No C 112/34 Official Journal of the European Communities ' 7. 5. 90 
the findings of the Opinion on increasing the use of 
agricultural and forestry resources in the non-food industrial and energy sectors: prospects opened up by 
research and technological innovation. 
Done at Brussels, 28 February 1990. 
The Chairman 
of the Economic and Social Committee 
Alberto MASPRONE 
Opinion on the Commission proposals on the prices for agricultural products and on related 
measures (1990/1991) (*) 
(90/C 112/14) 
On 16 January 1990 the Council decided to consult the Economic and Social Committee, 
under Article 198 of the Treaty establishing the European Economic Community, on the 
abovementioned Commission proposals. 
The Section for Agriculture and Fisheries, which was responsible for preparing the Com­
mittee's work on the subject, adopted its Opinion on 21 February 1990. The rapporteur was 
Mr Fresi. 
At its 274th plenary session (meeting of 1 March 1990) the Economic and Social Committee 
adopted the following Opinion by 72 votes to 8 with 5 abstentions. 
1. Preliminary comments 
1.1. In presenting its farm price proposals to the 
Council, the Commission stresses that: 
'prices and incomes confirm a generally very satis­
factory trend for Community agriculture' (!) 
and that 
'the measures adopted in recent years in the context 
of the reform of the common agricultural policy 
(quotas, stabilizers, ...) have started to produce 
results' I1). 
Drops in production and in stocks held by intervention 
agencies have been accompanied by rises in producer 
prices. Hence, in the Commission's view: 
'The main thrust of the 1990/1991 price proposals 
is to continue the current trend in prices and to 
strengthen the action in favour of the structurally 
weaker family farms, especially in the less favoured 
areas' (*). 
(!) OJ No C 49, 28. 2. 1990. 1.2. The Commission thus considers that: 
'for the great majority of products it is desirable 
to propose the continued application of 1989/1990 
prices, subject to the effects of the application of 
the stabilizer mechanisms. The few exceptions to 
this rule concern sectors in which a very specific 
market situation applies'^). 
1.3. The Commission's aim is to continue a policy 
aimed at balancing supply and demand while encourag­
ing Community farmers in their efforts towards ration­
alization. Such a path is vital, in the Commission's 
view, if Community agriculture is to remain viable in 
an increasingly competitive international context. The 
Commission goes on: 
'It is necessary therefore, to continue and to acceler­
ate the efforts which are being made to improve the 
competitivity of Community agriculture. This is the 
objective of a price policy which remains close to 
market realities and a socio-structural policy which 
is endowed with greater resources and is better 
adapted to a Community reality which involves 
great differences at regional level' (!). 
7. 5. 90 Official Journal of the European Communities No C 112/35 
2. General comments 
2.1. The Committee endorses the plan to rationalize 
Community agriculture further and target farm spend­
ing more strictly. This will create an integrated agri-
food network which is more competitive inter­
nationally, and improve market balance whilst also 
(a) making full use of the Community's natural 
resources—with the attendant benefits; (b) helping to 
improve the balance between production areas; (c) pre­
venting desertification of the countryside and the 
decline of rural areas; and (d) guaranteeing a fair 
income for the farming population, and reasonable 
prices for consumers. 
2.1.1. At the same time, the Committee notes that 
the aim of using financial resources and production 
potential rationally and strictly is being pursued, with 
due respect for the aims of the Treaty and agricultural 
legislation, in order to provide a better guarantee of 
the future of the common agricultural policy (CAP). 
2.2. The Committee notes that the Commission's 
proposal to lower prices in some cases and to continue 
1989/1990 prices in others—subject to the impact of 
stabilizers and with a few exceptions—seeks to make 
price policy increasingly restrictive and increasingly 
aligned with current international prices. 
2.3. The 1990/1991 proposals involve many signifi­
cant cuts in real prices which are not fully justified either 
by the situation on Community and world markets or 
by budget requirements, nor taking account of the 
increase in production costs and in inflation. 
2.3.1. The Committee would point out that the avail­
ability of certain staple products and the cuts in pro­
duction being sought by applying stabilizers and other 
agricultural policy measures must be reviewed in the 
light of the likelihood of food aid and food supplies 
being needed in the short term because of international 
developments, particularly in Eastern Europe. 
