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C 60/56 EN Official Journal of the European Communities 25. 2.


The proposal, the Commissioner said, would be motivated by the problem of the principle of over-compensation
in the cereals sector rather than by the need to cover expenditure in the other farm sectors.

In view of the above, will the Commission say:

1. how this statement can be reconciled with the content of the proposal on farm prices itself, in which the
Commission insists that the proposal to reduce compensatory payments for cereals will be adopted to ensure
that the 1998 budget is balanced (see Volume I, page 12 of the report) and maintains that this is an integral
part of the current prices package?

2. Whether it condemns the ease with which Commissioner Fischler has contradicted what he said when he
publicly presented and explained the prices package to the European Parliament as recently as 5 March

3. Whether any new factors have emerged and, if so, what they are, as a result of which the cut in compensatory
payments is no longer essential in order to meet the 1998 budget constraints?

4. Whether it agrees that the possible problem of the principle of over-compensation for cereals, mentioned by
Commissioner Fischler, should be tackled with measures to reform the present organization of the market,
which would be much more lasting and more targeted than a simple linear, non-differentiated cut?

Joint answer
to Written Questions E-1845/97 and E-1933/97
given by Mr Fischler on behalf of the Commission

(15 July 1997)

The budgetary authority had decided in 1996 to maintain the 1997 appropriations for the European Agricultural
Guidance and Guarantee Fund (EAGGF), Guarantee Section, at their 1996 level, thus committing itself to
adopting, during performance of the budget, a supplementary and amending budget if the budget provision
proved likely to be exceeded during the course of the year.

It should be noted that the EAGGF Guarantee Section appropriations are estimated appropriations based on
economic forecasts made up to 18 months before performance of the corresponding expenditure. The monitoring
of agricultural expenditure for the 1997 financial year (the early warning system) indicates that from June on
there will be an under-utilisation of about ECU 1.3 billion in relation to the 1997 budget appropriations, thus
showing that there is no risk of exceeding the initial appropriations. This under-utilisation is particularly due to
the good performance of certain markets (cereals, sugar, sheepmeat), a slowing-down in expenditure in the beef
and veal sector and the imposition of the additional milk levy on producers who exceeded their allotted quota.

Agricultural producers did not therefore suffer any loss of income owing to the ECU 1 billion reduction in
appropriations by the budgetary authority.

On the contrary, that reduction made it possible to reduce the need to use own resources by an equivalent amount
and thus helped to meet the objective of limiting the budget deficit to 3% in Member States in 1997, since they
did not have to mobilise unnecessarily one billion ecu that year.

For the 1998 financial year, the Commission has presented to the budgetary authority a preliminary draft budget
which, with regard to the Guarantee Section, respects the objective of 0.50% growth in relation to the 1997
budget appropriations, while covering, as in the past, the entire budgetary requirements of the agricultural sector.

The Commission, in its proposal for agricultural product prices for the 1997/1998 marketing year, presented to
the Council a proposal to reduce the compensatory payments in the arable crops sector from the 1997/98
marketing year on by ECU 1 353 million overall, representing an average drop of 6%.

This proposal, which the preliminary draft budget had already taken into account and which had already been
forwarded to the Council and to Parliament in July 1996 before being included in the prices package, was brought
forward in order to finance additional expenditure in the beef and veal sector following the BSE crisis, within the
difficult budgetary framework anticipated for 1998.
25. 2. 98 EN Official Journal of the European Communities C 60/57

However, the proposal also fits into the general economic context of the sector. The Commission notes that the
compensatory payments had been adopted in 1992, as compensation for a drop in cereal prices on the assumption
that they would mirror the planned decrease in institutional prices. In fact, the decrease was only partial, because
the cereal sector had been experiencing high prices, on both the world and internal markets, for several years. As
a result, the compensation to producers was for only a partial decrease in prices.

The Commission notes its intention, as described in its 1997 programme, to present, after the conclusions of the
intergovernmental conference, a communication on the financial framework of the Community from the year
2000, accompanied by a very thorough reflection on the future of Community policies, more particularly the
common agricultural policy and structural policies.

It is for this purpose that the Commission published on 22 April 1997 a working paper on the long-term prospects
for the cereal, milk and beef and veal markets.

It should be stressed that the proposed reduction in no way foreshadows a possible reform of the arable crops
sector − its aim is to correct the obvious over-compensation in the sector. With regard to the Phare and Meda
programmes, the budgetary authority has respected the commitments entered into with regard to the countries
concerned at the Cannes European Council in June 1995.

(98/C 60/87) WRITTEN QUESTION E-1848/97

by Daniela Raschhofer (NI) to the Commission
(30 May 1997)

Subject: Market organization for olive oil

Why are their irregularities with the appropriations provided for the market organization for olive oil?

What is the natures of these irregularities?

What are the reasons for the increase in these irregularities?

How does the Commission intend to prevent them in the future?

What is the extent of the damage suffered hitherto?

What countries are affected?

What penalties can the Commission impose?

What penalties have been imposed?

What data are available on these points 1996?

Answer given by Mrs Gradin on behalf of the Commission

(14 July 1997)

As regards cases of irregularities and fraud involving olive oil (second, fifth, sixth and ninth points raised), the
Commission would refer the Honourable Member to its answer to written question E-1059/97 by Mr Cabezón
Alonso (1). In addition, the Commission is sending direct to the Honourable Member and to Parliament's
Secretariat general a table containing cases of fraud communicated by the Member States in 1996.

Concerning weaknesses of the current legal framework and actions to prevent fraud in the future (points one,
three and four), the Commission would take the view, as indicated in its note to the Council and the
Parliament (2), that measures have to be adopted to counter irregularities in the framework of the common market
organisation. The matter has been referred to the Parliament for its advice and when this is received, the
Commission will be in a position to table its proposals.