Opinion of the Economic and Social Committee on "New impetus for a plan for plant protein crops in the Community"
Date: 2002-01-16
Institutions: European Economic and Social Committee
Subjects: common agricultural policy, olive-growing, supply, vegetable protein

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Opinion of the Economic and Social Committee on ‘New impetus for a plan for plant protein
crops in the Community’

(2002/C 80/06)

On 12 July 2001, the Economic and Social Committee, acting under Rule 23(2) of its Rules of Procedure,
decided to draw up an opinion to the opinion on ‘Arable crops’, on ‘New impetus for a plan for plant
protein crops in the Community’.

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 4 December 2001. The rapporteur
was Mr Sabin.

At its 387th plenary session held on 16 and 17 January 2002 (meeting of 16 January), the Economic and
Social Committee adopted the following opinion by 95 votes with three abstentions.

Following the opinion on the cultivation of legumes on set-
aside land, the ESC decided to take a more in-depth look at the
European Union’s supply of plant proteins for the livestock
farming sector. This additional opinion looks into the various
options for providing new impetus for a plan for plant protein
crops in the Community. Since the European Parliament’s
Committee on Agriculture expressed an interest in the ESC’s
views on the matter, the rapporteurs from the two institutions
worked together. The outcome was a public hearing held by
the Committee on 4 December 2001. (For further information,
please visit the ESC website: www.esc.eu.int)

— The ‘Blair House’ agreement, following the United States’
attacks (GATT panels) on the ‘oilseed’ regulation, led to
restrictions on European production. Although heavily
criticised, this agreement did have the virtue of not
jeopardising the existing acreage under these crops in
Europe. Nevertheless, eight years later the Common
Agricultural Policy reform again led to a decline in this
sector.

1.

Introduction

The background to developments in the oilseed and
1.1.
protein crop sector in international relations holds many
lessons for the future.

— In the course of the 1962 ‘Dillon Round’, European
negotiators did not deem the oilseed and protein crop
sector to be of strategic importance. Eight years later,
soya was dominating world trade as the only source of
plant protein for animal feed.

— While the increase in world trade was to secure cheaper
supplies for the European Union, a major gap opened
up between supply and demand in 1973, triggering a
sharp rise in world prices. The United States then
imposed an embargo on soya sales, causing a major
upset in Europe.

— Wiser for this experience, the European Union demon-
strated from 1973 onwards that it could step up its
degree of self-sufficiency by consolidating the common
organisation of the market for oilseeds and creating the
conditions needed for boosting protein crop production.

A wide gap has again opened up between the European
1.2.
Union’s requirements in plant protein and its production
potential. Moreover, how the oilseed and protein crop sector
develops now concerns more than just agricultural issues. This
sector is tied up in several key issues for society.

Consumers’ perception of food safety has become a
1.3.
predominant issue. The new integrated Community food safety
policy calls for a high degree of safety in each link of the food
chain. The use of plant protein in cattle feed is a matter which
must be examined with the above in mind.

The conclusions of the Gothenburg summit held on
1.4.
15 and 16 June 2001 allowed a European strategy for
sustainable development to be adopted; the conclusions stated
that the Common Agricultural Policy ought to aim, inter alia,
to contribute to sustainable development by providing more
incentives for the production of renewable raw materials. More
specifically, to combat climate change and comply with Kyoto
protocol commitments, steps are needed to encourage people
to use carbon from renewable rather than from fossil sources.

Lastly, the conclusions of the Berlin summit in March
1.5.
1999 and the Nice summit in December 2000 called on the
Commission to keep a close watch on developments in the

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oilseed sector in Europe and, if necessary, to look into possible
options for promoting plant protein crops. This was discussed
in Commission Communication (1).

1.5.1.
The Committee notes that since the last two Com-
mon Agricultural Policy (CAP) reforms and the World Trade
Organisation (WTO) agreements, the European Union’s degree
of self-sufficiency in plant proteins has again fallen, last year
sinking to below 25 %. This constantly deteriorating situation
does raise the question of Europe’s dependence on imports,
entailing risks for European livestock farmers’ supplies of plant
proteins.

The Committee attaches particular importance to the
1.6.
future of oilseed and protein crop production in Europe. The
objective of this opinion is to propose the main lines for a
Community plant protein plan which takes account of the
four major issues facing the European Union.

2.

First issue: European plant proteins — an asset for
food safety

2.1.
The Commission has adopted a White Paper on food
safety which thoroughly reviews current European Union
policy on foodstuff and animal feed safety. The Economic and
Social Committee discussed this White Paper in an opinion (2)
adopted by a large majority in May 2000.

