Opinion of the Economic and Social Committee on the 'Proposal for a Council Regulation (EC) amending Regulation (EEC) No 404/93 on the common organization of the market in bananas` ()

(96/C 212/16)

On 10 April 1996, the Council decided to consult the Economic and Social Committee, under Articles 43 and 198 of the Treaty establishing the European Economic Community, on the above-mentioned proposal.

The Economic and Social Committee decided to appoint Mr Rodriguez De Azero as Rapporteur-General for its Opinion.

At its 336th Plenary Session (meeting of 30 May 1996), the Economic and Social Committee adopted the following Opinion by 82 votes to 20 with 21 abstentions.

1. General comments

1.1. The Committee acknowledges the efforts made by the Commission to adjust the Community banana regime to take account of all the interests involved. At the same time, however, it recognizes that this must in no way jeopardize the system's effectiveness in achieving the objectives for which it was set up.

1.2. The Committee considers that the Commission should bear in mind its opinion CES 977/95 of 14 September 1995 () as regards working and social conditions and the need for banana production to meet environmental standards in the banana exporting countries.

1.3. The Committee thinks that the Commission proposal should state clearly how it intends to resolve the problem of the full use of the annual quota assigned to Somalia.

1.3.1. The Committee considers that the regulation should lay down immediate, concrete economic and structural measures to support Somali production, in order to help end the civil war for good by promoting an economic and social recovery and an upturn in employment.

1.4. The Committee considers that the Commission should review the increase of 353 000 tonnes in the tariff quota intended to take account of consumption in the three new Member States (Austria, Sweden and Finland). The oversupply on the EU market in 1995 would seem to indicate that this figure is too high.

2. Specific comments

2.1. The Committee regards the reduction in the share of the tariff quota allocated to Category B operators as unjustified and contrary to the spirit which inspired the COM in bananas. The present distribution of the tariff quota (70 % and 30 %) was calculated to restore the balance between two major groups of operators: those importing Latin American bananas and those importing traditional Community and ACP bananas. Its aim was:

- to encourage the marketing of traditional Community and ACP bananas. It was regarded as essential to establish this incentive because the profit margin on the marketing of these bananas is much lower than on Latin American bananas, primarily on account of the higher production costs of Community bananas;

and

- to prevent the disappearance from the market of the Category B operators who had been barred in the past from marketing third country bananas.

2.2. The Committee considers that the new arrangements for administration of non-traditional ACP quantities could help to improve the situation of ACP bananas. It therefore approves the Commission proposal.

2.3. The transfer of Category C operators to Category A is unacceptable in its present form. The planned measures will undoubtedly trigger a negative 'spiralling effect` in the allocation of licences, with a great many purely speculative applications for Category C import licences leading to a rapid reduction in the market share of traditional operators.

2.4. The Committee approves the proposed mechanism for operators who have suffered genuine difficulties in marketing their bananas during the reference period due to exceptional circumstances.

3. Conclusions

3.1. The Committee considers that the Commission has made a considerable effort to accommodate all interests in the Community banana regime, but thinks this should not jeopardize the system's effectiveness in achieving its fundamental objectives. For this reason the Committee hopes that due account will be taken of its comments on this third proposal to amend the COM in bananas.

Done at Brussels, 30 May 1996.

The President

of the Economic and Social Committee

Carlos FERRER

() OJ No C 121, 25. 4. 1996, p. 15.

() OJ No C 301, 13. 11. 1995.

APPENDIX to the Opinion of the Economic and Social Committee

The following amendments were rejected in the debate:

Point 1.4

Replace by the following:

'1.4. The increase of 353 000 tonnes in the tariff quota due to the accession of Austria, Finland and Sweden is absolutely essential, in order to ensure that market supply is in a state of semi-equilibrium. The "oversupply" in 1995 happened primarily because the Member States and the ACP countries boosted their production considerably and the tariff quota for Category B operators was increased by an extra 180 000 tonnes with the help of special licenses on the grounds of wind damage. But the problem was due not only to the increase but also to the licenses made available at short notice for third-country bananas which frustrated every arrangement regarding quantities already on the market. As the recipients of such licenses (Category B operators, i.e. firms which only handle EU and ACP bananas) mostly had little opportunity of using them, the licenses were offered on the market, with the result that there were again persistent market disturbances throughout the EU.

In this way, subsidies paid to EU producers in 1996 rose again by 30 %, which led to EU production being expanded again without any regard to market conditions. Production is estimated to have increased by around 20 % in the Canary Isles and 17 % in Martinique in 1995. The ACP states too have contributed to the market supply as described: Ivory Coast by a production increase of 27 % and Cameroon by one of 8 %.

It should therefore be noted that a market imbalance existed due to the banana COM measures, and not because estimated consumption in the three new Member States was set too high.`

Result of the vote

For: 44, against: 53, abstentions: 15.

Point 2

Replace points 2.1, 2.2 and 2.4 by the following:

'2.1. Category B operators are not subject to any reduction in their share of the tariff quota but retain the same level of licences for third-country bananas as hitherto. Considering that, in the past, third-country operators were forced to purchase licences from Category B operators in order to maintain supply, such an arrangement could well prove a method of distribution that is more in line with the true state of affairs.

Enhanced marketing of EU and ACP bananas is already encouraged by considerable subsidy payments, resulting in a massive expansion of production.

2.2. The provisions made under this point with regard to 90 000 tonnes of non-traditional ACP bananas must not lead to a reduction in third-country tariff quotas, since this would invalidate the new quota distribution figures proposed by the Commission. This amount must therefore be added to the tariff quota.

2.4. The planned hardship clause is also unacceptable in its present form. The prerequisites cited are defined so unclearly that it is impossible to predict possible consequences. Account should also be taken here of all those German market operators who started trading in the new Federal Laender after 1990 and do not have the relevant reference amounts at their disposal.`

Result of the vote

For: 28, against: 66, abstentions: 26.

Point 3

Amend to read as follows:

'3. Conclusions

3.1. The Committee considers that the Commission has made a considerable effort to accommodate all interests in the Community banana regime. It agrees with the Commission's proposal to increase the tariff quota to 2 553 000 tonnes and to allocate 74 % of this quota to Category A and C operators and 26 % to Category B operators. In the light of its specific comments in points 2.2, 2.3 and 2.4, the Committee would ask the Commission to give a detailed explanation of the effects of these measures. It hopes that due account will be taken of its comments on this third proposal to amend the COM in bananas.`

Result of the vote

For: 29, against: 64, abstentions: 21.