REPORT on the proposal for a Council regulation amending Regulation (EC) No 1234/2007 establishing a common organisation of agricultural markets and on specific provisions for certain agricultural products (single CMO Regulation) as regards the national quotas for milk

    27.2.2008 - (COM(2007)0802 – C6‑0015/2008 – 2007/0281(CNS)) - *

    Committee on Agriculture and Rural Development
    Rapporteur: Elisabeth Jeggle

    Procedure : 2007/0281(CNS)
    Document stages in plenary
    Document selected :  
    A6-0046/2008

    DRAFT EUROPEAN PARLIAMENT LEGISLATIVE RESOLUTION

    on the proposal for a Council regulation amending Regulation (EC) No 1234/2007 establishing a common organisation of agricultural markets and on specific provisions for certain agricultural products (single CMO Regulation) as regards the national quotas for milk

    (COM(2007)0802 – C6‑0015/2008 – 2007/0281(CNS))

    (Consultation procedure)

    The European Parliament,

    –   having regard to the Commission proposal to the Council (COM(2007)0802),

    –   having regard to Article 37 of the EC Treaty, pursuant to which the Council consulted Parliament (C6‑0015/2008),

    –   having regard to Rule 51 of its Rules of Procedure,

    –   having regard to the report of the Committee on Agriculture and Rural Development (A6‑0046/2008),

    1.  Approves the Commission proposal as amended;

    2.  Calls on the Commission to alter its proposal accordingly, pursuant to Article 250(2) of the EC Treaty;

    3.  Calls on the Council to notify Parliament if it intends to depart from the text approved by Parliament;

    4.  Asks the Council to consult Parliament again if it intends to amend the Commission proposal substantially;

    5.  Instructs its President to forward its position to the Council and Commission.

    Text proposed by the CommissionAmendments by Parliament

    Amendment 1

    RECITAL 3

    (3) The Council requested that the Commission undertake a market outlook report when the 2003 reforms of the common market organisation in milk and milk products had been fully implemented with a view to assessing the appropriateness of allocating additional quotas.

    (3) The Council requested that the Commission undertake a market outlook report when the 2003 reforms of the common market organisation in milk and milk products had been fully implemented on the basis of which a decision will be taken.

    Justification

    Reference should be made to the wording of the original Council Declaration of June 2003.

    Amendment 2

    RECITAL 4

    (4) This report has been conducted and concluded the current situation of the Community and world markets and their projected situation in the period to 2014, warrant an additional increase in quota by 2% to facilitate the production of more milk within the Community to help satisfy emerging market requirements for dairy products.

    (4) This report has been conducted and concluded the current situation of the Community and world markets and their projected situation in the period to 2014 may warrant an additional increase in quota.

    Amendment 3

    RECITAL 4 A (new)

     

    (4a) There is an under-usage of the milk quota at EU level.

    Justification

    There exists EU-wide a situation of under-usage of milk quotas. The figures for the 2006/07 quota year show a net under-usage of 1.9 million tonnes at EU-level, with 18 out of 27 Member States producing below their national quotas. The European Commission is expecting for the current quota year 2007/08 an under-usage of 3 million tonnes, regardless of the relatively high milk prices.

    Amendment 4

    RECITAL 4 B (new)

    (4b) The European Parliament, in its resolution of Parliament of 25 October 2007 on rising feed and food prices1, called on the Commission, as a matter of urgency, to propose a temporary increase in milk quotas with a view to stabilising prices on the internal market.

    ___________

    1P6_TA(2007)0480

    Justification

    On that date Parliament adopted, by a large majority, a resolution on rising food prices in which it urged the Commission to adopt a series of measures, and concretely, in paragraph 6, to propose, as a matter of urgency, a temporary increase in the milk quotas.

    Amendment 5

    RECITAL 4 C (new)

     

    (4c) The European Parliament requested the Commission to set up a milk fund restructuring programme.

    Justification

    In the framework of the mini-milk package the Parliament requested the Commission to set up a milk fund restructuring programme in order to retain savings resulting from the implementation of the mini milk package for the milk sector. The rapporteur remarks that the milk sector is a sensitive sector and hence special measures are required to ensure sustainable milk production (across all regions of the EU). In addition, the milk sector is innovative and future-orientated with a high social aspect and demanding animal welfare and environmental standards.

    Amendment 6

    RECITAL 4 D (new)

    (4d) The current situation of the market in milk products in the EU offers prospects for growth to producers so wishing, given the shortfall of production in the face of an ever-growing demand.

    Justification

    The Commission has stated that the gap between production and consumption in the EU will require, at the least, a supplementary quantity of 8 m tonnes of milk between 2007 and 2014 if it is to be bridged.

