to certain 
aspects  of the  common  agricultural  policy.  In 
28. 9. 74 Official  Journal  of the European  Communities No C 115/25 
principle,  the Section  endorses  the general  objectives 
set by the Commission  for these  improvements: 
— reduction  of the  disequilibria  on a number  of 
agricultural  markets; 
— reduction  of expenditure  under  the  Guarantee 
Section  of the EAGGF,  estimated  at 3 800 million 
units  of account  for 1973,  and partial  reorientation 
of this  expenditure; 
— simplification  of some  of the  machinery  of the 
common  organization  of markets. 
16. However,  it is essential  to make  sure  that  the 
aims  in question  are  quite  valid  and  to examine  in 
detail  the practical  measures  these  improvements  will 
involve. 
17. It should  be emphasized  that  the aim  of reducing 
expenditure  under  the Gurantee  Section  of the EAGGF 
is, of course,  a matter  of political  relations  between 
the Member  States,  and  doubtless  meets  the wishes 
of those  in charge  of the  economies  of these  States. 
The Section  points  out,  however,  that  such  a 
reduction  is not  an end  in itself  from  the point  of 
view  of the  CAP  since,  seen  from  this  angle,  the 
EAGGF  is merely  an instrument  for  implementing 
a given  agricultural  policy. 
The Committee  is aware  that  there  are  general 
economic,  political  and  social  limits  within  which 
certain  items  of Community  expenditure,  by the 
EAGGF,  should  be contained  in the interests  of all. 
Serious  political  difficulties  are bound  to ensure  in 
the Community  if these  limits  are exceeded. 
In the  context  of the  memorandum,  however, 
importance  should  be attached  not  so much  to the 
absolute  level  of feasible  savings  as to any  reorien-
tation  of agricultural  policy  which  these  savings  may 
entail,  and  to the improvements  in the administration 
of the  markets  which  will  likewise  help  to ensure 
them. agriculture.  On this  subject,  the Committee  has stated 
that: 
— it is essential  to achieve  a better  and  more  rational 
utilization  of capacities  of production  at inter-
national  level,  as part  of a concerted  drive  to 
gear world  production  to present  and  foreseeable 
demand,  whether  backed  by purchasing  power  or 
not; 
— it is therefore  essential  to consider  creating,  at 
international  leveil,  the instruments  best  calculated 
to allow  trade  to expand  in stable  world  market 
conditions. 
The Committee  feels  that  the  developments  which 
occurred  in the second  half  of 1973  are of paramount 
importance.  On the one  hand,  they  have  shown  how 
dependent  the  Community  is on external  supplies 
for various  basic  products.  On the other  hand,  they 
are bound  to entail  difficult  economic  adjustments 
because  of the  ensuing  new  constraints  — foreign 
trade  deficits,  shortage  of foreign  exchange,  upward 
movement  of world  prices  and  so on. 
19. The  Committee  thus  considers  that  radical 
changes  have  occurred  on the  international  scene 
since  the memorandum  was  drawn  up. The  proposed 
improvements  are doubtless  important.  But  the Com-
mittee  does  not consider  that  they  will  suffice  to put 
the European  Community,  in the agricultural  sphere, 
in a position  to weather  the coming  economic  diffi-
culties  and  concurrently  play  a constructive  role  at 
world  level,  particularly  in respect  of the developing 
countries.  We  can  be certain  that  the  Community 
will first  have  to make  an overall  effort  to think  out 
and define  its position,  indicate  how  it intends  to 
enable  'a concerted  drive  to gear  world  production 
to demand',  and  determine  the solutions  which  it feels 
should  be  adopted  to ensure  that  its  common 
agricultural  policy  can  concurrently  attain  the 
objectives  assigned  to it by the Treaty. 
The proposed  improvements 
18. The  Committee  considers  it necessary  to make 
two preliminary,  general  painite  in respect  of the 
'objectives',  before  commencing  on the improvements 
suggested  by the Commission. 
