Approval of the Minutes
President
The Minutes of yesterday's sitting have been distributed.
Are there any comments?

Kellett-Bowman
Mr President, we are used to having the Minutes in two parts. This morning we have them in four. How will we know when we have got a full set?

President
We shall leave that to the intelligence of the Members.

Wijsenbeek
Mr President, in yesterday's Minutes, halfway down page 19, it says the following: "Mr Wijsenbeek referred to his remarks at the start of that morning's sitting (part 1, item 1) and reported on how he had spent his time until the resumption of the sitting' . This Dutch is not correct, but the fact is I have still not received a reply from the Bureau as to whether it is actually true that the Bureau is now going to record Members of Parliament entering and leaving Parliament on camera. Would you also state whether this is in accordance with the legislation in Europe on the protection of personal privacy and tell Members - because as the Bureau you wish to monitor how we spend our time - how many extra members of staff this will take and what that will cost the taxpayer, so that we can weigh one up against the other.
I believe that we Members are entitled to a reply to this question from the Bureau and we have not given you carte blanche to take measures that mean we can be spied on and be monitored from dawn to dusk.

President
Thank you very much Mr Wijsenbeek. As usual, I have no idea what you are talking about.

Posselt
Mr President, yesterday, in the debate on the banana issue, my colleague, Mr Liese, discovered a discrepancy between the resolution we were debating and one that had been handed in. It concerned three missing words. I should like to ask you if you have now clarified this matter.

President
I understand it is still being investigated.

Macartney
Mr President, yesterday a very important decision was taken. In the absence of any Members from Wales, I should like to take it upon myself to congratulate the people of Wales on the exercise of their democratic right to self-determination. We look forward to Wales and Scotland going forward together.

President
I would endorse your congratulations to the Welsh. It is probably just as well no Welsh were here, given how narrow the vote was.
(Parliament approved the Minutes)

Corrie
Mr President, I should like to raise another matter. Travelling to this place each week I have to pass through Charles de Gaulle Airport, Paris. On three occasions this year I have been refused entry into Terminal D on my laissez-passer. I am told that it is not an official document. On the last occasion, last Monday, I was actually held aside and not allowed to pass until I produced my national passport. Surely the French realise that we have a Union and that we have a laissez-passer which gives us the right to travel anywhere within the 15 nations.
(Applause ) Could I ask your office, in that case, to write to the French immigration authorities, pointing out that it is a document which does allow us to pass, so that we do not have this embarrassment in the future.

President
I agree with you entirely. As you know, I used to travel on the same flight with you. I stopped doing so because I was so damned annoyed at the inconvenience at Paris airport.

Gillis
Could I ask you to include Frankfurt?
(Laughter ) I travel through Frankfurt airport and there our European passports have been described by customs as a joke.
(Laughter )
President
All right. I have Paris, Frankfurt and I also heard someone say Amsterdam. Anyone else can give it to me in writing.

von Habsburg
Mr President, I would also request you to instruct the German authorities to finally recognize European passports because one has, from time to time, great difficulties - including, I am sad to say, even at Munich airport - which is generally the best airport in the world.
(Laughter ) It would be a good idea to take steps to secure universal recognition so that all these countries recognize the European passport.

President
Thank you, Mr von Habsburg.

Votes
Graefe zu Baringdorf
Mr President, ladies and gentlemen. On behalf of the Greens I should like to move referral back to Committee under Rule 129, on the following grounds: we have just accepted Amendment No 22 by the Green Party. In this we say that under no circumstances do we want a 100 % subsidy. Yesterday Mr Fischler, in anticipation of this vote, said he would not accept the 100 % withdrawal, and that he insisted on it. Now we come to the interesting bit, where the sales subsidies, which is what concerns the rapporteur and ourselves, will only be 60 % and 80 %. The 100 % subsidy is for the technical introduction, in other words, the logistics of introducing labelling into the industry. 100 % is proposed for this category. Now, the Commission did not put this into the main part of the article, but included it exclusively in the financial section. So the 100 %, which we cannot do anything to change, is included there.
I spoke to Mr Fischler again yesterday. He made it clear that there had been a lapse in the information chain within the Commission, and that they had not intended this. So we need to refer this report back, so that the Commission can correct its line and follow our suggestions. I urge Members to support referral back.

Hardstaff
Mr President, I want to speak against referral back. This has already been delayed. The original request was for urgency and for it to go through in July to enable this programme to go ahead.
This is something which is going to save the Community money. If we spend money to try to ensure that people eat our beef, we will save a great deal of money on storage and intervention in the longer term. This was the whole point. The Commission is very anxious to set this in train to save the Community budget. I do not want to see it held up any further.

