2.12.  76 Official  Journal  of the European  Communities No C 285/15 
HAS  ADOPTED  THE  FOLLOWING  OPINION 
with  no votes  against  and  8 abstentions: 
1.1. The  Committee  would  draw  attention  to the 
effort  the  Commission  has  made  to provide  greater 
incentives  for  a reduction  in milk  output  and  to 
introduce  these  incentives  with  great  speed.  In 
general,  the  Committee  considers  that  this  proposal 
may produce  positive  results.  Some  of the  measures 
advocated  — such  as the provision  that  dairy  farmers 
who  switch  to the production  of meat  in general  (and 
not just  beef  and  veal)  should  be eligible  for  the 
conversion  premium  — are  in line  with  previous 
Committee  recommendations. 
1.2. The  Committee  points  out  that  small  dairy 
farmers  are likely  to be penalized  in so far as they  do 
not reach  the  50  000  litres  per  year  threshold 
stipulated  by  the  Commission  for  the  conversion 
premium. 
1.3. This  having  been  said,  the Committee  gives  its 
general  approval  to  the  Commission's  proposal, 
subject  to the comments  set out  below. 
2. Specific  comments 
2.1. The  Committee  thinks  that,  in view  of the 
extraordinary  situation  brought  about  by  the 
drought,  a large  number  of farmers  are  going  to apply  for  these  premiums.  In some  regions  there 
might  be a flood  of applications. 
If this  should  happen,  dairy  product  manufacturers  in 
these  regions  would  be  put  in a very  difficult 
position,  no matter  how  efficient  they  are,  and  might 
even  be forced  to stop  production. 
Because  of this  fact  and  because  dairies  located  in 
other  regions  which  have  invested  heavily  in recent 
years  will  run  into  difficulties  if production  falls,  the 
Committee  would  urge  — with  a view  to making  the 
proposal  fully  effective  —  that  additional 
arrangements  be  made  to include  dairies  in the 
Community's  general  scheme. 
2.2. The  Committee  would  also  ask  that  dairy 
farmers  who,  as the  Commission  desires,  switch  to 
another  type  of farming,  be given  the assurance  by the 
Community  that  a  coherent  and  consistent 
medium-term  policy  will  be pursued  in the  meat 
sector. 
Done  at Brussels,  30 September  1976. 
The Chairman 
of the  Economic  and  Social  Committee 
Henri  CANONGE 
Opinion  on the  action  programme  (1977  to 1980)  for  the  progressive  achievement  of 
balance  in the milk  market 
The text  referred  to the Committee  has  not  been  published  in the Official  Journal  of the 
European  Communities. 
A. LEGAL  BASIS  FOR  THE  OPINION 
On 23 July  1976,  the Council  referred  the abovementioned  programme  to the Economic 
and Social  Committee  in accordance  with  Articles  43 and  198  of the Treaty  establishing 
the European  Economic  Community. 
B. OPINION  OF  THE  ECONOMIC  AND  SOCIAL  COMMITTEE 
The Economic  and  Social  Committee  prepared  its opinion  on the  above  matter  at its 
141st  plenary  session,  held  in Brussels  on 29 and  30 September  1976. 
The full  text  of the opinion  is as follows: 
No C 285/16 Official  Journal  of the European  Communities 2.12.  76 
THE  ECONOMIC  AND  SOCIAL  COMMITTEE, 
Having  regard  to the  Treaty  establishing  the  Euro-
pean  Economic  Community,  and  in  particular 
Articles  43 and  198  thereof, 
Having  regard  to the request  made  by the Council  of 
the European  Communities  on 23 July  1976  for  an 
opinion, 
Having  regard  to the decision  taken  by its Chairman 
on 23  July  1976,  instructing  the  Section  for 
Agriculture  to draw  up an opinion  on the matter, 
Having  regard  to the  oral  report  made  by  the 
Rapporteur,  Mr de Cafarelli, 
Having  regard  to the opinion  adopted  by the Section 
for Agriculture  at its meeting  on 24 September  1976, 
Having  regard  to the discussions  at its 141st  plenary 
session  of 29 and  30 September  1976  (meeting  of 
30 September  1976), 
HAS  ADOPTED  THE  FOLLOWING  OPINION 
by 43 votes  to 12 with  16 abstentions: 
The Commission's  decision  to submit  the  present 
action  programme  in  July  1976  stems  from 
undertakings  made  by the  Council  of the  European 
Communities  in March  1976  at its 386th  meeting. 
