NoC40/56 OfficialJournaloftheEuropeanCommunities 17.2.92
OpinionontheCommissioncommunication ontheDevelopmentandFutureofthecommon
agriculturalpolicy(CAP)
(92/C40/18
On26February1991theEconomicandSocialCommittee,actingunderthefourthparagraph
ofArticle20ofitsRulesofProcedure,decidedtodrawupanOpinionontheabovementioned
communication .
TheEconomicandSocialCommitteedecidedtoappointMrMantovaniasRapporteur­
Generalwiththetaskofpreparingitsworkonthesubject.
Atits291stplenarysession(meetingof27November1991),theEconomicandSocial
CommitteeadoptedthefollowingOpinionby96votesto26,with11abstentions .
yearshasmadethemamajorproblem.Technical
advancesinthewayfarmsareorganizedhaveplayed
adecisiveroleinthequantitativegrowthofthesector.
2.3.2.Surplusesaremeasuredaccordingtothelevel
ofself-sufficiency—theratioofproductiontodomestic
consumption (theamountsexportedabroadareobvi­
ouslyalsotakenintoaccount).Theproblemwiththis
yardstickisthatdomesticconsumption—andthusdom­
esticdemand—isitselfinfluencedbytheCAP.Aidsfor
consumptionandprocessingcanartificiallyincrease
domesticconsumptiontosuchanextentthattheycan
beseenasdomesticrefunds.
2.3.3.Thoughthelevelofself-sufficiency ,ascalcu­
latedabove,maybeadistortedindicatorofECpro­
ductivity,theECsectoralbreakdown (Table1)isof
interest:1.TheCommission'sjustificationforreform
1.1.TheCommission'sview,asrepresentedindoc.
COM(91)100final,highlightssixmaininterconnected
problemscausedorunresolvedbythecommonagricul­
turalpolicy(CAP)whichmakeachangeofpolicy
necessary :
1)formationandsteadybuild-upofsurpluses;
2)growthofmarket-intervention spending;
3)internationalfrictionscausedbyexportrefunds;
4)lowoverallincreaseinfarmincomes;
5)adistributionofsupportwhichfavoursthelarger
farmsbecauseoftheirlargerproductioncapacity;
6)intensification ofproductionbeyondthelevelcom­
patiblewithresourceconservation .
1.2.AccordingtotheCommission ,thecommon
threadisthattheCAP'semphasison'market'support
andunlimitedguaranteesofdisposalhavebeena
powerfulstimulustoincreaseproduction,andsupport
hasbeentiedtothevolumeofproduction .Table1
LevelofECself-sufficiency in1989:Sectoralbreakdown
Cereals(excludingrice) 113
Processedrice 76
Sugar(') 124
Freshvegetables^) 106
Freshfruit(excludingcitrusfruit)i1)(3) 84
Citrusfruiti1)(3) 67
Wine 91
Eggs(2) 102
Meat(2) 102
ofwhich:Beef/veal 104
Sheepandgoatmeat 83
Pigmeat 103
Poultry 105
Oilsandfats(2) 75
Potatoes 1012.StudyandassessmentoftheCommission'sargu­
ments
2.1.IfweconsidertheCommunityasawhole,the
Commission isundoubtedlyrightthatthesearethe
keyproblemsoftheCAP.However,amoredetailed
analysisofthefirstfourproblems,brokendowninto
productsand/orMemberStates,revealssignificant
variations .
2.2.TheCommitteeconsidersitappropriatetoana­
lyzetheCommission'sargumentstoseewhetherthey
arevalid.
2.3.Formationandsteadybuild-upofsurpluses
2.3.1.Thesustainedbuild-upofproductionsur­
pluses(towhichimportshavecontributed )overthe(»)1987/1988
(2)1988
(3)Theseasonalnatureofthesecropsshouldbenoted.
Source:1990ReportontheAgriculturalSituationintheCommunity .

NoC40/57 17.2.92 OfficialJournaloftheEuropeanCommunities
2.3.4.Inthefirstgroupofproducts—sugarand
cereals—thelevelofself-sufficiency exceeds110(124
forsugar,113forcereals).Asecondgroupwithalevel
ofself-sufficiency ofaround100isalsoinsurplus;
vegetables,beefandveal,pigmeat,poultryandeggs.
Incontrast,athirdgroup(includingsheepmeatand
goatmeat,freshfruit,wine,oilsandfats)isindeficit.terms,itisinterestingtoconsiderthecorelation
betweenEAGGFspendingandproductionvalue.
2.4.3.In1988/1989theECspentECU13,6foreach
ECU100ofproductionvalue,comparedwithECU8,7
in1980/1981.
2.3.5.ECstatisticsforthedairysectordonotindi­
catetheaveragelevelofECself-sufficiency .2.4.4.TherelationbetweenEAGGF(Guarantee)
spendingandproductionvalueisnotalwaysanexact
indicatorofthelevelofsupportforaproduct,which
alsodependsontheguaranteemechanismapplied
(deficiencypayment,protection).TheCommunity
budgetdependsprimarilyontheinstrumentsdeployed
(levies,subsidiesanddomesticrefunds,includingaid
totheconsumer)andontheenduseofsurpluses
(export,storageorwithdrawalfromthemarket).2.3.6.However,thedatafortheindividualproducts
andMemberStatesgenerallyshowaveryhighlevelof
self-sufficiency ,bearingouttheacuteproblemofdairy
surpluses.