Papayannakis
Mr President, I am in favour of referral back. Yesterday Mr Fischler systematically and insistently refused to answer questions or to give any clarification on the disclosure at the parliamentary Committee of Inquiry that there are loopholes in the law and that it is possible to violate, legally, the legislation which we have gradually been building up over the year for identifying animals, labelling meat, and reestablishing consumer confidence. He gave no explanation and gave no pledge to improve the situation. I am therefore in support of referring back the regulation so that the Commission can consider it better and so that Parliament can do its work better on behalf of the citizens and consumers.
(Parliament decided against referral back to committee)
(Parliament adopted the legislative resolution)

Graefe zu Baringdorf
Mr President, we have lost the vote on for referral back to the Committee, but the problem remains unsolved. We have been successful, nevertheless, in having this report dealt with under Rule 129a, and that means that it goes into a second reading. Before that we shall follow with keen interest whether the Commission resolves its insecurity, which was obvious, about the withdrawal of the 100 % subsidy for the industry.
The introduction of labelling concerns not just the industry, but also farms, although farmers do not get repaid a penny for their efforts. I think that is sensible, just to make my view on it clear. I do not want any subsidies. However, if one side wants to introduce something which should be taken for granted, namely the identification and traceability of beef for consumers, and must accept the financial liability, then there is no sense in paying the other side, the industry - and then a full 100 % at that!
Admittedly, setting up the logistics in abattoirs for this tagging is not insignificant, but 100 % subsidies are almost immoral. When this is contained only in the finance section, it smacks of lobbying, of cooperation between the administration and lobbyists of the meat industry, who do not wish to bring this into the parliamentary process, but would force it on us more or less behind our backs. We must reject that most emphatically. We want to deal with this here in Parliament, and I hope that will happen at second reading.

Jové Peres
Mr President, on behalf of my group I first want to acknowledge Mrs Hardstaff's excellent work, and that of the draftsmen of opinions, Mr Papayannakis and Mr Giansily. Moreover, I should like to state that my group considers it absolutely necessary to bring in measures to ensure that consumers are correctly informed, by means of correct labelling.
Nevertheless Mrs Hardstaff's report, which as I said is excellent, needs to be considered within the context of the BSE crisis. Both in the Committee of Inquiry into BSE and in BSE monitoring, shortcomings have been detected which can make this legislative initiative less effective. It is clear that there is a shortage of legislation covering the identification of beef and veal. At the moment there is nothing to stop the removal from cattle carcasses of the identification marks which specify their origin, and this is creating serious problems. The existing shortcomings in the regulations on identification and monitoring can produce effects which are the opposite of what is being sought.
Moreover, since there is no guarantee that the Commission will correct these shortcomings immediately, my group has voted against the legislative resolution, to put pressure on the Commission to make the necessary amendments to the regulations and monitoring.

Andersson, Hulthén and Waidelich
We would like to thank the rapporteur for a thorough report. However, we have abstained from voting on the proposed amendments concerning the proposal for a publicity campaign to promote the consumption of beef. In our opinion, consumers themselves can decide what kind of food they want to consume.
To subsidize campaigns for a certain type of meat is inappropriate. Campaigns for different types of products should be paid for by the food industry and not through Community funds. We think it would be preferable to let the price mechanism of the market create a working balance in the beef sector with supply matching the price allowed by demand at the consumer stage.

Poisson
Given the suspicion that beef is arousing among consumers, the best and most immediate strategy was to prove the origin of beef products and develop communication.
In France, for example, despite accusations of protectionism levelled by certain Member-States, a communication campaign was developed by deploying different advertising media at sales outlets and with the financial backing of professional groups. Thanks to this strategy, the worst was probably avoided although the market was severely shaken. Between 60 and 70 % of French consumers questioned said that they found the "original beef' logos reassuring. Through this initiative the decline in consumption was limited to 15 % on average in the second half of 1996, whereas following the announcement of the outbreak of BSE, the decline exceeded 30 %.
Clearly, the Commission's proposal is a move in the right direction but I fear that the Hardstaff report will lead to a generalization of products by supporting a generic message. This is likely to penalize high-quality beef products heavily as they would then be confused under a European generic label without explanation.
I believe, however, that the identification and traceability of beef products are all-important.
Information for the consumer's benefit is crucial in this context and is necessary to help kick-start the market which has been hit hard and which has heavily penalized producers upstream.
We must not lose sight of the fact that the consumer holds the trump cards here.

Schnellhardt
Let me say at the outset that all participants are agreed on the aim. It concerns re-establishing consumer confidence in the safety and the quality of beef.
We appear not to be in agreement, however, about how this is to be achieved. The Commission, which proposes financial support of both sales promotion measures and an information campaign on the marking of beef, seems to possess the majority support of this House.
I consider this move to be a mistake, however, because it does not define the main point of effort sufficiently clearly. The insecurity and mistrust of the consumer stem mainly from the fact that on the European internal market the origin of beef and beef products is often unstated or untraceable. It is for just this reason that the new regulation on identification of beef and registration of cattle has assumed such importance. The consumer can only obtain information on the origin of beef by means of identification and registration, and only thus will confidence be created.
I think it is urgently necessary to establish political priorities. This wish was clearly expressed at the time of the debate in plenary session on the identification negotiations. It has become diffused in the current debate, however. If we declare our wish for simultaneous and equally weighted financial subsidy, both of sales promotion measures and of an information campaign, then we are failing to make the clear political statement which is so important in the struggle against BSE and its effects. Health and consumer protection have priority in European policy; security of agricultural markets is only possible when this initial priority has been ensured. Certainly, sales promotion measures are necessary. But we should concentrate our limited resources on what we think is of first importance, both politically and economically, and here is the creation of consumer confidence by clarification of the origin of beef.

