4. 3. 76 Official  Journal  of the  European  Communities No C 50/19 
2.3.3.  In  connection  with  Article  4 (4), which 
provides  for  an exception  to the  'two  codes  of 
conduct'  principle  for  activities  other  than  those 
relating  to the  representation  or defence  of clients 
before  the courts,  the Committee  underlines  the need 
for a further  step  to be taken  towards  liberalizing  the 
provision  of legal  services.  Where  members  of the 
profession  only  have  to comply  with  the disciplinary 
rules  applicable  in their  country  of origin,  they  are 
not any  more  likely  to disregard  the  fundamental 
precepts  of professional  conduct  common  to all 
Member  States,  such  as professional  secrecy.  The 
Committee  also  thinks  that  the interests  of clients  and 
opposing  parties  would  be adequately  safeguarded  if 
the professional  body  of the  host  country  could 
investigate  alleged  cases  of misonduct.  This  body 
should  be authorized  to communicate  its findings  to 
its counterpart  in the lawyer's  country  of origin.  The 
latter  body  would  then  be obliged  to inform  the host 
country's  professional  body  of any  decision  taken.  (In 
contrast,  Article  6 provides  for  more  extensive 
disciplinary  powers  for dealing  with  breaches  of the 
rules  of conduct  relating  to the  representation  and 
defence  of clients  before  the courts.)  Therefore,  the 
Committee,  in line  with  its comments  under  2.1  on 
the occasional  nature  of the  services  in question, 
proposes  that  Article  4 (4) be reworded  as follows: 'For the  exercise  of activities  other  than  those 
referred  to in paragraph  1, the  lawyer  shall 
remain  subject  to the  rules  of professional 
conduct  of the  Member  State  from  which  he 
comes,  without  prejudice  to the  fundamental 
principles  underlying  the code  of conduct  of the 
bar of the host  Member  State. 
In the event  of an allegation  of misconduct  on the 
part of a lawyer,  the professional  organization  of 
the host  Member  State  may  hold  an investigation 
and submit  a report  to  the  professional 
organization  of the Member  State  from  which  the 
lawyer  comes  that  has  the  power  to take 
disciplinary  action;  the  latter  organization  shall 
inform  the professional  organization  in the  host 
Member  State  of any  decision  taken.' 
2.4. Article  5 
The words  'if necessary'  in the  second  indent  are 
superfluous  and  should  therefore  be deleted,  since 
Member  States  have  the  discretionary  power  to 
impose  restrictions  on  non-nationals  providing 
services. 
Done  at Brussels,  28 January  1976. 
The Chairman 
of the Economic  and  Social  Committee 
Henri  CANONGE 
Opinion  on the Commission  proposals  to the Council  on the fixing  of prices  for certain 
agricultural  products  and  on certain  related  measures 
The text  referred  to the  Committee  has  been  published  in Official  Journal  of the 
European  Communities  No  C 31 of 11 February  1976,  page  2. 
A. LEGAL  BASIS  FOR  THE  OPINION 
On 16 December  1975  the  Council  referred  the  abovementioned  proposals  to the 
Economic  and  Social  Committee  in accordance  with  Articles  47 and  198  of the Treaty 
establishing  the European  Economic  Community. 
No C 50/20 Official  Journal  of the  European  Communities 4. 3. 76 
B. OPINION  OF THE  ECONOMIC  AND  SOCIAL  COMMITTEE 
The Economic  and  Social  Committee  prepared  its opinion  on the above  matter  at its 
136th  plenary  session,  held  in Brussels  on 28 and  29 January  1976. 
The full  text  of the opinion  is as follows: 
THE  ECONOMIC  AND  SOCIAL  COMMITTEE, 
Having  regard  to the request  for an opinion  made  by 
the Council  of the European  Communities  on 15 and 
16 December  1975, 
Having  regard  to Articles  47 and  198  of the  Treaty 
establishing  the European  Economic  Community, 
Having  regard  to the decision  taken  by its Bureau  on 
15 December  1975,  instructing  the  Section  for 
Agriculture  to draw  up an opinion  on the matter, 
Having  regard  to its earlier  opinions  on the  same 
subject,  and  its study  entitled  'Progress  report  on the 
common  agricultural  policy'  and  the  Commission's 
communication  to the  Council  entitled  'Stocktaking 
of the  common  agricultural  policy',  on which  it 
delivered  an opinion  on 17 July  1975  (x), 
Having  regard  to the  report  submitted  by  the 
rapporteur,  Mr De Caffarelli, 
Having  regard  to the 1975  report  on the agricultural 
situation  in the Community, 
Having  regard  to the  importance  to Community 
producers,  processors  and  consumers  of  the 
Commission's  farm  price  proposals, 
Having  regard  to the  opinion  issued  by the Section 
for Agriculture  at its meeting  on 19 and  20 January 
1976, 
Having  regard  to the discussions  at its 136th  plenary 
session  of 28 and  29 January  1976  (meeting  of 29 
January), 
HAS  ADOPTED  THE  FOLLOWING  OPINION: 
by 30 votes  to 23, with  20 abstentions: 
H OJ  No C 270,  26. 11. 1975. 1. Preliminary  remarks 
1.1. The  purpose  of these  remarks  is to sketch  the 
general  economic  and  social  background,  to the 
Commission  proposal. 
