COMMISSION OF THE EUROPEAN COMMUNITIES 
Brussels, 16.12.1997 
COM(97)717 final 
COMMUNICATION FROM THE COMMISSION TO THE COUNCIL 
THE EXTENSION OF THE INTERNATIONAL GRAINS AGREEMENT 1995 
AND THE NEGOTIATION OF A SUCCESSOR AGREEMENT 

THE EXTENSION OF THE INTERNATIONAL GRAINS AGREEMENT. 1995 
AND THE NEGOTIATION OF A SUCCESSOR AGREEMENT 
I Explanatory Memorandum 
1. The International Grains Agreement, 1995, is made up of two parts: the Grains 
Trade Convention, 1995 and the Food Aid Convention, 1995. 
2. The European Community, as well as Member States individually, are parties to the 
Agreement and members of both Conventions. 
3. Both Conventions must be extended or replaced as from 1 July 1998. Extension may 
be affected simply by decisions of the International Grains Council and the Food 
Aid Committee. Replacement, on the other hand, requires negotiation of a new 
Agreement and new conventions. 
4. During a series of informal meetings of members of the Conventions, it has emerged 
that there is a preference for an extension of both Conventions for a year. 1 July 
1998 including 30 June 1999 and the negotiation of new Conventions during that 
period. 
5. It is intended that negotiations should take place during this period in order to agree 
the texts of the new conventions. The Commission should participate in that 
negotiating work on behalf of the European Community. 
// Objectives with regard to the extension of the Agreement 
6. It is intended that the International Grains Agreement will be extended for a year: 
1 July 1998 including 30 June 1999. 
The two separate legal instruments which form these Agreement will accordingly be 
extended for the same period. 
Therefore each of the two Conventions shall be extended as follows: 
a) The Grains Trade Convention 1 July 1998 including 30 June 1999 
b) The Food Aid Convention 1 July 1998 including 30 June 1999 
III. Objectives with regard to the negotiation of a new International Grains Agreement 
7. Grains Convention from 1 July 1999 onwards 
The majority of the provisions contained in the new Grains Convention will be the 
same in substance as those contained in the current Convention, therefore no 
substantial modifications are to be foreseen. 
8. Food Aid Convention from 1 July 1999 onwards 
The Convention could be amended along the following lines: 
1) To bring the Food Aid Convention in line with thinking on Food Aid as we 
approach the millennium. 
2) To meet the perceived need for a Food Aid Code of Conduct. 
Z 
3) To meet the need for a reaction to the Singapore decision and the Marrakech 
declaration. 
IV. Financial implications 
9. The EC-15 contribution to the administrative budget, shown under item B2-5160 of 
the European Union budget, in principal will remain unchanged and at any event 
will not exceed the present level. On the contrary, a reduction of the contribution 
could be envisaged in case of new accessions to the Convention. 
V. Conclusions 
10. The Commission proposes to the Council to authorise the Commission to vote on 
behalf of the European Community. 
a) according to Article 33 § 2 of the Grains Trade Convention in favour of the 
extension of this Convention for the period from 1 July 1998 to 30 June 1999; 
b) according to Article XXII § 2 of the Food Aid Convention 1995 in favour of the 
extension of this Convention for the period from 1 July 1998 to 30 June 1999. 
11. The Commission recommends to the Council to authorise the Commission to 
negotiate a successor agreement to the International Grains Agreement, 1995 and 
decide that the negotiations shall be conducted in consultation with the special 
committee provided for in Article 113 of the treaty and in accordance with the 
attached negotiating directives". 
NEGOTIA TION DIRECTIVES 
A) Grains Convention 
The Grains Convention has been substantially modified in 1995. Therefore there are 
no important changes foreseen for the future Convention. A change in the 
depository Body could be examined in order to establish a better link with the 
World Trade Organisation. 
B) Food Aid Convention 
1) Incorporation of the proposed Food Aid Code of Conduct into the Convention 
2) Widening coverage of the Convention to cover all products found in a traditional 
food aid food basket. Widening coverage should not solely be based on the wish 
to encourage new donors to join the Convention. Beneficiary needs must come 
first. 
3) Limiting the Convention to grant food aid. 
4) Limiting countries eligible as destinations under the Convention to least-
developed countries and low-income countries with a structural food deficit. 
5) Making clear provision for all forms of food aid to be eligible for inclusion under 
the Convention, including triangular purchases, local purchases, provision of 
foreign exchange for food purchases. 
6) Making it easier for other donors to join the Convention, enlarging also the range 
of products by reducing the minimum commitment level. Attention needs to be 
given to the desirability of opening the Convention too widely and how this 
could affect the current consensus approach to decision-making. 
FINANCIAL STATEMENT 
Date: 
BUDGET HEADING: B2 - 516 APPROPRIATIONS: 
2. TITLE: Communication to die Council regarding EC participation in negotiation work on a New 
Agreement to replace the International Grains Agreement, 1995. 
3. LEGAL BASIS: treating establishing the European Community, particularly Article 113. 
4. AIMS: Authorization for the Commission to participate in the negotiation of a new agreement 
FINANCIAL IMPLICATIONS PERIOD OF 12 
MONTHS 
(ECU million) CURRENT 
FINANCIAL 
YEAR 
(97) 
(ECU million) FOLLOWING 
FINANCIAL 
YEAR 
(98) 
(ECU million) 
5.0 EXPENDITURE 
- CHARGED TO THE EC BUDGET 
(REFUNDS/INTERVENTION) 
- NATIONAL AUTHORITIES 
- OTHER 
5.1. REVENUE 
- OWN RESOURCES OF THE EC 
(LEVIES/CUSTOMS DUTIES) 
- NATIONAL 
1998 
5.0.1 ESTIMATED EXPENDITURE 
5.1.1 ESTIMATED REVENUE 430,500 1999 
430,500 2000 2001 
430,500 430,500 
5.2 METHOD OF CALCULATION: 
Calculation based on experienced of budgetary policy of the Intemation Grains Council in recent years, as well 
as the new calculation of contnbutionss that have been fixed by the agreement negotiated in 1995. 
6.0 CAN THE PROJECT BE FINANCED FROM APPROPRIATIONS ENTERED IN THE 
RELEVANT CHAPTER OF THE CURRENT BUDGET? YES/NO 
6.1 CAN THE PROJECT BE FINANCED BY TRANSFER BETWEEN CHAPTERS OF THE 
CURRENT BUDGET? YES/NO 
6.2 WILL A SUPPLEMENTARY BUDGET BE NECESSARY? YES/NO 
6.3 WILL FUTURE BUDGET APPROPRIATIONS BE NECESSARY? YES/NO 
OBSERVATIONS: 
The amount indicated cover the participation of the EC to the administrative budget of the Agreement. 

ISSN 0254-1475 
COM(97) 717 final 
DOCUMENTS 
EN 02 03 04 11 
Catalogue number : CB-CO-97-739-EN-C 
ISBN 92-78-29767-4 
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