2.2.
The recent BSE (bovine spongiform encephalitis) ani-
mal health crisis highlighted the need for extreme care when
setting up systems for recycling raw materials. This led to a
ban on the use of meatmeal in animal feed.

2.3.
Although in 1999 5 % of protein-rich substances
produced were not of plant origin, this health crisis led to a
crisis of consumer confidence in the beef market, which had
repercussions on the cattle feed market since the latter had to
make more extensive use of plant proteins.

2.3.1.
The Commission therefore proposed encouraging
the cultivation of fodder legumes on set-aside land as from the
2001-2002 season using biological production procedures.
However, these can only be used in fodder for ruminants.

2.3.1.1.
The Committee indicated in its opinion on this
proposal (3) that although the text was a step in the right
direction it would be unable to match the scale of consumer
expectations on health safety for animal feed and did not offer
any solutions for the white meat sector.

The protein element of animal feed now comes from
2.4.
plant substances and very small quantities of fish meal. So as
to establish that these practices are safe for human health,
arrangements for managing any health risk arising from the
use of oilseed and protein plant oilcake should be examined.

Such risks might relate to:

— the possible presence of contaminants; and

— effects caused by the presence of GMOs (genetically

modified organisms).

2.5.
As regards the presence of contaminants, there is full
European legislation on monitoring undesirable substances in
animal feed (Directive 2001/46/EC) This text pays particular
attention to shortcomings in the manufacturing processes, as
any possible presence of contaminants would be the result of
manufacturing problems. Moreover, the marketing of mixed
feed for animals (79/373/EEC) is also currently under review (4).
This should make it easier to identify the raw materials used in
plant oilcake.

2.6.
As far as the presence of GMOs is concerned, there is
currently a ban in the European Union on the use of new
GMOs in human foodstuffs and animal feed. Nevertheless,
comprehensive Community legislation for managing this
health risk has now reached the last stage of the legislative
process. Directive 2001/18/EC provides Community bodies
and Member States with procedures for monitoring the
possible long-term effects of GMOs on the environment.

2.7.
On 25 July 2001, the Commission submitted a draft
regulation on genetically modified food and feed (5). Without
anticipating the Committee’s opinion on this proposal,
it
would note here that the draft regulation is based on the
fundamental principles set out in the White Paper on food
safety:

— a single risk assessment process for environmental risks

and risks to human and animal health;

— a single risk management process, involving the Com-

mission and the Member States;

— better information for the consumer by means of suitable

labelling.

(1) COM(2001) 148 final./2.
(2) OJ C 204, 18.7.2000, p. 21.

(3) OJ C 193, 10.7.2001, p. 42.
(4) OJ C 140, 18.5.2000, p. 12.
(5) COM(2001) 425 final.

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2.8.
As regards the presence of GMOs in imported raw
materials, the European Union approved the Cartagena proto-
col on bio-safety. This protocol only governs trade between
countries in modified living organisms. It is for this reason
that the Committee would stress that the European Union
cannot allow this inconsistency to continue for long: it is
importing raw materials containing some quantity of GMOs
but is banning the use of GMOs in crops within the EU.

2.8.1.
Nevertheless, the problem of GMOs in oilseed cake
has to be seen in perspective, as it should be pointed out that
even if the DNA is present at the end of the manufacturing
process, it is destroyed in the cooking process which immedi-
ately follows grain crushing and oil extraction. The oil, for its
part, does not contain any DNA from GMOs. After a period of
more than six years during which oilseed cake has been
consumed, no incident of any type has been reported. One
must nevertheless maintain a watchful eye. Lastly it should be
pointed out that initiatives have been taken to develop GMO-
free production sectors which guarantee traceability and for
which the associated costs are higher. These sectors may grow
if consumers agree to pay the higher prices.

3. Second issue: security of protein supplies for animal

feed

A. The situation worldwide

The European Union imported 34.3 million tonnes of
3.1
oilseed cake during
year,
26.3 million tonnes of which was soya cake. The EU is the
foremost importer on the world market, importing 40 % of
the market supply.

the 1999/2000 marketing

3.2.
The relationship between supply and demand is at
times under stress; as a consequence the risk remains that
supplies might run short.

3.3.
In the 15 years between 1985 and 2000, world
production in protein-rich substances increased by 60 %. At
the same time, world trade in these products increased,
amounting to 53 % of world production, as compared to 14 %
for cereals.

