28. 7. 77 Official  Journal  of the European  Communities No C 180/23 
This  presupposes  further  technical  and  scientific 
research,  which  the Commission  should  help  finance 
and get involved  in as directly  as possible. 
4. The  Committee  thinks  that  consideration  should 
be given  to making  the  consumer  better  informed 
about  the  various  substances  in wine,  especially 
sulphur  dioxide  and  sorbic  acid. 
In future,  the SO2  content  of different  foods  could 
be mentioned  on  their  labels,  so as to avoid 
distortions  of competition  and  ensure  that  consumers 
were  properly  informed. 
5. As  far as the Commission's  proposed  derogations 
for certain  Romanian  and  Austrian  wines  are 
concerned,  the  Committee  considers  that  bringing 
imported  products  under  the present  Regulation  may 
for one  thing  create  distortions  between  these  wines 
and other  non-EEC  wines,  and  for  another  lead  to 
a further  imbalance  adversely  affecting  Community 
Done  at Brussels,  22 June  1977. wines,  especially  if account  is taken  of the restrictive 
Regulations  which  are  at present  applicable  to the 
latter  (ban  on planting,  yield  requirement,  etc.). 
The Committee  therefore  urges  that  all derogations 
of this  kind  be removed  from  Community  provisions. 
At any  event,  the Committee  believes  that  any  easing 
of the rules  applying  to wines  imported  into  the EEC 
must,  like  the present  case,  only  be permitted  if there 
is a properly  codified  set of standards  in the country 
of origin. 
6. Finally,  the Committee  trusts  that  the Commis-
sion will  make  every  effort  to do away  with  the 
excessive  divergencies  in the rules  applying  to wine 
made  in the various  regions  of the Community,  which 
are not to be found  in regulations  applicable  to other 
products.  This  would  enable  the conditions  governing 
the production  and  marketing  of wine  in the Com-
munity  to be better  aligned. 
The Chairman 
of the Economic  and  Social  Committee 
Basil  de FERRANTI 
Opinion  on agricultural  incomes  in the Community 
The text  referred  to the Committee  has  not  yet been  published  in the Official  Journal 
of the European  Communities. 
A. LEGAL  BASIS  FOR  THE  OPINION 
On 22 February  1977  the Bureau  of the Committee  decided,  under  the third  paragraph 
of Article  20 of its Rules  of Procedure,  to deliver  an additional  opinion  on the 
abovementioned  subject. 
B. OPINION  OF  THE  ECONOMIC  AND  SOCIAL  COMMITTEE 
The Economic  and  Social  Committee  prepared  its opinion  on the  above  matter  at its 
150th  plenary  session,  held  in Brussels  on 22 and  23 June  1977. 
The full  text  of the opinion  is as follows: 
THE  ECONOMIC  AND  SOCIAL  COMMITTEE, 
Having  regard  to  the  Treaty  establishing  the 
European  Economic  Community,  and  in particular 
Articles  43 and  198  thereof, 
Having  regard  to the request  made  by the Council  of 
the European  Communities  on 14 February  1977  for an opinion  on the  Commission  proposals  on the 
fixing  of prices  for certain  agricultural  products  and 
on certain  related  measures, 
Having  regard  to its opinion  on the above  proposals, 
delivered  on 24 February  1977  (*), 
(!) OJ  No C 77, 30. 3. 1977. 
No C 180/24 Official  Journal  of the European  Communities 28. 7. 77 
Having  regard  to the decision  taken  by its Bureau, 
under  Article  20 of the Rules  of Procedure,  instructing 
the Section  for Agriculture  to draw  up an additional 
opinion  on the matter, 
Having  regard  to the  opinion  drawn  up  by  the 
rapporteur,  Mr de Caffarelli,  and  adopted  by the 
Section  for Agriculture  at its meeting  on 2 June  1977, 
Having  regard  to the discussions  at its 150th  plenary 
session  held  on 22 and  23 June  1977  (meeting  of 
22 June), 
HAS  UNANIMOUSLY  ADOPTED  THE  FOLLOWING 
OPINION: 
1. Introduction 
1.1. When  it drew  up  its  opinion  on  the 
Commission  proposals  on the  fixing  of prices  for 
certain  agricultural  products  and  on certain  related 
measures,  the Economic  and Social  Committee  reserved 
the right  to revert  later  to the  various  documents 
accompanying  the farm  price  proposals,  particularly 
those  concerning  farm  incomes  and  the  various 
agricultural  markets  in the Community. 
