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1HE C O M M I S S I O N  OF THE EUROPEAN COMMUNIT IES
C0M(84) 767final 
Brussels, 30  January 1985
THE SITUATION OF THE AGRICULTURAL MARKETS 
REPORT 1984
(report from the Commission to the Council)

THE C O M M I S S I O N  OF THE EUROPEAN COM MU N I T I E S
COM(84) 767final 
Brussels, 30 January 1985
THE SITUATION OF THE AGRICULTURAL MARKETS 
REPORT 1984
(report from the Commission to the Council)
C0M(84) 767 final

-  2 -
CONTENTS
THE SITUATION ON THE AGRICULTURAL MARKETS 
1984 REPORT
Page
A. AGRICULTURAL MARKETS - SUMMARY
Introduction, situation on the principal markets and 4
outlook for the agricultural markets
B. ANALYSIS BY SECTOR
I.  Products subject to common market organization
1. Cereals 15
2. Rice 35
3. Sugar 41
4. Olive oil 51
5. Oilseeds and protein seeds 56
6.  Dried fodder; peas and field beans 62
7. Fibre flax and hemp 66
8.  Seeds 73
9. Wine 76
10. Raw tobacco 83
11. Fruit, vegetables and live plants
a. French fruit and vegetables 89
b. Processed fruit and vegetables 100
c. Live plants 104
12. Hops 106
13. Milk and milk products 107
14. Beef and veal 124
15. Pigmeat 136
16. Eggs 145
17. Poultrymeat 148
18. Silkworms 151
19. Sheepmeat 152
II· Products not subject to common market organization
20. a. Agricultural alcohol I59
b. Potatoes 160
c. Honey 164
C. SURVEY OF CERTAIN GROUPS OF SECTORS
21. Feedingstuffs 166
22. Meat 170
23. Oils and fats I73

- 3 -
This report was drafted in autumn 1984 and a summary appeared in "The 
Agricultural Situation in the Community - 1984 Report" published in 
conjunction with the eighteenth General Report on the Activities of the 
European Communities.

- 4 -
A - MARKETS FOR AGRICULTURAL PRODUCTS
INTRODUCTION
1. This chapter reviews the main developments in agriculture and the
agricultural markets since the Commission published its proposal for the  
"Adjustment of the Common Agricultural Policy" in July 1983 (COM(83) 500  
final of 28.7.1983). This review confirms the necessity to complete the  
adaptation of the Common Agricultural Policy which the Council began on  
31 March 1984.
2. Adaptation of the CAP became necessary because the incentives offered to  
producers were no longer consistent with the present and the foreseeable  
needs of the markets. Demand for many agricultural products is either 
stagnant or declining while the productive potential of European  
agriculture continues to increase. The three main approaches used to  
effect adaptation of common market organization are :
- the extension of guarantee thresholds to agricultural products where  
market imbalances exist, are likely to exist and/or where expenditure is  
growing rapidly;
- the pursuit of a restrictive price policy with particular attention being  
paid to the development of a more realistic hierarchy of prices;
- the improvement of market management through the development of more  
flexible instruments available at short notice.
The following review shows the extent to which these three lines of policy  
are now being implemented, but also the extent to which they need to be  
pressed further.

- 5 -
MILK
General
3. Four major factors have influenced the milk market. For a decade the  
productive potential of the dairy herd has grown by some 2,5% per annum.,  
the demand for milk and milk products has shifted from mo.dest growth to  
stagnation or decline. During the 1980s, the world market for dairy  
product· has contracted and the resulting build-up of atocka has further 
depressed prices. In addition, for a number of years the change in the  
relative value of the fat and protein components of milk has not been  
reflected in support prices.
4. The size of the dairy herd (about 25 million cows) has not altered  
significantly since the 1960s. However, improvements in farm structure,  
the genetic characteristics of cows, the greater availability of cheap  
feedingstuffs and improved farm management pushed deliveries of milk to  
dairies up from 81 million tons in 1973 to 104 million tons in 1983.
During this period consumption rose from 76 million tons in 1973 to a peak  
of 85 million tons in 1981, followed by a fall to 82 million tons in 1983.
5.  The decline in net exports from a peak of 16 million tons milk equivalent  
in 1980 to 10 million tons in 1983 has resulted in increased stocks held in  
the form of butter and skim-milk powder.
Before quotas
6. During 1983, milk deliveries continued to increase to total 104 million  
tons in 1983 (105 million tons during the 1983/84 marketing year). Without  
the introduction of quotas deliveries were expected to increase by a  
further 3% in 1984 (an increase of 3% was recorded for the first quarter of  
1984 compared with the first quarter of 1983).

-  6 -
7. Production of butter and skim-milk powder rose by 10% in 1983 (that is to  
say, at three times the rate of increase of milk deliveries), while  
production of whole milk powder and condensed milk declined. The  
production of cheese and fresh milk products rose slightly. Consumption of  
almost all dairy products fell slightly in 1983. The world market for  
dairy products contracted sharply in 1983» Both the quantities sold and  
the prices obtained fell. The net loss to the Community (despite increased  
sales of cheese) represented a loss of some two million tons in milk  
equivalent with the brunt being borne by exports of skim-milk powder (down  
by 45%) where the expansion of non-commercial transactions mainly  
influenced by the USA has become the dominant market characteristic. The  
result was a dramatic build-up of stocks. Community stocks of butter  
(including those in private storage for which an aid is paid) rose from  
less than 400.000 tons in January 1983 to 850.000 tons on 1 January 1984  
and 900.000 tons on 31 March. Stock of skim-milk powder also increased  
from less than 600.000 tons in January 1983 to nearly 1 million by January 
1984 before falling to 900.000 tons at 31 March.
Quotas
8. The substantial imbalance in the dairy sector finally convinced Council  
that price policy alone (unless carried to politically unacceptable 
extremes) could not cope with the ever increasing gap between supply and  
demand. After some delay and some adjustments, Council adopted the  
Commission's proposals for a Super-levy system. The operation of this  
system, which is administered by national authorities within the framework  
of Community rules, is described in detail in Regulation (EEC) no. 1371/84  
of the Commission. The objective is to cut back deliveries of milk to 99  
million tons in the 1984/85 marketing year and 98 million tons in  
subsequent years. Sales direct from the farm are governed by analogous
legislation.
After quotas
9. Because of the delay in introducing the super-levy systeU and the
stagnation or decline in demand both at home and abroad, it is clear that  
the Council's decisions in isolation are insufficient to.bring about a  
return to a balanced market. Moreover, the costs of stocks (storage costs,  
depreciation) as well as the downward pressure that such stock levels exert  
on prices required a significant effort to halt the rise in stock levels  
and if possible to reduce them to more reasonable levels. The Council  
adopted a new scheme for the subsidized disposal of semi-skim milk for  
animal feed on 17 July. Since this measure alone was insufficient, the  
Commission decided in July 1984 to increase its own efforts to dispose of  
dairy produce. The additional measures envisaged by the Commission are :

- 7 -
1 0.the sale of old butter for processing into "ghee" at a discount,
foilowed by sales to what until recently had been traditional markets 
in the Middle East,
the sale out of intervention of older butter (at least 6 months old)  
for export; '
- the extension to other food industries of the possibility of purchases  
of reduced-price butter;
a further effort to make butter available at lower prices to consumers.
As the graph below illustrates, the implementation of the super-levy  
system together with the additional disposal schemes proposed by the  
Commission offer the prospect of improving the balance on the Community  
dairy market. These projections take account of the increased demand in  
certain Member States which can be expected due on the one hand to the  
standardization of the rules of payment for purchases into intervention  
and, on the other hand, the adjustment of the relative values of the  
protein and butter fat components of milk.
;re 11. Nevertheless, the Commission decided that exceptional measures wei
needed to reduce the level of stocks in the shorter term. Two specific  
measures have been engaged, the so-called "Christmas Butter" scheme and  
particular disposal measures for very old butter to non-traditional  
outlets. Despite the substantial cost, the subsidized sale to European  
consumers of some 200.000 tons of butter at half the intervention price  
is being undertaken; 84% of this butter will be provided from  
intervention stocks. The cost-effectiveness of this measure should be  
higher than for similar operations carried out in the past, due to the  
10% decrease in butter prices at the beginning of the 1984/85 marketing  
year. The disposal of very old butter held in intervention provides  
particular marketing difficulties. The Commission has reason to believe  
that opportunities exist to create a market for such very old butter  
(produced before April 1983), notably the USSR, provided the price is  
competitive with other oils and fats. The Commission has set as a  
precondition for such sales that significant quantities of butter (at  
least 50.000 tons) should have been exported at a normal price, in which  
case a similar quantity of very old butter may be exported at a special  
price to the same destination. The Commission has reported these  
measures bilaterally to its trading partners and to the GATT according to  
the normal procedure.

— 8 -
Graph 7 - EC supply and demand for milk and milk products
EC SUPPLY AND DEMAND FOR MILK AND MILK PRODUCTS
120
110
100
80 82
1 ) Deliveries to dairies except fo r Greece where total m ilk production ha* been used
2 ) C  onsumption is calculated on the basi* of a global m ilk balance (m ilk equivalent on
hutterfitt bnsls) _____________________ B
12
. The improved outlook for the dairy sector reflects the implementation of  
the three main approaches set out in the introduction to this chapter  
required for the adaptation of the CAP. However, the graph highlights  
the continued dependence of the Community on the existence of substantial  
export outlets in order to maintain a balanced market for milk and milk  
products.
THE MEAT MARKETS
13. The Community meat markets are dominated by beef and pigmeat with
significant consumption of sheepmeat and poultrymeat. While the patterns  
of livestock supply are specific to each meat, demand is Integrated and  
there is increasing substitution between meats.

- 9 -
The beef market
14. Beef supply is characterized by a pluriannual cycle whose last trough
occurred in 1982. Production in 1983 increased from 6,7 million tons in  
1982 to 6,9 million tons and is expected to be at least 7,2 million tons  
in 1984. Increased availabilities in 1984 are primarily due to the  
cyclic pattern, with a modest increase attributable to increased cow  
culling taking place from the autumn onwards.
15. Market prices for beef have not increased significantly over the last  
year. While calf prices have remained firm, cattle prices have been  
depressed. The low prices for beef have reflected the high level of  
self-supply. There has been a steady build-up of stocks (255.000 tons in  
January 1983, 432.000 tons in January 1984 and 503.000 tons in October  
1984) which has also depressed market prices.
16. The year 1984 has been characterized by limited availability of beef in  
the other main exporting countries. In consequence, gross exports of  
Community beef are expected to reach a record level (probably more than  
800.000 tonnes) despite reduced levels of export refunds. In response to  
the persistent depressed state of the market, in August 1984 the  
Commission introduced greater flexibility into the operation of  
intervention and a specially attractive private storage scheme to relieve  
the pressure on a depressed market. The result has been that in spite of  
adverse market conditions, the fall in market prices has been arrested.
17. (An important related measure was adopted by the Council on 31 March  
1984. For an experimental period of three years, the Community will  
progressively apply a common classification grid for purchases into  
intervention. After a few months of operation, the result has been a  
significant step towards common price levels in the various regional  
markets.)
18. (The Council insisted on the renewal of the variable beef premium for the  
British beef market, which the Commission had proposed should lapse. In  
order to reduce the potentially distorting effect of this system on the  
Community and export markets, a "clawback" system was introduced in May  
1984. The Commission will report to Council on the operation of the  
revised system in time for the 1985/86 price review.)

-  10  -
The sheepmeat market
19 In October 1983, the Commission completed a review of the sheepmeat
market (1). As a result the Commission proposed a number of changes xn
the market organization. In the event, the Council failed to follow the  
majority of these recommendations, notably the proposal to fix the r e ^ e 
on a calendar year basis a year ahead, in order that producers would be  
better able to plan production and the introduction of a ceiling on the  
variable premium in the UK together with a minimum import price system.
20. The Council did adopt a revised seasonal scale designed to provide an
incentive to market lambs in Great Britain outside the period of glut in  
the summer months. This adaptation is designed to encourage more orderly  
marketing of sheepmeat throughout the year and is intended to benefit  
producers in all Member States. It is too early to say that the scheme  
has been an unqualified success. However, from the information availab e  
to date, total British producers' returns since the new scale was  
installed have certainly not declined. At the time of writing this  
report, it is premature to say precisely what seasonal scale will b  
proposed for the next f e t i n g  year. It would seen, prudent to study the  
results of the autumn marketing before arriving at conclusions. However, 
due consideration will be given to the argument that the drop in the  
seasonal scale at the beginning of the summer is unnecessarily abrupt.
The pigmeat market
21 Pigmeat supply is characterized by a shorter cycle than that which
prevails iS the beef sector. At the end of 1983, market prices on an 
oversupplied market were reaching a disturbingly low level in some 
areas. In response, the Commission introduced a private storage scheme 
in January 1984 which successfully absorbed the temporary glut and 
ensured that adequate supplies were available later m  the y e a r when the 
downturn in the production cycle was expected. Over an 18-month period, 
pig producers incomes had therefore been squeezed by relatively low 
market returns and input costs which had risen due to the steady in c r e a s e  
in the value of the US dollar, however, they have benefited in the las 
half of 1984 from the beneficial effects and from the decreasing cos s o 
Community—produced feedstuffs.
(1) C0M(83) 585 final.

-  11  -
22. A notable improvement in the integration of the European market has taken  
piaee over the period covered by this report, with the progressive  
demobilization of the monetary compensatory amounts applicable in this  
market organization. The maximum net MCA payable on an intra-Community  
shipment has fallen from 17,4 points in March 1983 to 9,8 points in
November 1983, to 6,8 points in November 1984 and will fall to 4,4 points  
m  January 1985. r
CEREALS
General
23,The bulk of cereals produced and consumed in the Community are wheat and  
barley where the Community has a net export balance. Significant  
quantities of maize are produced although substantial imports are required  
in order to meet domestic demand. Since 1973, the area devoted to grain  
production has increased modestly while yields have risen significantly  
with a greater proportion of wheat being produced for animal feed. Since  
the late 1970s there has been a substantial increase in the use made of  
imported cereals substitutes, notably manioc and corn gluten feed. Given  
the modest increase in demand for animal feed, the cereals market has been  
depressed.
24. The imports of manioc and brans and molasses have recently been stabilized  
or contained. However the increase in imports of corn gluten feed is at  
present uncontrolled and the Community has initiated discussions with the  
main supplier (the USA) with a view to setting a more orderly framework  
for imports in order to avoid intolerable pressure on the Community feed  
market.
25. It has long been a tenet of Commission policy that the gap between  
Community prices and those applied by its main competitors should be  
reduced. The Commission proposed the rapid establishment of a more  
appropriate price relationship between different qualities of wheat and  
that higher quality standards should be established for both wheat and  
barley. Substantial progress has been made this year.
The 1983/84 marketing year
26. Disposal of the substantial wheat harvest of 1983 was assisted by an
improved market for animal feed. The improvement came in part from the  
strong dollar, lower US maize and soya harvests which raised the price of  
competing supplies, and in the Community a smaller barley crop and lower

-  12  -
prices for feed wheat. This favourable combination allowed the record  
carry-over of commercial stocks of over 10 million tons.
Exports were limited to 13 million tons, representing a cautious 
interpretation of our GATT obligations, with the innovation that a modest  
quantity of denatured wheat (for animal feed) was exported.
The 1984/85 marketing year
27. The guarantee threshold which operates - retroactively - in the cereals  
sector was not triggered during the 1984 price review. Support prices  
were reduced by 1% in ECU terms but they increased significantly in  
national currency and the Council failed to adopt the proposed  
improvements in quality standards proposed by the Commission. The  
Commission's own powers have since been used to define standards, if not  
to improve them.
1984 has provided ideal growing conditions for high-yielding varieties of  
wheat in the Community. As a result this year’s harvest has produced a  
record crop and average market prices are significantly below the nominal  
intervention price. Fortunately a significant improvement in export 
markets, attributable to another poor harvest in the USSR has provided an  
outlet for some of the surplus production, while the high value of the  
dollar renders Community grain more competitive than ever before. The  
outlook for the remainder of the marketing year is therefore one where low  
prices offset by bouyant demand should enable the Community to dispose of  
most of this year's harvest, while stocks return to a higher level than is  
desirable in terms of market management for 1985/86 :  high carryover  
stocks combined with further increases in plantings could bring severe  
problems if combined with a high-yielding harvest and a lower dollar.
WINE
28. The market organization for wine has been under stress during the 1983/84  
marketing year. Despite very high expenditure for the distillation of  
surplus table wines, market prices have remained at low levels (around  
70%) in relation to the guide price. During the 1983/84 marketing year,  
approximately one third of table wine production was withdrawn from the
market.

- 13 -
29. At the time of the 1984/85 price review the Council of Ministers was not  
convinced that the wine sector was facing major difficulties and contented  
itself with freezing the guide prices (and thereby the distillation  
prices) for table wines. One proposal to reduce the financial burden for  
FEOGA (estimated to exceed 1 billion ECU in 1984) in the wine sector was  
adopted — the abolition of short-term storage aids for wine. However, the  
economic effect of this measure was attenuated by the authorization  
granted to producer Member States to operate a comparable  
nationally-financed scheme for one year.
30. These decisions were taken against the background of forecast supply
balance sheets for the wine sector based on Member States'  returns which 
indicated the end of year stocks of table wine at around five months  
supply - a normal volume to carry over to the next marketing year.
However, this proved to be a very serious underestimate and in view of the  
depressed state of the wine market at that time, the Commission was  
requested to implement the measure of "exceptional distillation" (a high  
price distillation for up to 5 mio hi of wine) to support producer's  
incomes. The Commission was unable to accede to this request. Two main  
reasons justified such a refusal: the insufficiency of available FEOGA
funds, the full allocation for 1984 being already committed, but more  
importantly, the judgement that such an action would be ineffective in the  
fact of a market in serious imbalance.
31. In May, a special Management Committee meeting held with the encouragement  
of the Council failed to establish the true level of availabilities on the  
wine market. The Commission was forced to conclude that official  
estimates of supplies and opening stocks of table wines which totalled  
some 160 million hi represented a serious underestimate. Market prices  
remained depressed despite a series of distillation measures which 
totalled 35 million hi, a figure which included a massive 22 million hi of  
voluntary distillation at 65% of the guide price.
32. Confronted by declining demand (currently 90 million hi), there emerged a  
Council consensus that action is necessary if the market organization for  
wine is to operate to the satisfaction of producers and consumers and at a  
sustainable cost to the budget.

- 14 -
The Commission has therefore made proposals for an adaptation of the 
existing wine régime (1) which it earnestly hopes will be adopted by the 
Council, despite the sacrifices which will have to be made by producers m  
each Member State. The proposals fall under three main headings :  .
structural adaptation to reduce the productive potential, a more realistic 
price policy and improved market management; in addition it is proposed 
that sugaring and enrichment should be curtailed and/or phased out. By 
the time of publication the Council, after consultation of the Parliament, 
should have decided on the adoption of Commission proposals. In this 
publication, it should be recorded that the Commission has taken the two 
decisions which lie within its power in order to contribute to the 
adaptation of this market organization. In the first instance, when 
evaluating the state and prospects of the wine market, the Commission will 
no longer restrict itself to governmental sources since experience has 
shown that these sources can be unreliable. For distillation, the^ 
Commission has established limits on access to voluntary distillation 
(which will allow up to about 10 million hi to benefit from future 
operations). Additional distillation in the form of obligatory 
distillation which takes place at a lower price, may then be applied in a
more equitable way.
(1) C0M(84) 440 final, C0M(84) 515 final, C0M(84) 517 and C0M(84) 539 final.

- 15 -
B. Analysis by Sector
I· Products subject to common market organisation
1. CEREALS
1. Introduction
(a) General situation:
The 1983/84 harvest was about 6% smaller than the record crop of  
1982/83, although only 1,2% below the previous record crop in 1980/81.
The drop was mainly due to a very big drop in the barley harvest  
(- 12,8%) which was the lowest since 1976/77. The quality was about  
normal for wheat but below normal for barley, especially spring barley.
With opening stocks of about 18 mio t (common wheat 10,5 mio t) and a  
continuation of the Commission's policy not to increase the Community  
share of the world market for common wheat in a situation with general  
over-supply in the main exporting countries, wheat prices in particular  
have been under pressure. Wheat prices remained on or below the support  
price throughout the marketing year with a tendency to decline as the  
year progressed. Barley prices were firm at around 4-6% above the  
common intervention price as a result of scarce supply.
Although intervention stocks at the beginning of the marketing year  
were at the highest level at any time since the introduction of the  
Common Market Regulation (7,6 mio t), the stocks were reduced to  
4,3 mio t at the end of the marketing year due to relatively low  
intervention activity and improved outlets on the internal market for  
animal feed.
Forcasts for 1984/85 indicate a new record level of production due to  
excellent growing and harvesting conditions throughout the Community.
World market prospects for 1984/85 are favourable as demand is  
relatively strong, mainly because of a poor harvest in the USSR, while  
production in the major producing countries (except the EEC) is in  
general below normal. World market prices, and in particular wheat  
prices, therefore tend to be firm in the near future.

- 16 -
(b) Cereals in Community agriculture:
The total area of cereals in 1983 was 27,7 million ha. Their importance  
in the land use of individual Member States varied considerably, being  
lowest in Ireland and the Netherlands (7% and 10% of UAA respective y)  
where fodder crops and permanent grasslands are "“f® 1“Port*n^·  
are of greatest significance in Germany and Denmark (42% and 59% of UAA  
respectively) where they account for 65-70% of the arable land. In the  
remaining Member States cereals occupy 20% to 30% of the UAA and 50% to  
57% of the arable land.
The share of cereals in final production is a less useful measure of  
their economic importance since in many cases a large proportion o  
production is used for livestock feeding on the farm where it is  
produced. This means that the final production of such cereals is m  
the form of livestock products. Thus in Germany, where cereals  
accounted for 42% of the UAA, they represented only 8,4% of the value  
of final production in 1983 because over 43% of the total quantity  
produced was used for animal feeding on the farm where it was grown. In  
the United Kingdom, by way of contrast, cereals accounted for only 21*  
of the UAA but 18,6% of the value of final agricultural production  
because only 12% of the crop was fed to livestock on the farm where l  
was grown. In the Community as a whole, where about 26% of the crop was  
fed to livestock on the farm where it was grown, thf c°?tr^tion °  
cereals to the final production of agriculture was 12% in 19«J.
(c) The Community in world cereals production:
World production of cereals in 1983/84 amounted to 1.193 million t, of  
which the Community produced 10%, a similar proportion to previous 
years. The proportions produced by other major exporters of cereals  
were: United States 17%, Canada 4%, Australia 3%, Argentina 3%.
2. Production
Community cereals production in 1983/84 dropped to 123.66 mio (excludi g  
rice) - a decrease of 6,1% on the 1982/83 record crop. The decrease was due  
to a decrease in area (- 2,1%) combined with a decrease in yield (-J».!*)·  
In particular barley production decreased (- 12,8%) while common wheat  
production was very close to last years record and 9,7% above the previous
record in 1980/81.

Growing conditions were difficult, particularly for spring-sown cereals,  
and yields were lower throughout the Community. Yields of common wheat were  
only slightly lower (- 1,9%), while yields of barley were 7,3% lower than  
last year.
The total area sown with cereals for 1984 is equal to the area in 1983. The  
growing conditions have been excellent for both winter and spring sown  
cereals, and yields are expected to be very high. Final production for all  
cereals will reach a new record; preliminary estimates indicate a total  
production of about 147 mio t.
(a) Common wheat
The 1983/84 production of common wheat of 55,4 mio t almost reached the  
record production of 1982/83 (- 0,8%). Yields, on average 5,03 t/ha,  
were slightly lower (- 1,9%) due to less favourable climatic  
conditions, while the area increased to 11,012 mio ha (+ 1,1% compared  
with 1982/83).
The 1984/85 production is expected to be about 69 mio t (+ 25%) due to  
an increase both in area (+ 3,7%) and in yield (+ 20,7%) - the growing  
conditions having been excellent throughout the year.
These figures confirm the steadily increasing trend in wheat  
production, mainly due to the introduction of new high yielding  
varieties, which makes it economically attractive for producers to  
shift from (in particular) barley to wheat production. The area of  
common wheat has shown an uninterrupted increase since 1977/78 with an  
annual increase of more than 2%. Yields have shown an equally clear  
trend, though subject to fluctuations as a consequence of varying  
climatic conditions. The annual rate of increase since 1977/78 has been  
around 3,5%.
(b) Durum wheat
1983/84 production of durum wheat declined to 3,9 mio t (- 2,7%). This  
was solely due to a very big drop in production in Greece (- 21,7%),  
while production in France and Italy increased slightly. The average  
yield was 1,82 t/ha (- 5,6%), while the area increased to 2,164 mio ha  
(+ 2,9%). The area declined in France (- 2,6%) but increased in Italy  
(+ 2,9%) and Greece (+ 5,2%).

-18 -
In 1984/85 production is expected to reach almost 6 mio t (+ 52%) due  
to an increase in both area (+ 3,4%) and yield (+ 47%).
Italy accounts for 80% of the area of durum wheat in the Community and 
durum wheat occupies about 50% of the total wheat area there. The area  
remained stable for a number of years, but over the last four years it  
has increased uninterruptedly.
Greece accounts for 14% of the area of durum wheat in the Community and  
durum wheat occupies about 30% of the total wheat area. Since 1979 the  
durum wheat area has increased from a relatively stable level of about 
205.000 ha to about 305.000 ha in 1984.
(c) Barley
1983/84 production at 36,158 mio t was substantially lower than in  
1982/83 (- 12,8%). Growing conditions were unfavourable, in particular  
for spring barley, and yields dropped to 4,07 t/ha (- 8,7%). The area  
declined to 8,876 mio ha (— 4,6%).
In 1984/85 production is expected to reach 43,3 mio t. The increase is  
solely due to an increase in yield to approximately 5,1 t/ha (+24%),  
while the area continues to decline (- 3,6%). The area has declined  
from 10,04 mio ha in 1979/80 to approximately 8,55 mio ha m  1984/85  
- an annual rate of decrease of more than 3%. Production has remained  
stable at around 40 mio t due to an increasing yield.
The increasing trend in yields is mainly a result of the change from  
spring to winter barley.
The area of winter barley as a percentage of total barley area is still  
increasing in the four main producing countries. In France and Germany  
the area of winter barley has become stable, while the area of spring  
barley is decreasing. In the U.K. the area of winter barley is still  
increasing while that of spring barley is declining rapidly.
In Denmark the winter barley area has increased very rapidly. However,  
winter barley is not expected to be as important in Denmark as in the  
other countries because of problems with plant diseases.

Area of winter barley (% of total barley area)
Germany
France
UK
DK1975 
39 % 
20 %1976
46 % 
31 %1977 
49 % 
42 %1978 :  1979 :  1980 :  1981 :  1982 :  1983 :  1984
53 % 
51 %55 % 
38 % 
25 %59 % : 
55 % : 
32 % : 
0,4 %:63 % : 
57 % : 
35 % : 
0,4 %:48 % : 
55 % : 
39 % : 
1,2 %:62 % 
62 % 
42 % 
7 %67 %
68 % 
52 % 
13 %
(d) Rye
1983/84 production of rye (2,39 mio t) was slightly lower than the year  
before (- 1%). The fall in production was due to a lower yield  
(- 7,3%), while area increased to 0,677 mio ha (+ 7,1%).
In 1984/85 production is expected to be 2,82 mio t due to an increase  
in both area (+ 3,8%) and yield (+ 14%). The increase in area has  
occured mainly in Denmark where the area has doubled over the past two  
years to about 0,12 mio ha in 1984.
(e) Oats
The area of oats continued its longterm downward trend and was 1,7 mio  
ha in 1983/84. The average yield was 3,29 t/ha (- 10,8%) and production  
dropped to 5,59 mio t.
In 1984/85 production is expected to be approximately 6,2 mio t,  
although the area fell by 10% to 1,5 mio ha. Yields are expected to be  
about 4,0 t/ha (+ 22%).
(f) Maize
The situation in 1983/84 was almost unchanged compared with 1982/83.  
Production reached 19,7 mio t, the average yield was 6,62 t/ha and the  
area remained at 2,98 mio ha.

-  20  -
In 1984/85 production is expected to be unchanged at 19,7 mio t, wh  
the area will show a slight increase and yields a corresponding  
decrease. In the long term, the area is expected to remain stable a  
around 3 mio ha, while yields are expected to increase at an annual 
rate of 2-3%.
3. Consumption
In 1982/83 the total volume of cereals used in the Community amounted  
113,5 million t, a decline of 2,8 million t compared to 1981/82. About 
consisted of wheat, 30% of barley and 21% of maize. The utilization of  
cereals was made up as follows in 1982/83:
- animal feed
- human consumption
- industrial use
- seed and losses60,6% (59,2% in 1981/82)  
25,6% (26,9% in 1981/82)  
8,6% ( 8,7% in 1981/82)  
5,2% ( 5,2% in 1981/82)
It is expected that for 1983/84 total consumption of cereals in the  
Community will remain at a similar level as in 1982/83. The latest  
estimates indicate a further increase in animal feed use (to 61,3%), a  
slight increase in human consumption (to 25,9%) and a decrease in  
industrial use (to 7,7%).
The proportions vary substantially from  
State to another and from year to year,  
breakdown for 1982/83:cereal to cereal, from one Member  
The following table gives the
Cereal consumption in 1982/83 - breakdown by type of—cereal and use
Human
consumptionAnimal
feedIndustrial
useSeed and 
losses
% % % %
Durum wheat  
Common wheat 
Rye and meslin  
Barley 
Oats and 
mixed cereals  
Maize 
Sorghum87,3
55,9
45,7
0,2
4.2
6.3
2,61,2
36,4
46,3
78,9
91,1
75,7
95,61.4
1.4
14,8
16,9
0,511,5
6,3
6,6
6,0
4,7
1,2
1,2

-  21  -
(a) Human consumption:
In 1982/83 the use of cereals for human consumption fell by 6,8% from  
1981/82. This was due mainly to a decrease of 5,9% for common wheat.  
Common wheat accounts for about 77% of total cereals use for human  
consumption, and the quantity used has remained relatively stable over  
the last 10 years. Consumption of maize apparently increased by 35,5%.  
However, this is due principally to a change in the basis of the  
statistics rather than a real change in usage. Total consumption of  
maize for human and industrial purposes has remained relatively stable.  
Over 4 mio t of maize a year are used for the production of starch, for  
eventual use in either human foodstuffs or industrial products. Maize  
is also used in distilling and brewing, and to make cereal breakfast  
foods.
Use of cereals for human consumption - breakdown by type of cereal
000 tonnes
Quantity used for human consumption  
(grain equivalent)
Common wheat
Durum wheat
Maize
Rye
Oats
Barley1981/82
24.164
4.300
1.109
1.244
334
801982/83
22.728
3.308
1.503
1.163
319
80
Estimates for 1983/84 show no real change in the level of cereals used  
for human consumption (+ 1%). It is expected that consumption of soft  
wheat will remain at a similar level to 1982/83.
(b) Animal consumption:
Animal consumption is the principal outlet for cereals grown in the  
Community and made up about 61% of cereals used in the Community in  
1982/83.
The total quantity of cereals used for animal consumption has dropped  
from a record 74,7 million t in 1973/74 to 67 million t in 1976/77. An  
increase to 73,2 million t was registered in 1977/78 since when the  
trend has been downwards.

-  22  -
Animal consumption of cereals was 68,9 million t in 1981/82 and
68,8 million t in 1982/83.
In 1983/84 consumption is estimated to be about 69,4 mio t (+ 1,0%).
The increase is mainly due to a very favourable competitive situation  
vis a vis cereal substitutes because of very high prices for these  
products and for soya.
Between the different cereals there have been changes. The preliminary  
figures show a substantial increase in the use of wheat in animal feed,  
partly because of replacement of other cereals and partly because of  
lower imports of cereal substitutes.
Changes in the use of cereals for animal feed
1982/83 1983/84 (1) % change
(mio t) (mio t) 82/83 - 83/84
:  Cereals total 68,8 69,4 + 0,9
:  of which
:  barley 26,9 25,7 - 4,5
:  common wheat 14,8 19,9 + 34,5
:  maize 18,3 16,9 - 7,7
:  oats 7,0 5,3 - 24,3
(1) preliminary figures.
This high level of wheat consumption in animal feed is expected to be  
maintained in 1984/85 - mainly by replacing other cereals, as imported  
substitutes and soya are expected to be available at competitive prices.
Up to 1975/76, the animal feed use of cereals on the farms where they  
were grown accounted for around 50% of the total feed use. Since then,  
however, this proportion has fallen to about 45%. This shift is due to  
a greater tendency for farmers to sell cereals and to purchase compound  
feedstuffs. Production of oats, a cereal which is largely used on the  
farm where grown, has also been declining rapidly.

- 23 -
Animal feed use of cereals in 1982/83, on the farm where grown and  
through the market - breakdown by cereal
Used on farms Marketed Total :
:  Cereals 1.000 t 1.000 t
1.000 t % :
:  Wheat 5.653 9.209 14.882 21,5 :
:  Rye 909 271 1.180 1,7 :
:  Barley 14.790 12.421 27.211 39,4 :
:  Oats etc. 5.204 1.771 6.976 10,1 :
:  Maize 3.715 14.643 18.358 26,6 :
:  Other 83 463 546 0,8 :
30.354 38.778 69.133 100,0 :
:  Total
43,9% 56,1% 100,0%
In 1972/73 cereals represented over 62% of the energy supplied by  
concentrate feeds (i.e. excluding bulky fodder, root crops and grazing,  
etc.). This proportion had fallen to 53% in 1981/82. In the same period  
the contribution of manioc rose from 1,5% to 6% and that of oilcakes  
from 12% to nearly 18%.
This decline is principally due to the substitution of cereals by  
products such as manioc, oilcakes and a variety of industrial  
by-products which may be imported into the Community with little or no  
import charge.
Imports of cereal substitutes and soya 1974/83
mio tonnes
1974 1978 1982 1983 :
:  Soya (1) 14,8 18,9 18,6 :
:  Cereal substitutes total 4,6 11,9 16,2 14,1 :
:  of which
:  manioc 2,1 6,0 8,1 4,5 :
:  maize gluten feed 0,7 1,7 2,8 3,6 :
:  citrus pellets 0,3 1,0 1,3 1,4 :
(1) Soya in the form of grain and soya cakes, expressed in soya cake  
equivalents.

