30. 3. 77 Official  Journal  of the European  Communities No C 77/15 
2.7. Finally,  in accordance  with  the  general 
remarks  made  in point  1.4.5,  the Committee  proposes 
that one  or more  provisions  should  be inserted  in the 
proposed  Directive  stipulating  that  illegally  employed 
Done  at Brussels,  23 February  1977. workers  must  enjoy  parity  with  indigenous  workers, 
especially  as regards  pay,  social  security  cover  and 
other  social  benefits,  for the periods  for which  they 
are employed. 
The Chairman 
of the Economic  and  Social  Committee 
Basil  de FERRANTI 
ANNEX 
to the opinion  of the Economic  and Social  Committee 
The following  amendment  was  rejected  by the Committee  during  its discussion: 
Items  2.4.2  and  2.4.3  should  be re-worded  to read: 
'The  Committee  considers  that  Article  3 must  not  apply  to workers  who  are  employed 
illegally.  Although  Article  3 does  not  expressly  cover  such  workers,  the  possibility  of this 
occurring  is inherent  in the wording  of Article  4. The  last  sentence  of this  Article  does  in 
fact say  that  "Where  the  sentence  is of deportation,  ..."  which  implies  that  sanctions  as 
described  in Article  3 are also  possible.' 
Reasons 
The aim  of this  amendment  is to ensure  that  illegal  employment  is not  punished  unnecessarily. 
Moreover,  it is in accordance  with  ILO  Convention  No 143. 
Voting 
For:  26, against:  42, abstentions:  9. 
Opinion  on the Commission  proposals  on the fixing  of prices  for certain  agricultural 
products  and on certain  related  measures 
The text  referred  to the Committee  has not yet been  published  in the Official  Journal 
of the European  Communities. 
A. LEGAL  BASIS  FOR  THE  OPINION 
On 14 February  1977  the Council  referred  the abovementioned  proposal  to the Economic 
and Social  Committee  in accordance  with  Article  47 and  198  of the Treaty  establishing 
the European  Economic  Community. 
No C 77/16 Official  Journal  of the European  Communities 30. 3. 77 
B. OPINION  OF  THE  ECONOMIC  AND  SOCIAL  COMMITTEE 
The Economic  and  Social  Committee  prepared  its opinion  on the above  matter  at its 
146th  plenary  session,  held  in Brussels  on 23 and  24 February  1977. 
The full  text  of the opinion  is as follows: 
THE  ECONOMIC  AND  SOCIAL  COMMITTEE, 
Having  regard  to Articles  47 and  198  of the  Treaty 
establishing  the European  Economic  Community, 
Having  regard  to the request  for an opinion  on made 
by the Council  on 14 February  1977, 
Having  regard  to the Decision  taken  by its Chairman 
instructing  the Section  for Agriculture  to prepare  an 
opinion  on the matter  under  the urgency  procedure, 
Having  regard  to the  oral  report  made  by the 
rapporteur,  Mr de Caffarelli, 
Having  regard  to the  opinion  issued  by the Section 
for Agriculture  at its meeting  on 22 February  1977; 
Having  regard  to the discussions  at its 146th  Plenary 
Session  held  on 23 and  24 February  1977  (meeting  of 
24 February), 
HAS  ADOPTED  THE  FOLLOWING  OPINION 
by 66 votes  to 17 with  16 abstentions: 
The Commission's  proposals  call  for  the  following 
comments  on the  part  of the  Economic  and  Social 
Committee. 
1. Preliminary  comments 
1.1. The  opinion  is restricted  to general  comments 
on the  Commission's  proposals  on the  fixing  of 
prices  for certain  agricultural  products  and  on certain 
related  measures. 
The Commission  has  also  submitted  the  following 
documents: — The  Agricultural  Situation  in the  Community: 
1976  report, 
— Situation  of the  Agricultural  Markets:  1976 
report, 
— Financial  Implications  of the  Agricultural  Price 
Proposals  and  Related  Measures  1977/78, 
— Agricultural  Incomes  in the Community. 
The Committee  was  unable  to  discuss  these 
documents  due  to lack  of time.  It will,  however,  be 
examining  them  as soon  as possible  and  will  be 
delivering  a detailed  opinion  on them. 
