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deal with the problems of short–
ages.
Coming to the more specific
criticisms, it is true that the Com–
munity has record stocks of butter
and skimmed milk powder at the
moment, by which 1 mean publicly
purchased stocks. We also have
very high stocks of be.ef. But apart
from that the stocks are not un–
manageable.
1 should add that the United
States has also got very large
stocks of butter, cheese and
skimmed milk powder and for very
much the same reason. We have
both provided our producers with
guaranteed prices and unlimited
public purchasing of all surpluses
at those prices. The result is that
we have both got a butter moun–
tain and skimmed milk powder
mountain, and as a matter of fact
the Americans have got a cheese
mountain as well.
We are both seeking in our own
interests a way out of this. The
American way is basically to hold
down the price and to pay people
to get out of mi lk production. We
are rather skeptical that paying
people to get out of production, if
you don't actually forbid the
others to go on producing more
and more, will work. We tried that
in the '70s and in our case it didn't
work.
We are now examining the pos–
sibility of a quota system. Jt
wouldn't pay anyone anything to
get out of milk production. We
would go on offering them a rea–
sonable, guaranteed price, but we
would impose a prohibitive levy of
75 percent of the current market
price on all production over a ceil–
ing.
So we are imposing, or planning
to impose, a severe cut on the
amount of milk that our farmers
are allowed to produce. This is
extremely unpopular politically.
lt's going to be extremely difficult
to get unanimous agreement in the
council, but we think it's the only
possible solution to our d ifficul–
ties.
And if it goes through then we
will be able to dispose of our exist–
ing butter and skimmed milk
powder mountains over the course
of the next year or two- at a cer–
tain cost it's true- by means of
8
special disposal schemes: for food
aid, for sale to certain categories of
the population, and in fact by sell–
ing it cheap to whoever will buy
it.
With regard to beef, the main
problem is that the economic
recession has led to a falling con–
sumption. We .are proposing vari–
ous countermeasures.
What is fundamentally wrong
with the agr icultura! po licy from a
point of view of the Communit y as
a whole?
What is fundamentally wrong–
and this has been said by numer–
ous people in the Community and
by the Commission in particular
for the last four or five years-is
that we have tended to give an
unlimited price guarantee for
unlimited volume of production
irrespective of the capacity of the
market to absorb that production.
The justification for our policy has
always been partly to ensure food
security.
You should remember that for
most 9f this century Western
Europe has been unable to feed
itself, and in the lifetime of those
people now in power, food short–
ages have been the number one
political problem. Even now Eu–
rope is still only 90 percent self–
sufficient whereas the United
States is considerably more than
l 00 percent self-sufficient.
Maintaining food security and
raising the leve! of self-sufficiency
is, with the possible exception of
the United Kingdom, a widely
shared aim of agricultura! policy in
Western Europe.
We have always justified our
policy by the enormous social
importance of the farming commu–
nity tbat in Europe is character–
ized by the very large number of
small family farms. To give you
one example, there are as many
farmers in Italy as there are in the
United States, though Italy pro–
duces probably a 1Oth of the agri–
cultura! production in the United
S tates.
Therefore you have got a real
social problem which cannot be
solved overnight, even in five or 10
years. We have, as a matter of fact,
reduced our farro population by 50
percent in the last 20 years. But we
still have twice as many people on
the land in the European Commu–
nity as there are in the United
States for a roughly equivalent vol–
ume of production . And so there is
a very strong social motive to our
agricultura! policy.
But this having been said, every–
one is agreed, now that the Com–
munity has become a net exporter
of cereals, meat, dairy products and
wine, that we cannot go on provid–
ing an open-ended price guarantee
for unlimited quantities of produc–
tion irrespective of the capacity of
the market to absorb that produc–
tion.
I'm repeating myself, but this is
partly because the Commission has
in fact repeated itself severa! times
in the last few years, because it is
extremely difficult to get member
states and the farming organiza–
tions to give up what they have
come to consider as their rights.
We implemented quotas for sugar
severa! years ago and we are cur–
rently discussing, as 1 explained,
the implementation of a quota sys–
tem for milk.
For other crops, particularly cer–
eal and oil seeds, we have intro–
duced what we've called a system
of guaranteed thresholds. We fix a
volume of production that we think
reasonable; if production continues
to rise above that leve!, we reduce
the guaranteed price accordingly.
There are also sorne other prod–
ucts for which we use a kind of
deficiency payment system. For
processed fruit we are engaged in
putting a limit on the volume of
support. In sorne sectors such as
beef we are hesitating about what
to do, but we have now established
the general principie that price
guarantees cannot be open-ended.
lt has been said by The Econo–
mist
that EEC farm prices are t wice
that o f world market prices. Such
guaranteed prices have caused
British farmers to put marginally
productive land into cultivation to
the ecological harm of the British
count ryside. Could you comment
on this phenomenon?
The gap between EEC-guaran–
teed prices and world prices is
often quite considerable.
.lt
has
been over 100 percent, but normai-
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