2.3.1.1. Furthermore, the consequent drop in EC 
production could lead to problems if emergency food 
aid were required abroad. 
2.4. Excessive reductions in support and external 
protection for Community agriculture will considerably 
increase the size of the disadvantaged regions. They will put serious pressure on farm incomes, and will 
mean fully subsidized agriculture throughout 50% or 
more of the Community. 
2.4.1. Such reductions in support and external pro­
tection would, under present circumstances, also seem 
ill-advised if the Community's negotiating position is 
not to weakened. 
2.5. With reference to the General Agreement on 
Tariffs and Trade (GATT) negotiations, the Committee 
would recall the conclusions of the Brussels European 
Council of 11 and 12 February 1988, which called on 
the Commission: 
'to ensure, in the context of the Uruguay Round 
and having regard to the provisions of the GATT, 
that the Community's measures with respect to 
prices and quantities are given due consideration, 
and to press for an appropriate solution to the 
problems arising in connection with imports of cere­
al substitutes, oilseeds and protein plants into the 
Community'. 
The Council also stated: 
'It considers that the arrangements in force since 
1984, and those it is adopting to control production 
and agricultural expenditure, meet these commit­
ments and will achieve their full effect only if other 
world producers apply equivalent discipline' (1). 
2.5.1. The Committee is to draw up an Opinion 
which will examine the problems raised here. 
2.6. The Committee cannot support the idea of align­
ing Community prices on the prices currently charged 
on the international market. This would mean subordi­
nating Community interests to a residual world market 
on which only marginal quantities of products are 
traded. 
2.6.1. Prices should instead take account of the need 
to cover production costs and (at least to some appreci­
able extent) of the income expectations of farmers. 
2.7. The Committee also cannot support the thesis 
that agriculture should no longer be able to count on 
prices as an essential element to ensure its economic 
viability. 
2.7.1. Acceptance of this idea would make it necess­
ary to introduce more intervention instruments, and 
increase direct production aid or income support. This 
(*) Brussels European Council (Overall compromise, Annex I 
and Annex II, SN/517/88). 
No C 112/36 Official Journal of the European Communities 7. 5. 90 
would place a further burden on the Community budget 
without guaranteeing a proper response to all eventu­
alities, and would mean a significant increase in man­
agement problems and red tape. 
2.7.2. This would run counter to the principle of 
financial solidarity, and would jeopardize the goal of 
economic and social cohesion enshrined in the Single 
Act. 
2.8. For all these reasons, the Committee considers 
that the aim of a reasonable policy on prices and 
related measures must be to avoid the re-appearance of 
unmarketable production surpluses. Intervention must 
be'used solely as a safety net in cases of market imbal­
ance caused by the weather or by exceptional levels of 
production. 
2.9. The minimum quality criteria for products eli­
gible for intervention should be precisely defined in 
order to prevent the accumulation of poor-quality prod­
ucts which are often difficult to market. 
2.10. The CAP must offer a battery of appropriate 
instruments which will improve production, processing 
and marketing structures. Assistance should focus on 
regions with fragile structures and low incomes. 
Account should also be taken of the additional costs 
faced by producers in disadvantaged areas because of 
natural or structural disadvantages, or for more general 
environmental and social reasons. 
2.11. Special attention must also be devoted to pro­
ducers in upland and disadvantaged areas where no 
alternative production is economically viable and farms 
are often small. In such cases, support should take the 
form of direct production aid or income support. 
2.12. It is worth recalling here the comments made 
in the Committee's Opinion on the future of rural 
society (point 3.1.1) (l): 
'After the limitation of agricultural expenditure, 
action to safeguard incomes and improve agricul­
tural structures must not be forgotten in the reorien­
tation of the CAP and the related measures. Here 
more attention than hitherto must be paid to 
environmental protection and less-favoured rural 
regions.' 
(J) OJNoC298,27. 11. 1989. 2.13. The whole battery of instruments will have to 
be reviewed and simplified if satisfactory structural 
results are to be achieved. It is necessary to ensure 
constant monitoring of intervention criteria, aid levels, 
and the management system, in order to avoid discrimi­
nating between recipients and ensure effective operation 
within the framework of the overall strategy for rural 
society. 
