CELEX: 51992PC0094(37)
Language: en
Date: 1992-03-24
Title: Proposal for a COUNCIL REGULATION (EEC) amending Regulation (EEC) No 1079/77 as regards the co-responsibility levy on milk and milk products

COMMISSION OF THE EUROPEAN COMMUNITIES
                                     C0M(92) 94 final - VOL. I
                                     Brussels, 24 March 1992
                COMMISSION PROPOSALS
       on the prices for agricultural products
          and on related measures (1992/93)
                       VOLUME
                Explanatory Memoranda
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The Commission submits herewith its proposals for the agricultural prices for
1992/93 and for certain related measures. The text is in three parts :
Volume I     : Explanatory memoranda
Volume II : Financial implications
Volume III : Legal Instruments
                               Contents of Volume I
                                                                   Page
Introduct ion                                                        4
A. General considerations
   I.     General economic situation                                 5
   II.    The agricultural economy in 1991                           5
    M l . Outlook for the agricultural markets                       8
          (a) Community markets                                      8
          (b) World markets                                         10
    IV.   Price proposals and related measures for 1992/93
          market I ng year                                           12
   V.     Agr i-monetary measures                        .*.        13
   Vi.    Financial implications                                    14
B. Explanatory memoranda, by product
     1. Cereals                                                     15
     2. Rice                                                        19
     3. Sugar                                                       20
     4. Olive oil                                                   25
     5. Oil seeds and prote i n crops                                28
     6. Text! le fibres                                             29
     7. Wine                                                        33
     8. Fruit and vegetables                                        34
     9. Tobacco                                                     35
    10. Milk sector                                                 36
    11. Beef/Veal                                                   37
    12. Sheepmeat and goatmeat                                      38
    13. P igmeat                                                    39
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                                                             Paoe
C. Annexes
   Annex 1: Report on the operation of the system of aid
            for cot ton                                       40
   Annex 2: Commission report to the Council on the
            situation with regard to the production and
            marketing of certain varieties of tobacco         53
D. Tables
   1.   Price proposals in ecus for the various agricultural
        products                                              58
   2.   Argr(monetary proposals 1992/93                       63
   3.   Effect of Commission proposals on support
        prices for agricultural products expressed in
        ecus and in national currency                         64
   4.   Stabilizers and production thresholds                 65
   5.   Trends in economic indices from 1980
        to 1990 in real terms                                 68
E. Figures
   Fig. 1: Net value added per person employed in
           agriculture                                        69
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introduction
In November 1991 the Commission presented detailed proposals to the Council
and to Parliament for the reform of several market sectors (arable crops,
milk, beef, sheepmeat and tobacco). These proposals have been the subject of
lengthy discussions in the Council and In Parliament and the Commission must
insist that decisions be taken In these matters without further delay. In
order to facilitate this process - which is essential to enable the Community
to come to terms with existing market imbalances and prevent rapid increases
in budgetary costs - the Commission is putting forward a set of price
proposals which represent In essence the maintenance of the existing rules.
Thus, except in a few cases where changes have already been decided In
principle or are provided for in existing legislation, the Commission Is
putting forward a set of price proposals which for the 1992/93 marketing year
will maintain In place the present stabilisers, prices and producer levies.
The proposals on the dismantlement of MCAs are designed to facilitate the
Community's single market objective to remove controls at frontiers by
1 January 1993.
 ---pagebreak---                                      - 5 -
A.   General considerations
I-   General economic situation
1.   As in the rest of the world, economic growth in the Community slowed
     significantly in 1991. On average, economic activity Is estimated to
     increase by only 1.3X in real terms in 1991, against 2.8X In 1990. A
     moderate recovery to 2.2X is expected In 1992, accelerating to 2.4X In
     1993.
     Employment growth slowed sharply to 0.5X In 1991 and appears likely to
     reach a standstill in 1992. As a result, given the strong growth in the
     size of the labour force, the rate of unemployment Is forecast to
      increase steadily over the period 1991-93, reaching 9.2X In 1993,
     compared to 8.4% in 1990.
     For the Community as a whole, inflation (implicit deflator of GDP) is
     forecast to fall from 5.7X in 1990 to 5.5X in 1991. During 1992 and 1993
      inflationary pressure is expected to moderate, leading to further falls
     to 4.6X and 4.4X respectively. Nevertheless inflation rates differ
     widely within the Community, with certain Member States (namely Greece
     and Portugal) still experiencing double digit inflation and others
     (Denmark, Netherlands, France, Belgium, Ireland and Luxembourg) with a
     rate of inflation below 4X in 1992.
 11. The agricultural economy in 1991
2.   After the sharp improvement experienced in 1989, 1991 was the second
     consecutive year in which the agricultural situation in the Community
     was seriously affected by the deterioration of markets and a sharp
     rebuilding of stocks. As regards weather conditions, productivity and
      level of output, the 1991 agricultural year, while not exceptional, may
     be counted among the good years for Community agriculture. Nevertheless,
     difficulties experienced in some markets hindered the achievement of
     satisfactory results In terms of farm incomes. This proves once again
     that restoring a durable equilibrium in agricultural markets is a
     crucial condition not only in the positive development of incomes but
     also if aggravation of the present crisis of Community agriculture is to
     be avoided.
3.   Due to more favourable weather and the consequent increase in yields,
     crop production in 1991 was in general higher than in the previous year.
     Cereal production increased by almost 6X relative to 1990, leading to
     around 181 million t In 1991. The highest production increases were for
     durum wheat and grain maize, rising by 43X and 15X respectively from
      1990 levels. Soft wheat production exceeded 81 million t (4X more than
      in 1990).
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Given the increase in cereal production and a slight decrease in
consumption, especially for animal feed, the market imbalance already
existing in this sector is expected to increase steadily during the
current marketing year. Taking into account the carryover of stocks at
the beginning of the 1991/92 marketing year one could estimate that the
surplus of available supplies over total Internal use of cereals will
approach 80 million t In 1991/92 compared to 66 million t In 1990/91. As
the possibilities of export on the world market are relatively limited
the 1991/92 marketing year will end with a sharp Increase of about
10 million t In cereals stocks which will continue to depress the
market. The situation worsened, in particular, for durum wheat (for
which self-sufficiency now exceeds 200X), for common wheat and for
barley.
A fall In sugarbeet area and yields has led to lower sugar production
than the previous year, but it Is still well above Internal consumption.
Sunflower seed production was relatively stable at around 4.0 million t.
Soya production fell by 0.5 million t. Largely as a result of record
yields in France, production of rapeseed, excluding production In the
new LSnder, reached a record of 6.4 million t and in the new LMnder
rapeseed production rose to 1 million t.
As a result of the spring frost, fruit production dropped by almost 20X.
For the same reason, wine production is expected to decrease by more
than 10X on average, reflecting particularly the drop In production in
France.
 In the animal products sectors, milk production is expected to fall, due
 in particular to a 2X cut In milk quota decided in the context of the
 last price package. Although the drop in milk quotas during the last few
years has reduced the imbalance between production and consumption, and
special measures have been taken to encourage domestic consumption, the
milk balance expressed in milk equivalent still has a surplus of about
15 million t. Without special measures this figure would be 7 - 8
million t higher. Beef production continued to increase in 1991 by 4 to
5X and probably reached 8.6 million t, in line with the beef cycle which
 is now reaching its peak level. Beef consumption, on the other hand, has
dropped steadily during the last few years and it is now estimated at
7.5 million t, almost 1 million t under the level of production.
Production In most sectors exceeded the levels at wrTlch action under the
various stabilizer mechanisms is triggered. The cereals MGQ was
exceeded by more than 3X which will lead to a price cut of 3X in
 1992/93. Excesses were also recorded for wine, certain varieties of
 tobacco, cotton, nectarines, peaches, milk and pigmeat. In the oilseed
 and proteins sectors, full Institutional prices were reduced as a result
of the application of their MGQs systems, by 21X (rapeseed), 32X
 (sunflowerseed), 20X (soya beans) and 17X (peas and beans).
 ---pagebreak---                                        7 -
5.  Another sign of the increasing market Imbalances for most products is
    the continued growth in public stocks In the major sectors, after the
    sharp reduction in the late 1980s and In the first half of 1990.
    By the end of December 1991, cereal stocks exceeded 16 million t,
    compared to 12.8 million t twelve months before. In particular, stocks
    doubled for rye and durum wheat. For the first time In 1991 stocks of
    rice were also very high (more than 200 000 t on average). Stocks of
    butter and sklmmed-mllk powder which had practically disappeared by the
    beginning of 1990 Increased sharply during the 1990/91 marketing year
    and reached a peak exceeding 400 000 t and 500 000 t respectively in
    July 1991. By December 1991 stocks of both products had fallen again (to
    260 and 434 thousand t) as a result of a large export programme. Beef
    stocks, on the other hand, are continuing to Increase.and now approach
    one million t in spite of the extremely favourable pattern of exports In
    1991 (almost 1.1 million t ) . Only stocks of alcohol decreased sharply,
    due to a major sales programme and to the drop In production resulting
    from the bad weather over the last three marketing years. The dramatic
     Increase in intervention stocks since the second half of 1990 shows that
    we have again entered an era of oversupply, after a certain improvement
     in 1988 and in 1989, depressing the market situation and consequently
    affecting producer prices and farm Incomes.
6.  For the Community as a whole, producer prices are expected to rise in
    nominal terms by 2.7X relative to 1990. This means a fall of 3.5X In
     real terms on average. The drop in real output prices in 1991 is a
     result of falls of 0.6X and 7.7X in prices of crop products and animal
    products respectively. Sharp falls in real prices are expected for wine
     (-8.2%), milk (-6.6X), pigs (-6.7X), cattle (-10.OX) and sheep (-13.1%).
    Real prices of fruit, on the other hand, are forecast to rise by 10.1%
     following a poor harvest due to adverse weather conditions. Cereal
     prices are relatively stable (-0.6X) in real terms.
     Nominal input prices, on the other hand, are expected to rise by 4.OX,
    which means a drop of 1.5X in real terms (- 0.9X for fertilizers, + 3.8X
     for energy and - 3.5X for animal feedingstuffs). As purchases of goods
     and services account for only 45X of agricultural output, the fall In
     input price was not sufficient to offset the negative effect of the
     deterioration of producer prices on farm incomes.
 7.  According to the first estimates made by the Commission in mid-December
     1991, on the basis of data supplied by the Member States, average farm
     incomes for the Community are expected to have fallen in real terms in
     1991 for the second year running, after a sharp increase in 1989. For
     the Community as a whole, farm income fell by 4.8X in real terms If
     agricultural incomes are measured by the net value added at factor cost
     per work unit, and by 9.8X in real terms, If measured by the net Income
     per work unit of the farmer and his family, i.e. after deduction of
     wages, rents and interests. Graph 1, in the Annex, shows the trend in
     real terms of agricultural income by Member State since 1980, as
     measured by net value added at factor cost per annual work unit.
      In general, farm incomes declined for almost every type of farming, and
     especially for cereals, oilseeds, dairy, beef and pork.
 ---pagebreak---                                      - 8 -
III- Outlook for thu agricultural markets
(a) Community markets
8.   As in previous years, the Commission has carried out an analysis of the
     medium-term prospects (1997/98 marketing year) for the main agricultural
     markets. These forecasts take into account the impact on production of
     the changes In agricultural policies adopted In recent years (I.e. •
     quotas, stabilisers, set-aside, etc.) and are based on the assumption
     that current policies will continue unchanged. In addition, they Include
     the Impact of German unification. So, they could be viewed as a
     reference scenario for the future of agricultural markets In the
     Community in the absence of CAP reform, and assuming the continuation of
     present polIcy.
     The main conclusion which can be drawn from this analysis Is that,
     despite several reforms adopted during the second half of the 80's to
      Improve the balance between supply and demand In agriculture, the
     depressed Community market situation will continue and even worsen in
     the medium term If more effective measures are not taken.
9.   Medium term forecasts for cereals show that, in spite of the price
     reductions due to stabilisers and a reduction In area, In particular as
     a consequence of the current set-aside schemes, production should
     continue to increase although at a lower rate than in the past. Total
     cereal production Is forecast to reach around 189 million t by 1997,
     that is almost 10 million t more than the 1991 crop.
     As far as cereal consumption Is concerned, In spite of a slight increase
      in industrial use and possibly in human consumption, total internal use
      is expected to continue falling as a consequence of the decline in
     animal feed use (a drop of about 5 million t by 1997/98, which means a
     drop of 0.7 million t a year on average). Total Internal use should
     amount to about 140 million t in 1997/98, which would leave some 50
     million t to be exported.
10.  Medium term forecasts for oilseeds have been made on the basis of the
     price and MGQ system which applied in the period 1988/89 to 1991/92.
     These show that the reinforced MGQ system which was Introduced in 1988
     and which has held production to lower levels than would otherwise have
     been the case, would not, had It continued, have prevented a further,
     but more moderate, rise in production in the medium term. The full
      impact of the reform agreed in December 1991 cannot yet be assessed but
      it seems likely to lead to less intensive production and hence to lower
     production totals than the record levels observed in recent years.
 11. The medium term outlook for sugar will be Influenced by any changes
     which could be introduced in the quota system and by the prospects for
     world market prices. Assuming a no-change situation in these two areas,
      the production forecast for 1997 is 15.8 million t while consumption
      could reach 11.9 million t. Taking account of preferential and other
      imports the total exportable surplus would amount to 5.4 million t of
      which 2.2 million t would be C sugar.
 ---pagebreak---                                     - 9 -
12. Due to agronomic and climatic factors olive oil production fluctuates
    considerably from one year to the next. Total area should Increase
    slightly In the future due to the expansion In Spain and Portugal
    following Integration Into the Community regime. This, added to a small
    yield increase, should lead to production of about 1.5 million t In
    1997. On the other hand, overall consumption Is expected to Increase a
    little to 1.4 million t in 1997, giving a small surplus of production.
13. Despite the Community's efforts to diminish the European wine potential
    by means of grubbing up schemes, wine production In the Community
    accounts for some 190 million hi in a normal year (of which about 30X Is
    quality wine), but since 1988 wine production has fluctuated between 160
    and 180 million hi essentially for climatic reasons. The trend observed
    since 1977 suggests a slight increase in yield, compensated for by a
    decrease in the surface cultivated. As a result, production might fall
    to an expected level of 170 million hi in 1997. Wine consumption has
    been steadily falling since 1975 and this trend will probably continue
    over the next decade. If so, global human consumption would be around
    106 million hi in 1997/98, compared to 123 million hi In 1989/90. To
    this quantity about 12 million hi can be added for Industrial use. With
    consumption falling dramatically, particularly In the producer
    countries, the imbalance which already exists especially in the table
    wine sector is expected to increase steadily over the coming years and
    extend to some quality wines.
14.  In the absence of the reform proposed by the Commission, tobacco
    production should continue to Increase, In spite of the stabilizer
    mechanism, and reach 550 000 t In 1997/98. The excessive development In
    production of certain varieties already observed in the past could cause
    the most concern especially in terms of market imbalance and budget
    cost. The global reform of this market organisation proposed by the
    Commission should reduce such problems, maintaining total production
    within the bounds of the proposed quota (340 000 t ) .
15. Milk deliveries, as recorded in official statistics, are, In general,
    very close to the quota level. In the absence of any further reduction
    of quota and assuming that difficulties in the application of quotas in
    certain regions are overcome, one could assume that milk production will
    be close to the total quota level (97.6 million t excluding the five new
    Lander). As milk yield per cow Is expected to increase by 1.5X p.a., the
    dairy herd which now stands at 22.2 million head has to be reduced by at
     least 2 million by 1998 in order to keep deliveries within the quota
     Iimits.