2.3.7.Theformationandsteadybuild-upofsur­
pluseshashadtwoadverseeffectshighlightedbythe
Commission :
—higherspendingoftheEuropeanAgriculturalGuid­
anceandGuaranteeFund(EAGGF)(Guarantee),2.5.Frictionsininternationalrelationscausedby
exportrefunds
2.5.1.Exportrefundsareoneofthemaincausesof
thedisputebetweentheECanditscompetitorsonthe
worldmarkets.
—frictionsintheEC'sinternational traderelations
regardingcertainproducts,causedbytherelevant
ECexportsubsidies.Atthesametimedifferences
onnationalmarketshavedeterminedthewaythe
benefitsofmarketsupportaredistributed.2.5.2.Ifwelookatthepercentagebreakdownof
EAGGF(Guarantee)spendingaccordingtotheecon­
omicnatureofthemeasures,theimportanceofexport
refundsbecomesclear.
2.5.3.Inthetwoyears1980/1981theyaccountedfor
over47%ofthetotal,andin1988/1989around40%.
Forthemainproductstradedinternationally ,refunds
in1988/1989accountedfor75%oftotalspendingon
cereals,almost55%formilkproducts,43%forbeef
andveal,78%forpigmeatand74%forsugar.2.3.7.1.SurplusesarepartlytheresultoftheCom­
munity'spricespolicyand,inparticular,ofthefact
thattheannualfixingoffarmpricesmakesonlya
marginaldifferentiation betweenhighandlowquality
products.Inthecerealsector,forinstance,thepriceof
foddergrain,barleyandmaizeisonlyslightlylower
thanthatofwheatofbread-makingquality.Ifithad
limiteditssupporttohigh-qualityproducts,theCom­
munitycouldhavecurbedtheoverallcostofsupport
andgearedproductionmoretowardsmarketdemand.2.5.4.Therelationbetweenspendingonrefundsand
productionvalueroseoverthesameperiod(fromECU
4,1to5,3perECU100ofproductionvalue).
2.4.Greaterexpenditureonmarketintervention2.5.5.ThehighproportionofEAGGF(Guarantee)
spendingallocatedtorefunds,particularlyforproducts
suchascereals,isexplainedinteraliabytheweakness
oftheUSdollar.Anotherfactoristhehighlevelof
storagecosts,whichdifferfromproducttoproduct.
2.4.1.Over51%ofEAGGF(Guarantee)spendingin
1989/1990wentonfoursurplusproducts:milk(18,9%),
cereals(15,3%),beefandveal(9,1%)andsugar(8,1%).
Ifweaddexpenditureoncolzaandsunflower(12,1%),
sheepmeat (5,6%),wine(5%)andoliveoil(6%),we
reach80%oftotalspending.However,itmustbe
rememberedthatintheseyearstheECneededstrategic
reserves .2.6.Lowoverallincreaseinfarmincomes
2.6.1.Inrealterms,ECfarmincomeshaverisenonly
modestlyovertheyears.Betweenthethree-yearperiods
1979-1981and1986-1988,therisewasmuchlowerthan
theincreaseinEAGGFspending.
2.4.2.Alongsidethelevelofspendinginabsolute2.6.2.Analysisoffarmincometrendscannotover

NoC40/58 OfficialJournaloftheEuropeanCommunities17.2.92
looktwoimportantaspects:differencesbetween
countriesandbetweenfarms.
2.6.3.RealincometrendsintheMemberStateshave
differedsignificantly .Insomecountries,incomeshave
remainedstationaryorevenfallen.2)fostereconomicandsocialdevelopmentinrural
areas;
3)alongsideothersectors,meetsociety'schanging
needswithregardtoqualityoflife.
3.2.Suchastrategypursuestwoobjectives :
a)selectionofarangeofcompetitivefarms;
b)preservationofanappropriatenumberoffarmers
andfarms.
3.3.TheCommissiondocumentofJuly1991[doc.
COM(91)258final]announcesthevariousinstruments
tobeenlistedforthispurpose.Thebroadlinesofaction
areasfollows:
1)reductionofthegapbetweenECpricesforcertain
basicproductsandworldmarketprices;2.7.Unbalanceddistributionofmarketsupport
2.7.1.Theincomesupportmechanismguaranteeing
agivendomesticpriceisbyitsverynaturedirectly
proportionaltotheamountproducedandthus(with
allduequalifications )tooverallfarmproduction
capacity.Alldevelopednationshavehitherto
implementedfarmpricepoliciesdesignedtoensurethe
economicandsocialstabilityofruralsociety,particu­
larlyinareaswherefarmsareanimportantsourceof
employment .Thisprincipleunderliesthepaperpresent­
edbytheECfortheagriculturalnegotiationsofthe
GeneralAgreementonTariffsandTrade(GATT).
2.7.2.TheCAPaidsystemusesasitsdirectreference
thequantityproduced,andthusonlyhasanindirect
bearingonfarmincomes.Assmallerfarmsmakea
moremodestcontributiontototalproduction,they
havereceivedasmallershareoftheCommission's
market-support funding.2)decoupledandmodulatedcompensation forthe
resultinglossofincome,partlybymeansoflinkage
withset-asidepolicies;
3)earlyretirement;
4)environmental andforestrymeasures;
5)pursuitoftheexistingstructurespolicy;
6)maintenanceofthosemarketorganizationswhich
sofarseemconsistentwiththeCAP'sbasicaims.2.8.Intensificationofproductionmethodsbeyondthe
levelcompatiblewithresourceconservation
2.8.1.Advancesinproductiontechniqueshave
encouragedanincreasingandevermoreeffectiveinput
ofpesticidesandfertilizers,andtheuseofalternative
energysourcestoreplacemanpower .Thesepractices
haveprovedeconomicallyviableeveninthefaceof
decliningrealandnominalagriculturalprices.Atthe
veryleast,theprincipleofunlimitedguaranteeshas
encouragedtheproductionoflargequantitiesregardless
oftheirimpactontheenvironment .