1.2. With  reference  to the Statistical  Office  of the 
European  Communities'  last  retail  price  list published 
in October  1975,  the Committee  notes  that  there  are 
often  very  great  differences  in prices  within  the 
Community,  the price  for one  product  varying  from 
one Member  State  to another  by between  200  and 
300 % or even  more  in some  cases.  The  magnitude  of 
such  differences  cannot  be attributed  to the absence 
of genuinely  common  prices  or  the  failure  to 
standardize  VAT  rates  or other  taxation.  Article  39 
(1) of the  Treaty  of Rome  stipulates  that  the  main 
aim of the  CAP  is 'to ensure  that  supplies  reach 
consumers  at  reasonable  prices'.  Clearly,  this 
objective  cannot  be  attained  solely  within  the 
framework  of decisions  regarding  the  fixing  of the 
prices  to be paid  to agricultural  producers.  The  price 
paid to producers  is only  one  of the factors  making  up 
the price  paid  by the  consumer  and  it is in the 
interest  of both  producers  and  consumers  to ensure 
that the  various  post-production  operations  cannot 
lead to an abnormally  high  increase  in prices. 
Producers  should  not  have  to bear  all by themselves 
the burden  entailed  in limiting  the  impact  of price 
increases  on consumers.  Consequently,  the Committee 
would  ask  the  Commission  and  the  Council  to 
examine  without  delay  the various  components  of the 
prices  of  foodstuffs  and  the  reasons  for  the 
divergences  noted. 
2. Price  proposals 
2.1. These  proposals  have  been  made  against  a 
particularly  difficult  economic  and  social  background 
30. 3. 77 Official  Journal  of the European  Communities No C 77/17 
overshadowed  by  the  need  to  improve  the 
employment  situation  and  cut  inflation  rates  in the 
various  Member  States. 
2.2. The  situation  is  so  serious  that  the 
Commission's  proposals  cannot,  in the  Committee's 
view,  be justified  only  under  the 'objective  method', 
for this  method  can  only  be properly  applied  in a 
context  of monetary  stability. 
2.3. The  Economic  and  Social  Committee  has 
repeatedly  stated  its belief  in the 'objective  method' 
and it stands  by these  views.  It would  underline  once 
more  that  the  objective  method  cannot  on its own 
secure  the  incomes  of all  farmers  and  still  less 
promote  the  structural  development  of very  many 
marginal  farms  without  planned  development 
objectives  and  effective  measures  for  structural 
improvement.  It deplores  the  fact  that  the  difficult 
monetary  and  economic  situation  and  especially  the 
divergences  in economic  performance  have  induced 
the Commission  to make  adjustments  which  do not 
allow  the  'objective  method'  to be  applied  as 
intended. 
2.4. Farming  has  therefore  been  asked  to make  a 
contribution  to the drive  against  inflation  which  must 
be considered  to be great  even  if allowance  is made 
for economic  necessities.  Since  inflation  can  only  be 
fought  by all sectors  making  a joint  effort,  care 
should  be taken  to ensure  that  the efforts  being  asked 
of farmers  are  not  frustrated  by the  absence  of 
measures  to the same  end  in the other  economic  and 
social  sectors.  As the Commission  does  not have  the 
power  over  these  sectors  that  it has over  farming,  the 
Member  States  should  commit  themselves  to take  the 
necessary  action.  If production  costs  should  rise  more 
than  expected  in 1977,  the procedure  for reviewing 
prices  would  need  to be set in motion. 
2.5. The  Commission's  proposals  appear  to give 
more  weight  to market  factors  and  have  paid  less 
regard  to the effect  they  will  have  on farm  incomes  in 
the years  ahead.  The  increased  production  costs  are 
or will  be higher  than  the  proposed  farm  price 
increases.  Consequently,  it will  be difficult  for many 
farmers  to maintain  their  purchasing  power. 
2.6. Moreover,  a close  watch  should  be kept  on 
the recessionary  effects  which  the measures  needed  to 
combat  inflation  in the  Community  may  have  on 
farming  and  related  industries.  The  Committee  also 
considers  that  the price  proposals  should  be backed 
up by more  effective  Community  action  to obviate  a drop  in investments  in the  farming  sector.  This 
action  should  be taken  in the  first  place  in regions 
where  there  are  serious  difficulties  as regards 
producers'  incomes  or  employment  problems 
affecting  farmers  or farm  workers  and  where  greater 
encouragement  must  be  given  to  improving 
production  and  market  structures,  and  to  the 
building  of infrastructure. 
2.7. Nevertheless,  consumers  should  not  be  as 
much  affected  this  year  as in previous  years  provided 
the increases  are not  used  as a pretext  for imposing 
unjustified  price  rises  at the  various  stages  after 
production. 