    Assuming that special measures to promote internal consumption are
    retained, the long term trend within the Community Is for the total
    consumption of dairy products to remain relatively stable at
    87.5 million t (without the five new Lander). However, whilst there is
     increasing demand for fresh dairy products, soft cheeses and butter
    substitutes with some dairy content, the consumption of full-fat milk,
     hard cheeses and butter is declining. This, coupled with the ever-
     increasing fat content of milk produced (due to better animal husbandry
    and diet), poses major problems as the Imbalance between production and
    consumption continues to grow. It must also be remembered that without
     special measures normal consumption of milk would be about 8 million t
    below actual domestic use.
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16. Beef production Is expected to reach about 8.3 million t by 1998. Beef
    consumption has been stead Iy declining for several years resulting not
    only from specific reasons leading to temporary drops in demand, but
    probably also from a more structural change in consumer preferences.
    Total beef consumption dropped by almost 700 000 t between 1987 and 1990
    falling to a level which Is now well below the trend. In these
    circumstances, only If the market Image of beef is restored could one
    expect that the long term trend could continue, leading to global
    consumption of 7.7 million t In 1998. If this goal is not achieved, beef
    consumption will probably continue to fall to a level of about
    7.0 million t In 1998. In any case. In the absence of effective measures
    to control production and to promote demand, present market Imbalances
    will continue and probably worsen In the coming years.
17. Sheepmeat production has sharply Increased in recent years as a result
    of the expansion of the Community flock. Without any change in the
    present legislation, we can expect production to exceed 1.25 million t
     in 1998. The expectation for sheepmeat consumption is of a slight
    Increase. Total consumption should be around 1.5 million t in 1998.
    The consumption of pigmeat and poultrymeat is Increasing steadily and,
    given the ease with which production can respond to demand, a production
    forecast of 15.6 million t of pigmeat and 7.4 million t of poultrymeat
    for 1998 can be made. This allows for exports of 0.4 million t and
    0.26 million t for pigmeat and poultrymeat respectively with both
    sectors otherwise in balance.
(b) World markets
18.  In spite of a relative improvement In the second half of 1991, the
    situation and prospects of agricultural world markets at the beginning
    of 1992 are always heavily affected by the structural disequilibrium
    which exists for most products and by the Increasing difficulties of
    financing imports. Many countries are currently in a period of economic
    uncertainty. In particular, the extent of the agricultural problems and
     import requirements of the former Soviet Union remains largely unknown
    for the short as well as for the medium and long term. Nevertheless, it
     is clear that quantities delivered will depend largely on the
    willingness of exporting countries to grant credits or provide aid. At
    the same time, because of the lack of hard currency, some important
    markets in North Africa and Eastern Europe appear less reliable
    customers for western exports. In the latter case It must also be
    stressed that some, which were traditionally net importers, are likely
    to become net exporters of agricultural products in the medium term, as
    a consequence of efforts to promote greater market orientation for their
    economies. In any case, the Community has a primary responsibility to
    support their economies and to facilitate their integration in a wider
    European free trade area.
 ---pagebreak---                                     - 11 -
19. World cereal production Is forecast to fall by 6% compared to 1990,
    while still remaining the second-highest harvest on record. Wheat Is
    forecast at 547 million t, down almost 9%, and coarse grains at 795
    million t, down 4%. Although still declining In absolute terms,
    consumption Is set once again to exceed production In 1991/92. Prices
    remain firm for the moment due to the cut in production, relatively low
    stock levels and increased exports. The upwards tendency Is, however,
    being limited by large harvests In the EC and Canada and by uncertainty
    over the ability of some major importers to pay for Imports and to
    reimburse credits. In addition the present situation risks changing
    radically during the second half of the year as a consequence of the
     increase in production forecast in the USA.
    Assuming no change In policies, net export aval IIblI Ities in the OECD
    area are projected to Increase substantially over the period to 1996 to
    reach 163.3 million t, or 25X of production. When set against the likely
    commercial Import requirements these forecasts suggest the possibility
    of depressed cereal prices and continuing trade tension.
    World oilseed production for 1991/92 Is forecast at a record 222
    million t while consumption will reach about 220 million t. In the OECD
    area stocks are expected to increase by 1% while prices remain stable.
    Both world sugar production and consumption will increase in 1991/92 but
    at a reduced rate of annual growth. The marketing year will end roughly
     in balance or with a slight surplus. In the absence of trade reform it
    appears likely that In the medium term the market is set to continue its
    present cyclical pattern. World stocks should grow slowly while prices
    are expected to remain low.
20. While OECD milk output has fallen marginally, and Is forecast at 220
    million t, consumption has increased slightly above the rate of
    population growth. Stocks have risen as a result of reduced imports by
    the USSR and the Gulf region, and a fall in butter consumption. Between
    1991 and 1996 OECD production is expected to increase by 2.5X while
    milkfat consumption should increase at a higher rate. In spite of this,
    export availabilities should exceed 1.1 million t in 1996, corresponding
    to a self-sufficiency ratio of 115%. In addition, as a large percentage
    of OECD dairy exports are to the former USSR, economic reform In the
    Republics and their financial problems could have a iriajor impact on
     future dairy exports.
    Beef production increased in 1991 in OECD countries, while demand
    weakened as a result of poor economic growth and changing dietary
    habits. Consequently, stocks have increased and prices have fallen. In
     the medium-term, production is set to continue to grow at a higher rate
     than demand. As a consequence, export aval IibiI ities in OECD countries
    are expected to increase from under 1 million t to 1.3 million t in
     1996.
 ---pagebreak---                                     - 12 -
IV. Price proposals and related measures
21.  As is clear from the analysis of the current and prospective market
     situation, the Community Is facing a progressive deterioration of market
     balances. The precise budgetary effect of this deterioration will vary
     from time to time depending on conjuncture I market conditions. This
     year the conjunctural situation is somewhat better than last year, In
     particular because.of higher world market prices for cereals and some
     improvement In the world and, more particularly, the domestic market
     situation for dairy products. But these short term developments do not
     in any way remove this need to tackle the underlying tendency to greater
     market imbalance in the medium and long term. The Commission has
     presented the Council with a series of proposals for reform designed to
     confront these problems as they effect most of the major market sectors
     of the CAP and will make proposals for other sectors when this reform
     package has been accepted.
22.  The reform proposals change fundamentally the market organisations in
     several sectors, taking into account the need to ensure the
     competitivity of Community agriculture. Improve the distribution of
     agricultural support among farmers and reinforce measures to safeguard
     the environment. The aim of these measures is not Just to reduce
     agricultural expenses or to adapt in advance our policy to any
     international commitment which could be taken in the context of GATT
     negotiations, but essentially to have more effective instruments for
     bringing the markets into balance whilst safeguarding farm incomes and
     the rural economy. These proposals have been widely examined and
     discussed by the Council and the Parliament during the last few months.
23.  Formal conclusions have not yet been reached on these proposals but the
     need for fundamental reform is not in question. Indeed, in the absence
     of fundamental reform the Commission would be compelled to propose
     drastic changes in prices and support mechanisms. Such measures would
     bring the market back into balance but at a heavy cost in terms of
     producer incomes.
24.   In order, however, to allow the Council to concentrate its attention on
     the reform, the attached proposals provide essentially for the
     continuance into 1992/93 of the prices and stabiliser mechanisms as they
     existed in 1991/92.                                  v
25.   It should be emphasised, however, that some parts of the proposals
     contained In the reform proposals cannot be delayed and early Council
     decisions on the basis of these proposals Is presupposed in this
     package. For example. In the milk sector, the proposal is for unchanged
     prices. This proposal can only be maintained if, before 1st April, when
     the existing milk quota system expires, the Council has taken decisions
     to extend the quota system as proposed In the reform package. It would
     be quite impractical to support unlimited production at current price
      levels. Similarly, for cereals, the current proposal assume acceptance
     of the proposal In which has been Included in the reform package for the
     continuance into 1992/93 of the existing maximum guaranteed quantity and
     basic and supplementary levy systems. In the prices package it is
     proposed to set the basic levy at 5X, the same level as In 1991/92. A
     proposal is also made that, as in 1991/92, farmers who Join a one year
     set-aside scheme will be exempted from the levy. This proposal is
      included as a safeguard in case decisions on the reform are not taken in
      time (before 1 June 1992) for the set-aside scheme proposed in the new
     arable products scheme to apply to the 1992/93 plantings. If early
     decisions are taken on the reform, this proposal will lapse.
 ---pagebreak---                                    - 13 -
26. In other sectors prices, mechanisms and, where appropriate, stabiliser
    figures are carried forward from 1991/92 Into 1992/93 except where
    changes are due to come Into effect on the basis of existing
    legislation, adaptations are due to fulfil undertakings given In the
    course of last year, or it Is necessary to take Interim measures to
    bridge the gap between reform and the existing regime. Hence, in the
    olive oil sector there is a transfer of aid between the consumption aid
    and production aid, as promised last October when the consumption aid
    was last decided and, for cotton, a change Is proposed to make price
    levels somewhat more predictable without weakening the effectiveness of
    the stabiliser. For tobacco, the interim measures needed because of the
    delay in adopting the reformed regime have been proposed In advance of
    this package and what Is proposed now Is that prices and premiums should
    remain unchanged. Action Is, however, proposed to mitigate a perverse
    effect of the existing tobacco regime which can In some cases make low
    grade tobacco more attractive to the processor than high grade tobacco.
27. This roll forward package is designed to allow the Council to take rapid
    decisions and to avoid distracting its attention from the reform of the
    CAP. It should not, however, be misunderstood as suggesting that, in the
    absence of reform, the existing CAP could be rolled forward
    indefinitely. On the contrary, as explained above, were the reform
    proposals to be rejected, very drastic price measures would be
    necessary.
V.  Agri-monetary measures
28. Agri-monetary proposals are based on the situation of currencies at the
    beginning of February 1992.
    As regards the currencies which are maintained within a mutual margin of
    fluctuation of 2.25X there is no longer a monetary gap - the
    agricultural conversion rates are already at the level of the central
    rates.
    As regards the other currencies (the drachma, peseta, escudo and pound
    sterling) the monetary gaps vary with trends on the exchange rate
    market, but it was agreed in July 1988 that they should be dismantled
    before 1 January 1993. With regards to Greece, the arrangements for the
    automatic dismantling of the gaps created by monetary realignments
    provide for a final stage, for the majority of products, which will take
    effect at the beginning of the 1992/93 marketing year.
     In order to limit any further dismantling which may be needed on
    31 December 1992 it Is proposed to reduce all the monetary gaps existing
    at the time of the Council decision to 1.5 points, at which level the
    compensatory amount no longer applies.
 ---pagebreak---                                    - 14 -
VI. Financial Implications
29. The financial Implications of the proposals for prices and related
    measures for EAGGF Guidance Section expenditure and for the Community's
    own resources of agricultural origin are set out In Volume II.
30. It is estimated that the financial Implications of these proposals for
    prices and related measures will be of ECU 6 million In 1992 and of
    ECU 45 ml 11 Ion In 1993.
 ---pagebreak---                                     - la -
B.   Explanatory memoranda by product
1.   CEREALS
1.1. Prices
     For all cereals the Commission proposes for 1992/93 maintenance of the
     1991/92 prices.
     As the transitional period for Spain will have come to an end all Spanish
     institutional prices will henceforth be Identical with those for the
     Community of Ten.
     Under the arrangements for the second stage of Portuguese accession the
     first step In moving the intervention price for common wheat to the
     Community price will be taken and the specific aids for cereals will be
     adjusted.
     Target prices are derived from the intervention prices by adding a market
     component and a component representing the cost of transport between the
     Ormes and Duisburg areas. Updating the transport cost entails a slight
     reduction in target prices.
     The 1991792 overshoot of the maximum guaranteed quantity means that
     prices set by the Council for 1992/93 will automatically be reduced by 3%
     by the Commission.
1.2. Monthly Increases
     Given the 3% reduction in the intervention prices and the prospect of
      lower interest rates, keeping the monthly increases at their present
      level offers the best prospects for disposal of cereals on the Community
     market throughout the marketing year. Those for common wheat flour, rye
     flour and groats and meal of durum wheat must however be adjusted to take
     account of a change In the processing coefficients, as was done in the
     course of 1991/92 for calculation of the export refunds.
1.3. Special premium for breadmaking. wheat and rye    '•*
     Article 3 of the basic Regulation (EEC) No 2727/75 requires the Council
     to set a special premium each year for common wheat and rye with certain
     quality characteristics.
 ---pagebreak---                                             - 16 -
     For the last few years the common wheat premium has been 2X of the
     Intervention price.
     Given the automatic 3% reduction In the Intervention price from the
     beginning of 1992/93 it Is proposed to adjust these premiums accordingly
     to ECU 3.27/t for common wheat and ECU 4.09/t for rye.
1.4. Durum wheat aid
     The production aid for durum wheat is an element of producers' Incomes In
     certain production areas In the same way as Intervention prices. Given
     the freeze on institutional prices It Is proposed to make no change in
     its amount.
     In Spain the aid will, like prices and for the same reason, be the same
     as in the Community of Ten.
1.5. S t a b i l i z e r s and co-resoonsiblIItv lew
     Under the CAP reform proposals for cereals It is proposed to retain for
     1992/93 the basic and additional co-responsibility levies and to keep the
     maximum guaranteed quantity at the level maintained since its
      Introduction.
     The Commission draws attention to the need for this proposal to be
     adopted so that the co-responsibility levies will be app 11 cab I e Xjrcjn
     1 June 1992. the date of commencement of the marketing year for
     application of co-responsibtIIty in the southern countries.
     Given the persisting imbalance between production and the potential for
     disposal on either the Community or world market it is proposed to keep
     the basic co-responsibility levy at a level equivalent to 5% of the
      intervention price for common wheat. Since this will automatically be
     reduced by 3% at the beginning of the new marketing year It is proposed
     to set the basic levy at ECU 8.17/tonne.
     Retention of the stabilizers will result, since 1991/92 production
     overshot the MGQ, in the Commission's fixing an additional levy of 3% for
     1992/93.
 ---pagebreak---                                     - 17 -
1-G- Aid for small caram producers
     Since it Is proposed to retain the co-responslblIIty levies It Is
     necessary to retain the aid to small cereal growers under which the co-
     responslbl I Ity levy amounts due from them are reimbursed within an
     overall budget allocation.
     Since It Is proposed to maintain the basic co-responslblIIty levy at 5X
     the budget allocation can be maintained at ECU 293 million, which already
     covers the additional levy.
1*7. Aid scheme for amaIiproducerm of certain arable crops
     This was Introduced for 1990/91 and Is applied at Member States'
     discretion Instead of the scheme for small cereal producers. Only France
     and Portugal have taken up the option.
     Under the reform proposals It Is proposed to continue special aid schemes
     for small producers until 1994/95.
     Since the basic and additional co-responsibility levies are being
     temporarily maintained no change should be made In the aid scheme for
     1992/93.
1.8. Production aid for canary seed, millet and buckwheat
     The scheme was introduced from 1990/91.
     So far only some Member States, mainly northern ones, have taken It up.
     Despite lack of producer Interest it Is proposed, pending a decision on
     the reform proposals, to maintain the same aid levels as In past years.
1.9. Potato starch
     There Is no market organisation for potatoes but potato starch Is subject
     to the same rules as cereal starch. The minimum price payable for
     potatoes must therefore continue to be aligned on the price level applied
     to maize.
