Fruh, I.

Archive of European Integration

6 July 1976 ., ·~ ... "' ~ I\ I .~ ~ /, J.' / ~nglish Edition \ European Communities EUROPEAN PARLIAMENT (1 ((~ ' j_; ·7 Working Documents 1976 -1977 DOCUMEN'D 221/76 / Report drawn up on behalf of the Conunittee on Agriculture on the proposal from the Commission of the European Comimlnities to the Council (Doc. 182/76) for a ~egulation laying down, in respect of hops, the amount of the aid to producers for the 1975 harvest Rapporteur: Mr I. FRUH PE 45.190/fin. 1) By letter of 21 June 1976 the President of the Council of the European communities requested the European Parliament, pursuant to Article 43 of the EEC Treaty to deliver an opinlon on the proposal from the Commission of the European Communities to the Council for a regulation laying down, in respect of hops, the amount of the aid to producers for the 1975 harvest. The President of the European Parliament referred this proposal to the Committee on Agriculture as the committee responsible and to the Committee on Budgets for its opinion. On 5 July 1976 the Committee on Agriculture appointed Mr FrUh rapporteur. It considered this proposal at its meeting of 6 July 1976 and adopted the motion for a resolution by 12 votes to 1 with 2 abstentions. Present: Mr Houdet, chairman; Mr Laban and Mr Liogier, vice-chairmen; Mr FrUh, rapporteur; Mr Beano, Mr Br~g~gere, Mr Frehsee, Mr Haase, Mr Howell, Mr Hughes, Mrs Kellet-Bowman (deputizing for Mr Scott-Hopkins), Mr Kofoed, Mr de Koning, Mr Suck and Lord Walston. The opinion of the Committee 9n Budgets will be given orally. - 3 - PE 45.190/fin. C O N T E N T S A. MOTION FOR A RESOLUTION 5 B. EXPLANATORY STATEMENT 6 - 4 - PE 45.190/fin. ,. A 'l'he Committee on Agrieulture hereby submita to the European Parliament the following motion for a rfl~olution, together with explanatory stateaent z MOTION FOR A RESOLUTION embodying the opinion of the European P~~liament on the proposal from the Commission of the European. Connunities to the Council for a regulation laying down, in respect of hops, the amount of the aid to producers £or the 1975 harvest '!'he European Parliament, - having regard to the proposal !rom the Coll!ltission of the European Communities to the Counci 11 , ,. .:-:-.~; . ·<1 ' - having been consulted by the Council pursuant to Article 43 l of the EEC Treaty (Doc. 182/76), - having regard to the report of the Coilll'littee on Agriculture and the opinion of the Committee on Budgets (Doc. 221/76 ), approves the Commission's proposal. OJ No. C 149, 1.7.1976, p.2 - 5 - PE 45.190 /fin. B EXPLANATORY STATEMENT 1. Regulation No 1696/71 provides that every year before the end of April the Commission shall submit a report on the situation in regard to price trends, developments in hop gardens, production and requirements. If necessary a decision is taken before the end of June on the amount of aid to be granted per hectare for the previous year's harvest. Although it was once again impossible this year to meet the prescribed deadlines, it should be qoted that the report and the proposal for a regulation were submitted to Parliament by the Council on 25 Junn, whereas last year they were not received until mid-August. 2. The purpose of the aid is to help ensure that hop growers earn a fair income. Generally speaking growers should be able to obtain their income from the sale of their products. This is possible only if the balance between supply and demand on the hop market is such as to ensure reasonable prices. A long-term disruption of the market or the production of varieties of hops for which there is no longer a demand from the breweries inevitably resultsin a decline in revenue. 3. It is clear from the figures provided by the Commission that the trend towards surplus production first noted in 1972, coupled with an accumulation of reserve stocks on the world and Community markets, has been intensified. A detailed analysis of the position reveals two main causes : a decline for technical reasons in the rate of increase of demand, combined with reconversion to varieties rich in alpha acids, and a rise in production in recent years with growers failing to adjust early enough to the altered situation. In previous years, therefore, aid has already been granted to hop growers to make up for the substantial drop in their incomes caused by falling prices. 4. A rational policy for the hop market should be aimed at adapting production to the market in such a way that the producer can earn a fair income from his harvest as far as possible without aid. Present production structures, changes in demand, and increased stocks mean that this is not the case at the moment. Policy must therefore be to provide additional incentives to ensure, as soon as possible, a fair income for the hop grower and - 6 - PE 45.190/fin. a regular supply for the consumer of the products he requires. There are three possible ways of achieving this By amending the basic regulation1it should be possible to ensure in the medium term that supply and demand are brought into line by adjusting production potential to market requirements. In the short term measures should be taken which would have a direct effect on hop supplies from the current year's harvest 2 The amount of aid must be such that it effectively compensates for the reduction in the producer's income without further stimulating production. 5. The European Parliament has already delivered an opinion on the first suggestion3 The second is dealt with in a separate report and the third is the subject of the present report. The Conunission's report indicates that the revenue from the 1975 harvest is once again lower than the previous year's revenue. Taking into account the considerable rise in production costs in this period and the above-average inflation rate, it will be seen that the loss of income has been substantial. Finally,attention should be drawn to the measures taken by the producers' associations to stabilize the market. in the Community's main production area with the help of Community aid, which were to some extent successful in stabilizing prices, but could not be applied to hops - approximately 80% of total production -sold under forward contract. For the majority of varieties grown in the Community, the amount of aid proposed by the Commission will, broadly speaking, bring the average revenue up to the same level as the previous year. Aid will, furthermore, be limited for each variety to an amount ccrresponding to the areas unaer that variety in 1974; new plantings will not. therefore, qualify for aid. 1 See Commission proposal (Doc. 562/75) and report by Mr FROH (Doc. 156/76) on behalf of the Conunittee on Agriculture. 2 See COM(76) 265 final - proposal for a regulation laying down special measureA for stabilizing the market in hops and draft report by Mr FROH (PE 45.190) 3 See report by Mr FRUH (Doc. 156/76) on behalf of, the Committee on Agriculture and resolution adopted on 18.6.1976. - 7 - PE 45.190 /fin. 6. In view of the foregoing remarks, it might be questioned whether the amount of aid proposed will be sufficient to ensure a fair income for hop growers. However, since the basic regulation stipulates that the aid must take account of market trends and their effect on the future income of hop growers, this year's aid should go a long way to meeting this dual objective. At the same time the Conunission should give careful consideration to the possibility of making minor adjustments in the case of specific varieties to avoid discriminating against certain groups of hop growers. 7. Subject to the above conunents, the Committee on Agriculture recommends that Parliament should approve the Commission's proposal. - 8 - PE 45.190/fin. 

