WRITTEN QUESTION E-1972/00

by Camilo Nogueira Román (Verts/ALE) to the Commission

(21 June 2000)

Subject: Speculative sales of Galician milk quotas with a view to the reform of the Common Agricultural Policy

The prospect of a reformed Common Agricultural Policy, with bonuses per kilogram of milk granted directly to the farmers, which will, from 2005, partially compensate for the reduction of intervention prices, means that in the Galician milk sector, which is equipped for far higher levels of milk production than it has been allocated, a strongly speculative market is emerging, thus reducing the opportunities for internal development when the CAP reform comes into force. Does the Commission intend to introduce measures to prevent this kind of serious perversion of the Common Agricultural Policy? Does it intend to introduce measures to allocate state-held quota reserves on the basis of socio-economic criteria free of charge? Does it intend to establish measures for allocation free of charge on the basis of social economic criteria of State reserve of quotas? Does it intend to link measures such as the simultaneous handing over of land with the possibility of transferring quotas? Is the Galician government engaged in any specific negotiations with the Commission to correct these harmful effects of current policies in the milk sector?

Joint answer to Written Questions E-1972/00, E-1973/00, E-1974/00 and E-1976/00 given by Mr Fischler on behalf of the Commission

(18 July 2000)

Article 3 of Council Regulation (EC) No 1256/1999 of 17 May 1999 amending Regulation (EEC) No 3950/92 establishing an additional levy in the milk and milk products sector(1) reads as follows: The Council undertakes to conduct a mid-term review in 2003, on the basis of a Commission report, with the aim of allowing the present quota arrangements to run out after 2006. However, the direct payments to producers which are planned to start in 2005 are currently established by tonne of reference quantity (quota) of milk. If the Council decided to abandon the system of quotas, it would have to accept all the consequences, including those relating to the base and the method of calculating direct payments. The Commission has not yet determined the content of its report, or the measures that it intends to propose. In any case, it would be imprudent to determine measures now but not publish them until 2003, and so without taking account of the current situation, which may have changed in the meantime.

Originally, the volume of milk quotas was calculated to bring production more closely into line with total disposal opportunities and then distributed among the Member States in proportion to their historical production. The quotas for Spain were then increased several times to take account of its particular situation

and regional problems, most recently under Agenda 2000. The allocation and redistribution at individual level of these quotas, including the fixing of priorities and the financial conditions, are the responsibility of the Member States. Similarly, Community legislation now permits transfers of quotas with or without land, partly to avoid speculation, according to rules to be drawn up by each Member State.

The Commission can communicate with regional bodies only via national official channels.

The Commission considers that the transparency of the market price for milk in Galicia depends, not on an increase in the quotas, which would increase the regional surpluses which already weigh heavily on prices, but on greater compliance by operators with existing rules and disposal of all their production through trade channels.

From the point at which a Member State exceeds its overall quota, the super-levy is due proportionally from all producers who contributed to the overshooting, but after any reallocation of quotas not used elsewhere, and according to rules to be drawn up by the Member States. No derogation from this principle can be considered without jeopardising the whole quota system. Consequently, exempting certain producers who have overshot from the super-levy is tantamount to imposing it on others, who have respected their quota, which is impossible.

(1) OJ L 160, 26.6.1999.