24. 4. 89 Official Journal of the European Communities No C 102/25 
Opinion on the proposal for a Council Regulation (EEC) amending Regulation (EEC) 
No 2727/75 on the common organization of the market in cereals (^ 
(89/C 102/16) 
On 8 December 1988, the Council decided to consult the Economic and Social Committee, 
under Article 198 of the Treaty establishing the European Economic Community, on the 
abovementioned proposal. 
The Section for Agriculture and Fisheries, which was responsible for preparing the Com­
mittee's work on the subject, adopted its Opinion on 2 February 1989. The rapporteur was 
Mr Droulin. 
At its 263rd plenary session of 22/23 February 1989 (meeting of 23 February) the Economic 
and Social Committee adopted the following Opinion by a large majority, with 3 dissenting 
votes and 2 abstentions. 
1. Introduction 
1.1. The Commission is proposing to introduce a 
premium for cereals used in animal feed as a means of 
stabilizing supply and demand in the cereals sector. 
To enable arrangements to be reviewed (if necessary) 
in the light of experience gained, it is proposed that 
application be limited initially to the 1989/1990 market­
ing year. 
1.2. In the absence of effective mechanisms for 
restricting imports of cereal substitutes and with a view 
to increasing the use of cereals in animal feed, the 
Committee approves the premium in principle. 
1.3. However, the scheme will only be acceptable to 
users if it helps even out differences in animal feed costs 
between countries and regions. As costs are higher for 
users who are not within easy reach of a port and who 
incorporate a low proportion of cereal substitutes and 
a high proportion of cereals in their feed, the premium 
should in particular enable such operators to continue 
using a high cereals component. In this context the 
Community must avoid any discrimination between 
users in surplus regions and those in deficit regions, 
which might results from disparities in the costs of the 
cereals incorporated. cussing the criteria most conducive to fulfilling the aims 
of the premium as it sees them. 
2.3. The size of the premium should be calculated 
on the basis of the following: 
— a minimum incorporation rate, below which no 
premium is granted, 
— a progressive premium in relation to increasing 
incorporation rates, to be granted for the additional 
use of cereals above the minimum incorporation 
rate, 
— a maximum incorporation rate, above which a flat-
rate premium is granted. 
2.4. The Committee notes that, according to the 
Commission's estimates, the cost of each additional 
tonne of cereals used would be less than the average 
cost of export refunds. Consequently, there might well 
be a slight reduction in the amount of spending of the 
European Agricultural Guidance and Guarantee Fund 
(EAGGF) in the cereals sector. But this should not in 
principle affect future arrangements. 
2.5. The Committee would however like further 
information on variations in the cost of feed to livestock 
farmers once the scheme has been introduced, according 
to whether feed initially has a high or a low cereals 
component. 
2. General comments 
2.1. The Committee endorses the Commission's 
approach, viz. 'for the 1989/1990 marketing year, a 
premium may be granted for cereals used in animal 
feed above a quantitative threshold to be determined'. 
2.2. The Committee will set out its position by dis-3. Specific comments 
3.1. The following comments refer to the general 
conditions of eligibility for the premium, the amounts 
eligible for the progressive premium and the flat-rate 
premium, and the size of these premiums. 
3.2. General conditions of eligibility 
(') O] No C 328, 21. 12. 1988, p. 9. 3.2.1. The Committee recognizes the need to estab­
lish a minimum threshold in order to encourage a 
No C 102/26 Official Journal of the European Communities 24. 4. 89 
significant rate of cereal incorporation. The minimum 
rate should not be too high, however, as this might 
automatically exclude too high a proportion of oper­
ators. A 20% rate would seem satisfactory. 
3.2.2. The Committee approves the principle of 
extending the scheme to all operators, including live­
stock producers. Moreover, stock records are indispens-
ible to the proper running of the scheme. 
3.2.3. The Committee would point out that the 
Council has already delayed considerably in examining 
the premium; furthermore it did not take a decision 
before 31 October 1988, as it was required to do by the 
compromise on farm prices for the 1988/1989 marketing 
year. The Committee feels that it is important to intro­
duce the scheme in the 1989/1990 marketing year. 
3.3. Progressive premium for the additional use of 
cereals 
3.3.1. The average amount (roughly 45 ECU/t) pro­
posed for this premium should be an effective incentive 
Done at Brussels, 23 February 1989. to operators to increase their use of cereals given the 
present situation on the world market. The amount 
may have to be changed in line with market trends. 
3.3.2. The fact that this premium operates on a 
sliding scale according to incorporation rates should 
help reduce disparities in the feed costs of farmers. The 
steeper the scale, the easier it will be to achieve this 
objective. 
3.4. Flat-rate premium 
3.4.1. The Committee endorses in principle a flat-
rate premium for amounts of cereals between the mini­
mum incorporation rate and the reference rate. 
3.4.2. However, it wonders whether the proposed 
minimum rate and size of premium will have sufficient 
impact as they stand. 
The Chairman 
of the Economic and Social Committee 
Alberto MASPRONE