Report

drawn up on behalf of the Committee on Agriculture

on the proposal from the Commission of the European

Communities to the Council (Doc. 182/76) for a

regulation laying down, in respect of hops, the amount

of the aid to producers for the 1975 harvest. EP Working Documents, document 221/76, 6 July 1976

16 June 1977 /. J. ) English Edition European Communities J.(4~. 47 EURO PEAN PARLIAMENT Working Documents 1977 - 1978 DOCUMENT 164/77 REPORT drawn up on behalf of the Committee on Agriculture on the proposal from the Commission of the European Communities to the Council (Doc. 160/77) for a regulation;{,aying down, in respect of hops, the amount of aid to producers for the 1976 harvest Rapporteur: Mr I. FRUH ( ' PE 49. 223/fin. By letter of 9 June 1977 the President of the Council of the European Communities requested the European Parliament, pursuant to Article 43 of the EEC Treaty, to deliver an opinion on the proposal from the Commission of the European Communities to the Council for a regulation laying down, in respect of hops, the amount of aid to producers for the 1976 harvest. The President of the European Parliament referred this proposal to the Committee on A3riculture as the committee respdnsible and to the Committee on Budgets for its opinion. The Committee on Agriculture appointed Mr FrUh rapporteur. At its meeting of 13 June 1977 the committee considered this proposal and adopted the motion for a resolution by 12 votes to nil with 2 abstentions. Present: Mr Houdet, chairman: Mr Laban, vice-chairman, Mr FrUh, rapporteur: Mr ~.lbertini, Mr Br&g~ere, Mr Cifarelli, Mr Durand, Mr F. Hansen, Nr Hughes, Mr Klinker, Mr Kofoed, Mr De Koning, Mr Lemp and Mr Martens. - 3 - PE 49. 223/fin. CONTENTS A. MOTION FOR A RESOLUTION •...••.•..•...•• B. EXPLANATORY STATEMENT •...•..•.•.•..•.... 4 Page 5 6 PE 49.223/fin. A The Committee on l\.griC'ull:urc licrcl>y submits lo the Europeun Parliament the following motion for a resolution together with explanatory statement: MOTION FOR A RESOLUTION embodying the opinion of the European Parliament on the proposal from the Commissio':1 of the European Communities to the Council for a regulation laying down, in respect of hops, the amount of the aid to producers for the 1976 harvest The European Parliament, - having regard to the proposal from the Commission of the European Communities to the Council (COM(77) 214 final), - having been consulted by the Council pursuant to Article 43 of the EEC Treaty (Doc. 160/77). - having regard to the report of the Committee on Agriculture (Doc. 164/77), 1. Approves the Commission's proposal; 2. Requests the Commission to arrange for the necessary steps to be taken to bring abou-::, by means of an agreement with other producing areas in third countries, the adaptation of production to the market situation. 5 PE 49. 223/fin. B EXPLANA'l'l~kY STATEMENT 1. Regulation No. 1696/71 stipuluL~~ thnt each year before the end of April the Commission must submit a r~port on price trends and developments in hop gardens, prodLCtion and requirements. The amount of aid per hectare for thn pruvi,,us year's harvest must, if necessary, be fixed before the end of ,June each year. Evfln though this year, once again, the pre-scribed time-limit was not fully adhered to, it should be noted that the report and the proposal for a regulation were forwarded to Parliament by the Council in early June. 2. The purpose of the aid is to enable hop producers to achieve a fair income. Generally speaking, growers should be able to obtain their income from the sale of their products. However, this is possible only if the interplay of supply and demand on tho hop market yields reasonable prices. Any lonq-term disruption of market equilibrium or the production of varieties which are no longer in step with the changed requirements of the breweries will inevitably result in a decline in revenue. 