The comments  which  follow  relate  to the Commission 
document  of 11 February  1977  entitled  'Agricultural 
incomes  in the Community'. 
1.2. When  the Committee  was examining  the price 
proposals  for 1976/77,  it made  a number  of comments 
in its report  on the procedures  and  machinery  used 
for fixing  farm  prices  in the Community.  The  report 
took  a particularly  close  look  at the farm  income 
statistics  that  the Commission  used  for working  out 
its price  proposals,  and  there  is no reason  to change 
any of the comments  made  on that  occasion. 
2. General  comments 
2.1. The  Commission's  document  has  adopted  a 
two-fold  approach  to the question  of farm  incomes: 
— it has adopted  a marco-economic  approach  based 
on the agricultural  accounts, 
— it has adopted  a micro-economic  approach  using 
figures  supplied  by farms  belonging  to the EEC 
Farm  Accountancy  Data  Network  (FADN). 
2.2. It  should  be pointed  out that  this  is the first 
time that  the Commission  has presented  standardized, 
recent  information  on farm  incomes.  Provisional 
agricultural  accounts  for 1976  were  drawn  up by the 
nine Member  States,  whereas  on previous  occasions 
when  farm  prices  were  being  fixed,  the Council  of 
Ministers  had  at its disposal  only  qualitative  and fragmentary  assessments  of how  incomes  had 
progressed  during  the year  that  had  just  ended. 
2.3. The  Committee  welcomes  the  fact  that 
information  is now  more  up-to-date  and  of higher 
quality.  Before  commenting  on the assessments  made 
by the  Commission,  the  Committee  would  draw 
attention  to the very  great  variety  of forms  in the 
various  regions  of the Community  and  also  to the 
fact that the figures  recorded  by individual  farms  may 
vary from  year  to year.  Given  this  situation  and  the 
many  difficulties  which  have  been  encountered,  the 
Commission's  work  in this  field  is still  of an 
experimental  nature. 
Efforts  to find  a common  framework  for  the 
presentation  of these  results  thus  lead  to simplification 
of the  indicators  selected  and  sometimes  result  in 
divergencies  from  the more  detailed  analyses  based 
on national  indicators. 
2.4. The  Committee  regrets  that  the document  does 
not include  particulars  which  would  enable  a 
comparison  to be made  between  farm  and  non-farm 
incomes  in the  various  regions.  These  particulars, 
which  are used  by the Commission  when  it prepares 
the farm  price  proposals,  would  permit  a better 
assessment  of the position  of farmers  in the context 
of the overall  economic  situation. 
3. The  difficulties  of evaluating  agricultural  incomes 
in the EEC 
3.1. In  spite  of the progress  that  has  been  made, 
problems  of interpretation  still  arise  when  farm 
incomes  in the nine  Member  States  are compared. 
These  problems  are  due  to the inadequacy  of the 
information  available,  the  concepts  used  and  the 
very nature  of agriculture,  characterized  as it is by a 
high degree  of diversity. 
3.2. In its macro-economic  approach  the Commission 
uses as income  indicator  the gross  value  added  at 
factor  cost  (*), which  is still  a long  way  from  the 
i1) The  gross  value  added  at factor  cost  in agriculture  is 
computed  as follows: 
Final  production; 
— intermediate  consumption; 
= gross  value  added  at market  prices; 
+ subsidies; 
— taxes  linked  to production; 
= gross  value  added  at factor  cost. 