 ---pagebreak---                                     - 18 -
      As regards the special premium paid to potato starch producers It appears
      that the economic position and special conditions of production have not
      significantly changed relative to cereal starch production. It Is
      accordingly proposed to retain In 1992/93 the present premium of
      ECU 18.67/tonne.
1.10. Continuation of a special scheme for temporary set-aside of arable land
      It is not possible to exclude the possibility that the Council's
      decisions on the reform of the common agricultural policy may be taken
      too late for the new set-aside system proposed In that context to be
      applied to sowing for the 1993 crop. Therefore It Is proposed to carry
      forward "mutatis mutandis" the temporary set-aside system which was
      applied In 1991/92.
 ---pagebreak---                                  - 19 -
2. RICE
   Prices and monthly Increases
   It Is proposed to keep the intervention price and the monthly increases
   at their present levels.
   Updating of the factors of calculation. In particular the costs of
   transport between Vercelll and Duisburg, leads the Commission to propose
   a slight reduction In the target price for husked rice.
   For Portugal under the arrangements applicable during the second stage of
   accession there will a second move of the rice Intervention price towards
   the Community level.
 ---pagebreak---                                     - 20 -
3.   SUGAR
3.1. The Commission proposes freezing the basic price for sugar-beet, the
     intervention price for white sugar and the manufacturing margin.
     This proposal for sugar-beet relates to the basic price and to the
     minimum prices for A and B sugar-beet which are determined on the basis
     of the ceiling fixed for the basic production levy and for the B levy,
     the latter without prejudice to an Increase later In the celling in
     accordance with Article 28 of Regulation (EEC) No 1785/81.
3.2. As regards the reimbursement of storage costs, the Commission also
     proposes to maintain the current rate of ECU 0.52/month, In the light of
     the proposed freeze on prices.
3.3. The prices proposed for Spain have been established In accordance with
     Articles 3, 4 and 5 of Council Regulation (EEC) No 1716/91 (0J No L 162,
     26.6.1991, p. 18).
3.4. As regards the prices proposal for Portugal, the Commission recalls that
     at the time of the accession of Portugal to the Community the basic price
     for sugar-beet guaranteed by the national regime was higher than that
     guaranteed by the Community regime and sugar prices were lower than those
     guaranteed by the Community regime.
     With the "classic" transition period applying in the sugar sector, sugar
     prices are regulated by Article 238(2) of the Act of Accession of Spain
     and Portugal which provides for a seven-stage move towards alignment when
     the price of a product is lower than the common price. Thus, since the
     1986/87 marketing year, sugar prices have been automatically Increased by
     part of the difference so that the common price will apply In Portugal as
     of the seventh move to alignment, i.e. from the 1992/93 marketing year.
      In accordance with the acts of the conference which preceded Portuguese
     accession, the reference "common prices" on which Portuguese prices must
     be aligned are the derived prices applicable in the Ireland/United
     Kingdom region, valid for 1992/93. This results in a final increase in
     the intervention prices for white sugar of ECU 0.87/100 kg.
 ---pagebreak---                                     - 21 -
     Sugar-beet prices are regulated by Article 238(3)(a) and (b) of the Act
     of Accession of Spain and Portugal which lays down that, where the price
     of a product in Portugal Is higher than the common price, alignment will
     result from the development of common prices during the seven years
     following accession and that the Council will carry out an analysis of
     the development of moves towards a price alignment, on the basis of an
     opinion from the Commission accompanied, where appropriate, by suitable
     proposals.
     Therefore, in order to give an opinion and present suitable proposals,
     the Commission has analysed the development of prices in the Portuguese
     sugar sector since the accession of Portugal to the Community.
3.5. The circumstances under which the Treaty of Accession was negotiated have
     completely changed as regards the sugar sector., Thus, not only did a
     certain alignment expected as a result of Increases In Community prices
     for sugar-beet not occur but common prices were frozen and even reduced
     by 2.1X since then (1986). Portuguese prices have consequently been
     adjusted to avoid an increase in the gap between them and the common
     prices (Article 238(3)(a) of the Act of Accession).
     The trend In Portuguese and Community prices for sugar-beet since the
     accession of Portugal to the Community is shown in Table 1. It will be
     seen that the difference existing at the time of accession has been fully
     maintained, with the Portuguese price continuing to be higher than the
     common price and by the same amount, i.e. ECU 1.26/tonne.
3.6. The Commission thus notes that for sugar-beet the difference of
     ECU 1.26/t between the Portuguese price and the relevant common price
     means that only 2.94% of the Portuguese price has to be made up. Under
     Article 237 of the Act of Accession, a gap of that size is to be classed
     as minimal because it is even less than the percentage of 3% fixed by the
     said Article as minimal.
     The Commission also emphasises that as the minimum prices for sugar-beet
     in question are determined by reference to regional price differentiation
      in the Ireland/United Kingdom region the sugar-beet price applicable in
     Portugal will be greater than the price applicable in areas where no
     shortfal I exists.                                  .,.
     The Commission points out that the extent of sugar-beet production
     remains reduced (cf. Table II), despite the transitional quota
     arrangements applied for some years now. Since the 1987/88 season,
     production has not exceeded 2 000 tonnes.
     Therefore, in the light of the above, the Commission proposes that the
     Council decide that the alignment in the prices of sugar-beet should
     coincide with the alignment in sugar prices, i.e. from the 1992/93
     marketing year.
 ---pagebreak---                                     - 22 -
                                    TABLE I
             COMMUNITY AND PORTUGUESE PRICES IN THE SUGAR SECTOR
                    86/87  87/88  88/89     89/90  90/91  91/92  92/93
                                                                 (prop.)
1. Intervention
   price for
   white sugar
   (ECU/100 kg)
   - Portugal       50,12  51,00  51.88     51.68  52,47  53.35  54.22
   - EEC(1)         55.39  55.39  55.39     54,31  54,22  54,22  54,22
   Difference
   (ECU/100 kg)     -5,27  -4,39  -3,51     -2,63  -1,75  -0.87    0
2. Basic price
   for beet
    (ECU/tonne)
   - Portugal       43,72  43,72  43,72     42,90  42,83  42,83  41,57
   - EEC(2)         42,46  42,46  42,46     41,64  41,57  41,57  41,57
   Difference
    (ECU/tonne)     +1,26  +1,26  +1,26     +1,26  +1,26  +1.26    0
(1)     UK/IRL derived intervention price.
(2)     Basic price for beet Increased by the regional price
        differentiation in the Ireland/United Kingdom area.
 ---pagebreak---                                     - 23 -
                                  TABLE 11
                    Portuoal - Quota and Sugar Production
                                                            (tonnes)
          Mainland Portugal           Azores          Portugal . total
            Quota      Prod.      Quota      Prod.    Quota      Prod.
1986/87    60.000          0     10.000      4.328   70.000     4.328
1987/88    60.000        207     10.000      1.663   70.000     1.870
1988/89    60.000        176     10.000        839   70,000     1.015
1989/90    60.000        656     10.000      1.046   70.000     1,702
1990/91    60.000        550     10.000      1.100   70.000     1.650
1991/92    60.000       (150)*   10.000    (1.050)*  70.000    (1.200)*
 (*) Provisional estimate.
 ---pagebreak---                                               -  24 -
                                              TABLE III
                                    MCE  PP.0P0SALS 1992/93 SUCA*
                                                             1991/92  1992/93
                                                              Price  Proposal Change
                                                                ECU     ECU      %
 7.  Basic price for beet                          t           40,00   40,00      0
 2.  Mini sua price for A beet <1>                 t           39,20   39,20      0
 3.  Mlnlmia price for B beet W                    t           27,20   27,20      0
 4.  Intervention price for white sugar            q           53.07   53.07      0
 5.  Target price for white sugar                  q           55.79   55.79      0
 6.  Threshold price for white sugar               q           63.90   63.90      0
 7.  Intervention price for raw sugar              q           43.94   43.94      0
 8.  Threshold price for raw sugar                 q           54.60   54,60      0
 9.  Threshold price for wo lasses                  q           6.89    6,89      0
10.  Monthly relaburseaent of storage costs        q            0,52    0,52      0
77.  Prices applicable In Spain (*)
(a)  Basic price for beet                           t          46.84   46,08    - 1.6
(b)  Intervention price for white sugar            q           67.29   59,57    '2,8
12.  Prices applicable In Portugal (*)
(a)  Basic price for beet                           t          42,83   47,57    - 2.9
(b)  Intervention price for white sugar            q           53.35   54,22    * 7.6
 (1)     98 X of the basic price for beet.
         68 X of the basic price for beet, subject to application of Article 28(5)
 (2)     of Regulation (EEC) No 1785/81.
         Established in accordance with Council Regulation (EEC) No 1716/91 of 13
 (3)     June 1991 concerning the alignment of the sugar and beet prices
         applicable In Spain on the common prices.
 (4)     Established In accordance with Article 238 of the Act of Accession after
         alignment and including the effect of regional differentiation.
 ---pagebreak---                                      - *D -
4.    OLIVE Qlt
4.1   Prices and aids
4.1.1 In the context of a general freeze on prices the Commission proposes to
      maintain the target price for olive oil at the same level as in 1991/92.
4.1.2 As was envisaged In the proposal for consumption aid for 1991/92
      (COM 91) 366 final) the Commission considers that in the light of market
      developments in the sector it is appropriate in future to fix both the
      production aid and the consumption aid at the same time and this year to
      make some transfer from one aid to the other. The Council, when It
      agreed on an ECU 7 reduction In consumption aid for 1991/92 announced Its
      agreement to this policy, adding that the change should have no effect on
      the budget, in the light of the said reduction.
4.1.3 The Commission proposes an increase In the production aid paid to large
      producers of ECU 12/100 kg and a reduction in the Intervention price also
      of ECU 12. This change will have no effect on the income of producers
      who market their oil. In the case of small producers who consume a large
      proportion or, in certain cases, all their output, on the farm the
      reduction of the Intervention price will have less, or In some cases, no
      effect on revenue. Bearing this and the general policy of favouring
      small producers In mind, the Commission considers that there should be
      some increase in the aid paid to small producers but a smaller one than
       Is proposed for commercial producers. Thus the increase in the aid
      proposed for small producers is ECU 6/100 kg, which will reduce the
      difference between the aid for small producers and that for large
      producers to about ECU 8/100 kg.
4.1.4 As regards consumption aid, the Commission proposes a reduction of
      ECU 8/100 kg. Taking into account the reduction in the intervention
      price, this will enable the representative market price to be reduced by
      ECU 4/100 kg. This reduction, taking the representative market price
      back part of the way towards the level prevailing in 1990/91, reflects
       the change in market circumstances. With 1991/92 production having
       recovered sharply from the depressed level of 1990/91, an Increase In
      consumption in the current campaign may be expected but the 1992/93
      campaign is likely to begin with stock levels of a<higher level than at
       the beginning of this year.
 ---pagebreak---                                      - 26 -
4.1.5 In addition to the existing Institutional criteria, it is also proposed
      that deductions from aid (for measures to Improve quality, aid for
      professional organizations and promotional measures) be set on the basis
      not only of the tasks allocated but also on the basis of the amendments
      proposed to the aid and appropriations accumulated over previous years.
4.1.6 With regard to consumption aid In Spain, the reduction in aid for the
      Community of Ten will result In a smaller Increase in Spanish aid In
      accordance with the rules on alignment laid down in Article 2 of
      Regulation (EEC) No 3416/90.
      With regard to Portugal, there should be slight changes to the current
      level of aid to consolidate the level of consumption in the country.
      An increase in production aid will be affected in the Iberian peninsula
      through the normal alignment machinery.
      All the Commission's proposals for the 1992/93 marketing year are
      summarized in the table. For comparison, the data on which production
      aid and consumption aid in the sector were based during the 1990/91 and
      1991/92 marketing years are also shown.
4.2.  Related measures
       In accordance with the abovementioned proposal of October 1991, the
      Commission proposes to the Council that Regulation No 136/66/EEC be
      amended so that:
            all institutional prices and aids for olive oil are set
            simultaneously in the price package;
      -     when the representative market price (and consumption aid) are set,
            less weight is given than in the past to the movement of seed oil
            prices.
 ---pagebreak---                                         - 27
                                               Olive oil price proposals
                                                                    (Ecus/100 kg)
               Type of price or aaount                   90/91     91/92     92/93
 1. Target price     for olive   oil                   322.01    322,01     322,01
 2. Intervention     price EUR-10                      215.87    215,87     203,87
   - Spain                                              175.12    785.37    184,63
                                                       207.58    209,65     199,95
   -   Portugal
                                                        190.28   197,28     193,28
 5. Representative      aarket price for olive oil
                                                        189,11   194,20     189,98
 6. Threshold     price
 7. Production aid for olive        oil                  39,61     45,85     55,10
     - Spain                                             35,46     42,53     52,61
     - Portugal                                          70.83     70,83     82,83
     - Coaaunlty of Ten
 8. Production aid to olive growers whose
     average production Is less than 500 kg
     olive oil per aarketIng year
     - Spain                                             44,36     51,81     60,76
     - Portugal                                          40,21     48,49     58,27
     - Coaaunlty of Ten                                  81,62     81,62     87,62
     Consumption aid      applicable
     - Spain                                             42,93     45,67     45,75
     - Portugal                                          47,92     49.42     48,25
     - Community of Ten                                  60,90     53.90     45,90
 9. Amounts withheld      on production  aid
     - quality Improvement                                2,0       2.0       1.6 %
     - aid to producer organizations      and             7,5       1,5       1.2 %
        associations    thereof
10. Amount withheld      on consumption aid
     - promotion measures                                 4,0       1,0       0.7 %
     - aid to trade      organizations                    7.4       1,4       2.0 %
 ---pagebreak---                                      - 28 -
5.    OILSEEDS AND PROTEIN CROPS
5.1.  OlIseeds
      The Council has already taken the necessary decisions on the support
      arrangements for oilseed producers.
5.2.  Protein Crops (Peas. Field Beans and Sweet Lupins; Dried Fodder)
      For 1992/93 the elements of the existing market organization for protein
      crops should be retained, with no changes.
5.2.1 Stabilizer Regime:
      The Maximum Guaranteed Quantity (MGQ) system is applied to pulses but no
      MGQ Is applied to dried fodder. The level of the MGQ was fixed for an
       initial period of three marketing years, from 1988/89 to 1990/91 and
      extended for the 1991/92 marketing year.
      The current MGQ system, as applied during the last four maketlng years,
      results in the Commission making adjustments In support when production
      exceeds the MGQ.
      The Commission proposes that, for 1992/93 for pulses, the MGQ system be
      maintained unchanged.
5.2.2 Prices: Peas, field beans, sweet lupins (pulses)
      Under Articles 2 and 3 of Regulation (EEC) No 1431/82. the Council is
      requried to set. annually, various institutional prices for pulses.
      The Commission proposes that for the 1992/93 marketing year these
      components should be maintained unchanged.
5.2.3 Prices; Dried fodder
      The Council is required, under Article 4 of Regulation (EEC) No 1117/89,
      to set, annually, a guide price for dried fodder. The Commission
      proposes that the dried fodder guide price for the *\992/93 marketing year
      will be maintained unchanged.
      The coefficient to be used in the calculation of the aid has already been
       fixed by the Council at 80X for the 1992/93 marketing year.
5.3.  Other protein crops; Lentils, chick peas and vetches
       In Regulation (EEC) No 762/89 the Council introduced a per hectare based
       aid system for the growers of lentils, chick peas and vetches, which will
      expire on 30.6.1992. It is proposed to extend this aid system until the
      end of the 1992/93 marketing year, and maintain the aid at ECU 75/ha.