2.8.2.Oneofthemaingoals(andobligations)of
agriculturalpolicymustbetoalleviatetheenvironmen­
taldamagecausedbyintensivefarming,particularlyin
thesurplussectors.4.Generalcomments
4.1.Anyassessmentoftheproposalsimpliesfirst
andforemostanexamination oftheextenttowhich
theyareconsistentwiththeaimsofthereform:
—improvementoffarmincomes,
3.TheCommissionproposal[doc.COM(91)258
final]—Aimsandinstruments—aguarantee—noleastforthefuture—ofthecom­
petitivenessofefficientfarmsinamoreopeninter­
nationalmarket,
—redistribution ofaid,
—marketbalance,
—maintenanceofruralpopulations ,
—controlofagriculturalspendingbytheEC.3.1.AccordingtotheCommission ,Communityagri­
cultureshould:
1)makeitsowncontributiontoworldagri-foodpro­
ductioninamannerconsistentwithinternational
agri-foodtraderules;

17.2.92 OfficialJournaloftheEuropeanCommunities NoC40/59
forcedonpracticalgroundstorelinquishtheirmarket
share.4.2.Beforeenteringintoadiscussionofthemerits
oftheCommission'sindividualproposals,anoverall
assessmentofthenewCAPiscalledfor.
4.2.1.Oneofthemostrecurringcriticismsofmarket
supportconcernsthelinearwayithasbeenappliedto
allfarmstructuresandalltypesofregions.4.3.2.1.Inthelessfavouredregions,twodifferent
typesoffarmsituationmustbeconsidered :
—situationswherethefarmisinapositiontodiver­
sify,
—areaswherethesoleoverridingaimistoprotectthe
land,andwhereeconomicallyandsociallyviable
agricultureisimpossible .
4.3.2.2.Thesetwotypesofsituationcallfordiffering
formsofassistance,andagriculturalpolicymeasures
willhavetobelinkedtomacroeconomic andsocial
measures(thecostofwhichcannotbeassignedto
agriculturalexpenditure).Thereformofthestructural
fundsgoessomewayinthisdirection.4.2.2.Thislinearapproachwillmakeitdifficultto
overcomesectoral,farmandregionalimbalances,as
hasbeenborneoutbyalargenumberofearlieranalyses
andseveraloftheCommission'sowndocuments .
4.2.3.Thepresentproposalstootakelittleaccount
ofthediversityofagricultureintheCommunity :differ­
encesinfarmstructures,physicalgeographyandthe
generalbackwardness ofvarioussub-regions .
4.4.Thecornerstoneofthereformproposedindoc.
COM(91)258finalisthedistinctionbetweensmalland
largeproducers.Thisdistinctionrestsonthreefurther
basicelements :4.2.4.Toignorespecificregionalfeaturesinthe
nameofthe'singlemarket'philosophymeansinreality
thatinstrumentsofaidwillcontinuetofavoursectors
inamoreadvantageous structural,organizational ,
regionalandmacroeconomic position.Thesituation
thistimeroundwillbeaggravatedbythefactthat
agriculturenowfindsitselfsettingoutonacourse
which,giventheinternationalcontext,willleadtothe
ever-increasing liberalizationofmarketsandcut-backs
inaid.Thismeansthat,inthemediumtolongterm,
theweakestagriculturalsectorswillbepermanently
forcedoutofthemarketunderthepressureofgreater
competitionontheCommunityandinternationalmar­
kets.a)adesiretocontrolsupplybymeansofasuddenand
drasticreductioninpricesandtheintroductionof
compulsoryset-aside;
b)adecisiontoexemptsmallproducersfromtheset­
asideobligation;
c)recognitionoftheneedtodividesupportbetter
betweenfarmers.
4.3.TheCommissionshouldbemoreexplicitabout
whatitintendstheproposedreformstoachieve.4.4.1.HencetheCommission'sdecisiontoofferonly
limitedcompensationtolargeproducersforincome
lossescausedbythedropininstitutionalprices.
4.4.2.IntheCommittee'sview,thisdecisionmust
beassessedinthelightofthetwobasicobjectivesof
thereform:4.3.1.CaremustbetakentopreventthenewCAP
from(a)adverselyaffectingfarmswhichatpresentare
efficientand(b)forcingothersoutofproduction .This
wouldmeantheendnotonlyofsmallmarginalfarms
butalsooftheintermediate oneswhichinnumerical
termsmakeupthebulkoftheEC'sfarmeconomyand
which,givenappropriaterestructuringandinvestment,
couldbecomecompetitive .(a)selectionofanefficientandthereforeviableand
competitiveagriculturalsector;
(b)retentionofanappropriatenumberoffarmers.