Gross  value  added  at factor  cost  in agriculture 
comprises  the  total  of factor  incomes  and  fixed 
capital  depreciation  (= the  value  lost  as a result  of 
normal  wear  and  tear  and  obsolescence). 
28.7.  77 Official  Journal  of the European  Communities No CI80/25 
labour  income  yardstick  used  in the  'objective 
method'  for  fixing  prices.  One  would  get  quite  a 
different  picture  of the variations  in incomes  within 
the agricultural  sector  and  the  relevant  trends  if 
depreciation  and  return  on capital  invested  in land 
were  taken  into  account.  This  is only  a first  step 
towards  an understanding  of the  situation  as it 
really  is. 
Over  and  above  the  concepts  currently  used, 
consideration  will  have  to be given  to working  out 
new indicators  which  will  give  a more  accurate 
picture  of the  situation. 
3.3. Moreover,  if income  is to be assessed  in terms 
of gross  value  added  at factor  cost,  then  account 
has to be taken  of taxes  linked  to production,  with 
the result  that  the  comparison  between  countries 
becomes  somewhat  blurred.  These  taxes  are difficult 
to define  as the tax system  varies  from  one  Member 
State  to another. 
3.4. In  addition,  the concept  of a 'person  engaged 
in agriculture'  (PEA)  is defined  and  applied  in ways 
that vary  quite  considerably  from  one  Member  State 
to another,  so much  so that  any  comparison  of value 
added  per PEA  are approximate. 
3.5. It  is therefore  still  a very  delicate  business  to 
interpret  differences  between  Member  States  in the 
level  and  trend  of the  macro-economic  indicator  of 
farm  income. 
3.6. In  the micro-economic  approach,  in which  use 
is made  of the  accounts  of farms  in the  Farm 
Accountancy  Date  Network  (FADN),  there  is the 
problem  of  the  selection  of  'farms  that  are 
representative'  according  to Community  rules.  It is 
still difficult  to make  comparisons  between  Member 
States  when  the farms  belonging  to the FADN  have 
been  selected  in different  ways  in each  Member  State. 
3.7. Another,  even  more  difficult  problem,  is the 
significance  of the  averages  calculated  for groups  of 
farms.  The  dispersion  of the results  within  groups  is 
often  so great  that  calculating  an average  hides  the 
very reality  that  one  wishes  to make  clear. 
4. Ways  of improving  the  measurement  of agri-
cultural  incomes  in the EEC 
J 
4.1. Our  analysis  of the  difficulties  of comparing 
indicators  of incomes  in different  Member  States allows  conclusions  to be drawn  which  open  up ways 
of improving  the statistical  tools  used. 
4.2. The  first  priority  is to standardize  methods, 
concepts,  and  the  way  in which  statistics  on farm 
incomes  are provided.  This  applies  at both  macro-
economic  and  micro-economic  levels. 
4.3. For  instance,  the Member  States  should  agree 
on deadlines  for communicating  information  on farm 
incomes,  so that  the Commission  has the most  recent 
data possible  when  it is drawing  up  its  price 
proposals. 
4.4. It  follows  that  concepts  such  as 'person 
engaged  in agriculture'  can only  be standardized  when 
the data  compilation  has  also  been  standardized  by 
the Member  States.  At macro-economic  level  it would 
be advisable  to add  an indicator  of the net income  of 
farmers  and their  families  to the criteria  used. 
4.5. Standardization  of the  way  in which  FADN 
farms  are  selected  would  facilitate  comparisons 
between  Member  States. 
4.6. The  scale  of the differences  in income  between 
EEC  farms,  as shown  in the  FADN's  statistics, 
demonstrates  the need  for a more  thorough  approach. 
Further  progress  in compiling  and  analyzing  informa-
tion could  be useful  here. 
4.7. Encouragement  should,  therefore,  be given  to 
the Commission's  efforts  aimed  at: expanding  the 
FADN  in order  to have  better  coverage  of the 
regions  and  types  of farm  so far  inadequately 
represented;  establishing  new  farm  selection  proce-
dures;  adopting  a new  system  of classification; 
studying  the long-term  trends  in a fixed  sample  and 
analyzing  the dispersion  factors. 
