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COM (84) 1 17 
 
 
 
Vol. 1984/0042 
  
 
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Conformém ent au règlement (CEE, Euratom) n° 354/83 du Conseil du 1er février 1983 
concernant l'ouverture au public des archives historiques de la Communauté économique 
européenne et de la Communauté européenne de l'énergie atomique (JO L 43 du 15.2.1983, 
p. 1), tel que modifié par le règlement (CE, Euratom) n° 1700/2003 du 22 septembre 2003 
(JO L 243 du 27.9.2003, p. 1), ce dossier est ouvert au public. Le cas échéant, les documents 
classifiés présents dans ce dossier ont été déclassifiés conformément à l'article 5 dudit 
règlem ent. 
In accordance with Council Regulation (EEC, Euratom) No 354/83 of 1 February 1983 
concerning the opening to the public of the historical archives of the European Econom ic 
Communit y and the European Atom ic Energy Communit y (OJ L 43, 15.2.1983, p. 1), as 
amended by Regulation (EC, Euratom) No 1700/2003 of 22 September 2003 (OJ L 243, 
27.9.2003, p. 1), this file is open to the public. Where necessary, classified documents in this 
file have been declassified in conformity with Article 5 of the aforementioned regulation. 
In Übereinstimmung mit der Verordnung (EWG, Euratom) Nr. 354/83 des Rates vom  1. 
Februar 1983 über die Freigabe der historischen Archive der Europäischen 
Wirtschaftsgemeinschaft und der Europäischen Atomgem einschaft (ABI. L 43 vom  15.2.1983, 
S. 1), geändert durch die Verordnung (EG, Euratom) Nr. 1700/2003 vom 22. Septem ber 2003 
(ABI. L 243 vom 27.9.2003, S. 1), ist diese Datei der Öffentlichkeit zugänglich. Soweit 
erforderlich, wurden die Verschlusssachen in dieser Datei in Übereinstimmung mit Artikel 5 
der genannten Verordnung freigegeben. 
COMMISSION  
OF THE
EUROPEAN COMMUNITIES
General SecretariatCOM(0*f) 117 final. 
Brussels, 8 March 198^·· 
FOR OFFICIAL USE ONLY
NEGOTIATIONS ON THE ACCESSION 
OF PORTUGAL TO THE COMMUNITY
COMMISSION COMMUNICATION TO THE COUNCIL 
concerning
THE PRICES OF AGRICULTURAL PRODUCTS IN PORTUGAL
COM^**) 117 final.

AGRICULTURAL PRICES IN PORTUGAL
O U T L IN E  O F  T H E  S IT U A T IO N
In the statement it m ad e on 2 5  January 1983, at the 11th meeting of the 
Conference between the European Communities and Portugal, the C om m unity 
once m ore emphasized the need to ensure that a  comparison of current 
prices w ould be m ad e during the negotiating period (1). It noted that 
the technical talks between the Portuguese delegation and the C om m ission 
had m ad e so m e progress but had still to be continued in order to finalise 
the updated comparative tables to be submitted as official Conference 
documents.
It confirmed, with regard to the approach to be followed, the points w hich 
it had proposed in its statement of 1  D ecem ber 1981, namely that the annual 
changes in Portuguese prices during the negotiating period should be examined
each year jointly by Portugal and the Commission, the outcom e of this
/
examination being recorded in the sum m ary of conclusions of the Conference (2).
O n  the basis of information supplied by the Portuguese authorities, the 
Com m ission has draw n u p  this Communication describing the agricultural price 
situation in Portugal from  1977 to 1982 as compared with the situation in 
the C om m unity.
It deals with the following issues :
i. the m ain features of Portugal's agricultural market organization;
ii. agricultural prices for the 1981/82 marketing year;
iii. the trend of institutional agricultural prices;
iv. the price structure of agricultural products. (3)
(1) See CONF-P/5/83, p. 8
(2) See CONF-P/39/81, p. 1 6
(3) This Communication will be accompanied at Council level by a  meeting 
paper setting out certain technical aspects and containing in particular :
i. an analysis by sector of Portugal's agricultural prices;
ii. a num ber of comparative tables showing the agricultural prices 
applied in Portugal and the C om m unity over the period in question.

