Opinion of the Committee of the Regions on 'the regional consequences of the CAP reform`(96/C 129/04)

On 27 September 1994, the Committee of the Regions, acting under the first paragraph of Rule 10 of its Rules of Procedure, decided to draw up an Own-initiative Opinion on the above-mentioned subject.

Commission 2 for Spatial Planning, Agriculture, Hunting, Fisheries, Forestry, Marine Environment and Upland Areas, which was responsible for preparing the Committee's work on the subject, adopted its Opinion on 13 December 1995. The Rapporteurs were Mr Bocklet and Mr Saraiva.

At its 11th Plenary Session (meeting of 18 January 1996), the Committee adopted the following Opinion by a unanimous vote.

1. Introduction

Whereas the objectives of Community policies in the field of agriculture (CAP, structural policy, quality policy) include the following:

- to increase agricultural competitiveness by promoting technical progress and by ensuring the rational development of agricultural production and the optimum utilization of the factors of production, in particular labour;

- thus to ensure a fair standard of living for the agricultural community, in particular by increasing the individual earnings of persons engaged in agriculture;

- to take account, in working out the common agricultural policy and the special methods for its application, of the particular nature of agricultural activity, which results from the social structure of agriculture and from structural and natural disparities between the various agricultural regions (Article 39 of the EC Treaty).

Whereas two years into the CAP reform, its effects are already being felt in many regions; and whereas these effects should be assessed in the light of the above considerations and the objectives of the reform.

Under the terms of Article 198c of the EC Treaty, the Committee of the Regions therefore feels it appropriate to issue an Own-initiative Opinion on the regional consequences of the CAP reform. This decision was taken by the Bureau at its meeting of 27 September 1994, on the proposal of Commission 2.

2. Objectives of the reform

When the European Commission issued its reform proposals in 1991, it stated that only by means of a more competitive price policy could Community agriculture withstand the inevitable competition on both its own and world markets.

At the same time, production had to be reduced and the social effects of the cuts in institutional prices cushioned by direct transfer payments. This would break the vicious circle of high prices and surplus production.

The following main objectives were set:

- safeguarding of the Community's role as an exporter of agricultural products;

- containment of production in order to restore market balance;

- targeted aid to offset price cuts;

- recognition of the need for enough farmers and for an agriculture system based on family-run and, in some cases, cooperative farms;

- recognition of the fact that rural society is dependent not only on agriculture but also on the presence of other activities which can help maintain rural populations and strengthen the economy of rural areas;

- encouragement of extensive farming methods, so as to reduce surplus production, as part of an environmental protection policy.

At the same time, the underlying principles of the CAP (single market, Community preference, financial solidarity) would continue to be upheld.

The market organization funds previously spent on price support, which had become increasingly ineffective, were to be used to provide more effective income support in the form of direct transfer payments to farmers. This is particularly important because over the last decade, annual Community expenditure on market support has doubled from ECU 18 000 million to ECU 33 000 million in 1994.

Be this as it may, the reform cannot stem rising expenditure overnight; however, it ought to be able to do so gradually, by the end of the transitional period following the third stage of the reform, if measures to limit production and changes in demand brought about by price reductions have their effect.

The above set of principles should guide implementation of the CAP reform. The effects of the reform will inevitably differ from region to region, because there are still considerable disparities between their agricultural development levels.

In the two years following the reform it was possible to make substantial improvements to the situation on the cereals market. However a balance has still not been achieved on the beef market. Producers' incomes still lag behind incomes in non-farming sectors. Only in some Member States have there been developments in the right direction, and this is due - at least in part - to price increases caused by changes in the exchange rate.

However, it is not at all certain that this trend will persist, mainly because of the limitations imposed subsequent to the GATT agreements.

3. The main decisions and the effects of the reform

The measures implemented to date focus on cereals, oilseeds, protein crops, beef and veal, and milk.

3.1. Market organization for cereals

3.1.1. Farmers' income losses are offset by compensatory payments in the form of direct income support, based on the average yields in each region.