4.4.3.Fourpointsneedtobemadehere:
a)withrespecttoobjective(a),itiseconomically ,soci­
allyandpoliticallyunacceptabletotargetsolely4.3.2.TheCommitteeapprovestheaimofensuring
thatagriculturalactivitiesarecarriedoutbythosewho
havethepotentialfordoingsosuccessfully (interms
ofcountries,regionsandtypeoffarmstructure).How­
ever,alternativedevelopmentopportunitiesmustbe
createdforthosecountries,regionsandfarmsectors

NoC40/60 OfficialJournaloftheEuropeanCommunities 17.2.92
thelimitednumberoffarmswhichareatpresent
efficientbutwhichmaynotbeabletosurviveina
muchmorecompetitivemarketthanpresently
exists.ThenewCAPshouldaimtohaveasmany
farmsaspossiblecontributingtotheeconomicper­
formanceofCommunityagriculture;4.4.6.Thenewpolicyforcontrollingsupplymust
clearlybeassessedinthelightofthesethreecategories.
Bettertargetedmeasuresmustthenbedevisedbothto
compensateforlostincomeandtomakeagriculture
competitive .
4.5.TheCommitteenotesthecloselinkbetween
theproposaltoreformtheCAPandtheproblemof
internationaltrade,withparticularreferencetothe
presentUruguayRoundnegotiations .
4.5.1.TheCommitteestressesthatpricesonthe
agriculturalmarketarebynaturemarginal,sincethey
refertotradeinitemsinproductionsurplus.Itis
thereforedifficulttotalkofan'equilibriumprice'ona
totallyfreemarket.b)compulsoryset-asiderisksmakingthesefarmsless
efficient:
c)quantitativeanalysescarriedoutbyanumberof
partiessuggestthatredistributing supportby
exemptingsmallproducersfromcompulsoryset­
asidewillhaveaverylimitedeffect.
Hencethereisnojustificationforameasurewhich
willthreatenfarmsthatarecurrentlyviable.The
redistribution ofsupportistoomodesttohelp
achievethesecondofthetwoobjectivescitedabove;4.6.Moreover,theCommitteeconsidersthatthe
CAPshouldbeseenintermsofaworldcontextof
generalizedsupportfortheagriculturalsector.
4.6.1.Theappenedstatisticsonaidtofarmersin
differentcountriesshowthattheECgrantsmuchless
aidthanthemainworldproducers.d)theadministrative costsofthepolicyshouldnotbe
underestimated .Thelargenumberoffarms
involved,andtheprocedureslaiddownforaid
applications ,willleadtoawelterofredtape;far­
mersarelikelytoexperiencelongdelaysbeforethey
receiveanyaid.4.7.TheCommitteealsowondersaboutrespectfor
thebasicprincipleofCommunitypreference.SinceEC
pricesaretobealignedonworldprices,thispreference
willinevitablytendtodisappear.
4.4.4.TheCommitteethereforeconsidersthatthe
newCAPreformstrategyshouldnotrestonanoversim­
plifieddistinctionbetweensmallfarmersandlargefar­
mers.
5.Adetailedassessmentofvariousproductionsectors
andofaccompanying measures
4.4.5.Asanalternative,theCommitteeproposes
thatallthenewreformmeasuresbebasedonaclassifi­
cationofCommunityfarmsthattakesaccountofthe
current(totalaverage)coststructure.5.1.TheCommitteeconsidersthattheCom­
mission'sproposalsonindividualsectorscanbeas­
sessedbyreferencetotheproposedimplementingregu­
lations(inthiscontexttheCommitteehasalreadymade
itsviewsknownonthedraftregulationonoilseeds)(J).
TheCommitteewouldneverthelessmakeanumberof
commentsconcerningtheoverallrationale.4.4.5.1.Onthebasisofthiseconomiccriterion,
Communityfarmscouldbegroupedintothreebroad
categories :
5.2.Cereals,oilseedsandhigh-proteincrops —averysmallcategoryoffarmswhosetotalaverage
costs(bothvariableandfixedcosts)aremorethan
coveredbythecurrentmarketpriceandtherefore
makean'extraprofit', a)Asalreadynoted,thedistinctionbetweensmall
andlargeproducersmadeintheproposalisnot
anappropriate yardstickforcalculatingaidaccu­
rately.—farmswhichcovertheirvariablecostsandapart
oftheirfixedcosts,atpresentmarketprices,
—marginalfarmswhichcovertheirvariablecosts,but
nottheirfixedcosts,atpresentmarketprices. (*)Doc.COM(91)318finalanddoc.ESC1263/91.

17.2.92 OfficialJournaloftheEuropeanCommunities NoC40/61
Undifferentiated perhectareaidwillturnouttobe
simplysupportforfarmincomes;itwillbeasource
ofadditionalprofitsforthemostefficientcateg­
ories,whereasforpotentiallyviablecategoriesit
willmerelybeashort-livedaidtoensuresurvival,
ratherthanlong-termdevelopment .
b)Inthefinalanalysis,aidlinkedtoaverageregional
yieldswouldperpetuateexistingimbalances
betweenthevariousregionsoftheCommunity .It
wouldinfactbebasedonaphilosophywhichdiffers
onlyslightlyfromthatunderlyingthe'oldCAP'.