Firstly,  the European  Community  has  embarked  on 
multilateral  negotiations  in GATT  which  will  cover 20. In the light  of the  above  statements,  the Com-
mittee  considers  that  the  memorandum  does  not 
provide  it with  sufficient  facts  to take  a stand  on the 
'price'  aspects,  or on the organization  of the markets 
in each  of the  major  agricultural  products  covered 
by the memorandum.  The  Committee  prefers  to put 
forward  its views  on the  principles  which  will  be 
followed  in the sectoral  proposals. 
No C 115/26 Official  Journal  of the European  Communities 28. 9. 74 
21. The  Commission  states  that  it intends  to take 
action  in the  areas  of price  and  market  policy  in 
order  to attain  the  proposed  objectives.  The  memo-
randum  gives  the  impression  that  in the  final 
analysis,  the prices  of agricultural  products  are fixed 
with  reference  to three  yardsticks: 
— objective  criteria; 
— the  state  of the markets; 
— and,  of course,  an overall  policy  assessment. 
22. In its  previous  Opinions  the  Economic  and 
Social  Committee  has  repeatedly  stressed  the dangers 
of the method  used  by the Council  to fix agricultural 
prices,  a method  based  essentially  on a search  for 
a political  compromise.  Reference  to objective  criteria 
is provided  for in the Treaty  of Rome,  but  a political 
compromise  cannot,  by definition,  take  account  of 
such  criteria.  The  Committee  must  therefore  endorse 
the Commission's  assessment  that  'the  Council's 
annual  decisions  ought  Co be based  more  fully  on 
objective  criteria'.  Moreover,  it should  be possible 
for all the  social  and  occupational  groups  concerned 
to make  a joint  examination  of these  criteria,  in an 
appropriate  body. 
23. These  criteria  must  enable  anticipated  results 
to be achieved  by modern  farms:  that  is to say  farms 
which  are  able  to provide  an income  comparable  to 
that received  from  non-agricultural  work  in a given 
region,  due  allowance  being  made  for  an adequate 
return  on capital  and  trends  in prices  of means  of 
production  and  in productivity.  This,  by the  way,  is 
very  closely  bound  up with  the  structural  policy  to 
be discussed  later. 
24. "Whilst  approving  this  line,  the  Committee 
considers  that  two  fundamental  points  should  be 
made: 
(a) experience  and  financial  records  show  that  it is 
these  modern  farms  that  are  most  sensitive  to 
increases  in costs.  It is essential  that  they  remain 
efficient  and  modern.  This  will  be impossible 
without  a vigorous  overall  structural  policy  and 
a price  policy  which  is really  adapted  to farms 
of this  kind; 
(b) from  the  information  it has  been  able  to obtain, 
the Committee  has  the  impression  that,  at the moment,  only  a small  minority  of Community 
holdings  are 'modern  farms'  — as defined  by the 
Council  (see  Directive  No  72/159/EEC)  — 
capable  of profiting  fully  from  the policy  of single 
prices.  It should  be noted  that  this  kind  of infor-
mation  must  be  updated  at regular  intervals. 
Furthermore,  attention  should  also  be paid  to 
the regionail  distribution  of modern  farms. 
25. Overall,  it follows  from  the  above  that  the 
Community  must  find  solutions  for  the  problem 
posed  by the  existence  of such  a large  number  of 
holdings  which  aire  mot  'modern  farms',  and  conse-
quently  cannot  react  in an economic  way  to the 
price  policy.  This  fact  alone  shows  the  importance 
of the  structural  policy,  and  certain  elements  of this 
policy  should  be aimed  at turning  holdings  with  the 
necessary  potential  into  modern  farms.  A more 
detailed  study  of the  geographical  location  of farms 
which  cannot  be  defined  as  'modern'  would 
doubtless  yield  findings  of relevance  to agricultural 
policy.  In the view  of the Committee,  this  means  that 
the difficulties  posed  by hill  and  mountain  farming 
and by farming  in problem  areas,  for instance,  must 
be solved  mainly  by instruments  other  than  those  of 
price  policy. 
26. At  all events,  if a price  policy  and  objective 
criteria  based  on modern  farms  are to be the crucial 
factors  in the fixing  of prices,  it will  clearly  be more 
necessary  than  in the  past  to have  the  most  detailed 
possible  information  on the  way  these  modern  farms 
are run. 
