On the basis of the compromise from the presidency, which had already been discussed during the meetings of 29-30 April and 20-21 May 1996, the Council continued to examine in depth a number of the questions involved, including the level of Community set-aside compensation, national cofinancing by the operational fund, the recognition of inter-trade organisations and the system of quotas being applied to processed tomatoes.

Having been presented with Parliament’s opinion on the matter, the Council examined a compromise from the presidency on the two proposals for a regulation, as drawn up in cooperation with the Commission following bilateral meetings held during the March 1996 sitting. It was agreed that this would be further examined at the next meeting with a view to deciding on the reform of this sector during the May sitting.

The Opinion stressed that it was important to take account of geographical, social, cultural and economic diversity and referred to the severe impact that economic globalisation was having on the fruit and vegetable sector, which was particularly sensitive because of the size of its workforce, the geographical disparity of its social costs, the urban pressure acting on its production centres and various environmental problems. The products concerned were localized in areas where alternatives in respect of agricultural diversification were strictly limited and where the growing phenomenon of urban concentration brought additional expenses, to which had to be added the costs resulting from the abandonment of entire sections of territory. The opinion called for agricultural revenues and Community preference to be assured, for competition not to be distorted by monetary fluctuations and by disparity between social costs and for much greater attention to be paid to the direct and indirect consequences of commercial agreements with third countries. It praised the way in which specific situations affecting products of local and regional importance were being taken into account and also welcomed the proposals for organisations and interprofessional agreements aimed at promoting the efforts of producers towards product quality and respect for the environment. However, as the guardian of regional interests the CoR expressed concern about the risks of relocation and various radical measures such as grubbing-up.

At its meetings in October, November and December, the Council analysed the Commission proposal on the basis of the work carried out by the Special Committee on Agriculture and by the Working Party on Fruit and Vegetables. Today’s debate and, in particular, the positive statements from the Commissioner, augur well for a rapid conclusion of this dossier. The Council congratulated the members of the SCA and the Working Party as well as the Commission services on the effort and devotion demonstrated, which have contributed to a clearer understanding of the scope of the Commission’s proposal and to the identification of problems that this proposal raises at the delegations. No decisions can be reached in advance of the opinion of Parliament. It is, however, useful at this stage for the Presidency to set out the key issues on which compromises will be needed, as a means of targeting the technical work to be carried out in the Special Committee on Agriculture and its Working Group, and the Council’s work under the Italian Presidency. 1. Producers’ groups - It is a central principle of the Commission proposal that the producers’ organisations should deal with all the produce of their members, so as to allow the groups themselves to define priorities. The question arises, however, whether without damage to this objective, some degree of specialisation might be permitted, for example by providing for groups dealing exclusively with fruit and exclusively with vegetables, as indeed the Commissioner suggested. - The question arises whether the transitional period for the creation of the new producers’ organisations should be the same as the transitional period for the full adoption of the reduced prices fixed for withdrawals. - The question needs to be addressed as to whether the limit of 10% in the percentage of the revolving fund that may be spent on withdrawals could cause practical problems of implementation. An issue that should be examined is whether an alternative means could be found of achieving the objective that withdrawal should be an increasingly less important part of the tasks and objectives of producers’ groups. - In order to enable the producer groups to begin to work more easily, the question of paying advances, subject - as the Commissioner has stated - to the constitution of adequate guarantees, deserves examination. Similarly, the possibility of providing a somewhat higher level of Community financing of the revolving fund to assist the development of producers’ groups in the region where they are at present least advanced should be examined. The Commissioner’s open attitude for that suggestion should be emphasised. 2. Interprofessional organisations This proposal represents an important part of the total package but is subject to strong objections from some delegations. The implication of applying here the compromise solution that was applied in the case of tobacco, or the system proposed for wine should be examined. 3. Intervention system All delegations believe that withdrawal should not be the normal destination of production. The question that will need to be further examined is the way in which this objective can be achieved whilst still providing an adequate safety net.

The Council held a policy debate on this matter, on the basis of the intensive work already done by the Special Committee on Agriculture and the Working Party. The major problems considered in the course of the debate were: - the classification of products (quality standards); - the rules proposed for producers’ organisations; - the financial aspects and, in particular, the co­financing of contributions to the operational fund; - the new intervention and withdrawal arrangements; - the arrangements laid down for processed products, in particular for tomatoes. In conclusion, and pending delivery of the European Parliament’s opinion, the Council instructed the Special Committee on Agriculture to continue the examination of the proposals, taking account of the guidelines laid down by today’s discussions, with the aim of reaching political agreement at the December meeting.

Commissioner Fischler presented two proposals adopted by the Commission on 4 October that followed up the Commission communication of August 1994 on the development and future of Community policy in the (fresh and processed) fruit and vegetables sector. The Council held an initial discussion on the proposals. It had before it for that purpose an interim report summarising discussions within the SCA (on fresh fruit and vegetables only). It emerged from that discussion that the major issues on which discussion should be continued in future were the following: - the conformity of the Commission proposals with the undertakings by the Council and the Commission at the joint jumbo Council meeting in September 1993; - the fact that the proposals did not include = a number of products (strawberries, melons, nuts, etc.) and = reform of the processed citrus fruit sector; - reduction of Community aid without compensation or accompanying measures; - co-funding of operations by the Community, the Member States and producers; - criteria governing recognition, the objectives and obligations of producer organisations; - choice between the existing Community standards and adoption of the standards established by the United Nations Economic Commission for Europe (ECE/UN); - compatibility between the proposed measures concerning inter-branch organisations and agreements and observance of the principles of free movement and competition; - arrangements to be adopted for processed tomatoes; - tighter controls and their financing. In conclusion, the Council instructed the SCA to continue examining the proposals with a view to submitting a detailed report at its next meeting.