Souchet
As my colleague Edouard des Places mentioned during the debate, our group rejects most of the amendments proposed by the rapporteur. Indeed, at the present time only quality meat products offering health, taste and organoleptic guarantees are eligible for European Union aid with a view to financing promotional campaigns.
What exactly does the rapporteur propose? Mrs Hardstaff, in her report and various amendments, asks that all beef products benefit from Community aid in favour of promotion.
These proposals are contrary to the interests of the quality meat industry. I know personally that the United Kingdom is seeking an early lifting of the ban on beef. How will the lifting of this embargo impact consumer attitudes?
I strongly suspect that Mrs Hardstaff wants British beef to benefit from Community aid for promotional purposes. Of course, given the poor press that beef is getting at present, Mrs Hardstaff calls for a general promotional campaign, which is unacceptable.

Agri-monetary system for the single market
President
The next item is the report (A4-0261/97) by Mr Hallam, on behalf of the Committee on Agriculture and Rural Development, on the report from the Commission to the Council and the European Parliament on the agri-monetary system for the single market: 1 July 1995 to 30 June 1996 (COM(96) 0636 - C4-0026/97)

Hallam
Mr President, I am delighted to see the rather large turnout of Members today, which indicates the importance attached to this subject.
I should like to explain very briefly what we mean by the agri-monetary system. Basically, it is a way of ensuring that our farmers have some stability in the way in which they plan their businesses. One of the problems we have at the moment is that this lifeline - if I can use that analogy - is sometimes rather long and at other times rather short, according to the fluctuations in the monetary market.
In the past, Parliament has quite rightly asked the Commission to provide it with some information about how this system is working. It has produced a report - which is the one under consideration today - for the period between July 1995 and 30 June 1996. The report includes information on the granting of compensatory aid, an assessment of the economic and financial impact and proposals for the future of the system. Quite rightly, the Commissions says that it would be difficult at the moment to make vast changes to the agri-monetary system on the very eve of European Monetary Union. Consequently, that is something we will have to discuss at some point.
Nevertheless, the Committee on Agriculture and Rural Development looked at the report. We agreed that we could not make any dramatic changes at this stage but there would be changes to be made in 1998 as we approach EMU - if we do approach EMU. So we have taken the opportunity of making a number of suggestions.
Firstly, we want more simplified rules, and we want to ensure that people understand exactly how the system works. Secondly, we want to ensure that there is a ceiling and a floor around which the money cannot vary dramatically.
Farmers in my constituency have lost nearly 20 % of their earnings under so-called green pounds in the last year. There are already too many variables in farming and it is essential that we ensure that these variables, which we can control, do not fluctuate so widely.
Finally, I want the agri-monetary system to be self-financing: when it goes up and when it comes down it means that we can do some cross-referencing of money. This will ensure that the people of Europe are well served in their taxation.
My friends, I wonder whether we will be having this discussion in ten years' time. It may well be that with the advent of EMU events will overtake us and we will get to a position where every farmer is able to receive the same amount of aid in the same package wherever they are in the European Union. I want to assure the farming community - not just in my constituency but in every corner of the European Union - that this Parliament is aware of the difficulties which it faces, and this Parliament will do its best to ensure that it can serve its consumers as effectively as possible, at a decent price and in a way that enables them to maintain a relatively good lifestyle.

Mayer
Mr President, ladies and gentlemen, yesterday, when Mrs Fontaine was in the Chair, I spoke for rather a long time. Today my speech will be quite brief.
In the past it has been demonstrated many times over the years that changes in exchange rates have led to very considerable disagreements and distortions in competitiveness. The agriculture of Member States has had to offset this in some way or other. The compensatory mechanisms have been insufficient. In the reporting year 1 July 1995 to 30 June 1996 - an agricultural accounting year, therefore - there were hardly any exchange rate movements, and where there were any, they were exactly the opposite of previous years.
I should like to congratulate the rapporteur, Mr Hallam, on his report. Even in the committee stage there was general unanimity, which I should like to record today. There is support for it today, as well. We should like to emphasize the demand for continuation of efforts towards simplification and greater transparency, and in particular the introduction in 1998 of new regulations, even though monetary union, the enlargement of the Union, the WTO round of talks, and particularly the discussion on Agenda 2000, are imminent and will be very emotive. Enough about that for today.