1.2. This  proposal,  which  is on much  the  same 
lines  as its predecessors,  does  not  help  to solve  the 
problem  hampering  a balanced  development  of 
agriculture.  In the  long  run  it will  lead  to new 
imbalances  within  the sector. 
1.3. Moreover,  the  Committee  does  not  believe 
that the  requested  price  increases  (over  and  above 
those  proposed  by the  Commission)  will  lead  to a 
balanced  development  of agriculture.  Such  increases 
will increase  costs,  will  be of little  benefit  to the 
majority  of farms,  and  will  not be in the interests  of 
consumer  protection. 
1.4. The  Committee  takes  the view  that  the prices 
policy  should  be changed.  It should  (a) be harnessed 
to programmed  targets  on which  farmers  can  base 
their  decisions,  (b) provide  better  protection  for the 
EEC's  Mediterranean  products  and  (c) provide  small 
farmers  with  personal  income  supplements  to help 
them  to improve  the structure  of their  farms. 
1.5. The  Commission  has made  no such  proposals. 
Given  the pace  of increase  in the cost  of prices  policy, 
there  is little  chance  of obtaining  funds  to achieve  a 
more  efficient  structural  policy  or to encourage  the 
development  of producers'  associations. 
1.6. The  Committee  is extremely  concerned  about 
the present  agricultural  policy,  which  increases  the 
financial  costs  of the  EEC  but  does  not  meet  the 
requirements  of  structural  development.  The 
Committee  calls  for  wide  consultation  with  the 
political  and  social  groups,  with  a view  to 
repatterning  the common  agricultural  policy. 
1.7. The  prevailing  climate  is one  of general 
inflation  both  in the Community  and  in the world  at 
large.  Within  the Community  itself,  however,  rates  of 
inflation  vary  considerably  from  country  to country. 
4. 3. 76 Official  Journal  of the European  Communities No C 50/21 
1.8. In  the Community,  an employment  crisis  has 
arisen  which  is without  parallel  since  the last  world 
war, and this has affected  all categories  of workers. 
1.9. Inflation  has resulted  in a general  rise  in the 
overheads  of business  undertakings. 
1.10.  During  the  Commission's  reference  period, 
and in the  face  of growing  world  demand  for 
foodstuffs,  European  agriculture  has still  managed  to 
ensure  security  of supplies  and  provide  EEC 
consumers  with  food  at prices  which  are relatively 
stable  compared  with  those  on the  world  market. 
The CAP  must  take  credit  for this.  In a world  fated, 
it would  seem,  to have  to put  up with  serious 
imbalances  in the distribution  of raw  materials  for a 
long time  ahead,  the  agricultural  and  food 
production  capacity  of the EEC  is a major  asset. 
1.11.  In  spite  of this,  the Commission  notes  that 
Community  farmers'  incomes  fell  steeply  in 1974. 
The Commission  states  that  although  'agricultural 
incomes  should  show  a general  improvement  after 
the sharp  fall  in 1975  ... this  general  trend  is 
however  the  result  of trends  which  differ  widely 
according  to country  and  even  more  so according  to 
type of farm'. 
1.12.  Given  the  general  economic  and  social 
situation  — particularly  as regards  employment  — in 
the Community,  therefore,  one might  well  ask what 
effect  the Commission  proposals  are going  to have 
not only  on farming  and  farmers  but also  on the 
future  of the whole  Community. 
2. Comments  on the Commission  proposals 
2.1. In  its preliminary  remarks,  the Commission 
points  out that  its proposals  'follow  the guidelines  set 
out in its memorandum  on the improvement  of the 
common  agricultural  policy  and its stocktaking  of the 
common  agricultural  policy,  as well  as the Council's 
conclusions  on the stocktaking  of the CAP'. 
2.2. The  Economic  and  Social  Committee  points 
out that,  in its opinion  dated  27 February  1974,  it 
broadly  approved  the general  approach  adopted  in 
the memorandum  on  the  improvement  of the 
common  agricultural  policy,  though  it also  had  a 
good  number  of comments  and  criticisms  to make. 
On this  specific  point,  the Committee  would  also 
refer  back  to  the  remarks  made  in  its 
abovementioned  study  on the  stocktaking  of the 
common  agricultural  policy. 2.3. The  Committee  deplores  the  fact  that  the 
Commission  proposals  do not  take  account  of the 
comments  made  in the abovementioned  documents, 
particularly  those  calling  for  production  targets, 
direct  support  measures  for certain  farm  incomes,  a 
better  balance  between  the protective  measures  for 
different  agricultural  products  and  of  better 
allocation  of EAGGF  funds  among  the  various 
regions  and sectors. 
