No C 59/50 Official  Journal  of the European  Communities 8. 3. 78 
Opinion  on the amendment  of the common  organization  of the market  in beef  and  veal  and 
the report  by the Commission  to the Council  on the respective  merits  of the systems  of 
premiums  and  intervention  measures  in the beef  and  veal  sector 
The opinion  of the Committee  does  not relate  to any  particular  text. 
A. LEGAL  BASIS  FOR  THE  OPINION 
At its 152nd  plenary  session  held  on 26 and  27 October  1977  the Committee,  acting  on a 
proposal  from  its Bureau,  decided  to deliver  an opinion  on the abovementioned  subject  on 
its own  initiative. 
B. OPINION  OF THE  ECONOMIC  AND  SOCIAL  COMMITTEE 
The Economic  and Social  Committee  drew  up its opinion  at its 154th  plenary  session  held  in 
Brussels  on 14 and  15 December  1977. 
The full text  of the opinion  is as follows: 
THE  ECONOMIC  AND  SOCIAL  COMMITTEE, 
Having  regard  to the fourth  paragraph  of Article  20 of 
the Rules  of Procedure, 
Having  regard  to the decision  taken  by the plenary  ses-
sion on 27 October  1977  to act on a proposal  from  the 
Bureau  and  draw  up an opinion  on the amendment  of 
the common  organization  of the market  in beef  and veal 
and the report  by the Commission  to the Council  on the 
respective  merits  of the systems  of premiums  and  inter-
vention  measures  in the beef  and  veal  sector, 
Having  regard  to earlier  Committee  work  on the mat-
ter, 
Having  regard  to the opinion  issued  by the Section  for 
Agriculture  at its meeting  on 1 December  1977, 
Having  regard  to the report  submitted  by the rappor-
teur,  Mr Schnieders, 
Having  regard  to the discussions  at its 154th  plenary 
session  held  on 14 and  15 December  1977  (meeting  of 
14 December), 
HAS  ADOPTED  THE  FOLLOWING  OPINION 
by 50 votes  to 19 with  15 abstentions: 
1. The  Committee  has  studied  with  great  interest  the 
two Commission  documents  submitted  to the Council 
on the possible  revamping  of the Community's  beef  and veal sector.  It by and  large  agrees  with  the Commis-
sion's  assessment  of past  developments  in this  sector. 
It also  broadly  endorses  the adjustments  proposed  by 
the Commission  on the ground  that  they  can  help  to 
solve  the problems  in the beef  and  veal  sector. 
The Committee  would  like  to make  a number  of general 
comments  on the proposed  new  guidelines,  though  it 
reserves  the right  to take  the matter  up again  when  the 
time comes  for it to scrutinize  the official  implementing 
provisions  which  the  Commission  intends  to present 
shortly. 
2. The  Committee's  comments  on the proposed  new 
guidelines 
2.1. The  Commission  is proposing  that  the instruments 
used so far for organizing  the market  in beef  and  veal 
should  be added  to. Above  all, the reshaping  of the rules 
governing  intervention  and  the introduction  of a vari-
able premium  is being  proposed. 
The Commission's  aim  in making  these  proposals  is for 
the average  price  paid  to farmers  to be around  90%  of 
the guide  price  (Section  45 of the communication). 
2.2. Slaughter  premium 
When  it formulates  further  proposals  concerning  the 
slaughter  premium  the Commission  must  clearly  indi-
cate: 
8. 3. 78 Official  Journal  of the European  Communities No C 59/51 
— which  category  of cattle  should  be slaughtered  first, 
— what  is the best  time  to carry  out the slaughtering, 
— how  the premium  is to be granted  and  what  its level 
is to be, 
— to what  extent  it intends  to coordinate  this slaughter 
premium  with  the premiums  currently  being  granted 
for the reduction  of dairy  herds. 
These  measures  must  contribute  to harmonious  farm 
restructuring  in the long  term. 
2.3. Variable  premium 
Regardless  of the  variable  premium's  basic  level,  the 
Commission  should  make  it absolutely  clear  which 
category  of cattle  is to be eligible. 
The manner  of calculating  the premium  should  also  be 
specified. 
The Committee  considers  that  the premium  should  be 
granted  to farmers. 
