WRITTEN QUESTION E-1935/96 by Enrico Ferri (PPE) and Pier Casini (PPE) to the Commission (16 July 1996)

Subject: Revision of the system and establishment of a European bank for milk quotas

Under the current milk quota allocation arrangements, which are outdated and do not reflect changing productivity patterns, Italy is severely penalized when compared with other EU Member States. Given the importance of milk production, not just for the agricultural sector itself but for the economy as a whole at both national and international levels, the relevant Community legislation should be thoroughly overhauled.

Furthermore, producers should once again be able to rely on their rights being respected, which will require the publication of the reference amounts prior to the start of each new period and a guarantee that they will not be reduced during the marketing year, which would interfere with the contractual arrangements made with the buyers.

With a view to the above, would the Commission ensure that:

1. the Community institutions adopt legislation establishing a programme to restructure and re-allocate the overall amount at Community level, with a view to revising the milk quotas for Italy in accordance with the subsidiarity principle;

2. provision is made at Community level for the introduction of a self-certification system for dairy products to take the place of inspections, which will not give rise to uncertainty or speculation;

3. a European bank responsible for the milk quotas allocated to the various EU producers is established and serves as the sole point of reference with a view to the provision of genuine compensation at Community level.

Answer given by Mr Fischler on behalf of the Commission (31 July 1996)

The Commission does not agree with the Honourable Members and believes that Italy has received favourable treatment over milk quotas. The total quantities guaranteed per Member State were set in 1984 on the basis of 1981 production levels, except for Italy and Ireland, for which the base year was 1983, when yields for both countries were higher. In addition, the Council decided in 1993 to grant Italy an extra 900 000 tonnes. As a consequence, individual quantities were allocated to Italian producers using 1988/89 as the reference milk marketing year. Any occurrence of higher deliveries was corrected during the 1991/92 year. Given the rise in yields, this represents a considerable advantage for Italian dairy producers over their counterparts in other Member States.

As regards the first question, a rise in the Italian quota would increase the amount of milk placed on the European market. This is unacceptable at a time when butter and powdered skimmed milk intervention is again gathering pace and when a number of products, particularly cheese, are feeling the effects of GATT constraints. And any rise in the Italian quota to the detriment of other Member States' allowances would be equally unacceptable.

On the second point about the introduction of a self-certification system for dairy produce, the Commission feels that, since the 1992 review of the supplementary levy, clear progress has been made in ascertaining the actual quantities produced and hence the extra levy payable by producers. Getting buyers to send in details of the tonnages delivered by producers over the quota year is the only way to run subsequent checks on producers and buyers, using supporting documentary evidence. Furthermore, by managing the system through the buyer, producers actually benefit since each buyer is compensated by setting off over-production against under-production.

In answer to the third question, the Commission believes that any move from compensation based on national over- and under-production to a Community-wide scheme would lead to a marked rise in the tonnages of dairy produce marketed. The cost of this would be prohibitive given current budgetary constraints.

The quota system established in 1992 comes to an end on 31 March 2000. The Commission is currently looking into ways of modifying the existing arrangements and plans to put a proposal to the Council next year.