3.3.1. World trade in oilseeds is now almost the same in
value as trade in cereals, with a turnover of around 55 billion
dollars per annum (1). Supply of this commodity is concen-
trated — geographically speaking — in three countries, namely
the United States, Brazil and Argentina, which between them
make up 80 % of world production.

3.4.
The effects of this geographical concentration of supply
have been accompanied by a fall in the number of economic
operators in the market. In the United States, which puts out
45 % of world production, fewer than five industrial groups
alone account for 90 % of crushing capacity. There have been
similar developments in the seed sector.

3.5.
Soya has rapidly become the main resource of protein-
rich substances. The relative share of protein-rich substances
other than soya in world trade is steadily shrinking. It dropped
from 27 % in 1985 to 22 % in 2000.

3.6. World demand has rapidly diversified and is growing
by 4 % to 5 % per annum. Demand is very dynamic compared
to the world cereal market which has been stagnating since
the 1980s. Until the mid-80s, the European Union accounted
for more than 64 % of all imports. Nowadays it imports less
than 40 % as new buyers have emerged,
including China
whose imports today account for more than 10 % of trade in
this sector. The United States and Brazil have also boosted
their white meat production sectors and consequently use a
greater proportion of their own production.

3.7.
In addition it should be noted that meeting human
protein consumption requirements in the emerging countries
initially entails using plant protein (consumed as such). As
soon as they have the means to do so, people in these countries
gradually increase their consumption of protein from white or
red meat. However, since between two and three units of plant
protein (from protein-rich substances) are needed to make one
unit of animal protein (in the form of white meat) (2), it is clear
that economic development entails increased and more rapid
consumption of plant proteins. Therefore the economic emerg-
ence of countries — especially those in Asia — can again
trigger an imbalance between supply and demand on the
world market, as happened in 1973. Such is the case with
China which is regularly increasing its imports of soya oilcake.

3.8.
The Committee notes that the situation at the end of
the 1973 embargo caused Europe to take measures to limit its
dependence so as to minimise economic and food supply risks.
This situation which considerably improved subsequently,
thanks to the policy implemented at that time,
is again
deteriorating because of the decisions taken as a result of
Agenda 2000. In fact, the major cut-backs in aid are discourag-
ing farmers from cultivating oilseed and protein crops. This is
leading to a situation where the European Union is becoming
increasingly vulnerable. The Committee therefore remains
sceptical about the idea that there would be only benefits and
no risks for economic operators in obtaining nearly all their
supplies of protein-rich plant substances on the international
market.

(1) This is an estimate calculated on the basis of world trade in
oilseeds for the 1999/2000 season and the average market price
of the different substances.

(2) This ratio is the one used for poultry meat, pork and eggs
with feed from protein-rich substances. The ratio is higher for
ruminants in so far as their feed comes from grasslands and
fodder which have a much lower concentration of proteins.

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3.9.
The concentration of supply in certain countries
necessarily entails a climatic risk; if this risk should materialise,
it could be long-lasting and cause farmers in these countries to
alter their output (by reducing the acreage used for such crops).
This climatic risk, although a very real one (this was the basis
for the 1973 embargo decision), has never been taken into
account by the Commission either in its policies or in its
decisions. In addition it should be noted that in value terms,
purchases of plant protein from third countries constitute a
major item of the Community’s trade deficit.

B.

European plant protein requirements in relation to developments
in meat consumption

3.10.
Another effect of European consumers’ crisis of
confidence has been to speed up the partial shift away from
red meat consumption to white meat; this was already a long-
term trend.

3.10.1.
The European Commission’s Agriculture Director-
ate-General published a forward study in July 2001 (1) on the
European agricultural market situation. This indicates that
pork and poultry production will undergo sharp increases:

period: 2001-2008

beef

pig meat

poultry

sheep meat

Changes in
consumption

Changes in internal
production

+ 9,6 % (*)

+ 5,8 %

+ 13 %

+ 2,7 %

− 2,8 % (*)

+ 6,8 %

+ 11,6 %

+ 1,9 %

(*) The uneven developments in production and consumption in the beef
sector are explained by a recovery in red meat consumption towards the
end of the 2001-2008 period.

3.11.
These animal production sectors are major consumers
of protein-rich and energy-providing substances. Nevertheless,
the European Commission has based its CAP reform on the
level of cereal competitiveness in relation to substitutable
in order to anticipate changes in the
imported products,
demand for cattle feed.