Aidwasoriginallylinkedtothefactor-resources of
individualfarms;underthenewproposalhoweveritislinkedtotheaveragefactor-resources ofa
homogenousarea.Inconsequence ,wemerelyhave
aredistributionofaidwithinagivenregionand/or
sub-region,ininverseproportiontoitslevelof
homogeneity :thelesshomogenousthearea,the
greatertheinternalredistribution ofaid.Con­
versely,thedistributionofaidbetweenareasand
regionsishardlyaffected.
c)Theredistributionofaidinfavourofsmallpro­
ducerswould,allinall,belimited.Withineach
country,aidredistribution wouldonlybeona
limitedscale,whilsttakingtheCommunityasa
whole,itwouldcometobetween5%and7%(cf
table2).
Table2
CalculationofredistributionofaidbetweensmallandlargeproducersundertheCommissionproposal
[doc.COM(91)258final]
Farms
(millions)Cereals[usable
agricultural
area(UAA)]
(millionsha)Output
(millionstons)*Yield
(t/ha)Set-aside
(millionsha)Set-aside
hectares
compensatedSet-aside
compensation
(ECUmillions)
Smallproducers 3,7 14,4 56,76 3,94 0 0 0
Largeproducers 0,6 21,6 115,24 5,34 3,24 2,55 645,15
ECTotal 4,3 36 172 4,78 3,24 2,55 645,15
Former
aidsystem
(ECUmillions)%ofaidNewaidsystem
(ECUmillions)
premise1%ofaidNewaidsystem
(ECUmillions)
premise2%ofaid
Smallproducers 3121,80 33% 3121,80 34,1% 3785,76 40,39%
Largeproducers 6338,20 67% 6032,63 65,9% 5471,99 59,11%
ECTotal 9460,00 9154,42 9257,75
*1990/1991
Source:DatacontainedinCommissionCommunication :ThedevelopmentandfutureoftheCommonAgriculturalPolicy,doc.COM(91)258final.
d)Progresstowardsamarketbalanceistobeachieved
intheshorttermbyset-aside(whichisexpectedto
pushoutput8,8%belowthe1989-1990level):inthe
mediumandlong-term,moresubstantialprogressis
tobeensuredbytheexpecteddisappearance of
individualholdingsandmarketsegments.Theprice
topaytoachievethisobjectivewouldseemtobe
ratherhighintermsofemploymentaswellasin
termsofsocio-economic andregionalimbalances .
Fortheseandotherreasons,thecultivationofnon­
foodproductsonset-asidelandshouldbeencour­
aged.5.3.Stockfarming
a)Itisstrikingthatthereisnoreferencehereto
regionalparticularities .TheCommissionproposes,
inparallelwithothermeasures,additionalincen­
tivesforextensivestockfarming [definedasastock­
ingratebelow1,4livestockunits(LU)perhectarein
lessfavouredareasand2LUperhectareelsewhere].
Incertaincasesintensivestockfarming isinevitable
sincefarmsizeimposesconstraintswhichcannot
easilybeovercome.Inthissituation,formoststock­

NoC40/62 OfficialJournaloftheEuropeanCommunities 17.2.92
5.4.4.Hence,althoughtheCommission'sapproach
hassomepositivepoints,itfailstograspenvironment
policy'sfullpotentialforsupportingtheproduction
ofhighqualityfoodstuffsandagritourism,andby
implicationthedevelopmentofthemostdisadvantaged
ruralareas.
5.4.5.Inconclusion,whiletheforestryandearly
retirementschemeshavesomegenerallypositivepoints,
theCommitteeconsidersthattheapproachtakenbythe
agri-environment programmeneedstobesignificantly
reviewed.farmers,extensification wouldnotonlysignifya
radicalchangeofdirectionbutwouldbeobjectively
impossibletoaccomplishgiventheconditionspre­
vailinginthemarketforfarmland.
b)Itisarguedthatthereductioninbeef,vealandmilk
pricesisjustifiedbylowerproductioncostsresulting
fromdecreasesinthepriceofcerealsandconcen­
trates.TheCommitteewouldstressherethatthe
reductioninthepriceofconcentratesisbynomeans
automaticsothatadverseeffectsonincomesmight
leadtoacrisissituationinintensivestockfarming .
5.4.Accompanying measures
5.4.1.Liketheforegoingmeasures,the
accompanying measuresproposedbytheCommission
arenotfullyconsistentwiththestatedbasicaims:
—tomakeagriculturecompetitive,6.Suggestionsforadifferenttypeofreform
6.1.Basically,theaboveanalysesandcomments
revealadeepgulfbetweentheobjectivesofthereform
proposedindoc.COM(91)100finalandtheactions,
measuresandguidelineslaiddownindoc.COM(91)
258final.
6.1.1.Inessence,althoughitispossibletoagree
abouttheobjectivesofthereform,andparticularly
abouttheneedtorebalanceaidbetweenregionsand
farms,theseriousdiscrepancybetweentheoppor­
tunitiesofferedtoCommunityagriculturebythepracti­
calmeasuresproposedontheonehand,andthesignifi­
cantnegativeelementsoftheproposalontheother,
leadtheCommitteetocallforaradicalrethinkofthe
proposalandofthemechanismstobeintroduced .—toretainanappropriatenumberoffarmers.
5.4.2.Theaccompanying measurestooaredesigned
tocontrolsupplyandincreasetheaveragesizeofhold­
ings.
5.4.2.1.Thetwoprogrammes (agri-environmental
action,afforestationofagriculturalland)aretailored
tothefirstaim.
5.4.2.2.Anearlyretirementschemehasbeendevised
tofurtherbothofthetwoaims.
5.4.3.Theagri-environmental actionprogramme
appearstotreatagricultureasanactivitywhichis
largelyatoddswithimprovingthequalityoflife.