4.8. The  Economic  and  Social  Committee  has  on 
several  occasions  urged  that  farm  prices  be fixed 
on the  basis  of an  economic  approach  which 
determines  as accurately  as possible  the real  situation. 
Its call  for  improvements  in  the  method  of 
assessing  farm  incomes  is in keeping  with  that 
recommendation. 
From  such  information  on incomes,  an additional 
objective  should  be to ascertain  whether  the residual 
return  left  to the farmer  and  his family  after  allowing 
for the  value  of their  own  labour  and  managerial 
services,  represents  an  adequate  return  on  the 
investment  in the farm  enterprise. 
4.9. Having  considered  the Commission  document, 
the Committee  wishes  to point  out  that  it has  not 
No C 180/26 Official  Journal  of the European  Communities 28.7.  77 
sought  to pass  judgement  on  the  Commission's 
assessments  and  conclusions,  in view  of the complex 
problem  posed  by the widely  differing  situations  and 
the difficulty  of deciding  in favour  of any  one 
interpretation. 
The Committee  would,  however,  draw  attention  to 
the fact  that  the reasons  for the various  divergences 
Done  at Brussels,  22 June  1977. are not  exclusively  agricultural.  General  economic 
conditions  are  an important  factor  in this  respect. 
Nevertheless,  advances  in methodology  alone  will 
not be sufficient  to lead  to improved  farm-price 
policy  decisions,  the latter  being  even  more  dependent 
on progress  in all the  various  fields  of European 
integration. 
The Chairman 
of the Economic  and  Social  Committee 
Basil  de FERRANTI 
Opinion  on the proposal  for a Council  Regulation  on direct  cooperation  between  the 
bodies  designated  by Member  States  to verify  compliance  with  Community  and 
national  provisions  in the wine  sector 
The text  referred  to the Committee  has  not yet been  published  in the Official  Journal 
of the European  Communities. 
A. LEGAL  BASIS  FOR  THE  OPINION 
At its 148th  plenary  session  held  on 27 and  28 April  1977  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 
150th  plenary  session,  held  in Brussels  on 22 and  23 June  1977. 
The full  text  of the opinion  is as follows: 
THE  ECONOMIC  AND  SOCIAL  COMMITTEE, 
Having  regard  to the fourth  paragraph  of Article  20 
of its Rules  of Procedure; 
Having  regard  to the decision  which  the Committee 
took  on 28 April  1977,  acting  upon  a proposal  of 
the Bureau,  to  draw  up  an  opinion  on  the 
abovementioned  subject, 
Having  regard  to the decision  taken  by its Chairman 
in accordance  with  the  urgency  procedure  provided 
for in Articles  46 and  47 of the Rules  of Procedure, 
instructing  the Section  for Agriculture  to prepare  the 
Committee's  work  on the  matter, 
Having  regard  to the  opinion  drawn  up  by the 
rapporteur,  Mr  Guillaume,  and  adopted  by  the 
Section  for Agriculture  at its meeting  on 2 June  1977, 
Having  regard  to the  discussions  at its  150th 
plenary  session  held  on  22  and  23  June  1977 
(meeting  on 22 June  1977), HAS  UNANIMOUSLY  ADOPTED  THE  FOLLOWING 
OPINION: 
1. The  Committee  notes  with  satisfaction  that  the 
present  proposal  to some  extent  follows  up the 
requests  made  by it on various  occasions  for  an 
efficient,  Community-level  monitoring  system  to be 
set up for the wine  sector. 
2. However,  the  Committee  regrets  that  the 
Commission  has  presented  a proposal  that  is 
relatively  moderate,  especially  as regards  the  scope 
and nature  of the  controls  it suggests. 
3. There  is reason  to doubt  the  effectiveness  of 
the scheme  proposed  by the Commission,  especially 
if one  remembers  certain  attempts  at abolishing 
fraud  in Member  States  that  are not wine  producers.