- 24 -
Only imports of manioc decreased in 1983 while imports of all other  
substitutes increased.
Imports of cereal substitutes are expected to run at a high level  
throughout 1984. Imports of manioc are estimated to be about 4,4 mio t  
in the first 10 months of 1984 while imports of other substitutes and 
soya remain almost unchanged compared to the same period last year.
(c) Industrial use;
The use of cereals for processing and industrial purposes decreased by  
3,9% in 1982/83. There were, however, substantial differences from one  
cereal to another.
Industrial use of wheat increased considerably (+ 37,4%) while that of  
maize apparently declined by 9,9%. However, this decline is only the  
converse of the apparent increase in human consumption of maize (see  
paragraph (a) above for explanation).
Industrial use of barley fell by 0,9% in 1982/83, to a total of  
5,1 million t.
Estimates of industrial use of cereals in 1983/84 indicate a further  
decline (- 10%) with an increase for wheat (+ 6%) and a large fall for  
maize (- 26%).
(d) Self-sufficiency;
The degree of self-sufficiency in 1982/83 increased to 115% (+ 10%), as  
a result of a substantial increase in production (+ 7%) combined with a  
fall in consumption (- 2%). The fall in consumption was due mainly to  
decreases in human consumption (- 5%) and industrial use (- 8%).
Preliminary estimates for 1983/84 suggest that the degree of  
self-sufficiency will fall to 109%, as a result of the drop in usable  
production to 123 million tonnes (- 6%).

- 25 -
Summary of the cereal balance sheet in 1982/83
Common wheat Durum wheat Barley Maize :
mio t 1982/83
1981/82mio t 1982/83
1981/82mio t 1982/83
1981/82mio t 1982/83 :  
1981/82 :
:  Usable 
t  production 55,6+ 11,8% 4,0- 9,8% 41,1+ 4,2% 19,7+ 6,3% :
:  Imports 2,3- 37,2% 1,2- 16,0% 0,1- 70,5% 5,6- 33,2% :
:  Domestic  
:  use 40,6 - 3,8- 20,0% 34,1- 0,8% 24,2- 7,4% :
:  Exports 13,6- 5,3% 1.4- 1,0% 5,8- 1,4% 0,9+ 13,7% :
:  Stock 
:  change + 3,7 + 1,3 + 0,2
Oats Rye Other cereals Total cereals
mio t 1982/83
1981/82mio t 1982/83
1981/82mio t 1982/83
1981/82mio t 1982/83
1981/82
Usable
production 7,7+ 8 j  0%2,4- 2,5% 0,4- 11,4% 131,0 + 7,1%
Imports 0,1- 23,9% - - 0,1- 30,0% 9,7- 32,3%
Domestic
use 7,7+ 6,2% 2,5- 1,6% 0,5- 13,4% 113,5 - 2,4%
Exports 0,1 - - - - -21,3- 6,3%
Stock
change - 0,1__ _+ 5,9_
(e) Stockst
According to the best available estimates, the total stocks of cereals  
in the Community at the beginning of the 1983/84 marketing year  
amounted to 18,0 million t of which 0,9 million t were held on farms·  
Common wheat accounted for 10,5 million t, durum wheat for  
0,7 million t, barley for 3,0 million t and maize for 2,8 million t.

- 36 -
By 1 August 1984 estimated stock levels had been reduced to
12.8 million t, including 7,2 million t of common wheat (13% of  
production), 0,8 million t of durum wheat (21% of production),
1.8 million t of barley (5% of production) and about 2,3 million t of  
maize (12% of production).
4. Trade
(a) Between Member States;
The major Community supplier of cereals to other Member States is  
France. French deliveries in 1983/84 totalled 10,1 million t (including  
cereal products) of which 4,4 million t were common wheat and 2,0 mio t  
were barley.
The main customers were Belgium, Germany and Italy. However, a  
significant part of the consignments to Belgium are believed to have  
been for subsequent export to non-member countries via Belgian ports.  
French deliveries of maize to other Member States were 5,0 million t in  
1983/84. The principal customers were the Benelux countries, Germany,  
the United Kingdom and Ireland.
In recent years UK deliveries to other Member States have grown in  
importance. In 1983/84 the UK supplied 850.000 t of common wheat and  
1,7 mio t barley to other Community countries. Much of this was  
subsequently exported to third countries, in particular from Belgium  
and France, but there were substantial consignments to Germany, Italy,  
Ireland and Denmark for use there.
(b) With third countries:
Imports of cereals from non-member countries (reduced by the estimated  
level of transhipments) amounted to 8,1 million t in 1982/83 (35,7%  
less than in 1981/82) of which 5,6 million t were maize (33,2% less  
than in 1981/82). About 89% of these maize imports came from the United 
States, with the remainder coming mainly from Argentina. Imports of  
barley in 1982/83 fell to less than 150.000 t, mainly from Canada.
Imports of common wheat fell from 2,9 million t in 1981/82 to
1,6 million t in 1982/83. 98% of common wheat imports in 1982/83 came  
from North America. Durum wheat imports dropped from 0,4 million t in  
1981/82 to 0,3 million t in 1982/83. Almost 100% of imports in 1982/83  
came from North America.

-27 -
Total exports of cereals and cereal products in 1982/83 were  
21,3 million t. Within this total, common wheat and flour accounted for
13,6 million t. Exports of wheat and wheat flour in 1983/84 are  
estimated at about 14,2 million t, broken down as follows:
12,8 million t of commercial sales, of which 2,8 million t in the form 
of flour, and 1,4 million t as food aid. Commercial exports of wheat in  
1982/83 went principally to the Soviet Union and Eastern Europe, North  
Africa, China and the Far East. Flour exports continued to go to a wide  
variety of destinations, in particular to Egypt, Libya, the Soviet  
Union and the Middle East.
There were again large exports of barley in 1982/83 and 1983/84. Total  
exports of barley and barley products (mainly malt) amounted to  
5,9 million t in 1982/83 (- 1%), of which 1,7 million t was in the form  
of malt. The quantities exported in 1983/84 are believed to have been 
lower (about 4,4 million t, including 1,5 million t in the form of  
malt). The principal destinations for barley in 1982/83 were once again  
other European countries, the Soviet Union, the Mediterranean area and  
the Middle East.
5. Prices
(a) Common prices:
The reference price for common wheat of bread-making quality has for  
several years been fixed for the minimum quality by way of derogation  
from the Regulation on the common organization of the market. Since  
fixing the prices for the 1981/82 marketing year, however, the Council  
defined an average bread-making quality as provided for in the basic  
Regulation and fixed the reference price for that quality. Nonetheless,  
a lower price has been fixed for application in the event of  
intervention in respect of the minimum quality. Thus for 1984/85 there  
are two prices designed to support the market in bread wheat:
- the actual reference price (213,14 ECU/t) which serves as a basis  
for deriving the target price and thus the threshold pricej
— a derived price (213,14 — 17,62 = 195,52 ECU/t) at which level any 
intervention measures for minimum—quality bread wheat must take  
place.
In the last two marketing years the Commission has pursued a policy-«#—  
narrowing the gap between the common intervention price and the derived  
price for bread—making wheat of minimum quality.

- 28 -
This difference was
+ 10,8% in 1982/83
+ 10,3% in 1983/84
and + 7,0% in 1984/85
The aims of the policy are to make the increasing production of common  
wheat more competitive vis à vis other cereals and substitutes used in  
animal feed, and to curb the growing trend towards wheat production.
The common intervention price was reduced by 1% to 182,73 ECU in  
1984/85, while the intervention prices for durum wheat and rye remained  
unchanged. This widening of the differential has increased the  
attractiveness of durum wheat as a crop.
(b) Internal market prices:
The 1983/84 marketing year was characterized by relatively low barley  
production resulting in firm barley prices well above the common  
intervention price throughout the year.
In contrast prices for common wheat were under pressure and stayed at  
or below the reference price for minimum bread-making quality  
throughout the year with a tendency to decline.
This change in the price structure with a relatively small gap between  
barley and wheat prices made it possible to find new outlets for wheat  
in animal feed.
Maize prices remained firm well above the common intervention price  
although they dropped, particularly in France, during the year after  
the Commission announcement to reduce the level of the carry-over  
payment for maize.
(c) World prices
At the beginning of the 1983/84 marketing year world stocks of wheat  
were estimated at 96 million t, an increase of 13% over the previous  
year, while feedgrain stocks increased by about 25 million t to  
approximately 138 million t. Global production of common wheat again 
attained a record level in 1983/84, while the production of coarse  
grain dropped substantially.

_ 29 _
In 1983/84 wheat production increased in most countries, in particular  
Australia and China, while production declined in the USSR (- 9%) and  
the US (- 12%). Total world production of wheat increased by about 3%.  
World production of course grains dropped for the first time in four  
years (- 12%), solely due to the PIK programme in the US, where  
production was almost halved. Production increased in general in other  
countries except in Europe. World wheat trade went up a little in  
1983/84 but not enough to absorb the increase in supply, and world  
stocks increased to more than 100 mio tonnes (+ approx. 6%). Prices  
were quite well supported at the beginning of the marketing year, but  
they came under increasing pressure during the year due to the  
aggressive export policy of the US and Australia.
Highest and lowest monthly average prices in 1983/84 -  
CIF Antwerp/Rotterdam
TypeHighest Lowest
ECU/t Month ECU/t Month
Common wheat:
Soft Red Winter II  
Dark Northern  
Spring 11/14%204,27
243,55April 1984  
January 1984185,09
219,06June 1984  
October 1983
Barley:
Canada Feed I 193,49 January 1984 166,71 August 1983
Maize:
Yellow Corn III 204,14 August 1983 187,11 February 1984
Durum wheat:  
US Hard Amber  
Durum III 258,09 January 1984 226,92 April 1984
The comprehensive use by the US of credit policy has made it  
increasingly difficult for EEC exporters to compete, and important  
markets have been lost in the Mediterranean area. Almost the only  
markets now available to the EEC are those countries able to finance  
their own purchases, notably the USSR.
(d) Consumer prices:
Bread prices increased by an average of about 7% between 1982 and 1983,  
continuing the previous year's trend towards smaller increases. There  
were, however, great differences from one Member State to another:

- 30 -
- Germany, Netherlands:
- Belgium, Denmark, United Kingdom, Ireland:
- France:
- Italy, Greece:from - 1 to + 2%  
from + 3 to + 7%
+ 9%
from + 15 to + 17%.
It is very unlikely that these increases were caused by the price of  
wheat, as the price of bread is determined primarily by distribution  
and manufacturing costs. Moreover, these increases are very much  
smaller or even negative when expressed in relation to the general  
index of consumer prices.
6. Short term outlook
A record level of Community cereals production - 148 mio t - is estimated 
for 1984/85. It is forecast that the use of cereals in animal feed will  
remain at the same level as in 1983/84, although it is likely that low  
market prices for wheat will encourage a further swing in favour of wheat  
and against barley, and to a lesser extent maize. Use of cereals for human  
consumption and industrial purposes is also expected to remain constant.
It seems likely that imports of cereals from outside the Community may  
continue to decline slightly.
Prospects for exports in 1984/85 are relatively favourable. With an  
increase in world demand because of a poor harvest in the USSR, and a  
decline in production in some of the major exporting countries, it should  
be possible for the EEC to export substantial quantities. At the same time,  
the cost of these exports could be relatively low due to the strength of  
the dollar, relatively firm world prices and low internal prices.
Although the market situation at the beginning of this marketing year has  
been favourable there are a number of factors which could make it difficult 
later on. Most European countries have also recorded good harvests this  
year, and their exports are posing increasing competition to the EEC. EEC  
exports have become increasingly dependent on the Russion market. The  
movements of the dollar could also have an important impact on the  
situation.
In conclusion, even if EEC exports continue at a high level, it must be  
expected that a substantial part of the 1984 harvest will be carried over  
at the end of the season, both as intervention stocks and on the market.

- 31 -
If yields continue to increase according to the underlying trend, and the  
total area of cereals remains constant, production could reach  
154-155 mio t by the year 1990. While there may be scope for a slight  
increase in the use of cereals for animal feed, there is no prospect for  
growth in human consumption or industrial use. The Community will therefore  
have an increasingly large structural surplus of cereals, more than double  
the level in 1990/91 than in 1983/84. The only foreseeable outlets for this  
surplus are exports to third countries and animal feed, if the problem of  
imported cereal substitutes could be resolved.
7. Economic aspects of the measures taken
(a) Levies and refunds:
(1) Import levies:
Import levies varied considerably, influenced by the great  
fluctuations in world prices during 1983/84:
- common wheat :
76 to 116 ECU/t, i.e. 40 to 70% of the cif price (net of tax)
- barley:
60 to 116 ECU/t, i.e. 40 to 70% of the cif price (net of tax)
- maize:
50 to 90 ECU/t, i.e. 30 to 60% of the cif price (net of tax).
(2) Export levies:
Export levies have not been applied in the cereals sector since the  
end of 1975.
(3) Export refunds (1983/84):
Export refunds for common wheat and barley were mainly fixed by  
standing invitations to tender from the open market.
For wheat, one tender covered all destinations except Scandinavia and  
South America. The total quantity of wheat sold under this tender was
6,6 million t with an average refund of 50 ECU/t.
For barley, a tender was opened for all destinations except  
Scandinavia, Japan and South East Asia (1,4 million t sold, average  
refund 45 ECU/t).
The tenders ran from June 1983 to the end of April 1984.

_ 32 _
As far as fixed refunds are concerned, licences were issued as usual at  
the beginning of the marketing year for West Africa. Licences were also  
issued for the major basic cereals (apart from maize, of which there is  
a Community deficit) for countries bordering on the Community (notably 
Switzerland, Austria, Liechtenstein and Scandinavia) which see the  
logistic advantage of importing from the Community rather than its  
competitors. Export refunds were also fixed in the normal way for wheat  
flour, rye flour and durum wheat semolina.
Refunds for malt continued to be fixed as in the previous year by a  
special system which involves a weekly calculation based on the import  
levy for barley, with an added precaution in order to avoid speculation.
(b) International agreements and food aid:
The commitment of the Community and Member States under the 1980  
Convention is for the annual supply of 1.650.000 t. Of this amount,  
927.663 t (i.e. about 56%) normally is to be supplied by the Community  
as such and the remainder by the Member States, broken down by 
agreement amongst them, but exceptionally the amount to be supplied by  
the Community was increased to slightly above 1 million t in 1983.
By 30 September 1984 the Community had put in hand 98% of the 1982/83  
programme and 42% of the 1983/84 programme. The previous programmes are  
executed at 100%.
The corresponding figures for Member States' aid were 100% for the  
1982/83 and previous programmes and 39% for the 1983/84 programme.
(c) Intervention
The 1983/84 marketing year opened with a high level of intervention  
stocks, at 7,5 million t. Purchases during the year however totalled 
4 million t - less than half the quantity purchased in 1982/83.  
Intervention buying of bread-making wheat at the price for minimum  
quality during the first three months of the season was limited to a 
maximum of 3 million t. Some 7 million t of cereals were sold from  
intervention during the marketing year. Of this about 5 million t were  
exported, including 1,24 million t of wheat delivered as food aid. A  
further 1,4 million t of wheat were sold on the internal market for  
animal feed use, in the context of special measures. The net effect of  
lower purchases and increased sales was to reduce end-of-season stocks 
in intervention to 4,4 million t.

- 33 -
Details of changes in intervention stocks during 1983/84 are as follows:  
Intervention stock changes in 1983/84 (provisional estimates)
(1 000 t)
Common wheat  
of bread­
making qualityDurum wheat Rye BarleyFeed
wheat
Stocks on 1.8.1983* 5.834 478 308 848 10
Purchases 2.988 316 47 687 8
Sales 5.441 214 122 1.310 13
Net change + - 2.453 + 102 - 75 - 623 - 5
Stocks on 31.7.1984* 3.381 580 233 225 5
* For durum wheat the marketing year begins in July, and the statistics  
therefore relate to 1.7.1983 and 30.6.1984.
(d) End-of-season carry-over payments:
In 1983/84 payments were made on private stocks of wheat in order to  
prevent recourse to special intervention measures for this product at  
the end of the marketing year. Carry-over payments were also granted 
for maize stored in the surplus production regions and for rye stocks  
at mills. These carry-over payments, which are designed to compensate 
for the price adjustment at the end of the marketing year, were fixed  
on the basis of 5 1/2 monthly increments for wheat and rye and 4  
monthly increments for maize.
(e) Uniformity of prices:
Monetary compensatory amounts:  In common with other sectors, cereals  
suffer from some disunity caused by monetary differences.
(3)

- 34 -
(f) Production refunds;
Production refunds are paid to cereal and potato starch manufacturers  
in order to enable them to compete with starch manufactured from other  
raw materials. The refunds fixed for the 1984/85 marketing year are 
unchanged at 19,41 ECU/t for maize starch, 27,79 ECU/t for wheat,
23,91 ECU/t for broken rice and 31,25 ECU/t for potato starch.
(g) Durum wheat aid:
This direct income aid to certain producers of durum wheat is aimed at  
those areas of the Community where producers are dependent on this  
cereal for a significant part of their income.
For 1984/85 the aid is fixed at 101,31 ECU/ha in Italy and France, and 
in Greece at 89,34 ECU/ha for the regions receiving national aid before  
entry into the Community and 79,29 ECU/ha for the regions not receiving  
national aid.
8. Budgetary expenditure
Expenditure by the EAGGF Guarantee Section on cereals was 2.441 million ECU  
in 1983; it is estimated at 1.935 million ECU for 1984 and 2.855 million  
ECU for 1985. The 2.441 million ECU for 1983 breaks down into 1.525 million  
ECU for export refunds and 916 million ECU for intervention measures, of  
which 566 million ECU were spent directly on intervention storage.

- 35 -
2. RICE
1. Introduction
In the 1983/84 marketing year the area under rice in the Community of Ten  
represented about 0,21% of its total UAA and 0,14% of the total area under 
rice in the world.
Rice is grown only in France, Italy and Greece. Some 94% of Community  
production comes from Italy whereas the Community accounts for only 0,21%  
of world rice production (449 million t) (1).
Rice represents around 0,3% of final agricultural production.
2. Production
In 1983 the area sown with rice in the Community was 205.300 ha, an  
increase of 3,2% compared with the previous year. In France the area was  
7.370 ha compared with 5.450 ha in 1982, a rise of 35,2%. In Greece the  
area under rice fell by 10,1% from 15.500 ha xn 1982 to 13.430 ha in 1983.  
In Italy the area under rice in 1983 totalled 184.000 ha, an increase of  
3,4% compared with 1982.
In 1983 rice production in the Community of Ten, at 1.149.500 t, was 3,1%  
up on the 1.115.450 t produced in 1982 (1). This rise was due mainly to  
the increase in area.
The 1983 production figure in France was 37.500 t (1), a rise of 36,6%, and  
in Italy 1.030.000 t, a rise of 2% (1). Production in Greece, at 82.000 t,  
was 5,8% more than the 77.500 t produced in 1982.
3. Internal consumption
In 1982/83 Community consumption of rice amounted to 1.056.000 t, a rise of  
6,5% compared with the previous marketing year (992.000 t). Industrial  
uses remained low but rose from 30.000 t to 39.000 t. The amount of seed  
used rose by 7,4% (29.000 t against 27.000 t in 1981/82). The use of rxce  
in feedingstuffs was up (+ 8,4%), rising from 83.000 t in 1981/82 to
90.000 t. Gross human consumption is on the increase, rising from
848.000 t in 1981/82 to 892.000 t in 1982/83 (+ 5,2%).
(1) Quantities expressed in terms of paddy rice.
In this document the word "rice" means "milled rice" unless otherwise
stated.

Trade
An overall analysis can be made in terms of milled rice (and taking account  
of broken rice).
(a) All milled rice
In 1982/83 imports from non-member countries, including the quantities  
imported under inward processing arrangements, amounted to  
0,613 million t compared with 0,846 million t in 1981/82, a decrease of  
27,5%.
Rice exports in 1982/83, including the quantities exported under inward  
processing arrangements, amounted to 0,292 million t compared with  
0,466 million t in 1981/82, a fall of 37,4%.
The Community's share of world trade in 1983 was 8% of imports and 6,6%  
of exports. The main sources of whole rice remain the United States,  
Thailand, South America and Suriname and of broken rice South America,  
Burma, Thailand and Australia.
Exports were again concentrated on the Community's neighbours:  
Switzerland, Austria and countries around the Mediterranean.
Intra-Community trade rose by 17,8% from 472.000 t in 1981/82 to
556.000 t in 1982/83, approximately 40% of this being Italian rice  
exported to the other Member States. Italian exports to the rest of  
the EEC reached the figure of 218.000 t in the 1982/83 marketing year.
(b) Broken rice
Broken rice is used not only for human consumption but also in animal 
feed and for industrial purposes. In 1982/83 total internal  
consumption was 212.000 t (in terms of product weight). Animal feed  
accounted for 90.000 t and industrial uses for 39.000 t, including
29.000 t used in beer-making. Human consumption accounted for 82.000 t.
Prices
(a) Common prices
Prices for the 1984/85 marketing year have been fixed as follows :
- the intervention price for paddy rice has gone up by 2,5% compared  
with the previous year to 314,19 ECU/t;
- the target price for husked rice (round-grain and long-grain) has  
been set at 539,49 ECU/t, an increase of 2,3% on 1983/84;
- the threshold price for husked rice (long-grain and round-grain) is  
533,63 ECU/t, an increase of 3,3% on 1983/84.

- 37 -
(b) Market prices
During the 1983/84 marketing year market prices in the main producing  
area (Vercelli) were :
.  for round-grain rice, 23,7% above the intervention price;
.  for long-grain rice, 27,8% above the intervention price for Lido and 
27,0% above the intervention price for Ribe.
In 1982/83 market prices for round-grain and long-grain rice were 11%  
and 17% respectively above the intervention price.
The end of the 1983/84 marketing year saw an increase in prices, which  
at the beginning of September 1984 had settled somewhat and stood at :
- approximately 30,1% of the intervention price for round-grain rice;
- approximately 40,8% of the intervention price for long-grain rice  
(Lido) and 48,1% for Ribe.
(c) World prices
In 1983/84 world market prices were higher than in the previous  
marketing year but by May 1984 they were close to the May 1983 level.
On the Thai market the price of milled rice went down from USD 310 in  
September 1983 to USD 275 at the end of August 1984, while the price of  
husked rice fluctuated between USD 300 and USD 260.
The United States market lacked price transparency because of the  
payment—in—kind programme, coupled with a reduction in the area sown.  
Most United States deliveries were made under PL 480, which explains  
the lack of price transparency on the world market.
(d) Consumer prices
These are available for only some Member States. The following were 
recorded for long-grain rice (round-grain in the case of Greece):
1982 1983 1983/82 % :
:  .  Germany  
:  .  Belgium  
:  .  France  
:  .  Italy  
: .  Netherlands 
:  .  Greece3.6 DM/kg  
61,2 FG/kg
7.6 FF/kg  
1.666 Lit/kg
5,2 HFL/kg  
57,1 Dra/kg3,8 DM/kg  
70,5 FB/kg  
8,2 FF/kg  
2.053 Lit/kg  
5,4 HFL/kg  
68,8 Dra/kg5,6 :
15.2 :  
7,9 :
23.2 :  
3,8 :
20,5 :

- 38 -
6. Short- and long-term outlook
As forecasts had indicated, the 1983/84 harvest was 2,5% up overall on the  
previous marketing year. Production in 1984 looks like being about the  
same as in 1983. In 1983 18% of the rice produced was round-grain and 80%  
long-grain. These proportions are expected to change slightly for the 1984  
harvest, with an increase in the quantity of round-grain rice and a slight 
drop in the quantity of long-grain.
Despite the fact that Community demand is for long-grain rice, some  
long-grain rice produced mainly in Italy continues to find its only  
practical outlet on the world market while the Community continues to  
import types of long-grain rice which seem to be particularly popular with  
consumers in the northern countries. The long-grain varieties which give a  
better yield both in the field and at the milling stage are increasingly  
cultivated in the Community. Thus, Lido has replaced many of the  
comparable varieties with lower yields.
Intra-Community trade increased in 1982/83 and it seems that this volume of  
trade will be maintained. The start or production in French Guiana could 
in the long term provide a stimulus to production and consumption of the  
American-type long-grain rice appreciated in the Community.
7. Economic aspects of the measures taken  
(a) Levies and refunds
The level of world market prices in 1983/84 meant that import levies  
stayed high and were sometimes higher than in the previous year,  
especially for long-grain rice. The levies applicable to round-grain  
and broken rice fell markedly, however.
For the last four marketing years levies have been as follows:

- 39 _
ECU/t
Round-grain husked rice  
Long-grain husked rice  
Round-grain milled rice  
Long-grain milled rice  
Broken rice1980/81 1981/82 1982/83 1983/84 :
30,66 133,39 212,55 183,20 :
30,89 138,64 210,59 213,00 :
59,93 193,65 343,34 323,54 :
169,57 313,30 442,40 455,34 :
8,04 36,40 64,69 51,28 :
Levies were high in March and April 1984 because of the drop in world  
market prices, and declined steadily until the end of August.
A structural surplus brought about by the insufficient number of easy  
outlets for rice in the EEC meant special measures had to be taken  
regarding exports. These measures had two different aims, depending on  
whether they were applied to traditional exports of quality products or  
to disposing of purely structural surpluses to non-member countries.
The following measures were adopted to maintain traditional export  
flows to Switzerland, Austria and Liechtenstein.
For long-grain husked rice refunds of 103 ECU/t at the beginning and  
108 ECU/t until the end of the marketing year were fixed. The  
corresponding refunds on long-grain milled rice were 128,75 ECU/t and
135,00 ECU/t.
The disposal of the surplus proper was carried out under the tendering  
procedure so that the quantities to be exported and the expenditure  
incurred could be better supervised (*). The highest amounts granted  
under these arrangements were between 195 and 291 ECU/t. The refunds  
granted for the zones furthest from Europe were abolished from July  
1983.
(b) Food aid
About 98.000 t of rice (milled equivalent) was exported as food aid in  
1983/84, including 53.000 t as national aid and 46.000 t as Community 
aid, an increase of 23% compared with the previous year. In the coming  
marketing year the quantities should be similar to those in 1983/84.
(*) 500.000 t of long-grain rice were exported from 22 December 1983 to  
5 April 1984. There were no invitations to tender in respect of  
round-grain rice.

-AO -
(c) Quantities offered for intervention
There has been no intervention for rice since 1972/73, but very small  
quantities might be taken into intervention in French Guiana.
(d) Monetary compensatory amounts
No monetary compensatory amounts have so far been set for rice.
8. Budgetary expenditure
Expenditure by the EAGGF Guarantee Section for rice amounted to  
92,9 million ECU in 1983; the estimate for 198A is 95 million ECU, i.e.  
0,5% of the Guarantee Section's total expenditure. The total of  
95 million ECU breaks down into 71 million EUA for refunds and 24 million  
for intervention.
9. Other measures
Two amendments were made to the basic rules govemining the market in 1984.
The first limits the amount of the subsidy on undermilled rice for the  
islands of Réunion to the amount of the levy on husked rice.
The second provides for the intervention price to be varied according to  
variety or group of varieties by means of a system of increases and  
reductions.

- 41 -
3. SUGAR
Introduction
The 1983/84 marketing year was the third year of implementation of the new  
production system introduced in 1981 (1), including the arrangements whereby 
producers bear sole financial responsibility for disposing of any surpluses  
resulting from differences between Community production and consumption. The  
EAGGF still bears the cost of exporting quantities equivalent to the amount of  
preferential sugar imported from the ACP countries (2). These arrangements  
will apply for two more marketing years, i.e. until 30 June 1986.
The salient features of the 1983/84 marketing year were as follows:
- as world sugar prices had remained very low in 1982/83, Community growers  
reduced the area under beet by 9,2% in 1983/84; a similar reduction had  
been made the previous year, making a total reduction of 17,7% over two  
years,
yield per hectare reverted to normal and production of sugar in the  
Community totalled 11,0 million of white sugar equivalent (about 3 million  
below the 1982/83 figure);
total exports to the free world market were down to 4,1 million (including  
almost 1 million of C sugar), compared with the much higher figure of 5,2  
million in the previous year;
- Community stocks fell by 1,3 million;
overall consumption in the Community fell to 9,4 million, lightly 100.000  
below the 1982/83 level;
(1) Regulation (EEC) No 1785/81 (OJ No L 177, 1.7.1981, p. 4)
(2) African, Caribbean and Pacific countries and India

- 42 -
- the breakdown of the negotiations started in May 1983 for a new
International Sugar Agreement had an additional depressive effect on world  
sugar prices, which made the export of sugar surpluses particularly costly,  
especially towards the end of the year.
1. Cultivation of sugarbeet in the Community
In 1983 beet for sugar production occupied an area of 1.669.000 hectares  
(169.000 hectares less than in 1982). The most drastic reductions in area  
were made in the Netherlands (— 13,4%), Italy (— 12,9%), France (— 12,4%)  
and Belgium (- 12,3%).
The area under sugarbeet in the Community now represents about 1,64% of  
total UAA (utilized agricultural area). The figure in 1982 was 1,80%.
Figures obtained in the 1975 and 1977 Structure Surveys indicate a drop in  
th total number of holdings growing sugarbeet in all Member States. The  
initial results emerging from the 1979/80 Structure Survey show a further,  
although less severe, decline in the digure (about 360.000 holdings).
The average area of sugarbeet per grower varies between Member States,  
ranging from about 1 ha in Greece to almost 11 ha in France.
Generally speaking, acreages are large in France and the United Kingdom;  
medium-sized in Germany, the Benelux countries, Denmark and Ireland and  
small in Italy and Greece.
On the whole, the far-reaching structural changes that have been operated  
in sugarbeet production since 1967/68, when the common organization of the  
sugar market was introduced, have improved the conditions of production and  
indicate theat the system of production quotas has not hampered the  
ncessary restructuring process.

- 43 -
Restructuring of the processing industry
In 1972/73 there were 128 sugar manufacturers in the Community, the  
greatest degree of concentration being in France, Germany and Italy. In th  
same year there were 250 beet—processing fctories.
The latest figures for 1983/84 show a marked change in the structure of the  
sector.
The number of sugar manufacturers had dropped to 97 (- 24%) and the number  
of factories in operation to 196, a decrease of 22%.
This development was accompanied in the main by improvements in the  
equipment of the factories remaining in operation and the daily throughput  
in the Community as a whole stood at 1.189.000 t in 1983/84; this is  
almost the same as the previous year's figure, but is 35% higher than the  
tonnage (879.000 t) processed in 1973/73.
Because of problems facing some of the biggest sugar producers in Italy,  
the Italian authorities submitted a general plan to the Commission,  
pursuant to Articles 92 and 93 of the EEC Treaty, for the restructuring of  
beet production and sugar manufacture.
The plan contains broad policy lines for the sugar sector between 1984 and  
1988 and provides for various forms of state intervention (direct aid,  
capitalization, share purchases, etc.) on the basis of specific projects.  
As 12 technically obsolete sugar plants are scheduled to be shut down by  
1988.
Yield per hectare and sugar production
The weather in the spring and summer of 1983 was bad for beet growing,  
especially in the north of the Community. Sugar yields per hectare were  
therefore lower than in the previous year. The Community average for  
1983/84 was 6,42 t/ha.

- 44 -
Since beet acreages also contracted, sugar production was down to  
11 million t. The corresponding figures were 15,03 million t in 1981/82 
(record year) and 13,94 million t in 1982/83.
Given the level of production in 1983/84 and the carryover of a little more  
than 1 million t from the previous year, production of A sugar totalled  
9,3 million t, production of B sugar 1,7 million t and production of C  
sugar only 0,95 million t. The last figure is well below the corresponding  
level for the previous two marketing years when C sugar production was up  
to 3,5 million t. The carryover of C sugar to 1984/85 was limited to
214.000 t.
Sugar consumption  
Human consumption
Human consumption of sugar in 1983/84 continued to decline, as it has done  
for the last three years. It now stands at between 9,2 and 9,3 million t.  
Per capita consumption of sugar in the Community has also declined :  from  
35 kg in 1981/82 to 34,5 kg in 1982/83 and 34,1 kg in 1983/84. The use of  
other sweeteners (natural and artificial) is not unrelated to this trend.
Non-food sector and degree of self-sufficiency
In 1983/84, about 82,000 t were used in the chemical industry. The  
production refund awarded from 1 August 1983 onwards was 3,88 ECU per  
100 kg of white sugar used.
The Community's self-sufficiency in sugar in 1983/84 fell to 117,4%.
Isoglucose
Consumption and production of isoglucose in the Community appear to have  
remained almost unchanged in 1983/84. Exports and imports of isoglucose to  
and from non-member countries are negligible but there is some trade  
between the Netherlands and France and Belgium.

- 45 -
Production/consumption (EUR 10)
1976/77 1977/78 1978/79 1979/80 1980/81 1981/82 1982/83 1983/84
82,6 102,8 139,1 164,1 179,7 182,6 182,3 178,5
6. Trade
Between Member States
Italy and Belgium imported the largest quantities of unprocessed sugar from  
other Community countries in 1983/84. Italy's traditional suppliers are  
France and Germany, whereas Belgium has for several years been importing  
large quantities of unprocessed sugar from France for subsequent export to  
non—member countries via the port of Antwerp. The main outlets for sugar  
in the form of processed products are the Federal Republic of Germany,  
France and the United Kingdom, which import from the other Member States.
With non-member countries
As in the past, most of the preferential sugar imported from the ACP  
countries went to the United Kingdom in 1983/84. Some was also imported by  
France (12% of total preferential imports) and Italy.
In 1983/84 contracts were awarded by tender for most of the sugar exported  
on Community responsibility. Awards were thus made for 3.069.000 t of  
sugar (white sugar equivalent). In addition, 49.000 t of sugar were  
committed under the "periodic" system. Including exports of C sugar, the  
total volume of exports of unprocessed sugar in 1983/84 should reach about  
4,1 million t of white sugar equivalent.