 ---pagebreak---                                       - 29 -
6.     TEXTILE FIBRES
6.1    Cotton
6.1.1  Pursuant to Article 3(2) of Regulation (EEC) No 1964/87<1>, the
       Commission presents In Annex I a report on the operation of the aid
       system for cotton together with a proposal for adapting this system.
6.1.2. Under paragraph 8 of Protocol No 4, a guide price Is fixed each year by
       the Council In order to support cotton production In Community regions
       where it is Important to the agricultural economy and to enable producers
       to earn a fair income.
       In the light of the proposals for the chief alternative crops, and taking
       Into account the conclusions of the attached report, it is proposed that
       the guide price be maintained for 1992/93, subject, however, to a
       technical adjustment resulting from the change proposed to the standard
       quality. It would be appropriate for the standard quality to be brought
       into line with the quality of cotton effectively marketed In the
       Community^2). In order to avoid a drop In operators' Income and not at
       the same time increase EAGGF expenditure, the guide price for 1992/93
       should be raised to ECU 102.79/100 kg.
6.1.3  Under Article 9 of Council Regulation (EEC) No 2169/81, a minimum price
       for unginned cotton has to be fixed each year at a level which enables
       producers to sell at a price as close as possible to the guide price.
       For 1991/92 the Council fixed the minimum price for unginned cotton at
       95X of the guide price. The differential between the guide price and the
       minimum price, which serves to maintain the necessary market fluidity,
       has not given rise to problems. It is therefore proposed that the
       minimum price for unginned cotton for 1992/93 also be fixed at 95X of the
       (adjusted) guide price. I.e. at ECU 97.65/100 kg.
6 1.4  As explained in the report, it i s proposed to continue the stabiliser
       regime but to limit the size of the price reductions which may be made in
       the course of a season, with any excess beyond that limit carried forward
       into the following season. This amendment is designed to give producers
       a better assurance of the price they will receive in any year but without
       diminishing the long-term effect iveness of the stabilizer. Also, in
       order to give producers greater security, it is proposed that the maximum
       guaranteed quantity be fixed for a period of four years rather than
       annually. The figure proposed I s 701 000 tonnes, effectively the same
       figure as last year but adapted to take account of the change in the
       standard qualIty.
6.1.5   It is proposed that the programme for small producers (less than 2.5 ha)
       be extended by four marketing years.
(1)    0J No L 184, 3.7.1987, p. 14.
 (2)   This improvement in the standard quality leads to a proportional
       reduction in the quantity eligible for aid.
 ---pagebreak---                                       - 30 -
6.2.   Fibre flax
       Under Article 4 of Regulation (EEC) No 1308/70<1>, a flat rate of aid
       per hectare has to be fixed each year for fibre flax to ensure an even
       balance between the necessary production and the scope for disposal. For
       1991/92 the aid was fixed at ECU 374.36/ha, of which ECU 37.44/ha was not
       paid to the beneficiaries but earmarked for funding promotional measures
       and the search for new markets. Areas under fibre flax in the Community
       have risen In recent years (78 900 ha In 1990 and 1989, 73 000 in 1988,
       67 000 In 1987), which has led to a sharp drop in flax straw prices and
       In producers' income. To counter this market imbalance, the areas under
       fibre flax in the Community fell in 1991 to reach only 55 100 ha (-30X)
       and a further decline Is expected for 1992. Production of flax fibre
       should consequently go down substantially In order to reach a new
       balance. In view of the current and foreseeable situation on the market,
       aid of ECU 374.36/ha is proposed also for 1992/93. Furthermore, as far
       as the deduction of the aid for promotional measures is concerned, It is
       proposed that it be kept at 10X of the aid, i.e. again at ECU 37.44/ha.
       Such promotional measures are necessary to ensure the desired market
       equilibrium in the longer term.
6.3.   Flax seed
       Under Article 1 of Regulation (EEC) No 569/76(2), the Council fixes a
       guide price each year for flax seed In order to ensure a fair income for
       producers.
       The guide price for the Community of Ten and Portugal was fixed at
       ECU 54.49/100 kg for 1991/92. It Is proposed that for 1992/93 the price
       should again be fixed at ECU 54.49/100 kg for these Member States.
6.3.2   In the light of the proposals for alternative crops, keeping the guide
       price the same for flax seed should allow the cultivation of seed flax to
       be maintained, at least in production areas where suitable yields can be
       obtained. In the case of flax seed obtained from fibre flax, the
       proposed price should ensure a fair Income for producers, given the
        foreseeable recovery of the market price for flax straw and the level of
        the flat-rate aid granted per hectare.
 6.3.3  In accordance with Article 93 of the Act of Accession of Spain and
        Portugal it is proposed that the guide price for Spain be set at
        ECU 51.67/100 kg.
  (1)   0J No L 146, 4.7.1970, p. 1.
  (2)   0J No L 67, 15.3.1976, p. 29.
 ---pagebreak---                                      - 31 -
6.3.4 Although no changes are proposed in the linseed scheme this year, the
      Commission recognises that It is anomalous that this oilseed is subject
      neither to the maximum guaranteed area system currently applying to other
      oilseeds nor to the set aside requirement to which the producers of other
      oilseeds will be subject under the proposed new support system for
      producers of arabel crops. A choice between these alternatives can best
      be made once the new support system for producers of arable crops has
      been adopted but the Commission wishes to take the opportunity of,
      accounclng to linseed producers that unless by the end of this calendar
      year the Iinseed has been taken Into the proposed support system for
      arable crops it will, from 1993/94 onwards be subject to a maximum
      guaranteed area system based on the area sown in 1991/92. Under this
      system the aid will be reduced by 0.5X for each 1X Increase In the
      planted area compared with the base year.
6.4.  Hemp
6.4.1 Under Article 4 of Regulation (EEC) No 1308/70, a flat rate of aid per
      hectare has to be fixed for hemp to ensure an even balance between the
      necessary production and the scope for disposal.
      For 1991/92, the aid was fixed at ECU 339.42/ha.
      For 1992/93, It Is proposed to keep the aid at Its present level.
6.4.2 The Commission considers that, given the forseeable trend in prices for
      fibres and seeds, on the one hand, and the level of the aid for hemp seed
      as well as the prices for other crops, on the other, the proposed flat-
      rate aid should enable producers' Incomes and the areas sown to be
      maintained.
6.5.  Hemp seed
      Article 1 of Regulation (EEC) No 3698/880) provides that aid Is to be
      fixed each year for hemp seed at a level which Is fair to producers and
      takes account of the Community's supply requirements.
      For the 1991/92 marketing year, the aid was fixed at ECU 24.59/100 kg.
       It is proposed that for 1992/93 the aid be maintained at its present
       level.                                             •
 (1)   OJ No L 325, 29.11.1988, p. 2.
 ---pagebreak---                                       - d* -
   6.6. SiIkworms
        Article 2 of Regulation (EEC) No 845/72<2) provides that aid is to be
        fixed each year per box of silkworm eggs used, at a level which helps to
        ensure a fair Income for silkworm rearers.
        For 1991/92, the aid was fixed at ECU 111.81/box. For 1992/93 it Is
        proposed In view of the current and foreseeable prices for raw silk that
        It remain unchanged at ECU 111.81/box.
    (2)  OJ No L 100, 27.4.1972, p. 1
5)
 ---pagebreak---                                    - 33 -
7.   WINE
7.1. Prices
     The Commission proposes to maintain the same guide price In 1992/93 as In
     1991/92.
7.2. Related measures
     The Commission Intends to present proposals in the course of this year
     for the reform of the common organization for wine. - However, it does not
     consider It opportune to open this discussion whilst the attention of the
     Council Is concentrated on the major series of reform already proposed in
     other areas of the common agricultural policy. It therefore proposes to
     extend certain deadlines set out In existing legislation, that is to say:
          the submission of reports on the definition of wine-growing zones,
          enrichment, the effectiveness of structural measures on compulsory
          distillation, the sulphur dioxide content of wine, sparkling wine
          and dessert wine (in preparation) and measures to enable groups of
          producers to be treated in the same way as producers for compulsory
          distillation contracts;
          determination of the rules for calculating the quantities to be
          distilled in each production region (uniform percentage and
          reference year), agreed to following the Dublin agreement but held
          over until 31 August 1992, and the derogation given to allow the
          compulsory distillation scheme to be applied according to special
          rules in Greece;
          setting of the trial period for certain deacidification practices
          soon to expire;
          fixing of the period during which that part of the aid intended to
          promote the use of grape must for the production of Juice may be
          earmarked for the promotion of grape Juice (already extended last
          year until 31 August 1992).
 ---pagebreak---                                     - 34 -
8.   FRUIT AND VEGETABLES
8.1. Basic and buy Ino-In prices
     Pursuant to Article 16 of Council Regulation (EEC) No 1035/72 on the
     common organization of the market In fruit and vegetables, each year the
     Commission proposes a basic price and a buying-in price for each of the
     products listed In Annex II to the said Regulation, namely cauliflowers,
     apricots, nectarines, peaches, lemons, tomatoes, aubergines, pears, table
     grapes, apples, satsumas, mandarins, Clementines and oranges.
     It Is proposed that the basic and buying-In prices of all products be
     kept at their present level. The Commission will draw the necessary
     consequences of any overshooting of the intervention thresholds once the
     final level of withdrawals during the 1991/92 marketing year is known.
     In the case of Spain and Portugal, the prices will be further aligned In
     accordance with Articles 149 and 285 of the Act of Accession. This Is
     the third alignment for Spain and the second for Portugal.
8.2. Intervention thresholds
     The intervention threshold for apples Is now set until the end of the
     1991/92 marketing year. With a view to ensuring the market equilibrium
      in this sector, it Is proposed that this threshold be made permanent and
     at the rate in force for the 1991/92 marketing year, namely 3X of the
     average production for consumption as fresh fruit pertaining over the
      last five marketing years for which figures are available.
8.3. Processed fruit and vegetables
     The system of quotas for processed tomatoes which has applied for the
     past four years expires at the end of this season and the previous
     guarantee threshold system will automatically come back into force. Many
      in the industry prefer the certainty of a quota system and the Commission
     recognises that it does have many advantages. It is too late to disturb
     the legitimate expectations that quotas will not apply this year but the
     Commission is prepared to propose their re introduction next year based on
     previous levels, not on production in 1992/93. In 'the meantime, in order
     to avoid a sudden increase In expenditure arising from the non-
     application of a quota system this year and to avoid a conflict between
     the two systems next year, the Commission proposes that any aid reduction
     which may be needed as a result of the threshold being exceeded this year
     will apply this year rather than next.
 ---pagebreak---                                    - 35 -
9.   TOBACCO
9.1. As the proposed reform of this regime cannot now be applied to the 1992
     crop, the Commission proposes to extend unchanged the 1991 levels of the
     norm and intervention prices, premiums, derived intervention prices,
     refrence qualities and production areas. Prices also remain unchanged
     for certain problematic varieties where the specific price reductions
     decided In the past have to be continued.
9.2. For certain varieties, however, the proportion of the lowest grade
     acceptable for intervention which is purchased by processors has risen to
     levels at which, under existing rules, the lowest grade should now become
     the representative one. The full application of this rule would,
     however, have a more drastic effect on the level of premla paid for these
     varieties than Is reasonable In the context of this final year of the
     existing regime. As an interim measure, therefore, a premium reduction
     will be applied in cases where a processor purchases more than a given
     percentage of the lowest quality. This measure will have no effect on
     the minimum price payable to the producer.
9.3. Furthermore, according to Article 13 of Regulation (EEC) No 727/70 the
     Commission presents In Annex II a report on the situation of production
     and marketing of certain varieties of tobacco.
 ---pagebreak---                                      - 36 -
10.   MILK AND MILK PRODUCTS
10.1. Prices
      The Commission proposes to maintain In 1992/93 the same level of target
      and Intervention prices as In 1991/92. This proposal assumes that the
      Council will decide to continue the milk quota system, as the Commission
      has already proposed.
10.2. Price alignment in Spain and Portugal
      In accordance with the rules of the Treaty of Accession (Article 70(3)),
      the Commission proposes that the common intervention prices for butter
      and skimmed-milk powder should be applied in Spain. For Portugal, the
      common intervention price for butter has already been applied since the
      beginning of the 1991/92 marketing year. For skimmed-milk powder the
      Commission proposes, as provided for In the Treaty of Accession, that the
      difference in price between the Azores and mainland Portugal should be
      eliminated and therefore that the current Intervention price in the
      Azores should be applied to Portugal as a whole.
10.3. CoresDonslblilty lew
      Taking Into account the serious budgetary situation and the general
      context of maintaining the existing price level, the coresponsiblIty levy
      must be maintained at its present level.
10.4. Quotas
      The existing quota regime expires on 1 April 1992. Proposals for quotas
      from that date onwards have been presented In the context of the reform
      of the common agricultural policy. The proposal to maintain prices at
      the same level as in 1991/92 presupposes that the Council will reach
      decisions on the basis of these proposals before 1 April. It would be
      quite impossible to maintain support prices without limits on quantities.
10.5.  Inward processing
       Inward processing Is currently suspended in the milk sector, with a
      specific exemption for certain products. The Commission proposes that
      both this suspension and the exemption should continue In 1992/93.
 ---pagebreak---                                      - 37 -
11-   BEEF AND VEAL
11.1. Community prices
      It is proposed to maintain the guide price at the same level as in
      1991/92, I.e. at ECU 200/100 kg llveweight. It Is also proposed to
      maintain the intervention price at ECU 343/100 kg carcase weight for
      qua Iity R3.
11.2. Public intervention
      Whilst the Council reaches decisions on the reform it is proposed not to
      adapt the existing Council rules.
11.3. Promt a.
      No change for the special beef premium Is proposed, compared to Its level
      in 1991/92, i.e. ECU 40 per animal (with an unchanged maximum of 90
      animals). As regards the suckler cow premium, the level should be fixed
      at the level existing in 1990/91 (exclusive of the once-off increase
      decided for 1991/92), I.e. ECU 40/cow (without headage limit); with the
      possibility of a national supplement subject to a maximum ECU 25/cow; and
      the associated provision for payment by EAGGF of the first ECU 20/cow of
      this national supplement in the case of Greece, Ireland, and the United
      Kingdom insofar as Northern Ireland Is concerned.
11.4. The Commission remains concerned at the continuing difficulties In the
      beef sector as reflected by heavy intervention purchasing and low prices
      to producers. Accordingly, It expects early decisions by the Council in
      the reform context to redress current trends. The Commission will
      continue to monitor' the situation closely and, in the absence of the
      necessary Council decisions on reform of the sector, reserves the right
      to bring forward proposals to deal with the situation in the event of a
      further deterioration in the market.
 ---pagebreak---                                      - 38 -
12.   SHEEPMEAT AND GOATMEAT
12.1. Institutional prices for the 1992 marketing year were fixed in the
      1991/92 price package.
      As regards institutional prices for 1993 the Commission wishes to stress
      that within Its proposals for the reform of the sector the application of
      the stabilizer mechanism is to be frozen at 7X (Its 1990 level). This,
      together with the introduction of a limited producer guarantee for
      premium purposes and the reduction of 2X In the basic price fixed by the
      Council for the 1992 marketing year, should limit the development of
      production. The Commission therefore considers that Its cautious
      Institutional price policy should be continued. Under these circumstance
      It proposes to maintain the basic price unaltered for 1993. However,
      should the Council fail to adopt Its reform proposals, the Commission
      reserves the right to make further proposals with respect to the 1993
      institutional prices.