The first beneficial effect of the measures was to reduce the price of cereals, which should enable EC cereals producers to win back as much as 10 million tonnes of the market in feed grain. In accordance with estimates, an extra 6 to 7 million tonnes of cereals were sold as feed grain in 1993 in place of cereal substitutes. The trend in the first year of the reform has held steady. Cereal production which, on developments to date, would have exceeded 180 million tonnes if there had been no reform, fell to 162 million tonnes last year. Production has been stabilized to a large extent thanks to set-aside. Taking into account the previous rules on withdrawing arable land from production, adopted in 1988 (for a period of five years) as an integral part of the stabilization mechanisms, the total area of land set aside in 1994 amounted to 7,2 million hectares.

Another point to note is that by the end of the current marketing year, cereal stocks, which are less than 9 million tonnes, had been reduced to less than a third of pre-reform stock levels. Feed wheat was no longer subsidized and it was possible to sell cereals of good merchantable quality on the market without any difficulty. Durum wheat was also in very short supply. It should be noted that in some areas of agriculture, there is a high degree of inter-dependency. For example, a reduction in cereal stocks could mean that less straw is available. This can in turn exert repercussions on the mushroom industry.

3.1.2. The introduction of compensatory payments, based on average yields, may also help to keep farmers in business, even on a part-time basis, because they provide a calculable basic income.

3.1.3. The chance to plant renewable raw materials on land that has been set aside for short-term reasons should also be viewed positively: it is a sensible use for land and also provides farmers with the chance to earn extra income.

In this way, set-aside can be valuable for stimulating raw material production for industry, energy production or other purposes, thus helping reduce dependency on mineral and fossil resources and cut back greenhouse gas emissions.

3.1.4. It should nevertheless be noted that regions specializing in the production of one particular cereal in the various Member States will be hit hardest of all by the economic impact of the reform. Reduction of intervention prices and their replacement by compensatory payments - which are normally based on average yield - will be disadvantageous to high-yield farms.

3.2. Market organizations for oilseeds and protein crops

3.2.1. For the purposes of compensatory payments under the CAP reform, protein crops come under the cereals regulations. Hence, the system of processing aid and minimum prices has been replaced since 1993/1994 by a scheme of aid per hectare to support producers' incomes. Protein crops are also subject to the same set-aside conditions as the other main crops. The premium per hectare is calculated on the basis of a compensatory payment of ECU 65 per tonne, multiplied by the average cereal yield for the region concerned.

3.2.2. Nevertheless, the European Community remains a net importer of oilseeds, vegetable oils and cake, annual import volumes being largely dependent on the relative prices of seed, cake and competing fodder products and on the opportunities for exporting oils and cake from the Community.

The EU is self-sufficient only in the case of rapeseed (rate of self-sufficiency of 139 %). All other oils and cake are in deficit.

The import of soya beans from the USA, Brazil and Argentina rose between 1989 and 1992 by 50 % to 13,6 million tonnes.

Community oilseed production in 1992/1993 was almost 11,5 million tonnes compared with 13 million in 1991/1992. The crop estimate for 1994/1995 is 12,4 million tonnes.

3.3. Market organization for beef and veal

3.3.1. Beef and veal producers also receive compensatory payments, since there is also to be a 15 % reduction in beef intervention prices by 1995/1996.

3.3.2. On this market too, the effects of the reform are already apparent. Production exhibited a 10 % downturn in 1993 and 1994 because market prices did not follow the reduction in the intervention price and remained largely stable until mid-1994. Furthermore, it was possible to achieve almost total exhaustion of stocks. This was made possible because intervention buying had virtually ceased altogether by the end of 1992. Stocks are currently approx. 15 000 t.

However, problems persist with beef and veal sales. As a result of competition from other cheaper meats in a depressed economic climate, coupled with changing consumer habits and the way the discussions about mad cow disease have tarnished the image of beef and veal, there is no likelihood of consumption increasing at the moment. The recent collapses of the market are additional proof of this and have resulted in a massive drop in prices since the mid-1994.

As well as the cereal producing regions, regions specializing in cattle breeding are also heavily hit by the reform.

3.4. Suckler cows

3.4.1. The suckler cow premium is being raised in three stages from ECU 70 to ECU 120. Member States may grant an additional premium of up to ECU 25 per cow.

Unlike the special premium for male cattle, where the choice of farm reference size is optional, eligibility for the suckler cow premium is established for each holding individually. The reference year is 1992.

The farmer may also transfer his premium right, without necessarily transferring the farm.