- 46 -
7. Community prices
1983/84
The average increase in agricultural prices in ECU was 4,2% for the  
Community as a whole, compared with an increase of only 4% in the  
intervention price for white sugar.
Other price increases in the sugar sector were aligned on the 4% increase,  
except in the case of the threshold price for molasses, which was increased  
by 6,0%.
1984/85
Since the market situation called for a very cautious price policy, the  
average level of agricultural prices in ECU dropped by 0,5% in the  
Community as a whole, desregarding the effect of related agri—monetary  
measures.
In the sugar sector, where the aim is to adjust output to market outlets  
and to make producers pay the entire cost of the disposal of Community  
surpluses, prices in ECU remained the same as in the previous year. The  
only change was that, in the system of reimbursement of storage costs, the  
amount of the monthly reimbursement was reduced to 0,53 ECU/100 kg  
(compared with 0,57 ECU/100 kg before) when it was noted that interest  
rates in the Community enabled the standard interest rate used for  
calculating storage costs to be reduced from 11% to 10% per year.
Prices on the internal market
Ex—refinery market prices net of tax charged by the sugar industry in  
1983/84 were close to the intervention price in most member countries. In  
Italy and Ireland, prices continued to exceed the intervention price by a  
larger amount, whereas in Greece they were below the intervention price.

8. World market trends
Production and consumption
During 1981/82 the world market situation had been marked by a considerable  
excess of production over consumption. The same situation prevailed in  
1982/83, causing a considerable increase in stocks. On 1 September 1983  
they reached a record level, equivalent to 40% of world consumption, with  
an effective surplus (quantity above normal stocks) of about 14 million t  
(raw sugar equivalent).
During 1983/84 consumption has been again lower than production, not  
allowing any reduction in stocks.
World prices
At the end of September 1982 prices for raw sugar in New York had fallen to  
around 5,5 cents/lb; they did not begin to recover until spring and summer  
1983 (level attained about 11 cents/lb). They resumed their downward trend  
and in autumn 1984 fluctuated between 4 and 5 cents/lb (12 to  
12,50 ECU/100 kg).
the average price for white sugar for immediate delivery (spot price) on  
the Paris stock exchange was 26,14 ECU/100 kg in the previous year).
These low prices are due to the very large surpluses that have existed  
since 1981/82, and the failure at the end of June 1984 of the UN Conference  
on the conclusion of a new International Sugar Agreement. As the  
negotiations for an international agreement with economic provisions were  
unsuccessful, an administrative agreement was concluded and will come into  
force on 1 January 1975.
World outlook for 1984/85
According to preliminary estimates available for 1984/85, output could  
attain 97 million t of raw sugar equivalent.

- 48 -
This represents an increase of 1 million t on the previous year. A fairly  
significant increase is expected in Community output and a distinct  
increase in production in South Africa, Australia and the Philippines. 
Production in these countries fell appreciably in 1983/84 because of  
drought. In contrast, production in the USSR and Brazil should decline.  
In India, where production in 1983/84 was already fairly low, and in Cuba,  
output is expected to be slightly reduced.
Consumption is expected to be 1,7% above the 1983/84 level, thus not  
exceeding production.
These prospects offer little hope of any significant and lasting  
improvement in sugar prices in the coming months.
9. EEC outlook for 1984/85
The area under sugarbeet in the coming year will probably be
1.721.000 hectares (up 3,1% on the previous year).
The results of analyses carried out in the field up to the beginning of  
October 1984 and the results obtained at the start of the processing year  
indicate a sugar yield per hectare of 6,79 tonnes. Sugar production from 
beet in the Community may therefore be estimated at 11,91 million t, in  
addition to which there will be 290.000 t of cane sugar from the French  
overseas departments and 19.000 t of sugar processed from molasses. This  
makes a total production figure of 12,22 million t of white sugar.
Sugar consumption in the Community will be about the same as in 1983/84,  
i.e. around 9,4 million t.
If imports of preferential sugar, traditional external trade in sugar in  
the form of processed products and the carryover to 1984/85 are also taken  
into account, it is estimated that the total availability of sugar for  
export, including C sugar, will be fairly close to the quantity  
effectively exported in 1983/84 (about 4,1 million t of white sugar 
equivalent).

- 49 -
10. Economic aspects of the measures taken
- Levies and refunds
Because of the level of world prices, which were significantly below  
Community prices throughout the marketing year, all exports of sugar  
covered by the quotas qualified for export refunds. The average refund  
on exports for the 1983/84 marketing year was 352,41 ECU/t of white  
sugar, which is fairly close to the average of 351,12 ECU/t for the  
previous marketing year.
Import levies for 1983/84 averaged 390,60 ECU/t of white sugar and  
334,20 ECU/t of raw sugar.
- Intervention
No sugar was taken into intervention in 1983/84.
11. Budgetary expenditure
In recent years expenditure in the sugar sector has fluctuated  
considerably on account of changes in world prices and in Community stocks.
Expenditure by the EAGGF Guarantee Section was thus 768 million ECU in  
1981, 1.242 million ECU in 1982 and 1.316 million ECU in 1983; it is  
estimated at 1.602 million ECU for 1984.
Since the 1981/82 marketing year the cost of disposing of surpluses  
resulting from the difference between sugar production and consumption in  
the Community has had to be borne entirely by the producers themselves.  
This expenditure is covered by revenue from the basic production levies  
and the B quota levies payable on A and B sugar and isoglucose. Another 
special levy to equalize storage costs is charged on all sugar produced  
and disposed of within the quotas, in order to cover the reimbursement of  
the relevant storage costs.

- 50 -
After deduction of the revenue from the levies in the sugar sector 
(production and storage levies), net Community expenditure totalled 
285 million ECU in 1981, 536 million ECU in 1982 and 368 million ECU in  
1983; it will be about 377 million ECU in 1984. However, most of this is  
expenditure resulting from the need to export a quantity of Community  
sugar corresponding to the 1,3 million t of preferential sugar imported 
from the ACP countries; this expenditure has fluctuated between 330 and  
460 million ECU in recent years.

4. OLIVE OIL
Introduction
Establishing Community olive oil statistics for the most recent marketing  
years presents the same difficulties as previously. Nevertheless, the  
information available gives the following picture.
Of the oil produced in the Community, 0,20% comes from France, 30% from  
Greece and 70% from Italy. In 1980 the value of olive oil production as a  
proportion of the value of agricultural production in each country was  
11,0% in Greece and 5,8% in Italy, and olive oil production overall  
represented 1,4% of the value of final agricultural production in the  
Community.
Until 1975 approximately 70% of the Community's requirements were met by  
Community production, but over the last seven years this percentage has  
been steadily increasing and with the accession of Greece the Community has  
become virtually self-sufficient, quantitatively, if not qualitatively.
According to available information, 2,7 million ha are planted with olive  
trees in the Community (2,2 million ha in Italy and 0,5 million ha in  
Greece). This accounts for roughly 27% of the total world area under  
olives and 2,5% of Community UAA. These areas remain more or less the  
same. According to certain estimates, the total number of cultivated and  
uncultivated olive trees is about 307 million (185 million in Italy, 117  
million in Greece and 5 million in France).
The number of families involved in olive-growing in Italy, Greece and  
France is about one million, 400.000 and 40.000 respectively.
In a normal year, Community production of olive oil is about 50% of world 
production but since olive trees bear fruit in alternate years only  
production can vary sharply from one year to another.
Production
Since 1978/79 aid to growers belonging to a producers' organization has  
been based on the actual quantity of oil produced. Other growers receive  
aid at a fixed rate according to the number and production potential of the  
trees they cultivate. The Council adopted new general rules in this  
respect in July 1984. These are applicable from 1 November 1984, thus  
coinciding with the extension of the arrangements for the granting of-aid—  
at a fixed rate to small producers, i.e. those whose output of olive oil is  
less than 100 kg.
In France all growers belong to an organization, in Italy roughly 95% and  
in Greece about 85%.

-52 -
On the basis of the applications for aid, production in the 1982/83  
marketing year was 422.000 t in Italy, 365.000 t in Greece and 2.000 t in  
France. Nevertheless it is worth mentioning that, in Italy in particular,  
the quantity for which aid is given are inferior to those listed in the aid  
applications. The quantities covered by aid applications for 1983/84 were  
not yet known when this report was drawn up.
3. Consumption and marketing
A system of consumption aid was introduced in the Community on  
1 April 1979. The aid in question is granted for oil put up in packaging  
of a maximum capacity of five litres by approved packaging establishments  
and is subject to the oil being marketed at a price which takes account of  
the consumption aid. Only six countries, however, operate packaging  
establishments approved for the purposes of the scheme (Italy, France, the  
United Kingdom, Greece, the Netherlands and Belgium).
From 1978/79 - the marketing year in which the aid scheme was operated for  
the first time - up to and including 1982/83, aid applications (most of  
which are made in Italy) have shown an average annual increase of about 25%.
For 1982/83, applications were made in respect of about 392.000 t.
Applications made during the period to the end of October 1984 suggest that  
the figure for 1983/84 will be of the order of 400.000 t.
The increase in the quantities eligible for consumption aid can be 
explained partly by the heavier consumption of Community oil at the expense 
of oil imported from non-member countries, which does not qualify for the  
aid, partly by the fact that the system was introduced progressively in  
Greece beginning only in 1981.
Regarding the impact of the aid on the retail price, six years of operation  
of the scheme show that it has been effective and consequently, at least in  
the most important user state of olive oil, that retail prices for olive  
oil have increased much less than wholesale prices.

Trade
Traditionally the Community has been the world's largest bulk importer of  
olive oil. Since the accession of Greece, however, and in view of the  
quantity of oil available in that country, imports from non-member  
countries have fallen from 125.570 t (average for the five marketing years  
preceding enlargement) to 36.900 t in 1982/83 and 61.500 t in 1983/84 (the  
latter figure being based on import licences issued up to 31 October  
1984). The main importing Member State remains Italy, followed by France.
Since the accession of Greece, exports from the Community to non—member  
countries have exceeded the quantities traditionally exported. Compared  
with the five marketing years prior to enlargement, during which exports  
were 16.890 t, exports were 56.000 t in 1982/83 and, on the basis of exp.  
licences issued, 66.200 t in 1983/84.
Of the quantities exported during the 1983/84 marketing year, no less than  
12.400 t came from intervention, of which 6.500 t were from Italy and  
5.900 t from Greece.
Prices
(a) Common prices
The new organization of the market in olive oil came into force on  
1 January 1979. For the 1983/84 marketing year the mechanism  
established was as follows:
ECU/100 kg
Producer target price 319,42 
Production aid 70,26 
Intervention price 229,92 
Representative market price 196,87 
Threshold price 193,25
The consumption aid is equal to the difference between the producer  
target price less production aid, and the representative market price.  
For the 1983/84 marketing year it was 52,29 ECU/100 kg.
For 1984/85 the prices fixed by the Council are as follows:

ECU/100 kg
Producer target price  
Production aid  
Intervention price  
Representative market price  
Threshold price316,23
69,56
227,62
196,87
195,74
(b) Market situation and intervention purchases
The 1983/84 crop was very large in Italy but only average in Greece.
This led to massive quantities (107.000 t) being taken into  
intervention in Italy, whereas the figures for Greece were fairly low  
(a total of 19.000 t). Direct sales of Greek oil on the Italian market  
continue to grow, thus reducing the quantities taken into intervention  
in Greece. Sales from intervention totalled nearly 84.000 t in 1983/84.
(c) Olive oil held by the Italian and Greek intervention agencies
After purchases and sales in Italy and Greece, approximately 135.000 t  
of olive oil were in storage on 31 October 1984 (117.000 t in Italy and
18.000 t in Greece), against 92.000 t at the same date of the previous 
year.
Economic aspects of the measures taken  
(a) Import levies
Since June 1976 the levy has been fixed by tender, account being taken  
not only of the world market but also of the Community market and of  
levy offers made by traders. No particular difficulties arose in  
connection with the fixing of levies in 1983/84; the major rise in the  
threshold price has, however, meant a proportional increase in the levy.

(b) Refunds
During the 1983/84 marketing year a refund was granted on exports of  
olive oil put up in packaging of less than 5 kg. The level of the  
refund, which fluctuated between 32 and 60 ECU/100 kg, enabled  
40.600 t to be exported by the end of October 1984, compared with  
39.100 t by the last marketing year.
Budgetary expenditure
Expenditure in the olive oil sector consists of intervention purchasing,  
aid paid to olive oil producers, consumption aid paid to packaging plants  
and export refunds.
EAGGF Guarantee Section expenditure on olive oil was 675,3 million ECU in  
1982. Forecast expenditure for 1984 is 888 million ECU.
For 1985, expenditure is estimated, on the basis of the draft budget for  
1985, at 875 million ECU. Two main factors explain the size of the  
figures for these last two marketing years compared with expenditure in  
previous years: the steady increase in the catching-up rate for
production aid payments in Italy and the alignment of aids in Greece,  
which is a major olive oil producer.
Expenditure on olive oil accounted for 4,3% of total Guarantee Section  
expenditure in 1983 and 4,8% in 1984. For 1985 the estimate is 4,9%.

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5. OILSEEDS AND PROTEIN SEEDS
I. Rape and sunflower seed  
1. Introduction
In 1983, the share of oilseeds in the value of final agricultural  
production was slightly above 1% and these crops accounted for 1,7% of  
the Community's UAA. World production of rape seed was 14,5 million t  
as compared to 15 million t in 1982; Community production fell in 1983  
to 2.513.000 t, and the Community's share of world production therefore 
fell to 17% from 18% last year.
World production of sunflower seed fell to 15,6 million t in 1983 from  
16,3 million t in 1982. Community production of sunflower seed was
957.000 t in 1983, representing 6% of world production.
The Community’s own oilseed production meets only a very small part of  
its oil and oilcake needs. The degree of self-sufficiency in 1983 was  
approximately 28% for oil, exlcuding olive oil, and 8,6% for oilcake.
2. Production
In 1983, the Community area under rape was 1.104.000 ha compared with
1.005.000 ha in 1982, an increase of 10%. Area increased in all of the  
major producing countries with the exception of France. Yields  
however, were lower by 9% on 1982 figures (2.513.000 t compared to
2.682.000 in 1982). The area under sunflower seed rose by 42% from
348.000 h in 1982 to 493.700 h in 1983. Yields rose to 957.000 t from
746.000 t in 1982. This represents an increase of 28%.
3. Consumption
The demand for rape and sunflower seed depends on the demand for rape  
and sunflower oil and oilcake; the latter is in turn determined by the  
overall demand for oil and oilcake and by the relationship between the  
prices of rape and sunflower oil and oilcake and the prices of  
alternative products. This being the case, two sets of consumption  
data will be given, one for oil and the other for rape and sunflower  
cake, while oilseeds will be dealt with separately.
(i) Oil
Consumption of colza oil in 1983/84 stayed at the same level as for  
1982/83.
Sunflower oil consumption decreased very slightly in 1983/84 as  
compared to 1982/83.

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(ii) Oilcake
Consumption of rape seed cake increased in 1983/84 in comparison  
to 1982/83, from 1.746 million t to 1.881 million t. This  
reflects the increase in Community imports during 1983/84  
together with a very slight increase in the Community's own  
production.
Sunflower cake consumption fell slightly in 1983/84 compared to  
1982/83 from 1.310 t to 1.308 million t. However, with the  
increased sunflower crop in 1983/84 within the Community there  
was less sunflower meal imported.
(iii) Oilseeds
Since the crushing margins for rape seed were more favourable  
than for competing oilseeds, no difficulty was experienced in  
marketing the 1983 rape seed crop.
Since the Community is considerably deficient in sunflower seed,  
no difficulty was experienced in marketing even the larger 1983  
crop.
4. Trade
Imports of rape seed rose to 326.000 t in 1983/84 from 131.000 t in  
1982/83. This reflected the lower production within the Community  
together with the increased demand for rape seed.
Imports of sunflower seed decreased from 566.000 t in 1982/83 to
360.000 t in 1983/84. This reflects the increase in the EEC's own  
sunflower seed production.
Exports of rape and sunflower seed remained at relatively low levels  
(9.000 t of rape seed and 3.000 t of sunflower seed in 1983/84).
Trade in rape within the Community consists mainly of French exports to  
Germany. Sunflower seed is traded largely between France and Germany.

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5. Prices
(a) Common prices
For the 1983/84 marketing year the target price for rape seed was  
48,22 ECU/100 kg and 57,71 ECU/100 kg for sunflower seed. These 
figures represent a 4% increase and a 6% increase respectively on 
the previous year. This was the first year in which rape seed  
prices were influenced by the guarantee threshold arrangements.  
For the 1984/85 season the Council agreed to introduce a  
guarantee threshold for sunflower seed because they wished to  
moderate the growth in the cultivation of this crop. For the  
1984/85 marketing year the guarantee thresholds were set at
2.410.000 tonnes for rape seed and 1.000.000 tonnes for sunflower  
seed. The target prices for 1984/85 were fixed at 47,26 ECU/100 
kg for rape seed and 58,22 ECU/100 kg for sunflower seed.
For 1984/85 the Commission again provided for a special bonus in  
addition to the intervention price for double-zero rape  
varieties. This measure is designed to support the production of  
these varieties in the Community.
6. Market Prices
(1) World market price
During 1983/84 world market prices generally rose following the  
very high prices in the soya markets, also world oilseed  
production was lower than for 1982/83. For 1984/85 world oilseed  
production is likely to be much higher than in 1983/84 although  
carryover stocks are likely to be low. At the beginning of the  
1984/85 marketing year oil prices have tended to be fairly high 
compared to meal prices because there has been a tight supply of  
oil. Meal prices have been more affected by the world market  
price for soya beans which has fallen considerably in recent  
months and has pressured meal prices. In addition, there has  
been a reduced demand for meal, particularly from the EEC since  
the introduction of the milk quota system. A third factor which  
has had some effect has been the abundant cereal harvest.
(2) Community market
During the 1983/84 campaign prices obtained by Community  
producers for both sunflower seed and rape seed were higher than  
the intervention price and in many cases higher than the target  
price.
7. Outlook
The Community rape crop for the present marketing year (1984/85) is  
estimated at 3,453 million tonnes which is over 30% higher than the  
1983/84 crop. The large increase is principally due to very favourable  
weather conditions rather than increased plantings. As regards selling  
the crop, the marketing has been slower than at the same time last year  
and there have already been quantities of "double—zero" varieties  
accepted into intervention in Denmark. Apart from the specific problem  
of "double zero" rapeseed in Denmark, the selling of the 1984 crop does  
not seem to pose major problems.

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The Community sunflower seed crop for 1984/85 is estimated at  
1,15 million tonnes, an increase of over 9% on last year. This again  
is largely due to favourable weather conditions giving rise to  
increased prodution.
8. Economic aspects of the measures taken
(a) Aid and refunds
Aid for rape seed in the 1983/84 marketing year fluctuated  
between 0 ECU/100 kg at its lowest level and 21,713 ECU/100 kg at  
its highest. The average aid was 8,819 ECU/100 kg. The export  
refund for the same period varied between 0 ECU/100 kg and  
21 ECU/100 kg.
For sunflower seed aid varied between 0 ECU/100 kg and
21,577 ECU/100 kg. No export refunds were fixed for this product
because of the Community deficiency situation.
(b) Intervention
During the 1983/84 marketing year there were no offers into  
intervention. All of the crop was sold during the marketing year.
(c) Change in aid rules
By Regulation (EEC) No 1474/84 the Council provided for certain  
simplifications of the systems for fixing the aid and  
restitution. Until 30 June 1984 the existing systems provided,  
on the one hand, the fixing of the aid and the restitution and  
the publication of these amounts in ECU, and on the other hand,  
the fixing and the publication of the differential amounts which  
are monetary coefficients which apply to the target price as well  
as to the amounts of the aid and restitution. With the aim,  
essentially, of simplifying the administrative tasks of the  
Member States the Council decided to replace the double system  
given above by one publication of the aids and restitutions which  
are fixed and these are given in national currencies. This new  
system became effective on 1 July 1984.
9. Budgetary Expenditure
EAGGF Guarantee Section expenditure on rape and sunflower seed amounted  
to 928 million ECU in 1983. This was 31% more than in 1982, The  
appropriations allocated for 1984 are 711 million ECU.

Soya beans
From 1974 to 1978 the area under soya, almost all of it in France, was  
about 4.000 h. Between 1979 and 1982 it rose to 17.000 h. With  
production reaching 30.601 tonnes in 1982. In 1983 production rose to  
89.039 tonnes. The area in Italy had increased tenfold over the 1982  
level. The soya crop accounts for only a very small proportion of  
Community UAA, world production (77,8 million tonnes in 1983/84) or  
consumption (18 million tonnes of seed equivalent in 1983/84).
For the 1984/85 marketing year the Council agreed to extend the period in  
which aid is fixed from 6 months (between November and March) to  
12 months. In addition Member States could choose to grant aid to the oil  
mills instead of the first purchaser for the 1984/85 season.
For the 1984/85 marketing year, the final price was fixed at
57,01 ECU/100 kg and the minimum price at 50,17 ECU/100 kg; these prices
represent an increase of 1,5% as compared to 1983/84.
Aid for soyabeans in the 1983/84 marketing year fluctuated between  
15,836 ECU/100 kg and 20,653 ECU/100 kg. The aid at the start of the  
1984/85 marketing year was about 25 ECU/100 kg.
EAGGF Guarantee Section expenditure on soyabeans amounted to 6,0 million  
ECU in 1983, compared to 7,3 million ECU spent in 1982. The  
appropriations allocated for 1984 are 29 million ECU.

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III. FLAX SEED
Two types of flax are grown in the Community :  fibre flax, which is grown 
mainly for the production of fibres but which also yields large quantities of  
seed, and seed flax cultivated solely for seed.
With about 65 000 ha producing 60 000 t of seed in an average year, the  
cultivation of flax (1) accounts for only a very low proportion of the  
Community UAA and the world production of flax seed (5.3 million ha with 2.4  
million t in 1983 according to the FAO, against 5.4 million ha with 2.9  
million t in 1982).
This crop makes only a modest contribution to meeting the Community's large  
requirements, since imports in 1983 amounted to 289 000 t of flax seed  
(273 000 t of which came from Canada), 38 000 t of oil (31 000 t from  
Argentina) and 572 000 t of oilcake (438 000 t from Argentina and 94 000 t  
from the United States)
The cultivation of flax for oil is underdeveloped in the Community. In 1983  
only 2 112 ha(2 530 t) were planted against 3,147 ha in 1982 and 4 294 ha in
1981. For fibre flax, despite a slight increase in area in the community in  
1983 compared with 1982 the total production of seed from that cultivation was  
only 44,500 t against 62 500 t in 1982 because of the exceptional yields of  
fibre flax in 1982.
For the 1983/84 marketing year, the guide price was fixed at 54.59 Ecu/100 kg  
compared with 51.05 Ecu/100 kg for 1981/82 (+ 6 %), the average world market  
price having been set at 37.325 Ecu/100 kg, aid was only 17.265 Ecu/100 kg  
compared with 24.862 Ecu/100 kg for 1982/83 (world price 26.638 Ecu).
EAGGF Guarantee Section expenditure on seed flax and fibre flax (1) are for  
1983 14.5 Mio ECU.
(1) See also under 7 B :  Fibre flax and hemp.

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6. DRIED FODDER, PEAS AND FIELD BEANS
a) Dried Fodder
1. Introduction
The common organisation of the market in dried fodder covers the  
following products: dehydrated fodder, the main sun-dried légumes,  
protein concentrates obtained from lucerne and grass juice and  
by-products obtained in the manufacture of protein concentrates. 
Although, dehydrated potatoes were also included for the 1983/84 
marketing year, the Council did not decide to extend their inclusion  
to the 1984/85 marketing year.
2. Production
Production of dehydrated fodder, other than dehydrated potatoes, in  
the Community for 1983 was 1.477.830 tonnes of which 140.000 tonnes  
were sun-dried. Production increased by 2%, an increase for the first  
time for several years.
In 1983, France was again the main producer with 895.000 tonnes (61%)  
of Community production.
The production of dehydrated potatoes for fodder was down on previous  
years to 16.980 tonnes, a fall of 60% as compared with 1982  
(28.810 tonnes). Germany appears to be the only country continuing to  
produce dehydrated potatoes.
For sun-dried fodder, the common organisation of the market has been 
in operation since 1 July 1978. Community production eligible for aid  
in 1984/85 is estimated at 190.000 tonnes; this is an increase of 36%  
as compared with last year.
3. Quantities available
Dehydrated fodder available in 1983/84 totalled 1.554.249 tonnes  
compared with 1.536.386 in 1982/83.
4. Trade
Community imports of dried fodder fell from 235.366 tonnes in 1982 to  
224.331 tonnes in 1983. USA and Hungary were again major exporters of  
dehydrated fodder to the Community although this year Community  
exports of dehydrated fodder to non-member countries have never been  
on a large scale. In 1983, they amounted to 7.912 tonnes as compared  
to 27.803 tonnes for 1982.

_ 63_
5. Prices
For the 1983/84 marketing year world market prices for the basket of  
products (soya meal, corn gluten feed, citrus pellets and barley)  
rose until late summer and early autumn and then they began to fall.  
Prices continued to fall until October 1984.
The reason for the price increase was largely because the basic price  
closely follows the price of soya meal which was high because the  
soya bean crop was lower. Prices for the basket were generally above  
150 ECU/t to over 200 ECU/t but they began to fall after the summer  
because of the various factors detailed in item 7 outlook.
6. Economic aspects of the measures taken
For 1984/85 the Council fixed the guide price at 177,15 ECU/tonne and  
the flat-rate aid at 8,41 ECU/tonne, i.e. at levels lower in both 
cases by 1% than in 1983/84.
During 1983/84 the Council agreed the utilisation of a basket of  
imported competing products: soya meal, corn gluten feed, citrus  
pellets and barley; on which to formulate the world market price of  
dried fodder in the absence of offers or quotations for dehydrated  
fodder on the world market. This method was first used in  
September 1983.
7. Outlook
Production forecasts for 1984/85 are between 1,6-1,65 million tonnes,  
of which 1,4-1,45 million tonnes is estimated for dehydrated fodder  
and 0,190 million tonnes is estimated for sun-dried fodder.
The increase is mainly attributed to increases in production in  
France and Denmark. The former is due to increased area sown and the  
latter to favourable weather conditions.
It is possible that there could be some marketing problems in the  
1984/85 marketing year because of the low price of competing products  
on the world market together with a reduced demand from the feed  
mills.
8. Budgetary expenditure
EAGGF Guarantee Section expenditure on dried fodder was 57,7 million  
ECU in 1983 as compared to 41,7 million ECU in 1982. The  
appropriations for 1984 are 45 million ECU.

b) Peas and beans used in animal feed
Since the Community's demand for feed protein greatly exceeds 
production, the Council adopted on 22 May 1978, special measures  
designed to expand the utilisation of peas and beans in animal feed. For  
the 1984/85 campaign the Council has agreed that these measures should  
be extended to include sweet lupins. In addition, measures for the  
rationalisation of inspection procedures have been introduced for the  
1984/85 marketing year.
In 1983/84 aid for the processing of peas and field beans was paid in  
respect of 571.000 tonnes of peas and 190.000 tonnes of field beans.
This represents a 46% increase in the case of peas and a 4% increase in  
the case of beans compared to 1982/83 (390.000 tonnes and
183.000 tonnes, respectively). It reflects an increase in the  
utilisation of peas in Germany, Belgium, Holland, UK and Denmark but the  
quantities used in France have declined over the last two years. For  
beans there have been increases in utilisation in France and Belgium.
For the 1983/84 marketing year the activating price for aid to peas and  
field beans was fixed at 51,76 ECU/100 kg of soya cake, while the  
minimum purchase price was set at 29,19 ECU/100 kg. The aid varied  
between 7,375 and 12,915 ECU/100 kg.
For the 1984/85 marketing year, the activating price for aid for peas  
and field beans was fixed at 51,24 ECU/100 kg for peas and field beans  
and 47,82 for lupins. The minimum purchase price for these were 28,90  
and 31,97 ECU/100 kg, respectively.
The prices for peas and field beans are 1% down on those for last year.
c) Peas and beans for human consumption
On 18 May 1982, by Regulation (EEC) No 1432/82, the Council adopted a  
new set of special measures for peas and beans, extending the aid system  
to peas and field beans used for human consumption. The new system  
entered into force on 1 August 1982.

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The aid for peas and field beans destined for human consumption is  
granted on a different basis to that applicable for peas and field beans  
for animal feed. In the case of human consumption, aid is granted for an  
amount equal to the difference between the guide price and the world 
market price registered at the frontier of the Community for peas and  
beans of varieties capable of competing with Community production.
EEC production of peas and field beans qualifying for such aid was
78.000 tonnes in 1982/83, whilst the quantity qualifying for aid in  
1983/84 was 132.722 tonnes. The guide price for 1983/84 was  
33,44 ECU/100 kg and that for 1984/85 was set at 33,11 ECU/100 kg. The  
world market price for 1983/84 started the season at 24 ECU/100 kg and  
was changed once during the year to 28 ECU/100 kg. At the start of the  
1984/85 season the world market price was set at 27 ECU/100 kg.
Budgetary expenditure for peas and beans
Expenditure in this sector by the EAGGF Guarantee Section in 1983 totalled  
84,6 million ECU, compared to 41,1 million ECU spent in 1982. This increase  
indicates the increased utilisation of peas and beans within animal feeds.
The appropriations allocated for 1984 amounted to 133 million ECU.

-  6 6 -
7. COTTON, FIBRE, FLAX AND HEMP
A. COTTON
1. Introduction
Although cotton is not included in Annex II to the Treaty, Protocol No 4  
on cotton which is part of the Treaty of Accession of Greece recognizes 
the specifically agricultural character of this product.
At Community level cotton is of limited importance both with regard to  
the areas planted (1,5% of the UAA) and with regard to the number of  
growers (70.000). Nevertheless, for Greece, the only producer Member  
State, cotton is of very great economic and social importance.
According to the FAO, world production of cotton fibre (grown on  
31,7 million ha) was 14,7 million t in 1983. Community output was
13.000 t and the Community share of world production is therefore less  
than 1%.
2. Production
Under the Greek national aid scheme it was not possible to maintain the  
area under cotton. It fell from 183.000 ha in 1977 to 141.000 ha in  
1980. In 1981, the first year of application of the Community aid  
scheme, the area under cotton was 126.000 ha. In 1982 it rose again to
137.000 ha and in 1983 to 168.000 ha, while in 1984 it reached
192.000 ha, the highest figure since 1963 (when it was 231.000 ha). It  
should be noted that the figure of 200.000 ha was also exceeded in 1961  
and 1962. Community production in 1983 was 402.500 t of unginned cotton  
and 130.000 t of cotton fibre compared to 316.000 and 101.000 t in
1982. Production of cotton seed was 213.500 t in 1983 compared to
158.000 t in 1982.
3. Trade
Since unginned cotton is difficult to transport over long distances both  
for technical and economic reasons, there is no international trade in  
this product.

_ 67 _
Sines the Community has a spinning capacity which is far greater than  
its production of fibre, it imports large quantities.
In 1983 the Community of Nine imported 807.000 t of cotton fibre (raw  
cotton plus linters) compared to 772.000 t in 1982 and 677.000 t in  
1981. The United States (126.000 t), Turkey (96.000 t), the Soviet  
Union (124.000 t), Egypt, Syria and Brazil are the main suppliers (61%  
of total supplies). Community exports of cotton fibre in 1982 were only
28.000 t, 16.000 t of which were supplied by Greece.
Intra-Community trade is very limited (35.000 t) and supplies from  
Greece to other Member States amounted to only 5.400 t.
4. Prices
In order to calculate the aid, a theoretical world price is fixed for  
unginned cotton, based on the value of the products obtained from  
ginning less the ginning costs.
During the 1983/84 marketing year the world price for unginned cotton  
stayed very high from the beginning of the year until June 1984. Then  
it began to fall owing to the satisfactory outlook for the new harvest.  
It fell from 65,342 ECU/100 kg at the beginning of the year to  
62,004 ECU (-5,1%) at the end. The average world fibre price for  
1983/84 (87,6 ct/lb) was higher than that for the four previous years.
5. Aid scheme and budgetary expenditure
The aid scheme involves the granting of aid for the Community quantity  
of unginned cotton, equal to the difference between a guide price fixed  
by the Council and the world market price.

-  68 -
The full aid is granted only for a limited quantity and any excess  
production results in a reduction in aid for all producers.
For the 1984/85 marketing year, the Council fixed the guide price at  
94,14 ECU/100 kg, the minimum price at 89,44 ECU/100 kg and the quantity  
of unginned cotton which will receive the full aid at 500.000 t. The  
corresponding figures for 1983/84 are 92,75 ECU/100 kg, 88,12 ECU/100 kg  
and 450.000 t. The prices have therefore been increased by 1,5%.
During the 1983/84 marketing year the Commission, taking into  
consideration the world market situation, fixed the aid for unginned  
cotton 28 times. The aid was 23,6 ECU/100 kg in August but then, due to  
the fall in cotton prices in October, it was increased to  
26,9 ECU/100 kg. Following a recovery of prices the aid was gradually  
reduced from November to 21,1 ECU/100 kg in January and 21,8 in  
February. After that it rose again but the increase had scarcely any 
effect on expenditure since the quantities still to be ginned were  
insignificant. During the 1983/84 marketing year the average aid for  
the ginning period was only 24,8 ECU/100 kg as against 37,4 ECU in the  
previous year. The effect of this was that in 1983 expenditure on  
cotton by the Guarantee Section of the EAGGF was about 140,1 million ECU  
compared with 96,2 million in 1982. This expenditure is estimated at  
116 million ECU in the 1984 budget.

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B. FIBRE FLAX AND HEMP
1. Introduction
The area under fibre flax and hemp is less than 1% of Community UAA, but  
these crops are of considerable importance for the regions in which they  
are concentrated.
For the last ten years the Community area under fibre flax has been 
56.500 ha on average. The Community accounts for only 4% of the total  
world area under fibre flax (1,5 million ha) but for 12 to 15% of world 
production of flax fibre (700.000 t), as a result of yields which are  
well above the world average. The quality of the Community fibre is  
also well above that of flax produced elsewhere in the world (USSR,  
Eastern Europe, China, Egypt).
Paper hemp is grown only in a very small area in France. Italy produces  
a very small quantity of textile hemp.
2. Production
In 1982 the Community area under fibre flax, which in earlier years had  
been close to 60.000 ha and in 1981 had fallen to less than 50.000 ha,  
rose again. In 1983 the rise continued with around 53.000 ha being sown  
compared with 50.800 ha in 1982. This increase (+4%) is attributable to  
an overall improvement in the industry. The relative importance of the  
producer Member States has scarcely changed: France (80%), Belgium
(14%) and the Netherlands (6%). It should be noted that an attempt has  
been made to launch flax-growing in Scotland. Dew retting continues to  
replace water retting. This trend is a danger to future supplies of  
good quality certified seed.