Rosado Fernandes
Mr President, Madam Commissioner, let me immediately congratulate Mr Hallam on the enthusiasm he has put into the discussion of this very important subject for each and every farmer in Europe, north or south. Although we agree with the Commission's theses on the agri-monetary system in force, that is, no basic change in the present arrangements, simplification without comprising the system as a whole, or abolishing the agricultural conversion rate and reappraising possible future choices, we nevertheless consider it necessary to make some comments.
In the first place, it is probable that the agri-monetary system will have to be revised retroactively - it is not the first time this has happened - and not just in view of the introduction of the Euro, which is actually becoming a European ideal. During the whole period up to that date there are very good grounds for apprehension about a significant increase in the EAGGF costs with dangerous instability on the exchange markets.
Limited presence of the Euro in the early stage of implementation would significantly prejudice agricultural production, whose equilibrium depends - as we all know - on a complex and integrated common architecture, weighted as the result of a continuous, difficult and controversial political adjustment. There is acute sensitivity to and fear of the implications of this scenario in the agricultural world, a sector prey to the negative effects of any weakening of European structures, especially after the difficulties experienced as a result of excessively strict monetary convergence criteria.
The agri-monetary report presented by the Commission at the end of 1996 fully confirmed suspicions of deviation of major financial flows, which will take the increase in the base level of the agricultural guideline to about 28 %. A situation of this magnitude for the European Union budget will, in practice, compromise the CAP reforms and make it completely impossible to make the necessary improvements in the structures and organization of markets for Mediterranean crops.

Mulder
Mr President, I should also like to begin by complimenting Mr Hallam on his report. If I have read the report properly, I have understood between the lines that he is already a long way ahead of his government and his party because he is already arguing in favour of all the countries of the European Union being part of the future EMU. I think that is a courageous point of view for a member of the Labour Party.
In the first place, I believe we can say that since the abolition of the switch-over mechanism, the present agrimonetary system has worked extremely well. The costs are considerably less and at the moment the difference between the green rate and the normal rate is about 2 %. With a bit of luck it will become even less over the next year. But there will have to be a bit of luck.
I wonder whether the Commission is making adequate preparations for the abolition of the green rate if EMU ever does come about. Because what will happen then? Will there be compensation for the farmers or will prices be temporarily increased so that the farmers in Europe do not suffer any disadvantage? As the Finance Ministers have already made clear, in May certain rates will be "rivetted' to each other and I think that it is also appropriate for European farmers to know what will happen to the green rate system. Will they also be rivetted to each other? Because that then automatically means that the present system will become superfluous. The big question will be: what will happen to those countries and those currencies that do not take part in EMU? Will there be a similar system of application, etcetera? The main point is also - and I am mentioning it because I am the rapporteur for the 1998 agriculture budget - that in the whole agriculture budget for 1998 not a single provision has been made for contingencies of this kind. And I wonder whether that is a good thing. It is quite probable that nothing much will happen until after 15 October 1998, but if the currencies are being rivetted together in May, then something could happen the green ECU and I think the Commission should be ready for this contingency.
I should also like to know the Commission's position on what Mr Hallam has just set out: at the moment there is an upper limit of 5 % before action is taken and a lower limit of 2 %. Is it possible to even them up: for example, both at 3 % or both at 5 % or are they just mentioned because in the future, after EMU has come about, these things must be neutral in the budget?

Souchet
Mr President, ladies and gentlemen, this present report from the Commission keeps the pledge given at the Agriculture Council meeting in June 1995 to compile a report each year that analyses the impact of currency fluctuations and the current agri-monetary system on the CAP and the single market, together with suitable proposals to counter any difficulties that might result. Parts A and B are devoted to a description of the monetary and agri-monetary events that occurred during 1995-1996, including the granting of compensatory aid. The drafting of preamble A, as proposed in Amendment 1, tallies with the part described in the Commission's report. For these reasons we will vote in favour of this amendment. Part C contains an approach on how all this will economically affect agricultural markets and the income of farmers, while part D assesses the impact of the agri-monetary system on Community achievements.
In substance, the Commission's annual report on the agri-monetary system proposes abandoning the green tariff for import duties by emphasizing the need to ease agri-monetary processes. Mr Hallam's initial draft report proposed this option. Under the current system, two tariffs co-exist to calculate customs tariffs: the customs tariffs and the green tariff or agricultural conversion rate. We all want to simplify this system but unlike the rapporteur's initial proposals, this simplification must not only entail the application of customs tariffs but, conversely, the systematic application of the green tariff.
In fact, the green tariff is higher than the customs tariff. The conversion rate differential between these two tariffs may reach 5 %. Consequently, the proposals of both the Commission and the rapporteur tend to lead to a lessening of Community protection. We all know that in the very tough international context that we are experiencing the principle of Community preference is constantly under threat and is often challenged both by the WTO agreements and the host of agreements signed by the European Union with third countries. It is therefore paramount to ensure maximum possible protection and hence preserve the green tariff. The latter will continue to apply for repayments and domestic market prices, whatever the method of calculation chosen to calculate customs tariffs. In the amendment I have tabled with my colleague Edouard des Places, which was passed by the Committee on Agriculture, I proposed an effective means of simplification. Effective simplification entails the use of the green tariff to calculate customs tariffs, as indeed it is already used to calculate repayments and domestic market prices. The other amendments tabled with Mr des Places in committee, which were all adopted, enable us to support the rapporteur's resolution, apart from preamble A, to which we prefer the wording of Amendment No 1.
In conclusion, Mr President, we all want to see an easing of the administrative formalities that European enterprises need to complete. Our approach diverges from that of the Commission on one specific point: we want to preserve community preference as far as possible. The choice of a single customs tariffs demonstrates that the Commission has systematically opted for solutions that do least to safeguard the interests of the European agricultural economy. No international agreement or legal stipulation obliges the Commission to propose the customs rate instead of the green rate for customs tariffs. So why does it do this? Following these proposals and especially after the approval of the Agenda 2000 project, I, like many farmers, wonder whether the European Commission really has the will to preserve the one and only genuine integrated Community policy which broadly gives the European Union legitimacy - I refer to the Common Agricultural Policy.