3.11.1.
The Commission working document on supply and
demand in protein-rich plants in the EU (2) specifies that
demand per fodder unit should increase by 2.5 million tonnes
for the 2000/2001 marketing year, due to the cumulative
effect of withdrawing meatmeal from use and the shift in
consumption towards white meat. As a result of this increase,
an extra 4 million tonnes of cereals are likely to be used in
fodder, and an extra 1 to 1.5 million tonnes of soya cake will

(1) European Commission, 2001, Prospects for agricultural markets

2001-2008, Brussels.

(2) SEC(2001) 431.

be needed. In the long term, internal demand (1) for animal
feed would focus mainly on cereals and to a greater extent on
wheat (up 17 % between 2001 and 2008).

3.12.
The Committee refutes the argument that the effects
of white meat consumption and the abolition of meatmeal will
have a greater impact on the demand for cereals (energy
requirements) and to a lesser extent on protein-rich substances.
With the limitations of animal husbandry techniques, and
unless there are any major technological advances, the knock-
on effect on the demand for cereals will be similar to the effect
on the demand for substances rich in plant protein.

C.

Foreseeable changes in acreage under oilseed and protein crops
post-Agenda 2000

3.13.
This foreseeable increase in the demand for substanc-
es rich in plant protein contrasts with the Commission’s
forecasts (1) which predict a fall in the acreage under oilseed
(4,8 million hectares in 2002 falling to 4.6 million hectares in
2008). As a result, any increase in production volume would
only be associated with an increase in plant productivity.

the same level

In economic terms, if the acreage under oilseed in
3.13.1.
the European Union is kept at
for the
2000-2001 season (5 260 000 hectares, as estimated by
COPA/COGECA — Committee of Agricultural Organisations
in the European Union/General Committee for Agricultural
Cooperation), it would not be possible to regain the level
reached before implementation of Agenda 2000. It emerges
from analysis of this point that the shrinking acreage under
oilseed and protein crops is a general phenomenon throughout
the European Union except in the new German Länder (federal
states), which cut back their production potential when
they joined. This restriction no longer applied as from the
2000/2001 season. Apart from localised increases in acreage
under oilseed and protein crops, the general trend has been
downward: in France –7,5 %; in Italy –1,5 % and in Spain 0 %.

3.14.
The Committee would underline that the prospects
for acreage under these crops for the 2001-2008 period within
the European Union remain 0,4 million hectares below
the production potential authorised under the Blair House
agreements. This contrasts with the expected increases in
demand for substances rich in plant protein. It also reinforces
the idea that the upward trend in the meat production sector
will be weakened by a fall in the EU’s degree of self-sufficiency
in plant proteins as part of Agenda 2000. The European Union
is thus in a unique situation because it is implementing a set-
aside system for crops for which it is experiencing a serious
shortfall. The move to abolish ‘specific aid’ for oilseed as a
result of Agenda 2000 should have enabled the European
Union to regain its leeway in international negotiations and
render the Blair House agreements null and void.

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4. Third issue: Will integrating the CEEC into the EU

change the situation?

4.1.
If the situation of the applicant countries is brought
into the equation, will this change the analysis? Insofar as the
negotiations should be concluded by 2003, one can reasonably
expect that most of the applicant countries will have joined
the European Union by 2008.

4.2.
The degree of self-sufficiency of the applicant countries
is higher than that of the European Union, since it was around
80 % in 2000. However, these countries still export their
oilseed because their crushing machinery is obsolete. They
therefore import soya cake in large quantities for their livestock
sector. With the application of Agenda 2000, it is expected
that their oilseed exports will remain stable.

4.3.
Although the accession of the applicant countries
would raise the EU’s self-sufficiency in plant proteins to
nearly 28 %, the Commission (1) is forecasting a fall in their
production levels and a shift towards cereal production from
2008 onwards.

4.4.
It is important to offer those applicant countries with
a large farming sector the option of increasing their production
of oilseed and protein crops for their own market and also for
the European market, which would provide them with an
unlimited outlet. If this approach is not taken, there is a real
risk of a further increase in cereal production. As a result,
either outlets will have to be found on the already saturated
world market, or a higher set-aside rate implemented. There-
fore, incentives to produce oilseed and protein crops could
provide the beginnings of a common policy in these countries
which have genuine production potential (rape seed and pulses
in the north and sunflower seed and soya in the south). At the
same time, Europe’s position in plant proteins could be
improved and the applicant countries could be offered a
genuine development and market opportunity. Here too, the
European Union should be careful at the next WTO nego-
tiations to ensure that the EU applicant countries benefit from
extensive production potential. This also entails a review of
the references based on previous years which are unfavourable
to them.

5.