_70 _
Following a growing cycle that was disturbed and delayed until June,  
pulling and retting conditions for the 1983 harvest were very  
satisfactory. The result was that the straw and seed yield was not  
large but the quantity and quality of the fibre were above average.
The area under paper hemp,  after a steady increase in previous years,  
began to fall in 1979 and dropped again in 1983 (-5%) to below 5.000 ha.
3. Consumption and stocks of fibres
Stocks of flax fibres held by scutching concerns, dealers and spinning 
undertakings, estimated by the trade at around 45.000 t at the start of  
the 1983/84 marketing year, fell during the year and were abnormally low  
at the year's end. Demand was very heavy, especially for short fibres.
Influenced by a steady market in flax tow, the market in hemp fibres  
also improved, leading to a fall in hemp stocks.
4. Trade
Since its unit value is too small to justify long-distance transport,  
there is no trade in flax straw with non-member countries.  
Intra-Community trade is limited to Belgian imports from France and the  
Netherlands.
In 1983 retting and scutching concerns in Belgium purchased 56.000 t  
(51.500 t in 1983) of flax straw in France and the Netherlands to swell  
the Belgian crop. The rise compared with the previous marketing year  
(+9%) is explained by a reduction in the supply of Belgian-produced  
straw.
After having fallen steeply in previous years, imports of flax fibre  
rose sharply in 1983 (to 19.500 t from 11.400 t in 1982), especially  
imports of short fibres, which reached 9.800 t compared with only  
3.700 t in 1982. The reason for this was the very heavy demand starting  
in the second half of 1983.
The quantities exported (30.800 t) still slightly exceed the already  
very large quantities recorded for 1982 (29.900 t).

-71 -
The Community does not produce enough low- and medium-quality fibre,  
which it imports from Eastern Europe, Egypt and China where it is  
produced in large quantities. However, it supplies the entire world and  
in particular Eastern Europe with long fibres, especially good and  
superior quality fibre which is not produced elsewhere.
Imports of hemp fibre fell slightly (from 5.600 t in 1982 to 5.200 t).  
Supplies came from China and Eastern Europe. Exports were only about
2.000 t.
5. Prices
The prices of flax straw rose sharply during the 1981/82 and 1982/83  
marketing years, and continued to rise appreciably in 1983/84. Returns  
for the majority of growers also rose sharply. Average selling prices  
for flax fibre, which have been rising since October 1981, continued  
rising throughout the 1983/84 marketing year. The rise was very steep  
for lower quality fibre, especially for the shortest fibres, for which 
prices practically doubled during the marketing year after having  
remained very low for several years. The contract price for hemp straw  
agreed between users and producers rose from FF 475/t (79,23 ECU/t) in  
1981 and FF 524/t (84,58 ECU/t) in 1982 to FF 560/t (86,26 ECU/t) in  
1983, a rise of 7%.
6. Outlook
As a result of the very high prices for flax straw and fibre, in 1984  
the Community area under fibre flax was 64.250 ha. This represents a  
substantial recovery (up 21%). Generally speaking, the present harvest  
is deemed to be satisfactory but too uneven to be described as  
excellent. Disposing of it should present no problems and supplies of  
the required quantities and qualities to users seem assured and no  
more. In addition, the very unfavourable weather conditions in  
September and October prevented 5.800 ha from being harvested.
The area under hemp (4.820 ha in France) is- very similar to that in
1983. Growth was slow and it is expected that yields and quality will  
be very uneven although average to good on the whole.

-72 -
7. Projections for fibre flax for 1984/85 and beyond
The very satisfactory marketing situation for straw and the promising  
situation for fibre from the 1984 harvests should enable producers and  
scutchers to increase the areas currently sown for one more marketing  
year so that stocks can be built up again. However, the fact that there  
is no threat of surpluses now or in the short term is due principally to  
a contraction of supply during previous marketing years, even if demand  
has undoubtedly increased. The future of the sector will be assured in  
the long term only if flax continues to capture an increasing share of  
the range of textile products available to the modern consumer. To do  
this, not only will flax have to maintain and increase the outlet it has  
found in the clothing industry, but it will also have to recover some of  
the other outlets it has lost. This could be achieved by means of  
greater creativity, backed up by appropriate information for users  
inside and outside the Community
8. Budgetary expenditure
The aid for fibre flax was fixed at 351,57 ECU/ha for 1984/85 compared  
with 355,12 ECU/ha for 1983/84 (-1%). Of this amount, 23,85 ECU are to  
contribute towards financing measures to encourage the use of flax  
fibres.
For hemp, aid for 1984/85 is 319,29 ECU/ha compared with 322,52 ECU/ha  
for 1983/84 (-1%).
Expenditure chargeable to the Guarantee Section of the EAGGF for fibre  
flax and hemp in 1983 was 19,3 million ECU.

-73 -
8. SEEDS
I. Introduction
The common organization of the market in seeds covers the following  
products:
dried leguminous vegetables for sowing CCT 07.05 A  
spelt for sowing CCT 10.01 A  
hybrid maize for sowing CCT 10.05 A 
rice for sowing CCT 10.06 A  
oilseeds and oleaginous fruit for sowing CCT 12.01 A  
seeds, fruit and spores, of a kind used for sowing CCT 12.03
This sector must be considered not only in terms of seed production but  
also in terms of its strategic value. In 1983 fodder seed produced a
12.609.000 ha crop of green fodder in the EEC, while permanent grasslands  
covered an area of over 46.000.000 ha. A production of around  
1,4 million quintals provides enough hybrid maize seed to put  
approximately 5 million ha under grain maize and forage maize. Similar  
examples can be given for rice and other seeds. It should also be  
stressed that indigenous varieties, particularly of legumes, are generally  
more persistent (long-lived) than varieties imported from abroad.
II. Production
Denmark is the main Community producer of grass seed; the Netherlands and  
the United Kingdom are also large-scale producers. France and Italy are  
the main producers of legumes.
In 1983 production of fodder seed in the Community was about 2,3 million  
quintals (2.344.305 in 1982); with legumes apparently reaching an  
equilibrium state. The area declared for the 1984 harvest (202.827 ha)  
was slightly higher than in 1983 (197.942 ha):
Graminae :  98.577 ha in 1983 as compared with 112.199 ha in 1984
Leguminosae :  99.365 ha in 1983 as compared with 90.628 ha in 1984.
The production of rice for sowing is running at around 370.000 quintals  
(1983). With the granting of Community aid, the use of certified seed  
has greatly increased. Community aid thus seems to be having a positive  
effect.
Production of hybrid maize seed is around 1.113.000 quintals (1983), i.e.  
the decline in production in the EEC seems to be continuing.

- 74 -
III.  Supply situation
Community supplies of fodder seed continue to be satisfactory. With  
2.3 million quintals available to meet an estimated demand of some
1.800.000 quintals, the Community is able to cover its own requirements  
for most of the species grown. The situation should remain more or less  
the same for the marketing year ahead. However, trade with non-member  
countries will continue, particularly in the case of certain species  
which are in short supply in the Community (Phleum pratense, Trifolium  
repens, Vicia sativa, etc.).
In the case of hybrid maize the supply situation is deteriorating and 
imports from certain Eastern bloc countries and the USA continue to rise  
(216.280 q in 1979/80; 386.987 q in 1982/83 to 31 May).
During the 1983/84 marketing year, however, imports fell to 287.290 q.
It remains to be seen whether this trend will continue or whether it is  
linked with the level of stocks from the previous marketing year. The  
trend in the rice sector is positive.
IV. Prices
Producer prices in the Community moved downwards by comparison with the  
same period last year. Prices on the Danish market, which is the main  
Community market, were as follows:
ECU/100 kg
September 1983 September 1984
Lolium perenne L (late varieties) 90 61
Lolium multiflorum L 86 74
Festuca pratensis L 107 0
Festuca rubra L 107 74
Poa pratensis 120 1
The countervailing charges on hybrid maize imports range at present  
(October 1984) from 17,3 to 78,9 ECU/100 kg depending on the country of  
origin.
For 1984/85 the reference prices for hybrid maize have been fixed as  
follows:
I. Double hybrids and topcross hybrids: 82 ECU/100 kg
II. Three-cross hybrids: 97 ECU/100 kg
III. Single hybrids: 194 ECU/100 kg

-75 -
V. Action decided
The Commission has fixed the reference prices for hybrid maize for the  
1984/85 marketing year. The lists of varieties of Lolium perenne L (high  
persistence, late or medium-late varieties; low persistence,  
medium-late, medium-early or early varieties) have been altered.
VI. Outlook
The harvest would seem to be satisfactory and the prices of some species  
are showing a downward trend.
VII. Budgetary expenditure
EAGGF Guarantee Section expenditure on seeds was around 43 million ECU in  
1983.

- 76 -
9. WINE
1982/83 wine year
Introduction
In 1983 wine represented % by value of the Community s final  
agricultural production. In 1982/83 the area under vines in pn^notion  
amounted to 2.341.000 ha, out of a total area of 2.418.000 ha, »
the Community's UAA; in five years the total area has been reduce y
222.000 ha (9,2%).
The FAO puts world wine production in 1982/83 at 360 million hi, which is  
44 million higher than the previous year's figure and higher than average  
production over the last five years (325 million hi).
Production
Production in the Community was 173 million hi in 1982/83, compared with  
140 million hi in 1981/82 and 164 million hi in 1980/81.
In the three years this represented 48,1% (in 1982/83), 44,3% (in 1981/82)  
and 46,3% (in 1980/81) of world production (on the basis of FAO figures;.
Since the area under vines in the Community represents only abolit 24% of  
the world vineyard, the average Community yield is considerably higher  
than the world figure.
Consumption
In 1982/83 total internal utilization accounted for 155 million hi  
compared with 150 million hi in 1981/82; these quantities include the
intervention distillation mentioned below.
(a) Human consumption
In 1982/83 direct human consumption was 121,9 million hi against  
124,8 million hi in 1981/82.
These figures confirm that the trend is still downwards, even though  
there was a slight upturn in consumption in 1979/80 (probably owing 
the increase in growers' own consumption which generally occurs m
years of abundant harvest).
This drop can be attributed to the reduction of consumption in the  
main producing countries, which the slight increases in the other
countries do not offset.

- 77 -
(b) Processing
The quantities processed in 1982/83 amounted to 32 million hi,  
including quantities used for making spirits of designated origin,  
quantities distilled under compulsory distillation measures and  
quantities distilled with Community aid.
The quantities distilled with Community aid in 1982/83 totalled  
21 million hi.
In the two previous wine years the quantities processed were  
24 million hi and 35 million hi, while the quantities distilled with  
Community aid were 14 million hi and 23 million hi.
(c) Self-sufficiency
The degree of self-sufficiency of the Community of Ten in 1982/83 for  
all internal utilizations was 110,8% (93,5% in 1981/82).
If the quantities distilled under the various intervention measures  
(about 21 million hi) are included in the supply figure, the degree of  
self-sufficiency for 1982/83 becomes 128,4% compared with 103,1% in  
1981/82 and 115,6% in 1980/81.
4. Stocks
At the end of 1982/83 stocks in the Community amounted to 89,3 million hi,  
well up on the previous year (76,4 million hi).
5. Trade
In 1982/83 imports into the Community of Ten were 5,1 million hi, whilst  
exports amounted to 8,9 million hi. (The figure for exports in the  
attached tables (the balance sheet) is different because it is calculated  
from the difference between the total of exports from Member States and  
intra-Community trade which is worked out on the basis of imports).
The trend is still for imports to drop, although since 1975/76 exports  
have shown an upward trend,  mainly owing to expanded Italian exports,  
despite a slight drop in 1982/83·

- 78 -
II. 1983/84 wine year
1. Production
The most recent production figures indicate a volume of 168 million hi, a  
drop of 5 million hi compared with the previous year.
2. Consumption
Total internal utilization accounted for 169 million hi, an increase of  
14 million hi.
(a) Human consumption
In 1983/84 direct human consumption was 125,4 million hi, arresting  
the downward trend which has been apparent for several years.
(b) Processing
The quantities processed in 1983/84 amounted to 42,8 million hi  
compared with 32,2 million hi in the previous marketing year.
The quantities distilled under Community intervention measures rose  
sharply (34,9 million hi as against 21,3 million in 1982/83) owing to  
the increase in quantities coming forward.
3. Prices
(a) Institutional prices
For 1983/84 the average increase in guide prices for all types of  
table wine was 5,5% compared with the previous year, except for  
type A1 white wines, where the figure was 6%.
(b) Average prices for the wine year  
- Red wine of type RI
French quotations remained stable for the whole of the year,  at a  
level slightly below the previous year's. They were, however,  
higher than Italian quotations, remaining at about 74% of the guide  
price.
Italian quotations fell over the year. By August they had fallen  
to 67% of the guide price. Quotations varied from the previous  
year's by -3,4% to -9,1%.

- 79 -
No Greek quotation could be taken into account during the year 
because the volumes in question were too low.
- Red wine of type RII
The only French quotation, for Bastia, was very low throughout the
year. It remained at around 67% of the guide price, 7,6% down on  
the previous year's average.
The only two Italian quotations available fell during the year,  
stabilizing at about 66% of the guide price. They were down 3,4%  
and 6,2% respectively on the previous year's quotations.
No Greek quotation was taken into account.
- White wine of type AI
French quotations were very irregular throughout the year. Starting  
very low, they strengthened in the new year and stabilized in June  
at 80% of the guide price, only to fall again to 70% of the guide  
price at the end of the marketing year. Average quotations were  
6,6% and 8,2% down on the previous year's.
Italian quotations, which were much lower than the French ones,  
fluctuated over a narrower range, between 65% and 69% of the guide  
price. All quotations were down on the previous year's levels by  
-5,7% to -11,6%.
Only one marketing centre supplied us with Greek quotations. The  
average quotation was 75% of the guide price, 12,8% up on the  
previous year's average.
- German wine
Quotations for white wine remained very low throughout the year.  
They reached their lowest level in October (23% of the guide price  
in the case of type A 11 wines and 75% in the case of type A III)  
before stabilizing and rising slightly towards the end of the  
marketing year to reach 61% of the guide price in the case of type  
A II wines and 77% in the case of type A III.

-  80 -
Average quotations for these wines were, however, 6,5% and 35%  
higher, respectively, than the previous year's disastrous levels.
Quotations for red wine continued to fall early in the marketing  
year and remained below the guide price until January. They  
recovered slightly thereafter, but the average for the year, 85% of  
the guide price, was still well down (-48%) on the previous year's 
figure.
(c) Prices on the Spanish market
Prices of white wines on the Spanish market were fairly stable  
throughout the year. There was a slight increase compared with the  
previous year, but because of the devaluation of the peseta the  
average Spanish price fell from 66% of the average Community price in  
1981 to 55% in 1982 and 50% in 1983.
III. Outlook
(a) Short term :  forecasts for 1984/85
The latest information available suggests that the 1984/85 harvest  
will yield slightly less than the previous year.
Production should be around 150 million hi.
(b) Medium term
Even if the 1984/85 harvest is of only average size, the trend in  
recent years suggests the likelihood of bigger average surpluses. It  
is therefore more necessary than ever to apply the instruments set up  
by the 1980-86 action programme effectively, especially as regards the  
conversion of vineyards to other uses. This requires the parallel  
implementation of a market policy which is consistent with the  
structural action programme, and therefore full implementation of the  
latest amendments to the basic Regulation, which aim to rebalance the  
market from the beginning of the year by means of distillation.

-  81 -
IV. Economic aspects
(a) Levies and refunds
1) Import levies
The import levies in the wine sector are known as "countervailing  
charges" and play only a very minor part since they do not apply  
to the 19 non-Community countries which have undertaken to observe  
the reference price and are the Community's principal suppliers.
The level of the countervailing charges has remained unchanged  
since 1981/82, except for red, rose and white wines put up in  
containers holding 2 litres or less, for which the charge has been  
abolished (0 ECU/Ï vol actual alcohol/hl).
2) Export refunds
The level of export refunds for wine rose at the beginning of  
1983/84 from 1,45 ECU to 1,55 ECU per % vol and per hi, except on  
exports to Africa, for which the refund was kept at 1,15 ECU.  
Refunds for liqueur wines other than quality wines p.s.r. were  
retained.
The quantities qualifying for refunds fell slightly in 1982,  
amounting to 2,05 million hi against about 2,33 million hi in 1981·  
They dropped appreciably in 1983 to only 1,10 million hi and shall  
remain at this level in 1984. «
(b) Quantities in respect of which intervention measures were taken  
In 1983/84 the following intervention measures were applied :
- at the start of the marketing year :
. authorization to conclude long-term storage contracts for table  
wines,  grape must and concentrated grape must,
. distillation carried out under the "price guarantee" (reserved  
for holders of long-term storage contracts),
.  preventive distillation.
- distillation of wine produced from table grapes and dual-purpose  
grapes.
- distillation of the by-products of wine-making.

-  82 -
The quantities of wine distilled with Community aid were of the order 
of 35 million hi, against 21 million hi in 1982/83·
The average of the monthly quantities covered by storage contracts 
amounted to 25,6 million hi (24,6 million hi in 1982/83), the maximum  
figure being 38,7 million hi (37,9 million hi in 1982/83)·
(c) Stock situation
At the beginning of 1983/84 stocks held by producers and the trade in  
the Community of Ten amounted to 89,3 million hi (against  
76,4 million hi at the beginning of 1982/83). Some 82 million hi can  
be expected at the end of the marketing year.
(d) Price unity
During 1982/83 monetary compensatory amounts were retained for  
Germany, France and Greece. They were later discontinued for France  
from 16 December 1983·
In the wine sector the representative rates for the various  
currencies were not altered during the marketing year 1983/84.
V. Budgetary expenditure
Expenditure by the Guarantee Section of the EAGGF on wine amounted to
659.0 million EUA in 1983; the provisional figure for 1984 is
1.174.0 million EUA and the estimate for 1985 is 691,0 million EUA. This is  
4,1%, 6,3% and 3,6% respectively of total expenditure by the Guarantee  
Section.
The figure of 1.174,0 million EUA can be broken down into 18,6 million EUA  
on refunds and 1.155,0 million EUA on intervention.

10. RAW TOBACCO
Introduction
In 1983 world leaf tobacco production totalled 5,98 million t, i.e. a fall  
of 13% compared with the 1982 record figure of 6,87 million t. Production 
was down for all types of leaf tobacco, especially the flue-cured and  
light air-cured varieties (- 19% and - 15% respectively), with the  
exception of oriental tobaccos, production of which rose by 5%.
Production fell substantially in the world's two major producing  
countries :  China's 1983 crop was an estimated 36% down on 1982  
(1,40 million t, compared with 2,18 million t in 1982), while the United 
States recorded an estimated fall of 28% (648 280 in 1983, as against  
905 000 t in 1982). The forecasts are that in 1984 the world's total leaf  
tobacco production will be around 5,92 million t, i.e. about the same as  
in 1983. In terms of groups of varieties, it is expected that the 1984  
harvest will be unchanged as regards oriental tobaccos (944 000 t), but  
that the production of dark air-cured and flue-cured tobaccos will fall,  
to 1,08 million t and 2,8 million t respectively. It is estimated that a  
total of 1,01 million t of light air-cured tobacco will be harvested in  
1984, i.e. an increase of 8% compared with 1983, largely as the result of  
a sharp rise in production in the United States. While, at 1,4 million t,  
China's 1984 production is unchanged compared with the previous year (to  
prevent stocks from building up), production in the United States is  
estimated at 746 000, i.e. 15% more than in 1983.
Production and structure
In 1983, Community production was 311 707 t, 6% less than in 1982.
During that period the area under cultivation rose by 3,7%, from 
176 692 ha in 1982 to 183 218 ha in 1983. The last three years' figures  
for the area under cultivation and for production are set out, both by  
group of varieties and by Member State, in the tables below.

- 84-
EEC
:  TYPEAREA (ha)PRODUCTION (t)
1981 1982 1983 1981 1982 1983
:  Dark air-cured  
:  Sun-cured  
:  Light air-cured  
:  Flue-cured  
:  Fire-cured  
:  Other27 428 
103 059 
23 891 
12 013 
5 019 
15129 294 
104 257 
25 437 
12 634 
5 018 
5226 986 
103 201 
32 241 
14 906 
5 837 
4765 587 
132 163 
76 055 
26 081 
9 113 
25775 458 
132 608 
82 923 
30 240 
10 196 
9862 078 
111 190 
94 533 
33 194 
10 663 
49
:  Total EUR-10 171 561 176 692 183 218 309 256 331 523 311 707
:  typeAREA (%)PRODUCTION (%) :
1982/1981 1983/19821982/1981 1983/1982 :
:  Dark air-cured  
:  Sun-cured  
:  Light air-cured  
:  Flue-cured  
:  Fire-cured  
:  Other+ 6,8 - 7,9 
+ 1,2 - 1,0 
+ 6,5 + 26,7 
+ 5,2 + 18,0 
0 + 10,7 
- 65,6 - 9,6+ 15,1 - 17,7 :  
+ 0,3 - 16,2 *  
+ 9,0 + 14,0 :  
+ 15,9 + 9,8 :  
+ 11,9 + 4,6 :  
- 61,9 - 50,0 :
:  Total EUR-10 + 3,0 + 3,7+ 7,2 - 6,0 :
:  COUNTRYAREA (%)PRODUCTION (t) :
1981 1982 1983 1981 1982 1983 :
:  Germany  
:  Belgium  
:  France  
:  Greece  
:  Italy3 161 
496 
17 081 
90 162 
60 6613 035 
495 
15 578 
93 006 
64 5752 984 
523 
14 256 
94 022 
71 4337 839 
1 419 
41 626 
127 403 
130 9698 112 
2 141 
43 870 
132 382 
145 0186 809 : 
2 078 : 
36 216 :  
110 540 :  
156 064 :
:  Total EUR-10 171 561 176 691 183 218 309 256 331 523 311 707 :

-85 -
3. Consumption
In 1983, world consumption of tobacco in the form of cigarettes and other  
manufactured products was more or less the same as in 1982 :
5,51 million t. Cigarette production remained steady, at  
4 563 000 million units; the increase in taxes on cigarettes, the downturn  
in the rate of economic growth and the anti—smoking campaigns doubtless  
helped to curb any increase in production. In the Community, however,  
cigarette production rose by 1,6%, from 550 000 million to 558 600 million  
units. In fact, it fell slightly in Ireland, Belgium, Denmark, France and  
the United Kingdom but increased in everey other Member State, especially  
in the Federal Republic of Germany (+ 5,2%, mainly as a result of a sharp  
rise in the production of cigarettes intended for export) and Italy (where  
production was up by about 4%, especially in the case of domestic brands).
Cigarette production fell in the United States (as a result of higher  
taxation) and in Japan, but increased in China and the Soviet Union. The  
Community's degree of self-sufficiency is about 46%.
4. Trade
World exports in 1983 reached 1,4 million t, i.e. 4% less than in the  
previous year.
Community exports in 1983 were 120 237 t (118 300 t in 1982). This  
tobacco was exported in 1983 but came from several previous harvests.
Imports reached an estimated 435 940 t in 1983 (1982 :  413 926 t), about  
60% of it Virginia flue-cured tobacco. More than a third of all tobacco  
imports enter the Community at a zero or preferential rate of duty under  
the terms of the EEC policy towards the developing countries (Generalized  
Preferences, ACP). Consequently, imports from the ACP countries and those  
which took place under the Generalized Preferences Scheme are estimated to  
have amounted to 86 244 t and 193 257 t respectively in 1983, but with 
preferential tariff arrangements applying to only 62 550 t of the latter  
figure.

Prices
The trend towards higher prices recorded on the American market in 1981  
and 1982 did not continue in 1983, with prices steadying at about the  
level they reached in 1982. The average export price for Virginia  
flue-cured tobacco was USD 6,62, while that for Burley was slightly up on  
1982, at USD 7,26. The average price of leaf tobacco on the American  
domestic market was USD 3,89 per kg in the case of flue-cured tobacco and  
USD 3,96 per kg in the case of Burley. The substantial gap between  
domestic market prices and export prices is accounted for by differences  
in quality. The prices of oriental tobaccos were slightly up in Turkey, a  
country whose production consists almost entirely of oriental varieties.  
The average price of Turkish-grown tobacco exported to the United States  
was USD 3,2 per kg, as against USD 1,5 per kg in the case of tobacco  
intended for the Turkish home market.
Outlook
The world market situation is one of stagnating consumption and the  
prospects for the medium term suggest a fall in demand rather than an  
upturn. This will lead to greater competitiveness not only as regards  
product quality - at both producer and processor level - but also as  
regards prices. The forecasts for 1984 are that production will more or
less meet demand.
As far as the Community is concerned, the structural difficulties  
affecting oriental tobacco and certain dark air-cured tobaccos will  
continue. Conversion programme are currently being implemented in most of  
the countries where these varieties, which are difficult to market, are  
grown. The production of oriental tobaccos was 16% down in 1983, at  
111 190 t, while that of dark air-cured tobaccos was 18% down, at  
62 078 t. The dark air-cured tobacco will most probably be marketed  
without activating the intervention measures. The production of Burley 
(94 533 t) and flue-cured tobacco (39 194 t) increased by 14% and 10%  
respectively; this is a positive development, since it is in line with  
market requirements.

- 87-
7. Economic aspects of the measures taken
Regulation (EEC) No 727/70 on the common organization of the market in raw  
tobacco was amended in 1982, when the ratio between the intervention price  
and the corresponding norm price was reduced from 90% to 85% for all  
varieties.
This measure has had its period of validity extended twice, for the 1983  
and 1984 harvests. The aim is to achieve a better balance between  
production and market requirements by limiting the price guarantee  
applying to unsold tobacco.
Other measures have been taken to discourage sales into intervention.
As in previous years, the "processing costs" component used to calculate  
the premium granted for tobacco sold commercially, but also taken into  
consideration when calculating the derived intervention price, was pegged  
at the 1983 level. The component in question is applied differentially  
according to circumstances and is reduced in relation to the actual cost  
when it is taken into consideration for the purposes of calculating the  
derived intervention price. The percentages and quantities of tobacco  
taken over by the intervention agencies and the percentage of Community 
production which, when exceeded, activates measures consisting of a  
reduction in the buying-in price and restrictions on the quantities taken  
into intervention were revised downwards so that they could be applied  
more rapidly. These measures can be described as a more forceful  
application of the principle of co-responsibility.
In the light of the report drawn up in 1983 on the updating of the list of  
competing varieties, reference was made when fixing the prices and  
premiums for the 1984 harvest, to competing varieties which were as close  
as possible to the reference quality of Community varieties.
In 1983 the tobacco still held by the Italian intervention agency was sold  
- entirely for export outside the Community - via two separate tendering  
procedures. In 1984 a tendering procedure was opened in respect of the  
sale for export of 8 313 406 kilograms of baled tobacco from the 1981  
harvest held by the Greek intervention agency. There is therefore no more  
Italian-grown tobacco in intervention; the only tobacco at present in  
intervention consists of 7 278 t of Greek tobacco from the 1982 harvest  
(5,4% of Greece's production that year) and 3 610 t from the 1983 harvest,  
the marketing of which is not yet completed.

-  8 8 -
The granting of export refunds has consolidated the Community s position  
as an exporter of the world market. Export refunds were granted in  
respect of an estimated 89 079 t of tobacco from the 1981 harvest and  
60 704 t from the 1982 harvest, but tobacco from the latter harvest is  
still being exported.
8. Budgetary expenditure
EAGGF guarantee expenditure in the tobacco sector was 671,3 million ECU in  
1983. The estimate in respect of 1984 is 795 million ECU, taking in o  
account expenditure carried over from previous harvests, including  
82 million ECU carried forward pursuant to the October 1983 decision o  
suspend advance payment of the premiums. Expenditure on tobacco therefore  
accounts for 4,5% of total expenditure.

11. FRUIT AND VEGETABLES
A. FRESH FRUIT AND VEGETABLES 
1. Introduction
Production of fresh fruit and vegetables in 1983, including crops for  
processing was 3,5% down on the figure for 1982.
Within the Community of Ten, Italy is by far the largest producer,  
accounting for 51% of Community fruit production and nearly 41% of  
vegetable production. France comes second with 15% of fruit output and  
17% of vegetable output, while the third most important producers are  
Germany for fruit (13%) and Greece for vegetables (14%), the latter  
followed by the United Kingdom (11%).
2. Production
Fruit production in the Community in 1983 was 20,8 million t (1), a  
decrease of 8,5% over 1982 but still slightly above the average figure  
for previous harvests. The fall in production affected all Member 
States except Ireland and Italy, where production rose by 7,1% and 3,3%  
respectively.
The following observations may be made about the main fruit crops:
- in apple production, which accounted for 29,5% of fruit production,  
the 1983 harvest was 28% lower than in the previous marketing year,  
with a fall in all Member States except Greece and Ireland, where  
there was a rise of about 20% and 11% respectively;
- for pears (12% of fruit production) the harvest was up especially in  
the Netherlands, Italy and the United Kingdom, and to a lesser extent  
in Greece. Production was up on 1981 but down on 1980. Germany saw a  
drop in production in 1983.
The increase for the Community as a whole over 1982 was 0,4%.
- the peach harvest in 1983 fell in Germany (- 18%) but was up in the  
Community as a whole as compared with 1982 (+ 3,8%);
- for table grapes,  which represented 10,5% of fruit production, the  
1983 harvest was up 15% on 1982 and 7,7% on 1981. Italy is by far the  
largest producer, accounting for 67% of Community production.
(1) Harvest figures for the Community of Ten.

-90 -
Commercial vegetable production in the Community reached 29,0 million t,  
much the same as in previous years. Production fell throughout the  
Community except in Italy and Greece, which saw a moderate increase.
3. Consumption
Internal consumption of fruit in the Community of Ten in 1982/83 rose to  
20,8 million t (1), an increase of 23,9% over 1981/82 and 9,3% over 
1980/81. For citrus fruit this consumption was 8,3 million t.
rise oiInternal consumption of vegetables, at 32,9 million t, showed a  
4,9% compared with the previous marketing year.
a) Human consumption
Human consumption was the principal use made of fresh and processed  
fruit, and accounted for 86% of all internal consumption.
Per capita annual consumption in the Community of Ten amounted to 92 kg  
for all fruit (28 kg of citrus fruit and 64 kg of other fruit).
Human consumption of vegetables was 89% of all internal consumption.
Per capita annual consumption was 107 kg for the Community of Ten.
b) Animal consumption and industrial uses
These products are seldom fed to animals systematically and industrial  
uses (for non-food purposes) are often only sporadic, so that the  
quantities of fruit and vegetables involved^are appreciably less  
significant even than wastage during marketing.
c) Degree of self-sufficiency
The self-suf ficience rate of the present Community is particularly high  
for vegetables, reaching 99% in 1982/83; the figure for non-citrus  
fruit is 87% and for citrus fruit 42%. The figures for the 1981/82  
marketing year were 101%, 82% and 46%.
(1) Including preserves, fruit juices and tropical fruits but excluding dry or  
dried fruits and citrus fruit.

Community's trade
In 1983 the Community's total imports of fresh fruit from non—member 
countries amounted to 4,4 million t, a rise of 3,6% compared with 1982.  
Citrus fruits were by far the predominant import at 3,0 million t  
(oranges 1,6; grapefruit 0,38; small citrus fruits 0,77) since apples,  
which occupied second place, accounted for only 0,62 million t.
Fruit exports to non-member countries were just over 0,9 million t,  
including 0,20 million t of apples, 0,11 million t of lemons and  
0,11 million t of stone fruit, in particular peaches.
Imports of fresh vegetables from non-member countries totalled  
1,26 million t and exports 0,38 million t.
Intra-Community trade in fresh fruit and vegetables was also substantial.
Althought the quantity of fruit traded within the Community did not equal  
imports from non-member countries, it nevertheless totalled 3,2 million t.  
Apples (1,1 million t) were the main product, followed by table grapes  
(0,54 million t), pears (0,26 million t) and stone fruit, in particular  
peaches (0,57 million t).
Intra-Community trade in vegetables, on the other hand, totalled  
2,7 million t, approximately twice the quantity imported from non-member  
countries. Tomatoes and onions were the main products, with 0,48 million t  
and 0,52 million t respectively traded within the Community.
Prices
a) Common prices
Basic prices and buying-in prices were increased for the 1983/84  
marketing year in such a way that the resulting average withdrawal  
prices at which producer groups buy back their members'  unsold produce  
were 6,5% higher than in the 1982/83 marketing year for all products  
except dessert apples and pears (+ 3,5%), tomatoes (+ 3,0%) and  
mandarins (+ 5,5%).
In the case of Greece, basic prices and buying-in prices for 1983/84  
were fixed by the Council to continue the gradual adjustment required by 
the Act of Accession. Common prices were introduced in Greece for  
cauliflowers, lemons, pears, table grapes and apples.

-92 -
The average increase for 1984/85 was 0,5% for all products except table  
grapes, aubergines and cauliflowers (+ 2%) while there was a reduction  
of 1% in the basic prices and buying-in prices for tomatoes and apricots
compared with 1983/84.
Reference prices, which determine the minimum level of entry prices for  
a number of products imported from non-member countries, were increased  
on average by 8% between 1982/83 and 1983/84 for cucumbers, tomatoes,  
table grapes, apples, pears, peaches, cherries, plums, aubergines,  
courgettes, lemons and clementines. In the case of oranges and 
mandarins, reference prices remained at the level of the previous  
marketing year because of the link betwen movements in the basic and 
buying-in prices, penetration premiums and reference prices for these
products (see 7(c)).
Between 1983/84 and 1984/85, reference prices were increased by a  
maximum of 6,5% except in the case of oranges and mandarins, where the  
increase in the basic and buying-in prices was reflected entirely in the  
penetration premiums. In the case of lemons the increase in  
agricultural prices adopted by the Council was reflected in their  
reference price, and in line with the reduction in the marketing premium  
the reference price went up by about 20%. The reference price for  
clementines was increased by 19% compared with the preceding marketing
year.
Under the Act of Accession of Greece, the Community fixed Community  
offer prices for 1984/85 to apply to imports into other Member States  
from Greece of all products subject to reference prices except 
aubergines and courgettes.
b) Market prices
Fruit and vegetable prices fluctuate constantly and may vary 
considerably from one time of the year to another, from one market to  
another and even from one consignment to another.
An analysis of the figures collected for the pilot products in  
connection with the management of the system of basic and buying in  
prices leads to the following conclusions.
- Apples (Golden Delicious, quality class I, 70 mm or over).
As the average prices for the 1983/84 harvest were influenced by a 
"normal" crop, they settled throughout the marketing year above the  
average level recorded in 1982/83.