Hardstaff
Mr President, I should like to add my congratulations to our colleague, David Hallam for the excellent report that he has produced, which actually sheds some clarity on what is a very, very complicated issue, namely the way in which the agri-monetary system works. I certainly feel, having read his report, that I understand it very much better.
I would also like to assure colleagues that he did not write the text of my speech this morning, any more than I did the text of his speech yesterday on my report. The compliments are meant very sincerely.
One of the reasons for welcoming this report is that farmers have to contend with so many uncertainties in their job. One very heavy storm or two or three weeks of very dry weather at the wrong time of the year can make all the difference as to whether they make a profit or loss on a whole year's work.
Fluctuations in exchange rates add a further hazard in terms of forward planning. The agri-monetary system is supposed to give some protection against this. However, as the report points out, the rises and falls in exchange rates do not necessarily balance each other out and adjustments are necessary to ensure that farmers in one group of countries are not disadvantaged through such monetary movements.
I very much welcome the proposals in Mr Hallam's resolution recommending the maintenance of maximum stability in the run-up to the introduction of the Euro. We want only minimum changes in the existing system, those which are required to maintain financial equilibrium in the agriculture sector during this interim period. I believe that farmers throughout Europe will welcome these recommendations as uncertainty is their greatest problem in an area where long term planning is absolutely essential.

McCartin
I too want to congratulate Mr Hallam on his report and thank him for his heroic efforts to shed light on a very complicated subject. I once heard a former member of the Council of Ministers say that he put the question informally to all of the finance ministers who were seated around the table: ' What are NCAs?' . There was not a single minister able to explain that. They had to send for someone in the Commission. Mr Hallam has gone one better than that.
I take issue with one point in the opening of the first paragraph of his report which says that there is considerable doubt about the whole question of EMU, or words to that effect. We, in this House, should not accept that there is any doubt about EMU. Parliament has to accept that EMU is going to proceed according to the timetable. By the middle of next year we will, in effect, have European monetary union for perhaps 80 % of the entire economy of our 15 countries and we should proceed on that basis.
Another point I want to make is that Mr Hallam seems to suggest that we might continue with this system after monetary union has been put in place. Even if it does not cost the Community budget any money, it gives some farmers in strong currency areas payments at the expense of farmers in weak currency countries. I could not agree that there is any need for that.
I believe that we will have monetary union by the middle of next year. Once the rates are fixed, this makes the whole agri-monetary system totally redundant. We will have something like 80 % of the economy of the European Union in the system and there will be one or two countries who want to join but whose currencies are too weak. It would be very wrong if we were to suggest that there should be a tax imposed on the farmers exporting from those countries if their governments are forced to submit to a devaluation of their currency.
On the other hand I cannot accept that countries which have strong currencies and are eligible to join the European Union, but are not willing to do so, should be given the facility of subsidizing the nominal reductions in prices which occur if their currencies appreciate against the Euro. To do this would be to offer some sort of an incentive to those countries not to participate in monetary union if they have strong currencies and are eligible to do so.
I believe that we should proceed on the basis that we will use the Euro from the day that the currency rates are fixed. From there on, the entire system is redundant and farmers within the system have absolute certainties while farmers outside the systems will deal with the problems just like any other sector in their economy - manufacturing, industry, services, importing or exporting. They exchange their money at the rate that the Euro gives them. There is no need to have any other system. I can understand in the past why there was political pressure in countries like Germany and Holland where currencies were appreciating very rapidly. There was political pressure to give some concessions.
I recall that in 1992, in a report that I wrote, Parliament rejected the switch-over system. That system eventually incurred costs for the European budget. My group did not agree with me at the time. But that system incurred costs of something like ECU 7 billion in the European budget. I was against it because it provided for unplanned and unscheduled increases in farmers' incomes which they were not looking for and did not expect. If we had that ECU 7 billion today to devote to the rural development aspects of our agricultural policy, it could be put to use to achieve social and economic objectives which are closer to the hearts of most people in this Parliament.