2.4. The  'objective  method'  applied  by  the 
Commission  in the case  of the present  price  proposals 
is based  on the criteria  for defining  modern  farms  set 
out in  Council  Directive  72/159/EEC.  The 
Committee  has  already  endorsed  this  method  in 
principle.  The  Commission  itself  says  that  the 
objective  method  'is only  a general  indicator  used  in 
combination  with  other  indicators'.  The  Commission 
says that  'a number  of uncertainties  are inherent  in 
the objective  method  due  to its complexity'.  It 
intends  to 'reduce  these  to the minimum'. 
The Committee  approves  the Commission's  attempts 
to improve  the objective  method,  especially: 
— making  the farm  accountancy  data  network  more 
representative  so that  more  accurate  knowledge 
may be gained  about  the reference  farms;  and 
— speeding  up (i) the  provision  of data  to the 
Commission,  and  (ii) the processing  of such  data 
by the Commission. 
An equally  strong  effort  should  be made  to improve 
information  about  the  other  categories  of farms, 
which  still  make  up the vast  majority  of farms  in the 
Community. 
For this  reason,  the Committee  has repeatedly  called 
for more  regional  and  'socio-structural'  measures  to 
help farmers  whose  incomes  have  not yet reached  the 
level  desired  in comparison  with  other  sectors. 
2.5. The  Commission's  objective  method  takes 
into consideration  inter  alia  two  main  factors  for 
calculating  the new  prices: 
— changes  in wages  and salaries  outside  farming; 
— changes  in the cost  of means  of production  used 
in farming  including  return  on capital. 
No C 50/22 Official  Journal  of the European  Communities 4. 3. 76 
2.6. In  its  explanatory  memorandum,  the 
Commission  has  not  really  explained  its remarks  on 
pay trends  outside  farming.  A more  thorough 
comparison  would  have  shown  up the great  variation 
in farmers'  incomes  and  the fact  that  some  farmers' 
incomes  lag  behind  some  other  incomes  outside 
farming. 
2.7. Moreover,  the  Commission  has  used  trends 
over the past  three  years  as a base.  In 1975,  however, 
the Council  and  the  Commission  thought  that 
because  of the  severe  inflation  it would  be more 
realistic  to take  account  only  of the past  two  years. 
In the  present  economic  climate,  it is felt  that  the 
reasons  cited  by the Council  in 1975  are still  valid, 
and that  it therefore  would  have  been  preferable  to 
use the same  method  as last  year.  At all events,  the 
Committee  considers  that  a stable  reference  period 
should  be used  in the future. 
2.8. In  the view  of the Commission,  applying  the 
'objective  method'  would  have  meant  proposing  a 
rise of 4-6 % in the general  level  of prices  expressed 
in units  of account.  However,  by excluding  Italy 
from  the  calculation  (because  of recent  monetary 
developments  in that  country)  the  'increase  in the 
general  level  of common  agricultural  prices  would  be 
9-1 %'. 
2.9. It  is impossible  unreservedly  to accept  the 
Commission's  thinking  regarding  the  impact  of 
changes  in the value  of the lira  on the average  level 
of prices  in the Community.  Indeed,  there  is no need 
either  to omit  Italy  from  the calculations,  or to alter 
the method  used  by the  Commission  in order  to 
arrive  at an average  price  increase  of some  9 %; the 
answer  is to use  the  official  Italian  data  available 
from  the Italian  statistics  office  ISTAT. 
2.10.  The  difference  between  4-6  and  9-1  % 
illustrates  how  the  lack  of economic  and  monetary 
union  affects  the  (i) normal  operation  of CAP 
machinery  and  (ii) EEC  farmers'  incomes. 
2.11.  Basing  its calculations  on these  two  figures 
and allowing  for  'other  factors',  the  Commission 
considers  it 'appropriate  to present  price  increases 
which  result  in a rise  in the general  level  of common 
prices  for the 1976/77  year  of the order  of 7-5 %'. 2.12.  The  Committee  points  out  that  the  average 
figure  of 7-5  % proposed  by the  Commission  is 
open  to dispute,  for two  main  reasons: 
— firstly,  it will  not  enable  'reference'  farms,  much 
less other  farms  to keep  pace  with  pay  trends 
outside  farming,  bearing  in mind  the need  for an 
adequate  return  on capital,  the  trend  in input 
costs  and  productivity; 
— secondly,  this  average  is even  lower  in most  cases, 
as a result  of 'agro-monetary'  measures. 
2.13.  However,  in view  of: (1) the  fact  that  the 
objective  method,  using  reference  farms,  has 
previously  been  agreed  and  used  and  is the only  tool 
of analysis  currently  available  for this  review;  (2) the 
need,  stressed  earlier  in this  opinion,  to do nothing 
which  would  contribute  to inflation;  (3) the need  for 
structural  change;  and  (4)  the  need  to find  a 
compromise  figure  not based  on excluding  Italy  from 
a Community  Decision,  it is considered  that  a 
compromise  figure  in the region  of 7-5 to 8 %, which 
is above  the  middle  point  between  4-6  and  9-1  % 
must  be accepted. 