3.5. Sheepmeat

3.5.1. For the sheepmeat sector, the support system remains broadly unchanged:

- The ceiling for allocation of the premium (1 000/500 head) was suspended with effect from the 1995 marketing year and incorporated into individual holdings' guaranteed upper limits.

- Premium rights are established for each holding individually. The reference year is 1991.

- In 1993, the ewe premium came to ECU 20 898 per ewe, and in 1994 it came to 17,78 ECU per ewe. Owing to the poor market situation, the premium granted in less-favoured areas as part of rural development measures was raised from ECU 5,5 to ECU 7 per ewe.

3.6. Market organization for milk

3.6.1. The CAP reform decisions entailed no radical alterations for the milk sector. The co-responsibility levy, which was introduced on 16 September 1977 for milk deliveries, was abolished on 1 April 1993.

The establishment of the quota system up to the year 2000 is particularly important.

The easing of the rule linking the quota to farmland area should facilitate the structural changes needed in milk production and help make dairy farms competitive.

3.6.2. Total milk production in the Community fell by 1,75 million tonnes in 1992, reflecting the 1 % reduction in quotas during the period, and deliveries followed with a 1,6 million tonne fall. In 1993 both production and deliveries kept to the 1992 volumes.

Overall, the Community kept its share of the world market in 1992. Exports totalled the equivalent of 13,9 million tonnes of milk and the Community remains the world's leading exporter in this sector. The market organization costs for milk products have been reduced from ECU 5 800 million in 1985 to ECU 4 200 million in 1994.

3.7. Accompanying measures

3.7.1. These are designed to promote more environmentally friendly production methods (lower stocking rates, less use of pesticides and fertilizers) and improve the upkeep of the countryside. They also provide funding for reafforestation programmes and for the management of land taken out of agricultural or forestry production. The importance of the package of accompanying measures is reflected in the number of implementing programmes introduced by the Member States and regions:

- 160 programmes concerning production methods compatible with the requirements of the protection of the environment and the maintenance of the countryside, provided for in Regulation (EEC) No 2078/92;

- 41 programmes concerning the Community aid scheme for forestry measures in agriculture, provided for in Regulation (EEC) No 2080/92;

- 10 programmes concerning the Community aid scheme for early retirement from farming, provided for in Regulation (EEC) No 2079/92.

Out of a total of 238 programmes, almost 90 % were drawn up by the regions.

The Community is also supporting the introduction of early retirement schemes for farmers aged 55 years or over who make way for younger people.

3.7.2. However, it is important not to overlook the effects which these measures may have in certain regions.

Accompanying measures (afforestation programmes, early retirement schemes and programmes to promote environmentally-friendly production methods) could encourage a reduction in agricultural activity in the broadest sense, with repercussions in upstream and downstream sectors. In depressed or less-developed regions where it is difficult to find alternative means of achieving sustainable development, this could have a number of implications which urgently need to be addressed:

- a reduction in jobs in agriculture, and in upstream and downstream sectors, which cannot be offset by other economic activities (hence an increase in unemployment);

- abandonment of rural areas, causing migration to more developed regions and population centres;

- increasing food dependency in some Member States.

While the accompanying measures may be important for topping up farmers' incomes, they do not automatically provide an answer to the reduction in farming activity, particularly in economically depressed regions where agriculture still plays a crucial economic and social role. Consequently, in regions where it is necessary, an active settlement policy for young farmers should be incorporated into programme planning and support frameworks.

On the other hand, in a range of regions, and particularly where environmentally sensitive areas are involved, accompanying measures have produced definitively useful aid in maintaining extensive forms of agriculture. Otherwise they would have been abandoned with the result of the loss of jobs that have now been saved.

Community forestry measures are still limited. The afforestation of farmland is still the only area linking the agricultural and forestry sectors. The following aspects should remain within the remit of Member States and regions:

- long-term spatial planning schemes as a sine qua non for any afforestation policy involving the concomitant long-term use of land;

- economic development of forests guaranteeing sustainable use of forest ecosystems, which presupposes developing the wood processing industries and organizing producers on a technical and commercial basis, with a mind to the sales markets;

- initial and re-afforestation programmes are amongst the measures that can be applied in order to gain biomass for power generation and for production of wood products, using rapid-growth forests. This can also enable a contribution to be made to the protection of jobs that are potentially at risk;

- producer training should be limited to pilot projects; an initial project financed by the European Union on the afforestation of farmlands and the priority information and training measures to be taken, should be extended to cover all regions affected by afforestation.