The Committee  notes  that  this  action  programme, 
which  is to cover  the  years  1977  to 1980,  has  been 
submitted  in an economic  climate  where  we are  just 
beginning  to size  up  the  initial  effects  of an 
exceptional  period  of drought,  which  have  varied 
from  one  region  to another. 
The Committee  therefore  feels  that  the  action 
programme's  implementing  date  should  take  account 
of this  situation  and  of the developments  arising  from 
it. 
But now  that  the  Council  has  consulted  the 
Committee  on this  action  programme,  the Committee 
intends  to shoulder  its  responsibilities,  especially 
those  devolving  on its Section  for Agriculture,  under 
Article  47 of the  Treaty  of Rome.  It is in this  spirit 
that the  Committee  makes  the  comments  set  out 
below. 
1. General  comments 
1.1. The  Economic  and  Social  Committee  has 
repeatedly  deplored  the Community's  failure  to adopt 
an overall  approach  to livestock  farming  or to the fats sector.  It would  point  out,  however,  that  the 
present  action  programme  constitutes  a step  in this 
direction. 
1.2. The  figures  at present  available  suggest  that  if 
the year  had  been  normal,  the  Community's  milk 
production  would  have  gone  up  by  a significant 
amount.  It has  been  noted  that  because  of the 
drought: 
— in many  regions,  output  has  only  dropped 
significantly  since  July, 
— there  is a serious  fodder  shortage,  despite 
inter-regional  transfers  which  have  been 
facilitated  by national  measures, 
— because  of this,  more  milk  cows  will  have  to be 
slaughtered  than  usual, 
— the  milk  herd  as a whole  will  therefore  become 
younger  and  production  should  therefore  be less 
during  the next  two  years, 
— in the  longer  run,  despite  the  effects  of the 
drought,  the  level  of Community  production 
could  still  exceed  the  totals  reached  in recent 
years. 
The Committee  therefore  feels  that  the  Commission 
should  revise  its  forecasts,  particularly  those  for 
short-term  trends  in milk  product  surpluses.  The 
Commission  should  take  account  of this  when 
making  its implementary  proposals.  The  Committee 
asks that  such  proposals  be referred  to it. 
1.3. The  Committee  observes  that  certain  aspects 
of the  situation  in the  milk  sector  could  have  been 
included  in the  analysis  of current  data  taken  into 
account  in the Commission  document. 
Thus  under  certain  circumstances,  and  for reasons  of 
a more  general  nature,  the  Community  has  been  led 
to give  undertakings  in its policy  regarding  imports 
from  non-member  countries  that  have  not  eased  the 
situation  in a particularly  sensitive  market  and  have 
even  aggravated  it. 
For similar  reasons,  the  Community  has  not  always 
been  able  to exploit  all the  possibilities  with  regard 
to exports.  But  in the  proposals  for  action  that  we 
shall  be looking  at later  on the  Commission  has 
devoted  a chapter  to expanding  markets. 
In analysing  the  current  situation,  should  not  one 
also point  out  the  need  to study  how  Community 
management  methods  can  be  adapted  to market 
conditions?  As far as possible,  the market  should  be 
managed  on commercial  lines. 
2.12.  76 Official  Journal  of the European  Communities No C 285/17 
2. Comments  concerning  the formal  proposals 
2.1. The  Committee  takes  note  of  the 
Commission's  intention  to follow  up the  present 
action  programme  with  a number  of formal  proposals, 
once  the toll  that  the  drought  is taking  in the milk 
and stock  raising  sectors  can  be more  accurately 
evaluated.  But  it approves  the  Commission's 
introduction  right  now  of a Regulation  setting  up a 
Community  system  of  premiums  for  the 
non-marketing  of milk  and  for  the  conversion  of 
dairy  herds. 
2.2. The  proposal  for  reducing  the  dairy  herd  by 
means  of a Community  system  premium  for  the 
non-marketing  of  milk  and  the  conversion  of 
dairy  herds 
2.2.1.  The  Committee's  views  on this  are  to be 
found  in its opinion  on the  relevant  proposal  for  a 
Regulation. 
2.3. The  suspension  of national  and  Community  aids 
to the milk  sector  for three  years 
2.3.1.  As  regards  the curbing  of investment  in both 
farms  and  dairies,  the  Committee  stresses  that  the 
Commission  proposal,  by failing  to differentiate  in 
any way  whatsoever  between:  (a) investment  in new 
dairy  herds  or in new  dairies,  and  (b) investment  to 
modernize  or rationalize  existing  units  so as to 
improve  their  competitiveness,  is liable  to perpetuate 
situations  which  should  be changed. 
