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        As  he  reported  to  the Council last  week,  Mr  Paleokrassas  has
        proposed  to the Commission changes to the market  organization  for
        fishery  products(1).  The  proposal is  intended  firstly  to  help
        resolve the structural crisis in the fishing industry. It also  lays
        down  terms for the recognition of producers' organizations  in  the
        countries  which are due to join the Union. Lastly, it  proposes  to
        extend  the compensatory allowance for Community tuna producers  and
        at the same time to simplify the scheme.

        The  measures  put forward to deal with the crisis  in  the  fishing
        industry were suggested in the Commission's recent communication  on
        the crisis (see P/94/43). They will make it possible for  producers'
        organizations  to  be  more effective and for  operators  to  assume
        greater responsibility by:

        -  extending  producers' organizations' rules to non-members in  the
           event of a crisis before the Commission has given its consent  to
           that  extension  and  not afterwards so as to  shorten  the  time
           required to take action;

        -  extending to non-members the requirement to observe the Community
           withdrawal prices where there is upheaval on the markets;

        -  providing   assistance   for   producers'   organizations   which
           contribute  to  improving the quality of products placed  on  the
           market;

        -  introducing financial compensation where there is a crisis on the
           market.

        Mr  Paleokrassas  points  out  that if  these  measures  are  to  be
        effective they will have to be backed up by action at all levels  as
        the Council concluded on 28 September. Fishing effort too will  have
        to  be  brought  into  line  with  resources  in  order  to  restore
        competitiveness  to the Community fishing industry  at  internatinal
        level.

        1. The  anticipated enlargement of the Union on 1 January 1995  will
           require some adjustments:

           -  As the Community agreed during the negotiations with Norway to
              maintain the Norwegian arrangements for recognizing producers'
              organizations, it is necessary to make provision in the  basic
              "markets"  Regulation  for the possibility  of  recognizing  a
              producers'  organization  exclusively for a specific  area  of
              activity.

        
        (1) COM(94) 403/2.

           -  The lists of products eligible for market support given in the
              Annexes to the basic Regulation must be supplemented.

        2. In the case of the tuna market, the Commission believes that  the
           supply  requirements  of the Community industry and the  need  to
           protect  the income of producers justify maintaining  the  tariff
           status of the products in question and the compensatory mechanism
           in  accordance with the provisions in force. However,  to  ensure
           that  production does not develop abnormally, with costs  getting
           out  of control as a result, the conditions under which the  said
           mechanism  is triggered should be reviewed. Furthermore,  in  the
           light of experience, the compensatory allowance scheme should  be
           simplified  so  as  to reduce the length  of  time  required  for
           payment of the allowance to the producers' organizations eligible
           for it.

        3. The  serious  crisis  in  the  fishing  industry,  while   mostly
           structural in nature, calls for adjustments to and innovations in
           the  common  organization  of  the  market  so  that,  while  the
           Community holds to its international commitments, the  conditions
           can be created to bring about an increase in producers'  incomes,
           which have been considerably affected by the crisis. To this  end
           it is proposed to:

           -  replace  the  existing  system  of  prior  appraisal  by   the
              Commission of the extension of producers' organizations' rules
              to  non-members  with an appraisal after the event  so  as  to
              shorten  the time required for implementation. The  producers'
              organizations  will  thus  be able to react  more  quickly  to
              market trends;

           -  introduce,  in  the  case of measures taken on  the  basis  of
              Articles 22, 23 or 24, the requirement on non-members  trading
              within  the area of activity of a producers'  organization  to
              observe  the withdrawal price. This measure will  ensure  that
              the  steps  taken  by the producers'  organizations  when  the
              market  is disturbed are not rendered ineffectual or  useless.
              Furthermore, the measure will improve the compatibility of the
              reference   prices/minimum   import  prices   mechanism   with
              Article XI  of the GATT by introducing a more rational  system
              to  restrict  supply on the Community  market  should  minimum
              prices be applied.

              Provision  needs  to be made in consequence  for  compensation
              from   the   Member  States  to  non-members   of   producers'
              organizations who are obliged to observe the withdrawal price;

           -  grant  special recognition and temporary assistance  to  those
              producers' organizations which draw up and implement a plan to
              improve   product  quality  and  marketing  approved  by   the
              competent national authorities. The system is modelled closely
              on that used for start-up aid and its aim is to encourage  the
              organizations in question to develop a policy of adding  value
              to  their production, which should increase the average  price
              of  fresh  products. The aid in the first,  second  and  third
              years  may  not  exceed  3%, 2% and  1%  respectively  of  the
              production  value  of  the products covered by  the  plan  and

              marketed  by the producers' organizations. As a percentage  of
              the  research  and  administrative  costs  allocated  by   the
              organization to carry out the plan the aid may not be  greater
              than 60% in the first year, 50% in the second year and 40%  in
              the  third year. The aid shall be paid in the  year  following
              that for which it was approved;

           -  provide for special financial compensation for withdrawals  in
              cases  of exceptional intervention for a limited period  as  a
              result  of  market disturbances. Where, in  a  given  calendar
              month,  the withdrawals effected by a producers'  organization
              reach (in the case of a product listed in Annex I A or D)  10%
              of  the quantities of the said product placed on sale  in  the
              same   month,   the  Member  State   grants   the   producers'
              organization   concerned   special   financial   compensation,
              equivalent to 95% of the withdrawal price applied by the  said
              organization,  for the quantities of the product  in  question
              withdrawn  from  the  market which do not exceed  14%  of  the
              quantities  placed  on  sale in the  month  in  question.  The
              mechanism   will   improve   the   liquidity   of   producers'
              organizations  which  are  called  upon  to  make  significant
              compensatory payments to their members in times of crisis  and
              are  often obliged to increase membership dues in order to  do
              so.

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