- 93 -
For 1982/83 the average price level was lower everywhere except in  
Greece than in the previous year, but varied from Member State to Member  
State, with - 53% in Germany, - 54% in Belgium, - 42% in France, - 51%  
in Italy and + 33% in Greece. The United Kingdom doesn't have  
meaningful quotations for this product.
The monthly analysis made throughout 1983/84 shows that in all Community  
countries apple prices were constantly above the basic price.
— Pears (various, quality class I, 60 mm or over/70 mm or over according  
to time of year).
The prices in 1983/84 were up in almost all Community countries. This  
marked increase, ranging from 11,9% in Belgium to 34% in Germany, did  
not affect Italy (- 12, %) or Greece (- 13,6%). Ireland and Luxembourg  
do not have meaningful quotations for this product.
The monthly analysis showed that there was a measure of price stability.
Prices on all Community markets remained constantly above the basic  
price and sometimes reached the exceptional levels encountered in  
previous marketing years. At the start of the marketing year in August,  
however, prices for the early varieties Guyot and Williams lay between  
the basic and the buying-in price on some representative markets.
Prices for the Passe-Crassane variety in Bologna and Verone lay between  
these levels in March and April also.
— Peaches (various, quality class I, 51/61 mm or 61/67 mm according to  
time of year).
In 1983, prices were 20% higher than in 1982 in Greece and 3,3% and 0,7% 
lower in France and Italy respectively (prices in 1979 and 1980  
sometimes reached nearly twice the basic price). The seasonal pattern  
was normal, however, and the monthly average was above the basic price  
except for some early varieties, which sometimes reached levels below  
the basic price on some producer markets at the beginning of the season.
— Table grapes (various, quality class I)
Grape prices on producer markets were up on the previous year in Greece  
and France.
French prices moved at a level above the basic price, whereas in Italy  
only the Regina dei Vigneti variety reached prices higher than the basic
price in August.

- 94 -
Prices for the Regina variety, on the other hand, remained between the  
basic price and the buying-in price until early September, reaching the  
level of the buying—in price during that month, particularly on the  
Ascoli Piceno market.
- Oranges (various, quality class I, 67/80 mm).
Prices in Italy in 1983 were 24,1% down on the previous marketing year  
while Greece saw a smaller rise over 1981.
- Mandarins (quality class I, 54/64 mm)
The average annual price for mandarins in Italy was down on 1982/83 by  
20,9%, while in Greece there was a rise of about 1%.
The monthly quotations did not show major fluctuations, normally being  
more than 4-5 ECU below the basic price in Italy, while in Greece prices  
were around the basic price.
- Lemons (quality class I, 53/62 mm)
The average annual price for lemons in 1983/84 was slightly higher in  
Italy than in the previous year, when prices had already been high as a  
result of stationary production levels.
Prices are still high and throughout the first part of the marketing  
year the monthly averages were above the basic price, especially in  
Greece; quotations in March, April and May in Catania, Messina and  
Xilokastro were sometimes below the basic price.
- Cauliflowers (with leaves or trimmed according to time of year,  
quality class I)
Average annual prices increased throughout most of the Community  
compared with 1982/83, the rise ranging from 9,9% in the Netherlands to  
48,6% in Belgium. Only in Greece were quotatios down on the previous  
marketing year.
- Tomatoes (round type, quality class I, 57/67 mm)
In 1983 prices rose in all the Community countries except Greece  
(- 7,1%).
The monthly analysis shows that daily prices were generally above the  
basic price in France, Italy and Greece, particularly during the high  
season in August and September.

-95 -
The changes — often rapid — in daily prices and the various coefficients  
applied to products other than the pilot products explain why some fruit  
and vegetables fell short of the withdrawal price and were withdrawn  
from the market by producer groups even when the average prices of the  
pilot product were higher than the basic price.
c) World Prices
The prices of fruit and vegetables - highly perishable products - are  
established more or less independently on the main markets. There are  
no real world markets for such products and consequently no world prices.
d) Consumer prices
In view of the large number of varieties, quality classes and sizes of  
fruit and vegetables, and in view of the wide differences in prices for  
an apparently identical product from one retailer to another, it is not  
possible to determine consumer prices for the various products.
6. Outlook
In the case of vegetables - most of which are annuals - the rapid  
succession of crops and the use of fixed or movable means of weather  
protection make for flexibility and enable growers to adapt production  
promptly to demand.
In view of the trends in vegetable production over the last few years and  
the stability observed in this sector, no major changes are to be expected  
for some time to come.
In the case of fruit, too, analysis of production trends over a relatively 
long period shows a certain stability, albeit with considerable  
fluctuations from one season to another, as was observed for example with  
the 1977/78, 1981/82 and 1982/83 harvests. The Community apple crop, for  
example, went from 5 million t in 1981 (deficit) to 8,6 million t in 1982  
(surplus) and 6,1 million t in 1983 (normal).

- 9 6  -
7. Economic aspects of the measures taken
a) Import and export measures
(i) Countervailing charges on imports
During the 1983/84 marketing year, charges were imposed on imports  
of the following products:
- cucumbers from Spain, Romania, Poland and Bulgaria
- tomatoes from Romania, Spain, Poland, Morocco and Bulgaria
- apples from Spain and Turkey
- pears from Spain and Poland
- peaches from Spain
- some varieties of plums from Yugoslavia, Bulgaria, Romania,
Poland and Spain
- clementines from Cyprus and Morocco.
These measures, some of which were applied for only a short time,  
resulted in higher prices for imported products following a drop or  
even a complete halt in shipments to the Community (see also (iv)  
below).
Corrective amounts were applied in 1983/84 to apples and peaches  
exported by Greece to the other nine Member States.
(ii) Export refunds
Export refunds were fixed during the 1983/84 marketing year for  
fresh sweet oranges, fresh mandarins, fresh lemons, table grapes,  
walnuts in shell, shelled almonds, shelled and unshelled hazelnuts,  
peaches, dessert apples, tomatoes and apricots.
These refunds, which varied according to product and were generally  
low, were fixed only for destinations which afforded real export  
outlets and only if there were export difficulties to be overcome.  
Greece was eligible for the same level of refunds as the Community  
of Nine except on peaches; here the refund was corrected by the  
price difference recorded when Greece joined.

(iii) Protective measures
No measues to restrict imports into the Community were taken  
during the 1983/84 marketing year.
(iv) Apples from the southern hemisphere
Estimated exports from southern hemisphere countries and the price  
trend for Community apples were such that it was not necessary to  
ask suppliers in the southern hemisphere to adjust their planned  
exports to the Community between March and August 1984.
b) Withdrawals from the market
Intervention during 1983/84 was on a smaller scale then in 1982/83 in  
the case of apples, cauliflowers and tomatoes; there was increased  
intervention in all other products except for table grapes, where there  
have been no withdrawals in the last three marketing years.
The quantity of apples withdrawn was 119.240 t, equivalent to 1,94% of  
Community production. The largest withdrawals were in Italy (90.000 t),  
but as a proportion of the harvest Greece had a higher percentage (7,11  
or 22.692 t).
Provisional figures indicate that withdrawals of citrus fruit in Italy  
accounted for 252.000 t of oranges, 168.800 t of mandarins and 229.900 t  
of lemons, representing 11,58%, 68,1% and 29,4% respectively of Italian  
output. In Greece 204.195 t of oranges, 15.593 t of mandarins and  
39.892 t of lemons, representing 37%, 27% and 24% respectively of Greek  
output, were withdrawn in the 1983/84 marketing year.
Withdrawals of peaches amounted to 330.893 t (120.000 t in Greece) but  
this represented only 14,3% of Community production. Withdrawals in  
Greece accounted for 24,8% of the harvest. Withdrawals of other  
products in relation to Community output were not as high: 1,65% in the
case of cauliflowers,  0,32% in the case of tomatoes,  12,5% in the case  
of apricots and 6,22% in the case of pears. Aubergine withdrawals in  
1983/84 were marginal.
c) Measures to promote the marketing of Community citrus fruit  
Measures to promote the processing of oranges
Measures to assist the marketing of products processed from lemons
The "penetration premiums" (financial compensation to promote the  
marketing of Community citrus fruits) were fixed at the levels below for  
1983/84.

Greece Other Member States
8,78 15,30 ECU per 100 kg net for oranges of the Moro, Ovale
calabrese, Belladonna, Navel, and Valencia late varieties;
7,53 13,13 ECU per 100 kg net for oranges of the Sanguinello variety;
4,96 8,65 ECU per 100 kg net for oranges of the Sanguigno and Biondo
comune varieties;
7,44 12,89 ECU per 100 kg net for mandarins;
3,33 4,82 ECU per 100 kg net for clementines;
4,71 7,86 ECU per 100 kg net for lemons.
Compared with 1982/83, the financial compensation was increased by the  
total percentage fixed for the increase in the basic and buying-in  
prices of oranges and mandarins; i.e. 6,5%. In accordance with the Act  
of Accession, Greece received only about 57% of the premium granted in  
other Member States.
Pursuant to Council Regulation (EEC) No 2601/69 of 18 December 1969  
laying down special measures to encourage the processing of certain  
varieties of oranges, the minimum price to be paid by processors to  
producers of oranges and the financial compensation payable to  
processors were fixed for 1983/84 at the levels shown in the table below.
:  Type of product Minimum price Financial compensation :
(ECU per 100 kg net) (ECU per 100 kg net) :
Greece Other Greece Other :
Member States Member States :
:  Oranges of the following
:  variety:
:  Biondo comune
:  Class I 13,41 14,44 8,08 9,70 :
:  Class II 11,01 11,85 6,27 7,11 :
:  Class III or mixed 8,68 9,35 3,94 4,61 :
:  Class III of mixed oranges
:  of the following varieties:
:  Moro and Tarocco 17,10 18,42 12,36 13,68 :
:  Sanguinello 15,87 17,10 11,13 12,36 :
:  Sanguigno 13,42 14,45 8,68 9,71 :
Finally, under the measures adopted to assist the marketing of products  
processed from lemons which were applied for the first time in 1977/78,  
the minimum price to be paid to growers by processors in 1983/84 in both  
the Community of Nine and in Greece was fixed at 17,65 ECU per 100 kg  
net and the financal compensation payable to processors at 10,82 ECU per  
100 kg net.

d) Price unity
No monetary compensatory amounts were fixed for fresh fruit and  
vegetables.
e) Budgetary expenditure
EAGGF Guarantee Section expenditure on fresh fruit and vegetables, which  
amounted to 449,8 million ECU in 1983, is provisionally put at  
537 million ECU in 1984 and is estimated at 431 million ECU for 1985,
i.e. 2,8%, 2,9% and 2,2% respectively of total EAGGF Guarantee Section  
expenditure. The figure of 449,8 million ECU can be broken down into  
51,9 million ECU for refunds, 303,4 million ECU for intervention,
15.2 million ECU for penetration premiums in the citrus fruit sector and
79.3 million ECU for financial compensation to assist the processing of  
citrus fruit.

-100  -
B. PROCESSED FRUIT AND VEGETABLES  
1. Introduction
Production of processed fruit and vegetables in the Community of Ten is  
shown for 1982 and 1983 in the table below.
in '000 t
:  Processed products  
:  (Community of Ten)1982 1983 :
•
•
:  Vegetables 
:  Fruit5.185 (*)  
3.0275.795 (*) :
•
•
3.193 :
•
•
(*) Including preserved tomatoes
Production of processed fruit and vegetables rose slightly in 1983  
compared with 1982. This was mainly due to an increase in output of  
preserved tomato—based products, deep-frozen products and preserved  
fruit.
Production of certain sensitive products in the Community of Ten was as  
follows :
a) Tomato concentrates: production rose from 589.800 t (1) in 1982 to
689.300 t in 1983, an increase of 17%;
b) Whole peeled tomatoes: production showed a clear rise also from
1.099.000 t (1) to 1.431.000 t, an increase of 39%;
c) Tomato juice (CCT heading No 20.07): production rose from
53.300 t (1) in 1982 to 58.800 t in 1983, an increase of 10%;
d) Preserved mushrooms: production rose slightly between 1982 and 1983
from 237.300 t (1) to 243.000 t;
(1) Updated from previous report

-  101  -
e) Preserved peaches: production also rose from 371.000 t (1) in 1982
to 426.800 t in 1983, an increase of 37%;
f) Production of orange juice in Italy was 125.000 t (1) in 1982 and
170.000 t in 1983, corresponding to + 36%; the production of lemon  
juice also on the contrary went down from 86.000 t (1) in 1982 to
80.000 t in 1983, that means a decrease of - 7%.
2. Consumption and trade
The trade of the Community of Ten in processed fruit and vegetables is  
summarized in the aggregate figures in the table below (excluding dried  
grapes and dried figs).
1982
IMPORTS EXPORTS :
tonnes MECU tonnes : MECU :
:  TOTAL
:  Intra-Community 
:  Non-member countries3.907.000 (1)
2.474.000 (1)
1.433.000 (1)3.103.000
1.803.000
1.300.0003.157.000
2.523.000  
634.0002.269.000 :
1.751.000 :  
518.000 :
.  1983
•
• IMPORTS EXPORTS :
• tonnes MECU tonnes : MECU :
•
•
•
:  TOTAL
:  Intra-Com. (EUR 10)
:  Non-member countries
•
•4.092.000
2.620.000  
1.472.0003.446.000
2.020.000  
1.426.0003.262.000
2.589.000  
673.0002.509.000 :
1.922.000 :  
587.000 :
The available quantities of tomato concentrates and peeled tomatoes in  
the Community of Ten have seen a turnround in trend, with a pronounced  
rise between 1982 and 1983.
The quantity of tomato concentrates available for consumption was
379.000 t (1) in 1982 and 470.000 t in 1983.
(1) Changed from last year's figure (source: SIENA)

-  102  -
Intra—Community trade in concentrates rose from 170.000 t in 1982 to
180.000 t in 1983.
In spite of a marked upturn, imports of peeled tomatoes in 1983 were  
still rather low, at around 38.000 t. Exports fell from 103.000 t in  
1982 to 92.000 t in 1983. The quantity available for consumption  
increased from 945.000 t in 1982 to 1.377.000 t in 1983.
Intra—Community trade also rose from 301.000 t in 1982 to 320.000 t in  
1983.
In the case of tomato juice, imports went down from 7.400 t in 1982 to  
6.500 t in 1983 while exports remained fairly low at around 3.000 t.
Imports of preserved peaches, which were 62.000 t in 1982, were only
46.000 t in 1983. Exports remain very low, at the same level (9.900 t)  
in 1983 as in 1982.
The quantity of preserved mushrooms available for consumption remained  
stationary at about 260.000 t (1) in 1982 and 1983. Exports went down  
slightly from 7.000 t to 6.700 t.
It should be noted that for two products, Williams pears in syrup and 
cherries in syrup, the Council has put ceilings on the quantities  
eligible for aid.
Production of dried grapes in 1982 was 141.000 t and 167.000 t in 1983}  
production of dired figs was 30.000 t in 1982 and 25.000 t in 1983.
3. Prices
World prices for peeled tomatoes and concentrate increased slightly this  
year too, but less than the average rate of inflation in the Community. 
This brought about a relative increase in imports from non-member  
countries.
In the case of preserved mushrooms, a measure of balance was maintained  
on the market.
(1) Updated from the previous year

-103 -
Generally speaking, price levels in the Community for other products did  
not give rise to any difficulties, except in the case of dried grapes.  
Here it was necessary to maintain a minimum price at the frontier as a  
protective measure.
4. Outlook
Production of tomato-based products in 1984 should stabilize around the  
production thresholds laid down by the Council.
5. Budgetary expenditure
EAGGF Guarantee Section expenditure on processed fruit and vegetables  
amounted to 555,9 million ECU in 1982 and 746,3 million ECU in 1983 and  
is estimated at 820 million ECU in 1984, or 4,48%, 4,72% and 4,42%  
respectively of total expenditure by the Guarantee Section.

-  104  -
11c. LIVE PLANTS
One of the features of this sector is the great variety of products :  cut  
flowers and greenery, bulbs and live plants including nursery products and pot  
plants. Each of these branches has its own characteristics with regard to  
both production and marketing.
jn view of this diversity, the production statistics are too complicated for  
carrying out the necessary analysis every year. However, production of roses  
and carnations in the Community is as follows :
in million units
1980 1981 1982 1983
Roses 2,322 2,373 2,495 2,333
Carnations 4,082 4,069 4,178 n.a.
An idea of the statistical difficulties can be gained by considering, for  
example, that one hectare used to grow flowers and plants may produce either  
■just one or several crops during a year and that the production system (under  
cover, either heated or not, or open-air) has a decisive influence on  
production itself.
As regards the value of production, the Commission's staff does not yet have^  
sufficiently detailed figures to allow an analysis of the past year, except in  
the case of roses; production of roses in terms of value is estimated to have  
been 373 million ECU in 1981 and 407 million ECU in 1982 (most up-to-date  
figures available). Nevertheless an estimate can be made based on the fact  
that the overall production of this sector represents 3-4% of the value of  
final production in agriculture in the Community
Prices
It should be noted that the prices recorded on the main Community markets show  
major fluctuations during the season and may also vary considerably from one  
market to another at any given period.

-105-
Trade
Intra-Community trade in 1983 rose by 10,9% (1982: 17,6%); imports from  
non-member countries over the same period increased by 11,5% (1982: 4,6%) and  
exports to non-member countries by 15,1% (1982: 18,1%).
Exports, at 510 million ECU, exceeded imports at 290 million ECU.
Thus exports exceeded imports by 220 million ECU, as against 182 million ECU  
in 1982.
Consumption
The level of consumption varies considerably from one Member State to another,  
depending on the living standards and habits of consumers.Trade by value (EUR 10)
Intra-Community trade
Imports from non-member countries
Exports to non-member countries1.610 million ECU (+10,9% over  
290 million ECU (+11,5% over  
510 million ECU (+15,1% over1982)
1982)
1982)

- 106 -
12. HOPS
Community production in 1983 was 48.411 t or 37% of world production, from an  
area of 27.037 hectares or 28% of the total estimated world area of some
95.000 hectares. Yields returned to normal levels after the extremely heavy  
crop of 1982. The average yield in the Community was 1,79 t/ha compared with
2,05 t/ha in 1982 and a ten year average of 1,65 t/ha. Following the rapid  
decline in world markets from the peaks of 1980 to the throughs of 1982, the  
area under production in most major producing countries was cut back in 1983.  
The area in the Community was reduced by 528 hectares in 1983. World area was 
reduced by 1.254 hectares. During the campaign September '82 to August '83  
Community net exports of hops amounted to some 11.900 t, compared with  
13.200 t and 10.600 t respectively for the two previous campaigns. Export 
markets remain of primary importance to Community producers.
Having grown by just under 2% in 1982 and having grown consistently over the  
previous decade at annual rates of 2% to 4%, world beer production declined  
slightly in 1983. Cut-backs were particularly marked in those developing  
countries experiencing balance of payments difficulties, especially in Central 
and South America. There was some modest expansion in many developed countries  
as well as more rapid growth in the Far East. The low alpha acid content of  
much of the 1982 crop in Europe may have served to provide a stimulus to  
demand for hops for beer production in 1983. The same may prove to be true of  
the 1983 crop. Such impetus to demand can only be viewed as temporary. In the  
face of stable beer production and of technological improvements in hop 
utilization little growth in demand for hops can be foreseen.
Although estimated total world hop production in 1983 was substantially below  
the exceptional harvest of 1982, it still exceeded annual brewing requirements  
in terms both of total weight and of bittering value. The latter proved to be  
the case despite the low alpha acid contents observed throughout most of the  
1983 European crop. Thus it is estimated that stock levels will have risen yet  
further - amounting to some 11 months supply for breweries (both within the  
Community and for the world). Approximately three quarters of the 1983  
Community crop was covered by forward contracts. These provided a considerable  
degree of protection for growers from the continuing depression of spot  
markets.
Prices on the latter recoverd slightly as a result of the smaller harvest, but  
remained generally at very low levels - an average of 92 ECU/50 kg compared  
with 65 ECU/50 kg and 225 ECU/50 kg for the 1982 and 1981 harvests  
respectively.
The level of producer income aid for the 1983 harvest was fixed at
300 ECU/50 kg for aromatic varieties, 250 ECU/50 kg for bitter varieties and
300 ECU/50 kg for other varieties.

-  107 -
13. MILK AND MILK PRODUCTS
1. Production and utilization of milk
a) At the end of 1983, the Community dairy cow number was 25,8 mio, which is  
un increase of 1,6% or more than 400.000 head over the level at end 1982,  
which again showed an increase of 1,6% or 400.000 head over the 1981  
level. Increases in 1983 were mainly noticed in Germany, Belgium,  
Netherlands and the United Kingdom (by 3,7%, 2,7%, 1,6% and 2,8%  
respectively), representing almost 50% of the total dairy cow number. The  
remaining Member States, except for Denmark and Luxembourg, showed a  
smaller increase.
The overall development during 1982 and 1983 replaces the decrease and  
stagnation tendencies experienced between end 1978 and 1981. These  
tendencies partly reflected the impact of the non—marketing and conversion  
schemes and partly the impact of several general economic elements, of  
which cautious price policy and costs development (particularly interest  
rates) have been most important.
The increased price/cost ratio experienced in 1982, was replaced in 1983 by  
a reduction but against economic arguments (limited price increases, higher  
feed prices, climatic conditions in spring and harvest results) the milk  
production increase continued at a higher speed than in 1982. One  
contributory factor was that the producers expected severe Community  
actions attempting to reduce the deliveries from the new marketing year and  
onwards and consequently they continued to increase production despite  
decreased profitability.
In 1983, the average yield per dairy cow in the Community increased to  
4.416 kg or by 2,4%, which was at the same level as the longterm trend.
The structural development continued involving a reduction of smaller dairy 
herds and an increase in the number of bigger and more efficient ones.
The increased cow numbers and the abovementioned factors resulted in an 
increase in dairy cow milk production of 4% in 1983 over the 1982 level  
(which again was 3,1% over 1981) and the proportion of this production  
delivered to dairies has increased to 92,6% compared with 92,5% in 1982.
The total cow milk deliveries, including cream, in milk equivalent, —  
increased by 4,1% or 4,1 mio tonnes in 1983 compared with 3,5% or 3,4 mio  
tonnes in 1982. The total additional deliveries of 7,5 mio tonnes for both  
years were mainly used for the production of the two intervention products,  
butter and skimmed milk powder.

- 108 -
The quota system introduced in the milk marketing year 1984/85 and  
additional four periods of 12 months allows for the following quotas per  
Member State:
Guaranteed total quantities for deliveries to purchasers  
and quotas for direct sales 1984/85 - 198 Q /Q 9
(thousand tonnes of dairy cow milk and cream in milk equivalent)
S S S S S — —  —  —  — — _ s
Guaranteed Community Total Guaranteed Direct
total reserve quantity total sales quota
quantity quantity
(excluding
reserve)
1984/85 1984/85 1984/85 1985/86 - 1984/85 -
1989/99 1989/99
:  Belgium 3.138— 3.138 3.106 505
:  Denmark 4.932- 4.932 4.882 1
:  Germany 23.487 - 23.487 23.248 305
:  France 25.585 - 25.585 25.325 1.183
: Greece 472 - 472 467 116
:  Ireland 5.280 245 5.525 5.280 16
:  Italy 8.323 - 8.323 8.323 1.591
:  Luxembourg 268 25 293 265 1
:  Netherlands 12.052 - 12.052 11.929 145
:  U.K. 15.487 65 15.552 15.327 398
:  EUR 10 99.024 335 99.359 98.152 4.261
In order to reach the quota level for 1984/85, the 1983 deliveries would  
have to be reduced by a minimum of 4,3 mio tonnes or 4,1%. Actually, the  
first two quarters of the marketing year 1984/85 showed a clear reaction on  
the start of the quota system and although the decline has not yet reached  
the required level, there is a tendency for the rate of decrease to become  
more important over time. In addition, the production of butter and SMP is  
reduced while the production especially of cheese, whole milk powder and -  
to a lesser extent - casein, continues to increase.

_ 109 _
2. Production and consumption of milk products
(a) Drinkingmilk
The overall use of milk in the Community for liquid milk and fresh milk  
products increased only marginally in 1983. The stagnation in  
consumption of drinking milk experienced in 1982 was replaced by an  
increase of approximately 1,5% in 1983 and the general tendency of the  
last nine years to consume more semi-skimmed milk and less whole milk 
continued in 1983.
The total share of UHT milk (ultra heat treated) continued to  
increase. In the United Kingdom, the decreasing trend in the  
consumption of whole milk continued in 1983. In the Netherlands,  
consumption of semi-skimmed milk increased but that of whole milk  
decreased. In Germany and France, total consumption of these two  
products continued to increase in 1983. In Germany, the consumption of  
both products has been increasing continuously over the last six years  
(except for a smaller decline of semi-skimmed milk in 1983), while the  
previous years' development in France showed rapid increase in the  
consumption of semi-skimmed milk and decline in whole milk  
consumption. The total share of UHT milk of the Community consumption  
of whole and semi-skimmed milk stood at 25% in 1983 compared with 23,5%  
in 1982, with the highest levels found in France (62%) and Germany  
(45%).
Consumption of cream and other fresh milk products continued to  
increase in 1983, but - as in 1982 - at a rather low rate.
(b) Butter_
Total butter production in the Community increased by 10% or 200.000  
tonnes in 1983, compared with 1982. This development is mainly due to  
the high increase in milk deliveries and the relatively low increase of  
milk utilization for other dairy products, reflecting less favourable  
commercial sales possibilities on both the internal and external  
markets. The internal consumption of butter at market price continued  
to decrease in 1983; however, the heavy decrease of 8% emerging from  
the global butter balance relates mainly to substitution effect from  
Christmas butter destocked at the end of 1982 but actually sold at the  
beginning of 1983. The extra net sales relating to the Christmas  
butter scheme have more or less counterbalanced the general tendency of  
decline in consumption at market price, reflecting the impact of  
unemployment and other economic/social difficulties.

-  110  -
Sales of butter at reduced prices to food industries (bakeries, ice  
cream, non-profit-making institutions, etc.) have increased by 45.000 
tonnes or 24% compared to 1982 and it is expected that this positive  
development will continue in 1984.
Commercial exports continued to decline and were, in 1983, 3,5% lower  
than in 1982, which again was 26% lower than in 1981. Total EEC butter  
exports (including butteroil) dropped by 11% to 355.000 tonnes, mainly  
due to heavy decrease in exports of butteroil relating to the food aid  
programme. However, the decrease in the latter has been more than  
counterbalanced through food aid exports during the first months of  
1984.
Because of the high increase in production, the relatively low  
consumption and the decrease in total butter exports, the end stocks  
for 1983 increased by 547.000 tonnes or by 180% in comparison with  
1982, which again was more than double the stocks at end 1981. Thus,  
the stock increase in 1983 absorbed the totality of increased 
production and decreased consumption and exports. Public stocks  
increased from 10.000 tonnes in 1981 to over 112.000 tonnes in 1982 and  
to 692.000 tonnes at the end of 1983. End 1984 public stock levels  
will largely depend on the use of current possibilities to sell butter  
from public stocks to the internal market and for exports.
(c) Skimmed milk_powder
Community skimmed milk powder production increased by 11,1%, or 244.000  
tonnes, in 1983 compared with 1982, which showed an increase of 7,2% or
148.000 tonnes to 1981. This increase is partly due to the high  
increase in milk deliveries and butter production and the comparable 
relatively smaller use of skimmed milk in the production of cheese and  
liquid milk products and/or fresh milk products with a relatively low  
fat content. The other main uses of liquid skimmed milk for animal  
feed increased by 40.000 tonnes and the introduction of special aid for  
powder to feed for pigs and poultry in July 1982 resulted in additional  
sales of 479.000 tonnes in 1983. This latter scheme is expected to  
result in sales of approximately 500.000 tonnes in 1984. Also, the  
skimmed milk used for casein production increased (by 14%) and this  
increase is slowing down during the second half of 1984.
The manufacture of skimmed milk powder in the Community far exceeds  
demand at market prices, which amounts to less than 11% of total  
production. This is the background for the aid given to skimmed mi  
powder incorporated in animal feed compounds.

-  111  -
Both the commercial and food aid exports continued to decline in 1983,  
when 192.000 tonnes were exported against 351.000 tonnes in 1982 and
501.000 tonnes in 1981. The exports in 1983 were the lowest since  
1976. A slight improvement is expected in 1984 due especially to more  
regular food aid shipments.
The high increase in production and decline in exports has resulted i  
increased public stocks, despite an increase of 27% or 425.000 tonnes  
in internal disappearance. The stocks of 576.000 tonnes increased to
983.000 tonnes in 1983 and the end stock for 1984 is expected to  
decline, reflecting the falling production and the continuation of  
additional sales under the pigs and poultry scheme.
(d) Cheese_
Community (EUR 9) cheese production increased in 1983 by 1,5% against  
3,2% in 1982 and internal cheese consumption increased by 2% against 3%  
in 1982. Thus, the upward trend in consumption continued, but at a  
slower rate. No doubt, one of the main reasons for this continued  
increase is the availability to the Community consumers of a wide range  
of cheese types and qualities, including imports of about 100.000  
tonnes of cheese from third countries. On the other hand, the  
Community is the world's biggest cheese exporter, exporting 405.000  
tonnes in 1982. The increase of these exports in recent years - in  
1982 exports increased by 38.000 tonnes and in 1983 by 25.000 tonnes -  
has decisively influenced the total level of Community production.  
Production, consumption and exports are expected to increase in 1984 at  
a slightly higher rate than in 1983.
(e) Whole milk_powder
Traditionally, the production of whole milk powder in the Community is  
linked to the development on the international market. Having  
increased by more than 60% from 1978 to 1980, the international market  
came to stagnation in 1981 and exports decreased by 15% both in 1982  
and 1983. Community production decreased in 1982 and 1983 by 11% and  
8% respectively but production in 1984 is expected to exceed the level  
of 1982.
(f) Condensed milk_
EEC production decreased by 8% or 130.000 tonnes in 1983 compared with  
1982, mainly in response to international demand for EEC products which  
declined by 79.000 tonnes or 13% after for the first time having  
reached 600.000 tonnes in 1982. Although the EEC share of the  
international market has been falling from 1977 to 1980, a recovery,  
both in quantities exported and market share, was recorded in 1981 and  
1982. However, due to increased international competition and  
relatively few important importing countries, the 1984 EEC exports tend  
to stabilize at 1983 levels.

-  112  -
(g) Çasein_
EEC production of casein is based on a system of aids paid for skimmed  
milk used in the production of casein and caseinates. This is to  
compensate for the very low import duties bound under GATT. Reflecting  
a decrease in the level of aids in 1980, the EEC production fell in  
1981, but, due to higher aid levels, the production increased again in  
1982 by 24.000 tonnes and further by 13.000 tonnes in 1983. However,  
in 1984 the production could stabilize, due to lower production levels  
during the second half of the year.
3. World Market Situation
International Developmentsin Production_and_Trade_
(a) Milk production and policies
In 1982 international milk supplies started to increase faster than the  
general rate of increase, through the preceding four years. In fact,  
world milk production in 1982 increased by 2,3% or 11 mio tonnes, and  
continued its increase in 1983 by almost 4% or an additional 18 mio  
tonnes of milk. However, within the group of OECD countries accounting  
for 50% of world milk production but more than 90% of world trade in  
milk and dairy products, milk supplies increased in 1983 by 3,1% or 6,4  
mio tonnes. In these latter countries stocks of butter and skimmed  
milk powder, the most representative surplus products in the milk  
sector, increased through 1983 by more than double the milk-equivalent  
quantity compared with the abovementioned increase of production.
Thus, 1983 was not only a year of over-production; stock increases also  
reflect a very difficult situation as to consumption and international  
trade. International milk supplies have declined slightly in 1984 in  
comparison with 1983 due to important policy changes in certain  
countries, in particular in the EEC, USA and Finland, whereas milk 
production increased substantially in New Zealand and Australia.

- 113-
Dairy cow numbers started to decline in 1983 in several countries;  
however, they increased in others, including New Zealand, the United  
States, Japan, Austria and the EEC (+ 1,6%). Hence, the policy  
adaptations in 1983 did not produce impressive results. Canada should  
be mentioned as an exception, with a decrease in milk deliveries of  
4,6% compared with 1982. In most other cases, the milk production  
remained predominantly influenced by climatic conditions and high  
support price levels relative to different cost factors.
USSR ranks second - next to the EEC - on the world list of milk  
producing countries. In spite of slowly growing cow numbers, the  
average yield and consequently, total production, has been declining  
over a number of years. However, in 1982 this trend was reversed,  
resulting in annual increases of milk production over the previous year  
of 2,4% in 1982 and 5,9% in 1983. But since June 1984 USSR milk  
production has again been declining in comparison with the previous  
year and again the main responsible element has been bad climatic  
conditions and lack of sufficient quantities of animal feed. Thus, it  
is probable that 1984 production did not surpass 1983 production by  
more than 1-2 per cent, and the prospects for 1985 will probably not  
include more than stabilization or slightly improved levels.
In the USA the support price for milk was lowered on 1 December 1983  
from $288,81/tonne to $277,78/tonne.  This level is foreseen to remain  
in force until 31 March 1985. The reduction was reflected in the  
intervention buying-in prices for butter, cheese and skimmed milk  
powder. However, the reduction corresponded in principle to the amount  
of assessments (coresponsibility levies) imposed under previous  
legislation and which milk producers should pay less under the new law  
as from December 1983. Further reduction of the support price is  
possible on 1 April 1985 (by $ll,02/tonne) if intervention purchases  
exceed 2,7 mio tonnes milk equivalent. An additional $ll,02/tonne  
reduction could be made on 1 July 1985 if annual intervention purchases  
were projected to exceed 2,3 mio tonnes milk equivalent. A mandatory  
deduction of $3,31/tonne is also included in the law. The deductions  
started on 1 May 1984 and are earmarked for dairy product promotion,  
research and nutrition education. However, the general mandatory levy  
of $ll,02/tonne on all milk deliveries included under the present law  
will expire on 1 April 1985 unless replaced by one of the  
abovementioned further reductions. The funds collected by this levy  
are helping to fund the "paid diversion programme" paying the producers  
$220,46/tonne for their reduced milk deliveries through 15 months  
including March 1985. 38.000 producers signed contracts corresponding
to a 4% reduction in 1984. However, 80% of US milk producers are  
non-participants in this scheme and the projection for 1984 US milk  
production is a decrease of about 3%.