    Amendment 7

    RECITAL 5

    (5) Therefore it is appropriate to increase all Member State quotas as shown in Annex IX of Regulation (EC) No 1234/2007 by 2% from 1 April 2008.

    (5) Therefore it is appropriate to allow Member States to increase their quotas as shown in Annex IX of Regulation (EC) No 1234/2007 by 2% above their current allocation on a voluntary basis from 1 April 2008, while acknowledging that not all Member States currently use their entire quota allocations and that some Member States will not use the quota increase.

    Amendment 8

    RECITAL 5 A (new)

    (5a) The increase in milk quotas from 1 April 2008 has no bearing on the outcome of the review of the market in milk and milk products carried out as part of the Health Check of the Common Agricultural Policy.

    Justification

    It should be made clear that the increase in quotas in April 2008 should not determine the changes to be made as part of the CAP Health Check.

    Amendment 9

    RECITAL 5 B (new)

    (5b) The increase in milk quotas for the quota year 2008/2009 does not currently endanger the stability of the EU milk market and does not undermine the role of quotas as a means of stabilising the milk market and ensuring the profitability of production.

    Amendment 10

    RECITAL 5 C (new)

    (5c) Producers’ behaviour should also be looked into, as there is a clear under-utilization of quotas in some European Union Member States.

    Justification

    The question of whether the under-utilization of quotas is the result of the decisions under the 2003 CAP reform to decouple direct payments should be looked at. It should also be ascertained whether this is a temporary or permanent phenomenon. In order to ensure long-term competitiveness, the matter of under-utilization also needs to be settled.

    Amendment 11

    RECITAL 5 D (new)

     

    (5d) There is a need to increase research into consumer behaviour with regard to the milk market as this market is very sensitive to changes. The Commission should take immediate action in order to increase research in this area.

    Justification

    The debate on the issue of an immediate increase in EU milk quotas in the 2008/09 milk quota year was set in mid 2006, when international dairy commodity prices were improving. The increases in the price of milk/milk products have had an immediate negative impact on consumer demand and show that the milk market is very sensitive to changes. The wish of consumers is crucial. Therefore there is a need for increasing research into consumer behaviour.

    Amendment 12

    RECITAL 6 A (new)

    (6a) Developments on the international market and on many EU markets in the last few weeks have pointed to a marked fall in prices on commodity exchanges, without there having been any increase in production. It is therefore advisable to calculate the medium-term effects of a 2% increase in quotas.

    Justification

    It seems that the increase in trade prices for milk and milk products has already led to their replacement by butter and milk powder and, therefore, to lower consumption, resulting in a fall in prices on commodity exchanges. The exhaustion of stocks within the EU and climate-related production shortfalls in other regions of the world, together with speculative behaviour by market operators, has led to an overheating of the market that cannot continue to the same extent.

    Amendment 13

    RECITAL 7 A (new)

    (7a) Milk production plays a vital role in generating income in disadvantaged regions of the European Union, as comparable alternatives in agricultural production often do not exist. The particular impact of these market measures with regard to adding value to and maintaining regionally sustainable and agriculturally necessary milk production should, therefore, be given special consideration.

    Justification

    An increase in milk production could lead to a fall in prices, the effects of which vary according to structure and region. Owing to higher production and collection costs, the effects in disadvantaged and mountainous regions, and for small milk producers, should be subject to particular analysis and given particular consideration in political decision-making.

    Amendment 14

    ARTICLE -1 (new)

    Article 78, paragraph 1 (Regulation (EC) No 1234/2007)

     

    Article -1

    In Regulation (EC) No 1234/2007, the following subparagraph is added to Article 78(1):

    ‘For the quota year 2008/09, a surplus levy shall be payable on milk and other milk products marketed in excess of the national quota, as established in accordance with Subsection II if, after EU-wide balancing out, a surplus still exists.’

    Amendment 15

    ARTICLE 1

    Point 1 of Annex IX to Regulation (EC) No 1234/2007 is replaced by the text in the Annex to this Regulation.

     

    Member State quotas are increased on a voluntary basis by 2% from 1 April 2008. Point 1 of Annex IX to Regulation (EC) No 1234/2007 shall be adjusted accordingly.

    Amendment 16

    ARTICLE 1 A (new)

     

    Article 1a

    Before 1 January 2009, the Commission shall submit a study on the economic, social and environmental impact of the increase in milk quotas, paying particular attention to mountainous regions and other regions with comparably difficult production conditions.