The second  yardstick  urged  by the  European  Com-
mission  is the state  of the  markets.  The  Commission 
starts  from  the  idea  that  when  agricultural  prices 
are fixed,  less  weight  should  be given  to objective 
criteria  geared  to the operating  conditions  of modern 
farms  if there  are  structural  surpluses  on the  market 
for a given  agricultural  product. 
27. The  Economic  and  Social  Committee  has 
repeatedly  considered  the  question  of 'structural' 
surpluses. 
The Committee  feels  obliged  to reiterate  that  the 
concept  of structural  surpluses'  will  always  be inter-
preted  in contradictory  ways  until  general  production 
objectives  have  been  established  for  the  agricultural 
policy  of the  European  Community.  Such  objectives 
should,  of course,  allow  for  not  only  the  Com-
munity's  own  responsibilities  in the  agricultural 
sphere  and  the  state  of world  markets,  but  also 
consumer  interests. 
28.9.  74 Official  Journal  of the European  Communities No C 115/27 
28. In the absence  of such  objectives,  the European 
Community  is reduced  to introducing  improvements 
on a market-by-market  basis,  in the  light  of past 
experience. 
The Committee  is fullly  alive  to the  financiail  and 
political  problems  generated  by market  imbalances, 
and to the  need  to seek  remedies  whenever  such 
imbalances  occur.  However,  it does  not  consider 
that the  ad hoc  reduction  of imbalances  can  yield 
the guiding  principles  of future  -agricultural  policy. 
29. The  Commission  states  that,  overall,  these 
imbalances  have  maiimly  affected  the cereail  iand  milk/ 
meat  sectors.  This  as why  in its proposals  for 
improvements  the  Commission  suggests  new  depar-
tures  for  the  market  organizations  of these  two 
major  sectors. 
30. As  stated  at the beginning  of this  Opinion,  the 
Committee  will  not  make  an exhaustive  assessment 
until  it has seen  the Commission's  detailed  proposals. 
However,  the  Committee  feels  that  it should  make 
a number  of comments  now  on this  aspect.  As regards 
cereals,  the  Committee  approves  the  Commission's 
wish  to improve  the  price  relationship  between 
cereals  of bread-making  quality  and  feed  grains  by 
giving  greater  weight  to the nutritional  value  of the 
latter.  The  Commission  postulates  that  if the present 
price  relationship  is retained  12 to 13 million  metric 
tons of soft  wheat  would  have  to be denatured, 
a figure  which  would  appear  to be  completely 
indefensible.  The  Committee  proposes  that  the Com-
munity  should  promote  quality  by granting  adequate 
incentives,  in order  to obviate  such  an unfavourable 
development  and  to reduce  imports  of quality  soft 
wheat. 
31. The  Committee  points  out  that  the  increase  in 
the price  of feed  grains  is bound  to affect  livestock 
production  conditions.  The  price  of animal  feed  has 
soared  spectacularly  of late,  and  this  upward  move-
ment  can  only  be reinforced  by the  increase  in the 
price  of feed  grains.  The  Committee  considers  that 
for this  reason  alone,  the  changes  in feed  grain 
prices  should  prompt  an overall  reassessment  of the 
livestock  farming  policy  — a reassessment  which  it 
considers  has not yet been  carried  out at Community 
level. 
32. The  Committee  also  notes  the  Commission's 
intention  to simplify  the machinery  of the organiza-
tion of the market  in cereals  and  to increase  'admin-
istrative  flexibility'.  Pending  further  details  on the way in which  this  will  be done  in practice,  the Com-
mittee  stresses  that  the reforms  in question  must  not 
call into  question  the  dual  role  of the  market 
organizations,  namely  to make  for  the  stability  of 
incomes  of farmers  and  farmworkers  and  to provide 
a framework  within  which  supply  and  demand  can 
adjust  in a normal  manner  to each  other. 
33. As  regards  establishment  of a better  relationship 
between  the price  of beef  and  veal  on the one  hand 
and milk  on the  other,  the  Committee  cannot  but 
repeat  its endorsement  of the  intention  underlying 
the Commission's  approach,  namely  to promote  meat 
production  while  remedying  the  imbalance  in the 
dairy  sector. 
34. The  Committee,  however,  feels  that  a number 
of comments  are called  for here. 