2.14.  The  Committee  feels  that  some  comments 
are necessary  on 'agro-monetary'  measures.  In its 
study  on the stocktaking  of the common  agricultural 
policy,  and  elsewhere,  the Committee  has  reaffirmed 
its support  for  the  principles  of the  CAP.  As the 
Council  pointed  out  on 11 November  1975,  single 
markets  have  been  jeopardized  through  monetary 
fluctuations,  and  so the Committee  can only  approve 
the Commission's  aim  of re-establishing  single  mar-
kets. 
2.15.  The  Commission  considers  that,  in 
conjunction  with  the  fixing  of prices,  the exchange 
rates  of the  'green  currencies'  should  be changed  in 
order  to move  towards  single  markets. 
2.16.  But  the Committee  would  point  out that  the 
move  to re-establish  single  markets  can  only  be 
successful  if the  Commission  slashes  the  price 
increases  in units  of account  for  certain  countries, 
increases  which  it is proposing  as a means  of 
enabling  reference  farms  to  achieve  incomes 
comparable  to  those  obtained  in  non-farming 
activities  in the same  region. 
4. 3. 76 Official  Journal  of the  European  Communities No C 50/23 
2.17.  While  the  Committee  approves  the 
Commission's  aims  and  action,  it doubts  whether, 
after  the erosion  of farm  incomes  over  the  past  two 
years,  farmers  will  be able  to withstand  the effects  of 
monetary  developments  for  which  they  are  not 
responsible  and  which  have  a particularly  severe 
impact  in some  Member  States.  This  applies  to the 
reference  farms,  but even  more  to other  farms.  These 
make  up the  vast  majority  of farms  in the  EEC  At 
this time  of serious  unemployment,  a strict  policy  of 
obliging  the  persons  employed  on  these  farms  to 
switch  to other  occupations  is not feasible,  for,  if they 
did so, they  would  be unable  to find  employment. 
2.18.  The  Committee  would  once  again  stress  the 
particular  need  for  common  policies  with  regard  to 
structures  and  regional  development. 
2.19.  On  balance,  for  reasons  given  in 2.12,  the 
Commission's  proposals  on prices  can  be accepted. 
But, in view  of the possibility  of hardship  among  less 
competitive  farms,  it is the more  important  that  price 
policy  should  be far better  balanced  by measures  of 
structural  change,  accompanied  where  necessary,  by 
temporary  measures  to relieve  hardship. 
2.20.  The  Committee  cannot,  however,  disregard 
the fact  that  in the  present  state  of Community 
financing,  any  increase  in the  expenditure  of the 
Guarantee  Section  of the  EAGGF,  resulting  from  the 
present  price  system,  may  be considered,  rightly  or 
wrongly,  as a hindrance  to the  financing  of other 
Community  policies  such  as social  policy,  regional 
policy  or research  policy. 
3. Comments  with  respect  to products 
3.1. The  Committee  feels  that,  generally  speaking, 
none  of the  measures  proposed  gives  producers 
sufficient  incentive  to produce  quality  products. 
3.2. The  Commission  proposes  different  prices  for 
different  products.  It says,  that,  'in  proposing 
differentiated  price  increases,  it has  taken  into 
account  the present  situation  on the different  markets 
and prospects  in the short  and  medium  term'. 3.3. But  these  are not  the  only  factors  to be borne 
in mind  when  deciding  on  price  increases.  The 
Committee  points  out  that  the  situation  on  the 
various  markets  depends  directly  on  how  each 
market  is managed.  Up  to now,  farmers  have  not 
been  sufficiently  involved  in market  management  and 
cannot  be held  responsible  for  the  consequences  of 
such  management. 
3.4. The  Committee  notes  that  the  Commission 
has missed  the  opportunity  of introducing  adequate 
improvements  in respect  of certain  products,  with  the 
aim of providing  farmers  with  a similar  level  of 
protection  throughout  the  Community.  The  ESC,  the 
European  Parliament  and  the  Council  of Agricultural 
Ministers  have  repeatedly  called  for  such  action,  in 
particular  in their  appraisal  of the 'stocktaking  of the 
common  agricultural  policy'. 
3.5. While  the  Committee  does  not  wish  in this 
opinion  to examine  in detail  all the  Commission's 
proposals  for various  products,  it notes  that  some  of 
them  involve  making  important  changes  to the 
Regulations  in force  at present. 
3.6. The  following  comments  are  concerned 
mainly  with  this  point. 
3.7. Cereals 
3.7.1.  Unlike  previous  years,  the  increases 
proposed  for  certain  categories  of cereal  are  higher 
than  the general  average. 
