Opinion of the Economic and Social Committee on the 'Proposal for a Council Regulation (EC) amending Regulation (EEC) No 1696/71 on the common organization of the market in hops` () (97/C 287/15)

On 21 April 1997 the Council decided to consult the Economic and Social Committee under Articles 43 and 198 of the Treaty establishing the European Community on the above-mentioned proposal.

The Economic and Social Committee appointed Mr Kienle as rapporteur-general and asked him to prepare the work at hand.

At its 346th plenary session on 28 and 29 May 1997 (meeting of 29 May), the Economic and Social Committee adopted the following opinion by 67 votes in favour, seven against and seven abstentions.

1. Introduction

1.1. Along with brewing barley, hops are the most important raw material used in the production of beer. The hop plant (humulus lupulus), which is a perennial climber grown on a sophisticated system of frames, enhances beer's aroma, bitterness and storage life.

1.2. Hops are a traditional commercial product and are traded on a liberalized world market. Trade in hops is highly concentrated, with a few hops trading houses dominating selling across the globe.

1.3. World-wide, around 86 000 ha are sown to hops, with about a third (27 500 ha) in the European Union. Germany accounts for 22 000 ha. Other EU hop-producing countries are Belgium, Spain, France, Ireland, Austria, Portugal and the United Kingdom. There are some 5 000 hop-producing farms in the EU, each with an average holding of 5,5 ha. The European small hop-growing units contrast with the US large-scale farms.

1.4. Hops are classified as aromatic or bitter, depending which characteristic is more prominent. Alpha acid levels are used to calculate the bitterness value of the hop and are the determining factor in economic evaluation.

1.5. The bitter variety of hop dominates global production, but the aromatic variety is more usual in the European Union. Hop production exceeds brewery demand for alpha acid, resulting in a world-wide glut. The 1996 global hop harvest was estimated at 2,6 million hundredweight - the hundredweight is the usual unit of weight used in the hop trade - providing around 9 300 tonnes of alpha acid; world-wide demand for alpha acid, however, is put at around 8 000 tonnes.

2. The Commission proposal

2.1. Introduced in 1971, the common organization of the market in hops is not a 'classical` market organization in that it focuses on using deficiency payments to enhance product quality and safeguard producers' income.

2.2. 31 December 1996 marked the end of the programme for varietal conversion to aromatic or super-alpha varieties, which are better adapted to market requirements. It also marked the end of the transitional period during which aid to producers could be paid in full where the members of the producer group did not market all their produce through the group itself. Community law must thus be adapted accordingly.

2.3. It is now proposed that there should be a flat-rate aid package of ECU 450 per hectare. In the past, aid levels were set on an annual basis; the future aid package is to be fixed for a period of five years.

2.4. Moreover, the European Commission proposes that 5 % of the aid to producers be withheld by producer groups and used for varietal conversion. The producer group may withhold up to 20 % of this aid to producers in order to implement special measures. Where the producer group does not market all the produce of its members, this discretionary provision becomes mandatory. In the past, it was possible, under special circumstances and if a majority of the producer group agreed, to withhold up to 100 % of producer aid for the stated uses.

3. General comments

3.1. The Committee broadly welcomes the proposal to amend the market organization in hops; this proposal retains the principles of market organization followed in the past and is aimed at income and market stability.

3.2. However, the Committee would also urge that temporary set-aside arrangements be introduced for hop-growing areas. Aid should continue to be granted during the set-aside period (with the hop-growing fields cleared but the hop frame maintained). This would do much to ensure a more flexible adaptation to changing market conditions and to secure European growers' market share.

4. Specific remarks

4.1. The options set out in Article 12 for utilizing the percentage of aid withheld by the producer groups pursuant to Article 7 a) to d) should be widened to include inter alia measures:

- to enhance quality and promote trade; and

- to promote and rationalize technology and logistics.

4.2. The Committee notes a lack of flexibility in the arrangement under Article 12 by which the producer group is obliged to withhold 5 % of aid exclusively for varietal conversion. Provision should at least be made for aid to be put to one side for cumulative use over a number of years.

4.3. In certain circumstances, producer groups should, if two-thirds of members approve, have the option of earmarking more than the maximum 15 % of aid to producers for measures pursuant to Articles 7 a) to d). (This figure may, in exceptional circumstances, reach 100 %).

4.4. The level of aid to producers put forward in this proposal is too low if, as the European Commission claims, its aim is to guarantee producers a better and more stable income. Given poor market conditions at the moment, and with forecasts for the next few years less than favourable, a considerable increase in aid levels is essential if producers' income is to be stabilized.

Brussels, 29 May 1997.

The President of the Economic and Social Committee

Tom JENKINS

() OJ C 127, 24. 4. 1997, p. 11.