3. Agro-monetary  measures 
3.1. The  Committee  welcomes  the  fact  that  the 
Commission  has  not  abandoned  the  objective  of 
returning  to single  markets  under  the  arrangements 
set out in its communication  to the Council,  dated  21 
October  1976. 
3.2. Nevertheless,  as far as most  Member  States 
are concerned,  the proposed  reductions  in the MCA's 
are an inadequate  step  towards  this  objective.  The 
MCA's  should  be reduced  by a greater  amount  and 
the 'green  rates'  adjusted  accordingly,  if normal 
conditions  of competition  with  regard  to production 
and trade  are to be brought  about  and  an abnormally 
heavy  financial  burden  is not  to be placed  on the 
EAGGF.  The  question  arises,  however,  as to whether 
this adjustment  can  be made  in all the  countries 
simply  within  the framework  of the price  proposals. 
Furthermore,  specific  measures  would  have  to be 
taken  to allow  for actual  currency  trends. 
3.3. The  Committee  considers  that  it is up to the 
Council  to ask  the Member  States  concerned  to take 
the necessary  decisions. 
3.4. At  the  earliest  possible  opportunity,  a full 
study  should  be made  of the economic  consequences 
and impact  on trade  of the  MCA  system  and  the 
methods  of calculating  the MCA's  for each  product. 
The possible  repercussions  of a change  in the present 
definition  of the  European  unit  of account  should 
also be analyzed. 
3.5. However,  the  Committee  considers  that  the 
attainment  of economic  and  monetary  union  is still 
the basic  objective. 
No C 77/18 Official  Journal  of the  European  Communities 30. 3. 77 
3.6. Farming  cannot  make  an effective  contribution 
towards  the  attainment  of this  objective  unless  all 
other  industries  and  sectors  of the Community  make 
equal  efforts  to implement  a genuine  and  coherent 
Community  policy  in all other  economic  and  social 
spheres. 
4. Related  measures 
11. The  Committee  would  point  out  that  it 
reserves  the right  to revert  to all these  measures  at 
the earliest  possible  opportunity.  It would  therefore 
merely  make  the following  comments  at this  stage. 
4.2. The  Committee  notes  that  the  Commission 
will be proposing  measures  later  on for dealing  with 
starch,  olive  oil and  beef  and  veal.  It regrets  that  the 
Commission  was  not  able  to submit  all its proposals 
for measures  to back  up its price  proposals  at one  go. 
4.3. As  regards  the  milk  sector,  the  Committee 
notes  that  the  Commission  is taking  up  all  the 
measures  provided  for  in the  action  programme, 
though  it has  made  a number  of amendments  with 
regard  to: 
— the  ban  on investment  aid,  which  it thinks  should 
be more  flexible, 
— the  non-marketing  and  beef  conversion  schemes, 
which  it thinks  should  be extended, 
— the  tax on certain  vegetable  and  marine  oils  and 
fats,  for which  it proposes  an alternative  solution. 
In addition,  the  Commission  has  introduced  a new 
socio-structural  measure  in the form  of a premium  to 
which  dairy  farmers  in the 55 to 65 age  bracket  will 
be entitled  if they  cease  production. 
The Committee  would  point  out  that  these  changes 
only partly  follow  the recommendations  put forward 
in its  opinions  on  the  action  programme  and 
measures  stemming  from  this  programme  (x). Some  of 
these  amendments,  however,  demand  further 
clarification  and  will  probably  be commented  on by 
the Committee. 4.4. As  regards  beef  and  veal,  the  Committee 
would  point  out  that  deferring  the presentation  of 
new provisions  until  next  July  will  create  uncertainty 
which  will  not  help  to encourage  producers.  This  is 
contrary  to what  the Commission  itself  recommended 
in its programme  for the milk  sector. 
4.5. As  regards  sugar,  the  Committee  notes  the 
Commission's  wish  to  limit  production.  It is 
concerned  about  the  consequences  for  producers, 
processors  and  workers  in the sugar  trade  of reducing 
the quotas  in some  beet  growing  regions.  The 
Committee  also  notes  that  the Commission  has at last 
taken  into  consideration  the  problem  posed  by 
isoglucose,  one of the main  sugar  substitutes. 
