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COM (83) 090 
 
 
 
Vol. 1983/ 0030 
  
 
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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 Economic 
Community and the European Atomic Energy Community (OJ L 43, 15.2.1983, p. 1), as 
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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 Atomgemeinschaft (ABI. L 43 vom 15.2.1983, 
S. 1), geändert durch die Verordnung (EG, Euratom) Nr. 1700/2003 vom 22. September 2003 
(ABI. L 243 vom 27.9.2003, S. 1), ist diese Datei der Öffentlichkeit zugänglich. Soweit 
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COMMISSION OF THE  EUROPEAN  COMMUNITIES 
COM(83) 90 final 
Brussels,  1st March 1983 
OLIVE OIL IN AN  ENLARGED  COMMUNITY 
(Communication from  the Commission  to the  Council) 
COM(83) 90 final 

OLIVE OIL IN AN  ENLARGED  COMMUNITY 
Communication  from the Commission  to the Council 
1. The European  Council at its  meeting  in Copenhagen  on 3/4 December  1982 
invited  the Council of Ministers (Agriculture) to  complete  urgently 
before March,  on the basis of  Commission  proposals, the  revision  of -
existing  rules for certain  Mediterranean  products  in the context of an 
enlargement  of the Community  to include Spain and Portugal. 
2. The Commission  presented to the Council in  October  1981 a  communication 
(COM(8l)6lO  of October  15, 198l)  which set out an  overall  approach  to, 
Community  enlargement  in the sector of  olive oil and vegetable  oils. 
Some of the measures  suggested  at that  time have since become  the subject 
of formal proposals. 
The Commission  - in the  light of the extensive discussions  which have 
already taken place on  olive  oil, oilseeds and other vegetable  oils — 
remains  of the opinion that the  measures  it has suggested  represent a 
balanced  ensemble  ar.d should be  pursued  by th^ Couaoil of Ministers. 
It takes this opportunity to present a revised analysis of the vegetable 
and olive oil market in the enlarged  Community  and to give further 
precision  to some of the measures  suggested  in 1981. 
Analysis;  the actual and -potential  balance  of supply and  demand 
3. It is  recalled  that in a recent representative period the estimated 
self-supply  rate of the  Community  of 9 was  about  86%, of  Greece  was 
about 128% and  consequently  of the Community  of 10 was  about  3&fo. 
References  to "surpluses" of  olive oil are for the  time being without 
foundation. Olive trees are subject to a natural cycle of varying 
crops and consequently  it is normal  that this market  organization should 
even out the  volume  of production  from season  to season.  This phenomenon 
will be seen again in 1983  when the volume  of olive oil production in 
Italy will be below average  and it is  expected  that the greater part of 
the current intervention stock in the  Community  will be sold for  internal 
consumption. 

- 2 -
4. The current trends  in the Community  indicate that  it would be reasonable 
to plan incoming years  on the  basis of a self-supply rate  in the Community 
of 10 of about 100%. The Community  will continue  to import some oil from 
countries  linked by special  agreement,  like Tunisia.  Recent  experience 
shows that there  is a small but  reliable  outlet  for our  oil outside  the 
Community. Thus  there should  not be a  significant  practical  problem  of 
disposal  of olive oil in the  existing  Community. The  budget  costs arise 
from the decisions  of the Community and  from international  commitments 
to support producers'  revenues  at the  current  level,  while admitting  at 
zero or low  dutiesk  the import of other oilseeds  and vegetable  oils. A 
similar  situation  applies  to the  support of the  revenue  of Community 
producers  of colza and the  resulting  budget  costs. 
< 
5. The estimated  olive oil self—supply rate  of Spain and Portugal  in a 
recent period  was 135$ &n.& 98%  respectively.  Thus, all other factors 
omitted,  the self-supply rate  of a Community of 12  would be 107%,  giving 
an exportable surplus  of about 85,000  tonnes. Spain  has been  able in 
recent years  to dispose  of a surplus greater than  this. It is  necessary, 
however,  to make a more dynamic  analysis.  On this basis,  and subject  to 
a number of assumptions,  the Commission  considers that  the volume by  which 
production  would exceed  consumption  in a Community of 12  would rise to 
about 230,000  tonnes (see Annex A).  There are two main  reasons  for this -
1) production;  the assumption  that on present trends there  would no 
longer be a deficit  in the  existing  Community and  that there  would 
be some increase  in production  in Spain and Portugal.  It is  difficult 
* to forecast with confidence  the size of this increase. 
2) consumption : a dramatic  fall in consumption  of olive oil (an estimated 
fall of about 110,000  tonnes)  in Spain and Portugal.  The cause of this 
would be the  dismantling  of the  existing  marketing  systems  for vegetable 
oils in these countries  which currently control  the volume of  other 
vegetable  oils (e.g.  soya oil) on their internal  markets  and thus 
maintain  the consumption  of olive oil at a relatively  high level. 
6. **0n this basis the Commission  provisionally  estimated that  the accession 
of Spain  and Portugal  would give rise to additional  annual costs for the 
Community  budget,  from the end of the  transitional  period,  of about 
780 million  ECU at  current prices  (this is the  figure in C0M(8l)6l0  final 
brought up to the  situation  existing  in 1982V. 