3.7.2.  The  EEC's  policy  on cereals  has  taken  a new 
direction,  whereby  the  price  of each  cereal  is 
weighted  according  to its value  as animal  feed.  The 
Committee  approves  the  principle  of such  a move, 
but feels  that  laying  down  a uniform  intervention 
price  for  wheat  may  lead  to a drop  in producers' 
incomes  in certain  regions  of the  Community.  Such  a 
drop  would  in many  cases  be hard  to accept. 
3.7.3.  In  addition,  the Commission  is proposing  an 
incentive  to producers  of wheat  suitable  for  making 
bread.  This  is in line  with  the  recommendations  (in 
favour  of a policy  on cereal  quality)  made  by the 
Committee  in several  of its  opinions.  But  the 
Committee  questions  the  effectiveness  of the  price 
differential  between  the  bread-making  wheat  and 
other  types  of wheat  and  wonders  whether  the 
No C 50/24 Official  Journal  of the  European  Communities 4.3.76 
planned  intervention  system  for bread-making  wheat 
will have  the desired  effect. 
3.7.4.  If  no intervention  price  were  laid  down  for 
bread-making  wheat,  the Commission  would  have  to 
monitor  the  bread-making  wheat  market  closely,  in 
order  to be in a position  to take  any  requisite  steps  in 
good  time  and  at the appropriate  level  to prevent  the 
Community's  production  being  jeopardized. 
3.7.5.  Finally,  the Committee  draws  the attention 
of the Commission  and  the Council  to the technical 
and administrative  problems  which  are  going  to be 
posed  by all these  measures,  and  in particular  the 
difficulty  of applying  a scientifically  valid  method  for 
determining  what  is bread-making  wheat  and  what  is 
feed grain. 
3.8. Milk  and  dairy  products 
3.8.1.  In  its report  on this  sector,  the Commission 
draws  attention  to the present  skimmed-milk  powder 
surpluses,  and  the risks  of the situation  deteriorating 
in the short  term.  Realizing  the gravity  of the present 
situation,  the Committee  points  out that: 
— the  very  small  price  increase  on 1 March  and  the 
very modest  price  increase  for  the  whole  year 
really  amounts  to discrimination  and  will  severely 
penalize  milk  producers; 
— since  1968,  the  Commission  has  consistently 
pursued  a policy  of encouraging  farmers  to 
produce  goods  with  a high  protein  content.  In 
1968,  the  fats/protein  ration  was  70:30.  Since 
then it has  changed  in successive  stages  to reach 
its present  level  of 55:45.  But  the Community  has 
failed  to introduce  a dynamic  policy  promoting 
the export  of protein  (for  instance,  in the form  of 
cheese); 
— the proposal  to replace  automatic  intervention 
buying  of milk  powder  at a guaranteed  price  by a 
tendering  system  is liable  to lead  to such  a drop 
in producer  prices  as to undermine  the  very 
significance  of the guide  price.  This  change  is not 
to be  offset  by  any  improvement  in  the 
intervention  system  in the  form  either  of an 
adjustment  of the  intervention  price  or of an 
extension  of the system  to cover  additional  types 
of cheese  hitherto  excluded; — these  proposals  lead  the  Committee  to conclude 
that the Commission  is changing  policy,  since  it is 
tending  to discourage  stock  farming; 
— the  proposals  concerning  milk  and  dairy  products 
in conjunction  with  the 'agro-monetary'  measures 
will end  up by causing  milk-producers'  incomes 
to fall  throughout  the  Community,  and 
particularly  in certain  regions. 
3.8.2.  In  proposing  such  anti-cyclical  measures  as 
the compulsory  incorporation  of milk  powder  in 
animal  feed,  the  Commission  has  manifested  real 
awareness  of the scale  of the measures  that  need  to 
be taken. 
3.8.3.  The  Committee  will  not  hazard  a judgment 
as to whether  the proposal  for the addition  of milk 
powder  to  animal  feed  is  compatible  with 
Community  and  municipal  laws,  particularly  in view 
of its  compulsory  nature,  or with  international 
commitments.  It does  wonder,  however,  whether  the 
proposal  as currently  envisaged  might  not — coming 
on top  of the increase  in cereal  prices  — precipitate 
an excessive  rise  in production  costs  in various 
sectors  including  pig  rearing  and  especially  poultry 
rearing  without  adequate  compensation  for  the 
stock-raising  sector.  Overall,  the market  organizations 
in these  sectors  are not as developed  as in other  parts 
of agriculture.  At all events,  the Committee  would 
draw  attention  to the technical  difficulties  involved  in 
implementing  such  a decision  (e.g.  the  necessary 
denaturing). 
3.8.4.  At  all events,  the Commission's  proposal  to 
make  the incorporation  of powdered  milk  in animal 
feed compulsory  can  be considered  only  if there  are 
no other  ways  of using  this  surplus.  Now  that  this 
surplus  has arisen,  the Committee  thinks  that  it could 
be used  as a basis  for a policy  to stabilize  supplies  at 
a world-wide  level.  The  Committee  also  urges  the 
Commission  to intensify  its research  into  ways  of 
ensuring  that  such  surpluses  do not  recur  in the 
future. 