2.14. Subject to these conditions, and with the mobi­
lization of sufficient financial resources (Community, 
national, regional), significant results could be achieved 
by adjusting support measures to the different situ­
ations. 
2.15. In order to guarantee the financing of specific 
support measures for agriculture, there must also be 
continuous osmosis between the Guidance and Guaran­
tee Sections of the European Agricultural Guidance and 
Guarantee Fund (EAGGF). This should help to tackle 
smoothly any market problems in particular sectors as 
they arise, whilst at the same time maintaining the 
separate identity of the two EAGGF Sections and their 
respective financial allocations. 
2.16. Special attention should be devoted to improv­
ing product quality. Support measures should lean more 
towards food than towards non-food products. The 
search for alternative products and alternative uses for 
the most widely produced products is also important. 
2.17. Calculation of the maximum guaranteed quan­
tities should exclude agricultural products produced 
under contract exclusively for non-food purposes. To 
do otherwise would be to destroy any prospect of 
development in the agricultural sector. 
2.18. Training, information and land consolidation 
are also important elements of the present reform of 
the CAP. 
2.18.1. Although land consolidation comes under the 
responsibility of the national authorities, it deserves 
greater Community support in order to increase farm 
size and thus improve productivity and profitability. 
2.18.2. Measures must be administered soundly and 
effectively, in order to avoid unnecessary overspending 
and market distortion. 
7. 5. 90 Official Journal of the European Communities No C 112/37 
2.19. The proposed agri-monetary measures and the 
measures consequent on the re-alignment of the Italian 
Lira on 6 January will not have any significant long-
term effect on producers, after the automatic disman­
tling of the monetary compensatory amounts (MCA), 
except for producers in the United Kingdom, where the 
one third reduction in the monetary gaps involves a 
dismantling of approximately five points. 
2.19.1. The Committee also underlines the need to 
update the monthly increases, bearing in mind the high 
rise in interest rates affecting all the products involved. 
2.20. One way to restore farmers' competitiveness 
(which has been threatened by successive price cuts) 
without breaking the standstill rule on support and 
external protection would be to suspend or dismantle 
the basic co-responsibility levy system for all products 
to which it is applied. The Committee recommends the 
adoption of such a measure. 
2.21. The stabilizers have certainly produced 
appreciable results in curbing production in sectors with 
structural surpluses, dismantling stocks, and containing 
uncontrolled farm spending. Nevertheless, it is vital to 
ensure that stabilizers are administered in a flexible 
manner, so that they better meet the needs of the 
Community and world markets. 
2.22. The Committee lays particular emphasis on the 
need for suitable measures at Community and national 
level to avoid excessively long credit periods for prod­
ucts delivered into intervention. Such measures would 
also put a stop to the serious discrimination which exists 
at present between producers in different countries. The 
credit—uniform throughout the Community—should 
not exceed 30 days. 
2.23. The Committee deplores the position which 
the Commission reserves for the products of the disad­
vantaged regions. 
2.23.1. The limitations placed on production of defi­
cit products will create major social problems. They 
are thus unacceptable to the farmers of various regions 
of the Community. 
2.24. If the measures to contain EC production by 
set-aside, extensification, conversion and afforestation 
of farmland are to produce the desired effects, similar 
coordinated measures must also be taken by our main 
trading partners. Unless this is done, supply on the 
international markets will not be greatly reduced. 
2.25. The Committee considers that Community 
preference should not be sacrificed as it has in various sectors, and should be re-established for other sensitive 
production sectors, in order to safeguard vital Com­
munity production. 
3. Specific comments 
3.1. Cereals 
3.1.1. The Committee questions the effectiveness of 
millet/buckwheat/canary-seed aid which is set at 50 
and 30 ECU per hectare for disadvantaged regions and 
other regions respectively, and paid for a maximum of 
ten hectares. The Committee agrees to the adoption, 
on an experimental basis, of the proposed measures 
concerning millet, buckwheat and canary seed. The 
piecemeal proliferation of different types of aid is only 
justified when aid encourages a shift towards alterna­
tive, marketable products yielding an economic return. 