The Commission  has not made  a distinction  between 
long-term  measures  to improve  productivity  and 
short-term  measures  to bring  the  market  back  into 
balance.  Furthermore,  the  Committee  deplores  the 
way the  Commission  is blocking  every  measure  to 
rationalize  the dairy  sector. 
The indiscriminate  suspension  of all aids  will  reduce 
the competitiveness  of the  milk  sector,  and  in 
particular,  will  hamper  attempts  to raise  standards. 
The Committee  also  is fearful  that  such  a move  will 
have  an adverse  effect  on employment. 
The Committee  would  like  the Commission  to bear 
this in mind  when  drawing  up its detailed  proposals. 
2.3.2.  The  exclusion  of hill  and  mountain  and 
less-favoured  regions  within  the meaning  of Directive 
75/268/EEC  from  the  proposed  suspension  of aids, leads  the  Committee  to  make  the  following 
comments: 
— with  regard  to  the  Commission's  general 
comments  on excessive  production  costs  in the 
milk  sector,  the Committee  points  out  that  milk 
production  is in fact  at its most  expensive  in these 
particular  regions, 
— alongside  this  it must  be borne  in mind  that  the 
continued  presence  of agriculture,  and  hence  of a 
minimum  population,  in these  regions  is most 
often  linked  to  the  maintenance  of  milk 
production.  At the present  stage  of development 
of the EEC,  the Community  would  be hard  put to 
find other  solutions  to these  difficulties. 
2.3.3.  The  Committee  considers  that  farms,  and 
particularly  those  in grassland  areas,  should  not  be 
deprived  of benefit  from  Directive  72/159/EEC.  In 
any event,  it is doubtful  about  the figure  of 80 % that 
the Commission  is proposing  as the minimum  level  of 
fodder  production  which  must  obtain  on completion 
of the modernization  plan  in order  to qualify  for the 
relevant  aids. 
2.3.4.  The  Commission  considers  that  the 
measures  it is proposing  to encourage  the  sale  of 
liquid  skimmed  milk  from  the dairy  to the farm  will 
provide  a possible  additional  outlet.  The  Committee 
is not  unfavourably  disposed  towards  the 
Commission's  proposals,  but  points  out  that  in most 
cases  these  measures  will  merely  lead  to a process  of 
substitution. 
2.4. Introduction  of a scheme  to make  dairy  farmers 
share  in the cost  of the milk  surplus 
2.4.1.  The  Commission  intends  to propose  the 
charging  of a levy  on all milk  supplied  to dairies  and 
direct  farmgate  sales  of  milk  products.  The 
Committee  draws  the Commission's  attention  to the 
inexpediency  of  such  a measure  in  present 
circumstances.  Apart  from  any  other  consideration,  it 
was proposed  before  the Commission  could  make  an 
accurate  appraisal  of the impact  of the drought. 
2.4.2.  As  regards  the  principle  involved,  the 
Committee  advocated  as long  ago  as 1969,  in its 
memorandum  on agriculture  in 1980,  that  in the 
event  of threatening,  persistent  or growing  structural 
surpluses,  producers  be  made  to  share  the 
responsibility  for the consequences  of such  surpluses 
for farming  and  for the Community  by introducing  a 
levy,  related  to a farm  incomes  policy  and  planning 
targets. 
No C 285/18 Official  Journal  of the European  Communities 2.12.  76 
2.4.3.  However,  the  Committee  considers  that  a 
number  of conditions  must  be met  first,  viz.: 
— assumption  of the  cost  of absorbing  existing 
stocks,  with  a distinction  being  made,  however, 
between  safety  stocks,  normal  carried-over  stocks, 
other  stocks,  in line  with  the  position  adopted  by 
the EEC  in the  multilateral  GATT  negotiations, 
and imports  made  under  agreements  negotiated 
by the Council, 
— producers  should  be involved  in the  formulation 
of the  policy  for the dairy  industry  and  in market 
management.  In this  connection  a distinction 
must  be made  between  consultations  between  the 
Commission  and  farmers'  representatives  over  the 
amount  of the  levy  and  consultations  over  the 
making  and  implementation  of  dairy  policy. 