5.4.3.1.Inotherwords,environmentpolicyisenlist­
edalmostexclusivelytogiveculturalandideological
substancetosupplycontrols.6.2.TheCommitteebelievesthattherearetwobasic
approachestothebadlyneededreformoftheCAP:
a)acceptingcontinuationoftheslow-movingreform
processwhichobtainedthroughoutthe1980;
b)acceptingthechallengeofaradicalchangeofpolicy,
tobedevisedwiththeactiveparticipationofall
thoseconcerned,togetherwiththeCommunity
institutions,inthespiritofa'secondStresa'.
6.2.1.Thefirstapproachdoesnotmeasureuptothe
complexityofthepresentsituation,asonecanseefrom
theeventsofthelastfewyearsandthedissatisfactionof
thevariouscategoriesconcerned (farmers,consumers,
industrialworkers).
6.2.1.1.Thebudgetguidelineslaiddownin1988
havealsoprovedinadequatetothechangingsituation.
ThecostoftheCAPhasbeenpushedupbythevicious
circleofprices,marketandstorage,althoughthe
increaseisalsopartlytheresultoffactorswhichare
quiteoutsidefarmers'control.
6.2.2.Asfarasthesecondalternative (b)iscon­
cerned,theCommitteebelievesthatacarefully-honed5.4.3.2.Theprogrammegivesonlymarginalcon­
sideration (maintenanceofthelandscape)tothepresent
and/orpotentialpositiveeffectsdirectlylinkedwiththe
productionoffoodstuffs .
5.4.3.3.Twoexampleswillsuffice:thereisnoincen­
tivetoproducehigherqualityproducts,particularly
fromahealth/hygieneviewpoint.Thereisnoaidpolicy
foragritourismandthusforthetypicallocalproducts
whichareinmanywaysamainstayofagritourism .

NoC40/63 17.2.92 OfficialJournaloftheEuropeanCommunities
6.4.3.Achievementoftheaboveobjective,asastrat­
egytoprotectthelivelihoodofawiderangeofpro­
fessionalproducers,willalsoservetofurtherathird
policycomponent :safeguardingtheeconomicand
socialdevelopmentofruralareas.approachisneededtoidentifyasetofbasicpolicy
componentswhich,whilststillgearedtoreformofthe
CAP,wouldbemoreinlinewiththeoverallobjectives
oftheCommissionandwiththeprinciplesenshrined
intheTreatyofRome.
6.2.3.Thesefundamentalpolicycomponents ,which
callforconcreteproposals,canbesummarizedasfol­
lows:6.4.4.Onewayofprotectingfarmers'incomes
wouldbetoestablishaCommunityAgricultural
InsuranceSchemewhichwouldreceivefinancialsup­
portfromtheECbudgetandwouldnotdistortGATT
agreements .Suchschemeshaveprovedtobeeffectivein
countriesbothinsideandoutsidetheEC(e.g.Canada)
wheretheyalreadyoperate. 6.3.Redistributionofaid
6.5.Safeguardingoftheeconomicandsocialdevelop­
mentofruralareas6.3.1.Theredistribution ofaidisanindicationofa
changeinpolicy;withoutitnoreformofCAPwould
beacceptable .
6.3.2.Redistribution shouldoperateonaregional
basisandbetweenthevariouscomponentsof'agri­
business'aswellasbetweendifferenttypesoffarms.6.5.1.No-onecanreallybelievethatthedevelop­
mentofagriculture,whichaccountsforroughlyhalfof
theCommunity'stotalareaandprovidesworkfora
largepartofitspopulation,canbebasedon(a)a
workforceofpensionersand'guardiansofthecountry­
side'and(b)anexiguousrangeofefficient,competitive
farms.6.3.3.Asecondpoint(qualifyingthefirst)wouldbe
toidentifythedestinationofredistributedaidinterms
oftheusetowhichitisput.
6.3.4.Itisnotenoughtoaffirmthataidshouldbe
redistributed inthewaysetoutintheCommission's
proposal.
6.3.5.TheCommitteethereforeurgestheCom­
missiontopresentaneffectivestructuralandregional
programmetohelpreducethemostblatantincome
imbalances .6.5.2.Aidredistribution andproductioncapacity
factorsimplysafeguardingagriculturalemployment
(bothforfarmersandtheirfamilies,andforfarmwork­
ers).However,theCommissionproposalsoverlookthe
factthataconsiderableproportionofagriculturalwork
iscarriedoutbypermanentandcasuallabourersand
thatneitherofthesecategorieswillinanywaybe
protectedagainsttheconsequencesofthenewCAP.
Similarly,thereisnomentionofthemanypeople
employedinthefoodindustry,particularlyincooperat­
iveswhoseprospectsarecloselylinkedtothoseof
farms.Norshoulditbeforgottenthatthecostof
creatingalternativejobsisextremelyhighnowadays,
andthattheEC'ssocialandregionalpolicieshave
hadonlymodestsuccessintacklingpresentlevelsof
unemployment .6.4.Incomeguarantees
6.4.1.Incomeguaranteesforpotentiallyviablefarms
(directaid)shouldinsomewaybetiedtotheirmedium
andlongtermabilitytoproducecompetitively .
6.4.2.AccordinglytheCommitteecannotacceptin
anyformthewidespreadpenalizationofintensivepro­
duction,whichisnecessitatedbyenvironmental ,social
andtechnologicalfactorsinthevariousruralareasof
theCommunity .Anintensivefarmisoftenthefruitof
majorinvestmentswhichhavenotbeenfullyamortized .