3.8.5.  Finally,  the Commission's  proposal  to make 
the incorporation  of powdered  milk  in animal  feed 
compulsory  should  be  coupled  with  judicious 
controls  on protein  imports. 
3.8.6.  The  Committee  approves  the  proposed 
measures  to stimulate  consumption.  It notes  that  milk 
surpluses  represent  only  a very  small  percentage  of 
4. 3. 76 Official  Journal  of the  European  Communities No C 50/25 
total  production;  hence  the importance  of an increase 
in consumption. 
3.8.7.  The  Commission,  in its report,  notes  that 
1 400  000 of the  EEC  dairy  herds  number  less  than 
10 cows.  The  Committee  is therefore  amazed  that  the 
price  proposals  are  not  accompanied  by  major 
structural  measures,  since  the  Commission's 
proposals  can  obviously  only  be acceptable  to an 
insignificant  number  of  milk  producers.  The 
proposed  conversion  measures  are  not  enough  to 
bring  about  a significant  switch  to other  enterprises, 
and the Committee  recommends  more  radical  action. 
In its view,  the 're-conversion  premiums'  should  be 
accompanied  by appropriate  measures  in regard  to 
dairies  and  workers  whose  jobs  may  be affected. — it fears  therefore  that  the beef  and  veal  measures 
will be a further  obstacle  to the  Commission's 
aim of getting  dairy  farmers  to switch  to meat 
production,  an  aim  which  the  Commission 
nevertheless  intends  to pursue. 
3.10.  Products  that  are  more  specifically 
Mediterranean 
3.10.1.  The  Committee  would  draw  attention  to 
the fears  which  it expressed  in its study  of 27 No-
vember  1975  on current  prospects  for the agricultural 
products  of the  EEC's  Mediterranean  area,  par-
ticularly  in view  of recent  agreements  with  certain 
Mediterranean  countries. 
3.9. Beef  and  veal 
3.9.1.  The  Commission  believes  that,  unlike  the 
dairy  products  sector,  there  will  be an upturn  of the 
-beef  and  veal  market  in 1976/77.  'Market  prices  are 
expected  to be relatively  high,  and  even  showing  an 
upward  trend  in the first  half  of 1976  and  the first 
half of 1977'. 
3.9.2.  In  broad  terms,  the  Commission  therefore 
proposes  to (a)  raise  the  guide  price  by  8 %, 
(b) increase  the gap  between  the guide  price  and  the 
intervention  price,  contrary  to  the  common 
organization  of the market  in beef  and  veal,  (c) sus-
pend  premiums,  whose  introduction  was  justified 
by the widening  of the gap  between  the guide  price 
and the  intervention  price,  and  (d)  replace  the 
so-called  'ex-im'  import  arrangements  by a system 
linking  imports  to intervention  buying. 
3.9.3.  The  Committee  would  make  the  following 
comments  on the proposals  as a whole: 
— it regrets  that,  as is the case  for dairy  products, 
the measures  proposed  appear  to be dictated 
solely  by the  current  situation,  and  have  no 
long-term  objective; 
— it is against  the  suspension  of premiums  which 
marks  an end  to the  policy  of maintaining  and 
encouraging  the beef  herd; 3.10.2.  The  Committee  does  not  think  that  the 
present  price  proposals  will  enable  the Commission 
to attain  the  development  objectives  of its own 
Mediterranean  policy. 
3.10.3.  The  Committee  disagrees  with  the 
Commission's  proposed  price  for durum  wheat  and 
the suggested  methods  for  applying  the  acreage 
premium,  but  not  the  principle  thereof.  The 
Committee  also  considers  that  the  premium  should 
be increased  with  the  dual  aim  of (a) achieving  a 
fairer  distribution  of aid,  so as to help  the  more 
difficult  farming  areas,  and  (b) safeguarding  support 
at the level  enjoyed  to date  by this  sector  where  there 
is a production  shortfall. 
3.10.4.  In  spite  of the favourable  market  prospects 
for rice,  the prices  proposed  can  only  encourage  the 
drift  away  from  rice  cultivation  in certain  EEC 
regions.  The  Committee  asks  once  more  that  the 
market  organization  should  be improved  to ensure 
Community  preference  and  that  specific  aid  be 
provided  to stop  any  decline  which  would  have 
particularly  harmful  consequences  in  certain 
Community  regions. 