Analysing Portugal's price system compared with the C om m unity system is 
a  com plex task. In addition to the difficulties inherent in the differences 
between the tw o systems of market organization and price fixing, there are 
difficulties such as :
i. the differing concepts on which the institutional prices are 
based in Portugal and the C om m unity;
ii. the aid granted to this sector;
iii. the autonomous status of the Azores and Madeira,which enables these 
tw o regions to fix their o w n  institutional prices for agricultural 
products;
iv. the Portuguese system for the quotation of market prices, which 
m eans that, in certain sectors, only partial, empirical information 
can be obtained as to the true market situation.
Despite these d it' „ulties, this Communication provides a  certain am ount 
of informatie ' follows :
4.1. T he sys ... .^Litutional prices covers approximately 5 0 %  of
final agricultural production in Portugal, and over 7 0 %  in the C om m unity.
4.2. Alm ost 8 0 %  of the section of Portugal's agricultural production 
covered by institutional prices fetched higher prices in 1981-82 than 
in the C om m unity, over half (5 5 % ) having fetched prices w hich w ere 
1 0 %  higher.
4.3. Expressed in escudos, the average rise in Portugal's institutional 
prices for the 1981-82 marketing year w as 1 8 %  (1). A m o n g  the 
products which show ed a particularly m arked increase w ere olive oil 
(38% ), sugar in Madeira (3 7 % ) and milk in the Azores (28% ), and 
tobacco (20-24%). Other products show ed a smaller increase, such 
as barley for breweries (12% ), red wine (12.5%), beef/veal (1 3 % ) 
and c o m m o n  wheat (14% ).
4.4. O ver the period 1977-82, and in particular the 1981-82 marketing year, 
the producer prices, expressed in E C U , for m ost of the agricultural 
products examined rose faster in Portugal than in the C om m unity.
4.5. O ver the last three marketing years, however, the average changes in 
prices, expressed in real value terms (2) and excluding table wine,
• / »
(1) In relation to the preceding marketing year.
(2) Prices reduced to the value of the prices for the 1977-78 marketing year.

- 4 -
were of similar proportions in Portugal and the C om m unity.
4.6. T he ratios established between the institutional prices for agricultural 
products in Portugal are generally stable, and relatively similar to 
the corresponding ratios in the Com m unity, on which they tend to align 
themselves in m an y  cases.
5. A s  in the Com m unity, the pricing policy is therefore of paramount importance 
to agriculture in Portugal. It is also evident that from  1977 to 1982 the 
pricing policy followed by the Portuguese authorities did not in itself
do anything to accentuate the differences between Portuguese and C om m unity 
agriculture.
6. N o n e of the above should divert attention, however, from  the precariousness 
of agricultural production in Portugal, the rather artificial nature of
its market organization and the statistics on the consumption of agricultural 
products in that country.
B y  w a y  of example, although livestock products, particularly beef/veal and 
milk, benefit from  the supply of basic inputs at lower prices than in the 
Com m unity, they are marketed at levels similar to or higher than C om m unity 
prices. This reflects the fact that the return on agriculture in Portugal 
is m u ch  lower than the C om m unity average.
t
Furthermore, Portugal has a  shortfall of m an y  products, such as cereals, 
sugar, oil-cake, meat, etc., and so is dependent on imports from  other 
countries. These imports are in fact subject to government decisions, 
and this considerably detracts from  the impression given that consumer 
dem and is m et in Portugal in accordance with normal market laws.
If Portugal's agricultural market organization is to be brought m ore 
closely into line with the Community's, Portugal will have to m ak e major 
adjustments to production, processing and trade flows in order to maintain 
its present rate of self-supply.

- 5 -
7. T he information provided by the Portuguese authorities in N ovem ber 1983 
reveals that major decisions were taken on aid and prices during the 
second half of 1983- These decisions, which apply to the 1983-84 
marketing year, m a y  well w ork fundamental changes o n the policy hitherto 
followed on these tw o matters in Portugal. T he Com m ission is currently 
conducting a  detailed analysis of this information. T he C om m ission 
therefore considers it preferable, as part of a  pragmatic approach to 
the problems of accession, to formulate at a later date the Opinion for 
the Council referred to in its communication of 1  M arch 1983 (1),
taking into account the analysis in progress. This will m ak e it possible 
to incorporate the figures applicable to the 1983-84 marketing year, w hich 
will be indicative of the n ew  trends in the Portuguese authorities' 
agricultural prices policy.
(1) COM (83) 115 final of 1 March 1983, page 5