- 114 -
At the beginning of September 1984 US uncommitted support stocks of  
butter, skimmed milk powder and cheese amounted to 113.000 tonnes,
563.000 tonnes and 365.000 tonnes respectively, i.e. slightly lower  
levels than at the beginning of the year.
In Canada the Market Share Quota for industrial milk continued in  
operation in 1983 and 1984. In fact, in 1983 the sum of over-quota and  
in-quota levies was increased to about 84% of the fixed 'target  
return". The year before, this percentage amounted to 59% only.  
Consequently, milk deliveries in 1983 fell by 4,6% compared with  
deliveries in 1982. However, in April 1984 the target price was fixed  
5,2% higher than the comparable price in April 1983. The sum of quota  
levies continued at about 84% of the new target price but milk  
deliveries started to increase. The price fixation effective 1 August  
1984 increased the target price by further 1,9% but settled the sum of  
quota levies at about 90% of the target price. Nevertheless, the  
likely result in 1984 is an increase of deliveries of about 3% in  
comparison with 1983. Also, once again production levels of butter and 
skimmed milk powder have increased after some reductions in 1983.
In New Zealand milk producer prices have been increasing over recent  
years. However, the declared average payout to dairy farmers for the  
1983/84 milk year decreased by 3%. For the 1984/85 milk year the  
preliminary basic payment price has been fixed 4,4% higher than the  
comparable price in 1983/84 and 1,4% higher than the average payout in  
1983/84. With an eventual "end of season payment" there could be even  
higher increases to NZ dairy farmers. Up to 1983/84 the New Zealand  
Dairy Board, responsible for the international marketing operations,  
managed to present a positive financial account, partly due to the fal  
in inflation but particularly to increased production volume, which  
reduced unit costs.

- 115 -
This positive account is likely to disappear for the coining one or two  
milk years. In parallel with this development, a rearrangement of the  
Board's Reserve Bank credit facility has taken place. Thus, the  
maximum available credit of NZ$750 mio was made available to the Board  
as a subordinated loan, repayable from May 1986 over 40 years at an  
interest of 1%. Against the background of falling producer price, the  
increased production levels have practically brought net farm incomes  
back into line with the recent five years' trend. For 1984 calendar  
year the New Zealand milk deliveries will probably increase by 12%  
compared with 1983, hence increasing production levels and export  
availabilities of butter, skimmed milk powder, cheese and in particular 
whole milk powder. Domestic consumption in New Zealand is stagnant,  
amounting to some 490.000 tonnes of milk and cream, 40.000 tonnes of  
butter and 27.000 tonnes of cheese.
In Australia producer prices are guaranteed for five groups of dairy  
products (butter, certain cheeses, skimmed milk powder, whole milk 
powder, casein). For these products the guarantee prices (weighted  
prices for 3 years) are implemented through the application of levies  
on production, representing the difference between average national  
prices and estimated export returns. For the 1983/84 milk year, the  
guaranteed prices increased but remained significantly below national  
prices. In fact, the average milk price paid to dairy farmers for all  
milk, industrial as well as for direct consumption and for exports as  
well as for domestic utilization, decreased for the first time in many  
years, by more than 5%. For 1984/85 a decrease in the guaranteed  
(underwritten) product prices has been announced for all products with  
the exception of cheese. In addition, export prices have been  
falling. However, due to increased national prices for dairy products  
it is estimated that the average price paid to Australian farmers in  
the 1984/85 milk year could amount to 19,4 Australian cents per litre,  
which is 2,1% higher than the price paid in 1983/84. Australian milk  
deliveries are still increasing and could reach 3-4% more in the 1984  
calendar year than in 1983. Consequently, Australia will continue to  
increase the production levels of almost all dairy products and will  
inevitably seek further expansion of its export quantities. On the  
domestic market cheese consumption continues to increase, partly due to  
a number of imported varieties. Butter consumption has been falling;  
however, the rate of decrease has diminished considerably through the  
1983/84 milk year.

- 116 -
In Japan,  milk for liquid consumption represents about 61-63% of milk 
production. No support prices are established for the drinking milk 
sector, whereas guaranteed prices are in operation for milk contracted  
by the industry for predetermined processing and, at a lower level, for  
further quantities of milk sold by producers to the industry. These  
prices were stable through the period 1977-1981 and increased in 1982  
and in 1983 by less than one per cent compared with the previous year.  
The exception was the non-predetermined sales from producers to  
industry, where the price in 1983 increased by 5,5% compared with  
1982. However, the implementation of these guarantees has been limited  
to fixed quantities, which in 1982 and 1983, amounted to 81% of the  
milk used for processing, i.e. 1.930.000 tonnes and 2.150.000 tonnes  
respectively. Japanese milk production has increased by 3-4% annually  
over the most recent years, and the accumulation of surpluses will  
mainly depend on the continuation of increased utilization for liquid  
milk surpluses. In 1983, this consumption increased very slightly by  
1,3%, in comparison with 1982. Japanese consumption of cheese remained  
unchanged in 1983 at 87.000 tonnes (natural cheese equivalent).
However, imports dropped from 74.000 tonnes in 1982 to 71.000 tonnes in  
1983 due to increased cheese production in Japan. Butterfat imports  
are only of marginal importance (2-5 thousand tonnes) whereas total  
domestic butter consumption is estimated at about 75.000 tonnes.
(b) International Trade
(i) World market_exports_
In terms of total exports, including food aid and exports on  
concessional terms, the 1983 international market declined in  
comparison with 1982 by 9% in milk equivalent, calculated on a milk 
fat basis. However, as exports of skimmed milk powder and cheese  
increased, by 2% and 3% respectively, the total milk equivalent 
(all milk) of 1983 world exports fell by 3% only. The exports of  
butter, whole milk powder and condensed milk decreased in  
comparison with 1982 by 11%, 13% and 12% respectively. Thus, the  
overall declining development, following the culmination of markets  
in 1979-1980, has not yet been brought to a standstill. In the  
meantime, food aid shipments of dairy products (mainly butter and  
skimmed milk powder) are estimated to have risen to 14% of total  
world dairy trade. In addition, an increasing part of dairy  
exports has moved from the category of commercial sales to the  
category of sales on special, concessional terms. Hence, following  
the development of international surpluses, the pattern of exports

- 117 -
has changed, both with regard to the commercial/non-commercial sales  
structure and with regard to the importance of the trading countries.  
Simultaneously, the international economic recession, supported by 
currency instability, high international interest rates linked to  
balance of payments problems or direct lack of convertible currencies  
has decisively hampered the economic development in traditional and  
potential dairy importing countries.
During these few years, from the culmination of markets to 1983, the  
Community has lost market shares for several products: the world butter 
market (butter equivalent of all butterfat exports) declined from
920.000 tonnes in 1980 to about 715.000 tonnes in 1983, of which the  
EEC export share fell from 65% (1980) to 50% (1983). Correspondingly,  
the world market for skimmed milk powder contracted from 1.060.000  
tonnes (1979) to 880.000 tonnes (1983), reducing the EEC market share  
from 60% to 22%. For whole milk powder, world trade in 1980 was well  
above 700.000 tonnes and hardly reached 600.000 tonnes in 1983. The  
EEC market share for whole milk powder fell in these years from 73% to  
66%. For condensed and concentrated milk, there was a stabilization of  
the world market through 1980-1982 at about 800.000 tonnes with the  
Community share ranging between 70-75%. In 1983 the market dropped to
700.000 tonnes whereas EEC maintained its share at 75%. In contrast to  
the instability of other markets world cheese exports continued to  
increase from about 700.000 tonnes in 1980 to 810-820.000 tonnes in  
1983 and the EEC share increased through this latter period from 43% to  
50%. Against the abovementioned continued decline in EEC butter and  
skimmed milk powder exports from 1982 to 1983, it should be mentioned 
that several other countries managed to increase their exports of  
butter and skimmed milk powder in 1983. For butter they were: Finland,  
Australia, Poland, Uruguay, Canada, Austria, Hungary, Norway, Argentina  
and Sweden, in order of importance. In total, these countries exported
51.000 tonnes more butter in 1983 than in 1982. Correspondingly, the  
following 10 countries exported 224.000 tonnes more skimmed milk powder  
in 1983 than in 1982 (in order of importance): USA, Poland, Australia,  
New Zealand, Sweden, Finland, South Africa, Norway, Austria and Uruguay.
Reflecting the abovementioned market developments, international market  
prices reported to GATT continued to weaken through 1983 and this  
tendency continued even in 1984. Thus, at mid-year 1984, international  
prices had fallen on average by one third since 1982. Moreover, in  
1984 the actual market prices came very close to the officially agreed  
GATT minimum prices for dairy products.

- 118 -
(ii) EEC Exports and Imports in 1983
Part of the reduced Community exports of butter and skimmed milk  
powder in 1983 was due to lower levels of food aid shipments in  
comparison with 1982 (minus 33 000 tonnes of butter equivalent, minus
91.000 tonnes skimmed milk powder). In fact, at the end of 1983,  
certain quantities of committed food aid deliveries were still  
waiting for shipment orders, corresponding to 44.000 tonnes of butter  
and 130.000 tonnes of skimmed milk powder. This delay was partly due  
to the very late adoption of the Community food aid programme for  
1983. As to commercial exports in 1983 compared with 1982, EEC  
butter exports fell by 3% only, compared with a 12% fall of the total  
world butter market. However, against a total world market increase  
for skimmed milk powder of 3%, EEC commercial exports of this product  
in 1983 fell by 35% compared with 1982. The same comparison for  
condensed milk and whole milk powder shows a decrease for EEC exports  
of 13% and 14% respectively. For cheese, however, EEC exports in  
1983 increased by more than 6%. Nevertheless, in absolute terms, the  
total milk content of the abovementioned EEC exports (1) fell by 
2,4 mio tonnes in 1983 compared with 1982. Total butter imports by  
the Community in 1983 amounted to 105.000 tonnes, of which 87.000  
tonnes to the United Kingdom from New Zealand in accordance with the  
special arrangement following the Protocol 18 of the Treaty of  
Accession. Thus, in 1983 the Community imported nearly 15% of the  
total world butter trade and remained the second biggest butter  
importer, next to the USSR (28%). As to cheese, EEC imported 100.000  
tonnes in 1983 corresponding to 12% of the world cheese trade, thus  
remaining the second biggest cheese importer, next to the USA (16%).
4. Milk Price Decisions
With effect from 2 April 1984 the target price for milk in the Community  
was fixed at an unchanged level, i.e. 27,43 ECU/100 kg, in comparison with  
the previous year. At the time of price fixing it was estimated, taking  
into account the impact on prices of green rate changes since the last  
price fixing, that milk prices in national currency would increase by 3% on  
average - hence, well below the average rate of inflation. The fixation of  
an unchanged price for milk should also be seen in relation to other 
decisions, aiming at improving the market for milk and dairy products in  
the Community. Thus, a substantial change in the fat/skimmed milk ratio of  
the target price from 55/45 to 50/50, and in the technical yield of butter  
(839g of fat per kg of butter; previously 850g), resulted in a decrease of  
the intervention price for butter of 10,6% and, correspondingly, an  
increase of the intervention price for skimmed milk powder of 10,9% 
Consequently, the fourchette for aids to skimmed milk powder was widened to  
54-85 ECU/100 kg.
(1) Fresh products, product mixes (e.g. compound feeds) and casein are not  
included

- 119 -
However, the main measure for improving the market balance was the  
introduction of the quota system for milk deliveries for a five year period  
(see Chapter 1) imposing over-quota levies of 100% or 75%, depending on the  
type of quota system applied in different Member States or their regions  
(collective quotas, individual quotas or quotas for direct sales (1)). To  
compensate for extra quantities under quota in 1984/85, the  
coresponsibility levy for 1984/85 was increased from 2% to 3% of the target  
price. It was also decided to maintain the Community aid of 120 mio ECU  
for two marketing years, the aid to go to small dairy farmers based on  
Community criteria. The Council also extended the aid schemes for butter  
at reduced prices to include:
- non-profit-making institutions and associations,
- armed forces and units ranking as such in the Member States,
- manufacturers of pastry products and ice cream,
- manufacturers of other food products to be determined.
The general upper limit for the Community-financed aid to direct butter  
consumption was fixed at 12,75 ECU/100 kg against 51 ECU/100 kg in 1983/84,  
thus taking into account the fixed reduction in the butter price. The  
decisions also opened a possibility for incorporating concentrated skimmed  
milk or partly skimmed milk powder in the aid schemes for animal feed.
5. Market Prospects
The improvement of the market balance will depend largely on the success of  
the policies set up to limit milk production, both in the Community and in  
other countries. Uncertainty remains as to the future development of milk  
supplies in the United States when the present milk diversion programme  
comes to an end in March 1985. Likewise, will the present strong upward  
development in milk supplies in Australia and New Zealand continue into  
1985?
In the case of the Community, it seems generally confirmed that the  
over-quota levies applied under the agreed milk quota system will lead to  
an adaptation to the quota levels introduced for the five milk years  
including 1988/1989. However, the implementation procedure includes a 
certain redistribution of individual quotas to reflect the utilization of  
national reserve quantities and to take into account certain national aid  
schemes for restructuration of production. Therefore, a certain period of  
time will undoubtedly be needed for many producers before they take final  
decisions on their production plans. The actual development in 1984 shows  
that by July the global EEC milk deliveries were on a level with deliveries  
through the same period in 1983, hence, the increases had come to an end.
(1) Council Regulations (EEC) No 856/84 and (EEC) No 857/84 of 31.3.1984, and 
Green Europe, ISSN 0250-5886, No 203, Manuscript finished 12.7.1984.

-  120  -
Since then, milk deliveries have been decreasing and those for the calendar  
year 1984 are expected to be 2% lower than in 1983. It is likely that full  
Community quota adaptation will take place during the second and/or third  
quarter of 1985. Consequently, certain quantities could be due for  
over-quota levy payment at the end of the first quota year, as a transition  
phenomenon only. In 1985, it is expected that EEC milk deliveries to  
dairies will be about 5% below the 1983 level. Thus, from December 1983 to  
December 1985 the size of the active dairy cow population in EEC could  
decrease by about 1,3 mio head, taking into account that December 1983 cow  
numbers were relatively too high, including cows which would normally have  
been slaughtered during 1983. In general, producers' reactions to milk 
quotas in terms of cow slaughterings or changed feeding practices are  
difficult to forecast as they depend heavily on particular regional and  
structural circumstances.
The abovementioned quota scheme has also an immediate impact on the  
production levels of butter and skimmed milk powder. Thus, the 1984 EEC  
production of these two intervention products is likely to fall by about  
6-8% for butter and by about 12-15% for skimmed milk powder, compared with 
the production levels of 1983; hence, a considerable contribution to  
reducing the excessive and very costly stocks of these products. However,  
efforts to maintain and further develop internal EEC milk utilization are  
given very high priority. Further to previous sales measures within EEC  
for butter and skimmed milk powder, new initiatives have been taken to  
enlarge the aid scheme for utilization of butterfat in certain parts of the  
food industry and to introduce partly skimmed milk powder in the animal  
feed sector. It was decided to sell 200.000 tonnes butter from public and  
private stocks as end-year sale 1984/85 within the Community at reduced  
prices. For exports, special provisions were introduced in 1984 for sales  
of butter from public stocks and old butter transformed to butter ghee.
All these measures, with the exception of end-year sales, could, fully  
applied, increase total butter sales by about 200 000 tonnes annually. EEC  
stocks of butter and skimmed milk powder remain important and will not  
disappear from one year to the other. However, for butter the combined  
efforts of less milk - and butter - produced, and the abovementioned sales  
possibilities, resulted in a stabilization of the stock development in the  
autumn of 1984. This could mean an end to further stock increases for  
butter and make reductions possible in 1985. For skimmed milk powder,  
stocks are decreasing and will be significantly lower at the end of 1985.

-  121  -
6. Economic effects of common, measures
(a) Imports
The import levies as foreseen under Article 14 of Regulation (EEC)
No 804/68 continue to represent the difference between the threshold  
price and the lowest free-at-frontier Community offer price. When 
fixing new prices for the 1983/84 milk year, the threshold prices were  
adapted in order to reflect the change of the value ratio of  
butterfat/skimmed milk in the target price for milk. Under the  
existing trade agreements between the Community and various non-member 
countries, the minimum prices for the tariff headings were adapted  
accordingly.
In July 1984 the Council decided that imports of butter into the United  
Kingdom from New Zealand in accordance with the special arrangement  
following Protocol 18 of the Treaty of Accession should be fixed at
83.000 tonnes in 1984, 81.000 tonnes in 1985 and 79.000 tonnes in 1986.
(b) Exports
As mentioned above (under 3.b)(i)), international prices weakened in  
the course of 1983. However, through a long period, the Community has  
pursued a price stabilization policy. Since June 1983, refund levels  
were kept unchanged apart from adjustments to intervention price  
changes on 2 April 1984. Expressed in US Dollars, Community export  
prices have fluctuated.
(c) Aid for skimmed milkA skimmed milk_powder and casein_
When adapting the value ratio butterfat/skimmed milk, the Council  
changed the aid fourchette for skimmed milk powder to 54 ECU/100 kg-85  
ECU/100 kg. At the beginning of the 1984/85 milk year, aids for the  
use of skimmed milk had been fixed as follows:
— skimmed milk powder for animal feed 73,0 ECU/100 kg,
— liquid skimmed milk for calf-feed 6,95 ECU/100 kg,
- liquid skimmed milk for feeding other young animals 10,60 ECU/100 kg,
- liquid skimmed milk for the manufacture of casein 8,00 ECU/100 kg.
Compared with 1982, the use of liquid skimmed milk in animal feed in  
1983 showed an increase of 23%; the use of skimmed milk powder  
increased by 3%, while the quantities of skimmed milk transformed into  
casein increased by 14%.

-  122  -
(d) Storage - Butter
In 1983, 637.300 tonnes of butter were bought in by the Intervention  
Agencies. In the same year, only 38.000 tonnes of intervention butter  
was sold within the Community in connection with special measures,  
while 19.100 tonnes were allocated for food aid. At the end of 1983,  
public stocks of butter were 692.000 tonnes. During 1983, private  
storage aid was granted for 261.200 tonnes of butter. At the end of  
1983, 161.000 tonnes were still in private storage. Certain programmes  
for internal, special sales measures of intervention butter were  
modified in 1981 to grant an equivalent aid for market butter; with  
198.800 tonnes sold in 1983, these programmes were far more important  
than the intervention butter schemes in this year.
Storage - Skimmed milk powder
In 1983, 880.000 tonnes of skimmed milk powder were bought in by the  
Intervention Agencies, while 524.000 tonnes were removed from storage,  
of which 500 000 tonnes for internal EEC measures and only 24.000  
tonnes for food aid.
Public stocks at the end of 1983 amounted to 983.000 tonnes.
Storage - Italian cheeses, long-keeping cheeses
Private storage aids for certain long-storage cheeses have been applied 
regularly in 1983.
(e) Food_aid_
The Community supplies a certain part of its food aid in the form of  
butteroil and skimmed milk powder. The quantities annually set aside  
for this purpose have been 45.000 tonnes of butteroil and 150.000  
tonnes of skimmed milk powder. For 1983, the quantity of butteroil was  
reduced to 36.500 tonnes. However, actual shipments of food aid in  
1983 only amounted to about 17.000 tonnes of butteroil and 73.000  
tonnes of skimmed milk powder. For 1984, the Community food aid  
commitments amount to 32.760 tonnes of butteroil and 122.500 tonnes of  
skimmed milk powder. However, intentions for 1985, proposed by the  
Commission, are 40.000 tonnes of butteroil and 150.000 tonnes of  
skimmed milk powder. Actual shipments during a calendar year will also  
depend on the shipping possibilities and the ability of the recipient  
countries to receive the quantities requested.

- 123 -
7. Financial Expenditure
The expenditure of the Guarantee Section of the EAGGF in respect of milk  
products fell from 4.752 mio ECU in 1980 to 3.328 mio ECU in 1982, or from 
42% to 27% of the Guarantee Section Expenditure. However, in 1983  
estimated expenditures in the milk sector increased by 32% to 4.396 mio 
ECU, accounting for 28% of total Guarantee Section expenditure. Receipts  
from the coresponsibility levy represented 527 mio ECU in 1983. For 1984  
the estimated expenditures for the milk sector amount to 5.811 mio ECU and  
receipts from the coresponsibility levy to 725 mio ECU (1).
(1) Foreseen in preliminary draft BRS 1/1984

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14. BEEF/VEAL
Introduction
Beef/veal production accounted for about 15% of the value of final  
agricultural production in 1983.
About 2.48 million farms, or roughly half the total in the Community, raise  
cattle. Between 1977 and 1983, however, the number of cattle farmers  
declined at an average annual rate of 2,1% and the average number of head  
per farm in the Community is now about 33. Land used for fodder production  
accounts for about 60% of the Community's UAA, and since cattle-rearing is  
essentially extensive it is not surprising that most beef/veal is produced  
in the countries with large areas of pasture.
The Community, acounting for about 15% of world production, is second among 
world producers ahead of the USSR but lags well behind the United States.
Production
(a) Cattle numbers
Because of the continued relatively low rate of slaughterings, and  
especially the cyclical fall in cow slaughterings, the upward trend in  
cattle numbers that first emerged in 1981 was maintained in 1983.
The survey of cattle numbers carried out in December 1982 gave a result  
of 78,8 million head, including 31,6 million cows, up 0,8% and 0,9%  
respectively on the previous year.
The number of calves (cattle less than one year old), which dropped in  
1982, was up about 3,5% in December 1983 but the number of beef cows  
dropped further to end up at 5,8 million head, substandially below the  
six million mark.
The medium-term rate of increase in cattle numbers has been falling in  
recent years.
(b) Production of beef/veal
After three years of heavy slaughterings (1979-81) 1982 and 1983 saw  
much lower numbers of animals - both cows and heifers and adult males -  
sent for slaughter; calf slaughterings rose in 1983 from the  
comparatively low levels of 1981 and 1982.

- 125 ~
Slaughterings
In 1983 about 20,9 million head of adult cattle were slaughtered, an increase  
of about 2,5% compared with 1982; in the first half of 1984 there was a sharp  
upturn of over 10% compared with the first half of 1983 in the number of cows  
slaughtered.
Given the trend in the Community cattle population, the number of adult cattle  
marketed in 1984 will probably show an increase of about 4%.
The number of females (cows and heifers) slaughtered should pick up strongly 
in the second half of 1984.
The medium-term trends in slaughterings of adult cattle on the one hand and of  
calves on the other have differed in previous years: up for adult cattle but
down for calves.
In 1983 the figure for calf slaughterings (6,9 million head) was 2,8% higher  
than in 1982; during the first half of 1984 the number of calf slaughterings  
rose by an even greater amount (about 7%).
Slaughtering coefficient (i.e. the ratio of slaughterings to cattle numbers)
After reaching a high level in 1980 the slaughtering coefficient for adult  
cattle fell sharply in 1981 and 1982 and was relatively low in 1983. The  
slaughtering coefficient for calves was also low.
Average slaughter weight
The average slaughter weight of adult cattle in 1983 (291,3 kg) was up by 
nearly 1% compared with 1982; in keeping with the trend recorded in recent  
years, the average slaughter weight of calves in 1983 (116,5 kg) showed a 
sharp rise of about 2,2%. The very positive trend as regards the average  
slaughter weight of adult cattle is probably due mainly to fairly low prices  
for cattle feed until mid-1983.
Production of beef/veal
Production declined for two consecutive years following the cyclical peak in  
production in 1980 by 3,5% in 1981 and a further 4,0% in 1982. In 1983,  
however, it rose by 3,5%.
In 1983 beef production rose by 3,3% in the Community; in the first half of  
1984 it rose by about 4%.

-126 -
Veal production was 5,OX up in 1983 with the average slaughter weight up by
2,5 kg. In the first half of 1984 veal production rose by about 9% compared  
with the figure for the first half of 1983.
Production of beef/veal has been increasing at a lower average annual rate  
than previously in response to less favourable market conditions.
In recent years, the structure of cattle-raising has undergone far-reaching  
change :
- a decline in the number of cattle farmers at the rate of roughly 2% per  
year, mainly through the elimination of small farms, and
- a slight increase in the number of animals per farm.
Beef/veal producers fall into three main categories, corresponding to the  
three categories of animals reared, namely:
- cull cows and young calves (milk production),
- suckler herds and grass-reared adult cattle (bullocks),
- young male cattle fattened on cereal-based feedingstuffs (maize silage) in  
special production units.
As a result of the sharp expansion in the organized production of young bulls,  
young male animals now account for about one third of all the beef/veal  
produced in the Community.
3. Consumption
(a) Consumption of beef/veal
Because of the economic and employment situation in the Community  
(industrial production stagnant and a sharp increase in unemployment)  
consumption of beef/veal, despite supplies still being plentiful,  
remained the same in 1983 as in 1982 at around 6,6 million t.
Although supplies were still plentiful, consumption, at about
6,6 million t, was about 2% down on the 1981 figure.
Consumption of beef/veal is a function of the following factors:
- population growth, which in recent years has slowed down 
considerably;

-  127  -
— economic growth, and changes in the pattern of private expenditure  
in particular;
— the availability of meat on the market and the short-term 
fluctuations in its price;
— lastly, the size of the trading margin between producer and consumer 
prices.
a·  Annual per capita consumption of beef/veal rose from about 25 kg in  
the early seventies to about 26 kg towards the end of the  
seventies. In 1982, per capita consumption was about 24,4 kg, of  
which 21,6 kg for beef and 2,8 kg for veal.
Per capita consumption had increased until 1973 at an average rate  
of more than 1% per year. Because of the economic difficulties in  
recent years, the 1982 figure was more than 1 kg down on that for  
1980.
b. Because population growth slowed down, the overall consumption of  
beef/veal expanded more slowly from 1975 to 1980 than beforehand, by  
about 0,8% per year. Since 1980 total consumption of beef/veal has  
been dropping by 0,1% a year because of the unfavourable economic  
and employment situation.
(b) Rate of self-sufficiency
In past years, the Community had abundant supplies of beef/veal as a  
result of fairly steady production, import commitments entered into and  
intervention stocks.
Exceeding 100% in 1974 and 1975, the self-sufficiency rate fell short  
of that figure in the following three years. From 1979 onwards, it was  
well above 100%. Counting public stocks of intervention meat, the  
Community at the present time has more meat available than it is  
consuming.
However, because of the fairly marked fall in production in 1981 and  
1982 the rate of self-sufficiency in 1982 moved back down, to about  
101%.
In 1983, however, it rose again to 104,5%.

-  128  -
4. Trade
Intra-Community trade in beef/veal has been marking time in recent years at  
about 1,4 million t. Exports to Greece from other Member States have  
increased.
Since 1974, imports of beef/veal from non-member countries have averaged  
about 0,4 million t:
415.000 in 1978
412.000 in 1979
356.000 in 1980
364.000 in 1981
440.000 in 1982
448.000 in 1983
Many of these imports enter the Community on special terms.
The Community's external trade
('000 t)
:  Period 
:  Trade1978 1979 1980 1981 1982 1983 : 
•
:  Imports from non-member  
:  countries:••
••
•
:  Beef/veal 415 412 356 364 440 448 :
:  of which: live animals  
:  ('000 head)67
(385)73
(451)59
(361)50
(310)66
(488)64 :
(505) :  
•
:  fresh or chilled meat 62 63 61 55 72 87 : 
•
:  frozen meat 122 141 114 121 164 153 : 
•
:  preserves 164 135 122 138 138 144 : 
•
:  Exports 168 338 642 662 480 603 : 
•
:  of which: preserves 38 70 30 38 38 38 :
:  Net trade balance 247 74- 286 - 298 - 40 - 155 :

-129 -
In 1983, exports of beef/veal to non-member countries rose to 603.000 t
(carcase weight). The Community's external trade surplus in beef/veal thus
amounted to 155.000 t in 1983.
The main suppliers of beef/veal to the Community in 1983 were:
- Latin American countries, especially Brazil, Argentina and Uruguay,  
supplying upwards of 50% of total imports and more than 70% of imports of  
frozen meat;
- East European countries, supplying more than 10% of total imports and  
nearly two thirds of imports of live animals, mainly from Poland;
- Australia and New Zealand, supplying about 4% of total imports;
- Yugoslavia, supplying around one fifth of imports of live animals and  
more than one quarter of the fresh and chilled meat;
- Austria, supplying about 15% of imports of live animals and about one  
third of imports of fresh meat;
- lastly, ACP countries (Botswana, Swaziland, Kenya and Madagascar),  
supplying about 7% of total imports.
The Community's main customers in 1983 were:
- Mediterranean European countries, in particular Yugoslavia, taking about  
10% of total exports;
- East European countries, taking upwards of one quarter of total Community  
exports, the USSR taking more than 18%;
- North African countries, particularly Libya and the Maghreb countries,  
taking about 17% of total exports, especially of live animals;
- Middle East countries, taking about one third of total exports, with  
Egypt accounting for about 12%.
Prices
(a) Common prices
For the 1984/85 marketing year the guide price for adult cattle was  
fixed for the whole Community, from 2 April 1984 onwards, at  
205,02 ECU/100 kg liveweight.
The guide price is the price, valid for all categories of adult cattle  
marketed on Community representative markets, which the Community seeks  
to achieve, by means of Community regulations, during a normal  
marketing year.

- 130 -
The Council has also fixed the intervention price at 184,52 ECU/100 kg  
liveweight, or 90% of the guide price, thereby derogating from  
Regulation (EEC) No 805/68 for this marketing year.
(b) Market prices
In 1981 and 1982 the average Community market price for adult cattle  
showed an appreciable increase of the order of 10% per year, a figure  
comparable to the rate of inflation. In 1983, however, the increase  
was only 0,5%. Average prices for adult cattle remained below the  
Community intervention price.
In September 1984 the Community market price for all qualities of adult  
cattle was running at about 153,20 ECU/100 kg liveweight, i.e. just  
under 75% of the guide price.
After rising appreciably for two consecutive years, the Community  
market price for calves went up by only 0,6% in 1983.
Prices for adult cattle
(ECU/100 kg liveweight)
Period
Price1979/80 1980/81 1981/82 1982/83 1983/84 1983/84 % change  
((84/85)/  
(83/84))
Guide price 154.58 160.76 172.82 191.87 207.09 205.02 - 1.0%
Intervention
price 139.12 144.68 155.54 172.68 186.38 184.52 - 1.0%
Market price
- in money terms 130.65 132.58 149.93 161.00162.62* 153.83* - 5.4%**
- as % of the  
guide price 84.8 83.0 86.1 84.2 79.7 75.0
Import price 82.55 84.75 90.67 92.0092.00* 86.50*- 6.0%**
* From April to September 1984.
** Percentage change compared with the corresponding period of the previous  
year.
(c) Import prices
In 1982 and 1983, as a result of the world-wide economic recession, the  
prices of beef/veal expressed in USD fell on the world market; this  
fall in prices was, however, often more than offset by lower (and in  
some cases much lower) exchange rates for the currencies of exporting  
countries in the southern hemisphere. As a result, Community  
free-at-frontier offer prices expressed in ECU remained fairly steady,  
in particular in the case of frozen meat.

-  131  -
(d) Consumer prices
In past years consumer prices for beef/veal expressed in national  
currency rose at an average rate comparable to the Community inflation  
rate. This happened again in 1983, with an increase of still around 7%  
on average.
(e) Cost of animal feed
Since the sharp rise in mid-1983 of prices for protein-rich products  
used in animal feed, prices for commercial cattle feeds and feed grains  
have up to autumn 1984 shown a downward trend.
Outlook
(a) At the end of 1983 the number of breeding females was very high but at  
the beginning of 1984 the number of females slaughtered went up sharply 
and the measures taken at the end of March to limit milk deliveries  
will accentuate the cyclical trend of cow slaughterings, in particular  
slaughterings of dairy cows.
In 1984, therefore, we can expect to see a large number of female  
slaughterings and a marked increase in beef production, the estimate  
being about 7,2 million t against about 6,9 million t in 1983. A  
further increase of 1 to 2% is expected in 1985.
In 1983 total beef/veal consumption and consumption per head remained  
stable at around 6,6 million t and 24,4 kg.
In view of the drop in market prices and the increased competitiveness  
of beef/veal with other meats, consumption is expected to increase  
again in the Community in both 1984 and 1985.
Given the outlook for production and consumption and the size of the  
present stock of intervention meat to be disposed of in coming months,  
the supply of beef/veal on the Comunity market is likely to exceed  
demand again next year.
Owing to a high level of production because of the numbers of dairy  
cattle being slaughtered the rate of self-sufficiency will be well  
above 100% in both 1984 and 1985.
As in 1983, export prospects on the world market are good for both 1984  
and 1985 and the quantities disposed of in this may may well be higher  
than in past years.
Market prices are very low, in particular compared with the guide  
price, and market prices for adult cattle are expected to recover  
slightly in the medium term.