Daskalaki
Mr President, I would like first of all to congratulate Mr Hallam on his report on a very sensitive issue. However, I still have many worries, as do other Members, about certain proposals of the Commission.
The Commission proposal on the agri-monetary system of a single market is, in its basic outline, correct. The rapporteur was quite right to emphasise that at the present stage it is not advisable to make vast changes, as the third phase of Economic and Monetary Union from January 1999 will make these changes.
I would like to add, however, that, particularly in respect of the proposed safety net, in section (d) of paragraph 1, with a ceiling and a floor in local currency, this cannot exceed the limit of + 2-3 % at the most, and it appears that section (e) of the same paragraph causes more problems than it was meant to solve. In my opinion it would have been better to remove it completely. Such a possibility of redirecting community funds, as is proposed here, will very easily lead to countries with strong economies playing monetary games with exchange rates at the expense of economically weaker countries, which will not be able to do anything about it. What is more, it limits the free exercise of a policy of public economy by Member States in the run up to EMU, since this section is in fact a system of rewards and punishments. When a country with a weaker economy is obliged to devalue its currency in order to achieve economic recovery and a more conducive environment for exports, then the European Union comes along with this system and punishes the farmer. In other words, it takes money from the weakest members and gives it to the strongest, thus perpetuating a vicious circle.
On the one hand the Commission points out that there are no great monetary fluctuations, but it also states that strong currencies have been devalued while other currencies have tended to be revalued. This may be a fact, but it is not sufficient to make us resort to such measures. In his conclusions to the report under consideration, the rapporteur supports the Commission in its stance that the Community must in some way end its present guarantees of farmers' incomes. "The Community role should be to even out and soften the effect of appreciable fluctuations, rather than to ensure, as the present system does, that whether a currency is devaluing or revaluing, farmers in both situations get more' , as he puts it. In accounting terms this position may have a basis. In practice, however, farmers do a very difficult job, with many imponderables, dependent on thousands of external dangers, not only weather conditions and natural disasters, as has been mentioned here today, but also decisions taken by technocrats at a European level.

Virrankoski
Mr President, Mr David Hallam's report on the function of the agri-monetary system for the years 1995-1996 describes the scheme admirably. I would like to thank him accordingly. With the green ECU scheme there is an intention to implement the two goals of article 39 of the Treaty of Rome: the guarantee of a reasonable standard of living for farmers, and the freeing-up of markets. In serving these basic tasks the system has done well. This of course has been helped by the relative inter-stability of the currencies of the EU Member States. There was no currency crisis during the early part of the decade.
In the future the agri-monetary system has to face two challenges: the possible implementation of the third stage of EMU, and agriculture turning its attention to world markets. The switch to a single currency from the start of 1999 should bring a certain degree of stability to the common agricultural policy. Those Member States which belong to the EMU will no longer experience any major monetary fluctuations. On the other hand, there will remain the problem of those countries that possibly stay outside the EMU area. These important agricultural countries may, at least as far as we may gather from our open debate, include Britain, Denmark and Sweden, and perhaps others. There are no plans by the Commission for a new system. The formulation of the system, however, is becoming a burning issue, as other speakers have mentioned.
The second question is agricultural production and its importance, even more than before, in view of world markets. The basic principle in agricultural policy, as contained in Agenda 2000, is the reconciliation of the level of agricultural aid with world market prices. World markets are, however, dominated to a large extent by the US dollar. Over the last year the dollar has increased in value by more than 20 % in relation to the ECU. This may be at least partly due to the uncertainty that prevails in the world with regard to the single currency. Because the new Euro exchange rate might be particularly unstable in the early stages, there may be large fluctuations in prices for agricultural products on the world market when they are converted into Euros. This of course would be promptly reflected in EU internal prices and agricultural aid, when there would be rapid swings in value. For this reason, the internal connections in Agenda 2000 to world market prices and via them to the US dollar, for example, must be considered thoroughly. It is worrying that, with the establishment of the Euro, prices for agricultural produce and the value of agricultural aid might not grow and, indeed, may instead fall.