Producers  should  be mainly  involved  in the  first 
type  of consultation,  and  the  economic  partners 
of the  dairy  sector,  through  the  Advisory 
Committee,  should  be more  closely  involved  in 
the formulation  of the dairy  policy  and  in market 
management. 
The Committee  considers  the  proposed  consultation 
of producers  only  once  a year  to be completely 
inadequate.  What  is more,  the  present  procedure  of 
the Advisory  Committee  cannot  be called  a genuine 
procedure  of coresponsibility. 
Implementation  of the scheme  should  not  give  rise  to 
distortions  between  different  areas,  different  products 
or different  types  of producer. 
2.4.4.  In  addition,  the  Committee  points  out  that, 
in earlier  opinions  on farm  prices  proposals,  it has 
always  declared  its  support  for  the  method  of 
objective  criteria  based  on trends  in production  costs 
and in non-agricultural  earnings. 
Consequently,  the  Section  considers  that  dairy 
farmers  could  only  accept  the  introduction  of a 
coresponsibility  levy  if they  were  given  an assurance 
that the  prices  fixed  for milk  products  would  enable 
their  incomes  to keep  up. 
2.4.5.  As  regards  the  proposal  not  to apply  the 
levy in  hill  and  mountain  areas  (Directive 
75/268/EEC),  the  Committee  draws  the  Commis-
sion's  attention  to the matters  of principle  this  raises. 
2.4.6.  The  Commission  is proposing  adjustment  of 
the rate  of the  levy  in the  course  of the  year  if unforeseeable  events  so  require.  The  Committee 
considers  that,  in any  event,  such  an  eventuality 
could  only  be contemplated  if the amount  of the levy 
were  to be determined  using  objective  criteria  that 
were  laid  down  in advance,  in liaison  with  producers. 
2.4.7.  The  Committee  thinks  that  the  use  of the 
proceeds  from  the  coresponsibility  levy  should  be 
administered  on a basis  of genuine  coresponsibility 
with  a view  to obtaining  additional  markets  or, 
possibly,  cutting  back  production. 
2.4.8.  The  Committee  is  split  over  the 
Commission's  proposals  for  the  fats  sector.  On  the 
one hand,  there  is support  for  the  Commission's 
position  of moving  towards  an overall  policy  for  the 
fats sector  and  linking  the  introduction  of  a 
coresponsibility  levy  to introduction  of a tax  on 
imported  and  home-produced  fats  and  oils.  This  is 
consistent  with  the  Commission's  suggestion  in 
paragraph  47  of the  document  that  the  Member 
States  should  get together  to devote  a similar  sum  to 
that realized  by the  tax  to improving  development 
cooperation  and  aid,  including  food  aid. 
On the  other  hand,  it is argued  that  this  policy  would 
be apt to be detrimental  to the interests  of developing 
countries  and  Community  consumers.  In the  same 
spirit  it is also  argued  that,  if the  aim  of this  policy 
is to reduce  the  price  differential  between  butter  and 
margarine,  a subsidy  on butter  is preferable  to a tax 
on margarine. 
In the  final  analysis,  the  Committee  cannot  endorse 
the Commission's  proposal,  for  it does  not  think  a 
tax should  be introduced  on vegetable  and  fish  oils 
and fats. 
2.5. Enlargement  of  Community  markets 
2.5.1.  The  Committee  agrees  with  the 
Commission's  view  that  new  markets  must  be found 
and won  for  the  milk  sector.  But  it regrets  that  the 
Commission  has  failed  formally  to  stress 
improvement  of quality. 
2.5.2.  As  regards  the  exclusive  use  of  dairy 
products  in the manufacture  of certain  food  products, 
the Committee  points  out  that  the  name  'milk 
products'  should  be  reserved  for  products  made 
entirely  out of milk. 
2. 12. 76 Official  Journal  of the  European  Communities No C 285/19 
2.5.3.  The  Commission's  intention  of fixing  the 
amount  of aid  for  liquid  skimmed  milk  at a level 
which  will  make  it competitive  with  vegetable 
proteins  calls  for the following  comments: 
— the  Committee  refers  to  paragraph  2.3.4  as 
regards  the  general  usefulness  of such  a step  as a 
means  of expanding  markets, 
— the  Committee  stresses  that  the  market  prices  of 
vegetable  proteins  are particularly  volatile. 