35. Firstly,  the  Committee  believes  that  it has  too 
often  been  considered  at Community  level  that  the 
switch  from  dairy  to meat  production  is relatively 
easy,  or at any  rate  can  be achieved  by means  of 
financial  aids.  In fact,  past  experience  seems  to show 
that in many  cases  even  'modern  farms'  cannot 
change  from  dairy  to meat  production,  because  they 
do not  have  the requisite  acreage.  So it is dangerous 
to give  the impression  that  excess  dairy  production 
capacity  can be eliminated  quickly  in this  way. 
36. Secondly,  dairy  production  conditions  in coun-
tries such  as New  Zealand  clearly  cannot  be com-
pared  with  those  obtaining  in Europe  — although 
it should  be pointed  out  that  Western  Europe  can 
certainly  be included  among  the  regions  which  are 
best placed  for dairy  production. 
37. Furthermore,  in  the  nine  Member  States 
substantial  investments  have  been  made  in the 
manufacture  of dairy  products,  and  it is economically 
necessary  that  this  investment  should  show  a return. 
38. The  Commission's  proposals  call  for  various 
comments. 
The Committee  feels  that  the fat/protein  ratio  should 
not be changed  abruptly  and  that  any  such  change 
must  be carried  out in stages  with  due  allowance  for 
the market  situation. 
It must  not be forgotten  that,  in the cheese  production 
sector  in particular,  substantial  investments  have  been 
made  and  commercial  policies  have  been  drawn  up 
on the basis  of the rules  now  in force.  The  objective 
proposed  by the  Commission  must  be attained  by 
No C 115/28 Official  Journal  of the European  Communities 28. 9. 74 
stages,  so that  producers  can  make  the  necessary 
adjustments. 
Furthermore,  the higher  price  for milk  powder  entails 
a further  increase  in the cost  of factors  of production 
in livestock  farming.  This  highlights  the  above-
mentioned  need  for  a consistent  policy  on livestock 
farming. 
39. The  Commission  proposes  a financial  contribu-
tion from  milk  producers,  in the form  of a temporary 
levy on production  in the  event  of surpluses.  The 
Committee  would  point  out,  first  of all,  that  the 
whole  principle  of such  a levy  has  already  been 
discussed  repeatedly  in general  terms.  In particular, 
the Economic  and  Social  Committee  has accepted  such 
a possibility,  but  within  a clearly  defined  framework 
— 'structural  surpluses,  farm  income  policy,  indicative 
output  programme  for the products  concerned'.  (J) In 
this specific  case,  however,  the  Committee  considers 
that the levy  must  be assessed  in terms  of the general 
context  of the  dairy  sector.  On  the  one  hand,  the 
wording  used  by the  Commission  prompts  us to ask 
whether  the  levy  will  not  generally  be imposed  at the 
wrong  time,  since  it will  only  be collected  once 
surpluses  exist  and  will  serve,  in practice,  as a 
deterrent  to subsequent  production.  So the market  may 
fluctuate  constantly,  in search  of a hypothetical 
equilibrium.  On  the  other  hand,  it is fair  to ask 
whether  such  a contribution  from  producers  tallies 
with  the  present  overall  situation  in the fats  and  oils 
seotor  of the European  Community. 
Finally,  the  proposal  that  the  levy  should  not  be 
imposed  on the  first  10 000  litres  delivered  appears 
to clash  with  the  modernization  endeavours  which  it 
is sought  to promote. 
The Committee  feels  that  the  Community  must  use 
other  methods,  something  on  the  lines  of those 
already  employed  in certain  Member  States. 
40. For  instance,  it is desirable  and  possible  to take 
vigorous  joint  measures  — provided  for in Article  41 
of the Treaty  of Rome  — to increase  the consumption 
of dairy  products.  Such  measures  should  be taken  in 
respect  of liquid  milk,  butter  and  cheese.  The  Com-
mittee,  regrets,  for  instance,  the  absence  of an 
aggressive  commercial  policy  for butter,  which  is too 
often  produced  for  delivery  to intervention  agencies. A vigorous  commercial  policy  would  enable  butter 
to account  for a gradually  increasing  proportion  of fat 
and oil consumption.  Consequently,  the  Committee 
trusts  that  the  Community  Regulation  which  allows 
Member  States  to subsidize  butter  consumption  will 
be amended  to make  this  subsidizing  the  general 
rule rather  than  a mere  possibility.  Such  a step  would 
provide  a uniform,  Community-wide  solution  for the 
problem.  As the Committee  sees  it, this  does  not  rule 
out the  introduction  of special  arrangements  for 
underprivileged  groups  of the European  population. 