Fourth issue: aspects to build into a strategy for
sustainable development

to an increase in the acreage under cereals due to direct aid for
arable crops being aligned on cereal aid. Indeed the abolition
of specific aid to oilseeds, the sharp drop in aid to protein
crops and the lack of any safety net in the event of a drop in
prices all make these crops less attractive and more risky as a
source of income. If this situation should continue it will
provide an incentive to single crop farming.

5.2.
From an agricultural viewpoint, oil-bearing and pro-
tein-bearing crops are most valuable for maintaining soil
structure. In so doing they the limit susceptibility to surface
sealing (a factor which accelerates soil erosion). It is for this
reason that these crops are usually used as ‘break crops’.

5.3.
These crops overall require fewer inputs. As far as
fertilising is concerned there is virtually no need for mineral
nitrogen to be used. Therefore incorporating these plants into
crop rotation cycles brings down the overall quantity of
nitrogen needed. Smaller amounts of plant health products are
needed than for other crops.

5.4.
Some protein crops (high protein spring peas) stay in
the soil for less time than others. As a consequence there
might be concern about increased soil susceptibility to leaching
after harvests. In practice this is not a concern because in most
cases cereal crops are sown in early autumn after the pea
harvest. Therefore in the very rare cases where the next crop is
only sown in the following spring, an interseason crop must
be planted to secure soil cover, enriching it with organic
substances.

The Committee notes that from an environmental
5.5.
viewpoint, the 1999 CAP reform encouraged the development
of single crop farming practices, which runs counter to
sustainable development. Steps should be taken to provide
incentives to secure a better balance between oil-bearing and
thus maintaining a
protein crops and cereals or maize,
balanced system of crop rotation which ensures environmen-
tally friendly cropping practices.

B. The non-food productive sector: an asset for the environment

and expanding market

A.

Effects of support for oil-bearing and protein-bearing plants

5.1. Maintaining oilseed and protein crop production
potential also affects environmental issues and the balance of
economic activities in the EU. Implementing Agenda 2000 led

(1) European Commission, 2001, Prospects for agricultural markets

2001-2008, Brussels.

5.6.
Oil-bearing plant production gives rise to two co-
products, namely vegetable oil and oilcake (used in animal
feed). Nevertheless the market in vegetable oil as a foodstuff is
not expanding as the protein crop market is. There would
therefore be considerable economic value in developing the
non-food sector by growing crops on land which has been set
aside. In the year 2000, 836 000 hectares in Europe were
given over to crops grown for non-food purposes.

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Developments

in lipochemistry have meant

5.7.
that
several biodegradable products have been created (surfactants,
intermediates). Industrial
lubricants, solvents and chemical
demand in the detergents sector is currently very strong. The
bio-lubricant market is still emerging. Bio-lubricants seem to
have promising prospects for 4-stroke engines. The Com-
mittee stresses that all these products fit into the European
strategy for sustainable development. Promoting the pros-
pects for these products and demonstrating their capabilities
should help speed up the development of this productive
sector.

5.8.
The second outlet for vegetable oils in the non-food
sector is in the production of methyl ester, bio-diesel or
diester. These products could meet two major requirements
at European level. First of all they could help reduce the
European Union’s energy dependence on oil products. Recent
increases in oil prices have demonstrated how vulnerable the
European economy is to changes in the supply costs for this
energy source. Thus, developing biofuel
in general could
represent one solution for making the EU less vulnerable.

These products

can also help to combat

5.9
the
greenhouse effect. The eco-balance of diester indicates that
one hectare of oil-bearing plants used for this purpose will
is produced (this
mean that 2,71 tonnes
calculation does not
take the use of co-products into
account). Moreover the total energy produced by methyl
ester and its co-products is 2,65 times greater than the
energy used in its production.

less CO2 (1)

5.10
Hitherto progress in the non-food side of oilseed
production has occurred where there has been exceptional
authorisation for production on set-aside land. The Committee
regrets that the EU rules governing this production sector
are inadequate. Indeed the administrative monitoring system
deters farmers wishing to plant crops on set-aside land for
non-food purposes. Since these prospects (lipochemistry and
biofuel) are of considerable importance for the whole Com-
munity, the Commission must change tack and steadfastly
propose a suitable regulatory and fiscal framework for these
product outlets which have proved their worth despite the
regulatory handicaps.