12.2. In the context of the reform of the sheep sector, which has operated
      since 1990, the opening of private storage measures is dependent on the
      level of the weekly seasonal!zed basic price. However, because of the
      importance of the variable slaughter premium in Great Britain,
      particularly in budgetary terms, the seasonal scale of the basic price
      has been influenced since then more by the requirements of the slaughter
      premium than by those of private storage. Since the variable slaughter
      premium no longer applies in Great Britain, it is now opportune to adjust
      the seasonal scale so as to improve Its application insofar as private
      storage Is concerned.
12.3. Sheepmeat production throughout the Community tends towards two seasonal
      peaks, the first in late winter and spring in southern parts and the
      second in mid-summer and autumn in northern parts of the Community. Peak
      production in the south in spring is relatively high cost as it is
      dependent on cereal feeding while peak production in the north is less so
      as it is generally grass based. In order to provide a reasonable measure
      of market support at peak production periods throughout the Community
      while at the same time taking some account of differing production costs,
       it is proposed to maintain the overall shape of the seasonal scale.
      Nevertheless, it Is felt that the extent of the increase or decrease in
      the seasonalized price in comparison to the basic price itself should be
      reduced considerably from the levels associated with the variable
      slaughter premium in order to take Into account the abovementioned
      differences in peak production throughout the Community. Therefore, it
       is proposed that the peak and trough levels of the 1992 seasonalized
      basic price be reduced by 25X. Experience gained to date in the
      operation of the tendering system for aid to private storage would
      suggest that eligibility for tendering would not change significantly,
      consequent to such an alteration in the seasonal scale.
 ---pagebreak---                                   - 39 -
13. PIGMEAT
    Basic price
    The basic Regulation for pigmeat provides for the fixation of a basic
    price, the aim of which Is to trigger market Intervention measures (in
    practice, aids to private storage). Such measures may be Initiated when
    the average market price in the Community falls below 103X of the basic
    price. The basic price is In force from 1 July to 30 June.
    From 1 November 1984 to June 1990 the basic price for pig carcases of
    standard quality stood at ECU 2.033.30 per tonne, and for the period
    July 9190 to June 1992 has been fixed at ECU 1.897.00 per tonne.
    it is proposed to maintain this level for the marketing year 1992/93.
    The definition of standard quality should remain at:
    (a) carcase weighing 60 kg to less than 120 kg: grade U,
    (b) carcase weighing 10 kg to 180kg: grade R.
 ---pagebreak---                                      - 40 -
                                     ANNEX t
            Report on the on«rntjQn of the system of aid for cotton
               (to be submitted to the Council by the Commission)
1.  introduction
    Article 3(2) of Regulation (EEC) No 1964/87(1) provides that by the
    1992/93 marketing year at the latest, the Commission Is to submit a report
    on the operation of the system of aid to the Council. If the report shows
    it to be necessary, the Council Is to decide on any adjustments to the
    system.
2.  Basic provisions of the system of aid for cotton
A.  The system of production aid Introduced for cotton by Protocol No 4 annexed
    to the Act of Accession of Greece and adjusted by Regulation (EEC)
    No 1964/87 provides basically for:
    (1) the granting of aid In respect of a quantity of cotton of a certain
         quality (standard quality);
    (2) the calculation of the aid on the basis of the difference between a
         norm price and a world market price fixed for unginned cotton (raw
         cotton) with a view to permitting the disposal of Community production
         at the world price;*2)
    (3) the granting of aid to ginning plants provided they have paid the
         producer a minimum price which Is close to the norm price and takes
         account of the quality of the product delivered;
    (4) a reduction in the aid where production exceeds a maximum guaranteed
         quantity (MGQ).
(1) Council Regulation (EEC) No 1964/87 adjusting the system of aid for cotton
     (OJ No L 184, 3.7.1987, p. 14).
(2) The report annexed to the 1987/88 price package says that the Commission
    drew the Council's attention in particular to the problems inherent In
    granting aid for unginned cotton (basically the lack of prices for seed and
     the difficulty of assessing the cost of ginning). Noting in addition that
     the difficulties It experienced in calculating the aid stemmed almost
     exclusively from those components of the calculation not related to fibre,
     the Commission proposed to grant the aid In respect of the latter. However,
     the Council did not endorse the Commission's conclusions. Noting now that
     since that time these problems have persisted but not worsened and In the
     light also of experience with oilseeds (soya panel), the Commission is
     refraining from proposing such an amendment again.
 ---pagebreak---                                     - 41 -
B.  In addition to this system of production aid, In 1990<1) the Council
    introduced a system of aid for small cotton producers (cultivating up to
    2.5 hectares) for the 1989/90, 1990/91 and 1991/92 marketing years to allow
    them to recover the additional costs of manual harvesting. (They are
    unable to undertake mechanical harvesting owing to the small size of their
    holdings.) It appears from the development of the area cultivated by small
    producers that the additional aid granted was too attractive by comparison
    with the aid granted to other producers. However, the effect of the
    Increase in the area planted by small producers has been to diminish the
    aid, thus moving the scheme closer to an equilibrium and the Commission
    therefore proposes to extend It unchanged.
3.  The way the system of aid operates
    While It permits reasonable expansion of Community cotton cultivation, the
    present aid system has curbed excessive growth In production, thus limiting
    EAGGF Guarantee expenditure on cotton and safegarding traditional
    deliveries from non-member countries, which Include some developing
    countr ies.
    (a) Firstly, during the three years preceding accession, areas under cotton
        amounted on average to 148 600 ha in Greece and 54 700 ha in Spain
        compared with 260 300 ha and 76 700 ha respectively on average during
        the period 1989 to 1991. In addition, areas under cotton In these two
        countries, which amounted to 273 100 ha before Spain's accession and
        rose to 391 700 ha in 1988/89, fell back from 1989/90 to 311 500 ha In
        1991/92 (Table I). During the last five marketing years, aid for cotton
        fell on average by 14.6% (ECU 14.584/100 kg) as a result of the
        co-responsibility arrangements, thus reducing the average norm price to
        ECU 81.372/100 kg (Table II). Community cotton production, which rose
        substantially until 1988/89 (1 190 000 tonnes), subsequently declined
        to 850 000 tonnes (estimate) in 1991/92.
        During the period under consideration, average production was around
        1 million tonnes (1 009 000 tonnes).
(1) Regulation (EEC) No 1152/90 Instituting a system of aid in favour of small
    cotton producers (OJ No L 116, 8.5.1990, p. 1).
 ---pagebreak---                                    - 42 -
   (b) Secondly, as regards the financial consequences of the
       co-responsibility arrangements, savings amount In total to ECU 766
       million for the period 1987/88 to 1991/92. or ECU 153 million on
       average per marketing year (Table III).
   (c) As regards trade, Imports of cotton fibres Into the Community In 1990
       were only slightly down on those In 1986 and are still above 1 million
       tonnes (Table IV), deliveries from Spain and in particular from Greece
       to both other Member States and non-member countries did not fall
       (Table V) and the Community's self-sufficiency rate Is only around 25X
       (Table VI).
   To conclude, experience gained since the 1987 change to the aid system
   Indicates that the latter has operated satisfactory. For these reasons the
   Commission considers that the present system should be maintained, subject
   to certain technical adjustments to Improve the way It functions.
   Before the 1996/97 marketing year, the Commission will submit a report to
   the Council on the future arrangements for cotton in light of experience
   gained in this area after the changes proposed below and after the
   introduction of the system contemplated for major crops under the reform of
   the CAP.
4. Proposed changes
A. Stabilizer arrangements
   While considering that the stabilizer arrangements have basically achieved
   their objectives, the Commission points out that In the framework of the
   discussions on the agricultural price proposals for 1991/92 the Council
   called on the Commission "in the context of the upcoming revision of the
   stabilizer for cotton, to see what measures would be appropriate for
   protecting producers against the very substantial price fluctuations
   between one season and the next, without thereby Jeopardizing the economic
   effectiveness of the system.
   The Commission Is aware of the fact that the reduction varies greatly,
   which Introduces great uncertainty as regards anticipated income. During
   the period under consideration, the reduction varied'between 6X and 25X
   (Table VII); this figure would have been even higher if a buffer had not
   existed.
   The present system, which Is based on the calculation of estimated
   production and actual production, has not affected the way the aid system,
   has functioned despite the differences sometimes recorded between those two
   components.
 ---pagebreak---                                      - 43 -
   Lastly, the present stabilizer arrangements provide for annual fixing of
   the MGQ. Although a maximum of 752 000 tonnes has always been used, this
   annual fixing is an additional source of uncertainty among producers.
   Under these circumstances, to remedy the abovementioned drawbacks. It Is
   proposed:
   1.   to discontinue the annual fixing of the MGQ;
   2.   to discontinue the progressive reductions In bands where the MGQ Is
        exceeded but to fix a reduction resulting from the app11 cat Ion of a
        coefficient calculated on the basis of the overrun in the MGQ; that
        coefficient Is to be calculated so as to bring about a reduction
        comparable with the present reduction but more equitable In the case of
        production levels which are close to the present band of 15 000 tonnes;
   3.   to limit the reduction applicable to a marketing year to 20X while
        carrying over that part of the reduction above the 20X maximum to the
        following marketing year; such a change should provide greater
        stability for the stabilizer arrangements;
   4.   to make the MGQ equal to 701 000 tonnes In order to ensure budget
        neutrality. In view of the change in the standard quality (see B(a)
        below).
B. Other chances
   (a) Determination of the standard quality
        Determining the quantity of cotton eligible for the aid requires taking
        a sample to record the Impurities and moisture content in order to
        adjust the weight as such of the cotton placed under supervision,
        taking account of the difference compared with a standard quality (3X
        inorganic impurities and 14% moisture, the organic impurities content
        not being taken into account).
        The standard quality used has turned out to be very different from the
        actual quality of cotton produced (around 3% impurities including 1%
         Inorganic impurities and 10X moisture). Substantial adjustments to the
        contract price and to the quantity of product eligible for aid were
        therefore necessary (Table VIII).
        Furthermore, as organic impurities are not taken into account, the
        producers were not encouraged to produce clean cotton, to the detriment
        of the quality of product delivered.
        Under these circumstances the Commission proposes the following
        standard quality: 3% impurities and 10X moisture, which results in a
        reduction of 6.74x1 in the quantity eligible for aid.
    100 - (1 • 10)      100 - (3 • 10)
    100 - (3 + 14)      100 - (3 • 10)
 ---pagebreak---                                    - 44 -
   (b) Fixing the aid after the event
       While the Commission considers that despite the lack of intervention or
       other measures to facilitate disposal, the latter has not posed major
       problems. It nevertheless notes that glnners who were not able to sell
       fibres on placing under supervision, the latest time limit for the
       submission of aid applications, receive Insufficient aid where there Is
       a fall in the world price. By introducing the possibility of applying
       for the aid after placing under supervision, the problem would be
       so Ived.
5. This report Is accompanied by a proposal for a Council Regulation:
   -   adapting for the second time the system of aid for cotton;
       amending Regulation (EEC) No 2169/81 laying down the general rules for
       the system of aid for cotton (the aim of these two proposals is to
       amend the stabilizer arrangements In line with point 4.A. above);
   -   amending Regulation (EEC) No 1152/90 instituting a system of aid In
       favour of small cotton producers (the aim of this proposal Is to extend
       the arrangements as indicated In point 2.B. above).
 ---pagebreak---                                          - 45 -
                                     TABLE        L
                        Change In Coaaunltv areas under cotton (ha)
                  GREECE                        SPAIM               ITALY    TOTAL
  1978/79 168.232
  1979/80 136.354
  1980/81 141.060
9 1978/80 148.549        148.549
  1981/82 126.300
  1982/83 137.300
  1983/84 168.000                       39.606
  1984/85 192.000                       60.313
  1985/86 209.000                       64.052                             273.052
i 1983/85                                              54.657
  1986/87 210.000                       80.583                          33 290.616
  1987/88 202.000                       87.306                         255 283.561
  1988/89 256.000                      735.473                         166 391.639
  1989/90 280.000                       67.829                          93 347.922
  1990/91 268.000                       83.881                           - 351.881
  1991/92 233.000                       78.496                           - 311.496
9 1989/91                260.333                       76.735              337.068
 ---pagebreak---                                            T A 8 I E     II
                                                                      T                  T
                 MCO  Product Ion Overrun   Theoretlcol reduction                              Small producers
                                                                          Adjusted
                                             (without carryover)                                 (ECU/100 ko)
                                                                        norm      price
             (t<        (tonnes)  (tonnes)      X      |  EfcU/100 ko                        Aid        Adjue. price
                                                                        E C U / 1 0 0 kg
                                                      +
    1997/99   792.000    979.000  123.909     9        |     9.842          87.378                        83.378
    1999/99   792.000  1.199.998  437.998     20(30)   |    19.204          78.818         0              78,818
              792.000  1.099.947  348.947     24      |     23.04S          72.979         9.248          81.221
    1999/90
              792.000    991.743  239.743     18       |    19.338          90.922         8.038          88.998
    1990/91
              792.000    999.912) 139.912     10       |     9,999          99.274         8.038<#>       92,310
    1991/92
                                              IS.9     |    19.193          90.793         4.084<»>       84,897
       •      792.000  1.009.939  299.933
(•) Estimate
 ---pagebreak---                                                               3
                                                          1
                                   Norm prlc*                       Aid 0                    Cv   4.   5   J               kl
                                                                                                                            ft  •5       •
                                                                                                                                         w
                                    Ecu/100 kg                    ECU/100 kg
                                                                                                                                             I
                         •X   "9
                                    •
                                    •
                                    3            •      J                               *                  *-   s   •c
                                                                                                                     m                       <
                                   •J*
                                   <
1
                         <o   8      90.259          3.761                      •»
                                                                                <o    283.561                   875.808    522                   8
j   1987/1966
                                                                                tn
                                                                                ot    391.839               1.189.888      842       |           §
|   1988/1989            co   8      78.820          19.200
                                                                                p»
                                                                       s' s i
                         *o   8      78.736          17.284                     to    347.922               1.098.547      483       |           5
    1989/1990
                         en   8      71.895          23.965            i        «o
                                                                                r*    351.881                   991.793    444                   8
    1990/1991
                                                                   s-
                                                                  CO
                                                                                «—i   311.498                                                    8
|   1991/1992            in   8      89.150          6.710                       ©                          [888.912]     [578]      |
i
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                               •-   CM CM • -    CM
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            •*- « 2             co co co eo ok
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 ---pagebreak---                                                 - 49 -
                                            r *gLC       y
                                 Deliveries of cotton fibres (tonnes)
                                GREECE                                      SPAIM
                  Intra EC-10 Extra EC-10       florid      Intra EC-10  Extra EC-10  tor Id
     1981             1.518      7.765          9.283
     1982             1.130     16.407         17.537
     1983             5.617     17.288         22.905
     1984             7.532     27.431         34.963           8.633       1.463    10.096
     1985                427    37.770         38.197          24.143       8.325    32.463
                  Intra EC-12 Extra EC-12       World        Intra EC-12 Extra EC-12  lorld
     1986            14.956     11.927         26.883          18.807       5.895    24.702
     1987            44.999     43.594         88.593          19.240       7.742    26.982
     1988             4.355     36.793         41.448          18.460       8.736    27.222
     1989            41.821     66.742        108.563          42.474    . 11.702    54.176
     1990            19.468     49.663         69.150          14.534       7.579    22.647
Source   : EUROSTAT-COMEXT
 ---pagebreak---                                       - 50 -
                                  T A B L g   VI
                    EC self-sufficiency rate in cotton fibres
            Production        Exports        Imports      Apparent    Self-
                                                         consumption suffi-
                                                                     ciency
                                                                     rate
                 t               t              t             t         %
   1987       280.195          56.742       1.201.837     1.425.290     20
   1988       380.757          55.593       1.017.376     1.342.540     28
   1989       351.535          89.910       1.028.266     1.289.891     27
   1990       317.374          72.130       1.005.528     1.250.772     25
    9         332.465          68.594       1.063.252     1.327.123     25
Source : EC Commission. DG VI
 ---pagebreak---                                             - 51 -
                                       TABLE        V I I
                  Estimated ond octuol Cc—unlty unglnnod cotton production
                                Production (t)                                Reduction X
             Eattatatod             Actual            Olfforonco       Actual       Thoorotlcol
    1987/88     828.850              875.608              + 46.758           6               9
    1988/89   1.086.902            1.189.866            «f 102.964          20              20
    1989/90   1.009.119            1.098.547              + 89.428          18              24
    1990/91   1.035.279              991.743              - 66.508          25              16
    1991/92     888.912       (1)    850.000       (1)    - 38.912           7               7
    0                                                                     15.2            15.2
(1) E»tlmot«
 ---pagebreak---                                    - 52 -
                             T A B L E   V I II
                Total quality and quantity eligible for aid
                                    GREECE                    SPAIN
   1982/83                           1.055
   1983/84                           1.064
   1984/85                           1,064
   1985/86                           1.066
   1986/87                           1.064                  1,080
   1987/88                           1,051                  1,085
   1988/89                           1,075                  1,103
   1989/90                           1,070                  1,113
   1990/91                           1.071                  1.115
average 1986/87-1990/91              1,066                  1,099
 ---pagebreak---                                      - 53 -
                                    ANNEX II
                        Commission report to the Council
                on the situation with regard to the production
                 and marketing of certain varieties of. tobacco
1. Article 13(1) of Council Regulation (EEC) No 727/70 of 21 April 1970 on
   the common organization of the market In raw tobacco lays down that
   where, for a variety or a group of varieties, the quantities taken over
   by the Intervention agencies exceed, or seem likely to exceed, a stated
   percentage of the production for two successive crops, and In any case a
   stated quantity (see the Annex to Regulation (EEC) No 1469/70), the
   Commission is to submit to the Council a report and proposals for
   measures to bring about a better balance between production and demand
   and to reduce stocks and. If necessary, for measures to enable a
   reasonable standard of living to be maintained for producers. Pursuant
   to paragraph 2 of the same Article, the measures In question are to be
   implemented when It is apparent that for a given single crop the
   extension of cultivated areas Is the main cause of the percentages
   and/or quantities being exceeded.