3.10.5.  The  price  increase  for  olive  oil is much 
lower  than  the  average,  while  aid  is held  at its 
previous  level.  As protection  against  imports  from 
outside  the EEC  is not  very  effective,  the proposals 
may lead  to intervention  buying  on a massive  scale 
and to producers  being  penalized.  Olive-growing 
plays  a social  role  in certain  underprivileged  EEC 
No C 50/26 Official  Journal  of the  European  Communities 4. 3. 76 
regions.  In view  of this  the Committee  believes  that 
the amount  of aid  must  be reviewed  and  a plan  be 
drawn  up for reorganizing  olive  production  so as to 
improve  producers'  living  conditions. 
3.11.  Although  producers  of fruit  and  vegetables 
have  to face  particularly  high  costs  because  of the 
number  of workers  they  employ  and  the  still 
inadequate  amount  of Community  protection  they 
receive,  the proposals  only  suggest  an average  price 
increase.  Given  the  sensitive  nature  of the  fruit  and 
vegetable  and  processed  products  sectors,  the 
Committee  calls,  once  again,  for strict  adherence  to 
Community  preference.  To achieve  this  objective  the 
links  between  the withdrawal  price  and  the reference 
price  should  be  relaxed.  Finally,  the  Committee 
would  refer  back  to the  comments  and  proposals 
made  in the abovementioned  study. 
Moreover,  although  the  Committee  approves  the 
proposal  to pay  a grubbing-up  grant  to apple  and 
pear  growers,  it feels  that  the figure  put forward  may 
well be inadequate  as an encouragement  to such 
growers. The Committee  points  out  that  it has  delivered 
opinions  on the  various  proposals  for  Regulations 
which  are  at present  before  the  Council  and  has 
suggested  additional  measures.  It urges  the Council  to 
do as the  Commission  suggests,  and  adopt  these 
proposals  concurrently  with  the price  proposals. 
The Committee  urges  the  Commission  and  the 
Council  to examine  the  suggestions  put  forward  by 
the wine  growers  and  to use  them  as a basis  for 
appropriate  proposals  to solve  the  problems  of this 
sector. 
4. As  regards  the  Commission's  proposal 
amending  the Directive  on mountain  and  hill  farming 
and farming  in  certain  less-favoured  areas,  the 
Committee  draws  attention  to the  fact  that  it came 
out in favour  of a 50 % EEC  refund  of expenditure 
on compensatory  allowances.  The  Committee  is 
pleased  to see  that  an effort  has  been  made  in this 
direction. 
In view  of general  economic  trends,  the  ceiling  for 
aid per hectare  should  be raised. 
3.12.  To  turn  to the wine  sector,  the  Commission 
intimates  in conclusion  that  the  price  proposals  for 
the wine  sector  are  made  'in  the  hope  that  the 
Council  will  at the  same  time  adopt  the  proposals 
for improving  the  situation  on the  wine  market'.  In 
the Commission's  view,  'the  price  proposals  and  the 
related  measures  constitute  a whole'. 5. In  conclusion,  the  Committee,  referring  once 
again  to its study  on the stocktaking  of the  common 
agricultural  policy,  stresses  the  need  for  a global 
approach  to the  agricultural  industry,  guaranteeing 
an equitable  balance  between  all its aspects,  including 
markets,  structural,  social  and  external  problems. 
Done  at Brussels,  29 January  1976. 
The Chairman 
of the Economic  and  Social  Committee 
Henri  CANONGE 
ANNEX 
to the opinion  of the Economic  and Social  Committee 
The following  amendments  were  rejected  during  the discussions: 
Insert  before  item  1: 
'The Section  does  not oppose  the Commission  proposal,  although  it has certain  comments 
to make.' 
4.3. 76 Official  Journal  of the European  Communities No C 50/27 
Voting 
for: 37, 
against:  44, 
abstentions:  12. 
Paragraph  2.5 
Substitution  for first  indent: 
'— changes  in wages  and salaries  outside  farming  in the majority  of Member  States.' 
Voting 
for: 17, 
against  41, 
abstentions:  32. 
Paragraph  2.6 
In the second  line  of the paragraph,  delete: 
'pay trends  outside  farming'  and substitute  'pay  trends  inside  and outside  farming'. 
Voting 
for: 30, 
against:  36, 
abstentions:  24. 
Paragraph  2.8 
At end of paragraph  2.8, insert: 
'(...)  The  proposed  increase  in farm  prices  will  increase  farm  incomes  and  farm  prices  in 
some  Member  States  at a time  when  other  incomes  will  be frozen.  Farm  prices,  therefore, 
should  be fixed  at a level  which  would  not increase  the consumer  price  index  in the food 
sector  in 1976.' 
Voting 
for: 25, 
against:  42, 
abstentions:  27. 
Items  2.11  and 2.12 
Replace  items  2.11  (2.12  in the Committee  opinion)  and 2.12  (in the Section  opinion)  by: 
'The Section  would  like  to see steps  taken  to enable  incomes  in farming,  and particularly 
on modern  farms,  to keep  pace  with  the  non-agricultural  sector;  farm  prices  should 
accordingly  take  account  of the trend  in production  costs,  gains  in productivity,  the state 
of the market,  and production  targets. 