von Habsburg
Mr President. May I first of all turn to my friend Mr Hallam, who started by saying with some justification that he unfortunately had to deal with this most important issue before a very empty Parliament.
I have been here since the beginning, and so I should like to offer him some comfort by saying that in my experience those who are here on a Friday represent quality; those who are absent do not!
Mr Hallam's report comes at just the right time. He emphasized in his speech term, that today one can only work in the short term, because a very big change is imminent in the whole monetary system. In this very debate it has become clear once again how important it is for us to have a common European currency.
I can only say on behalf of my own electoral constituency of Upper Bavaria that our farmers are waiting for this European money, because our main trade takes place with Italy, and of late there have really been huge fluctuations in the Lira rate, causing our farmers the most serious problems. As soon as we have a European currency, that can no longer happen. We shall then have stability, we hope, and I would say that the whole of Mr Hallam's proposal is really only a temporary solution, but a vital one.
It is really important in all questions to do with agriculture, that we create a temporary solution. In my personal view the long-term outlook for agriculture is excellent. There is one simple reason for this: our industrial society is running at full tilt into a cul-de-sac. We have built up most of it on non-renewable raw materials. Now the time for renewable raw materials is approaching. We should take note of the fishing wars as a major warning, though.
Only ten years ago we were told that the oceans were an infinitely large resource, and we should solve all our problems there. Today we already have problems with fishing conflicts between Europe and Canada, Europe and Africa, France and Spain. We must recognize that the end has come for non-renewable raw materials. Renewable raw materials will now come from agriculture. If you study the problem a little and do not allow yourself to be blinded by criticism from certain large multinational companies, you will see quite clearly that that is no futuristic dream.
Let us take fuels, for example. Last time I drove to the plenary session in a car that was propelled by natural oil; not rapeseed oil, but an oil derived from grasses. It is wonderful to drive with it. It is a fact that in Germany everything possible is being done to stop the construction of a network of petrol stations where this oil can be bought. This is because it would be much cheaper than conventional products, probably because the state has not yet fully extended its highway robbery to include it. For us, the most important thing is to do everything in our agricultural policy for the maintenance of the agricultural structure against the day when it is really needed. I would say - at my age one can allow oneself prophesies by saying to oneself that one will not be here when the test comes - we must simply hope that this farming structure is maintained as the subsequent basis for our agriculture, and that we should do anything to create traditional measures for farmers.
So my warmest thanks to Mr Hallam for what he has said, because he represented this view very well. I think we should welcome this report and the resolution.

Graefe zu Baringdorf
I can second Mr Habsburg's words as far as the importance of traditional farming for our European continent is concerned. At your age, however, Mr Habsburg, you really should consider whether you ought to join the Green Party, because with your proposals you are not in good company with the Christian Democrats. This Christian Democratic Party has supported a policy here, and not only here, but in the national Parliament, which is heading in precisely the opposite direction: the destruction of those farms which you warn us we shall need. A farm goes bankrupt every two minutes in Europe, and those are the smaller businesses. Every year 500, 000 jobs are lost in European agriculture. That is a shocking figure, and if we want to stop this, then we must either accept your concepts, or we must do what has always been Green agricultural policy, and declare support for the traditional farming as the aim of agricultural policy.
In that case we should not have to mention this report, which we have to deal with here, because, Mr Hallam, there are two possibilities for beating the system: one is that we join in monetary union, which you already mentioned. The other system would be to withdraw from interventionism, state buying and export subventions. Because these monetary measures and the offset measures being debated here are only necessary for areas and products to which intervention is applied. These are, indeed, the classic market regulatory products not, for example, potatoes, not vegetables, not fruit, not the whole range of products which we in Baringdorf place on the direct-sales market, the direct path to producers and consumers, from our farm. These are completely unaffected by variations in the exchange rate.
Nor do we benefit from offset payments which are affected by this monetary system, but we obtain our prices from the market; we get the prices from the quality of our products and from the awareness of our consumers that these products have a special value for them. We see here increasingly that the value of the product is not merely measured by the quality intrinsic to it, which can be quantitively measured, but that these products are valued increasingly for their external quality - as one might call it: that there must be an agricultural structure to ensure that our old people do not become poor, that our variety of species is maintained, that there is a landscape with farming businesses and not one, as we can see in the former GDR, with farms devoid of any aesthetic value.
Europe's cultural achievements lie in rural areas and have their origins there. Without wishing to blow our own trumpet, farmers made this culture, they were the basis of this culture. If we attack this basis we should not be surprised if Europe's culture changes. For this reason these monetary matters have a great deal to do with general development; so I should like to complain here that we are using the discussion on Agenda 2000 - which comes next and in which such hesitant attempts are being made to leave an intervention system for one producing quality products - as a way of submitting in the European Parliament the brave outline of a new agricultural policy lying beyond all agro-industrial logic. Whoever then wishes to produce within a particular agro-industrial production for world markets - as authorized by our constitutional law and our free economic laws - may do so, but then, if you please, without state support. And for those who maintain the culture and the landscape, who produce quality, who are in contact with the consumer, who are actually not responsible for the billions we now have to spend on BSE, there must be support.
The agricultural budget is not too high, agriculture is not too expensive. The money is simply being spent incorrectly. It is being spent against maintenance of the structure, instead of in support of it. If we dare to make a courageous proposal here, and you, Mr Habsburg, reconsider the matter with the Green Party, then we shall be on the right path and your memory will be honoured. Then it will be said that at his age he still did the right thing!