41. Past  experience  in some  of the  new  Member 
States  seems  to show  that  liquid  milk  consumption 
can be substantially  increased,  provided  a drive  is 
made  to promote  sales  and  quality  is appropriately 
regulated. 
The Committee  considers,  however,  that  it should  be 
possible  to make  consistent  new  incentives  a feature 
of the  drive  for  a switch  from  dairy  to meat  prod-
uction.  For  instance,  premiums  could  be introduced 
for farmers  who  give  up dairy  production  — ©speci-
ally in regions  where  this  is known  to be looked  on as 
an ancillary  activity.  At the  same  time,  incentives  for 
changing  to meat  production  should  be introduced. 
42. In the final  analysis  the Committee  considers,  as 
regards  the  general  issue  of the  search  for  a balance 
between  the  milk  and  meat  markets,  that  it is vital 
to stop  taking  piecemeal  measures,  which  have  been 
adopted  too  frequently  in the  past.  It is essential  to 
adopt  an overall  approach  to these  various  products. 
This  will  make  it possible  to determine  the  specific-
ally economic  guidelines  which  seem  desirable,  while 
leaving  it to the  other  instruments  of Community 
policy  — regional  policy,  social  policy  — to remedy 
situations  which  exist  but  cannot  be catered  for  by 
the agricultural  policy  if the Community  is to concen-
trate  sufficiently  on implementing  these  guidelines. 
At all events,  the  Committee  stresses  that  given  the 
complexity  of the machinery  to be brought  into  play, 
it is absolutely  vital  for  the  Community  bodies  to 
allow  those  directly  concerned  a much  greater  voice 
in working  out  solutions  than  they  have  had  to date. 
43. As  regards  the  other  branches  of agricultural 
production,  the  Committee  will  limit  itself  to a few 
observations. 
(x) OJ No C 19, 13. 2. 1970. In the  case  of beef  and  veal,  it notes  that  the  Com-
mission  intends  to replace  the  present  system  at 
28. 9. 74 Official  Journal  of the European  Communities No C 115/29 
Community  frontiers  (customs  duty,  plus  levy  where 
appropriate)  by a variable  specific  duty.  The  purpose 
is thus  to facilitate  imports  in order  to improve 
supply.  However,  the present  Opinion  has  repeatedly 
referred  to factors  liable  to increase  beef  and  veal 
prices  in the Community.  It also  advocates  measures 
to encourage  meat  production.  The  Committee 
therefore  stresses  that  the improvements  to be made 
in the  organization  of this  market  must  not  clash 
with  the  objectives  to be attained  within  the  Com-
munity. 
44. As  regards  oilseeds  and  olive  oil, the Committee 
points  out that  irecently  the Council,  when  setting  the 
prices  of these  products  for  the  1973/74  marketing 
year,  did  not  conform  to the  proposals  for changes 
in the  present  system  which  are  set  out  in the 
memorandum.  The  Committee  feels  that  any  change 
in this  system  should  be  preceded  by  detailed 
discussions.  The  same  comment  applies  generally  to 
the problem  of durum  wheat. 
45. Finally,  the memorandum  states  that  the  Com-
mission  intends  to subject  a number  of agricultural 
products  to market  regulations.  The  Committee 
considers  that  the Commission  would  be well  advised 
to ensure  that  the  rules  it proposes  take  account  of 
experience  in other  fields  of agricultural  production. 
In particular,  the Section  urges  the case  for keeping 
to flexible  rules  and  having  the  simplest  possible 
administration.  Perhaps  in these  fields  not yet covered 
by the CAP  it would  be advisable  to try to fix overall 
production  objectives  first  of all,  before  setting  up 
types  of market  organizations  liable  to engender 
trends  which  may  prove  inappropriate. 
