ARCHIVESHISTORIQUES
DELACOMMISSION
COLLECTION RELIEEDES
DOCUMENTS "COM"
COM(79)105
Vol.1979/0053

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COMMISSION OFTHEEUROPEAN COMMUNITIES
COM(79)105final.
Brussel,12March1979
PROPOSAL FORACOUNCILREGULATION (EEC)
LAYINGDOWNSPECIALMEASURES INTHERAW
TOBACCOSECTORINRESPECT OFTHE
PERUSTITZA ANDERZEGOVINA VARIETIES
(SubmittedtotheCouncilbytheCommission)
C0MC79)105final.

EXPLANATORY MEMORANDUM
1.Article 130)ofthe "basic "tobacco "Regulation (R727/70of21April 1970 )
provides -that ,where foravariety oragroup ofvarieties oftobacco ,the
quantities bought-in bytheintervention agency exceed ,foragiven crop ,a
fixed percentage ofproduction or,inanycase ,agiven quantity ,the
"Commission isrequired tosubmit areport tothe .Council .
Such areport ,submitted totheCouncil inSeptember 1978 (Doc.Vl/229l/78)
highlights what areconsidered tohave been thecauses oftheorisis in
oriental tobaccos (Xanti ,Perustitza andErzegovina )and ,more particularly :
-the imbalance atworld level between supply anddemand ;
-theincrease intheCommunity ofcultivated areas ,but especially of
production due totheconsiderable increase inunit yields ;
-thedecline .inquality ofCommunity production ,due asmuch tothegenetio
degradation oftheseed used astotheadoption ofunwise cultivation
techniques ;
causes which caused the accumulation ofenormous intervention stocks since
the1976 crop .
2.Although forthethree crops 1973/'l974/1975 nomore than 1.000 tonnes inall
were taken into intervention ,forthe1976 crop thefigure was13-024 tonnes
andforthe1977 crop (provisional figures )about 6.000 tonnes ,expressed in
leaf tobacco .
Itisboth interesting anduseful ,inconnection with themeasures which the
Commission isproposing toadopt ,tonote howthesituation differs markedly
according tovariety :
1976 . 1977 (provisional )
Xanti > 2.532 321
Perustitza 3x683 2.161
Erzegovina ©•809 3*542
Theprovisional figures relating tothe ,1977crop ,therefore ,confirm what has
already been emphasized bytheCommission initsraport totheCouncil ,namely ,
•marketing difficulties havebecome structural only inthecase oftheErzegovina
varieties ,inparticular ,andPerustitza .Inthecase oftheXanti variety ,on
theother hand ,thefigure recorded forthe1976maybeoonsidered asbeing
exceptional .
/•

-2-
3.Inconclusion ,itshould benoted ,that ,fortheseoond crop insuccession ,the
two"ceilings "setbytheCouncil (R.(EEC)l469^^ave beenexceeded i.e.both
thetwenty percent setonthevolume ofproduction andtheabsolute ceiling
of4-000 tonnes . >
Itfollows that the specific measures tobeadopted inorder topoint the
sector intheright direction are ,inaooordance with theprovisions of
Article 13(5)ofRegulation 727/70 :
-lowering ofthelevel oftheintervention price ,
-quantitative limitation ofquantities tàken into intervention .
4.Inview ofwhat hasbeen stated above (seepoint 2)andofthefact that for
theXanti variety ,ontheonehand ,themarketing difficulties areattributable
solely toquota reasons and ,ontheother ,also from aqualitative point of
view ,this variety hasnot suffered from the same degradation processes
encountered inthecase oftheother varieties (Perustitza andErzegovina ),
theCommission oroposal involves areduction intheintervention price from
90to80ioofthenorm price ofthevarieties Perustitza andErzegovina only .
This proposal isbased ontheprovision laid down inArticle 13(4)»itis,
moreover ,inline with thegeneral direction which theCommission isrecommen­
ding initsproposal for anamendment toArticle 13®which hasbeen submitted
totheCouncil together with the 1979 prices package .Possible recourse to
quantitative restrictions onintervention wasnotconsidered possible and
processing structure (small farmers endnumerous processing holdings )which
would ,entail acomplex administrative infrastructure atthechecking stage .
5.TheCommission has ,moreover ,studied (Article 13(8))theconsequences for
producers ofthemeasures proposed totheCouncil ,both from thepoint ofview
ofemployment andofthestandard ofliving .Inthis respect ,itconsiders
ν
1its proposal "neutral ":
-because itdoes notaffect thelevel ofthepremium and ,therefore ,the
possibility forgrowers ofreaching thenorm price inthecase ofquantities
. normally saleable onthemarket ; -
-because ,inaddition ,theincrease inearnings perhectare ,which producers
secured forthemselves tymeans oftheintervention mechanism ,must be
considered ananexceptional situation which oannot beguaranteed under all
oircumstances ,following theadoption ofcultivation techniques designed to
ensure thegreatest unit yield .
/.