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Chapter 1. T he m ain features of the organization of the agricultural markets in Portugal
1.1. T he agricultural pricing policy
T he Portuguese Governm ent applies the following prices :
1.1.1. jn^tjtutionaj^ £ri_ces, by m eans of w hich the level of producer 
prices for the m ain agricultural products is fixed, com bined 
in som e cases with public procurement. These institutional 
prices are decided on at ministerial level. Before they are 
determined discussions are held with the producers' organizations 
although there is no set consultation procedure. W h e n  the prices 
have been fixed a  decree (despacho normativo) is issued to this 
effect for each agricultural sector and is published in the official 
journal (Diario do Governo).
T he system of institutional prices for marketed agricultural 
production comprises :
(a) guaranteed prices under a  marketing m onopoly
- for w heat :  the state body E P A C  (1) is responsible for
buying and storing all the wheat;
- for m i Ik :  in the "organized collection" area (2), the dairy 
cooperatives have the sole right to collect milk at the 
institutional price (in areas which do not yet have co­
operatives with the infrastructure required for collecting 
and processing milk, the State body specifically responsible 
for milk guarantees a  lower price and receives at this price 
all the milk put up for sale by the producers);
(b) other guaranteed prices
- permanent in the case of all other cereals, rice, beef/veal, 
olive oil and so m e wines (3); the state bodies specifically
__________________________________  ./.
(1
) Em presa publica de Abastecimento de Cereais (Cereals Supply A gency)
(2) This area accounts for 8 0 %  of mainland Portugal's milk production
(3) W ine described as "co m u m " (table wine) and M ust for Port w ine

- 7 -
responsible for each group of products are required to 
purchase all the products offered for sale by the farmers 
at those prices;
- short-term for certain fresh fruit and vegetables, 
potatoes, pigmeat and sheepmeat, and also eggs; these 
prices are fixed in the event of a  short-term need or 
production surpluses, for a given period of the year, 
to prevent a  slump in prices for these products.
1.1.2. £ o n .t_ L ac tu a _ l_  £ rj_ ces_ w i_ t_ h  _ a  £U _rch_as_ing^gija^antee agreed between 
producers and the processing industry established under the 
auspices of the government for, am ong other products, tomatoes, 
peas, tobacco and Madeira wine;
1.1.3. ^e^sail^ prices applied by the intervention agencies in respect
v  of users such as the processing industry or trade. These prices
are fixed direct by the Government;
1.1.4. jnci for t_ h £  £rodijct_i£n_and/_o_r jjs« ? of basic agricultural products 
such as cereals or oil-cake;
1.1.5. consiimer_pH£es, which are
(a) either m a x im u m  £rj_c£s_for certain products such as bread 
and milled ri ce;
(b) or subject to the arrangement governing ^ajrketjjijj margins 
for other products such as flour of bread-making quality, 
m eat and potatoes;

(c) or declared_prices (1) for certain products manufactured by 
firms w hose turnover exceeds the ceilings fixed in respect 
of the firm and also in respect of the products. T w o  w eeks 
before these products are placed on the market, the firms 
m ust justify the prices they intend to apply. T h e G overnm ent 
then has a period of 60 days in which to object. These 
arrangements are applied notably to oils and com pound feeding 
stuffs;
(d) or m o n i tored £ri/:es_ (2): these arrangements are very simi lar 
to the system of free prices. T he firm justifies its price 
increases to the Government, which cannot oppose them, 
although it can decide to change the price arrangements to 
w hich the product concerned is subject;
(e) or free prices for fruit, vegetables and wine.
T he policy of consumer prices is supplemented by consumer 
subsidy arrangements.
S o m e  products are covered by a  num ber of different arrangements. 
O ver the period under examination, eggs, poultry and sugar w ere 
subject to the system of imposed margins and the m a x im u m  selling 
price arrangements.
(1) pregos declarados
(2) pregos vigiados

- 9 -
1.1.6. jL tate_-t_rjîdjnjj £r£a£g£ment £_for £m£ort£ and £X£ort£ of the 
m ost important raw  materials;
1.1.7. £hor£-£e£m_aj_d_f£r_ex£orts_of certain products such as wine, 
tomato concentrate, apples and potatoes.
1.2. M arket prices
Products which are not covered by institutional prices, contractual 
prices or prices for resale by state bodies are sold at prices 
w hich follow the law s of supply and demand, i.e. market prices.
L a m b  and m ost fresh or processed fruit and vegetables are sold 
at market prices.
1.3. T he Azores and Madeira
Generally speaking, the provisions adopted o n prices for mainland 
Portugal d o not automatically apply to the autonomous regions of 
the Azores and Madeira, for the autonomous regions have a  certain 
am ount of freedom as regards the fixing of agricultural prices. 
These prices are established in the light of the price level fixed 
for mainland Portugal, however. For example, in the Azores, w hich 
send a substantial share of their milk production to the mainland, 
the price of milk is equal to the price o n  the mainland, m inus 
transport costs.