46. Turning  to another  subject,  the Committee  notes 
with  some  surprise  that  the memorandum  says  noth-
ing about  various  sectors  of agricultural  production 
which.  play  a not  insignificant  role  as regards  farm 
incomes  and  consumption.  Fruit  and  vegetables  are 
a case  in point.  The  Committee  wonders  whether  the 
Commission's  silence  here  has  something  to do with 
the preferential  agreements  currently  being  negotiated 
with  a number  of non-member  countries,  agreements 
which  are known  to concern  fruit  and  vegetables  in 
particular.  In this  connection,  the Committee  points 
to the importance  of these  products  for certain  Com-
munity  regions  and  calls  the attention  of the  Com-
mission  to the  need  to ensure  that  the  common 
policy  in this  field  is not dictated  by general  political 
negotiations  with  certain  States.  In addition,  the Committee  wonders  whether  solutions  other  than 
destruction  cannot  be found  in certain  cases  for 
overproduction. 
Structural  policy 
47. The  Committee  notes  that  the  memorandum 
devotes  several  pages  to structural  policy.  It has 
been  repeatedly  stressed  in the preceding  paragraphs 
that a price  and  market  policy  for agricultural  prod-
ucts cannot  produce  economically  viable  results  in the 
absence  of adequately  efficient  production  and  market-
ing structures.  The  Committee  has  repeatedly  under-
lined  the  importance  of such  a structural  policy.  It 
considers,  moreover,  that  the  Community  has  failed 
to implement  one  of the most  important  points  in the 
resolution  adopted  at the  Conference  of Stresa  in 
1958,  namely  the call  for a closer  correlation  between 
a policy  for structural  adaptation  and  market  policy. 
This  remark  does  not imply  that  the individual  Mem-
ber States  have  refrained  from  pursuing  a structural 
policy  for  agriculture.  But  it must  be pointed  out 
that while  a policy  of single  prices  and  common 
organization  of the markets  has  been  introduced  for 
agricultural  products,  structural  policies  have  con-
tinued  to differ.  It is not  surprising  that  serious 
differences  should  have  appeared  between  the effects 
of these  two  approaches,  one  Community  and  the 
other  national. 
48. On  the other  hand,  the Committee  is quite  aware 
that,  in the  sphere  of structural  policy,  progress  is 
bound  to be slow  and  the hoped-for  results  will  not 
be achieved  immediately. 
This  is one  more  reason  why  the Committee  deplores 
the continuing  failure  to implement  the  Directives 
adopted  by the  Council  in 1972.  The  Committee 
wonders  about  the  reasons  for  this  delay.  It notes, 
at all events,  the  difficulties  that  certain  Member 
States  claim  to be  encountering  as regards  the 
implementation  of these  Directives.  On this  point,  the 
Committee  again  recommends  closer  consultation 
both  between  the  Commission  and  the  Member 
States  and  between  the  Commission  and  the  pro-
fessional  interests  involved.  Only  through  more  inten-
sive cooperation  will  it be possible  to find  ways  of 
improving  what  is perhaps  too  rigid  in any  given 
part of the Directives. 
49. The  Committee  points  out  that  in its view  a 
price  policy  geared  to modern  farms  cannot  be 
effective  without  considerable  concurrent  efforts  to 
enable  as many  holdings  as possible  to achieve  this 
status. 
No C 115/30 Official  Journal  of the European  Communities 28. 9. 74 
In other  words,  the  Committee  considers  it quite 
essential  to give  an economic  and  social  impetus  to 
the policy  on agricultural  structures  and  thus  make 
a major  drive  backed  by the requisite  funds,  to adjust 
these  structures.  Here,  it may  be asked  whether  any 
saving  on expenditure  under  the Guarantee  Section  of 
the EAGGF  should  not be systematically  placed  at the 
disposal  of the Guidance  Section. 
In this  connection,  the  Committee  stresses  that 
structural  policy  in the  agricultural  sphere  is very 
closely  linked  with  other  Community  policies,  such 
as regional  policy.  This  point  is dealt  with  later  on 
in the present  Opinion. 
