Opinion of the Economic and Social Committee on:

- the 'Proposal for a Council Regulation (EC) derogating, for the 1996/97 marketing year, from Regulation (EC) No 1035/77 laying down special measures to encourage the marketing of products processed from lemons`, and - the 'Proposal for a Council Regulation (EC) amending Regulation (EC) No 1543/95 as regards the period of application` () (97/C 30/14)

On 10 July 1996 the Council decided to consult the Economic and Social Committee, under Articles 43 and 198 of the Treaty establishing the European Community, on the above-mentioned proposals.

The Section for Agriculture and Fisheries, which was responsible for preparing the Committee's work on the subject, adopted its Opinion on 5 September 1996. The Rapporteur was Mr Pricolo.

At its 338th Plenary Session (meeting of 25 September 1996), the Economic and Social Committee adopted the following Opinion by 101 votes to one, with four abstentions.

1. Introduction

1.1. The Community aid system for the processing of citrus fruit provides for a premium to processors who have concluded a supply contract with growers guaranteeing them payment of the 'minimum Community price` on delivery.

1.2. This aid is treated as 'financial compensation` because it is designed to make up the raw-material cost difference between Community fruit and fruit from third countries whose low wages give them a competitive edge.

1.3. As part of the 1995/96 farm-price package, the Council adopted Regulation 1543/95 which allowed Member States, for the 1995/96 marketing year only, to pay the processing premium directly to orange, mandarin and clementine growers. This concession was granted because considerable delays had arisen in the payment of the minimum prices to these growers.

1.4. The present two proposals extend the direct payment mechanism to lemon growers for the 1996/97 marketing year, and continue the direct payment mechanism for orange, mandarin and clementine growers until the end of the 1996/97 marketing year.

2. General comments

2.1. The Committee endorses the extension to the whole citrus sector of the derogation allowing Member States to pay financial compensation directly to the grower.

2.2. Whilst supporting the proposal to extend the derogation to the 1996/97 marketing year, the Committee would however point out that annual extensions are not the best solution. The direct payment mechanism should obviously be made permanent.

2.3. The reasons for the delays in payment of the minimum price still apply and will continue to do so in the future.

It is an established fact that processors pay for the produce not at the time of delivery but when they receive the processing premium.

2.4. As the granting of the premium depends on fulfilment of certain administrative requirements and checks, it is difficult to eliminate delays. These delays create cash-flow problems for growers.

2.5. The Committee would take this opportunity to draw the Council's attention to the urgent need for a radical revision of the Community system for the processing of citrus fruit. Experience has shown that processors do not always respect the minimum price and that purchasing contracts, once concluded, are not met in full (the average is around 50 %).

2.6. The Commission proposals to reform the system are a step in the right direction. The Committee hopes that the Council will approve them as soon as possible, so that the new system can become fully operative in the 1997/98 marketing year.

2.7. The price at which citrus fruit is sold to processors should be decided by free negotiations between the parties concerned, eliminating the minimum price and providing only 'direct aid` to the grower. This aid would be granted according to the quantities delivered (a specified sum per kilo) and according to Community compensation for withdrawals.

3. Specific comments

3.1. The body of the proposals is fully consistent with their objectives, and needs no further comment.

Brussels, 25 September 1996.

The President of the Economic and Social Committee

Carlos FERRER

() OJ No C 208, 19. 7. 1996, p. 16-17.