Earnings/hectare(lire)
1970 1976 Increase
Perustitza
Erzegovina1,148.152 2,840.623
865.072 ,2,734.243+247t4
+3l6,1
TheCommissiondoesnot,therefore,considerthattheloweringoftheinter-
ditions(highunityields)-mayhavenegativeeffectsonemploymentandon
thestandardoflivingofproducersandthataprogrammeofaidisnecessary.
6.Finally,inviewoftheinitiativestakesbytheCommissionwiththeaimof
implementing ,asfromthe1979crop,aprogrammeofagricultural research
*fororientaltobaccosandoftheprospeotawhichthispromisesofanimprove­
ment-inthemediumterm–inthequalityofproduction,theCommissionis
proposingtoCouncilthatitadopttheloweringoftheintervention price
forthe1.97$and1980crops.ventionpricefrom90to80?oofthenormprice–incurrentproductioncon-

Proposal for a
Council Regulation (EEC)
Laying down special measures inthe rawtobaoco sector in
respect ofthe Perustitza and Erzegovina varieties .
THECOUNCIL OPTHEEUROPEAN COMMUNITIES ,
Having regard totheTreaty establishing theEuropean Economic Community ,andin
particular Article 43thereof ,
Having regard toCouncil Regulation (EEC)NO727/70of21April 1970 onthecommon
organization ofthemarket inrawtobaooo^\aslastamended bytheActof
Accession ,andinparticular Article 13(3 )and (4)thereof ,
Having regard totheproposal fromtheCommission , #
(2)Having regard totheOpinion oftheEuropean Parliament , ,
Having regard totheOpinion oftheEconomic andSocial Committee ^
Whereas itaooears "from thereport oftheCommission provided for inArticle 1Z(1 )
ofRegulation (EEC )No727/70that thequantities oftobacco ofthe Xanti-Yakei ,Peru -;
stitza andErzeqovina varieties from the 1976 crop taken over bytheintervention
agencies areconsiderably greater than thequantities andthepercentage ofproduct !
(4)fixed byCouncil Regulation (EEC )No1469 /70 ,thethreshold which actuates the
application ofthemeasures laid down inArticle 13ofRegulation (EEC )No727/70;
whereas this trend hascontinued forthe 1977 crop ; .
Whereas even theprudent prices policy pursued asregards particularly these varieti
since the 1974 crop hasnotled toareversal inthemarketing situation ;whereas
itistherefore necessary tohave recourse tospecific measures ;whereas ,of I
thevarious possible measures ,alowering oftheintervention price appears |
themost appropriate tore-establish abetter balance betwaen production
anddemand and toreduoe stocks ; ■ l
(1)OJNoL94,28.4.1970 ,p. 1 ' v
(2)
(3)
(4)0JNoL164 ,27.7.1970 ,p.35

Whereas itisevident -that them&rkit *U*gdifficulties e.pepler.^d
bytheXanti-fakk variety raay "bereg*p«ied a*'being different ■romthose ofthe
Psrus iitza andErze^ovlr .*var.letiew €mdduesolely taanexcept !or?->leituatii>n ;
whereas ,furthermore »i:n.s vwtri -:-.5y notBuffered thedegradation processes
which have affected t""i«quality' of •'Vietwolatter varieties |whereas ,therefore ,
themeasures envissa£-.?d should beapplied only tothePerustitaa andEcsegovina
varieties ;
Whereas ,inview oftheegricw.ltu research ppogrssmo concerning oriental
tobaccos which will "beiKplenacted s?frus thenext oiop andoftheprosfsote for
improvement inthequality ox"production which will result intheaediua term ,
themeasures envieag-ed should beapplied tothenext twocrops ;
Whereas themeasures envisaged ■hs.-m noeffect onthelevel oftheprenium ,thereby
allowing producers toobtain thenorm price inrespect ofthops quantities which
maybesold normally or*thesarfcet ;vhere'asj furthensore ttheincrease inearnings
perhectare ,secured byproduces faymeans ofintervention and through theuse
ofamethod ofcultivation calculated toproduce ■aicaxirauTf yield fistobe
considered asnotresulting -from ilisnormal play ofmarket forces 5whereas ,
therefore ,itdoes notappear warranted topropose api*©graaaa& ofaidinthis
sector ,
HAS ADOPTED THIS REGULATION s
Article 1
Forthe1979 and1980 crops ,theintervention price fortcbaoco ofthePerustitza
variety andoftheEr-zegovina variety shall bereduced from 9*3to80^5ofthe
corresponding norm price .
Article 2
This Regulation shall enter into force on(entry into force ofprices ofthe
1979 crop ),
This Regulation shall bebinding initsentirety anddireotly applicable inall
Member States , ~
Done at For the Cour-ail