The period  for which  the premium  is to apply  should  be 
a reasonable  one  that  takes  account  of the need  for ef-
fectiveness,  so that  the  system  remains  sufficiently 
flexible. 
2.4. Intervention  system 
So far the intervention  system  has served  in particular  to 
support  farm  incomes. 
In the; Committee's  view,  the purpose  of intervention  in 
agriculture  is to make  for a balanced  market.  If the 
proposed  variable  premium  system  is applied,  this  func-
tion of the intervention  mechanism  will  be able  to come 
more  to the fore.  Intervention  must  after  all guarantee 
consumers  a reasonable  price  level  and  continuity  of 
supply,  either  from  Community  production  or from 
imports. 
2.5. Private  storage 
The Committee  is in favour  of private  storage  being 
continued.  Nevertheless,  aid must  be granted  in the light 
of the situation  on the market  and  the  needs  of the 
purchasers  of meat  from  storage. 
A distinction  must  be drawn  at the intervention  stage 
between  butcher's  meat  and  manufacturing  grade  meat. Manufacturing  grade  meat  which  has  been  boned  and 
frozen  must  be classified  according  to fat and  collagen 
content. 
2.6. The  decisions  — including  those  on individual 
aspects  to be taken  under  the beef  and  veal  policy  are so 
far-reaching  that  they  must  be taken  by the Council. 
Far-reaching  powers  on the matter  should  nqt be dele-
gated  to the Management  Committee. 
3. The  Committee  notes  that  the Commission  does  not 
intend  to change  its policy  on refunds  in trade  with 
non-EEC  countries. 
It thinks  that  the consequences  arising  from  the agree-
ment  concluded  with  a number  of non-member 
countries,  and  in particular  the ACP  countries,  should 
not fall disproportionately  on the shoulders  of farmers 
in future. 
4. On  the question  of refunds  for the export  of breed-
ing cattle,  the  Committee  considers  that  the  refunds 
should  be the same  as those  granted  for animals  for 
slaughter. 
Refunds  should  also  be predetermined  at least  six 
months  in advance  so that  there  can be sustained  trade 
with non-EEC  countries.  This  is what  happens  in other 
sectors. 
5. A wide-ranging  discussion  of the changes  to be made 
to the common  organization  of the markets  in beef  and 
veal should  also  cover  the following  points. 
5.1. The  Treaty  of Rome  states  that  one  of the objec-
tives  of the common  agricultural  policy  is to 'ensure 
that supplies  reach  consumers  at reasonable  prices'.  It is 
not possible  to attain  this  objective  by taking  only  one 
contributing  factor  (the  prices  paid  to producers)  as 
one's  basis.  The  Commission  must  also  examine  the 
scope  for  improving  marketing  conditions,  to see 
whether  consumption  can  be increased  by lowering 
prices,  at least  in those  Member  States  where  prices  are 
substantially  higher  than  in others  for products  of equal 
quality. 
5.2. At the end  of its communication  the Commission 
says that  it is necessary  to examine  measures  to improve 
the marketing  system  and  cites  the  case  of slaugh-
terhouses.  The  Committee  shares  this  concern  and 
hopes  that  the Commission  will  work  out some  concrete 
proposals. 
5.3. The  conditions  under  which  beef  and  veal  are 
produced  still  vary  from  one Member  State  to another, 
particularly  in respect  of hygiene,  despite  Commission 
No C 59/52 Official  Journal  of the European  Communities 8. 3. 78 
efforts  in: the veterinary  and  animal  feed  sectors.  The 
Committee  therefore  thinks  that  the Commission  should 
get down  to harmonizing  national  legislation  in this 
field.  Criteria  should  also  be set for classifying  meat 
according  to the conditions  of its production.  The  clas-sification  could  be used  at retail  level  and  for financing 
purposes,  the aim  being  to encourage  quality  products. 
5.4. Marketing  standards  should  be worked  out  for 
processed  goods. 
Done  at Brussels,  14 December  1977. 
The Chairman 
of the Economic 
and Social  Committee 
Basil  de FERRANTI 
8. 3. 78 Official  Journal  of the  European  Communities No C 59/53 
ANNEX 
to the opinion  of the Economic  and  Social  Committee 
As the result  of amendments  adopted  at the plenary  session,  the following  passages  in the Section  for 
Agriculture's  opinion  were  deleted: 
'2. The  following  points  emphasized  by the  Commission  are  particularly  relevant,  the  Section 
thinks,  for an appraisal  of the proposed  amendment. 
