Committee Reports > List of Committees > Joint > 1981 > Committee on the Secondary Legislation of the European Communities > Report No. 85 - Marketing of Fishery Products

REPORT

Introduction

1. The Joint Committee has considered the Commission proposal for a Council Regulation on the common organisation of the market in fishery products [Document 11392/80 of 19th November, 1980 — COM(80) 724 final]. A detailed examination of the proposal was carried out for the Joint Committee by its Sub-Committee on Agricultural and Fishery Matters under the Chairmanship of Deputy Joe Walsh. The Sub-Committee considered a memorandum prepared by the Department of Fisheries and Forestry and also memoranda received from the Irish Fishermen’s Organisation Ltd. and the Irish Fish Processors and Exporters Association. The Joint Committee is indebted to Deputy Walsh and his Sub-Committee for their work.

2. The Joint Committee in its Seventy-Seventh Report (Prl. 9313) adopted in June, 1980 dealt with many aspects of the common fisheries policy e.g. total allowable catches, Member State’s portion of this catch, access to inshore waters, structural measures and conservation and scientific research. Protracted negotiations have been continuing at Council level on these measures. The Committee in that Report also expressed the view that it was incumbent on the Commission and the national authorities to give immediate attention to the question of the fisheries marketing policy.

3. In September, 1980 the Commission issued a Communication to the Council concerning guidelines (9917/80) for the review of the common organisation of the market in fishery products. This Communication identified the main factors causing current marketing problems and advanced guidelines concerning (a) strengthening the role of fishermens’ organisations and granting them increased financial aid, (b) greater flexibility in the rules governing the prices and intervention system and (c) a more protective import regime and stricter basing of reference prices and of tariff concessions concerning trade with non-member countries. A proposal for a Council Regulation (11392/80) based on those guidelines was brought forward by the Council at the Fisheries Council meeting held on 15/16th December, 1980.

4. The common organisation of the market in fishery products was established on 1st January, 1971 on the basis of Regulation 2142/70. In 1976 this Regulation was consolidated by Regulation 100/76. The present proposal which would replace that Regulation takes account of market developments and the changes which have occurred in fisheries in recent years following the general introduction of 200-mile fishing zones.

Background and Scope of Proposal

5.The three main features of the proposal are as follows:—

(i) Producers’ Organisations

There is provision for increased aid for setting up producers’ organisations within five years from the entry into force of the Regulation and for strengthening the production and marketing rules which can be imposed on fishermen, who are not members but who would have certain safeguards under this proposal, to prevent them from impeding the organisations’ efforts to regularise markets. These organisations (intervention agencies in the fish sector formed by fishermen on a voluntary basis) have been assigned a central role in the day-to-day running of the markets but have not in the past always been able to play this role properly, either because of a level of membership which was too low, or because the provisions governing their intervention in the market were too rigid. Compulsory membership is not envisaged but the financial incentive to join is being improved. Secondly, there is scope to allow a producers’ organisation, which is considered to be representative in a given area or port, to extend its price and production rules to other fishermen landing within the same area or port. Lastly, the producers’ organisations are being permitted to modulate their intervention in the market in the light of the market situation prevailing at the time. This will enable them to serve their members’ interests better than in the past and to induce more producers to join.

(ii) Prices and Intervention

Under current rules guide prices are fixed on a mathematical basis e.g. on the average market prices recorded during the last preceding three years. It is proposed [Article 10] that in future account will be taken not only of the mathematical criterion applied in the past but also criteria such as production and demand prospects, and the need to support producers’ incomes while taking into consideration consumer interests. Adjustments are being made to the list of designated species for which guide prices are set, as well as to the list of species for which a private storage premium may be granted, which would be available only at times of relative market weakness. Guide prices, which are fixed by the Council for the whole Community, form the basis for calculating (a) the Community withdrawal prices below which fish may be withdrawn from the human consumption market, with financial compensation, and (b) reference prices in relation to which import prices are monitored. The proposal fixes the Community withdrawal price between 70 per cent and 90 per cent of the guide price [Article 12]. The producers’ organisations are authorised to apply a withdrawal price which is within a 10 per cent bracket of the Community withdrawal price [Article 13(1)]. This should introduce more flexibility into the system. Producers are also encouraged to adjust supply to actual demand by means of a decreasing system of financial compensation related to the quantities withdrawn from the market with no compensation in cases of abnormally high withdrawal i.e. where the quantities withdrawn exceed 20 per cent of the annual quantities sold [Article 13(3)]. Also there is provision for a premium to be granted for quantities of withdrawn fish which are processed and subject to limitation of 15 per cent of the annual quantity of the product sold [Article 14]. This provision is designed to prevent the undesirable destruction of fish withdrawn from the market.

(iii) Trade with Non-Member Countries and Import Arrangements

The aims of the proposals in this area are to ensure regular market supplies and to guarantee adequate protection against imports at abnormally low prices which are likely to disturb Community markets. The Commission accepts that the present import arrangements are no longer satisfactory. Regulation 100/76 provides reference prices for imports below which imports may be suspended to prevent market disturbances. The Commission state that such suspensions are too abrupt and do not take sufficient account of the need of the market for regular supplies, particularly of products for the processing industry. At the same time the conditions for suspension are such that suspension cannot be implemented in practice until the market has already been disturbed. Moreover, where the suspension of imports is not applied or is applied late, imports from non-member countries are given preference as regards sales on Community markets, to the disadvantage of Community producers, who cannot sell their products at less than the withdrawal price. The reference price should be the same as the Community withdrawal price but they have started to diverge in recent years and this has caused difficulties. More flexible import arrangements featuring several stages of protection are therefore being provided for, which will be implemented in accordance with pre-established criteria and before market disturbance occurs. The proposed Regulation amends the manner in which reference prices for imports are set so that protective measures can be applied progressively according to the risks of disturbance of the Community market. The range of products covered by reference prices is extended and an individual reference price may be set for each presentation of a species marketed on a large scale so that protective measures can be applied selectively. There is provision for applying protective measures progressively, for example, [Article 20(4)]

(a)suspension of the autonomous Common Customs Tariff duties may be wholly or partly lifted, on a temporary basis, for the product concerned,

(b)in the case of specified products imports may be affected only at a price which is at least equal to the reference price, and

(c)in the case of specified products a countervailing charge may be applied to bring the import price up to the level of the reference price.