2.5.4.  The  Committee  lays  great  stress  on  the 
importance  of the  Community's  commercial  policy 
and general  manner  of carrying  it out  for  enlarging 
the markets  of the  milk  sector. 
2.5.5.  Whilst  food-aid  programmes  should  not  be 
undertaken  solely  with  a view  to expanding  markets, 
the Committee  considers  that  if a structural  surplus 
of dairy  products  exists,  the Community  is justified  in 
increasing  the  amounts  of dairy  products  supplied  as 
food  aid  within  the  framework  of  a revised 
programme  and  meeting  the  needs  of Third  World 
countries. 2.6. Measures  to reduce  imbalances 
2.6.1.  The  Committee  refers  back  to its previous 
comments,  but  points  to the  fact  that  the  proposed 
measures  are  consistent  with  the  position  upheld  by 
the Community  in  the  multilateral  GATT 
negotiations,  particularly  as  regards  the  aim  of 
working  towards  international  agreements.  The 
Committee  has  repeatedly  expressed  its  agreement 
with  this  objective. 
2.6.2.  Finally,  the  Committee  would  repeat  the 
point  it has  made  on earlier  occasions,  for example  in 
its progress  report,  about  the  need  to improve  the 
present  methods  of  managing  the  agricultural 
markets.  Events  in  the  various  markets,  and 
particularly  the  dairy  market,  over  the  past  few  years 
have  shown  that  changes  are  necessary  to make 
Community  management  methods  more  effective. 
Done  at Brussels,  30 September  1976. 
The Chairman 
of the Economic  and  Social  Committee 
Henri  CANONGE 
ANNEX 
to the opinion  of the Economic  and  Social  Committee 
Rejected  amendments 
The following  amendments  were  rejected  in the course  of the discussions: 
Paragraph  2.4.1 
Delete  the last  sentence. 
Reason 
The short-term  problem  is not sufficient  reason  to abandon  the necessary  longer-term  reform. 
Voting 
For: 19, against:  32, abstentions:  8. 
No C 285/20 Official  Journal  of the European  Communities 2.12.  76 
Paragraph  2.4.4 
Substitute  for the second  paragraph  of point  2.4.4: 
'The  Committee  thinks  that  producers  can  accept  the  coresponsibility  levy,  provided  that 
steps  are taken  to make  sure  that  it does  not  have  socially  unacceptable  consequences  for 
the farming  community.' 
Reason 
It must  be made  possible  for those  affected  to obtain  a reasonable  income  from  other  sources. 
Voting 
For: 27, against:  47, abstentions:  6. 
Paragraph  2.4.4,  second  line  of English  text 
Amend  to read: 
'... enable  their  incomes  to keep  up and  that  financial  and  programme  coresponsibility 
involves  all the productive,  industrial  and  commercial  factors  which  are  at the root  of the 
surpluses  in the sector.' 
Reasons 
It is well  known  that  three  factors  are largely  responsible  for surpluses  in the dairy  sector:  (i) 
the lack  of an overall  coherent  policy  for vegetable  and  animal  fats,  (ii) massive  imports  from 
non-member  countries,  and  (iii)  the obvious  interest  which  certain  processing  undertakings  have 
in stressing  certain  products. 
The problem  will  be solved  therefore  not by taxing  producers  (who  are only  one  of the elements 
concerned)  but  by involving  all the factors  responsible. 
Voting 
For: 26, against:  31, abstentions:  15. 
Paragraph  2.4.8 
Delete. 
Reason 
This  does  not belong  in this  chapter,  because  Section  2.4 is dealing  with  the scheme  for making 
farmers  share  in the cost  of the surplus. 
Voting 
For: 20, against:  34, abstentions:  5. 
The following  passages  in the  Section  for  Agriculture's  opinion  were  removed  or changed 
following  amendments  accepted  at the plenary  session: 
Paragraph  2.4.3,  second  indent,  last  sentence 
'The  economic  partners  of the  dairy  sector  should  also  take  part  in the  second  type,  and 
not just  producers.' 
Voting 
Unanimous. 
2.12.76 Official  Journal  of the  European  Communities No C 285/21 
Paragraph  2.4.8,  second  paragraph 
'In the final  analysis,  the Section  for Agriculture  endorses  the Commission's  proposal.' 
Voting 
For: 40, against:  36, abstentions:  4. 
Paragraph  2.6.1,  second  sentence 
'The  Section  for Agriculture  endorses  the measures  proposed  by the Commission.' 
Voting 
Unanimous.