AGRICULTURAL PRICES FOR THE 1977 TO 1978 SEASON

by Altiero Spinelli

SUMMARY: The Parliament considers the Commission's proposal to the Council on the fixing of agricultural prices (and related measures) for the 1977 to 1978 season, on the basis of a report prepared by the Committee on Agriculture. In "Speeches in European Parliament, 1976-1986", Pier Virgilio Dastoli Editor. (EP, 22 March 1977)

The Commission's proposal to increase the prices of agricultural products by 3% appears to be a sound one. So, I think, is the proposal to refrain from increasing the price of milk during the first few months, and then not to increase it beyond 3 %. Equally praiseworthy are the Commission's efforts in the matter of compensatory amounts.

That said, I would add that I do not think these proposals present any really novel feature. While recognizing in particular the worthiness of Commissioner Gundelach, I recollect - having myself engaged in this work for six years - that year after year, as winter came to an end, the Commission would break out in a cold sweat as it tried to propose prices that were both more reasonable and as low as possible, with a view to restraining the monster of compensatory amounts. I do not think, however, that the ritual has in any way changed this year. Parliament asks for an increase, COPA steps up the price, and in the end the Agricultural Council, the bastion of every farming interest in each country, sets out, in marathon debates extending into the small hours, to fix prices somewhat similar to those asked for by the farmers themselves. All that the poor Commission can look back on is the merit of having put forward a reasonable proposal which was doomed to failure. I fear that the same risk is being run this yea

r, and the main criticism to be levelled at the Commission is that it did not arrange to study and propose a different decision-making procedure, a fresh definition of the instruments.

A common price, as Lord Bruce remarked, is one of the conditions for the functioning of the agricultural market and an objective we cannot brush aside. But it does not mean leaving it to the representatives of agricultural producers to define prices.

Adam Smith, in the early pages of his treatise on political economy, says that whenever a number of producers get together, they always end up by discussing how to obtain the highest prices for their products.

The degree of independence and self-sufficiency required should be established, for there is no doubt that some degree of self-sufficiency is needed; the amount of products lying idle should also be determined, so as to prevent them from being used to absorb every faulty decision. We have, however, turned down an unreasonable request from the developing countries for something which we, no less unreasonably, grant to our agricultural producers, Now, if we really have no doubts about the anomalioes inherent in the current practice, we could lay down a number of general rules, among them the automatic management of prices of idle products, with the option of adjusting them so as to bring into being a balanced market free from abnormality.

Another mistake was maintaining compensatory amounts and the 'green' units of account for so many years, despite the fact that they ought to have been regarded as temporary expedients applicable to a single production year. This system is clearly a boon to those who need it least, and a burden on those who End it hardest to bear.

Rather than being earmarked for the guarantee policy, these funds could be more usefully employed for a guidance policy, thus saving the resources that are being squandered today. Such a guidance policy should, of course, be radically reviewed, for in its present form it is utterly misconceived. There exists a Commission study which clearly shows that the guidance policy, as at present pursued, is based on false criteria. This problem should therefore be tackled on the basis of a reasonable price policy. Even if the Commission's initial proposals are sound, the current policy remains irrational.

For these reasons I do not feel that I can support a motion for a resolution which proposes more than does the Commission itself.