5. 6. 89 Official Journal of the European Communities No C 139/37 
3.4. Paragraph 4, second indent 
Among the criteria proposed for assessing the effective­
ness of supervision the Commission suggests that the 
Council take account of national legislation with 
respect to sanctions (paragraph 4, second indent). The 
Done at Brussels, 30 March 1989. 
PARTI 
Preliminary comments 
1. The Committee notes that the Commission's price 
proposals for the 1989/1990 marketing year are com­
mensurate with the efforts to ensure continuity and 
cohesion in adjusting Community agriculture to the 
new conditions on Community and world markets. 
2. As in other sectors, this adjustment process must 
be socially acceptable. The Committee has already 
referred to this point in its Opinion of 30 October 
1985 on the perspectives for the common agricultural 
policy (x) and its Opinion of 19 November 1987 on the 
Commission's agricultural proposals for implementing 
the Single Act (2). 
(!) OJ No C 330, 20. 12. 1985. 
(2) OJ No C 356, 31. 12. 1987. Committee doubts the Commission's right to propose 
this. The Committee feels that the Commission does 
not have the right to judge penal sanctions where these 
fall within the sovereignty of the Member States and 
have not been the subject of a transfer of sovereignty. 
The Commission could propose the harmonization of 
the Member States' legislation in this area. 
The Chairman 
of the Economic and Social Committee 
Alberto MASPRONE 
3. Steps must be taken to ensure that the accompany­
ing measures are implemented to the same extent in all 
the Member States. Many measures are not im­
plemented everywhere because the Member States do 
not have the requisite additional funds or do not want 
to commit them. As a result either producers are treated 
unevenly or the desired effect (e.g. cutting production 
with the help of set-aside or compensation for reduced 
income) is not achieved. The Committee calls on the 
Commission to act to solve these problems. 
4. The Commission's price proposals should be seen 
in relation to other measures which the Commission 
has proposed: the future of rural society, environment 
and agriculture, the Community strategy and action 
programme for the forestry sector and the protection 
of natural and semi-natural habitats and wild fauna Opinion on the Commission proposals on the prices for agricultural products 
and on related measures (1989/1990) 
(89/C 139/11) 
On 9 February 1989 the Council decided to consult the Economic and Social Committee, 
under Article 198 of the Treaty establishing the European Economic Community, on the 
abovementioned proposal. 
The Section for Agriculture and Fisheries, which was responsible for preparing the Com­
mittee's work on the subject, adopted its Opinion on 2 March 1989. The rapporteur was Mr 
Schnieders. 
At its 264th plenary session (meeting of 31 March 1989) the Economic and Social Committee 
adopted the following Opinion by 89 votes to nine with five abstentions. 
No C 139/38 Official Journal of the European Communities 5. 6. 89 
and flora. The Committee will express its views on 
these proposals shortly. These communications and 
proposals, which may have an effect on the situation 
of farmers and rural populations, are unfortunately not 
worded in very concrete terms in many cases. The 
Committee calls on the Commission to submit by the 
end of 1989 a comprehensive blueprint for the future 
of agriculture and rural populations, which contains a 
coordinated set of effective, concrete measures. 
General comments 
1. On 11/12 February 1988 the Council decided on 
a five-year solution to the Community's financial prob­
lems. Regardless of what happens in the Community's 
agricultural and food sector, it will not be possible in 
the next five years to exceed the financial ceiling laid 
down by the Council, thereby establishing the sine 
qua non for implementation of the Single Act and 
completion of the internal market by 1993. 
2. Despite this decision there are still a number of 
unsolved problems in the agricultural sector. 
a) The markets in cereals, oilseeds and high-protein 
plants are still not in balance {cf. the Commission's 
account). 
b) The disputes in General Agreement on Tariffs and 
Trade (GATT) have still not been settled. 
c) There has been a deterioration in agricultural 
incomes, especially in crop farming (1). 
d) The conflict between further rationalization 
and environmentally-benign production continues. 