- 132 -
(b) There has in recent years been a sharp drop (of 10-15 kg) in per capita  
demand for beef/veal in most of the major countries involved in world  
trade in meat, with the exception of Japan and the Member States of the  
Community.
In other countries the shortage of foreign exchange has also adversely  
affected meat purchases in recent months, in particular in the case of  
new import markets for beef/veal.
In the major exporting countries in the southern hemisphere the  
production of beef/veal is sharply down as a result of both adverse  
weather conditions in the stockfarming areas (drought in Australasia  
and floods in Latin America) and a sharp rise in domestic prices, in  
some cases in excess of the rate of inflation in 1983/84. This price  
rise in real terms has led to a reluctance to send cattle for slaughter  
and in the short term to a reconstitution of beef production potential.
In North America, after the sharp falls in cattle numbers in recent  
years, production has steadied, albeit at a.fairly low level, given the  
adverse effect of the sharp increase in cattle feed prices on the  
profitability of stockfarming.
Accordingly, the quantity of beef/veal available for export, in  
particular in the major exporting countries in the southern hemisphere  
with the exception of Brazil, will in 1984 and 1985 show an appreciable  
decrease, of about 500—600 000 t, compared with the early eighties.
Pending the expected return between now and 1986 to a level of  
production in these countries again much greater than their domestic  
demand, the economic recovery now taking place in certain countries  
such as the USA and Japan, combined with the still reduced export  
capability of the southern hemisphere countries, may well lead to an  
increase in world market prices in the medium term. Such a rise is at  
the moment firmly blocked by the dollar's recent climb as the exchange  
markets.
7. Economic aspects of the measures taken under the common organization of the  
market
(a) Market support measures
In order to support the market, the Community has continued to apply a  
number of measures:
- Market clearance measures:
.  granting of export refunds with the possibility of advance fixing  
of the amounts; it was decided to differentiate some refunds by  
reference to the category of animal;
.  direct buying-in by public intervention agencies:
227 000 t in 1978  
330 000 t in 1979  
410 000 t in 1980  
280 000 t in 1981  
268 000 t in 1982
445 000 t in 1983 (representing 7.3% of Community beef
production).

_ 133 _
.  up to 1 September 1984, 195.000 t had been bought in, drop of  
50 000 t from the corresponding period of 1983;
.  granting of private storage aid in the autumn of 1983, covering  
an overall quantity of about 24.000 t of hindquarters (with  
provision for boning and/or export after a minimum period of  
storage) and similar aid for the private storage carcases,  
frequarters and hindquarters in autumn 1984 (from 20 August to  
21 Dezember).
Measures to encourage consumption (sale of intervention meat by  
intervention agencies for direct consumption, allocation of a  
certain amount of frozen meat from intervention stocks to industry  
for processing in the Community, and sales of intervention meat at  
special prices to welfare organizations).
Aid measures
. possibility of granting variable premiums for the slaughter of  
certain beef cattle (clean cattle) in the United Kingdom;
.  granting of a calf premium in Italy, Greece, Ireland and Northern  
Ireland;
. lastly, as an income supplement for producers specializing in  
quality meat, granting of a premium for keeping suckler cows,  
with effect from the 1980/81 marketing year.
- Adjustments to the intervention system
As in previous marketing years, the Commission restricted  
intervention buying to certain categories (male animals) and forms  
of presentation (carcases, quarters) by reference to developments,  
mainly seasonal, in the market situation. In connection with the  
adjustment of the rules in this sector, the Council fixed the  
Community scale for the classification of beef carcases and the  
Commission laid down the provisions for applying the scale and  
defined the arrangements for recording the market prices of beef  
carcases on entry to the slaughterhouse. Since 9 April 1984 the  
Community scale for the classification of beef carcases has been  
used for intervention buying.

- 134 -
(b) International agreements
In addition to the normal arrangements for importing beef/veal, the  
Community has entered into undertakings to import large quantities  
annually on the basis of bilateral and multilateral agreements.
Under the GATT, the Community opens annual tariff quotas for the import 
of :
— 38.000 head (18.000 on an autonomous basis) of heifers and cows of  
certain mountain breeds at the rate of 6%, and 5.000 head of certain  
Alpine breeds at the rate of 4%, other than animals intended for  
slaughter;
- 50.000 t (in terms of boned meat) of frozen beef/veal at the rate of
20% .
Under the arrangement for "high-quality" cuts, the Community undertook  
to raise, as from 1983, the annual tariff quota for fresh, chilled and  
frozen beef/veal imported at the rate of 20% from 21.000 t to 29.800 t,  
as follows:
10.000 t from the United States and Canada
5.000 t from Australia  
12.500 t from Argentina
2.300 t from Uruguay,
and to import a tariff quota of 2.250 t (in terms of boned meat) of  
frozen buffalo meat from Australia, also at 20%.
Under the ACP/EEC Lomé Convention, special arrangements were introduced  
for the import of 30.000 t (in terms of boned meat) of beef/veal from  
Botswana, Swaziland, Kenya and Madagascar. The agreement provides for  
exemption from customs duties and the reduction of other import charges.
In the forward estimates for 1984, the Community provided for the  
possibility of importing:
50.000 t (in terms of unboned meat) of frozen beef/veal for processing;
190.000 head of young male cattle for fattening (164.000 for Italy,
25.000 for Greece and 1.000 for other Member States).
Under a trade agreement with Yugoslavia, 50.400 t of fresh or chilled  
baby beef may be imported annually from that country with a reduced  
levy.

- 135 -
Under an agreement reached with Austria, Sweden and Switzerland,  
special levies may be fixed on imports of live cattle and fresh and  
chilled beef/veal from those countries.
Given the distance by sea, the Community has agreed to the advance  
fixing of the levy for fresh and chilled meat imported from Argentina  
and Uruguay.
The levies on frozen meat imported from Romania, Argentina, Uruguay,  
Australia and New Zealand may also be fixed in advance.
Lastly, there is provision for imports with customs duties bound under 
GATT, i.e. with no levy or quantitative limit; this applies to  
pure-bred breeding animals (duty-free) and to preserves (at the rate of  
26%).
8. Budgetary expenditure
EAGGF Guarantee Section expenditure on beef/veal was 1.736,5 million ECU in  
1983; it is provisionally put at 2.056 million ECU in 1984 and estimated  
at 2.073 million ECU in 1985, i.e. 11,2% and 11,5% respectively of total  
Guarantee Section expenditure. The figure of 2.056 million ECU breaks down  
into 1.066 million ECU in refunds, 692 million ECU in intervention  
expenditure for public and private storage and 218 million ECU in premiums,  
mainly the calf premium and the suckler cow premium.

-  136 -
15. PIGMEA!
1. Introduction
The Community is the second-largest pigmeat producer in the world, after  
China. In 1983 pigmeat accounted for a larger percentage (42,6%) than any 
other meat of the total tonnage produced in the Community and for (12%) by 
value of gross final agricultural production. In December 1983 there were 
in the Community altogether 79,1 million pigs, including 8,8 million sows,  
on about 2 million farms.
The importance of the pigmeat sector derives from its own dynamism, which  
is reflected in the increasing trend towards large production units 
requiring little or no farmland and in the concentration of production,  
irrespective of the size of the Member States, along the North Sea and  
English Channel and in northern Italy. The resulting structural change has  
meant a drop in the number of pig farms, with the gradual disappearance of  
the small farms keeping fewer than 200 pigs or 10 sows and an increase in  
the pig herd per farm. Herd size varies greatly from one Member State to  
another: in December 1983 it averaged 283 pigs per farm in the Netherlands,  
277 in the United Kingdom, 179 in Denmark, 152 in Belgium, 114 in Ireland,  
about 50 in Germany, France and Luxembourg, 16 in Greece and only 10 in  
Italy. The Community average is 42 pigs per farm.
2. Production
In 1983 the Community produced 10,5 million t of pigmeat, 3,3% more than in  
1982. Despite this sharp increase, production continued to rise in the  
first six months of 1984. It then began to fall off, so that in 1984  
production will only be slightly up on 1983.
Although successive increases had taken the pig population to record  
levels, the overall figure for December 1983 was 0,1% down on December  
1982. Account being taken of divergent trends in pig numbers at national 
level, it is estimated that Germany has 30% of the Community population, 
France and the Netherlands 14% each, Italy 12%, Denmark 11%, the United  
Kingdom 10% and Belgium almost 7%.

-  137 -
3. Consumption
Although consumption rose from 10,10 million t in 1982 (37,3 kg per capita)  
to 10,21 million t in 1983 (37,5 kg per capita), it failed to keep pace  
with production, so that the degree of self-sufficiency rose from 101% in  
1982 to 103% in 1983. Consumption is expected to rise by a further 0,5%,  
reducing the degree of self-sufficiency to 102,5% in 1984.
Annual per capita consumption varies considerably from one Member State to  
another, ranging from 58 kg in Germany to 25 kg in Italy and the United 
Kingdom and only 22 kg in Greece. The degree of self-sufficiency shows an 
even greater variation: from almost 400% in Denmark to less than 75% in  
Italy, Greece and the United Kingdom.
4. Trade
In line with the trend over the past ten years, intra-Community trade  
increased by almost 7% in 1983, when the quantities traded totalled  
2,48 million t, as compared with 2,32 million t in 1982. These figures  
account for the bulk of world trade, including some two thirds of world 
exports.

- 138 -
INTRA-COMMUNITY TRADE IN PIGMEAT IN 1983 (1)
(tonnes)
To
FromBLEU DENMARK GERMANY FRANCE GREECE IRELAND ITALY NETHERLANDS UNITED
KINGDOMEEC
BLEU X 281 61.130 173.621 4.055 330 60.004 28.515 18.596 346.712
DENMARK 503 X 131.522 62.888 10.082 184 64.062 897 286.891 557.029
GERMANY 19.967 551 X 16.256 12.855 143.598 11.654 14.611 119.493
FRANCE 10.385 98 5.824 X 198 1516.166 586 3.032 36.304
GREECE - - - - X - - - - -
IRELAND 954 - 3.921 9.373 5X 723 22 27.809 42.887
ITALY 2.347 2922.041 9.080 187 - X 1.753 1.456 36.893
NETHERLANDS 102.858 114301.202 159.092 26.240 664212.786 X 78.147 881.103
UNITED KING­
DOM1.661 193 34.815 4.728 8348.043 256 1.306 X 91.085
EEC 138.675 1.266 560.635 435.038 53.705 49.237 397.595 44.733 430.622 2.111.506
(1) Excluding fats and offal.

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The above table shows that, in intra-Community trade, the smallest Member  
States (Netherlands, Denmark and Belgium) are the suppliers to the largest  
Member States (Germany, France, United Kingdom and Italy).
The trade balance with non-member countries has altered to the Community's  
advantage. In 1983 Community exports to non-member countries were 20% up  
on 1982, totalling 327.000 t as against 271.000 t. At the same time  
imports from non-member countries dropped by 24% to 147.000 t, as compared  
with 192.000 t in 1982. Thus, in terms of quantity, the surplus of exports  
over imports more than doubled in 1983, totalling 180.000 t as compared  
with 79.000 t in 1982.
The breakdown by type of product shows that the trend was even more  
favourable in terms of value:
EXPORTS IMPORTS BALANCE
Tonnes 1982 1983 %1982 1983 % 19821983 83/82
Live pigs 385 4310,121.729 5.392 3,7-21.344 - 4.691 - 77%
Meat and 
fats56.683107.764 3380.824 48.386 32,9-24.141 59.378 -346%
Lard 37.346 23.789 7,326.870 29.610 20,110.476- 5.821 -156%
Offal 22.986 24.039 7,449.262 50.146 34,2-26.276 -26.107 - 1%
Sausages,  
prepared and  
preserved  
meats153.496 170.831 52,213.710 13.382 9,1139.786 157.449 + 13%
TOTAL 270.896 326.854 100192.395 146.916 10078.501179.938 +129%
Under the two headings which are by far the most important in terms of  
value, the Community further strengthened its position as a net exporter of  
processed products, which account for more than half of all exports, and  
again became a net exporter of fresh and salted meat.
The main market for preserved products is the United States whilst Japan is  
the largest buyer of meat. A huge range of processed products is exported  
to many different countries.

-  140“
As in the past, the East European countries, led by Hungary, are the  
Community's main suppliers but mention should also be made of Sweden and,  
for offal and fats, Canada and the United States.
Incomplete returns for 1984 show a maked rise in imports, which should 
return to their 1982 level, and a sharp increase in exports, which could 
total almost 400.000 t, mainly because of the reopening of the Japanese and 
American markets to fresh and frozen meat from Denmark, in September 1983  
and January 1984 respectively.
5. Prices
(a) Common prices  
- Basic price
Management of the Community pigmeat market depends on the basic  
price, which is fixed annually for the period 1 November -  
31 October and applies to Class II pig carcases on the Community  
scale.
For 1983/84 the basic price was raised by 5,5% to  
205,39 ECU/100 kg. For 1984/85, acknowledging the need for a  
cautions policy on prices, the Council lowered the institutional  
prices for all types of meat by 1%, so that the basic price was set  
at 203,33 ECU/100 kg.
- Sluice-gate prices
The sluice-gate prices, which are fixed every quarter, are  
considered to be the offer prices which are applied at the Community  
frontier by the most efficient producers under world market  
conditions and at which products from non-member countries may be  
imported without undercutting the price levels aimed at by Community  
market regulations. The sluice-gate prices depend on the world  
market prices for feed grain. Changes in the latter caused the  
sluice-gate prices to rise from 122,17 ECU/100 kg on 1 February 1983  
to 156,87 ECU/100 kg on 1 February 1984. Since 1 August 1984 the  
level has stood at 153,46 ECU/100 kg.
(b) Market prices
In 1983 prices fell sharply between January and April, necessitating  
the réintroduction of intervention measures in the form of private  
storage aid between 1 February and 9 September 1983.

-141-
Having dropped to 145 ECU/100 kg in April, prices remained unchanged 
until July, before picking up once more in August and reaching  
162 ECU/100 kg by the end of September. Prices then declined steadily,  
falling to 152 ECU/100 kg by the end of the year and then dropping  
sharply to 144 ECU/100 kg in early January 1984. Immediately after the  
resumption of private storage aid on 16 January 1984 prices improved  
strongly and by March they were back at their 1982-83 level. This  
level was then surpassed and since June prices have been consistently  
higher than 165 ECU/100 kg.
carcase prices
1.11.80
31.10.811.11.81
31.10.821.11.82
31.10.831.11.83
31.10.841.11.84
31.10.85
Basic price  
absolute value  
% change158,72
105,50176,16
117,11194,68
129,40205,39
136,52203,33
135,15
Market price  
absolute value  
% change  
as % of basic 
price140,21
104,89
88,34161,38
120,73
91,60153,18
114,54
78,7159,41
119,40
77,6
Sluice-Kate price  
absolute value 
% change131,54
119,46132,33
120,18124,99
113,51152,12
138,15
(c) Prices in non—member countries
Of the "market economy" non-member countries, the largest producers are  
in North America. In the United States the upturn in production 
recorded in 1983 continued into the first half of 1984, keeping prices  
at very moderate levels. Since July production has declined  
appreciably but prices have remained stable at the 1983 level. Pig  
numbers are 9% down and production 5% down on 1983. In Canada,  
although production has been expanding steadily since last year and  
this trend should continue into 1985, prices are 10% up on 1983.
In Spain, there has been a further 3,5% increase in pig numbers  
(December 1983 as compared with December 1982), which has helped to  
maintain the steady expansion of production. In 1983 prices were on  
average 6% lower than in 1982, reaching a level close to the Community
average.

-  142-
Of the countries with state-run economies, China is the world's largest  
producer with almost 12 million tonnes and a pig population of some  
320 million. Chinese production is on the increase, as is production  
in the East European countries, which are the Community's main  
suppliers. In Poland and Czechoslovakia pig numbers increased by 7% in  
1984 whilst in Hungary they increased by 23% during the first six 
months of 1984. The GDR has introduced far-reaching changes in its  
agricultural policy. In 1984 prices of pigs for slaughter were 55%  
higher than in 1981, as compared with a 6% drop over the last 10 years.
(d) Consumer prices
The 1983 fall in producer prices was to a great extent passed on to  
consumer prices, so that the market was able to absorb much of the  
increase in production. The subsequent improvement in producer prices 
was also passed on to the consumer, after a certain time-lag, with the  
result that demand has been faltering since the summer of 1984.
6. Production costs
Production costs other than feed represent about 30% of the total cost of  
producing pig carcases. As in previous years, these costs have been  
influenced by the general level of inflation and interest rates. Feed  
costs, on the other hand, have been affected by marked fluctuations since  
the stunmer of 1983, following the rise in the world market price for soya  
(being sheltered by the mechanisms of the CAP, Community cereal prices have 
not been affected by the impact on the world market of the PIK scheme in  
the United States).
Variations in pigmeat and feed prices
Member
StateDecember 1983/1982 September 1984/1983
Pig carcases Feed Pig carcases Feed
France - 6% + 17% + 11% - 2 %
Belgium - 8% + 14% + 11% + 1 %
Netherlands - 12% + 12% + 6% - 4 %
Germany - 17% + 8% + 8% - 5 %
Italy - 1% + 11%r -  + 9 % + 5 %----
United
Ki
ngdom+ 2% + 10% + 14% - 1 %
Denmark + 3% + 15% + 8% - 21 %

-143-
The first half of the above table clearly shows the difficult position in  
which pig farmers have found themselves, with pigmeat prices falling  
steeply on the one hand and feed prices rising sharply on the other. This  
situation continued into the first few months of 1984 but the position then  
improved, as can be seen from the second half of the table, with first of  
all a rise in pigmeat prices and then a drop in feed prices, which became  
noticeable from August onwards. Since then the price of feedingstuffs has  
been at a level favourable to pig farmers.
Outlook
In 1983 and in the first half of 1984 production increased considerably but  
since then there has been a downward trend and the volume of production in  
1984 should be about the same as the high level recorded in 1983. Moderate  
price levels have meant that internal consumption has been able to absorb  
some of the increase in supplies. External trade has also helped to ease  
the market situation. The increase in exports in 1984 should be even  
greater than in 1983, taking exports to 400.000 t. Imports, on the other  
hand, should return to their 1982 level, after a marked decline in 1983.
Unless, as is always possible, some health incident causes restrictions to  
be placed on exports and thus disturbs the Community market, pigmeat prices  
should remain at a high level until the first quarter of 1985, given the  
downward trend in supplies, whilst feed prices should settle at a level  
favourable to pig farmers.
In planning for the future, producers would seem already to have taken  
account of this rather favourable outlook. The results of the August 1984  
survey of pig numbers in the Community clearly indicate that the number of  
breeding pigs is on the increase once more, which should mean that  
production will pick up in the second quarter of 1985, particularly in  
Denmark, the United Kingdom and the Netherlands. If this does occur, pig  
prices are likely to enter a new downward phase of their cycle in 1985.
.  Economic aspects of the measures taken under the common organization of the  
market in pigmeat
(a) Levies and refunds
Under the system of trade with non-member countries, levies and (where  
appropriate) additional amounts may be charged on imports and refunds  
may be granted on exports.

-  144 -
Levies followed the trend in world and Community prices for feed grain  
and, after successive increases in 1982 and 1983, they stood at  
55,8 ECU/100 kg from 1 August to 31 October 1983. They then fell to  
38 ECU/100 kg for the period 1 February-31 July 1984.
Since 1 August the levies have remained unchanged at 40 ECU/100 kg.
Additional amounts were charged on certain products and countries of  
origin between April and September 1983. They were again introduced on  
30 November 1983 and have remained in force since then.
Market developments have necessitated frequent changes in the export  
refunds. In February and then again in April 1983 the refunds on 
non—processed products were increased, only to be reduced again in  
October 1983. Processed products were not affected by these  
variations. In December 1983 the refund on carcases was increased.
From April 1984 onwards the level of the refunds began to come down,  
first of all on preserved meats and then, in May, on certain cuts and  
processed products. In July the level of all the refunds was lowered.  
In October 1984 there was a further lowering of the refunds on fresh 
meat and processed products.
(b) Intervention
Private storage aid was reintroduced from 16 January to 20 June 1984.  
Such aid was granted in respect of more than 100.000 t and helped to  
bring about the strong upsurge in prices which was recorded immediately  
after the measure entered into force.
9. Budgetary expenditure
EAGGF Guarantee Section expenditure on pigmeat in 1983 totalled 145 million  
ECU, including 120,2 million ECU for export refunds and 24,8 million ECU  
for private storage aid, as compared with total expenditure of 112 million  
ECU in 1982 (refunds: 96 million ECU, private storage: 16 million ECU).
For 1984 provision has been made for expenditure totalling 207 million ECU,
i.e. 166 million ECU for export refunds and 41 million ECU for private  
storage aid.
The preliminary draft budget for 1985 sets aside 195 million ECU.

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16. EGGS
Introduction
The relative value of egg production in the Community may be gauged from  
recent estimates:
1981 1982
Eggs/livestock products 6,1% 5,3%
Eggs/total agricultural production 3,5% 3,0%
National figures indicate that undertakings with more than 10.000 layers  
at present account for more than 50% of production in most Member States  
and up to 75% in the United Kingdom and the Netherlands. Greece and  
Luxembourg, which account for about 3% of Community production, are the  
only countries where production is still relatively unconcentrated.
According to FA0 and USDA statistics, the Community, which in 1982 was the  
second largest egg producer in the world, after China and before the  
United States, was overtaken in 1983 by the Soviet Union. It remains the  
number one exporter, ahead of the United States. This corresponds to 14%  
of world production and 33% of world exports (eggs in shell and egg  
products), not including intra-Community trade.
Production, consumption and trade
In 1983 Community egg production (4,2 million t) was 1,5% down on the  
previous year. The serious crisis on the egg market, which began after  
Easter 1982, led to a decrease of layer chick placings in 1982 and 1983.  
This began to have an appreciable impact on production from May 1983  
onwards. During the first half of 1984, supply was still down on the  
previous year, but it rose again during the second half. Now, towards the  
end of the year, the market situation is therefore again unstable.
Consumption decreased slightly from 3,87 million t in 1982 to 3,84  
million t in 1983. In most Member States this year there is a tendency  
for consumption to stagnate or even decline. Favourable prices and  
advertising campaigns have been unable to halt this trend. Per capita  
consumption has remained unchanged for several years.

_ 146_
Intra-Community trade, accounting for one eighth of production, increased  
by 3,6% in 1983. Two thirds of this trade consisted of exports mainly  
from the Netherlands, Belgium and France to Germany. Italy was the second  
largest buyer in 1983.
The measures adopted by the United Kingdom following the judgment of the  
Court of Justice in July 1982 (national measures to combat Newcastle  
disease) enabled trade to be resumed in 1983, with eggs being supplied to  
this Member State mainly from the Netherlands and France.
The volume of trade with non-member countries in 1983 is estimated at
186.000 t: 151.000 t of exports and 35.000 t of imports (1). Exports of  
eggs for consumption were 8% down on 1982, not only to Middle East  
countries (Iraq, Saudi Arabia and Egypt), but also to Switzerland and  
Austria as these importing countries have been producing more eggs  
themselves. In 1984, exports have continued to decline, with a 33% fall  
over the first eight months. Exports of hatching eggs, on the other hand,  
are still showing an upward trend (+ 2,7% in 1983, + 6,5% in the first  
eight months of 1984).
Imports of eggs in shell, most of which enter the Community under inward  
processing arrangements (for re-export after processing), increased in  
1983 and 1984 because more eggs were available from non-member countries 
in Europe. The volume of these imports remains well below 0,5% of  
Community production, however. As regards hatching eggs (turkeys),  
purchases in non-member countries were well down in 1983.
3. Prices
The fall in Community supply in 1983 restored prices to a satisfactory  
level from August 1983 onwards. Although supply remained low during the  
first half of 1984, the egg market showed the expected drop in prices  
after Easter. Although this was due primarily to the seasonal fall in  
demand, it was accentuated this year by the decline in exports. Even  
though prices stabilized at the end of July, the current market situation  
is unstable on account of a new increase in supply in several Member  
States and uncertainty about export outlets. The difficulties of many  
producers could ease, however, if the recent drop in feed prices continues,
(1) Eggs in shell and egg products as eggs-in-shell equivalent.

5
Outlook_ 147 _
Despite the unsatisfactory market situation since May, layer chick  
placings showed an upward trend this svunmer in some Member States. In the  
short term, Community supply can therefore be expected to continue to  
expand slightly, with the risk of a fresh market crisis in the second  
quarter of next year.
In the medium term, a very prudent production policy should be pursued,  
principally on account of declining per capita consumption in the  
Community and the limitations of the world market. The world market's  
absorption capacity is actually decreasing as production units are being  
set up in importing countries.
Measures taken under the common organization of the market
(a) Sluicegate prices were raised after 1 August 1983, but were reduced on  
1 August 1984 in line with the trend in feed grain prices on the world  
market. Levies, which are based essentially on the difference between 
feed grain prices in the Community and on the world market, have  
followed a contrary trend.
(b) Refunds on eggs in shell, which had been cut several times between  
September 1983 and March 1984, were set at 15 ECU/100 kg on
21 September 1984 in view of the Community market situation.
Refunds on hatching eggs and egg products were adjusted in a similar  
manner on the same dates.
(c) On 1 July 1984, a Council Regulation amending certain marketing 
standards for eggs entered into force. The new provisions aim to  
improve consumer information by requiring that the packing period be  
clairly marked and allowing additional particulars to be given on  
small packs. However, detailed rules still have to be adopted by the  
Commission before information on the farming method and the origin of  
the eggs may be indicated on the pack.
(d) During 1984 the Council continued its examination of the Commission  
proposal for altering the coefficients and standard amounts for  
calculating the levies and sluicegate prices for eggs, but failed to  
reach an agreement.
Budgetary expenditure
Expenditure by the EAGGF Guarantee Section on eggs, all of which is for  
refunds, amounted to 30,4 million ECU in 1983 (0,2% of total guarantee  
expenditure). The figure entered in the 1984 budget is 33 million ECU and  
the estimate for 1985 is 36 million ECU.

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17. POULTRYMEAT
1. Introduction
The relative value of poultrymeat production is still fairly similar to  
that of eggs, i.e. together about 14% of livestock production and 8% of  
total agricultural production. The figures relating to poultrymeat are :
1981 1982
Poultrymeat/livestock products 7,8% 7,8%
Poultrymeat/total agricultural production 4,5% 4,4%
Poultrymeat production is still characterized by concentration and by  
various forms of vertical and horizontal integration. The degree of  
concentration, particularly in the chicken sector, is greater than in the  
egg sector, since in the northern countries of the EEC more than 90% of  
production is accounted for by holdings with more than 10.000 birds.  
However, concentration is less marked in France, Italy and Belgium, where  
traditional forms of production and marketing (roped chickens) are still  
fairly important. This is also true of Greece, which accounts for about 3%  
of Community production.
In 1983, with 14% of world production, the Community was, after the USA,  
the world's second largest producer not only of all poultrymeat but also of  
chickens and turkeys. It remains the largest exporter, ahead of Brazil,  
the USA and Hungary.
2. Production, consumption and trade
For the first time since 1973, total Community production (4,32 million t)  
decreased in 1983 by 2,6%. This decline took place in all the Member  
States except for Italy, Ireland, Denmark and Greece. It is continuing in  
1984, although at a slacker pace. The greatest reduction was in chicken  
production, which fell from 3,0 million t in 1982 to 2,88 million t in
1983. Because of falling demand for frozen chicken in Europe and keen  
competition on the world market, production had to be scaled down  
significantly in 1983, particularly in Germany, France and the  
Netherlands. As a result of this adjustment, supply in the Community has  
stabilized in 1984.
Turkey production (700.000 t per year), which rose by a further 4% in 1983,  
has dropped slightly in 1984 (-0,8%), mainly because of the reduction in  
Italy.
Exact figures cannot be given for the recent development of consumption, as  
the supply estimates have failed to take full account of the variations in  
poultrymeat stocks since 1982. Nevertheless it is likely that consumption  
per head increased by 100 g per year in 1983 and 1984, in view of healthy  
sales of fresh meat and new derived products (cuts and processed turkey  
products).

- 149 -
Intra-Community trade in slaughtered poultry increased in 1983, but there  
was no change in the case of live birds. The decline in deliveries to  
Germany was more than made good by the resumption of trade with the United 
Kingdom.
Exports to non-member countries in 1983 totalled 446.000 t, mainly chickens  
(410.000 t) for the Middle East and the USSR. This represents a slight  
increase (1%) over the previous year (1). Thus the Community was able to  
maintain its position on the world market, the overall volume of which  
remained fairly stable in 1983, following a sharp drop in 1982. During the  
first three months of 1984, however, demand on the world market slackened  
again. As a result, exports from all the exporting countries decreased.
As far as the Community is concerned, the loss of exports during the first  
eight months of 1984 probably amounted to 27%.
Imports represent 1,5% of consumption. They comprise mainly geese and  
ducks from East European countries (27.000 t in 1983). Imports of turkey  
meat including uncooked turkey preparations decreased in 1983 (by 1.000 t),  
as did those of other poultrymeat preparations, as a result of increased  
offer prices for the imported products. In 1984 there was a further drop  
in such imports, particularly from the USA.
3. Prices
The trend in chicken prices in 1983 still reflected the serious crisis on  
the market for frozen chickens, particularly in Germany, the Netherlands  
and Denmark.
Supplies were less plentiful in 1983, but it was not until the end of the  
year that prices responded and reached a satisfactory level, which has  
stabilized in 1984. Prices of fresh chickens and of other poultry, on the  
other hand, generally remained firm last year.
In 1983 consumer prices of chickens fell in Germany and the Netherlands,  
but rose slightly in the other Member States.
4. Outlook
As already mentioned in the previous report, Community poultrymeat  
production slowed down in 1983 for the first time since the common  
organization of the market was established. This is attributable to a drop  
in chicken production, which is not only feeling the effects of  
far-reaching changes in consumption patterns in Europe (preference for  
fresh chickens, cuts and preparations), but is also facing a decline in the  
medium term in world market demand. The need to adapt to these new market  
conditions justifies the cautious policy being pursued by the  
slaughterhouses, which seem to be expecting production to expand only  
slowly in 1985.
(1) The figures given here must not be confused with the data contained in  
Table M.17.3, as the latter have been calculated differently for the  
purposes of a consistent EUR 10 supply balance.
149

- 150 -
Although the general outlook for turkeys in 1983 was more optimistic,  
increased competition from other meats has made a less expansionist policy  
necessary in this sector as well in 1984. It seems unlikely that  
production will expand by much in 1985, except in Germany where demand  
seems to be picking up in a situation where consumption is below the  
Community average.
Measures taken under the common organization of the market
(a) Following the trend in feed grain prices on the world market,
sluice-gate prices were increased in August 1983 and reduced slightly  
on 1 August 1984. Levies, which reflect the difference between  
Community and world market prices for feed grain, followed the opposite  
course.
(b) In view of the Community market situation and the conditions of
competition on the world market, refunds for chickens were reduced on  
several occasions from 20 ECU/100 kg on 14 September 1983 to  
13 ECU/100 kg on 6 June 1984.
Budgetary expenditure
Being limited to refunds, expenditure by the EAGGF Guarantee Section on  
poultrymeat amounted to 92,9 million ECU in 1983 (equivalent to 0,6% of  
total EAGGF Guarantee Section expenditure).
Expenditure provisionally stands at 92 million ECU in 1984 and is estimated  
at 100 million ECU in 1985.

- 151 -
18. SILKWORMS
Silkworms· reared in Greece and Italy and on a small scale for research  
purposes in France, account for only a tiny part of Community agriculture and  
of world sericulture.
According to the FAO, world production of raw silk (including waste) in 1983  
was 67 000 t, compared with 65 000 t in 1982 and 67 000 t in 1981. Silkworm  
rearing is virtually an Asian monopoly (61 000 t): China (38 000 t) and Japan
(13 000 t) together account for 76% of world production.
Community production has been declining steadily in recent years since the  
rise in rearing costs is not adequately offset.
In 1983 only 5 460 boxes were used compared with 6 294 in 1982 (- 13%), 8 640  
in 1981 and 11 100 in 1980. Cocoon production was only 143 t, compared with
153 t in 1982, 224 t in 1981 and 308 t in 1980.
The situation has improved since 1983, particularly in Italy, where there has  
even been an upturn in silkworm rearing.
For 1984/85 the amount of aid was fixed at 107.59 ECU per box (95.20 ECU in  
Greece), compared with 106 ECU in 1983/84, a rise of 1.5%.
EAGGF guarantee spending on silkworms amounted to 0.6 million ECU in 1983.

- 152 -
19. SHEEPMEAT AND GOATMEAT
1. Introduction
Sheepmeat and goatmeat account for about 2% of the Community's final  
agricultural production. While sheep are raised on 600.000 farms in the  
Community, sheep numbers are concentrated in just four of the Member  
States. The United Kingdom containing 38%, France 19%, Italy 18% and Greece  
16% together make up 91% of the Community sheep flock. Sheepmeat accounts 
for about 20% by value of all meat production in Greece and about 13% each  
in the United Kingdom, France and Italy. For the Community as a whole the  
figure is about 4%.
The Community, with its output of about 730.000 t, is the world's second  
largest producer accounting for about 12% of its sheepmeat and goatmeat. It  
comes after the USSR (800.000 t) but before New Zealand (660.000 t),  
Australia (600.000 t), China (400.000 t) and Turkey (300.000 t).
The common organisation of the market in sheepmeat and goatmeat came into  
effect on 20 October 1980 (Regulation (EEC) No 1837/80 of 27 June 1980).
A report on the functioning of the common organisation of the market in  
sheepmeat and goatmeat (C0M(83) 585 final) was presented to the Council by  
the Commission on 31 October 1983.
2. Production
(a) Sheep and Goat Numbers
The number of sheep in the Community, which has risen almost without  
interruption since 1972 (1), reached 60,8 mio in December 1983  
including 41,4 mio ewes in 1983. The rate of increase, at 1,5%, was  
considerably lower than the 2,4% in 1982 but it varied somewhat between  
the Member States. Numbers fell by 2,2% in France but, apart from  
Luxembourg where they remained steady, rose in all other Member States.  
Denmark recorded a 6,8% increase, Ireland 4,7%, Germany 3,9%, Italy  
3,7% and the Netherlands 2,2% (2). Ewe numbers increased by 0,9% in  
1983 compared with 3,5% in 1982.
(1) The only exception was 1975. The annual rate of increase from 1973 to 1982  
was 1,7%.
(2) Belgium recorded a 44,6% increase in sheep numbers but much of this was  
owing to change in methodology of census.