2.1. Beef  and  veal  production  is mainly  concentrated  in the same  places  as dairy  production.  Beef 
herds  remain  limited  in size  because  of farm  structures. 
— Four-fifths  of all cattle  farmers  depend  for their  incomes  on both  milk  and  beef  production  (sale 
of milk  and  of cows,  calves  and  other  cattle  for slaughter). 
— Mixed  beef  and  dairy  farmers  earn  only  two-thirds  as much  as arable  farmers. 
— It emerges  from  the farm  accountancy  data  network  of the EC Commission  and  from  national 
statistics  that,  despite  improvements  in the prices  of beef/veal  and  milk,  the incomes  of mixed 
beef and  dairy  farmers  on the whole  are still  not on a par with  the average  incomes  of com-
parable  groups  in other  sectors  of the economy. 
— The  measures  taken  so far in the beef  and  veal  sector  have  not proved  sufficient  to guarantee 
farmers  specializing  in beef  and  veal  production  a secure  income  comparable  with  that  obtained 
by arable  farmers  or farmers  producing  a variety  of products. 
— Beef  and  veal  consumption  is very  heavily  dependent  on consumers'  real  purchasing  power. 
Changes  in beef  and  veal  consumption  depend  on national  eating  habits,  income  levels  and  the 
price  elasticity  of demand,  which  varies  greatly  in the countries  of the European  Community. 
— There  is not always  a direct  relationship  between  the prices  paid  to producers  for their  beef  and 
veal and  the prices  paid  by consumers.  Consumer  prices  are about  50%  dependent  on farm-gate 
prices.  The  remaining  50%  depends  on trends  in marketing,  processing  and  distribution  costs. 
— The  common  organization  of the  market  must  provide  consumers  not  only  with  security  of 
supply  but also  with  reasonable  and  stable  prices,  which  so far it has not done  satisfactorily. 
— The  objective  of the common  organization  of the market  is to enable  the Community  to contri-
bute to the support  of prices  and  production  within  the Community  and  to the harmonious 
development  of trade  in beef  and  veal  both  inside  and  outside  the Community. 
— Despite  the restrictive  measures  during  the crisis  when  domestic  beef  and  veal  production  was 
on the increase,  the Community  continued,  even  when  the escape  clause  was  being  applied,  to 
take the imports  it had  agreed  to under  GAIT  and  opened  the door  wider  to imports  from  ACP 
countries. 
Voting 
For: 50, against:  20, abstentions:  8. 
'4. The  Section's  comments  on the proposed  new  guidelines 
The Section  thinks  there  is no reason  for discarding  the permanent  intervention  used  so far to 
guarantee  farmers  a floor  price. 
The intervention  price's  level,  which  was  set at 93%  of the guide  price  in the original  scheme  for the 
organization  of the beef  and  veal  market  and  has been  reduced  to 90%  by the Council  of Ministers 
in the past-two  years,  should  be maintained  and  not lowered  still  further. 
No C 59/54 Official  Journal  of the European  Communities 8. 3. 78 
The Section  fears  (a) that  changes  along  the lines  proposed  by the Commission  will  cost  the EAGGF 
much  more,  (b) that  there  is no guarantee  that  these  additional  costs  can be met  and  (c) that  beef 
and veal  producers,  whose  earnings  are already  at the lower  end of the scale,  will be even  worse  off. 
It also  fears  that,  since  the price  paid  to the producer  accounts  for only  50%  of the retail  price,  the 
positive  effects  from  the consumer  angle  will not-be  as great  as the Commission  expects.' 
Voting 
For: 46, against:  27, abstentions:  11. 
Paragraph  7, second  paragraph 
The Section  can support  this  attitude.  Nevertheless,  it thinks  that  the consequences  arising  from  the 
agreement  concluded  with  a number  of non-member  countries,  and  in particular  the ACP  countries, 
should  not fall disproportionately  on the shoulders  of farmers  in future.' 
Voting 
For: 43, against:  21, abstentions:  11.