91997E1178

WRITTEN QUESTION E-1178/97 by Gastone Parigi (NI) to the Commission (3 April 1997)

Subject: Farm prices 1997/1998

The Commission's proposals regarding intervention for the 1997/98 marketing year provide for a reduction of Lire 4000 billion, a large percentage of which (Lire 2700 billion) concerns arable land. The planned reductions are for cereals (- 7.3%), oilseeds (- 4.2%) and land for set-aside (- 27%).

The government's tax policies, price trends and their impact on production costs, and the 7% increase in the structural, social and regional funds - which in itself will take up the overall increase of 3% in agricultural spending - mean that the situation of Italian farmers will deteriorate sharply.

Since it was agreed that the reform of the CAP would take effect only after 1999, will the Commission maintain agricultural intervention at current levels for the 1997/98 marketing year?

Answer given by Mr Fischler on behalf of the Commission (6 June 1997)

On 5 March 1997 the Commission adopted a proposal on farm prices for the marketing year 1997/98 ((COM(97) 89. )), the general thrust of which is that there should be no innovation pending reform of several sectors of the CAP. The Member of the Commission with special responsibility for agriculture presented this proposal to a special meeting of Comagri in Strasbourg on 12 March.

In making this proposal, the Commission drew attention to the budgetary situation in 1998, and in particular to the fact that the aim of limiting the budget increase to 3% could be achieved only by maintaining agricultural expenditure at more or less its present level. To manage that, in view of the likely trend of expenditure in certain sectors such as beef and veal, the Commission recalled its proposal in the previous year, when it advocated a reduction in aid for arable crops as a solution to financing the crisis in the livestock sector ((COM(96) 422. )).

This solution was not adopted by the Council, if only because Parliament had not given its opinion, but in its October 1996 conclusions the Council indicated that it would consider it when establishing the 1998 budget.

Knowledge of the 1998 budget currently available suggests that the status quo proposed for the farm prices for 1997/98 respects the budgetary equilibrium, assuming that the reduction in aid for arable crops is adopted. This proposal has accordingly been maintained.