Financial Implications

6. Fifty per cent of the aids granted by Member States to producers’ organisations will be refunded from the Guidance Section of EAGGF (European Agriculture Guidance and Guarantee Fund). EAGGF expenditure on intervention from the Guarantee Section in the fisheries sector is relatively low (20 and 25 million EUA in 1979 and 1980 respectively) but has increased in recent years owing to the increase in the number of producers’ organisations. The Commission estimates that all the envisaged amendments will not involve a big increase in expenditure and that this increase should amount to about 7 per cent. Since the intervention system for fishery products was introduced in Ireland in 1976 approximately IR £2.1 million was recouped to producers’ organisations from EAGGF for payments of financial compensation for fish withdrawals to end of 1980. A total of IR £96,000 was paid to producers’ organisations in Ireland as grant aid towards formation expenses — 50 per cent of which is recoupable from the EAGGF. As the rate of intervention in the fisheries sector fluctuates from year to year, it is impossible to estimate the financial benefits likely to accrue under the proposal for future years.

Views of Joint Committee

7. The Joint Committee agrees that Regulation 100/76 was not operating in the manner envisaged. They agree that the proposed Regulation is in general an improvement while having reservations on some aspects.

8. In Ireland there are two producers’ organisations (1) the Irish Fish Producers’ Organisation Ltd., which represents the whole country and (2) the Killybegs Fishermen’s Association (Producers’ Association), which represents the North-West solely. These two organisations represent over 90 per cent of Irish fishermen and cover all areas of the State for intervention purposes. Accordingly, the Committee sees no merit in the creation of any further producers’ organisations, as it would lead to fragmentation and would not be in the best interests of the Irish fishing industry. However the measure should help to strengthen the existing organisations and give them more control over the market.

9. In Ireland the Committee understands that the intervention system has operated since 1976 mainly for eight key species landed, but the bulk of intervention has been for mackerel. In 1979, 24,217 tonnes of mackerel were caught, some 7,670 tonnes of which was withdrawn and in 1980, about 41,000 tonnes were caught, and about 10 per cent of this was withdrawn. The destruction of withdrawn fish where there is existing human need for food is unjust and the fishing Community and the market system are properly subject to ridicule and criticism as a result. The Committee recommends that further efforts should be made to dispose of such stocks in some better manner e.g. to charitable organisations through advertisements on radio and television or in the newspapers. Regarding treatment of withdrawn stocks, the Committee is advised that Member States generally want to avoid the danger of building up a “fish mountain”. Their opposition is based on past intervention experience with certain agricultural products though of course the same likelihood is not there for fish as it has a much shorter storage life. In regard to the level above which no compensation is payable for quantities withdrawn from the market, the Committee considers that 20 per cent of sales is on the low side and should be increased. It appreciates the difficulties which this might create but nevertheless feels that the limit could be increased to 30 per cent, with appropriate adjustments in the scale of payments.

10. The Committee welcomes the improved price structure which embraces the guide prices and consequential withdrawal and reference prices proposed under the Regulation. They should help to stabilise the market by ensuring more orderly and regular supplies and by enabling measures to be adopted against imports at abnormally low prices.

11. In regard to imports from third countries they do not affect the Irish market directly, as our imports are relatively stable but they would affect our exports to the Community market. Imports are, of course, necessary for processing industries within the Community. The Committee welcomes the fixing of the reference price at the same level as the withdrawal price and hopes that the measures proposed will avoid a repetition of the divergence which occurred in recent years. It trusts that the improved monitoring procedures set out in the Regulation will be adequate to enable the protection mechanisms to be brought into force with the least possible delay.

12. The Committee recommends that in Article 20(4) the expression “may be” should be amended to “shall be” and it considers that this amendment is of crucial importance. The purpose of this is to ensure that the application of the several stages of protection against low cost imports should be mandatory rather than optional.

Views of Outside Organisations

13. The Irish Fishermen’s Organisation Ltd. in its submission generally favours the proposal. It favours a tightening up in the present system regarding producers’ organisations but agrees with the Commission that monopoly status should not be given to such organisations. It welcomes the proposal to amend the rules for the fixing of the guide price by taking relevant current criteria into account. It also welcomes the proposed increase in withdrawal prices and introduction of the 10 per cent bracket. However, the IFO sees problems on the decreasing rate of compensation based on the quantities withdrawn and on the proposal for the carry-over premium (paragraph 5 above) to apply to specific quantities of fish withdrawn. Finally, the IFO are not satisfied with having the reference price at the level of the withdrawal price but argue that a minimum import price should be established.

14. The Irish Fish Processors and Exporters Association strongly supports major parts of the proposal in principle but has expressed reservations about certain aspects e.g. Articles 7, 14, 16 and 20, in particular.

Present Position of Proposal

15. The Department of Fisheries and Forestry state that the proposal is still at working party level. It envisages that the Regulation should be passed by the Council in June or July this year and that the new price structure should be in force by January, 1982.

(Signed) ALEXIS FITZGERALD,

Chairman of the Joint Committee.

11th March, 1981.