WRITTEN QUESTION P-2582/96 by Daniel Varela Suanzes-Carpegna (PPE) to the Commission (24 September 1996)

Subject: Regional impact of the inadequate dairy quota for Spain

Article 130a of the TEU calls for overall harmonious development of the Community, including the strengthening of economic and social cohesion by reducing disparities between the levels of development

of the various regions and the backwardness of the least-favoured regions, including rural areas. Article 130b states that the formulation and implementation of the Community's policies and actions shall take into account the objectives set out in Article 130a.

The current agricultural policy of dairy production quotas does not take into account their impact on cohesion and thereby restricts the economic and social development of extremely poor Spanish regions which are included in regional policy under Objective 1. To take the case of Galicia, a less-favoured rural region with natural conditions which are clearly conducive to cattle-farming and with no major agricultural alternatives, the current authorized dairy quotas are far less than its real production potential. The authorized quota for Spain does not even cover its own internal consumption needs. It is therefore essential for the present quota to be urgently reviewed and increased, to bring to an end this incongruous, indeed disastrous, situation.

Is the Commission aware of the serious consequences of this situation and the adverse impact on cohesion in Spain, in particular in certain regions such as Galicia (Objective 1), where the dairy sector plays a key role in economic and social development?

What measures does it plan to take to eliminate the adverse impact on cohesion caused by the inadequate dairy quota authorized to Spain and thereby comply with the provisions of the TEU?

Answer given by Mr Fischler on behalf of the Commission (14 November 1996)

Reference quantities were allocated to the Member States on the basis of past output. In this way, the Council reached a compromise without having to reach any conclusions about other aspects of the economics of dairy farming in each Member State, and in particular about the level of consumption. However, this method meant that quotas are lower than consumption needs in several Member States: not only Spain, but also Italy, Greece and the United Kingdom.

As to the specific regional problems, there are provisions enabling the Member States to maintain milk production in regions such as Galicia, where it is a key factor in agricultural land use and employment. The provisions also give priority to certain types of producers (young people, recent investors or newcomers to production) for the allocation of additional quota from the national reserve, which ensures that their production will be profitable.

The Commission has also taken specific measures for agricultural structures in Galicia. In particular, it has adopted an operational programme for Galicia under Objective 1 to contribute to rural development. One of the measures in this programme is particularly relevant to the Honourable Member's question: the 'plan de adecuación de exportaciones lecheras de Galicia', which is intended to contribute to the modernization of dairy farms by improving their productivity. The measure provides incentives to cease production on the least profitable holdings so that the other holdings may expand, thus enhancing their viability and competitiveness without overshooting the volume of output allocated. The Commission hopes that this measure will help milk producers to adapt to the conditions created by the common organization of the market for milk. The expected cost is PTA 1 970 million, including part-financing of 72.5 % from the Guidance section of the European Agricultural Guidance and Guarantee Fund.

The Commission is now giving thought to the changes needed to ensure that dairy policy is better adapted to future needs.