2. The information available regarding Intervention stocks relates to the
   1988 and 1989 crops and points to large quantities being offered for
    intervention (see Annex I).
   For three varieties the quantities presented for Intervention exceeded
   the quantity for a single crop as referred to in Article 13 and for ten
   varieties the quantities presented for intervention exceed the quantity
   stated for two successive crops (1988 and 1989) as referred to In
   Article 13.
   Among the varieties concerned, three have already been the subject of
   Article 13 measures. These are the varieties hybrids of Badischer
   Geuder the inter, Tsebelia and Mavra.
   For these three varieties, the quantities presented for intervention for
   one or two years were massive (the limit being exceeded by 600X to
   1260%), and the MGQs were also vastly exceeded (by up to 1000%).
 ---pagebreak---                                     - 54 -
3. Production of the variety Badlscher Geudertheimer In Italy In 1989
   totalled 85 321 tonnes, compared with an MGQ of 7 700 tonnes. This
   situation led the Council to take four measures concerning this variety.
   (a)   For the 1989 crop, on the basis of the special measures provided
         for in Article 13 of Council Regulation (EEC) No 727/70 the
         lowering of the intervention price for variety No 1 (Badlscher
         Geudertheimer and hybrids thereof) to 75% of the norm price
         (Council Regulation (EEC) No 1330/90 of 14 May 1990).
   (b)   For the 1990 crop the reclassification of variety No 1 Badlscher
         Geudertheimer grown in Italy under variety 11 with the designation
         hybrids of Badlscher Geudertheimer, along with, among others, the
         variety Forchheimer Havanna, leading to a 25% cut in the premium
         and a 35% cut In the Intervention price (Council Regulation (EEC)
         No 1331/90 of 14 May 1990).
   (c)   From the 1990 crop the reduction of the percentage of the
         production of tobacco presented for intervention triggering the
         measures provided for In Article 13(5) of Council Regulation (EEC)
         No 727/70 from 115 to 110% (Council Regulation (EEC) No 1332/90 of
         14 May 1990).
   (d)   For the 1991 crop an additional 13% cut in the prices and premiums
         (Council Regulation (EEC) No 138/91 of 13 June 1991).
4. The Increase In the quantities of varieties Nos 23 Tsebelia and 24 Mavra
   offered for intervention led the Council in 1989 to cut the intervention
   price to 75% of the norm price pursuant to Article 13 of Regulation
   (EEC) No 727/70 (Council Regulation (EEC) No 1253/89). For the 1990
   crop the Council also reduced the level of prices and premiums for these
   two varieties by 15% (Council Regulation (EEC) No 1331/90), followed by
   13% for the 1991 crop (Council Regulation (EEC) No 1738/91).
5. For the variety Badlscher Bur ley (zone B) the ceiling was exceeded for
   the 1988 crop, while the crop area increased significantly. Since then
   the crop areas appear to be stabilizing (despite a substantial increase
    in 1990), but production in 1990 and estimated production In 1991 show a
   steep rise (169% up on 1988).                      *
6. The other nine varieties come under the category sun-cured, also known
   as oriental varieties. The development in the areas cultivated in 1988
   and 1989 Is close to the average, and the level of production remains
   below the MGOs except in the case of the Italian oriental varieties,
   which exceeded the MGQ by 9% in 1989 only. For the 1988 and 1989 crops
   the reason for the increase in intervention is not therefore the trend
    in production but the trend in demand for these varieties.
 ---pagebreak---                                     - 55 -
   These varieties have, to a greater or lesser degree, specific aromatic
   characteristics which are sought for the manufacture of American blends.
   A large percentage of this tobacco thus finds an outlet on the world
   market and is very sensitive to trends in these outlets.
   The increase in the quantities of oriental tobacco from the 1988 and
   1989 crops entering intervention can thus be attributed to a substantial
   decrease in exports In 1989, linked with a surplus of world stocks. It
   may also be the case that certain speculative practices have reinforced
   this situation.
7. The current market situation with regard to the 1990 and 1991 crops can
   be regarded as relatively satisfactory. Having regard to greater demand
   on the world market, prices have Improved and, according to the
    information supplied by the Member States, the quantities of tobacco
   from the 1990 crop entering Intervention are very small. It may
   therefore be assumed that in general the risk of high Intervention
   buying is limited and would not require special measures. Nonetheless,
   as regards the three problem varieties mentioned In point 3, the
    intervention potential remains high, in view of the limited demand on
   the market.
8. In October 1991 the Commission put three proposals for Regulations to
   the Council, the first on the common organization of the market in raw
   tobacco, the second fixing the premiums and quotas, and the third
   concerning inter-branch organizations and agreements in the tobacco
   sector.
   However, as the adoption of this reform by Council has been delayed, the
   existing regulations will remain in force for the 1992 crops.    It is
   therefore proposed to roll-over, for the 1992 crop, the special measures
   taken for the varieties No 11 Forchheimer Havanna, Hybrids of Badischer
   Geudertheimer, etc.. No 23 Tsebelia and No 24 Mavra.
 ---pagebreak---                                                    - 56 -
                                           ANNEX        L
      Variety                    X by which Interven-      Percentage change
                                 tion quantities                 In crop
                                 pursuant to Article              area
                                 13 are exceeded
                                  1988         1989         1988           1989
                                                            1987           1988
No 1 Badlscher Geuderthelaer
            Zone B •             1.260.8        -         4 259.0        4 15.1
No 23 Tsebella                     925.8     900.5        -    1.0       -   0.8
No 24 Mavra                       1102.0     602.5        -    2.5       -   6.8
No  2 Badlsher Bur ley
            Zone B                 159.2        -         4   92.0       4   0.4
No 21 Myrodata                       -       539.8        -    5.0       - 10.0
No 13 Xanthl Yaka                  149.7     287.5        •   15.0       -    4.8
No 14 Perustlza                    126.5       77.7       +   11.6       - 12.1
No 15 Erzegovlna                     97.2    143.7        -   37.4       - 25.0
No 17 Basaa                          43.9      46.3       -    5.8       4 12.4
No 18 Katerlnl                       90.0      20.4       -    5.7       4    4.0
No 19 Kaba Koulak CI.              326.4     249.5        -   23.5       4 36.3
No 20 Kaba Koulak N-CI.              25.0    393.6        -   31         - 27.3
No 22 Zlchnoiyrodata                477.9     561.4       -   17         - 14.0
   Fron the 1990 harvest onwards variety No 1, Badlscher Guederthelaer (Zone B) Is reclassified under
   variety No 11(e) hybrids of Badlscher Guederthelier.
 ---pagebreak---                                                      - 57 -
                                             MHEX         LL
         Variety                                                    Production
                                                                     (tonnes)
                                     1988        1989         1990         1991 (•)
  No   1 Badlscher Geuderthelaer
               Zone B ••            67.407      85.321       45.222        46.000
         Forchheleer Havanna         6.504       3.954       25.395        25.000
  No 23 Tsebella                    30.084      30.060       21.590        21.000
   No 24 Mavra                      13.267      13.176        9.163        10.000
   No  2 Bad 1sher Bur ley
               Zone B                3.973       3.890        5.443         5.500
   No 21 Myrodata                    5.885       6.055        4.618         5.000
   No 13 Xanthl Yaka                 8.875      10.368        8.408         8.500
   No 14 Perustlza                   8.815       9.263        8.635         8.600
   No 15 Erzegovina                  2.164       2.217        1.978         1.900
   No 17 Basia                      24.410       23.975      20.304        26.000
   No 18 Katerinl                   19.226       19.256      18.950        21.000
   No 19 Kaba Koulak CI.            23.709       17.373      13.725        13.000
   No 20 Kaba Koulak N-CI.           3.362        2.500       1.668          1.500
   No 22 Zlchnoayrodata                774           700        397            400
• Estimate.
•*    Froa the 1990 harvest onwards variety No 1, Badlscher Guederthelner (Zone B ) , Is reclassified
      under variety No 11(e). hybrids of Badlscher Geudertheiier.
 ---pagebreak--- H* 1                                                      Prlco propoaols In ecus for Indlvlduot oqrlcutturol products          13.2.1992                - 58 -
                                                                     1991/92              Proposals                  Spain                         Portugal
          Product and typo of prlco or amount                       Decisions              1992/93
                   (Period of application)
                                                               Amounts    X change   Amounts       X        Amounts  n eeus/t        X     Amounts n ocus/t       X
                                                                ecus/t           (D  In eeus/t   change   1991/92      1992/93     change   91/92   1992/93     change
                               1                                                                                                            9 (4)    10(4)        11
   Common wheat                           1. 7.92-30. 6.93
      - Target prlco                                             233,26 I    - 0.41    232,76       0,21     233,26      232,76     - 0,21  233.26    232.76     - 0,21
      - Intervention prlco breadmaklng wheot (2)                 168.55        0.00    168.55       0.00     168,55      168.55       0.00  210.80    206,11     - 2.22
      - (Intervention price feed wheat)                          160.13        0.00    160.13       0,00     160,13      160.13       0,00  200.26    195.80     - 2,22
   Barley                                 1. 7.92-30. 6.93
      - Target price                                             212.33 I    - 0.45    211.83       0,24     212.33      211.83       0.24  212.33    211,83       0,24
      - Intervention pr ce                                       160,13        0.00    160.13       0.00     160,13      160.13       0.00  160.13    160.13       0.00
  Maize                                    1. 7.92-30. 6.93
      - Target price                                             212.33     - 0.45     211.83       0,24     212.33      211,83       0.24  212,33    211,83       0.24
      - Intervention Pr ce                                       168.55        0.00    168.55       0,00     168.55      168.55       0.00  168,55    168.55       0.00
   Sorghum                                 1. 7.92-30. 6.93
      - Target price                                             212.33     - 0.45     211.83       0,24     212.33      211,83       0.24  212.33    211.83       0.24
 1    - Intervention  PrIce                                      160,13        0.00    160,13       0,00     160,13      160.13       0.00  160.13    160,13       0.00
1 Rye                                      1. 7.92-30. 6.93
 1    - Torget price                                             212.33     - 0.45     211.83       0,24     212.33      211.83     - 0.24  212.33    211,83       0.24
1      - Intervention Pr ce (3)                                  160.13        0,00    160.:3       0,00     160.13      160.13       0,00  160.13    160.13       0.00
   Durum wheat                             1. 7.92-30. 6.93
      - Target price                                             277.21     -3.54      276,71       0,18     277,21      276,71     - 0.18  277.21    276.71       0.18
      - Intervention price                                       227.70     - 3,50     227.70       0.00     216.48      227.70     4 5.18  227,70    227,70       0.00
      - Aid (ecue/ha)                                            161.88     4 6.28     181.88       0.00     148.34      181,88    4 24.29  181.88    181,88       0,00
   Rice                                    1. 9.92-31. 8.93
      - Target price - hueked rice                               546.13        0,00    545.52       0,11     546.13      545,52     - 0.11  548.13    545.52       0,11
      - Intervention price - paddy rice                          313.65        0,00    313.65       0.00     313,65      313.65       0.00  338.39    332,21       1,83
   Sugar                                  1. 7.92-30. 6.93
      - Basic price for sugar beet                                40.00 I      0.00     40,00       0.00      46.84       48.08        1.8   42.83     41,57      - 2.9
      - Intervention price for white sugar (•)                    53.01 I      0.00     53,01       0.00      61.29       59,57        2.8   53,35     54.22      4 1.6
(•)  ecus/q.
(1)   Without the ogrlmonetary effect.
(2)   For the 1991/92 marketing yeor. this prlco was Increased by 3.37 ocus/t for a higher quality. A premium of ECO 3,27 ocut/t It propotod for 1992/93 (^3.00X).
(3)   For the 1991/92 marketing yeor. this prlco wot Incroasod by 4,22 ecus/t for a higher quality. A premium of ECU 4,09 ocus/t It propotod for 1992/W (-3X).
(4)   Portuguese producers receive special assistance to grow common wheat, barley, maize, sorghum and rye, (R. 3653/90).