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Proposals 
7. The Commission  takes this opportunity to give  added precision  to a 
" number of elements contained in its  communication  of October  1981 
(COM(8l)6lO of October  15, 198l). 
l) Aid for  consumption  of olive oil; This aid  must be, and  must be 
seen to be,  effective  to offset  the changes  in Spain and Portugal. 
For this reason the  Commission  has proposed  (COM(82)85 final)  that 
in an enlarged  Community  the aid should be  calculated  on a basis 
which should ensure a  sufficient  level of consumption. The  Commission 
invites the Council to  endorse  this approach. The cost  would be borne 
by the Community  budget. 
2) Incentives for conversion to other products  will have soml modest 
effect on the balance of supply and  demand.  For this purpose  the 
Commission  is now formally proposing such a  scheme  in the integrated 
Mediterranean  programmes  shortly  to be presented to the Council. 
3) The transition  period  for vegetable  oils (other than  olive oil) and 
other oilseeds should be set at  10 years. Within  this period there 
could be a period during which the  existing  Spanish and Portuguese 
marketing  arrangements  for other oilseeds and vegetable  oils could be 
maintained. This period of 'stand  still" should be  chosen  in such a 
way that the adjustment from the present system in Spain and Portugal 
to the Community  system can take place without  market  disruption. 
It goes without saying that  this period of "stand  still" for other 
^ oilseeds and vegetable  oils would not affect  either 
a) the gradual  application  from the beginning of the  transitional 
period of the Community  regime  for oilcake  and meal (the other 
principal  product of  oilseeds);  or 
b) the gradual  application  from the beginning of the  transitional 
period of the Community  target and  intervention  prices  and production 
aid for olive oil in Spain and Portugal (the  consumption  aid would 
not be required in Spain and Portugal so long as a  price relationship 
with other competing  oils at a level not above  2 Î 1 were maintained, 
in addition  to the  retention  of the present import and marketing 
arrangements  for those products); or 
c) the gradual  application  from the beginning of the  transitional  period 
of the Community  support system for producers of other  oilseeds, 
taking account of the  actual  price relationship  in Spain and Portugal. 

_ 4 -
Improved  controls  relating  to the  olive oil production  aid: There 
must be an improvement  in the  controls  relating  to the  production  aid. 
for olive oil as foreseen  in the  Commission  proposal  of last year 
(COM(82)397  final). 
This must be accompanied  by the improvements  in more  detailed  practical 
arrangement's  that are now under discussion with  the Member  States 
mainly concerned. 
negotiations  in the  context of enlargement  (Article  XXIV.6 of GAIT): 
Any credit  available  to the Community  could be used to institute 
tariff arrangements for  vegetable oil  and oilseed  imports  in excess 
of the amount currently  imported  or to  establish  import arrangements 
for vegetable  oils and oilseeds representing  the mean  of the existing 
tariff protection  in the Community  and in  Spain/Portugal  or to take any 
equivalent  measure. 
8. It is, of course,  clear that the approach  set out in  paragraph  7» point  3) 
will need to be submitted  to the candidate countries  in the  context of the 
accession  negotiations  and it would  be necessary  for the negotiation  con­
ference to decide on its adoption. 
9. The Commission  is aware that some non-producer  member  states have suggested 
in the course of the long discussions  on olive oil that there should  be 
certain  other changes  in the  present  market  organization,  for example, the 
abolition  of the production  aid. The Commission  has examined  this suggestion 
but Is of the  opinion that 
- the consequential increase  in support prices  which would  be necessary 
in order to protect producers'  revenues would  be likely to increase  the 
volume of intervention  and to  lift the consumption aid  to too  high a 
level 
— subject to certain  necessary  improvements  in controls  (currently  under 
discussion  in the  Commission  and with the member  states most directly 
concerned),  the present  system can provide an adequate guarantee  to 
producers  in an enlarged  Community  and it would  be wrong to seek to 
dismantle  any of the major elements 

- 5 -
- it is nonetheless  essential  that the limits on the area of olive 
trees eligible  for production aid (Regulation  No  I36/66/EEC  as 
amended by Regulation (EEC)  No  3454/8O)  in the Community  of 10 are 
strictly  applied  and that a similarly  strict  rule is applied  in 
Spain and Portugal.  The Commission  invites the Council to adopt 
the proposal  which  it has made (C0M(82)  10 final, Volume  III pages 
61-62). 
10. The Commission  hopes that this revised  market  analysis and,  in 
particular,  the clarification  of its earlier  Communication  (COM(8l)6lO 
of October  I98I) contained in  paragraph  7 will enable  the Council  of 
Ministers  to conclude  its discussions  on this dossier. 

PATTERN OF OLIVE OIL SUPPLY AND DEMAND Annex A 
S3C(9) 
A. Present  balance  (av.  1975/76 to 1980/81) 
Production  * 538 
Consumption  ^29 
Self-supply rate 
86 
3. Forecast  balance  if no changers  made Greece 
250 
195 
128 
Production 
Consumption 
Self-supply rate 538 
629 
86 250 
156 
160 EEC(10) 
788 
824 
96 
788 
785 
100 Spain 
463 
344 
135 
463 
242 
191 
C. I-'orecast  balance  if 2;1 ratio inaintained_between prices__of  olivn oil and__coinpeting  oils 
Production  538 250 788 463 
692 175 867 310 
78 143 91 149 Consumption 
Self-supply rate 
C. Forecast  balance  if some features  of present  systerrs  in Spain and Portugal retained 
Production 
Consumption 
Self-supply rate 538 
629 
86 250 
156 
160 788 
785 
100 463 
344 
135 Portugal 
45 
46 
98 
45 
36 
125 
45 
41 
110 
45 
46 
98 EEC(12) 
1 296 
1 214 
107 
1 296 
1 063 
122 
1 296 
1 218 
106 
1 296 
1 175 
110