3.8. Administration and control

3.8.1. A new administration and control system was established to implement the reform. This system covers the aid schemes for various arable crops and areas of livestock production, support for environmentally-friendly agriculture and specific measures for farming in mountain, hill and certain less-favoured areas.

The administrative measures focus on:

- the creation of a powerful computerized data bank allowing cross-checks to be made;

- the introduction of an integrated administration and control system involving extensive recording and physical on-the-spot checks;

- the establishment of an alphanumeric identification system for agricultural parcels and animals;

- an annual declaration from farmers which contains all the requisite data;

- the possibility of permitting multiple applications.

The present system contains very detailed rules which make it difficult to administer, requiring greater allocation of human and technical resources by the regions.

3.8.2. Data collection systems which make it easier to administer the direct payments are to be endorsed in principle. However, such systems should be decentralized so that enforcement complies with national and regional administrative laws. However, objectivity and consistent framework conditions must be guaranteed throughout the Community. Only in this way will it be possible to make flexible and efficient use of existing capabilities and enforcement systems.

The data collected by such a decentralized system should not only relate to the new aid schemes introduced by the CAP reform. They should be the basis for all measures. The only way to reduce the time and money spent on data collection and on administration and controls in the long run is to introduce standardization at European level. A plethora of uncoordinated individual programmes not only places a much greater than necessary burden on enforcement, but also makes it more difficult for agricultural policy to be accepted by the persons affected.

The extremely large volume of data to be collected provides a complete, constantly available picture of agricultural holdings which extends right into the private lives of farmers. This appears questionable from the point of view of data protection. Even if the need for effective controls is recognized, it seems doubtful whether the collection of all these data is justified and compatible with an individual's entitlement to privacy.

3.9. Finally, it should be noted that the reform package will initially cause expenditure to rise less quickly than it would have done if agricultural policy had continued unchanged.

4. GATT Agreements and extension of the EU to include CEEC

4.1. GATT Agreements

At the Uruguay Round, the Community entered into the following obligations:

- Reduction in internal support (AMS = Aggregate Measurement of Support) by a total of 20 %.

- Conversion of all import restrictions into customs duties (tariff policy) and their phased reduction by an average of 36 %, and by 20 % in the case of sensitive products. Exceptions are applicable for the main cereals and for rice, fruit and vegetables, for which variable import duties will also be charged in future.

- Improvement of market access facilities by customs concessions for certain import quantities laid down as requirements in the EU's GATT lists (minimum market access).

- Reduction in subsidised exports (quantitatively by 21 %, in budgetary terms by 36 %).

Reduction in internal support has already been achieved by the price reduction connected with the reform of the CAP. Agricultural reform farmland area and animal head premiums are not incorporated into calculation of internal support and are therefore not affected by the reduction obligation. CAP reform is therefore protected at international level within GATT.

After tarification and the reduction of customs duties, it will be vital to maintain adequate external protection. Where appropriate, application of special protection clauses enables collection of additional import duties. Access to third markets is improved by worldwide trade deregulation, such that fresh sales possibilities arise.

The obligation for reduction in subsidised products can cause problems if production surpluses arise or are already present in the European Union and exceed the subsidised export possibilities which are in future restricted by the GATT Agreement. In important product segments such as milk, beef and veal and also crops, problems are to be expected due to the production volume already achieved and the expected repercussions of biological/technological progress.

4.2. Expansion of the EU

Nonetheless, the repercussions of the CAP reform and GATT decisions have not yet fully come into effect on the markets, and the European Union has had to develop a strategy for the accession of central and eastern European countries.

The farming sector, including the foodstuffs market, plays a key part in relations between the European Union and central and eastern European countries. This is as applicable to the preparatory phase which has already been set in hand as it is to subsequent accession negotiations.

In the case of negotiations for implementation of the strategy passed by Council at Essen, the following criteria should be noted in accordance with farming and regional policy:

- The framework conditions for the positive development in trade to date in agricultural products with central and eastern European countries should not unilaterally deteriorate to the detriment of exporting EU regions.

- Preferential conditions must also continue to be strictly adhered to, bilaterally, in all product areas. There should be no erosion of preferential margins. Traditional trade flows should not be disrupted.