 ---pagebreak---                                                                                          - 59 -
N* 2                                                        Price proposols In ecus for Indlvlduol oqrlculturol products
I                                                              I        1991/92       I      Proposals       I             Spain               I            Portugal            I
I           Product and type of price or amount                I      Decisions       I      1992/93         I                                 I                                I
I                    (Period of application)                   I                      I            I                                           I                                I
I                                                              I Amounts I       X      I Amounts I      X      I Amounts In ocus/t I      X      I Amounts In ocut/t I      X     I
I                                                              I ecus/t    I change   I ecus/t    I change   I  1991/92 I 1992/93 I change     I 1991/92 I 1992/93 I change I
,                                                               1          1          1            1         1            1          1          1          1           1        1
i                                1                             I     2     I     3    I      4    I     5    I      6    I       7   t   8     I     9     I    10     I  11    I
•                                                               1          1          1           1          1           1           1         1           1           1        1
! Olive oil                                  1.11.92-31.10.93 I             I          I           I         I            I          I          I          I           I        I
I    - Production target price                                 I 3.220.1 I          0 I 3.220,1 I        0,0 I   3.220.1 I 3.220.1 I      0.0 I 3.220.1 I 3.220,1 I        0,00 I
I    - Intervention price                                      I 2.158,7 I          0 I 2.038,7 I      - 5,6 I   1.853.1 I 1.846,3 I    - 0,4 I 2.096.5 I 1.999.5 I       -4,6 I
I    - Representotive market price                             I 1.972,8 I        3,7 I 1.932.8 I      - 2,0 I         - I         - I       - I        - I          - I      -I
I    -Production aid                                           I    708.3 I         0 I     828.3 I     16.9 I     458.5 I     551,0 I   20,1 I     425,3 I     526,1 I    23,7 I
I    -Consumption aid                                          I    539.0 I - 11,5 I        459,0 I - 14,8 I       456.7 I     457,5 I    0,2 I     494,2 I     482,5 I   - 1,4 I
I Dried fodder - Guide prlce(l)              1. 5.92-30. 4.93  I   178.61 I       0   I    178.61 I        0 I    178.61 I    178.61 I       0 I   178,61 I    178.61 I        0I
,_                                                             |           |          1           1          1           1           1         1          1            1        1
I Peas and field beans                      1. 7.92-<J0. 6.93  I           I          I           I          I           I           I         I           I           I        I
I    - Activating price                                        I    440.1 I     -1.5 I      440.1 I        0 I     440,1 I     440,1 I       0 I    440.1 I     440,1 I        0I
I    - Cuide price                                             I    290.3 I     - 1.5 I     290.3 I        0 I     290.3 I     290,3 I       0 I    290.3 I     290.3 I        0I
I    - Minimum price - peas                                    I    253,4 f     - 1,5 I     253,4 I        0 I     253.4 I     253.4 I       0 I    253,4 I     253.4 I        0I
I                        - field beans                         I    234,7 I     - 1.5 I     234,7 I        0 I     234.7 I     234.7 I       0 I    234,7 I     234.7 I        0I
l_                                                             |           1          1           1          1           1           1         1          1            1        1
I Lupins                                     1. 7.92-30. 6.93  I           I          I           I          I           I           I         I           I           I        I
I    -Activating price                                         I    423.4 I     - 1.5 I     423,4 I        0 I     423,4 I     423,4 I       0 I    423.4 I     423.4 I       0I
I    -Minimum price                                            I    284.2 I     - 1.5 I     284,2 I        0 I     284,2 I     284.2 I       0 I    284.2 I     284.2 I       0I
| Flax                                       1. 8.92-31. 7.93   I           I          I           I          I           I           I         I          I            I       I
I    - G u i d e price (seed)                                  I   544,90 I     - 1.5 I    544.90 I        0 I    507.30 I    516.70 I    1.9 I    544,90 I    544,90 I       0I
I    -Fixed-rote aid (fibre) (per ha)                          I   374.36 I       0   I    374,36 I        0 I    318.87 I    374.36 I   17,4 I    318.87 I    374,36 I    17,4 I
| Hemp                                       1. 8.92-31. 7.93   I           1          I           I          I           I           I         I           I           I        I
I    - Fixed-rate old (per ho)                                 I   339,42 I       0   I    339.42 I        0 I    289.16 I    339,42 I   17,4 I    289.16 I    339,42 I    17.4 I
1    - A i d (seed)                                            I   245,90 I     - 1,5 I    245,90 I        0 I    245.90 I    245.90 I       0 I   245,90 I    245.90 I        0I
I                                                              |    -      |          I           j          |           I           I         I           I           \        *
I Silkworms                                  1. 4.92-31. 3.93  I           I          I           I          I           I           I         I           I           I        I
I    - A i d per box                                           I   111.81 I       0 I      111.81 I        0 1     95.80 1    111.81 I   16,7 1     95.80 1    111,81 I    16.7 1
(1) A 20X reduction in aid over 2 years Is proposed, using a coefficient of 90 X In 1991/92 and 80 X In 1992/93.
 ---pagebreak---                                                          K r i c e p r o p o s e n in ecus tor  Indlviduol a q n c u i turol products                                                 - 00 -
                                                                            1991/92              Proposals                            Spain                               Portugal
          Product ond type of price or amount                             Decltlons               1992/93
                  (Period of application)
                                                                  Amounts        I    X        Amounts  I     X            Amounts n ocut/t          X       Amounts InI ocus/t      I    X
                                                                  ecus/t         I chonge       ocus/t   I chonge          1991/92     1992/93    change     1991/92 II 1992/93 I change
                                                                                  1                                                                                     I            1
                                                                        2         I    3                                                                                I      10    I   11
                                                                                 1                      1                                                               I            1
  Cotton                                  1. 9.92-31. 8.93                       I                      I                                                               I           I
     - Guide price                                                     958.6 I                  1.027.9 I 7,23(«0            958.6      1.027.9    7.23(0       958.6 II 1.027.9 I 7.23(*)
     - Minimum price                                                   910.7 I                    976.5 I 7.23(»)            910.7        976.5    7.23(0       910.7 II      976,5 I 7,23(*)
                                                                                                        1                                                               I            1
  Milk                                    1. 4.92-31. 3.93                        I                     I                                                              II           I
     - Target price                                                    268,1 I                    268,1 I                    268.1        288.1          0      268.1 II      268.1 I        0
  Butter                                                                         I                      I                                                              II           |
     - Intervention price                                          2.927.8 I                    2.927.8 I                  3.024.9      2.927.8      -3.2     2.927.8 I 2.927.8 I            0
  Skimmed milk powder                                                            I                      I                                                              II           I
     - Intervention price                                          1.724.3 I                    1.724.3 I                  2.028.7      1.724,3     - 14,9 2.100.0(1)1! 2.070.0 I         -1.4
  Crana padano cheese 30-60 days                                                  I                     I                                                              II           I
     - Intervention price                                          3.796,7 I                    3.796.7 I                                                              II           I
  Grona pedono cheese 6 months                                                    I                     I                                                               I           I
     - Intervention price                                          4.704.3 I                    4.704.3 I                                                               I           1
  ParmlgIano-ReggIano cheese 6 months                                             I                     I                                                               I           I
     - Intervention price                                          5.192.1 I                    5.192.1 I
I Beef/veal                               2. 4.92-31. 3.93 I                      I                     I                           I           I          I           I            1
I    - Guide price for odult bovine onlmalt (2)                I       2.000 I                    2.000 I                    2.000 I      2.000 I        0 I    2.000 I       2.000 1
I    - Intervention price quality R 3 cat. A                   I       3.430 I                    3.430 I                    3.430 I      3.430 I        0 I    3.430 I       3.430 I
I    - Intervention price quality R 3 cat. C                   I       3.430 I                    3.430 I                    3.430 1      3.430 I        0 I    3.430 I       3.430 I
                                                                   1992                                              1993
I Sheepmeat                              7. 1.92- 6. 1.93 1 "                    I          t           I               I           I           I          I           I
I    - Boslc price (carcase weight)                             I 4.229,5 I             - 2 I 4.229,5 I              0 I 4.229,5 I 4.229.5 i             0 I 4.229.5 I 4.229.5 I
I Plgmeat                                 1. 7.92-30. 6.93     I                  I                      I              I           I           I          I           I            I
I    - Basic price (carcase weight)                             I      1.897 I            0 I     1.897 I            0 I     1.897 I      1.897 I        0 I    1.897 I       1.897 i
(*) Technical adjustment taking account of the Improvement In the standard quolity.
(1) For the Azoree. the Intervention price for skimmed milk powder Is ECU 3/100 kg less than the price Indicated, which It applicable on the mainland.
(2) Price per tonne (IIvewelght).
                                                                                                                                                                                             5
 ---pagebreak--- N« 4                                                       Price proposols In ecus for Indlvlduol oqrlculturol products                                                    - 61 -
                                                                       1991/92            Proposals                       Spain        0)                      Portugal (2)
          Product ond type of price or amount                        Decisions             1992/93
                   (Period of application)                    i                                                                                  •I                   —
                                                              I Amounts I X      (3) I Amounts    %     (3) I Amounts In ecus/t        *     (3) I Amounts In ecus/t     I*      (3)
                                                              I ecus/t    I change   I ecus/t      changs    I 1991/92     1992/93     change     t 1991/92     1992/93  I change
                                                              I            1                                •I                                   .|
                                                              1 2             1 3                            I     6                              I     9          10    I    11
                                                              I            1
  Fruits and vegetables - Basic price                         I           I
                                                                                                                                                                         |           i
                                                              I           I
     - Caul If lowers                       1 5.92-30. 4.93 I        -    I)       0                                                       4 5.0 I                       I    4 3,4
     -  Tomatoes                           11 6.92-30.11.92 I        -    I)       0                                                     4 13.8 I                        I    4 5.5
     - Pooches                              1 6.92-30. 9.92 I        -    I)       0                                                       4 1.0 I                       I         0I
     -  Lemons                              1 6.92-31. 5.93 I        -    I)       01                                                      4 9,7 I                       I    4 9.0 I
     - Pears                                1, 7.92-30. 4.93 I       -    I)       01                                                     4 7.9 I                        I    4 8.6
     - Tab I* grapes                        1 8.92-20.11.92 I        -    I)       0                                                           0 I                       I    4 5.4
     -  Apples                              1, 8.92-31. 5.93 I       -    I)       01                                                     4 7,5 I                        I    4 5.0
     -  Mandarins                          16.11.92-28. 2.93 II      -    I)       01                                                     4 5.6 I                        I         0 1
     - Sweet oronges                        1.12.92-31. 5.93 I       -    I)       01                                                     4 1,8 I                        I    4 4.5 I
     -  Apricots                            1. 6.92-41. 7.93 I       -    I)       0                                                      4 8.1 I                        I    4 6.3 I
     -  Aubergines                          1. 7.92-31.10.92 I       -     I)      0                                                     4 16.0 I                        I    4 5,8 I
     -  Clementines                         1.12.92-15. 2.93 I       - I )         0                                                           0 I                       I         0I
     - Satsumas                            16.10.92-15. 1.93 I       -    I)       0                                                           0 I                       I         0I
     -  Nectarines                          1. 6.92-31. 8.92 I       -     I)      0                                                           0 I                       I         0I
(1) Including price alignment (3rd alignment)
(2) Including price alignment (2nd alignment)
(J) Without the effect of intervention thresholds.
  Table wine      (D                        1 . 9.92-31. 8.93
     - Guide   price  Type  I                                       3.21           0 I     3,21           0 1      3.01 1      3.21  1   4  6.64 1      3.21 t      3.21
     - Guide   price  Type  11                                      3.21           0 I     3.21           0  1     3.01 1      3.21  1   4  6.64 1      3.21 1      3,21
     - Guide   price  Type  III                                    52.14           0 I    52,14           0  1    48.81 1     52.14  1   4  6.82 1     52.14 1     52.14
     - Guide   price  Type  I                                       3.21           0 I     3.21           0  1     3.01 I       3.21 1   4  6.64  I     3.21 1      3.21
     - Guide   price  Type  II                                     69,48           0 I    69.48           0  1    65.04 1     69.48  1   4  6,83 1     89.48 1     69.48
       Guide  price  Type A III                                    79.35 I         0 I    79.35           0  1    74,28 1     79,35  1   4  6.83 1     79.35 1     79.35
(1) R I, R II and A I expressed In ocus/X/hl.
    R III, A II and A III expressed In ecus/hi.
    For Portugal Including price alignment (1st alignment) carried out in 1991/92.
                                                                                                                                                                                 ^
 ---pagebreak---                                                 - 62 -
N» 5
                     Price proposols In ocut for Indlvlduol oqrIcultureI productt
I      Product, group ond variety       I   Harvott 1991 - Docttlont   I Harvott 1992 - Propotolt   I
I                                       I    Prlee/premlum/X change    1    PrIee/prem tum/X chango I
I                                       I    compared with 1990        I    compared with 1991      I
I                     1                 1              2               I              3             I
I Tobacco                               I                              I                            '
I                                       I)   Prtco - 6X odjuttable     I OX; oxeopt whore tho       I
I                                       I)   Premium - 6X odjuttobio   I proportion of lowor        |
I                                       I                              I qualities purehatod by     I
I                                       I                              1 o processor exceodt        I
I                                       I                              I o specified maximum.       I
                                                                                                      ^N
 ---pagebreak---                                                                                    - • 3 -
Toblo 2                              AC R I M O N E T A R Y       f R O M f A l l       -   PRICI    > A C U t f      1 1 1 2 / 1 3
Applicable ot the beginning of tha '992/93                     Ign
                 MEMBER STATES                 GREEN                  PREVIOUS SITUATION                                SOT SITUATION           EPPECT
                                               CENTRAL          GREEN         REAL        APPLIED  DISMM4T-    GREEN          REAL    APPLIED     ON
                                               RATES(2)         RATES         •JAPS         •JAPS   LEMENT     RATES          •JAPS     •JAPS   PRICES
                  Product Craup(l)           ( e c u - , .nc) (ecu-..nc)    (points)      (points)           (ecu». .nc)   (points)   (points)
  RELG I U M A U O M B O U R B                   48.9063
                           A l l products                       46.5963       0.000            0.0        0    48.5963        0.000        0.0  0.000
  OENMARK                                        1.97909
                           All   products                       t.97909       0.000            0.0        0    8.97980        0.000        0.0  0.000
  PRANCE                                         7.89563
                           All   products                       7.80963       0.000            0.0        0    7.80563        0.000        0.0  0.000
  CERMANY                                        2.38418
                           All   products                       2.36416       0.000            0.0        0    2.39418        0.000        0.0  0.000
   IRELAND                                     0.878776
                           All   products                      0.878776       0.000            0.0        0   0.878776        0.000        0.0  0.000
   ITALY                                         1761.45
                           All   products                       1761.49        0.000           0.0        0    1761.49         0.000       0.0  0.000
   NETHERLANDS                                   2.85256
                           All   products                       2.69256        0.000           0.0        0    2.89296         0.000       0.0  0.000
   PORTUGAL                                      202.670
                           All   products                       208.676        2.878           1.*  -1.378     209.796         1.500       0.0  -1.399
   UNITED KINGDOM                              0.815203
                           All   products                      0.795423      -2.487           -1.0   0.907    0.803196      -1.900         0.0  0.972
   SPAIN                                         147.965
   S M ( , milk                                                  154.136       4.251           2.8  -2.791      149.832        1.500       0.0  -2.794
   Cereals, sugar                                                153.498       3.852           2.4  -2.392      149.832        1.900       0.0  -2.388
   Ollva o i l . » l n e . drlod fodder.
       f l e x . hemp, sllkeorme                                 149.813       1.487           0.0    0.000     149.813        1.467       0.0  0.000
   Cotton, groin legume*                                         151.660       2.687                -1.187      149.832        1.500       0.0  -1.209
   Sheeomeat. other crop prod.                                   150.828       2.150                -0.650      149.832        1.900       0.0  -0.660
   Others                                                        151.660       2.687           0.0  -1.167      149.832        1.500       0.0  -1.205
   GREECE                                        270.197
   Shsspmsot. esroals. sugar.
    v i n e , ©live o i l , tobacco.
     f i s h i n g p r o d . , structure                        292.121      -7.170           -5.7    5.670 r   266.204     -1.900         0.0  5.566
   Tomatoes, cucumbers.
    courgettes, aubergines                                      297.188      -0.096                   3.596    266.204      -1.900               3.506
   Poultry ( 3 )                                                256.467      -5.345           -2.2    3.849    266.204      -1.500         0.0   3.788
   Croln legumes ( 3 )                                          257.895      -4.770                   3.270     266.204     -1.500         0.0   3.222
   Other crop products ( 3 )                                    257.188      -6.096                   3.996     266.204      -1.500              3.506
   Others ( 3 )                                                 257.895      -4.770           -3.3    3.270     266.204      -1.500        0.0   3.222
(1) Except plcrrot (application of Article 6a of Council Regulation (EEC) No 1676/05).