Technological and scientific progress makes for 
higher yields per units of livestock and land, greater 
capital investment, lower manpower levels and thus 
larger farms and fields. To match this, however, 
environmentalists are calling for retention of exten­
sive farming in a countryside broken up by hedge­
rows and interspersed with as many small farms as 
possible. 
e) The set-aside laid down by the Council as a subsidi­
ary scheme has met with only a poor response 
on account of its voluntary nature and inadequate 
Community and national funding. 
(!) On the basis of 1980 = 100, producer prices for cereals and 
rice in the EC (11) fell 22% in real terms between 1983 and 
1987 (Source: Eurostat 1/1988, 5B, p. 176); according to the 
Statistical Office of the European Communities there was a 
further 6,9 % drop in real terms in the third quarter of 1987 
(also on the basis of 1980 = 100). f) No progress has been made towards a common 
European currency. 
3. The Council's decisions of 11/12 February 1988 
aimed at restoring market balance and thereby stabiliz­
ing and improving farm incomes have been put into 
effect only in part. What has been put into effect is 
a restrictive price policy. Stabilizers and production 
thresholds have been introduced for almost all prod­
ucts. 
The following have not been put into effect: 
a) The measures adopted by the Council two years 
ago for the general extensification of production 
and the switchover to non-surplus products have 
still not entered into force. 
b) The additional measures called for by the Council 
in GATT to curb the import of cereal substitutes 
have not yet been implemented. The assumption 
that lower cereal prices would increase cereal con­
sumption and reduce the consumption of substitute 
products has proved to be a fallacy. The import 
prices of cereal substitutes have followed cereal 
prices down, and imports of substitutes have 
increased sharply since 1983. 
c) The scheme to encourage the greater use of cereals 
in animal feed has not yet got off the ground {cf 
the Committee's Opinion of 23 February 1989) (2). 
d) The Council has yet to receive the proposals it has 
requested on the use of agricultural commodities in 
the non-food sector. 
e) So far the Council has laid down only guidelines 
for the additional income support which is designed 
to cushion the fall in incomes brought about by the 
restrictive price policy, the corresponding Regu­
lations have not yet been adopted. 
4.1. Because of the poor response in almost all Mem­
ber States, set-aside is not likely to take any pressure 
off the market in 1989. The Committee urges the Com­
mission to take suitable steps to ensure that better use 
is made of set-aside in all Member States, and that 
the Directive on the extensification of production is 
implemented swiftly or Member States are given the 
option, as an alternative to setting land aside, of obtain­
ing aid on the same terms to grow crops for non-food 
purposes. 
4.2. The Committee would refer to its Opinion of 
27 October 1988 on the current state and future pros­
pects of the GATT/Uruguay Round negotiations as 
regards agriculture and the agro-food sector (3). It 
stresses that the Commission—along with the major 
agricultural exporting countries—should contribute 
towards restoring balance on the world markets. 
(2) OJ No C 102, 24. 4. 1989. 
(3) OJ No C 337, 31. 12. 1988. 
5. 6. 89 Official Journal of the European Communities No C 139/39 
4.3. The Committee has commented favourably on 
income support in earlier Opinions. In view of the high 
extra funds to be provided by the Member States it 
doubts whether this measure will in fact be applied 
throughout the Community. It fears that the income 
support guidelines which have now been adopted by 
the Council will therefore help to cushion the fall in 
incomes brought about by the restrictive price policy 
(stabilizer decisions) for only relatively few producers. 
4.4. The Committee would point out that the stabil­
izer decisions will not contribute towards the long-term 
stabilization of market balance. It therefore calls on the 
Commission to present proposals for better market 
management, especially for cereals and oilseeds. 
4.5. The Committee would point out that the 
measures taken to reduce surpluses have the effect of 
more or less fixing Member States' production balances. 
As a result, less and less use is made of agriculture's 
food-producing potential. The negative effect which 
this has on some Member States' balance of payments 
gives cause for alarm. Hence the need for appropriate 
compensatory measures at Community level and for 
speedy implementation of a common economic and 
monetary policy. 
5. The Commission acknowledges itself that there 
were positive developments last year, such as: 
— The savings in agricultural spending, especially in 
the milk sector; this has left funds to play with 
within the limits imposed by budgetary discipline. 
