Opinion of the Economic and Social Committee on the 'Proposal for a Council Regulation (EC) amending Regulation (EEC) No 2075/92 on the common organization of the market in raw tobacco, and fixing the guarantee thresholds for leaf tobacco by group of tobacco varieties for the 1996 and 1997 harvests' ()

(96/C 153/15)

On 18 January 1996, the Council decided to consult the Economic and Social Committee, under Articles 43 and 198 of the Treaty establishing the European Community, on the above-mentioned proposal.

The ESC decided to appoint Mr Zarkinos as Rapporteur-General responsible for preparing the Committee's work on the subject.

At its 333rd Plenary Session (meeting of 29 February 1996), the Economic and Social Committee adopted the following Opinion nem. con., with 24 abstentions.

1. Introduction

The Commission is here proposing to the Council the fixing of the guarantee thresholds for leaf tobacco for the 1996 and 1997 harvests in order to allow producers to plan their production in good time.

It also proposes amending the basic Regulation (EEC) 2075/92 in order to allow Member States to transfer certain guarantee threshold quantities from one group of varieties to other groups of varieties without financial consequences.

The Commission's aim is to introduce a degree of flexibility into the administration of guarantee thresholds, to take account of unpredictable trends in market conditions.

2. General comments

2.1. Tobacco is an annual crop and its production process starts in winter with the leasing of land, the supply of equipment and the preparation of seed drills. Since the regime for this sector assists production of a fixed quantity per producer, it is clear that the producer can plan his production and avoid uneconomic activities and pointless expense only when he knows what his quota is. By the same token, any negotiations with a view to crop contracts between producers and dealers presuppose knowledge of producers' quotas.

2.2. The Committee has ascertained that for the 1995 financial year the producers were informed of their quotas very late (end of May). This led to protests from the producers and their organizations, which in turn led the Council and the Commission to admit the need for allocation of quotas to take place in good time.

2.3. The Committee takes the view that the Commission proposal on the guarantee thresholds for 1996 and 1997 is a step in the right direction, but the delay for the 1996 financial year is now unavoidable. Regulation 1066/95 lays down that the Member States shall publish their confirmations of quotas not later than 31 January of the year of the harvest concerned.

The Commission proposal was submitted on 27 November 1995; however, owing to an unfortunate delay in the decision-making procedure at European Union level, for yet another year the quotas will be announced late, with negative effects on the producers and the sector in general.

2.4. The Committee feels that, if market conditions require revision of the guarantee thresholds for 1997, the decision-making procedure will have to be completed by 31 December 1996, to allow quotas to be allocated to producers in good time.

2.5. Finally, the Committee believes that the new Commission proposal on future policy in the tobacco sector (proposal to be submitted before 1 April 1996) will need to tackle the sector as a whole with a view to adapting production to market needs, improving quality and improving organization, taking account of the role and importance of tobacco-growing for the economy and social fabric of certain EU regions, as well as application of the Community preference.

3. Specific comments

3.1. The Committee takes the view that the second part of the Commission proposal is also positive, although it recognizes that the tobacco regime is characterized by inflexibility as regards the management of guarantee thresholds.

3.2. The Committee noted that, according to the Commission's definitive figures for the 1994 harvest, total tobacco production in the EU amounted to 327 916 tonnes.

Taking into account that the Council had fixed the total EU quota qualifying for premium in 1994 at 350 000 tonnes, one finds that the final quantity of tobacco delivered and receiving the premium was 22 084 tonnes less (6,3 % of the total quota) and the expenditure saved on the sector amounted to ECU 64 million. The situation was similar for the 1993 harvest.

3.3. Assuming the principle of financial neutrality, the Committee feels that, for a product in serious deficit, some degree of flexibility is needed in the management of quotas, because the rigidity of the system includes provisions which even hinder the full use of the funds budgeted for the sector.

3.4. The Economic and Social Committee takes the view that, because of the differentiation in the premiums given for each of the groups of varieties, the transfer of equivalent quantities from one variety to another does not ensure financial neutrality. To achieve that, the transfer of quantities would have to be of equal financial effect.

Done at Brussels, 29 February 1996.

The President

of the Economic and Social Committee

Carlos FERRER

() OJ No C 30, 3. 2. 1996, p. 6.

APPENDIX to the Opinion of the Economic and Social Committee

The following amendment was rejected during the course of the debate:

'Delete point 3.3.'

Reason

It is completely wrong to claim that tobacco is in serious deficit. There is in fact a massive surplus of tobacco and tobacco products. Furthermore, it is wrong to talk about the 'rigidity of the system' if the funds budgeted for the sector are not used in full.

Result of the vote

For: 29, against: 32, abstentions: 22.