3. It is clear from the data compiled by the Commission that the trend towards a surplus production, first noted in 1972, coupled with an accumulation of reserve stocks on the world market and, to a certain extent, on the Community inarket as wel,l has more or less persisted. This is chiefly attributable to the following causes: The sharp increase in the areas under hops from 1970 to 1973, encouraged by good prices in 1971 and 1972, caused production to outstrip demand; The increased conversion to varieties rich in alpha acids has meant an increase in supply in terms of bitter content and a corresponding decrease in demand; A decline, due to technical and consumer factors, in the quantity of hops required to produce a unit of beer. 4. Nevertheless, last year's drought produced a smaller harvest in the hop-growing regions of the Community with the result that stocks within the Community have attained a relatively normal level. It still proved impossible, however, to achieve satisfactory prices last year in the face of rising production costs in the Community; and, in the light of this, the Commission proposes that this year again aid be granted on a per hectare basis for 20 varieties comprising approximately 90 % of total - 7 - PE 49.223/fin. hop acreage in order to guarantee a fair income for producers. 5. What is the reason for the relatively weak price situation with regard to hops? A characteristic feature of t h0 hop market j s the considerable volume of international Lrad1•. J\pproxi1no11,.(y 40 ','I.. of Communily hop production jg m<portor'l, while l'·, ';(, of llw l'onun111111y 1 !i own ,:01\/Hm1ptjon isimportotl. Jn contr,1l'll. t<J ll•o , ., 1.., t iv,• I y nl.1ti1.,, M11rply 11ml tfoinirnd ~1 L L,i.,tlon l n t lw Buropean produci.nu 'lrL'·l!:l, lhr.1 Uni.led Stat(~fl, one oL l.lw lar.gEJ&it hoµ producers iu the world, has fJ11bst~,nlic1l stocko at its disposal. These surplus stocks not only force down prices on the world market but also have a far-reaching influence on the price of hops traded in the Community. 6. An objective assessment of the position leads to the conclusion that the supply and demand situation is structurally defective. Only fluctua-tions in supplies caused by climatic conditions are occasionally able to bring about a certain degree of equilibrium. In conformity with the opinion adopted by the European Parliament on 17 December 19761 , the Council adopted on 26 April 1~77 an amendment to the basic regulation providing, inter alia, for the stepping up of structural measures and, in particular, for a ban on extending the areas planted for the next two years. Furthermore, in accordance with the provi siorrn of the basic regulation, the Commission has proposed that areas newly planted in 1976 should not qualify for Community aid, in order to discourage any increase in areas planted. 7. Given that the objective of a balanced policy for the hop market must be to adapt production t0 market demand in such a way as to ensure that the producer can as far as possible derive his income from the harvest without aid from an external source, the measures introduced by the amendment to the basic regulation afford the prospect,at least as far as the Community is concerned, of prosress being made towards solving this problem within a reasonable period. There still remains, however, the question of reaching agreement with the other pro~ucing areas in the world, particularly the United States of America, and your committee takes the view that this ought to be treated as a matter of urgency, if the self-restraint of Community producers is not to be partly invalidated by a lack of discipline outside the Community. 1 See Parliament's resolution OJ No. C 6, 10.1.1977 - 8 - PE 49.223/fin. 8. Your committee takes the view that the effects of the poor harvest in 1976 and the erneavour to achieve a better adaptation of production to the trend of demand justify the proposal made by the Commission for aid on a per hectare basis. The Committee therefore recommends that Parliament approve the proposal for a regulation. - 9 - PE 49.223/fin. 

REPORT

drawn up on behalf of the Committee on

Agriculture

on the proposal from the Commission of the

European Communities to the Council (Doc. 160/77)

for a regulation laying down, in respect of hops,

the amount of aid to producers for the 1976

harvest. EP Working Documents 1977-78, Document 164/77, 16 June 1977

http://aei.pitt.edu/96506/1/1977%2D78.77.164.pdf

REPORT
drawn up on behalf of the Committee on
Agriculture
on the proposal from the Commission of the
European Communities to the Council (Doc. 160/77)
for a regulation laying down, in respect of hops,
the amount of aid to producers for the 1976
harvest. EP Working Documents 1977-78, Document 164/77, 16 June 1977

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