50. As  regards  marketing  structures,  the Commission 
is to submit  new  proposals  in pursuance  of the 
resolution  adopted  by the  Council  of Ministers  on 
25 May  1971.  The  Committee,  convinced  that  an 
overall  view  of the problems  must  be maintained  at 
all times,  asks  that  these  proposals  be submitted  as 
soon  as possible. 
Related  policies 
51. The  Commission  has  deemed  it necessary  to 
include  in its memorandum  some  brief  observations 
on 'related'  common  policies.  The  Committee  is 
bound  to welcome  this  decision,  but feds  that  when 
the Commission  formulates  its definitive  proposals 
on prices,  market  organization  and structures  it should 
take an even  clearer  stand  on these  other  common 
policies. 
It is clear  to the Committee  that  a single  market  and 
a single  price  will  be an illusion  as long  as monetary 
union  has not been  achieved.  Palliatives  will  therefore 
have  to be found  — as at present  — and  the  ones 
to suffer  in the  long  run  will  be agricultural  prod-
ucers  as well  as traders,  manufacturers  and consumers. 
At the  same  time  — and  the  present  period  of 
inflation  demonstrates  this  amply  — the  various 
aspects  of the  CAP  interlock  very  closely  with  the 
economic  policy  of each  Member  State.  A common 
agricultural  policy  cannot  coexist  with  economic 
policies  that  remain  largely  national.  The  Committee 
therefore  stresses  the connection  between  policies  for 
improving  the CAP  and  the  achievement  of decisive 
progress  towards  economic  and  monetary  union. 
Such  links  also  exist  between  the  CAP  and  other 
policies  geared  to specific  objectives. 
52. The  Committee  has indicated  its anxiety  that  the 
proposed  improvements  should  be seen  more  and more  from  a purely  economic  viewpoint.  This  will 
create  problems  with  respect  to support  for  certain 
categories  of farmers,  and  these  problems  will  have 
to be resolved  by the social  policy. 
An environment  policy  should  take  into  account  the 
part played  by farmers  in the  protection  of the 
environment.  In this  way  it will  be possible  to avoid 
regrettable  interference  with  the  economic  rale  of 
agricultural  producers. 
53. The  Committee  has  laid  stress  on the  need  for 
a vigorous  structural  policy.  Experience  shows  that 
Member  States  such  as Belgium  and  the Netherlands, 
which  have  pursued,  purposeful  policy  in this  sphere, 
have  had  to link  their  policy  on agricultural  structures 
with their  attempt  to increase  the  number  of non-
agricultural  jobs.  There  is thus  a very  close  connection 
between  policy  on agricultural  structures  and  regional 
policy  and  the  latter  impinges  in some  respects  on 
industrial  policy. 
The Committee  therefore  reiterates,  particularly  in the 
light  of the  first  15 years'  of the  common  market, 
that there  is an organic  link  between  the  various 
aspect  of the  CAP  and  the  other  component,  of the 
economic  policy  of the European  Community. 
54. The  Committee  considers  that  it must  conclude 
this Opinion  with  an urgent  appeal  to the Community 
bodies. 
The forthcoming  proposals  by the  Commission  will 
make  it possible  to assess  how  the  suggestions 
contained  in the memorandum  will  be adapted  to the 
goals  set. 
However,  the  Committee,  again  in the  light  of the 
past years'  experience,  considers  it essential  that  the 
Member  States  should  fundamentally  change  the 
attitudes  they  have  displayed  up  to now.  It is 
impossible  to pursue  an agricultural  policy  which  is 
genuinely  common  if the principles  on which  it has 
by common  assent  been  based  are  regularly  being 
undermined  by the  desire  of the  Member  States  to 
obtain  this  or that  supplementary  or conflicting 
advantage  in individual  cases.  The  international 
context  of agriculture  has  profoundly  changed  since 
the year  when  the  Treaty  of Rome  was  signed. 
Problems  of world  importance  for  which  the  Com-
munity  must  assume  its responsibilities  have  increased 
in urgency,  for example  food  aid and  relations  with 
developing  countries.  Furthermore,  recent  events  have 
shown  the  consequences  for  the  Community  of 
dependence  in certain  spheres  on non-member  coun-
28. 9.74 Official  Journal  of the European  Communities No C 115/31 
tries.  Who  can  forecast  in detail  the consequences  of 
the present  energy  supply  situation? improvement  after  another  will  leave  the Community 
in its present  state  of chaos. 