 (2) Switch-over coefficient - 1.145109 - Creen market rate for floating currencies; »eek of reference: 29.1.92 — 5.2.92.
(3) The pocket price dismantlement has to be added to the automatic dismantlement taking effect ot the beginning of the 1992^3 campaign:
       Poultry                                                  292.121      -7.170           -2.2    1.825     256.467      -9.345         0.0  1.732
       Craln legumes                                             292.121     -7.170                   2.400     257.895      -4.770              2.290
       Other crop products                                       252.121     -7.170           -9.7    2.112     257.188      -5.058       -3.6   2.010
       Others                                                    252.121     -7.170           -9.7    2.400     257.895      -4.770       -3.3   2.290
 ---pagebreak---                         - 64 -
                        TflMe 3
Effect of Commission proposals on support prices for
    agricultural products expressed in ecus and in
                  national currency
                            X change in prices (1)(2)
                       In ecus       in national currency
                                             (3)
  Belgium                 0.0                   0.0
  Denmark                 0.0                   0.0
  Germany                 0.0                   0.0
  Greece (4)              0.0                   6.1
  Spain (5)                1.2               - 0.4
  France                   0.0                   0.0
   Ireland                 0.0                   0.0
   Italy                   0.0                   0.0
  Luxembourg               0.0                   0.0
  Netherlands              0.0                   0.0
  Portugal (5)             0.4                - 1.0
  United Kingdom           0.0                  1'.O
  EUR 12 (5)               0.1                   0.3
(*) Excluding Impact of stabilizers
(1) Percentage variation between proposed support prices for
      1992/93 and the support prices for 1991/92
(2) Support price (intervention or equivalent), weighted
      according to the share of the various products in the
      value of agricultural production covered by common prices
(3) Common prices in ecus, converted at green rates in this
      proposal. For the currencies not respecting the narrow
      band in the EMS calculations were done using the rates of
      the week ending on 5.2.92
(4) Including effect of automatic dismantlement
(5) Including effect of alignment of Spanish and Portuguese
      prices on common prices under accession arrangements
 ---pagebreak---                                                        - 09 -
                          Toble 4 - Stabilisers end production thresholds (without 00*)
                                                      1991/92                                           1992/93
                 Ouotes or MCO           Market situation             Overrun                 I Ouota or quantity
                 applicable                                                                   lapplI cab I a/proposed
                                                                                             .I|
 Cereols    MCO : 160 million t       Estlmoted production:    overrun t million t:           I     Proposed In the
                                      169 «lII Ion t           cut In price for 92/92 of 3%   I     context of CAP
                                      (+11.6 Million t                                        I     reform : the some
                                      5 new LSnder)                                           I     am for 1991/92
 Sugar      Ouota A : 11.187 m t      Production (Including                                   I The same as for
(white      Quota 8 : 2.488 m t       carryovers) In m t                                       I 1991/92
sugar eq.)                            Ouota A : 10.970                                         I
                                      Ouota 8 i 2.412                                          I
                                      Sugar C : 2.158                                          I
                                      Total     : 15.335
 Isoglu-    Ouoto A : 240.743 t       Estimated production
 cose       Quota 0 : 90.342 t        within quotas
 Rape       MCO                       Estimated production:   EUR-10 : overrun of 41.7% re-    I SMC : (approvsd
            EUR-10 : 4.900.000 t      EUR-10 : 6.376.000 t    sulting in o reduction of        I by the CounclI)
                                                              ECU 9.06/100 kg (- 20.SX)        I
                                                              In the target price              IEUR-12: 2.377.000ha
            Spain      : 12.900 t     Spain      : 21.000     Spain : ECU - 6.78/100kg In      l(wlth DDR)
            Portugol      1,300 t     Portugal : —            the target price (-16.2%)        I
                                                              Portugal : no overrun            I
                                                                                               I
Sunflower   MCO                        Estimated production:  EUR-10 : overrun of 48.3 X        I SMC : (approved
            EUR-10 : 2.000.000 t       EUR-10 : 2,966.000 t   resulting In a reduction of      I by the CounclI)
                                                              ECU 18.43/100 kg (-32.IX) In     IEUR-10:1.202.000ha
                                                              the target price                  ISpaln :1.411,000ha
             Spain     : 1.411.800 t   Spain     : 1.036.000t Spain     : no overrun            (Portugal:122.OOOho
             Portugal :     90.000 t   Portugal :     39.000t Portugal : no overrun             I
                                                                                                I
                                                                                                I
  Soya       MCO                       Estimated production   Overrun of 19%                    I SMC : (approved
             EUR-12 : 1.300.000 t      1.947.000              resulting In a reduction of       I by the CounclI)
                                                              ECU 11.07/100kg In the guide      I
                                                              price for the Community of Ten I EUR-12:509.OOOho
                                                              end ECU 4.67/100kg for Spain      I
                                                              (-9.6X)                           I
                                                                                                I
                                                                                                I
  Pees,      MCO                       Estimated production   Overrun of 27.6% resulting In     I MCO : the some
  field      EUR-12 : 3.900.000 t      EUR-12 : 4.469.000 t   a reduction of ECU 4.8/100 kg     I as for 1991/92
  beans                                                        In the guide prices for peas     I
  and swset                                                   and field beans (-16.5%)          I
  lupins                                                                                         I
                                                                                                 I
                                                                                                 I
                                                                                                 I
                                                                                                 I
                                                                                                 I
                                                                                                 I
                                                                                                 I
  01 ive     O.M.C.                    Production will be      No clear indication               I MCO : the some
  ol I       EUR-12    1.390.000 t     estimated In March                                        I os for 1991/92
                                        1992                                                     I
                                                                                                 I
                                                                                                 I
                                                                                                 I
  Wine       Compulsory distilla-       Ouantlty covered       Yes : averoge price reduction     I
              tion : Pries bosed on     by the compulsory-     for compulsory distillation :     I
              the quantity covered      distillation scheme:   about 28%                         I
             by the compulsory-         1S.600.00Oh!                                             I
              distillation scheme,as                                                             i
              follows : 50% of ths                                                                I
              guide price for the
              equivalent of 10% of
              the volume used;
              7.5X of that price
              for the remainder
 ---pagebreak---                                                            - 06 -
                                                   1991/92                                 1         1992/93      I
                   Ouota or MCO        |     Market situation   1           Overrun        1 Ouota or quantity 1
                   applicable          1                                                     applIcable/propossdl
1 Tobocco    I Overa 11 MCO            1 Anticipated overall 1 Overrun In the case of cer- 1 Overall quoto :      1
               EUR 12 : 390.000 t of   1 production :           1 teln varieties           I EUR 12:340.000 t     1
                leaf tobacco.          1 EUR 12 : t490.000 t I                                 ollocated by       j
               Allocated by variety    1                                                       variety and group  1
                                                                                               of varieties,      1
                                                                                               proposed to the    1
                                                                                               Council            I
1 Cotton     1 MCO : 752.000 t         1 Estimated production:! Reduction of old by 6.710  1 MCO : EUR 12         1
               (EUR-12)                I EUR-12 :     888.912 t I ECU/100 kg                   701.00 t           I
                                                                                               (the same as       I
                                                                                               lost year but      I
                                                                                               adapt to take      1
                                                                                               account of the     1
                                                                                               chonge In the      |
                                                                                               standard quantity)!
                                                                                               Intervention        |
1 Fresh         Intervention threshold ! Withdrawals :                                         thresholds :       1
1 tomatoes     EUR-12 : 599.300 t      1 52.218                                                the some as for    1
                                          (provlslonol)                                        1991/92            I
t Caul 1-       Intervention threshold    Withdrawals :                                        3% of the overage 1
I flowers      EUR-12 : 57.300 t          26.350                  No overrun                   quantity produced 1
                                          (provlslonol)                                        for coneumptIon, 1
                                                                                               not Including pro-l
                                                                                               ducts for proces- I
                                                                                               elng. In the lest 1
                                                                                               five yeers         1
1 Nectar 1-     Intervention threshold    Withdrawals :           Overrun anticipated,          10 X of average   1
1 tines         EUR-12 : 62.400 t           79.043                (price reduction of 9%)      quantity produced  1
                                           (provlslonol)                                       some basis as for  1
                                                                                               cauliflowers       1
1 Peaches       Intervention threshold    Withdrawals :           Overrun anticipated,          12 X of overege   1
                EUR-12 : 269.700 t          422.688               (price reduction of 6%)      quantity produced  1
                                           (provlslonol)                                       some basis as for  1
                                                                                               caul iflowsrs      1
|-Apples        Intervention threshold    Marketing year                                       the some as In     1
                 EUR-12 : 240.300 t       under way                                             1991/92           1
1 Oranges       Intervention threshold    Marketing year                                        10 X of average   1
                EUR-12 : 1.181.800 t       under way                                           quantity produced  1
                                                                                             1 In the last five    1
                                                                                    •f
                                                                                             ! years plus          1
                                                                                             ! 792.392 t           1
I Lemons      ! Intervention threshold     Marketing year                                    I  10 X of average    I
              I EUR-12 : 369.400 t                                                           I  quantity produced  I
                                                                                             I  In the last five   I
                                                                                             I  yeors plus         I
                                                                                             I  290.993 t          I
1 Sotsumos    1 Intervention threshold     Marketing year                                    I  10 X of avsrags    1
              I EUR-12 : 34,900 t          under way                                         1  quantity produced  1
                                                                                             1  In the lest five   1
                                                                                             1  yeers              1
 1 CI4m«n-    1 Intervention threshold     Marketing year                                    1  10 % of overege    1
 1 tines      1 EUR-12 : 133.900 t       1 under way                                         1  quantity produced  1
                                                                                             1  in the lost five   1
                                                                                             1  years              1
 1 Vendor 1-  I Intervention threshold 1 Marketing year                                      1   10 % of average   1
 t net        I EUR-12 : 35,800 t        1 under way                                         1  quantity produced  1
                                                                                             I   In the last five  1
                                                                                             1  yeers              1
 ---pagebreak---                                                1991/92                                         1992/93
              Ouota or MCOs          Market situation               Ovc                  Ouota or quantity
              applIcablo                                                                applI coble/proposed
Processed  Guarantee thresholds
tomatoes   Concentrate :
           EUR-11   : 4.283.699 t                        No claer Indication
           Cermany        33.700 t
           Peeled                                        No clear Indication
           EUR-12      1.543.228 t
           Other
           EUR-11        734.920 t                       No clear Indication
           Cermony         1.300 t
Orled      Cuarantee threshold                           No overrun                      Some thresholds
grapes     Currants     68.000 t                                                         as In 1991/92
           Sultanas     93.000 t
           Moscotsl      4.000 t
Willi ome  Cuarantee threshold                                                           Same thresholds
pears      EUR 12 : 102.805 t                                                            as In 1991/92
Psochee    Cuarantee threshold                           No overrun                      Some thresholds
In syrup   EUR-12 : 582.000 t                                                            as In 1991/92
           Overall guaranteed                            Small overrun expected, on the  Propossd
           quantity (Including                           fat basis content (tO.SX)       In the context
           Community reserve and                                                         of the CAP
          temporary suspension of                                                        reform :
           4.5 X)
           EUR 11 : 98,802.551 t                                                         2X cut +of which
           (without Portugal)                                                            IX redistri-
                                                                                         bution
Shsepmeot  Maximum guaranteed      Esttmetsd 1991 flock: Estimated overrun of 9%         A proposal mads
           level for ewe flock     46,360,000 heed for   for EUR-11 and Northern         In the context
           63.400.000 head         EUR-11 and Northern   Irelond and 6% for Croat        of CAP reform:
           18.100.000 for Croat    Irelond and           Britain, reductlor-e In the    -Individual limit
           Britain and             19.775.000 for Croat  basic prices of 6.45% and 8.1%  per producer
           45.300,000 for EUR-11   Britain               respectively (with effect      -freeze If the
           and Northern Ireland                          from 7 jon 1991)                reduction In the
                                                                                         basic price, of
                                                                                         7%
 ---pagebreak---                                              - 68 -
                                             Table S
                   Trends In econoalc Indices froa 1980 to 1990 In real t e n s
                                           - EUR 12 -
                                    Index base on 1980 - 100
  Years    Expenditure       GNP      Final       Eapioyi.    Final agric. NVA        NVA
          EAGGF-Guarantee    total   agrlcult.    In agric.   output per       agric. per AMU
                                     output       In AlU      pers. eapi.
              (D(3)           (2)        (2)                      (2)           (1)      (1)
  1980       100.0           100.0     100.0       100.0         100.0          100.0  100.0
  1981        89.0           100.1      99.1         95.0        104.4           97.2  102.3
  1982        91.7           101.0     104.5         91.8        113.8          104.0  113.3
  1983       110.4           102.7     104.9         89.5        117.2           98.4   109.9
  1984       121.0           105.1     108.0         87.3        123.8           99.5   114.0
  1985       125.5           107.6     107.9         85.9        125.7           93.9   109.4
  1986       136.9           110.5     110.1         83.2        132.3           92.1   110.6
  1987       138.4           113.8     110.0         80.9        135.9           88.1   108.8
  1988       160.6           118.3     112.1         75.3        143.1           87.3   111.5
  1989       142.5           122.2     113.3         75.0        151.1           92.9   123.9
  1990       131.9           125.5     113.7         72.8        156.1           86.2   118.4
(1) In real teras (6NP deflator)
(2) In constant prices
(3) Budget "1987" : froa 1 January to 31 October 1987
    Budget "1988" : froa 1 Novenber 1987 to 15 October 1988
    Budget "1989" : froa 16 October 1988 to 15 October 1989
    Budget "1990" : froa 16 October 1989 to 15 October 1990
GNP : Gross National Product at aarket price
NVA : Net Value Added at factor cost
AWU : Annual Work Unit
Source : Eurostat - DG VI
 ---pagebreak---                               - 69 _                   Figure 1
      Net value added (1) per person employed in agriculture (2)
                                                    "1985" (3) = 100
130r
110
                                                                         o
 701
   80  81    82     83    84    85    86     87   88     89     90   91
                                                                         <
                                                                         >
                                                                         o
                                                                         Q
                                                                         UJ
                                                                         UJ
                                                                         O
      (1) At factor cost in real terms, adjusted on the basis of the 6DP
          deflator.
      (2) Based on the number of work units.
      (3) Average 1984, 1985, 1986.
      Source: EUR0STAT - sectoral income index
 ---pagebreak---                                               - 70 -
                     Net value added per person employed in agriculture
                                                                    "1985" = 100
130                              130                           130
                                          Danmark
110                              110                           110
      / / / / / f                      f/ / / / *
130                              130                           130
110                              110                           110
                                   70 1—,      ,   ,   ,   r
                                       / J / f / .*N                / / / / /f
130                              130                           130.
                                                                       Luxembourg
110                              110                           110-
  70               T   1  1 T
                   A
      /  /   /   /     /    /          /    /    /   /   /   /       /   /     /    /    /       /
 130-                             130                           130
        Nederiand
 110                              110                           110
                                         i—i—i—i—i—i—i—i—i—r
      /  /   /   /      /     /        /    /    /   /   /   /       /   /     /    /    /       /
                                                                           CEE DG VIA5 Jan.92 M.O.
 ---pagebreak---                                                                      ISSN 0254-1475
                                                             COM(92) 94/1 final
                                                      DOCUMENTS
EN                                                                              03
                                Catalogue number: CB-CO-92-126-EN-C
                                                             ISBN 92-77-42341-2
Office for Official Publications of the European Communities
L-2985 Luxembourg