Opinion of the Economic and Social Committee on the "Proposal for a Council Regulation on the common organisation of the market in sheepmeat and goatmeat"
Date: 2001-10-17
Institutions: European Economic and Social Committee
Subjects: aid to agriculture, farmers' income, goat, sheep

C 36/48

EN

Official Journal of the European Communities

8.2.2002

Opinion of the Economic and Social Committee on the ‘Proposal for a Council Regulation on the
common organisation of the market in sheepmeat and goatmeat’

(2002/C 36/10)

On 22 May 2001 the Council decided to consult the Economic and Social Committee, under Articles 36
and 37 of the Treaty establishing the European Community, on the above-mentioned proposal.

The Section for Agriculture, Rural Development and the Environment, which was responsible for
preparing the Committee’s work on the subject, adopted its opinion on 27 September 2001. The
rapporteur was Mr de las Heras Caban˜ as.

At its 385th plenary session of 17 and 18 October 2001 (meeting of 17 October 2001), the Economic
and Social Committee adopted the following opinion by 75 votes, with 10 abstentions.

1. Gist of the Commission proposal

2. General comments

The proposal for a Regulation suggests a number of
1.1.
very important changes to this common market organisation,
in particular a new approach regarding aid to the producer.
Premiums will no longer go towards reducing or eliminating
loss of income by the producer; instead, the producer will be
allocated a fixed premium, regardless of developments in each
marketing year.

1.2.

The main changes are as follows:

1.2.1.
Introduce a flat-rate premium of EUR 21 for heavy
ewes and EUR 16.8 for light ewes and goats, and maintain the
20 % differentiation between premiums.

Raise the ‘rural world premium’ (1), now called a
1.2.2.
‘supplementary premium’, to EUR 7 and remove the differen-
tiation between heavy and light lamb producers. Besides
producers in less-favoured areas, farmers who practise trans-
humance will also be able to apply for this supplementary
premium, subject to certain conditions.

1.2.3.
Prevent a producer who markets milk and milk
products benefiting from the heavy lamb premium, even if he
fattens at least 40 % of the lambs born on his holding.

1.2.4.
Fix a minimum guaranteed quantity per Member
State based on the sum of individual rights in force before the
reform.

1.2.5. Maintain private storage aid as an intervention
measure.

• Market overview

2.1.
External dimension: The EU is approximately 80 %
self-sufficient in sheep and goatmeat, with the shortfall being
met by imports. Most of these imports attract zero duty. They
include 226,700 mt from New Zealand, 23,000 mt from
Argentina and 18,650 mt from Australia, which can be used
as ceilings. The accession of the eastern European countries
will not present a major distortion to the CMO as their
production has fallen substantially and they are not consumers
of these products, with the exception of Romania and Bulgaria.
Current levels of production in each applicant country will be
taken into account in the accession process. The countries
which could possibly have a greater impact are Bulgaria and
Romania as they are the only ones at present which fill their
zero-duty export quota to the EU (Romania 8,050 mt and
Bulgaria 7,000 mt). Other applicant countries also have quotas
but do not use them to the full: Poland 9,200 mt, Hungary
14,832.5 mt, Czech Republic 2,150 mt.

•

Situation in the European Union

Under the current CMO, aid to sheepmeat and goat-
2.2.
meat producers is calculated according to loss of income in
each marketing year and market price within the EU. The
philosophy behind this aid is fundamental, as the current
system compensates sheep and goat producers for loss of
purchasing power and income caused by a fall in the market
price. The new proposal, however, intends to fix a flat-rate
premium of EUR 21 per ewe, regardless of how the sector is
performing. The ESC believes that the amount proposed is
totally inadequate since it will not enable goat and sheep
producers to achieve a fair income compared with other
livestock sectors.

(1) Aid to producers located in less-favoured areas, as described in

Council Regulation (EEC) 3493/90.

2.3.
Sheep and goat producers’ incomes have fallen over
the last decade despite the application of the current CMO.

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Farmers’ incomes in this sector are still below the average
income in all other farming sectors. This loss of income was
not because the philosophy of compensating for loss of
income is not the correct one, but because the measures to
implement it are not the most appropriate:

2.6.
Given the sensitivity of this sector, it is very important
that premiums are revised on a regular basis so they can be
readjusted according to the situation in the sector. It is not
appropriate to set an amount for this premium up until 2006
as this would, again, lead to a downward spiral in producer’s
incomes.

2.3.1.
At the moment the base price is calculated annually
according to: the market situation during the current year,
predicted increases in sheepmeat and goatmeat production
and consumption, production costs, the market situation in
other farming sectors, in particular the beef and veal sector,
and past experience. The base price has not been adjusted
since this CMO was approved in 1998; in fact it has not
changed since 1993. Sheep and goat farmers’ incomes have
suffered as a result since this sector has not seen an increase in
productivity comparable with that in other sectors, which
might have offset at least partially the rise in costs. Far from
closing the income gap with other sectors of production, the
gap has actually widened.