- In view of the particular sensitivity of the market and of the surpluses in a range of products, there is a need for a solution which continues to limit overall imports to a level which on the one hand prevents disruptions in the single European market and on the other hand also takes account of the interests of associated countries. This is applicable particularly to beef and veal, to small fruits and to other fruit and vegetables.

- On the other hand it must be ensured that these central and eastern European countries do not introduce any new import levies or similar duties or increase existing ones.

- The improvement of the position of central and eastern European countries in agricultural trade should be achieved mainly by increased quantitative control in conjunction with comprehensive utilisation of extensive, environmentally responsible production methods including re-allocation of agricultural land for ecological purposes. Community rules concerning the law on the environment, plant protection and animal health should be adopted prior to accession.

- Furthermore, efforts must be made to re-establish traditional agricultural trade links with these countries and to build them up further. The European Union alone can never constitute an adequate target market for these countries' enormous production potential.

- Aid in re-structuring of agricultural trade must be directed towards promotion of the development of agrarian principles and operating structures in these countries.

- The transitional phase should avoid structural and market policy upheaval on both sides.

- The principles of agricultural policy reform and the theoretical structure of measures must be maintained during and after the transitional stage. In order to guarantee the future financial viability of the system, ways should be considered for giving Member States and regions much greater overall responsibility.

- It is also necessary to investigate the possibilities for delegation of functions to Member States and - in accordance with their respective Constitutions - to the regions in order substantially to maintain the agricultural system whilst avoiding financial requirements that can no longer be funded.

- The external protection for EU products that is enshrined in the CAP reform and the GATT Agreement must continue to hold good even after the central and eastern European countries have entered the market.

5. The reform process to date and the sustainable development of rural areas

5.1. Since the CAP reform has been in force for only a short period, an overall assessment of its effects is clearly not yet possible.

The prime aim of the reform is to curb production, restore balance to the markets and safeguard farm incomes. There is no regional policy objective at the forefront of the reform, but it does have a major effect on individual regions.

Since the reform is designed to strengthen the market mechanisms and forces in the main areas of agricultural production (the first part covered arable crops, beef and veal; the second, still to be completed, covers wine, fruit and vegetables), it could change individual regions' positions on specific agricultural markets. For example, production could become more concentrated and intensified in a lesser number of locations. Farmland could fall fallow. The reform of the market organizations for wine, fruit and vegetables affects the Mediterranean countries.

The CAP instruments for supporting markets, prices and incomes are not seeking, and therefore have not managed, to even out different levels of regional prosperity and economic strength or to offset lagging economic development. Their aim is to preserve farming. It would be wrong to judge agricultural policy by its ability to redistribute resources to less-developed regions. Assistance for less developed regions must come primarily from the various Structural Funds but receiving such assistance must not lead to a reduction in the assistance these regions otherwise receive from the Structural Funds. The Structural Funds do not, however, serve to make up for CAP's shortcomings. Nevertheless the successes of the CAP should also be measured against the general yardstick of economic and social cohesion.

5.2. Regardless of the objective points mentioned above, it is already possible to discern a number of regionally varying basic trends. It is possible to conclude from information supplied by the regions, for example, that the Commission's intentions as set out in its background document do not always tally with the way in which the various sectoral policies with a regional impact have been framed so far.

In various European Community farming regions, in fact, the occurrence of adverse economic, social or environmental influences has increased, and this may, on account of differing regional circumstances, be due possibly to:

5.2.1. the progressive deterioration of numerous countryside areas, which widens the gaps between urban and rural areas and between self-employed farmers and the rest of the working population;

5.2.2. the rapid growth in large agro-industrial and marketing enterprises in arable and livestock farming, whose economic principles and actions have resulted in the exclusion of large sections of rural society and numerous regions;

5.2.3. the pursuit of strategies which harm the interests of certain regions, especially in Mediterranean countries. In fact the first part of the reform dealt exclusively with large-scale farming, with cereals typical of northern and central Europe and with beef and veal and sheepmeat production. The European Union should carry on the reform in the wine, fruit and vegetable sectors - where new CMOS are currently being negotiated - and make a long-lasting contribution to re-establishing the market balance of agrarian economies in the regions of southern Europe and increasing the efficiency of the market organizations; it should also support beekeeping;

5.2.4. the fact that some of the reasons given for the CAP reform - market balance, elimination of surpluses, protection of the environment, preservation of the countryside - carry less weight in certain regions, and especially those regions which are not self-sufficient in agricultural and food production, where the relationship between prices and production has certainly not had a decisive influence on the accumulation of surpluses and where some intensification of farming methods will not heighten the risks to the environment because of the predominance of extensive farming;

5.2.5. the inability to correct the distribution of financial resources, which has hitherto favoured the richer countries and is now being maintained by fixing subsidies predominantly in line with productivity, thereby increasing the disparities between small and large farms and between more and less competitive regions;

5.2.6. the inability to attenuate social disparities.