Where this is not the case, aid merely creates expec­
tations which are bound to be disappointed. 
3.1.2. The Committee recognizes the need to avoid 
the substitution of common wheat for durum wheat in 
the processing industry and an expansion of durum 
wheat production outside traditional regions where 
yields are much higher. Taking into account, however, 
the major alignment of prices over recent years, the 
Committee thinks it advisable to postpone (for the 
moment) any. further alignment. Any change in the 
price relation of common and durum wheat should, at 
all events, be fully compensated by aid per hectare in 
traditional production regions where there is often no 
alternative production or source of income. 
3.1.3. The Committee would here recall the pro­
posal, still before the Council, regarding the use of 
cereals in compound feed. Adoption of such a measure 
would also be in keeping with the conclusions of the 
February 1988 Brussels European Council. 
3.1.3.1. The Committee would underline the need to 
dismantle the co-responsibility levies as indicated in 
Point 2.20. 
3.1.4. The Committee opposes the cut in production 
aid for high-quality flint maize, from 166 to 100 ECU 
per hectare. 
3.2. Rice 
3.2.1. Aid for the production of indica rice should 
remain at its present level in order to encourage a 
switch to this variety. The Commission's proposal to 
cut aid by a third runs counter to this objective. 
No C 112/38 Official Journal of 
3.3. Tobacco 
3.3.1. The Committee considers that greater encour­
agement should be given to production of the varieties 
demanded by the market. However, any updating of 
the premiums for certains varieties should take account 
of the need to avoid discrimination between production 
regions. 
3.4. Oilseeds 
3.4.1. The Committee has serious reservations about 
the proposal to grant differentiated aid for the crushing 
and incorporation of oilseeds into fodder, as this would 
discourage the incorporation of Community oilseeds 
into fodder, particulary in production regions. 
3.5. Protein crops 
3.5.1. In proposing to tighten the quality standards 
for peas, field beans and sweet lupins, the Commission 
has acknowledged the existence of a marketing prob­
lem. However, the Committee feels that other solutions 
should be sought to resolve the technical problem 
of marketing these products without jeopardizing 
growers' incomes. 
3.6. Wine 
3.6.1. The Committee opposes the extension of the 
derogation (even if only for a single year) authorizing 
new planting for certain quality wines psr. This runs 
counter to the policy of keeping production down. 
3.6.2. The Committee endorses the fixing of a single 
price for red and white wines. It notes however that 
the alignment should be based on the price of red wines, 
bearing in mind inter alia the upward trend in the 
market price over the last two years. Lowering the 
intervention level could mean that wine producers incur 
a financial loss, while failing to resolve the surplus 
problem which is linked to the mismatch between pro­
duction capacity and (falling) consumption. 
3.7. Fruit and vegetables 
3.7.1. Fresh produce 
3.7.1,1. The Committee supports: 
— the introduction of the register of citrus fruit pro­
duction, 
— the grant of a premium for grubbing-up mandarin, 
apple and other orchards, provided that the land is European Communities 7. 5. 90 
used to grow varieties which are in market demand. 
The Committee considers, however, that this 
measure should be extended to all citrus fruits and 
their hybrids, 
— stiffer conditions for the recognition of producer 
organizations, 
— the consolidation of producer organizations so that 
official tasks can be carried out more efficiently, 
and to make it easier to check on their activities. 
3.7.1.2. The Committee considers however that 
reduction of production should be examined in the light 
of the degree of commitment shown towards regulating 
the sector. 
3.7.1.3. The 7,5 % price reduction (higher for lemons 
given the amendment of the adjustment co-efficients for 
quality-class, and of packaging arrangements) appears 
excessive. The comments concerning the reduction in 
support and external protection apply here. The 
reduction will weaken the Community's negotiating 
position, and is thus undesirable. 
3.7.2. Processed fruit and vegetables 
3.7.2.1. The Commission proposal to use the average 
of withdrawals and industrial processing over the last 
five years as the basis for fixing the intervention 
threshold should be reviewed to take account of the 
fact that Spain and Portugal joined the Community 
after the beginning of this period. 