The Section  thinks  that  temporary  relief  measures  should  be introduced  to help  all farms 
which  suffer  a socially  unacceptable  drop  in income  in spite  of the proposed  prices;  these 
measures  should  be of a form  such  that  they  have  no impact  on production.' 
Voting  (by name) 
for: 42, 
against:  46, 
abstentions:  22. 
No C 50/28 Official  Journal  of the  European  Communities 4. 3. 76 
Item 2.11  (item  2.12  in the Committee  opinion) 
Add,  after  the last sentence,  ending  with  'agro-monetary  measures',  the following: 
'The present  price  machinery  is inefficient  and  incapable  of ensuring  economic  parity 
between  producers  in the various  Member  States  so long  as we have  monetary  disruption, 
floating  currencies  and differing  rates  of inflation  from  one Member  State  to another. 
The Committee  regrets  the lack  of support  from  both  the Commission  and  the Member 
States  for the introduction  of a new  international  monetary  system  conducive  to stable 
currencies.' 
Voting 
for: 17, 
against:  53, 
abstentions:  25. 
Paragraph  2.16  (2.17  in the Committee  opinion): 
Delete,  in lines  2 and 3 the words: 
'after  the erosion  of farm  incomes  over  the past  two  years.' 
Voting 
for: 7, 
against:  9, 
abstentions:  29. 
Item 3.9.3 
Delete  the second  indent. 
Voting 
for: 8, 
against:  35, 
abstentions:  16. 
Item 3.10.2 
Insert  after  'price  proposals'  the phrase: 
'— which  are generally  lower  for the products  grown  in the south  of the Community  and 
afford  less protection  for such  products  — will  enable  the Commission  to attain  the 
development  objectives  of its own  Mediterranean  policy.' 
Reason 
For example,  the Commission  is proposing  a 9-5 % increase  for non-durum  wheat  compared 
with a 5*5 % rise  for durum  wheat,  a 9-5 % rise  for maize  compared  with  7-2 % for rice. 
Rock-bottom  is reached  with  the 3 % increase  proposed  for olive  oil, which  is of fundamental 
importance  to underprivileged  regions  in the  south,  whilst  in comparison,  an 8 % rise  is 
proposed  in respect  of oil seed.  Tobacco  is to rise by 5 % and  wine  by 6-5 %. 
Voting 
for: 17, 
against:  21, 
abstentions:  24. 
The following  passages  in the Section  opinion  were  withdrawn  or modified  as the result  of 
amendments  accepted  during  the discussions: 
4.3.76 Official  Journal  of the  European  Communities No C 50/29 
Item  2.11 
'The  Section  is unable  to accept  the average  figure  for two  main  reasons.' 
Item  2.12 
'The  average  increase  in farm  prices  this  year  should  therefore  be the higher  of the  two 
figures.' 
Item  2.18 
'The  above  observations  only  strengthen  the  Section's  belief  that  the  general  level  of the 
common  prices  this  year  is inadequate.' 
Opinion  on the  proposal  for  a Council  Directive  amending  Directives  66/403/EEC  and 
70/458/EEC  on the marketing  of seed  potatoes  and  vegetable  seed 
The text  referred  to the  Committee  has  been  published  in Official  Journal  of  the 
European  Communities  No  C 267  of 21 November  1975,  page  14. 
A. LEGAL  BASIS  FOR  THE  OPINION 
On 10  November  1975  the  Council  referred  the  abovementioned  proposal  to the 
Economic  and  Social  Committee  in accordance  with  Article  198  of the Treaty  establishing 
the European  Economic  Community. 
B. OPINION  OF  THE  ECONOMIC  AND  SOCIAL  COMMITTEE 
The Economic  and  Social  Committee  prepared  its opinion  on the  above  matter  at its 
136th  plenary  session,  held  in Brussels  on 28 and  29 January  1976. 
The full  text  of the opinion  is as follows: 
THE  ECONOMIC  AND  SOCIAL  COMMITTEE, 
Having  regard  to the  request  for an opinion  made  by 
the Council  of  the  European  Communities  on 
10 November  1975, 
Having  regard  to  the  Treaty  establishing  the 
European  Economic  Community,  and  in particular 
Article  198  thereof, 
Having  regard  to the  decision  taken  by its Bureau  on 
25 November  1975,  instructing  the  Section  for 
Agriculture  to prepare  the  Committee's  work  on the 
matter, 
Having  regard  to  the  oral  report  made  by  the 
rapporteur,  Mr Murphy, Having  regard  to the  opinion  issued  by the  Section 
for Agriculture  at its meeting  on 19 and  20 January 
1976, 
Having  regard  to the  discussions  at its 136th  plenary 
session  held  on 28 and  29 January  1976  (meeting  of 
28 January), 
HAS  UNANIMOUSLY  ADOPTED  THE  FOLLOWING 
OPINION: 
The Commission  document  proposes  a one-year 
extension  of the  validity  of the  national  equivalences