6. Options for a plan for protein crops at Community

level

A. Background

6.1.
Following the conclusions of the Nice summit, which
called on the European Commission to look into possible steps
to boost the cultivation of oilseeds and protein crops, the
Commission published a communication in March 2001
setting out possible options for promoting the cultivation of

(1) Source: PROLEGA, study done by Ecobilan between 1991 and

1993.

plant proteins in the EU. The various opportunities under
discussion are as follows:

— specific aid of EUR 12 per tonne for oilseed production

would mean a budget cost of EUR 474 million;

— increasing specific aid by EUR 6 per tonne for the
production of protein crops would mean an additional
budget cost of EUR 47 million; and

— increasing the maximum guaranteed quantity for dried
fodder by 10 % would entail a budget cost of EUR
13,7 million.

6.1.1.
In its conclusions the Commission underlined that
the budgetary outlay which could be agreed on would still not
secure an outlet for production of these crops, since their
opportunity cost on the world market was lower than that of
soya meal (soya cake).

First of all

the Committee would point out

the
6.2.
limitations of the Commission’s analysis. The opportunity
costs of the production of crops with a high economic value,
over and above their protein value, have been overestimated.
In fact oilseed also yields oil (40 % for rape seed and sunflower
seed). This must be taken into account when calculating the
opportunity costs. The effect of this would be to cut the costs
set out in the Commission document by at least a half.

6.2.1.
Forward studies based on world prices are always
subject to debate. This market is highly variable and during
this last summer,
for example, depending on the period
chosen, the Commission’s conclusions could have looked
markedly different.

6.2.2.
The Commission has not looked into the possibility
of producing protein-rich oilcake through the production of
biofuel. Co-products of this sector are used in animal feed. In
promoting this production sector, oilcake production has to
be analysed differently because it
is part of an overall
calculation which takes account of a whole series of elements.

6.2.3.
Lastly, the Commission has neither assessed nor
taken into account the risk that it is imposing on the European
livestock sector by increasing its dependence on imported
plant protein and subjecting it to world market price volatility.
The historical background to this market shows that
in
addition to the major upset in 1973, the cost of proteins has
remained extremely high over several periods.

6.3.
The Commission’s budgetary analysis should therefore
be seen in the light of the above criticisms. Moreover the
Committee cannot agree with the Commission’s conclusions
when the only criterion it bases its guidelines on is the

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opportunity cost. This approach runs counter to the funda-
mental principles underlying the Common Agricultural Policy
and does not correspond to the principles advocated for future
WTO negotiations (on taking social and environmental costs
into account).

for raising aid by EUR /T and EUR 220 million for raising aid
by EUR 27,5/T. The Committee’s proposal would therefore
entail additional costs of around EUR 100 million for
additional acreage of around 150 000 hectares.

6.4.
For this reason, the Committee proposes that the
Community plan for giving a new boost to protein-rich crops
must take into account the shortcomings introduced by the
implementation of Agenda 2000 as regards three major
aspects: encouraging good farming practice, securing a reason-
able budgetary cost and upholding international agreements.
The aim of this plan is to maintain and develop a diversity of
plant protein crops. Such diversity matches the options
available to European agriculture which has a rich variety of
agro-climatic conditions. It is also in line with the needs of the
European livestock sector and favours the development of
short production chains and the complete traceability of
foodstuffs.

6.4.1.
Such a plan for giving a new boost to plant protein
crops in the Community will necessarily involve additional
budgetary resources. Nevertheless the Committee deems it
preferential to support these sectors for which there are
potential outlets on the European market and which therefore
offer greater economic prospects than would be achieved by
developing those sectors which target only the world market,
with all the disadvantages that this option would entail.

B. Developing protein crops

6.5.
Agenda 2000 provides for specific support for protein
crops in addition to uniform aid, but overall aid for production
of these crops is falling sharply and this has led to a lack of
interest in producing these crops. Thus, total acreage under
crops in the year 2000 was 11 % lower than in 1990.
Production too has fallen by 25 % over 10 years. It therefore
seems vital that this production potential, which did have
outlets before the CAP reform, should be regained at European
level.

6.6.
Insofar as the Blair House agreements do not affect
these crops, the Committee would stress that maintaining an
aid differential of the order of EUR 20/T would provide a new
incentive to farmers to grow these crops. Specific aid for
protein crops could be increased by EUR 11/T. This aid could
also be based on the agricultural value of these plants in the
crop rotation cycle; it could be incorporated into the second
pillar of the CAP.

6.7.
From a budgetary viewpoint, the two Commission
options represent additional costs of between EUR 47 million

The Committee would stress that lupinus luteus variety
6.8.
should receive the same support as lupinus alba and anhustifola.
This plant is well adapted to the Mediterranean climate because
it is resistant to drought and fungal diseases. It also has a key
role to play in improving soil structure. It can likewise play an
important part in preventing forest fires and is good for
extensive livestock farming.