- 9 -
1.1.6. state-t_racH_n£ a ^ rj^ a ]ig e ^ m e ^ n t^ s _ fo r junport£ and £xpo£ts of the 
m ost important raw  materials;
1.1.7. shor£-£e£m_a£d_for_expor£s_of certain products such as wine, 
tomato concentrate, apples and potatoes.
1.2. M arket prices
Products w hich are not covered by institutional prices, contractual 
prices or prices for resale by state bodies are sold at prices 
which follow the law s of supply and demand, i.e. market prices.
L a m b  and m ost fresh or processed fruit and vegetables are sold 
at market prices.
1.3. T h e Azores and Madeira
Generally speaking, the provisions adopted on prices for mainland 
Portugal do not automatically apply to the autonomous regions of 
the Azores and Madeira, for the autonomous regions have a  certain 
am ount of freedom as regards the fixing of agricultural prices. 
These prices are established in the light of the price level fixed 
for mainland Portugal, however. For example, in the Azores, w hich 
send a substantial share of their milk production to the mainland, 
the price of milk is equal to the price o n the mainland, m inus 
transport costs.

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C h a p te r 2. A g r i c u l t u r a l  p r i c e s  f o r  t h e  1981/82 m a r k e tin g  y e a r
T he information supplied by the Portuguese authorities has m ad e it 
possible to analyse 40 unit prices covering approximately half Portugal's 
final agricultural production (  1). During the 1981-82 marketing year 
these prices w ere at levels ranging from -50%  for Williams pears to 
+ 6 0 %  for skim m ed milk pow der in relation to the corresponding C om m unity 
prices. Statistically, the breakdown w as as follows :
Difference rangingN um ber of prices w hich in 
Portugal areTotal
lower (2) higher (2) num ber %
from 0 to 1 0 % 9 1 0 1 9 47.5
from  10 to 2 5 % 4 5 9 22.5
from  2 5  to 5 0 % 4 3 7 17.5
above 5 0 % 2 3 5 12.5
T O T A L 1 9 2 1 40 100 %
(2) than the corresponding C om m unity prices
Approximately half of the prices for the 1981-82 marketing year w ere 
higher than C om m unity prices and half lower. Alm ost half of the prices 
in Portugal w ere very similar to C om m unity prices (difference of less 
than 10% ).
(1) estimated value of Portugal's agricultural production in 1 9 8 1  :  
2600 million E C U

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If the scale of production is taken into account, the following table 
is obtained for 1 9 81 :
Difference rangingPercentage of production (1) 
having unit pricesTotal
lower (2) higher (2)
from 0 to 1 0 % 2.6% 23.6% 26.2%
from  10 to 2 5 % 16.2% 39.8% 56.0%
from 2 5  T O  5 0 % 1.5% 3.5% 5.0%
above 5 0 % 1.5% 11.3% 12.8%
T O T A L 21.8% 78-2% 100 %
(1) Portuguese agricultural production (Commission estimate) 
('2 ) than the corresponding C om m unity prices
This table show s that, during the 1981-82 marketing year :
' i. 7 8 %  of Portuguese output taken into account w as produced at a  
higher price level than that of the C om m unity;
ii. 2 2 %  w as produced at a  lower price level.

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Chapter 3.  The trend of institutional agricultural prices
S o m e  50 %  of final agricultural production, excluding forestry, 
is covered by institutional prices in Portugal, and over 7 0  %  
in the C om m unity. A  comparative study w as m ad e of the trend of 
these prices from  1977 to 1982. It yielded the following results
Average change in agricultural prices in relation to the 
preceding marketing year (average % )
Marketing yearRate of inflationC hange in change in real value nominal value
1978/79
1979/80
1980/81
1981/82P E E C P E E C PP
except w ineE E C
+  22,1 
+  24,2 
+  16,6 
+  20,0+  7,5 
+  10,6 
+  12,1 
+  9,9+  32,6 
+  51,9 
+  2,3 
+  18,0+  8,6 
+  7,5 
+  10,5 
+  10,9+  8,6 
+22,4 
-12,3 
- 1,6+  10,5
- 2,7
- 2,1
0+  1,0 
- 2,8 
- 1,4
+  0,9
This table reveals that there are major differences between Portugal 
and the C om m unity as regards inflation and increases in agricultural 
prices, in nominal and real value. If, however, w ine is excluded 
from  the agricultural products taken into account, the price changes 
recorded each year in Portugal and the C om m unity, estimated in real 
value, seem  fairly similar over the last three marketing years. *  * *
*  Reference year 1977/78
** W in e accounts for almost 30 %  of Portuguese production covered b y  
institutional producer prices. O ver the period examined its price 
fluctuated erratically, falsifying any comparison.