5.3. With regard to the justification for the measures, there are some contradictions which vary with the size and regional significance of the individual sectors:

5.3.1. sectors with or without income support;

5.3.2. limitation of production in certain sectors because of surpluses and simultaneous imposition of restrictions in another sector (fruit and vegetables) where the EU is one of the biggest importers in the world.

5.4. Furthermore, despite protection of the environment being constantly put forward as an argument, insufficient allowance seems to be made for the fact that the restrictive policies might unintentionally provide an incentive for intensifying and concentrating production in the more competitive regions, which already give rise to higher environmental costs. At the same time, farmers in less intensively farmed regions receive incentives to move out of farming, thereby encouraging industrial forestry and accelerating the abandonment of vast areas.

A welcome is to be given, however, to the introduction of accompanying measures to promote the extensification of agricultural production and environmentally-compatible farming. These measures will form a sensible addition to the EC agricultural reform package. They will help to upgrade the environment, preserve farmland and compensate farmers. They should thus also do much to preserve distinctive regional landscapes.

5.5. Finally, there is the risk that Community preference - a key tenet of the CAP - is gradually being sacrificed to international calls for a more liberal agri-food industry. The trend is towards the integration of Community farming in an increasingly globalized economy, which is dominated and run by the great economic powers.

5.6. It is already possible to draw a number of conclusions which might help in reforming the CAP further:

5.6.1. The CAP reform makes no allowance for the considerable differences within Community agriculture. In future the reform should go more towards meeting regional needs without breaking out of the Common Market framework. Agriculture will thus be able to promote the viability of rural areas on the basis of the diversity of its different functions and the way they interact.

5.6.2. A CAP reform which is based primarily on a market philosophy and takes competitiveness as the main criterion for future action, can hinder the development of a variety of valuable functions which agricultural activity performs such as: its contribution to demographic balance; its economic/societal function; its role in helping to protect the environment and preserve nature; and the preservation of the cultural heritage. All these are indispensable for the vitality of rural society.

5.6.3. So far, the CAP reform has failed to make allowance for the fact that apart from its productive function, agriculture also has an active role to play in helping to provide a secure future for all of the Community's rural areas.

5.6.4. CAP assistance must be adjusted to support farming communities in production areas facing particular natural disadvantages. Direct aid, production quotas and other possible instruments must be used for this purpose.

5.6.5. Resolute use must be made of the subsidiarity principle, up to the level of regions and national groups. The Commission should draw up extremely general aid provisions which should be fleshed out by the regions according to their own agricultural policy guidelines.

6. Opinion of the Committee of the Regions

The Committee of the Regions:

6.1. supports the objectives and principles contained in the Commission's 1991 document for reforming the CAP and recognizes the positive effects already felt on the product markets in question and by agriculture in general, but thinks that with a view to an appraisal of this reform a detailed study ought to be made of the regional differences in the Community (including the new Member States);

6.2. urges that the next stage in the CAP reform should proceed:

6.2.1. with due regard to the differences within EU agriculture and forestry and on the basis of a broader territorial perspective geared to harmonious spatial planning by means of integrated and sustainable rural development and a strong, flourishing and spatially widespread agricultural sector;

6.2.2. with the emphasis not only on agricultural production, which remains the keystone of areal development, but also on rural development and environmental protection on the basis of the subsidiarity/cooperation and prevention/integration principles;

6.2.3. by acknowledging that an increasingly market-oriented agricultural sector is unlikely to be able to solve rural areas' structural problems and that instead all efforts must be focused on a broader-based agricultural policy aimed, over and above food production, at the sustainable development of rural areas and at rural and farming populations - and especially young farmers - who are the mainstay of these areas;