FINANCIAL STATEMENT
"•«* »7.2.1979
1.BUDGET HEADING : 7011 AP^08IATIONS :24,6 million £(JA
2.TITLE :Draft Council Regulation laying down special measures concerning raw
tobacco ofthePeruatitza andErzegovina varieties .
j.LEGAL BASIS :-Article 13ofCouncil Regulation (EEC)No727/70
4.AIMSofPROJECT :Reduction oftheintervention price forthetwovarieties in
question because there isasurplus ofthese produots onthemarket (see
' explanatory memorandum ).
I5.UNANCIAL IMPLICATIONS IPERIOD OF12MONTHS
LCURRENT FINANCIAL YEAR
<79 ÎF0L10UING UNANC1AL TEA* I
I5.0EXPENDITURE-CHARGED TOTHE ECBUDGET
CUSXXX' INTER KENT IONS )ι ■- ■-
4i8millionI4,8million EDA I
I -NATIONAL ADMINISTRATION EUAI
I
!
I -OTHER
15.1RECEIPTS-OWN RESOURCES orTHE EC
(LEVIES /CUSTOMS OUTIES )
I-NATIONAL
1981
5.0.1 ESTINATED EXPENOITURÏ
5.1.14|8million
EUA
3.2HETHOO OFCALCULATION
•06Annex
S:inQUMua€XjrcTPGrjCT:)axx.xxjacK8QoaugqE3CTS3ray3ra0g&JL>ULgJigj&jL*xJ0£x0t3t3 ^^
mm
y»Y7K YT*rirx.xja&i3ucataQcxasxxnacttKxma&
6.3 UiLL FUTURE BUDGET APPRC81AT JCNS 8ENECESSART ?
OBSERVATIONS :There isacertain delay incarrying outbuying inoperations .For
that reason thefinancial implications generally appear theyear following that
ofthe harvest .TES/**

AHHEX
Financialimplications,aaaresultofthechangeintheinterventionpricefrom
90to80^oftheguideprice,forJ
Perustitza->Derivedinterventionprioeicurrent-3.053u.a./t
proposed-2.781u.a./t
Quantitativehypotheses:Reductionof920tpermarketingyearintheamountsbought-in }
Qitryintointerventionof1.240tpermarketingyear.
Entry,removal–920tat
storage –920tat
financialoharges–920tat
netlos8 –920tat
netloBB -1.240tat12u.a./t
77u.a./t
176u.a./t
2.073u.a./t
272u.a./til-0,011 millionu.a.
-0,070"»-0,162-»
-1,900."'"
-0,337"
-2,480 Billionu.a.
(1)-(2.073»3.053-980)orthecurrentderivedpriceminusthesellingprice(ADA)
(2)-(272«thedifference'betweenthenetloaapartonneattheoldprice(3-053)
andthenetlosspertonneattheproposedprice(2.781),i.e.2.073-1.601
272).
Erzegovina Derivedinterventionprice:current-2*751u.a./t
proposed«2*507u.a./t
Quantitative hypotheses !Reductionof1.660tpermarketingyearintheamounts
"bought-in ?
Entryintointerventionof.1.880tpermarketingyear.
Entry,removal-
storage –
financialcharges–
netloss -
netlosa -1.660tat
1.660tat
1.660tat
1.660tat
1.880taira72u.a./t
77u.a./t
176u.a./t
1.853u.a./t
244u.a./t-0,020millionu.a.-0,128""
-0,292""
-3,000""
-0,459"
-3»899millionu.a.
(3)-(1*853-2.751-893)orthecurrentderivedpriceminuasellingprice.
(4)-(244-thedifferencebetweenthenetlosspertonneattheoldprice(2.751)
andthenetlosspertonneattheproposedprioe(2«507)»1.053~
1.609-244).
Totalfinancialimplications 2,48
3,90
6.38millionu.a.•6|95million