In the Committee's  view,  it has  become  a matter  of 
urgency  both  for  the  sugar  industry  and  for  other 
sectors,  to consider  the problem  posed  by substitute 
products.  The  Committee  therefore  feels  that  the 
Commission  should  undertake  an overall  review  of 
sugar  production  in  the  EEC,  taking  into 
consideration  the  balance  of payments  needs  of 
Member  States. 
4.6. The  Committee  would  stress  once  more  the 
need  to get rid of the imbalances  currently  affecting 
certain  products  and  certain  regions,  this  matter 
being  tackled  also  in conjunction  with  the problems 
raised  by the Community's  foreign  policy. 
4.7. As  a result  of divergences  in economic 
performance,  the Commission  was  not able  to attune 
its proposals  correctly  to the situation  in each  of the 
Member  States,  since  monetary  upheavals  have  this 
year profoundly  aggravated  distortions  in production 
and marketing  conditions. 
Since  the  agro-monetary  measures  proposed  are  a 
move  in the direction  of restoring  a single  market,  the 
Committee  is able  to support  the  Commission 
proposals  subject  to the aforegoing  observations  and 
reservations. 
Done  at Brussels,  24 February  1977. 
The Chairman 
of the  Economic  and  Social  Committee 
Basil  de FERRANTI 
H OJ  No C 285,  2. 12. 1976;  OJ No C 56, 7. 3. 1977. 
30. 3. 77 Official  Journal  of the European  Communities No C 77/19 
ANNEX 
to the opinion  of the Economic  and  Social  Committee 
1. The  following  amendments  were  rejected  during  the discussions. 
Replace  the second  sentence  of 4.1 by the following: 
'It therefore  feels  that  it should  make  no further  comments  at this  stage.' 
Delete  4.2 to 4.6 inclusive. 
Voting: 
For: 34, against:  57, abstentions:  4. 
Replace  the second  paragraph  of 4.7 by the following: 
'In conclusion,  in the  light  of the  foregoing  comments,  the  Committee  considers  the 
price  levels  proposed  by the  Commission  to be inadequate  from  the point  of view  of 
giving  everybody  working  in agriculture  an acceptable  income.  It therefore  considers  an 
improvement  to be necessary.' 
Reasons 
A comparison  between  the price  levels  proposed  by the Commission  and  the  cost  increases 
of agricultural  inputs  (which  will  rise  in step  with  and  as a result  of inflation)  show  how  the 
incomes  of people  working  in agriculture  are being  seriously  jeopardized.  Matters  are made 
even  worse  by the  fact  that,  in the  case  of some  products,  the  new  prices  will  only  take 
effect  at the end  of the year. 
Voting: 
For: 20, against:  63, abstentions:  8. 
2. The  following  passages  in the  Section's  opinion  were  either  amended  or deleted  following 
the approval  of amendments  tabled  during  the discussions: 
Point  2.4 
Farming  has  therefore  been  asked  to make  a contribution  to the  drive  against  inflation 
which  must  be considered  to be too  great  even  if allowance  is made  for  economic 
necessities.  The  Section,  therefore,  thinks  that  some  upward  adjustments  in the level  of prices 
are necessary. 
Voting: 
For: large  majority,  against:  16, abstentions:  14. 
Point  2.5 
The recommendations  would  result  in a further  decrease  in farm  income  and  purchasing 
powers  and  a reduction  in living  standards,  since,  in all likelihood,  inflation  in 1977  will 
remain  on a par with  the figure  for 1976. 
Voting: 
For: unanimous. 
No C 77/20 Official  Journal  of the  European  Communities 30. 3. 77 
Point  2.6 (last  sentence) 
This action  should  be taken  in the first  place  in regions  where  there  are serious  difficulties 
as regards  producers'  incomes,  where  farmworkers  have  problems  in getting  work  and  where 
greater  encouragement  must  be given  to improving  production  and  market  structures. 
Voting: 
For: unanimous. 
Point  4.3 (last  two  sentences) 
Milk  prices  should  be increased  on 1 April  1977  in so far as the Commission  has not dropped 
its idea  of proposing  a co-responsibility  levy.  The  Section  has its reservations  about  the way 
this levy  is to be imposed. 
Voting: 
For: 45, against:  34, abstentions:  15. 
Point  4.6 
The Session  would  stress  once  more  the need  to reduce  the imbalances  currently  affecting 
certain  products  and  certain  regions,  this  matter  being  tackled  also  in conjunction  with  the 
problems  raised  by the Community's  foreign  policy. 
Voting: 
For: uanimous.