Only  by a common  political  will  can  the  Member 
States  of the  Community  arrive  at the  requisite 
solutions.  This  is particularly  true  of the agricultural 
sphere.  The  Committee  fears  that  if this  crucially 
important  political  will  is absent,  the adoption  of one Done  at Brussels,  27 February  1974. 
The Chairman 
of the Economic  and  Social  Committee 
Alfons  LAPPAS 
ANNEX 
to the  Opinion  of the  Economic  and  Social  Committee 
The  following  amendments,  were  rejected  during  discussions. 
Point  17: 
Delete  the  whole  of point  17 and  replace  by the  following: 
'The  Section  recognizes  that  the  CAP  must  be changed  substantially.  The  main  purpose  of 
these  changes  will  be to adjust  on more  equitable  lines  the yardsticks  used  to date  for allocation 
of EAGGF  funds,  this  with  a view  to: 
— giving  an economic  and  social  impetus  to the  policy  on agricultural  structures  and  particu-
larly  to income  aids  for  people  working  family  farms; 
— furthering  any  measure  designed  to stabilize  agricultural  markets  or to alter  and  simplify 
the machinery  of common  organization  of markets  in the  light  of consumer  needs. 
Moreover,  such  changes  must  further  the creation  of larger  EEC  financial  resources  enabling 
the ESF  to make  an effective  contribution  to the  basic  and  further  training  of farm  workers 
and small  farmers'. 
Result  of the vote: 
Point  34: 
Add  the  following  to point  34: 
'.. .normal  manner  to each  other.  If the  two  aspects  of this  role  prove  incompatible,  direct 
support  must  be given  to farm  incomes'. 
Result  of the  vote: 
for: 28 
against:  40 
abstentions:  11. for: 7 
large  majority against: 
abstentions: 12. 
No C 115/32 Official  Journal  of the European  Communities 28. 9. 74 
Point  38: 
Delete  point  38. 
Argument 
Since  it is realized  that  production  targets  must  be established,  the situation  in other  parts  of the 
world  has to be taken  into  consideration. 
Point  38 is therefore  superfluous. 
R esult  of the vote  : 
for: 30 
against:  50 
abstentions:  4. 
Opinion  on the  agricultural  aspects  of the  multilateral  negotiations  in GATT 
The text  on which  the  Opinion  is based  has  not  been  published  in the  Official  Journal 
of the European  Communities. 
A. LEGAL  BASIS  FOR  THE  OPINION 
At its 110th  plenary  session  held  on 28 and  29 March  1973  the  Committee,  acting  on 
a proposal  from  the  Bureau,  decided  to deliver  an Opinion  on the  abovementioned 
subject  on its own  initiative. 
B. OPINION  OF  THE  ECONOMIC  AND  SOCIAL  COMMITTEE 
The Economic  and  Social  Committee  prepared  its Opinion  on the  above  matter  at its 
118th  plenary  session,  held  in Brussels  on 27 and  28 February  1974. 
The full  text  of the  Opinion  is as follows: 
THE  ECONOMIC  AND  SOCIAL  COMMITTEE: 
Having  regard  to the  Decision  of its Bureau  on 27 
March  1973  to  entrust  the  Section  for  External 
Relations  with  the  preparation  of an Opinion  on the 
memorandum  from  the  Commission  to the  Council 
on the  development  of an overall  approach  to trade 
in view  of the  coming  multilateral  negotiations  in 
GATT; 
Having  regard  to the  view  of the  Committee  that  it 
should  make  known  its initial  reactions  to the  overall approach,  while  reserving  the  right  to carry  out  at a 
later  date  a detailed  examination  of the  various 
aspects  of these  negotiations; 
Having  regard  to its Opinion  on the  abovementioned 
memorandum,  delivered  on 24 May  1973; 
Having  regard  to the  supplementary  Opinion  of the 
Section  for  Agriculture  on the  agricultural  aspect  of 
the negotiations  delivered  on 4 October  1973;