The Committee would point out that in its opinion on
6.9.
organic fodder legumes produced on set-aside land (1),
it
deplored the narrow scope of the Commission’s proposal. It
proposes that these crops be authorised for all farms without
any restriction being placed on the production methods used,
given their capacity to adapt to dry climates and their value
for the environment.

C. Developing the non-food production sectors

6.10.
Diversity in the supply of protein-rich substances can
also be assured by the diverse origins of oilcake (oilseed)
and spent grain (ethanol production). The market in fatty
substances of plant origin is closely linked to developments in
the palm oil market. The development of non-food outlets
therefore seems to be the only conceivable option. This
approach would mean an increase in co-products which can
be used in animal feed. Consequently an increase in the use of
biofuel would help counter the greenhouse effect and reduce
the European Union’s dependence on imported plant proteins
(such a contribution to cutting back CO2 will have to be
calculated and its value highlighted).

6.11.
At present, developments in the use of diester are
mainly determined by the tax situation of biofuel. For this
reason either the tax status of biofuel ought to be consolidated
at Community level or there ought
to be a minimum
incorporation level applied for fuel. The rules governing these
sectors also ought to be reviewed to provide farmers with
incentives to grow these crops, rather than deterrents, as is
currently the case.

(1) Committee opinion on the proposal for a Council Regulation
amending Regulation (EC) No. 1251/1999 establishing a support
system for producers of certain arable crops (COM(2001) 87 final
— 2001/0043 CNS), — 2001043 CNS of 25.4.2001 published
in OJ C 193, 10.7.2001, pp. 42-44.

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D. Maintaining competitiveness over soya cake

6.12.
Although Agenda 2000 means that this sector will
no longer be subject to the Blair House agreement constraints
as from the 2002/2003 marketing year, the implementation
of the Agenda entailed cut-backs in support for oilseed crops.
Furthermore, the Committee underlines the effects aggravated
by the dropping of regionalisation measures for support for
oilseed crop production which some Member States had
adopted. This changed the balance of
farming activities
between various regions.

6.13. Moreover, this sector is also facing external compe-
tition due to the increases in American support for its own
oilseed sector. American producers are receiving aid per
hectare and a minimum guaranteed price because aid is
coupled to world prices in the form of a marketing loan
(differential between a minimum price and the world market
price). The major disadvantage of the aid scheme set up in the
United States is that it distorts the equilibrium on the world
market (the US produces 45 % of the world’s oilseed output).
It should also be pointed out that in the United States soya
yield is far lower than maize yield and as a consequence soya
prices should be 2 to 2.5 times the price of maize. If soya
prices are twice that of maize, then maize production will rise
to the detriment of soya. If the ratio is 2.5, soya production
will grow to the detriment of maize. The United States, having
deemed the soya market to be more profitable, is carrying
out a policy which encourages the development of soya
production. At the same time the European Union, in applying
Agenda 2000, is doing the exact opposite.

6.14.
As long as this system continues as it is, the European
Union will be forced to adopt a system which could take one
of two forms:

— It could set up a safety net, which already exists in the
cereals sector but not in the oilseed sector. (This could be
based on the arrangements in the United States, namely
additional aid per tonne when prices are low and no aid
when prices are high. One objection raised will be that
this proposal runs counter to the Marrakesh agreements,
but the system applied in the United States also does. This
matter must be clarified at the next WTO negotiations.)

— It could look into an income guarantee system which is
one solution being studied in many non-Member States
and could be tried out in the European Union in the
oilseed and protein crop sector.

rotation, where a certain percentage of acreage would be
earmarked for them to grow oilseed and protein crops. This
incentive, which could be called ‘rotational aid’ would therefore
have the advantage of not raising any particular problems with
WTO rules. The advantage of this option is that it encourages
good crop farming practices while increasing the acreage
under oilseed and protein crops. This option is currently
being studied by the Commission; it assumes a contractual
undertaking by producers but the hope is that the administrat-
ive constraints that might be necessary would not act as a
deterrent. This suggestion does not represent a specific solution
to the issue of EU supplies of plant protein but it would help
indirectly by making these crops more attractive in the
rotational cycle.

6.16.
Research into oilseed and protein plants is recent, be
it research into the creation of new varieties, farming practices
or their use in animal feed. In the Union’s research programmes
priority ought to be given to helping this sector.