— The improved situation on the world market. 
Despite that, the Committee thinks that there has 
still not been any long-term stabilization of the 
world markets in cereals and oilseeds. Special fac­
tors such as the US drought are the main reason for 
the current stabilization. Considerable long-term 
savings have been made on the milk market. 
— The significant reduction in agricultural stocks. 
6. The Committee would stress that greater efforts 
must be made to establish a common European cur­
rency. At the very least it will be necessary in the near 
future to establish a fully-fledged European Monetary 
System (EMS) (to which all Member States belong) 
and increase economic cooperation so that monetary 
compensatory amounts (MCA) are no longer required. 
As long as appreciable currency revaluations and 
devaluations continue to be made, it is impossible to 
justify the abolition of MCA. 7. The Committee reiterates its call (*) for measures 
to improve quality. This includes the establishment 
and introduction of quality standards (e.g. for milk 
products) and the improvement of existing standards 
for processed and unprocessed agricultural products 
(e.g. durum wheat). However, these standards must not 
be such as to hamper free competition or product 
innovation. 
8. Community provisions for combatting fraud 
The Committee supports every step taken by the Com­
mission to prevent fraud. Vigorous action must be 
taken to prevent all cases of abuse. In particular, the 
Commission's supervisory powers must be improved 
and steps must be taken to ensure that Member States 
are involved in the vetting. 
9. Practical system for administering the payment of 
aid and collection of levies 
The Committee calls on the Commission to check the 
system for the collection of coresponsibility levies on 
cereals. The application of this year's coresponsibility 
levy has been extremely costly to administer; this could 
have been avoided. The Committee proposes that the 
coresponsibility levy be always fixed the year after. 
However, it would also draw the Commission's atten­
tion to the fact that often agricultural producers and 
firms processing and trading in agricultural produce 
are unwittingly turned into defrauders by petty red 
tape, which is sometimes exacerbated by the Member 
States. This generates a good deal of anger and the 
Community's reputation suffers considerably. The 
Committee calls for precise, clear and down-to-earth 
rules which farmers, food manufacturers and traders 
can understand and satisfy. 
10. Basically, the Commission is proposing hardly 
any changes to prices (apart from reductions for sugar 
beet, durum wheat, field beans and citrus fruit), but in 
reality prices will be depressed considerably by the 
related measures. These cuts will be additional to the 
automatic cuts stemming from the stabilizer decisions. 
The budgetary effect (25 million ECU altogether) is 
relatively small, and the effect which the measures will 
have in helping to restore market balance will also 
be modest. The Commission's negotiating position in 
GATT will not be improved if these proposals are 
implemented, and no additional benefit is likely for the 
consumer either. 
(!) OJ No C 356,31. 12. 1987, p. 35, and OJ No C 175,4. 7. 1988, 
p. 33. 
No C 139/40 Official Journal of the European Communities 5. 6. 89 
In view of the deterioration in agricultural incomes, 
especially in crop farming, the Committee proposes that 
no related measures be taken which will depress prices 
further. 
PART II 
Specific comments 
Cereals 
The Commission proposes no changes in the inter­
vention prices. However, the stabilizer decisions will 
cut prices by 3%. The target prices are also to be 
lowered. Related measures will reduce the intervention 
period in the 1989/1990 marketing year by one month 
and in the 1990/1991 marketing year by two further 
months. In addition, the monthly increases are to be 
reduced by 25 %. On top of the 3 % price cut caused 
by the stabilizers, the support level would thus be 
reduced by a further 4-5 %. The Committee is opposed 
to these proposals. The proposed reductions in the 
target prices would also mean foregoing Community 
preference in part without compensation as regards 
substitute products having been negotiated in GATT. 
The Commission's plan to reduce the number of inter­
vention centres in the Community should be opposed, 
for areas far away from the markets will be put at a 
particular disadvantage. 
With the anticipated decline in EC expenditure and the 
continued lack of progress in using cereals for non-food 
purposes, the Committee recommends suspension of 
the basic coresponsibility levy for the 1989 harvest. 