Fromthispointofviewtheadoptionofalinearset­
asideschemenotonlylackscoherencebutwillseverely
disruptthefragilesocio-economic equilibriaofthevari­
ousgeographicalareasandtypesoffarm.Insuchcases,
set-asidecoulddiscouragetenantfarmingbycreating
problemsforfarmerswhodonotowntheirownland.6.5.3.AnappropriatereformoftheCAPwillhave
tobebackedbyCommunitylegislationwhichpaves
thewayfortheadoptionofeffectivesocialmeasures
tocushiontheeffectsofrestructuring .Theseshould
cover:
a)thecreationofjobsoutsidethefarmsector;
b)publicactiontohelpfarmworkersfindjobs,andthe
setting-upof'environmental workshops'toprovide
temporaryworkfortemporarilyunemployedfarm­
workers;

17.2.92 NoC40/64 OfficialJournaloftheEuropeanCommunities
6.6.2.TheCommissionhasnotgivensufficient
consideration tothepossibilitythatareasonable
differentiation betweenhighandlowqualityproducts
intheannualprice-fixingcouldreduceproduction
withouthavingtoresorttocompensatory mechanisms
whichareofdoubtfuleffectiveness ,complicatedand
costlytoapply,anddifficulttomanageasregards
monitoring .c)vocationalskillingandspecializationforyoung
people;
d)stepstoensurethatolderfarmworkershaveareal,
discretionarypossibilitytotakeearlyretirement;
e)moreflexibilityintheemploymentofseasonal
workers,withtheuseoftrainingcoursesandlink­
ageofthevariousperiodsofagriculturalandnon-
agriculturalemployment ;
f)financialsupportforholdingswishingtoswitchto
non-agricultural activitieswhilemaintainingexist­
ingemploymentlevels.
6.6.Promotionofproductquality
6.6.1.TheCommitteethinksthattheCommunity
shouldpromoteproductqualityratherthanusedrastic
pricecutsasaninstrumentforreducingsurpluses.The
adoptionofvirtuallyidenticalpricesforawholegroup
ofproductsdoesnotencouragethefarmertoimprove
quality.6.7.AnoverallviewofCommunitypolicies
6.7.1.Alastfactoristheneedtodesign
accompanying policiessothattheycomplementpro­
ductiveactivities,ratherthanreplacingorstopping
them.Thereformthereforecannotignoretheneedto
reviewaccompanying policies(environment ,taxation,
andsoon).
DoneatBrussels,27November1991.
TheChairman
oftheEconomicandSocialCommittee
FrancoisSTAEDELIN
APPENDIX I
totheOpinionoftheEconomicandSocialCommittee
Thefollowingmembers,presentorrepresented,votedinfavouroftheOpinion:
Mr/Mrs/Miss:AbejonResa,Amato,Andrade,Arena,AtaideFerreira,Bagliano,Barbagli,Beltrami,Bento
Gonçalves,Bernabei,Bleser,Bonvicini,Bottazzi,Bredima-Savopoulou ,Burnel.VascoCai,Cassina,Cavaleiro
Brandão,CeballoHerrero,Chevalier,Christie,Colombo,VanDam,vonderDecken,d'Elia,vanDijk,
Donck,Draijer,Dunkel,Elstner,Engelen-Kefer ,Etty,ForgasiCabrera,Frandi,GafoFernandez,Germozzi,
Giatras,GomezMartinez,Gottero,Gredal,Groben,HovgaardJakobsen,Jenkins,Kazazis,deKnegt,
Korfiatis,LacaMartin,LandaburuDeSilva,Lappas,Larsen,Laur,Liverani,Lyons,MachadoVonTschusi,
Maddocks,Mantovani,MargalefMasia,Masucci,MayayoBello,McGarry,MerceJuste,Mercier,Morales,
Morize,Morris,MuñizGuardado,NielsenB.,NielsenP.,Noordwal,OvideEtienne,PaneròFlores,Pardon,
Pasquali,Pellarini,PelletierCh.,PelletierR.,Perrin-Pelletier ,Pompen,QuevedoRojo,Ramaekers,Rangoni
Machiavelli,Rebuffel,Saitis,SantillanCabeza,Sauwens,Schade-Poulsen ,Schnieders,Scully,Spyroudis,
Theonas,Tiemann,VelascoMancebo,Verboven,Wagenmans ,Waldack,Wick.
Thefollowingmembers,presentorrepresented,votedagainsttheOpinion:
Mr/Mrs/Miss:Barrow,Beale,Carroll,Connellan,Freeman,Gardner,Green,Hilkens,Kaaris,Little,Mobbs,
Moreland,Pearson,Pricolo,Proumens,Rea,Robinson,RodriguezGarcia-Caro,Roseingrave ,Sala,Slipman,
Stokkers,Strauss,Tukker,Tyrie,Whitworth .
Thefollowingmembers,presentorrepresented,abstained:
Mr/Mrs/Miss:Bell,Decaillon,Gaffron,Hagen,Kafka,Low,Meyer-Horn ,Petersen,Romoli,Solari,Tixier.

17.2.92 OfficialJournaloftheEuropeanCommunities NoC40/65
APPENDIX II
totheOpinionoftheEconomicandSocialCommittee
Thefollowingamendmentsweredefeatedinthecourseofthedebate:
Point5.3
Attheendofparagraphb),addthefollowing:
'Aswellaspricingmeasures,quotameasuresmustthereforebekeptinforceforthetimebeing.'