7. Conclusions

7.1.
Until the mid 1970s the European Union’s food supply
dependence on vegetable oil steered the Common Agricultural
Policy towards boosting the oilseed sector; requirements in
protein-rich substances for cattle feed were not deemed to be
a strategic factor at that time. Since then the importance
attached to the oilseed and protein crop sector in the
Community has given way to an emphasis on food safety,
steps to combat the greenhouse effect and consideration of
environmental interests in farming activities.

7.2. Moreover, the increase in meat consumption in Europe
has highlighted the EU’s deficit in plant proteins. The degree
of self-sufficiency has again fallen since 1992. This being the
case, the Committee stresses the weaknesses of a Community
strategy essentially based on obtaining supplies on the world
market. In fact the supply and demand situation is becoming
more and more skewed towards the main producer countries:
soya production is becoming geographically and economically
concentrated with all the climate risks that this entails, soya is
predominant in world trade and new countries are emerging
which are major soya consumers.

E. Making use of the second pillar of the CAP

6.15.
The second pillar of the Common Agricultural Policy
could be used to encourage farmers to practise balanced crop

The Committee would point out, in connection with
7.3.
enlargement, that the applicant countries also have a shortfall
of plant proteins. The Committee therefore recommends that
the Commission pay special attention to developing these
countries’ production of plant proteins, which would first and
foremost be of benefit to their own markets but would also
benefit the European market, which would provide them with

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an unlimited outlet. This could constitute one of the first
building blocks for the implementation of a common policy
in these countries.

Nevertheless, developing the oilseed sector in the
7.4.
applicant countries must not be allowed to conceal
the
increased vulnerability of the white meat sector in Europe,
in the degree of self-sufficiency
caused by a steady fall
since 1992. The Committee therefore recommends that the
European Commission set up a ‘plant protein’ plan at Com-
munity level, as part of the mid-term review of the Common
Agricultural Policy. This would comprise the following
elements:

— measures to promote protein crops: efforts should be
made to re-establish fair incomes from these crops so as
to halt their decline and boost their development;

— measures to encourage the development of non-food
sectors (1): steps to develop the non-food uses of oilseeds
target several objectives:

— contributing to compliance with the Kyoto agree-

ments;

— developing new, more environmentally-friendly

products;

— producing plant proteins by means of oilcakes

which are co-products of oil;

— steps to set up a safety net to help oilseed and protein crop
producers: the lack of any arrangements for providing
producers with a minimum of security is a key factor in
farmers’ reluctance to produce these crops. This market
is highly volatile and is also distorted by the main world
producer country, where farmers are protected from
major price fluctuations. The proposed solutions warrant
more in-depth study in order to ensure they are compat-
ible with international agreements.

(1) The European rules on the drawing board will introduce either

tax concessions or mandatory incorporation.

Brussels, 16 January 2002.

— efforts to make use of the second pillar of the CAP:

— imbalances between plant crops have worsened with
Agenda 2000 (no safety net for oilseed and protein
crops). These have led to single crop farming with
cereals or maize. It is proposed that this trend be
corrected by means of measures which encourage
proper crop rotation. It is likewise proposed that
lupinus luteus be designated a protein-producing
its valuable drought resistant
plant because of
properties in Mediterranean areas, and that
the
measure authorising the planting of small-seed leg-
uminous vegetable crops on set-aside land be
extended without
restrictions on production
methods;

— steps should be taken to put in place a specific
these crops are relatively

research programme:
‘recent’. They merit specific research efforts.

7.5.
This package of measures proposed by the Economic
and Social Committee may not appear to be highly ambitious.
The aim is not to produce all of the EU’s domestic requirements
within the Union — even in an enlarged Union — far from
that. There will still be a major market available to the United
States and Mercosur. Faced with a multi-faceted problem (food
safety and security of food supply, the need to find a response
to food and non-food requirements and the need to promote
sustainable agriculture), the objective is to learn the lessons of
the recent past and then provide European farmers with new
prospects, producing the crops that the Union needs and doing
so by taking on board good practices while earning a fair
income at the same time.

7.6. When Agenda 2000 was concluded, it was decided to
review the oilseed and protein crop issue during the medium
term review of the CAP. That moment is now nearly upon us
and it is an opportunity for the responsible EU bodies to send
out a signal of hope. The Committee would nevertheless stress
the urgent problem of the forthcoming harvest, and asks that
the specific aid system governing the 2001/2002 marketing
year be retained on a transitional basis pending the introduc-
tion of new measures for the sector.

The President

of the Economic and Social Committee

Göke FRERICHS