The Committee would point out that last year it called 
for a return in the Community to the 16% moisture 
content level required for processing. It considers that 
the much vaunted 'quality' policy has been completely 
disregarded and calls for the introduction of tighter 
criteria (moisture, Hagberg index, percentage ash con­
tent, etc.) for aid. 
Durum wheat 
The Committee supports the Commission's efforts to 
restrict the growing of durum wheat to suitable areas. 
The 5,52% reduction proposed by the Commission is 
unacceptable. The resultant drops in income will not 
be offset by the planned increase in production aid 
which is inadequate and which should be in line with 
the losses resulting from the price reduction. 
Rice 
The Committee thinks that the aid paid to switch over 
to indica varieties should remain at the present level. This is justified by the fact that it has only been in 
operation for two years and it is therefore much too 
soon to propose a reduction on the basis of the results, 
which are encouraging, but insufficient to warrant a 
decision. 
The Committee feels that the marketing of Community 
produce internally must be facilitated either by raising 
the import levy or by paying a penetration premium 
for parboiled rice. 
Sugar 
The Committee thinks that the proposed reduction in 
intervention and minimum prices should not be made. 
The sugar sector does not cost the Community budget 
a lot. It is financed by the prices paid by consumers 
and producer levies. Crop farmers have already suffered 
considerable price cutbacks for cereals and oilseeds. 
Consumers should therefore continue to pay the current 
rate, in solidarity with the farmer. 
Fruit and vegetables 
The barriers erected to protect Community produce 
(reference price system unchanged for years, high 
import quotas for produce from the Southern hemi­
sphere without regard for the reference prices) are rela­
tively low. 
The proposed 3 % intervention threshold for apples is 
rejected, as this sector poses no problems. 
Apple imports make selling difficult and the threshold 
is likely to be exceeded very quickly. The Committee 
calls for a review of this threshold. 
The introduction of a new grubbing-up premium for 
apple orchards will only be acceptable if it is 
accompanied by measures encouraging farmers to 
switch to more marketable varieties. 
Citrus fruit 
The Committee considers that the proposed 7,5% 
reduction for oranges and mandarins is acceptable pro­
vided that all quantities withdrawn throughout the 
Community are used for processing; for this it would 
be necessary to expand the list of varieties intended for 
processing. 
The Committee considers that satsumas and Clem­
entines should be treated completely differently from 
mandarins and oranges; hence the blanket 7,5% 
reduction proposed is not acceptable. 
5. 6. 89 Official Journal of the European Communities No C 139/41 
Finally, the Committee considers that some of the sat-
sumas and Clementines for processing must be used as 
segments in syrup (and not just for juice). 
Oilseeds 
As in the case of cereals, a further gradual shortening of 
the intervention period and a reduction of the monthly 
increases should be deferred, especially as compared 
with 1987 enormous savings have been made in the 
market regime costs for oilseeds as a result of the trend 
in world market prices and the stabilizer decisions. 
The Committee would point out that the oils and fats 
market is currently suffering from the fact that the rules 
and regulations are applied very unpredictably (the 
'world market price' used by the Commission as its 
basis can hardly be verified; aid is fixed at random 
without any recognizable principle being applied). 
Finally, the Committee would draw attention to the fact 
that accurate production estimates are of fundamental 
importance to the management of the markets as they 
are used to determine whether or not penalties are 
imposed. 
Olive oil 
Even though something has been done, a further effort 
should be made to promote the consumption of olive 
oil as a way of contributing to healthier diets and 
helping to maintain one characteristic feature of the 
countryside in vast areas of the Community. 
The Committee therefore calls for: an increase in the 
level of aid to producers; an increase in the upper limit 
for small producers to bring it up to at least 500 kg; 
the introduction of a system of permanent aid for 
private storage; and a revision of the increases in the 
intervention price of 'extra virgin' oil. 
Tobacco 
The Committee would reiterate its proposal of 
27 January 1988 (*) that socio-structural measures be 
adopted in the less developed regions to help reduce 
the imbalance on the tobacco market. 
