WRITTEN QUESTION No. 1664/98 by David HALLAM to the Commission. Intervention price for white sugar
Date: 1998-05-29
Institutions: European Parliament, HALLAM
Subjects: farm prices, intervention price, price index, white sugar

C 13/60

Official Journal of the European Communities

EN

18.1.1999

Are all registered dairy farms in Italy checked as actually producing milk?

Answer given by Mr Fischler on behalf of the Commission

(3 July 1998)

The Italian Government did not offer to pay 80 % of the levy imposed on producers exceeding their individual
quota. Under Law No 5 of 27 January 1998 it reimbursed to producers funds retained by way of advance payment
of the levy due that in fact were surplus to the amount owed to the European Agricultural Guidance and Guarantee
Fund. Under Italian rules, as soon as he finds that he has exceeded his quota a producer is required to pay the
purchaser for all milk deliveries until the end of the milk year an advance on the levy due prior to the national
offsetting exercise. Hence it is not unusual for a purchaser to hold sums greater than those actually due following
national offsetting. This explains why some amounts held by purchasers as advances on the levy due for the
1995/1996 and 1996/1997 periods were reimbursed under the 1996/1997 period.

In response to the second question, the Italian Government has adopted a set of measures for checking the
correctness of allocated quotas. The very numerous individual checks involved, on both producers and
purchasers, are not yet complete.

The Commission closely monitors the dairy sector in Italy and will not fail to take any action required for the
purpose of securing compliance with Community provisions.

(1999/C 13/086)

WRITTEN QUESTION E-1664/98

by David Hallam (PSE) to the Commission

(29 May 1998)

Subject: Intervention price for white sugar

The Explanatory Memorandum of the Commission(cid:146)s 1998/1999 farm price proposals, presented on 4 February
1998, indicates that agricultural price indices have declined in real terms by 48 % since 1980, in line with falling
input prices. Over the same period, the intervention price for white sugar, as published in the Official Journal, has
increased by 45 % despite falling labour and energy costs, and the continuing rationalization of the sugar
industry.

In the light of this contradictory trend, can the Commission explain why its 1998/1999 farm price proposals do
not include a reduction of the intervention price for white sugar?

Answer given by Mr Fischler on behalf of the Commission

(29 June 1998)

The seemingly contradictory trend identified by the Honourable Member between the evolution of the
agricultural price indices on the one hand and the intervention price for white sugar on the other hand is only
an illusion and is due to the comparison between the former price expressed in real terms and the latter price
expressed in nominal terms.

When applying the same methodological treatment to the two series of prices, i.e. using the same deflator method
also on the intervention prices for white sugar in order to express them both in real terms, it becomes clear that
they have followed the same evolution between 1980 and now. Both prices have declined by about 45 %. Based
on this reasoning, the Commission(cid:146)s proposal for the 1998/1999 intervention price for white sugar can be seen to
be justified.