6.3. asks the Commission to launch all the measures required to open up other markets, especially in non-food products, and promote consumption;

6.4. asks the Commission to take balanced measures to regulate production volumes so that farm prices can develop in the right direction and costs can be covered, and designed to ensure the competitive conditions that EU agriculture needs if it is to withstand competition;

6.5. calls on the Commission to review annually the percentage of mandatory set-aside, based on market developments, and to announce in good time any changes to this percentage given that farmers need to plan in the longer term;

6.6. considers that the allocations provided by the EU for temporary withdrawal of land from production should be placed at the disposal of the regions, thereby entrusting them with the choice of measures to relieve pressure on the market and with the distribution of the respective financial resources;

6.7. thinks that as part of a further reform the Member States and regions should be given greater responsibilities;

6.8. feels that the policy adopted by the Commission for reforming the structural funds (1988) comprising a bottom-up approach through regional 'single programming documents`, enables transfers under the CAP to be more effective and to take account of the specific circumstances of regions;

6.9. an approach of this type could also, above all, provide decisive momentum for promoting production and developing renewable resources, as the regions' specific contribution not only to securing farm incomes, but also to protecting the environment and the climate, conserving limited raw materials and reducing agricultural surpluses;

6.10. demands that the simpler, more coherent mechanisms and measures still to be developed should offset falls in prices, with an investigation into differentiation for the intervention threshold;

6.11. demands that the accompanying measures, especially the package for promoting environmentally-friendly production methods and preserving the countryside, be retained as a separate set of support measures (even after 1997), be given a firmer legal basis and provided with more funds;

6.12. thinks that the possibilities afforded by Regulation 2078/92 are particularly suited to developing a system which rewards agricultural services to society that are not linked to production and are not directly marketable;

6.13. deplores the administrative complexity of the measures adopted and their implementation, and therefore calls on the Commission to draw extensively on the proposals submitted by the Member States for simplifying enforcement;

6.14. admits the need for the reformed CAP's system of compensatory payments and structural aids to be properly implemented and monitored in the Member States, whilst sanction arrangements should be simplified;

6.15. calls on the Commission to adapt the system more to technical and administrative criteria. In so doing, the Community should confine itself to enacting minimum standards and criteria and to monitoring, and leave the Member States and regions to decide how to implement these standards;

6.16. considers that the risks involved in implementing the rules and thus the financial burdens which may have to be borne can only be reduced by making a deliberate effort to simplify the aid systems, which should go hand in hand with a corresponding simplification of the administration of the aid. In this context, the case should be considered for granting premiums according to surface area of grazing land and feed crops for cattle and sheep, and taking account of degression of unit costs for the funds to be paid to individual holdings. A competitive agricultural sector centred on the family farm must be the objective of structural policy;

6.17. considers that, as the basis for further decisions, the Commission must draw up a detailed report taking stock of the effects of the reform on the markets in the relevant sectors, as well as the trend in expenditure and its regional distribution;

6.18. requests the Commission to submit this report to the COR for its Opinion; this also applies to interim reports submitted to the Council and/or the European Parliament;

6.19. announces that it will endeavour a) to monitor the further reform of the CAP directly, and instructs its Commission 2 to promote a detailed survey of the regional impact of the CAP reform, drawing on its members' links with the regions, and b) to investigate the problems arising in the agro-monetary system, on which subject the COR may subsequently issue an Opinion;

6.20. asks that careful thought be given to the expected repercussions of Mediterranean countries and central and eastern European countries joining the European Union, and that options for trade and agricultural policy be explored which would not only facilitate the political and economic integration of the accession candidates, but also defend the interests and safeguard the balance of the EU's current farming regions, with particular attention to border regions. The Committee will therefore carefully examine the Commission's strategy paper on the further development of relations in agriculture between the EU and the associated central and eastern European states;

6.21. requests that the implementation of the Uruguay Round protects the main agrarian and regional policy interests of the Community and that it should be ensured that the Community's international obligations remain the subject of agreement with the CAP.

Above all, the results of the Uruguay Round in the agrarian sector should not directly or indirectly jeopardise the durability of the CAP or the maintenance of its general principles, particularly Community preference. The same applies in respect of exports from the Community and the protection of its place on the world market for agricultural products.

Done at Brussels, 18 January 1996.

The Chairman of the Committee of the Regions

Jacques BLANC