As to date the base price reduction coefficient of 7 %
2.3.2.
has stayed the same, the final premium received by the farmer
has fallen by approximately 25 %.

2.3.3.
If we compare, in euro/LU, the suckler-cow premium
and the flat-rate premium proposed by the Commission, we
the premium offered to a sheep and goat
discover that
producer in 2002 will be more than 30 % less than that offered
to a suckler-cow producer. Such a comparison is justified
because the production method for suckler cows is very similar
to that for sheep and goats. Unless this situation is changed, it
will be very difficult to bring the income of sheep and goat
farmers into line with that of other livestock farmers.

2.4.
Preventing loss of income would not be the only effect
of properly remunerating this type of production; the industrial
and commercial sectors would also benefit as they would be
able to work with a product which met a series of requirements
which consumers and society in general increasingly insist on.

2.5.
The ESC believes that producers of light lambs (i.e.
who sell milk) and goatmeat must receive the same premium
as producers of heavy lambs. This is the case for the suckler-
cow premium, to which farmers are entitled provided that the
holding’s milk production does not exceed a certain annual
quantity established by the Member State. A similar measure
is needed for milking ewes so that farmers are not obliged to
reduce production in order to receive the premium, which
they would receive up to a given number of heads per holding,
thus acknowledging the multifunctional nature of these hold-
ings.

2.7.
Another intervention measure put forward in this
proposal is the maintenance of the private storage aid, even
though it has had almost no impact whatsoever on the sector
to date. In general, this measure accounted for approximately
0.15 % of the sector budget. This is largely due to a self-
sufficiency rate of 80 % and to the fact that this sector has not
been directly involved in any food crises.

2.8.
The introduction of a fixed premium which failed to
take account of income loss in each marketing year would
place the sector in a very difficult position in the event of a
downturn in the market, as the proposed premium does not
reflect changes in price. All the recent
food crises have
provoked a crash in the markets. In addition to the measures
put forward in Article 26 of the Commission proposal, a
mechanism therefore needs to be drawn up whereby the
existing premium is automatically supplemented when the
market price falls below a threshold or reference price.

2.9.
Further research is needed into introducing a system
for the individual identification and registration of animals
that allows them to be traced from producer to consumer. This
would offer consumers transparency regarding the conditions
under which sheep and goat meat is produced and sold; this
would in turn have a positive impact on consumption by
improving consumer confidence and preventing fraud or
scams. In its recent opinions on food safety and traceability,
the ESC highlighted the need to extend the introduction of
such systems in order to achieve this goal. It therefore attaches
importance to the implementation of Directive 92/102/EEC (1)
on the identification and registration of animals which takes
account of advances in the new technologies to facilitate the
identification and registration necessary for full traceability
(e.g. electronic identification).

2.10.
The ESC proposes that the CMO in sheep- and
goatmeat reinforce the role of producers groups in this sector,
by offering incentives to breeders who sell their products
through such groups. These producers groups could have a
beneficial impact on the application of policies for improving
product quality, facilitate the traceability of products, promote
environmentally friendly practices and improve the prevention
of epidemics.

(1) OJ L 355 of 5.12.1992 and Commission report on the identifi-

cation and registration of animals (COM(98) 207 final).

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• Rural development

2.11.
Although sheepmeat and goatmeat account for a
relatively small percentage of total meat production (i.e. 10 %
of pigmeat production and 12 % of beef and veal production),
they are very important in the predominantly hilly and less-
favoured rural areas where they are produced. The ESC would
subscribe to this statement by the Commission. Approximately
80 % of the aid requested is concentrated in such areas. The
ESC therefore believes that the supplementary premium needs
to be raised above the proposed level to encourage producers
to stay in such areas.

2.12.
Sheep and goat production in less-favoured areas is
essential to keeping people in the countryside and thereby
preserving a living rural community. The role of sheep and
goat producers in society therefore goes far beyond mere
production. This system of production helps protect the rural
fabric in areas where there is a real threat of depopulation.
Population density in such areas of the EU is lower than
80 inhabitants per km2; however,
in Mediterranean areas
(which account for more than 90 % of goatmeat production
and, together with the United Kingdom, more than 80 % of
sheepmeat production) population density falls to less than
25 inhabitants per km2. Recognition must be given to the role
this sector plays in the demographic structure of these regions
by raising the supplementary premium, previously known as
the ‘rural world premium’. Other activities in rural areas, such
as rural tourism, also depend on sheep and goat breeding.

•

Environment

2.13.
Protection of the environment is crucial in this type
of extensive farming. Consequently sheep and goat producers
provide a service to society for which they must be adequately
compensated to reflect its high ecological and environmental
value. Grazing on scrubland and in hilly areas hinders the
spread of
fires and makes it easier to regenerate
woodland without damaging biodiversity. Rational grazing
also prevents the erosion, compacting and subsequent degra-
dation of the soil.

forest

2.13.2.
If this proposal were adopted as it stands, the
current system of production would run a very high risk of
being replaced by intensive systems whose main priority is to
reduce costs, with scant regard for the objectives described
above.