    Amendment 17

    Article 1 B (new)

     

    Article 1b

    Before 1 January 2009 the Commission shall submit a report on consumer behaviour with regard to the milk market and to the specific circumstances of milk production in disadvantaged regions

    Justification

    Milk production in mountainous regions and remote areas ensures the conservation of the landscape and plays an important part in the rural economy. However, production costs in these areas are often much higher than those in better-suited locations. Measures should therefore be developed to ensure the survival of these farms. As a first step, a study should be produced on the situation of farms in disadvantaged locations.

    EXPLANATORY STATEMENT

    Background

    Decisions effective under Agenda 2000 extended the milk quota regime until April 2008. In addition, Agenda 2000 provided for a 2.4% increase in the total EU reference quantities from 117.5 million tonnes to 120.3 million tonnes. This took the form of, on the one hand specific national increases for Italy, Spain, Greece, Republic of Ireland and Northern Ireland over a two year period from 2000/01 to 2001/02; and, on the other hand, a 1.5% linear increase in milk quotas over three years from 2005/06 to 2007/08 for all Member States not receiving specific quota increases.

    Under the Agenda 2000 agreement, the Council was committed to undertaking a mid-term review of the milk quota system in 2003. In its June 2003 compromise, the Council agreed that the existing milk quota regime should be extended further until 2014/15. In addition, the Council agreed that the Agenda 2000 quota increases would start in 2006/07, instead of 2005/06, and that there would be no further quota increases in 2007/08 or 2008/09, as had been proposed in Agenda 2000.

    A market report was to be presented once the reform had been fully implemented. However, for specific local reasons Greece was granted a quota increase of 120,000 tonnes and the Azores were granted a 50,000 tonnes increase from 2005/06 onwards (reduced from an additional 73,000 tonnes in 2003/04 and 61,500 tonnes in 2004/05).

    European Commission

    The Commissions' original proposal for the 2003 Reform included an increase in quota of 2 times 1% in addition to the increases already agreed in the framework of Agenda 2000. In the June 2003 compromise, the Council decided there would be no additional quota increase for 2007 and 2008 and asked for the Commission to present a market outlook report once the reform was fully implemented.

    The Market Outlook Report for the Dairy Sector which accompanies this proposal addresses the question of whether the market offers enough opportunities for additional quantities of milk to be supplied, without leading to increased public support in the short and/or medium term, if the national quotas were to be extended to all 27 Member States.

    The report concludes that both the EU and the world market outlooks are positive and the analysis made for a 2% increase in milk production in the EU shows that the market readily offers opportunities for these additional quantities. The Commission concludes that the 2% increase in dairy quotas, may be implemented as from the 2008/09 milk quota period (i.e. 2.85 million tonnes additional milk, to a total of 145.7 million tonnes).

    More generally, it is evident from statements made, that the European Commission favours the abolition of the milk quota regime after 2015. In legal terms, the milk quota system will expire in 2015 unless the Commission presents a proposal to extend it and this proposal gets the support of a qualified majority of Member States.

    PROCEDURE

    Title

    Amendment of the single CMO Regulation as regards the national quotas for milk

    References

    COM(2007)0802 – C6-0015/2008 – 2007/0281(CNS)

    Date of consulting Parliament

    10.1.2008

    Committee responsible

           Date announced in plenary

    AGRI

    17.1.2008

    Rapporteur(s)

           Date appointed

    Elisabeth Jeggle

    21.11.2007

     

     

    Discussed in committee

    29.1.2008

    26.2.2008

     

     

    Date adopted

    26.2.2008

     

     

     

    Result of final vote

    +:

    –:

    0:

    42

    0

    0

    Members present for the final vote

    Vincenzo Aita, Peter Baco, Bernadette Bourzai, Niels Busk, Luis Manuel Capoulas Santos, Giuseppe Castiglione, Giovanna Corda, Joseph Daul, Albert Deß, Gintaras Didžiokas, Michl Ebner, Carmen Fraga Estévez, Ioannis Gklavakis, Lutz Goepel, Bogdan Golik, Friedrich-Wilhelm Graefe zu Baringdorf, Esther Herranz García, Lily Jacobs, Elisabeth Jeggle, Heinz Kindermann, Stéphane Le Foll, Diamanto Manolakou, Véronique Mathieu, Mairead McGuinness, Rosa Miguélez Ramos, James Nicholson, Neil Parish, María Isabel Salinas García, Agnes Schierhuber, Czesław Adam Siekierski, Alyn Smith, Dimitar Stoyanov, Donato Tommaso Veraldi, Andrzej Tomasz Zapałowski

    Substitute(s) under Rule 178(2) present for the final vote

    Katerina Batzeli, Esther De Lange, Gábor Harangozó, Catherine Neris, Maria Petre, Zdzisław Zbigniew Podkański, Struan Stevenson, Kyösti Virrankoski

    Date tabled

    27.2.2008