Voting
For:48,against:81,abstentions :8.
Points6.2.2and6.2.3
Amendtoreadasfollows:
'Asfarasthesecondalternative (b)isconcerned,acarefully-honed approachisneededfirstandforemost.
Thegeneralpremisefortheabovementioned radicalreformoftheCAPmustbethattherelevantprovisions
oftheEECTreatyshouldaimtoallowagriculturetodevelopintoahealthyandefficienteconomicsector,
withpricesbeingmainlydeterminedbymarketfactors(interplayofsupplyanddemand).
Productionsurplusescouldthenbecomeathingofthepast,anditwouldnolongerbenecessarytosupport
salestothirdcountrieswithsubstantialexportsubsidies.
Alongsidethisgeneralpremise,thefollowingpointsalsodeserveattentioninthecontextofCAPreform.'
Reasons
Theproposedadditionto6.2.2isnecessaryinordertoclarifythedirectionwhichthe'radicalreform'put
forwardin6.2shouldtake.Thereformshouldfirstlyensurethatagricultureremainsand/orbecomesa
healthyeconomicsectorabletosecureitselfaplaceonthemarketandtooperateasfaraspossiblewithout
thehelpofsubsidies.Notuntilthathasbeenmadeclearcanonestarttodiscusssuchmattersasthe
redistributionofaid,incomeguaranteesandtheproblemsofruralsociety.
Voting
For:35,against:106,abstentions :4.
NewPoint6.2.2.1
InsertthefollowingnewPoint6.2.2.1immediatelyafter6.2.2toreadasfollows:
'6.2.2.1.Inacceptingthechallengeofaradicalchangeofpolicyreflectedin6.2(b)above,andinthespirit
ofa«SecondStresa»,theCommitteerequeststhattheCommissionexamineanalternativestrategywhich
wouldalso:
a)containtheECbudgetcostoftheCAP;
b)controlsurplusproduction;
c)protecttheenvironment ;
d)safeguardfarmincomes;
e)promoteeconomicandsocialcohesion.
Theobjectiveistoachievethisinamannerwhichmaximizesthebenefitstoallcitizensandovercomes
internationaldisputesarisingfromstructuralsurpluses,andavoidsthefossilizationofECagriculture .

17.2.92 NoC40/66 OfficialJournaloftheEuropeanCommunities
Asfarasfarmersareconcerned,anadaptedCAPshouldprovideanadequateincometoviableand
professionalproducerswhileensuringthatthelessviablefarmerscancontinuetoliveonandworktheland.
TheCommitteethereforeproposesthattheCommissionexplorethepossibilityofCAPreformwhichwould
bebasedon:
—asystemofphysicalon-farmproductioncontrolswhosepurposewouldbetoensurethatfoodproduction
islimitedtocovertheCommunity'sinternalfoodandfeedrequirementspluscommerciallyviableexports,
—farmpricesthenbeingfixedtoprovideproducerswithanadequateincome,
—agradualphasing-outonamultinationalbasisofexportsubsidieswhichwillnolongerberequiredas
productionisreinedbacktocoverinternaldemandandcommerciallyviablesalestothirdcountries,
—agreaterelementofimportcontrolwithoutwhichitwouldnotbemeaningfultointroducewideranging
productioncontrols.
TheCommitteebelievesthat,byacceptingthegradualphasing-outofexportsubsidies,theECwillbeable
tonegotiatemoreeffectiveimportcontrols.
Inparallelwiththeseproposals,theCommissionshouldintroduceamoreeffectiveregionalpolicyto
recognizemoreclearlythevitalrolewhichfarmersplayinthesocial,politicalandeconomiclifeofthe
disadvantaged andperipheralregionsoftheCommunity.'
Reasons
1.Guaranteethelongtermviabilityoffamilyfarmsthroughproperlymanagedmarketandpricestructures
inconjunctionwithcoherentinternalandexternalpolicieswhichfullyrespectCommunitypreference
andmaintainpricesbasedonobjectivecriteriaatalevelthatensuresafairstandardoflivingforfamily
farms.
2.Ensurethathigherenvironmental productionandqualitystandardsofECagriculturearefullytaken
accountofinCommunitypreference.
3.Ensuretheviabilityandcompetitiveness ofECagricultureasacommercialsectorthroughacomprehensive
EC-fundedstructureprogrammewhichwillpromotethecontinuousimprovementofproductionmethods,
technologyandqualityandensurethecontinuedaccessofyoungtrainedfarmerstoallsectors.
4.Promoteeconomicandsocialcohesionandreducethedisparityofincomebetweenregionsofthe
CommunitybytakingfullaccountoftheregionalimportanceofagricultureindifferentMemberStates.
5.Provideanintegralprogrammetoalleviateandsolvetheproblemoflowincomesamongfarmfamilies.
ThoseobjectivescanbestbeachievedbyaCAPReformbasedontheprinciplesof:
1.Communitypreference;
2.Supplymanagement ;
3.AfairstandardoflivingfortheagriculturalCommunity ;
4.Duetreatmentofagriculture-dependent regions,takingfullaccountoftheneedtoreducethedisparity
inincomebetweenregionsandasrequiredbytheSingleEuropeanAct.
Voting
For:28,against:89,abstentions :13.