Bjerregaard
Madam President, first of all I would like to thank the Committee on Agriculture and Rural Development, its rapporteur, Mr David Hallam, and the honourable Members of the European Parliament for the support they are giving to the report on the agri-monetary system for the single market in the period from 1 July 1995 to 30 June 1996 and for the debate in this House today. I am quite sure that Commissioner Fischler is looking forward to the debate on Agenda 2000 and agricultural policy, and I shall make a point of not dealing with that on this occasion.
I would like to address one point with which the Committee on Agriculture and Rural Development agrees. The Commission believes that it is too early to put forward a proposal for a Council Regulation on the adaptation of the agri-monetary system on the basis of the Euro. We do not yet know which or how many currencies will participate and we have no idea what exchange rates will be set, so nor do we know anything about the monetary deviations between these exchange rates and the current agricultural conversion rates. As long as there is uncertainty about the size of the problem, the Commission's view is that it serves no purpose to draw up a proposal for a Council regulation.
Even though the Commission can fully accept the guidelines in the proposed resolution, I shall allow myself to make a small observation on the first reading. I think the statement on the currencies' relative stability for several years is too general. I am therefore pleased that an amendment is being submitted for the first reading to limit it to the period covered by the report, that is, from 1 July 1995 to 30 June 1996. Mr Mulder asked some specific questions and I have been informed that the departments are also considering the questions mentioned here, as well as the various possible scenarios, so we are aware of the problems.
In conclusion I would like to say that the Commission agrees with the guidelines which are listed in the resolution concerning the future agri-monetary system, i.e. simplicity and transparency, a limited number of changes to the agricultural conversion rates and manageable costs. And with these observations, I thank you for the debate.

President
The debate is closed.
We will now vote on Mr Hallam's report.

Andersson, Hulthén and Waidelich
We abstained from the vote on this report. In our opinion it is desirable to change the agri-monetary system of the internal market as soon as possible. The cost of ECU 1.3 billion per year is not acceptable. The question is whether the system has not had its day, now that almost all farmers can gain financial benefit from it. There is no balance, since amounts paid out to farmers in countries which revalue their currencies are not balanced against savings on amounts which are paid out to farmers who receive more in national currencies because of devaluation.
We welcome the rapporteur's conclusions that agri-monetary systems should play a smaller role and cost substantially less than they do now. A saving in this area is desirable as soon as possible.

Van Dam
I wish to congratulate the rapporteur on this excellent report. It is reassuring to know that he also wants the rules to be simplified. I agree with him that this is not the time to make any dramatic changes, in view of the uncertainty about EMU. In the longer term a radical reform is necessary.
For the moment, fluctuations in exchange rates are not a thing of the past. We must endeavour to achieve a system that is self-financing. The conditions in paragraph 1 (d) of the draft resolution do not remove the openended nature of the system.
That open end could be closed up with an asymmetrical system. Compensation for farmers in devaluing countries can be frozen in the national currency, while the payments for the revaluing countries are established in ECU.
From the savings, the farmers in revaluing countries can receive compensation afterwards. In this way the agrimonetary compensation can be neutral in the budget.
With regard to the reform of the system, this Parliament already pointed out in 1995 the risk that the Member States would contribute to the compensation for the revaluation of the green rates. From the annual report of the Commission, it appears that Luxembourg, Germany and Belgium additionally compensated their farmers. The Netherlands, Denmark and Austria, among others, did not pay their share of the compensation.
In this way, producers in comparable circumstances are treated differently, depending on the country in which they are established. A European agriculture market does not tolerate this. With the review of the agri-monetary system, the possibility of national compensation must therefore disappear.
As early as 1969, the Council abandoned the unity of market and price, one of the basic principles of the common agricultural policy. Perhaps phase III of the EMU means the rehabilitation of this principle in an important part of the European agriculture market. The precondition will be that the exchange rates are stable. Owing to the macroeconomic differences between the Member States we cannot expect that by 1998.
It is very much to be hoped that from the start the European Central Bank will pursue a solid monetary policy geared to price stability. National currencies outside the EMU area will then tend to devalue with regard to the euro and certainly when countries from Central and Eastern Europe become members.
I wish to show by this that the budget problems will continue to exist as long as the Commission does not close up the "open end' . Therefore I would request the Commissioner to take seriously my suggestion for an improved agri-monetary system.
The Commission wishes to wait until 1 January 1999 to review the system. In the meantime the Ecofin Council has decided that next May it will draw up both the list of EMU participants and the bilateral parities between the currencies of these countries. It is to be expected that differences will arise with the mutual parities according to the green central rate. What does the Commission intend to do then? Will there be a sudden adjustment or a gradual one?
The decision of the Ecofin Council requires the Commission shortly after May 1998 to propose a review of the agrimonetary system. Can the Commission give an undertaking as to when it will present such a proposal?
(The Parliament adopts the resolution)

The President
Mr rapporteur, I congratulate Mr Hallam and welcome the fact that so many colleagues have attended the presentation of your report. This is a major feat for a Friday morning!

Adjournment of the session
The President
I declare the session of the European Parliament adjourned.
(The sitting ended at 10.10 a.m.)