3. Specific comments

Replacing the current system — whereby premiums
3.1.
are calculated according to loss of
income and farmers
therefore guaranteed an acceptable income — with a fixed
premium has a number of disadvantages. The current system
does need to be improved and the imperfections arising from
its implementation over previous years corrected. However, it
would be very difficult to really compensate farmers for loss
of income by way of a fixed premium alone, unless this was
sufficiently high and combined with an anti-crisis safety net.

3.2.
The introduction of a fixed premium could help reduce
bureaucracy and make it easier for the competent authorities
to check claims. Premiums would also be easier to calculate
and farmers would be able to plan their marketing year in
advance. However, despite these advantages, a safety net needs
to be created to compensate farmers for loss of income during
crisis situations. Fixing a premium without taking account of
market contingencies may seriously jeopardise a farmer’s final
income in such crisis situations.

3.3.
The premiums proposed in this reform are insufficient
given the current situation in the sheep and goat sector. A
level of premiums is needed that allows producers in this
sector to earn the same income as producers in other farming
sectors and maintain it over time. This will help to achieve the
general objective of cohesion policy in disadvantaged rural
areas.

3.4.
Although the World Trade Organisation does not agree
with aid based on prices or production, this must not be used
as a pretext for changing the current CMO for sheepmeat and
goatmeat. Before any changes are made, an acceptable level of
income must be achieved for this type of production.

4. Conclusions

2.13.1.
Under the system of extensive farming, animals are
fed on natural grazing; no substances are therefore used to
fatten lambs and kids artificially. Extensive farming therefore
offers not only a model of production that respects the
surroundings, but also a model for food safety and animal
welfare. For this model to continue to be used, producers must
be compensated in a way that reflects the important role they
play.

4.1.
The ESC believes the sheepmeat and goatmeat sector is
very sensitive, due not only to the market situation but also to
its relationship with other key issues, such as the environment,
rural development, food safety and animal welfare. These are
very important values which the Common Agricultural Policy
must promote in a much more active and effective manner.

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4.2.
The ESC therefore considers that, as part of the reform
of the CMO for sheepmeat and goatmeat, the fixed premiums
proposed by the Commission should be increased, with a
corresponding increase in the budget, to reflect the current
situation in the sector and to encourage producers to continue
in this line of work. Hence they should receive a level of
compensation that reflects their role in society.

4.3.
In addition, a safety net which automatically compen-
sates producers for loss of income when a crisis occurs should
be set up and included in the Council regulation, since the
vulnerability of this sector in a crisis situation could lead to
the loss of many activities in the rural world with grave
repercussions.

Brussels, 17 October 2001.

The President

of the Economic and Social Committee

Göke FRERICHS

Opinion of the Economic and Social Committee on the ‘Proposal for a Council Regulation
amending Regulation (EC) No 2792/1999 laying down the detailed rules and arrangements
regarding Community structural assistance in the fisheries sector’

(2002/C 36/11)

On 27 June 2001 the Council decided to consult the Economic and Social Committee, under Article 37
of the Treaty establishing the European Community, on the above-mentioned proposal.

The Section for Agriculture, Rural Development and the Environment, which was responsible for
preparing the Committee’s work on the subject, adopted its opinion on 28 September 2001. The
rapporteur was Mr Mun˜ iz Guardado.

At its 385th plenary session of 17 and 18 October 2001 (meeting of 17 October), the Economic and
Social Committee adopted the following opinion with 79 votes in favour and seven abstentions.

The Committee is able to endorse the Commission proposal,
subject to the comments which follow. These comments also
concern the proposed amendment to Decision 97/413/EC
contained in the same Commission document.

1. Comments on the proposed decision

1.3.
The amendment to Article 3 of Decision 97/413 will
be particularly damaging for the small-scale fleet. This article
applies to vessels of less than 12 metres overall, other than
trawlers. For this category, the increase in capacity does not
represent an actual increase in fishing effort, as the aim is to
improve such important aspects as accommodation con-
ditions, safety, seaworthiness, on-board conditions for han-
dling fish, and compliance with international obligations.

The amendment to the decision is designed to prolong
1.1.
the fourth generation of multiannual guidance programmes
(MAGP IV). It does not establish new measures for Member
States which fail to comply with the MAGP, although such
measures are included in the proposed regulation (amendment
to Article 9).

1.2.
The amendment extends the MAGP IV by a further
year but also establishes new percentages in relation to the
reduction targets which were set
for a four-year period
[Article (1)(1)(b)].

2. Comments on the proposed regulation

2.1.
The third ‘whereas’ clause of the proposed regulation
contains an unfortunate modification which may be detrimen-
tal to the small-scale coastal
fishing fleet, given that the
seventh ‘whereas’ clause of Regulation (EC) No 2792/1999
acknowledged the important fact that:

‘small-scale coastal fishing has a special status in terms of the
objectives for fishing effort adjustments; it is important that