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Chapter 4.  The price structure of agricultural products
4.1. In the C om m unity there are relatively constant price 
ratios between certain agricultural products which are 
subject to institutional producer prices. A  price 
structure and consequently a  balance have been established 
in this w a y  and these are taken into account every year 
w h en  the price proposals are draw n up. T he purpose of this 
chapter is to examine the price ratios in Portugal between 
agricultural products, and h o w  these have been developing, 
and also to com pare them  with the correspond!ng ratios in 
the C om m unity.
4.2. P£2ce_rati.os_i.n_relation_to_common_wheat :  from  1977 to 1982, 
the price ratio between barley and c o m m o n  wheat remained 
constant in the C om m unity (0.89).
In Portugal, with the exception of the 1979/80 marketing 
year, the ratio increased steadily from  0.83 to 0.86, 
gradually becoming closer to the C om m unity ratio.
tE E C Portugal Difference
1977/78 0,89 0,83 - 0,06
1981/82 0,89 0,86 - 0,03
F ro m  1977 to 1982 the difference w as therefore reduced by half.
T h e sam e can be observed from  an examination of the price 
ratios between c o m m o n  wheat and the cereals w hich can be 
substituted for it (durum  wheat, maize, rye). F ro m  1977 
to 1982 these ratios remained stable in the C om m unity, and 
in Portugal they varied slightly while remaining similar 
to the C om m unity ratios.

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Furthermore, the difference between the price ratios 
has narrowed for all three products. T h e price ratio 
between sunflower and c o m m o n  wheat has developed 
steadily in the C om m unity and Portugal. T he difference 
between the price ratios remained largely constant over 
the last three marketing years.
£rl££_I2il2§_lD_£®i§ii2D_i2_23ize :  in Portugal, as in 
the C om m unity, maize and the industrial tomato used to 
m ak e concentrate have relatively constant price ratios 
and so the difference between these ratios is also stable,
E E C Portuga l Difference
1978/79
1981/82
—0.54
0.560.23
0.24- 0.31
- 0.32
T h e sam e applies to the sugar beet/maize ratio and, to 
a  lesser degree, to the ratio between beef/veal and 
maize.
T h e ratios in relation to sunflower are relatively stable 
but the difference is m ore substantial.
T h e ratios in relation to milk are less stable but the 
difference is narrower.
4.4. Ihe_price_ratios_between_milk_and_beef/veal are quite 
high in the C om m unity (6.5 in 1981/82) and Portugal 
(5.5). In the C om m unity this ratio is relatively stable 
(from 6.4 to 6.5), but in Portugal it varies quite a  bit 
more. F ro m  1978 to 1982 the difference between the ratios 
narrowed by almost 6 0 % .

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1978/79
1981/82E E C Portugal Difference
6.38
6.464.06
5.47- 2.32
- 0.99
4.5. The_ratios_between_the^resaLe_or_market_grice for
agricultural products V ary haphazardly in Portugal 
as in the C om m unity and n o other conclusions can be 
draw n regarding them, j
4.6. T o  su m  up, the analysis show s that the ratios between the 
institutional producer prices for interchangeable 
agricultural products have changed relatively little
in Portugal and the C om m unity over the five marketing 
years examined. j
T h e second conclusion concerns the ratios themselves, 
which, in Portugal and the C om m unity, are generally 
similar.
j
T he third conclusion concerns the differences between 
Portugal's and the Community's price ratios, w hich in 
m ost cases is stable or narrow over the years.

GRAPH OF PRICE RATIOS-  16 -
E E C
Port .
77/78 78/79 79/80 80/81 81/82 82/53
Barley
Common Wheat
Industrial tomato 
Ma i  ze
Beef/Veal 
Milk
77/78 78/79 >  79/80 80/81; 81/8282/83