3.7.2.2. The Committee nevertheless endorses 
arrangements which provide support for tonnages sold 
on the market and restore the withdrawal system to 
its function of providing a safety net for exceptional 
circumstances. 
3.7.3. Dried grapes 
3.7.3.1. The Committee considers that the Com­
mission proposals for dried grapes need a detailed re­
examination in all their aspects, in order to upgrade a 
traditional Community product which is in deficit. 
3.8. Milk and milk products 
3.8.1. The Committee calls for greater efforts to: 
improve market balance through careful management 
of aid; continue dismantling the co-responsibility levy; 
frame effective programmes to promote domestic and 
external consumption, by means of a Community pro­
motion campaign; administer the quota system in a 
flexible manner, re-allocate production quotas to young 
farmers entering the profession and redistribute quotas 
to assist small producers in upland and other less-
favoured areas. 
7. 5. 90 Official Journal of the European Communities No C 112/39 
3.8.2. The Committee also stresses the need for wide 
publicity (using appropriate timing and methods) of 
all quota and market-management measures, so that 
production can be properly planned. 
3.9. Olive oil 
3.9.1. The guarantee threshold should be revised 
periodically to take account of the quantities produced, 
and small producers should be exempt from the stabil­
izer system. 
3.9.1.1. The Committee asks the Commission to 
inform it as soon as possible as to how it means to re­
organize the market organization for this product. 
3.10. Cotton 
3.10.1. Penalization of cotton production (a product 
in serious deficit) is unjustified. The sector could offer 
a viable alternative for producers forced into reconver­
sion, particulary in certain inland areas. This could be 
secured by an appropriate increase in the maximum 
guaranteed quantities to take account of the production 
potential of Greece and Spain. 
3.11. Beef and veal 
3.11.1. It is vital that the premium systems be applied 
uniformly throughout the Community. When fixing the 
maximum number of livestock eligible, account must be 
taken of the differing farm structures. The intervention 
system must offer effective market support, and the 
management arrangements must guarantee maximum 
market transparency. 
Done at Brussels, 1 March 1990. 3.11.1.1. In order to promote specialized beef pro­
duction, eligibility for the suckler cow premium should 
be expanded to include producers owning nurse cows, 
up to certain limits over and above 60 000 litres of 
production. 
3.12. Sheepmeat and goatmeat 
3.12.1. This is a deficit sector, and it is, therefore, 
vital to adjust the stabilizer mechanism as rapidly as 
possible. 
3.13. Pigmeat 
3.13.1. If the market is to be run properly and major 
price fluctuations avoided, it is vital to improve the 
collection of statistics. 
3.14. Revision of the common market organization 
(CMO) for Mediterranean products 
3.14.1. The Committee draws the Commission's 
attention to the need to strengthen the CMO for Medi­
terranean products, taking account of (a) the preferen­
tial concessions accorded to third countries and African, 
Carribbean and Pacific States (ACP) which have effec­
tively wiped out the Community preference for many 
products, and (b) the need to create CMO for Spain 
and Portugal in tandem with the end of the first stage 
of accession. 
3.15. Measures concerning several products 
3.15.1. The Committee also underlines the need to 
update the monthly increases, bearing in mind the high 
rise in interest rates affecting all the products involved. 
3.15.2. The Committee considers that the buying-in 
prices for intervention, which have suffered serious cuts 
over the last few years, should gradually be brought 
back into line with the intervention prices. 
The Chairman 
of the Economic and Social Committee 
Alberto MASPRONE 
No C 112/40 Official Journal of the European Communities 7. 5. 90 
APPENDIX 
to the Opinion of the Economic and Social Committee 
(Fourth paragraph of Article 43 of the Rules of Procedure) 
The following amendments were defeated during the debate: 
Paragraph 2.2 
Last part of point 2.2 to read as follows: 
«... seeks to maintain the cautious price policy of recent years; besides market balance in the agricultural 
sector, the international context plays an increasing role in this.» 
Reason 
The present text does not reflect the real situation. 
Result of vote 
For: 23, against: 50, abstentions: 7.