(!) OJ No C 80, 28. 3. 1988, p. 28. 
Done at Brussels, 31 March 1989. Wine 
The proposal to limit the transfer of replanting rights 
is to be welcomed. However, it needs to be spelt out in 
more detail. The transfer of replanting rights should 
only be permitted within the same 'production zones'. 
The Committee would ask the Commission, the 
Council and the Member States to do what they can 
to counteract the campaigns which warn against the 
enjoyment of good wine in moderation without health 
being put at risk. 
Seeds 
The Commission proposes a cut in the aid for fodder-
plant seeds. Since the aid for seeds is laid down in a 
two-year cycle—as planning for the propagation of 
perennials requires—an appropriate increase for the 
1990/1991-1991/1992 period is necessary in order to 
improve the competitiveness of Community seed pro­
duction. 
The Committee calls on the Commission to take 
measures to support research into the improvement of 
quality seeds. 
High-protein crops 
The Committee thinks that a suitable distinction must 
be made between peas and field beans on the basis of 
their different contents and uses. However, there is 
no justification for the sharp 5,6% reduction in the 
minimum price for field beans. 
Milk 
The changes made so far to the milk regime will save 
the Community budget some 2 500-3 000 million ECU 
in the medium term. The drastic adjustments made by 
producers have contributed to these savings. Aid should 
therefore continue to be paid to encourage the use of 
skimmed milk powder in animal feed. However, care 
should be taken to ensure that this aid does not jeopard­
ize supplies for human consumption. Given the state of 
the market, the temporary 1,5% reference suspension 
should be terminated and the coresponsibility levy 
should be suspended, especially as producers face 
deductions of up to 100 % if they exceed the guaranteed 
quantities. 
The Chairman 
of the Economic and Social Committee 
Alberto MASPRONE 
No C 139/42 Official Journal of the European Communities 5. 6. 89 
APPENDIX 
to the Opinion of the Economic and Social Committee 
(fourth paragraph of Article 43 of the Rules of Procedure) 
The following amendments were rejected in the course of the plenary session discussions: 
Point 4.4 
Add new sentence: 
'Serious consideration should now be given to the prompt implementation of effective supply management 
schemes, which for cereals could take the form of a compulsory set-aside scheme.' 
Reasons 
The present policy of price pressure augmented by a voluntary set-aside scheme can create a better market 
balance only in the very long term. Meanwhile, the effects of dramatic fallbacks in income will lead to 
unacceptable political, social and environmental problems. Effective control of production could also pave 
the way for more orderly international trade. 
Voting 
For: 36, against: 44, abstentions: 11. 
Citrus fruit 
Amend the first paragraph to read: 
'The Committee considers that the proposed 7,5% reduction for oranges and mandarines is unacceptable, 
and at the same time demands that all quantities ...' 
Voting 
For: 23, against: 34, abstentions: 21. 
Opinion on the proposal for a Council Directive amending Directive 78/660/EEC on annual 
accounts and Directive 83/349/EEC on consolidated accounts with respect to the exemptions 
for small and medium-sized companies and to the drawing up and publication of accounts 
in ECU (!) 
(89/C 139/12) 
On 4 November 1988 the Council decided to counsult the Economic and Social Committee, 
under Article 54 of the Treaty establishing the European Economic Community, on the 
abovementioned proposal. 
The Section for Industry, Commerce, Crafts and Services, which was responsible for preraring 
the Committee's work on the subject, adopted its Opinion on 1 March 1989. The rapporteur 
was Mr Speirs. 
At its 264th plenary session (meeting of 31 March 1989), the Economic and Social Committee 
adopted the following Opinion by 50 votes in favour, 11 against and one abstention (vote 
recorded). 
The Committee, subject to the specific comments which 
follow, can accept the proposed modification of the 
(!) OJ No C 287, 11. 11. 1988, p. 5. seventh Directive. Whilst totally subscribing to the 
Commission's concept of attempting to reduce adminis­
trative burdens hw small and medium-sized enterprises 
(SME), it nevertheless finds the proposed modification