-1 5 3-
Goat numbers reached 7,9 mio in December 1983, an increase of 11,1% on  
1982 (without significance, however, owing to a change in methodology  
of census in Greece).
(b) Production of sheepmeat and goatmeat
In 1983 production in the Community at 722.000 t was up 2,3% on 1982.
It dropped by 4,3% in France, rose by 10% in Germany, 7,1% in the  
United Kingdom and 1,7% in Greece, but was static elsewhere. The  
underlying trend in production is upward since 1970 and the annual rate  
of increase in it from 1973 to 1982 was 2,7%.
Consumption
Consumption in 1983 at 974.000 t was unchanged from 1982.
Average annual consumption per head in the Community in 1983 was 3,6 kg.  
Greece accounts for the heaviest consumption with 14,3 kg per head per  
year, followed by the United Kingdom 7,5 kg and Ireland 7,4 kg, France  
4,2 kg, BLEU with 1,8 kg and Italy 1,5 kg. Consumption is less than 1 kg  
per had in other Member States.
The long term trend in consumption is unchanged at Community level.  
However, the trend is downwards in both the United Kingdom (although there  
has been a tendency for this to level out since the establishment of the  
common organisation of the market) and Ireland, but upward in the other  
Member States.
Trade
(a) Non-Community countries
In 1983 imports into the Community amounted to 252.000 t, a decrease of  
10,5% on 1982. The main contributors to this drop were New Zealand,  
down 13,1% to 194.000 t, Argentina, down 14,9%, and Hungary, down 9,9%.  
On the other hand imports increased from Australia by 41,5%, Poland by  
27,6% and Bulgaria by 7,9%. Imports into Belgium were down 32,7%, the  
Netherlands 31,3%, the United Kingdom 17,8% and Italy 9,2%, but were up  
55,2% in Greece and 17,6% in Germany.

- 154-
Exports from the Community reached 4.500 t in 1983, a rise of 21,6% on 
1982. The United Kingdom increased its exports by 52,4% and now  
accounts for 75% of Community exports.
(b) Intra-Community
In 1983, intra-Community trade was 97.700 t. The United Kingdom, with  
49.800 t, supplied 51% while France, with 58.900 t, received 60% of the  
trade. The trade grew by 20,6% over 1982, the main growths being in  
United Kingdom, exports up from 37.600 to 49.800 t, the Netherlands  
(11.000 to 14.600 t), Germany (3.400 to 4.800 t) and BLEU (3.500 to
7.000 t). Exports from France and Ireland both fell by approximately  
500 t to 5.700 t and 14.600 t respectively.
Prices
(a) Institutional prices
For the 1984/85 marketing year :
- The basic price was fixed at 428,04 ECU/100 kg for the Community as a  
whole a drop of 1% on 1983/84.
- The intervention price was fixed at 363,83 ECU/100 kg (- 1%) and the  
derived intervention price (Ireland) at 344,32 ECU/100 kg.
- The adjustment of the regional reference prices was completed and  
from 1984/85 onwards the reference price becomes the basic price.
- The seasonal adjustment of the basic price has been changed to allow  
a better adaptation of the usual seasonal changes on the Community  
market to production costs. The scale of the seasonal variation is  
12% above and below the basic price. The minimum is in July, August  
and September instead of September and October, as has so far been  
the case.
(b) Market
In 1983 the average Community" market price remained unchanged from 1982  
at 369,699 ECU/100 kg. This represents a marked change from the  
increases of 4,3% in 1982 and 14,7% in 1981 respectively. There were,  
of course, appreciable differences in both price and rate of price  
change in the various Member States as follows:

-155-
Variation from National currency  
ECU/100 kg 1982 % variation from
1982 %
Germany 353,641 - 0,5 - 3,1
France 427,225 9,2 13,4
Italy 446,511 - 1,7 2,7
Netherlands 367,796 5,3 3,3
Belgium 423,165 2,9 8,0
United Kingdom 259,591 - 3,9 - 3,9
Ireland 342,855 3,4 6,7
Denmark 283,128 3,4 4,6
Greece 496,614 - 4,7 8,4
In 1983, as in each previous year since the introduction of the regime,  
there was no trend towards the alignment of prices between Great  
Britain and France as can be seen below:
1979 1980 1981 1982 1983 1984*
British price as percentage
of the French price 73 63 70 69 60 68
6. Outlook
The following can be expected for 1984.
(a) A further rise in the total number of sheep in the Community
To reach 61 mio head. This rise is likely to take place in certain  
Member States only and to differing extents. It is likely to be largest  
in the United Kingdom (1,6%) and Ireland (1,0%). However, in other  
Member States the number of sheep is expected to remain fairly steady.
(b) An increase in Community production (2,5%)
Increases in production in the United Kingdom principally, and also in  
France, are expected to result in a production level of 740.000 t in
1984. Production in other Member States should remain static.
(c) A moderate increase in Community consumption (1,4%)
(A rise of 14.000 t to 988.000 t). This is due to an expected increase  
in United Kingdom consumption of 2,9%.
* preliminary.

- 156-
(d) A decrease in the Community's deficit
The balance in recent years has been as follows:
Deficit (consumption  
less production) tSelf-sufficiency
%
1977
1978
1979
1980
1981
1982
1983
1984 (estimate)280.000
271.000
286.000
251.000
232.000
269.000
252.000
250.00068,9
70,2
69.4
75.0
75.1
72.4 
74,0 
74,7
(e) A fall in imports from non-Community countries
Under the voluntary restraint agreements with the Community, these  
countries may export to it a maximum of 321.790 t (1) of live animals 
and sheepmeat expressed as carcase weight equivalent. In 1984 the  
non—Community countries in Europe will be exporting amounts close to  
the agreed limits. On the other hand, Australia, Argentina, Uruguay and  
Chile will be well below the limits and New Zealand, the major  
supplier, is expected to export only 195.000 t of its 245.500 t quota.  
Total Community imports then are expected to drop by 7.000 t to
245.000 t in 1984.
(f) Little change in the average Community market price (+ 0,7%)
This is in line with the change in the Community basic price for  
1984/85 (- 1%). However, prices are likely to be up by 11,1% in  
Denmark, 7,7% in Great Britain due to changes in the seasonalised scale  
of the guide level, 3,9% in the Netherlands and by 2,7% in Greece while 
drops in price of 5,5% in Ireland and 4% in France, Germany and Italy  
are likely to occur. On this basis, the British price will reach 67,9%  
of the French price in 1984.
7. Supply balance for 1984
For 1984 the supply balance is estimated as follows:
(1) Including 2.290 t granted under the autonomous quota for non-Community  
countries which have not concluded such agreements.

-157-
Gross indigenous production  
Total consumption 
Consumption/production deficit  
Import/export deficit
- Imports from non-Community countries
- Exports to non-Community countries
- Changes in stocks - 10.000 t739.000 t
989.000 t
250.000 t
240.000 t
245.000 t
5.000 t
8. Economic aspects of measures taken under the common organisation of the ■  
market
(a) Variable premium (Great Britain only)
The total paid under the variable premium scheme in the 1983/84  
marketing year was 285 MECU, as against 236 MECU In 1982/83. This  
amounts to an arithmetic mean of 91,84 ECU/100 kg, an increase of 0,7%  
over the previous year and represents 35,08% of the average market  
price in Great Britain in 1983/84.
In the week beginning 18 July 1983, the premium reached its maximum of  
193,212 ECU/100 kg, thus equalling 111,9% of the market price in the  
same week!
(b) Ewe premium
In the 1983/84 marketing year premius were fixed for seven Member  
States and amounted in all to 220 MECU.
The amount of the premium per ewe and the increase on the previous year  
was as follows:
Premium, ECU per ewe % increase on 1982/83
Denmark
Netherlands
Luxembourg
Great Britain  
Northern IrelandBelgium
Germany
Ireland 18,092
11,007
23,57415,-971 —13,642
20,305
22,500
24,95591
52
30
32
52
70
149
52

-158-
The principal beneficiaries of the ewe premium were the United Kingdom  
167 MECU, Ireland 35 MECU and Germany 11 MECU. By way of comparison,  
the amount granted in 1982/83 was 100 MECU, of which the United Kingdom  
received 67 MECU and Ireland 19 MECU.
On these bases the total cost of premiums (ewe premiums and variable  
premium) can be summarised as follows:
1982/83 307,4 MECU
1983/84 480 MECU.
The variable premium clawback (1) on exports from Great Britain have  
been deducted from these totals.
For the 1984/85 marketing year,  the level of expenditure on both premia  
will be affected by changes in them arising from Council decisions on  
the 1984/85 price package. These changes can be summarised briefly as:
Variable premium^ The changes in the seasonalised basic price and,  
hence, the guide level reduce the possibility of high levels of  
variable premium payments during the mid—summer period.
Ewe premium: The premium is now payable only on the loss of revenue  
incurred in the production of lamb and not on all sheepmeat as  
hitherto. This represents a saving of 15% on the level of ewe premium.
(c) Refunds
No refunds in 1983 or 1984. The Community has not in any case adopted  
implementing rules as yet.
(d) Management of the voluntary restraint agreements
The mechanisms provided for in these agreements operated normally in  
1984.
(e) Intervention
No intervention in 1983 or 1984. Market prices in France, the only  
Member State where the possibility of intervention buying is agreed  
1984/85, were above the intervention price.
(1) Clawback amounts: 1982/83, 28,7 MECU; 1983/84, 25 MECU.

-  159 -
20.a. ALCOHOL
Introduction
Not only is there no market organization for agricultural alcohol, but also  
the sector is being increasingly disrupted.
Production
Production of agricultural alcohol in the Community in 1983 (or the 1982/83  
marketing year) shows slight fluctuations everywhere except France and Italy.  
In these two Member States, production of vinous alcohol shows a very  
substantial increase (from 1 443 000 to 3 789 000 hi).
Consumption
The trend seen last year continues: consumption tending to level out as  
purchasing power in the Community is stagnating.
Prices
Prices are becoming more and more erratic.
Sales of French alcohol at low prices are destabilizing the markets of the  
other Member States.
Trade
Trade consists mainly of exports of French agricultural alcohol to the other  
Member States and synthetic alcohol produced in the United Kingdom being sent  
to the other Member States.
Outlook
In the absence of a common will to establish a common market organization, the  
Commission will have to take steps to put an end to the disturbances.
Expenditure
Still for the record, but it should to be borne in mind that the cost of  
producing vinous alcohol is continuing to increase dangerously.

- 160 -
20b. POTATOES
1. Introduction
There is no common organization of the market for potatoes. However a  
proposal was presented by the Commission to the Council on 23 January 1976  
covering the whole range of fresh and processed products.
It provides for:
— marketing standards;
- measures to encourage the formation of producer groups;
— the support measures required to keep the market stable;
- a system of trade with non-member countries incorporating a reference 
price system for new potatoes.
Products such as potato starch1,  dehydrated potatoes2 and products  
processed from potatoes3 are already subject to a common organization.
The marketing of seed potatoes is subject to a Council Directive .
2. Production
According to FAO statistics, the world harvest in 1982 was 254 861 000 t.  
Community production, at 28 270 000 t in 1983, accounts for about 11% of  
the world total. The average yield per hectare in the EEC is almost  
double the world average.
The value of potato production represented % of the value of final  
agricultural production in the Community. According to 1982 EEC  
statistics, about 1.8 million holdings (in the enlarged Community) grow  
potatoes. At national level the production structure is very variable,  
the average crop area per farm being 3.8 ha in the Netherlands, 0.4 ha in  
France and 0.3 ha in Italy.
1  Regulation (EEC) No 2727/75, 29.10.1975, OJ L 281, 1.11.1975.
2 Council Regulation (EEC) No 1117/78, 22. 5.1978, OJ L 142, 30. 5.1978.
3 Council Regulation (EEC) No 516/77, 14. 3.1977, OJ L 73, 21. 3.1977.
4 Consolidated version of the Council Directive of 14. 6.1966, OJ C 66,
8.6.1974, p. 35.

- 161 -
Since 1951—55 the total area under potatoes in the EEC has dropped by about  
69%: from 3 512 000 ha in 1951-55 to 1 073 000 ha in 1983. Because of
the increase in yields per hectare, however, production has fallen by only  
54% (from 61 957 000 t in 1951-55 to 28 270 000 t in 1982). There was a  
shortage in 1983, however.
The Community is basically self-sufficient but there have been supply  
problems following very dry years.
The area under new potatoes was smaller in 1983 (105 000 ha, as against  
120 000 ha in 1982), but production remained over 2 million t. There  
continues to be a shortfall, about 380 000 t being imported into the  
Community every year.
The area under seed potatoes in the EEC remained at around 100 000 ha in  
1983. About 2,6 million t were harvested, mainly in the Netherlands, the  
United Kingdom, France and Germany.
Processed products (crisps, instant potato, chips, etc.) are also important  
in the potato sector. About 4 million t of fresh potatoes are processed  
annually in the EEC. Some varieties are particularly suited to processing  
and are grown mainly under contracts between farmers and the processing  
industry. Development has been very rapid and conditions are right for  
the further expansion of some products in the near future.
.  Consumption
Potatoes are used mainly unprocessed as foodstuffs and to a lesser extent  
for feeding animals. The quantities turned by the processing industry  
into products for human consumption represent about 20% of total human  
consumption.
(a) Human consumption
Per capita consumption of unprocessed potatoes is more or less  
stationary. After a sharp drop in 1976/77 as result of the shortage  
caused by the drought in 1976 (69.1 kg per head) it climbed to 76.4 kg  
in 1979/80 but fell back to 75.8 kg in 1980/81 and then fell still  
further to 74.6 kg in 1981/82; in 1982/83 it was 76.2 kg per head.

-  1 b d  -
(b) Animal consumption
The quantity fed to livestock ranges from about 3 million t to about 
7 million t, depending on the volume of the harvest. In 1982/83 it  
was 3 857 000 t: 1 936 000 t in Germany; 195 000 t in France;
190 000 t in Italy; 337 000 t in the Netherlands; 559 000 t in the  
United Kingdom; 154 000 t in Ireland, etc.
(c) Products processed for human consumption
Consumption of products processed from potatoes (about 4 million t in  
1979) continues to increase.
Consumption of certain products such as deep-frozen pre-cooked products  
should increase still further, particularly when the current economic  
situation starts to look up.
Trade
Intra-Community trade in ware and seed potatoes absorbs only 8 to 10% of  
total production, although for new potatoes the figure is around 70%. The  
net exporters are the Netherlands, France and Ireland. The United Kingdom  
exports seed potatoes and imports new potatoes. Italy exports new  
potatoes and imports seed potatoes and ware potatoes. Denmark and the  
BLEU also have a large-scale import-export trade.
The structure of Community trade in processed products is similar to that  
of trade in unprocessed products. The Netherlands and France are  
exporting countries and the others are importers.
Trade with non-EEC countries is mainly in seed potatoes and new potatoes.  
Seed potatoes are exported to South America, Africa and Asia and new  
potatoes are imported from the countries round the Mediterranean.
Prices
Prices are very unstable, varying from year to year. Because of the^  
inelasticity of demand, plentiful harvests—tend to force down prices.  
Prices may also be affected by other factors such as the weather or  
unexpected exports to countries with shortages.

-  163 _
In 1983, the harvest was the poorest ever recorded in the EEC. The 1983/84  
marketing year thus began with prices substantially higher than the  
previous year: at Rotterdam, 16.13 ECU/100 kg on 26 September 1983 for  
Bintje + 50 mm (6.69 in 1982); at Arras, 12.66 ECU/100 kg for Bintje  
+ 40 mm (7.48 in 1982). Throughout the autumn and early winter prices rose  
steadily and, after Christmas, on 9 January 1984, prices were as follows:  
at Rotterdam, 24.15 ECU/100 kg for Bintje + 50 mm (7.12 in 1983); at  
Arras, 19.35 ECU/100 kg for Bintje + 40 mm (7.55 in 1983). During the  
winter the price rise continued, and the marketing year ended with very  
high prices: at Rotterdam, 39.59 ECU/100 kg on 29 May 1984 for Bintje  
+ 50 mm (15.44 in 1983); at Arras, the last quotations date from 8 May 
1984: 29.82 ECU/100 kg for Bintje + 40 mm (6.62 in 1983).
The high prices for ware potatoes also led to new potatoes being sold at  
higher prices than in 1983. The price trend in 1984 once again confirmed  
the close correlation between ware potatoes and new potatoes.
6. Outlook
The 1983/84 marketing year was therefore a year of very modest production,  
satisfactory exports and high producer and selling prices. Provisional  
figures indicate, however, that the area under potatoes in 1984 is little  
different from 1983 (about 1 110 000 ha in 1984, as compared with 
1 073 000 ha in 1983).
The situation as regards the harvest is different from last year. Most  
areas of the Community had rain in the summer, and production appears to be  
nrmal.
Prices on the Rotterdam market started at substantially lower levels than  
in 1983: on 3 September, 8.41 ECU/100 kg (20.59 ECU in 1983) for Bintje  
+50 mm; at Arras, for Bintje + 35 mm, the price was 8.15 ECU/100 kg (16.73  
in 1983).
7. Economic aspects
On account of the high prices, no support measures were taken in the Member 
Sates last year.

-  164-
20.c. HONEY
Introduction
There is no common organization of the market in honey. The only general  
charge on imports is a 27% customs duty, which is reduced to 25% for most 
developing countries and Malta, 10,8% for Turkey and nil for ACP  
countries. The 38 least advanced developing countries are exempted from 
customs duties.
Production, consumption and trade
In 1982/83 the Community produced 55.000 t of honey and imported
112.000 t. Germany, France and Greece were responsible for 80% of  
production. Consumption, which exceeds 1 kg per head per year in only 
three countries (Germany, Greece and Denmark), fell slightly in 1982/83 in  
some Member States, including Germany.
The Community is only 35% self-sufficient, but the situation varies widely  
among the Member States. Greece is the only 100% self-sufficient  
country. France increases its degree of self-sufficiency by applying a  
licensing system to imports from certain countries and, like Italy, the  
applying bilateral quotas in trade with state-trading countries.
Germany is the biggest importer (60% of the Ten's imports), followed by  
the United Kingdom (18%). Imports are mainly from Latin America (1983.  
Mexico 25.700 t, Argentina 11.500 t), China (25.600 t), East European  
countries (18.000 t) and Australia (8.700 t).
"Common measures" to assist bee-keeping
The aid scheme for bee-keeping introduced by Council Regulation (EEC) No  
1196/81 consists of a specific contribution to associations of bee-keepers  
recognized by the Member States which has been fixed at 1 ECU per  
marketing year per hive in production. Associations can use the aid to  
purchase feeding sugar and for general programmes for improving honey 
production, technology and marketing. The aid scheme covered three  
marketing years; 1981/82, 1982/83 and 1983/84.
EAGGF guarantee expenditure totalled 2 million ECU in 1981, 4,5 million  
ECU in 1982 and 4,4 million ECU in 1983 and is estimated at 1 million ECU  
in 1984. Most of the aid has been used by associations to buy feeding  
sugar and it is only in France that over half of the aid received has been  
used for the general programmes referred to above.

_ 165 _
With the aim of combating a bee disease threatening the whole of Europe,  
the Council amended the above-mentioned Regulation in July 1983 by 
providing additional financing for a research programme on varroasis to be  
carried out at European level. In 1984 the Commission awarded research  
contracts to 12 institutes for a total of 279.000 ECU. It also envisages  
continuing research into this disease under the five-year programme on the  
coordination of agricultural research.

-  166  ~
21. FEEDINGSTUFFS
Supply and consumption of raw materials for feedingstuffs In 1983
In 1983 the composition of compound feedstuffs changed considerably on the  
reason of 3 factors :
(1) Due to bad weather conditions, the harvest on maize and soyabeans  
combined with several production reduced programmes in US CPIK)  
decreased considerably, which led to high export prices for those  
products.
(2) At the same time, producer prices for manioc, mainly in Thailand,  
reached their peak level, which led to so high export prices that the  
classical mixture soya-manioc was of reduced interest for compound
feeders.
(3) Due to the big offer on wheat all over the world, wheat was  
incorporated in feedstuffs in bigger quantities than before in the US,  
Scandinavian countries and the Community, replacing soya, manioc, maize  
and barley. In the Community, 21 mio t of wheat i.e. 6 mio t more than  
in the previous season, were used as feedstuffs in compound feed.
On this reason, the upward tendency in the imports of so-called cereal  
substitutes slackened down.
In the case of manioc, the imports (4,5 mio t) reached not even the  
provided import quotas from Thailand or other exporting countries as  
Indonesia, China, etc. due to lack of supply.
Only the upward tendency for the imports of corn-gluten feed remained  
unchanged (3,56 mio t in 1983).
.  Short term outlook
According to FAO's forecast world production of cereal_s in 1984 is now put  
at 1.763 mio t, 129 mio t or 8% more than in 1983. The most significant  
change has been the estimates for the Community, following the conclusion  
of bumper harvests (147 mio t in 1984 against 123 mio t in 1983).

_ 167 _
The output for the cereal harvest in Eastern Europe is estimated at  
91 mio t against 85 mio t last year.
The US cereal harvest is put at 310 mio t, 103 mio t more than the poor  
harvest in 1983, when acreage reductions under government programmes and  
unfavourable weather reduced the crop.
In the USSR, the total grain harvest, including rice and pulses, is now put  
at 180 mio t, 10 mio t less than last year.
World cereal production, see Table 1 below:
Table 1
WORLD CEREAL PRODUCTION
mio tonnes
1982 1983
estim.1984 
f'cast
Wheat 485 496 510
Coarse grains 792 688 797
Rice (paddy) 423 450 456
TOTAL 1.700 1.634 1.763
Source:  FAO, Food Outlook, October 1984
World production of coarse grains in 1984 is with 797 mio t, 109 mio t more  
than in 1983.
For the Community, the estimate of coarse grain output has been put at  
70 mio t, 6 mio t higher than in 1983.
Coarse grain production in the United States will be 233 mio t.
For the USSR, FAO's estimate of coarse grain output has been put at  
90 mio t, compared with 101 mio t in 1983.
World trade in wheat and coarse grains during the 1984/85 season  
(July-June) is forecast at 194 mio t, 4 mio t larger than last year but  
8 mio t below the peak reached in 1981/82. The increase is entirely due to  
larger imports by the USSR. These are currently forecast at 43 mio t,
11 mio t more than last year and the second largest on record.

_ 168 _
Aggregate imports of wheat and coarse into the developing countries in  
1984/85 are currently estimated at 96 mio t, almost 3 mio t less than last  
year. However, imports into the low-income food-deficit countries are 
expected to increase by 1 mio t or 5% in 1984/85.
Imports into other countries, mainly Western European countries, are  
expected to decline as some substitution of coarse grains by lower—priced  
feed wheat is likely.
World wheat and coarse grain imports, see Table 2 below:
Table 2
WORLD WHEAT AND COARSE GRAIN IMPORTS
mio tonnes
1982/ 1983/84 1984/85 :
1983 prelim. f'cast :
:  Wheat 97 100 99 :
:  Coarse grains 88 90 95 :
:  TOTAL 185 190 194 :
:  Developing countries 96 99 96 :
:  Developed countries 89 91 98 :
Source: FAO, Food Outlook, October 1984
Given the current 1984 production forecasts and taking account of an  
expected increase in global consumption, world cereal stocks are expected  
to rise during 1984/85. They are forecast to increase by 25 mio t to  
287 mio t by the end of 1984/85, reflecting mainly the rise in holdings of  
coarse grains, which had previously been depleted. Carry-over stocks of  
coarse grains are now forecast to rise from 89 mio to 105 mio t. Global  
stocks of wheat are also forecast to rise for the fourth year in  
succession, from 130 mio t to 137 mio t, reflecting increased output and  
larger stocks in a number of important producing countries.
The increase of carry-over stocks in cereals will be in both developed and  
developing countries. In the developed countries the additional  
accumulation of stocks is expected to be largely confined to the EEC and 
the United States. Stocks in Canada and Australia are expected to fall.

-  169 -
World carry-over stocks of cereals, see Table 3 below:
Table 3
WORLD CARRY-OVER STOCKS OF CEREALS
mio tonnes
Crop years ending in:
1984 1985
1983 estim. f'cast
Wheat 120 130 137
Coarse grains 161 89 105
Rice (milled) 43 43 45
TOTAL 325 262 287
of which
main exporters 201 125 142
others 124 137 145
Source:  FAO, Food Outlook, October 1984

-  170 -
22. MEAT
Introduction
In 1982 production of all types of meat accounted for 34% of final  
agricultural output and was thus the Community's major agricultural  
activity. Its importance is underlined by the fact that 60% of the  
cereals used are fed to animals, mainly for the production of meat, while  
only 25% go to human consumption.
On the world scale, the Community accounts for about one sixth of total  
meat production, occupying third place among the world's leading meat  
producers, just behind China and the USA.
Production
After declining in 1982, gross Community production of meat (all types,  
including edible offal) went up by 2.1% in 1983 to a volume 1.6% greater  
than the average (24.1 million t) for the three previous years.
This was due in the main to a cyclical increase in production of 3.7% for  
beef/veal and 3.2% for pigmeat, and also to a 2.3% rise in sheepmeat  
production. Poultrymeat production on the other hand was down, for the  
first time since 1973, the drop of 2.6% resulting from adjustment to lower  
demand for frozen chicken in the Community and strong competition in the  
world market.
For 1984 it can be expected that total gross Community production will  
continue to increase, by roughly 2%, with beef/veal and sheepmeat  
production rising by 2.5% to 4% and pigmeat slightly up also, by 1X-1.5X,  
but with a drop for poultrymeat of 0.5%. As far as beef/veal is concerned  
there should be a cyclical increase in supply accentuated by large-scale 
slaughtering of females as a consequence of the measures taken at the end  
of March to limit milk production. Sheepmeat production is expected to  
increase particularly in the United Kingdom. Pigmeat supplies, which  
increased still further in the first half of the year, are now showing a  
downward trend. In the first half poultrymeat also showed a slackening
of f.
Consumption
After a steady increase in meat consumption up to an EEC average of almost 
90 kg per head, 1981 was the first year showing a drop of more than 1 kg.  
This reduction was observed in nearly all Member States (with the  
exception of the Netherlands and Greece) as a consequence of the economic 
recession. In 1982 per capita consumption stock at the same level but  
revived slightly in 1983.

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Through continuing to drop in France it has increased in Italy, Germany,  
the United Kingdom and Denmark. It is only in Italy, however, that the  
high level of 1980 has been exceeded. The 100 g rise in average Community  
consumption in 1982 was due mainly to a 10% increase in per capita  
consumption in Greece.
As far as the different types of meat are concerned it seems that the  
economic recession has had a harmful effect above all on beef/veal and to  
a lesser degree on sheepmeat consumption.
For the period 1981 to 1983 per capita intake of both was below the level  
of 10 years previously.
On the other hand, pigmeat and poultrymeat increased their share of total  
meat consumption (including offal) still further to 58.8% in 1983.
The trend of consumption will be above all dependent on the recovery of  
the economy, since this will set the trend of consumer incomes, and on the  
relative prices of the various types of meat. To judge from the estimates  
at present available total consumption may well increase in 1984 and
1985. In 1984 the rate of growth will be between 0.5% and 1% for pig- and  
poultrymeat and should be even higher for sheepmeat and beff/veal in view  
of the pronounced drop market prices for the latter.
4. Trade
Intra-Community trade in the various types of meat depends primarily on  
the differences in self-sufficiency between the individual Member States  
and thus varies according to their respective degrees of concentration of  
production and/or consumption. Intra-Community trade is more important in  
pigmeat and beef/veal (20% of total Community consumption) than in  
sheepmeat (10%) and poultry (9%).
Whereas for beef/veal and pigmeat the higher figure indicated more uniform  
levels of consumption (beef/veal: 23-33 kg in all the big countries)  
and/or some specialization in production of specific types of meat (bacon,  
store cattle, high quality beef), for sheepmeat as well as for poultrymeat  
there is a high production level in the main consuming countries.
After 20 years of growth from the establishment of the EEC,  
intra—Community trade is, generally speaking, slackening off at about one  
sixth of total consumption. This follows a period of more rapid expansion  
after the 1973 enlargement.

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Regard ing trade with non-member countries, recent years have shown a  
steady tendency to a fairly balanced situation, with the EEC becoming a  
net meat exporter for the first time in 1981. This was due to rising  
exports of poultrymeat, stable pigmeat exports, the appearance of  
beef/veal surpluses in 1980/81 and a simultaneous drop in sheepmeat and 
horsemeat imports.
1982 shows a more or less balanced situation for all meat (excluding  
offal), as a result of lower exports of all main types, in particular  
beef/veal and higher imports of beef/veal and sheepmeat. For 1983 and 
1984 a tendency to somewhat higher net export figures can be observed in  
the beef/veal and pigmeat sector. Poultrymeat exports are in retreat in  
1984.
It has to emphasized, however, that the EEC has not only become a major  
exporter of poultrymeat, beef/veal and pigmeat, opening up new markets in  
the Middle East (poultrymeat, beef/veal) and the Far East (pigmeat), but 
is now also supplying poultrymeat, pigmeat and beef/veal to areas with a  
stockrearing tradition that as a result of agro-economic difficulties are  
now dependent on supplies from abroad. It still holds true that the EEC  
is also amongst the biggest world importers for both beef/veal and  
sheepmeat, having concluded for these products a number of preferential  
agreements not only with industrialized countries like Australia and  
New·Zealand, but also with developing countries in Africa and  
South America.

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23. OILS AND FATS
1. Introduction
The oils and fats sector includes :
- vegetable oils and fats which, in view of the structural differences of  
the market, must be subdivided into olive oil and other oils;
- oils and fats of land animals which must also be subdivided into butter  
on the one hand and lard and tallow on the other;
- oils and fats of sea creatures.
The above oils and fats are the basic raw material but may be consumed in  
their unprocessed state or as prepared oils and fats, such as margarine;  
they may be used as animal feedingstuffs,  for human consumption or for  
technical purposes. They may be incorporated in other products. The  
various basic products can also replace one another to a large extent,  
depending on their ultimate use. The form of ultimate use varies  
considerably in the Community. For example, oils and fats are consumed  
principally in the form of butter and margarine in the northern countries,  
whereas in France and Italy liquid vegetable oils account for the largest  
share in the consumption of oils and fats.
The proportions of the various categories in total human consumption vary  
only slightly from year to year. The table below shows the quantities of  
the different categories of oils and fats consumed in 1982 and the  
proportion of each category in relation to total consumption.
Apparent human consumption of each category of oils and fats in terms of  
quantity and as a percentage of total human consumptionTable I
Community of Ten 1982
Quantity (1000 t) (% )
1. Vegetable oils and fats
2. Oils and fats of land animals
3. Oils and fats of sea creatures
4. Butter4.216
1.350
434
1.36057
18
6
19
TOTAL 7.360 100
Source :  EUROSTAT

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Different policies are applied for each category of product in the  
Community. In the vegetable oils sector, all oilseeds can enter the  
Community duty-free. Oils are subject to duties ranging from 10% to 15% 
but lower rates of duty or zero rating are applied to imports of oils from  
associate countries, which account for up to 70% of oils imported as such.
The prices of vegetable oils in the Community tend, therefore, to be at  
world market levels, except in the case of olive oil. Similarly, oils and 
fats of sea creatures and land animals are subject to relatively low import  
duties. In the case of butter, lard for human consumption and olive oil,  
however, support prices are fixed in the Community and imports are subject 
to a levy. This diversity of policies for the various products, which are  
naturally interchangeable, obviously affects consumption.
Production
The factors determining production of the different groups of oils and fats  
in the Community vary for each category.
Soya accounted for about 67% of the quantity of oilseeds crushed in the  
Community in 1983. It is processed mainly into oilcake, which accounts for  
80% of its volume. Soya oil is a secondary product which, with 1.450.000 t  
consumed in 1983, accounts for not less than 25% of Community vegetable oil  
requirements. Of our consumption of vegetable oils, 48% comes from other 
oilseeds crushed in the Community, the remainder being imported in the form  
of oil. Of the total quantity of seeds crushed (15.580.000 t) in 1983,  
about 24% were of Community origin.
According to Fediol statistics, the production of vegetable oils in the  
EEC, not including olive oil, was 3.959.000 t in 1983.
Production of olive oil is normally between 700.000 t and 900.000 t per  
year in the Community of Ten. Since olive trees are perennials, production  
does not depend on demand, but principally on weather conditions.
Production of oils and fats of land animals - mainly lard and tallow - is  
almost 1.700.000 t per year. These fats are a by-product of slaughtering,  
and consequently in this category production is determined principally by  
animal numbers and the demand for meat.
Production of oils and fats of sea creatures is carried on principally in  
Denmark, although the United Kingdom and Germany also contribute to  
Community production, which was about 116.000 t in 1983.
Production of butter reflects the level of milk production in the Community  
and the degree of surplus production. Butter being one of the products  
accepted for intervention. The EEC is more than self-sufficient in butter, 
demand for which is stagnating or falling. The quantity of butter produced  
in 1983 was 2.263.000 t as against 2.050.000 t in 1982.

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3. Consumption
The level of consumption of oils and fats in the Community is determined,  
as elsewhere, by the following factors :
~ absolute population level and rate of growth;
~ absolute level of incomes and income trend;
- price and availability of the product;
- level of consumption reached.
In the Community the population is increasing slowly. The level of  
economic development, although high compared with a large part of the  
world, has been relatively stagnant in recent years.
Per capita consumption of oils and fats (with the exception of butter)  
decreased from 28 kg per head in 1977 to 23 kg per head in 1982
Apparent human consumption of oils and fats of land animals has remained  
fairly stable at around 7,5 kg/head since 1975. Consumption of oils and  
fats of sea creatures appears to have increased from 458.000 t in 1977 to
590.000 t in 1983.
■pie Community produces more butter than it consumes. Nevertheless, it  
imports around 90.000 t per year as a result of international commitments  
entered into by the Community in 1973 with New Zealand.
Butter is exported partly as food aid and partly at world market prices,  
with the exporter in the latter case receiving a refund. Exports have  
declined over the last three years from 530.000 t in 1981 to 355.000 t in  
1983.
5. Prices
As stated above, prices in the oils and fats sector show a tendency to  
remain at the world market level for all products except olive oil and  
butter, for which prices are fixed in the Community.
The table below gives the price of soya oil as compared to prices for  
vegetable oils, lard, tallow and oils of sea creatures. The price of soya  
oil tends to dictate the trend for the other products.

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Table II
Selected oil prices (average Sept/Oct) (US$/t)
1978/79 1979/80 1980/81 1981/82 1982/83 1983/8A ;
(Netherlands, FOB ex min) 654 613 540 463 463 722
Lard (CIF UK) 705 671 601 601 504 555
(United States CIF Rotterdam) 592 503 474 443 408 509
Fish oil
(cÎf E u r o p e )  448 « 9  427 363 349 391
Source :  "Oil world"